Showing posts with label IIPM New Delhi. Show all posts
Showing posts with label IIPM New Delhi. Show all posts

Monday, September 10, 2012

Tim, what are you doing?

Former Google key man Tim Armstrong is cutting deadwood, exploring new businesses and being trigger happy like how. But his current assignment at AOL could prove to be a career killer.

March 17, 2009: A crowd of 1000 employees has assembled in a large tent at the original Dulles, Virginia Headquarters of AOL. Tim Armstrong, Chairman & CEO, is about to make his debut speech. AOL founder Steve Case speaks briefly before him; without putting much stress on the bloodied past. Then, a 6 foot 4 inches tall Armstrong rises to the podium. The air is heavy with nostalgia with some employees wiping away tears, hoping that Tim’s speech would be enough to wish the bad years away. Armstrong gets a standing ovation; his speech does better. Happy days are surely here again...

Erm, not so fast. AOL has, after all, been a revelation in the manner in which it has managed to fall, from being an Internet giant to a firm that’s all but out of business. It started with the ill-fated AOL-Time Warner merger, and continued into regular strategic mistakes that the top management kept attempting despite warning signs. For all right reasons, Tim Armstrong, who is former head, Google Ad Sales, US, was the key figure responsible for driving revenues in the search engine’s bread and butter business. He took over the position of Chairman and CEO of AOL even as the giant began its demerger with Time Warner, which culminated in December 2009. For Tim, that time was perhaps one of the worst. Post the demerger, AOL has lost 20 million of its 26 million paid subscribers – even this remaining figure is consistently dropping at the rate of 3% per annum – and has been left with a market cap of $2.68 billion. Still, customer satisfaction has paradoxically increased. Foresee Results’ 2010 American Customer Satisfaction Index (ACSI) had AOL see a 6% y-o-y increase in customer satisfaction and a 32% increase in satisfaction since the same was first measured in 2002 (Foresee Results told B&E through its communiqué that their analysis “suggests that usually when an industry laggard reports increased customer satisfaction, its because all of its customers have left except for the truly loyal and satisfied base...”).

Although Armstrong has been trying hard to bring the beleaguered giant back on track, his various restructuring attempts are resulting in further reds in the balance sheet. For the quarter ending June, AOL posted revenues of $584.1 million, a drop by 26.54% yoy. AOL’s US display advertising was down by 7% and the international counterpart of the same went down by almost 52%. This was as a result of Tim shutting down AOL offices in Germany and France. But the more surprising blow came from the search and advertising business, which Tim is trying hard to not lose – the quarter ending June saw a business downfall of 27% yoy. This was despite the fact that Internet advertising revenues in the US during the same quarter were up by 14% (as per PwC). In all, AOL slipped to a loss of $1.6 billion compared to a profit of $153.7 million the previous year. The key factor was the goodwill impairment cost of $1.4 billion arising out of the $10 million sale of social networking site Bebo, which AOL had bought for $850 million! Armstrong still put on a brave face, as he said, “In the second quarter, we continued our efforts to successfully reposition AOL for growth and the company is getting healthier every day.”


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, September 08, 2012

A content pretty woman

Eat Pray Love has been globally panned; the only little takeaway has been claimed by Julia Roberts, who was reportedly quite taken with Hinduism while filming for the movie about a woman’s journey of self-discovery. With her newfound belief in reincarnation, she is hoping for a “quiet” life in the next one. Anyone looking to trade places with the ‘Pretty Woman’?



Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Tuesday, September 04, 2012

“Retail banking is dominated by customer satisfaction”

For IDBI Bank retail banking is a game controlled by the customers, which can only be won by satisfying them. In an interaction with mona mehta, C. S. Jain, Head – Personal Banking, IDBI Bank, talks about the growing importance of retail banking in India and discloses how the bank is planning to reach the pedestal by winning ‘the game’...

B&E: The BFSI segment in India and abroad is running after innovations in terms of products and technology. How is it helpful to the consumers? And, how is IDBI Bank planning to benefit from similar new trends?
C.S.Jain (CS): When it’s about retail banking, innovation is a trend in products. What is more important for a consumer is the easy accessibility to such products and services of the bank. On the other hand, consistent and smooth delivery of the same means a lot to the bank. And this is where technology comes into the picture. Fulfilling all the above requirements are the hallmarks of technology. So for a bank like us, which is already on its way to universalisation and thus is focussing on retail banking in a major way, innovative products with an efficient technological support plays a very critical role. It helps the bank in drawing a large number of customers. See for yourself. With only 700 branches, IDBI Bank today has almost 40 lakh retail customers. And the reason behind it is an easy guess keeping in mind that despite being one of the youngest commercial banks, IDBI Bank has won the award for Best Bank in technology.

