Showing posts with label iipm media. Show all posts
Showing posts with label iipm media. Show all posts

Saturday, May 4, 2013

The fading magic of Nitish Kumar

The Bihar CM’s second term has been nothing short of turbulent. However, he refuses to accept that the people of the state are angry. With promises on investments and an improved power scenario not delivered, will Nitish’s arrogance prove costly?

The magic of Bihar Chief Minister Nitish Kumar seems to have started fading gradually in the second term of his regime. Against tall claims of the ruling government, the ground realities don’t augur well for the state. The poor law and order situation and the red-tape that has marked his present term has had an adverse impact to the extent that investors have already started rethinking on their proposals to set up industrial units in Bihar. The recent spate of unnecessary violence in Madhubani district is a glaring example of the shambles that law and order in the state is currently in.

In the first phase of NDA rule in the state, Bihar had acquired considerable attention throughout the country and even abroad for its remarkable performance in the improvement of law and order and other successful experiments like speedy trials, fast-track courts and prompt action against criminal activities. But the situation has changed faster than expected. Take the example of the much-touted Adhikar Yatra that was recently undertaken by Nitish. The escalating resentment of the people has become so evident that the CM was greeted with slippers, black flags, stone-pelting and anti-government slogans. The people’s anger forced Nitish to give up the Yatra and he has also refrained from participating in meetings in Ara and Buxar. No other prominent leader has hitherto faced such resentment in the state. Skeptics point out that his arrogance and absolute disregard for popular sentiment lie at the root of the quandary.

On a recent visit to the state, Markandey Katju, Chairperson of the Press Council of India, attacked the Chief Minister for the poor law and order situation in the state. In a programme organised by the Director General of Police (DGP) in Patna, Katju, a man known for not mincing his words, said while referring to public angst during the Adhikar Yatra, “He (Nitish) is shying away from facing his own people. The CM had been living in an illusion and is not doing any introspection for things gone wrong.” The reactions that followed warrant even more attention. After listening to the attack on the government made by Katju; the DGP, along with several other bureaucrats, chose to leave the function midway. The organisers disowned Katju’s speech later on and tagged it as ‘unwarranted’.

Moreover, political analysts feel that Nitish’s prime ministerial ambitions and his engagement in national politics have taken prominence at a time when the state is in dire need of Nitish, the administrator. After all, Nitish’s first term was marked by a show of guts and courage and a solemn promise to deliver on the administrative front. However, he now chooses to stay busy in yatras rather than delivering on promises of economic upliftment.

There was a time when industrialists were making a beeline for investing in Bihar. But the manner in which companies like Adani Power & Essar have given up on their proposed plans in the state is not very encouraging. Investors are realising, for instance, that chances of improvement in the power scenario are quite bleak and wonder how industry would function in this milieu. Recently, State Bank of India Chairman Pratip Chaudhuri also insisted that the Bihar Government must cater to outstanding land and power issues to encourage investors.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles

Thursday, May 2, 2013

Can Samsung keep its edge in smartphones?

The South Korean player enjoys a clear lead over its Finnish rival in the smartphone sweepstakes currently but there are quite a few curveballs to come in the hyperactive mobile phone market before a clear winner can emerge.

Until as recently as 2008, Nokia had an invincible lock on the mobile phone market in India. The Finnish giant was by far the strongest Richmond in the field, controlling a humongous 75% of the Indian mobile handset market by volume. But over the next couple of years, even as the handset market was going through a watershed technological change and churn, Nokia made the mistake of taking its eyes off the emerging market trends and has had to pay a heavy price for the lapse.

By the time it realised its mistake, the South Korean major Samsung had already taken the market by storm, introducing a whole new dynamic to the Indian mobile phone market: smartphones, which have operating systems just like PCs (with Android being the most popular). The past two years have seen Samsung make hay and sunshine of the Indian handphone market while Nokia has been left to nurse a bloody nose in the smartphone sweepstakes.

From the staggering peak of its market leadership four years ago, it has seen a heartbreaking fall with its current market share declining to 31%. In comparison, Samsung’s share in the volume game has moved up from 5% to 28% over the past two years alone, according to a research report by Cyber Media.

