The Godrej 3x3

Godrej making waves in Asia, Africa & S America - The Economic Times: "VG: I'd call 3x3 a lens since it is not necessarily a plan or a full-blown strategy. There are lots of markets that have similar characteristics to India - in terms of demographics, consumer behaviour, population growth, size of the middle class and the bottom of pyramid. We decided to consider those markets which actually have these similarities with India.
It helps leverage what we are good at in India to those markets: superior quality products at affordable prices. We sell to largely middle India and the bottom of pyramid India. We are a very mass positioned company. For instance, the reason why No1 soap got share against a Lux was because it was a soap that mass consumers felt provided best quality, lasted longer and provided a better experience.

That is the geographic lens. The second lens of 3x3 is the category lens. From a category perspective what are the categories where we feel like we have a competitive advantage and some differential knowledge? Hair care, personal wash and home care. The logic was to find complementary assets which are strong leaders in these categories in other emerging markets. If we are to add value it has to be something which we are good at from an India perspective. Which is why we chose these categories.

Areas where I think we've been able to effectively partner with these countries are twofold. One is operations - supply chain, manufacturing, IT. The other big differentiator for us is our operating model. Fundamentally we believe in what we call values based partnering model - where selling and marketing are left to the discretion of the individual country. We don't claim to understand the markets from here. And we pride ourselves on bringing in entrepreneurial empowered management teams. The worst thing we can do is stifle the entrepreneurial edge which has made these companies successful. You have to remember that they have done a brilliant job of competing with the MNCs on a day to day basis. How can we add value support, teach them about brand management and learn from each other? But also how can we leave them somewhat alone so they can actually really focus on their markets?

Underlying this is our entire incentive system that is based on economic value added and so understanding return on capital employed and returns are things which have worked very well for us. We use similar EVA type principles to align individual and team performance. The local teams also see a far higher upside than they would have done previously, if they create value.,,"