Complied by Pioneer Institute of Professional Studies, Indore

MANAGING HINDUSTAN STRATEGICALLY*

UNILEVER

Unilever is one of the world's oldest multinational companies. Its origin goes back to the 19lh century when a group of companies operating independently, produced soaps and margarine. In 1930, the companies merged to form Unilever that diversified into food products in 1940s. Through the next five decades, it emerged as a major fast-moving consumer goods (FMCG) multinational operating in several businesses- In 2004, the Unilever 2010 strategic plan was put into action with the missio'n to 'bring vitality to life' and 'to meet everyday needs for nutrition, hygiene and personal care with brands that help,people feel good, look good and get more out of life'. The corporate strategy is of focusing on core businesses of food, home care and personal care. Unilever operates in more than 100 countries, has a" turnover of €39.6 billion and net profit of €3.685 billion in 2006 and derives 41 per cent of its income from the developing and emerging economies around the world. It has 179,000 employees and is a culturally-diverse organisation with its top management coming from 24 nations. Internation-alisation is based on the principle of local roots with global scale aimed at becoming a 'multi-local multinational'. The genesis of Hindustan Unilever (HUL) in India, goes back to 1888 when Unilever exported Sunlight soap to India. Three Indian subsidiaries came into existence in the period 1931-1935 that merged to form Hindustan Lever in 1956. Mergers and acquisitions of Lipton (1972), Brooke Bond (1984), Ponds (1986), TOMCO (1993), Lakme (1998) and Modern Foods (2002) have resulted in an organisation that is a conglomerate of several businesses that have been continually restructured over the years. HUL is one of the largest FMCG company in India with total sales of Rs. 12,295 crore and net profit of 1855 crore in 2006. There are over 15000 employees, including more than 1300 managers.

The present corporate strategy of HUL is to focus on core businesses. These core businesses are in home and personal care and food. There are 20 different consumer categories in these two businesses. For instance, home and personal care is made up of personal wash, laundry, skin care, hair care, oral care, deodorants, colour cosmetics and ayurvedic personal and health care, while food businesses have tea, coffee, ice creams and processed food brands. Apart from the two product divisions, there are separate departments for specialty exports and new ventures. Strategic management at HUL is the responsibility of the board of directors headed by a chairman. There are five independent and five whole-time directors. The operational management is looked after by a management committee comprising the Vice Chairman, CEO and managing director and executive directors of the two business divisions and functional areas. The divisions have a lot of autonomy with dedicated assets and resources. A divisional committee having the executive director and heads of functions of sales, commercial and manufacturing looks after the business level decision-making. The functional-level management is the responsibility of the functional head. For instance, a marketing manager has a team of brand managers looking after the individual brands. Besides the decentralised divisional structure, HUL has centralised some functions such as finance, human resource management, research, technology, information technology and corporate and legal affairs. Unilever globally and HUL nationally, operate in the highly competitive FMCG markets. The consumer markets for FMCG products are finicky: it's difficult to create customers and much more difficult to retain them. Price is often the central concern in a consumer purchase decision requiring producers to be on continual guard against cost increases. Sales and distribution are critical functions organisationally. HUL operates in such a milieu. It has strong competitors such as the multinationals
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Complied by Pioneer Institute of Professional Studies, Indore

Complied by Pioneer Institute of Professional Studies, Indore

Proctor & Gamble, Nivea or L'Oreal and formidable local companies such as, Amul, Nirma or the Tata FMCG companies to contend with. Rivals have copied HUL's strategies and tactics, especially in the area of marketing and distribution. Its innovations such as new style packaging or distribution through women entrepreneurs are much valued but also copied relentlessly, hurting its competitive advantage. HUL is identified closely with India. There is a ring of truth to its vision statement: 'to earn the love and respect of India by making a real difference to every Indian'. It has an impeccable record in corporate social responsibility. There is an element of nostalgia associated with brands like Lifebuoy (introduced in 1895) and Dalda (1937) for senior citizens in India. Consequently, Indians have always perceived HUL as an Indian company rather than a multinational. HUL has attempted to align its strategies in the past to the special needs of the Indian business environment. Be it marketing or human resource management, HUL has experimented with new ideas suited to the local context. For instance, HUL is known for its capabilities in rural marketing, effective distribution systems and human resource development. But this focus on India seems to be changing. This might indicate a change in the strategic posture as well as a recognition that Indian markets have matured to the extent that they can be dealt with by the global strategies of Unilever. At the corporate level, it could also be an attempt to leverage global scale while retaining local responsiveness to some extent. In line with the shift in corporate strategy, the locus of strategic decision-making seems to have moved from the subsidiary to the headquarters. Unilever has formulated a new global realignment under which it will develop brands and streamline product offerings across the world and the subsidiaries will sell the products. Other subtle indications of the shift of decision-making authority could be the appointment of a British CEO after nearly forty years during which there were Indian CEOs, the changed focus on a limited number of international brands rather than a large range of local brands developed over the years and the name-change from Hindustan Lever to Hindustan Unilever.

The shift in the strategic decision-making power from the subsidiary to headquarters could however, prove to be double-edged sword. An example could be of HUL adopting Unilever's global strategy of focussing on a limited number of products, called the 30 power brands in 2002. That seemed a perfectly sensible strategic decision aimed at focusing managerial attention to a limited set of high-potential products. But one consequence of that was the HUL's strong position in the niche soap and detergent markets suffering owing to neglect and the competitors were quick to take advantage of the opportunity. Then there are the statistics to deal with: HUU has nearly 80 per cent of sales and 85 per cent of net profits from the home and personal care businesses. Globally, Unilever derives half its revenues from food business. HUL does not have a strong position in the food business in India though the food processing industry remains quite attractive both in terms of local consumption as well as export markets. HUL's own strategy of offering low-price, competitive products may also suffer at the cost of Unilever's emphasis on premium priced, high end products sold through modern retail outlets. - There are some dark clouds on the horizon. HUL's latest fmancials are not satisfactory. Net profit is down, sales are sluggish, input costs have been rising and new food products introduced in the market have yet to pick up. All this while, in one market segment after another, a competitor pushes ahead. In a company of such a big size and overpowering presence, these might still be minor events or developments in a long history that needs to be taken in stride. But, pessimistically, they could also be pointers to what may come.34 Questions 1. State the strategy of Hindustan Unilever in your own words. 2. At what different levels is strategy formu lated at HUL? 3. Comment on the strategic decisionmaking at HUL. 4. Give your opinion on whether the shift in strategic decision-making from India to Unilever's headquarters could prove to be advantageous to HUL or not
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Complied by Pioneer Institute of Professional Studies, Indore

