Consultaire 6.0

FOREWORD

Dear all,

IIM Amritsar is at a crucial stage of its exceptional growth trajectory and Stratagem, the Strategy and Consulting Club of IIM Amritsar, has consistently endeavored to contribute to the same. The club’s efforts to stir up interest in the field of Strategic Management through engaging activities and projects have been instrumental in the holistic development of students.

I, along with the club coordinators, am delighted to present to you the 6th edition of Consultaire - the bi-annual magazine of the club This edition’s theme “Competitive growth Strategies: Bridge to maturity” explores the crucial strategies that most new business lack and are thus unable to sustain in this world of slit-throat competition The issue presents articles from students of prestigious bschools, erudite faculty members, and industry professionals.

I would like to congratulate the students whose work got selected for publishing, the faculties for their constant support, and finally the coordinators who worked tirelessly to turn this into a reality

I hope the edition will excite young minds and provide a fresh perspective on the domain.

Prof. Nagarajan Ramamoorthy Director, IIM Amritsar

FOREWORD

Dear all,

With immense pleasure, I announce that Stratagem is ready with the 6th edition of its bi-annual magazine, Consultaire. This edition of the magazine is anticipated to be extremely valuable to its readers because it continues the tradition of presenting novel thoughts and viewpoints on strategy and consulting issues. With the theme "Competitive Growth Strategies: Bridge to Maturity", the edition will hopefully provide young entrepreneurs as well as management students some food for thought on how to take startups to the next level and turn them into the corporate giants of tomorrow

I would like to congratulate the junior coordinators for ideating, compiling, and designing the issue, as well as the senior coordinators for their guidance and support. It has been my pleasure to be a mentor to this team, and I believe they will continue with their efforts with the same zeal and enthusiasm in the future as well

I once again congratulate Stratagem for their efforts.

Prof. Santosh Kumar Tiwari Assistant Professor, IIM Amritsar Faculty Anchor, Stratagem

Causes of the downturn in the startup ecosystem: A few propositions

Ravishankar V. Kommu Assistant Professor, IIM Amritsar

Startups in India are laying off staff in big numbers

The pink press is abuzz with hypotheses that may have brought this situation about The popular blame is on the ‘funding winter’ thanks to the economic volatility around the world due to the pandemic Not enough emphasis is being placed on the fact that in a moment of crisis, investors want to withdraw immediately from the ecosystem, signaling their lack of faith and the low priority they assign to investments in technology and innovation

Disappointing results by some of the tech giants such as Meta who chose to invest in innovation has also contributed to the change in market sentiment

Nevertheless, this gloomy period is the right time for us shed some light on some of the structural issues in the startup space in India

there is debate on what a startup exactly is, and any attempt to properly define it could leave out crucial aspects, and therefore it is important that we depend on a popular understanding of what we understand by the term ‘startup’ (Cockayne, 2019) The term denotes the age of the firm, but more importantly it also suggests commitment to technology and innovation

However, as far as technology and innovation are concerned, the proliferation of large incubators that essentially rent out space (and amenities) to entrepreneurs who are developing marginal solutions to problems leads one to suspect that large firms are offloading the risk of innovation onto young entrepreneurs who are investing precious years of their lives to solve problems that many large organizations should have been funding in house

What this means is that a large percentage of these startups are bound to fail by design, and only those that demonstrate a modicum of success are absorbed by large players

...large firms are offloading the risk of innovation onto young entrepreneurs who are investing precious years of their lives to solve problems that many large organizations should have been funding in house.

