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

Saturday, October 06, 2012

EU DEBT CRISIS: WHO’S NEXT?

Ireland’s Rescue has Failed to Stem off Market Tensions from Euro Zone. B&E talks to Experts, Including the European Central Bank, to Analyse who will be the next Victim of Sovereign Debt Crisis. 

While Portugal is likely to be forced to go for a bailout, Spain still stands a fighting chance of avoiding the same fate, given that its current trends in bond yields come to an end soon. But then, things don’t look good here too. Ten-year bond yields on Spain have already jumped above 5.5% and are at the record high of 260 basis points just behind spreads of 400 basis points for Portuguese debt, 620 for Ireland, and 890 for Greece. What’s more? Spain’s gross debt will be over 60% of GDP this year (at 63.5% of GDP), which is the EU threshold under the Stability and Debt Growth Pact. In fact, with unemployment rate hovering over 20% and the budget deficit at 11.2%, possibility of Spain’s being the next epicenter can’t be undermined, particularly if Portugal asks for a bailout.

This is surely a big concern for European policymakers as it not only poses a threat of a much deeper recession than one recently experienced (when euro zone total output fell more than 5% peak to trough), but also raises questions about the survival of the single currency area. Raison d’ĂȘtre: The fourth largest economy in the euro zone would require more than $535 billion in bailout (way above the bailout packages of Greece, Ireland and Portugal put together) to see it through the next few years. This eats up more than half of the $1 trillion combined EU-IMF rescue fund, with only a little left over after the other three take their share. Not to say what will happen if another nation joins the beleaguered bandwagon (which has the highest probability). This certainly calls for an immediate action, both by the respective national governments as well as EU. Though both the nations have decided to cut upon their spending to bring down spiralling budget deficits (while Spain plans to cut its budget deficit to 9.3% of GDP this year from 11.2% in 2009, Portugal plans to slash it to 7.3% of GDP, from 9.4% in 2009), it will take them years before that actually happens (interestingly, EU’s threshold limit for fiscal deficits is 3%). Thus, as of now, a bailout seems to be the only possible answer to their miseries.

But then, bailouts too, in any case, are not the permanent solution since they only kick the ball down the road. The only stable remedy to Euro zone’s fiscal woes is a structural reform with national governments showing steadfast commitment to reducing budget deficits. It’s not as if the ECB doesn’t realise the magnitude of the fiscal troubles in Euro zone. In fact, Jean-Claude Trichet, President of the ECB, tells in a communiquĂ© to B&E, “I would say that, for all countries, it is extremely important to substantiate the decisions that would allow the goals for fiscal deficit next year, i.e. 2011, to be attained, also taking into account what is going on this year, of course. But I am concentrating on next year. This is the very, very firm message that we have for all countries, including Portugal and Spain.”

No doubt, EU has proposed the swift implementation of comprehensive consolidation plans, focusing on the expenditure side and combined with structural reforms, which will strengthen public confidence in the capacity of governments to regain sustainability of public finances, reduce risk premia in interest rates and thus support sustainable growth over the medium term, but then isn’t EU a little late in proposing these measures? Well, we would say … S#!t happens, when PIGS come out in the open!


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.

 
IIPM : The B-School with a Human Face

Monday, September 10, 2012

AOL: THE HOUSE THAT TIM IS BUILDING

Former Google key man Tim Armstrong is cutting deadwood, exploring new businesses and being trigger happy like how. But his current assignment at AOL could prove to be a career killer. 

But when on September 29, 2010, AOL acquired three Internet startups – namely TechCrunch Inc., 5Min and Thing Labs – reportedly for an amount of over $100 million, it had even the most supportive analysts questioning Tim’s logic in the acquisition. Apparently, this is a move on the part of AOL to become a pure content based entity. According to Armstrong, even though the subscription business still generates a major chunk of their revenue, it is mostly on a decline. As the new content strategy is supposed to work on the mechanism of affiliating advertisers to the content, AOL is planning to invite marketers to work with its editorial team and produce customised content. With this, Tim hopes that ad money will follow suit.

