“Once the last tree is cut and Last River poisoned, we will find that we cannot eat our own

money”

Explaining Organic and Inorganic growth

Organic Growth: A growth which is achieved and fostered by company’s own business activities.

Company’s efficient management enhances its growth rate and sustainability is termed as organic

growth also known as internal growth

Inorganic Growth: A growth which is achieved by taking over a counterpart, merging with alike

business houses or acquiring unrelated corporate business. The growth is known as external

growth. Growth is generally measured in assets, profits, revenue. Most business establishments

often face this challenge of growth and flourishing their respective business functions either

organically or inorganically. Inorganic growth brings with itself following positives

1. Delivering unique value prepositions

2. Exploring Marketing channels and Brand Building

3. Competence on Growth Strategies

4. Overhaul of organization’s DNA

A business owner or a corporate house if wants to develop and grow as planned and keep at bay

from the deviations must adhere to the statutory guidelines and requirements necessary for

his/her establishment to run in a credible and scrupulous manner which fits in a statutory

framework of a country. If we are equally aware and scream for are fundamental rights we

should equally be vocal and aware of our fundamental duties. Adhering to both the parameters

helps any citizen to create a much needed yardstick to measure and evaluate his deeds which are

favorable and at times unfavorable for the country as a whole. Also for a business to grow,

competition plays a vital and essential role in paving a sustainable growth. Much said every

business establishment or corporate house deals with enumerable risks and at the same time

combat the perils of such risks too. Risks are inevitable in a business and are inseparable but can

be mitigated and scaled down so as so cause minimum damages which will not hamper the

functioning of the business processes.

Risks can be differentiated into internal and external. Internal Risks as the name suggests are

those risks which creep up due to actions within the organization, there occurrence is more likely

predictable and is absolutely controlable and exact lateral image is External risks which are

dependent on happening of an event which is external to the organization and there is high

probability of not discovering the extent of risks associated with such developments.

Internal Risks

1. Human Resources: It is the people who matter on and off site. Managing a vast work

force is an essential component in business growth and also contribute to high probability

of risk to any organization. E.g.: Maruti, Manesar fiasco.

2. Technological Factors: Technological aspect also contribute to the internal risks faced by

an organization. Break down and up gradation of technology are both lethal for any

organization. It can make or break. E.g.: Maruti Factory was on a standstill for 3 days due

to break down of one of the heavy machinery at one of their developments.

External Risks

1. Economic factors: It gives a macro preview of existing market forces and relevant risks

associated with it. Issues like unemployment, inflation, trade cycles all account for

uncontrollable risks which organizations face. Predicting such factors and tweaking them

as per will is next to impossible.

2. Political Scenario: Adhering to the policies framed by the government in power paves

roadmap for one and all. Political scenario and changes in political setup may cause

communal unrest, civil war, hostilities with the neighbor countries surely affect the scale

and revenue count of any organization.

3. Natural Phenomenon: Uncalled for natural disaster where one has no control whatsoever.

Such events cause loss to life and property. Noted examples are of Fukushima scare and

Gujarat Havoc.

Prescribed manual mode of risk aversion involves:-

1. Risk Identification

2. Risk Evaluation

3. Plotting the alternatives

4. Choosing the best alternative

5. Evaluation of such alternatives chosen

It becomes evident that risk can be reduced but not eradicated. The art of anticipating nature and

causes of such risk potential activities along with implementing strategical and tactical tools will

eventually help fostering of any business enterprise.

According to the given scenario of AKH diversification spree following evaluation models can

be applied while entering into different ventures.

I. STRATEGICAL TOOLS AVAILABLE FOR EVALUATING

1. Performance Prism

The concept of performance prism is based on the belief that those organizations aspiring

to be successful in the long run , within today’s business environment have a clear view

of where they stand, who are their stakeholders and their expectations, strategies to be

incorporated to meet such expectations, in a nutshell for inorganic growth the company

which is acquiring the other company mainly focus on performance of the organization

which further includes attributes such as employee loyalty, customer profitability, long

term investments, clear business model. Inorganic growth can be achieved by looking the

performance of a business unit via prism which subsequently bifurcates one performance

standard into several parameters, hence evaluation becomes more meaningful for

inorganic growth.

