Brands are like friends, good friends are honest and don't let friends down. This is, in brief, one of the points that Professor Abraham Koshy (
Read Profile ) made in his recent article on ET(Read Here).
Maruti-Suzuki A-Star's is an apt caselet for brand crisis prevention. Maruti-Suzuki's major, even if not the first, recall highlights the sea change in how Indian producers treat their consumers.
But when did Indian brands, let's say specifically, Indian automobile brands become good friends of the consumer?
One of the key effects of our open market economy in automobile industry is that Indian players are no more taking consumers for granted. Faced with powerful peers who are quality conscious, responsible and honest, Indian producers have learned that for them "it 's the right way, or the highway". It was also probably the oft blamed Indian 'chalta hai' attitude coupled with the existence of seller's market for a long time, that had led to manufacturers' propensity to ignore issues that bothered consumers.
In 1999, I purchased Enfield's first aluminium-engine bike called Machismo A350. The bike suffered from noisy valves that chattered wildly. But Enfield did nothing despite complaints and the bike failed miserably. New avatars of the bike emerged a couple of years later, but many were left holding lemons.
Then, take for example, Bajaj Chetak's famous 'tilting of the scooter' trick. Unless the scooter was tilted at a difficult angle, known only to an owner, the fuel wouldn't start flowing. I remember seeing this growing up in the '80s, when scooters ruled, as well as in the mid 2000s, when aerodynamic bikes whizzed past the humble scooter. Everyone knew it was a fuel problem (you did not see it in other scooters, by the way). But Bajaj did nothing, apparently, to fix the problem for 20 odd years. I guess after some time the tilting became an ownership statement, a romantic one at that. And Bajaj could probably get away because of the strong heritage value. A Bajaj scooter offered mass consumer value on which India rode for a few generations.
But at some point in time between the 90s and early 2000s two things overtook the Bajaj scooter phenomenon. First, were the Bajaj bikes, which themselves were a response to the flood of 100 cc bikes that, to name the pioneers, Hero Honda and TVS Suzukis had caused. The second was the shifting consumer preference. Who cared for a technologically stagnant product when there were so many options available? Pick up any auto magazine and see how many pages the bikes table, already written in small sized font, runs into. So, is this one of the reasons why the Bajaj scooter was put to rest?
Today, however, it is the buyer's market. Consumerism, aided by information-empowerment in the background of open competition has helped clean up the manufacturer's act and enabled consumer to 'unfriend' the brands she cannot trust.
Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts
2010-03-07
2008-03-15
Where is the pulp?
"Where's the pulp? Where's the pulp?" goes the tag line of a fruit drink being popularised, of late. Replace "pulp" with money or even 'reason' and you will know why markets should not rise in the near to medium term. By this, I mean that Sensex will probably not see sustained 17000 to 20000 levels in the next 8-12 months. As of last trading day, the Sensex closed a couple of hundred points below 16000.
Here's why:
1. Technically, at 16000, Sensex has a P/E of about 20, down from 28 at the start of year when record 21000 was breached. Analysts point out that P/E of 15-16 too is justifiable. This means that there is room for bottoming down. This is supported by the fact that 60% of the scrips constituting the Sensex are still trading at a P/E higher than their average 4-year P/E. It may mean they have room for rationalisation.
2. The FM has revised down the projected GDP growth for FY'09 from 'above 9%' to 'above 8%'. Analysts only expect 'more than 7%'.
3. Manufacturing sector has shown negative growth. Down to 5.3% this year, the growth the government says will be close to 11% next year. But there is a big slowdown cloud hanging over that. Given rising cost of imports, at a micro level, profitability will no doubt be impacted.
4. Agricultural output has not stirred any positive emotions while no new provision has been made for prodding agricultural growth. The 60K Cr waiver is not favourable to many or all, but that's another story by itself and it will not put an end to farmer suicides. For FY'08, a recent report forecasted a mere 0.9% growth in food grain output, down from 4.2% last year.
5. The Indian banking sector has only started to publicize its exposure to sub-prime funds.
6. IT sector is still trying to figure out what to make of the recession. But see no upward revision of guidance this year. The Rising Rupee, increase in direct costs and forecasted shortage of talent have already knocked off close to 30% in blue chip stocks. The end of tax holiday in the near future will only squeeze profitability. The flag bearer of 9% growth, services, will be marching only slower.
7. Inflation is rising higher. Already at a 9 month high of 5.11%, this time driven by rising costs (imports), it will be increasingly difficult to sustain operational margins.
8. Rising oil prices will continue to put pressure for an upward revision of petrol and diesel prices in India. But following the recent populist budget, the upward revision would not come by easily. Simply put, it would be an aberration to populist tendencies in preparation for the General Elections. So, oil companies will continue to show deep reds in their books.
9. Infrastructure is not doing that great. Look at the "good for nothing as of now" two 'swank' airports with national records of longest and tallest etc records to their names. Big airports, one already inaugurated, with no way to get to them.Their official launch has been postponed now. Each is an example of priorities that our 'leaders' have. Call the cause technical or political, the impact is economical.
10. Impending general elections may mean no path breaking reforms to bootstrap the above will be taken up now.
In the light of all these, FIIs, especially, hit hard on earnings in the sub-prime era may show faltering confidence, overall, in the current domestic economic scene. The sheen of India Shining episode is getting dulled down by lackluster or almost stalled reforms process.
What about Retail investors? Well, that category of traders or investors has not been driving the index. The recent IPOs have not done well and the market has all but tanked out and is bobbing up and down on a weekly basis. This gives no confidence to a retail investor. They will at best be cautious in putting their money in direct equity.
So, w.h.e.r.e. i.s. t.h.e. p.u.l.p?
Here's why:
1. Technically, at 16000, Sensex has a P/E of about 20, down from 28 at the start of year when record 21000 was breached. Analysts point out that P/E of 15-16 too is justifiable. This means that there is room for bottoming down. This is supported by the fact that 60% of the scrips constituting the Sensex are still trading at a P/E higher than their average 4-year P/E. It may mean they have room for rationalisation.
2. The FM has revised down the projected GDP growth for FY'09 from 'above 9%' to 'above 8%'. Analysts only expect 'more than 7%'.
3. Manufacturing sector has shown negative growth. Down to 5.3% this year, the growth the government says will be close to 11% next year. But there is a big slowdown cloud hanging over that. Given rising cost of imports, at a micro level, profitability will no doubt be impacted.
4. Agricultural output has not stirred any positive emotions while no new provision has been made for prodding agricultural growth. The 60K Cr waiver is not favourable to many or all, but that's another story by itself and it will not put an end to farmer suicides. For FY'08, a recent report forecasted a mere 0.9% growth in food grain output, down from 4.2% last year.
5. The Indian banking sector has only started to publicize its exposure to sub-prime funds.
6. IT sector is still trying to figure out what to make of the recession. But see no upward revision of guidance this year. The Rising Rupee, increase in direct costs and forecasted shortage of talent have already knocked off close to 30% in blue chip stocks. The end of tax holiday in the near future will only squeeze profitability. The flag bearer of 9% growth, services, will be marching only slower.
7. Inflation is rising higher. Already at a 9 month high of 5.11%, this time driven by rising costs (imports), it will be increasingly difficult to sustain operational margins.
8. Rising oil prices will continue to put pressure for an upward revision of petrol and diesel prices in India. But following the recent populist budget, the upward revision would not come by easily. Simply put, it would be an aberration to populist tendencies in preparation for the General Elections. So, oil companies will continue to show deep reds in their books.
9. Infrastructure is not doing that great. Look at the "good for nothing as of now" two 'swank' airports with national records of longest and tallest etc records to their names. Big airports, one already inaugurated, with no way to get to them.Their official launch has been postponed now. Each is an example of priorities that our 'leaders' have. Call the cause technical or political, the impact is economical.
10. Impending general elections may mean no path breaking reforms to bootstrap the above will be taken up now.
In the light of all these, FIIs, especially, hit hard on earnings in the sub-prime era may show faltering confidence, overall, in the current domestic economic scene. The sheen of India Shining episode is getting dulled down by lackluster or almost stalled reforms process.
What about Retail investors? Well, that category of traders or investors has not been driving the index. The recent IPOs have not done well and the market has all but tanked out and is bobbing up and down on a weekly basis. This gives no confidence to a retail investor. They will at best be cautious in putting their money in direct equity.
So, w.h.e.r.e. i.s. t.h.e. p.u.l.p?
2008-02-07
Cables and wars
Idle minds or devil's workshops, whatever you may call ours, but there seems to be some value in our paranoia, after all.
Last week, a friend and I were discussing about the 'yet to be officially acknowledged,by Fed Bank, but already heating up' recession in the US economy when the topic turned to how, apparently, wars have been fought just to revive or jumpstart flagging economies. Naturally, the discussion then turned to what the "Economic Hit men", if you may, would do to counter the stagflation lurking at US shores. It is widely prophesied that the impact of US recession would be minimal or marginal on the growth of emerging economies such as India.
Now, there is theory that wars in future would be not physical ones but more of 'intelligence wars', not in the sense of espionage but intelligence as relates to information and telecom technology pillaring economies. It leads to less bloodshed and, apparently, has more impact toward hampering the sustenance of normalcy in the enemy territory. The Internet, in such cases not only becomes a potential war ground, but an Achilles ‘heel for some economies. It was but natural for us to concur that stagflation and multiple cable damages were too much coincidental.
