Rahul Writes

I have done shopping of books on Flipkart.com for a number of times. I have always found it very user-friendly and convenient. I have even availed discounts in the range of 30-40% on the website. More than satisfactory, I would say I have experienced customer delight through Flipkart.  

Flipkart has employed technology for better user experience in a wonderful manner. For example, it always ‘remembers’ my shipping address and asks me if it can use the same. I have now realized how well it makes use of analytics.  

During my last shopping session, I had bought a book from the brilliant author Devdutt Pattanaik. Today, I received an email from Flipkart, informing me about two ‘forthcoming’ books from the same author, titled, “7 Secrets of Shiva” and “7 Secrets of Vishnu”.

Along with this information, Flipkart offered me 40% discount on such ‘Pre-Order’. For reading my favorite author I won’t care to wait for some weeks, or even many months. So just now, I placed an order for both these books.  

Many of my friends have bought electronics items from Flipkart too. All of them feel very happy about their experiences.  

I think Flipkart is really going good to great. I hope they keep up the momentum. What pleases me more is that it is an Indian venture based in Bangalore (its founders are Sachin Bansal and Binny Bansal).  

Flipkart is now being called India’s Amazon.com.

While I hope more Indian websites and entrepreneurs take some leaves out of Flipkart’s growth story and take “Made in India” brands to greater heights, I also think that Flipkart in a way has fuelled a new “reading revolution”. By making books conveniently available at our doorsteps (Flipkart delivers books through couriers at a lightning speed), it has helped a lot of readers and made a lot of regular book-buyers out of occasional buyers. I am sure its contribution from this angle is immense and would grow in the coming days.  

All the best, Flipkart!  

- Rahul

Also posted at [Link]

(Indian Companies) (Business)

The 100 CC Strategy ' flip-flop or tactical?

Many a time I have wondered why business leaders say any particular thing in the interviews. Why do they reveal much of their business strategies? Haven't we read the MNCs talking about their 'India plans' in the newsprint, or Mahindras announcing their strategy for commercial vehicles? Is it that they really think revealing their strategies would help them in some ways?

After a while I put on a little skepticism ' may be they want to fool their competitors by misguiding them about their strategies; may be they just want to give a push to the falling share-prices; may be they want moral boost up for their partners or see it as an advertising strategy; or may be simply the Big Boss needs a little ego-high some times. A lot can happen ' business is a bad world after all.

In 2007, Bajaj had decided to exit 100 cc segment of motorbikes. [Link]. At that time their CT-100 had done well and then Bajaj Platina was not doing bad either. But they had reasons for taking this decision. The profit margin in 100 cc segment is very low and their main competitor Hero Honda takes almost the whole cake (55% of segment in 2006). So Bajaj decided to remain only in the higher capacity segments ' 125 cc and above - where their margins were higher and they had good brands like Discover and Pulsar.

But now, Bajaj has done a flip-flop and has announced to reenter the 100 cc segment [Link]. The company is launching 100 cc Discover (with DTS-Si engine) by the end of this month and it will counter 100 cc Splendor and Passion from Hero Honda.

So what happened to much hyped Bajaj strategy to focus on premium and higher end bikes only and exit the entry level 100 cc segment? Is it because the recession has eaten into the buying powers of customers who now prefer lower cost bikes? Or was the company really not able to read the markets and went on a wrong strategy which it has corrected now?

The reason why this can be a strategic flip-flop is that may be the young MD of Bajaj who took over from legendry Rahul Bajaj started his career with aggression and decided to be only in premium segment where the money lied, but then in the light of recession, he understood the importance of de-risking his business by keeping presence in all segments and hence this decision! But there is a point in what Rajiv Bajaj says in the interview that Bajaj indeed was developing this bike from quite some time and it can't just come up with the product as a contingency measure just-in-time.

I agree with Rajiv Bajaj that the company has not 'changed' its strategy really. May be it really kept the 'original' strategy hidden and sent a wrong note of comfort to Hero Honda by telling that it would exist the 100 cc segment and hence Hero Honda should take it ease and become complacent. In the meanwhile they kept working on the higher-end Discover platform to come up with its variant of a 100 cc bike! Seems like a really good strategy!

