In a global perspective, any organisation which is operating in a multnational environment must take care of the ADDING FRAMEWORK
A- Add volume (if you are going across geographies, you should be able to expand the volume of business
D- Decrease cost
D- Differentiate
I- Improving industry attractiveness
N- Normalise risk
G- Generating and upgrading knowledge
Thursday, October 23, 2008
Tuesday, October 21, 2008
Monday, October 20, 2008
BEP
BEP is a point at which a company sells enough volume to cover the fixed cost
BEP (volume)= Fixed Cost/Contribution=FC/sales-Variable cost
Fixed cost=operating FC
Payback is related to capital investment
BEP (volume)= Fixed Cost/Contribution=FC/sales-Variable cost
Fixed cost=operating FC
Payback is related to capital investment
What is the purpose of strategy?
Stategy helps a business attain competitive advantage.. PERIOD. That is everything that a business does to gain competitive advantage in the market over its competition, in terms of all its components
components of strategy are marketing, cost, value, price, customers, production, manufacturing or any other elements in the value chain like
inbound logistics
operations
outbound logistics
marketing and sales
customer service
components of strategy are marketing, cost, value, price, customers, production, manufacturing or any other elements in the value chain like
inbound logistics
operations
outbound logistics
marketing and sales
customer service
Friday, October 17, 2008
Wednesday, October 15, 2008
Silicon Valley's Success Secrets
Tolerance of Failure (It's a badge of honor)
Tolerance of Treachery (No such thing as loyalty)
Pursuit of Risk (of 20 funded start ups, 4 go bankrupt, 6 lose money, 6 do okay, three do well, one hits the jackpot)
Willingness to re-invest (Cash Flows into the valley)
Enthusiasm for Change ("Obsolete ourselves or the competition will")
Promotion on Merit (Politics counts for little. Performace counts for all)
Obsession with product (Find the "cool" ideA)
Openness to collaboration (Generations last months..borrow and get going)
Variety, Variety, Variety (Mix fleeting with permanent)
Anybody can play (I can be rich)
Mistakes are not the "spice of Life". Mistakes are life
Mistakes are not to be tolerated. They are encouraged
And, the bigger, the better
Tolerance of Treachery (No such thing as loyalty)
Pursuit of Risk (of 20 funded start ups, 4 go bankrupt, 6 lose money, 6 do okay, three do well, one hits the jackpot)
Willingness to re-invest (Cash Flows into the valley)
Enthusiasm for Change ("Obsolete ourselves or the competition will")
Promotion on Merit (Politics counts for little. Performace counts for all)
Obsession with product (Find the "cool" ideA)
Openness to collaboration (Generations last months..borrow and get going)
Variety, Variety, Variety (Mix fleeting with permanent)
Anybody can play (I can be rich)
Mistakes are not the "spice of Life". Mistakes are life
Mistakes are not to be tolerated. They are encouraged
And, the bigger, the better
Tuesday, October 14, 2008
Kotler Speak
In this post, I will lay down everything that I find important from Kotler, the acceptable bible of marketing.
Kotler 1
Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, communicating delivering and sustaining superior customer value.
The first test of sustainability is how easy it is for the competition to be able to replicate your business model.
A transaction is a trade of values between two parties.
A market place is physical, brick and mortar while a market space is digital, this is the market available on the internet. A metamarket is a cluster of complementary products and services that are closely related in the minds of customers but are spread across a diverse set of industries. The automobile metamarket consists of automobile manufacturers , new car and used car dealers, financing companies, insurance companies, mechanics, spare part dealers, service shops, auto magazines and the auto sites on the internet.
How business and marketing are changing?
Changing technology
Globalisation
Deregulation
Privatisation
Customer empowerment
Customization
Heightened competition
Industry convergence
Retail transformation
Disintermediation
Company Orientations
Business Orientations:
The production concept: It assumes that consumers will prefer products that are widely available and inexpensive.
The product concept concept believes that consumers will favour those products that offer the most quality, performance or innovative features. It orients towards the product.
The selling concept postulates that consumers and businesses will not buy the companies’ products/services if left alone. So the organisation must undertake an aggressive selling and promotional effort.
The marketing concept shifts the focus to the customer to a “sense and respond” philosophy. The job is not to find the right customers for your products but the right products for your customers.
Kotler 1
Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, communicating delivering and sustaining superior customer value.
The first test of sustainability is how easy it is for the competition to be able to replicate your business model.
A transaction is a trade of values between two parties.
A market place is physical, brick and mortar while a market space is digital, this is the market available on the internet. A metamarket is a cluster of complementary products and services that are closely related in the minds of customers but are spread across a diverse set of industries. The automobile metamarket consists of automobile manufacturers , new car and used car dealers, financing companies, insurance companies, mechanics, spare part dealers, service shops, auto magazines and the auto sites on the internet.
