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Tuesday, May 07, 2013

The saffron leadership finds itself busy dousing in-house fires

At a time when it should ideally have been gunning for the UPA government’s head for its failures, the saffron leadership finds itself busy dousing in-house fires. With just over a year left for the big elections, the BJP leadership looks surprisingly bent on giving the Congress another term on a platter.

Voices of dissent from senior party leaders like Yashwant Sinha, Ram Jethmalani and Shatrughan Sinha have added to BJP’s woes. At the forefront of the campaign to oust Gadkari from the president’s post, Jethmalani today stands suspended from the BJP for indiscipline. When Jethmalani, a former senior Supreme Court lawyer, entered the Rajya Sabha in June 2010 as a BJP candidate, it was said that he was being rewarded for taking up the case relating to former Gujarat home minister Amit Shah’s bail. Contrary to the party’s claims of morality, the party’s decision to show Jethmalani the door shows its reluctance in taking a moral stand. “The BJP is clearly not as strong a party as it was, say, 10-15 years ago. This is what has probably kept the BJP leadership from taking any decisive stand on the allegations against the party president and also take a clear position on corruption,” says political observer Suvrokamal Dutta. He believes that if Gadkari had decided to step down on moral grounds, it would have led to a huge gain of credibility among the masses for the BJP. However, in the absence of any such move, BJP is in no position to level any corruption charges at the Congress. Insiders tell B&E that action against the party president has been deferred in view of the elections in Gujarat and that once the results are announced early next month, there is a possibility that Gadkari could face the music. However, other than the central leadership that is reeling under charges of impropriety, there are several BJP-led states that have also been accused of corruption charges. Karnataka, Madhya Pradesh and Chattisgarh are the biggest examples where the BJP leadership has failed to act or take a clear stand on corruption. And the weaknesses of the opposition party have definitely emboldened the Congress. “The BJP is the only political party in the country with two sitting national presidents accused of corruption. But in this too, the BJP’s double standards were exposed. Bangaru Laxman, who was from the tribal community, was immediately removed and side-lined. But the same party, along with the RSS, stood like an impenetrable shield when Nitin Gadkari’s corruption was uncovered,” says Madhya Pradesh Congress leader Ajay Singh, adding that the BJP’s double standards on dealing with its corrupt politicians are in the open for all to see.

Despite all its promises, the BJP has also been unable to reach the masses to campaign against corruption under the Congress leadership. Since it was caught napping on occasions such as the CWG scam, Coalgate and several others, BJP has wasted some wonderful opportunities to gain political mileage. And with the current state of affairs, it looks destined to waste quite a few more in the coming months. Consequently, a party that looked headed for victory as the other logical alternative to lead India a few months ago may be really headed towards returning the privilege to UPA yet again.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

BBA Management Education

Friday, May 03, 2013

“It’s like killing two birds with one stone”

Dr. Partho Mishra, VP & GM, Service Provider Access Business Unit, Cisco India, discusses how Cisco leverages the benefits of dual-use technologies

B&E: How relevant is reverse innovation for India at large and for Cisco’s R&D operations here in particular?
Dr. Partho Mishra (PM): The potential for engineering and technology in India is immense in the last 10 years, and the analogy I can give is this. In the 1960s, Japanese manufacturers had these el cheapo cars. In the 1970s, they started developing small but best in breed cars. By the end of the 1980s, the Japanese were dominating the US market with models like Lexus and Infiniti. Reverse innovation is a part; there is a huge opportunity for India out there in terms of IT, telecom, computing. If you look at our capabilities, there is capital available to fund the development, and all the information required to develop a product is readily available, as compared to 20 years ago. We should capitalise on all that. At Cisco, reverse innovation is only a part of our agenda, which is to solve problems specific to emerging markets, because we believe that as the GDPs of these countries grow, we will benefit. For instance, look at the Smart Connected Communities idea. If we can build on that, and make people cross a certain threshold, it opens up new possibilities, like being able to provide services on that infrastructure like telemedicine, remote education, et al. If you can replace poor physical infrastructure with great virtual infrastructure on top of that, you can enable things.

