IIPM- INSTITUE PRESS: August 2008

Wednesday, August 27, 2008

Authority sans transparency!

Technology must make the Indian patent regime look sober & trustworthy to inventors

Novartis AG may be unhappy with the Indian patents’ regime

for refusing to grant patent rights to its cancer drug, Gilvec, but many others like the Swiss drug company, F. Hoffmann-La Roche Ltd., are a happy lot because they were successful in procuring the patent from Chennai branch of the office of Controller General of Patents, Designs & Trade Marks (CGPDTM) last year.

In 2005-06, the CGPDTM granted a staggering 4,320 patents – an increase of 125% over the 2004-05 figures. However, despite such impressive figures, the Indian patent rights organisation is being blamed from various quarters for being anything but transparent and reliable. “There are far too many problems associated with the whole process of getting your product patented in India. The procedural hassles eat into your time and the lack of openness in the system certainly raises doubts in the minds of the inventors. Furthermore, it is most disturbing when you have to run from pillar to post to get things done,” Dr. Subodh Sharma, a noted Pune based pharmacologist, who has been engaged in the process of drug registration for many years shared his views with B&E. Dr. Subodh’s view’s have been corroborated recently by the National Knowledge Commission.

The commission under the stewardship of Sam Pitroda has recommended Prime Minister Manmohan Singh to bring about some sweeping changes in the standard operating procedures being followed at the patents offices across India. The commission has unequivocally urged the government to introduce a fresh lease of life into Indian Intellectual Properties offices by making them more technology friendly. The commission feels that this needs to be implemented at an expeditious pace, because transparency needs to be introduced into the system and fair play ensured so that the competitors who raise objections against a particular application for patents get the feel that the system is fair to all.

Novartis AG may be unhappy with the Indian patents’ regime for refusing to grant patent rights to its cancer drug, Gilvec, but many others like the Swiss drug company, F. Hoffmann-La Roche Ltd., are a happy lot because they were successful in procuring the patent from Chennai branch of the office of Controller General of Patents, Designs & Trade Marks (CGPDTM) last year.

In 2005-06, the CGPDTM granted a staggering 4,320 patents – an increase of 125% over the 2004-05 figures. However, despite such impressive figures, the Indian patent rights organisation is being blamed from various quarters for being anything but transparent and reliable. “There are far too many problems associated with the whole process of getting your product patented in India. The procedural hassles eat into your time and the lack of openness in the system certainly raises doubts in the minds of the inventors. Furthermore, it is most disturbing when you have to run from pillar to post to get things done,” Dr. Subodh Sharma, a noted Pune based pharmacologist, who has been engaged in the process of drug registration for many years shared his views with B&E. Dr. Subodh’s view’s have been corroborated recently by the National Knowledge Commission.

The commission under the stewardship of Sam Pitroda has recommended Prime Minister Manmohan Singh to bring about some sweeping changes in the standard operating procedures being followed at the patents offices across India. The commission has unequivocally urged the government to introduce a fresh lease of life into Indian Intellectual Properties offices by making them more technology friendly. The commission feels that this needs to be implemented at an expeditious pace, because transparency needs to be introduced into the system and fair play ensured so that the competitors who raise objections against a particular application for patents get the feel that the system is fair to all. The applications need to be processed openly to obviate the doubts which may arise in the process.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs

Tuesday, August 26, 2008

Building a naveen state

DHRUTIKAM MOHANTY feels that Orissa’s CM Naveen Patnaik can become the head of state for the third consecutive term

At the age of 50, Naveen Patnaik entered politics,

contested the Lok Sabha by-election in 1997, necessitated by his father Biju Patnaik’s death, and was elected an MP. Soon after, he formed a new party, faced fresh polls and became a Cabinet Minister at the Centre and, later, the CM of Orissa, both in 2000 and 2004. On 26 December, 2007, his Biju Janata Dal (BJD) celebrated its 10th anniversary, which also marks Naveen’s completion of a decade in Orissa politics. His phenomenal rise is like a fairy tale. His journey from a writer to a wily politician is interesting. In 1985, his first book on Indian costumes, ‘A Second Paradise’ was launched and sold over 30,000 copies in America within a few days. In 2008, he is being called a truly ‘developmental’ CM.

He was adjudged one of the best CMs in various polls conducted by media houses and industry associations. Moreover, he took the initiative of taking Orissa towards industrial revolution. In the recent past, the state has bagged the biggest FDI project – the Posco steel project with a proposed investment of Rs.52,000 crore. Within four years, the state has signed 105 MoUs with both domestic and foreign firms with an entailed inflow of Rs.277,400 crore. Big names like L.N. Mittal, Ratan Tata, Anil Agarwal and Anil Ambani have announced plans to set up projects in Orissa. One of the state’s top bureaucrat explains, “Partly because we have a system where if the CM says something, it will be done, nobody can oppose him. But mostly, this is perhaps the only state where you can meet the CM and be sure that he won’t ask you for money.” When asked about his much-lauded incorruptibility, Patnaik says, “I am not married. I don’t have children. Who am I going to leave all the money to? I have never been interested in possessions. If you own too many things, they end up owning you.”

Still, Patnaik is not free from corruption charges. BJP’s national VP Jual Oram criticized the CM for his alleged involvement in a multi-crore kickback in the case of the MoU signed between Orissa and South Korean steel major Posco. He demanded a CBI probe into the matter. Further, opposition Congress members have blamed the CM for closing the doors of government offices for new entrants in the name of reforms. Sivananda Ray, VP of Congress says, “Actually, in last seven years, employment generation in the government sector was almost zero.”

As a CM, Patnaik has taken many steps in areas such as economy, administration and social welfare. Specifically, during his tenures, the ever-decreasing financial condition of the state has improved. According to sources, in the year 1999- 2000, the state had to depend on overdrafts on 362 out of 365 days to manage the regular financial affairs. But today, the overdrafts have stopped. In 2001-02, the revenue deficit was over Rs 28,000 crore and the fiscal deficit was Rs.11,405 crore. They were down to Rs.11,190 crore and Rs.5,606 crore, respectively, in 2005-06.

But the CM he has not ignored his responsibility for social development and upliftment of the rural poor. Under his chief ministership, Orissa has launched many welfare schemes like Gopabandhu Gramin Yojana, a Rs.600 crore scheme for infrastructure development. It envisages the development of basic infrastructure such as electricity, roads and water in the rural interiors of 11 districts.

For the development of backward Kalahandi-Bolangir-Koraput districts, Patnaik has introduced a state-sponsored scheme known as Biju KBK Yojana in 2007. Under the Madhubabu Pension Yojana, the state has decided to provide pension to an additional three lakh people from January 2008.

In the beginning, Patnaik’s friends believed that ‘Pappu’, as they fondly call him, was too suave for the crass nature of Indian politics. His rivals held an identical view. They felt that he would soon return to his original vocation, literature and culture. But Patnaik has surprised, even shocked, them. Now, he is heading towards a third term as Orissa’s CM.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs

Monday, August 25, 2008

Will it be Dhum(aal) in HP?

Tough fight in HP, but BJP may hold incumbency advantage

The election scene in Gujarat has indeed reached the

boiling point. The Congress leader Sonia Gandhi is openly advocating the “merchants of death” theory to show the true colours of Chief Minister Narendra Modi. Modi on the other hand, is relentlessly pursuing his agenda to ensure that his Hindu vote bank backs him to the hilt in the ensuing elections to the state assembly. The Elections Commission has asked both the parties to explain their conduct during the election meetings.

With the state deeply polarised on communal lines, such mudslinging was perhaps on expected lines. But the question is, why has Modi shifted gears and is now using the communal card to ensure victory? Has the development plank which the BJP had been touting as its trump card lost sheen? The mood in the state and the dissensions within the BJP rank & file, clearly indicate that it is not a cake-walk for Modi this time. Senior journalists and analysts, who have been extensively touring the state, feel that Modi may win anything between 85-100 seats. This certainly puts him in a precarious position is-à-vis the dissidents in the party, because anything short of a comfortable majority will lead the detractors in the party to gun for Modi’s ouster.

Congress, on the other hand is hoping to use the anti-incumbency factor & and the communal track record of the Modi administration to come back to power in Gujarat. From Sonia to Rahul, most of the Congress bigwigs have pitched their tents in Gujarat to snatch victory from the jaws of a possible defeat. But will that be enough? The betting is still on.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Thursday, August 21, 2008

A low-cost cargo airline?

