e globuz z vol ii issue ii

e-‐GlobuzZ Vol II Issue II Oct-‐Dec’11

e-‐GlobuzZ K.J.Somaiya Institute Of management Studies & Research

“Stay Hungry Stay Foolish” -‐ Steve Jobs

Volume II Issue II Oct-‐Dec’11


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Dear Readers,

It gives us immense pleasure to bring you the 7th and second anniversary issue of e-‐Globuzz (Oct-‐Dec 2011). The business world was even more turbulent in this quarter in comparison to the previous ones, with the European Union (EU) going into a deeper financial crisis, change of regime in Libya and the sad demise of one of the most successful and respected innovators in the personal technology industry, Late Steve Jobs in Oct 2011. Considering the monumental contributions of Steve Jobs, the e-‐Globuzz team has dedicated this issue to him. A lot has been said in the press and other media about the unique contributions of Steve Jobs. We remember him and cherish his commencement address to MBA students at Stanford University in 2005, which will always be an inspiration for several generations of innovators and MBAs alike.

Some of the Highlights of this issue include a brief report on the first International Business Conference Pangea 2011 organized by IBS@SIMSR on 24th September 2011, a write up on emerging markets of African countries along with other contemporary articles on international marketing, finance and logistics. One of the e-‐Globuzz’s first that we have for this issue is an article by our own faculty Prof. B. Bhatia on international finance.

We have also covered highlights of the international business session on emerging trends in international trade and cross-‐border investments of multinational enterprises on 16th December at Samavesh this year which is our institute’s prestigious annual event.

We hope you like this issue of e-‐Globuzz just as much as the earlier issues. We invite contributions from all our readers for the 8th issue (Jan-‐Mar 2012) proposed for e-‐publication by mid Feb 2012.

Happy Reading,

Prof. C. P. Joshi

Faculty Mentor

IBS@SIMSR

FOREWORD

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Vol II Issue II Oct-‐Dec’11

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VOL II ISSUE II OCT-‐DEC ‘11

All the views expressed in this e-‐periodical reflect the personal opinions and views of the authors and do not reflect IBS@SIMSR views.

Obituary

Steve Jobs 4

Taming the recession

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Electric-Car Industry – The road ahead

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A New Chapter In Indo-Iran Ties

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Islamic Banking 12 Battling the skies -

The success of AirAsia

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Emerging Markets: African Countries

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International Logistics

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Issue of GDR/ADR by Indian companies-

Recent Trends

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Alumni Speak 26

Highlights International

Business Conference

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Highlights Samavesh

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Faculty Mentor

Prof. C. P. Joshi

Editor-in-Chief

Prerna Makhijani

Manvinder K Sodhi

Designers

Vishu Kartik

Swetaleena Das

Did you know

Ankur Yadav

Circulation

Swati Moolchandani

Shivam Awasthi


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The Man Who re-‐established the vitality of the forbidden Fruit!

We as management students try to learn business in the world, but rarely does the world produce an individual, who gives business so much to learn from.

Steve Jobs, CEO of Apple Inc. and one of the greatest mastermind and innovators of all time, passed away on 6th October 2011, at the age of 56, after a long battle with cancer. His unsurpassable contribution to personal technology and more broadly to the innovation revolution, has not only left an indelible mark on our society, but has also made him immortal and forever ideated. He possessed great business acumen and at the same time despite his greatness, also taught us that he is just another man. His speeches, his philosophies and more informally his attire, all marked the greatness of the man and his humility.

Jobs was a perfectionist, attention to details and minuteness being his forte. No wonder, today we so conveniently use the i-‐prefixed devices, the most swanky hand and palm pieces. Steve Jobs started his career in 1977 with his friend and Apple co-‐founder Steve Wozniak, by launching the first successful mass-‐market PC-‐ Apple II. There onwards, he bought and lead Pixar Animation Studios till the mid nineties. The company set an epitome of cutting edge technology that animation had ever known.

Technology was further revolutionized when Steve introduced iPod, the ultimate boon to music; with the introduction of iPod, music aid like CDs, Tapes, LP records and Walkman, all became a passé.

The success of Macbook, iPhone, iPad , all recite the story of the much glorified Apple Inc. and the man behind it. The legend who miniaturized the world and brought it into our palms. What would you like to call him? An Inventor? An Innovator? Maybe a blend of both!

Forbes magazine laid down the top ten lessons that Steve Jobs Taught us. To emphasize on of one them, that is quite relevant in terms of management education is: To create the future, you can’t do it through focus groups: “Even, the consumer today does not know what he wants. Innovate for him and give him something, he would crave for”. The success of iPod, iPhone and iPad depicts it so perfectly.

Over a million people from all over the world have shared their memories, thoughts, and feelings about Steve. One thing they all have in common, including his friends, colleagues and owners of Apple products, is how they’ve been touched by his passion and creativity

With the last inspiring words from the legend himself, who shall remain alive in everyone’s heart not just for being a technological revolutionary but for being “Steve Jobs”

“Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

-‐Nikita Agarwal (PGDM-‐IB 2011-‐13)

Obituary: Steve Jobs

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The signs of an imminent recession are all around us. The spill over from the subprime mortgage crisis is weakening both consumer confidence and consumer spending—much of it on credit—that has been buoying the US economy.

The dismal state of the economy is causing companies everywhere to reassess their marketing budgets to ensure that they're allocating their limited marketing funds in the most productive ways possible.

In many cases, this means curtailing, postponing or even eliminating previously planned marketing expenditures.

In other cases, companies are actually investing more aggressively in various types of marketing programs, sensing an opportunity to capitalize on the grim economic headlines.

The recession is also causing some marketers to rethink their trade promotions. Consumer brand companies typically spend upwards of 15% of revenue on trade promotions, which involve temporary price cuts to encourage reseller channels to reduce retail prices for consumers.

Taming the recession -‐Nikunj Garg (MMS-‐B 2011-‐13)

For most companies, the majority of funds originally earmarked towards industry events and tradeshows has either migrated to other marketing programs or simply been eliminated.

While traditional advertising programs and industry trade events may be on the decline in terms of marketing investment, a number of other channels and programs are gathering steam. A good example is social media. Today a growing number of companies are deploying technology-‐enabled solutions for leveraging word of mouth as a way to drive marketing improvement.

By turning consumers into brand advocates and building market awareness in an exponential manner, social media marketing can be a cost-‐effective way for a company to achieve some of its key marketing objectives.

Companies are paying close attention to online marketing, in general. This category is broad in scope, encompassing everything from search engine marketing to Web-‐based promotions.

