Two-witter!

The US State Department wants employees tweets to be reviewed for two days before they are posted

The US State Department has recently decided to tighten the screws on State Department employees participating on the social media – more particularly on Twitter. The State Department has passed an order wherein employees have to submit their tweets two days in advance for an internal review before tweeting the message from their Twitter account. Further, the time for review of posts in other forms of media like blogs, articles and books would take around 5, 10 and 30 days respectively.

Without doubt, while a two-day review of employees’ tweets sounds hilariously insane (for example, it might take eight days to exchange two tweet messages with a colleague and get respective replies), what made more news than the actual State Department decision was the slamming they received from global media. Nicholas Kristof from The New York Times, for example, called the decision “the dumbest idea ever”. Alec Ross, Secretary of State Hillary Clinton’s Senior Advisor for Innovation, defended the decision, claiming that the two-day delimiter is only an outer window for approval which is much lesser than the earlier 30 day period – and that most tweets would be approved much earlier. There’s also the view that such a rule has been reinforced due to a recent tweet of a department employee on an anti-Muslim video, which unfortunately ended up instigating public anger in Cairo and was also used subsequently by the Republicans in their campaign against Obama. Irrespective, the fact is that there seems to be quite some similarity between the State Department and the censor-loving Chinese Communist Party, which also considers all its citizens akin to its fellow workers.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

Shifting your focus to match customer needs

It is critical for organisations to adopt a scientific approach to understanding how they can meet customer needs, and to firmly ingrain a customer-focused culture throughout the organisation

We have often heard the phrase, “Customer is king”. While it is self-evident that higher satisfaction levels give a company an edge over sales, company growth and reputation, what it really does in the long term is to ensure that existing customers stay happy, resulting in better relationships and happier employees. Customer-focused companies are more attuned to the market and better able to stay ahead.

I refer to Harley-Davidson’s customer focused culture as one of the best in the world. It is the longest, continuous manufacturer of motorcycles in the US and has outlived nearly all of its competitors. In the twenty short years since Harley-Davidson started its Owners Group programs, it has grown to over 500,000 members & each of them own at least one motorcycle. The question to ask is: Is there any other consumer product in the world that will prompt customers to travel over several continents to be part of a group experience? Customers and employees alike take great pride in their affiliation with the company and this continues to make Harley-Davidson one of the great success stories of our time.

There is simply nothing – nothing – more important than getting to know the needs of your customer in a detailed and scientific manner. In the words of Michael Dell, “By spending time with your customers where they do business, you can learn more than by bringing them to where you do business”.

80% of companies believe they deliver a superior customer experience; however, only 8% of their customers agree. Why? Your customers are looking for maximum value when spending their hard-earned cash, particularly in this economy. The customer experience requires the active participation of everyone in your organization. This is where the word “Satisfy” comes into play. What it means is that your company is providing nothing more or less than what the customer expects. Creating a customer-focused culture is a proven strategy for both short-term success and long-term growth.

Going by the industry’s best practices, let me share with you some key insights into what will really work for you or your company.

1. Make a list of the values you’d like your company to exemplify. Then, examine your current culture, and ask yourself if those values are apparent in your company and driving your everyday efforts. 2. Before you can convince your company’s end customers of your focus on satisfaction and service, you need to convince an even more important customer audience – your internal customers – the employees who represent your company to the world. Talk with all your employees about corporate values and ask for input and suggestions. 3. Customer focused companies constantly seek and document feedback. They have a system to analyze and feed this information back into the loop so that response is immediate and not an annual feat 4. A strong customer orientation also demands that the company treats customer complaints positively. They not only make toll-free numbers and helpdesks available, but also staff it with knowledgeable people to work on them. 5. This means that they get back to these customers within an acceptable time frame So how does one tell if the customer is truly on your side? Most companies survey their customers in some way, shape or form – formally or informally. After decades of forms, interviews and focus groups, studies have shown that in gauging a particular customer’s overall satisfaction, a single question is needed to provide a fairly accurate answer: “Would you recommend us to your family, friends and colleagues?” If the answer is “Yes,” you are meeting or exceeding that customer’s expectations; if it’s “No”, it’s time to get to work.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

There’s much to fix between the piers

A raft of infrastructure issues is affecting the growth and prospects of our ports. In the face of capacity constraints, lack of connectivity and inadequate mechanization, ports are burdened with excess traffic they can’t handle

India’s vast coastline, stretching around 7,500 kms, is home to 13 major ports and around 200 non-major ports. These are spread across the nine maritime states that stretch along the country’s western and eastern corridors. Considering that about 95% by volume and 70% by value of the country’s international trade is carried on through maritime transport, ports in India are expected to demonstrate efficiencies to sustain the demands of growing international trade. Even otherwise, modern seaports the world over play the role of logistic hubs in the global transport system, integrating the supply chain and offering a competitive edge to exporters and importers.

