Gulliver’s paradox!!!

ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...

Real estate prices & resistance from small retailers could stop the Reliance juggernaut

“We are not afraid of any competition,” comments Raghu Pillai, President & CEO Reliance, as he interacts with Business & Economy on the eve of the launch of the first Reliance Hypermart in Ahmedabad, Gujarat. Coming from an official at Reliance, that’s hardly a statement that could engender any element of consternation in the listener. Besides growth, nonchalance for competitors has also become a way of life for India’s most valuable company.

As far as retail is concerned, Chairman Mukesh Ambani does have reasons to celebrate. Those anticipating a brutal war happening between Reliance & Wal- Mart, have reasons to be sorely disappointed. The Bharti-Wal-Mart ship, after navigating through cumbersome rules & regulations, is marking a relatively low key debut with wholesale cash & carry operations. Meanwhile, the spectre of Reliance only gets larger, with 240 Reliance Fresh stores already set up & Reliance Digital off the mark. And with Reliance Mart, even the Pantaloons, Tatas & Birlas could find it immensely daunting to match the onslaught.

It’s interesting to note how the August 15 launch of the 165,000 square feet mall in Hyderabad has been timed with the 60th year of Indian Independence, ostensibly to herald it as another revolution, an ode to the Indian shopper, with his unique tastes & preferences. Mukesh calls it a landmark attempt from Reliance to provide an “international shopping experience to all our customers at unmatched affordability, guaranteed quality & choice of products & services.” The company plans 30 such outlets by the end of 2007 and 500 by 2010, a blistering pace compared to the incumbent Pantaloon, which has only managed 66, since inception in 2001. But the average consumer, who’s already experienced Big Bazaars, may ask, “Where’s the revolution out here?”

Maybe not the pioneer, but has that ever deterred Reliance? States Parimal Nathwani, Group President-Corporate Affairs, Reliance Retail, “Even in Infocomm time (when Mukesh had launched it), Reliance moved to the top very quickly, despite being a late entrant. We grow very fast.” With its plethora of tie-ups, Reliance is diff erentiating itself with a number of unique brands & highly competitive prices. When asked by B&E if the company would like to give a low price challenge like Wal-Mart, the otherwise exuberant Pillai comes up with a very guarded response, “We will be off erring all the products with best possible price. But we will not only fight the price game on price alone...” An insider, on condition of anonymity, revealed that the company was retailing quite a few products at below cost price to attract buyers. Trust Reliance (slated investments of Rs.250 billion in retail), to be able to afford such extravagances.

However, if Reliance has the strengths of Wal-Mart, it may face quite similar challenges. The first challenge, of course, is real estate. Pillai agrees that huge gambles have to be taken on which property to invest in. To compete on prices, Reliance would try to open up its stores away from the city, but that would turn off customers. When asked about plans for a hypermart in New Delhi, a Reliance official stated plans for one in Ghaziabad. Due to constraints of property, Reliance is not going the franchise route. But with its deep pockets & minimum policy hurdles, Reliance is in a position to take up the best of what’s available.

Furthermore, the Wal-Mart experience with bad publicity is known to all. And quite ominously, Reliance is already facing the brunt of small retailers. Reliance Fresh stores have been attacked in Kolkata & Ranchi. Even though Reliance is not ‘foreign’, it’s business model is quite similar to Wal-Mart, and small retailers now dread & despise the way Reliance is spreading its tentacles across the country. In that sense, while Reliance is symbolizing liberation for consumers, it seems to be symbolising subjugation for small retailers. While organised retail is not Reliance alone, the company could unfortunately end up becoming the most likely and visible target for angst.

States Pillai on the protests, “There will always be opposing points of view, if you see job creation opportunities, the benefits far outweigh the pitfalls. We will lose some links in the value chain. But these will be links that are not adding any value.” He also reiterates how organised retail will be around $60 billion in a span of 5-10 years, which will still be only 15-20% of the total retail space in the country. In addition, Reliance is taking the very critical step of engaging with small grocery shops in the country for B2B opportunities, an initiative which, according to Pillai, would be launched soon.

Clearly, while maintaining superior value for customers will have to remain high on the agenda, Reliance must also ensure that its initiatives to benefit the retail sector as a whole, move much beyond the realms of publicity. Indeed the threat for Reliance is not the competition, but the fear this ‘Gulliver of Indian retail’ strikes in the hearts of adversaries. Surely, it needs more friends among the ‘Liliputs’ than foes!

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Coke showers drops of joy

ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...

Sometimes a soft drink is more than just a fizzy, sugared liquid. Sometimes it symbolises an exhilarating lifestyle or, at times, a more humane & community-engaged face of the organisation. At least, that’s how the fizzy drink maker Coca Cola wants to market itself now. Getting more fizz out of the bottle, the soft drink major has recently unleashed a brand new corporate campaign – ‘Little Drops of Joy’ – for India. Put together by Prasoon Joshi headed McCann–Erickson, the campaign ropes in emotions of denizens of this country to strengthen Coke’s position in India. The new corporate logo & communication primarily highlights the fact that Coca-Cola has been a part of every day life of its consumers and the company is going gung ho with a 360-degree communication initiative for this campaign. Further, to put a stymie against the environmental related issues & unhealthy factors, the fizzy drink maker also cashed in the particular platform to unleash its ‘5-Pillar’ strategy that stands for Portfolio, People, Planet, Partners & Performance. The strategy includes initiatives such as Coca-Cola’s plan to build an equipment testing facility at Hyderabad to ensure their commitment towards quality. The company also plans to make its product portfolio exclusively customised for India. The emphasis would now be on local tastes with a pinch of health to it.

India plays a major role in the scheme of things for both Coca-Cola & its arch rival PepsiCo. And in an effort to show its further commitment for this country and ante up its ammunition to tap the immense opportunities available, the company would also be shelling out $250 million over a period of next three years to create bottling capacities for new product offerings, along with value creation for all its business partners. Hope these little drops of joy turn out to be big for Coke.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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A+ve ‘follow on’?

IIPM PUBLICATION

It depends on the primary market

According to CLSA Asia-Pacific, Indian firms may raise a jaw dropping $18-20 billion through equity issues in the rest of 2007. After a series of fl op issues, the maddening response to the recently concluded public issues of Vishal Mega Mart, ICICI & DLF, prove that investors have decided to go all the way. The kind of treatment these public issues will get on listing will surely set the tone for the upcoming July IPOs viz Omaxe, HDIL, Purvankar Projects et al.

With some big companies lined up to tap capital markets, some even for the second time, investors are betting to win big-time. But investors should fi rst weigh the options and then should take a call accordingly; blindly joining the bandwagon will perhaps lead nowhere. A point in case is Spice Telecom (which is coming with an IPO to raise Rs.6.32 million), whose listing – though much hyped to the retail investor – has been rejected by NSE as the company’s accumulated losses exceeded its net worth!

Nevertheless, 2007 will see the Indian equity boom reaching new highs and breaching all records. The only potential threat is a possible interest rate or CRR hike by RBI in the forthcoming monetary policy on July 31. But with inflation seemingly controlled, such a move seems quite improbable.

B&E research: Gyanendra K.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Huff Puff
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Huff Puff

IIPM MANAGEMENT INSTITUTE

Lalu Prasad Yadav emerges as a transformational CEO by launching strategic initiatives that are fashioning Indian Railways as a 21st century corporation...

There would have been snide sniggers last year if someone had the temerity to suggest that Railway Minister Lalu Prasad Yadav of Bihar fame would emerge as one of the hottest CEOs of India Inc.. Yet, the rambunctious Yadav is transforming Indian Railways into a consumer-oriented company that’s pursuing all kinds of corporate strategies and relentlessly chasing profits

So there was this newspaper that once ran a photograph of Lalu standing with a herd of buff aloes; with a caption that mentioned, “Lalu, third from left !” And there lies the wonder of Lalu Prasad Yadav, the politician and now Union Minister for Railways; a man whose branding has always traditionally hovered around buff aloes and dairy products. But now, with his valiant transformation attempts on the Indian Railways, Lalu Prasad will perhaps be now known as a true blue, no holds barred Chief Executive Officer; and perhaps one, which India Inc. would look up to... Well, one day... And as we said, perhaps.

