Showing posts with label IIPM Think Tank. Show all posts
Showing posts with label IIPM Think Tank. Show all posts

Monday, July 29, 2013

Urban ghettos

The building collapse in Thane which claimed 72 lives was an accident waiting to happen. Muslim localities are sitting on a powderkeg, reports Danish Reyaz

About two years back in Thane’s Mumbra, it was not uncommon to see Fahim Ghare, a young man in his early thirties, hanging out with his bunch of buddies until he was able to lay his hands on a piece of land and erected a one-storey structure within a fortnight.

For a man who did not have much at hand, Fahim’s rise and rise can be considered symptomatic of the times we live in. Within no time, he was driving a brand new two wheeler. But the one-storey was not enough to fuel his ambitions. Within no time, the structure was raised three storeys high and Fahim had moved from driving his two-wheeler to handling a swanky Skoda sedan. For him, life had moved into the fast lane. From three, his building rose to nine floors, all within an unbelievable three months’ - on 1000 square feet of land. A vast migratory cycle ensured that people from low income groups came and settled in the building, the absence of water and power supply hardly any hindrance to their skewed existence. More than anything else, it was this sense of owning a piece of property, a place under the sun, so to speak, that acted as a catalyst.

Fahim is doing what many other young men have done all over the country in predominantly Muslim pockets – in Topsia, Beniapukur, Tangra and Tijala (Kolkata), Jamia Nagar (New Delhi) and Juhapura (Ahmedabad). They are all good examples to illustrate this phenomenon which is now a becoming a growing trend. Which is no small surprise because the one thing common thread that runs through all these ghettos are an utter absence of basic amenities like power, water supply, drainage, government schools, hospitals and access to transport.

Fahim has found a way to beat the system. The first and second storey of his illegal building has been cunningly sold to a school. Children, small and young descend there, study, play and leave safely for their homes.

So while the happy story continues, no one quite knows what lies tomorrow. Municipal officials say that given the time period within which this and other such buildings are `constructed’, safety issues are paramount and come to the fore only in accidents such as the building collapse in Thane which claimed 72 unfortunate people, most of them migrants, in April this year.

So while Fahim merrily continued with his `civil engineering’ feats in open connivance with municipal authorities, people in the neighborhood stood as mute spectators. The reason? His proximity to the local MLA and former mayor of Thane meant he had the system wired.

There are a number of Fahims to be found in Mumbra and elsewhere whose rags-to-riches story can only be matched with the pace of the structures they erect illegally.

Rajan Kine, corporator from Mumbra, puts the blame squarely on the municipal corporation and other authorities saying it is they who have allowed the illegal constructions to flourish. ``Without the consent from authorities, not a brick can be laid down for construction,’’ he says.

People like Fahim are quick to use such stagnant loopholes to carry on with their business uninterrupted. Technically speaking, the Mumbra-Kausa region falls into the forest area and due to its proximity to water bodies, does not lie in the “R” zone. Hence, according to rules and regulations pertaining to construction, the region is unfit for constructing residential structures. Rajan Kine alleges that since the Nationalist Congress Party (NCP) MLA Jitendra Awhad came to power, construction of eight to nine storey buildings within a time span of three to four months has become the norm.

In Kolkata, the tale repeats itself – albeit tarred with a political brush. ``As far as illegal constructions in Topsia are concerned, all of them were constructed during the former Left Front regime,’’ points out Sovan Chatterjee, Mayor of Kolkata and a Trinamool Congress appointee.

Chatterjee now says that the Kolkata Municipal Corporation is clamping down on illegal constructions of this kind. In the last six months, he says, 70 cases of illegal construction have been traced and 40 FIRs lodged. ``Illegal construction has become a hindrance to development in the City of Joy. After bribing anti-social elements and policemen, people construct illegal buildings,’’ says Kolkata-based architect Azim Danish.

Says Affan Ahmed Kamil, director at Urban Buildcon Solutions Pvt. Ltd. ``illegal construction in New Delhi’s Okhla is the result of vote bank politics. People, usually migrant labourers, are settled en masse and exploited as vote banks. This follows official recognition.”

According to media activist Ghulam Mohammed,``Mumbra, a Muslim ghetto, could have been a model town if the community had not been discriminated against by the communal governments of Mumbai and Maharashtra. Thousands of `illegal’ buildings all over the city and suburbs of Greater Mumbai are turned legitimate through bribe. However, for Muslim entrepreneurs, even that route is closed. So there remains no alternative for the so-called dropout 'builders' other than to take the 'criminal' route. They are forced to remain outside the legal and official framework. Mumbra could have been a planned city, just like Sharad Pawar's Lavasa. But Muslims have no political clout and no access to bank finances. They are forced to work with whatever means available to them. At least they are getting employment for themselves and their workers. If they had finances available like the Bohra community's Bhendi Bazaar Project, they could have come out with flying colours with their flair for entrepreneurship.”

Analysts believe the disastrous crash of the eight-storey building in Thane could have been avoided if authorities had recognized the genuine needs of hundreds of thousands of families uprooted during the Mumbai riots. Since the Brihanmumbai Municipal Corporation continues to be run by the Shiv Sena that had unleashed the post-Babri Masjid riots of Bombay two decades ago, the gulf between the two communities is still wide and glaring.

Whatever the reasons – and there are many – there is no denying the fact that it is largely due to the lack of attention, deliberate or otherwise, on part of the corporations, that give rise to land sharks and the builder mafia in the society who in the absence of any regulator in the real estate sector, continue with their own merry illegal ways.

