Crompton Greaves' Operations Overhaul

The domestic motors market was dominated by the unorganized sector and margins were low. In consumer products also, entry barriers were low and CGL fought with the unorganized sector for shelf space. The telecom equipment market was characterized by high competition, including MNCs. All this resulted in CGL reporting net losses in the fiscal 2000. The company's long term competitive position was rather weak in the absence of technology support. Also, CGL spent just 1.5% of its turnover on R&D, which was significantly lower than that spent by multinationals like Siemens and ABB and even Indian conglomerates like BHEL and L&T.

In the late 1990s, CGL revealed plans to split itself into three companies - power and industrial systems, consumer products and digital, to be headed by independent professionals. This was expected to enable each company to form separate strategic alliances to enhance competitive strengths. However, procedural delays led to this plan being deferred. CGL then set up a five-member committee to review its operations. The head of this committee was Sudhir Trehan, who had taken over from Nohria as the CEO in 2000.