Business models key, says survey

The key success driver for Indian businesses over the next five years will depend on business models and adaptation of strategies and not products and services they offer. However, customer relationship, innovation and price would not be critical factors for customers in India in 2010.

Indian organisations, like their global counterparts, would adapt strategies and business models to enable them cope with change, according to a survey, `Business 2010 in India: Embracing the challenge of change'.

The study was commissioned by SAP AG and conducted by Economic Intelligence Unit (EIU), the business information arm of The Economist Group, publisher of The Economist.

Around three-fifth of Indian executives and over two-thirds of those in the financial sector believe that changing the way they do business over the next five years will be more important than developing new products and services, the study said.

A total of 4,018 executives took part in the survey. Respondents were from 23 countries across Europe, Asia-Pacific and Americas, and included business leaders from private and public sectors, including 50 per cent at the level of chief executive officers, chief financial officers and chief information officers among others.

The Indian component of the study involved in-depth interviews with 264 senior executives conducted between November 2004 and January 2005, across various sectors such as manufacturing, financial services, retail, automotive, pharmaceutical and biotechnology among others.

The research was part of an EIU programme involving over 4,000 business and public sector executives across 23 of the world's leading economies.

Fifty-seven per cent of the 264 senior Indian executives surveyed feel that flexibility and rapid responses to market changes would set the winners apart in 2010 and a company needs to adapt business models that can bend with the times.

SAP south-Asia, president and managing director, Alan Sedghi, said, "The survey confirms that change is the biggest challenge confronting Indian businesses between now and 2010.

The survey reinforces that sustainable competitive advantages in India are directly linked to a company's ability to quickly adapt business models to changing customer demand."

Fifty-nine per cent of the respondents was of opinion that consolidation would be the bigger source of competition by 2010.

New rivals would come from overseas, even as existing players consolidate and flex their muscles. To meet these threats companies plan to focus on building existing product lines to generate revenue growth.

Fifty-seven per cent of the respondents felt the ability of Indian firms' to adapt business models would become a major competitive advantage for the country.

Indian respondents count on being able to react promptly to change, while mindful that their economy was becoming more vibrant and globally competitive.

Majority of Indian business leaders felt that a business would be judged by the long-term value it creates. Adapting business models, accelerating the innovation cycle and improving customer retention are the main ways that Indian organizations would go about creating such value.

Executives believe that in next five years, their performance would be judged against a combination of financial, human capital and customer satisfaction parameters.

Another measure for the company would be its commitment to a corporate governance and many believe that this would bring India close to global best practices.