Lodha Group

When IIPM comes to education, never compromise

Investee: Lodha Group
Investor: Deutsche Bank
Investment Value: $425 mn

Abhisheck Lodha, Director, Lodha Group, believes, “Under this transaction, the investors have invested $425 million in the Lodha Group’s Special Purpose Vehicle (SPV) for the development of three of our FDI compliant projects, located in and around Mumbai. The investors will receive a stake in these projects.”

A clutch of PE investors led by Deutsche Bank Singapore invested $425 million in the real-estate developer, Lodha Group in September 2007, marking the single largest investment in a city-based developer in India. The demographics of India’s boom in the real estate sector, is extremely compelling for global investors. Established in 1980, Lodha Group is headquartered in Mumbai and is currently developing in excess of 25 million sq. ft. of prime real estate over 27 projects in and around Mumbai. The group has also recently kicked off its geographic expansion by winning 13 acres of premium property in central Hyderabad. The company’s portfolio consists of residences, office spaces, IT campuses, townships, weekend retreats and also the very high potential SEZs. The group professes to abide by quality and timely delivery of projects and currently employs over 500 professionals. The bid is to expand ferociously and boost employee strength to 5,000 over the next few years. Following DLF’s example, the Lodha Group too aspires to come out with a Rs.8,000 crore IPO in the first half of 2008.

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Source : IIPM Editorial, 2008

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

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global
The Indian Institute of Planning and Management (IIPM)
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First-mover’s disadvantage

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Or call it the fast-follower’s gain. Many think that in the race to produce the world’s cheapest car, Tata Motors has a clear advantage; it’s the first to enter the fray, it has forced others to follow suit, and it will retain a dominant market share for a long time to come. It did it in the small diesel car category by being the first and ruling the roads for years. Even today, Indica is a big challenger to Maruti and Hyundai in the compact segment.

But then, think again, and think out of the box. Several studies have now proved that “there were plenty of industries, where the first movers got killed.” Richard B. Mckenzie of the University of California has shown that failure rates across traditional industries for first-moving pioneers were 71%, and they had a meagre market share of 6%. Even in the field of technology, where first-movers invariably have an edge, studies have shown that their success wasn’t dependent on technological progress; in fact, other factors played a larger role in determining their outcomes.

Here are a few examples of first-movers’ failures globally. On June 4, 1924, the ten millionth Model T Ford left the Highland Park factory. But, by 1926, the sales of this path-breaking model had plummeted, and it was out of production the next year. It was America’s first ever cheap car. In the 1960s, v Excel was the first patented spreadsheet software. But the market changed rapidly by the 1980s, and Lotus became the new spreadsheet standard. The same happened with CP/M, the first operating software that none of the readers may have even heard about. We have all been either ‘Gated” by Microsoft or ‘Linuxed’ by the free developers.

As a 2006 edit in 4Ps B&M read: “So which was the first company to introduce shaving blades? Not the current world leader Gillette, but the extinct Wilkinson Sword. Browsers? Obviously not Microsoft with their number one Internet Explorer, but the ‘over the hill’ Mosaic. Search engines?

Surprisingly, not Google, but the laggard Yahoo! Supermarkets? Not at all the giant Wal-Mart, but the King Kullen Grocery Company. The first liquid soap? A thoroughly unheard of Minnetonka. VCRs? You wouldn’t even have imagined the name of Ampex. The first hybrid car? Not Toyota with its world beating Prius, but Renault. The first computer? Neither HP, Apple, IBM, nor Dell; but Micro Instrumentation & Telemetry Systems (phew). Video games? Not the numero uno Sony, with its Playstation series, but the well-forgotten Atari….. Refrigerators, televisions, cell phones, cameras, banking, watches – the downfallen first movers’ list is never ending.”

In the small car space, there are several second and third-movers, who are gearing to steal the thunder, or rather the accelerator, from Tata. Skoda has launched Fabia, a premium model in the compact segment. Maruti Suzuki has showcased A-Star and Splash, which are likely to be priced between the Alto and Swift. Ford has decided to invest $500 million in India to launch a small car. And don’t forget about Bajaj Auto, Honda, Renault and Nissan, and many others, who have similar dreams.

