Showing posts with label Arindam Chaudhuri. Show all posts
Showing posts with label Arindam Chaudhuri. Show all posts

Wednesday, November 24, 2010

Thomas Mann to Ludwig Lewisohn

German essayist, cultural critic, and novelist, who was awarded the Nobel Prize for Literature in 1929, Thomas Mann can easily be termed as one of the most enlightened intellectuals of the Nazi era. Thomas Mann moved to Switzerland in 1933 shortly after the Nazis had come to power and begun a campaign of abuse against him. He was formally expatriated in 1936. Among Mann’s most famous works is Buddenbrooks, which appeared when he was 26. In the following letter written to fellow writer Ludwig Lewisohn, Mann laments the death of his friend Menno Ter Braak.

Dear Ludwig LewisohnSeptember 30, 1940
Dear Ludwig Lewisohn,

Your book has arrived, has occupied me a good deal, and I would have written to you sooner were it not that my morbidly swollen correspondence, the product of these times, some days keeps me from my own writing. Today I received the news—or rather the confirmation of a report I had not yet brought myself to accept—that a good friend of mine, the Dutch writer and eminent critic, Menno Ter Braak, took his own life when the Germans invaded. It’s heartrending. Two other important Dutch writers have likewise fallen victim to this new variety of world history. The very best are those who are destroyed—which I suppose is only natural when ultimate baseness is victorious. Much trash has found refuge in America because such people raise a ruckus, while the nobler types go under silently. Your book, now: I read it some time ago, very quickly, almost at one sitting, and understandably with keen interest, for American as it is, it breathes in, if not out, a most European atmosphere. In literary terms it is close to the French, English, German spirit, so that I felt at home with it. In addition there was the emotion aroused by the human document—a somewhat mixed emotion, I will have to add, inclining toward the side from which, evidently, a state of being filled with one’s own ego, one’s own fate, one’s own errors and own happiness, one’s own loving and being loved, which antagonizes people—not only out of ill-will and a petty insistence on discretion, but also out of an irritated pudeur. And at least in times of great public tribulations, when there is a certain justification for that feeling. I might put it this way: The book really needs the shield and protection of posthumous publication. Let us assume that your considerable literary achievement were crowned and completed by a few more powerful works; that after you had become entirely what you are, you had departed this earth and friends had published these pages from your posthumous papers—in that case not only would there be nothing to be said against them, but they would be a real contribution. But as it is now, coming out in the midst of life, the book does constitute, if you will (I don’t “will” at all, but others do, so it seems, and I cannot entirely blame them) a kind of imposition, an act of naïveté, which to be sure is probably a condition for your productivity and without which your works (for this is scarcely a work) probably would not have been written—and yet the nakedness does, after all, have something disturbing about it.

As you see: interested, moved, but not entirely in agreement—that is how I feel. A public statement of mine on Haven would necessarily turn out somewhat tortuous, and since I have reservations about the book’s public existence, I have even more about my giving a public opinion on it. Thanks for something so personal had better remain personal. The occasion for my testifying once more to your literary gifts will come again—I prefer to wait for a new work cast more objectively, confident that you will not make us wait long.

Yours

TM

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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Thursday, February 19, 2009

AMD is fighting a similar battle with Intel in India


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The US too is trying to daunt its biggies from indulging in such monopolistic malpractices. In an ongoing case filed in the US District Court of Delaware, microchip player AMD has charged market leader Intel with pay-offs to Acer, Dell and other major Japanese manufacturers to not entertain similar offers from AMD. In fact, the Korea Fair Trade Commission, after two years of investigation, has already fined Intel $25.4 million in June this year for offering rebates to South Korean computer companies, in a bid to undercut AMD.

AMD is fighting a similar battle with Intel in India, alleging that most state and central government procurement tenders demand only Intel chips in PCs. However, unlike the west, India’s regulatory mechanisms are almost non-existent. The decades old MRTP Act has no claws and despite the New Competition Act of 2002, the Competition Commission of India is still an elusive chimera, for now functioning merely as an advocacy body with limited staff on its rolls.

Those in favour of the Jet-Kingfisher alliance, of course, relate back to the days when the European Commission cleared a similar cooperation pact between Lufthansa of Germany and Scandinavian Airlines System. But they forget that the region had adequate deterrence mechanisms in place. The Lufthansa-SAS alliance was approved on the pre-condition that the airlines take steps to ensure the link does not turn into a monopoly (the carriers had to give up certain slots, flights and agreements with other airlines).

