IMERT Pune - MBA

200 million mobile subscribers

2007-12-04T19:41:00.001-08:00

India has met the 200 million (20 crore) mobile subscribers target four months ahead of schedule and 15 months after crossing the 100 million mark in May 2006.

8.31 million wireless subscribers were added in August 2007, taking the total wireless subscribers (GSM, CDMA, WLL-F) base to 201.29 million.

Total telephone subscribers = 241.02 million
Wireless subscriber base = 201.29 million
Wireline subscriber base = 39.73 million
Teledensity = 21.20%

Top operators

Bharti Airtel = 2.05 million new users, 46.8 million total
Reliance Communications = 34.82 million users total
Vodafone Essar = 1.67 million new users, 34.11 million total
BSNL = 33.45 million users total
Tata Tele = 18.90 million users total
Idea = 17.87 million users total

Graphical Representation

Human ReTails - What do Industry Owners Think?

2007-08-23T20:00:00.000-07:00

Organised retail in India needs a quick-grow tonic it still accounts for just 6 per cent of the entire retail sector. We asked industry veterans for simple, single-dose prescriptions that can reinvigorate the sector.

B S Nagesh
Managing Director,
Shoppers Stop

Women in retail will be the key differentiator in the future. More and more women will be able to get flexi-job options in the retail sector, not only at the front end but even in jobs at the back office.

If the sector is able to attract many more women, it will also get stability as attrition among women is lower than among men.

They are also found to be more caring and show better empathy to customers and are, therefore, very well suited to the retail industry.

Kishore Biyani
Managing Director,
Pantaloon Retail and CEO, Future Group

Retailers must reach out to tier-II towns. They must also address the second layer of Indian consumers with newer and innovative formats; the existing formats largely address the affluent classes.

Making finance available more easily at retail outlets, on easy terms, will also encourage consumption.

The industry will also benefit by encouraging part-time employment for women, who otherwise have become �housebound� for different reasons. Lastly, a strong focus on delivering better value at all times is required.

R Subramanian
Managing Director,
Subhiksha Trading Services

Prove to the customer that you are offering more and better value. If customers get at your store what they can�t get from a platform on Linking Road � whether in terms of quality, choice or price � that is value delivered.

It will attract people and boost organised retail. Increase in consumption is already taking place but habits have not yet changed. We need to get consumers to change their shopping habits.

Supermarkets and hypermarkets need to differentiate themselves by offering wider choice and good quality products at lower prices. Until this difference is clearly visible, consumers will not switch.

Andrew Levermore
CEO, Hypercity

From the consumer perspective, we are seeing a growing awareness of hygiene as a factor in their choice of shopping destination. There is far less tolerance, particularly amongst the higher spending consuming class, for dirty stores.

When it comes to food and grocery retailing, the health and safety of customers is too often taken for granted by retailers in India. For instance, it is very rare to find simple hygiene standards such as hair nets being worn by employees working with fresh food.

The preparation of perishable foodstuffs in refrigerated cold rooms is almost unheard of. Retailers placing products with clearly printed �keep refrigerated� instructions on a dry shelf is common. Elsewhere on sales floors it is common to find dirt and grime build-up under fixtures and fittings.

All of this is a potential hazard to the health of the consumer. Focus on hygiene would truly make an important difference to customers. From the retailer�s perspective we will learn that our consumer will not believe that poor hygiene denotes low prices for much longer.

Gibson Vedamani
CEO, Retailers
Association of India

Free access and visual merchandising to customers is the most significant change that I believe will jumpstart retail. Retailers must not stock products: they must display them such that they appeal to consumers.

Todays consumers dont walk into the stores with lists and budgets. Research has shown that about 30-40 per cent of the products they buy are of no immediate need to them: they are either deferred needs or impulse buys.

Hence if products are presented well, consumers will buy them. Also, strong visual displays and themes will make the store more interesting and encourage consumers to linger. Good signage that directs consumers to the right racks is also critical.

Arvind Singhal
Chairman, Technopak Advisors

Lower prices for good quality and branded products is the sureshot way to boost retail. The world over, retail outlets sell their products below MRP. In the UK, thanks to organised retailing you can get eight pairs of branded socks for �2 and a pair of jeans for �3. But this has not happened in India.

Stores still sell at the MRP or on meagre discounts. Selling quality products at lower prices will boost sales: the telecom industry is proof that this strategy works. Low prices will drive larger volumes and retailers will make more money than they are at present.

Neeraj Chandra
Vice president, sales, marketing and innovation,
Britannia Industries

Finding more uses for existing channels will help drive sales. By understanding the channels better, manufactures can customise their products. For instance, a small-scale manufacturer of garments may find it difficult to enter large-format retail stores, but many malls have smaller shop-in-shop counters and the manufacturer can probably fit in there.

Further, understanding customer behaviour and reacting to it will help boost sales, like themes and activities around festivals help boost sales. Similarly, most working mothers seek tiffin-box snacks for their children; a section or aisle that caters to this segment will attract customers.

Also, streamlining the logistics and supply chain systems will help save sales that are at present lost due to unavailability, wastage and so on. This will benefit both the retailer and the manufacturer.

Anupam Bansal
Director, Liberty Shoes

Indian retail stores must start following fashions trends. Globally, this is a common phenomenon: in a particular month, for instance, all stores sell pink or red or corduroy or stripes, making that the fashion statement or must-have for the month.

All brands and retail outlets come together to push a trend. This makes consumers change or buy products often to remain in fashion. In contrast, brands and shops in India follow their own trends and are, hence, not as compelling or tempting.

Sanjiv Kakkar
Executive Director, sales and customer development,
Hindustan Unilever

Converting footfalls into high value purchases in order to maximise bill value will be dependent on the retailer and manufacturer�s ability to drive offtake through relevant point of sale activation and pricing.

In addition, these have to be complemented by basic hygiene factors that enable a great shopping experience, including ease of access in terms of location and infrastructure facilities such as parking. Store ambience, ease of navigation and availability of brands and range, are key to ensure offtake.

The most crucial factor for the growth of retail in India is their ability to generate footfalls and convert these footfalls into high-value purchases. This will be dependent on how well they drive consumers into buying bulk consumption categories such as basic staples, vegetables, fruits, oils and tea through retail.

Pinaki Mishra
Partner, retail, Ernst & Young

The large chunk of customers in the lower middle class has been completely ignored by organised and large-format retailers. A concentrated effort to tap this segment will surely help boost consumption.

Companies can look at small initiatives like distributing pamphlets or offering a bus service to attract these consumers. Sales traffic during weekdays, especially in the morning and afternoon, is known to be low.

Retailers can look to drive in traffic from the lower middle class by, say, picking up customers from Dharavi in a bus, and dropping them back after their shopping.

[Courtesy - Business Standard]

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Corporate Study Team,
IMERT, Pune

How to build and lead teams

2007-08-23T19:45:00.001-07:00

WHAT THEY DON`T TEACH YOU AT B-SCHOOL

A B-school endeav-ours to simulate the business environment and make you "better" prepared to handle practical business situations.

It tries to mimic practical business scenarios to enhance the understanding of how best these could be dealt with in a day-to-day working environment. However, like most simulations, this, too, falls short of reality!

Business school education churns out a jargon-spewing graduate who is goal-oriented, with excellent information gathering and analytical skills, and a good general awareness of various areas of business management. Where it fails to provide adequate inputs is in the areas of people management, building and managing teams and leadership.

Just consider these examples:

A course in organisational behaviour teaches you about the typical behaviour of people, different leadership styles and so on, but it can't teach you which leadership style would suit you the best. All B-school graduates have to find their individual leadership style the hard way.

A class in negotiation skills will make you aware of the nuances and tactics of negotiation, but it can't make you a skilled negotiator. It is only when you start applying these learnings in practical scenarios that you evolve as a better negotiator.

A class in sales management may teach you the various techniques in selling, sales forecasting, budgeting and so on. Getting an "A" grade in sales management will not ensure that you are the best sales manager. It is the day-to-day fire fighting, motivating the team, handling tough customers and the ability to handle the high pressure of achieving targets month on month that will get the best out of you.

Also, while the case study method followed in B-schools is a great way to teach about real-life business situations, it has one lacuna — it is written "post the event", and thus suffers from all the biases that are a result of the capacity of the human mind to rationalise and justify the actions taken.

A typical case study also gives huge amounts of data and lulls you into believing that business decisions are taken with deep analysis. In reality, that is not the case; more often than not, the everyday business realities unfold gradually and business decisions are taken in "foggy" conditions.

In sum, a B-school no doubt enhances your knowledge level and the ability to think and solve problems, but it is only on-the-job experience that transforms a management school graduate into a business manager.

[Courtesy - Sanjiv Kathuria graduated from IIM, Bangalore, in 1991

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Corporate Study Team,
IMERT, Pune]

How to crack telephonic interviews

2007-03-07T15:08:00.001-08:00

Most BPO companies have also begun saving time and effort by conducting initial rounds of interviews by telephone before calling candidates for a personal round to their offices. BPOs use telephonic rounds to assess candidates for the roles of customer service or outbound sales executives.

