IIPM MBA Institute

Thursday, November 8, 2012

A (c)ash rich proposition

GCIP acquisition gives sustainability but also substantially increases the risk profile for TCL

Tatas are on the rampage again! This time, it’s the less talked about Tata Chemicals Ltd. (TCL) that has created the buzz. The company announced a big ticket billion dollar mega acquisition of the US-based natural soda ash maker – General Chemicals Industrial Products (GCIP) on January 31. The acquisition (100% stake through a mix of debt & equity) will not only make TCL the 2nd largest soda ash maker in the world, but also help it command over 14% (over 5.5 million tonnes) of the world’s total soda ash capacity. However, it’s the choice of the target that deserves the real applause! Once the acquisition is complete, over 50% of TCL’s capacity would be through the natural route. This means both sustainability and natural hedge against the commodity cycle. “Since GCIP is using trona natural mineral, which can be converted into soda ash and is more cost effective (as production cost of natural soda ash is 40-45% cheaper than the cost of producing synthetic soda), it means increased profitability for TCL”, avers Rohit Nagraj, Sr. Research Analyst, Angel Broking. A Tata Chemicals spokesperson confirmed to B&E that “by 2009 and 2010, we will have more such overseas acquisitions as we believe Tata Chemicals has not yet utilised its full potential”.

The acquisition will not only enable the company to increase its capacity, but will also, in long term, give access to markets in North America, Latin America as well as Far East. Well, the sustainability is there to stay! (GCIP has natural soda ash mines expected to last for next 100 years). But then there are many who question the move on the backdrop of the US slowdown! “As many chemical manufacturers in the US are facing challenges, so will TCL,” says Paresh Nautiyal, analyst with Arihant Capital.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links

IIPM : The B-School with a Human Face

PRESIDENTIAL ELECTIONS: USA

Super Tuesday refused to throw up a winner for Democrats. SUTANU GURU analyses

However, ever since Obama surprised Hillary with a win during the first primary in Iowa, his campaign has been steadily gathering momentum and the double digit lead that Hillary used to enjoy till about a month ago has been reduced to virtually nothing. Most resonant and powerful was the open endorsement of the Obama candidacy given recently by the brother, daughter and nephew of the former President John F. Kennedy. The youth seem to be particularly taken in by the openness, clarity and vision being offered by Obama in contrast to more of the same kind of politics that Hillary seems to offer. “What was once inevitable is no longer inevitable,” said David Axelrod, Obama’s Chief Strategist. “What was once a lop-sided race is no longer lop-sided. The momentum has shifted.”

Yet, Obama cannot rest; nor can he afford to be complacent. A tidal wave of enthusiasm and endorsements after the Kennedy family supported him led many pundits to predict that Obama would sweep the big states like California and even give Hillary a run for her money in her home state New York. Obama’s campaign manager David Plouffe said the senator was in a “strong position to win the Democratic nomination,” and eyed contests next week in Maryland, Virginia and Washington DC. This seemed to be political wisdom till even a few hours before voting began. But the results – as usual – have surprised the pundits. Hillary has scored a big win over Obama despite support from big Hollywood stars like George Clooney. Of course, it becomes even more difficult to predict who will eventually will the Democratic nomination because the party has a complicated way of figuring out who will get how many delegates from each state. Unlike the Republican Party where the winner takes it all, the Democrats allot delegates to the candidates on the basis of the proportional share of the votes won by them. Till the time of going to the press, it appeared as if Hillary is slightly ahead with about 500 delegates while Obama is close behind with about 475 delegates. To eventually win the nomination and formally become the Democratic candidate, either Hillary or Obama will have to win over at least 2050 delegates across the country.

Read more......

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

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Wednesday, November 7, 2012

Sticking to prawn curry rice!

Kamat manages to save his throne for the time being

Goa is going through another game of musical chairs as the state’s leading politicians jockey for power. The seven-month old Digamber Kamat Government, facing a major crisis, as several MLAs from the ruling alliance have threatened to quit, has finally managed a reprieve by ‘satisfying’ the dissidents.

The 40-member Goa Assembly is a badly fragmented house. The ruling Congress party has 16 MLAs, the Opposition BJP 14 members while the remaining members belong to Maharashtrawadi Gomantak Party & Save Goa Front. One MLA from the United Goans’ Democratic Party & two Independent MLAs add to the confusing political alliances. Adding to the mess are often shifting political loyalties.

