Air Deccan's Radical Initial Success

The carrier not only removed price barriers, but also was able to bring about a tectonic shift in the minds of the Indian consumer. The strategy that is driving its innovative paradigm is simple – the airline offers tickets at low fares and balances it by cutting down the frills and all other additional costs; and follows a business model that schedules small aircrafts for towns and larger aircrafts for metros. As Captain Gopinath (below) envisages, “We should be the largest people’s carrier in India, as it sounds good.” After Air Deccan’s radical initial success, mainstream airlines like Jet, Sahara and Air India have had to lower their fares. The Deccan plateau notwithstanding, the Captain is slated to rule the skies, and most innovatively!

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Source IIPM-Editorial,2006

America's Most Admired Company

GE certainly looks to have moved out of the Jack Welch era, which speaks volumes about the inherent strengths of the company. In fact, even Immelt is only implementing a well laid out plan, which depends least on any particular leader’s initiative. Almost like an objective oriented democracy, GE can run as effi ciently even if Immelt were to be replaced by, say, nobody. GE remains, for the sixth year in succession, in 2006, America’s most admired company (Fortune). Without doubt, in organic growth and in conglomerate diversifi cation, GE has certainly shown the global corporate world a new way – the GE way!

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Source IIPM-Editorial,2006

Northwest fuels huge losses

Northwest Airline, America’s fourth largest air carrier has accumulated a loss of $1.1 billion in the first quarter. The losses are mainly attributed to increasing fuel costs and costs associated with its bankruptcy reorganisation. The fuel expenses increased to 18% to reach at $744 million, despite the fact that Northwest Airline had reduced its consumption by 13%. On the flip side the labour costs were reduced by 30% to $676 million, thus reducing the total operating expense by 6.2%. Though the company is successfully carrying on the restructuring process, it would take some time to position the company for long term success.

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Source IIPM-Editorial,2006

CORPORATE POLICY

Monday, March 27, 2006 at 1:55 AM PST Or is it a corporate policy for such Asian giants to continue earning low margins – and even losses in some quarters – just for the sake of continued market presence? For records, LG does expect to register sales of Rs.15 billion from products across all categories for the two-month festive season, compared to last year’s Rs.10 billion. Not to stay be­hind its Korean rival, even Samsung has announced the launch of the ‘Pehla Ka­maal, Doosra Dhamaal’ promotion pro­gramme for the festival period.

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Source IIPM-Editorial,2006

The Italian Heritage of Design (IIPM-Publications)

For, the Italian heritage of design that manifests in all things from cars to clothes, probably owes its aesthetic ancestry to when reigned supreme the classicism of culture and creativity. Be it the powerful contours of a Ferrari or the contour-hugging Versace designs; present day Italy’s universal hallmarks may not be very reminiscent of its golden age but as Milton ‘I _ NY’ Glaser (a Fulbright scholar himself from the Academy of Fine Arts, Bologna) suggests, there has been a progression from that of artists practicing design to designers who practice art! Just that the ateliers have shift ed from around Florence and Lombardy to Turin and Milan! In fact, Lorenzo Ramaciotti, general manager of Pininfarina – coveted specialty vehicle makers – drove home the point when he reportedly stated of his fellow-folks, “We’re very individualistic people with taste rooted in the Renaissance. The stereotype of Italy as a land of creative people is true.” And eternal too...

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Source IIPM-Editorial,2006

Social Welfare Spending is Lower in the US than in the Nordic Countries (IIPM-News Article)

Similarly, although social welfare spending is lower in the US than in the Nordic countries, its budget deficit as a share of national income is much larger. The US spends less in the public sector, but it taxes even less than it spends. Nor has high taxation in the Nordic countries impeded economic performance. Rather than relying mainly on income taxation, as in the US, the Nordic countries rely on value-added taxation, which provides a relatively high amount of revenue with relatively low rates of evasion and few distortions to the economy. The Nordic experience also belies conservatives claim that a large social welfare state weakens incentives to work and save. National saving in the Nordic countries averages more than 20% of national income, compared to around 10% in the US. Moreover, economic growth in the Nordic countries has been similar to that in the US in recent years. Income levels are higher on an average in the US, but mainly because the Nordic countries work fewer hours per week. In any case, all of the Nordic countries have very high incomes, and Norway’s per capita income actually exceeds the US.

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Source IIPM-Editorial,2006

Indian Real Estate Sector

IIPM-Best B-School

Already the big fish in the Indian real estate sector like DLF and Parsavnath have finalised plans to float IPOs later this year, in an effort to bring in more transparency and professionalism into their portfolio to mobilise partnerships and joint ventures with the slew of foreign players coming in to enjoy the realty party. In fact, once DLF hits the capital bourses (slated for June this year) and raises the expected Rs.105 billion, the Group’s promoter K. P. Singh, may well qualify to enter the Forbes list of billionaires.

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Source IIPM-Editorial,2006

Residential Space

Good infrastructure, thriving financial & entertainment sectors, professional work culture, provide sound basics for a booming residential real estate mart. And, as the city itself gets congested, it is accommodating new additions at its seams viz. the fast-developing suburbs. More and more professionals are seeking out spacious (and cheaper) housing options in Malad, Borivalli, Thane and New Bombay. Away from the crowded interiors and yet well connected to the city, the suburbs are the areas where departmental stores and multiplexes are literally climbing out of the woods. Bandra, Santa-Cruz, Malabar Hills, Worli, to name a few are the localities where rates of approx. 70% are being ploughed back.

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Source IIPM-Editorial,2006

MCD Demolishing Drive...

The last quarter saw nearly 700,000 sq ft of office space being transacted in the region, of which two-third was in Gurgaon. Sources say that about 23.2 million sq ft of total retail space is expected to enter the market by end-2007. Moreover, the recent MCD demolishing drive has sparked off a booming demand for alternative commercial space, not just for the already demolished shops, but also for fearful others.

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Source IIPM-Editorial,2006