Unfortunately, even if this does work, the fact is that Tim is relocating resources in a suspiciously unproductive manner, and even a seat-of-the-pants analysis is enough to give the reasoning.

After the Time de-merger, AOL was and is basically left with two businesses – subscription and advertising. Subscription, the business responsible for generating almost all of the company’s profits (as per the latest SEC filings by AOL) is alarmingly declining by 30% per annum. It constitutes almost 25-50% of AOL’s web traffic. The advertising business, which consists of a $600 million deal with Google and is powered by the subscription business (due to w


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

Tuesday, September 04, 2012

This Have-a-Cake Government!

The pink papers have been going ga ga over the spanking new Wholesale Price Index (WPI). First, the new index shows that the rate of inflation is 8.5% while the old index would have it at about 9.5%. Conjure and juggle numbers and voila, you have taken care of the aam aadmi! Second, the new index (admittedly) better reflects the changing structure of the Indian economy where citizens now consume a larger basket of products and services. More than 220 new product and service categories have been added to make the index more representative. That’s compelling logic no doubt.

But take a quick look at the kind of new product and service categories added and you will immediately realize how this government – thanks to a hopelessly ineffective opposition and a virtually supine and servile media – is getting away by fooling all the people almost all the time. Some of the new products that are part of this ‘more representative’ index are beer (a weight of 0.155), ice cream, mineral water (I am sure distressed farmers rush off to buy a bottle of Bisleri along with pesticides when they see suicide as the only option), blended liquor, gold (a weight of 0.364), computers, washing machines and refrigerators (a weight of 0.194). How many of the 500 odd million Indians who live in abject and degrading poverty drink beer & mineral water and go to swanky malls to buy computers and refrigerators?

Sure, some might argue that the presence of 500 million poor Indians does not mean that we don’t need a ‘better’ and ‘bigger’ WPI. After all, the consuming classes too are Indian citizens. Fair enough. But how about an honest attempt to create a new consumer price index that reflects the consumption patterns of the really poor and of families hovering on the edges of poverty? Of course, we have consumer price indices of various kinds – for industrial workers and even for agricultural workers. But when was the last time you heard about this government spending time, money and energy on committees to upgrade those indices? The point is simple: for the really poor, more than 80% of income is spent on food. And with rampaging food inflation, you can well imagine their plight. Nobody talks about it anymore because the vocal middle class which also consumes the media has been virtually insulated against inflation because of a rapid rise in family incomes – both in the private and the government sector. And yet, imagine the hungama that is created when the price of LPG cylinders is raised by a relatively meager amount. Really, this is unparalleled hypocrisy for a society that claims to be democratic and a government that claims to think mainly of the aam aadmi.

Food-grains rotting while the poor are starving? This government ticks off the Supreme Court for interfering in policy matters. Vocal and politically powerful groups demand more reservations? Give it to them: most of them will not go to a college anyway. The poor dying of malaria and tuberculosis by the tens of thousands and their families going bankrupt due to medical expenses? Give more ‘subsidised’ land for corporate hospitals.
 
 

Monday, September 03, 2012

UTV’s Global Broadcasting

UTV’s Global Broadcasting division posted a remarkable turnaround in the last year. CEO M. K. Anand speaks to B&E on the favouring factors and future expansion

B&E: UTV Entertainment Ltd. (a part of UTV Global Broadcasting) posted a profit of approx `355 million as opposed to last year’s loss of `820 million. How did you manage the turnaround?
MK:
There has been a big write down that has happened on the inventory side, there has been some consolidation and all movies in the movie library have been taken in and written off. Right now we are sitting on a library which has zero cost on our profit and loss account. So our programming cost has significantly reduced because of that. In general, there has been an operational efficiency improvement between Q3 last year and Q1 this year by absolutely 100%. We were operating at `110 crore; this year our target was `220 crore. In order to achieve those numbers we needed to get `55 crore of revenue. In the year which ended at `110 crore, you would expect that the quarter would have made 27 crore, so the one ending at `220 crore should make somewhere about `35 crore in Q1 but we actually did around `50 crore. So we have already set the run rate for Q4 in Q1 and that’s how we move forward. The GRP increase happened in Q3 last year after a lag of 3 months. We were anyway planning to monetize. In Q4 we did significant marketing; we became sponsors of Goafest, which is the biggest ad event for the advertising fraternity and our ad rates have substantially increased over the last year after that. Also, all the channels were operating at 50% inventory utilization and right now we are operating at 100%.