2. Meta Plan

Meta Plan is Plan of Plans. It is used to frame and evaluate communication model via

which responses, opinions, suggestions are developed and a consensus is reached.

Metaplan is used in case analysis, creating, collecting, structuring and sorting of plans

and data within, setting priorities and analysis of cohesiveness. Meta plan helps in

avoiding long drawn out, messy, inconclusive and time wasting process which often help

in evaluation.

3. Portfolio Structure

Creation of ideas, their implementation and evaluation becomes important for growth as unless

the target is not set, the same cannot be achieved.

4. Content of Novelty

a. Program innovations: Innovation in product development including costs involved,

revenue to be generated and target customers with evaluating customer value factor.

b. Technological innovations : to improve the product standard and reduce additional

maintenance costs

c. Organizational Innovations: Introducing new work forms and styles so as to increase

the interest level and cooperation among the work force.

Define Objectives

What Capabilities are required

What Targets to Achieve

DevelopmentSelectionI D E A T I O N

d. Managerial Innovation: Improved relationships between the managers and the

subordinates and increasing the role of the subordinates in descion making and

collective resource utilization.

e. Methodological Innovations : introducing new management methods which helps in

realizing the conceived ideas of growth

5. Kano Model

Kano Model is analysis of preferences sought by the customers. The model can be

applied in identifying customer needs, functional requirements, concept development and

analyzing. The model divides the product attributes into 3 categories: Threshold,

Performance, and Excitement. A competitive product meets basic attributes, maximizes

performance attributes and include many excitement attributes.

H

L

KANO MODEL

6. Kepner Teronge Matrix

Excitement

Threshold

Performance

The tool is meant for gathering information, prioritizing, descion making and evaluating

it.it is also called root cause and descion making method. This is a detailed and complex

method for descion making as it is a step method of solving problems and analyzing risks

and potential risks.

The Kepner Tregoe analysis is performed in following steps:

1. Prepare decision statement with desired result and required action

2. Define strategic requirements, operational objectives and limits

3. Rank objectives from the most to the least important and weighting them

4. Generate list of alternative courses of action and keep only those that are obligatory of

desired result (all other should be eliminated)

5. Score alternatives against each objective on a scale of 1 to 10,

6. Multiply the weight of the objective by the satisfaction score to come up with the

weighted score

7. Steps 5 and 6 has to be repeated for each alternative

8. Choose the top three alternatives and consider potential problems or negative effects of

each one

9. Consider each alternative against all of the negative effects,

10. Rate chosen alternatives against adverse effects, and score them for probability and

significance

7. Pareto Analysis – 20:80 Rule

Pareto Analysis is the often stated as 20:80 rule that helps to identify 20% most important

problems to solve 80% of other non-important problems. It is an important tool for

evaluating cases which have many courses of action. Pareto Analysis simple yet effective

way for analyzing alternatives

Pareto analysis is simple to use:

1. Listing all relevant problems and available options

2. Grouping options that are solving the same larger problem

3. Applying an appropriate score to each group

4. Working on the group with the highest score

8. SWOT/TOWS Matrix

The most common matrix for evaluation is SWOT Analysis and TOWS Analysis. It helps

in analyzing key forces running inside and outside a particular organization where in it

analyzes Strengths and Weakness which are internal to an organization, Opportunities and

Threats which are external to the organization. TOWS Matrix analyses Threats and

Opportunities which are internal to an organization, Strengths and Weakness which are

external to an organizational.

II. ECONOMIC VIABILITY OF THE PROJECT

India was the one of the privileged countries which was insulated from global economic

breakdown happened in 2008, post subprime lending crisis in the USA. The very pillars which

enables India growth were made strong by the authorities in charge if not the politicians by

incorporating right policies at the right time so as to steer India from that rough patch which

world economies faced that time and many are still experiencing the repercussions. Growth of

any country is directly proportional to its working hands and skill set possessed by them; be it

educational, vocational or artistic. Skill set makes an individual sell his abilities like hot cakes, as

AKH group is planning a heavy investment in skill development which I assume they will utilize

in their IT business enterprise is a welcome call for the manpower of India.

