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Part - III
In view of this changing scene, the set of strategic decisions to be taken by a corporate entity can be classified into two categories:
Fit a segment of the market that comes close to the existing value proposition and the tested (under different but somewhat comparable situations) business model.
Re-engineer the business model with a view to maximizing the market opportunity under the constraints that are unique to the Indian environment.
The first choice requires deep-pocketed patience and an attitude to fight back when the market becomes ready. Believers in this philosophy are ready to forego a market opportunity rather than compromise on a uniform business practice. Weird that it might sound, it is definitely not uncommon. A similar case in point is perhaps Nestle's exit (with a view to return in the long term) from the packaged drinking water segment citing its inability to enter a price war that had been driving the market off late.
On the other end of the spectrum, is the business practice of innovating products by a hybrid model whose basis is often alien to the target market segment. This practice need not necessarily be unique to the private sector. A classic example of this is the concept of Kisan Credit Cards whose present base of 24 million outnumbers the conventional Credit Card base (of urban India). A private sector parallel shown by Arvind Mills was the introduction of its ready to stitch "Ruff and Tuff" jeans priced at INR 195. It resulted from the firm's market research which showed that not only did its pricing of the lowest level jeans take them beyond the reach of the average rural Indian but also an average rural male was averse to the very idea of readymade garments!
Thus in a nut shell, depending on the seller's attitude towards the market one can see that even the "market-readiness" of the economy happens to be a relative term. While one may think that Indian markets are not prepared for the idea of high-end table water another may mould the offering according to the present degree of preparedness of the market.
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*Contributed by -
Suchintan Chatterjee,
Post Graduate Diploma in Computer Aided Managemnet (PGDCM),
IIM Calcutta.
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