B&E: UTV has been toying with various genres with Bindass, 3 movie channels and a news channel. What further expansions are expected now?
MK:
A movie business is required as a portfolio player. It is better to have flanking businesses, like a movie business, which are bulk driven in nature so that it becomes easier for you to negotiate business with distributors and advertisers, as long as they are profitable, obviously. But our network will concentrate on the 15-24 target group and we will not push ourselves into the GEC (General Entertainment Channels) business. We are at a life-cycle where the GEC business will go lower. It’s like the mainframe business of the 1990s. If you already had it, it was good; but if you didn’t, it was better to have a desktop business rather then a mainframe one.


Thursday, August 30, 2012

What, how and why of GPM!

A benchmark index to measure relative well being of income classes
 
Wish to know where you stand in your profession with respect to your global peers? Global Poverty Multiple (GPM, visit www.globalpovertymultiple.org) is an internationally comparable ratio developed by IIPM Think Tank in collaboration with B&E presents a comparative picture of the standing of various income receiving classes of a nation against the poverty line income (the latter decided by the nation and/or by international organisations).

GPM is a globally portable ratio that, on one hand, is easy to calculate, and on the other hand, presents a very clear and comprehensive comparative picture of economic well being of various income-receiving classes of countries across the globe. There are many globally accepted indices with a similar intention. GPM does not take life expectancy or literacy rate into consideration. It divides the population into various income-receiving classes and compares their annual per-capita income with the standard poverty line income. Since GPM is a ratio (per capita income/poverty line income), a GPM of “1” of an income receiving class indicates that his income is just on the poverty line, he is neither better off nor worse off. The higher the multiple, the better the economic well being of the particular income receiving class. GPM therefore further allows an inter-country comparison of economic well being of people in different professions by using the poverty line income as the base for comparison. Comparably, the PPP method and the GPM method are quite similar due to the fact that inter-country comparisons become easier.


Tuesday, August 14, 2012

Dependants of jawans killed by Maoists struggle to stay afloat. A report from Orissa by B&E’s Dhrutikam Mohanty

A few days after the surgery, not only did her department pester her to report back to duty, she also received a phone call claiming that she had taken a loan of Rs . 40,000 from the PWF and that the amount would be recovered from her. She was totally stunned. Pratima alleges that an additional Rs. 20,000 was withdrawn by the SP, Cuttack against her name. Says Pratima, “While the government has promised to bear the complete cost of my medical treatment, it is painful that people from the department are fraudulently withdrawing money in our name and then trying to recover it from us.”

When the doctor treating her learnt that the police department wasn’t going to bear her expenses anymore, he stopped taking proper care of her. He discharged her even though she had not recovered fully. She continued to receive notices from her department to join back.

At her tether’s end, Pratima met the then Director General of Orissa Police, Gopal Nanda, as a last resort. He not only waived off her loan but also ordered that she be assigned an office job. She could now see light at the end of the tunnel. But Pratima is still nursing the wound in her leg. It hasn’t healed because of the unseemly haste with which the doctor discharged her from hospital. We ask her how much she has got by way of compensation. She replies, “What compensation are you talking about? I haven’t received a single penny.”

Pratima points out that it has taken the government two years to set up a board to prepare a detailed report on those who were injured in that Maoist strike. She adds, “As for my own case, one of the two board members who examined me was the same doctor who discharged me untreated. I, therefore, don’t have must expectations from this board.”

