Tuesday, April 30, 2013

There’s much to fix between the piers

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

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

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

Unfortunately, even in the wake of India’s growing maritime trade in the world market and the unprecedented growth in bulk commodities and containerized trade, major ports in India have failed to expand capacity and develop facilities commensurate with the growth in trade. In the fiscal year 2011-12, Indian exports accounted for $303.7 billion, logging an annual growth of 21%. Meanwhile, imports grew to $488.6 billion, a 32.1% growth. This rapid growth in trade can be sustained only if the port infrastructure keeps pace with the increasing volumes of cargo. Indian ports, over the past decade, have seen a sharp surge in traffic, which has almost grown four-fold to 9.7 million TEU (One TEU represents the cargo capacity of a standard intermodal container, 20 feet long and 8 feet wide) in 2011, from 2.4 million TEU in 2001 - a growth of 395%.

But our port-handling capacity is way short when compared to the throughput of major ports globally. Even the 9.7 million TEU handled by Indian ports last year represents just 8% of the global benchmark ratio for economic output and one-twelfth of global container traffic averages. Given that the Indian economy grew 7.8% for fiscal 2012, ports in India are in urgent need of capacity augmentation in order to meet the country’s growing economic needs and also to grow our share of international trade.

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


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

Saturday, April 27, 2013

Moving towards a turnaround mode

The telecom sector in India is passing through a rough patch as the industry grapples with cost and regulatory issues. Amidst the plethora of problems facing the industry, Bharti Airtel is looking to drive growth by tapping into the demand for data and premium services.

The Indian telecom juggernaut, which had chugged along at a fast pace in recent years, is now facing strong headwinds from several quarters. Between 1998 and 2010, when the industry scorched gangbuster growth rates – witnessing an unprecedented boom of more than 700% in subscriber base, from just 1 million subscribers to over 750 million – the idea of any imminent slowdown would have been laughed out of court. But intense competition in the sector over the past few years has dented the profitability of operators and affected their earnings. From just 3-4 operators competing in any particular service area till a few years ago, there are now many more competing for the pie in any given circle now. Not surprising that the industry could generate revenues of just Rs.1131.8 billion in FY12 compared to Rs.1141.3 billion a year ago, dragging it back some 0.83%. Although the results were in line with the trend of decelerating growth in the sector since 2010, the industry never expected the top line to slide into negative territory.

If the market has been morose, the industry has also been at the sharp end of regulatory uncertainty over the past few months. This has led to depressed investor sentiment for the sector. In February this year, the Supreme Court struck down licences of 122 telecom operators, dealing a body blow to the sector’s prospects for the future. Another shocker followed soon after when the Telecom Regulatory Authority of India set a stratospheric reserve price for the auction of 2G spectrum – at almost twice that 3G’s. Even global investor rating agency Fitch noted recently that regulatory risks such as such as an one-time charge for excess spectrum, spectrum re-farming and imposition of high spectrum renewal fees are high for the Indian telecom industry compared with other markets in Asia-Pacific.

But while the industry scenario is hardly inspiring, the number of mobile subscribers in the country has continued to grow at a healthy clip. According to the latest data from industry regulator TRAI, the number of mobile subscribers stood at 952.9 mil

lion as on June this year. Bharti Airtel, India’s largest telecom operator by both revenue and subscriber base, which is ranked 13th on this years B&E’s list of Most Profitable Companies, commands a market share of 27.34%, and has a total subscriber base of 185.30 million, as per the latest data given out by the Cellular Operators Association of India. For the month of May alone, Airtel added 2.01 million new users to its bulging subscriber base.

However things are not as rosy as they look. The company is bleeding, both in its domestic and international operations, and in most of its business areas. In May this year, the company reported its ninth straight quarterly profit decline, hit by higher amortization and interest costs on its 3G network investments, as well currency fluctuations and higher tax provisions. For the fourth quarter of the last fiscal consolidated net profit fell to Rs.10.06 billion from Rs.14 billion a year earlier.

The company reported foreign exchange losses of Rs. 1.82 billion in the quarter. However, the results also offered a glimmer of silver lining. Despite the burden of high costs, the company’s total revenue was up 15% to Rs.187.29 billion. The company also reported improvement in key performance indicators, including minutes of usage, subscriber additions, average revenue per minute and average revenue per user.


