5. 5SVII 2.pptx
The Indian elephant has learned how to dance – India's GDP has incre-
ased by about 7.5x since 1980, 3 times faster than global expansion
Indexed GDP growth1) [1980 – 2014, 1980 = 1 ]
Source: US Department of Agriculture Economic Research service, Real GDP (2010 dollars) Historical,
available at http://www.ers.usda.gov/data-products/international-macroeconomic-data-set.aspx
0
1
2
3
4
5
6
7
8
1995 2000 2005 2010 20141980 1985 1990
GDPgrowth,xtimes
World
India
GDP
CAGR
1980-
1985
1985-
1990
1990-
1995
1995-
2000
2000-
2005
2005-
2010
2010-
2014
India 5.16 5.95 5.08 6.08 6.72 8.31 5.45
World 2.67 3.54 2.09 3.46 3.05 2.59 2.65
Comments
> India’s GDP growth has consistently
exceeded 5% over the last 35 years
> Since economic reformsof 1991,
India has achieved the following:
– Four-fold GDPgrowth
– Poverty alleviation for ~225 mn
Indians
– Increase in telecom penetration
from 6 mn in 1991 (1% penet-
ration) to 915 mn in 2013 (73%
penetration)
– Construction of 45,466 km of
national highways between 1991
and 2013 – four times the length of
the totalAutobahn network!
> Growth has been achieved despite
vagaries of global markets, internal
strife, and politics – proof of India’s
resilience
1) All GDP numbers used for calculation are in2010US dollars
A India’s growth story
6. 6SVII 2.pptx
278
2,371
88.4%
6.12%
China’s
GDP in 2001
India’s GDP
in 2014
2,097
India’s GDP
in 1980
While its GDP growth has been much below that of China, consider-
ing the 13 year lag in reforms, the difference does not seem so stark
Comments
> China’s GDP has not dipped
below 8% in the 6-year periods
between 1980 and 2014
> Chinese GDP has increased by
a factor of 24 since 1980 levels
(compared to 7.5x in India over
the corresponding period)
> Key success factors of the
‘Chinese economic miracle’
has been abundant investment
in infrastructure and creation of
a strong export-focused
manufacturing sector
> India’s 2014 GDP was 88.4%
of China’s 2001 GDP
– China’s economic reforms
took place in 1978, 13 years
prior to India’s landmark
economic reformsand end
of the License Raj
Indexed GDPgrowth1) [1980 – 2014,1980 = 1 ]
Comparison of India’s 2014 GDPwith China’s
2001 GDP, accounting for13-yearlag1) [USD m]
Source: USDA, Roland Berger
Comparison of GDP growth: India vs. China, 1980 to 2014 [%]
0
5
10
15
20
25
20142010200520001995199019851980
GDPgrowth,xtimes
GDP
CAGR
1980-
1985
1985-
1990
1990-
1995
1995-
2000
2000-
2005
2005-
2010
2010-
2014
China 9.58 9.80 10.79 9.13 9.76 11.21 7.99
India 5.16 5.95 5.08 6.08 6.72 8.31 5.45
A India’s growth story
China India
1) All GDP numbers used for calculation are in2010millionUS dollars
time adjusted
difference of
12% vs.
China & India
7. 7SVII 2.pptx
Contrary to China's manufacturing-led growth model, India's growth
has been propelled by services
GDP split by sectors1) , India vs. China [%]
Source: Planning commission database, ADB Economics working paper "The service sector in India", June 2013
GDP split – India vs. China [2014] Sectoral split in India's GDP Comments
1) Share to total GDP at constant 2004-05 prices
> Financing and business services were
the fastest growing categories in the
Indian services sector in 1980, while
growth in Industry, mining and
manufacturing remained stagnant
> Transport, storage and communication
services were the main drivers of
growth in the services sector in 2000,
while growth in Industry and
manufacturing remained stagnant
> In 2014, export of software services
was the largest contributer to India's
services sector, whereasTelecom and
software together drive India's global
brand image in services
> India's export of financial services too
witnessed a high growth of 34.4% in
2013-14
43%
48%
26%
Agriculture14%
Services60%
Industry
China India
9%
50%
60%
15%
15%
15%
9%
9%
9%
28%
20%
12%
39%
7%
2000
3%
1980
2%
2%4%
2014
3%
Agriculture Manufacturing
Services
Mining & QuarryingAllied services
Other Industry
A India’s growth story
8. 8SVII 2.pptx
Rising disposable incomes combined with falling interest rates and
increasing net domestic savings show a strong consumption story
India Net domestic savings [INR bn], Lending rates [%], PDI per capita1) [INR] and Avg.