Now meet Jayakrishna Bardhan, a superannuated government employee who resides in the outskirts of Bhubaneswar. Though he retired in 2004, he still does the rounds of government offices. Sometimes he is in the provident fund section of the police headquarters requesting the dealing assistant to push his file. At others, he is seen in the pension section inquiring about the release of his family pension. It isn’t his own retirement benefits he is chasing. Jayakrishna’s policeman-son was killed in a Maoist attack and all he is asking for is the legitimate compensation for an irreparable loss.

Bardhan and his family reside in a single-storey building in Gadakana area of Bhubaneswar. It has neither a boundary wall nor a proper approach road. The entrance has no door bell. So we knock on the grille. The family’s pet dog, Blackie, barks in response. Jayakrishna is soon at the door to usher us in.

His elder son, Ajit Bardhan, was an Orissa police sub-inspector posted in the Maoist-infested Sundargarh district. While on patrol duty, Ajit was overpowered by a group of Maoists and abducted. The very next morning – the date was July 16, 2009 – his body was found near Jharbeda. Darkness descended on the slain cop’s family. Unable to withstand the shock, Jayakrishna suffered a heart attack. Ajit’s widow, Rosalin, who was expecting her first baby on August 7, experienced acute labour pain even as arrangements were being made to take her husband’s body to Puri.

The Orissa chief minister, Naveen Patnaik, came down to Ajit’s residence to express his condolences to the bereaved family. When he learnt about the condition of the cop’s father and widow, he immediately instructed senior officers to make all arrangements for them.

But nothing moved after that. Say Jayakrishna, “I am still wandering from one office to another for the release of my son’s provident fund amount and family pension. They haven’t even paid a small amount of Rs. 17,000, which I spent on my treatment after the heart attack. The CM had declared the government would bear all the expenditure. I have been to the Rourkela SP’s Office and the IG Operation’s office on several occasions, but nothing has been done. It is humiliating. It is as if they are going to do us a favour. Did my son lay down his life in vain?”

Ajit Bardhan, in a letter to his wife Rosalin, had once written that it would be the happiest moment of his life if he were to die serving the nation. If only he knew what would be in store for his family after his death, he might have changed his view. Rosalin, who recently got a police job under the rehabilitation scheme, is still waiting to get her other dues. She says, “My father-in-law has taken much pain to get my husband’s legitimate dues and I couldn’t help him because of my job and daughter Arushi.” Arushi is only eight months old.


Saturday, August 11, 2012

You know you’re going wrong when fashion trends transform your wardrobe from being cool to terribly cruel...

Larger animals have clamps or a rod applied to their mouths while rods are inserted into their anuses, and they are painfully electrocuted. Gassing, decompression chambers, and neck-snapping are other common fur-farm slaughter methods. A video shows raccoon dogs in China – where most of the world’s fur comes from – being hit in the face with metal pipes, picked up and slammed hard on the ground, skinned alive and thrown in a bloody pile, still alive. One dog in the video lifts her skinned head and blinks her eyelashes at the camera as if to say, ‘why?’

In India, the leather industry plays an important role in the economy, and while leather leggings thankfully haven’t yet made their way to this side of the globe, wallets, belts, shoes etc, are made out of leather. While most Indians are proud of this industry’s growth, its methods of operating are shameful. “Cows, sheep and other animals are crammed into trucks in such high numbers on their way to slaughter that their bones snap, they get trampled, suffocate or die en route. At the slaughterhouse, all of these animals have their throats slit in full view of their companions,” reveals Poorva. While style icons like Madonna will continue to wear fur, other more responsible and compassionate celebrities like Michelle Obama and Charlize Theron are a better example for those eager to stay in step with fashion. And if you must have the fur, opt for faux fur, and so ensure that at least you have no blood on your hands.


Friday, July 23, 2010

Coca Cola acquired local brand Thums Up hoping to kill competition.

