Can India challenge Google in innovation?
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Now, one would not traditionally believe that companies in India would be at the forefront of innovation. Especially not companies in the run-off the mill consumer products or industrial goods space. Well, you may just be wrong. Hindustan Unilever Ltd. (HUL), the Indian outfit of Unilever makes dull items like soaps, shampoo and detergent. However, HUL ranks at number 6 in the Forbes list of the most innovative companies in the world. And what takes the icing on the cake, it that this company ranks just below Apple, and one rank above Google! Power equipment maker BHEL also makes it to number 9 on the list.
So what makes this company so innovative? It has become one of the most trusted brands in India by developing an innovative network-marketing approach. This helps the company sell its goods via thousands of underprivileged rural women in over 100,000 villages. Its 'Project Shakti' helps reach consumers in remote areas and helps empower women across the country. The company has grown its sales and profits by 10% and 4% respectively each year over the past five years. Profits have seen some erosion due to increased input costs and discounts given to fuel volume growth. But no one can doubt the capital efficiency with which the company works. Its return on net worth and capital employed could be the envy of the likes of Apple and Google themselves. This, coupled with its ability to do wonders with the rural market does help it command a premium in the market despite not so decent profit growth in the recent past. But, are there more companies in the country that make the cut?
Do you believe in paying a premium for the innovation factor in companies you invest in? If so, which companies do you believe make the cut? Share your views with us or post your views on our Facebook page.
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4 Responses to "Can India challenge Google in innovation?"
Maulik Suthar
Jul 22, 2011“Brothers in Arms, Misappropriating a Fortune”.
Three days ago, a little known Canadian Research outfit, Veritas Investment Research, published a report titled “Brothers in Arms, Misappropriating a Fortune”. The report alleged that Reliance Communication has inflated its profit and some key ratios such as operating profit, EBIDTA (earnings before interest, depreciation and tax), earning per share and book value by accounting manoeuvres and poor governance during 2006-2010.
Sthithapragnja
Jul 22, 2011Eq.Master Team ,
The question posed above " CAN INDIA CHALLENGE GOOGLE in Innovation " ??
In response to the question posed above,in all my humility and ignorance I may observe as under :
Just as from times immemorial, the wisdom and brilliance of India's accumulated knowledge refined through centuries(one small example is the great
un-assailed contribution to the world of Mathematics
viz. The "ZERO" !! Similarly the innovation and introduction of a great concept (as suggestted by a Great Indian Management Guru)and operationalised by another Corporation in India: viz HUL ) the tiny Re 1 sachets concept of Shampoos bear eloquent testimony for the versatality of Indian innovation !!
Should I continue to cite the great TATA's "NANO CAR "
which has taken the world by storm with quite a lot of interest evinced all over ??
I hasten to conclude !!
Pradeep
Jul 22, 2011Indian companies have been innovative on low cost products where stakes are lower. ITC has developed a host of brands in FMCG from scratch. Air Deccan had earlier pioneered the concept of budget airline. On the higher value products, Tatas have a host of products from Nano to low cost house to low cost water filter. On space front, we had successful completion of Chandrayaan. However on the consumer electronics front or infrastructure front, let alone IT and BT, we have not produced any innovative product. This also shows lack of vision or faith our promoters have in the team or probably, their outlook is always short term due to funding constraints for long term. Unless we resolve these issues, we will lag behind our true potential.
anonymous
Jul 22, 2011HUL Hindustan Lever is an old company which makes very bad
products . modern Bread was taken over by hul . now find out what happened
to quality of that bread .
tooth paste like pepsedont is not of fine quality . I WARN YOU TO DO RESEARCH ON ALL COMPANY S PRODUCTS
SERIOUSELY USING PRIVATE DECTECTIVES .