After shocking consumers with low fares, Gopinath knows what he wants to do next. By ADITI PRASAD

“Giving away a part of Air Deccan to Kingfisher

Airlines was like a doting father giving away his daughter in marriage. She’s still a part of you, yet she is not with you,” says a remorseful Gorur Ramaswamy Iyengar Gopinath (Capt. G. R. Gopinath to you, and the man who made flying affordable to millions of Indian middle class). Under tremendous pressure and obviously bone tired, Gopinath had just emerged from another of those marathon 3-hour sessions with the Accenture team in Air Deccan’s Bangalore headquarters. Accenture is entrusted with the task of figuring out how best to bring about the synergies between the two merged airlines.

Even within the Deccan building at Cunningham Road, Bangalore, the mood is definitely somber. Everyone is waiting to see what the Accenture report (to be finalised on December 19) will throw up and how synergies between Kingfisher and Deccan will take shape. The trepidation is expected as Deccan is like an Udipi restaurant for the middle class, while Kingfisher is the 5-Star hotel for the SEC-A affluent class. In fact, apart from a common boundary wall between Gopinath and Vijay Mallya’s residences (both have bungalows at Bangalore’s Vittal Mallya Road), the two business leaders have nothing in common. Mallya was born with a silver spoon in his mouth, is flamboyantly fashionable and loves the good things in life; Gopinath is rooted to the ground, somber and lives in a minimalist manner. In Gopinath’s own words: “Our lifestyles and interests are totally different. We sometimes get together and enjoy each other’s company, but that’s that.”

So, where does that leave Capt. Gopinath, the entrepreneur who dreamt of making Indian tourists to fly at rock-bottom rates? Ask him that and he gives a coy, secretive grin that almost tells you that he’s already planned his next big venture. Talk to him at length, see the way his eyes still light up on the topic of low cost airlines, and you are tempted to ask Gopinath the most obvious question. Do you plan to launch another low cost airline? “No one stops me from launching another low cost airline, but it would be unethical to do so now,” he says, shaking his head with obvious regret. “Mallya has shown confidence in me. He blindly put money into Air Deccan. I cannot break his trust now,” he adds.

Gopinath insists that he will continue to be at the helm of affairs at Air Deccan for quite some time. “Very rarely, your dreams as an individual or a company are aligned to the nation’s dreams. I want my market to expand to the other India, where a majority of Indians live. We’re aiming for profitability by 2008, and will achieve it,” he avers passionately and confidently. But given Deccan’s losses, partly due to Gopinath’s fast expansion into unviable routes (read: tier II cities where the other India lives) and Mallya’s pragmatic intervention, Gopinath’s passion may not see the light of the day anytime soon. So will the entrepreneur in Gopinath start dreaming afresh?

Market watchers opine that there could be a reverse merger between Deccan Aviation, the parent company of Air Deccan and Gopinath’s helicopter charter division, and Mallya’s Kingfisher and the charter business might be hived off into a separate entity, the control of which may rest in Gopinath’s hands. Interestingly, the charter business of Deccan is doing phenomenally well. It generated a business of Rs.700 million in the last financial year, on the back of new biz areas like helicopter tourism, offshore oil explorations, geophysical mineral and power line survey. Perhaps Capt. Gopi’s ‘secretive’ grin pertained to this new business opportunity, already waiting in the wings. Or perhaps, as a little birdie told me, he is really serious about launching a cargo and logistics airline next. After all, he’s persuaded many train travelers to consider flying as an option; so what stops him from persuading fast-developing India’s myriad companies to consider transporting their wares by air, instead of the usual land and sea routes.

