IIPM - ARTICLE AND PUBLICATION: April 2013

Tuesday, April 30, 2013

Letters to the editor

Insightful content
The Joint Editor of B&E, Steven Philip Warner, has pulled it off once again: picking leaders in the US profits stakes. Yet, his top twenty list of one-year of stellar performance is dependent on managers and their staff out-guessing the markets – which over a longer term, does not occur. We must remember that “In Search of Excellence” was a 3-year best seller,yet its 43 focus firms have died away; and also, one can’t create success by copying the ‘rules of guru’.Warner, however, does look carefully at the operations of his firms and argues for their future success by anchoring them in a wider context – which is what I hope ‘talking heads’ in the media would do more often rather than provide neat ‘sound bites’ or ‘clever quotes’. I wish Warner and B&E all the best for their insightfulness: I will give them 5/5.

Dr. Frank Richter
Former Director of the IMF and Current Chairman, Horasis

Software is in
In reference to the story on the Indian IT sector in Business & Economy (Revisiting IT – Beyond the street), we have recently conducted a survey of 20 of the largest IT services providers to create a global software asset inventory. Software assets have always been part of the IT services players’ portfolio of offerings. France’s Sopra or Canada’s CGI have had software assets since the 1980’s. Indian players like NIIT Technologies have started investing in such assets in the 1990’s. Interestingly, the number of software asset creations has exploded over the past 2 years. According to the survey results, more than 52% of the total software assets were created in the past 2 years. In parallel, most large services companies have created or are creating the required organization that will enable them to transition to asset-based IT services.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Saturday, April 27, 2013

Meeting the sub-7 degree challenge

An economic slowdown is bad enough, and prevailing sentiment on India's prospects due to the oft cited 'policy paralysis' makes it worse. However, considering the long term demand potential, the profit leaders of India Inc. should take the lead in bringing investments, growth and faith back.

India’s growth engine slowed to a rate of 6.5% in the previous financial year, which presents India Inc. with what we call the sub-7o challenge (GDP growth falling below 7%). Perceptions of the country’s potential, though, went down by several notches. To be fair, optimism on India will continue to ebb and flow in future as well, but what remains unchanged is the paradox that characterises India. In the month of June, we became, most unwillingly, the flavour of global economic debate, when Standard & Poor’s revealed that we risked being the first among BRIC nations to lose our investment grade rating. Interestingly we receive this warning despite outgrowing Brazil ( GDP growth of 2.7%) and Russia (GDP growth of 4.3% in 2011)! In the same month, India, along with fellow BRIC nations pledged $75 billion to the IMF fund for the Eurozone, where the likes of S&P should be giving ‘rescue’ ratings and developing an altogether new scale. Some experts even project this as a fitting reply to the S&P rating! You do not need to look at the report to ascertain the rationale for this bearish sentiment. A government that predicted GDP growth of around 8.2% for the last fiscal initially, seems to be either too laid back or too constrained to make amends for the reduced figure, and the central bank isn’t helping either. But for the 50 basis points cut in April, RBI has kept interest rates high. The industry laments the RBI’s lack of concern for growth and fails to understand why interest rates are being kept high despite manufacturing inflation having come down. Unfortunately, if one looks at the HSBC Manufacturing Purchase Manager’s Index for June 2012, rate cuts could be delayed even further. The index read 55 in June compared to 54.8 in May, and

the report claims that input and output prices have risen significantly in June. Furthermore, a weak monsoon threatens an upward push to an already high WPI of 7.55% in May. However, delaying rate cuts has a detrimental effect from another perspective. High interest rates are leading to heightened incidence of debt defaults among SMEs, due to which toxic assets are entering our banking system at an alarming rate. Furthermore, investor uncertainty has reached new heights following the announcement of GAAR. Though it has been rolled back, no one is sure when it will return. There’s no timeline for the implementation of GST. Economists insist that FDI in retail could be a major step towards improving supply chain deficiencies in agriculture and bringing down inflation, but the government remains locked in a political logjam. Considering that there isn’t much fiscal room, urgent policy measures are needed to improve investor sentiment. India has received an impressive $36.5 billion in FDI equity inflows in FY 2011-12, a growth by 88% yoy (Department of Industrial Policy & Promotion). It’s important that this momentum is not lost.