becoming a full-fledged private company in 1936 that 50 years later. Burfnan established a pharmacy that set up a manufacturing plant in 1896 and research laboratories in 1919.corporate positioning statement is 'celebrate life' that goes with its bright green and brown coloured logo depicting a banyan tree. having three subsidiary companies and 13 manufacturing plants. Dr. CCD deals with consumer products in personal care and health care. the traditional Indian system of medicine. The 2002-2006 strategic plan envisaged Dabur becoming a Rs. For instance. It aspires to be a global FMCG company where more revenues come from outside India.1 Dabur follows a four-year time horizon strategic planning. It has been successful in realising that objective. In the next strategic plan. Within the company. In 1884. Indore -3- . Dabuivis a leading consumer goods company in India.K.' There is no specifically-stated mission statement but a statement of strategic intent having several elements such as: Developing a platform to become a global ayurvedic leader • Synthesising knowledge of ayurveda and herbs with modern science to develop natural solutions for meeting the health and per sonal care needs • Providing superior returns to shareholders relative to rivals in industry • Being a responsible corporate citizen com mitted to environmental protection • Nurturing core brands across categories within India and outside • Being a professionally managed employer attracting. The brand name 'Dabur' is claimed to mean different things to different people. it has the distinction of changing the product concept of chyavanprash from being a traditional compound of herbs and plant extracts having anti-oxidant properties. people development. consumer focus. passion for winning. business units (SBUs): Consumer Care Division (CCD) and Consumer Health Division (CHD). in 1986. He adopted ayurveda. effective and affordable treatment for these killer diseases for ordinary people in far-flung villages of Bengal. Dr. It markets its products through an extensive wholesale and retail network of 47 agents.Complied by Pioneer Institute of Professional Studies. it aims to raise the revenue share from • Complied by Pioneer Institute of Professional Studies. Indore PUTTING TOGETHER THE STRATEGIC INTENT AT DABUR INDIA LIMITED* Cholera. Its. The vision of Dabur is stated as: 'Dedicated to the health and well being of every household.5 million retail outlets. He came to be known as Daktar {Indian pronunciation of 'doctor') Burman. 5000 distributors and 1. Burman embarked on a mission to provide nature-based. The organisation he founded came to be known as Dabur. CHD deals with classical ayurvedic medicines. the mother brand for a whole range of products and it also percolates down to individual product names. team work and innovation. In the next four-year strategic plan. developing and retaining quality personnel • Improving operational efficiency by leveraging technology There are six core values that Dabur practices: ownership. 2000 crorecompany by the period 2006-2007. It operates in nearly 50 countries. to a branded consumer product sold over the counter for general health upkeep of the whole family. became a public limited company. its objectives are to continue the growth momentum at a similar pace. malaria and plague have been killer diseases in India. Dabur has tried to alter the product concept of ayurveda medicines as consumer products sold over the counter. It operates at three distinct levels: as the company's corporate brand identity. there are two strategic. making it an Indian multinational company. S.

Dabur will have to decide whether it wishes to be a pure herba brand or a leading FMCG player.Complied by Pioneer Institute of Professional Studies. in the range of 10 to 15 per cent annually. Indore international operations from the present 12 per cent to 20 per cent. in the core domestic FMCG businesses in the consumer care division and even higher growth rates of 25 to 30 per cent annually from businesses outside consumer care. launching new products and penetrating deeper into rural Indian markets. Analysts say that the company has perhaps been eyeing too many divergent new product categories over the years.' Complied by Pioneer Institute of Professional Studies. Dabur's strategy for the nextfew years seems to be: growth through domestic and international acquisitions. Indore -4- . Generally. Dabur haS performed well except in cases where it had to deal with tough competition in the intensely competitive consumer goods in India. neither of which it can claim to be with conviction today. The strategies adopted are a combination of internal growth and external growth through acquisition that it terms as organic and inorganic growth respectively. In the near future. The business model of Dabur is based on pushing through high growth parameters.

Among them are the big names in the Indian corporate sector such as the AV Birla group. Godrej. In the post-liberalisation period. Customer contact is personal and one-on-sne. Its 2007-ranking places India at number one for the third consecutive year. followed by Russia and China. or the corner grocery stores in the U. Practically. store ambience and convenience of shopping. has set the pace for corporate investment in retail business. India's impressive economic growth rate of 9 per cent is the prime driver of increasing disposable incomes in the hands of the consumer. in tandem with the entry and expansion of the organised sector players in recent years.). Market research agencies and consultants come up with encouraging forecasts retailing industry in many developing countries around the world. having negligible investment in land and assets. For the majority of Indian consumers however. lower prices may not be a major issue with the higherincome groups that may place greater emphasis on the quality of products and retail service. It must be noted. Indore WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?* India is not known/ as the 'nation of shopkeepers'. The quality of items is standard. The growing size of the consuming class in India.S. with moderate pricing. Indians. there is more openness and awareness of the international developments among. informal sector of kirana dukaans. For instance. every major Indian business group is looking for opportunities in the growing retailing industry. Reliance. The ease of travel abroad and the exposure through television and Internet have increased the awareness of the urban Indian consumer to the convenience of modern shopping. has created several factors that have made this high growth of the organised retailing industry possible. A.T. the Indian retailing industry is expected to grow from the current US $350 billion to US $427 billion by 2010 and US $635 billion by 2015.K. Some other optimistic estimates place the number at as high as 12 million. There is great hype about the growth and prospects of organised retailing industry in India. Competition Complied by Pioneer Institute of Professional Studies. with 92 points. The modern retail formats thus have gained about this segment of the retailing industry. India can claim to have the highest number of retail outlets per capita in the world. managed by family members. that organised retailing constitutes barely 2 per cent of the total retailing industry in India. There are a limited number of items offered often sold on credit—the payment to be collected at the end of the month. paying little or no tax and known as the kirana dukaan ('mom and pop' stores in the U.point scale. often running through generations. Kearney's Global Retail Development Index ranks 30 emerging countries on a 100. Overall. The international environment presently is replete with examples of the fast-paced growth of the a clear trend of low prices being the determining factor in purchase decisions by the cost-conscious Indian consumer. The economic environment in the postliberalisation period after 1991. Whatever be the number.Complied by Pioneer Institute of Professional Studies. These outlets offer mainfy food items and groceries the staple of retailing in India. Mahindras. the rest 98 per cent being under the control of the unorganised. Tatas and the Wadia group. ITC group. The size of the organ-ised retailing industry is estimated at US $8 billion and projected to grow at a compound annual growth rate of 40 per cent to US $22 billion by 2010. Indore -5- . But almost all of these are small outfits occupying an average of 500 square feet in size. But. Bharti. yet it has as many as 5 -million retail outlets of all shapes and sizes. price is likely to remain a significantly important issue in the purchase decision. however.

