IIPM ARTICLE AND EDITORIAL: January 2013

Tuesday, January 22, 2013

Where's the money Mr. Ambani ?

Reliance Infrastructure's grand plans to expand massively seem to have forgotten a simple factor... Funding! Is this what was the nature of the beast? B&E's Ratan Lal Bhagat deeply questions the method in the madness

It would be foolhardy to imagine that the economic stimulus plans of a developing economy (India) and a developed economy (US) would have much in common, but then economic crises' can prove to be great levellers! One of US President Barack Obama's major bets on reviving the US economy is his proposed multi-billion dollar infrastructure plan (the largest since the 1950s, upward of $500 billion). India also recognises the criticality of fast-paced infrastructure development & has planned investments of about $410.61 billion ($1=Rs.48.76) in the 11th 5-year plan (again the largest since the 1950s, don't need to refer that!!!).

That's where the similarity ends, more or less. Obama's end game is that he has to generate millions of jobs from somewhere and has few options to do so. India needs to invest in infrastructure primarily because… errr… we need infrastructure… simple as that, and badly so! The infrastructural support systems like routes of transport (roads, railways & metro lines), power generation and its distribution, and development of Special Economic Zones (SEZs), are integral components in fuelling the growth of any economy. But Indian infrastructural development has been hinged by gross mismanagement of resources, superfluous project delays, and lethargic approach of public project contractors.

Thanks (but no thanks) to them, there is a massive opportunity in this sector for India Inc. now. Consistent underperformance has compelled the government to opt for a more fruitful public-private partnership (PPP) model. This brings into picture private players like Anil Dhirubhai Ambani Group's (ADAG) Reliance Infrastructure Limited (R-Infra). As expected, the company's aggressive business expansions in infrastructure have all the trappings of an ADAG group company, as the group has shown a considerable risk appetite for sunrise sectors.

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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)

Saturday, January 19, 2013

Did this ‘Tortoise’ beat that ‘Hare’?

Both K. V. Kamath and Deepak Parekh won’t be around as ceos in 2010. Manish K. Pandey, Deepak Ranjan Patra and Angshuman Paul talk to people in the financial services industry to compare the legacies of the titans

Both started their careers when India Inc. was reeling under a tidal wave of nationalisation and ‘hard’ socialism of the early 1970s that all but smothered entrepreneurship in the country. Both belong to ‘communities’ that have acquired considerable fame for their entrepreneurial skills; one is from Mangalore while the other is of course a Gujarati. You could say that one of them had banking in his genes; his grandfather and father were both bankers. The other ‘discovered’ himself through banking. One was already part of India’s ‘elite’ while growing up, did his chartered accountancy from London and started his career with Ernst & Young in New York. The other came from far off Mangalore from a middle class family and chased his aspirational El Dorado by pursuing an MBA in IIM, Ahmedabad after an engineering degree from a government college. While the first was flying high in New York, the other quietly joined a public sector development lending institution called ICICI. A few years later, even as the man from Mangalore was gradually moving up the public sector ladder, his contemporary was persuaded by a maternal uncle to come and work for an Indian organisation. The maternal uncle happened to be the founder of HDFC.

Of course you have guessed the identities of the two by now. The man from Mangalore is none other than K. V. Kamath, who retired this year as the Managing Director and CEO of ICICI Bank. The chartered accountant who went on to work for his uncle is Deepak Parekh who is all set to step down as the Executive Chairman of HDFC. For the last two decades, the two have towered over the financial services industry in India like titans. There is not a shadow of doubt that both Parekh and Kamath have been unparalleled game changers and that their exit leaves a void that no individual can yet fill. Sure there is Chanda Kochhar who replaced Kamath at ICICI; sure there is Keki Mistry who will replace Parekh. Then there is Shikha Sharma, formerly of ICICI who is now duplicating her former employer’s unbridled aggression at Axis Bank. Then there is – according to many – the unheralded Aditya Puri who heads HDFC Bank and also the understated Renu Karnad, who will now be the Managing Director of HDFC. But virtually everyone in the financial services industry agrees that Kamath and Parekh are in a league of their own. There is a complete consensus in the industry that the two have left corporate legacies and institutions that will endure for a long, long time.

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HEWLETT PACKARD: 3COM ACQUISITION

The 3Com acquisition is a definite plus to HP’s suite of data centre offerings (triple play of server, storage and networking), but integration problems could be quite daunting

However, the company had a mostly downhill journey until it acquired H3C in China, and has since seen a rebound in fortunes. Although HP has a presence in networking with its Procurve line, it has a lot of gaps in its portfolio, particularly at the high end, which make it difficult to make major client wins and create more value.

3Com provides vital missing links to the enterprise data switch portfolio, apart from giving HP enhanced capability in VOIP technology, which will improve upon HP’s UCC (Unified Communication and Collaboration) capabilities. Moreover, H3C has done wonders for 3Com, as a lot of interesting work is happening there. It gives HP a range of dedicated engineers, mostly in China (an anecdote on the web hilariously mentions how the authorities at H3C need to ring bells at regular intervals to remind their employees to eat, since there have been instances of people dying at work because they forgot to feed themselves!).

Of course, the Chinese cost advantage is expected to come into play as well, when it comes to competing with other vendors. Mark Hurd would, however, do well to realize that beating Cisco on its own turf would not be the apt strategy. Charles King, Principal Analyst, Pund-IT, Inc. opines thus, “HP has invested a great deal of human and financial capital into its own ProCurve networking line but its products have had little impact outside of the HP installed base. By purchasing 3Com, the company has acquired a number of products which are highly complementary to its own. More importantly, though, HP now has a globally recognized networking brand that should help broaden the interest in and appeal of its own products.” In fact, that should be HP’s primary basis of utilizing the 3Com acquisition for now, as going head to head with Cisco will take a while, as market share data clearly indicates. In that sense, Juniper, which is number 2 in terms of market share to Cisco, would have been a better choice, as Shaw Wu, IT Hardware & storage analyst, Kaufmann Bros. indicates, “While we are not surprised that HP is making an acquisition in the networking space, we are somewhat surprised it is 3Com. Juniper is viewed as a prized asset and number 2 to Cisco but its market capitalization at $13 billion and likely acquisition premium are likely a bit daunting, even compared to HP’s $119 billion mega-cap status.”

Even if the company in question is 3Com, HP may not be able to shy away from integration issues, especially due to the culture mismatch. Zeus Keravala, Senior Vice President - Global Enterprise and Consumer Research, Yankee Group, asserts that Chinese nationalist interests could prove risky for the deal.

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Friday, January 18, 2013

Barefoot in search of success

B&E’s Pawan Chabria meets up with some individuals who opted to go barefoot in search of success, rather than lazily stepping into the comfort of guaranteed, cushioned golden shoes offered by well set organisations...

So what’s the latest offering from Ace Associates? Well, it comes in the form of a mobile service called, ‘Top five points’ through which a particular salesperson is provided with five reasons for justifying why a certain brand of automobile is preferable over a competitive brand whenever he feels a need to convince his customers. As Anuj claims, he has already roped-in two big auto brands as potential customers for this new service venture. At present, he is also on the lookout for new talent who can take care of his new ventures. And this too isn’t posing any problems to Anuj, “Surprisingly, the response to a start-up venture like ours, has been more than expected, which proves the fact that new-gen MBAs are more than willing to work with start-ups...”

Udit Bhandari, CEO of Indimoto.com, an MBA (with specialisation in Marketing) from The University of East London, UK shares some similarities with Anuj. He too joined the auto sector after his management education, where he worked in GM for about six months. As he says, his MBA education made it easier for him to establish his online second-hand car & bike portal in the country. “The MBA programme helped me in increasing my understanding of business and its various modalities. While setting up Indimoto.com, the learning received in management school helped me to realise various value propositions and to create a strong full-time team, a business plan and a marketing strategy,” he explains. Indimoto.com caught people’s attention via its carpooling initiative, which encouraged commuters to share vehicles to save fuel; clever enough an advertising strategy! Rashmi Vaswani, Founder, Rage Chocolatier, is also one of those who are following their passion with a purpose to strike gold; the only difference was that she couldn’t wait to get started and got down to business right after she completed her post-graduate diploma in management. Her passion was manufacturing chocolates, which she took up as a business opportunity in 2005, and success for her has been sweeter than the product itself.

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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.

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)

Thursday, January 17, 2013

UNIONS: SOCIALIST NO MORE

The good and bad of trade unions

Thirdly, unions have been gradually diverting from their original objectives. With political support, they have been trying to take on countries at ransom. Unions like The Communication Workers Union, International Trade Union Confederation or World Federation of Trade Unions became too powerful, politically motivated, and subsequently, disastrous with their agendas. Unions no longer protected the interests of the poor rather worked towards the benefit of political parties.

Although in countries like Sweden, UK, Germany and Japan, a large portion of the labour is unionised safeguarding worker interests, in many other countries, unions are hated for their political affiliations. Until unions move away from this destructive mode, the time is not far when they’re finally made illegal!

