Hero Honda Analysis

Factors which affected the industry in general :
1. Rising steel prices – pushing up the costs of production.
2. 8 percent import duty coupled with octroi, sales tax, registration, transportation, insurance etc. Pushing expenditure up
3. Credit Crunch – specially for the executive segment. Interest rates have gone up.
Factors which have affected Hero Honda in particular in addition to general factors :
1. Impact of interest rates on two wheeler buyers at the entry level. Interest rates started firming up in early 2007, and have shown no signs of letting up ever since; the slump in the entry segment has coincided with this rise. Indication that entry segment is very Interest Elastic.
2. Quantum of down payment percentages has shot up exponentially, destabilising the market.
3. Rising Commodity prices during 2008 which has been compensated for and is already in the verge of decline in the 1st quarter of 2009.
The motorcycle segment is further sub divided into 3 classes, starting from the entry/economy class (Rs 30,000 – Rs 40,000), executive class (Rs 40,000 – Rs 50,000) and the premium class (>Rs 50,000).

Performance of Hero Honda :
1. Entry Segment – Sales of Hero Honda went down by 6% (same as the whole industry). But overall its market share in the industry went up from 28.7 to 36.6 %. This shows that the decline in the quantity supplied to the market by other market firms has declined at a faster rate than Hero Honda.
2. Executive Segment – Sales went down by 1.18%. But similar to Entry segment, the share of market went up to 71.5 % from 68%.
3. Premium Segment – Outperformed all other players where its sale went up by a whopping 69% whereas in the previous year it had grown by 25%. Its share in this segment has increased by 8% and now account for the major source of revenues.
Interpretations from the given data :
1. Due to recession, expendable income of consumer has gone down. Having said that and considering the credit crunch existing in the market (Banks not ready to lend loans) it can be concluded that the spending behaviour of consumer is different across different income segments.
2. For the executive and entry segments, the demand is going down. Reason being mainly – High percentage of down payments and banks not willing to lend/lending at higher rates of interest. This particular segment is Interest elastic.
3. For Premium segments the demand has not been affected since these are consumers whose expendable income has not been much affected by the recession. Evidence being the strong position of Hero Honda still in this segment. These consumers are least likely to postpone purchase decisions on account of increasing EMI. This segment is relatively Interest Inelastic.
4. According to the National Council of Applied Economic Research (NCAER) in 2001-02, there were 61 million Indians belonging to families that earned more than Rs. 2 lacs a year; by 2005-06, that number had crossed 100 million. In 2009-10, this number is projected to increase to 173 million. It is safe to assume that the bulk of the buyers from these segments will opt for either entry or deluxe segment motorcycle offerings. On the other hand, it has now been established beyond doubt that a large chunk of entry segment buyers will continue to react when there is a spike in interest rates. In other words, two wheeler makers have few options but to ride out the difficult times.

