A FIELD DAY FOR THE MEN

IIPM, GURGAON

The US banking sector isn’t for the boys anymore and the going may not be easy even for banks that avoided the sub prime trap, but lack scale. Time for critical decisions, says sunanda roy of 4Ps B&M

Just pick them up if your ‘chopsticks’ (read: financial strength) are strong enough! That’s the scene today at the breakfast tables of banking giants that managed to ride the turmoil; because fallen banking giants who have been swept of their feet by the financial storm, make for easy pickings today...

“Wall Street’s leading investment banks have either disappeared or been transformed by the credit crisis,” state Patrick Armstrong and Morgan McGowan, Assistant Economists at Moody’s Economy.com. At the beginning of 2008, there were five major US investment banks that did not also have commercial banking operations: Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. The first two have now become bank holding companies, subject to greater regulatory scrutiny and tighter restrictions on their activities. Bear Stearns was sold to JP Morgan Chase in a deal brokered by the Federal Reserve and Treasury Department in March. Lehman Brothers was forced to declare bankruptcy, and Bank of America acquired Merrill Lynch. More recently, of course, Citigroup and Wells Fargo are locked in a takeover battle for Wachovia. The US banking system, which was highly fragmented for a long time, has seen enormous consolidation as a fallout of the credit crisis. “Four of the top 15 financial institutions in terms of market capitalisation in the S&P 500 stock index at the beginning of the year have gone away in recent weeks and we may see some more going away,” intimated Neena Mishra, Senior Banking Analyst, Zacks Investment Research. Bank of America, JP Morgan Chase and Citigroup, which collectively held 21.4% of the country’s deposits at the end of last year, now hold 31.3% of the deposits. At the beginning of the year, Bank of America was at the top of the list, with a market cap of $183 billion; it’s now in second place with $138 billion. JP Morgan Chase was in the third place at the beginning of the year, but has moved up to the first with $141 billion market cap.

JP Morgan entered the current downturn in a sound capital position and with significantly fewer problem assets than its peers. It has been taking advantage of its relative strength by picking up assets cheaply. The bank also benefits from better goodwill with creditors, counter parties, and even government officials. “JP Morgan indeed appears to be among the relatively limited number of banks that have the capital strength and competitive position to absorb such transactions”, feels Gregory T. Siegel, Equity Analyst, Credit Suisse.

We may see further consolidation in the banking space as bigger players seek to build up their position and may be assisted by regulators in doing so, as we observed in the past few deals. Ultimately, we will see the US banking scenario dominated by the few survivors. For consumers, it would mean lesser bargaining power but also the convenience of a wider array of offerings from one shop. JP Morgan, Bank of America and Citigroup have all bulked up recently. They are all large depositories and all universal banks at this point. “Goldman and Morgan are still pure investment banks, but in a new regulatory structure. It would not be surprising to see them evolve more towards the universal banking model,” added Matthew. With recent deals, it looks as though we may be headed towards a meaningful consolidation wave of US banks. Smaller banks may find it harder to continue alone, while strong larger banks may stand to benefit. Stronger medium-sized banks could conceivably migrate higher to larger-bank status, given the likelihood of a fewer number of large global banks. “In general, we’re seeing the ultimate triumph of the commercial banking model,” opined James Kim - Editor in Chief - Finance, FierceMarkets.
Moreover, banking power will now be concentrated in the hands of a few large banks, notably the big three JP Morgan, Bank of America & Citigroup. The rest, will, of course face the critical choice of whether they should look to make a giant leap; or wait for the right set of chopsticks!

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Source : IIPM Editorial, 2008

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

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A real mover & shaker

IIPM, GURGAON

With 25% share of the online ad pie, Interactive Avenues has big names in its kitty

When a company wants to advertise using traditional media like print or TVC, the obvious choices are the JWTs and Rediffusions of the ad world. But with alternate media forms like digital, online, OOH, et al, becoming more popular the very same companies look at new agencies with expertise in the new media forms. Although online advertising accounts for just 1% of the $5 billion advertising market, it has still become a favourite place for agencies to park their moolah. Interactive Avenues, which started shop in 2006, is a self-proclaimed specialist in offering creative digital marketing solutions to advertisers and marketers. In its two years of existence, the agency has cornered almost 25% of the online advertising pie in India.

With over 200 digital marketing campaigns for biggies like ICICI, AOL, Future Bazaar, Colgate Palmolive, Reliance ADAG, Tata Mutual Fund and ITC Foods, Interactive Avenues has a successful track record, thanks to its presence across all verticals, making it a full service digital agency, wherein all digital services are housed under one roof – from media services to creative, from search marketing to social media optimisation, from SEO to analytics. “Our aim is to be a leader in each aspect of digital marketing, be it creative, display or search on the Internet and mobile,” states Anjali Hegde, Co-Founder & VP, Interactive Avenues.

Interactive Avenues took advantage of being a first mover in the digital marketing arena & had received funds from Sequoia Capital India to boost its business. The agency works as a consultant and partners with clients to ensure that their business objectives are achieved using digital media. The idea is to provide value added counsel with the advertisers and publishers, in order to participate in the overall marketing process of the companies. In 2007, Interactive Avenues created ‘Attack of Germosaurus’ viral campaign for promoting Oral Health Month, Travelguru ‘Reserved for You’ campaign, etc. The agency has a number of firsts to its credit – country’s first digital Agency of Record with ICICI Bank, first Google Video ad & first honoree at Webby Award. All this has given Interactive Avenues an edge over others.

What’s more? With the number of Internet users increasing in millions, Internet search along with display will add many zeroes to the agency’s profit figures. Asserts Hegde, “Our pitching strategy is generally centered on one big idea, which would provide the most creative solution to the client’s marketing objective. We also take a long term view of the business to ensure that the ideas presented are cost effective, scalable & sustainable. We go after clients, who in the long term, would benefit from the digital space. All our plans are directed towards becoming a dominant player of the digital ad market, when it becomes 10% of the total ad market.”

What makes Interactive Avenues stand apart from others in the same genre is its ability to help advertisers understand the true potential of the digital medium. “It feels really great when advertisers and publishers take pride in our work,” adds Hegde. Well, now you know that there is a thinking agency that aims to help advertisers meet their ‘Business Objectives’ using digital media.

Neha Saraiya

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Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
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IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Getting ready for a brand blitz? Wait...

4Ps Power Brand Awards 2007

Typically, the bigger the brand, the more the chances of it being picked up by counterfeiters to copy, fake and sell. From shampoo, batteries, auto components, clothes to DVDs-CDs, prescription drugs and electrical equipments, every product in every industry is vulnerable. Abanti Sankaranarayanan, Executive Director and Deputy CEO of Mount Everest Mineral Water Limited (another bottled water brand facing the onslaught of smart fabricators) explains, “The counterfeit market is impacting not only companies and their consumer base but also affects the country’s growth.” Incidentally, the government is losing over Rs.9 billion every year, due to sales tax accruals from such unauthentic products.

Market watchers confirm that highly popular and advertised brands are the most likely victims of counterfeiting or piracy, targeted because of their demand and the ‘aspirational’ tag attached to them. The FMCG sector is reportedly losing Rs. 80 billion every year due to counterfeiting, where as SIAM estimates the size of the counterfeit auto parts industry at between Rs.44-63 billion. Says Zaheer Khan, Chairman, EIPR: “Companies spend huge amounts on advertising to increase market share by 1-2%. Anyone losing 10-20% share due to counterfeiting is a huge revenue loss.” Adds Aakash Taneja, Executive Director, Institute of Intellectual Property, FICCI, “Estimates suggest that Bollywood alone suffers losses to the tune of Rs.30 billion every year with films alone suffering Rs.20 billion annually to piracy.” The black market for pirated software in India stands at a whopping $1.275 billion. You do the math!

On their part, more often than not, companies turn a blind eye. After all, imitation is the best form of flattery, right? And if only 2-3% counterfeiting of your brand is there, you wouldn’t bother. But Khan says that it’s important to have checks and balances. “Counterfeits can never stop, but can be brought down to manageable limits. Limits can be defined by brand-owners only,” he says.

Vedavalli Rangan, Industry Manager, ICT Practice, Technical Insights, Frost & Sullivan adds that while in the short run, imitation may seem the best form of flattery (seemingly enhancing brand awareness), “in the long run, the company loses out on its brand image.” The impact is felt largely in rural parts of the country, as illiteracy and low-awareness makes identification of brands synonymous with their packaging. The task of the fake manufacturers becomes explicitly easier in such cases, as they retain similar packaging with minor name modifications - a la Bonds for Ponds, Flair and Lovely for Fair & Lovely, Abibas for Adidas, et al.

The government, investigation agencies and IPR enforcers are making best efforts to track and tackle the menace, but in a country boasting a huge and diverse market, not to mention a less-than-stellar record of coordination among enforcement agencies, the counterfeit industry is flourishing and how. Entrepreneurs like Komla and Das are being born every day. And while the trendy marketer can hardly afford to shun advertising, the only solution in sight appears to be further strengthening brand awareness, reach and penetration, so consumers are not taken in by ‘Demin’ instead of Denim!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...