Talent and innovation, of the “balti“ variety that is...

IIPM’s 36th Glorious Year of Academic Excellence

ibibo’s CEO on what makes his brand of social networking tick

"We want to increase the time that an individual user spends on ibibo, rather than focusing on getting inactive users...

Ashish Kashyap, CEO, ibibo Web Pvt. Ltd."

Be it a member of a bomb squad desperately urging his chief for guidance while trying to defuse a ticking bomb; or a scared wife trying to shake her husband awake at midnight; the ‘Don’t be a Balti’ campaign has created waves for this networking site. But, look beyond the hilarious TVCs and what you also find is a networking site, making a gregarious effort to empower its users, and not only by allowing them to peddle their talents online. When we caught up with Ashish Kashyap, CEO, ibibo Web Pvt. Ltd., he was quick to acknowledge ibibo’s USP. “User empowerment is our key success factor,” he explains confidently. The confidence is not misplaced. Within a span of just 18 months, this young turk has been able to attract and retain over 2 million subscribers to his social networking fora. Financially backed by South Africa based media conglomerate, Naspers, the moniker ibibo is essentially an abbreviation of this site’s tagline – ‘I Build, I Bond’. Ashish believes that its unique positioning makes ibibo stand out. “We gave up on the so called ‘connect with your old friends’ concept and identified a need of people to create a new social graph which is our biggest advantage,” he asserts.

The various promotional initiatives taken by company comprises of public ka vitt mantri (at the time of Budget 08’), ibibo isuperstar (in association with MTV) and the more recent ibibo iFashion photographer (in association with FTV). Explaining the site’s distinctive positioning, Siddhartha Deshbandhu, Sr. Marketing Manager, ibibo Web says, “ibibo provides a perfect podium for youth to showcase their talent in front of the country.” And unlike its rivals, ibibo is not focussing on increasing its subscriber base. Instead, avers Ashish, the plan is to focus on netting more quality users under its umbrella. “We want to increase the time that an individual user spends on ibibo, rather than focusing on getting inactive users. Currently a user spends 32 minutes a month on an average on our site and we want to increase it by five folds,” he says, adding that the core revenue model of the company is and will remain targeted advertising.

What’s more, instead of focussing on the already net-savvy youth in metros and big cities, this one is all prepared “to reach out to the masses in the tier- II cities.” For now, Kashyap is not concentrating his energies on gaining one-upmanship on competitors, as he feels that the “market has the potential to accommodate many niche networks.” Instead, the slow broadband penetration in India is his biggest hurdle.

With ibibo.com getting off to a salutary start, Ashish is now training his energies on his other two websites, onefamily.com & dwaar.com. The former enables the user to connect with extended family and family friends and the latter facilitates users to find and compare jobs, product reviews, matrimonial, et al, across categories. Besides, the company has also invested $12.3 million for a 30% strategic stake in ACL Wireless Ltd. The localisation of ibibo has really got them on a reputed platform. But, there are miles to go before complacency can set in. After all, rivals like Orkut and Hi-5 already enjoy the first mover advantage in the segment, while others like bigadda.com have Ambani’s deep pockets to bank on. Ashish’s one and only bet remains innovation of the never-before variety!

Pawan Chabra

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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Agnello Dias, National Creative Director, JWT

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Agnello Dias, National Creative Director, JWT: Surjo has a hunger inside him to create things. He has a passion to excel in life and will do whatever it takes to reach the pinnacle of success. He is always looking to improve the things he has done in the past and is never satisfied or content with his work. As far as his personality goes, his biggest strength is that he is always hungry for more. If he has done a good job and even if he is satisfied, he will still come back and do more, as his personality is very intense. Definitely a promising guy for the future. Oh! And while his Mountain Dew campaign brought him loads of success, personally I love his ‘Ooh aah India...’ campaign for Pepsi.

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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Now that’s a ‘class’ act!

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LG is going for rebranding, but faces the daunting challenge of perceptions

sounds hard to believe, but the company, which made life good for millions of consumer durable buyers worldwide began its journey with a cosmetic known as ‘Lucky Cream’. Consumer durables, was, of course a remarkable transformation.

Now LG is on the threshold of another vital transformation to alter its roadmap for the future. Buoyed by their remarkable success in the Middle East and Africa in 2005, where LG is positioned as a premium brand with high-end stylish products, the company is all set to adopt this corporate philosophy by re-branding their products on a global front.

After making their presence felt in four verticals – home appliances, consumer electronics, GSM handsets and IT products, the Korean giant is making a shift from a mass to a premium segment, even as they are now gearing up their sleeves for target sales of $3 billion in 2008, with an eye to double their revenues and profits by 2010.