The cardinal sin Nokia made was to forget that technology is ephemeral in nature. So when smarphones became the hottest flavour in the handset business, Nokia was caught napping. So far it had played the market on the strength of its feature phones and had nothing equivalent to offer in the sizzling smartphone category. Its Symbian platform looked antediluvian and anachronistic in comparison to Samsung’s offerings on Google’s Android.

Unlike Nokia, Samsung had abandoned the Symbian OS early on and succeeded in developing leading-edge handsets using multiple operating systems. At the same time, it developed its own operating system – called Bada – to push smartphones into the mid-market and cannibalize the feature-phone segment. It was also quick to launch several attractive models on Google’s Android platform, which helped it gain global market leadership in the smartphone segment.

The Korean tech giant with an estimated revenue of roughly $200 billion globally started its tech world ascendancy in late 1980s and ’90s as a component manufacturer and supplier of DRAMs, and other flash memory chips for companies like GE and (its love/hate partner/foe) Apple Inc. In the ’90s, once it got the hang of basics like DRAMs, and LCD displays, it quickly scaled its electronics business, investing big sums to create economies of scale and outprice the competition.

On the strength of its broad product portfolio, differentiated retail and multiplatform strategy Samsung has, in recent years, gone about breaking Nokia’s hegemony and its premium brand perception. Nokia’s fortunes have been in reverse gear as it’s two biggest markets – China and India – have gone on to lap up the feeding frenzy over smartphones.

Today, Samsung has a clearly established lead in the lucrative and rapidly growing smartphone category with 43% market share as compared to Nokia’s 23%, according to a CyberMedia Research report. The saving grace for Nokia is that it’s still the overall market leader in the Indian mobile handset market with Rs.119.25 billion revenue and a 38% overall handset market share, compared to Samsung’s 25.3% share and Rs.78.90 billion in revenue. But there is no denying the fact that the tide has clearly turned Samsung’s way, as there’s no good alternative yet to its smartphone dominance in the Rs.312.15 billion Indian mobile handset market (some other industry estimates put it around Rs.550 billion).
 

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 

Friday, April 12, 2013

Rubbing Salt in The Wounds

Post The Steepest-Ever hike in Petrol Prices since December 2008, The Government is all set to Increase The Prices of Diesel, Kerosene and LPG. There is no Respite to The Common man’s agony.

While Buddhadev Bhattacharjee, former Chief Minister of West Bengal, failed to read the pulse of the electorate and thereby played his own crucial role leading to the historic fall of the red bastion in West Bengal; but his biting observation during the electoral campaigns that a hike in oil prices would be the Centre’s gift to the electorate soon after the elections apparently seems to have come true. Soon, after the election results of the four states and a union territory were declared, the oil marketing companies (OMC’s) guided by informal advice from the Ministry of Petroleum (to be read as the central government) called for a steep hike of Rs.5 a litre in petrol prices. While, the opposition parties, for their own hidden political motives, lambasted the government for the decision, the aam admi (common man) has been left unto himself to bear the brunt of the whammy. An approximately 56% increase in the retail price of fuel over a period of two years (the retail price of a litre of petrol in New Delhi on 15 May 2009 was Rs. 40.62, which post nine successive hikes and the Rs.5 per litre hike on 15 May 2011 is pegged at Rs.63.41) is certainly too harsh for the mass. But interestingly, the government considers that the price rise in petrol will have “marginal impact” on consumer sentiment. And laughably OMC’s argue that the increase has been “moderate”. But then, certainly it’s moderate. At least when one considers the fact that the empowered group of ministers is likely to take decision on increasing the prices of diesel, kerosene and LPG very soon. The real tough time will start only after their announcement.

