IIPM Editorial

Monday, April 1, 2013

B&E This Fortnight

INTERNATIONAL
BUSINESS, ECONOMY & FINANCE
Osama Dead Bringing the 10 years worldwide efforts to hunt down Osama Bin Laden, the infamous leader of al-Qaeda, to an end, the US government in a covert military operation gunned down the most wanted fugitive on the planet. Osama’s hideout was a conspicuous, three-storied structure with high boundary walls in the Pakistani city of Abbottabad, just 61 Kms north of Islamabad. In an operation that according to the US officials was unknown to the Pakistan government, the Navy SEALS of the US military shot down Bin Laden after some resistance from him. Reportedly, Osama was hiding at the Abbottabad mansion for the last five years and the Pakistani army was unaware of his whereabouts even though Pakistan’s top military academy is within 800 yards. As the rest of the world celebrated the death of the father of terrorism, Islamic fundamental groups like the Hamas, Hezbollah and al-Tufayli have been mourning and honouring him in the Middle East where the reaction to his death has mostly been ambivalent and even indifferent. To prevent his dead body from becoming an object of deification by his supporters, he was buried in the sea. But his presence in Pakistan has obviously led to the speculation about possible connivance by Pakistani army officials regarding Bin Laden’s hideout all these years.

GM posts Q1 Profits
General Motors reported Q1 profits, which more than tripled from a year ago to $3.15 billion due to strong demand for fuel efficient vehicles. The results are all the more striking considering that GM had less than two years ago declared bankruptcy and had to be bailed out by the US federal government. This is the fifth consecutive profitable quarter for GM, which goes to show the impressive turnaround managed by the Detroit-based automaker. But, despite the company’s revenue rising to $36.2 billion from $31.2 billion last year, its shares have stalled around the $33 level due to investors’ concerns over rising gas prices and higher costs for launching and selling new cars. The company has also faced recent glitches over steering and transmission problems across its popular Chevrolet Cruze model and had to recall more than 154,000 Chevrolet Cruze cars from the huge North American market.

Sony CEO’s apology
Sony Chief Executive Officer Howard Stringer apologised to users of its PlayStation Network and Qriocity as hackers had compromised the data of more than 100 million accounts used for accessing games and music over the Internet. In a letter posted on the PlayStation Blog, Stringer also said Sony has put in place a $1 million identity theft insurance policy to cover affected users. Stringer’s comments come after he faced criticism of his leadership since Sony revealed hackers had compromised the data of more than 100 million accounts.

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)

Thursday, March 28, 2013

A No-Fly Zone for Libya

John F. Kerry, US Senator and Chairman, Senate Foreign Relations Committee, takes a view on The Implications of a no-fly zone Over Libya in The Prevailing Situation in The Country

Leaders around the world are vigorously debating the advisability of establishing a no-fly zone to stop the violence unfolding in Libya. Some cite Bosnia, where NATO took too long to protect civilian populations in the mid-1990’s, as a reason to act. Others remember Rwanda, where President Bill Clinton later expressed regret for not acting to save innocent lives. But the stakes in Libya today are more appropriately underscored by the tragedy in southern Iraq in the waning days of the Persian Gulf War twenty years ago.

As coalition forces were routing the Iraqi army in February 1991, President George H. W. Bush encouraged the Iraqi people to “take matters into their hands to force Saddam Hussein, the Dictator, to step aside.” When Iraqi Shiites, Kurds, and Marsh Arabs rebelled against Hussein, they believed that American forces would protect them against their brutal dictator’s superior firepower.

Instead, when Iraqi attacked helicopters and elite troops began butchering their own people, coalition forces were ordered to stand down. The world watched as thousands of Iraqis were slaughtered.

The situation in Libya today is not identical. Inspired by events in Tunisia and Egypt, the Libyan people rose up spontaneously against four decades of repression by Col. Muammar el-Qaddafi. Still, the specter that haunts me is the same – ordinary people facing off against an autocrat’s airpower and well-armed soldiers, counting on the free world to protect them against massacre after we have applauded and bolstered their bravery with our words.

So far, Qaddafi’s forces have relied on airpower selectively. But Qaddafi is shrewd. My fear is that he is either choosing to bleed the opposition to death, rather than invite global action with a broad massacre, or waiting for the world to prove itself unwilling to act – at which point he might well begin killing civilians in large numbers.

We cannot wait for that to happen. We need to take concrete steps now so that we are prepared to implement a no-fly zone immediately if Qaddafi starts using his airpower to kill large numbers of civilians. Diplomacy is urgently needed to build broad support for a no-fly zone.

The most important imprimatur should come madman from the United Nations (UN), where debate should begin immediately over a resolution authorising a no-fly zone. China and Russia have expressed reservations. If the Security Council fails to authorise action, those of us determined to protect Libyan civilians will face a more difficult choice should the violence escalate.

So, our diplomatic efforts must extend beyond the UN. The support of NATO and the African Union are important. To avoid the perception of NATO or the US attacking another Muslim country, the backing of the Arab world is also needed.

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Tuesday, March 12, 2013

Seven Sins by Nielsen in India

The Agency was Supposed to be among the Top Recalled Names in the Indian MR Landscape. Then Why is it being given Such a Unanimous Thumbs Down by Clients?

Where did they exactly go wrong? Well, there is no single answer to that; rather there are seven. Nielsen India has no problems in terms of recall, where it is among the top 3. Even in terms of quality of analysis, network and tools and techniques used, the research agency came out tops, being ranked at 4, 2 and 3 respectively. The trouble comes in the other factors that are so crucial for sustainability where Nielsen got a shocking thumbs down in terms of ranks, which are as follows – reliability and authenticity of data (14), cost effectiveness (15), time duration (19), transparency (14), favouritism (14), impact (17) and associations (14). The net result is that Nielsen gets the horribly unlucky rank of 13.

When you look closely at the parameters, one undercurrent that’s clearly visible is the lack of confidence in the research agency. This undercurrent was expected due to the flak that some of Nielsen’s surveys in the past have generated, but what was surprising was the degree. It would still be fresh in the minds of the industry how FMCG giants Dabur and Perfetti Van Melle India had taken up the cudgels against Nielsen for underreporting their sales numbers last year. It was also reported that they terminated the services of the agency. Dabur officials confirmed their displeasure when contacted by 4Ps B&M. In fact, another official from a research agency we contacted revealed that the list of clients exiting Nielsen’s services is not restricted to these two companies.

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Wednesday, March 6, 2013

The strategies that have worked for them in India

Gaurang Pandya, the newly appointed MD of Carrier India, reveals to B&E the strategies that have worked for them in India

B&E: But doesn’t this at times act as a hindrance to the company’s growth?

GP: You can talk about long term, short term benefits and hindrances. But a corporation like Carrier that has been in the business for almost 100 years, believes in sustainable growth. Therefore, our practices are governed by policies which are sustainable in the long run.

B&E: Which segment contributes more to your topline in India – residential or commercial?

GP: Actually both are almost at parity with each other. Further we have got the entire product range which gives us an edge over the competition. From packaged units to ducted units, from small chillers to huge chillers with a capacity of 2,500 tonnes, we can boast of almost anything when it comes to ACs. This gives us the power to cater to anyone.

B&E: Carrier has been betting big when it comes to green initiatives. What is the biggest hurdle that you come across in this area?

GP: No doubt there is a lot of work going on in this field, but the problem is that we are not the only manufacturer involved in such initiatives. There are others too that have been participating in such drives. Moreover, there is a huge cost involved in it. But we believe that if you move in the right direction then people will automatically follow you and that’s the reason we have been working closely with Bureau of Energy Efficiency. In fact, it’s been a healthy relationship with the government where we keep them pushing on various issues.

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Monday, March 4, 2013

It’s time to take nuclear disarmament seriously

Else, the whole world may soon succumb to some irreparable damage

People sometimes forget that the boy who cried wolf ended up being eaten. True, nobody has been killed by a nuclear weapon since the attacks on Hiroshima and Nagasaki, 65 years ago this month. And, with Cold War tensions long past, it is all too easy for policymakers and publics to resist the doomsayers, be complacent about the threats that these weapons continue to pose, and to regard attempts to eliminate them, or contain their spread, as well-meaning but futile.

But the truth is that it is sheer dumb luck – not statesmanship, good professional management, or anything inherently stable about the world’s nuclear weapon systems – that has let us survive so long without catastrophe. With 23,000 nuclear weapons (equivalent to 150,000 Hiroshimas) still in existence, more than 7,000 of them actively deployed, and more than 2,000 still on dangerously high launch-on-warning alert, we cannot assume that our luck will hold indefinitely.

We know now – with multiple revelations about human error and system breakdown on both the American and Russian sides during the Cold War years and since – that even the most sophisticated command and control systems are not foolproof. We know that some of the newer nuclear-armed states start with systems much less sophisticated than these. And we know that, across the spectrum of sophistication, the risk of destabilising cyber attack beating cyber defense is getting ever higher. So it should be obvious that maintaining the status quo is intolerable. Moreover, there is the real risk of proliferation, especially in the Middle East, multiplying the dangers that nuclear weapons will be used by accident or miscalculation as well as design.

There is also the sometimes exaggerated but unquestionably non-negligible risk of non-state terrorist actors getting their hands on insufficiently secured weapons or fissile material and exploding a bomb in a major population center. And there is the disconcerting prospect that new civil nuclear-energy players will insist on building uranium-enrichment or plutonium-reprocessing plants of their own, rightly described as “bomb starter kits.”

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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%.

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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.

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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.

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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.

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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!

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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)