Report on Frontier Markets
InOpen
Face to Face with Mr. Gurumurthy January 2011
COVER STORY
Scale-up in Competitiveness for India - A Management Perspective Shailesh J. Mehta School of Management Indian Institute of Technology, Bombay 1
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|EDITORS NOTE|
TEAM L!VE
ABHISHEK MISHRA ADITYA KAUL AKANSHA GUPTA ARUN KUMAR SINGARAJ MANISH KUMAR NANDINI MURALIDHARAN SOMAK CHAKRABORTY SUJATA MURMU SWAPNIL KUMAR UDAYARAJAN V
Dear Readers, According to a Harvard Business Review article, many managers believe their business experience and knowledge base alone equips them with all the information they need to conduct effective strategic planning. This belief is almost always untrue and serves only to undermine the kind of critical thinking from which truly creative strategies are born. In this issue of L!VE, we look forward into the future of management; the theories which will usher in the new era of practice; the changing trends which will redesign the new marketplace; the evolving demand structure which will renovate the supply paradigm. In this edition we have articles ranging from an insightful dissertation of the animation industry, an analytical report on the Frontier Markets to a thorough analysis of how India has increased its competitiveness in the last decade. Our regular column on Insurance covers Unit Linked Insurance Plans or Ulips in details. We also take a look into the tactic of Comparative Advertising being practiced in India and re-visit the concept of Six Sigma. Our Start-up story section features a very own IIT Bombay company InOpen which is working in the fast growing educational sector. As India braces the new age growth and leads the baton of emerging economies and China rides a wave of global takeovers, we realize that we are living in an exciting time indeed. Excitement is not without concern as the Euro Crisis still lingers and there remain unresolved issues on climate change. The world around us is changing very fast. What these will mean for the coming future, no one can tell. We can merely speculate and hedge our risks!
VINAY RAJ KUMAR MANDAVILLE
Happy reading!
VISHWANATH PRATAP SINGH
Aditya Kaul Editor-in-Chief L!VE Magazine
E-mail: live@som.iitb.ac.in Website: www.som.iitb.ac.in/live
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|CONTENTS|
START-UP-STORY 31 | INOPEN- Another Offspring from IIT Bombay
BIZ WITS
06
34 | Quetzal 43 | Answers
Issue # 3 / 2010
CREATIVE BEND
COVER STORY
36 | She Sells, Sea Shells... on the Sea Shore! 38 | Beauty becoming Bane
06 | Scale-up in Competitiveness for India: A Management Perspective “India has taken one of the most remarkable leaps in competitiveness in the last half decade. “
BOOK ESSENCE 40| Simply fly
31
RESEARCH LABS 09 | Report on Frontier Markets An Asian Perspective 12 | Got animated --- We have got TOONED!
FACE TO FACE 15 | Natarajan Radhakrishnan 18 | Swaminathan Gurumurthy
12
EXPERTS SPEAK
SOM-thing Special
20 | Comparative Advertising – A Recent yet Fast Growing Tactic in India 24 | Unit Linked Insurance Plans – The New Avatar!
44 | Technology Strategy Lab 46 | Avenues 2010 48 | Dignitaries on campus
STUDENTS SPEAK 26 | Currency War: A Road to Great Depression 28 | BEYOND SIX SIGMA Integrating Six Sigma with other Business Processes
49| SOM ACHIEVEMENTS
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AVENUES 2010 Partners
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|COVER STORY|COMPETITIVENESS|
Scale-up in Competitiveness for India: A Management Perspective
“India has taken one of the most remarkable leaps in competitiveness in the last half decade. Scaling up to next stages of competitiveness demands massive efforts by human factors, of which enlightened role of management professionals is quite crucial”, says K. Momaya Youth is among the most exciting stage in competitiveness journey of a country. Most countries aspire to be developed; very few achieve it at the pace that also matches with aspirations of masses. With several countries in Asia and Europe progressing quite effectively, the aspirations have been rising in India. Success in climbing to double digit growth rates, sustaining them and climbing up the ladder demands industrial competitiveness and rapid scale-up. A country‘s youth can drive the exciting stage in its competitiveness journey. Is youth leadership in India building skills and capabilities to climb to new heights? Seeing the talent, energy and team efforts of youth at SJMSOM, we are quite optimistic. Scale-up in competitiveness is quite an exciting and L!VE
demanding concept. Competitiveness is an interdisciplinary area having relevance across levels: country, industry, cluster and firm. In context of firm, drivers and enablers can be from any function, e.g. Operations, HR, marketing, finance or technology. We will attempt to simplify it for benefit of Dr. K. Momaya is a core readers who are actively faculty with the striving for such a scale-up Shailesh J. Mehta School of irrespective of their context: Management, IIT Bombay. corporate, government or These are his personal institutions. We considered views.
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|COVER STORY|COMPETITIVENESS| the large strong country group and it is Per capita GDP US $ aiming for rank 2 Year of Survey within few years. Vast Country 2009 2008 2007 2009 2008 2005 2004 2003 gaps in per capita GDP of India as compared to developed USA 46,381 46,716 46,849 2 1 1 1 1 countries hint at huge Canada 39,669 42,030 39,901 3 4 2 3 8 potential opportunity. Australia 45,587 47,498 43,752 7 10 15 16 14 While some in G7 can say that Indians Japan 39,731 38,443 40,207 20 16 19 19 30 should be content with Korea 17,074 19,115 16,740 23 22 22 25 27 development they can China 3,678 3,263 3,593 17 20 24 32 31 have with annual per capita incomes reIndia 1,031 1,068 904 28 33 47 42 42 maining below Rs. 1 lakh (say about US$ Out of No. 2,500 by 2015), that 67 67 66 68 56 Countries may not be acceptable Note: Ranks for India in NCR in 2006 and 2007 were 38 and 32 respectively. to many in India, parSource: Developed based on data from National Competitiveness Research (2010) ticularly the youth teams that have energy and capamany perspectives on competitiveness and popular bility to play in tougher arena internationally. definitions to experiment and evolve generic defini- Why scale-up for India now? tions and frameworks to evaluate competitiveness . In India has been working hard to accelerate its develthis article, the focus is on the macro a key dimension opment journey for quite some time and rapid scaleof scale-up for country competitiveness. Very simply up in industrial competitiveness is necessary to put, a country‘s competitiveness can be defined as its achieve the same. The journey post independence capability to produce goods and services that meet has been remarkable in several respects, but inadethe test of local and international markets while si- quate to meet growing needs of huge population Inmultaneously enhancing the real wealth of its citizens . dia could not stabilize. Compared to its historical In practice, it is evaluated as a relative competitive share of output, trade and other contributions to the position and is measured on more than 200 criteria world, recovery post-independence can be considincluding the best of Porter‘s Diamond Framework ered marginal. For instance, in the important dimenand its extensions including more relevant human sion of industrial development—manufacturing—, factors. Data for benchmarking is taken from a com- India‘s share in the world was 24.5 % in 1750 and prehensive and sound country report: National Com- 2.4 % in 1938. India‘s share of world trade which petitiveness Research. Table 1 Trends in competitiveness ranks of India and select large countries
National Competitiveness Research
The significant leap in competitiveness that India has achieved in the last four years is indicative of the challenging opportunities on the road ahead. Rarely in the past has India jumped such fast on competitiveness ranks as in the last half decade—from 47 to 28 (see Table 1). China‘s massive scaling up over several decades with double digit growth enables it to jump to rank 4 in 7
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|COVER STORY|COMPETITIVENESS| Table 2 Glimpse of positions of select countries on key human factors
Country
Select Implications:
While many in India will readily agree for Entrepreneurs Professionals scale-up, achieving it 8 14 demands much more collaborative efforts 2 11 than what many stake9 13 holders have ever 26 25 thought or put. Differ38 24 ences in China‘s ef18 16 forts for Beijing Olym31 36 pic and India‘s efforts for Delhi Common 36 31 Wealth Games provide the stark reality. Being a major meet after quite long time (e.g. Asian Games of 1982), India should have aimed to not only manage the games most professionally, but also for a top slot. Taking a comparison to highlight the scaling needed; India ranks at 50 during the Beijing Olympic as compared to No. 1 rank for China. Innovations are needed in educational institutions also where young aspirants learn to play.
NCR Aggregate Ranks on Human Factor
Workers Politicians Bureaucrats
USA
27
Canada
11
Australia
20
Germany
33
Japan
21
Korea
47
China
2
India
1
19 9 8 17 27 50 15 33
17 5 6 22 20 43 25 31
Source: Developed based on data from National Competitiveness Research (2010)
was about 2.5 % at time of independence shrunk to less than 1 % and despite all trade policies, incentives and efforts, remains below 2 % with record deficits on trade front every year. For instance, as per RBI data, trade deficit was INR 293,758 crore (more than 50 % of exports of INR 574,917 crore) in 2006-07; too high despite many advantages. If India does not attempt a rapid scale-up in its competitiveness with the best of its youth force available, it will face a massive turmoil sooner or later. The opportunity to catch-up on the wealth (e.g. a simple proxy say per capita GDP, see Table 1) is so vast that few in India would like to fritter away this rare once in a millennium opportunity (mistakenly so called demographic dividend). Efforts to lay foundations began quite early but progress on the competitiveness journey has been too slow, particularly on human factors. For instance, organizations such as Indian Space Research Organization (ISRO), Gujarat Cooperative Milk Marketing Federation (GCMMF) and institutions such as IITs that have started making impact are now in their 40s or 50s and may be ready for scale-up. Competitiveness research indicates that human factors play more important role in scale-up for the stage India currently is. India recently surpassed China to reach rank 1 in terms of unskilled workers (see Table 2), transforming them into quality skilled workers is a real challenge. Comparisons with select relevant countries, hint at big opportunities of scaling lie with stakeholders like entrepreneurs, aspiring intraprenures and professionals playing the most important role. Survey results hint that their education level and international experiences are relatively lower to tackle the massive challenges India is currently facing.
At Shailesh J. Mehta School of Management, IIT Bombay, relevant initiatives like the ―Technology Strategy Lab‖ (TSL) and ―Industrial Competitiveness through Innovation‖ projects provide a rich platform for its committed and fit students to learn, implement and tune the path to be taken. SJMSOM has started becoming aware about excellence and competitiveness and contributed to make IITB the leading institution in ―National Competitiveness Research‖ survey. New courses on competitiveness are being designed and will be available so that keen learners can get skills in basics of excellence and benchmarking. Thus, we will start contributing our share for competitiveness and development of India.
Acknowledgements
Cooperation from several young coordinators and participants in the competitiveness survey done across India is gratefully acknowledged. Particularly, Dr. R. Chaudhuri from NITIE, M. Mukundan at SJMSOM, Ms. R. Umamaheswari and other volunteers at the Strategy and Competitiveness Lab, DMS, IIT Delhi have played key coordinating roles. Thank you coordinators of TSL and all participants from SJMSOM for your contribution.
References and Notes: For details, readers can refer to Momaya K., 1998, “Evaluating International Competitiveness at the Industry Level,” Vikalpa-The Journal for Decision Makers, IIM Ahmedabad, April-June, Vol. 23, No. 2, pp. 39-46; Momaya K., 2001, International Competitiveness: Evaluation and Enhancement, Hindustan Publishing Corporation, New Delhi; Banwet, D.K., Momaya, K., and Shee, H.K., 2002 “Competitiveness: Perceptions, Reflections and Directions,” Management Update, IIMB Management Review, 14 (3), Sept., pp. 105-116; Ajitabh and Momaya, 2004 “Competitiveness of Firms: Review of Theory, Frameworks and Models”, Singapore Management Review, First half, Vol.26, No.1, pp. 45-61. Adapted from the most popular classic definition in the Report of the President’s Commission on Competitiveness (1984), USA.