Historically, ports were measured on their ability to accommodate ships and other modes of transport effectively and efficiently. Contemporary developments in transportation, however, dictate that emphasis shift to the ability of ports to fulfill new roles in the logistics era in the context of operating within integrated global supply chain systems. Ports are therefore expected to demonstrate efficiencies that help to cut total logistic costs and improve the overall competitiveness of exported and imported products.

Unfortunately, even in the wake of India’s growing maritime trade in the world market and the unprecedented growth in bulk commodities and containerized trade, major ports in India have failed to expand capacity and develop facilities commensurate with the growth in trade. In FY2011-12, Indian exports accounted for $303.7 billion, logging an annual growth of 21%. Meanwhile, imports grew to $488.6 billion, a 32.1% growth. This rapid growth in trade can be sustained only if the port infrastructure keeps pace with the increasing volumes of cargo. Indian ports, over the past decade, have seen a sharp surge in traffic, which has almost grown four-fold to 9.7 million TEU (One TEU represents the cargo capacity of a standard intermodal container, 20 ft. long and 8 ft. wide) in 2011, from 2.4 million TEU in 2001 - a growth of 395%. But our port-handling capacity is way short when compared to the throughput of major ports globally. Even the 9.7 million TEU handled by Indian ports last year represents just 8% of the global benchmark ratio for economic output and one-twelfth of global container traffic averages. Given that the Indian economy grew 7.8% for fiscal 2012, ports in India are in urgent need of capacity augmentation in order to meet the country’s growing economic needs and also to grow our share of international trade.

Over the last decade, our average annual growth rate of port cargo volume has been about 10% and container traffic is projected to grow to 40 million TEU by 2025. But India’s ports are ill-equipped to meet this surge in demand as they have not been able to significantly ramp up their capacity and efficiency. As a result, our ports are congested and lack cutting-edge facilities. Till date, no Indian port is capable enough of handling large container vessels. Thus, most of international cargoes are off-loaded at Colombo or nearby ports and then transported to India in bits and pieces. This very incapability robs Rs.10 billion from traders. Even the custom clearance at ports increases the transport time by an average of 84 hours. Not surprising that the World Bank has ranked India’s port infrastructure at 3.86 in 2010, where 1 stands for extremely underdeveloped and 7 for well developed.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

What happens when you mix drinking & flying?

With the recent Diageo deal, the UB group has got some much needed cash to reduce its interest costs. But as major group companies continue to struggle with unfathomable debt loads, the only freely flowing commodity is advice!
Issue Date - 30/12/2012

In late 2005, UB Group Chairman Dr.Vijay Mallya had remarked in a media event that people often asked him what link he saw between the liquor and aviation businesses. And his answer was, “They both make you fly!”

Amusing, yes. But that doesn’t go too far when it comes to explaining the synergies between the two businesses. There were definite branding synergies for Kingfisher in aviation, but not operational ones, as is evident in hindsight. In one of his interviews to a leading pink daily, former UB group CFO Ravi Nedungadi also accepted that he had warned Dr.Vijay Mallya that the airline, which he was planning to start, would be a drain on finances. Over the years, despite his best intentions, Nedungadi’s views have proved prophetic beyond imagination.

As on date, Kingfisher Airlines, which was once India’s second largest domestic airline by market share, is standing on a debt pile of $2.5 billion. According to a statement issued by the company, the exposure of various group companies towards Kingfisher Airlines as on March 31, 2012, stood at an equity investment of Rs.21.14 billion, loans and advances of Rs.10.48 billion, other receivables at Rs.2.09 billion and corporate guarantees to banks/aircraft leasors at Rs.89.25 billion. “Before getting into the airline business, they missed the trick that the airlines business is completely different from their other ventures. It requires a continuous flow of funds & also the skill to stay floating in a volatile environment”, affirms an aviation expert from a leading consultancy on condition of anonymity. State Bank of India, the largest lender to the airlines, has already warned that the airline’s promoters should bring in a minimum of $1 billion (about Rs.54 billion) from any source by the end of November.

Add to this the fact that the UB group is already quite stretched financially, and you begin to wonder if Kingfisher’s current plight could have wider ramifications. Recently, the UB group clinched a deal with Diageo, the world’s largest spirit maker, which will allow the latter the option to take its stake in United Spirits Ltd. (USL) to 53.4% for around Rs.111.66 billion; due to which promoter shareholding in USL will fall from 27.8% to 14.9%. USL issued 10% additional preference shares at Rs.1440 per share to Diageo.

