By Vidhan Rana

The business world has changed significantly over the last few decades as companies from the developing world, especially India, China and Brazil, have ascended to the world stage. One such company is Tata Consultancy Services (TCS), a subsidiary of the Tata Group. The Tata Group owns interests in steel, automobiles, information technology, communication, power, tea and hotels. TCS employs 116,000, of which over 30,000 are based outside India.

The company started out in 1978 as a service group to serve other functions within the Tata Group, and 40 years later, it is India’s largest software company, with revenues of $5.7 billion in 2008. Its first client in the United States was Burroughs, which at that time was the country’s second-largest computer manufacturer. TCS opened its first office in New York City in 1979 to market to other prospective clients in the information-technology industry. Today, TCS has 35 offices in the US and employs over 14,000 in the US and Canada.

Recently, things have not looked as rosy for TCS. Economic slowdown in the United States, especially in the financial services industry, has hit the company hard. All of the top 10 global banks are clients of TCS. Its profits declined by 6.17 percent in 2008 and its share prices have declined 11 percent since the beginning of the year, its highest fall since its debut in 2004. However, even in tough economic times, TCS’s sales in North America, the UK and Europe increased by eight percent in the first quarter in 2008. The company says traction in manufacturing, life sciences and retail verticals helped offset the losses in the financial sector.

Another developing-world company with a global presence is China’s Chery Automobile, the fastest growing automaker in the world. Founded just over 10 years ago, Chery sold about 381,000 vehicles in 2007. This may not sound like a big number, but considering that the company’s first car came off the production lines in December 1999, it is a huge accomplishment. Its plant in Wuhu, in Anhui province, used machines and engine technology purchased from Ford Europe for $25 million. Chery is currently the fourth-largest passenger-vehicle manufacturer in China. The company hopes to manufacture over a million vehicles by 2010, and export about 40 percent of them.


To accomplish its export targets, Chery is looking to enter markets in Europe and North America. It is working with Bertone and Pininfarina, the famed designers of Ferrari and Lamborghini, to give its vehicles a look that Western consumers desire. It is also working with Fiat and AVL to supply engines for its cars and trucks. In North America, the company has signed a deal with Chrysler to bring Dodge- and Jeep-branded Chery small cars to US shores by 2009 or 2010.

Doubts have been raised about whether Chinese cars will pass US safety and emission standards. However, the Chinese are determined to break these barriers. If the country’s recent success at the Olympics games means anything, the cars should prove as good as any other car made in the US. Quality doesn’t seem to be an issue for TCS, which is planning to buy units from EDS and is already giving tough competition to IBM and Accenture. IBM, EDS and Accenture have all set up large offshore service operations in India to take advantage of low-cost staff. But, these US-based companies have not fully benefited from this move because of their lack of experience in managing their staffs in India. Industry analysts expect that TCS and other Indian IT service providers will become larger than US service providers by 2011.