Marketing Insight

The Petrodollar System

noreply@blogger.com (Larry) — Sun, 23 Sep 2018 08:21:00 +0000

A petrodollar system, means that most of the major oil producing countries are essentially required to price their oil reserves in USD. Major oil producing nations, such as those of the Organisation of Petroleum Exporting Countries (OPEC), Canada or Russia are paid for their resources via the USD. Proceeds are subsequently transferred into the domestic currency and “recycled” back into the energy industry or local economy.

A large implication of this system for the US, is that all countries have to maintain a substantial reserve of US dollars for oil purchases, and hence demand for the dollar globally would never diminish. But the primary question is who benefits from this. To explain this better, let me quickly get into the details of how the American monetary system actually works.

At the helm of it all is the Federal Reserve. It is the central bank of the country and also the most important financial institution in the world. The U.S. Dollar is issued and loaned to the United States government by the Federal Reserve in exchange for US treasury bonds. So basically, the fed buys the US treasury bonds, and creates money out of thin air, to loan the US government for these bonds, which are then required to pay interest on. So in effect, the US citizens are in perpetual debt because of this system and tax collection is primarily an important mechanism for paying back the interest owed by the US government to the Federal Reserve.

And who sets the interest rate targets on the loaned dollars? It’s the Federal Reserve, of course.To put it simply, the Federal Reserve has a clear vested interest in maintaining a stable and growing global demand for U.S. Dollars because they create them and then earn profit from them with interest rates which they set themselves.

Most of the major oil producing nations, lead by Saudi Arabia, price and sell their oil reserves in USD, thus maintaining a global demand for the dollar. Historically a few world leaders and governments have opposed this petrodollar system, which gives an undue advantage to the US on world economy and world politics.

Take the example of Saddam Hussein, sometime in September 2000, Saddam proclaimed that his country would sell oil in Euros instead of USD. This was a direct threat to the petrodollar system. And world events that follow the invasion and capture of Iraq seem hardly a coincidence. And shortly after the war in Iraq was won, the currency for sale of oil was immediately changed from Euro to the USD back again.

Another example is Libya, in 1996 and 2000 the leader of the oil rich Libya, Muhammar Gaddafi, had initially indicated the idea of a gold backed African currency. He found there to be many African and Muslim nations interested in the idea. The US also felt threatened to loose the petrodollar in this oil rich region. The prospect of sovereign control by a growing number of African and Muslim oil states would have been disastrous for Wall Street and London bankers.

Fearing a diminished influence by the western central banks, the French, UK and US then attacked Libya and utterly destroyed their infrastructure leaving them to be ravaged by years of terror from Al-Qaeda and other factions, with the guise of defending the helpless rebels who were opposed to such a brutal dictator.

Why is the US so against Bashar Al Assad in Syria, shortly when he announced the move to switch the country's entire foreign transactions to Euros from USD, the US imposed heavy sanctions and an attack, followed by planned invasion was imminent. The same is with Iran, who vehemently opposes sale of their oil reserves in USD, wherein most of their global oil trade is in exchange of goods for oil, which they have done with countries like Russia and India.

Isn't it safe to assume, that our world politics and global economy is controlled by a select few elite from the world banking system, which then control world events like wars, electing new governments and bailing out nations from their ever encompassing debt. The central banks in almost all the countries of the world are in ever increasing debt, who are continuously persuaded by World banks and the Federal reserve to increase borrowing by taking huge loans, thus piling the nations debt. Which means a country with high debt would also be vulnerable to policy dictat and global interference in their own monetary and national policy by the world banking elite.

I Would highlight how the world bankers are controlling world affairs in more depth in my next article...

Currency Wars - Fight for World Reserve Currency Status

noreply@blogger.com (Larry) — Fri, 06 Mar 2015 15:44:00 +0000

I have been wanting to write this article for quite some time. When I first heard this term 'Petrodollar' I was quite intrigued and wanted to know more about it. I follow world news and events closely and I always wondered, how did the US become so dominant in world events and establish itself as a global power. Is it their work ethic, their democratic values, openness to accepting different cultures, is it technology, innovation, yes these are some of the factors that did help in the rise of US as a global power.

However, I did come across some very interesting theories which compelled me to ask the question, are there few more compelling reasons that helped shape the future and world events that are as of today. And yes, after some research I did feel that the US financial system, backed by strong political strategy and leveraging important diplomatic relationships with oil producing countries had a major role in elevating US to a dominant global force as it is today.

Its relevance with the creation of the Petrodollar system is closely knit and we will discuss in depth about it in my next article. But first let us dive a little in world history. America's rise to superpower status began even before its 1917 entry into World War I. American politicians were already busy devising a strategy to gain dominance over world politics. And one of their core strategies even then was to elevate the dollar as the foremost international reserve currency, replacing the pound sterling.

One of the shaping instruments for America in this objective was the creation of the Federal Reserve in 1914. The outbreak of war in Europe lead to a financial crisis for the European nations. During that period the American exports to Europe increased substantially to help in war efforts and ammunition. America also played an important role in lending and providing financial help to their Allies in Europe. As the conflict accelerated, role of the Federal Reserve assumed greater importance as a central bank and transformed the US dollar into a major international currency.

The federal reserve holding grew as more and more gold entered the country in exchange for US exports. At that time there was a gold standard, which means that every dollar was partially backed by gold. The federal reserve transformed these holdings into government securities which became an important monetary tool for the war. Purchase and sale of these securities, helped shaped the importance of the dollar and strengthened monetary policy. Increasing war expenses led to more dependence on the dollar, and the platform was already set for the dollar to become the dominant global currency. The British pound and European currencies became unstable and businessmen and traders turned to the dollar as the preferred medium of exchange.

After world war II, with the help of Bretton Woods agreements in 1945, the US dollar replaced the British pound sterling as the worlds reserve currency. The Bretton Woods agreements was an important landmark in shaping a world financial order, which led to the creation of the United Nations and the strengthening of other international organizations. The International Monetary Fund was set up to enforce a set of fixed exchange rates that were linked to the dollar. All other currencies were valued in terms of US dollars and thus were indirectly linked to the gold standard.

Before we go further let us understand the meaning and significance of a world reserve currency. A reserve currency is held in significant quantities by many governments and institutions as a means of international payment. Gold and silver were predominantly used prior to the Bretton Woods agreement, after which reserves included the US dollar. Being a world reserve currency has many benefits. The dollars status as a world reserve currency increases the demand for dollars globally. The price of dollars compared to other currencies, the exchange rate increases. The price of US goods is now more expensive to foreigners, compared to other goods, which reduces the demand for the higher priced US exports. However foreign goods are less expensive to US firms and households which in turn leads to increase in imports. The standard of living also increased substantially due to the ever increasing demand for dollar by countries to facilitate trade transactions.

As the dollar was closely linked to gold, after WWII the US had accumulated 80 percent of the worlds gold and 40 percent of the worlds production. The gold-dollar standard which was prevalent, pegged the dollar at $35 per ounce of gold. This dollar linked by gold was the dominant world reserve stand for quite some time till 1971. However, due to the Vietnam war, the US had spent almost 500 billion dollars, hence depleting most of its gold reserves. The US treasury was running out of gold and had only 10 billion dollars in gold left by 1970.

In August 1971, Nixon suspended the dollar conversion into gold. The dollar was now in threat of being overturned as the dominant reserve currency of the world. This put America at a large risk to be overthrown as the worlds superpower due to the diminishing value of the dollar. During that time the US also faced an acute shortage of its energy resources and imported almost 60 percent of its oil primarily from Saudi Arabia.

In a desperate attempt to maintain global demand for US dollars, an important and landmark system was created which was called the petrodollar system. This deal was struck with Saudi Arabia in 1973 and holds important global significance and gives dollar its true muscle and dominance even to this day. I want to cover this deal and speak about the petrodollar system and its effects on the global financial system in greater depth in my next article. It could be seen that whenever any attempts were made to challenge or threaten the dominance of the US dollar as the world reserve currency, America has responded and strongly. America's efforts and world events leading to the dollar becoming a world reserve currency is a very important factor in upholding Americas relevance in world politics as a global power even today. We will dive in further into the petrodollar system and the great impact it has on our world to this day, in my next article...

Exploring the area of Mobility and the tremendous opportunities it presents for businesses today

noreply@blogger.com (Larry) — Fri, 27 Jun 2014 12:22:00 +0000

We are living in an age where most of the people around us use a mobile phone and even smartphones to communicate on a day to day basis. Such is our interaction with Mobile today that we would be lost without it. We use mobile in our day to day lives to make calls, access Internet, play music, do photo sharing, access Whatsapp, Games and the list goes on.