Mention the word strategy to India Inc. and they would, with reasonable certainty, point an accusing finger towards monetary & fiscal policy. But then, even in this environment, there are businesses that continue to outperform. A look at our B&E Power 100 list this year as compared to the list five years ago provides some interesting insights. There are 32 new entrants, & some of the prominent ones include DLF, Jaypee Infratech, Adani Ports, Yes Bank, Axis Bank, Sun TV Network and Cadila Healthcare. Notable exits include Suzlon Energy, Reliance Communications, HCL Technologies, Unitech, MTNL, VSNL, Tata Tea, Tata Chemicals, Videocon & United Spirits. The reasons vary greatly, but the crux is that 68 members in the list have stayed the course and continue to be part of the list. And six of them remain in the top 10. Credit it to their world class practices, or their overwhelming hold on the market, they have managed to excel in the best & the worst of times.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Wednesday, April 24, 2013

“We’re looking at optimisation in terms of the right structures”

Carlo Chiarello, Executive Vice President – Smartphone division, Research In Motion talks to B&E about the future strategic direction of the company

B&E: After the appointment of Thorsten Heins as CEO in January 2012 how are things shaping up at Research In Motion?
Carlo Chiarello (CC)): It’s business as usual, specifically in terms of what Thorsten has announced. We’re looking at optimisation in terms of having the right structures at the right places. As we have something important to announce, the media will be involved.

B&E: You have recently launched the BlackBerry Mobile Fusion software which will also support competing smartphones. Don’t you think the move undermines your ability to promote BlackBerry smartphones in the enterprise segment?
CC: Not at all. We feel very strongly that we are absolutely open to making sure our enterprise customers have the best management solutions possible for all their devices. And BlackBerry Fusion is a result of a lot of our enterprise customers saying that they need solutions for other products that couldn’t really use our network infrastructure. We don’t think it’s bad at all. We think that we are helping a lot of enterprises do the job that we started doing for BlackBerry by allowing other devices to use it as well.

B&E: So the BlackBerry 10 devices would be based on the QNX Operating System...
CC: At its core, yes. QNX has been a great company that we acquired a while back. So the BlackBerry 10 infrastructure would be based on technology developed by QNX.

B&E: The PlayBook was the first device to use a version of the QNX OS and had some compatibility issues with your network. Do you think devices with the new OS will manage to utilise RIM’s entire network infrastructure?
CC: I’m not sure how severe this issue was, but the BlackBerry Mobile Fusion will not just help secure other platforms such as iOS and Android but will also take care of issues that customers might have encountered with the PlayBook, additionally supporting BlackBerry 10 devices.

B&E: The BlackBerry Messenger is one of those features which make BlackBerry devices extremely lucrative for customers. Are you planning to introduce BBM on the PlayBook anytime soon?
CC: That is something that our development teams are looking at. I can’t make a commitment in terms of when it’s going to happen. But what we’ve found so far, from people using the PlayBook, is that they use it with their BlackBerry device. The BlackBerry Bridge app makes BBM work on the tablet. So we’re still exploring. If it’s feasible, then we’ll definitely have a BBM app for the PlayBook.

Read more......

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Saturday, April 20, 2013

B&E Indicators

Inadequate logistics network

Logistics infrastructure is a critical enabler of India’s economic development. Recognising this pivotal role, India has tripled its logistics infrastructure spend from $10 billion in 2003 to over $30 billion in 2011. However, despite this increase, the country’s logistics network remain insufficient. Still seven corridors along with some national highways handle 40% of road freight traffic even though they are less than 0.5% of the Indian road network.

Relies excessively on roads

India’s roads account for a higher share of freight traffic compared to other continental sized countries like US and China. In fact, India’s dependence on roads is more than three times that of China. This is despite the fact that a large part of the country’s freight traffic comprises bulk material and moves over long distances that can be more economically served by rail and waterways.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Friday, April 19, 2013

Can he be a change agent for his party?

Keeping in mind the mood of the electorate, which has become increasingly clamorous for change and development, Akhilesh Yadav appears to be going about in earnest giving his party a much-needed makeover.

Way back in the 1980s two Young Turks set out on a mission to transform Indian politics. One of them was Ajit Singh - the America-returned son of Chaudhary Charan Singh (aka kisan neta), the former Prime Minister of India. A computer engineer who spent 17 years in the US, Ajit made Baghpat his pocket borough, travelling the length and breadth of the constituency. He went all out to court the youth and dreamt of bringing about a massive change in the state’s political scenario.

