Growth strategies of Indian firms

Abstract

The project scope focuses on benchmarking the Chris Zook’s ‘Profit from the Core’ framework in the Indian context. ‘Profit from the Core’ outlines the sustainable growth strategies in the global context. It argues that sustainable growth is achieved by defining and focusing on a firm’s core, and expanding through adjacencies around the core. In the Indian context, the criteria for selecting companies that are Sustained Value Creators (SVCs) are defined as: a. Revenue > Rs. 400 cr. b. Revenue growth > 8% c. Profit growth > 8% d. Shareholder value creation over a time period of ten years from 1997 to 2006 On the basis of the above criteria, twenty firms are classified as SVCs. Further analysis of seven firms out of these twenty SVCs (shortlist from diverse sectors of economy) following the methodology of core identification, adjacency expansions and adjacency evaluation offers following key insights: • Sustained value creators have a strong single core • Most firms have expanded around core in adjacencies to reinforce their cores • Innovator firms such as Reliance and Hindalco moved into related cores by leveraging on their capabilities/technologies • Core redefinition as explained in Zook's framework has not been observed in the time span considered Our conclusion states that Chris Zook’s framework is quite robust and is applicable in the Indian context.