But that’s missing the point. If the recent SSKI research shows that the worth of FMCG market in India is Rs.450 billion, then
Adi Godrej tells us that he wants to have an incredible Rs.80 billion of this market by 2012. Can he manage even a significant part of it with the likes of HUL, P&G, ITC and many more having a killing hold on the market? Not unless Adi Godrej is ready to take corporate hits by the dozen. And M&As, like what Godrej is attempting of late [e.g. the takeover of UK hair dye manufacturer Rapidol] surely involve the highest risk – global research by McKinsey, BCG and the likes show that M&As destroy shareholder value on an average between 50 to 80%. COO Dr. Rakesh Sinha comments, “Godrej is looking for more such acquisitions for another five years.” Like we said, dangerous!
And to ‘forward-integrate’ their own product value chain, Godrej is also planning to come up with exclusive stand-alone stores that sell just Godrej products! “Godrej is looking for a turnover of Rs.300 crores by 2010 and will have 90 Lifespace stores by 2010,” claims Shyam Motwani, Vice-President and Business Head, Retail, Godrej & Boyce. Critically, as of now, Godrej doesn’t have the product width to populate a store enough to induce repeat purchase by consumers. Does it not then make a good case to also sell products of other players through the Lifespace stores? Godrej is uncommitted on this as of yet.
And finally on the transformation list is the group’s rural marketing plan. The rural market oriented firm, Godrej Agrovet, has two retail arms, Godrej Aadhar and Nature’s Basket. While the former is an agroservices-cum-rural retail outlet, the latter is a claimed first-of-its-kind, one-stop retail outlet for fresh farm produce. The USP of Aadhar is that unlike the first mover ITC’s e-Choupal, they also sell farming equipment to farmers. If you thought the 72 Aadhar stores Godrej currently has are not enough to impress you, then the next figures would shock you! They plan to make this a whopping 1,000 outlets by 2011.
Be it SMG, or the property segment, or retail, or FMCG or for that matter their rural initiative, what stands against Godrej’s strategic intent is a clear fact that forget being first movers, or even second or third or fourth movers; Godrej has perhaps been amongst the last movers amongst the Indian biggies to consolidate market promises. In one perspective, this could be termed a safety first conservative approach; but in another, it could also be termed as a case of opportunities lost. And the sudden intent to ramp up initiatives in all sectors could end up in sucking out crucial resources too fast too soon. But at the same time, on the positive side, there is no question that the vision of the management has gone into a transformative mode, enough to catapult the group into a world beater league, that is, if the dice rolls right. Well, Einstein was criticised – and termed thoroughly illogical – during the initial days of his hypothesis building for the theory of relativity. And then, one day, when he proved it, they termed him the greatest visionary science had ever seen... Adi, we’re waiting, and critics we might be, but we surely are on your side of the theory!
Adi Godrej tells us that he wants to have an incredible Rs.80 billion of this market by 2012. Can he manage even a significant part of it with the likes of HUL, P&G, ITC and many more having a killing hold on the market? Not unless Adi Godrej is ready to take corporate hits by the dozen. And M&As, like what Godrej is attempting of late [e.g. the takeover of UK hair dye manufacturer Rapidol] surely involve the highest risk – global research by McKinsey, BCG and the likes show that M&As destroy shareholder value on an average between 50 to 80%. COO Dr. Rakesh Sinha comments, “Godrej is looking for more such acquisitions for another five years.” Like we said, dangerous!And to ‘forward-integrate’ their own product value chain, Godrej is also planning to come up with exclusive stand-alone stores that sell just Godrej products! “Godrej is looking for a turnover of Rs.300 crores by 2010 and will have 90 Lifespace stores by 2010,” claims Shyam Motwani, Vice-President and Business Head, Retail, Godrej & Boyce. Critically, as of now, Godrej doesn’t have the product width to populate a store enough to induce repeat purchase by consumers. Does it not then make a good case to also sell products of other players through the Lifespace stores? Godrej is uncommitted on this as of yet.
And finally on the transformation list is the group’s rural marketing plan. The rural market oriented firm, Godrej Agrovet, has two retail arms, Godrej Aadhar and Nature’s Basket. While the former is an agroservices-cum-rural retail outlet, the latter is a claimed first-of-its-kind, one-stop retail outlet for fresh farm produce. The USP of Aadhar is that unlike the first mover ITC’s e-Choupal, they also sell farming equipment to farmers. If you thought the 72 Aadhar stores Godrej currently has are not enough to impress you, then the next figures would shock you! They plan to make this a whopping 1,000 outlets by 2011.
Be it SMG, or the property segment, or retail, or FMCG or for that matter their rural initiative, what stands against Godrej’s strategic intent is a clear fact that forget being first movers, or even second or third or fourth movers; Godrej has perhaps been amongst the last movers amongst the Indian biggies to consolidate market promises. In one perspective, this could be termed a safety first conservative approach; but in another, it could also be termed as a case of opportunities lost. And the sudden intent to ramp up initiatives in all sectors could end up in sucking out crucial resources too fast too soon. But at the same time, on the positive side, there is no question that the vision of the management has gone into a transformative mode, enough to catapult the group into a world beater league, that is, if the dice rolls right. Well, Einstein was criticised – and termed thoroughly illogical – during the initial days of his hypothesis building for the theory of relativity. And then, one day, when he proved it, they termed him the greatest visionary science had ever seen... Adi, we’re waiting, and critics we might be, but we surely are on your side of the theory!
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
Top Articles on IIPM:-
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
No comments:
Post a Comment