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A few weeks ago when IPL czar Lalit Modi first announced the IPL-2009 schedule at Mumbai, the atmosphere was electric. Everyone thought that the cricket gala in India would wipe away the gloomy economic sentiment. But after many twists in the tale, the cricket extravaganza landed in South Africa. A truly domestic tournament of India, in an untruly international arena!

Before the Election Commission of India announced the five-phased General Election schedule, IPL-2009 looked like a perfect dream. On the basis of the success of IPL-2008, this time, the anticipations were high. Lalit Modi confidently declared: “IPL is completely recession-proof.” Aware of the drawbacks of the Indian cricket administration, he thought that copying the European Football League model will change the entire scenario of Indian cricket administration. Modi felt that IPL would become a completely “political-proof sports model.” To an extent, after the first successful season of IPL, everyone thought that the model is fool-proof. But it was not to be!

No sooner than Modi & Co. announced the dates for IPL’s second season, the Union Home Minister P. Chidambaram dropped a bombshell. He said, “We can’t give security to both General Elections and IPL together. So, it’s better to postpone the event.” That bombshell shattered the perfect IPL dream, converting it into 177 hours of uninterrupted television package of ‘family entertainment’. Statements and counter statements flew across 24-hour TV news stations, reflecting the true colour of Indian politics. During the negotiation period NCP chief (and former BCCI President) Sharad Pawar, BJP’s Arun Jaitley, Congress’ Rajeev Shukla... every politician warmed his hands in the cricket cum political bickering. At the end it became General Elections versus the IPL.

Speaking on condition of anonymity, a former captain of the Indian cricket team told 4Ps B&M that the nation could have easily hosted both, the elections and IPL together. “But in our country, politics always rules and everything else becomes secondary. I know the elections are of utmost important. Even though I strongly feel that we could have held both together with little bit of adjustment in the IPL schedule. In doing that, we could have told the world that India is not Pakistan or Afghanistan. India is a safe country. But now it looks like we are almost at par with Pakistan as far as internal security is concerned,” he bemoans.

A final consolation for Indian cricket lovers arrived in the form of IPL-2009 in South Africa. According to BCCI’s Honorary Secretary N. Srinivasan, IPL’s commitment to loyal fans will remain the same, courtesy live telecasts of all matches. On 24th March, at 8:53pm, much before the official press conference at South Africa, an official e-mail from BCCI landed in the mailboxes of India’s top cricket writers, confirming that South Africa will host the tournament from April 18th to May 24th. A few minutes later, another email arrived with the joint statement of BCCI and ECB. In that Srinivasan clarified that “the climatic conditions in England during mid April and the absence of permanent floodlights at many of the venues made South Africa the better option for a tournament at this time of the year.”

On the other hand, in an exclusive interview with 4P B&M, ICC Chief Executive Officer Haroon Lorgat said, “Safety and security is paramount and the IPL is a domestic tournament run by the BCCI. If the organisers and the Indian government are unable to reach a compromise to allow the tournament to take place with what are deemed to be the necessary levels of security, then those organisers will do what is in their best interests.”

But he categorically said, “From the IPL’s perspective, it is not an ideal scenario to shift the tournament overseas.” The ultimate truth from the horse’s mouth itself! IPL in India is a truth. People of India would have directly felt the heat and dust of the lively tournament by supporting their teams on their home ground. Whereas IPL in South Africa is a glorified myth. All thanks to the shameless politicians and politics in India. By the way, did you know that ironically South Africa itself is going in for a general election? It is scheduled to start sometime in April end, a few days before or after the planned start of the IPL in that country! Where next?!?

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Source : IIPM Editorial, 2009

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

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For fools dare where angels fear to tread... uh, until a slowdown that is

Savreen Gadhoke does an expose on how the erstwhile knight templars of core competencies and niche positioning are quietly sneaking through the strategy alley trying out previously untouched strategies!

February 2008: Tiffany & Co., the jewellery and specialty retail store operator, was going through a rough patch. Mirroring the past few months trends, even January ‘08 sales did not come up to expectations and Tiffany was facing the heat of fall in consumer spending. It seems honchos at Tiffany, touted as a premium luxury brand, had already had a premonition that the figures for the upcoming quarter won’t be anything to write home about, unless they thought of a strategy to improve their customer base and explore alternative retail formats. That’s when Tiffany, for the first time in history, moved away from its premium positioning and announced the opening of its first small-concept store in California that sold none of its $1,48,000 priced diamond necklaces; but instead focused on less expensive products like its $200 and lower priced silver jewellery. Their prediction was right; net income for the quarter ending March 2008 had slipped 45.5% (as compared to the previous quarter) and stood at $64.4 million dollars. Not surprisingly, the year saw Tiffany opening up more ‘lower-priced’ stores across the world. The global economic meltdown has been tough not only for specific retailers but also for sectors across the board. Tight liquidity, rise in input costs, and most importantly the fall in consumer spending, have forced multinationals like Tiffany to adopt strategies that they had earlier sacrilegiously abstained from!

