IIPM- News Articles

Wednesday, August 11, 2010

“India is an excellent fit..."

GE India CEO John Flannery affirms that the country is at an early stage of devel opment and GE has a number of solutions for its growth problems in an interaction with virat bahri of B&E

B&E: GE India's financing business faced a number of delinquencies in the past. How are you going to address that situation now?
JF: The whole industry - especially in the unsecured consumer sectors - has seen higher than normal delinquency in the past 24 months. We have dealt with it in the "old fashioned" way in terms of just adding a lot of resources and focus to the situation but also using our global best practices to apply technology based initiatives to reduce delinquency. The worst is behind us for sure at this point and we were solidly profitable in the first quarter of 2010. Going forward,we want to remain an active player in financial services in India. We will continue to build out our partnership with SBI and invest in sectors where GE has significant expertise like infrastructure, energy, health care and aviation. We are also interested in continuing our history of making private equity investments - we've done a significant number of deals over the last 10 years with very strong returns - we would definitely like to see more of those opportunities.

B&E: GE has traditionally been famous for aspiring to be among the top three in every market it enters. Where does your company stand with respect to that philosophy when it comes to the Indian market?
JF: Our overall agenda is to become a much bigger player in India than we have been historically. As much as India has grown in the past decade, it is still in the very early stages of its long-term development. To achieve our agenda, we will be focused on enhancing our local product development and marketing capability, expanding our technology and manufacturing base and seeking to partner with leading Indian companies where that makes sense. As with any successful organisation, making sure we attract, develop and retain the absolutely best human resources is of paramount importance. When we look at where we are today in India, we are not fully satisfied. There is no shortage of opportunities in India, and there is a good fit to become two or three times the size we are today. We have had solid success in many areas but given the opportunities in this country and their excellent fit with our areas of strategic focus, we should be doing more — significantly more.

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).

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Tuesday, August 10, 2010

Israel: Keep the faith

Masada, the UNESCO World Heritage Site, the complex of palaces and fortifications built by King Herod, stands on a horst on the eastern edge of the Judean Desert. The place was scene to a two-year-long siege by Roman forces during the First Jewish-Roman War. At the end of the two years, the Roman garrison went for an all out offensive, leaving the 900-odd Sicarii rebels with the only option of surrender. The rebels opted for mass suicide and the Romans occupied the City of the Dead. Till date, the opulent baths, storage houses and the hanging palace of Herod stand firm, beautiful witnesses to a horrific and heroic act in defence of faith. This was a heavy experience too. Today, members of the Israeli Defence Force (IDF) hold their swearing-in ceremony on the top of Masada. It ends with the pledge: “Masada will not fall again.”

The coastal city of Haifa is Israel’s largest port. Standing on the top of the Bahai centre, one can see the marina, the port, and the hills beyond which lies rocket-spewing Lebanon. Haifa is a typical middle class city, centre of the Bahai faith, famous for its art centre, roadside art exhibits, writers, filmmakers and intellectuals. Haifa is the liberal centre of Israel, and the Left including the communists are a force here to be reckoned with. It is a city where we started shedding the load gathered in Jerusalem and Masada. A 40-km drive away stands the Roman capital of Caesarea with its re-built crusader’s city, velodrome and the ancient harbour where ships of the Empire would once berth.

The Israelis say: “You pray in Jerusalem, stay in Haifa and play in Tel Aviv.” True to the hilt, Tel Aviv is everything that stands for degeneration to the orthodox Jews. Considered a hedonist’s pleasuremax paradise,with its numerous bars, nightclubs, lap dance bars and striptease joints, Israel’s second-largest and most modern city literally never sleeps. People are more cosmopolitan, fashionable and friendly. While the evenings are perfect for the spectacular Mayumana show in old Jaffa, the sea-front promenade, an endless sea of restaurants and cafes, is the right place to spend a lazy day.

Israel is a foodie’s paradise as Jews, when they came from different parts of the world, brought their respective food habits. It is a world food station with a Mediterranean undertone. For outsiders, it is important to know whether a place is Kosher. Kosher places don’t serve meat and dairy together. The wine produced in Israel is at par with the world’s finest. From taking one to the lowest point of the Earth to the highest reaches of the spirit, Israel is a nation like none other.

Tathagata Bhattacharya

Monday, August 09, 2010

Rajat Bal, General Manager EMEA (Europe, Middle East & Africa), International Business, i.Tech Dynamic reveals his company’s India plans to B&E

B&E: Any market share targets in India, say, by the end of this year?
RB: We plan to capture approximately 15% of the official market for Bluetooth headsets by the end of the 2010 financial year.

B&E: What is the current degree of penetration that you have achieved in the market?
RB: Our products are present at the moment in all the Metropolitan cities of the country.

B&E: Your distribution channel appears to be very confined at the moment considering the mobile phone market has penetrated deep into the country. So how do you plan to expand that?
RB: Our current distribution channel is confined to the mobile phone dealer channel. We plan to include Large Format Retail (LFR), online channel as well as Audio Video product re-sellers. The Audio Video channel (AV) is an import channel for us since most new products in the AV segment will have Bluetooth capability.

B&E: What are your future plans for distribution in India?
RB: With Ingram Micro as a National Partner we are looking forward to place our product at 10,000 POS by the end of Year 2010. Our National Partner will focus on both sales & service in the country. Both I-Tech and Ingram Micro will run the business under the company’s theme of “Innovations Unlimited”.

B&E: Straightup, your company’s turnover...
RB: i.Tech’s turnover in 2008 was US$64.5 million.

B&E: What are your views on the latent potential of the Indian market for your products?
RB: India is one of the largest markets of mobile phone users. Wireless freedom is no longer a luxury; it is a necessity. Regulations do not permit drivers to talk on the mobile phones while driving and this is where Bluetooth Headsets gain additional significance. India is a price sensitive market, but consumers in India are willing to pay a price for quality and innovation as long as this innovation has value addition. India is going to be one of the most important markets for i.Tech in 2010 and it will be one of the focus markets for i.Tech.

B&E: Who do you believe to be your closest competitor in terms of the Bluetooth devices?
RB: Our closest competitor in the market is Nokia.

(Ed Note: Responses have been edited contextually)

Saturday, August 07, 2010

Let’s wait for the results, shall we?

Mahindra Satyam is now getting back on track. But the biggest issue facing them is the upcoming June declaration of true results. Can they handle that? by Amir Moin

By the time this magazine goes for print, Mahindra Satyam (formerly Satyam Computers) would be hosting an analyst meet with the theme – New World. New Possibilities: How a re-energized Mahindra Satyam looks at the New World, post the recession; and innovates to create value for its stakeholders. If you look at it in one way, a lot of the alarm bells have stopped ringing at Satyam since the company went through the scam, the confession (by B. Ramalinga Raju, that he had cooked up a fictitious Rs.50.43 billion in the account books), the rescue & recuperation and the acquisition by Mahindra for Rs.28.9 billion on April 15 last year. Customer churn, which was at its zenith in that period, has been all but frozen, and the company is now winning accounts like BASF and GlaxoSmithkline. Mahindra Satyam has secured four big deals & added 25 new clients in the past few months and the FIFA contract too.

A great success was achieved with an out-of-court settlement for the U-paid case last year. It was a long standing case, where U-paid had accused Satyam, its former software vendor, for forgery and fraud. The case ended in an out-of-court settlement of $70 million. But the restatement of results for the company, which would happen somewhere in June this year, could throw up a huge spanner in the shareholders’ expectations. Key shareholder L&T has sold off its stake, saying that the company’s performance is being concealed from shareholders. And the issue of SEC fine is yet to be sorted out.

Initially, there were many challenges starting right from reinstating confidence in the brand in front of customers and sorting out corporate governance issues. The uncertainty pertaining to the future of Satyam was so huge that almost every job portal had the CV of every Satyamite! The company still faces a high degree of employee churn in the realm of 20%. As per reports, around 75% of top management has already left the company. CP Gurnani, CEO, Mahindra Satyam has commented that the situation is now under control and a hiring plan of about 8,000 people is in the pipeline. And there are experts –like Mayur Sahni, Senior Market Analyst, IDC – who support his view (“When you have a workforce of around 53000, then an attrition of 15-20% does not really matter. In fact, the people who matter the most at Mahindra Satyam have still not left the company,” says IDC’s Sahni).

But attrition was not the only issue. Mahindra Satyam lost a lot of customers in the initial four to five months. Still, if one looks at recent events, then things seem to be on track as far as recovery is concerned; yet, numbers on the stock market speak a different language. That’s understandable, since the markets are still embroiled in countless speculations on the true state of affairs in the company till the restated results are announced.

Friday, August 06, 2010

Pimp ma’ ride

Stronger nations station their forces to intimidate weaker ones

You thought imperialism was dead? Hardly, since none can beat Uncle Sam’s current record with more than 369,000 of its 1.3 million troops stationed in 150 countries outside its own. A distant second in terms of troops stationed outside is Britain – with 41,000 out of 217,000 active duty military personnel stationed in Cyprus and Germany, having training missions in South East Asia and Middle East and on active duty in Iraq, Afghanistan and the Balkans. Close on the heels of the Brits are the French with 34,000 out of their total 360,000 defence personnel deployed abroad; the biggest contingent being positioned in Haiti, Lebanon, Cot d’Ivoire, and Afghanistan. Next on the ladder are Germany with 7551 contingents (Afghanistan & Kosovo) and Russia with 5000 (Tajikistan & Moldova).