I think it is also about brands. Bajaj's Discover and Pulsar have been fairly successful bikes and have good brand names. A CT-100 from Bajaj had become to be seen as a bike for rural areas, while customers in even the semi-urban areas preferred the Hero Honda bikes for their trusted brand names and reliability. When Discover established and became to be seen as a reliable brand, it was in the interest of and convenient for Bajaj to extend the Discover brand even in 100 cc segment. I don't think this move will erode the Discover brand.

This 100 cc Discover with DTS-Si engine will have a mileage of 80 lph and is being promoted as 'long distance bike'. This bike will be in the 'premium entry-level' segment and would fill the gap between entry-level 100 cc Platina and 135 cc Discover. The positioning and targeting of the bike seems to be alright.

Overall, I congratulate Bajaj for this tactical move. I don't see this case of prior decision of exit and then the reentry as a strategic flip-flop. But some challenges would remain to see through that the strategy delivers results. Let us see how customers respond.

(Rahul)

(Indian companies) (Management)

Baffling Corporate Decisions

Business decisions are becoming more and more difficult to interpret. What appears apparent in the beginning is not so in reality and many a time we understand them only by looking beyond the obvious. It seems corporate now a days don't feel any dilemma in what to keep secret and what to drop in the public domain, and are using the power of information technology and media to reach new avenues of strategies and gimmicks. Some of the recent decisions and announcements make an interesting collage.

Reliance ' proposals and disposals

Back in March, Reliance Industries had decided to close down all the 1432 petrol stations it had opened across India. The company had invested some 4000 Crore rupees in setting up these stations and employed 55000 people. Reason was that government had not agreed to pass on the same subsidies to the company as what it had granted to the public sector oil firms. On one side, it made me wonder: how could Reliance be so buoyant at the business planning stage that it believed the government would grant it the same subsidies that PSUs get in order to survive? I tried to calm down my bewilderment by asking myself to wait and watch; may be Ambanis had some hidden Plan-B's. But any good news in the regard is not coming in. On the other side, we didn't realise that when Reliance closed its petrol stations, all its sales went to the PSU oil firms, thereby requiring the Govt of India to churn out Rs 4000 Crores extra in the form of additional subsidies! Interesting? So the decision of the Govt not to give the same subsidies to Reliance still resulted in a loss of Rs 4000 crore to the govt! Now it is evident that Reliance was sending a message across by its decision to close down.

Reliance Retail ' Sending message @ speed of Fire

The first thing Reliance Retail did after public and political opposition to its setting up organised retail stores in Uttar Pradesh was to send termination letters to its 1200 employees it had hired, and announcement of closing down 20 stores. Did this decision to fire employees and bad press coverage cause it any harm? No! Actually it sent a strong signal that the opposition to organised retail in UP was actually resulting in loss of employment rather than save some! A very fine example of sending the right message with a bad news

The Nano ' and the Grand dreams

We all know about the fate of Tata Nano project in West Bengal. Knowing the state of industries there because of trade unions and labour protection policies, I wondered why Singur was Tata's first choice. Later on I understood that the strategic port location, presence of huge middle class customer base in the vicinity and the favourable sops offered by the state government were the reasons behind its selection. But what about the long term sustainability? In a communist state where public life stands still at the call of frequent bandhs by any political party, starting a project there, which was so very critical for the company and for the nation was questionable. The same is true about communist ruled Kerala. Harsh Mariwala, Chairman and MD of Marico who visited our campus told how everyone laughed at him when he decided to put up a plant in Kerala. And successfully managing it despite all odds can still be called one of his major achievements. The public announcements made by Ratan Tata, whether at the negotiating stage or to pull out of the state can be understood because the situation was all political. Right communication by the company was very important because the whole world was watching them and their baby Nano. (Though some suspect the Govt of West Bengal of killing the political career of victorious Mamta Banerjee by not trying too hard to calm the situation with some real sops and compensations for the farmers. If we see it this way, then the defeat of the ruling party in the state in retaining the Nano project was actually its victory in insuring their rule for next two or three decades.)

Jet Airways firing and flip-flop

The case of Jet Airways firing 1100 employees and then inducting them back with some touching and emotional statements made by the Chairman and CEO Naresh Goyal calling company the mother and all employees as her children was an interesting one. No emotional speeches were able to douse the bad press it got, and this episode would definitely leave some bad impressions for the company as an employer for a long time to come. But this whole episode can be seen as an attempt by the Indian airlines industry to wake up the government and get some favourable policies and subsidies in order to survive

State of Indian economy - Pessimism or Propaganda?

