Mr R.Gopalkrishnan talked about globalization and how it is impacting businesses in today's world. According to him, there are three most important things for a sustainable business -
1. Intellectual Property
2. Economic VAlue
3. Context
So, business is a way of constantly creating new context. That is to create a market where your products can be welcomed even in long term. He also gave beautiful examples of how some of the big FMCGs sustained their business over a period by creating a right product and evaluating the right context.
This is the era of consolidation. Various businesses which moved far ahead and created various products with the advance of technology found it difficult to sustain in the market because they lost the context which they thought would exist for ever. But context kept on changing. Acquisitions and mergers are happening now a days to expand business in a global arena. So, the entire global has become the context.
According to Mr Gopalkrishnan, there are two modes of acquistions:
1. Prescriptive - where a company is forced to change its existence and behave according the the owner/major share holder
2. Adaptive - where the acquired company finds its own space and settles down. Coke-Thumbs up example beautifully explains this.
While a balanced approach to both the strategies above is a good solution, various factors like demography, geography, culture and core values play substantial role in choosing which one to adopt for the M & A strategy. Finally, according to him, businesses grows because of people's chemistry.
Cheers,
Manas Nimitt Sahu
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