Only a very tiny fraction of such startups is ever even supposed to make it truly big, as they are expected to have found an untapped niche Like the scenario depicted in the Harris-Todaro model of urban unemployment (Harris and Todaro, 1970) where only a few migrants from rural to urban areas get absorbed in the industry and the rest remain unemployed and are forced to live in slums, many startups that should have never existed linger around for a long time before eventually meeting their end

Several startups are victims of investor hedging. Investors who want to avoid missing out on emerging technologies invest in a large cohort of competing firms, thereby rewarding the space rather than any specific innovation the startup may have arrived at

For instance, several EdTech firms landed vast sums of money simply because investors were competing against each other and didn’t want to lose out on a potential high growth industry This is due to venture capitalists trying to fish for big game startups using wider and different kinds of nets In a typical market for lemons scenario, founders focus a lot more on making the right sounds rather than on building legitimate organizations, resulting in their firms staying in the fray for much longer than they should

A consequence of ‘technology and innovation’ being the core brand of startups in general is that the ecosystem attracts engineers and innovators who are trying to solve technological problems or come up with smarter solutions This demographic typically lacks an understanding or appreciation for fundamental principles of business management and often only learn them on the job if they happen to stay in the game for long enough Many often lack the customer centricity or understand basic issues in talent management to the extent of even having contempt for marketing or HR divisions For instance, several startups are unable to put together the right teams or can make their teams do productive work (de Mol, 2019) Another consequence of this tendency to anchor themselves in technology is their inability to follow basic unit economics

Many startups are guilty of resorting to solutionism in the name of innovation

For instance, there is no need or demand for groceries to be delivered in under ten minutes and yet, there are several players trying to achieve the same A tragic externality of this phenomenon is large pools of engineering talent who could have been productively deployed elsewhere are choosing to work on things like quick delivery or ‘EdTech’ (where there really is not much tech) Along with signaling an innovation focus, startups are also over hiring talent to signal possibility of high growth or delivery of more complex products

To conclude, I would argue that a lot of what the startup ecosystem is suffering from is a result of

Poor due diligence by VCs has been the bane of the startup ecosystem for a long time now, and a lot has already been said on the matter

hubris in believing that they are doing something a lot bigger than they are attempting to posture to investors rather than build a meaningful product and from and, a tendency to focus on ‘problem solving’ rather than building viable businesses

Growth Strategies in Today’s World

Shaurya Kumar Jha Indian Institute of Management Tiruchirappalli

To wrest market share from your rivals, you don't have to be a billion-dollar worldwide brand. A strategy for unstoppable business growth is what you require. Obviously, risk is a part of progress. As a result, highly successful firms rarely rely on just one strategy. Instead, they employ a variety of growth methods, such as market expansion, disruption, product and channel expansion, strategic alliances, acquisitions, and organic growth, in combination to succeed

Maintaining a laser-like focus on your core abilities is the key to growth One excellent illustration of this is Walmart They have seen exponential development since they provide their consumers the lowest costs Second, every effective business growth plan requires in-depth audience research You must be aware of the wants and desires of your clients in order to meet those demands more effectively than your rivals As a consequence, you'll increase word-of-mouth (WOM) recommendations and client loyalty

Most essential, nimbleness is needed for growth marketing You'll undoubtedly need to make minor adjustments, including altering your marketing strategies to reflect popular culture or consumer behaviour But in order to reach your growth goals, you might also need to make significant adjustments For instance, Shopify first focused on selling snowboarding gear but later discovered they were superior at developing ecommerce software A readiness to adapt in both modest and important ways may greatly speed up corporate growth

The main 7 categories of corporate growth methods that have historically been used. Here are seven particular sorts of company growth techniques.

1. Market development (or market penetration)

As a business expansion strategy, market development is making an effort to sell your current products into unexplored areas Finding new markets that complement your present product line includes doing this

A typical growth method is market development since it enables you to go beyond your current clientele You'll increase your market share as a consequence Targeting a new industry, new demography, new corporate department (such as switching from HR to finance), or new geographic area may be included in this form of segmentation

2. Market disruption

Market disruption is the act of entering a firmly established market that is often dominated by a small number of legacy brands and then carrying out actions that are radically different from what everyone else is doing You can possibly disrupt a market in a number of ways, such as: Utilizing advances, like when Salesforce launched a fully cloud-based CRM, or switching to a whole other business model, as many DTC businesses have done, or offering items that are much cheaper or of higher quality delivering something really novel, like Slack supplanting email as we know it

3. Product diversification or expansion

Creating new goods or enhancing old ones with additional features may be very successful business growth strategies. Product development exposes your brand to new markets that previously had no interest in it. Semrush is an illustration of a business that got its start with a basic SEO and sponsored search platform.

