question hour. With the new legislation on CSR spends, will we see

With the new legislation on CSR spends, will we see a lot of spends going behind building brands with CSR funds?

New Delhi

Devika, I really hope not.

CSR, sadly, has been perennially linked to brand building. In many ways, corporate boards have viewed CSR activities as subliminal ways of brand-building. Many do not discuss this openly, as this is politically incorrect, but the fact remains that covert and at times overt brand building seeps into CSR activities.

Most companies try to relate their CSR activities to activities that are close to the company either in terms of area of operations or the type of business one is in. That much is permissible, I guess. But hopefully not more. At least not in the future with the mandatory CSR spends as dictated by the new Companies Act 2013. When it comes to a geographic dispersion of CSR, the glaring fact that stares back at us is the fact that CSR surrounds businesses in the small towns. If there is a large steel plant in a small town, expect some degree of CSR to swathe that town and its surroundings. Otherwise, CSR is largely where the eyeballs are. And that needs to be corrected.

CSR helps organisations achieve a soft image for themselves. A cigarette manufacturer possibly indulges in CSR to escape from the guilt trip the corporate organisation finds itself in as well. A very small portion of it is done with the intent of doing public good. A big portion of it is done in geographies where the business finds itself entrenched in. A portion of it is done as pure brand-building activity and this is the portion that is suspect.

There are so many foreign brands in India. Have they reached saturation point? What are their challenges?

Mumbai

Arpit, not at all. India is a sponge, for the really relevant global offering. Players planning an entry must do their India-market homework properly.

Entering the Indian market is a task that requires adequate ground-level understanding of the market, its distribution mechanics, customising products for the Indian market. This is a sensitive and, at times, a time-consuming process. The market is more complex than you imagine it to be. If you want a sure-shot success, be prepared to be patient. Spend time with India-oriented partners in understanding markets. And do not outsource everything.

A lot of Indian corporates are going into acquisition mode overseas. Do you see challenges here?

Hyderabad

Sonny, corporate organisations are using acquisitions to grow in international markets as a part of the key strategic initiatives laid out by corporate boards.

The reasoning is a simple one. India is big and moderately untapped, but the Indian opportunity is going to be an ongoing story that has to be managed. As for international forays, it is a great way to expand the footprint of the Indian FMCG onto the international turf. Acquisitions in international markets are a great way of planting the flag on foreign soil, to exploit its opportunity now and most certainly at a later point of time. The timing is particularly correct as of now, as the recession that touched foreign shores has made marketers in those countries jittery and ready to sell.

Returns from international operations are most certainly not commensurate with corporate expectations within the country in the short term. But this is a game for the long haul. Apart from this, an acquisition overseas adds stature and pedigree to brand owners in the domestic market, for sure.

Harish Bijoor is a business strategy expert and CEO of Harish Bijoor Consults Inc. Mail your questions to cat.a.lyst@thehindu.co.in

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