B&E: How do you qualify a reverse innovation opportunity?
PM: Even if there is no opex/funding constraint, the reality of the situation is that we have more work to be done than there are people. When we have situations where we are able to have du-al-use technologies (which we are designing for emerging markets, but can sell to other markets), we can kill two birds with one stone. There lies the engineering challenge – how can you design a product that can scale up and down? It’s something like what car manufacturers have started doing in the last 10 years. They build a common chassis and skins change. We approach it in a very similar way. Like for the ASR 901, we have different SKUs, but we took the various scale, features and power consumption requirements into account when we were developing this product.

B&E: You are optimistic on India’s R&D potential. Are there critical need gaps that need to be filled?
PM: Intellectual capital and seed capital is available, and so are global commercialisation opportunities. But we need technology leaders who will say, “Five years down the road,that’s what’s coming, and that’s what we should be building.” In India, we still have a services mentality. Let me go and develop x software and y hardware. It is so incremental and risk averse. If I were to dedicate 500 engineers to doing this, I am going to get a very predictable ROI. The other thing is that if you go to the core of any start up in Silicon Valley, you may have 100-200 engineers. In addition, they also have 3-4 system architects. They are the brains, who know everything about how everything works together there. There are too many of them at Silicon Valley. In fact, if you walk into a Star-bucks, you’ll find such people there. That’s a critical piece missing in India, but it is fast coming up.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

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

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

Tuesday, April 02, 2013

B&E Indicators

Heading for growth
The year 2010 saw the Indian capital market bouncing back. During the year, 40 new companies were listed on the exchange (both NSE & BSE) at a consolidated value of Rs.330.68 billion, as against 39 companies with a reported value of Rs.246.96 billion in 2009. However, the amount of capital mobilised through private placement plunged massively, from Rs.2,126.35 billion in 2009 to Rs.1,474 billion in 2010.

Getting bigger and better
In fact, price appreciation is clearly reflected in the market capitalisation (of BSE) to GDP ratio and the traded value (of BSE and NSE together) to GDP ratio, which increased from 55.4% and 69.1% in 2009 to 100% and 89.5% respectively in 2010. Further, resources mobilised through capital markets also witnessed a significant jump, from Rs.162.20 billion in 2009 to Rs.575.55 billion during 2010.

Read more....

Tuesday, March 26, 2013

Will they be Good at Crossing ‘Tablets’?

A number of low cost Giants are Preparing to launch tablets in India, Motivated by the way The Mobile Phone landscape changed in The Country. Is an Encore as Certain as expected

First there were desktops. Then there were laptops. Then there came mobiles. Indeed these devices made life simpler. But then, as smart phones, netbooks, media PCs, smartbooks, mobile internet devices and now tablets have come into the picture, life is not necessarily easier, neither for companies nor customers. For innovator companies like Apple, which rejuvenated the tablet segment in the first place, the challenge is to be able to milk innovation fast enough before competitors bring in substitutes and disrupt their pricing structure. Within a short span of launch of the iPad, competitors like HP, Blackberry, Dell, Samsung, HTC and Asus came into the fray.

Simultaneously, there are a host of Asian players who are looking to grab the opportunities in this new gold mine, and India will be very firm on their radar. After all, a precedent was set for them when Nokia suffered deep cuts in its market share from 60% in 2008 to around 31.5% by the quarter ending September 2010, thanks to players like Micromax, Lava & G’Five, who enhanced the value proposition by many times.

Now these players are set to enter the emerging tablet PC market in India with a price tag less than Rs.15,000. Delhi-based Lava Mobiles is on the verge of introducing its affordable tablet PC by September this year, which will be priced between Rs.15,000 and Rs.20,000. Micromax has plans to launch a tablet somewhere in July. Though initially these tablets might sound a bit expensive, prices will most likely fall. According to report released by the Boston Consulting Group titled ‘Swimming against the tide’, competition will drive down prices of affordable tablet PCs to Rs.9,000 by 2013. This is reaffirmed by S. N. Rai, Director and Co-founder, Lava Mobiles, as he exclaims, “Once our range of Tablet PCs is launched, we will keep working on the innovation side and therefore expect that the price will come down further to sub Rs.10,000 levels.” Zen, Olive, G’Five, Acer and Fly are expected to make their launches soon. But will customers, who pay for sub-Rs.5000 mobiles, show the same response to sub-Rs.15,000 tablets from these companies? According to Arshit Pathak, MD, G’Five, “Tablets from Apple and BlackBerry will be an add on for people who already own a laptop and/or a smartphone, but our product will be an independent device and will target people who don’t have any computing system.” They will look at students, SMEs & young professionals who wish to remain connected, have a better multimedia experience and don’t wish to spend on a notebook or a smart phone.

When the phenomenon called the Apple iPad took over the computing world last year in March, the immediate result was a fall in netbook shipments. In the nine months ending December 31, 2010, Apple sold 15 million iPads globally. Gartner estimates worldwide media tablet sales to touch 54.8 million units in 2011, up 181% from 2010, and surpass 208 million units in 2014. In fact, a recent study conducted by Accenture titled ‘Finding growth: Emergence of a new Consumer Technology Paradigm’ states that “while the growth rate of computers is expected to decline, the growth rate of tablet PCs is expected to be up by 160% in 2011”.

Read more....

Little Ventured Means Little Gained

After Resisting The Global Financial Crisis almost Unhurt, expectations are high from The Indian Banking Sector to help India achieve a Double Digit growth rate. But with The Industry still struggling to achieve a Good Penetration rate, The Question remains, Can it live up to The Mark?

Banking is understood in common parlance as a field that begins and ends with numbers. To begin with, we take a look at a few startling facts about the Indian banking sector:

Total assets of the Indian banking industry jumped by more than five times to $1.25 trillion in the last decade from $250 billion in 2001.

Total business of Indian banks has grown over threefold from $516.7 billion in 2004 to $1.72 trillion in 2010.

Total income of all scheduled commercial banks of India has risen from Rs.1.51 trillion in 2001 to Rs.4.94 trillion in 2010.

The BSE Bankex has climbed by 970% up since the beginning of 2002 as compared to 445% by the benchmark BSE Sensex.

A commendable performance indeed. But the question remains, more so for the fact that the country aims to remain as one of the fastest growing economies in the world, has the growth been satisfactory? The answer, considering that out of the 600,000 habitations in the country, only 5% have a commercial bank branch and just 40% of the total population across the country has bank accounts, is a certain no. And this, in essence, means that the development of the country’s banking sector needs to be taken forward in a much bigger way to serve the larger needs of financial inclusion through expansion of banking services. But are the banks in the country prepared to take up the challenge?

Considering the journey of the industry from the pre-liberalisation decade, Indian banks have come a long way from virtual nobodies to creating one of the strongest banking industries in the world, which managed to weather the last global recession almost unhurt. Factually, cumulative capital and reserves of banks in India that stood at $95 million, $4.1 million and $4.5 million for public sector, private sector and foreign banks respectively in 1980, now stand at $53.5 billion, $26.6 billion and $15.3 billion respectively. However, during most of these 30 years, the growth story was driven by various factors; from industrial funding to infrastructure funding. But the last decade has seen Indian banks really banking on retail banking to boost their bottomlines.

In fact, banks, in both the public and private sector, have moved beyond the traditional boundaries of what can be called plain vanilla banking, and have started exploring other lucrative areas like wealth management, private banking, credit cards, investment advisory services et al. Moreover, considering the initiatives, the cumulative profit of Indian banks is expected to double to over $40 billion in 2015; adding muscle to the sector to expand into the hinterlands. Interestingly, a majority of this growth is expected to come from the retail banking segment. But then, why is retail banking drawing so much of attention now?

As reports suggest, with a saving rate of 32.4% of their income, Indian households are among the biggest savers in the world. And the irony is that 53% of these households are still without any banking assistance. While this is a problem from the country’s perspective, it’s a golden opportunity for bankers. And no bank operating in the country wants to miss on it. So currently, every bank is busy in boosting their retail banking operations. But it’s not a trend very peculiar to India; the global trend is also moving in favour of retail banking. As Andy Mcguire, Senior Partner and Managing Director (London Office), The Boston Consulting Group (BCG) reiterates, “The retail banking industry was battered by the global financial crisis. But in many markets, its resilience has helped to enable a turning of the tide that began in 2009 and continued into 2010. Overall, retail banking is on track to resume its stature as a reliable and profitable backbone for universal banking.”

Read more.....

Wednesday, March 06, 2013

“Russia must accept we are an independent country!”

In an exclusive conversation with Akram Hoque and sayan ghosh, H.E. Miloslav Stasek, the Czech Republican Ambassador to India, shares his views on EU, NATO and US and throws light on Czech’s post-USSR relations with Russia.

B&E: Czech Republic is one of the most recent countries to establish itself on the world map. What is your vision for the nation?
Miloslav Stasek (MS): We separated from the Slovak Republic on January 01, 1993. But we were an independent country from as early as October 28, 1918 and were known as Czechoslovakia. We are a young democracy and our vision for the nation is in line with democratic values and principles. We passed through the socialism era and at the same time became the member of NATO and EU. Our economy is mainly exports based and we aim to strengthen the auto industry by ramping up production. With a population of 10.2 million, we produce 1.5 million cars which shows our economic progress and stability.

B&E: What is the status of your relations with Slovakia?
MS: I must say that our separation with Slovakia was not an overnight affair. We are still very close. And it is not only due to our history but also due to common language. Our relation is a good example because after the separation, we divided this huge compound into two pieces. We still have a common house called the House of Czech and Slovak Republics.

B&E: Czech Republic and Slovakia together have 2000 soldiers in Iraq. Do you find the US war in Afghanistan and Iraq justified?
MS: We have decreased the number of soldiers in Iraq. Now we are in Afghanistan and the Balkan region. Those missions were under the umbrella of NATO. As a member of NATO, it was our duty to support the mission and provide necessary logistics. In Afghanistan, it is not only about military operations. We are also involved in civil programmes, NGOs and building infrastructure. The restoration process is peaceful in Iraq. Most of the areas are now under control.

Read more.....

Monday, March 04, 2013

MIXED SIGNALS

Mamata Banerjee is drawing flak for neglecting the ministry, but as a response to an RTI query from TSI (a Planman Media publication) shows, the railway minister isn't doing as badly as her immediate predecessors. A report by Vikas Kumar

If despair often blurs reality, chaos completely engulfs it. With the Indian Railways being rocked by another tragic mishap, the second in West Bengal in two months, that is exactly what supporters of mercurial Trinamool Congress leader and Railway Minister Mamata Banerjee, must be thinking. The feisty lady is being pilloried – and not entirely unjustifiably – by her political rivals for neglecting her ministerial work and focusing her energies on Bengal politics even as the railways under her charge lurches from one devastating wreck to another.

But the question is: is the 63,000-km stretch of the railways and the musty corridors of Rail Bhavan any worse off under her than they were under her predecessors of the past two decades?

The fact is that Mamata is running for cover. The Railway Ministry, which was adjudged the best performing ministry during the tenure of Lalu Prasad Yadav, has suddenly started hogging the limelight for all the wrong reasons. But what may be apparent is not always true. Going by cold statistics, Mamata certainly isn't the worst Railway Minister of the last two decades.

Data available with the Commissioner of Railway Safety for the period 1991 to 2010-11 shows that she has fared much better than her predecessors. During the tenure of CK Jaffer Sharief, who served as Railway Minister from July 21, 1991 to November 22, 1995, Indian Railways saw more than 500 accidents every year. The number of accidents in 1993-94 was 587, resulting in a death toll of 226. In the year prior to that, when two railway ministers, George Fernandes and Janeshwar Mishra, held the post, the number of mishaps was 532 and the death toll crossed 200.

Nitish Kumar, the current Bihar Chief Minister who loses no opportunity to take swipes at Mamata Banerjee for running the railways from Kolkata, seems to suffer from selective amnesia. During his tenure of almost a year, the number of fatalities was 374, which is the second highest during a single-year tenure of any railway minister. Similarly, with 302 fatalities, Lalu Prasad's record as railway minister is only marginally better. Mamata is fifth on the list of worst performers in terms of rail mishaps. When it comes to misusing the railways, Mamata's record is once again far better than that of her immediate predecessors. The Railway Ministry, in a response to an RTI query filed by TSI, gave out data of railway passes issued by respective railway ministers. This makes interesting reading and reflects the differing approaches of the ministers.

As far as free distribution of railway passes is concerned, Ram Vilas Paswan was generosity personified. During his one-and-a-half-year tenure from June 1, 1996 to December 29, 1997, he issued 597 complimentary rail passes. Of these, 445 were issued in the last year of his term.

Read more....

Friday, February 08, 2013

Houston, we have a problem... Portugal!

Though EU & IMF have agreed on an audacious $956 billion bailout plan for the Euro zone to control the sovereign debt crisis that started with Greece, it won’t be of much help. B&E talks to experts across continents, including the European Central Bank to analyse who all are next in the felicitation parade by Manish K Pandey

Almost a month ago when ash clouds from Iceland’s volcano Eyjafjallaj-kull were showing their prowess by bringing almost all European airports to halt, not many knew about the danger that was about to engulf Greece and had the capability of bringing some of the biggest euro zone economies to a standstill. Then it came and even Greek gods could not save their beleaguered nation from its fury. Result: The $333.53 billion economy (2009 estimate) has today almost but collapsed. While Standard & Poor’s has already rated Greek bonds as junk (first time a euro member has lost its investment grade since 1999), its fiscal deficit is hovering around 14% of GDP.

As Greece now moves closer to a sovereign default, several economists believe that the turmoil would not end here, and would continue to take some more in its wake. Taking into account the deteriorating financial strength of the banking systems in nations like Ireland, UK, Spain, Italy, et al, any or all of them could be the usual suspects. But leading the identification parade is Portugal, a country could well be the talk of the town very soon with respect to a domino collapse. Robert Thomas, Senior Vice President, Moody’s Investor Service, based out of UK, shares with B&E, “Despite many fundamental differences to Greece, Portugal is now at the forefront of investor concern if the risk of contagion continues.”

The signals sent by Portugal are almost similar to the ones propelled by Greece just before the financial volcano erupted there. Like its distressed Euro-partner, Portugal too has a fragile public finance. Its budget deficit is already around 9.4%, which is an astonishing 6% higher than the standards set by EU. Further, Portugal’s foreign liabilities are close to 108% of its GDP ($225.35 billion), much higher when compared with Greece whose foreign liabilities stand at 87% of GDP ($264.82 billion). Truly, Spain too has foreign liabilities that are equivalent to 91% of it GDP ($1.20 trillion), but unlike Spain, Portugal has been suffering from a bigger problem of very slow growth rates over the last decade. CMA DataVision, a UK-based research firm that tracks the riskiness of sovereign debt, rates Portugal’s performance during Q1 2010 to be the worst in the developed world. As per it, the spread between the starting price of swaps in January 2010 and the end price in March 2010 has widened to 52.3%. So, while last year Portugal’s GDP declined by 0.1%, this year it is forecast to slow down even further, by 3.3%. And the only solution that Portugal has if it wants to stick to the lifeline is to borrow from foreign investors. But, that’s exactly where the problem lies. If interest rates stay high, this dormant volcano can erupt any time to engulf the Portuguese economy. Not to forget, investors are already demanding an interest rate of 6% on Portuguese bonds.

Read more.....

Wednesday, February 06, 2013

Ram V. Shahi, Former Power Secretary, Government of India, shares the dynamics between power and coal

Ram V. Shahi, post his tenure as Power Secretary, has been associated with various organizations as head of their energy advisory boards. In an exclusive interview with B&E, he shares the interdependence of the coal and power sectors in India

B&E: How will the cess of Rs. 50 per tonne levied on coal affect power tariffs in the short to medium term?
RVS: The cess of Rs.50 per tonne on coal will have an effect on the cost of power generated in coal based power stations in the range of 3 paise to 4 paise per KWhr. Its effect at the level of consumer tariff, however, will be of the order of 5 to 6 paise per KWhr in view of transmission and distribution loses. This cess, which will lead to revenue, on a national basis, of the order of Rs.30 billion per year, will go towards encouraging Green Energy. In this very budget, Service Tax on Transmission has been abolished. Therefore, positive impact of abolition of Service Tax would be about 5 paise per unit if we consider inter-regional transmission of power. Thus, additional burden on account of coal cess is more or less offset by the concession in Service Tax.

B&E: How will the move to allow open auctions for coal mining blocks affect fuel availability for power plants and what will be the effects on consumers?
RVS: The proposed initiative for coal mine development by allotting coal blocks on the basis of competitive bidding is a positive one. However, the criterion for evaluating bids should be the cost of producing coal rather than any premium that the mine developer may be asked to offer to the Government. Development of coal blocks through the process of competitive bidding should be on the same basis as the Scheme of Ultra Mega Power Projects. The objective should be low cost power by way of competitive bids for coal as well as power projects. Obviously, consumers will benefit from less expensive power supply.

