IIPM Admission

Friday, January 29, 2010

South Indian Bank Ltd.


IIPM conceptualized the grand final of Dare ‘10 — the most prestigious of international B-school student quizzes


Entry Price:
Rs.118
Target Price: Rs.135
EPS: 20.3 (FY10E)
P/E: 5.8 (FY10E)
Time Duration: One year
Rationale: South Indian Bank (SIB) is one of the better-performing old private sector banks. Largely concentrated in the semi-urban areas of the Southern states of India, SIB’s profitable, cost-efficient and technologically up-to-date network constitutes a reasonably attractive standalone franchise. The Bank’s Deposit franchise includes a niche NRI customer base that contributes a meaningful 17% of deposits and gives it a distinguishing cost advantage over several of its peers. At the same time, the Bank is trading at the cheapest valuations among peers.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Tuesday, January 19, 2010

GOT 5.2 MN. IN THE BAG

Virgin Mobile USA acquisition may not be a game changer for Sprint unless...

If you were a customer of Virgin Mobile in the US, congratulations. For you have just got owned! Soon, you will be a Sprint subscriber, without any effort to change operators. Mobile number portability has come to unprecedented levels, hasn’t it?

Not exactly. Your status change (even if unsolicited) has more to do with Sprint Nextel (third largest service provider in the US) deciding to go ahead and acquire Virgin Mobile’s operations in the country for $688 million; which will substantially enhance its market presence. But can this fix the numerous loopholes that have sprung up in Sprint over the years? Or will this prove to be another Nextel in the making?

The last year and half has been extremely challenging for this operator as it witnessed a massive churn in its subscribers. According to analysts, the reason for Sprint Nextel’s current day problem was the acquisition of Nextel in the year 2005. Post that acquisition, there have been numerous complaints in regards to its customer service as well as quality of network and that has resulted in many customers churning out of its network; most of these customers were the lucrative postpaid customers. In the last quarter about 9,91,000 postpaid customers ‘bailed out’. Additionally, Sprint had also posted a net loss to the tunes of $384 million in that quarter.

However, since the dawn of 2009, the company has been working to rebuild the lost trust. One of the breakthrough steps was entering in an exclusive tie up with Palm for their Palm Pre handset, which had recorded impressive sales in its opening weekend and continues to go strong. Dan Hesse, CEO, Sprint Nextel, said, “The widespread visibility surrounding our record-breaking June launch of the Palm Pre handset gave us the unprecedented opportunity to showcase these improvements to customers as ‘a new Sprint.” The company also had the good fortune of its 3G network being described by PC World magazine as the most reliable among competitors.

So, will this acquisition help Sprint Nextel in getting any better than its competitors, namely – AT&T and Verizon Wireless? Well for starters, Virgin Mobile USA has primarily prepaid customers and according to Sprint Nextel its acquisition is a part of the company’s effort to expand its prepaid cellphone business as it struggles to compete against its mighty rivals. Virgin Mobile USA, too, had acquired Helio last year, (another prepaid operator), so it would be the combination of two that Sprint would be picking up.

However, the addition of another 5.2 million subscribers may not take it any closer to its rivals. “What goes in the favour for Sprint Nextel is that Virgin Mobile USA is one of its customers; so this acquisition will be very easy, in fact could be invisible to the customer, which is good for the customer,” reasons Jeff Kagan, global telecom analyst. Virgin Mobile USA has been operating through a Mobile Virtual Network Operator route in the US market and has mostly focused on the youth market and has been successful in this regard. The devices it offers, too, are more basic; offering features like telephone, music and messaging in sync with their target (youth) market. They have, however, failed to gain trust and acceptance of older customers. As this UK brand was operating on Sprint’s network, the synergies would be significant. But they are playing quite a gamble by betting on the future of the prepaid market, which has not been as good a money spinner as postpaid in the US for years.

So, Sprint must ensure that it also simultaneously reduces the churn in its postpaid business through more exclusive handset deals and better services to customers. Unless that happens, the company can’t hope to sprint very far. Hurray to age old mobile number portability!

Surbhi Chawla

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
Follow Arindam Chaudhuri on Twitter
Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
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Friday, January 15, 2010

Xxx Like father... Like Sam Xxxx!


Sex education


A life of royalty Vs sexuality

In a rambunctious commentary, the vociferous Ratan Lal Bhagat of 4Ps B&M gives a bare-all-dare-all sectoral update on where do America’s so-called erstwhile best stand today?

From being the world’s first superpower economy to having an autocratic say in every aspect of global concern, the capitalist United States of America has stamped its authority in various spheres for decades. And the rogue mob of US ‘Fortune’ (500) hunters had held the yankee brand in good stead, topping global rankings time and again for ages. Well started, surely. But US Inc. seems to have taken the ‘well started is half finished’ ideology quite literally one guesses – at least if one were to see the corporate mayhem post the recessionary Wall Street crash. Uncle Sam Inc. had to go through the pain of being a helpless witness to the death of its corporate legends; Lehman Brothers, Merrill Lynch, JP Morgan, AIG, et al. Not only did 52 banks shut shops since the collapse, but now to add to the predicament, many existing American conglomerate giants are slowly but surely losing what previously was unquestionable leadership in various segments. Here’s the latest run-through!

At the top of the news block comes the Anglo-Dutch oil and energy behemoth Royal Dutch Shell PLC. For years, ExxonMobil and Walmart used to lead the Fortune 500 list, fighting for the number one or two position. This year presented a coup of sorts, with Royal Dutch Shell jumping to the coveted number one position, with sales at a mind numbing $458 billion! The sorry financial state of the ‘Big Three or Detroit Three’ automakers viz. GM, Ford and Chrysler is no secret. The ‘Asian Four’ (Toyota, Hyundai, Honda and Nissan) have all raced well ahead of American automakers. In the same pitch, the France based aircraft manufacturer Airbus has become the market leader in its industry by grabbing a clear 57% of the market pie from Boeing [Christian Scherer, Executive Vice President-Head of Airbus Strategy and future programmes told 4Ps B&M, “Over the last decade, we have gained market leadership from 20% to the 50% plus market shares now.”].

Stephen Byrne, Director of Strategy at Diffusion tells us, “You only have to look at the downfall of Lehman Brothers and GM to see how much they have tarnished the reputations and performance of many other companies...” Then what have been the non-American companies doing that Yankee spirit seems to be missing? Malcolm Gladwell writes in his New York Times Bestseller, Outliers (#1 on NYT right now!) that outstanding mastery of any field/task can be achieved basically if one practises that particular task for 10,000 hours! Amusingly, in the case of US firms, it’s just that they’ve been practising the wrong task for 10,000 hours! Diffusion tells us, “You. Royal Dutch had planned out a restructuring plan much before the worst of the slowdown hit. Not many would know that the multinational petroleum company’s upstream activities are actually managed and controlled under three separate organisations viz exploration & production, gas & power, and oil sands. And even this is now being logically trimmed down to two entities. “This new structure will increase accountability in the company, and improve our performance on delivering new projects and developing new technologies,” explains Peter Voser, the newly appointed CEO of Royal Dutch.

Similarly, one of the basic reasons for the failure of century old American car manufacturers is the fact that they have been reluctant to diversify their product portfolio (and stuck to the tough truck American ‘dream’). Compare this to – as Masahiro Takedagawa, President and CEO of Honda Siel Cars proposes to us – their Asian peers, who’ve not only diversified into various car offerings (for example Toyota, from the fuel efficient Prius to the luxury dream Lexus), but also into other products ranges (from bikes that have been there since the start in many Asian firms’ cases, to even robots and flying

jets). To add to the mis-Fortune list is the fact that many American firms regularly play the ‘vapourware’ trumpet; promising to offer products that either never reach or reach too late – Boeing’s much hyped 787 Dreamliner being a screaming example.

But most critically, US firms have never seen the potential that lies in emerging markets like China and India. If the past was evidence, the present is the final nail, as even now, there have been no talks about increasing investments or reach within these markets. Look around emerging markets and names like Daiichi Sankyo, Hyundai, Suzuki will resound profitably time and again Diffusion tells us, “You Diffusion tells us, “You Diffusion tells us.

Ratan Lal Bhagat

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Detail of all IIPM branches
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Thursday, January 14, 2010

Indian universities and higher education institutes seem to be caught in a time warp teaching things


IIPM BBA MBA Institute: Student Notice Board

As the world moves ahead at a maddening pace, many major Indian universities and higher education institutes seem to be caught in a time warp'teaching things that became irrelevant ages ago


Subhash Kumar, an MCA student at Maulana Azad National Institute of Technology, Bhopal, woke up to the bitter reality that the academic degree for which he had sweated out day and night, was not going to be of much help, as soon as he got his first job as a programmer in a software company. The huge disconnect between what is being taught and what is required in the industry made life difficult for him and though he managed to save his job, he got average annual performance review.

He did not know Java, a computer language, because it wasn't included in his curriculum. This despite the fact that three-fourth of programming in the software industry in India is done in Java. 'I fail to understand the logic behind teaching things such as neural network or compiler designing when a minuscule percentage of students work on these domains. On the other hand, programming languages are not taught in the colleges while 95 percent of jobs in the market demand these skills,' says a discomfited Subhash. Tribhuvan Kumar echoes similar sentiments. 'How many computer science teachers in these reputed colleges even know the name of technologies such as Hybernet and SAP?'

Prateek Kumar, a law student at ICFAI law school says, 'We are taught everything from criminal procedure code to business and corporate law. It means there are more than 600 sections that have to be finished in just 44 classes. The teacher is able to explain only 250 to 300 sections.' The students are left to fend for themselves for the rest of the sections. For smaller law colleges in the country, it is very difficult to subscribe to those online sites which provide latest live case studies and judgments. 'Law is an evolving field and many new subjects are coming up such as Cyber Law, Environmental Law etc. There are very few teachers who can properly teach these subjects. Very few law colleges in the country have mock courts to teach proper way of pleading in a case,' adds Kumar.

The problem in India is at many levels. The syllabi are decided by the affiliating colleges and the curricula are prescribed by the universities. 'This leaves little room for quality control because syllabi are not revised frequently,' says Fr. Ambrose Pinto, Principal, St. Joseph's College, Mangalore.

Rajkumar Falwaria, a political science assistant professor at DAV college, Delhi University, says, 'The Delhi University is trying to revise the syllabi of many subjects. But there are hardly any books for the revised or newly introduced curriculum such as globalisation. I teach 'Reading Gandhi' for which there is no proper book in the market except for some cheap examination oriented guides.'

The college education scenario in the developed countries such as the USA is altogether different. Jesse Marks, a student at Yale University, sheds some light on the system while speaking to TSI, 'The curriculum is updated every semester (our classes are taught in spring and fall semesters)... and must be approved by the directors of each faculty. As for the content, many courses reflect current events and trends, whether it is a political science course on terrorism and counter-terrorism or a foreign correspondence course on the Iraq war reporting. Of course, others, especially in mathematics and history, may be taught in the same manner for decades.' Now, compare this situation to the one back home. The physics (Hons) syllabus of Magadh University in Bihar has not been revised since 1962, the year the university was established! Students here are still taught diode and triode in electronics. Rajesh Ranjan Prasad (name changed on request), head of the department of Physics at a college affiliated to Magadh University says, 'The world has moved to microprocessors that can do a billion calculations per second and we are teaching diode and triode. Frankly speaking, if the curriculum is revised and I am asked to teach those things, I will fumble in all likelihood.'

Except for commerce and a few other subjects, the curricula of most of the subjects are outdated, outmoded and obsolete. But the problem is not confined to the obsolete curricula. Many colleges have revised their course structure and curricula but in those cases the teachers are not able to handle the newly introduced syllabi. For example, Patna based National Institute of Technology has completely updated and revised its engineering syllabus two years ago, but this has created problems for both students and teachers. Rajeev Kumar, a fresh electrical engineering graduate from the institute says, 'Electrical power system problems are completely based on Matlad software and hardly any teacher is equipped to handle this. The college should have given them a proper training before they introduced such advanced things.' Kumar is currently employed at Power Grid Corporation of India.

The asphyxiating dominance of universities over the affiliated colleges is the primary reason why colleges are not able to revise the curricula as per the needs of the changing times. Political interference in universities has created an unhealthy atmosphere and this has added to the problem of the plummeting standards of education in the colleges.

Suvro Kamal Dutta, a political and economic analyst, has had opportunity to study both in India and at Cambridge University. He shares his experience with TSI, 'The big gap between India and other western countries in terms of educational standards seems very difficult to bridge. For example, see the history syllabi. We are not ready to move beyond Ashoka, Babar, Akbar and the independence movement. Even the students doing post graduation do not know about the technology of carbon dating and the use of remote sensing technology in the analysis of pre-historic locations.' He further adds, 'It is good to teach about our past but the education should be backed up with reality. It is more important to know what is happening at WTO and the impact of privatisation, liberalisation and globalisation on the Indian economy than what an emperor did a few hundred or a few thousand years ago.' The compartmentalisation of subject matter with no linkages in between and very few curricula linking the theory with application in the real world around render students wanting for motivation. Graduates should require minimal training before becoming productive, but typically there is an immense and inevitable need to retrain when on field ' waste of resources and time. 'The undergraduate syllabi are almost irrelevant, de-linked from the rest of the world. Educators and those responsible are usually apathetic and indifferent. Lack of refresher courses for teachers and infrequent syllabi revision leaves no room for innovation and creativity due to the smothering system of examinations conducted by universities,' says Archana Sharma, an eminent physicist and staff-scientist at CERN.

Some of the topics taught in Indian economics in the old syllabus as well as the new are totally irrelevant. There could have been interesting debates on topics like globalisation and liberalisation. It could have contained the economic backlash of the recent Iraq war. But sadly, our undergraduate curriculum has no scope to deal with contemporary topics.

Similarly, in journalism what is the use of teaching lithography when it is a junk technology? At most of the government universities, Hindi teachers have been assigned to teach journalism. Brijesh Mishra, a senior-producer in a leading business TV channel says, 'Most of the teachers who are teaching journalism have not seen newsroom in their life. They teach obsolete things which do not help students when they join industry. Instead, they should have taught how to write a good newspaper or television report, how to prepare rundown for the bulletin and most important how to cope with the immense pressure in a TV newsroom when news are bombarding you every second.'

The disconnect between the industry and academia is evident with report of Confederation of Indian Industry which clearly says that only 39.5 per cent of graduates in India are employable and that if India wants to sustain its pace of development, nothing less than a radical surgery will help.

The quality of teachers is another problem plaguing our universities and colleges. Vishesh Ranjan (name changed on request) says that the majority of the faculty in the MCA department at MANIT, Bhopal' where he is studying' is run by ad hoc teachers who are totally incompetent. 'They teach wrong concepts and even bring their own notes. The MCA course demands good computer lab. However, only 30 out of 60 computers work. There is no student feedback system. We are in a way forced to be taught by such teachers,' says a disappointed Ranjan.

India is a country gifted with large talent base and time has really come to change the outmoded education system in order to tap the creative energy of Indian students. This can only be done by revamping the curricula, and incorporating students' feedback so as to be informed of their needs and demands.


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