Going by the job advertisements, you may typically have to call a number provided exclusively for interviews. Given this, then, your voice and the way you project yourself over the phone can make all the difference.

The flip side

The absence of a visual clue is the biggest disadvantage. While the interviewer can't see your new formal attire, your great smile and positive body language, you, on the other hand, also tell when you've lost the interviewer's attention.

Prepare for an excellent show
Start by visiting the employers' Web site and learn about the firm. Most companies upload the job specifications in the 'Career' or 'Work With Us' sections of their site. This will give you a fair idea about the key skills required for a certain role.

Make notes
Keep some notes ready about the job description, your key strengths and accomplishments. It is a good idea to keep your resume in front of you as well. Remember, they can't see if you have these documents for review.

Mock calls
Call a friend from your landline and ask him or her to listen to your voice. Maybe it is shrill; maybe you speak too softly or too fast to be understood. If possible, call someone you know who already works for a BPO and request him or her to critique your voice.

When you make that call
First, get to the point, and fast. The employers are already expecting calls from candidates, so don't waste time giving them a reference of where you saw their advertisement or asking them if there are any openings. Greet them, state your name and get to the point. For instance: 'Good morning. My name is Rashmi Chopra and I am calling from (location). I am a commerce graduate and would like to interview for the position of tele-sales executive.'

Keep notepad and pen ready
Write down their questions so you can stay on track while answering. Too often, people forget the original question and beat around the bush. Stay on target.
Sound energetic

Your voice is your only sales tool. Do not allow yourself to sound tired or uninterested over the phone. Sound energetic and excited, even if you are asked the same question again. Keep a glass of water ready.

Keep distractions away
Log off your computer (if you can't get away from instant messengers and other services that make a noise). Switch off your cell phone and stereo system, and ensure there no cell phones nearby that may cause disturbance. They sabotage your concentration when you need it most.

Call from a landline
Cell phones and cordless devices rarely allow your voice to sound as clear as it does on a standard landline, so avoid using them for interviews.

Be courteous
Try not to speak over the interviewer or cut him off. If you do, say, "I apologise for interrupting, please complete your question" and let the interviewer continue.

When you are through
Thank the interviewer for his or her time and state that you look forward to hearing from the firm. If they call you for a personal round, ask about the documents you should carry with you. Do not disconnect the call until the interviewer has hung up.

Prepare for that telephonic interview, and you are halfway there.

[Courtesy - sunder's blog]

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Corporate Study Team,
IMERT, Pune

Tata-Corus: India's New Steel Giant

2007-02-20T18:32:00.000-08:00

Executive Summary:

By acquiring Anglo-Dutch steel firm Corus, India's Tata Steel is now one of the world's top five steel makers. Professor Tarun Khanna says the fact that the deal is the largest out of India and generated by the private sector makes this a notable event. But now comes the hard part—making the merger work. Can Tata avoid mistakes made by Chinese companies? From The Economic Times/India Times. Key concepts include:

Tata's acquisition of Corus is notable not only for creating a new steel giant, but also because this deal was a private sector venture far from Indian government influence.
Tata should be able to make the merger work by virtue of its position of financial strength as well as previous cross-border experiences. The West should not underestimate this heretofore relatively unknown competitor.

The Tata Group is celebrating its acquisition of the Anglo-Dutch steel firm Corus, and the catapulting of Tata Steel into world steel's big-five status (by revenue). It should. The $11 billion deal is a marker in the ground. Not that it is the biggest deal ever from an emerging market.

Recent deals, even attempts, have been bigger. For example, Brazilian firm Companhia Vale do Rio Doce successfully acquired most of Canadian nickel company Inco Limited for $19 billion last year, and Chinese petro giant CNOOC tried, but failed, to pull off an $18 billion acquisition of Unocal in the U.S.

But Tata-Corus is the largest out of India, and is done by a private sector entity of its own volition, away from the shadow of state influence. For these reasons, it bears noticing.

The same euphoria surrounded Shenzhen-based TCL Multimedia when it acquired the French company Thomson's TV assets to become the biggest TV manufacturer in the world (by volume, even if not by revenue) in 2004, just twelve years after TCL entered the TV business in mainland China.

"Tata Steel is … acquiring from a position of strength amidst a boom in the world steel market."

In that case, as in Tata-Corus, the rationale was to supplement the customer-facing front-end in the developed markets, with a lower-cost back-end in an emerging market. That is, TCL was trying to buy a sales and marketing structure and a set of brands. Much like Tata is with Corus. But that story had a sorry ending.

TCL chairman Li Dongsheng was awarded a French accolade, Officer de La Legion D'Honneur, the highest honor France had yet bestowed upon a Chinese entrepreneur, but his shareholders don't have much to show for the deal.

TCL had to write off much of its investment. The CNOOC-Unocal deal, in the different setting of the oil industry, also had a sorry ending. So, it is perhaps worth reflecting why Tata-Corus might be different. I believe it will be. Here's why.

First, CNOOC's bid collapsed amid Washington intrigue. The Chinese proved to be babes-in-the-wood in navigating the Byzantine corridors of Washington's power, and underestimated a relentless backlash that unwound the deal. While politics and steel are not alien to each other, there is nothing in Tata-Corus like the level of political concern in the CNOOC-Unocal situation.

Second, TCL acquired Thomson's assets from a position of weakness. Margins at TCL were under pressure from cut-throat competition in mainland China. Even though TCL was one of the largest Chinese TV manufacturers (even prior to the acquisition of Thomson's assets), commodity TVs and other consumer electronics items were not producing good returns.

In contrast, Tata Steel is one of the most profitable, if not the most profitable, steel companies in the world, and is acquiring from a position of strength amid a boom in the world steel market. This will buy it valuable experimenting time and learning space.

Third, there was much difficulty in integrating Chinese and French management. Some of this surely stemmed from language considerations. To an extent, the Indians' greater command of the world's lingua franca will lubricate the inevitably-difficult integration process.

Fourth, the Tatas have built up some experience in the past few years with cross-border acquisitions. Some of this lies within Tata Steel itself, as in its acquisition in Singapore. And the rest lies in the broader ambit of the Tata group through its acquisitions of Daewoo's truck assets in South Korea, Tetley Tea in the U.K. and ritzy hotel properties on the U.S. East Coast.

TCL had some experience taking over factories in Vietnam and environs, and also a failed bid for a much smaller German company, but nothing to prepare it for the Thomson assets' integration.

Fifth, there is learning in the ambience. That is, India Inc. has built up, and is building up, its own cross-border acquisition capability. This arises not just from entrepreneurs who have been doing this for years like the Birlas and Asian Paints but also from more recent moves by India's pharmaceuticals, software, and auto component sectors, among others.

Cross-border experiences with integrating diverse management teams, communicating across borders and time zones, and integrating compensation practices, are not as new to the Tata group as they might well have been to the hapless TCL management team.

And finally, my feeling is that the Indians are still underestimated in the West, at least relative to the Chinese. This complacency might well prove to be the biggest weapon available to the new big-five kid on the block from Jamshedpur.

-

Tarun Khanna is the Jorge Paulo Lemann Professor of Business Administration at Harvard Business School.

[Courtesy - http://hbswk.hbs.edu]

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Corporate Study Team,
IMERT, Pune

Corporations plying the Monopoly game!

2007-02-11T19:16:00.001-08:00

Yes, 2007 beginning itself has witnessed a number of Mergers & Acquisitions that it would not be wrong to say that Corporations are now seen as products by the big corporations! Also the speed at which the ownership of these huge corporations change hands, FMCG or rather Fast Changing Corporate Governance 'FCCG' has become the buzz word!

This time we have Vodaphone buying 67% in Hutchison Essar at an enterprise value of $19.3 billion (Rs 86,000 crore). Where once company paves its way into the Indian Markets on one hand, we also have Hindalco an Aditya Birla Group undertaking on the other, that acquired Atlanta- based flat aluminium products major Novelis.

The global markets follow the Jungle rule, Survival of the fittest!

The Scenario today is quite like the monopoly game. One who acquires the most, gets the most in the long run. In years to come, I think we will have only 4-5 Big corporations with major market share that will make the world go round.

Here is where you can read more on Vodaphone and Hindalco Acquisitions.

Vodaphone Story -
http://economictimes.indiatimes.com/Vodafone_connects_buys_Hutch_for_19b/articleshow/1593577.cms

Hindalco Story -
http://www.financialexpress.com/fe_full_story.php?content_id=154537

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Varun Nagpal,
Corporate Study Team,
IMERT, Pune

Scientists Claims They Can Read The Secret Intentions In The Brain

2007-02-10T22:21:00.000-08:00

How and where the brain stores these intentions has been revealed by John-Dylan Haynes from the Max Planck Institute for Human Cognitive and Brain Sciences, in cooperation with researchers from London and Tokyo. For the first time they were able to "read" participants intentions out of their brain activity. This was made possible by a new combination of functional magnetic resonance imaging and sophisticated computer algorithms (Current Biology, 20th February 2007, online: 8th February).

