Showing posts with label IIPM Institute. Show all posts
Showing posts with label IIPM Institute. Show all posts

Monday, October 08, 2012

WORLD: ENERGY CRISIS AND WHY EVEN WE COULD BE WRONG :-)

The lethargy to move to alternative fuel seems almost insane...

The reality is that many underdeveloped and developing nations have similar sources of alternative energy; yet, fail to see the potential. If most of the major metropolitan cities turn to CNG as the standard fuel for all public transport systems and private vehicles, it would reduce the oil demand significantly. While billions of dollars are being spent in most nations for construction of highways, a fraction of similar investments for the creation of mass rapid railroad transport system running on gas (not gasoline, but hydrogen based gas) would not just drastically reduce the need for fuel oil, but would also help in creating a cleaner environment.

Reports state that India’s natural gas production is slated to touch nearly 170 million standard cubic metres per day by 2011-12. So, when natural gas and CBM can run power plants and vehicles, when an Iran or Russia based pipeline can meet the rest of the demand, why is such a price rise paranoia?

As the oil reserves near depletion in Middle East, the price of the same can only go up. A war between Israel and Iran might never happen but the fear factor of the same would continue to push the price northward. It’s time to exit this game theory of US (who perhaps benefit the most as the more the price of oil rises, more becomes the demand of dollar to buy the same). Let’s hope that the day gas becomes the preferred fuel is not far. And what would be proof of that? That’s easy. That would be the day an exemplary American President bombs a state called Bihar in India and claims he did it for saving the world from weapons of ‘gas’ destruction.


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Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face


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Monday, September 03, 2012

UTV’s ambitions in the mobile space

Manish Agarwal was hired to drive UTV’s ambitions in the mobile space. He defends some critical factors, including fall in revenues and employee retrenchment

B&E: You have just completed a year in this organisation. How’s the work experience different from Microsoft India?
MA: This is a start up. Microsoft started in a garage. Thank god, UTV has a plush office and we are not sitting in a garage! Here you have 10 ideas; one may work, 9 may not. You need to have a vibrant evaluation environment and you need to be nimble footed. Agility is the key in this business.

B&E: Talking about ‘agility’, UTV New Media laid off 20 people last year. What led to that decision?
MA: In a start up, each of us is very clear about our roles. So one year later, we are very well entrenched with the Telecom operators, we have multiple technology partners. In web we have been able to shed the baggage of the past legacy and built an underlying common system, which even a Yahoo and Rediff is struggling to make. So the day we have 5 million or 10 million users across 3-4 verticals, they will all be interconnected and we will thus be able to cross leverage and cross profile people.

B&E: There has been a 34% decline in revenues from UTV New Media vertical. What are you doing to improve the numbers this year?
MA: This year, we are looking at ending the number at around `30 odd crore from `12 crore that we made last year. But I can say that we already have got those numbers in our pockets and therefore we have revised our internal numbers to that effect. This quarter also looks more or less in control. In this business what matters is not the 30-40% but a 2-3 years business and the bet you are taking, the scale of business you are looking at.

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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.

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



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Wednesday, August 22, 2012

Betting big on the inorganic mode

First it was the Bank of Madura. Then, it was Bank of Sangli. And now, the Bank of Rajasthan. ICICI Bank is seemingly strengthening its presence in the Indian banking space by undertaking a slew of acquisitions much like its peer HDFC Bank did in the past. by Avneesh Singh

It was the February of 2008. The world was yet to come face-to-face with the debacle of the US banking giant Bear Stearns. Yet in India, officials of the largest private sector bank, ICICI Bank, had started feeling the heat. And it was not for the fact that they had already predicted the slowdown that was coming their way, it was due to the acquisition of the Centurion Bank of Punjab (CBoP) that proved the genesis of all headaches in the ICICI camp. CBoP had been on the radar of ICICI Bank for quite sometime already, but it was HDFC Bank that finally got hold of CBoP. ICICI Bank, which had held on to its numero uno position in the private banking space and second slot in the banking space apparently felt that it was losing its ground. It made ICICI realise that something’s got to give, if it wanted to avoid nightmares of the likes of HDFC Bank, Axis Bank and Punjab National Bank beating it with the lesson cane! It decided that growing inorganic was the route to redemption.

