Strategic tools for the practising manager

The Indian wine market currently stands at 4.6 million litres in volume terms and Rs 450 crore in value terms.

The wine market is expected to grow to 8.3 million litres by 2010. Per capita consumption of wine remains extremely low in India; however, there is growing consumer interest in wine with a number of wine clubs opening in Delhi, Chandigarh, Hyderabad and Bangalore.

Nearly 80 per cent of wine sales are accounted for by the major cities, especially New Delhi, Mumbai, Chennai, Kolkata, Pune and Bangalore.

West India accounts for over 41 per cent of total volume sales of wine in India, followed by North India, which accounts for 29 per cent of volume sales.

Nearly 90 per cent of wine sales are for still (that is, red and white) wines. Sparkling and rose wines, in contrast, target select segments of particularly affluent consumers.

In most states the sale of wine remains restricted to licensed off-and on-trade outlets, which means a limited number of outlets selling wine.

Around 63 per cent of the volume sales of wine is through off- trade channel in five-star hotels, pubs and bar-restaurants.

KIT by Technopak Advisors

Selections from management journals
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Banking lags far behind most other consumer retail industries in developing leading-edge products and services, but the industry's rush of consolidation is ratcheting up the competitive ferocity.

By federal law, no bank may hold more than 10 per cent of the total US deposits, and many of the top 20 banks are closing in on that limit, which means that growth by acquiring new customers will no longer be feasible. Instead,banks will have to grow by strengthening relationships with their current customers, and to do that banks will have to innovate their offerings.

Retail banking's new frontier : Innovating customer service
January 2007, strategy+business

Read this article at http://www.strategy-business.com/

Reliance Gateway Net, VSNL, Scandent and GHCL aren't exactly household names in the US, but they may be signs of bigger things to come. These are only a few of the growing number of Indian businesses that have acquired US firms in the past few years. And the US merger-and-acquisition activity is just part of a bigger picture.

Indian companies have been on a buying spree in continental Europe, Great Britain and Asia in attempts to become key players in global markets. What accounts for all the M&A activity? Faculty members at Wharton and a New York investment banker who is advising an Indian firm on the acquisition of a chain of US jewellery stores point to a combination of factors "" means, motive, confidence and opportunity.

"Over the last decade, Indian firms in various industries "" most visibly in information technology but also in areas like auto components, the energy sector and [food products] "" have been slowly building up to become emerging multinationals," says Wharton management professor Saikat Chaudhuri.

The outsourcing phenomenon, in which Western firms have hired Indian companies for call centre work and other tasks, has reaped benefits for Indian managers, exposing them to Western companies and management practices and, at the same time, demonstrating to non-Indian firms that India is a reliable source of low-cost, yet high quality, products and services.

Indian companies are on an acquisition spree. Their target? US Firms
December 2006 in Knowledge@Wharton

Amazon plans to sell computing power like a utility company sells electricity. Google is building a suite of productivity software programs connected to the web to take on Microsoft. And Yahoo has launched or acquired so many properties that they run the risk of competing with each other.

Such efforts could represent new growth areas and smart diversification moves for these web giants. Or they could prove to be costly distractions. The big question: Should a company stay focused on the core competencies and competitive advantages that made it great, or should it diversify to keep up with, or attempt to surpass, its peers?

Experts at Wharton say it is one of the trickier questions facing Internet companies because the barrier to entry is so low for many online business models.

"What's different about online businesses is that the cost of moving into adjacent areas may be significantly lower than in the physical world," says Wharton legal studies and business ethics professor Kevin Werbach.

"What kinds of expansions are synergistic with the core business, and which are tangential? Answering that question effectively forces companies to assess their true competitive advantages."

But finding those advantages is easier said than done, says Wharton management professor Sarah Kaplan. Under classical management theory, companies should leverage existing expertise or assets into new businesses to generate returns. The caveat: It's difficult to figure out what asset to leverage.

To diversify, or not to diversify: What's at stake for online giants in growth mode
December 2006 in Knowledge@Wharton

Read these articles at http://knowledge.wharton.upenn.edu