This document discusses strategies for small and medium enterprises (SMEs) in India to remain competitive. It summarizes the perceptions of "Brand India" and challenges SMEs face in the domestic market. The document advocates for two competitive strategies: 1) Focusing on internal structure and company spirit by empowering employees and decentralizing decision-making. 2) Building the company brand through consistent branding, visibility, and product innovation. It provides an example of implementing these strategies at SAGE Publications India between 2006 and 2011, which resulted in increased revenues, profits, lower attrition, and other improvements.

1. Los Angeles | London | New Delhi
Singapore | Washington DC
India Strategy Forum 2011 -
Remaining competitive: possible
strategies for SMEs
Vivek Mehra
Managing Director and CEO
SAGE Publications India Pvt Ltd

2. India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
What is SMEs’ true value to Brand
India?
● Contribution
• 45% of industrial output
• 40% of exports
• Employing 60 million
• Creating 1.3 million jobs every year
• Produce more than 8000 quality products

3. India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – Global Perceptions
● Bureaucratic and corrupt
● Outsourcing hub for computer software
● Cheap destination for outbound calling
● Questionable quality of products
● Low skill base for technical products
● Culturally incompatible

4. India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – Fabled domestic
market
● Fragmented across segments
● Low accountability –
• Will save tax and forego product warranty
• High cash spend and hence true income
suppressed

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Singapore | Washington DC
Brand India – Fabled domestic
market
● Access to global markets
● High aspirational levels especially of Gen
X and Gen Y
● High costs of living – housing, food and
transportation (to work) consume 80% of
income

6. India Strategy Forum 2011 Los Angeles | London | New Delhi
Singapore | Washington DC
Brand India – For SMEs: a challenge
or opportunity?
● A challenging opportunity
● Extremely price sensitive across all segments
• Except the very creamy layer
● Savings based on perceived value not real value
(Rs. 2 per sachet is perceived to be cheaper than the bottle)
● SMEs not small enough to survive on local clients
(except in remote rural areas)
● Not large enough to get economies of scale

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Singapore | Washington DC
What constitutes good competitive
strategy?
My top 2
Internal structure and company spirit
Brand building leading to product innovation

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Competitive strategy 1: (Internal structure
and spirit) Illustration using SAGE (2006)
● 98 employees
● Middle single digit operating profit
● Revenue that of a large SSI (small ME)
● Decision making highly centralized – (resting
with the MD)
● Attrition rate 40%
● Average spend per employee (non salary) Rs.
1500

9. India Strategy Forum 2011 Los Angeles | London | New Delhi
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● Managers with no real empowerment
● No agenda for training and developing
individuals
● Office located in a house – aggressive
sealing drive
● Low aspiration among employees
● MD not easily accessible to employees
Competitive strategy1: (Internal structure
and spirit) Illustration using SAGE (2006)

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Singapore | Washington DC
Competitive strategy 1: basic re-
structuring
● Empowering managers – decision making
decentralized
● Building processes (automation)
● Documenting knowledge (internal)
● Building (manpower) redundancy within
departments

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Competitive strategy 1: HR redefined
(the CEO’s agenda)
● Open door policy
● Providing anonymous access
● Creating open forums for discussions (Monthly Staff
Meetings)
● Departmental outings to build stronger teams

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Singapore | Washington DC
Competitive strategy 1: HR redefined
(the CEO’s agenda)
● Interdepartmental conflict resolution procedures
defined tightly
● Direct involvement in the appraisal and annual
increment process
• Charting every employee’s career path

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Singapore | Washington DC
Competitive strategy – 1 HR redefined
(the employee is the first customer)
● Profit sharing with employees down to the
grass-root level
● Sharing company performance with
employees
● Documenting hiring processes
● HR policies made employee oriented and not
merely legally compliant
● Advertising for candidates repurposed

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Competitive strategy 1: HR redefined
(the employee is the first customer)
● Including families in medical insurance
policies
● CEO actively overruling policies in favour
of genuine employee problems
• Extension of maternity leave
• Extending financial help beyond basic medical
insurance

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Competitive strategy 2: (brand building
leading to product innovation)
● Relocating from a house to a
professionally laid out open plan office
● Ensuring consistent branding across
products and activities
● Building visibility across core markets
● Strategic partnerships with key
stakeholders

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Singapore | Washington DC
Competitive strategy 2: (brand building
leading to product innovation)
● Strengthening product lines, increasing
output (60 to 100 books, 16 to 50 journals)
● Adding product lines (swimming against
the current)
• Legends in Marketing
• SAGE Impact
• SAGE Law

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Strategic Tie-ups

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Report Card 2011 vs 2006
● 227 employees
● Revenue up 5x
● Double digit operating profit; growth 4.5x
● Attrition = 10% (industry standard 18%)
● Average spend per employee (non salary)
= Rs. 20,000
● Average print run
• Academic 1200 units (industry standard 300)
• Retail 3300 (industry standard 1600)

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Sneak peek
● Legends in …
● SAGE e-veda
● Journals 50 to ???
● Project Aristotle ???
● …???

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Two rules to live by
A CEO doesn’t live in an ivory tower, he lives
in a glass house.
Break the mould.

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Thank you
Vivek Mehra
vivek.mehra@sagepub.in
contactceo@sagepub.in