Eight years ago, Malnight, Buche, and Dhanaraj launched a study of high growth in companies, looking at three strategies known to drive it: creating new markets, serving broader stakeholder needs, and rewriting the rules of the game. To their surprise, they discovered a fourth driver they hadn't considered at all: purpose. Companies have long been building purpose into what they do, but usually it's seen as an add-on--as a way to, say, give back to the community. The high-growth companies in the study, in contrast, had made purpose central to their strategies, using it to redefine playing fields and reshape value propositions. The purpose of Mars Petcare, for instance--a better world for pets--guided its expansion from pet food into the larger ecosystem of pet health. The purpose of Securitas--contributing to a safer society--led the firm to redesign its offering to include not just physical guards but electronic services and predictive solutions. This article explains how executives can develop and implement a purpose at their organizations. It also describes the benefits they're quite likely to see once they do: a more unified organization, more-motivated stakeholders, broader impact, and more profitable growth.
Case A describes the challenges a multinational corporation, Cisco Systems Inc., faces in an emerging market in developing new products specific to local needs. Dr Ishwardutt Parulkar and his team at Cisco's Indian subsidiary in Bangalore had identified a promising concept that could potentially become the company's first product developed end-to-end at the India site. They had to address three critical issues: How to define the right product to address the specific needs of telecom network customers in the emerging market? How to build the business case for approval from the headquarters in the US? How to compensate for the significant gaps in the Indian ecosystem that was not fully mature in terms of partners and skills required to develop such a product? Case B presents how the Cisco team resolved the new product development challenges. The success of the new Advanced Services Router (ASR) 901 would mark a milestone in Cisco's journey of evolution of engineering capability in emerging countries into the next phase of innovation and thought leadership. Learning objectives: 1) Identify key challenges in developing a mainstream product from concept to completion in an emerging market. 2) Understand essential factors for building subsidiary R&D capabilities for mainstream product development. 3) Introduce the Technology Champion framework, which serves to bring out innovation aspirations in a subsidiary R&D team.
Case A describes the challenges a multinational corporation, Cisco Systems Inc., faces in an emerging market in developing new products specific to local needs. Case B describes the journey undertaken by Dr Ishwardutt Parulkar and his team in developing the Advanced Services Router (ASR) 901 - from idea to launch in 2011. The case helps to identify key success factors for new product development through a decentralized R&D model in emerging markets and to recognize the importance of the ecosystem for successful innovation. Learning objectives: 1) Identify key challenges in developing a mainstream product from concept to completion in an emerging market. 2) Understand essential factors for building subsidiary R&D capabilities for mainstream product development. 3) Introduce the Technology Champion framework, which serves to bring out innovation aspirations in a subsidiary R&D team.
Supplement to case IMD848. This two-part case series is set in India and examines the challenges encountered by a leading Indian pharmaceutical company, Dr. Reddy's Laboratories (DRL), following its strategic decision to create Indura - a business unit dedicated to the rural market. In recent years, the strategic direction set by the new CEO and his "Health for All" vision has shifted the company's attention to its domestic market and the rural areas of the country. The case focuses on the implementation hurdles of such a vision and invites business executives to explore the role of strategy in building ecosystems that are essential for successful strategy implementation. Case A sets the scene by describing the business model of pharmaceutical companies in India and the rationale behind DRL's decision to pursue an alternative growth avenue. It presents the Indura project, which takes the company to rural markets. Given its large size and growth potential, rural India seems to offer a fascinating opportunity to DRL. The case highlights the unique obstacles Indura faced in its effort to access rural customers and concludes by putting the spotlight on the sustainability question: Can DRL translate its "Health for All" vision into a sustainable business model? Case B is a brief follow-on case that presents key actions taken by DRL's management during the period 2013-2015. Alok Sonig, the newly appointed leader of the India business, together with his direct report Rajaram Bagayatkar, changed the name of the unit to Pride and adopted a new plan of action, which focused on motivating the sales force. While this addressed most of the challenges, some issues remained. Case B invites participants to go beyond DRL management's actions and explore possible ways to leverage technology and social media and innovative approaches to address both the access and talent challenges.
Supplement to case IMD805. The case is set at a time when Bandhan, the largest microfinance institution (MFI) in India and the largest non-deposit taking MFI in the world, was about to embark on an organizational transformation that would convert it into a mainstream bank. In July 2013, supported by a Geneva-based investor, Bandhan had applied for a banking license to expand its operations by leveraging its network. And in May 2014 the Reserve Bank of India (RBI) had granted the license to Bandhan, making it the first MFI in the country to win a bank license, and also the youngest entity to be allowed to enter the banking space in India. Established in 2001 by Chandra Shekhar Ghosh to address the dual objective of poverty alleviation and empowerment of women, Bandhan had grown by 2013 to 2,016 branches across 22 states and union territories within India. With over 5 million borrowers and total outstanding loans of INR 57 billion (~US$1 billion), it had zero non-performing loans. Ghosh had ambitious growth plans focused on the rural sector. Bandhan seemed to have built the right capabilities to be successful as an MFI. The case allows for a rich discussion about the new capabilities that Bandhan would require as it shifted from pure MFI to banking entity and how it should go about acquiring those capabilities. Was it preparing well to deal with the challenge of entering, surviving and growing in the banking industry while continuing to serve and grow in the MFI space? Could it develop a unique and innovative model to help it straddle both worlds? With this license, Bandhan had been offered an opportunity to re-create the entire banking edifice in India. Participants have the opportunity to analyse the key issues in the case and attempt to answer the question playing on everyone's mind - how would Bandhan deliver on the goals of financial inclusion?
The case is set at a time when Bandhan, the largest microfinance institution (MFI) in India and the largest non-deposit taking MFI in the world, was about to embark on an organizational transformation that would convert it into a mainstream bank. In July 2013, supported by a Geneva-based investor, Bandhan had applied for a banking license to expand its operations by leveraging its network. And in May 2014 the Reserve Bank of India (RBI) had granted the license to Bandhan, making it the first MFI in the country to win a bank license, and also the youngest entity to be allowed to enter the banking space in India. Established in 2001 by Chandra Shekhar Ghosh to address the dual objective of poverty alleviation and empowerment of women, Bandhan had grown by 2013 to 2,016 branches across 22 states and union territories within India. With over 5 million borrowers and total outstanding loans of INR 57 billion (~US$1 billion), it had zero non-performing loans. Ghosh had ambitious growth plans focused on the rural sector. Bandhan seemed to have built the right capabilities to be successful as an MFI. The case allows for a rich discussion about the new capabilities that Bandhan would require as it shifted from pure MFI to banking entity and how it should go about acquiring those capabilities. Was it preparing well to deal with the challenge of entering, surviving and growing in the banking industry while continuing to serve and grow in the MFI space? Could it develop a unique and innovative model to help it straddle both worlds? With this license, Bandhan had been offered an opportunity to re-create the entire banking edifice in India. Participants have the opportunity to analyse the key issues in the case and attempt to answer the question playing on everyone's mind - how would Bandhan deliver on the goals of financial inclusion?
This is an MIT Sloan Management Review article. For more than a decade, multinational enterprises from developed countries have moved a substantial part of their R&D activity to emerging markets such as India and China. The location of R&D in developing countries was initially driven largely by the availability of skilled personnel at low cost. At first, these R&D centers in emerging markets operated primarily as extended arms of R&D in the home country, executing well-defined projects under close supervision from headquarters. However, the dynamics of multinationals'R&D centers are rapidly changing. Emerging markets are new growth drivers of the global economy, and their unique bundle of opportunities and challenges can be a wellspring of innovation for a multinational company. Simultaneously, many R&D centers in emerging markets have evolved to accumulate advanced technical capabilities, leading their employees to clamor for higher-value-added work and to seek responsibility for a complete product or technology. Given these trends, R&D subsidiaries in emerging markets are uniquely positioned to play an important role in multinational companies'innovation strategy. However, this thinking is often at odds with the dominant innovation mindset, structures, and processes within multinational companies based in developed countries. This article advances a framework that can be used by managers in multinational companies to support the key decisions on innovating for emerging markets. The framework is based on learnings gleaned from the successful development of the ASR 901 aggregation services routers, a product family that was conceptualized and developed by Cisco's India R&D center for emerging-market customers but was also adopted by global customers.
This two-part case series is set in India and examines the challenges encountered by a leading Indian pharmaceutical company, Dr. Reddy's Laboratories (DRL), following its strategic decision to create Indura - a business unit dedicated to the rural market. In recent years, the strategic direction set by the new CEO and his "Health for All" vision has shifted the company's attention to its domestic market and the rural areas of the country. The case focuses on the implementation hurdles of such a vision and invites business executives to explore the role of strategy in building ecosystems that are essential for successful strategy implementation. Case A sets the scene by describing the business model of pharmaceutical companies in India and the rationale behind DRL's decision to pursue an alternative growth avenue. It presents the Indura project, which takes the company to rural markets. Given its large size and growth potential, rural India seems to offer a fascinating opportunity to DRL. The case highlights the unique obstacles Indura faced in its effort to access rural customers and concludes by putting the spotlight on the sustainability question: Can DRL translate its "Health for All" vision into a sustainable business model? Case B is a brief follow-on case that presents key actions taken by DRL's management during the period 2013-2015. Alok Sonig, the newly appointed leader of the India business, together with his direct report Rajaram Bagayatkar, changed the name of the unit to Pride and adopted a new plan of action, which focused on motivating the sales force. While this addressed most of the challenges, some issues remained. Case B invites participants to go beyond DRL management's actions and explore possible ways to leverage technology and social media and innovative approaches to address both the access and talent challenges.
After a decade of establishing itself in China's foreign education market, the Canadian Institute of Business and Technology (CIBT) Education Group was finding that the market for Western-style education in major Chinese cities was becoming saturated. The enrolment rate in CIBT's MBA programs in Beijing declined sharply by 20% in 2004. Toby Chu, president and CEO of CIBT, believed that the company needed a significant change in strategy and a new business model for future growth in China. One option was to shift attention to the relatively unexplored second- and third-tier cities where less competition was expected. In 2004, Weifang University (WU) based in Weifang, an inland, third-tier city in Shandong province, was interested in collaborating with CIBT to provide vocational programs. Chu and his executive team had to respond to WU and Chu was wondering if Weifang could be a start to test CIBT's new model for education in China. Case B provides a follow up and an update.
After a decade of establishing itself in China's foreign education market, the Canadian Institute of Business and Technology (CIBT) Education Group was finding that the market for Western-style education in major Chinese cities was becoming saturated. The enrolment rate in CIBT's MBA programs in Beijing declined sharply by 20% in 2004. Toby Chu, president and CEO of CIBT, believed that the company needed a significant change in strategy and a new business model for future growth in China. One option was to shift attention to the relatively unexplored second- and third-tier cities where less competition was expected. In 2004, Weifang University (WU) based in Weifang, an inland, third-tier city in Shandong province, was interested in collaborating with CIBT to provide vocational programs. Chu and his executive team had to respond to WU and Chu was wondering if Weifang could be a start to test CIBT's new model for education in China. Case B provides a follow up and an update.
The case considers the evolution of the Indian pulses market and the ensuing opportunity in the branded pulses segment. India was the world's largest producer, importer and consumer of pulses because of the high percentage of vegetarians in the local population. The Indian food industry is expected to reach US$65.41 billion by 2020 owing to the rise in middle class income, changing urban lifestyle and modern retail trade. Agro Tech Foods, the Indian arm of ConAgra Foods, USA has an opportunity to enter in the Indian branded pulses sector. The decision that Agro Tech has to make was whether to go ahead and gain the prime mover advantage or wait for the other players to cultivate the market and reap the benefits later. Company also required to see whether the Indian market was demographically, economically and psychologically ready to make investments in branded pulses and to pay a premium for the same.
The case traces the journey of an Indian pharmaceutical firm, Glenmark Pharmaceuticals, which had traditionally focused on generic drugs, into the area of discovery research. After India entered the global product patent system with the signing of the WTO TRIPs agreement in 1994, a number of Indian companies sought to move into discovery research. Glenmark invested heavily in developing its capabilities to undertake high-risk pharmaceutical research, and within three years, developed several promising molecules. The company signed out-licensing agreements for the molecules with international companies two agreements with U.S.-based Eli Lilly and Company and one each with U.S.-based Forest Laboratories and Germany-based Merck KGaA. The case takes students back to 2008, one of the most critical periods in the company's evolution. Three of Glenmark's four drug development projects have failed and the fourth is showing signs of failure. The company's stock price has plummeted and the management is under pressure from financial analysts to drop discovery research and focus on what they had always done best generics. The case puts participants in the chair of Glenmark's CEO Glenn Saldanha, who must, amid the building pressure and resource constraints on the company, develop a future plan of action for its R&D. To be or not to be the innovation company? That is the question before Saldanha, and the class.
