Credit card lending boom

This is followed by $287 billion in loans & bonds rated below investment grade raised by European companies, since the beginning of 2007. With PE firms and hedge funds pumping truck loads of money into debt ridden & virtually moribund companies, investors are gambling on their life. Asia too has an unusual spending story to tell. Never before in the history of Asia, people have witness such huge credit card lending boom and never before Asians have used credit cards to purchase houses. Bank for International Settlement (BIS) in it’s June Bulletin, anticipates a credit card bubble for the Asian economies, which till now has been individually experienced by Hong Kong in 2002, Korea (15% indebtness in 2003) & Taiwan (9% indebtness in 2005). According to BIS, the total credit card usage volume, increased by 200-500% in many Asian markets between 1998 and 2005. By 2005, credit card receivables in these markets ranged between 3-15% of total household lending. At a time when profits are raining, it is difficult to ring alarm bells, but prudential measures should be put in place.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

The other‘ wise’ OECD economies...

Overview Output growth
After accelerating to almost 3.5% in 2006, GDP growth of Austria is expected to decelerate over the next two years, with a slowdown in net exports & investment. Although the Canadian economy accelerated at the start of the year, it is estimated to be still operating with some spare capacity. Activity is expected to grow at rates close to potential and the unemployment rate would go down further to levels not seen since 1975. Economic growth in Switzerland is expected to decelerate somewhat; to about 2% in 2007 and 2008. Expansion at this pace will allow employment to continue growing; roughly in line with rising labour supply and the wage growth should remain moderate. Inflation is projected to stay low throughout the projection period; pushing up somewhat in 2008. Turkey has greatly improved its economic fundamentals and weathered some strong political tensions in April.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

With Reliance Retail, Mukesh wants to cross the Rs.1 trillion mark

When compared to elder brother, the strategy adopted by Anil does invite an exceptionally generous dose of skepticism. You might well ask how a controlling stake in a small courier company called DTDC will help his long term strategy? Yet, discerning analysts have managed to see some method behind this seeming madness. According to them, Anil too is following a three-pronged strategy for long term growth by focussing on telecom, media & entertainment (in order to cash in on the promise of convergence in the future); financial services & power. The first two seem to be working quite well. Telecom, media and entertainment are all sunrise areas and there is little doubt that Anil Ambani will be one of the biggest players in the future. Reliance Infocom is already the second largest operator in the private sector behind Bharti Telecom. Even in financial services, he is aggressively expanding and promises a conglomerate by 2010 that will be much smaller compared to behemoths like ICICI; but a serious player, nevertheless.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

360degrees of separation

Mukesh clearly has the edge after two years. Can Anil play catch up?

The elder brother Mukesh is thundering ahead – fuelled by gas, refining & retail – while Anil still appears vulnerable in the power sector. Of course, the jury is still out on the race between the two

After Dhirubhai, who’s the real Bhai?

It is early 1991. The threat posed by the erstwhile V. P. Singh government in Delhi has been eliminated with the collapse of the regime. What better way to celebrate such good news than organise a grand wedding for the second son? Virtually every major South Bombay hotel worth its name is booked, as Dhirubhai Ambani invites the who’s who of India to the marriage between Anil Ambani and former actress Tina Munim. The VIPs are put up in fancy places like Oberoi and Taj while the lesser known invitees and many hacks make do with the President Hotel in Cuff e Parade. There is a huge baraat and a lavish wedding in the forenoon, followed by a reception that attracts almost 50,000 people. Watching a huge throng of people queuing up to greet the groom, bride, father & elder brother on the dais, a classically cynical hack asks, “Did anybody see Mukesh dance?”

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

‘Wii’ has overcome!

Nintendo beats the competition
No other player has taken the gaming world by a storm quite like Nintendo Wii. According to analyst Lance Ulan off , “Nintendo Wii is perhaps the best consumer electronic product ever.” And why not, the Wii proudly boasts of outselling PS3 by nearly fi ve times with sales ofnearly 251,794 units in the key Japanese market, making PS3’s 45,321 units seem like peanuts (for the month of May, 2007). Far from a stroke of luck, Nintendo has been enjoying the leadership position in sales for the fourth consecutive month!

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

They’re the ‘Mighty Zero Vision Corporations’...

..and they are the ones who’ve comprehensively taken the world of global business by storm!!!
Yes, zero vision corporations; the other name for companies like GE, Toyota, Wal-Mart, Convergys… But hey, what was that?! How could these companies, rated amongst the world’s best, be called zero vision corporations? Well, for the answer, you would need to step back and understand a perspective of management that escapes even the deepest of analysis. And that relates to perhaps the most radical concept of leadership hitting behemoth corporations of the world; the concept of leading without visioning; the concept of nurturing zero vision at the top.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Tha's (hotel) useful occupancy!

Undoubtedly the Indian hospitality sector, which is enjoying the fruits of the season. This is also indicated by improvement in the average room rates (ARR) of hotels, which appreciated by 31% over last year. And then there’s the icing on the cake – the 2010 Commonwealth Games… giving you the answer to why India Inc. is betting big bucks on this sector. So it came as a no surprise when the Sahara Group announced its foray into the hospitality space on June 18, 2007 by unleashing a five-star luxury hotel-cum tourist hub. Coined as ‘Sahara Star’, the facility has 223 rooms, which will soon be augmented to 412.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative