Introduction The Five Major Corporate Developments in India that are sort of now well established, are a) Developing Core Competencies and new products b) Addressing new segments and new markets c) Huge influence of MNCs in India and d) Products and services to cater to growing expectations of the middle-class. A futuristic perspective is being discussed here.
Developing Core Competencies and new productsCore Competencies are bundles of skills and technologies that enable an organization to offer superior benefits to customers. These competencies are never built on a single day or even a few years. They take even two decades to build. But once in place, these competencies impose "entry barriers" for competitors. That is, the new competitors, even if they are cash-rich companies, can never ever enter the field as the field is itself only for those who have hundreds of skill sets embedded in various parts of the organization and across functions. It is a complete package.
ITC is a classic example. It has leveraged its core competencies in Marketing, which were already well established in the marketing of cigarettes and has very successfully ventured into the manufacture of biscuits. Its Sunfeast brand is a big success today. it is eating into the market share of the market leader called Britannia, in a very big way. It goes on innovating in new products by just leveraging its marketing strengths. For instance, it has just come out with a liquid that enables washing of floors. The key is that neem is a vital ingredient of this product. ITC has been very much successful in the marketing of this product on a very big scale. Yes, there are local brands in the biscuit business and also in the floor washing business segment. But the huge marketing infrastructure of ITC can and will enable it to play the volume game.
These trends will continue. In every industry segment, those who already possess the Core Competencies will simply corner most of the market share and impose huge entry barriers for new competitors. IF KFC and Domina Pizza can do it, so can local restaurants that sell a huge variety of local dishes. Swiggy, Foodpanda, and such others will grow the market by leaps and bounds. Ola will also grow by leaps and bounds. Yet, there will be a huge number of players in every segment. For example, in Chennai, Mumbai, Bangalore and even Coimbatore, there are players who give you the entire lunch served quite hot, through local boys, in huge tiffin carriers, even today. They can offer stiff competition to Swiggy or any other player. However, learning while developing the core competencies will also be vital. IT-enabled businesses will register a growth rate of 20% on a year on year basis. This is because of even the lower end of the segment, with combined family incomes of over Rs.40,000 in the big cities, do not have any time to cook or go shopping. Amazon.com will simply leverage its global expertise to conquer every bit of the business. Yes, Big Bazaar will also grow through its own competencies, but it depends totally on the housewife who has time to shop. New products and services will be so big that the individual customer will have too many choices. The customer never had it so good.
Addressing new segments and new markets Every single player, in every market, will come out with smaller packs. This is to invite the non-user to try the product. The high decibel advertising will also sort of psyche him into using the product. Britannia made a splash by coming with the Tiger brand of biscuits. This became the largest selling brand in India, across all segments. If any organization is ready to address the lower end of the segment, which is a thirty crore market ( individual buyers), the organization will laugh all the way to the bank. There is every chance that at least once, the customer will buy Good day, a much higher priced product from the same company. It does make sense to address all segments and cater to each segment with different products. These trends will continue.
For example, Ricket Benckiser (India) Private Limited, which is a foreign company, has come out with a Re.5 small pack of its product called Harpic, a bathroom cleaner and also toilet cleaner, for which it has a variant. This is selling like hotcakes in rural India. People buy it to use it along with the local "acid" that is always much cheaper. Products will also seek an all-India market and seek to export the product to different countries where the NRI population will simply lap it up. Mambalam Iyers is a famous Chennai-based brand. It is present in most of South India. It has reportedly entered Mumbai and is also keen on exports to the Gulf, Malaysia and so on. These trends will continue. In consumer durables, cars will lead the pack. The likes of Maruti will address even more segments. It has a very good service network and this is also driving its sales. In scooters, TVS Motors and Honda will come out with new products. In motorcycles, the sky is the limit. Space for every major player to grow is very big indeed. These trends will continue. Every single product from the big companies will seek to become pan-India products, as the markets are exploding everywhere.
Huge influence of MNCs in India This cannot diminish in any way. Pepsi may not be selling its colas. But it has come out with a large number of food products, addressing the snack segments so well. Coca Cola is still active. P&G and Unilever still have so many products. Ford, Hyundai, BMW, Volkswagen, Volvo, General Motors and what have you. They are all multinationals. Indian products also do not come cheap. So, the consumer is least bothered if the product is from a multinational.
All of us use multinational products every day. The middle class is wedded to the concept that the MNC products are very good quality products. This trend will continue. However, the likes of Amurtanjan, Dabur, Himalaya Drugs, Pathanjali and so on, will also continue to dish out new products. These trends will continue unabated. Every major player has a "herbal" variant, just to address the growing craze for the "natural" products. This will also continue. Who can stop the MNCs who bring with them the advantage of a huge knowledge acquired in marketing across the world? Not the Government of India or any State Government. The money will come in along with the advanced technology. Since the tertiary sector is also growing by leaps and bounds ( the organized retail sector is still not even ten percent of the total market), the self-employment potential of the FMCG products will keep the economic growth engine very much kicking and this factor alone will not dimish the influence of MNCs in India.
Products and services to cater to growing expectations of the middle-class Go back to some twenty years. Most of the new products cater to the growing expectations of the middle-classes. Take the new shopping malls and a huge number of products sold there. Take the beauty parlors. Take the designer blouses segment that is growing by some 30% year on year.
These trends will also continue. This author met with a family who wanted to move into their new flat in Tiruchirapalli, in June 2019. The interior design budget was itself eight lakh rupees. The NRI son, now in the USA was keen on pumping in the money. The family would not compromise on any single aspect of living. Such expenditures could not even be thought of, some twenty years ago. This is a big development. Every single product or service will keep growing every day.
Conclusion There is absolutely no stopping on any of the four major Corporate Developments in India. The future is very promising and this will keep on improving every single product or service for a very long time to come. The Corporate Developments are very good for the tremendous growth of the economy and this is also very good news indeed.