Clearly, there are more such collapses and deaths in the offing, but frankly no one is quite bothered. Typically, in the case of the Thane building collapse, after a few noises and a couple of lowly arrests, everything has been conveniently forgotten. For those who live in those hell holes, it was just another day in their lives.


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

ExecutiveMBA

Thursday, June 6, 2013

Albert Einstein to Eric Gutkind

In January of 1954, just a year before his death, Albert Einstein wrote the following letter to philosopher Eric Gutkind after reading his book, "Choose Life: The Biblical Call to Revolt," and made known his views on religion. Apparently Einstein had only read the book due to repeated recommendation by their mutual friend Luitzen Egbertus Jan Brouwer. The letter, as it is said, is full and frank.

Princeton, 3. 1. 1954

Dear Mr Gutkind,

Inspired by Brouwer's repeated suggestion, I read a great deal in your book, and thank you very much for lending it to me. What struck me was this: with regard to the factual attitude to life and to the human community we have a great deal in common. Your personal ideal with its striving for freedom from ego-oriented desires, for making life beautiful and noble, with an emphasis on the purely human element. This unites us as having an "unAmerican attitude."

Still, without Brouwer's suggestion I would never have gotten myself to engage intensively with your book because it is written in a language inaccessible to me. The word God is for me nothing more than the expression and product of human weakness, the Bible a collection of honorable, but still purely primitive, legends which are nevertheless pretty childish. No interpretation, no matter how subtle, can change this for me. For me the Jewish religion like all other religions is an incarnation of the most childish superstition. And the Jewish people to whom I gladly belong, and whose thinking I have a deep affinity for, have no different quality for me than all other people. As far as my experience goes, they are also no better than other human groups, although they are protected from the worst cancers by a lack of power. Otherwise I cannot see anything "chosen" about them.

In general I find it painful that you claim a privileged position and try to defend it by two walls of pride, an external one as a man and an internal one as a Jew. As a man you claim, so to speak, a dispensation from causality otherwise accepted, as a Jew the privilege of monotheism. But a limited causality is no longer a causality at all, as our wonderful Spinoza recognized with all incision, probably as the first one. And the animistic interpretations of the religions of nature are in principle not annulled by monopolization. With such walls we can only attain a certain self-deception, but our moral efforts are not furthered by them. On the contrary.

Now that I have quite openly stated our differences in intellectual convictions it is still clear to me that we are quite close to each other in essential things, i.e; in our evaluations of human behavior. What separates us are only intellectual "props" and "rationalization" in Freud's language. Therefore I think that we would understand each other quite well if we talked about concrete things.


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

ExecutiveMBA

Monday, June 3, 2013

New release? Rush to...God!!

Never has God been so passionately wooed by the most unlikely devotees as before a movie-release! Monojit Lahiri examines this fascinating phenomenon!

By God... it’s rather odd”, as the Brits might say! It truly is. Here are B-town’s red-hot Dudes & divas, all glitz, glam, gloss, sexy, macho & cool, flashing style & altitude, 24*7, blitzing every available nook & cranny of every conceivable media avenue to gain that extra (publicity) edge over their rival & dig deeper into fan space, living the 10-star perfumed life of the pampered celeb where gossip, scandal, fights, bitching, jealousies, insecurities, posturing & exhibitionism come with the turf, right? However, come a big release & these very same flamboyant, flashy hotties drop everything, change into sack cloth & ashes & make a beeline – folded hands, closed eyes – for the mandir/masjid/religious place of their choice. Religious or not, this is one bulawa they religiously (pun intended) respond to with startling speed because it is closely connected to their future! So suddenly this super-brash hunk – or gorgeous fashionista – super confident about everything is reduced to an everyday, normal, god-fearing mortal, jittery & insecure as hell, leveraging he power of prayer in the hope that the big boy above waves the film through to the select Rs 100 crore club! The latest in the “Help-God!’ trip was the beautiful Kat Kaif who was reported to have made a quick air dash to Ajmer Sharif to seek the blessings of Moinuddin Chisti. Wearing a black trad outfit, head covered the Sheila-ki-Jawani item bomb was a zillion miles away from showbiz & appeared perfectly cast as the earnest devotee requesting god to bless ger latest starrer, Jab Tak Hai Jaan. Considering her fab track record with prayers in this shrine – Ek Tha Tiger & Mere Brother Ki Dulhan - & the readymade 40 carat glow that the film carries, Kaif could well register a hat-trick! Earlier the entire team of the Ajay Devgn – Starrer Son of Sardar – JTHJ’s big rival – was said to have visited the divine Golden Temple in Amritsar, seeking blessings for their film. Several other big cats & banners of Bollywood have, over the years, been moved – literally & otherwise – to fall on the feet of their favourite deity & pray that their film does well. After all, in the final reckoning, beyond star-glow, hysterical promotions, monster budget, spectacular locales, gorgeous music & romance, drama & conflict, action & emotion, there is only one judge n’ jury who can seal the fate of the film… God!

So what does one make of it… does it real make sense? Is it ridiculous dramabaazi? Superstition in action… or just a normal invocation to the almighty to bless their project?