Can this injection of around $1.1 billion in funds help script a revival? Before answering that question, we must take a look at USL itself, the group’s flagship company. It is the largest spirits company in the world by volume; selling 122.75 million cases for the fiscal ending March 31, 2012. For Q2, FY 2013, USL posted a standalone topline growth of 24% yoy to post revenues of Rs.22.21 billion, aided by a one time sale worth Rs.3.15 billion of bulk spirit stocks. Adjusted for the same, sales growth stood at 6.4%, which was way below the 8.9% estimate of analysts. PAT for the quarter declined by 73.4% yoy to reach Rs.392.7 million. Furthermore, USL is weighed down by a debt of close to Rs.90 billion with a D/E ratio of 1.9, and is finding it difficult to even access working capital financing. According to a research report from Angel Broking, “USL’s bottom-line is expected to grow at a CAGR of 103.4% over FY 2012-14 due to the lower interest costs on account of substantial reduction in debts post the UBH-Diageo deal.” So the best that can happen is that USL will work with somewhat improved margins and ROI.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year

BBA Management Education

29 suitors, 1 tuxedo

RBI should have 29 different interest rates for 29 different states based on their growth patterns and the globally-practised Taylor’s law

The RBI’s interest rate fixing in India is a scattershot approach, which assumes that the country is uniform, which is not the case in reality. A uniform interest rate, therefore, is a wasteful proposition in a country that varies from the prosperity of Punjab to the utter neglect and backwardness of Tripura – both economically and socially. Progressive states like Punjab, Haryana, Gujarat, Maharashtra, Tamil Nadu and Karnataka have high per capita income, low level of hunger, better infrastructure and low poverty rate, thus inspiring confidence in the minds of investors. On the other hand, states like Orissa, Rajasthan, Bihar, et al find it difficult to attract investment. In this light, the current system of blanket interest rate/lending rate is clearly out of sync.

Instead of implementing a uniform pan-India interest rate, the RBI must impose higher interest rates in states that offer business opportunities to investors on a platter and offer discounted rates for investors opting to invest in regions that are still not progressive. Gujarat is another manufacturing power house, but unlike Punjab, it is an industrialized economy with a very high growth rate and should attract higher interest rate from RBI. If we focus on the growth trend line among these states, we figure out that between 2006-07 and 2011-12, Haryana (growth rate between 17.1% and 21.66%), Tamil Nadu (growth rate between 12.98% and 20.44%), and Maharashtra (growth rate between 11.39% and 20.38%) are among the forerunners of the country’s growth trajectory. Thus, RBI should push up the lending rates in proportion to the growth pattern in these states.

On the other side are middle income states like Andhra Pradesh, Kerala and West Bengal. Andhra Pradesh is mainly driven by agriculture (even though there is a considerable concentration of IT and manufacturing units in and around Hyderabad), Kerala is driven by agriculture and tourism, while West Bengal is languishing with hundreds of sick manufacturing units. These states are mainly agriculture-based, where high interest rates can further exacerbate the problems that they face. Even though Andhra Pradesh and Kerala had a decent run in growth with 2011-12 growth rates being 14.82% and 17.94% respectively, they have some distance to go to catch up with more advanced states. West Bengal, on the other hand, has had a middle-of-the-road growth projection between 13.65% and 18.6% in the last 6 years.

The laggards are the BIMARU states and North East with low per capita SDP and low growth rate. The longer this impasse endures, the harder it will be to recover. Bihar (which is at the bottom of the table), however, has started a recovery of sorts, clocking 20.39% growth in 2011-12. However, it is on small base that can wither away as the base expands. Orissa, with 8.49% growth (2011-12), Jharkhand with 11.89% and North East with a consistently depressed growth rate of below 10% are consistent bugbears for our policy makers. Needless to add, interest rates must be lowest in these zones that badly need a breath of fresh air on structural reforms.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

“Let us do something big first!”

He makes an energy drink named ‘Five Hour Energy’, and his company Living Essentials has a current annual turnover of around US $1.3 billion. Forbes magazine has named him amongst the richest Indian billionaires in the US. In this interaction with B&E’s Onkareshwar Pandey, Manoj Bhargava talks about Indian and US politics and his decision to donate most of his wealth to charity.

B&E: You basically hail from Lucknow. Tell us more about your life’s journey from Lucknow to the US?
Manoj Bhargava (MB): I would prefer to say little because I have had little attachment to my personal life. I was born in Lucknow and studied at the Mayanagar School till class 6. After that, my father decided to send me abroad. So for preparations, I spent three years in Mussoorie, while my Dad went there in 1967 only. My father had a big publishing business there. It was called Upper India Publishing House, which published books taught in various colleges. My father had written many books under the Bhargava De name. But with time, everything went downhill, though he was still among the top people in Lucknow. Our grandfather was a leader from the Awadh region. He used to get many hand-written letters from Mahatma Gandhi, who had also sought the help of our grandfather in those days. Even after out grandfather’s demise, many leaders from various political parties used to come home. Even Chief Ministers and Ministers used to frequent our house before and after being sworn in for support. That’s all more or less how it was. Afterwards, we moved to Philadelphia in the US, and I finished my education from there.

