National

Hike in retail FDI

The central government is all set to raise the limit of foreign direct investment in the retail industry in India. The Department of Industrial Policy and Promotion (DIPP) has moved a cabinet note to the proposal to increase the limit of foreign direct investment in single brand retail from 50% to 100%. DIPP was earlier in favour of upping the limit to 74% but later took an aggressive stand to allow complete ownership of a company by a foreign player in single brand retail. DIPP is of the view that if foreign luxury brands like Louis Vuitton of France and Swedish furnishing house Ikea are allowed to open more stores in the country, they will look to source their products locally due to the ramp-up in their scale of operations. Similarly, for multi-brand retail, the proposal is to allow 51% foreign direct investment. The move has come in a time when the government is trying hard to push through the proposal to allow more liberal foreign direct investment in multi-brand retail, which will allow big players like Walmart, Carrefour, Tesco, etc., to enter the Indian market and will help the government to shore up declining foreign direct investment.

No more good times

The flamboyant Vijay Mallya-led Kingfisher Airways is in a hot soup these days. After cancellation of over 200 flights in recent weeks due to oil companies’ stopping supplies because of non payment of their dues, it has received a show cause notice from the Director General of Civil Aviation. As on date, Kingfisher is due to clear a bill of around Rs.13 million to Hindustan Petroleum. It was the second time this year that the oil marketing companies stopped supply of aviation fuel to Kingfisher pending the clearance of huge dues. Besides, Kingfisher is also finding it difficult to service its Rs.6 billion in debt that it has taken at a high cost. The airline is in talks with the lenders for a debt restructuring plan. Presently over 23% of Kingfisher’s stake is owned by a consortium of 13 banks, including SBI, ICICI Bank, IDBI Bank, Bank of Baroda and Punjab National Bank.

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

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

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Ranked 6th Overall
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IIPM’s Management Consulting Arm-Planman Consulting
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King of Disruptive Times

Stupendously sarcastic to competition & a saintly saviour to the sector – that’s Kingfisher…B&E’s Steven Philip Warner analyses...

It received nothing more than derision and mocking laughter when on a fine afternoon during the summer of 2005, Vijay Mallya promisingly announced the launch of a domestic carrier, destined to be the best in style, service and quality. There were chuckles all around the boardrooms and one Captain (G. R. Gopinath, MD, Air Deccan) even ridiculed the Kingfisher business model’s so-called superiority. “We are not in the business of fashion,” is what he had remarked... Today, Mallya effectively decides what Gopinath’s next strategic move should be. And it is this very ‘fashion-fanatic’ entrepreneur, ladies and gentlemen, who has swept across the domestic aviation sector disrupting many past taken-for-granted strategies in one stroke, giving nightmares to many struggling leaders in the sector like Jet Airways & Indian. That very style is what has allowed Vijay Mallya and his premium flier Kingfisher to run through the army of loss-making giants. From being a global stalwart in the alcoholic beverages industry to being a potent force in the airlines sector, which has in all reality changed the rules of the flying game; a game too hard for many to play and a game too easy for others to lose! But the wonder of it is that rather than focusing on one key strategy, Vijay Mallya actually used a plethora of tactics to fortify his position in the industry. B&E analyses the key ones...

Tactic No. 1: In-flight customer experience!

And it’s not the brilliant red colour that we’re talking about! Vijay Mallya, despite having introduced Kingfisher as a low cost carrier (LCC) airline, has extremely shrewdly repositioned the airline on the basis of quality being delivered to the customer rather than on low pricing! To a point where today, Kingfisher gives a stupendous promise of being a top-quality service airline, and for both economy and business classes alike. When asked about this tactically differentiating factor, Vijay Mallya stressed on the strong impact and importance of innovation, which created that special space for Kingfisher in the Indian skies. He divulges, “In terms of passenger service and delivering on our promises, Kingfisher Airlines has always been at the forefront by constantly innovating. The innovations span three broad areas – product and service offering, marketing related innovations and finally, innovations in terms of delivery and distribution. Even in the future, the focus will be on continuously enhancing operational efficiencies, increasing conveniences for guests so as to delight them even more and raising service standards even further!”

Mallya clearly has practised what he preaches. Think about it, forget domestic airlines, frequent flyers now vouch that Kingfisher’s in-flight customer experience is much better than that offered by even the best of international airlines. From most modern aircrafts, sumptuous gourmet cuisines (with additional helpings at the call of a button), vibrant ambience to undoubtedly the best in-flight entertainment system in the industry with about 30 live, video and radio channels, Kingfisher has truly created world class benchmarks in service quality. And how could we forget the quintessentially charming airhostesses. Quotes an amiable Supreet Kaur, a flight-attendant with experience at Kingfisher Airlines, “It’s a great place to work, with such a healthy atmosphere. Sometimes it gets rough ensuring that the passengers get the best of what we call world-class service. Surely, my experience at other airlines have not been this pleasing...” We can surely vouch for that, can’t we!

Read more......

Source : IIPM Editorial, 2012.

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

For More IIPM Info, Visit below mentioned IIPM articles.
 

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

IIPM : The B-School with a Human Face