Wednesday, December 12, 2012

RELIANCE: RETAIL

The venture was flawed from the beginning in more ways than one

And now, Reliance Retail is mulling over tying up with an international partner back-end support. Had Mukesh gone in for an international tie-up earlier, this situation would not have risen as outsourcing supply chain management is more cost effective and feasible, especially in India. Then came the news that Reliance is planning to shut down 40 of its non-performing stores and rationalising its total retail space of around 4.2 million sq. feet. Reliance Retail also axed almost 600 support jobs to manage costs.

Experts claim that the very basic structure of the company is debilitated. In the first go, Ambani invited negative publicity by removing the middlemen from the value chain. Experts also maintain that most of Reliance Retail’s ventures like Reliance Mart, Reliance Super, et al, were launched in a jiffy, without any foolproof plan of action. Floating so many retail ventures led to disharmony between business heads and each one started competing with one another, thereby leading to the fall of the parent company. Keeping up with the tradition of Reliance as being the best employer, Ambani gave huge salaries, which were incommensurate with the returns. Furthermore, as a retail consultant who worked closely with Reliance Retail said, “When the Store Operations vertical is not at the center of a retail company, the venture is doomed.”

Doomed may be too extreme a word. But surely the company needs. For even a venture with the Reliance trademark can fall apart if it’s not planned and executed properly.


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

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Sunday, December 9, 2012

GLOBAL TRADE: PROTECTIONIST POLICIES

Protectionist policies will save your companies, but only for so long as they don't beg for euthanasia!

Let''s begin with the Chinese state-owned Aluminium Corporation of China''s (Chinalco) attempt to acquire Rio Tinto. Recently, Chinalco announced that it would invest $19.5 billion to acquire an 18% stake in the debt-ridden Tinto. This is clearly with a ''protectionist'' motive to insulate its domestic industry from falling prey to global forces. The deal will also allow Chinalco to enter the UK market, which is largely controlled by Rio Tinto. “The transaction will forge a pioneering strategic partnership through the creation of JV in aluminium, copper, and iron ore,” states a Rio Tinto release. Then there is the Coca-Cola case. The government has flatly disapproved the American''s $2.4 billion bid to acquire Chinese juice company, Huiyuan, as that would grant it a 46% grapple-hold of the Chinese juice market. Hope Lee, Senior Analyst, Euromonitor avers, “Full acquisition means Coca-Cola will penetrate the Chinese juice supply chain deep...”

While ego-satisfaction can justify China''s protectionist policy, it also leads to many disadvantages like stagnation of funds, as Matthew Phillips, Transaction Leader, China states in a PwC Bulletin, “Chinese companies still have money and government support to invest abroad...” Today, we have two; tomorrow there will be more, giving shivers to cross-border advocates... But isn''t the ''American turn'', the only ''right'' turn? We''re confused, but God isn''t! God save America!


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

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Friday, December 7, 2012

SUNCORP-METWAY: EXECUTIVE EXIT

John Mulcahy got Suncorp into a mess that’ll take some time to clean...

He would take credit for all the little good work, but a leader is also not simply cultivate the habit of passing excuses as a hobby! So there was Mulcahy – blaming external events for diverting public attention away from Suncorp’s achievements across businesses. The losses arising out of the Promina deal (for which all blame goes to him), coupled with the global financial crisis and catastrophic geographical events proved too costly for Suncorp’s bancassurance business model. The interim-CEO Chris Skilton inherits a risky situation – to keep the struggling banking entity afloat and sail safe through the speculation of divesting assets. Really John, there are more such accolades (sarcasm intended) we could give you, but for now, let us all just say – thank you John, for being gone!


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

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Can Shoppers Stop do it?

Can Shoppers Stop do it? Does Shoppers Stop have it within them to fight the slowdown and one day become India’s answer to WalMart? angshuman paul investigates...

‘First movers create the market but it’s not necessary that they sustain the first mover’s advantage. You can enter late but simultaneously, you can cash in on the market created by the first movers.’ That’s what Sam Walton, the god of retail, always touted; and his first WalMart store (then named Walton’s 5&10, which he opened in Bentonville in 1950 on borrowed money and savings from a stint in the army), wasn’t even actually USA’s first discount department store. In fact, it wasn’t even his first – Walton had to actually sell off his first store in Newport because of the lease running out. Neither was Walton the pioneer in the industry, nor was he one of the best, but what he surely knew, was that no success is worthwhile if the same is not attached with a world beating vision. From just one store to making Walmart the world’s largest and number one on the Fortune 500 list, there’s surely much to learn from Sam, and vision tops the bill.

