Spillages of the financial crisis that began in August 2007 are ready to take the world for a toss

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Drowning glory!

However, a relaxation in monetary policy in Brazil & Mexico has further catapulted its economic growth. Thanks to the favourable external climate, low long-term interest rates et al, the economy of other developing economies including Brazil and Mexico are projected to accelerate or stabilise at a higher rate. According to a World Bank report, “Double Jeopardy: Responding to High Food and Fuel Prices”; the volatility of prices has the potential to aggravate inflationary pressures and constrain fiscal expenditures for the vulnerable group. Nevertheless, tightening of the monetary policy by central banks is indicative of the re-equilibrating process.

As far as policies are concerned, the majority of the emerging and developing countries have maintained disciplined macroeconomic policies in the recent past; it is on the basis of such policies that they have been able to post strengthened balance sheets and have also reduced the external vulnerabilities to large extent. Yet, these economies must curb their government spending (which has increased due to heightened tax revenues); else the large current account deficit could further ruin them. It is true that the growth spillovers of the advanced economies to emerging and developing economies have reduced but nonetheless are sizeable (35% for emerging economies & 45% for commodity reliant developing economies). As a matter of fact, it needs to be understood that during slowdown of advanced economies, the spillover is mild but during recession, the spillover is more severe. Thanks to internal growth dynamics, rising share of global economy, resilient policy frameworks et al, better days are ahead for the emerging and developing economies. But they should keep in mind what the World Economic Outlook has to say, “Spillovers have not been eliminated.”


Gyanendra Kashyap

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).


Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

ZEE BUSINESS BEST B SCHOOL SURVEY
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...

Buyout Bus(c)h? and it could use its global reach to expand the Busch portfolio.”

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

August Busch should give it time...

Should August Busch IV, CEO, Anheuser-Busch (AB), accept the “fair-value” $65/share takeover offer from InBev? Well, let’s go by numbers and statistics here – AB is worth $43.98 billion on the NYSE today and commands 48.8% of the total beer market in US. In the opposition camp is InBev, which is offering a seemingly ‘fair’ $46.3 billion to its shareholders – a paltry premium of 5.3%! On July 6, 2008, AB has given an answer of sorts, by filing a case in a Delaware court against InBev on the grounds of the latter having made an illegal bid.

So should you, as the CEO, sell off your company, which controls nearly half of US beer market?! Yes and no! Surprised you must be, but what we mean is that AB should wait for some weeks till the offer price shoots northwards and the premium level is in the vicinity of 40%. [As per the June 2007 King’s College London (KCL) Report ‘Varieties of Capitalism, M&As’, the average premium given to US firms during domestic takeover has ranged between 40.8-56.6% between 1991-2006!] Agrees, Malcom Polley, President, Stewart Capital Advisors, “It could even rise up to $75/share;” that means a premium of 30.5% – considerable indeed!

The combined entity would have revenues of $36.4 billion and produce a total of 460 million hectoliters of beer annually. Carlos Brito, CEO, InBev comments, “We would draw on the collective expertise of both companies’ management and employees. We will create a stronger, more competitive, sustainable global company, which will benefit all stakeholders.” But his counterpart at AB terms these synergies as just, “profit enhancements”! Even Ann Gilpin, Analyst, Morningstar says, “InBev is run by machete-wielding investment bankers, who would love to get their hands on low-hanging fruit at AB.” But all’s not bad as B. Craig Hutson, CFA, Gimme Credit LLC asserts, “InBev has a presence in many more overseas markets than Busch, and it could use its global reach to expand the Busch portfolio.”

Chances of InBev don’t look bright as the KCL study proves that “the overall success rate of hostile bids is just 30.7%.” However, it’s all upto the AB shareholders now as even August Busch’s minor shareholding of 4.5% in AB won’t affect their decision. Surely, they have got to behave in a sober fashion now.



Sreoshi Ghosh


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).


Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

ZEE BUSINESS BEST B SCHOOL SURVEY
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists

The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...

And B&E’s Karan Mehrishi analyses why...

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

The Americans are insane!

AMD lost money dispite of being an intellectually driven company operating in a progressive environment. The world’s second largest semiconductor player lost close to $3.3 billion in 2007. Generally, analysts contend that AMD’s loss per share will be in the vicinity of $0.5–0.8, on revenue this quarter. The 15% fall in revenue has resulted in the lay offs involving over 1,500 workers by a company, which has a history of employee retention in even adverse conditions. AMD controls 23–24% of the semiconductor market, and was banking on the latest generation ‘Barcelona series’, which has been delayed for launch. With the worldwide semiconductor sales will not slated to grow more than 5–6% through the next two years, growth would be a major issue.

While the $7.7 billion losses reported by Merrill Lynch are basically due to the US housing slump and the mortgage crises, even Freddie Mac, which reported over $3 billion in losses, suffered due to similar reasons. According to their official press release, quoting Richard F. Syron, Chairman and CEO, Freddie Mac: “Without doubt, 2007 has been an extremely difficult year for the country’s housing and credit markets; and... we have been impacted by the deterioration in these markets.” Analysts ague that bad debts could have been a major issue here, as according to some reports, individual defaulters have increased. Explaining his company’s position, Buddy Piszel, CFO, said, “You can see the impact of these trends in our credit results and throughout our financial statements. Year to date, we have recognised $4.6 billion in net credit related items on a pre–tax basis.” Clearly, American companies have worse to come round the corner, what with the economic recession gathering speed faster than George Bush leaving office. Well, they can count on at least one person, me. Same time, same day, next year, as the California Governor so succintly says, and I quote, “I’ll be back!”

all about the ‘thingamajigs’ that india inc. used!

Thingamajigs! It must have been these that India Inc. used to succeed like they awesomely did. Because the fact is that in today’s growth era of India, it’s extremely hard to end up in losses. Digest this, Reliance Industries ended FY08 with a gut wrenching profit of Rs.194.58 billion! Public sector banks like State Bank of India got in Rs. 67.29 billion. Bharti Airtel smashed in the profit list at Rs. 62.44 billion. And these are the top three, what about the rest. Almost 96% of BSE listed companies ended the year in profit. Even the country’s top two IT companies, TCS and Infosys, though suffering the largest market cap erosions in BSE, managed a superb show to register profits of Rs.45.08 and Rs.44.7 billion, coming in at number 4 and 5 on our profit list. However, overall, considering 1,454 companies’ results published till May 10, profit after tax of India Inc. has gone up a smashing 25% from Rs.1,035.8 billion in FY07 to Rs.1,380 billion in FY08. What did they do that wasn’t done by our misfortune listed companies? That one’s easy. They must have used thingamajigs... Oh, the word means “concepts that’re too hard to understand.” :–)


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).


Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

ZEE BUSINESS BEST B SCHOOL SURVEY
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists

The Hindu : Education Plus : Honour for IIPM

IIPM ranked No.1 B-School in India, Management News - By ...

IIPM Ranked No1 B-School in India

Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...

IIPM ranked No. 1 B-school in India- Zee Business Survey ...

» IIPM ranked No1 B-School in India :: Education, Careers ...

The Hindu Business Line : IIPM placements hit a high of over 2000 jobs

Deccan Herald - IIPM ranked as top B-School in India

India eNews - IIPM Ranked No1 B-School in India

IIPM Delhi - Indian Institute of Planning and Management New Delhi ...

domain-b.com : IIPM ranked ahead of IIMs

IIPM makes business education truly global-Education-The Times of ...

“Being in all emerging as well as developed markets gives a lot of exposure to us and also the experience to roll out separate kinds of products to ca

IIPM Ranked No. 1 B-School In Global Exposre - Zee...

