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Friday, December 29, 2006

IIPM Publication :- Lower than the lowest of all...

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Air Sahara is taking the low price route to register market share gains, but it needs to do much more
Eleven months after Air Sahara had agreed to a sell-off bid to Naresh Goyal’s Jet Airways, and six months after the Rs.23 billion deal finally fell apart, the Subroto Roy-owned Air Sahara seems to be stopping at nothing to make up for the damage to its business as well as to its image. The airline recently announced on December 4, that it is currently in talks for a tie up with the upcoming low cost airline Indus Air, where it would provide operational support to Indus Air. For once, the company is also standing out in the face of all competition, as it is decidedly going against the current price fare hikes in the industry. And in the process, it has in fact pipped even the leaders of the price game to the proverbial post!

On one hand, even low-cost carriers have agreed to apply air congestion surcharge of Rs.150 per ticket (in addition to the Rs.750 per ticket ATF surcharge). Au contraire, Air Sahara has introduced a 30-day apex scheme (known as ‘Steal-a-seat’ scheme) on quite a few of the key routes which include Mumbai, Delhi, Hyderabad, Bangalore, Goa, Kolkata, Hyderabad and Chennai. The scheme will offer air travel services during the first three months of 2007 at prices which will be around 80-90% lower than normal carrier fares and 25-30% below what even the low-cost carriers would be charging on these very routes. Capt. G. R. Gopinath, MD, Air Deccan opines, “The economics is simple. Our costs are half of those of a scheduled airline. We will continue to sell tickets at a cost plus; if someone wants to sell at a lower price, he is welcome...” And Air Sahara (not that it needs an express invitation from the competition!), has clearly made up its mind to take up the challenge.

And while this is clearly a strategy to revive its frail market share which today stands at just 8.8% (as compared to a healthy 14% in December last year), this tactic by Air Sahara is certainly not giving its financials a shot in the arm for now. Looking at the simple cost plus premium relationship, this ploy looks quite misplaced but consider that even today, Air Sahara operates at a capacity of just 30-35%. Hence even if it sells tickets at prices lower than its cost, it still makes economic sense as it only means added revenues through much anticipated augmentation in sales. Alok Sharma, President, Air Sahara, asserts thus, “The discount is not being borne at the cost of profitability. The airline has set (for itself) a decent target of revenue generation...”

However, one does wonder how compromising on margins at this juncture was needed, given that the domestic aviation industry is already entering a peak season and excess capacity will hardly be the topic of discussion in corporate boardrooms! It will surely entice a lot of customers to fl y with Air Sahara considering that the other airlines have increased fares simultaneously. Is this a move strong enough to guarantee that the carrier gets some grip over the growing aviation industry?

As has been the case with the US aviation industry, low cost airlines in India too have been shedding a lot of ink; red ink that is. It really needs no rocket science to understand that going ballistic on a low price strategy in isolation, will not be the key to take Air Sahara back to those golden days, although it could surely lead to some short term market share gains. Rather than jumping on the bandwagon of Air Deccan, Go Air et al, Air Sahara needs to create more sustainable differentiators that will firmly entrench its position in the mindset of customers. The company has already borne the brunt of one major debacle with the failed Jet Airways deal. Certainly it would not want to come face to face with another one anytime soon.

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Source :
IIPM Editorial, 2006

An
IIPM and Malay Chaudhuri – Arindam Chaudhuri Initiative

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Saturday, December 16, 2006

IIPM Press Release :- Ji Subhash Zee!

IIPM PUBLICATION

Subhash Chandra has emerged as India’s very own media magnate

They call him the ‘Media Czar’ but we like to call him the ‘Media Crusader’. And not without reason! Be it launching the first private TV channel (Zee TV) or launching DTH service (Dish TV), a cable network (Siti Cable), amusement park (Essel World), Chandra ventured into areas where no one had ever dared to step and created a market for himself and subsequently for others too. After all, tying up with the global media magnate Rupert Murdoch and then taking on his Star Network is no mean feat. Despite being battered by competition and facing steep lows, Subhash Chandra always manages to bounce back. The year 2006 has been a momentous year for this media mogul, as Zee TV traced its way up the TRP charts and Chandra created waves by buying a 50% stake in Ten Sports.

Looking at the empire Chandra has built over the years, many would be surprised to know that he hails from a small town of Hissar in Haryana and a Class 12 dropout who started on his own as a young lad of 19. From a cotton seed trader to becoming the small screen king, Chandra has come a long way. And the recent restructuring of his media business, Zee Telefilms into four separate entities – Zee News Ltd., Siti Cable Network Ltd., Wire and Wireless (India) Ltd. & DTH is being seen as a move to create more value for the shareholders.

He has the staunch support of his brothers Laxmi Goel (handles Zee News Ltd.) & Jawahar Goel (involved with cable & DTH businesses). The involvement of Chandra’s son, Puneet Goenka (Director, Zee Telefilms) in Zee Telefilms has enabled a turnaround in the company. Watch out for more backlashes from this media crusader in the coming days!

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Source :
IIPM Editorial, 2006,

Dean of IIPM :- Professor Arindam Chaudhuri (Renowned Management Guru and Economist)

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Monday, December 11, 2006

IIPM : EDITORIAL & RESEARCH

Volume 2 Issue XI, 1 December-14 December 2006
EDITORIAL & RESEARCH
EDITOR-IN-CHIEF:
Professor Arindam Chaudhuri (Renowned Management Guru and Economist)
EDITOR: A. Sandeep
EXECUTIVE EDITOR: Sutanu Guru
EDITOR ECONOMIC AFFAIRS: Prasoon Majumdar
FEATURES EDITOR: Prashanto Banerji
EDITOR INTERNATIONAL AFFAIRS: Siddharth Nambiar
EDITOR POLITICAL AFFAIRS: Sharad Gupta
DEPUTY EDITOR: Virat Bahri
SENIOR EDITOR: Mridu Singh Jhala
ASSOCIATE EDITOR POLICY: Vijay Simha
ASSOCIATE EDITOR ECONOMIC AFFAIRS: M. N. V. V. K. Chaitanya
ASSISTANT EDITORS: Vareen Gadhoke, Steven Philip Warner,
Indira Parthasarathy, Asif Ahmed, Bikram Kesari Jena, Pathikrit Payne

SPECIAL CORRESPONDENTS: Anu Gulmohar, Deepak Patra

CEO:
Abhimanyu Ghosh

CHIEF CONSULTING EDITOR: Malay Chaudhuri

CORRESPONDENTS:
Pooja Priyadarshini, Niharika Patra, Sreoshi Ghose, Sunanda Roy,
Angshuman Paul, Karan Mehrishi, Manish K. Pandey, Siddharth Nahata,
Devdeep Singh, Kumar Anuj, R. Prasad, Surabhi Aggarwal, Kalyan Upadhyay

COPY DESK:
N
eha Gupta

RESEARCH:
Nidhi Sharma, Debashish Majumdar
Karan Karayi, Venus Kuiya

EDITORIAL COORDINATORS: Akansha Pradhan, Meena Shukal

DESIGN & PRODUCTION
DESIGN DIRECTOR:
Satyajit Datta
ASSOCIATE ART DIRECTOR: Manish Raghav
ASSISTANT ART DIRECTOR: Chetan Singh
SENIOR DESIGNERS: Kapil Vashist, Siddharth Kapil,
Rajesh Chawla, Dinesh Saini,
DESIGNERS: Jaya Ray, Priyankar Bhargava,
Vikram Malik, Alpana Aditiya
GRAPHIC EDITOR: Kaushal Shrivastava
SENIOR INFOGRAPHIST: Swami Chaitanya Raj
PRODUCTION MANAGER: Gurudas Mallik Thakur
PRODUCTION OFFICER: Udayan Mandal
PRODUCTION SUPERVISOR: Digember Singh Chauhan
PRODUCTION COORDINATOR: Remesh Narayan

PHOTOGRAPHY
CHIEF PHOTOGRAPHER: Shivay Bhandari
PHOTOGRAPHERS: Teeke Tanwar, Sanjay Sharma
Shyam Prasad, B. K. Ramesh, Sujan Singh
PHOTO RESEARCHER: Varun Pal Singh, Sandeep Wadhwa

GROUP MARKETING HEAD
Rajat Thareja

MARKETING & CIRCULATION
CHIEF MANAGER MARKETING & DISTRIBUTION: Surbhi Pandit Nangia
VICE PRESIDENT MARKETING SOUTH: Debojit Chaudhuri
ASSOCIATE VICE PRESIDENT SALES: Gaurav Sachdeo
GM SALES: Karni Singh Jhala
DGM BRAND: Swati Sharma
REGIONAL MANAGER WEST: Namit Sharma
SENIOR MANAGER EAST: Bhaskar Mojumder
MARKETING AND SALES: Amar Singh Cheema, Anjana Singh
Saurabh Kesharwani, Sachin Raina,
Gaurav Dhawan, Ankur Kalia
Mumbai: Kaushik Das, Saimik Sen
Bangalore: Sourish Ghosh, Mark Rahmi Lyngdoh,
Sophia Peters, Naveen
Chennai: Vijay,
Kolkata: Nandini Pal, Sanghamitra Chowdhury, Sourya Gooptu,
Hyderabad: Gaurav Chandra
GENERAL MANAGER CIRCULATION: Narendra Budhiraja
REGIONAL CIRCULATION MANAGER NORTH: Yogesh Shriwastava

CIRCULATION DEPARTMENT
Bhupender Singh Bisht, Kapil Kaushik, Rajeev Nayan Sinha,
Ballal, C. Shiva Kumar, K.M. Puttaiah, B.S. Pandey, Shreemanta,
Gaganpreet, Arindam Das

B&E ONLINE
Manohar G. Lazarus, Ranjit Singh
__________________________________________________

Printed and Published by Ashok Bose on behalf of Planman Media Pvt. Ltd.
Published from : 9, First Floor, SCO-34, Sector-11, Panchkula - 134 112 (Haryana)
Printed at : M. P. Printers, B-220, Phase-II, NOIDA-201 305,
Editor: A. Sandeep
For advertisement, subscription, feedback and other queries write to
publisher@businessandeconomy.org
Exclusively Distributed by India Book House Pvt. Ltd. (IBH) at
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For editorial queries: editor@businessandeconomy.org
Editorial Offi ce : C-10, Qutub Institutional Area, New Delhi 110 016
Visit us at: www.businessandeconomy.org

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Tuesday, December 05, 2006

Making a mark in all segments – that’s the real ‘Joshi style’ for you, totally unedited!

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There are just a handful apparel companies in India that are wellknown along the length and breadth of the country. Among these famous few, S.Kumars definitely comes to count. It is one of the few textile companies that has expanded operations radically and has clearly become a household name across various cities. 4Ps B&M team met Tarun Joshi, CEO, Brand House Retailing (a subsidiary of S.Kumars which owns brands like Reid & Taylor and Escada) and has created a fashion statement of its own. But don’t jump to the conclusion that he is a mere bon-ton icon, as his passion for polo confirms his sporty attitude. Keeping his chief sophistication at bay, dressed in a debonair brown suit, he cheered for his favourite team on Jaipur pologround in New Delhi with youthful enthusiasm of a schoolboy.

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Source :
IIPM Editorial, 2006, Professor Arindam Chaudhuri's (Renowned Management Guru and Economist) Initiative


Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.