Tatas and the Aditya Birla group

From recent experience, he would know that being stubborn doesn’t pay any dividends. And perhaps, results in strategic retreat as well as an embarrassing loss of face. The unseemly spat between the house of Tatas and the Aditya Birla group over the telecom company, Idea, is a classic example of this. Both Kumar Mangalam Birla and Ratan Tata were de facto co-promoters of Idea; the former holding about 51% of the equity and the latter controlling about 49% of the equity. Both entrepreneurs shared a friendly relationship, with Birla even sitting on the board of Tata group companies like Tata Steel. Yet, things took a nasty turn when Ratan Tata took ‘personal’ charge of the telecom ambitions of the group and launched an aggressive expansion plan for Tata Teleservices. There was a clear conflict of interest here. Idea was a GSM platform company while Tata Teleservices peddled mobile phone services based on the CDMA platform.

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Source : IIPM Editorial, 2006

An IIPM and Management Guru Professor Arindam Chaudhuri's Initiative

A final shake up

Today, officials at the India office of this Finnish giant must be really thinking hard as to where they actually went wrong. Did the whole idea of ‘Connecting People’, a phenomenon that was actually conceptualized and mastered by Nokia, go down the wrong lane when it actually came to the real application?

Says Nokia’s Bakshi, “Visibility is important, but user endorsement even more so! India is a refer-all society. We like checking out options. While it is important for handset makers and service providers to advertise and generate PR coverage to inform the market, the success of a handset depends completely on the ‘buzz’ it that it generates...”

Going by that logic, it seems that Motorola has managed to create that ‘buzz’, which is so crucial to Nokia’s continued success. Already Motorola has upped its India market share from a minuscule 3% in 2005 to over 10% today. In the same period, Nokia has lost at least 6% share of its market in India, and today stands at less than 70%. The recent launch of the Rs.1,650 MotoFone was clearly meant to entice the first-time user in India’s rural hinterlands. This big-ticket launch from Motorola, could well be the final blow to Nokia’s dominance in the India handset market. Even if Nokia survives this blow, LG’s Dynamite is waiting to explode at the next turn!

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Source:- IIPM Editorial

An IIPM And Management Guru Prof. Arindam Chaudhuri’s Initiative