JIMS Management Magazine Volume IV, April 2008

ELDORADOSea of Knowledge

A magazine by the students of PGDM, JIMS, Rohini.

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ELDORADO April 2008

The last few decades have witnessed unprecedented changes in the businessenvironment across the globe and these have catapulted the shape and need for

management. Economic integration of the entire world through the removal of tradebarriers, increase in capital mobility, breakthrough in information andcommunications technology has significantly contributed to the process ofglobalization. After some mid term hiccups, the Indian economy has picked upmomentum again and we salute this.Consumers are willing to try ‘the new’ and the sellers too are ready to experimentand adopt different strategies in various markets. Ready to eat, packaged Indianfood is fast taking off the shelves; Indians are colouring their hair – red, blue andgreen; the middle class is cooking in microwave ovens. Movies are now sold inmultiplexes; unmanned machines are vending chocolates, pro-biotic ice creams areattracting the health conscious. Sure, both the demand and supply side of the markethas undergone an interesting transformation.We are delighted to present before you this issue of Eldorado –an endeavour togather and disseminate new ideas and views which are generated in the young mindsof future managers, using Eldorado as a platform. And this issue in your hands bearstestimony to that. Eldorado is the outcome of intense scrutiny and curious search forthe best thoughts.This magazine is a humble effort to sketch some of the important aspects ofmanagement. In this issue of ‘ELDORADO’ we have tried to provide informationon plethora of topics in an organised manner in the areas of finance, marketing,human resource and technology. The magazine is presented into various sectionseach covering a special facet of management. The first section aptly named, Personacovers a range of issues related to human relation, personality, work life balance.Marketing section comprises of articles related to rural marketing, product life cycle,mergers related issue. Lot of knowledge can be gathered on participatory notes,sub-prime effect, investment strategy, etc in the Finance category. The Retail sectioncovers the attractiveness of the sector and the lucrative career options. We havetried to enrich this edition of Eldorado by incorporating articles by our learned facultymembers.We would like to extend our sincere thanks to our faculty editor, Ms. Pratima Daipuriawho shone light at every dark step we encountered and drove us clear with herselfless dedication.We would also like to thank management of JIMS, esteemed faculty and staffmembers for their constant motivation and support.The length and weight of this work was eased by the whole hearted support of ourbatch mates. We are grateful to them.Response and feedback on the magazine will give us the courage to plan for the nextissue. Hope the reading entertains and enlightens all.Board of Editors

From The Editors

EDITORIALTEAM

PatronProf R. P. Maheshwari

AdvisorsDr Gauri ShankarDr Madan Mohan

Faculty EditorMs Pratima Daipuria

Student EditorsCryste JainRashmi SharmaNeha GabaEtti ChhabraRoohi

Table Of ContentsSection Page No.

Persona9 things you simply must do .................................................................................................................................................... 4Test your emotional intelligence ............................................................................................................................................. 6Interview tips ........................................................................................................................................................................... 9The five minds of a Manager ................................................................................................................................................ 12Tormentor to Mentor- the changing Role .............................................................................................................................. 14Work life Balance .................................................................................................................................................................. 16

Marketing.Brand Obituary- why should companies put brand on the backburner ? .............................................................................. 17Supply Chain Operation ........................................................................................................................................................ 18The Merger Story ................................................................................................................................................................... 20Private Labels ........................................................................................................................................................................ 22Sketching a sustainable rural market manifesto .................................................................................................................... 24

StrategyChallenges In Creating A Brand Equity For Products With Short Plc .................................................................................. 25

FinanceParticipatory Notes ................................................................................................................................................................ 27Grey Area of rising rupee- unemployment ............................................................................................................................ 30The world’s greatest Investor ................................................................................................................................................ 32The sub-prime effect .............................................................................................................................................................. 34

RetailIndian Retail Industry ............................................................................................................................................................ 36Retail Your Career ................................................................................................................................................................. 38

Guru CornerStrategies for launching of Innovative products .................................................................................................................... 39Calling ‘Eco-preneurs’ .......................................................................................................................................................... 44Bhagavad Gita and Management .......................................................................................................................................... 45Assertive Behaviour- learning to say ‘No’ ............................................................................................................................ 47Short Attention Span ............................................................................................................................................................. 48Medical Tourism .................................................................................................................................................................... 50

SundryThe Mammoth Airbus A380 .................................................................................................................................................. 56India 2008-the tasks ahead .................................................................................................................................................... 58World is sitting in the volcano of global warming ................................................................................................................ 61Flight of Indian Women ......................................................................................................................................................... 62Total Quality Management .................................................................................................................................................... 64

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ELDORADO April 2008

What is it about successful people,who, although completely

different in background and style, arealmost identical in their approach towork and life?

In his book, 9 Things You Simply MustDo to Succeed in Love and Life, Dr.Henry Cloud passes along hisobservations of nine principlescommonly practiced by the successfulpeople. The book is full of leadershipapplications and some of Dr Cloud’sinsights could be summarized in theform of following nine principles:

Principle 1: Dig It Up

Each person has a treasure trove ofability inside of them. Everyone hasdreams and desires lodged within theirsoul. Why do some people dig deep andtake hold of their dreams while otherslet them drift away?

According to Dr. Cloud, successfulpeople give sustained attention to whatstirs within them. They find outlets fortheir passions. Exercising theirstrengths is non-negotiable.

Principle 2: Pull the Tooth

Many people have an irrational fear ofthe dentist’s office. The idea of someone

poking and prodding in their mouth fillsthem with dread. Amazingly, somepeople are afraid to the point where theywould rather suffer discomfort day afterday rather than undergo the temporarypain of a visit to the dentist.

As Dr. Cloud has observed, successfulpeople go to the dentist. They face theirfears and make the appointment. Theypull the tooth that is causing the naggingache and, by enduring the pain, theycome out better on the other side.Successful people refuse to carry theirbaggage through life. They confronttheir hurt, disappointment, and angerearly, and they seek emotional freedomfrom life’s injuries. Likewise,successful people quickly recover whenthey fail. Rather than succumbing to adownward spiral of disappointment (oreven depression) they come to termswith the failure, make courseadjustments to their lives, and move on.

Principle 3: Play the Movie

Dr. Cloud recommends the exercise ofplaying a movie of your life in whichyou are the hero or heroine. What traitsdoes your character have? Whathappens during the plot of the movie?Who do you want starring alongsideyou? How does your movie inspire the

9 Things YouSimply Must Do

people in the theater? Most people livetheir life and then look at it. Do theopposite. Look at your life and then liveit. Envision and step toward the futureyou want to experience. Don’t wake upone day to realize that your life is like aB-grade movie—you don’t want toleave in the middle, but you wouldnever want to watch it again!

Principle 4: Do Something

Successful people do something. Theyinitiate, create, and generate. Successfulleaders are proactive as opposed toreactive. They do not see themselves asvictims of circumstances, but as activeparticipants who take steps to influenceoutcomes. Their days and their lives arecontrolled by internal motivationsrather than external currents.

Successful people take ownership fortheir destinations in life. They don’tassign blame; they welcomeresponsibility. They refuse to cede theirfreedom to others and liveindependently. The successful personhas done leadership’s toughest task—mastered the art of self-leadership. Thebenefit of leading yourself well is thatyou don’t have to rely on others toprovide direction for your life. You getto plan the course.

CRYSTE JANPGDM FT 2007-2009

Persona

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5

Principle 5: Act like an Ant

“Go to the ant, you sluggard;Consider its ways and be wise!It has no commander,No overseer or ruler,Yet it stores its provisions in summerAnd gathers its food at the harvest.”

Let’s look upon ants to develop anotherprinciple of success. Three lessons standout from the metaphor of the ant. First,they appreciate the ethic of hard work.Their lives are a flurry of constantactivity as they tirelessly search forfood. Second, ants refuse to give up.They never abandon the hunt, crawlingthrough cracks and crevices in theirpursuit of a morsel. Third, antsunderstand the value of compounding.Grain by grain an ant builds the hill thatbecomes its home, and crumb by crumbthey accumulate storehouses of food.

Principle 6: Hate Well

In his writing, Dr. Cloud talks aboutfocusing feelings of angerconstructively to solve problems or endinjustice. As he develops his idea of“hating well,” he distinguishes betweensubjective hate and objective hate.Subjective hate is toxic. It is a pool offeelings and attitudes that resides in oursoul, waiting for expression. It is notdirected at anything specific or caused

on any given day by any specific object.Subjective hate poisons and corrupts theperson who houses it.

On the contrary, objective hate can bedescribed as anger with a purpose.Objective hate protects by standing inopposition to dishonesty, exploitation,or deceit. Objective hate may sparkentrepreneurship. In fact, manysuccessful businesses have begun as aresult of the founder’s hatred of poorservice or shoddy quality.

Principle 7: Don’t Play Fair

Fairness says “an eye for an eye,” or “atooth for a tooth.” Fairness weighs allactions in a balance and continuouslymoves to equilibrium. The rule offairness means good actions deservekind responses, and bad behaviordeserves punishment. Living inaccordance with fairness will destroyevery relationship in life. With everyonekeeping score of favors bestowed andreceived, eventually someone will feelvictimized when a good deed goesunreturned. As a leader, I’ve learned thehigh road is the only road to travel on.Don’t treat others according to whatthey deserve; treat them even better thanyou would prefer to be treated. By doingso, you’ll keep integrity and avoidsticky accusations or petty arguments.

Principle 8: Be Humble

“Pride is concerned with who is right.Humility is concerned with what isright.” -Ezra Taft Benson

Successful people have a healthy doseof humility. Humility has an internaland external component. Internally,humility comes when we admit ourerrors, and open ourselves toinstruction. Externally, humility isgained when we show patience for thefaults of others, and when we are quickto shine the spotlight on the successesof others.

Principle 9: Upset the RightPeople

A person’s success will always beinhibited if he or she tries to please allof the people all of the time. Do not tryto avoid upsetting people; just makesure that you are upsetting the rightones. If the kind, loving, responsible,and honest people are upset with you,then you had better look at the choicesyou are making. But if the controlling,hot and cold, irresponsible ormanipulative people are upset with you,then take courage! Be likeable and begracious, but don’t sacrifice youridentity or values for the sake ofharmony.

“A person’s success will always be inhibited if heor she tries to please all of the people all of thetime. Do not try to avoid upsetting all the people;just make sure that you are upsetting the rightones.”

9 Things You Simply Must Do

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ELDORADO April 2008

The purpose of this exercise is tohelp you understand how

emotional intelligence (E.I.) comes intoplay in organizational settings and togive you a tool to assess your E.I.competence. The more truthfully youanswer, the more accurate the pictureyou will get of your E.I.

These questions have been adapted forCIOs’ work situations from twosources: an online survey by the HayGroup, and an article, “DevelopingEmotional Intelligence in theWorkplace,” by Wendy Alfus Rothman

1. You’re in a meeting in whichexecutives are discussing thecompany’s ERP implementationwhen the VP of supply chain takescredit for work you did. What doyou do?

A. Confront the VP right then andthere. After all, you’re nopushover, and it’s not fair thathe get the credit you deserve.

B. After the meeting, take the VPaside and tell him that youwould appreciate it if in thefuture he would credit youwhen speaking about the work.

C. You don’t do anything. Youhate conflict, and you knownothing would be gained eitherby making a scene or byconfronting the VP.

D. After the VP speaks, thank him

for the work he did and givethe group more specific detailsabout what you were trying toaccomplish and the challengesyou overcame.

2. The VP of marketing has just calledto complain about the CRM systemyour IT staff is delivering. He isangry and rude. What’s yourresponse?

A. Tell him to take a long walkYou don’t have to put up withill-informed nonsense.

B. Listen, repeat back to himwhat you hear he is feeling,and tell him you sympathize.

C. Explain how he’s being unfair.Help him understand that thesystem your department isworking so hard on eventuallywill help him and hisdepartment.

D. Tell him you understand howfrustrated his is, and offer aspecific measure you can taketo please him.

3. Your company is working toencourage respect for racial andethnic diversity. What do you dowhen you overhear someonemaking anti-racial comments aboutPraveen?

A. Ignore it. You can’t stand himeither.

B. Call the person into your office

Test Your EmotionalIntelligence

and explain that his behavioris inappropriate and is groundsfor disciplinary action ifrepeated.

C. Confront the person on thespot, saying that suchcomments are disrespectful,inappropriate and won’t betolerated in the company.

D. Suggest to the person makingthe comments that he take adiversity training program

4. A colleague enters your officeupset over an incendiary e-mail hereceived from a client. How do yougo about calming him down?

A. Change the subject. Tell him ajoke or a story, anything to gethis mind off of it.

B. Suggest that he might beoverreacting.

C. Take him out for a cup ofcoffee and tell him about thetime something like thishappened to you and howangry you felt, until yourealized that the client’s angerwas in fact justified.

D. Tell him you understand. Youknow that the client is a realjerk.

5. A discussion with a colleague hasescalated into a full-blownargument, and you both starttrading personal insults that you

Persona

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7

certainly don’t mean. What do youdo?

A. Suggest taking a 20 minutebreak before continuing.

B. Walk away.

C. Apologize, and ask that yourcolleague apologize too.

D. Pause, collect your thoughts,and then restate your case asunemotionally as you can.

6 You are asked to manage a team ofdevelopers that is building a newportal. The team has discovered asoftware bug but can’t come upwith a solution. What do you do?

A. Draw up an agenda, and call ameeting during which youdiscuss the problem andpossible solutions.

B. Organize an offsite to help theteam get to know each otherbetter.

C. Begin by asking each personfor ideas about how to solvethe problem.

D. Organize an informalbrainstorming session overlunch. Encourage people toshare whatever solution comesto mind, no matter how wild.

7. One of your sales executive hasbeen promoted to a managerialposition. You notice that sheappears unable to make the

simplest decisions without seekingyour advice. What do you do?

A. Have an HR representativetalk with her about where shesees her future in theorganization. Maybe thisposition isn’t right for her.

B. Accept the fact that she doesnot have what it takes and findothers to assume herresponsibilities until you canfind a replacement.

C. Give her lots of difficult,complex decisions to make sothat she will become moreconfident in her role.

D. Engineer an ongoing series ofmanageable experiences forher, and make yourselfavailable to act as her mentor.

8. One of your direct reportsapproaches you with a personalproblem: His elderly parent needscare and possibly placement in anursing home. What do you do?

A. Tell him that you’re sorry andthat he can come to you foradvice or to commiserateanytime.

B. Acknowledge that familyproblems often take a toll, andask him to be open with you ifhe’s having troublecompleting his work so thatyou can find a way to lighten

his load during this difficulttime.

C. Suggest that work affords anexcellent opportunity for himto take a mental break from hisproblems.

D. Tell him that the definition ofa professional is someone whodoesn’t allow his personalproblems to affect his work.

SCORING THE QUIZ

0-24: Emotional Dunce

Congratulations, you’re about asemotionally intelligent as a milk cartonand as approachable as a person nextdoor. You confront people in the wrongway about the wrong things at thewrong times (for example, publiclyaccusing someone of taking credit foryour ideas) and fail to confront themon the appropriate things (like racistjokes). Your haste to kiss off colleaguesand their concerns alienates you fromothers and jeopardizes yourprofessional relationships. Unless youget some coaching, it won’t be longbefore your emotional density derailsyour career.

25-54: Lukewarm

You get points for recognizing your owndifficulty in dealing with people’spersonal issues, but as a manager and

“ People in good moods are better at the inductivereasoning and creative problem solving” – fromEmotion, Disclosure and Health 1995

Test Your Emotional Intelligence

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ELDORADO April 2008

executive it’s part of your job toconfront life’s little messes. You don’thave to be agony aunt, but you shouldknow how to tactfully handle conflictswith customers and colleagues. Andwhile you may have the best intentionswith the young manager who constantlyseeks your advice, you’re not rising tothe challenge by passing the buck toHR.

55-75: The Perfect Boss

Your colleagues and direct reportssurely find you approachable and

responsive. Just be careful you don’t gooverboard. Being emotionallyintelligent doesn’t mean you have to beOprah, doling out advice andcommiserating over every drama orcrisis. It means recognizing howpeople’s emotions affect them,understanding why they feel a certainway and harnessing those emotions forthe benefit of the organization.

Answer Key1 A. 0 points B. 5 points C. 0 points

D. 10 points

2 A. 0 points B. 5 points C. 0 pointsD. 10 points

3 A. 0 points B. 5 points C. 5 pointsD. 5 points

4 A. 5 points B. 0 points C. 10 pointsD. 0 points

5 A. 10 points B. 0 points C. 0 pointsD. 0 points

6 A. 1 point B. 10 points C. 5 pointsD. 5 points

7 A. 5 points B. 0 points C. 0 pointsD. 10 points

8 A. 1 point B. 10 points C. 0 pointsD. 0 points

Excellence is insideA gentleman was once visiting a temple under construction. In the temple premises, he saw a sculptor making an idol ofGod. Suddenly he saw, just a few meters away, another identical idol was lying. Surprised he asked the sculptor “Do youneed two statutes of the same idol?”

“No” said the sculptor. “We need only one, but the first one got damaged at the last stage”.

The gentleman examined the sculptor. No apparent damage was visible. Where is the damage?” asked the gentleman.

“There is a scratch on the nose of the idol.” replied the sculptor.

“Where are you going to keep the idol?” asked the gentleman.

The sculptor replied that it will be installed on a pillar 20 feet high.

The gentleman asked “When the idol will be 20 feet away from the eyes of the beholder, who is going to know that thereis a scratch on the nose?”

The sculptor looked at the gentleman, smiled and said, “The God knows it and I know it “.

The desire to excel should be exclusive of the fact whether someone appreciates it or not. Excellence is a drive from Insidenot Outside.

Persona

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9

Interview Tips

1. Tell me about yourself.The most often asked question ininterviews. You need to have ashort statement prepared in yourmind. Be careful that it does notsound rehearsed. Limit it to work-related items unless instructedotherwise. Talk about things youhave done and jobs you have heldthat relate to the position you areinterviewing for. Start with the itemfarthest back and work up to thepresent.

2. What experience do you have inthis field? Or How can youcontribute in this field?Speak about specifics that relate tothe position you are applying for.If you do not have specificexperience, get as close as you can.Talk of your knowledge in thatparticular area.

3. Do you consider yourselfsuccessful?You should always answer yes andbriefly explain why. A goodexplanation is that you have setgoals, and you have met some andare on track to achieve the others.

4. What do co-workers/peers/colleagues say about you?Be prepared with a quote or twofrom colleagues. Either a specificstatement or a paraphrase willwork. Jill Clark, a co-worker atSmith Company, always said I wasthe hardest worker she had everknown. It is as powerful as Jillhaving said it at the interviewherself.

5. What do you know about thisorganization?This question is one reason to dosome research on the organizationbefore the interview. Find outwhere they have been and wherethey are going. What are the currentissues and who are the majorplayers?

6. What have you done to improveyour knowledge in the last year?Try to include improvementactivities that relate to the job. Awide variety of activities can bementioned as positive self-improvement. Have some goodones handy to mention.

7. Are you applying for other jobs?Be honest but do not spend a lot oftime in this area. Keep the focuson this job and what you can do forthis organization. Anything else isa distraction.

8. Why do you want to work for thisorganization?This may take some thought andcertainly, should be based on theresearch you have done on theorganization. Sincerity isextremely important here and willeasily be sensed. Relate it to yourlong-term career goals.

9. Do you know anyone who worksfor us?Be aware of the policy on relativesworking for the organization. Thiscan affect your answer even thoughthey asked about friends notrelatives. Be careful to mention a

friend only if they are well thoughtof.

10. Are you a team player?You are, of course, a team player.Be sure to have examples ready.Specifics that show you oftenperform for the good of the teamrather than for yourself are goodevidence of your team attitude. Donot brag; just say it in a matter-of-fact tone? This is a key point.

11. How long would you expect towork for us if hired?Specifics here are not good.Something like this should work:I’d like it to be a long time. Or Aslong as we both feel I’m doing agood job.

12. What is your philosophy towardswork?The interviewer is not looking fora long or flowery dissertation here.Do you have strong feelings thatthe job gets done? Yes. That’s thetype of answer that works best here,short and positive, showing abenefit to the organization.

13. Explain how you would be an assetto this organizationYou should be anxious for thisquestion. It gives you a chance tohighlight your best points as theyrelate to the position beingdiscussed. Give a little advancethought to this relationship.

14. Why should we hire you?Point out how your assets meetwhat the organization needs. Donot mention any other candidates

Interview Tips

SEEMAPGDM FT 2006-2008

10

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ELDORADO April 2008

to make a comparison. Give thisquestion a serious pre-thought.

15. Tell me about a suggestion youhave made OR any initiative takenby you.Have a good one ready. Be sure anduse a suggestion that was acceptedand was then consideredsuccessful. One related to the typeof work applied for is a real plus.

16. What irritates you aboutcolleagues/peers?This is a trap question. Think realhard but fail to come up withanything that irritates you. A shortstatement that you seem to getalong with folks is great.

17. What is your greatest strength?Numerous answers are good, juststay positive. A few goodexamples: Your ability to prioritize,Your problem-solving skills, Yourability to work under pressure,Your ability to focus on projects,Your professional expertise, Yourleadership skills, Your positiveattitude. But don’t overload youranswer with lot of them. Tell themthe ones you are best at.

18. Tell me about your dream job ORwhat are you looking for in thisjob?Stay away from a specific job. Youcannot win. If you say the job youare contending for is it, you straincredibility. If you say another jobis it, you plant the suspicion thatyou will be dissatisfied with thisposition if hired. The best is to staygenetic and say something like: A

job where I love the work, like thepeople, can contribute and can’twait to get to work.

19. Why do you think you would dowell at this job?Give several reasons and includeskills, knowledge, enthusiasm tolearn something new, experienceand interest.

20. What is more important to you: themoney or the work?Money is always important, but thework is the most important. Thereis no better answer.

