2009 IS THIS THE DO-OR-DIE YEAR FOR Anil D. Ambani?

IIPM, GURGAON

While his energy plans may need a boost, Anil Ambani’s BIG plans in entertainment and media are going great guns at the moment. The year 2008 saw Reliance BIG Entertainment reach two significant milestones. The first was the dream like deal with US based DreamWorks SKG controlled by the legendary Hollywood film maker Steven Spielberg. The deal, worth $1.5 billion has both ADAG and DreamWorks equally sharing equity in a new vehicle based in Los Angeles that will deliver six movies every year. Considering that an average Hollywood movie costs at least $100 million to make, you are again reminded that Anil Ambani thinks BIG all the time! The deal with Spielberg was not the only connection to be established with Uncle Sam. BIG Entertainment also acquired more than 220 movie theatres across United States. And these are not the niche ones that show Bollywood movies to NRIs! Many in the industry think this move is a gamble that could prove costly in the long run. In fact, the original promoter of Adlabs (which Anil Ambani acquired and absorbed into his entertainment empire) publicly aired his unhappiness with these strategic moves and resigned from the board. Not that Anil Ambani was fazed!

The other milestone for BIG was the launch of Reliance BIG DTH services (through the RCOM platform) with a lot of hoopla. Apart from old players Dish and Tata Sky, Anil Ambani will battle it out here with familiar rival, Sunil Bharti Mittal. As per market reports, the venture has already captured 15% market share in just three months and crossed the magic figure of 1 million subscribers. Says Sanjay Behl, Group Head, Marketing & Branding, “Our features are designed for easy manoeuvrability in the most user friendly manner. Such user friendly initiatives will help us maintain our leadership position in the evolving Indian DTH market.”

That’s good news no doubt. But Anil Ambani will not really find much time to celebrate such “small” victories this year because really BIG challenges and hurdles lie in 2009 and beyond. His ambitious forays into energy, infrastructure, power and telecom will require huge investments, both in terms of equity and debt. Take the power sector for example. Just 1 MW of capacity needs a capital investment of Rs.5 crore or so and we are talking of more than 50,000 MW! By any yardstick, the younger one in India’s most famous sibling rivalry will not find it easy to raise the money, especially with liquidity troubles plaguing all and sundry. His backers can only hope that he draws inspiration from his father and pulls up many rabbits from his hat. He has a huge incentive: after all, if he fails, it is Mukesh who will well and truly inherit the Ambani legacy!

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Source : IIPM Editorial, 2009

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

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Beat this – 10 million in 2010!

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Tourism has not forsaken India, and hoteliers can only rejoice. Leela Nandan speaks to 4Ps B&M...

Qs: Last year was not so good a year for tourism in India. What’s your take on that?
Ans: First of all, I will not agree to the fact that 2008 was not a good year for tourism in India! When we look at ourselves, we may have grown by just 6% over the previous calendar year, but then compare it with the world average – it is far more, because the world grew at only about 2-3%! Definitely this is despite the fact that there was a global meltdown and that there were terror attacks. So that is definitely a very positive thing for us, and in numerical terms, we had 5.37 million arrivals in 2008 as compared to just 5.08 million in 2007. That itself is an indication of the fact that people are continuing to travel to India, and in the month of December ‘08 alone, we had 5.22 lakh people who came to India as compared to 5.96 lakh in Dec 2007; and all this despite the fact that the Mumbai incident happened just before the month of December. So, I think that all this indicates that people the world over do take tourism in India very seriously.

Qs: But what has been the price that Indian tourism and hospitality Industry paid for ‘terror’?
Ans: When you talk of price paid, you can only look at it in numerical terms. We continue to have visitors coming to India in December and in this New Year. We also had more foreign exchange earnings. We also had more than Rs.50,000 crore earnings accruing to our foreign exchange exchequer because of tourism. Therefore economically also the sector has done well.

Qs: It is said that proactive marketing pays off well during times of recession. So how are you marketing tourism as a brand?
Ans: We have launched a very aggressive marketing campaign and we have tweaked our campaigns with new creative in the print and a new online commercial. We have also launched an all India campaign, which is happening as we speak throughout the world, through our offices. We are using the image of a tiger for promotions as the animal is well-identified with India. This communicates a brave and strong image of an ‘Incredible India’. We are also focusing on highlighting the diverse features of India. So while our culture and heritage are well acknowledged and acclaimed the world over, we are also focusing on the fact that our adventure tourism, cruise and rural tourism are products that have a huge appeal in themselves.

Qs: What is the target of tourist inflow set for 2009?
Ans: We don’t fix any year-on-year target as such, but yes we are looking at 2010 giving us 10 million arrivals. Really, the mantra for making this initiative successful is to take full advantage of globalisation.

Dr. Lalit K. Bhanot
Secy. General, Organising Committee, Commonwealth Games, 2010

Qs: With Commonwealth Games round the corner, a huge influx of tourists is expected. Is the Indian hospitality and tourism sector ready?
Ans: The Government of India and the Tourism ministry has formed a committee which is looking after the fact that more and more hotels are built for the same. During the time when this project was started, we had 10,000 rooms in Delhi and NCR regions (including Five stars, three stars and budget hotels et al). The target set for Commonwealth Games was 40,000 rooms. Thus many new hotels are coming up in the same league in the Delhi and NCR regions.

Qs: How many tourists are expected to come in during the Commonwealth Games 2010?
Ans: The number of tourists that are expected to come to India during the Commonwealth Games in 2010 is equal to the number of tourist who flew into Melbourne during the last Commonwealth Games, which was around 5 lakh.

Qs: Last year gave the hospitality and tourism sector in India many hiccups, like the global slowdown and terror attacks . So how do you see Commonwealth Games attracting tourists in the country in the current conditions?
Ans: When there is a big platform like Commonwealth Games, wherein 71 nations are ready to participate, then the tourists can’t help but visit India. Moreover, the whole marketing campaign, including the publicity in 71 nations, makes India an attractive destinations for tourism.

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Source : IIPM Editorial, 2009

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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2008 HITS & MISSES

1500-plus IIPM students placed across the country with 44 bagging international offers

It was a whirlwind of a year. The nation’s sentiment moved from India shining to India pining to India whining; political certainties were challenged like never before and the Mumbai carnage plunged the nation’s middle class into an abyss of dismay and despair. Wrapping up, Aditi Prasad gives a snapshot of the year gone by...

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Source : IIPM Editorial, 2008

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

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Is that what you just said?

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In other cases too, retailers have either relocated their stores (Big Bazaar has changed the format of one of its stores and relocated another in Ahmedabad), or are pruning and resizing their retail space (Reliance has shed upto 40% of retail space in its hypermarket store at Iskcon Mall in Ahmedabad). Retailers are also in the process of negotiating rentals (primary reason for cutting down on retail space) with the landlords and may even go in for revenue sharing models.

It is true that tough economic conditions have made the retailers realise their folly and amend their mistakes. But given the kind of investment that has already gone into this sector, it may not be possible for all to sustain. As Vedamani puts it, “Retailers who have been in existence for more than five years, or those who have strong capital backing can withstand these conditions, but for others it’s going to be tough.” And indeed, a host of other retailers are left with no option but to pare down on the number of stores they are currently operating. Indiabulls retail has shut down two stores in Ahmedabad, apparel retailers Arvind Brands, Reebok and Raymond too have started pruning their operations.

Certainly Indian retailers seem to have got a good lesson and are now making no two bones to accept that they were wrong in their super fast expansion plans and huge investments within a short span of time. As Goenka says, “In the course of any business, you’ll have decisions which are not always right in terms of location, vendors and demographics. It’s always best that if you’ve made a mistake, correct it.”

Earlier, the focus was only on increasing the square foots and therefore there was a certain level of delegation that happened in selection of areas to open the stores. But now, the retailers have taken the onus on themselves to carry out a proper research on the demographics and demands of consumers in different places. Based on such studies, the retailers are now being extremely careful on where to open their stores. “In future, due diligence will definitely pick up,” concludes Goenka. Well, it better pick up, as only then it will be determined whether the previous mistakes were stepping stones or indeed ‘mistakes’.

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Source : IIPM Editorial, 2008

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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It’s all about having a purposeful fizz!

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PepsiCo’s top honchos are now paying special heed to environmental initiatives. Angshuman Paul finds out more...

PepsiCo’s latest corporate report also talks about environmental sustainability. Can you elaborate on it?
SAL: Our group policy has always been to maintain the eco-system of the locality where we are operating. But now we would be doing that with a clear cut mission under ‘environmental sustainability’ and specifically for the South Asia, Middle East and Africa (SAMEA) region.

So, what exactly are you planning for this region?
SAL: We would be planting more trees, especially citrus-based fruit trees. We also plan to preserve natural water resources and achieve positive water balance by 2009. In India we will save and recharge more water than what we will use in our plants. MK: Millions of people in this region are suffering from major deficiencies of key nutrients like iron, Vitamin A, et al, which is leading to serious health problems. Thus we plan to launch healthy products to address such issues.

How are these green initiatives helping Pepsi?
SAL: This is not a part of our branding and promotional campaign. We believe we are responsible for the resources that we use in our production process and as such we can’t deploy them. In fact, our multi-pronged approach to reduce water usage across production plants includes innovative reuse and recycling of water. We are also tying up with farmers to save water.

How much are you planning to invest for environmental sustainability?
SAL: PepsiCo Foundation’s commitments to safe water initiatives will reach nearly $15 million in the next three years. The funds will be utilised to address critical water scarcity issues. We will also take up some agri-partnerships projects with farmers. MK: We would also be reaching young women to make them aware of health issues. Our vision is to sell products which are healthy and in the process we will also ensure that we are not deploying any natural resource during the manufacturing process.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
Why Study Abroad When IIPM Gives You 3 global Advantages!