Chinese firms aim big in India - the Chinese juggernault rolls on

Hello fellow bloggers,

I am back with yet another article on the Indian business scene. This time it is quiet an interesting find and to me it comes as a jolt that the Chinese brands that people thought were cheap and of bad quality are taking over the Indian consumer market in the electronics sector. Take for example the appliance manufacturer HAIER, I till today thought it was European or German, but it is infact made in CHINA and according to the article is "positioning - as the world's second largest appliances company". for years the Chinese companies have tried to enter the market and have failed miserably due to the barriers of entry placed by the Indian manufactures and a few quotas in place by the government. Another reason could also be the economies of scale that the Indian manufacturers enjoyed. These according to Porter under porters five forces curbs the threat of new entrants. As an example of this in the article the author quotes

"In the late 90s, consumer electronics major Konka closed shop after struggling for a while, two-wheeler companies like Monto Motors announced grandiose plans without following through, and TCL (which is coming back with a vengeance) failed to impress customers despite its partnership with a local company".

but that is all about to change soon, as said in the article

"The new Chinese bigwigs from Haier to telecom equipment major Huawei or Zte Corp, from PC maker Lenovo (which bought IBM's PC business globally) to China's number one mobile phone maker Ningbo Bird, from two-wheeler company Guang-zhou Motors to a host of steel majors like Bao and Capital (which want to source scarce iron ore and make steel), are all making a grim but determined effort to change the rules of the game".

I was rather surprised to again find out the Lenovo, one of the highest selling PC brands in India is from china and it has grown exponentially in the last 5 years and has also bought IBM's PC business globally as said in the article.

why is this happening, why are the Indians buying more of Chinese goods and not the previously popular Sony and Phillips, this is due to the new BUZZ word used by the Indian customers is high-tech technology and quality.

according to the author of the article,

"high-tech technology, investing in brand building and leveraging a strong R&D base, which helps them in churning out products that can match the offerings of US and European companies."

this can be explained by Hamel's Business concept innovation, as to where Chinese companies are branding their products with western names which attract the Indian customers to them, their core strategy is not to dump cheap quality products on to the market anymore but to provide the customers with high quality products made through thorough market research and R&D which increases its product/market scope under the Hamel framework. Offering such high-tech products at a reasonable price gives them the basis for differentiation under their core strategy under the Hamel framework.
they are also helping the customers by getting their pricing structure right which in turn fulfills the customer interface under the Hamel framework.

overall, according to the author of the article,

"Technology, quality and delivery of high tech products are in. Understanding the Indian market - which is not only about price but is value sensitive - is the new buzzword in the boardrooms of Chinese companies".

it has not been an easy ride for the Chinese companies in India but bit by bit, the perceptions are changing - led by determined Chinese companies who are looking at India as a long-term destination to do succesfull business.

pleasant reading,

siddharth sudhakar

Website: http://in.rediff.com/money/2006/apr/29spec.htm

Sebi raps HDFC Bank: IPO scam, HDFC gets knocked out

Hello fellow bloggers,

I am back with yet another blog and this time its the huge controversy surrounding the IPO scam in the Bombay Stock exchange. and banks that people are trusting are part of the scam.one of india's fast growing bank HDFC has been pulled up for allowing people to create Demat accounts(an account needed to trade on the stock exchange) under fictiuos names so that they can get away from paying taxes to the government and have a greater number of shares which they could sell at a higher rate to investors.the stock market crashed 490 points in one day, when the news broke out about the scam. I will look at the non-market environment under the Baron framework.

according to Sebi's inspection of HDFC's accounts, "From the inspection of DP operations of HDFC bank, it emerged that HDFC bank had failed to exercise due diligence and has opened demat accounts in the name of fictitious / benami entities"

adding to HDFC's problems, the reserve bank of india has levied monetary penalties on them that can hamper their fast growing progress,and they have been barred from opening any more Demat accounts which is a big chunk of their peofits.

the non-market environment surrounding this issue will be discussed as follows.

the issue:
the basic issue here is the illegal workings of a few people, who open fictiuos accounts at banks to gain undue advantage of getting extra number of shares during an IPO and the underlying fact is that, some of the the country's biggest banks are part of this and they do not even have a clue that this is happening. This is an issue that is affetcing a lot of people as this is unethical and not in the interest of the normal functioning of thestock market.

Information:
now the SEBI believes that the banks named in the Scam are part of the scam, as they are getting a small monetary benefit out of it through these fictiuos accounts but all this is talk at the moment is just speculation until this is not proved. The banks are holding the stand that they did not have any information about such illegal practices.

Interest:

the different interested parties in the Scam are the SEBI who are against illegal and unethical practices in money and shares transactions. The people who have created these bank accounts as they could be pulled up into court and jailed for 5 years minimum. The people who have current accounts and demat accounts with the involved banks whose money could be frozen for investigation purposes.
these interest groups mentioned above have to make sure that valuable hard earned money of the people does not disappear as a result of a stock market crash if this scam escalates.

Institutions:

the three clear institutions in this issue are the banks accused of the illegal practices, the SEBI(The Securities and Exchange Board of India) that is investigating the scam, and the RBI(the reserve bank of India) which wants to curb out any illegal practices. These institutions will be fighting each other to investigate the situation and bring normalcy to the stock market.

as a example of the illegal practices, in the article,

Citing an example, Sebi said: "286 Savings bank accounts opened by the key operator (Purshottam Budhwani) with HDFC Bank is clearly proof enough for the plan of action to open multiple dematerialised accounts and channelise the funds in the manner they would bury the audit trail."


Purshottam Budhwami was one prolific bank customer. He had 286 savings accounts under different customer IDs with various joint account holders in various HDFC Bank Mumbai branches. And HDFC Bank, by the looks of it, never knew.



This is one of the key findings of the 252-page interim order released by Securities & Exchange Board of India (Sebi) on Thursday night.

this scam is just gaining steam and escalate into a huge investigation with other big banks coming under the SEBI's scope.

pleasant reading,

siddharth sudhakar

website: http://in.rediff.com/money/2006/apr/28sebi5.htm

article published on: April 28, 2006

Wipro's acquisition of US firm paying off BIG TIME!!!

Hello fellow bloggers,

well DR.Sidd is back with another blog. This time i would like to talk about the Booming IT industry in India and about a company that is a big player in the industry,WIPRO Technologies (for more info log on to www.wipro.com). wipro in past 4 years has been on an acquisition spree and in this blog i would like to talk about one of its latest acquisition that are paying rich dividends. Wipro's acquisition of American Management System's global energy practice during 2002 has started to pay off. Through this acquisition Wipro has been able to get an influential player in the global energy market, Shell Corp. As its client through the consulting expertise of American Management System. Shell plans to step up its IT requirements in the near future and along with IBM,Wipro will be working with Shell and the deal is supposedly worth around $3billion. Currently through expert advice from the AMS,Wipro is able to bring in revenues of around $10-12 million a quarter from this deal. Wipro acquired the AMS consulting capabilities in the energy practice for $26 million

this acquisition shows us that Wipro is trying to change its Core strategy, which is a Business concept innovation according to Gary Hamel, by acquisition and trying to get more new clients. They are trying to initialize a new Product/Market scope for its services through its acquisition spree. By acquiring AMS, Wipro has added Strategic assets to its strategic resources of giving expert management consults to its clients. These acquisitions can also increase the Scale and Scope of doing Business for Wipro which increases its Strategic economies and also helps it to increase its operating agility which according to Hamel is the strategic flexibility shown by Wipro.

according to the chief strategy officer at Wipro, Sudip Nandy, he said, "AMS' energy practice acquisition is a key element which will drive Wipro's growth as we scale up. In two years, Shell is expected to be the largest client for us and the consulting capability required for this scaling up is immense. This acquisition is certainly paying us off pretty well in respect to Shell as well as to scale up the energy practice."

their acquisition spree does not stop here though, Wipro aquired NerveWire for $18.7 million in 2003 and is also expected to play a critical role, as Wipro, along with a host of global peers, competes for the humongous $15 billion deal that is brewing at the General Motors stable.

so overall Wipro is using the acquisition strategy to acquire niche companies that will help them bring in international clients that will add to their scope and scale of doing effective and efficient IT Solutions.

pleasant Reading,

Siddharth Sudhakar

Website: http://www.rediff.com/money/2005/dec/21wipro.htm

Whirlpool India to unveil new products, plans $20-m investment

hello fellow bloggers,

this article i got from the Economictimes.com was extremely interesting to me as overall the electronics companies profits are on the downturn all over the world but in India that is not the case.as india is the fastest growing economy in the world after China and with an annual GDP growth rate of around 8%, the people of India have a lot of spare cash to spend and most of them are spending it on luxury consumer goods. Whirlpool India LTD, wants to take advanatge of this surge in the economy by developing a new line of Products to cater to the growing needs of the Indian Market. Whirlpool is sensing a operational turnaround for itself and with an investment of around $20m over the next year in research and development whirlpool is trying to develop a new line of products,trying to expand its export operations and introduction of a new category of products in the Indian Market, this according to Michael Porter is the Product Differentiaiton startegy, this can also be looked at as a new product/market scope and their unique basis for differentiation under the Gary Hamel's Business concept innovation. they want to differentiate themselves from competition for the basic reason of catering to the indian public with product lines that suit the indian lifestyle, moreover according to the article MR.Uppal, the MD of Whirlpool India, said on the exporting front that,

"the Indian operations are fast becoming an export hub for the global system and contributing significantly to the company’s overall revenues. “Plans are on the anvil to explore new markets now,”

Another Problem that is facing the company is the large amount of account recievables that have still to be collected, they are slighly above teh industry average at the moment which is 18 days. but they are trying to turn it around with their new startegy of product differentiation.

they are looking forward for better results in the future, they had net sales of Rs 969.3 crore (1 crore= 10 million) with PBT and depreciation of Rs 1.5 crore in April-December ’05 and had a market share of 24.5% in 2005 which is up from 2004 by 2.5%. this will be their main aim to increase sales through differentiation.

pleasant reading

siddharth sudhakar

website : http://economictimes.indiatimes.com/articleshow/1472973.cms

how to develop a CREATIVE GENIUS: the 5 faces of GENIUS

hello to all fellow bloggers. well i decided to not stick with the websites that Dr.hunter gave us but go with an article from my favourite website. the article was really fascinating, so i thought would be great to enlighten a few more bright minds that i know. well the article is by Annette Moser-Wellman who has spent a career studying creativity and is the the author of The Five Faces of Genius and Creative Thinking Styles to Succeed at Work. well in this article she discusses what are the 5 tratits that a leader should have that would make him a creative genius. she says that these five traits in business "will be the next core competency - the essential capability for success". lets now see what the 5 traits are:

1- THE SEER:
she says that a creative genius should be able to see where and what his company is doing and where it wants to be in the future and she goes on to give the example of bil gates vision of "a PC on every desk and in every home.It was the image that created the future".

2- The OBSERVER:
she conveys that a creative genius should be an excellent observer as she quotes "Observers pay attention to small things and get big ideas from those details". she gives the example of the former SONY CORP president,Akio Morita, who got the idea of the walk-man after noticing a small thing.

3- The ALCHEMIST:
a good business leader usue the alchemist in him to use the "world around him to come up with new ideas". she gives a very nice example of the advertising guru Leo Burnett who came up with the idea of the Marlboro cowboy.

4- The FOOL:
Annette goes on to say that the FOOL "is one of the most powerful creative skills" and add to that by saying that "The "fool" knows how to invert problems, persevere when the going gets tough and isn't afraid to pursue absurd solutions". this is very important as a creative leader should be able to invert problems with solutions that are very distinct and not heard of. An example of Oprah Winfrey is given as "the most powerful business woman in the world. She built her empire with a "fool" strategy".

5- The SAGE:
a Sage is someone who makes life very easy for everyone by synthesizing the "complicated information" quickly and coming up with a creative and good idea that simplifies things, this tarit should be in every leader and should be used to good effect. she gives the example of Micheal Dell who according to her is a "Sage" as he "revolutionised the way we buy computers".

the above 5 tarits are very important in busines concepts and busines strategy as these differentiate good managers from great leaders.

thank you for reading

siddharth sudhakar

for more information on the full text of the article visit
http://in.rediff.com/money/2006/mar/07bspec.htm

PS
also visit my fav site
www.rediff.com

danish boycott will it work?

well according to me the whole issue has been blown out of proportion. yes i agree that a particular religion should noit be branded with wrongful adjectives that spark emotional outburst's amongst its sollowers. clearly they were wrong in publishing the photos but first amendment rights and freedom of press and free speech should not be compromised to keep people not even living the country the article was published happy. so overall the danish newspaper was wrong in doing what they did but equal blame should go on the fanatical muslims which is by the way a very small population in the world for over-reacting with violence as their key, what ever happened to peacefull demonstrations, you dont see violent demonstrations when hindu gods or christ is printed on shoe soles and other obscene places.. i think a boycott of this nature will not work as most people in the world have gotten used to luxury danish goods and i belive when this controversy cools down, the same very people that are [protesting will be the first to use them again, i heard the same calls for boycott of americaN GOODS when they invaded iraq, what happened, everyone still drinks coke and pepsi. i think we should not get involved in this mess and take a back seat and wait for it to cool down.

thank you

pleasant reading

sidd

google's selout

well first of all i am extremely shocked at the decision by goolge to agree to such a proposal in the first place. keeping in mind that it is the second biggest technology companyin the UNITED STATES after Microsoft, i would have thought that Google would have folowed its business principles according to many of the democratic practices that stands for the American dream. Google being American should have acted more ethically and rejected this proposal in the first place as it violates the first amendment rights of the very country they exist in. the whole deal sounds as if Google is insecure of its future and accepting such a deal now according to them will only stabalize their position in the market. quiet frankly they are running scared that one of their big competitors would bag this deal and they would eventually lose out in the long run. according to the article written by Thomas Lipscomb, google would have to "actively assist the Chinese government in barring access to thousands of Web sites and search terms that the Chinese feel might destablize its authoritarian government.". This totally shows us that google would go to any extent to make an extra buck or two and would not stand for what is right, that is freedom of speech and Privacy, which is again funny because Google is at loggerheads with the US government on the above issues regarding child pornography. concluding i would just like to say that Google should not cooperate with a government where they do not know the meaning of democracy and should act ethically and refuse to coperate as they are doing with the US government.

siddharth sudhakar

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