Vikram ?

Betal Case Study

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Vikram Betal Case Study

King Vikramaditya is the legendary mythological
figure of Ujjain- just 55 Kms away from IIM Indore.
This article is a tribute to him and IIMI.

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One day, a hermit appeared in the court of the great

Vikramaditya and presented a fruit to him. Vikramaditya
had the principle that any gift made to the King, is the
property of the subjects. So, he handed over the fruit to
his treasurer, asking him to preserve it in safe custody.

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The hermit came again the next day and presented
Operations Management another fruit to Vikramaditya, who in turn gave it to his Post a message
treasurer. This went on for many days.
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One morning, the hermit came to the court as usual and Quick Search
said, " Oh, the great Vikramaditya, how did you enjoy the Enter IIL company code
fruits I have been giving every day? Are they delicious? "
" Revered hermit, I believe that any gift that a King
receives, is the property of the people. So, I have asked
my treasurer to preserve them. "

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" My dear King, the fruits would have become rotten by
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now. Go and see them for yourself."

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Vikramaditya sent for the treasurer and enquired about

the fruits. The treasurer led him to the storage area.
What Vikramaditya saw there, was beyond belief. The
fruits were as fresh as new, and surprisingly, each one of
them had split into two and a dazzling gem of purest ray
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serene, was popping out of each fruit. Vikramaditya
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us your queries &
reported the miracle to the waiting hermit.
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" Your Holiness, it is all your grace. May I know how and
why you performed this miracle? "

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" Vikramaditya, I did tapas at the Himalayas for many

years and God has gifted me with these powers. I want
the benefits of these powers to reach people. I gave the
fruits to you, only to check whether you are really
concerned about the welfare of your subjects. You have

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Vikram ? Betal Case Study

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passed my test. I would now ask to perform a task. If you

do that, I would use all my powers to endow your
subjects with health, wealth and happiness."
" I am ready and willing " said Vikramaditya.
" Go in the southern direction. Twenty miles away, there
is the Sonpur forest. In that forest, on a peepal tree, a
corpse will be hanging upside down. You have to bring
that corpse to me."
" The job looks so simple! By the way, whose corpse is
that? "
" One you go there, you will realize that the task is not
that easy. In that corpse lives a ghost named Betal. With
Betal in my custody, I would help you to realise the
dreams for
your subjects. "
" Can I start today? "
" New Moon day is the auspicious day to start this
activity. One condition. you cannot take anyone else with
you. You have to go all alone. I wish you all the best."
On the next new moon day, Vikramaditya started on his
mission. He reached Sonpur forest, and found the peepal
tree. On one of its branches, the corpse was hanging
upside down. Vikramaditya expected the corpse to offer
some resistance. But, nothing like that happened. He
lifted the corpse, placed it on his shoulder and proceeded
towards his capital.
Vikramaditya would have gone some distance.
Betal asked. " Who are you ? Where are you taking me?
"
" I am Vikramaditya, the King of Ujjain. I am taking you to
my capital."
" What for? "
" I have been ordained by a holy hermit to take you to
him. By the way, who are you?"
" I am Betal. O King, I have heard about you. I know that
you are a just ruler. Let us come to an agreement. I am
ready to be carried by you but on one condition."
" Tell me Betal, what is that condition? "
" Vikramaditya, carrying me and walking twenty miles, is
arduous for you. To reduce the strain, on the way, I

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would narrate you an interesting case study. At the end

of the narration, I would ask you a question. If your
answer were right, I would willingly give myself up to the
hermit. If you interrupt my narration or if your answer is
wrong, I shall split your head into pieces."
" Oh, it sounds like a GD at IIMI. But, I am ready Betal ",
said Vikramaditya.
Betal started his narration. Vikramaditya began to listen
with focus, almost matching the undivided attention given
by first year IIMI students, to Prof. Kuldeep Singhs
orientation-lectures.
In the nearby Indore City, there is the famous Indian
Institute of Management headed by Director Dr. Rajan
Saxena. I have a great affinity for the students there, as
the boys and girls there, are also nocturnal creatures like
me. I do not know what they do during the rest of the
time, but the feverish activity for the day starts only when
the clock strikes twelve in the night and we ghosts get
active. Some days, I visit their campus in the night.
During those times, I have become friendly with some of
the boys and girls there. They have an awesome intellect
and a razor sharp mind. Sanjeev Kapoor is a close
friend of mine and he is in the second year. He has been
given a case for discussion tomorrow.
Now, I will tell you the brief outline of the case.
Reliance Commercial Corporation was started in 1958.
The Company went public in 1977. After 25 years,
Reliance Industries Limited is Indias largest private
sector company, with gross turnover of Rs 57, 120 /
crores, gross profit of Rs 8,658/- crores, net profits of Rs
3,243/- crores, net worth of Rs 27,812/- crores and total
assets of Rs 56, 485/- crores. As of 31st March 2002, the
market capitalization is Rs 42, 000/- crores. Reliances
turnover represents roughly 3% of Indias GDP. Reliance
is Indias largest exporter, with exports Rs 11, 200/crores, reaching out to over 100 countries.
Reliance has the distinction of becoming Indias first
private sector company, in the internationally tracked
Fortune Global 500 list of the worlds largest
corporations. Based on the data of 2002, Reliance
ranks :
l

l
l

amongst the top 200 companies in terms of net

profits
amongst the top 300 companies in terms of net
worth
amongst the top 425 companies in terms of assets
amongst the top 500 companies in terms of sales

Reliance is amongst the top Asian Oil & Gas and

Chemical companies.

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Reliance has grand plans for the infocom sector. The

Group plans to invest over Rs 25,000/ - crores in the next
five years and emerge as the telecom colossus. It has on
its anvil, fixed line, limited mobility and mobile services.
The target subscriber base is 1.5 to 2 million.
Competition in this sector is tough. Tatas, Bharti, Bharat
Sanchar Nigam (BSNL) and Hutchinson have a head
start. Except Hutchinson, all the others have the same
integrated model: fixed line, cellular, Wireless in Local
Loop and broadband networks. The overall market also
looks dicey. According to the Cellular Operators
Association of India, the accumulated losses of the
industry are likely to touch Rs 7, 700/- crores, up from Rs
6, 900/- crores last year. The entry of Reliance would
bring the tariffs down, further sending the profits
southward.
In this scenario, is Reliances grand foray into infocom
strategically right? Does Reliance have the strengths to
emerge with glory from the battle, or is Reliance, goaded
by its success in Petrochemicals, entering a totally new
territory, to meet its Waterloo?
Sanjeev Kapoor wants to participate in tomorrows case
discussion. All his class mates feel that the strategy of
Reliance is not right. Their plank of argument is based on
core competency theory propounded by management
guru, Dr. CK Prahalad of the University of Michigan, Ann
Arbor. As per this line of thought, Reliance has notched
up laurels by confining itself to the backward integration
route of Textiles Fibre PTA Refineries and
Exploration. Infocom is a totally new business for
Reliance and so their strategy of infocom foray is wrong.
They are supported in their view by the interview given by
Dr. Nitin Nohria, Professor of Organisational Behaviour at
Harvard Business School to Corporate Dossier
( Economic Times ) on 4th October 2002. As per Dr.
Nohria, " In a bid to grow its core business, a company
should try and stick to its basic business model.
Changing it would be a mistake, as many studies
including our recent study of Fortune 100 companies
have pointed out."
People do get tempted to do this, in order to grow fast,
and that is when they get into trouble. Maintaining focus
and continuously looking for related areas to grow into
could provide an answer. The problem is, people in India
dont think this way. If one sector looks a bit saturated,
they target a brand new sector for growth. Reliance
expanding into petrochemicals, an area upstream in the
value chain, was a good idea. But, now, the companys
heavy foray into telecom looks a bit strange, because its
a completely different area. I am less optimistic."
Vikramaditya wanted to talk in between. Then he
remembered that Betal would then shatter his head into
pieces.
Betal now said, " Vikramaditya, the case data is over. I

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am coming to the question now. Listen carefully. I want

my friend Sanjeev Kapoor to do CP (Class Participation
for the uninitiated) tomorrow and impress the Professor.
His argument would make an impact, only if his views are
contrary to the rest of the class and he supports
Reliances business model of getting into infocom in
such a big way."
Vikramaditya thought for a moment and started his
analysis.
" Betal, I understand that your friend Sanjeev Kapoor is
looking for an analysis based on
lateral thinking. My thought process is like this. I
strongly believe that, Reliance is fully equipped to get into
infocom and make a great success of it. Dr. Nohria, as
well as other students argue that Reliances business
model is backwardintegration of Textiles Fibre PTA
Refineries and Exploration. I think that their core
competency is not petrochemicals, but the concept,
management and the on-time implementation of high
tech projects of international dimensions. Infocom is such
an area and Reliance would realize its ambitions, to
emerge a leader in infocom too."
Betal gave out a demonic laugh and said, " Vikram, you
are as sharp as those IIMI guys and gals. Your analysis
is brilliant. I agree with you. I would convey this to
Sanjeev. Kapoor. Only then I would come along with you
to your capital.
Akila Moorthy,
IIM Indore
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