AVIVA – a palindrome, and it sounds good too.

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“We constantly innovate to launch products that benefit our customers,” says Vivek Khanna, Director (Marketing), Aviva Life Insurance, India. ‘Innovative’ is something which you can truly call this pioneer of concepts which has radically changed the insurance landscape in the country. To add to it, differentiation has also been its hallmark; and at a time when most private life insurance companies launched humdrum products, Aviva walked the untrodden path and launched its unique ‘With Profit Fund’, funds which guarantee that its selling price will never fall! Now that’s something that India loves to hear! Its products have a compelling proposition which appeals to the ever demanding and value conscious Indian customer. With immense potential in the insurance sector, Aviva looks to be making hay while the sun shines. To reach out to the masses, it has also associated itself with BASIX and other NGOs, and today, has successfully insured the lives of close to nine lakh Indians through initiatives like Grameen Suraksha et al. Well, good tidings it is, for its stakeholders then. Insuring maximum lives, for maximum success!

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Source : IIPM Editorial, 2008

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

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Want a retail life in a ‘Metro’?!

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Metro AG tread where others failed to... and shrewdly so!

Wal-Mart, Carrefour, Tesco and other kings in the retail kingdom are giving what it takes to make a mark in the lucrative Indian retail industry. Unfortunately, all that can be said with respect to the levels of success attained is – it could have been better! Much better! “And why?” you ask? Well, just when everything around them seemed hell-bent to support their cause, the bigwigs got stuck in the midst of all possible calamities – be it the policy-makers’ or local traders’ uproar or an inability to get along with an Indian partner; they have experienced it all. Whatever tactics they tried has in fact worked against them and these retail Alexanders who have almost spread their operations quite spectacularly across the globe are finding it hard to conquer the Indian terrain.

After every futile attempt they remain unshaken and can be seen devising a newer gameplan. Well, standing ovations for their steadfast spirit but for what reasons are these global giants dying to enter the market? The reason is (and no surprises here, please!) – their love for money! The giants want to be a part of story which currently stands at $300 billion and is expected to grow to a more-than-spectacular $427 billion by 2010 and literally an El Dorado worth $637 billion by 2015 (KSA Technopak report). Confirming the happy tale, Jigar Valia, Analyst, Parag Parikh told 4Ps B&M, “The sector is undergoing a phenomenal change and once the international biggies enter the market, it will undergo a significant change...”

But while there is the story of ‘sour grapes’ on one end, there is also the ‘seen that, done that’ reality show. And leaing the pack of successful invaders is the street-smart Metro AG (Germany’s leading retailer). Unlike others, it decided to work around the given environment and adjusted itself in the best possible manner. Sensing the rigid policy structure, Metro intelligently entered the wholesale cash & carry business (where 100% FDI is allowed). The company started its operations in 2003 with a cash-and-carry store in Bangalore, and is now looking to spread its arms across other metros. At present, the company runs three stores in Bangalore and Hyderabad. More importantly, the move has helped the company in setting up its strong base and has strengthened its back-end operations, which is a strategic necessities for success in this domain. Today, Metro has attained a significant lead as compared to the crowd of retail wannabes on the Indian soil. Moreover, if norms are relaxed by policy-makers, Metro will have a considerable advantage as compared to other global peers. Jigar Valia explains this as, “One cannot miss the India story and Metro has been prudent enough in entering the market via the wholesale business. Preently, almost everyone is considering this as an option…”

So, after Wal-Mart, the latest to copy Metro will be Carrefour. There is also the happy fact that despite a lot of copy-cats, Metro will not face any crunch since there’s enough space to accommodate all. The next phase of the war will therefore be decided by who transform itself into a retailer from a wholesale player in a seamless fashion. At present, Metro AG has quite a lead, but can one underestimate competition?! Surely, Metro doesn’t!

Siddharth Nahata

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Source : IIPM Editorial, 2008

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

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Maximize your wealth: Put on your m‘caps’!

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Where to invest to maximise your returns? Are large- cap companies the answer, or are mid and small cap companies the potential gold mine? Dinesh Thakkar tries to answer the perennial investor dilemma.


The stock market is synonymous with wealth creation and maximisation. So, for the purposes of this topic, I would like to confine myself to one criteria – market capitalization of the company. Selecting companies based on mcap is not easy: here one has to bear in mind that companies achieve size and scale only over a period of time. Thus, we can conclude that companies of a larger scale have been operating for several years and have weathered rising and falling markets and fluctuating economic cycles. In contrast to this, mid and small-cap companies would have relatively lesser experience.

Apart from this, most large-cap companies have an established track record of earnings because of their loyal base of consumers supporting their products, stronger balance sheets and cash flows and better credit ratings because of their market standing. In most cases, they also have a competitive advantage in the marketplace because of better cost controls, strong marketing capabilities, and so forth. In contrast to this, the non-large-cap companies not only have to compete on a much stronger level to sustain their market position, but they are also subject to higher risks generated by fluctuating industry cycles.

While large-cap companies have several advantages, their smaller or newer peers often have the advantage of greater potential growth prospects, as there is a greater possibility that these companies can double their revenues and profits over the next few years. Finding such companies may require a lot of research, and investing in them may also require insights into the way the company works, its long-term goals, and the mechanics of the stock market. Thus, the determination of one’s risk profile becomes an important element, and you should avoid such involvement if you are not a professional.

To conclude, investing is all about maximizing wealth (the relatively risk-free way) by investing in safe, potentially profitable corporates with a good reputation, a proven track record, and a future that seems assured. India is a land of constant new opportunities which are emerging as a result of the progressive growth of our economy, and the opening up of new avenues of business in the corporate sector. If we indeed have to put value on future opportunities, the sum would run into crores and crores of rupees, but to seize and realize these opportunities, corporates should be able to raise huge capital. They must also be capable of creating the right business model to generate profits from it. Who else than a big corporate house having large scale and size to be able to do this?

Source : IIPM Editorial, 2008

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

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Can they pull off a full circle?

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It’s time BPL & Onida wake up from their slumber, before they fade into oblivion...

Once upon a time there lived a king ruling over millions in his estate. But then suddenly foreigners invaded his secure land and he was overthrown from his high-seat. That’s the sad saga of our home-grown consumer durable giants – BPL, Onida, Kelvinator, Bluestar, which were reduced to rubble by the Korean chaebols, LG and Samsung. Little did Rajeev Chandrasekhar know that fighting with father-in-law TPG Nambiar may have handed him the reins of BPL, but not the acumen to run the company, which soon faded into oblivion. Speaking to 4Ps B&M, Brand Analyst, Harish Bijoor explains, “In the space of consumer durables, no leader is forever. This is a slippery totem pole. Marketers need to learn to be nifty enough to hang on with aggressive media spends. Those who don’t, slip by. BPL lost out on this count for sure, and that too after a mega decibel use of the Big B at one point!”

It’s a hard fall, from the pinnacle to the floor. Another cult brand which took the fall was Kelvinator. An indisputable leader in the refrigerator segment, the brand was killed after Electrolux bought it. Realising the folly, Videocon (which brought out Electrolux’s Indian subsidiary) – brought the ‘penguin’ alive. But will Kelvinator be able to regain its lost glory? “The Kelvinator penguin is a ubiquitous brand image. I do believe, backed by adequate media spend pressure; the brand can be re-invoked in the mind of the discern- ing Indian consumer. The Kelvinator compressor has brand equity that is rock-solid. Re-inventing the brand magic is a possibility,” says an optimistic Bijoor. With the onset of the festival season, competition is heating up in the durable’s sphere. Shantanu Das Gupta, VP Marketing, Whirpool says, “Our marketing and promotional activation this season will be unique in the industry and deliver unparalleled benefit to the homemaker.” The company has earmarked Rs.60 crore as advertising budget in FY08 – a 20% increase over the previous year.

But it’s a tough task for the old horses to fight the battle. Only a complete on-your-toes marketing stance, investment in mega decibel campaigns, investing ahead of the curve, utilising every event opportunity whether it be cricket or Bihu to advantage may do the trick! With marketing & advertising spends at an all time high, taking on the Korean giants might not prove to be an easy task for the erstwhile leaders. With their value pricing, LG & Samsung control most of the consumer durable mart. Nevertheless, the desi also-rans are stocking up arsenal and might yet prove to be worthy opponents to the Korean giants in the Indian mart.
Edit bureau: Sreoshi Ghose

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Source : IIPM Editorial, 2008

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

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

Singing a new sargam...

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A pioneer in music and home entertainment, SaReGaMa is now exploring new avenues like event management, movie and television content production to derive maximum benefits of the entertainment boom. Talking to 4Ps B&M, Mukul Kansal, GM-Business Unit, SaReGa- Ma talks about what completes the sargam for SaReGaMa:

Q. What shape is the entertainment industry taking?

The whole industry per se is getting corporatised. A lot of corporate money is flowing in, which is a very positive sign. Moreover, professional talent has been coming in, which was earlier lacking.

Q. What growth areas is SaReGaMa looking at?
There are a lot of spaces adjacent to music and we’re exploring these. We are into producing television content and movies. We produce TV content for a lot of players down South, one of them is Sun TV. Main Kuli ki Chain Khuli is our recent movie production. We’re also activating the space of events. We don’t want to limit ourselves as just a music seller. SaReGaMa is the largest player in the home video segment with global studio tie-ups like Disney, Warner Brothers, MGM.

Q What’s ahead?
Digital distribution of content is a big opportunity. Children content (especially movies) is another area where the country lacks...

As told to Pallavi Srivastava

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Source : IIPM Editorial, 2008

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

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