Behavioral Scientist Mira Kakkar thinks that B-town gets the rap for any & every thing it does because of the glamorous space & slot they occupy. “Don’t all organizations hold mahurats, Pujas & religious ceremonies before they commence operations start a new, ambitious project? How come no one bats an eyelid then? It’s a part of the Indian tradition to invoke the blessings of the almighty, so what’s the big deal? Katrina & Ajay did what most big honchos in business & industry do: seek aashirwad. Their being hi-profile luminaries of the glambiz don’t - shouldn’t – erode or trivialize their intent. Sure, a lot of the stuff stars do is for attention-grabbing but that comes with the territory they reside in. To count this as one of them is both insensitive & inaccurate.” Vikas Kharbanda doesn’t agree. The Delhi-based Communication specialist finds “these excursions into god-land hilarious because they are so obviously opportunistic! All year, they live the extravagant life of the pampered rich & famous but the moment a big-ticket release comes up, they turn trembling devotees & mosey across to their favourite gods for maska! God is not that dumb, okay, so he lets his silence do the blessing! Win some, lose some. If these filmy blokes concentrated a little more on the quality of their films & less on shrine-excursions, they may have been better placed. When will their dramabazi stop?

Grow up guys & stop pressuring the old boy! He has enough on his plate!” Film scholar Partho Chatterjee agrees. “It has nothing to do with religion, faith or devotion… it’s about naked commerce! Crores have been sunk into the project, so, please god, let there be a good ROI! It’s a plain & simple business compulsion, a fervent plea to the Big Boss to make the film flop-proof & Rs 100 crore friendly! God must be having a blast seeing these Oscar-winning movies! Funnily, when some of these films strike gold & rake in the stuff, not too much is heard about divine blessings or intervention during the celebration parties!” B-town fan, Neha Sarin supports this move, full-on. Articulates the Dubai-based Housewife. “Mira is right. Bollywood remains the most convenient & favourite punching bag of all the righteous kill-joys who smell a rat wherever they go!

These judgmental, khadoos breed never give these guys any credit or benefit of doubt. Holy shrines belong to everybody & devotees going there don’t need an entry-card/permission from this cynical lot! They have invested blood, sweat & big bucks in their project, so is it a sin to go to these places of worship & ask the blessings of the respected deities/Holy people & pray for their success? Why call it dramabaazi & opportunism when most everyday people do the same? Be honest – How many times do we actually remember god without motive in our everyday lives? Don’t we too seek his blessings on special occasions to fulfill special needs... aren’t these releases too special occasions? C’mon gimme a break! B-town is a soft target. People living in glass houses…”

Phew – quite a mouthful, huh? Cut to another track. This one beams live from Ajmer Sharif – the favourite religious destiny of B-town personalities, big & small. There too opinions seem to be divided between the powers that are regarding the Industry’s agenda, intent & objective of their visit. Dangah Dewan Zainul Abedin Ali Khan – the hereditary Sajjada-nashin of Khwaja Moinuddin Hasan Chisty – believes that a holy place must not be used as a platform for anything that is forbidden by Islamic law. Film stars, he says come there to seek blessings for their films & promote them through the media. He has no problem with the film frat visiting the dargaah, but “mazaar pe CD rakh ke jaate hain, who galat hai.” Why? Because, he explains all sorts of obscene & immoral elements could be in the movie that is blasphemy! He requests all Islamic intellectuals to pay urgent attention to this issue & not remain quiet. He further believes that Ajmer Sharif being such a popular & revered place, Yahan aakar publicity ke liye who yeh sab karte hain. Woh ashleelta ka paros rahe hain,religious jagah pe.” However the Khadim at the Dargah is clearly not on the same page. Avers Qutubuddin Sakhi, “A celebrity or a commoner comes here to pray for his/her well being – not publicity. Bollywood stars have been coming here for the last two decades & more those who feel strongly against & more. Those who feel strongly against this are entitled to their opinion but have no authority to ban them.” Religious heads of another eminent dargah, Delhi’s Hazrat Nizamuddin agree & take it forward. States Syed Afsar Ali Nizami – dargah-in-charge – “To say that stars or directors are using this holy place for commercial purpose & degrading moral values is completely wrong. If the stars believe that their visits at these holy shrines will get their wishes fulfilled, what’s wrong?


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

ExecutiveMBA

Friday, May 10, 2013

From class banking to mass banking

On July 19, 1969, 14 private banks were nationalised in India. Over four decades later, the ruling Congress party continues to bask in the legacy of Indira Gandhi and her crucial decision that changed banking in India
The decision by the central government to nationalise 14 private sector banks in July 1969 is often cited as a defining moment for India. Arguably the most important economic decision taken by any Indian government since 1947, its impact – political, social and economic – is something that even the reforms of 1991 cannot compare to. In fact, it was because of this decision that Indian banks emerged relatively unharmed from the recent global financial crisis.

The road to this social control of banks, however, wasn’t constructed overnight. Although the idea of social control of banks emerged in 1967, the Economic Programme Committee of the All India Congress Committee (AICC) in its report in 1948 had already strongly recommended that banking and insurance should be nationalised as part of a total package for establishing “a just social order”. The matter, however, rested for a decade and a half until the political climate called for it.

The reasons behind this decision, by the then Prime Minister Indira Gandhi, were dictated both by economics and politics. In January 1966, when Indira Gandhi ascended to power with the help of the ‘Syndicate’ of older and more established Congress leaders (K. Kamaraj, S. Nijalingappa, Nilam Sanjiva Reddy, Atulya Ghosh, Srinivas Mallya, S. K. Patil among others), India was besieged by several problems.

Severe droughts had brought down the crop yield, prices had shot up by 16% and US food aid was heavily dictated by geopolitics. A foreign exchange crisis was brewing with the International Monetary Fund (IMF) demanding that India devalue its currency. On a separate front, the country flared up with identity politics in Punjab and Haryana, inter-state feuds between Karnataka and Maharashtra over the newly independent Goa, anti-Hindi agitation in Tamil Nadu and tribal troubles threatening peace in the north eastern states


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

Tuesday, May 7, 2013

Can Naresh Goyal turn around Jet Airways like he did a decade back?

The airline industry does attract colourful figures like the media-shy Naresh Goyal. It would seem that the smell of gasoline encourages more emotions than economic decisions. Bleeding bottomlines, a confused operational model, a mixed fleet and an unforgiving environment. How can Goyal rescue a company in such turbulence?

It’s impossible to capture Naresh Goyal’s style of running his airline in a simple phrase. Rather, if there’s any one who loves dirty little business secrets, this czar of Indian aviation is right up there. We are not referring to his ownership of 18 lesser-known companies, or even how he manages the cash flow at the Isle of Man-based Tail Winds Limited (which owns a 79.99% stake in Jet). It’s his decision-making style that keeps people guessing which foot he will put forward next. If there is a CEO in India Inc. who can fire 2,000 employees and recall them in a day by politely blaming his management in public for keeping him in the dark, it is the very diplomatic Goyal (in October 2008). If there is a businessman who can dare to risk souring a two decade-long relationship with a supplier as powerful as Boeing by placing a $3 billion-worth order for 15 Airbus A330s only because Boeing couldn’t assure ‘immediate’ delivery of the aircraft he’d wanted, it is the impatient Goyal. ‘Gut-feel’ is the word that explains how he takes decisions at Jet. Till date, his intuition has led him down the right lane in a market where the honours are unevenly divided. But the common sight of heavy losses at Jet in recent quarters, and the revelation that the airline had been trying to save Rs.350 million by delaying service tax payments (in March this year) makes many believers doubt this fact.

But he isn’t new to having his back to the wall. A decade back, Goyal had come to face with a similar situation. An airline bleeding for four consecutive years (losses totalling Rs.5.25 billion between FY1999-2000 and FY2002-03) in an industry that had only bad news (losses of airlines in India during the period amounted to Rs.25.51 billion) made critics question the longevity of Jet. But Goyal brought his airline back into the black (Jet made profits of Rs.10.35 billion in the four years leading to FY2006-07). He did well by paying attention to cost-cutting and better utilisation of Jet’s fleet – between FY2002-03 & FY2006-07, Jet’s annual expenditure per aircraft dropped 41.13% to Rs.971.41 million and its load factor increased 39.21% to 71%.

The present situation is in part a reflection of what occurred ten years back. During the past four years, Jet’s losses have risen to Rs.11.14 billion (with an accumulated loss of Rs.17.3 billion) and the industry is struggling for life (losses of Rs.244.68 billion). The challenge for Goyal is clear – save the airline. Problem is – this time, the numbers read worse. That the company has reported negative earnings of Rs.10.62 billion in just the past four quarters (leading to Q3, FY2011-12) is only a quick summary of the trouble tale. Over the years, competition has intensified implying a division of the revenue pie, Jet’s market share has plummeted (from 48.7% in 2002 to 28.8% today), swinging moods in EU and US markets haven’t helped Jet’s international operations (which contributes to 55% of its topline; during Q3, FY2011-12), ATF prices have skyrocketed (by 235.5% in the past eight years), a weakening rupee has made aircraft-leasing, en route navigation costs and fuel more expensive and recent actions by the fuel supplying companies and the IT department have only made living tougher for Jet. What should Goyal do?


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

ExecutiveMBA

Underestimating the Indian Voter Again and Again and...

The so called mainstream media is at it again – making a fool of itself and displaying unending contempt for the native intelligence of the Indian voter. Once again, we are being told by pundits and sycophantic and servile courtiers masquerading as columnists that the Congress and the UPA have got their mojo back and look set to win the Lok Sabha elections due in 2014. The reasons offered are many. For one, the BJP is in a mess and has failed to capitalize on the serial scams haunting the Congress since 2010. Then again, the voter is wary of a rag tag Third or Fourth Front government propped up by outside support and will reluctantly vote again for the Congress. The most servile are writing about how Rahul Gandhi and his computer baba log are drawing up a “fool” proof strategy to woo voters. The pink papers have been screaming hoarse about the return of P. Chidambaram as the Finance Minister and how he will get the economy back on a high growth path. A related part of this delusional narrative is hailing the decision to allow FDI in retail and capping the use of subsidized LPG cylinders at six a year as proof that the UPA government is determined to push for “reforms”. Of course, the game changer is supposed to be what Jairam Ramesh so cutely described as “Aapka paisa, Aapke Haath”. Yes, I am talking about the decision to resort to cash transfer of subsidies to beneficiaries using the Aadhar scheme. So powerful is the alleged impact of this game changing decision that even mainstream media professionals who are critical of the Congress and the Gandhi dynasty are complaining that the ruling party is resorting to bribing the voters to win another election. In all of this, there seems to be a near unanimity that the Congress will pull off yet another stunning victory. They draw parallels with 2009 when the NREGA scheme was used as a bribe to the Indian voters to win elections. Of course, there are many who are still saying that the Indian voter is still so angry, so outraged and so pissed off with the corruption, hubris and arrogance of this government that they are determined to vote against the Congress. But such voices have been drowned in the cacophony of predicting yet another Congress victory.

