Beyond off sets: From Low Cost Advantage To Global Market Entry
Emotion has been at work since the DPP was written in 2005 and defines the defense offsets. Since then, each revision of the DPP has created waves of hope in Indian industry. However, the impact of the DPP (including revisions) on corporate finance in general and the Indian economy in general has yet to be firmly established. The main objective of the policy is to establish the national defense industry and become self-sufficient by reducing imports, thus promoting the economy and employment. While some companies have taken advantage of early shippers, others have been caught up in meeting their customers' "low cost" expectations, resulting in the creation of red oceans and low depletion and long-term sustainable business. It is time for these Indian companies trapped in the low-cost dilemma to set a long-term vision, precisely position themselves in the value chain, develop a core competition strategy with a Western counterpart, and plan their launch in global A&D. A market that enters the long-term benefits of universal growth and a much larger market compared to a market created only by defense offsets. With my experience working in the global A&D sector, we recommend using the following framework to outline your strategy. Positioning: Proper positioning in the value chain is the first and most important characteristic of a successful strategy. Companies must have a good understanding of the global A&D markets, the structure, the geopolitical factors that affect the business (or may affect them in the future), the competition, and the common value/benefit associated with each position alternative. The main thing is to assess the breadth and depth of the market and not limit the study to a few prime contractors and Tier 1 clients.
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