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

Wednesday, April 24, 2013

20 years of change after Rajiv Gandhi

Known as one of the brightest stars in Indian politics, Rajiv Gandhi’s assassination shook up the foundation of the Congress party. A documentation of how his death reversed fortunes of the party, and dramatically altered the Indian political scenario...

Twenty one years ago on May 21, 1991, a bomb explosion killed Rajiv Gandhi, while he was campaigning for the Congress party in Sriperumbudur, about 40 km from Chennai, on the second day of the 10th Lok Sabha elections. [Rajiv who had served as the PM of India between 1984-89 (at the age of 40 – he was the youngest ever PM of India) is till this day regarded as perhaps the most charismatic figure that ever took the stage of Indian politics.] The sudden, premature demise of Rajiv not only shocked the world, it also marked an end of an era that saw India being led by the Nehru-Gandhi dynasty for all but five years since independence.

Though nobody took immediate responsibility, the attack was blamed on Rajiv’s arch enemies, the LTTE, that was fighting for a separate homeland for the Tamils in Lanka. Rajiv could not contain the political problems afflicting India, and found refuge in international entanglements and commitments. He committed the so-called Indian Peace Keeping Force (IPKF) to Lanka in July 1987 in an endeavour to help the government there to eradicate militants agitating for a separate Tamil homeland. [The IPKF had to be withdrawn in 32 months.] His period in office was marred by scandals and allegations of corruption on so huge a scale that he undoubtedly lost the election of 1989 partly on account of public perception. The Congress suffered an electoral defeat. His successor, V. P. Singh, could not hold office for long, and Rajiv started campaigning in earnest in 1991. But then, his assassination put an end to his half-finished political career.

Most people remember Rajiv as a visionary who encouraged foreign investment, a freer economy and rejuvenated his own party. “People had sympathy for Rajiv. He was not aware of the problems of the people at the grassroots level. However, he was a very dynamic person,” recalls Mohan Dharia, a former Union Minister who had served in the Indira Gandhi cabinet, but resigned on his differences with her ideologies. He remembers Rajiv as someone who wanted to modernise India.

When US denied to give India the technology of supercomputing, it was Rajiv who encouraged the creation of the indigenous Param Super Computers. Agrees Dr. M. P. Narayanan, former Chairman of Coal India (1988-91), who says that with the demise of Rajiv, India not only lost a visionary, but a receptive and encouraging human being. “His leadership style was such that would even allow mid-level officers to walk up to him and he would listen to their ideas. I wonder if subsequent PMs have ever found time for that,” he says.

Rajiv’s vision for India was that of a modern nation that takes full advantage of technology. We’re living his vision today. Says political observer Suvrokamal Dutta, “Many people believe that it was Narasimha Rao that initiated the globalisation process. However, it was Rajiv who created the ground for that process. He was also working on various missile treaties with Western countries.” Rajiv’s other revolutionary move was to lower the voting age to 18 from 21 years in India. Having said thus, it is important to note that Rajiv’s political career also became mired with allegations and scandals. The Bofors scandal is an unsettled blot on his otherwise glorious career. It cost him three-quarters of his MPs.
 

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

Saturday, April 20, 2013

“We will exit any business that we cannot be a leader in”

In this exclusive interaction with B&E, Adani Group Chairman Gautam Adani deliberates on the group’s strategy to grow as an integrated infrastructure company and also take its business global, and also on how the group is tackling the current challenges that it faces from environmental groups and regulators

Ahmedabad-based Gautam Adani, Chairman of the $6 billion conglomerate Adani Group, is on a growth path to rapidly expand presence in the global and domestic market with its focussed business interests on sectors such as power, ports, coal; which have less competition. The group’s three listed companies have grown at a brisk pace, which places it among the top10 private business houses in India. By taking the total generation capacity of the Adani Group to a massive 4,000 MW in line with its vision of achieving 20,000 MW by the year 2020, Adani Power has become India’s largest private sector power generation company. However, the group, which is exiting its real estate business, is also facing significant hurdles in terms of regulatory and environmental challenges. Adani talks to B&E’s mona mehta on the group’s domestic & global plans. Some edited excerpts:

B&E: Amidst economic upheavals, how do you see the opportunities emerging in the global market and what is your strategy to grow your business presence in the infrastructure sector within and beyond India?
Gautam Adani (GA): On the business front, Adani Group is strongly thinking and acting global and planning to invest over $6 billion in global expansion. The group has successfully commenced its mining exploration programme in the Galilee Basin in Queensland through Adani Mining Pty, the Australian arm of the Adani Group. This marks the culmination of the first phase of its foray into Australia. The Adani Group is the single largest Indian investor in Australia in coal mining, creation of dedicated railway infrastructure to transport the coal to ports and dedicated coal terminals such as Adani Abbott Point Coal Terminal. Besides, we have synchronised another super critical unit of 660 MW at our state-of-the-art power plant in Mundra in the Kutch district of Gujarat, thus taking the generation capacity of the Adani Power to 3,960 MW.

These achievements will mark the beginning of another illustrious chapter for the Adani Group in the days and years ahead. Additionally, Adani Enterprises has also commissioned India’s largest 40 MW solar power plant in the state of Gujarat, thus taking the total generation capacity of the group to a massive 4,000 MW. In line with its long term vision of achieving a capacity of 20,000 MW by the year 2020, Adani Power has now become India’s largest private sector power generation company.

B&E: You are currently involved in a bid for Gujarat Gas. How confident are you of your prospects?
GA: Adani group is keenly interested in bidding for British Gas’ (BG) stake in city gas distribution company, Gujarat Gas. Currently, the due diligence process of BG’s stake in Gujarat Gas is going on. Adani Group is interested in evaluation and the process of evaluating it is on. We will be able to divulge more details at the right time. Actually, British Gas has decided to exit from the business in which it has 65% stake. If the acquisition comes through, it will have synergies with its own gas distribution business. The company will have to fight off many suitors who are known to have shown interest in the business like a consortium of public sector oil companies, Gaz de France-Suez, German power company E.ON, and a few private equity players.

B&E: Where do you see Adani Group in the next 10 years and which businesses will contribute the maximum to the group’s revenues?
GA: Power, ports and mining business are expected to contribute the maximum to Adani Group’s revenues and profits to the tune of 80% of the Group’s profits.

B&E: How are your expansion plans in the power sector progressing? What hurdles do you see in your path towards achieving 20000 MW capacity?
GA: Currently, in the overall power sector, which is facing hurdles of fuel supply blocks, Adani Power is also facing issues with regards to its power purchase agreements signed with two states – both Maharashtra and Gujarat. As for the Tiroda power project, Adani Group has signed a power purchase agreement based on the Lohara mines, which was cancelled by the environment ministry, as it is close to tiger reserves. However, Adani is not seeking to terminate the power purchase agreement with Maharashtra. In fact, we have recently approached the government and asked them to re-adjust the terms since the mine is not available.


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

Friday, April 19, 2013

International

Fuel price protests

If the international market is any indicator, fuel prices are set to rise again in India. Trouble seems to be coming in from another African nation, this time Nigeria, that may lead to a spurt in international crude oil prices and is most certain to have a knock-on effect on domestic fuel prices of most countries. Hit by a continuing strike by major labour groups, there has been a constant worry about oil supply disruptions from Nigeria. The country is Africa’s top oil producer and pumps out 2 million barrel-per-day. Already, the worry seems to be reflected in the West Texas Intermediate crude price, which rose by by 3 cents for February trade. Brent North Sea too saw a spike in its crude prices by 37 cents, reaching $110.81. The labour protests, which are the main cause behind this international worry, are in response to the Nigerian government withdrawing the popular fuel subsidy provided by it to its citizens. These protests have, of late, morphed into nationwide protests and have become an outlet for thousands to vent their grievances against what they see as a venal ruling political class and an incompetent government. While the government has not yet withdrawn it’s decision, it has agreed to slash fuel prices. Following this announcement, several labour organizations withdrew their strikes and urged the public to go home but resentment continues to simmer.