B&E: Tell us more about your initial days in US. Were things smooth from the beginning?
MB: In those days, you could not take money abroad. We had nothing when we reached there, but we were very happy and made up our mind to work hard. A new beginning had to be made all over again. We started from zero again. Everyone finished their education there, and except me, everybody had a graduate degree. There too, illiteracy is not considered good. I think that there are two types of education. One is just to take a degree. And then begins the second type of study – the study of life. Bookish studies do not pay much, they act as only a base in life. Then you have to build your own house on that. If you study at Doon, IIT, and IIMs and still don’t know much about life, what is the use of such an education.

B&E: Today, you are the richest Indian in America. How did this success come about?
MB: We create an energy drink, which we call 5-Hour Energy. If you’re tired, you can take it and your exhaustion will disappear. It works for five hours, and after that you will return to your normal state. Last year, in the US, we sold 50 Million bottles of this drink. It costs $3 per bottle, or nearly Rs.165. I thought that if I am doing something, it has to be special. To make something new and special, you have to invest a lot of time and energy. So after talking to nearly two thousand people, we decided to start the business. Initially, the company manufactured the drink in big bottles. Later on, I thought that it’s a headache to buy the big bottles, so we created a smaller bottle. We kept on improving it. Today, the sixth generation of ‘5-Hour Energy’ is out in the market. The retail turnover of our business today is around a quarter of a billion dollars.

B&E: You came from a well to do family and there was no shortage of material possessions. Can handling this kind of wealth be difficult for people at times?
MB: I studied for nearly 12 years. After school I thought about the reasons why one needs to earn money. What should one do with it? That thought kept me occupied for a long time. Everyone has different kind of goals. I am not a show off and I do not have a thing for too many material possessions. There’s a saying in our land, that we don’t spend time, time spends us. We don’t indulge, indulgence indulges us. Still, if someone doesn’t learn and isn’t careful, he can’t be called intelligent.

B&E: Being a non-US trader, did you face any challenges there? If so, how did they impact your business?
MB: (Smiling) When you get down to wrestling, you have to do it with someone else. You can’t do it alone. I just thought that we have to do this and just started. We didn’t care about what will happen ahead.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

The alphabet of 2014

With the 2014 general elections looming large, the BJP has managed to quell an attempted revolt in the party ranks. But the collateral damage could have far-reaching repercussions

Let’s say she is a brilliant young political writer who thinks alliterations, symbols, analogies, synonyms, antonyms and metaphors are passé when it comes to analysing the far-in the-horizon Lok Sabha elections of 2014. What choice does she have? Let us say she decides to use English alphabets to forecast who would be the next PM in 2014. Let us hope that, unlike many political journalists today, she knows her alphabets.

She would have a tough time choosing between N and M. And she would, of course, know that there is another N that looms like a mythological warrior. She won’t be able to guess – despite her best efforts and lots of advice from television anchors – as to how another M would behave. People in WB have figured out that this M sometimes herself doesn’t know how she will act. She does know that another N who represents a state called O will not bother if M or N wins the race as long as he remains THE N in his state. And let us spare her and you the agony of other alphabets like J of TN, O of J&K, Y of AP and the original M of UP.

