IIPM - Live: January 2013

Monday, January 28, 2013

One day become India’s answer to WalMart?

Can Shoppers Stop do it? Does Shoppers Stop have it within them to fight the slowdown and one day become India’s answer to WalMart? angshuman paul investigates...

Think about it... For decades, the only option for a godforsaken departmental store that Indians ever had was the nightmare of a shopping excuse called Super Bazaar! And if you’re one of the teeming wastrel dozens who had their penny-wise romantic interludes in the generation spanning Kendriya Bhandar, none the better. Come 1991, and Nagesh became the Salvador Dali of shopping, romanticising the art for Indians in a way they felt was alien, yet enslavingly addictive. If the ‘91 inaugural Andheri store started in an upstreet Linking Road in Mumbai smoked the intent, the Ansal’s Plaza outlet in New Delhi went the full figurative blast. From one store in 1991 to 36 in 2009 (and 51 CrossWords, 3 HyperCity Marts), Nagesh, and Shoppers Stop, had arrived! But like I said, till the last year.

The numb’ers

For eighteen straight years, Nagesh has intently focused on growing Shoppers Stop’s geographical reach. And the impact has been frivolously brilliant, especially in terms of revenues. Look at just the last five years. From Rs.3,448 million turnover in FY 03-04, Shoppers Stop jumped 27% to Rs.4,411 million in FY 04-05. The next year was brilliantly more fantastic. A super growth of 42% made revenues shoot up to Rs.6,228 million in FY 05-06. With Rs.8,123 million in FY 06-07 (30%) and Rs.10,799 million in FY 07-08 (32%), Nagesh commandingly was traversing the upper crust. But both MD Nagesh and CEO Govind knew the warning signs were already there. With three quarters of this year giving Rs.9,606.6 million turnover, replicating last year’s growth might not be possible at all; though all indications are that they will surely beat last year’s revenue figures.

It’s quite ironical then that the year in which Shoppers Stop has reached the historical high grandstand of its revenues, is the same year that has perchance been the worst for it during the past decade. Even before the start of the year, the last quarter of the previous year had given them Rs.25.6 million loss (net after taxes). If that looked only trite figurative or bookish, the next quarter made its intentions clear. A mammoth Rs.256 million loss. The third quarter of the year ending September 2008 was the movie 300 in action; a bloodbath of Rs.496.7 million loss. Fourth quarter ending December 2008 gave another loss of Rs.32.6 million.

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2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Tuesday, January 22, 2013

Two wars, none the smarter...

Europe gloated during the meltdown, claiming it would be left untouched. The claims return to haunt a failing Europe

I945: Europe is completely devastated and in ruins after the Second World War. It is also facing the haunting spectre of Communism emanating from the Soviet Union. And yet, Western Europe rises from the ashes and emerges as a powerhouse of economic growth and all round prosperity. The resurgence is thanks largely to the Marshall Plan implemented by the United States.

1957: A handful of European nations come together and form the European Economic Community that seeks a ‘European’ perspective on global as well as local issues. This is the first tentative attempt by Europe to emerge out of the trans-Atlantic embrace with America. Many more nations join by 1967 and Europe starts dreaming of a unified market that can emerge more powerful than America.

1993: The European Union emerges as an actual rival of the United States with 500 million citizens and 30% of the world output. By now, Europe is frequently critical of America and its policies – political, strategic as well as economic. The criticism climaxes after the foolhardy George Bush decision to invade Iraq in 2003 and many start openly talking of EU as a rival to the US and euro as the rival to the dollar.

2008: In the early days after Lehman Brothers collapsed, there is much glee amongst many in Europe. Analysts and hacks point out how Europe has fostered a more ‘responsible’ model of capitalism while America has gone beyond the pale. In a parody that seems inconceivable now, European media praises banks for responsible lending and handling of assets.

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The company’s aggressive plans

Lalit Jalan, CEO, R-Infra, discusses the company’s aggressive plans in this exclusive with B&E

B&E: What is the strategy of R-Infra to deal with the competition?
LJ: We are looking at power generation. In transmission, we are the largest private sector transmission company in India. We are presently doing three projects worth Rs.40 billion in power transmission. In distribution we are again the largest private sector company. We have six million customers. We have got Mumbai, Delhi and Orissa which are all growing. We are the largest private sector ‘EPC’ player in the country. Then we are developing new projects in metro rail, roads, airports and atomic energy plants. In infrastructure we have 9 projects worth Rs.160 billion. So we are in a very good position. Our balance sheet is very strong. Our net debt position is zero which is very good in this sector. We always welcome competition. They are very healthy. Tata''s are very good competition.

B&E: What are the most critical challenges for Reliance Infrastructure in the coming years?
LJ: There are two types of challenges, viz. internal as well as external. Internal challenges relate to managing vendors, equipments, finance, retaining and hiring new talents. The external challenges relate to getting land, environmental and other regulatory clearances. We are very sure of internal challenges. But external challenges are taking a lot of time. Getting land is proving to be a very time consuming process. If you want 2,000 acres of land for starting a power plant, it will take a lot of time.

B&E: What are your future plans?
LJ: In the EPC business, power generation remains the prime focus. But we are also going into metro rail construction and electronic power plants construction. We are also tying up with some EPC companies in steel to do steel plant construction. We are also planning to tie-up with world leaders in metros & airports.

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Saturday, January 19, 2013

Japan the new Iran?

Japan is distancing itself from the US and affirming its own foreign policy. Is this the start of a new political order?

As Yukiya Amano, a Japanese, takes over the Director General’s post in the International Atomic Energy Agency (IAEA), what should have been actually a booster shot for America’s fight against renegade nuclear loose cannon countries like Iran and North Korea has become more of a hanging question, with policy circles undecided on whether America actually supports Amano or not – in fact, the question is, does America support Japan anymore or not? The immediate provocation goes back to an article published in Washington Post on October 22, 2009, where a US State Department official was quoted radically stating, “The hardest thing right now [for America] is not China, it’s Japan.”

For a country which has been a staunch ally of US for more than a sixty years and for a country which still calls its armed forces as self defence force, thanks to the stigma of the 2nd World War and the restrictions imposed on it by the Security Council, one might ordinarily find it difficult to gauge as to what might have provoked such a change of heart among the US officials. The growing Chinese military and economic prowess and its hush-hush global ambitions are known to many. But is Japan, the country with the second largest economy in the world and one which till now has deliberately never leveraged its economic prowess for military ambitions, about to change?

To understand the changing paradigm of this relationship, one has to take into account the fact that one of the key aspects of the Japan-US relationship was and is the Japan-US Security Treaty. This treaty signed in 1951 and coming into force in 1952, though going through several reforms, continues to be the pillar of bondage between the world’s top two economies. With changing times, the end of Cold War and a phoenix like rise of China, this relationship too was supposed to go for a change for the positive. In Asia, US had always consistently seen Japan as not only a trusted ally but one which would be of great help to contain China both economically and military. The massive US military base in the Southern Japanese islands of Okinawa, being in the proximity of Taiwan and China, essentially works as a safety valve to keep China and others on leash.

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Friday, January 18, 2013

My MBA education complements my marketing responsibilities...

Jitin Prasada, CMD, PI Indisutries Ltd. & Union Minister of State for Petroleum & Natural Gas

B&E: Lawyers have dominated Indian national politics since the days of India’s struggle for independence. However, today, the new council of ministers has many MBA-qualified leaders. Is there a cultural shift occuring?

Jitin Prasada (JP): I would like to see this in a different way. For those entrusted with responsibility through electoral politics, a good educational background always helps, whether it is a law degree, a management degree or some other qualification. You would recall that not too long ago, most government heads in Latin America were alumni of Ivy League Institutes of the United States. But at the same time, in a democratic set-up of governance like ours, the real education comes from working amidst the people by seeking to understand their concerns and trying to provide solutions acceptable to them.

B&E: The MBA degree is thought to be one of the most prestigious and coveted in the world. Does it add value to your political career as well?

JP: I have already mentioned that a good education always helps. To take conscious and judicious decisions, an admixture of proper education and a sense of ground-reality is always helpful...

B&E: An instance from your life which proves the same...

JP: During my stint as Minister of State for Steel, a conscious decision was taken to launch projects of Steel Processing Units in the backward rural areas of the country, where the raw material linkages were unavailable. The idea was to invigorate the rural economy, so that such projects act as multipliers to catalyse economic activities in these areas. Also, recently we launched the ‘Rajiv Gandhi Gramin LPG Vitrak Yojana’ again, with the objective of taking the cleaner fuel to the rural areas. Furtheron, my MBA education complements my marketing responsibilities for the OMCs that I have today. We have been striving hard to attain maximum customer satisfaction through new initiatives like SMS LPG booking, Smart Card project for kerosene oil etc.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Thursday, January 17, 2013

The publishers watch out...

As price wars between booksellers heat up, the customers rejoice and the publishers watch out...

If there has ever been a time when investing one’s time and effort in the fine arts has paid off, it is now. In literature, becoming the best-seller is every author’s dream, whether or not the awards pay attention. Popular author Chitra Banerjee Divakaruni counters, “An award is surely more important than a book becoming a best-seller, as it is an endorsement from critics, peers and the literary milieu of the fine quality of the writing. But, writers who are interested in creating popular fiction rather than literary fiction may not agree. In fact, winning a major prize often lands a book on best-seller lists.” Given that the vicarious pleasures of distant experiences painstakingly conjured and articulated by the author and conveniently folded into (the pages of) a book are priceless, the move to foist them off at dirt-cheap prices may sound brutal. And authors may have a lot to lose since the overall price at which their tales are sold would reduce, in turn affecting the margins they share for their books. The benefit, many feel, would be reduction in piracy, since cheaper original copies would be available. But, thankfully, books, unlike music, have a relatively lesser number of takers, and plagiarism happens to plague the literary world more than piracy.

Whatever said and done, ‘Customer is King’ is that clichéd privilege that we all love to cherish, but all we hope is that first element of this value chain, the author, earns his due and not lose to the middlemen who delude us by calling us kings!

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Wednesday, January 16, 2013

life has been a dream for mos

Breaking away from a set pattern of life has been a dream for most, but these days many are living that dream too!

How prevalent is the trend of taking frequent diversions from our pre sketched-out life plans can be seen in the strategic tie-ups between nations for reciprocal working holidays. Australia has a tie-up with 19 nations (India isn’t a part of it yet) with a restriction on the age bracket so that people don’t further their career plans in the garb of these travel options.

People from countries that are not in the alliance list needn’t get disheartened, since a tie-up only helps smoothen the process… For an intrepid backpacker, there are country guides, hostel listings, travel insurance and helpful citizens (like me!) to help them through their journey. ‘Cheaper than the cheapest’ options are also available for those constrained by finances. Instead of hotels, surf for a couch offered on sites like couchsurfing.com by those willing to spend time with travellers and learn about their experiences. Peter Moore, a travel writer, has explored many such options and can’t forget the stay at a tattered but livable yacht with a couple in the backwaters of river Thames in UK. While air tickets are something one has to bear, there are those too who choose road trips for their matchless experience.

The world is full of options and people and places and dreams. But breaking away from the comfortable rut surely takes guts. But who’s asking to let go of the comforts forever? Steve’s back at home, and Natalie will be in another 3-4 weeks for, as of now, she’s diving off the coast of Egypt!

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Monday, January 14, 2013

learning valuable lessons for its future

infosys has been definitely hit by the global slowdown, but it is also learning valuable lessons for its future, say virat bahri & arun roy of B&E

Part of that was thanks to the fact that the Lehmann debacle happened in the second half of the year. Moreover, the company managed a lot by means of cost cutting. Variable components of salaries were increased. Their reliance on repeat customers also came to their rescue. Also, rupee depreciation over the year was a welcome breather.

The challenge for Infosys would come now, in FY 2009-10. Recovery for the sector is expected to begin only by FY 2010-11. Understandably, the company has a relatively flat outlook for the current fiscal; with revenue projected to be in the range of Rs.214.16-217.47 billion and EPS to decline by 8.6-9.2% yoy. For Q1, 2008 -09, the company has reported a decline in revenues (in dollar terms) by 2.9% yoy to $1.12 billion. They did, however, manage a modest increase in net income after tax by 1.6% yoy to $313 million.

Meanwhile, the company seems to be getting aggressive with respect to diversifying its client base. Harit Shah, IT Analyst, Angel Broking, feels that the reliance on repeat business is not an issue per se; rather it is the fact that the company has clients like British Telecom (BT), which contribute a great deal to its revenues. Now when BT starts cutting IT spends the way it has over the past several quarters, Infosys obviously gets impacted. The company has added 27 clients in Q1 itself. Recent wins include Bancolombia and T-Mobile, UK.

Diversification in geographical spread and vertical presence is another challenge that the company wishes to take up. The problem here, again, as per Harit, is that emerging economies like India would take at least 4-5 years to contribute significantly to Infosys revenues. The same is true for verticals like retail, health care, transportation, et al. Investing in them will help, but one must not expect miracles.

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“Marketing was critical...”

UDAY BALDOTA, VP - INVESTOR RELATIONS, SUN PHARMA

B&E: The pharma industry was hit badly during the slowdown. Sun seemed to have escaped. What was prescribed strategically?

Uday Baldota (UB): We created sustainable revenues streams, with greater differentiation and speed to market. We also focused on cost leadership through vertical integration. There was also a focus on optimising operational costs and making acquisitions which yielded high ROI… Marketing was critical too!

B&E: But recession always hits profit margins...

UB: Surprisingly, our margins have actually gone up from 70% in 2005-06 to 80% in 2008-09. So even during recession, our margins have not been affected. This simply means that focus on costs has remained a top priority for us even in good times.

B&E: Still, there is turmoil in the sector at present, especially if we look at the ever-deteriorating condition of many major players...

UB: Not really! I don’t agree because the sales growth of the top 12 Indian pharma companies averaged above 20% in the year ended recently. Moreover, as far as Sun is concerned, there is no manpower cut on account of issues in the economy. In fact, our recruitment continues apace. Yes, there was one rare instance though at Caraco, our US subsidiary, where we had to reduce headcount, but that was only because it had problems.

B&E: $200 billion to be earned by generic players by 2014 from patent expiries. What’s your game plan in this regard?

UB: In our view, generic drugs is a significant, growing and profitable opportunity, worldwide. We are working towards getting a meaningful presence in the worldwide generic industry over the longer term...

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Friday, January 11, 2013

Friend or President

Obama’s concern over his remarks & speeches came true...

It was a debate of yesterday. It is still a debate of today and would remain so even for tomorrow. And most horrifyingly, racial profiling seems not to leave President Obama either. His recent comment on Prof. Herny Gates’ (no, he has no relations with Bill Gates!) – who incidentally is also a friend of the president- arrest had resurfaced the racial profiling issue and has brought enough criticism as he called the act by Sergeant James Crowley ‘stupid’. For the uninitiated, James Crowley, who is a police academy expert on racial profiling, went to Professor Henry Louis Gates’ home near Harvard University last week to investigate a report of burglary and demanded Gates show him identification. Police say Gates at first refused and accused the officer of racism. Gates was charged with disorderly conduct. The charge was later dropped and Gates has since demanded an apology from Crowley. On this, Obama literally went overboard and commented that, ‘…the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home…”. He further said that, “…there’s a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately. That’s just a fact.” It seems that most of the ‘Whites’ of the US took this comment personally, especially those who are close to media.

However, a deep analysis would clarify why Obama isn’t wrong. America has a long deep-rooted history of discrimination. It is a land where women witnessed discrimination and were not allowed to vote till 1920 (they were allowed only after the passage of the Nineteenth Amendment to the constitution). Blacks’ struggle for their rights is no more a new and jaw-dropping story. Going by the data of the US Department of Justice, by the midyear of 2008, 4,777 black male inmates per 100,000 black males held in state and federal prisons and local jails, compared to 727 white male inmates.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Monday, January 07, 2013

The real budget story

You will find no number crunching, no jargon and no guru speak from so called Dalal Street mavens on the Budget. sutanu guru & pramod kumar bring you the real budget story – a story of the lead up to the 2014 Lok Sabha Elections.

Days after the Congress-led UPA won that famous victory that left die hard pundits gasping for breath and excuses, some people were quietly and furiously busy in one house at Gurudwara Rakabganj Road and two houses in South Avenue in Delhi. Many of you must have read about how that non-descript residence in Rakabganj Road was actually the war room of Rahul Gandhi; most of you may not be aware that the house was ‘loaned’ by the owner of one of the biggest media houses of the country. The foundations for the Union Budget 2009-10 that was presented by Pranab Mukherjee were being laid by these mostly low profile characters who passionately believe that Rahul Gandhi must, and will, become the Prime Minister of India by 2014. Do remember: Pranab Mukherjee was yet to be ‘officially’ announced as the Finance Minister at that time.

Soon after the Cabinet was formed, it met formally to vet the address of President Pratibha Patil to the Joint session of Parliament. This meeting itself, more or less finalised the broad contours of the forthcoming budget. One key decision taken during this meeting was to abolish the controversial and widely criticized fringe benefit tax. Some of you who do recall the ‘routine’ and ‘yawn inducing’ speech of the President in the first week of June will not be surprised at all by the speech that Pranab Mukherjee finally delivered on July 6. In fact, even as the Finance Minister was busy meeting industrialists, industry lobby bodies and representatives of trade unions, farmers and many other self appointed guardians of public well being, he always found time to meet and discuss the broad agenda of the forthcoming budget with the other members of the core committee of Congress. This core committee includes Sonia Gandhi, Manmohan Singh, Pranab Mukherjee, P. Chidambaram and Ahmed Patel. In addition, informal channels with Rahul Gandhi’s team of close advisors were always open.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Thursday, January 03, 2013

Of Kings, Queens, Mistresses & 456 million paupers

Mr. Prime Minister, congratulations! We, the 456 million paupers (living below the miserable poverty line, for information), feel delighted that 62 years after Independence, India has you as our Prime Minister, for a second term...

“Eat well Mr. Prime Minister, every morning, afternoon and night. At your age, you could perhaps choose to eat a healthy diet; with a good mix of fibres, vitamins, minerals, carbohydrates and proteins too. Hope you don’t have trouble planning a good diet. We, the 456 million poverty stricken vagrants (or should we use ‘paupers’, which surely sounds better) prefer to stick to the calorie method of eating that you very kindly introduced to us some decades back. It’s safe, simple to remember and doesn’t get into the stupidities of deciding a diet control plan. Well, someone from your ilk had once told us that to be considered paupers, we should be eating less than 2,100 calories per day if we live in urban areas; and less than 2,400 calories per day if we live in rural areas.

Brilliant, we should say. Firstly, there are days when some of us permanently homeless scallywags temporarily drift above the poverty line having had our quota of calories; at least it gives us a good feeling on those days that we’re not ‘below the poverty line’. Secondly, we’ve heard that eating less keeps one healthy, slim, away from the headaches of following a GM diet, and if research is to be believed (TIME magazine, nothing less), life expectancy of rodents and monkeys has been increased by dramatically restricting the amount of calories taken every day; the same effect can be replicated in humans too. Don’t worry dear Mr. Prime Minister, we’re well acquainted with rodents and monkeys; some of us live with them, some of us live like them, and some fortunate ones of us live only as long as them...”

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

CHINA: TAXING POLICY

Restrictive tax policy will affect China’s foreign investment flows

The move definitely fills the pockets of the Chinese treasury, but it would discourage the institutional investors, who would withhold their investment plans fearing the possibility of paying higher tax. Moreover foreign investors, who are reliant on dividend payouts, would act more cautiously before dishing out their hard earned money for the Red Chip companies. This would not only have implications on the companies but would also affect the huge foreign investments which China gloats over.

“It is important for China to rebalance its pattern of growth to get more growth from services and consumption, and less from industry,” explains Dr. Louis Kuijs, Senior Economist, World Bank. A more rational tax policy combined with shift in focus from manufacturing to other industries is what China needs to continue its double digit growth. Shells are best left exported!

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.