Friday, February 8, 2013

A raw deal for craftsmen?

Indian craft sector is in need of social entrepreneurs who have a vision and a strong will to revive crafts and help artisans build a sustainable model for times to come. By Swati Sharma

Dayasagar Joshi, a promising Chanderi weaver (Chanderi cotton, once comparable to Dacca Muslin, is a fine cotton weft that is hand made without compromising on the intricate gold borders and jewel like buttis) from a small village of Madhya Pradesh, had a big canvas of dreams. But it didn't last long. Acute poverty hit him hard and he was forced to leave his home to make both ends meet. Dayasagar left behind his wife and two kids and decided to go to Delhi in search of an opportunity.

Well, he got one (not many are that lucky!) as he was able to set up a small stall at Dilli Haat in South Delhi to sell and exhibit his work. Though it was with the help of a middleman, he was happy that he had at least started earning a decent amount that he would now be sending back home to his wife and kids. But, he soon realised that his craftwork were being underpriced and he was not getting the actual value of his efforts. Subsequently, he also understood that a fair amount of the selling price of his work was going to the middleman or distributor who was helping him in finding a market for his products. In fact, for every piece Dayasagar sells, he has to give 35% of the profit to the distributor.

"Even after the struggle, I love doing my work and get a lot of appreciation, but it would be nice if I get the real price of my work. I am happy that finally I succeeded in showcasing my work. But there are hundreds of craftsmen like me who are getting raw deals for their works,” Dayasagar tells B&E. Like him, several craftsmen have the same grouse that they do not get a decent price for their work; but then, they really don't have any other option. The reality is that scores of Indian craftsmen are leading vagabond lives in order to earn their daily bread and butter. In fact, today the situation is such that there are few takers for this profession. Having seen their parents struggle to sustain their family, the younger generation is now in search of other lucrative jobs.

No doubt, Pashmina from Kashmir, Ikkat from Orissa to the ever-lasting Batik and Tie and Dye of Rajasthan to Madhubani paintings, metal works and pottery, all showcase the rich craftwork and cultural heritage of India, but at the same time they also reveal the pain of millions of artisans who are behind these masterpieces. Although the handicraft products are today going global and the demand for these items is on the rise (exports of handicrafts, which was just Rs.3.87 billion in FY1986-87, has increased manifolds to reach a level of Rs.87.18 billion in FY2009-10 with major buyers being the US, Canada, Europe and the West Asian countries), artisans and craftsmen have increasingly become dependent on the middle-men, like petty merchant capitalists who pay much lower amount to the artisans. In addition, the government's initiative to create cooperatives has not been much successful. A report says there are over 4 million craftsmen in India, based mostly in the villages. But they hardly interact with buyers and don't have the necessary skills to safeguard their own interests.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Thursday, February 7, 2013

The curious case of gourmet food

While many international restaurant brands are already in India, a host of others are lining up to commence operations. But almost every CEO B&E met for this story lamented the over-policing by the government... We take a quantitative stock analysis! by Vareen Gadhoke Ray & Swati Sharma

Variety, they say, is the spice of life – a fact that Lee Iacocca (former CEO, Chrysler) vouched for in his autobiography. He mentions that when his parents immigrated from Italy to the US, his father Nicola started a hot dog restaurant, Yocco's Hot Dogs, (apart from two other businesses). And then the infamous 1929 Wall Street Crash happened, wiping out the savings of millions of Americans in one shot. Iacocca writes that while most other businesses in America collapsed, the restaurant business kept thriving – because people wanted to forget their worries. So customers kept streaming into Yocco's Hot Dogs, and business never seemed to go down. His family saw those times through relatively easily because of that. Iacocca was five years old then, but the lessons remained with him throughout his life. Almost everybody knows Iacocca worked in Ford, and then headed Chrysler till his retirement in 1992. Not many know that in 1998, Iacocca became the Chairman of the LA based restaurant chain, Koo Koo Roo Inc.

The anecdotes are placed simply to prove a point – the restaurant industry is interestingly one of the Indian economy’s best kept secrets. Fast food chains, QSRs, fine/casual dining, cafes, bars & lounges, food courts, take away kiosks, et al, from across the world have set up shop here. With a slew of customised product, offerings and pricing strategies coupled with an armoury of aggressive expansion plans, the restaurant sector (which is growing at 5-6% per annum) is now worth a huge Rs.430 billion! But strangely, there's generally never any kind of a brouhaha over this sector within India – no particularly data-heavy media reports, no statistics, no intrinsic analysis... So B&E decided to go one-up and bring a collation of the latest status of this industry, and the challenges that stand within.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

 

Wednesday, February 6, 2013

BHARTI: ZAIN DEAL

After having failed to acquire Africa’s MTN, Sunil Mittal has now set his eyes on Zain to enter Africa. But his best bets could be much closer home than he thinks.

However, things are expected to be a little different this time as it would not be as complex a deal as the one that was being worked out with MTN. There is no doubt that Africa is considered to be a lucrative market from a wireless operator’s point of view but according to some analysts, Bharti might be coughing out a whopping $10.7 billion (making it the second largest cross border deal after Tata Corus, which was $13 billion deal) and the deal would swell Bharti’s subscriber base to about 170 million from the current tally of 125 million. Further, the company would become one of the top ten service providers globally. Another positive side of this particular deal is that out of the 15 markets that Zain operates in, it is a market leader in 10 countries and the second largest in the other four. “This particular acquisition for Bharti comes at the cost of $200 per subscriber as opposed to $450 that Vodafone paid when it launched its operations in the country or the average of $500-$600 that has been paid for other operations that have happened in the past couple of years. It seems to be a strategic acquisition for the company in the long terms,” shares the India head of one of the leading AMCs in the country.