Laying down his corporate vision as he presented the Railway Budget to the Parliament, Lalu Yadav stated: “The general perception so far has been that Railways’ finances cannot be improved without increasing second class passenger fares. But my approach is entirely different. In my view, improvements can only be brought about by raising the quality of services, reducing unit costs and sharing the resultant gain with customers. Therefore, instead of following the beaten path, we decided to tread a new one.” The Railways will never be the same again. What exactly has the colourful Minister done to make analysts drool over the transformation of Indian Railways from a government department to a 21st century corporation that understands and executes strategy with precision? Lalu Yadav seems to have mastered two management precepts: The Railways needs to increase long term profitability; and the Railways needs to increase market share. Most of the bold and innovative initiatives unleashed by Yadav revolve around these two goals. Even more important, while previous CEOs (Railway Ministers) have relied on populist schemes for passengers, this CEO has actually focused on the less glamorous freight business to refashion the future of Indian Railways.

An overwhelmingly dominant player in the Indian freight business once upon a time, Indian Railways has been steadily losing market share to rival operators. From a huge 80% of the freight market in 1947, the Indian Railways has nosedived to about 20%, with road transport operators and companies taking the business away from Railways. This year, Lalu has initiated never before seen competitive strategies to battle competition; and our man Lalu doesn’t seem interested in taking prisoners.

Railways will now offer a loyalty discount to consumers who transport more goods on freight trains; given the fact that almost 80% of Railways’ revenues are contributed by freight. There will also be big differentials between peak and off season rates with off season discounts of up to 30%. Most significantly, private companies are being encouraged to invest capital in an ‘own your wagon’ scheme. These investors will get preferential treatment for freight movements. No wonder, India Inc is lavishing praise on Yadav! Says Amit Mitra, Secretary General, FICCI: “I think it is a very forward looking & market oriented budget. I would say even pragmatic budget,” pointing to Lalu’s initiative of allowing private firms to run container trains under the Indian Railways.

Another move is the construction of dedicated freight corridors that will connect the eastern and western seaboards of India. Lalu is investing Rs.220 billion in these corridors which, once completed, will drastically reduce the time to distance ratio, giving Railways a strategic edge over road transport.

The quest for increased market shares – and to fight low cost air carriers – can be seen even in the passenger segment. Though questionable on being a pro-rich move rather than being pro-poor, Lalu has ensured an 18% drop in the price of AC-2 tier tickets, while AC-3 tier prices have dropped by 10%. Perhaps to counter criticism, Lalu has also launched the Garib Rath, an economy train service connecting major Indian cities. The AC- 3 tier prices in these trains will be 25% lower than other trains. Analysts clearly seem to share Lalu’s optimism that this will lead to improved market shares.

So much for market shares! CEO Lalu has also been paying a lot of attention to the bottom lines in the past one year. Last year, the Railways increased by 4 to 8 tonnes the load carried by each wagon. An increase of just one tonne per wagon translates into 10 million tones more of freight carried without an extra penny increase in costs. As in business process re-engineering, Lalu has managed to increase freight loading capacity by 100 million tonnes without spending any money and generating an additional Rs.50 billion in revenues. Not surprisingly, this has been largely responsible for the organisation declaring a surplus of more than Rs.110 billion in fiscal 2005- 06, despite a substantial increase in input prices of diesel and electricity. The prospects for the fiscal year 2006- 07 look even brighter still.

That’s because the capacity of each wagon is being increased from 64 tonnes to 70 tonnes this year. In a few years’ time, Lalu plans to increase that to 80 tonnes per wagon. By that time, Lalu hopes to have completed the dedicated freight corridors linking east and west, which will dramatically reduce travel time for long distance freight trains, and thus sustaining increased profitability.

While the freight business will deliver the big bucks, Yadav has taken smart steps to reduce losses even in the passenger segment. The most important of these is the decision to increase the number of coaches in long distance trains to about 24 (from 16 coaches at most). The addition of these coaches will enable waitlisted passengers to travel, adding Rs.2 billion to the kitty. Yet another innovative measure is the optional upgrading of normal passengers into the AC class when seats in AC class go vacant, giving another similar Rs.2 billion. CEO Yadav also kick-started a scheme where services like catering will be auctioned through bidding. This has resulted in a 56% revenue increase in this segment to Rs.13 billion in 2005-06.

Yet, there is the last frontier that CEO Lalu has to cross. The Railways owns the largest amount of real estate in the country. If Lalu can find a way to leverage this real estate strategically, this rustic politician can join the pantheon of corporate visionaries. Clearly, Lalu Yadav and Railways are on a roll. All that it has taken is to borrow some simple and fundamental principles of modern corporate management and transplant them into his organization. No wonder, an obsolete and effete government department is being transformed into a charged up and aggressive corporation, without the huff s & the puff s of the past. Indian Railways is alive; and the buff alo king leads!

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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The New Age Dabur

IIPM PUBLICATION

The restructuring of the Dabur Group is truly unique, since the core business is now being run by non-family professionals; while the Burmans have given up executive positions in the core company to take charge of the new growth businesses. While talking about such a strategic management restructuring, V. C. Burman, Chairman, Dabur India told B&E, “It was in response to the changing dynamics of business... the family has a trusteeship role to follow, both for perpetuating the family business and in preserving & growing the business.” Amit Burman, who has taken charge of Dabur Foods told B&E, “New, high growth businesses require entrepreneurial zeal and are better suited to members of the family.”

The restructuring exercise did wonders for Dabur as they ventured into new areas through acquisitions and went on a massive expansion spree. States Duggal, “Inorganic or acquisition is a key strategy for growth at Dabur India. The growth can come both from the domestic as well as international markets. But one must look at strategic fit of the target in order to add value to the company.” For instance, Dabur’s acquisition of Balsara (a homegrown herbal company) for Rs.1.43 billion in January 2005 fitted very well with Dabur’s core competency of herbal flank. Rajan Varma, CFO, Dabur India told B&E, “Balsara on a standalone basis contributed 19% of total turnover (of last year).” And in FY06 Balsara’s home products recorded revenues of Rs.1,685 million, a growth of 42% over last year.

The period 2002-06 is heralded to be the most crucial for Dabur. At a time when the FMCG sector as a whole was experiencing sluggish growth and FICCI’s FMCG survey claiming that in FY06, the sector will grow at a miniscule 2%. The survey also pointed out that only segments that will stand out are food & personal care. Realising the potential of the two segments, the FMCG players in the country started to strengthen their portfolio with these two cash cows. Dabur was not an exceptional too! So on March 29, 2006, Dabur unveiled its Vision 2010, wherein by 2010 the main focus areas will be expansion, acquisition and a product portfolio comprising of food & personal care products.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Axis of faith?

IIPM MANAGEMENT INSTITUTE

UTI Bank has come a long way since 2001, but has to counter the new challenges

In the month of January 2008, UTI Bank is slated to change its name to Axis Bank, and in the process break away from a legacy of triumphs as well as tragedies. The board felt that the existence of several shareholder-unrelated entities using the UTI brand was leading to a brand confusion, which led them to take this decision.

While the branding legacy will be lost, the bank itself has found its way quite well, especially after it was written off due to the US-64 scam in 2001. With deposits of Rs.580 billion and over 5.9 million accounts by the end of March 2007, the bank has come a long way from its humble beginnings in December 1993, when its deposits stood at Rs.1.15 billion. The stride forward has been truly remarkable. Within a few years of operations, the bank went public in September 1998 with a Rs.710 million public issue, which was eventually oversubscribed by 1.2 times.

Commenting on the bank’s achievements, CMD Dr. P. J. Nayak stated, “At the end of March 2007, the bank increased its reach to 332 cities, towns & villages across the country through 508 branches & extension counters and 2,341 ATMs.” The bourses are ecstatic as well. The share price was trading at Rs.559.35 and market capitalization was worth Rs.162.85 billion (as on June 1, 2007). The results have been overwhelming; the bank has registered net profits of Rs.6.6 billion for 2007, a massive surge of 38.5% over last year’s profits.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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The of late entrepreneur!