Hence it is not surprising that businesses today see mobile as one of the favorite medium to reach out to their customers. According to Nasscom, the global enterprise mobility market is estimated to grow at USD 140 billion by the year 2020. Such is the impact of mobile that organizations are increasingly using mobile technologies to not just reach out to consumers but also as part of their organizational processes like accessing travel and expense data, mobile banking, dashboards for different processes on mobile.

In fact some of the companies are also revamping their business processes to be more mobile driven. Adoption of mobile in organizational business processes would mean adopting technologies like cloud, analytics and mobile driven dashboards for faster access of information and faster decision making. Management today is looking at information readily available to take quick decisions, save time, improve efficiency and in turn maximize profits.

As a result it is now common for major enterprise application software companies like SAP, Oracle and Microsoft to launch mobile applications of their enterprise systems like ERP, CRM or HRMS. Managers can access their SAP data over a mobile smartphone or a tablet using mobility solutions. Marketing Managers can see their days schedule, plan meetings, analyze budgets and derive insights using a CRM application built on mobile technologies.

A cloud model or online Software as a Service (SaaS ) model is seen as a common mode of delivery of mobile solutions, making them more affordable and easier to implement in companies. One of the key is to identify a business process in an organization which could be revamped or made much more efficient using mobile technologies e.g the education industry is now delivering course content on mobile as a service thus increasing their customer base and also delivering value to their consumers.

If you ask me I would say mobile is definitely a disruptive technology innovation facing companies today. One must leverage this innovation and put it to the best of use where it can minimize effort, improve processes, create better accessibility, save time and cost and in turn increase profitability. I am certain more and more companies would revamp their business processes to adapt mobile technologies as a part of their changing business model.

Analytics and Big Data, and how it has started helping organizations today

noreply@blogger.com (Larry) — Fri, 20 Jun 2014 06:53:00 +0000

When we say big data, the thing that first comes to mind is huge volume of data. Yes, in a nutshell that's true, it is huge volumes of data, but consider this as organizational data with volumes of both structured and unstructured data. This could be data from different databases, shop floor data, marketing data in excel or other formats, data coming in from social media or any other source.

With ERP applications now being adapted widely by organizations, companies have their day to day operations streamlined. Managers can get specific reports to view data as per their needs. However churning out a report from an ERP system is often a time consuming affair. ERP applications are extremely complex transaction processing systems and most of the ERP systems are great at getting data in rather than getting good information out.

Most of the reports pulled in from ERP systems are static reports considering a certain set of parameters. However a dynamic change in request of parameters or some other information is to be seen then considerable time and effort is spent by IT staff to compile and create the report which would fulfill the specific information request.

So in reality you have huge amount of data available, but it becomes cumbersome and at times difficult for top management to get a birds eye view of the data to make intelligent decisions. Management wants to spot trends say in production, quality related data, or want to spot trends in sales of a particular market over a period of time, which of the product line is performing best, which product is low on sales, how to spot trends to reverse this and boost sales. Most of this data is present in the organization, but there is no intelligent system showcasing this data in a visual format with the flexibility to choose parameters on the fly and correlate them with other parameters to spot insights and trends.

This is where the gap in information can be filled in with a good business intelligence and analytics solution. Most BI solutions provide a single platform to extract and prepare the data for businesses to create intelligent visualizations and analytics on the same. Irrespective of the data source, a robust BI solution implementation would involve creating a multidimensional OLAP based cube which forms a base to handle complex business queries and churning reports within a matter of seconds.

An organization can then create personalized dashboards suiting to the day to day information needs of managers from different departments and also for the top management. As we live in an information age where most of the information around us is available on our fingertips, then why should businesses not use the technology if it is available to create intelligent, fast, ready information to make the right business decisions, reduce costs and improve profitability.

Inflation woes and controlling price rise among few major concerns for the new Government

noreply@blogger.com (Larry) — Thu, 19 Jun 2014 09:12:00 +0000

Ever since there has been a comprehensive mandate for the new government with absolute majority, there has been positive sentiment among the people. Most of the businessmen are happy and confident on markets improving, slack industries reviving and better business opportunities on the horizon.

Sometimes I think what is the common man thinking or hoping most. Some of the most important factors that our earlier government couldn't address at best were price rise, large scale corruption, bureaucracy, infrastructure problems to name a few. One of the reasons for such an overwhelming mandate is probably hope winning over odds, hope for a better economy, better standard of living.

The common man hopes that Modi Sarkar would implement some major policy changes and decisions to improve their lives. One of the major challenges now faced by new government is the price rise and inflation.
India's wholesale prices grew 7.52 % in November last year, vegetable prices grew 95.25 % in November as compared to 2012 and onion prices shot up to 190%.

Moreover the weak start in Monsoon this year will only add to the difficulty, with even Modi suggesting some tough steps might need to be taken to revive economy. Some analysts expect onion price to rise up to Rs.100 till October 2014 due to a unpredictable and low rainfall this year.

Some analysts also say our fiscal deficit is high which only add to the challenges. In such a scenario the most common step is to increase interest rates to check inflation. However, as a result companies hurt as borrowings would reduce and this would take a hit on their profitability.

This in turn slows growth and eventually the economy.

We are hoping that Modi government would keep a check on the price inflation, also keeping in mind the economy growth. I am in much anticipation to see what decisions the new government makes. Till then the common man can only wait and hope for the best.

The Power of Open Source!

noreply@blogger.com (Larry) — Sun, 06 Mar 2011 12:57:00 +0000

Open source is a broad terminology. Its use is not just limited to software. It simply means that the end product, be it software or an automobile or just a soft drink, the practices in production and development are accessible free of cost to the public. However in the context of this article, I would be focusing primarily on the software and technology sector.

Open source software has its source code freely available to the public, to use, modify and redistribute it without paying a royalty to the original developer. So developers in diverse industry segments, be it logistics or manufacturing or healthcare, can use the source code as a platform to develop applications suiting to their specific needs.

A bit of 'tweaking' of the code would lead to a modified product, in some cases even with completely new functionalities. So, I feel this is a great initiative to promote innovation among developers instead of solely relying on third party vendors or packaged software applications to meet your software needs.

The Open Source Initiative (OSI) is a community of developers, intended to create a platform for idea sharing, creating awareness, and educating people. The community can evolve and grow only through generous contribution from community partners and large companies who frequently offer their support to them.

Most people believe that Open source, on-premise makes more sense than SaaS (Software as a Service) as the same flexibility in terms of code modification is not available and companies would not have full access to the hosted code. Most of the IT experts and professionals love the Linux Operating System and the Linux Community.

This could be because of the fact that Linux has thousands of open source programs of high quality, which are freely available for use and testing. In fact in a recent discussion with an IT professional in the IT services industry, he stated that Linux is indeed addictive due to the flexibility it provides and the amount of research that could be done. It is just great for a developer to experiment with new code and applications with Linux.

Some of the most popular Open Source products are Linux (Operating System), Symbian (Mobile Operating System), Apache (HTTP Web Server), Eclipse (Integrated development environment) and Mozilla (Web Browser).

Open Source projects and start-ups are often funded heavily by Venture capitalists. Venture capital funding for such projects grew almost by 40 percent reaching $89 million dollars in the first quarter of 2010. Popular companies like SugarCRM and MySQL have been backed up by large Venture capital funding.

Apart from Venture capitalists, the Open Source community receives a lot of funding from large companies like IBM and RedHat. IBM supports the Eclipse project. RedHat supports Linux applications. SourceForge supports and hosts thousands of such projects. Some of these companies may also receive public funding from the Government.

However I sometimes wonder if the Open Source Community can be a legitimate threat to vendors of proprietary software. There is still very less actual adoption of Open Source applications. Most vendors cite a high total cost of ownership (TCO) for these applications.

These costs could include the costs of consultants, audits, training, internal development and the overall effort associated with a move towards open standards. There are various steps for a company to consider a strategic move towards adopting this technology. Details of licenses, identifying value, understanding the maturity of the software, identifying channels to procure and risk evaluation needs to be done before a company takes a decision to adopt these softwares.

According to a recent research conducted by Gartner, only one in every five organizations was adopting open source consistently in all departments of the company. So a large part of the business community is in the process of evaluating or finding value in these products for their businesses.