Lucknow or Cochin. Foreign direct investment of up to 100 per cent is not permitted though it is possible for foreign players to enter through the routes of franchise agreements. Another area of concern is the severe shortage of skills in retailing.Complied by Pioneer Institute of Professional Studies. politicians have acted in favour of the unorganised sector by disallowing the setting up of large retail outlets in some states. This is obvious as the unorganised sector/ ^employs nearly 8 per cent of the Indian population and is widely spread geographically. the bulk buying yield lower costs of procurement for the big retailers—a part of which they pass on to the customer in the form of . in view of the ambiguous political stance as indicated above. weekly markets and such other formats unique to India. In addition to the mega-cities of Mumbai and Delhi.000 villages. the reach of the organised retailing industry has been growing. The overwhelming presence in terms of 98 per cent of the total retailing industry also is a significant political issue. Indore acceptance in India. DSCL's Hairyali Kisaan Bazaarand Godrej group's Godrej Aadhar. for instance. Interestingly. In food retailing. cities sueh as Bangalore. the politics of numbers makes it imperative for the political class to adopt an ambiguous stand. Another problem area is of the real estate laws at the level of state governments that are yet to be clear on the issue of allowing large stores. there are some attempts at indigenous formats aimed at the rural markets such as those by ITC's Choupal Sagar. the retailing industry is still not recognised as an industry in India. a notable trend has been the development of integrated retail-cum-entertainment centres and malls as opposed to stand-alone developments. These include hyper and supermarkets. Besides these. There is a large rural market consisting of nearly 720 million consumers. Traditionally. In the regulatory environment. Indore. Supervalue and Starbucks having plans to enter soon. Retailers are now trying to focus on smaller cities such as Nagpur. however. public distribution systems. Human resource development for the retailing industry has picked up lately but may take time to fill the gap caused due to the shortage of personnel. Competition has already accelerated with many Indian business groups having entered or likely to enter this booming industry. tariffs on imported consumer items have been gradually aligned to meet the prescribed WTO norms and reduction of import restrictions are likely to help the growing organised retailing industry. department stores and specialty chains. Overall. have been in existence for a long time. pavement shops. However. Tesco and Wal-Mart are the international players already operating in India. Pricing is an important issue in the retailing industry. kiosks. Among these formats. In a democracy. there is ambiguity as there are several environmental trends in favour of the development of the organised retailing industry. India's consumers are young: 70 percent of the country's citizens are below the the purchase decision. convenience stores. Kolkata and Chennai are also witnessing a boom in organised retail activity. The political environment in India is ambiguous in terms of its support to the organised retailing industry. Chandigarh. Carrefour. with several others like Euroset. Pune. At present. most organised retail formats are imitations of those used abroad. These international companies bring to India the latest developments in the retailing industry and help(to set up a benchmark for the domestic players. lower prices. !n terms of geography. spread over more than 600. Restructuring of the tax structure for the retailing industry is another regulatory issue requiring governmental action. there has been a gradual easing of the restrictions albeit at a slow pace. apparel retailers are establishing collaborations with their vendors. Complied by Pioneer Institute of Professional Studies. kirana stores. street carts. In some cases. There are interesting possibilities regarding the retail formats. Indore -6- . The market environment is one of the most significant in terms of the growth and prospects of the retailing industry in India. -Hyderabad. Generally. there is The socio-cultural environment offers many interesting insights into the changing tastes and preferences of the urban and semiurban Indian consumer. cash-and-carry wholesale trading and strategic licensing agreements.

Reaching India's consumers cost effectively is a distribution nightmare. transportation and customer profiling. Malls are also being perceived as not just places -for shopping. These people have deep roots in the local culture and traditions. The large number of store Kerns. Some global retailers have demonstrated that an innovative use of technology can provide a substantial strategic Advantage. This group constitutes people who are enthusiastic spenders and like to visit the new ' format retail outlets for the convenience and time-saving they offer.25 Questions 1. yet are eager to get connected with and know the outside world. Prepare an ETOP for a company interested in entering the retailing industry in India. 2. but for spending leisure time and as meeting places. There has been an emergence of a combination of the retail outlet and entertainment centres having multiplexes. customer relationship management and merchandising software can help much while performing activities such as ordering and tracking inventory items. with food courts and video game parlours. is emerging every year. According to a DSP Merrill Lynch report. Supply chain management and merchandising practices are increasingly converging and The technological environment for the organised retailing industry straddles many areas such as IT support to supply chain management. earning over US$ 5000 per year. For instance. The modern retail formats accepted globally are in the process of implementation and their acceptability is yet to be established. the Indian scenario offers an interesting mix of possibilities and challenges. For instance. A group of seven million young Indians in their mid-twenties. A successful model of large-scale retailing appropriate for the Indian context is yet to emerge. factor providing a thrust to the retail boom in India is the changing age profile of spenders. an innovative use of IT can help in a wide variety of functions such as quick information processing and timely decision-making. the key. reduction in processing costs. The supplier environment probably offers the biggest constraint on the growth of the retailing industry in India. transportation and store operations. warehousing.Complied by Pioneer Institute of Professional Studies. the apparel segment that is one of the two top segments. Indore age of 36 and half of those are under 18 years of age. sophisticated places are bound to be more expensive. But there are some pitfalls too. organised retailing in India has had to deal with the misconception among middleclass consumers that the modern retail formats being air conditioned. the diversity-of sourcing and the gigantic effort required to coordinate actions in a large retail context is ideal for using IT as a support function. Indore -7- . For instance. The availability of supply chain management. owing to the sheer geographical size of the country and the presence of traditional. have had to invest in back-end processes to support supply chains. Overall. fragmented distribution and retailing networks and erratic logistics. Identify the opportunities and threats that the retailing industry in India offers to local and foreign companies. real-time monitoring and control of operations. Complied by Pioneer Institute of Professional Studies. logistics. security of transactions and operations integration. the other being food.

viz. It has a high level of gross nonperforming assets. SBl is estimated to have a good earnings profile with diverse income streams. designed to deai with asset side risks and support the business growth. It has leveraged its corporate lationships pursued business growth -8- STATE BANK OF INDIA BANKS ON ITS CAPABILITIES* State Bank of India (SBl) is Ihdia's largest bank. It faces the dual problems of overstaffing and understaffing in General management capability factors: The general management of the bank is quite competent. The bank also has a clear technology strategy that will enable it to compete with the new generation private sector banks in customer service and operational efficiency. it is obliged to shoulder social responsibilities such as investing in priority sectors. Operations capability factors: SBl. There is a need to reduce and redeploy Complied by Pioneer Institute of Professional Studies. fund management. The bank's cost structure is rigid as the fixed employee cost accounted for 74%. provide new delivery platforms and improve operating efficiency to counter the threat of competition effectively.. SBl has been losing market share over decades.maintains a healthy liquidity position owing to a continual accretion to deposits. merchant banking. offers a host of financial services. There is a consistent gap between deposit and credit growth. a vital performance indicator in the banking industry is of average level. of . offers a wide range of banking products and services across its different client markets. The bank. improve service levels. a bane of the banking industry anywhere. SBf has been trying to unlock its brand equity though unsuccessfully. regions. The bank's fund based and fee income earnings certain other critical areas. asset classes and customer segments. Marketing capability factors. Indore . investment banking and credit cards. its organisational capability profile offers an interesting study into the strengths and weaknesses. Indore the workforce but this is a sensitive industrial relations issue in a country are diversified across industries.the operating expenditure in 2004-05. along with its associate banks. Its cost of deposits is optimum. The asset quality of the bank. through its non-banking subsidiaries. traditionally the domain of the financial institutions. SBl has commenced its life 'insurance business by setting up a subsidiary. The bank's core fee income bolsters its revenue profile though there is a likelihood of a slow down owing to the opening of government business like tax collection to other banks and increased competition. It has increased its thrusUn retail assets and has built a strong market position in Housing loans.Complied by Pioneer Institute of Professional Studies. factoring. The bank's operating costs wifl remain high in the medium term. Personnel capability factors: Being the -largest bank in the country has its downsides. SBl. . underpirvned by its strong retail deposit base/ SBI's strong franchise gives it access to a steady source of stable retail funds. large limits in the call market and significant surplus statutoryjiquiciity ratiorelated investments. As a leading public sector bank. It has a strong retail base and wide geographical reach. The bank has entered the market of term lending to the corporate sector and infrastructure financing. primary dealership. It faces challenges to develop effective credit appraisal and collection systems in order to contain the non-performing assets in retail finance. fts funding profile is strong. broking. with an extensive network of more than 9000 branches and 6000 ATMs. Marketing initiatives such as on-line tax returns filing and faster transfer of funds are in placebo protect its dominant position in the government business. competencies and capabilities of india’s prime public sector bank Financial capability factors: SBl enjoys a comfortable capital position as it is adequately capitalised.SBl Life Insurance Company Limited. The increasing focus on upgrading the technology back-bone of the bank will enable it to leverage its reach better.