I can only marvel and laugh at such malarkey and nonsense. For ages, the New Delhi-based mainstream media has utterly failed to read the intentions of the Indian voter. It has a habit of getting it wrong almost every time. And yet, it persists in such hogwash. Allow me to quote columnist Tavleen Singh who was a young reporter in 1977 when Indira Gandhi lifted the Emergency and called for elections. She writes:

“It became clear that Mrs.Gandhi wanted to restore her image as a democratic leader and this could only happen if the coming elections were seen to be fair. Within days of the elections being announced, most of the opposition leaders who were still in jail were released. They were no longer worth keeping in jail since nobody, not even the opposition leaders themselves, thought in January 1977 that Mrs.Gandhi had the slightest chance of losing this election. Every report, even from her own intelligence agencies, indicated that she might lose a few seats; but that there was no chance of a total defeat.”

That was 35 years ago. Since then, in election after election, the mainstream media has almost always forecasted it wrong – the only notable exception being 1984, when Rajiv Gandhi won a historic mandate after the assassination of Indira Gandhi.

It would be easy to conclude that most of the mainstream media is blindly and abjectly supportive of the Congress and the Gandhi dynasty when it comes to forecasting election results. A hell of a lot of our mainstream media is guilty of that. But the bigger crime is its failure to read voter intentions. Just go back to the spring of 2004 and you will realize what I am talking about. Let me give you just one example. The much talked about research agency AC Nielsen was commissioned by NDTV and The Indian Express to conduct an opinion poll and make a forecast for the 2004 Lok Sabha elections. In a largest of its kind survey, around 40,000 respondents were asked about their voting intentions. The forecast was that the then ruling NDA would win between 287 to 307 seats and rule India for another five years. The BJP was projected to win around 200 seats while the Congress was projected to win around 100 seats. Let me give you one more example from the same year when assembly elections were held along with Lok Sabha elections in Andhra Pradesh. A prestigious survey that featured in the Outlook magazine had the following forecast for the state. The then ruling Telugu Desam was given around 165 seats while the Congress and its allies were given around 125 seats. So NDTV said in 2004 that the NDA would rule India for another five years and Outlook said in 2004 that Chandrababu Naidu and his party would rule Andhra Pradesh for another five years. We all know what the actual results were.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Friday, May 3, 2013

Fdi in aviation: new hope for the needy?

Allowing foreign carriers to pick up to 49% stake in India’s airlines looks good on paper. But one policy change, born out of financial desperation, won’t save the sector

Ten months back, when speculations were rife that foreign carriers would be given the nod to invest in the ailing Indian aviation sector, B&E had voiced its opinion through an article titled, ‘The agony & hope for India’s domestic airlines: call it FDI’. Our argument was: Little logic supported the cause of foreign carriers investing in India. In mid-September 2012, policymakers in India decided in favour of allowing foreign carriers to buy up to 49% stake in domestic carriers – precisely what the Department of Industrial Policy and Promotion (DIPP) had been recommending for over a year. The move won many-a-cheer from camps desperate for non-Rupee pay orders. Irrespective of whatever hopefuls imagine will be the outcome of this policy change, our argument stays. FDI rule change is necessary, but not sufficient to change to fate of airlines in the country.

Not to say a domestic industry that has lost $7.93 billion since FY2006-07 won’t see matters improve. But expecting foreign carriers to play good Samaritans to those wounded fatally would be a pipe dream.

who could benefit...

Imagine that foreign airlines can change the fate of Indian carriers in quick time. A year later, the loss-laden Kingfisher could see Rs.150 billion of debt and accumulated losses wiped off its books. Similarly, Jet Airways which still carries a red ink-laden earnings sheet (losses of Rs.23.50 billion in the past 5 years) could see Rs.155 billion being infused in it, making the airline healthy again. Air India (the biggest loss-making carrier in the world during the past decade, with losses amounting to Rs.2.24 trillion!) could seek God’s intervention, and have Rs.878.40 billion of debt and accumulated losses washed off its taxpayer-funded linen. At present, these three airlines – which control 46.6% of our domestic air traffic – are in the most urgent need for foreign support.

Others are capable of flying the distance on their own. IndiGo is debt-free and is profit-making (profits of Rs.12.83 billion in the past 3 years). SpiceJet is sitting on low debt (Rs.7 billion) and is back to its profit-making ways, having reported Rs.561.5 million in earnings in Q1, FY2012-13. Better still, analysts are forecasting a better than before FY2012-13 and FY2013-14 for the carrier. And GoAir, with zero debt, is today a tightly run airline, and growing fast, having learnt much from its experiments in 2006 & 2007.

... AND who will

In the case of Kingfisher, a 5.34% stake is already held by foreign institutions. This leaves Mallya with a chance to offload the remaining 43.66% to foreign airlines. Experts opine that this could be a good time to implement a big-stake-buy-for-cheap strategy. Going by its current market value, Rs.5.10 billion is all that a carrier would require to buy the maximum allowed stake in the airline. But two questions arise. Why would a foreign carrier want to invest in a carrier – with a skeletonic fleet of just 10 aircraft – losing Rs.38.84 million each day [it has lost Rs.74.50 billion since FY2007-08]? Second, would a little over Rs.5 billion suffice? The amount infused would mean little to an airline that (as per CAPA) requires an “immediate” infusion of Rs.32.09 billion to continue operations. Mathematically, selling a 43.66% stake would make just enough for Mallya to see his airline in the skies for another 131 days (without including current outstanding moneys that KFA owes to many-a-party, including the taxman). It is easy to reach answer the hows and whys in the case of two other “needy” carriers – Jet and Air India.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Unavoidable Curiosity

While the rover parties on in Mars, it’s quite clear none of the Presidential candidates makes sense

“Two years ago I set a goal of sending humans farther into space than we have ever been – to an asteroid by 2025 and to Mars in the 2030s,” Obama said in response to questions posed in September 2012 by ScienceDebate.org, a non profit that regularly questions Presidential candidates on their stands on issues related to science. “It’s important to remember that the $2.5 billion investment made in this project was not spent on Mars, but right here on Earth, supporting more than 7,000 jobs in at least 31 states,” Obama added. Romney’s response was, “The current purpose and goals of the American space program are difficult to determine... With clear, decisive, and steadfast leadership, space can once again be an engine of technology and commerce.” Without doubt, none of them makes sense, a fact seconded by the founder of ScienceDebate.org, Shawn Lawrence Otto, who said, “We noticed the candidates for president weren’t talking about any of the major science challenges facing the country and affecting voters’ lives.”

Really, 43 years after mankind’s first notable successful adventure en route to space, NASA’s Curiosity rover may have started its party on Mars, but could not the $2.5 billion price tag of this mission have been used somewhere more productive?

If a life saved is a life gained, then shouldn’t the US government have been saving lives in Africa than searching for life in Mars?


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Tuesday, April 30, 2013

Crossing over to the consumer’s side

After emerging as a leading player in the telecom infrastructure space, Huawei now harbours ambitions of becoming a strong player in mobile handsets. It has developed some interesting products, but can it successfully position Huawei as a B2C brand?

The part that really hits you on a visit to Huawei’s India office at Unitech Cyber Park, besides the obvious traffic and parking problems synonymous with most of Gurgaon, is the kind of growth that the company has gone through in India, which obviously escapes popular notice since it is a B2B brand.

Huawei, which earned revenues of $32.4 billion globally in 2011, is now over 6200 employees strong in India, the country where it established its first overseas R&D centre in Bangalore. Globally, the company claims to have 44% of its people involved in R&D. By 2011, the company filed 36,344 patent applications in China. Out of these, 10,650 were filed under the Patent Cooperation Treaty (PCT), and 10,978 were filed abroad. In all, the company has won 23,522 patent licenses, with invention patents accounting for 90%. It also surpassed Ericsson in the first half of 2012 in terms of sales, posting $16.1 billion in revenue compared to the latter’s $15.25 billion. In India, the company posted revenues of $1.5 billion and is planning $2 billion in investments for expanding operations.

The most interesting aspect about Huawei, though, from a strategic perspective has been its growing focus towards mobile handsets in the recent past. With 2.6% share in Q1, 2012, Huawei has managed to surpass handset manufacturers including Motorola, Sony Mobiles, HTC and RIM as well globally (Gartner). Its consumer business has crossed $300 million in revenues in India; registering a growth of 30% yoy and the company has a market share of 2.4% (Voice & Data, July 2012) in India, with ambitions for 15% share in five years.

However, the very concept of a B2B brand like Huawei making it big in the B2C business is quite counter-intuitive. Also, Huawei plans to invest more heavily towards smartphones, where powerful B2C brands like Apple and Samsung rule the roost. Moreover, its global ad budget of $200 million pales in comparison to $2.6 billion for Samsung and around $1 billion for Apple. How will it fill the gap?

Victor Shan, President, Huawei Devices India, asserts, “We are always focused on serving the Indian market with premium technology handsets and launching cloud technology in India for handsets priced at less than Rs.8000 is one instance of the same (Ideos X3 and Sonic provide cloud storage free upto 16 GB).” Huawei has managed to sell nearly 1 lakh smartphones in 2011 and expects to surpass 0.5 million smartphone and 3 million feature phone sales mark by the end of next year. The company is playing across the price range from Rs.2700 to Rs.27200 as per reports.

Huawei has a very straightforward approach to the challenge of matching ad budgets with the likes of Nokia and Samsung. The company chooses not to match them at all for now! Victor Shan explains using the analogy of war, by saying that first the ground troops (sales & distribution network) must strengthen their positions and then the airforce (advertising) can attack from above. The company is therefore relying on strengthening its network. It already has over 350 service centres in India and has expanded its channel reach for handsets to 35 cities. Besides, it has leveraged its tie ups with GSM operators like Tata Indicom and launched co-branding initiatives with them.


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

Wednesday, April 24, 2013

“Propensity to consume is no longer restricted to Tier I cities”

Lutz Kothe, Head – Marketing, Volkswagen (I), talks about how why the automaker is serious the Indian market and how Tier II & III markets are key to its success

B&E: Till date, Volkswagen has been successful in establishing itself in the Indian market. According to you, what factors are responsible for this success?
Lutz Kothe (LK):
A clear strategy, a relevant product line for the market, a consequent dealer, sales and after-sales ramp up and some clutter breaking communication has led to where the brand stands today in the Indian market.