Traditional software vendors such as Microsoft and SAP have taken steps in order to respond to open source adoption. SAP has taken active participation in the Eclipse Foundation. Recently migrating from Strategic Consumer to Strategic Developer, SAP supports the Eclipse Foundation by providing full time resources and developers for various projects. This is a strategic move to strengthen its ecosystem and provide seamless integration of open source software with SAP applications.

Even Microsoft, which everyone would seem is against open source technology, actually has a strategy in place to work with it. In fact, Microsoft's strategy is simply to let these applications run on top of Windows. This would enable these applications to be a part of the Windows ecosystem, with an aim of making Linux obsolete.

On the other hand, Oracle's acquisition of Sun Microsystems was a big move in the open source community. Some of the popular applications like MySQL, OpenOffice and OpenSolaris are now a part of the Oracle Open Source umbrella. Oracle recently announced its strategies of managing MySQL and OpenOffice, wherein both entities would continue to receive investment from Oracle.

I think Open Source has contributed a great deal to the software ecosystem and is definitely here to stay. How would the proprietary software vendors and customers adapt and evolve with it is something which would be interesting to see in the near future.

How Social Media can be used for Tangible Business Results and Insight on some Great Success Stories

noreply@blogger.com (Larry) — Tue, 26 Oct 2010 15:45:00 +0000

I often think why is the need for proliferation of social media into every industry. Aren't conventional marketing techniques doing the job pretty well. I mean the company would still be achieving the regular sales numbers and doing good business even in absence of some of the internet marketing techniques.

However social media techniques if used correctly and done in the right way, produce tangible business results. And if used in the right way, can add those extra bucks to the bottom line as well. Twitter and Facebook are the two most popular social media platforms today, followed by Orkut, Myspace, Linkedin and some other social media sites.

I was reading an article on the companies that use social media the best. The company that topped the list was Coca-Cola and I wasnt surprised. It executed one of the largest social media campaigns on Facebook called Expedition 206. Now this is a bit similar to the MTV Roadies concept. In Expedition 206, three Coca Cola Brand Ambassadors would be chosen by the fans to make a year long trip visiting all the 206 countries where the brand is sold.

Such a fresh concept, and executed brilliantly on facebook where photos, vidoes, messages of fans would be posted. This would create more die hard loyalists for Coke, would act as a brand energizer. People would relate to their favourite brand and interact with loyalists on facebook, posting comments, and pictures which is great for evangelizing the brand, reiterating the fact that no matter where you go Coke is truly a global brand.

Another example of a company using social media in a great way is my own favourite brand Dell. Dell claims adding $3 million in sales using the Twitter platform. Dell Outlet on twitter is a page than has more than 1,500,000 followers. It announces great discount offers on this page and the link is redirected to the actual page where a customer can make a purchase. This is a great example of quantifiable ROI of social media.

Dell interacts with its followers on Twitter and Facebook to gain feedback about its new product launches, resolve any service issues and respond to any other queries of fans and customers on their forum. So in a way your market research is done for you online, and even better you get to gain valuable insight and be in direct touch with your brand loyalists and fans.

These were a couple of examples of companies leveraging social media and using it as a serious marketing tool. I strongly feel that irrespetive of the size, companies must look at social media marketing. If you ask me why, its simply the way of the future. I remember Marc Benioffs quote that he had wondered why isnt all enterprise software like Amazon.com, when he started Salesforce.com. Now he wonders why isnt all enterprise software like Facebook.

On that note, even SAP Labs benefits hugely by social media and is one of the few companies making the best use of social media. Earlier Netweaver was a platform to network and resolve business issues all across the globe. Now global users and employees can stay connected by social media and participate in discussions about usage issues or patch fixing or any other adoption issue. Hence increasing the "support" efficiency of SAP and it can reply to its user base and cutomers via social media with ease. This would eventually increase brand adoption and more users for SAP.

For smaller companies, it is cost effective and an easy way to reach out to its audience. Even if the company has a niche customer base, this is a great way to share ideas, discuss with your customers and gain new insights. Keeping the customers updated with latest product developments and news and interacting with them on a regular basis, would increase loyalty, brand recall and eventually the reach of the product or brand. To close I would recommend a focussed social media strategy for all companies, as it is an easy, cost effective and new way to reach out to your customers, and in my view is the way of the future.

What's the real reason behind the Stock Market Bull Run..are FIIs good or bad for us in the long run?

noreply@blogger.com (Larry) — Tue, 19 Oct 2010 11:35:00 +0000

Every day I see in the newspapers, about the great bull run and a gala time for Indian investors, reaping money after a long sluggish phase at the markets. A lot of FII (Foreign Institutional Investors) are partly responsible for this surge in the markets. Foreign investors are looking at India as a great investment destination. More’ so, India is growing and is a safe bet, especially considering the global economic scenario and the financial situation in the US.

In fact I just read a quote from Dr. Vijay Mallya himself, where he said he was happy to see India slowly becoming the preferred global investment destination. But then why the sudden shift in India as an investment hub. Well not just India, but most of the developing countries have seen a rise in global investment trends.

A recent report on Chinese growth trends reaffirms the faith in the global investor that Asia is indeed on a growth track, and this is the time to invest to reap huge long term returns. However there is another reason for this strong shift in investment patterns.

One is the second phase of Quantitative Easing by the US Fed Bank. Apart from this major banks are providing zero interest loans to investors investing in high yielding assets such as securities and debt. Considering India as a perfectly positioned emerging economy, investors are now investing huge sums of money in the Indian market.

However, the question arises whether these are good signs for India in the long run. From one point of view, it is a good move as India is gaining large amounts of foreign exchange and the markets are on an all time high.

On the flipside, more foreign exchange puts upward pressure on the rupee, causing it to appreciate. This could affect the profitability of exporters. Inflationary figures also tend to increase due to this. So what is the solution? One of the things to look out for is whether this trend would continue or is it a passing phase.

Countries like Thailand have already introduced capital controls like adding a tax slab on bonds. However if this trend is just a passing phase, introducing capital controls could hurt our investment scenario in the long run as investors react strongly to such controls.

It is thus a tough call for the RBI, yet I feel that capital controls in the currency markets would ensure that exporters interests are protected and we do not lose out too much with heavy rupee appreciation and an out of control inflation rate.

RFID tag - technology and scenarios

noreply@blogger.com (Larry) — Thu, 20 May 2010 15:56:00 +0000

Check out this SlideShare Presentation:

RFID tag - technology and scenarios

View more presentations from Davide Del Monte.

Manage your HR function better with an integrated HRMS solution

noreply@blogger.com (Larry) — Sun, 02 May 2010 07:43:00 +0000

Human Resources management in different companies is viewed differently. Some companies view HR as an administrative task that needs to be done. In fact, till the 1960’s the personnel department was still viewed as a record keeping function that did the payroll tasks and organized the company picnic.

However due to ever increasing issues in managing workforce and the increasing complexities of Human Resource management, the top management soon realized that the function is not just important but critical to its business. Terms like organizational behaviour, complex psychometric tests, feedback forms, having policies and structures in place are becoming very important in today’s increasingly competitive business environment.

Hence most firms look at creating HR as a strategic business partner within the firm, having a definitive say in strategy meetings, adding value to business by suggesting changes in policies or the way employees are managed within a firm. Most companies now see HR as a potential game changer, having a definite role in strategic planning of a business.

For HR to take such a comprehensive role it must first identify the business needs, processes and both, short term and long term goals of the company. Hence companies find the need to more efficiently manage their day to day operational tasks more efficiently so they can channelize their resources in the more strategic aspects of HR.

This is when most firms look at implementing an HRMS software solution to help them better manage their daily complex processes. However companies must first do a rigorous assessment whether they really need an HRMS system. Issues like how much paperwork is becoming cumbersome to manage, record keeping and a growing need to quickly run reports, needs to be assessed.

Considering a web based HRMS solution would seem to be a good option, especially for SMEs who want an integrated and cost effective solution.Using this solution, employees can easily see their attendance, benefits, leaves pending, claims and many other features which advanced HRMS software’s provide.

Most HRMS systems also have the option of multiple user licenses which gives specific access to different users based on their role and function in the company. For example, an HR manager would have complete access of all the employee records, while employees would have restricted access to only their records, and every department manager would have access to only the records of his functional department.

Even if the company consists of only hundred employees, a web based HRMS system would be useful to streamline the entire HR lifecycle right from training to recruitment to payroll management. This helps in increasing efficiency of HR processes, and limits errors in payroll or ambiguity in record keeping. At the same time, it empowers employees to focus on the more strategic aspects of HR.

A good HRMS system would be one which is user friendly, secure, having wide range of modules covering the entire HR lifecycle, would be flexible in terms of implementation, and being compliant to open database platforms (ODBC) such as Oracle or Microsoft SQL Server. This would allow better integration capabilities with other applications as and when required.

Going for a comprehensive HRMS solution is becoming a must for large organizations and a great investment for SMEs to provide efficiency and add value to the HR function in their company. The time is soon when majority of companies would have HR as a strategic enabler and a business partner for contributing to the long term strategies and goals of a company.

The all new SAP Business One 8.8 release for the growing SMB market

noreply@blogger.com (Larry) — Sun, 18 Apr 2010 11:24:00 +0000

The mid market adaption to ERP software is increasing every day, and so is the constant changes and new releases in the ERP provider landscape. So how can the market leader in the Enterprise Software landscape stay behind. SAP has announced its latest release, SAP Business One 8.8 for the small and medium sized (SMB) market.

With growing competition from Microsoft Dynamics and Oracle in this space, SAP Business One 8.8 has some refreshing add-ons to differentiate its product offering. One of the new features that is eye catching is the new interface which is much more user friendly with an improved GUI. Newer icons give SAP a more Web 2.0 look, however giving users an option to switch to the previous GUI.

The integration of Crystal Reports in SAP Business One gives users and partners an easy and flexible option to create and view reports. Data archiving is another new feature for SAP Business One 8.8, which enables users to archive old operational data like sales order closures, dead accounts or gives the option to deactivate certain ledgers or partner information.

One of the most interesting features for companies in varied industries; is a solution packager feature which helps companies to implement pre-packaged industry specific solutions. This gives additional flexibility to companies to add certain configurations that are specific to their industry or deploy certain industry specific add-ons.

A feature that caught my attention was even country specific customization, for example SAP Business One 8.8 lets you send an e-TDS return statement to tax authorities, in liaison with Income Tax Act, 1962 norms of India. This is an example of the localization concept and an epitome of the phrase “Think Global, act Local”.

With this release, SAP has gone one step ahead on the infrastructure and security front as well. With the help of advanced encryption algorithms and enhanced access mechanisms, the access to critical data is restricted. Better memory and cache management is another significant improvement on the infrastructure front.

Most of the times, customers have a concern of adding customized modules or need integration of SAP with some third party tools. The new SAP Business One SDK can be used to create customized applications and interfaces with third party applications with ease. Hence, giving flexibility to SAP users and adding to their convenience in using the application.

SAP has also recently announced better business network connectivity for its customers, hence empowering them to better manage their business partners and tightly integrate their various branch locations with their headquarters. With a plan to release by April 2010, SAP Business One 8.8 has some strikingly new features which have the potential to put SAP in the driver’s seat in the SMB market as well.

Some really innovative ideas like iPhone integration and increased integration capabilities with on-demand Web applications shows that SAP has its roadmap and focus attuned in the right direction. As most people say that the future is cloud computing, SAP Business One’s added capabilities shows its willingness to adapt and constantly evolve to keep pace with changing customer needs and the business environment.

How would the latest SAP Business One product fare in the SME segment is something which everyone is eager to know. It would be interesting to see how other Enterprise software vendors would react to the release. However SAP Business One 8.8 is definitely a product which reaffirms SAP’s dominance in the Enterprise Software space.

Cloud Computing - Is this the way of the Future

noreply@blogger.com (Larry) — Sat, 13 Mar 2010 13:54:00 +0000

Cloud Computing is slowing becoming a buzz-word in the Software Industry. So much has been said about the power of cloud computing and its ability to revolutionize the way we do business.

So what exactly is cloud computing? A very simplistic explanation would be internet based use of technology. Here the term cloud personifies internet as a medium to communicate and collaborate. This would allow companies and consumers to access applications over a connected network without the hassle of installation and maintenance.

Most people jump to conclusions that cloud computing is same as SaaS (Software as a Service Model). However SaaS is only a part of this larger concept. Cloud Computing includes three core aspects. These are Infrastructure as a Service (IaaS), SaaS and Internet based development (Platform as a Service).

IaaS typically provides the networking infrastructure and other hardware support to software developers and vendors. They can use these IaaS services to host their applications on the internet to their end users. This is a concept in the nascent stages, yet providers like Amazon, provide such computing services to their customers.

SaaS is a concept which has been in use for some time now. Vendors like Salesforce.com, Google and NetSuite use it in a big way, and it is slowly gaining popularity as an effective business model. The basic idea behind this concept is that customers can access software applications, on demand over the internet via a Web Browser. In this model, customers can subscribe to the software, instead of purchasing it. Hence they can pay for the period for which they use the software, most commonly on a pay per month basis.

PaaS is a concept where software developers can develop and host new software via the internet, without having to purchase new hardware or software. Microsoft Azure and Google Apps, are some of the popular PaaS providers.

Seeing a rise in popularity of this concept, major software vendors like SAP, Oracle, Microsoft and IBM, each are working on devising key strategies for the same. Currently vendors like SAP and Microsoft have a combined share of thirteen percent in the Indian SaaS market, with Webex and Salesforce leading the roost. There is a general trend of SMEs adapting much faster to a model like this as compare to larger corporations.

It seems traditional on-premise application providers have shown some resent toward this increasing buzz and adoption towards the cloud hype. In fact Oracle CEO Larry Ellison states that the IT industry is more fashion driven and begins to associate everything to a cloud, in a sarcastic statement to the press. Yet, Oracle has its own strategy to counter cloud computing. Its CRM on-demand tool is slowly gaining popularity among the industry.

SAP is not far behind when it comes to cloud adoption. It has taken a hybrid approach to integrate the on-premise and on-demand models to ensure unison and integrity among enterprise applications. SAP BusinessObjects is an on-demand solution to cater to the diverse needs of small and medium sized enterprises.

There are still some risk factors and apprehensions to a complete shift to the cloud. In fact, SAP's former CEO Leo Apotheker had said, that a large company cannot put everything on the cloud, as the cloud would collapse. John Wookey who is now in charge of SAP's on-demand strategy, is working on new strategies to counter the hype of cloud computing.

How will businesses, software companies adapt to the changing trends in the software industry is something to look for in the near future. But from the looks of it, cloud computing is definitely something that is here to stay.

Also posted on my Ezine Profile :

http://ezinearticles.com/?Cloud-Computing---Is-This-the-Way-of-the-Future?&id=3800448

Effective Sales Strategies to Maximize Business Opportunities in a B2B Environment

noreply@blogger.com (Larry) — Sat, 13 Feb 2010 07:57:00 +0000

In any business, be it a simple retail shop consisting of cookies or books, or a Multinational Corporation seeking to sell high end electronic products to corporate customers, sales is a vital component. This is because the survival of a business depends on this quintessential function, and maybe this is why the best salespersons are the most sought after and highest paid professionals.

Sales processes differ in every industry. In a Business to Consumer Sales Environment, there are a lot of factors which contribute to effective sales, including the product quality, the marketing promotions and campaigns; in case of a retail setup, the store design and excellent service are key differentiating factors.

A good product well marketed and advertised like a Herbal Shampoo or an Eco Friendly Refrigerator, would require less efforts on the parts of the Salesman, as the consumers who want to buy already have a fair idea of the product due to the barrage of advertising. However in case of a Business to Business environment, the role of the Salesman becomes very important, in addition to the marketing campaigns and strategies.

As advertising expenditures are relatively less, companies selling in a B2B environment need to focus on targeted marketing campaigns keeping in mind their target segment and product offering. Marketing activities definitely support a sales team; however the company must chalk out a clear sales strategy and select the right model best suited to the company.

For example a sales model could be to outsource the sales activities to another firm. For companies who shrug to invest in sales development or do not have a robust sales plan or strategy in place, can seek the help of Global Sales Partners who manage the entire sales process and represent the company for you.

In case of an in-house set up for sales management, it is essential for a company to identify the roles and responsibilities of different sales personnel. The right sales team mix, for example the sales development representatives for prospecting and lead qualification are responsible for generating qualified leads and the field sales personnel would be responsible for closing the deal. A collaborative effort with the right mentoring and reporting structures in place, in unison with the marketing team as well lead to high end results.

Managing all the processes in the sales cycle efficiently will lead to a shortened sales cycle. The sales team needs to be well trained about the company and its product offerings. Moreover the right research pertaining to target sectors and companies, result in a higher hit ratio and better ROI on sales efforts.

