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

Walmart’s Wait & Watch Game

Wal-Mart is in no Hurry to up The Ante in India. The Retailer is Expanding and Strengthening its Wholesale Business, Hoping to Leverage those Strengths in The Future when Multi-Brand retail opens up.

These are interesting times for organised retail in India. Even more so for Wal-Mart, the world’s largest retailer and the largest listed company by revenue (roughly $422 billion in sales last year). The Bentonville, Arkansas-based Wal-Mart knows that India - which it entered in 2007 through a 50:50 joint venture with Bharti Enterprises - is critical to its ambition to further grow its lucrative global business. Already 26% of the company’s revenue comes from outside the US. Wal-Mart’s international business clocked more than $100 billion in revenue last year, expanding by more than 80% in the last five years.

Indubitably, India is a big pond for big fish Wal-Mart. But there’s a big catch. Wal-Mart’s strategy hasn’t really worked well outside the North and South American markets of Mexico, Brazil and Canada. In most major Asian and European markets like Germany, South Korea, Japan and China, Wal-Mart hasn’t exactly lived up to its formidable reputation as the world’s mightiest and meanest retailer. After entering Germany in 1997 through acquisitions, it exited the market in a jiffy in 2006 (less than a decade), owing to intense competition from the likes of Metro AG. Clearly, its brassy American ways failed to find favour with the Germans. A more or less similar set of circumstances forced it to close the doors on South Korea in 2006 (again, in less than a decade). In Japan, too, Wal-Mart has had a spotty performance so far, failing to live up to any lofty expectations. Its ELDP (Every day low price) scheme is not finding favour with the Japanese, who are ready to pay higher prices for quality. The story in China is not so happy either where its profits and sales are reportedly declining, creating survival issues for the company.

These developments have certainly dented Wal-Mart’s confidence, forcing a change in its strategy. The company is more cautious now about entering new markets. It has learnt its hard lessons. The aggressiveness - entering new markets by buying out local competition (like in Germany and South Korea) - is now tempered with a new-found mellowness and it now sees virtue in the wait-and-watch approach to new markets before taking the plunge.


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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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, April 1, 2013

“Despite a Saturated UAE Market, our Subscriber Base Grew”

With 135 million mobile subscribers, UAE’s Emirates Telecom Corp. (Etisalat), is a $9 billion-a-year topline earning name. Ahmed Bin Ali, Group Sr. VP & Global Spokesperson for Etisalat, talks to B&E’s steven philip warner, about his company’s fight in a saturated domestic market, its 4G dreams, multi-billion capex plans and why the company scrapped a $122 million plan to bid for Syria’s third mobile licence.

B&E: Emirates Telecommunications Corporation, Etisalat, currently operates in 18 countries across Asia, the Middle East and Africa. There is speculation that you are looking to expand into new geographies outside the continents you are currently operating in. Is that true?
Ahmed Bin Ali (ABA): No. Actually, for the present, Etisalat is focussed on expanding strategically within our core markets of Asia, the Middle East and Africa. You need to understand that we are in a position where we have already developed a significant footprint and established a presence in the most active and fastest growing markets in these regions. Our operations in these regions are growing strongly, and we are quite a satisfied company with our current continents where we operate in, for now.

B&E: So you say, you sit very comfortable in terms of geographies. Since 2006, Etisalat has invested close to $5.74 billion as capex in these markets – a larger chunk of which was in overseas markets, outside the UAE. But there are some danger signs when it comes to your payoffs. As compared to the previous year, your net profit actually fell by 13.6% in FY2010. Do we take this as a sign of some uncertainty in your international investment strategy?
ABA: In FY2010, our international operations increased their contribution to our Group’s revenues to 23% from 16% in 2009, and profits to 7% from less than 1% the year before. Given the relative young age of our operations, these are good indicators that our investment strategy is on track. Today, we continue to have a strong balance sheet and are rated amongst the most creditworthy operators in the world by global credit rating agencies. This means we even have the ability to engage in acquisitions.

B&E: In March this year, the company withdrew plans to bid for Syria’s third mobile licence. The company said that the terms of the deal did not offer sufficient value for its shareholders. Could you please elaborate?
ABA: True. Earlier this year, Etisalat decided not to proceed and compete in the Syrian mobile bid, despite having earlier qualified to participate in the process. Etisalat conducted an extensive and careful study alongside financial advisors, legal experts and technicians and determined that the terms and conditions of the bid would not enable Etisalat to achieve its objectives regarding the technology and value we wished to bring to the market. We worked hard to develop this opportunity, but we had hoped the terms and conditions would have been more attractive.


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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Thursday, March 28, 2013

"Nato's Inevitable War" An Article by Fidel Castro

Before The Western Allied forces Launched Air Strikes on Libya, Fidel Castro had Predicted that NATO would Wage a War against Col. Muammar Gaddafi. Here is what he Communicated to Planman Media

In contrast with what is happening in Egypt and Tunisia, Libya occupies the first spot on the Human Development Index for Africa and it has the highest life expectancy in the continent. Education and health receive special attention from the State. The cultural level of its population is without a doubt the highest. Its problems are of a different sort. The population wasn’t lacking food and essential social services. The country needed an abundant foreign labour force to carry out ambitious plans for production and social development. For that reason, it provided jobs for hundreds of thousands of workers from Egypt, Tunisia, China and other countries. It had enormous income and reserves in convertible currencies deposited in the banks of the wealthy countries, from which Libya acquired consumer goods and even sophisticated weapons that were supplied exactly by the same countries that today want to invade it in the name of human rights.

The colossal campaign of lies, unleashed by the mass media, resulted in great confusion in world public opinion. Some time will go by before we can reconstruct what has really happened in Libya and separate the true facts from the false ones that have been spread.

Without any doubt, the faces of the young people who were protesting in Benghazi – men and women wearing the veil or without the veil – were expressing genuine indignation. One is able to see the influence that the tribal component still exercises on that Arab country, despite the Muslim faith that 95% of its population sincerely shares.

Imperialism and NATO – seriously concerned by the revolutionary wave unleashed in the Arab world, where a large part of the oil is generated that sustains the consumer economy of the developed countries – could not help but take advantage of the internal conflict arising in Libya so that they could promote military intervention. The statements made by the US administration right from the first instant were categorical in that sense.

But the US could not drag China and Russia to support the approval by the Security Council for a military intervention in Libya, even though it managed to obtain however, in the Human Rights Council, approval of the objectives it was seeking at that moment. With regard to a military intervention, the Secretary of State stated in words that admit not the slightest doubt: “No option is being ruled out”.

The real fact is that Libya is now wrapped up in a civil war, as we had foreseen, and the UN could do nothing to avoid it, other than its own Secretary General sprinkling the fire with a good dose of fuel.

Why is the effort to present the rebels as prominent members of society demanding bombing by the US and NATO in order to kill Libyans? Some day, we shall know the truth, through persons such as the political science professor from the University of Benghazi who, with such eloquence, tells of the terrible experience that killed [many], destroyed homes, left millions of persons without jobs and forced them to emigrate.


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 25, 2013

One Good turn Deserves Another

When The Moment of truth arrives, Policyholders are still made to run from Pillar to Post Seeking Settlement of their Insurance Claims, While it has become more of a Customary Practice for The Insurance companies to reject Claims on grounds Incomprehensible to Policyholders.

Honesty is the best policy, and sure enough, there are a number of disgruntled people in India who feel that their insurance policies have offered them anything but that!

Consider the case: W.P No 1521/08 @ Hazera Khatun Vs NIC & Ors in the Guwahati High Court, wherein the petitioner challenged the action of National Insurance Co. Ltd. of repudiating her claim upon the death of her husband, stated to be covered under the Group Personal Insurance Policy taken by Golden Multi Services Club Ltd. from NIC, insuring all members of the club. NIC reasoned that the claim was repudiated on the ground that it was not submitted within the stipulated time period of 90 days. The Guwahati High Court in a landmark decision on March 2, 2010 quashed the repudiation of the insurer and directed NIC to make payments due to the petitioner, Hazera Khatun.

