Importance of Strategy- A good story

One day, there was a blind man sitting on the steps of a building with a hat by his feet and a sign that read: "I am blind, please help".

A creative publicist was walking by him and stopped to observe he only had a few coins in his hat, he dropped a few more coins in his hat and without asking for his permission took the sign, turned it around, and wrote another announcement. He placed the sign by his feet and left.

That afternoon the creative publicist returned by the blind man and noticed that his hat was full of bills and coins. The blind man recognized his footsteps and asked if it was him who had re-written his sign and he wanted to know what did he write on it? The publicist responded: "Nothing that was not true, I just rewrote your sign differently".

He smiled and went on his way.

The blind man never knew but his new sign read : "TODAY IS SPRING AND I CANNOT SEE IT".

Change your strategy when something does not go your way and you'll see it will probably be for the best. Have faith that every change is best for our lives.

Ranbaxy Deal: It is two way street.

The promoters of Ranbaxy Laboratories are not the first to sell out of their company nor will they be the last. But this remains the only case so far of a successful, listed, globalized enterprise with national leadership in a growth industry deciding that it does not have a bright enough future on its own, and that it needs to be a part of a larger corporate entity. It therefore underlines the point that even as Indian companies are stalking the world picking up companies like Corus, this is a two-way street.

Many will feel a twinge of regret that a company that has been a symbol of successful Indian entrepreneurship in a research-intensive field has decided to throw in the towel, for this is the flip side of Indians celebrating corporate acquisitions overseas (and Ranbaxy has done its share of them). But the time may have come to set nationality questions aside, and to look at business rationale with the same clinical detachment with which Malvinder Singh has put Ranbaxy's future ahead of his own natural desire to hold on to his corporate inheritance.

The issues that Ranbaxy faced, and which it hopes to solve by becoming a subsidiary of Daiichi Sankyo, are technical and financial. On the technical side, it needed a stronger product pipeline. Implicit in the change of ownership is also the admission that the company's strategy for research and generics has run into a headwind, and therefore that the game has to be re-invented. Financially, the company has been burdened by the prospect of having to redeem $400 million of convertible bonds issued in dollars. On the Daiichi Sankyo side, the company gets market entry into some 60 countries, a strong production base and a low-cost research capability.

It seems to be a time of M&As, it is quite interesting to follow the strategy behind such deals.