Complied by Pioneer Institute of Professional Studies. The.management capabilities. customise and implement the centralised core banking system.. include personalised customer service. The ' private sector banks are adopting mergers and acquisitions to increase their size. The performance indicators used by the SBI are: capital adequacy ratio. Indore -9- . 24X7 banking through diverse types of delivery channels. the global software solutions and consulting services company. where bank unions are strong. fast product launch and customer relationship management. profit per employee. return on assets. net IMPA ratio and deposits and advances. -business per employee. to supply. Information management capability factors: The SBI commissioned Tata Consultancy Services. which SBI Group will seek to develop using the core banking solution. The banking industry in India is currently under an intense phase of change. customers and transaction volume when completed. Indore selectively and has judiciously not competed on the basis of interest rate. The project is claimed to be one of the largest projects of its kind in the world in terms of the number of branches.1 Complied by Pioneer Institute of Professional Studies. The public sector banks are trying to consolidate on the'''' basis of their large network and customer base. The trend is towards consolidation around wellidentified core competencies. information.

the Group. with revenues of Rs 4352 crore. Mahindra visualised manufacturing jeeps for the rugged Indian roads. South-East Asia and the Middle East. K. Going by the popularity of its vehicles like Scorpio. Africa. tractors and utility vehicles of its automotive and farm equipment are its core businesses. making it the first attempt at geographical diversification for. widely diversified.Complied by Pioneer Institute of Professional Studies. Indore STRATEGIC MOVES BY THE MAHINDRA GROUP* The corporate journey of the Mahindra Group started in 1945 when-one of the two brothers.C. consultancy and education. Indore . the Mahindra Group was not really in a good shape financially. who later became a finance minister in post-independence Pakistan. the Group has been focusing on internationalisation through mergers and acquisitions and joint ventures.C. The next five years.9 per cent.7' Complied by Pioneer Institute of Professional Studies. Now it is to be seen whether its joint ventures with Renault of France and International Truck and Engine Corporation of the U. coincided with the Mahindra Group's diversifying into financial services.C. and finally tractors in 1963. sintered products. trade and financial services. The Group has been operating in several markets around the world in Europe. South Asia. prove to be successful. automotive technology.10 - . A major diversification occurred in 1986 with the Group entering the information technology sector. The logic behind some of the diversifications may not be apparent—at least in the short-run—but Anand Mahindra. Its earlier experience of having a joint venture with Ford was not happy. information technology. The milestone of India's second liberalisation in 1991. In 1965 came a major thrust into the automobile industry with the commencement of production of light commercial vehicles. The next two decades. Mahindra—was on a visit to the U. alloy and special steel. The first international foray in the form of exports of utility vehicles and spare parts started in 1969. A reorganisation exercise was carried out in 1994 to create six strategic business units automotive. Mahindra & Mahindra came into being. In 1948. till 1985. managing director. including trade and financial sen/ices. net profit of Rs 12f crore. Mahindra—the other being J. The Mahindra Group today is a 60-year old. infrastructure development and defence systems. K. The decade of 1953-63 saw diversification mainly through collaborations and joint ventures with foreign companies. It businesses span a wide range of sectors.S. information technology and Systech (systems and technologies). were marked by several related and unreteted diversification moves into realty and infrastructure. In 1956. 4 joint ventures and 9 associate companies. Tractors remain a core business at the Mahindra Group and it is a market leader in the industry and a global player now. etc In the post-2001 period. passenger cars. Mahindra is the managing director at present. That made it embark on a financial reengineering plan. farm equipment. machine tools. A franchisee for assembling Willys jeep was set up as Mahindra & Mohammad in association with Ghuiam Mohammad. Both brothers were professionals working with Tata Steel and Martin Burns respectively. holiday resorts. defining the financial criteria that each business in the Group had to meet. were interspersed with strategic actions aimed at expansion in its mainline business of tractors. industries and markets. it may well look forward to success. involving debt restructuring. Keshub Mahindra is the Chairman of the Group ^and Anand G. and resins. US$4-bil!ion-group with 58 subsidiaries. the shares of the Mahindra Group were listed on the Bombay Stock Exchange. Operation Blue Chip. South America. infrastructure. By 2001. till the dawn of 2000. Yet. The Group entered varnishes. The first diversification came in 1953 when Otis Elevator (India) was formed. and return on capital employed at 6. defends the strategic posture by saying 'I see myself as a venture capitalist and we have to constantly reallocate resources to newer ventures. codenamed.S.

4. Based on the idea of business definition. Is your business school a first mover/late mover in the management education industry in India? What are the advantages and disadvantages in either case? 6. describe how they are used. 5. What is meant by the market location tactics of business strategy? 21. differentiation arid focus. Complied by Pioneer Institute of Professional Studies. 11. Describe the market location tactics employed by organisations. For each of these business strategies. 8. under which conditions are they used and the associated benefits and risks: (a) cost leadership (b) differentiation (c) focus. 13. 2. 12.Complied by Pioneer Institute of Professional Studies. How is this achieved? 7. take Hindustan Levers in the FMCG in dustry). Indore What is meant by being a first mover in an indus try? a late mover? 19. identify the business strafe gies that company could adopt. Indore . for in stance. Write a convincing argumentative note on the topic: 'Good timing is crucial for a successful business strategy'. Identify the sources of competitive advan tage of your chosen company. of a com pany of your choice. Discussion/Application Questions Build up an argument to demonstrate how most competitive interaction occurs at the level of busi ness strategy. Identify the features of business strategies that would be appropriate under the following industry conditions (a) embryonic {b} growth (c) maturity and (d) decline.11 - . 10. Build up arguments in favour of the proposition that digitalisation itself does not create competitive advantage for an organisation. Discuss the conditions under which an organisation can attain cost leadership and differentiation simultaneously. The way that an organisation can use and manage digitalisation creates competitive advantage. Describe the different ways in which digitalisation can help organisations in achieving cost leadership. How can digitalisation help an organisation attain cost leadership? 18. How can organisations leverage homecountry advantages for their international business strate gies? 24. Highlight the approaches to be used in each of the different types of such tactics. 9. What are the characteristics of business strate gies in a growth industry? 23. Discuss Michael Porter's approach to defining generic competitive (or business) strategies. Explain these market location tactics of business strategy: (a) market leadership (b) market chal lenger fc) market follower (d) market nicher. What are the advantages and disadvantages in Being a first mover in an industry? a late mover 20. 3. which is where competitive advan tage in an industry is won or lost by a company. 22. Select a company which is a market leader in a competitive industry in India (you could. Discuss the manner in which organisations can leverage India's home-country advantages and theirown advantages in adopting business strategies internationally. 1.

