DIVERSIFICATION
STRATEGY : OUTPUTS (GOODS/SERVICES)
Before
we get into a detailed examination areas of diversification-opportunities, let
us recapitulate our Corporate Mission :
a) To serve the Indian Nation through
manufacture and supply of high quality goods and services at reasonable cost;
b) To become the most diversified company of India.
b) To become the most diversified company of India.
A
Diversification strategy for "Goods/Services" must necessarily take
into account:
a) L&T's strengths &
weaknesses
b) GOI's Licensing Policy
But,
"taking into account" should not be taken as "binding" or
being "limited by".
Any
diversification move would obviously generate newer challenges. These
challenges, in turn, could also crystallise our "weaknesses". Such
crystallisation, however, would emphasise the need to discover ways and means
to convert "weaknesses" into "strengths". Some of the
options could be as listed in
Annexure III
This
list is only a demonstrative one as there could be many more options available
to us.
Various human wants and needs generate the demand for
innumerable goods and services, which in turn create the necessary prospects
for business. Some of the specific areas that emerge out -of these human wants
and needs are identified as follows, under each want category.
A. want
Category: ESSENTIAL
A.I Economy sector: Food
A.I.I
Sub-sector:
Agriculture-based
Products/Services Recommended
Products/Services Recommended
* Flavours
* Processed
foods
* Bagasse
based paper
* Genetic
engineering (Tissue culture/ cloning for Hybreed seeds)
* cut
flowers/Potted plants (for exports)
A.I.
2 Sub-sector:
Animal-based
Products/Services
Recommended
* Dry
land fisheries
* Milk
based products
A.I.
3 Sub-sector:
Consultancy
Products/Services
Recommended:
* Food
testing laboratories
A.2 Economy sector: clothing
A.2.l
Sub-sector: Natural/synthetic Yarns
Products/Services
Recommended .
* Textiles/Fabrics
* Apparels/Garments
* Soft
furnishing
* Components
* Shoes
(Leather shoes, Sports shoes)
A.3 Economy
Sector: Shelter
A.3.l
Sub-sector: Building Construction
Products/Services
Recommended
* Mass
housing/Residential complexes
* Commercial
complexes
* Shopping
plazas
* Industrial
estates
A.3.2
Sub-sector:
Building Materials
Products/Services
Recommended
* Cement
(we are already in)
* Value
added cement products
* Glass
(Float)
* Ceramic
tiles
* Pre-fabricated
components
* Gypsum/Cement/MDF
boards
* Lighting
systems (Lamps)
* Natural
stones
* Metal
sections (Doors/windows)
A.3.3
Sub-sector:
cities/Towns/Land Services
Products/services. Recommended
* Town
planning consultancy
* Real
estate/Land development projects
* Architectural
services
* structural
engineering services
A.4 Economy
Sector: Sex
A.4.l
Sub-sector: Population
Products/services
Recommended:
* Family
planning devices
A.5 Economy
Sector: Climate
A.5.l
Sub-sector:
Heating/cooling/Humidification/ De-humidification
Products/services
Recommended:
* Air-conditioning
devices
* Refrigeration
devices
B. want
category:
NECESSITIES
B.l
Economy Sector: Health
B.l.l
Sub-sector: Health Care Products
Products/services
Recommended:
* Pharmaceuticals
-
Preventive (Vitamin~/tonics)
-
Curative (drugs)
B.l.2
Sub-sector: Health Care Services
Products/services
Recommended:
* Diagnostic
clinics (not hospitals)
* Ambulance
services ('Corporate-Image' angle)
B.2
Economy sector: Education
B.2.l
Sub-sector: Educational institutions
Observations/Recommendations:
* Products/Services
are not recommended because of Govt controls and low returns
B.2.2
Sub-sector:
Research Labs (Industrial/ scientific/Management)
Products/Services
Recommended
* Research
Labs in Biotechnology/ Genetic engineering
Observations/Recommendations:
* Sector
recommended due to the "Image creation Effect" (Example: TIFR/TISS,
etc.)
B.3 Economy Sector: Transportation
B.3.1
Sub-sector: Air
Transport/Rail Transport
Obeservations/Recommendations:
* No
scope either in products or services due to pUblic-sector
presence.However,sports-fun products such as "PARA-PLANE"could be
marketed world-wide.
B.3.2
Sub-sector:
Road Transport
Products/Services
Recommended:
* Highway/Road
construction
* Road
construction eqpt.
* Road
Transport Corpn. for materials (Similar to USA's Federal Express and United
Parcel Services)
* Auto/Industrial
Batteries
B.3.3
Sub-sector:
Sea/River Transport
Observations/Recommendations:
* No
immediate prospects.
B.4 Economy sector: communication
B.4.1
Sub-sector:
Telecommunication
observations/Recommendations
This
sector can be broadly divided into two: services and products.
Both
of these are very closely controlled by the state/Central Govt through public
sector units. For the next 25 years, this is going to be one of the fastest
growing sector of economy. The public sector is unlikely to cope-up with the
demands and gradually more and more areas of goods & services are expected to be thrown
open to the pri vate/joint sector.
The entire sector, therefore meri ts a very close,' indepth examination and development of detailed "Entry-strategies" in a big way including backdoor
entry through tying-up with state Govt projects.
The following developments will
revolutionise the tele-communications:
* Very
powerful supercomputers
* Artificial
intelligence/Expert systems
* Miniaturisation
* Optical
computing
* Large
scale use of optical fibre cables
Within
the next 10 years, there will be Generation/storage/Retrieval/Manipulation/
Transmission of
-
Voice
-
Data
-
Text
-
Image
thru
a single instrument.