amount of debt per household [INR]
Source: RBI, World Bank, NSS reports
0
10
20
30
40
50
60
70
80
90
100
1980 1985 1990 1995 2000 2005 2010 2015
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
INR
Percent
Personal disposable incomeper caita , INR
Net domestic saving, INR bn
Lending interest rate, %
1) PDI = Personal DisposableIncome
32,522
7,539
1,906661
84,625
11,771
3,618
1,030
2012200219911981
Urban
Rural
Averageamountofdebt perhousehold [INR]Select macro-economicindicatorsofIndia
A India’s growth story
9. 9SVII 2.pptx
Further, India's labour productivity gains over the period 1999-2007
and 2008-2011 have clearly outpaced increases in salaries
Growth in wages and labor productivityin Asia, 1997-2007and 2008-11 (%)
Source: Global Wage Report 2012/13, International Labor Organization
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Labour productivity growth(%)
Realwagegrowth(%)
IRA
CDA
CHI
MAC
ISA
KOR
MYA
BAN
SNG
ITHA
IND
HK
SRI
PHL
NEP
PAK
FU
-6
-4
-2
0
2
4
6
8
10
12
14
-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13
Realwagegrowth(%)
Labour productivity growth(%)
CHI
MAC
VN
BAN
MON
NEP
ISAMYA
HK
IND
THA
SNG
KOR
PHL
IRA
1) China CHI, Cambodia CDA, Indonesia ISA, Islamic Republic of Iran IRA, Republic of Korea KOR, Malaysia MYA, Singapore SNG, Bangladesh BAN, Thailand THA, India IND, Macau
(China) MAC, Hong Kong(China)HK, Sri Lanka SRI, Philippines PHL, Myanmar MYN, Mongolia MON, Nepal NEP, Pakistan PAK, Fiji FIJ
45°
1999-20071) 2008-20111)
45°
A India’s growth story
10. 10SVII 2.pptx
India's import and export intensity has also consistently grown over
the last 35 years, comparable with China during the last 5 years
Import/Export Share [1980 – 2014, % GDP]
Source: World Bank database
0
5
10
15
20
25
30
35
40
45
50
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
% of GDP
Germany, export India, exportChina, exportIndia, importGermany, importChina, import
A India’s growth story
11. 11SVII 2.pptx
FDI as well as FII flows have grown significantly since 1991, with a
cumulative inbound FDI /FII of nearly USD 0.5 trillion since 1993
India FDI & FII inflow [1993 – 2014, USD bn]
Source: Department of Industrial Policy & Promotion, UNCTAD, SEBI
(10)
(5)
0
5
10
15
20
25
30
35
40
45
50
55
60
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
USD bn1)
1) USD billion at current prices and current exchange rates 2) For period Apr 2000 to Jan2015 3) Except fertilizers 4) INR/USD exchange rate = 60has been used
FDI inflows by country & Sector, cumulative 2000-20152)
Netherlands
23.0%
6.0%
6.0%
7.0%
Japan
9.0% UK
USA
Mauritius
Singapore
13.0%
36.0%
Others
17.0%
7.0%
Construction10.0%
4.0%
Automobile
5.0%
Drugs & Pharma
5.0%
Computer hardware & software
6.0%
Telecommunications
Services
Chemicals3)
45.0%Others
FDI inflow in India FII inflow in India4)
A India’s growth story
12. 12SVII 2.pptx
Moreover, India’s outward FDI performance has been impressive –
and has grown by 30x since the period 1990-99!