B&E: While the country’s economic environment is still not very clear, how are you planning to embed technology in your core strategy to create a competitive advantage for yourself?
CS: Keeping the economic upheaval in mind, IDBI Bank is waiving charges on savings account and current account (CASA) services in order to attract more business and achieve goal in lowering costs of deposits. The services in which the bank has waived or reduced fees include account closure, ATM interchange, issuance, cash services, new cheque book, ECS, EFT, new card issue, outstation cheque collection, account statement, standing instructions, stop payment and so on. Under present circumstances this has proved to be extremely beneficial to the bank in strengthening the relationship with its customers.

B&E: This year has already witnessed IDBI Bank’s aggression in terms of marketing and promotional activities. What kind of return are you expecting from the same?
CS: In order to acquire substantial increase in customer base by March 2011, IDBI Bank is not only using advertising campaign and multi-media campaign, but also harnessing its staff strength to maintain a better relationship with the customers. IDBI Bank has asked its staff to build and upgrade relationship by enabling customers to open more accounts with their family and friends. Our ongoing advertisements with the theme ‘Friendship’ and the tag-line – “For us, customers are more precious than their money” – are taking off well.



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Monday, September 03, 2012

“THIS BUSINESS EXPECTS YOU TO COMPLEMENT & COMPETE”

Manish Agarwal was hired to drive UTV’s ambitions in the mobile space. He defends some critical factors, including fall in revenues and employee retrenchment

“When I met Ronnie, I was surprised with his clarity of thinking and the sharpness of comprehending a situation and articulating it. It was a 45 minute chit chat session, wherein his whole concern was how I, coming from Microsoft, would fit into UTV,” says Manish Agarwal, who has spent one year as the CEO of UTV New Media. Excerpts:

B&E: The 3 year old UTV New Media is in a budding phase. What are the expectations from this vertical?
Manish Agarwal (MA): Broadly there are two expectations from us, one is how do we dominate the mobile screen; which has 500 million users and growing and secondly, how do we become the biggest player in that vertical like UTV Motion Pictures is in the movie space. This is the screen that is going to touch maximum number of consumers. So how do we create cutting edge innovative content and think of new products, which allow consumers to think of our content.

B&E: Who do you consider strong competition and what are you doing to stay ahead of them?
MA: This is a very interesting arena where we have competition from Hungama, Cerebrum, et al. This business requires you to complement and compete in the simultaneous phase. For instance, Hungama can partner with us on something and we compete in a different segment in the market at the same time. In the last one year, we have zeroed on a few business principles. We realized that we are not just in the business of content aggregation but creating content IP and at the same time we ought to add value to the content. So basically we are not looking at taking content from X and giving it to Y. Secondly, we aim to provide consumers innovative products that they can leverage on. Thirdly we need to create IP on the web point by building our own unique platform in social graph and consumer profiling systems et al.

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.

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Saturday, September 01, 2012

COURSE CORRECTION

It was a stellar year for M&M, as the company saw sales & profits surge phenomenally. But M&M is now equally concerned about where its numbers come from, as it diversifies into new segments & geographies via M&As and alliances. by Pawan Chabra

Ever since the Mahindra Group initiated the process of bringing the renowned Jeep to the Indian market two years before the nation got independence in 1954, the brand developed a strong association with being a tough, rugged & quintessentially Indian jeep maker.

By the time I got to see a Mahindra product for the first time (in the 1980s), a lot had changed in the Indian automobile circuit (although small fry compared to the changes happening today). For instance, by that time, Indians were preferring the Maruti 800s over the Premier Padminis and the Ambassadors, Mahindra had became a market leader in the tractors segment (a position it retains). But the one thing that remained intact was the image of M&M. However, by then, Anand Mahindra, the current MD and Vice Chairman of the Mahindra Group, was all set to take the Group to the next leap of growth. In all these years, the Harvard graduate has taken the group to new fields like IT, hospitality, retail and more recently into aerospace.

Meanwhile, M&M posted standalone net profit of `20.87 billion for the year ending March 2010, a phenomenal growth of 150% yoy; which has catapulted it to rank 34 on the B&E Power 100 list (from 64 last year). The performance was buoyed by unit sales of 2,86,713 vehicles during the year, a growth of 30% yoy. Even as UVs and tractors continue to be its mainstay in the automotive sector, M&M is attempting to taken a more holistic view of its potential and trying hard to expand its portfolio and reach.