What followed was interesting. Despite the Bear Stearns episode in March 2008, the Indian banking scenario continued sauntering without many hiccups. There were promises in the air, especially the air above the Indian banks. But something set the cat amongst the pigeons – the crash of the banking behemoth Lehman Brothers, which filed for bankruptcy in September 2008. The world economy was heading for its worst crisis since the Great Dipression and Indian banks set off the alarm. One which set off the louded was ICICI Bank. Reason – during that point in time, it had an exposure of around 57 million euros in Lehman senior bonds and another $30 million in the insurance company American International Group (AIG), whose financial health too was as shaky as Lehman Brothers’. ICICI Bank was forced to pack its dreams (of steaming past others of its ilk in the Indian space) in a suitcase and catch the next flight to the land of protectionism. Times were too risky to take a plunge and ICICI Bank wanted to play safe.

More than a 21 months later, after a prolonged phase of silence, the bank has stepped back into its aggressive boots. And this time around, it has given clear indications of a desire to grow through both organic and inorganic means. Even Chanda Kochhar (CEO of ICICI Bank) has done much work towards rebuilding the perception of the bank amongst its customers. May 3, 2010, also saw ICICI open its 2000th branch in the country (it opened it in Andheri West, Mumbai). But there was more in store for the market. Withing 20 days, the Board of Directors of the bank approved an amalgamation of Bank of Rajasthan (BoR) with ICICI Bank, subject to approval by shareholders and Reserve Bank of India, therefore sending that signal of aggression to competitors and customers alike.


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Tuesday, August 21, 2012

From healing touch to heeling touch…

From healing touch to heeling touch… Women have an incredibly wider spectrum of influence than one could have ever anticipated!! 

It is natural to drop one’s guard while in conversation with the opposite sex; let alone the female touch in question. It is a fact that opposites attract, and it is not a matter of self deprecation if such a scenario comes to the fore because “Complex interplay of hormones and pheromones released during an inter-sex conversation is postulated to hinder abstract thinking, instant decision taking abilities, rationalisation and may influence intuitive abilities,” says Dr. Vinant Bhargava, Physician, Sir Gangaram Hospital.

From legendary epics of ‘Mahabharata’ and ‘Ramayan’ (not to forget Kekai’s tantrums in Ramayan which led to the exile of Lord Ram) to the present day ‘home frontiers’ and ‘cut-throat corporate arenas’, women have succeeded in turning the tables everywhere. It’s not the women who are at fault here. It’s human tendency to take advantage of a situation where undue leeway is being provided for one to behave as desired. Female touch is probably not the only driving force providing reassurance to an individual or the confidence to go ahead and bear risk. Point to be pondered here is that is there a possibility that it could be the ‘human touch’ which is the stimulant? A group of friends or a confidant is not subject to any caste, creed or sex. Hence how one deals, invests or operates around or without one’s support system is an individual’s call. The only disclaimer is ‘offer documents may be subject to market risks… please read the offer documents carefully before investing!’


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Tuesday, August 14, 2012

On the wings of some vanity & wax

Subhiksha was a dream flight, which crash-landed as soon as it took off; B&E presents a decisive story covering a summary of its flawed strategies and the way forward. by Pawan Chabra

Surviving One Bad Year: 7 Spiritual Strategies to Lead You to a New Beginning. In this shallow chick lit, Nancie Carmichael – an author who seems to have graduated from parenting books to self help hocus – spawns chapter after chapter of spiel on not only how to handle personal loss, but even bankruptcy! She doesn't stop there – there's more mumbo jumbo on how to handle depression, disappointment, betrayal, and yes, job losses too! Hilariously, if one does a post-hoc analysis, it just seems that if R. Subramanian, founder, Subhiksha, had even blindly followed the quirky advice conjured up by Ms.Nancie, Subhiksha might have been a better company than what it is now. But as they say, journalistic advice is as infidel a virtue as the devil's religion. Be that as it may, we still decided to go ahead and present a contemporary synopsis of what went wrong with Subhiksha and where is the erstwhile retail star heading to now!