B&E: If the pending Bill on Coal reforms which will allow private players to mine coal for non-captive usage is passed, will it bring about much needed power shortages under control?
RVS: While the power sector reform has moved forward, commencing from the historic legislation Electricity Act 2003, followed by several other policy initiatives, coal sector reform process has remained stagnant at the point when the Bill on coal was introduced in Parliament in 2001. Therefore, the present legislative initiative is a welcome move of the Ministry of Coal. The power industry is heavily dependent on coal just as coal industry has the largest consumers in the power sector, to the extent of 75% of its production. The present mismatches in reform initiatives are causing avoidable adverse impact not only on power sector but on economy as a whole. Therefore, coal sector reforms have to catch up fast with the actions that have happened, and will happen more rapidly, in the power sector.

Read more.....

Monday, February 04, 2013

Rick swings, GM misses

...and the shareholders get their pants walloped!

Rick Wagoner during his 8-year term as the CEO & Chairman of GM has oft been described by industry experts as a leader who lacked the “ruthless streak” needed to make the tough decisions... Well, allow us to be crude. Many do claim that he tried his best to revive the lost glory of the wounded auto-maker. Sadly, his best wasn’t enough, and today, his successor, Fritz Henderson, is fighting hard to present a viability plan before the Senate, by June 1, 2009. There is no denying that GM has proved to be Detroit’s biggest blunder in these recessionary times, and all because Wagoner behaved like the wicked kid who skipped classes at Harvard (by the way, he’s an HBS Alumni) and played baseball, trying to hit home runs every ball; but he failed [And guess what, many are blaming the recession for GM’s miserable state]. So here are the bull-headed swings that failed to deliver the so-called homies and which make up for one of the biggest business blunders in the past 100 years.

Swing & Miss #1: Being the CEO of a First World brand, his ‘American legacy’ ego prevented him from shifting units to emerging nations. Swing & Miss #2: Axing of the EV1 electric car project in 2003, which Wagoner admitted was one of his “greatest blunders.” The product, which was the world’s first electric car, could well have become the future of GM. But then again, isn’t GM all about brawns and hefty Hummers? What Wagoner forgot was that fuel-efficiency is something that leaders like Toyota and Honda have focussed on besides offering powerful engines... [Rick, you skipped your market segmentation lessons too?]

Swing & Miss #3: GM’s premature focus on hybrids cost the company too much. Despite being in the news for over 15 years now, hybrids only contribute to about 2.15% of all vehicle sales! Then there are reports which prove how by 2020, oil production will cross a smashing 1,600 million barrels annually – 6667% more than what was produced in 2003! In other words, hybrids are not required in the near future year, but Wagoner still believes it, for he has to swing!

Read more.....

Friday, January 25, 2013

Heavy weight champ

Telang’s background in operations and his experience with the successful Commercial Vehicles business will be an asset

As Jack Welch once said, “If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don’t have to manage them.” Ratan Tata has done exactly the same in Tata Motors, which is one of the key reasons why the company is the market leader in the Commercial Vehicles segment and more importantly, produces almost half of the Commercial Vehicles sold in the country. Well, P. M. Telang, Executive Director (Commercial Vehicles), Tata Motors would have a lot to do with that, for he is the man standing behind this success.

A Mechanical Engineer and an MBA from IIM-Ahemdabad, Telang has over three decades of experience in the automotive industry as he has been with Tata Motors since 1972. In his previous role as President (Light & Small Commercial Vehicles), Telang played a major role in ensuring a turnaround in the company through cost cutting and e-procurement. He is also serving as Senior VP (Operations), Pune currently. Overshadowing the success that the company achieved under Ravi Kant’s leadership will certainly not be a cake walk for anyone succeeding him. However, if we talk about the Commercial Vehicle segment of Tata Motors, Telang has been able to take its growth story forward very efficiently. And industry insiders believe that if Telang takes charge; it will surely set the stage for the next phase of growth for Tata Motors. And as auto expert Murad Ali Baig asserts, “The person taking charge of Tata Motors after Ravi Kant leaves should have an in-depth knowledge of the automotive industry apart from the basics of management and finance.”

Read more....

Tuesday, January 22, 2013

Smaller States can be Bigger problems

I was waiting for a flight the other day at Mumbai airport and watching a news channel. There was a Russian woman with her face covered who was on screen, plaintively saying how she was raped by an influential politician of Goa and how the cops there were doing everything possible to hush up the case. Then I recalled frequent stories of how Goa has now been completely hijacked by criminals, mafia and politicians who think committing a crime and getting away with it is their birthright. That story was followed by a report on widespread agitations in Andhra Pradesh for a separate state called Telengana. And then I thought about the long standing demand for smaller states in many regions. I thought of Gorkhaland to be carved out of West Bengal, of Harit Pradesh in Western U.P., of Vidharbha in Maharashtra, of Koshal in Orissa and many more.