Confused? Actually, so are we. We – like you – know that voters like us are so mad at this so-called government being run by the UPA that we would love to vote against it in 2014. But which alphabet or set of alphabets do we vote for? The logical choice would be NDA, but the possible candidature of an N called Modi has already generated so many abusive and counter-abusive ‘expert opinions’ that we will let this N be; at least for now. That brings us back to that other N and that other M. If not Modi, N can only mean Nitish Kumar, CM of Bihar and the only true ‘secular warrior’ within the NDA fold. And if not Mamata/Mayawati, the M can only mean Mulayam Singh Yadav, the survivor who can teach a lesson or two to another cow belt chieftain called Lalu Yadav. There is a reason why M and N (Mulayam Singh & Nitish Kumar) have already started plotting their moves. Ask any Indian with even a little bit of common sense and it is doubtful if either would be their first choice as PM. But both M and N – like the one and only one heir apparent R – have history on their side. Our political journalist asks you with a wimpish smile – cross your hearts and admit it if you are old enough to remember. Did you, in your wildest dreams or never-ending nightmares, vote in 1996 for a prime minister called HDDG (software geeks, that is not hard drive... it is His Excellency HD Deve Gowda)? Even more bizarre, Indians actually did not vote for a do-gooder with a strange set of alphabets IKG. Our lady reporter was confused when she was told that IKG stands for a great pacifist called Inder Kumar Gujral, who was willing to sell India down the tube for the sake of peace with Pakistan. Did we hear Balle Balle? She was confused because sycophants who write about Congress told her that they had just played an alphabetic trick. First, they yanked the alphabet K from IKG and arrived at IG. They had to remove K because of someone called Sitaram “Kesari”. Then they realised that IG had long passed away. About a few million sycophants started looking for a simple replacement for I. They wanted something simple, which even political journalists could understand. So they settled on S and IG was replaced by SG. Of course, we must apologise on behalf of the lady reporter who appears a little overwhelmed with all these alphabets. We told her that SG has anointed another M. She promptly came back with some alphabets and epithets till we told her that this M is special because he is the only leader in the history of the world who leads without any ability or willingness to lead. Our reporter was thrilled and announced she is taking her poodle for a walk.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Revisiting IT - beyond the street

Results of top Indian IT companies, with the exception of TCS, have sent shock waves across markets. But rather than worry about them, Indian IT companies must focus on structural reforms for long term advantage

There is a paradoxical advantage that Indian IT firms enjoy in the current situation due to their reliance on overseas (especially developed) markets rather than the domestic economy. They have been through one major crisis in 2008, when most of the domestic demand-dependent India Inc. was rejoicing in our economy’s prized ‘fundamentals’. This time, when the crisis shifts to the EU, one can expect that they are better prepared.

Did they manage to take advantage of precedent? Or have they wasted a good crisis, as the saying goes? Let us first look into the final results of the three IT companies that are a part of the B&E Power 100. TCS, of course, is a clear winner with revenues of $10.17 billion (growth of 24% yoy) and net profits of $2.2 billion (growth of 16% yoy); which places it at 4 in the B&E Power 100 list compared to 7 last year. Infosys reported slower growth with revenues at $6.99 billion (a growth of 15.77% % yoy) and profits at $1.72 billion (a growth of 12.64% yoy; ranked 6 in the B&E Power 100 compared to 11 last year). Wipro’s results were even more modest, as it posted revenues of $5.92 billion (a growth of 13.4% yoy) and net profit of $1.1 billion (a growth of 5% yoy, rank dropped to 18 in the B&E Power 100 from 17 last year).

The real investor challenge these players face is the burden of expectations. Infosys, in particular, is facing the brunt, since its Q4 results showed revenues of $1.77 billion (yoy growth of 10.5%) and a decline of 2% qoq. Furthermore, it gave a very modest guidance of 8-10% revenue growth for the current fiscal, which would underperform

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

‘Heins’ian economics at work...

Ever since moving into the corner office of the Waterloo based smartphone maker, Thorsten Heins has been struggling to undo the damage RIM suffered over the past few years. However, his two pronged strategy of consolidating the enterprise segment and leveraging emerging economies will take time to deliver results

It often happens that the ascent of most CEOs to the top is marked by public scrutiny, appreciation and sometimes outburst. However, Thorsten Heins, President & CEO, Research In Motion (RIM) has had a relatively subtle career as far as his media presence is concerned. When he was promoted to the top job in January 2012, analysts pointed out that “he’s not a well-known quantity.” A masters in science and physics from the University of Hannover in Germany, Heins started his career in 1984 straight out of college with Siemens AG where he was chief executive of various divisions including R&D, customer service, sales and product management. His last stint at the Munich-based multinational was that of Chief Technology Officer (CTO) before RIM recruited him as Senior Vice President of the handheld business unit in 2007. He quickly rose through the ranks and was made the Chief Operating Officer of Product and Sales in July 2011.

But ever since moving into the corner office of the Waterloo-based smartphone maker, Heins has undertaken an extensive strategic review of the business. And what he’s probably realised by now is that he has an awful lot on his plate. A case in point is RIM’s dwindling financial performance. From a high of $145 in 2008, RIM’s stock has tumbled down to $14 (a 90% fall). In 2011 alone, the stock lost around 80% of its value. What’s more – as per statistics compiled by IDC, BlackBerry devices held just 8.2% share of the global smartphone market at the end of Q4 2012 compared to 14% during the same quarter last year. In fact, despite the launch of multiple new BlackBerry 7 smartphone models, RIM’s revenue for Q4 2012 was $4.2 billion, down 19% from $5.2 billion in the previous quarter and down 25% from $5.6 billion in the same quarter of 2011.

