CORPORATE STRATEGY FRAMEWORK

INTRODUCTION

The corporate strategy be in relation to:

(a) outputs and

(b) Inputs

The tangible outputs of a corporation are the Goods and services.

So, in the first instance, our strategy has to be in relation to the Goods and Services that we wish to provide to cater to various human wants and needs in the days to come.

Human wants give rise to a demand for such products and  services. A broad framework of human wants which is used as a basis for the recommended Corporate Strategy with respect to outputs is given in

Annexure II

Our ability to deliver such Goods/services will depend upon a number of Inputs.

Hence, we must also develop specific strategies in relation to such Inputs, illustrated in

       Annexure II

During the last two decades, L&T's Corporate Strategy has remained quite resilient to the external and internal demands. The milestones of the past should now inspire us to add many more milestones during the closing decade of the 20th century and beyond.

LOOKING BACK

On a careful examination of the 50 year history of L&T, the following observations emerge:

1     Quite early-on, our founding fathers, envisaged the importance of most of these resources.

2     The emphasis did shift from one to another, depending upon the Govt policies and the stage­ of-development of the Indian economy.

During the last 10/12 years, L&T responded to the challenge of rapid growth through:

1 DIVERSIFICATION

shipping

Cement

Medical Electronics

Computer Peripherals

Merchant Export

Leather Shoes, etc.

2     GEOGRAPHICAL DISPERSAL

Awarpur

Ahmednagar

Mysore

Hazira

Kalol

Ankleshwar

pithampur

3     ORGANISATION STRUCTURE

The following functions were elevated to the Corporate Management level:

Personnel , organisation Development Long Range Planning , Diversification.

There was also a considerable restructuring of our existing business groups. Smaller groups, with product-lines having large long-term business potential, came into existence.

4     MERGERS

,For better financial management, the following Subsidiary/Associate Companies were merged into L&T:

- Christensen Longyear (India) Ltd. (CLIL)

- Utkal Machinery Limited (UTMAL)

- Engineering Construction Corporation Ltd. (ECC)

5     JOINT VENTURE

After a lapse of many years, a new joint venture, "L&T Gould Ltd." carne into existence.

These responses were adequate to meet the challenges of the late 70's and the 80's.

OUR FUTURE RESPONSE

Our strategy for the rest of this century and for the 21st century needs to be in the perspective of our response to the future.

Our response to the future could be:

a) To be able to "respond" to the changes

b) A mere "survival strategy"

c) To "anticipate" the future and be ready for the change when it happens

d) To "make things happen" and influence the future itself - the way we want it to be - through deliberate and planned actions

Considering our response in terms of (c) and (d), the possible diversification strategy is recommended.