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Bridging the gap between theory and practise
The document discusses bridging the gap between business theory taught in B-school and real-world business practices. It provides an overview of key business functions like sales, marketing, and management. For sales and marketing, it explains their goals, key activities, and metrics of success. It emphasizes the need for a "big picture" business perspective to make better, fact-based decisions. Marrying theoretical skills with an understanding of business expectations can help bridge the gap and accelerate careers. The session suggests leveraging projects and communication skills to develop operational abilities expected of managers.
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Bridging the gap between theory and practise
- 1. Bridging The GapBetween Theory & Practice Dept of Business Economics, DU Sep 14th, 2013
- 2. Agenda • Why ThisSession ? • Why Does A Business Exist ? • What Is A Manager Supposed To Do ? • Q/A | Feedback
- 3.
- 4. Our Coursework SpansMultiple Subjects Chosen To Help Build Analytical Skills MBE Curriculum – 2012 - 14
- 5. Real Life, HoweverIs Vastly Different… 10% 25% 40% 65% 80% 90% Manager Senior Mgr Gen Mgr VP Director EVP / CEO 0-3 3-6 6-9 9 + 12 + 15 + "Do" "Think" Exp (Yrs) Designation Estimates for FMCG Industry Basis Own Experience / Hierarchy / Career Progressions “Think” v “Do” : How Roles Define Operating Priorities
- 6. Creating A DisconnectBetween The Real World & What We’ve Been Trained For • Actual Usage of B-School Skills Starts 3-5 yrs down the line • Initial exposure largely operational in nature – Lack of big picture perspective • Understanding “business” not a part of business school curricula
- 7. Why Does ABusiness Exist ?
- 8. Any Business Exists ToDesign / Create Goods / Services Which Can Be Sold To Consumers At a reasonable Profit A Constantly Ongoing Cycle…
- 9. An Organization AccomplishesThis Through Various “Sub Organizations” • Sales • Marketing • Finance • Production / Operations • Supply Chain • R & D • H R Consumer
- 10. So What DoSales & Marketing Really Do ? Sales • Ensures Product availability across markets • At a reasonable cost • Generates Revenue Marketing • Creates Consumer Mindspace • Understands Trends • Drives Innovation & product development • Owns the bottomline
- 11. This Is HowThe FMCG Sales System Moves Goods From Factory To Outlets Factory Outlet Outlet Outlet CFA CFA CFA Distributor Distributor Typical FMCG Structure : Varies By Industry Component Financial Reward CFA % commission on turnover Distributor % margin on MRP Outlet
- 12. Its Priorities Being… •Increasing Distribution – Urban / Rural – At the right outlets • Ensuring Product Availability – Through regular market servicing • Creating Sustainable, Long Term Partners • Reducing Cost of Operations
- 13. • Measures ofReach : – Numeric Distribution (ND%) : No of outlets reached v/s outlet universe – Weighted Distribution (WD%) : Reach within high salience outlets of the universe (AC Nielsen) • Volume Growth (%) • Market Share (%) (AC Nielsen) • Revenue Growth (%) • S & D Cost (% to Sales) Which Are Measured By The Following Parameters
- 14. What Does MarketingReally Do ? Sales • Ensures Product availability across markets • At a reasonable cost • Generates Revenue Marketing • Creates Consumer Connect • Understands Trends • Drives Innovation & product development • Owns the bottomline
- 15. Marketing Tries ToUnderstand The Consumer, & Helps Create Demand Consumer Connect Understand Trends Drive Innovation Media : TV, Print , Internet, Social Consumer Research, Macro Economics, Surveys New Product Development, Packaging Innovation Ad Agencies Media Agencies Research Agencies R & D, Packaging, Operations
- 16. Marketing Evaluates ItsCommunications Through –Coverage Measures : • Reach • Frequency • TRP • GRP –Effectiveness Measures: • Recall Scores • Affinity Scores
- 17. • 360 ⁰Engagement With Business Functions – Sales – Production – Packaging – Quality Control – Advertising – Media • Responsible for delivering the “bottom line” Marketing Relies On Various Functions To Deliver Its Agenda
- 18. Gross Sales a MRP10 b Units Sold 100 c Gross Sales 1000 a x b Net Sales d Retailer Margin 10% 100 d x c e Distributor Margin 6% 54 e x (c-d) f Net Sales 846 c – d - e Gross Profit g Prodn + Dist cost per unit 6 600 g x f h Gross Profit 246 f - g Net Profit i Mktng Expense 100 j Tax 10% 15 (h-i) x j Net Profit 131 h – i - j Marketing Delivers The Brand P & L Ref : “What They Don’t Teach You About Marketing” : Ketan Joshi
- 19. So, How Doesthis “bridge the gap” ?? • Requirement for Better Business Decisions • Business Expectation : B- School Graduates should help take “better decisions” • Better Decisions are similar to scientific experiments – Fact Based – Repeatable – Scalable – Are not Opinions !!
- 20. Better Decisions canresult when skills and business understanding go hand in hand • Data Analysis : – Pareto • “Should we focus on growing my larger towns, or should I expand distribution in rural areas ?” – Correlation : • “Is there a strong case to increase price offs during winter to drive sales basis historical data ? “ • Financial Analysis : – Return on Investment • “Is my distributor earning the committed ROI ? – What can I do increase it ? ” – Contribution Margin : • “ Will discounting this low CM product result in higher volume and hence higher NR, or should we discount the high CM product ?” “How do all the actions taken by me affect my territory’s P& L ?
- 21. Summing Up • CurrentTheoretical Models Explain Business Reality Partially • “Big Picture” Business Sensitivity Needed To : – Perform current role effectively – Accelerate career progression • Overview of Sales and Marketing Functions – Similar Concepts underlie other functions • Marrying Theoretical Skill Sets To Business Expectations Leads to Better Decisions
- 22. What Does AManager Do ?
- 23. Can we classifythese as : • Establishing Objectives • Organizing • Motivating • Developing People • Communicating • Measurement & Analysis Ref : Winnie The Pooh On Management : R.E. Allen
- 24. Leveraging the B-School Environment To Hone Operational Skills • Approaching Group Projects with the managerial mindset – Appoint Project Leads – Swap roles – Work with different groups • Sharpening Communication Skills – Powerpoint presentations : • Andrew E Abela • Nancy Duarte • Garr Reynolds • MS Excel : Your Best Friend – Advanced excel usage • Juice Analytics • www.chandoo.org • Management By Wandering Around • Read, Read, Read !
- 25. References • “What TheyDo Not Teach You About Marketing” – Ketan Joshi – Macmillan – 2009 • “Winnie – the – Pooh on Management” – Roger E. Allen – Penguin – 1994
- 26. Suggested Reading The EffectiveExecutive : Peter Drucker HarperBusiness; Revised edition (2006) Managing Oneself : Peter Drucker http://hbr.org/2005/01/managing-oneself/ The Checklist Manifesto : Atul Gawande Penguin – 2009 Romancing the Balance Sheet : Anil Lamba Network 18 Publications – 2010 My Years With General Motors : Alfred P Sloan Crown Business - 1990
- 27. Q / A ThankYou… anshul.punetha@gmail.com