“The kind of growth in the high end segment is phenomenal and we have had a change of approach after we did a global survey,” explains Amitabh Tiwari, Business Head, Consumers Electronics & Appliances, LGEIL. Another reason is the annual erosion of prices of around 2-3%, which makes it hard for manufacturers to meet turnover of the previous year with their average selling price intact. The recent hike in prices of steel in second quarter of the current fiscal by 10% has further pushed the consumer durable firms to raise their prices and thus move on to the premium segment. “LG is putting up a large upfront investment of around Rs.400 crores as in premium range, profits will be higher,” avers RC Chopra, consumer electronics expert, CII. Moreover, its a fact that in India, the premium durables segment is growing much faster than the mass segment.

The company plans to spend $1.4 billion globally and around Rs.3.5 billion in India,” avers L. K. Gupta, CMO, LGEIL. Surely, if they don’t play the game well they may lose out as repositioning will take them more than a year in India. Anyways, the company will not risk giving up on the mass market. “We can’t do away with janta products but with aspirational tag attached, even the mass product consumer will change their perspective,” projects Tiwari.

How will LG tackle other fishes in the pond (read niche segment)? As per Tiwari, LG is “keeping a price at premium and 3-5% above competitors.” They would also differentiate their product on conduct, after sales service and approach. LG aims to grow at over 20% in India and claims to have cornered all touch points including advertisements, in shop experience and consumer knowledge. “Our brand can stand premium image with or without a brand ambassador and we plan to spend three-fourth of our total investment on advertisement,” claims Gupta.

However, the stumbling block is only one, premium products are a different ball game and they will have to battle consumer perceptions. “LG will continue to be a mass product in white goods as it has the largest market share...,” comments a consumer durables analyst. Of course, to their credit, LG is not new to facing challenges in India.

Neha Saraiya

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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Road ahead Sectors are loving the PE grace

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Real estate ruled in 2007. A look at the potential target sectors for 2008

After getting a brief idea about ‘what lies beneath’ and ‘what’s on surface’ the time has come to get a hang of ‘what lies ahead’. Amidst the rollicking PE investments that are sweeping various sectors of the Indian economy, one truth stands out for sure – the ‘sunrises’ of today might be the ‘twilights’ of tomorrow! And as we say this, we dare to add the natural truth that most definitely, some new sector(s) will lead the lap in the race to woo investors. Here’s a primer…

Statistics reveal that the year 2007 was ruled by sectors like real estate and telecom that counted first when it came to the PE favourites category. And this comes as a no surprise as it fell quite in line with the promises that these two sectors held. Therefore, investments in companies like GMR Infrastructure and Bharti Airtel were some of the noteworthy deals in these above mentioned sectors. In terms of percentage value share for the year 2007, sectors like real estate & infrastructure management led the pack, attracting 36% of the net investment share. It was followed by others like Telecom, Banking & Financial services, Media, Entertainment & Publishing and IT & ITeS, which garnered 18%, 17%, 5% and 4% of the total pie respectively. And now talking about what’s bound to happen in the future, let’s consider the following figures. According to a PE firm, SMC, “There are 366 firms claiming to be operating in India and another 69 that are raising capital with plans to be operating soon. Approximately, over 400 funds are active or about to be active in Indian markets. In total, they seem to be sitting on $48 billion to be invested between now and December 10, 2008.” What this clearly proves is that there is no dearth of money flowing into India through the PE route. However, which are the target sectors for these deeppocketed sharpshooters is still a critical and cloudy question to ponder over.

Sudhir Gupta of Planman Financial feels that, “Sectors like education, especially e-education, will rake in big PE money in the coming future. Then there are also other sectors like healthcare, which will also attract huge PE investments.” Well, believe it or not, from career counseling to preparatory tutorials to vocational training companies, education is one of the sectors, which is enticing PE firms big time. 2007 was a great year for healthcare and it seems it will of course remain in vogue. The year saw a whopping $400 million being poured into this sector, and this fad is still far from becoming history. Currently pegged at $34 billion, the healthcare sector is expected to grow to a whopping $40 billion by 2010. “We are certainly looking at buyout opportunities in the domestic pharmaceutical space this year,” opines Sanjiv Kaul, Managing Director, Chryscapital Infrastructure. Sure enough, a look at the figures would prove that the pharma industry has also been a roaring success amongst the money-laden PE firms.

Then comes common infrastructure with the road sector showing a lot of promise, as many firms already have and are planning to venture into the highway or road sector by not only picking up stakes in the infrastructure companies but also by taking part in the bidding process. “Today, if a traffic consultant projects ‘X’ number of vehicles on a certain highway stretch on a certain date, chances are that, in some cases, the number of vehicles would double or triple in just a small time-frame of a couple of years,” claims Debashish Mukherjee, Principal, AT Kearney. He further adds, “As there is huge promise in the road sector, it would not be wrong to say that here, good money is chasing good asset. In time to come, highway projects would figure as cash-cows in the PE firms’ portfolio.”