Over the years, the firm added more functions, and it is now a complete software package. The target audience didn't change, but additional features made that audience more appealing to a wider range of people. For Semrush, a company with a current market valuation of more than $2.7 billion, this corporate expansion approach was successful.

The alliance between Lyft and Taco Bell is an illustration of a strategic cooperation that was successful. Customers of Lyft may use the company's Taco Bell delivery service by simply tapping the Lyft app to arrange a mid-trip stop at a nearby Taco Bell ("Taco Mode"). Both businesses benefited from the partnership's free exposure, which increased Taco Bell's sales.

4. New channels

Because they increase income without causing any modifications to the product, new distribution channels are among the top 10 business strategies for growth Businesses that sell online, like Allbirds, have seen a boost in income by expanding their brick-and-mortar presence Allbirds used to just have online storefronts, but they now have 29 physical locations

Occasionally, the discovery of a new distribution channel by one business can unleash a wave of change over the whole sector Consider Salesforce

In a market dominated by massive, costly, sophisticated corporate software requiring an army of professional service people to get it to operate, they presented the concept of cloud-based, subscription software Salesforce continued to expand quickly, and it is now a company worth over $21 billion The software sector underwent a transformation, and other SaaS solutions now make up the entirety of the market

5. Strategic alliances

Strategic alliances with other brands can lead to growth that would not otherwise be achievable For instance, if you collaborate with a business whose goods or services compliment yours, you gain access to their clientele and vice versa

Additionally, you gain from the goodwill cultivated around the brand of your strategic partner and receive referrals from them

6 Acquisitions

Making acquisitions may be the most obvious strategy for growth Acquisitions are often only a practical growth option if you have a sizable cash flow and accessible loan capacity Acquisitions provide a number of different benefits By purchasing direct competitors, they enable you to lessen competition They provide you access to exclusive technologies that would need a lot of time and money to create on your own Additionally, they provide you access to the clientele of the purchased business

7. Organic growth

Of all the business expansion techniques, organic growth is unquestionably the best It implies that you can promote growth without depending on mergers and acquisitions Regarding your marketing approach, it indicates that you are expanding without the need for promotion, as opposed to the conventional wisdom that states that once you stop investing, you cease to expand

To succeed, combine company growth strategies:

Disruption

The fintech business, established in Stockholm, Sweden, in 2005, lets customers to make product purchases without paying in full at the register Instead of paying the whole cost up front, customers have the option to break it up into four interest-free instalments, pay the full amount within 30 days, or postpone payment for up to three years The average order value increased by 45% as a result of customers choosing flexible payment terms

IIM AMRITSAR STRATAGEM

Expansion

The regional growth of Klarna has also been a priority as it enters new markets in Europe and then the United States Presently, 90 million customers may choose from flexible payment solutions at more than 250,000 retailers throughout 17 nations thanks to Klarna Every day, the technology provided by Klarna processes more than 2 million transactions worldwide

There are several excellent business growth tactics Companies like Klarna are able to achieve rapid, significant development by using a variety of techniques

Most businesses, like Klarna, aim to expand Knowing which tactics would work best for your business and how to carry them out well are the challenges, of course.

