Root cause of Bloomberg

“Bloomberg by Bloomberg” is an autobiography of a visionary leader Michael R. Bloomberg who is a Businessman, Politician and Philanthropist. Dismissed from Salomon Brothers in 1981 as a general partner, Mike immediately took his money and started Bloomberg L.P.

In the era of globalization, almost all the MNCs are following the grand strategy “Mergers and Acquisitions” to compete heavily in the competitive environment and taking this as a strand to go globally. But, Mike believes in organic growth rather than inorganic growth. His operating principle has always been “build, don’t buy”. The reason why he shows interest in green field project is that “If companies go in for M&A, probably they will take over a weak organization which might have strategically failed somewhere. It would take enough time to identify the problem and solve it. It’s a waste of time and money.”

So he avoided going for M&A and followed Porter’s generic strategies like differentiation and focus strategies. As I believe, the life blood of his organization is innovation. He has come up with different services like Bloomberg L.P., Bloomberg Magazine, Bloomberg Business News, Bloomberg Information Television, and Bloomberg Terminal only through his constant innovation and differentiated his services from his competitors.

The core idea of his organization is to deliver information to their target customers through as many mediums (Magazines, Newspapers, Internet, Television, and Radio) as possible and focused on even smaller group of target audiences who are not served by his competitors. The development of his service through a very old medium “Radio” depicts his focus strategy. All these great peaks were attainable only through the adoption of organic growth method. Culture of the organization will also predict its success. He could be able to maintain only if he built his new ventures rather than buying it.

Because of avoiding inorganic growth, it took time for his entry into some countries where governmental and industrial regulations disallow foreigners to serve their local customers with information. They didn’t even take the partners to enter in such countries and took pains to satisfy the officials and finally entered there. One such country is Japan where he took nearly two years to start his venture. I think, Bloomberg has gone in for concentric diversification and didn’t make use of other opportunities that are prevailing in the market.

I feel that one reason why he was not able to be a conglomerate is may be because of his avoidance of buying. Building all the ventures is not possible when organizations don’t go in for partnership or M&As and their growth potential is found to be riskier.

Internet is Fun @ Vodafone – Is it so?

This IPL season 5 has given the opportunity to the advertising agencies to come up with new and attractive visuals for its clients to attract consumers. One of the famous advertising agency is Ogilvy & Mather, which came up with the ad for Vodafone. The Vodafone ads are usually full of innovation and creativity in delivering the message, but this time it was not up to the expectation.

Here is the commercial:

A comparative Table:

 

These advertisements resembles Takeshi’s Castle program in Pogo channel,  with a view to depict   two teams on the ground  playing, while comments are given by the commentator. It ends with a statement “Internet is Fun on Vodafone”. This advertisement is confusing and the connection to the brand is not 

convincing.

The uniqueness of Vodafone was the Zoo Zoo ad which created interest to watch and gave credibility, with a differentiating factor and competitive advantage. But now, is it true that they have not met this benchmark?

What was missing?

•    The background visualising was very old like watching black and white ad.
•   The target audience expectation was not fulfilled; rather it made them bored.
•    The concept was good but the portrayed style is not suiting the IPL season.
•    The character used in the ad was anonymous and no way connected.

The IPL season  target audience is mostly people under the age of 35 years. They cross their fingers after every over and they eagerly wait for the next over. At the time watching these ads, may irritate them.

So people, what’s your view about this ad? Do you agree with my views?

Fast Fashion

Elle has recently entered into the Indian Market with its “Fast Fashion” range by signing up a licensing agreement with Arvind Lifestyle brand. Fast fashion is a term used to denote the speed with which designs move from catwalk to store to capture current trends in the market at affordable prices. The retailers will change the design of clothing and accessories at least once or twice in a week to call for repeat purchase.

This Fast Fashion concept is widely accepted in western nations. In India, this model is at nascent stage. Zara, Spanish clothing and accessories retailer, is working out with this model and able to see some footfall. But RPG-promoted Spencer Group, which in 2010 had introduced its fast fashion range, has wound up the business. They feel that “There were pricing issues and the products were not suited for the Indian markets.” Apart from these reasons, retailers feel that there are huge opportunities behind this.

Though the retailers think this way, I just want to share some insights on this based on my study.

Interesting insights are:

• Unlike western countries, Indian market is more feminine (consumers will purchase in small quantities and avoid repeat purchase). Western demand is masculine. (consumers love purchasing and at the same time they purchase more) 
• Purchase is mostly seasonal in India. It means they buy on occasions like festivals and functions. 
• Though western nations don’t have enough festivals like India, they will arrange for frequent meetings, parties, get together and others. So, they need to show off themselves. This will promote the market for “Fast fashion” and this is not possible in India. 
• Western consumers are independent. They used to start earning at the age of 17. They are free to spend for their need because of their high individual disposable income. Indian culture is not so and at the same time disposable income is calculated by considering family as a unit in India. This will not encourage frequent purchase. 
• Indians use both traditional and western clothes. In particular, the western cloth purchase will be only about 30% of their total purchase. Within this, the growth for fast fashion range will be very low. 
• There will also be some cultural influence in Indian purchases. 
• India is a place, where people will use their belongings for more than their average life time. 

