Have you ever

Have you ever looked at someone in the eye, and wondered, what might have been, if you had just asked?

Oligopolistic business schools

Have you ever wondered why a large car manufacturer would always announce a car price hike two months in advance?

Have you ever wondered how the prices of cigarettes have virtually been going up steadily for the past two decades or so, with absolutely no signs of them going down?

Primarily, the markets in which cars and cigarette manufacturers operate are called oligopolistic, a term from the large oil companies which often have only 3-4 players in every market. Because some markets become so mature and capital intensive, it becomes impossible for new players to enter, and only 3-4 big players manipulate the market. This means that they can cooperate with each other, and keep hiking the price of their products, and if all four of them work together, the prices remain steadily rising, benefitting everyone except the consumer. A new competitor cannot enter the market, because he would immediately get swept away by the larger players.

The A+ league Indian Business Schools could probably be considered a oligopolistic scenario. First of all, there are very few powerful brands in the country in the art of business school education. Further, the other business schools often have no option but to follow the leaders, as they cannot break into the big league anyway. They don't even compete for the same customers. In fact, often the customer competes for the product. Early this week, they showed a classic example of oligopolistic behavior. First IIM Bangalore hiked their fees by Rs.75,000. This might sound like $1500 dollars, but considering that it is a 43% hike, it was quite substantial. Quickly, all other IIM's made annoucements about fee hikes as well. Soon, the other A league business schools made similar announcements of price hikes in the next couple of months. The catchline is: "IIM Ahmedabad to decide on price hike on March 31st". And of course, it should decide to hike the fees.

Net4nuts

Economic times today has an interesting article:

An Ahmedabad based organization called, yes its true, Net4nuts, has come up with a new concept of Push email on mobile devices. They claim that the cost would be one tenth of a Blackberry device, and the target market is that of SME's and professionals. The service is a month old, and they already have 30,000 users in five continents! The website looks like, as Larry Ellison would say, a cat could make it. The service is titled, quite aptly, Meongo and hopes to have revenues of $30 million in the next three years. That's ambitious numbers for a service that is platform independent, claims to offer email anywhere on any GPRS enabled phone, competing with RIM, has tie-ups with only a few telecom operators in India, and only one month in the business so far!

Where is the line between ambition and lunacy?

If you had a chance

What would you do today, if you knew that tonight was the last night of your life?

IBM's new CMOS

For the past few months, one thought has been troubling me no end. If high definition DVD's get popular, if MP3 and youtube get big, how will we ever keep up with the ever increasing demand for bandwidth? India was pretty much not in the debate, because we still live in a country where 256 kbps is considered broadband.

IBM comes up with a pathbreaking solution: A optical chipset that is widely acclaimed as the world's fastest ever. With speeds of 160 gbps, it can now enable downloads of HD movies that were previously 30 minutes or so on the fastest connections in the world, to only 1 second. It has all the benefits of a utopian solution: The cost per gigabit reduced by about 20 times, the speed escalates by 8 times / chip, and IBM estimates that it should be entering the commercial market soon. One such chip could cost $500, if produced in the right volume. That's a drop down from $25000-$30000 from today's speeds.

Interesting to see on which trajectory this could take us. If we had all the speeds we could ever dream of, would then computers as we know it become obsolete? With speeds like this, the network computer becomes more relevant than ever. To think, the PC itself was an IBM innovation. Now they make it obsolete!

The losses mount

I was in a Gurgaon mall, and happened to walk into an Adidas showroom. The "blue" was palpable. Blood bottles with blue blood, Sachin Tendulkar posters, t shirts, India t-shirts, the works! It was amazing to look at how much Adidas would have invested in that single showroom. As we speak, of course, India is almost knocked out of the world cup.

The economic times reports:

According to Mindshare, a media buying agency, India Inc’s losses would tot upto over Rs 163-crore. And this just on the Rs 350-400-crore advertising monies that they had committed with the official broadcaster, Sony Entertainment Television (SET). Mindshare’s estimates are based on the premise that viewership for the rest of the World Cup matches, sans India, will drop as much as 50%.

With such a disaster in the making, how can they expect to recover? In fact, Reebok says that it is now going to shift its focus away from Cricket, onto more fashion related marketing. If Reebok does not advertise on cricket, what happens to the future of all the sports brands in the country? Where can they advertise? Where else would Pepsi and coke fight their battles? Where else would communities of people get together and be one, and show passion, excitement and breathe the same game?

The impact of India's loss is more deeper than we might see.

Imagination!

