IIPM - Student: March 2013

Wednesday, March 27, 2013

“The Indian Luxury Car market will be The Second largest for Volvo in Asia by 2020”

Volvo has been a slow Mover in India so far, Unlike Rivals like Mercedes-Benz, BMW and Audi who have Sprinted ahead and Grabbed The Volumes. Goran Larsson, President – Asia, Volvo Cars weighs in on his Company’s Growth plans in The Country in Discussion with Pawan Chabra

B&E: Volvo has not been as aggressive in the luxury car segment in India as BMW or Mercedes. Where does India stand in the scheme of Volvo’s global operations?

Goran Larsson (GL): India is a very strategic market for Volvo and we have been operating in this country for many years now. We have been learning our way to walk in this market before we start running. The way the Indian luxury car market is growing, we expect it to become the second-largest in Asia after China by 2020. If you see, we have launched two globally acclaimed products XC60 and S60 in a span of six months, which is a clear indication that the company is getting more serious about the Indian market. As far as competition is concerned, they do what they feel is right but we follow our own way. There are companies in India which sell over a million vehicles in a year. We don’t but we have a very loyal customer base that is very much convinced about the quality and safety of Volvo cars. We have intentions of becoming a bigger player in this market as well and we will become a bigger player in India.

B&E: As you mentioned, with the recently launched S60, Volvo has already marked its presence in the segment that attracts huge volumes. What are your expectations from the S60?
GL: The D segment is undoubtedly a large and profitable segment in the Indian market and the scenario is similar in the rest of the markets in Asia as well. With the launch of S60, we have two sedans in this segment. Keeping in mind the price, design, features and quality of the car, I would be very surprised if it is not able to attract a huge demand in the Indian market. Most important, we have the capacity to meet the demand of the Indian market and we can adjust the production pipeline accordingly. Out motive is to maintain profitable growth and we are not looking at market leadership because it is of no importance becoming a leader when you are making no money.

B&E: Volvo has so far been known as the maker of the safest cars in the world but the company has of late been emphasising a lot on the design and other features as well. How has it worked for the company?
GL: We initially started to work on attractive designs back in the 1980s. But you are right that the process has been streamlined only recently. We have already bid adieu to the boxy designs and have realised that making the safest cars and promoting them as vehicles that are high on safety will not alone attract a lot of buyers. Our focus is now to package the vehicles as well as the other features. This may not prove to be rationally important but it is certainly emotionally important to the consumer. However, we will continue to build on the USP of manufacturing the safest cars in the world.

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

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Tuesday, March 26, 2013

B&E Indicators

Global aerospace & defence perspective
US continues to be the largest spender on aerospace & defence in the world, bigger than the top 15 defence-spending nations put together. Incidentally, US is also the most advanced nation in terms of R&D activity as well as the market structure. However, experts now see the emerging economies such as India and China coming up the curve in aerospace & defence spending in the near future.

R&D remains critical
R&D remains critical to the sustainability of this sector as no other sector is more strongly linked to the government spending of a country than this. Countries such as Russia & US spend big amounts on defence-related R&D every year. In fact, a closer look at the US R&D spend in aerospace, defence & national security over the past few years indicates that almost $11 billion is estimated to be spent in 2011, which is about 46% of the total global R&D spend projected in the same year.

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Monday, March 18, 2013

“We are Among Top Two Players in Seven Circles”

Rajat Mukarji, Chief Corporate Affairs Officer, Idea Cellular in an Exclusive Talk

The Indian telecom industry has been a benchmark in the way it has made mobile services available to the common man. But then, the task has not been easy for most of the players. Cut-throat competition has not only hit the profitability of most of the players, but has also questioned the survival of many. However, Idea Cellular is one that has stood the test of the time and is the only player to have made it to this year’s edition of B&E’s Fastest Growing Companies in India. So what made it click? Rajat Mukarji, Chief Corporate Affairs Officer, Idea Cellular reveals the secret:

B&E: Idea has been amongst India’s top 5 telecom companies for quite sometime now. What is the recipe for your success?
Rajat Mukarji (RM): Our customer focused quality service approach has been the key for our success in the highly competitive telecom segment. A customer while selecting for an operator primarily keeps three things in mind – network coverage, brand value and quality of service. Idea, in a short span of time, has achieved all three and become a vibrant brand known for its dynamic value added services (VAS).

B&E: When are you planning to roll out 3G services in the circles where you have won licences? How is Idea Cellular’s strategy different from other 3G service providers?
RM: We have one of the highest number of 3G licences in the country. Out of the total 22 telecom circles in the country, we have licences in 11 circles and have paid Rs.57.7 billion as licence fees. Having presence in half the telecom circles will definitely benefit us, as none of the players have pan India 3G licence. This certainly gives us an edge over the competitors. Further, we have a ready-to-3G network and as such we are planning to launch 3G services by Q1 FY2012. Moreover, Idea will continue to focus on its innovative VAS offerings and services at competitive price. A special focus would be on launching the 3G services in rural India as 40% of the subscriber base lives there.

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Tuesday, March 12, 2013

The Punjabi Returns

Saif Ali Khan is all set to play the lead in Siddharth Anand’s 2 States, a film adaptation of Chetan Bhagat’s book. Nobody is in two minds about Saif being the ideal actor to play the Punjabi boy who wishes to marry his Tamilian girlfriend, as in his real life too he is in an inter-cultural relationship. Last time Saif played a Punjabi was in Love Aaj Kal, where he’d received rave reviews. Let’s see how he fares this time around.

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Wednesday, March 6, 2013

Paraplegic Patients denied Hope by Allopathic Doctors

Ayurveda Stands-up to Support Paraplegic Patients denied Hope by Allopathic Doctors

One may believe that in an era when with each passing day medical research crosses new milestones, it is unlikely for people to turn to Ayurvedic treatment, especially for grave problems like neurological disorders. But, throwing light upon the changing mindsets, Dr. Rani Gupta from Kayakalp Ayurvedic Centre said, “From the time when our Centre started, which was seven years ago, to today, I have seen that people have become open to alternative options of treatment. We see a lot of patients on a daily basis suffering from disorders due to spinal injuries. Ayurvedic treatment obviously is not usually their first resort… they are mostly those people who did not find any relief in allopathic treatment, and therefore turned to Ayurveda.” So, is Ayurvedic treatment more effective than allopathy in cases of neurological disorders? “I would not make a sweeping judgment here,” said Dr. Rani. “No medicine guarantees a sure-shot cure. But I would say that I have seen a lot of people find cure in Ayurveda.”

With foreigners also thronging to Ayurvedic centres in India, if the government continues to show its support to Ayurveda like they have with their grant to Maniben Sarkari Ayurvedic Hospital, many more patients around the world might turn to India, and people like Rajinder would have greater chances of finding relief and a life to live again…

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Tuesday, March 5, 2013

Manufacturing Consent

Documents suggest that in the years leading to 9/11, Taliban was not only willing to hand over Bin Laden to the US but also warned the latter of an impending terrorist attack

US administration documents acquired through the Freedom of Information Act (FOIA) and released by Washington based National Security Archive shed some additional light on talks with the Taliban preceding the terrorist attacks of September 11, 2001. It also underlines the constant Taliban offer to hand over Osama bin Laden; and the activity of Pakistan before and after the attacks.

As present-day US plan of action increasingly follows policies to conciliate or “flip” the Taliban, the document highlights Washington’s complete refusal to negotiate with Taliban immediately after 9/11. For example, on September 13, 2001, the then US Ambassador to Pakistan Wendy Chamberlin brusquely told President Pervez Musharraf that there was “absolutely no inclination in Washington to enter into a dialogue with the Taliban” and that the time for dialogue was “finished as of September 11.” However, Pakistan’s approach was more holistic and did not correspond to the American knee-jerk reaction. The then ISI chief N Mahmoud Ahmed told the ambassador not to act in anger. The real victory, he said, would come in negotiations and that if the Taliban were eliminated, Afghanistan would “revert to warlordism.” There are some interesting inputs on Osama as well. When asked about apprehending Laden, Mahmoud said it was “better for the Afghans to do it. We could avoid the fallout.” He in fact travelled to Afghanistan twice, on September 17, aboard an American plane, and again on September 24, 2001 to talk over the gravity of situation with Taliban leader Mullah Omar. However, the US was hell bent on action. Chamberlin categorically let Mahmoud known that while his meetings were all right, but they “could not delay military planning.”

Subsequent papers underscore the value of the bilateral bond to leaders in both Pakistan and the US. An interesting memo categorized seven demands handed over to Mahmoud by US Deputy Secretary of State Richard Armitage just 48 hours after the attack. President Musharraf sent a cable a day after accepting all the demands “unconditionally”. However, the documents also reveal fundamental disagreements and distrust vis-a-vis Taliban.

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Sunday, March 3, 2013

Neighbour’s envy, owner’s ‘Dell’ight!

As a report indicates, Dell has moved from being just about an also ran to a leading position in the Indian PC space; and an internecine tussle with HP for the top slot is now in order. B&E analyses the current and future dynamics of this competition. by Virat Bahri

All it takes is one leak of a report and all guns come out blazing; more so when it’s a question of the Indian PC market. For the quarter ending June, after five years of unrivalled domination in the Indian PC market, HP has actually been upstaged; by its very own compatriot from the US – Dell Computers!

Reportedly, Dell in India cumulatively sold 353,000 PCs in India for the Apr-June 2010 quarter compared to 331,000 for HP. As per figures from another IMRB ITOPS study for H2 2009-10 (Sep 09-March 10), Dell had a market share of only 13.2% compared to 17.2% for HP-Compaq. Seen together, it’s clear that Dell’s first quarter lead has taken everybody by surprise. Strangely, while Dell was not willing to comment to B&E, HP was decently acquiescent while sharing with B&E in their defence of the current situation (read HP’s Sunil Dutt’s interview after this article; HP still maintains its global lead in PC shipments,). While a quarterly statistic just reveals the iceberg’s tip, developments leading to this coupé of sorts do portend exciting transformations in the landscape.

There was little that one could expect from Dell in India initially. One of the favourite case discussions in b-schools had been how Dell’s largely ‘American’ direct marketing model was so out of synch here. For starters, one could easily point out to the ‘touch and feel’ approach of Indians towards buying, more so with technology intensive products like computers (compared to Dell’s pervasively online sales approach; successful in the US). Secondly, when you look at the vast and tough Indian terrain beyond SEC A, it looked even more daunting sans a channel-driven model. But interestingly, the ‘heartbreaking’ shift for Dell happened in US itself, when the company was going through difficult times a few years back. Analysts and practitioners alike questioned the relevance of Dell’s (over?)reliance on direct selling. Even academicians (like Sunil Chopra, Senior Associate Dean, Kellog’s School of Management) had pointed out that the maturing of the PC industry had made exclusive direct selling obsolete, even in the developed world; and more so due to the typical aspect of deliveries being delayed (relatively, that is). Dell was advised incessantly to adopt a dual channel strategy to cater to both types of customers – those who wanted to purchase offline versus those who preferred online purchases (In markets like India for example, customising product configurations – or at least giving the consumer such a perception – was expected to work brilliantly). Dell clearly was not the favourite for Indian customers a few years back. Then where did the change occur?

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