On May 31 this year, in a lightening quick deal (it took three days to get sealed), Mallya acquired a 26% stake in Air Deccan for Rs.5.5 billion. Then toward the end of October, Mallya’s UB Group bought another 20% shares in an open offer, taking the flashy tycoon’s total interest in Air Deccan to a near-majority 46% and things have never been the same at Air Deccan headquarters again. The UB Group is now in the process of picking up 5% more equity through creeping acquisition, which will take Mallya’s holding in Deccan to a majority 51%. With Vijay Mallya in the pilot’s seat, Air Deccan’s common man (their mascot for the last 4 years) obviously stood no chance. In November, the re-branding exercise began: the yellow and blue colors of Air Deccan were re-painted with the Kingfisher red; Air Deccan hostesses donned the red skirt of Kingfisher crew; and the biggest, Air Deccan’s name changed to Simplyfly Deccan.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Wednesday, August 20, 2008

United, we all stand tall!

Restructuring its holdings under one umbrella will help bring transparency for Essar Group
Even amidst all the euphoria that’s being generated about listing in the stock markets, there are companies that, quite curiously want out, and the Essar Group is one telling example with its steel business. Earlier this year, the group had sought de-listing of Essar Steel & Essar Oil from the bourses.

While de-listing of Essar Steel remains confirmed at a

price of Rs.48 per share, there are confusing signals with respect to the de-listing of Essar Oil. On one hand, the company has confirmed on November 16 that it has given up its plan to de-list from the bourses. ‘To meet part of the requirement of funds for the expansion project and other corporate purposes, the board has approved the issue of GDS to promoters on a preferential basis, up to a maximum of $2 billion,’ the corporate stated. But this influx of shares would increase promoters’ stake to over 91% & to comply with SEBI guidelines, they necessarily must go for de-listing from the market. Clarity on this aspect is expected soon.

In the case of Essar Oil, staying listed seems to be in line with its expansion plans. Essar Oil has unveiled an elephantine expansion plan of trebling its refinery capacity from 10.5 MMTPA to 34 MMTPA. The company will be pumping $6 billion to fund its expansion plans, which will hold the company in good stead to encash future opportunities. On the other hand, de-listing would be in sync with group’s shareholding re-structuring plan. In the past, the group had got its telecom arm, Essar Tele-Holdings Ltd. de-listed and de-listing of Essar Shipping is underway. Essar’s restructuring plan seems similar to that of Vedanta – the first Indian company to list in London. Reportedly, the group plans to bring its stake in different companies under a single overseas entity, baptised as Essar Global – a Cayman Islands (tax haven) based organisation. Unlike Vedanta, Essar is yet to take a call on Essar Global’s listing. Comments R. K. Gupta, MD, Taurus Mutual Fund on overseas listing, “It helps in attracting global investors to invest in their company. On valuations, it does have a small implications but not a major one.”

While the signals are unclear from the company regarding Essar Oil, it is quite clear that having one holding company would help immensely in bringing transparency & credibility in the market. And considering how it operates neck deep in capital intensive businesses, be it steel, oil, shipping or power, they may be looking at external capital infusion in the near future & it would be a major plus point when it has to take up debt from the international market.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Monday, August 18, 2008

Mutual aid...

...to be the only priority to live
On 8th November, New Delhi hosted a meeting of Asian na

tions on Mainstreaming Disaster Risk Reduction, Early Warning & Preparedness, which had participation of 36 Asian countries. Just few days later, a whammy cyclone destroyed large part of Bangladesh, rendering millions without shelter and taking 3,000 lives. Sadly, very few of those who attended the meeting came forward to help that country, in dire strait. It was only India among the biggies who not only gave aid but also forewarned Bangladesh about the early warning system. Asia unfortunately always had to bear more than its fair share of natural calamities, be it the 2004 Tsunami which took away about 300,000 lives or the Orissa cyclone which claimed 7,000 lives. Sadly there is a visible lack of cohesion among Asian countries, when disaster strikes any one. The Western First World, on the contrary, has been more at the forefront in doling out aid. This time too the US pledged with $2.1 million, Britain with $5 million while France and Germany with $730,000 each, in order to see the misery of Bangladesh mitigated to some extent. It was rather unfortunate to see its immediate neighbours, barring India, remaining mute spectators to the camaraderie. Lack of effective technology to deal with such mayhem can always be substituted to a great extent with the right kind of attitude to help each other. Unfortunately for Asia, not only it, as a whole, is lagging in terms of technology to contain the effect of such calamities, in terms of cohesion too, it is far behind the First World countries. That has, unfortunately made all the difference.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Thursday, August 14, 2008

SMART FINGERPRINT

It will prevent villagers from being cheated

Places like J K Palli, Gonpura, and Seelampur are

certainly not the IT hubs of modern day India. Yet for the residents of these villages, IT has brought in a welcome change. With the introduction of Biometric Smart Card (BSC), they have been spared the agony of being fleeced and cheated by middlemen, Panchayat leaders, or government officials, especially under NREG schemes. “I am able to keep a track of my attendance, work done, and payments received. Now, no one can cheat me as the BSC contains permanent records of all my transactions,” says a confident Subhash, a worker in Seelampur.

