Strategy Digest Vol 5 (Oct)

Conglomerates now look for brand-holding firms

Several business conglomerates in the country are looking for ways to take care of their generations-old brand names and manage their different brands for different industries. Juggling a wide portfolio of brands and retaining the core identity of the parent calls for more than sound brand management capabilities and a simple brand identity manual. This means a strategic shift in thinking about the brand as a core intangible asset that has to be safeguarded and monetised through a robust mechanism like a brand holding firm. These firms would earn royalty from each of the operating companies using the brand as a shared resource. It is like a licensing agreement within a company. The contract in this case spells out how and where the corporate brand can be used in existing and new business areas. It could also be useful option for family-owned companies where frequent spats can lead to dilution of the corporate brand as members deploy it indiscriminately into new businesses and markets.

As new India strategy, ArcelorMittal to build smaller plants

As part of a new strategy for India, ArcelorMittal plans to begin with, smaller steel plants in states of Jharkhand, Orissa and Karnataka, that could be expanded later, instead of mega units as proposed earlier. This would help them have larger number of footprints and allow for faster execution of plans. Going ahead with the new strategy, the company may also look at acquiring small units in India and was reportedly in talks with at least a dozen firms for the purpose.

Dr Reddy’s to enhance OTC presence by marketing drugs for Cipla, Vitabiotics

Dr Reddy’s Laboratories (DRL) has entered into an agreement with drug major Cipla and UK-based Vitabiotics to market over-the-counter (OTC) and prescription drugs, besides nutraceutical products, in Russia and CIS countries, adding immediately to its revenues from the Russian and CIS market. There are long-term synergies, as Dr Reddy’s has a strong sales and marketing network and our partners have a basket of products already registered and distributed in these markets. The agreement with Cipla will enhance Dr Reddy’s presence in the OTC space and in therapy areas of gastroenterology, dermatology and oncology in both Russia and Ukraine.

Corporates look to cash in on growing football craze, Venky’s close to a club buy

Venkateshwara Hatcheries, better known as Venky’s, is close to becoming the first Indian company to own an English Premier League (EPL) football club, the 135-year-old Blackburn Rovers. Both foreign football clubs and Indian firms have sought to promote football in India, given the sport’s rising popularity and growing business opportunities. Chelsea FC has been in talks with several companies to promote the game in the hope that India can seek to host the World Cup by 2030. Venky’s move comes after several attempts by domestic companies to own EPL teams. Sahara India Group earlier this year placed a bid, of which they later pulled out, to buy a 51 per cent stake in cash-strapped Liverpool. Ambani brothers Mukesh and Anil have also been keen on owning Liverpool and Newcastle United, respectively, but denied making any bids.


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