As far as the internet or the web is concerned, all roads lead to Rome. So, if something big goes down, it will probably slow down the flow of information, but networking technology will sustain the flow (with all disclaimers that apply). Apparently, this logic does not so easily apply to the Suez Canal cables. We were unaware of the criticality of 'these' cables.But looks like were not paranoid for no reason.
Read an article here to understand more about the nature and impact cable damages and to, at least to our surprise, know that we were not just dreaming out loud. Phew!
Einstein's point to ponder: "I am not sure how the third world war will be fought. But I am quite sure that the fourth one will be fought with bows and arrows."
Last week, a friend and I were discussing about the 'yet to be officially acknowledged,by Fed Bank, but already heating up' recession in the US economy when the topic turned to how, apparently, wars have been fought just to revive or jumpstart flagging economies. Naturally, the discussion then turned to what the "Economic Hit men", if you may, would do to counter the stagflation lurking at US shores. It is widely prophesied that the impact of US recession would be minimal or marginal on the growth of emerging economies such as India.
Now, there is theory that wars in future would be not physical ones but more of 'intelligence wars', not in the sense of espionage but intelligence as relates to information and telecom technology pillaring economies. It leads to less bloodshed and, apparently, has more impact toward hampering the sustenance of normalcy in the enemy territory. The Internet, in such cases not only becomes a potential war ground, but an Achilles ‘heel for some economies. It was but natural for us to concur that stagflation and multiple cable damages were too much coincidental.
As far as the internet or the web is concerned, all roads lead to Rome. So, if something big goes down, it will probably slow down the flow of information, but networking technology will sustain the flow (with all disclaimers that apply). Apparently, this logic does not so easily apply to the Suez Canal cables. We were unaware of the criticality of 'these' cables.But looks like were not paranoid for no reason.
Read an article here to understand more about the nature and impact cable damages and to, at least to our surprise, know that we were not just dreaming out loud. Phew!
Einstein's point to ponder: "I am not sure how the third world war will be fought. But I am quite sure that the fourth one will be fought with bows and arrows."
2008-01-22
Why we like Udayan Mukherjee:
Those who watch CNBC-TV18's 'India Business Hour' and 'Business Center' at dinner time, need no introduction to this smart face (Executive Editor) of the channel.
There have been times when I have thought Udayan Mukherjee (UM) is a super cool dude and times when I have also thought he is self righteous, but never condescending. Well, I am no great judge of people when a one way interaction happens over the Tube and the interaction is scripted and recorded. UM has the mannerisms of a seer, if I may say so. He speaks slowly in a way that the message is understood correctly, chooses his words carefully and during talk shows and interviews, UM is also very patient and under time constraints waits for the point be made by the other party. He displays the depth of analysis, insight and a lot of homework he would have needed and done before meeting the interviewee, a business honcho in most cases. He does not juggle around with jargon, any more than that needed to convey the technicals. Even so much sometimes flies over my head, but that's mea culpa, not the speaker's.
When you see the carpet of security get pulled out from under your feet, you need to understand from someone reliable, why it is happening. I may be exaggerating about the security part, but there is no doubt that I jumped up from my seat when I saw, in my portfolio, the 'blacks' becoming smaller and the 'reds' becoming deeper. Traders worry, investors don't; at least this one doesn't. Fundamental and blue chip investment is a 'horse for a long race', as they say in Indian parlance.
Yesterday, when the bloodbath happened in the markets, I was waiting for UM to speak out. UM said little yesterday about why of it, except the technicals of margin trading causing a bulk of the loss yesterday. Quite understandably, global cues from Dow and Nasdaq were missing, it being a weekend in The States. The cues would be missing today too, Monday being a holiday there. But, later today, surely the US would not go against a global wave of dipping indices?
In India, however, it was another day altogether. Cues from the eastern markets and the growing sense of uneasiness of the (already here? impending?) recession in the US economy and panic selling triggered by yesterday's losses, especially by those with muscle and those with short positions induced heavy selling, leading to the circuit breaking within a couple of minutes of the session opening. Many a fist has been wrung into the palm, many a tear shed and many a brow wiped by millions today. In the second half of a record smashing trading day, Bulls turned around the multitudes of 52-week lows and put brakws on the downslide , pulling the index up from, about -13% to -4.5%. If only, I were more liquid at this point in time, I myself might have added a nickel or two more.
It is at a time like this that one needs to drive home a simple message. One that this more of a reminder of a simple truth than a brainwave. Because it's "Just that our memories tend to be too short and our greed too much." (quoting the last line of UM's article today).Read here, UM's message today.
This article is one of several reasons why we like Udayan Mukherjee.
There have been times when I have thought Udayan Mukherjee (UM) is a super cool dude and times when I have also thought he is self righteous, but never condescending. Well, I am no great judge of people when a one way interaction happens over the Tube and the interaction is scripted and recorded. UM has the mannerisms of a seer, if I may say so. He speaks slowly in a way that the message is understood correctly, chooses his words carefully and during talk shows and interviews, UM is also very patient and under time constraints waits for the point be made by the other party. He displays the depth of analysis, insight and a lot of homework he would have needed and done before meeting the interviewee, a business honcho in most cases. He does not juggle around with jargon, any more than that needed to convey the technicals. Even so much sometimes flies over my head, but that's mea culpa, not the speaker's.
When you see the carpet of security get pulled out from under your feet, you need to understand from someone reliable, why it is happening. I may be exaggerating about the security part, but there is no doubt that I jumped up from my seat when I saw, in my portfolio, the 'blacks' becoming smaller and the 'reds' becoming deeper. Traders worry, investors don't; at least this one doesn't. Fundamental and blue chip investment is a 'horse for a long race', as they say in Indian parlance.
Yesterday, when the bloodbath happened in the markets, I was waiting for UM to speak out. UM said little yesterday about why of it, except the technicals of margin trading causing a bulk of the loss yesterday. Quite understandably, global cues from Dow and Nasdaq were missing, it being a weekend in The States. The cues would be missing today too, Monday being a holiday there. But, later today, surely the US would not go against a global wave of dipping indices?
In India, however, it was another day altogether. Cues from the eastern markets and the growing sense of uneasiness of the (already here? impending?) recession in the US economy and panic selling triggered by yesterday's losses, especially by those with muscle and those with short positions induced heavy selling, leading to the circuit breaking within a couple of minutes of the session opening. Many a fist has been wrung into the palm, many a tear shed and many a brow wiped by millions today. In the second half of a record smashing trading day, Bulls turned around the multitudes of 52-week lows and put brakws on the downslide , pulling the index up from, about -13% to -4.5%. If only, I were more liquid at this point in time, I myself might have added a nickel or two more.
It is at a time like this that one needs to drive home a simple message. One that this more of a reminder of a simple truth than a brainwave. Because it's "Just that our memories tend to be too short and our greed too much." (quoting the last line of UM's article today).Read here, UM's message today.
This article is one of several reasons why we like Udayan Mukherjee.
2008-01-17
Nano-voce-philia: Defined as...
...love of talking about Nano!
I am not a fanatic for the car per se but am for the principle behind it, for the alternatives Nano provides (still saying that it will be a big hot potato to swallow), the fundamentals it will change, utilitarian concept it embodies and frugal manufacturing technology it testifies. But for the record, I must admit that despite my fears about Nano, Nano is all over my mind. Nano is having an 'in your face' effect on me.
Nano is bound to change our lives and the signs are already showing. Here are some samples.
A recent article in the newspaper prophesied about the peripheral,in several meanings of the word,industries that will flourish in the shadow of Nano. Will not cheap (economical) accessories well embellish a cheap car? It also took a shot at how our conversations and attitudes and jargon would change to accommodate the shifts in paradigms that Nano would trigger. You might say I am progressively becoming a Nano-voce-philic (For good or bad, such people as yours truly like talking about Nano!). Now that is a word I made up. Is there a "Nano" word for someone who makes up Nano words? Nana-verbo-philic, perhaps? If you are getting the hang of it and think I am getting carried away, I have made my point.
If the masses get their bread should the 'nouveau' as well as the 'riche' not get their cakes? Dilip Chabbria has unveiled his impression of a car that could buy a hundred Nanos. Pegged at 1 crore, the rich man's space age answer to Nano will snub the masses with its antiNano philosphy. There in lies the irony: For the rich India, an answer to a frugal car is an extravagant car of similar dimensions with little else in common.
The irony also represents the socio-economic divide that has manifested in different forms in different cities. Be it the Bangalore-commons' quasi-despisal of those working in, literally, glass houses that are IT complexes. Opportunism, crime, harassment and verbal abuse against techies in Bangalore, Pune and other cities. It also shows up in the amplified pillage caused by mobs incited by any issue, the damage in which is mosty incommensurate to what one would expect in response(!) to the problem which triggered it in the first place.
Here is a more significant example of how Nano is raising its hydra-head even before it juggernauts onto the road ten months down the line. Read here about how Nano has upset another automobile manufacturer's grand plans. Electrotherm had a big idea of a small priced AutoRickshaw, but Nano would allow none of it. But as you would have read in the quoted article, ElectroTherm has plans of salvaging their project by converting the prototype into one that is electric and at the same time cheaper. Now, that is innovation driven by market forces. How often do we get witness that so closely and in the live?
We are in exciting times in India and, going by the international pulse, beyond. The show has just began. Nano has just entered the building.
PS: Now, would you call me a Nano-blogo-philic for that matter? Apologies to OUP for misusing the poetic license. For, officially, Oxford has done away with hyphenated words.
I am not a fanatic for the car per se but am for the principle behind it, for the alternatives Nano provides (still saying that it will be a big hot potato to swallow), the fundamentals it will change, utilitarian concept it embodies and frugal manufacturing technology it testifies. But for the record, I must admit that despite my fears about Nano, Nano is all over my mind. Nano is having an 'in your face' effect on me.
Nano is bound to change our lives and the signs are already showing. Here are some samples.
A recent article in the newspaper prophesied about the peripheral,in several meanings of the word,industries that will flourish in the shadow of Nano. Will not cheap (economical) accessories well embellish a cheap car? It also took a shot at how our conversations and attitudes and jargon would change to accommodate the shifts in paradigms that Nano would trigger. You might say I am progressively becoming a Nano-voce-philic (For good or bad, such people as yours truly like talking about Nano!). Now that is a word I made up. Is there a "Nano" word for someone who makes up Nano words? Nana-verbo-philic, perhaps? If you are getting the hang of it and think I am getting carried away, I have made my point.
If the masses get their bread should the 'nouveau' as well as the 'riche' not get their cakes? Dilip Chabbria has unveiled his impression of a car that could buy a hundred Nanos. Pegged at 1 crore, the rich man's space age answer to Nano will snub the masses with its antiNano philosphy. There in lies the irony: For the rich India, an answer to a frugal car is an extravagant car of similar dimensions with little else in common.
The irony also represents the socio-economic divide that has manifested in different forms in different cities. Be it the Bangalore-commons' quasi-despisal of those working in, literally, glass houses that are IT complexes. Opportunism, crime, harassment and verbal abuse against techies in Bangalore, Pune and other cities. It also shows up in the amplified pillage caused by mobs incited by any issue, the damage in which is mosty incommensurate to what one would expect in response(!) to the problem which triggered it in the first place.
Here is a more significant example of how Nano is raising its hydra-head even before it juggernauts onto the road ten months down the line. Read here about how Nano has upset another automobile manufacturer's grand plans. Electrotherm had a big idea of a small priced AutoRickshaw, but Nano would allow none of it. But as you would have read in the quoted article, ElectroTherm has plans of salvaging their project by converting the prototype into one that is electric and at the same time cheaper. Now, that is innovation driven by market forces. How often do we get witness that so closely and in the live?
We are in exciting times in India and, going by the international pulse, beyond. The show has just began. Nano has just entered the building.
PS: Now, would you call me a Nano-blogo-philic for that matter? Apologies to OUP for misusing the poetic license. For, officially, Oxford has done away with hyphenated words.
2007-12-05
Review of 'Snapshots from hell- The making of an MBA':
Set in the recent past,1988-1990, this book published in 1994 is a very funny, honest and absorbing take on the life of a Stanford MBA student. The author, Peter Robinson, does not spare himself or the college in describing his emotional roller coaster ride of realising his ambition to be a business graduate. With brutal honestness Robinson recounts, in first person narrative, his fears, failures and successes in overcoming the natural Poet (In Stanford lingo, a person who has no significant engineering, mathematical or financial educational background) in him while grappling with the quantitative-heavy Stanford syllabus.
This is a fictionalised autobiography in that the incidents in the story are all true and the protagonist or the observer is the author himself while the names, which could feasibly be changed have been masked. The author admits that 'there was no point in masking popular personalities' and so some of them from his friends' circle or faculty have been retained. Focussing primarily the first year and the summer internship period, Robinson traces his daily life with quotations from his personal journal. The natural flair of rhetoric that the author possesses is quite evident in three places: his pre-Stanford position as a speech writer for President Reagan; Robinson's own journal entries (no doubt written under heavy B-school-pressure) and the wit in storytelling itself.
The book is useful to any b-school student. But, it is especially required to be read by any student who is entering a well-placed or top b-school anywhere, as the philosophy or pedagogy of Stanford (like that of other global top b-schools) is bound to have influenced his or her school's didactics. What make this book timeless are the principles of selection and teaching of Stanford that are only pioneering and not transient, meaning that with time the best practices will only spread globally. The pedagogy and rigor influence a student's life significantly and therefore the experiences are bound to be similar. Today, this is especially true to India because we are witnessiing a globalisation of b-school education here, not suprisingly due to the free-market capitalisation being attempted by India, the growing demand for globally-experienced b-school graduates in Indian mainstream economy and the rise in ambition owing to affordability of quality b-school education. Of course, there are also more than ever Indian students who are able to afford and embrace international business schools.
The reader, especially, if he is in the target audience described earlier will instantly empathise with the author since within the first few pages, the author gives examples of various types of questions and analyses (and answer with diagrams) discussed in the class that added to the latter's misery. The reader thereby gets the benefit of learning about the mindset expected of a b-school student. The author describes with a natural sense of humour, his tribulations in mastering the apparently simple concepts (for the non-Poets) all along doubting his fitment in the Stanford's scheme of things.
During the course of the story, one also gets a glance at the recent history of the school and an understanding of the factors that challenged and led to the evolution of some of the top schools in the US. In the process of understanding the author's student-life, the readers are bound to get satisfactory answers to whether it was all worth it for the author and by extension lead to an introspection of their own motives. Of course, everything is relative and situational and then the book itself is not instructive; but, the subtle impact is lasting.
Wit, honesty and brevity are the key take-aways from Robinson's style.This is an unputdownable book and a must read for all b-school aspirants; an almost 'rite of passage' as I had been told.
Set in the recent past,1988-1990, this book published in 1994 is a very funny, honest and absorbing take on the life of a Stanford MBA student. The author, Peter Robinson, does not spare himself or the college in describing his emotional roller coaster ride of realising his ambition to be a business graduate. With brutal honestness Robinson recounts, in first person narrative, his fears, failures and successes in overcoming the natural Poet (In Stanford lingo, a person who has no significant engineering, mathematical or financial educational background) in him while grappling with the quantitative-heavy Stanford syllabus.
This is a fictionalised autobiography in that the incidents in the story are all true and the protagonist or the observer is the author himself while the names, which could feasibly be changed have been masked. The author admits that 'there was no point in masking popular personalities' and so some of them from his friends' circle or faculty have been retained. Focussing primarily the first year and the summer internship period, Robinson traces his daily life with quotations from his personal journal. The natural flair of rhetoric that the author possesses is quite evident in three places: his pre-Stanford position as a speech writer for President Reagan; Robinson's own journal entries (no doubt written under heavy B-school-pressure) and the wit in storytelling itself.
The book is useful to any b-school student. But, it is especially required to be read by any student who is entering a well-placed or top b-school anywhere, as the philosophy or pedagogy of Stanford (like that of other global top b-schools) is bound to have influenced his or her school's didactics. What make this book timeless are the principles of selection and teaching of Stanford that are only pioneering and not transient, meaning that with time the best practices will only spread globally. The pedagogy and rigor influence a student's life significantly and therefore the experiences are bound to be similar. Today, this is especially true to India because we are witnessiing a globalisation of b-school education here, not suprisingly due to the free-market capitalisation being attempted by India, the growing demand for globally-experienced b-school graduates in Indian mainstream economy and the rise in ambition owing to affordability of quality b-school education. Of course, there are also more than ever Indian students who are able to afford and embrace international business schools.
The reader, especially, if he is in the target audience described earlier will instantly empathise with the author since within the first few pages, the author gives examples of various types of questions and analyses (and answer with diagrams) discussed in the class that added to the latter's misery. The reader thereby gets the benefit of learning about the mindset expected of a b-school student. The author describes with a natural sense of humour, his tribulations in mastering the apparently simple concepts (for the non-Poets) all along doubting his fitment in the Stanford's scheme of things.
During the course of the story, one also gets a glance at the recent history of the school and an understanding of the factors that challenged and led to the evolution of some of the top schools in the US. In the process of understanding the author's student-life, the readers are bound to get satisfactory answers to whether it was all worth it for the author and by extension lead to an introspection of their own motives. Of course, everything is relative and situational and then the book itself is not instructive; but, the subtle impact is lasting.
Wit, honesty and brevity are the key take-aways from Robinson's style.This is an unputdownable book and a must read for all b-school aspirants; an almost 'rite of passage' as I had been told.
2007-11-02
Side-effects of globalisation
In the book 'The World is Flat", read short review here, Thomas Friedman illustrated globalisation via scores of, well, global firms, and one of them was Dell Inc. The supply chain intricacies at Dell lent themselves to the emergence of 'Dell Theory of Conflicts'. Like the book, my experience with Dell, albeit post-purchase, is no less speckled with side-effects of globalisation.
The story begins with the occurrence of a problem that turned my laptop into a lemon, defined here. I have been using a Dell Inspiron 5160 for close to three years now.This should tell you that with the basic warranty long expired and without extended or global warranty I am vulnerable. And until recently, I was oblivious to the existence of #M1004. This is the error code Dell-ians see on the BIOS screen after their laptop is 'preventively shutdown to avoid damage due to overheating'.
I saw this error for the first time few months ago,soon after I upgraded the RAM four times over to 2 GB. I was hoping to get more out of my laptop. I was getting more heat out of it, alright! This paralysed my normal usage of the laptop, since the preventive shutdown happened at 70 degree C, which was reached within 40 minutes of operation. Thus began my research on the problem that had fortunately or unfortunately eluded me since the laptop had arrived at my doorstep. Googling #M1004 gave me more than I had expected. Dell 5150 and 1150 were doomed as far as I could see in online forums.5160, though an evolved version of 5150 with 'fixes to avoid overheating' and at least did not 'melt' or 'explode', still suffered from bad ventilation design. More research told me that the motherboard-heat-sink combo were defective and there were class action suits in Canada and the US. Apparently, even the devout Dell-ians were peeved.
Recently I learnt that, since early 2006, Dell had been replacing the defective hardware for free (one time only). Wow and Oops!"Wow!" because the combo hardware costs close to Rs 25K (half the cost of laptop) and it requires substantial commitment from Dell to replace it for hundreds of thousands of laptops sold out of the Inspiron lot. while I also know that from Dell's point of view a case-by-case replacement would be cheaper than a recall. "Oops!" because I m now living in India and my laptop has a US warranty which has expired.
So, I started tracing the steps followed by many to gain temporary or in some cases permanent relief. BIOS upgrade came first. Version 8 of the BIOS cought to optimise fan operation. But it did not help. Cleaning the vents and heat sink was the next possibility. With more research, I learnt to open a Dell Laptop and was amazed at how neatly so much is packed in 1.5 inch thickness (5160 has older design). I stopped short of opening the heat sink assembly. My gut told me that I should contact Dell India and find out what they can do; give me some the minimum coverage at least.
I was surprised by the support Dell gave me. I placed an online request, to which I got a response within 10 hours. As far as the US ownership was concerned, I was told that I could initiate a transfer to Dell India. That would eventually happen, but meanwhile I could run hardware diagnostic tests (I had told Dell India that I am an advanced computer user, hadn't I?). After sharing the results with Dell India, I not only got a phone call confirming the problem but was also , hold your breath, told that Dell would replace the motherboard and heat sink for free!
That I got such good service ought be a side effect of globalisation. Of course, with significant Indian operations, offering service to Indian customers is but imperative. Having made the original purchase in the US probably gave me some edge for getting prompt service; but I have a feeling I would have got it even otherwise. I am saying this based on the fact that last year Nikon India had replaced a defective power module, post warranty, in my digital camera. (They did charge me a service and shipping fee). Nikon USA had at that time made free replacement for cameras within warranty period. Both the pieces of equipment had been widely acknowledged as being defective; in case of Dell, leading to class action suits in North America. But to benefit from an America lawsuit sitting in India?
The ease with which all transactions happened tells a lot about the CRM commitment global companies ought to provide, irrespective of customers' global location. Global companies have to put more effort in giving one face to their brands. They cannot discriminate, because an Indian customer today can be a customer in the US tomorrow or, the day after, one in Japan. American regulatory system ensure compliance to frameworks for resolving to conflicts between sellers and buyers. Be it in the BRIC or other emerging economy nations, buyers are more aware and more enabled, not just by information, read as Internet, but also by the expectations they have from brands. They have the money to buy top brand items. If you are paying top dollar, literally, you deserve top dollar service. This is evident in other popular examples such as the Dell's global replacement of laptop batteries and more recently Nokia's worldwide replacement of certain cellphone batteries.
Hopefully the new heat sink and motherboard will perform better. Whatever the side effect, I am happy Dell customer now. #M1004 anyone?
The story begins with the occurrence of a problem that turned my laptop into a lemon, defined here. I have been using a Dell Inspiron 5160 for close to three years now.This should tell you that with the basic warranty long expired and without extended or global warranty I am vulnerable. And until recently, I was oblivious to the existence of #M1004. This is the error code Dell-ians see on the BIOS screen after their laptop is 'preventively shutdown to avoid damage due to overheating'.
I saw this error for the first time few months ago,soon after I upgraded the RAM four times over to 2 GB. I was hoping to get more out of my laptop. I was getting more heat out of it, alright! This paralysed my normal usage of the laptop, since the preventive shutdown happened at 70 degree C, which was reached within 40 minutes of operation. Thus began my research on the problem that had fortunately or unfortunately eluded me since the laptop had arrived at my doorstep. Googling #M1004 gave me more than I had expected. Dell 5150 and 1150 were doomed as far as I could see in online forums.5160, though an evolved version of 5150 with 'fixes to avoid overheating' and at least did not 'melt' or 'explode', still suffered from bad ventilation design. More research told me that the motherboard-heat-sink combo were defective and there were class action suits in Canada and the US. Apparently, even the devout Dell-ians were peeved.
Recently I learnt that, since early 2006, Dell had been replacing the defective hardware for free (one time only). Wow and Oops!"Wow!" because the combo hardware costs close to Rs 25K (half the cost of laptop) and it requires substantial commitment from Dell to replace it for hundreds of thousands of laptops sold out of the Inspiron lot. while I also know that from Dell's point of view a case-by-case replacement would be cheaper than a recall. "Oops!" because I m now living in India and my laptop has a US warranty which has expired.
So, I started tracing the steps followed by many to gain temporary or in some cases permanent relief. BIOS upgrade came first. Version 8 of the BIOS cought to optimise fan operation. But it did not help. Cleaning the vents and heat sink was the next possibility. With more research, I learnt to open a Dell Laptop and was amazed at how neatly so much is packed in 1.5 inch thickness (5160 has older design). I stopped short of opening the heat sink assembly. My gut told me that I should contact Dell India and find out what they can do; give me some the minimum coverage at least.
I was surprised by the support Dell gave me. I placed an online request, to which I got a response within 10 hours. As far as the US ownership was concerned, I was told that I could initiate a transfer to Dell India. That would eventually happen, but meanwhile I could run hardware diagnostic tests (I had told Dell India that I am an advanced computer user, hadn't I?). After sharing the results with Dell India, I not only got a phone call confirming the problem but was also , hold your breath, told that Dell would replace the motherboard and heat sink for free!
That I got such good service ought be a side effect of globalisation. Of course, with significant Indian operations, offering service to Indian customers is but imperative. Having made the original purchase in the US probably gave me some edge for getting prompt service; but I have a feeling I would have got it even otherwise. I am saying this based on the fact that last year Nikon India had replaced a defective power module, post warranty, in my digital camera. (They did charge me a service and shipping fee). Nikon USA had at that time made free replacement for cameras within warranty period. Both the pieces of equipment had been widely acknowledged as being defective; in case of Dell, leading to class action suits in North America. But to benefit from an America lawsuit sitting in India?
The ease with which all transactions happened tells a lot about the CRM commitment global companies ought to provide, irrespective of customers' global location. Global companies have to put more effort in giving one face to their brands. They cannot discriminate, because an Indian customer today can be a customer in the US tomorrow or, the day after, one in Japan. American regulatory system ensure compliance to frameworks for resolving to conflicts between sellers and buyers. Be it in the BRIC or other emerging economy nations, buyers are more aware and more enabled, not just by information, read as Internet, but also by the expectations they have from brands. They have the money to buy top brand items. If you are paying top dollar, literally, you deserve top dollar service. This is evident in other popular examples such as the Dell's global replacement of laptop batteries and more recently Nokia's worldwide replacement of certain cellphone batteries.
Hopefully the new heat sink and motherboard will perform better. Whatever the side effect, I am happy Dell customer now. #M1004 anyone?
2007-10-18
Transforming India with a Reality Show
Since the last anniversary - the diamond jubilee - of Indian Independence, readers of a leading Indian tabloid have been cajoled, enthused and shaken-to-be-awakened to the reality of 'Indian system'. Those with sincere (as in willing work full-time) intentions of bringing about a transformation in Indian system have been challenged to come forward and spearhead the 'Lead India' campaign. At the end of a process that was a mix of job-or-B-school-interview and election campaign and which generated excitement a la American Idol with its SMS polls, city-level winners were announced today.
All is good, so far. A company, and quite ably in the publishing and visual media domain, has taken this up. A media firm of its size is apt for this type of initiative simply because it has the muscle and the means to garner sponsorship, information and publicity that the initiative would need. At least someone is doing something about it! With the tabloid's existing readership demographic, the campaign will probably reach the right people who ought to and may care - the youth.
A report card, in the paper today, then stated the next steps of this process. Apparently, the next part of the selection process will be a TV program where in the winners of the city-level competitions will compete in a 'live reality show'. Now, why did I not see this coming?
Reality Show is the order of the day.You give some and you get some. And the media company in questions makes no claims about 'Lead India' venture (that should be the correct term, it is not just an initiative) being a charitable one. No problems with that. It would make no business sense for the tabloid to invest crores of rupees in dedicating hundreds of square inches of advertising space over several weeks to 'jagao' the public about this venture and invite dedicated individuals into this mission.
The keen sense of marketing used behind this is worth noting . They identified the right theme-transform India, they chose the right time- the diamond jubilee, they chose the right medium -a tabloid popular with the youth, and now in a symbiotic operation the group will use print and visual media together to propogate, provoke and prompt the citizens to stand up for themselves and be led by the chosen one. I hope the intentions and the drive can be sustained.
Until a critical mass is reached, any transformation of almost a revolutionary scale is not possible. NGOs and other social activists have been trying to do what 'Lead India' is attempting. The difference is that the former groups' voice did not reach as far what Lead India campaigners have managed to cross (?). So, commercialization (Priyanka Chopra and Shah Rukh Khan are two of the public faces of this campaign) is the way forward. Mass movements require mass communication and today television is no doubt the best mass influencer. The reality show show that will identify the champion for Leading India will probably also find the TRP ratings the network is looking for. After all, we all want India to improve and we all want to have a say in who will do it on our behalf. And if you can involve everyone through their TV sets, it is a win-win-win (sic) for the people, the network and the sponsors.