Their problems are evident. Behind this heartbreaking free fall lies a blunder by RIM’s cofounders who despite launching great products failed to predict how the smartphone market would pan out in times to come. A look at RIM’s revenue pie makes it clear that the company’s business is divided into two major segments – enterprise solution and devices (smartphones and tablets). The enterprise segment makes up for 22% of the company’s revenue. The rest comes from smartphones and tablets. Given that RIM’s USP was its network infrastructure which made its enterprise solutions so lucrative to corporations, the company continued developing the kind of phones that would appeal to these clients. However, what they didn’t realise (or probably did but preferred to ignore) was that the sudden surge in sales of BlackBerry smartphones was not caused by companies signing up but because the mass market had started purchasing them. These were the consumers who were not looking for security but for appealing devices. The strategy worked well initially as there were hardly any smartphones in the market except RIM’s. But as soon as Apple’s iPhone and Google’s Android operating system were launched in 2007, RIM’s devices started losing sheen. And before the company could realise what had happened, sales went for a toss.

The promoters who made these assumptions have left the company. And fortunately, Heins knows what went wrong. Therefore he now plans to bring back the company’s focus on the enterprise segment. During his first conference call, as CEO, with analysts last month, Heins said, “We believe BlackBerry cannot succeed if we try to be everybody’s darling and all things to all people.” At the end of 2011, over 90% of Fortune 500 companies had deployed the BlackBerry solution, with approximately 80% of these having an installed base of 500 or more devices. In concurrence with this strategy, RIM recently released the BlackBerry Mobile Fusion – an expanded version of its server software which will now support phones made by competitors as well. In an exclusive conversation with B&E, Michael Holt, a Senior Stock Analyst with Morningstar, expresses his confidence on RIM’s hold on the enterprise segment. “The BlackBerry is still the gold standard in certain corporate markets where premium security is valued. We expect it to retain that position for some time,” says Holt. So, is this a bad strategy? Depends on how you look at it. While on one hand this might indicate further shrinkage of BlackBerry devices in offices, but on the other it gives RIM an opportunity to pursue smartphones as an independent business.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

“The opportunities for sustainability are immense”

Prof. Anant K. Sundaram, Faculty of Business Administration at the Tuck School of Business works with Senior Managers of companies on how their financial fundamentals and performance metrics drive market values and P/E ratios. In an exclusive conversation with B&E’s Amir Moin, Prof. Sundaram discusses the issue of sustainability and how companies can effectively implement it.

We live in a world that is undergoing rapid transition. For now, our setbacks are more or less financial and economic in nature. But as we further globalise amidst an explosion in population, the world that we know of will find itself encountering a completely different set of problems. It is therefore imperative that corporations around the world take up the issue of sustainability with urgency. In this exclusive conversation, Anant K. Sundaram, Professor of Business Administration at the Tuck School of Business, tells B&E, how companies should perceive sustainability and what they can do do make it an integral part of their business model.

B&E: Sustainability is something which a lot of companies promote now a days. While some are actually pursuing strategies that make sustainability a reality not just in terms of application but also profitability, others use it as a mask to look good. What is your view of sustainability and how is it helping the company’s bottom line?

Anant Sundaram (AS): Step back for a moment and think about what ‘sustainability’ means, since it is misused a lot. In a literal sense, it means ‘making something live forever.’ This, of course, is plainly impossible to do and hence not a terribly useful definition. The definition used in policy and NGO circles goes something like ‘meeting society’s needs today without compromising the needs of future generations.’ This, in turn, is a highly loaded definition: Who is to judge what anyone’s needs are? How can we know what future generations might need relative to today’s? The bottom line is, these traditional definitions of sustainability have a condescending, and frankly, impractical view about the world as it is and what people’s wants are. Corporations live in a practical world. They manage scarce resources and juggle the conflicting needs and imperatives of multiple constituencies, all with a view to create value. From their point of view, sustainability is fundamentally about meeting people’s wants for goods and services by consuming as limited a set of resources as possible, keeping their footprint associated with the side effects of such use minimal.

This means efficiently using air, water, minerals, metals, fossil fuels, and other natural (including biodiversity) resources, in a manner that mitigates – or even zeroes out – the footprint associated with pollution, waste, and emissions. Hundreds of good companies – whether it’s a Walmart trying to drive efficiencies in its supply chain, an Apple in its product design that emphasizes conservation, or an Infosys in its building and data center processes that obsesses over energy efficiency – adopt this view. Surely, there are some that will try to use it “as a mask” to look good. However, those will be short-lived efforts, perhaps even short-lived companies. At the end of the day, the ones that do not see the links between sustainability and efficiency will leave value-creation opportunities on the table, thereby not being able to compete against their more efficient peers. In the process, they will be the first to fall by the wayside.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

