General Management

Why are we so obsessed with volume/scale?

Anand Mahindra, vice Chairman, Mahindra & Mahindra Ltd. said in an interview, “…. The argument most people use against niche is scale.” Why are most people obsessed with scale? It follows that these people think that price is the only factor that matters and you can only bring down costs by increasing volume to achieve economies of scale. Everybody seems to working towards increasing scale. They seem to be saying that niche players cannot exist.

Do we walk our talk?

Recently, Prime Minister manmohan Singh said that “the economic reforms of 1991 unleashed a new era of entrepreneurial growth in India.” The subtitle of Mint’s article “India’s entrepreneurs have helped make the country what it is today” says it all. The article also suggests that the contribution of India’s entrepreneur has been ignored in making the country what it is today. The article also draws a parallel with the American economy and quotes a survey which found that during the period 1980 to 2001, firms less than 5 years old contributed to the net growth in employment whereas established firms lost jobs.

Vision – an overated concept

Everytime you read about a successful entrepreneur, it turns out that the man had a vision to be where he turned out to be. I think thats so untrue. Did Dhirubhai Ambani think when he started out that he would become what he became. I doubt it. Did Sunil Mittal ever even dream that his company would be valued at amost Rs. 100,000 crores? I doubt it. You ask management gurus and they will credit all the success to the vision of the entrepreneur. Well, what about the unsuccessful entrepreneurs? Didn’t they have a vision?