Thursday, March 28, 2013

“Sometimes, we Wonder why We are in The Airline Business at all!”

Operating costs have always been The Biggest Hurdle to Profit-Making for Domestic Airlines. It was no Different with Jet Airways. Sudheer Raghavan, CCO, Jet Airways, talks about how Jet Worked to return to Profitability since FY2007-08, and on The Most Recent Taxation Policy Recommendations by The Government.

Life in the domestic airline business has been characterised by pain. Since the start of FY2006-07, airlines in India have been caught in a dust-storm of ever rising fuel and operational costs, unfriendly taxation policies, crippled infrastructure, negative earnings, high debt and pricing issues. Although matters have improved over time, during the past five financial years, airlines in the country have burnt money to the tune of $4-4.5 billion. Even the once very profitable and India’s largest private carrier Jet Airways scampered around for the past three years with its tail on fire. No more. Good news is – compared to any time during the past five years, Jet’s P&L account looks healthier today, with net profits for the first nine months of FY2010-11 – amounting to Rs.13.42 billion (having recorded Rs.20.36 billion in negative bottomlines since FY2007-08). Even its balance sheet will appear prettier starting FY2010-11 – with the company set to reduce Rs.10 billion of debt each year, starting 2011, which will reduce its debt load from the peak of Rs.130 billion that it has accumulated so far. And much of this turnaround story has been scripted since Singapore-born Sudheer Raghavan stepped on-board Jet Airways in September 2007, as its EVP – Commercial. Today, Raghavan, leads Jet’s commercial activities as its CCO and handles everything from commercial strategy-making to cargo handling, e-commerce, marketing & customer services. Who better than him to quiz on the cost-cutting strategies that Jet undertook to become a leaner, more logical flying machine, and the policy headaches that still stare at the airline.

B&E: IATA agrees that multiple taxes and others levies have already been killing the profitability of airlines in India for a long time now. And at present, thanks to Union Budget 2011-12, we have the newly proposed hike in Service Tax. Will the airlines pass it all on to the passengers?
Sudheer Raghavan (SG): The hike in Service Tax will directly impact the profitability of the airlines. So, in this regard, we are left with little option but to allow the price of the ticket to reflect the impact. All the burden will have to be borne by the consumers, as the airlines – whose balance sheets are already over-stretched – are completely helpless. Even the stocks of listed airlines dipped after the budget increased the Service Tax on air travel by 2% from the present 10%. The industry needs relief, and not additional taxes.

B&E: So, do such multiple taxes put your airline in serious financial dire straits?
SG: Yes. Not just Jet Airways’ but the entire sector’s future is questioned. We already have so many taxes; and by imposing more of them, the policy makers are shackling us. We are in the industry that is affected by everything – weather, volcano and many more natural calamities. And to add to those, now, our policy makers are increasing and adding new taxes. Sometime, we wonder why we are in the airline business at all! With costs and taxes rising, prices will rise, and demand will fall – how are we to become a healthy sector then? And all that while on one hand, after some tough years, we are trying to get more efficient and recover costs. Why labour the airlines with this massive tax? The policymakers have to understand our situation.


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

For More IIPM Info, Visit below mentioned IIPM articles


 
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Monday, March 25, 2013

“Europe was not Worth The Hard Work we Put In!”

Natalya Kaspersky, Chairman & Co-Founder of Kaspersky Labs and Infowatch, The Leading Anti-Virus and Data loss Protection Software group in the European and Chinese market Expresses her concerns over the Global it Security market, and The Past and Present of her Group Companies, to B&E’s.

B&E: Of late, much is being discussed about the market for technologies that will help control corporate information flow and protect IPRs. Do you have a positive feeling about this growth?
Natalya Kaspersky (NK): Yes, absolutely. The current market trend tells us that data protection is increasingly becoming the prime concern for any firm, due to the rapidly growing amount of data. Problem is, this growth is happening in an unstructured manner. So, you end up losing valuable information. WikiLeaks is an example. The solution to this problem is to curb leakage of intellectual property. And to achieve the same, the first thing to be done is to put in a lot of effort to first recognise what exactly you want protected.

B&E: You are also the CEO of InfoWatch, a company whose goal is to deal with information leakage and where you hold a controlling stake. In October 2010, the company launched a new software called “Infowatch Traffic Monitor Autolinguist”. What is so new about the product?
NK: Actually, Autolinguist is not a very new product, but it effectively helps to categorise and protect vital information.

B&E: Your company has also been active in the Middle East markets of late. How has the response been so far?
NK: Middle East has reacted positively. We started targeting the Middle East markets effectively, only last autumn, and therefore it is too early to speak of results. Also, we need to understand here that the business of data leakage prevention is rather a cyclical one, because people first want to try the offering. This usually takes 3-4 months. Then comes the issue of payments. Companies take some time to finalise contracts because usually, the deal sizes are well in excess of $100,000, a sum which many are not comfortable parting with. So, they end up deciding to buy only the limited editions. But having said that, the fact that we do have ongoing projects in the Middle-East, is already a great beginning.

B&E: You are the #1 anti-virus brand in Europe. To understand that you achieved it in just three years, speaks volumes about how smooth your growth in that region has been. Has your growth across all product categories been this easy in Europe?
NK: Actually, I would not give a thumbs up to our journey in Europe being an easy one. Bringing about changes in mindsets in Europe is not an easy task. In Europe, there are different regulations in different countries. So, our basic assumption that all nations in EU would react similarly to our plans and offerings was wrong. There, local laws dominate decision-making and this differs from country to country.


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

For More IIPM Info, Visit below mentioned IIPM articles


 
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Monday, March 18, 2013

B&E Presents India’s Fastest Growing Companies 2010

For many years people carped that Dhirubhai Ambani was less of an entrepreneur and more of a manager who ‘managed’ the environment to make RIL a success story. But the fact is that RIL grew and grew faster to virtually leave behind all venerable old business houses in the country in a jiffy and at the same time won the hearts of many, who invested their hard earned pennies in the company. And that is the truth.

Call it ‘irrational exuberance’ or simply greed, every investor at the market place, at all times, stays on a hunt to pin himself up to a new bee that promises to deliver some real quick honey. And that’s where the league of the fast and the furious prove there hegemony. They may not be necessarily big, but with their uncanny ability to fly as the phoenix, they become the darlings of the investors. So, if Benjamin Franklin believed, “Without continual growth and progress, such words as improvement, achievement, and success have no meaning”, for an ordinary market man, continual growth without the ability to outperform others does not deserve an action called ‘investment’. And this finally made us look for the bunch that drove investors crazy this year on basis of their fast track growth.

After considerable brainstorming and some number crunching (alright, we admit it: after a lot of number crunching and soul searching!), the editorial team at Business & Economy decided to seal this issue with a KISS! Before you get us wrong, our kiss harks back to that old cliché that says, Keep It Simple, Stupid! In this age of information overload and overdose, people often tend to forget that simplicity and brevity can never be matched by jargon and mumbo jumbo when it comes to explaining things. And the final pristine fact is that truly, there can be no other factor more important than the topline growth of a firm... across industries, across geographies. But then, growth can be deceiving as well owing to the base effect. So, while keeping our research confined to BSE 500 companies, and considering the growth in revenue between FY2009 and FY2010, B&E presents India’s 100 Fastest Growing Companies both in terms of relative growth (year-on-year) and absolute growth (additional revenue generated).


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

For More IIPM Info, Visit below mentioned IIPM articles

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Tuesday, March 12, 2013

CANON INDIA: RETAIL LAUNCH

Two years ago, We Criticised Canon for Belligerently Focusing on R&D Investments and Innovation when the Market didn’t seem to have a taste for it. Two years thence, We realise that Canon India’s CEO Kensaku Konishi somehow has managed to pull it off, Despite all Criticism. How? This one’s just to Answer That Question!

And the standard army plan seems to be working with Canon being on the receiving end of much optimism in some categories. In laser printers, their market share has jumped from 3-4% in 2006 to 35-36% (laser printing as well as laser multi-function category) by end 2009. In the camera space, the company recorded a market share of 16% in the point-and-shoot category and 32% in the digital SLR category in the April-June quarter this year in terms of unit shipments (IDC). In the digital SLR category, Canon is in a virtual duopoly with Nikon, which had a market share of 52% for the quarter. The copier segment is another space where Canon has been making stellar gains, with market share increasing to 25% from 23% last year. However, there have been reversals as well for Konishi. In the digital camera space Canon has in fact fallen behind both Sony and Nikon, for it was the leader in the digital camera category in September 2007 with 24% market share according to IDC. Similarly, Canon has also been unable to make much headway in the inkjet printing space (market share at around 13.4% for quarter ending June), and would like to make more major gains in that area.
These aren’t the moot issues at the moment for Konishi, though. It’s a market at the early stages of growth, and market positions may get exchanged several times till there is a relative equilibrium at maturity. What matters is the position that Konishi can build for Canon in this period, in the physical space as well as in the consumer’s mind. Growth rates are strong in both its key camera and printer divisions – the former led by rising aspirations and disposable incomes of Indian families and the latter getting a boost from the rapid rise in PC penetration in India. In the quarter ending June 2010, point and shoot and digital SLR sales have grown by 17% and 69% respectively y-o-y. 


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

For More IIPM Info, Visit below mentioned IIPM articles
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Monday, March 11, 2013

INTO MY DRAWING ROOM... AND NO MORE?

The appearance of mobile phones into our lives has started to blur the lines between what is private and what is public at an alarming rate

Just for an example look at what youngsters are doing on Facebook. I am assuming that most people who are on Facebook are attitudinally young. It has become a complete ecosystem where the youngsters do far more than just status updates. From events to places visited to playing games to endless chatting, youngsters keep finding newer ways of interacting and connecting.

If that was all, then it should not have been an issue. The real issue is the amount of private moments, desires and emotions that are posted on online spaces for the whole world to see. There is no dearth of moments people are posting: honeymoon pictures (always private), private parties (not open to all), and even family reunions (is everyone on one’s friends list interested?)

So how is this blurring of public private space going to affect the world of branding? And why should the world of branding be even interested? Well there is are two issues credibility and authenticity that we will have to battle.

Social media has always been seen as a more influential medium than conventional communication channels. Opinions and conversations posted on Social Networking sites are more trusted and valued. I am not sure in coming days this will remain as sacrosanct as it is portrayed today. Will you trust the comments from a group of ‘friends’ who in your opinion have been more open than others?

The second issue is of authenticity. Brands always want to build authenticity in their DNA. Part of building authenticity involves keeping things private, hidden, secret. Will this new all baring, all sharing audience respect this attitude from brands? Will the brands be eventually forced to abolish the line between private and public that they have held sacred become a liability? As always, maybe the emerging reality will lie somewhere in between!


For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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