Strategic tools for the practising manager

KIT

THIS WEEK: The auto-accessories market in India, 2007

The current market for auto accessories (for cars and two-wheelers) is estimated at Rs 4,550 crore. Car accessories account for almost 75 per cent of the market, that is, Rs 3,500 crore. Two-wheeler accessories account for the balance 25 per cent, that is, Rs 1,000 crore. New-car accessories account for 78 per cent of the total car accessories market, while replacement car accessories account for the balance. The new-car accessory market is estimated to grow at 15 per cent year-on-year, against the 10 per cent growth estimated in the old car accessory market. A little over 30 per cent of the car accessories market is captured by original equipment manufacturers.

NUGGETS
Selections from management journals

Is greed killing the initial public offering (IPO) market in India? In recent weeks, several large equity offerings, including those from reputable business houses, have struggled to hit their targets.

India's stock markets have been volatile amid a global credit crunch and fears of a US recession, but imperfect markets are also to blame, according to Wharton professors and investment experts.

What ails India's initial public offering market?
India Knowledge@Wharton
February 21, 2008
Read this article at http://knowledge.wharton.upenn.edu/india/

Boutique car designer Dilip Chhabria says he has the world's best job because he is "able to dream with other people's money." His Mumbai-based firm, DC Design, has created luxury cars for the rich and famous worldwide.

Last month, Chhabria announced plans to set up India's first car design institute in Pune to train designers, engineers and marketing professionals for the growing number of domestic and multinational auto manufacturers who have set up shop in India.

Chhabria spoke with India Knowledge@Wharton about his premium niche, the reception of Tata Motors' new Nano and why India is such a hot market for car makers.

Dilip Chhabria: Tapping into India's promise as a global hub for car design
India Knowledge@Wharton
February 21, 2008 Read this article at http://knowledge.wharton.upenn.edu/india/

An abrupt and lasting drop in revenue growth is a crisis that can strike even the most exemplary organisation. The authors' comprehensive analysis of growth in Fortune 100-size companies over the past half century revealed, in fact, that 87 per cent of them had stalled out at least once.

The record shows that if management cannot turn a company around within a few years, the odds are that it will never again see healthy top-line growth.

Matthew Olson, Derek van Bever, and SethVerry, of the Corporate Executive Board, have uncovered and categorised the most common causes of growth stalls.

The majority of these standstills are preventable because, according to the authors, they arise from management choices about strategy or organisational design; external factors, such as regulatory actions or economic downturns, account for only 13 per cent.

Four categories predominate. Premium-position captivity: when a firm's world-class offering has won the most demanding customers in the market, it often fails to respond effectively to new, low-cost competitive challenges or shifts in customer valuation of product features.

Innovation management breakdown: Because most large corporations generate sequential product innovations, any systemic inefficiency or dysfunction in the innovation chain can cause extremely serious problems that last for years.

Premature core abandonment: Managers may conclude too quickly that a core market is saturated. Or they may incorrectly interpret operational impediments in the core business as evidence that it's time to move into new competitive terrain.

Talent bench shortfall: Insufficient capabilities "" particularly at the executive level and typically in areas of acute and specialised need "" will stop growth dead in its tracks. Two tools can help managers avoid growth stalls: a self-test to diagnose impending stalls and a choice of practices to explicitly identify strategic assumptions and test them for ongoing relevance.

When growth stalls
By Matthew S Olson, Derek van Bever and Seth Verry
Harvard Business Review, March 2008
Read this article at www.hbr.com

BOOKWORM
The top 10 business bestsellers

BUSINESS MANTRAS
Authors: Radhika Piramal, Mulund Beriwala, Gita Piramal and Aparna Piramal
Publisher: Penguin Books
Price: Rs 150
ISBN: 014029130X

MARKETING METRICS: 50 + METRICS EVERY EXECUTIVE SHOULD MASTER
Authors: Paul W Farris, Neil T Bendle, Phillip E Pfeifer and David J Reibstein
Publisher: Prentice Hall Business Publishing
Price: Rs 1,767.58
ISBN: 0131873709

YOUR MANAGEMENT SUCKS
Author: Mark Stevens
Publisher: Random House Inc
Price: Rs 909.15
ISBN: 1400054931

THE GOOGLE STORY
Author: David A Vise
Publisher: Macmillan
Price: Rs 595
ISBN: 1405053712

WHAT THEY DON'T TEACH YOU AT HARVARD BUSINESS SCHOOL
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Publisher: ProfileEPZ
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ISBN: 1861975643

THE ART OF WAR AND THE ART OF MANAGEMENT
Authors: Gary Gagliardi, Sun Tzu and Sun Zi
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ISBN: 1929194056

HOW TO GET SERIOUSLY RICH WHILE FAILING IN BUSINESS
Author: Philip Sadler
Publisher: Rupa & Co/Dakshin
Price: Rs 195
ISBN: 0285636782

GAME THEORY
Authors: Shaun Hargreaves-Heap and Yanis Varoufakis
Publisher: Routledge
Price: Rs 3,019
ISBN: 0415250951

THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE
Author: Stephen R Covey
Publisher: Pocket Books
Price: Rs 295
ISBN: 0743408853

THE FRONTIERS OF MANAGEMENT
Author: Peter F Drucker
Publisher: Butterworth Heinemann
Price: Rs 295
ISBN: 8181473795

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