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About the Authors
Sanjay Dhir is the Chairman and Assistant Professor in Strategic Management Area at
Department of Management Studies (DMS), IIT Delhi. He is a Fellow (PhD) from the Indian
Institute of Management (IIM) Lucknow. He has been involved in several consulting proj-
ects that include - Integrated Child Development Services (ICDS, Bihar); Bihar Prashashnik
Sudhaar Mission (BPSM, Bihar) and Directorate General of Supplies & Disposals (DGS&D,
GoI, New Delhi). He has been awarded 2014 AGBA Fellow (by Academy for Global Business
Advancement, USA). He is also a core committee member of Government of India’s
project – ‘Unnat Bharat Abhiyaan’. He has published several research papers in leading
international journals and also published case studies in Ivey, jointly distributed by Harvard
Business Studies.
Swati Dhir is working as Assistant Professor in OB/HRM area at Indian Institute of
Management Ranchi. She is a Fellow from IIM Lucknow, specializing in Human Resource
Management and BTech from Uttar Pradesh Textile Technology Institute, Kanpur in Textile
Technology. She has published many research papers in national and international journals
and presented in prestigious conferences. She is passionate about teaching and research has
been actively involved in designing and execution of different training programs, MDPs and
consulting projects.
Sushil is Deputy Director (Operations) and Abdulaziz Alsagar Chair Professor (Professor
of Strategic, Flexible Systems and Technology Management), Indian Institute of Technology
Delhi. He has served as visiting professor and delivered seminars in many leading universities,
such as University of Minnesota, Stevens Institute of Technology, Université Paris 1 Panthéon-
Sorbonne, etc. He has served as Independent Director on the Boards of RINL, HSCC, and River
Engineering. He has acted as consultant to both governmental and industrial organizations.
He is the Founder President of the professional body, ‘Global Institute of Flexible Systems
Management’. He has been awarded 2014 AGBA Fellow (by Academy for Global Business
Advancement, US) and Mindshare Human Rights Award 2015.
Sanjay Dhir
Assistant Professor
Department of Management Studies, IIT Delhi
Swati Dhir
Assistant Professor
Indian Institute of Management Ranchi
Sushil
Professor
Department of Management Studies, IIT Delhi
McGraw Hill Education (India) Private Limited

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Preface
The significance of ‘Strategic Management’ is widely acknowledged by academicians,

practitioners and policy makers. The well-established foundations of strategy can build
competitive advantage of firms, which needs to be sustainable. And yet numerous firms find
the formulation and execution of strategy difficult to articulate. In the past decade, the focus of
strategic management has shifted to emerging markets especially China and India. Particularly,
the corporates and businesses are constantly evolving. The reason is quite simple – India is
one of the fastest growing economies of the world and a very unique and challenging market.
Managing businesses in India requires an unconventional approach, which has been a lacuna
in the majority of extant casebooks on Strategic Management.
It is in this light that this book provides a collection of cases aimed to provide students with
the unique Indian context of Strategic Management from established corporates to startups.
The book also presents the creativity and innovation aspects of strategic management, which
has been the focus of companies lately.
A student of business with tact

Absorbed many answers he lacked.
But acquiring a job,
He said with a sob,
“How does one fit answer to fact?”
The above ballad by the renowned poet Charles Gragg is very famous for its characteriza-
tion of the demerits of business students who are not exposed to the pedagogy of case study.
Strategic skills are merely not developed by lectures and sound advices. Moreover, the wisdom
of strategy, creativity and innovation cannot be passed on by lectures and readings alone. The
diagnosis, analysis, judgment and situation-specific actions are always unique for different
contexts and situations. This is achieved by case studies and thus has been a powerful peda-
gogy to teach strategy to business students in learning by doing. The two-pronged benefits of
case study is to enhance the analytical skills of students as well as provide various means by
which firms and managers actually face situations and respond them. Thus, a case study not
only provides detailed information about the firms but also the problems in different indus-
tries, which firms have to tackle.
The cases in this book include a wide spectrum of industries from hotel, online food
ordering, pharmaceutical, social media, telecommunications, logistics, automotive, mobile,
gaming, consumer electronics, coffee, FMCG, e-commerce, sports, job portals to travel portal,
vi Preface
which have been chosen to provide a wide purview of understanding of strategic manage-
ment concepts to students. Moreover, of the 19 cases in this book, 9 cases are on start-ups.
These include Zostel, Zomato, Moovo, Shipsy, Smartivity, Flipkart, AutoNCab, Greymeter, and
Routofy.
All the 19 cases illustrate the varied concepts of strategic management from – vision/mission,
general environment analysis, industry analysis, competitive advantages, cost leadership,
differentiation, business level strategy, corporate level strategy, strategic implementation,
international strategy, strategic control, change management, and innovations and creativity.
The cases are not disguised to provide the students the realisation of the company as well as
industry. The information on all cases has been from secondary sources, which are available
in public domain. The research includes in-depth analysis of industry reports, annual reports,
financial data, government reports, news articles and information from databases to provide
an eclectic picture of the cases chosen.
In addition to above, teaching notes for all the 19 cases have been provided as comprehensive
supplementary resource for instructors. They include the questions for classroom discussion
along with detailed analyses of those questions. The cases as well as teaching notes have been
tested in the classes of strategic management with IIM and IIT students.
The target audience of this casebook includes students of MBA and Executive MBA who
specialize in strategy. This book can be used in Strategic Management classes as a primary
case text. Entrepreneurship, New Venture Planning and Innovation/Creativity classes can
use this book either as a secondary text or as a principal text to focus on start-ups and their
strategy. In addition, Macro Organisational Behaviour classes can use this book as secondary
text for design, system and structure related issues. Finally, professionals, entrepreneurs and
consultants will find this book useful as a resource to better understand the unique Indian
context of strategic management and gain insights in their respective fields.
We hope that you would find this book developed using the above approach useful. We thank
you for using this book and invite your valuable feedback, suggestions and reviews of cases
based on your experience in the classrooms. Please write to us at sanjaydhir.iitd@gmail.com.
Sanjay Dhir
Swati Dhir
Sushil
Acknowledgements
We thank the Department of Management Studies, Indian Institute of Technology, Delhi,

and Indian Institute of Management, Ranchi, for providing the necessary resources to write
this book. We also specially thank the team of McGraw-Hill Education – Hemant K Jha and
Parimala Ravikiran – for their patience and support with utmost grace and professionalism.
In addition, we thank our academic colleagues as well as industry friends for providing their
valuable suggestions to enrich the cases. We also appreciate the efforts and inputs from our
students of MBA at DMS, IIT Delhi and IIM Ranchi without whom these cases would not
have been possible.
Last but not the least, we also thank our family members, who have provided constant
support and motivated us to complete this case book.
Sanjay Dhir
Swati Dhir
Sushil
Contents
About the Authors ii

Preface v
Acknowledgements vii
Theme I Vision / Mission

Case 1. Backpacker’s Hostel 3
Theme II General Environment Analysis

Case 2. Passionate Zomans 15
Case 3. Dr. Reddy’s Laboratories: Entry in German Market 27
Theme III Industry Analysis

Case 4. Linking the World’s Professionals 39
Case 5. Airtel Zero 54
Theme IV Competitive Advantage of Resource and Capability

Case 6. Button Dabao, Truck Bulao 65
Case 7. M&M: Logan and International Expansion 72
Theme V Cost Leadership

Case 8. Micromax: Leveraging Scales 93
Theme VI Differentiation
Case 9. On-Demand Logistics: Shipsy 103
Theme VII Business Level Strategy

Case 10. Smart+Activity 115
Case 11. Videocon: Rise From the Ashes 125
x Contents
Theme VIII Corporate Level Strategy

Case 12. Indian Starbucks 135
Case 13. Emami: Establishing Manufacturing Plant Overseas 149
Theme IX International Strategy

Case 14. Flipkart: Amazon of India 157
Case 15. Hero MotoCorp: Manufacturing Happiness on a Global Scale 167
Theme X Strategic Implementation

Case 16. The IPL Era 181
Theme XI Strategic Control

Case 17. AutoNcab: Redefining Travelling 197
Theme XII Change and Turnaround

Case 18. Greymeter 207
Theme XIII Creativity and Innovation

Case 19. Routofy: Building a Systemic Innovation Capability 219
Theme I
Vision/Mission
Case 1. Backpacker’s
Hostel
Backpacker’s Hostel
Case Context
Zostel is India’s first chain of backpacker’s hostels. A company that claims not to have a
corporate environment, made up of seven people having a passion for travel and entre-
preneurship and an adventure bug to set up this startup in late 2013. They believe that
travel is a form of meditation, a way of knowing yourself deep down–something, which has
profound effect on the way, you think and act in life. Their vision is to create an enterprise
that changes the travel and hospitality scenario in India; their sole ambition is to make
people travel more and to change the way India travels by wiping off all the muck present
in this sector. They believe in a simple philosophy of life–to live doing what they love
while trying to leave their mark by changing the face of travel and tourism sector. They
wish to create a strong community of travellers and entrepreneurs, a community that can
bring in a revolution. It may sound too good to be true, but it is a dream in progress.
INTRODUCTION
Started on Independence Day in 2013, Zostel was the first chain of backpackers’ hostels in
India. Seven men between the age of 23 and 26 from IIMs and IITs came up with a vision
to change the view of Indians towards hospitality. What connected these men and led to the
formation of this company was their love for travelling. According to founders of Zostel,
“The inspiration of Zostel came during an Europe based internship exchange program.” The
co-founders during their backpacking experiences in Europe and US enjoyed comfortable as
well as affordable stay at youth hostels. This was something in which India was lagging behind
despite the increasing numbers of backpackers. “Here, you either have to book a pseudo-
economic hotel, paying roughly Rs. 2,000 per night, or stay in some dingy guest house for
Rs. 300 to 400,” says Akhil Malik, one of the Zostel’s co-founders, and added “We wanted a
remedy to this problem.”
All the seven founders of Zostel were graduates from reputed institutions in India and could
have very easily taken up a high paying job but their passion for this company led all of them
to decline the commonly chosen path. They created a path for themselves and took up the
challenge of solving the accommodation problem commonly faced by travellers in India.
Hence, after coming back to India from their internships, they started Zostel to provide reli-
able and comfortable stay to the backpackers at economical prices.
4 Cases in Strategic Management
But having a good idea is not all that entrepreneurs need to be successful they need to
know how to implement the idea. This art was mastered by the Zostel co-founders. Initially
when they started, it was a difficult task for them to fund their management education and
at the same time invest money in their start-up. Family and friends came to their rescue
during this time. Educational loans were taken and donation worth $100 was raised from
Facebook. Dharamveer, one of the co-founders also invested $10,000 that received as a prize in
a game, proving the investment that the founders had to make for their highly capital intensive
idea to become successful. Zostel was purposely set up first in Jodhpur as one of the Zostel’s
co-founder family (Mr. Chouhan’s) was already in the hospitality business there. The response
could be judged from the fact that Jodhpur property having 25 beds broke even in the first
month itself.
There was no turning back after this. The team participated in over 14 business-plan compe-
titions like Wharton India Economic Forum B-Plan contest and the ones run by the Richard
Ivey School of Business, Canada which gave them a platform to test their ideas, fine tune them
and also find potential investors who were willing to invest in the idea.
The journey was not easy as it may sound. According to one co-founders, Mr. Akhil Malik,
“One of the biggest issue was to change people’s mindset and promote the idea that even cheap
rooms can meet the expectations and can be safe, clean and reliable.” Besides these there were
other problems like investing more time and maintaining the speed of business. Moreover,
there were operational and legal issues. It was difficult to manage labour and get the work done
from them. Marketing was another area where the company needed to focus. The co-founders
intelligently handled most of these with their first-hand knowledge and these hardships made
Zostel grow bigger and better.
During the evolution process, the co-founders made it a point to remember their basic aim of
making travellers meet other travellers and providing them with a welcoming, well-maintained
and comfortable stay.
TOURISM INDUSTRY AND SCOPE FOR ZOSTEL