Good sales collaterals and information also go a long way in engaging the interest of the prospective buyer. The sales team needs to focus on high productive leads and invest more time on them. Prioritizing time becomes very important and hence a sales representative needs to invest more time in leads which have high buying capability and interest rather than wasting time on cold leads.

A good sales plan, with a sales budget and a fairly accurate forecast of sales, helps keep a clear vision in the minds of the sales team. This enables the sales personnel to have a clear understanding of the deliverables, which makes it easier to work accordingly. However the sales manager and top management needs to set realistic goals, which are not too idealistic or too pessimistic, keeping in mind past trends.

Accurate evaluation, measurement and compensation of the sales team are very important to increase accountability and to motivate high achievers with rewards or incentives on achieving the sales targets. The strengths and weaknesses of every sales employee can be measured using certain sales metrics to understand the conversion ratio, calls to leads ratio and other parameters. Steps can then be initiated by the sales manager to assist or improve the team members in their respective areas of weaknesses.

With the advent of technology, more and more firms are looking to implement dedicated Customer Relationship Management (CRM) softwares to improve their sales process management. CRM software is a tool which has detailed reporting capabilities and access to key information in a simplified manner with efficient searching capabilities. This saves a lot of time and sales people can work faster and more efficiently.

Sales department is becoming more of a strategic function in most companies and hence the right management and strategies go a long way in adding more to the top line and bottom line of a business.

Streamline your Accounts Receivables Process to Improve Cash Flow Efficiencies

noreply@blogger.com (Larry) — Sat, 23 Jan 2010 15:36:00 +0000

An accounts receivable function in any company, if managed efficiently can result in high dollar savings every year. For large conglomerates, where the scale of operations is huge, there is a wide range of sources for accounts receivable, including dealers, agents, retailers and many such disparate sources. For such a firm, maintaining a clear visibility on the cash flows and keeping a track on credit management of different sources becomes a problem.

Hence, these companies lose out on millions of dollars due to extended DSO (days sales outstanding) periods and no clear visibility with respect to future cash flows. This hampers the decision making of CFOs and top management due to lack of a consolidated picture of cash flow and working capital.

The onus then is on the A/R department to manage this process effectively so as to minimize losses due to bottlenecks in the process. Most A/R teams collaborate with the treasury department and chart out clear cut strategies on streamlining the process. The CFO needs to take an initiative in revamping existing processes to improve efficiencies and in turn the bottom-line.

For instance, the CFO charts out a set of key performance metrics with inputs from the treasury department. The Six Sigma wave has influenced several large corporations, especially after GE revolutionized the concept and continues to do so by extending it to its customers. Most companies look at implementing a Six Sigma process in the accounts receivable cycle. Using Six Sigma metrics helps the company to identify patterns and to measure existing bottlenecks and take corrective measures in improving the collections management process.

Large Enterprise software companies like SAP, help to better manage transactions by creating an automatic entry in the books of accounts, as and when a transaction takes place. This helps collection agents gain a clear picture on the overdue receivables and prioritize collection efforts. Most of these sophisticated ERP products from global vendors like SAP, Microsoft and Oracle, give in-depth reporting capabilities on past trends and all information pertaining to the A/R process.

Almost all large organizations have these sophisticated systems in place. However companies still lose out on millions of dollars due to inefficiencies in the process or workflow of the accounts receivable cycle. For example, issues like deductions and disputes occur outside the A/R department. Lack of a clearly defined workflow and an optimized set of metrics for these issues can lead to higher DSO’s and bad debts for the company.

For example, consider Syngenta, a $10 billion organization, which did a complete revamp of their existing processes in their A/R department. Facing challenges in collections and credit management, Syngenta put performance metrics in place for their A/R processes and introduced new policies to minimize their DSO’s. These steps resulted in a drastic reduction of their DSO to just 4.5 days and a whooping $3 million to their bottom line savings annually.

To stay competitive in today’s economic scenario, more and more companies, not just large corporations look to generate savings and add to their bottom line by managing the accounts receivable process more efficiently. Various cash flow management softwares are easily integrated with ERP systems, and are being used by organizations to gain a stronghold on their entire receivables process.

Companies are even looking at adopting newer business models like that of deploying a Shared Services centre which would centralize the accounts receivable process and streamline the customer-to-cash cycle. Be it a small company of just fifty employees or a Fortune 500 company, an efficient accounts receivable process goes a long way in charting out the right growth and investment strategies and for the long term growth of the company.

Growing Technology Awareness and Enterprise Software Adoption in Small and Medium Sized Businesses

noreply@blogger.com (Larry) — Sat, 02 Jan 2010 09:59:00 +0000

The term ERP was essentially coined for large enterprises and perceived as a tool for Fortune 1000 companies. Smaller companies shrugged from the term ‘ERP’ itself because of the preconceived notions of huge costs, high maintenance and large number of resources required to maintain this high end technology. However perceptions are fast changing, and with innovation in the cost structures and application architectures, ERP adoption is on a rise, with the SME segment beginning to see value in these offerings.

Technology giants like SAP, Oracle, Microsoft, and Sage have been dominant in large companies, with virtually every large enterprise having a robust ERP application to integrate its processes. However most mid market companies and SMBs do not have a robust solution in place and are unsure of the economic viability and ROI it would generate.

To cater to these apprehensions and to leverage on this huge opportunity, Enterprise software companies are focussing on developing products which are tailor-made to suit the business needs of these companies. For instance SAP Business One and Microsoft Dynamics NAV are products targeted to suit the operational needs of smaller companies.

They are also aggressively priced, keeping in mind the budgetary constraints of SMEs. The space for ERP providers in the SME segment is becoming highly competitive with local vendors going toe-to-toe to compete with large vendors like Microsoft, Oracle and SAP. This creates additional confusion in the minds of companies to identify the right solution for their businesses. Most of these software companies spend a lot on their marketing expenditure to create targeted campaigns to increase the level of awareness among SMBs with respect to technology adoption and its long terms benefits to business growth.

SMEs would take a call more often based on referrals from existing partners, suppliers and customers. A tried and tested solution in the industry then tends to become the preferred solution in the particular vertical, and most companies then prefer to go ahead with that solution. However some of the key issues for any company to implement an Enterprise solution would be its economic feasibility, time to implement, the Total Cost of Ownership (TCO), scalability, maintenance, ease of use and its long term ROI.

Keeping all these things in mind, Enterprise providers are gearing up to consolidate their shares in the highly growing SMB market which shows large revenue generating potential. SAP has already set a goal to reach 100,000 mid-market customers by 2010. Traditionally an on-premise solution, SAP is also innovating on its technology architecture to enable partners to build more customizations, and it is also planning to roll out a newer version of the Business ByDesign product for midmarket customers, which is essentially based on the on-demand model.

With huge competition from Microsoft and Oracle, the market for SME enterprise solutions has become fiercely competitive, not to forget the ever increasing base of local Enterprise software providers. Which vendor comes out to be a winner in 2010 is still to be seen; yet the SMEs would benefit from innovations and new value additions from these software companies which would increase their operational efficiency and profitability in 2010.

Aviation Industry Woes Continue

noreply@blogger.com (Larry) — Sat, 24 Oct 2009 12:15:00 +0000

Much has already been said about the suffering aviation industry. It seems that it is flooded with a whole new set of worries and issues to ponder about. Firstly I don’t think airlines in India are going to call it a truce, when it comes to ATF prices, which are soaring sky high. A recent presentation was made to the Union Cabinet in which Civil Aviation Minister; Praful Patel addressed issues facing the industry. He said that Indian airline companies are being charged way higher ATF prices than their global counterparts. A total of 40 percent to operating costs is just not acceptable.

To add to these woes, is the ever increasing sales tax, large scale layoffs, overcapacity and large debts which are major causes of concerns for Indian airline companies. Jet Airways Debt Equity ratio was 9.1 as recorded in March 2009, which is a steep rise over last year’s figures which were 4.57.

Grappled with high interest rates for payout of debts and stiff competition leading to price cuts, the picture for Indian aviation Industry is far from being rosy. The cumulative losses of airlines all around the world, this year mount to a whooping 9 billion dollars. Airlines in India have suffered a loss of around 10,000 crores, which is a major concern for the industry.

Praful Patel also brought up the point of infusion of capital into the state run airlines Air India, which has its own set of problems, including painful management issues and large debt due to new orders of air jets, which totals the outstanding debt to around 50,000 crores.

