The Economic Times, 21 – 27 March, 1997

In a scenario that is turning highly competitive, the name of the game is effective strategy formulation.

For a company strategy is all about moving towards the attainment of its vision and the means it employs in order to get there. In order to determine how one gets there, one needs to know where one is at present, which involves examining one's existing strengths, weaknesses, opportunities and threats - what we commonly know as SWOT, Strengths could be brand image, market network, access to international markets, technology in a certain area, etc. and weaknesses could be for instance, the high turnover of manpower, short life-cycle of products, new products in the markets, competitors emerging in the market due to low entry barriers, and so on.

Examining strengths and weakness is easier said than done, as one usually tends to be subjective in such matters. In order to get a fair and objective picture of one's strengths and weaknesses, the best approach would be to benchmark one's own position vis-à-vis others in the same or in a similar industry. This benchmarking exercise is recommended as a tool for understanding one's relative strengths and weaknesses, rather than for improving one's position with reference to those one has benchmarked with.

Having thus understood one's strengths and weaknesses, one should look at one's opportunities and threats that are being posed at an accelerated pace by the era of globalisation and liberalisation. Government policy changes in India have thrown open opportunities in the form of the freedom to enter into joint ventures, the freedom to set up projects overseas, access to international clients etc. Opportunities have also been thrown up by the media explosion; people are now aware of and desire a variety of products and services available worldwide.

Since most people have recognised these opportunities, new threats and challenges are thrown up in the form of competition, with high quality products produced at scales that are economic, and hence, sold at lower prices. These threats will become even more acute as protection barriers are continually reduced, now that India, like many other countries is a part of WTO.

Thus, a clear understanding of SWOT will enable the how-to part of the strategy to emerge clearly. And in order to implement the strategy, one would have to develop specific action plans. For instance, a company could follow a strategy of entering foreign markets and setting up joint ventures in other countries, just a multinationals come to India. Joint ventures can be used to pursue a defensive strategy - for upgradation of quality with international forms, or an offensive strategy - to capture lucrative shares in competitive markets overseas and meet the competition on their 'own turf'.

Companies like Ranbaxy have risen to the occasion and developed a strategy of setting up joint ventures overseas, which has enabled them simultaneously upgrade technology and R & D activities with support from the foreign partner. Dabur is also taking advantage of the opportunities by setting up projects overseas.

One of the major challenges confronting Indian corporates as far as their strategic planning endeavours are concerned, is manpower planning. Unfortunately, Indian corporates so far have treated human resource development as merely an adjunct of the industrial-personnel function - focussed on personal administration such as wages, salaries, payments, appraisals and recruitment, with the little attention paid a modern optimal approach to recruitment and training policy.

Indian corporates faces the challenge of finding the right people and training them to meet the growing challenges of the future, especially as they have been used to operating in a protected environment. Part of their need for skilled and experienced people will be fulfilled by professionals of different nationalities as personnel flows feely between nations. Foreign companies too will want to take advantage of Indian brains; and this demand will not be restricted to the area of software development, but also apply to other areas of management, since much relevant experience is available in India.

The World Trade Organisation is yet another challenge, the impact of which has not been given careful thought and consideration to by Indian companies. There is also urgent need for Indian companies to plan an optimal strategy to tackle this. And they need to find ways and means other than the lobbies and pressure groups they are accustomed to, for it is difficult to change the rules of the game at an international bodies level. While WTO provides an effective mechanism in case of violation, all conditions of WTO need to be met once countries become signatories.

The chairman's speech at the Annual General Meeting 1996 of Workhardt provided reasonably sound insights into how an aggressive and clear strateg for attaining of long-term corporate goals can b formed.

"In an increasingly competitive world, Workhardt believes that profitability will not come merely through sales, but through consistent and reasoned customer focus. There are no product markets, only customer segments whose needs we have to fulfil. The razor-sharp organisational focus springs from an almost fanatical degree of customer-centricity. We are therefore, committed to building business on an on-going understanding and dialogue with our customers. Quality is now the price of market entry, not a competitive differentiator.

"Workhardt prides itself on its growth in the international scene through its quality and globalisation efforts. Our products are supplied in the markets of USA, UK, Germany and 30 other countries. Having acquired AccuMed Pharmaceuticals Inc in New Jersey, Workhardt America Inc. in USA will be our door to a huge generic market of the world. Our offices in Russia, China and Africa have expanded our global reach. We have tied up with Rhein Biotech to effect transfer of biotechnology and add value to our quality of products.


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