Prosperity is the literal translation of the name Subhiksha from the Sanskrit language. To its credit, the retailer did remain true to the name for more than a decade with its business model, a legacy that even saw eulogies emanating sporadically from industry associations. Then how did the company manage to literally shoot itself? This case study provides lasting lessons in retail strategy.

Subhiksha commenced operations in 1997 and took the conservative route for nine years in the booming retail industry. The clear focus was on establishing its brand name in the country before going for the kill. After making consistent efforts to get a tighter grip on the Indian consumer for the past 11 years, it was announced in early 2008 that the retail chain will invest a whopping Rs.500 crore to increase the number of outlets to 2000 across the country by 2009. Was this target too aggressive, critics asked, keeping in mind that the company had just touched 150 stores across the country in the first nine years of its operations?

Quite possibly. Nevertheless, the company's sales were also growing by leaps and bounds; from a mere Rs.3.3 billion for financial year 2005-06 to Rs.8.33 billion for FY 2006-07, going on further to touch a mind-boggling figure of Rs.23.05 billion for FY 08. Soon enough, media and industry experts were reporting the Subhiksha model (a no-frills model aimed at gaining consumer confidence by offering the lowest prices in the industry attracting the price-sensitive segment of Indian consumers – the largest) as the most successful one in retail; even home-grown counterparts and several multinational firms started rolling out formats inspired from its business model. It was all looking like a dream come true, with R. Subramanian – an IIT & IIM alumnus – driving the growth story. Money was flowing in from PE players and industrialists. ICICI Ventures, which was an entrant during the early years of Subhiksha, became the second largest shareholder after promoters with an exposure of billions of rupees. Notably, PremjiInvest, the PE arm of billionaire Azim Premji, bought a 10% stake in Subhiksha from ICICI Venture in 2008 for Rs.2.3 billion. Subhiksha itself invested in an NBFC for future long term growth funding. With 1,600 stores already set up, even the ambitious target of 2,000 stores for the year looked very achievable.

But something, somewhere, started to go wrong. Reports started filtering in – employees complaining about unpaid salaries, suppliers complaining about huge outstanding payables, rents, bills, and more... Stores started shutting down when funds started drying up. However, the company claimed strongly that there was nothing wrong as these were normal economic slowdown issues and that the stores will be reopened by June 2009.

And then came the shocker! Reports came in that Subhiksha had inflated revenue figures, fudged accounting transactions, and transferred money to non-existing companies. An adamant Subramanian refuted all allegations, and refused to handover the company's reins. Push ultimately came to shove, and finally, facing extremely angry creditors, employees, shareholders (even Premji sent legal notices), and left with a bleeding skeletal firm, R. Subramanian, the brain behind Subhiksha, grudgingly shut shop, yet refusing to "run away."

As it now goes through a corporate debt restructuring plan, the chances of the retailer making a comeback look very bleak. “Subramanian is a great mind and his model was very successful but he was at the wrong place with the wrong people and took the wrong decisions. He has today lost his credibility in the Indian retail market,” says an industry expert to B&E on the condition of anonymity.

On hindsight, considering the fake inventory, fake bills and fake companies to which money was transferred, Subhiksha shares a lot of similarities with the largest scam in the Indian market, Satyam Computers Services – though Premji minces no words while referring to his investment in the retail chain as an error and titles the company 'the Satyam of the Indian retail industry’ in an interview to a business daily. But the bleeding retailer is quite fortunate as it has been able to stay out of problems of the magnitude that Satyam faced, where the founder Ramalinga Raju is behind bars and even the auditors and the sister concerns have tasted rough waters.

It is widely believed that the massive expansion plan – mistimed horribly with the onset of the economic slowdown – was the critical tipping point. “The business model per se was very strong and also makes sense in today’s environment; but it was the massive expansion that caused the failure. The empty shelves and a weak back-end changed the consumers’ perceptions about the company,” says Zahir Abbas, Associate Director-Retail, KSA Technopak. Our text messages and phone calls made to R. Subramanian are left unanswered. Even ICICI Ventures, which now holds about 23% in Subhiksha, and still has an estimated exposure of about Rs.1.06 billion in it, chooses to abstain from answering B&E's queries.


