Savreen Gadhoke puts the big question to the man himself... How?

Evergreen entrepreneur C. K. Ranganathan has gone down in golden letters in way too many management books because of the manner in which he beat heavyweight multinats to become India’s sachet king. Now he is looking to shed CavinKare’s regional positioning to reach out to a pan-Indian urban audience.

The year 1983 was a watershed of sorts for the underdog. On one hand there was Captain Kapil Dev who took the sensational catch to dismiss the dangerous Viv Richards, taking underdog India closer towards its historic World Cup win at Lord’s; and on the other, there was Nirma, a local FMCG player that had only just begun to make deft inroads into the detergent powder market, which till then was considered the sole bastion of the all-powerful multinational Hindustan Levers and their popular detergent Surf. The brainchild of Karsanbhai Patel, Nirma completely revolutionised the detergent powder segment with its ingenious pricing and swept the lower end of the market. The battle between Levers and Nirma continued for two decades, but around the turn of the millennium, eventually the deep-pocketed MNC won. As per the Centre for Industrial and Economic Research (CIER), by Y2K Levers had overtaken Nirma in brand awareness in rural households with 88% penetration as compared to Nirma’s 56% penetration. Nirma had clearly lost out to its muscled multinat rival.

Not every domestic FMCG player suffered the same fate as Nirma though. Around the same time as Nirma was taking the winds out of Surf’s sail, another domestic FMCG company was upping its ante. By 1985, through a reverse merger with Vidogum Limited, Dabur (once a small time pharma company) became a public limited company. Over the years, Dabur successfully entered the healthcare, personal care and foods businesses taking some of the sheen off its MNC counterparts. Unlike Nirma, the Burmans of Dabur turned over the company to professionals in 1998 and reached the magical turnover of Rs.1,000 crore by the turn of the century, leaving behind its small beginnings forever. In segments like shampoo and juices today, the Rs.112 billion Dabur Group continues to give sleepless nights to multinats like HUL and PepsiCo respectively.

This brings us to India’s third home-grown FMCG company, CavinKare. Interestingly, CavinKare too has an inextricable association with events that took place in 1983. At a time when HUL was busy fighting Nirma in the detergent market, little did the MNC know that in a lesser known town (Cuddalore) in Tamil Nadu, a young entrepreneur had taken it upon himself to transform the nation’s shampoo market. With Rs.15,000 in hand, C. K. Ranganathan, now famously called India’s sachet king, launched his Chik shampoo sachets in 1983. Ranganathan did not have deep pockets and so distributors were reluctant to stock Chik Shampoo. So he thought ingeniously, approached bicycle hirers and inspired them to become entrepreneurs. Initially, Ranganathan collected a demand draft of only Rs.2,000 from these bicycle guys in lieu of handing over bags full of Chik shampoo sachets to sell in rural Tamil Nadu. But in no time the demand draft’s grew to Rs.5,000 and then Rs.10,000. By 1992, Chik Shampoo had become the market leader in South India’s shampoo market. By the time FMCG multinats got wind of the sachet revolution in the hinterland’s, Ranganathan had already swept the market.

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Source : IIPM Editorial, 2010.

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

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With over 90,000 members MHRIL is set for big move, but the road ahead is bumpy, says Neha Saraiya.

Nevertheless, you enjoy your holidays, that’s all they want...

“Yes, the land is under litigation. But we are staying crucial financially. As we think we have a very strong case in Munnar property and above all we are proud of our resort as it is the first resort that we had set up,” gushes an effervescent Ramesh Ramanathan, MD, Mahindra Holidays and Resorts India Ltd (MHRIL). (For those who don’t know much about the whole episode, on July 3, 2007 an order was passed by the Sub-Collector, District of Devikulam canceling the assignment of the Munnar land to the company stating “it as an agricultural land.”)

But then the days have changed, today MHRIL has a rock solid number of members, 91,997 (as on May 31, 2009), and the list is growing at a CAGR of 32%. What’s more interesting is that the same Munnar resort now contributes around 2.17% to the overall revenues of the company (FY ‘09).

However, what has done a wonder for this holidaying arm of the Anand Mahindra Group is its unique business model. The company has an integrated model, which takes care of all its operations – marketing, acquisition of land, servicing of clients, providing value added services, and resort operation et al – under one entity. Thus this mixed business model not only enables the company to tone down the cost of operations considerably, but also provides an edge when it comes to adoption of a change. Probably that’s the reason for which the recent downturn that left all major hospitality players in despair, could not dent MHRIL much.

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Source : IIPM Editorial, 2010.

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

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Others’ hifaazat may also spell success...

4Ps B&M: Can you elaborate on your rural strategy? What proportion does rural business account for in Bajaj Allianz Life Insurance?
AM: The rural business has its own challenges in terms of acquisition cost and service delivery mechanism. As per the regulators, certain amount of business has to be from rural areas each year and we have been achieving this every year.

4Ps B&M: What was the idea behind the ad campaign “Safety Hai to Sab Hero” and the Ghajini TVC? How has been the response so far?
AM: Both these call campaigns have helped get instant recall to the brand. Also these campaign have instant connect with the mass audience as they were very topical in nature.

4Ps B&M: What have you done during last six months in terms of your marketing and how has been the response to it?
AM: The last six month saw brand Bajaj Allianz being a highly visible brand. We have carried on a communication strategy to be highly visible and remembered. We are very happy with our improved brand recall. Bajaj Allianz today is a popular brand and features in the top 50 service brands. Recently Bajaj Allianz has unveiled its new campaign ‘Jiyo Befikar’. This is the first campaign by Bajaj Allianz that directly emphasises the brand and not the products they offer. It highlights Bajaj Allianz’s promise to give you Hifaazat (protection) by enhancing your financial opportunities and protecting you and your family from all risks. This campaign also incorporates the new tag line – Bajaj Allianz Insurance, ‘Jiyo Befikar’. This deliberate shift from functional communication to a more expressive communication based on real life situations, has been developed on the basis of various consumer insights and research. These insights clearly revealed that there is a need to create a much stronger connection with Bajaj Allianz’s target audience.

At Bajaj Allianz, we believe in staying by the consumers’ side at every stage of his life and this translates into our new positioning. The new brand television commercial conveys these emotions through real life situations of people living carefree because they are protected by their loved ones. Conceived by M&C Saatchi and shot by Dungarpur Films, this film’s lyrics have been composed by none other than Oscar winner Gulzar, while the music has been composed by Vishal Bharadwaj and the song is sung by Sukhwinder Singh.

4Ps B&M: What innovative products do you plan to come out with in the future?
AM: Bajaj Allianz has launched several innovative products keeping in mind the needs of the customers. Some of them are – Capital Shield, Protection Plus. We have recently launched a sub-brand for women and child products under the name – Miss Confident.

4Ps B&M: A host of banks and others have evinced keen interest in setting up insurance ventures. Do you think this will lead to overcrowding?
AM: The Indian market is huge enough to accommodate a number of players. India had over 220 insurance companies prior nationalisation in 1956. At that time due to lack of control and lax regulations the sector could not be monitored as it is now. More number of players would only benefit the consumers and at the same time puts the existing players on its toes to perform better.

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Source : IIPM Editorial, 2009

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

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Rakesh Bharti Mittal, VC, Bharti Enterprises

“Indian retail has emerged...”

4Ps B&M: Bharti joined hands with Del Monte four years back. Why did it take so long to launch the Del Monte range of processed food?
RBM: When we tied up with Del Monte, the aim was to take Indian fresh fruits and vegetables to the international market and make India a global food hub. While we’ve managed to achieve that, we thought this was the right time to introduce our own range of processed food. The Indian organised retail has really emerged and the Indian economy too is on an upward swing. Our range of processed food will cater to the increasing consumer needs.

4Ps B&M: You are importing products and not manufacturing them in India. Won’t it add to cost pressures?
RBM: We’ve a manufacturing facility in Bangalore from where we are sourcing processed mango and guava. We’re also setting up a plant in Hosur in Tamil Nadu and plan to start production from there 2010 onwards. I don’t think there will be any cost pressure as we’ve good relations with our suppliers and moreover we will be providing international quality to our consumers.

4Ps B&M: What’s your vision for this range?
RBM: We’re already the largest exporter of fresh baby corn in India. I see ourselves as one of the top 10 players in the next five-six years.

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Source : IIPM Editorial, 2009

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

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SUBRATA DUTTA, COO, SAMSONITE

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1. Amul billboards

2. Hutch’s ‘Where ever you go, our network follows’ campaign – in a very simple way, the brand conveyed the entire brand offerings, which till then no other telecommunication company had done.

3. Nirma’s ad campaigns launched in 2002 – the campaign had a high brand recall in rural areas

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

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Kerela’s bucolic symmetary

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Brand: Kerela Tourism
Agency: Stark Communications

Be it for its backwaters, Ayurveda or Mohiniyattam, Kerela has invited tourists from across the globe for decades. These already favourable winds enabled the agency to come up with the God’s own country campaign in 2000. The tagline gave Kerela a life of its own. As the campaign gathered momentum, the number of tourists grew. In 2005, 3.45 lakh international and 59.46 lakh domestic tourists visited Kerela. Next, Kerala Tourism signed up ace cinematographer Santosh Sivan to direct its campaign. Not only did this one work wonders for the brand but also a few others (like the ‘Rain, rain, come again’ print ad) which wooed potential tourists in certain West Asian countries

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

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Namita Chhetri, CEO, ICMR, Planman Consulting, disagrees

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If proof of the pudding is in the eating, then Tamagawa is putting his words into action. Walk into a Sony shop and you’ll realise that for one, the company has changed the branding of their exclusive retail stores – Sony World – to Sony Centre, brushed up their brand shops and upgraded their displays, ways of demonstration and even the quality of floor salesmen to world standard level. Tamagawa claims that these moves would provide new shopping experiences to the consumers that cannot be availed of in any other consumer shop in India.

Strangely, despite the recent excise duty cut, Tamagawa says Sony just might increase its product prices, “If the current exchange rate continues or further declines in FY09, we may not be able to avoid a price increase. Furthermore, the duty structure of India is still very high compared to other countries, and the consumer is the one who pays this high tax. The government should consider a reduction in the duty structure as a means to stimulate consumer demand.”

Namita Chhetri, CEO, ICMR, Planman Consulting, disagrees, “The real killer of all these glorious attempts of Sony is not the duty structure but Sony’s refusal to understand that providing consumer finance drives consumer sales in the Indian electronics industry!” There seems some sense in the logic as, while the industry average for financing products is at 40%, Sony India finances only a measly 5% of its total product sales.

At the end of the day, the fact is that Sony was the first foreign company to be allowed into India with 100% FDI. And it’s certainly not going to be the last. Unless Sony fortifies its consumer loyalty levels, rising competitive pressures and reducing duty structures might see a day when Sony ends up getting the shorter end of the market stick, both in differentiation and in price.

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Source : IIPM Editorial, 2009

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

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Articulate & savvy, the Cookie Queen speaks...

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4Ps B&M: The Danone controversy is resolved. The mood at Britannia?
VB: The mood in Britannia is driven by our performance and results and is upbeat because we have seen profitable growth. The shareholding pattern of Britannia does not impact our strategy in the profitable pursuit of growth.

4Ps B&M: You’ve worked with various MNCs across continents? Which one has been your favourite stint?
VB: (Laughs) Its very difficult to choose one. They’ve all been my favorites because there were different challenges in different markets & different companies. In some places it was about increasing the overall market because we were category leaders. In others it was a greater competitive focus. In Britannia, the task was different. I had to ask myself, what can I do with a brand that already has tremendous equity? So in each company, I had different sets of opportunities and challenges and I enjoyed each stint.

4Ps B&M: What has been your strategy for Britannia?
VB: Quite simply, about how to sell more biscuits, bread, dairy, et al, to more people in more places. Naturally, the questions you ask yourself are different. How to make biscuits an impulse purchase product? What are the personal consumption traits of the consumer? How to activate the brand at the point of sale, how to create a diversity of packages and price points, how to create operational excellence, both at the back-end and front-end, how to leverage the financial, marketing and technical strengths of the company to create a competitive advantage. The answers to these questions formed a path for me to follow and approach the market strategically.
4Ps B&M: You’ve implemented many structural changes at Britannia. Did you encounter resistance?
VB: Whenever there is a change, there is bound to be resistance, some people chose to leave, and they did. We brought in a lot of fresh talent and capability. But the important thing is when you are open about change, you can count most people in. For me, it was about creating an energetic, open & transparent environment, where people were inspired to do best work. That meant creating formal and informal channels of communication, making myself and the leadership team accessible to all. You’ll notice that anybody can walk into my room here or send me an e-mail or SMS and everybody gets a response.

4Ps B&M: How have these structural changes boosted Britannia’s growth?
VB: Apart from the 20% plus compound annual growth we have seen in the last three years, we have significantly increased our capability across the board. For example, in the last two years, we filed three new technology patents, outpaced the industry in innovation, won several awards for our products and advertising. We’ve doubled our bread, cake and rusk portfolio. Our dairy business is worth approx. Rs.200 crore today. We also acquired new businesses overseas.

4Ps B&M: Experts say Britannia lacks aggressiveness. Comment.
VB: Results drive reputation. If 22% growth is not aggressive, then I don’t know what aggression is. Isn’t having the largest product portfolio in the industry, out-pacing market growth and taking bold and responsible steps like removing trans-fats and fortifying 50% of the portfolio, aggressive? Also Britannia was one of the eight companies world-wide recognised by Time and Bill Gates as an example of Creative Capitalism. I think people get more enamoured by form rather than actual substance.

4Ps B&M: Plans for the coming year?
VB: The main driver of growth in 2009 will be superb execution right through the value chain. New launches in the coming financial year will also continue to drive growth. We’ll focus on a mix of brands, packs, geographies, categories and price points to deliver profitable growth. Our credo is everyday consumption – Marie is for morning tea, bread & cheese is for breakfast, NutriChoice is for the adult tiffin – and we’ll continue to enrich our portfolio with products that are healthy and delightful across bakery and dairy spectrums, different price points and geographies in line with that credo.

4Ps B&M: Your vision for Britannia?
VB: I want Britannia to be the best brand of India. It has already been ranked as the best food brand of the country. Now I want Britannia to be a “part of everyday life” of our consumers.

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

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Toshiba e-Studio 2500c

IIPM Programme :- SUPERIOR COURSE CONTENTS

Technical Specification

Max resolution (b&w) 6760 x 1440 dpi; Only entry AIO (printer-scanner-copier) which offers 4 individual ink cartridges; Print Speed of 25 ppm, B/W, 13 ppm Colour
PRICE: Rs.4,999
WARRANTY: 2 years on site service warranty

The e-STUDIO2500c/3500c is a multifunction print/copy/scan/fax (MFP) device that utilises a printer-centric engine developed exclusively by Toshiba’s imaging experts. It’s perfect for users who demand unparalleled business productivity, full-colour scanning, and razor-sharp printing. The hardware accelerator developed by Toshiba ensures optimised image handling performance and reduces the frequency of HDD access and temporary file size, so “Scan to” and “Box to Print” functions are processed much faster. It is the perfect device for a high-quality image reproduction which results in clear text and crisp lines with smooth blends of colour, clubbed with excellent colour reproduction & high-quality image compression. Toshiba’s original image-processing accelerator, simply add to its glamour.

Marketers’ delight: The overall colour superiority is supported by several new Toshiba technologies that provide superior colour registration. Also, the e-STUDIO2500c/3500c is designed to support proprietary Toshiba toner that offers excellent colour quality.

Tester’s note: Pros – Is a multifunction printer, which can handle a large amount of printing work. Con – External design can be improved upon.

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Source : IIPM Editorial, 2008

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

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HCL Mileap V Series AXMV0201

IIPM Programme :- SUPERIOR COURSE CONTENTS

Technical Specification
Processor: Intel Processor A110 @ 800 MHz; RAM: 1x1GB DDR2; 80GB Hard Disk Drive; 7-inch display.

PRICE : Rs.34,990
WARRANTY : 1 year

Specifically made to suit the Indian environment, the HCL Laptop Mileap V-AXMV0201 ultra-portable PC has a unique dustproof, shock-proof and durable design. The V series is targeted at consumers who love to stay connected, everywhere. The light weight laptop is designed small so as to make it convenient to use almost everywhere. The ultra-portable PC integrates an extraordinary navigation pad on the side panel. As per a company spokesperson, “HCL V Series laptops are designed for a eco-efficient consumer and also to be used as business notebooks...”

Marketers’ delight: The stylus and durable design is a show-stealer.

Tester’s note: Pros – Ultra-potable and excellent price. Con – RAM could be improved upon.

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Source : IIPM Editorial, 2008

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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One wonders where India would have been today if events hadn’t unfolded the way they did in 1991.

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One wonders where India would have been today if events hadn’t unfolded the way they did in 1991. Clearly the BOP crisis proved to be a unique blessing in disguise

This writer recalls a conversation with an elderly Hyderabad-based Sikh gentleman on a train journey to New Delhi in 2002. When asked about his opinion on New Delhi, his reply was a landmark lesson in diplomacy as he said, “People in New Delhi are crazy!” Of course, his prejudice was not sans basis. On his previous visit to New Delhi, he had suffered the horrendous experience of a one hour traffic jam at Dhaula Kuan, one of the city’s key intersections. For Delhites, it was daily fare then, but of course, our Sikh friend had the experience of a lifetime!

That intersection has improved since, with an impressive network of flyovers, but most of India is still crying for better highways, reliable power, clean water, two meals a day, employment et al. Experts have often compared India’s course to economic development to a typical two lane Indian road laden with potholes. Piecemeal measures to convert our roads to smooth superhighways do happen, but it needs a severe crisis in terms of traffic to initiate such changes. And our economic saga is not very different,

So, while all over the world, people may dread the word crisis, we Indians must take it in our stride. It took a crisis in 1967 for the government to take baby steps towards liberalisation, but then they retreated like a crab on the beach does on seeing ‘huge waves’ of protectionist jingoism. And it took a huge Balance of Payments crisis in 1991 for India to initiate a wave of economic reforms. Thankfully, our crabby traits did not get the better of us this time around.

Before that fateful year, ‘free India’ was shackled by a range of problems, including babudom, ‘Swiss bank accounts’, red tape, protectionism, poverty, inefficient PSUs and pathetic services for its citizens. As per reports, fiscal deficit had touched an alarming 7.9% in 1989-90. The shock started in 1991 with the crude oil peak that came due to the Gulf war. India’s forex reserves dropped suddenly from an entirely unimpressive $3.11 billion in August 1990 to a decisively perilous $896 million in January 1991 (Ministry of Finance report). Reserves at that time could not even have funded two weeks of imports. India took a loan of $1.814 billion from the IMF in January 1991. The new coalition government led by the Congress took up a slew of measures, including import compression (later deemed counter productive) and allowing export of its gold reserves (some 47 tonnes of gold were sent by RBI to England, which raised around $700 million).

Apart from short term measures, the new government decided that economic reforms are a must to get the country firmly on the road to recovery. Therein, India saw a welcome saviour in the form of the then Finance Minister Dr. Manmohan Singh. Fiscal profligacy was shunned with steps like abolishment of export subsidies, increase of fertiliser prices and a rain check on non-plan expenditure. Enterprise was encouraged with simplified clearance processes for trade and business and moves towards less interference by the state. The oppressive licence raj of the 1980s had breathed its last. Tax reforms were initiated and a programme was launched to divest government stake in non-performing PSUs. State influence was rightfully shifted to the social sector and towards regulation to ensure fair competition and consumer interests.

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Source : IIPM Editorial, 2008

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

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YUAN LONGPING - The chinese charmer

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YUAN LONGPING
The chinese charmer

Talking about Yuan Longping is more relevant today, with uncontrollable inflation due to shortage of commodities including the essential food grains like the rice & wheat marring the global economy. Every scientist cherishes a dream of creating something unique that will help the world at large. However, in the case of Yuan Longping, dubbed as “father of hybrid rice,” he dreamt of cultivates rice as plump as peanuts, and that farmers could relax in the cool shadow of big rice plants. As a young impressionable man, teaching at an agricultural school, he was overcome with grief when a series of natural disasters had plunged China into an unprecedented famine that caused many deaths. It was then that he developed the first hybrid rice variety, which provided 30% more rice than the normal yielding ones. His research is said to be the second green revolution. Yuan didn’t stop there. With the money he earned, he today continues to support research being carried out by others. Today when shortage of food grains is hitting the people of India hard, it’s time that the Indian scientists take lessons from this unlikely Chinese hero.

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Source : IIPM Editorial, 2008

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

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Young and upbeat - M. THIAGARAJAN

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M. THIAGARAJAN

Young and upbeat

What’s common between Stelios Haji-loannou and M. Thaigarajan? Aviation, of course! But there is a finer glory there if you ponder hard over it – they both started young as the top man in their respective airline companies! While Guinness Book of Records tagged Stelios as the youngest Chairman of a scheduled airline (EasyJet, UK) when he was just twenty-eight, Thaigarajan wins the title of the world’s youngest airline CEO. But there’s one thing about Thiagarajan, his hobby, celestial navigation as many call it showing his vision for India in this century.

“I have seen very little of him personally or over meetings as most of the times he sends someone else to act on behalf of him. But whatever I know of him, he seems to be a quiet and serious personality,” comments Siddhanta Sharma, Chairman & CEO, Spice Jet who shares friendly terms with Paramount Airways as confirmed by C.R. Kannan, AVP, Paramount Airways. Thiagarajan has gifted aggression to his aviation company and within 30 months of its launch, Paramount is reigning supreme in South India by capturing maximum market share and attaining a dominant leadership position (as far as the high-value business carriers are concerned) using just Brazil-made Embraer aircrafts. “He might just be influential in the coming year, you never know,” adds Siddhanta. But remaining confined to just South India is not Thiagarajan’s cup of tea; he wants to spread his wings not only across India but later globally as well. This young man’s big plans comprise expansion through increasing the fleet size by 40 more Embraer aircrafts by 2010. The mantra of Thiagarajan appears to be concentrating on a single region, deluging and then leading before heading towards other areas as stands proven via his plans. He plans to enter western India by May-June this year and the north Indian zone by early 2009. He also has ‘beyond boundaries’ plans to go global (covering Europe, Far East, USA et al) by 2015-16, ensuring that India is a winner this century.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

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ROGUE NUKES

IIPM - Admission Procedure

Even if this is true, there are a few apprehensions. Anthony Zinni, a retired US marine general, who was in-charge of the US Central Command, which oversees Pakistan among 27 nations, puts this in context. “The first time I met Musharraf, he said his No. 1 concern was that over half of his (military) officers had not been outside of Pakistan.” This was due to sanctions imposed by the US in 1990. The lack of global interaction, coupled with beards appearing among officers, signified more religious conservatism.

Even Nayyar says that “knowledgeable Pakistanis point out that most of the people working in Pakistan’s nuclear weapons labs appear to be near-religious zealots, and deeply under the influence of the Tableeghi Jamaat, an Islamic organisation with presence in several nations.” Pervez Hoodbhoy, Chairman, Department of Physics, Quaid-e-Azam University (Islamabad), adds, “Pakistan’s nuclear weapons are under threat from those inside the military and intelligence.”

Hoodbhoy fears that “small amounts of enriched uranium or plutonium could be smuggled out of Pakistan’s nuclear facilities. You need about 25 kg to make a device the size of (that was used at) Hiroshima. Making the bomb is relatively easy. It is getting the weapons-grade material which requires industrial facilities.” But Brig. Vinod Anand of the United Service Institution of India disagrees: “The Pakistan army is a very coherent and professional organisation. Even if there are reports of Islamisation of the army, it is at the lower level. We should be clear that the nuclear bomb requires complicated assembling, and it is not like an IED or any other bomb.”

Still, the other apprehension about Pakistan’s nukes is that external diplomatic pressures – like those from India and certain quarters in the US – is pushing the country’s administration to distribute its nuclear weapons. This is either to prevent a concerted effort by any nation to strike at its facilities, and to escape detection by other enemy countries. It may be a good time to remind readers that the US did threaten to strike Pakistan’s facilities and, in the 1980s, India had planned a similar attack with inputs from Israel until the US leaked the information and prevented any such moves.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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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...And when will they get to laugh all the way to the bank?

IIPM : EXECUTIVE EDUCATION

“The credit bubble is just beginning to unwind, and while US borrowers are being blamed, they were really just a pawn in a global game”

I am not so sure about this view. Consider that in the case of MBIA, the buyout firm Warburg Pincus was aware of the exposures to lower quality CDOs, prior to making its investment in the company, when it announced on December 10, 2007 that it would initially invest $500 million by purchasing MBIA shares at $31 each! This announcement initially helped restore some investor confidence and pushed MBIA shares as high as $37.50, the day the deal was announced. But, now with the shares changing hands at $18, the deal does not look that great (and may not even be completed). Similarly, Citigroup shares jumped from $30 to $35 after November 27 on the announcement that the Abu Dhabi Investment Authority (ADIA) would make a $7.5 billion investment in the company. But as can be seen in figure 8, it has since then given back the entire rebound and some more! Moreover, if we look at long term charts of Bank of America, JP Morgan Chase and Citigroup, considerable downside risk still exists. In the case of Bank of America, the stock could still drop from $41 to below $30 while JP Morgan Chase could decline to between $20 and $30 from $43. In fact, each time a Sovereign Wealth Fund makes an investment and stocks rebound, they seem to provide excellent exit opportunities. Blackstone Group has declined 24% since its initial public offering in June after China Investment agreed to buy a $3 billion stake in the firm. Bear Stearns has declined 26% following its sale of a stake last October to Chinese government controlled CITIC Securities. Therefore, I would consider selling UBS stock here or on any rebound, following the announcement that the Government of Singapore Investment Company and a Middle Eastern investor made a SFR 13 billion investment in some convertible bonds.

Three observations:

a) I have never experienced a bull market in equities without the participation of financial stocks. In addition, when financial stocks across the board collapse, it is a very negative sign for the overall health of the stock market.

b) The fact that a stock has declined from the peak by 50% or even 90%, does not make it necessarily inexpensive. In 1985, I recommended the purchase of a basket of Texas banks, which at the time had declined by 95% from the peak, as a contrarian play. Subsequently, they all went bankrupt!

c) As I have explained before, the financial sector has become disproportionably large over the last 15 years or so. Therefore, I would also expect the reversion to the mean of the financial sector to take several years and not to be completed in just six months! In short, I would avoid purchasing financial stocks for now and would also defer new commitments to equities. Of some concern to me is that on rallies, the list of 12-months new highs does hardly expand and that the NYSE Advance – Decline Line is trending down.

Marc Faber

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

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Concrete Inheritor

IIPM : EXECUTIVE EDUCATION

SIDDHARTH NAHATA feels that DLF’s Rajiv Singh has the skills to manage the current frenetic growth phase. But the challenges are many

He is the world’s richest realtor, ahead of Donald Trump. He’s the third richest Indian. He is K. P. Singh, chairman, DLF, whose net worth is $35 billion. But few know that his son, Rajiv Singh, has to be partly credited for this materialistic and strategic transition. When B&E finally caught up with him, Rajiv seemed humble about his personal achievements. “It has been satisfying, but a lot still needs to be done. DLF and everyone connected with DLF have come a long way. Now, we are standing at an exciting juncture of immense opportunities. We need to deliver more than we have delivered till date.”

Like many of the NewGen entrepreneurs featured in this section of the special issue, Rajiv Singh is shy and introvert, yet intelligent and has a strategic vision. Arvind Khanna, who has worked as the Chief Marketing Officer of DLF, and is currently COO, Beekam Helix, explains, “He is a shy and reticent person. Till recently, it was very difficult to make him talk to the media. He likes to be in the background. Although he’s a suave person, he’s brief and to the point. But he’s extremely informal, astute, and intuitive and very few people in the real estate industry have a vision like him.” Agrees Kapil Mehta, CEO, DLF Pramerica Life Insurance, “Rajiv has a remarkable insight into the industry and economy. His approach to business issues is direct and practical. Despite DLF’s heady success, he is extremely approachable and down to earth and it’s a pleasure to work with him.” And therein lies the key. Rajiv understands that if DLF has to become truly professional, he has to somehow manage the old guard, which helped and influenced DLF, when it was run like a family-owned business. “I believe in giving enough freedom to my team to perform various tasks. My management philosophy is that whatever we do and no matter how good or bad we do, we will do it as a team.”

“He listens to others. It doesn’t mean that he will always agree with you. But he will give a fair hearing to everyone. He has been trying to change the company for long. You need to understand that DLF is an old company. There’s a lot of skepticism about the manner in which he’s trying to change the DLF culture. But he’s carrying all the people with him, both old and new. He’s trying to change the company from a Gurgaon-centric organization to a pan-India one. Under him, people have stopped looking at individual fiefdoms,” adds Khanna. This happens to be just one of his many exceptional qualities.

What sets him apart from other realtors, or makes him a part of the elite league in the sector, is the way he envisages new projects. Explains Kaushik Sengupta, VP (Marketing), Eros group, “Rajiv has tactical business acumen. He announces unique projects with clear differentiation, believes in sustained efforts to enhance customer value and quality, and gives ethical and professional service to customers.”

Take a look at some of his initiatives. Today, DLF has a developable land bank of 738 million sq. ft. with projects in 32 cities. It is building a ‘New Bangalore City’ with a proposed investment of $12.5 billion in partnership with Dubai’s Limitless Group. The company has signed a MOU with Nakheel to develop two projects with a planned investment of $12-14 billion. Moreover, it is going beyond townships. DLF has a joint venture with the Hilton group to open 75 hotels in the next 5-7 years, and it has evinced interest in building special economic zones and sprawling malls.

In addition, the group is now diversifying into unrelated areas. “We recently applied for GSM spectrum and formed a JV for an asset management company with Prudential Financial. Both the arenas are of high significance to us and present rapid growth opportunities that are waiting to be tapped. We believe that we will be able to create value for everyone. Moreover, on the back of this value creation model, we will further continue to pursue opportunities across different verticals. This approach will help us in derisking operations across sectors,” elaborates Rajiv.

However, this is also going to be the biggest challenge for Rajiv Singh. As DLF spelt out in its prospectus for the public issue last year, “Our expansion and diversification is on a scale that is unprecedented in our history and will place significant demands on our management as well as our financial, accounting and operating systems. We may not be able to sustain such growth in revenues and profits or maintain a similar rate of growth in the future. If we are unable to manage our growth effectively, our business and financial results will be adversely affected.”

The same prospectus added that “given the fragmented nature of the real estate development industry, we often do not have adequate information about the projects our competitors are developing and accordingly, we run the risk of underestimating supply in the market. As we seek to diversify our regional focus, we face the risk that some of our competitors, who are also engaged in real estate development, may be better known in other markets, enjoy better relationships with landowners and international JV partners, gain early access to information regarding attractive parcels of land & be better placed to acquire such land. In addition, we are expanding into new businesses such as SEZs, infrastructure and hotels. We have little experience in these businesses…”

Therefore, there are still a number of unknown factors before we reach some concrete conclusion about Rajiv’s ability to manage the new century DLF. He has the skills to change the culture of the organization. He has the intellectual capacity to leverage DLF’s core competence by getting into new sunrise areas. He has the guts to take on giants like Reliance Communications and Reliance Industries. He has the confidence to build a 21st century realtor company. But the risk factors are as imposing. It is up to Rajiv Singh to ensure that neither internal nor external issues bring this house of concrete crashing to the ground in the near future.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

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Ever Reddy to take on...

IIPM : EXECUTIVE EDUCATION

...the responsibility to ensure fiscal health

With 2007 seeing unprecedented capital inflows, the year has been one of the most challenging for RBI & its Governer Y. V. Reddy. Walking the tightrope between reining in inflation & clinging on to the fixed foreign exchange rate has been his top priority. His policy decisions were amongst the most closely watched by the crème de la crème of the Indian business & also on the Dalal Street. Well, why not? He seems to make markets sing & capital dance, like no one else & might just outperform in 2008.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

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Complete truth

IIPM’s 36th Glorious Year of Academic Excellence

Reap off the inequality blessed

Recently, the World Bank (WB) has bewailed that “there are huge inequities in the world. Even better-off citizens in most of the developing world face worse opportunities than the poor in rich countries. The fact that the country of birth is a key determinant of people’s opportunities runs counter to our view of equity.” Whatever the WB thinks of equity, it is at best only half-true. A close scrutiny will clearly exemplify that inequality has helped less developed nations to achieve economic growth and prosperity. Had it not been for the fact of inequality of income and cost of living, none of the billions of dollars of investments that has been pouring in China and India for over a decade now would have come. It is because of the relative backwardness and the consequent low cost that inspired the Western world to outsource most of its IT related work and production to India. It not only has helped India climb up the ladder faster than otherwise but also allowed it the leeway of time and energy to learn from such technology and business models to develop its own version of multinational companies. All this, thanks to the sheer inequality that existed, and is still existing between the First and the Third World. After all, even water doesn’t flow from a waterfall unless there’s difference in altitude. Hail inequality at times.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

Read these article :-
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B-schooled in India, Placed Abroad (Print Version)
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