If one analyzes the moves made by the company, over the past few years, it doesn’t takes rocket science to figure out that the strategy to acquire companies to expand its presence into new segments within the automotive industry has been an integral part of its strategy. For instance, the acquisition of the Kinetic’s assets in 2008 was done to enter into the two-wheeler segment with the latter’s infrastructure, product brands and distribution network. While the deal gave a sigh to relief to Sullaja Motwani, who was trying her level best to save a sinking ship. “Mahindra acquired the assets of Kinetic with a view to get a lap ahead in the race in the Indian two-wheeler segment,” said Pawan Goenka, President – Automotive & Farm Equipment Sector, M&M. The recently announced acquisition of Reva Electric Car Company has given the company an entry into the nascent electric car segment. The latest buzz in the domestic circuit is that the company will deploy the electric technology in a couple of SUVs in its portfolio apart from incorporating it in its LCVs range. “Mahindra and REVA now have access to Mahindra’s vehicle development technology and distribution network, significantly enhancing its ability to launch a state-of-the-art electric vehicle for global markets,” said Chetan Maini, the founder of Reva, to B&E after the deal was signed.


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Friday, August 31, 2012

INDIA’S 100 MOST PROFITABLE COMPANIES WHO’S THE NEW NO.1?

Is a corporation meant to look at the larger good or just at profit maximisation? the debate continues to catch the imagination of executives and academicians. Virat Bahri wonders whether the debate is relevant at all

“Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business”
Niall Fitzerald,
Former CEO, Unilever

A corporation’s primary goal is to make money. Government’s primary role is to take a big chunk of that money and give it to others.
Larry Ellison,
CEO, Oracle

Corporations are known to be in existence since the Roman empire. But as far as defining their role in society is concerned, it remains a work in progress. When the father of modern economics Adam Smith expressed his support for free markets, he wouldn’t have imagined that corporations would evolve to the extent that they have today. However, one does get a brief idea from his writings that he was against untethered power in the hands of companies, and advocated increasing competition. The debate on their role and relevance really took centre stage with Milton Friedman’s treatise on the virtues of free markets, when he proposed that the “social responsibility of a corporation is to increase profits.”

When we talk of present day corporations, we tend to have two extremely strong points of view – we dread their growing power and influence (like Smith) and also tend to wonder whether Friedman was actually justified in his simplistic assessment. As blatant misuse of power and influence, especially by the large MNCs came to light, the alternate view of ‘stakeholder responsibility’ gained ground; championed by academicians like Darden School of Business Professor R. Edward Freeman.

The debate rages on, in classrooms and corporate boardrooms alike. It’s visible in how BP continues to be penalised for the Gulf of Mexico oil spill, for ‘being the big bad corporate that compromised on safety systems (payout has reportedly reached $6.1 billion till date). One part of this debate is obviously the legal perspective – the fact that companies must not “be evil or unethical” in pursuit of profits; which could mean various practices like duping customers, engaging in unfair competition, harming communities or environment or exploiting employees. The second perspective is about companies being epitomes of nobility and contributing to the social causes as a responsibility. Now the question is whether investing time and money in such causes is right; especially in public listed companies, where the money belongs to a large group of shareholders. In other words, should CSR only be strategic in nature?


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Wednesday, August 29, 2012

The UN declares water a basic human right. You mean it wasn’t one till now?!

With this problem soaring year-after-year, authorities speculate that India, too, will soon be among those countries where water will be available for a price higher than that of other beverages. Already several areas are experiencing acute shortages in the supply of clean water. Feuds over water are getting more frequent. About two months ago in Bhopal, three people allegedly drawing water ‘illegally’ were brutally murdered by a group of people in broad daylight. In such a grim scenario, the recent diktat by the UN is critical and should provide the poor and middle class much-needed relief.

As water is fast becoming a premium commodity, bottled water companies are jubilant but also sympathetic for the poor people, for whom water threatens to become a luxury product. “With the recent declaration by UN about people’s right to clean water, the government would make conscious efforts to provide clean water. This will give those people, who are deprived of regular supplies of water, a reason to smile”, said the marketing manager of a bottled water company.

Although gallons of water exist in the form of oceans, converting saline water to consumable drinking water is a procedure that is extremely expensive and requires advanced technology.

Life without water is impossible to imagine. It’ll thus be good to remind ourselves that all rights come with duties, so that every individual does his bit to conserve this precious resource in ways we need no more coaching on. Let’s amend our ways and allow one less reason to people to kill each other over!


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Wednesday, August 22, 2012

M&M: REVA ACQUISITION

Despite promises, Reva has been struggling over the past decade to strike gold when it comes to sales. But with M&M acquiring a controlling stake in the electric carmaker, much is expected to change in the near future. So has Anand Mahindra placed an electrifyingly winning bet? by Pawan Chabra

There is also another interesting talk doing the rounds amongst auto experts. When Reva entered the UK market, it did so sans dealers, sans showrooms, sans advertising and sans salesperson – in short, like a bull skydiving sans a parachute! And guess what it had in mind – to sell its products through the online route. However, with M&M coming into the picture, Reva will find due sense being knocked into its head, as it goes on to become a mainstream automaker, thanks to M&M’s widespread distribution network. Just a niche manufacturer, no more! As for M&M, the excitement is no less. Apart from getting aggressive with the upcoming launch of Reva NXR & NXG, M&M is now looking ahead to sell the electric car in US. But what about India? Is there really a market for electric cars?

Sounds harsh, but critics argue that with around 3,000 electric vehicles on the Indian roads, it’s not Reva alone that is struggling. Players like Honda have also tasted the salt, bitter to the tee. Even the much-hyped Civic hybrid gained such a lukewarm response in the Indian showrooms that the company was forced to empty its inventory at a massive discount of Rs.800,000 on the marked price. However, there are optimists who expect that 20% of cars sold in India by 2020, would be electricity-run. Considering this, the bet placed by M&M on Reva seems to be a winning one. Further, as far as synergies between the two are concerned, Mahindra’s past record and its love for alternative fuel engines (Scorpio Micro Hybrid, for instance), the two seem to be a well-matched. “As a result of Mahindra’s investment, the new company Mahindra Reva will be able to scale, innovate and accelerate for greater electric vehicle access to consumers,” explains Maini. In fact, an internal research on past Indian mergers by B&E’s research desk supports Manni’s claim. The study conducted over a period of a decade, reveals that whenever an Indian company has acquired a “controlling stake” in another Indian firm for over $10 million, the shareholders wealth on an average, has increased by over 135% within two years of the deal; that’s a buy for the M&M stock! With a running cost of Rs.0.40/km, Reva has a clear edge in a market like India. Even the Pulitzer Prize winning Thomas Friedman has praised Reva to no ends in an op-ed column in The New York Times early this year. And are we forgetting this – M&M has just laid its hands on the top-selling electric car in the world! So whether we see a new record-breaking hybrid model from M&M (like the Toyota Prius, the largest selling hybrid) or we see the deal falling flat on its face, expectations and critics are a part of any new deal package. Surely, Maini’s got his money and M&M has got the marked “environmental” touch now, and both Anand and Maini know that India will take time to warm up to the hybrid game, but Europe and Americas are waiting!


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Tuesday, August 14, 2012

If this is how you treat martyrs...

Many of you might dismiss this as a plug; but believe me, this one comes straight from the heart. If you can spare some time, please read the cover story of The Sunday Indian magazine that is available in the stands. You will read about a police constable Pratima Rout, one of the few who survived the Maoist massacre of Nayagarh (Orissa) in 2008. She was hospitalised with four serious bullet wounds. Forget adequate care, appreciation and compensation, Pratima realised that a senior cop of the IPS cadre actually stole some of the money allotted to her for treatment. The police department of Orissa now wants to recover the money from her. The same police department kept sending her notices demanding why the bullet riddled Pratima is not reporting for work. You will read about Mase, the widow of martyr Ganga Madkami, a policeman killed during a Maoist mine blast in Orissa in 2008. Mase and her eight year-old son Sunadhar, stay in a tribal village in the Malkangiri district – far away from the state capital Bhubaneswar. She is crestfallen and defeated by India’s bureaucracy; the illiterate widow has to go every month to Bhubaneswar and bribe a gang of ghouls (office babus) before she can lay hands on the pension due to her.

There is yet another case in which the Chief Minister of Orissa Naveen Patnaik personally intervened; or so the media reported. Sub-Inspector Ajit Bardhan was abducted and butchered by Maoists in July 2009. His retired father Jaykrishna Pradhan suffered a heart attack. The CM personally visited their house and issued categorical orders that the father and the widow (who incidentally went into labour on hearing of her husband’s death) be taken care of. Today, the retired father is doing the rounds of government offices because even the provident fund and family pension of his martyred son is yet to be released. There are numerous destroyed families of martyrs in Orissa – and everywhere else in India – who are going through more state-sponsored trauma.

Just forget all the hogwash about India Shining. How in God’s name can a nation and society even have the temerity to lay claim to greatness, when it so callously treats the families of those who laid down their lives to protect the nation and the society?

