Strategy Digest Volume 2 (Nov)

Videocon to reorganize businesses

Videocon, an electronics-to-energy conglomerate, has decided to undertake reorganization to facilitate greater focus on each of its businesses. Videocon has been increasing the number of verticals it operates in, all under the Videocon umbrella.

The consumer electronics business of Videocon, which contributes approximately half of the company’s revenue, is likely to continue under the Videocon brand whereas the other business will likely be spun off. Videocon while most likely appoint a consulting firm to assist them in figuring out the best way to reorganize in order to benefit the company and its shareholders.

Harley to assemble bikes in India

In a move that will most likely reduce the prices of high-end bikes in India, Harley Davidson, the well-known manufacturer of luxury bikes, will start assembling bikes at Bawal in Haryana.

The Harley Davidson recognized the potential in India for such bikes in India and said that the growing economy, rising middle class and better road infrastructure makes leisure bikes a good proposition. India is currently the 2nd-highest bike market in the world but most of the bikes are used for commuting purposes. However, the rising number of millionaires in the country has increased the demand for high-end leisure bikes.

Tata DoCoMo prices 3G services aggressively

In a bid to convert many of its 2G customers, Tata DoCoMo has announced an aggressive tariff policy for its 3G services. In the process, Tata DoCoMo has also become the first private operator, and 3nd overall after BSNL and MTNL, to introduce 3G services.

Most of its plans do not differentiate between its 2G and 3G customers as 3G customers will pay 0.66-1.1 paise per call, which is approximate the same as 1 paisa a second paid by the current 2G customers of Tata DoCoMo. Also, for its 2G customers wanting to experience 3G services, they can do so at a nominal cost. Of course, it remains to be seen how the other private players price their services, and these set of prices introduced by Tata DoCoMo could only be transient prices till the competitors set theirs.

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