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So is it all a tale of making the most of the first mover advantage terminology? Perhaps not. For till date, there have been quite a few that have taken a plunge in this ‘seeming’ blue-ocean. MyTVS from the TVS Group’s stable, Mahindra FirstChoice (a joint venture between ICICI Bank and Mahindra & Mahindra) and Mukesh Ambani’s Reliance AutoZone are names that represent similar formats that were launched much earlier. So what is so unique about Khattar’s model? One word - scale! All the other aforementioned names missed out on achieving nationwide presence and were therefore just restricted to a particular geographical region. For example MyTVS operates in about 5 southern states while Reliance AutoZone operates in just three metros. So, what comes first for Khattar – offering diversified services or increasing reach? Khattar is targeting more states before he provides varied services through Carnation.

When it comes to generating a decent initial response, the company has been involved in quite a number of Below-The-Line activities, than opt for high-priced media vehicles like TVCs or print campaigns, as Khattar explains, “Being a start-up, we chose mediums that were suitable for the needs of the business rather than making expensive choices...” Talking about diversifying its service offerings, Carnation also recently announced the launch of its first used car sales facility at Mumbai, which was in the pilot stage for the past two months. So there you are – three businesses already; how many more on Khattar’s mind, remains the question.

Carnation has of late also ventured into the insurance business, and its operation includes renewal of expiring insurance policies. “We have just started with the insurance business and as the number of locations increase, the vertical will gradually build up,” added Khattar. Apart from this, the company also has plans of starting an in-house accessory and spare parts brand. When asked about the revenue targets, Deepak Singhal, Group CFO, Carnation avers, “We are targeting revenues of Rs.75 crore for FY2010...” He also revealed that Carnation “expects to break even by Q3, FY2010-11.” However Khattar is not very optimistic about the break-even coming soon as he opines, “When you expand at such a speed, being a start-up, the break even point automatically gets stretched.” Yes, he is no oblivious to competitive threats [“You will see a lot more players entering this arena going forward,” he remarks], but looks like the company which has already raised Rs.108 crore from investors like Azim Premji (Rs.70 crore) and IFCI Ventures (Rs.28 crore), and is planning to raise an additional Rs.170 crore primarily by way of debt funding from banks is in for a big surprise to competitors. Well, if investment plans are anything to go by, Khattar surely has his hands on the wheel. Yes, risk there is, but can you name a successful entrepreneur who never treads the double-edged path of risk and return? Khattar is no novice, and his Carnation is set to re-write the rules of the auto-service industry!

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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At ADAG, the ranking of three on our most valued brand rank doesn’t go down easily: number one would have been better

IIPM 3-year full-time Integrated (MBA BBA) Programme

That Anil Ambani understands India too well, was never a disputed fact. But whether this understanding would have translated into profitable propositions for his business enterprises, was a debate that had been raging much before its time. It was under such challenging times three years ago that Anil Ambani had launched the Reliance ‘Anil Dhirubhai Ambani Group’ brand on the platform of “Think Bigger. Think Better.” And in this short span of time, this brand – with the help of high consumer interaction businesses like Reliance Communications (RCOM), Reliance Capital, Reliance Infrastructure, Reliance Power, Reliance Natural Resources and Reliance Big Entertainment – now finds itself standing amongst some of the most formidable names in the industry, having been awarded a commendable rank of three.

Interestingly, the economic slowdown has in fact played to their advantage, at least in the brand quarters. Girish Shah, Brand Director of ADAG, while talking to 4Ps B&M, gives the credit purely to ADAG’s targeted brand building exercises, “It is in these challenging times [of slowdown] that strong brands outperform through various innovations at the product and brand level. With the largest family of 12 million shareholders and 150 million consumers, it was imperative to strengthen both investor and consumer confidence through strategic branding programs.”

One factor that has surely helped is that a few of ADAG’s businesses have necessitated extremely high levels of consumer interaction. One example being RCOM, which got its fair share to the visibility kitty by not only launching a nationwide GSM service along with its existing CDMA technology, but also by roping in Hrithik Roshan as the brand ambassador. Did this create the emotional connect that RCOM was attempting with its customers? If one sees the record breaking 15 million subscribers RCOM added in just three months of the roll out, the answer surely comes out hugely in the affirmative.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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