While the timing of the OMC’s decision was undoubtedly a political one, the economic aspect of the decision, given the crude oil prices in the international market (hovering over $110 a barrel), can not be totally criticised. The recent hike in retail prices will help the OMC’s, in particular, to reduce their under recoveries (analysts at Bank of America Merrill Lynch estimate that despite the price hike, the absolute figure of under recoveries would still be more than Rs.1 trillion). On the economic front, while the likes of Kaushik Basu, Chief Economic Advisor in the finance ministry, and Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, argue that the increase in administered retail price of petroleum products would have a relatively less harmful effect on inflation compared to a slippage in the fiscal deficit, the opposition claim that the hike will have an adverse effect. In fact, they (Left in particular) argue that if a rationalisation of the tax structure on import of crude can be done, wherein the cess revenue earned by the government due to increase in international crude oil prices is returned to the OMC’s, then there would be no need to hike the prices and unnecessarily burden the common man. Truly so, a back of the book calculation makes it amply clear that various taxes shave off around 40% of the price of petrol. At this juncture it needs to be remembered that the taxes are levied as a percentage of the basic price of the fuel and aren’t fixed per litre. However, the government on its part is unlikely to tinker with the prevailing taxes as any reduction in taxes would definitely upset its finances and blunt its effort to keep the fiscal deficit within the set target of 4.6% of GDP.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 

Monday, April 1, 2013

Why Hazare’s Model is Supreme

Development of Sustainable and Safe Drinking Water supplies is an Acute Challenge in India, given its High Population Density, and Increasing Depletion & Contamination of its Water Resources. To Solve The Problem, all that Government needs to do is to Conserve Water. But is it Really Working in this Direction?

They say, “the statistics speak out for themselves.” Well, they really do, at least when it comes to paucity of water in India. According to a recently released government data, while only 68.2% of households in the country have access to safe drinking water, 50% of the total Indian villages have no source of protected drinking water at all. In fact, if per capita water availability is any indication, ‘water stress’ is just beginning to show in India! Given the projected increase in population by the year 2025, the availability of fresh water per person per annum is likely to drop to below 1,000 cubic meters (1 cubic metre = 1,000 litres) from about 1,800 cubic meters at present. As per the World Bank’s Environment Report, drinking water availability in India has fallen by about 15-20% over the last two decades and will continue to shrink further if no proper steps are taken to conserve it, and that too urgently.

It’s not that the social activists haven’t initiated programmes to spread awareness about water scarcity in the country, or have not come up with projects that could help conserve water; they have, time and again, but unfortunately, such uprisings, except a few, have died down after sudden flashes of enthusiasm. In fact, today, there are very few social activists like Anna Hazare and Rajendra Singh who continue to do their bit to conserve water since 1985, when the shortage of water in comparatively dry parts of the country, like several places in Rajasthan and Maharashtra, had started turning acute as frail efforts from the government failed to provide residents with water.

While Hazare with Pani Puravatha Mandals (water supply associations) ensured proper distribution of water in Relegan Siddhi village in Maharashtra, Tarun Bharat Sangh, started by Rajendra Singh in 1985, is involved in revitalisation of five rivers, like Arvari & Ruparel, around Alwar region in Rajasthan, and is using traditional water harvesting methods like ‘Johads’ or small earthen check dams to conserve water.

Although these projects proved to be really effective when it came to meeting the rising demand of water in these areas, they, unfortunately failed in influencing the government, and in turn being replicated on a larger scale. Nevertheless, efforts by Rajendra Singh bore fruits considering that the project was extended to 1,200 villages. Even the 1990s saw some strong initiatives from politicians as well as social activists like Mathurbhai Savani, who with other MLAs from Gujarat visited Alwar to see the success of the project and took no time in replicating it within the parched lands of Gujarat. Chennai too saw similar urban experiments on water conservation in the 90s under the leadership of former IAS officer Santa Shiela Nayar. However, despite their thumping success, projects in both Chennai and Gujarat were never taken ahead by the government. “They were not concerned,” says Rajendra Singh, the water conservationist from Alwar, Rajasthan and winner of the Ramon Magsaysay Award for community leadership in 2001 for his pioneering efforts in water management. “No policies have been written down yet on water conservation. The government has the budget and it can do anything, but it is not doing enough,” Singh tells B&E.


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

Wednesday, March 27, 2013

“B-Schools Should Desire Maximum Industry Interface”

Taking Forward their Commitment to Education, The Ninth IIM was set up in Rohtak in 2010 under The Mentorship of IIM-Lucknow. In Conversation with B&E’s Bhuvnesh Talwar, Dr. P Rameshan, Director of IIM-Rohtak, talks of Urgent reforms that are Required in India’s Management Education System.

