VIDEOCON

Everyone talks about its umpteen foreign acquisitions, but listen to its India strategy too – it’s incredible!
When you talk about a global brand, imagine ‘Videocon’ and that’d be enough! In consumer durables, Videocon has Akai, Sansui, Allwyn, Hyundai, Electrolux and Kelvinator – the very names that have earned some degree of respect for giving convenient technological solutions to their consumers. And besides the much-hyped Daewoo acquisition being the most heard-of event for 2006-07 when it comes to Videocon, about which Tushar Bhattacharya, Senior Economist, FICCI, feels, “This acquisition forms a major part of Videocon’s branding strategy.

The brand is not only getting brand equity but also the entire Daewoo network”; its recent India- centric strategies cannot be overlooked. Videocon, last year banged on the market during the festive season with many an offers. For Onam, it had “Onama hot savam hat-trick offer” in Kerala doling-out three gifts on every purchase. For Diwali, the brand offered “Har Din Diwali” offer. A clever move on Videocon’s behalf also was dropping cricketers as its brand ambassadors and roping-in Bollywood’s King Khan which indeed gave the brand that much needed push to rise 25 positions to occupy the 63rd rank for 2007. Surely, it’s been a terrific brand performance for Videocon – ‘The Indian multinational’ brand!

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Source : IIPM Editorial, 2007

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

GOOGLE

Brand Google is soaring globally, but its India strategy clearly needs more punch
Every one loves the $144.6 billion giant Google! And why not, thanks to them, you have the world at your finger tips! It might have slipped fifteen places to a seemingly unimpressive number 37, but surely, with 53.7% of the world search-engine market share, it undisputedly stands tall and worthy to be called a brand that garners a swashbuckling $10.6 billion in revenues during 2006 (at a growth rate of 121.6%, since 2002). The year 2006 also witnessed quite a few acquisitions, starting with Google’s acquisition of YouTube – a popular video sharing website, making it a huge rage among the youth. Then in October 2006, it cemented its hold even on the working population with its acquisition of Jot Spot, an enterprise social software. Despite its activities being on a global scale, India has not found itself out of action when it came to playing a role in this giant’s business development. The brand has given millions of Hindi-speakers a reason to rejoice with Google News in Hindi and has even come out with two venture capital funds, Seed fund and Erasmic. Shailesh Rao, MD, Google India told 4Ps B&M: “We want to be a catalyst for the India entrepreneurial spirit and create new services for the Indian market.” Google has also initiated its ‘click-to-call’ ads in India, a tie-up with Bharti Airtel to provide a mobile search option. Brand ‘Google’ has clearly left its competitors with no choice, but to ogle!

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Source : IIPM Editorial, 2007

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

HYUNDAI MOTORS

Once upon a time, Maruti was the only rival for the sunshine car. Till Tata Motors came along...
Here’s a Korean auto major, who boasts of three ambassadors – SRK, Preity Zinta and Sania Mirza. Yes! Hyundai, and small wonder then that the brand has been able to dent Maruti’s un-challengeable dominance to some extent. Arvind Saxena, VP, Marketing and Sales, Hyundai Motor India, explained to 4Ps B&M: “We have been doing product specific campaigns during the last year based on our requirements.” He added that the company will consistently focus on 2 core areas – innovation and reliability in all its communication. Hyundai posted sales of 299,513 units in CY06, an elephantine increase of 18.5% as compared to CY05. Anticipating similar momentum, HMIL is setting up its second plant, taking the total production to 600,000 units by end of 2007 from the current 300,000 units. The company is building up an extensive network of dealers, expanding their numbers from 183 to 250 by this year end. In a bid to boost consumer satisfaction, after sales service network are also being increased to about 1,000 in 2007. This will give Hyundai the much needed edge to com at par with Maruti and continue to keep the sun shining brightly on its India story!

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Source : IIPM Editorial, 2007

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

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RELIANCE COMMUNICATIONS

Airtel beware... As Anil Ambani gets more serious about the GSM route, your nemesis is finally here!
If you formulate a list of India Inc.’s most aggressive, Reliance Communications would be a frontrunner. Be it the sassy branding activities, bold marketing campaigns or strong below the line activities, RCL has constantly stormed the Indian telecom market with its aggressive streak. One experiences this belligerence in RCL’s approach, even when talking to Sanjay Bahl, Branding Head of the company: “Reliance has been a pioneer in spearheading the value creation and product innovation in the Indian telecom market. The spirit of our marketing strategy lies in leading the market growth,” he iterates. Always hawkish in its approach, the RCL brand has been creating maximum stir over the last few months, by launching a series of campaigns last year. Most of its initiatives like the Mobile TV, RIL India calling card, internet on the move and One India Plan (launched by RCL even before BSNL) went a long way in changing traditional market paradigms. “Our ‘Go Colour campaign’ (Baton baton mein rang chaa gaye hain) and ‘Bus batan dabao campaign’ have been popular,” says Sanjay. All this aggression plus cheap lifetime validity offers and a phone@Rs 777 have resulted in record monthly subscriber additions and an astounding net profit increase of 612%. Watch this torpedo steadily rise to the top of the ladder!