In each case, citizens demanding a separate state have a seemingly fool proof logic: their needs and concerns are not addressed by existing state governments and only a ‘state’ of their own can lead to better development and delivery of developmental benefits. The logic is that there wouldn’t be so many farmer suicides in Vidharbha if it becomes a separate state; or that sugar cane farmers in Harit Pradesh would get a better deal than what they are currently getting from Lucknow. On the face of it, the logic appears impeccable. But will this work in reality? Will smaller states genuinely lead to better welfare outcomes for citizens; for better governance and stronger democracy?

I look at the examples of Jharkhand and Goa and shudder at what might happen in reality. You and I already know about how Goa is rapidly descending towards hell; it became a state back in 1986. Then, in 2000, three states called Chattisgarh, Uttarakhand and Jharkhand were created. Almost 10 years down the road, can anyone say with even an iota of confidence that freeing Jharkhand from the clutches of Bihar has led to more prosperity for citizens? In fact, exactly the opposite seems to have happened. Chronic political instability and relentless Maoist violence have become the signature themes of the state. It is a unique state where an independent MLA became Chief Minister.

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Wednesday, January 16, 2013

The Blue Bull goes on the rampage in the fields of Uttar Pradesh

As the Blue Bull goes on the rampage in the fields of Uttar Pradesh, the state government wants a return to the days of bounty hunting

The current law on hunting in India states that anyone can kill a Nilgai if – a) He or she has a valid licensed gun b) Has the requisite permission from the government, and c) Hands over the carcass to the forest department. However, indiscriminate hunting of the as-of-now healthy numbers of Nilgai seems like a bad idea. In the absence of a proper machinery to monitor their numbers, such a move is likely to drastically bring their numbers.

A similar story is unfolding 13,554 kms away in the US state of Idaho. The mostly mountainous state is home to the Gray Wolf, where hunting the animal is set to begin. Hunters are bracing for a field day with loaded guns to go after the once-endangered animal and it is believed that the move could leave the state with as many as 220 wolves dead. Ironically, Idaho’s state motto is Esto Perpetua, which in Latin translates as “Let it be forever”.

Coming back to the Nilgai ‘menace’, Belinda Wright, a well known conservationist says, “Sympathy towards the farmers is understandable, for the loss of crops is a loss to their livelihood. If hunting of one species is allowed, it could open up the possibility of hunting other species in the future. It’s best not to touch hunting laws at this point. Instead, other options should be considered to address the issues of the farmers.

Perhaps it is one of those situations where it is difficult to make a choice in favour of either man or beast, but certainly there is need, now more than ever, to look for a more meaningful alternative like the one being worked out where castrating the male bull could at least curtail the problem… for in allowing hunting we are only curing the symptoms and not the disease...

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

For More IIPM Info, Visit below mentioned IIPM articles.

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Friday, January 11, 2013

“We started with fewer products”

B&E: You have the highest retail presence and often in the same market you have more than one store. Doesn’t it end up in cannibalizing the sales of your products?

SS: No, I don’t think so, we have huge portfolio to offer and we design two stores in the same locality in different ways. Say for instance, in one store the first floor has lifestyle products and second floor, sports goods. In the second store, the first floor has women’s apparel and the second floor, men’s; It might sound very simplistic, but this is indeed the strategy that helped us to run our stores in same locality, phenomenally.

B&E: What understanding of the Indian market did you have when you entered and what strategies did you adopt at the initial stage?

AJ: When we entered, we saw that the sports market in India, unlike any other country was largely male dominated and so we thought that it’s not suggestible to launch our entire portfolio. We launched only those products which pertained to the choice of the male customer and we also kept our offerings limited only to cricket and athletics.

B&E: Tell us more about your future plans in the Indian market?

AJ: We have entered the kids apparel segment and we would be entering into several other segments also, but not compromising with the brand equity of Reebok. Our vision is to establish Reebok as a most loved fashion and sports brand in India and we would be offering whatever a consumer requires to dress up for all possible occasions.

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

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.