Mobile marketing

Through a confluence of technologies and

standards related to mobile devices, including


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Did you know?? Through a confluence of technologies and standards related to mobile devices, including third-‐generation (3G) networks and data packages, the mobile Internet has now reached a critical mass. As more consumer brands are discovering, the mobile Internet can now enable large-‐scale mobile marketing activities capable of engaging consumers in unprecedented (and largely affordable) ways.

Reassessing Marketing Messages and Pricing Tactics

Companies have reassessed their marketing and advertising messages in the context of their cash-‐strapped buying audiences and modified these messages to better resonate with consumers who, in many cases, have become increasingly risk averse and price sensitive.

Based on their demand forecasts, companies are taking steps to eliminate poorly performing products and solutions, shifting funds to product lines that seem better suited to weathering a recession and even introducing new products and services that meet the needs of consumers on an austerity plan.

To that point, companies are also modifying their pricing tactics, including engaging in temporary price promotions and reduced thresholds for quantity discounts, in order to achieve their marketing and sales objectives. Some companies are simply selling fewer products for the same price.

Companies should bear following factors in mind when making their marketing plans.

1. Research the customer. Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession. Consumers take more time searching for durable goods and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less.

2. Focus on family values. When economic hard times loom, we tend to retreat to our village. Look for cosy hearth-‐and-‐home. Family scenes in advertising should replace images of extreme sports, adventure and rugged individualism.

3. Maintain marketing spending. This is not the time to cut

advertising. It is well documented that brands that increase

Treaty of Rome - An international agreement that led to the founding of the European Economic Community on 1 January 1958. It was signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and West Germany. The word Economic was deleted from the treaty's name by the Maastricht Treaty in 1993, and the treaty was repackaged as the Treaty on the functioning of the European Union on the entry into force of the Treaty of Lisbon in 2009.

Smoot Hawley Tariff Act Tariff Act of 1930, otherwise known as the Smootñ Hawley Tariff was signed into law on June 17, 1930. It raised U.S. tariffs on over 20,000 imported goods to record levels. After the 1929 stock market crash, unemployment never reached double digits in any of the 12 months following that event, peaking at 9 percent, then drifted downwards until it reached 6.3 percent in June 1930. Then the federal government made its first major intervention in the economy with the Smoot-Hawley tariff

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advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Brands with deep pockets may be able to negotiate favourable advertising rates and lock them in for several years.

4. Support distributors. In uncertain times, no one wants to tie up working capital in excess inventories. Early-‐buy allowances, extended financing and generous return policies motivate distributors to stock your full product line. However, now may be the time to drop your weaker distributors and upgrade your sales force by recruiting those sacked by other companies.

5. Adjust pricing tactics. Customers will be shopping around for the best deals.

You do not necessarily have to cut list prices but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-‐standing customers and price smaller pack sizes more aggressively. In tough times, price cuts attract more consumer support than promotions such as sweepstakes and mail-‐in offers.

6. Stress market share. Companies such as Wal-‐Mart and Southwest Airlines, with strong positions and the most productive cost structures in their industries, can expect to gain market share. Other companies with healthy balance sheets can do so by acquiring weak competitors.

In the end, companies have no choice but to strive for higher levels of efficiency and effectiveness across all aspects of their marketing operations in the face of persistently weak spending by consumers and businesses.

“ By turning consumers into brand advocates , soc ial media marketing can be a cost-effect ive way for a company to achieve some of its key

marketing object ives . “


Electric-‐Car Industry – The road ahead -‐Sahil Patel (PGDM-‐IB 2011-‐13)

Demand for Crude Oil is increasing along with the number of Cars on road making any economy highly dependent on Foreign Oil. Thus, today, all the major economies want to shift their transportation sector from internal combustion engine (ICE)-‐based vehicles to fully electric vehicles. Now, we will see how some major economies of the world have taken a few but vital steps in this direction.

US

The American transportation industry today faces a perfect storm of economic, geopolitical, and environmental concerns that threatens its future. The decline of the US automobile industry, the country’s increasing dependence on foreign oil imports, and global warming have spurred the Obama Administration to publicly commit the country to developing alternative transportation methods and alternative energy sources as a way of combating these problems and setting a new path for the US transportation sector and economy as a whole.

The U.S. government in 2008 began to talk about the energy crisis in earnest in response to both skyrocketing gasoline prices and a national mood that favoured decreasing the U.S.’s dependence on foreign oil. When President Barack Obama entered office in 2009, he made energy independence one of his core issues, and his administration allocated billions of dollars to promote electric vehicle manufacturing and development of advanced batteries for those vehicles.

China

The Chinese government, in 2008, wanted to turn the country into a global leader in hybrid and electric cars within three years. Within that period, each of the country’s passenger vehicle-‐makers would be required to have a licensed new energy vehicle on the market. Today, China wants to hit battery

capacity that will be equal to 1 million units of battery-‐powered automobiles in operation. By achieving this, they will also boost their own battery-‐export opportunities. Moreover, Municipal governments have offered up to $8,800 in subsidies to taxi fleets and local governments for hybrid and all-‐electric vehicles.

Rest of the World

Governments from rest of the world too have shown keen interest in building Electric-‐Car Industry. In Israel, for example, the government is working with Silicon Valley start-‐up “Project Better Place” and established car companies Renault and Nissan to bring the electric car to Israel, and has committed to offer substantial tax incentives to consumers who would buy electric cars. Denmark has also worked with Renault and Nissan, and with “Project Better Place”, to build a country-‐wide electric car network with 20,000 recharging stations powered by wind turbines. In Japan, has pledged to install power outlets throughout public areas in certain cities and towns, and has planned to encourage private companies to give discounts on loans, insurance and parking to electric car owners.

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All the countries discussed above are encouraging the Electric Car Industry not only to avoid becoming energy dependent on a foreign country but also to keep their carbon footprint under check.

Lessons for India

In light of this state of affairs of the emerging global electric car industry, when it comes to India, the account is almost NIL. Though in India, there are a lot of issues that doubt the feasibility of the electric car industry, we can’t just keep quiet. Major incumbent automakers, such as Nissan and Renault, have secured internal access to critical new battery technology as well as cooperative agreements with national, regional and local governments in different parts of the world. And now, it’s time for the Indian Government to encourage such private Automobile Manufacturers to invest into Electric-‐Car Industry to gain the dual merits associated to it.

Did you know??

Chicago Board of Trade (CBOT).

The CBOT, established in 1848, is the world's oldest derivatives (futures and futures-options) exchange. Futures and options on agricultural (wheat, corn, oats, etc.), financial (U.S. Treasury bonds and notes, etc.), and index (Dow Jones Industrial Average) instruments trade on the CBOT.