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Source : IIPM Editorial, 2007

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

WIPRO TECHNOLOGIES

Their focus was on acquisitions in FY07. Ready for the big game?
From a modest peanut oil business to one of India’s largest Technology Service Companies, Wipro has come a long way. Headed by one of India’s greatest entrepreneurs – Azim Premji, Wipro is India’s third largest software firm. Over the past four fiscal years, Wipro has nearly tripled income and registered itself in the prestigious $3 billion club and its employee base has also tripled to around 65,000. The company hires a staggering three persons every working hour! In what is described as its ‘String of Pearls’ strategy, Wipro has embarked on an acquisition spree in different regions to gain access to new markets. Some of the major acquisitions include Austria’s New Logic, USA’s MPower, Quantech Group and the latest being Enabler in Portugal. Interestingly, the company does not disclose its 400 strong client-list, which includes publicly known clients like Nokia, GE, ABN Amro, among others. Azim Premji sums it up saying, “Our investments and focus on enhancing value to our customers and stake holders have paid off. We see new challenges and exciting opportunities ahead. We believe that we have the right ingredients in place to keep winning.” Need one say more?

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Source : IIPM Editorial, 2007

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

What problem?!

Trade deficit is being coolly ignored
Oh, alright! This time we’ll not beat about the bush with smart words to make this article an easy read. We’ll bite the bullet right away. India’s trade deficit reached a worrisome $56.74 billion figure for FY 2006-07, widening a killing 40.5%! But what’s got our goat is that not many seem to be making any bones about it! Of course, a growing economy has its own ill-effects (or side effects, as government supporters would love to portray), but even if the 30.3% increase in the oil import bill can be termed as transitory, considering oil prices to become moderate or even to fall, the same would not hold true for the non-oil import bill, which has seen a dramatic rise for past some time now, growing by 24.74% over the last fiscal. “Th e trend is likely to persist as demand manifest through non-oil remains strong. We expect this component to grow at around 22%,” opines Sachchidanand Shukla, Economist, Enam. Truly, while exports are likely to be sluggish due to expected slow-down in the US economy, imports are likely to grow above 22% due to continued non-oil imports. Even in March 2007, while exports grew y-o-y by only 8.84%, imports grew by 14.45%. Worse, non-oil imports are contributing less to import bill than oil imports. Apr- Nov 2006 figures show that non-oil imports made up 67% of the total imports, compared to 70% last year. As Shukla further states, “The situation is going to deteriorate further.”

However, as long as non-oil imports largely comprise capital goods, which have a positive impact on the economy by augmenting the productive capability, there is less cause of worry. Creditably, capital goods, which formed 21% of non-oil imports in the period Apr-Nov 2005, increased to 22.69% in the same period in 2006. But still, as the May ‘07 Asia Markets Research report by JP Morgan shows, the RBI and Ministry of Finance act at loggerheads on capital flow policies, thus exacerbating the issue. Will they change? We hope they at least start discussing the problem of deficit!

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Source : IIPM Editorial, 2007

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

Pro-reactive!
A new defi nition for SEBI’s moves
You may ask, why the term ‘pro-reactive’? On one hand, while the recent moves of SEBI seem quite sincere in attempting to regulate the market (proactive, we should say), on the other hand, their response to various recent scams have been straightforward knee-jerk jumps (reactive, we should mention again). And ergo, the term ‘pro-reactive’. First the good news. In a bid to rewrite the rule-book that regulates the capital market, SEBI has roped in two national law schools, a law firm and two legal experts to implement the changes, and has decided to convert all existing circulars, including guidelines (as these do not have statutory backing) issued by it, into regulations. That this perhaps is SEBI’s biggest policy restructuring exercise is a mammoth understatement. Should this be lauded? Of course, and with encouraging argumentative support.

At the same time, without taking away their most deserving credit, the fact also is that SEBI has failed time and again to forecast structural faults right within the system. A major case to point being the recent IPO pricing scam involving promoters, which came up in the wake of alleged price manipulation in the shares of newly listed companies (e.g. MindTree Consulting). Of course, SEBI has barred the perpetrators from any further trading. Further, the market regulator – apart from mandatory grading of IPOs to stricter disclosure norms – now plans to fix a first-day price band for stocks after their IPO to check any irregular movements in the scrips. “Price is determined by grey market scenarios... It may not be of much use... In any case, the first day price band is (again) a cautious approach adopted by the market regulator,” complains R. K. Gupta, MD, Taurus Mutual Fund.

