Saturday, April 27, 2013

Who will be America Inc.'s new #1 in 2012?

Profits of the 2012 B&E US Power 100 brigade totalled 13.4% more than last year. If America Inc. doesn’t suffer a double-dip recessionary heartache anytime soon, next year, the profits could rise higher. The question is: where will the leaders of the pack appear next year?

Twelve months in the past, my forecasts for America Inc. would have found a different set of takers. By the time July 2011 drew to a close, America Inc.’s benchmark indices had conveniently started the journey downhill. The S&P 500 was at a 6 month low (at 1,292.28 points). And the NYSE Composite and NASDAQ Composite indices were breaking longer records (8-month lows at 7,528.39 and 2,756.38 points respectively). As for brains in the boardrooms, they were worried about their shareholders. The simmering discontent over returns from bourses around the world, troubles in Europe that were mounting every passing day, and the cloud of criticism that surrounded the painful inflammation called unemployment that had shown no signs of subsiding since playtime got over last, were all unromantic truths. Wall Street had become nervy. America’s big boys of business too had.

On-ground, the possibility of a double-dip recession had got investors into a binary mode of thinking as far as returns were concerned. Off it, polarisation in American politics – with the Democrats blaming private interests and ill-directed deregulation for leading the economy to the pit, and the Republicans finding faults in the half-measured pump-priming for the economy’s failure to climb out of it – had disturbed the balance between pragmatism and (party) principles. Then, America’s AAA credit rating was headed towards the red zone, and no single bloc – for abundance or lack of desire – had a hassle-free solution to lighten the economy’s budget woes. It wasn’t a situation that called for celebration. With American GDP growth expected to fall below the 2% mark in 2011 (after rising 0.9% and 1.3% in Q1 & Q2, 2011) and global economy forecasted to underperform the 2010 story (estimated to fall short of the 4.4% growth scripted in 2010), optimism was out of question. So was any hope of a double-digit growth in bottomlines of companies and returns for the investor clan.

I had predicted otherwise. I had not only predicted that American companies would deliver double-digit growth in profits (PAT of 2012 B&E US Power 100 companies grew 13.4% y-o-y), but also handpicked the ones who would lead the band of profit-makers.

Like I said before, twelve months in the past, my forecasts for America Inc. would have found a different set of takers. Of the 20 companies which I had forecasted would occupy the top 20 slots of America Inc.’s profit charts, 16 actually did. According to my estimates in B&E, Exxon was supposed to walk away with the crown in FY2011, followed by Chevron, Apple and Microsoft. It happened. In fact, if an investor were to bet on me and invest equal dollars on each of the aforementioned top four names that I’d claimed would emerge winners, his return in just 11 months (as on June 27, 2012) would have been 22%. [To give you an interesting example, in July 2011, when I had predicted Apple to rise to #3 amongst profit-makers in FY2011, its m-cap was $310.41 billion.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 
Posted by at
Labels: , , , , , , , , , , , ,

Wednesday, April 24, 2013

The way they love hate crimes!

The recent incidences of hate crimes in US and across the world highlight the importance of promoting greater tolerance at all levels

Hate crimes have long been a part of the history of mankind. Under European colonial rule in the 16th and 17th centuries, native Americans had to undergo social discrimination. Similarly, Nazis in Germany practiced the Final Solution to execute European Jews during World War II. In the last two centuries, hate crimes against African Americans and xenophobia have become rampant in Western countries.

For all its claims of being a land of liberty and tolerance, US boasts of some fairly unimpressive statistics. The FBI recorded the number of criminal incidents with a biased motivation from 2000 to 2008 from 14422 law enforcement agencies representing 278 million people. In all, it noted 777 incidents that were linked to ethnicity/national origin (1109 victims) and 1,303 incidents linked to religion (1575 victims). The recent brutal murder of an Iraqi-American woman Shaima Alawadi in San Diego (on March 24, 2012) and the shoot-out of an unarmed Black teenager Trayvon Martin in Florida (on February 26, 2012), have highlighted the increase in crimes against minorities like Muslims, Black, ethnic Jews & Latinos.

In particular, America has witnessed a surge in the number of hate crimes against Muslims post 9/11. A report by the Journal of Applied Social Psychology explored that the number of anti-Muslim attacks in America in 2001 increased exponentially from 354 to 1501 following the attack. But the crimes were not limited to Muslims only. Other minorities were on target as well. As per the FBI’s recent Hate Crime Statistics, around 6,628 criminal incidents involving 7,699 offenses were reported in 2010. Along with Islamophobia, anti-Latino crimes have also increased manifold. A study conducted by Pew Research revealed that in 2003, there were 426 hate crimes against Latinos, while in 2007, there were 595 nationally. Hate crimes have also surged immensely in Canada. Canadian police services reported 1,401 hate crimes in 2010, which boils down to a rate of 4.1 hate crimes per 100,000 people.

Unfortunately, the trend in hate crimes, especially Islamophobia, is spreading like wildfire in Europe as well. According to the French Muslim umbrella group, French Council of the Muslim Faith (CFCM), hate crimes against Muslims rose by 20% in the first nine months of 2011 in France. A record 15,284 people were prosecuted for hate crimes in England and Wales in 2010-11. However, the official data revealed by governments may be much lower than the actual figures on the ground, as research has found that many victims of hate crimes are often reluctant to come forward. The research further revealed that only one-third of the police reports were filed by the victims, while many incidents went unreported and were also swept under the carpet.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
Posted by at
Labels: , , , , , , , , , , ,

Saturday, April 20, 2013

International

HP’s bad run not over

The personal computer industry continues to struggle with consumers showing strong preference for i-Phones and i-Pads. Not surprising then that Hewlett-Packard, amongst the world’s biggest computer makers, is faced with its own challenges. Investor confidence in the company continues to tumble and the company’s present market cap has tanked to about $54 billion as compared to almost $104 billion a year ago. For the quarter ended January 31, HP’s profit dropped by 44% while revenue fell 7%. To make matters worse, the company’s forecast says it is up against weaker-than-expected results for the quarter ending April 31. Overall, HP posted fiscal first quarter net income of $1.5 billion, or 73 cents a share, compared with $2.6 billion, or $1.17 a share, a year ago. Revenue declined to $30 billion from $32.3 billion in the same period. Analysts say that the company’s supply chain is in a complete mess. Floods in Thailand have also hurt it badly. However, the company’s co-chief executive Meg Whitman is hopeful that her plans for cost cutting, investing more in areas such as online cloud computing, security, and tools that help businesses manage data, will help HP win back lost ground. Various analysts have also recommended investors to stay invested in the company for the long run. But to win back investors’ confidence, HP will have to try harder and race against time to make itself healthy again.

Apple hints at paying out dividend

Apple’s CEO Tim Cook has given hints that the company with about a $100 billion in cash may at last give in to its investors’ wishes and pay a special dividend. Under the regime of its legendary ex-CEO Steve Jobs, the company maintained a policy of not paying dividends and conserving cash for the purpose of reinvestment. The last time that the company paid dividend was in October 1995. However, this time around, though many are in favour of the company paying dividend, some investors are divided in their opinion about the type of dividend to be paid and even whether it should be given. Despite the uproar that Apple should spend its cash, the tech giant is not the only one sitting on a cash pile. Google and EMC, for example, are among the handful of big names eschewing dividend payment. At the other end of the scale, companies like IBM and HP are regular dividend payers, while Microsoft made its first payment in 2003, and Cisco announced its first-ever cash dividend last year.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 
Posted by at
Labels: , , , , , , , , , ,

Tuesday, April 16, 2013

“Allowing FDI in india’s airlines will not help”

B&E: At present, we have many airlines which are in serious need of funds in India, be it private carriers or the State-run airline. Do you think raising the FDI limit by up to 24% for foreign carriers will help improve matters?

Gordon Bevan (GB): No. Opening the doors to FDI won’t encourage foreign airlines at the moment. It might make the investment climate in India more attractive, but not enough to warrant placement of capital in these markets. The airlines that have large exposure to the Indian market can manage to attract their traffic without local airline investment. Each airline can negotiate its own deal with carriers to secure Indian connecting traffic, but on international routes there may be duplication of effort. If Lufthansa acquired Jet Airways, what should the airline do with the Jet services to US? Lufthansa would want that traffic to route via Frankfurt or Munich. There may be a shrinking of direct services as the quickest way of gaining an ROI is to pump traffic through the owner’s hub system. I am sure the Indian Govt. would have an opinion on a shrinking, foreign-owned airline by now.

