The economic liberalization measures announced by the Government of India in July 1991 marked the acceleration of the trends towards deregulation. Since then, a path has been paved for foreign capitalists to access the Indian markets. As a result, an intensified competition has been observed in the marketplace. A large number of companies in the private sector, which had been operating over the years in a less competitive environment, have started facing severe competition. While many of them have been able to reorient their strategies to cope with the challenges thrown before them, a large group has failed to do so. Against this backdrop, a case study of Colgate-Palmolive (India) Ltd.—a leading Fast Moving Consumer Goods (FMCG) company in the Indian healthcare industry—for the period from 1980 to 2003-04 is presented in this paper to analyze the efficiency of its asset management. This study reveals that the company failed to adapt itself to the challenging and competitive environment by lowering efficiency of its asset management during the post-liberalization era.

In mid-1991, the leaders of the economic, political and other affairs of our country set in motion a new economic industrial policy after discarding the old Nehruvian line of socialistic pattern. During the year 1991, the Central Government announced the new industrial policy and other measures and hoped that the year can mark acceleration of trends towards deregulation and broaden the scope for private capital from India as well as from foreign countries. Further, this virtually abandoned the industrial licensing system under the Insurance Regulatory and Development Authority (IRDA), which liberalized restriction on large industrial houses under the Monopolies Restrictive Trade Practices (MRTP) Act, 1969. It also deregulated the general ceiling of 40 percent on foreign equity under the Foreign Exchange Regulation Act (FERA), 1973 (Chowdary, 2003, p. 9). This liberalization process paved the way for multinational companies to access the Indian markets, resulting in intensified competition in the marketplace. The foreign direct and portfolio investments in India have witnessed a substantial growth after the economic reforms. The Indian corporates have free access to global investments. Due to the changes brought about by the liberalization of economy, a large number of companies in the private sector, which had been operating over the years in a less competitive environment, have started facing increasingly severe competition. While many of them have been able to reorient their strategies and cope with the challenges thrown before them, a large group has failed to do so. Against this backdrop, the present paper analyzes the operational efficiency of asset management of Colgate-Palmolive (India) Ltd.—a leading Fast Moving Consumer Goods (FMCG) company—in the Indian healthcare industry during the period from 1980 to 2003-04.

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