Battle of Perceptions! First M&A in Indian politics emerges from Tripura?

                  Battle of Perceptions! First M&A in Indian politics emerges from Tripura?

- Suresh Kodoor

Merger & Acquisition, fondly referred as M&A in the corporate corridors, has been a time-tested strategy for corporate expansion. Businesses, when in the lookout for expansion (to new geographies or to new business verticals), usually weigh between two options, namely ‘Build’ or ‘Buy’. One option is to build and establish own business shop from scratch in the new geography (or in the new business domain as the case may be). This of course would take time and effort and the loss in terms of opportunity cost would be significant. Thus the business enterprises usually see ‘Buy’ as a more attractive option as it gives them an opportunity to set the ball rolling right from the word go and rapidly expand their business horizon. The ‘Buy’ option obviously refers to buying out an already established business in the area of interest (geography or/and vertical). The flip side of the ‘Buy’ option though is that it requires huge investment (can be many times more than the investment required for starting from scratch). So, the Buy option is for those who have huge cash boxes (remember how Facebook bought over WhatsApp for a whopping $19 billion!).

First time in the Indian politics, we are now seeing the M&A corporate strategy being put to work (especially the ‘A’ part of the M&A). BJP has adapted this corporate short-cut in a big way to establish their ‘business’ in Tripura in the just concluded election! BJP has been constantly on the lookout to expand its business to newer geographies.  North East of India was the targeted territory this time and Tripura in particular must have emerged as a key proposition for BJP as it would enable them to kill two birds with a single stone. Firstly, a victory in Tripura would allow BJP to shirk off its image of being ‘hindi-belt’ party and secondly, it would place BJP as a credible competitor (even annihilator, if wishes are horses) to its arch rival (ideologically), CPI(M).  To start with, BJP of course had absolutely no presence in Tripura whatsoever. So, BJP must have been faced with the typical corporate ‘Build or Buy’ strategical dilemma. Faced with a situation where they had to choose between ‘Build’ and ‘Buy’, BJP went for the second. The underlying reasons being  i) BJP had a huge cash surplus that it could afford to invest/buy any ‘business’ on offer out there  ii) there was a party called Congress that was for sale (probably at a very cheap price) iii) BJP had no particular commitment to any ideological school and is not so particular to be seen as adhering to or subscribing to any ideals  (ideals/values that are often mouthed for the public consumption are anyway etched on liquid wax). Thus, BJP had no qualm about whom they would/could buy out and care the least about the ‘character’ of the entity they are set out to buy. Contradiction with their own stated ‘business values’ are not allowed to come on the way as hindrance to disqualify any buy-out candidates. They would be the last ones to be bogged down by even the spirit of their own ‘policy book’, leave alone the semantics of the words and sentences in there.    The case with their competitor, CPI(M), is completely opposite though.  So, BJP could go and buy out Congress in its entirety while at the same time make IPFT  their ‘business’ ally without any prick of conscience. Till date, the Indian politics had only seen alliances (and some ‘mergers’), holy and unholy. BJP had opened a new possibility in the Indian politics where small regional satraps can now think of building small ‘start ups’ and dream of being bought over by the big brothers for attractive returns.

The biggest problem the corporate face with M&A is the huge challenge in ensuring cultural amalgamation of the new entity with the parent company. Companies spend lot of time, money and effort to make the merging of two heterogeneous entities as smooth as possible. There are many instances where the cultural difference of the swallowed entities have been so diverse that the acquisition eventually had led to the implosion and collapse of the parent entities themselves. BJP might find it much easier to deal and digest the ‘Congress-ians’, as both the entities share a ‘cultural commonness’, but may find it a challenge in the case of IPTF. That is a whole different aspect of the M&A process and its pitfalls that I will reserve the topic for another byte.

Let us now turn our attention to the entity that was most affected by this brutal Corporate takeover, namely CPI(M). Till date, CPM was dominating the market having to compete only with a smaller player who had only around 30-35% of the market share against their own massive market dominance with a 60+ % of the pie.  They had already tamed the competition.  However, they were in for a rude shock when all of the sudden their playing turf was completely re-laid overnight with the name boards of their lesser competitor ‘Congress’ being replaced with much bigger ‘BJP’ name boards. The massive resources, both in terms of money and man-power that the new mega-conglomerate threw into the market must have been way beyond what CPM had budgeted for their ‘marketing’.  The unleashing of new marketing and perception building campaigns spearheaded by the new bigger ‘competitor’ must have certainly caught CPM unaware and unexpected.  