German Customs Union One of the first economic blocs was the German Customs Union(Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871. Surges of trade bloc formation were seen in the 1960s and 1970s, as well as in the 1990s after the collapse of Communism. By 1997, more than 50% of all world commerce was conducted under the auspices of regional trade blocs

________________________

“Today al l the major economies want to shift their transportation sector from internal

combustion engine (ICE)-based vehic les to ful ly e lectr ic vehic les . “


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A NEW CHAPTER IN INDO-‐IRAN TIES

-‐Pratichi Swain (PGDM-‐IB 2011-‐13)

meant Moscow influenced India’s foreign policy. The Islamic revolution in 1979 saw the ouster of the US backed Shah Dynasty rule and more importantly brought India and the new theocratic government closer. There have been many high level visits from both sides with the highlight being President Mohammad Khatami’s visit to India in 2003, when he was also the Chief Guest at the Republic Day function. But in recent years it has been a seesaw relationship with Iran. India’s vote against Iran’s alleged nuclear weapons programme in IAEA in 2005 and also in the United Nations Security Council in early 2011 led to new lows in bilateral ties. Many believed that the vote against Iran at IAEA was coerced by USA in lieu of the lucrative civilian nuclear deal for India. This plan of action backfired for India mainly because of the recent nuclear tragedy in Japan, leading to wide scale protests by locals at the site of new nuclear plants in India that forced the government to go slow on nuclear energy.

The Wikileaks recently revealed that Indian Prime Minister Dr. Manmohan Singh had rejected previous requests either to visit Tehran or for Iranian President Mahmoud Ahmadinejad to visit India as the United Progressive Alliance government was anxious not to ruffle American feathers at the height of the U.S.-‐led campaign against Iran over its nuclear programme. So when Dr. Singh met the Iran President on the sidelines of his visit to the UN in September this year and accepted his invitation to visit Tehran, it raised a few eyebrows indicating a substantial shift in India’s foreign policy. The cause of the shift can be basically attributed to a host of various reasons, none more important than regional stability and the need to have a dependable source of fuel to meet the rising energy demand. India and Iran did not enjoy a great relationship till the late 1970’s mainly due to the Cold War. The Shah Dynasty regime in Iran was backed by Washington and India’s proclivity to the erstwhile Soviet Union during those days

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Also, the dependence on import of nuclear fuel from some reluctant member countries of Nuclear Suppliers Group like Australia and New Zealand does not augur well for India. The Indian Government has by now realized that the aim of replacing hydrocarbons with nuclear energy to meet the energy requirements is still a distant dream and India has again fallen back to the traditional suppliers of hydrocarbons. Thus, this gesture by the Indian PM can be seen as a way to woo Iran for India’s greater gain. India’s trade volume with Iran is not as significant compared with USA, EU and China. Iran accounted for around 1.1% of India’s total exports and 3% of imports in 2010-‐11. India’s exports to Iran include petroleum products, rice, machinery & instruments, manufactures of metals, primary and semi finished iron & steel, pharmaceuticals, chemicals, processed minerals, manmade yarn & fabrics, tea, chemicals, rubber manufactured products, etc. But what is noteworthy is that almost the entire import from Iran is hydrocarbon. As per the latest report of the Ministry of Commerce, petroleum alone contributes around a quarter of India’s total imports. Iran is the second largest exporter of oil and natural gas to India after Saudi Arabia. Iran’s contribution has decreased from nearly 20 percent of India’s total petroleum imports to around 12 percent in last 2 years. This can be owed to the stringent restrictions imposed by USA and EU even though Iran’s petroleum sector has been kept out of UN sanctions. India’s policymakers are systematically looking for the widest possible set of alternatives to meet their growing energy needs. India has huge coal reserves, but oil and gas reserves are modest. Moreover attempts to increase nuclear power production are facing humongous hurdles indicating that there would be a greater

dependency on oil and gas. Presently domestic resources supply 70% of India’s energy needs, but as consumption rises, dependence on foreign sources would increase further. Recent discovery of natural gas in India won’t be enough to keep pace with the growing requirement and this is where Iran can be more than a normal trade partner to India. Iran is OPEC’s second largest oil producer and has 10 percent of the world’s proven oil reserves. It is also the second largest gas reserves that are about 16 percent of the world’s proven gas reserves. Iran’s current production of gas is very low in comparison to the reserves it possesses as the gas fields are yet to be tapped, giving Indian companies an opportunity to reap the benefits by investing in the Iranian gas sector. With such prospects lying ahead, Dr Manmohan Singh’s visit to Tehran will act as a catalyst to improve bilateral trade.

Along with energy dependence, one more factor that drives India to have a strong and vibrant relationship with Iran is regional stability. India can also use Iran for an easier route to access these parts of the world not only for trade but for military purpose as well. Add to it the huge gas reserves discovered in Central Asia which gives India all the more reasons for stronger ties. The development of Chabahar Port on the south-‐eastern shore of Iran is being done by India as it is the nearest point to Iran from its own coastline. It can be seen as a giant step towards making Iran an important trade partner. Iran can also hope to get Indian investments in Iran’s untapped gas sector. Strong bilateral ties can also be used to reap mutual benefits in multilateral organizations like WTO and Organisation of Islamic Conference (OIC).With so much at stake, PM Singh’s proposed visit to Iran would be closely followed by many agencies and governments across the world. It definitely promises to open a new chapter in Indo-‐Iran ties.


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Islamic Banking

-‐Shefali Shah (PGDM-‐IB 2011-‐13)

Modern banking was introduced in the 19th century in the Muslim countries. At this time the Muslim countries were politically and economically not very stable and thus major banks set up only in commercial capitals of these countries. The business of these modern banks was restricted to export and import financing and thus not catering to the local masses. The local trading community avoided the “foreign” banks both for nationalistic as well as religious reasons. As time went by, it became difficult to not make use of the commercial banks. Their only involvement would be in terms of current accounts or money transfers as borrowings from or deposits in the bank were strictly avoided so as to keep away from interest, which was prohibited by the Islamic religion.

The practice of these Muslim countries was to have interest free banking, as it was in accordance with the principles of the Shariah (Islamic rulings) and its practical application through the development of Islamic economies. Islamic banking has the same purpose as conventional banking, except that it operates in accordance with the rules of Shariah. Shariah prohibits the payment or acceptance of interest charge for lending and accepting money, as well as carrying out trade and other activities that provide goods or services considered contrary to its principles. The main source of the Shariah is the Quran and the recorded sayings and actions of Prophet Muhammad the Hadith. Many of these principles upon which Islamic banking is based are commonly accepted all over the world, for centuries rather than decades.

It is evident that Islamic Banking was predominantly in the Muslim world through

the practiced Middle Ages, fostering trade and business activities. The origin of modern Islamic banks can be traced back to the very birth of Islam when the Prophet himself acted as an agent for his wife’s trading operations and the concept of interest found very little application in day-‐to-‐day transactions.