B&E: So are you suggesting that partnerships and code-sharing agreements instead of an acquisition would be better for the acquirers?

GB: Many airlines have learnt that they can secure additional revenues from partner airlines without tying capital in airline ownership. The fashion is now for airlines to co-operate in a JV on a route or country-pair, deriving the best of both carriers without the cost of investment. Ultimately, airlines are about securing traffic and revenue streams. Except in very rare instances – Swiss and Lufthansa is a good example – foreign airline ownership does not deliver this aim.

B&E: There is a serious concern that it is the LCCs who will benefit more from this FDI limit if it is allowed, as they will enjoy better valuations at the moment due to their profitable status at present. Your views on this?

GB: India represents all of the conditions to attract foreign LCC investment. LCCs would see the Delhi and Mumbai domestic markets as one where they could carve a sizeable market share. They are battle-hardened having had to compete with their own legacy carrier and legacy carriers at the other end of the route. The more successful LCCs already have high brand recognition within the Indian diaspora in countries like Malaysia, Australia and Europe. Exporting this brand to India would not represent a difficult challenge.

B&E: The count of domestic passengers in India is 55 million. Now is this enough a market size for foreign carriers to get greedy about? 

GB: I am not sure whether foreign legacy carriers can get too excited about a domestic market of 55 million that spends an average of $60/sector within India, or not. The reason 55 million Indians travel domestically is because of the level of fares at the moment. More interesting is the 38 million passengers that fly to and from India. In almost all cases airlines can pitch for this traffic without investing in Indian carriers. The domestic air market is also subject to non-air competition. Although the domestic air market has more than doubled in five years, average ticket prices have fallen to US$60 from $125 on average. Growth is developed through discounting – a message that legacy carriers are familiar with but not receptive to. It is clear that Indian domestic fares are unsustainably low. There is nothing wrong with low fares if it is related to the cost of production.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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

 
Posted by at
Labels: , , , , , , , , , , ,

Monday, April 15, 2013

“We have reduced our guidance by 14%”

Seshagiri Rao, Group Chief Financial Officer, JSW

B&E: The second quarter results this year show a lot of drastic dips for JSW. Is the mining ban in Karnataka’s Bellary and Chitradurg region the only setbacks or were there other challenges as well?
Sehsagiri Rao (SR): Well it had been a challenging quarter for us on account of unprecedented iron ore shortage in the state of Karnataka where we have large investments. In spite of these challenges, volumes grew by 11% and sales were up by 19%. Inventories are being operated efficiently and there are no concerns on that front. But the growth could have been much higher. Whenever we have approached the Supreme Court as an industry, they had been kind enough to give us relief. It has recognised that the steel industry is the backbone of the economy, and allowed some reliefs so far. So when the July 29 mining operations were banned in Bellary, on August 5 we were relieved to know that one million tonnes of ore would be made available by NMDC. There were delays to that and our operations had to be curtailed. During this time, we were supplementing some supplies from Chitradurg, and then again on August 27, the apex court banned mining in Chitradurg. We went back to the SC-appointed central empowered committee and the monitoring committee with representations that the industry requires three million tonnes of ore, which is dependent on Karnataka and one million tonne is not adequate. So we got some relief on September 2 when e-auctions of 1.6 million tonnes of iron ore were allowed.

B&E: So what are the major roadblocks that you are still facing despite the two interventions made by the apex court to improve supplies of raw materials for the steel industry?
SR: The issues facing JSW or the steel industry in Karnataka region are that we are facing problems with the implementation of this order. When the auction was held, only 74% of the ore was sold and the rest had no takers due to high asking prices in the bid. So, there is issue as far as pricing is concerned. There are problems with certain procedural issues to avail this iron ore. Logistics and frequency of auctions are also of concern. These were the four major problems that have been identified and brought to the notice of authorities. As directed by the Karnataka High Court, we have made representations to the central empowered committee and to the monitoring committee. So based on that, we are hopeful they would offer us relief, realising that these are the bottle necks.

B&E: What is the notional loss that the company may have suffered due to these bottlenecks in the current quarter?
SR: The loss of production on account of lack of iron ore amounts to about 450,000 tonnes of total finished steel. That is the loss we have incurred in the last quarter. Our cost of production too has gone up due to higher ore prices. We stood at Rs.2,700 weighted average cost for producing one tonne of steel, which has gone up by about Rs.1,500 per tonne. Inspite of these two issues, the Rs.13.33 billion of EBITDA is just about 2.5% lower than last quarter. The 450,000 tonnes in sales would have added Rs.6.75 billion to our EBIDTA. So you can imagine the kind of impact we could have had in this quarter itself. It is not bad at all given the challenges we been facing in the last two months of the quarter.

B&E: JSW has lowered its guidance of production and sale for the rest of the year. Do you see any hopes to revive your earlier levels any time soon?
SR: This time, we had given a guidance of 8.75 million tonnes of steel production and 9 million tonnes of sales. This is primarily because of the low availability, frequency of auction and other reasons that I mentioned. We are hopeful that by the end of next quarter, the monitoring committee, which is taking a lot of interest over the issues the industry is facing will work to remove the bottlenecks. Till that happens, given the current supply situation of ores and our raw material position, we have reduced our guidance for production by 14% to 7.5 million tonnes and reduced total sales volume to 7.8 million tonnes. Our other projects involving capital expenditure are still under progress. Our phase II expansions at our Vijaynagar plant to fetch up to 12 million tonnes in production are still underway and we are continuing active implementation of all our other expansion plans as well. We have applied for permits to expand capacity to 16 million tonnes (from the current 10 million) and have the land for the same. We have also acquired 4,500 acres for a 10-million tonne steel plant at West Bengal, for which we hope to secure funding and commence by the end of this fiscal.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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
Posted by at
Labels: , , , , , , , , , , ,

Saturday, April 13, 2013

B&E This Fortnight

INTERNATIONALBUSINESS, ECONOMY & FINANCE
END OF AN ERA!

August 25, 2011, witnessed the end of one of the most extraordinary careers in business history. Steve Jobs, the ‘Minister of Magic’ at Apple Inc. finally stepped down as CEO of the tech giant citing health concerns and his inability to run the company on a day-to-day basis. Surprisingly, the market did not panic and the company’s stock performed better than the NASDAQ and Dow index – an indication that Jobs had succeeded in crafting a brilliant succession plan. Steve Jobs has been one of the most iconic CEOs in business history and his relentless pursuit for perfection and innovation has earned him a fortune. As of today, Jobs holds Apple shares worth $2.2 billion. Additionally, he is also the largest shareholder in Disney where his shareholding amounts to a staggering $4.4 billion. Tim Cook has been named the new CEO. Although Cook has been responsible for the day-to-day operations of the company in Jobs’ absence, he faces the daunting task of stepping into the historic CEO’s shoes. Ever since Jobs came back to Apple in 1997, the company’s stock price has appreciated by 6,754%. If today, Cook were to replicate the same, the stock would be valued at $25,797 and the m-cap would hover around $23.6 trillion! Nevertheless, Jobs would always be remembered as a maverick who inspired an entire generation of entrepreneurs.

Takeda eyeing india
It seems that the Indian government’s decision to allow 100% foreign direct investment (FDI) in the pharmaceuticals sector will strip India of its generic competitive advantage. Japan’s largest pharmaceuticals company Takeda is planning to acquire one of India’s leading pharma companies. Unlike its rival Daiichi Sankyo, Takeda does not have a formidable presence in the Indian market. The Osaka headquartered Takeda has approached Cipla (India’s second largest drug company) and Lupin (fifth largest by market share) to lead their endeavour of making a denting mark in the Indian drug market. For Lupin, the talks have progressed beyond the initial stage wherein Takeda plans to buy its domestic formulations business as well as its research facilities. However, Lupin is precarious over selling off its research facilities and expects a price valued at 17 times Lupin’s revenue, which stood at $1.5 billion in FY2011. On the other hand, Cipla has denied any such developments. Last year, US based Abbott bought Piramal Healthcare’s formulation business for over Rs.170 billion, which made it the country’s biggest pharma player by market share. Similarly in 2009, Daiichi Sankyo purchased Ranbaxy for $3.5-4 billion to become India’s largest pharma player by revenue.


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

Friday, April 12, 2013

“We Will follow our Motto of Keeping Supply Below Demand!”

Enrico Galliera, Commercial & Marketing Director at Ferrari SpA, joined the Italian luxury carmaker just a year back, after working for over two long decades at various positions in the marketing department of the Italian pasta-maker Barilla Holding Spa. In an exclusive interview with B&E, he reflects upon Ferrari’s rough ride during the slowdown, its performances in markets like China, Japan & South Africa, its attempt to create fuel-efficient engines, and his “supply-less” motto for succeeding in new markets.

B&E: Ferrari is a very well-established brand in the luxury car segment. It believes in selling premium quality than volumes. But contrary to conventional wisdom, even the luxury car sellers suffered considerably during the recent slowdown. How was the slowdown experience at Ferrari, especially when compared to the tough times faced by players like General Motors, Toyota and other labels which focus on volumes?
Enrico Galliera (EG): As compared to what the volume players in the automobile industry went through during the economic crisis, the time was still a relatively better period for Ferrari. As we generally work with a 12-month waiting period, the economic crisis cannot be termed the worst period for Ferrari so far, though we did get hurt to an extent. To be honest, it would be wrong to say that we were totally insulated from the economic crisis. But what saved our topline during the 2008-2009 period was our entry into newer markets like South Africa, which helped the company manage overall volumes. The fact that South Africa, in such a short time has become the 15th largest market for Ferrari out of the 59 countries that we are present in, gives you a fair idea of how the market played a saviour.

B&E: So do you plan to enter other countries in the African continent, just in case you would require more cushion if there is another slowdown soon?
EG: Actually, yes. The response we got in the South African market has motivated the company to expand to other African countries as well in the near future. We already have Ferrari owners in markets like Mozambique, Angola and Nigeria, and I am sure, given a tough business scenario in the near future, these emerging markets will serve us well.

B&E: China is another market which has over the years, impressed luxury automobile sellers. Your company has spent 7 years in China, but it has all been rather silent there. Has your time in China been a rather dull one?
EG: No. We have seen huge growth and penetration in the Chinese market over the past few years. China has been and is a very important market for Ferrari. Though I confess that after entering China in 2004, we did take a few years trying to understand the market. But today, we are geared-up to increase our volumes there as well. To quote a figure, Ferrari sold over 300 units in China in 2010, which market a y-o-y increase of 40%. That for us is phenomenal. And going forward, we only expect the sales to rise higher. It was a slow start, but we are catching up very fast.

B&E: Next, to Japan and Egypt – what degree of pressure do natural disasters like the Tsunami in Japan and unforeseen events like the unrest in Egypt put on the sales of your company?
EG: Such incidents for that matter, are surely bad signs for any luxury carmaker. Japan is undoubtedly one of the most important markets for Ferrari. But trouble there had begun even before the catastrophic events unfolded in April this year. Even before the Tsunami, there was a slowdown in sales due to the stagnant situation of overall economy of the country. With the Tsunami occurring, our problems in Japan have only been aggravated. The company is today really concerned about Japan and how long it will take for such an important market to recover. At the same time, unrest in Egypt and several Middle-Eastern countries is also a major concern for the company.


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

Living on Presidential lethargy

Inordinate Delay in Deciding The Fate of these Mercy Petitions Raises Concerns over The Consistency, Transparency and The Very Objective of these Procedures.

Timely trial. Well, that sounds some sort of an oxymoron in the Indian judicial system. But 25 pending mercy petitions with the President with some since 2003 is certainly more than unbelievable. There is no doubt that the hype that surrounds sentencing of capital punishment to convicts and mercy pleas cause a lot of stress on the President’s ability to take an objective decision under Article 72 of the Constitution that empowers the President of India to grant pardon or commute the sentence of a convict found guilty by court. But holding it for as long as eight years, for sure, sets a bad example for the system as a whole.

Perhaps, this is exactly what the Supreme Court (SC) vacation bench comprising Justices G. S. Singhvi and C. K. Prasad might have felt when it expressed ‘surprise’ over the delay and sought an immediate reply from the Delhi government on the matter. “The counter filed by Delhi Government will clarify as to why the petition for pardon has not been disposed of for last more than eight years,” the SC bench said.

However, the subject of ‘inordinate delay’, which can amount to a ground for Court to commute the death penalty under section 433(a), has some other contours which also deserve ample attention. These include reasons behind what constitutes delay, the impact of delay on the death row convicts, applicability and scope of fundamental rights protection to death row convicts and whether death sentence can be commuted into life on account of delay. The inordinate delay in the execution of the sentence is one circumstance, which has to be taken into account while deciding whether the death sentence ought to be allowed to be executed in a given case.

Without going into the details of how prolonged delay in deciding on a mercy petition could translate for the case and convict in question, former Chief Justice of the Delhi High Court A. P. Shah speaks in favour of timely trials. “There should be no doubt that a reasonably expeditious trial is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21,” Shah told B&E.

The issue has been a matter of debate for quite sometime and the politicisation of the case of Mohammad Afzal, who has been awarded the death sentence in the 2001 Parliament House attack case, only brought matters to fore. A. P. J. Abdul Kalam, as President, received Afzal’s mercy petition on October 4, 2006, and forwarded it to the Ministry of Home Affairs (MHA) for advice. Since then, the ministry has been examining the petition in consultation with the Government of Delhi. The MHA usually consults the state government concerned before submitting the mercy petition back to the President with its advice. The President’s powers under Article 72 are always exercised with the aid and advice of the Council of Ministers. The delay by the MHA to submit Afzal’s petition to the President with its advice indicates the dilemma the government faces in keeping the issue free of political considerations. Also, the apparent pick and choose policy adopted by the government (which is absolutely contrary to the stand maintained by the MHA) does not speak high volumes of the procedure in place as well. BJP has even termed the delay in deciding Afzal Guru’s petition (despite Guru himself asking for speeding up the process) as Congress party’s strategy to avoid a religious electoral backlash.


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

Thursday, April 04, 2013

The Best a man can get?

When P&G bought Gillette for $57 billion in 2005, it earned Criticisms galore. Six years later, The Brand has already added $32 billion to P&G’s kitty. If Gillette’s India Market Performance improves fast, the coffers will only swell further. And there are signs of that happening.

The electric shaver and the safety razor have cut deep into the American and European markets but many Indians still strop their own razors or visit a barber for a shave. In fact, as per a CII official, over 50% of India’s 600 million males shave outside their homes in salons. Naturally, for Gillette, the world’s top razor-blade maker, India is a highly attractive market with a vast potential. Indian men on an average shave only 2.5 times a week, far lower than, say, Koreans and Japanese. But cracking this market, especially the mass segment, is not proving to be easy for Gillette. Years of conventional marketing and advertising have won it a premium brand image, but Gillette lags behind rivals in India because consumers can’t afford to buy its flagship products. So while it dominates the Rs.10 billion blades and razors category at the top-end of the market, family-owned Indian companies such as the Houses of Malhotra and Vidyut dominate the mass market.

Gillette India’s revenue of Rs.8.52 billion for FY2009-10 (July ‘09 to June ‘10) looks healthy given that it contributes to 19.4% of its parent Procter and Gamble’s India business (which amounts to Rs.44 billion). But Gillette’s India glory-tale is chicken-feed when compared to the brand’s global revenue of roughly $8 billion! Understood that the brand globally contributes to a much lower 10.13% of the total sales of P&G, but the fact that India contributes just 2.37% of Gillette’s total revenue invites nothing less than shame for a 28 year-old brand. Across the world, Gillette accounts for about 70% of the razors and blades sales, but in India, it has failed to live up to its spectacular global performance. And even though it is currently the market leader in the five billion-units-a-year razors and blades market in India with roughly 40% share, its performance here pales in significance to its global dominance. Just 10% of Indian men who shave use Gillette blades, compared with about 50% worldwide.

Gillette’s personal care products – shaving systems and cartridges, razor blades, toiletries, and shaving brushes – represent what the company is all about in India. The category accounts for a little over Rs.6 billion in sales – 70.42% of all that the company rustled up sales-wise during its last accounting fiscal (ended June 2010). Next in the pecking order is oral care, comprising toothbrushes and other oral care products. This division brought in sales of Rs.2.2 billion or 25.82% of all sales. Then there is the portable power products division, made up of battery sales, which rang in 3.76% of its sales.


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

Posted by at
Labels: , , , , , , , ,

Monday, April 01, 2013

“Perhaps The US Navy Seals did Capture Osama Alive...”