B&E: VW has maintained a premium positioning in India so far. Any particular reason for it? It does appear to have worked out well for the company till date – but would you maintain this ‘premiumness’ with every new introduction in every new segment that you enter?
LK:
VW in India is indeed a premium volume brand with a clear positioning. The brand delivers high quality, innovative yet affordable products in combination with a unique buying experience and a good after-sales service. Irrespective of what products we introduce in which new category, we will continue to maintain this positioning in every segment. And why not? It has worked for VW so far!

B&E: Products like the Polo and the Vento have been able to create credible space in their respective segments in India. But surely, VW has bigger plans for India than just making some mark in the hatchback and mid-sized sedan segments. Doesn’t it?
LK:
We have already established a plant in Chakan, about 34 km from Pune. So we already manufacture locally while continuing to introduce some of our best models from the global line up in India. Also, we have expanded our customer touch points across 87 cities within 4 years of entering India. All these are some signs of how serious the VW group is about the Indian market. Our aim for the long term is to be amongst the largest players in the fast-growing Indian market. In terms of contributions to our global revenues, India definitely has the potential to become a top market. And the results when it comes to brand positioning, product, sales, dealers and after sales are already very promising for the future.

B&E: How different and similar is the Indian consumer as compared to consumers in the more mature markets?
LK:
India is unique. The consumer is extremely value conscious, while at the same time he is very emotional. First the Indian customer wants to show what he has (Desire) and then he asks for the mileage (Ratio). The Indian customer is excited and reacts immediately to changes – this is not the case in mature markets.

B&E: With a huge price differential between petrol and diesel currently, the Indian market is moving fast towards ‘dieselisation’. Good news for VW or not?
LK:
This trend is a perfect example of how consumers in India react immediately to changes which has currently changed the market dynamics to a great extent. For VW, ‘dieselisation’ is a very positive change as we invented the TDi Technology, which is outstanding when it comes to torque and performance that diesel cars deliver. The change is welcome as we have diesel variants across our basket.


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

Saturday, April 20, 2013

“There are sceptics who doubt hero’s future”

Everything about Hero Motocorp feels right. Except the fact that it will no longer enjoy the technological support of Honda starting mid-2014. Still, Pawan Munjal, MD & CEO of Hero Motocorp, seems to have his plans worked out to remain on top in the two-wheeler market. B&E’s Pawan Chabra learns more from the man himself

Some competitors in the automobile business call him dangerous. Others fear him nevertheless. Whatever be the verdict, there is no denying that Pawan Munjal has done his father proud by taking the family two-wheeler business to newer heights. And it’s not that he is still replying on the brand equity of Honda. That tale is long over. In fact, the manner in which the Hero MotoCorp ship has continued to sail smoothly despite the exit of Honda from the 26 year-old JV about a year back, interestingly proves how this CEO is one who has his strategies mapped out before events occur. When Honda decided to move out in December 2010, a handful of industry watchers had echoed that the exit would put an end to Hero’s dominance in the Indian two-wheeler market. In the April to December period of 2011, the company sold 4.24 million motorcycles – a y-o-y growth of 23.33%, and much higher than the industry average of 14.01%! Munjal prove critics wrong. And this is what he does best. In fact, over the past six months, each month, in the absence of Honda, the company has been registering sales volume of around half-a-million. So far therefore, the company has been doing business in just the manner in which an entity with close-to-50% market share would in the Indian market. But challenges there are for Hero MotoCorp, and the biggest of them is to be able to continue its track-burning run post-June 2014, when Honda will completely withdraw its technological support to the company. Can the company set up its R&D base in India and continue serving the varied demands of the Indian market? Whatever be the outcome, Munjal is aware of the odds of his chances in the arena and knows what the spectators expect. In an exclusive interaction with B&E, Munjal shares his expectations & strategies for the months to come.

B&E: Let’s start with the Honda breakaway from the JV. It has been more than a year since Honda sold its stake in the 26-year old JV. On a personal note, how do judge the performance of the company post that event, including its transformation from Hero Honda to Hero MotoCorp?
Pawan Munjal (PM):
A lot has changed since then. To start with, we have launched our new brand identity, we have launched products under the Hero brand and we are looking at it as a time which offers huge opportunities for a company like us. There are people who believe that the company has been growing at a very fast pace after we decided to go alone but there are sceptics who doubt Hero’s future and believe that not much has been happening at the company. For the latter set of people, our monthly sales number and quarterly results do more of talking as we have been able to break all records achieved since the company began – I would say, new sales records have been set by us in the two wheeler industry in India! I have been asked many-a-time as to why we didn’t choose to book huge profits by selling our stake in the JV and moving out of this business. My answer has always been that we convinced of our vision and we have no doubts on the capability of either the company or the two wheeler industry in India.

B&E: So far, you have focussed mainly on the commuter [mass] segment within the Indian two-wheeler market. Are you thinking of becoming a full-fledged two-wheeler manufacturer in the domestic circuit in times to come, with added attention to premium biking segment?
PM:
This is a natural step for a company like us. So far, we have been a dominant player in the 100-cc category. But going forward, we will not restrict ourselves to just that. Having said thus, we are not switching segments and will continue to work on those areas and upgrade technology in this segment of the market. But since we were completely absent from the premium end of the market, we are now beginning to focus on expanding our portfolio. We are also looking forward to increasing our presence in overseas markets, especially South East Asia, Africa and Latin America. We are therefore increasingly exploring the export market. And since we operate in a globalised market today, we are definitely looking beyond just the domestic market. So, whatever we design now, we will design keeping the global consumer in mind.