Front page of HT on Nov 12 carries a news title, "No more acquisitions, Tata tells his firms". The news report had quoted Ratan Tata's email to the top management of Tata Group firms! Should this email have been kept a secret? Not necessarily so. The decision to make it public is understandable. Due to Indian economy in bad shape ' partly due to global financial meltdown and more critically due to failure of the Indian economic planners ' private firms are the first to get the beating. Their survival is questionable as the raw material costs are going high on one hand, and the competition is merciless on the other. In such a situation, sending panic messages in the markets, raising questions about the sustainability of Indian growth story, making employment an issue in a country with 7.2% unemployment rate, the message is clear ' the government has to act and give more breathing space for the private firms. But after a limit, it seems that the general pessimism and the panic that is created in India by the private firms is more in the air than on the ground. India is still not that much affected by the global financial crisis, but companies are making use of this gloomy situation to achieve some difficult goals. Some companies are using the situation to fire employees, cut down salaries, and stopping all perks, even if they are in the business of selling chocolates, which is mostly unaffected.

As we look at it, some decisions and communications by the Indian companies raise questions about their prudence at first, but eventually the real picture comes out as very different Let us keep the faith on the board of directors who decide the salaries of the CEOs :)

Indian companies

The American financial sector is in the turmoil. From Bear Sterns to developments with Fannie Mae and Freddie Mac, the crisis unfolded and took companies like AIG and Lehman Brothers in the grip. Coveted institutions which took generations to reach the enviable positions were down in some months. It is all in the newspapers these days. Somewhere somehow someone made mistakes which reached the US to these conditions.

Do you think Tatas did a mistake by deciding to set up the Nano plant in West Bengal? Do you hold the CEO of the bankrupt US finance major Lehman Brothers guilty? Did George W. Bush do a mistake by invading Iraq? Any question, that can be answered in 'yes' or 'no' need not be asked. Bad decisions and mistakes happen; so do frauds. One person's gain may be the whole system's loss.

Every event has far reaching repercussions, both positive and negative. The only thing that matters is ' how you deal with them and how you let the event affect you. This small case is a very important one, because such cases set examples for years to come.

Frauds happen ' deal with them

What does a corporate house do when the managing director of one of its companies commits a fraud? Does it try to put a lid on the affairs or does it make an all out effort to ensure that the stakeholders suffer no losses? When Tata Finance was engulfed in a financial mess, the Tata Group took the latter approach. Before the fraud could be detected by the regulators, it was the Tata Group's self disclosure that opened the matter up.

Rather than sweep the issue under the carpet, Tatas decided on a two-pronged course of action. First, the interests of the small depositors who had placed their trust in the Tata name had to be protected. Second, an open and objective enquiry would be conducted to bring the culprits to book.

Tata Sons and Tata Industries made available to Tata Finance cash and corporate guarantees amounting to Rs 615 crores. Not many industries would have put hundreds of crores into a company that was sinking and that too without being sure that any of it could be recovered.

Despite the promptness with which the Tatas moved, the public perception of the Group and the Tata brand was affected initially. But it was the right thing to do, and the Tatas did what was required to be done.

Ref.: Tata Review

Picture: Precaution is better than cure :)

Indian Companies

Indians know how to play game!

Few Indian companies have the size and the might that can give global firms a shiver. This incident gives a change.

Mahindra & Mahindra is World’s third largest tractor manufacturer. The # 1 is John Deere from the US. John Deere is considered one of the flag bearers of American industrial success.

Mahindras have been selling tractors in the US, have found a niche, but still are small players. But John Deere got so worried about M&M, that it offered a $1,500 rebate to anyone who would trade in his or her Mahindra for a John Deere.

Now what do you think M&M did?

They brought out an ad, showing a pretty blonde riding a Mahindra. “Deere John,” read the caption, “I have found someone new.”

See, we can play it game too! :)

(Kumar Rahul Tiwary)

Picture: Mahindra's tractor

Indian Companies

Few Good Companies

I am sure some of you must have had missed this news. In January this year, Infosys fined its CEO for a technical violation of company's insider trading rules. The fine of Rs 5 lakh would be donated to charity. And this is the third time that Infosys has penalized a member of its top brass!

