Tuesday, April 30, 2013

Are we Heading Again for the Shah Bano, Babri Masjid Era?

Ominous, objectionable, offensive, obnoxious and odious were five epithets used by some ‘secular’ friends when I tried to raise the issue. Another one said that my dislike and distaste for UPA-2 which he reluctantly shared has started colouring my perceptions and world view. Of course, there are many who say I am basically a closet Khakhi Chaddi masquerading as a liberal. So be it. But there are times when discomforting and disturbing questions have to be raised, no matter how unpalatable they sound. Otherwise, we are condemned to keep repeating history, never as a farce and always as a tragedy.

Let’s start with some facts first. Barring some ‘stray’ incidents, India has been spared the specter of communal riots since 2002 – the one exception being Kandhamal in Orissa in 2008. A lot of us had started thinking – I now realise stupidly – that Hindus and Muslims had both realised that they were being used as cannon fodder by political and vested interests through ‘engineered’ communal riots. We thought, gone were the vitriolic and vicious days of Shah Bano and Babri Masjid. We thought we are maturing as a multi-ethnic, multi-religious society and democracy. Looks like we thought wrong.

It started with Gopalgarh in Rajasthan where communal violence and police firing led to many deaths. Predictably and parrot like, we blamed the RSS types for it. Then communal violence erupted in Hyderabad, which has an inglorious history of communal violence. We again blamed the RSS types for it. Then came communal riots near Mathura in Uttar Pradesh soon after the ‘ultra-secular’ Samajwadi Party came to power. Incidentally, both Rajasthan and Andhra Pradesh have Congress governments. Then came communal riots in Bareilly in Uttar Pradesh. And now we have communal riots in Congress-ruled Assam. I won’t be surprised to hear the likes of Digvijay Singh foaming at the mouth that the RSS types have instigated Bodo tribals, who are largely Hindu, to riot against illegal Bangladeshi immigrants, who are largely Muslim. In between all this, we have seen Digvijay Singh offer the moon, the sky and the stars to Muslim voters in the recently held assembly elections in UP. Of course, we had Salman Khurshid allegedly claiming that the Empress of India had actually cried after alleged terrorists were shot dead in the Batla House encounter. In between, we witnessed thundering silence from secular warriors and large sections of mainstream media when a so-called Grand Mufti of Kashmir ordered a Christian priest to appear in his “court” to answer charges that he was converting innocent young Muslims. The priest was subsequently arrested and locked up by the J&K government and since has been effectively banished from the valley. In between, we had the higher judiciary slamming the Andhra Pradesh government decision to “reserve” a sub-quota for Muslims within the “reserved” category as unconstitutional. And how can we forget the ultimate in between – the Draft Communal Violence Bill prepared by the deluded National Advisory Council that basically says that the majority community is automatically the offender and the accused if there is communal violence and the minority community automatically the victim. Now if this were law, the government would be duty-bound to arrest and prosecute Bodo tribals from various relief camps. Nobody seems to have the actual facts but even secular warriors are reluctantly admitting that both Bodo tribals and illegal Bangladeshi immigrants have been victims in massive numbers in this latest instance of history repeating itself as tragedy.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
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Saturday, April 27, 2013

"We believe the profits to be genuine"

Dr. Frank-Jürgen Richter, Former Director of the World Economic Forum and current Chairman of Horasis, is a strategy advisor to governmental organisations across Asia and Europe. Today, he works to build cooperation between agencies in emerging and mature markets. Dr. Richter talks about the B&E US Power 100 companies and the road ahead of them

B&E: Last year, the total profits made by B&E US Power 100 corporations rose more than 13% y-o-y. Do you think there has been a real appreciation in terms of profitability, or is the jump an outcome of 2010 being a bad year?
Frank-Jürgen Richter (FJR): The data is real but has to be placed in the context of trends in the US and in other countries. By and large, all business cycles are out of synchronisation with each other – except for firms working along the same supply chain. But even in the latter, we may see apparently large fluctuations, especially if some have ramped up and in the short term demand falls. For example, take the US Employment Figures released in mid-June this year. They showed a fall and the markets ‘went wild’ and pundits’ sound bites were overstating that US was slowing down. It reflected the easy US ‘hire & fire’ regime. And, if they were part of a long chain incorporating value-added assembly in China, it is possible a US firm may have decided to fire some staff. Its goods would be shipped to Asia over 20 days minimum, be assembled (maybe 20 days more) and shipped back for sale (a further 20 days). Data from China shows transaction volumes rising at 20% y-o-y. The Asians will be taking in part-finished goods from US made by staff just recently made redundant. Apparently the US workforce is being reduced just at the time that China needs more staff to handle increasing trade. Yet it is true that the recession cut jobs into 2009 and 2010, so the increases in production and profitability come from a lower base – year on year. But in general, we believe

lieve the profits to be genuine. Longer term, US companies must either begin hiring again (since unemployed people are less likely to consume goods and services) or find other markets in which consumers have adequate purchasing power.

B&E: How do you think the slowing down of emerging markets like Brazil, China and India, would hurt the top and bottomline outlook for B&E US Power 100 firms?
FJR: The policies of US firms must be differentiated across the BRICS. What might work in one market may not work in another, and this applies across all overseas ventures. Brazil has a policy-led growth strategy unlike the other members of the BRICS as it is more inward looking. China is edging into a long-term fall in its working age population; and India is waiting for the results of its next national elections in the next few months (a bit like the US). Slowdowns arrive as a trend that might be forecasted. So US firms must do much new ‘home work’ – not just in innovating and believing the world will both make it in volume and then buy it. The new manufacturers have to think ‘outside the box’ and ask their venture capitalists do likewise. Even in these times of global market stress! There is no bad news for US firms – or at least the ones that can look ahead to selling what the Asian and emerging market wants. But overall I expect isolated announcements of poor data affecting major US firms and their non-US sales and profits in 2012.

B&E: Would you say the American economy has got back on its feet to be able to support the domestic demand that is crucial?
FJR: I would agree with this premise, but due to the large fluctuations globally, US will see adverse data from time to time. One statistic that is very worrying is the high [and growing] rates of youth unemployment.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
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Wednesday, April 24, 2013

“India remains one of the top five markets globally for RIM”

Patrick Spence, Executive VP – Global Sales & Regional Marketing, RIM talks about the tablet business and BlackBerry’s position in the Indian market

B&E: How important is Indian market for RIM? What will be your strategy to tap the market?
Patrick Spence (PS): For a strategic intent, there are five pillars on which success rests – relevant products, investment in the brand, developing a go-to-market channel which is holistic and efficient, consumer insights through market research, and people who are going to execute the strategy. In India, the number of developers has increased from 4,000 to 26,000 in the last two years. We are focussing on relevant apps and have close to 50,000 at present. That’s not a small number. Right now we are investing more money in developing apps for the the enterprise segment so that we continue to lead in that space. By no means we are underestimating the Asian market. India is great for small business as well as for the large ones. We are trying to cater to all the segments. BlackBerry 10 devices will come out later this year and we are hoping they will also do well.

B&E: At the moment when you are doing really well in India what is the reason behind slashing prices?
PS: India remains one of the top five markets globally for RIM. All big and small companies are looking at India to find out what products are being used and what is the demand. It is important on several fronts. We will continue to evaluate what the market is saying about our products and focus on making sure that we get BlackBerry in the hands of smart people. Slashing prices is a way of getting the benefit of economies of scale through increased sales.

B&E: Middle East has so far been an extremely lucrative market for RIM. According to IDC data, shipments to the Middle East and Africa more than doubled to 2.29 million units in Q4 2012 from a year earlier. How does BlackBerry plan to sustain this growth?
PS: We have done a lot of work in these markets and our product teams are making sure that they develop market specific features. Like in the case of India, we introduced FM and a dedicated BBM key which enhances the experience. We have already been challenged in the US but we know what we are supposed to do there. We’ll make sure that we continue to build our brand. We already have a great base of subscribers in the Middle East and will continue to build on it.

B&E: How do you plan to tackle competition from Nokia and Samsung which have sub Rs.10,000 smartphones in India?
PS: Currently, we are not looking at numbers in terms of market share in India. Right now we are #3 in India and we’ll continue to build on this position. India is one of the most demanding markets and we think we are on the right track. Given the role that the youth plays in driving the Indian economy, we are targeting them with smart features and a great experience.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
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Friday, April 19, 2013

National

Big win for MCX IPO

After a very dull two year period for the primary capital market, the initial public offer of the Multi Commodity Exchange of India, which was also the first IPO this year, seems to have brought a ray of hope for investors. By the time of its closure on February 24, the issue had received about 54 times more bids for its shares worth Rs 350 billion. More importantly, the retail segment saw an oversubscription by over 24 times. The portion reserved for institutional investors in MCX IPO received a subscription of 50 times, while the HNIs (High Networth Individual Investors) submitted bids for over 150 times the number of shares reserved for them. In the process, the first ever IPO by any Indian stock exchange has also become the third most successful IPO so far. Until now, the Mundra Port & SEZ IPO in November 2007 was the most subscribed IPO in the Indian market and was oversubscribed 115 times. The MCX issue has fetched the bourse Rs. 6.63 billion and the share price has been fixed at Rs. 1,032. Investors are also expecting significant listing gains from the issue. MCX is India’s largest commodity exchange and is the fifth-largest commodity exchange in the world. It enjoys leadership position in the Indian commodity futures market, with a share of 82% of the overall traded turnover in FY11.

Ranbaxy’s Q4 losses

India’s leading pharmaceutical company reported a net loss of Rs.29.82 billion in the quarter ended December 31, 2011. The losses are far greater than the Rs.970 million that it incurred in the same period in the previous year. The higher quantum of loss comes at a time when Ranbaxy’s sales for Q4 have increased by Rs.16.51 billion from Rs.20.86 billion in 2010 to Rs.37.38 billion in 2011. The company has suffered losses all through the year, which is reflected in its net loss of Rs.30.52 billion for the year 2011, as compared to a net profit of Rs.552 million it made in the year before.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 
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Can he be a change agent for his party?

Keeping in mind the mood of the electorate, which has become increasingly clamorous for change and development, Akhilesh Yadav appears to be going about in earnest giving his party a much-needed makeover.

Way back in the 1980s two Young Turks set out on a mission to transform Indian politics. One of them was Ajit Singh - the America-returned son of Chaudhary Charan Singh (aka kisan neta), the former Prime Minister of India. A computer engineer who spent 17 years in the US, Ajit made Baghpat his pocket borough, travelling the length and breadth of the constituency. He went all out to court the youth and dreamt of bringing about a massive change in the state’s political scenario.

The other young man was none other than former Prime Minister Indira Gandhi’s son, Rajiv Gandhi. A Cambridge University alumnus, Rajiv became a beacon of hope for the educated youth of the country.

Both Ajit and Rajiv went on to achieve huge success in terms of winning thousands of followers. Most still fondly recall Rajiv while Ajit Singh, now a Cabinet minister in the UPA government, is known as one of the most opportunistic political leaders of our times.

Flash forward to the present and there is an unmistakable sense of déjà vu. Once again we see a young duo trying to change the political scenario of the state. One of them is Rajiv’s son, Rahul Gandhi, and the other one is former UP chief minister Mulayam Singh Yadav’s son, Akhilesh Yadav. Both are ‘foreign educated’.

Recent months have seen Rahul take upon himself the challenge of resurrecting his party from the state of political wilderness in which it has been moldering since 1989. In a bid to revive his party’s challenge in UP and galvanise an otherwise moribund party apparatus in the state, Rahul has undertaken numerous stump tours and has been organising party and public meetings in different parts of the state. The Gandhi scion, in his campaign speeches, has repeatedly harped on the issues of employment and development and has talked of transforming the fortunes of the state if his party is voted to power. And though Rahul has staked his own political credibility in the polls most political observers are not very optimistic about Congress’s chances. But that has, however, not prevented senior Congress leaders such as Pramod Tewari from claiming that the Congress would be able to win majority on its own.

Though both Rahul and Akhilesh have their own challenges to face, the latter’s task seems more difficult. As the State President of the Samajwadi Party - an outfit accused of promoting casteism and sometimes even called the ‘goonda’ party. - not only does he need to change the party’s image, he also needs to bring it back to power. Sanjay Lathar, National President of Samajwadi Yuvjan Sabha and the man in-charge of Akhilesh’s political campaign, says, “We have the largest number of youths and females contesting the elections. About 122 of them are highly educated first-timers and 75% have held positions in student unions. We have also created history by giving tickets to 40 women.” According to Lathar, the party was approached by about 50 candidates with muscle power. “Around 30 to 35 of them would have won the elections. Yet the party decided not to embrace them,” he added.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
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Monday, April 15, 2013

Can rometty live up to a hundred year old secret?

By successfully reorienting IBM into lucrative high margin businesses, Sam managed a phenomenal growth in bottomlines. B&E analyses the task ahead for his successor Virgina Rometty as she endeavours to take IBM to its next strategic leap.

What does it take for a company to survive 100 years? Chances are that even if an answer to this very open-ended question is available, CEOs of most companies we know today wouldn’t be ready with one. And that would be more because they have never thought of things that way!

Sam Palmisano, current Chairman, President & CEO of IBM, who is relinquishing his CEO position next year, claims that the secret for the same has been with IBM (the company completed 100 years recently) for years. During a speech at the Computer History Museum, Sam referred to IBM’s former chief Thomas Watson Jr. who said that there were three rules that can ensure a firm exists forever: Have a set of laws (core ideologies that a company stands by), don’t break them and be willing to change everything else. For IBM, the ‘law’ was always about being a trusted partner to corporates. Where it showed resistance to change in accordance with this ‘rule’, it faltered and nearly fizzled out. Where it adapted to its strengths and market opportunities, it won.

But even if the intent is right, making strategic shifts doesn’t work if you are unable to have a pulse on the market. Sam, even though his stepping down would never have made as much of the news as a Steve Jobs, was one CEO who did. A graduate in history from John Hopkins University, Sam showed the courage to lead IBM away from hardware into software, services and consulting. One of the headlines then said, “Big Blue gets the blues.” To be sure, the PC division was bleeding. But doing it then meant a sudden decline in confidence for the company.

From the time Sam joined the company as CEO in March 2002, the IBM stock has appreciated by around 81.75% and closed at $187.25 on November 8. When you look at financials from 2002 to 2010, the company saw its revenues grow to $99.87 billion in 2010, a CAGR of just 2.32%. But look at the story on the net income front, which was $14.83 billion in 2010, a far more impressive CAGR of 17.11%. More interestingly, while revenue dipped drastically in 2009 by 7.6% in the aftermath of the recession, net profit continued to rise even in that year, growing by 8.8% to $13.42 billion. To further nail the point, consider that HP’s revenues for 2010 were far greater than IBM at $126.03 billion. However, its net profit still lags Big Blue at $8.76 billion, and the company saw drops in both revenues (by 3.2% yoy) and net profits (by 8.03% yoy) in 2009. By reorienting IBM to high margin businesses, IBM simply appears to be generating more from less. Hardware was 24% of their pre-tax income in 2000, and it came down to just 8% in 2010. Software has gained immensely from 25% in 2000 to 44% in 2010. The innovation engine has also remained remarkably impressive for a company of its size. Fred Giron - VP, Principal Analyst, Forrester Research, says that this has been possible “thanks to a right balance in between IBM’s internal innovation capabilities as well as an aggressive acquisition strategy.” Since 2000, the company has utilised $70 billion in cash in capital expenditures and acquisitions and $107 billion in share repurchases and dividends. It also retains its dominance in terms of IP, and obtained 5866 patents in 2010.
 

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
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B&E Indicators

Utility losses paint a grim picture

While power is essential for India’s infrastructure development, the financial challenges are daunting. In fact, the biggest concern for State Electricity Boards (read utilities) at the moment seems to be the mounting losses. In FY2010, aggregate utilities’ losses (ex-subsidy) stood at Rs.635 billion, up 18% y-o-y. Even on revenue and subsidy realised basis, losses were a substantial Rs.384 billion (up 15% y-o-y).

Accumulated losses increase by 32%

Accumulated losses for all the utilities, increased by 32% y-o-y to Rs.1.22 trillion at the end of FY2010. Maximum accumulated losses came from Northern region at Rs.690 billion, followed by losses of Rs.257 billion in Southern and Rs.121 billion in Eastern region. Huge accumulated losses in Northern region were mainly caused by Uttar Pradesh, J&K and Punjab, where the losses stood at Rs.351 billion, Rs.118 billion and Rs.97 billion respectively.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
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Saturday, April 13, 2013

US has one Detroit. India has four.

They are attracting loads of investments and oodles of commitment from automakers. But apparently, some are being preferred more than the rest. Only the best ecosystem will win the day.

Rome was not built in a day. And it has taken years of nurturing and progressive development for Chennai and its neighbourhood in Tamil Nadu to earn the ‘Detroit of India’ sobriquet. Today, seven of the 20 top global automakers have moved into Chennai’s vicinity, where within a radius of 50 to 60 km, an automobile hub has quietly emerged over the years. The world’s leading car makers are located here – Ford, Hyundai, BMW, Renault and Mitsubishi – and so is the world’s largest truck maker Daimler and Japanese commercial vehicle maker Nissan. According to industry estimates, by the end of FY2010-11, the automobile hub in Chennai had an installed capacity to produce 1.28 million cars and 350,000 commercial vehicles per year. That’s huge for an zone already accounting for 42% of India’s passenger car production and 35% of India’s $18 billion worth auto-components production, according to statistics provided by the Tamil Nadu state government. The state’s auto sector has attracted investments worth more than $4.5 billion, which is more than what Gurgaon – another leading auto hub in Haryana in north India – receives. In terms of units produced however, Gurgaon with an installed capacity of around 4.8 million vehicles (1.2 million for Maruti and 3.6 million for Hero Honda) is #1. Hero Honda, which is the world’s largest producer of motorcycles, has two plants in Haryana – at Gurgaon & Rewari, with each rolling out 6,000 units a day.

Chennai has taken many years to become a ‘Detroit’, but staying there seems equally challenging. Recently, another state Gujarat, stole some of Tamil Nadu’s motown thunder from right under its nose. Many players, who for years had believed in the waters of Chennai are today showing increased interest in Gujarat. That they have even expressed it is a natural outcome. It is known well that Chennai was chosen as Ford’s preferred port of call, when it first stepped on Indian soil 16 years back. On July 28, 2011, Ford India announced its decision to invest Rs.4 billion at a plant – not in Chennai but in Sanand (Gujarat). It will be the company’s second plant in the country. The decision must have surely vexed government and industry mandarins in Tamil Nadu, who have in recent years gone to great lengths to sell the state as a preferred auto hub to local and global car manufacturers. And this was not the first instance when Chennai had been overlooked by automakers. In 2009, Volkswagen – Europe’s largest car maker, chose Pune over Chennai when it decided to build its plant in India.

That Gujarat is fast emerging as the poster boy for car manufacturers looking to set up shop in the country does not come as a surprise to those aware of the developments in the world of automotives. Recently, French auto major Peugeot’s Gregoire Olivier (CEO – Asia) and Fredric Faber (MD – India), met Gujarat’s CM Narendra Modi to explore land options for the company’s upcoming plant site in India. The state, given its reputation as being a well-governed and investment-friendly destination, stands a good chance of swinging the Peugeot deal in its favour, even if other contenders like Tamil Nadu and Andhra Pradesh count themselves very much in the reckoning. For a region that till not too long ago was chiefly known for only its trading (and not manufacturing) prowess, Gujarat has indeed come a long way since Hindustan Motors (the maker of Ambassador cars), began operations in a small assembly plant at Port Okha in Jamnagar district in the state in 1942. But it was the arrival of the Tata Nano plant at Sanand in 2008, which opened the floodgates for the state.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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Friday, April 12, 2013

This University is Under Siege!

Usage of Outdated tools, Wrong Analysis, faulty Reportage, Attrition of key Personnel, lack of Forward Integration – thanks to its Complacent Approach, IMRB risks Losing Ground very fast

The early birds do catch the worms, but in the corporate world, it’s really about how long you can keep them. Being born in a period (1970, to be precise) when Indian companies weren’t even updated on the real meaning of the word ‘customer’, does provide several advantages to IMRB, a company that’s well known for its customised researches. But when one looks at how it’s failing to set new benchmarks, one wonders how long it can continue to keep its competitive strengths intact.

For a company that claims to be the ‘University’ of the Indian market research industry, it would be quite appropriate to do a quick ‘research’ on the pioneering work by brand strategy guru David Aaker on Sustainable Competitive Advantage (SCA). Aaker had said that a company’s assets and skills will ultimately determine whether it can retain a sustainable competitive advantage.

For IMRB, development of the right kind of assets and skills appears to be the major challenge. A more embarrassing challenge is the fact that faults in IMRB’s reportage and findings have crept up faster than one could have ever expected or imagined – and it’s surprising that IMRB’s management could have overseen (and overlooked) these issues. For example, an IMRB report like the Internet Usage and Habits of Cyber Cafe Users (December 5, 2010) is riddled with numerical conflicts that could fox even the most intrepid analyst – 4Ps B&M has listed one such mistake in the graph at the right.

Some industry players put the blame for such lack of professionalism to be the result of their manpower challenges. Lakshmikant Gupta, Chief Marketing Officer at LG Electronics India, tells us from his experience and interactions, “IMRB is having a tough time retaining people, as they are moving to international MR firms or other sectors for better career options.” Numerous surveys point out lack of growth opportunities as the main reason for employee attrition. For an international MR company, it could be quite appalling if they were unable to provide their performers the right career progression, and it definitely has a worrisome bearing on growth prospects.

In general, the malaise starts from the top of the industry ladder. Dhiraj Chaddha, Marketing Head, Voltas Ltd. points out, “I think there’s a big room for improvement in the Indian MR industry. Most of them are following archaic models, which haven’t changed over the years.” Pioneers do have a role in shaping the best and worst in an industry. IMRB proves quite true to the stereotype.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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Monday, April 8, 2013

Why their marriage hit the rocks

Marriages between carmakers are not made in automotive heaven – the latest alliance to have soured is between Suzuki and Volkswagen. A formal divorce is awaited but Suzuki has already embarked on a new relationship with Fiat.

As Osamu Suzuki, Chairman & CEO, Suzuki Motor Corporation and Martin Winterkorn, CEO, Volkswagen AG, took the stage on December 9, 2009, industry watchers were all agog as they waited with bated breath for some game-changing announcement to be made. But nobody had a clue about what was to follow. Minutes later came the news that the German auto giant Volkswagen (VW) had bought a 20% stake in Japan’s Suzuki Motor Corporation, in a deal worth $2.5 billion. On the face of it the deal looked convincing and a winner for both the parties – Suzuki could get its hands on diesel technology from Volkswagen and in turn the German auto major could employ Suzuki’s small-car expertise to expand its presence in the Asian markets.

Cut to 2011 and both Suzuki and Volkswagen seem to have already given up on the deal. Much to the disappointment of both partners, nothing has moved over the past two years. Worse, relations between Suzuki and Volkswagen have begun fraying and trust between the parties has become the obvious casualty. In fact, in recent months the two players have even taken potshots at each other with Volkswagen claiming that Suzuki had breached a pact by agreeing to a diesel engine deal with Italy’s Fiat on September 11, 2011. That charge seems to have ruffled quite a few feathers in the Suzuki camp which, despite its conservative style, decided to hit back. Osamu Suzuki called a press conference on the next day itself to demand a “divorce” from VW. And the elderly chairman minced no words in giving vent to Suzuki’s concerns about becoming just another sub-brand in VW’s global empire. “I thought they understood that being a partnership of equals was important,” Suzuki remarked at the press conference, not without a hint of irony.

Industry sources believe that the alliance suffered a setback after Volkswagen referred to Suzuki to as an “associate” in its 2010 annual report released earlier this year. The report went on to add that Suzuki was an ‘associate over which Volkswagen has significant influence on financial and operating policy decisions.’ That definitely did not go down well with the Japanese automaker, which took it as an insult to its independent working culture. Recently, Suzuki sent a letter to Volkswagen setting September 30 as the deadline for the German automaker to revoke its statement about the breach of contract.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles


 
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Thursday, April 4, 2013

Dubai: back from The Brink

The City that once Conjured visions of Grandeur and Globalisation is trying its best to shake off The Misfortunes inherited from its recent debt crush and property bust. Syed Khurram gives a ground-zero walkthrough report

First impressions usually leave a deep imprint behind. The first glimpse of a city — its buildings, traffic, shops, roads and numerous others things that are part of the urban ecosystem — can convey a lot about its mood and character. So the sight of a stately limousine immediately upon entering Terminal 3 of Dubai Airport only reconfirmed my notions about the city and its multi-splendoured riches. In all these years of living in India, I have never come across a limousine at any of the airports I have passed through.

