Product / Service Standards in India

Dayna McKnight

OMBA 606

November 24, 2002

EXECUTIVE SUMMARY

Staples, Inc. is an $11 billion retailer of office supplies, furniture and other business services.  The company currently holds more than 1,400 stores operating in the United States, United Kingdom, Germany, Netherlands, and Portugal.  There is an opportunity for Staples to expand into other countries as well, but the company must carefully consider a variety of factors prior to expanding.  One of the countries that Staples is considering expanding into is India.  A factor which the company must take into consideration is, what types of product and service standards does India have which may make it potentially difficult or too expensive to manufacture or market in that country. In addition, what types of strategies does Staples need to consider pursuing to minimize their effect on operations in India?

INTRODUCTION

          Webster's dictionary defines a standard as "something established by authority, custom, or general consent as a model or example" (Webster, 2002). Product and service standards may include any type of measures or criterion, which set parameters on how a product is manufactured or distributed.

The International Organization for Standardization (ISO) is a worldwide non-governmental organization that promotes the development of standardization and related activities throughout the world. The organization aims to "promote the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity" (ISO, 2002). The ISO defines standards as "documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics, to ensure that materials, products, processes and services are fit for their purpose" (ISO, 2002).

          When making purchases from international companies, sometimes there may be the fear of what am I getting? Product and service standards provide consumers with the knowledge that a particular product is compatible with what they are used to receiving.  For example, if your country has a different electrical voltage system than the country that manufactures the product you're purchasing, you want to make sure there won't be any issues with not being able to plug in the item.  Standards also help to ensure a certain level of quality and safety exists. 

INDIA PRODUCT STRATEGY

History

Finding information about how product quality in India is viewed was a difficult task. However, most of the information indicated that safety is an issue. An article in The Hindu magazine, reports that India has a high tolerance for unsafe products and that they are basically acceptable because no one protests. The article goes on to state that the organization responsible for enforcing such standards, Bureau of Indian Standards (BIS), does not have the infrastructure in place to handle enforcing standards (Deskin, 1999). Therefore, quality may still go by the wayside at times because no one is necessarily enforcing it or complaining about it.

In a study comparing ISO and non-ISO organizations, Sarkar (1990) studied the status of quality control in India. His observations concluded that no performance evaluations of quality control operations are done in Indian manufacturing organizations. He felt it was important to attempt to infuse a culture of quality improvement throughout companies in India. Raghunathan et al. (1997) later identified (in a comparative study including India) that quality was considered important in the country (Wembley, 2000).  The trend indicates that the desire to improve is definitely there.

Standardization

The Indian Standards Institution (ISI) was established in 1947, under a Government of India resolution to provide India with standards it needed for" nationalization, orderly industrial and commercial growth, quality production and competitive efficiency" (Bureau of Indian Standards, 2002). In 1986, the government wanted to further strengthen the standards body because of the socio-economic environment.  In 1987, the Bureau of Indian Standards (BIS) was established and replaced the previous ISI, resulting in greater consumer participation of the establishment of standards. The organization is charged with establishing a strategy for recognizing standards and integrating them with growth and development of India's production and exports.

          The BIS has a voluntary product certification scheme that attempts to provide quality and safety to consumers. Presence of a certification mark known as "Standard Mark" insures that a product has met specifications.  The certification scheme is primarily based on ISO Guide 28, which provides general rules for third party certification systems. Products that come under this certification scheme include, but are not limited to, textiles, machinery and equipment, paper products, electrical equipment, and building materials (BIS, 2002).

Customer Operations Performance Center Inc. (COPC), a performance management organization for the customer contact industry, has established an office in India to help improve the level of service quality provided to customers.  The company uses a set of standards they call COPC-2000 which specifies minimal operational requirements that should be used with industries that have customer contact (Anonymous, 2001).

DOING BUSINESS IN INDIA

There are no set standards in India that are directly related to office supplies. Therefore there are no standards that will make it difficult for Staples to manufacture or distribute its products in India. The area that comes under India's mandatory requirements that affects Staples is the area around the electrical wires, cables, appliances and accessories. These items are subject to BIS standards and Staples must ensure that its plugs and small appliances are in compliance with the standards established by the BIS. This is a common requirement that Staples has encountered when entering into other foreign markets.

Many of the manufacturing machines and supplies the company uses will be subject to the voluntary standards and this should not present a problem either.  Foreign manufactures are welcome to utilize India's product certification scheme, which allows them to apply the "Standard Mark" on their product(s).

Because Staples' core values are centered on the customer and providing great service, the company may want to initiate efforts with the COPC.  Adopting COPC's standards will allow the consumers of India to know the company's commitment to quality and to the consumer.

CONCLUSION

Staples has a good opportunity for growth in India.  India is becoming an important investment opportunity for foreign businesses because of its size, positive business climate and low cost of labor" (Klein & Tinji, 2001, pg. 1).  There seems to be little in the way of product and service standards standing in the way of Staples' expansion. As long as the company remains focused on its original core values and is willing to be flexible in its thinking as it enters a new market, it should definitely consider India as a potential target market.  Staples must also keep in mind that as Indian manufacturers begin to realize the role that quality plays in their future growth, competition will likely increase in this area.  Making it more and more important, to stand true to their values. 

 

REFERENCES

         Anonymous (August 2001). COPC to open Indian office to promote service excellence. Customer Inter@ction Solutions. Retrieve online from: UMUC Database-ABI/Inform.

        Bureau of Indian Standards (2002). Retrieved online November 18, 2002 from http://www.bis.org.in/obj.htm.

        Desikan, R. (1999). Product safety: a long way to go. The Hindu. Retrieved online November 18, 2002 from http://www.hindunet.com/folio/fo9910/99100180.htm

        International Organization for Standardization (ISO). Retrieved online November 15, 2002 from http://www.iso.ch/iso/en/aboutiso/introduction/whatisISO.html.

        Klein, Steven H. & Hirji, Turan. (Fall 2001). Tax issues when starting a business in India. The International Tax Journal. Retrieved online from: UMUC Database ABI/Inform.

        Raghunathan, T.S., Rao, S.S. and Solis, L.S. (1997). A comparative study of quality practices: USA, China and India, Industrial Management & Data Systems, Vol. 97 No. 5-6, pp. 192-201.

        Sarkar, B. (1990). Status of quality control in Indian industries: a survey, Total Quality Management, Vol. 1 No.1, pp. 133-46.

        Webster Dictionary. Retrieved online November 18, 2002 from http://www.webster.com/cgi-bin/dictionary.

        Wembley. (2000). Quality management practices of ISO vs non-ISO companies: a case of Indian industry. Retrieved online November 20, 2002 from: UMUC Database - ABI/Inform.