Zostel has initiated expansion in the backpackers’ accommodation sector, which was still
developing in India. Due to their special focus on travellers, both foreign as well as domestic;
the study of deeply linked tourism sector became priority to understand the market and scope
for growth. According to the report published by the Ministry of Tourism, Government of
India in 2014, it was found that the number of annual foreign tourist arrivals in India was 7.68
million and was growing yearly at 10.2%. Trends in the number of foreign tourists visiting
India from 2000 to 2012 have been depicted in Exhibit 1.1. Domestic tourist visits within India
to different states and union territories accounted for 1282 million travellers yearly and this
number was growing at a rate of 11.9%. The industry marked an annual earning of INR 1.23
lakh crores and was expected to rise by 14.5% in the coming years.
While in 2014, the total number of tourist arrivals in India was 7.68 million, the number
had already reached 5.13 million in the period from January to June, 2015. Moreover,
approximately one-third (33.7%) of total expenditure of a tourist during a trip was on
Backpacker’s Hostel 5
accommodation, i.e. on hostels. These statistics were a clear indication of the growth of industry
and immense scope that lay ahead for Zostel.
Zostel planned to target both international as well as domestic travellers. While the
backpacking culture was prevalent among foreigners, it was still in a nascent stage in India.
The market that Zostel was targeting was primarily the youth, i.e. people in the age group of 16
to 30, which basically included college students, sports groups, travel enthusiasts and travelling
clubs.
Zostel had set base in eight prominent tourist spots across India including Delhi, Jodhpur,
Jaipur, Udaipur, Varanasi, Agra, Goa and Jaisalmer. As in April 2015, Zo Rooms owned 100
hotels across 10 cities, but the company planned to support over 1000 hotels across 50 cities
by the end of 2015.
While some believed that the backpacking industry was just a passing phase till the next
recession or inflation strikes, Akhil Makil, the co-founder of Zostel, had a different opinion.
He believed that the current generation was marked by a lot of uncertainty in terms of what
each individual wanted in life. The current youth had worked hard to get good education and
get a well-paying job in an MNC. However, as the propensity to spend grows, people start
buying goods and products they wanted for long which they think would make them happy.
But Akhil, through his experience with hundreds of backpackers worldwide, mentioned that
sooner or later they are bound to realize that material happiness was what they were looking
for. When that moment strikes, it will be the time when these corporates will pick up their
tiny backpacks and move out to explore the adventure that is the world. This view was the
major driver of Akhil’s confidence in the idea and the belief that it was not just a phase that
will pass, but was bound to stay around for some time and grow in the near future.
EXPLOITING THE GAP IN THE MARKET

According to a survey by a consulting firm PricewaterhouseCoopers in 2012, India’s hospitality
service industry was short by 150,000 rooms. The market predicted a tremendous growth in
“price-conscious domestic travellers”, thus indicating the fact that mid-market and budget
segments had the maximum potential. It was seen in market studies that there was a massive
shortage of short-terms rooms for under Rs. 2,000 a night in India. Surprisingly, rooms below
Rs. 1,000 enjoyed an abnormally high occupancy of above 85%. Thus, there is existed a gap
in budget options for leisure travellers.
This was where Zostel jumped in.
“We not only endeavor to ensure our hostels meet the basic international standards of afford-
ability, security and cleanliness but they’re also welcoming, well maintained and comfortable
for our guests to stay in,” Akhil Malik, Co-Founder, Zostel said.
Thus, Zostel developed a completely non-existent domain of Backpacker’s Hostels, aiming
to structure a largely unorganised market and become market-makers and market-leaders.
Anchored on an asset-light business model, they planned to aggregate standalone budget hotels
in travel hubs of the country and associate with a common name. The idea was to develop a
brand name with backpackers’ associate and to provide a standardised set of amenities and
comforts like any other conventional budget hotel chain.
Another move that was an immense hit among travellers was Zostel’s approach of providing
not just an accommodation but a holistic experience in itself. The atmosphere was designed
to lure the young, adventurous and the crazy. Its success was evident from the fact that Trip
Advisor gave Zostel “5-star ratings” and placed it in the “Top four places to Stay” in all cities
where Zostel had hostel. This allowed Zostel to create a niche for itself and bring a new dimen-
sion to the Indian tourism and hospitality scene.
COMPETITON FACED BY ZOSTEL

Zostel was facing competition from various market players like OYO rooms, Treebo, Zip, Zen,
StayZilla, etc. All these players were trying to capture the market by providing better ameni-
ties at the best rate possible. All these players had very huge potential to slash Zostel market
share and profitability.
OYO rooms was established in 2013 and was the biggest competitor of Zostel. The standard
rooms provided by OYO rooms used to have all basic features like AC rooms, complimentary
breakfast, 24X7 Wi-Fi facility and customer support services. OYO rooms had raised Series
B funding of $100m and backed up by investors like Sequoia, Light speed venture partners
and green oaks capital investment. Facebook and Twitter followers for OYO rooms were also
increasing day by day.
COMPETITIVE ADVANTAGE
The tourism and hospitality industry had a lot of individual and independent competitors
making the market fragmented and discrete. Zostel was started so as to get the best of all these
worlds. If we look at low-cost affordable accommodation, the main players prior to Zostel’s
entry were Lodges and Guesthouses, 1 to 3 star hotels, Government YHAI (Youth Hostel
Associations of India) hostels and standalone small hostels. Although Lodges, Guesthouses
and YHAI hostels were very affordable, they lacked even the basic facilities and were located
in obscure locations. Their poor hygiene and security were the main issues and travellers
preferred avoiding them for the same reason. 1 to 3 star hotels were hygienic and had decent
facilities but were relatively expensive for backpackers. For standalone hostels, affordability,
hygiene and facilities were a positive but the lack of an established name robbed them of the
trust of travellers in terms of security and stay.
Zostel worked on establishing a brand across all major tourist hubs to reap the benefits of
a cross-selling opportunity. Their rooms were affordable and at the same time hygienic and
secure thus intruding into the market of Lodges and Government hostels. The creation of a
youthful ambience and exciting engagement activities, basic amenities like Wi-Fi and a brand
name made it possible for them to penetrate the backpackers market.
THE REVENUE MODEL

Unlike most technology startups, Zostel required a great amount of ground work to get started
up. The venture lay at the crossroads of hospitality and real estate. At the beginning they were
required to source appropriate properties, negotiate prices considering the price ceiling and
operational economics and work out plans to expand to other parts of the country.
Zostel followed a franchise model with all its properties rented out. It refurbished the prop-
erty with air conditioned bunk-beds and all basic amenities such as Wi-Fi connectivity. In
addition installation of board games, play station and chilled-out decor ensured it is a hot-
favorite among young travellers. In some cases, the interiors were also done according to the
location.
In its expansion move abroad, the business model was tweaked to make it even less capital
intensive. It allowed the local personnel to invest in properties and personally take care of
marketing and branding. It then charged 15% commission on all bookings made through its
app plus a monthly booking fee.
The pricing for the rooms was market-penetration pricing with the sole aim of establishing
a customer share in the Indian tourism industry. The tourism industry was price sensitive and
Zostel kept this in mind ensuring value for money for all the residents.
INNOVATION AT ZOSTEL
Right at the outset when it was conceived, Zostel faced the challenge of coming up with
new properties. Obviously, this would prove to be a costly affair and for a ‘startup’, this was
certainly not feasible. This was where they took their baby steps in the world of creativity,
albeit small ones. Instead of coming up with their own properties, they consolidated a previ-
ously segregated market by taking over several hostels across India to bring them under one
banner of Zostel.
The process of acquiring continued with time and soon, Zostel was a chain of hostels unified
under the name Zostel. They started operating these hostels at lower operating margins than
before by giving better amenities. However, due to consolidation, the irregular demand for
rooms at places averaged out slightly to compensate for the decreased operating margins.
Conceptualising the Zostel Experience
Once the plan for market entry and capitalisation was in place, the next thing on Zostel’s to-do
list was market positioning. The problem here was if Zostel were to be just a chain of hostels
scattered randomly in cities, it would be seen as just another hostel among many competing
independent ones. The question that Zostel founders, Pawan Nanda and others, needed to
creatively answer was how they would differentiate their product Zostel from the rest of the
hostel market.
Till then, the hostel accommodation market had been driven by consumers looking for
extremely cheap places to stay. The Youth Hostel Authority of India (YHAI) provided just that.
Zostel could not have hoped to compete with YHAI’s insanely low prices, not by any stretch
of imagination. Therefore, just being cheap would not do the trick.
Cue innovation!
What Zostel did in order to solve this problem, is what drives the company even today. Instead
of just being extremely cheap, Zostel decided to tap into the minds of these travellers and see
where their demands could possibly be expanded.
Zostel discovered that most of the backpackers travelling would love to get a feel of the cities
they stay in. Therefore, Zostel decided to get this feel to the backpackers inside the hostel itself!
They themed the ambience on the city they were in, thus greatly enhancing the experience of
these backpackers. Another discovery was of the fact that travellers love to interact with other
travellers and Zostel gives travellers just that! With an array of common areas to hang out
in the hostel and with periodically arranged recreational activities, Zostel gives the travellers
ample opportunities to interact with the fellow travellers unlike any other hostel, so this is
its innovative unique selling point. A fun yet cheap place to live where you can interact with
fellow travellers in common areas and enjoy periodically arranged recreational activities, all
fine-tuned to suit the place that you are visiting.
BUILDING BRAND ZOSTEL

Having started Zostel and having a clear positioning in mind, the founders now faced a common
problem that new startups face, i.e. building the brand. There were two primary innovative
ways in which Zostel founders innovated creatively to build the brand Zostel.
Brand Building and Cross Selling
Every time you stay in Zostel, you don’t stay in Zostel Delhi or Zostel Mumbai or Zostel
Shimla. The founders firmly believed that you stay in Zostel. When you were living in a
Zostel in Shimla, you were being sold Zostel Delhi or Zostel Mumbai through good service and
a great stay. This worked perfectly for the company because most of the people who stayed in
these hostels were backpackers who were likely to travel other places as well with an active
chapter of Zostel.
Brand
In order to maximise the advantage of being a hostel chain, Zostel markets branded Zostel
much more than individual hostels coming under their banner. This combined with the above
mentioned idea of cross selling Zostel’s hostels was an amazing creative approach towards
marketing and brand building coming from the founders. The founders quickly realised that
their market audience was backpackers and a vast majority of backpackers were very young
travelers (age between 20 and 28). In order to tap into this market as much as they could they
started building the image of Zostel as being by the youth, for the youth and of the youth.
The following are some extremely interesting ways how they did this.
1. Youthful Portrayal of the Company: A major part of satisfying the above was to portray
that the company as being youthful. And that they did! If you visit the website of
the company, you will find a plethora of youthful bright colours, vibrant text designs
complete with a mascot, all factors that greatly benefit the company’s portrayal as a
youthful brand. The people almost felt as if Zostel was just like them and this was
exactly what the founders had wanted them to feel.
2. Partnerships: All the marketing oriented partnerships of the company were with youth-
centric organisations and college festivals. All of this, apart from fetching direct youth
visibility for the company, also helped in its youthful portrayal. It had also partnered
with brands like MTV and Red Bull, both seen as youthful brands, thus leveraging their
brand image to build that of Zostel.
3. Zostel Internships: Yet another creative marketing exercise that the company under-
took was the concept of Zostel internships. These were 50 days’ all expenses paid trips
for young adults across India with stipend of Rs. 50,000, disguised under the name
of internships. The company banked on the people doing the internship and talking
to their peers, thus organically marketing Zostel. Through the program, the company
again portrayed itself as youthful and at the same time garnering direct and indirect
publicity for itself.
These are just some of the several creative innovation techniques employed by Zostel. The
company and its core managers remained committed to unconventional creative ways to do
what needed to be done.
EXPANSION MODEL
Starting as a self-funded company, Zostel picked up its first round of investment worth INR 5
crores from a Malaysia-based investor, Presha Paragash in 2014. In May 2015, they picked up
their second round of undisclosed funding led by hedge fund Tiger Global in participation
with Orios Venture Partners. Market sources peg it at somewhere around $15 million (INR 96
crore). The aim was to achieve a leadership position in this naive market and majority of the
use of proceeds was going to be in building a strong brand, marketing, bolstering technology
and ground operations.
Zostel had also been constantly expanding across India. Having started in three cities across
Rajasthan – Jodhpur, Jaipur and Udaipur – Zostel had now expanded into Delhi, Varanasi,
Agra and Goa. The expansion was done strategically to capture all major tourist hubs as
even now, 65% of Zostels’ occupancy comes from foreign travellers. Also, most Zostel hotels
were located within a kilometer’s distance from the city. “We expand in tourist circuits.
Like, say, a traveller who goes to Delhi and Jaipur will also go to Udaipur. So these three
areas will be targeted”, said the founders of Zostel.
The company had also gone international with the launch of its first overseas hostel in
Dalat, Vietnam.
“We are planning to launch more international properties, including in Nepal and Sri Lanka.
By the end of this year, we will launch three unique properties in each location, taking the total
number of hostels to 40 across national and international destinations,” said Akhil Malik.
CURRENT CHALLENGES FOR ZOSTEL

One of the major problems that Zostel is facing is changing people’s perception about cheap
accommodation. In India, the reputation of a cheap accommodation is not good and they are
considered unsafe, unreliable and not so comfortable. Zostel needs to break this misconception
in order to gain popularity by using popular marketing strategies.
Another problem that is hindering Zostel’s growth is proper management of the operations.
According to Akhil Malik, “It becomes difficult to interact with the people who do not
understand you because they are labourers.” The local rules and regulations also pose a chal-
lenge to the expansion in various cities and countries.
Property scouting is another area where Zostel is facing problems. They need to find a right
property at a right location and convert it to Zostel by providing it all the necessary facilities
that can make a person’s stay comfortable.
Like any other industry, Zostel is also facing competition from various competitors as
discussed earlier. In order to gain an edge over these competitors by providing competitive
prices and facilities and at the same time to remain profitable, Zostel needs to come up with
more innovative ideas and should strengthen their business.
WAY FORWARD
Going forward, Zostel need more capital for their expansion plans. They are trying to expand
their operations in domestic as well as in international market. They are facing challenges from
all directions but they are determined to make an impact on the tourism industry by providing
all facilities that can meet the international standards of security and hygiene requirements
set by the industry western counterparts. Currently, Zostel is facing fierce competition from
other market players like OYO rooms, Treebo, Zip, Zen, StayZilla, etc. But now the company
is looking for a sustainable plan that can help Zostel to increase its market share.
QUESTIONS FOR DISCUSSION