Ford recalls suvs

The American multinational automaker Ford is recalling nearly half a million minivans and SUVs because of mechanical issues. The Michigan-based automaker is recalling 539,000 sport utility vehicles, including Ford Escape, Ford Freestar and Mercury Monterey minivans in two separate recalls. The first recall involves 286,000 Ford Escape SUVs manufactured during 2001-02, which have been found to have defective anti-lock brakes module. The second recall involves 253,000 Ford Freestar and Mercury Monterey minivans made during the 2004 and 2005 model years, which are reported to suffer from a torque converter malfunction.


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

Tuesday, April 16, 2013

“We are a boringly consistent company”

Saugata Gupta, CEO, Marico, Consumer Products Group

B&E: Recently there was a profit warning from your side to the investors. What were the reasons?
Saugata Gupta (SG): First let me clarify that it was not a profit warning but a guidance. We believed that with inputs costs having doubled, our earnings growth will not be in line with the expectations on the stock from analysts and the market and therefore we gave out a guidance. And we continue to stand by it. We are saying that over the immediate time horizon, given the kind of cost structure and input costs, and the fact that we have chosen to grow consumer franchises and get more consumers on board, along with volume growth, perhaps, the earnings growth will be a little muted in the immediate and near term.

B&E: Are you contemplating any price hike on any of your products given the inflationary pressure?
SG: We haven’t taken any price hike in the past 6-7 months. But as I said, if the need arises, we will go for it, but it will be very marginal in nature. We don’t foresee that in the immediate term, unless there’s more inflationary push, so no major price hikes.

B&E: Are you looking at any tweaks in the production chain to manage costs, due to the price pressures?
SG: We are obviously concerned about cost management, but at the same time, we’re not sacrificing in terms of investments, innovation and talent. Like any other company we will continue to explore opportunities for cost management.

B&E: You have gone ahead to explore new business opportunities in the personal care and food space, so any new product launches we can expect?
SG: We just recently diversified into the skincare category with Parachute Advanced, so its too early to talk about the category. We also have men’s grooming products in most of our international markets. It’s a category that is growing. We have launched a couple of new categories this year, so we are focusing on investing and growing these categories. In the food space too, we have got into the Oats space with Saffola (we are already the number three player), and are also test marketing a savoury oat. So as I said, we have enough on our plate, we believe in focus, investing in one or two products/ categories, and focus on growing them rather than going into multiple categories. At the end of the day if you have to create a strong franchise you have to focus on investing in fewer ones, rather than entering every space. Health foods is one category where we see a lot of growth opportunity. Our Oats product is available mostly in modern trade nationally and retails in the southern markets. And we are still in the process of further scaling it up.

B&E: You have forayed into international markets quite aggressively, how is the business doing for you? Any plans to enter more markets globally?
SG: Our internal business is currently contributing 23% of our top line and we will continue to focus on emerging markets, where there is long-term potential for growth and significant population with low penetration of categories. That will be our international business strategy. When it comes to acquiring more companies, our strategy is that as we grow (nationally and internationally), our growth will be a mixture of organic and inorganic and, as and when opportunities come, we will explore. In India, opportunities for acquisitions are much lower, and also the price earning multiples of earning is on the higher side compared to international markets, where more opportunities can be found. Also, in most international markets, we don’t have a presence and inorganic gives you a mass and a foothold to start.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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
Posted by at
Labels: , , , , , , , , , , ,

Truth lies further west

Hyundai is fast ramping up the numbers due to its momentum in third world markets. But metamorphosing itself into a premium brand still remains work in progress

While the journey for Hyundai Motor Company started as a unit to assemble cars for Ford Motor Company back in 1967, it was a matter of just few years before its founder Chung Ju-Yung started harbouring dreams of making a cut in the global automotive circuit. After the initial run, the years that passed attracted huge investments from the company for developing technological capabilities & since then, there has been no looking back. At the end of 2010, Hyundai stood tall at fourth place with sales of 5.74 million units along with its partner Kia Motors, ironically overtaking Ford, which managed to sell 5.31 million units even after a string of profitable quarters. Also, Toyota (which Hyundai used to follow), is still busy streamlining the production after the onslaught of the tsunami and several episodes of vehicle recalls.

With an employee base of about 75,000 people across the globe, the company is present in 193 countries through over 6,000 dealerships and showrooms worldwide. For the first three quarters in 2011, Hyundai filed an 18.2% growth in revenues and 34.1% growth in net income as compared to the same period in 2010. In unit sales, Hyundai has managed to register a growth of 11.7%, selling 3,024,000 units worldwide as compared to 2,707,000 units sold during the same period last year. At a time when the industry is facing a situation of squeezing margins, Hyundai has been able to take its net profit ratio to 10.7% compared to 9.4% in 2010. Undeniably, the chaebol has done a commendable job of making its presence felt among the biggies across the globe, and is looking desperately for ways to make its image more upmarket globally. But is it really managing to do so?

After the launch of its new brand slogan ‘New Thinking. New Possibilities’ at the 2011 North American International Auto Show in Detroit in January, the company has declared a new focus area. “Our goal is not to become the biggest car company. Our goal is to become the most-loved car company and a trusted lifetime partner of our owners,” said Euisun Chung, Vice Chairman, Hyundai Motor Company, at the Detroit Motor Show. The company is planning to expand its production capacity from 3,620,000 units at the end of 2010 to 4,320,000 units by 2012. The company will be producing more units in its plants overseas (2,050,000 units) as compared to its production in Korea (1,820,000 units) at the end of 2011 for the first time in its history and is planning to bring in higher efficiencies in its manufacturing process. From a situation of having no integrated platforms at the end of 2002 out of the total 22 platforms (producing 28 models), the company is expecting to reduce the platform count to 6 and integrate all of them, resulting in the production of 40 models. With a view to bring its products at a faster pace to the market, Hyundai is planning to reduce the model development time to 24 months by 2013 from 40 months in 2002.
Posted by at
Labels: , , , , , , , , , ,

Monday, April 15, 2013

Exchange sector report

Few sectors have faced such extensive restructuring recently as the world’s stock exchanges. Many exchange platforms have seen a number of high-profile cross-border mergers being announced in recent months. In fact, many now question whether Western exchanges will be able to retain their global dominance.

Changing dynamics

As economic growth in the BRICS and other emerging economies continues to outshine the Western markets, anticipations that the next generation of mega exchange will emerge from the developing countries is growing stronger. As a matter of fact, many Western companies are now seeking to list in these markets, recognising the importance of accessing their growing capital bases. Further, as the axis of growth and market activity shifts South and East, the emerging markets are set to be the focus of the next wave of transformational change and deal-making within the exchange sector. However, Asia’s place in the future global exchange market may depend upon the liberalisation of regulatory systems, revision of ownership structures and transparency.

A fresh wave of m&as

Consolidation was the way out for many exchange houses during the financial crisis. But it proved to be a boon for new entrants. For instance, Chi-X and BATS Europe had together captured more than 20% market share in European share trading by the time of their merger announcement in February 2011. A similar trend emerged in the US, with BATS Global and Direct Edge having taken 21% of the US equity market by the end of 2010, moving up to number three and four in the market respectively. As a result, there has been a fresh wave of planned mergers. This includes the tie-up between NYSE Euronext and Deutsche Börse, along with the aborted merger between LSE and TMX.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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
Posted by at
Labels: , , , , , , , , , , , , ,

What we learnt from the visionary called Steve Jobs

Three well-known entrepreneurs of America Inc. write about their personal interactions with the late Steve Jobs, the visionary who deeply influenced their minds and helped shape their professional lives

Steve case, founder, aol As the head of AOL, he recalls working with Jobs and being touched by his passion for product: “When Steve returned to Apple, he called me and implored me to make the Mac a priority for AOL. At the time, the Mac share had shrunk to less than 5%, so our development focus had shifted to Windows. He was of course passionate about his vision and how he’d get Apple back on track. Most in the industry had given up on Apple but with Steve back you knew a recovery was possible. A few years later (early 2002), we met for lunch at a sushi restaurant in San Francisco, and brainstormed about digital music. We found a corner in the back so nobody would see us. We had just closed the AOL/TW merger and I was trying to push Warner Music into the future (and also leverage the AOL assets like Spinner, Winamp, etc). He was a year or so away from launching iPod/iTunes. I left the meeting knowing he was on to something insanely great.

More recently, I had dinner with Steve and a few others (Rupert Murdoch, Mark Zuckerberg, etc). He was clearly tired but he stayed longer than he intended. I think we all had the sense this might be snour last time together. Sadly, it was. He was the most innovative entrepreneur of our generation. His legacy will live on for the ages.”

marc benioff, founder and chief executive of salesforce.com Benioff, who was briefly an employee at Apple in 1984, lost touch with Jobs when he moved to Oracle. But more than a decade later, the executives reconnected, as Benioff began to build his new start-up, Salesforce.com. The enterprise executive, who calls Jobs a prophet, recalls one meeting in 2003: “We had a really incredible meeting in 2003. He laid down the law for me and said there were three things that Salesforce had to do to survive. We were a $25 million company at that time. He said we had to get 10 times larger in 24 months, we had to be able to close very large clients at scale, and we needed to build an application ecosystem. If I could do those three things, it could be an enduring company. It took a lot of decoding and a lot of thought, on my part, to figure out what he meant.” Based on Jobs’ advice, Benioff created an application marketplace that became “AppExchange.” During the project’s early days, it was internally called the “app store” and Salesforce even purchased the url “appstore.com.” It was only several years later that Benioff realised that his mentor had been pushing Salesforce in the same direction as he was leading his own company. And at the announcement for Apple’s App Store, Benioff made a gift of the website to Jobs, as a small token of gratitude. “Steve would say something so prophetic and so visionary, it would take a while to figure out what he said. Just a few seconds with him can change your life,” Benioff said. “He taught me you have to stay true to your vision over time, you have to stay with it and let it play out.”


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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
Posted by at
Labels: , , , , , , , , , , , ,

Saturday, April 13, 2013

“No news channel today, is purely a news channel.”

Ambika Soni, Union Cabinet Minister of Information & Broadcasting, talks to Anuradha Preetam about the need for self-regulation in the Indian Television Industry and how the government’s policies are helping people to fight corruption and seek greater empowerment.

B&E: Within this decade there has been a proliferation of 24x7 news channels. How is that affecting our lives today?
Ambika Soni (AS): In India, we have 800-odd channels at present. Half of them are news channels. The pressure is on broadcasters to stay ahead in the scramble for eyeballs. It is not always easy. The media has become very intrusive. It has entered our living rooms. But the fact is that it is having a huge impact on forming opinion, influencing mindsets, generally by setting agendas through repetitive news. So I think the responsibility is on the broadcaster to ensure that what is put out is thoroughly investigated.

B&E: How do you judge the content currently available on Indian television?
AS: There are systems in place and we are only trying to fine-tune the existing systems. There is an inter-ministerial committee, which takes a call whenever complaints come in. It either sends an advisory to the broadcaster or orders the programme to be taken off the air. In a worst case scenario, a channel’s uplink-downlink facilities could be terminated. Since there are no broadcasters in the panel, there is no question of favouritism.

B&E: But the public perception about the committee’s functioning is that it is not very effective. What is your take on this?
AS: Yes. There is a feeling, especially amongst elected representatives, that this system is not effective enough. But then, how would another committee work? After all, people in that committee would be human beings too. And there would still be protests each time an advisory is sent out, no matter the kind of committee that is put in place.

B&E: Regulation for broadcasters is quite talked about. And we hear that you support “self-regulation”. Your comments...
AS: The mandate to me from the PM is that we should impose self-regulation. I have always felt the same way, and the directive from the PM has made my task easier. In June 2011, we put in place a self-regulatory apparatus – the Broadcasting Content Complaints Council. It is a task force headed by the Information & Broadcasting secretary and includes broadcasters and representatives of cable operators along with government officials.

B&E: So you think “self-regulation” is the best way to keep some channels from going overboard?
AS: No news channel today is purely a news channel. It is news-based entertainment. There are some who air a thought-provoking documentary here or raise a social issue there. But then, they don’t get the TRPs. So I must try to help resolve the issue of TRP mechanism. Or the industry must do it. If the government does something, there is resentment. Either we all have to make our little contributions or it will take much longer. But I do appreciate the role of the broadcasters in self-regulation.

