“I want to leave behind a landmark which my country will remember me by…”

- Cherukuri Ramoji Rao, Chairman, Ramoji Group.

In April 2001, Ramoji Group‘s Film City, hosted its first English production, 'Quicksand', produced by Ramoji Rao1 and directed by Sam Firstenberg2. Thus, Ramoji Film City brought international (Hollywood) attention to Hyderabad.

Ramoji Rao incorporated the Ramoji Group in 1962, with Margadarsi Chit Fund Ltd. By 2001, the Rs. 15 billion Ramoji Group became one of the biggest business houses in India. The group had interests in newspapers and magazines, hotels, films and television, investment companies, condiments and confectioneries, a 1000-acre film city, apparels and handicrafts (Refer Exhibit I). Over the years, the Ramoji Group under the entrepreneurship of Ramoji Rao, seemed to have set standards in the print, television and the film industry. Analysts felt that Ramoji Rao‘s excellent business acumen, sharp insight and an eye for spotting out opportunities, made him a successful entrepreneur.

Ramoji Rao, started his career in the early 1960‘s in Delhi with an advertisement agency – Ad Crafts. In 1962, he opened the first branch of Margadarsi – a chit fund company in Hyderabad. Realizing the advertising needs of Margadarsi, Ramoji Rao established an ad agency – Kiron Ads – named after his eldest son. Kiron Ads was the first accredited ad agency in Hyderabad. After a few years, the second branch of Margadarsi was opened in Visakhapatnam (Andhra Pradesh). This was followed by the setting up of Dolphin Hotel in Visakhapatnam.

In the late 1960s, Ramoji Rao also started a magazine for the farmers called =Annadata‘ in Telugu3. Commented Ramoji Rao, "My heritage lies in the soil and my forefathers were all farmers. But I sold off all my property and to atone for this and to do something special for the farmer community I started a magazine in their language."

In 1974, Ramoji Rao entered the print media by launching Eenadu, a Telugu newspaper in Visakhapatnam. Ramoji Rao explained, "I focussed on the region which I thought was most relevant to the people." The Hyderabad edition was launched in 1975, followed by the Vijayawada (Andhra Pradesh) edition in 1976. In the early 1980s, Ramoji Group entered the foods business with Priya Pickles. The Priya brand was later extended to culinary pastes and powders. The Group then made a foray into films with Ushakiron Movies. The Group established Mayuri Film.

Distributors to distribute its films and Mayuri Audio to market the audio cassettes of the films. In the early 1990s, Ushakiron Movies diversified into satellite television with ETV – the Telugu channel.

In 1992, the Ramoji Group started a handicrafts division under the name 'Kalanjali.' The division was set up with a view to promote the sale and export of handicrafts, cottons and textiles of Indian craftsmen. The Group set up a showroom in Hyderabad. From April 1993, the division started exports of various goods under the trademark of 'Kalanjali.'

On September 9, 1997, The Ramoji Group inaugurated its most innovative creation – The Ramoji Film City based on the maxion – 'Walk in with your script and walk out with your print.' Spread over 1000 acres, the Film City had gardens, temples, a sprawling countryside, a fort, hotels, city streets, railway stations, a palace, an airport, a mobile kitchen etc. It had all the technical support to make a film – 40 studio floors, a fully-equipped prop shop, a set design and construction division, state-of-the-art equipment, experienced production staff, and hi-tech digital editing, dubbing and sound-recording facility. Said Ramoji Rao, ?The idea is to save time, energy and resources and focus on creative excellence, executional quality, economical schedules and meticulous planning.' The USP of the Film City was claimed to be its ability to rebuild any place for a shoot. Producers had choice of flexible locations. For instance, a song could be choreographed in any or all of the locations. Later changes could be made to the fountain‘s appearance, the layout of the street or the facades of the buildings in the streets or the shape of the multi-dimensional pond, to create a totally different locale.

In the late 1990s, the Group started an Internet edition of its newspaper – Eenadu. The Internet version was designed to give the same look as the original newspaper. Content was designed to provide local news about Andhra Pradesh. The group claimed that the website received a phenomenal response from the Telugu populace abroad. Within three months of its launch, the site achieved the landmark figure of a million hits a day.

In April 2000, ETV launched ETV Bangla. The channel telecast a combination of entertainment and news programs in Bengali. In July 2000, ETV Marathi was started followed by ETV Kannada in December 2000. In mid-2001, the Group entered the world of fashion with Margadarsi Apparels. The company planned to introduce garments for both men and women. The garments were segmented as formal wear, work wear, and casual wear for all the age groups. The company expected to manufacture 30,000 garments per day (Refer Box).

Product Range of Margadarsi Apparels

Ramoji Rao's vision was to achieve excellence in his every venture he undertook. His biggest coup in the print industry was the introduction of a color, tabloid sized 'mini-edition' of Eenadu for each of the districts in Andhra Pradesh and the mini-detailed paper for Hyderabad. In 1998, he bagged the B D Goenka Award, a prestigious award for excellence in journalism. 

Some analysts however felt that Ramoji Rao followed 'campaign journalism.' He was actively involved in promoting the Telugu Desam Party4 (TDP) founded and headed by N.T. Rama Rao, in Andhra Pradesh through his Eenadu. However Ramoji Rao defended saying, ?The role of the press is not purposeless. If I believe that it is good for the people, I will do it.' He further said, ?The media has to perform without vested interests, I have never sought any favor from the government ever.' One of the main reasons for Ramoji Rao's success was the synergy between his different ventures. The Film City had become an asset for the TV channels. With Film City's state-of-the-art technical and non-technical support, the group could make programs for the TV and films at a very low cost. Commented Ramoji Rao, ?If we cannot afford the cost in Film City, we cannot afford it anywhere else.' Ramoji Rao had an eye for spotting opportunities. When he was in Visakhapatnam for opening a new branch of Margadarsi, he could not find a good hotel to stay. Within a few months, the Group started the Dolphin Chain of Hotels, with a 3-star hotel in Visakhapatnam, catering to the diverse needs of businessmen and tourists. In 1997, when the Film City was established, the chain expanded its hotels to cater to different segments— Sitara' – the luxury hotel with restaurants, pool, gym and business centre was started to cater to film stars, producers and directors. Tara was a 3-s0tar economy hotel, and a budget accommodation for the rest of the crew was available at Sahara.

During his stay in Visakhapatnam, Ramoji Rao, a newspaper addict, could not get the daily newspapers as they reached a day later through post. He discussed this problem with late A.J. Prasad, editor of Andhra Prabha6. Ramoji Rao suggested that A. J. Prasad should start a Visakhapatnam edition. When Ramoji Rao failed to convince A. J. Prasad, he started 'Eenadu' in Visakhapatnam.

When Ramoji Rao saw the tremendous success of Hindi movies, with heavy investments, he planned to enter the film industry, but with creative and thought-provoking low-budget movies. Ramoji Rao explained, ?Convictions make you do things. With mega-budgets and big names, Mumbai could work magic. But I thought, with some creative effort, low-budget films could be made.' The movies from Ushokiron Movies seemed successful, appealing to all age groups. There were family dramas, comedies, love stories and social movies to appeal to all kinds of movie-goers.

Analysts felt that Ramoji Rao was a good strategist. The 'mini-editions' concept of Eenadu was a great success. Eenadu was also one of the first publications to be printed in color. Ramoji Rao also introduced different supplements like 'Vasundhara' for women and 'Eenadu Cinema' with film gossips for youngsters. Over the years, Eenadu became the numero uno newspaper in Andhra Pradesh until The Times of India7 launched its Hyderabad edition in 2001. The Times of India followed an aggressive price cut policy. In June 2001, Eenadu formed an alliance with The Hindu to sell advertising space in each other's publication, to counter competition from The Times of India.

In October 1998, Ramoji Rao launched an aggressive global marketing campaign for his Film City. This followed the completion of the latest technology color laboratory, which was certified by Kodak as one among the 10 top processing facilities in the world, and dubbing and set-construction facilities (Refer Exhibit II). He visited Los Angeles and held meetings with owners of major studios and independent companies.

To penetrate further into the satellite television market, Ramoji Rao planned to extend ETV to other languages. In March 2000, ETV launched India's first private earth station, to help expand the satellite TV market. Apart from ETV-Bangla, ETV-Marathi, and ETV-Kannada, ETV launched the first Urdu channel in India, ETV-Urdu in June 2001.

By the end of 2001, Eenadu was planning to launch channels in two other niche markets – Gujarati and Oriya. Said an Eenadu official, "The aim of the network is to build a brand and cater to niche audiences in all major regional languages."

Analysts felt that an important characteristic of the Ramoji Group was that it had always been a family-run organization. The flagship company of the group, Margadarsi Chit Funds, was managed by one of Ramoji Rao's daughters-in-law. Another daughter-in-law looked after the hotels run by the Dolphin Hotels chain in the Film City.

From one company in 1962, the Ramoji Group became a Rs 15 billion business empire with presence in many industries by 2001. For future growth, Ramoji Rao planned to concentrate on the group‘s core businesses like the print media, satellite television and films. As part of the future plan, Ramoji Rao announced investments in film industry. In 2001, Eenadu TV planned a Rs.600 million upgradation of its earth station. The project included a Rs.180 million project to automate its newsroom. The group also planned to launch newspapers in other south Indian languages. As a first step, Ramoji Rao planned a Kannada daily for Karnataka to be launched by 2002.

His plans included making his Film City the best not only in India but also in the world. He described the City as ?The Last Milestone.' He said, ?Our immediate concern is to make it the best… It is an open ended project where facilities will continually be upgraded.' The group was also focussing on its new venture – Margadarsi Apparels – to make it the best in the textile retailing industry.

1. Analysts felt that, with excellent business acumen, sharp insight and an eye for spotting out opportunities, Ramoji Rao became a successful entrepreneur. Do you think the Group‘s diversification into unrelated areas is a reflection of poor entrepreneurship on part of Ramoji Rao.

2. Analysts felt that one of the main reasons for Ramoji Group‘s success was the synergies between his different ventures. What were the synergies between the different businesses of the group?

Exhibit I
The Ramoji Group

Source: www.margadarsiapparels.com

Exhibit II
Post-Production Facilities at Ramoji Film City

Source: www.ramojifilmcity.com