(News collection for Management studies)
Volume: 02 Issue: 112 26-November, 2009 – Thursday Pages: 6
Focus : Media and Entertainment Industry
SWOT Analysis of Media And Entertainment Industry
STRENGTHS:
1. Media And Entertainment is one of the most booming sectors in
2. The growing middle class with higher disposable income has become the strength of the Media And Entertainment industry.
3. Change in the lifestyle and spending patterns of the Indian masses on entertainment.
4. Technological innovations like online distribution channels, web-stores, multi- and mega-plexes are complementing the ongoing revolution and the growth of the sector.5. Indian film industry is second largest in the world and the largest in terms of the films produced and tickets sold.
6. The low cost of production and high revenues ensure a good return on investment for Indian Media And Entertainment industry.
WEAKNESSES:
1. The Media And Entertainment sector in
2. Lack of cohesive production & distribution infrastructure, especially in the case of music industry.
3. The lack of efforts for media penetration in lower socio-economic classes, where the media penetration is low.
OPPORTUNITIES:
1. The concept of crossover movies, such as Bend It Like Beckham has helped open up new doors to the crossover audience and offers immense potential for development.
2. The increasing interest of the global investors in the sector.
3. The media penetration is poor among the poorer sections of the society, offering opportunities for expansion in the area.
4. The nascent stage of the new distribution channels offers an opportunity for development.
5. Rapid de-regulation in the Industry
6. Rise in the viewership and the advertising expenditure.
7. Technological innovations like animations, multiplexes, etc and new distribution channels like mobiles and Internet have opened up the doors of new opportunities in the sector.
THREATS:
1. Piracy, violation of intellectual property rights pose a major treat to the Media And Entertainment companies.
2. Lack of quality content has emerged as a major concern because of the 'Quick- buck' route being followed in the industry.
3. With technological innovations taking place so rapidly, the media sector is facing considerable uncertainty about success in the marketplace.
Focus : Brands
It’s proven! The Indian consumer has a heart
Here’s proof we that we have a heart after all! A study has found that Indians have been found to be more conscious and demanding on social concerns than the global average while shopping.
According to the 3rd annual Goodpurpose Consumer Study, cause is a bigger factor than cost when making a purchase for 75 per cent of Indian shoppers and 78 per cent of Indians are willing to change consumption habits if it helps make the world a better place to live.
Globally, 66 per cent of those interviewed (and 69 per cent of those interviewed in
“People are demanding social purpose and brands are recognising it as an area where they can differentiate themselves and in many parts of the world, not only meet governmental compliance requirements, but also build brand equity,” said Mitch Markson, founder of Goodpurpose. He added that this year’s study shows that if companies respond intelligently to the sea change in consumer attitudes, brand loyalty among consumers — even during seriously challenging economic times — will actually grow. Even better, consumers will want to share their support for these brands with others.
In the past year, 61per cent of global shoppers have bought a brand that supports a good cause even if it was not the cheapest brand.
Managing risk is key to growth
Risk and reward are two sides of the same coin. People take risks beca use
they see a reward at the other end. The bigger the reward, the greater would be the risk.
Risk management is a platform on which an organisation can launch its growth strategy. We live in a dynamic environment and change is the order of the day. We all have to deal with it on a regular basis. Risk management is, therefore, a framework to manage or mitigate the risks. Once managements understand this, managing risks becomes imperative for growth strategies.
It is important here to pa use and think why cars have br akes? One may think of ma ny answers, but the single-mo st relevant reason is to allow the car to be driven faster. Similarly, a good risk management mi tigation pro cess, if put in pl ace, will help companies grow st ronger and avoid accidents.
One may be tempted to ask that before Clause 49 (on corporate governance), did co mpanies not look at risks? Yes, entrepreneurs always did ev aluate and manage risks. But with regulators making it ma ndatory, it gained importa nce as an item to be addre ssed at board meetings. So what did some companies do? They em ployed consultants and co mplied. Did they actually take ownership?
The other important aspe ct is that of risk oversight. Those charged with oversight respo nsibilities at the board level have several questions to answer. Which board committee should look at risks? How do bo ards stay abreast with ch anging business and external environment? How do th ey deal with selective communication? A classic example in the Indian context is foreign exchange risk. Many companies approached their currency exposures based on positive sentiment about the rupee st rengthening. It was noticed that often decisions on the use of derivatives were not based on facts and multiple scenarios were not considered. Audit committees also did not challenge manageme nts. In many instances, it was later discovered that companies did not fully comprehend the structured derivative pro ducts that banks offered them.
Risk management should be viewed from the overall ri sks, which can be termed ‘top down’. These would include br and reputation, sustainability and strategic risks. A good example is Indian IT giants, who continuously ev olve based on situational demands. Apple is another organisation that has sustained under extraneous circumst ances by challenging its limits since it detected sustainability risks.
The other set of risks are operational, and should be vi ewed as ‘bottoms up’. While both these views of risks are important, they need to be de alt at different levels. Once it is decided that risk management needs to be practiced ac ross the organisation, not just in boardrooms, and each person is sensitised to this cul ture, organisations would reap its true benefits.
It is also important to fix the ownership issue. Ownership for risk management sh ould reside in business units that make the operating decisions and implement strategy. To facilitate this, the role of the chief risk officer becomes important. He or she should play the role of translating ri sk policies into standard pro cesses that can help identify, assess, monitor and report on risks, using applied procedur es, templates, thresholds and information dashboards.
The quality of oversight also needs considerable overha ul. Typically, in most cases, this resides with the audit co mmittee. However, the complex and dynamic nature of risks in the present business scenario has encouraged progressive companies and regulators to challenge this conventional wisdom. Although the audit committee has the financial expertise, it might lack the broader expertise required to identify new and em erging risks.
For this, several areas need to be improved, such as re-alignment of board compositi on, obtaining information fr om varied sources, seeking advice independently from ex perts and having objective and challenging conversati ons ab out risks with several insiders and outsiders in the organisation. This involves ob taining information and advice that is independent from that provided by manageme nts. It does not matter who looks at risks, as long as the people who look at it have the right skills to understand its process and content.
Companies are also adopting the practice of having th eir chief risk officer directly reporting to the risk committee. Many companies have su ch a committee that includes key executives from business units and non-executive dire ctors. This is considered necessary to understand the inter-linkages. It is also essential to de-silo the approach to risk management. While most risks are assessed in their respective silos, it is important to understand their inter-li nkages to make the process effective.
Hence, one should align risk management with the culture of the company; imbibe related principles across operational and middle management; monitor and improve the mechanics for risk management to work effectively; develop a profit centre attitude on risk management-related spends and review risks in correlation to activities across an organisation.
It is extremely important to understand the inter-linkages in making the risk management process for it to be effectively used to enhance enterprise value.
The writer is COO, KPMG India. These are his personal views
Risk management is a platform on which an organisation can launch its growth strategy. We live in a dynamic environment and change is the order of the day. We all have to deal with it on a regular basis. Risk management is, therefore, a framework to manage or mitigate the risks. Once managements understand this, managing risks becomes imperative for growth strategies.
It is important here to pa use and think why cars have br akes? One may think of ma ny answers, but the single-mo st relevant reason is to allow the car to be driven faster. Similarly, a good risk management mi tigation pro cess, if put in pl ace, will help companies grow st ronger and avoid accidents.
One may be tempted to ask that before Clause 49 (on corporate governance), did co mpanies not look at risks? Yes, entrepreneurs always did ev aluate and manage risks. But with regulators making it ma ndatory, it gained importa nce as an item to be addre ssed at board meetings. So what did some companies do? They em ployed consultants and co mplied. Did they actually take ownership?
The other important aspe ct is that of risk oversight. Those charged with oversight respo nsibilities at the board level have several questions to answer. Which board committee should look at risks? How do bo ards stay abreast with ch anging business and external environment? How do th ey deal with selective communication? A classic example in the Indian context is foreign exchange risk. Many companies approached their currency exposures based on positive sentiment about the rupee st rengthening. It was noticed that often decisions on the use of derivatives were not based on facts and multiple scenarios were not considered. Audit committees also did not challenge manageme nts. In many instances, it was later discovered that companies did not fully comprehend the structured derivative pro ducts that banks offered them.
Risk management should be viewed from the overall ri sks, which can be termed ‘top down’. These would include br and reputation, sustainability and strategic risks. A good example is Indian IT giants, who continuously ev olve based on situational demands. Apple is another organisation that has sustained under extraneous circumst ances by challenging its limits since it detected sustainability risks.