The other young man was none other than former Prime Minister Indira Gandhi’s son, Rajiv Gandhi. A Cambridge University alumnus, Rajiv became a beacon of hope for the educated youth of the country.

Both Ajit and Rajiv went on to achieve huge success in terms of winning thousands of followers. Most still fondly recall Rajiv while Ajit Singh, now a Cabinet minister in the UPA government, is known as one of the most opportunistic political leaders of our times.

Flash forward to the present and there is an unmistakable sense of déjà vu. Once again we see a young duo trying to change the political scenario of the state. One of them is Rajiv’s son, Rahul Gandhi, and the other one is former UP chief minister Mulayam Singh Yadav’s son, Akhilesh Yadav. Both are ‘foreign educated’.

Recent months have seen Rahul take upon himself the challenge of resurrecting his party from the state of political wilderness in which it has been moldering since 1989. In a bid to revive his party’s challenge in UP and galvanise an otherwise moribund party apparatus in the state, Rahul has undertaken numerous stump tours and has been organising party and public meetings in different parts of the state. The Gandhi scion, in his campaign speeches, has repeatedly harped on the issues of employment and development and has talked of transforming the fortunes of the state if his party is voted to power. And though Rahul has staked his own political credibility in the polls most political observers are not very optimistic about Congress’s chances. But that has, however, not prevented senior Congress leaders such as Pramod Tewari from claiming that the Congress would be able to win majority on its own.

Though both Rahul and Akhilesh have their own challenges to face, the latter’s task seems more difficult. As the State President of the Samajwadi Party - an outfit accused of promoting casteism and sometimes even called the ‘goonda’ party. - not only does he need to change the party’s image, he also needs to bring it back to power. Sanjay Lathar, National President of Samajwadi Yuvjan Sabha and the man in-charge of Akhilesh’s political campaign, says, “We have the largest number of youths and females contesting the elections. About 122 of them are highly educated first-timers and 75% have held positions in student unions. We have also created history by giving tickets to 40 women.” According to Lathar, the party was approached by about 50 candidates with muscle power. “Around 30 to 35 of them would have won the elections. Yet the party decided not to embrace them,” he added.

Read more......

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Tuesday, April 16, 2013

Drafting a better future?

The Draft National Telecom Policy 2011 has introduced amendments which benefit the industry. Changes have also been made to clauses pertaining to M&As and exit routes. However, a lot more needs to be done in order to ensure welfare of telecom operators.

One look at the Indian M&A outcomes of 2010, and the dynamics of the Indian telecom industry instantly become clear. According to statistics compiled by Assocham, the combined value of the telecom M&A deals in India stood at $22.7 billion in 2010, which roughly makes up for 67.19% of the entire deal volume across India Inc. In fact, at any given point of time, there are 14 odd players competing to extend their presence in the world’s second fastest growing telecom market after China.

No doubt, Indian telecom has emerged as one of the greatest economic success stories, registering a consistent overall growth rate of more than 35% over the past decade in terms of subscribers (according to a World Bank study, a 10% increase in teledensity is known to boost GDP growth by 1.3%), but when it comes to regulatory framework the industry still lags behind it global counterparts and as such needs radical reforms. More so because the dream run of new entrants (including Videocon, Etisalat, STel, and MTS) – who ended up paying Rs.81 crore for acquiring 3G licences – keeps hitting roadblocks as more players join the bandwagon further increasing competition in an already cluttered business segment.

Further, entry costs are exorbitantly high and operating margins are overwhelmingly low. In fact, currently only the top four private telecom companies are EBITDA-positive. Although the operating environment has improved after Bharti’s July 2011 initiative to increase on-net, pre-paid and SMS tariffs by 20% was followed by major competitors, their margins still remain under pressure. This leaves telecom operators with no choice but to consolidate in order to put a cap on the ever rising costs. However, under the current contours of the regulatory norms established by the Telecom Regulatory Authority of India (TRAI), the largest telecom entity can consolidate to command a market share of up to 30%. Anything beyond that is subject to scrutiny and does not get necessary regulatory approvals. As such, while players like Bharti Airtel consolidated their position both nationally as well as globally (it acquired Zain’s African business for $10.7 billion), others such as BPL, Max Hutchinson, AT&T, Telstra had no choice but exit.