What is the Network Economy

Mr. Jones is a successful entrepreneur. He believes in the power of scarcity. He believes that whatever he produces, if it is unique and has a high utility, it would earn him a handsome revenue as the demand would hardly ever go down. He marvels at the wonders of the industrial revolution and feels his break-even point, although distant, would come soon because he has priced his products at a comfortably high price. Since he is the only producer in the market, he believes he can enjoy this singular privilege of high pricing. He has already started succession planning, keeping a keen eye on his nephew working under him as the regional manager in Wales. What gives him immense satisfaction is that his product is by far unhindered by the cut-throat competition faced by other products in other segments. Hence, he concludes; reap the rewards while the sunshine of open roads still smiles on him.
While the above scenario would ring true somewhere in the 19th century, it miserably fails in today’s context and age. Today’s Network economy has indeed turned these well sculpted notions on their heads. What is this Network Economy, the attentive reader might ask? The answer is quite simple and would be obvious to the reader, once he or she finishes reading the rest of this article. It all started in the year 1969 when the advent of knowledge workers marked the dawn of an era where information assimilation and dissemination would play a major role in the economy. With the evolution of computers and the internet, the flow of information became easier and with that the power of uniqueness was lost. Communication has become the norm in today’s world. The laws that govern today’s world economy, without us even realising it, are actually very simple and forthright.
To begin with, do not under-estimate the dumb power of the silicon chip. Computers by themselves are dumb objects. If you don’t connect them to the network, any information that you might have with you is useless. And once you do connect them to a network you transform the data with you into information that adds to the network’s database. Moving on, stop thinking like Mr. Jones. Scarcity is not the order of the day. To cite a pertinent example, a single fax machine is worth nothing. Neither are 5 or 6 fax machines. 200 or 300 fax machines spread across continents, each communicating with the other and forming a large number of combinations of connections is of some use. The more the network grows, the more does the utility of the product plugged into it. Hence, with a decrease in scarcity, utility increases; this directly contradicts the law of scarcity of the industrial revolution. Moreover, success is nonlinear in today’s world. A case in point is the success of the internet, a dormant entity till the 1990s. Hence do not predict the success of any invention or innovation in the network economy to be a linear curve. It might break even, even before the proverbial ‘tipping point’ has been reached. Besides, if I would have been a well wisher of Mr. Jones, I would have asked his great grandsons to make virtuous circles. Linked In, a major networking site, would have been my advice to his kith and kin. This will guarantee his business visibility in the corporate world and a unique podium to communicate ideas with likeminded souls, which ultimately will benefit the business.
My final advice to Mr. Jones, of this generation, would be to let go at the top. Churn and not change is what defines today’s economy. ‘Find, nurture and destroy’ is what he should do. He should not be afraid of exploring the unknown and leave the known. The ability to relinquish something at the peak of its success and setting out on a venture to discover something totally unique is what would define the way forward for his business.
In fact, as management students of the 21st century, I believe this holds true for us all. Our minds will at first be bound by old rules of economic growth and productivity. Listening to the network can release them. In the Network Economy, as Peter Drucker so coherently puts it, don't solve problems, seek opportunities.

What does it take to....

So i blog again...
this time albeit in an irregular manner. But i do return to this part of the cyberspace from time to time to give vent to pent up thoughts and feelings.
One of them is a very pertinent one for me and I guess would be for some 1.2 lakh people of this country, pursuing an MBA degree at various institutes across the nation.
What does it take to make an MBA ? Although the answer to this question would be more detailed when I pass out of IMT, but i guess now is the time to start answering it, bit by bit, part by part.

According to me, MBA is all about confidence. Its only when u have confidence on your self and your abilities that u can multitask, multioperate, coordinate, accomplish etc etc.
What is it that is wanted from an MBA grad ? Is it theoretical knowledge ? (NO) Is it comparitive advantage ?(No) Is it expertise in one particular field (Not exactly)?

What I believe is wanted is the confidence to be at the helm of affairs, even if the answer to all the above 3 questions is No. It is this confidence that rubs off on the team ur leading which eventually shows in the performance. I believe, management cannot be taught. Its a very basic activity, done right from the time man was a beastly being, electing a leader to lead the pack. The leader had to decide how much meat woud be consumed by the pack, when & where to hunt, where to set up camp and how to defend the pack from invaders or wild animals.
Confidence, as a virtue, existed since man came into being and hence it is the only trait that helps one to lead, defend, argue, win, admit defeat and so on...

What will be interesting to see is my progress, from a soft spoken, mild mannered, joke cracking guy to the supremely confident, cool calm manager...after 2 years.

Keep watching this space...would update it as time flies by..

First day @IMT

Feels surreal.....

Well almost surreal. I have already spent close to 12 hours in the sprawling campus at IMT and it feels great to be here. But at the same time it feels a bit surreal. It feels as if things have caught on a speed demon and things are going by at the speed of light. Things that I thought would be good are really good, bad really pathetic and somethings which I had never imagined have come true.

I guess adjusting to life at B-School would be nothing short to being a speed demon. I'll have to cover thigns at a pace I'm not comfortable with but then, they have to be done. They will be done.

As people are getting PDPed downstairs, I feel like joining in the fun. But then, thats not what I'm here for. I'm here to become a speed demon. And the best among all.

Will keep updating this space with more....so watch out.

Agnitio Philia

Hello people,

After a loooooooooong time....have decided to start some serious quizzing.

So, with that noble intention in mind, have started a quiz blog for all u blog hoggers & quizzophiles out there.

Go ahead :
http://quizhereforfun.blogspot.com/

Make my day ;)

The Aila Aftermath

Its really strange...
To see the human capacity to recuperate and move on with life. We even put the ants to shame in this respect. Whatever happens, however serious, we have the ability to pick ourselves up from where the disaster leaves us...and continue towards building our world back to the way it was.
But sometimes, not always, this sense of optimism gets the better of people in the Corporate World. Specifically in the Electronic Media. Particularly, it got the better of a Radio Channel RJ (who is quite the funny monkey in the studio).

The RJ started making fun of the cyclone Aila. Sure, it is a name which would evoke tepid sarcasm or humor from people at first mention. But then, in the context of the mayhem it wreaked in the city - 22 people confirmed dead in Kolkata - I believe humor should have been the remotest emotion to be evoked a day after the cyclone.
Its all Marketing actually. The opportunistic (read sadistic) bastards who make these targets to achieve by the end of the week/month/year have to do anything and everything to make the listener listen up. So it wont do if you air condolences on the radio the morning after. It sure as hell wont help if you dont make those rich, obese, fat marwari bastards who infect the city like the plague listen in to your programme (they got half the city's commercial lifeline under their withered belt under a greasy potbelly). And since people nowadays require 'fatafat' entertainment....one often wonders at what cost !!

On how the system gets you...

As I sit down to write this....the only thought in my mind is of hope. Hope that someday people of this country will wake up to the fact that it takes hardwork to build something. That we are all human, there is no caste, no sect. That all religions in the world were founded to keep the hope of a better tomorrow alive. The hope that if you are sincere to your god today, if you are sincere to the rules today, you will prosper tomorrow. That the rituals, the paraphernalia, the insipid and mindless rules devised by man is not the truth, the final word. 

But today, my mind is preoccupied with something rather different from the essence of the text above. Its regarding the education system of India and what ails it. Call it the analysis of a pessimist, but the fact is it is true.

I'll get down to the brass tacks immediately. What ails the system is population and lazyness. Yes. It must be sounding like an oversimplification of things but its actually true (or so I believe). I'll show you how in the next few lines :

Think about the 1st important exam of the country. the IIT-JEE. One of the toughest exams in the world, this tests the core concepts of any class 12 student to the hilt. But then ? Fact of the matter is, it pays not attention to practical aspects of Science. Which basically means the student might be knowing all about the difficult reactions of Organic Chem or the Electromagnetism of Physics, but does not relate to it practically. Result ? Maximum of IIT graduates go in for Software firms (except the CSE guys) and some have started going in for the Investment Banks right after their B.Tech

Any IITian reading this would argue..no thats nt true. If the pay wud have been better in Core firms we wud have gone there. But is this really true ? Was the sole intention of doing Engineering, money ? Was the sole intention of sloggin away countless nights to be 'job-ready' ? This is the problem I have with the this system. People join the hordes of IITJEE aspirants to study in their hallowed portals not even knowing what they are actually good at. They spend thousands of rupees in coaching classes not even knowing whther this is what they want in life. They resort to neglecting their health, go into depression and finally end up either in the morgue, or in the scores of 'services' companies, trying to make a living. What happens then ? Further confusion for the CAT,XAT, JMET, IAS, GRE, GMAT etc etc etc...

The cause of this - Population and laziness. Why you ask ? Here's why.

Becuz of the population, there is a demand and supply gap. Which translates to poverty becuz only the select few get the resources, the others are left to mere morsels a day. And then what ? the few ppl who get it dont want to travel the path less travelled. They want to take the oft beaten path and go where eveybody has gone before. They dont pay attention to what they are good at. They dont want to listen to their inner voice. 

A Basic principle of Modern Economics states - "If every person does something that he is good at and in his self interest, then the economy prospers" (Adam Smith, Wealth of Nations)

----------------------------

Now comes the next hurdle. The prestigious PG degree. What will it be ? MBA, MS, Mtech ??? Which degree will get me a better dowry ? If i become an IAS, will my rate go up or down ? Or if i get my MBA now, will I get that coveted 20+ salary ? 

Doesnt get any dumber than this. You have half baked, aimless bunch of undergrads giving CAT each year for basically the same purpose - SALARY, PACKAGE, NAME & FAME !!

Why ? Who do these things matter ? Isnt Management a much more superior motive in their schem of things ? Is doin an MBA all about the salary ? Doesnt the knowledge and ability matter ?

Sadly....in India, the MBA has been given a colour of a passport to dreamland. It has been made to look coveted and 'khoool' more than pragmatic and analytical approach based profession. You really have poeple from all corners of the country vying for degrees of such calibre for solely this reason. And why is that ? 

Population and lazyness. How ? (Repeat the answer above...)

Becuz of the population, there is a demand and supply gap. Which translates to poverty becuz only the select few get the resources, the others are left to mere morsels a day. And then what ? the few ppl who get it dont want to travel the path less travelled. They want to take the oft beaten path and go where eveybody has gone before. They dont pay attention to what they are good at. They dont want to listen to their inner voice. 

Hence what you have is half baked managers coming out (mostly...not all) and goin into jobs they dont actually care to do...they are just in it for the money. There is an interesting saying by a Management professor from Harvard and it goes like this :

"Indian managers can manage something that is already up and running or something that is still afloat. But they fail miserably to revive something that has fallen or is near complete loss. "

So True....

The 300 Review

21st Century technology mingled with the awe inspiring tale of Spartan resistance to Persian invasion,300 is a must see for the serious movie buff or the casual viewer. Zack Snyder, of The Dawn of the Dead (2004) fame, has left no stone unturned in making the movie a landmark in terms of screenplay, cinematography and visual portrayal of an era which was ruled by the blood and gore of the struggle to usurp pristine lands and kingdoms.  The movie begins with the depiction of Spartan culture of abandoning babies with physical flaws on rugged mountains for the wolves to devour, educating the perfect ones in all schools of martial arts, fencing, stick-fighting and finally sending them off to the wild to slay the beasts and return unscathed. Leonidas (Gerard Butler) delivers an amazing performance portraying the King of Spartans, a man who symbolises the Spartan culture in every possible way. Lena Heady and Rodrigo Santoro deserve special mention for portraying the roles of Queen Gorgo and the Persian God Xerxes, respectively. The headstrong and determined nature of the queen who would do anything to save her king and Sparta, even be vandalised by the scheming Theron (Dominic West), is rendered exquisitely by Lena. As for Rodrigo, his portrayal of the demonic God Xerxes deserves special mention as he not only had to change his accent but also had to wear heavy jewellery all over his body, which is certainly not a comfortable job.  The eventual betrayal by a spy and subsequent annihilation of the 300 Spartans at the hands of Xerxes is not the end of the movie. The end, showing a renewed army of the Spartans rushing forth to destroy any Persian in sight, could have been better. But since this is a direct cinematic depiction of Frank Miller's graphic novel, shot in only 3 small sets with a blue green screen in Montreal and digitally enhanced by special effects, what could have been should be ignored for what is and should be thoroughly enjoyed by the Indian audience. [Written way back in 2007 for IBIBO blog...]

What happened in Mumbai

What did happen in Mumbai ?

Was it because of the total lack of security of our coastlines ? Or was it due to negligence on the part of internal security ? Or was it that the bloody politicians struck a deal with Pakis...."You can strike in Mumbai for now..but then no honky ponky in Kashmir for the next one year !! We've got elections coming up remember ?"

The last line of the above paragraph does sound very surreal. But guess what, I believe that it is a distinct possibility. Why ? Have a look at the number of terrorist attacks that have happened in India.

Since the 1993 Bombay blasts (come and put a bomb in our city...we are very much populated. Oh and do you want an actor to help you ? Hey Sanju baba !! Come here....)  we have had to bear :

2001 - 2 attacks - 42 people (officially) dead

2002 - 4 attacks - 250 people (officially) dead

2003 - 3 attacks - 100 people (officially) dead

2004 - 1 attack - 20 people (officially) dead

2005 - 3 attacks - 80 people (officially) dead

2006 - 3 attacks - 300 people (officially) dead (Mumbai meri jaaan ...)

2007 - 5 attacks - 500+ people...

2008 - (this really gets my blood boiling) 10 attacks - (wtf !!)  I cant put a number on it....

So now, just imagine. If your house was under attack from intruders 2-3 years in a row, by now u wud have a highly trained army of men ready to defend your house. If you wud have been serious of defending and preventing such attacks from happening, you wud have educated the forces and trained them to be better than the attackers. You would have made sure that the number of attacks should go down.....be zero the next yr and the yr after that and the yr after that........

Did this happen ? NO. Did the number of attacks lessen ? No Did the intensity of attacks lessen ? NOOOOOOOO

And why is that ? Because there is someone inside helping the attackers. Helping them know our strength. Helping them know our weaknesses. Helping them grow more than us.