I could be biased because many of my close family members serve in the Armed Forces. But really, the shame is searing and scathing. I recall the summer of 1999 when India was fighting the Kargil war. My brother-in-law who belongs to The Rajputana Rifles, was sent with his unit to Kargil, leaving my sister and two young kids behind at Faizabad where he was posted. At the height of the war, I actually saw my sister being heckled by the railway reservation clerk at Faizabad who mocked at the fact that her husband had been sent to fight a war and she needed a train ticket that was her right as a citizen. I realised that day that the most destructive legacy the British had left behind was the bureaucracy. 


Read more.....

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Friday, August 10, 2012

INDUSTRY STATUS FOR ORGANISED RETAIL

The least the Budget can do is set a time frame and an action mechanism to address the issues pertaining to its legitimate growth as an Industry of the future

A recent report on Indian Retail traces the history of organised retail in India as being spread over 4 phases, and identifies the period from 2010 as the fourth and Consolidation phase. Whether there will be more phases or more stutters in the growth of organised retail remains to be seen, but what is certain is that the government has the biggest hand to play in the making or breaking of Organised Retail in India. And the eagerly anticipated 2010-11 Budget (to be presented on February 26, 2010) will have ample opportunity for setting the tone right for the next 5 years, just like the historic budgets in the early 90s liberalised the Indian economy.

The reasons for this great dependence on policy, over demand and markets, are both financial and regulatory. The financial reasons are well known: the possible boom in foreign direct investment (FDI) when retail sector is opened up, the entry of global brands that would bring best products and services given our growing demographic attractiveness, and the possible effects on local employment, sourcing and allied services. Little can be expected however, in this budget, in terms of loosening of the FDI reins, as this change would need more political courage & conviction (which is lacking till date) and more time for formulating the ground rules to address the fears in various domestic quarters.

But what is more critical than even the above would be the symbolic change that can be brought within the regulatory function of the government. Organised Retail does not have the status of an “Industry” like the banking and financial circles, because of the lack of regulation and clarity within the government on Emerging Retail. What the retailers would be keen to see would be an official acknowledgement of the role that Organised Retail would play in the next decade or more, and a policy statement governing the vision of the government in making this happen.


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Wednesday, August 08, 2012

Daring to Dream beyond Third World!

 I t is the season for pundits to pontificate on the decade that has gone by and appear suitably magisterial while predicting what lies in the decade looming over the horizon. I never wanted to be a pundit and will never be able to appear magisterial. So, I will restrict myself to suggesting some basic mindset changes in our country if we are to finally discard the Third World tag by the end of 2019.

The mindset change that we need is to stop thinking of India as a former colony and a victim of global myriad conspiracies. We as a nation are becoming so prickly that it is often laughable. If George Bush signs a nuclear deal with India that is truly historic, we whine and crib and proclaim that America wants to colonise India. If China arm twists the World Bank into not giving a loan for a project in Arunanchal Pradesh, we see dark conspiracies and start revisiting 1962. Ditto for the Doha round of WTO, for the Copenhagen Round of climate control talks and permanent membership of the UN Security Council. As a nation, we must become less prickly and more practical in pursuit of national interests. And what is our long term national interest? Growing at 8% a year and finally eradicating poverty. For that, we need to reform ourselves; not blame America or China.

The second mindset change that we need urgently as a society is to become more generous and charitable. Sure, we have examples of generous individuals and institutions in India. But what they do is not even a patch on what greedy capitalists do in America. I humbly request each one of the 200 million middle class Indians to make a pledge that they will voluntarily contribute Rs.5,000 a year towards primary education of poor children. Believe me, if middle class individuals and corporate entities make and implement this pledge, India will eradicate illiteracy by 2019 – even if successive governments are inefficient and corrupt.

The third mindset change that we as a society and nation need to urgently implement is to raise our sense of civic pride and responsibility. I know it is a tired cliché, the one about the Indian keeping her home spotlessly clean while nonchalantly dumping garbage on the streets. Indians desperately need to learn more civic manners and work ethics. It is wonderful to gloat about the beauty of our chalta hai mindset, but we will never cross the threshold of Third World scorn unless we change our ways as citizens. And please don’t blame politicians for this; it is you and I who are squarely to blame.

The last and most urgent mindset change is related to our education system. Our education system is geared to mass manufacture unemployable morons who only know how to follow orders, rules or a set pattern of work. Innovation, free thinking and initiative are ruthlessly discouraged – by schools, by parents and by peers. India will always be condemned to be a Third World nation unless we change this.


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