In Relation to Small and Medium Enterprises

As India is going to take prominent place in the world economy, the companies in India are drawing considerable attention. Though Indian companies are yet to become household names such as Ford, Coca-Cola, Toyota, or Sony, there are Indian companies such as Infosys, Reliance, and Tata Steel that have spread their name in significant ways outside India. When one looks at the so-called developed countries, it is clear that a few blue chip conglomerates had played vital roles in taking such countries to the developed stage. For India to develop, at least a few prominent companies or conglomerates must grow tremendously and become not just Indian, but global. With the spread of globalization, it has become clear that the growth and the sustainability of such big companies depend heavily on how they strategically develop, use, and deal with their partner companies. Such partner companies could be subsidiaries, spin-offs, or third-party companies that provide the parts or services; often they are Small and Medium Size Enterprises, commonly known as SMEs. The industry giants often have thousands of such partner companies. When Sony, the Japanese electronic giant was growing rapidly, at one stage it had close to 5000 suppliers. Same for Sonyís rival Matsushita, the Japanese home electronic giant; it, at one stage had about 6000 suppliers, from around the world. In order to access the world markets or penetrate certain consumer segments or to simply procure resources at reasonable costs, companies with global mindset must learn how to deal with and manage the SMEs. At the same time, SMEs which intend to grow in the back of globalization must learn how to deal with reputed conglomerates if they are serious about staying in business and developing sustainable growth. Growth of a giant conglomerate, along with the supporting SMEs means the growth of not just one company, but a whole region and the whole country. Take Toyota; on the heels of Toyota and its large SME supplier base, the whole region around Nagoya City, in Southern Japan, is contributing 10% of Japanís huge GDP. No SME at present can survive under the immense competitive environment unless they play the rules of globalization. This is why the warming business cooperation between India and Japan is gaining importance. The SMEs in both countries can mutually benefit if concerted efforts are made by both sides to develop fruitful relationships.