Strategic Management and Business Policy of Godrej

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Brief: Established in 1897, the Godrej group has grown in India from the days of the charkha to nights at the call centers. Our founder, Ardeshir Godrej, lawyer-turned-locksmith, was a persistent inventor and a strong visionary who could see the spark in the future. His inventions, manufactured by his brother Pirojsha Godrej, were the foundation of today’s Godrej Empire. One of India’s most trusted brand, Godrej enjoys the patronage and trust of over 470 million Indians.

With 7 major companies with interests in real estate, FMCG, industrial engineering, appliances, furniture, security and agri care – to name a few – their turnover crosses 2.6 billion dollars. I think of Godrej as such an integral part of India and you may be surprised to know that 20% of their business is done overseas. Godrej’s presence in more than 60 countries ensures that their customers are at home with Godrej no matter where they go. Godrej is the brand one can believe in, service excellence one can count on and the promise of brighter living for every customer. Vision: Godrej’s vision is to be a leader in the Indian Food and beverage space by breaking into the exclusive league of top ten FMCG food companies in India. Mission:: Godrej’s mission is to do sales of Rs.1000 Crores by 2012, profitably at margins that are best in class in FMCG goods. They would achieve it through unparalleled business innovations and consumer satisfaction.

Commitment in Quality
Customer orientation
Honesty & Integrity
Learning Organization

Godrej Group:
1. Godrej & Boyce Manufacturing Co. Ltd
2. Godrej Industries Ltd
3. Godrej Agro vet Ltd
4. Godrej International Ltd
5. Godrej Sara Lee Ltd
6. Geometric Ltd
7. Godrej Properties Ltd
8. Godrej Hershey Ltd

[A} Godrej’s critical success factor
1. Trust helps in reducing cost and attrition
Trust does play and has played a crucial role in giving significant cost advantage to Godrej. It is a proven fact that trust reduces the transaction cost, corruption and bureaucracy. Trust has also played its part in the brand building of the Godrej Group. 2. Quick to react

All family business model like Godrej, tend to react quite rapidly to the situations as there are fewer decision making gates to deal with. Be it small, medium or large business, one has to be pretty quick when it comes to decision making as survival of business could impact the survival of the very family. 3. Ownership held by the Godrej Group

Godrej Group managed to survive in the open economy where lot of family businesses were closed down; because Godrej never allowed any of their foreign investors the ownership and most of it is being held by the Godrej family. One might say that this strategy didn’t allow them to expand. What I mean is when Mr. Jamshyd Godrej joined the Godrej Group in 1974, it was much bigger organization than L&T Group. But no one has to mention how far L&T has gone in these years. L&T has outgrown Godrej Group by quite a margin. 4. Godrej’ policy post liberalization

Godrej realized that it is very important to make everyone accountable and responsive too. Hence Godrej took important decision to incorporate corporate governance in all of its subsidiaries and group companies. It changed the concept of divisionalization of decision making and empowerment of managers at the grass roots level.

[B] Generic Strategies adopted by Godrej Group
Godrej has been pioneer in many of the sectors in Indian market. Hence Godrej has always enjoyed the advantage of exploring the demand in each sector for eg. Godrej has been maintaining its leadership in the security division since the year of its operation. Though Blue Ocean strategy has been the approach for the Godrej Group over the decades, I see Godrej using combination of the cost leadership and differentiation in the context of the Generic Strategies of Michael Porter.

Following are few of its...
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