Thursday, 20 August 2009

Videocon: New Avtar!

Few day back, I saw some new add of Videocon on television. It is running over all the channels. The last significant re-branding advertisement that I could recall is that of Godrej Properties. So, another brand trying to shave off its "Old" image.
Videocon had that typical giant "V" type symbol which stood for strength and robustness of the brand. But the electronic market is so dynamic that brands needs to re-image itself with changing demand. Gone are the days were those SRK - Dhoni adv of beechade bhai bhai impresses audience. What caught me of the new advertisement is two sweet animations, green coloured trying to make little flower happy by changing the environment, or rather providing what the flower was waiting for. The adv is also good at ears. I guess the re-branded Videocon is trying to convey brand's energy, change, eco friendly products targetted for the youth.

Prior to this, the brand has banked on other propositions, such as 'Technology for health and pleasure', 'Bring Home the Leader', 'New Improved Life', 'The Indian Multinational', 'Whatever role life gives you, play it big', as well as the most recent one, 'Eco Logic for sustainable life'.

The 'V' in the new Videocon logo is composed of two animated green, lava-like shapes – called Chouw and Mouw, which are 'live' characters and will be used to tell simple stories through a series of short videos. Both have certain personality traits, based on their physical attributes. Chouw and Mouw come to the rescue and spread happiness and joy through their charm, kindness and efforts. KR Kim, vice-chairman and chief executive officer, Videocon India, says, "The rationale behind Videocon's brand evolution comes from our constant endeavour to listen and respond to changing market dynamics in India and overseas. Our new tag line - Experience Change - will mark the beginning of a sea change for customers of consumer durable goods."

Speaking about the two mascots, Prasoon Joshi, executive chairman, McCann Worldgroup India, and regional creative director, McCann Asia, says, "Chouw is the kind-hearted one and Mouw the more mischievous one. And together, they send out the message that if you put your heart and mind together, anything can be achieved."But why did the brand feel the need for change? Prasoon adds, "The logo needed more energy. So, we energised it by giving it a more modern look. Green is the colour of the future. The logo also has a liquefied, fluid-like feel to it. It gives the feeling that the company is on the move and can take any shape and form."

Fingures crossed for the success of re-branded "India's Multinational"!

Saturday, 15 August 2009

Monsoon Blues!

Rainfall still remains most sort after season, since childhood. We use to welcome it by playing football daily, though I am a great cricket fan. Our matches use to end up with mud-bath...the best part of the game. Splashing water while walking back from school... I wonder what kids do these days! There is hardly any rain!

My concerns have changed... I hardy think of football or splashing water on somebody. If it doesnt rain, the food prices will shot up, inventories will go down, agricultural output will decline, FII will respond negatively, markets will fall, which already has........So, bottom line, it must rain and crux of the matter the government should take actions and reduce dependancy on rainfalls.

Scientists have some clues about the poor monsoon behaviour. The anticipated rise in the sea surface temperatures in the eastern Pacific Ocean — the phenomenon known as El Nino which is unfavourable for rains in India — has occurred and may impact rainfall in the coming weeks.
We have a problem on our hands. It might or it might not develop into a full-blown drought. It could turn out to be the worst drought in two decades — worse than in 2002 when the deficit was 19 per cent.

Though Indian economy has turned resilient to monsoon failures to a large extent, the key issues that could arise if monsoon deficiency is not bridged significantly

Impact on Rural spending and on GDP: The rural sector is an important consumer, it is the economy's driving force. A drought could have an impact on rural demand - which has been buoyant so far because of bountiful harvests, and which therefore kept many businesses going through the crisis months of the last year. Agriculture still employs more than 60 per cent of the population. A drought could prompt rural consumers to slash spending on domestically produced items including consumer non-durables and durables, spilling the drought's impact into the industrial sector. A poor agriculture season could have a lagging impact on industry and services. While the share of agriculture in GDP has fallen from an average of 36.4 per cent in the 1980s to about 18% now, the linkages to the other sectors continues to be high. The fact that important states like Maharashtra, Haryana & Jharkhand could go to polls in the next few quarters means that the Government could take immediate populist moves to appease the rural masses and mitigate the impact of the drought.

Impact on power generation: In an era when the power deficit continues to be a burning issue, deficient rainfall could result in lower reservoir levels and lower hydel power generation, affecting GDP growth further.

Impact on fiscal deficit: In a year when the Govt has chosen the path of stimulating demand and postponing the implementation of fiscal discipline, the additional spends on drought relief (food subsidy, fertiliser subsidy, cattle care, crop insurance etc) could either stretch the fiscal situation or result in diversion of monies meant for other purposes for alleviation of drought situation. Monies will have to be spent on fodder for cattle, which invariably are the ones that suffer the most in a drought—and cattle are often a poor man’s main assets in the countryside. If they die in large numbers, millions of people get impoverished. The Govt will have to augment outlays on the much-needed social and physical infrastructure and poverty alleviation programmes. Unanticipated weakening of the growth momentum may affect revenue collections. The last drought that the country faced in last 19 years was in year 2002 when the rainfall for the full year were lower by 19% than the normal rainfall. The cost of drought management in FY2002 was roughly Rs.138 bn (USD 3.1bn) for the central government or 0.6% of the then GDP.

