Winds Shaping the Future Business World – An Address From Arindam Bhattacharya, BCG Delhi
Head of the BCG Office in Delhi India, Arindam Bhattacharya, gave an
address to Johnson students which demonstrated how market leaders
sometimes do not act fast enough to the winds of change.
by Jivesh Govil, MBA ‘15
Four megatrends in context of turbulent market conditions, an interview with Dr. Arindam Bhattacharya, Managing Director, BCG, India.
Dr. Arindam Bhattacharya is the Managing Director of The Boston Consulting Group (BCG), India, and was previously a member of the global leadership team of BCG's Industrial Goods practice and was the co-leader of BCG's Global Advantage Initiative. He is the co-author of “Globality – Competing with Everyone from Everywhere for Everything”, which was nominated among the best business books by The Economist in 2008. Dr. Bhattacharya has 25 years of experience in the consulting industry and has advised leading Indian and global companies as well as governments on topics across the value chain. Dr. Bhattacharya was educated at the Indian Institute of Technology, Kharagpur, Indian Institute of Management, Ahmedabad, and Warwick Manufacturing Group, University of Warwick, UK where he completed his MSc in Manufacturing Systems and Doctorate of Engineering.
Dr. Bhattacharya, as the first EMI speaker for the Fall 2014 season, kicked off his talk with glaring examples of market leaders in various industries failing to react fast enough to changing forces in the business. In today’s business world, it is not sufficient to just build a reactionary plan to evolving market transitions. Failing to act swiftly enough to emerging trends can have multi-fold ramifications on the future of the company. Market conditions today are “turbulent” and classical frameworks taught in business schools are not enough to keep one competent. In this “turbulent” world, Dr. Bhattacharya expatiated on the four mega trends that are impacting the future of business - A two speed world of local and global competition, the emergence of the new customer who is young, more demanding and more knowledgeable, vast access to and speed of transmission of information and emphasis on sustainability and societal engagement.
First, Dr. Bhattacharya revealed statistics that demonstrated that the Asia contributes as the fastest growing segment in the World GDP, with $6.9 trillion contribution in 2009 to $21 trillion estimated contribution by 2020. The percentage of billion dollar companies from Asia has also increased from 37% in 2009 to estimated 44% by 2015. With these companies emerging as industry leaders from Asia, the companies in developed economies are finding it hard to compete in the two speed world i.e. amongst their own region growing at 0-2% and emerging region steadily growing at 10-20%.
Secondly, Dr. Bhattacharya painted pictures in our minds with videos and stories that showed emergence of new middle class in emerging economies that are now making smart choices. These choices though effectively captured by local companies, western companies haven’t still completely fathomed on how these consumers are making decisions in quality versus price.
Third, with proliferating gadgets from teenagers’ hands to smart devices in employee hands, data is being generated at faster than it is being processed. A huge amount of data is being captured with IT and online systems but it is not yet fully utilized to make front end sales. A company that can use this data to increase productivity, generate new business, and amplify efficiency is successfully able to beat the competition by staying ahead of the market transitions.
Fourth, growing cognizance of carbon footprints and waste emissions has pushed many government to a tipping point to create new laws in realm of environmental regulations. These new laws will continue to emerge a faster pace manifesting a stronger case for companies to now realize the importance of sustainability. Failure to anticipate such trends may cause major hits to profits through penalties and business reconfigurations in order to abide by these laws.
“What will take to be a leader in today’s competitive environment?” asked Dr. Bhattacharya. He suggested three key areas for the businesses to focus on. First, global businesses need to build agility into their business model to react to two speed world. If these businesses want to be globally competent in turbulent market conditions, they need to be cognizant of the product specifications and prices that can attract the eyes of the next billion customers. The leaders of the business will have to amplify their influence from within the organization to external stakeholders such as governments, investors, media, JV partners, NGOs, and others. Second, businesses need to increasingly leverage big data for competitive advantage. It is the need of the hour to use big data to make early decisions in business for a salesman to make a compelling offer to a new customer. Third, sustainability should not merely be thought as a corporate social responsibility but as a mainstream business. Business need to be bold to think beyond capital expenditures to optimize profits and unexpected costs in context of changing regulations.
Finally, in view of blurring industry boundaries due to emergence of non-conventional competitors as outlined by four mega trends, Dr. Bhattacharya recommended 4Rs for new business: Readiness, Resilience, Responsiveness, and Research, beyond existing company purview of scale, efficiency, strategic planning, and financial capabilities. By his 4Rs, he meant business need to be on guard to read market transitions, react to changing transitions quickly through agile financial and strategic planning, and respond smartly once the market transitions shake up the business. He further suggested to run continuous market experiments in search of products that capture the next billion customers.