Showing posts with label IIPM New Delhi. Show all posts
Showing posts with label IIPM New Delhi. Show all posts

Saturday, October 06, 2012

The Storm is over

The Small Wonder has been Struggling to Match The Demands of its Target Group after The Settlement of the Initial Hype. The Storm is over. B&E gives a Detailed Analysis of The Past Issues and The Future that Lies Ahead for The Nano

And then came a clinching shocker when I picked up the newspapers in the early hours of December 2, 2010. Each month, the Society of Indian Automobile Manufacturers (SIAM) publishes the latest sales figures of all auto brands in India. In November 2010, the SIAM report said that 509 units of the Nano were sold. This, when auto sales actually grew by more than 40%. And believe it or not, Nano sales were lower than that of Mercedes Benz which managed 518 units in November. Look at it this way: the cheapest car in the world sold 509 units in a month when close to 200,000 cars were lapped up by the Indian consumer.

Quite clearly, Ratan Tata seems to be pre-occupied with other unsavoury things even as his Nano dreams seems to be on the verge of unraveling. At the moment, he is angry (let me add justifiably) with the Radia tape leaks and has even taken the matter to the Supreme Court. But sooner or later (if he is not already doing so already), Ratan Tata must summon his top lieutenants and strategists to revive the flagging fortunes of the Nano. At Business & Economy, we refused to be swayed by the early hype about the Nano becoming the best selling car of history. And now, we don’t think it is time to pronounce that the Nano is a colossal bomb. But surely the time has come to ask that simple and straightforward question: Can Ratan Tata Salvage His Nano Dream?

Our colleagues and reporters in Business & Economy and The Sunday Indian spoke to dozens of dealers and people associated with the auto industry in Guawahati, Bhubaneswar, Ahmedabad, Kochi, Delhi, Chandigarh and many other places. The first impressions that we gathered was that Tata dealers were stubbornly optimistic about the future prospects of the Nano – now based more on hope rather than hype. Most of the Tata dealers blamed the many incidents of new Nanos catching fire and the negative publicity surrounding it as a dampener on sales and new bookings. Says Dinesh Shukla of Ahmedabad based Swati Autolink, “Few instances of firing in the engine are also a matter of concern. Though you can’t state it as a manufacturing defect, but it has created some impact on potential consumers.”

Talk to auto industry analysts and you get a similar sense of hope being the overriding factor when it comes to the future prospects of the Nano. Says Vaishali Jajoo of Angel Broking, “It will not be right for now to say that the Nano has failed in the Indian market. The unit sales fell in the month of November. It was mainly because of the operational shift at the back-end wherein the company is trying to shift the entire production from its Uttarakhand plant to the Sanand plant apart from many other reasons”


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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Monday, September 10, 2012

MSMES: CREDIT AVAILABILITY AND GROWTH

Independent India has seen the MSME sector grow by leaps and bounds and is proving to be the most promising and reliable sector for job creation and poverty alleviation in India. Despite an elaborate and dynamic policy framework, the road to the next level for MSMEs continues to be hindered largely due to the lack of adequate and timely credit.

Any collateral or third party guarantee free credit facilities extended by eligible institutions known as Member Lending Institutions (MLIs, at present 117 in total) with a maximum credit cap of Rs.10 million are eligible to be covered. The maximum guarantee cap is set at Rs.6.25 million or Rs.6.5 million. The extent of guarantee cover is 85% for micro enterprises for credit up to Rs.5 million. The coverage under CGS has made a record by covering 150,000 guarantee approvals in FY 2009-10, which was the highest so far in any single year. With this, the cumulative number of credit guarantees crossed the 300,000 mark on March 31st, 2010; covering an aggregate credit of Rs.115.51 billion, extended by 85 MLIs in 35 States/UTs. The corpus of CGTMSE is being contributed by the Government and SIDBI in the ratio of 4:1 respectively and has contributed Rs.19.06 billion to the corpus up to March 31, 2010. By the end of the 11th Plan, the corpus is to be raised to Rs.25 billion. Although the government has placed institutions and mechanisms to deliver financial help and other assistance to MSMEs, the implementation of these schemes needs to be monitored at the ground level. Unless the credit guarantee system is strengthened and streamlined, smaller units would continue to suffer neglect in accessing the much needed credit for both inception and expansion.

In India, the situation is further complicated by the fact that the preferred mode of finance is either self or other sources. According to the MSME Annual report 2009, more than 85% SMEs source finance either through the self-finance route or are unable to get funds, while only around 15% of the total approach financial institutions and non-institutions like moneylenders. Financial institutions like Industrial Development Bank of India (IDBI), SIDBI, Industrial Finance Corporation of India (IFCI), and other major public sector banks like SBI, Andhra Bank, Bank of Baroda and private banks like ICICI, Standard Chartered and others are providing financial assistance for commercialisation of domestic innovations and importing relevant technologies for growth. Small Industry Development Organization (SIDO) is another prominent government institution offering a number of financial services to SMEs. In addition to the above, government has recently emphasised on the importance of ‘credit rating scheme’ to help smoothen the loan facility process by banks and financial institutions for the SMEs. Under this scheme, the credit rating agencies assess a company’s credit worthiness and give it a rating which is widely accepted by banks and other financial institutions. This, in turn, facilitates hassle free flow of credit to SMEs, while enhancing the comfort-level of the lending banks. The other cherry on the cake is that the government reimburses 75% of the fees charged by the rating agency subject to a ceiling amount. T. R. Bajalia, Executive Director, IDBI Bank says, “Credit agencies have played a vital role as we welcome independent and reliable credit assessment. As credit agencies have done due diligence for an enterprise, it lessens our work and fastens the entire loan granting process.” Still, one of the largest problems in this is that most MSMEs are not aware about this credit rating facility. Outstanding credit to MSMEs has increased at a CAGR of 32.55% from 2005 to reach Rs.2.57 trillion. But total contribution of MSMEs to credit disbursal by financial institutions has improved very slightly from 8.8% in 2005 to 11.4% in 2009. So a more comprehensive information dissemination programme is a must to reach out to the others. Only 1.5 million of the 30 million odd MSMEs are in fact registered.


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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Saturday, September 08, 2012

G’Five is the... G’Five who?!

It took time to come to India. But now that it’s here, the firm is giving nightmares to leading brands in the Indian handset market. What has made G’Five click? Critically, will it become the #2 soon?

Seven years back, you could have betted on a roulette about how the utterly unknown Chinese handset manufacturer G’Five would never see the better part of positive growth, leave alone leave the Chinese shores – and you could have won a King’s ransom for each bet that you made. Most didn’t even know that G’Five existed. Many still don’t. In short, when it started selling handsets, few gave G’Five a chance to even survive. For the world, Nokia was then the head of the handset tribe, controlling a 42.2% pie of the worldwide sales to end users. Nokia was the metaphorical emblem for Western dominance, and overtaking the giant for a lesser known Chinese handset maker, whose product quality was criticised from the very beginning, seemed an illogically distant dream – if at all even a dream. Today, forget the roulette, the situation is fantastically different. It is a completely different tale than the one that was expected, and especially so in India, where the majority of the 1.3 billion-strong population are turning their attention to low-priced handsets. First there was Micromax which destroyed the previously held concepts of handset marketing, and now G’Five seems to have caught on faster than Micromax. As per the most recent Q2, 2010 report by IDC, G’Five is the third-largest handset seller in the Indian market today, with a 7.3% share, and is just an arm’s length away from becoming #2. In reality, displacing the once dominant Nokia, which had a market share of 78.8% when 2006 started (a figure which has dropped to 36.3% today), which just about appeared an eccentric objective, seems to be more plausible now.

But then, one great quarter does not a market leader make – and G’Five knows that pretty well. Almost amazingly, G’Five has attempted to market itself right at the base ground level, rather than just depending upon word-of-mouth or corporate sales. A quick visit to the largest mobile-handset market in Asia, situated in Karol Bagh (close to central New Delhi) is enough to provide evidence of G’Five’s growing ground level might. There are over 20,000 sellers in this market and the place is flooded with Chinese handsets and look-alikes – and G’Five is one of the few ‘branded’ products you could find in every handset shop. The mass market buyers apparently love it; as for the sellers, they have their reservations and preferences! But even here, G’Five has scored a tactical victory over both the premium brands and the low-priced competitors. “The G’Five handsets offer a very handsome margin, and therefore, we try and push this brand to the low-price loving customers,” says Siddharth Tiwari, a trader who has been in the business (and the market) for over a decade. And to imagine G’Five offers no warranty, no high-quality or service and yet walks away handsomely with the green bills!


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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Tuesday, September 04, 2012

GENERAL MOTORS: SUCCESSION

 An IPO in the pipeline means that the US government could be well on its way to make a swift exit from running GM. This portends positive tidings for GM, which is recovering on the numbers. But a far more daunting challenge is looming up on the horizon. By Pawan Chabra

The company has also said in its S-1 filing sent to B&E, “Operating in a large number of different regions and countries exposes us to political, economic, and other risks as well as multiple foreign regulatory requirements.” There is no denying that the strategy of dumping brands like Pontiac, Saturn, Saab and Hummer has fetched success to the company in no time. While the IHS Global Insight research report forecasts global vehicle sales to increase at a compound annual growth rate (CAGR) of 6.0% from 2009 to 2015, GM has returned to profits even after the vehicle sales are running about 25% below the recent historical trends. In fact, it is expected that when the consumer sentiment improves further, the auto major will scale new heights in the coming times. Similarly, the rating agency, Moody’s has remarked in its global automotive outlook update, “Compared to where the industry was a year ago, when General Motors Corp. and Chrysler Corp. were in the throes of bankruptcy protection, and when many economies were still in recession, the turnaround in volume sales, demand, and to a lesser extent in pricing, has been faster than we anticipated.”