If Tiffany was a move down the price slope, Coach (the leading American designer & maker of luxury lifestyle handbags & accessories) did the reverse. After experiencing regular significant declines in its sales figures, Coach decided to move away from its mid-segment positioning and decided to go the premium way by converting 40 of its 300 stores into a more upscale format that offered high-end luxury designer bags and premium concierge services. Again, a first-time strategy in times of a slowdown. Chucking its 20-year-old ‘invincible’ slogan of ‘Always low prices’, Walmart not only unveiled a new slogan of ‘Save money, live better’, it also jumped into heavy advertising (which has never been the case with Walmart) and, starting from the year 2007, pumped in a smashing $835 million into advertisements – its highest ever.

If at an international level, companies are not hesitating to explore new avenues and adopting tactics to enhance their revenue streams, then in India too – despite the slowdown hitting domestic markets much lesser – multinationals are going all out, either attempting innovative techniques or even dramatically shifting away from their core competencies, to attract untapped customers to improve their top and bottomlines. In fact, various companies have already altered their positioning in the market place.

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Source : IIPM Editorial, 2009

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

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So, we ‘mate’ again!!!

The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School

In the negatives though, Chrysler is in shambles at the moment. The company has been losing money like no body’s business and a quick remedy looks bleak. The third largest Detroit behemoth lost 30-35% of its sales in the entire 2008 and according to news reports, lost a whopping 55% in January 2009 alone! 62,159 units were sold in the first month of the year 2009 as compared to 137,400 units sold same time last year. A substantially lower demand from fleet customers and sports- car buyers (order-book for the Dodge Viper were 4 units in the month of January) is the cited reason for this terrible shortfall, as per the company. Recently, President of the company, Jim Press, had called a conference for Chrysler’s 3,300 dealers nationwide; and only about 2,400 turned up. Chrysler staff had requested its dealers to pump up their orders to save the company and themselves; “You have two options, either you help us now or burn us all down,” said Press as per reports. According to sources, Chrysler apparently wants its dealers to increase their monthly demand to 87,360 units from the current 78,000. The extra 12% are necessary for the company to prove its future viability in order to qualify for the bailout package; failing which will be catastrophic for Chrysler and thousands of American workers.

As an anomaly, the sales of petrol powered Jeep Wrangler and Jeep Grand Cherokee improved by an insignificant but impressive 4%! This is totally against the logic of a growing temptation for fuel friendly cars and more in line with Fritz Henderson (GM’s President), who once told 4Ps B&M, “The crises for the automotive industry was not started by the SUVs, they are still large contributors in US auto sales; the bursting of the housing bubble is the main cause of this mess.” As double entendre’ are making a sound analysis difficult, it may be concluded that Chrysler is in a fix. On one side it wants to make it big on the back of imported technology and technical know-how and on the other, it does not wants to quit its image as a manufacturer of class friendly cars like the Cherokee and Viper. It is in the best interest for Chrysler to change its brand perception and be known more as a manufacturer of fuel efficient, value added cars, for the portal leading to revival is closing very fast indeed.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
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1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
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Another Meiji Restoration!

In order to get the better of eachother, these player have crafted very different strategies with their new planes. While Boeing’s (B787) strategy revolves around jets which can be easily accommodated and can fly to any destination, Airbus (A380) bets on transportation between two large centres with maximum load and focuses on a maximum inventory utilisation strategy. Boeing is betting big on the Dream liner 787 and hopes that it will turn the table in its favour. The manufacturing for the 787 was started after signing a deal worth $6 billion for 50 firm orders from All Nippon Airways of Japan. With an estimated cost of $8 to $10 billion per piece, the 787 is targeted at the twin engine, medium to long-range market segment, with a capacity of 200-300 passengers. The good news for Boeing is that with the increasing demand for the Dreamliner, its production line is now fully booked until 2015! “Our assumption is that demand for the newly launched aircraft models, such as the Dreamliner, will exceed supply for the foreseeable future,” supports Englund. With the A380, Airbus is already meeting its expectation. The aircraft has already been introduced with the Singapore Airways and Emirates among others. As per latest news, Airbus has 198 orders for the A380 from 16 customers. Apart from the A380, Airbus on its part also unveiled the blue-print of the smaller A350, which will compete with Boeing’s 787 directly. The planned A350 is being developed as an upgraded and more advance derivative of the existing A330-40. With an enhanced new wing, more fuel-efficient engines coupled with other new technologies, the A350 is ready to take the game forward. The development cost for the prototype is estimated to be $5.3 billion. In 2008, Airbus added 163 net orders and 16 customers to its already high launch customer base, culminating in a total of 478 net orders from 29 customers. As per an Airbus report with 4Ps B&M, in 2008, the A350 enjoyed a majority 64% orders, compared to rivals (read: Boeing).

