Cautious recovery of stock market and second innings of government has changed the Indian economic discussions from 'recession' to 'growth'. Just few months back when various companies were innovative in changing practices to fight recession by reducing cost are now thinking optimistic for expansion and growth. I feel the greatest gain of last crisis to Indian industries are cost consciousness with eye on opportunity for growth.
In this blog i want to discuss the strategies adopted by various companies on their organizational restructuring by either splitting up for growth or consolidation for cost rationalization. Which strategy is better? Should it be a role of a recession manager or a regular activity in regular time.
Here are the examples of various companies who used either consolidation or expansion for efficiency or growth or vice-versa in last few months:
1. Bharati Airtel recasts business into nine arms to increase focus on non voice business like mobile commerce, entertainment, media, internet, enterprise services and small & medium businesses.
2. Dabur decides to split sales force, stockists to prop up market share
3. Tata Tea Brews plan for consolidation by merging tea, water and soft drink business into single entity to simplify operations and rationalize cost.
4. In the similar consolidation line Godrej announces merger of its three businesses; Godrej Consumer Products (GCPL) and two of its joint ventures — Godrej Sara Lee (GSL) and Godrej Hershey’s (GHL).
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