Friday, January 25, 2008

Having silenced competitors, Rio Tinto’s bid for Alcan is a perfect corporate suicide tale in the making…

Give what names you wish to the Rio Tinto management, but the bitter reality is that a logical strategist derives no pleasure in realising that while Alcan’s shares were trading at just $61.03 per share on the NYSE (on May 4, 2007) before the share price was artificially puff ed-up due to the bid-war, Rio Tinto offered it a rollicking $101 per share (as on July 25, 2007) – a breathtaking premium of 65.5% over its true value, perhaps in an attempt to wash away the competition!

Tom Albanese, CEO, Rio Tinto, tries to justify his company’s logic concerning ‘true value’ as, “We’re very comfortable with the fact that we’ve found the right balance between the compelling offer for Alcan shareholders & a Rio Tinto offer that’s consistent with our approach to value…” However, this too falls fl at when considered that the current market value of Alcan stands at just $32.92 billion which is yet again overvalued (as proven by the fact that Alcan share volumes traded rose by a deafening 1587.1% on the subsequent trading session after May 7, 2007) only due to the recent two-month long bidding rally as the total market value of Alcan was just $22.08 billion before the bid started!

For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative


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Friday, January 18, 2008

It is better to be an expensive bike maker as that makes money

In the meantime, Rahul’s two sons (Rajiv and Sanjiv) who were at the helm of Bajaj Auto, allegedly reported most critical differences over management issues। Consider this Bike Maker – despite various analysts bemoaning the move, Rajiv Bajaj, the MD of Bajaj Auto, in February this year announced his unique plans to exit the 100cc segment, the largest segment in the motorcycle industry (61% of total industry sales). When we had questioned him, he commented to B&E, “I want to be in a segment which makes money. I don’t think 100cc will make money in the future... It is better to be an expensive bike maker as that makes money...” Not surprisingly, it took him less than a quarter to do a volte-face to comment again that the industry misread their strategy as they simply wanted to give a ‘better’ 100cc product. [What’s the latest report card then? The first quarter results (April- June 2007) came in bleeding. Profits fell 15% to Rs.2.26 billion; sales staggered down to Rs.21.1 billion (from Rs.22.03 billion)].

For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative


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Thursday, January 10, 2008

Learning from their formative violent past no one else but the...the deformed future generation...

This phenomenon has spread across more developed continents too. In South Asia, most militia organizations find it easier to recruit kids in their terrorist organisations, while in more developed countries of Western Europe & especially the US, peer pressure, frustration, identity crisis, jealousy & distorted childhood is giving rise to new generation of trigger happy children, who for a momentary pleasure of raised adrenaline can anytime go out for a killing spree in schools/colleges, such incidence of mass firing have became regular feature in the US.

At the crossroads of the millennium, mankind needs to take certain crucial decisions, as to whether all these, happening in the name of development (or in absence of it), would essentially make this world a happier place to live in or not? Which is certainly not so to begin with, it is better for mankind to go back to their basic instinct & make sure that their young ones are taken care of.
For Complete IIPM Article, Click here

Source: IIPM Editorial, 2008

An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
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