Elaborating on the working of BSC, Mercy, Coordinator, World Vision, says, “An optical finger size biometric device is used for registering all the ten fingers. Thereafter, a photograph of the worker is taken and his/her personal details are filled in the NREGP Card. The card and the photograph are scanned and attached to other details to create a permanent database (of all workers).” Madan Mandal, who hails from Khagaria, adds, “Every morning, our ID number is entered, we place our fingers on the device, we see our photographs on the BSC, and this helps us in recording our attendance.”

Speaking to B&E, Kris Dev, Promoter, LL2C (Life Line to Community) and the man behind the new technology, explains, “The citizen is not empowered even after 60 years of Independence. Life Line to Community and Life Line to Business are tools to empower them irrespective of their status in society or organisation. Every citizen would have a unique identity and can register any request or petition from his home or the village community centre, and it would be tracked for fulfilment. Total transparency and accountability can be ensured.”

Technology is not the panacea for all the ailments within the administrative system, but such initiatives can go a long way in minimising corruption. Remember how the former chief minister of Andhra Pradesh, Chandrababu Naidu, computerised the land records of his state. It brought in huge transparency in all the land deals. In a similar vein, NREG Act is supposed to create assets for the village and villagers, and help rural earnings. And information technology can become an integral part to ensure its efficient governance.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Wednesday, August 13, 2008

A SILVER CLOUD

Virtualisation may drive the CIO’s blues away
Escalating resource pressures on the technology

front can really pull down organisations. But virtualisation is one stupendously innovative technological concept that has made matters easier for all such companies. For the uninitiated, virtualisation is about hiding the true characteristics of resources and is one of the key concepts behind distributed network computing today.

This technology will help lower costs by reducing intricacy by slackening management through a common management platform. Virtualisation technology not only enables consolidation of various application workloads on a single machine, but also reduces the number of servers and workstations required to maintain and increase the output. The next generation technology will be a virtualised IT environment that could be effectively managed from a single point of control.

IBM’s latest version of virtualisation named ‘Blue Cloud’ to be launched in the spring of 2008 provides a snapshot into what the future holds. It will link together computers across the globe to deliver Web 2.0 capabilities and enable data centres to be universally accessible from a cloud of resources. The entire system will be supported by its Power and x86 processors. IBM’s Blue Cloud is more about ‘grid’ computing and definitely can be combined with virtualised infrastructure. Blue Cloud is nothing but a commercialised version of the gigantic distributed and blade-based server that Google, Yahoo, Microsoft and others have already built. “Blue Cloud will help our customers quickly establish a cloud computing environment to test and prototype Web 2.0 applications within their enterprise environment,” comments Rod Adkins, who is Senior Vice President, Development & Manufacturing for the IBM Systems & Technology Group.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Tuesday, August 12, 2008

Financial turmoil

Fund managers are a bemused lot these days. Some mutual funds are delivering great results, but others - in the same or different space - are going completely bananas. Read the 4Ps B&M tracker of the best & worst performing mutual funds over the last year to understand what’s up and where...

Certainly barring the last six months, when even

the safest investment havens could not withstand the ongoing financial turmoil, the average Indian investor has never had it this good. With 34 mutual funds (MFs) lined up on dock, flaunting over 2,000 schemes to choose from, the mutual fund industry has unquestionably come a long way. However, the journey still appears to be petite when compared with global counterparts.

