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Take Maruti Suzuki: The now wholly-owned Japanese brand, it seems, changed gears just in time to survive and thrive despite the slowdown. Though not completely unaffected by the slowdown (the market leader posted a decrease in sales for all three months in the last quarter), in January 2009, Maruti Suzuki bucked the trend and reported a 5.59% increase in domestic sales. A closer look at their figures reveal that their recent additions to the A3 segment (D’zire and SX4) is what is making the numbers look so cool. The segment saw a two-fold growth, selling 6,590 units (even higher than their cash cow Maruti 800) as against 2,939 units in the same month last year.

But managing their brand portfolio well is not Maruti’s only claim to the marketing fame. Over the last quarter of stagnating sales, the motor company went on an overdrive to enhance its market penetration. For one, instead of restricting its annual dealer level discount scheme till the end of December (as it does every year to clear year-end sales), Maruti extended the lucrative cash discounts way into February; next up is their strategic tie-up with Corporation Bank to finance Maruti Suzuki vehicles on an all India basis to enable credit access at a time when banks are antsy about lending too easily; and finally, proactively embracing the ‘voluntary disclosure of fuel economy’ to drive home the message to consumers about their leadership in making highly fuel efficient cars. As per Shinzo Nakanishi, MD & CEO, Maruti Suzuki India Limited, the move “would enable customers to make an informed choice when purchasing a car in the market.” Look closely and you realise that all these measures were perhaps aimed at luring those 40 million PSU guys, presently flush with funds they made from the 6th Pay Commission killing. “The recent pay hikes and arrears given to more than 5 million government employees after implementation of 6th Pay Commission report can bring back the lost momentum in the industry,” says Shushmul Maheshwari, CEO, RNCOS.

What did the guys at Maruti do? They revitalised their brand despite and in spite of the slowdown by simply emphasising its core brand proposition – value for money, fuel efficient cars – and increasing its value!

What? You think that was a fluke? Okay, here’s another one!

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Source : IIPM Editorial, 2009

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

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Have the cars, lost the road!

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The company had undertaken some prolific investments in the United States, but now it all appears to be overdone to an extent. While launching the expanded R&D facility in Michigan, Shigeki Terashi, President, Toyota Technical Centre said, “Toyota’s investment of $187 million to advance R&D demonstrates our commitment to the North American automotive industry.” Was this called for? An open question…

As a result of this argument, Toyota after a long hiatus is ready to offload close to 1,000-1,500 regular employees in this crisis. Toyota employs close to 30,000 workers in North America and UK and operates about 11 plants in these regions. The company also plans to trim its workforce further and wants to get rid of more employees through VRS. It is now clear that even for Toyota, the days of halcyon could well be over and a stricter market analysis is the call of the day.

Hit hard, Toyota is already beating around the bush or at least visibly so. Before the entry of the new president from the founder Toyoda family, the company has started working on the ‘Market Vision Plan’. Under this plan, Toyota will be working in a more docile way. For once, the company will be focusing more on product susceptibility to changing market conditions, planning for product launches up to the year 2015 and managing production cycles better. In all likelihood, Toyota must modulate its production in line to the changing demands of the market and must have the flexibility to divert unsold inventories towards more prolific markets.

The last six months have made it clear that even Toyota is not immune to making strategic bloopers. As a result of its aggressive expansion strategy, perhaps gloating from its success of becoming the world’s number one automotive manufacturer; an inevitability that was being talked about for years; Toyota is now making news for the wrong reasons. It has been rightly said, you cannot have too much of a good thing. Now what does Fujio Cho do with all those cars???

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Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
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Play the masterstroke

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Don’t be exhilarated by falling home loan rates, the best time to buy your dream house is still to come

Time, money and opportunities wait for none. And thus not timing the opportunity stands for loss of money. That’s why Gurus say have patience. After all it has its own advantages, especially for those who are involved with the financial and the real estate markets. And considering the present market conditions one such opportunity seems to be present ‘round the corner’ for those who are waiting to invest in real estate.

As the demon of slowdown slowly creeps into the Indian economy and the government is trying to shrug-off all concerns with its stimulus packages. As part of a good news for aspiring real estate buyers and as a result of the combined effort from the government and the Reserve Bank of India, home loan rates have come down substantially. While the interest rates on loans up to Rs.5 lakh has been restricted up to 8%, the same for loans between Rs.8 lakh and Rs.20 lakh is fixed at 9.5%. Moreover, the above mentioned rates can be fixed for up to five years. Now, with these cheap and easily accessible loans at their disposal, its a natural tendency for many of the aspiring home buyers to jump forward to buy their dream house. But then, they should not forget the rule of timing the market. Because as of now, though we have witnessed a slight fall in real estate prices it’s still far from what is being anticipated. (Some very optimistic valuations show that the prices would go down by 40-50% across India. However, few pessimistic research firms like Macquarie Securities confirm that the price falls in most part of India would be around 25%).

