IIPM Publication: February 2013

Friday, February 8, 2013

how DTH players can make them count

DTH players were on a dream flight in India so far, but the delay in rollout of Phase II of CAS has dampened expectations. Vareen Gadhoke Ray & Surbhi Chawla discuss the upcoming trends and how DTH players can make them count

Yet, all is certainly not lost. As per projections by MPA, the industry is expected to touch $12.1 billion by 2014 and $18.5 billion by 2020; margins will improve to 15% and 23% over the same period, and EBITDA profits will reach $2.3 billion and $4.4 billion respectively. In terms of volume, broadcasters and LCOs are most likely to lead in the long-term, while LCOs and cable multi-system operators (MSOs) will lead in terms of margins. It's most likely that DTH satellite pay-TV operators will only start posting profits after 2013. Vivek Couto, Executive Director, Media Partners Asia, also cautions, “Cable MSOs probably face the most challenging future, as capital intensity and competitive dynamics are such that the premium placed on funding and execution skills is growing at an alarming rate. Nonetheless, most national MSOs will be able to forge stronger last-mile links with the consumer for the long-term, with positive implications for future funding as well as large-scale deployment of digital pay-TV and broadband.” Furthermore, Indian pay-TV subscribers are expected to grow from 105 million in 2009 to 149 million by 2014 and 173 million by 2020. This means pay-TV penetration will grow from 78% in 2009 to more than 90% over the long term. Cable will retain 70% market share by 2014; falling to 64% by 2020, while DTH will scale up to almost 35% share over the long term. Also, DTH subscriber base is expected to climb from a net installed base of 17 million in 2009 to reach 45 million by 2014, and 58 million by 2020. In all probability, India will be the largest DTH market in the world in terms of subscribers by 2012, overtaking even the US.

The Technology Gimmick

On the question of who will make money, differentiation in services and products would help in 'un'levelling the playing field. The next wave of growth for DTH would undoubtedly be paved by superior technology and advanced features, not to mention high quality content. Even in the developed countries, technological advancement is helping drive the next phase of growth. “As a matter of fact, in UK, almost 60% of all DTH boxes are DVR boxes and the expectation from the Indian market is huge,” shares Alan Dishington, GM, NDS India. The silver lining for the operators is that the digital video recorders (DVR) or the HDTV boxes that are being offered are not massively subsidised. “The launch of Reliance Big TV HD DVR is part of Reliance Big TV's relentless pursuit of quality & profitable growth by blending the best in technology, content experience, reach & service,” says Sanjay Behl, CEO, Reliance Big TV. But this can also become a me-too game in some time.

Read more.....

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
IIPM – FLP (Flexi Learning Program)

Are you satisfied with the performance of your Prime Minister Dr. Manmohan Singh? How would you rate his performance?

The economist seems to be going from strength to strength. The soft-spoken, mild-mannered Sikh gentleman has a picture-perfect clean image. Though perceived to be pro-reforms, he has maintained a balance between sweeping economic reforms and populist, pro-poor measures. Not the proverbial Indian politician, Dr. Singh keeps away from party matters as far as possible and concentrates on running the government. Having faced a lot of flak for his non-interference in the manner in which the Union agriculture ministry has handled the price rise issue, his government has been crucially undecisive about ways to tackle the growing Maoist influence. However, a weak Opposition has been God-sent for this man of few words.

Read more....

Wednesday, February 6, 2013

Theory of unintended consequences

Toyota President Akio Toyoda’s apology was supposed to firefight the recall controversy – it made it worse! Welcome to the world of unintended consequences

Circa 2000: When Ford Explorers equipped with Firestone tyres began toppling over on highways, John T. Lampe, the then Firestone chief went on television to assure consumers that his company will provide them with new and reliable tyres and ensure such incidents will not happen in future. The apology worked. Lampe saved the day by ensuring the negative impact on sales was much reduced. Compare that to how Toyota’s response to the recent recall is unravelling into an unexpected PR and sales disaster. At the centre of all this is Akio Toyoda, President, Toyota Motor Corporation, whose response – critics point out – came weeks after the recall started; and that too, when a reporter cornered him in Davos. “We have heard concerns from customers about this issue, and we are recalling the cars in question to resolve the problem completely. We are determined to ensure that our customers can feel absolutely at ease with their vehicles,” Toyoda had said.

