Growth Strategy

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GrTeaching Note to the Case
The Growth Dilemma – A case on Infoedge India Limited

by Deepak Pandit, EFPM 2008
EFPM Student
Mobile: 91 9811311032
Email: efpm08deepak_p@mdi.ac.in
Case Supervisor : Prof Amit Kapoor
Case Facilitator: Dr Geeta Bajaj

Relevance




An understanding of the perspective of Top Mgmt at Info Edge Limited regarding the economic slowdown
– By understanding the macro economic environment and its impact on performance of Infoedge Limited
– By understanding the past activities undertaken by the company and its growth patterns
Examining the Strategy Formulation variables faced by the company – By identifying, developing and implementing a strategy to counter the economic slowdown

Target Audience




Postgraduate Management Students with substantial work experience Business Executives under going MDP in General Management /
Business Policy
Participants of Advance Courses on Strategy Formulation and
Implementation

Key Words
Strategy, Growth, Slowdown, Internet , Verticals
Functional Area
Strategic Management, Business Policy & Corporate Strategy
Teaching Objectives




Understanding the importance of Environmental Scanning for planning Corporate Strategy
Understanding of the phenomenon of “Growth Imperative” faced by firms in Technology sectors
Appreciation of issues in formulation and implementation of Corporate Strategy in response to economic slowdown

Case Summary


The case provides data about the following aspects:

1. Infoedge Ltd (Company reported & Primary Data)
– History , Growth rates, Verticals , Financials
– Culture, Manpower, Strategic Investments

2. Internet Usage in India (Specialized Consulting Reports) – Internet penetration , Rural Vs Urban users, Usage pattern, Growth Rates, Popular Content
3. Economic Outlook (Public Domain)
– GDP Growth, Sectoral performance , Impact on IT , Job Losses 4. Industry & Competition ( Third Party Data)
– Third party data comparing Infoedge with competition across sectors


The case uses the CEO of Infoedge as its Protagonist to highlight the problem faced by the company because of the slowdown

Origin Of Case Issue






Having recorded > 50%Growth Rate for five consecutive FYs Infoedge started seeing growth rates deceleration in FY08-09
Manpower ~1800 in June 2008 down to 1676 March 2009
Company declined to provide guidance to Investors starting Q3 FY08-09 citing Volatile Market Conditions
CEO mentioned in Media in Q4 FY08-09 that “ I am pessimistic over next two quarters and optimistic over next 12 months.
This was followed by a statement in Q1 2009-10 that “The worst is over and growth will return soon”

Probable Case Problem






Infoedge which has experienced substantial growth in revenue & manpower terms over the past few years suddenly faces a minimum growth year
The co. has a sales driven incentive culture with over 1300 employees in sales. In the current business climate sales is not able to meet its targets. 85% of company’s revenue come from Recruitment vertical which is directly impacted by slowdown

Matrimonial & Real Estate vertical though revenue earning are not cash positive and also impacted
Other Verticals are still in incubation stage and require substantial cash investments for next few years

Suggested Pre- Discussion Assignment Questions



Pls elaborate the reasons why you think Infoedge was not able to anticipate the slow down ?
Given the co’s leading position in its industry , strong cash reserves advocate what strategy it should adopt to counter the slowdown ?

Possible Discussion Questions


Do you absolutely agree that the company should continue to invest in New Businesses and for market expansion in slowdown?



What Corporate Level strategy would you suggest Infoedge follow to manage this situation presently and avoid repercussions of this in future?

Teaching Approach



Dimensions of...
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