5 Lessons from Moser Baer which is “all but shut down”

Moser Baer is almost a household name for Indian PC users.  Once a giant, the company has all but shut down, says a recent feature in Forbes India.  The company is in debt and unable to pay back, production at manufacturing plants have slowed and other businesses don’t seem to be doing well either. MB

The article goes on to describe the state of affairs at Moser Baer and traces its journey from a promising startup to a high growth company and now a company almost ready to shut shop. An article in The Economic Times had also pointed out that the company was hurting due to Chinese onslaught. So what all went wrong? Here are five interesting lessons from the Moser Baer stories:

1. Stay ahead of change, react quickly: Deepak Puri, the founder of Moser Baer was quick to latch on to the changing personal computer and consumer storage business. In 1998, he bet big on optical media, a business waiting to take off. This worked well for the company.

2. Enter China, exit margins: When China took over manufacturing, price of CD’s fell sharply and margins were eroded. Growth slowed to a trickle. The Chinese ate Moser Baer’s lunch again when the company diversified into manufacturing solar panels in 2005. (ET, Forbes)

3. Change is the only constant: Flash drives were becoming popular very fast and Moser Baer had already stretched its resources. Internet pushed storage costs further down. (Forbes)

4. When the going goes tough, pivot: In 2005, When the Puris realized that optical storage was passé, they made another bet. The company went into the business of Solar panels. This worked well for starters only until…China came to lunch again. (ET)

5. Litigation can be death: Moser Baer sued one of its suppliers REC group when the going was not so great. The company lost the case and had to come to an expensive settlement. (HBL,Forbes).

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