“I’m not going away anytime soon”

When 2007 began, Ford Motor Company was in one of the worst shapes amongst automakers. Then Alan Mulally walked in, conceptualised his ‘One-Ford’ strategy and even today, is working hard to implement his masterplan to earn maximum dollars in fast-growth markets. mulally in a conversation with B&E’s Pawan Chabra

After working at Boeing for over 26 years, Alan Roger Mulally took charge as the President and CEO of Ford Motor Company in September 2006. While he wasn’t the first choice for the top job at the auto major, under him the company managed a remarkable turnaround. Today, with less than two years left at the automaker, all eyes are on Mulally’s ‘One Ford’ strategy, and what more he can achieve with his plan in the days to come, especially in fast-growth markets. In an exclusive interview with B&E, Mulally shares his thoughts on the road ahead of Ford in India and his retirement & new launch plans.

B&E: You have unveiled the EcoSport in India, making it the second product to be launched in India under the ‘One Ford’ strategy. When can Indian consumers expect to buy it and what expectations do you have from the product?
Alan Mulally (AM): We chose India for the global premiere of the EcoSport, our compact SUV, because this market is very important for Ford Motor Company. We believe that it will become one of the three largest automobile markets across the globe by the end of this decade. The EcoSport will be sold in the Indian market during the later half of 2012 and it will also be exported to 30 different markets worldwide from India. To start with, it will be produced in India and Brazil. In total, the EcoSport will be sold in over 100 markets and it will be powered by the Ford’s revolutionary 1-litre ecoboost petrol engine. It will be available in both the petrol and diesel variants. We believe it will create a new segment in India as it has the flexibility of an SUV with the fuel efficiency that the modern consumer is looking for. Obviously, it marks the start of the implementation of our SUV plan for the Indian market.

B&E: The ‘One Ford’ strategy has been key to the turnaround tale of Ford Motor Company. Does the plan only help you cut costs by delivering economies of scale or is there much more to it?
AM: ‘One Ford’ is all about making one product for all the markets that we operate in. For instance, a Fiesta sold in Chennai will be made exactly the same way as the one that is sold in the US market. This strategy not only helps us gain economies of scale on the end of the suppliers, but also empowers us to bring more affordable products to the market. This is a very important strategy for Ford as the consumer today is looking for vehicles that are best in safety, quality and fuel efficiency at an affordable price. Roughly, today by using the One-Ford plan, what we have achieved is that over 60-80% of our global platforms are the same for producing vehicles across markets. As far as launches are concerned, under the One-Ford plan, we started with the Figo in 2010 and including the Figo and the EcoSport, we plan to launch eight new models in India by 2015.

B&E: The US auto market has almost recovered from what we saw during the days of recession, But EU is still a big concern. On the other hand, almost all automakers are bullish on the future of India and China. How will the coming years turn out for the auto industry?
AM: Europe is still a concern, but the governments there are making constant efforts to improve the situation. As a company, we expect the global automotive sales to increase by 5% a year at least for the next two years. The driver to this growth will be the Asia-Pacific region and mainly markets like India and China. At the end of 2010, close to 74 million vehicles were sold across the globe. It is expected that this number will go up to 100 million vehicles by the end of 2015. As far as India is concerned, it is one of the most important markets for Ford. The consumer is terrific. He is looking for value and fun to drive vehicles.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

 

2013 : DNA National B-School Survey 2013
Ranked 1st in International Exposure (ahead of all the IIMs)Ranked 6th Overall
Zee Business Best B-School Survey 2013
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

“There is a clear need for consolidation”

B&E: Indian telecommunications industry may start consolidating by the middle of 2012 after the much-awaited National Telecom Policy, 2011, is unveiled in January 2012. How will this help the industry going forward?

Ranjan Mathews (RM): There are currently 12 operators or more in most of the 22 circles in the country. This has led to a situation of hyper-competition, fierce pricing battles, plunging profit margins, spectrum scarcity and oversupply. In fact, this situation has arisen as a result of the induction of five new operators in 2008 (the context of much of the 2G Scam) by the Department of Telecommunications (DoT). Further, between 2001 and 2007, there were many mergers and acquisitions (M&As) as older operators either exited the business or acquired other operators to cobble together a pan-India footprint. Significant of these were Bharti, Idea, Vodafone and TATA. Major operators who exited the business were BPL, Max Hutchinson, AT&T, Telstra, etc. Most experts now agree the market is ripe for another round of M&As to prune the market to a more sustainable six operators. This conforms to what is seen in most other international markets where there are no more than 3-5 operators. This is seen as more than sufficient to provide adequate competition in the market place. Thus, the benefits that will accrue as a result of such consolidation are many. One, we will have a healthier industry with adequate financial resources to invest in the technology advances (advanced networks, applications, etc) which are needed to keep the Indian mobile communications industry at the forefront of global advances. Second, one can expect affordable services for the customers. Expanded employment opportunities, reduction in the digital divide, increased rural penetration, more efficient use of scare spectrum, increased availability of loans and equity funding for needed roll-out of telecommunications infrastructure are some of the other benefits that one can expect from consolidation. Further, it will have a positive cascading effect on GDP as it has been established that a 10% rise in broadband penetration leads to a 1.3% increase in GDP.

