Friday, August 31, 2012

INDIA’S 100 MOST PROFITABLE COMPANIES

John Danner, Senior Fellow, Lester Center for Entrepreneurship, Haas School of Business, UC Berkeley
 
Conversely, big company managers need to understand what it takes to really listen to customer’s needs and wants, be willing to improvise as well as maintain high quality consistency, and give their people freedom to explore as well as execute new ideas. These are precisely the skills and culture that entrepreneurs relish, whether by personal style or market necessity or both.

But, today’s business schools train students to manage the enterprises of yesterday’s successful entrepreneurs. Classes focus on the issues involved in running large, established companies. Indeed, many MBA graduates see their future careers in the offices and cubicles of these firms. The crucible for both entrepreneurship and innovation usually requires experimentation, failure, reformulation and resilience. Reality is probably the best teacher for this.

Even business schools can provide such a crucible, by encouraging students to “creatively collide” with one another’s ideas, and experiment with their business visions early and often knowing that failures are highly likely but also represent superb learning opportunities to improve strategies for later efforts. The more interdisciplinary the crucible, the better opportunities for experimenting and learning at an early stage.

Profound economic growth, not to mention meaningful improvements in global security and environmental sustainability, will not come from today’s markets in the developed world; it will come from new ventures, products and services focused on the needs and aspirations of the four billion people who now live on less than $10 a day. This is where the future and fate of capitalism resides.

That’s the entrepreneurial challenge for which B-schools need to prepare their students, whether as future CEOs and business managers responsible for ensuring their large corporations survive for another generation, or as would-be entrepreneurs courageous enough to create the next “Power 100s” of the world.


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Thursday, August 30, 2012

“THE #2 RANK IS NOT THE ONLY THING THAT ONE WORKS FOR.”

Arvind Saxena, Director – Sales & Marketing, Hyundai Motors India, explains to B&E why competition is no threat to Hyundai in India, and why Hyundai does not need to worry about capacity expansions

B&E: Over the past few months, the competition in the small car segment has been growing thicker. And the future promises nothing different. Is this situation a threat for Hyundai India?
Arvind Saxena (AS): Competition pushes you to bring in more innovation and enhance the market size. We fight with the same brands worldwide and we haven’t really limited ourselves on any front, during the past 12 years. Actually, Hyundai has been the most lethal competitor for players in the Indian auto industry. We are far stronger today as compared to what we were when we entered the market. We have a wide network, full range of cars and most importantly, have consumer trust. Hence, we are today very much geared up to face the rising competition.

B&E: After Hyundai launched the Santro in 1998, it took the company just six months to capture the second spot in the Indian market. How do you plan to save that spot now that your company is under great threat from the Tata Nano?
AS: Slots, positions and spots in the Indian automotive industry are very subjective matters to talk about. We definitely want to be a major player and we will do everything possible to achieve greater heights. For instance, we are expanding out network and working on future models. Many things are being done to retain our #2 position in the industry.



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Wednesday, August 29, 2012

Jailhouse ruckus

Serving jail term, Lindsay Lohan is reportedly receiving preferential treatment, and the jail authorities are believed to have been extra kind to her. She is allowed to cry and speak with the personnel, and moreover she does not have to share her cell either. No wonder the other inmates flipped out and refused to indulge in recreational activities with her, and some even threatened her! Meanwhile her ex, Wilmer Valderrama, says he still adores her and hopes that she sails through this tough time.


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Friday, August 24, 2012

Is your work killing you?

Working non-stop could be the ladder to a promotion and a host of health problems...

Most urban Indians are caught-up in a fast-paced lifestyle where home is a place to quickly gulp down dinner, exchange a word or two with the children and other members of the family, and then either pin the phone to the ear or start punching the keys of the laptop. Not that you’re to be blamed; yes, the times are such, but while you flow with the rapids, it’s also important to be wary of the rocks along the way. And stress happens to be the harmful side-effect of overwork, which can lead to various health issues. A survey conducted by the Chartered Society of Physiotherapy reported that one in every four employees is risking their health by working continuously without breaks or by reporting to duty while ill and working for long hours with no space for exercise in their schedules. In our country, people employed in the BPO sector suffer additional stress as their body clock goes for a six as their work begins at night and ends at day-break.

Dr. Ajay Pal Singh, Consultant Psychiatrist at Max Healthcare, agrees with the findings of the survey and adds, “It’s only in the last couple of years that cases of health issues due to stress have started pouring in. I have seen patients struck with depression, hypertension, loss in immunity, obesity and back and joint problems due to overwork.” In this competitive environment, overwork is inevitable. “But by accommodating some exercise like half-an-hour walks daily, healthy and timely eating habits, and taking a vacation once in a while, will reduce the risk of health problems”, said Dr. Singh.


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Wednesday, August 22, 2012

Fatwa’ed!

The times they are a-changin’ and established norms and beliefs are now being challenged...

When people strongly believe in something, then sometimes, their minds become less receptive to factors that threaten to alter what they hold close to their hearts. This subconscious mind-play subjects people, and religious heads especially, to contend with the difficult tight-rope walk between religious diktats and changing mind-sets. Battling a similar situation, the Darululoom Deoband group, was recently in the news, allegedly for issuing a fatwa against women working alongside men without veiling themselves. The Darululoom Deoband is an Islamic school located in a town called Deoband in Uttar Pradesh. Founded in 1886 by renowned Muslim scholars, this school propagates Sunni Islam in the Indian sub-continent.