37,224
3,3511528732
1980-891970-791961-69 2007-14
102,850
2000-071990-99
0
10,000
20,000
30,000
40,000
50,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Indian OFDI1961-2014 [USD mn]
Indian OFDIand IFDI [USD mn]
Comments
> Outward FDI in India increased
significantly post-2004 due to
– key policy relaxations, e.g.,
ceiling on outward FDI was
removed, state-owned
enterprises were
encouraged to invest abroad
(e.g., oil and gas companies
like GAIL and ONGC)
– restructuring activities of
large Indian conglomerates
in the 1990s had generated
large cash reserves, which
they used to acquire
international companies
> Knowledge-intensive industries
such as pharmaceuticals,
information technology, and
automotive dominated outward
FDI during the period 2004 to
2010
>
Source: UNCTAD, The Rise of Indian multinationals, Roland Berger
Overview of India’s Outward FDI (OFDI) and Inward FDI (IFDI)
Inflow Outflow
A India’s growth story
13. 13SVII 2.pptx
After two challenging years1), the Indian economy now shows signs
of recovery – including falling inflation and declining interest rates
7.07.5
6.6
4.74.84.44.84.5
5.35.55.3
6.16.9
7.77.88.2
8.98.88.6
6.0
7.9
6.15.86.1
7.57.8
Q2
153)
Q1
15
Q4
14
Q3
14
Q2
14
Q1
14
Q4
13
Q3
13
Q2
13
Q1
13
Q4
12
Q3
12
Q2
12
Q1
12
Q4
11
Q3
11
Q2
11
Q1
11
Q4
10
Q3
10
Q2
10
Q1
10
Q4
09
Q3
09
Q2
09
Q1
09
Source: MOSPI; RBI, IMF; Press; Economic Advisor of India; Ministry of Finance, India; DIPP; Roland Berger
GDP growth rate2) [%]
India industrial production (%YoY growth rate) Bank repo rate [%]
15
10
5
0
-5
Apr-
15
Apr-
14
Apr-
13
Apr-
12
Apr-
11
Apr-
10
Apr-
09
Apr-
08
-4.5
-2.3-1.8
0.5
3.94.85.0
7.37.67.57.77.7
10.09.59.79.49.0
10.310.4
7.1
1.41.6
6.7
10.810.9
Q2
154)
Q1
15
Q4
14
Q3
14
Q2
14
Q1
14
Q4
13
Q3
13
Q2
13
Q1
13
Q4
12
Q3
12
Q2
12
Q1
12
Q4
11
Q3
11
Q2
11
Q1
11
Q4
10
Q3
10
Q2
10
Q1
10
Q4
09
Q3
09
Q2
09
Q1
09
Inflation – WPI annualchange2) [%]
1) As a result of the global economic crisis and policy paralysis of the previous government; 2) Refers to Financial Year i.e. Q1 (Apr-June), Q2 (July-Sep), Q3 (Oct-Dec) andQ4 (Jan-Mar)
3) Estimated GDP 4) Includes July and Aug. data
A India’s growth story
India – key macroeconomic indicators (1/2)
5
Apr-
08
Apr-
09
Apr-
13
Apr-
15
Apr-
11
Apr-
10
Apr-
14
Apr-
12
15. 15SVII 2.pptx
> Pandit Madan Mohan Malaviya
National Mission on Teachers and
Teaching: To ensure a coordinated
approach so as to holistically
address the various shortcomings
relating to teachers and teaching
> Unnat Bharat Abhiyan: Launched
with an aim to connect institutions of
higher education, including IITs,
NITs and IISERs, etc. with local
communities to address
development challenges
> SWAYAM (Study Webs of Active-
Learning for Young Aspiring Minds):
Programmed Professors of centrally
funded institutions like IITs, IIMs,
central universities will offer online
courses to citizens of our country
The new government has created a positive momentum in the
country and is expected to drive the development agenda
InfrastructureDevelopment