Dealing with cartels has become an omnipresent threat to the global economic well being, especially in these inflationary times. Studies suggest that recent cartels raised prices in Japan by 16.5%; in United States, estimates suggest that hard core cartels can cause prices to up by over 60-70%. Clearly, a lot is at stake for the Indian economy, also tethering on the brink of sky-rocketing prices. Of course, a lot of it is simply attributable to the global economic recession, but then it has always been tough to establish cartels and collusions. If politics makes for strange bedfellows, businesses take the cake for sleeping with the enemy… uhm, figuratively speaking, of course!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON

IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
Why Study Abroad When IIPM Gives You 3 global Advantages!


Tuesday, January 20, 2009

A tale of two cities


IIPM’s 36th Glorious Year of Academic Excellence

A similar story unfolds for India; albeit with a few differences. Given that Wall Street has sneezed and expectedly even the Indian economy has caught the proverbial cold, sales momentums have turned sluggish post January 2008. Predictably sectors like auto, consumer durables, real estate and financial services have been the most affected by the economic slowdown and many have consequently also reduced their ad spends, some by as much as 40%.

TVS has cut down on its ad expenses by 35%, while Mahindra & Mahindra has reduced by 6%; Videocon and Omaxe have brought down their ad expenses by 9.3% and 21.65% respectively. Others that have not reduced their advertising onslaught, instead upped it in the time of crisis are not faring much better either. Maruti Suzuki accelerated its ad expenses in FY08 by 10% over FY07, but its ad expenditure to sales ratio over the same period has come down by 9.66%. The same ratio for Mahindra, TVS, Videocon and Omaxe has come down by 18.24%, 22.12%, 20.79% and a whopping 58.80% respectively.

Given the tragic chain of events, even the ongoing festive season gives little reason to cheer. Reason? Most companies are already lagging behind in achieving their annual sales and revenue targets. The festival season is the only chance now before year closing that they can hope to achieve a semblance of respectability for their balance sheets.

But, it’s also a catch-22 situation. If despite high input costs, lower margins and the recent increase in ad rates, they continue with their advertising blitz as planned at the beginning of the year, they would literally be playing a gamble with their monies, given that consumers may still not buy due to inflation, high interest rates and exchange rates differentials. On the other hand, if they don’t advertise as planned, they will lose out on even the little chance of dragging up their targets. Marketers would therefore possibly be spending many additional hours closeted in their board rooms, scratching their heads over ways to balance their ad spends vis-à-vis sales (revenue) potential.

For the consumer durable sector specifically, the going is becoming increasingly tough. After all, every year more than a third of their sales happen during the festive season (October-December) and this festive season, the outlook is anything but rosy. Admits V. Ramachandran, Director (Marketing & Sales), LG Electronics India, “Profitability is hit for most of the sector. As far as LG is concerned, we’ve already crossed our budget of Rs.100 crore and will continue to increase our advertising expenses to tide over these tough times.” To make up for the fast-sinking revenues, LG (just as Samsung, Philips, et al) has decided to do away with the traditional marketing gimmicks, like discount and gifts, during this festival season. Clearly, while reallocation of assets is being done, companies will necessarily have to continue advertising to remain in the popular mindset during and after slowdown.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...


Thursday, January 15, 2009

“We believe in discounting the whole store”


IIPM : EXECUTIVE EDUCATION

R. SUBRAMANIAN, FOUNDER & MD, SUBHIKSHA

In a free-wheeling conversation with 4Ps B&M’s pawan chabra, R. Subramanian, Founder & MD, Subhiksha shares his views on the changing retail scene in India
...

How is Subhiksha different from other retailers in the country?
SubhikshaR. SUBRAMANIAN, FOUNDER & MD, SUBHIKSHA has an Indian model of retailing. That means Subhiksha does not have a business model which has been copied from abroad. In fact, we don’t believe in a model in which we sell 20 items and give only two items at a discount and the rest 18 at a normal MRP like many other retailers in the country are doing. Rather, we at Subhiksha believe in discounting the whole store so it does not matter to you if you come to us today, tomorrow, or for that matter even a month later. You will always find our prices much lower than other retail chains in the neighbourhood. And this Indianised model of retailing is working very well in the country. We believe that hypermarkets are still not suitable for the Indian market and vouching the fact you can see many more retailers are now moving towards the Subhiksha way of retailing in the country. The product offering at a lower cost is the competitive edge that Subhiksha has over its competitors. We certainly offer value for money to the Indian consumers.

What is the current turnover of the company and what are your expansion plans for Subhiksha?
We currently have 1,580 stores in the country and we are planning to reach a figure of 2,200 by the end of the current financial year. This number includes both departmental and mobile stores. Well, as far as our turnover is concerned, we had clocked a figure of Rs.23 billion last year and this year we are hopeful of reaching somewhere between Rs.40-45 billion.