How business and marketing are changing?
Changing technology
Globalisation
Deregulation
Privatisation
Customer empowerment
Customization
Heightened competition
Industry convergence
Retail transformation
Disintermediation
Company Orientations
Business Orientations:
The production concept: It assumes that consumers will prefer products that are widely available and inexpensive.
The product concept concept believes that consumers will favour those products that offer the most quality, performance or innovative features. It orients towards the product.
The selling concept postulates that consumers and businesses will not buy the companies’ products/services if left alone. So the organisation must undertake an aggressive selling and promotional effort.
The marketing concept shifts the focus to the customer to a “sense and respond” philosophy. The job is not to find the right customers for your products but the right products for your customers.
E-mentors
I will highlight some important things that I could pick from the e-mentors sent by one of our professors here:-
Comscore recently published the growth in Internet audience for Asia Pacific region, with India registering highest growth for the first time. According to the figures, India stands 3rd after China and Japan in the total number of Internet Audience.
A.T Kearney in their report, “Growth Opportunities for Global Retailers” has ranked India at No.1 position consecutively for the second year. The report sees Indian retail Industry to grow exponentially over next few years. The ranking has been done for 30 upcoming global economies. It is based on 4 broad categories namely - Country Risk, Market Attractiveness, Market Saturation and Time pressure for a new entrant to start retail business. India, as per the report, ranks highly on Market saturation and time pressure as compared to China and Russia. The aggregated score for India stands at 92, followed by Russia at 89 and China with 86.
Indian Automotive Sector: At present there are 15 manufacturers of passenger cars, 9 manufacturers of commercial vehicles, 14 of 2/3 wheelers and 14 of tractors besides 5 manufacturers of engines. The industry has an investment of more than Rs.50, 000 crore in 2002-03 which is slated to go up to Rs. 80,000 crore by this year end. The Indian automotive industry has already attained a turnover of Rs.1, 65,000 crore ($34 billion USD). The contribution of the automotive industry to GDP has risen from 2.77% in 1992- 93 to 5% in 2005-06. The auto companies have a manufacturing capacity of over 95 vehicles per annum.
Here is the Vision statement for Indian Automotive sector by Indian government
To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016
Reforms India needs to implement to achieve its 2050 vision:
o Improve governance
o Raise educational achievement
o Increase quality and quantity of universities
o Control inflation
o Introduce a credible fiscal policy
o Liberalize financial markets
o Increase trade with neighbours
o Increase agricultural productivity
o Improve infrastructure
o Improve Environmental Quality
10 facts about Indian middle class
1. An average family of 4.3 people lives typically in a 900sf apartment; 71% own properties, but only 9% have a mortgage
2. 19% own cars, 100% of households have TVs, 91% have mobile phones and 20% have credit cards
3. Household savings are low at 13% of annual income; mainly to meet emergency needs, healthcare and education costs.
4. Risk aversion is high: 84% have not taken loans, only 11% have invested in equities (this is changing fast)
5. Land and properties account for 51% of wealth, with 30% in cash and deposits
6. Half of households have seen their income rise in the past 12 months, of which one-third saw income rise more than 20%
7. 63% of respondents expect their income to increase in the next 12 months
8. Slightly more than half say governance has worsened in the past 10 years; improving the economy and reducing corruption are seen as top priorities for the government.
9. Children’s future and education a key concern and priority; other major concerns are rising prices and medical costs
10. Very high aspirations for children with 43% wanting their kids to get a master’s degree and 29% a doctorate
Indian Television Industry
The Indian entertainment Industry is bubbling. With broadband making in-roads in Indian homes, the line between a Television Set and home computer is decreasing. With launching of various Indian channels on You tube and Hindi movies getting released purely on the internet, we are taking a leap forward in every way possible. And we have not yet even seen the power of IPTV.
• First and foremost is, The Reliance – Anil Dhirubhai Ambani group (ADAG), who are widening its foray into media and entertainment sector with announcement of more than a dozen channels in Entertainment and Non-Entertainment space.
• UTV Software Communications is planning to launch a news channel soon, having launched a youth channel last month. It has plans to launch multiple channels in different languages
• INX Media will launch 12 channels in entertainment and news
• TV18 and Viacom’s joint venture Viacom18 will roll out a Hindi entertainment channel in addition to several niche channels
• BAG Films & Media is planning entertainment and lifestyle channels NDTV has announced a few non-news channels
Dairy major Amul, Life Insurance Corporation of India and mobile manufacturer Nokia have emerged as India’s top three brands according to Asia’s Top 1000 Brands, a survey conducted by Media, an advertising and marketing publication. Nokia, the global mobile handset maker as also been judged as the leading brand across Asia.