Impact on inflation: As the country has enough buffer stocks of wheat and rice to survive for the next 13 months, availability of foodgrains may not be a big issue, but reaching these stocks to the nook and corner of the country could be an issue. With food price inflation already a problem, the coming months will present fresh challenges. However we do not expect any major spike in food inflation from the current levels. A softening of CPI could however take time due to this development. Even in 2002, inflation rate did not spike up despite the period coinciding with the Gulf crisis.

Impact on interest rates: Interest rates may not rise significantly as private demand for funds could remain subdued, while demand from Govt could be buoyant. Adequate management of monetary policies and borrowing program by the RBI could cushion the impact on G-sec yields and general interest rate scenario. Even in 2002, interest rates did not see major change.

Impact on currency: While FII flows could slow down or see some outflows, net capital flows could remain stable, particularly foreign direct investment (FDI) and non-resident deposits. Even in 2002 the Rupee appreciated from 48.59 to a USD in end July 2002 to 48.26 to a USD in end Nov 2002. The only possible spoiler could be rising crude oil price.

Impact on stock markets: If the monsoon situation does not improve in the next few weeks, it could result in downgrading of GDP growth estimates, downgrading corporate earnings estimates, a fall in the premium given to Indian markets and a consequent fall in
indices (the process has already begun). How do the FIIs react to this situation will be keenly watched as their exit could result in a sharper fall. On the other hand, longer term FIIs could see this as a buying opportunity and pump in monies.

Impact on Rural economy: Over the course of last year, sustained rural demand was the saving grace amidst falling consumption, plunging stock markets and export demand, and horribly depressed sentiment. Firms with existing rural consumer bases weathered the economic downturn – Maruti Suzuki, Hero Honda, HUL etc.

Mark Mobius, renouned fund manager, recently said that managing water is becoming a global issue. I think India should take lessons from Iran and strategise the use of water available to her through other mediums.
Sources: Facts from HDFC securities

You might inherit these diseases!!!

Imagine for a moment you know that you are going to inherit XYZ diseases. You are going to suffer from another ABC disease... How much pressure or work load you are capable of handling...

I came across a website called
23andMe “personal genetics” company — which, for a fee, will take a bit of your spit and map out your DNA to learn genealogical details as well as your risk factors for certain diseases. Hmmm...

Some revolutionary thoughts:

Insurance companies will tie up with companies like 23andMe and do the client profiling. They would be able to know how susceptible their clients will be, to specific diseases. They might take decision as to client should be covered or not. Genealogical details of clients might also help them in setting insurance premiums.

Marriages: In India, still exchanging bio data and photographs of would be bride and groom, is a tradition. How about additional document stating all the diseases that they might suffer. Interesting isnt it! Make sense also...if the guy's and girl's parents have suppose, diabetes, then I think they should avoid marrying, if atall its an arrange marriage. Why should ensure that their kids inherit same disease when they can avoid doing that!

Saturday, 1 August 2009

Business Challenges After the Recession

When the recession is over, business challenges will be different, not gone. Companies wrestling with the downturn need to consider what new problems they’ll face in the recovery.

You may have cut back on your staffing level to survive the recession. When sales recover, you’ll start hiring—but whom? Many of the folks you laid off will not be available. Some of the people you hire may not have worked in your industry before. You will have a training challenge greater than you had before the recession.

The employees who stayed with you through the recession will be different. They may have felt guilty when they survived layoffs. Then they worked hard without bonuses, pay raises or much chance of promotion (because the company was not expanding, and few higher-ups were quitting or retiring). After working hard through the recession, their attitudes will be different than had been a few years earlier.

Consumers are cutting back on their spending, but the day will come when they buy cars and furniture again. How will the recession change their attitudes? Will they buy the same products, the same styles, at the same price points as they did in 2005? Probably not. What mix of products will fill the consumer’s need to celebrate the return to normalcy, without falling into the same old bad habits?

When it’s time to ramp up production, will your vendors be ready? If you had to cut back your orders during the recession, your vendors will be hurting. They may have laid off key personnel, and they may not have the financing in place to buy raw materials to provide you with products. Their problems will become your problems if you rely on them for critical supplies.

Speaking of finance, what about your own situation? The financial crisis has changed the world of credit in ways that won’t quickly be reversed. Securitization will continue, but at a much slower pace, with far simpler deals. This is a problem even for companies that never floated complex deals on Wall Street. Virtually all forms of business credit have been securitized: bank loans, lease receivables, commercial mortgages, credit card debt. Many business borrowers didn’t even know that the money for their loans came through these channels. The closure of secondary markets, though, makes business credit harder to obtain.

Business recoveries are stressful to balance sheets. Chief financial officers who have felt stressed by declining sales volumes will feel a different kind of stress next year. Increasing orders will require spending on inventories and personnel, much of which has to take place before payments are received from customers. This need for working capital will increase before credit markets fully adjust to the financial crisis.

How does a business leader prepare for these new challenges? The first step is to keep the company going, which means dealing with today’s challenges. At the same time, take a few hours and sketch out the challenges you expect when the recovery comes. Bring in a few colleagues and brainstorm. Then look at the issues that need current action. Some problems can wait until they arise, but others can be nipped in the bud with a little forethought. The companies that thrive in the recovery will be those that not only survived the recession, but also planned for better times.


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