Tuesday, September 16, 2008

Analysts believe that Videocon’s main strategy after liberalisation is based on high growth potential businesses.

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They are here to achieve business goals rather than personal objectives.

During the 1990s, the electronics sector was visibly explosive & the market required more cVideocon’s success ompanies to cater to the burgeoning demand. In the same way, India’s rapidly expanding economy today has a voracious demand for oil & natural gas and the market has huge potential for private corporations, which can replenish it more efficiently working in sync with public sector units as a PPP model. The recent tie-up of Videocon Industries with BPCL to acquire EnCana Brasil Petroleo, which has interests in 10 exploration blocks in Brazil is one such instance. A diversified business portfolio allows Videocon to offset losses in any one division, thereby giving a stable market outlook. The company’s strategy in putting money where there is maximum activity (even though it’s a capital intensive sector) is paying dividends and further future expansion is now possible. As part of its global acclaim, Videocon has been reportedly assigned oil exploration blocks in countries as diverse as Australia & Oman. No wonder the tag of Indian multinational sticks on.

commanding excellence

Last, but not the least, playing a pivotal role in Videocon’s success is its corporate governance structure and the teamwork between the three brothers, who have a deep relationship with the city of Aurangabad, though V. N. Dhoot now sits in the Mumbai office. P. N. Dhoot confirms to B&E, “We are a family owned, professionally run business house.” He tells us the three brothers do not have any personal ego or politics between them. They are here to achieve business goals rather than personal objectives. P. N. Dhoot strongly believes there will be no ownership issues at least for the next 30 years. Moreover, he says that the three brothers have ensured a system wherein if one brother is not available at any point in time, the other can take decisions on his behalf. This was endorsed by Raj Kumar Dhoot (also a Rajya Sabha MP) as well, with whom we had a brief interaction over lunch. Their interference with the management is largely restricted to macro numbers.


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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).


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