Is B.S.Nagesh India’s answer to Sam? In his vision to revolutionise retail buying, surely yes. In his vision for making Shoppers Stop a world standard, perhaps not. That brings us to the next question. Is Shoppers Stop India’s answer to WalMart? Not yet; and strangely, mostly because of reasons that seem to be beyond their control (or are they?). And that’s where the pain starts; of being Shoppers Stop, of being B.S.Nagesh, of operating in an industry and environment that can only support you this much, of being enmeshed in a vision that is entrapped within not only the limits of the sector’s operations, but also of the vision of the government.

Despite my evident undercurrent of the critic’s clarinet, I accept that Nagesh (and even Shoppers Stop for that matter) is the best that could have happened to India in a century of retailing. Well, at least until the past year (I’ll come to that later). There can be no better logic that justifies this status than the manner in which a single man and a brand jumpstarted the view of India to retail.


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

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Wednesday, December 5, 2012

Time to snap all ties with Pakistan

The whole damn thing – like as always in the past – is fast descending into a farce and a bloody masquerade. Close to three months have passed since the 26/11 carnage in Mumbai and we now get ‘credible’ reports from investigators in Pakistan that those who planned the brutal attack were not from Pakistan. By the time you read this, the Pakistani Foreign Minister or Interior Minister would have almost certainly officially informed India of the same. Indian citizens and the Establishment would be outraged at the duplicity and perfidy of Pakistan. But then, in a response that is typically Indian, the Mumbai carnage would be a fading memory and the media would be more preoccupied with the love story of Chand and Fiza. There will be some chest thumping because the American Secretary of State, Hillary Clinton, will announce that Pakistan needs to do much more to curb terrorism. Bleeding hearts will keep up their rant that Pakistan is as much a victim of terrorism as India. More bleeding hearts will preach that only ‘people to people’ interaction will lead to lasting solutions. And of course, there will be those disposed towards misplaced bellicosity who will keep insisting that only sustained attacks on training camps based in Pakistan will teach ‘them’ a lesson. But eventually, one more bomb blast will kill and maim dozens or hundreds in another Indian city and the whole cycle of accusations and denials will resume; only to end again in a farce.

I completely agree with level headed and sober analysts that launching a military offensive against Pakistan will not necessarily result in an end to cross border terrorism. That could have been a risk worth taking if the Indian military had the power and punch to decisively knock out and decisively defeat the Pakistani military in a short and swift conflict. The unpalatable reality is: the Indian military doesn’t have that kind of punch. In any case, the powers that be know that the Big Boys will force India to go for a quick ceasefire and a stalemate. Pakistan will again make promises to stop encouraging jehadi attacks against India. It will again break that promise with impunity. So, is India to sit impotently and not be able to do anything about it?


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

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Monday, December 3, 2012

‘POTENTIAL’ ENERGY: GYMMING’S GOOD FOR THE ENERGY CRISIS

Here’s the latest on the goofy side; gyms claim they can make energy

For a nerdish example, listen to California Fitness Club in Hong Kong, which claims it can produce 300 watts of power per hour from its 13 machines using innovative apparatus. More hilariously, Enviu, a Dutch NGO, is also building a dance floor that will convert the vibrations made out of tapping of the feet into electricity. The US military uses ‘heel strike generator’ that can be fitted into their shoes which can support any battery that is fitted in any weaponry that they are carrying. With more than 26,830 gyms in US alone – and the data that an average person can produce 50 watts of electricity in an hour using a gym machine – are we at the cusp of a revolution where a revolutionary 500 million watts of electricity can be produced in US alone by exercise freaks? For a country with 3,892,000,000 million watts energy demand every year, all this is pure balderdash and stupid think! And yoga doesn’t even make this list. But still, imagine the possibilities in the third world. BSES officials in New Delhi pounding the treadmills all night long to reduce electricity shortfall. That sounds good... 


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

For More IIPM Info, Visit below mentioned IIPM articles.


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Sunday, December 2, 2012

EDUCATION SYSTEM: NEED FOR IMPROVEMENT

Policymakers need to wake up to the education system crisis...

Chile again, is beleaguering the issue of inequality not only in social terms but also in terms of educational facilities, as a consequence of which the low-income families receive poor quality of education. Then there’s Malaysia which fails to deliver a transparent education system to its people, as a result of which even excellence in the Matriculation exams would not ensure admission in Public Universities. And finally, sub-Saharan Africa, where, if you enroll in school, you only have a paltry 5% chance of making it to the University levels there!

So is privatisation of education to be blamed? The answer – a thumping no! In fact, privatisation has improved the odds that children in developing do not remain uneducated. Governments in developing economies should increase the budget allocation to public education system as well... Private names are doing their bit, it’s time for the government to sacrifice their mid-day nap as well!


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

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