21. What would your colleague/superior say your strongest pointis?There are numerous goodpossibilities: Loyalty, Energy,Positive attitude, Leadership, Teamplayer, Expertise, Initiative,Patience, Hard work, Creativity,Problem solver. Take the best pick.

22. Tell me about a problem you hadwith a supervisor/colleague andhow did you handled it.It is the biggest trap of all. This is atest to see if you will speak ill ofyour boss or anyone.. If you fall forit and tell about a problem with aformer boss, you may well belowthe interview right there. Staypositive and develop a poormemory about any trouble with asupervisor.

23. Tell me about your ability to workunder pressure.You may say that you thrive undercertain types of pressure. Give an

example that relates to the type ofposition applied for.

24. Do your skills match this job oranother job more closely?Probably this one. Do not give fuelto the suspicion that you may wantanother job more than this one.

25. What motivates you to do your beston the job?This is a personal trait that only youcan say, but good examples are:Challenge, Achievement, andRecognition.

26. Are you willing to work overtime?Nights? Weekends?This is up to you. Be totally honest.

27. How would you know you weresuccessful on this job?Several ways are good measures:You set high standards for yourselfand meet them. Your outcomes area success. Your boss tells you thatyou are successful.

28. Would you be willing to relocate ifrequired?You should be clear on this withyour family prior to the interview.If you think there is a chance it maycome up. Do not say yes just to getthe job if the real answer is no. Thiscan create a lot of problems lateron in your career. Be honest at thispoint and save yourself future grief.

29. Are you willing to put the interestsof the organization ahead of yourown?This is a straight loyalty anddedication question. Do not worryabout the deep ethical and

“If you have anything really valuable to contributeto the world it will come through the expressionof your own personality, that single spark thatsets you off and makes you different from everyother living creature.” – Bruce barton

Persona

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11

philosophical implications. Just sayyes.

30. Describe your management style.Try to avoid labels. Some of themore common labels, likeprogressive, salesman orconsensus, can have severalmeanings or descriptionsdepending on which managementexpert you listen to. The situationalstyle is safe, because it says youwill manage according to thesituation, instead of one size fits all.If required , give situationalreference.

31. What have you learned frommistakes on the job?Here you have to come up withsomething or you strain credibility.Make it small, well-intentionedmistake with a positive lessonlearned. An example would beworking too far ahead of colleagueson a project and thus throwingcoordination off.

32. Do you have any blind spots?Trick question. If you know aboutblind spots, they are no longer blindspots. Do not reveal any personalareas of concern here. Let them dotheir own discovery on your badpoints. Do not hand it to them.

33. If you were hiring a person for thisjob, what would you look for?Be careful to mention traits that areneeded and that you have.

34. Do you think you are overqualifiedfor this position?Regardless of your qualifications,

state that you are very wellqualified for the position.

35. How do you propose tocompensate for your lack ofexperience?First, if you have experience thatthe interviewer does not knowabout, bring that up: Then, pointout (if true) that you are a hardworking quick learner

36. Tell me about a time when youhelped resolve a dispute betweenothers.Pick a specific incident.Concentrate on your problemsolving technique and not thedispute you settled.

37. What position do you prefer on ateam working on a project?Be honest. If you are comfortablein different roles, point that out.

38. Describe your work ethic.Emphasize benefits to theorganization. Things like,determination to get the job doneand work hard but enjoy your workare good.

39. What kind of salary do you need?A loaded question. A nasty littlegame that you will probably loseif you answer first. So, do notanswer it. Instead, say somethinglike, that’s a tough question. Canyou tell me the range for thisposition? In most cases, theinterviewer, taken off guard, willtell you. If not, say that it candepend on the details of the job.Then give a wide range.

40. Why did you leave your last job?Stay positive regardless of thecircumstances. Never refer to amajor problem with managementand never speak ill of supervisors,co-workers or the organization. Ifyou do, you will be the one lookingbad. Keep smiling and talk aboutleaving for a positive reason suchas an opportunity, a chance to dosomething special or otherforward-looking reasons.

41. Have you ever had to fire anyone?How did you feel about that?This is serious. Do not make lightof it or in any way seem like youlike to fire people. At the sametime, you will do it when it is theright thing to do. When it comes tothe organization versus theindividual who has created aharmful situation, you will protectthe organization. Remember firingis not the same as layoff orreduction in force.

42. What qualities do you look for in aboss?Be generic and positive. Safequalities are knowledgeable, asense of humor, fair, loyal tosubordinates and holder of highstandards. All bosses think theyhave these traits.

43. Do you have any questions for me?Always have some questionsprepared. Questions preparedwhere you will be an asset to theorganization are good. How soonwill I be able to be productive? Andwhat type of projects will I be ableto assist on? Are examples?

“There are no failures - just experiences and yourreactions to them.”

- Tom Krause

Interview Tips

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ELDORADO April 2008

The Five Minds of a Manager

The Idea in Brief

Sometimes your management jobseems impossible? It may not be that’ssurprising. Your many roles are so oftencontradictory. Be global, and be local,you’re told. Collaborate, and compete.Change perpetually, and maintain order.Make the numbers while nurturing yourpeople. How can you possibly reconcileall this? No one can.

But you can triumph over managerialobstacles, despite conflictingexpectations, if you focus less on whatyou should do and more on how youshould think. Successful managers thinktheir way through their jobs, using fivedifferent mind-sets that allow them todeal adeptly with the world aroundthem:

• A reflective mind-set allows youto be thoughtful, to see familiarexperiences in a new light, settingthe stage for insights andinnovative products and services.

• An analytical mind-set ensuresthat you make decisions based onin-depth data—both quantitativeand qualitative.

• A worldly mind-set provides youwith cultural and social insightsessential to operating in diverseregions, serving varied customersegments.

• A collaborative mind-set enablesyou to orchestrate relationshipsamong individuals and teamsproducing your products andservices.

• An action mind-set energizes youto create and expedite the best plansfor achieving your strategic goals.

The key to your managerialeffectiveness

Regularly access all five mind-sets, notin any particular order, but by cyclingthrough each as needed. And don’t goit alone. When you collaborate withcolleagues by interweaving yourcollective mind-sets, you—and yourorganization—will excel.

The Idea in Practice

Managing effectively encompasses fivebasic tasks, each with its own mind-set:

Managing Yourself Relies on aReflective Mind-Set

Without reflection, management ismindless. Events make sense only whenyou stop and think about what theymean, how they connect, what patternsthey reveal. Reflection puts events intonew and clear perspective. As you lookin, you can better see out, perceivingfamiliar things in unfamiliar ways—a

product as a service, a customer as apartner. As you look back—at whatworked and what did not—you seeahead to what your organization shouldbecome.

Managing Your OrganizationRequires an Analytical Mind-Set

You analyze most effectively when yougo beyond the superficial—just runningthe numbers. Instead, you drill intoricher sources of data, including yourand others’ underlying values andbiases. What data and assumptions arethey using? Breaking up complexphenomena into component parts helpsyou see problems in new ways, movingyour organization toward action andchange.

Managing Your ContextDepends on a Worldly Mind-Set

When you see the world through theeyes of other cultures, other industries,other companies, you better understandthe diverse contexts in which yourorganization operates. That requiresgetting out of the office and spendingtime where products are produced,customers served, environmentsthreatened. Shell Oil exemplifies aworldly mind-set. It extracts oil andbrings its products to markets without

BHARAT CHABBRAPGDM PT 2005-2008

Persona

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13

violating local rights or disrupting localenvironments.

Managing RelationshipsRequires a Collaborative Mind-Set

You manage most effectively when youmanage not individuals but therelationships among them. You’recreating the conditions—the structuresand attitudes—that encourageteamwork. You’re managing frominside, throughout your organization—not from the top. You’re not running theshow—unless absolutely necessary.

Managing Change Calls for anAction Mind-Set

Managers have a bias for action. Yourchallenge, then, is to mobilize your andothers’ energies around what needs tochange—while sustaining what muststay the same. An action mind-set is notabout “whipping the horses into frenzy.”Instead, survey the situation, determineyour teams’ capabilities and yourorganization’s needs, and help everyonemove in the right direction.

Source: Key ideas from the HBR articleby Jonathan Gosling, Henry Mintzberg

Poem

The Journey -Desert and MeWhen I look behind I see

Green pastures are left far awayWhen I look forward I find

Endless Desert the only wayO! I have to go I have to go

Shady oasis may come in my wayAs I travel through the desert

night and dayScorching sun is shining bright

Caravans vanishing like shadows in lightAll I see is sand and thorns

Or sandy oceans and devils with horns.Tired and thirsty when I sit

Searching food in old small kitMemories haunt me good days of past

Childhood fantasiesAnd good friends to last

Sitting alone amidst the desertIts terrible to think of the past hazard

I wish to live a happy lifeWith lovely children and a charming wife

But future seemsso dry and chancy

What next might strike I often fancy

I wish to rest butI cannot sit

Cross it cross it, beforethe storms hit

Endless desert that I have to faceIt’s my destiny that I have to trace

Sudhir Kumar Ghosh

The Five Minds of a Manager

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ELDORADO April 2008

Tormentor to Mentor– the Changing Role

The basics of Tormenting

It is interesting to note that tormentinghas been considered a very importantactivity for human beings. Since thebeginning of the concept of religion,denial of food, etc were consideredimportant aspects of religious rituals.

Perhaps it originated from the followingtwo concepts:

1) Ultimately the most important partof management is self-management.

2) To have self-management, start bycontrolling the basic humaninstincts.

There is very little evidence that thiscontrol gives a wider control on humanactivities. However, the concept stillprevails. Whenever Gandhiji started anonviolence movement, it ended inbecoming violent. He stopped themovement and got onto “self-purification” fast of 21 days. Perhapsthe only thing the fast achieved wasdistraction of attention from the failureof the non-violent movement.

In Hinduism, meditation of God withminimal intake of food was considered“tapasya” which would win the favorof God.

Tormenting and HumanDevelopment

In many cultures, the developmentprocess was associated with torment. ABrahmin was called “Dwija” (twiceborn) – because he was born the firsttime in the normal way and pamperedin the family till the age of eight years.Thereafter, he was sent to the guru’sashram for learning the scriptures. Thisprocess of learning involved a lot ofhardship. After twelve years of thislearning when the person returned to hisfamily at the age of twenty, he was adifferent person from the eight-year-oldboy and therefore this was consideredhis second birth.

Even with non-Brahmins, the learningprocess was apprenticeship with thefather as most sons were supposed totake up the vocation of their respectivefathers. So a carpenter’s son became acarpenter, a vaidya’s son became avaidya, a dacoit’s son because a dacoit– the technology was leant from thefather and this was also through atormenting process since everybodyfirmly believed in the dictum “spare therod and spoil the child”.

And this is where the role of thetormentor is being replaced by the roleof the mentor who is able to pass on theeducation smoothly by crating passion

for learning. Successful teacher is amentor. He makes the student interestedin the topic so that the student keeps onlearning beyond what the teacher hastaught. In that process, the teacher alsolearns from the student. In industrialand business situations, with changingtimes, the subordinates are coming withtheir own expertise. The bosssubordinate relationship is transforminginto an exchange of knowledge.

Mr. Iacocca, when he took over as thePresident of Ford, did not have theinsight of automobile technology. Heasked his two most competentsubordinates to spend one hour withhim every evening to bring him up inautomobile technology.

In the new relationship, the traditionalrole of a strict boss who was the originof everything the subordinate learnt wasvanished. The new boss is able tofunction in a better way by mentoring.

Twentieth century started with anemphasis on performance as it wasrealized that the competition woulddecide the survival and growth.Productivity and quality wereconsidered of prime importance and forthis, strict systems and discipline wereconsidered vital.

This brought into existence the role ofthe boss as a “tormentor”. Tormentor

PIYUSH GULATIPGDM FT 2006-2008

Persona

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15 Tormentor to Mentor– the Changing Role

“Mentoring is a very difficult role. It requires theinsight of a mentee and the power of listening andobserving”

History ofMentoring

The original Mentor is a characterin Homer’s epic poem The Odyssey.When Odysseus, King of Ithaca wentto fight in the Trojan War, heentrusted the care of his kingdom toMentor. Mentor served as the teacherand overseer of Odysseuss’ son,Telemachus.

was a person with a high performancestandard with a motto “no excuses”.

The Father role

Most of the roles in our primaryorganizations start with the family andare adopted by industry. For attainingproductivity and quality, a vital role wasplayed by the father. When a Managerwho achieves remarkable results isasked about the secret of his success,he invariably gives first credit to hisfather who insisted on high standardsof performance. He had a very clearidea of the standard and would “push”the family members towards it. Whenthe role succeeded, the childrenachieved remarkable results. When itdid not, both the father and the childrenended with frustration and hostility.

From tormentor to Mentor

The situation started changingdramatically at the end of the lastcentury. Fathers, superiors , elders andbosses suddenly realized that bestresults are not obtained by tormenting.What is required is not tormenting butmentoring and that seems to be the keyword in the 21st century.

The basics of mentoring is theassumption that everybody canunderstand what is a fruitful behaviour

but may need the realization in case ofwrong behaviour. Everybody can judgehow his face can be groomed but needsa mirror as nobody can see himselfwithout a mirror.

A mentor plays the role of a mirror andmakes an individual look at himself.Basically, a mentor does the followingthree things.

- Observe the behaviour of thementee very critically so that he cangive a feedback to the mentee withclear examples.

- Make reflective statements for thementee to understand his ownbehaviour.

- Make the mentee think aboutalternate behaviours which couldbe more fruitful.

In the tormenting role, the boss and thesubordinate invariably have an egoclash and many times the resistance ofthe subordinate is because of this egoclash. A mentor accepts the ego of thementee and is able to sidestep it so thatthe acceptance of the deficientbehaviour is not looked upon as anacceptance of wrong doing.

Mentoring is a very difficult rolebecause it requires the insight of the jobcarried out by the mentee. It alsorequires the power of listening andobserving and, most importantly,

requires the skill of communicationwithout involving “I am OK – you arenot OK” attitude.

An obvious example is the relationshipbetween a mother and a child –particularly a modern mother. In badold days, mothers used to work with araised palm “Do this or you will get aslap”. Today I find that mothers areaccommodating and understanding andtry to correct the behaviour withoutthreatening to punish the wrongbehaviour.

The future seems to be movingsteadfastly to the new role for the socalled bosses who bully around to therole of the modern mother. It seems tobe more successful not only in gettingproductivity, quality – but perhaps mostimportantly, the innovation which givesbest results under a feeling of openness.

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ELDORADO April 2008

Work Life Balance

Work, work and work 24/7, 365days a year is no more the funda

for efficient and creative workers.Zapped??? Read on…..

All I meant by the statement was that itis important for the employees tomaintain a healthy balance betweenwork and their private lives so that boththey and the company benefit in thelong term. Every organization mustrespect and support its employee’sinterest in maintaining a balancebetween family, leisure time and career.

So, dear readers believe me, striking theright balance is the key to a successfulsatiating life. If you think that’s myopinion, then that’s your misconceptionbecause this has actually become theindustry buzz.

Hence, it becomes the onus of the HRdepartment to pay more and moreattention to the aspirations of all theemployees by creating parameters forsocial interactivity to enable them toexplore their true potential.

Even after this you are not satisfied,then ask a simple question fromyourself. Why does a person want fatsalary cheques, big mansions, plethoraof cars?

Two simple answers to thesemindboggling questions are -

a) Sense of achievement and

b) The joy one gets as an ensue.

Remember, if a person works too much,sacrificing quality family time, he mightreach the top of the corporate ladderquickly, but the achievement andmaterial gain will not commensurate theprice he’s forced to pay in the long run.IT, BPO and other hi-tech corporates areconstantly upgrading and reframingtheir work, life and balance policiesbecause of high employee attritionrates. Happier employees are moreproductive and more loyal. Moreproductivity adds to a healthier bottomline.

Recently, when I got an opportunity toattend a seminar on Work Life Balanceat FMS, DU, Ms. Sanchita Singh, HeadO&S GE Money told that her companyhas introduced “Compressed WorkWeek” for its employees so that theemployees have the option to serve theirailing parents or growing children etc.Despite the temptation to stayconnected with business and a growingnumber of high tech tools to do just that

SWEETY CHANDWANIPGDBM-FT (2006-08)

at anytime from anywhere in the world– people are still able to make a cleanbreak with their family for severalweeks every year.

Alas!! Everyone is not that luckyenough, especially those who are thebusiness owners. A growing number ofentreprenures reluctantly though arenever able to leave their workplacebehind whether they are at home or onvacation. But there are employees whoofficially bar themself from checkingany work-related email or voicemailduring a vacation. They also let theirstaff know there isn’t anything that can’twait for their attention.

In a recent survey of 1,000 small-business owners by Discover, 59 % saida “day off” meant they were stillavailable for calls and e-mails andincluded working a full day from aremote location. Nearly half said theyworked through most official holidays.Now, its upto the organiztional culturewhether they support the momentousidea of Work Life Balance for theirbiggest asset i.e. their employees or not.

Choice is yours……Think about ithard…

Persona

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17

Brand ObituaryWhen Should Companies PutBrands On The Backburner?

All things good, bad and ugly havecome to an end. If the brand fails,

it makes sense to pull the plug. But ifthe brand has performed well in the past,letting it go becomes just that an inchharder. With intense competition,companies cannot afford the luxury ofcarrying aging and ailing brands ontheir production lines.

SO WHEN MUST A COMPANYLET GO?

Ideally, When a product completes itsgrowth stage on the product life cycle,the company tries to re-engineer it, toadd value to it.

“When the growth starts to slow downyou have to revamp and reposition the

product”. When that does not lead toimproved results, the companies KILLthe product.

Another primary reason why brandslose their right to live is when they nolonger offer PRODUCTDIFFERENTIATION. However it isnot always the old and tottering brandsthat see a new after life. Sometimesbrands are also replaced when companyis launching a more powerful productor a contemporary design. For instance,in Automobile industry Honda Citycame out with a completely differentvehicle to replace its older version,instead of just changing head lamps, taillamps and so on.

“Brands have ‘NOSTALGIA’ value thetaste, smell, packaging evokes pleasant

TANVI NARANG PGDM-FT 2007-2009

memories of the past- this is especiallytrue of products that are consumed bymultiple senses-food brands,toothpaste, soaps.” But it’s anotherthing if memory is not positive. Forexample, When Global Trust Bank wastaken over by Oriental Bank OfCommerce; the brand was seeminglyeclipsed by OBC.

Companies on brand launch spend hugeamounts. Manufacturers tend toeliminate brands only if they are over-taken by newer products, or by creatingnewer sub-brands or variants. This isbecause they have become costconscious. All this means thatPULLING THE PLUG IS ONLYBECOMING A TOUGHERDECISION TO MAKE!

FriendshipFriendship is one of those parts of life that we at times take for granted. It rolls off of our tongues as if we expect it to bepresent in all areas of our lives. I hear our ‘friendship is forever’ or ‘friends always’ is a common thread that runs throughour lives. But in truth how many true friendships do you have? Think for a moment and list those you feel are true friendsand those with which you have a close relationship. Are they true friends? Is their friendship from the heart? How manypeople do you truly see as friends?

Friendship is a blessing, and a friend is the channel through whom great emotional, spiritual blessings flow. Friends cancheer us when we’re sorrowful or depressed. Friends can challenge us when we allow ourselves to get beyond our reasonableboundaries. Friends can motivate us when we’re ready to give in, and they can provide for us when life falls apart. They arethere when all is well, and we want someone with who to share life’s pleasant and memorable moments. We often just wantthem around to have a good time, to laugh, to act silly; to enjoy some mutually liked activity. In how many ways havefriends enriched our lives and made us feel loved, accepted, respected and cared for? Probably, too many to list, and the listgrows daily.

Brand Obituary When Should Companies Put Brands On The Backburner?

18

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ELDORADO April 2008

Supply ChainOperation Reference

(SCOR)

In today’s rapidly changing globaleconomy some companies are able to

change with the times to adapt andthrive in the increasing uncertain worldof the 21st century. They can berecognized by their ability to anticipateand understand changes in the market,to recognize new opportunities, todeliver new customer service and toadapt their businesses rapidly to meetand exceed their customer requirements.All these companies have recognizedthe importance of one key element,agility or flexibility to change fast. Agilebusinesses view themselves as thecenter, or hub of networks of materialsand information lows. These flowsextend from the customer interface atmarketing and sales through productionand procurement to the building ofrelationship with the suppliers. Thesebusinesses achieve agility through aconstant review and realignment ofthese closely linked networks.

Over the past decade, Supply ChainManagement (SCM), has been coinedas a management approach to deliverthis required agility to change, whilemaintaining cost efficiency, SCM ishaving profound impact on businessresults. It encompasses all activitiesassociated with the flow andtransformation of the goods from theraw material stage (extraction), through

the end user, as well as the associatedinformation flow (Handfield & Nichols,1999). Clearly, the idea of SCM is toview the chain as a total system to finetune the decision about how to operatethe various components (companies,functions, and activities) in ways, whichwill produce the most desirable overallsystem performance in the long run.Doing so is extremely difficult due tothe number and the complexity of thedecisions to be made, as well as the intraand inter organization issues that mustbe addressed.

Never has so much technology andbrainpower been applied to improvingsupply chain performance includingpoint of sale capture the customer’svoice. Electronic data interchange let allstages of the supply chain hear thatvoice and react to it by using flexiblemanufacturing ,automated warehousingand rapid logistics. Concepts such asquick and accurate response, efficientconsumer response, masscustomization, lean manufacturing ofmodels for applying new technologiesto improve performance. One can arguethat proliferation of interpretation ofwhat SCM has lead to some confusionamong researcher and practitioners.There should be some characteristicsunique to supply chain managementthat differtiates it from past research that

DEEPAK PATHAKPGDBM-FT (2007-09)

fell into the age is of integrated logistics.Houiligan(1985) made it clear that thedifferentiating factor is the strategicdecision making aspect in managing thesupply chain. SCM reaches out beyondboundaries of cost containments andlinks operating decision to strategicconsideration within and beyond thecompany. To assist organizations inachieving better strategic decisionmaking, a number of researcher andpractitioners have devoted their effortsto developing models to describe theelements and activities of supply chain.Beamon (1998) provided a literaturereview on multi stages supply chainmodeling, which consist of fourcategories, namely deterministic model(Voudouris, 1996), stochasticmodel(Tzafestas & Kapsiotis,1994),economic model (Christ & Grout ,1994)and simulation model(Towill,1991).The author proposed aresearch agenda for supply chain designand analysis:

(1) The evaluation and development ofsupply chain performance measure

(2) The development of models andprocedure to relate decisionvariables to the performancemeasures

(3) Consideration of issues affectingsupply chain modeling and

Marketing

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19

(4) The classification of supply chainsystem to allow for thedevelopment of rule of thumb orgeneral techniques to aid in thedesign and analysis ofmanufacturing supply chains.

Although various supply chain modelshave been proposed, most of thememphasize on inventory managementand distribution logistic. As mentioned,strategic decision making is critical insupply chain management, whichrequires a framework model that canserve as an industry standard. Thesupply chain council (SSC), a not forprofit organization established in 1996that now has over 650 memberworldwide, has taken the initiative indeveloping such a model -the supplychain operation reference (SCOR)model. The SCOR model is intendedto be an industrial standard that enablesnext generation supply chainmanagement. It contains standarddescription of management processes,a framework of relationship among thestandard processes, standard metrics tomeasure process performance, astandard alignment to software featuresand functionality. It provides a commonsupply chain framework, standardterminology, common metrics withassociated benchmarks, and bestpractices and can be used as a common

model for evaluating, positioning, andimplementing supply chain applicationsoftware. Its growing stage of lifecycleand enjoys a leverage to become astandard in supply chain management.Supply chain configuration is anintegral part in SCOR projectimplementation. Currently, theconfiguration of ‘as-is’ or ‘to-be’threaded diagram describing a supplychain is done manually. To automatethis process, a computer assistedconfiguration tool developed. Theconfiguration tool can so far only deal

with a single manufacturing facility ofa company. It does take into account theinteractions among multiple facilities.This problem will be dealt in futureresearch and development effort.Furthermore, we will investigate howto optimize supply chain configurationbase on certain performance measure.Specifically, based on set of criteria,how to automatically generate ‘to-be’threaded diagram from ‘as-is’ threadeddiagram to optimize supply chainperformance.

About the Supply Chain CouncilThe Supply-Chain Council was formed in the US in 1996 by Pittiglio RabinTodd & McGrath (PRTM) and AMR Research, and initially included 69voluntary member companies. Currently, the Council has over 750 membersworldwide and has established international chapters in Europe, Japan, Korea,Latin America, Australia/New Zealand and Southeast Asia, with additionalrequests for regional chapters pending. The majorities of the Supply-ChainCouncil’s members are practitioners and represent a broad cross-section ofindustries, including manufacturers, distributors and retailers. Equallyimportant to the Supply-Chain Council and the advancement of the SCOR-model are the technology suppliers and implementers, academicians andgovernment organisations that participate in Supply-Chain Council activitiesand the development and maintenance of the model.

Supply Chain Operation Reference (SCOR)

20

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ELDORADO April 2008

The Merger Story

When does a company undergomerger?

When competitors emerge, firmsundergo pressure. A corporation mayreduce the cost of its products by cuttingthe costs of raw materials and labor,increasing sales and finding newtechnological fixes—just as a statemight try to increase economic growth,enhance productivity or develop newweapons systems. But if a companyreaches the limits of its economicmarket, it may consider a merger withlike-minded companies to cope with acompetitor.

Why do companies undergomergers?

Mergers give companies greaterflexibility. They achieve greater scalewithout increasing production. If newproducts are involved in the merger, acombined firm can avoid anti-trustproblems. Larger scale allows acompany to maintain its position in theindustry. Usually it can invest in newproducts, run higher advertising budgetsand sometimes achieve lower prices. Alarge producer can get raw materials atreduced cost.

Examples:1. Wal-Mart, the contemporary

exemplar of corporate expansion,has not shrunk from plunging into

new markets and cutting prices—thereby forcing the merger betweenK-Mart and Sears.

2. Gillette is combining with Proctorand Gamble to offset Wal-Mart’sdomination in the household sector.

3. Verizon’s success incommunications is provoking aconnection between Nextel andSprint, and Verizon is in turnseeking to acquire MCI.

4. Oracle and PeopleSoft are mergingto counter SAP in enterprisesoftware.

5. Hewlett-Packard merged withCompaq to match Dell Computer’sgains and is open to new mergerstrategies.

Hence, Mergers give nations similaradvantages in flexibility, and of coursenations do not face antitrust problems

Why mergers and acquisitionsfail?

It is known that 70% of the mergers andacquisitions fail. There are manyreasons for the same.

Management desires the gains thatconsolidation and economies of scaleshould bring, but in fact the greatmajority of Mergers &Acquisitions-across all industries-do not live up totheir promises. On paper, two plus twoshould equal five. In fact, two plus two

SUGANDHAPGDM-FT (2007-09)

usually equals three. This has beenconclusively shown by dozens ofstudies covering hundreds of companiesacross all industries.

The simple answer is that mostexecutives manage the businessintegration but do not manage thehuman integration. Eager for the gainsanticipated, they treat the acquisitionlike a series of financial reports, insteadof proud and vibrant organizationscomprised of human beings.

So, while the acquisition or mergerlooks good on paper, companies oftenfail to recognize the human actionsnecessary to make two separateorganizations behave like one.

Reasons:

First, the people who focus on theacquisition are skilled in strategy, theindustry and in finance. They have avery clear picture of the desiredobjectives of the acquisition, andunderstand how the new organizationshould return business efficiencies. Butgiven the time demands of the pre-purchase activities, and their tendenciesto focus on financial and businessissues, the “people” issues often receiveshort shrift.

Second, the people most affected by theaction-the employees of the purchasedorganization-do not know the business

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21

objectives, see change as a threat, haveno real influence over the events, andwonder immediately how they will beaffected personally.

Not surprisingly, the focus and prioritiesof the two groups are likely to divergestarkly. This is the main reason whymore than 70 percent of businesscombinations fail: they do not paysufficient attention to the messy,detailed, nuts-and-bolts human issues.

How to do a right merger oracquisition?

In the minority of cases when mergersand acquisitions do work, it wasbecause companies spent significanttime and effort addressing the “people”issues, including:

• culture• communications• teamwork• shared vision• joint work on integration

projects• goal-setting• recognition• trust - building, and many

other similar details.

Successful combinations are likesuccessful marriages: they take a lot ofwork on many fronts, especially thepeople issues.

To do it right, you must compare thecultures of the organizations, carefully

plan their integration, communicaterelentlessly, build trust, and be open tochange yourself.

Get Insurance

Most mergers and acquisitions fail, at ahigh cost to the businesses and thepeople involved. The historicalevidence is clear and convincing.

If you are embarking on a merger oracquisition (or if you have completedone), you owe it to the organization toput the odds in your favor. You shouldplan to spend at least as much time onthe social and HR issues as on thefinancial, legal and business-systemsissues.

If you are confident in your internalabilities to manage the merging of twocultures, with the same level ofexpertise that you are applying to thelegal and financial issues, you could dothis in-house. Some excellentcompanies that have active growth-by-acquisition strategies maintain aninternal staff dedicated to integrationservices.

On the other hand, if you can use theexperienced outside professionals givefree professional advices, and somehonest feedback on your currentsituation.

The Merger Story

Tata Motor’s acquisition of Jaguar

and Land RoverTata Motors’ acquisition of two iconic British brands - Jaguar and Land Rover -was finally completed in March 2008. The previous owners of these two brandswere Americans but though the flavor of the two companies continues to be veryBritish. Tata has acquired the two companies for about half the price (i.e., 2.3billion) that Ford paid their original owners in 1989. Although it is not going tobe all rosy for Tata Motors after the acquisition .Jaguar and Land Rover are bothspecial, super premium brands that have a huge fan following. It is Jaguar thathas lost a bit of its shine over the last two decades.

Tata Motors has said that there will be no change in the management of the twocompanies and that there will also be no interference in the independent operationof these two brands and companies.

22

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ELDORADO April 2008

Private Labels

Rajan Malhotra CEO, Big Bazaar,

was among the first employees

when Pantaloon started the retail chain

in 2000. He has spent the last seven

years not only orchestrating the brand’s

aggressive expansion, but also creating

what he calls Big Bazaar’s ‘powerbrands’ - the chain’s private labels,

some of which will clock turnovers of

Rs 200 crore by the end of this financial

year. Today, these power brands cut

across all categories - food and non-

food , contributing a healthy sum to the

format’s bottom line, and giving

traditional marketers sleepless nights.

Why? Because, when Frito-Lay India

and Big Bazaar had differences over

commercial terms and trade margins,

the latter simply yanked the former’s

products off the Big Bazaar’s rack,

replacing them with its own Tasty Treat,

besides giving ITC Food’s Bingo vital

shelf space. In short, from the traditional

marketer’s perspective, these retailer-

owned brands are competitions that

enjoy a disproportionate advantage at

the retail level.

Big Bazaar isn’t alone in this display

of bravado. Almost every retailer in

India that has acquired a certain size and

scale has private label brands, which

allow them to enter new categories

faster than traditional marketers.

Purpose of Private labels

◆ For one, they provide exclusivity

and differentiation to retailers -

each label is unique to its retailer.

◆ Another reason is plugging a need

gap - for instance, Big Bazaar’s

label DreamLine is aimed at

providing shoppers the entire

gamut of home improvement

solutions under one brand.

◆ Then there is the aspect of supply

chain efficiencies. “Unlike

manufacturers who have long

supply chain issues when it comes

to launching brands, retailers can

continuously launch variant after

variant without worrying about

this,” says an official with Reliance

Retail, arguing that Reliance Retail

can launch three variants within tea

and retail them all, while traditional

manufacturers wouldn’t have that

kind of bandwidth. Reliance has

launched its own label, Reliance

Select, which retails products as

diverse as grocery, milk, footwear

NIDHI JAINPGDM-FT (2007-09)

and even watches. Private labels

also help in cutting down on

intermediaries - and thereby

dropping cost - which means better

margins for retailers.

◆ And since private labels are

sourced directly from

manufacturers, retailers are at

liberty to pass on discounts to

consumers, and something that

established brands can’t afford

doing, given the slender margins

involved.

◆ These labels also offer more choice

to customers, build loyalty and

retention. “You are more in control

of your own destiny with private

labels. You get to decide its

positioning, price architecture,

packaging and the way it is sold,”

says Andrew Levermore, CEO,

HyperCity.

Private labels have picked up

worldwide as organized retailers have

achieved economies of scale. According

to a Euromonitor study, the global

private label market is growing at 6%

per annum. Private labels already form

19% of the total market share in India.

Future Group’s private labels include

Marketing

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23

Fresh n Pure, Premium Harvest, Tasty

Treat, Clean Mate and Care Mate - in

fact, Future’s private labels account for

20% of the food category, while overall;

the share of private labels for the group

is pegged at about 10%. Private labels

form about 10% of the overall store mix

for Spinach too, and are estimated to

go up to 15% in the near future.

Subhiksha, for its part, sells sugar, rice,

wheat and pulses under the Subhiksha

name, and these contribute roughly 35%

of its topline.

The emergence of private labels is

giving smaller brands a chance to

compete with the bigger brands.

Subhiksha has recently moved to third

party brands, which include brands sold

exclusively at Subhiksha. This covers

groceries sold under the Subhiksha

name as well as other products typically

sold by national FMCG companies.

“The idea is that we get exclusive

supply of these products from the

manufacturers who have the capability

and the competence to deliver high

quality products,” says R Subramaniam,

MD, Subhiksha.

There is hardly any special advertising

created for own labels, except for the

odd leaflet or two. Most retailers rely

on shelf space and signage and

techniques like sampling and active

merchandising at the store, for

promoting their brands. It is essential

that the packaging and look and feel are

as good as if not better than national

brands so customers don’t have reason

to view the products with suspicion.

The real challenge, however, will be

for retailers to take own labels outside

their stores and make them national

brands — something that Future Group

has announced it will do. DreamLine

and apparel brand Buffalo are the two

labels it has mandated for national roll-

out, and the responsibility of taking

these labels across various other

channels rests with Future Brands.

Malhotra says the rollout will be a

learning experience, given that the

brands will move out of the protected

environment of the stores and test the

grounds whether the private labels can

stand on their own.

Fantasy insolitude

Some times in solitude, I dream of the dayWhen clouds of sorrows would vanishaway.There will be sunshine ofSuccess bathing meClear blue sky and birds flying freeJoyfully dancing angels greatSinging and smiling upon my fateYes, on that day I will celebrateNot with wineBut cheerful loughters andhappy state of mindSometimes in solitude I wish and PraySpirit of goodness and hopeComes to stayGetting strength from herI’ll win all battlesOften with intelligenceBut sometimes with mightI will grow so strongThat nothing would impedeWhen tempest of desire in mindWill cease

Yes, on that day I will celebrateNot with wineBut cheerful loughters andHappy state of mind

Sudhir Kumar GhoshPGDBM

Private Labels

Goods by Gucci, top the lists of luxury brandlovers. In an online survey 25,000 consumers in48 countries were asked which luxury brand theywould buy if money were no object. Besides Gucci,respondents chose Chanel, Calvin Klein, LouisVuitton and Christian Dior. The survey wasconducted by The Nielsen Company, a marketresearch firm in the last quarter of 2007.

24

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ELDORADO April 2008

Sketching a sustainablerural market manifesto

Even though, Indian corporates haveby now recognized the fortune at

the bottom of the pyramid, companiesoften revisit their rural marketingstrategy because of the tough challengesand roadblocks that it faces as theypenetrate deeper into the market. Withfresh debate on the relevance ofProfessor CK Prahald’s concept of“fortune at the bottom of the pyramid”,companies are now engaged inrevisiting their rural marketingstrategies. The key objective isdeveloping a sustainable strategy in thisarea. This is also one of the key issuesthat needs urgent focus in corporate andgovernment sectors.

New dynamics

There are a number of new interestingtrends that has been observed recently.One, rural India is not all about povertyand poorly developed infrastructure.Nor do rural households look atagriculture as the sole means ofsubsistence. On the contrary, 35 percentof the rural house looks at agricultureactivities, and industry and servicesector accounts for 58 percent of therural economy. Many consumers areshifting their consumption patternsfrom the food and cereals to stockingluxury items. Similarly the top 25percent of rural India account for 50

percent of non-food consumption inIndia. In terms of ownership of assetsand amenities like permanent houses,two wheelers, and consumer durables,rural India receives a favorable rankingand the best sales when it comes toownership of these assets and amenitiesin the rural areas such as Punjab, Kerala,Himachal Pradesh, and Haryana.Finally, there is an increasing thrusttowards education with estimatedspending of Rs 600 crore happening inrural India.

This in part is indicating the new faceof rural India which is prosperous,proactive, and has consumers who areurban- like in their aspirations andapproach. So its time for marketers andbusiness practitioners to script businessmodel’s that looks at tapping thisemerging reality.

Key challenges

The fact is corporate India has beenrural –focused in its endeavors for thepast so many years. Whether it is ITC’smuch talked about e-choupal initiativewhich eliminates intermediaries whileprocuring farm output and subsequentlyimprove the farm management practicesof the farmers or for that matter HUL’sproject shakti that creates economic selfreliance by including rural women for

SHITIZA GUPTAPGDM-FT (2007-09)

the distribution of its product; all ofthem point in the same direction -Corporate India is exploring greenerpastures by going rural.

Corporate need to focus on specificsolutions by targeting the rural audienceand offering products that meet ruraldemand. For this sufficient marketresearch needs to be done focusing onrural consumers and theirdemographics. Rural marketing is notabout reaching market but reachingcustomers. Corporate may be able to setup distribution outlets and be adept inmanaging the supply chain, but what ismore crucial is to acess and understandrural consumers. Similarly the mediumto market the message is important butwhat is more important is to achieveinteraction with the target segment.Achieving contact with consumer maybe important but what is more importantis to impact the behavior of the endconsumer in terms of getting theconsumer buy the products and servicesbeing offered by the firms. There arealso clear substitutes in rural areas forevery product which is available in theurban end. And therefore if a producthas to takeoff at the rural end then ithas to be lasting, beautiful, and pricesensitive. And if one of these threeelements is missing then the productwon’t take off.

Marketing

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25

Challenges in creating brandequity for products with short

Product Life Cycle (PLC)

Introduction

A product is anything that can be offeredto a market to satisfy a want or need.But like markets, products have evolvedthrough various stages.

PLC provides us with the various stagesthat a product undergoes & thisinformation be used to formulatestrategies on how to position anddifferentiate a product. Proper planninggoes a long way in creating BrandEquity, which is the added valueendowed to products & services.Products have evolved, but in somecases they have shorter life cyclecompared to the earlier times, especiallytechnological products like cell phonesand have computers. Apparently, thishas become a major concern forcompanies as the PLC of products arebecoming shorter with each day. So theyare faced with multiple challenges tosustain the product in the market andcreate brand equity.

The rationale behind companieslaunching products with short PLC canbe attributed to the following reasons:

• Fast paced changes intechnology and demandsalways keep a company on themove. A company, therefore,has to upgrade its product evenwith a slight change or a shiftin consumer’s demands andpreferences.

• A consumer always wants tobe in style irrespective of thestature he/she enjoys in thesociety. This leads to a stagewhere consumer’s tastes andpreferences change very oftenand are governed by fashionand style.

To cater to such segment of themarket, companies have tocome up with products withshort PLC. For example-mobile phones, clothing andaccessories.

The Challenges that theCompanies Face

• Time Factor- The very fact thatproducts now have short PLCis itself a challenge forcompanies. The products getshort time to establish them inthe market, or in short, createBrand Equity. The problem isthat by the time a product islaunched in the market; thecompetitors already have asimilar variant ready, thereby,shortening the life of theoriginal product. Thechallenge, therefore, is tosustain the product in themarket.

• Changing Consumer Prefe-rences- The consumer today, is

NEHA GABA, RASHMI GUPTASection-A PG DBM

inundated with alternatives ascompared to the earlier times.Take the example ofautomobile industry whenonly Fiat & Ambassador wereavailable. There was little orno choice and the consumerhad to be satisfied withwhatever was on offer. Butnow the consumer can choosefrom a number of brands andthe brand itself has a numberof products.

Also the consumer possessesa superior level of knowledgeand information about aparticular product beforedecision is made. Thanks tothe Internet which provides theconsumer with every bit ofinformation. In addition tothis, blogging has become aculture today. The challengefor the companies is to keepup with the change andpersuade the consumer bysuccessful differentiation.

• Competition- the Companyhas to face competition frombrands first and the productthat represent the brand. It isnot only important to knowabout the competitors as well.And the design strategies,target segments, defineobjectives and sense the

Challenges in creating brand equity for products with short Product Life Cycle (PLC)

26

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ELDORADO April 2008

reaction pattern; all of whichshould be in time with theshort nature of the product life.Another important aspectwould be to gauge thestrengths & weaknesses of thecompetitors.

• Uncertainty- This can have 3basic issues:

The first priority would be tofind out if the customer iswilling to pay the price for theproduct. Since the productwould have a short life cycle,it is essential to have aneffective pricing strategy inplace.

Then, it is very difficult to predictwhether the product will be successfulor not. Whether the product would beable to ad to the existing Brand Equityof the company or capitalize on it andbuild its unique brand equity. Anotherissue with products having short PLCis that the retailer and the wholesaler isalways in dilemma of how much tostock. In case the products fail, then theremaining stock would be a waste, andif the stock is not sufficient enough, thenthere is a chance of creating unsatisfiedcustomers, who in turn would damagethe existing brand equity of thecompany.

Therefore, the challenge is to strivebalance between sufficient &insufficient stock.

RECOMMENDATION:

Create Hype & Curiosity

Since the product has a short life cycle,a good strategy would be to create a lotof hype and curiosity in the mind of theconsumer before the launch of theproduct. In a way, it extends the life ofthe product as the customer begins tothink and react even before the productis launched. Take the example ofmovies. Movies have been particularlyaffected by this short PLC as most ofthem recover cost in the first week ofrelease, make profit in the next few daysand then fade away. The trailers that areshown on television before the releaseare nothing but creating hype &curiosity in the mind of the consumer.

If the companies are successfully ableto do this then they should also allowpre-booking facilities. Before TataIndica was launched, it had such a largenumber of pre-bookings that it virtuallyfailed to meet the demand so a companymust not only create demand, it shouldalso be able to satisfy the demand.

Understanding MarketCompetition

The companies must have an insightfulunderstanding of competition in themarket. This understanding goes a long

way in creating brand equity. The firstthing that a company must look at is tohave its strategies in place. Analyzingstrengths & weaknesses is a reactiveapproach in product development. Butit helps in targeting the market. BrandEquity can also be created bymerchandising.

Though it is more of a conceptextension, but sometimes it works wellfor the product. Companies should takecue from Pantaloons which hasperfected this art.

Meet the consumer’s expectationsand empower the customer

It is very easy for brands to createexpectations but most of them fail tomeet the standard of expectation set bythem. Therefore, it is important for thecompanies to set the right kind ofexpectation. The next alternative wouldbe to involve the consumer in productdevelopment process. Not only involvebut also inform, engage & energizethem in the process of building theproduct. In this way, the product gainsa fair share of consumer’s mind andheart.

All the initiatives will not only createbrand equity but also value equity &relationship equity.