On the flip side, Bharti Airtel is planning to fund the deal with the help of mid to long term loan financing amounting to $9 billion, (rather than issuing fresh shares), which, according to many analysts, would have a negative impact in the short term on the balance sheet of Bharti Airtel. There were also talks doing the rounds that Bharti Airtel might be thinking of a rights issue but that does not seem to be on cards for now. A lot of renowned agencies such as Standard & Poors and Fitch have both placed Bharti on negative credit watch after talks of the deal were made public. Even the stock markets have reacted to the same and the scrip has depreciated by 12% (from February 15-26). The top honchos of the company are predicting that after the deal goes through, the entity would be able to boost total annual revenues to the tune of $13 billion and EBITDA of $5 billion in about a year of operations and from there on, build on both revenue market share and EBITDA margins going forward.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

 

Tuesday, February 5, 2013

AMERICAN IDOL: DANGER AHEAD

The Times called him “heartless, thoughtless and superficial,” yet Simon Cowell’s angry villainous chair was the glue that kept American Idol alive for many years. With Simon making clear his plans to leave, is Fox tactically forcing him to return back? by Pallavi Srivastava

Cowell’s sweeping conquest of the American teletube is surely surprising, keeping in mind the show’s low profile debut way back in 2002. In fact, the first season of this singing reality show failed to make a place for itself even in the list of the decade’s top 125 shows. While American Idol Season 1 cornered an average of 13.5 million viewers for the ‘results’ episodes, the figure stood at 12.5 million for the ‘performance’ shows. But that’s history now. Here is a glimpse of the present: The opening night (Tuesday episode) of American Idol Season 9, a few weeks back, cornered 29.9 million viewers. However, the Wednesday episode registered a fall in viewership with 26.4 million viewers. This is said to be the lowest-rated opening Wednesday of the season for Idol since its second season in 2003! Worse, the viewership average of the first two opening nights of American Idol Season 9 fell short of the figures for Season 8 (aired in 2009) by a noteworthy 5%!

Despite the recent fall in ratings, American Idol has been able to thwart-off competition from the combined ABC-CBS-NBC-CW by about 50% in the adult segment (for ages 18-49; Nielsen Ratings). This was clearly reflected in the overall network viewership too, which stood as follows for the week January 18-24, 2010: Fox – 21.8 million, CBS – 11.4 million, NBC – 6.3 million, ABC – 5.9 million, Univision – 3.8 million, and CW – 0.7 million. Undoubtedly, Fox remains the undisputed ruler for now, with distant followers! Automatically, as mentioned, the high rating churner for Fox is also their biggest cash earner! As per data provided by TNS Media Intelligence, American Idol Season 8 generated $843 million in advertising revenues for Fox. It even became the most expensive regular series in the prime-time slot on TV, with a 30-sec spot costing an average of $707,000! And if that wasn’t enough, American Idol has played the launch pad for Fox’s other popular series like Fringe, House, Lie to Me and Glee.

Evidently, Simon’s trumpet exit call has done a great wake-up job with the top management brass at Fox, who have tactically bought the exclusive American telecast rights to Cowell’s X Factor.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Sunday, February 3, 2013

Giving the celebs a break...

Why bloopers count even in the world of media & entertainment

Usually, it’s the celebs who walk aaway with honours when it comes to goof-ups and slip-ups in the world of media and entertainment; but once in a blue-moon, the blue-eyed boys do steal the show with billion-dollar bloopers! A few such rare moments follow...

Virgin Records, a British record label founded in 1972, was sold by Branson to Thorn EMI in June 1992 for a reported $1 billion, with a special non-competition clause that prevented Branson from founding another recording company over the following five years post-deal. Branson had a choice: to either sell-off his airline baby, Virgin Atlantic or his records business. In the process, he sold-off a profitable business (Virgin Records), to save a business which was in trouble, and was incurring losses. Even Time magazine documents that the sale of Virgin Records to Thorn EMI was the biggest mistake that Branson ever made. Today, Virgin Records is part of EMI, and is the 3rd largest music company in the world, and Virgin Atlantic is reportedly making losses.

Then there is the media mughol Rupert Murdoch, who bought the baseball franchise Dodgers from the O’Malley family in 1997, for a whopping $311 million – a high price at that time. Murdoch bought Dodgers hoping that it would complement FOX Sports’ content. But post-deal, Murdoch renewed the contracts of all the players, because of which, their remunerations shot-up by as high as 50%! However, the revenue prospects worsened... Finally Murdoch sold Dodgers for $439 million in 2004, incurring losses amounting to millions of dollars in the process... Another blunder was made by NBC, when it cancelled the Baywatch TV show after just one season (in 1989) for lack of viewership and high costs. Then, David Hasselhoff invested his own money in it and relaunched it in 1991. The show became the most-watched TV show of all times, with 1.1 billion viewers! To sign off, here’s another one from Decca Records when it rejected an unrecognised music band in 1962, stating: “We don’t like their sound, and guitar music is on the way out...” The band was later signed-up by EMI and became an instant hit. You know it as ‘The Beatles’ today! Similarly, Universal Studios approached Mars to use M&M’s in their new film to be directed by Steven Speilberg.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.