B&E: So how does your ministry fit in this whole business of “self-regulation”?
AS: We have a mechanism in the ministry and we are not dismantling it. We are covering 800 channels. The ministry has put in place a 24X7 recording centre. It records at random 300 channels round the clock. We keep the tapes for two weeks. I want to give it a try for 6-8 months. Let’s see how it works. The complaints have decreased since last year. We have also formed a nodal agency that at time of a crisis, man-made or natural, springs into action instantly. We have made arrangements from our PIB room to link up with every district HQ so that if the Home Minister or any other minister speaks from here, it is a direct telecast to every district.


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

Friday, April 12, 2013

They call it The Kangaroo Trick

Despite The Recent Devastating Floods, Australia’s Expansion is forecasted to Strengthen over The Next two years. In fact, The Country hasn’t seen a Recession since 1990. So, what makes Australia a Recession-free zone?

Only a dozen economies are bigger than Australia (in 2010 its GDP stood at $1.235 trillion; IMF data), and only six nations are richer than it in the world (it has a per capita GDP of $55,590, higher than that of countries like UK, Germany, Japan, US, et al). The country was ranked 2nd in the United Nations 2010 Human Development Index and 4th in Legatum’s 2010 Prosperity Index. And above all, while most of its counterparts have faced the fury of a financial tornado in the recent past, it’s the one that has avoided a recession since 1991. Well, that’s Australia for you today!

But then, the situation wasn’t always the same “Down Under”. Just 25 years ago the Australian economy was grappling with issues like high interest rates (during the ‘80s the minimum lending rate had reached 17%), negative growth (-1.6% in 1983), big budget deficits, et al, coupled with highly regulated financial system (read: protectionism). In fact, in 1985, Paul John Keating, the then Australian Treasurer (he was also the 24th Prime Minister of Australia, serving from 1991 to 1996) had declared if the country failed to reform it would become a banana republic. No doubt, barely five years later, the economy faced a nasty recession, but then, it was the last for this OECD nation. Since then Australia has grown at an average annual rate of 3.6%, well above the OECD average of 2.5%. What’s more? Despite the recent devastating floods, which has forced the Australian economy to contract 1.2% in Q1 2011 (it’s the sharpest fall in real GDP since the recession in 1991) Australia’s expansion is forecast to strengthen over the next two years. In fact, Moody’s Analytics maintains its full-year 2011 GDP growth forecast at 3.4% for Australia.

Many attribute Australia’s success to its opulence in minerals, which thriving Asian nations are hungry for. But then, the economy was standing tall and smiling wide when a financial crisis struck Asia in July 1997. Further, commodity exports have not always been in vogue. It was only in 2003 when minerals begin to garner big bucks for Australia (see chart), but by then the economy had escaped both the Asian crisis as well as the financial cyclone that hit America in 2001. In 2007 came the global financial crisis, but that too failed to drag down the Australian economy. So, what is it that makes Australia a recession-free zone?

No doubt, to some extent, the country has been benefiting from a resources bonanza that brings it big money for doing nothing but extracting minerals and shipping them to Asia (and will continue to do so for a while as Asia’s appetite for minerals shows no signs of slowing), but then that’s surely not the thing that can be credited for the country’s economic success. Rather, it’s the series of well-thought reforms carried over a period of 20 years (between 1983 and 2003) that has made Australia one of the most prosperous and resilient economies in the world today.


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

Monday, April 08, 2013

Inbox : This Fortnight

INTERNATIONAL
BUSINESS, ECONOMY & FINANCE
Meg in, leo out!

When Leo Apotheker was named CEO of HP in October last year, there were doubts about whether a the former CEO of a software company (SAP) would ever be able to handle a mix of hardware and software at the world’s largest IT company (in terms of topline) as the CEO. After analysing the situation and his competencies, B&E did a story titled, “Wrong person. Wrong place” (issue dated November 11, 2010), in which we concluded that “The new CEO is a software guy and has prior experience only in enterprise sales – A clear mismatch with the current philosophy of HP – the largest IT company in the world”. When he announced his decision to sell off HP’s hardware division and buy out Autonomy for $11.69 billion in the last week of August 2011, we ran a follow-up story titled, “Is Apotheker destroying HP?” (issue dated September 15, 2011). This was our claim: “Apotheker, had little clue about what could potentially be done with a PC-plus-services portfolio. Post sell-off of the PSG unit, the company stands to lose $400.74 billion in expected revenue earnings over the next 20 years (arrived at using a binomial regression forecast model; R2=0.99; Eqn: y = -37.75x2 - 1395x + 42154).” The expected followed. Apotheker was booted out of the company. HP’s Board confirmed this publicly on September 22, 2011.

First question: Did he really deserve the bullet so soon? Actually, Apotheker has done enough in 9 months than what humans are usually capable of. Under him, HP’s m-cap shrunk to $47.52 billion – a fall of 51.52% since he took over!

Interestingly, the very moment the Board announced Apotheker’s exit, they pulled out another “typically-HP Board” trick. Former CEO of eBay Meg Whitman, with no prior experience in the field of hardware, was handed over the crown.

This brings us to the second question: Is a lady, who in the past four years was known only for two less-than-glorious acts – she resigned as eBay’s CEO in 2007 and then unsuccessfully ran for the office of the Governor of California (after spending $322.5 million in election campaigns) – fit to become the CEO of the world’s largest IT firm? Apparently, she is a fast learner. And what HP needs right now is someone with a vision. Remember, it was her vision that made eBay buy Skype for an inflated $4.1 billion in cash in 2005 (and which was later sold at $2.75 billion in 2009). But at least a move like this will keep HP’s hardware and software units going for some years! Apotheker destroyed more than 51% of HP’s m-cap in less than a year. How long will Whitman take to wipe out the rest? Difficult to say. But, if she manages to convince the HP Board to eat its own words and retain the hardware and mobility units (with webOS), she would have scored a one on ten to begin with in our books.


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

Posted by at
Labels: , , , , , , , , ,

Tuesday, April 02, 2013

Is Corporate Culture The Ultimate Strategic Asset?

Some Companies Believe Strongly in their culture – they swear by it. And while many have brushed aside this concept of culture as just another soft factor, the truth remains – corporate culture can become the very reason why your company performs well at the stock market and why it creates bottomlines which are far superior than those of industry peers.

During the past few decades, the term “corporate culture” has become widely used in business. It is now well-recognised that corporate culture is a significant aspect of organisational health and performance [Read: Siehl, C. and Martin, J. “Organizational Culture: A Key to Financial Performance?; Kotter, J. and Heskitt, J (1992), Corporate Culture and Performance, New York, NY: The Free Press].

what is “corporate culture”?
Although there are many different definitions of the concept of “Corporate Culture,” the central notion is that culture relates to core organisational values. All organisations – regardless of size – have cultures which influence the way people behave in a variety of areas, such as treatment of customers, standards of performance, innovation, et al.

“strong” and “weak” cultures
Companies where there is a clearly-defined culture, where the company invests time in communicating and reinforcing this culture, and where all employees are behaving in ways consistent with this culture are defined as having “strong cultures.” A “strong” culture is one that people clearly understand and can articulate. A “weak” culture is one that employees have difficulty defining, understanding, or explaining. The culture may not have been defined and/or it is not being actively “managed.” As a result, employees are let to interpret the company’s values for themselves, which sometimes results in the company having not one, but many different cultures.

functional and dysfunctional cultures are assets or liabilities
Strong culture companies can be either positive (an asset) or negative (a liability). If the company’s values are constructive and support its goals, then having a strong culture is an asset. We define this as a “functional” culture. If the company’s values are negative or dysfunctional, then having a strong culture will be a liability. We define this as a “dysfunctional culture.”
 
impact of culture on financial performance: wal-mart vs. k-mart
Culture can impact financial performance, so that a culture can truly be an “asset” in the technical accounting sense of “things of value-owned or controlled.” To see this, compare the performance of Wal-Mart with its (at least on the surface) “identical” competitor K-Mart. There is virtually no product that Wal-Mart has that K-Mart does not have; have the same kinds of stores and they operate in similar locations. They market to the same customers and recruit from the same pool of people. Yet in spite of these similarities, one of them (Wal-Mart) has produced a vastly different financial result for investors than the other.


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
Posted by at
Labels: , , , , , , , , ,
Subscribe to: Posts (Atom)