c




V

   V

Bhai Ambadi passed away in Mumbai after a brief illness. He was 63. He left
behind an industrial empire worth several hundred cores of rupees, even though he
started his career at Thekary as an electrician at the age of 17. Ambadi was not
very good electrician, but excelled as a judge of people and was thus a good
motivator. He soon discovered that middle class families in his home state of
Kerala suffered from the vagaries of unreliable electric supply. Everybody read
newspapers in this near±100 percent literate state and was able to comprehend how
electric gadgetry could revolution their lives. However, the electric supply was
unreliable. There could be load-shedding or the voltage could fluctuate drastically,V
Damaging delicate and costly appliances, often imported from abroad. These were
costly items but hardly anybody had the technical expertise and skill to repair
these. Lastly, there were serious difficulties in importing spares and components.
Ambadi understood the problems and was clear that a fortune could be made if
someone came up with a dependable solution to these problems.V
Mr. Achuta Menon was a rich rubber plantation owner in the area. He
decided to move his family to Mumbai. Ambadi was employed to accompany the
household goods and help set up an electrical application repair shop in Mumbai.
Ambadi was given a place to stay in the garage. He became Bhai Ambadi in the
cosmopolitan society. Exposure to the environment in Mumbai coupled with
Ambadi¶s entrepreneurial bent of mind, quickly established the vastness of the
market for his ideas. Bhai Ambadi set out to develop a voltage stabilizer. The task
was completed in a few weeks, but Bhai Ambadi was honest enough to admit that
his device needed refinements, which were beyond his competence. Bhai
Ambadi¶s philosophy was that the product he put in the market must be the best
possible device.V
Mrs. Achuta Menon sent Bhai Ambadi on an errand to Kerala. Ambadi
found on returning from Kerala that he would have to share the garage with a
speactacled engineer, who smoked continuously. His name was Phadke. Bhai
Ambadi did not want the secrecy of his voltage stabilizer project to be
compromised and tried to create nuisance for the µintruder¶ by making fun of him
and calling him µDr¶ Phadke. Bhai Ambadi¶s jibs did not affect Phadke. This
impressed Bhai Ambadi. Soon Phadke joined in the development activity and the
two produced the µfirst World-Class voltage Stabilizer of India¶.V
Bhai Ambadi, with Phadke as the junior partner, launched Reliable
Electricals at the age of 24. The year 1960. Phadke looked after R&D, production
and other technical activities, while Bhai Ambadi handle finance, administration
and marketing. Bhai Ambadi¶s philosophy was not to compromise on quality under
any circumstances and make all possible efforts to meet all the requirements of theV
Customers. No order was ever to be turned down due to the required product being
beyond the range offered by reliable electrical. Many small producers of voltage
stabilizer soon hit dust because they could not hold out against Reliable Electricals.
Bhai Ambadi had a lot of faith in advertising and sale promotion. He wanted to
ensure that the quality of his product and the capability to service them reached the
customers. He had complete faith in his ability to succeed. This affected his
company achieving the highest employee. Productivity in the industry.V
The phenomenal success of voltage stabilizers resulted in Reliable
Electricals moving to other products. Battery ± operated inventors for supplying
electricity during load ± shedding, emergency lights, power supply systems and
many other products followed. Reliable Electricals also up service centers in all the
metros and sub- metros for repair and maintence of µANY¶ electrical appliance.
Outlets of Reliable Electricals were opened at new locations very frequently.
Addition of electronic appliances to electrical gadgets took place effortlessly and
smoothly. The turnover rose sharply because of this addition. The company
enjoyed a good reputation and virtually had no competitors. It instead on quality
product and service even in monopolistic conditions.V
Bhai Ambadi had financed the growth of his company through public
borrowing. He always paid slightly higher returns to his borrower and was very
prompt in paying back his creditors. This not only added to the rate of growth of
the company, but also improved its standing among customers and in the industrial
world. Soon Bhai Ambadi was among the top 100 richest men in the country.
Many management institutions were trying to analyses the phenomenal growth of
Reliable Electricals and the management philosophy of Bhai Ambadi in any way.
He remembered his humble beginning in the garage and continued to lead a simple
life.V
Reliable Electricals had to diversity into another area to accommodate the
sons of Bhai Ambadi. Appu, the elder son, continued with the old business of
Reliable Electricals, while the younger boy Jaykumar started another wing of
Reliable Electricals dealing with computers and communications. However, the
philosophy of the company remained:V
(a)VVVVV No compromise on the quality of products and services.V
(b)VVVVV Ensuring complete coverage of customers needs through a broad product
range.V
(c)VVVVVFaith in advertising and sales promotion.V
 (d)VVVVVPricing of the products and services to be in line with the product
specifications. This resulted in the product of Reliable Electrical being slightly
costlier than the average industry price.V
(e)VVVVVMake continuous efforts to reach out to newer customers by opening more
outlets.V
These strategic guidelines came under serious review within one year of the
demise of Bhai Ambadi. There were apprehensions in the commercial world that
things might change at Reliable Electricals with the passing away of its founder.
Both Appu and Jaykumar had imbibed the thoughts of their father, but both had
studied management at the best institutions. They their own convictions. Generally,
Appu felt:V
(a)VVVVV The products of Reliable Electrical were well established and expenses on
sale promotion and advertising could be substantially reduced.V
(b)VVVVV The quality of the product and services should continue to be the best
available in the country.V
(c)VVVVV Reduced expenses on advertising and sales promotion should lead to
lower costs. The company must ensure that its prices are competitive in the
market.V
(d)VVVVV The company must take advantage of competitive prices. It must continue
to availability of its product through widely dispersed outlets, there by
adding to sales volumes. Increased volumes should further lower the costs
and improve profitability.V
Jaykumar, on the other hand, was of the opinion thatV
(a)VVVVV Emphasis on the best possible quality should be given up. µThrow±away¶
concepts were being practiced in the developing countries. This was
necessary, since the technology changing very fast and produce became
obsolete too soon. The products of Reliable Electrical always had
considerable life left in them when these had to be replaced due to better
product becoming available through technological innovations.V
(b)VVVVVReduced costs due to the lower quality should lead to lower prices.
Competitive prices have become necessary to become competitive in the
markets, which are being opened to global competition.V
(c)VVVVVLarge volumes are essential for the growth of the company. Lower prices
and better availability of the product should lead t larger volumes. Increased
return due to larger volumes should be ploughed for technology upgradation.V
(d)VVVVVCompetitiveness and use of latest technology in the systems of Reliable
Electricals need to be well advertised.V
Both the brothers discussed their views like good professional. They decided to
refer the proposed strategy changes to µDr¶ Phadke, who had retired many years
ago. µDr¶ Phadke was well loved and respected by all the employees of the
company. He resisted being drawn into the arguments of the two Ambadis. He
finally accepted to give his advice (the boys called it µthe verdict¶) in four weeks¶
time. Caste yourself in the role Phadke and pronounce the changes needed in the
marketing strategy practiced by Bhai Ambadi during his lifetime of achievement.V
VV

3
 
 
. V
V