How for will this go?
Cliched it may be be, but it needs to be said that one needs to have political clout as politicains call the shots at the administrators and bureaucrats. I think 'Lead India' campaign will lead to the emergence of a political party in the next few years, if the initiave- sorry, the venture- finds people's accpetance. One that will have a secular, progressive, anti-corruption based mandate (I can join a party with this jargon!).
While the 'Lead India' campaigners have hit upon a great idea and will probably see it through (over many years, if not decades that it will require), one can almost expect opportunistic businessmen build around this idea to set-up similar ventures to exploit the let's-change-India-weakness of the educated masses and to rake in moolah in the process. It could then become a ropeway for the publicity-hungry and wannabe-but-don't-have-it-to-be publicity mongers. The contribution of such people would be as much as those of item numbers to classical dance.
Anyway, this is a beginning. What seemed like a publicity stunt is increasingly seeming to be a genuine effort to identify true leaders who have it in them; this going by the profiles of those shortlisted. But it may be too soon to talk about the efficacy of the operation.
But will they be able to change India? I cannot say, but I do hope. A reality show may help get the balls if not the hearts to achieve this.
All is good, so far. A company, and quite ably in the publishing and visual media domain, has taken this up. A media firm of its size is apt for this type of initiative simply because it has the muscle and the means to garner sponsorship, information and publicity that the initiative would need. At least someone is doing something about it! With the tabloid's existing readership demographic, the campaign will probably reach the right people who ought to and may care - the youth.
A report card, in the paper today, then stated the next steps of this process. Apparently, the next part of the selection process will be a TV program where in the winners of the city-level competitions will compete in a 'live reality show'. Now, why did I not see this coming?
Reality Show is the order of the day.You give some and you get some. And the media company in questions makes no claims about 'Lead India' venture (that should be the correct term, it is not just an initiative) being a charitable one. No problems with that. It would make no business sense for the tabloid to invest crores of rupees in dedicating hundreds of square inches of advertising space over several weeks to 'jagao' the public about this venture and invite dedicated individuals into this mission.
The keen sense of marketing used behind this is worth noting . They identified the right theme-transform India, they chose the right time- the diamond jubilee, they chose the right medium -a tabloid popular with the youth, and now in a symbiotic operation the group will use print and visual media together to propogate, provoke and prompt the citizens to stand up for themselves and be led by the chosen one. I hope the intentions and the drive can be sustained.
Until a critical mass is reached, any transformation of almost a revolutionary scale is not possible. NGOs and other social activists have been trying to do what 'Lead India' is attempting. The difference is that the former groups' voice did not reach as far what Lead India campaigners have managed to cross (?). So, commercialization (Priyanka Chopra and Shah Rukh Khan are two of the public faces of this campaign) is the way forward. Mass movements require mass communication and today television is no doubt the best mass influencer. The reality show show that will identify the champion for Leading India will probably also find the TRP ratings the network is looking for. After all, we all want India to improve and we all want to have a say in who will do it on our behalf. And if you can involve everyone through their TV sets, it is a win-win-win (sic) for the people, the network and the sponsors.
How for will this go?
Cliched it may be be, but it needs to be said that one needs to have political clout as politicains call the shots at the administrators and bureaucrats. I think 'Lead India' campaign will lead to the emergence of a political party in the next few years, if the initiave- sorry, the venture- finds people's accpetance. One that will have a secular, progressive, anti-corruption based mandate (I can join a party with this jargon!).
While the 'Lead India' campaigners have hit upon a great idea and will probably see it through (over many years, if not decades that it will require), one can almost expect opportunistic businessmen build around this idea to set-up similar ventures to exploit the let's-change-India-weakness of the educated masses and to rake in moolah in the process. It could then become a ropeway for the publicity-hungry and wannabe-but-don't-have-it-to-be publicity mongers. The contribution of such people would be as much as those of item numbers to classical dance.
Anyway, this is a beginning. What seemed like a publicity stunt is increasingly seeming to be a genuine effort to identify true leaders who have it in them; this going by the profiles of those shortlisted. But it may be too soon to talk about the efficacy of the operation.
But will they be able to change India? I cannot say, but I do hope. A reality show may help get the balls if not the hearts to achieve this.
2007-08-17
Would you buy a OneLakhCar? (Part-2)
What if the OneLakhCar were to become popular?
Nightmare! I am not saying everyone should not have a car. I am just surmising about what will happen if they do. Are were prepared for it at any level? There are several ways to slice this issue. Here are some that came to my mind.
Roads: Indian cities are not built to accommodate so many cars, not so soon at least. And cities like Bangalore, definitely not, with chock-a-block two-lane roads, piled-up four-lane ones. Mayhem will be an understatement for what we will witness. As if autorickshaws are not a menace enough that we need more of such devilish vehicles. Come to think of it, the economy of a OneLakhCar (A Bajaj 3-wheeler costs 1.75 lakhs on road) combined with the promise of a 5-seat capacity, might just mean we will see the end of these reckless rattlers which are nothing but necessary evil. This is probably the only positive outcome of the OneLakhCar.
Traffic Indiscipline: Not all people who drive cars can ride bikes, probably because they never learnt to ride a bicycle (basic reason, reasons of relative safety keeps many off the roads). People who might otherwise not have driven because they could only afford a bike they could not ride, will be more inclined to drive. So, we will see more new drivers. For Indian drivers 'Driving is a privilege not a right' are words lost in the din. One can get a license to drive a car if he has a couple of hundred bucks in his pocket. With such abysmal regulation on who is given license to drive, the potential havoc caused by millions of more car drivers on roads leaves little to imagination.
Parking space and its effect on real estate: Go to the 'downtown' areas in any of the cities and you will notice that we just do not have the space to keep these cars. Even now, parking is not very economical, if available at all. Not just commercial parking, but personal parking too is important. How many of the builders with 600 apartments or more in a compound have actually planned for a car in every family? With such need for parking space, real estate prices will move north.
Environmental concerns: Emission levels will probably be low for a small engine like that of OneLakhCar's but only if the right fuel is used and the car is regularly tuned and maintained. What if adulterated and mixed (for economic benefit) fuel is used? People do it with a 1.75 Lakh rickshaw. Will they refrain from experimenting on a 1 Lakh Car? Pollution control is not as strictly enforced as required, except probably in the National Capital Region.
How will these cars be recycled (they will need to be at some point in time)? Most of the junked cars end up being cannibalised for spare parts (legal only in some cases) or their metal parts being melted and recycled. What will you do with millions of tonnes of composite frames and bodies of the OneLakhCars? Bio-degradable waste is itself difficult to dispose (for reasons of volume), where will we find space to dump composite bodies?
More cars, more green house emissions, more global warming. This outcome was always expected, but the OneLakhCar will only accelerate this process. No, I am not saying people should stop buying cars. Technologically advanced those maybe, but five times as many cars as in India are sold in the US itself. Why should Indians not be buying them? Fair, if India were not per-capita a 9th the size of the US. The thought that one million cars will be sold every year is mindboggling. Current annual car sales in India stand at about 600,000; there will be three times as many cars getting into Indian roads every year, if the TATAs meet their target.
Two-wheeler business will be worst hit, as repeat bike buyers are expected to be converted in to car buyers. Heavy pressure to push prices and costs down will only lead to planned declines in production of bikes and it will be no surprise if other companies too convert their facilities to make variants of the OneLakhCar. Renault has plans to bring out the $3000 car with Bajaj auto (talks with M&M fell through). The Renault car will be probably be more advanced than OneLakhCar in terms of safety as it has a higher tag.
In principle, Ratan Tata's dream of getting a car into every home may turn out to be a pyrrhic victory. The economical car may come at a big price for India in the long run. Rise in standard of living of socio-economic categories, as my untrained-in-economic-theories-mind perceives happens when the affordability of goods increases based on true increase in income to reach that level of affordability not when the level of affordability is brought down to existing levels of income. Commoditisation happens when the latter phenomenon is brought about. In a gimpy infrastructure, only the load on the system increases when commoditisation happens in items such as cars.Were these cars special in terms of environment-friendly technology such as electric or solar, the argument could have been reversed. Apparently, they are not.
Maybe I am being simply too biased against this car for some paranoia I cannot explain. Maybe it will not be so bad after all. Maybe I have not fathomed the adapting power of the Indian system. Then maybe, I am just dreaming!
What if the OneLakhCar were to become popular?
Nightmare! I am not saying everyone should not have a car. I am just surmising about what will happen if they do. Are were prepared for it at any level? There are several ways to slice this issue. Here are some that came to my mind.
Roads: Indian cities are not built to accommodate so many cars, not so soon at least. And cities like Bangalore, definitely not, with chock-a-block two-lane roads, piled-up four-lane ones. Mayhem will be an understatement for what we will witness. As if autorickshaws are not a menace enough that we need more of such devilish vehicles. Come to think of it, the economy of a OneLakhCar (A Bajaj 3-wheeler costs 1.75 lakhs on road) combined with the promise of a 5-seat capacity, might just mean we will see the end of these reckless rattlers which are nothing but necessary evil. This is probably the only positive outcome of the OneLakhCar.