Having
covered the "Senses" of EYES!. EARS within the next 25 years, the 3rd
generation revolution will comprise the long distance transmissions of the
feelings generated by the senses of:
-
TASTE
-
SMELL
-
TOUCH
Japan,
USA and Europe will lead the development of these new technologies which will
give birth to a whole gamut of "Sunrise" industries in these countries.
Obviously
these industries will have for its basic building blocks, very powerful
micro-processors operating at fantastic speeds. These micro-processors will
have a product-life of not more than 2/3 years and will require heavy
investments in manufacturing facilities. For this reason, manufacture of these
building-blocks would be beyond the abilities of countries like India.
On
the other hand, the "applications" of these technologies will travel
to India, much faster than hitherto. This will open-up enormous opportunities
to those Indian companies which have built-up a strong
"application-base" in communication electronics by the turn of the
century.
Very
clearly therefore, L&T's
strategy should
be to build-up
such a base through a series of complimentary
(non-conflicting) steps comprising of:
1
Joint-venture with world-leaders.
2
Technical collaborations with world-leaders.
3 Joint
ventures with state Industrial Development Corporations.
4 Joint
ventures with existing PSUs such as ECIL, BEL,ITI/GCEL,etc.
5 A
central "Technology-Absorption/Transfer-cum R&D Laboratory" with
a free flow of technicians/ engineers/scientists
to the geographically dispersed manufacturing units. This will include a
"communication consultancy service organization"
6 Owning
and operating a publishing network of newspapers/magazines/professional
journals.
7 owning
and operating a computerized Data Network for :
- Financial World
(Equity/Bonds/Debentures,etc.)
- Products/Services (Yellow-page
type)
- Industrial Production Statistics
(for market surveys, etc.)
- Business Intelligence/Corporate
Performance
- Industrial Licensing Data
c.
- want Category : DESIRABLE
- C.1 Economy Sector : Environment
- Products/Services Recommended:
- * Pollution
monitoring/control/prevention equipments. ( These will cover air/water/ sound
pollution) .
- * Geotextiles/Geofabrics
- * De-desertification
plants/chemicals
- * Water de-salination plants and
soil salinity removing chemicals
- * Underground water locating devices
- * Rain making (cloud-seeding)
devices
- * Garbage processing eqpt.
- * Sewage water recycling eqpt.
C.2 Economy Sector - Entertainment
- Products/Services Recommended:
- * High Definition Flat Tube TV
- Observations/Recommendations:
- The technology for this is
unlikely to be passed-on to India for the next 10 years atleast. The Japanese & the Europeans are working on two differing
STANDARDS. Which standard, India will adopt is quite likely going to be a
political decision, since the potential Indian Market could be worth billions
of rupees.
- The new system will make existing
TV system totally obsolete and force existing TV manufacturers to close-down
their existing manufacturing facilities or carry out costly renovations.
- Our ability to
- obtain a favorable political
decision in time;
- tie-ing up wi th a world-class
HDTV manufacturer of technology in time (name of the game is to be THE FIRST),
- could give us a virtual monopoly
of the Indian entertainment market.
- D. want Category : LUXURY
- D.l Economy sector: Comfort
- Products/Services Recommended:
- * Domestic Appliances (White Goods)
- Air conditioners Refrigerators
- Washing Machines
- Vacuum Cleaners
- * Cosmetics
- * Wines/Beer
- D.2 Economy sector: Ego/Status Needs
- D.2.1 Sub-sector: Tourism/Travel
- Products/Services Recommended
- * 3-star hotel chain
- (Synergy with our
"Construction Group")
- * Fast Food franchise chain
- (Synergy with "Processed Food
Groupll)
- * Tourism/Travel Agency/Luxury
coaches
- * Trade Fair/Conference Centres
- D.3 Economy Sector: Intellectual/ spiritual needs
- Products/Services Recommended
- These are ultimate luxuries in the
Indian context with a negligible "market".
- Of course , these are not
water-tight compartments. Very often, a particular sector of economy
caters to more than one Human-Wants.
- For example:
- "Agriculture" will
provide "essential" foods for survival, as also sophisticated cocoa
products (chocolates) which may fall under "Luxuries" in the Indian
context.
- Similarly, "Housing-sector"
could mean an "Improved slum-type Shelter" to millions who sleep on
footpaths to fully air-conditioned luxury apartments for the ultra-rich.
- A lot of compromise was inevitable
in trying to prepare a "simple" list.
- E. Economy Sector: INDUSTRY
- There are, however, several
products/services which satisfy a number of human-wants indirectly by the
reason of being essential "inputs" to that sector of economy which we
call:
- Engineering sector/Industrial
sector/Energy Sector
- Some of these which may be worth
examining indepth are:
- E.l Ferrous/Non-ferrous Metals,
especially
- * Sponge Iron
- * Steel
- * Flat Products of Steel
(sheets/strips/ flats)
- * sections of Steel
(Tubes/Irregulars)
- E.2 Non-metallic Materials,
especially
- * Plastics/Polymers
- * Composites
- * Plasticisers/Elastomers
- * Synthetic Rubbers
- * Speciality Chemicals
- * Basic Chemicals
- * Dyes/Dye-intermediates
- E.3 Energy
Raw-materials/Applications, especially
- * Petrochemicals
- * Refining
- * Gas-based Industries/Piped
Domestic Gas
- * Gas-based Power Plants
- * wind/Solar Energy Products
E.4 Information Industry,
especially
- * Special Process-control Computers
- * Energy Software
- * Office automation products
- E.5 Service Industries,
especially
- * Advertising
- * Leasing
- * Engineering/Management Consultancy
- * Financial Consultancy
No comments:
Post a Comment