Hi Flipkart! I’m Walmart

When major business transitions get underway, established players no matter how hard they try, end up as losers. IBM perhaps is the only exception among large global companies that did manage to make a spectacular comeback before losing its way once again. On the contrary, Kodak is a classic example of a company that actually invented digital photography and yet lost out ultimately. The reason cited for the failure is that its management did not give the innovation team enough support to grow as it would eat away its core business. 

At the heart of the problem therefore is really how organisations deal with change when it attacks their very core. Normally, during a secular shift, businesses that are getting challenged do not decline overnight. Think of media or retail. Consumer behavior is tilting towards digital but the incumbents have had enough time to recognise and digest the change. This is both a blessing and bane. When change sets in, companies initially live in denial, and when it catches up, it’s too late. That’s what happened in online businesses too. 

During the dotcom boom of 2000, every retailer had its own plan for going online, but when the boom went bust, everyone pulled back investments, and chose to invest in their brick and mortar business. But a fringe player who had nothing else to go back to stayed on and created a business that threatens all the entrenched players today.

As a result, while Amazon is working on technology to enable drones to deliver goods in the safest possible way by now, others are still scratching their head over how to get more customers on their platform. Store giant Walmart’s strategy to stay relevant in a growth market like India is through a big-ticket acquisition like Flipkart. In this issue’s cover story, deputy editor Kripa Mahalingam delves on the future of Flipkart, as it is set to begin a new journey. 

Among other stories,  there is an investing feature on Sun Pharma which is battling troubled times. Then, there is a piece on Jyothy Labs which has seen stupendous success in its effort to turnaround the brands that it bought from Henkel.