1. What should the CEO of Zostel do to sustain the advantage gained by Zostel?
2. Should Zostel enter into joint venture or acquisition?
3. Why has Zostel been successful and what are the aspects for future success?
4. Analyze the competitive scenario of Zostel.
EXHIBIT
Exhibit 1.1 Indian Tourism Industry Statistics

Indian Tourism Industry Statistics
Number of Foreign Tourist Arrivals in India 7.68 Million
Annual Growth Rate 10.20%
Number of Domestic Tourist Visits to all States/UTs 1282 Million
Foreign Exchange Earnings from Tourism INR 123,320 crore
(Source: India Tourism Statistics at a Glance 2014, Ministry of Tourism, Govt. of India)
REFERENCES
1. http://archivetravel.financialexpress.com/201110/edge01.shtml (accessed 30 June 2015).
2. http://articles.economictimes.indiatimes.com/2015-07-20/news/64638772_1_orios-venture-partners-ti-
ger-global-hotels (accessed 23 September 2015).
3. http://qz.com/search/Zostel (accessed 20 August 2015).
4. http://www.businesszone.co.uk/around-the-world-in-five-startups-paavan-nanda-zostel-india (accessed
30 February 2014).
5. http://www.ghumakkar.com/ (accessed 22 April 2015).
6. India Tourism Statistics at a Glance 2014, Ministry of Tourism, Govt. of India http://tourism.nic.in/writ-
ereaddata/CMSPagePicture/file/marketresearch/statisticalsurveys/India%20Tourism%20Statistics%20
at%20a%20Glance%202014.pdf (accessed 28 September 2014).
Theme II
General
Environment Analysis
Case 2. Passionate
Zomans
Case 3. Dr. Reddy’s
Laboratories:
Entry in German
Market
Passionate Zomans
Case Context
Internet start-up Zomato is one of India’s global success stories. Zomato is a name which
provides a solution for human’s one of the very basic need called ‘food’. It helps food
lovers in India to find appropriate food restaurants as per choice just by using smart
phone. Although Zomato has expanded its operations in more than 20 countries yet the
main cities in India are New Delhi, Mumbai, Bengaluru and Pune. Zomato has become
a favorite name among the youngsters. The customisation of services through taste and
language is one of the specialties of Zomatians. The young founder ‘Deepinder Goyal’ has
faced a number of challenges from inception to expansion in food and beverage industry.
Its vision is to expand to more than 50 countries.
“Keeping our users happy by giving them a beautiful, easy-to-use product and main-
taining a strong content platform as we grow is what’s most important to us at this point
in time. We’re aiming to become the go-to restaurant discovery service across the globe,
and we’re working towards doing just that”, says Deepinder Goyal, founder of Zomato.
INTRODUCTION
Zomato was an application, which provided users complete information about the restaurants
and food joints for over 1.4 million restaurants, in around 10,000 cities across 23 countries.
Zomato was a platform not only for food lovers, but also for food servers and restaurant service
providers. Service providers got a canvas to post and update their new cuisines and special-
ties of the season, while foodies got a chance to explore new food, places and new ambience
to experiment with a review and feedback. In the digital era, people could easily get access to
Zomato website as well as mobile apps to get the relevant choices according to their tastes.
To evolve as a friendly neighborhood restaurant guide, Zomato featured restaurant informa-
tion which included scanned menus and photos, review, blogs about particular restaurants.
The restaurant location, menus and other related information about food had been collected
by Zomato team across the country and globe. Furthermore, they had expanded their services
by providing online orders, cashless payments, table reservations in restaurants. The Zomatian
way of providing the right information to the right people was certainly going to change the
future of restaurant businesses. Competition among the players was helpful to provide the best
quality food and quality services to the customers so that they could get the value for their
money.
HISTORY OF ZOMATO
The ideas do not need your permissions to click. It may be a class room situation where you
feel hungry or bored by technical sessions. The same distractions became the starting point
for the Zomato journey. The inception of this idea took place in the mind of Deepinder Goyal,
a mathematic student of M. Tech. in 2006 and this student gave birth to a novel idea to
manage hunger in a very creative way by just clicking your phone. Goyal worked on the idea of
connecting the hungry people with the food of their choice at their door steps. He had observed
that people spent a lot of time in hunting a good restaurant these days. Working on his idea
further, he dreamt of designing a website to get the information about the restaurant food, taste
choices and its ambience. Deepinder Goyal was soon joined by his friend Pankaj Chaddah.
While sitting in a cafeteria, they observed queues of people waiting just to see the menu cards.
The process of skimming through restaurant menus during lunch hour was a painstaking one.
They had to queue up in the cafeteria every day to go through a stack of restaurant menus to
order food. They couldn’t take the menus to their desk since people ended up losing them. So,
to save time and reduce the trouble of food lovers, they scanned these menus and uploaded
the same online over the office intranet for their colleagues to use. The acceptance of idea and
ease of usage made this idea viral and a new venture called ‘Zomato’ came into existence. Also,
two of his juniors joined the team and collected some more menus and uploaded the same
information over the website. Within few months, around 2000 menu cards were updated and
the website www.foodiebay.com became popular among the food lovers. It was an easy way to
check the report card of a restaurant, validated by their friends.
Deepinder Goyal wanted to test the water and wanted to run his own venture, but he
was not ready at that time. After college, he joined Bain & Co in Delhi and met his friend
Pankaj Chaddah. Although they had studied at IIT Delhi, yet they met at Bain & Co. Like-
minded people came together, explored the market and decided to give it a try. Deepinder Goyal
resigned from his job on the very same day, when his wife, Ph.D. in Mathematics, got a job
offer from Delhi University. The preface was already started building by starting the website
as Foodiebay.com, but the real changes happened after Pankaj Chaddah also left the job and
joined Deepinder to test the market. They informed their parents about their decision only
after they quit, so that there is no scope for any second thought. After quitting the jobs, they
started to focus on other big cities in India and started their offices by the name of Zomato.
The growth of Zomato was well noticed by venture capitalist like Sanjeev Bikhchandani,
the founder of Naukri.com, Shiksha.com and Jeevansathi.com. He liked the idea and services
provided by Zomato and invested around $1 million in seed funding through his company
Info Edge Ltd and repeatedly invested four times. The accumulated amount reached to $25.4
million and increased the share of Info Edge by 50.1% in Zomato, which made him majority
stakeholder.
In next few months they got ready with the website information and made the Zomato app
available in Google Android operating system. The idea to rebrand Foodiebay as Zomato was
not just to restrict food related information only, but also Foodiebay contains ebay at the end,
and they do not want to get into any kind of confusion at customer front. Now Zomato app was
Passionate Zomans 17
successfully running on all the platforms from Android to windows to iOS. The app in 2015
had contact information of 180,500 restaurants in 36 cities. It also crossed the country bound-
aries and reached to 11 countries like Dubai, UAE, Sri Lanka, Qatar, the United Kingdom, the
Philippines, South Africa, Auckland and Wellington and Hamilton in New Zealand, Brazil,
Turkey and Indonesia. They further planned to make their presence in 22 countries in next
two years.
However the company was not making any money from these apps, but it facilitated
customers to use the services on more frequent basis.
As mentioned by Deepinder Goyal (CEO of Zomato), “We are looking at it as a marketing
tool, but three years from now we will figure out a way to monetise it,” Zomato was generating
good revenue at a significant rate. Zomato earned revenue of Rs 11.5 crore in 2013 as compared
to Rs 2 crore in the last year. The regular information updation about foods and restaurants
kept customers satisfactory. Also, it gave competitive advantage to Zomato.
Zomato was able to raise money through a number of funding rounds and was able to access
23 countries and more than 3,00,000 restaurants information. The fund raised was quite
helpful to expand the Zomato’s scale of operations.
ZOMATO’S BUSINESS MODEL

Until September 2014, the business model was primarily dependent on local advertising on
websites. With the strong focus on mobile, the company decided to build Zomato for busi-
ness app, which is gaining traction steadily. Zomato has since started focusing on evolving
the product offering and has expanded the product portfolio to offer six products – the
Zomato restaurant finder app (search and discovery), Zomato for Business (app for restaurant
managers), Zomato Order (for Online Ordering), Zomato Book (table reservations), Zomato
Cashless (in app payments) and Zomato Base (POS).
Zomato was focused on building a seamlessly integrated dining experience for consumers.
There was a huge emphasis on ramping up operations in 2015 as well as going deeper into the
restaurant vertical as well as keeping an eye over the expansion to new markets. The business
model and the overall economics of the business had worked very well. Zomato’s business
model worked on different features like Hyper-local advertising, Zomato for Business, Cashless
payments, Online Ordering, Product innovation, etc. Zomato was not handling the logistics of
the actual delivery of food but was acting as facilitator between the consumer and the restau-
rants offering home delivery. Zomato charged restaurants a commission and this too had added
a new stream of income.
Business Strategy
According to Mr. Goyal, Zomato was a simple 3-click ordering process with a social interaction
(rather than just social tools) to provide the platform (digitisation) and access to thousands of
small restaurants who would not otherwise get recognised. The key strength of Zomato was
the coverage and in-depth knowledge of food with different reviews. The continuous updating
of reviews and increasing number of registered restaurants in comparison to its competitors

gave an edge over others.
The co-founder of Zomato also mentioned the same,
“Our core strength is fresh, exhaustive restaurant information, and we have a team in every
market focusing on this core to make sure we are relevant and reliable for users. This includes
re-visiting restaurants to ensure that our data is fresh and accurate. In that sense, it does pose
a challenge while scaling, and finding the right people for the job isn’t easy.”
—Pankaj Chaddah (co-founder, Zomato)
Zomato’s strategy was relatively simple. The focus had always been on creating a product that
people will love because it adds value to their lives; one that looks good, and works even better.
Zomato did not make a mistake to be complacent about its product or services. It has always
searched for better and thrived hard to provide the most relevant and crisp information to its
customers. It was one of the core competences of Zomato. The important key success factors
of Zomato are its market strategy and branding. Company got almost 50% of its business from
mobile apps due to relevance, and an awesome user experience. The social media platforms like
Facebook, Twitter and Pinterest also enhanced the presence of Zomato for food lovers.
In terms of expansion into new markets/locations, Zomato entered markets if it saw a prod-
uct-market fit and had the bandwidth to execute very quickly. For entering in a new market,
they tried to acquire the existing strong players in the market to leverage their brand and local
food knowledge and preferences. Expansion in Europe had been one of Zomato’s key focus
areas. The most significant was its January takeover of Seattle’s Urbanspoon in a $52 million,
all-cash deal. This gave it an entry into the United States, Canada and Australia – pitting it
directly against the popular Yelp.com. Zomato also bought out six other restaurant search compa-
nies, allowing it to enter New Zealand (Menumania), Czech Republic (Lunchtime) Slovakia
(Obedovat), Poland (Gastronauci), Italy (Cibando) and Turkey (Mekanist). Urbanspoon was a
market leader in Australia and Canada and a significant player in the United States. The acqui-
sition of Urbanspoon was the perfect way to enter all three markets and successful product
migration – the combined product – offering the best of both Urbanspoon and Zomato on a
common platform. Zomato had also been launched in Toronto and Lebanon in 2014. Zomato
was penetrating quickly and got access in 23 cities within Czech Republic, whereas global
competitor Yelp was only present in Prague.
CREATIVITY AND INNOVATION

The theme of Zomato was always “For the Love for Food”, and the belief was that the best way
to build relationships is by talking to the clients passionately about your own brand. Zomato
felt this could be best done by its own staff. They were looking to build good and healthy
relationships with media and changing PR agencies. The marketing efforts need to be done
internally for building friendly approach. Another advantage of this approach was that it was
a cheaper alternative. But as the marketing was in-house, a need was felt for the media opinion
too. In order to counter that Zomato built a social media community Zomato approach was to
build a social community around food.
Community Engagement
They went out to bloggers every week for their opinions which acted as a valuable feedback for
improving their product in addition to building relations with the media. This feature can be
seen currently on the Zomato site. No other competitor offers such a comprehensive database
regarding restaurants and food. Zomato achieves this by taking pictures and uploading the
menus in their site and apps. The unique feature at Zomato was that they did not trust others
when it comes to update information.
The Perfect Timing

Zomato was in full momentum in just six months and around 5 lakh users were visiting their
websites every month. Now it was high time to formalise this channel and make an effective
presence and brand visibility through various campaigns. Feedback had been integrated and
they were confident of their product. The atmosphere was that of confidence and that eager-
ness to go onto next level. But they did not go to the next level. Zomato waited till September
instead of launching the campaigns in July to capture more number of people. Usually people
go on vacations during this time. The timing was crucial. The attention to small details was a
big key for Zomato’s success.
Online Campaign
Behavioural targeting was the method adopted by Zomato to spread its message out. The
primary focus was on food bloggers and online food communities as these were the ones who
would be most benefitted from this product and the ones who were most likely to use it. They
tried to capture the customers who exhibit a consistent behaviour of using online services and
food websites. The usage of food websites was the indicator of their interest while the audience
surfing online services or E-commerce was the indicator of their affordability.
Dilemma Over Message and the Creative Answers