But the challenges that GM faces today is even beyond getting its IPO right on the bourses. Ensuring a sustainable sales performance will be a relatively easier task with the launching of fuel-efficient and competitively priced models; but the larger problem of succession planning is what could be a much more daunting concern in the coming time. The appointment of Dan Akerson on September 1, 2010 got the fourth CEO for GM on board in the past 18 months (see table). Akerson has taken control to ensure a smooth comeback of the company from Ed Whitacre Jr., a former telecom executive despite the fact that the telecom executive turned PE expert has never run a heavy-industrial company in his career so far (forget about one of the size GM’s operations).

The major problem that GM has been through is to find a suitable leader to run GM successfully. Whitacre was selected by the US Treasury, and apparently wasn’t planning to be there for the long term. So it was decided that the company should pitch a more stable leader before the IPO. Even auto czar Steven Rattner, who led the Treasury Department’s auto task force, has written a book ‘Overhaul: An insider’s Account of the Obama Administration’s Rescue of the Auto Industry’; mentioning the difficulty of finding someone to manage the world’s largest automaker.

For the ones who haven’t heard about Rattner’s role in the scheme of things that often, he was the one who went through, among other things, the daunting task of finding GM’s next CEO; a job that was rejected by the likes of Nissan CEO Carlos Ghosn. Rattner fired Rick Wagoner as the Chairman and CEO of GM, and promoted Henderson as his replacement and eventually appointed Whitacre as the Chairman & CEO of the auto major. However, after Whitacre’s unexpected exit in August, Rattner was pushed again in a tight spot. And as finding an outsider would have taken much more time with the IPO development looming, Rattner decided to go with Akerson as he was one of the most promising names on the board of the company. In the book to be published on October 14, Rattner points out that Akerson himself had declined the offer of being the CEO of GM twice (as he neither wanted to leave his PE job at the Carlyle Group nor move to Detroit); before he finally opted to take up the role. GM may be back to learning the ways of the market, but it’s hard to say that all is well with a hesitant General at the helm, and little view on the leadership. Where in heavens is Plan B?


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Monday, September 03, 2012

SRI LANKA: PRESIDENTIAL POLITICS

Rajapakse is turning the Lankan constitution into a useless shred of paper

By destroying the self-governing nature of key institutions and reducing them to puppets, Rajapakse is obviously not going up in global popularity ratings. To further cement his hold over the government, Rajapakse is also employing dynasty politics. Now, he is also in charge of various ministries – defence, finance and ports and aviation – and has appointed his brother (who is not an elected member of parliament) as defence secretary, in charge of all three divisions of armed forces. Two other brothers have portfolios and his son is also an MP; this is apart from many cousins getting plum bureaucratic postings.

Not only can Rajapakse now easily manipulate the state machinery to keep himself in power, he has also managed to leave little of what the contemporary world knows as democratic governance. Yes, elections are still held – the last opponent (Fonseka) has been jailed and a court martial is in progress. Long live Sri Lanka; long gone democracy!


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Saturday, September 01, 2012

Despite a fall in profits in the last fiscal

Despite a fall in profits in the last fiscal, nmdc is still among the top 20 profit makers in the country. But will the honeymoon continue for the mining giant? Deepak Ranjan Patra finds out... 

Meanwhile, considering NMDC’s ambitious expansion plans, the first quarter results seem to be just the beginning of another era for it. With intentions to diversify, the company at present is setting up a 3 MTPA steel plant in Chhatisgarh and two pellet plants with installed capacity of 1.2 MTPA and 2 MTPA in Chhatisgarh and Karnataka, respectively with a capex of `26.5 billion to be spent over the next five years. As expected, once the plants become fully functional, NMDC will witness huge rise in its cash flows from FY2013 onwards. Moreover, in order to securitise its position and expand its reach in the global arena, the company is currently looking forward to acquire mines in regions like Africa, South America and also Australia.

But then, before stepping into the future, NMDC has to deal with the biggest problem of iron ore pricing. While metal prices are on rise in the global market, the company has so far passed on only two-third of the increased cost to its customers. So, the question remains that for how long can NMDC sustain the same stand without getting its bottom-line affected?

Nevertheless, the company sounds confident to sail through the odds as Raghavan says, “The year ahead holds much promise for NMDC. It will excel its performance through the next three quarters and achieve all-time high records.”


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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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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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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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