Process as a Determinant of Product: The Case of the Automobile Industry

Automobile as a product may not have changed so far, and may not be changing in future too in terms of a basic product structure. However, just as a human-driven automobile has revolutionized transportation by substituting animal driven carriage, the existing human-driven automobile would in future be substituted by an autonomous robotic car. Such a car may include additional enhancements such as hybrid (oil-electric) engines, solar powered heating and cooling systems, and lighter but stronger materials. At the core of the product transformation is not a new product per se but a host of visible and invisible process innovations that change the specifications and operability of each component, aggregate and system of an automobile. Process innovations dictate the emergence of new materials even as new manufacturing processes enable the use of new materials on the shop floor.

The automobile industry has several interesting lessons for product designers, who have passion for new products and newer market ecosystems. When limitations on fundamental product transformation exist (as in the case of automobile) designers would do well to extend themselves as backward as possible to integrate process improvements. The smallest of the components can be redesigned to use newer materials, and render them stronger but smaller. The most complex of the systems can be reengineered to use electronics and telecommunications, and render them more efficient and seamless. Process improvements, integrating technologies from other domains could dramatically improve the product usage functionality and redefine the consumer ecosystem. Research and Development establishments must have exceptional process depth, for in several cases process could be a determinant of product!

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Super Fast Moving Consumer Goods Industry: The Cradle of New Management

Established management thought and practice owe much to two major industries: the automobile industry and the fast moving consumer industry. These two industries, more than any other industry, demonstrated how firms could achieve stability and efficiency in design, manufacturing and marketing of products. Management principles rooted in these two industrial sectors epitomized effective ways of conducting businesses. In today's knowledge economy driven by new modes of technological convergence, a new industrial sector of Super Fast Moving Consumer Goods (SFMCG) is fast taking shape rewriting the principles of management.

The discussion in the blog post has led to an interesting profile of what defines an SFMCG product and the five essential principles that shape the evolution and sustainability of an SFMCG product. Yet, it would be facile to assume that the other sectors and products would, for ever, be moulded in conventional laws of development, manufacture and marketing. The rate of technological change would in the coming years be even more intense and comprehensive. The new laws of SFMCG would need to be studied and adapted by all firms which believe in product reinvention and competitive rejuvenation as strategies to dominate future industrial evolution.

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Patanjali Phenomenon in Indian FMCG: A Study in Industry Level Competitive Strategy

The rapid growth of Patanjali Ayurved Ltd (PAL), with its range of natural or ayurvedic products, has shaken up the Indian Fast Moving Consumer Goods (FMCG) industry by a silent storm. Established in 1996, and with humble origins as a small pharmacy in Haridwar in 1997, PAL has had a tepid growth until five years ago but has achieved exceptional growth over the last five years, quadrupling the revenue to Rs 2000 crore as a large developer, manufacturer and seller of ayurvedic or natural FMCG products. Now, the company has even more ambitious plans to double and treble the turnover in the immediate and medium terms. India has not been new to natural products; Himalaya has an eighty year legacy of ayurvedic drugs and nutraceuticals while several companies such as Zandu, Dabur, Emami, Vicco and Jyothi have developed remunerative natural product portfolios. However, no company has jolted the MNC and large Indian players as PAL does.

PAL is an interesting study in competitive strategy. It has valuable lessons on overcoming entry barriers and scaling up. It helps one understand industry definition and industry segmentation from multiple angles. It also offers insights on generic competitive strategies that a firm could pursue, and how aspirant firms can establish their unique selling propositions (USPs). It underlines the importance of value chain management in competitive strategy. It also rewrites some principles of organizational management. PAL's success would offer valuable lessons for a breed of new native companies seeking to nibble away shares from established players, Indian and MNCs. It also indicates the challenges it would face, and the strategies it could adopt, to keep on the growth path. Finally, it suggests that management theory and practice could be unique to the Indian context.

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