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|RESEARCH LABS |FRONTIER MARKETS|
Report on Frontier Markets An Asian Perspective Anjali Manuel Shanthi Y Tejasvita Madan Nandini M -SJMSOM, IIT Bombay History The term ―frontier markets‖ was first proposed by the International Finance Corporation in 1992 to describe a certain subset of emerging markets. IFC applied this term to a set of indices for smaller economies. MSCI Bara soon followed suit. Today, there are 3 sets of indices for frontier markets: S&P Select Frontier Market Index (27 countries), MSCI Frontier Market Index (31 countries) and FTSE Frontier Market Index (23 countries). The Wall Street Journal describes these countries as ―emerging‖ economies. Market classification
the foreign investor in order to qualify as a ―frontier market‖. Frontier Markets statistics and performance Frontier markets have become more developed in recent years. From an average inflation of 243.61 in 1993, it has dropped to 11.91 in 2008. GDP growth has improved from 1.53 in 1993 to 4.79% in 2008. The strong economic growth has significantly outpaced developed market growth and these economies are expected to grow at a higher rate than the developed economies and perhaps even emerging economies are expected to grow at a higher rate than developed in the foreseeable future.
However, compared to emerging economies, fronAccording to the MSCI Market Classification Frame- tier market economies have lower populations, and work, June 2010, classification into developed, are hence smaller markets. They have higher unememerging and frontier markets follows three main ployment rates, are more agrarian than emerging economies, and have much lower market capitalizacriteria. tion to GDP ratios (Acadian 2007). In fact the me1. Economic development For developed markets, the per capita GNI dian market capitalization of frontier markets is less than 20% compared to over 40% for emerging marshould be 25% above the World Bank high-income kets (Behar 2009). However, qualitative simithreshold for 3 consecutive years 2. Size and liquidity requirements Frontier markets form a good area of investWhile frontier markets only require liquidity ment due to their low internal correlations and amounting to a 2.5% annualized traded volume ra- low overall volatility. tio, emerging and developed markets require 15% larities exist between these two classes- in terms of and 20% respectively. economic growth, literacy rates, life expectancy etc. 3. Market Accessibility criteria Frontier markets require at least some open- (Acadian 2007), which suggests that such economies, ness to foreign ownership in order to qualify for clas- with a good growth foundation, might follow the path of some of the smaller emerging markets and sification. become more developed and successful for investors. Thus, though a country‘s market may be small, illiqMarket performance uid and underdeveloped, it should be investable for Considering the market performance of frontier 9
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|RESEARCH LABS |FRONTIER MARKETS| markets, the following is a tabular and a graphical representation of various MSCI indices: Thus, frontier markets have shown better growth than the EAFE and USA indices. The 2007 values, Index (MSCI Barra)
Sept‟ 03
Oct 31„ 07
Sept 24„ 10
MSCI FM
100
270.69
138.8
MSCI EM
100
3454.21
256.87
MSCI EAFE
100
216.48
129.21
MSCI USA
100
156.74
106.70
because individual frontier markets are loosely correlated with one another. Thus, incorporating a diversified group of frontier market stocks into a broader portfolio can potentially reduce portfolio volatility. (Weiner 2008, Acadian 2007). Investment risks It can be established that, with reduced volatility of frontier markets and low, sometimes negative correlations of frontier markets with the world, that investing in these markets would reduce the risk for a portfolio investor. However, there are many other sources of risk when investing in these markets: 1. Liquid – Thinly traded compared to developed markets stocks: Since the markets are usually illiquid, with much lower volumes (MSCI threshold for frontier markets
with a 170% growth in 5 years, also serve to indicate the enormous potential for future growth in frontier markets. Correlation with world markets Frontier markets have low correlations with developed market. These correlations are much lower than emerging markets‘ correlations with developed markets. (Weiner 2008). One possible reason for this is that frontier markets are less integrated with the rest of the world. Volatility
Fig. 3 Source: Frontier Market Asset Management
is 2.5% ATVR compared to 20% for developed countries) wider Bid-Ask Spreads are seen which result in higher trading costs. This results in difficult liquidation at short notice and might also result in capital flight to liquid markets during crisis. This is what happened during the global crisis 2008 which lead to a 53% dip in MSCI frontier markets. 2. Less transparency : With underdeveloped regulation and corporate governance, there is a lack of corporate transparency 3. Weak/Unfavorable Regulatory Framework : Since the markets are still underdeveloped, the Source: MSCI Bara regulatory framework of frontier markets is not yet upto the mark. Enforcement is often weak and there is a certain risk of market manipulation. There is also a currency risk due to weak currency management by central banks/govt authorities. Certain countries have unfavorable policies for foreign investment– Ukraine has imposed a withholding tax of 15% on sale of securities by foreign investors Frontier markets‘ overall volatility is low—much 4. Political & Social Instability : lower than that of the traditional emerging markets In countries such as Nigeria, Bangladesh etc, there and sometimes lower than the S&P 500 and EAFE are high levels of corruption. There is also a danger L!VE
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|RESEARCH LABS |FRONTIER MARKETS| of civil or social unrest in some of the frontier markets. There is also a risk posed by the type of government, which may be non- democratic. Economies are fragile, often with insufficient infrastructure to support projected growth.
since 2003, double returns vis-Ă -vis India.
Investment Rationale In spite of the risks of investing in Frontier markets, there is still a case for investment. There is likely to be an increase in demand for natural resources spurred by rising economic development. Frontier markets, with abundant supply of these resources, could become providers to developed and emerging markets, and hence improve their own growth prospects. Commodity driven demand would raise the exports of frontier countries.
There is likely to be an increase in demand for natural resources spurred by rising economic development. Frontier markets, with abundant supply of these resources, could become providers to developed and emerging markets , and hence improve their own growth prospects.
Labor cost in emerging economies has increased. This may result in shift of production houses to Frontier markets- ex. Labor unrest in China might shift production to other, low cost areas.
the MSCI index of Asia Pacific and the frontier markets indices. Bangladesh has a weak negative correlation with Asia Pacific and therefore it is a good option for diversifying an Asia-Pacific portfolio.
Frontier markets were less influenced by recent credit crunch, ex. Africa. They are less dependent on developed countries for financing and are lightly leveraged. This improves the growth prospects of the corporations in these markets
Frontier markets in Asia-Pacific Normalized Returns for different markets for the peNormalized index
2003
2004
2005
2006
Vietnam
100
143
184
450
Bangladesh
100
204
175
166
Sri Lanka
100
142
181
256
Pakistan
100
145
227
239
India
100
113
161
236
riod 2003-2009 Above is the table which describes the returns on the different countries‘ markets considering the base index in 2003 to be 100. Bangladesh and Sri Lanka‘s indices have more than doubled when compared to Pakistan, Vietnam and India. Sri Lanka and Bangladesh have demonstrated phenomenal growth Correlation
Bangladesh
Pakistan
Sri Lanka
Vietnam
Asia Pacific Excluding Japan
-0.33
0.72
0.72
0.62
Asia Pacific
-0.29
0.78
0.67
0.76
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Correlation between Asia Pacific index and Frontier Markets indices The table above indicates the correlation between
Conclusion Frontier markets form a good area of investment due to their low internal correlations and low overall volatility. In Asia Pacific, Bangladesh and Sri Lanka have shown tremendous growth. Bangladesh is also weakly negatively correlated with the rest of Asia Pacific and would be a good country to diversify into. However, the market 2007 2008 2009 Now here is very undevel555 189 296 269 oped with less than 312 289 469 713 10% Mar239 142 319 638 ket capitalization as a 351 155 235 243 percentage of GDP. In 347 165 299 343 contrast GDP, Sri Lanka has >23% market capitalization as a percentage of GDP. Also, its CAGR estimates for the next 5 years is close to that for India and China and hence forms an attractive avenue for investment. Frontier markets in Asia have the advantage of close proximity to emerging markets such as India and China. Resource limitation in emerging markets will help the growth of these frontier markets as they can provide these resources ex. Labour shortages in China could be compensated for by the frontier markets.
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|RESEARCH LABS |GOT ANIMATED|
T
GOT ANIMATED --- We have got TOONED!
om and Jerry, Mowgli, Scooby Doo, Tenali Raman, Flint stones, He –man –aha … We are entering the den of cartoons … and we all are getting pleasantly animated by these lovely characters. Tryst with animation and cartoons has been a long association with us in India and it still continues to fascinate us. Animation in India started with cartoons around the late 80s with Jungle Book (Mowgli), Ek Titli, He-Man & The Masters of the Universe and the mythological series of Ramayana & Mahabharata. Animation has come a long way since then and has been perceived differently by audiences across all age groups in India. Though in India animation or cartoons has been considered only for kids, unlike their counterparts in China or Japan, yet it does make a huge market from a biz perspective. It has grown big time in the last decade creating opportunities for creative talents to work either for India or for Hollywood. With the proliferation of TV channels and the rising demand today animation occupies 8 – 10 channels in the idiot box. There has been a rising innovativeness for original content and experimentation both on small screen and 70mm screen. With the advent of growing multiple media platforms, animation is not only restricted to pleasing audiences on the TV episodes but also on large screen movies , PC gaming – internet, mobile with games, e-learning, entertainment , ads etc . This is challenging the animation gurus to create more innovative animated content. L!VE
- Kamini Shevgaonkar, Research Associate SJMSOM, IIT Bombay Market Nos: Show me the money! Indian Animation Market today stands at: (source – Nasscom) 2010: $869 Million (current market size) 2012: $1192 Million (expected) It is the one of the fastest growing sector over e education/e-learning/gaming / entertainment. It has been apparently more significant as an outsourcing destination for the west because of low cost skilled labour. Animation as perceived by Indian audience: - Every Indian from 5 – 80 adores ―Mickey house‖ and ―Tom and Jerry‖; but apparently Indian animated content has been able to target only the kids and not the adults. - Animation or cartoons are still considered for kids. Though there is no logical reason for the same as the west has also equal impact of live action with Hollywood; giving an excuse of dominance of Bollywood wouldn‘t be justified. It might just be the matter of initial demand and that‘s why animation industry apparently is still nascent in India. - Also, most Indian parents are particular about their children not viewing anything filmy or violent in live action films. This is a cultural factor prevalent in the Indian subcontinent. - Most countries like Japan have animated stuffManga for adults where the culture is groomed
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|RESEARCH LABS |GOT ANIMATED| for a good story for any age group rather than the medium of viewing. Animated product from Biz pt of view in India: Indian creative animators are experimenting with animated content across various media like: Video games, e-learning, PC gaming, Mobile downloads, TV series and films. Broadly, the demand for animated products comes from: @ Films @ E-learning @ Internet: Interactive stuff, games, ecards
Animation has come a long way since then and has been perceived differently by audiences across all age groups in India. Though in India animation or cartoons has been considered only for kids, unlike their counterparts in China or Japan, yet it does make a huge market from a biz perspective. @ PC gaming @ Mobile VAS Outsourcing Pie: Most of the animated stuff goes as a part of outsourcing. Animation studios set up in India do most of the work for foreign clients. With animation process being tedious and costly even for 3D, outsourcing to India comes as a cheap affair.
§ Green Gold : Chhota Bheem on Pogo § Prana § Maya § DQ § Toonz – Tenali Raman series § Accel § Tata Elxsi – VFX for bollywood, Roadside Romeo § Graphiti – contribution of Ram Mohan § Reliance media works § Phoebus Majority of these are ventured into production of TV serials rather than movies and most of the studios are based out from western and southern India. Movies / TV serials made on Indian shores by Indian creators:
Small Screen creations: The Adventures of Tenali Raman:
It was India‘s first animated 2D television series by Toonz Animation India.
Chhota Bheem:
Super hit series on Pogo 'Chhota Bheem' is produced by Green Gold(co-production with Turner International).It started as a 13 episode TV Series, and
Mythology – the ready to implement theme for animation in India: Taking the tradition of India into consideration, Indians have always been influenced by mythology and still are impacted by the same. Animation is being considered as a medium of story telling; the PURAN from Indian culture and heritage acts as ready to use story. The latest innovativeness of integrating mythology and latest technology in the characters is the latest fad. E.g: Hanuman returns etc, JUMBO, Lord Shiva working on a Laptop, Mouse listening to Ipod etc.
based on the popularity it got extended and till date more than 60 episodes were delivered and work is underway on more episodes.
Indian infrastructure scenario and the leading players: Indian animation diaspora has a good collection of studios who contribute to the field both on the local front and outsource talent to foreign companies by co-producing in the Hollywood products. India started with cell animation and then eventually to 2D.
Krishna Balram:
3D apparently has not yet geared up but VFX has been in rising demand in live action movies.
70mm experimentation: Movies made on Indian shores in last 5 - 6 yrs have been primarily made in 2D. Few to mention are:
Studios: § Crest animation studios 13
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26 Stories of 22 minutes duration each, follow through the thrilling capers & chilling escapades of Krishna & Balram with Radha, and friends in this allnew, action packed, adrenaline-churning series. Once again by Green Gold Animation .This series is aired on Cartoon Network.
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|RESEARCH LABS |GOT ANIMATED| It also hosts Anifest India, the biggest annual animation festival in the Indian subcontinent, which features the TASI Viewer's Choice Awards. It also holds technical and in-depth workshops and sessions nearly every month. Animation Institutions in India: · National Institute of Design, Gandhinagar · ZICA (Zee Institute of Creative Art) · MAAC (Maya Academy of Advanced Cinematics) · Arena Animation Academy · Sanraa Media Knowledge Center · Birla Institute of Technology, Jaipur & Noida · Picasso Animation College, Bangalore · Bellpepper Motion Arts, Mumbai
§ § § § § § § §
Indian animation industry is expected to grow big time in coming years with multiple media platforms like 3G mobile, internet to add on. Though animation in India remains kid-centric, with the advent of
Ghatotkach Arjun Hanuman Return of Hanuman My friend Ganesha – Part I and II Jumbo Bal Ganesh – Part I and II Roadside Romeo
Costs and Revenues: Episode(s) Minimum quality
Flash
2D
3D
1
12 - 15 L
15 - 20 L
30- 35 L
16
2.4 Cr
3.2 Cr
5.6 Cr
26
3.9 Cr
5.2 Cr
9.1 Cr
32
4.8 Cr
6.4 Cr
11 Cr
Apparently all these movies have catered to kids and mostly focused on mythological themes. Indian producers have used voice-overs of Bollywood stars for better marketing of their film. Surprisingly Bollywood film makers have been bit by this bug and are coming up with future releases like Karan Johar‘s – Koochie Koochie hota hain, Ajay Devgan‘s – Toonpur ka Super hero. Also an interesting project for Rajnikanth fans ----- SULTAN - ―The warrior‖ from OCHER studios will soon hit the theatres!
Indian animation industry is expected to grow big time in coming years with multiple media platforms like 3G mobile, internet to add on. Societies and Organizations: The Animation Society of India (TASI) is a non-profit organization with its head-office in Mumbai. It aims to educate about the emerging animation technologies and at the same time provides a platform for exchange of creative and technical information within the existing art and animation fraternity in India.
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3D and new emerging technologies and globalization the universal demand is almost there! Though I personally feel that we need not compare ourselves with any other industry – the west per se; we need to analyze the Indian mind set and our original content which may or may not be mythological. Content creators have been heavily depending on mythological themes as the characters and the story are already present. India sees a great future in emerging technologies, VFX yet the Bollywood dominates! Animation --- apparently holds better market and strong potential for e-learning. But Internet penetration being only 15% all over India; things seem slow on this front. Only time will reveal where animation or TOONanization will lead to --- never mind if the toons are only for the kids – I guess everyone will still enjoy them – as ―DIL to Baccha hain ji ‖
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|FACE TO FACE |NATARAJAN|
“Banking is not a very people intensive business, whereas IT is all about people.” - NATARAJAN RADHAKRISHNAN, VP - Cognizant Business Consulting
Natarajan Radhakrishnan has over 21 years of experience in Financial Services as well as Consulting indus-
try. he is the Offshore Practice Leader & VP for Cognizant Business Consulting (CBC). Prior to joining Cognizant, he worked in iNautix Technologies (CSFB group) and Deutsche Bank group. In addition, he spent 7 years in the Investment Banking sector in areas like Brokerage & offshore Fund Management prior to his IT stint. he has a PGDM degree from IIM Ahmedabad and he also has a CFA degree. he represents Cognizant in the India Regional Committee of the "Securities & Investment Institute" promoted by the London Stock Exchange. You have had an experience in almost all functions of management. Had you set any targets in your mind or did it just happen by chance? I spent for about 12 or 18 months in marketing and then I figured out that I was probably not suitable for that. My interest has always been on the finance side. In those days, you didn‘t have so many opportunities. My first love has been investment banking, stock market, equity research, fund management kind of thing. I spent about 7 years doing that between 89 and 96. Then I decided that I didn‘t want to manage other people‘s money. I also wanted some international exposure at that point of time. I moved into IT consulting. In my 13 years in IT consulting, for the most part – around 10 years, I focussed on banking and banking related consulting and so on. Once you spend so many years then you are required to run business units which are domain agnostic, where the entire consulting falls under you. You would have to look after banking, insurance, manufacturing, retail etc. whether you like it or not. I think that I have enjoyed my journey thoroughly. As long your expectations are reasonable, you‘ll probably reach them much ahead of your internal targets. Only thing is that we have this habit of becoming restless in the first one or two years. How is IT different from service industries like banking or consulting? How has IT enabled it and what difference do you find in empowering 15
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any organization with IT as against consulting? Banking is not a very people intensive business, whereas IT is all about people. Deutsche bank has this famous advertisement – ‗Ideas are capital, rest is just money‘. Banking doesn‘t have too many people; it (banking) is full of ideas. Whereas IT is highly people centric. That is one big difference. There is a second difference that one of my friends told me when I actually moved from Banking to IT – ‗Banks are now more like technology players. Whether it is ATM or online banking, it (banking) is highly technology centric now. The line between technology and IT is going to be very blurred. Front office is going to be the only place where there will be any bankers, rest of it is going to be taken over by technology‘ – which is what has happened now. The (business) models are very different. For IT, the raw material is people, not money. That‘s a big difference. I don‘t see any other business which is as people centric as IT and IT consulting. How has your experience been in dealing with clients in banking and in IT? There are some commonalities. Both are highly relationship driven. In corporate banking you have to build a relationship over time. It is the same in IT. But otherwise, once a relationship is done, banking is highly transaction centric whereas IT is more project / deal centric. You can view it (project/deal) as more complex or January, 2011
|FACE TO FACE |NATARAJAN| bigger transactions as opposed to numerous small transactions. I actually see a lot of similarities in Banking and IT when it comes to managing relationships. The only thing is that technology has become so core, whether it is times of boom or recession or steady times, technology spends and technology projects are not going to go away. So it is becoming more of a bellwether industry. It will not fluctuate that much. I was reading this article in MBA Universe. Your idea of going green was stated there. What kind of changes are you seeing in the industry in going green? Is the industry adapting to it and what is the way forward for this? Look at it in terms of the maturity cycle. It all started as a regulatory initiative. In many countries, companies were required to be green. So they became green. Then from regulation it became a good citizenship practice. Just like good corporate governance, becoming green became imperative for a lot of companies. That was the second stage. Third stage was when people figured out that it makes even a commercial sense to be green. Forget compliance, forget regulation and forget good corporate governance. There is an even bigger objective of exploiting it commercially. E.g. All energy efficiency stuff you do, you actually save power. Incremental cost of power is unbelievable. It is actually 10 to 13 Rs / unit. Regular electricity supply satisfies 70% of the demand. The other 30% comes from highly inefficient gensets and other sources which are not particularly environment friendly. The power is also expensive. Cutting down on energy consumption, not only complies with green regulations but also saves money. So I think this is a 3 stage evolutionary chain right from regulation driven to being a good corporate citizen to commercial objectives. There is no harm if you can blend good sense with business. Now it is being seen that a lot of companies are very serious about green IT. The kind of savings is no joke. We actually display it outside one of our canteens. Now project teams actually compete to be number one in terms of green compliance. What are the problems faced by the consulting L!VE
industry? There are 2 perspectives here which you need to carefully consider. Whenever there is a downturn, the first business to be hit is consulting because it is considered to be discretionary spending, you can postpone that. It‘s like I can see the movie later if I can‘t afford it this month kind of thing. Whenever there is recession, consulting companies take a fairly significant hit. Whereas for IT, a mild recession is a very good thing. If you have to cut down your spend by 10 percent you have to do it smart (in a smart way). You will have to do it with careful cost control. Onsite-offshore model, low cost vendors, productivity gains – all that is required. So a mild recession is a good thing for IT. A major recession will result in cancellation of projects. So there is a J curve. With mild recession IT starts doing very well. For e.g. this year US has still not recovered fully. They are (doing) ok; they are not in a very bad shape. IT companies are doing phenomenally well. They‘ll try to cut costs, push projects to India, look at vendors and all that stuff. Whereas in consulting if you are into management or strategy consulting you will get hit big time. In IT or operations consulting the impact is not much. Please remember unlike IT where you can sell a 5 year deal and forget it, in case of consulting, every 3 months you have to sell again and again as projects get over. So in case of IT and operations consulting, the impact is relatively minor. However in the last recession the impact is significantly different. There is this very unique trend. I have never seen this before. Several companies had to
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|FACE TO FACE |NATARAJAN| change their business models altogether. Let me give you two examples. All mortgage bankers could not be in subprime lending anymore. That business doesn‘t exist anymore. We have only prime lending now. Subprime lending is pretty much dead. So all those banks now had to figure out a new business to be in and they don‘t know what to do, they need help because all their life they have been doing only subprime lending. So their fundamental business model is changing. So they need transformation partners, not just in the IT or operations, even in the strategy part. So you need people to help you in figuring out new ideas, new business areas, how to hire people for that, how to get operations systems up and running and IT system up and running. Once you tie up with somebody like that next two years you have continuous set of consulting opportunities. The Second example: Think of digital formats. We had audio cassettes, CDs, VCDs, DVDs. Now people don‘t want to buy DVDs anymore. Now people want to download on demand. There are new formats now – blue- rays. People who want digital experience go to blue-ray. Most people buy on demand. So is DVD going to be a relevant format? Such companies need help in terms of relooking at their business model. They are used to manufacturing DVDs, content licences and stuff like that. So they need significant change. These are very different kind of opportunities. Usually when recession comes, there is a down period after which things start looking up. During the down period you cut cost, postpone project, then you start again. Now during this recession, people had to go to a different model altogether, not just cutting cost. That was very unique about this recession. My feeling is that some of the management and strategy consultants were probably impacted. You could actually look up their numbers. Whereas people in IT and operations were not that badly impacted. What do you think should be an approach of a budding consultant? Should he try to be a generalist or a specialist? In the long run, it‘s always better to have one industry spike (from a consultant‘s point of view). Given that consulting is all about variety, we all 17
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know that you may do different types of projects. However ultimately after 5 years or 10 years you should not say that ―I don‘t know any industry. I am so diversified that I don‘t know banking or insurance or retail‖. It‘s better to have spike in one – 3 years out of 5 years, 6 years out of 10 years is generally useful. Other specialization can be in service offerings. The industries may be different. You may be an IT strategy specialist or you may be a post merger specialist or a change management specialist. You have to have either an industry spike or a service offering spike. At senior level you can be a generalist but it is preferable to focus on 1 or 2 industry verticals in the initial stages of the career. I myself spent a lot of time in banking consulting before running business units. Your advice to MBA grads would be? My advice has always been the same. For last 10 years my job has been marrying technology and business. I think that I was the only one who was very positive in the MBA Universe conference when I said that we love our 2500 MBAs. Please note that significant section of the industry has become cynical about MBAs, not for knowledge reasons or skill reasons but for attitude reasons. One usual complaint is that they want to come on board and change the company on day one; or run a business on day one; the expectations are too much on day one. There is absolutely nothing wrong in having expectations but give it some time. Take 12-18 months to settle down understand systems, start contributing and then demand your role or whatever kind of project. That‘s one thing. Secondly, I think that there is this urge to diversify. I think diversification is not a bad thing. But picking up industry skills is also important. Spend some time. In the initial years it is better to focus on one or two business verticals and then diversify. Other than that MBAs have very good communication skills, very good in so called hard skills. They probably know everything that is there to know on finance or marketing or organizational behaviour. Skills are not a problem. It is more of the finish and attitude and soft skills where you need some help. And that comes only by practice. January, 2011
|FACE TO FACE |GURUMURTHY|
“The youth today must assume leadership roles, they must go ahead and do things. They must dare mighty things and most important is they must play to win but not play dirty.” - Swaminathan Gurumurthy Co-Convenor of the Swadeshi Jagaran Manch Swaminathan Gurumurthy is the co-convenor of the Swadeshi Jagaran Manch, a journalist and a Chartered
Accountant in India. He prefers to portray himself as an economist with a right anti dote for economic crisis caused due to Globalization. He is an acclaimed writer whose columns have found place in several dailies and periodicals. He is known for his radical views and opinions on different matters. He is a strong proponent of the traditional Indian economic wisdom that was a part of every home and village model and he is also associated with some of the biggest corporate deals in India.