A lot of debate was done over the message Zomato wanted to convey in their advertisements.
Advertisements rich in content were their USP but they wanted to deliver a simple message,
which was in sync with how they started. Until the deadline there were many messages in
place but they decided to go back to the basics. Their social media strategy did not focus on the
product itself. They instead focused on showing their humorous side. They wanted to show a
friendly tone but there was a hidden strategy behind it. People like to share humorous content.
It was an effective way to advertise. The main purpose of branding was relevance. Zomato
achieved relevance as the people linked Zomato with food and restaurant. This is a classic case
of branding without too much focus on product details.
The Friendly Approach

Zomato took a very different approach when it came to customer interaction. It enjoyed the
friendly conversation over social networking sites. This strategy worked very well for them
and gave them originality. They worked on the philosophy of “be yourself, be original”. A very
important aspect was to be there for your customers when they needed you just like a friend.
Needless to say, Zomato had always been very quick to respond to user feedback and queries
and this greatly helped them in maintaining a friendly approach.
Zomato not only provided information about food and location, but also the details regarding
Wi-Fi, airconditioning, live music, etc. These filters with attention to minute details made
Zomato what it is today. Zomato, a small startup reached a status of being amongst the top
25 and most promising websites in country in just a span of 2 years. The telephony services
and the internet expansion added to its advantage in making it a success. The rising need and
getting convenient access to details of eateries gave birth to this business. It was totally a non-
traditional way of innovative thinking which led to success of Zomato from Zero.
Zomato Added Advantage

Zomato was targeted to provide restaurant owners a platform to market themselves online.
Many small restaurants could not maintain their website, but now could have an easy customer
access through online advertising. Zomato, thus acted as a medium for such restaurants to
grow. Also, Zomato provided them correct information about the product pricing and other
related information.
SOURCE OF REVENUE FOR ZOMATO

Zomato made money from the following three ways:
1. Advertising,
2. Event tickets, and
3. Sale and business intelligence and data analysis.
Advertising was the major contributor of Zomato’s business revenue. Zomato earned about
80% of revenue from restaurant advertisements. It was working with an idea to provide infor-
mation about the food and places on their websites. If a food lover clicked on Zomato app or
website, they would certainly like to click on the eye catching title like “Trending restaurants
this week”. This was one of the creative ways of advertising, where consumer was not forced to
watch the ads or forced to read but they would click on the link to seek information. Certainly
this reverse way was more effective than the traditional styles of advertising.
Event ticket sales provided a plethora of events happening around at different restaurants
made available through the site, thus provided an interface and worked as an e-ticketing partner.
The revenue of Zomato was a fixed percentage of ticket amounts as per the agreement. This
source added to around 15% of the total revenue.
Business intelligence and data analysis tools were widely used by Zomato content experts
to provide the relevant information to its clients. Zomato worked as consultant to the restau-
rant owners to understand the customers’ preferences, pattern of choices, demographics and
locations.
Furthermore, Zomato tried to understand the business-to-business environment by observing
the local markets in terms of their advertisement, hoarding, print media and radio adver-
tising. If they were willing to engage with any platform (including online), Zomato targeted
those restaurants and showed them the value proposition in their model. They were able to
make huge number of links from such innovative thinking and earned revenues by linking
with these restaurants. Being a local search platform, it had the technical skills to change the
reviews and ratings of particular restaurant but it was very clear to Zomato’s creators that
they will never compromise on their content for revenue. Overall revenues generated Rs 11.37
crores in FY 2013-14 as compare to Rs 2.04 crores in FY 2012-13. Advertisement revenues saw
a huge growth of more than 500% from Rs 1.59 crore in FY 2012-13 to Rs 10.88 crore in FY
2013-14. Event ticketing, a business that Zomato entered in late 2011, showed a decent growth
pattern. The firm saw a growth of 22% to Rs 33 lakh in FY 2013-14 from Rs 27.4 lakh in FY
2012-13. However, restaurant booking saw a minor decline in income from Rs 17 lakh to Rs
15 lakh in FY 2013-14.
It was quite evident that advertisement revenue was the major contributor of revenues
with a contribution as high as 96%. The revenue generated from advertisement was 78% in
FY 2012-13. Growth in income from advertisements on site saw a huge increase as compared
to event ticketing and restaurant booking in FY 2013-14 and it completely outshone them.
In event ticketing, there was a considerable growth but Zomato still lagged behind its major
competitors like bookmyshow and kyazoonga.
COMPETITIVE ADVANTAGE
After 2011, the e-commerce sentiments in India started to change and winds started to favor
the rise of Indian companies like Flipkart, Myntra, Cleartrip, RedBus, etc. These companies
created a buzz by implementing the right product and furthermore offering better service.
Appreciation from Indians came wholeheartedly and spread over word-of-mouth and primarily
over social networking sites. The websites of these companies were not as good as those of
Pinterest, Pandora, Rdio, Kickstarter, etc. No matter how the Indian counterparts represented
themselves, they were able to complement to their needs and the desires of the Indian people
and were able to sustain themselves in a variety of ways. Zomato was a different story alto-
gether. It created a space for itself in the Indian diaspora. Although some of the Indian company
websites lacked in their design, but Zomato was always the best. It was able to draw people’s
interest and offer its product. It gives the kind of experience of any sites used in the West.
Simplicity
Unlike Snapdeal, Tripadvisor or Justdial; even before Zomato came into being, Burrp, another
player in same industry, pitched into the same market but faded away just because they did
not have a product to sustain themselves in the long run. Zomato sailed through by rightly
targeting food and restaurant segment, which was unexplored earlier.
Any other company would have stopped functioning. But there were many other things
apart from the regular restaurant listings that Zomato had to offer. The website with its colour
combination, font and design was already a hit. Their app was equally good. The leader board,
featured reviews and “Write for a bite” are some of the features that attracted the users and
made them to stay connected.
Importance to the User

Zomato offered customers, a solution to have access to all the restaurants through a database,
types of food menu, location of the eateries and most importantly their feedback and the
reviews. Also “on the go mobile apps” which provided convenience, easy interface, presence
over social media like Google+, Facebook and availability on various platforms contributed to
the increasing rate of application and hence was responsible for generating revenue. The oper-
ating revenue of the Zomato was just zero in FY 2011-12. The trend changed in FY 2013-14
where the revenue was Rs 3 crores per month and a change of 458% was seen out of which
India alone contributed 65% of the total operating revenue.
These features offered four levels of user and allotted point through a system. Nothing was
hidden and hence simplicity to understand helped the users to familiarise with the applica-
tion at one go. With the “Write a bite” contest, it propelled good review writers to fight for a
review competition at the end of a week and rewarded the best reviewer. These gave the users
opportunity not only to use their listings, but also showcase their writing skills. A sense of
importance for each user or a reviewer showed that the company cared for their reviews and
they were also featured at the site. The efforts and time devoted in writing reviews did not go
in vain, when someone read it.
The Restaurant Finder

Finally the Restaurant Finder was the most important feature Zomato had to offer to its
customer base. It was available both on website and as an app, it boomed as soon it came.
People found it very useful implementing the module better as an app rather than on website.
The different segments of browsing, finding nearby restaurants, brilliant usage of filters actu-
ally helped users to filter out the restaurant of their choice aided by the reviews and other
details in a well-organised way. They improved the eating out experience in a true sense by
providing menus and photos of restaurants.
EXPENDITURE MODEL AT THE ZOMATO

It is well known that a man has three basic needs – food, clothing and home. IIT Delhi’s
student Deepinder Goyal was smart enough to catch an idea as his business plan, which
seemingly appeared to be a very small and had negligible segment. After second world war in
the international font people increasingly became affluent, and an affluent society had emerged
which looked for food as a part of leisure, socialising, sharing pleasure of talking and being
with family and friends while eating, and not just food alone as the basic necessity. Many of
the people in modern society didn’t care to pay a little extra for good ambience, location, stan-
dard boost, gentry around them, tasty food or just its presentation! Deepinder Goyal was able
to notice this mindset of people.
Zomato Operations
Today Deepinder Goyal’s company Zomato clicks photographs of the restaurants, collects
their menus and presents on the internet. They also present experience of other customers
on websites as well as on apps on all media and OS including iOS, Android, Windows Phone
and BlackBerry. This is supported with a lot of data analysis for their clients, e.g., what kind
of society exists, where, what is their taste, requirements, etc.
The main source of revenue of Zomoto is advertising, by placing advertisements of restaurants
on their websites and app. As is known, 80% of their revenue comes from direct advertising
of restaurants on their websites and apps, and about 5% from ticketing. Balance comes from
various advisory sources.
Company Financials and Growth Pattern

A very important and genius approach adopted by the company was that their cash graph was
almost horizontal, only slightly rising to sustain interest of their investors or shareholders.
This was against the fact that the company started only with an idea and zero cash, and had
absorbed five major investments which were also proportionately increasing. Still the company
was showing losses.
The company was very clever to handle its finances. It can be seen their growth has been
almost vertical before 2008 and also thereafter. They went on investing all their earnings for
expansion, be it in India or abroad. Thus, they were avoiding any surplus cash and profits.
This meant low taxes, and low wastage. The credit goes to their idea of the food sector which
was really an ocean. The company spent all its earnings into expansion. Their major investor
Naukri.com was very well aware of the potential in this line, and the potential of the company
to grab these opportunities.
The company was continuously growing at a phenomenal rate. Not only they had absorbed
all investments but had taken only that much money from Info Edge which they could invest
in that financial year. In 2011 when they were a small company, after taking $2.5 billion from
investors, they dared to buy New Zealand’s Menu-Mania for a whooping sum of nearly $2
billion. This may not look appreciable amount, but it showed their determination to take over
the world. At a time when their own worth was not much, this was certainly a very daring,
risk taking and well calculated business disrupting act.
They had not made many big investments like this at many places, but had been continuously
expanding city by city. Even after having a foothold in Chile recently, the company announced
to spend another $2 billion on expansion that quarter of the year 2014 itself.
The actual expenses were very low. They spent only 3% as internet related expenses, but
about 35% was spent on manpower used for business analysis, expansion and to maintain
one of the largest customer data. They invested another 35% on advertising and promotion.
A substantial part of earnings was being passed on to the shareholders at a rate of Rs 2.5 per
share in FY 2013-14, in addition to an approved dividend of Rs 1.5. This kept their investors
happy on the stock exchange both at NSC as well as Bombay Stock Exchange. As is evident
from their 2013 balance sheet and partial 2014 projections, the company had been earning
more revenue year after year. But they have been spending at a greater rate – resulting in losses
in balance. After the company got an investment of Rs 226 crores from their prime investors,
the company was losing its financial autonomy, and control was to go in the hands of principal
investors, who was having a share from 51% to 57%. So the company had no option but to
go for public shares in a very big way very soon. This was to happen in 2015 or even in last
quarter of 2014.
EXTERNAL FACTORS
An Indian Company Started by an IITian
Since most of the food hunters found online were educated people mainly engineering students,
so at that time it was a matter of pride for an Indian company to give them advice. Moreover
the company people understood very well the need of their site visitors. So there was 100%
matching. This innovative method of choosing a restaurant, a bar or a club was also very safe
and clean.
Zomato was providing advice to save everybody’s time and money. The grading they provided
from 1 to 5 was already tested and used in Bombay by the BMC for almost 50 years now, and
restaurants charge according to their grades. So it gave an economic understanding of the
restaurant, bar or club. Furthermore, Zomato provided a platform for social interaction; firstly
by giving them an idea what kind of gentry and what kind of an ambience will be there at the
restaurant, bar or club. They went further in to provide ‘FREE KI ADVISE’ from other fellows.
They went way ahead when they offered a platform from where you could advise others and
were virtually present on the Zomato site without paying anything.
Pankaj Chaddah, co-founder and COO of Zomato once said, “People rely heavily on regular
recommendations and feedbacks from friends, family and relatives while looking for eateries.
Our main motive was to cater this business through social networking. Also our main motive
was to create a product or service that would encompass restaurant search, discovery, and be
one that our users would enjoy using. Making sure that the users are engaged and maintaining
a content platform are important aspects that need to be addressed in future times.” Searching
for restaurants was now quicker than ever. Most of the revenue in financial year 2012–13
entirely from online advertising and 2013–14, the company claimed of making higher profits.
As they planned to enter Scotland, Zomato would surely benefit from Scotland’s vibrant society,
industry sectors, its talent pool and business-friendly environment.
Zomato exploited all popular technologies such as presence on internet and apps for different
mobiles. This was certainly a very timely and smart move. Their clients could be always in
touch with Zomato in this way. In the bottom of the screen, these apps also flashed restaurant
advertisements to motivate the customers further.
CHALLENGES FOR FUTURE