Therefore, consolidation and exit are two of the most important issues that need to be addressed in order to make the Indian telecom industry more efficient. This is where the new Draft Telecom Policy 2011 (introduced on October 10, 2011) becomes significantly important. As per the recent amendments incorporated, a deal giving birth to an entity with up to 35% market share will have no interventions from regulatory authorities. Deals which gives a company market share of up to 60% will be examined on a case to case basis. However, any deal where the new entity crosses the 60% barrier will come under strict interventions from TRAI. This seems like a move that will boost consolidation. But the fact that the draft NTP does not provide relaxations on restrictive M&A regulations offsets any benefit. As per a recent report issued by Fitch Ratings titled Indian Telecom Services: Regulatory Uncertainty to Continue, “TRAI’s recommendations to require a minimum of six operators per circle, for entities not to have over 30% market share or maximum spectrum of 14.4Mhz for GSM and 10Mhz for CDMA, effectively block consolidation in the sector.” But having said that the agency still believes that consolidation among the existing 10-13 service providers in each circle is inevitable and that the Indian telecom sector can sustain at most six or seven players in the long run.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Monday, April 15, 2013

B&E This Fortnight

INTERNATIONAL

BUSINESS, ECONOMY & FINANCE
He end of Gaddafi

In what will probably be remembered as a landmark event in the history of dictatorships, Muammar Gaddafi, the man who ruled Libya for 42 years was captured, beaten ruthlessly and finally killed on October 21, 2011, as he tried to escape with his convoy. Although it is not clear how the tyrant was murdered, videos shot by bystanders and interviews of eye witnesses reveal the disturbing events which led to his death. Most of the videos circulating on the internet are graphic in nature and give an extremely violent account of his death. The entire drama led to an intervention by the US Secretary of State Hillary Clinton, who has even suggested a possible enquiry into the incident given its chaotic nature. However, the more important question is the risk of a power struggle, primarily because Libya has the ninth largest oil reserves in the world. According to data released by the CIA World Factbook, the country produced 1.789 million barrels of oil a day before the unrest started. This accounted for roughly 25% of the GDP. In the aftermath of these events, oil production has fallen to 400,000 barrels a day. More importantly, even if Libya does manage to restore production, it is not enough to fulfill the employment needs of all Libyans demanding jobs. The developments need to be closely monitored by the US in order to establish a healthy democratic system..

The netflix syndrome

‘Strategy’ has turned out to be one of the most alluring and elusive business terminologies ever conceived. What Apple has achieved through strategy, HP has destroyed. In yet another case of a strategically and financially sound company getting it wrong, Netflix has almost undone what it had managed to do over the past several years. A few weeks back, Reed Hastings, co-founder and CEO of Netflix, announced that he would be splitting up the company into two parts. While Netflix will continue to provide streaming service, the DVD rental business would be christened Qwikster. The idea has been hailed by some and criticised by many. The poorly introduced pricing and service alterations ended up upsetting customers. In fact, analysts are estimating that Netflix might have lost as many as 600,000 US subscribers since July. The announcements did not alienate the customers of its live streaming service who continued to opt for the $7.99 monthly rental plan. The backlash came from subscribers who were used to receiving DVDs in red envelopes. It appears that they perceived the streaming service as a free add-on. Now, the CEO has suddenly decided to backtrack on the plans. How the company will regain lost ground is still a question, but this was a very bad move on the part of Hastings (no wonder he’s on the board of Microsoft).

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Saturday, April 13, 2013

Global top 10 debt analysis

The top 10 indebted nations of the world are the countries who are currently struggling from the financial downturn. While US tops The list in terms of absolute value, japan stands out in terms of debt to gdp ratio. Though raising of the debt ceiling by the us has already triggered a fear of double dip recession, there are others as well who are giving the world sleepless nights.

Everybody knows it

The raising of the debt ceiling by the Obama government followed by S&P’s downgrade of US treasury bonds says it all. With the country now sitting on top of a debt pile that is a notch higher than its GDP of $14.7 trillion, the largest in the world, the global economy is now teetering on the brink. But the gradual escalation in debt, which has been happening for over a decade before it just shot up to $10.5 trillion in 2008 after a $700 billion bailout package, doesn’t seem to be taking a breather. IMF forecasts US debt will increase to $15.15 trillion by 2015. Obama’s ratings have apparently fallen to the lowest ever. If one could prove a negative correlation of his ratings with debt, would that motivate him enough to reduce US debt?