The other set of risks are operational, and should be vi ewed as ‘bottoms up’. While both these views of risks are important, they need to be de alt at different levels. Once it is decided that risk management needs to be practiced ac ross the organisation, not just in boardrooms, and each person is sensitised to this cul ture, organisations would reap its true benefits.
It is also important to fix the ownership issue. Ownership for risk management sh ould reside in business units that make the operating decisions and implement strategy. To facilitate this, the role of the chief risk officer becomes important. He or she should play the role of translating ri sk policies into standard pro cesses that can help identify, assess, monitor and report on risks, using applied procedur es, templates, thresholds and information dashboards.
The quality of oversight also needs considerable overha ul. Typically, in most cases, this resides with the audit co mmittee. However, the complex and dynamic nature of risks in the present business scenario has encouraged progressive companies and regulators to challenge this conventional wisdom. Although the audit committee has the financial expertise, it might lack the broader expertise required to identify new and em erging risks.
For this, several areas need to be improved, such as re-alignment of board compositi on, obtaining information fr om varied sources, seeking advice independently from ex perts and having objective and challenging conversati ons ab out risks with several insiders and outsiders in the organisation. This involves ob taining information and advice that is independent from that provided by manageme nts. It does not matter who looks at risks, as long as the people who look at it have the right skills to understand its process and content.
Companies are also adopting the practice of having th eir chief risk officer directly reporting to the risk committee. Many companies have su ch a committee that includes key executives from business units and non-executive dire ctors. This is considered necessary to understand the inter-linkages. It is also essential to de-silo the approach to risk management. While most risks are assessed in their respective silos, it is important to understand their inter-li nkages to make the process effective.
Hence, one should align risk management with the culture of the company; imbibe related principles across operational and middle management; monitor and improve the mechanics for risk management to work effectively; develop a profit centre attitude on risk management-related spends and review risks in correlation to activities across an organisation.
It is extremely important to understand the inter-linkages in making the risk management process for it to be effectively used to enhance enterprise value.
The writer is COO, KPMG India. These are his personal views
DAY FOCUS: Focused by J.Deepthi, 1-Sem MBA (09D61E0011)
Banking -- Non-Performing Assets
Banks may get more time for NPA provisioning – Will need Rs 1.3-lakh cr more by Sept 2010 to meet higher coverage norm: Crisil
Banks may get more time for NPA provisioning – Will need Rs 1.3-lakh cr more by Sept 2010 to meet higher coverage norm: Crisil
The Reserve Bank of India
In its Second Quarter Review of Monetary Policy, the RBI had said that banks should have minimum provision coverage of 70 per cent for NPAs by September 2010.
Fearing the impact of the RBI decision on their profits, banks had sought a review of the new norm. A PSU bank official said on Wednesday on the sidelines of an international banking seminar that the RBI refused to lower the provisioning requirement from 70 per cent but conveyed to banks that the deadline will be extended by six more months. However, the central bank is yet to issue a formal communication in this regard, he added.
This leeway will allow banks to step up gradually their provision coverage, thereby reducing the impact on profits.
In the monetary policy the RBI said, “With a view to improving the provisioning cover and enhancing the soundness of individual banks, it is proposed to advise banks to augment their provisioning cushions consisting of specific provisions against NPAs as well as floating provisions, and ensure that their total provisioning coverage ratio, including floating provisions, is not less than 70 per cent.”
Recently, the State Bank of India
According to a report by rating agency Crisil, the proposed increase in NPA coverage ratio will mean that banks now have to make an additional provisioning of Rs 1,30,000 crore till end-September 2010. This estimate was based on the NPAs reported by banks as on March 31, 2009 . As on this date, the banking system’s NPAs were at 2.3 per cent of total advances, while the NPA coverage was around 55 per cent.
In its report, Crisil also said that even if NPAs rise to 3 per cent by March 2010, the required additional provisioning could increase by Rs 2,00,000 crore. Therefore, the total provisioning requirement for the system could be between Rs 3,00,000 crore and Rs 3,30,000 crore till end-September 2010.
Consolidation issue -Also, on the sidelines of the seminar the RBI Deputy Governor, Dr K. C. Chakrabarty, said consolidation in the Indian banking industry is necessary, but the time for it has not yet come. The banking sector must focus on financial inclusion for now.
His comments assume significance in the light of the meeting between bankers and Finance Ministry officials to discuss consolidation, last week.
“Consolidation will happen in an industry where there is a proliferation of products and services. We are talking about consolidation in an industry where 50 per cent people are not having access to a bank account,” Dr Chakrabarty said.
While size is important to compete in the market, small banks are needed to reach out to the interiors of India
Mutual Funds - Stock Exchanges
Use NSE platform for mutual funds trading from Nov 30
From November 30, investors will be able to transact in mutual funds units via the National Stock Exchange’s fully automated online system. The exchange has issued elaborate guidelines in this regard. Investors can place subscription and redemption orders online through their demat account as they currently do while trading in the secondary market for equities. Investors not having demat account can place orders in the physical mode through an AMFI certified broker by providing specific KYC documents. In the case of physical mode of placing order, investors are required to submit redemption request stating the folio number and PAN card.
The system -Investors can connect to the NSE’s trading platform through brokers’ telecom network. “A fully automated online order collection system called National Exchange Automated Trading-Mutual Fund Service System (MFSS) will be provided to the participants (brokers).
The settlement of the units will be through the depository in the demat mode for the demat account holders whose designated bank account will be debited/credited for the order placed on T (trading day) + 1 day. In case an order is placed through the physical mode, the Registrar and Transfer Agent (RTA) will provide final redemption information to the exchange on T+1 day; the payout, however, will happen according to the scheme’s provisions and within the timelines.
The new MFSS will operate on all business days of the capital market segment between 9 a.m. and 3 p.m. To start with, depository settlement will be available only for DP account holders in NSDL. The value for a single transaction, according to NSE, should be less than Rs 1 crore.
Macro Economy - Food inflation rises to 15.58%
Food inflation rose to 15.58 per cent for the second week of November from 14.55 per cent in the previous week as potatoes and pulses turned costlier.On an annual basis, potato prices more than doubled, pulses became expensive by over 35 per cent, while onions rose by 27 per cent.
Price rise was significant on weekly basis with urad and poultry chicken rising by 15 per cent each, eggs by 8 per cent, moong by 6 per cent, arhar by 5 per cent and fruits and vegetables by 3 per cent. Among the non-food articles, raw silk turned expensive by 3 per cent, while fodder and groundnut seed by 2 per cent each.
Fuel index though remained unchanged at the previous week’s level.
Software – Outlook -Industry & Economy - LinguisticsMicrosoft tool to break the language barrier - Key in phonetic English script to get text in 6 Indian tongues
Making computers accessible for those who don’t know English, Microsoft Corporation has said that it would soon release transliteration tools for six Indian languages – Tamil, Telugu, Hindi, Bengali, Kannada and Malayalam. These tools allow the users to key in the language words in phonetic way using the English script and get the text in their respective languages.
The company feels that lack of English language skills have kept people away from computers. Only 1.2 crore households have PCs as against 45 crore mobile phones, Mr Srini Koppolu, Corporate Vice-President and Managing Director of Microsoft India Development Centre (MSIDC), said.
The beta version of these tools would be made available for free downloads from Microsoft’s Web site in the next few weeks. Developed by the Emerging Markets Labs at the Microsoft Indian Development Centre (MSIDC), these tools would help increase the base of users, Mr Srini said.Showcasing the tools at a press conference here on Wednesday, he said the company had made modifications to the transliteration services it had been offering for about a decade. The beauty of the tools is that the users could send e-mails or chat in their mother tongue.
“They select the language option from the desktop option and key in the mails or chat messages in their mail or chat boxes,” Mr Thirumalai Anandanpillai, Group Programme Manager and Head of EM Labs, said. The receiver, even without downloading the tools, could see the content in the said languages. The transliterated text, which is in Unicode form, could be modified to other fonts, if any, using relevant converters. “We have built a platform. And basing on this, it is very easy to develop other language tools . We will roll out the tools for other Indian languages in phases,” he added.
Components -The offering would have desktop and Web versions. Both the versions comprise virtual keyboards that present the alphabets and the derivative words as they appear in their respective linguistic order. With regard to Windows 7 in Indian languages, he said the company would roll out the operating system in at least 14 languages in the next few months.
Logistics -Singapore Kakinada
Singapore-based Sembawang Shipyard, a wholly-owned subsidiary of Sembcorp Marine and Kakinada Seaports on Thursday announced a joint venture to establish and operate a marine and offshore facility in India
The joint venture (JV) Sembmarine Kakinada Seaports Ltd (SKL) will develop the marine facility in east coast near Krishna-Godavari and Mahanadi basin area in three phases over 3-5 years.