Traffic Indiscipline: Not all people who drive cars can ride bikes, probably because they never learnt to ride a bicycle (basic reason, reasons of relative safety keeps many off the roads). People who might otherwise not have driven because they could only afford a bike they could not ride, will be more inclined to drive. So, we will see more new drivers. For Indian drivers 'Driving is a privilege not a right' are words lost in the din. One can get a license to drive a car if he has a couple of hundred bucks in his pocket. With such abysmal regulation on who is given license to drive, the potential havoc caused by millions of more car drivers on roads leaves little to imagination.
Parking space and its effect on real estate: Go to the 'downtown' areas in any of the cities and you will notice that we just do not have the space to keep these cars. Even now, parking is not very economical, if available at all. Not just commercial parking, but personal parking too is important. How many of the builders with 600 apartments or more in a compound have actually planned for a car in every family? With such need for parking space, real estate prices will move north.
Environmental concerns: Emission levels will probably be low for a small engine like that of OneLakhCar's but only if the right fuel is used and the car is regularly tuned and maintained. What if adulterated and mixed (for economic benefit) fuel is used? People do it with a 1.75 Lakh rickshaw. Will they refrain from experimenting on a 1 Lakh Car? Pollution control is not as strictly enforced as required, except probably in the National Capital Region.
How will these cars be recycled (they will need to be at some point in time)? Most of the junked cars end up being cannibalised for spare parts (legal only in some cases) or their metal parts being melted and recycled. What will you do with millions of tonnes of composite frames and bodies of the OneLakhCars? Bio-degradable waste is itself difficult to dispose (for reasons of volume), where will we find space to dump composite bodies?
More cars, more green house emissions, more global warming. This outcome was always expected, but the OneLakhCar will only accelerate this process. No, I am not saying people should stop buying cars. Technologically advanced those maybe, but five times as many cars as in India are sold in the US itself. Why should Indians not be buying them? Fair, if India were not per-capita a 9th the size of the US. The thought that one million cars will be sold every year is mindboggling. Current annual car sales in India stand at about 600,000; there will be three times as many cars getting into Indian roads every year, if the TATAs meet their target.
Two-wheeler business will be worst hit, as repeat bike buyers are expected to be converted in to car buyers. Heavy pressure to push prices and costs down will only lead to planned declines in production of bikes and it will be no surprise if other companies too convert their facilities to make variants of the OneLakhCar. Renault has plans to bring out the $3000 car with Bajaj auto (talks with M&M fell through). The Renault car will be probably be more advanced than OneLakhCar in terms of safety as it has a higher tag.
In principle, Ratan Tata's dream of getting a car into every home may turn out to be a pyrrhic victory. The economical car may come at a big price for India in the long run. Rise in standard of living of socio-economic categories, as my untrained-in-economic-theories-mind perceives happens when the affordability of goods increases based on true increase in income to reach that level of affordability not when the level of affordability is brought down to existing levels of income. Commoditisation happens when the latter phenomenon is brought about. In a gimpy infrastructure, only the load on the system increases when commoditisation happens in items such as cars.Were these cars special in terms of environment-friendly technology such as electric or solar, the argument could have been reversed. Apparently, they are not.
Maybe I am being simply too biased against this car for some paranoia I cannot explain. Maybe it will not be so bad after all. Maybe I have not fathomed the adapting power of the Indian system. Then maybe, I am just dreaming!
2007-08-16
Would you buy a OneLakhCar? (Part-1)
TATAs are not blusterers and they have delivered in the past. Making it the 3rd largest player, TATA Motors has 17% marketshare in passenger car segment. Tata Motors has never had it this good in the last few years despite general declining sales in auto industry, commercial included. TATA Ace has bridged the gap of the 'perfect vehicle' for last-mile logistics, with its 1-tonner 'tempo' which is selling like hot cakes. Ace's commercial passenger cousin 'Magic' is similarly expected to set tracks on fire . One last tidbit: in commercial segment, TATAs have a whopping 65% share. Having put them in this perspective, it would be goosey to say TATAs have not read the market.
But in an upwardly mobile middle class, would a 1 Lakh Car be popular?
There are many dimensions one must consider before answering the question. Living in a city and seeing more and more newly-introduced models from Hyundai, Honda, Corolla, GM, Ford and MUL swoosh by on urban roads (I believe there is deep but random penetration in villages too), I have my reservations about this car. Rural market might be the target, but if the OneLakhCar is competing with Maruti800, one must take into consideration that the latter has seen steady decline in sales even in rural markets in the last two years.
When MUL came out with the original Maruti-Suzuki in the 80s, indeed, the objective was to bring home an affordable car for the common man and a 1 Lakh (or so) tag was acceptable at the time. And what a car it was with original Japanese engine and know-how! The bean car brought in a technological leap in auto industry. None of the indigenously built cars could match up to what Maruti-Suzuki offered. Be it size-wise performance, maintenance or economy of ownership. There is little that needs to be said about MUL's success. So, the idea behind Maruti was a noble one, if you know what I mean.
In principle, the intent behind the OneLakhCar seems to be less nobler (for lack of another term). Affordability seems to be the only criterion for this car. Of course, the TATA quality and brand will assure that the car is not made with cheap parts (brand equity based assumption), but price seems to be the only basis for differentiation, something that will not incite enthusiasm in every buyer.
To push down costs, there are bound to be compromises (within the realm of TATAs brand equity). Component manufacturers have invested capital hedging on the success of the car. Metal costs only rising, the body of the car is said to be of composite material rather than steel or aluminium. (This has been done before- the most elegant example being the sexy Corvette. But hey, they may not use the same stuff here!)Unofficial estimates put the margin-to-manufacturer at Rs.5000 per car. Further, based on work done by analysts, having invested Rs.6000 Crores, TATAs have to sell 1 million cars every year (and they plan to) for four years to break even. Is this possible?
Recent announcement that by year 2009, air-bags in new passenger cars will be no more optional but factory-fitted-mandatory, it is worth asking if the OneLakhCar has this cost built in. Or will it only be 1 Lakh ex factory? Costs toward Bharat IV and EURO III norms would no doubt have been built in.
What about the design? Speculation is rife on whether the car will be a Reva look-alike, Mini-Indica(!) or the Lankan MiniCar (a rounded Reva, I found out after some Googling). Whatever it is, on a 600cc engine, one cannot expect a huge frame. Then how will it be a four or five seater? I secede, I am not design-savvy.
There is a growing need for mobility given the changing lifestyles and lame public transport. The culture of using public transportation is slumping for several reasons, affordability not being the least of them. Mobikes and scooties if not cars fill parking lots of colleges and sometimes schools. The average price of mobikes has crossed Rs.50K, and that of high end indigenous bikes is closing in to Rs. 1 Lakh. Relative safety considerations and the aspirational value of a car would thereby sway a first time buyer or a two-wheeler owner toward the OneLakhCar.
So, there is a reasonable chance that the car will be popular since there is a huge market out there. And there is no offering in this segment right now.
(Coming up...what will happen if the OneLakhCar does its magic.)
TATAs are not blusterers and they have delivered in the past. Making it the 3rd largest player, TATA Motors has 17% marketshare in passenger car segment. Tata Motors has never had it this good in the last few years despite general declining sales in auto industry, commercial included. TATA Ace has bridged the gap of the 'perfect vehicle' for last-mile logistics, with its 1-tonner 'tempo' which is selling like hot cakes. Ace's commercial passenger cousin 'Magic' is similarly expected to set tracks on fire . One last tidbit: in commercial segment, TATAs have a whopping 65% share. Having put them in this perspective, it would be goosey to say TATAs have not read the market.
But in an upwardly mobile middle class, would a 1 Lakh Car be popular?
There are many dimensions one must consider before answering the question. Living in a city and seeing more and more newly-introduced models from Hyundai, Honda, Corolla, GM, Ford and MUL swoosh by on urban roads (I believe there is deep but random penetration in villages too), I have my reservations about this car. Rural market might be the target, but if the OneLakhCar is competing with Maruti800, one must take into consideration that the latter has seen steady decline in sales even in rural markets in the last two years.
When MUL came out with the original Maruti-Suzuki in the 80s, indeed, the objective was to bring home an affordable car for the common man and a 1 Lakh (or so) tag was acceptable at the time. And what a car it was with original Japanese engine and know-how! The bean car brought in a technological leap in auto industry. None of the indigenously built cars could match up to what Maruti-Suzuki offered. Be it size-wise performance, maintenance or economy of ownership. There is little that needs to be said about MUL's success. So, the idea behind Maruti was a noble one, if you know what I mean.
In principle, the intent behind the OneLakhCar seems to be less nobler (for lack of another term). Affordability seems to be the only criterion for this car. Of course, the TATA quality and brand will assure that the car is not made with cheap parts (brand equity based assumption), but price seems to be the only basis for differentiation, something that will not incite enthusiasm in every buyer.
To push down costs, there are bound to be compromises (within the realm of TATAs brand equity). Component manufacturers have invested capital hedging on the success of the car. Metal costs only rising, the body of the car is said to be of composite material rather than steel or aluminium. (This has been done before- the most elegant example being the sexy Corvette. But hey, they may not use the same stuff here!)Unofficial estimates put the margin-to-manufacturer at Rs.5000 per car. Further, based on work done by analysts, having invested Rs.6000 Crores, TATAs have to sell 1 million cars every year (and they plan to) for four years to break even. Is this possible?
Recent announcement that by year 2009, air-bags in new passenger cars will be no more optional but factory-fitted-mandatory, it is worth asking if the OneLakhCar has this cost built in. Or will it only be 1 Lakh ex factory? Costs toward Bharat IV and EURO III norms would no doubt have been built in.
What about the design? Speculation is rife on whether the car will be a Reva look-alike, Mini-Indica(!) or the Lankan MiniCar (a rounded Reva, I found out after some Googling). Whatever it is, on a 600cc engine, one cannot expect a huge frame. Then how will it be a four or five seater? I secede, I am not design-savvy.
There is a growing need for mobility given the changing lifestyles and lame public transport. The culture of using public transportation is slumping for several reasons, affordability not being the least of them. Mobikes and scooties if not cars fill parking lots of colleges and sometimes schools. The average price of mobikes has crossed Rs.50K, and that of high end indigenous bikes is closing in to Rs. 1 Lakh. Relative safety considerations and the aspirational value of a car would thereby sway a first time buyer or a two-wheeler owner toward the OneLakhCar.
So, there is a reasonable chance that the car will be popular since there is a huge market out there. And there is no offering in this segment right now.
(Coming up...what will happen if the OneLakhCar does its magic.)
2006-09-29
Airplanes don't have windows...
Airplanes don't have windows that can be opened. This deep realisation came about on a late-nighter from Chennai toBangalore on Air Deccan. About 50 of us houseful on (ATR) propeller-driven aircraft were feeling like being inside a sky-sauna. It was a perfect picture except that we had not asked for it and we did not like it.
Escape from Chennai-heat was ephemeral as I relised when I dashed into the plane. For the uninitiated, there is free seating on Air Deccan. And I was beginning to pride myself at the unapparent agility I had displayed to get myself a seat-near-emergency-exit-with-more-leg-room; for the second time in two days. 'Outside is better' is rarely something a person from Bangalore says about Chennai weather. But even before people had begun to settle down in their seats of choice or of compromise as the case may be, I could hear several voices hollering the hapless stewardess. 'AC costs money, man!' I heard from a far corner.
Let's call her just 'S'. It was written all over her face that S had had a long day, and I don't mean just the multiple hops her plane had made since her day had begun. A hint of grit that she had done this before and could take one more of this was evident in the confidence with which she told us that the AC was not working efficiently 'today'; and that things may get better when we would be airborne. She had come by our seats to brief us about the special instructions we needed to know as the people guarding emergency exits. It was then that we had not-so-subtly hinted that we were uncomfortable in the heat.
One hour is all I need to get through with- I was telling myself when the reading lights went out! Anticipating panic, 'S' made a quick and rather brave announcement that the lights would come back when the 'jets were started' (I was too uncomfortable to corroborate the relevance of jet to a propeller plane). But my thoughts were drowned in the roar of the propeller, which told me I was closer to Bangalore by 1 more minute. I was already imagining that it would be cool in Bangalore at 11:15 PM when we would disembark from the hottest thing on earth or hovering over it.
I was also looking forward to the refreshments that I could buy onboard. 'Simplifly' air mag says that the on-board refreshments business is an alternative profit stream for AD . I am OK with the markups on water and juice they sell. But as luck would have it 'S' started from the far end. (Damn Murphy's laws!). She was also interrupted by a gentleman who had to visit the loo. 'S' had to backtrack the cart to let the gentleman through. She started again and then had to backtrack again after he returned. My deep interest in this charade was driven by the fact that I was growing thirstier by the minute; my discomfort validated by a white gentleman who had bravely kept his jacket on until now and who had decided on giving up. Obviously, a lot of people needed refreshments and it only made my wait more agonising. In the middle of all this, the evil side of mind pondered on whether this entire 'NO AC' situation was a conspiracy to sell refreshments. No, too long a shot, forget it!-I silenced the dark angel.
Again, what do they say about great expectations? I was to find out soon when S handed me a bottle of Chota Bisleri and a tetra pack of 'B Natural Guava juice'. 'Can I please have something cold?' I asked 'S'. She said she had a Pepsi can. It was a little cooler alright, but I did not want to dehydrate myself any further with a soda, so I chose to be natural. Practising to drink without breaks helps, you would have realised, had you seen the rapidity with which I gulped down the 330 ml of water, followed by another 200ml of guava. That certainly helped. Refreshments also seemed to have had a general good effect on the crowd and specifically shut up a specially grumpy gentleman who had started to work on his sandwich.
It was then I began to think about the whole lot of work AD has to do to salvage its reputation. They have a rather beaten up status on the timeliness dimension. A cover story on Business World this month was elaborated on the challenges AD faces as a low cost airline. Despite everything, they currently have a PI of 95% on-time 'within 15minutes' and 88% on-time 'within 1 hour' of planned ETD. My experience with ETD of AD would probably be commensurate with the former and I have no complaints.
But can you imagine a plane with no AC? It is just a sausage of vacuum-sealed metal in the sky boiling on the inside (And that's no exaggeration!). When someone later sarcastically repeated AD's new punch line 'Have you flown with Air Deccan recently? It's WOW!' (it is also written on the uniform of AD staff) I was thinking about the cheekiness of their other tagline 'No one can, like Air Deccan!' Notice the comma in that tagline? If they don't act soon, they may have to drop the comma!
Airplanes don't have windows that can be opened. This deep realisation came about on a late-nighter from Chennai toBangalore on Air Deccan. About 50 of us houseful on (ATR) propeller-driven aircraft were feeling like being inside a sky-sauna. It was a perfect picture except that we had not asked for it and we did not like it.
Escape from Chennai-heat was ephemeral as I relised when I dashed into the plane. For the uninitiated, there is free seating on Air Deccan. And I was beginning to pride myself at the unapparent agility I had displayed to get myself a seat-near-emergency-exit-with-more-leg-room; for the second time in two days. 'Outside is better' is rarely something a person from Bangalore says about Chennai weather. But even before people had begun to settle down in their seats of choice or of compromise as the case may be, I could hear several voices hollering the hapless stewardess. 'AC costs money, man!' I heard from a far corner.
Let's call her just 'S'. It was written all over her face that S had had a long day, and I don't mean just the multiple hops her plane had made since her day had begun. A hint of grit that she had done this before and could take one more of this was evident in the confidence with which she told us that the AC was not working efficiently 'today'; and that things may get better when we would be airborne. She had come by our seats to brief us about the special instructions we needed to know as the people guarding emergency exits. It was then that we had not-so-subtly hinted that we were uncomfortable in the heat.
One hour is all I need to get through with- I was telling myself when the reading lights went out! Anticipating panic, 'S' made a quick and rather brave announcement that the lights would come back when the 'jets were started' (I was too uncomfortable to corroborate the relevance of jet to a propeller plane). But my thoughts were drowned in the roar of the propeller, which told me I was closer to Bangalore by 1 more minute. I was already imagining that it would be cool in Bangalore at 11:15 PM when we would disembark from the hottest thing on earth or hovering over it.
I was also looking forward to the refreshments that I could buy onboard. 'Simplifly' air mag says that the on-board refreshments business is an alternative profit stream for AD . I am OK with the markups on water and juice they sell. But as luck would have it 'S' started from the far end. (Damn Murphy's laws!). She was also interrupted by a gentleman who had to visit the loo. 'S' had to backtrack the cart to let the gentleman through. She started again and then had to backtrack again after he returned. My deep interest in this charade was driven by the fact that I was growing thirstier by the minute; my discomfort validated by a white gentleman who had bravely kept his jacket on until now and who had decided on giving up. Obviously, a lot of people needed refreshments and it only made my wait more agonising. In the middle of all this, the evil side of mind pondered on whether this entire 'NO AC' situation was a conspiracy to sell refreshments. No, too long a shot, forget it!-I silenced the dark angel.
Again, what do they say about great expectations? I was to find out soon when S handed me a bottle of Chota Bisleri and a tetra pack of 'B Natural Guava juice'. 'Can I please have something cold?' I asked 'S'. She said she had a Pepsi can. It was a little cooler alright, but I did not want to dehydrate myself any further with a soda, so I chose to be natural. Practising to drink without breaks helps, you would have realised, had you seen the rapidity with which I gulped down the 330 ml of water, followed by another 200ml of guava. That certainly helped. Refreshments also seemed to have had a general good effect on the crowd and specifically shut up a specially grumpy gentleman who had started to work on his sandwich.
It was then I began to think about the whole lot of work AD has to do to salvage its reputation. They have a rather beaten up status on the timeliness dimension. A cover story on Business World this month was elaborated on the challenges AD faces as a low cost airline. Despite everything, they currently have a PI of 95% on-time 'within 15minutes' and 88% on-time 'within 1 hour' of planned ETD. My experience with ETD of AD would probably be commensurate with the former and I have no complaints.
But can you imagine a plane with no AC? It is just a sausage of vacuum-sealed metal in the sky boiling on the inside (And that's no exaggeration!). When someone later sarcastically repeated AD's new punch line 'Have you flown with Air Deccan recently? It's WOW!' (it is also written on the uniform of AD staff) I was thinking about the cheekiness of their other tagline 'No one can, like Air Deccan!' Notice the comma in that tagline? If they don't act soon, they may have to drop the comma!
2006-03-20
Tom-tom-ing the tonne of a salary:
For the last few weeks, newspapers have been flashing news about the high-end salaries that the placement process in BIG business schools have been attracting. The sensation such news has generated has certainly not disappointed the 'placement deans' of the colleges.
It's free publicity, at the least, for the schools trying to one-up each other just as it is a tribute to the ROI factor for the schools to rave about. While such news might only consolidate the position of the premier schools in the country namely
the IIMs, the set of schools in the immediately next level of ranking have much to talk about. It is always musical chairs for the 'other best colleges' recognition and the schools do not think twice about putting up names of students who have got the best salaries.
Sensation is also created by media when they publish stories on salaries for overseas placements at Indian B-shools. While the dollar salary itself may be a staggering amount, the exhange-rate based conversion, that ignores purchasing power parity, gives a very unrealistic impression about the 'value' of an MBA job. While a salary of USD 150K may sound very realistic,and is among the best in the world, the converted amount of 70 Lakhs or so hardly meets the truth when applied to a fresh MBA graduate. It may also give an incorrect idea about the salaries at other Indian 'MBA jobs'.
The couple of beneficiary-genetlemen who have voiced their concerned on these lines have touched the right chord with other job winners this year. In the Indian context where the salary of an eligible 'boy' or 'girl' is closely viewed for marriages,
publishing such news also causes discomfort to the families involved. This, notwithstanding pesky relatives who are suddenly gleeful at the remarkable success of their 'dear one'.
Rising crime against IT community ought to raise a flag for proliferation of 'targetted crime'. Every now and then local newspapers carry stories about IT people stalked into ATMs, waylaid and drugged and robbed at knifepoint etc, across the new metros. IT people are regulary warned by their employers to practise personal safety and some are even introducing them to the concept of self-defense. They are also regularly warned by the companies not to advertise themselves by way of displaying their IDs and company batches etc. Targetted crime is not restricted to IT people, though it makes news as more young people are the victims. Industrialists have been at the receiving end for as long as one can remember. Organized criminals are always on the watch for identifying new victims and news such as the 'highest salary' tagged along with a name and photo only compromises the safety of the benefeciary or the likes of her.
The dean of IIMB has been quick to respond to the pleas of the students by announcing that they would not have press sessions post-placement from the next year. This should lay to rest any discomfort students may have felt discussing their salary which is considered a very private notion. Personally, I have not discussed the details of my salary with anyone, except my wife and parents/immediate family.
Without compromising on the sensitivities of the students, schools can actually publish statistics on salaries from the placements process. Mean, median and standard deviation numbers for the salaries could be published even on the school
websites, which many foreign schools do. Such data could be separately published for Indian job offers and overseas job offers just so that the readers get the right perspective. This should also keep the media happy as they are always comparing
B-schools for general benefit of the students without sensationalisation of a very private notion- one's salary.
For the last few weeks, newspapers have been flashing news about the high-end salaries that the placement process in BIG business schools have been attracting. The sensation such news has generated has certainly not disappointed the 'placement deans' of the colleges.
It's free publicity, at the least, for the schools trying to one-up each other just as it is a tribute to the ROI factor for the schools to rave about. While such news might only consolidate the position of the premier schools in the country namely
the IIMs, the set of schools in the immediately next level of ranking have much to talk about. It is always musical chairs for the 'other best colleges' recognition and the schools do not think twice about putting up names of students who have got the best salaries.
Sensation is also created by media when they publish stories on salaries for overseas placements at Indian B-shools. While the dollar salary itself may be a staggering amount, the exhange-rate based conversion, that ignores purchasing power parity, gives a very unrealistic impression about the 'value' of an MBA job. While a salary of USD 150K may sound very realistic,and is among the best in the world, the converted amount of 70 Lakhs or so hardly meets the truth when applied to a fresh MBA graduate. It may also give an incorrect idea about the salaries at other Indian 'MBA jobs'.
The couple of beneficiary-genetlemen who have voiced their concerned on these lines have touched the right chord with other job winners this year. In the Indian context where the salary of an eligible 'boy' or 'girl' is closely viewed for marriages,
publishing such news also causes discomfort to the families involved. This, notwithstanding pesky relatives who are suddenly gleeful at the remarkable success of their 'dear one'.
Rising crime against IT community ought to raise a flag for proliferation of 'targetted crime'. Every now and then local newspapers carry stories about IT people stalked into ATMs, waylaid and drugged and robbed at knifepoint etc, across the new metros. IT people are regulary warned by their employers to practise personal safety and some are even introducing them to the concept of self-defense. They are also regularly warned by the companies not to advertise themselves by way of displaying their IDs and company batches etc. Targetted crime is not restricted to IT people, though it makes news as more young people are the victims. Industrialists have been at the receiving end for as long as one can remember. Organized criminals are always on the watch for identifying new victims and news such as the 'highest salary' tagged along with a name and photo only compromises the safety of the benefeciary or the likes of her.
The dean of IIMB has been quick to respond to the pleas of the students by announcing that they would not have press sessions post-placement from the next year. This should lay to rest any discomfort students may have felt discussing their salary which is considered a very private notion. Personally, I have not discussed the details of my salary with anyone, except my wife and parents/immediate family.
Without compromising on the sensitivities of the students, schools can actually publish statistics on salaries from the placements process. Mean, median and standard deviation numbers for the salaries could be published even on the school
websites, which many foreign schools do. Such data could be separately published for Indian job offers and overseas job offers just so that the readers get the right perspective. This should also keep the media happy as they are always comparing
B-schools for general benefit of the students without sensationalisation of a very private notion- one's salary.
2006-03-14
Choking competition or just shooting the messenger?
A new move by the Department of Posts (DoP) is aimed at putting global logistics giants out of business in India. The likes of UPS, DHL and Blue Dart are a worried lot fearing a cut in 50% of their business in India and other smaller players are keeping their fingers crossed against a decision that might just make them close their shops.
The DoP is contemplating on introducing a law that prohibits private courier companies from carrying letters or packages lighter than 500 gms. This essentially means they private courier companies would not be allowed to carry letters/documents and small packages. In today's scenario Indian businesses rely heavily on private courier companies to carry all sorts of documents and deliver packages to their and consumers' door steps. There is greater accountability and reliability with the private companies. The move would means that books, gizmos, magazines, and anything else which can fit into a 'small package' will now be delivered solely by the Indian Postal service (IPS). We all know how fast this service has been. The slowly growing B2C e-commerce is likely to suffer a set-back.
The only service that can compare itself for speed provided by the private couriers is the Express Mail Service or EMS and it is a premium service offered by IPS. While the postal service may have the largest network, it by no means has the sophistication that the private players have been able to build into their offerings. Features like tracking a package in real time from the minute it is picked up till the minute it is delivered are some distance away, yet, for IPS. The private players also offer value added insurance features that users often find convenient. The promise of timely delivery has been unmatched by the IPS, so far.
While the ministry has been rationalizing this move as being done to amend an archaic law, about 108 years old, there has been no reason provided for why the competition should be effectively stymied all for amending a law? Why the IPS should be given an effective monopoly on light-weight packages. The implementation of the act would be against the spirit of restricting monopoly. The Postal department has been tight-lapped about it since the industry has started dissenting the move.
The act in a long shot will only give wrong signals to the FIIs who are bracing themselves for a tremendous growth that they foresee in India's pacing liberal economy. With the decisions on FDI in retail impending, and likes of Wal-mart trying to gain foothold in the Indian market, the move is bound to be unpopular with the prospective investors.
It is likely that the move may not happen the way it has been currently announced to be implemented. But the department and the Competition Ministry should work in coordination before voicing out amendments that are bound to be anti-private sector and purport to choking competition.
A new move by the Department of Posts (DoP) is aimed at putting global logistics giants out of business in India. The likes of UPS, DHL and Blue Dart are a worried lot fearing a cut in 50% of their business in India and other smaller players are keeping their fingers crossed against a decision that might just make them close their shops.
The DoP is contemplating on introducing a law that prohibits private courier companies from carrying letters or packages lighter than 500 gms. This essentially means they private courier companies would not be allowed to carry letters/documents and small packages. In today's scenario Indian businesses rely heavily on private courier companies to carry all sorts of documents and deliver packages to their and consumers' door steps. There is greater accountability and reliability with the private companies. The move would means that books, gizmos, magazines, and anything else which can fit into a 'small package' will now be delivered solely by the Indian Postal service (IPS). We all know how fast this service has been. The slowly growing B2C e-commerce is likely to suffer a set-back.
The only service that can compare itself for speed provided by the private couriers is the Express Mail Service or EMS and it is a premium service offered by IPS. While the postal service may have the largest network, it by no means has the sophistication that the private players have been able to build into their offerings. Features like tracking a package in real time from the minute it is picked up till the minute it is delivered are some distance away, yet, for IPS. The private players also offer value added insurance features that users often find convenient. The promise of timely delivery has been unmatched by the IPS, so far.
While the ministry has been rationalizing this move as being done to amend an archaic law, about 108 years old, there has been no reason provided for why the competition should be effectively stymied all for amending a law? Why the IPS should be given an effective monopoly on light-weight packages. The implementation of the act would be against the spirit of restricting monopoly. The Postal department has been tight-lapped about it since the industry has started dissenting the move.
The act in a long shot will only give wrong signals to the FIIs who are bracing themselves for a tremendous growth that they foresee in India's pacing liberal economy. With the decisions on FDI in retail impending, and likes of Wal-mart trying to gain foothold in the Indian market, the move is bound to be unpopular with the prospective investors.
It is likely that the move may not happen the way it has been currently announced to be implemented. But the department and the Competition Ministry should work in coordination before voicing out amendments that are bound to be anti-private sector and purport to choking competition.
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