The repudiation of the claim and the legal battle that resulted in this instance is not a one of its kind happening. If the statistics available are to be relied on, then in FY’10 alone, approximately 7% complaints lodged with the grievance cell of the insurance regulator, Insurance Regulatory & Development Authority (IRDA), related to either non-payment of claims, repudiation of claims or incorrect claim amounts. Surprisingly, the industry says that as far as individual death claims are concerned for the year 2009-10, it has settled 95.24% of the cases and in group death claims, the settlement is 98.9%. And herein lies the greater irony of tall claims pertaining to customer centricity and service delivery.

When a policyholder, the insured, enters into a contract with an insurer, it is primarily with an anticipation that eventually when the time for settling of claims comes he/she or his/her family members would not face any problem. This, in simple terms, explains the very concept of Uberrima fidei or utmost good faith – the guiding principle of contracts in the insurance business.

To put things in perspective, the World Insurance Report 2011 states that globally, the claims department spends over $336 billion every year in managing and settling claims. This implies that for every dollar collected in premiums, insurers on an average spend 61 cents on claim settlement. While claim ratios are rising fast, it doesn’t negate the importance of balancing customer satisfaction with improving operational efficiency.


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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Put them Down Again, Shall We?

A number of Dalit Entrepreneurs have come up in India Despite Innumerable Odds. But Shamefully, Our society is still quite Reluctant to Accept them.

“Our country has stuck to ancient norms with respect to caste. Thus, a Shudra can never be a businessman or progress more than his previous generation. All Dalit businessmen that we see now are first generation businessmen who have their own [caste related] tales of struggle,” Chandrabhan Prasad, major Dalit activist, anthropologist and social reformer mirrors the thoughts of various other social commentators, while discussing the issue with B&E. Critically speaking, the metro entrepreneur might and perhaps always would rush post haste to imagine that in India, while cast issues may be prevalent in lower and labour class communities, the same possibly would not exist in business communities.

Now, if you are ‘the’ metro entrepreneur in question, and if your definition of ‘business community’ starts from multi millionaires and quasi billionaires, you may be perfectly right – as is obvious, stinking rich entrepreneurs in India can easily request Union and Chief Ministers to bend their Shylockean backs to provide timely serpentine camaraderie. But if the term ‘business community’ is defined appropriately as any entrepreneur and innovator who provides employment to even one additional person in order to progress his business, you have the fiendish cast wolves running a riot, and almost a lynch mob if you see where to see – and the Dalit business community would surely be a great starting point.

Perhaps you’ve never heard of Devanand Londhe, the director of Payod Industries, who is a manufacturer and exporter of garments exported to Japan and Korea. Or about Rajendra Gaikwad, Director, G. T. Pest Control Pvt Ltd, who is into the business of pest control export fumigation and pre-construction anti-termites. But the stories of their achievements, their struggle with casteism issues and their humble rise to prominence are inspirations for many Dalit entrepreneurs; of course, because the protagonists are themselves Dalits. From having to face open admonition by their business peers to having even banks and other government departments reject their applications, evidently because of their background, the well documented struggles of these businessmen are a mirror to the pitiful scenario of a nation that has been unable to shed away its issues that have lasted for centuries.

J. S. Fuliya, CEO, Signet Freight Export Pvt Ltd, into the business of global logistics with an yearly turnover of Rs.30 million, quite candidly shares with B&E the casteist issues he had to face in terms of education and financial discrimination. The same goes for Sushil Kumar, manufacturer and exporter of automobile parts, sheet metal, press tools components, dies & fixtures and special purpose service tools, who has an yearly turnover of Rs.250 million. Sushil laments about the debilitating behaviour of individuals and communities en masse against businessmen with Dalit backgrounds. And encouragingly, these Dalit entrepreneurs are not running away from their identity. Instead, they’re trying to be proactive in finding social solutions to the situation.


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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