L!VE March2010

SOCIAL Trade in the EU: a means, not an NETWORKING BATTLE end in itself
Face to Face with Mr. Ashank Desai
Cover Story: Indian Telecom Sector
Shailesh J. Mehta School of Management Indian Institute of Technology, Bombay
| EDITORS NOTE |
Dear Readers,
Greetings from Team L!VE !
TEAM L!VE
ARUN KUMAR SINGARAJ DEEPAK GUPTA NANDINI MURALIDHARAN SOMAK CHAKRABORTY SWAPNIL KUMAR TARUN MATHUR VARUN PUROHIT VINAY RAJ KUMAR MANDAVILLE VISHWANATH PRATAP SINGH
We present to you another edition of L!VE in continuance of our efforts to satiate your quest for anything that is management and business. With this issue, we move ahead in our journey towards bringing forth the best in the world of management. There is one sector which has witnessed tremendous growth over the past decade Telecom. From the days of analog cellular telephony to digital mobile communication to wideband mobile communication and finally to broadband fourth generation, this field has witnessed mind boggling changes with the numbers being a testimony to this. Today, the external market conditions are posing enthralling challenges and opportunities for the Indian telecom players and they are responding to it with vigor. Effective incorporation of technological innovations like mobile number portability and focus on inclusive growth is the way forward. In this issue we have covered this transition and wish that it makes for an interesting read. In our endeavor to drive the entrepreneurial spirit, we have recounted the stories of two start ups Voicetap and Gridbots. This edition also features the learning and laurels achieved during the winter holidays by the students of SOM. The Research Lab section presents a rich analysis of the financial implications of climate change. The issue also features our rendezvous with Mr. Ashank Desai, CMD of Mastek Ltd. and Mr. Viren Rasquinha, former captain of the Indian Hockey team. We hope reading their success stories will be an enriching and inspiring experience. On a lighter note, an unconventional film review has been presented covering some financial insights. Perhaps it is a never-ending endeavor for journals to improve the quantity and quality of material published and so, we give you this issue of L!VE, with the promise that there will be more innovative additions and new features over the next few issues. Happy Reading! Editors
E-mail: live@som.iitb.ac.in Website: www.som.iitb.ac.in/live
L!VE
March, 2010
|CONTENTS |
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RESEARCH LABS 24 | Microfinance Initiatives 27 | Effects of Climate Change on Financial Sector
Vol # 2; Issue # 2
COVER STORY 06 | Indian Telecom Sector India the worlds fastest growing telecom market and thus happens to be the country offering highest ROI for the telecom companies
FACE TO FACE 10 | ASHANK DESAI 12 | VIREN RASQUINHA
BIZ WITS 30 | Quetzal 39 | Answers

CREATIVE BENDS 32 | Day zero 33 | Valentines day START-UP-STORY 35 | Voicetap 37 | Gridbots
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ALUMNI SPEAK 14| Major changes in IT service scenario since 2000

INDUSTRY SPEAK 16 | Will an appreciating rupee against the dollar mar Q4 Indian IT results?
STUDENTS SPEAK 18| Trade in the EU: a means, not an end in itself 19 | Social Networking 22 | Mobile Number Portability
SOM-thing Special 40 | Nouvelle Vague December 42 | Leadership lecture series

Book Essence 44 | The 22 immutable laws of branding Filmography
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46 | The Midas Formula
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March, 2010
| COVER STORY
| TELECOM |
INDIAN TELECOM SECTOR

Today, India is one of the fastest growing telecom markets in the world with current subscriber base nearing 490 million and looking positive to touch 500 million subscribers by 2010 - Varun Purohit, SJMSOM, IIT Bombay
n the year 1984, one of the members of parliament stood up and said to the erstwhile telecom minister about the pathetic state of affairs regarding the telecom services in our country. To the question posed, the minister replied that telephone is a luxury and not a necessity and if the honble MP is not happy with the service then he can return the connection as there were a lot of MPs waiting to get one. Getting a telephone connection was even more difficult than acquiring Maybach(one of the costliest cars in the world). The father of telecom revolution
in our country was the erstwhile PM Shri Rajiv Gandhi, wherein he called Mr. Sam Pitroda who initiated the Digital telephony revolution in our country. Advances in technology coupled with reforms of 1991 and the fundamental, structural and institutional changes brought about in that period were instrumental in setting up the tone for future growth and development. Today, India is one of the fastest growing telecom markets in the world with current subscriber base nearing 490 million and looking positive to
touch 500 million subscribers by 2010. India, the fastest growing telecom market in world, registered a CAGR of around 34% over the last decade and have left analysts around the world totally in awe. Among the various segments, cellular or mobile segment has been the key contributor and specially prepaid services, with its wide offerings of services, has been leading the growth wave. With the upcoming 3G allotment, the sector is likely to grow at a good rate riding on better and possibly a whole new range of services.
L!VE
March, 2010
| COVER STORY
| TELECOM |
Service provider wise market share as on 31-01-2010
Source: TRAI
The reduction in tariff has culminated in a downward trend in Average revenue per user (ARPU)and on the other hand, the average Minutes of Usage (MoU) has shown a slight decline in both GSM as well as CDMA Sector Overview
15 years back, no one had thought that India will become a country with more number of GSM subscribers than fixed line subscribers. With 490 million subscribers by 2009, tele-density has risen up to around 42%, and thus the other half is yet to be brought to the mainstream. Going by the current data, the subscriber base grew to around 494.07 million in August09, registering a growth of 42.67% over the last year. As per the estimates of Stockwatch the expected mobile subscriber base will touch around 771 million by the year 2013. Telephony services i.e. (mobile and basic) and internet services dominate the Indian Telecom services market. With a CAGR of 29% from 2002 to 2007 with revenues of $20 billion, it is expected to stabilize at 16% by 2010 with revenues in the range of $43 billion. Over the years, wireless services has acquired almost 92% of the total telephony market, with State owned BSNL as the leader in the landline domain and Bharti Airtel being the leader in cellular services with other players like Reliance, Idea Cellular and Vodafone giving it a tough competition. The reduction in tariff has culminated in a downward trend in Average revenue per user (ARPU), a metric which is used by Telecom companies as a metric for their current and future revenue projections. The ARPU in GSM services has declined from US$ 6.64 for the quarter ending March08 to US$ 4.10 for the quarter ending March 09. The ARPU for the GSM service in India is much higher than that of CDMA and to worsen the situation, the percentage reduction in ARPU of CDMA is way above that of GSM services. On one side there is a decline in ARPUs, and on the other hand, the average Minutes of Usage (MoU) has shown a slight decline in both GSM as well as CDMA, where CDMA is showing a more dip as compared to GSM.
Telecom parameters
Owing to the huge competition among the players, price wars are quite evident. 10 years ago subscribers were made to pay for an incoming call; today they have the liberty to pay for per second of their usage, with TATA DOCOMO bringing the market disruption by their concept of per second billing.
L!VE
March, 2010
| C O V E R S T O R Y | TELECOM |
India the worlds fastest growing telecom market and thus happens to be the country offering highest ROI for the telecom companies
Incumbents
The Indian mobile services market is more or less equally divided between GSM and CDMA customers with the former capturing around 53% of the subscriber base. Currently there are 11 players who are fighting tooth and nail to increase even one single percentage point in their market share. While Bharti Airtel dominates the GSM arena, Anil Ambani led ADAGs Reliance communications has been leading the CDMA services space in mobile telephony but the good sign for the sector is that revenues of all the incumbents have increased leading to an increase in their revenues. In GSM, Bharti Airtel is given a tough competition by Vodafone and Tata Teleservices which operates Tata Indicom and in CDMA, it is considerably behind Reliance communications in terms of market share. With Mobile number portability coming into the scene, the war will be fiercer in this space and there will be a huge swapping of subscribers among the existing players.
Growth Prospects: Telecom in India

Indian telecom industry has set an example by penetrating the market to an extent of around 43% in a span of 10 years when analysts and experts were extremely skeptical about India as a market. The growth has not been restricted only to the higher section of the society, now it is driven primarily by the rural market as well and the acceptance has been increasing considerably over the years. On an average approximately 8 million users are added per month to the kitty thereby making India the worlds fastest growing telecom market and thus happens to be the country offering highest ROI for the telecom companies. To
With the growing number of smart phones entering the market coupled with the social networking websites, one can expect a substantial amount of people using their mobile phones for the internet.
support the growing telecom market, the government is supporting telecom manufacturing by providing tax sops as well as setting up Special economic zones (SEZ) for the sector.
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March, 2010
| C O V E R S T O R Y | TELECOM |
Trends in the Industry

3G spectrum will be the next growth wave in the industry and also the source of additional revenues for the companies. Foreign players such as AT&T and NTT DoCoMo have show great interest for the same. The spectrum allotment is a major investment opportunity and is estimated to attract an investment of around US$8-10 billion during 2008-11. The state owned incumbent BSNL has successfully launched its 3G service under the proposed India-Golden 50 scheme but could not create that much of buzz though for not being aggressive in marketing the same. WiMax on the other hand promises seamless connectivity with speed of more than 4 Mbps in tough terrains also. With the growing number of smart phones entering the market coupled with buzz created by the social networking websites, one can surely expect a substantial amount of people using their mobile phones for the internet. The telecom ministry is planning to auction few slots in WiMax in near future. VAS on the other hand is the constant source of revenue and a means to engage subscribers. The expected revenue from VAS will be around US$ 4.0 billion by 2015. The concurrent developments like MCommerce, focus on localization, availability of content in vernacular languages, availability of mobile TV are few out of many growth drivers for the VAS industry. With the customer data at their disposal, telecom companies are generating knowledge and information by churning out this data to serve their customers better.
Will he be lucky this time?

SUNIL BHARTI MITAL M.D , BHARTI GROUP
And the Deal

Bharti for sure has an aggressive intent towards acquisitions. After being spurned by MTN, it is now after Zains African unit (except Morocco and Sudan). Zain started its operations in Kuwait in 1983 with the name as MTC. It is currently operating in 21 markets of which 15 are in Africa and 6 are in the middle east. The valuation is kept at $10.4 billion which includes a debt of $1.7 billion. The initial reaction from the stock market was not very good as Bhartis stock fell around 9% and 5% in the first two days after this news came out. If this deal goes through, Bharti will have a total of 163 million subscribers. The potential problems could be from the Kuwaiti group which has 25% stake in Zain. The future for the Indian Telecom industry looks bright with fierce competition making way for consolidation. The growth will be majorly driven by rural sector which is currently attracting good investment not only from the players but also from the government. The biggest challenge will be to keep in touch with the rural customers as setting up customer touch points requires investment with not much tangible returns as the number of subscribers is still pretty low. As of now the penetration in rural areas is around 10% as opposed to around 30% in urban landscape. The industry currently is nicely poised with great new policy changes and new players entering the market to make it more fruitful for the consumers.
L!VE
March, 2010
| F A C E T O F A C E | ASHANK DESAI |
You can stretch yourself to [be] the best and get yourself on the unending journey
MAKING A POINT: ASHANK DESAI, CHAIRMAN, MASTEK
Ashank Desai is the chairman of the IT firm, Mastek. He was also the co-founder of NASSCOM. He is an alumnus of IIT Bombay and IIM Ahmedabad. Following are the excerpts from the conversation he had with the L!VE team:
What was your vision when you started Mastek, 24 years ago and how this vision has evolved over the years? See, I think, vision at a very high level does not change, what changes is the goals or the milestones. So our vision has always been building a company which provides business solutions incorporating the functions of both management and software technology and thats why the name Mastek. We believed that we are able to deliver solution globally which can impact masses. Having said that, it is also about making difference in lives of our customers, employees and to make them realise that they are also making difference and this has not changed over the years. What has changed over the years is how large we wish to become, what markets we wish to serve, where we will not do business. So these are some of the things which have changed over the years. What was the tipping point in your life?
It would be difficult to think of one single point. But one thing, I would like to mention here is that we were the first company to give ESOP to employees in IT sector, which gave confidence to other people in IT industry. Apart from that, yes the place where it all started IIM Ahmedabad, was in a way a tipping point. What is the value system you believe in, as a business leader? Business has two main components: One is vision which is the top floor and the other is Values, which is the foundation and both are required simultaneously. If you have value and no vision then you are running a charitable organization and on the contrary if you have only vision and no values, then that is not what the world is looking for in terms of business. Thus values are the guiding principles on which we conduct our business. In Mastek, we have a set of seven well defined values. In fact, someone asked me a question few years ago as to how to define values. I told him that its quite simple, you just [have to] write down what you currently believe in, that is, what your values are and they should not be a thing of the future. Values are what you believe in and thus they automatically manifest in the organization.
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| F A C E T O F A C E | ASHANK DESAI |
Who happens to be your role model? Was it different when you started from what it is now? Its like one cannot have only one role model in life as we like many qualities in many individuals. Every person brings in a new dimension in life and thus I had a lot of role models. For instance we had Mahatma Gandhi who inspires to stand up against evil, we have people like Bill Gates and Steve Jobs who showed us what entrepreneurship is all about. Here in India, we have Narayana Murthy demonstrating leadership in Indian context. These men are the ones who inspired me over the years; I took some inspiration from Peter Drucker which gave the insights on management. One can take inspiration from Pandit Nehru also for being the first politician and taking steps like setting up of IIT et al.
participation out of subscribing to values. It is very important to make people feel that they are being heard and treated as fellow partners rather than employees. Also of importance is continuous focus on stakeholders and seeing how you can deliver value to them. Do you have any message to students who are going to become the business leaders of tomorrow? I think India needs talented people like you and in that situation what is more important is to recognize what your organization, company and country need from you. You should put your best and benchmark it against the whole world. You can stretch yourself to [be] the best and get yourself on the journey which is unending as the world is moving. Set a goal which is moving, unending i.e., set a goal which is a journey. How do you associate leadership with innovation? One has to define innovation in a clearer sense as innovation need not be in technology, it can be in everything; Changing the way we look at the world, the way we do business. For example, Mahatama Gandhi was innovative in a sense, in the way he created Satyagraha. I will say innovation is not the only part of Leadership. Thus, innovation is not necessarily a sufficient condition, one has to go beyond it, thus innovation is a good thing to have but you need to look beyond it as a leader. As you have operated across the globe; did you find any difference in the leadership styles found here and in other countries? I think the way people conduct business remains the same but what changes is the kind of behavior and the types of tools you use. And that may be because of culture or the regulations of that country. So the only change is in understanding the context but basic conduct and values remains the same. How important is it for a leader to connect to the society? It is very necessary as it helps in understanding the discontinuities in business and the new issues. Thus any changes in the value system of the society have an impact on the type of business you have. So, one should be open minded in terms of connecting with society, not only as a social responsibility but from the business perspective too. As told to
One has to define innovation in a clearer sense as innovation need not be in technology, it can be in everything
There is a very thin line which separates managers and leaders. What is your comment on that? On a lighter note, there are more of books written on leadership than actual leaders. There are many views on this, but my view is that ideally I would like a person to possess both the qualities but then at times, its quite difficult. A manager is conventionally looked as a person who is good at executing things effectively and on time, executing process, motivating people etc. Whereas a leader is a part of larger set of things i.e. he creates vision, values, creates things which are built around dreams of people and then unites and inspire people to work towards the common goal. Thus leader looks beyond the existing realm of the business and creates something which is a step ahead. A leader is an inspirational figure and creates an intangible aura which is way beyond intellect and drives people towards the overall objective. What is the type of leadership style you believe in? Leadership style partly has to be related to some extent to the situation. It also must confer with the type of people we work with, technology we interact with and the customers we come across. My view about leadership is one with participation and an open atmosphere. Goals are important but it is also about whole hearted
- Ankush Grover & Deepak Gupta

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March, 2010
| F A C E T O F A C E | VIREN RASQUINHA |
We are not working against the Government; we are in full support of the efforts the Government is taking to promote the game
-VIREN RASQUINHA, FORMER INDIAN HOCKEY CAPTAIN
Viren Wilfred Rasquinha was the captain of the Indian national hockey team and the PHL side, Maratha Warriors. He retired from the sport to pursue management education from ISB, Hyderabad. He is currently the COO of Olympic Gold Quest. Below are the excerpts from the conversation we had with him:
What has been the force which has been driving you throughout your career? Game of hockey in itself has been one of the major driving forces to keep me going throughout my career. It was an honor to play for the country and to contribute to its success in every possible way. Do you think that our hockey team has been facing a leadership crisis over the last few years? The current state of the game can be attributed to various reasons and leadership is one among the many reasons. We cannot specifically quote leadership as a big reason as there are few other concrete reasons also. In your opinion, what elements will ensure a win for Indian hockey team in Olympics 2012? We need the best support staff, best nutrition for our players and a lot of impetus to grass root level domestic hockey, then and only then we can think of clinch-
ing the gold in Olympics 2012. What according to you have been major differences in the way of working of BCCI & Indian hockey federation (IHF)? Let me answer it by quoting an example. For instance IHF considers advertising the game and conducting marketing related activities as an expense where as BCCI understands that it is the need of the hour and thus treats it as an investment. Now, this might look as a very basic example, but then it is good enough to understand the difference between fundamental philosophies of working between the two apex bodies. IHF needs to have vision for the Indian hockey and it must think big in order to realize the same. Why Premier Hockey league which started off with such a great fanfare, turned into a failure? I believe that Premier Hockey league was the best thing that could have happened to domestic hockey at that time. However, we missed the opportunity to make it big due to many other reasons; one of them could be the failure in generating sponsorship. Thus we could not turn it into a self-sustaining model. Moreover, Indian team was also not performing well at that point of time at the international level, so fans lost interest in the game.
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| FACE TO FACE
| VIREN RASQUINHA |
Follow your passion, follow your dream because it is very important to do in life what you love doing and that is what I have done
What has been the major difference which you have felt while managing sports and business? Well, with my experience as the captain of the national hockey team then, and now as a COO of Olympic gold quest (OGQ), I feel that there are a lot many things which are common in both the entities. The way we have the vision, strategy, team building, funds and people power in a company, we must have a long term strategy and vision in sports also. And yes, finances and people power are the must haves for sports. create & sustain an emotional connect in the masses for the game. What was the major reason for you to join Olympic Gold quest? Follow your passion, follow your dream because it is very important to do in life what you love doing and that is what I have done. I have followed my passion as I was always passionate about hockey and my dream to see our country winning good number of gold medals in the coming Olympics. So there you see, its a perfect comWhat was the toughest challenge which you encoun- bination of passion and dreams which made me join tered in your life? Olympic Gold quest See, life is full of challenges and in my opinion facing challenges is the best way to learn things. It is difficult to Where do you think Olympic Gold quest fits in current quote precisely as to what has been the most challeng- Government efforts for 2012 Olympics? ing of all but I feel that when you are on losing spree, We are not working against the Government; we are in people start blaming you for everything that is going full support of the efforts the Government is taking to wrong. And that is the time when you have to maintain promote the game. We work over and above the efforts your composure and must keep your spirit high. So after already put by the Government. The Government is doeffects of a loss can be termed as challenging times. Apart from that I faced a lot of people related issues ing a fair job in building the fundamental skill sets of an during Punjab-south problem in the hockey team. It was athlete and bringing them to a good level and then we a tough time keeping the team together and to ensure work for enhancing those skill sets and take the athletes that they perform as a unit. a step ahead. What according to you is the major ingredient to sustain interest of Indian masses for the game? Mass awareness, thats it! Going forward we need to
As told to
- Ankush Grover, Varun Purohit
& Deepak Gupta
L!VE
March, 2010
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| ALUMNI SPEAK
| IT |
Major Changes in Indian IT Services Scenario since 2000
- Akash Mavle
acquire niche companies in various verticals with product expertise or consulting capabilities Ability to do IT transformation deals: Earlier only IBM was considered to be a serious player who could pull through complex transformation deals involving software, BPO, KPO and last but not the least taking customers assets on the balance sheets. Looking at some of the deals signed by TCS, HCL and Infosys in last 3 years it is evident that most of the SWITCH companies have created that mindshare as well as the strength to do the same.
ast 10 years have presented unprecedented opportunities to Indian IT services companies and they have delivered it by creating structures to capitalize on these opportunities thus getting into the next orbit where only the BIG 3(Accenture, IBM and EDS) used to play. Indian IT companies have transformed themselves in a big way and have gained a respectable mindshare vis--vis the global players.
Rise to the Prominence -SWITCH Companies

Till 2000 most of the IT buyers, large and medium companies favored big companies like IBM/Accenture and EDS while considering their outsourcing contracts. Post 2000 it has been observed that CIOs of the buyer companies have acknowledged the presence of SWITCH (Satyam, Wipro, Infosys, TCS, Cognizant and HCL) companies. If you look at the growth rate of these companies since 2000, it has been more than 40% year on year basis. According to Forrester comparison done between the BIG 3 (Accenture, IBM and EDS) and SWITCH companies, there are three areas where SWITCH companies have delivered well and that makes them comparable to the BIG 3. Capabilities: They have created vertical industry capabilities by way of creating teams from various domains.TCS and Infosys have created exceptional capabilities in Banking and Financial services vertical. They not only have service leadership but also have created portfolio of products catering to some of the toughest areas like Core Banking. Financial Strength: All large IT services companies have huge financial muscle. This is evident by looking at their balance sheets. All of these companies have huge market capitalizations and lot of cash on their balance sheets. That makes them far more prepared to
Emergence of Tier II Indian Players

Companies like Mindtree, Zensar, Mastek, Polaris, L&T Infotech, Hexaware and IGate have filled the place for niche players in certain verticals as well as have demonstrated their capabilities as companies who could service medium enterprises (Turnover of USD 1 billion or less) across the globe. While large companies were getting into Fortune 1000 contracts, smaller, tier II companies from India too were getting pieces of large 5-year and 10-year deals from these medium enterprises since 2000. This has been achieved by way of having a faster learning curve for these companies as compared to SWITCH companies. SAP and Oracle enterprise package implementation practices were built in less than 5 years by all these tier II companies. This is almost twice as fast as compared to SWITCH companies. Their tendency to create strong vertical practice in these companies has given them consistent business over the years. Mindtree has created excellent outsourced R&D practices taking cues from its parent organization Wipro. Zensar has achieved a good name in MRD vertical (Manufacturing, Retail and Distribution), Hexaware created Indias largest (at one point in time) practice of PeopleSoft professionals, L&T Infotech created very good strengths on Mainframe and other
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| ALUMNI SPEAK
| IT |
IBM technologies and so forth. These tier II companies have achieved this by bringing about innovative changes like: Niche Practice Creation: They have adopted make or buy option, but clearly their strategies have been laser sharp focused on their market segments. When Zensar realized that they have to create a very strong team of SAP consultants apart from Oracle consultants they went ahead and acquired OBT Global, a pool of more than 300 SAP Consultants. Creation of Strong Sales Presence in US and Europe: All of the Tier II companies have created teams of local sales people supported by Indian sales, onsite. This is supported by team of people who do lead generation sitting in India.
Build relationships with Analyst firms: Most of the large and medium business CIOs rely heavily on the advice of Gartner, Forrester and IDC. It is important to get in their radar as well as allow them to have organizational visibility. This has been actively pursued by most of the tier II companies mentioned above. The growth of the Indian IT industry has been phenomenal in the past decade and it will be interesting to see if the momentum is maintained in the light of new challenges posed by the dilapidated economic scenario.
(Mr Akash Mavle is from the batch of 1998 at SJMSOM, IIT Bombay. He is founder CEO of Solversa Technologies and also a visiting faculty of Entrepreneurship at SIBM Pune.)
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March, 2010
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| INDUSTRY SPEAK
| FINANCE |
Will an appreciating rupee against the dollar mar Q4 Indian IT results?

Diversifying geographic risk will limit the impact:
- JASLENE BAWA, FINANCIAL RESEARCH ANALYST, VALUE NOTES

Hedging benefits due to exchange rate fluctuations:
The impact of an appreciating rupee vis--vis the US dollar will be limited on Indian IT companies, as the contribution of US towards Indian IT revenues has been steadily reducing. The combined revenues of Indian IT & ITeS in fiscal 2009 were nearly US$60 billion. Of this, USA contributed roughly around 50%. This figure has been witnessing a decline over the past few years. Geographical diversification of the top tier companies mentioned below gives an indication of the broader trend.
The Rupee has appreciated over the past year by more than 6%, which has had a notable effect on both the top line and bottom-line. The RupeeDollar exchange rate advantage for a company would ordinarily lie in the range of 10-12% that does not undertake any kind of currency hedging activities. However, if we evaluate the top few firms, the average benefit a firm enjoys on account of some degree of hedging amounts to around 2 3% on the bottom-line. This is to an extent offset by the considerable hedging activities undertaken by the IT majors, the consequence of which translated into forex losses for them in the Dec quarter. This may bite them again this quarter Q4 FY 2009. For example, Q3 FY10 results indicated that TCS suffered an exchange loss of Rs3,547 lacs significantly less compared to the previous period loss of Rs25,059 lacs (Q2FY10). Q3FY09 results indicated that Infosys suffered an exchange loss of Rs70 lacs again less compared to Rs 140 lacs a year earlier (Q2FY09).
TCSs share of total revenues from USA has declined to 51.38% (FY2009) from 52.43% (FY2006). Infosys on the other hand has witnessed an increase in the share of revenue originating from USA to 65% (FY2009) from 63.8% (FY2006). Though the share of North America has increased, a noticeable trend witnessed in the revenue share is that, Infosys is slowly increasing its focus on India and Rest of the world. Wipros share of total revenues from USA has declined to 60% (FY2009) from 63% (FY2006). The main reason behind this decline in revenues from the US is that the IT companies are shifting their focus to Western European and Asian countries in order to diversify their risk to not just a particular geographic region. Especially after the US financial crisis and its far-reaching effects, IT companies have gradually shifted their geographic focus to other regions. For example, Indian Tech major Infosys added around 8,719 employees across Indian offices. The company has set up their first delivery center in New Zealand that has 100 employees onboard. Similarly, they have set up a software development as well as a back office centre in Brazil. TCS and Wipro also have their operations in Brazil and other European countries.
Cross conversion of Currencies:
Majority of companies register their revenues in Dollar, Euro, British Pounds and Australian Dollars. However, another issue with this currency reporting is the affect of cross conversion on companies such as Infosys, which derives 35% of its revenues from the Euro, British Pound and Australian Dollar. The US$ has been depreciating against these currencies. The dollar has depreciated 7% against the Euro, 4.5% against the Yen and 13% versus the pound in 2009. Cross conversions of these earnings into US$ has a positive 2-3% impact on the companys top line. Taking these factors into consideration, the currency appreciation will have a relatively positive impact on the IT results.
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| STUDENTS SPEAK
| INTERNATIONAL |
Trade in the EU: a means, not an end in itself

Peace is the natural effect of trade.
Baron de Montesquieu
- SRIYA CHATTERJEE, ESSCA, FRANCE & ITM, KHARGHAR

At the beginning it was a gamble: would fullgrown nation states with great historical heritage like France accept to have decisions, rules and even sanctions imposed on them by a small office of experts in the name of the common good? Would they not rather fall back in the old power games of big against small, nation against nation? Jean Monnet won his bet. The small community focused on coal and steel only has now become a Union of 27 members that has established a fully developed single market across the continent, eliminated trade barriers, abolished borders, harmonized norms and standards, set up a complex institutional framework, and paved the way for an integration process that has gone far beyond the market and the economic sphere. Because, as Montesquieu suggested and Monnet confirmed, trade and prosperity are not an end in itself, but only a means to achieve an overarching purpose: PEACE. The boring, but peaceful routine of negotiation, bargaining and compromise that characterizes the European Union of the new millennium makes it difficult to believe that Europe was at the origin of two World Wars in the 20th century. In many respects the EU is still found wanting in some aspects: decision-making is slow, processes are often bureaucratic, and once in a while protectionism shows its ugly face. But it is a wonderful laboratory experiment that shows that it is possible to overcome centuries of warfare and hatred, design a completely new way of economic collaboration, and in the end even become friends.
s early as 1748, the great French political philosopher Montesquieu concluded that Peace is the natural effect of trade. For Montesquieu, it was the principle of interdependence that could bring certain pacification into conflict-laden relationships between nations. According to this great thinker, the objective should be to make nations become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities. This principle, formulated at a time when Europe was nothing more than a battlefield of ancient states, when an open market across the entire continent was totally unimaginable, has finally been put into place two hundred years and two atrocious world wars later. Its illustration is the European Union. It took another great Frenchman, Jean Monnet, to put it into practice sixty years ago. Like Montesquieu, he considered trade and economic partnership to be the only way out of the devastated condition Europe was in, after the World War II. In May 1950, he drafted the master plan of what was to become the EU of today. It started in a limited industrial sector, with the European Coal and Steel Community made up by six original member states: France, West Germany, Italy, Belgium, the Netherlands and Luxemburg. The guiding principle was the acceptance of pooling national sovereignty in a major economic field and thus let a supranational authority which has now developed into the European Commission take decisions on behalf of the communitys shared interest.
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| S T U D E N T S S P E A K | SOCIAL NETWORKING |
SOCIAL NETWORKING BATTLE

The cat is out of the bag and the BUZZ is enormous
- DEEPESH DHAKAD, SJMSOM, IIT Bombay
Google has joined the social networking band -wagon with Buzz and looks like they are in for a real game this time. There is a lot of discussion going around as to how it will compare against the formidable competition from Facebook and Twitter.
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Lets try and look at it like every MBA is trained to do, via a matrix of comparison
Comparison Matrix
About It
New Kid of a mighty par- A spoilt child of a brave ent (Google) parent (its CEO) Estimated to sit on a user base of over 100mn active Gmail users, they have access to the most popular webpage in the world, google.com. Talented bunch of people, supported by intelligent researchers, to develop it further. Integration with Gmail. Existing user base of Gmail in inheritance. A bit too late to the party. People might not be looking for yet-another-socialnetworking tool. Google had series of failure with its social media strategy. Wave and Orkut are such examples. Boasting over 400mn users in just a few years, theyve saturated Gen Y in US, and have had global expansion at record rates. Rapid US and international growth over the last few years bodes well. Hugely popular among the youth Rich set of third party developers which make stay on FB more exciting. Struggles with the conundrum of having promised users a closed experience whereas to be successful requires them to be open. Historically poor track record in meeting privacy expectations of customers, and overall it is considered to have a complex interface. By integrating Facebook Connect everywhere, the service becomes ubiquitous, and therefore the default identity and default address book for consumer behavior.
Is it a stream, river, riverlet? Difficult to choose what to follow. Although difficult to track, estimates indicate 75mn active users, but doubts are emerging about reduced rate of growth. Usage by tech savvy, media, and celebs. Extensive adoption by the influential business & media people and celebrities. Very simple and easy to use.
Statistics
Strengths
Weaknesses
Biggest weakness is its simplicity. People, brands, organizations are still trying to understand how to use it effectively.
Infrastructure has also shown strain at times of peak load.
Opportunity
One word for this is IMMENSE. The more people use it, the more number of # tags they create, the more information they share, the more opportunities it creates for Google to monetize.
Establish a formal medium to interact and make it clear to people on how to use it for their business/personal advantage. Some more features might come in handy in the light of increasing competition esp. BUZZ.
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Threats
Facebook has intentions to develop an email web client under the code name of Project Titan. If that attracts traction from users, Gmails popularity might take a severe hit.
Increasing noise to signal ratio is the biggest concern for Facebook. Users are becoming increasingly irritated with all the noise (Farmville, Mafia Wars, etc.) that turns up on their walls. .
They dont have an established business model as yet. Many ways to make money are being experimented. This brings Twitter to a Catch -22 situation. The more successful they become in-terms of popularity, the more strain it puts on their infrastructure. Like gas, water, or power, Twitter is likely to fade into the background and become a utility thats integrated into everything someday; even your fridge will Tweet.
Future State
BUZZ will generate heavy interest after fixing some security issues that were raised. It would be slow starter and steady adopter. It is inherently the best way to interact socially with its integration with Gmail. Integrate with other tools like Search and Chrome. Aggregate public content from Twitter and Facebook, intermediate and monetize their content.
A communications platform for consumers and brands. Expect Facebook experience to be in many public experiences and mobile devices.
Plan of Action
Get open now. Reward users to share more information in public places like restaurants or in media reviews in exchange for other values. Concentrate heavily on getting Project Titan email feature right and near perfect.
Develop a vision to become the dominant protocol over SMS. Target to improve the infrastructure and allow the developers to create utilities around Twitter.
Facebook has no immediate threat from Buzz but Twitter has really got something to worry about. Buzz will gain momentum and will benefit heavily from its integration with Gmail. It gets Gmails millions of user in gift which places Buzz quite a few steps ahead in terms of a new service when it comes to number of users. Buzz should leverage that opportunity to create a better platform and deliver lower noise to signal ratio to its end users. Buzz is Twitter for people with long attention spans. No limit of 140 characters. With inherent features of easy filtering and discovering of new and better suited people for your taste of information, the quality of conversation in Buzz will increase for an individual.
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| S T U D E N T S S P E A K | MNP |
Mobile Number Portability

Varun Purohit SJMSOM, IIT Bombay
Introduction India, the 8th nation in Asia to launch Mobile Number Portability (MNP) which for a typical mobile user will mean that one can switch telecom service providers while continuing with the same mobile number. MNP is generally more effective only in those markets which are highly competitive and is beneficial for both the operator as well as the subscribers. India being a highly competitive market with more than 11 incumbents trying their level best to increase their subscriber base and revenues, analysts and experts feel that mobile number portability will surely make it difficult for them to achieve their goals amidst highly competitive environment. On the positive side, MNP offers flexibility to the customer wherein he can change his operator, but the negative side is that it fuels a lot of competition among the players. Thus in a highly combeneficiaries will be the subscribers. Charles Darwins theory will become more apt for the competitive scenario in India and thus it will be
Survival of the fittest.
petitive market like India, the real
As per the Frost and Sullivan report on MNP, there has been mix and match of successes and failures in Asian telecom market. In markets like South Korea and Hong Kong it has been proved successful, whereas it has been ineffective in Taiwan, Japan and Singapore. Indian Telecom sector is focusing more on rural penetration now and the sector will drive the next phase of growth. This strategy will surely reduce ARPU with increased competition once the MNP is introduced.
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| S T U D E N T S S P E A K | MNP |
Globally, governments have used MNP as a tool to improve the quality of the service of the incumbents and to create an environment of active competition which ultimately benefits the end user.
Cost & Benefits: Subscriber & Operators The biggest advantage for the subscriber would be to shift operators without changing their mobile number. Increased competition among the incumbents will lead to improvement in quality of service, product innovation, increased gamut of value added services being offered and all this at relatively lower cost than before. Of course all these attractive services will incur some costs. The subscribers will have to pay a specific amount as fees which will consist of porting fee and administrative fee. Along with this there will be a waiting period of approximately a couple of days which will further add to the inconvenience and the subscriber will be expected to adhere to one operator for a stipulated period of time before switching to other operators. The waiting period is different in different markets, for instance it is in the range of 1-2 days in Hong Kong while in Taiwan, Japan & Singapore its close to 4-7 working days. It will surely provide a fair chance to all the operators as now they can cater to the overall customer base and thus one with better quality of service and innovative product line will be sustainable in the longer term. The improved competition will foster more innovation in terms of products, advertising, and customer service and will improve the overall competitiveness of the industry It is considered to be the major reason for the future consolidations in the telecom industry. On the cost side, there will be large amount of investment which will be made in the back end services to ensure seamless services to the subscribers. The increased competition will put intense pressure on margins, increased investment in product innovation and advertising which will impact the bottom lines. Subsequently, the increase in churn rate will directly affect the top line of the service providers. MNP: A global experience MNP works pretty well in the backdrop of sound infrastructure, telecom system, highly penetrated market and an environment of fierce competition. Globally, governments have used MNP as a tool to improve the quality of the service of the incumbents and to create an environment of active competition which ultimately benefits the end user. Operators have been wary of the fact that there revenue will take a hit as the churn rate will increase considerably after the implementation of MNP but the global trends show the contrary. Various reasons are quoted for stability of churn rates like time taken in porting, administrative hassles etc. On the other hand quality of service, pricing and product innovation have been the major deciders for the subscriber in process to switch. MNP in India The major problem which the telecom sector in India is facing is of different revenue circles wherein the country is divided into four major circles depending upon the amount of revenue they generate for the operator. Quite naturally the highest revenue comes from the Metros, but owing to the saturation of this circle, more focused efforts are being put in to increase penetration in rural markets. Thus all the operators are experiencing a fall in their ARPUs. The growth initiatives are being taken up in rural markets but at the same time the metro circles will be brought in focus once MNP is implemented as it will provide the operators with maximum number of subscriber using the service. The new players will have to slog out to attract as much customers as possible as it will be a golden opportunity to attract customers from their major competitors. As per the ACNielson survey being conducted on the satisfaction levels of subscribers with their existing operators, around 43% of the subscribers gave a negative reply i.e. they are the ones who are not satisfied with any one of the all component of service delivery by their operator. The major players like Bharti Airtel and Vodafone will have to defend their leadership position from the existing operators like Idea and the new entrants like TATA Docomo. The need of the hour is to invest in improving the quality of existing service as well as to strengthen the brand so that the migration is less and thus can be sustained in long term. With MNP in place, the India
consumer will truly be a king.
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| R E S E A R C H L A B S | MICROFINANCE |
SCOPE OF MICROFINANCE INITIATIVES: BUILDING BLOCKS OF DEVELOPMENT
DISHA BHANOT, RESEARCH SCHOLAR SJMSOM , IIT Bombay
ment that envisions a world in which low-income households have permanent access to a range of high quality financial services to finance their income producing activities, build assets, stabilize consumption, and protect against risks. The financial services are not limited to credit, but include savings, insurance, and money transfers [1]. Microfinance
Industry targets individuals and groups, particularly women who are socially and financially excluded, marginalized, vulnerable and disadvantaged. Scope of Microfinance Initia-
roadly microfinance can be defined as , a move-
tives
Study by Jonathon Murdoch and Barbara Haley (2002), leading experts in the study of microfinance and its effect on poverty alleviation, concluded that microfinance has proven to be an effective method of poverty alleviation as it targets to achieve seven out of the eight millennium development goals : 1) eradicate extreme poverty and hunger, 2) achieve universal primary education, 3) promote gender equality and empower women, 4) reduce child mortality, 5) improve maternal health, 6) combat HIV/AIDS, malaria, and other diseases, 7) develop a global partnership for development and 8) ensure environmental sustain-
ability [2]. In India, with over 400 million plus poor people and more than 250 million people living below poverty line, microfinance industry can provide a coherent framework for practical action at the local and national levels to reduce poverty. The Microfinance Industry, with an estimated lending volume of USD 39.4 billion (as of 2008), spread across 10,000+ Microfinance finance institutions (MFIs) providing financial services to an estimated 150 - 200 million of the worlds poor holds has immense potential for growth. MFIs have adopted several
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innovative practices like use of village banks, trust and group lending, programs focused on women, pre-loan savings requirements, gradually increasing loan sizes, an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly , high interest rates to ensure clients repayment [3]. Microfinance, clubbed with the spirit of entrepreneurship has a pivotal role to play in community development activities and social empowerment through encouraging local economic activities, enhancing awareness of relevant local issues and generating employment. Microfinance, micro entrepreneurship and social entrepreneurship serve as a combined tool to reduce poverty, fight exclusion (financial and social), generate employment, promote faster growth, enhance awareness about local relevant issues, encourage local and economic activities and ensure full enjoyment of all human rights.
The Challenge Ahead Microfinance through MFIs aims at providing financial services to the poor, with an eventual goal of promoting livelihoods of the poor and empowering them. The number of MFIs in India is estimated to be slightly over 1000; however, not more than 10 are reported to have an outreach of 100,000 clients. Only a handful of MFIs can be called Successful. One such example is that of Self Employed Womens Association, SEWA founded by visionary Ela Bhatt. SEWA is a trade union of more than eleven lakh women workers of the informal sector. Shri Mahila Sewa Sahkari Bank Ltd., is SEWAs largest sister organization with over 3 lakh depositors and Rs 100 crore working capital. The diverse range of financial services (micro savings, micro loans, micro insurance, micro pension etc) provided by the bank has helped the women to escape from the clutches of money lenders, to res-
cue their mortgaged/pledged assets, to create their own assets, to expand their business through productive credit, to cope with losses due to sickness, accidents, death, floods and riots, to increase their bargaining power, to improve their living conditions and to empower themselves ultimately. In short, SEWA Bank has proved that poor women are economically active and therefore reliable, sincere and bankable [4]. Success stories like SEWA are few, the remaining majority of the MFIs are dying a pre-mature death because of their quest for profitability & efforts at expansion beyond optimum levels (trying to become like mainstream institutions) which leads to the sector losing its very basis of wider support from society and their quest for wider outreach facing a severe setback. It is a matter of concern that even after recognizing that the narrow offering of microcredit is not doing
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much for the clients, MFIs have not been able / willing to offer savings, insurance, remittance and other financial services. Over the years microfinance has been looked upon as an effective tool for poverty alleviation and empowerment of poor. However microfinance in itself is not the magic wand against poverty and other evils of society, because when the pangs of hunger, lack of education for children, repair for homes etc have all been successfully attended to with the diverse range of financial services provided by MFIs, there arises a need to think beyond. What NEXT, is the question being asked. The challenge lies in igniting the spark in group-based micro entrepreneurship model to combat unemployment, level income inequali-
ties and make the society productive. els which exist with the people and MFIs have a big role to play in en- not for the people. suring effective transition of microfinance into micro enterprises [5]. References [1]: http:// The Microfinance Industry in www.microfinancegateway.org/p/ India is faced with the challenge of site/m/template.rc/1.26.9183/ addressing the above mentioned [2]: Murdoch Jonathan & Barissues with sound and holistic busi- bara Haley (2002), Analysis of the ness practices. A detailed and thor- Effects of Microfinance on Poverty ough study of successful MFIs like Reduction, NYU Wagner Working Grameen Bank, SEWA, Sanghamitra, Paper No. 1014 BASIX, Share, Spandan etc will help [3]: Consultative Group to Assist to fully appreciate the underlying the Poor (CGAP): Microfinance principle of perceiving the poor and Gateway: http:// vulnerable as strategic partners in www.microfinancegateway.org/p/ the process of development instead site/m/template.rc/1.26.9183/, of passive recipients. A participatory 2010 system involving peoples feedback, [4]: http://www.sewabank.com observations, inputs will help in sus[5]: KG Karmarkar (2008) Mitaining/developing those MFI mod- crofinance in India
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| R E S E A R C H L A B S | FINANCE |
Effects of Climate Change on Financial Sector

Anirban Naskar, SJMSOM , IIT Bombay
Abstract
Burning hydrocarbon e.g. fossil fuel emits carbon dioxide and other greenhouse gases like methane. Nature has its own ways of absorbing these green house gases. But since the Industrial age we have been emitting green house gases at a higher rate than the capacity of natures sink. These green house gases trap heat, affecting the environment and ecosystem in numerous ways. The preindustrial carbon dioxide concentration in atmosphere of around 280 ppm has risen to current level of 386 ppm. The Intergovernmental Panel on Climate Change (IPCC) project CO2 concentrations in 2100 ranging from 540 to 970 ppm. This will lead to an increase in temperature of 1.5 to 5.8 degree Celsius. Due to this rise in temperature, sea level will increase by 0.09 to 0.88 meters because of thermal expansion and loss of ice from glaciers and ice caps. This will upset the finely balanced global climate system causing ever increasing number of extreme weather events like storms, draughts and floods. Rapid action has to be taken to reduce this GHG emission so as to protect our environment, ecosystem, socioeconomic and political stability of several countries. In this article an effort has been made to identify the effects of climate change on macroeconomics, capital markets and financial and actuarial sectors.
Effect of climate change on Financial Industries

Climate change will lead to uncertain extreme weather events in future. It will affect the socioeconomic balance of human societies, trade and commerce, availability and allocation of capital, corporate strategies and financial policies of Governments. Sectors with Potential Physical Risk The sectors which are very sensitive to climate change are
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Historic Atmospheric CO2 Concentration (ppm) for 1,000 Years
Agriculture, Forestry, Fisheries, Healthcare, Insurance and reinsurance and Real Estate. Insurance, Re-Insurance, Life Insurance and Pension Climate change will lead to geographic and demographic changes in various parts of the planet. Mortality and morbidity will be affected by milder winters, increased temperature spreading tropical diseases and pests and extreme weather events. Life insurance and pension industries use financial models based on financial assumptions on the links between economic variables, such as investment return, interest rates, inflation, and salary increases, which have historically been stable. In post colonial era we have lived in a time of steady economic growth and prosperity. In UKs perspective, The UK Chartered Institute of Insurers predicts that weather related damage will be larger than economic growth by 2065 (Nick Silver, May 2003, The Actuary). The insurance industry
will be the first to bear the cost of such unprecedented events and will be passing the liabilities to the common people in terms of increased premium. Sectors with Potential Regulatory Pressure After the Copenhagen Summit, Governments from nations all over the world have come to political agreements, at least morally, that climate change is a reality and we should take action to nullify its effects. As per the Copenhagen accord and other announcements from the Governments around the world there will be an effort to control GHG emissions. Hence, the industries responsible for creating GHG emissions will be asked to take the first steps. The industries which will be affected the most by modified policy norms are fossil fuel power generation, oil and gas extraction and refining, manufacturing requiring high amount of energy, chemical, cement, ceramic and glass, paper pulp, transportation etc.
Asset Liability Management Asset Liability Management is very crucial to the financial business as most of the assets and liabilities translate into medium to long term cash flow projections. Typically, a bank lends funds over a period of 20 years. A life insurance company receives regular premiums for periods of often higher than 30 years to guarantee over the mortality or the morbidity (invalidity) of an individual. A pension fund receives contributions from individuals aged 18 to 60 and will invest these contributions into assets so that it is able to provide adequate funds for these individuals at retirement age. (Impacts of Climate Change on Financial Institutions Medium to Long Term Assets and Liabilities by Louis Perroy, 2005). Climate change will change the input variables of several assumptions on which these industries stand.
New Opportunities: Clean Development Mechanism (CDM) Projects

As IPCC, UNFCCC and Governments around the world are trying to find solutions to control GHG emissions and several industries are finding opportunities in this. Cap and Trade policy has enabled companies in developing countries to import technologies from developed countries. This has made some projects economically profitable. Several CDM projects are being implemented which will offset GHG emissions created by the
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industries in the developed countries. Such project types include Wind Power Generation, Hydro Power Generation, and Thermal Power Generation from animal waste, Green Transportation System, and Wastewater Management, Landfill Management, Power Generation from Bagasse etc. Revenue Streams of CDM Projects CDM projects generally earn revenue in two ways: 1.Revenue from Business Operations 2.Revenue from Carbon Credit or CER (Certified Emission Reduction) There are many projects which would not have been economically feasible in the absence of Carbon Credits e.g. thermal decomposition of HFCs, flaring of methane from urban waste dumps, capture of N2O from nitric acid manufacturing process etc. There are several projects which have multiple carbon layers e.g. a Municipal Solid Waste Management project claims CERs for captured methane and for generating energy by replacing potential usage of fossil fuels. Cost of CDM Projects CDM projects are registered with UNFCCC. Submitting proposals, validation, monitoring and verification processes are very costly. The costs depend upon the amount of CERs claimed over the period of seven to ten years. Opportunities for Financial Intermediaries The documentations, execution, finding CDM partners, ad-
dressing legal issues and managing securities and certificates require experts in the financial fie ld. Th ese needs have created a different industry comprising CDM consult ancies, Investment Banks and Carbon Funds. World Bank has taken an initiative to start a carbon fund Cost of a typical CDM project (Source: Carbon Credit World). c a l l e d Standard terminologies as per UNFCCC have been used in this Prototype Car- figure. Assuming a 10-year project, recurrent costs discounted bon Fund. Car- at 3% annual rate to express in present-value terms. Registrabon funds raise tion costs, Administration Fee and Adaptation Fund Levy not funds from CDM included. partners from developed countries and invest in Though India has agreed to CDM projects in host countries. cut its emission level, it is not unTheres an organization called der any binding condition to honor Carbon Disclosure Project which its promise. There is a lingering helps companies measure their doubt whether Indian companies carbon footprints and certify those. will be under any legal constraint. This kind of service will help these Thus demand of CER trading might companies enhance their brand not be acute in near future, in Inequities. dia. Climate Exchange Climate exchange is a place where the CERs are traded. Already European Climate Exchange and Chicago Climate Exchange have matured, and volumes of daily trade are satisfactory. In India there will be a new climate exchange, called India Climate Exchange with the help of Chicago Climate Exchange. Advisory board for the same has already been formed it will be chaired by Dr. Rajendra K. Pachauri.
Concluding Note
Climate control has posed risk over the future businesses; as well as opened up windows of opportunities for new businesses. Innovative financial instruments based on CER securities are sure to crop up in the near future. It has also opened up tremendous opportunities for CDM consultancies and carbon funds.
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| B I Z W I T S | QUIZ |
(Contributed by Sandeep G Nair & Ujjayan Sen Gupta, SJMSOM, IIT Bombay)
1. The brand recently went for a new positioning with a new campaign called I Hate Ugly". The campaign is supposed to be an unambiguous way of expressing ones desire to take initiative and change the world around him to suit ones vision of his/her own world. Which brand are we talking about? 2. With which brand/organization/company will you associate the quarterly magazine called RL? 3. This company recently announced that it will carry on with its core branding. Three such derivatives will be called Core i7 , Corei5 , Corei3.Which company? 4. In pursuance of an appeal by the then Prime Minister, Pt. Jawaharlal Nehru in January, 1948, the _____________ was established with public contributions to assist displaced persons from Pakistan. Assistance from ________ is also rendered for medical treatment like heart surgeries, kidney transplantation, cancer treatment, etc. The ________ consists entirely of public contributions and does not get any budgetary support. The corpus of the fund is invested with banks in fixed deposits. What?? 5. This theory was developed by Gustave Cassel in 1920.It is based on the law of one price. the idea that, in an efficient market ,identical goods must have only one price. What theory are we talking about? 6. Who set up the venture capital fund called Catamaran Venture Capitals? 7. _______ shares its name with existing products. The most publicized is the Fujitsu _____, a mobile multi-functional device sold to retailers to help clerks verify prices, check inventory, and close sales. The Japanese company Fujitsu introduced the ______ in 2002, and the following year applied for the trademark. But the firm found the mark was already owned by Mag-Tek. Fujitsu's application was listed as "abandoned" in April 2009, and the ownership of the mark is unclear. Fujitsu is consulting attorneys over what, if any, action it may take. In the first few days after the ______ release, some media and many online commentators criticized the name ___________, noting its similarity to__________, the common name for a sanitary napkin. Wired News said some women said this would make them less likely to buy the product. Which product? 8. _________________ is an Indian entrepreneur, consultant, and management expert. Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at the Ross School of Business of the University of Michigan. He is one of the recipients of Pravasi Bharatiya Sammaan awards in 2009, and was conferred the Padma Bhushan, an Indian civilian award, the same year. In 2009 he was named the world's most influential business thinker on The Thinkers 50 list, published by The Times. Fill in the blanks. 9. "Hello Twitterverse! We r now LIVE tweeting from the _______________. The 1st live tweet from _______! :) More soon, send yours," Creamer wrote on Jan 2010. Where did he tweet from?
Quetzal
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| B I Z W I T S | QUIZ |
10.____________was born in New Delhi. He attended Modern School, New Delhi before entering The Doon School, also his father's alma mater from 1981-83 before being home-schooled for security reasons. Starting university at Harvard, he got his B.A. from Rollins College, Florida in 1994 .He received an M.Phil. in Development Studies in 1995 from Trinity College, Cambridge.__________, after graduating worked with management guru, Michael Porter's Management consulting firm, Monitor Group for three years. His colleagues at the firm had no idea who they were working with as he was using an assumed name. He returned to India in late 2002 to run an engineering and technology outsourcing firm in Mumbai. Identify the person. 11.Connect the media baron Rupert Murdoch, Shilpa Shetty and the song Choli Ke Peeche Kya Hai? 12. It is also known as The City of Holkars. The city was built by Rani Ahilyabai Holkar, a famous queen of India. Formerly a major trading centre, the city, along with its satellite townships of Pithampur, Mhow, Dewasand Dharhas established a strong industrial base. The era of liberalization has seen _____ at the forefront of a number of privatization initiatives which include the country's first private telephone network. In the midst of such industrial activity, the city still manages to maintain its link with its past. _______ is also called as 'Mini Mumbai', due to the similar lifestyles of people residing here. (Clue: The only Indian city which can boast of two of the most premier institutes) 13.Gatorade recently announced it will discontinue the .... Focus line of drinks. Fill up the blank 14.Which English Web-based encyclopedia (also cofounded by Jimmy Wales), which lasted between 2000 and 2003, was the predecessor to Wikipedia? 15.Which recent program was promoted as "a once in a lifetime chance to change the face of sport"? 16._________ is one of the world's best known brands. In addition to the flagship magazine in the United States, special nation-specific versions of _________are published worldwide. The magazine has a long history of publishing short stories by notable novelists such as Arthur C. Clarke, Ian Fleming, Vladimir Nabokov, P. G. Wodehouse, and Margaret Atwood. __________ features monthly interviews of notable public figures, such as artists, architects, economists, composers, conductors, film directors, journalists, novelists, playwrights, religious figures, politicians, athletes and race car drivers. The magazine throughout its history has expressed a libertarian outlook on political and social issues. X, daughter of the founder Y, joined ________ in 1975 and became head of the company in 1988. She announced in December 2008 that she would be stepping down from leading the company, effective in January 2009, and said that the election of Barack Obama as the next President had inspired her to give more time to charitable work, and that the decision to step down was her own. Just as this country is embracing change in the form of new leadership, I have decided that now is the time to make changes in my own life as well, she said. Which brand? 17.'Women Against Lazy Stubble' is whose campaign? 18.What was founded in 1894 in Zlin by Thomas ..., from a family of cobblers? 19.'Communicate and Collaborate in Real Time' describes which application currently in beta version?
20.Which stationery brand chose something as a symbol "due to its capacity to endure long periods of
difficulty"?
(Answers are on page 39)
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| C R E A T I V E B E N D | BLOG |
Day Zero
- Paritosh Chaube, SJMSOM, IIT Bombay
First things first, this isnt about placements in a B-School, so those of you who dropped in with that expectation can safely navigate to some other page. Day zero can be related to any significant event concerning any individual's or group's life when a vital process is kick-started. Lets dig a little deeper... Day Zero for a fisherman when he feels that he must catch enough to feed the whole village. Its Day zero for a newspaper editor when he/she publishes an article which does not reflect a political bias. Its day zero for a singer when he/ she sings to feel the warmth of God and not to entertain or to earn fame/money. Its day zero for a cobbler when he shines them enough for the shoebearers to reflect upon themselves. Day zero for an Atheist is when he concedes that there is a power beyond human understanding, and, its day zero for a "Theist" when he stops preaching and allows individuals to realize/practice what comes to them naturally. It will be day Zero for the United Nations when it will be able to practically enforce "Veto power for all". It shall be day zero for Obama when he'll order his men to stop the mad race for weapons, when he can truly convey that he is the rightful owner of the Nobel Peace. Day Zero for an Ambani will commence when he decides to forgo collecting wealth for hims e l f . D ay Z e r o f or a Chandrashekhar Rao will be when he consciously discovers better ways of development than split n rule. Manmohan Singhs Day Zero shall begin when his party sheds the pseudo-secular robe, which, by all means, wont be any different from the day zero of an Advani, who will feel ashamed someday for compromising with his own religions tolerance principles. Day Zero for a Mayawati shall be that day, when she spends millions for a school or a hospital or an Old Age Home and then prove that she is worth a statuette! I havent seen my Day Zero yet... The urge is there, the competency needs to be developed... Deep down, we all wish to live that day... and not just leave it right there... instead, build on THAT DAY to have the day Ones n Twos n so on n so forth to follow up! Have you lived your day Zero? Perhaps the bigger question will be Will you ever live your Day Zero? Bigger still Do you know what your Day Zero will be like? Will you be able to unravel this conundrum some day? Well, that will indeed be your 0th Day!
mother's life is when she first
For instance, day zero in a
feels some life tickling under her belly. Day zero for a surgeon is when the first cut or tear is made with the intent of renewing/repairing what lies beneath the thick flesh. This is no different from the day zero of a rehab instructor, who, for the very first time, successfully gets rid of a thick-skinned addict and shows him the meaning of life beyond the addiction. Day zero for a scuba diver is precisely when the beauty of the mosses n the jelly fishes n the coral reefs blows him over and he stops using plastics the next day. Day zero for a Sachin is when they keep telling him that he must retire to give way to fresh blood and he realizes that the hunger is still not gone. "I'll play my bloody game as long as I enjoy it, let the critics get lost!" Imagine what would be
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Valentines Day
- Parasuram N. A., SJMSOM, IIT Bombay
Unlike other posts, I am not wasting any time before coming to the topic. This time of the year is certainly one of the most stressful to me and to many others of my ilk. As soon as India finishes observing a minute's silence to remember Gandhiji's martyrdom, the next big thing on the agenda for everyone is Valentine's Day. But why so, I must a s k ? ? Yours truly is leading a solitary life and my relationship status is well-publicized among my friends and yet, I have already been bombarded with a substantial set of queries asking about my plans on V-day. Further, what is with these colors and how can a color really be used to indicate "if I am in the market"?? Every time somebody asks me the question..so what color are you wearing this Vday... I am reminded of a stupid gimmick many ppl carried out on social media to increase awareness about breast cancer. Only I am not sure what is more embarrassing flashing my underwear color on social media or wearing my relationship status all over my physical existence on V-Day. To an average bachelor residing in a hostel, managing two clean pieces of clothing is tricky enough, without the additional of complexity of colors conveying your love life's deepest secrets. I googled out this whole color coding phenomenon and I am listing here the most popular connotations of colors: Blue- Im free Green- Im waiting Orange- going to propose Pink- accepted just now!!! Black- proposal rejected White- already booked Yellow- broke up!!! Gray- not interested Red- leave me While I am not contesting these codes, I do have some questions in my mind. Does a deeper shade of RED mean a strong "leave me" as in "dont even think about it!!" or did the people wearing PINK keep it as spare, just in case, and just got lucky?? On the whole this entire coding business is driving us back to racial discrimination in its most sophisticated form, differentiating people on the basis of color. Imagine the scenario, you enter a pub and see a person wearing BLACK or YELLOW, do you really want to sit near this character and hear their sob story (my gender neutrality begs appreciation here!!). On the other hand, you probably want to sit next to a PINKy person and try to grab to a free drink or two as celebration. Bingo... discrimination on the basis of color!!! (Me thinks, worse would be actually landing up next to an ORANGE and end up as his dress rehearsal partner...take that!!) Now that socially essential arguments have been put forward, let me come down to the more personal/emotional arguments. The two broad lines of argument on this topic are as follows: 1. This is a day for all the lovers to celebrate Love (almost as if its Diwali!!) 2. This is a day for all the others to find Love Now lets rip them apart systematically. Argument 1 is nonsense. Don't all lovers make/create/ manufacture/concoct love for the remaining 364 days of the year. Its not like Diwali when you are bombarded with sweets and crackers for just that one day. We, the single, have been painful witnesses to your public cuddling, kootchi-cooing and what not!!! So don't tell me that
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you are celebrating Love on that particular day and abstain from it on the other days of the year. And what the hell. when did you folks ever need a reason to gift a teddy bear, a chocolate box or whatever else is in vogue now!!! Just don't call it the festival of Love...and to think that you are actually celebrating somebody's death!!! Argument 2 is offensive. Nobody, take it from me NOBODY, ever finds love during Valentine's Day. Not only does it provide false hope to the usual-suspects of solitary living, it also gives the whole romance thing a marketplace atmos-
phere, feeding on supply and demand. You are either already in love and the mass hysteria is helping you express it or you are just feeling the peer pressure of not being found alone (screw the subtlety, without arm candy!!). In the first case you get your backside kicked and in the second case you are in deep trouble with either a wrong decision or worse, a compromise!!! Anyways, in case any of you think that it is possible to find love on Valentine's Day, this is what I have to s a y t o i t :
Planning to find love on Valentine's Day is like selling notional futures contract in love. You will most probably end up squaring up your positions in the spot market!!!
Thus, having successfully and single-handedly, sounded the alarm bell on Valentines Day celebrations, I request the powers that be to abolish the celebration of V-Day thus, protecting the society from racial hatred and keeping the population on a realistic leash of rom a n t i c i s m . My Lord, I thereby rest my case!!!
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| S T A R T - U P - S T O R Y | VOICE TAP |
one are the days when What happened in Vegas, stayed in Vegas. Thanks to the evolving model of Search engines and platforms like Facebook, Twitter, YouTube etc. access to information ceases to be a challenge. We are living in a world today where Facebook status is updated 1.5 million times a day, over 100 million bloggers post content every daythe paradigm has clearly shifted, so has the problem to filtering of information, rather than the access of it. Voicetap was conceptualized with the core motive of making access to knowledge, not information, a much simpler, faster process- and this is one reason they decided to go with Voice. No matter how fast we can type, it can never match with what we speak and how we speak. On top of that, talking to somebody who is an expert makes the process of knowledge transfer not only interactive and lucid
but also adds authenticity to it. Voicetap Technologies is a startup headquartered in Noida, NCR region and provides innovative solutions across platforms that help people improve their lives. Founded in March 2009 by Mrigank Tripathi (Management Consultant and MBA from INSEAD), Devanshu Pandey (ex Travel Guru, Mphasis, World Bank) and Vivek Khandelwal (Fourth Year Student at Dept of Chemistry) Voicetap is developing solutions for different domains be it connecting with experts to get the right advice, finding jobs over the phone or other things that matters to the end consumer Its flagship product is the knowledge engine, developed using proprietary algorithms and logic it connects knowledge seekers and experts together through mediums like text chat and voice chat.
The concept came about through a simple realization that people are not able to connect to experts to get the best answers to their queries because they dont know who the experts are. As a result, their immediate resort is to connect with family and friends. Family and friends might or might not be able to answer those queries depending upon their expertise and knowledge of that domain. Another common way to get answers is to search on the internet. Getting answers through internet search engines requires sifting through tens of thousands of URLs. Thus was born the idea on which Voicetap is based. What if you never have to spend money, time and resource to connect to an expert for knowledge that you seek? What if you could connect to an expert over the internet or better still - over the phone? One of the first products from Voicetap is Getafixx, a web based solution for connecting
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| S T A R T - U P - S T O R Y | VOICE TAP |
users to experts directly. As Devanshu says We did indepth studies into user behavior and usability of various platforms and realized that the maximum time a user spends on the web is on his email account and thats the perfect place for him to find knowledge. Thus, Getafixx is a knowledge buddy that resides inside the Gtalk client / Gmail, and you can ask it to connect you to experts on any topic of your interest. You dont need to know the expert, his location or any other details Getafixx will find him, and will connect the two of you. Talking about the users of the service, Vivek Khandelwal, a co-founder of Voicetap and presently an IITB student said, The applicability is immense. Students want to know about
career options, parents want to connect with other parents, the average investor wants to talk to the real investment expert and the job seeker wants to get tips on how to crack an interview. All this is real knowledge for which people inherently want to interact directly to relevant experts who can help them through the problem. Thats where Getafixx fits in. The response has been great. The next product from Voicetap is the Mobile version that allows users to connect to experts directly across 4 verticals Career, Education, Health and Money by simply dialing a number and searching for the experts in real time. The idea of having a personal assistant which can connect you to an expert and get your query answered is extremely exciting. The ser-
vice will be going live and will be available to the common public as a Value Added Service. It will be interesting to see the user response to the service and how the Voicetap model evolves with time. But the mechanism of seeking information for sure is changing. The concept of social search and wisdom of crowds adds value to the entire process as it keeps interaction as its core objective a feature that Web Search compensated with spam information. Technologies like voice recognition and social search, I believe would be the core features that would drive Web 3.0. We totally believe speech recognition will go mainstream somewhere over the next decade. - Bill Gates
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| S T A R T - U P - S T O R Y | GRIDBOTS |
ince long there has been a huge buzz regarding robots and the testimony of this are the robotics competition held in all the Ivy League institutions of our country. As Steve Jobs, CEO, Apple Computers said in one of his speeches, You got to find what you love addressing the Stanford graduates. Gridbots is the personification of the same thought given by one of the stalwarts of Silicon Valley. Gridbots came into existence in March 2007, conceptualized by young entrepreneur, Pulkit Gaur who earlier served as a Technical Manager in leading software MNC based in California. Currently operating from Ahmedabad, Gridbots has a team of 5 skilled professionals with specializations in domains ranging from machine vision, mechanical engineering, robotics and Artificial Intelligence. The initial idea was to revamp the existing startup Picporta, a next generation image storage, indexing and search
technology engine, which required resources and financial support on a continuous basis. Robotics was an obvious choice for the founder Mr. Pulkit Gaur as he substantiates, I have been actively associated with robotics domain since my childhood and [have] won various prestigious prizes during my undergrads. The initial business model was to provide consultancy for industrial clients and educational institutions in robotics as this required minimal investment. Thus Gridbots started conducting workshops for the students from different engineering colleges and soon the workshops were a big hit. We started getting participants even from IIT's said an enthusiastic Mr. Gaur. In the mean time they were approached by National Institute of Design who wanted Gridbots to conduct hands on session on advanced robotic and machine design for their post graduate students. Going forward, Gridbots realized that there was a serious dearth of products catering to con-
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| S T A R T - U P - S T O R Y | GRIDBOTS |
sumers needs in educational and other domains. Thus they started working on some prototypes which could fulfill the existing gap. Their arduous efforts in the field of robotics got the due recognition when prestigious newspapers and magazines covered their work. By means of this recognition, the company started getting their pre orders. This dream was initially visualized by 2 individuals, both coming from a humble background like the other stalwarts of our country, but today they have been joined by three others to turn that dream into a reality. Today we are a team of 5 people and are in process of hiring more than a dozen people for our organization quoted Mr. Gaur. Full and final propulsion for Gridbots has been kick started by CIIE: IIM Ahmedabad. Gridbots is among a fortunate few to be incubated in this centre. We have been fortunate enough to be incubated by IIM Ahmedabad business incubator - to help us grow and expand our business in other verticals said Mr. Gaur. Gridbots has a huge line of robots which caters to different needs, not only of businesses but also of households. The lineup includes Industrial Robots, Educational Robots, Consumer Robots, Research Robots and Smart Surveillance system. "When I told people that we at Grid Bots have developed a robot which can not only clean up your house but also keep surveillance and [will] SMS you when there is an unauthorized entry into your house, seldom would people
believe it. We have an order of supplying around 30 robots to an educational institute and are in [the] final round of talks with a Mumbai-based private equity firm to take our plan to a mass production level," says Pulkit Gaur. The arsenal of Gridbots has a huge diversity in terms of robots used for industrial, business, domestic as well as educational purposes. The company in such a small span of time has come out with a range of underwater robots which it names as SaUsR. The company has made forays into physical computing platform wherein it has developed Abacus which is a learning tool designed in a fashion so that it can be used by anyone and company would definitely like it to be used by everyone. Abacus can interact with the surrounding, take decisions, automate any device, can connect to internet, make robots and perform a full gamut of activities. Apart from making robots, Gridbots is also building full- fledged development platforms to satiate the hunger of robotics enthusiasts. Gridbots covers a wide range of streams when it comes to consulting. Starting from Consumer robotics to Industrial robotics and finally to Educational robotics, Gridbots caters to the consulting needs of almost all the customers. As already mentioned Gridbots is thus, equipped to prepare a brigade of young robotic enthusiasts in the country.
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| B I Z W I T S | QUIZ-ANSWERS |
Quetzal - Answers
1. Allen Solly 2. Ralph Lauren Polo T shirts 3. Intel Core Processors 4. Prime Minister's Relief Fund 5. PPP (Purchasing Power Parity) 6. Narayana Murty 7. Apple iPad 8. C K Prahalad 9. International Space Station (ISS) 10. Rahul Gandhi 11.Rajasthan Royals (Rupert Murdoch's son is one of the co-owners of the team and Choli Ke Peeche Kya hai fetched a Filmfare award to Ila Arun, who also sang for Rajasthan Royals) 12.Indore, the only city to have an IIM and an IIT 13.Tiger (After tiger woods scandal) 14.Nupedia 15.Intel Sports Inventor 16.Playboy magazine 17.Gillette 18.Bata 19.Google Wave 20.Camlin (Logo is a camel)
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|SOM-thing Special |
Nouvelle Vague December

acationone of the loveliest words in the English dictionary. Its a time when students seriously get ready with all the text books and referencesand pack them away so that they wont be discoverable for one whole month. Instead, it is the best time to relax at home or plan trips with family and friends, to forget about everything important and saying to oneself chill
- Vishwanath Pratap Singh SJMSOM, IIT Bombay others were busy devising operational and marketing strategies for these ventures. The students got valuable exposure to the real dynamics of running a start-up. Initiatives: Taking a step towards social responsibility, SOMites ventured out to help NGOs and not for profit organizations. In some cases, they contributed by taking up teaching assignments, working as community health service workers etc. and in other cases they used their managerial acumen to help these organizations better formulate their financial, operational and marketing strategies. This December was also used for planning the launch of the Film Club and the Fun Cricket League of SOM. The film club was formally launched in the month of January with the official screening of the first film named The Corporation. The Fun cricket league was also launched on popular demand of the enthusiastic junta. Though, it shows team building exercise initiatives at SOM, SOMites are content with calling it a pure fun event. Sports & adventure: December saw the hosting of the inter-IIT sports meet in IIT-Kanpur and as usual the SOM guys proved their mettle by helping the IITBombays badminton team retain their top spot and the gold medal. There is a deep rooted relationship between adventures and SOMites. Apart from the everyday adventures at SOM (though of a different type) where students regularly experience high adrenaline levels in order to meet one deadline or the other, some students went on hiking to explore nature and wildlife in the treacherous terrains of Wayanad, Kerala. Certifications: If you think vacations are not meant for academic purposes then its time to have a paradigm shift. This December saw students taking up tests for certification courses such as APICS, FRM
maar yaar!!!
The month of December at SOM seemingly comes up with the same prospects. One full month for chilling out and do all sort of frivolous activities. But thats where life is SOMewhat different at SOM. December or the Nouvelle Vague December as we prefer to call it, is a time for change. Its a time to have a break from the regular management Gyaan and try out SOMething different. Its a time for the SOM junta to differentiate themselves from the herd and ride a new wave. This December wasnt much different from the underlying theme of nouvelle vague December. The SOM guys went on to explore different avenues ranging from entrepreneurship to social activities to adventure sports to B-school competitions. They made their presence felt everywhere be it in startups, corporates, other B schools, non-profit organizations or NGOs. Entrepreneurship: Innovation, Leadership and Entrepreneurship are the three guiding principles of SOM. The rendezvous with entrepreneurship doesnt end with lectures and classes on entrepreneurship but actually, it just starts from there. Entrepreneurship is not a buzz word in SOM but it is a reality entrenched in the heart of every SOMite. The onset of December saw many students taking up challenges from the Entrepreneurship Cell of IIT Bombay, SINE (Society for Innovation and Entrepreneurship) for a tryst with budding entrepreneurs and entrepreneurial ventures. While some got busy identifying potential markets,
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|SOM-thing Special|
and CFA along with their winter internship assignments. TAPMI, IBS Bangalore, NITIE, IIM Kozhikode, IPE HyThis shows the versatility and strive for excellence that derabad and IRMA. The list continues to prove that burns inside each student at SOM. SOMites were not content with only whiling away their time at home. Winter Internships: Some of our budding managers were offered winter internships for one month in leading Mood Indigo: If it is December, then IIT Bombay is corporate firms like Ernst & Young, Dun and Bradstreet, the place to be thanks to the phenomenon known as Ambuja Cement Ltd., ITC etc. which they took up as a Mood Indigo, the annual cultural fest at the campus. challenge. As expected, they did not fail to deliver the This year, the scale was much bigger with 50 global best. While the corporate firms got a sneak peek into artists (the highest for any college fest) gracing the camSOMs talent pool, the students got an opportunity to pus. The cherry on the cake was exhilarating performapply their skills in real life business problems. ances by the rock band Porcupine Tree and the trio Shankar-Ehsaan-Loy. As if this wasnt enough, a mass Competitions: This December saw SOM junta con- hypnosis of 200 students was conducted by Prof Nagesh, quering other B Schools in all kinds of B School events a highly acclaimed hypnotist. There were lots of other like case study competitions, B-plans etc. To name a events to keep one engrossed throughout the four day few, SOM students won at IIM Indore, FMS, Great Lakes, extravaganza.
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Leadership Lecture Series

- Somak Chakraborty SJMSOM, IIT Bombay
Leadership Lecture Series is an innovative and unique methodology which is adopted to teach leadership and entrepreneurship and is part of a compulsory course, "Leadership, Vision & Entrepreneurship offered to the students of Master of Management program. Right from its inception, it has been welcomed by the industry leaders and students with open arms and in a short span of time, it has become one of the flagship courses being taught exclusively at SJMSOM, IIT Bombay. The Leadership Lecture Series presents an opportunity to understand the persistent efforts and challenges of leaders who pursued their ambitions to reality. It encompasses leaders and role models from diverse fields. It promises a blend of versatility, knowledge and learning through thought provoking addresses by the prominent speakers. As part of the Leadership Lecture series 2010, SJMSOM was pleased to welcome Mr. Kapil Garg, Co -founder Oilmax Ltd and Former-MD, British Gas India to speak about his experiences in his journey towards excellence. To begin with, Mr. Garg spoke about the importance of a dream in ones life. His own dream was to own Oil fields and he expounded on the path, he took to achieve it. He started his career at ONGC, on an offshore rig. He considered his work at ONGC a great learning experience to carry forward in his career. After some time, he left ONGC to join Enron Oil and Gas in order to enrich his experience. He mentioned that the greatest security is ones value in the job market and any activity undertaken which increases this value, is worthwhile. Elaborating on this, Mr. Garg cited an example from his own career that in order to dispose of the assets, British Gas kept Mr. Garg to continue the operations, on a hefty retention bonus when the buyout occurred. Mr. Garg finally achieved his dream after 20 years, when he co-founded Oilmax, after developing a highly marketable skill set and used it to advise companies about investing and managing oil and gas projects. He said that his only regret was that it took a little longer for the dream to come true. Mr. Garg harped on the importance of loyalty, leadership and teamwork in any organization. He said that a company should be loyal to its employees and invest in career development of the individuals. He also spoke about how a leader is always only just as good as his team so he should develop a team with complementary skills so that lack of a certain skill in an individual, or in the leader, is compensated. He spoke of his practice of always surrounding himself with people who were different from him- a practice which started at college- which paid dividends throughout his life. He himself was not process-driven but instead followed his vision with all his passion. A team which included people, who took care of the inevitable paperwork along the way, enabled the entire team to move seamlessly forward. Mr. Garg shared his experiences with joint ventures and the difficulties he faced in getting approval from all partners when it was required. He humorously detailed the art of fence-sitting, practiced by the CEOs when they werent sure that a proposal would get the nod, and not wanting to lose face within the team by having the proposal rejected outright during a team meeting. This art, he said, consisted of having ones deputy plead the case. If the CEO could be sure, by
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observing the partners reactions, that approval would be given, then he would also back the proposal. If not, he would postpone the decision until he could speak to the partners in private and win their approval. On a lighter note, Mr. Garg spoke about the importance of work-life balance. After all, he said, happiness at work is meaningless if one is unhappy at home. For this reason, he has tried to make it a point to be there for his children, attending the school award functions that mean so much to the young winners. He also expressed his opinion that working late at office was not a good sign for either it meant that the person is inefficient or overworked. He said that a manager should not
convey the impression that working late was the means to promotion and he spoke of his efforts to prevent this from occurring in his company, by keeping track of all employees who left after 6 p.m. Leadership Lecture Series, as always, has given excellent opportunities to the students, faculty and members of IITB community, to listen and personally interact with some of the finest minds of India like Mr. Garg. His inspiring speech truly underscored the importance of leadership in the road to success; the ability to make things work for you and to form a good team and retain it, goes a long way towards achieving ones dream.
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|BOOK ESSENCE|
22 Immutable Laws of Branding

Review By Varun Purohit, SJMSOM, IIT Bombay l Ries is a marketing professional. He is also the co-founder and chairman of the Atlanta-based consulting firm Ries & Ries with his partner and daughter, Laura Ries. Along with Jack Trout, Ries coined the term "positioning", as related to the field of marketing, and authored Positioning: the Battle for Your Mind, an industry standard on the subject. Authors demonstrate that marketers need two skills: building a brand and keeping it alive through stellar company examples and keen insights. Using an impressive list of the world's best-known brands, it fine tunes the art of branding to its optimum levels which is fathomable for everyone and can be used by any brand in any industry. The book proclaims that the only way to stand out in today's marketplace is to build your product or service into a brand. Authors say that conventional marketing is more targeted towards selling which is more of a short lived concept while the actual essence of marketing is in creating a brand from a long term perspective. Branding in totality should not be mistaken with selling. For instance a Rolex watch might not be selling as much as Timex but the overall aura and value of a Rolex is huge. Branding is an instrument to create a niche for your product in the minds of consumers and it all depends on the type of brand which you have created and this will determine the life of your product. Big products of great utility die early if not marketed properly. Now-a-days, marketing is shifting its paradigm from selling to branding and thus, the companies which wish to reap new benefits must follow this strategy. The laws mentioned in the book have been created after observing the success of brands in the industry and hence they represent the success story of all the big brands globally. Summary of the basic laws mentioned throughout the book are given below:
The 22 immutable laws of Branding

Authors: Al Ries & Laura Ries Publishers: HarperCollins (Hardcover, 1998); Harper Paperbacks (Paperback, 2002) Pages: 272
row the focus. When a company puts its brand name on everything then eventually the brand name loses its power and gets diluted.
Law of Publicity/Advertising
Law of Expansion/Contraction
The power of a brand is inversely proportional to its scope/ the brand becomes stronger when you nar-
The birth of a brand is achieved with publicity, not with advertising/ Once born, a brand needs advertising to stay healthy. Every strategy to get noticed should be developed from the publicity point of view. According to the authors, advertising is a means of defending your company from losing market share and it can be termed as companys defense budget.
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|BOOK ESSENCE|
Law of the Word
A brand should strive to own a word in the mind of the consumer. Mercedes is equivalent to Prestige, Volvo to Safety, Kleenex to Pocket Tissue, Band-Aid to Adhesive bandage; these are few examples as to how a brand associates itself to a word and then it is almost impossible to take away the word from the brand.
exactly the opposite direction. Even if you create a sub brand and your parent brand is strong, the consumer will always associate your product with it. When a brand creates its siblings, its always good to create a new brand in a different category.
Law of Shape/Law of Color
Law of the credentials
The crucial ingredient in the success of any brand is its claim to authenticity. In general customers have a tendency to neglect any claim made by the product. At the same time consumers do acknowledge authenticity in the brand.
The brands logotype should be designed to fit the eyes. A brand should use a color opposite to its major competitor. The authors emphasize on the two aspects: Design and Legibility. The orientation of the logo should be similar to eyes i.e. horizontal. Being that, the logo will make maximum impact on the consumer. The color of the brand is always symbolic of the nature of the company.
Law of Quality
Law of borders/Law of Consistency
Quality is important, but a brand is not built by quality alone.
Law of Category
The leading brand must promote the category, not the brand. The ultimate result of narrowing the focus is that a product carrying no more scope in the existing market gives the opportunity for a new category altogether.
A brand knows no borders/ Brand is not built overnight. Success is measured in decades, not years. A brands value is always associated with its origin. For example, watches from Switzerland, automobiles from Germany and electronics from Japan. Thus the brand is tightly coupled with its origin.
Law of change/Mortality
Law of Name/Generic
In the long run a brand is nothing more than a name.
Law of Fellowship
In order to build a category, a brand should welcome other brands. Every brand should always welcome other brands in the same category; this will create competitiveness, leading to a lot of buzz in the market (Cola Wars) which will eventually stimulate demand.
Brands can be changed, but only infrequently and carefully/No brand will live forever, euthanasia is the best solution. Change should only be made keeping consumers in mind, not the company. In case your brand doesnt stand for something then you can play around with the brand as Intel did when they moved from D-RAM to Microprocessor. But when a brand already stands for something like KFC i.e. fried chicken, they cannot change the course of their brands to something else. After reading the book I felt that there are some laws made by observing the trends some brands followed and then there are some exceptions. To counter that the author puts down the precedence of one law over the other. But holistically the book paints a large canvas in terms of history of brands in marketing scenario, how brands were actually built and how they sustained over the years. Final words to sum up the essence of the books are as quoted by the authors for defining a brand: A singular idea of concept that you
Law of the Company
Brands are brands. Companies are companies. There is a difference. Brand name should always take preference over the company name. Consumers buy brands, not companies.
Law of Sub-branding/Law of Sibling
What branding builds, sub-branding can destroy/ There is a time and place to launch a second product. Sub-branding is a concept which takes the brand in
can own inside the mind of the prospect. Its as simple and as difficult as that. Loss of singularity definitely weakens a brand.
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|FILMOGRAPHY|
The Midas Formula - A story of Mathematicians fight against the Gods

- Thiagu, Research Scholar, SJMSOM, IIT Bombay
The Formula
Is there a way to eliminate all the risks in financial markets? Could we have methods to reduce risks and increase returns simultaneously? A formula promised to do exactly that. Founded by Fisher Black, Myron Scholes and Robert Merton, the Black-Scholes-Merton formula gave an elegant way to price an option contract. Also, it showed that by holding an option contract and a proper number of shares, the risk of the portfolio could be brought to zero and the returns could be made certain.
Synopsis
The BBC documentary The Midas Formula looks at the evolution of this formula involving conceptualization by its founders, the quest for money by their founders and how their company Long Term Capital Management (LTCM) went bust when they tried putting their theory into practice.
Background
The movie traces the quest for the formula which began during 1950s by an unknown student at that time, Louis Bachelier. An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying stock at a specific price on or before a certain date. Given that an option provides such flexibility, what is the price to pay for such an option? Bachelier was convinced that if there is way to price an option and make option a popularly traded instrument, the markets could be tamed. Bachelier though was not able to find out the formula for the option price. The quest for pricing such a contract further intensified in 1960s. This is when Black, Scholes and Merton also began the quest for this pricing formula.
The Midas Formula Genre: Documentary Release Date: 2nd Dec 1999 on BBC Horizon Duration: 49 minutes Director: Jemima Harrison Editor: Adam Finch Cast: Dilly Barlow, Zvi Bodie, Stan Jonas, Roger Lowenstein, Leo Melamed, Robert C. Merton, Merton Miller, Paul Samuelson, Myron Scholes, Ben Schwartz
risk aversion characteristics, level of satisfaction, reasonability, aggressiveness, guesses of other traders, defensiveness and safety which made it look more like psychology and less of finance or economics. Black and Scholes dropped the factors that were unobservable. They agreed largely on some factors which were observable. These are: The current stock price The volatility of the stock price The risk-free interest rate and The level of risk
Where is the magic?
The movie also looks at factors that were considered for pricing the options. Early research included factors like expectations of an investor, utility structure,
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How do you quantify the level of risk? This is the problem that Black and Scholes were struck with when finding a formula for the price of an option. Black and Scholes designed a portfolio which had a mixture of an option contract and a number of underlying stocks which was called a riskless portfolio. In a risk-neutral world the portfolio would return a risk-free interest rate at any point of time. The level of risk was just made to vanish from the equation. Merton introduced Ito calculus into the whole equation and the formula was made robust to be operational in real time
Practitioners Pet
called Long term Capital Management (LTCM). It was a huge success for the first three years. By dynamically creating the riskless portfolios, the company achieved a huge success. All they were doing was doing a gamblers bet using a hedging formula. By having a long and a short position in two different kinds of securities, they were able to offset losses in one kind of securities by gains in the other. The Black-Scholes formula was important to find the quantity of securities to be traded in each of these positions. They paid back their $3bn debt in the first three years and future just looked brighter.
The movie also follows the success of the formula among the Wall Street traders. The traders embraced the formula with their hands, their hearts and their minds. The academia did not embrace this formula immediately and most of the reputed journals did not publish the Black and Scholes paper. The Journal of Political Economy, surely not a journal in the sphere of economics or finance, finally published the article. The paper currently has an astonishing 13969 citations!
All good things come to an end
The ultimate prize
Fischer Black died on 1995 at an age of 57. After 25 years of their discovery of the formula Robert
When Russia defaulted in August 1998, so did LTCM which had huge exposures in various international markets. The Black Scholes or any other mathematical model was based on normal market behaviour and unforeseen events were about to send the markets wild. The calculations in LTCM's models became hopelessly out of kilter, and when the company collapsed in 1998, it nearly brought down the entire global economy. The movie also looks into the public humiliation faced by the US Government which bailed it out. The Russian crisis brought a poignant end to the company which fought risk with help of high end mathematics.
Against the Gods
Merton and Myron Scholes receive the Nobel Prize in Economics for their efforts to determine the value of derivatives.
The movie end with the quote by Einstein Elegance is for tailors; dont believe in something because it is a beautiful formula. The quote is very relevant for all the quants. One more thing that this crisis got everyone to think is to look at the concept of Systemic Risk. Though there is always a talk of risk transfer through various instruments, what is the total risk that could exist in the system? How do you tackle them? Tackling Systemic Risk is equivalent to the fight against the Gods. It has also brought behavioral finance into forefront again as compared to finance with all the impetus and assumptions on a rational human being. If it is very difficult to find an Average person, it is even more difficult to find a Rational person. For Transcripts of the movie, please visit http:// www.bbc.co.uk/science/horizon/1999/ midas_script.shtml
Where is the money?
Having achieved the highest honors in Academia, Merton and Scholes decided to set up a hedge fund
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