Even though the value of assets under management (AUM) has gone up massively (growing at a CAGR of 47% since 2003, according to Mckinsey), the relatively low penetration level of MFs is one thing that forces Indian fund houses to take a back seat among global peers. For instance, in the United States, assets managed by mutual funds represent about 78.6% of GDP, whereas in India they account for a meager 6.6% (Frost & Sullivan). Look closely, and the picture looks worse. While mutual funds deal with about 20% of the total household financial assets in the US, the number in India stands at a meager 3.6%. This indubitably points toward one of the most intriguing problems prevailing in the industry – the problem of poor distribution. This is certainly the main reason, besides lack of investor awareness and inadequate banking facilities, which has forced asset management companies to stay out of reach for the majority of population.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Monday, August 11, 2008

‘Forward-integrate’

But that’s missing the point. If the recent SSKI research shows that the worth of FMCG market in India is Rs.450 billion, then

Adi Godrej tells us that he wants to have an incredible Rs.80 billion of this market by 2012. Can he manage even a significant part of it with the likes of HUL, P&G, ITC and many more having a killing hold on the market? Not unless Adi Godrej is ready to take corporate hits by the dozen. And M&As, like what Godrej is attempting of late [e.g. the takeover of UK hair dye manufacturer Rapidol] surely involve the highest risk – global research by McKinsey, BCG and the likes show that M&As destroy shareholder value on an average between 50 to 80%. COO Dr. Rakesh Sinha comments, “Godrej is looking for more such acquisitions for another five years.” Like we said, dangerous!

And to ‘forward-integrate’ their own product value chain, Godrej is also planning to come up with exclusive stand-alone stores that sell just Godrej products! “Godrej is looking for a turnover of Rs.300 crores by 2010 and will have 90 Lifespace stores by 2010,” claims Shyam Motwani, Vice-President and Business Head, Retail, Godrej & Boyce. Critically, as of now, Godrej doesn’t have the product width to populate a store enough to induce repeat purchase by consumers. Does it not then make a good case to also sell products of other players through the Lifespace stores? Godrej is uncommitted on this as of yet.

And finally on the transformation list is the group’s rural marketing plan. The rural market oriented firm, Godrej Agrovet, has two retail arms, Godrej Aadhar and Nature’s Basket. While the former is an agroservices-cum-rural retail outlet, the latter is a claimed first-of-its-kind, one-stop retail outlet for fresh farm produce. The USP of Aadhar is that unlike the first mover ITC’s e-Choupal, they also sell farming equipment to farmers. If you thought the 72 Aadhar stores Godrej currently has are not enough to impress you, then the next figures would shock you! They plan to make this a whopping 1,000 outlets by 2011.

Be it SMG, or the property segment, or retail, or FMCG or for that matter their rural initiative, what stands against Godrej’s strategic intent is a clear fact that forget being first movers, or even second or third or fourth movers; Godrej has perhaps been amongst the last movers amongst the Indian biggies to consolidate market promises. In one perspective, this could be termed a safety first conservative approach; but in another, it could also be termed as a case of opportunities lost. And the sudden intent to ramp up initiatives in all sectors could end up in sucking out crucial resources too fast too soon. But at the same time, on the positive side, there is no question that the vision of the management has gone into a transformative mode, enough to catapult the group into a world beater league, that is, if the dice rolls right. Well, Einstein was criticised – and termed thoroughly illogical – during the initial days of his hypothesis building for the theory of relativity. And then, one day, when he proved it, they termed him the greatest visionary science had ever seen... Adi, we’re waiting, and critics we might be, but we surely are on your side of the theory!

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Friday, August 08, 2008

Japanese Maruti and indian suzuki?

From a high of above 90%, Maruti’s market shares are now down to the mid 40s. Is Suzuki focused more on making Maruti a globally selling company? Has Suzuki decided to relegate the ‘Maruti’ brand – and India sales – to a second tier? In the rarest inside scoop, Karan Meherishi of 4Ps B&M meets all top brass at Maruti for a spectacular analysis...

On a tangential but as important a front,

Maruti products lack the novelty factor which Hyundai and Tata Motors use quite successfully. Hyundai markets its cars as being exclusively for India. The i10, as well as other models, have been successfully branded through the ‘India first – the world later’ strategy. No Maruti product has ever been exclusively marketed solely for India. Here is where the concept A-Star enters, but more on that in later pages. Then, of course, is the threat from Tata’s supposed Rs.1 lac car, which according to market reports, will be marketed as ‘For India, By Indians’. The Tata car will also be sporting a diesel engine like its sibling Indica; clearly a direct threat to Maruti, more so because of the diesel premise. The Maruti top brass has been documented as having termed Tata’s small car ‘impractical’. Though I might agree, what if the Tata car does work out against all odds? Does Maruti have a Plan B that provides it flexibility to include further low-cost variants in its portfolio in case of a future fallout? Would it wish to include more diesel cars? I couldn’t get a clue...

