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Prepping for Next 150 Years?

The $106-billion Tata Group has already thrived for a century and a half - more than twice the age of the Republic of India
twitter-logoRajeev Dubey | Print Edition: March 7, 2021
Prepping for Next 150 Years?
Rajeev Dubey, Editor, Business Today

Acommon characteristic of some of the world's oldest organisations is their uncanny ability to adapt & adopt, destruct & rebuild, terminate and transform - constantly.

Take Finland's 156-year-old Nokia which began as a paper mill in 1865, dabbled in power, rubber and cable manufacturing until it hit upon the success of mobile communication in 1984, eventually becoming the world's biggest handset maker with over 40 per cent global share by 2007. Then came the decline which resulted in sale of its handset business to Microsoft for $7.2 billion in 2013. But by 2015, it had already acquired Alcatel-Lucent and taken charge of JV with Siemens to emerge as a huge network infrastructure provider.

At the other end of the spectrum is 132-year-old Kyoto-based video gaming firm Nintendo, known the world over for revolutionising entertainment with electronic games. It was founded in 1889, as a manufacturer of playing cards for Hanafuda, the Japanese game. As it transformed, Nintendo's success across the century is attributed to sticking to its core competence, "how to create fun".

For corporate houses, it takes enormous resilience and persistence to weather a century. The $106-billion Tata Group has already thrived for a century and a half - more than twice the age of the Republic of India. Ever since Chairman N. Chandrasekaran took charge four years ago, it is in the midst of one of those transformative journeys in its 154th year of existence. This transformation will surely not be Tata's last but it appears designed to set the Tata Group on its next 150-year journey. Read Nevin John's inside account of how Chandrasekaran is pivoting the 100-company behemoth on the lines of 'One Tata'.

If Tatas are changing track, so are some of India's biggest foreign direct investors. Interestingly, Mauritius has lost currency as their favourite via media to invest in India. Their surprise new choice is British Territory Cayman Islands. Dipak Mondal captures this hot new trend of why Cayman Islands is the new Mauritius for investments into India.

Yet another of Dipak's stories examines an alarming trend in corporate India - the rise of dominance. RBI's Monetary Policy Committee member Jayant R. Varma observes: "Anecdotal evidence suggests that in several sectors which are characterised by an oligopolistic core and a competitive periphery, the oligopolistic core has weathered the pandemic well and it is the competitive periphery that has been debilitated. Rising profits and profit margins, improving capacity utilisation and lack of new capacity additions create ripe conditions for the oligopolistic core to start exercising pricing power." In 2000-01, the 30 Sensex companies accounted for 35 per cent of the profit of all listed firms. In 2019-20, it stood at 75 per cent. What's driving this concentration of market share, profits and influence in India Inc is something to ponder over.

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