The move backfired and Thums Up is still India’s largest selling cola drink. Despite MNCs and big national brands, the staying power of local flavours continues, says Savreen Gadhoke

Bombay, March 15, 1959: Seven semi-illiterate women with a borrowed capital of Rs.80 assemble at a vacant terrace to start their entrepreneurial journey in an endeavour to support their livelihoods. The sales of their product touched Rs.6,196 in the first year itself and in no time the number of workers (only women, fondly called ‘sisters’) catapulted into hundreds and thousands of sisters coming together and joining hands. In 1968, the company opened its first branch outside Mumbai in Gujarat and also added new products to its portfolio. Today, the same company has its annual sales exceeding Rs.3.5 billion with over 80 branches all over India and 45,000 women employees. The product is Lijjat Papad (yes! the same one with a toothy rabbit as its ambassador) started by Shri Mahila Griha Udyog. Lijjat Papad is perhaps the best instance of a regional brand successfully going national. In its 50-year long journey, Lijjat Papad has set precedence for countless regional brands to fulfill their dreams of going pan-India (and even overseas). But what does it take for a regional brand to spread its wings and fly in national – or even global skies?

“Basically,” says Neeta Wali, Director, Brand Talk, “it is the theory of 4Ps only that has to be extended wisely and smartly when a regional brand plans to roll out its offering nationally.” Here, the most important is, of course, the product itself. What products are on offer and are they enough to satisfy or meet the demands of a national audience? Although Lijjat Papad started its business with a single product offering (papad), it subsequently added new stuff to its portfolio like masalas, flour and bakery products. As net income grew, the sisters diversified into other areas like matches, agarbattis and leather products as well. Besides, Shri Mahila Griha Udyog also started producing a detergent powder by the name of Sasa, which became an instant hit. Although papad by itself did appeal to a national audience; but it was also the diversification and addition of new product offerings that added economies of scale to the business, which eventually allowed it to catapult into a strong national brand to reckon with.

Pricing too has played an important role in the journey of regional brands charting a national roadmap. A classic example of a price-warrior has been Nirma, launched by a small time chemist at the Gujarat Government’s Department of Mining and Geology, Karsanbhai Patel in 1969. Priced at a lowly Rs.3 per kg, Nirma gave HLL (now HUL) many sleepless nights, giving tough competition to Surf priced at Rs.15 per kg. Nirma was established as a home-grown regional player with a unique consumer proposition and a special focus on rural as well as low-income groups. “Knowing your target audience is very essential. Even when you roll out nationally, your customer does not change. So, your pricing should be such that it appeals to a pan-India audience,” says Anand Ramanathan, Advisory Service Manager, KPMG. Even when Nirma spread its wings across the country, it maintained its consumer proposition and continued to focus on its target audience only.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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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Saturday, April 03, 2010

I don’t have a philosophical disagreement with global collaboration


Exclusive In chat with Society Magazine - Prof. Arindam Chaudhuri

He’s living in the same house for the last 40 years; and claims that even his food habits, friends and hours of work have remained mostly unchanged. The only changes that excite Sam are the ones he’s implementing at Madison. Excerpts from our interview:


4Ps: You once believed that a good agency is one that is small with a select clientele. Looking at Madison’s billings today, we assume that you’ve changed your mind about that?
SB:
(shrugs) I always wanted to be a craftsman, not a manager. Today, I have inadvertently become a manager. I left Mudra because Mudra wanted to become the largest and the best agency and I did not relate to the agency’s objective. I believed that a good agency should be small with a few large clients.

4Ps: Today, however, is different?
SB:
(laughs) Consistency is the virtue of fools! I started Madison with just two clients – Godrej and Nelco. For the first 5 years, I did not even look at any other client because I was so afraid of letting down existing clients. Today, I view things differently as I am certainly better resourced than in 1988.

4Ps: The Ambani flavour had spread in Mudra during your stint there? Your key takeaway from there?
SB:
I learnt a lot from the Ambani’s – especially that every job must be done and done on time. I’ll narrate one incident of more than 26 years ago when remote phones had just about started appearing. One weekend I was away on vacation. I was in a swimming pool in this resort and Anil Ambani managed to reach me even there over some urgent matter that he wanted to discuss. This really told me that the word impossible did not exist in the Ambani dictionary.

4Ps: And TV as an advertising media became your passion during those years at Mudra.
SB:
In the early days there was simply no television content available. So we not only had to think of advertising but also in terms of organising relevant programming. Remember, I’m talking about the time when only DD was there. So unlike today, when channels like Star and Zee look after their own viewership, back then we had to slog to create viewership.

