United Spirits Making Acquisition an IT Success : Vijay K. Rekhi
Vijay K. Rekhi
President, United SpiritsUnited Spirits, the flagship company of the UB Group, recently acquired the Scottish spirits maker Whyte & Mackay in what was the biggest global buyout for the Rs 2,712-crore liquor company. The acquisition reflected its renewed desire for growth and came two years after it bought out its nearest Indian competitor, Shaw Wallace. But if United Spirits is going to realize potential synergies in its quest to become the world's leading maker of alcoholic beverages, it needs to meet integration challenges head on.
Interview Questions
- Q.CIO: Over the past two years, United Spirits seems to have realized a great part of its vision, thanks to acquisitions. What next?
- Q.Is it a challenge to integrate the new entities?
- Q.Can you describe how United Spirits approached its periodic restructuring that has typified its growth story in the 21st century?
- Q.The choice of an inorganic growth path must have brought up challenges, especially in HR and government regulations…
- Q.What difference has the SAP implementation made?
- Q.What is the role of the CIO in management decisions at United Spirits?
- Q.What are your expectations of IT as a force to drive business at United Spirits?
- Q.Is United Spirits ready for the global market?
- Q.As a global player, United Spirits needs to comply with global regulations. How are you meeting this challenge?
Full Interview with Vijay K. Rekhi
United Spirits aspires to be the world's largest player in the alcoholic beverages domain. The liquor industry is at the point of vertical take off. Different parts of the world are at various levels of the experimentation curve in their search for new flavors, forms, etcetera. India, particularly, is experiencing a new high in the premium spirits segment - browns, with whites not too far behind. United Spirits has always been a leader. It will continue with this spirit of leadership by introducing new products to meet novel and emerging market needs. It will also innovate further to engage consumers, and introduce a wider and deeper global portfolio.
Our history of acquisitions dates back to the 1960s. This has been accompanied by an intense evaluation of corporate and brand values, and perceptions to ensure a harmonious partnership. Acquiring new entities - brands that are leaders in their own space - has catapulted us into further positions of strength. The personalities of the acquired entities are distinct and yet complement ours. Hence, we view this chance to take yet another leap in reaching out to new consumers with compelling brand propositions as an opportunity - not a challenge.
The integration process has been gradual. Our team leaders go through extensive discussions with employees to cascade organizational values and vision. Reflections of this integration can be found in our advertising campaigns, design templates, internal communication, thematic campaigns, etcetera. Considering the role of acquisitions in our business strategy, integration is an ongoing process.
Government regulations for the spirits industry have largely remained unchanged for the last few years. We abide completely with the rules laid down for communication, packaging, taxes, tariffs, etcetera. Like any other business, we have factored in the constraints of the market and have evolved our business strategy with a fine balance between market needs and market regulations. We are an employer of choice in the spirits domain. Our employees go through a constant process of learning and receive multifaceted exposure. As the Indian economy has evolved with the opening up of several new sectors including retail and IT, we, like most other companies, are not insulated from this phenomenon. However, there are as many people outside United Spirits who are looking for a career break in this landmark company. So, it isn't really a major challenge for us
IT is the backbone of our future initiatives. Our experience with the SAP implementation is nothing short of their promise: minimizing risk and maximizing opportunity.
The CIO's role is critical. It is the only way in which United Spirits can define IT teams and systems. From an internal perspective, it is important to manage the growth of manpower, on the one hand, and still ensure connectivity as well as the cascading internal communication campaigns. The IT role also meets the needs of our external partners, investors and consumers to understand the direction of our future growth.
The greatest story of an FMCG leveraging the e-space is the e-choupal initiative. United Spirits is not far behind in leveraging the e-space to bring our employees to a common platform, cascade our vision, mission and values and facilitate the evolution of a common culture, a common language. Externally, today the consumer is more e-savvy than ever. Hence, at the brand level, we have several initiatives underway.
As we stand today, we export to 59 countries. We have established operations in China, Russia and now in Scotland. We are already a global player.
We work with the laws of the land. In whichever country we take our drive for expansion, we will ensure that we comply with local regulations.
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