The new buzz word in Motown: Affordable luxury

The Indian automobile industry is facing one of its toughest periods in over a decade. In the period between April 2012 and February 2013, the industry registered a negative growth of -4.64% in the passenger cars segment. Sales of small and medium automobile segments are slacking off, which is in sharp contrast to the scorching pace of growth witnessed till a couple of years ago. Between FY2005-06 and FY2010-11, passenger car sales blazed at 15.2% per annum. That fell to 4.7% in FY2011-12, before languishing this past financial year.

The only silver lining has been the luxury end of the car market, which has been an exception to this anaemic trend. While the overall passenger vehicle industry has grown at a CAGR of 19.04% in the past four years, and the luxury vehicle segment has grown at a CAGR of 32.02% during the same period. Currently, of total car sales of 2.5 million, the luxury segment contributes only 1.2%. But the segment has been growing steadily over the past couple of years and is expected to contribute 4% of the total car sales in the next eight years. Experts believe that demand for luxury cars will rise to at least 50,000 vehicles by 2015, from 25,000 units sold in 2012.


Mercedes-Benz, which came to India in 1994, was the largest seller of luxury cars in India till a couple of years ago when fellow German rival, BMW, beat the company to the numero uno position in 2009. That year, Mercedes recorded 3,202 units in sales whereas BMW sold a good 3,587 units, topping the sales chart. Audi, which was then just making its presence felt in the Indian market, registered 58% of whopping yoy growth in 2009, selling 1,987 units. Since 2009, the competition has gotten more intense and scalding hot. The German players have been at each other’s throat, straining their muscles to outperform in the competitive luxury car market, which has grown thicker with the entry of newer players like Volvo and Jaguar Land Rover.

On one hand we have the entry level luxury brands like BMW, Audi, Mercedes and Volvo; on the other hand there are the mid-level luxury brands like Jaguar and Land Rover (starting from about Rs.5 million) and then there are the ultra-luxe brands, some of the biggest names in the sports car and super luxury segment, like Bentley, Lamborghini, Rolls Royce, Ferrari, Aston Martin, Maserati and Bugatti. The arrival of these big guns in the Indian market over the past two years has further redefined and segmented the luxury car market. So we now have the entry-level, mid-level, super luxury, sports cars and SUVs. Another key trend in this luxury space is the sudden upsurge in the entry level cars starting as low as Rs.2.2 million.

The trend was kicked off with BMW launching its X1 SUV model and lowering the entry level of its luxury cars to about Rs.2.2 million (ex-showroom). The idea is to generate volumes and so players like BMW are launching new products in the affordable luxury segment, where the demand actually is. In the process, the traditional luxury segment has now morphed into the premium category with most luxury car makers moving towards affordable luxury. In order to vroom ahead in this new “affordable luxury” category, BMW has introduced its sub-brand Mini Cooper, which it introduced at last year’s auto show in Delhi. It is planning to launch three models of this sub-brand in India − Mini Cooper, Mini Cooper convertible and Countryman, priced aggressively between Rs.2.49 million to Rs.3.19 million. Rivals Audi and Mercedes have also taken steps to create excitement in the entry level luxury segment. Last year saw Audi introduce its Q3 model (priced at Rs.2.67 million) while Mercedes has launched its B-class priced competitively at Rs.2.10 million, which competes with BMW X1 (priced at Rs.2.24 million).

As the churn in the luxury car market gets thicker, players are pulling out all the tricks to stay ahead in the competition by creating new segments and looking for new markets to generate demand. “As we move into the future, we are well positioned with a forward-looking strategy, progressive roadmap along with an exciting and emotional portfolio to tap the available market opportunities,” says Philipp Von Sahr, President, BMW India. So, BMW is tapping the market for commercial use of luxury cars such as premium hotels and cab owners and has gone for selling the stripped versions of its traditional luxury cars to generate incremental demand.

Likewise, Audi is contemplating to launch several initiatives on the pro\duct front this year. It plans to assemble the entry level Q3 SUV, which is giving good competition to the BMW X1, in India by the second quarter of this year. The price of Audi Q3, which starts from Rs.2.6 million, is expected to come down further once Audi starts assembling the Q3 in India. The car maker at present assembles sedan A4, A6 and SUV Q5, Q7 in India. Even, Mercedes has plans for expanding its product portfolio. “We would be launching one or two products, starting this year, with a B-class launch. And soon we would be launching an A-class product as well. Secondly, we are investing heavily on production at our factories. We want to make our CKD (complete knocked down) units because it take 2-3 years to get the CKD portfolio ready,” says Debashis Mitra, who was Director, Sales & Marketing, Mercedes India, before quitting just a few days ago.

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Source : IIPM Editorial, 2013.
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

BBA Management Education

Get real White House

Officials promoting Obama’s Drone programme continue to churn out the same old rhetoric of how grateful those in the tribal areas are every time a Drone strike is launched on Waziristan. Well I have news for the White House. Open your eyes, stop being in the denial mode and listen to the voices of Internally Displaced Persons (IDP’s) from Pakistan’s South Waziristan Agency (SWA), currently camped in front of the National Press Club in Islamabad on a hunger strike.

“The IDPs from Mehsud tribe have demanded an immediate halt to US Drone strikes and prolonged military operations in SWA which was launched in 2009 against the Tehreek-e-Taliban Pakistan (TTP). Protestors are vowing to continue their protest until the halt of military operations, which has resulted in the mass displacement of many (civilians ) from the region,” Saleem Mehsud, a Waziristan-based journalist said.

Last week, Farzarna Bari, Human Right Activists, Pakistan, Tehreek-e-Insaaf leader from SWA, Doost Mohammad Khan and elders of the Mehsud tribe participated in the protest camp. The IDPs stated that the Pakistan government should also take the matter seriously because “the coming generation of the Mehsud tribe are facing immense problems and are being deprived of basic facilities as a result of military operations”.

Advocate, Sherpao Khan Mehsud said the sit-in would continue until their demands were met. He said that drone attacks were not only killing innocents but were also violating the sovereignty of Pakistan. Mehsud Youth President, Jamal Shah stressed that “the military operation should be stopped immediately in which houses, markets, schools and colleges had been destroyed.” He also said the military operation “Rah-e-Nijaat” was started in 2009 in Waziristan and now hundreds have been forced into slums and living in terrible conditions.

The Mehsuds are not alone in calling for an end to drone strikes. I spoke to two members of the Wazir tribe. Arman Khan Wazir told me, “I am from Waziristan and because of drones, people are turning against the Pakistan Army and America. Children are joining Taliban because they have no facilities and they are becoming destructive minded. I can’t explain the destruction there in words.”

Imran Khan has long condemned drone attacks calling them a violation of international laws which also violate Pakistan’s sovereignty and is calling for America to identify the victims of drone strikes. He also criticised the government saying it had turned the country into a “Banana Republic” and that US authorities “were allowed to hit and kill any civilian at will inside Pakistani territory”.

Always quick to be on the scene for peaceful protestors, a tweet from Imran Khan read, “my full support for our FATA youth protesting drone attacks in front of Islamabad Press Club. Will try to go personally to join their protest.”

Says activist Raheem Ullah Wazir, “if we start doling out justice from the skies than we should get rid of the courts from the world. If someone is a culprit, he should be brought out into the open so that truth and reality is known to the world. Secondly, where is the sanctity of international borders? This is going to set a very wrong precedent. The money that is invested in drone technology could have been used to seal the Pakistan-Afghanistan border to keep out insurgents, if any.”

In an email, Hanif Ullaha, a Peshawar-based journalist, highlighted his arguments against the use of drones in an email to me, laying out the following points: it is illegal, induces collateral damage, abuses international law and norms for strike, is counterproductive and there is rampant extrajudicial killing... if Nazis could be brought to trial and prosecuted, why are the killers being allowed to get away scot free here.

I asked several people whether drones radicalized young people in the tribal areas and the answer was an unanimous “yes”. A man (name withheld) told me, “They take their revenge on the Pakistan army and get closer to Al Qaeda”. He admitted that he himself had considered joining the Taliban after the drone strikes but decided to stick to his studies.

It is important to note that a recent bombing of an army checkpoint which killed 35 people was claimed by Taliban to be in retaliation for the killing of two of its commanders by drone strikes. I argue that these “secondary” drone victims should also be added to the death figures to present a true picture of the impact of warfare. The Taliban also attacked the Pakistan government for what it called its “complicity” in drone strikes.

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Source : IIPM Editorial, 2013.
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

BBA Management Education

Fairs can spell money!

Cultural and religious festivals in India are of immense importance

Truly, religious festivals have not been confined to religious activities. Their contributions extend to economic development, employment creation and tourism. Among all, Kumbh Mela is one of its kind, claiming to be the world’s largest religious festival. The mela, which occurs once in three years in four different places including Allahabad, Haridwar, Ujjain and Nashik alternatively, is happening currently in Allahabad. Around 100 million people are expected to join this 55-day festival. However, the economic contribution too is as gigantic as its crowd. A report by the Associated Chambers of Commerce and Industry of India estimated that the mela will generate about $2.2 billion of income for the city and create thousands of jobs. However, it is not the only religious festival generating revenue and employments for Indians; there are other melas including Sonepur Mela and Onam in the southern state of Kerala. The Sonepur mela brings good business to the local people. There were over 600 shops where sale of around 3,000 heads of cattle has been recorded. Onam, a festival of Kerala, has taken the international route, being celebrated in different places of the Middle-East including Dubai and Qatar.

Still, there are many lessons to learn from the way many countries have modified their festivals and marketed them at an international level. The Rio de Janeiro carnival has positioned itself as an international event, attracting an estimated 1.1 million visitors to the city in 2012 and with 5.3 million people taking part in street parties, an increase from 4.9 million people in 2011. Similarly, the Venice carnival attracts over three million tourists. Another classic example is that of the Mardi Gras carnival in the United States which generates a direct revenue of $ 144 million (more than $ 500 million by some other estimates) attracting more than five million visitors in New Orleans every year.

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Source : IIPM Editorial, 2013.
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

BBA Management Education

“The best medium to deliver broadband Internet – fiber optics”

Sachin Deshpande, Chief Operating Officer, Radius Infratel, on the challenges and opportunities associated with Fibre-Optic-To-The-Home (FTTH) technology

B&E: How important is Fibre-Optic-To-The-Home (FTTH) for attaining better broadband penetration in the country?
Sachin Deshpande (SD): From a dial-up connection speed of about 256 kbps to now a slightly respectable figure of 2 Mbps or more, the Indian consumer’s need for Internet speed has been growing fast. And so is the case with their dependence on broadband due to high usage of social networking and video streaming. Given the technology, today, broadband connections can be given only by wireless service providers. The best medium that can deliver these broadband-based services is fiber optical network. That is why the concept of providing fiber-optic-to-the-home came in. There have been some attempts by incumbents to provide optical fiber connectivity to homes but they have really not worked well. On the other hand, we have countries like China, South Korea and Japan, where people have been using 100+ Mbps broadband speed for the last 5-6 years. About 3 years back, we saw the opportunity. While the service providers have been making attempts to set up optical fiber infrastructure, we thought that an infrastructure service provider like us should chip in to provide optical-fiber-to-the-home. We are putting in place optical fiber based last mile connectivity that can be utilised by various service providers to reach out to their customers.

B&E: What are the challenges with FTTH?
SD: It is a new concept in the country because traditionally, telecom infrastructure has been laid out by service providers in India. Today, we install this network independently and then convince telecom operators to use it. Convincing them is the first challenge. We also have to engage various builders and developers who are coming up with new residential and commercial projects. They are a very important part of our ecosystem. Most of the leading operators have liked the idea of embedding the last mile connectivity into their project through FTTH technology.

B&E: Could you elaborate on the technical part of FTTH?
SD: The concept of optical fiber to the home comes from GPON (Gigabit Passive Optical Network) technology. This technology came in existence about a decade ago. Apart from this, Radius Infratel holds the patent for NANO ( Neutral Access Network Operation) technology in more than 25 countries. This solution allows us to integrate multiple service providers that provide a variety of services. We are a company that lives on innovation. India’s first smart pre-paid electricity meter was brought to market by Radius. We have our research labs in Noida and Delhi. These labs work on both innovation as well as localisation of already existing technologies.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

For More IIPM Info, Visit below mentioned IIPM articles

 

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

ExecutiveMBA

National

Maruti Suzuki: labour unrest
Voilence leaves India Inc. aghast
Some are calling it a conspiracy while others say that it is purely an issue between labour and management. But the bloodshed at Maruti Suzuki’s Manesar factory in Haryana, which claimed the life of one senior manager and injured close to 100 others, has triggered fears of the bad old days of stubborn trade unionism. While Maruti is counted among the best wage providers in the Manesar industrial belt, 40% of the workers at the Manesar plant are hired on a contractual basis. As such their salaries could be about 50% of the payout given to the regular workforce. With rising aspirations of a young workforce and the company’s continuous efforts on cost cutting, the simmering discontent eventually took an ugly turn. A similar kind of unrest at the same plant last year had cost the company a whopping Rs.25 billion. This time round the figure could be even higher as the company may have to keep the plant shut for more than a month. For a plant that on an average rolls out a car every 13 seconds, the loss would be staggering. The lockdown will also affect production of the company’s bestselling Swift Desire diesel car. Apart from financial losses, this kind of forced shutdown will also damage India’s ambition of becoming a global automobile manufacturing hub.

wipro: profitable quarter
Good news for IT sector
Indian IT service provider Wipro Ltd. announced a 18.37% y-o-y rise in its consolidated net profit of Rs.15.80 billion for the first quarter of the financial year 2012-13. Unlike its larger peer Infosys, whose earnings results have failed to excite the market, Wipro good numbers have brought cheer to the IT sector. The company says its clients are resorting to more and more outsourcing in an attempt to reduce their operational expenses, and Wipro is looking to gain from its clients’ spending. The company also said that in today’s complex business environment, global corporations are increasingly investing in transformational technology initiatives to improve competitiveness. Wipro sees this shift as an opportunity for it to lead this change and help customers differentiate in this fast evolving market However, the company has projected a flat growth of $1.54 billion revenue from its global IT services for the second quarter (July-September) of this fiscal. Also, despite the increase in its profit, the third-largest software firm of the country has hit some speed bumps in terms of revenue earned in dollar. The company recorded a 1.36% dip in terms of dollar revenue for the first quarter this fiscal. IT services revenue in dollar terms was impacted by $25 million due to cross-currency volatility. IT services business accounts for 78% of the company’s revenue and 93% of its operating income, which at 21% in the first quarter was 1% lower y-o-y but fractionally (0.3%) higher sequentially from 20.7% in the previous quarter. In the June quarter the firm also managed to bag 37 new customers and employed 2,632 new employees in IT services. India’s $100 billion plus export driven outsourcing sector is facing a tough time as big clients from Europe and North America have cut down their overall spending.

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Source : IIPM Editorial, 2013.
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

Innovation Ecosystems

Ron Adner, Associate Professor of Business Administration, Tuck School of Business at Dartmouth, Author of the new book The Wide Lens: A New Strategy for Innovation, writes on the role of innovation ecosystems
 
There is a blind spot that undermines great managers in great organisations even when they identify real customer needs, deliver great products, and beat their competition to market.

Philips Electronics fell victim to this blind spot when it spent a fortune to pioneer high-definition television (HDTV) sets in the mid-1980s. The company’s executives drove a development effort that succeeded in creating numerous breakthroughs in television technology, offering picture quality that customers loved and that the competition, at the time, could not match. Yet, despite sterling execution and rave reviews, Philips’s high-definition TV flopped. Even the most brilliant innovation cannot succeed when its value creation depends on other innovations – in this case the high-definition cameras and transmission standards necessary to make high-definition TV work – that fail to arrive on time. Philips was left with a $2.5 billion write-down and little to show for its pioneering efforts by the time HDTV finally took off 20 years later.

Sony suffered from a similar blind spot, winning a pyrrhic victory as it raced to bring its e-reader to market before its rivals, only to discover that even a great e-reader cannot succeed in a market where customers have no easy access to e-books. And Johnson Controls, which developed a new generation of electrical switches and sensors that could dramatically reduce energy waste in buildings and deliver substantial savings to occupants, discovered that unless and until architects, electricians, and a host of other actors adjusted their own routines and updated their own capabilities, the value of its innovations would never be realised.

In all these cases, smart companies and talented managers invested, implemented, and succeeded in bringing genuinely brilliant innovations to market. But after the innovations launched, they failed. The companies understood how their success depends on meeting the needs of their end customers, delivering great innovation, and beating the competition. But all three fell victim to the innovator’s blind spot: failing to see how their success also depended on partners who themselves would need to innovate and agree to adapt in order for their efforts to succeed.

Welcome to the world of innovation ecosystems – a world in which the success of a value proposition depends on creating an alignment of partners who must work together in order to transform a winning idea to a market success. A world in which failing to expand your focus to include your entire ecosystem will set you up for failure. Avoidable failure.

There is a growing trend to not go it alone. In a 2011 survey of senior executives by the Corporate Executive Board, 67% expected new partnerships, and 49% expected new business models, to be critical drivers of their growth in the upcoming five to ten years.

To be sure, great customer insight and execution remain vital. But they are only necessary – not sufficient – conditions for success. Rather, two distinct risks now take center stage:
? Co-innovation Risk: The extent to which

Source : IIPM Editorial, 2013.
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

the success of your innovation depends on the successful commercialisation of other innovations.
? Adoption Chain Risk: The extent to which partners will need to adopt your innovation before end consumers have a chance to assess the full value proposition.

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Can Amazon’s Kindle Fire turn the heat on Apple’s iPad?

The iPad has spawned an array of wannabes and clones but Amazon’s Kindle Fire tablet is being hailed as a truly disruptive product that could shake Apple’s hold on the tablet market.

A100 years from now, when a Pulitzer prize winning author of that generation pens down a book on the consumerisation of IT, he’ll probably pick up year 2011 as the starting point. In more ways than one, 2011 will be remembered as the year that kick-started a train of events, which transformed the technology landscape once and for all. First it was Hewlett Packard (the world’s largest IT corporation) announcing its exit from the PC business. Then Steve Jobs, the world’s most definitive authority on technology passed away. In between the Jeff Bezos led Amazon.com jumped on to the IT (hardware) bandwagon — a domain that had hitherto been left largely untested by the online mega-store.

And on the topic of Amazon’s IT ambition, despite its sensational and bold gambit in the arena of consumer technology, it calls for an audacious leap of faith to even imagine that there can even be a formidable competitor to Apple. Legions of techno geeks will avow that there is none to match Apple when it comes to integrating hardware and software so brilliantly. All the same, none can fail to observe how a single product — the Kindle Fire — launched by Amazon recently, gives this company the potential to achieve a feat that in every way matches Apple’s technology and design prowess.

But before dwelling on how the launch of Kindle Fire can help Amazon grab an enviable standing in the IT industry, it would be pertinent to go over how the company has been faring under founder and CEO Jeff Bezos over the past few years.

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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

An Opportunity that Grabbed us

Benefits of Economy and a Quicker Passage to The Operating table have Made India one of The Front Runners in Medical Tourism. But Critical Failings, from The Government as well as The Private Sector, mean that India is Failing to Adequately tap The Opportunity

Since time immemorial, the mystical land of India has been enchanting foreigners from all over the world. Healing of the body, mind & spirit has been one of the country’s most compelling value propositions, one which even a young Steve Jobs couldn’t resist, many years ago. And as the costs of healthcare have soared, particularly in developing countries, India’s hospitals and physicians have made all possible efforts to become a destination for tourists who seek not just therapeutic solutions but a range of other treatments and sight seeing tours; adding to the “wellness” factor. Almost a decade has passed since medical tourism was originally envisioned as a major phenomenon in India.

A 2009 report by the Confederation of Indian Industries (CII) & McKinsey forecasts that medical tourism will generate $2.4 billion between 2009–2012 for India by attracting 1.1 million health tourists, up from 150,000 in 2002. India’s share in the global tourism industry is expected to rise to around 3% by 2013 (RNCOS report) with revenues of around $3 billion and a CAGR of 26% during 2011–2013.

There are over 3,371 hospitals and around 754,985 registered practitioners catering to the needs of traditional Indian healthcare. Indian hotels are also entering the wellness services market by collaborating with professional organisations in a range of wellness fields. According to the Ministry Of Tourism, as against an ordinary vacationer’s per-capita spend of $3,000 per visitor, the average medical tourist in India shells out more than $7,000 per visit. Traditionally patients from neighbouring SAARC countries and Middle East frequented hospitals in India. But patients from Africa and even Europe and US have started coming only in the last five years. Pricing is the clear advantage. The Planning Commission points out that India is far economical compared to peer countries. For example, heart bypass surgery costs $6,000 in India, $7,894 in Thailand, $10,417 in Singapore, $19,700 in Britain and $23,938 in the US.

India spends roughly 6% of GDP on healthcare and is expected to reach 8% by 2012. Private sector expenditure in healthcare is expected to reach $45 billion by 2012. But in comparison with America’s 15.3%, Switzerland’s 11.3% or France’s 11.1%, the country still falters when it comes to quality as well as quantity of medical facilities. B&E does a reality check to analyse whether the country has really lived up to the hype.

The flip side has majorly been the role of the government; or may we say, the lack of it. Although infrastructure spending for health care has intensified, only the private sector has flourished. Top Indian corporate hospitals like Apollo, Fortis, Wockhardt, Max and Manipal have stepped in to provide quality healthcare and technology. Nearly 75% of health care services and investments in India are provided by the private sector.

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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)

For Feeding Mouths Aplenty

While India continues to reel under The Effect of rising food Prices & Increasing hunger, The Proposed National Food Security Act can be a Panacea. But with a narrow minded Focus & Select targets, The Upcoming Legislation might end up Nowhere & can worsen The Delivery of food grains to The Hungry.

John Van Hengel, born 1923 in Waupan, Wisconsin, was an ordinary man with all vices and sins – as per America’s Second Harvest, a company founded by Hengel himself. He undertook various occupations; from being an ad man to a beer truck driver in Hollywood, married a model, divorced her and underwent spinal surgery post a deadly fight. It was while working at a soup kitchen post his surgery when he met this mother of 10 and her dying husband. She survived by rummaging in food bins and was desperate for a place to both deposit food and check it out – like a bank. Hengel, hooked to the idea, persuaded a grocery store manager to donate surplus food. From a defunct church bakery selling more than 250,000 pounds of food to 36 charities in its first year, America’s Second Harvest was born in 1976, the world’s first Food Bank Chain. For a country like the US with around 20 million people belonging to households suffering from ‘very low food security’ (households where at least one person remains hungry during a year), food banks have been a revolution. But for India, where ITC pioneer Sam Pitroda recently unveiled his ambitious food bank scheme, the 250 million plus hungry population might prove too Herculean a task. The only light at the tunnel end is the National Food Security Bill, touted to hit harder at hunger than NREGA did at poverty. But a clichéd narrow focus and lack of holistic research-backed provisions endanger the entire system of fighting hunger in India.

Despite numerous measures and programmes – Targeted PDS, Mid-Day Meal Scheme, National Food for Work Programme, Antyodaya Anna Yojna and Integrated Child Development Scheme – the number of undernourished people increased from about 210 million in 1990-92 to 252 million in 2005-06. India houses around half the world’s undernourished children. Also, there has been a general decline in per capita calorie consumption in recent decades. Grain mountains and hungry millions continue to coexist. According to the Global Hunger Index 2009, India is ranked 65 among 84 developing countries – worse than nearly 25 Sub-Saharan African countries and all of South Asia, except Bangladesh. The reason – all government schemes have been victims of narrow minded targets, rampant corruption and perpetual battles between central and state government owned entities.

The Targeted Public Distribution Scheme (TDPS) was introduced in 1997 as a revised version of PDS, allegedly serving only the urban poor and being a miserable failure to effectively serve the poorer sections of the population. But even this has slowly bled from the entangled web of poor targeting, high administrative costs, and low effectiveness of the programme. The NFSA, if enacted, mandates the provision of a minimum of 25 kg of rice or wheat to Below Poverty Line (BPL) families per month at Rs.3 per kg. The TDPS targeted same at Rs.4.15 per kg for wheat and Rs.5.65 per kg for rice. But as you go into the depth of the meaning behind each word, the proposed legislation faces sure shot stumbling blocks with the debate regarding the definition of hunger and hungry and the number of BPL families.

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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)

4Ps B&M Exclusive – India’s best Market Research Companies

Objective, accurate and actionable consumer intelligence means the force is with you, for it is widely regarded as the soul of business. But market research companies have to themselves evolve and be in ship shape with respect to the environment in order to stay relevant to their clients. B&E’s sister publication 4Ps B&M undertook a survey on India’s best market research companies, which provides an exclusive insight on the top research firms that make the cut. And surprisingly so, Nielsen isn’t one of them!

For every aspect of marketing we look at, market research is viewed as the logical starting point, and also the end game. Research gives you the input on how you develop your entire market action plan, and let you know about the outcome, thereby helping you plan for the next cycle.

On that very promise, market research has to be one of the most essential investments to make for an organisation. But do companies always understand and appreciate this fact in practice? Or do they believe more in the Jack Welch diktat of being ‘straight from the gut’? While it’s far from being a black and white debate, market research has been alluded to by many industry greats in the past, and not necessarily in the pleasant sense. Henry Ford once famously said, “If I had asked my customers what they wanted, they would have asked for a faster horse!”

There were a number of beliefs that Henry Ford had that were relevant for his time, but aren’t relevant today. But there is one fact that would be hard to ignore even today. In short, though customers look for value maximisation always, it isn’t necessary that they know their value maximiser proposition themselves, despite getting smarter by the day. So can you rely on your own customer when you formulate your market research strategy? One can argue that if customer intelligence was the only criteria, a number of breakthrough innovations, like the iPod would never have come into being. In fact, Apple consistently abides by an aversion to market research to date, just like Infosys in India has an aversion to advertising. Steve Jobs once quoted to Fortune, “We do no market research. We don’t hire consultants.”

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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)

Sizzling Apples, Burning Berries!

With RIM’s Traditional Stronghold Under Attack, Balsillie is hoping to do a Counter Attack in the Tablet Space. But it would be much more Important to Ensure that the Smartphone Battle is not Lost Forever

Apart from his role as Co-CEO, RIM, Jim Balsillie is well known for his repeated unsuccessful attempts to buy a hockey team and take it to his home state of Ontario, Canada. For those who know him, he is the ultimate fitness expert and sports enthusiast. But one would certainly doubt whether Balsillie would count apples as one of his favourite things, given the tit-for-tat slanging match that Jim is into with none other than Apple CEO Steve Jobs.

The match is now more than a mere one off altercation. First we give a quick snapshot of the prologue. Simmering sentiments were spurred among all competitors when Apple was in the midst of Antennagate, the negative backlash linked to iPhone reception problems. Even that time, Apple had chosen to make a generic statement to the effect that smartphones from RIM, Samsung and HTC had similar problems with attenuation and signal loss; a claim to which RIM reacted vociferously. The RIM standoff really started with the Apple quarterly result announcement, where Steve Jobs bragged that RIM would not be able to catch up with Apple any time soon. He got those bragging rights when Apple posted sales of 14.1 million iPhones in the quarter compared to 12.4 million Blackberrys (IDC). Also, on Job’s firing line was the Blackberry OS (RIM plans to upgrade to Blackberry 6 and also bring in the QNX for its upcoming Playbook tablet) as well as the concept of small 7 tablets (like Playbook); in fact he called the latter tweeners! Jobs said that with 3,00,000 applications on Apple’s app store, RIM had a “huge mountain to climb”. Balsillie has responded by taking potshots at antennagate, Adobe Flash (which Apple does not support), reiterated his confidence that 7” tablets will succeed and his belief that Apple’s app centric approach is no longer relevant, since all apps that developers really need are available online. He summed it up by saying that customers were now “getting tired of being told by Apple what to think” and dividing the world into people living within and beyond Apple’s “distortion field”. If recent reports are to be believed, Apples ‘field’ has extended to some of RIM’s enterprise sales personnel, who joined Jobs’ forces recently.

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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)

CEO of Tamilnad Mercantile Bank in conversation with B&E’s

Managing Director and CEO of Tamilnad Mercantile Bank in conversation with B&E’s Avneesh Singh

B&E: Your bank is targetting business worth `26,000 crores in the present financial year? What will be the possible mix of deposits and advances?
GNR: We are looking at a target of `15,000 crores in deposits and `11,000 crores in advances.

B&E: You also have mentioned a target of `500 billion in assets by 2013. What would be your basic? What is your strategy to achieve this target?
GNR: Our strategy is manifold, the simplest one is to open more branches. We have 217 branches as of now and by the end of March 2011, we plan to take the number of branches to 250. Thereafter, in the next 2 to 3 years, we plan to take the number of branches to 500. We have a very aggressive expansion plan to take the staff strength from 2500 to 5000. All these will automatically put us into the bracket of `50,000 crores.

B&E: Many banks like Union Bank, Canara Bank and Andhra Bank have changed their logo as a branding exercise? Do you have any similar rebranding plans in the pipeline?
GNR: A changed logo and a re-branding exercise give added advantages of visibility because when you change your logo, you undertake a lot of publicity; and then people tend to give a lot of recall value to the bank. This is one thing that even we are thinking about; but it is only at a preliminary stage right now. At a right time, we shall also go for what you call brand building or re-branding but right now, it is too early to say anything about it. But re-branding is required and that is why a lot of banks have gone through the same. Once you have already spent 90 years with a particular logo, probably you need to make the society realise that the bank is also changing to show to the world that yes, we are also changing – this is clearly one physical appearance that makes the difference.

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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)

TOYOTA: PRODUCT RECALL

Toyota President Akio Toyoda’s apology was supposed to firefight the recall controversy – it made it worse! Welcome to the world of unintended consequences

The Japanese carmaker on the other end is very confident about a fast recovery and has forecasted a net profit of $892 million for the current fiscal. Apparently this seems to be a very bullish a forecast as compared with a loss of $2.2 billion previously foreseen, and an actual loss of $4.8 billion last year. The forecast also estimates a narrower operating loss of $2.2 billion, compared with a loss of $3.9 billion in the prior November outlook. But strangely, amidst all this, rather than being at the forefront of the public relations efforts of Toyota, Akio Toyoda is preferring to avoid being at the communications forefront, with his latest noncommittal approach to come to the US to attend a scheduled hearing of a Congressional panel on the recall issue – there are now reports of the possibilities of a subpoena against Toyoda being issued if he refuses to appear before the committee. A part of Toyoda’s lack of responsive behaviour is cultural too – Japanese CEOs are not generally groomed to be the spokespersons of their corporations. To that extent, post Akio Morita, it would be rare for the outside world to know of even one Japanese company’s CEO’s name. Toyoda has to realise that breaking these cultural paradigms, he has to single-handedly rebuild the trust of the Toyota brand. For each day of his failing to do this, Toyota loses millions. “Getting the company back on track is Toyoda’s biggest challenge now as the sales have already started showing a decline,” says San Oppenheim’s Christian Breitprescher to B&E (GM and Ford, for example, are offering discounts of up to $1,000 to Toyota owners trading in; a report from UBS suggests that the Japanese automaker is incurring a weekly loss of $155 million from the lost sales since announcing the recall). Toyoda’s has to be an all-guns-blazing firefighting effort, as nothing else will be able to reduce the debilitating fall in sales the company may suffer. Toyoda could well take a sneak look at Sony’s CEO Howard Stringer who is a delightful example of what all positive PR can achieve; and he isn’t even Japanese!

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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)

Macro economic environment in a recession

Firms need to take a holistic view of the macro economic environment in a recession

how is the government?
Firms are constantly making decisions about their near future. In developing economies in particular, the value of imports, like a piece of equipment, a computer or new software for example, depends on the exchange rate. If the government has a monetary policy that is dedicated to stabilise its currency and has conservative fiscal policy, firms will have a relatively clear view of the investment horizon. In that case choosing an array of safe assets with an acceptable return is not that risky.

For instance, countries like Argentina have been able to absorb the shock better than its big neighbours like Brazil or some other countries because its monetary policy stabilises the peso (Argentine currency) to the dollar around a predicable market value. It imposes restrictive capital controls and has a conservative fiscal policy to support its stabilisation plan. It is true that its credit market has felt the impact, but it was not well developed before the crisis. So, one can say that the economic activities in Argentina were not significantly affected by the global crisis. Moreover, because the government taxes the country’s agricultural exports, necessities like beef and grains, revenues have remained stable.

In countries where the government has a floating exchange rate regime and where financial capital can flow freely, relative prices tend to behave erratically during a crisis because fear affects the value of currencies, and thus prices, in unexpected magnitudes. In these cases firms may have to consider relocating to more stable economic environments or to invest in safer assets until the crisis subsides to levels at which the future is more predicable.

As a result, a good understanding of the country’s macroeconomic policy may prove to be important during the process of analysis and planning because successful planning depends in part on the ability of the managers to read the future. And forecasting is more an art than a science. The analyst pieces together different parts of the puzzle to construct a tapestry about the future. The process requires not only formal knowledge of particular production processes, consume behaviour, the characteristics of the markets for the various inputs including labour, fiscal impact on the firm and various other issues, but it also needs to have an open mind to find new niches and to be willing to withstand the storm under an umbrella of falling margins while imagining new ways to allocate the existing assets in the less predicable environment that looms ahead in the next few months of this year.

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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)