Still we at 4Ps B&M think that Ratan Tata can easily shift into the fifth gear from here. It may take him a couple of years, but he will be way ahead of his competitors in this race to sell small cars in India and overseas markets. His first advantage is that he has created a new market, he has dared to tap into new set of consumers, decided to design, develop and manufacture a product for the ‘bottom of the pyramid’. He has opened the floodgates for millions to own and drive a car.

The second advantage that Tata Motors has is that he has managed to convert its engineering skills into making an innovative product(s). It has managed to slash costs that no one thought was possible. This was despite the fact that costs (including manpower) have risen tremendously ever since Tata conceived of his ‘dream’ project. The third advantage is that Tata Motors has forced other competitors to think differently. Now, firms can talk about a people’s car.

If Indica (diesel) changed the way an Indian consumer thought, the Nano will force him/her to act (and now buy). And if the Nano becomes a big hit, it will make Tata a global super hero.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Dressed for all ‘Seasons’!

When IIPM comes to education, never compromise

It’s small... but it’s growing fast... much faster than you thought!

From fibre to fashion, the budding (rather, blooming!) Indian textile industry is creating memorable ripples on the global ramp – and you could easily swear by this truth. So whom do we bestow encomiums upon for taking India Inc.’s textile arm to the stars? Of course,we can’t miss out on the blue chip heavyweights. But then, there’s more to it than meets the eye – for can we afford to belittle the achievements of the lesser known and smaller organisations splatterred across the Indian textile vertical band? Certainly not!

And one among the small wonders is Seasons Furnishing Ltd. – an emerging identity in the world of textiles, making a name for itself amidst the clutter of wannabes...From the onset of its corporate journey, the ultimate goal for Seasons Furnishing Ltd. was crystal clear – to make an everlasting impression for itself in the world of textiles. Talk about it - cushion covers, bedsheets, sofa linen et al; it’s product offering is indeed wide and promises high quality standards. And what about competition on a global scale and the threat from the international bigwigs? To this, Founder MD, Mandeep S. Wadhwa, deftly replied, “When we started-off, there were no foreign players in luxury segment of the furnishing market. So we knew that we will have an early mover advantage. But at the same time, I knew that it wasn’t long before foreign players jumped into the scene. Keeping this in mind, we never segregated between the products that we exported and the ones we sold in India. And this hasn’t changed since...”

Bucked up with his wonderful experience in exports, from just being an unbranded & unorganised player, he formed Seasons Furnishings Ltd in 1994. Sounds smooth, doesn’t it? Right, but wait before you mistake it to be a rose-laden path... With India being a price-sensitive war-zone, ‘high prices’ proved a major bottleneck as Mandeep recollects, “It’s not that there was no customer for this type of expensive luxury product; but being an unknown brand, people were not willing to spend on our products.” To its relief though, with time, its tie-ups with other furnishing shops ensured some reassuring presence in the market. Thereafter, he rolled-out exclusive stand-alone stores additionally roping-in foreign brands for his stores.

Sahoo gives his take on building the talent base in Reliance’s ongoing mammoth retail initiative, “Our plan is to build the supply side of the talent. We have done the need analysis and are working on the development plan; in this country we have a lot of raw talent and we need to transform that talent. You can take talent from the industry; however, the industry has limited availability and the only way is to create this talent by building the supply side of the talent.” Sahoo’s statement gains more ground if one looks at the estimates by Technopak that project the organised retail sector in the country to grow at a CAGR of 28-32% from 2007 to 2020 and touch a 35-40% share of retail consumer spending in India. An elementary logic surfaces: With the industry growing, the demand of skilled labour (read as professionals) would also surge. The government’s decision to ease the FDI (Foreign Direct Investment) regulations would only fuel this demand further. All these situations would help renovate the talent landscape of the country in the near future. Now if one were to assume the growth of the Indian economy at 8% and elasticity of employment at 0.30, then with the population under the age of 15 in the country (currently at about 435 million), McKinsey estimates an overall level of about 5.1% of the population would be educated till the college level by 2020. This clearly implies that a small percentage of educated population would be still vacant to take up a job offer in the retail sector. All the statistics indicate there would be a shortage of talent by 2020, clearly sending a warning signal to retail companies to pull up their socks and build the supply side of talent brick-by-brick in order to meet their requirement, failing which the sector would suffer from want of talent. If one were to plot a supply-demand curve between skill level and workforce, one would find an overloaded supply of workforce at the bottom of the chart and the supply of talent dwindling as skills become more sophisticated and technical. This finding represents at once, a challenge and an opportunity to the retail sector. The test would be to find the right guy for the right profile in a labour market that is constrained. An opportunity for the retail companies would be to advance the skill sets of the surplus workforce at the lowermost levels by educating, training and employing them at entry-level positions.

Sahoo, who believes in operating straight from the heart, while speaking on Reliance Retail’s training module states, “You need specialisation and also you need people who can perform the generalist kind of roles. We focus on specialisation and we are also nurturing people to be leaders who can be multiple specialists in their team and can deliver the general management goals.” Training and nurturing the right talent would help unleash a socio-economic revolution in our country. This situation requires a significant amount of time, money and effort to be spent on creating a strong retail company, driven totally by talent and having a sturdy Employment Value Proposition (EVP) generating attractiveness in the employment market, thereby enhancing commitment and productivity of the workforce.

If one were to define EVP – it is an aggregation of People at Workplace, Quality of Work, Opportunities for Growth, Organisational Culture and Recognition & Rewards that an employee would expect from his job. Research also indicates that companies maintaining a healthy EVP end up paying only 11% premium to attract talent, in comparison to a figure of 21% for those who don’t manage one!

Challenges notwithstanding, this sector is too full of opportunities and would generate an enormous amount of employment that would transform the socio-economic scenario in India. However, effective steps need to be taken to implement a talent transformation approach, emphasising on recruitment of freshers with the right attitude and nurturing them into full-fledged professionals in this industry through necessary inputs to hone their skill sets... So, next time you overhear one discussing how the sun is already shining o’er the retail sector, you’d better believe him!

Edit bureau: Angshuman Paul

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

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
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Hygiene & health...

IIPM - Admission Procedure

aren’t just enough for the giant’s well-being!

“Have you ever heard of ‘Dettol’ and ‘Disprin’?” What if someone asks you this question? What would your response be? “Stupid!” Right? And we totally understand you... totally, especialy having understood that the two brands are more than just the two-strong pillars for the FMCG giant Reckitt Benckiser. However, there’s danger lurking round the corner too as besides the two names, the company has no other pillar to support itself. Thankfully, the giant today is now all set to diversify in the generic segments of personal care – something that is the need of the hour. Of late, the home-care segment has been the cash cow for the company but to have a leadership position in FMCG one needs to strengthen its presence. And improving upon its brand Dettol remains the best chance for the giant. In an exclusive interview with 4Ps B&M, Stefan Gaa, Regional Marketing Director (South Asia), Reckitt Benkiser reveals the company’s future plans with Dettol and it’s growth strategy in the personal care segment.

4Ps B&M: How are you planning to increase your presence in personal care segment?

Stefan Gaa (SG): We will have many products in the personal care segment and it will be under the brand Dettol. We will be venturing into other segments too and will have seasonal products like Dettol cool shower gels. We will also move across the value chain to bring-out products like sanitisers and other variants in the beauty segment.

4Ps B&M: But isn’t this initiative disturbing the earnestly generated ‘anti-septic & hygiene’ brand image of Dettol?

SG: No. Even if we are venturing into a new segment, we are not compromising on our brand image. All our products under the Dettol umbrella will be addressing health & hygiene needs. Rather, this will give us an edge over competition and other common beauty soaps available in the market for we will have beauty bars which will at the same time focus on the hygiene factor.


4Ps B&M: In the beauty bar or generic soap segment, rivals have a strong positioning with wider product portfolio. Don’t you think it will be difficult for you to gain market share?

SG: We might have a lower count of products, but our product attributes are more than any other available in the market. Moreover, Dettol is a widely accepted brand in India and that’s the reason all our venture in personal care segment will have the brand name Dettol. We are also the market leader in anti-septic liquid, where no other player has a market share even close to us.

4Ps B&M: How important is the term ‘retail’ to you?

SG: We have a global operation model, which focuses on all members of the distribution channel. So whether it’s a big retailer or a small wholesaler, we do business directly with them which enables us to ensure our presence in every corner of the country. We never believe in exclusive tie-ups with retailers and today, we do business with Reliance or any other similar chain. But on a general note, retail is still very critical...

4Ps B&M: Your future plans...

SG: Clearly, Dettol will be established as an iconic personal care brand and is more associated with lifestyle. And definitely, the contribution from Dettol in India to the global turnover will grow higher by the day.

Edit bureau: Angshuman Paul

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

For More IIPM Info, Visit below mentioned IIPM articles.
When IIPM comes to education, never compromise
IIPM, GURGAON
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!

Take the Royal road to success!

When IIPM comes to education, never compromise

Flexibility and creativity will be critical for success, says Ajay Bimbhet

Ever since the market opened up, the insurance industry has exhibited impressive performance. Where do you see it a few years down the line? Increased consumer awareness of the benefits and the importance of insurance and re-insurance has generated many more buyers. The introduction of new standard market wordings and buoyancy in automobile and health insurance is currently driving growth in the general insurance industry.

De-tariffing has the potential to transform and liberalise the insurance market. Furthermore, it will lead to the Indian market achieving global standards in underwriting and risk management besides encouraging innovation.

How do you plan to further strengthen Royal Sundaram’s retail business?
A substantial share of the retail business can be captured by expanding geographical distribution and by using innovative channels. Flexibility and creativity will be critical for success in the move towards retail – for example, innovative new products in terms of cash-less hospitalisation products will be deployed quickly and efficiently. Easier payment options to suit individual requirements; customised policies tailor-made for the prospective clients and dedicated service points are already beginning to revolutionise the market.

Can you elaborate on your rural strategy?
Royal Sundaram’s rural business has grown, contributing 8% of the total premium. At Royal Sundaram, we have always realised and catered products to the specific needs of the rural markets. We have ambitious plans to expand in this segment and increase our customer base. Royal Sundaram has crossed 6%, which is above the obligatory levels of 5%.

Our rural business has grown considerably with wider distribution network and innovative range of products. We have tailor-made products to address the specific needs of the rural household. As an example, Royal Sundaram’s Gramin Arogya Raksha, a unique health insurance scheme for the benefit of the rural sector covers critical illness, hospital cash & personal accident.

A host of banks and others have evinced keen interest in setting up insurance ventures. Do you think this will lead to overcrowding?
We welcome competition as it is healthy for the sector.

What kind of precautions are you taking to ensure sound business practices?
We strive to understand the needs of our customers and fulfil those needs, besides insisting on strict adherence to the regulations of the country. Today, we have over 1.7 million satisfied customers who bear testimony to the success of our insurance solutions. Our excellence in customer service has fetched us a creditable score of 82% in the ACNielsen Customer Satisfaction Survey for the 3rd year.

Which innovative products do you plan to come out with, in the future?
We are constantly making innovations in our products to service the changing needs of our customers. Royal Sundaram has consistently made an effort towards innovation in personal insurance products in health, motor and accident. Our focus in the coming years will be on product innovation in the personal insurance sector and the continued support of our valued customer base.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM, GURGAON
IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!

Anil rings in the future

When IIPM comes to education, never compromise

With the twin swords of CDMA and GSM services laid out carefully by his side, Ambani junior has Bharti Mittal worried

“I am eagerly awaiting the mobile number portability (MNP) regime. As soon as I am allowed to switch operators, while retaining my number, I will shift to Reliance Communication (RCOM) for its affordability factor,” says Prashant, who currently owns a mobile connection of a leading GSM player.

Not just Prashant, millions of mobile subscribers in India (reports suggest almost 50% of the 200 million), unhappy with their operators, are willing to switch to other service providers if allowed to retain their number; and RCOM’s aggressive marketing and penetration in the Indian telecom mart over the last year, is fast making it the service provider of choice for many.

Although a late entrant, compared to other GSM players, RCOM’s ambitions were apparent right from day one – and Anil Dhirubhai Ambani has managed to live up to each of those expectations, in legendary Ambani style. Whether in terms of monthly subscriber additions, launch of valued-added services (Money Transfer on Mobiles, Live Mandi Prices) on Reliance phones, or an outstanding financial performance; Reliance Communication has been one of the most dynamic telecom player over the past few years.

Not just that, the company has also earned the tag of being one of the best companies to invest in at the bourses, giving shareholders unprecedented returns of 66%, in the last nine months alone – the best among other telecom peers.