> Revival of Special Economic Zone (SEZ),
streamlining the Public Private Partnership
(PPP) models and creating Infrastructural
Investment Trusts (InvITs).Highlightsinclude
‘100 smart cities’ manifesto and Diamond
Quadrilateral rail network
> Sardar Patel Urban Housing Mission:
Proposed scheme endeavors to build 30
million houses by 2022 for the economically
weaker sections
> Digital India: Development of relevant
infrastructure for National e-governance
Small Investment Reforms
> Re-introduction of Kisan Vikas
Patras: Providing safe and secure
investment avenues to the small
investors
> Sukanya Samriddhi Account:
launched with sole objective of
financial planning for the marriage of
Girl Child
> MUDRA Bank Yojana: Bring stability
to the microfinance systemthrough
regulation and inclusive participation
> Pradhan Mantri Jan Dhan Yojana -
Rolling out bank accounts for every
household
Skill Development InsuranceReforms
> Pradhan Mantri Suraksha
Bima Yojana: Personal
accident policy
> Pradhan Mantri Jeevan Jyoti
Bima Yojana: Provides risk
cover in case of an untoward
incident
> Atal Pension Yojana: The
investors will be able to get
pension of INR 1,000 to INR
5,000 per month, at the age of
60 years
Key reforms undertakenunder newModi-led government
A India’s growth story
Source: Secondary research, Roland Berger
Liberalization
> Liberalization of FDI in defence production,
railway infrastructure and insurance
> Bilateral diplomacy and neighbours first policy -
Meetings with South East Asian leaders to lay
the groundwork to plan an active role in Asia
> FDI in Defence has gone up from 26 to 49%,
with more investment allowed on a case to
case basis
Rationalization of
institutions
> Creation of Special
Investigative Team (SIT) to
unearth illegal money stashed
in tax havens
> Replacing Planning
Commission with a new
institution
ProceduralReforms
> Implementation of Goods and
Services Tax (GST) set to be
implemented towards tax
rationalization
Manufacturing focus
> Make in India- Major new national
program designed to transform India
into a global manufacturing hub
16. 16SVII 2.pptx
0
1
2
3
4
5
6
7
8
9
10
11
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
GDP
growth [%]
Russia
US
Brazil
China
India
GDP Per capita [USD]
Germany
The long-term forecast is positive – in terms of real GDP, India is
expected to jump to #3 position by 2030
Source: Goldman Sachs BRIC Report; World Bank; Roland Berger Analysis
GDP size in real terms GDP 2010 [USD} GDP 2030 [USD]
GDP growth and GDP per capita 2010 vs. 2030
A India’s growth story
17. 17SVII 2.pptxSource: www.moneycontrol.com, Economic Times, Roland Berger
1) Standalone company revenue
Whilethe resilienceofthe Indian economy is encouraging,the growth
of India's top 50 companies has been nothingshort of spectacular
B Innovative India Inc.
Consolidated Revenue of India's Top 50 companies in 2014,CAGR 2005-2014 [%]
Overall, India’s top 50 companies have grown at a combined CAGR of 21% between 2005 and 2014!
Sr
No
Company
Revenue
FY05 (INR bn)
Revenue
FY15 (INR bn)
CAGR
1 India Oil Corporation Limited 1,334.07 4,495.09 13%
2 Reliance Industries Limited 665.97 3,754.35 19%
3 TATA Motors 195.33 2,627.96 30%
4 State Bank of India 545.36 2,572.89 17%
5 Bharat Petroleum Corporation* 638.57 2,380.87 14%
6 Hindustan Petroleum Corporation* 652.18 2,066.26 12%
7 Oil and Natural Gas Corporation 597.47 1,608.95 10%
8 Larsen & Toubro 597.47 1,608.95 10%
9 TATA Steel 159.99 1395.04 24%
10 Hindalco Industries 101.05 1,042.81 26%
11 TATA Consultancy Services 97.48 946.48 26%
12 ICICI Bank 169.17 902.16 18%
13 Essar Oil* 6.37 832.06 63%
14 NTPC 235.16 806.22 13%
15 Coal India Ltd 298.87 741.20 12%
16 Adani Enterprises 150.05 645.82 16%
17 Mangalore Refinery and Petrochemicals 206.93 574.77 11%
18 HDFC Bank 37.31 574.66 31%
19 GAIL* 135.91 567.42 15%
20 Bharti Airtel* 79.03 554.96 22%
21 Punjab National Bank 103.88 548.84 18%
22 Infosys Ltd 71.29 533.19 22%
23 Maruti Suzuki 110.33 508.01 16%
24 Housing Development Finance Corporation 36.89 483.16 29%
25 Canara Bank* 91.16 483.00 18%
Sr
No
Company
Revenue
FY05 (INR bn)
Revenue
FY15 (INR bn)
CAGR
26 Bank of India 71.77 479.63 21%
27 JSW Steel* 70.35 460.87 21%
28 Bank of Baroda 80.44 460.18 (2014) 21%
29 SAIL* 325.69 457.11 3%
30 AXIS Bank 23.28 438.44 34%
31 Chennai Petroleum Corporation 162.96 418.66 10%
32 Wipro* 72.36 416.35 19%
33 Petronet LNG 19.45 395.00 35%
34 Mahindra & Mahindra* 76.96 389.45 18%
35 ITC Ltd 76.39 365.07 17%
36 Union Bank of India 57.36 356.07 20%
37 Motherson Sumi Systems 7.81 350.32 46%
38 TATA Power Company 49.55 343.67 21%
39 Grasim Industries 94.10 328.47 13%
40 Vedanta* 14.09 325.02 37%
41 HCL Technologies 33.51 321.44 (2014) 29%
42 Idea Cellular 27.95 (2007) 312.79 35%
43 Hindustan Unilever 110.61 (Dec 2005) 308.06 11%
44 Bharat Heavy Electricals* 106.86 301.83 11%
45 IDBI Bank 33.59 297.20 (2014) 27%
46 Ruchi Soya Industries 39.08 283.09 22%
47 Central Bank of India 61.44 283.03 17%
48 Hero Motorcorp 100.86 (2006) 275.85 12%
49 Aditya Birla Nuvo Limited 3,1.89 265.16 24%
50 Indian Overseas Bank 47.51 260.77 19%
18. 18SVII 2.pptx
India Inc.'s innovation focus and need to differentiate has come
about as a result of its need to compete in higher margin businesses
Source: Competitive Advantage of Emerging Market Multinationals, Roland Berger
Comparison of China vs. India on competitive advantage
Government-specific
advantages (GSA)
Firm-specific
advantages (FSA)
China India
Country-specific
advantages (CSA)
(E.g., land, naturalresources,
labour, location, climate etc.)
(E.g., physical infrastructure, human
capital, educational systems, quality
of governance reflected in policy
making and execution, etc.)
(E.g., firm-level assets and
capabilities that contribute to
competitive advantage)
> Strict labour law
regulations
> Good pool of talent
> Poor physical
infrastructure
> Inconsistent, ineffective
government policies
> Ranks low on Ease of
Doing Business
> Historically, Indian
companies have not
competed on cost alone
as weak government and
infrastructure impact cost
competitiveness
negatively
> In this environment, a
purely operational
excellence, low cost
manufacturing strategy is
insufficient as CSA and
GSA prevent Indian
companies from achieving
the same cost position as
their Chinese counterparts
> Innovative, higher
margin businesses are a
must for survival
> Successful Indian
companies have had to
overcome significant
challenges in terms of
CSA and GSA
> Professional management
> Clear focus on becoming
best-in-class in knowledge-
intensive industries
A Innovative India Inc.