India is one of the countries of the world where working age population will be far in excess of

those dependent on them , as per World Bank , the same will continue till 2040. This has been a

high degree potential source of comprehensive strength for the national economy only if we

value add to the available skill sets of the working age group. Skill development can be

transformed into a national priority by AKH Group by increasing the investment worth multi

folds. Both State and Central level governments in power shall favor AKH Group formation of

Skill Development missions for long term.

India is a country blessed with resources on all four quarters of its dimension and work force 70

crores plus out of 120 crores plus is all bonus to utilize and generate assets and revenue from the

existing assets. Skill development makes a raw product into a finished product which is ready to

be utilized in corporate arena so as to increase the returns from money invested in him/her

exponentially. The concept of outsourcing is a boon for massive employment seeking youngsters

in India. Developing the right skill set will enable AKH group to tap more work from offshore

companies and help their employees, customers and self-grow. The biggest drawback which

country like India faces today is lack of opportunities. Excess of resources are futile if they

cannot be channelized and harnessed well. As discussed there is a dearth of employment

opportunities as designated skill set among the ready work force is missing hence growth is

invisible. In order to curb this menace of unemployment and imparting and making Indian

individuals skilled is a welcome call and government authorities should give their thumbs up for

the same.

III. CULTURAL ASPECTS

As AKH Group is also investing in consumer products in the area of Primary Health with new

products such as Acai berry juice and AV hand swipes (assumed) with their prevailing basic

products associated with primary health. As it is said, only jewel which cannot decay is Health. It

is utmost important to thrive in a healthy environment as in healthy environment thrives healthy

body thrives healthy mind thrives healthy soul. AKH Group initiative to invest in Primary Health

in India over and above their existing products is a welcome call for the citizens as it is a win-

win situation for the masses in the long run.

Every 3rd person out of 10 in India is obese that is 33.33% which is indeed an alarming number.

As Asians are settling into a western routine the rate of obesity among the young population is on

a shoot. Also culture of using hand swipes is not prevalent in India which means the market in

untapped comprehensively if not fully. Hand Sanitization becomes important to keep healthy and

combat day to day unavoidable transportation of germs from one location to another. Indian

Culture plays a vital role in increasing the frequency of people dropping under this criteria.

Hence it becomes all important for AKH Group to come up with a solution to this problem rather

than being a mere spectator and not contributing in nation building.

Acai berry juice is a product which will cater to the problem of obesity which 33% urban

Indians are facing with which include age groups right from school going kids to office going

work force. The Drink is manufactured with high R&D which was only enabled by AKH

Group’s inorganic growth in past few years. The hand swipes business is comparatively new to

the semi urban and rural population of india and the same untapped market is the target section to

enter into the market of Primary Health. Imbibing cultural change shall bring the desired output

for AKH Group and India for its holistic development.

3 driving questions which AKH Group should emphasize upon are

1. Is India as an emerging market; a threat or an opportunity?

Opportunities:

Rise in purchasing power

Easy Inorganic growth

Threats:

Cultural Differences

Cut throat competition

Infrastructure

2. What makes India an attractive market?

Saturated Developed economies

Low wage cost

Growing Manpower

Increasing middle class

Answering such potent questions will certainly provide a full proof situational analysis to

where we are, where we want to be and how to reach there.

ReferencesOrganic growth vs Inorganic growth. (n.d.). In Focus, 69.

Prof. Dr. Miroslav Rebernik, B. B. (n.d.). Idea Evaluation Methods and Techniques. Creative Trainer, 69.

Timberlake, L. (1987). Only one Earth : Living for the Future. London: BBC.

www.business.gov.in/businessportalofindia/mergers&acqusitions. (2014). Retrieved from www.business.gov.in: www.business.gov.in

www.tradingeconomics.com/india. (2013, January). Retrieved from www.tradingeconomics.com.

www.tutor2u.net/threewaystoevaluateemergingmarkets. (n.d.). Retrieved from www.tutor2u.net.