Tuesday, October 30, 2012

When giants are in conflict

After being completely exhausted by the packed traffic, when I finally managed to reach the Chinese embassy in New Delhi just a minute before the scheduled time of the meeting with one of the embassy officials, I found him waiting for me with seven books, documentaries and write-ups on China’s progress, relations with India, the Tibet issue and many more. Without giving me a chance to utter anything, he started speaking on all possible issues associated with India with proofs and statistics which made me feel that Chinese believe in statistics. However, be it at the personal, trade or diplomatic level, there is always a lot of speculation, doubt and uncertainty when it comes to the relationship between Chinese and Indians. Both consider each other friends – outwardly – while behaving as enemies from inside. B&E tries to explore the unique relationship in Chinese words. Here is what China has to say about its friendly enemy India, in a friendly healthy discussion. Some excerpts:

“5 things we appreciate about India...”

CULTURE & BOLLYWOOD: India is culturally very rich. Such a diverse society still united without much chaos and hesitation - that is a remarkable achievement for a country. Moreover, one of the best things China appreciates and Chinese are becoming crazy about is the emergence of Bollywood and popularity of Bollywood actors in China. Indian stars and celebrities are regularly coming to China to perform. There is a huge popularity of Indian movies and movie stars, which is gradually increasing. Raj Kapoor’s films (especially “Awara”, “Sangam” and “Mera Naam Joker”) still have much influence in China. Shahrukh Khan is very famous among Chinese fans.

RELIGIOUS EXCHANGE AND PILGRIMAGE: It is one important aspect of the relationship and has great potential. If the hotel rates are lowered and traffic improved, lakhs of Chinese tourists will come to visit Buddhist sites like Nalanda, Varanasi, Aurangabad. Buddism might have been born in India but it is highly practiced in China today. Hence, the places which Buddhism is associated with are considered pious land for the disciples. Recently, many Chinese scholars visited Nalanda, Arunachal and many other places to explore the undiscovered history of world’s one of the famous and practiced religions.

QUALITY OF INDIAN DOCTORS AND HEALTH PRACTITIONERS: China perhaps could not forget the sacrifices and contributions of Indian doctors for their country. Dwarkanath Kotnis, the famous Indian doctor is an example for the same for whom the Premier Wen Jiabao himself came and delivered a commemoration speech in his praise and in memory of many other Indian doctors who are selflessly contributing to the Chinese health care system. Chinese people are still grateful to those Indian doctors (Dr. Kotnis, B.K.Basu, M. Atal, M.Chilkar, D. Mukerji) who came to help China while we fought Japanese invaders in the 1930s. That’s why President Hu Jintao and Prime Minister Wen Jiabao went to visit relatives of Dr. Kotnis in Mumbai when they came to India.


Source : IIPM Editorial, 2012.

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Monday, October 29, 2012

INDIA: REVENUE MODEL

Is the Indian government missing out on billions?

There are thousands of other search engines, internet service providers, online news portals and community networks that attract millions of surfers and earn billions of dollars for simple clicks.

The critical issue is that a significant number of these clicks that generate the above said billions originate in India – where surfers clearly use national infrastructure (routers, cross-country transponders, transmission lines, and the works). We propose that the government taxes a small part of the revenue that various international and national net based companies earn through the pay-per-click route. That is, we’re proposing that in the same way as Google (through their Ad-Sense module) pays a part of their earned revenues to partner sites – if the click on Google’s client’s ad was made through the ad displayed on the partner’s site – Google should also then necessarily pay the Indian government a part of that pay-per-click revenue earned, if the click has been made inside the national boundaries of India.

Interestingly, online ad spending is on rise in India. The online ad expenditure in 2006 was around Rs. 2.1 billion, which increased to Rs. 4.5 billion in 2007. The same is expected to reach Rs.22.5 billion by the end of 2009. There are 2.707 million internet hosts while the country has 80 million internet users; even this is increasing drastically. Today, online advertising contributes $300 billion to the American economy (2.1% of the GDP). What say the Indian government partakes of some of it?
Source : IIPM Editorial, 2012.

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Sunday, October 28, 2012

US & CANADA: HEALTHCARE DISSIMILARITIES

Barack just needs to look to his neighbours to understand health policies

In the year 2007, 70% of healthcare spending in Canada was through public sources (which, though, has decreased from 74.5% in 1990), while in the US, the same was 45% (the lowest among all OECD countries). Unbelievably, this happens despite the fact that the Canadian government spends a lesser amount (16.7% of its revenue) on its citizens’ health than the US government (which spent 18.5% of its revenues last year). Surprisingly, in spite of such gigantic healthcare spending in the US, a whopping 40% of the US citizens lack adequate accessibility to the country’s healthcare system (24% of the US population remained under-insured, according to the Consumer Reports Study, 2007), while with relatively lower investments, only 5% of Canadians are outside the system.

