Showing posts with label CEO. Show all posts
Showing posts with label CEO. Show all posts

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
 
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Wednesday, February 06, 2013

Even Viagra may not work!

Losses of patent rights in the pharmaceutical industry prove how the biggest of dreams can turn into the worst of nightmares. And there are no exceptions. by steven philip warner

It wasn’t just another day for Jeffrey Kindler at office. Kindler, for the past four years, had been serving as the General Counsel at Pfizer. It was precisely two days ago, when he had been hastily appointed as Pfizer’s CEO. He switched on his office desktop for the first time and typed-in an email to Pfizer employees, which read thus: “July 31, 2006: To meet our challenges in a rapidly changing industry, we will need your continued help. I would like to discuss our challenges openly...” The note was headlined: “We move forward from a position of strength.” This was to some surprise, as his firm had been clearly suffering a stagnated top-line and a falling stock (which, under his predecessor Henry McKinnell, had fallen by 43%). Today, a Ronald McDonald shoe and a rubber chicken (that he was gifted by his bosses at McDonald’s on his exit) are placed neatly in a shelf in his New York office, and it serves as a reminder of his being the first big pharma CEO who had had no previous pharma experience (before becoming the General Counsel). Under Kindler’s watch, in May 2008, Pfizer’s stock price nosedived to the sub-$18/share level only for the second time in over 12 long years. As of March 2010, the stock is gasping at $17.75. Pfizer’s revenues have continued being indifferent to Kindler’s presence (they’ve hovered between $47 to $49 billion!). But the biggest worries of Kindler go far beyond just the humdrum tales of a battered stock price & a browbeaten bottomline (its net profit for FY2009 represents just 43% of what it earned four years back!).

It’s amusing how one man’s meat can become another man’s poison, even in the world of pharma. For his predecessor Henry, the acquisitions of Warner-Lambert (in 2000 for $90 billion) and Pharmacia (in 2002 for $60 billion) proved to be glorious moments (as the first deal gave Pfizer a control over the world’s no.1 selling $11.4 billion-a-year drug Lipitor, while the latter helped it pocket its now third-bestseller Celebrex, which earns $2.5 billion-a-year); for Kindler, the very same deals are now giving nightmares of a dry drug pipeline! Today, Kindler is grudgingly shouldering the burden of launching blockbusters to make up for the loss of its patents over the next few years.


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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Friday, January 18, 2013

A well won bet...with a shallow prize

Marriages are made in heaven, so what’s wrong with three of them? Ask Renault, whose problems in India are linked to having too many JVs, says B&E’s pawan chabra

Sometimes, the difference between an ordinary life and a life of purpose can be a well won bet, especially when we look at the life of Renault founder and automotive genius Louis Renault. This dates back to the time when he had successfully converted a De Dion-Bouon cycle into a four-wheeled small car. He named it Renault Type A. He subsequently won a bet with his friends, who challenged that the car couldn’t drive up the slope of Lépic Street in Montmartre. Not only did he win the bet, he also won the courage and inspiration to become an auto manufacturer. The rest, as the cliché goes, is called Carlos Ghosn, the singular reason why as of date, Renault operates in around 118 countries and has been able to bring in the numbers by leveraging its broad product line and its JV with Nissan. However, Carlos Ghosn, CEO, Renault and Nissan Motor Co. may want to rue the fact that Renault’s bet on India doesn’t exactly have a legendary feel so far. This is one uphill journey, where the peak remains to be scaled. And the prognosis is that the three marriages (i.e. Joint Ventures) that the company has solemnised in the Indian market haven’t exactly been of the ‘made in heaven’ kind.

At the recently held Tokyo Motor Show, CEO Carlos Ghosn managed to set the cat among the pigeons (unintentionally, if you look at his statements later on) when he announced, “I am not saying we will, I am saying we can (exit up to 2 JVs). I don’t want anybody to be surprised. We have today three partners (in India). Our intention is to continue with the (three) partners, but if it is not possible, I can tell you that we need at least one.”

The red flag has been Renault’s JV agreement with the tractor major Mahindra & Mahindra. When the Logan was launched in 2007 (positioned as an entry-level sedan with a price tag starting at around Rs.4,50,000), it was expected to sell around 2,500 units a month but has managed to sell just under 500. The car has faced a host of issues, including competition from the Swift DZire & Tata Indigo as well as the higher excise duty structure and the import duty due to low levels of localisation, a factor where its competitors have been well endowed. Maruti Suzuki, which sells every second car being sold in the country, sells around 6,000 units of Swift DZire and Tata Motors banks around 2,500-3,000 units of its Indigo from the domestic market. In addition, “Logan wasn’t able to appeal to the Indian consumer basically because of its plain looks,” says auto expert Murad Ali Baig. The company is planning a new version of the same model; but not many would want to make a bet on such a ploy succeeding as of now. More trouble for the JV has recently come from Hyundai Motors India. The company has filed a case against Mahindra Renault India stating that the latter is planning a car named Sandero; and is hence trying to cash in on its popular Santro, as the names sound similar.
 
