मैं

मैं

ना मैं दरिया हूँ, ना सागर, मैं बस दोनों का जज़्बा हूँ,
कभी हैरान हूँ खुद पे, कभी मैं सब समझता हूँ |

मुद्दत बाद इस दिल में कोई तूफान आया है,
कि थोड़ा तुम ठहर जाओ, और थोड़ा मैं ठहरता हूँ |

मेरी दुश्वारिओं को मैं कभी भी कह नहीं पाया,
बिना बोले समझ जाओ, कि जैसे मैं समझता हूँ |

Cisco boards and councils

Many of the comments see it obvious mistake from Cisco to go for Council & borads and even the some acquisitions that they made. Well, now it is evident to Cisco too. Let me make a strong statement that Cisco has been on of the very few companies doing so many acquisitions and still being successful (atleast till a couple of years back). I assume that we all agree that mutiple papers have been published on why and how Cisco's acquisition's success rate is so high. I don't claim that the board and councils are the only reason for success, but they have a good share of reaching to success. The idea behind the boards is to have an expert representative from each of the verticals and take a wise decision.

Now, I understand that Cisco has failed in last couple of years to maintain its strength (Routers and Switches), as it focussed more on adjacencies. The boards have failed to make right decisions. The vision was slightly misaligned and that gave an edge to competitors to sneak through the Cisco's profit. It would be interesting to see how John Chamber addresses the situation. He has taken Cisco up to a good position and also, he has agreed that last few years Cisco was focusing on wrong things. Now that the decisions made earlier have failed, it is easy for anyone to get criticize the decisions made, and I can find thousands of articles on internet on the same. Interesting would be to see some of the suggestions on what are the options to recover from it and what Chamber does.

Traffic in Bangalore-1

Finally I decided to write it down... I feel it everyday, I talk to myself while driving to my office, I curse the BMP officers when I am stuck in the snailing traffic in evenings. I dont curse them because they are are not doing anything, I do so because there are simple solutions available and they never even think of it.

I use outer ring road to travel to my office (20 kms) from near Hebbal to around 1 km ahead of Marthahalli. It takes me nothing less than 60 mins everyday. Simple maths tells that my average speed is about 20 km/h. Thats exactly true for anyone who is traveling on the same route. Let me come straight to the point now... Following are the suggestions (or rather common sense) I have:

1. On free section of road, trucks commute at very slow speed in all the lanes. Can't we make the truckers follow the rule?? Drive on the left ALWAYS !!!!!!!

2. Remove all the red-lights from the outer ring road. Yes, I am not joking... It is very much possible. Outer ring road is wide enough to provide U-Turns at a distance of every 2 kms or so. So, for people who want to join Ring road, there will be NO-RIGHT-TURN. Join the ring road by taking the left and then take U-Turn if you wanted to go right. It works.... I (read people) would like to travel a couple of kms more than waiting for 10 mins in the red light. This will also make sure that there is no traffic block on the Ring Road. We can achieve avg speed of 40+ km/h if we can do a simple thing like this.

3. Why do we still have all the right and left turns at 90 degrees. Lets send all these 90 degree civil engineers on sabbatical for a couple of years and correct all these.

Well, there must be many more suggestions with each one of us who travel in Bangalore. The above few are the ones which does not need a lot of investment, but can definitely change the way we travel.

I know it takes 2 years to make one underpass near cantolment railway station, still I hope some BMP official will read this (do they read blogs..lol) and do something about it.

Getting world cup !

It could not get any better. Take my words for it... it was the best ever match one could imagine. It was an India vs. Pakistan in world cup final. The first 20-20 world cup. I am not only a cricket lover, but also have played a lot of circket. Had reached upto the gates of Ranji selection, but had to select my studies over it. Still my interest keeps me a part of some cricket team, wherever I am. Currently I play for my company's team.

After a heart-breaking 50 over world cup early this year, I had become apathic towards watching Indian cricket team playing. I dont know which series they played after the world cup. But, the pace and enery, added with short duration of 20-20 attracted me a lot and I watched many games. Watching Yuvraj hitting 6 sixes in an over was a real experience and it had definately increased my blood to an extent that I really got back to cricket in my fullest. The SA and AUS matches were enough to give a lot of confidence not only to me, but also to the entire nation that India can win the world cup this time (after 24 years).

I, along with few of my friends, planned to watch this match in my house. We ensured that everyone reaches on time... I left my office at 4:00, the match was at 5:30.. (thanks to bangalore traffic and all the enthu india supporters leaving early.. I was just one of them). I bought some cold-drinks and other snacks on the way to home, enough for the 3 hour game.. All others reached just before the start of the game. And the game started....

It is a real fun to watch a match in a group... you have a lot of commets, reactions....etc...etc.. India won the toss and elected to bat..Watching Yusuf Pathan to start his international career as an opnener in Ind-Pak world cup final was strange.. We all just started on indian team and management.. but Pathan started off in style.. guess what.. YES.. with a six.. and we all agreed with the indian team immidiately.. the guys was real good and his short innings presented a summary of his capabilities. Rest of the Indian batting was ok.... we kept shouting on every 4 and 6.. kept critizing for running slow... "Cummon. you can run 2 here" !
Gautam Gambhir and Rohit Sharma were the real discovery of this tournament. And I suddenly realized that the cold-drink and snacks were all over in the first innings only.. so much excitement....:)

Second innings was Pakistan batting to chase a moderate 157.. We were all tensed about it... we could not bat to score a score that we had expected.. We cursed Yuvraj for his attitude in this game.... We got many comments saying that he was not happy about Dhoni being the captain and so he wants India to loose today.. his fathers comments following his 6 sixes etc.. Our cook joined us and he prepared some quite good "pakodas" in the break.

Pak innings started with these thing going on.... Good bowling by RP singh and bad by Srisanth was the hot discussion in the first few overs... overall, the game went fine for us till 15 overs.. Pak were 99/6 and the target was to get 59 runs in 5 overs.... around 12 per over. We almost started celebrating.. 16th over only 5 runs, nice work by Pathan.. Some of the fireworks had already started by that time.. We did not change our places while watching the final overs as we thought that may change something..;).. yes, we believed that at that moment !

And then started the Master.. Misbah.. he went for 3 sixes in 17th over.. Bhajji could not control him... We started getting concerned now.... and little did we know that it was just the starting.. Sohail went for two more in the next over by Irfan Pathan. We could take it any more.... Last two overs left.. 20 to make with 2 wickets left. The chances were definately 50-50 now... it all changed with those big sixes. PR singh put the 19th over of 7 runs and the target changed to 13 runs in 6 balls. Not impossible. And guess what..? We did not have a good baller left. Yoginder sharma was not that impressive a baller to us, but he had done it against Australia. Habhajan had gone for 19 in an over... and the strike batsman was Misbah.. We all were quite when Sharma went for his first ball.. and a wide !!! To hell with you.. dont you know the conditions out there... He anyway compensated with a dot next ball... 12 from 5.. but was not impossible.. not at all for the Almighty Misbah.. The second ball was a six.. a big six.. this was end of our hope.. We cursed everyone in the Indian team.. Then Misbah went for a paddle shot to finish the game, the ball went up in the air.. all we could see was the ball in air in our two-dimentional television sets. Thought it is a 4.. And Suddenly a magical moment. We saw Srisanth there under the ball... he got it. The ball could not travel to the distance as Sharma had put it slow this time. We started shouting like mad... the whole area was full of joy.. lots of crackers and fireworks all around. We shouted even louder "Bharat Mata Ki ... Jai !!!" and "Jai Hind !!!"..... One of my friends later said jokingly " Misbah thought, there is no one in that area and hit the shot. He forgot that Malayali's are there in every part of the world !"....

This was a life time experience to have. Proud to be Indian..
Jai Hind !

Threats to Zara

1. What are the threats to Zara's success?

Following are the threats to Zara's success:
1. Zara's Vertically integrated model is a threat to Zara's success in long run. The model will not work once Zara scales its operation. Currently, Zara's desiging, production, distribution and retails stores are tightly coupled together and operate very closely. Expanding operations in different regions (America, Asia, Europe etc.), requires addressing different fashion trends at a time. Also, given different sizes/ trends in different regions, it would not be easy to pull a new fashion cloth or apperal from one region and put it in other region.
2. Also, scaling its operation may require joint-ventures and acquiring some smaller chains also. In a 50:50 joint venture, it is very difficult for Zara to impose its business model to the other partner. In this case, we have already seen Zara's joint ventures dissolving on a couple of occasions.
3. While zara may find it difficult to manage the vertically integrated model for its large scales of operation, local retailers may follow Zara's formula to success and can emerge as big threat to its success.
4. It is not easy to beat the local retailers in their home market. For example, the Local appreal market in Italy is still owned 61% by the independent stores, 45% in Spain (Note that this is Zara's local market too) and 15-30% in other three major European markets. Specially, in a country with very cheap labour (mostly in Asia), it will be very difficult for Zara to keep up its production in Spain.
5. Zara's business model is based on ever changing fashion. For countries like US, where people are less fashion forward, it may be a challenge for Zara to sustain its presence.
6. With changing time, Advertisement is becoming an important part of the business and it reflects directly to the sales. Zara's in-store advertisement model may not work going forward.

2. Which of these threats are most serious?

1. Most serious threat to Zara is to sustain its success.
2. Another most serious threat to Zara is its growth. The company could not aquire large market shares in the domestic market. Even in Europe, the company does not has a reasonable presence. American and Asian markets have different types of challenges, that zara may be facing in future. American market is less fashion forward, which questions zara's basic business model itself. Asia, on the other hand, is known for its cheap labour. Competing with these challenges at a time in different markets, while keeping its vertically integrated business model intact is the most serious challenge for Zara.

3. What should Zara do to address these threats?

Zara cannot address different requirements and challenges working from its home location only. It can have multiple vertically integrated production for each region. For Asia, having cheap labour will definately add a lot to the operating cost (For example, refer to Exhibit-2 where value added per dollar for Indian labour is 5, where that for Spanish labour is 1.6). While its engineering team can continue giving fast reponse to new designs.

4. How should Zara go about its internationalisation in future?

1. See if setting up a production unit makes sense with respect to the operating expenses.
2. Zara can use Frachises for high risk and conservative countries.
3. Aquiring small chains may not be a good idea for Zara given its business model.
4. Spend more on Information Technology to remain in close touch with store and customers.
5. May need to spend more on advertisement.

HMT vs Titan

After going through a case study of Titan company (which discussed the data upto 1994-95), I tried to find out what happened to HMT after that. I expected that HMT must have been trying hard to get its lost market share back from Titan. But, the real story was something else. I am posting my findings as below:

Study of performance of HMT during recent 5-7 years and analysis of what it did wrong and what it could have done better
---------------------------------------------------

Though HMT finally responded to the competition put by Titan, there were many other factors to the company’s failure to gain the overall market share. As the case discusses the data upto 1994-95 only, we need to analyze the data after this period, to get information about the changes in the market. We will concentrate on the statistics of the market and performance of the organization in this period to understand “why HMT failed to capitalize on positive moves later. Following analysis shows the problems that HMT faced and “what it could have done better”.

1. HMT had the overall market share of 26% during 1997-98 and it dropped to 14% during 2001-02. Out of this, HMT still had 70% market share of Mechanical watches during 1997-98, which increased to 94% during 2001-02. Company performed poor in Quartz market, it had market share of 8% for five year during 1998-2002. This shows how the sale of mechanical watches dropped drastically. The value curve for Mechanical watches kept falling and there was no driving force from HMT to oppose this.

Mechanical Vs Quartz: HMT observed the demand for mechanical watches go down, largely because it focused more on competition from Quartz, instead of their own strength i.e. Mechanical watches. In the world market, still Mechanical watches hold a good position. A recent study shows that the Swiss watch industry exports of mechanical watches accounts for two-third of their total export value. While the Swiss watch industry did not accepted Quartz technology, they were able to make a point with mechanical watches in the watch industry. Exhibit-1 shows the growth of Swiss mechanical watch export in recent years.

Conclusion-1: HMT could have emphasized on Mechanical watches only and could have provided a greater competition to Titan by selling over the strength of Mechanical watches. Some of them could have been as follows:

a. Quartz watches are as reliable as mechanical, but the battery is a slip. You can not predict the life of the battery.
b. The parts to replace are easily available for mechanical watches, but for age-old quartz watches, the battery would have been obsolete.
c. Mechanical watches last longer (provided serviced on time), while quartz watches have lesser life because of the limited life-span of the electronic circuitry. Mechanical watches have good resale value.

So, HMT could have made it a point that, if you want quality, class, precision and historical value, go for Mechanical watches.

2. HMT remained into losses for last 5 years. Exibit-2 shows the sales revenue of the company for last few years. Though it launched many watches to gain the market share into the quartz market, it could not capitalize on the success of these watches due to many reasons. Some of these reasons are as follows:

Advertisement: Exhibit-2 shows the 5 year data for expenses made towards advertisement by HMT. In year 2006, the expenditure was around Rs. 0.1 Cr. as against Rs. 4.5 Cr. in 2001. This puts a big question mark on the awareness level of the customers about HMT watches caused by lack of advertisement. This analysis becomes more critical, when compared with expenditure made by its competitor Titan. Exhibit-3 shows that Titan tripled its expenditure from Rs. 40 Cr. in 2001 to Rs. 133 Cr. in 2007. While titan engaged major celebrities like Amir Khan, Kapil Dev etc. for its advertisement, HMT advertisements went almost missing from print & electronic media.

Conclusion – 2: HMT could have made more advertisements to let its customer know about what they are producing. Underestimating the power of advertisement was one of the key factors for HMT to loose its market share. Also, HMT could have done some research on various new ways of advertisement.

Retailer Stores: HMT hardly looked into their stores or took any big steps towards renovation of their stores. While Titan kept investing into renovation of its stores, similar efforts were missing from HMT.

Conclusion-3: HMT could have spent more on consolidating and renovating the retail stores. Given the large distribution network the company had, it could have done it in phases. Exclusive HMT stores were hardly seen and this was also one of the major reasons for further decrease in sales.

3. Some of the decisions made by HMT were unreasonable given the production ability of the company itself. To meet requirements of the quartz market, company outsourced the production of various visual parts (dial, cases etc.) [Outsourced from Tennmax India Ltd.]. It got large these parts in large volume from this organization, while its own production capacity of dials and cases remained underutilized at 34% and 47% respectively.

Conclusion-4: This clearly shows that there was large scope for optimization of the production facility. HMT could have used its existing production capabilities to meet the market requirements. As it was lagging behind in the production initially, producing of its own could have resulted in efficient production. This would have reduced the operating expenses also. It does not make sense to underutilize own production capabilities and go for outsourcing of the same parts.

4. HMT started outsourcing the watch manufacturing to other firms. Suspensions of services from these firms lead the problem of stopping them to use the HMT logo in their production. HMT also started to employ vendors with quite less experience and less technical expertise. Outsourcing led spurious watches in the market. HMT failed to act immediately and took 15 months to take follow-up action in July 2002.

Conclusion-5: HMT needed to be more mature towards decision made for outsourcing of various parts, outsourcing of the watches manufacturing and they way they selected the vendors. It could have handled the suspension of services more authentically to stop the spurious HMT watches in the market.

5. During recent years, HMT suffered from the high operating expenses and higher debts. It did a cut-off of staff in 2003 and sold some land it had in Bangalore to get near-term financial stability.

Conclusion-6: Given the financial conditions of the company, it could have restructured its complete organization (HMT watch Ltd.). As the company was in losses for many years, company should revisit the vision of the company and evaluate itself in current market environment.

6. During 2000-01, around 15 million watches were sold at the lowest end of the market and of this only about seven million were branded. Bijou Kurien, vice-president, sales and marketing, Titan said:

“We found out that customers in this segment badly wanted a brand with which they could be associated with.”

Conclusion-7: There was a big opportunity in the lower segment in 2001-2002. HMT could have utilized this opportunity by putting more effort on advertisement and distribution of watches for this segment.

7. When Titan planned to play the volume game, it launched SONATA (1998) in the range of Rs. 300-1000. This was a major success for Titan in terms of sales. But, it was only after few years; Titan realized that, by entering into the lower segment, it has actually paid a price of its brand image in the luxury segment. It then decided to separate SONATA from Titan in 2002, as Mr Bijou Kurien, vice-president, sales and marketing said:

‘‘It’s a double-edged sword and we have constantly debated whether we should separate the two or not.’’

NOTE: Please relate this to “why Titan came-up with Timex for lower end and not with its own brand. This is what happened when they finally launched Titan brand in lower segment.”

Titan pushed SONATA into rural market also.

The decisions made by Titan, shows the aggressiveness of the company towards the market and its changing dynamics. Titan was quite pro-active in their strategy. HMT, on the other hand, was reactive most of the times. It never had an innovative approach towards the market.

Conclusion-8: When you are competing against an aggressive competitor, you have to be innovative. HMT needed to take the feedback from the market and make their strategy based on the data collected, and should not make moves just to counter the moves made by Titan.

Following are few more things that HMT could have done:

1. Spin off a subsidiary for Quartz segment. While HMT’s mechanical watches could have target the quality, class and elegance customers. Quartz subsidiary could have targeted the lower end market.
2. Innovation was the most important missing factor from HMT’s culture and strategy all through years. It could have innovated various ways of advertisement (celebrities, discounts, sponsoring events etc.), marketing (renovating stores, making distribution channel more efficient etc.), getting customer feedback, adopt the changing market conditions etc. Attracting the young generation through media was completely missing.
3. HMT could have invested into R&D or hired some good designers to design new models of the watches. With customer looking for new varieties of watches after 2000, this could have boosted their market share.
4. HMT could have promoted different watches for different moods (e.g. formal, casual etc.). This would have resulted into sales of more than one watch to the same customer.
5. HMT could have collaborated with some of the good retailers of different brands (with big distribution network and good retails showrooms) to display and sell some newly launched models. An example can be television show rooms, which is present in almost all the cities.HMT could have been collaborated with some jeweler to launch the jewel watches.

End Note: The study of GUCCI case provides the details of how the company turned around after it went to the extent of getting sold. This case also provides a lot of insight about various ways the production can be made efficient and marketing can be boosted. HMT badly needs marketing efforts to make its sales revenue go up and to get its old brand image back. At the same time, lots of efforts are required to make the production process more efficient.

Interesting info: During 2002-2003 Titan wanted to buy 50% stake of HMT and restructure the Organization.

EXHIBIT – 1

Mechanical watches export from Swiss Industry

CHF: Confederazione Helvetica (Swiss) Franc, currency
Ref: http://www.fhs.ch/statistics/watchmaking_2006.pdf.

References:
http://www.tata.com/titan
http://www.hmtindia.com/
http://www.blonnet.com/
http://www.fhs.ch/

आँखें

जैसे रेगिस्तान में मृग-तृष्णा को देख कर दृष्टि-भ्रम होता है,

मेरे बुलाने पर उस बच्चे कि आंखों में कुछ ऐसी ही चमक थी।

मैंने उसे पास बुलाया,

बोला :

क्यों माँगते हो, क्यों नहीं पढने तुम जाते हो ?

क्या तुम्हें अच्छा लगता है, भीख-माँगना !

वोही आंखें, इस बार फिर उठीं,

पर घृणा और द्वेष से,

बोला साब, क्या पदायेंगे मुझे आप,

इस गरीब को दो वक़्त का भोजन दे पायेंगे आप,

भाषण दे दो, अपना क्या जाता है ?

उस भाषण को यथार्थ बनाने में दिल क्यों घबराता है !

सारे समर्थों का प्रतिनिधि मैं
शर्म से आंखें भी नहीं झुकीं,

वोही आंखें थी अब भी मुझ पर रुकीं,

मैंने जेब से एक सिक्का निकाला...... दिया,

और उस बच्चे कि आंखें एक नयी रौशनी को
ढूंढने को मुड़ गयी !

-आशुतोष