In fact, in managing this apology, Akio Toyoda today faces the most critical challenge of his career, with the recall controversy becoming a b-school case study of what a CEO should (or should not) do when faced with a quality control disaster; and each move of his working exponentially towards (or against) saving the company from an unenviable moment in corporate history. Unfortunately, going by all that he seems to be doing, it’s quite clear that Toyoda never bargained for becoming the global spokesperson for his company, and that too during a crisis.

For the records, Toyoda underwent a long grooming period before he got his hands on the top job and became the first member of the founding family in the last 14 years to take the reins of the company founded by this grandfather. He came into the picture in 1984, became a board member in 2000 and was made an executive vice president in 2005, taking charge of Japanese sales and overseas operations before finally taking charge of the automaker in 2009. Experts believe that his ability to put the brakes on Toyota’s rapid expansion had empowered the Japanese automaker to focus back on quality and overtake General Motors as the world’s largest automaker. The company reported a record annual net loss of $4.4 billion in May 2009, most of it due to recessionary winds. However, amidst all this, Toyota’s image of high quality and commitment to consumers didn’t take a hit. JD Power auto surveys globally had ranked Toyota regularly at the top in various countries. ‘The Toyota Way’, as it is widely known, has become an aspiration to companies across the world in 73 years of the company’s existence. Up until now one guesses. Toyota has so far recalled more than 8 million vehicles, including the iconic Prius, Camry and Corolla.

Read more.....

UNITED STATES: FISCAL DEFICIT

When Obama took office in 2009, the projected US 10-year deficits stood at $8 trillion. In one year, the figure’s jumped to $16.2 trillion. Is Obama on a fatal track?

Despite the fact that Obama has proposed a three-year freeze on discretionary spending, with exemptions for the military and national security (with big-ticket entitlements for programmes like Social Security, Medicare & Medicaid also excluded), to address the huge deficits, to save up to $250 billion over the next decade, that adds up to only about 3% of the deficit projected until that period. So, the question is – where will the other savings come from?

Sentiments at present are confused at the moment, even amongst those in the Treasury, at least as far as their communication with B&E goes. While on one hand, it is accepted that the perilous debt levels must be brought under control in the coming years ($700 billion by 2013), on the other, there are those who support that the record deficit spending was mandatory to revive the sluggish labour market. In fact, to this end, the budget has proposed about $100 billion in new stimulus measures, designed to lower the US unemployment rate from the current 10%, the highest levels it has touched in the past 25 years.

According to Obama Administration’s Office of Management & Budget (OAOMB), the total debt-to-GDP ratio stood at 83% in fiscal 2009 and is on track to hit 94% this year, 99% in 2011, and 101% in 2012. In fact, OAOMB feels that the debt could go even higher if Obama doesn’t do something about the Bush-era tax cuts on families earning over $250,000 a year and fails to freeze non-security discretionary spending for three years. This is certainly a matter of concern for an economy like US that has just managed to escape a fatal recession. In fact, the seriousness of the situation can be gauged from the fact that in a paper published last month called Growth in a Time of Debt, economists Kenneth Rogoff of Harvard University & Carmen Reinhart of Maryland University conclude that “Historically, advanced economies have slowed noticeably when their debt-to-GDP ratio has exceeded 90%.” For now, the figure is predicted to touch 94%, and will only rise in the years ahead, signalling a clear and present danger! Rogoff had told B&E late last year how the hidden problem also is individual states going bankrupt because of unaccounted state level debt.

Read more......

Monday, February 4, 2013

“Water market is a big threat to India”

The man who has been fighting to save water in India speaks out on his passion and vision...

