Finally, Voltas is rationalising

For years Voltas drifted. This Tata group company, which defied definition because of the mish-mash it represented, is, in a sense, a case study of what a company should not do. For example, be in numerous different businesses with little or no synergies between them.
      Well before C.K. Prahalad and Gary Hamel wrote about core competencies, at least some people who wrote about this company found that it was not doing the things it ought to be doing. Or doing things it ought not to be doing.
     One of Voltas's main strengths in the past was marketing and distribution. The company was impressive -- it built and handled brand names as diverse as Amul milk powder, Rasna soft drink concentrates, its own Voltas air-conditioners and machine tools, forklifts, electrical equipment (taken over from three companies acquired in the early 1980s), and such other things.
     Not only did brands like the Mahindras' (then International Harvester) tractors move away, group company Tata Robins Fraser ditched Voltas. The strength it had in fast moving consumer goods (with brands like Amul) eroded with time. Amul moved out, Rasna withdrew. And the momentum of the past was lost.
     Sad, considering that Voltas used to be considered, once upon a time, more or less on par with Hindustan Lever in terms of retail reach. Now Hindustan Lever is streets (or street corners?) ahead in the paan-beedi shop extension game. Just compare the share prices of the two companies, and you will realise how poorly investors have thought about Voltas, once upon a time considered a blue chip.
     There's a change, though. Voltas's share price has perked up, thanks mainly to the management's announcement of a revamp.
     What's happening? Something dramatic, considering the past. The company is restructuring. Giving up things it can't really do well. Focusing on areas it considers its main business. The only question is: has it left it to too late?