When I got through to R.C. Bhargava, Chairman, Maruti Suzuki, and questioned him on whether Maruti has/will have an increased diesel focus, he did comment exclusively to me, “We do have diesels in our portfolio, like the one which comes with the Swift. And now, since we have our own manufacturing plant, we may consider including more diesels in our portfolio.”

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

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Wednesday, August 06, 2008

US economy tightened

Movie attendance in 1974 went up by 16.9%. In 1982, the US economy tightened by 1.9% against the previous year, while box-office collections rose as high as 16.4%, movie attendance was up by 10% (blockbusters? ET: The Extra-Terrestrial and Porky’s). In 2001, economic growth slowed to 0.8% as compared to 2007. Box-office collections conversely mounted by 9% and movie goers went up by 4% (hits: The Mummy Returns and Ocean’s Eleven).

The beginning of 2008 again has shown a slip in

the economy, with consumer spending for the month of Feburary up by a mere 0.1%. In contrast, Michael Brush, an award-winning New York financial writer, has quoted the movie attendance of Q1, 2008 to be up by 4.5% as compared to last year. “Movies offer something completely separate from what you are dealing with day to day. So they really become worth the money when money counts,” offers Jeff Blake, Vice Chairman, Sony Pictures Entertainment. The reasoning? As recession approaches people seek refuge from reality. Says Marino Marin, MD, Gruppo, Levey & Co., “Consumers cut back on purchases during recessions but shift discretionary spending money to affordable activities like movies.”

So, the Writer’s Guild strike may have hurt the studios and hurt them where it hurts the most, but the good news is that they have a fair chance to recover their monies this coming summer, thanks to the recession and its bizarre anomalies!

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Tuesday, August 05, 2008

Operating cost increases

“Like many people, I got into this business by chance,” Manav confesses. But, having come so far, he understands that having taken the bold step there’s no better way of dealing with the challenges than to live in full

conscience that they exist. Talking about the most important challenge, Manav divulges, “If the operating cost increases, it only squeezes the market further. High ATF price is also a big challenge with ATF prices further set to increase globally by about 30-40% from the already alarming levels!” There is also the fact that while dealing with high income customers, recessionary consequences hit your business hard. But, Club One will have to live with this cyclical monster. The company’s slow addition to fleets may also sound logical, but the sudden boom in HNIs during India’s economic boom period may also mean unfulfilled demand. Challenges apart, ‘fractional ownership’ (a concept that Warren Buffet introduced with his chartered airlines business in America) for Indian businessmen has worked well for him. “We made a huge difference as there were not many HNIs who owned aircrafts except a few like the Tatas, Birlas and Ambanis. We take care of everything right from aircraft requirement to safety measures. You call us, say you want an aircraft and get it,” he points out.

There is another interesting take from the man who goes against the concept that widely held companies make for better business models. According to him, “When you are a private company, you can take decisions in a second. When you are a public company, you have all kinds of regularities to take care of. You therefore lack the flexibility and there are constant delays in executing ordinary decisions…” But ask him about the financials of his company, and while Singh flatly refuses to reveal details, he nonetheless openly expresses his desire to go public soon. “We’re doing very well and hope to go public soon.” Now, whether Club One will remain a closely held public company is a question for another day perhaps.

There is also the well-accepted truth that going international is the manna for ailing domestic carriers. And does the Club One chief know about this? “Well, of course! We already cater to international customers and serve them all over Middle East and South East Asia …” In fact, international flights have solved the high fuel prices in India dilemma for this chief executive, as international ATF prices are lower. Surely, there are lessons to be learnt by the domestic air captains from Singh’s success and his niche-flying philosophy. Who says, being conservative and cautious does not pay. For Manav Singh, the proof of the ‘aviation’ pudding has been in the eating.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative