In our view, this credit crisis is just a financial sector crunch, not an economic Armageddon

IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES

All of those dislocations came, wrecked havoc and eventually got cleaned up by market forces with some form of government intervention. Without question, that will happen this time around too, most assuredly because the underlying global economy is so fundamentally strong. Yes, it may be entering a period of slower growth, but thanks to record levels of economic interdependence and activity, it is more resilient than ever. Which is why now is the perfect time to take the big swings. The rewards can be huge, even disruptive – in the best sense of the term. Case in point is Bank of America’s recent $2 billion investment in Countrywide Financial Corp., a leading mortgage banker that was facing a liquidity and credibility crisis. The deal not only delivered short-term paper profits to Bank of America, it allowed BofA to leapfrog its way into the mortgage business and opened the gateway to a flood of new deposits. In one fell swoop, Bank of America expanded its market share and enhanced its industry profile, basically changing its competitive position.

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Source : IIPM Editorial, 2008

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

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All for the hubble-bubble…

This pure silver hookah offered by the Central Cottage Industries looks more like an antique artefact than a narghile! Inspired by the Mughal gharana, the hookah has an in-depth urn to store more water and the beautifully adorned flexible pipe only adds to the wonderful experience…Smoking could never be more stylish! Price Rs 1, 00, 000.

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Source : IIPM Editorial, 2008

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

Holds candles and class...

Once you have a look at this 6 kg silver candle holder, you’ll know why there is nothing that can ‘hold a candle’ to this magnificent piece! Standing tall, this grand object of desire has enormous holders enough to hold at least 20 candles and has been designed to match with the big halls and atriums. Grab this from Bankura Silver and let the holistic light sparkle your life. Price Rs. 2, 00, 000.

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Source : IIPM Editorial, 2008

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

Drink to your health!

Ion Exchange, a pioneer in water treatment technologies in India is up with yet another innovation – the Zero B 7-stage water purifier with a 7 stage heptapure technolgy, a super-advanced RO system. Equipped with a QC Filter, a Sediment Cartridge, a Bacteriostatic Activated Carbon cartridge and Reverse Osmosis membranes, the purifier gives out the safest drinking water. Price Rs. 14, 990.

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Source : IIPM Editorial, 2008

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

Oh baby, let’s hold hands!

A tiny wiff of consolidation in the air, but... After aviation, a hint of consolidation has appeared in TV channel space. With the idiot box swamped in a deluge of tiny, niche channels, marketers have hit a new way to club resources and benefit. Star India Pvt. Ltd. and Broadcast Initiatives Ltd. (of the Adhikari Brothers fame) have collaborated, so that the latter has leased out its ad sales function for Live Today, a Hindi news channel (earlier known as Janmat) to Star India. In as much, Star network which was earlier running distribution errands for channels like Disney and Hungama, has taken a leap forward by offering its formidable strength in ad sales to a channel outside the Star bouquet. Yashpal Khanna, Senior VP, Star Networks asserts: “This is a pilot project and the success or failure of it will decide our future alliances to share marketing assets. We plan to add Live Today to our existing ‘package’ of assorted channels.” The move will also help Star India expand into a profitable sub unit. For Broadcast Initiatives too, the deal is a win-win proposition, as it would help them gain an initial ad base, without incurring requisite marketing expenses. Tagging along with a big brother in the industry will get them ‘visibilty’ and ‘people’s expertise’, which the nascent media house couldn’t possibly attract on its own at this stage. “But, in the long run, it makes sense for Live Today to invest in setting up its own infrastructure,” suggests media analyst, Rajiv Tewari. Wonder where these baby steps of consolidation will ultimately lead...

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Source : IIPM Editorial, 2008

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

National advertisers

National advertisers, who till now had been singing paeans of the mass market reach delivered by TV and print have, of late, begun to realise the importance of radio as a secondary medium. Though in the recent past, there has been an increase in the contribution of radio in the total advertising expenditure, but it still stands at a meager 3% (Rs.5 billion in absolute terms) of the total ad pie of Rs.163 billion in 2006. In stark contrast, globally radio has a much higher 8.5% share in the total ad pie (according to an SSKI India report). The antithetical figures only go to prove that radio is still a largely unexploited medium in India, brimming with tremendous potential. However, this is not to say that popularity of radio as an advertising medium is all set to explode overnight. In fact, for the next few years, chances are that local advertisers will continue to remain the major revenue generator for the medium. And the challenge for this sleeping beauty will be to deliver a sixer for the local guys, hence proving her power to national players, who are still skeptical before betting big on radio. Will this ‘sleeping beauty’ live up to this second awakening, as beautifully as she did it the first time round? Stay tuned!

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Source : IIPM Editorial, 2008

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

Regional campaigns

Sample this: A slew of regional campaigns on radio like the Shivaji-Rajnikanth contest on Radio Mirchi in the South did well and boosted the movie’s performance. Similarly Haldiram’s ads in West Bengal are doing rather well. Retail giant Big Bazaar also is effectively using radio to lure the local janta. Today, major local advertisers on FM are malls, jewellery shops, real estates, saree showrooms, educational advertisers, restaurants, automobile dealers, multiplexes and FMCG brands. predictably, when it comes to wooing national advertisers, the trophy rests with those radio channels that boast a national reach – Radio Mirchi, Radio City and Big 92.7 FM, to name a few. These radio stations with a national network obviously find favour with big-ticket national advertisers like telecom companies, banks, insurance majors and even mutual funds. Radio channels that have only a regional reach, on the other hand, have to be content with small (but abundant) local advertisers for the most part. However, this trend too is likely to see a shift, as national advertisers begin appreciating the personal, one on one contact that regional and local radio stations have begun establishing with listeners.

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Source : IIPM Editorial, 2008

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

BRAND: Sony Ericsson

HEADLINE: I love waking up to FM
BASELINE : NA AGENCY : Saatchi & Saatchi
4Ps TAKE : With ear-plugs in place, the reigning heartthrob of Bollywood Hrithik Roshan (okay, he may not be very visible on the silver screen these days, but he’s all over the purple backdrop of this ad at least!) is a treat for sore eyes! And of course, you just can’t miss what he’s endorsing: Sony Ericsson’s K220i and J120i mobile phones! The USP is the FM alarm: wake up to the sound of music. The body copy lists the additional features: the VGA camera, FM radio, stamina battery, et al of both the models-K220i and J120i. The clinching benefit to the brand is obviously the great value for money package: mobile phones loaded with features but priced at nominal rates of Rs.3,995 and Rs.2,345 respectively. Targeting music lovers, the headline, ‘I love waking up to FM’ reiterates the USP of the product. Time to wake up, guys!

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Source : IIPM Editorial, 2008

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

BRAND: Honda City ZX

HEADLINE: We met the
future yesterday.
BASELINE : Outperform
AGENCY : Dentsu Marcom
4Ps TAKE : Honda’s driving down the high-technology path! In this ad, the auto giant brags about its futuristic technology feature: E-10 (10% ethanol with petrol) compatibility that leads to better performance on the road – along with superior driving comfort. That being the USP, the single-minded focus is to depict how Honda keeps track of technology; what’s more, the communication talks about how the brand specializes in anticipating future technology! ‘We met the future yesterday’ is brilliant positioning in an age when everyone is riding the tech wave! The body copy informs that E-10 compatibility is not only inherent in its Honda City ZX but has been used it in the Civic, the Accord and the CR-V, thereby broad basing the brand appeal. The visual immediately catches the eye: a silver Honda City ZX looking quite majestic! Such communication will ensure that Honda ‘outperforms’ – and streaks ahead of the rest!

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Source : IIPM Editorial, 2008

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

BRAND: Tata Indicom

HEADLINE: The big daddy of
mobile phones meets the...
BASELINE : Switch to Tata Indicom. And experience the difference.
AGENCY : FCB Ulka
4Ps TAKE : Now, why would Tata Indicom be saying a big ‘Hello’ to Moto? Because this is a cross-branding exercise – and this ad proves that two heads are always better than one! The power idea is to introduce the sleek, slim and Internet-enabled Moto-Q in the Indian market and at the same time promote Tata Indicom’s mobile services too. Targeting busy professionals (Internet and mobile users) who are on the move, the USPs are the multitasking functions (thanks to Tata Indicom!), as also the Moto-Q tag of being the world’s thinnest Smartphone with the QWERTY keypad. The headline – ‘Big daddy of mobile phones meets the mother of all laptops’ – is effective: great marriage! Even the visual is appealing with foreign faces (conveying the global dimension of this co-branding exercise) and the life-size sleek Moto-Q occupying centre stage. The rewards to the prospect are, of course, the Tata brand name reinforced by the Motorola tag. A mobile plus a laptop – talk about a double whammy!

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Source : IIPM Editorial, 2008

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

‘Playing safe’ is in...

...or is it Indian pharma’s new mantra?
Small is passé! Who says?! In an era of mega real estate property sale, wide-body aircraft launches and of course, colossal deals being closed globally, how can one lay a wager on anything minuscule?! But somehow, Indian pharma honchos seem to bet on ‘small being beautiful’, and have started looking at small acquisitions; so much unlike big ticket targets they were eyeing just a year back! Yes, out of the 21 coup d’états by Indian drug makers during the past year, a thumping 85% were valued between just $25–$100 million – puny when compared to gargantuan acquisitions like betapharm, Terapia and Taro made by Dr.Reddy’s, Ranbaxy and Sun Pharma respectively in the pre-2007 days! So, have Indian pharmas lost their appetite? Or is it their small size (when compared with global behemoths) that’s forcing them to? As a resopnse, Anindya Acharya, Deputy Director, Drugs and Pharmaceuticals, CII snaps, “No! It’s a well planned strategic move by the Indian pharma companies, targeted towards bettering their portfolios by entering certain niche segments rather than gobbling the entire portfolio of the prey.” Sounds convincing... until you look at a recent study by PwC. “Capital constraints can be a significant brake on growth for domestic pharma companies. About half of all the companies surveyed might be looking for deals if funding obstacles could be overcome,” the report stated. Whatever be the reason for softening of India Inc.’s motives, things look well in control at the moment. At least, the madness of going global for the sake of doing so appears to be over... or atleast we hope!

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Source : IIPM Editorial, 2008

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

Milk outlets

“This milk will be utilized for our milk outlets in our marts & we will also be offering fresh milk based products produced then & there. On one hand, this is linking up farmers by providing them a market; on the other hand, it’s offering high quality products to consumers,” Raghu Pillai, President & CEO, Operations & Strategy, Reliance Retail Ltd.. Not to be left out, even Bharti and the cola majors Coca-Cola and PepsiCo have spelt out their plans. So on one hand, it means more organized dairy business with small-scale dairy owners benefited, but at the same time, it also means gradual undermining of unorganised players. Of course, the eventual long term winners in this dairy game will be the ones who can effectively address the concerns on both the demand & supply side. But for customers, it’s a virtual bonanza, as it means that they can have their milk & drink it too!

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Source : IIPM Editorial, 2008

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

Justice to its dairy

Being a company with diversified interests, HUL has not been able to do justice to its dairy division. Affirms, P.L. Kaul, President, All India Food Processors’ Association, “The dairy business is growing at more than 40% and more and more MNCs will sustain to dairy as a driver of their food venture. Soon this sector will create many new products, which Indian consumers could hardly think about.” Such innovation has already begun with Nestlé & Amul recently venturing into the probiotic market. But such innovations are not only limited to product launches. With the non-stop organized retail revolution happening in India, dairy is going to evince many structural reforms. With the entry of Indian retail giants like Reliance, the dairy business is going to evince a sea change in the traditional marketing prevailing in the Rs.3.6 trillion Indian foods & beverages market. Reliance is looking to procure seven lakh tonnes of milk every day by 2008 end, through its 1,000 direct collection network in Punjab & is planning to expand such procurement hubs in Rajasthan & Andhra Pradesh.

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Source : IIPM Editorial, 2008

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

The krishna without a flute

Srikrishna Commission report that had probed the violence in Mumbai during the 92-93 riots, explicitly states that “The response of police to appeals from desperate victims, particularly Muslims, was cynical and utterly indifferent. On occasions, the response was that they were unable to leave the appointed post; on others, the attitude was that one Muslim killed was one Muslim less... Police officers and men, particularly at the junior level, appeared to have an inbuilt bias against the Muslims, which was evident in their treatment of the suspected Muslims and Muslim victims of riots. The treatment given was harsh and brutal and on occasions, bordering on the inhuman... The bias of policemen was seen in the active connivance of police constables with the rioting Hindu mobs, on occasions, with their adopting the role of passive on–lookers on occasions, and, finally, their lack of enthusiasm in registering offenses against Hindus even when the accused was clearly identified and post-haste classifying the cases in ‘A’ (True but not detected) summary”

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Source : IIPM Editorial, 2007

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

copyrights till now

Copyright has its beginnings in the 16th century when Mary I, the reigning English monarch, granted monopoly and censorship powers to the Stationers’ Company under which though, no royalties were paid to the authors. This monopoly expired in 1694 and was eventually replaced in 1709 by the Statute of Anne, regarded as the first modern copyright law. The Stationers’ Company did not easily accept the Statute of Anne since it reduced their power and their profits. Since then, similar laws have been passed in most nations. With the Digital Millennium Copyright Act (DCMA) of 1998, in what can only be interpreted as an effort to preserve profits derived from lucrative but about-to-expire copyrights and to protect profits from the threat of peer-to-peer distribution of music via Napster & similar Internet services, entertainment media distribution companies forced an extension to American copyright law and a broadening of its terms to include criminal penalties for its breach. Today, copyright laws are not about safeguarding motivations to create as is frequently claimed by entertainment companies but about preserving profits from a business model that has become obsolete with the Internet.

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Source : IIPM Editorial, 2007

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

Stalk exchange?!

For now, OMX is all Nasdaq has...
National boundaries are passé; even ‘companies’ apparently seem outdated when it comes to M&As. If this still sounds strange, consider how Stockholm- based OMX stock exchange (with 791 companies listed & a daily turnover of $7.49 billion), the largest in Europe aft er Euronext & LSE is making matters worse between NYSE & Nasdaq. For Nasdaq, to watch NYSE walk away with the $14.3 billion Euronext only rubbed salt into its wound. Worse, despite having raised itd bid for LSE to $5.3 billion, its attempt for almost two years now has proved futile a big setback indeed!

But as they say – ‘some never learn’, Nasdaq is now eyeing OMX as H. Furlong Baldwin, Chairman, Nasdaq noted, “At Nasdaq, we are privileged to be partnering with such a reputable institution as the OMX…” Nasdaq also sold it 31% stake in LSE for $1.6 billion on August 20, 2007 as a proactive move as it knows that OMX will cost more than its May 2007 bid of $3.67 Billion – all thanks to Dubai Stock Exchange’s $4 billion bid for OMX.

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Source : IIPM Editorial, 2007

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

Missing skill!

Lack of vocational colleges
While we continue celebrating India’s economic resurgence, what oft en gets ignored is the question, whether our future workforce would be skilled enough to tap global opportunities. The widening gap in skills, signals the tremors of coming ‘jobless’ nature of the economy. As per the World Bank, the growth in employment in the formal sector is merely 0.6% while in the informal sector it is 1.1% annually. The crucial fact that needs attention is that over 93% of India’s total workforce is involved in informal sector. Consider this: India has only 5,100 Industrial Training Institutes and 1,745 polytechnics colleges and its vocational colleges has 171 low quality specific skill or subjects while more than 1,500 highly skill subjects are covered in similar colleges worldwide. Add to it, the outdated syllabus and license raj like centralised control system. While a globalised environment would exponentially increase job opportunities in the informal sector, it is to be seen whether our polity has the vision to frame policies for tapping such opportunities by qualitative & quantitative enhancement of vocational training system.

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Source : IIPM Editorial, 2007

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

Evil prevails...

and opium too in Afghanistan
The relationship between Afghanistan and opium dates back to time immemorial. While terrorism has destroyed the country, it is perhaps drug which will wipe out the nation from the world map Production of opium is growing frighteningly & even defeat of Taliban has not reduced its production. It has a shocking 193,000 hectares under opium cultivation which produced 8,200 tonnes of opium this year, which is a 34% increase over last year. No other country in the world has ever cultivated on such a deadly scale. Close investigation has indicated that opium production in poverty stricken central & northern region is decreasing while that of in rich southern region has detonated to an unprecedented level. Five provinces from south supply 70% of total opium while Hilmand alone provides 50% of country’s production. It is easier to drop missiles and kill a few perpetrators but more difficult to change a way of life and lure of easy money which is imbibed in a civilisation for centuries. Perhaps NATO and the US are learning it the hard way now.

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Source : IIPM Editorial, 2007

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

A perfect blend of sitar and violin...

On August 28th, Delhi swayed to the melodic performance of the acclaimed pop classical violinist Vanessa Mae. The show began with the notes of the sitar maestro Ustad Nishat Khan and a musical piece by the young prodigy Vanessa, followed by the much awaited jugalbandi between the renowned sitarist and the talented violinist. Sponsored by Seagrams 100 Pipers pure music, the packed auditorium and the cheering crowd were enough to give a ‘thumb’s up’ sign to the organisers. Bestowed with thunderous applause at the fall of the curtain, this perfect combination of talent and glamour definitely succeeded in making a mark among the music lovers of India as well.

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Source : IIPM Editorial, 2007

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

Holcim in love with India

Someone has rightly said that real heaven lies in India. And to vouch for it, we have no other than Markus Akermann, the man at the helm of Holcim – world’s leading cement company, straight from the lands of world’s most beautiful country, Switzerland. Akermann in no time cracked the brass tacks of Birla Cement empire via taking controlling stakes across couple of companies. Currently, he is making his company’s foundation more firm in the country. The company plans to acquire 3.9% of Ambuja Cement Ltd. (ACL) at Rs.154 per share, in total for $220 million, from the founding families of the company. This buyout will also cross the limit of 5%/FY for Holcim. Therefore, as per the Indian takeover code, the company is making a 20% open offer to the public @Rs.154 per share and in total for $1.12 billion will be pumped for this.

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Source : IIPM Editorial, 2007

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

Turn a pro with Intel power!

The new vPro chip technology has been launched by Intel Corporation. A platform technology, vPro is a compilation of chipsets, a Core 2 Duo processor and other elements. Centrino, introduced in 2003, was Intel’s first platform technology. vPro ensures security of business personal computers in an enhanced manner, that entails filtering and defending against possible virus attacks. This advanced platform allows turning on and turning off desktop PCs which are on the company network, despite hard disc failures or corruption of the operating system. The list of PC makers that are selling Intel vPro desktops and notebooks in include HP, Lenovo & Dell. It appears that Intel is now indeed innovating to keep competition at bay. With arch rival AMD already doing much to gain market share in the US and other Intel strongholds, there is no way out!

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Source : IIPM Editorial, 2007

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

Who would bear the losses, eh?

Sprint Nextel Corp. is in a position to lose a $2 billion investment in a new phone characteristic, if a court blocks Qualcomm Inc. from making the required chips. Qualcomm executives have intimated the court that there will be huge losses due to it. Qualcomm rival, Broadcom Corp., has asked US District Judge James Selna in California to eternally bar its rival from making chips enclosed by three Broadcom technology patents after an 18 month phase out period. A board of judges found in May this year that Qualcomm invalidated the patents, including one associated to walkie-talkie technology that Sprint plans to imbibe in phones in the first quarter of 2008, known as the QChat.

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Source : IIPM Editorial, 2007

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

Pre- Clinton methodology

To top it all, consider 2.6%, 2.0%, 2.5%, 0.6% & 1.9% – a string of five quarters of below 3% growth, which has only happened 12 other times in the past 60 years. One can go on and on with statistics. But, the figures would appear to be even more disappointing considering the fact that all official indicators by the Federal Reserve, like employment, inflation et al run counter to the day to day experience of a common man! Take inflation for that matter, John Williams, an economist & specialist in government economic reporting calculates the Consumer Price Index (CPI) based on the pre- Clinton methodology and according to the methodology of the 1980s (no hedonic adjustments for quality improvements in manufactured goods & different weighting of the CPI basket of goods & services). According to him, adjusted to pre-Clinton Era methodologies, annual inflation was about 6.2%, in March and reset to the methodology of 1980, the SGS Alternate Consumer Inflation Measure rose to 10.2% in March (see chart to your right). US is perhaps already in recession, sans an honest admission by the Fed. But one must give them due credit for putting up a brave face, backed by a barrage of ‘cooked up’ statistics

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Source : IIPM Editorial, 2007

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

Anil appears most vulnerable

It is in the power sector that Anil appears most vulnerable. There is the uncertainty hovering over this sector because of the inability or unwillingness of state governments to reform and revamp the state electricity boards. Without this revamp, power generation remains a financially risky proposition because bankrupt boards simply do not have the cash to pay for the power that they purchase. But a bigger strategic threat, as mentioned earlier, is gas. When the brothers split, it was agreed that Mukesh-controlled Reliance will sell Godavari gas to Anil-controlled RNRL at $2.8 per mmbtu. The Ministry of Oil & Gas has put a spanner in the works (Anil camp loyalists say it was done at the prompting of the Mukesh lobby) by ruling that the price is too low.

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Source : IIPM Editorial, 2007

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

Astounding patriotic commitment

But what kept Kihachiro and his team slogging on with an astounding patriotic commitment was the fact that Honda had drilled into this team that it was purely their vision, and not any other senior’s vision, that was going to determine how Honda fared in the US. In other words, the organisation was committed to zero vision at the top, but at the same time, passionately nurturing magnanimous vision at the level just below. The trust that the corporation placed in Kihachiro resulted in Honda capturing a mind boggling 50% of US market within ten years of entering its shores.

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Source : IIPM Editorial, 2007

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