It is also astounding to observe that simply having more doctors, physicians and nurses doesn’t ensure a high quality of health service. Canada has fewer physicians per capita than in most other OECD countries (In 2007, it had just 2.2 practicing physicians per 1,000 people, lesser than the 2.8 physicians per 1,000 population in the US). Canada has 9 nurses per 1,000 people, while the US has 10.6 nurses per 1,000. Canada also ranks as worse as the US in the number of acute care beds per 1000 people (2.7). Look at where that has brought Canada. Canadians have an average life expectancy of 80.4 years according to the Canadian Institute of Health Information (US: 77.8). Infant mortality rate also has come down drastically to 5 deaths per 1,000 live births (US: 6.9). Adult smokers consuming tobacco products has gone down from 34% in 1980 to 18% in 2007 through an effective public awareness campaign, advertising ban and taxation moves. In Canada, 15% of its population is obese, far below the US, which has 34.3% of its population afflicted by obesity (OECD health data). Experts comment that patented drug prices are 35% to 45% lower in Canada than in the US. Some US citizens now even purchase prescription drugs from Canada (many using online transactions) than from their home country – this cross-border purchasing has been estimated at $1 billion.


Source : IIPM Editorial, 2012.

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Friday, October 26, 2012

Market watchers with its aggressive attack

this volume player stunned market watchers with its aggressive attack. pawan chabra finds out how hero honda achieved more than what was expected of it

To state the secret to success in two words – new launches! The head honchos at Hero Honda went straight back to their drawing boards and zeroed-in upon the fact that attracting customers during times of a downturn would require more magic than just play the pricing game. Then came the slew of launches, one following another. Besides the sporty and macho Hunk and the stylish new CBZ Xtreme, the company managed to make its mark on the conscious Indian consumers with other fresh new launches such as the Passion Pro Power Start, new Splendor NXG, and a variant of the Pleasure.Result: Currently, Hero Honda has a strong market presence in the 150cc segment. The company has more than doubled its volume and market share in the premium segment over the past couple of years. And this has given it that edge in terms of absolute margins.

That sounded great news for Hero Honda in the premium category, but the tiding doesn’t come sans challenges; the biggest being Bajaj Auto. When it comes to the premium segment, one cannot deny that though the company is a very strong player in the executive segment, Bajaj Auto still rules the roost in the premium segment. Consider this: during FY’09, Hero Honda sold about 0.19 million units in the premium segment. Now compare this to the much higher 0.84 million units sold by Bajaj Auto, and you understand why there is much catching up to be done on the part Hero Honda. But having said that, we also do confess that the pace at which Hero Honda is catching up, it surely appears to be determined to give Bajaj a run for its money in the premium segment as well.


Source : IIPM Editorial, 2012.

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Thursday, October 25, 2012

“We refresh our consumers...”

B&E: What are the strategies that you think have make Coca-Cola successful in India?

AJ: Brand Coca-Cola worldwide stands for positivity, upliftment of body, mind & spirit and universal connection. The same values define the brand in India. In addition, we are constantly looking for opportunities to reach out to our consumers and strengthen our connect with them. Innovations in advertising, 360 degree communication, strong distribution network and chilled availability of the product in different packages and at appropriate price points have had a role to play.

B&E: How did Thums Up fit in?

AJ: Thums Up today is India’s largest selling sparkling beverage brand. Born in 1977, Brand Thums Up was added to the Coca-Cola portfolio in 1993. During this period, it moved towards a more individualistic masculine positioning in ‘I want my Thunder’. In, 2002, Akshay Kumar was roped in as the brand ambassador and the brand continued to strengthen its position as a Male Iconic Brand through consistent positioning. To further enhance the appeal and connect with consumers, the Thums Up logo too has been contemporized. The sharper edges are added to the ‘Thumb’ in the Thums Up sign to bring out the core masculine values of brand Thums Up more prominently.


B&E: Please tell us about your future plans for the Indian market?

AJ: We have grown consecutively for the last twelve quarters with the quarter ending June 2009 registering a 33% growth over the same quarter previous year. This was the 12th straight quarter of growth, with 9 out of the 12 quarters delivering double digit growth We believe that this growth has been led by our continued focus on the route-to-market strategy and ongoing investments in technology, infrastructure and consumer marketing. At Coca-Cola India we follow an OBPPC model which is all about marketing the right brand, in the right pack at the right price, sold through the right channel and at the right occasion.


Source : IIPM Editorial, 2012.

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Tuesday, October 23, 2012

DILEMMA: THE CONCEPT OF SEPARATE STATE

Politicians must discourage unnecessary demands for separate states

The Indian National Congress is also backing the ‘Telengana Rashtra Samiti,’ while their President K. Chandrashekhara Rao (who is also a Central Minister) is determined to take on the cause to the State as well as the Central government. However, the most intense of the lot is the Gorkha Janmukti Morcha’s clamour for Gorkhaland. Bimal Gurung, leader of the party, has resorted to civil disobedience to fulfil his goal to create the state by 2010.

Holistically speaking, this trend was actually started by BJP, when it was in power. Now the floodgates seem to have opened. The ruling governments of the states and the centre should not shamelessly play vote bank politics on this issue. Rather, they should nip this growing menace in the bud.


Source : IIPM Editorial, 2012.

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Monday, October 22, 2012

‘Brown’, but not out!

Labour Party is in trouble and so is Brown, but his resignation will not make matters any better

Julius Caesar would surely lend a sympathetic ear to British Prime Minister Gordon Brown; as he would relate to him quite well. It’s not only the Opposition and rebels who are baying for Brown’s blood. Even party insiders view the PM as the key obstacle to the party’s hopes of avoiding defeat in the next elections. Rebel Labour MPs are distributing a letter calling on Brown to step down. He has survived a political gale by hastily reshuffling his cabinet, but political analysts say that the storm is far from over. The Labour party performed miserably in the recent local elections for the first time in 30 years. In power since 1997, it lost over 300 councillors and chances are high that the party may be wiped off in some southern counties. Some Labour councillors say that the MPs expense scandal, a wave of senior minister resignations and the government’s failure to handle Britain’s worst recession since World War II led to the catastrophic election results. But the embattled premier has put a brave front, saying on his new cabinet, “I have chosen a determined and strong Cabinet that will fight hard for the British people in these difficult times.”


Source : IIPM Editorial, 2012.

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Saturday, October 20, 2012

New imperialism

Why the WTO remains a non-starter

There are always moments in history when the optimists start thinking that the meek might actually end up inheriting the earth. But no such illusions accompanies the conceptualisation and actual formation of the World Trade Organisation (WTO). Even from the days when debates about its composition and structure started, it was very clear that the First World had decided to keep two sets of double standards. One double standard was hectoring the Third World to lower import tarriffs even as it found new ways to keep away Third World imports. The other double standard was to hector and pressurise Third World nations to open their industry and agriculture to global multinationals even as First World farmers were molly coddled with hundreds of billions of dollars in subsidies every year. Unjust and prejudiced regimes are not meant to last long; and no wonder the WTO has spluttered and struggled to survive.


Source : IIPM Editorial, 2012.

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Friday, October 19, 2012

3 days is all it took...

...to sell-off a fortune to a rookie named Apple!

“How about earning $1 million worth of my company’s equity for 3 days in your garden (that’s where you basically do your research!)... Deal?” What if your competitor proposes this to you? Great deal, isn’t it? Well, not really... Cut to 1979, officials at Xerox Corp., learnt this lesson the hard way. Xerox, under David Kearnes then, had allowed engineers from Apple Inc. to learn the Graphical User Interface technology (GUI) during a 3-day learning session at Xerox’s Palo Alto Research Center, for a consideration of $1 million in Apple’s pre-IPO stocks. What followed shocked Xerox. Apple’s engineers soon launched a GUI-clad personal computer named ‘Apple Lisa’, arguably the first hit product from Apple! Jobs’ foresightedness for the technology and Xerox’s myopia, gave Apple the much needed lead in this regard. “When a company is new and small, it doesn’t seem like a giant competitive threat, so doing deals with it is not important enough for anyone to pay attention to. These companies become large competitors and the deals that were done years ago, which made sense back then, don’t make sense anymore,” supports Jeff Kagan, a Tech analyst. Well, the GUI technology today forms a part & parcel of every major OS in the world.


Source : IIPM Editorial, 2012.

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Thursday, October 18, 2012

The War giveth what peace taketh...

Overwhelming excesses in World War I almost led to extinction for this flagship Tata group company

The early 20th century was hardly the time when one could have the benefit of established and well documented business practices. But then, this cannot be considered as an excuse for a spate of reckless expansions made by Indian businessmen of that time; for the adage ‘never bite more than you can chew’ was well known even then. Their spirit of enterprise rose to unmanageable proportions when World War I provided them with a unique opportunity to spread their wings. The war period created a serious crunch in imports, leaving the field wide open for these firms to tap the domestic Indian market. And the most interesting in this regard were the Tatas, then led by Dorabji Tata (son of J. N. Tata, shown in picture). A lot of ventures they started into construction, banking and cement lost their bearings when peace dawned and had to be shut down or merged. Tisco was the starkest case of a thoroughly ambitious expansion plan going awry. In war time, Dorabji decided to ramp up production from 100,000 tonnes of ingots to 4,20,000 tonnes (source: The Oxford History of Indian Business, Dwijendra Tripathi). As the war ended, Tisco found itself competing with steel imports once again, and faced declining margins and rising inventories, rather than the other way round; leading to a severe liquidity crunch. Today’s Big Pharma companies would sympathise; their situation is quite similar when patents on their products expire and generics take up the market by storm, messing up the entire margin calculations!


Source : IIPM Editorial, 2012.

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