Reebok announced sometime back that they are setting up the largest retail store of Reebok Worldwide in Hyderabad, India. Taking retail to new heights, Reebok’s new store offers the finest shopping ambience to customers with products displayed by categories such as ‘Running’, ‘Walking’, ‘Aerobics’, ‘Tennis’, ‘Cricket’ and ‘Lifestyle’, to help customers make better purchase decisions. Built across 2 floors with individual customized sections for fitness, sports, lifestyle etc, the store offers a world class shopping experience. It’s the only single brand store with an escalator built inside the store with two floor high glass wall carrying footwear, built in a circular fashion around it. So it’s literally a ride through a maze of footwear, giving you a complete sense of the brand coupled with an over whelming sense of stylized shopping and delight of choice. With the focus on service and exceptional ambience paramount to Reebok’s objective to providing an experiential shopping experience, the newly opened Reebok store promises to offer a larger-than-life feel to the customers.
Comscore recently published the growth in Internet audience for Asia Pacific region, with India registering highest growth for the first time. According to the figures, India stands 3rd after China and Japan in the total number of Internet Audience.
A.T Kearney in their report, “Growth Opportunities for Global Retailers” has ranked India at No.1 position consecutively for the second year. The report sees Indian retail Industry to grow exponentially over next few years. The ranking has been done for 30 upcoming global economies. It is based on 4 broad categories namely - Country Risk, Market Attractiveness, Market Saturation and Time pressure for a new entrant to start retail business. India, as per the report, ranks highly on Market saturation and time pressure as compared to China and Russia. The aggregated score for India stands at 92, followed by Russia at 89 and China with 86.
Indian Automotive Sector: At present there are 15 manufacturers of passenger cars, 9 manufacturers of commercial vehicles, 14 of 2/3 wheelers and 14 of tractors besides 5 manufacturers of engines. The industry has an investment of more than Rs.50, 000 crore in 2002-03 which is slated to go up to Rs. 80,000 crore by this year end. The Indian automotive industry has already attained a turnover of Rs.1, 65,000 crore ($34 billion USD). The contribution of the automotive industry to GDP has risen from 2.77% in 1992- 93 to 5% in 2005-06. The auto companies have a manufacturing capacity of over 95 vehicles per annum.
Here is the Vision statement for Indian Automotive sector by Indian government
To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016
Reforms India needs to implement to achieve its 2050 vision:
o Improve governance
o Raise educational achievement
o Increase quality and quantity of universities
o Control inflation
o Introduce a credible fiscal policy
o Liberalize financial markets
o Increase trade with neighbours
o Increase agricultural productivity
o Improve infrastructure
o Improve Environmental Quality
10 facts about Indian middle class
1. An average family of 4.3 people lives typically in a 900sf apartment; 71% own properties, but only 9% have a mortgage
2. 19% own cars, 100% of households have TVs, 91% have mobile phones and 20% have credit cards
3. Household savings are low at 13% of annual income; mainly to meet emergency needs, healthcare and education costs.
4. Risk aversion is high: 84% have not taken loans, only 11% have invested in equities (this is changing fast)
5. Land and properties account for 51% of wealth, with 30% in cash and deposits
6. Half of households have seen their income rise in the past 12 months, of which one-third saw income rise more than 20%
7. 63% of respondents expect their income to increase in the next 12 months
8. Slightly more than half say governance has worsened in the past 10 years; improving the economy and reducing corruption are seen as top priorities for the government.
9. Children’s future and education a key concern and priority; other major concerns are rising prices and medical costs
10. Very high aspirations for children with 43% wanting their kids to get a master’s degree and 29% a doctorate
Indian Television Industry
The Indian entertainment Industry is bubbling. With broadband making in-roads in Indian homes, the line between a Television Set and home computer is decreasing. With launching of various Indian channels on You tube and Hindi movies getting released purely on the internet, we are taking a leap forward in every way possible. And we have not yet even seen the power of IPTV.
• First and foremost is, The Reliance – Anil Dhirubhai Ambani group (ADAG), who are widening its foray into media and entertainment sector with announcement of more than a dozen channels in Entertainment and Non-Entertainment space.
• UTV Software Communications is planning to launch a news channel soon, having launched a youth channel last month. It has plans to launch multiple channels in different languages
• INX Media will launch 12 channels in entertainment and news
• TV18 and Viacom’s joint venture Viacom18 will roll out a Hindi entertainment channel in addition to several niche channels
• BAG Films & Media is planning entertainment and lifestyle channels NDTV has announced a few non-news channels
Dairy major Amul, Life Insurance Corporation of India and mobile manufacturer Nokia have emerged as India’s top three brands according to Asia’s Top 1000 Brands, a survey conducted by Media, an advertising and marketing publication. Nokia, the global mobile handset maker as also been judged as the leading brand across Asia.