At a time when we accept corruption as an unavoidable aberration in our government or other Indian organizations, such a move is a window to a better world. Searching for scapegoats is what most organizations do when faced with a fraud. And companies like Infosys are ready to penalize even their CEO for even unintentional violations of rules and corporate ethics.

Bravo!

Read more: ET, Mint, Rediff

Indian Companies

'Second Career' by the Tatas

Last month, the Tata Group launched India's first advertisement campaign to convince women who have taken career breaks to return to the workplace.

"Second Career is an innovative way of making use of this unique talent pool which has been largely ignored by the industry. The women are as good as those we find at MBA campuses. They may be older but they have the same skill sets", says Rajesh Dahiya, VP ' Tata Group. The Tata group wants to increase the percentage of women in its workforce from the current 15-20%. This program is for the women who have taken less than 8 years of career breaks due to personal or family reasons.

� The Tata Group has launched the Tata Second Career Internship Programme (SCIP).

� The projects will be initially offered only in Mumbai, Navi Mumbai and Pune.

� On the very first day of its launch, the portal received 5,500 hits and nearly 500 resumes were posted.

� The company's initial target is to get at least 50 good professional women on board.

Simply, this initiative is a path breaking one. If it succeeds, and we hope given the HR expertise the Tatas have, it stands to breaks a lot of perceptions, and gives a mountain of hope to the women who have to sacrifice their fruitful years of career in order to build their families. Time and again, it is proven that in any given condition: it is one 'act' that changes things. A thousand words by any other company won't even be compared with what the Tata Group has done by its one 'act'.

BTW, some of you may find this statistics interesting:

� 35% (14 Crore) of India's 40 Crore workforce in the organised and unorganised sector are women.

� 37% of Indian women are working at the age of 25.

� 22% of Indian women work by the age of 35. (Many of those who drop out, never return.)

� 98% of Indian working women work in unorganised sector.

This initiative is one which no one will mind to be 'imitated' by all other companies. Let us celebrate it.

Welcome to the Wapas Working Women (WWW)! (Wapas is Hindi for 'Again')

Want to know more? : www.tatasecondcareer.com , Tata Press Release, Mint Article, Business_Standard Article

HCL Technologies:

1.      'Employee first, customer second': Because of its shock value, this initiative invited world wide interest.

2.      'U'and 'I' approach: Employees could directly approach and query President Mr. Vineet Nayar.

3.      Trust Pay: 85% of the salary of employees were made fixed, including bonus, along with a trust in them to deliver results.

4.      360^o feedback: This was made compulsory, and open for all to see. The President of HCL was the first one to put his own form on the intranet for all to review. Others followed suit.

As a result, HCL Technologies saw its attrition rates dropping, employees better engaged in delivering, and deals getting better and multi-functional.

Ref: When corporates change track, J. Mulraj, HT, Mumbai, 18 Oct. 07

Marico Industries

Recently, Mr. Harsha Mariwala, MD, Marico Industries was on our campus to deliver his lecture on 'Marico's Journey". He spoke on his and his company's journey, right from the day of inception to today. Here are some innovative practices that Marico has implemented:

o Only two grades: Company realised that the expectation of being promoted every year makes many a disgruntled managers. So the company made its organisation structure having only two grades, called Managers and Partners. A young MBA joining, for example, would start from the Manager level. This has resulted in curbing the attrition in the company.

o House Concept: Company realised that many of the manufacturing plants were situated in remote places where no adequate facilities were available for employees' engagement. So the company implemented a house concept, where the plant was divided into several houses, and attempt was made to install a sense of belonging among the employees. Through out the year, cultural events and sports are carried out among the houses. This has resulted in less idle time, and hence more balanced life among workers.

o Ex-Employees Association: This association doesn't stop at the get-together functions. The company keeps track of all its ex-managers. And whenever there is a vacancy in the future, first it gives the offer to an ex-employee who is most suitable for the position. Even in the meetings and strategic discussions, it invites its ex-employees. This much of trust on its ex-employees is something that many companies can't believe in.

o Kaya Health Clinics: It has got into this as extension to its products. Now it offers complete wellness solutions. This is a shift from a product driven company to a 'solutions company'.

o Product innovations: (Coconut Oil)

o Plastic bottles, that rats won't be able to cut

o Cap which works in both winter and summer.

o Coconut oil in sachets for the masses