B&E: But don’t you think it’s too late, in terms of safeguarding the industry?

RM: The initial flaw was that DoT ignored TRAI’s recommendation to not issue licenses in 2008 without ensuring there was adequate spectrum available. Further, due to the ensuing litigation surrounding the grant of licences, M&A activity could not proceed until the court cases are resolved. Once this happens, the new M&A recommendations made by TRAI will certainly help in facilitating M&A activity. However, another significant factor that will impact M&A activity will be the availability of additional spectrum, spectrum pricing and licence renewal terms for older operators that will see their licences coming up for renewal commencing 2014.

B&E: New players like Loop Telecom, which have invested thousands of crores in buying the spectrum licences, are now requesting the government for an exit. What, according to you, went wrong?

RM: The fundamental problem was that there were too many players in each licensed area. Contrary to all international norms, the number of operators went to 12. This caused a brutal price war as the new operators fought for market share. However, this only caused a downward spiral for all operators causing a serious decline in profitability. The scarcity of spectrum for the new operators led to many regulatory complaints and litigation. Finally, the eruption of the 2G Scam caused both international and domestic funding to freeze. This caused a liquidity crisis for the new operators who could not raise the required funds for network roll out and market expansion. The litigation also put the license of many of the new operators at risk which further exacerbated their business viability.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

“For Avon as a corporation, a sell-out is out of the question!”

With a presence in over 140 countries, the Fortune 500 Avon Products Inc., is the largest direct-selling company in the world. And India is considered a critical market by the company. Hemant Singh, MD, Avon India, explains to B&E’s Steven Philip Warner how Avon fanatically believes in reaching out to the masses with the right investments in R&D and how, the company for now, is all about ‘Organic’ growth.

For the first twenty-seven years of his career, Hemant Singh worked at HUL, PepsiCo and Modicare (he was the CEO of Modicare, when he left the company). 2009 saw him being welcome aboard the $10.86 billion-a-year revenue-earning (FY2010) company – Avon Products Ltd., as its Executive Director (Business Development) for the APAC region. Today, he serves as the MD of Avon India. In an exclusive interview with B&E, this man who runs the show at a company which prides itself for being “The Company for Women,” reveals some geographical market-specific trade secrets.

B&E: India as a market contributes to less than 5% of Avon’s global sales. How important really is India for the largest direct selling company in the world?
HS: There is a reason for it. The company was started 125 years ago. In India, the industry is only 15 years old. So first, there is the time gap. Secondly, given the pace at which we are growing, India is fast becoming a huge grosser for us. Our rate of growth in this market has been phenomenal. In 2009, Avon’s India revenues grew at 46%. In 2010, we grew 56%. And as we speak, this year already, the growth has been 55% y-o-y. And our plan for the next 5 years is that we should grow at a CAGR of 60%. I don’t think any company in our business in India can even talk about such figures. So yes, India is very important for Avon.

B&E: So would India be a market more important than China?
HS: No. India and China, from the point of view of the population and the rate of growth, are both right up there amongst the two most important markets in the APAC region.

B&E: Jewellery is something that you added much later in your portfolio, globally. Did that call for any change in approach to your sales strategy?
HS: Whether it be skincare or colours or jewelry, they all fall in the same superset called beauty products. So the introduction of the jewellery range did not influence our sales strategy really. As far as India is concerned, jewellery is naturally a huge opportunity. It is a $13 billion market. Of that $10 billion is real jewelry, and the rest is all about gold & silver-plated jewellery, which is what we do. At present, this fast growing segment contributes to 17% of our sales, while colours (& cosmetics) and skincare contribute to 40% and 15% respectively. So that gives a good perspective of how fast we have grown in the jewellery segment.

B&E: Let’s talk about outsourcing. You currently have close to 1000 products in your portfolio. There must be a huge chunk of that being obtained through outsourcing of the manufacturing function. Right?
HS: Most of our products are made in-house. But that does not mean that in every country where we are present, we have a factory. In India, we have a plant in Dehradun, which has a multi-product manufacturing capability with a limit up to 50 million units a year. But having said that, we do outsource as well. In fact, for many of our products, we have a global sourcing strategy in place.

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face