04 LEADING THE NEWSMONDAY, OCTOBER 1, 2012, DELHI ° WWW.LIVEMINT.COM

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PORTER PRIZE

Apollo Gleneagles, BhartiAirtel share top honours

Inaugural Porter Prizeidentifies and rewardsfirms which stand out fortheir strategy andinnovation of products

z Apollo Gleneagles (healthcare) RUPALI BASU

z Cargill (food and beverage) SIRAJ CHAUDHRY

z Cinepolis (art,entertainment and recreation)MILAN SAINI

z Ingersoll Rand (industrials) VENKATESH VALLURI

z Mahindra Lifespaces (construction, real estate and steel)ANITA ARJUNDAS

z Mettl (education, training and educational services) TONMOY SHINGAL

z Orange County (tourism and hospitality) JOSE RAMAPURAM

z Red Bus (transportation, logistics and aviation)PHANINDRA SAMA

z Sealed Air (diverse, (industrials and chemicals) HIMANSHU JAIN

z SIDBI (finance, banking and insurance)SUSHIL MUHNOT

z Yum (food and beverage) NIREN CHAUDHARY

z Zensar (information, media, telecom and data processing) GANESH NATARAJAN

z Bharti Airtel K. SRINIVAS

z HDFC Life AMITABH CHAUDHRY

z ICICI Lombard BHARGAV DASGUPTA

z Mother Dairy SIVA NAGARAJAN

z Mahindra Finance RAMESH IYER

z MakeMyTrip DEEP KALRA

z Vaatsalya ASHWIN NAIK

IFC Mint strategy award winners

Porter Prize winners

B Y S U R A B H I A G A R W A L ,K I R T H I V . R A O , S H U B H A M S H I V A N G& M O U L I S H R E E S R I V A S T A V A······························NEW DELHI

Rising costs and rickety infra-structure put India at risk oflosing its attractiveness as a

favourable location of businesses,according to Michael E. Porter, pro-fessor at Harvard Business Schooland the leading global expert oncompany strategy and the competi-tiveness of nations and regions.

“Business environment in India isnot progressing fast enough,” hesaid. “There is still a lot of complexi-ty, a lot of dysfunction, lack of powerand infrastructure, which we herewant to see moving faster.”

Porter was speaking at the launchof the Porter Prize awards on Friday,organized by the Institute for Com-petitiveness (IFC), which is affiliatedwith the Institute for Strategy andCompetitiveness at the HarvardBusiness School.

Mint is a partner of the awards.“We also see that the costs of oper-

ating in India are rising very rapidly,for example, labour costs, labour re-tention costs, extra costs to be paidto higher level,” Porter said. “Howev-er, we believe that ultimately Indiawill get there. The country has acomplex political system and a com-plex society, but we would love to seeIndia work on these things a littlefaster.”

He said all these issues could makeIndia less of a value proposition as afavoured business location.

The United Progressive Alliancegovernment, led by Prime MinisterManmohan Singh, in September an-nounced a slew of reform measuresthat included easing restrictions onoverseas investment in retail, avia-tion and broadcasting.

To tackle bottlenecks in infrastruc-ture, finance minister P. Chidambar-am has suggested creating a NationalInvestment Board chaired by Singhthat will fast-track clearances to biginfrastructure projects.

Porter said that for India to pros-per further, the companies also haveto evolve continuously. “Lower la-bour costs, a large home market may

have been historically beneficial, butfor sustained improvement in stand-ard of living, we need companies inthe Indian economy to think strategi-cally and create unique value,” hesaid.

Shift in strategyStrategy is also about what not to

do, participants at a session on strat-egy and industrial architecture shiftsaid.

Addressing structural bottlenecksand regulatory inconsistencies is im-portant to expand India’s competi-tiveness when the economy is besetwith pessimism, they said.

How enterprises should respond to“seismic changes in the economy”and strategize effectively in the faceof competition and policy changeswas the theme discussed at the ses-sion moderated by Anurag Batra, ed-itor-in-chief of websiteExchange4Media. The session’s pan-ellists included entrepreneurs as wellas consultants.

The strategies that have led Indianenterprises to deal with competition,slowdowns, working in smaller townsand dealing with fast-changing tech-nologies were discussed in the ses-sion.

Building a high-quality team in asmall town is a challenge but thereare opportunities to be tapped, saidAshwin Naik, founder of Vaatsalya, achain of small-town hospitals, whowon the Porter Prize for value-basedhealthcare in India.

“Managing change was one of thebiggest challenge for small enterpris-es,” said Christopher Doyle, manag-ing director of consulting firm Dy-namic Results.

Solving social problemsAnother session at the awards

event discussed ways in which busi-nesses can bring about social changewithout necessarily resorting to phi-lanthropy.

To share value, companies mustfirst create it, according to BhaskarChatterjee, chief executive of the In-dian Institute of Corporate Affairs.“The marginalized should be helpednot just through philanthropy orcharity but by making them a part ofthe business model,” Chatterjee said.

The other panellists, which includ-ed Siva Nagarajan, managing direc-tor of Mother Dairy, Niren Chaud-hary, president of Yum India thatruns the Pizza Hut and KFC fast-foodrestaurants in India, and ShreekantJavalgekar, managing director and

chief executive of Multi CommodityExchange of India Ltd (MCX) talkedabout how their businesses are creat-ing value in different ways.

Companies should have a “portfo-lio approach” and should “blend in”the concepts of philanthropy andshared value for maximum benefit,said Melissa Scott, managing directorof FSG Inc., a non-profit consultingfirm specializing in strategy, evalua-tion, and research.

Competitive advantageThe awards event also hosted a

discussion session on leveragingunique activities and how it definescompetitive advantage.

The panellists included AnoopPrakash, managing director, Harley-Davidson, Vipul Shah, chairman,chief executive and president, DowChemicals International Pvt. Ltd,Ashwani Singla, managing directorand chief executive, Penn SchoenBerland, Ganesh Natrajan, vicechairman and chief executive, ZensarTechnologies, and Karl Ahrendt,managing director of SPERA.

“Delivering customers unique ex-periences is our unique value propo-sition (UVP),” said Prakash. “Underour UVP, we have three things—ac-cessibility, that is why we boughtfour product ranges from day one,assembly, for which we invested inIndia, and tie-ups with industry’sleading financial institutions.”

“We don’t believe in UVP,” saidSingla. “Our theme is about a rele-vant proposition and how you makeyour product relevant for customers.It is about understanding what ischanging in your customers’ worlds,and how to respond to those chang-es.”

“Sometimes, not doing somethingis as important as doing,” saidAhrendt. “Our company believes innever violating core values.”

Brand value“When you are a late entrant in a

market with established players, youdo not have the liberty to makechoices. You let go of something toearn bigger rewards,” said SandipDas, director, Aircel, at a panel dis-cussion on trade-offs and choicesmade by enterprises.

With the panel comprising execu-tives of HDFC Life, Ingersoll Rand,and Alstom as participants, andMint’s editor Sukumar Ranganathanas moderator, his comment was a re-sponse to some panellists preferringto use the term choices over trade-

offs to define their strategic deci-sions.

While this choice of the term mayseem purely a matter of preferenceand appropriate description, it re-flects and underlines the impor-tance, and, perhaps, the unfavoura-ble aura trade-offs have acquired inthe recent times.

The Supreme Court’s opinion onthe presidential reference on cancel-lation of second generation, or 2G,telecom licences lent a heightenedtopicality to the discussion.

For Aircel, Das told the audience,the trade-off was between capturingthe small, untapped market for voicecustomers and trying to capture thehuge, untapped market for mobiledata consumers.

Amitabh Chaudhary, chief execu-tive of HDFC Life, had a similar pre-dicament. He had a behemoth in theform of Life Insurance Corp. of India(LIC) to compete with and a reputa-tion of malpractices to fight off.

“The choice we made was to sellfor the long-term, which comes withhuge pains in the short-term,”Chaudhary said. Rapid experimenta-tion with products and services, in-stead of adhering to existing biasesand standards, was another key strat-egy adopted by the insurer, Chaud-hary said.

Alstom, the French multinationalconglomerate, faced challenges inthe Indian market that were notmuch different from those faced byHDFC Life: a giant that sets the rules,Bharat Heavy Electricals Ltd.

Sunand Sharma, country presidentfor Alstom, recounted how the firmhad made strategic choices to entermarkets that were closed to it earlier,such as India, to facing aggressive ex-pansion from Chinese firms.

Ingersoll Rand, being an industrialproducts company situated at thecore of manufacturing activity, doesnot enjoy the same attention as thoseon the periphery, Sukumar said.Venkatesh Valluri, president andchairman of Ingersoll Rand, outlinedtheir strategy of expanding by greaterconvergence through the develop-ment of competencies. “We decidedthat to follow our strategy, instead ofhiring entrepreneurs, we need to cre-ate entrepreneurs who can createnew markets for us through partner-ing and participation,” Valluri said.

The panellists concurred that notrade-off could be made on the val-ues of the brand that their respectivecompanies represent.

surabhi.a@livemint.com

PRADEEP GAUR/MINT