20. 20SVII 2.pptx
In our belief some of the major themes in this journey evolve around;-
Intersectionof social problems and business.What does it imply?
B Innovative India Inc.
1. Redoing Products, Services – Making them more relevant to social needs
2. Deriving a new and more relevant definition of productivity – Linking productivity
to many more objectives than commercial value add
3. Creating local industrial competence clusters – Building local ecosystems of
excellence
4. Creating scaleable impact – Expanding impact at multiplelevels and in a multitude
of ways.
5. Linking economics with social progress – setting the context of business and
rooting it in overall developmental agenda for the society
21. 21SVII 2.pptx
There are several examples that have done the above well at
multiple levels not only domestically but also internationally, across
a variety of industries
Ge has leveraged technology, innovation and a deep understanding of consumer needs to create the low cost
ECG machine for markets like India taking healthcare delivery to millions more in an environment where
service delivery is localised, easy, cost effective and maintainance free.
Godrej Consumer Products Ltd has championed science and technology to drive innovation and create
market-disruptive products; it has adapted products from its global businesses and localized them with the
help of consumer insights, local suppliers, and an innovative and dynamic R&D organization
With its effortsin extensive ruralmarketing, frugal engineering, building a profitable and efficient supplier base
and strong customer relationship management, Maruti Suzuki has maintained its market leadership position in
India for 3 decades. Moreover, it has overtaken its parent in termsof valuation; it accounted for 33% of
Suzuki’s auto revenue & 55% of EBIT in FY15
A prime example of a successful business built on the principle of shared values via leveraging its strong
parentage, understanding of customer priorities, development of local sales force, and customized credit-
appraisal and collection mechanisms
Customer focussed and asset-lite-no-frills-low-price-hub-based modelfocusing on a core set of specialized
services, Vaatsalya's operating modelcan be applied in Western markets where concerns about increasing
healthcare costs are growing
Source: Secondary reports, Roland Berger
GE
Medical Devices
Godrej Consumer
Products Ltd.:
FMCG
Maruti Suzuki:
Automotive
Mahindra Rural
Finance:
Financial Services
Vaatsalya:
Healthcare Services
B Innovative India Inc.
1
2
3
4
5
22. 22SVII 2.pptx
Godrej Consumer Products Ltd has championed science and techn-
ology to drive innovation and create market-disruptive products
Analysis of testing
and validation
processes
Continuous improve-
ment of R&D processes
to reduce time to
market & increase
flexibility
Using ingredients
afterdetailed
understanding
The team ensures that
the raw materials stack
up against the function-
al requirementsof the
product prior to usage,
e.g., reusability,
interactions, etc.
Focuson
Chemistry and
science of
ingredients
Godrej innovations
> Godrej’shair color
sachet was borrowed
from its Argentinean
business and localized
with the help of local
suppliers
> Godrej’sGood Knight
Fast Card was adopted
from its Indonesian
business via partnership
with suppliers to drive
down cost
Drive small
innovations
Focus on continuous
and small
improvements, so as to
become faster and
more agile
E.g., rather than testing
hair color via human
hair trials, the team
developed multi fabric
strip testing that are
easy and fast to use
and allow reproducible
testing and formula
optimization across a
range of colors
Driving R&D to
small innovations
Technical track of
employees
Apart from hiring the
standard management
employees, Godrej
hired at higher salary,
technical experts such
as polymer chemists,
flavor & fiber experts,
etc who would provide
"out of the box" thinking
OtherHR efforts
Compensation of R&D
teams was modified,
cross-functional teams
were set up, all to drive
innovation
Hiring technical
experts& other
HR efforts
Create new markets
Focus on untapped mark-
ets & disruptive ideas – it
adopts technologies from
its global acquisitions and
localizes these to disrupt
the market and drive
volumes
With the help of in-house
qualitative R&D, and
partnershipswith local
suppliers to drive
efficiency, Godrejhas
successfully adapted
international products to
suit the Indian consumer
Adopting ideasand
technologyto suit the
Indian consumer&
price point
Case Study: Godrej Consumer Products has championed science to drive innovations
Source: Secondary research, Roland Berger
B Innovative India Inc.
