Wall Focus-131

(News collection for Management studies)

Volume: 02     Issue :131            04-January,2012 - Wednesday               Pages : 10

   wish you all a happy new year -2012

 

Pedalling a lone path at Auto Expo 2012

At the forthcoming Auto Expo in New Delhi, India's largest organised homage to the internal combustion engine, there will be one unexpected participant — cycle manufacturer Firefox.
In a show dominated by glitzy cars and mean mobikes, Firefox will be making a lone pitch for the eco benefits of cycling. While major Indian cycle manufacturers such as Hero Cycles and TI Cycles are absent, Firefox, which has had three good outings at the Expo, says the fair is a good platform to catch the eye of the urban, upscale, lifestyle-conscious customer it wants to reach.
“In 2008, when Tata launched the world's cheapest car at Rs 1 lakh, Firefox launched a bicycle priced at Rs 1.68 lakh,” says Mr Ajit Gandhi, Deputy Manager, Firefox Bikes.

According to Mr Gandhi, while cycle sales have been stagnant in the standard category, growth has been coming from the high-end segment — the niche that Firefox is targeting. The Indian market is put at 12-15 million bicycles a year.

This year, too, the bicycle company, which has a famous customer in the US President, Mr Barack Obama (he rides a Trek bike), is coming up with a new launch — a co-branded offering in association with Viacom 18 Group's MTV. Called Firefox MTV, it is priced in the Rs 9,000-14,000 range and will be available in the market some time in March.

“Fifty per cent of our bicycle sales comes from the kids segment (8-15 age group). But cycling clubs such as Pedalyatri have CEOs and the upper management level among their members. Earlier, this class were not taking up biking as there was lack of quality products. Now that a quality high-end segment is there, the top bracket is getting into cycling as a hobby,” says Mr Gandhi.

In its 16 sq m stall, Firefox will be occupying just a fraction of the space that the car companies will be taking up at the Auto Expo. Its marketing investment of just Rs 10 lakh may also seem peanuts compared to the big bucks auto majors will spend. But with MTV Veejays launching its new products, it hopes to make up in decibels what it cannot in terms of size.

chithra.n@thehindu.co.in

SPECIAL FOCUS :

2012 declared as National Mathematical Year as a Tribute to Mathematician Srinivasa Ramanujan

Contributed by :   K.MOUNIKA, (Reg. No. 09D61E0030)

Prime Minister Manmohan Singh on 26 December 2011 declared the birthday of the great mathematician Srinivasa Ramanujan, 22 December as National Mathematics Day. Singh also declared 2012 as the National Mathematical Year as a tribute to the great mathematician Srinivasa Ramanujan.

The Ramanujan Mathematical Society (RMS) will hold a series of activities in 2012 (National Mathematical Year) to mark the 125th birth anniversary of mathematician Srinivasa Ramanujan.
Prime Minister Manmohan Singh inaugurated the yearlong celebrations at the Madras University Auditorium to mark the 125th birth anniversary of Ramanujan.
The activities to be organized as a part of the year long celebration were planned to involve different sections, including school-goers, college students, students pursuing their research in mathematics and others interested in developments in the discipline.
In the programmes involving school students, for instance, talks and activities would focus on helping them get rid of their fear of the subject.
The biography of Ramanujan by Robert Kanigel in regional languages has been planned . A documentary, tracing the history of mathematics in India, would also be made.
The year-long celebrations of Ramanujan birth anniversary would culminate in an international conference of mathematicians in New Delhi in December 2012.

On the occasion, Manmohan Singh also expressed concern over a slide in the number of students pursuing higher studies in mathematics. He also expressed concern over the sharp decline in the number of quality mathematics teachers in schools and colleges.

RMS president and chair of the organising committee M.S. Raghunathan declared on 26 December 2011 that a mathematics centre named after Ramanujan would be set up in Chennai. It would have a host of facilities, including a museum.

Creating Future Leaders

Contributed by :   K.MOUNIKA, (Reg. No. 09D61E0030)

Alok Kumar, VP & Global Head-Internal IT & Shared Services, TCS believes that as CIOs, it is our responsibility to groom tomorrow’s leaders and arm them with weapons to combat business challenges.

Enabling growth in today's complex environment is a challenge for many organizations. To grow and compete in a global environment, we need leaders who can think globally, appreciate cultural diversity, and also create a participative environment besides being technology savvy. We need leaders who can understand the dynamic nature of business and have the knowledge and the skills to lead in the face of complexity and ambiguity.
Also, inducting young talent and grooming them as future leaders provides strategic advantage to organizations.  This helps to create a pool of trained resources, ready to embrace new technologies and step into leadership roles.

That’s why, besides being a business enabler and technology champion, a CIO’s role is increasingly being viewed as a mentor who helps build future leaders for the organization. CIOs must lead by example because they play a very important role in influencing and shaping young minds by sharing their vision and creating a business-technology focus. Initial interaction with a senior leadership team gives them the required confidence, motivation, focus and the knowledge foundation to jumpstart their careers. While working on the job, CIOs can facilitate the culture of learning and sharing among employees by providing platforms to enable innovation, ideation, and enterprisewide collaboration to maximize business value creation. This also helps them corroborate learning to solve real-life challenges and build required competencies.  

"Today, CIOs act as executive coaches for next generation leaders, and while interacting with them, young leaders can learn from real life experiences that help to further sharpen their skills."

However, enabling this to a large and distributed workforce is a challenge. Once again, CIOs can be instrumental in creating e-learning platforms or learning portals having role-based learning modules, specific to the function, technology, or management streams that are efficient and cost effective.

Today, CIOs act as executive coaches for next generation leaders, and while interacting with them, young leaders can learn from real life experiences that help to further sharpen their skills. CIOs also bring to the table thought leadership ideas, best practices derived from external forums like workshops and conferences, and strategic inputs from various management interactions. CIOs can share their experiences and prepare the next generation to develop strong leadership skills and take their organizations to the next level.

DAY FOCUS :

Coal to cost more on new pricing method

 The Board of Directors of Coal India Ltd (CIL) on Friday approved a proposal to adopt the internationally accepted, gross calorific value (GCV)-based pricing mechanism beginning 2012. The new pricing notification will be released on Saturday.
Though the CIL Chairman, Mr N.C. Jha, maintained that the new mechanism, as advocated by the Union Coal Ministry, will have “minimum price impact” on the consumer bringing in a “slight” positive impact on company's revenue, sources told Business Line that the in-built price rationalisation, coupled with levies and taxes, may push up the landed cost of coal for consumers, including the power sector.
The new mechanism will replace the existing seven grades, each divided by a broad bandwidth of 600-1,100 kilo calorie (kcal) useful heat value (UHV), by large number of products of 300 kcal bandwidth each beginning 2,200 kcal to over 7,000 kcal. The new system has done away with the anomalies in pricing of same grade coal produced by different collieries as well as subsidiaries.
Price Rationalisation
“There is some (price) impact as we have brought in uniformity in pricing (meaning coal of a particular GCV will be sold at the same price by mining subsidiaries). The rationalisation was done keeping in mind that the subsidiaries do not face adverse impact on revenue,” Mr Jha told Business Line. “There may be some impact on prices (excluding levies and taxes) but we do not foresee any major impact on user industry,” he added. Asked if he could define an average increase, Mr Jha said that it could not be done as the products are freshly categorised.
Cess and royalty
Meanwhile, the Union Coal Ministry is reportedly gearing up to notify the new mechanism for calculation of cess and royalty payable by miners to the State governments. The mechanism will be devised in a manner that the State revenues do not go down. Notification to the Coal Controller is also due.
Quality concerns
Meanwhile, the switchover to the new system may give rise to quality concerns on the part of consumers as CIL is yet to procure adequate calorie-meters. “In the next three months, all our 81 areas will be equipped with calorie metres,” Mr Jha said. Currently, the company will convert the UHV into GCV using available conversion calculators.
pratim@thehindu.co.in

Maruti's new Way of Life

Bookings have risen and trust hasn't dipped much, says the country's largest car maker which is recouping from a tough year.

India's largest car maker Maruti Suzuki has had a challenging year with labour problems at its Manesar plant. Has it eroded consumer trust in the brand? On the sales front, Maruti has fast been losing its competitive price edge as other car makers have introduced cheaper models. How has the company managed to keep the ‘value' tag the Maruti brand has always been associated with? BrandLine caught up with Shashank Srivastava, Chief General Manager (Marketing), Maruti Suzuki, to find out.
The Manesar episode must have been a setback for Maruti in terms of brand trust. How is Maruti combating it?
Right from October 8 to October 24, when production had stopped, the fresh bookings for Swift kept coming in. We thought we should stop the bookings. We told our dealers to clearly tell the consumers we may not be able to deliver the vehicle in six months. We actually had a special training session with our dealers, telling them why they had to tell consumers this. But the bookings kept coming. In November, we did the highest production since inception – 17,273 units. Which means we quickly bounced back.
But did your brand value decline? Do you have any measures?
Well, the biggest thing in Maruti's brand is the trust factor. People may say we need to be more sporty, exclusive – and that's why we gave our products attributes like ‘men are back' for SX4 and ‘stop at nothing' for A-Star - but the real core brand value of Maruti is trust.
And you are right, when incidents like this happen, it does influence trust. We do something called Brand Track. GFK Mode does this for us – and fortunately, there was not much of a dip.
Given that Maruti cars no longer enjoy the price advantage, have you shifted your marketing strategy?
Yes, the cost of acquisition is getting closer to the competition. No longer is there a difference of a lakh between us and our competitors – whatever the category. So now, we have large campaigns that talk about costs of ownership.
We are saying cost of acquisition is not important, but the cost of ownership is.
The thumb rule in the lifecycle of a car is one-third of life of car is cost of acquisition, one-third is the fuel cost, and one-third is maintenance and accessories. So, if you spend Rs 4 lakh on acquiring a car, you will be spending another Rs 4 lakh on fuel during the years of ownership, and another Rs 4 lakh on maintenance and accessories. There is also the resale value factor. We have done a campaign where we show how, on each of this, Maruti has an advantage.
As we enjoy the first-mover advantage of being associated with fuel efficiency and network size, we are continuing to hone those points. Take our ‘India Saves with Maruti' campaign. Online, we offered consumers an algorithm, where they could find out how much fuel they consumed.
Shortly, we will be bringing out another campaign that talks about the extent of our network.
What's happening on the digital front?
Every year, our digital spend has been doubling. From 2 per cent of our revenues earlier, we doubled to four per cent last year. This year we will be spending 8-10 per cent. And I see this trend next year as well. Research data shows us that increasingly people are referring to the Net to find out what type of car they should buy. According to the latest data, 77 per cent were influenced in purchase decision by friends and family, 34 per cent by TV and another 34 per cent by Internet – of course, there is overlapping of influencers.
So digital is important. In the UK, digital spends crossed print two years ago – but in India I think that will take time.
So what are you sacrificing for digital?
Print and radio. But there is a complexity here, I must mention. During good times, we tend to do more of brand advertising and for that TV is the preferred medium - last year for instance, we did 65 per cent TV compared to our usual 58 per cent or so. But when there is a downturn, we do more tactical advertising, for which print and radio are preferred media. Radio lends itself beautifully to tactical advertising.
What else are you doing online?
In ORM (online reputation management), we are doing a lot. Our digital agency gives us monthly reports. We realised how important this is after the Priyanka Chopra episode with Jet (last year she had tweeted that she didn't turn up for a shoot as she had stomach trouble after travelling on a Jet flight. At once, the tweet was picked up by Jet and the airline contacted her and showed concern. Next day the film star tweeted about Jet's concern – and this became an industry ORM benchmark).
In fact, the interior changes in the new Swift are due to online consumer feedback, as we got comments about the plasticky feel of our earlier interiors. From type of accessories to even the plating used on exhaust pipes, we have got suggestions from users. They are designing the cars themselves, I would say.
Surprisingly, we find from our ORM reports that 25 per cent comments are from women, when the actual buyer percentage of women is far less. I wonder if women are more talkative online?
What are the key consumer trends in your sector?
We see first-time buyers are getting into bigger cars. Swift, which had only 18 per cent first-time buyers, today has 33 per cent first-time buyers. Second, the key differentiator in a purchase decision is shifting from fuel efficiency to factors such as design and features.
Third, the fuel choice has changed. We see a huge growth in diesel. And, fourth, we see more buyers experimenting now. We also note that the consumer has become very demanding. We can see this even at retail points, where the consumer is demanding a better retail experience.
So how has that changed your marketing strategy?
It's reflected in our brand positioning. We have changed our tagline from ‘Count on Us' to ‘Way of Life'. The earlier tag line was based on reliability and affordability, but with Way of Life, our brand positioning of being straightforward and value-driven has been joined by attributes of sporty and spirit to create more excitement. It will be Maruti's theme at the Auto Expo (in January 2012).
In fact, I would say, the consumer trends have influenced changes in our product, in our communication (it's more edgy now), retail experience (we have gone in for more glass, trendier showrooms), and in our media mix (more new media).

Semiconductor industry hopes National Policy will help create ecosystem

Sees increase in broadband connectivity triggering domestic demand in 2012

The who's who of the semiconductor industry will gather in Hyderabad in the second week of New Year to discuss the most promising area for the industry in the coming decade. The theme of the five-day conference is embedded solutions for emerging markets.
This captures the mood of Indian semiconductor industry that is attempting to create an ecosystem.
Despite being a centre of excellence in design, the much-promised and touted “fab industry” has failed to evolve. The industry sees steps in right direction to create a fab industry in the proposed National Policy of Electronics.
The Indian Semiconductor Association (ISA) feels that the policy would help create a globally competitive electronics system design and manufacturing (ESDM) industry.
“We welcome the draft policy and extend our support to achieve the projected turnover of around $ 400 billion by 2020. It promises to generate 2.8 crore jobs by 2020. It also proposes to set up over 200 Electronic Manufacturing clusters,” Mr PVG Menon, President of India Semiconductor Association (ISA), says.
Assocham and Frost & Sullivan too have pegged the domestic demand at $400 billion by 2020.
For long, the industry has complained about poor quality or short supply of human resources for very high-end design needs. It remained by and large a far cry.
As it is, the country emerged a top global location for research and development.
That MNCs increased workforce to 1.80 lakh in 2009 from 16,000 in 2000 shows the confidence in Indian expertise. The number grew at a compounded annual growth rate of 31 per cent and targeted to reach 3.19 lakh by 2015.
“We are quite hopeful that the proposed policy would go a long way in addressing this issue. It aims to significantly upscale high-end human resource creation by adding 2,500 Ph.Ds annually by 2020,” Mr Menon points out.
Though the global recessionary trends remain a major worry, the industry expects boost in domestic demand following the Union Government decision to connect 2.5 lakh villages with broadband in 2012. Roll out of the National Knowledge Network Project, would also be crucial for the industry in 2012. “We also expect segments like consumer, industrial and medical to grow significantly this year,” Mr Menon said.
This will lead to consumption of digital devices in rural and semi-urban areas, triggering demand for hard ware components. Industry players expect preferential access in the case of government procurement of made-in India components.
Notwithstanding a weak global economic environment this year and natural disasters that impacted production in Asia, the semiconductor industry has continued to grow in 2011. The growth has been driven by the domestic electronic product consumers.
Globally, the semiconductor companies weathered the myriad challenges of fluctuating economies and natural disasters to maintain the growth from 2010 and for the first time ever it crossed the $300 billion mark in revenues, Mr Jaswinder Ahuja, Corporate Vice-President and Managing Director of Cadence Design Systems (India), said.

In India, the global variables had minimal impact and according to the report from ISA Frost and Sullivan India Market Update, the semiconductor market grew an impressive 28.3 per cent over 2010, driven primarily by mobile devices, telecommunications and IT sectors.

The report also forecasts that by 2012 the revenues will be in the region of $9.86 billion in the country.
“2012 will be characterised by opportunities and challenges. In the India context, the National Policy on Electronics will have impact across the board and present several new opportunities,” he said.
Globally the trends around mobility and application-driven design continue to provide tremendous opportunity but will also challenge the designers to come up with new ways to deliver ever increasing functionality and performance on very tight schedules while reducing cost.
“The proposed national policy has the potential to be a game changer for the country with far-reaching consequences for all of us. The policy aims to address the huge gap between locally produced electronics and the domestic demand for electronics in India,” Mr Ahuja felt.
kurmanath@thehindu.co.in

Focus – Day Tip Self analysis is the best analysis