From Corporate Dwarfs to the Land of Giants


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Jessie Paul, Managing Director, Paul Writer Strategic Services presented on Corporate Dwarfism: From Corporate Dwarfs to the Land of Giants" at D'FORUM-2010- A National Corporate Conference on "Envisioning Indian management Thought" (Christ College, Bangalore)

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From Corporate Dwarfs to the Land of Giants

  1. 1. From Corporate Dwarfs to the Land of Giants Jessie Paul CEO, Paul Writer 8 October, 2010
  2. 2. Dwarf questions How many employees do you have? Are you profitable? Focus on Sales Invest in your product Put money in land
  3. 3. Dwarf questions How many employees customers do you have? Are you profitable scaleable? Focus on Sales marketing Invest in your product brand Put money in land marketshare
  4. 4. Marketshare or Profits? ✤ Top 3 firms have disproportionate growth & profits Source: “Rule of Three” - Dr Jagdish Sheth
  5. 5. Road to profits is paved with losses Zero Profits: Invest like crazy in marketshare, postpone profits to the future (at least 3-5 years away) eg MakeMyTrip MakeMyTrip has just completed its successful IPO in the US.  MakeMyTrip reported net income of $1.3 million last quarter, reversing a loss from a year earlier, after increasing sales by 49 percent. In the prior three fiscal years, it lost a combined $32.5 million. MakeMyTrip has about 48 percent of the $1 billion in online travel reservations made in India and accounted for a combined 42 percent of sales, Expedia and Inc. have a combined share of < 10% (
  6. 6. Road to profits is paved with losses Somewhat profitable: Be less profitable than your peers, and reinvest in the business. Sacrifice current profits for marketshare gains eg Cognizant Gordon Coburn its CFO and Chief Strategy Officer said “Our strategy is to maximize revenue growth”.  Cognizant has has been less profitable than it could have been, consciously sacrificing around 4% of margins vis-a-vis the incumbent large players, to reinvest in growth. Cognizant’s SG&A of 22-24% is way higher than the industry norm Cognizant is slated to become the 3rd largest IT services provider from India
  7. 7. Road to profits is paved with losses Slow-cooked profits: Identify businesses which do not require a high investment in marketing/sales/ branding. Create an initial revenue stream, and use that to fund a second line of business that requires up-front investment eg Zoho ZoHo is a part of AdventNet a 14 year old firm, that has no VC funding.  Zoho is the most glamorous product and only B2C offering from their stable, and funded by low-margin B2B offerings Zoho has successfully withstood the onslaught of Google Apps and Microsoft Office and is now a profitable $50 Million firm, with 3 million users. 
  8. 8. About Us Paul Writer is founded by Jessie Paul, considered an expert in brand ✤ Paul Writer is an advisory firm that helps define your marketing, branding and communications strategy. internationalization and frugal marketing. In 2009, Jessie published No ✤ We provide frameworks, processes, expert support, and creative Money Marketing, Tata McGraw-Hill’s insights to enable you to translate who you are into a cohesive fastest selling professional book on marketing plan. marketing. ✤ Paul Writer brings expertise on marketing innovations across the spectrum of offline and online to reposition and communicate brand As Chief Marketing Officer of Wipro’s IT values in a frugal, yet effective manner. business and as Global Brand Manager at Infosys, she has been recognized for her contribution towards putting the Indian ✤ Services offered are IT industry on the global map. ✤ Marketing Strategy Design ✤ Validation & Advisory Services With over 15 years in services marketing, including a stint with Ogilvy & Mather, Jessie has been named one of the most ✤ Our clients include: influential business women in India. She ✤ Ramco Systems | Aujas Networks | Allied Digital Services Ltd. runs a popular blog on marketing and ✤ NIIT Technologies | IDS Softwares | SYSTIME was India’s first CMO on Twitter. ✤ Venkataramanan Associates
  9. 9. Writer: n A person entrusted with managing a tea or coffee estate including the marketing and operational management. A trusted advisor of the estate owner. Origin: Colonial English. Paul Writer: n A trusted advisor to brand owners. West African symbol or adinkra for “help me and let me help you” Thank You Skype: jessie_paul 312-313 Prestige Meridian, 30 MG Road, Bangalore 560 001, India The frameworks and concepts in this discussion are elaborated in No Money Marketing by Jessie Paul, published by Tata McGraw-Hill in 2009. Please visit for more information All rights reserved. No portion of this presentation may be excerpted or reused without the author’s written permission Photo Courtesy Powru, Flickr