Monday, September 10, 2012

Hell Dorados

Post the frenzied activity that begins in any sector opened up in the Indian Economy, many entrants, including the larger ones, lose out due to lack of long term strategies and inability to adapt to business dynamics. Ultimately, market forces take them off road, putting paid to all the aspirations that convinced them to enter the sector in the first place

Terms like intense competition, mergers and acquisitions and low margins are not new to Indian market by any chance in today’s day and age. After all, the Indian economy is labelled as one of the most lucrative on the global charts. That is precisely why, as numerous sectors like telecom, aviation, retail and insurance opened up one after another; a number of Indian business houses ignored all considerations of synergies, potential growth impediments or possible gloomy scenarios and took the plunge, led by the Tatas, Birlas, Ambanis, Mallyas, et al.

History has repeatedly taught an important lesson that these players seemed to have missed. The story of El Dorado, the mythical ‘City of Gold’ that captured the fancy of European explorers, gained popular appeal in the early 15th century. Multiple expeditions were undertaken in vain to discover this city; till better sense ultimately prevailed, two centuries later! The fact is that a number of Indian businesses have also been victims of two precarious beliefs w.r.t. the so called sunrise sectors – one that the sheer depth of their resources would ensure that they prevail over every eventuality in the sector concerned and second that their stupendous success in their current businesses automatically made them the best bets for these new business opportunities.

Be it television manufacturing that saw a frenzy of competition in the early 1990s and eventually led to many manufacturers exiting or the telecom services sector, wherein new entrants in the industry like MTS, Uninor and Videocon have been disturbing the margins of the big boys like Reliance and Bharti Airtel to the core, such instances abound. In fact, some of the new entrants in telecom are realising that they themselves face a hard time. The fact is that with the huge number of players per circle now and the continuously ARPUs (Average Revenue Per User), it’s only a matter of time before consolidation happens. In retail, we saw the entry of players like Reliance and Birla along with some zealous competitors like Subhiksha and Vishal Megamart. Most of them faced the perils of untethered expansion and had to shut down stores. Subhiksha and Vishal Mega Mart ultimately went belly up. Similarly, entrants into aviation like Air Deccan and Sahara had to bow out of the race as they found their margins getting unsustainable due to myriad reasons. And despite the consolidation phase that passed them by, the remaining players have found it just too hard to keep their balance sheets in the black.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

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posted by Editorial at 4:36 PM

Saturday, September 08, 2012

Whether or not your baby will grow up to be an obese Adult, is partly in your hands!

According to American Dietetic Association and WHO, breast-feeding is necessary for six months, after which it’s ideal to give other food along with breast-feed till 12 months. This practice develops immunity, reduces the risk of asthma, blood pressure and heart diseases. Mothers who subscribe to the trend of quickly giving-up on breast-feeding, should know that it is also beneficial for them as it lowers risk of breast and ovarian cancer, lowers post-partum depression, accelerates the process of shrinking the uterus and thus resume the menstrual cycle, and the calorie expenditure helps mothers return to their pre-pregnancy weight sooner.

Well, promoting breast-feeding doesn’t imply that formula-feed is harmful. It makes for a healthy diet, but it also leads to obesity. Dr. Rahul Nagpal, a pediatrician at Max Healthcare, expounds, “There have been observations and numerous medical papers, which prove that bottle-fed babies, at five years of age, have turned out heavier than those who were breast-fed, reason being that formula milk is tougher to digest than human milk. And formula foods have higher calorie content. Formula food manufacturers try to provide the same nutrients and contents that is present in mother’s milk, although it cannot match up because there are so many components in mother’s milk, which cannot be made otherwise.” Stating other possible reasons for their obesity, Dr. Nagpal said, “In breast-feeding, the intake depends on the baby. In bottle-feeding, the mother will want the baby to finish the entire bottle of milk, thereby over-feeding the baby. Slowly, the baby’s appetite increases, fat cells develop and these fat cells show-up in adolescence.”

So mommies, if you don’t want to spend your midlife fretting about your teen kids fretting about their weight, you know what to do. Or not to do.
 

Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

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posted by Editorial at 3:44 PM

Tuesday, September 04, 2012

B&E: There are many brands, one of which is Woodland, which have never believed in the franchisee model for fear of manipulation by the partner(s). What is your opinion?
NPS: There are risks for sure, but it is about taking that chance. You have to ensure that nobody is involved in malpractices that would disturb your brand image. We at Samsonite took the plunge and it has worked out great for us. It is through this very franchisee route that we plan to open 100 more stores by the end of this fiscal year.

B&E: To neutralise the drop in footfalls and turnover thereof during the slowdown, many retailers resorted to discounts. But Samsonite didn’t. How did you deal with the dry situation?
NPS: Rightly said, we did not promote ourselves through discounts because panic price-cut only kills the brand. We only gave discounts in multi-branded outlets; and in the case of our own stores, we combated the fall in revenues by slashing our operating costs. For instance, while in some stores we reduced the number of personnel by 1/3rd, in others, we simply reworked our logistics.

B&E: Will organised retail in India be able to double its size to account for 10% of the total pie by 2012?
NPS: I can’t give a figure here, but if you look at Samsonite, our organised retail is growing at a CAGR of 30%. And there are other brands which are growing equally fast. Considering that there are a many new brands coming up by 2012, organised retail will definitely become much more structured and bigger.



 

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posted by Editorial at 2:45 PM

Monday, September 03, 2012

OUR MPS ALWAYS HAVE A CONSENSUS ON PERSONAL GAINS AND DIFFERENCES ON NATIONAL IMPERATIVES!

Recently, a much awaited bill with respect to our honorable members of Parliament was given a nod! The bill seeking a three-fold hike in MPs’ salaries from Rs 16,000 to Rs 50,000 and increase of 200 per cent in their allowances was passed. Besides this, the daily allowance of every MP when he or she attended Parliament during session was doubled; constituency allowance and office expense allowance also saw a two-fold growth; and conveyance allowance saw a four-fold growth. In all, this hike entails an annual expenditure of Rs 146 crores and an expenditure of Rs 118 crore on payment of arrears!

However, a lot has been deliberated and written on this issue, and many arguments and counter arguments have been put forth with respect to this bill. Without getting into that argument, what I found most interesting was the manner in which the MPs built their consensus on this particular bill. It was amazing to observe how everyone got united, seemingly forgetting their personal and political differences, and lobbied for the raise. Political parties whose ideologies, in normal circumstance, rarely synchronize with each other, were seen singing the same tune. Rashtriya Janta Dal along with Samajwadi Party (SP), Bahujan Samaj Party (BSP), Janata Dal (United), Shiv Sena and Trinamool Congress were seen to be on the same side. While some other parties didn’t join this unison directly, they were not seen opposing the move either. In fact, despite the first round of salary raise (an increase of Rs 10,000 along with increased perks compared to the current allowance MPs receive), almost all members of the Rashtriya Janata Dal (RJD), Samajwadi Party (SP), Akali Dal, Janata Dal (United), Shiv Sena and Bahujan Samaj Party demanded a further hike. Parties like Bharatiya Janata Party (BJP) and others refrained from participating in the debate.

It is no secret that our political parties – who generally are habituated to never come to any consensus on any given issue – were seen creating no fuss or roadblocks when the issue was all about their own personal interest. It reminds me of a similar phenomenon that happened a few years back, when the Supreme Court directed the Election Commission to frame stringent laws regarding rejection of nomination papers for people with criminal background. There again, our MPs were found voicing their protests – to the move of barring criminals from standing for elections – in unison! On being asked to reveal their criminal antecedents (for the uninitiated, we have more than a fourth of our Parliamentarians facing some form of criminal charge) along with their assets and educational qualifications while filing their election nominations, the entire political class came together, rejected the notification, and without much debate and discussion, sidelined the proposal. In the same lines, our parliamentarians got together when a proposal was mooted to nationalize the money kept by Indians in Swiss bank accounts – and blatantly ignored the same without any discussion, for all the possible obvious reasons!

Most interestingly, amidst all this, the much awaited and hugely important Indian Medical Council bill got passed without any debates or discussion. And why not, when almost all parties were on the same side of the field over salary rise, such debate would have diluted the momentary united spirit! And mind you, this medical council bill which got passed was enacted 76 years ago! Though it took a long time to pass this bill, even after knowing the kind of rampant corruption that exists in the Medical Council of India, not many bills are as fortunate. Almost every time, it is the same old story. Our honorable parliamentarians only wear their respective political ideologies when it comes to significant bills which directly or indirectly affect the most significant stake holders of the country – i.e its citizens. What is even worse is that with an average attendance of around 60%, the parliamentarians do not even feel the need to debate upon such significant bills which have been pending for years. Be it the pesticide management bill 2008, the seeds bill 2004, the coal mine amendment bill 2000, the communal violence bill 2005, the representation of people bill 2006, the insurance law bill 2008, the TRAI bill 2008, the railway property amendment bill 2008, the drugs and cosmetics bill 2007, the motor vehicle bill 2007, the National Road Safety and Traffic Management Board Bill, and numerous other bills – all are still pending just because of a lack of consensus!


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posted by Editorial at 3:31 PM

Saturday, September 01, 2012

Iran: The war is over, finally!

With the Obama administration playing down the Bushehr reactor issue, US finally accepts Iran; B&E brings out a completely hidden fact of the timing of the State Department’s pro-Iran statement

“We recognize that the Bushehr reactor is designed to provide civilian nuclear power and do not view it as a proliferation risk!” With this one statement on August 13, 2010, Darby Holladay of the US State Department created history by changing a decades’ long policy stand of United States towards Iran. The statement was brilliantly timed, given the propensity with which Israel was preparing to attack Iran’s nuclear plant. The statement also defined a historic moment in US-Israel relations, by communicating to Israel that the US was no longer ready to blindly accept any anti-Iran tirade.

These voices from the Obama government express an opinion considered improbable just a few months back, when US was said to be on the brink of attacking Iran. In February 2010, Obama had warned, “Despite their (Iran’s) posturing that their nuclear power is only for civilian use, they in fact continue to pursue a course that would lead to weaponization.” Given such a negative statement, the current US stand is momentous.

For the trained political analyst though, the past year should have been enough to give much evidence of what was around the corner in not only Obama-Iran relations, but most importantly Obama-Israel relations. Last year, when US Vice President Joe Biden, during an interview with ABC Sunday, announced that US would not “stand in the way” of Israel attacking Iran, US President Barack Obama had immediately backtracked asserting that US had “absolutely not” given any go ahead to Israel for attacking Iran. Obama had reiterated further, “We have said directly to the Israelis that it is important to try and resolve this in an international setting in a way that does not create major conflict in the Middle East.” For Israel, that was bad news, and not just because of worsening political relations with US – Israeli fighter crafts would have had to pass over Iraq to attack Iran; and Iraq was under US control then.


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posted by Editorial at 12:01 PM