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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.
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)

Wednesday, January 16, 2013

TELECOM: 3G LICENCING

While auctioning of 3G licensing has been announced, there are still doubts on its successful launch

It is noteworthy that the current prices are Rs.15 billion steeper than the ceiling prices proposed by TRAI. So if a company wishes to offer 3G, it would have to shell out Rs.35 billion to just get spectrum and then a further amount to get the processes in place.

As Anil Sardana, MD, Tata Teleservices Ltd. told B&E, “If there had to be bidding, it would have been better if the market prices had to determine the price for 3G rather than have such a high ceiling price as it would impact the plans especially in the B and C circles.” It is well known that India is a price sensitive market and if 3G services have to be used, especially in the rural hinterlands, then it would have to price appropriately.

“With the way the prices stand today, all the telecom companies would have to go back to their drawing boards and see if 3G fits in their revenue models,” shares a telecom company official on conditions of anonymity. Also, as the government is now planning to offer only three-four 3G slots (depending upon the circle) as opposed to seven as earlier proposed, there would not be enough competition in this sphere that would drive down the prices and ring in affordability as brought about in the voice services. So one wonders whether India will see 3G at all!

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Monday, January 14, 2013

Hero honda achieved more than what was expected of it

this volume player stunned market watchers with its aggressive attack. pawan chabra finds out how hero honda achieved more than what was expected of it

To state the secret to success in two words – new launches! The head honchos at Hero Honda went straight back to their drawing boards and zeroed-in upon the fact that attracting customers during times of a downturn would require more magic than just play the pricing game. Then came the slew of launches, one following another. Besides the sporty and macho Hunk and the stylish new CBZ Xtreme, the company managed to make its mark on the conscious Indian consumers with other fresh new launches such as the Passion Pro Power Start, new Splendor NXG, and a variant of the Pleasure.Result: Currently, Hero Honda has a strong market presence in the 150cc segment. The company has more than doubled its volume and market share in the premium segment over the past couple of years. And this has given it that edge in terms of absolute margins.

That sounded great news for Hero Honda in the premium category, but the tiding doesn’t come sans challenges; the biggest being Bajaj Auto. When it comes to the premium segment, one cannot deny that though the company is a very strong player in the executive segment, Bajaj Auto still rules the roost in the premium segment. Consider this: during FY’09, Hero Honda sold about 0.19 million units in the premium segment. Now compare this to the much higher 0.84 million units sold by Bajaj Auto, and you understand why there is much catching up to be done on the part Hero Honda. But having said that, we also do confess that the pace at which Hero Honda is catching up, it surely appears to be determined to give Bajaj a run for its money in the premium segment as well.

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Friday, January 11, 2013

NARESH GUPTA, MD, ADOBE india

I realised... if I pay them the ransom, my son would be back...

B&E: What was your first reaction when you discovered that your son Anant was kidnapped?

Naresh Gupta (NG): Obviously, it wasn’t a very happy moment for me or my family. Infact when the incident happened, I was in Hong Kong for business purpose. I immediately flew back and after some discussions with some of my close associates, we decided to hire an expert from Philippines. That was my first reaction and the first step I took. I didn’t want to compromise on anything and we decided that taking expert opinion and consulting was the best way to get out of the situation and get my son back, safe.

B&E: How were the state of affairs at home? You being the head of the family, did you get into that assurance mode that all would be set right?

NG: Of course not! I was as worried as they were, and I simply told them to handle their own tears. I had to be practical and had to keep my mind off all the grief and think clearly. I had to spend more quality time thinking about what can happen rather than waste time in grief, thinking about what happened!

B&E: So how did the family come to know about Anant’s kidnapping?

NG: The family received a phone call stating the obvious. Then the police was immediately involved and I openly decided to involve the media as well. We were very open about it and hoped that telling the world would make it easier for us to nab the kidnappers. There were people telling me how two men on a motorcycle had picked up my son from where he would catch his school bus everyday. He was just in the pre-nursery standard then, and it would have been a rather easy task to kidnap a kid, who was totally unguarded, totally unarmed or forewarned.

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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.

It’s a business deal

It’s a business deal. They have your asset (son) and you have the consideration (Rs.60 lakh)…

But Sanjay is bravely trying to pick up the pieces and move on. Speaking to B&E, a tormented Chawla turns philosophical and offers a few words of advice to fellow entrepreneurs and CEOs, “Law is technically reactive in nature, and it comes into picture, only after the crime is committed. Even the Government is trying to put in place a CISF security system for the corporates, but keeping in mind the population of India, it is practically impossible to assign a policemen or a security guard for everyone. Citizens need to be more proactive in nature...”

Given the dysfunctional nature of the law and order and police system in India, virtually every citizen is vulnerable to some kind of crime – from chain-snatching to car-jacking to rape and murder. But particularly vulnerable as ‘soft targets’ are CEOs like Anant Gupta and entrepreneurs like Sanjay Chawla and their near and dear ones. And almost everyone concerned with this “industry” agree that the danger will become even more potent and menacing in the months and years to come. “It’s a big business these days... and is constantly on the rise! And we can do little about it at the moment,” states V. M. Pandit, a former official of the Central Bureau of Investigation (CBI) who runs his own private security outfit. A top cop of Haryana Police, who has been privy to information regarding scores of kidnapping cases and who doesn’t want to be named says, “The number of rich businessmen and senior corporate managers is growing manifold every year. It is but natural for criminals to target them. The problem is, many such potential victims are simply not just aware of the simple steps that they and their family members need to take to prevent such crimes. You have to be proactively careful too!” (See Infographics)

Virtually every security expert agrees that there are three things that a family must do when a kidnapping has happened and the ransom calls start coming in – do not lose your cool, do not succumb too easily or too fast to ransom demands and always seek the help of a ‘professional’ who understands the psyche of the criminals.

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.

Thursday, January 10, 2013

Indian consumers were not ready for them

when they entered, indian consumers were not ready for them. but reebok began relentless expansion. the strategy has worked...

Didn’t over expansion result out in cannibalizing their own sales? For instance, in many localities (like South Ex in Delhi) they have two stores. Actually Reebok managed its retail strategy through product proliferation and brand extension strategies. Explains Subhinder, “In one store, the first floor has lifestyle products and on the second floor, we have 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 what helped us to run our stores in same locality phenomenally!” The company also rolled out its premium brand Rockport in India in 2000 and started creating brands for entering into new segments followed by opening new stores for the same. India insights worked well. For instance, Reebok launched shoes with broader forefoots, that suit the Indian customer, unlike the offerings of its international rivals (IBEF).

Finally today, these strategies have helped the company earn a turnover of Rs.14 billion for the year ended 2008. Their focus has also shifted now, since women’s apparel is contributing to 30% and Reebok Classic (the lifestyle venture) is contributing 10% of its Indian turnover. In fact, the women audience is being pampered with the recently launched Easy Tone shoes. By just walking in them, women can get a well toned butt. Irrespective of catering into so many segments, still the company wants to resist the temptation to create its own manufacturing hub in India and is cashing in on the sourcing hub of Adidas.

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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.

India reveals how they made it…

In an exclusive conversation with B&E, V. Vasantha Kumar, Senior VP and Head – Marketing & Communications, ABN AMRO Bank, India reveals how they made it…

B&E: Can you share a latest marketing initiative that has bought in really good results for ABN?

VVK: Well, we have signed Sachin Tendulkar as our brand Ambassador which symbolises our commitment to high performance with consistency. In fact, we have launched a series of events where we give our customers a chance to express their thoughts and ideas about a variety of topics.

B&E: What are the factors that ABN keeps in mind while deciding upon the marketing mix?

VVK: Our marketing mix directly depends on the customer segmentation that we do. We do comprehensive marketing research and then decide upon the kind of communications strategy and the channels to be used. Moreover, word of mouth publicity is critical in our kind of business, particularly for the niche segment.

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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.

Monday, January 07, 2013

LAW AND ORDER: INDIA

The legal environment reflects the larger shame of Indian venality

There is no dearth of shameful stories of negligence and corruption. The entire country was shocked when Manu Sharma, the accused in the Jessica Lal murder case, was acquitted by Delhi High Court. The accusation clearly pointed towards the Joint Police Commissioner for tampering evidence and trying to hush up the case. There was strong demand to involve CBI, but that was turned down too at that time.

CBI, too, is not beyond blame; its inefficiency was clear, for instance, in the Priyadarshini Mattoo murder case. The accused was let-off due to lack of evidence. The judge called it ‘deliberate inaction’ by the investigating agency. Then the kidney racket in Gurgaon led by Dr. Amit Kumar comes to mind. As per indications, he was tipped off by some insiders about possible police action (which helped him escape, though he was later caught). It is immaterial to call ourselves a rising superpower if we can’t provide swift, fair and efficient justice.

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.