An economist and an IITian, Dr. P. Ramesh has represented India several times in the international arena. The most prominent ones being The Asian Productivity Organisation, Tokyo, Japan, representing India on “Survey on Total Factor Productivity” on Asian countries and at the National Experts’ meeting in Kuala Lumpur, Malaysia. He is presently involved in teaching, training, research and consulting. Prior to joining IIM, Rohtak in July 2010, he served as Director in-charge of IIM, Kozhikode during April-May, 2009. In an exclusive interview with B&E, Dr. Ramashan discusses the need for innovation and greater independence at work place.

B&E: There is a general opinion that India has been home to some quality B-schools. Do you think there are loopholes in the system that deserve careful corrections?
Dr. P Rameshan (PR):
In any business field, first the business emerges and develops, and then the government thinks about placing control mechanisms. Yes, there are issues in terms of accreditation and regulatory mechanisms since the existing systems are inadequate. However, a view over the need to regulate the business of B-schools has strengthened over the years and a good mechanism will definitely emerge soon.

B&E: Although considered as one of the key ingredients of quality B-school education, many institutes in the country still treat “industry interface” as secondary. Why so?
PR:
I think every business school should desire maximum industry interface. However, to many of them, industry interface is a tedious task. This is due to their own constraints and inadequate response from the industry. It has been observed that although companies speak of increased interaction with the academic world, they have actually been wary of the initiatives of the academia.

B&E: Unlike the West, India has failed to develop home-grown cutting edge technology. What is your opinion on the same?
PR:
This has been a matter of concern for many of us in the academic world. However, the Indian teachers are so pampered by ready-made material available from the western world that they do not feel the need to develop new material or frameworks. In fact, Indian academic researchers have not been sufficiently motivated to work on fundamental issues. The short run orientation of Indians due to genetic, social and economic reasons have also contributed to this.

B&E: What value-addition do internship programmes offer to freshers and students with prior experience?
PR:
For a fresher, everything that he learns about management is new and his value addition is obvious. During the internship, he gets an opportunity to apply the concepts and techniques he learnt over the first year as the whole experience will be new to him. For those with prior industry experience, it’s the time to revalidate what they experienced while on job.


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

Sunday, March 3, 2013

POLICY LEAD: DTAA

Having lost billions in treaty shopping while honouring the clauses of the DTAA signed with other nations, India is now on a renegotiation spree. But as the government signs new treaties with other tax havens it must ascertain that the clauses are foolproof so that shell companies are prevented from taking undue advantage of the tax provisions. by Gyanendra Kumar Kashyap

Primarily tax havens do not impose capital gains tax on its residents and with India exempting the capital gains under DTAA, the provision for sure has been used and abused by a select few who have formed conduit companies in these tax havens taking advantage of the sweet tax deals on the pretext of avoiding paying tax in India. In fact, the loss to the exchequer on account of lost capital gains tax is humungous. In the last decade alone the loss on this account has been a whopping `281.39 billion while on an average the annual loss to the government coffer amounts to `23 billion. Even the most pessimistic estimates are suggestive of the fact that the extent of the lost revenue could have easily come to the rescue of companies such as Balco, VSNL, IPCL and several others which were sold to private parties at dirt cheap prices. This poses a question as to whether, the clauses in the agreement need to be revisited.

Finance ministers till recent past were vociferous in their support of the controversial agreements citing the oft touted logic that changing the clauses would lead to capital flight, slowing down of foreign investment and thereby stock market crash. In fact, former finance minister P. Chidamabram (May 2006) went to the extent saying that he didn't want to review the subject given the “ larger economic, political and diplomatic considerations.” The fallout concern is totally logical given the fact that out of the $117.9 billion of foreign direct investment that has come to India since April 2000, the estimates of the Department of Industrial Policy & Promotion, DIPP, suggests that $47.8 billion (a whopping 42.53% of the total amount) was routed through Mauritius. However, what is worth noting is the fact that these investors are not necessarily based in Mauritius. It's the billions of dollars that are stashed in tax havens like Mauritius (by Indians themselves) and a large part of this black money is channelled back as FDI or FII apparently through the legitimate path provided by the likes of Indo-Mauritian DTAA. Sudhir Kapadia, Market Leader, Ernst & Young is of the belief that Indian MNCs float holding companies or special purpose vehicles in tax havens for acquiring companies in US and Europe.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.


Friday, February 8, 2013

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.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay 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...

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.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay 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)

Monday, January 28, 2013

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 IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Who’ll call warren’s bluff?

The last time I tried to meet up with Buffett to convince him I could be the one, I was stopped at the New Delhi airport itself (alright, I’m lying; I couldn’t even afford the air ticket). But think about it; we’ve all been had. A handful of months back, when we ran Warren’s (and his son’s) exclusive interview in B&E, we had forecasted bang on that Ajit Jain (Berkshire Hathaway’s Reinsurance Business Head) was amongst the nine probable candidates who could be successors to Warren Buffett. And we’d regimentally recommended to dear Warren that he should give up his position sooner than later. Oh, how dumb could we have been...

“I did some dumb things in investments. I made at least one major mistake of commission and several lesser ones that also hurt... Furthermore, I made some errors of omission, sucking my thumb when new facts came-in that should have caused me to re-examine my thinking and promptly take action...” Thumb sucking adjectives aside, these are the actual words of confession from Warren Buffett in his annual letter to Berkshire Hathaway shareholders (Purely due to ethical journalistic policies, I have not bought Berkshire’s shares; one share cost Rs.60,00,000 last year; they say it’s down this year).

But what left me sucking my thumb (sorry Warren, if you can use it, then this is a global usage now) was his one announcement in the above mentioned letter to his shareholders (where he also made the confession written before) where Buffett overtly praises Ajit and paints a picture that most definitely points towards Ajit donning the top hat at Berkshire. In his own words, “There is no one like him and his business is never the same. Ajit came to Berkshire in 1986. Very quickly, I realised that we had acquired an extraordinary talent. So I did the logical thing: I wrote [to] his parents in New Delhi and asked if they had another one like him at home. Of course, I knew the answer before writing. There isn’t anyone like Ajit...” And guess what, it is Buffett’s custom to call up Ajit Jain every evening to discuss ‘business matters’. I never could imagine that I’d live to see the day when Warren would be doodling over a guy. Has Warren finally fallen in love? Well, despite my unfathomable bubbling eagerness to say yes, the answer is a clear no. This is Warren at his impressive bluff best.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Saturday, January 19, 2013

Wrong medicine

Sending more troops not enough

Obama has recently announced that he will send additional NATO troops to Afghanistan to stabilize the situation. However, troops cannot solve the larger issues faced by Afghanistan.

The major stumbling block is corruption, where the enemy is ironically far better placed. To fight corruption in its ranks, the Taliban has set up its own anti-corruption committees in 33 provinces. It also runs its own courts, which are known for quick justice without the need to pay bribes. The US is trying to win over mid-level Taliban commanders with lucrative job offers and offering them good money, which is, to a large extent, not working! In comparison, the Afghan military is hopelessly incompetent, ill-equipped and highly corrupt. Afghanistan supplies over 90% of the world’s opium and heroin, which brings in billions in revenue each year. So much so that even the US Drug Enforcement Administration reports, “Heroin is more valuable than oil. Example: A ton of crude oil costs less than $290 - but a ton of heroin cost $67 million in Europe; and a ton of heroin in New York cost between $300-$900 million.” The warlords of the region are facilitating the whole trade.

President Hamid Karzai has stressed on ending “the culture of impunity and violations of law.” Opposition leader Dr.Abdullah has blamed overseas interests for the malaise, as he comments, “For that sort of corruption, it’s the international community that also shares responsibility with us.” To contend with the growing Talibanism in 2001, the US had turned to these warlords for help. Even today, NATO still has to rely on some of them for security in the provinces. According to American officers in Afghanistan, tribals will gladly take money and assure the eradication of insurgents without taking up arms. But the resulting corruption is going to stand in the way of all attempts to bring long term stability to Afghanistan. If Obama is serious about saving Afghanistan, he needs to tackle this parallel economy at the earliest.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.