Wednesday, October 31, 2012

WHY DO THEY DISLIKE INDIA?

The governments of Pakistan, China, Sri Lanka, Nepal, Bhutan and Bangladesh reveal to akram hoque of B&E...

Nehru’s dreams started unraveling in 1947 itself when the founder of modern Burma, Aang San was assassinated and Indians were forced to leave everything and flee. By the winter of 1948, Nehru had got a first taste of jihad in Kashmir, a jihad that now threatens to debilitate India even as it destroys Pakistan. Two more shocks awaited Nehru and his vision of a peaceful and comradely South Asia in 1959. The leader of Sri Lanka, Solomon Bandarnaike was assassinated and the genie of anti-Tamil policies uncorked; the resultant civil war has just about reached a lull. And of course, China annexed Tibet, claiming it was always a part of China, forcing the Dalai Lama to flee and get exile in India. By 1962, when the Chinese military humiliated India, Nehru’s dreams of a ‘friendly’ neighbourhood were utterly and completely demolished. Since then, India has simply not been able to forge really close and friendly ties with the people and governments of its neighbours.

Let’s face it. No matter how many times Sonia Gandhi and Manmohan Singh stand in front of the mirror and ask “who is the fairest of them all?”, the fact is that India is not very popular in the neighbourhood. Perhaps the only saving grace is that it is usually the governments of these neighbouring countries that are more hostile towards India than their citizens. For Nepal, Sri Lanka and Bangladesh, India is the Big Brother and Bully that has a nasty habit of throwing tantrums and throwing its weight around. For Pakistan - or at least a large part of the ruling establishment in Pakistan - India is the Eternal Enemy that defines the existential rationale for the nation state. For China, India is a ‘hegemonistic’ upstart that needs to be taught a lesson every now and then. Why, even Bhutan has problems with India.

This is particularly galling for Indians and Indian policy makers. India is a unique country amongst major powers - including Japan, China, Russia, Germany, France, Britain and the United States - that has never invaded a neighbour. India is the only country amongst major powers that has actually ‘lost’ homeland territory in the last 100 years. India is known for its unique culture of tolerance, co-existence, respect for all religions and openness to new ideas and identities. And yet, why is it that people and governments in Sri Lanka, Nepal and Bangladesh think that India is a Big Bully which threatens their very existence? Somewhere deep down, Indians are downright offended by the very notion that India can play the Big Bully against any country. And yet, the perceptions persist...


Source : IIPM Editorial, 2012.

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Tuesday, October 30, 2012

A circus clown called Pravda!

Putin’s mouthpiece is a flabbergasting piece of shambles

Oh, what all it could have achieved; and look at where it has ended. To say that the Russian government’s official mouthpiece (former, they claim), Pravda, has descended into becoming a ludicrous two crap piece of dimwit news creation, is to state only the tip of the Kremlin iceberg. There has been a lot of talk about Vladimir Lenin’s legacy. It requires no reiteration to praise his role in the development and progress of the Soviet Union. When it came to the Pravda of old, he left no stone unturned to take it to new heights and to make sure that it echoed the voice of the nation. Pravda used to follow Lenin’s editorial stance regularly and voiced what came to be known as Leninism. It was actually after the October Revolution of 1917 that Pravda started selling nearly 100,000 copies daily. Pravda expectably became an official publication of the Soviet Communist Party and a channel for announcing official policy. Decades – and many Soviet premiers – later, it fills one with sadness to see the pathetic state that Pravda has been left in. Sample a few of its breaking news.

On September 24, 2009, Pravda published news (and last month uploaded explicit videos too!) that featured a Russian based US diplomat Kyle Hatcher cavorting pleasurably with prostitutes. US Ambassador to Russia, John Beyrle, defended and clarified that the tape was “clearly fabricated.” As per Beyrle, “the video spliced genuine footage of diplomat Kyle Hatcher in a Moscow hotel room with staged footage of a couple having sex.” The attempt to frame Kyle seemed so ludicrous it could well have been managed by a high school kid. But then, this kind of zany tragicomic news is no stranger to Pravda. Take this multi-part series they had on the topic of sex in 2007. On April 18, 2007, Pravda presented their own version of a juiced up adultery survey on various countries. Fair enough. But six day later, the paper published news on sex museums, following the same within a week with a detailed report on how “future technologies may destroy sex as the ultimate pleasure for humans.” On May 7, 2007, the editorial team came out with a deeply thought review of breasts – about how various media outlets portray breasts differently.