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

Monday, November 5, 2012

The royal players!

An aristocratic family that has saddled two national passions – cricket & films

Pataudi! It’s a name that cannot be confused with any other family or generation in India. And that’s a claim to fame, only a handful in this country can lay stake to. With royalty enmeshed with cricket and movies, the two arts that drive Indian fanaticism to the extreme, this family’s legacy is not only deeply embedded in India’s history, but also continues to define a sparkling existence in the present too.

Mansoor Ali Khan Pataudi was indeed the second (after his father, Nawab Iftikhar Ali Khan Pataudi, who also captained the Indian cricket team) but certainly the truest claimant to worldwide recognition that lives till date, within this quintessentially royal family. Tiger to friends, this prince was born on January 5, 1941, in Bhopal, to the eighth Nawab of Pataudi and his wife Sajida Sultan, who also was the daughter of the Nawab of Bhopal. After having been educated abroad for most of his life, he took to cricket. “We were allowed to pursue a career of our choice, so I took up cricket,” commented the Nawab to B&E. He went on to rewrite various cricketing records internationally. In 1969, it was his wedding to the then reigning queen of Bollywood, Sharmila Tagore (a distant relative of Rabindranath Tagore), that raised huge hue and cry. Three kids later – two of whom are subsequently walking their mother’s path into films – and the most compelling combination of a family tree that Indian nobles could have ever imagined, was complete!

“I was sent to hostel for studies because my parents did not want royalty to go to my head. During those times all the children of rich and affluent families were sent to boarding schools. However, now I do not agree with this concept.” The Nawab shared a rarely disclosed personal front with B&E. He was further emphatic even about Saif, “I also regret sending my son away during his early days of life.”

Read more......

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM : The B-School with a Human Face

Sunday, November 4, 2012

Private radio channels to reach grassroots levels

Big FM, backed by the ADA Group, has forced private radio channels to reach grassroots levels, say PALLAVI SRIVASTAVA & RATAN BHAGAT

Tactic No 2: Create hype

To enter a market already entrenched with strong players, it was imperative for Big FM to make a loud noise, and scream about its product. Logically, it launched an aggressive promotional campaign. Agrees Abneesh Roy, Media Research Analyst, Religare Securities, “With Big FM’s entry, overall marketing spends of the industry have shot up.” Such all-round investments have added to the credibility of the radio sector. “Anil Ambani’s investment strategy alone has given visibility and credibility to the sector. People think that the business is promising,” points out Irfan Ahmed, Manager (Investment Research), EvalueServe. And when such a large business house enters a low-profile mass communications medium, it boosts the confidence of the potential advertisers too. Adds Nikhil Vora, Media Analyst, SSKI India Research, “After Big FM’s entry, the advertising share of the industry has surely gone up.”

Tactic No 3: Think local

Big FM turned out to be the first station in Bangalore to dish out content in the local language. Says Tarun Katial, COO, Big 92.7 FM, “The radio stations are working well in small towns. We have, in fact, revolutionised media and media consumption habits in Tier II and III towns and cities.” It has understood that radio is a local medium and needs to have both localised content and marketing to make it successful. Fortunately for the company, these tactics have made it more attractive to the advertisers. Its pan-India presence makes it a favourable medium to woo potential customers. As Gaurav Dixit, a media planner in a leading media-buying agency, explains, “Since Big FM is present across India, I get more effective advertising rates for my clients than any other radio station.”

Also, regional advertisers choose it due to strong content and wide reach. Revenues in smaller towns come from retailers and local advertisers, who feel that Big FM offers an economical and penetrating medium to grow their brands. At present, 30-40% of the channel’s revenues come from local players. Big FM is perhaps the only private FM network that provides an effective platform for both local advertisers & brands that need a national platform. Adds Dixit, “Clients who want to reach regional population often prefer Big FM; most of the time they state their preference too. Also, the Ambani factor boosts their confidence.”

Read more......

