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Topic: Vijay Mallya – Cheers!!! Posted: 28/Oct/2006 at 6:04pm
Vijay Mallya – Cheers!!!
Can you tell us something about your education, and when you got into business?
I passed out of La Martinere in Calcutta after my senior year at Cambridge in 1973 and in the six months gap before results were out my father put me in the business to work as a trainee. I was sent to Bihar and UP, etc as part of
the training. I then joined St. Xavier.s in Calcutta for my Bcom exam.Lectures were 6am to 1030 everyday, after that I.d go straight to the office and work a full day. So, I was thrown in the deep end from a very young age.
What do you base your vision for UB group on?
Vision is the fine balance between the practicality of a dream on one side and the reality of being able to achieve it on the other side. Vision should be practical, vision should not be a pipe dream, it should reflect the highest of aspirations yet it has to be firmly grounded in reality. Having said that, I don.t
mean to suggest that people should be conservative. Vision must reflect reality, vision should be aggressive, vision should be designed principally to outperform the market and outperform the competition and at the same time should be achievable.
I am in the fast-moving consumer product business. I have taken a lot of pain to understand my product and my product.s relationship with the consumer of my product. This is not a matter of just buying and selling or just vanilla
marketing. I look at a consumer product, particularly a product that is consumed, as having a relationship with the person consuming that product. I therefore believe that brands are not things that are inanimate; I think that
brands are like animals, brands have life. It is important therefore to constantly reinforce the relationship between the brand and the target group. Once you have succeeded in establishing a relationship between the brand and the target group, you can then look at various other research led numbers to see how your target group will expand, how consumption patterns will evolve and therefore you can sit back with all these different ingredients and say I have a vision.
How does your brand strategy evolve?
We have a continuous program of understanding the consumers because those who do not focus on understanding the consumer will never get it right. Consumer.s needs are often changing and evolving which immediately puts pressure on any company manufacturing FMCG products to change with the evolution of the consumer.s needs.
In my group, we trace the evolution of my own products and I evaluate them against the evolution of the consumers needs. What was ten years ago will never be ten years hence. Indeed what was ten years ago is very different
from what is today. Just yesterday I was reviewing one aspect of my brand portfolio and I looked at that same brand what it was 20 years ago, ten years ago, what it is today and what we are doing today to revamp the brand, to cater to the changing expectations of the consumers for the next ten years, this is the process of evolution and change.
How important is innovation in your business?
What is it that differentiates us from others? I believe one critical element of vision is innovation and I am a very firm believer of innovation whether it is innovation in packaging, in brand equity and consumer pull, in generating trade push, in the product itself and quality of the product. The airline, of course, has a bit of history. I was the first to launch an airline
called UB Air, but I shut it down because the environment was not conducive. But it is not a foolhardy business any longer with 27% growth in passenger traffic in one year. Yes, it is capital intensive but it is the only business where the assets are moveable. If an aircraft is not flying in India, it can fly in Australia. It makes for a good business case.
My vision was brand new aircraft, a never seen before in flight experience, connectivity, frequency, all this and use of the modern technology to cut costs and be more efficient. Never before in the history of Indian aviation history has any airline offered an in flight entertainment system for every passenger on board, there are individual TV screens for everybody.
Kingfisher ordered a number of A-380s, where will it land in India?
A-380s are not only going to land but the Airport authority of India has actually built five dedicated parking spaces for A-380s, two in Mumbai, three in Delhi which are going to be ready by June 06. I have applied for all the five parking spaces, I have five 380s. Ours is the only Indian airline that has ordered A380s and now I don.t have parking problems also.
Your level of responsibility is quite large from the number of companies you handle; so the employees become a very important factor in terms of running businesses. What is the most important factor in keeping them motivated?
I have publicly stated on many occasions and I continue to state that people are our most precious asset. You may have the best technology, the best hardware, best software, all the money in the bank, but if you don.t have good people, you are stuck. So I have focused on people a lot over the last
20 years. I am very happy to say to you that senior management-wise, UB has perhaps no attrition, or the lowest attrition among any company in India.
You take all the people, who are heading our big businesses, they have all been with UB group 20 years plus, reporting to me. I give them the ability to make judgements, to make decisions, and I empower them truly. I encourage them to take decisions, I guide them and forgive them if they take a wrong decision, in other words I have removed the fear out of them and have empowered them.
The second thing is that I have given huge rewards for performance and the third thing is that they know that I am a very hard task master but a task master with a heart.
Do you have a hands-on approach to managing your businesses?
I lead from the front. I don.t sit in an ivory tower in my office and make others work, I lead from the front. I go down to the streets , I go and visit the same retailers to do what the salesman is doing, I will go to the same manufacturing unit and sit on the same production line as somebody else is
doing. I also have some rules - I don.t keep a piece of paper on my table for more than 24 hours - so whatever be my work load - I will sit in the office and clear the whole bunch before I go to sleep. And people have come to I appreciate this that if I make them work hard, I work hard as well.
You are often perceived as having a larger than life image because of your flamboyant lifestyle?
I could not advertise, I had restraints and constraints and over-regulation everywhere so at the end of the day I lived the brand, I became the biggest brand ambassador myself and that was exciting. To be able to build a brand that denotes lifestyle and today lifestyle is very relevant for modern India. All youngsters today want lifestyle, they want to wear good clothes, they want to spend on food, drink, entertainment - so a lifestyle brand like Kingfisher is all
the more relevant. What I started 25 years ago will be far more relevant for the next 25 years.
Looking back, what is one mistake you made which you shouldn.t have, or a decision which could have been taken otherwise?
When I acquired Best & Crompton Engineering. That was one acquisition that I couldn.t make work because of the culture of the people in that company and the diversity of the business was so complex that I couldn.t make it work.
What were the key challenges you have faced over the years?
When I took over UB after my father died, I was a youngster. I lived like a youngster - I liked fast cars; I liked to go to horse races, etc. I did things which other people never did; they were lot more conservative so whole press campaigns started about me being a playboy, partying too much, etc. and that I would drive UB bankrupt. As a result, the banks got very nervous so UB could not access funds very easily, it became a big problem. I tried to be as convincing as I could but the bottom line is that the company performance spoke for itself. As much as the media used to bash me and try to put me down as a playboy, the company’s performance kept growing better and better. Ultimately performance counts, so that is where I have been focusing.
How do you manage your time between work and family?
Everybody around me realises that my work is what keeps me going, that is the
single most important part of my life, so I have enough space, nobody bothers me. My eldest son is at a university in England, my daughters are in America. They are growing up - so I like to see them but the good point is
that for three months in the year during summer they come to India so I try to spend as much time with them. It is easier for me, otherwise traveling back and forth to the US takes a lot of time so I now try to go once a month to see them and during that time I also have a look at the US business.
Apart from business, you have political interests as well. Do you think it is wise to mix business and politics?
I really wish for the sake of India that many more youngsters, many more people from business would get into politics, that.s when you will really start seeing big changes in this country. The trouble with career politicians is that
most tend to be corrupt because their only means of livelihood is politics. Somebody like me needs nothing, I have my business and everything so I will not take anything out of politics or take advantage of being in parliament.
Source:CLSA
Edited by basant - 28/Oct/2006 at 6:07pm
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Posted: 29/Oct/2006 at 8:56pm
Thanks Basant,
The interview with Mr Mallya is quite interesting.
When I was young, like others I was thinking that whatever Mr Vittal
Mallya made during his life time, will be whistled away by Mr Vijay Mallya v in no time. When he acquired Best & Crompton after selling some of his properties, I again thought that the time has come.
But everybody proved wrong. Vijay Mallya proved to be more successful than his illustrious father. Recenetly I visited Goa and could see the Kingfisher Villa of Vijay Mallya near Fort Aguada in Goa. The grandeur is seen to be beleived.
I also read an article about Kingfisher Airlines and its plans in the last edition of Business India. It has shown how KingFisher Airlines which started as a budget airline is now re-positioning itself with a lavish Business Class also. The food they are serving to business class passengers, are class apart, and the food itself is attracting a lot of passengers in the business class.
Worldover, there are a few airlines, which has rewarded highly to its shareholders. Let us see to what height Mr Mallya takes KingFisher Airlines.
Great interview. Thanks a lot for posting this Basant, gives an insight into his way of thinking. BTW, how do you manage to get hold of all this(you had even posted one interview with Raghav Behl) You mention source as CLSA, but how do you get it from them? Anyways, please do continue posting such interviews of the corporate leaders, its very interesting to read them and understand their views.
He mentions that his eldest son is in England, but Siddarth Mallya is actually in India for last 8 months, learning the ropes of UB, working as a trainee. So i'm wondering if this interview is an old one?
The reason i'm asking is because in the last few days, CLSA has been gobbling up UB group shares though open market and bulk deals - just on Friday alone they bought huge shares of Mcdowell, UB and UB holdings - all through bulk deals. So i'm wondering if they know something that we dont!
I also read the story on Kingfisher airlines in the BusinessLine magazine, and it gives me the impression that he really knows what he is doing. Time will tell...
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Posted: 30/Oct/2006 at 3:19pm
This interview was taken before February 2006. Yes they are all from CLSA.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Posted: 31/Oct/2006 at 7:47am
this is not vijay mallyas best interview the best interview is the
mcdowlls sept qrt results which are simply amazing.he has been so
serious about restructuring his liquor business and the pains he took
to do it is now paying off sales are 1440crs net is 67crs like somebody
said on this website maybe united sprits is another itc in the making
well it may just be no wonder clsa was buying the whole of last week.
understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
yes i agree. First he turned around UNITED BREWERIES, and now he is doing the same the MCDOWELL(UNITED SPIRITS). Lets hope he continues in the same mode in future.
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