Successful corporate growth strategies include the following elements:

Performing market research

Set growth objective

Choose a growth strategy

Make your execution strategy

Observe and gauge success

Adapt corporate growth methods to what is effective

Healthy Financials : Back to basics

Winter is coming, at least for Indian start-ups; it will be if they continue to ignore the big elephant in the room Recently, headlines of funding winter; courtesy of 2022 Q3 Indian start-up funding shrinking to 2020 levels; caught my attention Now, one may be prompted to argue the credibility of such reports, but numbers do not lie, no matter how much you want them to And if you want to look at reasons to put on blame, you have to go no further than just the basics; healthy financials keep everyone happy Allow me to present the step-bystep explanation

Today, we have firms delivering grocery under 10 minutes, providing health services on a smartphone, and bringing classroom learning to the comfort of your room at your command, but the basics remain the same If you want to survive as a company, sooner or later, you must take care of your finances

So, what exactly do these healthy finances mean? Simple Start earning profits and continue the flow Let me explain this oversimplistic version

When an entrepreneur talks about solving a problem faced by society (or a part of society) through their products and services, it is an inherent assumption that the price paid by society (if not now, then maybe near future) would generate attractive returns after covering the incurred costs As obvious as it may sound, violation of aforementioned principle lands most ships in troubled waters

Look at the jewels of the Indian start-up saga, and you will find that companies like Zomato, Paytm, Swiggy, and Unacademy are raking in massive losses despite increasing revenues Now, these giants may not be shutting down, but the gravity of the issue was clearly reflected when a few of them went public (launched IPO) and were undervalued by investors, with experts even questioning their longterm viability

Look at the companies which have truly revolutionized the way we live, defined the term “innovation” (I know the usual suspects coming to your mind), and you will find that at some point, these pioneers understood that healthy finance is a compulsion to sustain breakthrough innovations Those who did not are remembered as epic failures

No matter how much name and praise they had earned for their contribution, not following the basics of the game posed a threat of elimination to them Now, look at the bigger picture where 9 out of 10 start-ups end up closing Were their ideas less innovative than their successful counterparts? Certainly not Was finance the choking point? Certainly yes

...these pioneers understood that healthy finance is a compulsion to sustain breakthrough innovations.

Yuvraj Baheti Indian Institute of Management Amritsar

Start-ups driven by a desire to bring disruptive innovation often forget that cash is the fuel helping them drive their idea. Not ensuring a robust channel for returns would be nothing less than catastrophic.

Now, the natural question of any rational thinker would be, when is the right time for finance to take the front seat? Should it be a primary concern right from the inception, or is there a threshold time that newcomers should be aware of? Ideally, it should be from the beginning. However, it is not possible given that in the initial years, generating awareness and penetrating the market is the prime objective of any great idea.

Then how about after five years? Not sure whether most of the company will survive that much time. It may seem tempting to say that newcomers have the cushion to burn cash as long as investors pour in money and valuation rises. Not only logic, but this statement also lacks vision.

The only counsel we can give is that healthy finances can’t be created without a plan in place, and this plan would be particularly depending on the industry and conditions in which you operate. So, burning cash in the short term may be a necessity, but earning cash in the long term is an art, and not everyone has what it takes to be an artist. A remarkable example to draw inspiration from is Lenskart, an eyewear retailer. In pursuit of customer satisfaction and market share, it did not lose sight of profitability, ensuring its transition from a nascent concept to a mature brand

The Last Man Standing: To Maturity & Beyond

Overview:

From the beginning of time, humankind has thrived with creativity and innovation With entry to barriers reducing every day in the world of business, setting up one is now more popular than ever Introducing a business to the world piggy backs on the newness for its popularity and exponential YoY growth

But once the beginner’s luck runs out, where do you stand?

And, if the creative side in India is overflowing, what are the reasons that 90% of Indian startups2 fail within the first five years of incorporation The answer lies in strategic decisions devised by the company for competitive growth in the industry

This article displays the understanding of the dynamic nature of internal and external factors by discussing a case written with primary research on a company that is travelling through the PLC (Product Life Cycle as seen in Graph) successfully & how

Analysis

The main speculation is that these companies fail to have a strong strategic foundation to move from the ‘growth’ to the ‘maturity’ stage We can see here that the maturity phase is usually the point where revenues start increasing at a decreasing rate Therefore, without a strategy in place, navigating to and through this phase can seem to be a daunting task for any business.

