Opportunity in Adversity

Opportunity lies in Adversity:
History has been testimonial to the fact that adverse times have been stepping stone to companies who have seized the moment and made it big. Economic turmoil creates more opportunities for companies to move into position of a leader from a laggard position. A study done by Bain & Company that analyzed the net profit margins and sales growth of more than 2,500 companies clearly indicated that 24% more firms moved from laggards to leaders in the 2001 downturn compared with the subsequent period of economic calm. Also around 20% of those in the top quartile of financial performance (based on Net Profit) in their sectors dropped to the bottom quartile during the period.
Corporate India has navigated through rough weather exceedingly well, and almost through an era where doing business was a crime, and when India had a more socialist outlook. In the year 1998-99 Cement Industry was going through some tough times, and Gujarat Ambuja cement was not immune from the crisis, instead of retreating into a shell, India’s then fifth-largest cement maker by sales acquired an ailing Modi Cement Ltd, taking advantage of the target’s low valuation. It then turned Modi Cement around. Today, Ambuja Cements is India’s second largest cement manufacturer by profits, and one of the country’s most efficient cement producers. Thus indicating the fact if calculated financial risks are taken one can get into leadership position.
Let consider the case of Intel, it was an organization built in a recession ( to the stature we see it at); Advanced Micro Devices Inc, its rival in the chip business, prior to the 2001 recession had made heavy investment in product design and this strategy was paying off, with AMD’s top-line growing three times faster than that of Intel’s. Then the recession hit, catching the entire industry with too much capacity. As AMD’s lack of profitability prevented it from investing in capex, Intel seized the advantage.
It invested in new facilities with state-of-the-art production capability and spent heavily to advertise its P4 processors. In coming years the cost proposition of Intel was much better than AMD, and AMD had to axe 15% of its workforce. The momentum AMD had built quickly vanished and Intel emerged as undisputed king of the Chipset business.
How can Indian companies take advantage of turbulence and a slowing economy, as Intel did? First, they need to realize that conventional approaches often don’t work. Many industry leaders fall from the top during downturns or turbulent times because they assume that a strong market position is an insurance policy against trouble. That approach breeds overconfidence.
The better approach: slow in, fast out — like a good driver heading into a sharp curve. Winners in turbulence tend to brake quickly heading into a downturn by managing costs carefully and consistently. They focus on what the company does best, reinforcing the core business and spending to gain share. That allows them to speed up at the top of the curve, when the economy starts to turn for the better.

PS:
This post is inspired from the research done by Bain & Company. I would personally like to thank Mr Vivek Gambhir and Darrell Rigby, a Bain partner in Boston and the head of Bain’s Global Retail Practice

Who is More Powerful? Finance or Marketing Guys?

Before i write anything, i would like to make it clear that i am doing my majors In Banking & Finance. Now that should not make me bias towards a particular side.I strongly believe we as human beings do selling continuously in some way or the other sell, weather its HR manager selling a company to employee, or CEO selling it to investor, a top notch Investment banker pricing the issue and selling it to the Public.Selling may sound sad or to some of you harsh but then its an integral part of marketing. Now some of you may say, hey i want to get into Equity Research,i want to do Financial Modeling, why should i sell,if not that question then what should i sell; interesting my friend Abhishek Arora once said, Equity Research is of two types Buy side and sell side, one that you sell to management for proprietary trades executed by brokerage house and other either sold to your clients (generally Institutional)for the fees, and the other one which is made open to public through analyst upgrades/downgrades, bottom line is if you are an excellent analyst but you dont know how to put it in words and present it to clients,and pitch the report properly there will be no takers and all that excellence ,brilliance and exuberance with which you make the report goes in vain. See if you have good analytical skills you can have a nice job travel first class have a stiff life,but can u reach to the Top, my readers would have seen the 1985 flick WALLSTREET , Gordon Geckko was not an analyst but a great street smart marketer.we all know the Success story which Apple Inc. has crafted the person responsible for making Apple Steve Wozniac (hey who's this Guy a typing error ) no sir no typing error the Brain Behind apple was of Wozniac,still we say it was a brain child of Steve Jobs.Who took Wipro from $250 million Co. to a $1 billion Enterprise, it was Vivek Paul the most charismatic CEO. You might feel why this guy is writing this article many of you reading this feel that Marketing is for wimps no its not the case the most infuential and sucessful people born who have made History were /are good marketers .Another reason i am of this view point is that God is a smart kid sitting out there, we can improve our soft /negotiation skills to a large extent but not our analytical. And i belive the key to sucess in life is identify your weakness and play to your strengths !