Islamic Banks in the 20th Century

In the 1960’s, Muslim thinkers began to explore ways to organize commercial banking on the principles of Islam. The first Islamic interest-‐free bank came into being in Egypt in Mit Ghamr, in 1963. Mit Ghamr was a rural area where people followed Islam and thus did not place their savings in any bank, knowing that interest was forbidden in Islam.

This project was successful as the deposits increased in the period between 1963-‐1966. The bank was cautious and had rejected about 60% of the loan applications and the default ratio of non-‐payment was zero.

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But the project was eventually abandoned for political reasons, but it showed that commercial banking can be organized on an interest-‐free basis also.

Deposit Accounts

All Islamic banks have three kinds of deposit accounts: Current, Savings and Investment.

Current Account: Current or demand deposit accounts are virtually the same as in all conventional banks. A deposit is guaranteed.

Savings Account: Savings deposit accounts operate in different ways. In some banks depositors allow banks to use their money but they obtain a guarantee of getting the full amount back from the bank. Banks adopt several methods of inducing their clients to deposit with them, but no profit is promised. In others, saving accounts are treated as investment accounts but with less stringent conditions as to withdrawals and minimum balance. Capital is not guaranteed but the banks take care to invest money from such accounts in relatively risk free short-‐term projects. As such lower profit rates are expected and that too only on a portion of the average minimum balance on the grounds that a high level of reserves needs to be kept at all times to meet withdrawal demands.

Source: http://www.islamic-‐banking.com

Investment Account: Investment deposits are accepted for a fixed or unlimited period of time and the investors agree in advance to share the profit (or loss) in a given proportion with the bank. Capital is not guaranteed.

Islamic banking is a very young concept and has been accepted not only in the Muslim countries but also in many non-‐Muslim countries. Despite the successful acceptance there are problems. These problems are mainly in the area of financing.

With only minor changes in their practices, Islamic banks can get rid of all their cumbersome, burdensome and sometimes doubtful forms of financing and offer a clean and efficient interest-‐free banking. All the necessary ingredients are already there. The modified system will make use of only two forms of financing -‐-‐ loans with a service charge and participatory financing -‐-‐ both of which are fully accepted by all Muslim writers on the subject.

Such a system will offer an effective banking system where Islamic banking is obligatory and a powerful alternative to conventional banking where both co-‐exist. Additionally, such a system will have no problem in obtaining authorization to operate in non-‐Muslim countries.

Participatory financing is a unique feature of Islamic banking, and can offer responsible financing to socially and economically relevant development projects. This is an additional service Islamic banks offer, over and above the traditional services provided by conventional commercial banks.


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Battling the skies – The success of AirAsia

-‐Prerna Makhijani(PGDM IB 2011-‐13)

Kingfisher airlines just got a taste of the storm brewing up in the Indian aviation skies recently. Their complains range from exorbitant jet-‐fuel taxes, or denial to buy its fuel elsewhere for less to the ban on foreign airlines investing in India's aviation industry. Kingfisher is looking to restructure the company's US$1.3 billion debt load with the support of a strategic investor.

Well even if all the above problems for Kingfisher airlines are resolved there is a lot they could learn from their Malaysian distant cousin – AirAsia.

To begin with, AirAsia has the world’s lowest unit cost of US$ 0.023 per available seat kilometer (the figure being 50% higher for Indian budget carriers) and a passenger break-‐even load factor of 52%. It has hedged 100% of its fuel requirements for the next three years, achieves an aircraft turnaround time of 25 minutes, has a crew productivity level that is triple that of Malaysia Airlines and achieves an average aircraft utilization rate of 13 hours a day for domestic and 17-‐18 hours a day for its long haul flights.

Undoubtedly, this makes AirAsia the largest low-‐fare no-‐frills airline in Asia, with operation in 25 countries and more than 400 destinations.

The Growth Story

Tony Fernandes, CEO of AirAsia bought the company for a token sum of one ringgit equivalent to US$ 0.26 at that time with US$ 11 million worth of debts in 2001. Within a year, Tony turned the fortune of the airlines by launching new routes from its hub and at extremely low promotional prices. Rest is just history.

AirAsia’s business model is very similar to Southwest’s model of quick turnarounds and low-‐cost fares. This has been seen as a “Blue Ocean Strategy” by industry experts. Blue Ocean strategy is all about the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a "Blue Ocean", than by competing head-‐to-‐head with other suppliers for known customers in an existing industry. This is exactly what AirAsia has done for itself, as they have created Asian customers for whom transportation need not be an exotic experience. With the world coming closer, people want to explore the world. Asians particularly want to eat, shop and travel. This is exactly what they are offered by AirAsia; budget travel and lodging.

As for the promoter of the company, Tony, he has his game in place as he talks about his strategy. The company plans to be the largest player in low-‐cost category on home turf and then go on to expand in ASEAN. With its long distance carrier AirAsiaX, it seems to be already eating into China’s and India’s market share.

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AirAsia's LCC model is borrowed from Ryanair and like the Dublin-‐based airline, AirAsia too has an "ancillary income" component in its earnings. So only 7 kg hand baggage is free and the extra charge starts at US$ 10 for up to 15 kg. A preferred seat comes for an extra charge. Ancillary income earned per passenger works out to US$ 1.2. Advantages for passengers are no fuel surcharge (until May 2011) and a 30-‐40 % discount on meal coupons, baggage charges, etc if paid online while booking.

The company also does aggressive branding exercises and public relations. They have invested a lot of money in Manchester United football club and motor racing team Williams. The company believes in the long term return of branding and plans to continue to do so in future as well.

The Future for AirAsia

AirAsiaX, the long-‐haul budget carrier of the group now has expansion plans for the Indian and Chinese skies.

AirAsia entered the Indian market by launching a daily Airbus A-‐330 flight from Delhi to Kuala Lumpur at a basic fare of, hold your breath, just Re 1 for two days (excluding taxes and fuel surcharges). It has embarked on a carpet-‐bombing strategy in India since then. Its costs are far lower than any of the Indian low-‐cost carriers.

They have this cost advantage because they employ just 68 people per aircraft, which is again amongst the lowest in the world. The cabin crew often multitasks to clean the aircraft and handle the boarding. AirAsia is increasingly using wide-‐bodied aircraft which offer more seats and burn less fuel than narrow-‐bodied aircraft -‐ the current favourite of Indian carriers. It runs its own academy to train pilots, unlike Indian carriers who poach from each other and drive up salaries to exorbitant levels in the bargain.

The company also plans to keep the budget traveler happy, by offering Airbus A-‐330 flights from Delhi and Mumbai, 12 premium class seats with flat beds, but the fares are 60 to 70 per cent lower than business class of a full-‐service carrier.

For future, AirAsia plans to connect smaller cities and towns in India by leveraging on under-‐utilized airports and under-‐served routes in the country. They believe in a volume-‐led business and aspire to play the game to perfection with 27 million passengers aboard this year.


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Africa -‐ Continent in Focus -‐Kaustav Ghosh (PGDM-‐IB 2011-‐13)

“KE NAKO” – IT IS TIME

Rewind for a few seconds to the good old days of 90’s and early 2000 -‐the time when Discovery channel used to be narrated in English. A documentary on Africa will generally conjure one common image in everyone’s minds – a huge barren and parched land, a grassland visible far away in the horizon, a cheetah trying to catch its prey or a herd of wild African elephants trying to cross a river. Basically the words “Africa” and “Forest Safari” were spot-‐on synonymous. All that the word Africa meant was wild animals, safari or the Sahara. As far as politics was concerned, Africa was associated JUST with bloody civil wars, pirates (read Somalia) – a view shared not just by the kids but also by most of the adults outside Africa. The only positive thing most would recall knowing about Africa, just 10 years back, would be Nelson Mandela or sometimes, Kofi Annan.

But contrast these with the following information/perception about present Africa.

1) Africa has 80% to 90% of the world’s chromium and platinum deposits.

2) Africa possesses 40% of world’s gold ore deposits.

3) FDI in Africa has increased from $9 billion in 2000 to $16 billion in 2008.

4) Ivory Coast is the world’s largest producer of cocoa.

5) Africa’s collective GDP in 2008 was 1.6 trillion dollars, roughly equal to Brazil or Russia’s

6) 10% of world’s oil reserves are in Africa

Yes, Africa has come a long way from being just a nation of wild animals and place infested with civil wars. In the past decade, growth in Africa has invited much attention by researchers and global leaders all around the world. In a rather eye-‐opening report released by Mckinsey MGI, over the past decade, Africa’s real GDP grew by 4.7% a year, on average—twice the pace of its growth in the 1980s and 1990s. The surge cut across nations and sectors. The continent is among the fastest-‐expanding economic regions today. In fact, Africa and Asia (excluding Japan) were the only continents that grew during the recent global recession. Though Africa’s growth rate slowed to 2% in 2009, it bounced back to nearly 5% in 2010, and in 2011 it is likely to touch 5.2%.

So, is this growth a one-‐off case or does it have any authenticity for sustainability? After all, in the 1970’s when there was an oil boom, the economy did well. After the oil prices went down, Africa was yet again back in doldrums!!

But this time around, internal and not just external (contrary to earlier time) factors are

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driving the growth potential of Africa. Increase in oil prices, from 20$ a barrel to $150 in 2010 and an increase in commodity prices (gold, platinum, minerals, grains and other raw materials) has helped in boosting exports and the economy of Africa. But natural resources have contributed to just 24% of the growth from 2000 to 2008. Majority of the growth has come from wholesale and retail trade, transportation, telecommunication and manufacturing. This has happened because of various factors. Many African countries like Angola and Mozambique, have tried to bring an end to the deadly civil wars creating the much needed political stability important for growth. The number of serious conflicts in Africa declined from an average of 4.8 a year in 1990’s to 2.6 in 2000’s. Also, the governments have tried to strengthen the fiscal condition of economies by bringing down inflation (21% to 8%) and reducing budget deficits (4.8% to 1.9% of GDP) and foreign debt (83% of GDP to 58%). This along with greater disinvestment in PSU’s, reduction of trade barriers and corporate taxes, strengthened regulatory and legal systems has increased investor confidence in the continent and helped leverage greater economies of scale to improve overall competitiveness.

Economically, Africa can’t be understood as a whole. Different regions have differential growth patterns. African countries can be divided into various clusters based on their economic prowess. The first is diversified economies which consist of the most advanced economies like Egypt (discounting the negative impact on its economy due to Jasmine Revolution), Morocco, South Africa and Tunisia. They are characterised by relatively high per capita incomes and stable GDP growth. These economies have established manufacturing and services industry, services having contributed almost 70% of the GDP growth of these regions over past decade.

They are Africa’s biggest consumer markets and hence are ideal places for consumer-‐facing businesses like retail, telecom and banking to base their operations. Walmart struck a $2.4 billion deal to pick up a 51% stake in one of South Africa’s largest retailers, Massmart, which has stores in 13 other African countries. The second type is the oil exporters which unsurprisingly have the highest per capita incomes in lieu of their oil reserves, but are less diversified. Countries like Angola, Nigeria and Algeria have relatively less developed service industry. Political instability is a prime source of concern in these regions. The third type is the transition economies like Ghana, Kenya and Uganda have lower per capita incomes and are agricultural based economies. The penetration of banking, telecom and modern retailing is much lower than it is in the diversified economies, but that offers attractive opportunities. The last type is the pre-‐transition economies which are the poor economies with annual per capita GDP of $350 on average. Congo, Ethiopia and Mali lack basics such as stable government, strong public institutions and sustainable agricultural development.

Opportunities:

Africa’s economic growth is creating significant business opportunities. But these are often overlooked by global companies. If it maintains its long-‐struggled political and macro-‐economic stability, and if the governments there continue their pro-‐business attitude, four groups of industries could typically emerge significantly. These are consumer-‐facing industries, resources, agriculture and infrastructure. Mckinsey estimates that these industries will have a combined GDP of 2.6 trillion dollars in revenue annually by 2020.


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Africa is already one of the most dynamic consumer markets. Many global companies are expanding in Africa – Standard Chartered has presence in 14 countries, Unilever operates in 21 African nations.

Domestic players like Ecobank, MTN, Shoprite and UBA also have pan-‐African operations. Mckinsey has estimated that Africa’s consumers will spend $1.4 trillion in 2020 (assuming the continent grows by 5% a year). As incomes rise and Africa’s consuming households rise in number, spending patternwill shift from consumption of food and beverages to retail banking, telecom, education, healthcare, housing and other goods and services. The opportunities will emerge essentially in the diversified economies, oil exporters and transition economies. By 2020, cities like Alexandria, Cairo, Cape Town, Johannesburg and Lagos will each have consumer spending equivalent to that of Bombay and New Delhi (>$25 bn). Cities like Casablanca, Durban, Khartoum, Pretoria will be the next largest markets with household consumption of each between $15 billion to $25 billion.