IIPM PUBLICATION

The Bharti group is barging into retail and finance...

We all are aware of the impeccable brand image that Airtel has created in the minds of Indian consumers. Bharti Group now plans to replicate the same success of Airtel with it’s new ventures, too. Bharti Group, which enjoys leadership in the telecom segment for as many years as the existence of wireless telecom segment itself, is now trying a connect with consumers through financial services (insurance). And helping Bharti in this mission is the French insurance giant AXA. The JV for the life insurance segment will invest Rs.5 billion in the next 2-3 years and will have a country wide presence through multi-channel distribution. Besides, Bharti is also strategizing for mutual funds.

Of late, the Bharti Group has entered into the retail segment too. Bharti along with Fortune 500 company – Walmart will study and evaluate the retail market in India and identify business opportunities together within the existing guidelines.

Bharti plans to shell out $2-2.5 billion by 2015 to develop 10 million square feet across all cities. With organised retailing being the next big thing, Bharti too will ring loud in this segment.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Whether you ‘agri’ or not...

IIPM MANAGEMENT INSTITUTE

...Bharti-Walmart, Adani Enterprise and many more are betting big on Indian farms & on retailing of fruits, veggies, poultry, dairy products, staples and processed foods

India’s GDP is growing at a fast pace of 9.4% in 2006-07 with a high tide in all key sectors, except agricultural industry that has reported a mere 2.7% growth, as against 6% in 2005. In spite of being the pulse of our nation, the government’s focus has shift ed from agriculture to the manufacturing and services sector, in order to expedite the growth of the country. Apart from this, the decline has some of the same old reasons that the North-East monsoons that aid the growth of Rabi crop fell almost 21% below expectations.

But not all is gloomy in the agricultural sector. For instance, the food processing industry happens to be the priority sector this year and the government has granted a generous amount of Rs.10 billion, especially for agro-processing infrastructure & market development. Corporations, such as ITC with Aashirvaad and Kitchens of India, Bharti Field Fresh et al, have also penetrated this industry with an exotic range of premium quality fresh fruits and vegetables to offer to the markets worldwide. Of course, ITC’s e-choupal supply strategy is the most hyped one currently in the agriculture sector. ITC officials commented to B&E, “We will have more rural coverage through our e-choupals and we are also planning to make cold chains in many of these areas near agri-lands. This becomes important as agriculture will play an important role in achieving our export targets. ITC is also testing the option of having agri-retailing presence in all the areas of the country within a few years.”

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Apna Sapna...

36TH Full Time Programme In Planning & Entrepreneu...

...a decent salary

The world is essentially not fair. And this is once again being vindicated by stepmotherly attitude shown towards the socalled unorganised sector, which in spite of contributing employment to 93% of India’s work force, does not even fall under the purview of Minimum Wages Act, Equal Remuneration Act and Workmen Compensation Act. The draft report prepared by Commission (headed by Rajya Sabha MP Arjun Sengupta) reveals that 70% of the unorganized sector work force is getting wages below what is stipulated under Minimum Wage Act. Even after decades of economic development, the minimum wages asserted for the lowest category of work remains stagnated at Rs.22.50 a day. Around 396 million people of this country survive on this measly wage by which they are supposed to cover their needs of food, shelter, education for children and healthcare. We know this is just next to impossible. It is high time that the Ministry of Labour for all its passionate talks, should make sure that the minimum wages should essentially include substantial sum to take care a family of three. Too big a demand??

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Wal-Mart’s goes on a diet!

IIPM RANKED AHEAD OF FIVE OF THE IIMS

Wal-Mart shareholders have a reason to smile. The world’s largest retailer has decided to trim down its store growth (a move to maintain its traditional focus on low prices) in areas like healthcare and environment. It has gone back on its earlier plans and will scale down the number of earlier announced US Supercenter Store openings this fiscal by more than 25%. This would help the company bring down its portion of expenditure by $1.5 billion in the current fiscal year. Moreover, it would enhance the sales of the stores as well! To cut down the fixed expenditure – Wal-Mart has plans to open 190-200 new Supercenters in the US in 2008, the average number standing at 170 for the coming three years. Wal-Mart had said last year, that it will open 265-270 Supercenters in 2008. However, now, around 80 of the Super centers that were scheduled to open next year will now be set up in 2009. Critics who had attacked the company on varied issues like healthcare to wages to buying from China were dismissed by Wal-Mart executives. Instead, Wal-Mart flaunted a bunch of recent initiatives like its $4 generic drug programme and the expansion of its in-store health clinics and much more.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Going going . . .gone?!

IIPM PUBLICATION

Exasperated with greenhouse emissions beyond human control, scientists prescribe another 15 - 25 years before we face drastic shifts in climate patterns. Resources have been exploited to the ‘t’ while alternatives are still at nascent stages. Under such circumstances, some areas pose a major threat to our future. Here’s a rundown on the most potent of all. . .

Fish n’ chips, a legend!
Man’s greed has forever got the better of him, so it’s hardly astounding that despite knowing awfully well the after effects of hurting perhaps the most imperative of all creatures summing the aquatic food-systems, in those gigantic killer-trawlers, they went ahead and killed fishes by the millions of tonnes. With such over-fishing affecting the marine food web with dwindling numbers of turtles, sharks, seabirds and other predators because we take away their source of food – fish! Besides, commercial fishing is also to blame for needlessly eliminating thousands of dolphins, whales, sea turtles and other animals every year on account of their getting trapped in the trawler nets! To add salt to injury, these killer-trawlers have begun to penetrate deeper waters affecting even the deep-sea ecosystems.

Making matters worse are the world’s governments that are actually promoting this mindless plunder. Subsidies to fisheries are pegged at $30-$34 billion annually – approximately 25% of world fishing revenue! Nearly $20 billion are "harmful" subsidies promoting intensified fishing by providing support for boat construction and modernisation, fishing equipment, fuel and other operational costs!

Due to such apathy on our side, 70% of the world's marine fish stocks are fully exploited, over-exploited or depleted. Today, 1/3rd of all fishing stocks worldwide have reduced to 10% of their normal levels, affecting the marine ecosystems and fishermen alike. If not curbed now, such brazen acts, threaten to damage, the aquatic ecosystems beyond repair. To miss out on fish n’ chips or a ‘prawn masala’, the choice is in our hands.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Dance with the wolves in the woods!

IIPM MANAGEMENT INSTITUTE

NGOs need to take the battle directly into the corridors of power

They fight for a clean, green & just India. They act as pressure groups, directing a large part of their ire against the government for its complicity in violating the environment and letting the MNCs exploit India’s natural heritage. The green activists claim to be apolitical but their agenda falls into the category of ‘new Left ’. And this new Left is nothing but a civil society movement, which raises all issues with political connotations but refuses to join the mainstream politics. Social activist & Ramon Magsaysay award winner, Rajendra Singh told B&E, “They can be vehicle for social & political change but not a facilitator. The NGOs as such should refrain from participating in the elections, but those in the vanguard of mass movements must not shy away from joining the political process.” However, Dr. Sunilam (former MLA, Multai, Madhya Pradesh) is an exception. He has enhanced the power of civil society by dovetailing mass movement with active politics. Sharing his experience as a social activist & politician, Dr. Sunilam told B&E, “When I became an MLA, my voice was heard more intently by the CM, as well as it got wider coverage in the media too. Th is helped in more prompt action being taken on the issues brought forth by me.” He added that “as a first step, NGOs should encourage Lok Umeedwaar (public candidate) to stand for elections across the country.”

NGO leaders need to give a serious thought if they really want to be taken seriously and want things to change. They will have to dispel all fears and believe in the power of the people whom they represent rather than relying on celebrities to espouse their cause.

B&E edit bureau: Anil Pandey

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Now over to the idiot box!

IIPM PUBLICATION

The following points are the ruling criteria for selecting and short-listing the winning TVC ads: Product positioning clarity; clinching benefit to the brand; presence of a power idea; visibility of brand personality; expectancy of communication; single-minded focus of message; reward to the prospect; visually arresting and painstaking craftsmanship. Here’s a peek into our TVC verdict for the fortnight ended May 22, 2007. Ready to groove?

BRAND: Reliance Communications
AGENCY: Mudra
BASELINE: Discover net connect

DESCRIPTION: A man is leaving for a car rally and is getting emotional as he leaves behind a pregnant wife. Throughout the rally, he misses her but thanks to Reliance net connect, he is able to chat with her. He misses her all the more when she doesn’t come online for a while and when she does; she is accompanied by their newly born baby. Overwhelmed, he stops the car, kisses the baby’s picture on the laptop and lets his competitors go ahead. The ad ends with a shot where he’s with his wife and is picking up the kid in his arms while the winners of the rally raise the cup.

4Ps TAKE: This ad of Reliance net connect connects and how! Bit on the longish side, it makes you laugh in some parts and leaves you sad and anxious in others but in the end, one is all smiles. No less than a short film in itself, the ad puts forward the ‘buy now cliché’ – Reliance’s network works everywhere and takes the tried and tested emotional route. But, the magic is that the ad doesn’t harp on it and lets its execution speak. The direction and the story board deserve all the accolades which convert an average idea into a brilliant one. The soft and soothing song in the background add to the emotional appeal. The ad scores high on almost all parameters like product positioning clarity, rewards to the prospect, visibility of the brand personality and the backdrop (of the rally) brings out the essence of the network quotient brilliantly!

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

‘Reliance’ evokes ‘fresh’ controversy!

IIPM MANAGEMENT INSTITUTE

Reliance Industries have established their Reliance Fresh fast enough, but looks like they have caused a lot of havoc as well. Their retail stores have been facing much opposition from local vegetable vendors, who (fearful of a loss to their business) looted outlets in Ranchi and led demonstrations in Indore against their opening. Reliance Fresh is a Reliance Industries retail initiative which sells fruits and vegetables. In places like Tamil Nadu and West Bengal, even political parties are protesting against their operations. Working on a large scale, these stores benefit from economies of scale and are able to offer cheaper prices to customers and better prices to farmers, which have resulted in them becoming very popular. This has caused apprehension Amongst the millions who work in the largely unorganised retail market. Well, what is good for one, is not always good for another. Looks like this western- style set-up of supermarkets will take time to settle in India.

For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Continental carnage; or a wishful end?

IIPM PUBLICATION

Presenting an expected anti-thesis to consolidation in European banking

First of all, let’s get the context infallibly right. The latest ABN Amro deal is a deal that dwarfs any other in the history of the financial services industry. And it is also a deal that everyone is presently rooting for. A whopping $91.2 and $98.5 billion is what Barclays Bank, on one hand, and Royal Bank of Scotland (with Fortis and Santander Central Hispano SA), on the other, have brought to the table for ABN Amro. A fierce battle is being forecasted and if you miss this issue, you just might have missed evolution in the making...or as close to it as possible.

No doubt, European banking has seen many big ticket cross-border M&A deals taking place recently (refer table). But the compelling critique now is that perhaps most of these M&A deals are being attempted based on peer pressure (of competitors doing the same) rather than clear logic! Sadly, in European banking today, fallaciously and perniciously, consolidation is being considered more sacred than banking itself. But why is it that banks are fighting it tooth and nail? Citing one of the reasons, John Hitchins, UK Banking Leader, Price Water house Coopers, analysed to B&E, “A matured domestic market is one of the factors leading banks in Europe to merge in order to get entry into new markets.” But haven’t consecutive reports from KPMG, BCG, McKinsey, and various international universities confirmed that between 50% to 80% M&As ‘will’ fail?

In fact, INSEAD Professor Jean Dermine’s classic paper on European banking has proved how there are huge risks involved with consolidation in European banking; in one eye-popping example, he shows how, say in Switzerland, the cost of bailing out even one ‘consolidated’ banking failure would cost the Swiss government almost 24% of the Swiss GDP! But are the European banking behemoths listening? Given the increasing size of buyouts, one doesn’t even have to suspect the answer; it’s a clear ‘No’! Unless the EU wakes up to this clarion call, global publications perhaps wouldn’t have to wait too long for the cover story of the decade!

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative