Guided by intelligent thoughts, maturity, and integrity, The Yash Birla Group aims to be on the forefront of Indian industry. In an interview, Yashovardhan Birla, Chairman, The Yash Birla Group shares the story of his companies.
Ramanjit Kaur (RK): Could you please shed some light on the inception of the company?
Yashovardhan Birla (YB): From its humble beginnings back in 1861, the Birla Empire started by Raja Baldeo Das Birla has evolved into a monolithic, multi-million dollar, global conglomerate. Today, the Yash Birla Group (YBG) is a well diversified entity with a turnover of over INR 30 billion. The group has interest across established sectors like auto and engineering, textiles and chemicals and power and electrical to emerging sectors like wellness and lifestyle, education and IT. Presently, the group has eight listed entities in India.
RK: The company has acquired major stake in Kerala Vaidyashala. What inspired you to select this particular company for a joint venture?
YB: YBG has chartered out a long term strategy to focus on healthcare and wellness industry based on the study conducted by E&Y (Ernst & Young). YBG has planned to have its presence in three major growth segments of wellness industry viz Dermatology and Cosmetology, Ayurvedic spas and Ayurvedic medicines and personal care products. After scrutinising various proposals, YBG has finalised on Kerala Vaidyashala to enter into a Joint Venture.
RK: How do you think this joint venture will help in the growth of The Yash Birla Group in the healthcare and wellness industry?
YB: The Joint Venture provided following benefits to the Group:
- Leveraging the existing 20+ stores of Kerala Vaidyashala (KV)
- KV has more than 15 years of business experience in its field
- A good market presence
The Yash Birla Group will play a key role in professionalising and corporatising the KV business to leverage the above advantages and generate phenomenal growth.
RK: In the last few years, we have seen a lot of development in the wellness and spa sector. What according to you are the factors responsible for it?
YB: There are a number of factors that have contributed towards the development and growth in wellness and spa industry, these include:
- Growth in medical tourism
- Lifestyle of consumers
- Large consumer base
- High profitability
- Government initiatives
RK: What are your views about the future of Birla Kerala Vaidyashala as a franchise unit?
YB: The Franchise model is adopted to encourage entrepreneurship as well as to penetrate rapidly into the burgeoning mini-metros and class I towns. It has been adopted for rapid expansion with minimum capital expenditure.
RK: What kind of background is required by the prospective franchisees to secure the franchise of Birla Kerala Vaidyashala?
YB: We want our franchisees to believe in our concept and align their interest with the interest of the company. They should have an entrepreneurial mindset and committed to the business for a long term relation. Besides this, a franchisee is required to own/lease a space of around 850/1000 sq. ft and must be capable to afford an investment of Rs six lakh.
RK: What kind of support and training is provided to the franchisees of the Birla Kerala Vaidyashala?
YB: All the technical staff and support is provided by BKV to its franchisees. Continuous training programmes are arranged to upgrade therapist skill set. The company also provides full marketing, promotional support through print and electronic media, branding and signage for the location. Continuous product/service up-gradation is undertaken by the company itself.
RK: What are the future plans of the company in terms of expansion through franchising?
YB: The company is planning to expand its business reach mainly through franchising. It plans to add around 20 new franchised centres by March 2011.
RK: Do you think franchising is the best mode of expansion? If yes, then what are your views about the future of franchising in India?
YB: Franchise mode of expansion is very beneficial if carried out professionally. It has an obvious advantage of limited capital expenditure. But more importantly, it helps the corporate to ramp-up operations in a very short span of time. One thing needs to be taken care in franchising is that of quality standard. The companies should take extra precautions to maintain their quality standards while opting franchising. In Indian market, franchising is a way forward especially in consumer related businesses. Considering the geographical diversity and huge population, franchising will provide a channel for accelerated growth.
