Strategic Management

'What Went Wrong With Niky Tasha?'
One day while cooking, Ritu Nanda (Raj Kapoor's daughter) ran out of gas. Since there was a shortage of LPG in the market, she had to use the electric stove. At that moment, an idea flashed across her mind- why not have a stove that runs on gas as well as electricity.Thus came into existence a short- lived mega brand called Niky Tasha.
She started the venture in 1975 with Rs.5000 and, in four years' time,turnover went up to Rs.32 crore. It was a sellers' market and there was no need to advertise the brand in a big way. But she was hyping the brand too much everywhere. This was an open invitation to trouble. Small-scale manufacturers jumped into the fray and readily came out with more cost-effective models. Big players started offering heavy discounts and the real battle for market share had just begun.
Even before she could  gain a firm footing in the market, she diversified into television and thereafter trouble came in truckloads.She set up the TV manufacturing unit in Faridabad without looking into the rules governing electronics business closely. The Haryana government then charged octroi on the value of components going into the state, and by weight when were going out. This way both the components and the output were subject to duty. Of course, she sued the government and won the case subsequently. But by that time every thing was over. Starved of cash, the company could not take delivery of imported components lying with the customs. FERA officials, customs authorities meanwhile started grilling her on various counts. She was dragged to Tis Hazari court for late filing of income tax returns; for setting up an after-sales-service center in a residential colony, e.t.c. .She never knew that she could go out of business for commiting such silly mistakes. Meanwhile, Niky Tasha, slowly but steadily, slipped deeper and deeper into the red due to tough competition, paucityof funds, court battles and a host of other factors.
The moral of the lesson is very clear: when you lose control of even small details you are only asking for trouble. Remember a small leak will sink a great ship! the product was good, the market was there but- as rightly visualised by her later on- she should not have advertised and let the whole world know that she is a real winner. Unnecessary diversification multiplied her troubles in course of time and Niky Tasha got wiped out of the market quickly.