Cairo-based Max Rodenbeck, Chief Middle East Correspondent, The Economist, discusses Osama Bin Laden’s death, The Involvement of Pakistan and US in The Capture, and The Effects of Osama’s death on other Terror Outfits, Pakistan’s Neighbours and The Middle East, with A. Sandeep, Editor, Business & Economy.

B&E: Recently, America celebrated the end of Osama bin Laden, as the end of the mastermind behind the biggest terror threats worldwide. Is it actually such a big victory?
Max Rodenbeck (MR): Understanding that he was one of the biggest criminals in world history and the biggest threat to peace, the celebration was called for. But to hope that this would bring an end to all kinds of terrorist attacks like those masterminded by the al-Qaeda under bin Laden’s leadership, I think it is premature to think that such a thing will happen. Osama’s death is a big blow to al-Qaeda, The outfit has grown considerably weaker in the past ten years, and it is not clear as to who will be the successor to Osama. Whoever becomes the successor, he would not have the same profile or the ability to inspire such hatred or admiration amongst like-minded people.

B&E: While reacting to the news of Osama’s death, the British PM had said that there was a need for the West to be cautious of a backlash. Also, Taliban has vowed to launch an attack on US and Pakistan to avenge Osama’s death. How real are these threats?
MR: More than considering them real or not, it is better to understand these as short-term threats. The most striking response to Laden’s death from the Muslim world has been the silence. There was not a great deal of comment at all. Besides the people who are on the fringe of Islamic radicalism – the Jihadist fringe, which is a very small fringe element in the Muslim world today – the rest are not upset about Osama’s death. There also remains some degree of disbelief in the truth about US’ story regarding the killing of Laden and the truth that he died. But in terms of an immediate backlash, it is pretty likely that some of those groups associated with al-Qaeda will feel the need to either express their anger or reassert the fact that they still exist by launching an attack.

B&E: Reports have claimed that Osama bin Laden, in recent times, was not as active as he was, say about 10-15 years ago. What are your views?
MR: It is true that Osama’s leadership has not been that important in recent years. In fact, the central leadership of al-Qaeda has not been that critical. The work of al-Qaeda around the world over the last couple of years has been carried out by groups that are only remotely linked to al-Qaeda. There is no question that bin Laden’s leadership has been less important of late. I think this has also largely been because he has been unable to communicate. It has been quite some time now – I can’t remember how long – since we last saw some video or audio statement from him. His leadership position had weakened even before his death.

B&E: The growth of al-Qaeda also led to the corresponding formation and strengthening of several other similar but smaller outfits across the globe. With their agenda almost clear and certain, how big a deterrent is Osama’s death for these outfits? Or do you think other terror outfits will get stronger due to Osama’s death?
MR: I don’t think we have anyone trying or planning to play the part of al-Qaeda in the same sort of manner. In an organisational sense, there are some people who follow the policy of global jihad, but this is a small minority which mostly exists on the Internet – in terms of being real and operative on-ground, there are really very few. Maximum, we are talking about a few hundred around the world. They are all very like-minded outfits that exist in many different countries. We are talking about small cells, of hardly two dozen people each. And a lot of them have the basic primitive training and have very limited goals and what they can achieve. So, in such a scenario, we will see terrorism on a very small scale, than on a global scale. al-Qaeda’s vision, over the last 10 years, has become increasingly difficult to sustain, because it broke into a franchise, with different branches that operate independently. There is very little central leadership. And it’s hard to see any organisation that will try to emulate a centrally-led terror outfit. It is likely that there will be constant mutations and change in all terror outfits. There is already a considerable amount of debate inside al-Qaeda itself about strategy and tactics – whether they were doing the right thing or not. In the jihadi circle as well, questions have been raised whether whatever they have been doing is right or not. Questions are being increasingly asked about this kind of terrorism and radical wrong action around the Muslim world. It can also be that the pool of recruits at schools of terror is actually getting smaller. All this was happening even when bin Laden was not dead, so I am not sure whether Osama’s death will have any impact on terror groups or on whether his death will make the smaller, lesser known groups stronger. Interestingly, even if you look at geographies, there are considerable differences between the countries. Pakistan is rather unstable and has its own domestically generated and caused sources of violent Islamic radicalism. And these are not often connected to the broader or global movement such as the al-Qaeda. So there could be different forms of local terror groups in different countries.


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
Posted by at
Labels: , , , , , , , , , , ,
Subscribe to: Posts (Atom)