23. 23SVII 2.pptx
Mahindra’s Rural Finance business is a prime example of a
successful business built on the principle of shared values
B Innovative India Inc.
Case study: Mahindra Rural Finance is driving prosperity and respect in rural India
1
2
3
4
5
6
Building trust: Leveragesthe good reputation of Mahindra
Finance by getting past customers of Mahindra Finance to
interact with prospective Mahindra Rural Finance customers
Understandingcustomerpriorities: Developsan in-depth
understanding of the ruralcustomer’s priorities to redefine product
offering – smaller principal amounts, flexible payment terms, etc.
Relationship building: Recruitssales force from the local
community who become brand ambassadors and reach
potential customers through word-of-mouth and concept selling
Customized collection processes: Encouragestimely loan
repayment via provision of further loans, collects cash & uses
technology to minimize pilferage, trains sales & collection
manpower to accurately gauge credit worthiness and
repayment capacity of customer
Creating customerdatabases: Buildscustomer databases
leveraging know-how of sales force to know financial situation of
customers, reschedule loans, offer attractive loan rewards, etc.
Risk assessment: Develops reliable estimates of potential
earnings / repayment via income models based on customer
profile & farm; further performsformalassessment via
proprietarysoftware
Mahindra
Rural
Housing
Finance
Customer
Acquisition
Collections
Credit
appraisal
Trust
Building trust
Relationship
building
Understanding
priorities
Income models
and Risk
Assessment
Creating customer
databases
1
2
3
5
6
Customized
collection
4
Source: Secondary research, Roland Berger
24. 24SVII 2.pptx
Cost-efficient and investment-lite model:
> With a network of 15 hospitals Vaatsalya createsvalue by
improving price negotiations with vendors and standardizing
operating procedures
> Capital expenses for land are avoided by leasing the land;
moreover, Vaatsalya operates in semi-urban areas such as Hubli,
Bijapur etc., where rentals are low
> Investment are tailored to keep costslow. In tier IIcities. Without
land cost (about 30% of the total) the company invests about INR
0.3 million for instruments etc.
Vaatsalya's operating model can be applied in Western markets
where concerns about increasing healthcare costs are growing
Vaatsalya
Business
model
HR-friendly
policies Marketing
awareness
Focus on cost-
efficiency
Core set of
specialized
services
Investment-lite
model
Strong
customer focus
1
2
4
5
Core set of specialized services: Focus on time-sensitive,
high priority services for which travel is unfeasible,e.g.,intensive care
facilities, neonatal care, nephrology, etc.
Integrated marketing effort: ATL & direct marketing efforts
customized to target customer segments, e.g., radio campaign,
telephone helpline, door-to-door visits, referral bonus, tie-ups with
government insurance programs, etc.
HR-friendly policies: Attractive compensation structure to
incentivise doctors to relocate to small cities, provision of greater
autonomy and control to doctor staff,rotation of keymedical staff
Case Study: Vaatsalya providesquality healthcare to semi-urban areas efficiently
Source: Secondary research, Roland Berger
Core value proposition: Afor-profit chain of hospitals and clinics in India
which strives to provide quality healthcare in semi-urban and ruralareas
3 Strong customerfocus: Focus on customersvia stringent
feedback mechanisms and increased operational efficiency,e.g.,use
of IVRS1) based booking system,customer satisfaction surveys,
detailed KPI tracking, etc.
1) Interactive voice responsesystem
B Innovative India Inc.
25. 25SVII 2.pptx
So what does this tell us about the intersection of social needs and
business solutions
1. Listening to the customer and appreciation of the gap is critical
Local solutionsfor local needs which are relevant2.
Innovation in approach, ability to leverage technologyand
driving efficient product definitionsis critical
3.
Bottom line is both profitabilityas well as social relevance4.
Source: Roland Berger
Summary