Rajendra Singh, better known as ‘Waterman’ is a Ramon Magsaysay Award winner for Community Leadership. He has undertaken extensive water conservation efforts in drought-prone eastern Rajasthan. Rajendra Singh runs a non-governmental organisation named ‘Tarun Bharat Sangh (TBS)’ since 1985, which has built more than 4,500 earthen check dams to collect rainwater in Rajasthan. Talking with B. S. Narayana Swamy, he told that de-centralisation in the village is a good answer for water problems.

B&E: Is privatisation of water supply, in any form, favourable for developing nations like India and its people?
RS: Privatisation of water supply is nothing but controlling the community and there by controlling their life. The one who is really sensible shouldn’t even think about privatisation of essential natural resources like water. Having water is a basic right of a human being and any government should not deny that. We have a democratically elected government and fulfilling the need of drinking water is a constitutional duty of the government. Water is ‘jeev jal’ without which one cannot lead the life and selling the control of ‘jeev jal’ to private hands is really dangerous. Those who have money can purchase water but what about the 70% of our population, who is only hand to mouth? That’s why I warn that new water market is a big threat to India.

B&E: In states like Karnataka government is planning to introduce PPP (Public Private Partnership) for water supply and in fact in many cities it has implanted the pilot project of the same and claiming success. Is PPP best idea for better service?
RS: Privatisation of water supply in any form is unacceptable. They are using a beautiful word called PPP, but it’s nothing but ‘Jhoota Khel’ (wrong play). They are selling the ownership of our natural resource to private industries in the name of PPP. If they monopolise with our resources then the common people would have no choice for their living. For private players, life is not a priority, their priority is money and they work for money only.

B&E: In mega cities like Delhi, Bangalore, Chennai... demand for drinking water is increasing and governments are hardly trying to meet the demands. What are your suggestions for better management of water?
RS: Communitisation is one good solution. Presently we have a system which is anti-community. So de-centralisation in the village model is a good answer to this so called water problem. If our leaders, who are adorning the seat of power, tried thinking sincerely for a good answer they may find many. But they always think about getting the power and retaining it for the next five years. They come to power by assuring the innocent people of providing them with 24 hours water supply; but once they come to the power they start thinking 24 hours only about how to retain their power. To reach the rising demand for water in mega cities like Delhi and Bangalore the leaders should have far sight; which is lacking in our politicians. Most of them are not eligible to run a government.

Read more....

Friday, February 1, 2013

A picture that’s worth many millions...

Firms need to take a holistic view of the macro economic environment in a recession

The global crisis has impacted the economies of most countries and the most worrisome manifestation has been the decrease in economic activity arising fundamentally from a falling demand for goods and services. Further, the situation has been aggravated by the fear that has invaded the financial sector leading to a prolongation of the crisis in the credit markets.

However, the impact on each country, each region of a country and each sector within each country may be of different degree. From the point of view of individual firms a subtle, sophisticated and nuanced analysis of their particular situation may yield superior results during this global crisis relative to a “run for the trenches” strategy.

Hence, it is rather difficult to provide a universal crisis plan. However, firms can certainly ask and answer some questions to help them draw a map for the next few stormy months.

what sector is the firm in?
If the firm produces a necessity, like milk, as opposed to television sets, the change in the demand for their goods will be relatively smaller. In that case firms may see their profit margins fall during this crisis but relative to other sectors of the economy their margins will remain attractive. Thus, there is no need to panic. To the contrary, this may be a good time to invest in cheaper land and other undervalued assets that can later be sold at a huge profit.

However, if the firm produces non-essentials the situation is certainly more complex. In this case the strategy depends on the fundamentals of the sector within which a firms works. For instance, producers of organic product may flourish during a recession by targeting an upper income niche. Moreover, firms in this situation may survive if they are able to live with lower margins while searching for different niches for the products in their lines. Further, creative and bold managers may prove to be an asset over the conservative type.

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
IIPM – FLP (Flexi Learning Program)

A picture that’s worth many millions...

Read more.....