Do the world like japan

If the US showcases the highest national debt, Japan is not too far behind with a total debt of 1,055.54 trillion Japanese Yen ($13.75 trillion using exchange rates prevailing on August 17, 2011). Considering the current sensitivity of the global financial market, the impact of the dire fiscal position of Japan could be felt worldwide as it is also capable of creating a domino effect on the sovereign debt front. The country has so far been able to save itself despite a huge debt load since the days of the real estate bubble burst (early 1990s). Also, a major reason why the country is still not considered to be in a financial-crisis mode is that it owes most of that debt to itself. Moreover, IMF forecasts Japan’s debt will grow at a slower rate than the US.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Friday, April 12, 2013

Time to unleash the green growth

Be it climate change, water scarcity, biodiversity loss, or ecosystem degradation; green economics can weave together these strands. According to ‘TEEB’ report, ecosystem delivers essential services worth $21 to $72 trillion a year while the commercial opportunities in natural resource sector alone could be between $2.1-6.3 trillion by 2050. The implication: green and growth can go hand in hand.

Seeking Competitive Gains
Given the prevailing environmental and economic challenges, countries and corporations have come up with policies and strategies in order to shift towards cleaner and greener business practices along with green innovation. The International Energy Agency (IEA) is of the view that greener business practices will have important economic pay-offs in terms of resource efficiency. IEA estimates that 17% (approximately $46 trillion) increase in energy investment is required globally between 2010 and 2050 to deliver low-carbon energy systems, which will consequently yield a cumulative fuel savings worth $112 trillion. As a competitive factor, companies are seeking competitiveness gains through clean and green technology investment.

Environmetnal Challenges

OECD, in its recent report, states that the impact of economic activity on environmental systems are creating imbalances which are putting economic growth and development at risk. As a matter of fact, existing loss of biodiversity and degradation has already had dramatic consequences for business; soil erosion in Europe is estimated to cost 53 euro per hectare per annum. A 2007 report of the World Bank estimated that the cost of excessive use of groundwater in China was in the range of 0.3% of GDP (the cost fell largely on the agriculture sector). The TEEB 2010 report estimates the annual economic loss caused by introduction of agricultural pests in the US, UK, India, Brazil et al to be more than $100 billion.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Monday, April 08, 2013

Asian bond market report

Capital flows into emerging East Asian bond markets remained strong as investors chased yields during the first half of the year. Relatively strong economic fundamentals, interest rate differentials, and the potential appreciation of regional currencies acted as the key pull factors for these countries to offer higher yield on relatively longer tenure bonds.

Indices heading south again

Unresolved sovereign debt issues in the United States and the ongoing Eurozone debt crisis has jolted investors’ confidence on global asset markets. Rising risk aversion has sharply dragged down global equity markets, particularly in the aftermath of Standard & Poor’s (S&P) downgrade of US sovereign debt. However, considering the baseline scenario, MSCI indices show that the Emerging Europe stock markets have been the worst affected lot since the 2008 financial crisis. And the scenario has been further aggravated by the sovereign debt crises in mature markets and the potential impact on the wider economy. This has led investors to re-think their definitions of risk-free and risky assets and prompted safe haven flows into gold, the bonds of higher rated corporates.

Us stands tall at the top spot

As suggested by an Asian Development Bank report, demand for local currency (LCY) government bonds picked up in the middle of 2010 and remained strong throughout the first half of 2011. Overall, there has been a bullish flattening of yield curves in most markets; in many cases there has been a downward shift of the entire yield curve. Total LCY bonds outstanding in emerging East Asia grew 2.4% on a quarterly basis in 2Q11 to reach $5.5 trillion, with growth driven more by the region’s corporate markets rather than its larger government markets. The most rapidly growing corporate bond markets in 2Q11 were Indonesia (8.9%), the People’s Republic of China (PRC) (6.3%), Malaysia (4.9%), and Singapore (4.7%).

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Thursday, April 04, 2013

Search for The Next ‘Hundred Zeroes’!

Technology Companies are setting up VC funding Arms, Raising optimism of a Great Inorganic Leap forward. Seriously, aren’t corporate venture funds already too overrated?