Moreover, the real estate players, who are still holding onto their around 50% profit margin, are set to enter into a phase of debt repayment soon. Considering their present liquidity starved situation, the upcoming debt repayment would mean that they are bound to cut on their prices to be able to realise funds stuck in unsold and halfway through projects. And then we may see some real fall in real estate prices. Going by the logic, it’s definitely not advisable to invest in real estate at the moment, feel many experts. Indraneel Karlekar, Senior Vice President and Head of Global Research & Strategy, ING Clarion Real Estate Securities explains to 4Ps B&M, “The macro economic indicators are not yet favourable for investing in reality and the investors should wait for now.”

However, while playing the ‘wait and watch’ game one must not forget the fact that over-waiting with greed may also dampen their profitability. By the way, did you manage to time Satyam’s scrip? Well, some did. Believe it or not, they have tripled their money!

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Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
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Khiladi unbuttons!

1500-plus IIPM students placed across the country with 44 bagging international offers

Joining the league of Shah Rukh Khan, Aishwarya Rai and Sania Mirza; Akshay Kumar, in 2008, became the global brand ambassador of Levi’s 501 collection. While SRK, Rai and Mirza have been the global faces of Tag Heuer, L’Oréal and Adidas respectively; roping in Kumar for the relaunch of their 501 ‘Live Unbuttoned’ campaign, at a time when he was at the peak of his popularity was definitely a smart move by the honchos at Levi’s. The year also saw international luxury watch brand – Tissot – rope in the new chick on the block, Deepika Padukone. It seems that Indian Bollywood stars are all set to take on their international avatars.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM set to beat economic slowdown
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When virtual hopes truly come alive, online...

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SANJEEV BIKHCHANDANI, MD & CEO, INFO EDGE (INDIA) LTD.
naukri.com has been the cash cow for Info Edge (India) Ltd. Here is the man who began it all, talking what his prime focus and targets are, pan-sectors, pan-globe!


How has been the journey of Info Edge since inception?
The journey has been wonderful. It had witnessed its own ups and downs. We have a very successful job and matrimony business and we are in the process of creating one in the real estate also. Even our gulf operations are also doing well. Thus, overall we are satisfied with the growth of the business.

Has the global economic slowdown affected your online portals business?
Yes it has affected us, as in this quarter we grew at just 24% compared to a fantastic 60% in the same quarter a year ago. So undoubtedly, the slowdown has affected us. But a major reason behind this fall in growth was a negative externality. It was because of the slump in hiring due to global economic slowdown.

Out of all the portals which one is the most profitable one and why?
The largest in terms of revenue is naukri.com, followed by Jeevansathi.com. But undoubtedly, naukri.com is the most profitable one. Although in Q2 of this financial year we saw a slump in growth, but the overall profitability of the portal has remained high. And as I mentioned about the major reason behind this drop in growth, it is all to blame on the discouraging yet true global turmoil. The reason for naukri.com being the cash cow is that we have the first mover advantage till date.

What are the challenges that you face in your business of online portals?
There are a lot of challenges and the recent one is the maintenance of strong growth amid the present slowdown. Moreover, managing your employees and curtailing expenditures are the other challenges. As we presently have a total of nine businesses, maintaining all their health is a challenge.

What’s your take on the competition in the industry?
You see, we expect that our competition will be more affected by the slowdown than us. Thus we expect that we would come out strongest from the slowdown in every manner.

How much revenue is earned from advertising?
Much advertising comes from job related sites and things. Non-job related sites contribute only 3%-4% of our total revenues. Which are your main target market cities in India, and what are the factors that you consider before moving to a city? Our main target markets are Bangalore, Chennai, Delhi, Ahmedabad, Mumbai and Pune, but we also have presence in Tier I and Tier II cities. But before moving to a new city, we look at the local market and consider factors such as internet penetration and the web traffic.

How do you plan to market your portals in India?
For different portals, different marketing strategies are followed by us. Like for instance, for naukri.com, we sponsor HR events and do direct marketing. For Jeevansathi.com, we do a lot of advertising including online and television advertising along with telemarketing. However for Shiksha.com, we don’t do much of telemarketing but do online and sales force marketing.

How has the real estate slowdown impacted you?
It’s in our interest. Builders need buyers and we are the most efficient way of bringing buyers to builders, and therefore we are used a lot more. So it has affected us adversly.

Do you have any major tie-up at the moment?
Yes, we do have some tie-ups with media publications in the job space. However given a choice we prefer to operate alone.

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.
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