“Looking at the order backlog at the end of 2008, Airbus and Boeing are equal (3,715 aircraft in backlog versus 3,714). If one looked at the dollar value of the backlog, I would estimate that Boeing is in the lead given the large number of orders it has for the 787,” explains Fraser putting a new argument. But Airbus has been able to register a 7% rise in deliveries to a record 483 planes during 2008, while Boeing - hit by a machinists’ strike - saw its deliveries fall by 15% to 375 planes. In terms of market share, Airbus is definitely leading at this time, but discounting Boeing would be a mistake. “In prior years, Airbus beat Boeing in terms of deliveries, but by modest amounts. We forecast that Airbus will edge Boeing in deliveries by only 5-10 aircraft,” predicts Fraser.

It is clear that apart from each other, these players also need to be cautious about emerging market dynamics. In these difficult times, both are facing major cancellations of orders from various airlines in the wake of the global liquidity crisis. Airbus has already recorded a sales fall of 42%, Boeing has had a fall of an even larger 53%. Looking at the scenario, one thing is for sure, the Samurai who makes the first and most feasible move to counter the ‘crisis of confidence’ will emerge as the reckoning force in the long run. Now could be the time to look for another Saiga Takamori!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM set to beat economic slowdown
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Life@Satyam: Seeking divine intervention

IIPM set to beat economic slowdown

They have their loyalty for the beleaguered IT company on one side and concern for the future of their livelihood on the other 4Ps B&M’s Naresh Nunna steals a look at the plight of Satyam employees caught between a rock and a hard place...

Tiny ancient temple of Lord Venkateswara in Chilukur village on the banks of Osmansagar lake at the outskirts of Hyderabad is being thronged with devotees, following the ‘confessions’ of Satyam’s Ramalinga Raju. Are majority of the devotees Satyam’s investors? Promoters? No, they are Satyam’s employees! Seeking God’s super personal generic exemplification during testing times may not a surprising gesture. But, why Chilikuri Balaji? Because Chilukuri Balaji, is considered to be IT-friendly. Most of the techno-savvies have been seeking divine intervention of Chilukuri Balaji in getting jobs, particularly overseas visas.

“Satyam episode is definitely a bolt from the blue, as IT sector is concerned. It flared up the existing market upheaval, caused by world-wide recession,” facilitator and consultant, Challa R. Phani told 4Ps B&M. With the global slowdown already putting the brakes on India’s $50 billion IT industry, jobs were difficult to come by, he added.

Besides the lavish lifestyle they lead in posh localities like Banjara Hills and Jubilee Hills, the home and other loans they have taken put them under tremendous tension. Thus, scores of employees had begun sending out their resumes to job portals and to other software firms. It is known that about 15,000 employees of Satyam have sent their CVs to placement companies and job portals during the last two days. Fearing trouble, more than 200 employees have also resigned during the last 3-4 days. A project manager at an international IT services firm said he had received about 4-5 frantic calls from Satyam managers, asking for jobs.

The shell-shocked employees inside the premises of company’s sprawling headquarters at Hyderabad were discussing in groups on the awful developments, the uncertainty and future plans. But they avoided the media on the instructions of their higher-ups. “How would you feel if you were in my position?” said one employee, while being reluctant to speak to the media, which is creating ‘mountains out of molehills.’ They are not only furious with the media for its ‘cock and bull’ stories, but also on off the cuff remarks made by IT bigwigs, like Infosys’ Narayana Murthy, who ascribed Satyam and its employees tainted, while ruling out the possibilities of taking over it. “We sincerely feel we are being subjected to such a harsh action out of no fault of ours,” an employee told 4Ps B&M, protesting the comments of Murthy.

Sudheer Pakanati (name changed) had prepared to settle for a smaller pay packages. “In fact, I applied for Wipro long back to the events of ‘horrifying magnitude. I was offered an annual package of Rs.4.5 lakh. But, now they asked me to join for 40% lower than it,” he told 4Ps B&M. And, if I stay with Satyam there will always be nagging worries about their salaries and their future, he said. A selected trainee- programmer, who has been waiting for his date of joining, felt happy with the developments. “I would have been tied in this fraudulent company because of the bond. There would have been no option left for me. Thank God I am saved,” he said with a sigh of relief. Others too are choosing to pursue different options: a developer who has been with Satyam for seven years said he had been planning on taking a break to do a Ph.D. Some of the stunned employees of Satyam are venting their frustration over the situation and future prospects in portals like Facebook, Orkut and Twitter.

But according to echelons of Satyam, the situation is not that bad, as being portrayed. Besides an amount of Rs.2,500 crore to get from clients, new projects worth more than Rs. 2,000 crore from Railways and BSNL are presently in Satyam’s kitty. “If the employees go with the business, I reckon 55-60% of the employees will find work,” an echelon told 4Ps B&M under condition of anonymity.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
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