This is very rare, but interesting in the Indian context: The Mumbai police placed these coasters in pubs in Mumbai. When the customer took off a moist glass of alcohol from it, the blood spreads...

Just a game?

After the match between India and Sri lanka which we lost humiliatingly, Niranjan Shah was asked to comment. "Its just a game", he said. "Sometimes you win, sometimes you lose". Rahul Dravid was quick to take full blame for the defeat. Greg Chappell clearly states that he would take only his share of the blame, and the entire team was collectively responsible for the defeat.

This brings us to the all important question: Is cricket just a game? Is it fair to assume that we can afford to lose, particularly after $612 crores were directly made by the BCCI in the context of this world cup?

Consider a brand like Pepsi. They sign up the biggest cricket stars, pay them heavily for endorsements, and then also sponsor a large part of the tournament itself. Further, they go on and release a silly horsepiss-colored drink called Pepsi Gold. Then they have to pass it through their national distribution chain to ensure that it is available all across the country by the time the world cup begins. The finest logistic talent, operations teams and marketing teams of every such organization come together to organize one of the most sustained marketing efforts in the country. Music groups come together and make songs in praise of the cricket team. News channels dig up the bones of the players who won us the 1983 world cup, put them together and ask them ridiculous questions about what they ate the day before the game. People across the country pray for their team. Even I, who knows as well as anyone else that India cannot win after losing 7 wickets against Muthiah Muralidharan & co, watched with a last breath of hope as Rahul Dravid blasted 16 runs in an over.

When something as big as this comes crashing down in our face, how do we take it? We make familiar remarks about how the game needs to be revamped, dismiss a couple of players, talk about "young talent" , and life just goes on. But can we ensure that corporates can actually catch a player when he is much younger, and groom him in the best environments in teh world, and ensure that he comes up to play for the country? If Pepsi, Adidas, Hero Honda, Bajaj, Hutch, and Airtel each put their money on a hundred young kids and one each comes up to play for the country, would it not be better for the country?

If I was a marketer for the large cola brands in the country, I would recognize that they have just wasted a hundred crores or so. If they have any sense of corporate responsibility, they should come in where the potential is much more.

But the bottom line is this: India is fast losing the race to global superiority in Cricket. We are atleast ten years behind Australia and South Africa. Its time to move on to another sport, like Hockey or Football. Time is ripe to develop Hockey in the country. The Premier Hockey League seems to be moving up the popularity charts, and some big marketing can bring hockey back into the reckoning. If we did this badly with Saurav, Sachin and Rahul in the team, I shudder to think of what would happen if three of them retire.

As a marketer, I think its better to walk out of the game, than to stick on and gamble. After all, risk taking is the job of the business development / M&A team, not of the marketing team! I think this is quite unique to the Indian cricket scene, when I think of it.

Bob's gone

Bob Woolmer, the coach of the Pakistani team, after making a brave public apology to the country of Pakistan for losing in the first round of the world cup, was found in a pool of his own vomit today. He was dead, and could not be revived in the hospital.

Bob Woolmer has had its share of history in cricket. If anything, he could probably described as the best coach in cricket history. He brought in his Sony Vaio and video analysis technology, hereby transforming cricket and putting it on par with other modern games like football. He was probably the reason why South Africa moved from good to great fielding and cricket, hence taking the rest of the world along with them. The standards of the game went up, and Bob moved on to take a role as the coach of the Pakistan cricket team.

It must be shocking to know that a whole country for whom he had been working for was baying for his blood. Subcontinent teams don't like foreign coaches, mostly because they cannot be intimidated to buckle to what the crowds want. Greg Chappell and Bob Woolmer set an example in professionalism by taking the highest pressure job in the game today. Bob Woolmer did succeed to an extent, but a coach can do only so far. When the team has no proper selection process, no youth grooming process and players are caught taking drugs weeks before the world cup, there is only so much a coach can do. It then takes guts to stand up and take blame in front of a whole country.

Bob Woolmer: a pioneer who defined the way the game was run, and the man who dared to take the most difficult job in the game. Goodbye Bob Woolmer. The show must go on.

Social searching

These days, the most exciting place to be in is marketing with Microsoft. An ageing giant, with loads of cash but very little technological prowess, it is trying desperately to win back its customers from the new age warriers like Linux, Firefox and Google.

In a very interesting strategy, Microsoft is offering cash to its corporate customers for using Live search. For those of us who don't know what live search is, its a solution competing with Google. This is the first example of an organization paying customers to use a free service. Revenue sharing for search, is very interesting indeed. With this, Microsoft says it hopes to understand the search market and utilize it more effectively. Also, I see this as a more serious form of search compared to Google, because when a company is paying customers to use it, it would eventually need to introduce metrics of how efficient it is in comparison with Google. It could change the way we search, as a paradigm.

Waiting to happen

After all that hoopla about the cricket world cup, absolutely the worst thing to happen, has finally happened. India has lost to Bangladesh in the first match of the world cup.

Of course, the knives are out, and the country is now running programs on all our news channels to understand what really happened against Bangladesh.

If we cannot understand that we can just have a bad day, and stick by the team in the hour of need, what did we learn from 32 years of world cup experience?

six things off my list

In an eventful week, I fulfilled six things on my lifetime to-do list:

1. Travel in "the tube"
2. Find an Indian brand billboard in London (Jet Airways)
3. attend a wild college party in a foreign country
4. eat sandwiches for a week
5. Compose a blog post on a Mac
6. Be amazingly close to the scene of a college shootout

Nishabd: A review

When you walk into a movie, you expect of the movie. Sometimes, by the time the movie is through, you don't want to get up. You have been dealt with a thought, and you want to keep thinking about it. You breathe, and you know you've been overtaken by a concept so overpowering, that nobody in the audience even got close to understanding what was going on. They saw lust, they saw an icon prancing with a teenager, and they saw infidelity. Everything that Nishabd was not about. Because Nishabd's story is in not in what's on screen, but in what's not. Its about the tired look in Amitabh's eyes, the eyes of a seasoned actor who knows that every twitch of his body could tell a story. The story was in the body of the young woman who was let loose on screen. It was not in her acting, but in her very presence. The story was in the mist of Munnar, behind the mountains and lurking over the vast tea plantations.

If I was to summarise what Nishabd was about, I would say it was about death: The fear of death, the upcoming of death, and thoughts of what death can do to you. Amitabh plays Vijay, a photographer at 60. He knows that his best days are behind him. His mind wills for life, but his body knows its limitations. He has a wife, a daughter, a family and an estate. His family is what he had brought up for thirty years, but he knows that this is his age, and he wants none of it. Into his life walks freshness, in the form of Jiah. In every conversation, he sees spirit. He sees himself, many years ago. In wanting Jiah, he wants himself back. He falls in love, only because he knows that this is his last chance to live. He travels with her, and talks to her, and in every conversation, he finds his laughter, his joy and his freedom. Its difficult to describe why Vijay falls for Jiah. Its difficult to understand how such a man cheats on his family. I don't think many people got it. When you think about it, it's not about the family. It's about looking at life in the eyes one last time. When you think about it, it needn't have been Jiah. It could very well be Pink Floyd and grass.

The best scene is the last one, where he comes back home in the night, and when asked where he went all day, tells his brother-in-law: "marne gaya tha"(I had gone to die). I'm not dying because I'm feeling emotional. I'm dying because I have nothing left to live for. I live, only because I want to live in Jiah's memory for a little longer.

He cheats on his wife, and the audience gasps. In the man on screen, they see Amitabh Bachchan, the most respected actor in India. They see a role model in Amitabh. I saw a character who was gasping for life. It could very well be Amitabh in real life. I don't think I've ever seen so much meaning in Amitabh's eyes.

Its sad that such a movie will shock the country. The movie was poetry to me. I hope you'll like it too, though I know you won't.

Mobile company executives talk...

A: Oh no! market share's falling, other companies are marketing their phones much better, and our battery life sucks too.
B: Quick! Lets create a phone that looks like the iphone, call it the iphone, and sue Apple for copyright violation.

Holi musings

Ok, so its holi. Happy holi and all that, ok?

Its the festival where the whole country comes together and colors each other. However, here's the catch: I really don't understand the motive of the game. Now, the question is very simple. When you play diwali, you brainlessly blow up crackers and your money. Often, the amount of celebrations goes to show how rich you are. When you play sankranti, you fly kites until your kite is the only one left in the sky. The motive is to have the best kite in the sky. In this, holi seemed paradoxical. If the motive was to get as colored as possible, why must you run away from everyone who is trying to color you? If you wanted to take care of your skin color , hair and complexion, why do you then play holi at all?



Basically, if the motive of the "game" is to get as colored as possible, then you should just stand there and get colored, and others must keep running away from "trying to color you". But then, clearly, that doesn't happen either. So, the motive must be to get as less colored as possible. But if this was happening, would not everyone look to color each other lesser and lesser, knowing that if they colored more, they would get colored more. Then, this would keep reducing, until finally nobody would color anyone, hence making the very purpose of the game redundant. Its like playing cricket where the team with the least runs wins. Why play then?

Next, lets look at other motives of holi. Colors are cheap, so the motive can't be to flaunt your wealth. The very process of holi isn't very cleansing (because it makes you just about as ugly as Himmesh Reshammiya without the cap), so it can't be very healthy either. Now the more ulterior freud-ian motives: Do men play holi with women only because they can get intimate? (Think Amitabh Bachchan in "Rang Barse") This can't hold either, because if you can play holi with the woman, so can every other guy in the pond. The very challenge of getting intimate is lost. Next, could the motive of the game be to spend quality time with family? Of course, but then you could just sit with them and watch television. Why color your body all over and then spend the whole day scrubbing it off with soap and vim bar?

This brings us to the conclusion of this monologue: We play holi because everybody plays holi.



On the previous day, don't all of you vow to not play holi this year because "you have work the next day"? But then, one person somewhere starts wondering why we are not, because someone else in some other city / colony is playing holi. So he takes colors, and puts it all over his nearest buddy. These two have now ruined their day, so they go from house to house coloring people. After half an hour, everyone is now colored, and they are all feeling a deep sense of revulsion against the person who started it all. So they soon start coloring one another, because they are too far down the road to care. The Bhang, liquor and sweets help to numb the senses. The nearest mirror can be a scarring experince too. After giving up on all worldly desires, you start coloring one another in madness, which the world around you starts interpreting as happiness. Many days later, you would remember with a deep sense of disgust of how you got colored and touched all over by the hairy man next door. But then, by then you don't to seem like the only one who hasn't had a great holi. So you pretend you had a great time, and you look forward to next year.

And the whole saga begins again...

Images courtesy:
1. Vanderbilt
2. ND
3. Indialife

Cementing prices: Budget 2007

Cement prices are forming an interesting study after the budget. The budget statement has been as follows:

“Last year, at this time a bag of 50 kg was sold at a maximum retail price (MRP) of Rs 190 or less which, I understand, is a remunerative price. I propose to reward cement manufacturers who hold the price line and tax those who do not,” Chidambaram said. In the budget, hence, the following move was made: Excise duty would be cut by Rs. 50 to Rs. 350 (per tonne) if the price of the cement is Rs. 190 per bag. If it is more than Rs. 190, it would attract an excise duty of Rs. 600!

Two things could now happen:

1. Cement manufacturers could drop the price to Rs. 190 per bag, because they would now have reduced excise duty. Now, 20 bags make a tonne. So they would gain about Rs. 2.5 per bag. In return, they would lose Rs. 30 per bag from the market price of Rs. 220. Also, the rise in sales is expected to offset this price hike.

2. Cement Manufacturers could hike their prices, and just pass on the cost of the excise to the customer. Since excise has gone up by Rs. 200 per tonne (10 per bag), prices would go up by about Rs. 10.

March 1st: Cement manufacturers hike prices by Rs. 10-12. Most of the cement manufacturers are against the excise hike, and will not bite the carrot. This must have definitely come as a shock to the FM: First of all, the cement industry is a ruled by the larger players. With the cost of manufacturing a tonne of cement Rs. 3500, the cement industry has consolidated in the hands of the big players. Large cement plants account for 93% of the total installed capacity in India (Source: ICRA Report). As in most such markets, the price keeps rising gradually because of cooperation between the larger players. Also, in one of the rare disadvantages of the government gradually leaving the sector, they cannot price competitively and keep the market going. Among cement public sector undertakings (PSUs), Cement Corporation of India (CCI), a central PSU, is the leading player. But it has a total installed capacity of 3.85 mtpa at end-FY2006, which is not strong enough to move the market downwards.



Is it time to rollback the excise duty? Time to make cement transportation a viable option? Cement, as we know, is hugely dependent on the outward freight costs. South India is currently producing under capacity. Could this be changed, to impact prices across the country? Or could one big player come onboard, and the rest could follow?

Incredible

Its incredible to watch the attention that the Apple iphone is getting. How can a brand begin to re-create human imagination so much, that phones being released before it are being branded iphone clones? Gizmodo has been going crazy for weeks now, and the tension is not about to stop. Hundreds of dotcoms are filled with speculations about the suppliers, features, and the patents behind the system.

The question is, how can a brand capture the imagination of the geek world so much that the whole world waits for every apple release with bated breath? The iphone might not be the greatest electronic device ever created, but it sure is getting comparable attention. It could be one among many reasons. The story of the organization Apple, the story of Steve Jobs, the inexplicable commitment to do something different every single time they touch a business. In fact, everytime they get into a business, they put every single dollar they have. Its mindboggling, to imagine how many times the company has bet its own future on an upcoming product.

This evening is for Apple. For a revolution. For telling us that we can change the world, every single time we ask for something new. For looking into the future every single time they have stepped into a field. For respecting technology more than they respect the business. For betting their lives on our future. For knowing that its more important to provide the user with an unbelievable experience, than to just make money. For making a difference to the world we live in. Cheers!

Reflecting on the Budget, India and growth

The Indian economy can be broadly classified into three phases:

1. Independence to the late 1980's: These were years when the country believed that growth should carry the poor man along with it. In this pursuit, they followed ill informed economic policies which ensured that entrepreneurship was stifled, banking could not evolve, and the growth suffered. In the process, however, they did a few things right. They built a few companies that could becoming overpowering engines of growth in the next few years. They built a few banks which evolved to become mechanisms of driving these engines of growth. They built educational institutions like the IIT's and the IIM's which could provide the people to make India march ahead. The aam aadmi was an excuse to win elections, since growth was not eventually getting down to him.

2. Early nineties - 2007: In the second phase, India began to deliver on its promise which it had made to the world many years ago. New age businesses began to bloom, entrepreneurship was on a high, and India began its march to the first world. Its population, once considered a big disadvantage, was proving to be the driving force behind this growth. The world waited and watched, while India grew from unshackling itself, to growing at unimaginable rates. The fiscal deficit was coming down, good governance was becoming the norm, often governance was becoming irrelevant because business was providing the average indian with a much better standard of living. Manufacturing and services were growing at enormous rates, and there seemed to be little to change the course of this growth. While we stood at the beginning of 2007, India seemed on course to achieve its hitherto unthought of targets of FRBM targets of a 3% fiscal deficit by 2008. Tax collections went up by 25,000 crores in the last one year.

However, the economy's fundamentals remained bad. The economy was growing at high rates, but the common man remained unaffected. The education, public health and sanitation was poor. Disease was widespread. Epidemics were quite common, and the law and order situation was deteriorating due to this increasing rich-poor divide. One part of India was looking at the sky, and acquiring multi-billion dollar enterprises across the world, while the other India was unable to meet its daily needs.

3. 2007: The Finance Minister walked out on the 28th of February, 2007, and announced to the country that we now needed to create a different dream. A dream of an India where the divides between rich and poor were reduced, and where everyone could participate in this revolution. In his own words, ''Our human and development indices are low, not because of high growth but because growth is not high enough. Faster economic growth has given us once again the opportunity to unfurl the sails and catch the wind.'' He was making an important point. India's growth was a given. The country had taken wings. Yet, this growth that India was seeing would need to be inclusive. It would need to carry every Indian along with it. This would mean that the inflation would need to drop.

It would mean that there would have to be an increased investment where it counts: Health and education. It would need to get back to the pre-1980's days, where it would tax the rich and help the poor. However, it would need to be done with a difference: This time, real growth would be used to carry every Indian along with it. Needless to say, it came as a rude shock to many industries: IT, which was living on a tax holiday and expected it to continue, was slapped with a MAT (Minimum Alternate Tax). ESOPs were taxed on gain, as they are in many countries across the world. The Dividend distribution tax was raised to 15 percent.

Educational cess was raised by 1%. Spending on education was raised by 34.2% to 323.5 billion rupees. Whether this investment would be fruitfully utilized with effective public-private partnerships remains to be seen. Spending on healthcare and family welfare was raised by 22%. These are staggering numbers! The realization has been clear. The focus needed to be on development once again. This time, however, we would have to do it right. Farm credit for this year was seen at 2.25 trillion rupees, up by 20%. If Inflation needed to be cut, the supply side crunch would need to be curtailed. As a result, Import duties were slashed once again.

However, in this visionary budget, P Chidambaram got one thing wrong: The people who could understand the impact of his policies were not pleased. The corporate world was not going to be happy. They would be facing obstacles again. They were going to be challenged again. On the other hand, the people who really benefitted could not see the impact for the next three years. Further, They would not be heard. They would not even realised that someone had unlocked their future in this budget.

Its a dawn of a new era. PC has opened the doors to this future. However, the implementation is still the key question. All the money in the world won't change the country if the implementation is still shoddy. Structuring these would be the need of the hour.