Well, without an iota of doubt, good intentions and reasonably robust systems are backing SEBI’s latest drives. However, despite various analysts and experts berating SEBI’s lackadaisical approach in shooting the target before it moves, SEBI still remains at the mercy of market happenings, rather than the same being vice versa. And all it requires to correct this is not a mammoth restructuring exercise, but just a change of philosophy... from pro-reactive to, we said it, reactive!

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Source : IIPM Editorial, 2007

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

‘Da’-the ‘Som’(raas) socialist!

The erudite Speaker of the Lok Sabha has had an unblemished & impeccable Parliamentary record
Somnath Chatterjee may or may not become the first ‘Communist’ President of India, but he will certainly go down in history as one of the most controversial Speakers the Lok Sabha has ever had. His run-ins with the Opposition & the judiciary have been making headlines ever since he took over as Speaker on June 4, 2004. During his earlier nine stints in the Lok Sabha, he was one of the most seasoned orator. He seems to have carried forward the legacy to the post of Lok Sabha Speaker, as his is, still the most resounding and frequently heard voice in the lower house of Parliament.

Chatterjee represents the Bhadralok. Despite having studied Law in UK, Somnath is known for his love for everything Bengali, ranging from dhoti to Rabindra Sangeet. He is also famous for his love for good food & good life. Coincidentally, he represents the Bolpur constituency in the Parliament, which includes Shantiniketan – the land of Rabindranath Tagore. In the times of Nandigram conflict, the fact that the land around Shantiniketan, amidst the surrounding Kopai River, is one of the most sought after real estates in West Bengal may go against him. “He converted the desert-like area into a green belt sending the land prices skyrocketing”, cribs Bishwabhuti Guha, a local resident. A case of a do-gooder being condemned, indeed! But, that is not the only instance of Somnath being at the receiving end for no fault of his. The stories about his Presidential aspiration being another example.

What prompted such stories was an innocuous comment delivered on a TV channel after prolonged prodding. Asked whether he would accept the post of President of India, if it was offered to him, Somnath replied, “Who won’t be proud to accept the post. I will indeed be most honoured.” The stories triggered by his statement couldn’t be stemmed even after his categorical denials that “nobody approached him with the offer and I too didn’t discuss with anybody.” Chatterjee’s stint on the Speaker’s chair was marked by near absence of trust between him and the Opposition, mainly the BJP, which threatened to move a no confidence motion against him at least on two occasions. But, Somnath is not someone to be cowed down by threats. He not only carried on with the job undeterred, but also earned the dubious distinction of being the first Speaker to have conducted the business of the House amidst din & shouting. He is also the first Speaker to have been accused of holding office of profit as Chairman, Sriniketan - Shantiniketan Development Authority ,for which the Opposition demanded termination of his Lok Sabha membership. “This is character assassination of not only an individual but of office of the Speaker,” he shot back belligerently.

Somnath fiercely guards legislature’s supremacy over judiciary and doesn't mince words in condemning Supreme Court’s ‘interference’ in formation of the Jharkhand government and apex court’s stay on the OBC reservation law passed by the Parliament. “Judiciary can’t solve all problems plaguing the country like infant mortality, child marriages and female foeticide,” he mocked at the judiciary recently. Coming from a barrister, such diatribe was a rude shock to the legal community. Somnath Da, as he is fondly called, has never been elected to the top policy making body of the party politburo. His father N. C. Banerjee was a Hindu Mahasabha leader. On his return from UK, Somnath joined CPI (M) and became close to Jyoti Basu, who was instrumental in getting him into CPI (M) Central Committee in 1984. His proximity to Basu is said to be the reason he could never cozy up to the next incumbent Buddhadeb Bhattacharya. But, that’s not an impediment in his ascent to being the first citizen of India. The actual hurdle is lack of support from allies, especially Congress, which wants to install its own man on Raisina Hills. Better luck next time Somnath Da!!

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Source : IIPM Editorial, 2007

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

‘Burning’ urgency

Deadly smoking zones of India
Jharia is virtually India’s only reserve of coking coal. As per industry estimates, over 50 million tonnes of coking coal have been lost to subterranean coal fires (SCFs) over the last few decades. These SCFs give birth to plumes of smoke, dead and junk vegetation, and arid and infertile terrain. The exposure of women and children to this kind of environment affects irrevocably their quality of life. Even those who do not work in the mines also complain of various respiratory illnesses and skin diseases. Due to terrible economic and financial conditions, these victims of deadly gases are left with no choice but to live and work under these deadly prevailing conditions.

People residing near mine-sites are forced to consume the contaminated water that affects the children and the pregnant women. The chemical residual gets mixed up with the water table and causes irritation of the respiratory tract, ulcers and pneumonia. Studies reveal that chromium has become a common constituent of the food chain and has been found in edibles like mango, paddy and fish. Such kinds of subterranean fire has ill effects not only on the health of the population that lives nearby, but indirectly, even on the national economy. The solution, though, is quite complicated, and would require the roping in of international experts. But the same has to be done with ‘burning’ urgency...

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Source : IIPM Editorial, 2007

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