been there, faced that

It’s global acquisition spree may have transformed Vodafone from a small UK-focused service provider into a global telecom giant with interests in over 40 countries, but has also hurt it where it pinches most – its profits, which have seen a steady decline over the past few years. During his tenure as CEO (1997-2003), the rumbustious Sir Christopher Gent paved the way for a series of overseas acquisitions, beginning with US-based AirTouch in 1999. He followed this up with a £101 billion hostile takeover bid for German firm Mannesmann, subsequently using Vodafone’s highly-rated shares to snap up more rivals in Europe and beyond. These dealt a severe blow to Vodafone’s bottomlines, resulting in staggering losses in 2006-07, totalling approximately $9 billion. And while the company has recovered from the blow this year (registering $6.6 billion as profits for 2007-08), the pressures on current CEO Arun Sarin remain just as daunting. On his part, Sarin too, has been experimenting with Gent-like aggressiveness in acquisitions. He made a $13.3 billion ambitious bid and lapped up 67% stake of Hutchison Whampoa in India’s Hutchison-Essar combine, besides a previous failed bid to pick up America’s largest wireless operator AT&T. Presently, he is fighting it out with India’s Bharti Airtel to pick up majority stake in South Africa’s MTN. However, despite blitzkrieg expansions in non-European markets over the last many years, Vodafone has been struggling to get desired results from these markets. While the company pulled off more than $28 billion in revenues from the European market alone for the six months ended September 2007, it hardly managed $5 billion as revenues from emerging markets like Middle East, Africa and Asia Pacific. Vodafone’s exit from Japan in April 2006 was also due to a similar situation. So what is the logic behind Vodafone’s aggressive expansion? According to a company spokesperson, “Being in all emerging as well as developed markets gives a lot of exposure to us and also the experience to roll out separate kinds of products to cater all these markets. In UK, for example there are more phones than people so there are many things one can offer in terms of data… whereas in India, tele-density is far too less compared to UK so the thrust is to add more and more customers.”


from bust to boom

In terms of VAS, analysts are not normally positive of India-based services across borders. They feel that these services are typically successful mostly with the Indian diaspora, like Bollywood ring back tones. Otherwise there is not much they can give on the technology front. Nevertheless, Bharti Telesoft has been one company keen on making its mark in the VAS space pan India as well as globally. It was a dotcom bust baby born in 2001 after seeing a disaster written all over it in its initial years, when it decided to focus exclusively on the Value Added Services (VAS) space. Since then they have moved from strength to strength and even made a mark overseas. One of the most interesting value additions that they offered to their customers has been revenue sharing rather than a straight up fee; which would have made gaining an entry quite difficult into a new market. Bharti Telesoft, after establishing a strong presence among telecom operators in the high growth markets of SAARC, Asia Pacific, Middle-East, Africa and Europe is now eyeing aggressively to foray into newer markets like Latin America, where there is a great potential for m-banking and increase services offerings in existing markets like South Asia and Middle East. As Ambar Sur, Chief Marketing Officer, Bharti Telesoft divulges “We aim to capitalise our presence in the global market by continuing to enhance our current portfolio and develop innovative offerings.” The evidence of this stands true with their presence in the top 3 global providers of integrated VAS solutions, with over 100 mobile operator customers in more than 60 countries worldwide. Among other tactical moves, they have acquired Jataayu Software, rolled out a mobile banking service with Barclay’s India called ‘Hello Money’ and even entered into an alliance with AFS. The company fully understands the benefits of going global even though operating in India is highly competitive as the VAS business requires high degree of agility. Also, the R & D innovation cycle is far less (2-3 years) vis-à-vis telecom equipment manufacturers. But the major challenge lies elsewhere, as Ambar admits, “Challenges faced by VAS industry are not technology or infrastructure-led, but the lifestyle appeal and the demand made by consumers.”

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).


Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

ZEE BUSINESS BEST B SCHOOL SURVEY
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists

The Hindu : Education Plus : Honour for IIPM

IIPM ranked No.1 B-School in India, Management News - By ...

IIPM Ranked No1 B-School in India

Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...

IIPM ranked No. 1 B-school in India- Zee Business Survey ...

» IIPM ranked No1 B-School in India :: Education, Careers ...

The Hindu Business Line : IIPM placements hit a high of over 2000 jobs

Deccan Herald - IIPM ranked as top B-School in India

India eNews - IIPM Ranked No1 B-School in India

IIPM Delhi - Indian Institute of Planning and Management New Delhi ...

domain-b.com : IIPM ranked ahead of IIMs

IIPM makes business education truly global-Education-The Times of ...