ED24 institute: An Originally Written Case Study on an Indian Startup

Industry: Education Concepts Discussed: Two routes to resilience, Competitive strategies for growth

About the company

ED24 is Bopal’s leading educational institute, established in 2006 It started as a computer course class and evolved into ‘Spoken English’ and an IELTS coaching center

It has been profitable for 16 years, since the first year of operations The founder & CEO, Darshana Bhagat has experienced many potential stalls and competition from free substitutes emerging in the market over the years but has adapted to them in unique and creative ways

The reasons for growth can be understood by the two routes to resilience in the following:

Transformation A: [Strengthening the core ‘Computer’ education business]

1.

With maturity in the geographical area in terms of skills, the demand for basic courses was less; hence new & advanced courses like programming languages (C, C++, Python) were introduced, and HR planning was done accordingly

Dhruvi Bhagat Indian Institute of Management Tiruchirappalli

2. With time, refreshing this was necessary. In 2010 it became an authorized center for Tally Education ERP software. About ~90% of SMEs used accounting software at the time, but skills in the market were less, so demand was increasing, and people were looking to upskill.

3. Databases of mobile numbers were maintained systematically from day one and used for creatively remarketing via SMS and WhatsApp. An aggressive tele calling initiative was started in 2016

4. Whatsapp chatbot integration made dispensation information and tracking queries much easier for the company

Transformation B: [Building the future with Spoken English & IELTS coaching]

1.Started with computer courses, then added ‘Spoken English’ classes in 2007 when people were searching for credible classes, and new demand was created.

2. IELTS was gaining heavy traction and the trend of foreign education was growing. ED24 became nodal partners of the ‘British council’ and ‘IDP educations’ (global exam conducting images). It improved brand image by association.

3. In order to compete against the ‘Free’ courses available online, the company tackled it by giving discounts for a one-time payment and introduced soft-skill training on the weekend which was provided free for students enrolled They tackled them by ‘bundling’ the course offered with this new offering which also gave them a competitive advantage

Conclusion

‘Success is not final; failure is not fatal’ but a business is as good as spineless without a strategic plan in place

5. SMS-based promotion was the go-to channel for advertising, with smartphone penetration increasing since 2006

6. With a decline in conventional means of advertising, namely local paper & SMS. With the open rate declining to less than 10% among gen Z, who were now new targets, they shifted their promotional strategy to paid social media ads, primarily Facebook campaigns and Instagram ads.

7 Organic social media growth was another aim achieved by posting in Facebook groups & improving google reviews with current customers, making them the highest-reviewed institute in the area with 400+ reviews and a 4 9/5-star rating

8 Eventually, WhatsApp-based promotion schemes were started

Adaptation is a key skill that can ensure a business stays afloat in the rockiest waters To have this, a combination of the right product & people is of key importance It is evidently observed in the case of ‘ED24’ Through the years 2006-present, ED24 took many business decisions to ensure that they ride every stall wave and overcome the same The choices taken by the company and their impacts on the business model have been shown in the image

The value proposition was also dynamic with this growth and has become a ‘One-stop hub for skill development With Quality maintained, a strengthened core business, and dynamic advertising, the market standing of ED24 continued to grow over the years

Competitive strategies for business growth can help guide an organization from growth to maturity and beyond!

Product lifecycle extension strategies to maximise revenue

Vikash Kumar Director, Acuity Knowledge Partners

Amid the current competition, pressure on revenue and margins, and constantly evolving technologies, it has become important to explore all avenues that could help an organisation achieve its objectives One area organisations can look to explore is product strategy Both the market and customer needs continue to evolve; it is important for organisations to recognise this and proactively take steps to ensure not only customer retention, but improvement and expansion of products

The typical product lifecycle is discover – build –grow – mature – decline. Customer requirements are at the core of all stages, and the more a product is closely associated with these requirements, the higher its chances are of success.

At Acuity Knowledge Partners, we offer market leading products catering to multiple business areas of a Financial Organization like Commercial Lending, Investment Banking, Investment Research, Compliance etc. One of the fundamental principles behind establishing Acuity as a product company has been our philosophy of experiment driven product development approach with customer at core of it. Our approach of consultative engagement with our customers has helped us in delivering robust products which is close to customer needs.

Customer at the core of the product lifecycle

Discover

The organisation understands the customer need and the gap in the current product offerings, and based on user research, starts working on a prototype of the product The prototype is used in customer discussions to further validate and refine the product idea

When the organisation ensures the product is addressing the customer need, the product is built iteratively and introduced in a phased manner; features are enhanced based on regular customer feedback

Growth: Maturity:

Once the product has been accepted by customers and starts generating regular revenue, the organisation focuses more on brand awareness to increase market share Again, customer feedback is important to maintain this phase

At this stage, the product is well accepted in the market and customers are satisfied with product offerings Competitors start to offer similar products, and competition is at its peak

Decline

Here, either a competitor’s product has replaced the organisation’s product due to better offerings or the customer need has changed. The organisation sees no benefit in investing more in the product, as customers have shifted to alternative products and product revenue has started to decline.

Identify and expand the product’s market

Penetrate a new market by adding features required by that market; this could be as simple as the product supporting the local language. In the case of payment or delivery apps, the strategy could be to enable support of payments in local currency or enable delivery to/from a particular city. A recent example is Zomato adding intercity delivery, with users able to order and get food delivered from different cities. Another way to expand the product’s market is by collaborating with a partner that has a presence in the new market.

Increase awareness

While most products follow this lifecycle, there are many ways in which an organisation could intervene and delay the decline stage and extend the growth and maturity stages This would prevent the product from becoming obsolete while driving extended sales and profit

Product lifecycle expansion strategies

While there are different strategies that could be implemented to extend a particular stage of the product lifecycle, the ideal stage to extend is maturity, where the product is at its peak and the organisation is generating maximum sales and profit from the product with minimum investment This would ensure optimal extension of product life and the maximum benefit is derived from the effort and investment required for doing so It is also important to measure these efforts through KPIs such as NPS, revenue, retention and margins to ensure they lead to desirable returns

·Add new features

Based on customer feedback, add new features to improve product experience and use Seeing the organisation value their feedback, customers would associate more with the product and build loyalty This would help manage the competition, retain market share and increase the chances of expansion It could also lead to product penetration in new market segments A recent example is WhatsApp increasing the group limit from 256 to 512 and then to 1,024, keeping competition and customer need in mind

The customer base could be expanded by more focused and targeted marketing campaigns, increasing brand awareness and market share Organisations also explore rebranding to introduce a freshness A recent example of this is Grocery delivery App Grofers, rebranded to Blinkit where proposition is 10-minute delivery promise in line with the rebrand

Product pricing strategy

Giving discounts to first-time users or using different pricing tactics in the new market could attract new customers Uber and Zomato follow this strategy

To conclude, I will say that by adopting such strategies, organisations could extend the product lifecycle especially the maturity stage Success would depend on an organisation’s willingness to invest more in the product at that stage and there being new markets and customer bases to tap Extension of product lifecycle and seamless execution need to be planned properly if they are to deliver the maximum benefit This would help a product unlock new revenue potential and gain a new life and competitive edge

Club's Activities

Sankshetra

The 6th Annual Operations and Strategy Conclave was held on December 10 This year's theme was "Strategy in the Age of Volatility : Courage to Adapt Swiftly" The event started with a presentation by 2 students of IIM Amritsar Then the keynote speaker addressed the audience and set the topic in motion which was followed by a discussion by the panel and concluded with a QnA session with the students

Guesstimate Series Stratabetting 5.0

A weekly competitive series on Guesstimates where a good approach to solve scores way above the right answer.

A game which tests participants' strategy to define odds in favor and against the teams playing different games & sports

Article Writing

Article Writing

competition organized on Unstop on the topic "Competitive Growth Strategies : Bridge to Maturity"

STRATAGEM

The Strategy and Consulting Club

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