When Google founders Sergey Brin & Larry Page decided to take up VC funding of $12.5 million from Kleiner Perkins Caufield & Byers in 1998, they told the VC firm’s partner John Doerr that they were willing to hire an outside CEO, but they backtracked a few months later; saying they would like to go on their own. They were then taken by Doerr to meet a number of CEOs like Andy Grove of Intel, Jeff Bezos of Amazon & Steve Jobs of Apple to really appreciate what a CEO’s job entailed. Finally, they relented on the outsider proposition, provided the outsider was Steve Jobs and no one else, before finally being convinced to explore further!

Considering Steve Jobs’ iconic personality and a high probability of a clash of equals, that may not have been a genuinely good idea. But this anecdote from Steven Levy’s book titled In the Plex: How Google Thinks, Works & Shapes Our Lives, really underscores how Google’s founders never really were comfortable letting their baby being run by anyone but themselves. The inevitable happened this year, when Page took the reins as CEO and Eric Schmidt became Chairman. Page already is talking about taking Google back to its start up days when it comes to the culture of innovation.

They have always been concerned about the company slowing down on growth. Levy mentions that they once fired all the middle managers for that! In fact, though not all may take such extreme action, that reflects a genuine concern of technology companies beyond a certain size, as they risk getting blown over by the next disruptive technology in a dynamic industry. This fact has proved true for companies like Microsoft, Yahoo!, HP, BlackBerry, Dell, IBM and Google itself, to an extent. Apart from a number of initiatives to get the company on the innovation drive again, which include working on book search and autonomous vehicles, one of the Google’s most ambitious moves is with respect to its VC firm Google Ventures, which has earmarked $200 million to fund promising start up companies (touted as a move to find the next Google?). That’s significantly large by VC standards and Google claims that it has a special secret algorithm that can help it find what the next big start ups would be. Apart from Google itself, a number of big technology names are on the list of corporate venture funds like IBM, Intel, SAP, Microsoft and National Semiconductor. But how successful can this VC model led by technology companies be?

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Monday, April 01, 2013

B&E This Fortnight

INTERNATIONAL

BUSINESS, ECONOMY & FINANCE

Japan Upbeat on M&As

Taking a giant step towards shaking off the slump bedevilling the Japanese industry, pharma giant Takeda and nuclear reactor manufacturer Toshiba have decided to lead the nation’s aspirations for cross-border takeovers. The unprecedented earthquake has taken a heavy toll on the entire nation, shrinking the Japanese economy by more than 3.7% for the first quarter Y-o-Y. So, realising that they can’t survive on domestic business alone, Takeda agreed to take over pharma company Nycomed, which gets most of its revenue from emerging markets, for $13.7 billion, whereas Toshiba agreed to shell out $2.3 billion for buying Landis+Gyr, a Swiss electronic-metering company. Taken togther, the two deals account for a whopping $16 billion. Japanese companies have traditionally followed the policy of hoarding cash, especially in times of economic distress. But now the thriftiness is being shrugged off as more Japanese firms now scout for across-the-border acqusitions. Boosting the M&A wave further are big firms like Mitsui Sumitomo Insurance Co, which has readied plans for the acquisition of Indonesia-based PT Sinar Mas Multiarta’s life insurance unit for $818 million; another company, Sumimoto Mitsui Financial Group Inc has been in talks to buy 25% stake in Malaysian Financial lender RHB Capital Bhd for $1.6 billion.

Symantec’s purchase

Symantec Corp, makers of Norton, the popular anti-virus software will acquire Clearwell Systems, a privately held database specialist firm, for $390 million in an all cash deal. The deal is expected to close in the September quarter. With this move, the world’s No. 5 software maker is aiming to shore up its storage and cloud computing capability, and become a key player in the data discovery market. Symantec has said that Clearwell’s eDiscovery tools will help its Enterprise Vault eDiscovery system and also the other cloud-based database. Clearwell specialises in ‘electronic discovery’ or the categorising/processing of data, a market that Gartner estimates will be worth $1.7 billion by 2014. Law firms are increasingly relying on such IT companies that can archive and search massive troves of court documents, which simplifies the vital discovery process and cuts down on time and costs otherwise spent on painstaking staff work. Symantec disclosed that the purchase would dilute adjusted earnings by 1.5 cents per share for the 2012 fiscal, and is expected to add to fiscal 2013 earnings. Symantec shares held steady around $19.57 in after-hours trade following the announcement.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist). For More IIPM Info, Visit below mentioned IIPM articles