Source : IIPM Editorial, 2012.

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Monday, October 29, 2012

Rich dad, poor dad

Barack just needs to look to his neighbours to understand health policies

That America has not done as well in supporting health issues over the years is a given fact. But how bad is ‘not done as well’? The answer is pretty bad. Not many would know that in the US, the incidence of cancer among males and females is 562.3 and 417.3 per 1,00,000 respectively (American Cancer Society, Surveillance and Health Policy Research, 2009), life expectancy is 77.8 years, infant mortality rate is 6.9 deaths per 1,000 live births (CNN once reported that the US has the second worst newborn death rate in the modern world), mortality rate under the age of five years for males and females is 9 and 7 per 1,000 live births respectively, only 2.7 acute care beds per 1,000 people are available (5th worst amongst all OECD nations), 2.8 physicians per 1,000 and ranks 72nd by overall level of health on WHO parameters!

Perhaps today, the biggest issue in the US is the failure of its healthcare system, especially given the debate on Obama’s policy decisions. Though Obama is not labelled a failure, yet when it comes to healthcare reforms, it might not take too long for his 300+ million supporters to ‘change’ their point-of-view. One need not travel miles to prove what ails the States. Their next door neighbour – Canada – is a case in point, or rather, against the point. Canada has a healthcare model that is better; because it works!

Even after having a US-like healthcare model, Canada has successfully achieved better results in its healthcare report card. Healthcare spending in Canada is around $160 billion or 10.1% of its GDP in 2007, which is one percentage point higher than the average spending by OECD countries. But very interestingly, it is far lower than the US allocation, which is 16% of GDP. Canada also spends lesser on a per capita basis compared to the US. Canada’s total healthcare per capita spending was around $3,895, which is lower than the $7,290 per capita spending of the US. The critical reason why the system, despite spending less, works better in Canada is that while the public sector is the main source of funding for Canadian healthcare, the US system is dependent on private source funding.


Source : IIPM Editorial, 2012.

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Saturday, October 27, 2012

ONGC has to still find a way to beat the oil volatility cycle without the help of subsidies, says ratan bhagat

One has to realise that ONGC’s profits actually registered a 3% yoy decline. One top expert in the industry tells us that ONGC’s small, yet visible decline could primarily be attributed to “the subsidy burden and higher DD&A [depreciation, depletion and amortization] expenditure during the quarter and 8.1% decline in crude oil sales volumes.” And oil price volatility has been killing in the past few quarters. But if the government taketh, the government giveth too – for the subsidies that the government provides ONGC hover at the top of critics’ radars. CMD R.S.Sharma accepts, “The volatility in the crude oil prices has definitely affected ONGC, but its impact for us is not as severe, as the company is hedged against it, given the current subsidy practices of the government which neutralises the major chunk of the price volatility.”

Mere government support and the titular Navratna status can only get one so far. Ergo, one has to accept that ONGC must have done some great things to become Asia’s largest oil and gas explorer, a continent which has intense competition from countries like China and Australia, which have companies like China National Petroleum and BHP Billiton that are placed four hundred odd ranks above ONGC on the Fortune 500 list globally. But the future is where Sharma is playing the roulette game. One has to realise that for decades, ONGC has basically been an upstream oil and gas company, that is, it has focused more on oil and gas drilling; while Indian Oil Corporation has been the traditional downstream firm marketing the oil and gas products. Sharma wants to change that now, using a wholly owned subsidiary – Mangalore Refinery & Petrochemical Limited (MRPL).


Source : IIPM Editorial, 2012.

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Friday, October 26, 2012

Relax! It ain’t a giant wave, not yet!

With two IPOs hitting its shores one can finally see some sign of life in the primary market again. But is the market really ready? manish k. pandey acts investor... oops investigator!

At least 50,000 retail investors applied for shares when Mahindra Holidays & Resorts came out with its initial public offering (IPO) in June this year, while the much awaited Adani Power IPO, which closed last week, received a whopping 5,79,000 applications (the Rs.30 billion IPO attracted total bids to the tune of Rs.650 billion). So the entire IPO ecosystem is buzzing with energy and enthusiasm yet again. Investors are seeing this as a chance to party again after a prolonged sobering period.

But then, is the market really ready for the next big wave of IPOs considering that the retail investor is still sceptical to investing in IPOs after the failure of Reliance Power IPO? “Capital markets have short memories. They have the habit of forgiving and forgetting the losses quickly as soon as they start making money again. Investor response to the Adani Power IPO is a case in the point after the fiasco of Reliance Power IPO. Certainly, investors are back into the IPO arena and it’s business-as-usual for them,” reasons Jagannadham Thunuguntla, CEO and Equity Head, SMC Capitals.

Further, the participation of retail investors in an IPO depends primarily upon two factors. Firstly, on the valuations at which the IPO is being made available to investors and secondly, on the state of the market at the time of the IPO (which has a bearing on investor sentiments). If these two factors are in favour, there is little doubt about the success of an IPO. But are these two factors really in favour of the investor as of today? “I believe that the market is ready for quality IPOs. With the return of the risk appetite amongst the investor community at large, there is certainly a demand for newer IPOs. However, to ensure that investor appetite remains unaffected, it’s important that these IPOs are not bunched together within a short span of time,” cautions Hitesh Agrawal, Head – Research, Angel Broking.
 

Source : IIPM Editorial, 2012.

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Thursday, October 25, 2012

“Honest pricing policy”

B&E: What were the vision and mission for the Indian market when LG started off its operations in India?

MBS: The company pursued the vision of becoming a true leader, attracting customers worldwide through its innovative products and design. In the first few years after its entry, LG did not get into price wars. Unlike other players, it did not offer any exchange schemes or discounts. We believed in an ‘honest pricing policy’ and our message to customers read ‘No scheme, no gimmick, great products and honest prices.’

B&E: What understanding of the Indian market did LG had then and what strategies did LG as a company formalise for penetration at that time?

MBS: Since its initial years in India, LG has focused on bringing out new models regularly in its product range. In its first year of operation in India, LG launched 70 models across a range of products. In 1997, it introduced its Golden Eye Technology TV, which had a light sensitive natural algorithm ‘eye. Thus, LG showed that it cared for customers’ health through its products. LG’s concern for health of customers was its Unique Selling Proposition (USP) in the Indian consumer durables market. Similarly, LG positioned its refrigerators as the ‘preserve nutrition system’ refrigerators.

B&E: What were the key challenges that LG as a company had to face at that time?

MBS: When LG started its operations in 1997, it sold products that were imported. Hence, its products were priced high and were equivalent to other foreign (Japanese) products. However, in 1998, LG launched ‘Sampoorna’, its first low priced TV for rural consumers, and followed it with ‘Cineplus.’ The Indian customers wanted the best products at reasonable prices; LG started introducing quality products in the economy range.


Source : IIPM Editorial, 2012.

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“No schemes! No gimmicks!!”

LG finally had it right the third time in india. now it is decisively upping the stakes

“Our determination for walking the full distance is unwavering. We would like to move faster but we won’t be impatient. A broad consensus in favour of industrialisation (in India) is gradually emerging and we trust that the respective Governments are doing their best...”

Yes, this is a comment from a Korean company on its commitment towards India. But while you may be tempted to think this is LG, it is actually a comment from Posco, when we asked them how, despite the problems with the steel plant, the company continues to stubbornly invest time and money in its India plans. While making steel and making consumer durables are like chalk and cheese, Posco’s determination may be due in part, to the inspiring forays of other Korean MNCs in India; LG in particular.

LG had earlier tested the waters with two unsuccessful attempts (in the form of JVs with Bestavision and Birla group). In March 1997, K. R. Kim (who was then working in Panama) was bought on board to spearhead the Indian subsidiary of the Korean consumer durable giant. Moreover, the market, which was led by the likes of BPL, Onida, Videocon, Weston, Philips, et al, was now changing. LG, along with the other Korean giant Samsung, proved more than a handful for the incumbents, with their aggressive pricing, promotion and distribution strategies.

