Thursday, February 18, 2010

Have breakfast …or…. be breakfast Article by Dr. Y. L. R. Moorthi

[This is article i recieved from my friend... its really nice one and cant resist myself to post it in my blog]

A Very interesting article. Don’t miss it.

An extremely interesting article on market dynamics by an IIM prof. Thinks simply, but differently! Who sells the largest number of cameras in India ? Your guess is likely to be Sony, Canon or Nikon. Answer is none of the above. The winner is Nokia whose main line of business in India is not cameras but cell phones. Reason being cameras bundled with cell phones are outselling stand alone cameras. Now, what prevents the cell phone from replacing the camera outright? Nothing at all. One can only hope the Sonys and Canons are taking note.

Try this. Who is the biggest in music business in India ? You think it is HMV Sa-Re-Ga-Ma ? Sorry. The answer is Airtel. By selling caller tunes (that play for 30 seconds) Airtel makes more than what music companies make by selling music albums (that run for hours).

Incidentally Airtel is not in music business. It is the mobile service provider with the largest subscriber base in India . That sort of competitor is difficult to detect, even more difficult to beat (by the time you have identified him he has already gone past you). But if you imagine that Nokia and Bharti (Airtel's parent) are breathing easy you can't be farther from truth.

Nokia confessed that they all but missed the smartphone bus. They admit that Apple's Iphone and Google's Android can make life difficult in future. But you never thought Google was a mobile > company, did you? If these illustrations mean anything, there is a bigger game unfolding. It is not so much about mobile or music or camera or emails?

The "Mahabharat" (the great Indian epic battle) is about "what is tomorrow's personal digital device"? Will it be a souped up mobile or a palmtop with a telephone? All these are little wars that add up to that big battle. Hiding behind all these wars is a gem of a question – "who is my competitor?"

"What Apple did to Sony, Sony did to Kodak, explain?" The smart ones will get the answer almost immediately. Sony defined its market as audio (music from the walkman). They never expected an IT company like Apple to encroach into their audio domain. Come to think of it, is it really surprising? Apple as a computer maker has both audio and video capabilities. So what made Sony think he won't compete on pure audio? "Elementary Watson". So also Kodak defined its business as film cameras, Sony defines its businesses as "digital." In digital camera the two markets perfectly meshed.. Kodak was torn between going digital and sacrificing money on camera film or staying with films and getting left behind in digital technology.

Left undecided, it lost in both. It had to. It did not ask the question "who is my competitor for tomorrow?"

The same was true for IBM whose mainframe revenue prevented it from seeing the PC. The same was true of Bill Gates who declared "internet is a fad!" and then turned around to bundle the browser with windows to bury Netscape. The point is not who is today's competitor.

Today's competitor is obvious. Tomorrow's is not.

In 2008, who was the toughest competitor to British Airways in India ? Singapore airlines? Better still, Indian airlines? Maybe, but there are better answers. There are competitors that can hurt all these airlines and others not mentioned. The answer is videoconferencing and telepresence services of HP and Cisco. Travel dropped due to recession. Senior IT executives in India and abroad were compelled by their head quarters to use videoconferencing to shrink travel budget. So much so, that the mad scramble for American visas from Indian techies was nowhere in sight in 2008. ( India has a quota of something like 65,000 visas to the U..S. They were going a-begging. Blame it on recession!). So far so good. But to think that the airlines will be back in business post recession is something I would not bet on. In short term yes. In long term a resounding no. Remember, if there is one place where Newton 's law of gravity is applicable besides physics it is in electronic hardware. Between 1977 and 1991 the prices of the now dead VCR (parent of Blue-Ray disc player) crashed to one-third of its original level in India . PC's price dropped from hundreds of thousands of rupees to tens of thousands. If this trend repeats then telepresence prices will also crash. Imagine the fate of airlines then. As it is not many are making money. Then it will surely be RIP!

India has two passions. Films and cricket. The two markets were distinctly different. So were the icons. The cricket gods were Sachin and Sehwag. The filmi gods were the Khans (Aamir Khan, Shah Rukh Khan and the other Khans who followed suit). That was, when cricket was fundamentally test cricket or at best 50 over cricket. Then came IPL and the two markets collapsed into one. IPL brought cricket down to 20 overs. Suddenly an IPL match was reduced to the length of a 3 hour movie. Cricket became film's competitor. On the eve of IPL matches movie halls ran empty. Desperate multiplex owners requisitioned the rights for screening IPL matches at movie halls to hang on to the audience. If IPL were to become the mainstay of cricket, as it is likely to be, films have to sequence their releases so as not clash with IPL matches. As far as the audience is concerned both are what in India are called 3 hour tamasha" (entertainment) . Cricket season might push films out of the market.

Look at the products that vanished from India in the last 20 years. When did you last see a black and white movie? When did you last use a fountain pen? When did you last type on a typewriter? The answer for all the above is "I don't remember!" For some time there was a mild substitute for the typewriter called electronic typewriter that had limited memory. Then came the computer and mowed them all. Today most technologically challenged guys use the computer as an upgraded typewriter. Typewriters per se are nowhere to be seen.

One last illustration. 20 years back what were Indians using to wake them up in the morning? The answer is "alarm clock." The alarm clock was a monster made of mechanical springs. It had to be physically keyed every day to keep it running. It made so much noise by way of alarm, that it woke you up and the rest of the colony. Then came quartz clocks which were sleeker. They were much more gentle though still quaintly called "alarms." What do we use today for waking up in the morning? Cellphone! An entire industry of clocks disappeared without warning thanks to cell phones. Big watch companies like Titan were the losers. You never know in which bush your competitor is hiding!

On a lighter vein, who are the competitors for authors? Joke spewing machines? (Steve Wozniak, the co-founder of Apple, himself a Pole, tagged a Polish joke telling machine to a telephone much to the mirth of Silicon Valley ). Or will the competition be story telling robots? Future is scary! The boss of an IT company once said something interesting about the animal called competition. He said "Have breakfast …or…. be breakfast"! That sums it up rather neatly.

- Dr. Y. L. R. Moorthi is a professor at the Indian Institute of Management Bangalore . He is an M.Tech from
Indian Institute of Technology, Madras and a post graduate in management from IIM, Bangalore

Tuesday, February 2, 2010

Growth Story National handloom market Ahmedabad

Last Sunday in evening we were out for just roaming in Ahmedabad some shopping just for usual..

Near law garden we went to national handloom market... and I was stunned that they have acquired one more building and established super market there... In Last 5 years this marwari group has done a tremendous progress. I do not know about their operations in other states or cities. But in Ahmedabad it’s clear that everyone knows that how fast they are growing.

In Early days it was on national handloom market for cloths.. then after they started selling vegetables, and plastic items ... soon after they acquire 4 floor building and started selling chappals, articles, wall pieces, plastic, crockery, cloths, curtain, ladies and gents garments, wooden art works and many more..

After that within a year they acquire one more building besides their original national handloom building. And made restaurant, fast food and sweet shop. Isn't it amazing? How clever the idea it was.. Getting all from it.

Now they have huge building for national handloom market and with 4 storey. Each store with different set of items they are selling. And just beside to they have this new building now Super market.. they are going on kishore biyani way.. i believe.. :)

hats of to kishore biyani

yesterday me and my wife was out for some shopping .. nothing special just few usual... We went to big bazaar, central mall,pantaloon, home town, brand factor.. while returning one thought sparked .. do you know all this malls belongs to only one man Kishor Biyani and his group name is Future Group.

Its amazing that now kishore biyani knows all most everything about consumer apatite , indian consumer's buying pattern. ..

let me explain few things.. i am really happy that indian business mind is growing faster then any other countries..

(I am only talking about growth in ahmedabad) Intially Future group had only Pantaloons in Ahmedabad.. and we all know it was only for higher middle class and rich people, Middle class,lower middle class was out of reach.
But no one really thought that highest consumption power is in Middle class consumer.

Mr. Kishore Biyani just started BIG BAZAAR and it has changed the scenario in whole india, It has made people to walk in to mall everyday.. and mall culture established perfectly.

Now it was no easy to reach to all audiances... They made Specific Malls, HOME TOWN for Furniture, Ezone For Electronics, FOOD BAZAAR for food and vegetables.... this made people to walk in to multiple malls but almost all belong to mr. Kishor Biyani...

Now another point.... Big Malls are not able to catch all consumer daily.. Another plan executed..
"FAIR PRICE" they have opened small shops name FAIR PRICE .. it is grocerry shop and almost every where in Ahmedabad , same like local grocer. Idea succed now customers are going every where.. in bigbazaar for weekend shopping, hometown for furniture and bathrrom furnishings, ezone for electronics..... they even don't know that all is one. :)

Another point.. here

Kishore sir has main business is retail now but his main business was garments.. Now how they are making pattern here.. .lets check..

-----------------------------For status and people who love to spend money--------
Pantallon Show room
Provogue Show room
RIG show room

--> We konw all cloths are never get sold in garments.. but how to sell them to stock clearing?

They stock all branded but out fashioned or stock clearing cloths in

Pantaloon Factory OUTLETS
Brand Factory...

here whole middle class will go and shop why? they are satisfying their ego to wear the same cloths that richer people are wearing.. so almost everything here are becoming out of stock :) isnt it amazing that Furture group is doing the good business yes.. one unethical thing is that Indian middle class is most suffered class and they are being targetted for business only but ignored in all other things.. yes i am sure this class is ignored more then BPL class.. and this group(not only this but all business group nowdays) is trying to get everything out of middle class. And not letting them to save enough. (anyway its another topic)

Currently I checked one another pattern.. Future group changes its faces in every few months to look fresher and get more audiences ...
how ? They are keeping new names of malls like home town, ezone, food bazar, brand factory, central mall.... every 6 month they make "new brand image" in consumer mind.. to look fresh and new....

Simlary they are doing in Cloths .. they are keep making new brands frequently like john major,RIG, umm and mane more..... so people have wide range and they feel they are now wearing branded cloths..

This is amazing and its really good that Indian Businessman can change everything as per its own idea.. he has changed almost every body's mind set about purchasing, shopping, spending :)

Hates of to you mr.Kishore Biyani