Backward and Forward Integration in Sobha Developers
Volume 19, Number 3 Article by Kumar K September, 2007
Driven by Quality: Backward and Forward Integration in Sobha Developers :
In conversation with P N C Menon, Founder and Chairman, Sobha Developers
Sobha Developers, a Rs 600 crore plus construction and real estate company, ventured into India in 1995. Now accepted as an industry benchmark for world-class building techniques and quality standards, Sobha has won numerous awards and has built up an impressive clientele that includes Infosys, Hewlett Packard, Dell and the Taj Group. With a view to understanding the entrepreneurial basis of the company’s success, Prof K Kumar spoke to Mr P N C Menon, founder and Chairman, Sobha Developers.
With two decades of experience of international business in interior decoration and construction in the Middle East, Sobha was far from a greenfield venture; it was in fact a question of leveraging the resources and the knowledge acquired over the years. For a high growth niche player, Sobha has a unique business model that combines both backward and forward integration within its vertical, besides diversifying into garments, lifestyle products and information technology. Menon explains the rationale for this model, which defies contemporary management thinking. While backward integration, by assuring quality, helps strengthen the value proposition, forward integration is a vehicle for brand building. Brand building was also one of the reasons for the company’s recent IPO. The chairman’s deep commitment to quality emerges as the most important factor driving the business decisions of the company, while the imperative of corporate social responsibility explains some of its unrelated diversifications. Menon also spoke about the company’s plans for expansion and its HR initiatives to attract and retain talent, as well as the need for corporate India to contribute to the country’s economic growth and welfare.
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