Phone maker Lava International Ltd was, not long ago, a leading poster boy of the government’s Make in India dream, with value-for-money offerings for the price-conscious customer, apart from playing a significant role in creating a domestic manufacturing ecosystem for mobile phones. Today, the nine-year-old company is facing a severe liquidity crisis, and failed to pay November salaries to employees on time.
The reasoning is very interesting and should be eye opener for any business because it is about disruption
“We have been facing consistent disruptions over the last three years. Entry of highly prepared Chinese companies with ability to invest much ahead of the curve on retail and marketing…cash burn and predatory pricing by online platforms and online brands…even the economic downturn due to demonetisation largely impacted our segment of consumers…we were much underprepared for such heavy disruption,” Chairman Rai said in the letter.
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