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Monday, August 13, 2012

MARUTI: TEN-TEN-TEN

Maruti Suzuki is well on its way to hit one million unit sales in this fiscal. But how does the market leader plan to prepare itself for the rougher road ahead?

Then there is the angle of Volkswagen; which has developed a sudden and heightened interest in the Indian market. After the German auto maker picked up a 20% stake in Suzuki Motor Corporation, it is said to be already influencing key strategy decisions. For instance, speculations are that the company may not renew its agreement with Nissan as the stake sale purchase by Volkswagen is primarily aiming at gaining strength in its India operations. Market watchers believe that German auto maker may not be very comfortable sharing its R&D developments with Nissan and the composition of the deal is going to change; though the company counters it. So Maruti Suzuki would most likely not renew that agreement. It will be interesting to watch how Volkswagen’s entry impacts future strategic decisions.

Going forward, increasing focus on logistics will also help the company bank high volumes in the long-run. Be it the construction of the rail track from its plant to Mundra port or the regional stockyards, which will help shorten the delivery time period, the company is trying its best to gain more efficiencies in all the pillars of its strategy for the Indian market. Analysts believe that with the increasing competition in the hatchback segment, the market leader is expected to lose some of its market share. However, keeping in mind the situation in the early 1990s in the economic liberalisation era; wherein various automakers landed on the Indian turf with bullish plans on the charts, Maruti Suzuki was able to protect its market share and is even today standing tall with a 50% market share. From eight manufacturers and 16 brands in the 90s, the industry today offers 69 brands by 17 manufacturers; but the one key fact unchanged is the leadership position.

However, with players like Toyota and Honda entering the small-car segment by 2011, Maruti Suzuki may have to cede some more of its huge market share. In fact, Nakanishi himself showed some concern with Toyota entering the small-car segment as he said, “I wasn’t worried because they (Toyota) weren’t serious about India so far. But now they are and will soon be coming out with their small car.” But considering the pace at which the Indian market is growing that may not be much cause for concern. It may have taken more than 25 years for Maruti Suzuki to sell more than a million in a fiscal; the race to the next million is expected to be on a highway. The company can even target 2020 as its year to sell two million in a fiscal as the volumes in the domestic market are expected to be double in the coming five years. Also, with the increasing focus on exports, the company may well derive a new slogan – ‘Twenty Twenty Twenty’. However, this time standing on the last Twenty (operating margins) will be a very tough task for Maruti Suzuki, all thanks to the new offerings in the Indian market which are expected to further ignite the price war among the auto makers. Being a leader in a market that continues to grow rapidly; Maruti will have to continue to strive aggressively for new customer acquisition; even if the last 20 takes a backseat.

B&E: What are the reasons according to you have attributed to the company’s mind-boggling growth during the current fiscal?
SS: We are enjoying one of the best growth phases ever as per our calculations; we will be hitting the one-million mark by the 23rd of March this year. This will be the first time that we will cross the on-million mark in a fiscal. The growth mainly came from the overall growth of the industry and as the passenger car industry got bigger we grew with it too. In fact, we never thought at the start of 2009 that we are going to cross one million this fiscal. But we surely discussed reaching the target of one-million unit sales within the 2010 fiscal during a cross-functional meeting in 2004.

B&E: With many automakers launching their hatchbacks, do you believe Maruti will lose its market share?
SS: Frankly, we don’t think so. We have been reading news reports claiming that the company will lose some of its market share as competition increases but internally, we are very much confident of defending our volumes. We have done that before in the 1990s when many players entered the Indian geographies when economic liberalization took place. A lot has been changing inside the company when it comes to the stake that various parties held as well as outside as the scenario changed in the automotive market. At one moment, there were 16 brands with eight manufacturers in Indian; we today have 17 manufacturers with 69 brands. But all the way through we have always kept a 50%+ market share.

B&E: Over the period of time, exports have been rising consistently; can we label it as the next growth path for Maruti Suzuki?
SS: Exports have seen a slow growth but a consistent one. It got a real boost due the scrappage programme that took place amidst a downfall in the overall global industry sales. The deal with Nissan for the A-Star, which it sells under the Pixo badge, also comes into picture. But that’s not all, Maruti Suzuki is taking exports seriously and we expect to grow many folds going forward. In fact, it is interesting to not here that Nissan also sells Pixo in the European market and we sell A-Star in the name of Suzuki Alto in the European markets. Though, there are only minor modifications in both the models, but both of them are very popular among consumers.

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Friday, August 10, 2012

A radical way to combine NREGA with Sarva Shiksha Abhiyaan and create history

Of course, you don’t need to be a philosopher to understand the value and power of education to make or alternatively mar the future of India in the 21st century. And the way things are going at the moment, only the naïve will believe that India is on the cusp of an era where it will reap the much talked about ‘demographic dividend’. Just a few days ago, the international body UNESCO released a report called ‘Education for All Development Index’. It tracks the progress made by various nations on the key Millennium Development Goals of achieving universal education by 2015 from 1999 to 2007. The results in the report are sobering, if not disturbing for those who keep prattling childishly about India’s demographic dividend. The rank given to India is 105, below Bhutan, Zambia, Vietnam and Ghana to name just a few. That is not really surprising since India is consistently ranked pathetically when it comes to human development indicators; and justifiably so. More disturbing are results buried in some tables in the 300-plus page report. A staggering 49 percent of the children drop out of school before they reach elementary level. And before you start talking about some sinister western conspiracy to show India in a poor light, please remember that the report is based on government released statistics.

Let me present some data in a different way to puncture this triumphal talk about India’s demographic dividend. The total number of illiterates in India (as per the official definition of literacy) is more than the combined population of England, France, Germany, Italy Spain, Norway, Sweden, Denmark, South Korea and Japan. If you take a more realistic definition of literacy, the number of illiterates in India would be more than the entire population of the whole of Europe. Each year, the number of children in primary school who drop out altogether is more than the population of Australia. Each year, the number of Indian children who fail to go beyond class V is more than the population of South Korea. Each year, the number of Indian children who cannot cross the secondary school barrier is more than the population of Japan. Look at it in another way; the number of illiterates in India is more than the population of India in 1947, when Jawaharlal Nehru sought to make a tryst with destiny.

What’s more, the number of places of worship currently stands at 2.4 million, whereas the number of places for education stands at 1.5 million! I am sure that things would not have improved since 2000, when the Planning Commission reported that almost 44% of all workers were illiterate and some 22.7% had done schooling till primary level! One would be really optimistic to talk about the demographic dividend in the face of such humiliatingly distressing data. And unless a drastic overhaul is launched right away, hundreds of millions of young Indians will be condemned to live on the margins by the beginning of next decade; and India will be condemned to remain a third rate power!

That brings me back to the Budget for Three Idiots. If things are as bad as they seem, how can Indians like me have even an iota of hope for the future? Actually we can, and we should. Every crisis is an opportunity, as they say, and this could be a game-changing opportunity for the Finance Minister. Often, the right set of people under the right leadership at the right time trigger changes that can have seismic impacts. It needed a Rajiv Gandhi in the 1980s to rope in Sam Pitroda from the United States to launch technology missions that could change India. Pitroda faced insurmountable challenges from vested interests and even quit in a huff. But it was his team at C-Dot that had sown the seeds of the telecom revolution that is sweeping across India. In 1991, on the verge of defaulting on its debt obligations, a shaky Congress regime under P. V. Narashima Rao made Manmohan Singh the Finance Minister and gave him a mandate to dismantle the license permit raj and unleash the entrepreneurial spirits of India. The results are there for you and me to see and marvel at. The current regime – the second term of the UPA – has a similar mix of people who can deliver change. In a stroke of inspirational genius, UPA Chairperson Sonia Gandhi and Prime Minister Manmohan Singh have made Kapil Sibal the Union HRD Minister. And with a pragmatic, seasoned and wise Pranab Mukherjee as the Union Finance Minister, one can definitely be hopeful.


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