Redeeming The Past

s one of the country’s largest corporations, ITC has always remained media-shy ever since the sordid events of the Nineties shook the very foundations of the company. Yet every now and then, it chooses to come out of its shell and provide an opportunity for a more in-depth interaction. Last month, it decided to engage with Forbes India. Chairman Y.C. Deveshwar and his entire top brass shared their perspective on ITC’s future with my colleague, Associate Editor T. Surendar, and me across Delhi and Kolkata and over video conference from Chennai and Bangalore.

Those who’ve tracked ITC’s fortunes through the decades will know the history of Virginia House in Kolkata’s Chowringhee, where ITC is headquartered. I’ve heard many business leaders pay lip service to serving India’s needs. But right from the time A.N. Haksar took charge as the first Indian chairman of ITC, the company has been a test case for redefining several modern precepts of management. For starters, can diversified conglomerates compete more effectively than focussed rivals in emerging markets like India? This is an issue that sounds almost as old as the hills, but in recent times, it has come into sharp focus as ITC took on Hindustan Unilever, the Indian subsidiary of the Anglo-Dutch multinational that almost made this country its second home.

ITC and HUL are a fascinating study in contrasts. In the last two decades, ITC has decisively moved away from the operating philosophies of its erstwhile parent BAT and struck its own path. HUL, on the other hand, has integrated closely with its parent and recognised that in a globalised world, there are obvious scale advantages of being part of a larger entity.

Today, the two organisations are in the midst of a bruising battle for control of the FMCG market. To my mind, there is no bigger battle between a local challenger and a formidable global giant. To add colour to the drama, Deveshwar is a big MNC baiter. He took on BAT and effectively kept them at bay. He now wants to prove that it takes local insights and knowledge to win in a major emerging market like India. HUL has all the textbook advantages of a dominant incumbent. So the real issue: Can ITC’s sheer determination and its humungous cash hoard break down the hegemony of HUL?

Perhaps not, but it will be a battle that needs to be understood in all its dimensions. We chose to sit on the fence and re-examine ITC’s preparedness. I’ve got to say this: Irrespective of the final outcome, there is nothing more exciting for a business journalist to witness a determined challenger get ready for an audacious assault.

So which side are you on? Do write in to share your thoughts.