What are the problems that India is facing at present and how can we tackle them?
work, people need to be motivated. You need to make your vocation your vacation”
“The people of India must be educated. To get success, being literate is not enough. There is a lack of research in our country which needs to be focused on. When students engage in research the horizons of the country broaden.
With the increased westernization do you think the youth is losing its attachment to India and its values? How can we inculcate these?
Talking about industries there is a lack of skilled workers for which we must focus on vocational training. Unemployment is not the main problem, skill is the real problem and for that heavy training is required. Great change is needed in the Corporate World as well. One has to change the relationship between promoters and guardians. , There is lack of motivation amongst people to L!VE
“You must stop relating economic growth to the west. The young generation today must know the facts right. They must do in-depth reading and know about their past.”
How can we ensure inclusive growth and sustainable development? “The youth today must assume leadership roles, they must go ahead and do things. They must dare mighty things and most important is they must play to win but not play dirty.
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|FACE TO FACE |GURUMURTHY| You should see the economic model that they follow at Tirupur which is a small village in Tamil Nadu which accounts for 90 % of India‟s cotton knitwear export. It is a self sustaining model.”
How can we promote responsible journalism in today‟s times? “You can‟t because journalism by nature is such that only exceptions become news. If a man bites a dog it is news. We begin to believe that news is general but we must understand that a crime is reported in India only because it is an exception. India is one of the lowest crime rated countries in the world according to UNDP
Human Development index, we have only 4 crimes per 100,000 of the population whereas it is 860 for America
but still we consider India to be a crime ridden country which is all because the Media shows us that. By nature of it we cannot change the media we can only change our attitude towards it.”
What is the most important thing that the young generation needs to learn today? “I want them to understand India in economic terms. It is the performing society that they would know only when they see prosperous people who don‟t speak in English. Intelligent students must become intellectuals.” 19
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January, 2011
|EXPERTS SPEAK |ARTI KALRO|
Comparative Advertising – A Recent yet Fast Growing Tactic in India - Prof. Arti D. Kalro, Phd, Faculty, SJMSOM, IIT Bombay The use of comparative advertising has been well established in the field of marketing communications. Most often, comparative advertising campaigns are employed to claim superiority for the advertised brand on one or more benefits, or to try and sway the target audience‟s attitude in the advertised brand‟s favor. Anecdotal evidence show that brands use comparative advertising campaigns either as a marketing communications tools or in retaliation to the competitor‟s claims. Over three and a half decades ago, the Federal Trade Commission (FTC) of the United States permitted advertisers in the United States to explicitly name competing brands in advertisements. Until then, though the use of comparative advertising was generally frowned upon, advertisers commonly used the “Brand X” approach to adhere to the unwritten rules of comparative advertising. The rationale given for permitting the use of comparative advertisements was that it encourages fair competition among advertisers and that the consumers will be better informed of the various choices available in the market place. Comparative advertising was initially confined to small-time players. However, with increasing competition, industry giants such as Pizza L!VE
Hut, Apple, Dell, AT&T, Cadbury and many others have jumped on the bandwagon of comparative advertising. Thus, it is seen that comparative advertising in the United States has had a long history, while in India it is a recent, yet fast growing communications strategy. Recently in India we have seen the case of Reckitt Benckiser‟s Harpic claiming that Harpic Plus is five times better than other toilet cleaners, the Rin and Tide war, Parle Milk Shakti comparing it self against Sunfeast Milky Magic and Britannia Milk Bikis and many more. The number of comparative advertising campaigns has increased rapidly. Of the 57,000 advertisements in the Millward Brown (2009) Link™ copy testing database, globally about four percent of the advertisements were classified as comparative in nature. The United States, India and Philippines have a high proportion of comparative advertisements (seven percent) followed by Taiwan, Australia and Brazil (four percent). According to the Economic Times Bureau (January, 2011), as many as 165 advertisements on television, print and hoardings were challenged by rival
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|EXPERTS SPEAK |ARTI KALRO| companies and consumers in 2010 (22 percent increase from the previous year). Further, anecdotal evidence shows that it is not only the increase in numbers, the format of comparative advertisements has also changed from implicit to more explicit and bold comparisons. Moreover, comparative advertising in India is not restricted to just utilitarian products; it has cut across product categories. In general, there has been a paradigm shift in the realm of comparative advertising in emerging markets like India. To understand this recent yet fast growing advertising tactic, Kalro, Sivakumaran and Marathe (2010) conducted a content analysis screening a print advertising archive in India (spanning a two-year period starting from May 2007). This article discusses some key and interesting findings of the analysis that will describe the state of the comparative advertising phenomenon in an emerging market in India. As a matter of fact, India is one of the fastest growing developing economies in the world and it has been the subject of relatively little research in terms of consumer purchase behavior. Given the pace of internationalization of multinational companies and the fast growing trend toward building global brands, the findings would also be useful to new and potential entrants in emerging markets like India.
when compared to other advertising formats (like humor-based or surrogate advertising) in India. Thus, advertisers particularly multinational brands, that are new to emerging markets like India, wondering whether to use comparative advertisements or not in emerging markets may do so with a degree of boldness, rather than doing so hesitatingly or reluctantly, since consumers are now comfortable with such type of advertisements. The analysis further revealed that nearly 68 percent of the comparative advertisements were direct in nature (wherein they made explicit reference to the competitors) and the remaining 32 percent were indirect comparisons (wherein brands make references and superiority claims over competitors without actually naming them). Although the Advertis-
The content analysis covered major English language publications (55 newspapers and magazines, including financial and specialty publications like in-flight magazines). A total of 3,200 ad campaigns were seen and checked whether the advertisement uses comparative claims. Out of these, 203 advertisements (6.34 percent) were found to be comparative in nature. This is a significant number
ing Standards Council of India (ASCI) permitted the use of explicit and direct comparisons in the late 1990s, advertisers initially preferred using indirect comparative advertisements. For years, the norm was to make references like „compared to Brand X‟ or „compared to the leading brand‟ or to use surrogate indicators like the packaging silhouette of competitors‟ products. This was probably because, until recently, India was considered as a high-context culture and, highcontext cultures like those in Asia or Latin America prefer indirect and ambiguous mes-
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|EXPERTS SPEAK |ARTI KALRO| sages and the use of silence vis-à-vis explicitly spoken cues. Thus, until the late 1990s the perception of India as a high-context culture possibly inhibited advertisers from using direct comparative advertisements. Hence, they made only subtle references to their competitor(s). Notable indirect comparative campaigns that struck a chord with the consumers, during this period were Polo vs. Mint-O (confectionery-mouth freshener), Mountain Dew vs. Sprite (aerated drinks), Captain Cook vs. Tata salt (common salt) and Parachute vs. VVD Gold (hair oil). None of these explicitly named their competitors but they made veiled indications to their „obvious‟ ones. For example, Heinz India‟s Complan compared its ingredients to the health drink Brand „H‟, though it was extremely obvious that Complan was referring to its main competitor, „Horlicks‟ from GlaxoSmithKline! But of late, the comparisons have become more explicit and direct; the other brand is openly named. Hence, a multinational brand using this type of comparison strategy in Western markets may do so in emerging markets as well, rather than using indirect comparisons, since consumers are already exposed to such advertisements. Furthermore, the content analysis brings to light the following trends and practices of comparative advertising in India. The results show that, advertisers use comparative advertisements for both utilitarian and hedonic products, rather than just utilitarian ones, as was prevalent in the past. Advertisers prefer to use „multi-brand‟ comparisons (comparing themselves to multiple players in that category) rather than comparing themselves to a single competitor (mostly the market leader/immediate competitor). L!VE
Given today‟s competitive environment with multiple strong brands in almost every category, brand managers no longer restrict their strategy to comparing themselves to a high share brand or the market leader. In fact, the content analysis suggests that 70 percent of the brands use strategic „multi-brand‟ comparisons to break-through the clutter of „metoo‟ competitors by differentiation and to arrest falling market shares in that given seg-
ment. Further, in emerging economies like India, there has been a fragmentation of many product markets. For instance, in the Indian car market, Maruti was the undisputed market leader with an 85 percent market share in 1995. Now Maruti‟s share has fallen to 40 percent and several strong competitors like the Tatas, Hyundai and Toyota have emerged. Likewise, in the life insurance sector, Life Insurance Corporation of India was a monopoly until the mid-1990s; now they need to contend with at least half a dozen strong players even though they are still the market leader. Thus, brand managers may find it useful to use „multi-brand‟ comparisons, where the advertised brand is compared with many competitors; their primary intention is to high-
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|EXPERTS SPEAK |ARTI KALRO| light their salient advantages over multiple competitors. Finally, regarding the marketing standing the results further establish the age-old practice of underdog brands preferring to use comparative advertisements more frequently than topdog brands. The analysis shows that out of the 203 comparative advertisements, 62 percent were used by underdog brands and 38 percent were used by topdog brands. Underdog brands may use comparison advertisements boldly in emerging markets such as India. This last point in particular has important implications for multinational brands. It is noted that there is an influx of multinational companies in India and also, consumers in developing countries such as India have increasing choices to select between local and foreign brands. Typically, multinational brands when they enter a new emerging market like India, may be technologically superior or simply “better products” than their Indian counterparts. However, they would still be underdog brands in India due to the fact that Indian ones are well entrenched and established with their firm positions. For instance, several Toyota brands like Hilux and Camry are hardly known in India. They may find the use of comparative advertisements particularly fruitful in the light of past research juxtaposed against our own findings that underdogs use comparative advertisements in India. In other words, a “good” underdog multinational brand wondering whether to use comparative advertisements in India may assertively do so, given that this phenomenon is quite prevalent in India. The tacit assumption behind these implications is that the majority view is the correct one. In 23
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other words, when a lot of advertisers use „multi-brand‟ comparisons because they are better than single brand comparisons, it is fair for others to do so. This assumption is a reasonable one given that companies invest so much in advertising and carefully weigh the pros and cons before going in for a particular type of advertisement. Academic research in the area of comparative advertising is divided into two schools of thought – one for and one against comparative advertising. In point of fact, comparative advertising has emerged as an important communications strategy and it is here to stay! To quote from a recent article from The Economist (2009) – “These are heated times: the number of comparative (or “attack”) advertisements is growing, as companies battle for scarce consumer dollars amid the recession.”
Advertisers, especially in emerging markets like India are left with little or no choice but to use comparative advertising in their baskets of marketing communications. Of course, what they have to keep in mind is that the situation has to be conducive to the use of such comparative advertisements. This implies using comparative advertisements for markets wherein the consumers use analytical mode of information processing, using source credibility enhancers along with the comparative claim, using positive (less derogatory) rather than negative (more derogatory) references to competition, and considering the fact that the competitor may retaliate in response to the brand‟s comparative campaign. January, 2011
|EXPERTS SPEAK |DEEPAK YOHANNAN|
Unit Linked Insurance Plans – The New Avatar! - Deepak Yohannan CEO, MyInsuranceClub.com 1st September, 2010 was by far the most significant date for the life insurance sector in India after the entry of the private players in the year 2000. A set of norms have been put in place which make them a far superior product from their earlier avatar – from a consumer point of view! It was soon after we saw the entry of the private players into the life insurance sector that we saw the aggressive sale of ULIPs (Unit Linked Insurance Plans)… and it has never looked backed since, till 1st September, 2010! The industry is also on a pause mode – having to go back the drawing board and re-work their plans – in some cases maybe the entire business plan itself. So why were ULIPs selling like hot cakes? ULIPs promised the best of both worlds – high returns and risk cover – something so tempting that not too many bothered to dig deeper. Some of the main reasons for the tremendous success of the products were as follows: 1. Huge payouts as commissions to the Agents The person selling the product could potentially pocket 60% of the first year‟s premium paid by the policyholder and many at times even more. So there was every incentive for the insurance agent to sell this product. No other financial product in the market offered such high commissions. There were justifications, that insurance is a product which is tough to sell and it needs a lot more understanding of the customer‟s requirement than any other financial products. Whatever the case, the very fact that if the incentive to sell if so attractive, there was bound to be mis-selling. And yes, it did happen, lots of it. 2. Bull run in the markets Because the markets were performing so well in the beginning of the last decade, even those who viewed “markets” as a risky avenue could get the benefit of high returns by investing in the “traditionally safe” insurance products. And of course, the proof of the pudding lies in eating it – there were scenarios where people actually made high returns by investing through ULIPs. L!VE
3. “Invest only for 3 years” was the USP Most agents sold these as 3 year products – wherein you could stop paying after 3 years and reap the benefit of the policy till the full term of the policy or simply withdraw their money. The fact was that the “lock-in period” was 3 years and if you do not pay after 3 years, the various charges would get deducted in the form of units from your ones purchased by your earlier premiums. And in case you surrender or withdraw, you would be penalised with some charges for doing so. 4. Comparison with traditional insurance products Till the advent of ULIPs, insurance products offered annual bonuses which ranged from 4% to 8%. “And
term insurance plans – they don‟t even return the money paid by you!” And here was an insurance plan
which could give you a 20% return and maybe even more. No one bothered to see the flip side and was never informed also by the same. Yes, there was a line put in the product brochure which mentioned “In this plan, the investment risk if borne by the policy-holder” but when weighed against the 20% profits which may have been sold to him, it was tough to say no. The products were selling so well and were so profitable that everyone wanted to start an insurance company in India. We even started seeing real estate companies setting up life insurance businesses and why not! What was the melting point? In some ways ULIPs transformed the way the insurance industry in India performed. Insurance was traditionally viewed as a product whereby a risk borne by an individual was transferred to a much bigger set of people and hence the individual risk was considerably reduced. With ULIPs, the investment risk was borne entirely by the policy-holder and provided only very minimal risk cover. Critics always questioned the very classification of the product as an insurance tool. And the bull run did not last forever… Markets went down and people started looking at their fund values which looked much less than what they had put in as insurance for some years. The knives were out and people started digging deeper and making a lot of noise about it.
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|EXPERTS SPEAK |DEEPAK YOHANNAN| Some of the main reasons for criticism were as follows: 1. Very high charges: The high payouts made to agents were through a set of charges which were being deducted from the policy-holder‟s premium every year. All these were being overlooked as long as the markets and hence their fund values were looking good. But structurally no financial product had such a pro-seller bias and it was bound to be questioned. There were a large number of charges like: Premium Allocation Charge Fund Management Charge Policy Administration Charge Surrender Charges Switching Charges Premium Re-direction Charges Partial Withdrawal Charges
Entry loads were abolished for mutual funds and they found it difficult to find agents to sell mutual funds when they had an extremely lucrative offer to pitch the almost the same product from an insurance company. Your fund have to give returns of 30% or more every year to start making some profits – and that was never going to be sustainable in even the medium term. 2. A lot of mis-selling: Majority of the criticism came from the fact that customers were not aware of the risks involved when the policy was sold to them. In spite of many steps taken to highlight the risks at a regulator level, when the incentive to sell was so high, the seller managed to convince the customer that this was a great product for high returns. 3. A lot of hue and cry from other industries: The mutual fund industry is one which suffered the most in the process. The investment components of ULIP offered by the insurance companies are similar to how a mu-tual fund operates. But while every step was being taken to make the mutual fund investor friendly the sale of ULIPs were being given a free hand. Entry loads were abolished for mutual funds and they found it difficult to find agents to sell mutual funds when they had an extremely lucrative offer to pitch the almost the same product
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Majority of the criticism came from the fact that customers were not aware of the risks involved when the policy was sold to them.
from an insurance company. 4. SEBI steps in: Some time earlier this year, SEBI intervened and directed that no new ULIPs were to be launched without their approval as it was an industry which was participating in the markets and hence fell under their jurisdiction also. There was a SEBI-IRDA conflict which ultimately got resolved with the intervention of the Government of India. The verdict was in favour of IRDA which was to be the sole regulator of the insurance sector in India. ULIPs the new Avatar! With such a lot of focus and noise being created on ULIPs, the regulator found it the right time to intervene and setup norms which today have shaken up the life insurance industry. The hefty margins are gone, internal costs structures need to be re-worked, the distribution channel may need to be re-looked, the break-evens look a little more distant and the IPO plans may have to be put on hold. But the pain will only be in the shorter term. Companies have already launched products which are complaint with the new norms and will be back doing serious amounts of business. In the end everyone agrees, the new ULIPs are much more investor friendly………..
Key Features
Impact
Lock-in period increased from 3 to 5 years
Will not be viewed as a quick-buck product
Minimum Sum Assured doubled
Aligns it more towards an insurance product
Pension plans to offer at least 4.5% guarantee
Pensioners will not be completely at the mercy of the markets
Charges capped from 5th years onwards
Will increase the net yield of the investments
Overall difference in gross and net yield is capped
Will increase the net yield of the investments
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January, 2011
|STUDENTS SPEAK |CURRENCY WAR|
Currency War: A Road to Great Depression -Ankit Bansal, SJMSOM, IIT Bombay
C
urrency War, a term coined by Brazil's finance minister Guido Mantega, is a highly used term nowadays which refers to the competitive measures taken by governments of various countries to depreciate their respective currencies. A weaker currency makes exports from a country cheaper that boosts its trade balance, creates new jobs especially in export sector and helps in recovery from the recession. At this time when the growth is constrained either due to fall in demand (esp. developed countries) or due to limited capacity of industries (esp. emerging markets), achieving export-driven growth by undervaluation of currency looks to be an attractive choice, But this in turn comes as a cost to a country with stronger currency where it
hurts income as well as the jobs in the export sector and the growth prospects for the economy. As a result, each country is trying to gain the upper hand via some sort of currency depreciation to pick up some extra demand at everyone else‟s expense. This policy very much resembles to the 'beggar thy neighbour' policy of 1930s.
cently announced to buy $12 billion in the foreignexchange market after which Chile‟s peso fell the most in two decades. Peru‟s central bank has also extended reserve requirements for banks‟ sales of foreign exchange, Central Bank of Columbia plans to buy $20 million a day till March15. Brazil has tripled the tax on capital inflows into fixed-income market from 2% to 6% in a bid to contain the Brazilian Real‟s appreciation. Other countries like US are also criticised by some countries for manipulating their currency in the name of quantitative easing. Above chart shows the exchange rate of some of these countries against dollar since Aug,08.
Countries involved in currency manipulation Various countries like China, Brazil, South Korea, Japan, Columbia, Chile, Peru etc. are being criticised for their actions to devalue their currency. The Chinese pegged their currency to the dollar in 2007, and stuck with the peg throughout the crisis. Japan had some time back tried to devalue its currency which in- Each country is trying to gain the upvited criticism per hand via some sort of currency from China as depreciation to pick up some extra well. Chile re- demand at everyone else‟s expense. L!VE
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|STUDENTS SPEAK |CURRENCY WAR| zens. It becomes even more meaningful for countries like India that are facing the problem of high inflation since long time.
It can be observed that except from Japanese Yen, all other currencies have weakened over last 2 years in spite of quantitative easing by US which puts downward pressure on its currency. Implications of currency War With one country after another depreciating its currency, no one gains any competitiveness relative to anyone else, but what happens is that it collectively reduces aggregate demand for foreign goods, which hurts the process of global recovery from the crisis of 2008-09 of which recovery is still underway. The economies with stronger currency that are losing out in this war may respond back by the way of trade sanctions against the nations with undervalued currency, but if and when this trend starts it will take us to the era of 1930s when no country succeeded in exporting its way out of the depression, since there was no one to sell additional exports to, 27
and this protectionism led to the collapse of the international trade which became a major contributor to the Great Depression. Is stronger currency really bad? While every country is in a rat race to devalue their currency, it is worthwhile to see if it really is bad to have a stronger currency. Contrary to the general belief, it is found that stronger currency has its own advantages and some economist even point out that it is stronger currency regime when the growth is real as compared to inflated illusory growth that comes with weaker currency. When the currency becomes stronger it provides an opportunity to invest abroad and reap the rewards once the currency devalues. With stronger currency the imports become cheaper that helps in taming the inflation and in the welfare of the citiL!VE
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On the other hand, weak currencies make import prices rise, they give rise to what is called as "imported inflation", which can lead to general economy-wide prices rising too fast, which can in turn require tighter monetary policy. Competition from imports helps in improving the operations of the local industry which in turn helps the country in long term. Road Ahead With pressure from west China has agreed to appreciate its currency but not much of change can be expected as it would otherwise badly hit its export industry which is the main driver of its growth. Discussion over currency war has been on the agenda of various meets between global leaders but no substantial agreement has been reached so far and with new interventions by countries like Chile, Brazil and South Korea the issue is becoming more and more brutal and disruptive. What remains to be seen is whether this war will lead to protectionism or not. I hope it doesnâ€&#x;t but if it does then global currency system is liable to break down and will take the global economy with it.
|STUDENTS SPEAK |BEYOND SIX SIGMA|
BEYOND SIX SIGMA Integrating Six Sigma with other Business Processes Swethadri B SJMSOM, IIT Bombay Six Sigma is the most widely used enterprise tool for achieving business excellence. It was developed by Bill Smith of Motorola, USA in 1986. Initially used as a methodology for process control, today it has evolved as a Business Management Strategy for Organisations. The principle of the Six Sigma is to reduce the variation in the process in order to achieve high quality and efficiency. A Six Sigma process would simply mean that process is efficient to a level that there will be only 3.4 DPMO (Defects Per million Opportunities). Motorola announced the huge savings by adopting Six Sigma in 1995, after which Allied Signal was the first to grab it. Six Sigma became a buzz word after it was openly embraced by General Electric with strong support from Jack Welch, the former CEO of the company. Since then Six Sigma has become a religion at GE. Enterprises have seen phenomenal success after adopting it in their processes. In India companies have intensified application of Six Sigma to drive down costs. Cummins India Limited’s future plans include continued cost reduction initiatives
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using Six Sigma in order to maintain their low cost leadership in the domestic markets and to be the preferred source for exports. Six Sigma – Successful tool in Delivering Business Excellence Six Sigma is a management methodology meant to drive process improvements through quantitative approach. Even though it uses tools which are common with TQM (Total Quality Management), the approach is totally different. While TQM focuses on quality improvement, Six Sigma focuses on increasing profits for the companies by driving costs down. Six Sigma has kept its edge while some other management approaches are in perishable stage because of the following reasons It is a quantitative tool where the success can be measured on project basis. It uses statistical tools and techniques to identify the variation in the process and to eliminate the root causes to increase the efficiency. It eliminates the non value added activities in the system and provides huge bene-
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|STUDENTS SPEAK |BEYOND SIX SIGMA| fits to the companies through bottom-line savings. It adopts a structured approach towards employee involvement by which every employee contributes to continuous improvement. It is a tool when practiced and driven by top management would continue to sustain itself. A Traditional Six Sigma is DMAIC approach which stands for Define, Measure, Analyze, Improve and Control. These five steps are the essence of the Six Sigma approach to problem solving. In case of a new product development DFSS (Design for Six Sigma) is deployed. DFSS adopts DMADV approach which stands for Define, Measure, Analyze, Design and Verify. The aim of DFSS is to develop a new product or service with Six Sigma quality from the start. DFSS not only focuses on the design but also on the process aspect of a new product. Initially the focus of Six Sigma was on manufacturing; today it is widely accepted in both service and transactional processes.
Innovation V/S Efficiency Innovation is the life blood of all organizations. Companies thrive from Innovation of the products and customer service. Six Sigma helps in cost control and driving more profits at the bottom lines. But it is accused of prohibiting the innovation in the organizations. Six Sigma is a methodical and organized approach whereas research runs in a disorganized way in order to bring innovative solutions. A classic example of this is in case of 3M where the Six Sigma was applied to research and development by its former CEO James McNerney, but failed to yield significant results in innovating new products. The main reason behind this is that Six Sigma emphasises on structured problem solving and eliminating errors. Creativity and innovation thrives on learning through mistakes. As per Tom Peters, the management guru, Companies must ‚Test fast, fail Fast, and adjust fast‛ in order to achieve growth in the business. Many of the companies use a number of Black Belts and Green Belts, six sigma pro-
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|STUDENTS SPEAK |BEYOND SIX SIGMA| jects and six sigma projects per person as metric for Six Sigma maturity assessments. But these metrics don’t represent the successful application of the tool in the organisations. Success of the Six Sigma can be measured only through the Bottom-line savings that projects have generated. Many a time this exercise creates frustration among departments in companies and leads to replication of six sigma projects, picking of easy solutions rather than finding unique innovative solution for the organisational problems. Integrating Six Sigma with other Business process - Six Sigma and TRIZ (Theory of Inventive Problem Solving) Six Sigma is a tool for challenging and changing the principle of operations to dramatically shift performance to meet high customer requirements. It is a powerful business strategy for achieving and sustaining operational and service excellence. But it has to evolve in the forthcoming years in order to sustain for a longer period. The Total package of the Six Sigma has to change in the evolutionary process to provide innovative solutions for the organizational issues. TRIZTheory of Inventive Problem Solving is a systematic Innovation methodology. It was developed by Russian Scientist Genrich Altshuller and a group of many other scientists over a period of 50 years from the late 1940’s, by studying more than 2.5 million patents. TRIZ is a problem solving method based on logic and data, not intuition, which accelerates the project team's ability to solve problems creatively. TRIZ provides effective solutions to meet the customer requirements by guided technology innovation. Integration of Six Sigma with TRIZ can provide the innovation which is lacking in Six Sigma as a problem solving tool. L!VE
Lean and Six Sigma Six Sigma mainly focuses on cost control in order to deliver bottom line savings. In order to win over the competition the company has to deliver better product at lower costs, faster to the customers. Lean provides the organisations with the speed required to meet the customer requirements faster. Lean focuses on reducing the non-value added activities and lead time in both manufacturing and service organisations. Lean tools help the processes to reduce the lead-time by adopting pull systems. It complements the Six Sigma tools very well in order to achieve process excellence. Quality improvement by Six Sigma helps in achieving the cost reduction and Lean tools leverage Kaizen to rapidly improve process and drive results with speed. In the present economic scenario every business enterprises are competing against each other fiercely to deliver greater customer experience in their products and services. In order to win customers, enterprises have to deliver the products faster to the customer at lower prices. Six Sigma alone will not be enough in achieving these customer requirements. In a rapidly changing world, technological Innovations to meet these requirements are difficult to achieve through the conventional innovation process. Six Sigma as a Total package has to evolve over forthcoming years to include solution for innovations and speed. The tenets and tools of TRIZ and Lean are very complimentary in a six sigma framework. On the other hand TRIZ and Lean don’t take a holistic approach towards organisational issues. Hence the integration of Six Sigma with Lean and TRIZ is imperative. Lean Six Sigma integrated with TRIZ and other tools would deliver higher value to the customers and the organization.
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|START UP STORY |IN OPEN|
INOPEN Open Technologies.
- Another Offspring from
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nOpen is an IIT Bombay based technological start-up in Educational sector. InOpen designs and develop world class educational content and solutions for academia. InOpen offers products and services to private schools, chain or group of schools, municipal schools, State Board schools and Government schools. The research team comprises of Academic Team of Professors, Psychologist, and Experts in various fields coming from World-Class Universities. InOpen is one the few companies which work full time in sync with Open Source (FOSS-free and open source software) technologies. Open Source gives an instantaneous advantage of affordability and effective community support to our products. InOpen technologies envision itself as an effective Computer learning system by creating quality education standards the Open Source Way. ―We aim to be a global innovative Education Enterprise. The simplicity of our solutions to the complex and underlying problems of academia is our strength. Our tag line is ...adding simplicity to sense‖ Says Rupesh, founding Director and CEO of In31
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Rupesh did his research in IIT IIT Bombay Bombay under his guide Prof. Sridhar Iyer (who Co-founded InOpen and currently Director) of Computer Science Department. He developed a Linux based Operating System called IntuxOS which he further polished during his college days. During those days Rupesh with few of his friends created training programme to teach higher level Computer Science to college students. They managed to train 6000 students across 11 Engineering Colleges clocking revenue of INR 10 Million. During this phase Rupesh spoke to Prof. Sridhar for possible synergies in School Domain. Apparently Prof. Sridhar was working on development for school for the past 3 years. The product was called Computer Masti. The conversation clicked and
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Rupesh came to Mumbai in summer of 2009. The initial plan was to pitch product in schools by deploying Teachers, System Administrators, and setting up a Comp lab. The strategy was proving difficult to scale up. We started working afresh on Business Plan. Professor Sridhar and Rupesh approached SINE (Society for Innovation and Entrepreneurship, Entrepreneurship lab at IIT Bombay) for incubation. SINE helped the founders in their strategy and refinement of their plans. A company was formed with the name of InOpen Technologies on Sep 2010 and incubated in SINE by Dec in the same year. Today they have around 35 people working for InOpen and an influential and diversified Client base. InOpen comprises of a young and dynamic team with experience and successful track record in the area of education domain. The company has a strong advisory board comprising of Industry leaders, Professors from leading institutes and seasoned professionals from relevant fields. The executive team is passionate for technical Education and Entrepreneurship. InOpen anticipates steady growth and planning to spread its operations across the country in coming years. During the initial stages of their career, founders of InOpen were involved in Open source based vocational trainings. In this period they trained around 6000 students across 11 engineering colleges. Training of Indian Air force was also undertaken on behalf of Red HAT. One of their upcoming products TuxMATE is a venture into vocational trainings space dealing with diploma and short term courses in Open Source related subjects like Linux, Shell Scripting and Kernel Programming. L!VE
InOpen has been deeply embedded in the open -source community from the start. ―We always look for ways to continue our support of software, systems and the developers that create them. We believe in openness and longevity of solutions which we teach in schools.‖ says Shah. Their Product Computer Masti is built around Open Source and FOSS based applications.
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|START UP STORY |IN OPEN| Schools and colleges face difficulty in a long run using proprietary software and applications as issues like piracy, maintenance and Total Cost of Ownership keeps on coming up. Therefore Open Source was the perfect solution. The flagship product Computer Masti is a computer science curriculum developed by IIT Bombay and InOpen Technologies. It is an up-to-
date national curriculum for Computer Education in Schools. Also it is a pedagogical based learning curriculum with focus on developing analytical abilities in a child. Computer Masti is designed as a series of text books, after a deep understanding of the curriculum suitable for the primary and secondary school students in the Indian sub-continent as well as for schools abroad. The fun part of it is the whole syllabus is in the form of story woven around three characters –Tejas ,Jyoti and Moz. Now as far as strengths of company go, it has been the quality of content which is also their innovation. The USP is also the service provided to the schools. Their Teacher Training programme, handholding programme and assessment provides tight integration to the content. 33
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Apart from being incubated in IIT Bombay (perceived as an IIT Bombay Company) the product are a direct collaboration between IIT Bombay and InOpen Technologies which adds up-to credibility. With respect to competition in current education market, ―Yes we do have big competitors and it‘s just that we aren‘t focusing on fighting competition at this stage, we are just planning to grow and carve out a niche for us by differentiating our offerings―, says Rupesh. Regarding future plans Rupesh says ―Companies usually offer tools but we focus on the content. We focus on Teacher training programs and the content part which is a different product. Our Classroom master was a big success and by July 2011 we would launch Classroom Master 2.0.‖ It is the struggle and enormous self belief that helped Rupesh see his vision transforming into reality. Rupesh says ―The technology is very pervasive so we need to focus on Education more. The need of high quality content which develops analytical ability is very critical. I want to create an Indian Pearson where strong content and effective methods of Teaching are developed and practiced.‖ The Company now harbours a vision to InOpen to be considered as a World Class Content Generation and Teacher Training Company by 2013-14.They intent to supply the highest quality of content and Training in all major subjects for schools by 2015. On the revenue front they have managed to reach a revenue of 1 crore (10 million INR). The Company has targets of revenue of 24 Crores by 2013-14. January, 2011
|BIZ WITS |QUETZAL|
(Contributed by Sandeep G. Nair , SJMSOM, IIT Bombay) 1. Identify the airlines from the unique design of its fleets. (Hint: It was in some controversy during the recent FIFA worldcup)
2. Which well known personality is all set to launch his apparel brand Spinners in India? 3. X, the worldâ€&#x;s first and oldest multi-national brand, which is embedded in the hearts and minds of people across the globe, is being brought back to life as a contemporary luxury brand. Originally established in 1600, through the Royal Charter granted by Queen Elizabeth I, X is one of the most recognised brands in the world today; over two billion people know of its history. The company is being revived by UK based Indian entrepreneur Sanjiv Mehta. Idnetify X. 4. Cupcake, Donut, Eclair, Gingerbread, Honeycomb, Ice-cream sandwich. What does these have to do with technology? 5. Which bank has launched BANK ON BIKE to tap rural markets ? 6. What does this logo signify?
7. Who is starting a sports education company called TENVIC? L!VE
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|BIZ WITS |QUETZAL| 8. What is this the logo of?
9. In the early 1970s, X visited a shop Y in Berkeley, California run by Peggy Short and Jane Saunders. This inspired her to open her own shop back in the UK. In 1987, X purchased the naming rights from the original Y. Its stock was floated on London's Unlisted Securities Market in April 1984, opening at 95p. After its full listing on the London Stock Exchange, the stock was given the nickname "The shares that defy gravity," as its price increased by more than 500%.The company created a doll in the likeness of Barbie but with a lifelike voluptuous figure and luxuriant red hair, that came with the tag line, "There are 3 billion women who don't look like supermodels and only 8 who do" Her name was Ruby, a real-life size 16 plastic doll that Mattel thought looked too much like Barbie. Identify X and Y 10. Why was a 38 year old businessman , Rajesh Jethpuria in the news recently? 11. Whose tagline is “Know more No less.� 12. Which Indian company was founded by Sachin Bansal and Binny Bansal? 13. The origins of the split between A and B are hard to pinpoint, but an Allied bomb attack on Herzogenaurach in 1943 illustrated the growing tension. A and his wife climbed into a bomb shelter that B and his family were already in."The dirty bastards are back again," A said, apparently referring to the Allied warplanes. B was convinced that his brother meant him and his family. The damage was never repaired.In 1948, the brothers split their business. A called his company X; B called his Ruda before changing to Y. Identify A, B , X,Y.? 14. What are these kinds of molecules known as?
15. What is so special about a forthcoming movie named Gold Struck? 35
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Answers are on page 43
|CREATIVE BEND|PARITOSH CHAUBE|
She Sells, Sea Shells... on the Sea Shore! - Paritosh Chaube, SJMSoM, IIT Bombay Friday evening it was... and the summer world was settling down, the hustle n bustle of the weekdays was about to give way to a promising weekend... conveyed by the obscure teenyweeny twilight amidst excited sea-gulls and the roaring waves as if screaming – “Thank God! It’s Friday!” The usually bright Sun had gone dull... n Helios was fast driving its chariot back to its den somewhere into solitude! The sands were nice n warm n inviting :) ! You could see the Homo sapiens crowding the beach... you could feel the song in their hearts... you could sense
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the spring in their steps! Little kids n their sand castles were telling tales of glory... the Frisbees flying all over were suggesting their ‘bindaas’ mood... n the gentle sea breeze from our geography text books was defying all laws of confinement... and the free spirit in me was on its way! :) All the worries were postponed for the next couple of days and I was gleefully loosening my limbs n breathing in the fresh air... which was light n sweet n cool... n I could feel it right from my nostrils down to the bronchioles! I had an unpacked biscuit packet peeping out from my bag n it wasn’t surprising to have a few stray pups hovering around! Well, the pack had each of their names written on it and it was rightfully offered to them as they feasted upon it like crazy! I kept moving ahead, in search of some space... far from the maddening crowd n trust me it was hard to find! Flocks of humans were here there n everywhere... like a herd of uncurbed cattle, the only difference being that there was no grass to feed upon!
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|CREATIVE BEND|PARITOSH CHAUBE| lecting it for eternity! They’re real good ones Sir!” Precisely – “SHE was Selling SEA SHELLS by the SEA SHORE!” I could’nt help but chuckle at my fate... when the world was busy buying grocery for the weekend, planning midnight booze, watching Mr. Bean on Pogo, FACEBOOKING ;)... in some cases feverishly jotting down a B-PLAN :)... here I was in some dreamland being lured by some dream-walker into buying some sea shells!
I was hardly watching my steps when suddenly I lost my balance, courtesy that coconut shell lazyin ‘roun in the sands. By the time I regained balance, I found a little angel pick up my bag which had fallen down (quite obviously !!)... lean n thin that girl was and while she handed over my bag, I noticed the fragile arms with sand all over...n she had those perfect mermaidlike eyes n deep sea-green pupils... those brown streaks of hair were flocking her face time n again as she was trying her best to unwind them off her cherubic visage! “Thank You Little One”, and she was quick to respond – “You want some rare sea-shells?” “I and my maa n paa n granmaa n granpaa n bros n their sisters have been col-
“Lemme have a look at them girl!” ... and she unraveled those astonishingly colorful acts of God’s artistry! It was a fistful of blue n green n red shells with black n white n purple freckles! I’d never seen something like that before! I took out a 100 rupee note n “The Mahatma” appeared to be mocking ma act with that sheepish smile! Nevertheless, the moment I offered them to the little angel, she immediately emptied her fist into mine and rushed towards the direction from where the “Wise Men” are believed to have come from... slowly n steadily, that figure diminished in the silhouette of nature’s expressions! I am not sure if they were worth the value that was forgone... I am not sure who that archangel was... or was that some messenger from the heavens, there to teach me take few decisions right from my heart with no constraints... no external influences... I aint sure of any of these! I could’nt but marvel at my possession – those shells, which are now MINE... for I’ve exchanged them for a green strip of paper! Well, I could certainly feel... as John Keats rightly pointed out – “A thing of beauty is a joy forever”! No tongue twister there :)! Nevertheless, that beautiful memory n those beautiful shells remain.... Cheers!
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Beauty becoming Bane - Deepesh Dhakad, SJMSOM, IIT Bombay
“Don‟t hate me because I‟m beautiful.” – The Though that evening ended, the remark age old adage and trite platitude actually does stayed with me since. Over the period of 6 resonate some truth. months, I discussed this with a few other very good looking women. Though not everyone The world conveniently believes that beauti- felt as strongly as the lady in restaurant, but at ful women always have it easy. Their beauty a certain level they all believed that it is not as is considered to be the universal key to their easy for them as the world believes it to be. happiness and success. They are not only the Below are a few issues faced by beautiful cynosure of most of the eyes but are also in- women, that I could figure out during discusundated with proposals of all sorts. sion with few men and women. To anyone from outside this looks amazing and is enough to make them feel jealous. But I was surprised to know that these women who possess the lethal weapon of beauty are themselves not so happy about it. It all started while I was interning with General Electric during summer of 2010. While at a restaurant one evening, I met this incredibly gorgeous lady. As conversation flowed, the topic of „beauty‟ came up which she ended with a remark “I sometimes wish I wasn‟t so good looking”. L!VE
a.) Conveying the seriousness of her personality and ability People have a hard time understanding that beauty with brains can co-exist. Beautiful woman finds it extremely hard to make the world realize that she has got more than a beautiful exterior. If a beautiful woman succeeds, people are often skeptical about whether or not she “deserved” the success. It is always assumed to be „because of her looks‟ and her „extra-efforts‟ that she put in „somewhere else‟, except work.
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b.) Meeting and dating men (Yes, believe it or not, it‟s true) Many men automatically assume she is unavailable or find her too intimidating to approach. Quite a few also stereotype her as either spoiled, superficial, or out of their league, even if she isn‟t. Because of this, a lot of gorgeous women could wind up with men who are more superficial, and fall for them because of their beauty. It is more difficult for them to find someone who likes them for their personality and other qualities. Hence finding a genuine man is probably the biggest problem for a beautiful woman.
c.) Getting admiration from other women Now this is something that was a total surprise for me. In my experience, I have seen that many beautiful women find great company with other women. But my discussions with a few reveal that such „friendship‟ is superficial. Many beautiful women are the source of envy for other insecure women. Either out of jealousy, insecurity, fear, intimidation or spite, many beautiful women find it difficult to maintain intimate friendships with genuine female friends.
Again, I don‟t deny that this may be because they are themselves a bit bloated about their Now I don‟t deny that beautiful women are looks but that‟s not how most of the gorgeous very choosy/picky about men in first place women feel. and that adds to their own problems but if you take a serious look, they get more sexual d.) Social Stigma and dogmatic beliefs Given that a woman is gorgeous, it is difficult for her to find equally handsome man. Now, if she is dating a not so attractive man, she faces a constant social criticism from her friends, family and peers. It gets worse if the man has money. Her serious interest in man‟s personality and certain characteristic goes for a toss while she is labeled as a „gold-digger‟. After talking to a few men and women about the subject, I am confident that everyone worships a beautiful woman – women want to be her and men want her, both of them for her looks and probably not for who she is. Now I realize why the lady in the restaurant felt the way she did. That remark now makes harassment than genuine interest from men, more sense than it did that time and being because genuinely interested men are norbeautiful suddenly feels a shade gloomier. mally too intimidated by their beauty to approach them. 39
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|BOOK ESSENCE |SIMPLY FLY|
Simply Fly-A Deccan Odyssey - Review by Aditya Kaul, SJMSoM, IIT Bombay This book gives you an insight into the life and times of Capt. G.R. Gopinath who lays out his life in the pages of the book in his own words. It is a story of a hard-working, innovative, honest and unrelenting entrepreneur who did not believe in the words ‚giving up‛. It talks about identifying business opportunities, planning, organizing and putting plans into action. There are various moments where Capt. Gopi got stuck in the bureaucratic labyrinth of the country but he knew well the art of knocking the right door at the right time and getting the job done. This book shows that entrepreneurship is all about seizing the opportunity, putting men and material in place and capturing the opportunity with speed to make it happen. In his own words ‚You must dream your
own dreams and have the courage to follow the dreams‛.
Capt. Gopi was born poor in a small village called ‘Gorur’ on the coast of the river Hemavathy in Karnataka. His father was a school teacher and a farmer by profession. Capt.Gopi was taught at home till standard fifth by his father. Along with regular subjects he was introduced to writings of great Indian and Western leaders and poets alike. The book is replete with philosophical quotes and poems from all these leaders and is a great repository for quotes on motivation, leadership and innovation. After studying at the local village school he cleared the higher level exam and moved to the Sainik School at Bijapur. Further he went to NDA and finally passed out as an officer in the Indian army from IMA. He fought as a soldier in the 1971 Bangladesh Liberation war. He describes the actual war scene with death and destruction taking place all around him. He also shares the experiences of patrolling on the remote borders in harsh conditions. He left the army after an 8 year stint as he felt he needed to do something else in life. This marked the beginning of a new chapter in his life where he acquired a farm nearby his village and started farming. He devised innovative methods in his farm and realized the importance of organic farming. He entails the various successful and unsuccessful attempts at L!VE
Our former Prime Minister Lal Bahadur Shastri gave the slogan ‘Jai Jawan Jai Kisaan’, which conveyed that the farmer and the soldier are the two main pillars of our country. Here is a story of a man who was both a farmer and a soldier and still found out time to be one of the most innovative entrepreneurs of our country, one who revolutionized the Indian Aviation industry. innovation which he used at his farm. When his farm started to take shape he took to sericulture and practiced bio-farming. He goes in to great details in explaining the ecological balance in bio-farming. He went on to win the ROLEX award for Excellence in Sericulture. After this he also set up a motorcycle showroom and a hotel called ‚Udipi‛ which also ran successfully. Finally he sold the two and started an agricultural consultancy where he shared with farmers his best practices and equipments for a minimal fee.
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|BOOK ESSENCE |SIMPLY FLY| thought of creating a low-cost airline which flew to the Tier 2 and Tier 3 cities of India. He had a vision to make the ‘Common Man’ of the country fly. He got a negative response from his colleagues that with the bureaucracy and corruption in India such kind of an initiative is not possible, but where everyone saw adversity he saw an opportunity. He came up with an idea of a no frills airline. It all started with a press
Once in Bangalore he met his old friends from the army who were both Helicopter pilots. These retired army men were not happy with the jobs they were doing. It was then that Capt. Gopi recalled the story of a Vietnamese girl who used a helicopter to fly the relief teams to various parts of Vietnam as the roads and other means of transport had been destroyed during war. It was at that moment that the idea of a helicopter charter company conceptualized in his mind. He took his friends into confidence and started working on the nitty-gritty details and built a basic business plan for his project.
There are some stories in the book which are really touching. One of them is about a 19 year old girl who wanted to gift her father a helicopter ride on his 60th birthday or a brother who was not very well to do but wanted to gift her sister a ride in a helicopter. In such situations Capt. Gopi used to offer the services at minimal prices which showed the humane side of this release about their intent to launch entrepreneur. a low cost airline with airfare price just above AC 1st class railways After the chartered helicopter ser- ticket. This time surprisingly the vices he also started chartered air- politicians gave a whole-hearted plane services. This made him think support and ‚Air Deccan‛ was of starting an airline company. He born.
After that started a two year long pursuit of getting all licenses and permits required and he did that without paying any bribe. He believes that an entrepreneur is often tempted to pay bribes in order to get his job done, but if one is right he would surely find some officer down the line who really wants to do his job honestly. Then began the hunt for manufacturers and funding. Even after all the efforts it was a hair raising finish with the final flying permission coming just half an hour before the inauguration. 41
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|BOOK ESSENCE |SIMPLY FLY| Airbus planes with only 1 crore in his bank account. Later due to the entry of other lowcost airlines, predatory pricing and other factors Deccan landed into a downward spiral from which it was impossible to recover without fresh injection of equity. Vijay Mallya bought the company. There is a very interesting story where an eager Mallya called up Capt. Gopi at 4 am in the morning to finalize the terms of the merger deal as he did not want He created an intricate low cost model which has become the backbone of civil aviation today. He did away with the agent system for booking tickets and started the internet booking system. He used other measures to
‚If you can make one heap of all your savings And Risk it in one turn of pitch and toss And lose, and start at your beginnings And never breathe a word about your loss‛ -Rudyard Kipling
cut cost like single class, no refreshments or newspapers etc. Capt. Gopi describes in the book how an entrepreneur needs to continually innovate. He gave out catering contracts to companies like Café Coffee day and offered refreshments at a cost which became a source of revenue to the company. He made the airhost-
Capt. Gopi to sell the stake to Reliance. It was really sad to see an entrepreneur who had conceptualized and built an enterprise from scratch to lose it in such a manner. Capt. Gopi quoted a few lines a poem by Rudyard Kipling in the book which capture the man’s optimism. He sees an opportunity in the cargo and logistics sector and is sure to come back again with Deccan 360. This book is a must read for all budding entrepreneurs and not only people starting a business but for all those who dream big in life. It is also a book which gives you real motivation to chase your dreams, achieve what you feel is impossible or farfetched and moreover being optimistic in the worst situations. Hats off to this entrepreneur who is one of a kind.
esses to be the salesperson and sell these refreshments on board and offered them attractive allowance on every sale. This model is now being replicated in most of the low cost carriers today but Capt. Gopi was the first one to conceive the idea. He later set out for a blistering expansion pace ordering 12000 crore worth of L!VE
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|BIZ WITS |QUETZAL|
1. Kulula airlines in South Africa. 2. Shane Warne 3. The East India Company 4. All codenames of different android versions 5. SBI 6. Unesco World Heritage Sites 7. Anil Kumble. The name comes from his „ten wicket‟ haul against Pakistan 8. Fairtrade Certification mark. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal. 9. X- Anita Roddick Y- The Body Shop 10. First individual owner of an ATM machine in India 11. Business Standard 12. Flipkart.com 13. A-Adi Dassler X- Adidas B- Rudolf Dassler Y- Puma 14. Nanoputians – These are molecules whose structure resembles humans 15. This movie will be jointly produced by India and China.
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|SOM-THING SPECIAL |TSL|
Technology Strategy Lab - Conflagrating the Innovation in Business Minds
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nnovation occurs everywhere. So, what new innovation can a bschool do? How to strategise the specialisation of a bschool? Will it brand and bind the business school as a specialist and not a wholesome management education provider? Grappling with these thoughts and yet with a passion to create a difference, SJMSOM has a laborartory now. Does this mean, it becomes a place where technical specialists play around with boring technology and science? Well, no but it does have a lot to do with the interesting opportunities that technology and science throws up. SJMSOM becomes the first business school to have a lab specifically to study, analyse and design technology strategies for organisations.
provide an experiential learning to its students. The lab is an approach to align the management learning with knowledge and technology as the core competency. So, how is TSL different from others present? For starters, it is a lab and provides an environment for a loosely coupled passionate set of people to analyse the technology directions, its related impact on business and design effective strategies to leverage them. Comprising of school faculty and doctoral students from the area of technology management and select students from its masters programme, the lab provides a platform to engage the theories of technology management – evolving from mapping the innovation process,
As known from its inception and continuing its unwavering support to create a pool of managers who understand technology and its related innovations, SJMSOM's vision to create a critical set of business managers in the area of technology and innovation management has got a fillip through the creation of the technology strategy lab [TSL]. Technology and knowledge are the next paradigm shift that drives growth. With a vision to provide a platform to identify, create and implement strategies that enables technologies to reach its potential and the users, the school has setup TSL. TSL is a vibrant mix of faculty, Ph.D. students and Master of Management students. Started in August 2010, the lab currently has support and guidance from the management of technology [MOT] faculty research group. TSL is a unique one of its kind lab in India, to L!VE
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|SOM-THING SPECIAL |TSL|
evaluating technology strategy‟s impact on the competitiveness, forecasting the diffusion of the technologies, valuation of technologies [royalty derivation] and its marketing. Mixing academic rigour and industrial requirements, the lab ably balances between creating the right strategies, models towards effective design of technology strategies. The lab has a multidisciplinary focus across the areas of management of technology like technology roadmapping, technology forecasting and scenarios, innovation management, intellectual property
rights management, technology financing, high tech marketing, multi criteria modeling of technological uncertainity. Projects, Lab experiments and theoretical studies form the three important activities of TSL. These are designed with the mission to actively collaborate in linking industries and firms to encourage active participation of future business leaders in promoting technology and aid innovators towards technology commercialisation. The course curriculum of the school has MOT as core learning for the masters‟ students. Starting from this stage, TSL integrates by identifying suitable lab experiments to appreciate the MOT theories learnt and also create a platform for creation of new techniques, frameworks and models. The experiments help students understand techniques such as modelling; forecasting, S-curve mapping, clustering, technology SWOT, etc. better and apply them in the projects. Currently the lab is working on three vital industries that reflect India emerging markets and capability - telecommunications, clean tech and water. Telecommunication projects include analysing 4G licensing royalties on Indian cellular manufacturers, patent pooling strategies. Clean tech projects study the competitiveness of the Indian solar industry players while the water segment analyses how frugal innovations occurs and its business learning for firms to tackle critical life saving and life giving opportunities through technological innovations. True to its vision, TSL is designed with the understanding, “Everyone Innovates”. The lab looks forward to the support and blessings of the school's alumni and the industry stakeholders towards the evolution of this lab into an unique differentiating platform for its inquisitive students to learn and apply another insight / perspective into business domain hitherto taken as a given.
If life comes a full circle, technology becomes its centre! The TSL team [ tsl.info@som.iitb.ac.in ] 45
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|SOM-THING SPECIAL |AVENUES’10|
AVENUES 2010, the annual Business festival presented by SJMSOM, IIT Bombay and Hindustan Times, on 23rd-24th Oct was an exciting and fun filled extravaganza. This year, the theme of the festival was ―Change, Evolve and Sustain‖, a theme that is very relevant in today‘s fast-changing world threatened by environmental pressures and inequity. The event was graced by luminaries including Mr. Adi Godrej, who gave the key note address at the inauguration, Mr. Kamal Hassan, Mr. Subrata Roy, Mr. S Gurumurthy, Mr. Satish Jha and many others. The event also saw participation from students of more than 150 B-Schools across India as well as from leading corporate houses and working professionals. This year, Avenues included many events with innovative concepts including Nirvikriti- an event to develop a marketing plan for sustainable tourism in Maharashtra. With MTDC taking a hand in the event- from active involvement in design as well as judging, this event was a large scale, real-life marketing exercise for all participants. With over 100 registrations L!VE
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|SOM-THING SPECIAL |AVENUES’10| 250 team registrations from companies such as TCS, IBM etc, and institutes such as IIMs, SP Jain etc. The event opened to a packed auditorium, which greeted the arrival of the teams and the quiz-master enthusiastically and entered whole-heartedly into the spirit of the event, with tremendous participation. This year, another crowd puller was Ashwamedh- the championship event- opens only to a few top colleges. It concentrated on Private Equity firms- which have always been viewed by the public as mysterious. The event gave particifrom 70 colleges, and a final shortlist of 5, this was one of the most popular events. Another popular event was Navonmesh- a business plan competition for real, up-and-coming innovations provided by the Technopreneur Promotion Programme (TePP). . This event had over 200 registrations for both phases and a final short list of 9 teams. The B-plan presentapants a chance to understand how these organizations work, and where crucial problems and opportunities for innovation exist, by inviting the participants to act as PE investors to create strategies and make decisions in a changing economic environment.
tions were on diverse innovations and were followed by analysis of these plans from a venture capitalists point of view. The competition concluded with a negotiation round, wherein the teams presenting B-plans attempted to gain funding from the Venture Capitalist teams. The judging panel, which included Mr. Kumar- VP, SIDBI, was very appreciative of the event, as it increased awareness of entrepreneurship among business students, including the challenge of getting funds and management expertise from VCs and angel investors.
A huge dose of entertainment at this event was provided by Mr. Kapil Sharma, a stand-up comedian and winner of ―The Great Indian Laughter Challenge‖. The auditorium was overflowing, and the audience enjoyed every moment of the routine. All in all, Avenues 2010 was a great success. As said by a participant- “It was a lot of fun
and combined entertainment with learning, in a very competitive environment.”
Pragyaan, the business quiz, was also a huge
success, drawing a large crowd from corporate houses as well as from B-Schools- with over 47
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|SOM-THING SPECIAL |DIGNITARIES|
DIGNITARIES ON CAMPUS Mr Montek Singh Ahluwalia, Deputy Chairman of Planning Commission, Government of India, graced the occasion of the launch of ―Nomura Lecture Series‖ at IIT Bombay on Friday, December 24, 2010 with his presence and delivered a speech on the theme ―Challenges before the Indian Economy‖. ―Nomura Lecture Series‖ is an initiative taken by IIT Bombay along with Nomura, Japanese Financial Services firm, in which speakers from various domains will be invited to address the students at IIT Bombay. Mr Montek Alhuwalia talked about the emergence of India on the world stage and the factors that led to the success of India in the last decade and how it can achieve 10% GDP growth in next decade. He further drew conclusions on the possibility of the favorability of these factors in next decade. Mr Ahluwalia mentioned that along with the above mentioned internal factors affecting the growth there are external factors too that can affect us, these are the changes in the outer world. With global economy under depression and recovery very bleak in major industrialized nations India can see a hit on its exports to these nations. Mr Alhuwalia believes that achieving 10% GDP growth in next decade is something that is achievable when we consider L!VE
the factors that helped us achieve growth in last decade. But along with old challenges there are some new challenges too that need to be addressed. Honourable Minister of Human Resource Development, Shri Kapil Sibal unveiled the inaugural plaque and also delivered a lecture on ―Role of Technology, Knowledge & Innovation in Transforming India ―at IIT Bombay's brand new Victor Menezes Convention Centre (VMCC). "I prefer the tranquility of the IIT campus over the noise at the Parliament," said Sibal, upon his arrival. Sibal spoke about education and how it was one of the biggest challenges facing India. "Higher education is the need of the hour. At present, only about 12.4% students in the country study further after school. In developed countries, the percentage is as high as 40 to 70%. This is the area on which we need to focus," said Kapil Sibal, and added that he plans to bring this percentage to 30 per cent by the year 2020. He also said that the government plans to support more research and higher education institutes in the future. He emphasized on the fact that there is a mammoth task ahead of him to educate our burgeoning population and how technological innovations can help us achieve this goal.
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|SJMSOM ACHIEVEMENTS|
SOM ACHIEVEMENTS
Congrats Guys…... 49
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|SJMSOM ACHIEVEMENTS|
SOM ACHIEVEMENTS
Congrats Guys…... L!VE
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Shailesh J. Mehta School of Management, Indian Institute of Technology, Bombay Presents
HR Continuum 2011 12th March 2011
Consulting Continuum 2011 13th March 2011
Theme for HR Continuum: “gaining Competitive advantage through effeCtive human resourCe management” Theme for Consulting Continuum: “Changing times, evolving minds” L!VE
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