It’s a high time for Zomato to go public and launch its IPO. It is in its investment phase and
the funds will help Zomato to expand itself even further. Currently ZOMATO is available in
only English, so it creates a language barrier and people who are not very comfortable with
English cannot use Zomato even if they want. They have already planned to launch a Thai, a
Portuguese and Spanish version of the site in the coming future. At present, ZOMATO may be
calculating and preparing itself for the launch of public shares and proposing new projects side
by side to make the offer more lucrative. Currently, Zomato is operational in 11 countries and
it should expand its reach to other countries and earn a global reputation. Zomato is already
planning to expand to 18 to 20 countries in the coming few years. Zomato is also thinking
to acquire few more startups as this could help them greatly in the coming future. One great
addition to the millions of services offered to Zomato would be the option of advance booking
of seats at various restaurants from the website itself.
Zomato was pondering to start offering food coupons or discount coupons for its customers
going for online booking and reservations; this would attract a large audience. Zomato could
also start its own service centers because a large chunk of people cannot use internet properly
and are not very active on it. So if customers can directly call on the service centers and ask
about restaurants types they want to go to or any other related queries then this could lead to
an even better customer satisfaction. Zomato also wanted to expand its reach to rural areas as
India is a country with huge rural areas and people have no internet access so it is an untapped
market for the company to explore. Restaurants’ phone numbers on the Zomato website are
very frequently not working and thus the firm was trying to rectify that issue and keep a record
of all the changes in the restaurants details.
So far the policy of the company had been very consistent, simply expanding the same old
work and putting them on website. However the company would sooner require going for path
break-through innovation, as they meet competition and business threats. With their pres-
ence on several continents now, most probably they would aspire to become a major player
of internet based services. Anyway their present business is far away from being saturated so
soon.
A threat came their way when they started their operation in Singapore and found that
restaurants were not willing to disclose their menus on the internet, or even being photo-
graphed. They have been having a different culture and would not like to accept Zomato
offers even of free advertisement launching. This non-cooperation resulted in sudden losses to
the company and they were forced to windup their operations in Singapore. It all depends on
the kind of response the company gets on the stock exchange for public investment that the
company will have to think of using the money. So far their expansion has been satisfactory,
and the company never collected enough to worry about investing in portfolios.
The major investor Info Edge would not like to meddle with many takeovers by Zomato for
two reasons: it would be cannibalism or an act of eating itself. Moreover, the policy of Info
Edge is to let various companies grow around them like Shiksha.com, Jeevansathi.com, and
Naukri.com. Thus they are primarily venture capitalists.
Zomato has understood the importance of skilled manpower. They have recently launched
a scheme for prospective employees to come and prove themselves within a week with all
expenses paid. At present Zomato may be calculating and preparing itself for the launch of
public shares and proposing new projects side by side to make the offer more lucrative. Also,
a time will come for experimentation with this sort of money. We may see some forced diver-
sification of the business taking place in very near future!!

1. Does all the business models of Zomato make sense? Conduct a detailed customer
expectation analysis.
2. What is your assessment of the changing industry and its impact on company?
3. How effective has the firm been in gaining competitive advantage in the industry?
REFERENCES
1. http://startupadda.in/ (accessed 22 February 2015).
2. http://techcrunch.com/2014/08/21/zomato-cee/ (accessed 28 August 2014).
3. http://trpc.biz/ (accessed 28 February 2016).
4. http://yourstory.com/2014/11/zomato-branding-logo/ (accessed 30 July 2014).
5. http://www.bgconfidential.ae/little-black-book/sales-manager-needed/ (accessed 30 April 2015).
6. https://www.zomato.com/ (accessed 23 August 2014).
Dr. Reddy’s Laboratories:
Entry in German Market
Case Context
Standing near the window of his cabin, Mr Sethi was pondering on the decision he took as
the CEO of Dr Reddy Laboratory (DRL) to acquire Betapharm in 2006. On the morning of
15 February 2016, it was calm and serene outside, but things were different on this side
of the glass. The company had acquired a giant as Betapharm, the fourth-largest generic
drug manufacturer in Germany. But things have been gloomy since then. Losses have
increased over the years and the situation is not getting any better.
As he gets ready to face the Board in the General Meeting due next week, he has some
task in his hand. The board is unanimous on the decision to go for further expansion of
the $2.3 billion company. However, there is still an underlying fear that things might not
turn right, and what if there’s another acquisition like Betapharm.
INTRODUCTION
Based out of Hyderabad, India, Dr Reddy’s was founded in 1984 by Anjani Reddy, a scientist
and entrepreneur. The company manufactured and promoted an extensive range of pharma-
ceuticals in India and abroad for Dr. Reddy’s product mix in FY2015 (Exhibit 3.1). In 2015, the
company had Net Revenue of US$ 2.38 billion and Net income of US$ 356 million as Revenues
and Net Profit (Exhibits 3.2(a) and 3.2(b)). Norilet was the company’s first major brand in
India after which a series of successes followed, starting with Omez, the branded omeprazole.
By 1987, DRL was the only Indian company exporting active elements for pharmaceuticals
to European nations. It was only at the end of year that the company got into the business of
manufacturing pharmaceutical products rather than just an exporter of active elements. As per
a study by Trust Research Advisory (2015), a brand analytics company, Dr Reddy’s ranked
among 1200 of India’s most trusted brands.
GLOBAL PHARMACEUTICAL MARKET

The pharmaceutical business sector had encountered some significant challenges in BRIC
countries. The emerging markets were rapidly getting up to speed to those of developed nations
like North America, Europe and Japan. The North American industry expanded by 12% while
Latin America’s incomes expanded by 17% in 2014. Emerging markets comprised 23% of the
industries fairly estimated worth in 2014, in contrast with just 13% in 2006. Countries such
as China were quickly transforming the pharmaceutical sector. China’s five-year arrangement
from 2011 to 2015 was expected to redesign the health care framework and expansion protec-
tion scope (see Exhibit 3.3 for global revenue of pharmaceutical industry). Government jolt,
expanded health mindfulness and enhanced R&D abilities had driven China’s pharmaceutical
industry development. An inexorably huge and maturing population had further extended the
healthcare framework. The nation produced $109.3 billion as pharmaceutical industry income
in 2014. The pharmaceutical industry in countries such as China had numerous open doors
that were helpful for its development (Exhibit 3.4).
In 2013, the North American pharmaceutical business sector created 322.5 billion Euros
in income while Asia, Africa and Australia, aggregately, represented 246.8 billion Euros alto-
gether. Dr. Reddy’s Global presence was also evident to share some portion of this revenue
(Exhibits 3.5 and 3.1). In 2015, the worldwide pharmaceutical industry was worth right around
1.1 trillion US dollars in business sector esteem.
INDIAN PHARMACEUTICAL MARKET

As far as volume was concerned, the Indian pharmaceuticals business sector was the third
biggest. And as for worth, it stood thirteenth all-inclusive, according to a report by Equity
Master. Out of aggregate business sector, branded generics constituted 70 to 80% of the overall
industry. India was the biggest supplier of nonexclusive medications comprehensively with the
Indian generics representing 20% of worldwide fares regarding volume. Recently, union had
turned into a critical normal for the Indian pharmaceutical business sector as the industry was
exceptionally fragmented.
India appreciated an essential position in the worldwide pharmaceuticals part. The nation
likewise had a huge pool of researchers and architects who could possibly control the industry
ahead to a considerably more elevated amount.
The UN-sponsored Medicines Patent Pool had marked six sub-licenses with Aurobindo,
Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, permitting them to make non-specific
against AIDS drug Tenofovir Alafenamide (TAF) for 112 creating nations.
GROWING MARKET IN INDIA

The Indian pharmaceutical industry was estimated to grow at 20% compound annual growth
rate (CAGR) over the next five years according to India Ratings, a Fitch company (2015).
The Indian pharmaceutical industry, which relied upon to develop more than 15% for each
annum somewhere around 2015 and 2020, will beat the worldwide pharmaceutical industry,
which was set to develop at a yearly rate of 5 percent between the same periods. In the blink
of an eye the business sector size of the pharmaceutical industry in India remained at US$
20 billion. As on March 2014, Indian pharmaceutical assembling offices enrolled with the US
Food and Drug Administration (FDA) remained at 523, most elevated for any nation outside
the United States.
Indian pharmaceutical firms were peering toward acquisition opportunities in Japan’s devel-
oping generic business sector as the Japanese government expected to build the entrance of
Dr. Reddy’s Laboratories: Entry in German Market 29
generic medications to 60 percent of the business sector by 2017 from 30 percent in 2014,
because of maturing population and rising well-being costs.
India’s pharmaceuticals industry contained, bio-pharmaceuticals, bio-services, bio-horticul-
ture, bio-industry and bioinformatics, was growing at a rate of around 30% per year and was
estimated to achieve US$ 100 billion by 2025. Biopharma, involving immunisations, therapeu-
tics and diagnostics, was the biggest sub-segment contributing almost 62% of the aggregate
incomes at Rs 12,600 crore (US$ 1.9 billion).
EXPANDING INTERNATIONAL
Russia was the first location in Dr Reddy’s quest to expand global in 1992. Here, the company
went into joint venture with Biomed, Russia’s biggest pharmaceuticals manufacturer. However,
the success of Joint Venture was short lived and in a span of 3 years, Dr Reddy’s sold the same
to Kremlin-friendly Sistema group. It was a scandal that led to major financial setback, forcing
the company to take the extreme step. However, by 1993, Dr Reddy’s had entered into another
Joint Venture in the Middle East. Amidst this, the company had setup a couple of formulation
units which proved to be the game changer. Now, the company would export active pharma-
ceutical ingredients to these units which would then convert them to finished products. It was
in 1994 that Dr Reddy’s started to look beyond Europe and Middle East and it was at that time
that the United States came into its radar. The company then started building state of the art
manufacturing facilities in the states and focused on the US generic market.
Dr. Reddy’s Laboratories was also planning to extend its access in Europe and develop its
proprietary products business through the next two years. The organisation was looking to
go ahead through mergers and acquisitions. DRL was doing good business in USA, earning
around 45% revenue and Russia becoming the second largest market abroad. In the United
States, pharmaceutical organisations faced stiff competition and tight regulations.
Europe (excluding Russia) contributed just four percent to the total income and Dr Reddy’s
was looking forward to grow the business in France, Italy and Spain in the coming years.
At present, the proprietary products contributed three to four in revenues and the
company would like to develop the share and expect approval from the US Food and Drug
Administration.
The organisation would anticipate that the proprietary business to grow sizably in the next
three to four years.
ENTRY IN EUROPEAN MARKET

DRL’s entry into Europe could be categorised according to its business portfolio. The business
portfolio of DRL business processes could be broadly categorised as: Research and Development
(R&D); Active Pharmaceutical Ingredients (API) and Formulations. R&D included estab-
lishing R&D centers and undertaking R&D initiatives in overseas; API is a chemical molecule
in a pharma product that gave the claimed therapeutic effect; formulations produced API and
then also manufactured final product and this was the end product of the medicine manufac-
turing process.
In 1987, DRL started to export APIs to Europe and thus became the first Indian phar-
maceutical company to export APIs to Europe. DRL strengthened its European operations
with the acquisition of two pharmaceutical firms in the United Kingdom in 2002. BMS Labs
and Meridian were the two firms, which were acquired by DRL and thus allowed Reddy’s
to expand geographically in the European market. In the late 2000, DRL installed two R&D
centers for generics research; one in the UK and one in Netherlands. In spite of its continuous,
acquisitions and expansion strategies in Europe, the European continent contributed only 4%
revenue to DRL in the early 2000.
DRL’S Challenges
DRL had few setbacks in early 2000s against pharmaceutical industry giants Novo Nordisk
and Pfizer. Its foray into drug discovery led the Indian pharmaceutical giant into a huge loss;
profits had fallen down to 87.3% from 2003 to 2004. Also the initiatives of Big Pharmaceutical
companies of the US to pre-empt generic companies from eating into their sales, made US a
battleground for DRL. DRL, in order to achieve its vision of becoming a billion dollar company;
to move forward with its geographical expansion strategy and to overcome its losses started
courting Betapharm.
ROLE OF GOVERNMENT
Dr Reddy’s gave a high measure of annual tax to the government for producing, importing and
exporting items. The new regulations in Indian Drug Pricing Policy termed the drug pricing
as irrational and unreasonable. A government committee investigated the drug pricing mecha-
nism, as there had been claims that the organisations were making huge margins, which goes
very high. This prompted higher costs and contract net revenues which burdened for both, the
company and the industry.
Furthermore, Russia had passed a law, which mandated pharmaceutical suppliers to setup
local plants in order to get the permit of distributing their items in the Russian market. This
would prompt higher tax assessment in the Russian market too. Nonetheless, the relationship
between Dr Reddy and Russia suggested that the company is supportive of such a thought as
it would open its new supply channels towards Eastern European nations. A special purpose
program supported the rebuilding of the Russian pharmaceutical industry, which proved to be
beneficial for Dr Reddy’s to deliver in future in this market.
BETAPHARM ACQUISITION
Around 66% of the world’s second largest European generic market was held by Germany.
Betapharm, which was acquired by a US-based private equity firm 3i in 2004, was the fourth
largest generic pharma company in Germany. Being one of the established ‘one-stop-shops’ of
the German generic market, Betapharm also had a well-established distribution channels in
Germany. Stalking the Betapharm for over two years, finally in February 2006, DRL acquired
100% stake in Betapharm for $560 million, which was considered as India’s first major Merger
and Acquisition in pharmaceutical sector.
GERMAN HEALTHCARE SECTOR REFORMS