“Don’t sell products, Empower the customers”

Strategy

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27

Participatory Notes

The word Participatory Notes (PNs)rings the alarm, because one can

associate it the reason for the largest fallwitnessed ever in Indian stock marketson October17, 2007. It had gainedattentions for all the wrong reasons.Securities & Exchange Board of India(SEBI) and Reserve Bank of India(RBI), regulators of Indian economy,keep issuing notices and guidelines toforeign institutional investors regardinguse of participatory notes. They areapprehensive about the adverse effectsthat participatory notes might have onthe market and the economy. Let usunderstand first what are participatorynotes and why foreign institutionalinvestors use PNs

Participatory Notes (P-Notes orPNs)

These are instruments issued byregistered foreign institutional investorsor to overseas investors, who wish toinvest in the Indian stock marketswithout registering themselves with themarket regulator, the Securities andExchange Board of India(SEBI).Indian-based brokerages buy India-based securities and thenissue participatory notes to foreigninvestors. Thus the foreign institutionalinvestor (FII) acts like an exchangesince it executes the trade and uses itsinternal account to settle this. Anydividends or capital gains collectedfrom the underlying securities go backto the investors.

What is an FII?

An FII, or a foreign institutionalinvestor, is an entity established to make

SIMMIPGDM-FT (2007-09)

investments in India. However, theseFIIs need to get registered with theSecurities and Exchange Board of India.Entities or funds that are eligible to getregistered as FII include pension funds;mutual funds; insurance companies /reinsurance companies; investmenttrusts; banks; international ormultilateral organization or an agencythereof or a foreign government agencyor a foreign central bank; universityfunds; endowments (serving broadersocial objectives); foundations (servingbroader social objectives); andcharitable trusts/ charitable societies.

The following entities proposing toinvest on behalf of broad based fundsare also eligible to be registered as FIIs:

• Asset Management Companies• Investment Manager/Advisor• Institutional Portfolio Managers

• Trustees

The functioning of participatory notescan be easily understood from thefollowing flowchart.

FII’s purchase stocks from Indian stockmarket. These stocks are rapped in theform of a certificate and are sold toclients (like X, Y, Z in our example).This certificate is nothing but aParticipatory Note. Value of these PNsdepends upon the performance of

Participatory Notes

28

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ELDORADO April 2008

(underlying) stocks. So if shares pricesof Reliance are soaring, an equalamount of reaction will be seen in PNs.Holders of PNs will get dividend etc thesame way they get in as stocks.

Why do investors use PNs when theycan directly invest in Indian stockmarket?

• One reason can be that in PNsthe investor ’s name isanonymous. As the PN holdersare offshore clients of FIIsregistered with SEBI, theSEBI can not impose anyrestrictions for disclosure ofinformation of the PN holders.

• Another reason can be costeffectiveness of PNs, as thesesave the transaction costs,record keeping overheads andregulatory complianceoverseas.

• And the most significantreason is that even theinvestors that are notregistered with SEBI (eitherbecause of unwillingness orineligibility) can also invent inIndian stocks through the PNroute.

Over the years, the use of PNs hasincreased from 17 Foreign Institutionalinvestors issuing it in 2005 to over two

dozen funds now. As of August 2007,the notional value of PNs was Rs 3.53lakh crore — about 51.4% of all assetsunder all FIIs present in India.

Management issues

Brokers or FIIs that purchase Indianstocks are registered with SEBI andhence SEBI has all information aboutthem. But SEBI does not have anyinformation about the PN purchasers.And that’s why RBI had sought a banon PNs, because it is difficult toestablish the beneficial ownership or theidentity of the ultimate investor.Moreover due to buying and selling ofPNs among other players in the market,it becomes all the more difficult to tracethe ultimate owner. So a PN holder canbe a money launderer who is notallowed to trade as per law, or acompany which wants to inflate itsshare price, or a terrorist organization.In order to restrict such organizationsfrom investing in the Indian market,SEBI wants to ban PN and inviteinvestors to come directly and registerwith SEBI. So everything is alright tillFIIs or their broker follows KYC(Know Your Customer) norms, butbeyond that everything is opaque as itis not obligatory for the FIIs to disclosetheir client details to the SEBI, unlessasked specifically.

Participatory Notes Crisis of2007

On the 16th of October, 2007, SEBI(Securities & Exchange Board of India)proposed curbs on participatory noteswhich accounted for roughly 50% of FIIinvestment in 2007. SEBI was nothappy with P-Notes because it is notpossible to know who owns theunderlying securities and hedge fundsacting through PNs might thereforecause volatility in the Indian markets.

However the proposals of SEBI werenot clear and this led to a knee-jerkcrash when the markets opened onOctober 17, 2007. Within minutes ofopening trade, the Sensex crashed by1744 points or about 9% of its value -the biggest intra-day fall in Indianstock-markets in absolute terms. Thisled to automatic suspension of trade for1 hour. Finance MinisterP.Chidambaram issued clarifications, inthe meantime, that the government wasnot against FIIs and was notimmediately banning PNs. When themarkets reopened at 10:55 am, theystaged a remarkable comeback andended the day at 18715.82, aftertumbling to a day’s low of 17307.90.

This was, however not the end of thevolatility. Next day i.e on October 18,2007, the Sensex tumbled by 717.43

Finance

“P- Notes are the instruments issued by theregistered FIIs or to overseas investors who wishto invest in Indian stock market withoutregistering themselves with SEBI.”

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29

points — 3.83 per cent — to 17998.39,its second biggest fall. The slidecontinued the next day when the Sensexfell 438.41 points to settle at 17559.98at the end of the week, after touchingthe lowest level of that week at17226.18 .

The SEBI chief, M.Damodaran held anhour long conference on the 22nd ofOctober, 2007 to clear the air on theproposals to curb PNs where heannounced that funds investing throughPNs were most welcome to register asFIIs, whose registration process wouldbe made faster and more steamlined.The markets welcomed theclarifications with an 879-point gain —its biggest single-day surge,onOctober23,2007 thus signalling the endof the PN crisis. SEBI issued the freshrules regarding PNs on the 25th ofOctober, 2007 which said that FIIscannot issue fresh P-Notes and existingexposures were to be wound up within18 months. The Sensex gave a thumbsup the next day i.e on 26th October,2007by re-crossing the 19,000 barrier witha 428 point surge. Then on Monday(October 29, 2007) history was createdwhen the Sensex leaped 734.5 points tocross the hallowed 20,000 mark for thefirst time.

Encounter with lifeTwenty seven years back, I was in senior secondary school. The girl was in Xthstandard in a different school. I fell in love. I tried to express my love to her in somany times but fear gripped me back. A constant pain was roiling up inside mefor not expressing it. Then one day I gathered courage, wrote a little letter andsent it to her through a common friend. This was an incredible step out from atimid boy like me. The result was disastrous. Instead of being impressed shebecame enraged. In no time the letter shattered to hundred pieces and foundplace in dustbin. Later that evening my mother called upon me and scolded mefor such shameful action. I coiled into a shell. I was speechless, just a dumbstruck- not really understanding why she became so enraged.

That night while in bed, sleep was not coming easily, the incident was playingback in my head. Then suddenly something amazed happened in me, for thefirst time I began to feel exhilarated. A huge rush of mental satisfaction welledup in me and surged through my whole being. I discovered, yes I had expressedmy heart and that felt fantastic. I had stretched beyond fear. Though it was veryclumsy but I did it. I had put my heart without demanding a result. I did not givein my heart to get something back. My exhilaration then deepened into a warmbliss. The experience was not about creating relationship with the girl. It wasdeepening my relationship with my own self. I had a deep sleep that night.

Later I did not see that girl much but the experience changed my life for ever.From a mediocre, timid boy I changed into a bright, intelligent student. Mycareer flourished with lots of laurels. Today, when I look back I see that simpleaction had helped me to develop a strong relationship between me and my innerself. The girl was just a character into it.

The dynamics of the relationship of the whole world is just keep putting loveout there, don’t expect a return. We are hurt not when we don’t receive love butwhen we don’t give love. We function most powerfully when we are giving lovewithout expecting any return. It is not about what comes back, it is about whatgoes out. All pains, sufferings will disappear eventually but love will remainstrong for ever.

Participatory Notes

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ELDORADO April 2008

The US dollar – rupee exchange rateis the current hot topic for

discussions amongst economists. The15 per cent (almost) appreciation ofrupee over the last year has given wayto many issues and arguments regardingits effect on the Indian economy and itsdifferent sectors and also its effect onthe labor and job market. All the majorcurrencies across the world havewitnessed a rise in their value vis-à-visthe US dollar. The Canadian dollarappreciated by 23%, euro by 14.7% andthe pound rose by 10.4%.

Appreciation of Indian rupee (whichappreciated by almost 9% betweenJanuary and June in the year 2007) isbeing cited as the result of theincreasing capital inflows and the RBI’seffort to intervene in the increasinginflation rates. But the contradiction isthat the stronger rupee is having gloomyeffect on various sectors especially thelabor intensive industries like leatherand handicrafts based in the tier-II citiesof India. The appreciation of rupee hasbadly hit India’s exports (mostly to theUS), and as a result many organizations’export units have already shut down orreduced their staff considerably.

Textile and Apparel industry

Indian textile industry – which held a

competitive position in the apparel andtextile export to US has been adverselyaffected by the appreciation in the valueof rupee. The industry has witnessed adecline in the domestic textile andapparel export to US in the first half ofyear 2007. Although the total importsby the US witnessed an overall increaseby 5.7% over the last year, exports byIndian textile and apparel saw a declineby 0.21 %. The industry which wasalready facing sluggish apparel sales inthe US has been hit by the strengtheningposition of rupee against the US dollar.The worst affected is the labor force ofthe industry. Approximately 10 lakhworkers are feared to loose their jobsdue to the current scenario of the risingvalue of rupee. Also, as many as 80 lakhworkers are expected to be indirectlyaffected by the prevalent situation. Thefear of loosing their jobs is gripping theentire industry, right from theorganization owners and the small scaleworkers. Many small scale units in tier– II cities have already faced the bruntand have increased the unemploymentin the sector.

IT Industry

India has emerged as the most preferredand low cost destination for outsourcingthe IT products and services. India has

Grey Area of RisingRupee-Unemployment

MITALI GOSWAMIPGDM-FT (2007-09)

the advantage of providing services atlow-cost because of the availability ofthe engineers and the developers. Thelast year has seen the Indian rupeestrengthening against the dollar, theaverage salary in the IT industry hasrisen considerably and, the EastEuropean and other Asian countries likeJapan are also giving tough competitionto the Indian IT industry. The short termimpact of all these situations canalready be seen in the industry with thediminishing profits of the industry.Also, the appreciation of rupee has ledto decreasing number of projects andassignments. In recent years, the IndianIT industry has grown at a very fast rate.Even if the sector maintains the growthrate, the profit margins of Indian playerswill only get lesser because theappreciation of rupee is eating away thepurchasing power of dollar. The lesserprofits would also affect the investmentin training and development ofprofessionals, the infrastructure and thecommon practices of the industryrequiring heavy investment. The worsteffected will be the small players in theindustry as rising costs and salaries anddecreasing profits will be difficult forthem to manage. All these factors canhave adverse effect on the labor forceof the IT industry.

Finance

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31

Leather industry

The same is the case with the Indianleather and handicrafts industries.Kanpur and the adjoining areas is thehub of India’s leather trade and USexports account for nearly half of theregion’s leather trade revenues. The risein the value of rupee has eroded almostall the profit margins of the exportersmade from US shipments. Most of thecompanies have stopped taking freshorders and decreased the number ofemployees as well as the number ofshifts of the remaining employees.Wilting under the financial debts, manyunits have already have shut theirbusiness and with no new assignmentscoming their way, the remainingfunctional units are also almost out ofbusiness. The Brassware exportbusiness in UP and the handicraftsindustry are also loosing their businessto countries like Sri Lanka, Pakistan,Bangladesh and even China, which areproviding lower costs than India to theimporters in US. The large agriculturaland industrial base of India is beingbadly affected by the rupeeappreciation. The extent and the long-term effects of the damage are yet to beseen. If the rise in the value of the rupeecontinuous, it will completely erode ourcompetitiveness against countries likeBangladesh or China.

Management quotes“Good management is the art of making problems so interesting and theirsolutions so constructive that everyone wants to get to work and deal withthem.”

“Management is efficiency in climbing the ladder of success; leadershipdetermines whether the ladder is leaning against the right wall.”

“The conventional definition of management is getting work done throughpeople, but real management is developing people through work.”

“Knowledge has to be improved, challenged, and increased constantly, or itvanishes.”

“The most important thing in communication is to hear what isn’t being said.”

“No institution can possibly survive if it needs geniuses or supermen to manageit. It must be organized in such a way as to be able to get along under aleadership composed of average human beings.”

“Unless commitment is made, there are only promises and hopes; but no plans.”

Successful people aren’t born that way. They become successful by establishingthe habit of doing things unsuccessful people don’t like to do. The successfulpeople don’t always like these things themselves; they just get on and dothem.”

Success means having the courage, the determination, and the will to becomethe person you believe you were meant to be”

Life’s real failure is when you do not realize how close you were to successwhen you gave up.”

You know you’re in love when you can’t fall asleep because reality is finallybetter than your dreams.”

Grey Area of Rising Rupee-Unemployment

32

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ELDORADO April 2008

Warren Buffett, “the Sage ofOmaha” is not called the

World’s Greatest Investor for nothing.He has consistently achieved abovemarket index returns on his investmentssince 1977.He controls investmentgroup Berkshire Hathaway, and is well-known for both his blunt assessmentsof financial markets and the high returnshe delivers to shareholders. A singleshare of Berkshire Hathaway stock sellsfor upward of $90,000. His investmentmethods are very different from thetypical cell phone wielding, fast takingWall Street pundit’s methodologies.

Buffett’s Philosophy

Warren Buffett descends from theBenjamin Graham School of valueinvesting. Value investors look forsecurities with prices that areunjustifiably low based on their intrinsicworth. Like bargain hunters, valueinvestors seek products that arebeneficial and of high quality butunderpriced. In other words, the valueinvestor searches for stocks that he orshe believes are undervalued by themarket. Like the bargain hunter, thevalue investor tries to find those itemsthat are valuable but not recognized assuch by the majority of other buyers.

Buy a Business:

Warren Buffett takes this value

investing approach to another level.Many value investors aren’t supportersof the efficient market hypothesis, butthey do trust that the market willeventually start to favor those qualitystocks that were, for a time,undervalued. Buffett, however, doesn’tthink in these terms. He isn’t concernedwith the supply and demand intricaciesof the stock market. In fact, he’s notreally concerned with the activities ofthe stock market at all. This is theimplication this paraphrase of hisfamous quote: “In the short term themarket is a popularity contest; in thelong term it is a weighing machine”.

He chooses stocks solely on the basisof their overall potential as a company, he looks at each as a whole. Holdingthese stocks as a long-term play, Buffettseeks not capital gain but ownership inquality companies extremely capable ofgenerating earnings. When Buffettinvests in a company, he isn’t concernedwith whether the market will eventuallyrecognize its worth; he is concernedwith how well that company can makemoney as a business.

Thus the most important differencebetween his approach and the typicalspeculator is his emphasis on ownershipof a business. You do not buy stocks/shares, you buy a company. This turnsout to be a very important point. Any

The World’s GreatestInvestor

NIDHI JAINPGDM-FT (2007-09)

individual who buys shares, and viewsit as the end, completely misses thecontext of the investment. On the otherhand, an individual who views thatinvestment in stock as an incrementalprocesses of buying the business,examines the full context of theinvestment and is keen to observebusiness fundamentals. It is thisdifference that determines the resultsone achieves in the money market.

The Basic Tenets

Buffet’s methodology can besummarized by highlighting the basictenets of investment. These tenets fallinto 4 groups:

Business Tenets: These are the basiccharacteristics of the business itself. Thebusiness tenets focus on how thebusiness operates. They are:

1. Is the business simple andunderstandable?

2. Does the business have a consistentoperating history?

3. Does the business have favorablelong term prospects?

Management Tenets: These refer tothe quality of management. Theyinclude:

1. Is the management rational? :Rationality here refers to theproclivity to make decisions in the

Finance

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33

best interest of the shareholders andbased on available information.This boils down to allocation of thecompany’s capital which, overtime, determines shareholdervalue. The two possible decisionsto be made when allocatingcompany earnings are:

• Reinvest in the business

• Return money to shareholders

The choice taken when allocatingcompany earnings should be the onethat ensures that an above averagereturn on equity can be achieved.Management that does not behave insuch a manner cannot be consideredrational.

2. Is management candid withshareholders? : Does managementadmit its faults publicly or is itsecretive about problems thefailures of the company as a whole?

3. Does management resist theinstitutional imperative? : Oncea large company in an industrybegins to fail, it is often the casethat a number of other companiesin the same industry follow suit.This is not because they allconspire to fail but because ofmanagement’s inability to resist thetemptation to follow the herd ofsheep as they rush to the slaughterhouse. Management must be

willing to be contrarian andiconoclastic. They must be able tothink independently of fads ortrends and trust their ownjudgment.

Financial Tenets: These refer to themathematical and accounting aspects ofthe business. Warren Buffett instructsus to resist the usage of weekly or evenmonthly averages. The only usefulaverages for a value investor are forperiods spanning four or five years. Thepoints to consider are:

1. Focus on the return on equity, notearnings per share

2. Calculate owner earnings to get atrue reflection of value

3. Look for companies with highprofit margins. The key to this ismaintaining low costs.

4. The company must generate $1 ofvalue for every dollar of retainedearnings. If retained earnings areinvested in the company andproduce above-average return, theproof will be a proportionallygreater rise in the company’smarket value.

Value Tenets: Warren Buffett makesthe following distinction:

Price is what you pay. Value is what youget.

This is the essence of the value tenets.Contrary to popular opinion, the stockmarket is not efficient. The result of thisinefficiency is that the market price ofa company does not instantaneouslyreflect the value of a company given allavailable information. The stock marketestablishes price. The investordetermines value after weighing all theknown information about thecompany’s business, management andfinancial traits. Price and value are notnecessarily equal.

Value Investing: Value investingtherefore involves rational decisionmaking based on:

1. Determine the value of thebusiness.

2. Difference between price andvalue. Buy low (at a discount) ordon’t buy at all.

Buffett’s tenets constitute a foundationin value investing, which may be opento adaptation and re-interpretationgoing forward. It is an open question asto the extent to which these tenetsrequire modification in light of a futurewhere consistent operating histories areharder to find, intangibles play a greaterrole in franchise value and the blurringof industries’ boundaries makes deepbusiness analysis more difficult.

The World’s Greatest Investor

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ELDORADO April 2008

The American sub-prime mortgagecrisis is not new. It has been on the

boil since mid 2006. Presently what weare seeing is that the whole issue isunraveling at its pace though it feels likewe were caught unawares. Analysts didsound the warning bells but in ourexuberance we decided to ignore it andthought that it’s going to be alright inthe end.

The sub-prime floating rate mortgage,given to people who have a chequeredcredit history, is far more expensive thatthe prime mortgage. Presently we areseeing a lot of defaults in the sub-primemortgages. People are unable to servicetheir debts; they are now unable to makegood their monthly commitments andfacing foreclosures.

The present picture of the US economyis not as expected sometime back. Thereis economic slowdown due to whichmany people have been laid off or paycuts have been initiated. Home ownersfacing this prospect are stuck withexpensive loans with little re-financingcapability to pay off the debts. To addto the woes of home owners, the valueof their properties has depreciated.Property prices have depreciatedbecause as of now the supply of homesis robust but the demand for them isshrinking. This is partly due to themoney supply drying up and also

because people with plans to buy ahome are waiting and watching the sub-prime crisis and not rushing their plansto buy a new home.

The housing industry which shares animportant place in benchmarkingeconomic progress is showing signs thatpeople can afford homes. Buying ahome is a long term financialcommitment and when more people doit, it’s a sign that the people have jobsand can afford it and are feeling secureabout their future. Presently, due to thesub-prime issue what we see is aslowdown in building newer homes andalso lenders are not as enthusiastic todisburse loans without proper checks oncreditworthiness.

The inability to service the debt byhomeowners is leading to the homesbeing taken over by the housing financeproviders. Properties repossessed arenow on the market and their prices arelower than before and existing homeowners are unable to sell their homesat previously purchased prices andmove to cheaper places. Consequentlyhomeowners with enough funds are notable to prepay their mortgage due toprepayment penalties attached to thehome loan. They have been confusedby the terms of their loan or misled byirresponsible lenders.

The Sub-Prime Effect

SONAL AHUJAPGDM-FT (2007-09)

What now needs to be seen is that howmany of the repossessed homes areattracting new buyers. If there is amarket for them, slowly we will see thedemand for new homes rising but if theresponse to repossessed homes is goingto be muted then we will see a furtherdrop in property prices and financecompanies will have huge write-offswhich will surely affect their profits andmay even force a company to file forbankruptcy.

The sub-prime crisis and a marginalslowdown in the US economy are notso large in the macro economic picture.Its effects though are reflected onconsumer sentiment in an exponentialfashion. People are wary and spend lesson all things across the board and tendto hold on to their cash. This contributesto further slowdown in the economy.The slowdown affects the profitabilityof the companies individually which isthen reflected in their stock prices andthe enthusiasm in the stock market goesdown. These housing loans have beenmade into bond tranches by the lendersand sold to institutions. Most of thesebonds were high risk high return innature. The bond buyers saw the returnsbut assessment of the risk was not donein depth. The borrower defaulted inrepaying the monthly loan paymentsand that in turn affected the quality of

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35

the bond paper floated as the bondswould not generate regular interest andthe paper itself becomes worthless insuch an instance.

The question however is, how issomething that is happening in theproperty market in the US affecting therest of the world?

The US is the biggest trading partnerof a lot of countries especially the highgrowth emerging economies and beingthe biggest consumer, contributes asignificant amount in terms of revenueto these countries. A marginal economicslowdown in the US means a downwardspiral in the outlook for the financialfuture of rest of the world. Theslowdown causes a crunch of moneysupply and makes the Americanscautious about their buying andspending habits. As they are buying lessit then affects the supplying countriesbecause the US is a large scale buyer ofgoods and services from theseeconomies.

As the US buys less and saves more thecapacities of the countries having largebusiness relations with the US are notutilized to the optimum and that in turnaffects profitability of companies andtheir stock prices and the stock marketsof the respective countries they areprimarily listed in. The other economies

may try to compensate lost businessfrom the US by trying to sell moreamong themselves and in their ownlocal markets but the demand goes upslowly and in the mean time they haveto guard against a possible slowdownin their own economic growth rates. Theslowdown in US affects stockexchanges, profits and financial futuresof all from USA and Europe to India,China, Singapore, Taiwan, South Koreaand Japan.

This slowdown in the US is causingmore pains for the emerging economiesas they are growing faster than thedeveloped economies and this isaffecting the foreign currency exchangerates. The weaker currencies of theemerging economies are appreciatingagainst the US Dollar and also a basketof other currencies. This causes exportoriented units (EOU) to generate lesserinflow of foreign currency for the sameamount of exports.

Globalization has ensured that if thereare problems in one part of the world,its effects are felt everywhere. We havebecome more integrated and if peoplelose jobs in US; then in other countriestoo, that produce goods and services forUS, we see jobs being lost. We areseeing a new world where events areno longer isolated.

Shantayanan Devarajan, WorldBank Chief Economist for SouthAsia believes that the currentsubprime mortgage crisis in theUnited States will not seriouslyimpact South Asian countries. Hefeels that the impact will be mildbecause of the structure of theregion’s trade and financial flows,and partly because of compensatingeffects.

Devarajan attributes three factorsthat work well for the South Asiancountries viz. lack of exposure toU.S. mortgage securities;availability of liquidity in domesticmarkets; and the possibility thatlower capital inflows could helpcountries such as India withmacroeconomic management.

On the other hand, Devarajanexpects that a slowdown of theUnited States’ economic growthwill moderate the increase in pricesof oil and other commodity prices,which will have a favorable impacton South Asia. Since all SouthAsian countries are net importersof these commodities, such aslowdown will provide some reliefin their balance-of-payments.

Source: www.worldbank.org

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ELDORADO April 2008

The India Retail Industry is thelargest among all the industries,

accounting for over 10 per cent of thecountry’s GDP and around 8 per centof the employment. The Retail Industryin India has come forth as one of themost dynamic and fast paced industrieswith several players entering themarket. But all of them have not yettasted success because of the heavyinitial investments that are required tobreak even with other companies andcompete with them. The India RetailIndustry is gradually inching its way tobe the next boom industry.

The total concept and idea of shoppinghas undergone an attention drawingchange in terms of format and consumerbuying behavior, ushering in arevolution in shopping in India. Modernretailing has entered into the Retailmarket in India as is observed in theform of bustling shopping centers,multi-storied malls and the hugecomplexes that offer shopping,entertainment and food, all under oneroof.

A large young working population withmedian age of 24 years, nuclear familiesin urban areas, along with increasingworking women population andemerging opportunities in the servicessector are going to be the key factors in

the growth of the organized retail sectorin India. The growth pattern inorganized retailing and in theconsumption made by the Indianpopulation will follow a rising graphhelping the newer businessmen to enterthe Indian Retail industry.

In India the vast middle class and itsalmost untapped retail industry are thekey attractive forces for global retailgiants wanting to enter into newermarkets, which in turn will help theIndia Retail Industry to grow faster.Modern retail in India could be worthUS$ 175-200 billion by 2016. The foodretail industry in India dominates theshopping basket. The mobile phoneretail industry in India is already a US$16.7 billion business, growing at over20 per cent per year. The future of thesector looks promising with thegrowing of the market, with thegovernment policies becoming morefavorable and the emergingtechnologies facilitating operations.

RETAILING FORMAT ININDIA

Malls:

It is the largest form of organizedretailing today. Malls are located mainlyin metro cities, in proximity to urban

Indian Retail industry

ABHAY GUPTAPGDBM-FT(2007-09)

outskirts. Mall area ranges from 60,000sq ft to 7, 00,000 sq ft and above. Theylend an ideal shopping experience withan amalgamation of product, serviceand entertainment, all under a commonroof. Examples include Shoppers Stop,Pyramid and Pantaloons, etc

Discount Stores:

As the name suggests, discount storesor factory outlets, offer discounts on themaximum retail price (MRP), throughselling in bulk reaching economies ofscale or excess stock left over at theseason. The product category can rangefrom a variety of perishable/ non-perishable goods.

Departmental Stores:

Large stores ranging from 20000-50000sq. ft, catering to a variety of consumerneeds. These can be further classifiedinto localized departments such asclothing, toys, home, groceries, etcDepartmental Stores are expected totake over the apparel business fromexclusive brand showrooms. Amongthese, the biggest success is K Raheja’sShoppers Stop, which started inMumbai and now has more than sevenlarge stores (over 30,000 sq. ft) acrossIndia and even has its own in store brandfor clothes called Stop.

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37

Hypermarts/Supermarkets:

Large self-service outlets, catering tovaried shopper needs are termed asSupermarkets. These are located in ornear residential high streets. Thesestores today contribute to 30% of allfood & grocery organized retail sales.Super Markets can further be classifiedin to mini supermarkets typically 1,000sq ft to 2,000 sq ft and largesupermarkets ranging from of 3,500 sqft to 5,000 sq ft. having a strong focuson food & grocery and personal sales.

Convenience Stores:

These are relatively small stores 400-2,000 sq. feet located near residentialareas. They stock a limited range ofhigh-turnover convenience productsand are usually open for extendedperiods during the day, seven days aweek. Prices are slightly higher due tothe convenience premium.

MBO’s:

Multi Brand outlets, also known asCategory Killers, offer several brandsacross a single product category. Theseusually do well in busy market placesand Metros.

CHALLENGES &OPPORTUNITIES

Retailing has seen such a transformationover the past decade that its verydefinition has undergone a sea change.No longer can a manufacturer rely onsales to take place by ensuring mereavailability of his product. Today,retailing is about so much more thanmere merchandising.

For manufacturers and serviceproviders the emerging opportunities inurban markets seem to lie in capturingand delivering better value to thecustomers through retail. In ChennaiCavinKare’s LimeLite, Marico’s KayaSkin Clinic and Apollo Hospital’sApollo Pharmacies are examples, toname a few, where manufacturers/service providers combine their ownmanufactured products and serviceswith those of others to generate valuehitherto unknown. The last mile connectseems to be increasingly lively andexperiential. Also, manufacturers andservice providers face an explodingrural market yet only marginally tappeddue to difficulties in rural retailing.Only innovative concepts and modelsmay survive the test of time andinvestments.

However, manufacturers and serviceproviders will also increasingly face a

host of specialist retailers, who arecharacterized by use of modernmanagement techniques, backed withseemingly unlimited financialresources. Organized retail appearsinevitable.

Challenges to the manufacturers andservice providers would abound whenmarket power shifts to organized retail.

CONCLUSION

The retail sector has played aphenomenal role throughout the worldin increasing productivity of consumergoods and services. It is also the secondlargest industry in US in terms ofnumbers of employees andestablishments. There is no denying thefact that most of the developedeconomies are very much relying ontheir retail sector as a locomotive ofgrowth. The India Retail Industry is thelargest among all the industries,accounting for over 10 per cent of thecountry’s GDP and around 8 per centof the employment. The Retail Industryin India has come forth as one of themost dynamic and fast paced industrieswith several players entering themarket. But all of them have not yettasted success because of the heavyinitial investments that are required tobreak even with other companies andcompete with them.

Indian Retail industry

38

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ELDORADO April 2008

In a very short span of time, the BPOsector emerged as the biggest

employers in India. Youngsters opted towork in call centers in search of fastbucks and even a faster life, but thescenario is changing Uncertainties injob security, lack of growth opportunityin career, coupled with stringentworking conditions- all these make BPOjobs less sought after than what it usedto be not so long ago. Young generationis now making careers moves and retailwould be one of the biggest employersin the years to come.

Various studies had revealed that theorganized retail sector has grown from2% to 3.5% today. At present, the sizeof India’s retail market is estimated tobe Rs.9300 billion of which, organizedretail is Rs.300 billion. Organised retailsector in India is expected to grow atthe rate of 30% over the next 5 years.

With the boom in the retail industry,experts however feel that this sector iscurrently experiencing shortage ofworkforce to an extent of 25-30%.Currently employing 20-25% educatedIndians, the industry has the potentialto employ over 2 billion people in thenext 5 years. With the big corporatehouses taking active part in this boom,a career in the retail sector holds highpotential and promises high growth.

Career Options in Retail

Malls and big stores have revolutionizedthe whole retail sector as it is more

organized and efficient. The revolutionis not confined to metros. It has shiftedto small towns and one can find storeslike Big Bazaar and Shopper’s Stop inthese small towns. In this scenario, thedemand for retail professionals is goingto be phenomenal and a career is goingto be lucrative one. There are lots ofcareer options in retail industry whichare diverse from most other industries.They are:

Supply chain and logistics distributorand warehouse manager: This isamongst the most vital areas oforganized retailing and normally is thedifferentiator between modern chainsespecially in top perishable goodsretailing.

Store Manager: He is solely respon-sible for managing an individual store.Most of the store managers take on theduty of running the day to dayoperations of the day.

Retail buyers and merchandiser:Their role is very significant since it isresponsible for selecting themerchandise for a store and physicallybuying the goods.

Retail Manager: Apart from unders-tanding the mindset, habits and lifestyleof the customers, the retail managerplaces orders for new stock, managesthe supply chain and analyses recordsfor all financial transactions of his store.

Retail YourCareer

“Retail sector in our country is set for a big boom, especially after the announcement of huge investments by top Indianand International companies. There are already about 70 big malls in the country and in the next couple of years, at least200 malls are likely to be in operation across the country.”

ANJURANI BARALPGDBM-FT(2007-09)

Customer Relationship Manager:Today’s job demands a good relationwith your customer, so customerrelationship manager highly deservesoption in the retail segment.

Who can optThere are no defined standards for theentry in the retail sector. Graduates fromany field can enter the retail sector butpreference is given to one who has donea specialized course in the field. MBAor equivalent degree holders or peoplepursuing post graduation in retailmanagement can make a career forthemselves in this sector. In short, retailas a career promises a complete,enriching, working experience withprofitable inputs.

Skills required:Retailing is not just selling or fillingshelves but is fast moving andconstantly changing. Being a peopleoriented business, it is imperative thatthose interested should have thefollowing skills:

(1) Commercial skills(2) Self Confidence(3) Flexibility(4) Communication skills(5) Teamwork and leadership

qualities(6) Analytical and problem

solving skill(7) Contingency based decision

making capabilities(8) Creativity

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Introduction

In a globalized and liberalizedenvironment, the marketplace hasundergone a major change. The rulesof the competitive game have beenaltered. It is therefore essential that inorder to maintain their competitive edgecompanies need to innovate. Theseinnovations can be simple ones just themodification of the already existingproducts or categories or they could bethe breakthrough innovations which arenew to the world.

Bringing these new innovative productsto the market require different type ofcapabilities and strategies.

Theoretical framework

Changing customer needs and tastes,increased competition from domesticand foreign companies & emergence ofnew technologies have changed thecompetitive scenario. Most of thecompanies focus on incrementalinnovation but there are some disruptiveinnovations, which change the rules ofthe competition. But the conventionalwisdom says that it is harder to sellinnovative products. The major reasonsfor it being the increase in theuncertainty, risk and difficulty indecision making for the customer. To

sustain in the present environmentcompanies need to innovate.

It is difficult to market innovations dueto the fact that the market economycraves for equilibrium. Equilibriumaccording to John Nash is a situationwhere every player in the marketbelieves that he is making the bestpossible choice and every other playeris also doing the same. It lends stabilityto the player expectations, validatestheir choices and re-enforces theirbehavior. When an innovation enters themarket, it upsets the players’expectations and introduces uncertaintyin decisions. Hostility to innovations isstronger from the market side when theplayers are inter connected. In anetwork market, each participant willswitch to a new product only if hebelieves that others will do the same.In recent times, markets have becomenetworks because of improvedcommunications, spread of internet andbusinesses relying on global market forproducts and resources. Networkmarkets allow for rapid diffusion ofideas but also erect barriers to theadoption of innovations – mainlybecause of inter dependency betweenplayers. Once enough players in anetwork market decide to switch to anew product, other player’s motivation

Strategies for thelaunching of

Innovative ProductsBHAVNEET KAUR

Assistant Professor, Deptt of Management

to do so becomes stronger. Beyond thatthreshold, network becomes a friend toinnovations rather than a foe.(Chakarvorti, 2004)

Marketing of innovative products:

The first challenge for marketers istrying to get people evaluate, choose,try, buy and use the product. In order toget the product-adopted in marketplace,the marketer has to influence theirdecision process. The key infact lies inreducing the time it takes for thecustomer to decide on your product ormaking your product the easier one todecide upon. In case of innovativeproducts, the investment in time andeffort required to take decision is higherand hence the task becomes all the moredifficult. So while marketing innovativeproducts, every element of marketingprogram works cohesively in asynchronized manner with customerdecision process. A carefully plannedand designed Marketing strategy isimportant to expedite the consumerdecision process or influencing peopleto make favorable decisions.

Innovative products/services-casestudies - the case studies given belowwould highlight the importance ofmarketing strategy in promotinginnovative products.

Strategies for the launching of Innovative Products

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ELDORADO April 2008

CASE-1

E-commerce initiative in rural areas:ITC e-chaupal

ITC e-chaupal is one of the pioneerswho tried to empower the farmers withknowledge and strategic options viainternets as to procure agricultureproducts from farmers for exportpurposes in efficient manner. It enabledfarmers to sell their produce muchconveniently and at much better pricesby creating a win-win situation for boththe parties.

ITC one of India’s leading corporatehouses found that in 2002, agriculturebusiness became a major star performerin its portfolio with internationalbusiness division turning to the 2nd

largest exporter in business. Companywas not contended with the profits andbelieved the could be raised by solvingthe problems like: Lack of sufficientcontrol over supply chain of variousproducts, lack of infrastructure forstorage handling and transportation &middlemen involved who conceal theinformation from farmer and chalk outhigher margins for themselves causingdelay and deterioration in product’squality. ITC being at the end ofdistribution network ended up payingeach intermediary at the mandi and that

too for poor quality product. Hence thecompany identified the losers in thechain i.e. ITC itself and farmers andhence conceived the idea to re-engineerthe supply chain.

The strategy adopted by firm in settingup of e-chaupal- the basic idea was toequip the chaupal with PC’s and provideInternet connectivity. The project waslaunched in MP in June 2000 for Soyafarmers with websitewww.soyachaupal.com. Processing andcollection centers were opened as hubsaround which e-chaupals were built.Sanchalak was appointed to supervise,coordinate and were trained to helpcheck farmers with the prevailing pricesof crops. E-chaupal gathered all theinformation for farmer’s daily mandiprices, global prices, weather reportsetc. middle men who lost due to thismodel were appointed as samayojaksand were responsible for identifyingsanchalak, documenting the relevantinformation from mandis and sourcingthe products from remote villages. Byremoving the intermediaries the qualityand quantity of procured productsincreased while the cost to companycame down and resulted in profits to thecompany. (Srinivas,2004,Padmanabhan,2004, Dutta,2004)

CASE-2

BT cotton in India- an effort byMonsanto-Mahyco biotech ltd.

Mahyco- a home grown company withthe partnership of Monsanto takes theonus of igniting the spark and theresponsibility of changing the face ofagribiotech industry. Cotton is animportant cash crop in India and playsa significant role in the nationaleconomy. As an industrial crop, itsupports millions of people throughcultivation, processing and trade andcontributes Rs.360 billion (US$8billion) to the export income.cottoncrop in India faces losses due to the anumber of varities of pests. The genesourced from a bacteriea whichproduces a protein toxic to bollwormprovides resistance to cotton plants andreduces the need for chemicalinsecticides. This cotton variety iscalled genetically modified /BT cotton.

Monsanto is operating in India since1949 & is a market leader in agriculturalchemicals. As per regulatory procedure,Mahyco an Indian company operatingsince 1964 in the area of plant geneticresearch and production of qualityhybrid seeds sent its application to Deptof Biotechnology (DBT), Govt of India,in March 1995 seeking permission for

Guru Corner

“ITC’s success lied in re-engineeing the processof supply chain and increased the profit marginsfor farmers as well as the company, thus reducingthe role of intermediaries.”

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41

introducing this technology. Onobtaining approval, Mahyco received100gms of Bt-cotton seeds containingthe Bollgard Bt gene, from Monsanto,USA, in 1996. These seeds were firsttested in India under greenhouses forgermination, and their efficacy againstthe Indian cotton bollworms. Some ofthe conventional hybrids of cotton wereconverted to BT by inserting the gene.

In 1998, Mahyco- Monsanto tied up. In1998, the first field trials were permittedby Indian dept. of biotechnology’sreview committee on geneticmanipulation. Then there were newsthat trials are being carried out byMonsanto on Bt-cotton withoutpermission of regional governments andwithout consent of local communities.

Last month of the year, farmers fromsouthern states of Karnataka burntdown the field where Bt cotton wastested by Monsanto-mahyco. Theoperation cremate Monsanto waslaunched on the grounds of deceptionby the farmer of experimental whoclaimed that the fact was dubiouslyhidden that the seeds were geneticallymodified. According to critics, this wasa procedural irregularity. MMB tookpermission from Review Committee,for field trials but the company wassupposed to take permission from

genetic engineering approvalcommittee. Thus due to the ambiguityin the roles and duties of thegovernment, Mahyco was in trouble.The illegality of the field trials waschallenged in supreme court.

Again in may, 2000, Mahyco askedgenetic engineering approvalcommittee for the release of large scalecommercial field trials and hybrid seedproduction of indigenously developedBT cotton hybrids and was grantedpermission for the same. AndDepartment of biotechnology made acommittee to independently monitorand evaluate large scale field trials.GEAC extended the field trials byanother year. Mahyco have complainedabout delays in clearance of their Bt-cotton varieties, even though theyadhered to all the standards required andrepeated field trials.Meanwhile, theillegal sale of Bt-cotton last year byanother Indian company,NavbharatSeeds (Ahmedabad), without anyclearance went unnoticed there startedanother round of difficulties for thistechnology in agriculture as well asMahyco when in oct, 2001, Mahycodiscovered commercial BT farming inGujrat. Again various NGO’s startedspreading a bad sentiment abouttechnology . This controversy settled

when Indian council of agricultureresearch submitted a positive report toministry of environment on field trialsmarch 25, 2002, GEAC approve the BTcotton. Thus due to the vigorous effortsof Mahyco, technology was givenchance to prove itself for the first time.MMB gave free pesticides to farmersin its first year of commercialization. Italso promoted BT throughadvertisements showing farmersclaiming to have got good results fromgrowing Bt cotton. There were manybelow the line communicationsundertaken like supplying data topublish a scientific paper (by Qaim andZilberman), which reported an 87%increase in yield with Monsanto’s BtCotton. & In response to the mixedreaction for the first year’s launch ofBt cotton crop, MMB commissionedAC Nielsen to study the benefits of BTcotton (2003). A nationwide surveycarried out in 2003 indicated that theBt-cotton growers in India were able toobtain , on an average, a yield increaseby about 29% due to effective controlof bollworms, a reduction in chemicalsprays by 60% and an increase in netprofit by 78% as compared to their non-Bt counterparts. In 2005, transgeniccotton was commercially cultivated inthe North for the first time. In 2006(Mahyco), in its effort to promote

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ELDORADO April 2008

private-public sector partnership inbiotech research in the country.Mahyco, involved in the developmentof Bt Brinjal, a vegetable delicacycommon India, Mahyco has sub-licensed the technology to Tamil NaduAgricultural University, The Universityof Agricultural Sciences, Dharwad andThe Indian Institute of VegetableResearch, Varanasi Now the area underBT cotton has expanded tremendouslyindicating its adoption in Indian farms.

The role of marketing strategy in abovementioned cases can be summed aspersuading the government to changethe rules in favor of free market system,direct marketing and healthycompetition, determining the networkhubs like middlemen, carefullyconstructing the new equilibrium byfamiliarizing the farmers in villages ofrural areas with newer concepts,customizing the model/productaccording to socio-economic criteria &giving proper incentives to stakeholdersto switch.

Thus major strategies for the launch ofinnovations are-

Understanding the markets- Everymarket generates economies to scale.The players have to understand wherelies the status quo or equilibrium. In

above quoted cases both the playersknew the pulse of the market. Thespecifics, the problems and the players.

Target the end game- Innovator shouldguess the new equilibrium participantswill create in response to innovators’strategy. Moreover an innovator needsto be clear about the objectives he wantsto achieve/ or the position he aspires tohold. Monsanto could visualize theposition of a gene licensor to otherbreeders. And ITC could foresee a hugemarket based on reverse trading model.

Determining the network hubs/createnew hubs- as the network becomesbigger, interconnection between theplayers tend to cluster around the fewcalled as network hubs. If innovator canally with the hubs, he can gain accessto large number of participants andchange their behavior. But in case if themagnitude of the innovation is largeenough, a marketer or innovator has tocreate new hubs. These hubs denotenetworks, processes, people orinfrastructure. Like problem ofconnectivity due to lack of telephonelines, ITC upgraded the same by usingRNS kits. On the same lines theAgricultural Produce Committee Actprohibited a company from purchasingcertain commodities like coffee, wheat,soyabean from any other source than

govt. designated mandis. Itc persuadedthe govt to change the rules in favor offree market system, direct marketingand healthy competition. EvenMonsanto did lobbying withgovernment departments eg. Jan 5,2001 a 10 member delegationcomprising of U.S judges and scientistsmeet Supreme Court chief justice A.S.anand in New Delhi. to impress uponthe judicial fraternity the benefits ofbiotechnology.

◆ Offer the switching Incentive-Innovator has to convince theplayers that there choices ought tobe different because the choices ofother participants have changed butthe innovator should focus not onlythe early adaptors but alsoemphasize on the permanentchange in the behavior of otherparties otherwise the market willsnap back to the self re-enforcingold status quo. Innovator shouldfocus on three groups: The playersthat add to his benefit, The playersthat acts as channels to adopters,and The adopters.

Familiarizing the farmers in ruralareas with computers: farmers werehesitant but not resistant to the useof computers and ITC could trainthe first group of sanchalaks in only

“Innovators should focus not only on the earlyadopters but also emphasize on the permanentchange in the behavior.”

Guru Corner

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43

two hours. Use of videos of farmersusing computers were shown andsanchalaks provided a great help inretrieving info for those whocouldn’t read. Even Monsantomade a lot of efforts such as ACNeilson survey, formaladvertisements by roping inministers and film actors as well asPR activities to convince farmersas well as NGOs in favor of BTcotton.

◆ Preserve Flexibility- Innovatordesigns his strategy on the basis ofhis future expectations and hencethe decisions are uncertain. Heneeds to be flexible to his plans.Sometimes companies makedecisions that involve highinvestments but they make pre-emptive bets. At other times itmight be wiser to delay thedecisions until specific informationis available. (Mazursky,Horowitz & Levav, 2003,Chakravorti, 2004) like ITCCustomizing the model accordingto product and socio-economiccriteria; having succeeded insoyabean which was a small partof itc’s agri-business portfolio, itcexpanded its e-chaupal network todifferent crops. The company

realized that value chains differfrom one crop to anotherdepending upon type of commodityand the socio economic strata itbelong to. Thus in dec 2000,company launched up a website,”plantersnet” for coffee planters inKarnataka. Here ITC has to rely ontpl’s like abn amro to supplyupdates on regular basis as thevalue chain for strong, efficient andinfo involved was moresophisticated. For shrimp farmersITC launched Aqua chaupal in APin Feb. 2001. Monsanto also wentfor more crops as brinjal

The point to target for marketingstrategy is to design the mix andpromote the product in such a mannerso as to gain the advertising anddistribution support. Powerfulmarketing research tools back this step.The technology might be very strongbut unless it is made sellable it can’tachieve the desired success. A carefullydesigned marketing strategy would notonly speed up the process of diffusionof innovations but also help in forminga strong market by- Selecting targetmarkets and customers, developing andimplementing a marketing strategy,conveying a product’s value propositionto customers, positioning and

differentiating one’s products andservices from the competition, devisinga marketing response to shiftingcustomer needs, understanding thenature of technological discontinuitiesand their impact on markets, strategyfor crossing the chasm into themainstream market, how to target a veryspecific, strategic niche market whereyou can dominate from the outset, howto force competitors out of the marketniche, using the niche as the base forfuture operations, winning overpragmatist buyers in advance of broadmarket acceptance, focusing anoverabundance of support into aconfined market niche, developing asolid base of references & creating wordof mouth.

Bibliography• Business Standard, Biotech

sector seeks tax sops forpatented goods. February19,2003.

• Chakravorti, Bhaskar, TheNew rules for bringinginnovations to Market.Harvard Business Review,March 2004, Page 59-67.

• Business Standard, Crackingthe Bio-technology riddle.April 23rd 2003.

“ A carefully designed marketing strategy wouldnot only speed up the process of diffucion ofinnovations but also help in forming a strongmarket.”

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ELDORADO April 2008

We have reasons to be boastful – anear 9% rate of growth, a

booming SENSEX, a steady rise inforeign reserves, a near launching of theworld’s cheapest car, telecom servicesreaching the country inroads ataffordable rates – above all, the worldis taking interest in us. But along sidewe have landed ourselves bang in themiddle of an ecological crisis. Theforest cover is receding, the air andwaters are getting poisonous, soil isgetting eroded, many plant and animalspecies are becoming endangered andclimate is shifting to our discomfort.India is facing an unimpressive reality,the destruction of its environment! Howthis has happened is a story retold manya times. But the bright side to the storyis that a good number of individuals andinstitutions are taking concrete steps toreshape the reality. Globally, thefrontrunners include the Unites NationsEnvironment Programme (UNEP),Intergovernmental OceanographicCommission, World Commission onEnvironment and Development,Intergovernmental panel onEnvironmental Change, Commissionon Sustainable Development, WTO,and WWF.

Many Indian companies are going greeni.e. making use of environmentallysustainable practices not only at theirend but over the entire supplychain.(ESCM) The auto companieshave taken the lead on this focus. E.g.

Maruti Suzuki, Ashok Leyland, TataMotors. From IIFCO, the fertilizer giantto the Eicher Group, many have takenthe leap to their own good and that ofthe entire mankind. Birla White was foryears struggling with dust emission,which affected both the surroundingneighborhood and the machines of theirKhangar unit (Rajasthan). It came upwith an innovative in-house solution: itre-engineered the cleaning system, andfound it could actually use much of thedust it was emitting as waste. The result:less pollution, increased production anda value addition of Rs. 6.2 million perannum. How’s that for green? The‘ecomagination’ initiative by GE in2007 involved signing of an MoU withAir India that would help the airlineachieve its goal of becoming anenvironmentally sustainable airline,with sound environmental programsand practices. Suzlon Energy Ltd. isIndia’s contribution to clean technology,worldwide. Federation of Hotel andRestaurant Associations of India(FHRAI) has proposed to set up anaccreditation committee which willgrant certification to hotels that adopteco-friendly practices. Municipal solidwaste is being used for powergeneration in parts of Tamil Nadu. Theproposed Smart City at Kochi isexpected to be a ‘green’ venture. Manysmall scale industries are using ecofriendly methods and producingrecycled products.

Calling ‘Eco-preneurs’!

DEEPTI KAKARLecturer, Deptt of Management

Various platforms that are scoring in thedirection of preventing furtherecological harm include CII-ITC Centreof Excellence for sustainabledevelopment, Green Chemistry Chapterof India, Advisory Services inEnvironmental Management, Networkof Indian Environment Professionals.

High-profile conferences (e.g. in Bali)and institutional efforts apart, whatcould smaller bodies and ordinaryindividuals do? We can contribute bysmall actions like minimizing the useof plastics, using water judiciously,using the kitchen waste as gardenmanure. The known and celebratedindividual efforts are far and few. (E.g.Dr. Namrata Patel, the green dentist inUS) Many local bodies are encouragingtree plantations attuned to personalmilestones (e.g. celebrating yourbirthday/achievements by planting asapling). Schools in the private sectorare trying to discourage the usage of nonbiodegradable materials. Recognizingand adopting these can generate avoluntary mass awakening.

The myopic socio political perspectivesmust be shackled, rather than vying forimmediate gains we need to ensure longterm survival for one and all. Themanagers of tomorrow must groomthemselves into responsible citizens ofeach day. India is calling a new class ofeco-preneurs…. let’s think and actgreen!

Guru Corner

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In present scenario and fast changingenvironment we can find some

inspiration for value based managementfrom various religious scriptures.Bhagavad-Gita needs an intelligent andwide reinterpretation in the changedcontext of modern time. The eternalwisdom in the holy book, if imbibedproperly, can go a long way in makingeffective managers in different walks oflife.

Management Guidelines from theBhagavad-Gita

Management is a process in search ofexcellence to align people and get themcommitted to work for a common goalto the maximum social benefit.

The critical question in every manager’smind: is how to be effective in his job.The answer to this fundamentalquestion is found in the Bhagavad-Gitawhich repeatedly proclaims that: ‘youtry to manage yourself’. The reason isthat unless the manager reaches a levelof excellence and effectiveness that setshim apart from the others whom he ismanaging, he will be merely a face inthe crowd and not an achiever.

The Bhagavad-Gita expoundedthousands of years ago by the SuperManagement Guru Lord Krishnaenlightens us on all managerialtechniques leading to a harmonious andblissful state of affairs as againstconflicts, tensions, lowest efficiencyand least productivity, absence ofmotivation and lack of work culture etc

common to most of the Indianenterprises today.

The modern management concepts likevision, leadership, motivation,excellence in work, achieving goals,meaning of work, attitude towardswork, nature of individual, decisionmaking, planning etc., are all discussedin the Bhagavad-Gita with a sharpinsight and finest analysis to drivethrough our confused grey mattermaking it highly eligible to become apart of the modem managementsyllabus.

The ideas contained in the Bhagavad-Gita tackle the issues from the grassroots level of human thinking becauseonce the basic thinking of man isimproved it will automatically enhancethe quality of his actions and theirresults.

Achieving managerial effectivenessthrough teachings of Bhagavad-Gita

Some of the modern managementconcepts in the light of the Bhagavad-Gita which is a primer of managementby values are:

Utilization of Available Resources

The first lesson in the managementscience is to choose wisely and utilizeoptimally the scarce resources if one hasto succeed in his venture. During thecurtain raiser before the MahabharataWar Duryodhana chose Lord Krishna’s

Bhagavad Gita and Management

NAVIN KUMARLecturer, Deptt of Management

large army for his help while Arjunaselected Krishna’s wisdom for hissupport. This episode gives us a clue asto who is an effective manager.

Attitude towards Work

Three stone-cutters were engaged inerecting a temple. On being asked as towhat they were doing, the response ofthe three workers to this innocent-looking question is illuminating.

‘I am a poor man. I have to maintainmy family. I am making a living here,’said the first stone-cutter with a dejectedface. ‘Well, I work because I want toshow that I am the best stone-cutter inthe country,’ said the second one with asense of pride. ‘Oh, I want to build themost beautiful temple in the country,’said the third one with a visionarygleam.

Their jobs were identical but theirperspectives were different. What Gitatells us is to develop the visionaryperspective in the work we do. It tellsus to develop a sense of larger vision inone’s work for the common good.

Work Commitment

Dedicated work means to ‘work for thesake of work’. If we are alwayscalculating the date of promotion forputting in our efforts, then such workcannot be commitment-orientedcausing excellence in the results but itwill be promotion-oriented resulting ininevitable disappointments. By tiltingthe performance towards the anticipated

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ELDORADO April 2008

benefits, the quality of performance ofthe present duty suffers on account ofthe mental agitations caused by theanxieties of the future. So, the Gita tellsus not to mortgage the presentcommitment to an uncertain future. Ifwe are not able to measure up to thisheight, then surly the fault lies with usand not with the teaching.

Work culture defined in Bhagavad-Gita:

In Chapter 16 of the Gita, Lord Krishnaelaborates on two types of Work Ethicviz. Daivi sampat or divine work cultureand Asuri sampat or demonic workculture.

Daivi work culture - means fearlessness,purity, self-control, self-denial,sacrifice, straightforwardness,calmness, absence of fault-finding,absence of greed, gentleness, modesty,absence of envy and pride.

Asuri work culture - means egoism,delusion, desire-centric, improperperformance, work which is notoriented towards service.

There is also another dimension in thework ethic. If the karmayoga is blendedwith Bhaktiyoga then the work itselfbecomes worship, seva yoga.

Manager’s Mental Health

Sound mental health is the goal of anyhuman activity more so management.Some of the impediments to soundmental health are:

• Greed -for power, position, prestigeand money.

• Envy -regarding others’achievements, success, rewards.

• Egotism -about one’s ownaccomplishments.

• Suspicion, anger and frustration. • Anguish through comparisons.

Gita tells us how to get out of thisuniversal phenomenon by prescribingthe following capsules. • Cultivate sound philosophy of

life. • Identify with inner core of self-

sufficiency • Get out of the habitual mindset

towards the pairs of opposites. • Strive for excellence through work

is worship. • Build up an internal integrated

reference point to face contraryimpulses, and emotions

• Pursue ethico-moral rectitude.

Cultivating this understanding by amanager would cause emancipationfrom falsifying ego-conscious state ofconfusion and distortion, to a state ofpure and free mind i.e. universal,supreme consciousness wherefrom hecan prove his effectiveness indischarging whatever duties that havefallen to his domain.

And finally the Gita’s consolingmessage for all is : He/She who followsMy ideal in all walks of life without

losing faith in the ideal or neverdeviating from it, I provide him with allthat he needs and protect what he hasalready got.

“Work ethic propounds that if karma yoga isblended with bhaktiyoga, then the work itselfbecomes worship (sevayoga)”.

Bad Day orBurnout?

Anyone has periods when workpiles up, the boss is ticked andstress is high. But there’s

a difference between a bad day andweek at the office and burnout.There are three components ofburnout:

1. Your general well-being: Doyou feel depleted of energy,like a car running on empty?

2. Your relationship with work:Do you feel apathetic, unableto concentrate; like you’re“going through the motions?”

3. Your self-evaluation: Do youdoubt that you’re doingimportant work and that you’regood at it?

Having any one of these feelingsdoesn’t constitute burnout. It’s theaccumulation and frequency ofsymptoms that should be a warningsign.

Guru Corner

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47

Human behaviour is very complex.No two people react in the same

manner in the same situation. However,it is broadly stated that there are threetypes of behavioural attributes: passive,aggressive and assertive. Let’s take asituation where you are waiting for yourturn in line at the billing counter in amall. The clerk is just about to finishwith the customer in front of you whena man comes by and edges in. The clerkasks, ‘ Who’s next?’ and the man says‘I am’

There are three possible behaviouraloutcomes of this situation:

1. You say nothing, wait for yourturn and sulk all the day long.

2. You shout at both the pushyman and the clerk.

3. You simply say, ‘ Sorry I wasnext’ and get your work doneby the clerk.

The first outcome shows an non-assertive/ passive behaviour.

The second outcome shows anaggressive behaviour.

The third outcome shows an assertivebehaviour.

The reasons behind non-assertivebehaviour are many; many a times weconfuse the goal of being liked with thegoal of being respected and in this needfor being liked, we sacrifice our ownself-respect. This non-assertivebehaviour begins at childhood when ourparents hinder our assertion of self bycensoring us when we speak for our

rights. Religion fosters the idea ofhumility and sacrifice rather thanstanding up for self. Even as employees,we learn at the start of our career that ifwe speak, we are not likely to receive araise or promotion.

Being assertive and speaking straightdoesn’t mean being rude or aggressive.Aggressiveness is a behavior thatincludes hostile words and actions. Onthe other side, is passiveness, which isself-denying and restrained inhibitedactions. These two behavior types areat extreme ends and we must strike theright balance by practicing“assertiveness.”

Assertiveness is a behavior to speak andact, where people are able to expresstheir opinions in their own best interestand stand up for themselves honestlywithout undue anxiety and feelings ofguilt. Assertive persons will ask othersfor what they want or need and neverdemand. They consider the needs ofothers and respect the others’ rights.

Assertiveness involves the following:• Calmly communicating without

using harsh words or verballyattacking the other person

• Being clear about what you feel,what you eed and how it can beachieved.

• Saying ‘yes’ or ‘no’ rather thanagreeing to do something just toplease someone else.

• Accepting a ‘no’ from someoneelse without taking this as an ‘endof the world’ reply.

Assertive Behavior:Learning to say NO whenyou don’t want to say YES

RASHMI SHARMAAssistant Professor, Deptt of Management

• Being an optimistic, confidentperson who can take both positiveand negative feedback withpatience.

• Respecting the other person’sviewpoint.

Suppose at the time when you have lotsof work to do, your friend/ colleaguerequests you to help him complete hisproject. In such a situation, you canpolitely decline by saying a firm‘ I wishI could but I am yet to complete my ownwork’. This will save you from sulking,fretting and getting stressed out. Youdon’t have to apologise unnecessarilyfor things you are not responsible for,like in the case just mentioned.However, If it is your responsibility,there’s nothing wrong with apologisingwhen something goes wrong. Negativeremarks such as ‘I lack the experienceso I make stupid mistakes’ should bereplaced with “I’ve made a mistake, Iwon’t make that one again,because I’velearned from that mistake.”

Assertive behaviour fosters creation ofgoodwill and enhances self-esteem. Asthey say that behaviours do not exist inisolation, but interact with each other,forming patterns which we call thepsychological organisation. To achievethe state of the complete individual, wemust realise that if we change onebehaviour, we change a whole series ofrelated behaviours. Being assertive bynature will help you acquire new skillsand change your actions, and bychanging your feelings you arechanging the entire pattern of yourpsychological organisation.

Assertive Behavior: Learning to say NO when you don’t want to say YES

48

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ELDORADO April 2008

O God! Its tooooooooo long………....

Why your hands look for theremote during ad breaks on TV,

why pop stars don’t last beyond analbum, why BPOs have an attrition rateof more than 65 per cent, why it’sdifficult to sit through a three-hour longHindi movie? We are witnessing aninteresting phenomenon. That can betermed as SAS (Short attention span).The Short Attention Span syndrome orSAS is nothing but the inability of ourminds to stay focused for long periodsof time on any subject, activity orthought process. It is not caused by lackof concentration but largely due topressure on our time. Every minute hasa value attached and time is always at apremium. Moreover diversified andconfused choices are there along withthe pressure of fast decision making.Welcome to the era of short mind spans.

Look around and you will see plenty ofsignals that SAS has invaded our lives.The electronic and print media iscertainly feeling the heat of SAS. NewsChannels now have speed news in 60seconds flat for those who can’t holdtheir attention for the 30-minute newscapsules. Leading newspapers now sellcompacted and precise news in tabloidsizes and even launch them with sloganslike ‘Let’s cut the crap’. Even leadingdailies have to package their productwith attention grabbing headlines, short

news snippets, summaries andhighlights to ensure that readers don’tlose attention.

The mass hysteria that surroundedIndia’s win in the recently concludedTwenty20 World Championship isfurther proof of a SAS infectedpopulation. The era of 60-over and 50-over one day matches is gone. Nobodyhas the time or patience for eight hoursof cricket; leave alone five full days oftest cricket. ICC has understood thepulse of this generation and acted veryfast to host a T20 world event evenbefore half the nations are playing thatformat in domestic cricket. No wonderthat it has gained instant acceptance.The bells and whistles of dancers, musicwith DJs and free flowing beer can’ttake away from the fact that thisgeneration has no time for long drawnout sport, be it chess or cricket.

There is more evidence of the ShortAttention Span syndrome if you are akeen observer of life. Bollywoodmovies now release a few hundredprints in the first week of release (800-900 prints is fast becoming a norm) andeven then can’t be sure if the movie willget past the first week. Instant TV starscreated by reality television getforgotten after the end of the 13thepisode. Kids’ interest in sport or ahobby is also short lived. Today it isfootball, tomorrow it is cricket.

Short Attention Span

REKHA DAHIYAAcademic Assciate, Deptt of Management

Teenagers lose interest in their lovedates even before the next morningdawns and happily get agree to marrysomeone else. It doesnot stop here also.In some cases marriages also don’t lastmore than a day.(Britney Spears’ case).Politicians have no option but to giveshort speeches (thank god) and medicalrepresentatives have to complete theirnew molecule’s story in two minutes.A job experience of 1.5 years is nowconsidered long and switching threejobs in five years is considered solidcross-category experience!

Advertising, too, is feeling the SASeffect. The word ‘copywriter’ is now amisnomer. Now it is appropriate to becalled an ‘ideas person’ since Englishand grammar are not necessaryqualifications. The average duration ofad films on TV is already 18 seconds.Eight words on a billboard are too manyand 60-second TV films are only on theshow reels of directors and creativeheads. As per a study conducted by theCable Television Advertising Bureau inthe US, consumers are only willing toaccept ads of about nine seconds on acell phone screen. The larger the screen,the more likely they are to sit through alonger commercial – 13 seconds for aniPod and 18 seconds for a computerscreen. Is the advertising industryevolving fast enough?

Guru Corner

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49

Even if advertising agency makes an adthat is very appealing but it is more than20 seconds, viewers tend to change thechannel because they are no moreinterested in your so called long productstory. They will utilize their timesomewhere else. So demand is to makethe short and crisp advertisement.

The challenges of overcoming SAS aremany. The ability to tell a story in 20seconds will become the key to holdinga viewer’s attention. Typically, peoplewith short attention spans want to beentertained, not educated. Seamlesslyintegrating the brand into advertainment(advertisement + entertainment) mayalso be a way forward to deal with SAS.The BMW groundbreaking series ofeight short films (‘The Hire’) made forthe Internet did that brilliantly. Eachfilm was only eight minutes in durationand showcased various BMW carmodels without any overt branding. Forthe viewer, it was pure entertainment,but for the advertiser it was a promotiontechnique.

Kiosks will ensure that you pre-checkwhether the item you are looking for ison the shelf so that you don’t have torun through the shelves looking for ashirt size or the color/design of a top.Book stores like Crossword and Oxfordare already doing so, but other retailformats will surely follow suit. Audioenabled information will help make

choices for people at retail points.Advertising content could come with anexpiry date so that viewers yearn towatch it before it goes off media. Forinstance, an ad that is run only for twoweeks. The possibilities are endless butneed to be explored in depth.

Marketers and service providers havean even tougher task. There are boundto be even shorter product life cyclesfor brands. Waiting time for service hasto be dramatically cut. And call centrescan’t keep callers waiting.(remembercustomer care services numbers of anyservice provider) We should appreciatethe fact that Maruti Suzuki has offeredan interest of 24% on the bookingamount to those willing to wait for theSX4 and Swift. Locating brands onshelves is critical. If consumers don’tfind you fast, they will move on toanother. Durables will behave like fadbrands. We should also appreciate theplanned strategy of Nokia that howNokia creates obsolescence every weekby launching new and improved versionof cell phones.

If you reached the end of this articlewithout skipping parts in the middle,then I have been successful in fightingoff the Short Attention Span syndromethis one time! I don’t know whethermarketers and advertisers will be aslucky with their current efforts!

Short Attention Span

“Every minute has a value attached and time isalways at a premium. Diversified and confusedchoices press us hard along with fast decisionmaking.”

Refusing to Accept Failure -Brian Ca vanaugh

Sir Edmund Hillary was the firstman to climb Mount Everest. OnMay 29, 1953 he scaled the highestmountain then known to man-29,000 feet straight up. He wasknighted for his efforts. He evenmade American Express cardcommercials because of it!However, until we read his book,High Adventure, we don’tunderstand that Hillary had to growinto this success. You see, in 1952he attempted to climb MountEverest, but failed. A few weekslater a group in England asked himto address its members. Hillarywalked on stage to a thunderousapplause. The audience wasrecognizing an attempt at greatness,but Edmund Hillary saw himself asa failure. He moved away from themicrophone and walked to the edgeof the platform. He made a fist andpointed at a picture of the mountain.He said in a loud voice, “MountEverest, you beat me the first time,but I’ll beat you the next timebecause you’ve grown all you aregoing to grow... but I’m stillgrowing!”

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ELDORADO April 2008

Medical tourism can be broadlydefined as provision of “cost

effective” private medical care incollaboration with the tourism industryfor patients needing surgical and otherforms of specialized treatment. Thisprocess is been facilitated by thecorporate sector involved in medicalcare as well as the tourism industry bothprivate and public. Medical tourismrefers to traveling to other countries toobtain medical, dental and surgicaltreatment. At the same time they couldalso taour and fully experience theattractions for the country they visit.Exorbitant cost of health care inindustrialized nations, ease andaffordability of international travel,favorable currency exchange in theglobal economy, rapidly improvingtechnology and standards of care inmany countries of the world, and mostimportantly proven safety of health carein select foreign nations have all leadto the rise to medical tourism. Medicalor health tourism has become a commonform of vacationing, and covers a broadspectrum of medical services. It mixesleisure, fun and relaxation together withwellness and health care.

“Medical tourism has discovered thedeveloping countries”. These countriesregard medical tourism as niche marketin the keenly contested field ofinternational tourism. Concept ofmedical tourism came into existence

back in the nineteenth century in Egypt.The British and the French sought tocure various diseases by takingadvantage of the subtropical climate onthe banks of the Nile. Recently citizensof the developing countries with arelatively expensive and inadequatehealth care system have been attendingclinics in other nearby developingcountries which offer better servicesthan those in their home countries andpeople from industrialized nations aretraveling to these same countries withthe intention of combining a holidaywith cheaper medical treatment. Themost recent trend in privatization ofhealth services is medical tourism,which is gaining prominence indeveloping countries. Globalization haspromoted a consumerist culture; thishas had its effect in the health sectortoo, with the emergence of a privatesector that thrives by servicing a smallpercentage of the population that hasability to “buy” medical care at the ratesat which the “high end” of the privatemedical sector provides such care. Thishas changed the character of the medicalcare sector, with the entry of thecorporate sector. Corporate in this sectorare looking for opportunities that gobeyond the limited domestic “market”for high cost medical care. This is thegenesis of the “medical tourism”industry.

In many developing countries it is being

Medical Tourisim

SUNITA DAHIYALecturer - Deptt of Management

actively promoted by the government’sofficial policy. India’s National HealthPolicy 2002, for example, says: “Tocapitalize on the comparative costadvantage enjoyed by domestic healthfacilities in the secondary and tertiarysector, the policy will encourage thesupply of services to patients of foreignorigin on payment. The rendering ofservices on payment in foreignexchange will be treated as ‘deemedexports’ and will be made eligible forall fiscal incentive extended to exportearnings”. The formulation draws fromrecommendations that the corporatesector has been making in India andspecifically from the “PolicyFramework for Reforms in HealthCare”, drafted by the Prime Minister’sAdvisory Council on Trade andIndustry, headed by Mukesh Ambaniand Kumarmangalam Birla.

Need for Medical Tourism

The idea of the health holiday is to offercustomers an opportunity to get awayfrom your daily routine and come intoa different relaxing surrounding. Herethey can enjoy being close to the beachand the mountains. At the same timethey are able to receive an orientationthat will help them improve their life interms of their health and general wellbeing. It is like rejuvenation andcleaning up process on all levels –physical, mental and emotional.

Guru Corner

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51

Many people from the developed worldcome to India for the rejuvenationpromised by Yoga and Ayurvedicmassage, but few consider it adestination for hip replacement or brainsurgery. However, a nice blend of topclass medical expertise at attractiveprices is helping growing number ofIndian corporate hospital lure foreignpatients, including from developednations such as the UK and the US. Asmore and more patients from Europe,the US and other affluent nations withhigh Medicare costs look for effectiveoptions; India is pitted against Thailand,Singapore and some other Asiancountries, which have good hospitals,salubrious climate and touristdestinations. While Thailand andSingapore with their advanced medicalfacilities and built-in medical tourismoptions have been drawing foreignpatients of the order of a couple of lakhsper annum, the rapidly expandingIndian corporate hospital sector hasbeen able to get a few thousands fortreatment only.

History of Medical Tourism

Medical tourism is actually thousand ofyears old. In ancient Greece, pilgrimsand patients came from all over theMediterranean to the sanctuary of thehealing god, Asklepios, at Epidaurus.In Roman Britain, patient took the waterat a shrine at Bath, a practice that

continued for 2,000 years. From the 18th

century wealthy Europeans traveled tospas from Germany to the Nile. In the21st century, relatively low-cost jettravel has taken the industry beyond thewealthy and desperate. Countries thatactively promote medical tourisminclude Cuba, Costa Rica, Hungary,India, Israel, Jordan, Lithuania,Malaysia and Thailand. Belgium,Poland and Singapore are now enteringthe field. South Africa specializes inmedical safaris-visit the country for asafari, with a stopover for plasticsurgery, a nose job and a chance to seelions and elephants. India is consideredthe leading country promoting medicaltourism and now it is moving into anew area of “medical outsourcing”,where subcontractors provide servicesto the overburden medical care systemsin western countries.

The privatization of the Medicare sectorhas brought with it five star facilitiesand world class treatments. The countrycan now boast of a number of corporatehospitals. India is a source market forprofessionals in the medical field formany renowned hospitals around theworld. Hitech medical facilities havebecome a necessity following consumerdemand among the world fastestgrowing middle class. India offers arange of leading edge quality hospitalsand treatment at a fraction of worldcosts, with comparable success rates

and service levels directly in proportionto the high – value system and naturalcaring that comes with its heritage.Indian hospitals are becoming knowninternationally for standards of healthcare delivery comparable to the best inthe world. India has the technology andthe skilled super-specialists coupledwith sound infrastructure andprofessional management, nurses andparamedical staff to take oninternational competition. Many of theAmerican citizens not covered byinsurance or those in countries such asthe United Kingdom where there arelong waiting lists for many NationalHealth services – prefer to receivetreatment in a country like India wheretop-tier institutions can provide highquality health care at a fraction of thecost.

Growth of Medical Tourism

According to a study by Mckinsey andthe Confederation of Indian Industry,medical tourism in India could becomea $1 billion business by 2012. the reportpredicts that: “By 2012, if medicaltourism were to reach 25 per cent ofrevenues of private up market player,up to Rs10,000 crore will be added tothe revenues of these players”. TheIndian government predicts that India’s$17 billion – a – year health careindustry could grow 13 per cent in eachof the next six years, boosted by medical

Medical Tourisim

“India is considered…..western countries.”(pls liftthe last highlighted section of 2nd column first paraand delete from there)

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ELDORADO April 2008

tourism, which industry watches say isgrowing at 30 per cent annually.According to CII, India has the potentialto attract 1 million tourists per annum,which could contribute upto US $5billion worth foreign exchange earningto the economy. CII is of the opinionthat India must leverage its competitiveedge, especially its cost advantage.Medical treatment cost is only 1/5th ofcost in the West, says CII. A heartsurgery in US costs US $30,000 whileit costs US $6,000. Bone marrowtransplant in the US costs US $2,50,000while it is US $26,000 in India, CIIpoints out. According to CII, India isunique as it offers holistic medicinalservices. With Yoga, meditation,ayurveda, allopathy, and other systemsof medicines, India offers a uniquebasket of services to an individual thatis difficult match by other countries,says CII. Also, clinical outcomes inIndia are at par with the world’s bestcenters, besides having internationallyqualified and experienced specialists. Acase study done by CII has revealed thatThailand with a population of 60million has been successful in attracting1million health tourists last yearbecause of the development of world-class infrastructure. According to CII,the success story behind Thailand’stapping the health tourism market is dueto aggressive international marketing inconjunction with tourism authority. Ithas also integrated with traditional

medicine and service integration withtourism. The medical tourism market inIndia has been pegged to grow at aroundRs 11,000 Crores by next couple ofyears. CII believes that India shouldalso replicate the Thai model andcapitalize its inherent strengths tobecome a world player in medicaltourism. CII says that it is also essentialto establish the Indian healthcare brandsynonymous with safety, trust andexcellence.

Medical tourism in India is growing by30% a year and the Indian educationsystem in churning out an estimated20,000 to 30,000 doctors and nurseseach year. Medical or Health treatmentpackage tourism has become a recurrentform of vacationing, and covers a broadrange of medical services. It minglesfree time, amusing and recreationtogether with wellness and healthcarepackages. The thought of the healthholiday is to offer you a chance to getaway from your daily habitual lifestyleand come into a dissimilar calmingneighboring. Here you can take pleasurein being close to the beach and themountains. At the same time you areable to accept a compass reading thatwill assist you advance your life interms of health and general well being.It is like reconstruction and cleans upprocess on all levels – physical,psychological and expressive.

Ten years ago, medical tourism was

large enough to be noticed. Today, morethan 2, 50,000 patients visit Singaporealone – nearly half of them from theMiddle East. This year, approximatelyhalf of a million foreign patients willtravel to India for medical care, whereasin 2002, the number was only 1,50,000.in monetary terms, expert estimate thatmedical tourism could bring India as$2.2 billion per year by 2012 ayurvedictreatment is preferred because it is“Effective and without side effect”. InKerela, (rated as one of the ten must seedestination by national geography),tourism revolved around ayurvediccures and the states tourist growth ratehas been estimated at 25% - 30%annually. Later however, even modernmedical tourism has recorded spurt andexpert are optimistic that India, whoseworld class medical college’s turn outabout 30,000 doctors annually, soonbecome one of the top health tourismdestinations in the world.

Medical treatment in UK is free underthe NHS, but because of the longwaiting times some patients opt forexpensive private care. In the UK,patients have to wait endlessly to getadmission into hospitals under thestate-sponsored health care schemewhich is very frustrating. The death rateof coronary bypass patients at US isrelatively high as compared to that inIndia. If we take example of Escortsgroup of hospitals the death rate for

“India is unique as it offers holistic medicinalservices with yoga, meditation, ayurveda, andother systems of medicines. Medical tourism inIndia is growing by 30% a year, according to CII.”

Guru Corner

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coronary bypass patients is 0.8 per centand the infection rate is 0.3 per cent.This is well below the first-worldaverages of 1.2 per cent for the deathrate and 1 per cent for infections.

Price advantage is, of course, a majorselling point. The slogan, thus is, “FirstWorld treatment’ at Third Worldprices”. The cost differential across theboard is huge: only a tenth andsometimes even a sixteenth of the costin the West. Open-heart surgery couldcost up to $150,000 in the US; in India’sbest hospitals it could cost between$3,000 to $10,000. Knee surgery (onboth knees) costs Rs350,000 ($7,700)in India; in Britain this cost10,000pounds ($16,950), more thantwice as much. Dental, eye andcosmetic surgeries in Western countriescost three to four times as much as inIndia. We need to create a system toconduct proper market research andfeasibility studies in order to quantifythe “How many”, “From where”, “Towhere”, and most importantly the“How” of medical tourism.

Tourism and healthcare, being asintegral part of many economiesservices industry are both importantsources of foreign exchange.Globalization has promoted aconsumerist culture leading to themushrooming of corporate healthcaresetting seized with the necessity tomaximize profits and expand their

coverage. Long waiting lists, decline inpublic spending and rise in lifeexpectancy and non-communicablediseases that require specialist servicesare some of the factors directing a waveof medical tourists to more affordablehealthcare destinations. Most countriesare tapping the health tourism marketdue to aggressive internationalmarketing in conjunction with theirtourism industry. In this rat race,Thailand, Malaysia, Jordan, Singapore,Hong Kong, Lithuania and South Africahave emerged as big healthcaredestinations.

India is unique as it offers holistichealthcare addressing the mind, bodyand spirit. With yoga, meditation,ayurveda, allopathy and other Indiansystems of medicine, India offers a vastera of services combined with culturalwarmth that is difficult to match byother countries. Also, clinical outcomein India are on par with world’s bestcentres, besides having internationallyqualified and experience specialist. CIIbelieves that India should capitalize onits inherent strengths to become a worldplayer in medical tourism. Accordingto CII – Mckinsey study a medicaltourism in India could become a USD1 billion business by 2012. instead ofadopting a segmental approach bytargeting a few states such asMaharashtra, Kerela, Under Pradesh,Chennai, efforts are now been made to

project Destination India as a completebrand ideal for medical tourism.

India is one of the most touteddestinations in the world for medicaltourist. It is known in particular for heartsurgery and hip resurfacing, area ofadvance medicines in which India isglobal leader. Probably no country hasbeen in the news for medical tourismthan India in 2005-06, and thegovernment and private hospital groupsboth seem committed to a goal ofmaking the subcontinent a world leaderin the industry. Indian medical industrymain appeal is low cost treatment. Mostestimates claim treatment in India ataround a 10th of the price of comparabletreatment in America or Britain.Moreover, an Indian hospital alsoprovides more personalized care thanavailable in the west.

“It is NOT CHEAP; rather it is absoluteVALUE FOR MONEY”. Due to thecurrent favorable Rupee/Dollar/Pound/Euro exchange rate foreign clients cantake advantage of the weak Rupee an dexcept savings of 65% over the sametreatment in their own countries’ withno compromise on quality. India offersworld lass medical facilities’comparable with any of the westerncountries. India has state of art hospitalsand the beast qualified Doctors. Indianow offers the best infrastructure’ thebest possible medical facilities atcomparative prices.

“Clinical outcomes in India are at par with theworld’s best centers, besides India also boasts ofinternationally qualified and experiencedspecialists.”

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ELDORADO April 2008

Government expenditure on publichealth infrastructure is shrinking. Atpresent, India spent about a percent ofits gross domestic product (GDP) onhealth care, lower than the average of2.8% GDP spent by some lessdeveloped countries. India can expectto earn around 1 billion dollar us inforeign exchange once the recentlyimplemented programme to promotemedical tourism takes effect in 2012.Only seven years from now, the mostoptimistic industry forecast suggest thatmedical tourist hosted by India canpump Rupees 10000 crore into oureconomy. An estimated 1,50,000 suchvisitors a year already spent aboutrupees 1500 crores in India fortreatment. Despite these numbers,regional competition for medical touristis fierce. Thailand currently the Asianleader both in number of foreignpatients and revenue. Malaysia andSingapore too have set in motionaggressive plans, with ambitioustargets, for the years 2010-12, which isalso seen as a defining period by CIIand the Indian Health Care Federation(IHCF), an association of about 60hospitals. Today, 7% of doctors inAmerica are Indians and 11% of thespecialists are Indians.

India is giving Thailand stiffcompetition in health care services foroverseas patient with cost of surgerylower by over 30% and infact the

cheapest in the entire South East Asia.Medical tourism is fast emerging as abig opportunity for India with its lowcost advantage, high quality health careproviders and an English speakingpopulance. According to CII –McKinsey study, medical tourism cancontribute Rupees 5000-10000 croresadditional revenue for up marketterritory hospitals by 2012.

Promoting Medical tourism inIndia

Suppliers in the developing countriesplace their emphasis more onrecuperation than on the medicalaspects. In Thailand it was put thisway:”The main thing that attracted meto it is that you get a holiday out of it”.Medical tourism focuses on treatmentof acute illness, elective surgeries suchas cardiology and cancer, among others.From October this year, theGovernment plans to start overseasmarketing of India as a medical tourismdestination. Senior government officialssay that the formalities for marketingmedical facilities to a global audiencehave already started and they hope tocomplete the process of price bandingof hospitals in various cities by the thirdquarter of this year. The government ofIndia is of the opinion that by marketingIndia as a global medical tourismdestination, it could capitalise on thelow-cost, high-quality medical care

available in the country. Statistics showthat the medical tourism industry inIndia is worth $333 million (Rs 1,450crore) while a study by CII-McKinseyestimates that the country could earnRs.5, 000-10-000 crore by2012.Probably realising the potential,major corporates such as the Tatas,Fortis, Max, Wockhardt, Piramal, andthe Escorts group have made significantinvestments in setting up modernhospitals in major cities. Many havealso designed special package forpatients, including airport pickups, visaassistance and board and lodging, healthcare industry officials said.

As the medical tourism industry isgrowing exponentially, government andthe private players need to join handsin order to act as a catalyst to buildinfrastructure for hospitals, createspecialty tourist packages to includemedical treatment, promoteaccreditation and standardization,enable access and tie-ups with insurancecompanies, provide state of art facilitiesand improve quality of in-patient careand service to meet the requirements offoreign patients and to attain sustainablecompetitive advantage.

If 2003 and 2004 saw a trickle ofrefugees from the healthcare systems ofwestern countries seeking medicaltreatment in India, in 2005 it became astream, much of it fuelled by a blast offree publicity from programmes like

“Marketing India as a global medical tourismdestination, it could capitalize on low-cost, highquality medical care and world best hospitality.”

Guru Corner

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60minutes. Western TV crewsaccompanied often elderly people toIndia, filmed them hobbling out ofThird World airports, with bhangra onthe soundtrack, and driving into FirstWorld territory hospitals with the besttechnology money could buy, these kindof strategies can be adopted for theupliftment of medical tourism in India.

Problems with medical tourism:

Experts have identified a number ofproblems with medical tourism:

• Government and basicmedical insurance, andsometimes extended medicalinsurance, often does not payfor the medical procedure,meaning the patient has to paycash.

• There is little follow-up care.The patient usually is inhospital for only a few days,and then goes on the vacationportion of the trip or returnshome. Complications, side-effects and postoperative careare then the responsibility ofthe medical care system in thepatient’s home country.

• Most of the countries that offermedical tourism have weakmalpractice laws, so thepatient has little recourse tolocal courts or medical boardsif something goes wrong.

• There are growing accusationsthat profitable; private sectormedical tourism is drawingmedical resources andpersonnel away from the localpopulation, although somemedical organizations thatmarket to outside tourists aretaking steps to improve localservices.

Conclusion

The key “selling points” of the medicaltourism industry are its “costeffectiveness” and its combination withthe attractions of tourism. The later alsouses the ploy of selling the “exotica” ofthe countries involved as well as thepackaging of health care with traditionaltherapies and treatment methods. Someimportant trends guarantee that themarket for medical tourism willcontinue to expand in the years ahead.By 2015, the health of the vast BabyBoom generation will have begun itsslow, final decline, and with more than220 million. Boomers in the UnitedStates, Canada, Europe, Australia andNew Zealand, this represents asignificant market for inexpensive,high-quality medical care. Medicaltourism will be particularly attractivein the United States, where an estimated43 million people are without healthinsurance and 120 million withoutdental coverage numbers that are both

likely to grow. Patients in Britain,Canada and other countries with longwaiting lists for major surgery will bejust as eager to take advantage offoreign health care options.

References1. abc “Medical tourism growing

worldwide” by BeccaHutchinson, UDaily, July 25,2005, retrieved September 5,2006.

2. “Medical tourism: Needsurgery, will travel” CBCNews Online, June18, 2004,retrieved September 5, 2006.

3. Indian medical care goesglobal, Aljazeera.Net, June 18,2006 accessed at Nov 11,2006.

4. “Just what the hospitalordered: Globalaccreditations” by ZeenatNazir, Indian Express,September 29, 2006.

5. “India Fosters Growing‘Medical Tourism’ Sector” byRay Marcelo, The financialtimes, 2July 2003 retrievedSeptember 29,2006.

6. [ h t t p : / /www.breakingtravelnews.com/article/20061212190313304Medical conference makesAsia debut”].

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ELDORADO April 2008

The Airbus A380 was known duringits development phase as the

Airbus A3xx.It is the largest airliner inthe world. Initially it will be sold in twoversions,A380 and A800 They will beable to carry 555 passengers in a double-decker arrangement or upto 800passengers in a single economy mode.

The journey of this airbus A380 startedin the early 1990 to break down themonopoly of Boeing.The airbus is ansubsidiary of The European AeronauticDefence and Space Company.EADS isa large European aerospace corporation,formed by the merger ofDaimlerChrysler Aerospace AG(DASA) of Germany, Aerospatiale-Matra of France, and ConstruccionesAeronáuticas SA (CASA) of Spain on

July 10, 2000.It is one of the world’sleading aircraft manufacturer. Thecompany employs 57,000 peoplehaving head quarter located inToulouse, France. The companyoperates in 16 manufacturing cities inEurope which produces the parts ofA380.

A380 made its first commercial flighton April 27, 2005 from Singapore toSydney with Singapore Airlines. Thepassengers travel in great comfort .Theyare offered 100 movie selections, 180TV shows, interactive games, CDalbum, personal monitors and USBports. That goes for economy class also.The airlines also provide some otherfacilities like relaxation space, bars,duty free shops.

SUJOY BHATTACHARJEEPGDM-FT (2007-09)

The Mammoth“Airbus A380”

The Design:

The company is using Rolls Royacetrent 900 engine on the wing of anAirbus A380.The airbus used similarcockpit layout so that it will be easierfor handling.

The airbus used carbon fibre reinforcedplastic, glass-fibre reinforced plasticand quartz fibre reinforced plasticextensively in the wings.The majorsection of the A380 are build inGermany, France, Spain and UK.

Emirate airlines has placed maximumnumber of order so far. India’s fastestgrowing airline Kingfisher is the firstand the only airline from the country tosign up for the Airbus A380. Kingfisherhas maximum order of ten aircrafts.

Environmental Issues:

Airbus is the first jetliner manufacturerto be certified to internationalenvironmental standards ISO 14001, forfull lifecycle coverage, including allproducts and manufacturing plants. TheAirbus’ approach is based on aninnovative Environment ManagementSystem, used to map, assess, track andminimize an aircraft’s environmentalimpact throughout its life. Thisapproach optimises environmentalperformance at any phase of the productlife cycle.

The A380 has been a catalyst forinnovative new technologies and a new

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57

way of “working together” across theindustry. Airbus negotiatesenvironmental requirements incontractual agreements with suppliersand actively spreads environmental bestpractices within the supply chain.Airbus is also working hard to mitigatethe impact of manufacturing on theenvironment with cleaner technologiesand processes. Environmentalmanagement has been a major criterionfor the A380 production facilities,optimising energy and waterconsumption, as well as waste andemissions.

Airbus’ design philosophy is based onthe whole life cycle of an aircraft, fromthe initial concept to its end of life. TheA380 static test airframe will be usedas part of a project to test proceduresfor decommissioning aircraft in themost environmentally responsible way.This will be the first time that anaircraft’s pre-service testing has beentaken through to the very end of its life.

Opportunities:

The A380 is expected to impact theindustry in two ways. On the one hand,the immense capacity of the aircraft

opens up opportunities to increasepassenger flow through airports withoutincreasing the number of aircrafts. Thisis likely to enhance efficiency ofairports as well as minimise unit costs,an important advantage considering thelimited number of slots at airports.Secondly, this will further motivateairports to restructure their facilities andinvest heavily in infrastructure to enablefuture operations of the A380. However,many airports are more than preparedfor the projected expenditure since theyexpect to gain multiple advantages fromthe future operations of the jet.

Thomas Edison in the face of adversityRenowned as one of America’s most famous inventors, Thomas Edison also demonstrated powers of leadership whichwould rival any general.

“In 1914 Thomas Edison’s factory in West Orange, New Jersey, was virtually destroyed by fire. Although the damageexceeded $2 million, the buildings were insured for only $238,000 because they were made of concrete and were thought tobe fireproof. Much of Edison’s life work went up in smoke and flames that December night. At the height of the fire,Edison’s 24-year-old son, Charles, searched frantically for his father. He finally found him, calmly watching the fire, hisface glowing in the reflection, his white hair blowing in the wind.

“My heart ached for him,” said Charles. “He was 67 — no longer a young man — and everything was going up in flames.When he saw me, he shouted, “Charles, where’s your mother?” When I told him I didn’t know, he said, ‘Find her. Bring herhere. She will never see anything like this as long as she lives.’”

The next morning, Edison looked at the ruins and said, “There is great value in disaster. All our mistakes are burned up.Thank God we can start anew.”

Three weeks after the fire, Edison managed to deliver the first phonograph.”

Even in the face of the cruelest adversity, Edison not only looked for the positives, but attempted to instill that attitude in hisfollowers. This was a sign of true leadership.

The Mammoth “Airbus A380”

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ELDORADO April 2008

Where the mind is without fear andthe head is held high.

Where knowledge is free.Where the world has not been broken

up into fragmentsBy narrow domestic walls.

Where words come out from the depthof truth.

Where tireless striving stretches itsarms towards perfection.

Where the clear stream of reason hasnot lost its way

Into the dreary desert sand of deadhabit.

Where the mind is led forward byThee

Into ever-widening thought andaction.

Into that heaven of freedom, myFather, let my country awake.

Rabindranath Tagore

These threads from RabindranathTagore’s poem are vital strands fromwhich a fulfilling vision of India hasbeen woven. A vision for a resurgentand vibrant India where there is peaceand security, food and nutritionalsecurity, jobs for all, knowledge, health,technology and infrastructure,globalisation, good governance, andvalues. The INDIA 2020 VISIONDOCUMENT for the first time tried tocapture this imagination of the citizensof this great nation, and tried to give it

shape in the form of a vision documentfor the nation. But having a vision alonedoes not lead to its fulfilment; it isplanned action on the conceived visionthat leads to visible results. A merevision or wishful thinking, thoughimportant, does not result in anythingif action is avoided.

It is therefore imperative for us to chartout the actions that are required by usas a nation to be taken, to achieve ourvision for India 2020. This articlecompiles a list of tasks that India needsto address, to achieve the vision that ithas set for itself. The tasks mentionedbelow are not exhaustive but it is hopedthat a national consensus on these issuesfollowed by appropriate actions will goa long way in ensuring that Indiaachieves its vision.

1. JUDICIAL REFORMS

The judicial system in India facestwo diverse problems:

a) Slow disposal of cases leadingto delays and accumulation ofbacklogs

b) Very low rate of prosecutionin criminal cases

The two problems combined haveled to a serious erosion of faith inthe judicial system on the part ofpublic as well as on the part ofadministration and legislatures.

India 2008-the Tasks Ahead

PRAVEEN K RAIPGDM-FT (2007-09)

The challenge of judicial reformsis to ensure that quick justice doesnot become a quicksand forbarbaric practices, while at thesame time expediting the judicialprocess as well as ensuring that thepercentage of guilty escapingpunishment is reducedconsiderably.

2. POLITICAL REFORMS

Potential political instabilitycaused by the inevitable collationgovernments in the foreseeablefuture may be endemic within amulti-party parliamentary formwith a Westminster Model electoralsystem of winner-take-all. Withinsuch an emerging scenario thetemptation to pander to the populistdemands for a stronger executiveequipped with greater discretionarypowers to control ‘hung’legislatures is fraught with graverisks to the country’s democraticstructure. A more desirable optionwould be to reform the electoralsystem that would make suchpolitical instability infrequent, if atall.

Also, Parliament was conceived asthe legislature or the law-makingbody, but of late law- making hasceased to be the most important ofits functions either qualitatively or

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59

quantitatively. From about 48 percent, it has come down to occupyless than 13 per cent of its time. Thecharacter of Parliament has alsochanged as a result of changes inmembership composition.

3. RESPONSIVE GOVERNANCE

The failure of national-levelpolitical parties and themushrooming of regional and sub-regional groupings have led tosplintered electoral outcomes. Theconsequent emergence of coalitiongovernments, in the states as wellas at the Centre, generated politicalinstability which had an adverseimpact on governance. The newcommitment to seize and holdpolitical power at any cost saw theemergence of a frightening nexusbetween corrupt politicians andpublic servants and unlawfulelements in society.

From around the 1990s there werea series of exposures of scandalsrelating to large-scale defalcations,embezzlements and cases ofcorruption among which were thefodder scam, the hawala case, theBofors and submarine deals. Thesescams involved serious allegationsagainst chief ministers and theirministers, ministers at the Centre

and even prime ministers, besidesserving and retired seniorfunctionaries.

In the recent years, a growingnumber of IPS and IAS officers,including several director-generalsof police (DGPs) and chiefsecretaries (CSs), have also beenprosecuted in cases involving grossabuse of authority, corruption andcriminal offences. Even the ArmedForces have been infected, aswitnessed by the Tehelka scandal.

4. FOOD & AGRICULTURALREFORMS

A commercially viable businessenterprise must grow and expandin size and scale. Though the Indianagriculture sector has a vastpotential for growth, yet it seemsto be suffering from irrationalexploitation of natural resources,technology fatigue and policyindifference that is creating severalkinds of bottlenecks and anomaliesthat are hindering its growth anddevelopment with equity. As aconsequence, the farm sector isshowing signs of declining totalfactor productivity and plateau ofproduction that is adverselyaffecting farm incomes andlivelihood security of the rural

population. The problem is vast aswell as serious and needs to betackled with vision anddetermination.

5. STRATEGIC VISION

Contrary to popular opinion, thecollapse of the Soviet Union andthe end of the Cold War with thesigning of the Paris Agreement onNovember 19, 1990, did nottransform the world from a bipolarto a unipolar system. As was arguedby Dr Henry Kissinger in his bookDiplomacy that unprecedentedevent led to the emergence of apolycentric world with the US, aGermany-dominated EuropeanUnion, China, Japan and Russia asplayers in a balance of powersystem. He speculated at that stagewhether India could become aprobable sixth centre of power.

Today there is no doubt that Indiais one of the six members in theglobal balance of power. This cameabout with the nuclear and missiletests in 1998, rising foreignexchange reserves, increasingforeign trade and economic growthand the global perception of thepolitical stability of the world’slargest democracy.

We have lived through a period of

“Indian agricultural sector has a vast potential forgrowth, but it is showing signs of declining factorproductivity due to irrational exploitation ofresources, technology fatigue and policyindifference.”

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ELDORADO April 2008

history when unprecedentedchanges have taken place. Sincecontinuity is more easilyunderstood, and favoured, by ourelite than change, they have failedto grasp the enormity of the changewe are now undergoing. Therefore,there is a lot of scepticism aboutunfamiliar developments and thebenefits flowing from these for thecountry.

6. URBAN RENEWAL

During the last 50 years, India has,on an average, been adding aboutfive or six million people to itstowns and cities. The Economicand Social Commission for Asiaand the Pacific estimates thatbetween 1990 and 2020, Indiawould add 418 million people toits urban population. If the presentdensities are maintained, urbanareas would be two and a half timesmore extensive than they are now.

A special feature of the Indianscene has been that the dramaticincrease in the size of ourmetropolitan cities has not reducedthe pressure of population orpoverty in the rural areas. India isfacing problems not only ofteeming cities but also of a teemingcountryside. The per capitaavailability of arable land in

villages has been declining and thecity-dwellers continue to groanunder spatial tyranny, particularlyin the metropolitan towns. Thenation, including the enlightenedsection of it, is showing littleconcern over the growingcomplexity of our urban problemsand the crumbling edifice of ourcities.

7. ECONOMIC VISION

A report prepared in April 2004 byUS financial services GoldmanSachs observed: “India is oftencharacterised as a country ofcontradictions. This idea isexemplified by the popular phrasethat India accounts for close to athird of the world’s softwareengineers and a quarter of theworld’s undernourished”.

Coexisting in the country is a rangeof political and economic systems,including different forms offeudalism, capitalism andsocialism. India’s first PrimeMinister Jawaharlal Nehru wanteda “mixed” economy for the country,one that would include the bestelements of both capitalism andsocialism. Nearly six decades later,the verdict is almost unanimous:we took the worst of both worlds.

Private enterprise (the hallmark ofcapitalism) was stifled byexcessive bureaucratic controls. Atthe same time, the state couldhardly provide healthcare andelementary education (that socialistsocieties sought to provide) to themajority of its people.

Even if certain sections of thepopulation have made considerableprogress in recent years, economicdevelopment has, by and large,been uneven. The overallnationwide picture of growthindicators conceals sharp andincreasing inequalities in incomeand social development.

Apart from these key tasks thereare also a number of other tasks thatneed attention to truly achieve theconceived vision of transformingIndia into a developed nation by2020. Some of these tasks areensuring democracy, facilitatingprovision of better health facilities,fighting corruption, empoweringwomen, water and wastemanagement, facilitating scientificand technological progress,impartment of education, ensuringenergy security and lastlycontaining terrorism andinsurgency.

“In 2020, if present density of population ismaintained, urban areas would be tow and a halftimes more expensive than they are now.”

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Business world today is a buzz withterms such as Carbon credits,

Kyoto protocol, CER’s (CertifiedEmission Reductions), CDM (CleanDevelopment Mechanism) etc. To beginwith, all these terms are related to aninevitable evil known as GlobalWarning caused by emission ofgreenhouse gases(GHG) and thevarious framework has been put in placeto counter the impact of GHG.

The UN recognized this danger andcalled for an international effort to fightglobal warming. This effort is pickingup steam now, with the impact of globalwarming being seriously experienced invarious pact of the world.

The IPCC (International Panel onClimate Change) was found in 1988followed by UN Framework conventionon climate change (UNFCC) in 1992.Inpursuance of IPCC, the KYOTOPROTOCOL was signed to binddeveloped countries to reduce GHGemission level by 5.2% by 2012 fromthe 1991 levels. There countries havebeen classified as Annex countries andwere major polluters in the past.Interestingly, USA and Australia,although the largest polluters, have notsigned the Kyoto protocol. India issignatory to Kyoto protocol as Annex 2country, without any obligation to

reduce emission. Worrying words forIndia who is in real danger from climatechange in spite of good or remarkableeconomic growth.

A rise in global temperature by 3 degreeCelsius will melt most of the Himalayanice & snow that feeds the rivers in NorthIndia, could leads to major dislocationin monsoon and make peninsular Indiavulnerable to rising sea level.

But while India can’t avoid the risks thatcome from global warming, economistand environmentalist argues that therich countries should bear the bulk ofcost of cutting emission of GHG andthat India should insist on global policynegotiations. Rich nations GHGemissions rose near to all time high in2007, did by US and Russian gainsdespite curbs meant to slow globalwarming.

The June summit of the G8 group ofrich countries in Germany (Indianrepresentation by PM ManmohanSingh) has set a target of, hacking thecarbon- dioxide emission of 400-450gigo tones per capita by the year 2050.If emissions are halved from theircurrent levels, then per capita levels willbe between 2-3 tonnes.

Economist says most rich countries areway above that level. The US per capita

World is Sitting onVolcano of

Global WarmingRASHMI GUPTA

PGDM-FT (2007-09)

CO2 emission of around 20 tonnes, theEU (European Union) has around 10 ton& China has 3.5 tonnes. In contrast,India has per capita emission of onlyone ton, far below the 2050 target. It islikely to step below the 3 tones leveldespite a growing economy & risingenergy consumption.

While government will have to agreeon emission limits, it is said that othertwo long-term solutions are CarbonMarkets and New technologies such asCarbon Capture. And two are linkedCarbon market are part of the cap-andtrade approach to countering climatechange. Government imposes pollutionlimits or caps. Those who pollute morethan permitted will have to buy the rightto indulge in excess pollution fromothers who have not used up theirpollution permits. There permits aretraded in global markets for carbon.

But the question arises, whether poorcountries like India can sacrificeeconomic growth now to protect theenvironment in the future. I think, thisis not about stopping growth butmoving to low carbon growth. Also,new 11th Five years plan focus onenergy efficiency. And ourpolicymakers are sensitive to theseneeds.

World is Sitting on Volcano of Global Warming

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ELDORADO April 2008

When Gandhiji assumed India’sleadership, only 2 percent of the

women had any kind of education andwomen did not have an identity of theirown. Gandhiji wanted women tooutgrow the traditional responsibilitiesand participate in national level affairssuch as education, media, art andculture, science and technology.

Woman today are emerging as apowerful force because of their abilityto do so much so well. They arebreaking the shackles of traditionalsocietal traps and conservatism. Shewants to be as assertive and strong asIndira Gandhi. Woman today talk aboutresponsibility not sacrifice. Theybelieve in their own potential. The last20 years have witnessed an explosionof growth opportunities for woman inindustry, especially at the decision-making level. Today more and morewomen have the chance to walk thecompetitive edge and prove that theirabilities are at par and many times betterthan those of their male counterpart.

Here is the new generation of women,a generation striving for success. Lookaround you, you’ll find women in everypossible role. Today women are movinginto a new mind zone. They are the newliberalists, in relationship as well as incorporate corridor. Besides the

Flight of IndianWomen

SAVAN KUMAR JHAPGDM FT (2007-09)

traditional areas of education, healthand hospitality, women professionalsare now increasingly contributing to thethriving new sectors of finance, IT,media, management and research.There is new-found confidence andexciting awareness of the possibilitiesbefore women and it seems that womenwant to make up for the lostopportunities. They are being the iconof people. They are writing the newscript of success in each and every walkof life, be it the arena of social work,Politics, Industry, Aviation, BPO’s ,Sports or the glamour world. In everysphere of life her mighty presence isfelt.

Many of corporate India’s womenbusiness leaders such as ChandaKochhar (Deputy MD of ICICI Bank),Nainalal Kidbai (CEO of HSBC India),Vidya Chhawariya (Jumbo Group) andKiran Mazumdar Shah (Founder &Chairman of India’s largestbiotechnology firm Biocon) havefigured in fortune list of world 50 mostpowerful women. India-born Pepsi Co.global CEO Indira Nooyi was namedthe most powerful business women inUS by the same magazine. Kiran Desaiwho won the “Man Booker Prize” in2006 and is, arguably the most talentedauthor of her generation. How we canforget the Boola Choudhari who

crossed ‘Seven Sea’ and brought laurelsto home. Apart from all these proudladies we have Sangita Reddy(Executive Director, Apollo Hospitals),Anu Aga ( Director, Thermax) SaniaMirza (Sports, Tennis), Anju BobyGeorge (Long Jumper), Aishwarya Rai(Film), Kiran Bedi ( retired IPS officerand social reformer), Sheila Dikshit(politician), Medha Patekar (socialactivist)……..and many more who aredoing excellent job in their respectivefields and had added to the glory of thisnation.

In the Working Zone we are witnessingthe rise of boardroom geisha. Nowwomen are demanding top positions andgetting them because they deserve it.The fairer sex has got the expertise inhandling multiple thingssimultaneously – family, relationshipand work. Now what we are seeing is aface of new confident woman who isall set to shoulder her responsibilitywith her male counterpart with fullvigor. I consider Indian women werealways powerful. Now they are gettingbolder and are becoming moreaggressive when it comes to take on anyopportunity. Government and thePrivate Player should keep themomentum going on by providing equalopportunities for women in all spheresof life because a country can never rise

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63

without the contribution of 50% of itspopulation.

The status of women in India has beensubject to great many changes over thepast few millennia. From a largelyunknown status in ancient times throughthe low points of the medieval period,to the promotion of equal rights bymany reformers, the history of womenin India has been eventful.The steadychange intheir position can behighlighted by looking at what has beenachieved by women in the country:

• 1905: Suzanne RD Tatabecomes the first Indianwoman to drive a car.

• 1916: The first women’suniversity, SNDT Women’sUniversity, was founded onJune 2, 1916 by the socialreformer Dhondo KeshavKarve with just five students.

• 1927: The All India Women’sConference (AIWC) wasfounded.

• 1994: Harita Kaur Deolbecomes the first Indianwoman to perform a soloflight.

• 1951: Prem Mathur becomesthe first Indian womencommercial pilot of theDeccan Airways

• 1959: Anna Chandy becomesthe first Indian woman Judgeof High Court

• 1966: Captain Durga Banerjeebecomes the first Indianwoman pilot of the stateairline, Indian Airlines.

• 1966: KamaladeviChattopadhyay wins RamonMagsaysay award forcommunity leadership.

• 1966: Indira Gandhi becomesthe first woman PrimeMinister of India

• 1970: Kamaljit Sandhubecomes the first Indianwoman to win a Gold in theAsian Games

• 1972: Kiran Bedi becomes thefirst female recruit to join theIndian Police Service.

• 1989: Justice M. FathimaBeevi becomes the firstwoman judge of the SupremeCourt of India.

• November 1997: KalpanaChawla becomes the firstIndian woman to go intoSpace.

• September 21, 1992: PriyaJhingan becomes the first ladycadet to join the Indian Army

(later commissioned on March6, 1993)

• 2004: Punita Arora becomesthe first woman in the IndianArmy to don the highest rankof Lt General.

• 2005: Manndhir Rajput, a 34-year-old woman fromLudhiana, Punjab becomes thefirst Indian woman to becomean engine driver of trains withthe New South Wales RailCorporation, Australia.

• 2007: Pratibha Patil becomesthe first woman President ofIndia

• India has the world’s largestnumber of professionallyqualified women.

• India has more female doctors,surgeons, scientists andprofessors than the UnitedStates.

• India has more workingwomen than any other countryin the world. This includesfemale workers at all levels ofskill – from the surgeon andthe airline pilot to busconductors and meniallabourers.

Flight of Indian Women

“India has the world’s largest number ofprofessionally qualified women.”

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ELDORADO April 2008

In 1984, the United States Departmentof the Navy Personnel Research andDevelopment Center began researchingthe use of Statistical process control(SPC) and quality managementmethods for potential benefit in makingperformance improvements. This workincluded a detailed examination of thequality management approachesadvocated by Philip B, Crosby,Edwards Deming, and Joseph Juran.

The result was an approach thatcombined SPC principles with thephilosophy of W. Edwards Deming.This approach was first tested at theNorth Island Naval Aviation Depot.

The name “Total Quality Management”(TQM) was first used by theDepartment of the Navy in 1985 whenthey were starting to introduce themethods that had been successful in theNorth Island test to other Navalinstallations.

TQM is considered a managementstrategy to embed awareness of qualityin all organizational processes. TQM isnot limited in its application and hasbeen widely used in manufacturing,education, government, servicesindustries, as well as in NASA spaceand science programs.

Total QualityManagement

Quality assurance through statisticalmethods is a key component in amanufacturing organization whereTQM generally starts by sampling arandom selection of the product. Thesample can then tested for things thatmatter most to the end users. The causesof any failures are isolated, secondarymeasures of the production process aredesigned, and then the causes of thefailure are corrected. The statisticaldistributions of importantmeasurements are tracked. When parts’measures drift into the error band, theprocess is fixed. The error band isusually tighter than the failure band.The production process I thereby fixedbefore failing parts can be produced.

It’s important to record not just themeasurement ranges, but what failurescaused them to be chosen. In that waycheaper fixes can be substituted later(Say, when the product is redesigned)with no loss of quality. After TQM hasbeen in use, it’s very common for partsto be redesigned so that criticalmeasurements either cease to exist, orbecome much wider.

It took people a while to develop teststo find emergent problems. One populartest is a “life test” in which the sampleproduct is operated until a part fails.Another popular test is called “shake

and bake”. The product is mounted ona vibrator in an environmental oven, andoperated at progressively more extremevibration and temperatures untilsomething fails. The failure is thenisolated and engineers design animprovement.

A commonly-discovered failure is forthe product to come apart. If fastenersfail, the improvements might be to usemeasured-tension nutdrivers to ensurethat screws don’t come off, or improvedadhesives to ensure parts remain glued.

If a gearbox wears out first, a typicalengineering design improvement mightbe to substitute a brushes stepper motorfor a DC motor with a gearbox. Theimprovement is that a stepper motor hasno brushes or gears to wear out, so itlasts ten times longer. The stepper motoris more expensive than a gearbox. Theelectronics is radically different, butequally expensive. One disadvantagemight be that a stepper motor can humor whine, and usually needs noise-isolating mounts.

Often, a TQMed product is cheaper toproduce because of efficiency/performance improvements andbecause there’s no need to repair deed-on-arrival products, which represents animmensely more desirable product.

NITIN VERMAPGDM-FT (2007-09)

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