What about your expansion plans in the consumer durables arena?
We are planning to open 150 consumer durables stores by the end of the current financial year and we will be investing Rs.6 billion in this venture. But our competitive edge will remain the same as we will be aiming at providing goods to the consumer at the lowest price available in the market.

It’s often said that Subhiksha’s store ambience is not up to the mark when compared with others. What do you have to say on that?
I will not say that the statement is completely false but it’s our deliberate strategy. Certainly our stores are not air-conditioned but then you should understand that we are catering to the consumers at the bottom of the pyramid. Here the consumer is looking at lowest prices and not whether the store is air-conditioned. However, our stores are still clean and tidy and better than the kirana stores.

What’s your take on the power of in-house brands? Do you think in-house brands can pose a threat to external brands?
There is no denying that in-house brands are more profitable but you cannot sustain without external brands. As far as Subhiksha is concerned, in-house brands comprise 20-25% of its total turnover. We focus on doing in-store advertising for our in-house brands as it definitely influences the buying behaviour of the consumer.

What are your plans for the IPO? Can we expect it by the end of this financial year?
We are not coming out with an IPO; rather we would be merging with a company called Blue Green Constructions, which is a listed entity on the Madras Stock Exchange. Following that the company will be renamed as Subhiksha India. We have already bought a majority stake in the company earlier this year. For the financing part, FIIs are more than willing to invest in our company. So as such there is no problem of cash crunch.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Friday, January 09, 2009

At the cost of running out of adjectives to collectively define them, we’ll sum them up in three words - dynamic, intelligent and masterful


4Ps Power Brand Awards 2007

More often than not, they are jet setting round the world. When in town, they are hopping from The Renaissance to The Taj to JW Mariott for close door meetings. They are closing deals worth billions of dollars every week. Cameras and news-hungry journos swarm whenever they make public appearances. They are Anil Dhirubhai Ambani’s key guys, giving shape to his dream of straddling virtually every media and entertainment outlet conceivable, and then some more. At a time, when businesses are betting on outsourcing their supply chains, in a clear departure from established paradigms, Anil Ambani (and his deep pockets) wants to own and run the entire value chain of India’s entertainment agglomerate. And helping him do excatly that are his band of BIG men!

Rajesh Sawhney: Ask Rajesh Sawhney, CEO, Reliance Big Entertainment, who believes that the last three years with Ambani junior have been the best years of his life, and he quickly rattles off the underlying ADA vision behind all the caffeine induced late nights, cross globe flights and starry-eyed investments in India and abroad. “We are trying to build the biggest entertainment brand not only in India but across the globe,” he says. And Sawhney knows a thing or two about building big brands. After all, with his 14 year stint with The Times of India Group – where he created successful businesses across publishing, radio & TV, retailing, e-commerce and more – Sawhney has a proven track record behind him. An alumnus of Harvard Business School, over the last two years, Sawhney has successfully transformed the nascent BIG Entertainment into a brand that spans content and distribution channels across cinema (Bollywood & Hollywood), television (channels, animation, DTH services), music and home videos, to radio (FM stations), Internet (social networking) and value-added services on mobile.

“Many of the pieces that we have been working on for the last two years, like Zapak, BIGAdda, BIGflicks and BIG 92.7FM are now connecting together. The next three years will be very significant for Reliance BIG Entertainment’s revolution in the media industry,” shares Sawhney. India’s entertainment industry is worth Rs.225.9 billion and expected to grow at 22% to touch Rs.600 billion by 2012. And BIG “would like to capture 15-20% of the new value that the industry creates,” says Sawhney. To achieve this ambition, Ambani perhaps could not have found a better man than Sawhney, a perfect team leader, who over time has roped in an army of ambitious men from the corporate world to head Big Entertainment’s various forays into media, entertainment and online verticals.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Tuesday, January 06, 2009

‘Fly’ing with mobility!


IIPM’s 36th Glorious Year of Academic Excellence

The unique marketing strategies of the company have played a key role in knocking the minds of many Indian consumers. Fly is intelligently targeting the youth and other sets of progressive consumers and there is still a lot of scope for the company to enhance its offerings. The growth in the retail sector has worked favourable for the company as well, as Fly has tied up with players like Subhiksha, The Mobile Store, RPG Cellucom and many more for its in-store advertising strategies. When asked about the company’s plans for a TVC, Sougat Chatterjee, Chief Marketing Officer, Fly Mobile opines to 4Ps B&M, “We have no plans to come up with a TVC right now as there is no point in coming out with a TVC before we can expand our reach.” Fly is currently present in 10,000 retail counters and plans to expand its reach rapidly by the end of this fiscal. The company’s marketing budget is around Rs.30-40 crore and the figure is expected to reach a Rs.100 crore by the end of this fiscal year.