Because of these reasons, most of my respondents feel that “Fast Fashion” range will take enough time (at least one or two decades) to build its market in India.

Do you agree?

An online experience to share…!

Once I searched through many online sites for purchasing a speaker and audio system for home, I understood thatmost of the sites in this space could provide a wide variety of such electronic items. Though I could test the quality of such speaker systems in the retail shop, I went online to get better discount offers and to reduce search time. Flipkart, Infibeam and Junglee.com gave different assortment of such products and also the offers were very attractive. 

Among these three sites, numerous varieties of products are available in Junglee.com. My next choice wasFlipkart. Though Junglee.com has wide varieties, I felt the user interface is not good when compared to Flipkart. In Junglee, after choosing a product the options for the selection of brand, sorting by price range are not available. I was supposed to search my brand through the listed products by flipping over the pages. In that way, Flipkart and Infibeam is good. As soon as I choose the product, all the information like available brands, price range, search through colours are thrown infront of me.

One thing that disturbed me is quality. How to check it? For that I was able to find a partial solution in the form of reviews and ratings given by the users. In particular,Flipkart reviews gave me the trust to go for online purchase, because the customers have given negative reviews. So I thought the quality factor can be well satisfied through reviews and ratings. Even most of my friends who purchased online believe in this.

Another attractive factor why I chose online is the convenient payment and delivery system. I felt cash on delivery mode of payment is comfortable to check the items and then pay, which is widely available in most of the sites. Cash on delivery is the one through which marketers gain the confidence of customers. Incase of delivery, the experience provided by Flipkart is exteremely good. Most of the persons whom I asked, know about the delivery system have shared that Flipkart deliver the product through Blue Dart, a fastest and secure delivery network. As soon as the payment is made, Flipkart is updating about the assumed delivery date, delivery number and with the help of this number of Blue Dart we are provided with the option of tracking the product continuously. Even after the delivery, we are loaded with information like who received our product, when and where they received. To my surprise, if no one is available to receive the product at the given address, we will be contacted through our phones and informed about the delivery. I feel such an efficient delivery and tracking system of Flipkart is their main reason for success. I didn’t get this level of confidence from Junglee, Infibeam or any other sites. Even Flipkart is not charging for shipping the products through such a valuable delivery network. 

How was your experience of purchasing online? Do share your thoughts…..

Is it time to say good bye to the brand Satyam?

Recently, I read an article about merger of Satyam and Tech Mahindra into single entity in Economic Times (http://articles.economictimes.indiatimes.com/2012-03-30/news/31260991_1_tech-mahindra-mahindra-satyam-sanjay-kalra-vineet-nayyar).         I am not going to talk about whether the merger is right or wrong. I am going to discuss, whether the name Satyam can be retained or not. Many discussions are going in the board room of Tech Mahindra and Mahindra Satyam; I hope this issue will be one among them.

If they would not bring a new brand name for this merger, then it would be an incomplete exercise, as both are having different segments of customers. I believe the brand name Satyam is too elusive. I think they should come with a fresh brand name along with the brand Mahindra.

Let me give you a quick glimpse about the Tech Mahindra, Mahindra Satyam and their acquisition.

Tech Mahindra was formally known as Mahindra British Telecom, joint venture between Mahindra & Mahindra and British Telecom. In 1986, they rebranded into Tech Mahindra. They provide services to the telecom sector.

Mahindra Satyam was formally known as Satyam Computer services, founded in the year 1986 in Hyderabad by Ramalinga Raju. They are well known for enterprise services.

Tech Mahindra had acquired Satyam Computer services in 2009 after the scam and rebranded into Mahindra Satyam. The current rebranding exercise is the second time for both the brands.

The word Satyam means Truth; there is no point in telling Satyam again after the scam. Even though it is a globally known brand, it should be avoided.

The total revenue of Satyam in 2008 was Rs.8, 473.49 crores, but in 2011 it was Rs.5, 145 crores. This shows, brand Satyam didn’t help to fetch revenue and attract more customers after 2009. Even in future, it won’t help. Mahindra has great credibility than Satyam to attract customers across the world.

 It is not like biscuit or soap; this is purely B2B business, and they can easily create awareness and can do good business if they would come with a new brand name.

This case is not like the iGATE acquisition of Patni, and named as iGATE PATNI. There is no point in comparing this branding exercise with IGATE PATNI.

If Mahindra will stick with the brand Satyam in future, the investors and customers will never forget the scam.  Even no employee would like to work in a company which involved in scam; they might feel dishonoured to say “I am an employee of Satyam”. If customers, employees and investors want to forget the scam, Mahindra should first forget the brand Satyam.

Even I feel that Mahindra Satyam was not a right choice of brand name to get back the interest of investors and customers when they acquired. Since Mahindra is doing different business, it will dilute the credibility of Mahindra. I think this is a chance for Mahindra to forget Satyam and come with a new brand to maintain their credibility.

BRITANNICA TO KILL PRINT EDITION

Hi people……. Today I have a topic to be discussed which is all about the Britannica. 

To give an overview about Britannica: it has been present for 244 years in the realm of printed edition of Encyclopaedia with 32 thick volumes and also it has presence in the digital media. Now Britannica has announced that it will discontinue its printed edition and turn into a complete online service. http://www.britannica.com/ 

I have serious doubt why this company is not able to maintain its presence in both print and digital media?

 

Let’s not discuss this in terms of monetary and sales volume of the product. 

The uniqueness of Britannica would be its print edition because it comes with 32 volume gold scattered with the leather binding which gives the pride to the shelves placed in any library and that would be its major differentiating factor from its competitor Wikipedia. But now it is trying to breakdown the heritage of the brand. Is this decision because of: 

The Re-Positioning of the company, or 

The changing trend of modern Internet, or 

To compete with the competitor Wikipedia 

Or any more reasons to list… 

These would only be blind reasons because once it kills the print edition, it will be turned or perceived as one of the online encyclopaedia but it will not be seen as the brand Britannica, this is because the differentiating factor will be killed and their standards may be fail. Turning to online is conditioning people to a particular category and the Britannica lovers cannot find solace as what they would have felt in print. 

I guess the company’s point of view towards the question would be concentration on the particular segment would give them the fresh look in the industry, because due to the change in proliferation of customer access through online and being a 244 years organization it wants more appeal towards the brand. But I don’t find this as a good strategy for Britannica. 

So, how you see this decision of Britannica?

Silicon Valley Road

Silicon Valley Road by Tom Maher is a wonderful book on the experience of the author. He has briefly described his life at Silicon Valley from a supervisor to Vice President of several companies. He has beautifully portrayed the importance of his childhood learning at an Iowa farm, which helped him to manage several problems created by union workers in companies. In his book, he underlines the need for teams inside the organisations for efficient management. Even his talent in laying bricks helped him to resolve the problems among employees.

He states that, “An embarrassment they (workers) would play on us while we walked by would be on the ladder trick. One person would be on the ladder by himself and would very politely ask for our help to hold the ladder for his safety. As soon as we would touch the ladder, he would jump down and write up a “grievance” and give it to us for doing union work.” He handled such instances by kicking the ladder and say “It’s stable enough, so get to work.” This is how he beautifully handled the union fun through his experiences from his work at union when he was a school boy.        

                               

While he was working in Caltex, he came across a different person named Perry Wallia. His employer told him that Perry was going to be fired but Tom should take him and may be find a job for him. So, Tom placed him as Quality Assurance manager. He was ok for four months and later all the employees complained about him. Then, he removed Perry and Perry just sat in his office. Once wafer fabrication director called for a process engineer’s help to solve a trouble in game board chip. Since, Perry was without any job Tom had asked him to do that. He solved that problem very easily. Only after this incident Tom understood that Perry was good at engineering rather than Quality assurance. So he made his job full time for solving complex and old problems. Later on he kept solving all the problems and made an impact on the organisation. This is where Tom felt that companies should not quickly lay off the underperforming employees, because each and every person will have different talents. An organisation must understand the employee talents and place them in a proper area where they can excel and make use of them.

Adding to this, he stated that poor performance is not the workers’ fault, because people are same all over the world. Only organisations should direct, train and monitor the employees towards the goal of the organisation.

Tom Maher says, “Most of the calculator companies deposited their payment in our bank or sometimes in another bank. One customer made a deposit outside the bank with a cashiers check and was able to cancel the check after the parts were delivered and before we could get the money.” He over came such problems by stating that “Customer must bring cash upfront before we would deliver any parts.” In such situations, he worked strategically by getting the insights from the customers wrong doings.   

Tom Maher took pains to remodify the damaged and unused products, because huge cost is levied on it. And also, he focused on the immediate inspection and correction of returned products by customers. One of his principles is that customer satisfaction comes from the employee satisfaction.

Apart from that, his life at several companies conveyed to him the importance of proper merger between related companies. The real time – online reporting system was the one which Silicon Valley companies lacked during his life time. Only at mid-2000, he was able to develop such system which has greatly improved the efficiency of the organisation.    

                                        

One thing which made me feel bad from his book is that he feels “India is a place which is full of garbage and manufacturers are not giving importance to the cleanliness. The ICs produced needs a clean machine set up, so that the accuracy of the instrument will be high.” This is one which he dislikes in India.  Maher also learned how management must be involved in the daily factory issues by knowing what problems are present and how they are being solved!