In 1995. Asia-Pacific. Whirlpool Corporation has annual sales of more than $18 billion. with pride. A majority ownership in the joint venture with TVS led to the emergence of Whirlpool of India Limited in 1996. food preparation and foodstream solutions. The mission statement enunciated in 2003 is 'Everybody creating loyal customers for life'. Among its eleven major brands are Whirlpool. more than 73.S. Whirlpool India is a recognised export house with an export-oriented unit based at Pondicherry. India was identified as a growth market sometime in the iate-1980s. The initial internationalisation of Whirlpool Corporation began in 1958 when it entered Brazil. Latin America and West Asia. resulting in the application of a customer-centric marketing strategy. Exports constitute 13 per cent of the turnover of the company and reached Rs. The market positioning of Whirlpool India is based on the theme: 'your partner in homemaking'. Whirlpool India is one of the popular brands of home appliances in India. Care has been taken to create adequate capacity for the long-run. passion and performance'. For instance. Customer focus drives innovations in product design and changes. The Pune-based design centre has online connectivity with other Whirlpool design centres around the world. 200 crore in 2006-2007. refrigerators and washing machines. Indore . The company website was re-launched in 2006 and was made more interactive. with its headquarters at Michigan in the U. Whirlpool Corporation that is a global manufacturer and marketer of home appliances.000 employees and more than 70 manufacturing and technology research centres around India Limited was acquired to facilitate entry into the refrigerator market in India. jMaytag and KitchenAid that are produced in 13 countries and marketed to consumers in over 170 countries around the world. . Entry into India was made through a joint venture wi'. Regional Technology Centres at Pune and Pondicherry are involved in design engineering aimed at continual upgrades of features and styling and customisation of products. a status it reached in 2006. In doing so. The software connects Computer Assisted Design data with assembly times and the cost of materials. 10 per cent in the microwave oven market and 16 per cent in the'washing machines market in 2006. The objectives of innovation. It is also exporting refrigerators and washing machines to South Asia. the company claims to have relied on one of its the world in 2007. In 2002. Whirlpool has transformed itself from an accomplished manufacturer to a consummate marketer— a process that is said to be achieved through a brand building framework that aimed at building excellent brands and engendering customer loyalty. Kelvinator of facilities have ISO certification and have also adopted the six-sigma quality technique for quality management in 1-999. the company launched an initiative called 'Whirlpool Strategic Architecture' as the implemenv tation framework to achieve its vision and mission. The product portfolio includes air conditioners. The business portfolio of the company consists of four lines: air treatment. The company claims to hold a market share of 25 per cent in the refrigerator market. enabling optjpium utilisation of modelling and analysis software. fabric care. There is also a global consumer design centre for Asia based at Delhi. Russia and East European countries and claims to be the largest exporter of home appliances from India. to produce KitchenAid appliances for the export markets in the U. processes and work culture. simplifying the planning and ordering phase. The vision of Whirlpool India articulated in 1998 is stated as: 'Every home.Complied by Pioneer Institute of Professional Studies.A.h TVS Group to produce automatic washers at Pondicherry. Indore COOL COMPETITIVE STRATEGIES WHIRLPOOL INDIA* Whirlpool India is a part of the multinational company. along with eco-friendly technology. microwave ovens. indicating the*company's commitment to using India as a technology base for its Asian operations. everywhere. operational excellence. Pondicherry and Pune. providing a forurn not only for information but also for performing the sales functions. Digitalisation is a progressive process at Whirlpool India. Serious efforts came in the 1980s when it started adopting an aggressive strategy to be a world-class company. customer-centric approach and diversified talent are claimed to be embedded within business goals. it has incorporated digital manufacturing technology into its washing machine manufacturing operations.12 - Complied by Pioneer Institute of Professional Studies. It is claimed to be the world's largest white goods company.S. There are three manufacturing units situated at Faridabad.

It's a tough market for the best of marketers. passion for customer excellence and operational excellence. around products through advertising campaigns. innovation diversity with inclusion and core competence. comment on whether Whirlpool India's ge neric business strategies are appropriate. except a related diversification into water purifiers where it plans to leverage its retail distribution strength. an improvement over the past year's loss of Rs. Whirlpool India had sales of Rs. have driven its product changes and design. There are no new manu- facturing units in the pipeline. It expects to turn around by 2008 through sustained productivity improvements and cost reduction. space for large bottles and strong body to withstand the heavy toads a typical Indian home subjects its appliances to. 1. Indore Product differentiation is built on customer responsiveness for the demanding Indian consumer.Complied by Pioneer Institute of Professional Studies. The transformation process has five elements of: market leadership through customer loyally. 4. All production quite successful. The end result is a customer-centred organisation.pool India can you identify in the case? Dis-cuss briefly. Ice Baby'.1 crore. Other special features like movable trays. The consumer durables or the white goods industry in India is a growing industry. the other two being innovation and operational excellence.21 Questions Analyse the case to identify the type of ge neric business strategy or strategies Whirl pool India is adopting. 2. Whirlpool products are available across 11000 retail outlets in over 150 cities and towhs in India. What aspects of internationalisation of Whirl. 5. Complied by Pioneer Institute of Professional Studies. what is the stage of industry development in the consumer durables in dustry in India? Depending on your answer. Indore . to washing machines. An example of such responsiveness is its realisation that the Indian climate core competence of 'customer excellence'.13 - . 'Ice. 3. These five elements form the core of the company's strategy and guides strategic planning and implementation. are dedicated to making refrigerators and at Pondicherry. 38.32 crore. along with an advertising campaign based on the theme. albeit at a slow rate. The Indian consumer is hard-toconvince and demands value for money and is not swayed easily by the hype built. Future plans of Whirlpool are mostly to concentrate on the existing businesses. In your opinion. What aspects of digitisation of Whirlpool India can you identify in the case? Discuss briefly. 1592 crore for the year ending March 2007 and a net loss of Rs. There are strong competitors such as the multinationals LG or Samsung and strong domestic players such as Godrej and Voltas. The manufacturing facilities of Whirlpool India at Faridabad and at Ranjangaon near Pune.

71-80 5) Complied by Pioneer Institute of Professional Studies.A. pp. K. pp.W.com /. "Progress in the IT business relationship: a longitudinal assessment". available at Com-pany website at http://www. 10lh ed.3. Hunger. London. Vol. 2007. Mukherjee. Busi ness Today. J. 201-204. Boston. Scott M. 142-144. p. 2006. 2004. Jones. Hill & G. Jane C. April 26. 6.W. C.G. 7) Willcoxson & R.p 121 Z. No. pp. Rahman & S.1991. pp.. 2007. vol. K.org/. Website of Board of Industrial and Financial Reconstruction http://www. 2005. (1980) Competitive Advantage: Creating and Sustaining Superior Performance (1985) and The Competitive Advantage of Nations. P. Mar. New Delhi. "Sources of first.mover advantages in emerging markets—an Indian perspective". Boston. Porter that explain his theory. Hill & G. Marketing Management. Marico—-infor mation update.L.nic. Elsevier. 5.com. 3. "Marico to roll out new products. "Mariwala's shopping spree". 231-247. Bhattacharya.L. Jones. Montgomery and M.Complied by Pioneer Institute of Professional Studies.14 - . 3) M. 4. 1999. Mass. A. The major writings of Michael E.maricoindia. 6. 2006. Prentice Hall. principles and techniques of strategy and allied issues are in the form of three books: mpetitive Strategy Techniques for Analyzing Industries and Competitors. "The power of business models. Strategic Management: A Dynamic Perspective. Prentice Hall. NJ.19. Strategy:Seeking and Securing Competitive Advantage. Apr 9. L. Strategic Management and Business Policy. 6) Website of India Brand Equity Foundation at http://www. H. 1) P.R. Re trieved June 24.1999. 2007.Harvard Business School Publishing. plans acquisitions". 2003. 2007. Vol. C. & Smith. Chatham. Prentice-Hall of India. Jeff & Under. 15. Upper Saddle River.ibef. Porter. pp. NJ..bifr. E. Indore . Boston.R.D. Strategic Manage-ment." Business Horizons.. Shafer. 6.L.. Upper Saddle River. Wheelen & D. Retrieved June 25. (1990). Houghton Miffiin. Carpenter & W. Gopalan. xiv. European Business Review.htm. 2007. Addison Wesley. Strategic Management: An Integrated Approach. Wheelen. p. 2) T. 2007 2. Indore Notes and References 1. Issue 1. 359-369. C. Sanders. Retrieved june 25. Jan 16. Reading. 48(3). Journal of Information Technology. 2007. 44. rediff. 2007. Houghton Miffiin.in/geninfo. Kotler. p. Hunger & T. pages 199-207. Strategic Management: An Inte grated 4) Approach.