The recent strikes by Airlines did not do any good for the industry either, and just added to the inconvenience of the Indian passenger. There has been a slump in passengers too, who have undergone a change in their travel habits lately, much due to the recessionary effects. Some have migrated to the less expensive train travel, and business class passengers, who are the cornerstone of revenue contribution, are increasingly choosing cheaper air tickets.

The industry is also fighting hard to reduce taxes, which are as high as 29% in Mumbai and 33% in Delhi. Airline companies want ATF to be included in the declared goods category, which attracts a 4 percent uniform tax rate across states. One of the major concerns facing Indian Aviation today is the challenge to keep operational costs at a minimum. In their frenzy to reduce costs, the brunt has been on the workforce where more than 28,000 pilots, flight attendants, gate agents, sales representatives, and office workers have lost their jobs. Increasing number of airlines has made it a crowded market, however low cost airlines like IndiGo are looking to co-operate with the ministry to find out a mutual solution regarding the problems faced by the industry.

In spite of the gloomy picture, International Air Transport Association (IATA) has a vision to improve infrastructure and achieve global standards. In this regard the airports authority of India (AAI) are set to raise funds worth Rs. 5000 crores, by issuing infrastructure bonds. The AAI is currently involved in modernizing a large number of airports, with a focus on metro airports.

The picture is as bad in the global aviation scenario, with airlines like AMR Corp. and Continental Airlines in America showing losses, where Continental Airlines touched a loss figure of $ 18 million. One of the primary reasons for surmounting losses is the drastic cutback of flights taken by business executives, due to the recessionary environment. Most of the airline companies in the United States are relying on recapturing the high-paying customers, as premium business travellers form a large chunk of the revenue.

The lifeline for the aviation industry in the near future would be to control the escalated costs, and the return of premium customers which would add impetus to the industry and its future. Countries like United States are focussing on innovations to drive growth and profitability in the near future. With plans to deploy a new air traffic management technology NextGen, it aims to eliminate Radars and improve air traffic by controlling it from satellites instead of ground based technologies. This would largely reduce flight delays and concerns over flight safety.

With countries like China, looking to embrace this technology in the near future, the scenario for aviation technology looks bright. How far this percolates into revenue and sustainable profits in the long run would be something which needs some guessing into.

Exploring proactive and reactive market orientation strategies and their implications on businesses

noreply@blogger.com (Larry) — Wed, 21 Oct 2009 18:26:00 +0000

A company that takes too much time to respond to a change in the business environment is susceptible to a shortfall of profits. Sometimes it may result in loss of market share due to a competitor already in the process of implementing the strategy which was being planned by the company. It may also happen that the company may have to shut down or prune some of its business lines due to the inability to oversee changes in market behaviour or a breakthrough in technology leading to the current technology capabilities becoming obsolete.

Companies following stringent procedures, in terms of having a strong research capability, a strategic planning system in place, proper business intelligence tools to help make key decisions and employing specialists, for example marketing co-ordinators and analysts to predict changes in consumer patterns and the environment, have a competitive edge over their competitors.

A proactive company is the one who foresees these changes and has the action plans ready to face them. These companies are well prepared and have information from various sources, to counter any discrepancies in the business environment. A reactive company on the other hand responds after the event has taken place and has little preparation or anticipation of such changes.

However, no company can rely on being either completely proactive or reactive in its orientation. Ideally, a company must use both strategies to respond effectively with a minimum response rate. A reactive company uses market surveys and questionnaires to gauge customer insight and satisfaction levels.

Based on the recorded feedback and analysing consumer trends, the company works on improving their services and products and focuses on the key improvement areas highlighted by the consumers. For instance a Fortune 500 food company gathers continual customer and employee feedback from e-mails, submitted survey forms and other documents. This feedback is collected from thousands of disparate sources on a real time basis. This feedback is then analysed using sophisticated tools, and thereafter strategies and process improvements are designed based upon the observations.

This is an example of an effective reactive strategy used to improve customer satisfaction. It includes understanding and meeting customer’s expressed needs. In fact companies like Mindshare Technologies assist large corporations in implementing comprehensive feedback mechanisms by deploying Enterprise Feedback Management Solutions, which captures customer feedback from disparate sources on a real time basis and has powerful reporting tools for intelligent decision making and reporting.

Although this is very important and companies must use this strategy to gain insight and feedback on their products and services, sometimes companies tend to rely too much on this data and hence innovation takes a backseat. Most critics argue that reactive companies tend to lag behind when it comes to high speed innovation and satisfying the latent needs of consumers.

This is where companies following a proactive orientation have a distinct edge over their counterparts. They use extensive methodology like brainstorming, anticipating market trends, analyzing customer demand patterns, using sophisticated planning, and encouraging innovation at all levels in the organization. These firms are constantly finding new ways of providing customer delight by fulfilling the latent needs of consumers and hence creating a differentiating factor, which in turn harness the company’s brand image and improves customer equity.

Organizations like 3M, HP and Motorola have made it a practise to research and fulfil latent needs of consumers by adopting the ‘probe and learn’ philosophy and encouraging innovation at all levels within the company. Technology firms tend to be more inclined towards a proactive orientation, since there is a high scope for innovation and design of value added features and solutions. Consider industries like biotechnology, whose core focus is research and development and hence it is primarily proactive in nature. However due to the large influence of marketing in today’s business environment, a large number of biotechnology firms are using a market oriented approach and they do keep this in mind while moving forward.

A research was conducted to find out which approach was more effective in case of new product development. A sample of technologically diverse companies was taken, and the relationship of new product success with both proactive and reactive orientations was recorded. It was seen that to create and sustain new product success, only reactive market orientation was not sufficient and a proactive market orientation plays an important role in the success of a new product offering.

A company solely relying on customer responses is one step behind and carries a risk of losing both market share and brand equity from a competitor who provides value added latent features at competitive prices. The company following reactive orientation is taking a risk of solely relying on customer expectations and stated needs, which are not necessarily static and are always changing. It also provides little opportunity for consumers to experience ‘delight’ and hence loses out on customer loyalty and brand equity.

However every coin has two sides and so has both proactive and reactive orientations. There is another risk of customer acceptance of these latent features. Many times it may happen that a customer is not willing to pay the premium for these features or does not see it as a significant benefit or a differentiating factor. In this case the company may lose out on profits due to additional costs of rolling out the value additions and loss of customers. A strong research capability reduces this risk and increases the probability of market acceptance of these latent features.

It is important for companies to adopt both strategies and follow a total market orientation by strengthening both its proactive and reactive capabilities. Such companies are well prepared to face changes in the business environment, and are even pioneers and innovators, who eventually revolutionize the way people use a certain product or technology.

Cisco continues its inorganic growth strategy with its recent $2.9 billion acquisition of Starent

noreply@blogger.com (Larry) — Sat, 17 Oct 2009 12:39:00 +0000

Cisco systems, which is a well know brand in the networking and communications space, is on a major expansion spree with its recent acquisition of Starent Networks. The $2.9 billion deal aims to leverage Starent’s mobile infrastructure capability by enabling Cisco to provide a strong architecture for rich, quality multimedia experiences to mobile subscribers.

Starent has an extended expertise in delivering high quality content such as video, mobile TV and gaming to mobile subscribers. With the rapid explosion of content downloads from mobile phones, especially video transfer, mobile data traffic has seen an exponential growth in recent times. A recent forecast conducted by Cisco, the Visual Networking Index (VNI) forecasts mobile data traffic to reach one Exabyte or one billion gigabytes per month.

Cisco went further to research the changing behaviour of mobile consumers, with an ever increasing trend to access high speed multimedia services on their phones ranging from IPTV, to videoconferencing, to Video-on-demand. In order to gain a stronghold on this huge growth potential Cisco is building its technology capabilities to serve this demand, and the recent acquisition of Tandberg, was a definite step in this regard.

Tandberg, which is a leader in video communications, would enable Cisco to expand its collaborations portfolio, and would bring it a step closer on revolutionizing communication, and the way people interact and share knowledge. In fact Fredrick Halvorsen, the CEO of Tandberg said that there was indeed a fit between the two companies, not only in terms of their solution offerings but also a people and culture fit. Adding to that he also said that the companies share a common vision, of transforming the way people communicate, and the acquisition would lead to faster decision making and innovations in this regard.

The recent acquisitions of Starent and Tandberg make Cisco’s strategies very clear, and it also hints the company would soon diversify as a Smartphone provider. Current Smart phones are limited in terms of their multimedia interaction and still have some way to go, when it comes to two way wireless interaction. Cisco aims at leveraging its IP infrastructure capabilities, with that of its recently acquired companies to be a provider that would enable fast, streaming video and multimedia interactions through a wide range of access points.

However mobile phone providers like Apple, RIMM and Nokia would provide stiff competition. It is a crowded market and Cisco is yet to establish itself as a strong brand in the consumer electronics market. It is no wonder therefore, that Cisco is focusing on its brand building campaigns through extensive advertising to create a higher level of brand awareness in this space.

How far this strategy of concentric diversification and rapid inorganic expansion is profitable to the company in the long run is still to be seen. However, in this stiff competitive market, the resulting winner will be the consumer, who would benefit from a revolutionized means of communication in the near future.

How to design an effective Strategic Planning System

noreply@blogger.com (Larry) — Tue, 13 Oct 2009 12:13:00 +0000

Any planning process has two key objectives. One is to understand the long term objectives of the organisation, and the other is to devise an organized action plan to meet these objectives. Any company that uses a formal planning process has a better chance of achieving higher profits and growth. It also helps the company to set objectives and monitor results.

Though planning is an essential part of a firm's strategy, most firms find it difficult to implement the plan successfully. This may be due to the largely complex process of planning and not adhering to certain generic guidelines, which are quintessential to the success of any planning system. Some of the basic guidelines suggested by the Boston Consulting Group are that planning is a collaborative effort and not merely the tool for a Vice President or a Line Manager. The key to a successful planning system is to be simple, achievable in terms of its goals and flexible to accommodate changes in the environment.

Difference between a Strategic and Tactical Plan

A strategic plan is different from a tactical plan or an operational plan. Most companies are so focused on their business plan to achieve their revenue targets that they tend to ignore the significance of strategic planning. A strategic plan should never be confused with a business plan or even an operational plan. A business plan would give the company a fair idea on the company's product features, marketing tactics, promotion, pricing, sales channels and other parameters which would help the company to assess its short term performance goals and profits.

A strategic plan is a tool devised to achieve long term objectives. The implementation of this plan would determine the long term direction of a business. Such decisions are strategic in nature and transform the entire business operation. For a company to chart out an effective strategic plan, it must focus on three distinct aspects.

1. Managing a company's business as an investment portfolio.

2. Assessing each business's strength by comparing the market potential with its relative market position.

3. Devise a strategy for each business, keeping the long term objectives in mind.

For example, a large conglomerate like Philips, which is a part of the elite Forbes list of best managed big companies in America, communicated a "Vision 2010" Strategic Plan. This plan charts out a strategy for the company to foray into the areas of Healthcare, Lighting and Consumer Lifestyle. This plan aims to position Philips as a market-driven and people centric company. The plan was in line with the vision of the company, and in congruence with its long term objectives.

Be it a large conglomerate like Philips or even a small company; charting out a strategic plan is extremely essential for not just growth, but also for survival in the long run. Strategic planning is hence crucial and would change the entire course of business. Strategic planning not only ensures growth of the organization, but also safeguards it in tough times like that of a global recession. It is a tool which needs to be used very carefully and with utmost precision.

http://ezinearticles.com/?How-to-Design-an-Effective-Strategic-Planning-System&id=3081820

Article Source: http://EzineArticles.com/?expert=Lawrence_Gilbert

Strategies to delight and retain the changing Retail Consumer

noreply@blogger.com (Larry) — Thu, 08 Oct 2009 18:54:00 +0000

Retailing has undergone a huge transformation over the years. From Baby boomers to Gen X to Gen Y buyers, everyone has seen a change in buying behaviour, and the mass appeals, tastes and choices of these buyers are evolving every second, thanks to the global culture transformation.

What seems to work as a store format, a couple of years ago have seen paradigm shifts in terms of competition as newer non-store formats are constantly probing the retail consumer. Even according to Kotler’s Black Box Model, the environmental stimuli keeps influencing the buyer to probe into different products and look for different, unexpected value additions which would not only satisfy, but also delight the retail buyer and provide him with an experience.

So what does the retail consumer do? He is suddenly bombarded with so many choices. A person wanting to shop, to enjoy the entire shopping experience would demand a little extra from the mall or store he shops from. On the other hand the consumer, who wants maximum value at least possible prices, would prefer a wider assortment of goods and a wide plethora of choices to suit his everyday needs.

A retail consumer may even want to sit back and relax at home and do all the shopping for the months groceries. A working professional does not have the time to buy a digital camera, so he orders it through the internet.

Research shows that a retail consumer is willing to pay twenty five dollars extra, if he is extremely satisfied with the shopping experience. Hence retailing giants strive hard to give that extra delight to consumers by providing innovative yet delightful experiences to the consumers. For example, according to a research conducted by Calif-based regional mall REIT Macerich, to identify what attracts more consumers, the study showed that fountains can play an important role in increasing sales.

Fountains create an atmosphere which is attractive and invites more consumers to enjoy the entire experience of shopping. There is also a huge fountain outside Las Vegas Bellagio casino which is synchronized with musical tunes and attracts hundreds of shopper’s every day.

Most retailers now understand this, and are striving hard to create a complete ‘Shopping Destination’ by adding innovative features like these to create a differentiating factor among other retailers.

Additional tips to budding retailers as well as established retailing giants:

Consumer delight is everything. Focus on consumer by providing him with value products at a convenient and well designed retail store.
Mass customization is the way of the future. Organizations like Dell, Levis Strauss have showed an example of how effective it is to provide customized offerings to its consumers.
Focus on differentiating with other competitors by providing a complete shopping experience.
Use innovative techniques and store formats like pop-up retail, to target consumers who lead hectic lives and need an outlet for high-speed retail

Retailing has been largely dominated by category killers like Wal-Mart, Home-Depot, Starbucks, however with changing consumer buying trends and using innovative retailing practices, small independent retailers can still survive in the marketplace, by differentiating their offerings and providing a unique experience to consumers.

http://ezinearticles.com/?Strategies-to-Delight-and-Retain-the-Changing-Retail-Consumer&id=3057612

Article Source: http://EzineArticles.com/?expert=Lawrence_Gilbert

Bharti AXA plans on expanding its wings in the fast growing life insurance market

noreply@blogger.com (Larry) — Sun, 04 Oct 2009 11:41:00 +0000

Bharti AXA plans on expanding its wings in the fast growing life insurance market. It has forecasted a 5 percent market share holding by the end of 2012. One of the primary reasons for this aggressive expansion strategy of the company is the huge potential and largely untapped insurance market.

India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new player’s significantly enhancing product awareness and promoting consumer education and information.

Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by 2010-11. The current market is worth 50,000 crores. Bharti AXA Life insurance, which is a joint venture company between India's leading conglomerate, the Bharti Group and France-based financial protection and wealth management service provider-AXA, has currently a modest share of 1 percent in the market.

Bharti-Axa’s key strategy is to leverage on the wide reach of Bharti Operations by aligning with Bharti Airtel distribution points, corporate agents and brokers.Bharti Axa has set-up virtual branches to distribute policies using the retail and telecom outlets of the Bharti Group. Bharti-Axa envisions virtual branches as a key strategy and has currently 25 percent revenues from the same.

Chief actuary at Bharti AXA GLN Sarma says. “Capital constraints have prevented us from being overly aggressive. We would like to retain what we have and consolidate our position.” The company is also not planning any big advertising campaigns and instead, has chosen to communicate with customers through phone calls, text messages and emails. Sarma agrees that product distribution and building channels has been a problem for Bharti AXA because the company does not have a parent bank to fall back on. “Also, many banks have turned into insurance product manufacturers from mere insurance distributors. This makes them our competitors ruling out the possibility of a distribution deal with them,” he says.

However, despite the capital constraints, Bharti-Axa is all set to infuse another 100 Crore in the fourth quarter. Apart from this, the company is on an aggressive hiring spree with its plans to beef up the sales force to 45,000 from the present 30,000.

The current product portfolio of Bharti-Axa is that of eight life insurance products. This includes six ULIP products. The company’s CFO, V Srinivasan, commented that Bharti-Axa’s key strategy would be to focus strongly on ULIP products.

Porsche rolls out new Panamera

noreply@blogger.com (Larry) — Fri, 02 Oct 2009 14:54:00 +0000

The German car manufacturer is keen on the Indian market with its new product launch, the Panamera sedan. A luxury four door super sedan, Porsche Panamera is all set to be launched on October 6.

