What makes a successful enterprise? Does it depend on an individual entrepreneur’s business skill? The ability to identify an untouched market niche? Or does it all come down to having a brilliant idea or a wonderful product?
Ashok Vasudevan, CEO of the vastly successful Indian and Asian food company Preferred Brands International (best known for its Tasty Bite brand), believes that all of these elements substantially contribute to an enterprise’s success. They all form part of what he refers to as the “Wheel of Fortune” for businesses.
After spending over 15 years heading Tasty Bite and several previously working for large corporations like Unilever and PepsiCo, Ashok has valuable and unique insight into what it takes to run a business. Ashok elaborated on the importance of the various components of his “Wheel of Fortune” but then emphasized the need for entrepreneurs to refrain from sticking exclusively to the component that they started with. Instead, he advised that they concentrate on working through the other pieces in order to complete the wheel and thereby build their businesses. He warned that many businesses fail because people do the exact opposite of this - they get attached to only one piece of the wheel and leave the remaining components unexplored and underdeveloped.
According to Ashok, the key to ensuring the sustainability that all business leaders desire is to predict the future, building a business that is relevant and equipped to meet the changing needs of consumers over the next 10 -15 years. He explained, “If you don’t predict megatrends, you are playing blind.”
One current business convention dictates that entrepreneurs identify consumer trends in the market, not consumer needs, and then ride them. Conversely, Ashok asserted that it is important to look for megatrends, trends that have a half-life of about 15 years, and discover ways to drive rather than ride them. Ashok reminisced on the early 90s when he and his wife decided to enter the grocery business. Their decision stemmed from identifying three emerging megatrends on the horizon: the shift to healthier foods, more women entering the workforce (who would have less time to cook) and the changing demographics of the United States. Based on this, they predicted that Americans would soon develop a strong preference for natural, healthy and convenient foods from a variety of non-American cuisines. Tasty Bite thus found a necessary spot within this megatrend and enhanced its ability to thrive and sustain itself.
Ashok asserted that it was unwise to put local limitations on business. It is important to make sure that one’s business is global. But this doesn’t necessarily mean that you have to put your products in global markets – he pointed out that one’s ideas or even partners can be global. Positioning a business globally in this fashion gives it a solid comparative advantage, allowing it to focus on doing what it is good at and leave other activities for domain specialists. Building a strong comparative advantage is especially important for small businesses because it builds walls around them that are hard for competitors to penetrate – giving them a competitive edge.
Ashok believes that while we’re always told that entrepreneurs take risks, they really don’t. Rather, entrepreneurs know a great deal about their businesses; they are domain experts who spend time learning about their ventures and execute based on this knowledge. Effectively, their activities are not risky – they are strategic. In Ashok’s view, being strategic primarily comprises concentrating on the entrepreneurship “Wheel of Fortune” and working to predict megatrends and at crafting the business in a global fashion.Read More