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

Friday, April 19, 2013

A successful venture: The past, present, and future of Venture Capital

The Venture Capital model is not broken, nor does it need to radically change. In fact, its future looks quite bright, with demand for VC-backed companies likely to rise in future.
Venture capital (VC) has fueled many of the most successful start-ups of the last 30 years. Microsoft, Apple, and Google – three of the biggest companies in the United States – were once backed by VC firms. Many well-known and highly valuable companies such as eBay, Amazon, Yahoo, and Starbucks likewise started out with funding from venture capitalists. The VC model of financing young and untested companies with high growth potential has been so successful, it has been replicated all over the world.

However, a recent study me Steven N. Kaplan and Josh Lerner of Harvard Business School, shows that the U.S. VC industry is not broken; it is simply going through the expected ups and downs of a competitive market. In the study titled It Ain’t Broke: The Past, Present, and Future of Venture Capital, we show the amount of money committed by investors to this asset class as well as the amount invested by VC firms in the last 30 years has been remarkably constant. In addition, average returns to VC funds do not appear to be unusually low or high relative to stock market returns.

In fact, based on the historic relationship between commitments to VC funds and subsequent performance, the historically low level of funds committed in 2009 and 2010 suggest that the returns to investing in these funds will be relatively strong. Moreover, the declining importance of central corporate R&D facilities in favor of buying small firms to acquire the latest technologies is another reason to be optimistic about the future of the VC industry.

The efficient man in the middle
Entrepreneurs have good ideas but sometimes do not have the money to set them in motion. Investors, on the other hand, have the resources but may lack good ideas. In this case, VC firms step in to bring entrepreneurs and investors together. They do this in three ways.

First, VCs spend a lot of time and effort screening, evaluating, and selecting investment opportunities. It is an intensive and disciplined process that typically takes place over several months. VCs scrutinise the attractiveness and risks of the external environment – market size, competition, and potential for customer adoption; the feasibility of the strategy and technology; the quality of the management team et al.

Second, VCs efficiently design contracts in such a way that if the entrepreneur is performing well, he or she is well compensated. If the company is running smoothly, VCs do not have to get involved in the company. However, if the company performs poorly, the contracts stipulate that VCs can take full control. As performance improves, the entrepreneur obtains more control rights. It also is common for VCs to include provisions that would make it very costly for the entrepreneur to leave suddenly after investors have already made a significant investment in the company.

Read more....

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

Monday, April 15, 2013

Health is wealth, beauty is wealthier!

As Reckitt Benckiser’s India business heads towards contributing more than 5% to global revenues, B&E highlights the possible opportunities and imperatives for the company.

Winters are generally dull for FMCG companies in India. But such was not the case with Reckitt Benckiser last year. Even as the December 2010 winter fog hovered over the Indian plains, Reckitt Benckiser, the British health & hygiene FMCG giant sharpened its growth ambitions in India by acquiring OTC-drug maker Paras Pharma for $726 million. Experts said it was a high price, but Reckitt rebutted them by countering that it’s an apt price for a healthy future. In the warmer sunny days of April this year, the man behind the action, Rakesh Kapoor, then EVP of Category Development, was awarded the CEO baton and his role in acquisitions was key to his case. He led the acquisition of Boots Healthcare in 2006 and SSL International and Paras Pharmaceuticals in 2010, which added brands like Strepsils and Clearasil (Boots), Dr Scholl’s and Durex condoms (SSL) and D’Cold, Dermicool, Livon and Setwet (Paras), to Reckitt’s kitty. Reckitt Benckiser’s acquisitive strategy has brought it to a position of reckoning. Instead of the P&Gs and the Unilevers, its major global competitor was a much smaller SC Johnson (over $8 billion in annual sales, also in the health & hygiene space).

Last month, Rakesh Kapoor was in India accompanied by his board members. India is among the top two developing markets in the company’s agenda, and the company is eager to make its Indian arm count. The Indian FMCG industry with a worth of over $13 billion is dominated by the personal care/beauty segment, which comprises of more than 50% of the market, and is dominated by players like P&G, HUL, ITC, Colgate Palmolive, Marico and Dabur. Health (& hygiene) comprises about 25% of the FMCG space. It’s widely fragmented in terms of players (local & international), as well as product offerings. But it’s rapidly growing, and central to Reckitt’s grand plans.

Reckitt Benckiser India’s turnover is just over Rs.20 billion (of which Dettol alone makes over Rs.10 billion). With the assimilation of Paras Pharma, which has a turnover of around Rs.5 billion, and Reckitt’s own CAGR of around 40% should see it rise the Indian FMCG ladder and soon match the likes of GCPL and Dabur (revenues of around Rs.40 billion), in near future. Moreover, Reckitt’s India division is well on its way to cross the 5% contribution (to global turnover) benchmark, even before HUL & P&G.

Reckitt is investing over Rs.2 billion in a Paras manufacturing facility near Badii to further strengthen its OTC offerings. Chander Mohan Sethi, MD, Reckitt Benckiser India informs, “Currently, OTC comprises 15-20% of business, and is one of our strategic growth pillars.” With Reckitt’s track record for innovation – 40% of its sales comes from products developed over the last three years better times are expected. Besides, it gives Reckitt the opportunity to enter hitherto unknown categories like haircare/body care (Set-Wet deodorants & hair gels), hair oil (Livon). Reckitt has already moved up to the third spot in the Rs.75 billion soap market with its Dettol variants.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail

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