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E globuz z vol ii issue ii
 

E globuz z vol ii issue ii

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Quarterly periodical of International Business Society @ SIMSR

Quarterly periodical of International Business Society @ SIMSR

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    E globuz z vol ii issue ii E globuz z vol ii issue ii Document Transcript

    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11  “Stay Hungry Stay Foolish”                            -­‐  Steve  Jobs       Volume  II  Issue  II  Oct-­‐Dec’11   e-­‐GlobuzZ   K.J.Somaiya Institute Of management Studies & Research      
    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11     FOREWORD   Dear  Readers,   It   gives   us   immense   pleasure   to   bring   you   the   7th   and   second   anniversary  issue  of  e-­‐Globuzz  (Oct-­‐Dec  2011).  The  business  world  was   even  more  turbulent  in  this  quarter  in  comparison  to  the  previous  ones,   with   the   European   Union   (EU)   going   into   a   deeper   financial   crisis,   change   of   regime   in   Libya   and   the   sad   demise   of   one   of   the   most   successful   and   respected   innovators   in   the   personal   technology   industry,   Late   Steve   Jobs   in   Oct   2011.   Considering   the   monumental   contributions  of  Steve  Jobs,  the  e-­‐Globuzz  team  has  dedicated  this  issue   to   him.   A   lot   has   been   said   in   the   press   and   other   media   about   the   unique   contributions   of   Steve   Jobs.   We   remember   him   and   cherish   his   commencement   address  to  MBA  students  at  Stanford  University  in  2005,  which  will  always  be  an  inspiration   for  several  generations  of  innovators  and  MBAs  alike.   Some  of  the  Highlights  of  this  issue  include  a  brief  report  on  the  first  International  Business   Conference   Pangea   2011   organized   by   IBS@SIMSR   on   24th   September   2011,   a   write   up   on   emerging   markets   of   African   countries   along   with   other   contemporary   articles   on   international   marketing,   finance   and   logistics.   One   of   the   e-­‐Globuzz’s   first   that   we   have   for   this  issue  is  an  article  by  our  own  faculty  Prof.  B.  Bhatia  on  international  finance.   We  have  also  covered  highlights  of  the  international  business  session  on  emerging  trends  in   international   trade   and   cross-­‐border   investments   of   multinational   enterprises   on   16th   December  at  Samavesh  this  year  which  is  our  institute’s  prestigious  annual  event.   We   hope   you   like   this   issue   of   e-­‐Globuzz   just   as   much   as   the   earlier   issues.   We   invite   contributions   from   all   our   readers   for   the   8th   issue   (Jan-­‐Mar   2012)   proposed   for   e-­‐publication   by  mid  Feb  2012.   Happy Reading, Prof. C. P. Joshi Faculty Mentor IBS@SIMSR     2    
    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11       VOL  II  ISSUE  II  OCT-­‐DEC  ‘11   Obituary 4 Steve Jobs Taming the 5 recession Faculty Mentor Electric-Car Industry – 8 The road ahead Prof.  C.  P.  Joshi   A New Chapter In 10 Editor-in-Chief Indo-Iran Ties Islamic Banking 12 Prerna  Makhijani   Battling the skies - 14 The success of Manvinder  K  Sodhi   AirAsia Designers Emerging Markets: 16 African Countries Vishu  Kartik   International 20 Swetaleena  Das   Logistics Did you know Issue of GDR/ADR by 23 Indian companies- Ankur  Yadav   Recent Trends Alumni Speak 26 Circulation Highlights 27 Swati  Moolchandani   International Business Conference Shivam  Awasthi   Highlights 32 Samavesh     All  the  views  expressed  in  this  e-­‐periodical  reflect  the  personal  opinions  and  views  of  the  authors  and  do   not  reflect  IBS@SIMSR  views.   3    
    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11           Obituary:  Steve  Jobs   The   Man   Who   re-­‐established   the   vitality   of   the   The   success   of   Macbook,   iPhone,   iPad   ,   all   recite   forbidden  Fruit!     the  story  of  the  much  glorified  Apple  Inc.  and  the   man   behind   it.   The   legend   who   miniaturized   the   We  as  management  students  try  to  learn  business   world   and   brought   it   into   our   palms.   What   would   in   the   world,   but   rarely   does   the   world   produce   an   you  like  to  call  him?    An  Inventor?    An  Innovator?   individual,   who   gives   business   so   much   to   learn   Maybe  a  blend  of  both!   from.     Forbes   magazine   laid   down   the   top   ten   lessons   Steve   Jobs,   CEO   of   Apple   Inc.   and   one   of   the   that   Steve   Jobs   Taught   us.   To   emphasize   on   of   one   greatest   mastermind   and   innovators   of   all   time,   them,   that   is   quite   relevant   in   terms   of   passed  away  on  6th  October  2011,  at  the  age  of  56,   management   education   is:   To   create   the   future,   after   a   long   battle   with   cancer.   His   unsurpassable   you   can’t   do   it   through   focus   groups:   “Even,   the   contribution   to   personal   technology   and   more   consumer   today   does   not   know   what   he   wants.   broadly  to  the  innovation  revolution,  has  not  only   Innovate   for   him   and   give   him   something,   he   left  an  indelible  mark  on  our  society,  but  has  also   would  crave  for”.   The  success  of  iPod,  iPhone  and   made   him   immortal   and   forever   ideated.   He   iPad  depicts  it  so  perfectly.     possessed  great  business  acumen  and  at  the  same   time  despite  his  greatness,  also  taught  us  that  he  is   Over   a   million   people   from   all   over   the   world   have   just   another   man.   His   speeches,   his   philosophies   shared   their   memories,   thoughts,   and   feelings   and   more   informally   his   attire,   all   marked   the   about   Steve.   One   thing   they   all   have   in   common,   greatness  of  the  man  and  his  humility.   including   his   friends,   colleagues   and   owners   of   Apple   products,   is   how   they’ve   been   touched   by   Jobs   was   a   perfectionist,   attention   to   details   and   his  passion  and  creativity   minuteness   being   his   forte.   No   wonder,   today   we   so   conveniently   use   the   i-­‐prefixed   devices,   the   With   the   last   inspiring   words   from   the   legend   most   swanky   hand   and   palm   pieces.   Steve   Jobs   himself,   who   shall   remain   alive   in   everyone’s   heart   started  his  career  in  1977  with  his  friend  and  Apple   not  just  for  being  a  technological  revolutionary  but   co-­‐founder   Steve   Wozniak,   by   launching   the   first   for  being  “Steve  Jobs”   successful   mass-­‐market   PC-­‐   Apple   II.   There   onwards,   he   bought   and   lead   Pixar   Animation   “Your   time   is   limited,   so   dont   waste   it   living   Studios   till   the   mid   nineties.   The   company   set   an   someone   elses   life.   Dont   be   trapped   by   dogma   —   epitome  of  cutting  edge  technology  that  animation   which   is   living   with   the   results   of   other   peoples   had  ever  known.   thinking.   Dont   let   the   noise   of   others   opinions   drown   out   your   own   inner   voice.   And   most   Technology   was   further   revolutionized   when   Steve   important,   have   the   courage   to   follow   your   heart   introduced  iPod,  the  ultimate  boon  to  music;  with   and   intuition.   They   somehow   already   know   what   the   introduction   of   iPod,   music   aid   like   CDs,   Tapes,   you   truly   want   to   become.   Everything   else   is   LP  records  and  Walkman,  all  became  a  passé.   secondary.”     -­‐Nikita  Agarwal  (PGDM-­‐IB  2011-­‐13)     4    
    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11       Taming  the  recession   -­‐Nikunj  Garg  (MMS-­‐B  2011-­‐13)   The   signs   of   an   imminent   recession   are   all   around   For   most   companies,   the   majority   of   funds   us.   The   spill   over   from   the   subprime   mortgage   crisis   originally   earmarked   towards   industry   events   and   is   weakening   both   consumer   confidence   and   tradeshows   has   either   migrated   to   other   consumer   spending—much   of   it   on   credit—that   has   marketing  programs  or  simply  been  eliminated.   been  buoying  the  US  economy.   While   traditional   advertising   programs   and   The   dismal   state   of   the   economy   is   causing   industry   trade   events   may   be   on   the   decline   in   companies   everywhere   to   reassess   their   marketing   terms  of  marketing  investment,  a  number  of  other   budgets   to   ensure   that   theyre   allocating   their   channels   and   programs   are   gathering   steam.   A   limited   marketing   funds   in   the   most   productive   good   example   is   social   media.   Today   a   growing   ways  possible.     number   of   companies   are   deploying   technology-­‐ enabled   solutions   for   leveraging   word   of   mouth   as   In  many  cases,  this  means  curtailing,  postponing  or   a  way  to  drive  marketing  improvement.   even   eliminating   previously   planned   marketing   expenditures.     By   turning   consumers   into   brand   advocates   and   building   market   awareness   in   an   exponential   In   other   cases,   companies   are   actually   investing   manner,   social   media   marketing   can   be   a   cost-­‐ more   aggressively   in   various   types   of   marketing   effective  way  for  a  company  to  achieve  some  of  its   programs,   sensing   an   opportunity   to   capitalize   on   key  marketing  objectives.   the  grim  economic  headlines.   Companies   are   paying   close   attention   to   online   The   recession   is   also   causing   some   marketers   to   marketing,   in   general.   This   category   is   broad   in   rethink   their   trade   promotions.   Consumer   brand   scope,   encompassing   everything   from   search   companies   typically   spend   upwards   of   15%   of   engine  marketing  to  Web-­‐based  promotions.   revenue   on   trade   promotions,   which   involve   temporary  price  cuts  to  encourage  reseller  channels   Mobile  marketing   to  reduce  retail  prices  for  consumers.        Through  a  confluence  of  technologies  and   standards  related  to  mobile  devices,  including   5    
    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11     Through   a   confluence   of   technologies   and   standards   related   to   mobile   devices,   including   third-­‐generation   (3G)   networks   and   data   Did  you  know??   packages,   the   mobile   Internet   has   now   reached   a   critical   mass.   As   more   consumer   brands   are   discovering,   the   mobile   Internet   can   now   enable   large-­‐scale   mobile   marketing   activities   capable   of   engaging   consumers   in   unprecedented   (and   largely   affordable)   Treaty of Rome - An ways.     international agreement that led to the founding of the Reassessing  Marketing  Messages  and  Pricing  Tactics   European Economic Community on 1 January Companies   have   reassessed   their   marketing   and   advertising   1958. It was signed on 25 messages   in   the   context   of   their   cash-­‐strapped   buying   audiences   March 1957 by Belgium, and   modified   these   messages   to   better   resonate   with   consumers   France, Italy, Luxembourg, who,   in   many   cases,   have   become   increasingly   risk   averse   and   price   the Netherlands and West sensitive.   Germany. The word Economic was deleted from the treatys Based   on   their   demand   forecasts,   companies   are   taking   steps   to   name by the Maastricht eliminate   poorly   performing   products   and   solutions,   shifting   funds   Treaty in 1993, and the treaty to  product  lines  that  seem  better  suited  to  weathering  a  recession   was repackaged as the Treaty and   even   introducing   new   products   and   services   that   meet   the   on the functioning of the needs  of  consumers  on  an  austerity  plan.   European Union on the entry into force of the Treaty of Lisbon in 2009. To   that   point,   companies   are   also   modifying   their   pricing   tactics,   including   engaging   in   temporary   price   promotions   and   reduced   thresholds   for   quantity   discounts,   in   order   to   achieve   their   marketing  and  sales  objectives.  Some  companies  are  simply  selling   fewer  products  for  the  same  price.   Smoot Hawley Tariff Act Tariff Act of 1930, Companies   should   bear   following   factors   in   mind   when   making   otherwise known as the Smootñ Hawley Tariff was their  marketing  plans.   signed into law on June 17, 1930. It raised U.S. tariffs on 1.   Research   the   customer.  Instead   of   cutting   the   market   research   over 20,000 imported goods to budget,   you   need   to   know   more   than   ever   how   consumers   are   record levels. After the 1929 redefining   value   and   responding   to   the   recession.   Consumers   take   stock market crash, more  time  searching  for  durable  goods  and  negotiate  harder  at  the   unemployment never reached point   of   sale.   They   are   more   willing   to   postpone   purchases,   trade   double digits in any of the 12 down,  or  buy  less.     months following that event,   peaking at 9 percent, then drifted downwards until it 2.   Focus   on   family   values.  When   economic   hard   times   loom,   we   reached 6.3 percent in June tend   to   retreat   to   our   village.   Look   for   cosy   hearth-­‐and-­‐home.   1930. Then the federal Family   scenes   in   advertising   should   replace   images   of   extreme   government made its first sports,  adventure  and  rugged  individualism.   major intervention in the economy with the Smoot- 3.  Maintain  marketing  spending.  This  is  not  the  time  to  cut   Hawley tariff advertising.  It  is  well  documented  that  brands  that  increase     6    
    •   e-­‐GlobuzZ   Vol  II  Issue  II  Oct-­‐Dec’11       advertising   during   a   recession,   when   competitors   You   do   not   necessarily   have   to   cut   list   prices   are   cutting   back,   can   improve   market   share   and   but   you   may   need   to   offer   more   temporary   return   on   investment   at   lower   cost   than   during   price   promotions,   reduce   thresholds   for   good   economic   times.   Brands   with   deep   pockets   quantity   discounts,   extend   credit   to   long-­‐ may   be   able   to   negotiate   favourable   advertising   standing  customers  and  price  smaller  pack  sizes   rates  and  lock  them  in  for  several  years.     more   aggressively.   In   tough   times,   price   cuts   attract   more   consumer   support   than   4.  Support  distributors.  In   uncertain   times,   no   one   promotions   such   as   sweepstakes   and   mail-­‐in   wants   to   tie   up   working   capital   in   excess   offers.   inventories.   Early-­‐buy   allowances,   extended   financing   and   generous   return   policies   motivate   6.   Stress   market   share.   Companies   such   as   distributors   to   stock   your   full   product   line.   Wal-­‐Mart   and   Southwest   Airlines,   with   strong   However,   now   may   be   the   time   to   drop   your   positions   and   the   most   productive   cost   weaker   distributors   and   upgrade   your   sales   force   structures  in  their  industries,  can  expect  to  gain   by  recruiting  those  sacked  by  other  companies.   market   share.   Other   companies   with   healthy   balance   sheets   can   do   so   by   acquiring   weak   5.   Adjust   pricing   tactics.  Customers   will   be   competitors.   shopping  around  for  the  best  deals.       In   the   end,   companies   have   no   choice   but   to   strive   for   higher   levels   of   efficiency   and   effectiveness   across   all   aspects   of   their   marketing  operations  in  the  face  of  persistently   weak  spending  by  consumers  and  businesses.   “ By turning consumers into brand advocates, social media marketing can be a cost-effective way for a company to achieve some of its key marketing objectives. “ 7    
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11             Electric-­‐Car  Industry  –  The  road  ahead                      -­‐Sahil  Patel  (PGDM-­‐IB  2011-­‐13)   Demand   for   Crude   Oil   is   increasing   along   with   the   number  of  Cars  on  road  making  any  economy  highly   dependent  on  Foreign  Oil.  Thus,  today,  all  the  major   economies   want   to   shift   their   transportation   sector   from  internal  combustion  engine  (ICE)-­‐based  vehicles   to  fully  electric  vehicles.  Now,  we  will  see  how  some   major  economies  of  the  world  have  taken  a  few  but   vital  steps  in  this  direction.   US   The   American   transportation   industry   today   faces   a   perfect   storm   of   economic,   geopolitical,   and   environmental   concerns   that   threatens   its   future.   capacity  that  will  be  equal  to  1  million  units  of   The   decline   of   the   US   automobile   industry,   the   battery-­‐powered   automobiles   in   operation.   By   country’s   increasing   dependence   on   foreign   oil   achieving   this,   they   will   also   boost   their   own   imports,   and   global   warming   have   spurred   the   battery-­‐export   opportunities.   Moreover,   Obama   Administration   to   publicly   commit   the   Municipal   governments   have   offered   up   to   country   to   developing   alternative   transportation   $8,800   in   subsidies   to   taxi   fleets   and   local   methods  and  alternative  energy  sources  as  a  way  of   governments   for   hybrid   and   all-­‐electric   combating   these   problems   and   setting   a   new   path   vehicles.     for   the   US   transportation   sector   and   economy   as   a   Rest  of  the  World   whole.   Governments   from   rest   of   the   world   too   have   The  U.S.  government  in  2008  began  to  talk  about  the   shown   keen   interest   in   building   Electric-­‐Car   energy   crisis   in   earnest   in   response   to   both   Industry.   In   Israel,   for   example,   the   skyrocketing   gasoline   prices   and   a   national   mood   government   is   working   with   Silicon   Valley   that   favoured   decreasing   the   U.S.’s   dependence   on   start-­‐up  “Project  Better  Place”  and  established   foreign   oil.   When   President   Barack   Obama   entered   car  companies  Renault  and  Nissan  to  bring  the   office   in   2009,   he   made   energy   independence   one   of   electric   car   to   Israel,   and   has   committed   to   his   core   issues,   and   his   administration   allocated   offer   substantial   tax   incentives   to   consumers   billions   of   dollars   to   promote   electric   vehicle   who  would  buy  electric  cars.  Denmark  has  also   manufacturing   and   development   of   advanced   worked   with   Renault   and   Nissan,   and   with   batteries  for  those  vehicles.   “Project  Better  Place”,  to  build  a  country-­‐wide   China   electric   car   network   with   20,000   recharging   stations   powered   by   wind   turbines.   In   Japan,   The   Chinese   government,   in   2008,   wanted   to   turn   has   pledged   to   install   power   outlets   the  country  into  a  global  leader  in  hybrid  and  electric   throughout   public   areas   in   certain   cities   and   cars   within   three   years.   Within   that   period,   each   of   towns,   and   has   planned   to   encourage   private   the   country’s   passenger   vehicle-­‐makers   would   be   companies   to   give   discounts   on   loans,   required   to   have   a   licensed   new   energy   vehicle   on   insurance  and  parking  to  electric  car  owners.   the  market.  Today,  China  wants  to  hit  battery              
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11         All  the  countries  discussed  above  are  encouraging  the  Electric  Car     Industry   not   only   to   avoid   becoming   energy   dependent   on   a   Did  you  know??   foreign   country   but   also   to   keep   their   carbon   footprint   under     check.     Lessons  for  India   Chicago Board of Trade   (CBOT). In   light   of   this   state   of   affairs   of   the   emerging   global   electric   car     industry,  when  it  comes  to  India,  the  account  is  almost  NIL.  Though   The CBOT, established in 1848, is in   India,   there   are   a   lot   of   issues   that   doubt   the   feasibility   of   the     the worlds oldest derivatives electric   car   industry,   we   can’t   just   keep   quiet.   Major   incumbent   (futures and futures-options) automakers,   such   as   Nissan   and   Renault,   have   secured   internal     exchange. Futures and options on agricultural (wheat, corn, oats, access   to   critical   new   battery   technology   as   well   as   cooperative     etc.), financial (U.S. Treasury agreements   with   national,   regional   and   local   governments   in   bonds and notes, etc.), and index different   parts   of   the   world.   And   now,   it’s   time   for   the   Indian     (Dow Jones Industrial Average) Government  to  encourage  such  private  Automobile  Manufacturers   instruments trade on the CBOT. to   invest   into   Electric-­‐Car   Industry   to   gain   the   dual   merits     associated  to  it.   ________________________     German Customs Union One   of the first economic blocs was the German Customs   Union(Zollverein) initiated in 1834, formed on the basis of the   German Confederation and subsequently German Empire from “Today all the major economies want to shift   1871. Surges of trade bloc their transportation sector from internal   formation were seen in the 1960s and 1970s, as well as in the 1990s combustion engine (ICE)-based vehicles to after the collapse of Communism.   fully electric vehicles. “ By 1997, more than 50% of all   world commerce was conducted under the auspices of regional   trade blocs                   9  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       A  NEW  CHAPTER  IN  INDO-­‐IRAN  TIES     -­‐Pratichi  Swain  (PGDM-­‐IB  2011-­‐13)         The   Wikileaks   recently   revealed   that   Indian   meant   Moscow   influenced   India’s   foreign   policy.     Prime   Minister   Dr.   Manmohan   Singh   had   The  Islamic  revolution  in  1979  saw  the  ouster  of   rejected   previous   requests   either   to   visit   Tehran   the   US   backed   Shah   Dynasty   rule   and   more     or   for   Iranian   President   Mahmoud   Ahmadinejad   importantly   brought   India   and   the   new   to   visit   India   as   the   United   Progressive   Alliance   theocratic   government   closer.   There   have   been     government   was   anxious   not   to   ruffle   American   many   high   level   visits   from   both   sides   with   the     feathers   at   the   height   of   the   U.S.-­‐led   campaign   highlight  being  President  Mohammad  Khatami’s   against   Iran   over   its   nuclear   programme.   So   visit  to  India  in  2003,  when  he  was  also  the  Chief     when   Dr.   Singh   met   the   Iran   President   on   the   Guest  at  the  Republic  Day  function.  But  in  recent   sidelines  of  his  visit  to  the  UN  in  September  this   years   it   has   been   a   seesaw   relationship   with     year  and  accepted  his  invitation  to  visit  Tehran,  it   Iran.   India’s   vote   against   Iran’s   alleged   nuclear   raised   a   few   eyebrows   indicating   a   substantial   weapons   programme   in   IAEA   in   2005   and   also   in     shift   in   India’s   foreign   policy.   The   cause   of   the   the  United  Nations  Security  Council  in  early  2011     shift   can   be   basically   attributed   to   a   host   of   led  to  new  lows  in  bilateral  ties.  Many  believed   various   reasons,   none   more   important   than   that   the   vote   against   Iran   at   IAEA   was   coerced     regional   stability   and   the   need   to   have   a   by   USA   in   lieu   of   the   lucrative   civilian   nuclear   dependable   source   of   fuel   to   meet   the   rising   deal   for   India.   This   plan   of   action   backfired   for     energy   demand.   India   and   Iran   did   not   enjoy   a   India   mainly   because   of   the   recent   nuclear     great   relationship   till   the   late   1970’s   mainly   due   tragedy   in   Japan,   leading   to   wide   scale   protests   to  the  Cold  War.  The  Shah  Dynasty  regime  in  Iran   by   locals   at   the   site   of   new   nuclear   plants   in     was  backed  by  Washington  and  India’s  proclivity   India  that  forced  the  government  to  go  slow  on   to  the  erstwhile  Soviet  Union  during  those  days     nuclear  energy.          10  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11         Also,   the   dependence   on   import   of   nuclear   fuel   dependency   on   oil   and   gas.   Presently   domestic   from   some   reluctant   member   countries   of   resources  supply  70%  of  India’s  energy  needs,  but   Nuclear   Suppliers   Group   like   Australia   and   New   as   consumption   rises,   dependence   on   foreign   Zealand  does  not  augur  well  for  India.  The  Indian   sources  would  increase  further.  Recent  discovery   Government  has  by  now  realized  that  the  aim  of   of   natural   gas   in   India   won’t   be   enough   to   keep   replacing   hydrocarbons   with   nuclear   energy   to   pace   with   the   growing   requirement   and   this   is   meet   the   energy   requirements   is   still   a   distant   where   Iran   can   be   more   than   a   normal   trade   dream   and   India   has   again   fallen   back   to   the   partner  to  India.  Iran  is  OPEC’s  second  largest  oil   traditional   suppliers   of   hydrocarbons.   Thus,   this   producer   and   has   10   percent   of   the   world’s   gesture  by  the  Indian  PM  can  be  seen  as  a  way  to   proven   oil   reserves.   It   is   also   the   second   largest   woo  Iran  for  India’s  greater  gain.   gas   reserves   that   are   about   16   percent   of   the     world’s   proven   gas   reserves.   Iran’s   current   India’s  trade  volume  with  Iran  is  not  as  significant   production  of  gas  is  very  low  in  comparison  to  the   compared   with   USA,   EU   and   China.   Iran   reserves   it   possesses   as   the   gas   fields   are   yet   to   accounted   for   around   1.1%   of   India’s   total   be   tapped,   giving   Indian   companies   an   exports   and   3%   of   imports   in   2010-­‐11.   India’s   opportunity   to   reap   the   benefits   by   investing   in   exports  to  Iran  include  petroleum  products,  rice,   the   Iranian   gas   sector.   With   such   prospects   lying   machinery   &   instruments,   manufactures   of   ahead,   Dr   Manmohan   Singh’s   visit   to   Tehran   will   metals,   primary   and   semi   finished   iron   &   steel,   act  as  a  catalyst  to  improve  bilateral  trade.     pharmaceuticals,   chemicals,   processed   minerals,   manmade   yarn   &   fabrics,   tea,   chemicals,   rubber   Along   with   energy   dependence,   one   more   factor   manufactured   products,   etc.   But   what   is   that   drives   India   to   have   a   strong   and   vibrant   noteworthy  is  that  almost  the  entire  import  from   relationship   with   Iran   is   regional   stability.   India   Iran   is   hydrocarbon.     As   per   the   latest   report   of   can   also   use   Iran   for   an   easier   route   to   access   the   Ministry   of   Commerce,   petroleum   alone   these  parts  of  the  world  not  only  for  trade  but  for   contributes   around   a   quarter   of   India’s   total   military   purpose   as   well.   Add   to   it   the   huge   gas   imports.  Iran  is  the  second  largest  exporter  of  oil   reserves   discovered   in   Central   Asia   which   gives   and  natural  gas  to  India  after  Saudi  Arabia.  Iran’s   India   all   the   more   reasons   for   stronger   ties.   The   contribution   has   decreased   from   nearly   20   development   of   Chabahar   Port   on   the   south-­‐ percent   of   India’s   total   petroleum   imports   to   eastern  shore  of  Iran  is  being  done  by  India  as  it  is   around   12   percent   in   last   2   years.   This   can   be   the  nearest  point  to  Iran  from  its  own  coastline.  It   owed   to   the   stringent   restrictions   imposed   by   can   be   seen   as   a   giant   step   towards   making   Iran   USA  and  EU  even  though  Iran’s  petroleum  sector   an  important  trade  partner.   Iran  can  also  hope  to   has  been  kept  out  of  UN  sanctions.     get   Indian   investments   in   Iran’s   untapped   gas     sector.   Strong   bilateral   ties   can   also   be   used   to   India’s   policymakers   are   systematically   looking   reap  mutual  benefits  in  multilateral  organizations   for  the  widest  possible  set  of  alternatives  to  meet   like  WTO  and  Organisation  of  Islamic  Conference   their   growing   energy   needs.   India   has   huge   coal   (OIC).With  so  much  at  stake,  PM  Singh’s  proposed   reserves,   but   oil   and   gas   reserves   are   modest.   visit   to   Iran   would   be   closely   followed   by   many   Moreover   attempts   to   increase   nuclear   power   agencies   and   governments   across   the   world.   It   production   are   facing   humongous   hurdles   definitely   promises   to   open   a   new   chapter   in   indicating  that  there  would  be  a  greater     Indo-­‐Iran  ties.                       11  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11     Islamic  Banking     -­‐Shefali  Shah  (PGDM-­‐IB  2011-­‐13)   Modern  banking  was  introduced  in  the  19th  century   the   practiced   Middle   Ages,   fostering   trade   and   in   the   Muslim   countries.   At   this   time   the   Muslim   business  activities.  The  origin  of  modern  Islamic   countries  were  politically  and  economically  not  very   banks   can   be   traced   back   to   the   very   birth   of   stable   and   thus   major   banks   set   up   only   in   Islam   when   the   Prophet   himself   acted   as   an   commercial   capitals   of   these   countries.   The   agent   for   his   wife’s   trading   operations   and   the   business   of   these   modern   banks   was   restricted   to   concept   of   interest   found   very   little   application   export   and   import   financing   and   thus   not   catering   in  day-­‐to-­‐day  transactions.   to   the   local   masses.   The   local   trading   community   avoided   the   “foreign”   banks   both   for   nationalistic   Islamic  Banks  in  the  20th  Century   as   well   as   religious   reasons.   As   time   went   by,   it   In  the  1960’s,  Muslim  thinkers  began  to  explore   became  difficult  to  not  make  use  of  the  commercial   ways   to   organize   commercial   banking   on   the   banks.   Their   only   involvement   would   be   in   terms   of   principles   of   Islam.   The   first   Islamic   interest-­‐free   current  accounts  or  money  transfers  as  borrowings   bank  came  into  being  in  Egypt  in  Mit  Ghamr,  in   from   or   deposits   in   the   bank   were   strictly   avoided   1963.   Mit   Ghamr   was   a   rural   area   where   people   so   as   to   keep   away   from   interest,   which   was   followed   Islam   and   thus   did   not   place   their   prohibited  by  the  Islamic  religion.   savings   in   any   bank,   knowing   that   interest   was   The   practice   of   these   Muslim   countries   was   to   have   forbidden  in  Islam.     interest   free   banking,   as   it   was   in   accordance   with   This   project   was   successful   as   the   deposits   the  principles  of  the  Shariah  (Islamic  rulings)  and  its   increased  in  the  period  between  1963-­‐1966.  The   practical   application   through   the   development   of   bank  was  cautious  and  had  rejected  about  60%   Islamic   economies.   Islamic   banking   has   the   same   of  the  loan  applications  and  the  default  ratio  of   purpose   as   conventional   banking,   except   that   it   non-­‐payment  was  zero.   operates   in   accordance   with   the   rules   of   Shariah.   Shariah   prohibits   the   payment   or   acceptance   of   interest  charge  for  lending  and  accepting  money,  as   well   as   carrying   out   trade   and   other   activities   that   provide  goods  or  services  considered  contrary  to  its   principles.   The   main   source   of   the   Shariah   is   the   Quran   and   the   recorded   sayings   and   actions   of   Prophet   Muhammad   the   Hadith.   Many   of   these   principles   upon   which   Islamic   banking   is   based   are   commonly   accepted   all   over   the   world,   for   centuries  rather  than  decades.   It   is   evident   that   Islamic   Banking   was   predominantly  in  the  Muslim  world  through              12  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       But   the   project   was   eventually   abandoned   for   Investment   Account:   Investment   deposits   are   political   reasons,   but   it   showed   that   commercial   accepted   for   a   fixed   or   unlimited   period   of   time   banking  can  be  organized  on  an  interest-­‐free  basis   and   the   investors   agree   in   advance   to   share   the   also.   profit  (or  loss)  in  a  given  proportion  with  the  bank.   Capital  is  not  guaranteed.   Deposit  Accounts   Islamic   banking   is   a   very   young   concept   and   has   All   Islamic   banks   have   three   kinds   of   deposit   been   accepted   not   only   in   the   Muslim   countries   accounts:  Current,  Savings  and  Investment.   but   also   in   many   non-­‐Muslim   countries.   Despite   Current   Account:   Current   or   demand   deposit   the   successful   acceptance   there   are   problems.   accounts   are   virtually   the   same   as   in   all   These   problems   are   mainly   in   the   area   of   conventional  banks.  A  deposit  is  guaranteed.   financing.   Savings   Account:   Savings   deposit   accounts   With  only  minor  changes  in  their  practices,  Islamic   operate   in   different   ways.   In   some   banks   banks   can   get   rid   of   all   their   cumbersome,   depositors   allow   banks   to   use   their   money   but   burdensome   and   sometimes   doubtful   forms   of   they  obtain  a  guarantee  of  getting  the  full  amount   financing   and   offer   a   clean   and   efficient   interest-­‐ back  from  the  bank.  Banks  adopt  several  methods   free   banking.   All   the   necessary   ingredients   are   of   inducing   their   clients   to   deposit   with   them,   but   already  there.  The  modified  system  will  make  use   no   profit   is   promised.   In   others,   saving   accounts   of   only   two   forms   of   financing   -­‐-­‐   loans   with   a   are   treated   as   investment   accounts   but   with   less   service   charge   and   participatory   financing   -­‐-­‐   both   stringent   conditions   as   to   withdrawals   and   of   which   are   fully   accepted   by   all   Muslim   writers   minimum   balance.   Capital   is   not   guaranteed   but   on  the  subject.   the   banks   take   care   to   invest   money   from   such   Such   a   system   will   offer   an   effective   banking   accounts   in   relatively   risk   free   short-­‐term   system   where   Islamic   banking   is   obligatory   and   a   projects.   As   such   lower   profit   rates   are   expected   powerful   alternative   to   conventional   banking   and   that   too   only   on   a   portion   of   the   average   where   both   co-­‐exist.   Additionally,   such   a   system   minimum  balance  on  the  grounds  that  a  high  level   will  have  no  problem  in  obtaining  authorization  to   of  reserves  needs  to  be  kept  at  all  times  to  meet   operate  in  non-­‐Muslim  countries.   withdrawal  demands.   Participatory   financing   is   a   unique   feature   of   Islamic   banking,   and   can   offer   responsible   financing   to   socially   and   economically   relevant   development  projects.  This  is  an  additional  service   Islamic  banks  offer,  over  and  above  the  traditional   services   provided   by   conventional   commercial   banks.       Source:  http://www.islamic-­‐banking.com       13  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11     Battling  the  skies  –  The  success  of  AirAsia     -­‐Prerna  Makhijani(PGDM  IB  2011-­‐13)   Undoubtedly,   this   makes   AirAsia   the   largest   low-­‐   fare   no-­‐frills   airline   in   Asia,   with   operation   in   25     countries  and  more  than  400  destinations.     The  Growth  Story     Tony   Fernandes,   CEO   of   AirAsia   bought   the     company   for   a   token   sum   of   one   ringgit   equivalent   to   US$   0.26   at   that   time   with   US$   11     million   worth   of   debts   in   2001.   Within   a   year,   Tony   turned   the   fortune   of   the   airlines   by     launching   new   routes   from   its   hub   and   at     extremely   low   promotional   prices.   Rest   is   just   history.     AirAsia’s   business   model   is   very   similar   to   Kingfisher   airlines   just   got   a   taste   of   the   storm   Southwest’s   model   of   quick   turnarounds   and   low-­‐ brewing   up   in   the   Indian   aviation   skies   recently.   cost   fares.   This   has   been   seen   as   a   “Blue   Ocean   Their   complains   range   from   exorbitant   jet-­‐fuel   Strategy”  by  industry  experts.  Blue  Ocean  strategy   taxes,  or  denial  to  buy  its  fuel  elsewhere  for  less  to   is   all   about   the   high   growth   and   profits   an   the   ban   on   foreign   airlines   investing   in   Indias   organization   can   generate   by   creating   new   aviation   industry.   Kingfisher   is   looking   to   demand   in   an   uncontested   market   space,   or   a   restructure  the  companys  US$1.3  billion  debt  load   "Blue   Ocean",   than   by   competing   head-­‐to-­‐head   with  the  support  of  a  strategic  investor.     with   other   suppliers   for   known   customers   in   an   existing   industry.   This   is   exactly   what   AirAsia   has   Well  even  if  all  the  above  problems  for  Kingfisher   done   for   itself,   as   they   have   created   Asian   airlines  are  resolved  there  is  a  lot  they  could  learn   customers   for   whom   transportation   need   not   be   from  their  Malaysian  distant  cousin  –  AirAsia.   an   exotic   experience.   With   the   world   coming   closer,   people   want   to   explore   the   world.   Asians   To  begin  with,  AirAsia  has  the  world’s  lowest  unit   particularly   want   to   eat,   shop   and   travel.   This   is   cost   of   US$   0.023   per   available   seat   kilometer   (the   exactly   what   they   are   offered   by   AirAsia;   budget   figure   being   50%   higher   for   Indian   budget   carriers)   travel  and  lodging.     and  a  passenger  break-­‐even  load  factor  of  52%.  It   has   hedged   100%   of   its   fuel   requirements   for   the   As  for  the  promoter  of  the  company,  Tony,  he  has   next   three   years,   achieves   an   aircraft   turnaround   his   game   in   place   as   he   talks   about   his   strategy.   time   of   25   minutes,   has   a   crew   productivity   level   The   company   plans   to   be   the   largest   player   in   that  is  triple  that  of  Malaysia  Airlines  and  achieves   low-­‐cost  category  on  home  turf  and  then  go  on  to   an   average   aircraft   utilization   rate   of   13   hours   a   expand   in   ASEAN.   With   its   long   distance   carrier   day  for  domestic  and  17-­‐18  hours  a  day  for  its  long   AirAsiaX,   it   seems   to   be   already   eating   into   haul  flights.   China’s  and  India’s  market  share.        14  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       AirAsias   LCC   model   is   borrowed   from   Ryanair   and   They   have   this   cost   advantage   because   they   like   the   Dublin-­‐based   airline,   AirAsia   too   has   an   employ  just  68  people  per  aircraft,  which  is  again   "ancillary   income"   component   in   its   earnings.   So   amongst  the  lowest  in  the  world.  The  cabin  crew   only   7   kg   hand   baggage   is   free   and   the   extra   often   multitasks   to   clean   the   aircraft   and   handle   charge   starts   at   US$   10   for   up   to   15   kg.   A   the   boarding.   AirAsia   is   increasingly   using   wide-­‐ preferred   seat   comes   for   an   extra   charge.   bodied   aircraft   which   offer   more   seats   and   burn   Ancillary  income  earned  per  passenger  works  out   less  fuel  than  narrow-­‐bodied  aircraft  -­‐  the  current   to  US$  1.2.  Advantages  for  passengers  are  no  fuel   favourite   of   Indian   carriers.   It   runs   its   own   surcharge   (until   May   2011)   and   a   30-­‐40   %   academy  to  train  pilots,  unlike  Indian  carriers  who   discount  on  meal  coupons,  baggage  charges,  etc  if   poach   from   each   other   and   drive   up   salaries   to   paid  online  while  booking.   exorbitant  levels  in  the  bargain.   The   company   also   does   aggressive   branding   The   company   also   plans   to   keep   the   budget   exercises  and  public  relations.  They  have  invested   traveler   happy,   by   offering   Airbus   A-­‐330   flights   a   lot   of   money   in   Manchester   United   football   club   from   Delhi   and   Mumbai,   12   premium   class   seats   and   motor   racing   team   Williams.   The   company   with   flat   beds,   but   the   fares   are   60   to   70   per   cent   believes   in   the   long   term   return   of   branding   and   lower  than  business  class  of  a  full-­‐service  carrier. plans  to  continue  to  do  so  in  future  as  well.       The  Future  for  AirAsia   For  future,  AirAsia  plans  to  connect  smaller  cities   and  towns  in  India  by  leveraging  on  under-­‐utilized   AirAsiaX,  the  long-­‐haul  budget  carrier  of  the  group   airports   and   under-­‐served   routes   in   the   country.   now   has   expansion   plans   for   the   Indian   and   They  believe  in  a  volume-­‐led  business  and  aspire   Chinese  skies.     to   play   the   game   to   perfection   with   27   million   AirAsia   entered   the   Indian   market   by   launching   a   passengers  aboard  this  year.     daily   Airbus   A-­‐330   flight   from   Delhi   to   Kuala   Lumpur   at   a   basic   fare   of,   hold   your   breath,   just   Re   1   for   two   days   (excluding   taxes   and   fuel   surcharges).  It  has  embarked  on  a  carpet-­‐bombing   strategy  in  India  since  then.  Its  costs  are  far  lower   than  any  of  the  Indian  low-­‐cost  carriers.                       15  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11     Africa  -­‐  Continent  in  Focus   -­‐Kaustav  Ghosh  (PGDM-­‐IB  2011-­‐13)     2) Africa   possesses   40%   of   world’s   gold   ore   deposits.   3) FDI  in  Africa  has  increased  from  $9  billion  in   2000  to  $16  billion  in  2008.   4) Ivory   Coast   is   the   world’s   largest   producer   of   cocoa.     5) Africa’s   collective   GDP   in   2008   was   1.6   trillion   dollars,   roughly   equal   to   Brazil   or   Russia’s     6) 10%  of  world’s  oil  reserves  are  in  Africa   “KE  NAKO”  –  IT  IS  TIME   Yes,  Africa  has  come  a  long  way  from  being  just   a  nation  of  wild  animals  and  place  infested  with   Rewind  for  a  few  seconds  to  the  good  old  days  of   civil   wars.   In   the   past   decade,   growth   in   Africa   90’s   and   early   2000   -­‐the   time   when   Discovery   has   invited   much   attention   by   researchers   and   channel   used   to   be   narrated   in   English.   A   global   leaders   all   around   the   world.   In   a   rather   documentary   on   Africa   will   generally   conjure   one   eye-­‐opening   report   released   by   Mckinsey   MGI,   common   image   in   everyone’s   minds   –   a   huge   over  the  past  decade,  Africa’s  real  GDP  grew  by   barren   and   parched   land,   a   grassland   visible   far   4.7%   a   year,   on   average—twice   the   pace   of   its   away   in   the   horizon,   a   cheetah   trying   to   catch   its   growth   in   the   1980s   and   1990s.   The   surge   cut   prey   or   a   herd   of   wild   African   elephants   trying   to   across   nations   and   sectors.   The   continent   is   cross   a   river.   Basically   the   words   “Africa”   and   among   the   fastest-­‐expanding   economic   regions   “Forest  Safari”  were  spot-­‐on  synonymous.  All  that   today.   In   fact,   Africa   and   Asia   (excluding   Japan)   the   word   Africa   meant   was   wild   animals,   safari   or   were   the   only   continents   that   grew   during   the   the   Sahara.   As   far   as   politics   was   concerned,   Africa   recent   global   recession.   Though   Africa’s   growth   was  associated  JUST  with  bloody  civil  wars,  pirates   rate   slowed   to   2%   in   2009,   it   bounced   back   to   (read  Somalia)  –  a  view  shared  not  just  by  the  kids   nearly   5%   in   2010,   and   in   2011   it   is   likely   to   but   also   by   most   of   the   adults   outside   Africa.   The   touch  5.2%.   only   positive   thing   most   would   recall   knowing   about   Africa,   just   10   years   back,   would   be   Nelson   So,  is  this  growth  a  one-­‐off  case  or  does  it  have   Mandela  or  sometimes,  Kofi  Annan.   any   authenticity   for   sustainability?   After   all,   in   the   1970’s   when   there   was   an   oil   boom,   the   But   contrast   these   with   the   following   economy   did   well.   After   the   oil   prices   went   information/perception  about  present  Africa.   down,  Africa  was  yet  again  back  in  doldrums!!   1) Africa  has  80%  to  90%  of  the  world’s  chromium   But   this   time   around,   internal   and   not   just   and  platinum  deposits.   external  (contrary  to  earlier  time)  factors  are          16  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       driving  the  growth  potential  of  Africa.  Increase  in  oil   They   are   Africa’s   biggest   consumer   markets   and   prices,   from   20$   a   barrel   to   $150   in   2010   and   an   hence   are   ideal   places   for   consumer-­‐facing   increase   in   commodity   prices   (gold,   platinum,   businesses  like  retail,  telecom  and  banking  to  base   minerals,   grains   and   other   raw   materials)   has   their  operations.  Walmart  struck  a  $2.4  billion  deal   helped   in   boosting   exports   and   the   economy   of   to   pick   up   a   51%   stake   in   one   of   South   Africa’s   Africa.   But   natural   resources   have   contributed   to   largest  retailers,  Massmart,  which  has  stores  in  13   just   24%   of   the   growth   from   2000   to   2008.   Majority   other  African  countries.  The  second  type  is  the  oil   of   the   growth   has   come   from   wholesale   and   retail   exporters   which   unsurprisingly   have   the   highest   trade,   transportation,   telecommunication   and   per  capita  incomes  in  lieu  of  their  oil  reserves,  but   manufacturing.   This   has   happened   because   of   are   less   diversified.   Countries   like   Angola,   Nigeria   various   factors.   Many   African   countries   like   Angola   and   Algeria   have   relatively   less   developed   service   and  Mozambique,  have  tried  to  bring  an  end  to  the   industry.   Political   instability   is   a   prime   source   of   deadly   civil   wars   creating   the   much   needed   political   concern   in   these   regions.   The   third   type   is   the   stability   important   for   growth.   The   number   of   transition   economies   like   Ghana,   Kenya   and   serious  conflicts  in  Africa  declined  from  an  average   Uganda   have   lower   per   capita   incomes   and   are   of   4.8   a   year   in   1990’s   to   2.6   in   2000’s.   Also,   the   agricultural   based   economies.   The   penetration   of   governments   have   tried   to   strengthen   the   fiscal   banking,   telecom   and   modern   retailing   is   much   condition   of   economies   by   bringing   down   inflation   lower   than   it   is   in   the   diversified   economies,   but   (21%   to   8%)   and   reducing   budget   deficits   (4.8%   to   that  offers  attractive  opportunities.  The  last  type  is   1.9%  of  GDP)  and  foreign  debt  (83%  of  GDP  to  58%).   the   pre-­‐transition   economies   which   are   the   poor   This   along   with   greater   disinvestment   in   PSU’s,   economies  with  annual  per  capita  GDP  of  $350  on   reduction   of   trade   barriers   and   corporate   taxes,   average.   Congo,   Ethiopia   and   Mali   lack   basics   such   strengthened   regulatory   and   legal   systems   has   as   stable   government,   strong   public   institutions   increased   investor   confidence   in   the   continent   and   and  sustainable  agricultural  development.     helped   leverage   greater   economies   of   scale   to   improve  overall  competitiveness.     Opportunities:   Economically,   Africa   can’t   be   understood   as   a   Africa’s   economic   growth   is   creating   significant   whole.   Different   regions   have   differential   growth   business   opportunities.   But   these   are   often   patterns.   African   countries   can   be   divided   into   overlooked  by  global  companies.  If  it  maintains  its   various   clusters   based   on   their   economic   prowess.   long-­‐struggled   political   and   macro-­‐economic   The   first   is   diversified   economies   which   consist   of   stability,   and   if   the   governments   there   continue   the   most   advanced   economies   like   Egypt   their   pro-­‐business   attitude,   four   groups   of   (discounting   the   negative   impact   on   its   economy   industries   could   typically   emerge   significantly.   due   to   Jasmine   Revolution),   Morocco,   South   Africa   These   are   consumer-­‐facing   industries,   resources,   and   Tunisia.   They   are   characterised   by   relatively   agriculture  and  infrastructure.  Mckinsey  estimates   high   per   capita   incomes   and   stable   GDP   growth.   that  these  industries  will  have  a  combined  GDP  of   These   economies   have   established   manufacturing   2.6  trillion  dollars  in  revenue  annually  by  2020.     and   services   industry,   services   having   contributed     almost  70%  of  the  GDP  growth  of  these  regions  over   past  decade.           17  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11     Africa   is   already   one   of   the   most   dynamic   Agriculture   productivity   remains   largely   consumer   markets.   Many   global   companies   are   untapped   in   Africa.   The   continent   has   60%   of   expanding   in   Africa   –   Standard   Chartered   has   world’s   total   uncultivable   arable   land.   If   it   presence   in   14   countries,   Unilever   operates   in   21   harnesses   cultivable   land   like   Brazil   did,   it   can   African  nations.     increase  production  by  a  significant  proportion.   Also   HYV   (high   yielding   varieties)   of   crops   are   Domestic   players   like   Ecobank,   MTN,   Shoprite   and   less  abundant  in  Africa.  Most  of  the  production   UBA   also   have   pan-­‐African   operations.   Mckinsey   is   of   lower-­‐value   crops   such   as   bulk   cereals.   If   has   estimated   that   Africa’s   consumers   will   spend   Africa  were  to  improve  on  these  fronts,  a  green   $1.4   trillion   in   2020   (assuming   the   continent   revolution   is   almost   necessary.   Such   a   grows  by  5%  a  year).  As  incomes  rise  and  Africa’s   phenomenon,   also   called   as   breadbasket   consuming   households   rise   in   number,   spending   approach,   will   fuel   the   growth   of   upstream   patternwill   shift   from   consumption   of   food   and   input   markets   (fertilizers)   from   $8   bn   today   to   beverages   to   retail   banking,   telecom,   education,   $35  bn  in  2030.  Downstream  markets,  especially   healthcare,  housing  and  other  goods  and  services.   vegetable  and  fruit  processing  could  grow  even   The   opportunities   will   emerge   essentially   in   the   faster,   from   $40   bn   to   as   much   as   $240bn.   diversified  economies,  oil  exporters  and  transition   Biofuel   production   like   ethanol   could   be   economies.   By   2020,   cities   like   Alexandria,   Cairo,   especially   important   for   Africa’s   inland   oil   Cape   Town,   Johannesburg   and   Lagos   will   each   importing   countries,   as   a   substitute   for   have   consumer   spending   equivalent   to   that   of   increasingly   expensive   oil.   Africa   could   become   Bombay   and   New   Delhi   (>$25   bn).   Cities   like   a  major  supplier  of  biofuel  to  Europe.   Casablanca,   Durban,   Khartoum,   Pretoria   will   be   the   next   largest   markets   with   household   Africa   was   always   strong   in   resources.   It   has   consumption   of   each   between   $15   billion   to   $25   been   driving   its   exports   on   the   basis   of   its   billion.   abundance  of  minerals,  oil  and  gas,  iron  ore  and   coal.  It  would  continue  to  grow  on  these  fronts,   especially   iron-­‐ore   and   oil.   Increasing   no   of   global   players   (China,   Australia   etc)   are   investing   in   the   resource   extraction   business   in   Africa.   In   2008,   China   National   Oil   Company   struck  a  $2.7  bn  deal  for  deepwater  oil  rights  in   Nigeria.  Similar  investments  have  been  made  in   Angola  by  China.  ArcelorMittal  has  also  invested   in   a   $2.2   bn   project   of   iron   ore   extraction   in   Senegal.   Quite   evidently,   mining   and   EPNG   business  in  Africa  will  offer  lucrative  benefits  in   the  days  to  come.   An   important   key   to   Africa’s   future   economic   growth   in   all   sectors   is   its   growth   in   quantity     and  quality  of  infrastructure.          18  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       Huge   investments   are   required   to   achieve   this.   However,   tapping   Africa   as   the   next   future   Even   after   efforts   put   by   government,   an   market   depends   not   just   upon   Africa’s   investment   of   $118bn   a   year   is   required   to   permeable  market  conditions  but  also  about  the   address   the   backlog   to   keep   pace   with   economic   right   strategies   adopted   by   western   and   Asian   growth.   This   gap   offers   a   huge   opportunity   for   MNCs.   A   right   entry   strategy,   holistic   banking   institutions   across   world   to   offer   understanding   of   traditional   distribution   corporate  loans  to  African  nations.  Since  these  will   network  of  Africa,  training  the  people  with  right   be  secured  by  African  government,  the  NPA  status   skill   sets   and   the   right   PR   exercise   for   cutting   of   these   loans   would   be   low.   Also   there’s   a   huge   through   the   bureaucratic   processes   of   Africa   is   potential   for   growth   of   telecom   industry   in   the   equally,   if   not   less,   important   in   determining   region.   Investment   in   telecom   has   been   high   in   potential  success  in  Africa.   the   region.   This   is   evident   from   Bharti’s   $10.7bn   acquisition  of  Kuwait  based  Zain  Telecom  –  a  pan   Africa   holds   the   same   potential   that   China   did   African  telecom  player.   twenty   years   ago.   A   large   rural   population   is   moving   to   the   cities,   landing   jobs   with   higher   incomes,   and   starting   to   enjoy   discretionary   spending.  Demand  is  growing,  and  foreign  direct   investment  has  soared.  Just  as  investing  in  China   poses   some   political   risk,   so   too   does   doing   business   in   Africa.   Companies   must   think   carefully   about   the   approaches   they   adopt,   but   it  will  definitely  be  worthwhile.  First  movers  will   have  the  opportunity  to  leverage  on  strong  local   partnerships   to   capture   market   share   of   a   PIE   which  is  rather  large.             “  T apping Africa as the next future market depends not just upon Africa’s permeable market conditions but also about the right strategies adopted by MNCs. “                 19  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11     International  Logistics   -­‐Harneesh  G  (PGDM-­‐IB  2010-­‐12)     Transporting into the future.. where is the global logistics services industry headed?   (i) Logistics – an integral part of the value chain   The fundamental value chain of any company as per Michael Porter could be represented as   follows (taking into consideration only the primary activities):     The company’s choice of value chain activities is instrumental in delivering value to the   customers. Logistics is a key activity in the value chain which could be effectively   restructured to enhance the value delivered to the customers.   (ii) Evolution of the global logistics services industry                       Globalization, consolidation of markets, technological advancements have driven the growth in the logistics services market. The industry players are incrementally moving away from   asset-based services to more knowledge driven approaches..   Customers are looking for “one-stop-shops” that would effectively provide solutions to the complexities in managing their global supply chains.     • 1st party – entirely asset based, highly fragmented, mostly unorganized, specific logistics functional areas addressed, low barriers to entry, inside the organization   • 2nd party – similar to 1st party, multiple logistics functional areas addressed, external to   the organization • 3rd party – they are lean on assets, the informational intensity is higher and more focus   is laid on integrating their capabilities • 4th party – orchestrator of multiple 3rd party logistics providers with a layer of IT  20  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       • 5th party – this is where the future lies, zero asset intensity, entirely knowledge driven, informational intensity ensures highest level of control across the supply chain (iii) Sustainable competitive advantage in logistics services Competitive advantage in today’s logistics services industry takes a global dimension. There is no clear cut basis for competition either on the basis of low cost leadership or differentiation. There are several intermediate positions which need to be judiciously explored. The industry player has to work towards delivering a superior mix of cost advantage as well as differentiation in comparison to the competitors to compete globally. The bottomline would be to drive the widest possible wedge between cost and customer willingness to pay. As per the activity systems view, though the customer needs are similar the set of activities performed to reach them differs. A unique mix of activities of activities with the highest degree of fit would be the optimal configuration for maximum competitive advantage. The core competencies would be the execution capabilities across the different logistics functional areas with a unique mix of activities. The core products would be the logistics services that are tailor made to individual customer needs leveraging on these execution capabilities. The key resources of a logistics service provider are the employees that drive the knowledge expertise, the degree of technology enablement it can offer across the supply chain and the relationships in terms of the strategic partnership with the different asset providers. These resources contribute to competitive advantage by their virtue of inimitability (path dependency and strategic complexity), approbriability and competitive superiority (distinctive competencies). (iv) Driving down costs using logistics Traditionally organizations have been concentrating on improving operational efficiencies and looking at ways of driving down the overheads. There has been very little focus on optimization of logistics. The following factors have made it imperative for organizations to take a second look at logistics 1) Increasing logistical complexity and proportionate costs 2) Need to track and trace material movement across the supply chain In recent times logistics has been the focal point in strategy formulation to enhance the value delivered to the customers. The below mentioned figures show the current market share of 3PL and the current logistical costs as a percentage of GDP in global economies’ leading growth engines India and China.       21  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11         CountryLogistics cost as a % of Share of 3PL GDP India 13.0% - 14.0% Less than 10% China 18.0% Less than 10% Source: Deloitte Report - Logistics and Infrastructure Exploring Opportunities The study by Deloitte has established an inverse relationship between the share of 3PL service providers and the total logistics costs as a percentage of GDP. Given the incremental pressures on margins for Oil and Gas E&P and marketing companies there is a huge premium on driving down costs. Logistics classically being known as a cost centre provides tremendous opportunity for driving down costs and improving value delivered to the customers. (v) Derisking the supply chain One of the fundamental imperatives of logistics is having the right material in the right quantity at the right time at the right place for the right price in the right condition to the right customer. Ensuring the same also to a great extent depends on the availability of the right information across the supply chain. The global dimension to logistics compounds the level of risks entailed by the virtue of the 2Ds and 2Us (distance, diversity, uncertainty, unavoidability). The plethora of risks identified could be broadly classified as: 1. Political risks (systemic, distributive, procedural, catastrophic) 2. Demurrage implications 3. Inventory stock-outs 4. Multimodal challenges (transit damages and losses) 5. Environmental concerns These risks have a pivotal role to play in influencing the value delivered to the customers. Henceforth they would have to be proactively factored at every step of logistics execution. (vi) What lies ahead With the incremental focus on driving down logistics costs and rising stakes in the view of competition, the COO of every organization is in the limelight. Industry gurus contend that we are on the verge of a paradigm shift – The decade gone by saw the rise of CFOs into the mantle of CEOs. The COO is the new CEO!    22  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       Faculty  Speak:   Issue  of  GDR/ADR  by  Indian  companies-­‐  Recent  Trends   Prof.  B.  Bhatia   Finance  Faculty         A   significant   development   in   the   authorized   depository,   normally   a   US   internationalization  of  Indian  financial  markets  has   Depository   or   a   bank   in   lieu   of   shares   of   the   been   the   permission       accorded   to   Indian   foreign  company.  The  question  arises  as  to  why   companies,  in  the  initial  years  of  economic  reforms,   do   Indian   companies   go   through   the   to   raise   funds   from   international   financial   markets   depository   route?   Indian   companies   are   through   the   issue   of   foreign   currency   convertible   prohibited   by   law   from   listing   rupee-­‐ bonds   (FCCBs)   and   also   the   issue   of   shares   under   denominated   shares   directly   in   foreign   stock   GDR/ADR     and   permitting   the   foreign   institutional   markets.  Therefore  they  issue  such  shares  to  a   investors(FIIs)     to   participate   in   the   secondary   depository   which   has   an   office   in   India.   These   market.   In   2004   the   government   also   allowed   the   shares   remain   in   India   with   a   custodian.   foreign   companies   to   raise   funds   in   the   Indian   Against   the   underlying   shares,   the   depository   primary  market  through  selling  securities  under  the   issues   dollar   denominated   receipts   to   the   Indian  Depository  receipts  (IDRs).   foreign   investors.     The   foreign   investors   can   then   sell   these   receipts   in   the   foreign   stock   GDR/ADR/IDR   are   acronyms   refer     to   a   family   of   exchange   or   back   to   the   depositor   and   get   instruments   called   Depository   Receipts   .They     are     delivery   of   the   underlying   rupee   denominated   receipts   for   shares   of   a   foreign   company   ,   often   shares   which   can   then   be   sold   in   Indian   listed   in   a   stock   exchange   that   is   not   easily   markets.  ADR’s  are  listed  on  an  American  stock   accessible   to   non-­‐resident   investors   .   The   exchange.   The   issue   process   is   governed   by   underlying   shares   remain   in   safe   custody   with   a   American   laws   and   Securities   and   Exchange   bank   in   the   issuer’s   home   market,   but   the   receipt   Commission   (SEC).A   listing   in   American   stock   may  be  traded  elsewhere.  Dividends  payments  are   exchange   involves   adhering   to   very   stringent   usually   in   the   US   dollars   and   depository   receipts   disclosure  and  accounting  norms.  The  accounts   can   be   issued   with   or   without   the   voting   rights   of   of   the   company   have   to   be   represented   the   underlying   stock.   Depository   receipts   are   according   to   US   GAAP   or   Generally   Accepted   negotiable  instruments  issued  to  investors  by  an   Accounting  Principles           23  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11           Underlining   Custodian     Issuer     Shares     Local  Bank       Company         Depository   Listing   Foreign  Stock       Bank            Exchange       Money         Foreign      Investors     Indian   companies   entered   in   the   international   some   cases   the   companies   have   issued   GDR   to     market   in   1992   with   the   first   GDR   issue   by   over   130   or   200   times   of   the   size   of   their   equity   Reliance  Industries  on  London  stock  Exchange.  In   capital.     fact   the   first   ADR   was   issued   in   1927   by   J.P   The   laissez-­‐faire   approach   that   helped   Indian     Morgan  for  British  Retail  Selfridge.  However  the   GDR  markets  witnessed  a  lull  till  1993  end  in  the   companies   to     raise   over   $   26   billion     since   1992     wake  the  securities  scam  and  the  consequent  fall   when   the   government   first   opened   up   this     in   the   domestic   market.   With   the   successful   ADR   route     is   about   to   change   after   Securities       issue   by   Infosys   Technologies   during   1999   the   market    regulator  SEBI  recently  punished    a  few   companies   that   had   issued   ADR/GDR     and       GDR   market   gained   momentum.   Till   October   2011   nearly   240   companies   have   raised   over   $26   manipulated  local    stock  prices.     billion   from   the   international   markets.   This   SEBI’s   Integrated   Market   Surveillance   system   process       eases   the   availability   of   foreign         (IMSS)  noticed  unusually  large  orders  as  well  as   exchange   at   lower   cost   and   at   lower   risk.   The   large-­‐scale   off-­‐market   transactions   in   a   few     volume  of  the  funds  rose  this  way  varied  widely   stocks  between  January  2009  and  May  2010.       from  year      to  year.  The  size  of  ADR/GDR  lacked     uniformity  and  in          24  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       An  investigation  by  SEBI  revealed  that  a  merchant   same  set  of  stock-­‐brokers  based  in  India  and  even   banking  firm  Pan  Asia  Advisors  ltd  and  its  founder   the   brokers   were   found   to   be   connected   to   and   owner   Arun   Panchoriya   and   other   entities   Panchoriya  and  Pan  Asia.  Given  the  fact  that  the   worked   closely   with   him.   The   regulators   several   little   known   companies   have   raised   the   investigation  revealed  that  Pan  Asia  arranged  GDR   funds   through   GDR   the   regulator   might   reverse   issues  for  a  few  firms  in  2009  and  in  each  of  these   the  liberalized  policy  in  this  regard  in  future.  SEBI   issues  the  proceeds  of  GDR  was  held  by  European   probe  does  indicate  that  there    are  enough  issue     American   investment   Bank   AG   Austria   (Euram   arrangers   who   do   not   care   about     the   quality   of   Bank).   Euram   is   linked   to   Panchoriya.     Its   website   issuing   companies   and   who   pocket   hefty   fees   lists  one  of  its  two  offices  as  Euram  Bank  Asia  Ltd   without     carrying   out   proper   due   diligence.   It   is   in   Dubai.     Sebi   discovered   this   as   a   joint   venture   understood   that   regulators   are   looking   into   these   between  Euram  and  Pan  Asia  ,  and  Panchoriya  and   loopholes   and   are   planning   to   impose   stringent   his   brother   are   directors     of   Euram   Bank   Asia.     conditions  on  Indian  companies  issuing  GDRs.   SEBI’s   further   investigation   revealed   that   each   issue   of   GDR   was   almost   higher   than   the   existing   Indian   Depository   Receipts   (IDR)   were   introduced   paid-­‐up   capital   of   these   companies.   In   one   case   in   2004   based   on   the   concept   similar   to   that   of   Ashai   Infrastructure   and   Projects   Ltd.,   the   GDR   GDR/ADR   with   the   objective   of   providing   a   issue   was   eight   times   the   total   equity   of   the   platform   to   foreign   companies   to   directly   raise   company   prior   to   the   issue   of   GDR.   Its   paid   up   capital  in  India.  So  far  only  one  foreign  company   capital   went   up   from   37   million   shares   to   336   namely   Standard   Chartered   Bank   PLC   was   the   million  shares  after  the  issue  of  GDR.     first   foreign   company   to   be   listed   in   the   Indian   stock   exchanges   through   IDR   route.   However   The   initial   subscribers   to   these   GDR   were   almost   factors   like   lack   of   clarity   on   capital   gain   tax,   the   same   set   of   investors.   After   the   GDR   issue,   the   voting   rights,   non-­‐fundability   and   barring   of   investors   would   cancel   and   convert   them   into   insurance   companies   `have   made   issuing   IDR’s   Indian   shares   and   then   sell       them   in   the   Indian   unattractive.   markets   SEBI   further   observed   that   large   portion   of   these   sales   were   in   the   form   of   synchronized     trades  with  the                       25  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       Alumni  Speak   Mr.  Mihir  Deshpande   PGDM-­‐IB,  2007-­‐2009  Batch    (New   Product   Planning)   I   am   responsible   for   evaluating   products   from   J&J   pipeline   and   ensuring  its  launch  in  India.    It  involves  preparing   business   cases   for   the   country   team   (market   analysis,   attractiveness,   and   competitive   landscape),   decision   on   regulatory   timelines   (country   attractiveness),   financials   (sourcing   decisions,   pricing   strategy,   profits)   etc.I   have   been   fortunate   enough   to   have   received   excellent   education   from   IB   course   that   has   put     me  in  good  stead  for  such  roles.   Profile   Looking   back   when   you   were   a   student,   what   do   you   feel   (skills,   capabilities,   subjects)   you   Mr.   Deshpande   is   currently   the   Assistant   should   have   focused   on   while   you   were   a   Manager;   Business   Development   &   New   Product   student  at  SIMSR-­‐PGDM  IB?        During  my  college   Planning   at   Johnson   &   Johnson.   He   has   also   days,   I   have   been   biased   towards   certain   been   associated   with   Merck   Sharp   &   Dohme,   subjects   and   not   concentrating   on   all.   I   feel   I   wherein  he  worked  in  the  Market  Research  and   should   have   concentrated   on   all   subjects   with   Analytics   division   as   an   assistant   manager.   He   similar  rigour.   had   also   been   an   active   member   of   the   “International  Business  Society”  at  SIMSR.     What   would   you   suggest   for   the   current   PGDM-­‐ IB   batches   (2010-­‐12,   2011-­‐13)   in   order   to   Interview   improve   their   long-­‐term   career   prospects?           MBA   is   means   to   an   end!   Try   to   identify   your   What  were  your  expectations  when  you  joined   strengths  and  areas  of  interest!  Once  identified,   PGDM   IB,   SIMSR   in   2007?   Which   of   those   tap   career   opportunities   that   synchronise   with   expectations,   you   think,   have   been   fulfilled   in   your  interests.     these  2.5  years?   I  expected  an  MBA  course  to  assist  me  build  my   What   capabilities   and   skills   should   PGDM-­‐IB   career  to  its  fullest  potential,  on  a  fast-­‐track,  and   students  develop  while  at  SIMSR?    We  have  an   access   to   network   of   MBA   students,   extremely   robust   course   content   supported   by   distinguished   faculty,   alumni,   and   business   one   of   the   best   faculty   members.   Focus   on   Case-­‐ leaders.   PGDM   IB   course   has   helped   me   to   study   based   learning;   increase   as   much   industry   realize  these  expectations.   interaction  as  possible.     What   changes   would   you   like   to   see   in   the   Over  the  last  2.5  years,  how  have  you  leveraged   content  and  format  of  e-­‐Globuzz?    e-­‐Globuzz  is  a   your   learning   pertaining   to   IB?   In   what   ways   great  initiative!  Keep  up  the  good  work.   has  PGDM  IB  programme  helped  you  to  rise  up     the   corporate   ladder?   I   have   been   extremely   -­‐  Gurpreet  Kaur  (PGDM-­‐IB  2011-­‐13)   benefitted  from  the  entire  course  content!  In  my   current  role      26  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       Highlights  of  International  Business  Conference     IBS  @  SIMSR  has  been  organizing  interactions  over  the  last  two  years  with  senior  company  executives  and   government  officials  for  SIMSR  students.  It  was  felt  that  half  day  event  with  several  distinguished  speakers   with  diverse  backgrounds  would  greatly  help  enrich  International  Business  perspective  of  students  of  both   1st  and  2nd  year.  Hence  an  international  business  conference  was  organized  as  a  half  day  event.   This  conference  was  held  on  24th  September  2011  and  was  well  attended  not  only  by  SIMSR  students  but   also  our  alumni.       Program  for  International  Business  Conference  on  Saturday,  24th  September,  2011                   Speaker   Designation   Organization   Topic   Foreign  Exchange   General  Manager,  Foreign   Reserve  Bank  of  India,   Mr.  R.  Rajagopalan   Management-­‐  Indian   Exchange  Department   Mumbai   Experience  and  FEMA   Capgemini  India  Pvt.  Ltd.,   Challenges  and  Trends  in   Mr.  Makarand  Teje   Vice  President   Mumbai   Global  IT  Consulting   India-­‐EU  Trade  Relations  and   Trade  &  Investment   Consulate-­‐  General  of   Business  Opportunities  for   Mr.  Tom  Vermeulen   Commissioner  of  Flanders,   Belgium,  Mumbai   Indian  Companies  in  Europe   Belgium   particularly  Belgium   Global  Competitiveness   Divisional  Manager,   Raychem  RPG  Pvt  Ltd,   through  Organizational   Mr.  Satish  Deshpande   International  Business   Mumbai   Excellence  particularly  in   Division   Manufacturing   General  Manager,  Global   Sandoz  India  Pvt.  Ltd,   Global  Generics  Today  and   Mr  Tejasvi  Sharma   Sourcing              (TB  and  API)   Mumbai   Beyond           27  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       Topic:  Foreign  Exchange  Management  Act  –     Indian  Experience  of  FEMA     Mr.  Rajagopalan  started  with  the  history  of   why   and   how   foreign   exchange   was   regulated   in     India  from  the  pre-­‐independence  days.  He  covered     decade  wise,  the  major  changes  in  Govt.  of  India’s   thinking   and   the   evolving   role   of   RBI.   He   dwelt   in     depth   on   the   Foreign   Exchange   Regulation   Act   (FERA),   1973,   its   highlights   and   why   it   was   later     changed  to  FEMA.  He  concluded  with  implications   of   FEMA   for   India   based   companies   and   MNEs   Mr.  R.  Rajagopalan  –  G.M,  Foreign  Exchange   Dept.  Reserve  Bank  of  India  (RBI),  Mumbai   operating  in  India.     Topic:  Challenges  and  Trends  in  Global  IT   Consulting     Mr.   Teje   started   with   the   International     Business   landscape   for   IT   software   and   IT   consulting   sector   and   the   role   of   MNEs   like     Capgemini   in   shaping   the   landscape.   Capgemini     being   a   France   based   MNE   needs   to   adjust   and   adapt  to  the  culture  of  more  than  100  countries     in  which  it  operates.  He  dwelt  at  length  on  how   Capgemini   deals   with   this   culture   based   challenges   both   through   its   sensitization   of   IT     Mr.  Makarand  Teje  –  Vice  President  –   professionals   and   also   through   job   rotation   Capgemini  India  Pvt.  Ltd.,  Mumbai   across  countries  for  its  key  managers.       Topic:  India  –  EU  Trade  Relations  and  Business   Opportunities  for  Indian  Companies  in  Europe     particularly  Belgium     Mr.   Vermeulen   began   with   the   history   of   economic   co-­‐operation   through   trade   and   cross     border  investments  between  Belgium  and  India.     He   focused   on   complementary   capabilities   and   resources   of   Belgium   and   India   and   how   they     could   be   leveraged   by   companies   based   in   these   countries   for   building   their   International   Mr.  Tom  Vermeulen  –  Trade  &  Investment   Business  in  European  Union  (EU).   Commissioner  of  Flanders,  Belgium  –  Consulate    28  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11           Topic:  Global  Competitiveness  through   Organizational  Excellence  particularly  in     Manufacturing     Mr.   Deshpande   developed   a   concept   of   global   competitiveness   of   companies   in   the   oil     drilling   accessories   industry   like   Raychem   and   the   importance   of   excellence   in   manufacturing     to   achieve   sustainable   global   competitive     advantage.  He  explained  how  the  companies  are   leveraging  factor  conditions  in  various  countries   to  build  and  sustain  their  global  competitiveness     through  excellence  in  manufacturing.     Mr.  Satish  Deshpande  –  Divisional  Manager,   International  Business  Division–  Raychem       Topic:  Global  Generics  Today  and  Beyond     Mr.  Sharma  spoke  at  length  about  the  emerging   international   business   landscape   of     Pharmaceutical  industry  with  focus  on  Generics.     He   elaborated   why   Generics   are   becoming   increasingly   important   in   the   pharmaceutical     industry   and   outlined   strategies   for   the   pharmaceutical   companies   to   increase   global     market   share   through   greater   focus   on   Generic   pharmaceuticals.   Mr.  Tejasvi  Sharma–  General  Manager,  Global   Sourcing  (TB  and  API)  –  Sandoz  India  Pvt.  Ltd.,     Mumbai                     29  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11              30  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11                       31  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11       Highlights  of  Samavesh’11       The   theme   this   year   for   SIMSR’s   prestigious   two-­‐day   event   covering   specializations   like     International   Business,   Human   Resources   and   operations   and   functional   areas   such   as   Information   Technology   and   Entrepreneurship   was   ‘India   reaching   new   heights’.   The     International  Business  session,  the  opening  session  of  Samavesh’11  focused  on  ‘Emerging  trends   in  International  Trade  and  Cross  Border  Investments’.         The   session   commenced   with   Mr.   Rohit   Pandya,   General   Manager,     Export  Credit  Guarantee  Corporation  of  India  Ltd.  (ECGC)  who  gave     an   overview   of   the   ‘Challenges   of   credit   management   in   the   aftermath   of   the   global   crisis’.   Mr.   Pandya   also   dwelt   on   the     implications   of   overall   risk   management   for   companies   with   significant  multinational  operations.         Mr.   Tarun   Sharma,   Assistant   General   Manager,   Credit   Lines   Group,     Export  Import  (EXIM)  Bank  of  India  gave  a  very  insightful  presentation   on  the  role  of  EXIM  Bank  of  India,  the  importance  of  credit  lines  given   by  EXIM  Bank  to  various  countries  and  the  linkages  between  the  World   Bank   and   EXIM   Bank.   Mr.   Sharma   having   served   for   more   than   two   years   in   the   World   Bank   in   Washington   D.C.   on   deputation   from   EXIM   Bank  also  spoke  at  length  about  the  role  and  relevance  of  World  Bank  in   the   growth   of   international   trade   and   cross   border   investments   including  project  exports.   Both   these   sessions   were   very   enlightening   for   students   as   well   as   faculty.   The   guest   speakers   also   eminently  answered  questions  from  the  audience.    32  
    • e-­‐GlobuzZ     Vol  II  Issue  II  Oct-­‐Dec’11             For any suggestions contact us at K.J.Somaiya Institute Of Management Studies and Research Somaiya Vidyavihar ( E ) Mumbai-400077 e-mail : simsr.ibs@gmail.com   33