Sunday, February 10, 2013

“I will only think of competition when I am not growing..."

Micromax founder and Executive Director Rahul Sharma in an interaction with Surbhi Chawla of B&E

Ask Rahul the inspiration behind the Micromax venture and the answer is quite interesting. He saw villagers in Rajasthan having to go long distances to charge mobile phones and hit upon the idea of manufacturing one with long battery life. The rest, they say, is history in the making. In this interaction, he discusses the ongoing market situation that Micromax faces:

B&E: You are being looked upon as overnight stars and there are speculations doing the rounds that you are at number two in the India handset industry. So how does that feel?
RS: We are not overnight stars. It has taken some time to get us to this place and we are not number two. We are still trailing Samsung but then, number three is not the bad spot to be in. But give us six more months and may be things might change.

B&E: You had achieved shipments 1 million in January itself. So why is it that your visibility in the market still remains low?
VJ: Yeah, we get that a lot. The thing is that what you see in the market are things that are not sold. Only things with greater shelf life will have visibility. Our stocks don’t last as much for people to put them in displays.


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.

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Thursday, February 7, 2013

Fiends on the prowl

A TSI sting operation finds how paedophilia has turned into a thriving business in Delhi, NCR and Mumbai. Taking advantage of kids’ poverty and craze for brands and gadgets, middlemen get rich by supplying minor boys and girls to satiate the desire of sick, rich men, many of them NRIs and foreigners. By Abhishek Kumar and Neeraj Rajput

Dutch national Will Heum’s arrest in Chennai for having sex with minors and uploading pornographic pictures on the Internet came as an isolated shock to the nation. But a TSI investigation finds out that paedophilia is rampant in India’s cities. The number of sick and rich individuals who want to have sex with minors is large enough to sustain a thriving business involving middlemen and child sex workers. So if any of you thought paedophilia was a western malaise that would not affect India, you could not be more mistaken.

Children are the easiest to be taken advantage of. Poverty as well as their desire to own the latest gadget make them vulnerable to overtures of middlemen. Most kids, whom the TSI team met, had told their parents that they were going for study or dance lessons. To explore more, the TSI special investigative team visited Faridabad, Noida, Delhi, Mumbai and Goa many times. What was astounding was that despite being minors, these kids spoke and reasoned like adults, obviously trained by the pimps who brought them along. Another startling fact is that not only kids from poor and needy families are being trapped in this racket. Kids from rich or well-to-do families are also lured into the trap.

We got lead about Ansh, a pimp in Noida. One of us posed as an Australian NRI on the phone and he agreed to meet us. The next day, we met Ansh at a coffee outlet in Noida market. We reached much before time, eager to find out who all accompanied him. There were two more people, one of them a girl. When we met him, a kid sitting next to him greeted us. He said he was 14 years old, but looked younger. The smartly dressed kid looked like from a well-to-do family. The kid said his father was a big officer in Indian Railways. He was so confident that we felt we were not talking to a child but a professional.

TSI-What work do you do?
Boy-I am a student.

TSI - Where do you study?
Boy-I am in the XIIth standard

TSI-What is your age?
Boy-14 yrs

TSI- But you don’t appear 14. Incase you are wondering where I got your number from, I saw an ad in the newspaper and picked it up.
Ansh-Yes. We have advertised many times in newspapers.

TSI-What do you advertise for?
Ansh-For body massage


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.

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EXCLUSIVE : WAR ON TALIBAN

Change in counter-insurgency tactics has helped Pakistan smoke out Taliban from FATA. But the real challenge will be to consolidate the gains reports saurabh kumar sahi from Bajaur agency in Fata

The youthful, spotlessly attired soldiers of the Bajaur Scouts entrusted to guard one of the world’s most uncongenial terrains give vent to their frustration to anyone willing to lend them a ear. In the last one and a half years they have turned battle hardened as they have driven thousands of Taliban militants from their strongholds at Damadola near Khar, the administrative centre of Bajaur. The operation reached its culmination this month when forces removed the Taliban from profoundly fortified positions. But Colonel Nauman is not happy. In fact, he is furious that hundreds of Taliban slipped across the border into Kunar in Afghanistan, which has minimal or no presence of NATO forces. Those escaped are being provided safe haven there as the boys of Frontier Corps and Bajaur Scouts wait in anticipation. Commanders maintain that they had let Americans known that Taliban were fleeing into their territory but they were neither intercepted nor confronted.

“We have done everything the West asked us to do, but we feel badly let down,” says Nauman. In fact, Pakistan is so fatigued of being told it needs to “do more” that Nauman does not miss the chance to remind Americans of their message. “In their language, they to do more,” he adds for good measure.