Jharkhand. aided by an effort to change the perception of the rural poor to accept poverty not as destiny but as a temporary status that can be changed. The Minister of Panchayat and Rural Development is the Chairperson of trie Society. The strategy of MPRLP is to address the structural causes of rural poverty and develop entrepreneurial skills to promote selfemployment. earning. microenterprises. Rural poverty is a scourge that afflicts three out of four people living in the rural areas. The funding for the project is provided by the Department for International Development (DFID) that is the part of the UK Government that manages Britain's aid to poor countries and works to get rid of extreme poverty. Poverty is most prevalent among the scheduled caste and tribes living in the states of Bihar. The MPRLP project is being implemented In two phases. The project coordinator leads the State Project Management Unit that is responsible for implementing and monitoring the project. These districts are: Anupur. District-level Project Management Committees have been formed that are chaired by the District Collectors. Among the several organisations working in the government and non-governrnental sectors is the Macihya Pradesh Society for Rural Livelihoods Promotion that is an autonomous organisation registered under the Madhya Pradesh Societies Act created to implement the Madhya Pradesh Rural Livelihoods Project (MPRLP). 115 crore) for the first phase. A major cause of poverty among rural people in India 1s lack of access for both individuals and communities. less than US$ 1 per day. The project receives funds from the State government for undertaking various activities. Orissa. Madhya Pradesh. Dhar. livestock. In doing so. there is an elaborate organisational setup designed to formulate and implement the project. Rajasthan and West Bengal. Chhattisgarh. there seems to a high level of transparency in the MPRLP as . support to migrant labour and improving access to information. village development committees) and other committees of the Gram Sabha (lit.6 million (Rs. village assembly). The project coordinator acts as the secretary of the steering group that provides directions for the Livelihoods Forum and development of the work programme. Villages are grouped into clusters where multi-disciplinary project facilitation teams and Gram Vikas Samitis (lit. The major task of the MPRLP is to channel resources and funds to where they are needed. Besides the MPRLP. the DFID also funds or is a partner in funding similar projects in Andhra transparency. Barwani. village board) organise and support execution at the individual level. based on time periods of 2004-2007 for 822 villages and 2007-2012 for 3000 villages in eight tribal dominated districts of Madhya Pradesh. Jhabua. watershed and agricultural development. to productive assets and financial resources. Shahdol and Sheopur. in sharp contrast to the top-down resource allocation process in government financing. village fund) of the Gram Sabha (lit. The strategy focuses on seven areas of Pradesh. The DFID has provided 16. district committee} acts as the District Project Coordinator and is supported by the District Project Support Unit for project implementation. Indore . the panchayat institutions play a central role in a bottoms-up approach. Mandla. Contrary to popular perception. In keeping with its nature as a bureaucratic creation. that provides strategic direction and interdepartmental coordination. Orissa and West Bengal. An executive committee under the leadership of the Principal Secretary Panchayat and Rural Development oversees the project. community forest management. which are reimbursed by the DF1D through the Government of India. strengthening the resource base that generates livelihood and fostering microenterprises that provide employment and income opportunities to the rural people. The heads of the Zila Panchayat (lit. Indore MADHYA PRADESH RURAL LIVELIHOOD PROJECT HELPS CREATE A BETTER LIFE FOR THE RURAL POOR* More than two-thirds of India's billion-plus population lives in rural areas and over 300 million of them are classified as poor people. The policy making is in the responsibility of an Empowered Committee headed by the Chief Secretary to the Madhya Pradesh government. There are two components of the strategy.Complied by Pioneer Institute of Professional Studies. The funds are channelled from the Zila Panchayat to the Gram Kosh (lit.15 - Complied by Pioneer Institute of Professional Studies. fisheries and poultry. Dindori.

For instance. for their poverty arid what^they could do to get out of the vicious cycle. During its first phase that ended in July 2007. There is also apprehension •regarding the high level of corruption and lack of corroborate the achievements of the project. Indore its website provides a lot'of information and documents pertaining to the various facets of the project. to the agricultural training that they have received.such as those of the DFID that The implementation of the project is based on community involvement which is a crucial sub-cess factor. skepticism in India regarding the impact that government schemes and projects really have. Examples of the implementation approach are adoption of measures to conserve soil and water and use seed more effectively. with 44% of poor households seeing a reduction in the last two years in the length of the 'hungry season' when food stocks reach their annual low. There is. Once such an understanding is created.1 . The MPRLP acts as a facilitator to raise the level of understanding of the people regarding the reasons.high administrative costs and delays in sanctions. food supplies are now more reliable. making it a reliable assessment based on third-party monitoring and evaluation. it becomes easier to motivate the people to adopt measures through joint action and participation in community activities designed to create a sustained livelihood. over 20 per cent of households have seen an increase in the income they obtain from farming. Another welcome feature of the project is the realisation that experiences gained in a project of large size and high complexity can be shared with other governmental agencies and non-governmental organisations for knowledge sharing and transfer of learning. This is due. Indore . in significant part.16 - . Also. the project has made a difference to the lives of many other people. There are other alternative sources on the Internet. It is important that decisions about where resources should be invested originate from within the community and that the community is involved in their implementation. There have been problems arising out of the usual inefficiency of state governments ifi creating the initial administrative structure. Practical measures such as the practice of writing the Gram Kosh account details on the watls or display boards in the villages helps to gain the confidence of the participants. Complied by Pioneer Institute of Professional Studies. in general. Thqre is also concern about the. training in diamond cutting or making leaf plates.Complied by Pioneer Institute of Professional Studies.

