 |
| Late patriarch M.A. Chidambaram (centre),
A.C. Muthiah (right), and Ashwin Muthiah: A casualty of
competition |
In
the end, scale won out. Reliance moved to the top of the heap of
family business groups in the past decade with a distinctly old-world
strategy of striving for market dominance through building global
scale. The Tata Group and the Aditya Vikram Birla Group remain in
the top three. And the entire list has an overwhelming manufacturing
bias. Reliance and the A V Birla Group have built global scale in
commodity-businesses. So have two of the three new-entrants, the
Sterlite and OP Jindal groups. The moral: asset-intensive market
dominance strategies work.
Expect that to change: An ambitious telecom
venture will increase Reliance's services-revenues; and vsnl, Tata
Teleservices, and TCS, will account for a chunk of the Tata Group's.
Organised retail is RPG Enterprises' great white hope. Even the
Aditya Birla Group has made a tentative foray into services.
Strangely enough, none of the new economy's stars that can be classified
as family business groups-there are a few led by Wipro and Ranbaxy-come
close. Both companies named in the previous sentence will one day
be part of the list, but not anytime soon.
Between 1991 and 2001, the combined sales of
the top ten family groups increased from Rs 31,452 crore to Rs 1,30,630
crore; their net profits from Rs 1,434.08 crore to Rs 10,279 crore.
Significantly, the net profit margin for most groups has fallen,
though a few groups have managed to show some improvement-Reliance
has actually managed to double it.
 |
| Arvind Mafatlal (left) and Hrishikesh Mafatlal:
Their diversifications bombed |
Three family groups have seen their fortunes
plummet in the decade that was.
The Chennai-based M.A. Chidambaram Group has
dropped to number 15 on the list. Its diversifications, into pharmaceuticals,
power, telecom, and petrochemicals have either remained on paper,
or not borne the desired results. And Chairman A.C. Muthiah's ability
to manage the environment and thrive in the licence raj hasn't stood
him in good stead in a free market.
 |
| The late M.R. Chabbria: His empire is
out of the honours club |
The same can be said of original raider, the
late Manohar Rajaram Chabbria's empire (the group is now ranked
50) which includes the likes of Shaw Wallace and Dunlop.
The Arvind Mafatlal Group has done worse; it
has dropped to 52 on the ranking. Unrelated diversifications and
sub-optimal scale didn't help its cause. Nor did an acrimonious
battle over the control of NOCIL that forced the Mafatlal family
to buy out the stake of its joint venture partner, Shell.
In contrast, the three family groups that have
entered the top 10 have been able to ride the liberalised business
context of the past decade to their benefit. There's a moral in
that, but it's so worn-out that we're not goint to repeat it here.
-Roshni
Jayakar
NEW FACES
The Cabinet Of Dr Vajpayee
A cosmetic make-over may not
mean all that much for business.
 Yashwant
Sinha
Yes, he did use some of his diplomatesse in dealings with IMF and
World Bank, but surely that doesn't qualify him for the external
affairs ministry. One saving grace: he won't be able to roll back
anything there.
 Jaswant
Singh
The policy wonk may be a political choice to head the finance ministry,
but he is a liberal at heart and extremely pro-reforms. A BJP-vet,
he may actually be better placed to co-ordinate reforms-related
action plans with other ministries.
 Shanta
Kumar
His pragmatic approach made him an unpopular foods minister and
may have effected his transfer. Still, its not as if there are no
hard decisions to take in the rural development ministry
 Arun
Shourie
His sterling performance in the disinvestment ministry may have
resulted in his portfolio being untouched, but he may have actually
made a very good finance minister.
 Arun
Jaitley
The man was responsible for key legislation-in-the-making regarding
sick companies and the Competition Bill. Moving him out of the law
ministry looks like a retrogade step.
 K.
Jana Krishnamurthy
Krishnamurthy may be a lawyer, but he'll have to work hard to do
a Jaitley in the law ministry.
-Compiled by Swati Prasad
DREAM SEQUENCE
The Bollywood
Connection
Indians account for just half-a-per
cent of the over 32 million visitors Switzerland plays host to every
year. But that's just half the story.
 |
| Switzerland: If it is a song sequence,
it has to be the Swiss Alps |
India
and Pakistan nearly went to war this summer, and the Swiss benefited.
You read that sentence right, the Swiss did benefit. With most embassies
downsizing staff, visas for Indians travelling out weren't all that
easily available. The UK, for instance, said it wouldn't issue visas
to first-time travellers for some time. Switzerland did no such
thing and holiday-makers eyeing other locations in the UK and continental
Europe gleefully opted for the country. The only discordant note
in this otherwise happy aria was the number of other Indians one
would encounter in Switzerland.
Till April 2002, India accounted for a mere
half-a-per cent of the 11 million odd visitors to Switzerland this
year, till April 2002. Israel did 0.8 per cent and Brazil 0.6 per
cent. Of the 4 million plus Indians who head out every year, just
about 5 per cent visit Switzerland. May and June may have redressed
those statistics some, but Switzerland doesn't really need any help
in selling itself to Indians.
The proportion may be insignificant, but there
has been an exponential growth in the number of Indians headed for
the Swiss Alps. Between 1998 and 2001, the number tripled, from
55,102 to 178,613, a jump of 300 per cent. This, when, outbound
tourism grew at an average rate of 2 per cent.
The Swiss claim their tourism department has
been working hard in India. They don't really need to. "The
Indian outbound travel market is maturing with travellers looking
beyond Singapore and Thailand," says Uttam Dave, CEO of PKF
Consultants. Switzerland has caught Mr. Bharat's fancy largely because
of Bollywood's love affair with the locale, even if for just one
out-of-context song and dance sequence in the film. Maybe that's
one reason to shun Switzerland and look to deepest Africa the next
time you plan a vacation.
-Shailesh Sharma
BOOK-WORM
Behind The Numbers
Ten insights from the statistics-heavy NRS 2002.
1. Print readership has
grown 10 per cent, from 163 million in 2000 to 180 million in 2002.
Nearly 48 per cent of print readership comes
from rural India. It is here that the future of print lies: 248
million literate adults largely in rural areas, do not read any
publication.
2. The average television
viewing timing has come down from 85 minutes per day/per person
in 1999 to 82 minutes in 2002.
A surprising trend, but such a minor
drop in viewership is unlikely to impact television advertising,
as the medium still accounts for 72 per cent of the 13-hours a week
urban adults spend on any traditional medium.
3. Readership of
newspapers/dailies has gone up 20 per cent, from 131 million in
1999 to 156 million in 2002.
Apart from English and Hindi dailies,
a large part of this growth came from Marathi, Telugu and Malayalam
dailies. Readership of Tamil dailies actually declined by 7 per
cent.
4. Magazines
have been the biggest losers, with readership declining almost 10.4
per cent.
English magazines have registered a marginal decline of around
3 per cent. All other regional language publications saw readership
drop 10 per cent.
5. The internet
user base in the country has gone up 50 per cent, from 4.11 million
in 2001 to 6.02 million in 2002.
At a mere 3 per cent of the country's total readership base
of around 180 million, the medium is far from being anywhere near
mass one.
6. Cable &
Satellite penetration has jumped 37 per cent, from 29 million households
in 1999 to 40 million in 2002.
Growth in television advertising during the same period has
kept pace with the cable and satellite penetration in the country.
7. Hindi dailies
added over 10 million new readers in a span of two years.
The engine of this growth has been rural India, which accounted
for close to 60 per cent of the 10-million new readers.
8. Newspaper
readership grew by around 10.4 per cent between 2000 and 2002; it
grew at a phenomenal 49 per cent in households with a monthly income
above Rs 10,000.
Dropping cover prices may have nothing to do with purchase
decisions.
9. Magazines
lost nearly 10 million readers between 2000 (96 million) and 2002
(86.2 million).
A loss of nearly 6 million odd urban readers made this a double-whammy.
10. The only
silver lining for magazines is the 25.6 per cent jump in readership
in households with a monthly income over Rs 10,000
Ad relevant readership, did you say?
-Shailesh Dobhal
EXECUTIVE TRACKING
Springtime For CEOs
Recession or not, there's an unsated demand
for senior managers out there in India Inc.
 |
| Pranab Barua: He spurned several offers
to start it up |
In
January 2002, Pranab Barua put in his papers at Reckitt Benckiser,
not the first chief executive officer to quit after differences
with regional HQ on how the Indian ops needed to be run. In June
2002, he announced the formation of Veriture, a consulting firm
targeting the fast moving consumer goods business.
In the five months between the two events,
he is rumoured to have said no to at least two heavy-duty offers.
Reports go that Ninu Khanna, Dabur's low-profile chief executive,
and now the CEO of Bombay Dyeing, tossed up between rival offers
before deciding on the textiles major.
And the man he replaced, Adhiraj Sarin is busy
evaluating the several offers on hand-all posts come with a corner
room.
Corporate India's search for a few good men
(and women) hasn't been impacted by the slowdown. Announcements
regarding a senior exec moving from one company to another actually
elicit a rash of alternative offers.
|
Exit Stage Left
|
 |
| R. Sankaran: Time to move on |
Mergers and movements go together.
The buzz in head-hunting circles has it that R. Sankaran, who
sold the investment banking arm of his company Ind Global Finance
to Andersen last year, is looking to move on.
The reason? Andersen has been acquired by Ernst & Young
and the corporate finance business of the merged entity isn't
big enough for Sankaran, a 52-year-old former head of investment
banking at Standard Chartered, and his counterpart from Ernst
& Young Rajiv Memani, the son of the company's Chairman
Kashi Nath Memani.
Good move, Munesh (in case you missed it, the former head
of Andersen's corporate finance business moved to N.M. Rothschild
some time back). Watch this space for an update.
-Seema Shukla
|
hfcl's head of hr Rajinder Sinh (he moved from
Ranbaxy) was considering a move to Raymond. Then, Reliance got whiff.
Result? Sinh today serves as President (hr) for the company's petroleum
business.
Even head-hunters, those eternal optimists,
admit that things have rarely been better for senior managers. "Times
were never bad for performers," soft-pedals Atul Vohra, CEO,
Heidrick & Struggles. "But today, the number of opportunities
have increased substantially." So much so that companies are
no longer shy of hiring execs who have left their previous jobs
under far-from-ideal circumstances.
''We recently presented a person who had been
fired from his previous job to a client," admits Preety Kumar,
Chief Executive, Amrop. "Ultimately, it is competence that
matters."
The demand for senior managers has come as
a boon for Indian executive search firms. Globally, the business
may have declined by 30 per cent last year but all's well in the
subcontinent. And headhunters have people like Barua to thank for
it.
-Seema Shukla
|
