Monday, May 25, 2009

First came the slowdown avalanche, they continued climbing... Then came the storm, they climbed further...

The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School

Winners show How to beat the pants off your competition in a downturn...

B&E attempts to bring out some key facets of competition beating business strategy in a slowdown by analysing the strategies of Indian companies that are actually doing better than their competition in their respective industries. In selecting our elite list of companies, we have considered the all important benchmark of profitability, both in terms of absolute figures and yoy growth trends, for the nine months ending December 2008 (till figures are available). Apart from one exception in the real estate sector, we find that all these winning companies have posted double digit growth rates in profitability. Now let us analyse what these winners have done in their respective sectors to shine in the current not-so-bright times.

The telecom leader is clearly Bharti Airtel. TRAI may have given it a thumbs down on network congestion (read more about it in the Corporation on Tata Teleservices in this issue), but the company continues to rule the market in terms of subscriber base at 91.1 million (at the end of February 2009). Sunil Bharti Mittal, CMD, Bharti Airtel Limited, said on the performance, “Bharti Airtel continues to lead the telecom growth story, adding customer and revenue market share despite intense competition. Bharti’s strategy of extensive roll out ahead of competition, especially in new villages, has yielded rich dividends.” What also keeps Bharti in the black is the fact that it has leveraged its pioneering advantage to get the cream of customers, which helps it even as telecom ARPUs in general are going down. Dipesh Mehta, telecom analyst, Khandwala Securities, comments, “ARPUs for the company have fallen for the company like other telecom companies, but they have not fallen drastically.” Moreover, the perception of Bharti of being a quality service provider continues to go heavily in its favour. Years of brand building are now bearing fruit.

The automotive sector, on the other hand, has been decisively lead by two wheeler giant Hero Honda. Pawan Munjal, MD & CEO, Hero Honda Motors Ltd. proudly affirms, “An unprecedented share of over 57% in the domestic motorcycle market particularly when the industry has been witnessing a massive slowdown... is reflective of the strong fundamentals of this company.” Being the market leader in the executive segment definitely has its advantages; more so in the era of discretionary spending; and the company sports some best sellers in this segment like the Splendour and the Passion. New product launches like the 150cc Hunk Premium and variants of the Glamour and the CD Deluxe last year are also doing well for the company. Also, the rural push that the company has made over the years seems to be delivering results now. That’s why Hero Honda is gloating over a 10% increase in sales yoy in March, while key competitor Bajaj reported a decline of 14%.


For more articles, Click on IIPM Article.
Source :
IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and
Arindam Chaudhuri (Renowned Management Guru and Economist).

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