CHANGE brings opportunities. But change can be confusing too. Management gurus opine that although diversifying into other areas is good, it must be related to one's core business. Else entrepreneurs will have to incur high costs and run the risk of failure.

Fortunately, for India Inc, a number of Indian entrepreneurs decided to ignore theories spun around management mantras like 'core competence'. And just as well, for if they had trodden the beaten path, India may have missed out on a few of its biggest success stories. Such has been the success witnessed by these entrepreneurs, that their vision and courage has not only made them big in India, but also given them a global footprint.

Here, we take a look at ET500 companies which shifted focus from their core businesses and moved on to excel in uncharted territories. Most of these success stories can be attributed to the hard-nosed attitude of their promoters to smell new opportunities and move fast to grab them.

The first company on our list is none other than the Big Daddy of India Inc, Reliance Industries (RIL). It started its business operations in 1966 as a small textile manufacturer. Now, it ranks among one of the world's largest oil & gas companies and has proved that if done in the right matter, diversification pays huge rewards.

Though RIL continues to manufacture textiles, this division doesn't contribute much to the company's fortunes. However, RIL is not sitting on its laurels; instead it continues to search for new growth areas by making bets on retail, for instance.

Opportunity comes once in a lifetime, they say. That was exactly what happened with Suzlon Energy. Frazzled by erratic power supplies and rising energy costs at his textile mill in Gujarat, Tulsi Tanti set up two windmills in 1990 with turbines imported from a German company. The rest, as they say, is history. Suzlon is now one of the world's fastest-growing wind-energy equipment makers and has sets its sights on reaching the top. Mr Tanti's foray into wind energy was by sheer chance. Seeing the huge potential in that sector, he decided to exit the textile business and set up a company specialising in wind power solutions.

It may be interesting to ponder over what would have happened if RIL and Suzlon had not moved away from textiles. The current state of the domestic textile industry is not very encouraging. Even after the removal of the international quota system on textile exports, the revenues of India's largest textile manufacturer, Arvind Mills, are just about 10% of that of the ET500 topper, IndianOil. With the Indian economy growing at a furious pace and the opening up of new opportunities, there exists a great potential for businessmen stuck in sunset industries to radically overhaul their business.

Wipro is another company that has made the transition rather smoothly. Azim Premji's initiative transformed a family-run vegetable oil firm into a major IT services and products supplier. If Wipro had not shifted to IT, it wouldn't have been able to get international accolades. One wonders what bearing this may have had on India's IT industry.

But perhaps, the perfect chameleon has been Max India, which has metamorphosed from one avataar to another. It started off as a pharma company, then went on to acquire a telecom licence. After selling its telecom business, it entered the insurance and healthcare segment.

And it is not just established companies, which are changing. Even young companies are constantly looking to make bold new moves. Moving ahead on our list, we have Pantaloon Retail and Trent, the country's retail biggies. Starting out as a trouser manufacturing unit, Pantaloon has now become the biggest retail company of India. Under the aegis of Kishore Biyani, it changed the face of Indian retail. From fashion to food to furniture to real estate to stationery to finance, Pantaloon has everything under its umbrella. And just when people were beginning to brand Mr Biyani as a retailer, he set up the Future Group - which is likely to tap the equity market and is diversifying into media and consumer finance, among other things.

Trent is also far removed from where it started. From a cosmetics company, it went on to become a Rs 450-crore private label retailer. A Tata-owned company, Trent has been growing slowly, but steadily. The cosmetics business was sold to HLL and concentrated efforts were made to nurture the retail business. Trent is present in departmental stores, as well as hypermarkets. Croma - a joint venture between Woolworth and Tata - is another retail format through which the Tatas sell consumer electronics durables.

GMR Infrastructure, Lanco Infrastructure, IDFC and Unitech are a few more examples of companies which changed their line of operation. Though for some of these companies, it may seem like a natural extension of their core activity, it is a big business risk. Many diversification failures have been reported over the past few decades, but we agree with Robert Frost who said, "I took the road less travelled by, and that has made all the difference."

TOP