Agriculture productivity remains largely untapped in Africa. The continent has 60% of world’s total uncultivable arable land. If it harnesses cultivable land like Brazil did, it can increase production by a significant proportion. Also HYV (high yielding varieties) of crops are less abundant in Africa. Most of the production is of lower-‐value crops such as bulk cereals. If Africa were to improve on these fronts, a green revolution is almost necessary. Such a phenomenon, also called as breadbasket approach, will fuel the growth of upstream input markets (fertilizers) from $8 bn today to $35 bn in 2030. Downstream markets, especially vegetable and fruit processing could grow even faster, from $40 bn to as much as $240bn. Biofuel production like ethanol could be especially important for Africa’s inland oil importing countries, as a substitute for increasingly expensive oil. Africa could become a major supplier of biofuel to Europe.

Africa was always strong in resources. It has been driving its exports on the basis of its abundance of minerals, oil and gas, iron ore and coal. It would continue to grow on these fronts, especially iron-‐ore and oil. Increasing no of global players (China, Australia etc) are investing in the resource extraction business in Africa. In 2008, China National Oil Company struck a $2.7 bn deal for deepwater oil rights in Nigeria. Similar investments have been made in Angola by China. ArcelorMittal has also invested in a $2.2 bn project of iron ore extraction in Senegal. Quite evidently, mining and EPNG business in Africa will offer lucrative benefits in the days to come.

An important key to Africa’s future economic growth in all sectors is its growth in quantity and quality of infrastructure.

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Huge investments are required to achieve this. Even after efforts put by government, an investment of $118bn a year is required to address the backlog to keep pace with economic growth. This gap offers a huge opportunity for banking institutions across world to offer corporate loans to African nations. Since these will be secured by African government, the NPA status of these loans would be low. Also there’s a huge potential for growth of telecom industry in the region. Investment in telecom has been high in the region. This is evident from Bharti’s $10.7bn acquisition of Kuwait based Zain Telecom – a pan African telecom player.

However, tapping Africa as the next future market depends not just upon Africa’s permeable market conditions but also about the right strategies adopted by western and Asian MNCs. A right entry strategy, holistic understanding of traditional distribution network of Africa, training the people with right skill sets and the right PR exercise for cutting through the bureaucratic processes of Africa is equally, if not less, important in determining potential success in Africa.

Africa holds the same potential that China did twenty years ago. A large rural population is moving to the cities, landing jobs with higher incomes, and starting to enjoy discretionary spending. Demand is growing, and foreign direct investment has soared. Just as investing in China poses some political risk, so too does doing business in Africa. Companies must think carefully about the approaches they adopt, but it will definitely be worthwhile. First movers will have the opportunity to leverage on strong local partnerships to capture market share of a PIE which is rather large.

“ Tapping Africa as the next future market depends not just upon Africa’s permeable market condit ions but also about the r ight strategies

adopted by MNCs. “


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.

International Logistics -‐Harneesh G (PGDM-‐IB 2010-‐12)

Transporting into the future.. where is the global logistics services industry headed?

(i) Logistics – an integral part of the value chain

The fundamental value chain of any company as per Michael Porter could be represented as follows (taking into consideration only the primary activities):

The company’s choice of value chain activities is instrumental in delivering value to the customers. Logistics is a key activity in the value chain which could be effectively restructured to enhance the value delivered to the customers.

(ii) Evolution of the global logistics services industry

Globalization, consolidation of markets, technological advancements have driven the growth in the logistics services market. The industry players are incrementally moving away from asset-based services to more knowledge driven approaches.

Customers are looking for “one-stop-shops” that would effectively provide solutions to the complexities in managing their global supply chains.

• 1st party – entirely asset based, highly fragmented, mostly unorganized, specific logistics functional areas addressed, low barriers to entry, inside the organization

• 2nd party – similar to 1st party, multiple logistics functional areas addressed, external to the organization

• 3rd party – they are lean on assets, the informational intensity is higher and more focus is laid on integrating their capabilities

• 4th party – orchestrator of multiple 3rd party logistics providers with a layer of IT

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• 5th party – this is where the future lies, zero asset intensity, entirely knowledge driven, informational intensity ensures highest level of control across the supply chain

(iii) Sustainable competitive advantage in logistics services

Competitive advantage in today’s logistics services industry takes a global dimension. There is no clear cut basis for competition either on the basis of low cost leadership or differentiation. There are several intermediate positions which need to be judiciously explored. The industry player has to work towards delivering a superior mix of cost advantage as well as differentiation in comparison to the competitors to compete globally. The bottomline would be to drive the widest possible wedge between cost and customer willingness to pay.

As per the activity systems view, though the customer needs are similar the set of activities performed to reach them differs. A unique mix of activities of activities with the highest degree of fit would be the optimal configuration for maximum competitive advantage.

The core competencies would be the execution capabilities across the different logistics functional areas with a unique mix of activities. The core products would be the logistics services that are tailor made to individual customer needs leveraging on these execution capabilities.

The key resources of a logistics service provider are the employees that drive the knowledge expertise, the degree of technology enablement it can offer across the supply chain and the relationships in terms of the strategic partnership with the different asset providers. These resources contribute to competitive advantage by their virtue of inimitability (path dependency and strategic complexity), approbriability and competitive superiority (distinctive competencies).

(iv) Driving down costs using logistics

Traditionally organizations have been concentrating on improving operational efficiencies and looking at ways of driving down the overheads. There has been very little focus on optimization of logistics. The following factors have made it imperative for organizations to take a second look at logistics

1) Increasing logistical complexity and proportionate costs 2) Need to track and trace material movement across the supply chain

In recent times logistics has been the focal point in strategy formulation to enhance the value delivered to the customers. The below mentioned figures show the current market share of 3PL and the current logistical costs as a percentage of GDP in global economies’ leading growth engines India and China.


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Country Logistics cost as a % of GDP

Share of 3PL

India 13.0% - 14.0% Less than 10% China 18.0% Less than 10% Source: Deloitte Report - Logistics and Infrastructure Exploring Opportunities

The study by Deloitte has established an inverse relationship between the share of 3PL service providers and the total logistics costs as a percentage of GDP. Given the incremental pressures on margins for Oil and Gas E&P and marketing companies there is a huge premium on driving down costs. Logistics classically being known as a cost centre provides tremendous opportunity for driving down costs and improving value delivered to the customers.

(v) Derisking the supply chain

One of the fundamental imperatives of logistics is having the right material in the right quantity at the right time at the right place for the right price in the right condition to the right customer. Ensuring the same also to a great extent depends on the availability of the right information across the supply chain. The global dimension to logistics compounds the level of risks entailed by the virtue of the 2Ds and 2Us (distance, diversity, uncertainty, unavoidability). The plethora of risks identified could be broadly classified as:

1. Political risks (systemic, distributive, procedural, catastrophic) 2. Demurrage implications 3. Inventory stock-outs 4. Multimodal challenges (transit damages and losses) 5. Environmental concerns

These risks have a pivotal role to play in influencing the value delivered to the customers. Henceforth they would have to be proactively factored at every step of logistics execution.

(vi) What lies ahead

With the incremental focus on driving down logistics costs and rising stakes in the view of competition, the COO of every organization is in the limelight. Industry gurus contend that we are on the verge of a paradigm shift – The decade gone by saw the rise of CFOs into the mantle of CEOs. The COO is the new CEO!

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Faculty Speak: Issue of GDR/ADR by Indian companies-‐ Recent Trends Prof. B. Bhatia

Finance Faculty

A significant development in the internationalization of Indian financial markets has been the permission accorded to Indian companies, in the initial years of economic reforms, to raise funds from international financial markets through the issue of foreign currency convertible bonds (FCCBs) and also the issue of shares under GDR/ADR and permitting the foreign institutional investors(FIIs) to participate in the secondary market. In 2004 the government also allowed the foreign companies to raise funds in the Indian primary market through selling securities under the Indian Depository receipts (IDRs).

GDR/ADR/IDR are acronyms refer to a family of instruments called Depository Receipts .They are receipts for shares of a foreign company , often listed in a stock exchange that is not easily accessible to non-‐resident investors . The underlying shares remain in safe custody with a bank in the issuer’s home market, but the receipt may be traded elsewhere. Dividends payments are usually in the US dollars and depository receipts can be issued with or without the voting rights of the underlying stock. Depository receipts are negotiable instruments issued to investors by an

authorized depository, normally a US Depository or a bank in lieu of shares of the foreign company. The question arises as to why do Indian companies go through the depository route? Indian companies are prohibited by law from listing rupee-‐denominated shares directly in foreign stock markets. Therefore they issue such shares to a depository which has an office in India. These shares remain in India with a custodian. Against the underlying shares, the depository issues dollar denominated receipts to the foreign investors. The foreign investors can then sell these receipts in the foreign stock exchange or back to the depositor and get delivery of the underlying rupee denominated shares which can then be sold in Indian markets. ADR’s are listed on an American stock exchange. The issue process is governed by American laws and Securities and Exchange Commission (SEC).A listing in American stock exchange involves adhering to very stringent disclosure and accounting norms. The accounts of the company have to be represented according to US GAAP or Generally Accepted Accounting Principles


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Issuer

Company

Underlining

Shares

Custodian

Local Bank

Depository

Bank Listing Foreign Stock

Exchange

Money

Foreign

Investors

Indian companies entered in the international market in 1992 with the first GDR issue by Reliance Industries on London stock Exchange. In fact the first ADR was issued in 1927 by J.P Morgan for British Retail Selfridge. However the GDR markets witnessed a lull till 1993 end in the wake the securities scam and the consequent fall in the domestic market. With the successful ADR issue by Infosys Technologies during 1999 the GDR market gained momentum. Till October 2011 nearly 240 companies have raised over $26 billion from the international markets. This process eases the availability of foreign exchange at lower cost and at lower risk. The volume of the funds rose this way varied widely from year to year. The size of ADR/GDR lacked uniformity and in

some cases the companies have issued GDR to over 130 or 200 times of the size of their equity capital.

The laissez-‐faire approach that helped Indian companies to raise over $ 26 billion since 1992 when the government first opened up this route is about to change after Securities market regulator SEBI recently punished a few companies that had issued ADR/GDR and manipulated local stock prices.

SEBI’s Integrated Market Surveillance system (IMSS) noticed unusually large orders as well as large-‐scale off-‐market transactions in a few stocks between January 2009 and May 2010.

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An investigation by SEBI revealed that a merchant banking firm Pan Asia Advisors ltd and its founder and owner Arun Panchoriya and other entities worked closely with him. The regulators investigation revealed that Pan Asia arranged GDR issues for a few firms in 2009 and in each of these issues the proceeds of GDR was held by European American investment Bank AG Austria (Euram Bank). Euram is linked to Panchoriya. Its website lists one of its two offices as Euram Bank Asia Ltd in Dubai. Sebi discovered this as a joint venture between Euram and Pan Asia , and Panchoriya and his brother are directors of Euram Bank Asia. SEBI’s further investigation revealed that each issue of GDR was almost higher than the existing paid-‐up capital of these companies. In one case Ashai Infrastructure and Projects Ltd., the GDR issue was eight times the total equity of the company prior to the issue of GDR. Its paid up capital went up from 37 million shares to 336 million shares after the issue of GDR.

The initial subscribers to these GDR were almost the same set of investors. After the GDR issue, the investors would cancel and convert them into Indian shares and then sell them in the Indian markets SEBI further observed that large portion of these sales were in the form of synchronized trades with the

same set of stock-‐brokers based in India and even the brokers were found to be connected to Panchoriya and Pan Asia. Given the fact that the several little known companies have raised the funds through GDR the regulator might reverse the liberalized policy in this regard in future. SEBI probe does indicate that there are enough issue arrangers who do not care about the quality of issuing companies and who pocket hefty fees without carrying out proper due diligence. It is understood that regulators are looking into these loopholes and are planning to impose stringent conditions on Indian companies issuing GDRs.

Indian Depository Receipts (IDR) were introduced in 2004 based on the concept similar to that of GDR/ADR with the objective of providing a platform to foreign companies to directly raise capital in India. So far only one foreign company namely Standard Chartered Bank PLC was the first foreign company to be listed in the Indian stock exchanges through IDR route. However factors like lack of clarity on capital gain tax, voting rights, non-‐fundability and barring of insurance companies `have made issuing IDR’s unattractive.


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Alumni Speak Mr. Mihir Deshpande PGDM-‐IB, 2007-‐2009 Batch

Profile

Mr. Deshpande is currently the Assistant Manager; Business Development & New Product Planning at Johnson & Johnson. He has also been associated with Merck Sharp & Dohme, wherein he worked in the Market Research and Analytics division as an assistant manager. He had also been an active member of the “International Business Society” at SIMSR.

Interview What were your expectations when you joined PGDM IB, SIMSR in 2007? Which of those expectations, you think, have been fulfilled in these 2.5 years? I expected an MBA course to assist me build my career to its fullest potential, on a fast-‐track, and access to network of MBA students, distinguished faculty, alumni, and business leaders. PGDM IB course has helped me to realize these expectations. Over the last 2.5 years, how have you leveraged your learning pertaining to IB? In what ways has PGDM IB programme helped you to rise up the corporate ladder? I have been extremely benefitted from the entire course content! In my current role

(New Product Planning) I am responsible for evaluating products from J&J pipeline and ensuring its launch in India. It involves preparing business cases for the country team (market analysis, attractiveness, and competitive landscape), decision on regulatory timelines (country attractiveness), financials (sourcing decisions, pricing strategy, profits) etc.I have been fortunate enough to have received excellent education from IB course that has put me in good stead for such roles.

Looking back when you were a student, what do you feel (skills, capabilities, subjects) you should have focused on while you were a student at SIMSR-‐PGDM IB? During my college days, I have been biased towards certain subjects and not concentrating on all. I feel I should have concentrated on all subjects with similar rigour.

What would you suggest for the current PGDM-‐IB batches (2010-‐12, 2011-‐13) in order to improve their long-‐term career prospects? MBA is means to an end! Try to identify your strengths and areas of interest! Once identified, tap career opportunities that synchronise with your interests.

What capabilities and skills should PGDM-‐IB students develop while at SIMSR? We have an extremely robust course content supported by one of the best faculty members. Focus on Case-‐study based learning; increase as much industry interaction as possible.

What changes would you like to see in the content and format of e-‐Globuzz? e-‐Globuzz is a great initiative! Keep up the good work. -‐ Gurpreet Kaur (PGDM-‐IB 2011-‐13)

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Highlights of International Business Conference IBS @ SIMSR has been organizing interactions over the last two years with senior company executives and government officials for SIMSR students. It was felt that half day event with several distinguished speakers with diverse backgrounds would greatly help enrich International Business perspective of students of both 1st and 2nd year. Hence an international business conference was organized as a half day event.

This conference was held on 24th September 2011 and was well attended not only by SIMSR students but also our alumni.

Program for International Business Conference on Saturday, 24th September, 2011

Speaker Designation Organization Topic

Mr. R. Rajagopalan General Manager, Foreign Exchange Department

Reserve Bank of India, Mumbai

Foreign Exchange Management-‐ Indian Experience and FEMA

Mr. Makarand Teje Vice President Capgemini India Pvt. Ltd., Mumbai

Challenges and Trends in Global IT Consulting

Mr. Tom Vermeulen Trade & Investment

Commissioner of Flanders, Belgium

Consulate-‐ General of Belgium, Mumbai

India-‐EU Trade Relations and Business Opportunities for Indian Companies in Europe

particularly Belgium

Mr. Satish Deshpande Divisional Manager, International Business

Division

Raychem RPG Pvt Ltd, Mumbai

Global Competitiveness through Organizational Excellence particularly in

Manufacturing

Mr Tejasvi Sharma General Manager, Global Sourcing (TB and API)

Sandoz India Pvt. Ltd, Mumbai

Global Generics Today and Beyond


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Topic: Foreign Exchange Management Act – Indian Experience of FEMA

Mr. Rajagopalan started with the history of why and how foreign exchange was regulated in India from the pre-‐independence days. He covered decade wise, the major changes in Govt. of India’s thinking and the evolving role of RBI. He dwelt in depth on the Foreign Exchange Regulation Act (FERA), 1973, its highlights and why it was later changed to FEMA. He concluded with implications of FEMA for India based companies and MNEs operating in India.

Topic: Challenges and Trends in Global IT Consulting

Mr. Teje started with the International Business landscape for IT software and IT consulting sector and the role of MNEs like Capgemini in shaping the landscape. Capgemini being a France based MNE needs to adjust and adapt to the culture of more than 100 countries in which it operates. He dwelt at length on how Capgemini deals with this culture based challenges both through its sensitization of IT professionals and also through job rotation across countries for its key managers.

Mr. Makarand Teje – Vice President – Capgemini India Pvt. Ltd., Mumbai

Topic: India – EU Trade Relations and Business Opportunities for Indian Companies in Europe

particularly Belgium

Mr. Vermeulen began with the history of economic co-‐operation through trade and cross border investments between Belgium and India. He focused on complementary capabilities and resources of Belgium and India and how they could be leveraged by companies based in these countries for building their International Business in European Union (EU).

Mr. R. Rajagopalan – G.M, Foreign Exchange Dept. Reserve Bank of India (RBI), Mumbai

Mr. Tom Vermeulen – Trade & Investment Commissioner of Flanders, Belgium – Consulate

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Topic: Global Competitiveness through Organizational Excellence particularly in

Manufacturing

Mr. Deshpande developed a concept of global competitiveness of companies in the oil drilling accessories industry like Raychem and the importance of excellence in manufacturing to achieve sustainable global competitive advantage. He explained how the companies are leveraging factor conditions in various countries to build and sustain their global competitiveness through excellence in manufacturing. Mr. Satish Deshpande – Divisional Manager,

International Business Division– Raychem

Topic: Global Generics Today and Beyond

Mr. Sharma spoke at length about the emerging international business landscape of Pharmaceutical industry with focus on Generics. He elaborated why Generics are becoming increasingly important in the pharmaceutical industry and outlined strategies for the pharmaceutical companies to increase global market share through greater focus on Generic pharmaceuticals. Mr. Tejasvi Sharma– General Manager, Global

Sourcing (TB and API) – Sandoz India Pvt. Ltd., Mumbai


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Mr. Tarun Sharma, Assistant General Manager, Credit Lines Group, Export Import (EXIM) Bank of India gave a very insightful presentation on the role of EXIM Bank of India, the importance of credit lines given by EXIM Bank to various countries and the linkages between the World Bank and EXIM Bank. Mr. Sharma having served for more than two years in the World Bank in Washington D.C. on deputation from EXIM Bank also spoke at length about the role and relevance of World Bank in the growth of international trade and cross border investments including project exports.

Both these sessions were very enlightening for students as well as faculty. The guest speakers also eminently answered questions from the audience.

Highlights of Samavesh’11

The theme this year for SIMSR’s prestigious two-‐day event covering specializations like International Business, Human Resources and operations and functional areas such as Information Technology and Entrepreneurship was ‘India reaching new heights’. The International Business session, the opening session of Samavesh’11 focused on ‘Emerging trends in International Trade and Cross Border Investments’.

The session commenced with Mr. Rohit Pandya, General Manager, Export Credit Guarantee Corporation of India Ltd. (ECGC) who gave an overview of the ‘Challenges of credit management in the aftermath of the global crisis’. Mr. Pandya also dwelt on the implications of overall risk management for companies with significant multinational operations.

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For any suggestions contact us at

K.J.Somaiya Institute Of Management Studies and Research

Somaiya Vidyavihar ( E )

Mumbai-400077

e-mail : [email protected]

e globuz z vol ii issue ii

Business

anniversary issue of

dec11 eglobuzz

eglobuzz vol

lessons steve jobs

late steve jobs

issue of gdradr

eglobuzz team

steve jobstaming