“We are very optimistic of the region's growth in terms of shipping and offshore activities, oil and gas drilling and exploration, which will provide sustainable growth and expansion for SKSL,” Mr Ong Poh Kwee, Sembcorp Marine Deputy President and Sembaw ang Shipyard Managing Director said. Sembcorp Marine (through Sembawang Shipyard) will hold 19.9 per cent share of the JV's initial investment of $50 million with an option to increase it to 40 per cent, he said.
SKL Director, Mr Kris K Nittala said SKL was poised to become a one-stop integrated offshore service facility catering to offshore vessels and merchant ships including repairs, servicing and new building of offshore vessels and ships. “Indian ships at present go to Singapore
Open up new sources of long-term financing’ - Commercial banking should reach the masses: Subbarao
Reserve Bank of India Governor D. Subbarao on Wednesday urged bankers to meet the formibale challenges head on. The four challenges were: deepening financial inclusion; financing infrastructure; strengthening risk management; and improving efficiency, he said.
“These are formidable challenges, and meeting them is going to be an exciting, rewarding and fulfilling opportunity. Perish the thought of Indian banking ever getting boring,” said Dr. Subbarao while speaking on ‘Should banking be made boring?: an Indian perspective’. He was addressing the International Finance and Banking Conference, organised by the Indian Merchants’ Chamber and the Institute of Chartered Accountants of India here. The theme of the conference was ‘Banking: crisis and beyond.”
“Commercial banking in India
“A big issue in bank financing of infrastructure is the asset-liability mismatch,” said Dr. Subbarao. While infrastructure typically requires long-term funding, the deposits of banks, their main source of funds, are relatively short-term. The problem of asset-liability mismatch in long-term financing is not unique to India
“If some of the pending legislation gets through, in India
The intermediation cost in India India
Although overall efficiency and productivity have improved, resources are not being utilised in the most efficient manner. “The challenge for Indian banks, therefore, is to reduce costs and pass on the benefits to both depositors and lenders,” Dr. Subbarao asserted.
Banks need to develop a culture of risk management at the institutional level. What the crisis has shown is that risk management cannot be done in silos; it demands a more integrated approach with risks and their interconnections across the entire organisation recognised and managed synergistically. In the wake of the financial crisis there are proposals at the global level to mandate higher capital standards, stricter liquidity and leverage ratios and a more cautious approach to risk. “Admittedly, all these safeguards are necessary, but they will also raise the banks’ funding costs,” said Dr. Subbarao.
G R Fragrances launches new brand
G R Fragrances, a leading distributor of perfumes and cosmetics, has launched ‘Alta Moda’, a new brand of perfumes and deodorants. These are manufactured by Swiss Arabian Perfumes Group in the Middle East . G R Fragrances commenced its operations in 2002 and has captured a sizable market share in the perfumes and cosmetics market segment, according to B. Abdul Rahim, Managing Director.
MANAGEMENT TIPS: RESOLVING PROBLEMS
Whether problems are internal or external, they can make your management duties a nightmare if you don't handle them correctly. Here's how to stay on top of them.
Stand up for employees. If other departments or managers are bearing down hard on your employees, stand up for them.
Fix what's broken. Don't waste time placing blame. Take care of fixing the problem before dealing with any possible repercussions.
Manage and control your emotions. Don't let anger or frustration affect your problem resolution. If you are emotionally invested in a situation, cool down before discussing it or bring in an outside mediator.
Learn when to step in. Some problems might resolve themselves if you just let them be, but you need to be aware of times where you'll need to step in and take control of a situation.
Take the blame. If you've made a mistake, fess up. It'll give you more time to work on fixing the problem instead of talking your way out of taking the rap.
Get the facts first. Before you pass judgment on a situation, make sure you have the whole story. Listen to employees and refrain from questioning anyone's integrity without first ensuring that you've gathered all the data.
Rise above the crisis. Learn to separate yourself from the problem and rise above the fray. You'll be able to think more clearly and make a better decision on how to rectify the issue.
Don't ignore problems. A small problem can easily snowball and become something much more difficult to fix.
Try to depersonalize problems. Let employees know that the problem isn't with them but with their actions. Don't make it personal.
Focus – Day Tip Good and bad arise from within, they are not outside. |
No comments:
Post a Comment