And why not? In a sector dominated by favourite GSM players, RCOM, with its CDMA technology has grown amazingly over the last few years, and is today being considered as the biggest threat to market leader Bharti Airtel’s throne. Though Airtel has already reached the 50 million subscribers mark, RCOM is inching closer by the day with 37.8 million subscribers at the end of October 2007.

According to Chairman, Anil Ambani “RCOM has emerged as the most profitable telecom company in India with Average Revenue Per User amongst the top two and the highest average Minutes Of Usage in the country.” For the quarter ending September 2007, RCOM delivered a magnificent performance with net profits of Rs.1,305 crores, a rise of 87% over the last quarter.

Harit Shah, telecom analyst at Angel Broking credits RCOM’s success to the company’s vast network spread across the country and its strong execution skills. “Small wonder that in just seven months of its full-fledged CDMA launch, RCOM became the top mobile operator in India,” he avers. Clearly, the admiralty levels of the company are undoubtedly at an all time high. When 4Ps B&M quizzed Subrato Das, Head, GSM - IT and Special Projects, Reliance Communications Ltd. about the differentiating plank of the company, he replied, “RCOM has established a pan-India, next generation, integrated (wireless and wireline), convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire infocomm value chain, covering over 13,000 towns and 5,00,000 villages.”

The pan Indian presence apart, RCOM is also creating a revolution of sorts in the low cost/entry level segment. “We have driven down the entry-level price point for mobile connectivity to a new low with the launch of Classic feature-rich handsets at prices starting from Rs.777,” says an RCOM spokesperson. The company, touted as the dream of Dhirubhai Ambani, has also pioneered the concept of handset bundling in India, a concept which minimises the total cost of ownership for the end consumer.

In addition, over the last few years, RCOM has made efforts to become India’s leading integrated telecommunication service provider, shifting its focus to other areas of like broadband, business internet services and video conferencing. “The company also has a strong presence in the enterprise segment and the long distance business, which is a big positive. Its presence in the global data and bandwidth market also gives it a strong global presence,” elaborates Shah. RCOM has established an impressive enterprise customer base, with over 800 of the top 1,000 Indian enterprises, thus expanding rapidly in the SME market. “RCOM’s leadership position across business segments – wireless, global & enterprise broadband – provides the visibility for continued value creation,” says Subrato. Taking its “integrated” strategy ahead, RCOM has also partnered with Microsoft to provide a highly personalised experience to the consumers through its IPTV (Internet Protocol television) service. “Backed by powerful Microsoft Mediaroom software, IPTV promises to offer our subscribers more choice, control and convenience,” believes Ambani.

Considering that Ambani has now got the DoT nod to additionally launch GSM services, RCOM’s duel with Bharti Airtel is all set to intensify. With the double edged GSM-CDMA sword, the telecom power balance shifting to RCOM is not a distant dream any more. The junior Ambani has already initiated talks with equipment vendors for its GSM roll out at an estimated cost of $5.6 billion. The lines are still open. Edit bureau: Devdeep Singh with inputs from Pawan Chabra

Edit bureau: Devdeep Singh with inputs from Pawan Chabra

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM, GURGAON
IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!

The charge of the ‘foreign’ brigade...

IIPM - Admission Procedure

The world talks about the furious India Inc. growth story and about how India as both a manufacturing and services hub is increasingly gaining respect from multinationals, the world over. Talk about it and it appears as nothing more than a debate... until you actually turn your head towards the host of international names that have been selected during just the past decade to run the businesses of MNCs on Indian sub-continent. Brian Tempest (of Ranbaxy fame), Darryl Green (of TTSL fame), Warwick Brady (COO, Air Deccan), Douglas Baille (CEO, HUL)... and the glittering list of such expat CEOs simply go on... “Why non-Indians?” you question. Well, the answer is truly straight-forward – where there is a developing economy and a high-potential industry to double that up, multinationals don’t seem to take a chance, as is obvious. Take a look at the very list and you cannot question the competence of these fair-skinned CEOs who seem to have confi dence instilled in them right from the moment they step onto the Indian soil, and of course, loads of experience to back that up. Yes, industries like telecom, aviation, FMCG, pharmaceuticals et al which hold truckloads of promises for the international titans are placed under the expert charge of these very international CEOs who lead the charge even on the Indian soil right from the start and do the initial ground-work for the Indian leaders to take over.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
When IIPM comes to education, never compromise
IIPM, GURGAON
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!