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INDIAS 100 MOST ADMIRED COMPANIES
Indian? No more
E2E strategy paved the way for this Indian company to become ‘Truly Multinational’, says Vareen Ray
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 “Videocon zyada nahin bikta hai… (Videocon doesn’t sell much…),” came the reply from a stoic salesperson working in a multi-brand outlet in New Delhi’s Yusuf Sarai market. It shocked us, as we were featuring Videocon as the Most Admired Durable Company of 2007. But we ventured into another store, and here we were proved slightly correct. The salesperson in the next store said, “Buy Videocon because its after-sales service is better than that of foreign brands. After all, it’s an Indian company.”
Well that certainly drowned all our apprehensions. Here was a company that withstood the onslaught of initially the Japanese and then the Korean brands. And this was during the era when epitaphs of a number of Indian brands like Telco, Beltek, and BPL were written. But then, isn’t Videocon floundering a bit with its lacklustre attempt to buy Daewoo electronics, not-so-successful re-launch of Kelvinator and acquiring the not-so-popular Next retail chain?
Despite these setbacks, this ‘Truly Multinational’ Indian company is laughing all the way to its banks, while reporting net profits of Rs.2.45 billion in the quarter ended June 2007. In addition, it has applied for telecom licenses in all the 22 circles, has imminent plans to roll out DTH services, and might takeover Mirc Electronics (of Onida fame). It looks like Videocon is beaming bright and clear.
While speaking to 4Ps B&M, Pradeepkumar N. Dhoot, President, Videocon Industries, says. “Ours is a company, which specialises from E2E – energy to electronics. On the
energy side, we have power plants, and we are doing research. On the electronics side, we make all kind of electronics. We have very strong backward integration – that’s our strength. We have a very strong market base. We want to be among the top 3 company worldwide in the next four years.”
Another factor that works in Videocon’s favour is that it manufactures a host of brands like Sansui, Akai, York, Kenstar, Hyundia, Toshiba, Electrolux and Kelvinator. Only Videocon and Sansui are its original brands, and the rest have been acquired though a string of acquisitions and takeovers. The company’s multi-brand strategy has worked in its favour as it is able to capture the entire value-chain from value-for-money to high-end consumers.
States R. C. Chopra, Electronic analyst, CII, “It is a
good diversified company deploying state-of-art technology in their offerings and competes effectively with MNCs. Probably, the first
company to use multi-brand strategy for marketing of their product.” There’s little doubt in many analysts’ minds that Videocon sub-brands are well placed to take on competition.
Electrolux is targeted at, what the company calls, the ‘mass-premium’ category and strategically placed to take on Whirlpool.Hyundai is tactically used in specific markets to attack the Korean chaebols, LG and Samsung.
While Sansui’s Japanese lineage works in the favour of the brand, Akai’s low-priced platform is used to target the ‘value-for-money’ consumers.
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 Affirms Sunil Tandon, Director, Videocon Industries, “Looking back a year and a half ago, with the takeover of Thompson, we took the platform of the Indian multinational. We wanted to communicate to the Indian consumers that we have the correct R&D centres and we are bringing them the latest technology. At Videocon, we are giving ‘rightly priced’ products and the ones who are buying them feel that he/she has got the maximum value. That’s where the Videocon brand is positioned. Latest technology in the world is easily accessible to all, it’s no one’s forte to hold on to it and have a lead over others. An element of trust is associated with brands. Videocon gives its customers the right balance of latest technology and trust.”
Videocon’s foray into retail with Next stores has not met with success. That has not deterred the company and it is not only selling brands owned by it, but a host of others like Samsung. LG, Electrolux, Onida, Philips, Whirlpool, and Tata Sky under one roof. This apparently helps them to figure out the consumers’ psyche and then position their own brands in a better way. All in all the entire exercise has in fact worked in its favour.
Even in their brand communication, Videocon believes in showcasing the best. From POPs to discounts, from after-sales services to freebies, the company has left no stone unturned to lure consumers. Bollywood Badshah Shah Rukh Khan has been its brand ambassador for quite some time now. Recently, the company roped in the blue-eyed boy of Indian cricket, Mahendra Singh Dhoni to endorse Videocon. The duo recently featured together in a TV commercial, which created a sensation in the ad world.
Says Sumanto Chattopadhya, Executive Creative Director, O&M South Asia, “The idea is of ‘bringing home the leaders,’ which is quite synonymous with
Videocon. The common factor between Shahrukh Khan, Mahendra Singh Dhoni and Videocon is their ambition and ability, which we have shown in our corporate film.”
What makes a company admirable – social responsibility, excellent talent, sharp marketing, smart managers or just cheesy profits? Well its all of the above and there is no doubt that Videocon epitomises all of these. V. N. Dhoot, Chairman and Managing Director, Videocon Indutries, “The core strength of Videocon is its strong management team. With this team in place, we are now looking to get into more sectors with high potential growth.”
More importantly, Videocon is now behaving like any other globalised MNC. It has no headquarters, it has no nucleus, it has no geographical limits. It changes the way manufacturing changes across the globe. To prove this, Pradeepkumar Dhoot cites this example. Videocon launched the Nordemende brand, which came with Thomson’s acquisition, in New York. Originally, it was a German brand, owned by a French company. Today, it is owned by an Indian, made in Italy, and marketed in Europe and the US. Welcome to the new world of Indian MNCs.
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with inputs from Neha Saraiya
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