Growth strategy of MNC software subsidiaries in India

Abstract

In this study we investigate the scope of activity of the MNC captives/subsidiaries and the possible growth strategies for them. The findings of our report are based on the study done in few captive centers in India. Establishing captive centers continues to be a key option in organisation's outsourcing strategies. We researched captives with a special focus on the role played by them in meeting the sourcing needs of parent organisation. Based on the observations and study of three different captive centers of Dassault Systemes (Delmia), Safran Aerospace India and Stilog, we find that the subsidiaries were primarily set up to gain cost advantages and gain a foothold in the Indian market. The objective of the subsidiaries is also to gain competitiveness for the parent organization in their established markets. However not all has been hunky-dory and there are challenges and issues that the subsidiaries have to contend with. Few of the challenges include:_ Barriers due to strong Parent-Subsidiary relationship_ Lack of funds to develop new capabilities_ Difficulties in entering into alliances with other partners._ Attrition of qualified people