As the RTI Act completes six years, how does the entire story look in retrospect and what’s the future that we wish to shape for it.

Call it a lack of good faith or perhaps a misdirected agenda, but a landmark legislation that the UPA has been considerably responsible for, is under attack for obvious reasons. As the RTI Act completes six years, how does the entire story look in retrospect and what’s the future that we wish to shape for it. 

 

In a way, the PM’s statements should not come as a shock. After all, it is the RTI that has left the Congress on slippery track on more occasions than one. The most recent addition to this list was a note prepared by the Finance Ministry in March this year that faulted Home Minister P. Chidambaram for not exercising his complete powers as Finance Minister in 2008 to enforce an auction of valuable spectrum. The absence of that auction is said to be one of the major catalysts of the telecom scam, believed to be India’s largest swindle till date. Chidambaram was even asked to resign by the Opposition on the basis of the Finance ministry’s note. After a week-long political storm, Finance Minister Pranab Mukherjee ‘clarified’ that different ministries had contributed to the note and that he did not agree with all its inferences. However, his other colleagues who have been advocating for a weaker RTI with the reasoning that RTI hampers the ‘deliberative process’ of the government have found support with the PM. Soon after the PM’s statements calling for a critical look into the Act, Corporate Affairs minister Veerappa Moily said that certain ‘inbuilt weaknesses’ in the RTI Act need to be addressed and that the bureaucracy should know how to meet the challenges posed by it – such as ‘how to write in a file’. He reiterated that there was no intention to amend the Act. Law Minister Salman Khurshid was more diplomatic in his praise for RTI and said that there was no plan to revisit its provisions to his knowledge.

As reassuring that these assurances might seem, things have already started moving in the background. In a fresh development, the government is learnt to have framed new guidelines for addressing RTI applications. As per reliable sources, all RTI replies prepared by junior officers will now have to be vetted by a senior officer, preferably of the Joint Secretary rank, before they are sent to the applicant. Among the changes considered, sources say that RTI replies will have to be brief and will not be allowed to reveal much.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

Bend It Like Bernanke: How Government Guarantees Shape Asset Prices

Professor Bryan T. Kelly of Booth School of Business and co-authors (Prof. Hanno Lustig of UCLA and Stijn Van Nieuwerburg of New York University) undertake a field research to understand how government intervention and economic outcomes offer new insights into the effect of bailouts on the value of the banking sector.

Europe is wrestling with structuring a bailout as its financial firms and broader economies teeter on a precipice. In America, markets look to Europe with unease while politicians bicker over whether stimulus and backstops established in 2008 and 2009 caused the current economic malaise or if it might have been worse. On top of all of this, uncertainty about the ultimate outcomes of government intervention exacerbate the deeper underlying uncertainty responsible for much or the morass.

According to a research undertaken byme, Hanno Lustig (UCLA) and Stijn Van Nieuwerburgh (New York University), we seek to better understand the interplay of government intervention and economic outcomes by offering new insights into the effect of bailouts on the value of the banking sector. When the government guarantees the survival of financial institutions that are “too systemically risky to fail,” it is effectively providing free crash insurance to anyone who holds bank stocks. More specifically, it insures the banking sector as a whole, but does not necessarily insure individual banks (contrast the bailouts of Bank of America and AIG with the failures of Lehman and Bear Stearns).

This effect can indeed be seen very clearly in the cost of put options on the financial sector ETF and put options on individual banks stocks (put options are in essence crash insurance for stocks and stock indices). We examine the prices of these insurance contracts prior to and during the 2007-2009 crisis in the US financial sector. What we find is that the cost of traded crash insurance (put options) on the entire financial sector become puzzlingly cheap during the crisis, while the prices of puts on individual banks remained high. In effect, the government substantially subsidised the cost of index puts, which drove down the prices investors were willing to pay for the traded version of this insurance. Since any individual bank may still fail amid a guarantee, the effect was much weaker for individual bank puts. The puzzling divergence in the cost of single name puts relative to index puts during the crisis is well-explained by the bailout story after all.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

Dead before they got started

With the rising incidence of suicides, higher education has to pick up fast in India to reduce the performance pressure

With the Indian education system proving its mettle with those chosen few ‘bright’ students, most of its unwanted side effects are disregarded. One of them is the alarming incidence of student suicides in India. With an overwhelming 7379 cases in 2010 (compared to 5857 cases reported in 2006 as per National Crime Records Bureau), immediate attention is the need of the hour.

According to academicians and mental health professionals, the major culprit is the entire philosophy behind the existing education system, where performance ranks above everything else. The associated pressure from parents, peers and society to excel in every sphere, poor regard for individual talent and blind obsession with a few career options are most likely causes.

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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. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

Naresh Chandra continues to perform a key role within the Indian government

Surprisingly, Chandra is not an isolated case. A number of high profile bureaucrats are allegedly making a fortune from their current/past presence in the bureaucracy/ministry and affiliation with regulators and policy makers. V. K. Shunglu, who is now serving PwC, had served as the comptroller and auditor general of India, the apex body having sole constitutional rights to audit independently. The same goes with B. B. Tandon, once chief election commissioner, secretary of the Ministry of Mines and the Ministry of Personnel, additional secretary of the Ministry of Corporate Affairs and also a member of the SEBI board. He is now on the advisory board of PwC.

Pradip Baijal, former Chairman, Telecom Regulatory Authority of India (TRAI) set up Noesis Strategic Consulting Company post his retirement for providing ‘advisory’ services. Ex-Indian Oil Chief M. S. Ramachandran is now chairman of Cals Refineries. R. V. Shahi, a former bureaucrat, is now chairman of total power solutions firm Energo. S. K. Roongta, former Chairman, Steel Authority of India Ltd., joined as MD of Vedanta Aluminium in April this year. These are crying examples of bureaucrats and PSU heads who are getting themselves into such positions where private companies can use them for unfair advantage. In fact, dozens of ex-bureaucrats and PSU executives become lobbyists and advisors in India. Similar is the case in the US too – as per estimates, around 43% of ex-Congressmen since 1998 are registered lobbyists. President Barack Obama tried to reduce the influence of ex-Congressmen on the Senate, a phenomenon called ‘revolving door’ – but was strongly contradicted by bellicose donors of the Democrats. He was worried about ex-Congressmen; while in India, people like Naresh Chandra don both hats with aplomb!

The government needs to monitor existing and previous bureaucrats with affiliations outside and take action. In the case of Naresh Chandra, he should not be in a position where there is a conflict of interest between his roles in private and public domains. He should take a cue from Nandan Nilekani, who ensured that he gave up his position at Infosys before taking over UID. It always pays for the greater good to lead by example.

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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. 

IIPM Best B School
IndiaManagement Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

Japan’s new model of political leadership

Karel Van Wolferen, Author of The Enigma of Japanese Power, is Emeritus Professor of Comparative Political and Economic Institutions at the University of Amsterdam

Amid the horrifying news from Japan, the establishment of new standards of political leadership there is easy to miss – in part because the Japanese media follows old habits of automatically criticizing how officials are dealing with the calamity, and many foreign reporters who lack perspective simply copy that critical tone. But, compared to the aftermath of the catastrophic Kobe earthquake of 1995, the difference could hardly be greater. This time, Prime Minister Naoto Kan’s DPJ (Democratic Party of Japan) government is making an all out effort, with unprecedented intensive involvement of his cabinet and newly formed specialized task forces. The PM himself is regularly televised with relevant officials wearing the work fatigues common among Japanese engineers.

In 1995, Kobe citizens extricated from the rubble were looked after if they belonged to corporations or religious groups. Those who did not were expected to fend mostly for themselves. This reflected a ‘feudal’ like corporatist approach, in which the direct relationship between citizen and state played no role. This widely condemned governmental neglect of the victims was among the major sources of public indignation that helped popularize the reform movement from which Kan emerged.

Unfortunately, today’s Japanese media are overlooking that historical context. For example, the newspaper Nihon Keizai Shimbun recently lamented the shortcomings of the Kan government’s response, emphasizing the poor lines of command running from the cabinet to officials carrying out rescue and supply operations. But it failed to point out that the feebleness of such coordination was precisely the main weakness of Japan’s political system that the founders of the DPJ had set out to overcome. When the DPJ came to power in September 2009, it ended half-a-century of de facto one-party rule by the Liberal Democratic Party (LDP). But even more significantly, its intentions addressed a cardinal question for Japan: who should rule, bureaucratic mandarins or elected officials? The LDP, formed in 1955, had not done much actual ruling after helping to coordinate post-war reconstruction, which extended without debate into an unofficial but very real national policy of, in principle, unlimited expansion of industrial capacity. Other possible priorities hardly entered political discussions. The need for a political steering wheel in the hands of elected politicians was highlighted in 1993, when two major political figures bolted from the LDP with their followers. By doing so, they catalyzed the reformist political movement that resulted in the DPJ, the first credible opposition party that was prepared to win elections and actually govern. Lowering the prestige of the government right now is the fact that Kan has not shown any talent for turning himself into a TV personality who can project a grand image of leadership. But his government is dealing as best it can in the face of four simultaneous crises, its efforts encumbered by huge logistical problems that no post-World-War-II Japanese government ever faced before.

The efforts of Kan’s government are obviously hampered by a rigid and much fragmented bureaucratic infrastructure. The DPJ has had scant time to make up for what the LDP has long neglected. Its seventeen months in power before the current catastrophe have been a saga of struggle with career officials in many parts of the bureaucracy, including the judiciary, fighting for the survival of the world they have always known.

But it was the US that first undermined the DPJ administration, by testing the new government’s loyalty with an unfeasible plan – to build a new base for US Marines stationed on Okinawa. The first DPJ prime minister, Yukio Hatoyama, miscalculated in believing that a face-to-face meeting with the new American president to discuss long-term matters affecting East Asia could settle the issue. He was steadily rebuffed by the US government. As Hatoyama could not keep his promise to safeguard the interests of the Okinawan people, he followed up with a customary resignation.

Japan’s main newspapers have mostly backed the status quo as well. Indeed, they now appear to have forgotten their role in hampering the DPJ’s effort to create an effective political coordinating body for the country. A half-century of reporting on internal LDP rivalries unrelated to actual policy has turned Japan’s reporters into the world’s greatest connoisseurs of political factionalism. It has also left them almost incapable of recognizing actual policy initiatives when they see them. The rest of the world, however, has marveled at the admirable, dignified manner in which ordinary Japanese are dealing with terrible adversity.

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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. 

IIPM Best B School
IndiaManagement Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

A new frontier with China?

As it is already being speculated that the Chinese space program may not entirely be for peaceful purposes, India has to take urgent action

Stoic China’s ambition of rising as a space age superpower is evident from its future plans including building space stations, manned space vessels and space laboratories. China has hauled up its space programs out of Third World mediocrity to successfully complete a spacewalk in 2008, and it earlier sent a human to space in 2003; thus becoming the third country after US & Russia to do so.

One would otherwise hope that China’s endeavours in this area only better our understanding of the world beyond us. But the catch here is that China’s space programs are run by the People’s Liberation Army (PLA), which raises doubts over its claim of being a program for peaceful purposes. This became a subject of debate when it fired missiles and destroyed a dead satellite in 2007. This raised the heckles of the US as a nervous Pentagon talked about Chinese “disruptive technologies.” But the country that’s really nervous is India.

The Ministry of Defence, ISRO and DRDO have expressed concern and feel that India’s space assets are under threat from China. India’s concerns are further reinstated with China’s possession of emerging anti-satellite weaponry and new classes of heavy lift off boosters. The way China destroyed its paralysed satellites and created space debris has not been even advocated under UN.

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. 

IIPM Best B School
IndiaManagement Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

“The big players pose a challenge”

Sanjiv Kapur, Sr VP & Head, iGate Patni BPO

B&E: How has the Indian BPO industry been evolving over these years. What are the important phases in the last decade for Indian outsourcing?
Sanjiv Kapur (SK): The Indian BPO industry has come a long a long way from call centres. From there, we moved to deliver commoditised sort of work by handling back office operations and doing processing jobs. I think that the next generation in this industry will focus on providing more end-to-end services. Now the clients except three major things – they want end-to-end services and they expect significant cost data, which can only come through high level platform-based BPOs; for that you require certain skills and technology. And thirdly, they want to pay only for the final business output, so we have to ensure that we do this. Today, the client expects you to turn from a vendor to a strategic partner. And this is happening globally because our customers are global. So, you can term this phase as ‘transformational BPO’.

B&E: What according to you are the major challenges for the future growth of the industry in India?
SK: I think the biggest challenge is the execution of the model. I talked about the ‘transformational model’. How do you execute on it? Today, if you were to manage a client from IT or infrastructure, you have to have specific skills and technology expertise. The old lift and shift thing has changed. With old skills and model,s it’s not possible to deliver the need of the clients today any more. For Indian BPOs, adapting to this ‘global delivery model’ is a challenge.

B&E: What is the current hiring model in the industry? How have you tweaked it to your advantage?
SK: The hiring model has also changed in sync with the growth in the BPO industry. We are not just hiring graduates, as the requirement of the clients have changes. I would put it in this way today that we are doing more with less. We work on a non-linear platform based model, where I have 300 head counts who generate a business of $30 million. It you look at the people model, it would have taken some 1,200-1,300 people for this. So, the number has reduced and this has happened using automation and technological advancement. Today, we hire professionals like nurses, doctors, chartered accountants & post-graduates, because there is a scope for a lot of growth in terms of building a lucrative career. The industry has gone through a phase of consolidation, with major IT companies like Infosys, TCS, et al, making strong inroads into the space. Has it made the growth of independent BPO companies tougher? Certainly the big players in the market pose a challenge for the stand-alone BPOs, simply because the latter do not have the large IT skills and the consulting skills to be able to handle client demands. According to me, they are certainly going to struggle to survive, because most independent BPOs still run on the traditional model, which is inefficient when it comes to delivering on end-to-end processes. I would say that they will either struggle or will adapt themselves to this shift.

B&E: How has slowdown affected the BPO industry’s operations in India? What will be iGate Patni’s strategy in the coming years?
SK: The slowdown has not really affected the market, because expectations of your client in such times increases from you. Definitely, the growth had slowed down and the income had reduced, but you see that there was a constant positive upside maintained. Clients over the time have changed their investment pattern in the BPO market. As I have discussed, they have become more specific. Our focus here at iGate Patni is ‘iTops’, which is Integrated IT and Operations. We integrate IT technology and operations and focus on how we can reduce cost of operations, processes et al for our clients. So, we are neither purely a IT-based model nor a BPO with iTop.

B&E: What are the changes, in term of the way industry works and cooperates over these years? Do you see the sector still delivering on the bullish growth projections that we were used to hearing a few years back?

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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.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

“Attrition has always been there and will be there”

Does the advertising industry follow a set of formal processes for succession planning?
There are two kind of scenarios. When there is an existing management team, which has acquired clients over a certain period of time, then the potentially successors are normally picked up out of all the departments. Just like any other company, there would be two or three people who might succeed and you might not exactly be the shortlisted one. But people who have proved themselves over a period of time are always on the radar. So basically, what we refer to as a second line of defence is always built up like that. On the other hand, if the management structure changes, then it is a different issue altogether.

The quality of people coming in to the advertising industry has dramatically changed over time. The level of commitment is not the same as it used to be. Do you think this is true? If yes, what impact has it had on succession planning?
It is true because a) Advertising today is not the best of businesses that people would want to join. It’s unlike the past when the best of B-school graduates and the most outstanding creative guys wanted to join the industry. Salary structures were much higher then as compared to today. Over a period of time, the best talent has migrated to other industries.

How has migration of talent impacted succession planning?
Not much, because if you are looking at someone from the point of view of succession planning, the assumption is that the guy has been there for 15-20 years because posts like CEOs, CFOs, et al demand a certain level of experience and a proven track record. During this tenure, these people also develop their professional relationships with the client. So there is an equity attached to these people.

Despite being a people driven business, the advertising industry has one of the highest attrition rates. How does it go hand in hand?
Attrition has always been there and will be there. Mainly, the percentages have changed over a period of time. It is not the kind of business where people come to retire in one organization. Secondly, due to certain impressions, people keep on doing parallel moves to take a higher position in another organization. The lack of talent and high demand has resulted in poaching becoming a continuous processes. There is little sense of loyalty in this business.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

“Grooming happens automatically”

What is the general scenario with respect to succession planning in the advertising industry?
We work towards upgrading people according to their skills and capability. In the creative departments, you know who is delivering what at the end of the day. You very well know how good they are at the job they do. We recognise a person based on the idea he gives and the contribution he makes to the campaigns. This is a regular process for us, which I believe is followed in most organisations across the industry. At least in the places where I have worked, there was always a clear structure of who is delivering what and it was purely merit oriented; so if there are people who deliver better work, they will move up faster and they will eventually hold better positions faster. So it has always been very transparent, very clear and merit oriented.

How does the grooming of people to succeed and fill senior positions take place in the industry?
The grooming of successors to senior positions happens automatically. It happens when your people keep delivering work qualitatively. When talking of grooming, your skills are naturally refined on the job everyday. No conscious effort is required to groom someone since. Even if you decide that this guy needs to be groomed, then he may not perform a good campaign next year. Can you say which director will do well next year, or who will win the Oscar next year? You can’t. So it’s a process where every task is a new mountain that you have to climb.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

“Necessity is part of the general evolution”

Do you think succession planning gets its due in the advertising industry?
That is a very broad generalisation, but I think there is a fair amount of succession planning happening. There is a transition at agencies and it’s a mixed bag. Some are looking for people from within and some from outside.

Is succession planning in the ad world as strong as it is in other industries?
It depends on what industry you are comparing the advertising business too. First of all, advertising is a relatively young industry. As an agency goes up in terms of size, succession planning becomes more formalised.

How is it done at your agency?
At our agency, it is very clear. We have the fortune of being a place with tremendous client and people stability. The senior management team of the agency has been with us for almost 10-15 years. That way, it’s a very stable environment. Having said that, we have a very clear structure in terms of succession planning.

The advertising industry is unique in the sense that there is a very thin line between creativity and management. So unlike other industries, the creative guy ends up as CEO. What are your views on this?
I think that’s a very personal choice. There was a phase when only the business managers got to head the agency. I think that has changed over the last few years because today, you have people who have a broader skill set – people like Piyush and Prasoon. In my mind, people who came from different streams became larger than their own area of expertise. This is what makes you a leader – to be able to go beyond just your specialisation.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

“ I feel it’s a mixed bag”

What is the general scenario with respect to succession planning in the advertising industry?
I feel it is mixed. Some agencies have a clear line of future leadership, stated or unstated, while some don’t. I don’t think there is any formal structure.

The quality of people coming in to the advertising industry has dramatically changed over time. The level of commitment is not the same as it used to be. Do you think this is true? If yes, what impact has it had on succession planning?
As a holistic group, we are moving from a depth society to a width society in all forms of professional life. Talent coming in today definitely knows more things than we did. We didn’t know as much but perhaps a bit more thoroughly. It has therefore opened up the criteria for succession planning to multiple options.

If we may take the example of a company like PepsiCo, it becomes clear that there are a couple of people who have already been groomed to succeed Indra Nooyi. But the advertising industry is unique in the sense that a successor is often chosen out of necessity. What do you think are the reasons for the same?
In the case of most marketing/manufacturing industries, the ultimate objective for performance has stayed the same – to increase sales of existing products and to develop new products that sell. In advertising, with the services, products and business models undergoing rapid and huge change, the criteria for succession keeps shifting constantly.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

Making the ‘Inside’ matter

By working with end product makers across 5 screens, Dolby seeks to move beyond its image as a sound technology for theatres. Will it be able to make the cut in a relatively dormant market?

They define it as the one campaign that dramatically raised the status of Intel from being a component manufacturer to a powerful B2C brand. Thanks to that campaign, even the most technologically challenged of consumers ask whether a computer has an ‘Intel Inside’ before buying.

Intel’s success has several positive lessons for similar brands in the industry. The case of Dolby Laboratories in India is somewhat similar, albeit with a twist. The company, which posted a revenue of $955.5 million (growth of 3.5% yoy) and a profit of $309.27 million (growth of 9.1% yoy) globally for the financial year ended November 2011, is already a known name in India. Thanks to their short, yet impactful, commercial at the beginning of every movie, of us cine-goers are well aware for years that our movies generally have ‘Dolby inside’! The company in fact did a survey some time back and found that the brand recall factor in percentage terms was in the mid to high 80s.

Surprisingly though, the Dolby people haven’t really moved beyond that positioning for the past several years in the country. More recently, they have decided extend their presence to 4 more B2C spaces – TV, mobile (including tablets), PCs & gaming.

Dolby in itself is a well differentiated player in the business of surround sound technology. The real problem that exists is with perception of the technology itself, rather than the competition. Ashim Mathur, Head-Marketing, Dolby India, comments to 4Ps B&M, “While Indian users have moved quite far with awareness of picture quality – from B&W to CRT colour to flat to LCD to plasma – sound quality is normally taken for granted.”

For now, the most exciting prospect for Dolby in India is TV and home theater, and they are particularly excited about the trends in this space with respect to HD (High Definition) TV. HD-DTH penetration pan-India is likely to reach 1% (110 million C&S households) and more than 10% of urban C&S households by 2012, which is expected to be an inflexion year for the sector (Kotak Securities report). A lot of HD content is being produced by channels like Star and there is regional HD content as well. Dolby provides the software in terms of HD content production, dissemination and also the playback device or the TV. Just like Intel, it is doing some co-branding with brands like Star TV, Airtel DTH and Panasonic; telling consumers that the products/programmes of these players use Dolby surround. On the home theater front, the penetration is still abysmally low. Ashim asserts that price is not the factor, as a number of people are buying TV sets in the range of Rs.50,000/- or so, and at least one in five would agree to spend Rs.15-20,000 more in enhancing the overall experience. The real problem is awareness and appreciation of the experience, which is a challenge for Dolby itself as mentioned earlier.

Dolby is approaching this problem largely through working with brands extensively. They are involved in selling the idea of Dolby to these players, training their staff in every aspect of Dolby technology and improving visibility of the technology. Besides, they are setting up demo areas in large format stores where customers are asked to experience Standard Definition TV without Dolby Surround in one area and HDTV with Dolby Surround in the other, so that they can appreciate the difference. The company is exploring PR and online media as opposed to TV, as the building awareness and appreciation is considered more crucial in the initial stages. Once they start gaining traction with Dolby enhancement features in mobiles and PCs, they plan to go pan-India more aggressively.

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Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
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