Showing posts with label India. Show all posts
Showing posts with label India. Show all posts

Monday, April 8, 2013

B&E Indicators

Private charity contributions rise in India
Although the human conditions in India remain difficult for many, the attitude towards giving has certainly started to change. In fact, as a percentage of GDP, private charitable giving in India has increased 50% since 2006. Today private giving totals 0.3-0.4% of GDP in India. However, the country still lags behind when compared with the developed world. For instance, private giving in US accounted for 2.2% of GDP in 2009.

But, it’s still below the global standard
A prime reason for the disparity is that individual donations in India still constitute only 26% of all private contributions, way below the global standards. While in US individual charitable donations total as much as 75% of all private giving, in UK, it’s 60%. Moreover, the wealthiest Indians are still donating much less than (1.5-3% of annual income) their US counterparts, who contribute about 9% of their annual incomes.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles

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Tuesday, April 2, 2013

Right idea, wrong radar

Competition Commission of India has notified its norms to prevent M&As from creating monopoly like situations. But they may prove ineffective and even counterproductive in their current form by virat bahri

Chances are bright that you will not catch the usually staid Bill Gates make a politically sensitive statement. But in one of his very famous comments a few years back, he had made three of them in one go. He lampooned his own country for not being able to catch Saddam Hussein, called the EU a passing fad (doesn’t look so way off anymore!) and also exclaimed that he was sick of fascist lawsuits! Gates’ reaction was to the different lawsuits that Microsoft had to confront on either side of the Atlantic. A number of companies like Microsoft have gone through hell facing legal ire when they are deemed to have reached dominant positions in their respective industries and also misused these positions to generate supernormal returns, kill competition or exploit customers.

The Competition Commission of India (CCI) has recently taken some steps to prevent the possibility of M&As leading to monopoly-like situations in India, whether they are solemnised within or beyond its borders. The norms stipulate that post merger/acquisition entities with combined assets greater than Rs.15 billion (or > $750 million globally and at least Rs.7.5 billion in India) or belonging to a corporate group with turnovers greater than Rs.60 billion in India (or >$3 billion globally & at least Rs.7.5 billion in India) will have to notify. Similarly, combinations with turnovers greater than Rs.45 billion in India (or > $2.25 billion globally & at least Rs.22.5 billion in India) or belonging to groups with turnovers over Rs.180 billion in India (or >9 billion globally & at least Rs.22.5 billion in India) will have to seek approval. Industry people hail it as a great decision for a country that is seeing increasing M&A activity. But will these norms be effective enough? Or can they prove counterproductive instead?

As per data from PwC, M&A deals in India reached $36.15 billion in 2010, a growth of 85.67% yoy. The more interesting part is that $10.7 billion from the value is accounted for by the Bharti-Zain deal, one of the key strategic bases for which was the unparalleled extent of competition in the Indian telecom market! A point that needs to be underscored is that when you are discussing the entire concept of past and current monopolies in the Indian market, a number of names would actually come up from the public sector itself like Coal India, SAIL (when you consider captive ore mines) NMDC, BHEL, or Indian Railways!


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles
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Monday, March 18, 2013

Increase in productivity and efficiency

Hindustan Zinc has gained from consistent increase in productivity and efficiency, besides favourable market conditions.

Of course, the major factor going for the company is the resurgence in Zinc demand globally, which has a lot to do with the resurgence in iron and steel sector, where Zinc finds its major application. The future is expected to be better with the supply surplus that exists coming down to 233,000 tonnes in 2011 and 161,000 tonnes in 2012, according to ILZSG (International Lead & Zinc Study Group). Surplus in lead will grow on the other hand, to 9.64 million tones. However, HZL would feel more secure due to its dominating position in India, where the demand potential for both metals is far greater than supply. Demand for lead is expected to grow by 10-15% in 2010-11 due to the resurgence in the automotive sector, and that isn’t going to wane any time soon. Even in the case of zinc, as India builds its infrastructure and ramps up on steel consumption in particular, zinc will automatically get a boost. India’s per capita zinc consumption is at just 0.4kg compared with the global average of 1.8 kg.

Another interesting aspect of zinc-lead production is silver, which is a by product that can prove to be a big cash spinner for the company in the coming years. Akhilesh in fact contends that they could convert it into a separate profit centre. By 2013, they expect to take up silver production to 500 tonnes. According to the US Geologial Survey, economic silver below the earth’s surface is not expected to last for more than 9-10 years. But players like HZL are expected to continue to benefit, since they can produce it as a byproduct. Therefore, silver is being picked up as a metal with an excellent investment potential as well as for diverse industrial uses.

All in all, there is very little going against HZL at the moment, which had a huge ash balance of Rs.124.13 billion by the end of September. Global shocks of the kind that it faced during the recession cannot be ruled out altogether, since they would affect it even more as it gets increasingly globalised. Otherwise, the current position that HZL is in vis-à-vis its environment should ensure that it stays on the high growth path for some time to come, particularly on the back of growing end product demand. That should help it ride over raw material and production issues of the kind that it has faced so far in 2010.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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Wednesday, February 6, 2013

K. R. KIM

The Vice Chairman & CEO, Videocon Industries (formerly LG India head), takes a break from company matters and talks to B&E’s Deputy Editor Virat Bahri, on his unique perspectives of how India and Korea can help each other achieve their objectives

B&E: You have been in India for the past 12 years. What is your view of the Indian economy’s transition and also about its future?
KRK: For the next 30 years, India and China will play a big role; be it politically or economically. The challenge for China in the next 30 years will be how they can improve the political situation and how they can convert to a democratic country in a gradual and stable way and in a peaceful manner. For India, the challenge in the next 30 years will be how India can maintain a 8-9% GDP growth to get out of poverty. Which is easier? India’s challenge to grow continuously by 8-9% will be easier than China’s democratic transition. Political change is much more difficult. India did a good job post independence to maintain a democratic system; not a 100% perfect system, but who is perfect? India has a good foundation in its political system. Now it is the time for India to grow.

B&E: What are the similarities and differences between India and Korea as markets?
KRK: All three countries (China, Korea and Japan) are built on military culture and discipline. Even the weather is very different. Winter is very cold in Korea. Climate also changes the people’s mindset. India is a semi-tropical area where most areas have very less winter. It means an easy life; and is good for philosophy! On the other hand, the key similarity is the mindset of being Asian. In Asian countries, basic philosophy is Buddhism. Hinduism and Buddhism are 90% similar. So philosophically they have a common ground.

B&E: India and Korea have signed a historic free trade agreement. How can the two countries leverage on each other’s strengths?
KRK: If you see Korea and India, what Korea did in the last 30 years was hard culture development – manufacturing, discipline, product oriented. Korea improved a lot over the last 30 years. During the Korean war, Korea received aid from India. After that, Korea developed economically and did a good job of developing what I call hard culture. India developed soft culture in the last 30 years – democracy, software, content oriented. Now it’s time for Korea to inculcate India’s soft culture and India has to inculcate more of Korea’s hard culture. We cannot classify everything in that way, but this is to simplify the discussion. Without soft culture, Korea cannot become a high income country. Korea wants to go to around $40,000 income levels. But without improving the soft culture including the political situation and having flexible mindsets and software and content orientation, this cannot happen.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Tuesday, January 8, 2013

“Moving to digital will actually help in growth”

A. K. Ghosh of JK Paper expresses optimism on the demand for digital printing and anytime anywhere printing in the internet age

Despite all the efforts towards branding of paper, to what extent can we create differentiation in this industry?
Product differentiation in paper industry is a complex process. While customers would not mind paying a price premium for better quality and a well known brand, there is a limit to which this can be taken advantage of. Even while demanding a high quality product, they would want ‘value for money’. It is therefore not enough to sell a good quality brand. This has to now be supplemented with high level of service delivery. Product differentiation would also mean understanding the needs and aspirations of the customers and thus providing them with technical solutions to their requirements through constant engagement.

What is the international scenario regarding the attempts to give a brand identity to commodity like paper? How well do Indian manufacturers fare vis-à-vis their international counterparts?
Brand identity to paper globally has started much earlier than in India. This is because many top paper companies are multinationals and sell their paper in many countries. Indian manufacturers fare well in terms of branding efforts; but given the relatively small size of operations and the size of the market that we operate in, we are constrained by the amount we can spend on marketing and branding. This constraint should reduce as we go forward due to the growing market and our operations.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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Sunday, November 25, 2012

Bad drivers? Worse buyers!

B&E’s Savreen Gadhoke argues why manufacturing cars for the fairer sex does not make for a good business plan in India... [and the lady is serious!]

If women are bad drivers, men are worse! But statistically, that sweet correlation – however much I personally might want to the contrary – does not apply to car purchases. And probably, this is the reason why many women, especially in India, are not seen driving cars [Of course metros are an exception; though even in these areas, purchase patterns of women are no relative matches to those of men]. As a matter of fact, there aren’t many cars that are manufactured exclusively for women in India. And if you’re a car manufacturer, about to tempestuously experiment with a plan for the fairer sex, perish the thought Jim, women in India more often than not take the back seat!

Although Henry Ford was (in)famously focused on keeping women in the passenger seat, Ford had in reality started marketing cars for women way back in 1912. But that was the US. Graeme Dawson, Australia’s top market historian, shows how way back in 1968, women for the first time outnumbered men amongst new applicants for Victorian drivers’ licenses. But that was Australia. A 2006 Chinese survey showed how “Chinese women car buyers have grown to a record 32% of the total buyers,” with the top ten models being bought by them being “Chery QQ, Honda Fit, Nissan Tiida, Chevrolet Spark, VW Polo, Suzuki Swift, Chevrolet Sail, Peugeot 206, Audi A4, FAW Vizi (the redesigned model of Toyota Yaris).” But then, that’s China! Despite driving by woman being banned in Saudi Arabia, government owned Saudi Aramco’s last year’s research shows how “car ownership among Saudi women climbed to 60 percent between 2003 and 2006!” You got it! That’s Saudi Arabia!


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.

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Tuesday, October 30, 2012

INDIA: INFANT MORTALITY

India’s infant mortality rates continue to be shockingly high

Most surprisingly, the diseases that kill these children are curable and in fact, easily treatable. The real killers are inadequate healthcare services and lack of awareness in poor parents on how they can keep their children safe from such diseases. Public healthcare infrastructure falls way short, and private health services are still exorbitantly expensive. Health insurance could be a welcome solution, but there are significant caveats involved.

Just about 8% of the Indian population is covered by government health insurance schemes (and that’s 62 years after independence) and just 0.5% by private health insurers. Only 4-5% people are voluntarily taking up health insurance in India (as per IRDA); which means that a massive 95% is either unaware of the existence of such a cover or not sensitised enough to its true benefits. Due to these multiple issues saving our children continues to be a mammoth challenge, which the government and private companies have to meet together.

Source : IIPM Editorial, 2012. An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
 
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Sunday, October 28, 2012

JASWANT’S JINNAH JEHAD

 God knows how many pundits and their barely concealed benefactors would have passed judgments on the issue. Frankly, as I write this, I haven’t read even one chapter of the book, nor have I done Google search to steal a few phrases, paraphrase or rephrase them and pass them on as words of wisdom. I have just seen a few snatches on TV and couldn’t but immediately think what if top BJP leaders go on 'Sach Ka Saamna' on this issue? I also saw a tearful Jaswant Singh describing how his book on Jinnah has transformed him from Hanuman to Ravana (Dr. Karunanidhi of Tamil Nadu would surely object to the analogy). And then I faced the simple and stark question: Is all this hysteria not related to the persistent failure of the political class, the ivory tower academics and the ideologues to honestly deal with the question of Muslims in India? Or, for that matter, the world to deal honestly with the “Muslim” issue? Or to tackle the “delicate” issue of minorities across societies?

If honest efforts had been made, the following would not have happened: The French President Nicolas Sarkozy would not have denounced the veil; a swimming club in France would not have prohibited a woman from using a more modest bikini; half of India would not have forgotten about swine flu and spent hours debating whether Shah Rukh Khan was humiliated by a racist immigration officer in America because he is a Muslim; American President Barack Obama would not have been forced to call for a beer summit to settle a hugely controversial racial issue.

But it is really India that one thinks about at the moment. If you ask yourself honestly and get honest answers, they will be one of the three written below: Sure people like Jinnah demanded partition and a separate homeland for Muslims; but who cares about all that when India is an exciting place to be in; Most Muslims did not follow Jinnah to Pakistan, but you know – though my best friends are Muslims – and think that there is something wrong out there with so many of them becoming terrorists; Or of course, Muslims are a clear and present danger to the ‘Indian Civilisation’.

I know, if you are honest to yourself, you will fall in one of the later two categories. And if you are in the third one, there is no point in having a dialogue with you in any case. But a dialogue the rest of us must have. More importantly, we Indians must rescue the debate from the crass opportunism of politics and the even worse opportunism of perversion in the garb of ideology. The Indian Mujahideen farce is just one example.

 Read more........

Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Thursday, October 18, 2012

The venture was flawed from the beginning in more ways than one

And now, Reliance Retail is mulling over tying up with an international partner back-end support. Had Mukesh gone in for an international tie-up earlier, this situation would not have risen as outsourcing supply chain management is more cost effective and feasible, especially in India. Then came the news that Reliance is planning to shut down 40 of its non-performing stores and rationalising its total retail space of around 4.2 million sq. feet. Reliance Retail also axed almost 600 support jobs to manage costs.

Experts claim that the very basic structure of the company is debilitated. In the first go, Ambani invited negative publicity by removing the middlemen from the value chain. Experts also maintain that most of Reliance Retail’s ventures like Reliance Mart, Reliance Super, et al, were launched in a jiffy, without any foolproof plan of action. Floating so many retail ventures led to disharmony between business heads and each one started competing with one another, thereby leading to the fall of the parent company. Keeping up with the tradition of Reliance as being the best employer, Ambani gave huge salaries, which were incommensurate with the returns. Furthermore, as a retail consultant who worked closely with Reliance Retail said, “When the Store Operations vertical is not at the center of a retail company, the venture is doomed.”

Doomed may be too extreme a word. But surely the company needs. For even a venture with the Reliance trademark can fall apart if it’s not planned and executed properly.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Friday, October 12, 2012

FOREIGN ASSISTANCE: UNUTILISATION FEES

Indian politicians make us proud again; we pay for unused moneys

The biggest chunk of this unutilised foreign aid (about 37%) was meant for infrastructure development like the urban road development. This fact is even more evident after scrutinising of the performance of the incumbent UPA government when it comes to construction of roads. Agriculture, environment & forestry, power & sanitation account for a further 30% of the same unutilised foreign aid. Ergo, the underutilised foreign assistance seems ironic given India’s present economic condition (India’s forex reserves have come down by $60 billion in 2007-08. Even the fiscal deficit in the current fiscal has been about 6% of GDP against the planned 2.5%; and of course, the GDP’s paining too). India needs huge investments and in quick time. But lousy government attitude is reflected at both the central and state levels, especially in the ‘planned’ lack of cooperation between them. Paying a penalty during these times should be considered nothing less than a criminal offence. Er, why’re we not surprised that no politician is worried about being accused of a criminal offence?


Source : IIPM Editorial, 2012.

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