It is said to have the sporting agility of 911 and the space of Cayenne. While its production was started early 2005, it would be launched globally in 2009.The Porsche Panamera would be at a price range of Rs 2 crore in India, owing to high import duties.

With a strategy to launch three variants in the Indian market, Porsche is optimistic of its sales figure of the new Panamera with a forecast of 50 Panameras in Fiscal 2009. Porsche’s sole importer has already received thirteen bookings for the car.

The Indian sports and luxury car segment seems to be the eye of many competitors with increasing number of players entering the market. For long Mercedes-Benz, BMW and Audi dominated this space.

Players like Lexus, Porsche, Jaguar and even high end sports car manufacturers like Ferrari, Lamborghini, Bugatti plan to sell exported cars in India. Because of the still nascent stage of sales in the segment, these auto giants are apprehensive of setting up assembly lines as yet, but with ever increasing competition and increasing demand of luxury cars, that seems to be a reality in the near future for these companies.

Exploring the new age of Micromarketing

noreply@blogger.com (Larry) — Wed, 30 Sep 2009 18:49:00 +0000

Traditional mass marketers, expend huge advertising budgets to reach out to a large audience. The main argument in favour of the widely used methodology of mass marketing is that it attracts maximum potential consumers and has a wider reach.

However these marketers are increasingly finding themselves with cost overruns and diminishing profit margins. This can be accounted to the gradual change in buying patterns and the changing consumer buying behaviour. With the increasing proliferation of advertising and distribution, advertisers are caught up in an intense competitive scenario, where the costs are huge and the hit ratio is less.

This can be attributed to the fact that consumers buying patterns are changing and this has led to creation of various microsegments within a particular customer segment. For example, consider a market segment for compact sedans. A compact sedan may be targeted to various segments like young married couples or the unmarried buyer with high median income.

The preferences of consumers within the particular segments vary, and hence automobile companies launch a wide range of variants at different price bands to satisfy a wide range of consumer needs within the same microsegment.

Maruti Suzuki’s portfolio consists of thirteen car models with at least forty variants, to cater to different needs of consumers. The base model of the vehicle may not have air conditioning or power steering, but for the models that have these features, the buyer has to pay higher prices.

The key for marketers is to identify the microsegments that are willing to pay the premium for additional features and roll out newer variants to satisfy the needs of diverse consumer segments.

The trend shows that consumer satisfaction is passé.Consumers want to be shocked, surprised and jolted out of the boredom of the routine product offerings. Consumer delight is the way of the future. This is why companies like P&G, McDonalds, and LG have used micromarketing techniques to satisfy a wide range of customer expectations.

For example, P&G created a separate budget for introducing a product variant which was called Pantene Relaxed and Natural to cater to the needs of Black Women in the United States. The customer now knows that he is the king. Given the newly evolved demanding consumer, huge competition, shrinking marketing budgets, the challenge for today’s marketer is to get closer to the consumer by micro-segmenting and micro-positioning his offerings.

Click here to download resources on how to create winning marketing strategies for any business.

Banks recognize that a targeted database marketing may be the best approach in reaching out to small businesses. Through the application of small-business customer databases in identifying small-business customers, and determining their product use and profile, banks can effectively conduct market targeting initiatives. Target marketing provides banks with such long-term benefits as reduced new-business acquisition costs, higher customer retention rate, and increased customer satisfaction. The successful target marketing efforts of First Tennessee Bank, KeyBanks and Pittsburgh National Bank are testaments to the potentials of this technique in developing relationships with small businesses.

Check out the e-book below to explore in depth analysis and research on micromarketing in the banking sector.

http://ezinearticles.com/?Exploring-the-New-Age-of-Micromarketing&id=3012606

Article Source: http://EzineArticles.com/?expert=Lawrence_Gilbert

How does Dell's $3.9 billion acquisition of Perot Systems affect the IT industry

noreply@blogger.com (Larry) — Tue, 29 Sep 2009 12:29:00 +0000

Dell’s $3.9 billion acquisition of Perot Systems gives the company a better foothold in the IT services market. Dell had been talking about diversifying away from its core PC and server businesses for months, but the Perot purchase is the first move that illustrates the company is serious about its transformation.

CEO Michael Dell said on a conference call the Perot purchase is a platform that the company can use to acquire more companies. Dell specifically said it will look for more deals similar to the EqualLogic purchase. Dell also said that Dell and Perot would be able to grow faster combined. “We will leverage Perot’s services capability across Dell’s customer base,” said Dell. “This acquisition makes great sense.”

Perot is one of the largest IT services providers to hospitals and physicians. President Obama has made healthcare IT a big focus to slow the rate of increasing costs.

Ross Perot Jr., Chairman of the Board, Perot Systems says; “This transaction represents a great opportunity for our company and our associates. Today’s announcement is the next step in formalizing a relationship that has flourished for some time. When my father founded Perot Systems he envisioned a global information-technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems’ expertise to more customers than ever.”

The acquisition “definitely makes a statement,” says Gartner analyst Dane Anderson, and gives Dell new expertise in the healthcare and government markets. But the merger is not a guarantee of success. “Whether they suddenly become the next big competitor to IBM, Accenture, or HP EDS, that remains to be seen,” he says. Size-wise, Dell’s services organization still pales in comparison to some competitors. HP, having purchased EDS, does $40 billion in services revenue, Anderson says. IBM is even bigger with $57 billion in services revenue.

Using Radical Marketing to stay ahead of competition

noreply@blogger.com (Larry) — Tue, 29 Sep 2009 07:26:00 +0000

Organisations have evolved around the years by using the traditional marketing mix and sticking with conventional marketing ideologies to thrive in the market. A lot of companies however find themselves in a closed loop when there is no consistency in growth and sales tend to become stagnant. This is the time when a firm needs to employ the concept of radical marketing to turn around its fortunes and firmly establish itself in the hearts and minds of customers. This is done, in such a way that the customers not only love the company, but also become missionaries for the company and its offerings.

So what exactly is radical marketing? To put it in simple terms it is just to do marketing beyond the conventional way. It goes deeper than just being crazy or revolutionary in approach, but to have a passion and love for the company’s brand, product and its consumers.

In radical marketing the CEO becomes much closer to the marketing action and in fact owns the marketing department. The CEO and top management drive marketing approach; hence everyone in the organization focuses on its interaction with the market and become more accountable to the company’s marketing practices.

The crux of radical marketing is to understand the pulse of the customer by getting out of the office and get face –to- face with the people that matter the most, the customers. Snap-on Tools, a leading designer and manufacturer of tools, used radical marketing and became a two billion dollar organisation by selling tools door-to-door to its core customer base of over one million auto mechanics. Among other organisations that adopted radical marketing are Harley Davidson, Virgin Atlantic Airways and Boston Beer, who focussed on stretching limited resources, staying in close contact with customers, and creating more satisfying solutions to meet customer needs.

Radical marketers can also be termed as missionaries, who strongly believe in the product and the customer base as strongly as the CEO. They go beyond age old conventions and follow innovations in terms of their product, advertising and brand building strategies. A radical marketer is obsessed with brand integrity and is fixated on quality.

Radical marketers tend to have smaller marketing budgets, which makes them learn to be creative with a small amount of resources. Most of these marketers tend to rethink the marketing mix, by using more targeted campaigns to reach their customers. Since radical marketers are focused on one-to-one customer interaction, they spend little on their advertising budgets. However they tend to use advertising in short, sharp bursts what is called as “surgical strike advertising”. Radical marketers tend to rely more on tools such as direct mail, local advertising, and sponsoring local events and so on.

Radical marketing is not just apt for large companies, but also smaller companies are equally benefited by being innovative and thinking out-of-the-box.

There are various instances where new entrepreneurs have adopted innovative marketing practices and boosted sales and brand equity with considerably low resources.

One such Radical Marketer is Joy Gendusa, the Founder and CEO of PostcardMania, the fastest growing direct mail postcard marketing firm, recognized by Inc Magazine. She began PostcardMania in 1998 with no capital injections of any kind, using her marketing acumen and direct mail postcards to expand her corporation year after year.

http://ezinearticles.com/?Adopt-Radical-Marketing-to-Stay-Ahead-of-Competition-in-Turbulent-Times&id=2986009

Article Source : http://EzineArticles.com/?expert=Lawrence_Gilbert

Check out the book on Radical Marketing: From Harvard to Harley, Lessons from Ten That Broke the Rules and Made It Big