The story of Bajaur starts with the American attack on the province of Kunar in Afghanistan. The area between River Kunar and the Durand Line that varies in breadth from 12 kms. to 25 kms and stretches to nearly 160 kms, saw heavy action. However, the tried and tested technique of insurgency operations, ‘Hammer & Anvil’, was not used. As the Americans went for the kill, the Pakistani counterparts were not taken into confidence. And hence with NATO blazing on their back, the Taliban entered into Bajaur.

There are officially four passes from Kunar to Bajaur—Letai, Kaga, Fazal and Nawa, apart from hundreds of relatively uncharted ones. Nawa Pass was the one that was used by Alexander the Great to enter India. One of his commanders, Ptolemy, writes that the Hellenic army faced the fiercest resistance here. Village after village perished, but none bowed. They perished but not before Alexander himself was pierced by a bolt that nearly killed him. These hardy tribes were tough then; they are tough now as well.

When the fleeing Taliban entered these regions, the Pakhtunwali came into play. Pakhtunwali, or the traditional code of life for Pakhtuns consists of nine codes—melmastia (hospitality), nanawatai (asylum), badal (justice), tureh (bravery), sabat (loyalty), imandari (righteousness), isteqamat (faith in God), ghayrat (dignity) and namus (honour of women). The Taliban sought melmastia and it was granted.


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.
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Tuesday, February 5, 2013

When the ‘ketal’ goes boiling...

An unknown Indian firm Dorf Ketal buys up the global catalyst business of DuPont Chemicals! Why isn’t everybody this side of the Atlantic celebrating, asks B&E ‘s Angshuman Paul

Seriously, how many of you had ever heard about Dorf Ketal? Considering that it is an Indian specialty chemicals company worth $220 million (revenues for year ending March 2009; targeting $300 million by 2010-11), you would understandably be quite reluctant to reply in the negative.

However, it isn’t entirely surprising that the company operates in relative obscurity. Besides the fact that it is a B2B player, the company has followed a very conservative model for growth and diversification. Consider this – after eight years of their corporate journey, the company decided to diversify (in 2000). And then, unlike other companies, Dorf Ketal hasn’t believed much in the concept of branding as a B2B company; even as world famous B2B companies are beginning to realise its criticality. And they intend to keep things that way. “Since we are in the B2B arena, mass consumers are not expected to know about us, but our target audiences like Reliance, IOC et al, know about us” argues a senior official from Dorf Ketal.

Nevertheless, things seem to be changing during the last decade for the company. They have grown by more than 30% during this period by cashing in on acquisitions. A bird’s eye view at the activity of the company during the past decade tells us that in a time span of eight years, the company has made at least five acquisitions to leverage potential synergies. For instance, when it acquired Sanmarg Specialty Chemicals-owned Intec, it helped Dorf Ketal to diversify into organic products like titanates and zirconates that have a strong demand in industries like oil & gas, paints & coatings, printing inks, industrial sealants, corrosion protection & emission reduction.

And now the name of Dorf Ketal has suddenly gatecrashed into notice with the acquisition of the global catalyst business of DuPont Chemicals and Fluro Products for around $40 million. The deal has been funded through debt and equity funds injected by the promoters. This particular venture of DuPont minted revenue of $50 million during 2008.


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.
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Sunday, February 3, 2013

Where’s the ammo, Chief?

Expensive acquisitions have dented the group’s financial position

Hunger for growth and expansion should be in-built in the DNA of an ambitious business corporation, for only then can it make the cut. It is indeed a trait we would want the Tatas to retain. After all, their role in the evolution and growth of India Inc. since the early 20th century can hardly be overestimated.

However if ambition is not combined with prudence and a clear understanding of the competitive landscape, it can lead to terrible consequences. Tata’s over-ambitious acquisitions of Corus, Jaguar & Land Rover have landed this business giant in quite a bit of bother. If the purchase of the Anglo Dutch steel manufacturer, Corus (in 2007) catapulted the combined entity, Tata-Corus (worth $8 billion) to the position of the fifth largest steel producer in the world; it also brought along a debt burden of $6 billion. This increased the debt-equity ratio of Tata Steel from 1:1 in 2006 to a post acquisition high of 2.74:1. To add to the woes of Tata, the double whammy of rupee depreciation and falling demand and profitability in the ongoing economic downturn made the payback of the loan a cumbersome task.

And Tata did not stop there. As the global auto industry was beginning to feel the slowdown heat, Tata Motors went ahead and bought two dead dodos from Ford Motors – Jaguar & Land Rover (JLR), for a whopping $2.3 billion in March 2008. “Corus and JLR purchases have turned into financial bottlenecks for Tata Group. They have led to funding problems for the entire group, which are likely to persist for the next two years. This is hurting future business prospects of Tata Group Companies,” explains N. Wadhwa, MD, SKI Capital Ltd. It comes as no surprise that the sales of Land Rover plummeted by 58% during the last quarter of 2008.


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.
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