operations. The company provides higher education support to employees desirous . evaluated. The present organisation structure of NTPC is a hybrid of functional and geographical forms of structure. the public sector enterprise commits itself to a set of objectives to be achieved over a period of time. It has 26 projects based on coal-based and gas-fired power. embarked on an organisational transformation exercise named Project Disha (lit. Its vision is to be a 'world class integrated power major. aims at efficiency. It is the largest thermal power generating company in India at present. availability factor. there are two board-level committees to oversee audit and management controls functions. is a public sector company set up to accelerate power development in India. with increasing global presence. transparency and quicker response to internal and external stakeholders. power In 2003. which recently opted for SAP as its ERP solution. non-payment or delayed payment from the state electricity boards. based on the recommendations of the consulting firm. commercial and vigilance. aim). oversee the region-based divisions of west. nine gems) in the public sector in India. Integration strategies mean moving backward to coal mining and forward to power trading and distribution. NTPC has a long-term corporate plan for 2002-2017. NTPC has one-fifth of India's capacity for power generation and more than one-fourth of power generated. construction and operation of power generation plants. The MOU system constitutes an overarching control system in public sector enterprises and so is the case with NTPC. direction). The corporate headquarter has some staff functions such as corporate planning. NTPC has a memorandum of understanding (MOU) with the Government of India. Longterm plans aim at diversifying its generation mix to include nuclear power. The corporate and business strategies of NTPC focus on expansion through integration and internationalisation through joint ventures. knowledge sharing and unification of planning and budgeting process. construction and operation of power generation plants and their maintenance around the world. The typical performance metrics include capacity utilisation. The chairman and managing director heads NTPC with the directors looking after the functions of technical. Internationalisation involves the global strategy of leveraging on its core business of engineering.Complied by Pioneer Institute of Professional Studies. AT Kearney. projects. acquisition and strategic alliances. plant load factor. safety and environment.stations'. equipment downtime and energy conservation. NTPC.generation. rewards and incentives system and IT strategy. finance. The company has received consistent excellent awards since the inception of the MOU system. east and the national capital region that supervise plant-level operations. named 'Lakhsya' {lit. productivity. flexibility of functioning. Under the MOU. The operational performance evaluation of NTPC basically relates to the reliability of power supply and economics of power generation.17 - Complied by Pioneer Institute of Professional Studies. powering India's growth. Indore . Indore STRUCTURE AND SYSTEMS AT NATIONAL THERMAL POWER CORPORATION* National Thermal Power Corporation (NTPC) established in 1975. human resource. timely execution of projects and tackling environmental issues. NTPC has a comprehensive system of rewards and incentives that include areas such as industrial relations. south. NTPC is one of the 'nsvaratnas' (lit. It also provides consultancy in these areas. Meritorious employees are awarded the star of the month and employee of the year awards. after which the performance is generation per employee. At the level of the company. Regional executive directors based at regional headquarters.' The core business of NTPC is engineering. The project. legal and secretarial. better data consistency. A separate hydro division operates under director-projects. materials management. improved productivity and reduction of costs. continuing integrating along the power value chain and intensifying internationalisation efforts. NTPC. performance management system. MOUs are negotiated agreements between the government and the central public sector enterprises. has engaged BPCL for leading the change management effort. Among the 14 initiatives recommended were structural changes. Its claimed core competence is to 'develop and operate world-class powep. The SAP solution is expected to help NTPC achieve a faster exchange of information. The major challenges before the company are continual upgradation of power technology.

The high social investment come from the Tata trusts that have a controlling interest in the holding company. environment. raw materials and employees. The Tata family trusts consist of the Sir Dorabji Trust and Sir Ratan Tata Trust besides the J. In the words of Anant the several areas of business performance in the model is of governance and social responsibility. civic amenities. It is the responsibility of every company in the group to make CSR a component of its strategic plan. The Index helps structure our efforts and quantify their effect on the communities and people they are aimed at. The Tata Council for Community Initiatives is a centralised agency consisting of the Tata companies' CEOs.' Of significance is the fact that the Tata Index for Sustainable Human Development is built around the Tata Business Excellence Model that drives business decisions of the group companies. the Tata Steel Rural Development Society works at Tata Steel for the rural communities around the operational units. For instance. charged with the responsibility of directing and coordinating the CSR activities across the group. 'Some people consider social responsibility as an additional cost. you ensure a huge network. Not so at the Tata group where CSR is a key element in the business model. individual family members have created a constellation of trusts and endowments that contribute to a wide range of CSR activities. In order to create accountability. There is a conscious effort to match the strengths and competencies of the company to the developmental needs of the communities being served. This ensures that the dividends paid out are directed to CSR. a depiction that seems to be quite justified.' INCORPORATING CORPORATE SOCIAL RESPONSIBILITY INTO STRATEGY AT THE TATA GROUP* G. power. Tata Institute for Fundamental Research and Tata Institute of Social Sciences. group corporate sustainability. the individual Tata companies are autonomous to choose whatever CSR initiatives suit the requirements of the communities they work'with. Voltas for Women is an exclusively female society consisting of female employees and wives of employees. Despite having a centralised network and structural arrangements.10' Questions 1. the other being the group executive office.Complied by Pioneer Institute of Professional Studies. which is an unusually high figure.' This is seen in the quantum of funding that is channelled into CSR.' This is a statement of the founder of the Tata group of companies. the very purpose of its existence. Tata Endowment Scheme was established in 1892. It is headed by a member of the group corporate centre. . (rani. Over the years. indicating the strategic priority given to this issue by the Tata group. The Tata group describes itself as 'India's oldest. the community is not just another stakeholder in business. largest and most respected business conglomerates'. the company is left free to determine the scope of its CSR initiatives. Typically. the Tata group has a distinctive evaluation system called the Tata Index for Sustainable Human Development. N. business organisations have considered social responsibility as far removed from their mainline business activities. There are nearly 2. Jamsetji N Tata. Regarding compensation. J. Indore of enhancing their qualifications. 'We have adopted a business model to drive social responsibility efforts within the group because that way. The Index is a set of guidelines for Tata companies looking to fulfil their social responsibilities. Collect evidence from the case to support the argument that social responsiveness at the Tata group is closely aligned with its strate gic management. when other companies or business groups may take pride in putting in just one per cent of profits into CSR. be it in the area of arts and culture. Nadkarni. while the Tata Chemicals Society for Rural Development does similar work for Tata Chemicals. education. The Tata group has created a formal structure to direct CSR activities. Some of the prominent Tata-funded institutions are the Indian Institute of Science. The thinking behind the statement probably drives the corporate social responsibility initiatives at the Tata group of companies. who work on health and education issues for women. one of the two top governance bodies. exmanaging director of Tata Steel. Indore . the company has to adopt the norms set for public sector enterprises. This is an indication of the high priority accorded by the Tata group to CSR.18 - Complied by Pioneer Institute of Professional Studies. The_ J. We see it as part of an essential cost of business. we don't. as much as land. but is in fact.90. In the words of J. The group's businesses operate globally through 98 companies—27 of them publicly-listed—in seven business sectors. Thus. Tata Sons. N. making the Tata group companies unique in ensuring that personal wealth is converted into social capital. health or infrastructure. The strategy that each company evolves is required to be focussed on the needs of the communities in which the company works in. The Tata group contributes nearly 30 per cent of its profit after tax.000 The tradition of CSR is embedded in the history of the Tata group. One of 'In a free enterprise. Tata Endowment. vice president.

The Apollo network owns and manages more than 40 hospitals in India and some neighbouring countries. It serves 7. How would you respond to a critic who says particularly from the U. to grow through acquisitions. Focus is created through niches such as medical tourism. strategic alliances. The business portfolio of AHEL has speciality hospitals and clinics. It is possible therefore.4 million customers and aims at increasing bed capacity by around 30% every year. a chain of pharmacy retail outlets and consultancy services for commissioning and managing hospitals. who was then executive director at one of the Hospital Corporation of America's hospitals. in line with whatever opportunity arises for establishing strategic alliances with prospective partners. strategic rethinking may be delayed. The corporate strategy is of expansion through organic as well as inorganic routes. Reddy is a visionary medical doctor-entrepreneur and the driving force behind the Apollo network. that there are instances where the premises of plans may turn out to be faulty. Indore 2. there might be missed opportunities as well as the existence of risk of choosing options that . 95. at a comparatively lower cost internationally. healthcare business process outsourcing and coming up with new ideas in medical research and treatment. Pioneered by Dr. Reddy. There are more than 50 clinical departments for patient care.then claim healthcare insurance reimbursements. of high quality.4 crore. Several business models are used simultaneously. it emerges that the growth trajectory being charted is based more on entrepreneurial feats and business opportunism rather than conscious planning. Reddy. The technological capability of AHEL is seen In the state-of-theart equipments for diagnostic and therapeutic purposes and in cases of using advanced medical procedures such as cardiac surgery using beating heart technique. interna-tionalisation and digitalisation. A plethora of business models used eclectically creates a hazy picture of the AHEL's strategic intent. telemedicine.S. Reddy as the executive chairman and his three daughters holding the positions of managing director and executive directors of finance and operations. It has ISO 9002 and the coveted Joint Commission international (JCI) accreditations of the US. The strategic control appears to be centralised in the executive team led by Dr. A case in point is of hiring Anne Marie Moncure. it was incorporated as a public limited company in 1979. Indore . and global nursing staffing by education and training of nurses. enabling it to provide healthcare to Americans who can.957 crore and net profit is Rs. The level of innovation seems to be high as observed in AHEL's introduction of new services such as medical insurance. Prathap C. The business strategy is of differentiation based on high-quality healthcare at premium price. Professionals manage the individual hospitals. But the motive in this case seems to be related to the hospital trying to secure the JCI accreditation rather than a genuine search for top management talent. that the Tata group engages in CSR activi ties to enhance the reputation of the Tata brand and thereby.19 - Complied by Pioneer Institute of Professional Studies. From the tactical actions of AHEL reported frequently in the media. for the Delhi-based Indraprastha Medical Corporation. manned by about 7000 medical professionals. benefit economically from its social responsibility initiatives? STRATEGIC EVALUATION AND CONTROL AT THE APOLLO HOSPITALS NETWORK* Apollo Hospitals Enterprise Limited (AHEL) has the distinction of being the first and the largest corporate hospital network in India.Complied by Pioneer Institute of Professional Studies. Dr. modelled on the Hospital Corporation of America. Its 2007 turnover is Rs. offering specialised healthcare facilities for foreigners and non-resident Indians. the world's largest private healthcare providers. AHEL is basically a family-owned and family-managed organisation with Dr.

attracting and retaining wellqualified and experienced employees is a critical success factor. Rs.institutional and public investors. needs a strong emphasis on training and development. a NASDAQ-listed. it was set up in India in 1993. and lowering the attrition rate by retaining the ployees is a big challenge. it has improved to 27:73. 1.. It acquired business process outsourcing (BPO) and contact cen. 5. US-based corporation. On-shore versus off-shore mix of business revenues: In 2004. motivation. In the IT and ITES industry. This is an advancement over the prevalent model in the ITES industry based on low-cost arbitrage model. though. The three metrics by which the HR function is assessed are: human capital index. EXERCISING STRATEGIC AND OPERATIONAL CONTROLS AT iGATE GLOBAL SOLUTIONS* The Bangalore-based iGATE Global Solutions is the flagship company of iGATE Corporation.Complied by Pioneer Institute of Professional Studies. 49. The attrition 20 per cent presently at iGATE is on the higher side. The performance indicator for this objective is the cost per employee. things seem to be in hand. indicating a much higher revenue generation from off shore business. infrastructure management and enterprise solutions. The number of large clients from Fortune 1000 companies: Presently. The functional and operational implementation is aimed at achieving four sets of objectives: Shifting from small customers to large cus tomer (Fortune 1000 companies) (b) Shifting away from stocking to projectcon sulting assignments (c) Working directly with clients rather than with system integrators (d) Moving from a local to international markets Some illustrations of the performance indicators that reflect these objectives are: (a) alisations from billing have to be higher. is an average paymaster. 3. The human resource management function being critical in an industry where so many challenges exist. On the operational side. 4. But such attrition is common in the industry where employee mobiiity is high and employee pinching a widespread trend.The competitive tactic is avoiding head-on competition with the formidable larger players in the industry by carving out a niche. the human resource metrics such as hir-ing and attrition rates are critical indicators. The company. 805 crore and net profits. work culture and employee affective commitment. Controlling employee costs: This is an area where concerted effort is required from the HR and finance functions. iTOPS is based on transaction-based pricing for services and supporting the clients by providing the platform. Increasing the number of employees. The strategic evaluation dnd control has both the elements of strategic ss well as operational controls. likely to 8500 in the next two years. iGATE has an integrated people management model focusing on developing technical. which disadvantage it tries to trade-off by offering a more challenging . There are presently about 5800 employees. Human resource metrics such as the hiring and attrition rates: In the IT and ITES industry. thus providing an incentive to remain with the company till they become due. autonomy and attractive incentives. The business definition is serving large customers and staying away from sub-contracting work. iGATE adopts a differentiation business model based on an integrated technology and operations model which it calls as the iTOPS model. iGATE has nearly half of its more than 100 clients from Fortune 1000 companies. to offer IT staffing services. The industry norms for ITES are USS1825 per hour for off-shore and US$ 55-65 per hour for on-shore assignments. Known earlier as Mascot Systems. The business strategy is focused differentiation based on the focal points of testing.6 crore The corporate strategies of iGATE are offering integrated IT services and divesting the legacy IT staffing business snci possibly making acquisitions in the domain expertise for financial services businesses. Hiring less experienced employees lowers the compensation bill.20 - Complied by Pioneer Institute of Professional Studies. Indore . processes'and services. The reward system at iGATE consists of meritorious employees across all levels being granted restricted stock options. Indore might not be advisable. behavioural and leadership competencies. however. this ratio was 55:45 and in 2007. The revenues for 2006-2007 are over Rs. of which the top 10 account for 70 per cent of its business.

quicker promotions and chances for practising innovation. Billing rates: Revenue charged from clients on assignments.32 Questions 1. Indore work 2. cannot compete on scale and is still under the shadow of its original business of body-shopping IT personnel.Complied by Pioneer Institute of Professional Studies. Indore . Critics say that that iGATE lacks the bigbrand appeal of the larger players such as Infosys and Wipro. With project consulting as signments from off-shore clients. where the revenues are typically higher.21 - . Analyse the iGATE case to highlight how it could apply some of the strategic controls Complied by Pioneer Institute of Professional Studies. with lower costs and higher productivity in India. the re environment.

Analyse and describe the process of Complied by Pioneer Institute of Professional Studies. Give your opinion on the effectiveness of the role of reward system in exercising HR performance management at iGATE and suggest what improvements are possible. Indore 2. such as premise control.Complied by Pioneer Institute of Professional Studies. given the environmental conditions in the IT/ITES industry in India at present. 3. implementation control.22 - . Indore . setting of standards at iGATE. strategic surveillance and special alert control. .

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