This injunction was vehemently condemned by liberal Muslim women around the country. The Deputy Vice-Chancellor of Darululoom Deoband, Maulana Abdul Khaliq Madrasi, however clarified, “We did issue a fatwa, which was based on the religious ruling, but it was an opinion meant to be personal and not to be issued for public interest. This fatwa was not for all women. It was for one person only.” The meaning of fatwa is also misunderstood by many. It’s said to be a legal pronouncement in Islam issued by religious specialists, but it is to be noted that the opinion of the religious specialist may or may not be followed by the advice seeker. Talking about the fatwa, Maulana Abdul further elaborated, “We keep getting a lot of letters where several problems of people have to be addressed. The fatwa department sends back the instruction issued by the clerics in a sealed envelope. Similarly, we had received a letter where a woman needed advice on what she should do to support her family. So, we issued a fatwa to her advising her to work in a place where there are women only and if not, then definitely do purdah (wear a burka).”


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Tuesday, August 21, 2012

POWER: TRANSMISSION LOSS

T&D losses and power theft have to be addressed in a flagrantly strict manner – arrest the power stealers and publicise their conviction

They not only trouble consumers but also lead to huge financial losses. Assocham estimates that 1/3rd of the investments in the 11th five year plan is wasted because of T&D losses.

Regulation over return has hurt private interests in T&D which needs to change. Privatization of the distribution process has helped states like Delhi and parts of Maharashtra, but the model has not been successful in Orissa. The reason is that state electricity boards play a role in regulating tariffs and political interests come into play, which discourages private companies from investing. States like Karnataka and Uttar Pradesh, which are considering giving their power grid to private hands, must keep this in mind.

But there’s a shortcut to all this. Start arresting power stealers and publicise this in a big way to reduce power theft. It worked for reducing drunk-driving, it’ll work for this too.


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Monday, August 20, 2012

GODREJ: RETAIL

Godrej Industries has suddenly become more enthusiastic about its retail plans, especially in new concepts of retailing (like gourmet food). Is there any radical plan we’re missing or is this it? by Angshuman Paul

Critically speaking, for years, there has been a critical ever present wedge within the Godrej group – and that almost always has been the lack of post haste speed to change within the organisation. Not that simply ‘changing’ is enough to give one market leadership (well, there’s only a thin line between dynamism and childish over-eagerness), but the fact remains that Godrej has suffered due to some of their static strategic models. The white goods segment is a classic example of how this message was evident to the collective psyche of the 23,000 strong Godrej family. Many years back, the Godrej name was enough to sell any item relevant to a family household, with products from Godrej & Boyce Mfg. Co. Ltd. (the appliances division of Godrej), ruling a psychological monopoly in the minds of the Indian consumer. And then dynamics changed. The biggest hits came from LG and Samsung, who sneaked into the show using a combination of pure marketing and advertising blitz and an exhaustive retail penetration that had the Indian consumer believing in Korean brands. Apparently, the possessing of a cost efficient manufacturing base (by Godrej) was not enough when confronted with such aggressive rivals who were dependent, perhaps rightly, more on marketing warfare than on ensuring backward integration.

The melee became more competitive during the last three years when arch-rival Videocon fiercely entered the retail arena. Still, Godrej – believing in their brand pedigree – were non-committal in recognising the tremendous business potential retailing offered. And although Godrej took the lead amongst Indian companies in forging strategic alliances with multinationals and brands like Sara Lee, Hershey, P&G and even the iconic GE, it still was not too eager to ramp up their feet-on-street plans. Senior Godrej officials accept that Godrej didn’t have any intentions to foray into retail then. But now, with changing times, the newer expansion model – of increasing retail presence – has gained better acceptance within the Godrej circles; one reason why there’s a reinvigorated enthusiasm to expand their retail ventures – Lifespace and Nature’s Basket.

Clearly, Godrej today has to reassess its response quotient to change. The brand is perhaps as respectable as it has been for many years. But the Indian consumer is not what he used to be years ago. Today, there are factors that are more critical to the typical Indian buyer – pricing, loan schemes, discount offers, service, product brand varieties, qualities and so on so forth – than a simple brand name. It’s not too late yet to change... but it soon will be...




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Tuesday, August 14, 2012

largest m-cap growth by steven philip warner

Despite litigations, Sun Pharmaceuticals has managed to give its investors the largest m-cap growth by steven philip warner
 
Over the past half-a-decade, Sun Pharma has outperformed the Sensex by 168.65%, while it outdid the Nifty by 170.71%. There is certainly more to just profits that has made Sun Pharma gain a literal “Hold” call for many years now, as Baldota says, “We work towards maximizing ‘long term’ shareholder wealth. In our history, any shareholder who has held on to Sun Pharma shares for typically over two years, has seen positive returns.” Sun has a base of 8000 multi-cultural employees – arguably the largest amongst all drug makers in the country.

But Sun Pharma has gone against global statistical research and claims that it has always kept R&D and quality control on top of its priority list. Since FY2002-03, the company has consistently spent anywhere between 8% to 13% of its annual turnover on R&D. Till date, Sun has filed for 233 patent applications, with a success rate of 33%. To ensure quality, the company has quality centres placed at six USFDA & German approved plants across the country. During the past financial year, the company introduced 42 new products. Strangely, the company was also involved in providing healthcare, education, disaster relief and utilities in the country – in other words, CSR, an area which modern management theorists advise a corporation to stay away from, as investments in CSR definitely reduce shareholders’ wealth.

But Baldota defends, “It’s difficult to attribute price changes of the stock to something very specific, but suffice to say that our consistent message to our investors has been that we create lasting value. Exceeding shareholders expectations requires as a necessary condition that all stakeholders feel proud of their being a part of Sun.”

Baldota’s statements could have been easily relegated by any critical analyst as being plain marketing speech, if it were not for the 2010 report by HDFC Securities, which confirms that now Sun Pharma’s addressable market size is all set to touch $12.6 billion by 2011!


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