 
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) .

 
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Monday, October 29, 2012

“I would resign if I were to fail...”

Infosys CEO Kris Gopalakrishnan talks to B&E’s Editor and Deputy Editor about recession, recovery and succession planning

Call him a gadget freak or a nerd. That’s how Infosys CEO Kris Gopalakrishnan likes to describe himself. However, ever since he took over as CEO, Infosys, along with other IT companies, found itself at the wrong end of the technology cycle. This man who runs India’s seventh most profitable corporation accepts that Infosys is loathe to recruit outsiders as leaders and believes Infy has a long way to go...

B&E: Have you made decisions as CEO that you believe have changed the course of the company?

KG: Unfortunately, when I took over, there were a series of crises. The focus was on managing through the crisis rather than looking ahead. We first had tremendous volatility in currency, then after that there was the downturn. When I took over in June 2007, it was the peak of the asset bubble. When the downturn happened, my focus initially was actually to manage the business in a volatile environment and manage the different moving parts from a financial perspective and then it moved to manage client relationships. I was lucky that most of Infy’s relationships survived the downturn. I also decided to honour all our hiring commitments at campuses, something that our competitors did not do. It was a big decision. I used the recession opportunity to build the bench.

B&E: CFO Balakrishnan told us that your focus was not intending to be the largest organisation...

KG: Largest does not necessarily mean you are world class. And we have a long way to go from a size perspective. We want to build an organization that is there for the long haul. Business is a marathon, not a sprint. It is not about having spectacular performance for a year and not being there the next year.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Friday, October 19, 2012

Rick swings, GM misses

...and the shareholders get their pants walloped!

Rick Wagoner during his 8-year term as the CEO & Chairman of GM has oft been described by industry experts as a leader who lacked the “ruthless streak” needed to make the tough decisions... Well, allow us to be crude. Many do claim that he tried his best to revive the lost glory of the wounded auto-maker. Sadly, his best wasn’t enough, and today, his successor, Fritz Henderson, is fighting hard to present a viability plan before the Senate, by June 1, 2009. There is no denying that GM has proved to be Detroit’s biggest blunder in these recessionary times, and all because Wagoner behaved like the wicked kid who skipped classes at Harvard (by the way, he’s an HBS Alumni) and played baseball, trying to hit home runs every ball; but he failed [And guess what, many are blaming the recession for GM’s miserable state]. So here are the bull-headed swings that failed to deliver the so-called homies and which make up for one of the biggest business blunders in the past 100 years.

Swing & Miss #1: Being the CEO of a First World brand, his ‘American legacy’ ego prevented him from shifting units to emerging nations. Swing & Miss #2: Axing of the EV1 electric car project in 2003, which Wagoner admitted was one of his “greatest blunders.” The product, which was the world’s first electric car, could well have become the future of GM. But then again, isn’t GM all about brawns and hefty Hummers? What Wagoner forgot was that fuel-efficiency is something that leaders like Toyota and Honda have focussed on besides offering powerful engines... [Rick, you skipped your market segmentation lessons too?]


Source : IIPM Editorial, 2012.

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

Move ‘back’ men!

Reliance needs to engage with a global partner for its back end

The travails of Mukesh Ambani, Chairman, Reliance Industries Limited (RIL), have been the stuff of corporate legends. But he is in more than a spot of bother at the moment. A glance at the financial results of Reliance Industries for the quarter ending December 2008 reveals that its net profits stood at Rs.350.1 million as opposed to Rs.807.9 million recorded last year – a drastic fall of 56.67%. While RIL’s petroleum business got pummelled last year (as many as 1,432 petrol pumps were shut); the retail business too is not giving a moment’s relief. After deferring the launch of its wholesale market earlier, Reliance Retail finally scrapped its cash & carry (C&C) model and showed the door to the entire team of 36 professionals headed by Harsh Bahadur (erstwhile CEO of Metro AG’s C&C business in India). This was followed by news that Reliance Retail is planning to shut down 40 of its non-performing stores and rationalising its retail space of around 4.2 million sq. ft. In 2008, Reliance Retail axed almost 600 support jobs to manage costs. It was also speculated that the back-end operations as well as management of its hypermarkets, supermarkets and convenience stores would be merged to cut costs. Will Mukesh’s Rs.250 billion retail venture be able to sustain?


Source : IIPM Editorial, 2012.

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


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