It is difficult for any company to change its marketing strategy overnight, especially when they are caught by surprise by a competitor who has access to much more resources and market forces. For CPM, Tripura was a customer-base they had groomed and nurtured over decades. CPM had of course invested a lot and spent a lot of their sweat to make the market tuned to their ‘brand’. Be it by bringing key improvements and investments in the field of education, or in the social welfare programmes, or by providing housing for the poor, or improving healthcare infrastructure, or with drastically improving the literacy levels and so on and so forth. The problem with enjoying monopoly and being in charge of the market that one groomed and nurtured over time is that the company will start feeling sort of ‘entitlement’ and a little ‘complacent’. The company will start thinking that their brand is liked by all the customers and will gradually stop giving attention to the ‘product feedbacks’. This will lead to lesser investment in the marketing campaigns and a perception of ‘stagnancy’ will start getting associated with the brand unless the ‘product’ is continuously innovated and refined.   The amount of grooming and nurturing CPM had provided to the people of Tripura certainly make them within their right to feel entitled to a certain level of brand loyalty as any long serving corporate will expect of their customers. But, what the CPM failed to see through in this instance is that the market is largely driven by perceptions and added to that the market profile itself has been changing dramatically over time. Consumers, especially the new consumer segments, are swayed by the glitters of marketing and ‘product perceptions’.  With a large segment of young consumers joining the market within the span of last two decades, CPM fell short in redefining and revising their marketing campaigns and may be their product brands as well. In fact the CPM sales folks must have encountered the same sales-folks from the old ‘Congress’ company in the customer meetings. But those ‘old’ sales people were completely in ‘new’ uniforms now with a renewed look and vigour. They promised the customer new products and the customers were not in a mood to check if the promised products were actually real and whether they were in fact being delivered elsewhere in the other markets where BJP monopolised. The new campaign was riding entirely on the newly created perceptions.

While the BJP Conglomerate unleashed new brand of campaigning, CPM relied too much on their long-tested and practiced modus operandi to a great extend.  While the image of a non-corrupt, ‘poor’ CEO serves well to highlight the honesty and simplicity of a leader, it does not portray a strong image that would appeal a new young corporate-savvy customer base. The same image can create a perception of a company in decline which is on a ‘pleading’ mode seeking the customers their support to sustain and survive.  The image needs to be one that helps to create and reinforce the perception of a strong and forward-looking entity. So, when CPM highlight the simple lifestyle of their leader saying he doesn’t even possess a mobile phone,  another image that gets created in parallel, especially among the younger lot, would be that of a leader who is not in touch with the current times and trends.  For them, a leader who cannot identify with their aspirations and is alien to their methods cannot fulfil their aspirations as well. The market formed two perceptions that were in total contrast, one being that of an aggressive new-generation corporate with refreshingly new brands and campaigns and the other being that of an  aging brick and mortar company with the same set of ‘brands’.  

Rulers and Governments are expected to be just and non-corrupt. ‘non-corrupt’ politicians should be the norm, not the exceptions. Unfortunately, it has become the other way in our body of politics and it is understandable that why a ‘non-corrupt’ leader becomes a rarity and stand-out in the crowd and deserves to be celebrated as a role-model. A leader being non-corrupt and an honest custodian of public wealth becoming a rarity instead of norm tells us the unfortunate state of affairs of our polity today and hence obviously the leader whoever is an exception of this ‘common trend’ is hailed and kept on a high-pedestal. However, for the subjects who are reeling under hunger, the knowledge that their King is also enduring hunger is no solace. They may appreciate that the King is empathising with them by enduring their sufferings. However, what they would wish and welcome more is that their King bring them the food. King offering to die with his subjects in hunger is no consolation at all for the people. Perceptions can be farther from the truths. But perceptions rule the market and the customers are swayed by perceptions. Entities who master the art of this perception building will stand to gain huge where the politics is emulating more and more the means and methods of the corporate world.