4Ps: And you carried that learning to Madison...
SB:
In Madison, I was involved in creating Shanti on DD during the afternoon slot. It was a risk. At a time when advertising was mostly restricted between 8:30-10:30pm, we had the nerve to ask DD to give us 325 afternoon slots between Monday and Friday. Nobody bothered to watch TV on weekdays and that too in the afternoon. We changed that with Shanti and brought in P&G and Godrej as advertisers. The clients were happy because we bought them air time at cost effective rates. Most people make the mistake of not fully understanding that clients/ advertisers actually hate advertising. It is only media owners and ad agencies who love advertising. Our search at Madison therefore has always been to find cost effective solutions for clients that help build brands.

4Ps: Are you saying that cost effective solutions are a prerequisite to brand building?
SB:
Absolutely! Advertising per se has become so expensive that most brands have to do big time jugglery to have affordable and workable plans. But to get to that elusive El Dorado of a perfect fit one needs cost effective solutions. We are standing on shifting stands. We have to keep doing new and different things to catch attention and grab consumer’s mind.

4Ps: Is that why you are diversifying your offerings? Given the quicksand world of advertising, where you yourself have sometimes suffered big lows, what’s your risk assessment on this expansion?
SB:
Madison’s lowest point till date was in 1998, when our partnership with DMB&B broke. They were a huge billion dollar enterprise and we were the size of a pin compared to them. They were asking for something that we did not agree with. So we parted ways with them and also some big accounts (like P&G and Phillips) in creatives. Almost 60-70% of our revenues vanished overnight. I was disheartened but even then I knew that I’ll never give up.

4Ps: Where does Lara fit into the picture? Are you grooming her to step into your shoes?
SB:
Yes. I think that today the person who runs Madison World needs to have skill sets that go beyond advertising and its craft. You need specialist managerial skills and Lara fits in beautifully. She is not as dogmatic as I can be and so both of us are able to look at newer opportunities, identify gaps and fill them.

4Ps: But are you not expanding too fast? I mean, from 5-6 units in 2004, you’ve almost 20 units today.
SB:
See, we are constantly making some successful and some not so successful attempts at predicting the future. Remember, advertisers do not come to us because they like advertising. They come because they want a solution to a marketing problem. Our specialist units in entertainment, outdoor, rural and mobile marketing will help us do just that. My dream is to be the agency of choice for every large client, not every client.

4Ps: But these other units are not really doing much to enhance the Madison bottomline yet?
SB:
Madison World’s billings have today crossed Rs.2,000 crores and most of it is brought in by Media and MOMS (outdoor unit). My dream is that every unit should be as highly regarded as media is. In terms of billings – Media will obviously remain the highest because it’s a Rs.20,000 crore market. In comparison, the other units cater to still nascent markets. Outdoor and PR are doing rather well, but they can never match up to media billings.

4Ps: What about selling out to a global player. The industry is constantly speculating along that lines?
SB:
I do not have any philosophical disagreement with global collaboration or partnership. But the partner must respect what we bring to the table. It must be a win-win partnership and serve the interests of our clients, employees and shareholders – in that order.

4Ps: For now, what do the challenges ahead look like?
SB:
Decline in profits, not enough money and cash flow problems – but we can make that sacrifice to deliver to our clients. Following that model, if we have survived for 22 years, I know we have a viable business model. Besides, one of these days, I’ll prove the industry wrong about MC2’s ability to churn out great creatives.

4Ps: Madison World’s billings today stand at Rs.2,700 crore. How soon do you hope to reach Rs.5,000 crore?
SB:
I don’t dream of becoming a Rs.5,000 crore company. That’s not a part of our DNA. But if tomorrow there is an opportunity, we will not let go. Our primary purpose is to improve our ability to provide cost effective solutions to advertisers. If we do that honestly, Madison World’s growth will be a by-product. If we focus only on Madison’s growth, we will lose the plot!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here

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