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

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Bingo! He Got it Right

ITC is using every strategic resource it has in his arsenal to make a mark in the snack foods business. ANGSHUMAN PAUL takes a look

In the late 1980s, ITC was unsure about its future. It realised that if the then-ongoing excise case went against it, its thriving cigarette business would be in trouble. As years went by, it was clear that even despite the legal problems, it would be difficult to grow the cigarette business due to pressures from the civil society to clamp down on smoking. It was then that ITC’s strategists decided to focus on exports, and the company started an international business division to achieve this objective. Unfortunately, the project bombed, and resulted in a public scam. By the mid-1990s, it was apparent that the excise case was likely to go against the company; in 1997, the tax tribunal imposed a penalty of over Rs.8 billion. It was clear that the government would impose a ban on smoking in public places. So, when Y.C. Deveshwar took over as the chairman in 1996, he had to think out-of-the-box to ensure future growth.

He decided to use ITC’s strong marketing and distribution network (including tens of thousands of paanwallahs) to become a consumer products player. It proved to be a masterstroke. Beginning with tying up the back-end through e-Choupals’ procurement of raw materials, ITC slowly got into apparel, foods and personal care. However, its most successful launch has been that of snack food Bingo, which comprehensively proved that ITC had got it right. B&E analyses how Bingo disrupted a sector that was ruled by global giant, Frito Lay.

Tactic No 1: Research, research, research

ITC never launches a product, unless its potential is backed by research. Bingo rolled out in 2007, but work began 3-4 years ago with primary research by AC Nielsen, and in house studies to pinpoint lucrative segments. “Our team of 500 people is dedicated. For example, we plan to launch frozen corns and a specific team is already doing primary research of its own,” reveals Ravi Naware, Divisional CEO, Foods Division, ITC. Due to this, the Bingo brand has managed 10 variants within a year, while competitor Kurkure, too, has 10 variants despite being in the market for four years.

“Instead of launching a ‘me-too’ product and competing with existing players, we launched a different product,” says Naware. Be it Bingo or Aashirvaad organic spices, ITC has never believed in competing directly with existing products. Only after the brand is established does the company resort to direct attacks on competitors. Affirms Naware, “If you are competing with similar products, it has to be very different from rivals in terms of packaging and you need to be present in all the possible areas.”

Read more......

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM : The B-School with a Human Face

Friday, November 2, 2012

The hilarity of a photo-op show!

There were few forums across the year that allowed unknown environment ministers of different nations to meet each other. And then someone worked out a brilliant concept of global warming meets! by anchal gupta

It’s extremely tough to understand the upcoming UN Climate Change Conference in Copenhagen (COP 15, if you please). But if you really wish to understand the COP 15 summit, you would have to first understand that it’s already an open secret that there is going to be no deal. To understand what does one mean by ‘the deal’, you would have to understand that post the Kyoto Protocal period (where developed nations allowed developing nations leeway in controlling their emissions), developed nations now wish developing nations to sign ‘the deal’ wherein all nations will undertake legally binding measures to control their future emissions. But before that you would have to understand that of the 192 nations attending the meet, key ones – including India – have already rejected the concept of ‘legally binding’ emission controls. And also that many have already formulated their internally acceptable voluntarily implemented emission control standards. And further that these countries have already communicated their stands to the other nation members through various channels and some, like India, have also clearly mentioned why they will not sign at all on a deal that is ‘legally binding’. That brings us to another question – why then have the summit? Steal a glance to the first line of this paragraph, and you will have the answer of how tough it is to understand...

One tends to believe extremely strongly that irrespective of whether global warming is really at work or not, the fact is that the climate and environment ministers of various nations – post the creation of the masterstroke called United Nations Framework Convention on Climate Change (the latest fashionable name for the almost extinct Kyoto Protocol – or was it vice versa? Don’t bother if you don’t know) – now have a fashionably important portfolio and an all expenses paid tour schedule that they can look forward to throughout their tenure.

Imagine this scenario. Around fifteen years back, if you had been an environment minister in a developing nation in South Asia, you would mainly have had to worry about policies regarding cattle, livestock, forests (of course), and other nick nack. Cut to the present, and the environment minister’s post is perchance the most coveted one dealing with the ad nauseum claim of how to “mitigate the effects of global warming” (you’ll find this statement copied in many policy government documents in many nations) leading obviously to massive media exposure, public glory, global speech making and a sureshot future book.

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