Edit bureau: Bikram Keshari Jena

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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Rider of the Storm

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He’s blunt, bold and transparent. And he’s set his eyes on reversing Yamaha’s fortunes in India

“When I first came to India, this place (the Yamaha India plant at Greater Noida) was a zoo. The workers in the factory did pretty much as they desired. And at any given point of time, nearly 30-40% of the labour was not working,” is the brutally frank admission of Tomotaka Ishikawa, MD & CEO of Yamaha Motor India today. Sitting pretty in his casually elegant room in the plant, with an entire wall plastered with various pictures of him and bikes, he can afford to be candid. After all, since his arrival in India more than a year ago, he’s managed to not only resolve Yamaha India’s labour troubles, but has also crafted a ‘fun’ game plan to help the Japanese two-wheeler major break new ground in the country, which includes getting Yamaha’s big racer bikes R1 and MT01 to India.

And you’d better believe the man. He may look unassuming and petite in his spectacles and conservative business suit, but this samurai is a fierce fighter all the way. Credited with the turnaround of Yamaha’s fortune in a series of south East Asian markets, his particular brand of strategies have particularly worked wonders in Thailand’s two-wheeler mart.

Faced with the rising onslaught of Honda and Suzuki, Yamaha was a dying bike brand in Thailand (their market share had plummeted to about 9% from the earlier 30%), before Ishikawa began to wreak havoc on competitors in 2001. “I gave the Thailand management three choices. I told them either you be a quick adaptor of lower prices like Suzuki; or you find Honda’s weak point; or else find a niche for yourself. We finally settled in for the third option,” affirms Ishikawa.

He introduced automatic engines, targeted the younger generation with stylized accessories, and introduced swanky new merchandising. Honda slashed its rates by 15%. The unconventional Ishikawa, instead of crumbling under pressure, retaliated by upping Yamaha prices. Ishikawa reminisces on how his distributors in Thailand at the time thought him insane, but the strategy ultimately paid off. In just 4 years Yamaha had got back to nearly 25% market share in Thailand. Ishikawa became the blue eyed boy of the Yamaha head office in Tokyo.

Ishikawa’s Thailand experience has set the alarm bells ringing for rivals in the Indian market. The two wheeler giant made its India foray in 1985, in partnership with Escorts, making inroads into the hearts of Indian bikers by offering them sporty, performance driven products.

The RX100 tasted phenomenal success, but the momentum died half way through. Ask him, what went wrong with Yamaha’s India strategy in the first place and you’re almost astounded by this CEOs honest and frank assessment. “There was a gap between what the Indian customers wanted and what we gave them. They wanted an RX100 type of vehicle but we gave them what everyone else offered – nothing unique or different. We got caught in the volumes game and developed products that lacked Yamaha’s genes,” he pointed out. Hero Honda and Bajaj had a better product line up and walked away with all the glory.

In fact, for the month of May 2007 Yamaha India saw a whopping 100% drop in sales! Ask Ishikawa and you get another straight Ishikawa-style reply: “We didn’t have anything to sell!” No mincing words, for sure.

Adrenalin levels in Yamaha India are at an all time high now. Since Ishikawa joined Yamaha India, Gladiator has already won the 125cc Bike of the year award in 2006. And with ‘Kando’ (a Japanese word meaning “Touching Your Heart”) – as their corporate ethos, the buoyancy has touched every Yamaha employee.

Ishikawa is borrowing heavily from his Thailand experience to get a one up on his Indian rivals, and that too with a planned investment of a jaw-dropping Rs.1000 crores. “We are just going to go back to the 4Ps of marketing for the Indian market,” he avers, adding that a new product line up had already been finalised. Refusing to divulge more details at this stage, he only says that, “The product will be affordable and attract the younger generation. It would be a product uniquely designed for bikers, and not commuters.” The idea behind the emphasis on bikers (instead of the earlier commuters) is to come up with hi-sense, hi-fashion, cool products that will be ‘fun’ and attract the younger generations. The new model line-up is set to be introduced in the Auto Expo in January 2008. “I’m not greedy, I’m realistic. We hope to grab 19% of the motorcycle market in the next five years,” says Ishikawa.

Believing the Yamaha India employees to be his biggest asset today, Ishikawa is in awe of the mathematical and engineering abilities of Indian people. “The Thai’s are just no comparison,” he says. He believes, that employee retention is one of the key factors that would make the company attractive in the eyes of the public. “I want people to say that God! I’m so lucky to be working with Yamaha.” In the same spirit, Ishikawa is working closely with his team to change the work culture of Yamaha India. In fact, he says that whatever HRM systems initiatives he has introduced so far, have brought fruitful results.

In line with this new vision, Ishikawa rolled out a new internal mission statement in July 2007 - New Yamaha, my promise dil se! And mind you, these are not just empty words. The CEO himself amply displays his heart’s commitment to turnaround Yamaha India’s fortunes, when he says that the primary reason why he has not invited his wife to come and live with him in India is because he needs “no distractions.” Now that’s really dil se dedication Mr. Ishikawa!

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 :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
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