Having the world’s oldest national health insurance system, the German healthcare system had
been funded by mandatory public and private health insurance schemes. Germany recorded
a high healthcare expenditure of about 10.7% of GDP. The cost of drugs were increasing
substantially; around 60% from 1990s to 2000s. In order to contain the rise in costs, the
government started to introduce reforms in a phased manner beginning in 2004. The most
important change was the transition of German healthcare system to a “tender-based” system,
which transformed the attractive generics market to a commoditised one.
CONSEQUENCES FACED
The overnight change of the German healthcare sector gave a huge blow to the DRL. In the
fourth quarter ended 31 March 2007, DRL’s EBIDTA dropped to 16%. The results of the
failure of this deal were also witnessed in the domestic market. There was no new product
launch in the Indian market unlike its competitors, thereby losing its position as one of the top
ten pharmaceutical companies in the domestic market in the year 2008–09.
DRL took a big gamble when it was already facing setbacks in the US generic market, DRL’s
biggest overseas generic market. True to what analysts has said, the German healthcare market
changed almost overnight. German government’s healthcare sector reforms brought down the
drug prices and thus its aim of securing access to the second largest lucrative German market
after the US turned into a liability.
DECISION AT HAND
The company is looking to move forward after the setback of Betapharm. The board is counting
on global expansion to give much needed fresh breath to the company. Mr Sethi will be a vital
person that the board will look upon, when they deliberate different strategies required to go
further global.
Mistakes have been committed in the past and all the decisions from here on need to be well
inspected to make sure that things fall in place. As the Chief Financial Officer, Umang Vohra
quoted, “We realised we should make acquisitions that improved the capabilities within the
organisation, against buying a company in some market that merely increased the turnover”.
Dr Reddy’s in all likelihood would like to go for joint ventures, mergers and acquisitions in its
spree of further global expansion.
Sethi and his team now have a task of penning various considerations the company needs to
take into account before they start with the big task of going global. Should they refrain from
acquiring giants in order to keep future risks low? Should the company be bowed down by the
fact that they failed big time in Betapharm and should they now go slow? Should they go for
Greenfield investment or should they trust again on mergers and acquisitions?
There are lot such questions left to be answered but it is time in hand that is limited. A week
is not much to contemplate over such major issues. For this, he has arranged a meeting with
his counterparts due to arrive the next day from various international offices of Dr Reddy’s.

1. What were the main reasons behind the failure of Dr. Reddy’s labs acquisition of Betapharm?
2. What are the points DRL should think before taking a decision to expand their business through
acquisition?
3. What would your recommendations to Mr Sethi?
EXHIBITS
Exhibit 3.1 Dr. Reddy’s Product Mix FY2015
1%
18%
81%
Global Generics
Pharmaceutical Services & Active Ingredients
Proprietary Products & Others
Exhibit 3.2(a) Net Revenue of Dr. Reddy’s Laboratories

Exhibit 3.2(b) Net Profit of Dr. Reddy’s Laboratories
Exhibit 3.3 Global Revenue of Pharmaceutical Industry (USD)

Exhibit 3.4 Region Wise Sales Breakup
Exhibit 3.5 Dr. Reddy’s Global Presence
REFERENCES
1. http://forbesindia.com/printcontent/21482 (accessed 12 March 2016).
2. http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing%2F347%2F1
(accessed 10 February 2016).
Theme III
Industry Analysis
Case 4. Linking
the World’s
Professionals
Case 5. Airtel Zero
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Clifford rarely talked much at these times. He never held forth; his
ideas were really not vital enough for it, he was too confused and
emotional. Now he blushed and looked uncomfortable.
"Well!" he said, "being myself hors de combat, I don't see I've
anything to say on the matter."
"Not at all," said Dukes; "the top of you's by no means hors de
combat. You've got the life of the mind sound and intact. So let us
hear your ideas."
"Well," stammered Clifford, "even then I don't suppose I have much
idea ... I suppose marry-and-have-done-with-it would pretty well
stand for what I think. Though of course between a man and woman
who care for one another, it is a great thing."
"What sort of great thing?" said Tommy.
"Oh ... it perfects the intimacy," said Clifford, uneasy as a woman in
such talk.
"Well, Charlie and I believe that sex is a sort of communication like
speech. Let any woman start a sex conversation with me, and it's
natural for me to go to bed with her to finish it, all in due season.
Unfortunately no woman makes any particular start with me, so I go
to bed by myself; and am none the worse for it.... I hope so anyway,
for how should I know? Anyhow I've no starry calculations to be
interfered with, and no immortal works to write. I'm merely a fellow
skulking in the army...."
Silence fell. The four men smoked. And Connie sat there and put
another stitch in her sewing.... Yes, she sat there! She had to sit
mum. She had to be quiet as a mouse, not to interfere with the
immensely important speculations of these highly-mental gentlemen.
But she had to be there. They didn't get on so well without her; their
ideas didn't flow so freely. Clifford was much more edgy and
nervous, he got cold feet much quicker in Connie's absence, and the
talk didn't run. Tommy Dukes came off best; he was a little inspired
by her presence. Hammond she didn't really like; he seemed so
selfish in a mental way. And Charles May, though she liked
something about him, seemed a little distasteful and messy, in spite
of his stars.
How many evenings had Connie sat and listened to the
manifestations of these four men! these, and one or two others. That
they never seemed to get anywhere didn't trouble her deeply. She
liked to hear what they had to say, especially when Tommy was
there. It was fun. Instead of men kissing you, and touching you with
their bodies, they revealed their minds to you. It was great fun! But
what cold minds!
And also it was a little irritating. She had more respect for Michaelis,
on whose name they all poured such withering contempt, as a little
mongrel arriviste, and uneducated bounder of the worst sort.
Mongrel and bounder or not, he jumped to his own conclusions. He
didn't merely walk round them with millions of words, in the parade of
the life of the mind.
Connie quite liked the life of the mind, and got a great thrill out of it.
But she did think it overdid itself a little. She loved being there,
amidst the tobacco smoke of those famous evenings of the cronies,
as she called them privately to herself. She was infinitely amused,
and proud too, that even their talking they could not do without her
silent presence. She had an immense respect for thought ... and
these men, at least, tried to think honestly. But somehow there was a
cat, and it wouldn't jump. They all alike talked at something, though
what it was, for the life of her she couldn't say. It was something that
Mick didn't clear, either.
But then Mick wasn't trying to do anything, but just get through his
life, and put as much across other people as they tried to put across
him. He was really anti-social, which was what Clifford and his
cronies had against him. Clifford and his cronies were not anti-social;
they were more or less bent on saving mankind, or on instructing it,
to say the least.
There was a gorgeous talk on Sunday evening, when the
conversation drifted again to love.
"Blest be the tie that binds

Our hearts in kindred something-or-other"—
said Tommy Dukes. "I'd like to know what the tie is.... The tie that
binds us just now is mental friction on one another. And, apart from
that, there's damned little tie between us. We bust apart, and say
spiteful things about one another, like all the other damned
intellectuals in the world. Damned everybodies, as far as that goes,
for they all do it. Else we bust apart, and cover up the spiteful things
we feel against one another by saying false sugaries. It's a curious
thing that the mental life seems to flourish with its roots in spite,
ineffable and fathomless spite. Always has been so! Look at
Socrates, in Plato, and his bunch round him! The sheer spite of it all,
just sheer joy in pulling somebody else to bits.... Protagoras, or
whoever it was! And Alcibiades, and all the other little disciple dogs
joining in the fray! I must say it makes one prefer Buddha, quietly
sitting under a bo-tree, or Jesus, telling his disciples little Sunday
stories, peacefully, and without any mental fireworks. No, there's
something wrong with the mental life, radically. It's rooted in spite
and envy, envy and spite. Ye shall know the tree by its fruit."
"I don't think we're altogether so spiteful," protested Clifford.
"My dear Clifford, think of the way we talk each other over, all of us.
I'm rather worse than anybody else, myself. Because I infinitely
prefer the spontaneous spite to the concocted sugaries; now they
are poison; when I begin saying what a fine fellow Clifford is, etc, etc,
then poor Clifford is to be pitied. For God's sake, all of you, say
spiteful things about me, then I shall know I mean something to you.
Don't say sugaries, or I'm done."
"Oh, but I do think we honestly like one another," said Hammond.
"I tell you we must ... we say such spiteful things to one another,
about one another, behind our backs! I'm the worst."
"And I do think you confuse the mental life with the critical activity. I
agree with you, Socrates gave the critical activity a grand start, but
he did more than that," said Charlie May, rather magisterially. The
cronies had such a curious pomposity under their assumed modesty.
It was all so ex cathedra, and it all pretended to be so humble.
Dukes refused to be drawn about Socrates.
"That's quite true, criticism and knowledge are not the same thing,"
said Hammond.
"They aren't, of course," chimed in Berry, a brown, shy young man,
who had called to see Dukes, and was staying the night.
They all looked at him as if the ass had spoken.
"I wasn't talking about knowledge.... I was talking about the mental
life," laughed Dukes. "Real knowledge comes out of the whole
corpus of the consciousness; out of your belly and your penis as
much as out of your brain and mind. The mind can only analyse and
rationalise. Set the mind and the reason to cock it over the rest, and
all they can do is to criticise, and make a deadness. I say all they
can do. It is vastly important. My God, the world needs criticising
today ... criticising to death. Therefore let's live the mental life, and
glory in our spite, and strip the rotten old show. But, mind you, it's
like this; while you live your life, you are in some way an organic
whole with all life. But once you start the mental life you pluck the
apple. You've severed the connection between the apple and the
tree: the organic connection. And if you've got nothing in your life but
the mental life, then you yourself are a plucked apple ... you've fallen
off the tree. And then it is a logical necessity to be spiteful, just as it's
a natural necessity for a plucked apple to go bad."
Clifford made big eyes: it was all stuff to him. Connie secretly
laughed to herself.
"Well then, we're all plucked apples," said Hammond, rather acidly
and petulantly.
"So let's make cider of ourselves," said Charlie.
"But what do you think of Bolshevism?" put in the brown Berry, as if
everything had led up to it.
"Bravo!" roared Charlie. "What do you think of Bolshevism?"
"Come on! Let's make hay of Bolshevism!" said Dukes.
"I'm afraid Bolshevism is a large question," said Hammond, shaking
his head seriously.
"Bolshevism, it seems to me," said Charlie, "is just a superlative
hatred of the thing they call the bourgeois; and what the bourgeois
is, isn't quite defined. It is Capitalism, among other things. Feelings
and emotions are also so decidedly bourgeois that you have to
invent a man without them.
"Then the individual, especially the personal man, is bourgeois: so
he must be suppressed. You must submerge yourselves in the
greater thing, the Soviet-social thing. Even an organism is bourgeois:
so the ideal must be mechanical. The only thing that is a unit, non-
organic, composed of many different, yet equally essential parts, is
the machine. Each man a machine-part, and the driving power of the
machine, hate ... hate of the bourgeois. That, to me, is Bolshevism."
"Absolutely!" said Tommy, "But also, it seems to me a perfect
description of the whole of the industrial ideal. It's the factory-owner's
ideal in a nut-shell; except that he would deny that the driving power
was hate. Hate it is, all the same: hate of life itself. Just look at these
Midlands, if it isn't plainly written up ... but it's all part of the life of the
mind, it's a logical development."
"I deny that Bolshevism is logical, it rejects the major part of the
premisses," said Hammond.
"My dear man, it allows the material premiss; so does the pure mind
... exclusively."
"At least Bolshevism has got down to rock bottom," said Charlie.
"Rock bottom! The bottom that has no bottom! The Bolshevists will
have the finest army in the world in a very short time, with the finest
mechanical equipment."
"But this thing can't go on ... this hate business. There must be a
reaction...." said Hammond.
"Well, we've been waiting for years ... we wait longer. Hate's a
growing thing like anything else. It's the inevitable outcome of forcing
ideas on to life, forcing one's deepest instincts; our deepest feelings
we force according to certain ideas. We drive ourselves with a
formula, like a machine. The logical mind pretends to rule the roost,
and the roost turns into pure hate. We're all Bolshevists, only we are
hypocrites. The Russians are Bolshevists without hypocrisy."
"But there are many other ways," said Hammond, "than the Soviet
way. The Bolshevists aren't really intelligent."
"Of course not. But sometimes it's intelligent to be half-witted: if you
want to make your end. Personally, I consider Bolshevism half-
witted; but so do I consider our social life in the west half-witted. So I
even consider our far-famed mental life half-witted. We're all as cold
as cretins, we're all as passionless as idiots. We're all of us
Bolshevists, only we give it another name. We think we're gods ...
men like gods! It's just the same as Bolshevism. One has to be
human, and have a heart and a penis if one is going to escape being
either a god or a Bolshevist ... for they are the same thing: they're
both too good to be true."
Out of the disapproving silence came Berry's anxious question:
"You do believe in love then, Tommy, don't you?"
"You lovely lad!" said Tommy. "No, my cherub, nine times out of ten,
no! Love's another of those half-witted performances today. Fellows
with swaying waists fucking little jazz girls with small boy buttocks,
like two collar studs! Do you mean that sort of love? Or the joint-
property, make-a-success-of-it, my-husband-my-wife sort of love?
No, my fine fellow, I don't believe in it at all!"
"But you do believe in something?"
"Me? Oh, intellectually I believe in having a good heart, a chirpy
penis, a lively intelligence, and the courage to say 'shit!' in front of a
lady."
"Well, you've got them all," said Berry.
Tommy Dukes roared with laughter. "You angel boy! If only I had! If
only I had! No; my heart's as numb as a potato, my penis droops and
never lifts its head up, I dare rather cut him clean off than say 'shit!'
in front of my mother or my aunt ... they are real ladies, mind you;
and I'm not really intelligent, I'm only a 'mental-lifer.' It would be
wonderful to be intelligent: then one would be alive in all the parts
mentioned and unmentionable. The penis rouses his head and says:
How do you do?—to any really intelligent person. Renoir said he
painted his pictures with his penis ... he did too, lovely pictures! I
wish I did something with mine. God! when one can only talk!
Another torture added to Hades! And Socrates started it."
"There are nice women in the world," said Connie, lifting her head up
and speaking at last.
The men resented it ... she should have pretended to hear nothing.
They hated her admitting she had attended so closely to such talk.
"My God!—'If they be not nice to me