The case traces the journey of an Indian pharmaceutical firm, Glenmark Pharmaceuticals, which had traditionally focused on generic drugs, into the area of discovery research. After India entered the global product patent system with the signing of the WTO TRIPs agreement in 1994, a number of Indian companies sought to move into discovery research. Glenmark invested heavily in developing its capabilities to undertake high-risk pharmaceutical research, and within three years developed several promising molecules. The company signed out-licensing agreements for the molecules with international companies two agreements with U.S.-based Eli Lilly and Company and one each with U.S.-based Forest Laboratories and Germany-based Merck KGaA. The case takes students back to 2008, one of the most critical periods in the company's evolution. Three of Glenmark's four drug development projects have failed and the fourth is showing signs of failure. The company's stock price has plummeted and the management is under pressure from financial analysts to drop discovery research and focus on what they had always done best generics. The case puts participants in the chair of Glenmark's CEO Glenn Saldanha, who must, amid the building pressure and resource constraints on the company, develop a future plan of action for its R&D. To be or not to be the innovation company? That is the question before Saldanha and the class.
The case deals with Gilead Sciences, a bio-pharmaceutical company with several FDA approved HIV/AIDS drugs. In 2006, the company launched the Gilead Access Program to enhance access to HIV/AIDS drugs in developing countries. In India, which also happened to be the largest producer of generic drugs, Gilead signed a voluntary licensing agreement for its drug, Viread, with 13 companies. By 2011, Mylan (previously known as Matrix Laboratories), one of the 13 Indian companies, had emerged as the leading supplier for Viread, with two-thirds of the global market. In order to accelerate its market reach, Gilead wanted to expand the scope of the agreement with four major Indian companies, including Mylan. Gregg Alton, Executive Vice President for Corporate and Medical Affairs, had to decide how he would convince his partners to come on board and how to execute the agreement.
Carborundum Universal Murugappa International (CUMI) was a leading abrasives manufacturing company based in India with global operations in Russia, South Africa and China. In the global abrasives business, China held 50 per cent of the raw materials for the industry. China was also the largest market for abrasives worldwide and was expected to contribute to one third of the global demand for abrasives. CUMI had the vision to become a global leader in the abrasives industry within 10 years. It had successfully expanded operations in Russia and South Africa, where it was seen more as a partner than a conqueror in its acquisition strategy. In 2006, the company entered China through a joint venture with a Chinese state company but subsequently bought out the partner. However, the company was facing several problems with its stand-alone operation there, especially in terms of maintaining its workforce and hiring local managers. It was clear that winning market share in China was necessary, but the complexity of the Chinese market had proven to be a challenge. The managing director had to present a strategy for working successfully in China to the board.
Carborundum Universal Murugappa International (CUMI) was a leading abrasives manufacturing company based in India with global operations in Russia, South Africa and China. In the global abrasives business, China held 50 per cent of the raw materials for the industry. China was also the largest market for abrasives worldwide and was expected to contribute to one third of the global demand for abrasives. CUMI had the vision to become a global leader in the abrasives industry within 10 years. It had successfully expanded operations in Russia and South Africa, where it was seen more as a partner than a conqueror in its acquisition strategy. In 2006, the company entered China through a joint venture with a Chinese state company but subsequently bought out the partner. However, the company was facing several problems with its stand-alone operation there, especially in terms of maintaining its workforce and hiring local managers. It was clear that winning market share in China was necessary, but the complexity of the Chinese market had proven to be a challenge. The managing director had to present a strategy for working successfully in China to the board.
<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Indian Management Issues and Opportunities Award, European Foundation for Management Development (EFMD) Case Writing Competition</strong></p><br>Part C of a four-part series, which also includes 9B13M004, 9B13M005 and 9B13M007.
<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Indian Management Issues and Opportunities Award, European Foundation for Management Development (EFMD) Case Writing Competition</strong></p><br>Part B of a four-part series, which also includes 9B13M004, 9B13M006 and 9B13M007.