And then these lilly livered, cowardly, pot-bellied, uneducated, uncouth, sons of bitches (read POLITICIANS) come along and 'CONDEMN' the attack. And then after 'CONDEMNING' the attack they go back to their plush cars and offices... pretty satisfied with their parasitic and whore-like existence. 

What happened in Mumbai was a reminder. To throw these people either out of this country or out of the misery of their baseless lives.

Are we ready to do that ?

All I wanted to speak about CAT/MBA dreams

Hello ppl..
Not sure how much of this post will help people but I wanted to put forward my view so be it
My Journey towards an MBA degree began with CAT 2006 and ended with CAT 2008. No i wasnt successful in securing an IIM seat and yes I did get into a tier 2 B School (as they call it). Yes I am not goin to NMIMS Mumbai which conducts an exam which can be called a light hearted imitation of a math textbook and wren n martin put together ...(it really is puys so dont laugh) . And yes I do feel that after having got 97.56 % in CAT 2008 and converted IMT G I should feel happy.....

But there my friend...the story ends. And here's where my 'All i wanted to say about CAT' begins..
As a person who is now out of the race, I can tell u quite accurately tell u what happened and how i did it. Lets begin objectively.

What i Did :
- I studied too much. I mean I had office for about 10 hrs everyday and den i used to come home and hit the material for 4 - 5 hrs. ALso, during the busrides to and fro, I used to solve papers. This went on pretty much for 4 months.
- I started expecting too much. Some of this prep paid off in the mocks and I started getting 98 above regularly. Quant i used to ace along with DI. VA wud be variable. On an average 85% above wud be my VA %ile.
- I started getting tense. WIth Great Expectations came tension. Killer in this situation.
- I wanted to finish too much too fast. I had finished 90% of the TIME material (except the test papers at the last). And i kept on goin till september. Fallacy - Revision and coolin of nerves not done :(

Result - DI screwed in CAT. 73.4x %. No IIM, MDI, NITIE SPJAIN etc etc etc....
Well, this is where i guess i start the real part of this so called essay.

Puys - remember 1 thing very carefully. A school doesnt make u or break u. Yes it does give u an 'initial' edge over others by the brand image, but then that is all. Having been in the industry for measly 18 months but having interacted with ppl from IIM C grad working in Hong Kong, IIMA grad workin in Mumbai, NM grad workin in Mumbai, IMT senior frm my college (NIT Allahabad btw) I reached a conclusion - derived from all what they said. At the end of the day, all that matters is whether ur able to deliver the goods. If ur a Product manager, r u able to meet the demands of the customer frm the product and incorporate it in the product for better sales ? If a financial manager, r u able to crunch those numbers and come up with good assesments of investment opportunities for ur clients (just one of the thousand jobs)..
the answer to these questions is of paramount importance. the brand, image and all that, cease to exist.
Cuz, just think about it - the books r the same, the content the same, the principles taught the same, the problems t solve in the industry - same.....
Hence the only thing that matters is how well u grasp the situation and act accordingly - how well u manage. And believe me puys, at this age (average age of 23 of all MBA aspiants and 1st yrs) its pretty difficult to un learn and relearn anything. By this age, ur thinking process and analytical thnking and reasoning have matured. U r what u r mentall by 23 or 24. SO from now its WHO U R that matters.....the MOST.

yes it does matter where ur from...cuz lets face it. If half of indian industry is from IIT/IIM or both then they wud certainly go for their juniors - cuz they knw that if they were gud their juniors wud be good too...
But then, that is where it ends. After that, after the 'creamy layer' has been recruited and the 'tier 2' ones r recruited too, there begins that fight - for which ONE HAS TO BE PREPARED. this test is even more difficult than any exam (CAT is like child'splay if u think of it). Cuz in this test, u r tested on ur ability to slog ur ass off, ability to think and analyze, and ability to present and communicate - OVER A PERIOD OF TIME.

This is what we shud be prepared for. the exams ? naaaaah. they come n go....like the rain every year.
But eventual success - that eventual seat as the CEO, MD, Chairman. - that wud remain longer.....the memory wud last longer....the sweet taste of success wud last longer....

Here's wishing that all PUYS reading this and the ones not reading this turn out to be the next bright face of the Indian Industry.
All the best !!!
U better be good.....cuz am competing

(This post can be looked up in Pagalguy too)