What care I how nice they be?'—
"No, it's hopeless! I just simply can't vibrate in unison with a woman.
There's no woman I can really want when I'm faced with her, and I'm
not going to start forcing myself to it.... My God, no! I'll remain as I
am, and lead the mental life. It's the only honest thing I can do. I can
be quite happy talking to women; but it's all pure, hopelessly pure.
Hopelessly pure! What do you say, Hildebrand, my chicken?"
"It's much less complicated if one stays pure," said Berry.
"Yes, life is all too simple!"
CHAPTER V
On a frosty morning with a little February sun, Clifford and Connie
went for a walk across the park to the wood. That is, Clifford chuffed
in his motor-chair, and Connie walked beside him.
The hard air was still sulphureous, but they were both used to it.
Round the near horizon went the haze, opalescent with frost and
smoke, and on the top lay the small blue sky; so that it was like
being inside an enclosure, always inside. Life always a dream or a
frenzy, inside an enclosure.
The sheep coughed in the rough, sere grass of the park, where frost
lay bluish in the sockets of the tufts. Across the park ran a path to
the woodgate, a fine ribbon of pink. Clifford had had it newly
gravelled with sifted gravel from the pit-bank. When the rock and
refuse of the underworld had burned and given off its sulphur, it
turned bright pink, shrimp-coloured on dry days, darker, crab-
coloured on wet. Now it was pale shrimp-colour, with a bluish-white
hoar of frost. It always pleased Connie, this underfoot of sifted, bright
pink. It's an ill-wind that brings nobody good.
Clifford steered cautiously down the slope of the knoll from the hall,
and Connie kept her hand on the chair. In front lay the wood, the
hazel thicket nearest, the purplish density of oaks beyond. From the
wood's edge rabbits bobbed and nibbled. Rooks suddenly rose in a
black train, and went trailing off over the little sky.
Connie opened the woodgate, and Clifford puffed slowly through into
the broad riding that ran up an incline between the clean-whipped
thickets of the hazel. The wood was a remnant of the great forest
where Robin Hood hunted, and this riding was an old, old
thoroughfare coming across country. But now, of course, it was only
a riding through the private wood. The road from Mansfield swerved
round to the north.
In the wood everything was motionless, the old leaves on the ground
keeping the frost on their underside. A jay called harshly, many little
birds fluttered. But there was no game; no pheasants. They had
been killed off during the war, and the wood had been left
unprotected, till now Clifford had got his gamekeeper again.
Clifford loved the wood; he loved the old oak trees. He felt they were
his own through generations. He wanted to protect them. He wanted
this place inviolate, shut off from the world.
The chair chuffed slowly up the incline, rocking and jolting on the
frozen clods. And suddenly, on the left, came a clearing where there
was nothing but a ravel of dead bracken, a thin and spindly sapling
leaning here and there, big sawn stumps, showing their tops and
their grasping roots, lifeless. And patches of blackness where the
woodmen had burned the brushwood and rubbish.
This was one of the places that Sir Geoffrey had cut during the war
for trench timber. The whole knoll, which rose softly on the right of
the riding, was denuded and strangely forlorn. On the crown of the
knoll where the oaks had stood, now was bareness; and from there
you could look out over the trees to the colliery railway, and the new
works at Stacks Gate. Connie had stood and looked, it was a breach
in the pure seclusion of the wood. It let in the world. But she didn't
tell Clifford.
This denuded place always made Clifford curiously angry. He had
been through the war, had seen what it meant. But he didn't get
really angry till he saw this bare hill. He was having it replanted. But
it made him hate Sir Geoffrey.
Clifford sat with a fixed face as the chair slowly mounted. When they
came to the top of the rise he stopped; he would not risk the long
and very jolty downslope. He sat looking at the greenish sweep of
the riding downwards, a clear way through the bracken and oaks. It
swerved at the bottom of the hill and disappeared; but it had such a
lovely easy curve, of knights riding and ladies on palfreys.
"I consider this is really the heart of England," said Clifford to Connie,
as he sat there in the dim February sunshine.
"Do you?" she said, seating herself, in her blue knitted dress, on a
stump by the path.
"I do! this is the old England, the heart of it; and I intend to keep it
intact."
"Oh yes!" said Connie. But, as she said it she heard the eleven-
o'clock hooters at Stacks Gate colliery. Clifford was too used to the
sound to notice.
"I want this wood perfect ... untouched. I want nobody to trespass in
it," said Clifford.
There was a certain pathos. The wood still had some of the mystery
of wild, old England; but Sir Geoffrey's cuttings during the war had
given it a blow. How still the trees were, with their crinkly,
innumerable twigs against the sky, and their grey, obstinate trunks
rising from the brown bracken! How safely the birds flitted among
them! And once there had been deer, and archers, and monks
padding along on asses. The place remembered, still remembered.
Clifford sat in the pale sun, with the light on his smooth, rather blond
hair, his reddish full face inscrutable.
"I mind more, not having a son, when I come here, than any other
time," he said.
"But the wood is older than your family," said Connie gently.
"Quite!" said Clifford. "But we've preserved it. Except for us it would
go ... it would be gone already, like the rest of the forest. One must
preserve some of the old England!"
"Must one?" said Connie. "If it has to be preserved, and preserved
against the new England? It's sad, I know."
"If some of the old England isn't preserved, there'll be no England at
all," said Clifford. "And we who have this kind of property, and the
feeling for it, must preserve it."
There was a sad pause.
"Yes, for a little while," said Connie.
"For a little while! It's all we can do. We can only do our bit. I feel
every man of my family has done his bit here, since we've had the
place. One may go against convention, but one must keep up
tradition." Again there was a pause.
"What tradition?" asked Connie.
"The tradition of England! of this!"
"Yes," she said slowly.
"That's why having a son helps; one is only a link in a chain," he
said.
Connie was not keen on chains, but she said nothing. She was
thinking of the curious impersonality of his desire for a son.
"I'm sorry we can't have a son," she said.
He looked at her steadily, with his full, pale-blue eyes.
"It would almost be a good thing if you had a child by another man,"
he said. "If we brought it up at Wragby, it would belong to us and to
the place. I don't believe very intensely in fatherhood. If we had the
child to rear, it would be our own, and it would carry on. Don't you
think it's worth considering?"
Connie looked up at him at last. The child, her child, was just an "it"
to him. It ... it ... it!
"But what about the other man?" she asked.
"Does it matter very much? Do these things really affect us very
deeply?... You had that lover in Germany ... what is it now? Nothing
almost. It seems to me that it isn't these little acts and little
connections we make in our lives that matter so very much. They
pass away, and where are they? Where.... Where are the snows of
yesteryear?... It's what endures through one's life that matters; my
own life matters to me, in its long continuance and development. But
what do the occasional connections matter? And the occasional
sexual connections specially! If people don't exaggerate them
ridiculously, they pass like the mating of birds. And so they should.
What does it matter? It's the life-long companionship that matters.
It's the living together from day to day, not the sleeping together once
or twice. You and I are married, no matter what happens to us. We
have the habit of each other. And habit, to my thinking, is more vital
than any occasional excitement. The long, slow, enduring thing ...
that's what we live by ... not the occasional spasm of any sort. Little
by little, living together, two people fall into a sort of unison, they
vibrate so intricately to one another. That's the real secret of
marriage, not sex; at least not the simple function of sex. You and I
are interwoven in a marriage. If we stick to that we ought to be able
to arrange this sex thing, as we arrange going to the dentist; since
fate has given us a checkmate physically there."
Connie sat and listened in a sort of wonder, and a sort of fear. She
did not know if he was right or not. There was Michaelis, whom she
loved; so she said to herself. But her love was somehow only an
excursion from her marriage with Clifford; the long, slow habit of
intimacy, formed through years of suffering and patience. Perhaps
the human soul needs excursions, and must not be denied them. But
the point of an excursion is that you come home again.
"And wouldn't you mind what man's child I had?" she asked.
"Why, Connie, I should trust your natural instinct of decency and
selection. You just wouldn't let the wrong sort of fellow touch you."
She thought of Michaelis! He was absolutely Clifford's idea of the
wrong sort of fellow.
"But men and women may have different feelings about the wrong
sort of fellow," she said.
"No," he replied. "You cared for me. I don't believe you would ever
care for a man who was purely antipathetic to me. Your rhythm
wouldn't let you."
She was silent. Logic might be unanswerable because it was so
absolutely wrong.
"And should you expect me to tell you?" she asked, glancing up at
him almost furtively.
"Not at all. I'd better not know.... But you do agree with me, don't you,
that the casual sex thing is nothing, compared to the long life lived
together? Don't you think one can just subordinate the sex thing to
the necessities of a long life? Just use it, since that's what we're
driven to? After all, do these temporary excitements matter? Isn't the
whole problem of life the slow building up of an integral personality,
through the years? living an integrated life? There's no point in a
disintegrated life. If lack of sex is going to disintegrate you, then go
out and have a love affair. If lack of a child is going to disintegrate
you, then have a child if you possibly can. But only do these things
so that you have an integrated life, that makes a long harmonious
thing. And you and I can do that together ... don't you think? ... if we
adapt ourselves to the necessities, and at the same time weave the
adaptation together into a piece with our steadily-lived life. Don't you
agree?"
Connie was a little overwhelmed by his words. She knew he was
right theoretically. But when she actually touched her steadily-lived
life with him she ... hesitated. Was it actually her destiny to go on
weaving herself into his life all the rest of her life? Nothing else?
Was it just that? She was to be content to weave a steady life with
him, all one fabric, but perhaps brocaded with the occasional flower
of an adventure. But how could she know what she would feel next
year? How could one ever know? How could one say Yes? for years
and years? The little yes, gone on a breath! Why should one be
pinned down by that butterfly word? Of course it had to flutter away
and be gone, to be followed by other yes's and no's! Like the
straying of butterflies.
"I think you're right, Clifford. And as far as I can see I agree with you.
Only life may turn quite a new face on it all."
"But until life turns a new face on it all, you do agree?"
"Oh yes! I think I do, really."
She was watching a brown spaniel that had run out of a side-path,
and was looking toward them with lifted nose, making a soft, fluffy
bark. A man with a gun strode swiftly, softly out after the dog, facing
their way as if about to attack them; then stopped instead, saluted,
and was turning down hill. It was only the new gamekeeper, but he
had frightened Connie, he seemed to emerge with such a swift
menace. That was how she had seen him, like the sudden rush of a
threat out of nowhere.
He was a man in dark-green velveteens and gaiters ... the old style,
with a red face and red moustache and distant eyes. He was going
quickly down hill.
"Mellors!" called Clifford.
The man faced lightly round, and saluted with a quick little gesture, a
soldier!
"Will you turn the chair round and get it started? That makes it
easier," said Clifford.
The man at once slung his gun over his shoulder, and came forward
with the same curious swift, yet soft movements, as if keeping
invisible. He was moderately tall and lean, and was silent. He did not
look at Connie at all, only at the chair.
"Connie, this is the new gamekeeper, Mellors. You haven't spoken to
her ladyship yet, Mellors?"
"No, Sir!" came the ready, neutral words.
The man lifted his hat as he stood, showing his thick, almost fair hair.
He stared straight into Connie's eyes, with a perfect, fearless,
impersonal look, as if he wanted to see what she was like. He made
her feel shy. She bent her head to him shyly, and he changed his hat
to his left hand and made her a slight bow, like a gentleman; but he
said nothing at all. He remained for a moment still, with his hat in his
hand.
"But you've been here some time, haven't you?" Connie said to him.
"Eight months, Madam ... your Ladyship!" he corrected himself
calmly.
"And do you like it?"
She looked him in the eyes. His eyes narrowed a little, with irony,
perhaps with impudence.
"Why, yes, thank you, your Ladyship! I was reared here...." He gave
another slight bow, turned, put his hat on, and strode to take hold of
the chair. His voice on the last words had fallen into the heavy broad
drag of the dialect ... perhaps also in mockery, because there had
been no trace of dialect before. He might almost be a gentleman.
Anyhow, he was a curious, quick, separate fellow, alone, but sure of
himself.
Clifford started the little engine, the man carefully turned the chair,
and set it nose-forwards to the incline that curved gently to the dark
hazel thicket.
"Is that all then, Sir Clifford?" asked the man.
"No, you'd better come along in case she sticks. The engine isn't
really strong enough for the uphill work." The man glanced round for
his dog ... a thoughtful glance. The spaniel looked at him and faintly
moved its tail. A little smile, mocking or teasing her, yet gentle, came
into his eyes for a moment, then faded away, and his face was
expressionless. They went fairly quickly down the slope, the man
with his hand on the rail of the chair, steadying it. He looked like a
free soldier rather than a servant. And something about him
reminded Connie of Tommy Dukes.
When they came to the hazel grove, Connie suddenly ran forward,
and opened the gate into the park. As she stood holding it, the two
men looked at her in passing, Clifford critically, the other man with a
curious, cool wonder; impersonally wanting to see what she looked
like. And she saw in his blue, impersonal eyes a look of suffering and
detachment, yet a certain warmth. But why was he so aloof, apart?
Clifford stopped the chair, once through the gate, and the man came
quickly, courteously, to close it.
"Why did you run to open?" asked Clifford in his quiet, calm voice,
that showed he was displeased. "Mellors would have done it."
"I thought you would go straight ahead," said Connie.
"And leave you to run after us?" said Clifford.
"Oh, well, I like to run sometimes!"
Mellors took the chair again, looking perfectly unheeding, yet Connie
felt he noted everything. As he pushed the chair up the steepish rise
of the knoll in the park, he breathed rather quickly, through parted
lips. He was rather frail really. Curiously full of vitality, but a little frail
and quenched. Her woman's instinct sensed it.
Connie fell back, let the chair go on. The day had greyed over: the
small blue sky that had poised low on its circular rims of haze was
closed in again, the lid was down, there was a raw coldness. It was
going to snow. All grey, all grey! the world looked worn-out.
The chair waited at the top of the pink path. Clifford looked round for
Connie.
"Not tired, are you?" he asked.
"Oh no!" she said.
But she was. A strange, weary yearning, a dissatisfaction had
started in her. Clifford did not notice: those were not things he was
aware of. But the stranger knew. To Connie, everything in her world
and life seemed worn-out, and her dissatisfaction was older than the
hills.
They came to the house, and round to the back, where there were
no steps. Clifford managed to swing himself over on to the low,
wheeled house-chair; he was very strong and agile with his arms.
Then Connie lifted the burden of his dead legs after him.
The keeper, waiting at attention to be dismissed, watched everything
narrowly, missing nothing. He went pale, with a sort of fear, when he
saw Connie lifting the inert legs of the man in her arms, into the other
chair, Clifford pivoting round as she did so. He was frightened.
"Thanks, then, for the help, Mellors," said Clifford casually, as he
began to wheel down the passage to the servants' quarters.
"Nothing else, Sir?" came the neutral voice, like one in a dream.
"Nothing, good morning!"
"Good morning, Sir."
"Good morning! it was kind of you to push the chair up that hill.... I
hope it wasn't heavy for you," said Connie, looking back at the
keeper outside the door.
His eyes came to hers in an instant, as if wakened up. He was aware
of her.
"Oh no, not heavy!" he said quickly. Then his voice dropped again
into the broad sound of the vernacular: "Good mornin' to your
Ladyship!"
"Who is your gamekeeper?" Connie asked at lunch.
"Mellors! You saw him," said Clifford.
"Yes, but where did he come from?"
"Nowhere! He was a Tevershall boy ... son of a collier, I believe."
"And was he a collier himself?"
"Blacksmith on the pit-bank, I believe: overhead smith. But he was
keeper here for two years before the war ... before he joined up. My
father always had a good opinion of him, so when he came back,
and went to the pit for a blacksmith's job, I just took him back here as
keeper. I was really very glad to get him ... it's almost impossible to
find a good man round here, for a gamekeeper ... and it needs a
man who knows the people."
"And isn't he married?"
"He was. But his wife went off with ... with various men ... but finally
with a collier at Stacks Gate, and I believe she's living there still."
"So this man is alone?"
"More or less! He has a mother in the village ... and a child, I
believe."
Clifford looked at Connie, with his pale, slightly prominent blue eyes,
in which a certain vagueness was coming. He seemed alert in the
foreground, but the background was like the Midlands atmosphere,
haze, smoky mist. And the haze seemed to be creeping forward. So
when he stared at Connie in his peculiar way, giving her his peculiar,
precise information, she felt all the background of his mind filling up
with mist, with nothingness. And it frightened her. It made him seem
impersonal, almost to idiocy.
And dimly she realised one of the great laws of the human soul: that
when the emotional soul receives a wounding shock, which does not
kill the body, the soul seems to recover as the body recovers. But
this is only appearance. It is really only the mechanism of the re-
assumed habit. Slowly, slowly the wound to the soul begins to make
itself felt, like a bruise, which only slowly deepens its terrible ache, till
it fills all the psyche. And when we think we have recovered and
forgotten, it is then that the terrible after-effects have to be
encountered at their worst.
So it was with Clifford. Once he was "well," once he was back at
Wragby, and writing his stories, and feeling sure of life, in spite of all,
he seemed to forget, and to have recovered all his equanimity. But
now, as the years went by, slowly, slowly, Connie felt the bruise of
fear and horror coming up, and spreading in him. For a time it had
been so deep as to be numb, as it were non-existent. Now slowly it
began to assert itself in a spread of fear, almost paralysis. Mentally
he still was alert. But the paralysis, the bruise of the too great shock,
was gradually spreading in his affective self.
And as it spread in him, Connie felt it spread in her. An inward dread,
an emptiness, an indifference to everything gradually spread in her
soul. When Clifford was roused, he could still talk brilliantly, and as it
were, command the future: as when, in the wood, he talked about
her having a child, and giving an heir to Wragby. But the day after, all
the brilliant words seemed like dead leaves, crumpling up and
turning to powder, meaning really nothing, blown away on any gust
of wind. They were not the leafy words of an effective life, young with
energy and belonging to the tree. They were the hosts of fallen
leaves of a life that is ineffectual.
So it seemed to her everywhere. The colliers at Tevershall were
talking again of a strike, and it seemed to Connie there again it was
not a manifestation of energy, it was the bruise of the war that had
been in abeyance, slowly rising to the surface and creating the great
ache of unrest, and stupor of discontent. The bruise was deep, deep,
deep ... the bruise of the false inhuman war. It would take many
years for the living blood of the generations to dissolve the vast black
clot of bruised blood, deep inside their souls and bodies. And it
would need a new hope.
Poor Connie! As the years drew on it was the fear of nothingness in
her life that affected her. Clifford's mental life and hers gradually
began to feel like nothingness. Their marriage, their integrated life
based on a habit of intimacy, that he talked about: there were days
when it all became utterly blank and nothing. It was words, just so
many words. The only reality was nothingness, and over it a
hypocrisy of words.
There was Clifford's success: the bitch-goddess! It was true he was
almost famous, and his books brought him in a thousand pounds.
His photograph appeared everywhere. There was a bust of him in
one of the galleries, and a portrait of him in two galleries. He seemed
the most modern of modern voices. With his uncanny lame instinct
for publicity, he had become in four or five years one of the best
known of the young "intellectuals." Where the intellect came in,
Connie did not quite see. Clifford was really clever at that slightly
humorous analysis of people and motives which leaves everything in
bits at the end. But it was rather like puppies tearing the sofa
cushions to bits; except that it was not young and playful, but
curiously old, and rather obstinately conceited. It was weird and it
was nothing. This was the feeling that echoed and re-echoed at the
bottom of Connie's soul: it was all nothing, a wonderful display of
nothingness. At the same time a display. A display! a display! a
display!
Michaelis had seized upon Clifford as the central figure for a play;
already he had sketched in the plot, and written the first act. For
Michaelis was even better than Clifford at making a display of
nothingness. It was the last bit of passion left in these men: the
passion for making a display. Sexually they were passionless, even
dead. And now it was not money that Michaelis was after. Clifford
had never been primarily out for money, though he made it where he
could, for money is the seal and stamp of success. And success was
what they wanted. They wanted, both of them, to make a real display
... a man's own very display of himself, that should capture for a time
the vast populace.
It was strange ... the prostitution to the bitch-goddess. To Connie,
since she was really outside of it, and since she had grown numb to
the thrill of it, it was again nothingness. Even the prostitution to the
bitch-goddess was nothingness, though the men prostituted
themselves innumerable times. Nothingness even that.
Michaelis wrote to Clifford about the play. Of course she knew about
it long ago. And Clifford was again thrilled. He was going to be
displayed again this time, somebody was going to display him, and
to advantage. He invited Michaelis down to Wragby with Act I.
Michaelis came: in summer, in a pale-coloured suit and white suède
gloves, with mauve orchids for Connie, very lovely, and Act I was a
great success. Even Connie was thrilled ... thrilled to what bit of
marrow she had left. And Michaelis, thrilled by his power to thrill, was
really wonderful ... and quite beautiful, in Connie's eyes. She saw in
him that ancient motionlessness of a race that can't be disillusioned
any more, an extreme, perhaps, of impurity that is pure. On the far
side of his supreme prostitution to the bitch-goddess he seemed
pure, pure as an African ivory mask that dreams impurity into purity,
in its ivory curves and planes.
His moment of sheer thrill with the two Chatterleys, when he simply
carried Connie and Clifford away, was one of the supreme moments
of Michaelis' life. He had succeeded: he had carried them away.
Even Clifford was temporarily in love with him ... if that is the way
one can put it.
So next morning Mick was more uneasy than ever: restless,
devoured, with his hands restless in his trousers pockets. Connie
had not visited him in the night ... and he had not known where to
find her. Coquetry!... at his moment of triumph.
He went up to her sitting-room in the morning. She knew he would
come. And his restlessness was evident. He asked her about his
play ... did she think it good? He had to hear it praised: that affected
him with the last thin thrill of passion beyond any sexual orgasm.
And she praised it rapturously. Yet all the while, at the bottom of her
soul, she knew it was nothing.
"Look here!" he said suddenly at last. "Why don't you and I make a
clean thing of it? Why don't we marry?"
"But I am married," she said amazed, and yet feeling nothing.
"Oh that!... he'll divorce you all right.... Why don't you and I marry? I
want to marry. I know it would be the best thing for me ... marry and