Our secret intentions remain concealed until we put them into action -so we believe. Now researchers have been able to decode these secret intentions from patterns of their brain activity. They let subjects freely and covertly choose between two possible tasks - to either add or subtract two numbers. They were then asked to hold in mind their intention for a while until the relevant numbers were presented on a screen. The researchers were able to recognize the subjects intentions with 70% accuracy based alone on their brain activity - even before the participants had seen the numbers and had started to perform the calculation.

Participants made their choice covertly and initially did not know the two numbers they were supposed to add or subtract. Only a few seconds later the numbers appeared on a screen and the participants could perform the calculation. This ensured that the intention itself was being read out, rather than brain activity related to performing the calculation or pressing the buttons to indicate the response. "It has been previously assumed that freely selected plans might be stored in the middle regions of the prefrontal cortex, whereas plans following external instructions could be stored on the surface of the brain. We were able to confirm this theory in our experiments", Haynes explained.

The work of Haynes and his colleagues goes far beyond simply confirming previous theories. It has never before been possible to read out of brain activity how a person has decided to act in the future. The trick by which the invisible is made visible lies in a new method called "multivariate pattern recognition". A computer is programmed to recognize characteristic activation patterns in the brain that typically occur in association with specific thoughts. Once this computer has been "trained" it can be used to predict the decisions of subjects from their brain activity alone. An important technical innovation also lies in combining information across extended regions of the brain to strongly increase sensitivity.

The study also reveals fundamental principles about the way the brain stores intentions. "The experiments show that intentions are not encoded in single neurons but in a whole spatial pattern of brain activity", says Haynes. They furthermore reveal that different regions of the prefrontal cortex perform different operations. Regions towards the front of the brain store the intention until it is executed, whereas regions further back take over when subjects become active and start doing the calculation. "Intentions for future actions that are encoded in one part of the brain need to be copied to a different region to be executed", says Haynes.

These findings also raise hope for improvement of clinical and technical applications. Already today the first steps are being made in easing the lives of paralyzed patients with computer-assisted prosthetic devices and so-called brain computer interfaces. These devices focus on reading out the movement the patient intends to - but is unable to - perform. Previous research has shown that patients can move artificial limbs or computer cursors purely by the power of their mind. The current research by Haynes and colleagues now opens up a completely new perspective.

[Courtesy – www.playfuls.com ]

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Corporate Study Team,
IMERT, Pune

Centre fully prepared to combat inflation: FM

2007-02-10T22:19:00.001-08:00

Finance Minister P Chidambaram has said that the government is taking all necessary steps to curb the rising inflation. He said that an unusual combination of factors like growing GDP, the increasing year-on-year credit and money supply has contributed to the rise.

"There is an unusual combination of factors. The GDP growth in the Indian economy is at over 9%, the year-on-year credit is growing at over 30% and money supply is growing between 20-21%. One has to proceed with great deal of deliberation in moderating these factors," Chidambaram said while addressing a press conference in Mumbai on Saturday.

The inflation figures rose to a two-year high at 6.58% for the week ending January 27, despite the rollout of the fiscal and monetary measures to control the overheating in the economy. The numbers stood at 6.11% a week ago. The FM added: "There are three factors that will help in bringing down the inflation: fiscal measures; the monetary policy, which the Reserve Bank of India is looking after; and the supply side constraints. Sugar prices have come down, (following imports being allowed). Similarly, prices of wheat and agri commodities are also expected to come down by the end of the month."

Earlier, delivering the keynote address at the second Association of NSE Members international convention, he suggested that to cut the cost of regulating the huge number of market intermediaries in the Indian capital market, intermediaries in the Indian capital market should ideally merge.

"In the Indian capital market we have around 30,000-odd brokers and sub-brokers and various other intermediaries. Not most of them are active. A sizeable number of them are inactive, increasing the regulatory costs. I urge the industry bodies for a possibility of consolidation of the intermediaries to reduce the regulatory costs," said the finance minister.

[Courtesy – http://www.financialexpress.com ]

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Corporate Study Team,
IMERT, Pune

Samsung joins Apple, LG in the Touchscreen Phone War

2007-02-10T22:09:00.001-08:00

Samsung Electronics Co., on Friday announced a new mobile phone that features a full-touch screen display occupying most of its front face and internet & media capabilities, apparently jumping into the smartphone market to take on Apple's much-hyped, yet to release, iPhone and LG's Prada Touch Screen Phone.

The Korean electronics giant, the third after Apple and LG to show a handset with such a design, said it will showcase its new revolutionary handset, the 'Ultra Smart F700' next week at 3GSM World Congress, the largest telecommunications event in Barcelona.

The F700 is an "Ultra Smart" cell phone that the company said compliments its Ultra handset portfolio. It will be the fourth member of Samsung's "Ultra" family of phones.

Samsung's revolutionary F700 features a stunning 2.8-inch 440x240 color display and technology that allows the user to download a digital music track in around 4.4 seconds. Media playback support includes multiple AAC audio formats, Real, and variants of MPEG-4 including H.264.

The device also contains a full QWERTY key pad tucked behind the screen. Samsung said the traditional QWERTY key pad that slides out at its base is "for users who are not yet familiar with a touch-screen-only user interface."

The new Ultra Smart F700, which measures 4.1 by 2.9 by 0.6 inches, slightly thicker than the iPhone, can also access the Internet, take pictures, show videos, handle e-mail and share photos, said Samsung.

Besides all, one notable feature in Samsung's innovation is its support for third-generation (3G) networks. Among the three handsets the F700 is the first that is compatible with 3G WCDMA (Wideband Code Division Multiple Access) in addition to conventional GSM (Global System for Mobile Communications).

Samsung's 3G technology is considerably faster than the iPhone's EDGE system. On 3G networks, it can receive data at up to 7.2Mbit/sec, capable of appealing enterprise level buyers and prosumers who need frequent access to email.

Packed with a 5-megapixel camera, Samsung's phone outclasses the iPhone's 2-megapixel camera. It will also feature a microSD slot for additional storage and Bluetooth support, said Samsung, the world's third-largest manufacturer of mobile phone handsets.

Samsung's device, though, seems better in most aspects compared to the LG K850 "Prada" and the Apple iPhone, but its comparatively short display is its disadvantage over rivals. F700 has 2.8 inches against 3 inches on the K850 and 3.5 inches on Apple's iPhone.

Apart from the small screen size difference, one more disadvantage will probably be its price. F700, featuring overall better specifications, seems to be more expensive than rival smartphones. However, Samsung has not yet decided when or where the phone will be launched nor how much the device would cost and which cellular operators will offer it.

The iPhone, which is due to release in June, has been priced at $499 for the lower end model and $599 for the higher end version, while the LG Prada phone is expected to carry a USD $770 price tag.

[Courtesy www.themoneytimes.com]

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Corporate Study Team,
IMERT, Pune

Tata Steel wins Corus with $11.3bn offer

2007-01-30T20:26:00.001-08:00

The much awaited results are out!!

Tata Steel of India won the battle to control Anglo-Dutch steel maker Corus with a £5.75bn ($11.3bn) offer on Wednesday, after more than eight hours of head-to-head bidding against Companhia Siderúrgica Nacional of Brazil.

Tata was declared the winner with a bid of 608p a share in cash, against CSN's highest bid of 603p a share. The Tata bid valued Corus at about £6.7bn including debt, said a spokesman for the company – far above earlier analysts' and market estimates. Corus shares closed in London on Tuesday at 565p.

"This is a price that Corus shareholders will be happy with but also one that Tata is happy with," said a banker working on the Tata bid. He added that the Tata camp was "pretty excited" about the victory, especially as CSN had been seen by many as the probable winner. "We kept a very low profile but we always knew Tata was very determined," said the banker. Tata is expected to hold a press conference in Mumbai at about 10:15am local time.

The bidding went to the ninth and final round of an unusual auction process introduced by the UK Takeover Panel to ensure the Corus battle was resolved in an orderly and transparent way. One person described the process as "tense" towards the end. The Tata team including the chairman, Ratan Tata, conducted the bidding from their headquarters in Mumbai through their bankers in London.

Tata and CSN had been fighting over Corus for several months, in an effort to become the world's fifth largest steel producer. The global steel industry has been rapidly consolidating over the past year, and steel makers are under pressure to grow if they are to have a chance of competing with Arcelor Mittal, the world's largest steel group, created last year through the takeover of Arcelor by Mittal Steel.

CSN bid 515p a share in cash for Corus in December, trumping Tata's agreed offer of 500p. Tata had started the bidding in October with an offer of 455p a share.

Tata's winning bid of 608p a share represented a premium of 68 per cent to Corus's pre-bid share price, Corus said.

A person familiar with the Tata bid acknowledged the price was higher than the market expected but said Tata's net profit for the third quarter, reported on Tuesday, was sharply higher and steel prices were buoyant. "Against that backdrop, it's understandable that Tata Steel has the confidence to do what it has with Corus," he said.

Tata said the bid represented a price of nine times earnings before interest, taxation, depreciation and amortisation from continuing operations for the year ending September 2006 and a premium of 33.6 per cent to its original bid of 455p.

The deal represents the final chapter in a successful turnround story at Corus, which was on the brink of collapse four years ago. At the time, its shares were trading at less than 10p, but a boom in global steel prices and a restructuring plan pushed through by Philippe Varin, chief executive, led to a dramatic recovery in the group's fortunes.

One London-based steel analyst said earlier Tuesday that Corus was expensive even at 515p a share. "450p was where you could find a stand-alone fair value for the company. Higher than that and you have to find synergies."

CSN and Tata's bidding had been dictated by "pride" as much as value for money, said the analyst. "They are looking at global empire building."

CSN tried to merge with Corus in 2002, and had claimed to have done substantial work on the potential synergies between the two companies.

CSN refused to comment immediately Wednesday morning. Earlier it said it would launch a bid for Colombian steelmaker Acerias Paz del Rio, seen by some commentators as a plan B in the event of Tata taking Corus.

The deal is likely to boost the valuations of smaller steel companies that could get caught up in the further consolidation of the global steel industry, such as Voestalpine of Austria and Salzgitter of Germany. CSN, along with ambitious Russian steelmakers such as Severstal, who missed out on a merger with Arcelor last year when it was bought by Mittal Steel, will be looking for targets.

[Courtesy - www.ft.com]

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Corporate Study Team,
IMERT, Pune

The Business of Free Software - Julia Hanna

2007-01-29T11:26:00.001-08:00

IT vendors including Oracle, IBM, and Sun that traditionally have built offerings based on proprietary technologies are now investing billions of dollars into open source software—arrangements that are transforming in some ways the fundamental nature of technology strategy development, according to recent research at Harvard Business School.

In "The Business of Free Software: Enterprise Incentives, Investment, and Motivation in the Open Source Community," the authors—HBS professor Marco Iansiti and Gregory L. Richards of Keystone Strategy—examine what drives companies with large, proprietary software portfolios to invest in open source software (OSS) projects that can sometimes seem unrelated to their core business.

"This new reality upends the classic rules of strategy," Iansiti says, "and it's changing the way technology firms approach the development process.

How much of your product do you share? Does your business model extract value from a core product or a portfolio of complementary products?"

Most academic research has focused on individual contributions to OSS, but this working paper is among the first to consider the impact of massive IT vendors like IBM and Oracle on the open source community.

Why are proprietary firms diving into open source? The answer (it's good for business) is hardly shocking. But the line from investing in OSS to profiting from a product is not as straight as one would expect.

Influencing what you don't own

"In a complex, sophisticated environment where so many products and services are connected, strategy has become, in large part, the art of influencing assets that you don't own," Iansiti observes. It's the old saw of the razor/razor blade business model, with many more options for profit. "For IBM, Linux is the razor, and WebSphere software and its related services are the razor blade," he says.

"The question of how you invest and extract money becomes much more interesting when you consider the different layers of the software 'stack' and how they can be leveraged," Iansiti adds. As a measure of IBM's commitment to open source, the company announced its intent to invest $1 billion to the development and promotion of the Linux operating system.

This new reality upends the classic rules of strategy and it's changing the way technology firms approach the development process.

In their paper, Iansiti and Richards divide a sampling of OSS projects into a "money-driven" or "community-driven" cluster. The former group has received over $2 billion in investment in technologies including Linux, Firefox, and OpenOffice, while support for the latter derives solely from the voluntary efforts of vendors' employees.

Not surprisingly, they find that the money-driven cluster consists mostly of high impact OSS projects that draw customers to a vendor's mainly proprietary, core businesses.

"OSS is a business tool that has been used by a variety of corporations for very logical purposes," notes Iansiti. "If you have an environment in which part of the service you provide and the product you sell can be given away for free, that changes the dynamics of the industry. As a company, you will most likely spend more time thinking about exactly what to give away and how to couple it with complementary products and services than you do anything else."

Wooing open-source developers

Another focus centers on determining how to make it easier for the open source community to work on projects that are consistent with your company's strategy.

"There are five or six million people in this space," Iansiti says of the open source community. "It's important to ensure they're doing something that helps your cause."

It makes sense to provide tools that help programmers develop applications that will make Linux more successful if it drives other aspects of your business. (And it doesn't hurt that you're also putting a stick in the eye of a competitor who makes money from the operating system layer of the software stack.)

"It changes the way we think about business development and alliances," Iansiti says. "Traditional alliances are formed between a business development executive and an individual company like IBM or Cisco. In the open source scenario, you could say that there's an alliance between IBM or HP and every Linux developer out there. And that alliance is being mediated by dynamics that are less investment-oriented than a traditional deal and more oriented toward indirect tools to make money."

The payoff

Sometimes the strategies software companies employ are so complex that it isn't immediately evident why a company is investing in a particular area, Iansiti notes. There can be a significant lag time between a company's investment and extraction of a profit.

"People can be too quick to point fingers, saying that one company is stealing while another is giving something away. In fact, the whole picture is often below the surface."

It changes the way we think about business development and alliances.

In another ironic twist, some developers who were motivated toward open-source software development in rebellion against huge proprietary software vendors now find themselves being paid for work from those very same companies.

While research indicates a large majority of those who contribute to the open source community do so in order to learn and share new knowledge and skills, over half cite direct payment for their work or the chance to improve their employability as motivating factors.

Marco Iansiti is the David Sarnoff Professor of Business Administration at Harvard Business School.

~~
Corporate Study Team,
IMERT, Pune

Neuro Economics: Science or Science Fiction? Jim Heskett

2007-01-29T11:20:00.001-08:00

Are you ready for "neuro everything" in management? The year 2007 will see a flood of books and articles describing findings and conclusions drawn from the growing use of MRI (magnetic resonance imaging) devices for studying decision making.

The research follows a pattern. It is based on increasing knowledge that different parts of the brain demonstrate heightened activity when subjected to challenges. Subjects are asked a series of questions (often requiring decisions) while their brains are being scanned (or while they are hooked to lie detectors). The work is being carried out at both European and U.S. universities such as Stanford, George Mason, and Amsterdam.

Among the propositions advanced from this work thus far, for example, are that risk and return are assessed in different parts of the brain, thereby questioning theories regarding expected utility on which a great deal of decision theory has been based up to now. Thus, according to this research, different qualities of, say, investment decisions are made when perceptions of risk or greed (return) prevail in terms of heightened brain activity. Another line of work involves the study of the best locus in the brain, conscious or subconscious, for making various decisions. For example, it is thought that more complex decisions involving hard-to-quantify factors are best made in the subconscious after some amount of preparation. That is, study the problem, sleep on it, and decide without further analysis. It's the type of decision making described by Malcolm Gladwell in his book, Blink. According to this line of thinking, questions involving more quantifiable, straightforward considerations are best answered in the conscious portion of the brain, presumably after considerable conscious thought. Work in neuro marketing at Ludwig-Maximilians University in Munich now claims that strong brands create more excitement in decision-influencing areas of the brain than weak brands, even for mundane products. Does this influence purchase decisions? Stay tuned.

Just how earth-shaking is this? After all, the late Milton Friedman was said to be most proud of his work with Simon Kuznets in which they concluded that people make purchasing decisions based on what they expect their incomes to be in the long-term, thereby mitigating the short-term impact on personal spending of events such as tax legislation. And Warren Buffett is fond of explaining his investment philosophy by saying, "We simply attempt to be fearful when others are greedy and to be greedy when others are fearful."

A lot of this comes down to knowing yourself, with or without the benefit of MRI devices. Are we about to be subject to a number of striking conclusions based on studies involving a small number of brain scans? Will there, as my colleague Luc Wathieu suspects, turn out to be other explanations for findings, for example, that question the value of rational, conscious decision making? What are the more general implications of neuro economics? Will it have strong explanatory as well as manipulative potential for us as consumers, managers, and citizens? Will it bring medical schools, business schools, and economics departments closer together? Or is it so far ahead of its time that we can ignore it for now? What do you think?

Refer to comments http://hbswk.hbs.edu/item/5599.html

Summing Up

Neuro economics is here to stay, according to a majority of those responding to this month's column. Its promises are too great to ignore. But it may be too early to know whether the promises will be realized in practice. And in the meantime, we stand warned against the hype that will be associated with findings based on research in need of standards and more fully-developed methods. Joseph Mello points out that "these studies will produce results along two lines. First, there will be … conclusions that can impact the 'tools' or processes a person uses to make decisions." At the same time, he adds, there will be "a new set of management and pop psychology books with dubious claims …."

Among the potential benefits making it highly relevant, according to David Skinner, is that "its output might just give us some new clues about why so many of the apparently unshakeable beliefs about change management … turn out not to yield the results we expect." Victoria Pynchon looks forward to the possibility that it will, for example, "give us surprising insight into our inclination to do one another good or ill." Roger Dooley noted that "self-reporting in surveys and focus groups is a limited tool, and I have no doubt that in the future brain scans will augment … traditional research methods."