No matter how they camouflage their occupation of foreign land, no country or citizen wants their nation to be under the control of outsiders. That’s what Hamid Karzai is realising. Despite his vouching for the support of the US-led coalition forces, common Afghans are greatly opposed to foreign military presence in their homeland. Iraqis are also getting impatient with the slow pace of American withdrawal. Even in their nascent democracy, the Iraqi government is forced to pay heed to the popular sentiment; forcing US to commit complete withdrawal by end of 2011. There was a massive rally in Tokyo on January 30 this year to protest against US military’s presence in Okinawa. In Germany as well, the government is echoing the popular sentiment against the presence of US troops.

This new version of imperialism is another way in which stronger countries try to retain positions of power and influence in weaker countries and arm-twist them as per their needs. Such tendencies have to be curbed; as they are self defeating. In the long term, this is a dangerous strategy and breeds hatred and extremism. It backfired for Russia in Afghanistan. It backfired for US in Vietnam. It backfired for India in Sri Lanka. It will backfire even today. The solution is evident – just move out and do something more... stay out!

Sayan Ghosh

Thursday, August 05, 2010

Living up to their name finally?

From a regional player that faced the ire of debtors in 2003 to a company that is aiming to be one of the leading cement players in India in the coming times, India Cements is planning a paradigm transformation. Can it go the distance? by Virat Bahri

When Birla group company Grasim Industries acquired Ultratech and when Holcim took control of Gujarat Ambuja and ACC, they were not just acquiring enhanced cement capacities. Their aim was also to leverage the brand equities of the targets in their bid to broaden their target audience. Even in a perceptually commoditised market like cement, it is very difficult to enhance your reach without the requisite brand power.

India Cements isn’t a company in the league of either Grasim or Holcim, with its presence largely restricted to the south Indian market and a capacity of around 14 mtpa. By volume, it is the market leader in the South Indian market, and has established presence in Andhra Pradesh, Tamil Nadu, Karnataka, Kerala and Maharashtra. Moreover, it hasn’t been long (2003) since the company was compelled to go through the Corporate Debt Restructuring Mechanism (CDRM) under RBI due to its failure to repay its interest and repayment obligations. Since that time, Vice Chairman and MD N. Srinivasan has been instrumental in taking the company back en route to recovery. In the process, he has bought out his brother’s stake in the company to emerge as the sole promoter.

Just like Holcim and Grasim, India Cements now aspires to challenge the boundaries that it had set for itself over the last six decades of existence. And its headline-grabbing route to national fame is not the acquisition of a national level brand, but widening of its own brand appeal and reach; buoyed by the acquisition of the Chennai Super Kings (CSK) franchise in the Indian Premier League for around $91 million in 2008. The company instinctively realised that it had a winner in the franchise from the very beginning. In an exclusive interview with B&E after the culmination of IPL Season 1, India Cements MD N. Srinivasan had exuberantly exclaimed, “In 45 days, we have created a brand. We are able to register our presence in public domain. Making this happen in such a very short span of time is what we have achieved.”

Coincidentally, 2010, the year in which India Cements planned a major QIP to raise around $65 million (in March 2010), is also the year in which CSK won the IPL tournament. The associated recognition seems to be far more important to India Cements as compared to profits or valuations (incidentally, CSK earned around Rs.800 million for the company in 2010). Company officials excitedly discuss on how the CSK branding has made it easier for them to gain dealerships in new markets. In fact, the company’s cement bags are being sold based on the punchline - from the house of CSK. But obviously, this recognition can only be the tip of the iceberg in what would be a long, arduous journey to become a national player. B&E takes a look at how the hard business metrics play out for India Cements beyond the action on the cricket field.

Wednesday, August 04, 2010

Another close friendship gone sour

All is not well between the once thick friends Shahrukh Khan and Farah Khan, apparently because they let their professional commitments come in between their personal relationship. Apparently, Farah wanted to cast SRK in her forthcoming film Tees Maar Khan, which is based on Satte Pe Satta. But King Khan did not wish to do any more Amitabh Bachchan remakes, which upset Farah. This escalated to their spouses as well, as SRK refused to do Shirish Kunder’s film as well. Whoever said friends are forever!