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Strategic Management: Text and Cases 11th Edition

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Strategic management: text & cases,9th Edition Gregory

978-1259278211 (Scanned PDF) Strategic Management: Text

ISE Strategic Management of Technological Innovation

Strategic Management : A Competitive Advantage Approach

Strategic Management: Concepts and Cases:

McGraw Hill Education (India) Private Limited

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Published by McGraw Hill Education (India) Private Limited

Cases in Strategic Management: Creativity and Innovation Perspective

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The significance of ‘Strategic Management’ is widely acknowledged by academicians,

A student of business with tact

We thank the Department of Management Studies, Indian Institute of Technology, Delhi,

About the Authors ii

Theme I Vision / Mission

Theme II General Environment Analysis

Theme III Industry Analysis

Theme IV Competitive Advantage of Resource and Capability

Theme V Cost Leadership

Theme VII Business Level Strategy

Theme VIII Corporate Level Strategy

Theme IX International Strategy

Theme X Strategic Implementation

Theme XI Strategic Control

Theme XII Change and Turnaround

Theme XIII Creativity and Innovation

TOURISM INDUSTRY AND SCOPE FOR ZOSTEL

EXPLOITING THE GAP IN THE MARKET

COMPETITON FACED BY ZOSTEL

THE REVENUE MODEL

BUILDING BRAND ZOSTEL

CURRENT CHALLENGES FOR ZOSTEL

QUESTIONS FOR DISCUSSION

Exhibit 1.1 Indian Tourism Industry Statistics

ZOMATO’S BUSINESS MODEL

of reviews and increasing number of registered restaurants in comparison to its competitors

CREATIVITY AND INNOVATION

The Perfect Timing

Dilemma Over Message and the Creative Answers

The Friendly Approach

Zomato Added Advantage

SOURCE OF REVENUE FOR ZOMATO

Importance to the User

The Restaurant Finder

EXPENDITURE MODEL AT THE ZOMATO

Company Financials and Growth Pattern

CHALLENGES FOR FUTURE

QUESTIONS FOR DISCUSSION

GLOBAL PHARMACEUTICAL MARKET

INDIAN PHARMACEUTICAL MARKET