Reebok announced sometime back that they are setting up the largest retail store of Reebok Worldwide in Hyderabad, India. Taking retail to new heights, Reebok’s new store offers the finest shopping ambience to customers with products displayed by categories such as ‘Running’, ‘Walking’, ‘Aerobics’, ‘Tennis’, ‘Cricket’ and ‘Lifestyle’, to help customers make better purchase decisions. Built across 2 floors with individual customized sections for fitness, sports, lifestyle etc, the store offers a world class shopping experience. It’s the only single brand store with an escalator built inside the store with two floor high glass wall carrying footwear, built in a circular fashion around it. So it’s literally a ride through a maze of footwear, giving you a complete sense of the brand coupled with an over whelming sense of stylized shopping and delight of choice. With the focus on service and exceptional ambience paramount to Reebok’s objective to providing an experiential shopping experience, the newly opened Reebok store promises to offer a larger-than-life feel to the customers.
Monday, October 13, 2008
Sunday, October 12, 2008
Cash Flow from Operations
Arguably a better measure than earnings because a company may be profitable and still not being able to pay its earnings.
Blue Ocean Strategy
I have no read this book completely so far but this is an excellent insight into why you we should not take competition as the benchmark and create something altogether new which pushes the competition far from you....
BCG
Growth share matrix, excellent framework to understand which products to focus on and which one to eliminate, this is the dog, they are eating out on the cash flows...just click on the link..
business cases
1. profit improvement
Profit= Revenue-Costs
The company would like to understand why the profits have declined. The understanding of concepts is critical.
The above formula could be broken:
Profits=Revenue-Costs=(price-variable cost)*quantity)-FC
Break even point:
Total contribution= Total cost
Factors affecting price:
Market Power
Price elasticity
Product Differentiation
Brand Implications*
*Indicative list
Factors that affect volume:
Competition
Substitutes/complements
Distribution channels
Logistics
Growth Strategies:
Please refer to Ansoff's matrix
Industry Analysis
Tool: Porter's Five forces Analysis
other metrics could be:
oligopoly/monopoly/monopolistic competition/imperfect competition/what?
Trends
Market Entry
Understand the size of the market
Understand the competition
Analyze customers' needs
Identify gaps in need fulfillment
Assess the company's strengths
Evaluate barriers to entry
Evaluate methods to entry (Build/acquire, partner)
Analyse past entry successes/failures
Capacity Expansion
Estimate:
Potential benefit of expansion
Means to capacity expansion
Acquisition
is 1+1=3?
Rationale for acquisition
Likely competition response
Investment
Understand the business
Do an NPV analysis
Profit= Revenue-Costs
The company would like to understand why the profits have declined. The understanding of concepts is critical.
The above formula could be broken:
Profits=Revenue-Costs=(price-variable cost)*quantity)-FC
Break even point:
Total contribution= Total cost
Factors affecting price:
Market Power
Price elasticity
Product Differentiation
Brand Implications*
*Indicative list
Factors that affect volume:
Competition
Substitutes/complements
Distribution channels
Logistics
Growth Strategies:
Please refer to Ansoff's matrix
Industry Analysis
Tool: Porter's Five forces Analysis
other metrics could be:
oligopoly/monopoly/monopolistic competition/imperfect competition/what?
Trends
Market Entry
Understand the size of the market
Understand the competition
Analyze customers' needs
Identify gaps in need fulfillment
Assess the company's strengths
Evaluate barriers to entry
Evaluate methods to entry (Build/acquire, partner)
Analyse past entry successes/failures
Capacity Expansion
Estimate:
Potential benefit of expansion
Means to capacity expansion
Acquisition
is 1+1=3?
Rationale for acquisition
Likely competition response
Investment
Understand the business
Do an NPV analysis
creativity and innovation
Just mentioning a few things I learnt from the creativity and innovation sessions.
The key technique learnt was first diverge and then converge. We took the example of "how to solve the traffic problem on Indian roads?" and the idea is to write anything within a time frame during divergence. This will result in scores of ideas.
The next step is to converge by grouping the ideas into different groups and selecting what will be reaosonable and feasible to implement.
sir recommended a few books:
Cracking creativity- Michael Michalko
Use both sides of your brain
The key technique learnt was first diverge and then converge. We took the example of "how to solve the traffic problem on Indian roads?" and the idea is to write anything within a time frame during divergence. This will result in scores of ideas.
The next step is to converge by grouping the ideas into different groups and selecting what will be reaosonable and feasible to implement.
sir recommended a few books:
Cracking creativity- Michael Michalko
Use both sides of your brain
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