IIPM Editorial

Saturday, February 9, 2013

Back to the drawing boards

DTH players were on a dream flight in India so far, but the delay in rollout of Phase II of CAS has dampened expectations. Vareen Gadhoke Ray & Surbhi Chawla discuss the upcoming trends and how DTH players can make them count

When Direct-to-Home (DTH) first came along, it brought the promise of streamlining the highly fragmented pay-TV market in the country, which had hitherto been the stranglehold of local cable operators (LCOs). All that the players really had to do was conquer, which they continue to do, through mud-slinging, comparative advertising and even some cheap ground level tactics. DTH was a very welcome platform for broadcasters and media houses, which were fighting these LCOs on the grounds that they were not declaring their total subscriber base. The launch of the first phase of Conditional Access System (CAS) brought more transparency, thereby aiding higher yield in subscription revenues. But the launch of the second phase of DTH, which was to make CAS mandatory in more areas of the country, has been delayed quite unexpectedly. This has stymied their dream run, and slowed down their onward march quite considerably. In such a scenario, what does the future portend for these players in India?

Direct to Hell or Heaven

The future of pay-TV in India is being driven by media owners and distributors, which are expanding market share with an eye on profits, rather than at the expense of profits. The major concern for this sector was that at a very nascent stage, seven major players (Dish TV, Tata Sky, BIG TV, Airtel Digital, Sun Direct, DD Direct and the newly launched Videocon d2h) along with organised CAS operators (like Hathaway and Sify) were slugging it out to get the maximum share of this growing pie. As a result, the first phase of growth saw the basic DTH box being offered at a subsidy, and at times, even virtually free of cost to catch hold of the early adopters and get them to experience this new wave of technology. The plus point of this can be seen from the fact that the Indian pay-TV sector generated sales to the tune of $6.5 billion for financial year ending March 2010 [Media Partners Asia (MPA)].

Thanks to the continously intensifying tussle among the players, the sector is facing the same fate as the telecom operators. DTH players too are unable to garner as much in ARPUs. The tempering of their enthusiasm due to delay in Phase 2 rollout make it worse. EBITDA profits for the sector reached $800 million for the financial year ending March 2010, implying a modest profit margin of around 13%.

Read more....

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Friday, February 8, 2013

Satisfied with the performance of Sushma Swaraj?

The current Leader of the Opposition in the Lok Sabha has failed to take the Congress to task in the Lower House. Factionalism within the party as well as a lack of charisma on part of the tallest leaders have made Swaraj's task harder. She will need to make a deep impression if the BJP's image and future poll prospects are to brighten.

Read more....

Wednesday, February 6, 2013

Has Barack Obama shot himself?

When Obama took office in 2009, the projected US 10-year deficits stood at $8 trillion. In one year, the figure’s jumped to $16.2 trillion. Is Obama on a fatal track?

Is Uncle Sam attempting a fiscal suicide? Or is US pushing itself to redefine the very levels of sanity that a budget can present? Far-fetched thoughts, but quite possible too! These are precisely the questions that several economists are asking today, keeping in mind the federal budget for FY2011 announced on February 1, 2010, by the US President Barack Obama. So what makes this budgetary document read more like a financial exotica menu? One element, and one only – it foresees colossal budgetary deficits till 2020! What more? The pandemic starts this very fiscal, with budgetary estimates pegging the federal deficit for FY2010 at a mind boggling $1.6 trillion, adding to Uncle Sam’s already gigantic heap of debts. This figure of $1.6 trillion is way above the ‘combined’ budgets of advanced European countries like Switzerland, Belgium & Norway put together. And as far as US is concerned, the danger is that this shortfall represents almost 10.6% of its total annual output – the highest levels the nation has reached since World War II.

In a communiqué to B&E, sources at the US Department of the Treasury accept that, “Deficit trends of this level are not sustainable. Beginning to correct them will require cutting deficits enough to stabilise the debt-to-GDP ratio at a manageable level so it is no longer rising.” Several economists have already raised the danger flag of unsustainable deficits. They feel that US can only sustain a deficit of 3% of total output if it is to remain healthy. However, considering the proposed budgetary allocations made by Obama, the projected deficits don’t seem to fall any lower than 3.6% over the next 10 years! This grim forecast certainly adds to the challenges faced by Obama, who is not only emphasising a message of fiscal discipline, but is also seeking stimulus measures to boost the struggling economy in the short term. In fact, on the day President Obama took charge, the budget deficit (for 2009) stood at $1.3 trillion (9.2% of GDP) and the projected deficits for the following 10 years were $8 trillion. Today, the total deficit for the next decade (till 2020) stands at $16.2 trillion – 100% more than the figure forecasted last year. Can one man achieve so much in so short a time? As per experts, the Bush Administration’s decision to enact large tax cuts and a prescription drug bill will add up to $5.8 trillion to the total deficit over the next 10 years. Then there is the administration’s spending on safety net programmes, including the controversial TARP, which will increase deficit figures by about $2.4 trillion by 2020.

Read more......

Monday, February 4, 2013

Let’s test your endurance...

The intention is good, but with their own policy differences, can the Euro zone countries successfully execute the stress test?

What works for one might not work for another! Policy makers at the European Union seem to have simply ignored this age-old saying. They have not only instructed the Committee of European Bank Supervisors to organise a stress test on the European banking system, but are also planning to keep the exercise similar to the ones recently completed in the US and UK. And, no wonder, the decision seems to be in a hurry!

Raison d’être: European banks are under immense pressure. As per the European Central Bank (ECB), lenders in the Euro zone will have to write off $283 billion in the next two years as loans to corporations and households go bad. In fact, Moody’s has just slashed the credit ratings of 25 Spanish banks, arguing that the speed and severity of Spain’s recession will inevitably hit their balance sheets. And that’s the case with almost all member states. “Policy-makers and market participants will have to be alert in the period ahead. The credit cycle has not yet reached a trough,” says the latest Financial Stability Report from ECB.

Moreover, there has been no clear policy initiative till now to force European banks to raise their capital cushions, despite the fact that the region has the biggest problem with toxic assets. According to the International Monetary Fund (IMF), the global banking system holds $2.8 trillion in toxic assets, with a little over half – $1.426 trillion – on the books of Western European banks, while US banks account for only $1.05 trillion. In fact, IMF estimates that it would take a fresh $975 billion to recapitalise Western European banks to levels that prevailed in the mid-1990s, compared to $500 billion for the US banks.

Read more.....

Friday, February 1, 2013

It’s the smaller players that are bearing the brunt

While the big player (read Indian government) is playing the ‘bore-me-to-death wait and watch’ game in the tightly regulated domestic food processing industry, it’s the smaller players that are bearing the brunt, for not being able to relish the fruits of their efforts. angshuman paul and romsha singh write a cheesy note...

Though, big corporate houses have enhanced their competitiveness in this sector, yet only a few have actually started the process of backward integration to venture into the arena of food processing. In fact, many of them still don’t have any inclination towards setting up a sturdy base with adequate logistics and infrastructure, a necessary condition for the healthy growth and development of the Indian food-processing industry. What’s worse, even players like the Mittals, Godrej, Ambanis and several of their ilks, who are currently feasting on the sizzling hot opportunities offered by the Rs.3.6 trillion Indian food & beverage industry (which is swathed by the brawny recession proof raincoat), have shown no intentions to pay adequate attention to the global market, unless they have a dependable strategic alliance with some global behemoth. For instance, Mahindra Shubhlabh Services Ltd. (MSSL), the agri-business arm of Mahindra & Mahindra Ltd. has tied up with South Africa’s ‘Capespan’ to export branded fruits (under the MSSL brand name) to South Africa. So, what is really scaring the soul out of players in the Indian food processing industry? The truth is that players in India and overseas look at India as simply a forest of raw materials and agricultural produce and not as an industrial hub for manufacturing as P. L. Kaul, President, All India Food Processor’s Association (AIFPA) regrettingly adds, “Even a multinational like Coca-Cola is also looking at India as merely a sourcing hub for global players, and is in no mood to set up any processing unit here...” Therefore today, when it comes to deriving full-fledged opportunities in the country, the game is simply left to the SMEs, truly depriving the industry of the much-needed investments!

Read more......

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.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Monday, January 28, 2013

BUFFET NAMES POTENTIAL SUCCESSOR

Surely, every person even slightly informed about the world’s richest man knows that succession planning has always been questioned critically when it comes to Buffett. Realising that he himself goes against many imperative corporate governance policies (separation of ownership from management, for one), Buffett too cleverly chooses to keep the beach bikini on, revealing much frivolous skin, but hiding the most essential parts. “There are four potential successors to me within the company, but I would never discuss their names,” is what he gloatingly told Daily Telegraph some years back, “I have got this letter which actually goes out the day I die. And it says: Yesterday, I died. That’s bad news for me, but it’s not bad news for you, the shareholders of Berkshire...” Yeah, right Warren! And we all can then go meet up with Monica Belluci!

But for argument’s sake, let’s move to the realm of logic. At present, Ajit heads Berkshire’s Reinsurance business, which is only the ‘third-largest’ amongst Buffett’s insurance empire – indeed a small fragment of the vast Berkshire empire. And if you considered that insurance segment contributes to more than 50% of Berkshire’s annual revenues in 2008, we would rather have Tony Nicely, CEO of GEICO (Berkshire’s largest insurance player) or Joseph Brandon’s successor at General Re (the second largest in the segment) as the more ‘logical’ choice. As far as leadership and manpower count is concerned, Ajit only has 31 people in his company. For records, that is just a negligible 0.01% of the total count of manpower at Berkshire Hathaway! Can a person with that little ‘leadership’ experience head a group with more than 300,000 people?

Alright, if we play to the grandstand – as Warren has mastered over the years – and simply choose Ajit because “Warren has mentioned him in his letter,” then allow the blundering me to inform you, Warren does that ever year. Not counting this time, Buffett had flattered Ajit 5 times in the past 13 years (in his annual letters to his shareholders)! And if I go by the same logic, then the world would have had 21 prospective Berkshire CEOs since 1995. Wonder how? Besides praising Jain 5 times, the grandiose Buffett has praised Tony Nicely (CEO, GEICO) 9 times, Kevin Clayton (CEO, Clayton Homes) 2 times, Richard Santulli (CEO, NetJets) 3 times, Joseph Brandon (Former CEO, General Re) 2 times! If efficient succession planning policy was to be decided on the count, all is lost.

Read more....

Saturday, January 19, 2013

REVIVAL: JAPAN

Japan is distancing itself from the US and affirming its own foreign policy. Is this the start of a new political order?

It has been like that for long and this base has been playing a crucial role in furthering the American foreign policy in Asia since the Vietnam War. And thus, an otherwise subservient Japan has all along been a major helping hand. Even now, while the American assault in Afghanistan and Iraq has been going on for years, the Japanese Maritime Self Defence Force plays a very critical role in refuelling the US warships over the Indian Ocean. In fact, for long, Japan didn’t have a foreign policy truly of its own – the US, since the end of World War II, playing a major role, with critics even blaming the Japanese government for literally outsourcing foreign policy to US. In all, Boston Celtics were #1 in Japan, as was Toyota in the US.

Then what exactly has gone wrong in the American behaviour towards Japan? The answer is, the Japanese behaviour towards America – vindicated, rather flamed further by the current lateral shifts in the Japanese political formations with the meteoric ascent of the Democratic Party of Japan (DPJ), led by Yukio Hatoyama, into the helm of affairs. DPJ gave a body blow to the Liberal Democratic Party which had almost become synonymous with Japanese government in the last half a century. The victory of the DPJ should not be seen as a mere vote against incumbency but more as a sort of referendum against the US dominance in Japan’s foreign policy and military affairs. In fact, there is much pressure on the newly elected Hatoyama government to scrap several deals with US, the foremost among them being the Guam Treaty under which US expects Japan to spend nearly $6 billion for relocation of some of the US bases in Futenma in Okinawa to the American island of Guam. This, in itself, is part of a $26 billion defence package for the base realignment plan which also includes an estimated expenditure by Japan to the tune of $11 billion for the construction of a new US Marines base in Okinawa and an expenditure of $9 billion for the creation of a ballistic missile defence system.

Gavan McCormack writes in DMZ Hawai, “As the Japanese economy reeled under the shock of its greatest crisis in 60 years, these were staggering sums. It was once said, of George W. Bush, that he was inclined to think of Japan as ‘just some ATM machine’ for which a pin number was not needed. Under Obama, too, that relationship seemed not to change.”

Read more.....

Friday, January 18, 2013

How special is your speciality?

Specialised MBAs are now coming up in various sectors. B&E meets up with specialists within these sectors to find out whether such niche mbas are useful in the long term...

The specialised MBA tag is getting significantly wider in scope and appeal. While we had specialisation streams available in areas like agriculture since many years (IIM-A being a leading example) and in computers too since the past two decades, recent MBA specialisation steams have included eclectic areas like production management (for example, Indian Institute of Production Management’s School of Management; not included in our current survey), petroleum management, hospital management and more; in fact, we even have specialisations in the football and wine industry now (not in India though)! But do they work or not?

When MBA institutes, as well as the students who join them, invest their time and money in specialised MBA courses, they have an agenda in mind. The students want to establish a unique positioning, with a specific target audience in mind; i.e. the sector in question. Sometimes, such a unique positioning is actually driven by an illusory impression created through a short term growth in the sector in question (for example, MBA with retail specialisation); a growth that may or may not last over the long term. Sometimes, the MBA specialisation in itself is created by teaching only a mere handful of subjects – in one university-affiliated institute that we went to, the specialisation course in retail management was restricted to simply three elective subjects. To be fair, we did not deeply investigate the depth that each of these courses had – perhaps they did too – but what was clear was that even students aren’t analysing more important factors like contents, academic orientation and industry interface in the specialisation area, before taking up the course.

Moreover, unless a student is crystal-clear about his/her industry preferences, this could be akin to playing a major career gamble, just based on the hype that the sector generates.

Read more.....

Thursday, January 17, 2013

A hot cuppa fashion!

Here’s the latest brewing in ethical fashion...

On last count, there were more than 600 textiles being sustainably produced. Corn, soya, hemp, wood pulp, stinging nettles, recycled plastic bottles, pina, bamboo and numerous other materials are serving as resources for designers to create innovative, fashionable clothes. The latest addition to the list of eco-friendly fabrics is one made out of coffee grounds. Conceived by Taiwanese Singtex Industrial Company, is it of little wonder that the company’s general manager came up with the idea of using the coffee grounds, that would otherwise only contribute to landfills, into a fabric as he sat sipping a hot cup of coffee at Starbucks! Apart from taking care of Starbucks’ waste grounds, the same company is also making sportswear out of recycled plastic bottles, a practice first started by California-based Patagonia, which claims to have utilised 92 million bottles in this fashion! There is an army of people trying to make fashion sustainable, and like any other country, India too stands to benefit by switching to ethically sound fashion, in fact, maybe more so than others.

The textile industry consumes maximum water after agriculture; about 8000 chemicals go into turning raw material into textiles and almost 25% of the world’s pesticides are used to grow cotton alone. While India is among the top cotton producers in the world, it is also among the leaders in growing organic cotton. “Fashion is now much more concerned with the environment… In fact, it is more concerned now with the well being of the people who make the clothing,” says Susan Waters, founder of Cotton Roots. Cotton Roots is into fair-trade and organic corporate clothing, and has found its solution for natural dyes in India. Using natural ingredients like coffee, tea, pomegranate, henna and onions, Cotton Roots is creating ethically sound aprons, T-shirts, towels, tea towels and shirts. “The chemical dying process uses heavy metals, creating toxic waste and using huge quantities of precious water.

Read more......

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.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Wednesday, January 16, 2013

Breaking out of routine!

Breaking away from a set pattern of life has been a dream for most, but these days many are living that dream too!

On a summer evening while waiting for a friend at one of the busy McDonalds restaurants in Delhi, I was approached by a German couple (in their late 20s) looking for the cheapest way to reach Shimla. Guiding one to Shimla from Delhi isn’t as effortless as guiding one to the neighbourhood grocery store, so while I took pains to explain the cheapest options available, they joined me at my table… As I chatted up and asked them (Steve & Natalie) what they were doing in India, Steve promptly replied, “I guess you could call it a gap year for travelling. We have just come back from Kashmir and would be leaving for Iran in a few days. We thought of going across Pakistan, but it would probably be a little unwise incase we bump into Osama bin Laden!” We burst out laughing but somewhere inside I was enthralled by their spunk and nerve to beat the stereotypes of life. In order to support their lifestyle financially, Steve explained, “Last year we were in Australia, and there we did a few farm jobs along with travelling. They are quite easy to get. We also did some bar work and restaurant work. We put in lots of hours to save enough money to travel in Asia for eight months. To get a work permit, one can apply online. Some people get it through an agency. The agency can also sort out a bank account and a tax file number. But agencies charge a fee, so some people (like us) just do it themselves.”

While Steve is a freelance writer and Natalie has taken a break before joining her regular education, upon research one realises that, there are many who take a sabbatical (a gap year, though usually longer than a year) from regular work or from education to pursue travel, international voluntary community work, or just an international working holiday!

Read more......