Aditya Birla Group Evolves 4-Pronged Growth Strategy

The Rs 15,000 crore Aditya Birla group has evolved a four-pronged strategy, which involves focusing on employees and customers, setting up systems for all major functions and evolving a common group strategy for future expansion and diversification. The group also plans to set up a new management cadre of highly-trained individuals, who will be utilised as a group resource.

In an interview to Business Standard, group chairman Kumar Mangalam Birla said the group would focus on training and developing a cadre of highly trained and skilled people, increasing the customer focus by stepping up marketing efforts and setting up systems to guide growth.

 

The hour-long interview covered various issues like the groups restructuring, future strategy, core competence, diversifications and probable acquisitions.

Birla said the group is setting up a management training cadre, which will consist of 15 people every year. The process started this year, with 15 highly-qualified people from different institutes being inducted for training. After one year, the 15 executives will be posted to the groups different units all over the country. They are basically a group resource. The purpose is to train them in different fields so that they develop as complete managers with a holistic perspective of business, said Birla.

The group also plans to send managers on stints to various units all over the world to develop a class of international managers. The process, which will start this year, will initially be restricted to a select few. In order to stay competitive in the new environment, the group has decided to concentrate on its core businesses of cement, aluminium, power, telecom, fibre, textiles, carbon black, fertilisers and refining. The group will soon take a decision on the future of its non-core businesses.

The investors opinion is very important to us, said Birla. What they say matters a lot. We also believe in adding shareholder value in terms of return on shareholder equity and capital appreciation, he added.

Birla said the group would consider acquisitions, though it has so far grown organically. But there is no concrete proposal as yet, he added.

Birla said the group has evolved certain criteria for setting up new projects. The group will establish new projects only in industries in which it feels it can be a dominant player. It will concentrate on building world-scale plants to manufacture products for which is sufficient demand.

Birla revealed that the groups Vision 2002 study will be completed in the next four to five months. This will give the group a broad idea of its competitive strengths in different industries. Vision 2002 is a strategic intent and not a rigid inflexible document, he added.