In the current scenario, where the market has become mature and does not accept brands at face value, Fly is able to make a mark in the minds of the Indian consumer. All this has been achieved despite the cut-throat competition in the industry, where majors like Nokia, Sony Ericsson and Motorola are in a better position to meet market requirements faster. Some innovative strategies have done wonders for the company and Fly has been successful in establishing its brand credibility to a certain extant. The company grabbed many eyeballs when it came out with a handset called ‘Hummer’, as many Indians were enticed by the legendry American brand. Also, the handsets with dual sim card capability are making a lot of waves in the Indian handset market. “When we came out with ‘Hummer’ we knew we will have a different set of customers’ altogether,” adds Chetterjee. Even the co-branded phones with Reliance Communications have done well for the company which is now planning to roll out many more such handsets by the end of this fiscal year. However, the company will have to be extra careful while rolling out co-branded handsets as this can very rapidly take the brand equity of the company in any direction. “We are very choosy when it comes to co-branded handsets, as in this category, if the product is good it can reach huge number without the strong brand power,” says Khanna.

Looking at all the developments and diligent strategies at work, Fly as a brand has defiantly come a long way. The competition is however well versed with the Indian terrain and cannot be taken lightly. It therefore remains to be seen how being innovative work in the long terms as compared to the plain old concept of brand equity.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...


Wednesday, December 31, 2008

If greed and envy feed the sale of consumer products, it’s fear that feeds an election win.


Now IIPM's World-Class Education... for everybody!!

Even the product trappings that Obama and McCain bring to the table are reminiscent of the age-old ‘find the gap in the market and plug it’ strategy of marketers. Democratic Obama is flying the ‘Say no to Iraq War’ flag, positioning himself as the ultimate messiah for the floundering US economy. In a bid to plug his weakness – his alleged inexperience in foreign policy matters – Obama has signed up the seasoned Delaware Senator, Joe Biden as his running mate. “With global troubles swirling around even as Iraq recedes; Obama has got to get his bona fides in order. His Achilles’ Heel is foreign policy,” Democratic strategist Doug Schoen told 4Ps B&M.

Strategists in Obama’s camp are hoping that the move will also serve to notch up Obama’s approval ratings among white, middle class professionals that seemed tilted toward Hilary Clinton’s candidacy during the Democratic nomination race between the two. “Biden hails from Scanton, is Catholic, and can help Obama connect with those voters,” believes Daniella Gibbs Leger, VP-Communications, Centre for American Action Fund.

Enlarging the voter (consumer?) base is a key strategy for Obama’s aides. Watch him doing the rounds and Obama’s special campaign touches with minorities, suburban women, senior citizens will not go unnoticed. Obama’s persuasion camps in Ohio, stacked with a slew of phone machines and glib talking volunteers, have been dialling unregistered voters non-stop to gain their vote. Reportedly, just as credit card companies do data mining to entice more users into their ambit, Obama’s campaign managers have identified at least 50 million unregistered voters across the country by comparing available registration lists with consumer data bases of companies.

Even negative political advertising, usually left to later in the poll season, is at its peak. If McCain’s political strategists have aired ads impugning Obama’s patriotism in relation to the War on Iraq; Obama has already spent over $27 million (as opposed to $21 million of McCain) reassuring voters about his character and experience. According to the Wisconsin Advertising Project, the McCain-Obama standoff is already becoming the most expensive presidential race in American history.

But the cake for the murkiest political advertising race to the White House would undeniably go to the 2004 slugfest between George Bush and John Kerry. The War in Iraq was the most contentious issue at the time. MoveOn.org, an anti-Bush and pro-Kerry independent political organisation, created quite a stir, with TV ad spots in key states likening Bush to Adolf Hitler.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...


Monday, December 08, 2008


IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA

All in all, there are still three critical challenges that the company needs to address if they even wish to make a mark. First, word of mouth can be a nice minimum cost tactic, but it can never substitute a hard sell promotional strategy, something the company lacks badly. Second, as CEO Saxena accepts, it would be extremely tough to change the mindset of people with respect to either using their services, or better, to pay a significant amount of service fee.

Third, the company has till date not signed up with even one of the cellular phone service providers for providing their service as a part of the monthly package for a cellular subscriber. There seems to be no logical reason for not having undertaken the same. And fourth, but not the least, is the fact that till the time industry dynamics – like the 3G spectrum – changes positively, innovative offerings will have to be put on hold for a simple reason; lack of bandwidth.

Be that as it may, the conclusive evidence clearly points to the fact that in the technology industry, the first movers’ advantage has favoured the brave! And Netcore Solutions seems to be reaping the same. One would wait to see how well they are able to diagnose the pulse of Indian mobile users, before passing a final judgement on their future. But whatever might come of their endeavour, at least ‘Teleputing’ is a word that is not going out of service in the near future; perhaps never! George Gilder, you wouldn’t have imagined the nature of this beast in your wildest dreams!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
IIPM Ranked No. 1 B-School In Global Exposre - Zee...
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...


Friday, June 27, 2008

Monopoly on performance

By contrast, private equity shareholders – particularly those in topquartile firms – behave like owners. They understand the companies they own and drive them to restructure more quickly and invest more deeply. They also motivate their managers strictly on performance. That mindset, along with the levers that private equity has used successfully before, will likely play a key role in the plan to transform hrysler. Indeed, when private equity succeeds it presents an enormously compelling business model. Over the 35 years from 1969 to 2006, the top quartile US private equity funds had annual rates of return ranging from an average of 39% to well over 200% through good times and bad. It doesn’t always go according to plan, of course. And some boards are pushing back against the notion that private equity firms have some sort of magic dust. In April, British supermarket chain J Sainsbury resisted repeated offers from a consortium of Blackstone, TPG and Kohlberg Kravis Roberts & Co. because it felt management should be able to solve its own problems without taking on the massive debt involved in going private. Others have concluded the same thing.

All the same, active investing has set a new standard: PE is becoming an inescapable benchmark of global business performance for CEOs and boards of directors. That’s part of the lesson behind the Chrysler deal. Many boards are reviewing the “leveraged buyout case,” asking themselves, “What would we do differently if we were privately held?” No one business model holds a monopoly on performance or sustained profitability. Still, the results among the best private equity firms speak for themselves. A carefully planned private equity deal can be bolder, faster and more transformative while publicly listed companies are typically slower and must push that much harder to take the same level of risk. Until that changes, the private equity business model will keep growing – and more iconic brands are likely to follow Chrysler and see their destiny in private hands.


For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

PE funds to act like owners

The danger is that public funding will constrain the ability of PE funds to act like owners – that compliance with regulations and reporting requirements will slow down or stall PE’s fast attack. After all, that’s the advantage that today’s private equity players hold – and the reason Chrysler’s stake holders have decided to go private. According to analysis by Bain & Company, the global business consulting firm at which we work, private equity firms still control assets that are worth less than 3% of the assets held by the world’s public companies. What’s more, today’s private equity investors – pension funds, insurance companies, wealthy individuals and endowments – are by and large the same investors that own the most stock in public corporations. By the same token, the managers of PE-owned companies come from the same pool of talented executives than run the best public companies. Same investors, same management talent. So where does PE’s real advantage lie? If you boil it down to one thing, it is the behavior of shareholders. Public-company shareholders behave like, well, shareholders. They are largely passive and slow to react. Or they cast their vote by dumping their shares.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Private equity funds are now rapidly pursuing public equity funds

Q: In mid-May, Alliance Data Systems joined the club of public companies going private, accepting Blackstone Group’s $6.4 billion bid. Around that time, Chrysler’s major stakeholders, including the United Auto Workers leadership, decided that the automaker’s best chance to turn around its business lies in working out its problems under private ownership. So why are the leaders in private equity moving in the opposite direction, tapping the public equity markets themselves? A: The answer, in one word, is differentiation. Money, after all, is rapidly becoming a commodity, and leading Private Equity (PE) funds are looking for ways to stand out even further from the crowd. Top funds want to do deals of almost any size on their own so they can apply their particular approach to improving company performance without dilution by a consortium of investors. Access to public equity also means that funds can be more nimble when pursuing deals in different parts of the world with different types of assets. In Japan, for instance, PE firms often need to structure deals with more debt products to secure capital. In India, minority equity stakes are the key to entry. In China and Brazil, the current focus is on infrastructure investments. Pursuing those opportunities involves a range of risk and return that reaches beyond the typical limited-partner agreements that private equity firms strike with institutional investors. For certain types of Initial Public Offerings (IPOs), going public gives PE firms evergreen sources of capital. They don’t need to waste time and precious human capital on fundraising, a time-consuming process that takes some of the vital players in a PE firm off the field every few years for months at a time. Finally, the leading funds have clearly developed their own brands. Taking a page from their own playbooks, they see ways to use their brands to raise more capital, extend their range and pursue more opportunities.

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative