Showing posts with label IIPM-Management School. Show all posts
Showing posts with label IIPM-Management School. Show all posts

Friday, May 31, 2013

'Global Zero' Possibilities

A nuclear-weapons-free world seems a dream; no harm trying...

The IAEA Director General, Yukiya Amano recently mentioned that “as a human being, as Director General of the IAEA – and not least as a citizen of the only country ever to experience the unspeakable horror of nuclear bombs – I believe with all my heart and soul that these horrific weapons must be eliminated.” What is unique in his statement is that such talk of a nuclear-weapons-free world has almost but vanished even from the lexicons of peaceniks. You see, it’s now considered childish to recommend such paradigm reversing objectives. Nuclear weapons are surely here to stay... or are they? Could there really be a possibility of a nuclear-weapons-free world? Well, as one defence commentator put it to yours truly, if India could eradicate polio, then anything is possible. Not many might remember that the Nuclear Weapons Convention (NWC) has actually aimed at the complete elimination of nuclear weapons. Those in the know would remember the global campaign called “Global Zero” which was launched in Paris in 2008 for the elimination of Weapons of Mass Destruction (WMD). Yet, against the backdrop of the renewed nuclear race – encompassing Iran, India, Pakistan, Korea, China etcetera – it’s quite unlikely that the philosophies of the NWC or Global Zero campaigns would cut any ice with the global warlocks.

As per various estimates, there are more than 23,000 nuclear warheads active in the world, most with the old foxes (America and Russia primarily); that’s one reason that nouveau entrants into the nuclear club too have all their guns blazing. North Korea, which conducted its third nuclear test last month, stated that they are developing this, targeting the US over its hostile interference in Pyongyang. Iran’s supreme leader Ayatollah Khamenei, who had urged the elimination of nuclear weapons previously, has warned that “no power could stop us if we are forced to build that.” And the less said about Pakistan, the better.

While US President Obama did mention his objective “to secure the peace of the world without nuclear weapons” in his initial addresses in 2009, he ignored such a mention in his January 2013 inaugural address. Even Senator John Kerry recently admitted that “a nuclear-weapons-free world is no more than an aspiration.” Yet, one cannot deny that nuclear weapons have not been used since 1945. For instance, the United States and Soviet Union were ready to accept their embarrassing defeat in their wars in Afghanistan and Vietnam rather than use nuclear weapons for a desperate win. South Africa has rejected nuclear weapons post the Cold War.


Source : IIPM Editorial, 2013.
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
BBA Management Education

Saturday, May 25, 2013

Passing the baton

Jaipur marks a watershed in Congress’ chequered history by ushering in Rahul Gandhi as a new year gift. Pramod Kumar reports from the Chintin Shivir

The glorious history of Rajasthan, given its geographical location, is replete with instances of valour and comebacks, of success stories pulled out of thin air and against all odds.

 Rahul Gandhi’s ‘coronation’ as the virtual heir apparent to India’s ruling dynasty at this week’s Chintin Shivir in Jaipur should be seen in that backdrop.

 There was pathos, tears and raw emotion, all ingredients that make up for family melodrama and have the potential to move the masses politically, as few other slogans can.

 The Rahul Gandhi that came out was the new face of the Congress: young, exuberant, ready to take on challenges and the country onto another level. More pertinently, there was the promise of new politics, slogans and faces; it was as if a beleaguered Congress party was trying to exorcise the ghosts of the UPA as 2014 draws close and who better than Rahul to navigate the treacherous road ahead?

The unofficial handing over the baton to Rahul was by no means an accidental happening, it was carefully choreographed from start to finish. The developments that unfolded had keeping the Election Commission’s Code of Conduct in mind. First Rahul was introduced at New Delhi’s Ramlila Grounds on November 4 last year to ‘acquaint’ him with party workers; on November 9, in the next round, it were members of the Congress Working Committee (CWC) who were formally introduced to Rahul. These were traditional testers to gauge the mood of the cadres - not that it was required - but in the light of Rahul’s somewhat unsuccessful 2012 with reverses in UP and Gujarat, no one in the party was willing to take any chances.

 Once the core group around Congress president Sonia Gandhi decided that the Gandhi family grip on the party apparatus had in no way declined, then it became a question of time and matter of completing formalities. As a background to the carefully orchestrated coronation, young ministers were inducted in the Union Cabinet as a first step; the Chintin Shivir then only became an occasion to formalise a political contract which everyone knew existed.

Sonia herself set the ball rolling when she emphasised that policies need to be framed keeping the aspirations and frustrations of the angry youth in mind, whose issues could no longer be ignored.

It was known in the party that there would be a Jaipur Declaration and it would be headed by Rahul. It did not quite happen that way. On the second day of the proceedings, the Jaipur Declaration came and went without causing too much of a flutter; Rahul’s induction became the biggest event for Congress in the New Year.

An actual look at proceedings will tell you that after Rahul, the buzz was around young ministers. Jyotiraditya Scindia, Milind Deora, Jitin Prasad, RPN Singh and Sachin Pilot, were all flavour of the meet. A very busy BK Hari Prasad and Mukul Wasnik showed that the Jaipur Chintin Shivir, more than anything else, signaled yet another generational shift in India’s first political family.


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

ExecutiveMBA

Wednesday, May 08, 2013

The brightest stars in Indian politics, Rajiv Gandhi

Known as one of the brightest stars in Indian politics, Rajiv Gandhi’s assassination shook up the foundation of the Congress party. A documentation of how his death reversed fortunes of the party, and dramatically altered the Indian political scenario...

What is most interesting about the post-Rajiv era is the shape Indian politics took after 1991. During the 1991 elections, the Congress was expected to win the largest number of Lok Sabha seats. That happened. But after the assassination, with no one from the Nehru-Gandhi family at the helm, the Congress party started to grow weak. Although the party was in power from 1991 to 1996 under Narsimha Rao, it started losing ground in crucial states, one of which was UP. The the emergence of regional parties and the rise of rightists led by the BJP made the environment more challenging for the Congress. With no charismatic leader to take control, the fortunes of the Congress looked to be on the decline. The regional sections of the Congress and the anti-Nehru-Gandhi factions grew stronger with the rise of Narsimha Rao and Sitaram Kesari. “With Narsimha Rao as PM and Kesari as party president, Mandal-Kamandal (OBC reservations – Hindutva) politics became too prominent. It was around this time that BJP first emerged as a probable alternative,” says Dutta.

The assassination of Rajiv led to the emergence of BJP with the Ram Mandir movement. Politics over religion was at its helm. Lok Sabha elections a year after the Babri Masjid demolition saw the BJP-led-NDA come to power with Atal Behari Vajpayee taking over as PM.

In a way, the demise of Rajiv resulted in the end of the single party system in India’s national politics. It led to a situation where regional parties started to revolve around two main political heavyweights – UPA and NDA. It exists even today.

The void that was created in the summer of ‘91 still hurts the Congress, which is today busy working towards strengthening its image amidst scams and incidents of corruption. Also to blame is the party’s weak structures in states such as UP, Bihar and MP, which account for a total of 179 seats in the Lok Sabha (33% of total), and its increased dependence on regional parties in recent years. Politically therefore, Rajiv’s absence has affected the Congress party adversely.

But are we forgetting that there is perhaps another Rajiv in the making? Rahul could be the new Rajiv. There are questions being asked about whether circumstances favour the party’s crown prince the way they favoured his predecessors. But Rahul doesn’t seem to care about the odds. For years now we have had political pundits talk about the charisma of the Nehru-Gandhi dynasty and how it could help revive the Congress party as it faces a political onslaught from entrenched regional parties, an aggressive right wing and ever more vigilant civil society groups. Perhaps Rahul is the hope who can fill some of the void that was created in the Congress bench after Rajiv was gone Many claim the junior Gandhi is yet to prove his mettle. But does Rahul care? He is charismatic, young, widely talked about, and has just about crossed over to the wiser side of 40 – characteristics that we associated with Rajiv in the years that preceded his ascension to the PM’s office (in 1984). Yes, he still has to embed into civil society his clear intent to demolish corruption, a factor that will play a huge role in the 2014 Lok Sabha elections. But perhaps, it is Rahul who could enable Congress to form a non-coalition government in the years to come. There have been disappointing consequences of the assassination. But the rise of Rahul in 21st century Indian politics may prove to be the all important upshot of that incident.


Source : IIPM Editorial, 2013.
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
BBA Management Education

Monday, May 06, 2013

Needed cash to reduce its interest costs

With the recent Diageo deal, the UB group has got some much needed cash to reduce its interest costs. But as major group companies continue to struggle with unfathomable debt loads, the only freely flowing commodity is advice!

It seems sensible to infuse the cash back into the flagship company. Outside of the deal with Diageo, though, United Spirits has few other deleveraging options; such as selling shares worth around Rs.4 billion in its sister concern United Breweries, besides offloading stake in Bangalore Royal Challengers, its IPL team. In an attempt to unlock the value of its non-core assets, the group is said to be mulling over a proposal by private equity fund Blackstone to buy out the prime office, retail & real estate blocks in its flagship UB City for Rs.5.5 billion (at the time of this issue going to print). Over the last one year, the group’s other major business has also turned loss making. Mangalore Chemicals and Fertilizers, which earned a net profit of Rs.29.7 billion for Q1, FY 2011-12, posted a net loss of $12.49 billion for the corresponding period this year, owing to financing costs that rose by almost 400%.

Aviation is clearly the next business to bail out of. Kingfisher Airlines’ debt position has turned from bad to worse since it acquired debt-laden low cost carrier Deccan Aviation. At the time of the deal, the combined losses of the two entities amounted to around Rs.20 billion. This became the starting point for the entire disaster. The situation turned so bad that Kingfisher Airlines has even lost its flying rights due to non-payment of various dues. Its lenders have refused to provide any further assistance unless the company gets equity infusion. Their stance got tougher after the recent announcement by their promoter. Dr.Vijay Mallya, who is known for his swanky lifestyle, said that he would infuse £50 million (around Rs.4.4 billion) into his Formula One racing team – Sahara Force India.

But seeing that Kingfisher has to be given up eventually, the question remains on how it should be valued by any acquirer. To be fair, it was a honest attempt at creating a new aviation experience and a uniquely premium airline brand for the discerning flier. However, the financial situation is a huge deterrent for any investor, even if he values the power of the Kingfisher brand. Sudip Bandopadhyay, MD & CEO, Destimony Securities, remains cautious when he says, “It is extremely difficult to put a scientific basis for a valuation of Kingfisher Airlines at this stage, since they have lost most of their rights and businesses. However, based on the strength of the brand, earlier track record and assuming that the flying rights can be gained back, we can look at a valuation around Rs.25 billion for a transaction involving controlling stake.” However, in the absence of any physical assets, flying rights and evaluation methodology the figure of Rs.25 billion also looks too good to be achieved, just in case the top management of the group plans to finally move ahead with such a stake sale. One of the major lifelines they would be looking forward to is the expected government clearance for further opening up of the aviation sector for foreign investment. If things go on as expected, this could be the best exit option for the ailing airline. However, for this to happen, Kingfisher Airlines needs to first regain its flying rights and revamp its distorted image. Brand equity has reached new lows due to the company’s persistent inability to pay salaries on time. As on November 17, employees had just started receiving their salaries for the month of May after repeatedly failed promises.


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

ExecutiveMBA

Thursday, May 02, 2013

Why everybody at SpiceJet loves Raymond

Two years back, Neil Raymond Mills took over as SpiceJet’s new chief. Then, the airline was unwell. He began by slashing costs. Strategies that didn’t make economic sense were forgotten. Today, the airline appears a turnaround tale. Reality is, the job isn’t over yet. Worse, harsh history could repeat itself

A simple analogy. If you drive a car at a constant speed minus stops, you burn less fuel. The gains don’t become apparent after each short drive. But in a quarter of a year, the reduction in fuel consumption starts to show. The results become more pronounced in a year. Much is saved in gas and cash. Common sense. But most airlines in India ignore such small money-saving acts. SpiceJet is not one of them. At the airline, this “constant speed” philosophy is communicated as a compulsory key message to each of its newly recruited pilots. These cockpit handlers are supposed to remember it every time they leave an air strip. The idea is to get the pilots to save anywhere between 0.5% to 1% of the airline’s fuel bill. A small chunk saved. But at SpiceJet, if a cost can be avoided, it is.

Cost-cutting doesn’t always help
The company’s hardheaded emphasis on lowering costs does affect its operational efficiency metrics. Unfavourably at times. In July 2012, SpiceJet’s On-Time Performance (OTP) on domestic routes was 84.3%. That meant, about 16 of every 100 flights were delayed beyond 15 minutes. Much of this is can be blamed on the constant speed norm that is in place at the airline. This makes the airline’s record only better than the havoc-stricken Air India’s (OTP of 81.2%) and now-stripped-to-the-bone Kingfisher Airlines’ (81%). All other airlines recorded OTPs in the 90%-plus range [IndiGo: 95.3%, GoAir: 90.3%, and Jet: 91.6%]. The company isn’t one to worry about offloading passengers to peer carriers (and cancelling flights) either, when load factors don’t justify economics. The carrier strives to maintain an average load factor (LF) of over 75%, and plans to increase it over the quarters to come [in Q1, FY2012-13, LF was 80.8%]. Result: SpiceJet’s flight cancellation record (2%) is only better than those of Air India (3.2%) and Kingfisher (8.2%). Others boast of a lower figure (IndiGo: 0.1%, Jet:1.4%, GoAir: 1.6%).

Mills... a number-loving turnaround guy
But CEO Neil Mills, who has turned around the airline in the past two years, knows that these numbers only tell a part of the SpiceJet story. He is familiar with how budget airlines work. An industry veteran of over 20 years, this former CFO of Middle-Eastern LCC Flydubai knows his numbers fall on the rational side. He measures every paragraph in the book by weighing data. That is exactly how he helped build Flydubai from scratch. He plugged cost holes at the company, and improved its balance sheet, helping the airline grow from a drawing on the whiteboard to a fleet of nine operating aircraft in just a year-and-a-half. Before Flydubai, he was at easyJet for 12 long years. Under him, the company grew from 4 to 174 aircraft, and became one of the biggest, most profitable airlines in Europe.

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

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
 

Thursday, March 28, 2013

B&E Indicators

Global M&As on the rise

Global M&A deals in 2010 closed at $2.4 trillion, a 23% increase from 2009 after 2 consecutive years of 31% decline. Deal volume also increased, but only by 3%, suggesting that bigger deals were being concluded. Asia Pacific deal value jumped 31%, reflecting global interest in the fastest growing region in the world. In fact, Q4 2010, with $202 billion in announced deals, set a new record as the busiest quarter based on deal value.

A boom in Asia Pacific deals

Asia Pacific M&A deals (by target nations) closed 2010 at $574 billion. They grew by 33%, faster than the rest of the world and accounted for 23% of global M&A deals, up from 22% a year ago. Though Asia Pacific deal volume fell 1% y-o-y to 12,777 deals, the average deal size increased 33% y-o-y. Not surprisingly, China once again led Asia Pacific M&A with announced deal value of $135 billion, followed by Australia and Japan.


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

Wednesday, March 06, 2013

Deal with its chronic problem of lack of feedstock

After a decadal starvation of investments, Indian fertilizer industry is hot again in the books of investors and seems ready for a great run in the days to come. Before that, it will have to deal with its chronic problem of lack of feedstock.

Moreover, with the food price inflation still pricking the government and the demand for food grains increasing faster than ever, the government has now started taking keen interest in agriculture related sectors including fertilizers. One can understand the same from the very fact that in FY09 the government fully met its humongous subsidy obligation of Rs.1 trillion that accentuated due to a sudden and unprecedented rise in input prices. In fact, explains N. Raju, Analyst, Fitch Ratings India, that in order to keep fertilizer prices under control at the pick of the price cycle and check it from hurting the demand scenario by any means, the government paid for almost 90% of the cost of many categories of fertilizer recovering only 10% cost from the consumers. In a way such secured environment has also contributed to the resilience in the particular sector. As a result, apart from all plans for new plants and capacity expansion, the existing players have started operating at a higher efficiency level than what they were operating earlier. As per reports, on a cumulative basis (including private, public and co-operatives), the Indian fertilizer industry increased its capacity utilisation to 76.9% of installed capacity (84.1% in case of private sector) from 61.2% in the previous financial year (67.1% for private sector). This in turn has resulted in a total production of 16.3 million MT of fertilizer in FY10 (estimated), a surge of 14% over FY09.

Meanwhile, adding an impetus to the on going resilience, the government itself is attempting to revive 5 closed urea plants with an installed capacity of 2.2 million MT. Praising the move, Manoj Gaur, Executive Chairman, Jaypee Group, which has recently joined hands with Duncan Industries to revive the latter’s urea plant in UP, explains, “In order to ensure food security for the country’s 120 billion people, good agri-production has now become mandatory for us. And in this scenario, fertilizer will play a very critical role. Every year we import nearly an average of 7 to 8 million tonnes of urea, while our own plants here are closed. So, revival of these plants and their modernisation for better output is the need of the hour.”


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles


Friday, February 08, 2013

Water Woes Intensify

When it was predicted about a decade back that the next World War would be fought for control of water, sceptics dismissed it as a mere hyperbole. Now, with killings over water being reported from across the country, the spectre of the past is becoming a scary reality. The team of anil sharma, raju kumar and nishant bhadreshwar take stock of the situation

It is a truth universally acknowledged that a single man in want of a wife must be a good provider. However, what the word ‘provider’ encompasses has acquired a new meaning in Rajasthan. Here, a man must be able to provide water to the family apart from other things. Sounds like a leaf out of Ripley’s ‘Believe It or Not’, but the acute water scarcity in the state has made a lot of people wary of marrying off their daughters in villages where women would inevitably have to trudge for miles everyday to fetch some water. “Often, women have to walk for miles to collect water. Many people are reluctant to marry off their daughters into such communities,” says Rameshwar Chaudhari, a resident of village Chopra Dhotra in Jodhpur district of Rajasthan. His village is facing severe water crisis.

Rajasthan, spread over 10.4% of the country’s geographical area and sustaining more than 5.5% of the human population and 18.70% of the livestock, has only 1.16% of the total surface water available in the country. This year, the ground water situation has turned alarming in the state with only 30 water blocks out of the total 237 left in the safe zone. With increase in the population and subsequently the demand for water for various purposes, the state is already in the middle of a terrible water crisis. The per capita annual water availability in the state is about 650 cubic meters against the minimum requirement of 1,000 cubic meters. “I am 60 years old and have never seen a situation like this. We get water only once or twice a month and even that comes with low pressure. It takes over half an hour to fill a bucket,” says Kamla, a resident of Naulakhi in Sri Ganganagar district. The crisis has also become so acute in Atru in Baran district that the water department—in spite of spending Rs.20,000 daily on the supply of water—is finding it difficult to meet the local demand through tankers.

The local administration in Akhlera in Jhalawar district, having a population of over 12,000, is now planning to engage 150 plus tankers to supply water. The only source of water in the town, Amalvada Deh dam, is drying up fast. Similar situation has emerged in Sojat Road in Pali district where the administration has demanded a special 65 wagon water train to overcome the crisis. Women in Bhilwara town of Rajasthan recently blocked the road in front of the municipality, demanding increased water supply. “We want more tube wells to be dug up so that we can get water,” says Kamla, a housewife. Water is being supplied once in every five days in the town famous for its textile industry.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Monday, February 04, 2013

Crunched to death!

The financial crisis brought the world to its feet!

The foundation stone of the current financial crisis was definitely laid during the prior boom period, which lasted between 1996 to early 2005. Financial institutions like Fannie Mae, Freddie Mac, Lehman Brothers, Bear Stearns, Merrill Lynch et al, were enthusiastic enough to run after the lucrative sub-prime market and create an artificial buying power for borrowers. Giving no importance to financial due diligence, the lenders were quick to introduce new, riskier products with insufficient asset value as collateral. As a matter of fact, the total amount of mortgage-backed security issued tripled to $7.3 trillion and the securitised share of sub-prime mortgages increased from 54% to 75%; all thanks to the booming ‘credit derivative market’ which made risk transfer easy. The low interest rate further encouraged Americans to opt for housing loans or mortgages. But when home prices in the US began to decline in 2006-07, mortgage delinquencies rose and securities backed by sub-prime mortgages (which were widely-held by financial institutions), lost most of their value. Later on, when this housing bubble busted, three out of the five largest investment banks (once the cynosures of Wall Street) of US, failed, triggering instability in the global financial system. This resulted in a decline of capital for many banks, thus creating a credit crunch.

Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch and American International Group (AIG), are all in a perilous state today. The Federal Reserve on its part has been adding every bit to the domino effect. Its loan of $114 billion to protect the creditors of Bear Stearns and the US Treasury’s backstopping of $5.2 trillion in Fannie Mae and Freddie Mac sent a wrong signal to the failing behemoths. Lehman Brothers, stating that it had debt of $613 billion (with an asset base was of $639 billion) opted for Chapter 11. Days later the Federal Reserve gave $85 billion loan to AIG for a 79.9% stake. Mark Zandi, Chief Economist, Moody’s Economy.com, avers, “The crisis began with sub-prime mortgage borrowers defaulting on their loans, driving many private lenders out of businesses and causing billions in losses for investors. A year later, the crisis has engulfed a growing number of prime borrowers as well, pushing them financial brink and costing investors billions more.” 


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Tuesday, January 22, 2013

The US foreign policy

Obama has little choice but to go after earnest development in the US foreign policy

B&E: The media is abuzz with speculation about the possible opening of a United States interests section in Tehran. If the US makes a formal request, will Iran agree?
MM: I think the realising of the word “if” in the US takes considerable time. In the last few months, we have been asked this question of “if America raises such a request” many times; yet, we are still not faced with such a request. Till now, these things have come up through mass media and that is why you have received mass-media type answers. Let’s be patient. We’ll surely respond if we receive any such request.

B&E: Seymour Hersh argues that there has been a shift in the American position vis-à-vis an attack on Iran? What’re your comments on that?
MM: From the very commencement of this question historically, two options were on the table: an alternative based on cooperation, and an option based on altercation. We, at all times, prefer the choice based on cooperation. Time and again, we would listen from some part of the ruling party in the United States that they are bearing in mind the other option – that is confrontation, an assault or military strike on Iran. Maybe this has forever been in their minds, and is even now; but the problem is that they aren’t understanding what could happen. They cannot inflict on the taxpayers another conflict and that’s why we do not see any likelihood for a new conflict by the Americans in our region.

B&E: What do you think would the consequences be, if the United States did attack Iran?
MM: They know what will be the reaction. We have informed them. 


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

 

Saturday, January 19, 2013

Welcome to the jungle

Often chained, sometimes tortured, elephants to be evicted from zoos and circuses for a ‘better’ life in ‘protected’ areas...

The next time around you’re at the Delhi zoo, don’t be surprised if Rajlakshmi is nowhere in sight, for her and her likes – elephants across zoos in the country – are headed for greener pastures… The pride of the Delhi zoo, along with her other two companions, one of which is an African male elephant, having wowed scores of visitors for many years, will all be gone...

In fact, elephants in zoos (and circuses) throughout the country, will soon be a thing of the past, thanks to a notice to the effect issued recently by the Central Zoo Authority (CZA). That would mean that circuses will have to let go of their trademark crowd-puller, ‘Jumbo Shows,’ where the animal is made to do tricks from balancing on two legs and sitting on a small stool to playing a game of cricket and even football, all in the name of entertainment and attracting the crowds.

In its order, the CZA has observed that, “Elephants require a lot of space to move around and being large herbivores, zoos do not provide ideal conditions for their survival.” A March 2009 estimate pegs the total number of such elephants, including those at circuses, at 140.

The decision, it is said, has been taken after evaluating the conditions at various zoos and circuses. Without attempting to question the noble intentions behind such a move, a few pertinent questions do crop up. What about other animals in zoos?


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Friday, January 11, 2013

“Honest pricing policy”

B&E: What were the vision and mission for the Indian market when LG started off its operations in India?

MBS:
The company pursued the vision of becoming a true leader, attracting customers worldwide through its innovative products and design. In the first few years after its entry, LG did not get into price wars. Unlike other players, it did not offer any exchange schemes or discounts. We believed in an ‘honest pricing policy’ and our message to customers read ‘No scheme, no gimmick, great products and honest prices.’

B&E: What understanding of the Indian market did LG had then and what strategies did LG as a company formalise for penetration at that time?

MBS:
Since its initial years in India, LG has focused on bringing out new models regularly in its product range. In its first year of operation in India, LG launched 70 models across a range of products. In 1997, it introduced its Golden Eye Technology TV, which had a light sensitive natural algorithm ‘eye. Thus, LG showed that it cared for customers’ health through its products. LG’s concern for health of customers was its Unique Selling Proposition (USP) in the Indian consumer durables market. Similarly, LG positioned its refrigerators as the ‘preserve nutrition system’ refrigerators.

B&E: What were the key challenges that LG as a company had to face at that time?

MBS:
When LG started its operations in 1997, it sold products that were imported. Hence, its products were priced high and were equivalent to other foreign (Japanese) products. However, in 1998, LG launched ‘Sampoorna’, its first low priced TV for rural consumers, and followed it with ‘Cineplus.’ The Indian customers wanted the best products at reasonable prices; LG started introducing quality products in the economy range.


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

Saturday, January 05, 2013

INTERVIEW: IRANIAN AMBASSADOR TO INDIA

Iran has come through a lot and is now looking at the future with dreamy eyes. And now its relations with India matter

That’s why for more than 20 years, we have challenged each other. But at present, we want change. We want peace. For that they have got to trust us and we both have to respect each other. In public they say, they want close relations with Iran and will change their policy, but at the same time they impose economic sanctions against us. Iran has always tried its best to maintain good relations and spread peace and prosperity in the region, in other countries like Iraq, Afghanistan and Pakistan and Tajikistan.

B&E: Despite organisations like the Arab League or Organization of Islamic Conference (OIC), Islamic countries continue to be a divided lot. What role can Iran play in uniting them.

SM: Iran is already a member of a number of international organisations like OIC, Shanghai Cooperation Organization and SAARC. But one must understand that it is not only the Islamic countries which need to be united.

Infact, the whole of the Asian continent needs to be together and work together. This century belongs to Asia-not only because of the enrichment of their natural resources but also because of a vast pool of young and talented population. Many of the European countries, with negative growth of population are inviting our people to their countries. So in short, we have to share and support each other to make a broad Asian institution which will benefit both.

B&E: Israel and the US say that Iran interferes in Lebanon’s internal politics through Syria. How do you defend yourself?

SM: See, Lebanon has its own government. Some part of the land is occupied by Israel and the people of Lebanon are trying to get it back. Getting their rights back is the truth. If you go through history you will understand that Israelis came from outside and that they have no right to occupy the land. Now the Lebanese need justice and giving back the land to them is the truth.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
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Friday, January 04, 2013

Coral reefs facing the heat!?

A Stanford University study claims to have found heat-resistant coral reefs. But can slow adaptation keep pace with the changing environment?

There are many treasures hidden in the depths of the oceans; marine plants and animals aside, there’s more to this wealth than pearly oysters and treasures lost to sunken vessels. Anyone who has ever visited an aquarium or gone snorkelling would be familiar with these stunning creatures called corals. Yes, these plant or rock-like things aren’t actually either. They’re, in fact, animals that play a vital role in defining the structure of marine reefs (colonies of corals), which in turn are the source of vital nutrition for fish and other sea creatures who depend on them for their sustenance. But in spite of having called the oceans home for eons, corals are always at risk, sometimes owing to natural but largely due to man-made reasons. Almost 80 per cent of shallow reefs are over-fished and that’s significant, considering the fact that corals occupy less than one per cent of the total marine environment, which is home to over 25 per cent of all known marine fish species. Another factor is a phenomenon called coral bleaching in which a rise in ocean temperature makes corals lose colour and eventually die out. Says noted filmmaker and conservationist, Mike Pandey whose film Shores of Silence – Whale Sharks in India, won the Green Oscar, “Coral reefs are the first and the most prolific and sensitive ecosystem and origins of life. Global warming has killed thousands of coral reefs and many coral reefs in Lakshwadeep, Maldives and South East Asia have died because of oceans warming up.” But what about reports that Stanford University scientists have found evidence that some coral reefs are adapting and may actually survive global warming? “There are species that have adapted to climatic changes but adaptation and mutation takes millions of years. The slow adaptation cannot cope with the rapid change in environment,” maintains Mike.

There’s no denying that corals sustain livelihood, about two billion directly and three billion indirectly. They are also the breeding ground for 4500 species of fish. Reefs have died because of careless and reckless tourism. “Over thousands of fishes have been lost to Dynamite Fishing in South East Asia. A 1000 tonnes of corals and living shells are being drenched out and oiled to be sold as souvenirs every week.


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