But for Mark Spellmann, research of the kind associated with neuro economics raises "many interesting questions. One is, how do we interpret research findings when neurological results conflict with self-report? … knowing how the brain is working explains very little about what the mind produces—what we think, what we believe, how we make decisions." As Mike Flanagan puts it, "it might be nice to know that the decision was made on the right side or the left side of the brain. But this will never lead to deciding by a mechanical means, nor in predicting a decision outcome." There was even concern expressed about the efficacy of MRI-based research on human health.

Several suggested that it is hard at this point to assess the impact of this work. Dick Meza said that "it will have to run the gauntlet of peer reviews and further research …." Lorenzo Ferlazzo observed that "the current lack of standardized insights into behavioral stimuli and evolutionary asynchrony across global population types would restrict the validity of findings for some time to come." Biju Dominic offered the opinion that "I strongly believe that fMRI-led research into the brain is a top-down, far-too-simplistic approach …. But a bottom-up approach that gets into understanding the functioning of the brain … will be a slow but surer approach to understanding human behavior."

Others welcomed the possibility that this work may bring together economists, management theorists, and medical researchers. As Shann Turnbull put it, "The time has come for business schools to teach how to design, introduce, and operate network-governed enterprises using the knowledge of neuro economics."

Among questions this leaves us with are whether this research is valuable primarily in the aggregate or in individual cases. If so, just how long will it take for practical results? And will the early "wins" be sufficiently significant to foster longer term development in the field? Is it too early to tell?

James Heskett is a Baker Foundation Professor at Harvard Business School.

~~
Corporate Study Team,
IMERT, Pune

India opens telecoms door to Vodafone

2007-01-28T19:29:00.001-08:00

Britain's Vodafone is being challenged by India's Reliance Communications, the Hinduja group and Hutchison's minority partner in the venture, Indian group Essar, in the race for Hutchison Essar.

Valuation estimates for Hutchison Essar, where a 67 per cent controlling stake owned by Hong Kong conglomerate Hutchison Whampoa is on offer, have climbed to as much as $US20 billion ($A25.85 billion) from around $US13.5 billion (SA17.45 billion) as the list of suitors expands.

Winning control of Hutchison Essar would give Vodafone a strong asset and 22 million customers in a fast growing market.

India's main mobile operators now share nearly 150 million customers, but with India's population over 1.1 billion, it translates to less than two out of 100 people owning a mobile.

For Vodafone, which faces slowing growth in its key Western European markets, a strong presence in India could provide it with a vital growth engine.

Vodafone owns a 10 per cent stake in India's top mobile company Bharti Airtel, but does not stand a chance of getting control as Bharti's main shareholders don't want to sell.

[Courtesy - www.theage.com.au ]

~~
Corporate Study Circle,
IMERT, Pune

24th Jan - Sunny Side up for Breakfast News!!

2007-01-23T18:32:00.000-08:00

Bharti beats TCS, Infy in m-cap

Bharti Airtel, India’s top mobile operator, has outperformed market expectations with a 123% jump in net profit to Rs 1,215 crore for the third quarter ended December, 2006 from Rs 545 crore in the corresponding period of the previous year. Total revenues in the same quarter rose 62% to touch Rs 4,913 crore from Rs 3,026 crore in December ’05. The growth in net profits, the highest in the last eight quarters, resulted in the company’s shares touching an all-time high of Rs 700.80, before finishing the day at Rs 689.15, up 1.89% from Monday’s close. This has also seen Bharti move ahead of TCS and Infosys and became India’s third most-valued firm on the stock exchanges.

Bharti chairman Sunil Mittal attributed the company’s performance to the strong demand for telecom services in India. “In particular, the wireless segment has seen record additions and we believe that this trend is likely to continue.” The Bharti Airtel board on Tuesday authorised the acquisition of i2i submarine network cable system (a 50:50 JV between Singtel and a Bharti Group company) for $110 million. It will pay $55 m each to both Singtel as well as to its group company. The company also said that it would transfer all its telecom towers and related passive infrastructure into a 100% subsidiary, Bharti Infratel for enhanced operational efficiencies. It has also decided to launch DTH services by the year-end.

TIMES NEWS NETWORK

Govt clears SEZing doubts

The commerce & industry ministry has allayed apprehensions of SEZ developers over the government’s decision to freeze new approvals and notification of SEZs. On Monday, the empowered group of ministers (eGoM) on SEZs had decided to keep approvals on hold till further orders.

In a statement issued on Tuesday, the ministry of commerce & industry said new approvals and notifications have been temporarily held in abeyance and final decisions would be taken on all pending issues when the eGoM meets again shortly. The statement took note of the concern among developers over the future of their investments.

TIMES NEWS NETWORK

Grasim Q3 net up 184% to Rs 555cr

Grasim Industries today reported a 184% increase in consolidated net profit at Rs 555.39 crore for the third quarter ended December 31, 2006 when compared with Rs 195.34 crore in Q3FY06.

According to a release issued to the BSE today, total income increased to Rs 3,752.83 crore from Rs 2,550.04 crore in Q3FY06.

The company, on a stand-alone basis, posted a net profit of Rs 411.58 crore for the quarter ended December 31, 2006 as against Rs 161.87 crore for the quarter ended December 31, 2005. Total Income increased to Rs 2,323.78 crore from Rs 1,675.33 crore in for the quarter ended December 31, 2005.

Business Standard

Global environment fund gives money to dirty fuel

The world's biggest fund for environmental projects is investing for the first time in a non-renewable, polluting fuel -- coal -- in what it says is a new pragmatic approach to the energy needs of the developing world. The Global Environment Facility, managed by the World Bank and United Nations agencies, said on Tuesday it was putting $45.5 million towards an overhaul of some of power-hungry India's ageing coal-fired plants to make them more efficient and less polluting. Monique Barbut, the facility's CEO, said there had been long debates about whether it should be funding a "polluting" coal project, in what would seem to be a departure from its aim of weaning the world off carbon as a fuel supply. In the end, she said, the pragmatic approach won out. "We cannot cover the planet with wind turbines," she told reporters at a New Delhi press conference. "We do argue that renewable energy is the best ... but at the same time India is clearly not going to develop for the next 20 years without coal. We have to cooperate with that."

Reuters

SRE-1 brought home

The Indian space programme today entered a new league with the Indian Space and Research Organisation (ISRO) demonstrating its ability to recover an orbiting satellite and bringing it back to earth successfully for the first time in its history.

The Tribune, Chandigarh

Now that’s a great start for a day. Wish you a brighter & a prosperous Wednesday!

~~
Corporate Study Team,
IMERT, Pune

IMERTs Flag raised yet again!

2007-01-22T20:27:00.001-08:00

IMERTs Flag raised yet again, this time at PUMBA when IMERTians won 'MARKATTI' the negotiation game, part of Druv – PUMBAs Management Festival.

Hearty congratulations to the participants - Dhairyasheel Patil (MBA I) , Sumeet Karande (MBA I) & Jayveer Singh (MMM I)!

~~
Cultural Cell Team,
IMERT, Pune

The Apple of everyone’s eye... (Continued)

2007-01-19T21:08:00.001-08:00

21 MILLION IPODS ADD UP TO APPLE'S BEST QUARTERLY PROFIT, REVENUE

Apple -- maker of the wildly popular iPod -- just had its best quarter ever, reporting record revenue of $7.1 billion, and record profit of $1.0 billion, or $1.14 a share, for its first fiscal quarter.

Apple said it shipped more than 21 million of the digital music and video players in the three months that ended Dec. 30, up 50 percent from a year earlier. Shipments of Macintosh computers, meanwhile, were up 28 percent to more than 1.6 million. Profit was up 78 percent from a year earlier, while sales were up 24 percent.

''We've just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone,'' Apple Chief Executive Steve Jobs said in a statement announcing the results.

Apple's shares were falling in extended trading, after closing at $94.95, down $2.15, or 2.2 percent. However, the Cupertino company's stock is trading near its all-time high of $97.80, set this month when Jobs introduced plans for the all-in-one cell phone/iPod/pocket computer iPhone and the Apple TV device, which will allow you to use your big-screen television to watch content stored on your iPod or computer.

BUT!

Earnings reports are usually staid affairs, but Apple's financial update today could have a bit of drama.

Among investors and analysts, there's already excitement about how the company did during the just-completed holiday season. And many are eager for Apple's take on what its new iPhone will mean for the company's earnings.

But another issue of note could spice up the proceedings. The U.S. Attorney's Office announced Friday that it has launched a criminal investigation into Apple's past stock-option grants. Apple's conference call today will mark the first chance for analysts to query the company over the government's investigation and its response.

Many investors would like the issue to go away. But that doesn't mean they're not thinking about it.

Apple's stock is now a more risky bet thanks to the federal investigation, said Darren Chervitz, director of research at mutual-fund company Jacob Asset Management, which owns Apple shares. The risk to Apple is that the investigation could lead to Chief Executive Steve Jobs' resignation, just as similar problems at other companies have led to the resignations of their CEOs, he noted.

''Clearly, this is a small cloud,'' Chervitz said. ''Jobs is one of the few CEOs who would have a pretty significant impact on the stock price if he had to leave.''

Why is Apple not seen in Asia as much?

Every time somebody asks them why the iTunes Store won't sell songs or movies to consumers in Asia, all we hear are vague and mumbled remarks about "the issues that still need to be resolved." This is invariably followed by another sentence saying they are not authorized to say more.

Here is what your marketing director for Asia told the Agence France-Presse in Hong Kong when you launched your movie service in the United States in September.

"We cannot comment on the specifics but it is true that iTunes is not available in Asia. That goes for music and movies."

Is that any way to talk to your customers?

I asked your company's visiting fireman from Singapore—we only see him whenever Apple introduces new products here in the Philippines—how long it's been since the iTunes Store opened for business in the United States.

Five years, he said. Does that mean that a company as innovative as Apple has been unable to resolve those issues in half a decade?

So I asked the guy: Where are Asian iPod buyers supposed to get their music? Limewire? Other file-sharing sites?

"For Asia, we recommend that consumers rip their music from their audio CDs or download any of the thousands of free podcasts," he said.

So, I asked, we can do anything with our iPods except buy songs and movies from the iTunes Store? That's correct, he said.

Now Apple will not say how many of the 60 million iPods out there are in Asia, but officials have told the Mac News Network (http://www.macnn.com/) that the iPod doesn't enjoy the same market leadership here as it does in the United States, Japan or Australia. Yet in the same article, your chief financial officer, Peter Oppenheimer, is quoted as saying that Apple sees the rest of Asia as an opportunity to increase market penetration.

Here's an idea. Start treating buyers here with the same respect that you give your customers elsewhere in the world. Stop redlining Asia with vague talk about piracy. If you have a piracy problem in this region, why not at least say so and level with us?

Let's speak plainly.

Intended or not, Apple's decision to withhold the online sale of music and movies in this part of the world is an insult to people who buy its products. The red line tells us you think of us all as digital pirates, unworthy of trust. This is the stark truth that your people dance around whenever we ask them why Apple doesn't sell music here.

So, is Apple worried that piracy syndicates in this part of the world will start downloading songs for 99 cents apiece and start selling them for 10 cents or burn them on CDs to sell in Third World markets? But that's happening already, even without iTunes.

Or maybe it's the music publishers who won't let you sell their songs in Asia for the same reasons. But if this is so, why not just say so instead of taking the heat for their fears?

Let's look at some figures. Apple claims to have sold 1.5 billion songs to date through its iTunes Stores, with its online catalog of 3.5 million songs. Sales in Europe, a market Apple opened in 2004, have shot up from 50 million to 200 million songs. Not bad.

But the International Federation of the Phonographic Industry (IFPI) estimates that almost 20 billion songs were illegally downloaded in 2005 alone—and this was based on consumer research in 10 music markets including the United States, the United Kingdom and Germany, countries where the iTunes Stores already operate. Canada, where iTunes operates, was estimated to account for one billion of the songs illegally downloaded last year.

So, when your folks here tell us they can't sell us songs because of piracy, something just doesn't wash.

Ironically, by not selling to large swaths of Asia, Apple is indirectly encouraging piracy because iPod owners wouldn't be able to buy songs online even if they wanted to.

What consumer wouldn't want to own a legitimate product over a pirated one, as long as the price is right? When the prices of legitimate VCD and DVD movies dropped here, sales went up, despite the availability of cheaper pirated versions.

Oh, one more thing. Why take our word for it? Even the IFPI says one way to fight piracy is to promote legal services.

Courtesy:

www.manilastandardtoday.com, www. macworld.com, www.siliconvalley.com, www.wsj.com, www.apple.com, www.zdnetasia.com, www.ft.com, www.wordpress.com, www.cnn.com, www.tectonic.co.za, www.marketwatch.com

~~
Varun Nagpal,
Corporate Study Team,
IMERT, Pune

Apple iPhone - The Apple of everyone's eye!

2007-01-18T20:10:00.000-08:00

Steve Jobs - CEO Apple, gave a jump start to mobile technology market in the new year when he unleashed the new iPhone by Apple. The best part - its been priced at US $ 499 only!

i.e. INR 22, 000 odd!

Check out the jaw-dropping review of the new Apple iPhone!

More on Apple's Market Strategy & Market in India, coming soon!

~~
System Cell,
IMERT, Pune

Book Review - Maverick: Ricardo Semler

2007-01-07T22:04:00.001-08:00

Can you imagine a company where the employees decide their own salaries, the timings they would come and leave the workplace, how the surroundings around them should look like!!? Well, if whatever Ricardo Semler claims in his book "Maverick" is true, "SEMCO" in Brazil would be the only company in the world where the things said above do happen!

Ricardo Semler took over the reigns of "SEMCO" from his father. Till then, SEMCO was just another old fashioned manufacturing company with strict shift times, cribbing workers, etc. Handing over the papers to Ricardo, Semler Sr. said, "Do whatever you want as long as I'm alive to correct your mistakes" But Ricardo had his own ways of doing things that made sure that his father won't have anything to complain about in the first place and even if there was, he (father) won't be able to do much!

After stabilizing the company through the turbulent periods of change of management, Ricardo started acquiring companies to enhance business. I won't go into the details of how he went on to acquire companies or the timelines but I would surely like to share the philosophy behind this world's most unusual workplace.

The premise that Ricardo runs his company on is that "All the people working are adults and they know what needs to be done. It's no use policing them and having strict rules about what to do and what not to. If the employees are satisfied with work they are doing, a lot of problems won't arise in the first place." Ricardo proclaims that the policy of his company is not to have policy at all!

Some of the interesting initiatives that were implemented at SEMCO are:

When recruiting a new team member, he / she would be interviewed by the team with whom he / she is going to work. That way, the team members would find out if they would be happy working with the new member.

For some days, the company had started an initiative where everybody had to put a tag on the peg named after the employee. If someone is in a really bad mood at the start of the day, he/she would put a red tag at the entrance, "Stay away from me!" If someone is in OKish mood, he/she would put a yellow tag, "It's just another day for me..." and if someone is in really good mood, he/she would put a green tag, "What a wonderful day this is!" This initiative gave a clear indication to the management whether the employees are happy coming to work. But I believe it served another bigger purpose: to identify emotions to a certain extent. To control an emotion one needs to identify it first! I think, most of the employees would have certainly spared a few moments wondering why they feel what they feel.

Headline Memo: Earlier, shelves after shelves were filled with documents and memos. It was tedious to maintain and find the required document from the piles. Ricardo used a simple criterion to get rid of the excess documents, "What worst can happen if I throw this piece of paper?" and he could manage to reduce his 6 cupboards full inventory of documents to just 3 shelves! Similarly, employees used to write pages for a simple memo. Ricardo suggested an effective way. He asked the employees to write the memo just like reporters write the news. They manage to catch the attraction of the reader and deliver important information through the Headline. The headline memo concept was used throughout the company. It reduced the documentation drastically and still, managed to convey the important information effectively.

As stated earlier, Semler believed in employees being mature. He asked the employees to decide how much salary they'd need. It's hard to believe but employees did really rate themselves appropriately and asked for the salaries they really deserved. Some even asked for a less salary that they were getting!... And believe me, the company is still running.

In spite of the fact that SEMCO is a manufacturing company and has to work in Shifts, the workers decided themselves when they would come to the plant. They were keen to adjust the timings of other shifts and schedule according to the business requirement.

Workers coloured the walls of the surroundings the way they wanted. Some grew plants between adjacent cubicles.

And last but not the least, Semler scrapped the age – old hierarchy of CEO – Middle Managers – workers. Instead, he proposed a new systems of 3 concentric Circles wherein the innermost circle is that of Partners, the middle one being Coordinators and the outermost being the Associates. Any associate could move into the inner circles of respective departments. This way every employee has an opportunity to move around in the company.

Ricardo has also pondered upon the growth of the company and "How big is big enough?"

These are just some of the astonishing things. The whole book is filled up with such out – of – the – world initiatives. It's really hard to believe that a company can survive with such processes (in fact, no processes!) and with adverse government policies, let alone prospering. But today the company is making exceptional progress!

One important thing: SEMCO has a total count of 3000 – 4000. So I think, it is manageable to implement the initiatives effectively in a small company and difficult to implement in big companies like ours. Also, it needs maturity and commitment of the employees to appreciate such initiatives. But then, as the clichéd saying goes, "Where there is a will…There is a way!"

~~
Varun Nagpal,
Corporate Study Circle,
IMERT, Pune

Market Watch - Jan 2007

2007-01-05T06:32:00.001-08:00

Retail major Shoppers' Stop, part of the K Raheja Corp, is consolidating its luxury retail business by roping in over 40 global brands and has lined up Rs 500 crore worth of investments for this purpose.

Nike India has found an unusual display space to promote its apparel, footwear and accessories among women. The company has partnered with fitness centres Gold's Gym and Chisel to showcase its products.

After making its presence felt in eastern and northern India, Blackberrys, a premium men's clothing brand, is embarking on its southern foray through an aggressive expansion and marketing plan in Chennai, Bangalore and Hyderabad.

Madura Garments, textile and apparel division of Aditya Birla Nuvo, is foraying into retail in Sri Lanka.

Infosys Technologies and its chief executive, Nandan Nilekani, have lately taken a couple of steps which offer a glimpse into how the two are evolving on their journey towards a single goal – becoming a "globally respected" brand.

~~
Corporate Study Circle,
IMERT, Pune

The ART of marketing

2007-01-04T20:22:00.000-08:00

Lessons marketers could borrow from The Art of Living Foundation.

Anyone who can persuade a corporate executive to ignore the insistent buzzing of his BlackBerry on a weekday has to be a great marketer. Multiply that 12,000 times, get the the executives to sit cross-legged on the mud-packed ground and practise breathing exercises — and you are in the presence of a virtual marketing wizard.

But Sri Sri Ravishankar would not like to be considered that — he is a guru who teaches Sudarshan Kriya Pranayam and New Age spirituality to people across the world. About 2.4 million of those students turned up in August for the 25th anniversary of the Art of Living Foundation, the non-profit organisation Sri Sri began in 1981.

Event managers in Mumbai agree those are eye-popping numbers, especially considering the celebrations were held in a remote airfield outside Bangalore.

Art of Living's success is a recent phenomenon; it is only in the past six or seven years that the movement has spread across more than 144 countries and now has an estimated 20 million followers.

Still, can its success provide marketers insights on low-cost brand-building techniques? Tips on how to create a loyal band of followers who can be converted into a captive market for brand variants and extensions? The Strategist takes a look at the possible lessons.

Lead from the front

It is not as if the movement started off as a runaway success. "There was a lot of prejudice," agrees Sri Sri. "The fundamentalists did not like our approach. Nor did the communists and the traditionalists accept us. We were excommunicated by many."

One way out would have been to cater to Western audiences thirsting for Eastern thinking and spirituality. But there were already several entrenched players — while the serious truth-seekers turned to Jiddu Krishnamurti, and the Iskcon movement was still active in the early 1980s, Osho Rajneesh was at the peak of his popularity.

Or should it be notoriety? Both Hare Rama and Osho had as many detractors as devotees. Juxtaposed between the extremes of the Jiddu and Osho "brands", Sri Sri's Art of Living couldn't but be considered a lightweight.

But it couldn't back out. Making it in the US would mean instant global recognition. Not to mention, much better acceptance back in India. So how did Sri Sri pull it off? The Foundation took full advantage of its USP: a charismatic, eloquent and camera-friendly leader. The "face" of the Art of Living Foundation, at the peak, Sri Sri was flying to 175 cities a year, working 21 hours a day.

Equally important, the Foundation kept its product offering simple, if not exactly inexpensive. Essentially a crash course on breathing exercises and yogasanas, a basic course of six sessions could set you back around $250 in the US, and about Rs 1,500 in India. The idea was simple: urban consumers were looking out for a stressbuster that would enhance productivity and sustain energy levels.

Believe in the buzz

Enough word-of-mouth publicity for the Foundation was generated for it to enter 144 countries, including war-torn regions such as Kosovo and Iraq. In India, NRI cousins coming home from the US would talk about Art of Living, leading affluent families in the country to gain interest.

Celebrity endorsements did their bit to further the Foundation's cause. While Sri Sri is, naturally, Art of Living's biggest ambassador, over the years, seals of approval from public figures have also helped: businessmen Vijay Mallya and Venugopal Dhoot, and models Rhea Pillai and Lara Dutta have been associated with the Foundation. US Congressman Joseph Crowley has even nominated Sri Sri for the Nobel Peace Prize!

As followers increased, they unleashed a viral marketing campaign. For instance, Mumbai alone has an estimated 100,000 active Art of Living volunteers. They operate in their neighbourhood, acting as opinion leaders and encouraging others in the locality to enrol for the courses.

Of course, there's some formal advertising, too. Take any pre-event campaign and you will find Sri Sri's face on posters across town, in prominent places like flyovers, outside railway stations and so on.

Recently, a leading business news channel tied up with the Foundation for a series on how business and spirituality come together, further proof — if it was ever needed — that businessmen and corporate executives are demonstrating increasing interest in spirituality.

Interestingly, though, insiders say the publicity blitzkreig costs the Foundation virtually nothing — most of the ad material, like posters, vinyl prints for billboards, leaflets and flyers and so on are sponsored by followers.

Apply that to the context of everyday business. "Brands can get customers to create online communication, some of which become successful viral campaigns and form communities of loyalists," says a Mumbai-based marketing consultant.

He cites two examples — the Joga Bonito online site created by sportswear brand Nike on the eve of the soccer World Cup in summer 2006 and consumer goods giant Procter & Gamble's online initiative when it launched its new deodorant brand Secret. An example closer home is the Sunsilk gangofgirls community.

A consuming class

Having a substantial volunteer (loyalist) base isn't an asset only when in canvassing support. They also help the organisation keep operating costs really low.

For instance, the administrative costs, including wages for Art of Living employees, is estimated at just 3-4 per cent of income. "The only paid employees are the accountants," says a member of the Foundation. He adds that volunteers are also self-motivated and hence are far more committed.

Not just that, they also become a huge test market or even a captive consuming class when Foundation expands its scope of activities. For instance, in 2002, when the Foundation launched a range of Ayurvedic products — everything from medicines to personal care products, under the Sri Sri Ayurveda brandname — volunteers across the world formed an informal direct selling network.

In many cases, they acted as living advertisements for the products, by using them in front of prospective buyers. The products now account for less than 5 per cent of the Foundation's annual income. It is now in scaling up production to tap an even larger market. Clearly, correct breathing techniques is just one of the many lessons smart executives can pick up from the Foundation.

- Prasad Sangameshwaran

[Courtesy - Business Standard]

~~
Varun Nagpal,
Corporate Study Team,
IMERT, Pune

Mainland China!

2007-01-01T11:14:00.001-08:00

We always ask one question: ' How do the Chinese have a booming economy?' and we compare ourselves with the 'giant' on all parameters including 'defense' sometimes.

Or it is the title of this article which hits our mind straight after that, if the initial is too intellectual for us.

The most common observation is about the FDI in India.

In a year-end review released this week, Kamal Nath, India's minister of commerce and industry, said FDI inflows were expected to surpass $11bn in 2006-07, compared with $5.5bn the previous year.

Wait! don't get excited so soon, please have look at the Chinese figures: - A report from the Economist Intelligence Unit this autumn projected that FDI in China would exceed $80bn in 2006.

I recall book I had read in my first year titled ' A Bridge Too Far ', i think it aptly applies in this case too. Just when are we going to bridge that gap? or is it really possible for us to do so?

If we feel that communism which brought in centralized authority and quasi-dictatorship in China post cultural revolution is the key, then have a look at this: -

LENOVO is arguably China's most important company, rising from obscurity 20 years ago to become the world's third-largest manufacturer of personal computers. Its purchase, for $1.25 billion in late 2004, of IBM's PC division, which boasted four times its own volume of sales, still ranks as one of the most daring overseas acquisitions by a Chinese company.

Yet there was nothing inevitable about Lenovo's ascent. Its founder Liu Chuanzhi was determined and politically shrewd. But as Ling Zhijun, a respected Chinese journalist, chronicles in this exhaustive new account, Mr. Liu and his colleagues—most of whom started in business in their 40s—had no experience of running a private company, no idea about modern computers (the first mainframes had to be cooled with ice cubes and a fan) and a formal education that had been cut short by the Cultural Revolution. As they built Lenovo, whose Chinese name is Lianxiang, they had to teach not just themselves, but a generation of Chinese bureaucrats how to run and regulate a private corporation.

Mr. Ling's impeccably sourced, fly-on-the-wall account of the company's struggles is fascinating. Lenovo depended on the protection and goodwill of the Chinese Academy of Sciences, which also became its biggest shareholder. However, despite Lenovo's subsequent stock market listing in Hong Kong and its skill in sidestepping ludicrous government rules against everything from differential pay and bonuses to control of the supply chain. Ownership of private assets is highly sensitive in China, and previous attempts by the government to reclaim ownership of effectively private companies have often proved disastrous—bankrupting Kelon, a fridge-maker, for example. With luck, Lenovo will escape this fate.

Mr. Ling gives most of the credit for Lenovo's success to Mr. Liu, who pushed boundaries while staying just the right side of the ideological line—and by doing so, changed the way China does business. Mr Liu launched incentive schemes and share options to motivate Lenovo's staff—handing out suitcases of cash and risking imprisonment to sidestep the government's 300% tax on bonus payments. The tax was subsequently scrapped. He pushed for a handful of employees to own their own homes—a revolutionary initiative in 1992—prompting China Construction Bank to announce the nation's first- ever personal loans and newspaper headlines to cry: "How can young people live in three whole rooms?" Lenovo was the first Chinese company to create advertisements that did more than just name a product and its price—so introducing brand building to China. And Mr. Liu accepted China's limits. Though politicians and his own engineers urged him to develop a "Chinese chip" and fight Western competitors on quality, Mr. Liu resisted. Seeing that Chinese science lagged behind, he focused instead on cutting prices and copying Western technology and sales methods.

Most mergers between Chinese and Western companies stumble. Insiders suggest this one may be faring better than most under William Amelio, the former head of Dell's Asia-Pacific division. It is too early to know for sure and Lenovo's history may be a poor guide to its future.

If Lenovo's rise in China has been haphazard, Microsoft's feels pre-programmed. Opening a research laboratory in China in 1998, a pioneering move for a foreign company was a calculated decision intended to help Microsoft attract fresh, cheap talent. That, combined with an investment of more than $100m, helped repair relations with Beijing that had been damaged by the group's heavy-handed commercial dealings in China.

This is just one of the many success stories in China, I picked this story as we all know Lenovo.

Resilience is not something that we inherit but it is something we acquire by perseverance, efforts and faith.

The best thing on the blog would have been a warm note of good luck for the new year, kindly excuse me for being curt, but if we want to be the best then i think we should prepare to beat the best.

So pull up your socks fellows we still have long way to go.

[Courtesy www.economist.com]

~~
Dhairyasheel Patil - MBA I,
Corporate Study Circle,
IMERT, Pune

Repositioning IMERT

2006-12-27T06:09:00.000-08:00

We are proud to announce the release of new IMERT Desktop Wallpapers & New Year Greeting Cards. Enjoy the quality release.
Cheers!

Unity in diversity @ IMERT

IMERT - The Right Mix

IMERTians - The True Leaders

IMERT

IMERT Wishes all of you a very happy and prosperous new year. Enjoy the New year greeting cards.

New Year Greeting - Type 1

New Year Greeting - Type 2

~~
System Cell Team,
IMERT, Pune

SPECIES

2006-12-24T10:52:00.001-08:00

Being a science student the most interesting chapter I have studied in my 12th std was regarding Darwinism. I always wondered how we are linked to the apes?

It was surely uncomfortable when I thought about it for the first time, like how do you answer when someone asks you: - 'what did your family traditionally do?' Answer: - 'well, hang around the trees; you see my forefathers were monkeys'.

To speak only scientifically the statement is quite true because if we compare the ape gene pool with ours (human) the there is almost 95% data redundancy.

How do we interpret the statement? It practically means we are no better to the apes. But on second thought we are not quite alike either. So now negating the above mentioned similarity posses its own set of interesting questions like: -

1. What is the hallmark of being 'human'?
2. What is it that makes us really 'human'?
3. Why are we successful?
4. What ensures that we keep on propagating our species despite of   evolutionary pressures?

There could be more but these are what struck at the very first go.

These questions sound too intellectual, philosophical and may be too taxing to the human brain, but it's not the matter that is complex except that it is unusual. We normally agree to facts without challenging them, so when posed by a fundamental query it seems, challenging something too pious to violate.

So let's analyze one by one.

1. What is the hallmark of being 'human'?

   The answer is quite simple, yet noteworthy 'the remaining 5% of different genes'. It's just how we have been able to express these different genes to develop a completely new organism, 'Homo Sapiens Sapiens'.

2. What is it that makes us really 'human'?

    It's our ability to feel, to perceive things multidimensionally, to analyze situations quickly, and to think of answers, to think of more questions, find answers to them too and build logic so strong that it is transformed into a reflex arc.
   The most quintessential aspect of human nature is 'curiosity'. We almost always do things basically due to curiosity. To satisfy curiosity with dogged efforts by delving to the depth of the matter is the exact other side of the 'curiosity' coin.

3. Why are we successful?

We may think that if all the points have been previously noted this question is nothing but repetition.

No, not so. You see thinking from different angles, being curious and satisfying curiosity only does not ensure existence. The major reason for our success has been 'application of thought'. It means we are the only specie to have not only continuously 'invented', 'innovated', 'improvised' things but also probably the best ones to have reinstated what we call 'teamwork'.
The outcome has been utter resilience to vanish from the ecosystem.


4. What ensures that we keep on propagating our specie despite of   evolutionary pressures?

It is important to be resilient, but how do we ensure we remain so?
There is seemingly mundane yet elegant answer to this: - 'Adapt'.
Adaptability has been the backbone of human success.

Here is where we demarcate ourselves as 'humans'.

All the points we have seen like curiosity, perseverance, inventions, innovations to teamwork when used harmoniously and applied at the right time gives us what we call adaptability.

No wonder why Darwin himself gave the essence of his theory of evolution as: - 'Survival of the Fittest'.

Yes, for a very long time I have been repeating something most of us would have by hearted to pass 12th.But its time to prove we are humans.

Time for some basic thinking to be done.

I pose this entire matter as question to you all; give the best possible application of this matter.

There is of course an interesting link to what we do now and how we do it?

If you can answer it possibly you can learn how to be a human again, if you give up (very un-human to behave) I will gladly write the answer, but till then give it a shot.

(To leave your comments please click on the comments link below)

Dhairyasheel Patil

MBA- I, (IMERT)

The World Is Flat - Worth a read!

2006-12-05T20:32:00.000-08:00

The World Is Flat: A Brief History of the Twenty-first Century is a best-selling book by Thomas L. Friedman analyzing the progress of globalization with an emphasis on the early 21st century. It was first released in 2005 and was later released as an "updated and expanded" edition in 2006.

Overview

Friedman believes the world is flat in the sense that the competitive playing fields between industrial and emerging market countries are leveling. Friedman recounts many examples in which companies in India and China are becoming part of large global complex supply chains that extend across oceans, providing everything from service representatives and X-ray interpretation to component manufacturing. He also describes how these changes are made possible through intersecting technologies, particularly the Internet. Friedman criticizes those who resist these changes, arguing that global change is inevitable. He also warns that companies that are now part of a supply chain may eventually want to build a supply chain of their own. As he puts it, "they are racing us to the top." The World is Flat is part global reporting, part theory and reflection about how the world got here and what the ramifications are for education, government policy and readers.

In Chapter 11, "The Unflat World," Friedman discusses his philosophy of history: "I am a technological determinist! . . . I believe that capabilities create intentions. . . . But . . I am not a historical determinist". He notes that there are still three billion people who still live in an "unflat world" unaffected by the technologies and socioeconomic changes, sometimes this is caused by poverty. He addresses what these three billion people--as well as their governments and the world's businesses--need to do in order to join the "flat world."

Criticism

The central image of the book―the "flat" world―has been criticized by The Economist as an "inaccurate and empty image" that does not suit Friedman's own argument. While Friedman points out that the world is increasingly inter-connected, his image may suggest the opposite, as a flat world would be harder to navigate than a spherical one. However, Friedman more likely meant the metaphor to imply the "playing field is flat" in the competitive sense.

There has also been criticism of Friedman's use of the flat earth theory in his book. Friedman perpetuates the myth that Christopher Columbus set out to prove the world was round, while his contemporaries believed it was flat and that his ships would sail off the edge of the Earth. This false idea was begun by a biography of Columbus written by Washington Irving, and many have felt that Friedman should know better. However, even some critics of the Columbus reference have still been subject to the popular myth of the flat-earth era. The well-respected publication 'The Economist', in a review of Friedman's book, stated incorrectly that "Mr Friedman claims that this proved Columbus's thesis that the world is round. It did nothing of the kind. Proof that the world is round came only in 1522, when the sole surviving ship from Ferdinand Magellan's little fleet returned to Spain." In actuality, few people in 1492 believed the Earth to be flat.

Peak oil advocate James Howard Kunstler believes that the globalization model supported by Thomas Friedman is a "false doctrine" because it relies on cheap oil and implies a growth of its use, and in a century to be sealed by future oil depletion and global warming it is nor sustainable nor desirable.

Friedman's book recently became required reading for undergraduate engineering majors at Case Western Reserve University. For a counter perspective, students read excerpts from William Marling’s How 'American' is Globalization? in which Marling calls Friedman’s “flat world” metaphor “anachronistic” and “wrong” (202). The book is also required reading in an upper division computer science course at California Polytechnic State University and during the 2006 Orientation for the incoming class at Vanderbilt University MBA program.

~~
Corporate Study Team,
IMERT, Pune

Interesting Statistics Part II

2006-12-05T20:29:00.000-08:00

Open source software would in 2007 get the architectural backing and distribution channels it needed to gain acceptance from enterprise customers that aimed to deploy enterprise applications at a lower per-transaction cost, Unisys said.

It expects far-sighted organisations to be looking to open source to develop even more of an "edge" to increase their competitiveness and drive innovation in 2007.

"There are literally hundreds of thousands of open source projects in the world today," said Anthony Gold, vice-president and general manager, open source business, Unisys.

"Until now, Linux has been one of the most mature and widely adopted elements. In 2007, Unisys sees the entire open source stack attaining a similar inflection point in adoption for critical mainstream business solutions such as business intelligence and enterprise content management," he added.

~~
Corporate Study Team,
IMERT, Pune