Driving on Dubai’s smooth roads feels like cruising on a pleasure yacht. The difference is that instead of navigating the vast expanse of sea, you speed past ribbons of smooth asphalt and imposing skycrapers that can make your neck go stiff and your jaw drop. While driving down to the hotel, I couldn’t resist asking the driver: “How are things here?” The driver, a stoutly-built Peshawri Pathan replied in a matter-of-fact way: “Sab theek hai, pahle se ab achcha hai.” Was he hinting at something? Could it be that he was referring to the Arab uprising in the neighbouring Gulf countries, the political hot potato that many Muslim sheikdoms in the region are currently wrestling with? Or was it just a general observation about Dubai’s economy that had lately run up against a great debt wall but is now limping back to recovery?

A short while later, I was back on Dubai’s streets, intent on savouring its urban charms and feast my eyes on its many ravishing landmarks. If ever a traveller is searching for an immersing shopping experience, Dubai is the place to be in. Beyond doubt, Dubai’s array of exotic shopping malls and super-rich wonder stores are a hog-heaven of consumerism. And though one comes across people from all nationalities looking out for the best they can buy, Indians in particular are a common sight. Some places, like the Meena Bazar in Bur Dubai, feel straight out of India and you could be forgiven for thinking that you are taking a stroll in an Indian market.

As you amble along the streets taking in the sights and sounds of the city and its breathtaking cityscape, you cannot but marvel at the ingenuity of the builders for giving shape to magnificent dreams cast in marble and stone. The sheer scale and grandiosity of the edifices around makes you wonder about the kinds of resources and skills that went into their creation. At times such in-your-face opulence leaves you wondering about whatever happened to Dubai’s property bubble bust, and if the talks about the emirate’s once bustling economy now being laid low are just overblown apprehensions.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles

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Monday, April 1, 2013

The Worst Policy Excuse of all!

World No Tobacco Day on May 31 presents yet Another Occasion to bring out The Shameless Excuses by The Indian Government in allowing The Tobacco Industry to continue in its current form.

The general indifference and the often blasé attitude most of our politicians show towards tobacco use in this country, which the World Health Organisation predicts will have the fastest rate of mortality due to tobacco use in the first two decades of this century, is quite shocking. Strange it may seem but gloomy statistics against consumption of tobacco have hardly had any deterrent effect so far nor have they proved a strong motivator for the Indian government to finish off the industry, as it is in its current form.

According to various estimates, the number of tobacco users in India (10 years and above) is around 250 million, comprising urban and rural male and female. Medical research says there exists an incontrovertible proof of link between smoking and disease and the two share quite an inseparable relationship. Be it coronary heart diseases like stroke, respiratory diseases such as chronic obstructive pulmonary diseases and pneumonia, adverse reproductive abnormalities or even cancer, the harmful effects of tobacco-use are almost always certain to leave its fingerprints behind. In fact, smoking and tobacco consumption have been found to cause a host of other maladies: cataract, adverse complications related to slow wound healing and respiratory problems, low bone density and risks of hip fracture and peptic ulcers. If the above familiar medical conditions fail to ring the alarm bells then the following information will surely give us the intimations of mortality. An urban study in Mumbai has reported that the risk of dying is more than 50% higher for smokers and every year 700,000 to 10,00,000 deaths in India are caused by smoking.

While health-related risks of tobacco-use are hard to overlook, its economic ill-effects are no less disturbing. Smoking is sure to damage health but no less deleterious is its effect on our economic well-being and prosperity. In a report by WHO titled Tobacco Increases The Poverty Of Individuals and Families, it is said that in most countries, tobacco use tends to be higher among the poor. They spend a large part of their income on tobacco, which could have otherwise been spent on meeting basic human needs such as food, shelter, education and health care. Globally, 84% of smokers live in developing countries and transitional economies around the world. A study of smoking prevalence among men in Chennai in 1997 showed that the highest rate of smoking occurred among the illiterate population (64%). As India is still a developing country, it’s really shameful to see how powerless we are in freeing ourselves from the bondage of such unhealthy addiction, which is leaching away our economic wealth at both individual and national levels.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist). For More IIPM Info, Visit below mentioned IIPM articles
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