Leader......

Our biggest Strength lies in understanding and more importantly accepting our biggest weakness. We as individuals never do that, do we ever? . We all have limitations, limitations are nothing but caps on our abilities. Hey isn’t that negative putting Caps or limitations on yourself, yes true  its bad to put any blockages or hurdles, but trust me your ability can just take you to ¼’th to your destination, the rest is attitude , grit and determination, any of the word that is convenient to you. So what am I trying to say? , I believe you have that grit and street-fighter attitude, its great but at the same time know your limitations. The best success story that comes to my mind is that of Steve Waugh.

Steve & Mark Waugh were one of the very few twins who played together in a team sport. Cricket and especially batting came easily to Mark, he was a naturally gifted fielder, and one of the most attractive & stylish batsman of all times. Watching him you felt cricket is an easy game, on the contrary Steve struggled and fought his way through, he was technically not that superior, and was by no means a natural or gifted cricketer, still his track record is better than brother Mark, he had evident weakness like an ordinary player of short-pitch bowling, strong bottom hand player forced him to be more often than not on back-foot. Still he bailed out Aussies out of loosing situations the maximum number of times, due to sheer grit and will to win.

Steve had this unique ability to get the best out of his team mates, and he built the Australian team, which Ponting  just inherited. History has been testimonial to the fact that most of individuals with common abilities make extraordinary leaders. Daimen  Flemming once said, ” if Steve thinks I can walk on pile of broken Glass, then I can!”, this was the sort of faith players had on Steve. During 1999 World Cup Australia was on verge of elimination from tournament, and then Steve made the famous comments  to his mates“If not You, then Who? If not now, Then When?”… and as they say rest is history.

  And I have my assumptions for this, if you are supremely talented you are too focused on perfecting yourself, and in the process neglect the team. For instance, Tendulkar, Lara both living geniuses’ still didn’t proves their metal as a Captain. Moreover I you are a perfectionist you expect the entire team to do the same or be at the same level, whereas your team might have different styles or competencies which you might overlook.

Same is role of a Manager, his role in today’s environment has become much of a leader than, just another brain doing analysis. There are specialists for the same, there is always an upper limit on what you can achieve, but the realms of achievement for your team are infinite.

 

Its Different ! ! !

We always try to be different, at least try to be apart from crowd.
But why some of us do that, it was true in my case as I dint want to work with any IT major , as I will be sitting in the same old cubicle, I will be lost in the crowd.
Aaaahaana!!, so is it the fear of not being notice makes us this way, where we push ourselves to be different. This is for sure we all love to leave a mark, an impression in whatever we do.
And it takes courage not to follow the sheep herd mentality, yes we all think differently but very few have actually the courage to be different.
And those who try to be different have been successful, at least most of them , to name a few Warren Buffet, Georg Soros, and all most all the entrepreneurs have the ability to think differently and go against the God’s and the odds to convert the perceptions of vision into realm’s of reality.
Now thinking differently stems from two types of personalities, one of them are who have fear of being noticed, the inherent motivator for them is fear. And the other who try to stay away from limelight!
Lets not go too far the famous networking site, and one of my friend Kailash Bajaj ( poster boy of Dara Shaw & Co. and one of the most famous, admired, respected and celebrated (amongst students) student at IBS HYDERABAD ) has the words “less u knw me better is 4 u” on his orkut profile and is flocked by mob in IBS and everywhere he goes.( again he does not do this to garner attention.... he runs awy from lime light and still adulation follows him!)
The reason may the charisma that is created by being different, where people have their profiles overflowing with information and you write few words , it does creates that enigma which is inexplicable.
So being different does it work? Yes if you have the courage to create an identity for you apart from the crowd it can be a real plus.
This article is being inspired by an unknown female on orkut by the name of Bharvi Pandya.