Reference no: EM132918548

FLEXCUBE is the world's best-selling banking-software product. For many years Indian technicians have been beavering away writing code to be sold as an American or European brand. Now India's own brands are starting to fight in the global markets in their own right. Indian marketing professionals have been arguing for some time that IT exports would be more secure if they relied less on outsourcing and were 'products', where the India seller owns the intellectual property, not just the brainpower for hire. Mixing his metaphors wildly, Rajesh Hukku, the founder and chairman of i-flex, argues that Indian firms otherwise risk being doomed forever to providing 'the cheap labour at the bottom of the food chain'. At a time when there has been a protectionist backlash in America and Europe against the outsourcing of IT jobs to India and fears of decline in the industry as margins and costs are being further reduced, Indian software firms are emerging from the shadows and fighting in the global market under their own brand names. Last year, Nasscom, the Indian industry's lobby group, estimated that India captured just 0.2 per cent of a global market of US$180 billion for software products. It expects that to increase, but recognizes the obstacles. The product business depends on heavy investment in sales, marketing and branding and the ability to market globally against fierce and rich competitors. A recent success has been the tie up with Financial Services Inc. (FSI) in the USA to launch FLEXICUBE as a hosted offering to community banks in the US. FLEXCUBE will help community banks in the USA to compete with large banks and financial institutions on an equal footing.

Questions:

a) How should new brands in developing countries compete against established US global brands?

b) What are the implications of tough competition in international market?