Brainwave
Built To Last
Strategic Imperatives in Indian Organisations: Formulations and Implementation of unbeatable plans and core competencies
by Dr. Syed Ahsan Jamil
Assistant Director, Institute of Productivity and Management, Lucknow
Email: jamilsir@yahoo.com
In this era of turbulence never seen before in the Indian context it is panic all around. The CEO conclaves the round table conferences, the beeline to attend crash course at the B-School all is happening. One can definitely feel the pinch if one is very much related to the business environment of the country.
Since 1991 Indian economy and Indian companies have gone through the upheaval,, whether it is in terms of reinventing their business model, or the mad rage for corporate restructuring. Marketing, New Product Development, Customer Relationship, TQM were the buzzwords on mantras that were quickly learnt, understood and adopted.
The decades of 1991 to 2000 saw companies losing their market share, rebuild it and re-lose it. The trauma was evident as profit per inflationary trends saw a dip over the decades. The blame game saw eager takers and many a heads rolled in the battlefield of corporate wars. Suddenly long term sustenance was the key issues and building vision and mission was paramount strategic imperative for Indian companies.
This was not only the scenario in India but was a part of the global turbulence. Jim Collins and Jerry Parsers in their 1994 best seller ‘Built to Last’ dwelled on the subject of surviving turbulence and singled out 18 companies which they truly called visionary. The quest for resilience had begun among companies.
What most of the companies were worried were the turbulent times ahead, which are very much on card given the difficult Indian consumers. Difficult in the sense that Indian consumer is unpredictable rather ‘shocking unpredictable’ as the for CEO of HLL opined. With consumerization all around Indian consumers have become quite mature in their choice and definitely the concepts of customer value have gained mere importance. In the past executives had always believed that business models are immortals. They can continue to reap perennial benefits for time immemorial, but that was a faux pass, which they are not realizing. The reasons are varied. Technological discontinuities, regulatory upheavals, geopolitical shocks, industry deverticalization and disinter mediation, abrupt shifts in consumer tastes and hordes of non-traditional competitors – these are just a few of the forces undermining the advantages of incumbency.
Surviving turbulence need strategic initiatives and imperatives that need to be formulated and implemented. The zest of resilience is the key for survival. A proactive approach is better that a reactive approach – strategies like turnaround are no more in vogue given the turbulent times. There is an increasing need to formulate plan and implement them at a lightning speed in order to withstand the dynamic changes happening all across.
In order to build strategic imperatives that are going to last long an organization must address the following four challenges in the Indian context:
a) Cognitive Challenges: A company must become entirely free of nostalgia or ‘live in past syndrome’, utopia on feel good and arrogance of being the best. It is very imperative that companies are able to introspect regularly and find ways and means to correct themselves and keep abreast with dynamic environment and consider how these changes are likely to affect its current success. The recent advancement in information technology and the telecom industry in India had ushered in new vista and made business more dynamic and fast. Today’s consumers have access to all these technological gadgets and have become in more choosy and wise. Strategic plan of Indian companies must include these dynamic factors given the environment to have the strength of resilience.
b) Political Challenges: An organization must be able to divert resources from yesterday’s products and programs to tomorrows. This does not mean funding flights of fancy, it means building an ability to support a broad portfolio of break out experiments with the necessary capital and talent.
c) Ideological Challenge: Few organizations question the doctrine of optimisation. But optimising a business model that is slowly becoming irrelevant can’t secure a company’s future. If renewal is to become continuous and opportunity driven, rather than episodic and crisis driven, companies need embrace a creed that extends beyond operational excellence and flawless execution.
d) Strategic Challenge: Strategic imperatives include alternatives and updating with complete awareness of environment. This will only lead to the ability to create a plethora of new options as compelling alternatives to dying strategies. One of the most important aspect is strategic challenge is finding out ways and means to formulate strategic imperatives in the form of unbeatable plans and focussing on core competencies. An analysis of the Indian consumer and product match will show startling and shocking scenario. There is a big gap between what marketers in the Indian market are offering and what Indian consumers need. Looking at the socio-economic milieu, one can easily be able to trace that still seventy percent of the Indian consumers are rural based and only 30% are urbanites. Analysing the income level and disposable income at hand one can very well establish that almost the two-third of our Indian consumer earn less than one and a half lakh of rupees per annum and given this scenario the Indian marketer is not able to match its offering to these income level.
Analysing the Indian consumer market one can conclude that the Indian marketers are producing various products for only richer section (i.e. 30%) of the population. Most of these products are one which are costly and beyond the reach of the average consumer. An analysis of the Indian car market will reveal that there are more than five models or brand for over rupees five lakhs range but for entry level which is the most potential market we have only one solitary model being on offer to middle class – the Maruti 800. If one wants to buy a shirt, an average consumer would have a maximum budget of five hundred rupee and in this range only two or three brands are available to choose from, the best brands being over Rs. 500 and even beyond a highly costly Rs. 1,000, where brands like Wills, Colour plus, Van Hussein, Allan Solly are found and are visible everywhere but to the two third consumers of middle class they are only and only window shopping products.
Examples are galore - whether they are soaps or shoes or they are apparels or foodstuff. It is a strange irony that Indian marketers have till date only being vying for market share at premium and super premium segments; they have failed to realize that the real potential lies in formulating newer products for consumer with average income. It is the average Indian consumer of middle class segment that has the ability to purchase more and volumes could only then be built.
Indian companies’ strategic imperatives should start from building strategies revolving around how to build volumes by marketing quality products to the average Indian consumer. These core competency must focus on building products which have real ‘customers value’. Until and unless they don’ respond to these alternatives they are bound to decline with time. There is an urgent need to rededicate and refocus all strategies from the point of view of the average Indian consumer.
When you run to catch the bus,
your heart rate accelerates ‘automatically’. When you stand up
in front of an audience to speak your adrenal glands starts
pumping, ‘spontaneously’. What you catch sight of something
alluring, your pupil dilate, ‘reflexively’. Automatic,
spontaneous reflexives- these words describe the way your body’s
automatic system responds to changes in your circumstances.
Similarly the Indian companies should try to devise mechanism by
way of which they respond to changing circumstances
automatically. It is only then we could be able to formulate
real vision and brace ourselves for the fiercely competitive
Indian market and only this will prove to be the ultimate
competitive advantage in this age of turbulence-when companies
are being challenged to change more profoundly and more rapidly,
than ever before.
Disclaimer : The views
expressed in the articles are author’s own views B’Cognizance or
IIITA is not liable for any objections arising out of the same.
The matter here is solely for academic use only.