Framework for Trans-national R&D strategy

Multinational companies generally tend to have R&D concentrated at their parent company location. Having a closed setup in one place has its obvious advantages in terms of better coordination, efficiency and information security. 

However, multinationals do want to break the mould and connect with and learn from broader ecosystem around the world. The approach though has been more or less ad-hoc,

• captive centres to fulfill an offset obligation or for access to cost effective talent
• sponsoring research in relevant areas 

Some multinationals just do it since other are doing the same. 

A more structured and strategic approach can not only deliver operational benefits but can also build competitive advantage. This blog post would highlight a strategic approach to R&D setup and partnerships in different regions of the world.

A regional R&D strategy would be aligned and in sync with corporate and R&D strategy of the company. And it would have following three objectives as its corner stones:

• Leverage strengths of the geographic region
• Provide advantage over competition
• Build strategic relations/assets for the company in that region

To build the above strategy, a broad based research would be required covering various aspects of the given region. 

To analyse the research data and derive meaningful insights, one could use a matrix layout to analyse and rank on multiple criteria. The outcome of the analysis has to be actionable insights related to the three corner stones mentioned above.

However, a strategy is never complete with an executable plan. Following framework is a good tool to derive and communicate the action plan.

For many companies, decision for expanding R&D outside home location is driven by operational and obligational considerations. However, companies gain to benefit more by treating it as a strategic move and putting more thought and diligence behind it.

Emerging Hyper-local Aggregation markets and startups

Aggregation model of business brings various sellers and buyers on a common platform. Flipkart, Snapdeal, Redbus, MakemyTrip and many more companies have since matured the aggregation model and grown in both valuations and scale of operations.

These aggregators sacrificed profitability to build market share. The nascent e-commerce market and sluggish economy only added to their woes. Soon the long term sustainability of aggregator model came under questioning. But interestingly, the aggregator model is only picking up pace, now in its new avtaar of Hyper-local Aggregation.

New startups have cropped up who are aggregating at the local level of a city or even a neighbourhood. Big Basket is delivering locally sourced groceries at one's doorstep. FoodPanda, TinyOwl, Delyver are delivering food from nearby restaurants. And new players like Grofers are delivering from your trusted shops in the neighbourhood. Then there is Practo who helps locate and rank doctors locally. SeekSherpa aggregates local people who provide tours with real local flavour.

The urban lifestyle is fuelling the demand for such hyper local aggregators. A typical urban consumer has disposable income but not time. They look for convenience and tend to buy experience. It's not the lack of demand but the poor service delivery which can hurt a hyper local aggregator startup. Cracks are already showing up; Cab drivers do not show up, Food orders get cancelled, Low quality vegetables delivered, not enough SKUs. 

Another area of concerns is scale. Can these hyper local aggregators scale up and become unicorns? Or would their growth stabilize at a smaller scale. Unlike Flipkart and likes, these startups are not nationwide. The only way to grow in scale is to replicate their business model in as many cities as possible.

Nevertheless, its encouraging to see new sprouts of economic activity at local levels and should be nurtured. And with creative offerings of these young startups, its certainly interesting times ahead for urban consumer.