Cut to 2009, the company has not only clocked a mind boggling turnover of Rs.107.93 billion in 2008 (with a growth rate of 18%) but is also aiming high for its next big fix – the $6-billion revenue target by 2010. But the initial experience of LG in India has not been a cakewalk as the key challenge for the company at the time was not of growth but of survival. From cultural conundrums to corruption, from office space hiccups to high attrition rates, the company had it all. In fact, there was a time when the durable giant had to bear the wrath of the local land mafia and criminal elements at its manufacturing base at Greater Noida in Uttar Pradesh.


Source : IIPM Editorial, 2012.

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Tuesday, October 23, 2012

WEALTH:ELECTION WIN

...us, promises for the people!

Further, the sum total of assets of 64 Union Cabinet Ministers comes to a whopping Rs.5 billion, and 23 of them fall into the segment of Rs.50 million plus. Does it favour democracy?

The Indian National Congress, being at the helm of affairs for the most part of the post Independence era, quite naturally, has the maximum number of crorepati Member of Parliaments (, 141 out of 306). Bharatiya Janata Party is a distant second with 58. Samajwadi Party and BSP follow them in the ranks with 14 and 13 crorepati MPs respectively. Surprisingly, the Left is a laggard here with only one.

America’s second President John Adams once said, “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There is never a democracy that did not commit suicide.” The manner in which money and power continue to be in the hands of a few, one wonders how soon Indian democracy could be headed the same way!


Source : IIPM Editorial, 2012.

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Monday, October 22, 2012

US: POVERTY

One look at the First World reveals a much darker side to poverty

Although these hapless Hispanics have a poverty rate of 22.5%, stunningly, this figure is still lower than that of African Americans, 24.4% of whom languish below the poverty line! The better off Asians and the Whites have a poverty rate of 11.8% and 8.2% respectively.

Across the Atlantic, in Britain, 12.4 million families, which make up 22% of the population, resides below the poverty line. A research has revealed 7 million workers compulsively live at less than 6.50 pounds an hour. In this trying time economic slowdown across the world, poverty is no longer a myth amongst the developed countries, but an alarming reality as is evident in France with 6.2% living below poverty line, while Netherlands has the figure at 10.5%. Any day better than the poverty figure of Africa... 50%!


Source : IIPM Editorial, 2012.

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Saturday, October 20, 2012

Crucifying Che

Ham handed Uncle Sam lost goodwill out here

If there is at all a fitting example of foreign policy blunder, it has to be US mess-ups in the Central & Latin America. Democratic Peace Theory, which has a claimant and champion in the form of United States believe that democratic characteristics is essentially the solitary or outstanding basis of interface between states. However, it fails to explain why US, the so-called champion of democracy, tried to topple every government in Central & South America, whom it either considered despotic or ‘Not democratic enough’ or ‘Not on its side.’ “US ideological conjectures and geopolitics interests have largely determined its acts and behaviour in Latin America. Whenever, there has been an issue between the US and Latin American republics, its diplomats have crumbled under pressure and fall back on stereotypes,” says Christopher I.

Clement, an expert on US policies in Latin America at Heritage Foundation, while talking to B&E. Truly, US have never sighed from toppling democratically elected governments. It all started in 1954 when the CIA engineered the ousting of the government of Guatemala. Again, in 1961, it attempted to overthrow the revolutionary Cuban government at the Bay of Pigs. After aborted and failed attempts, it lied low for few years. But in 1965, LBJ sent 10 battalions of paratroopers to Dominican Republic to fight the constitutional forces striving to recoup. He got success. Then in 1973, CIA successfully ousted the government of Allende in Chile in favour of a gory dictatorship. Similarly, in 1981, the then Reagan Administration started and funded the Contra war against Nicaragua.


Source : IIPM Editorial, 2012.

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Friday, October 19, 2012

Atleast, we spared their pants!

Two biggest M&As. Who lost? The shareholders. Who won? Mmmm...

When it comes to research, experts from KPMG to Booz Allen have already testified that a blood-freezing 66.67% to 78% do not work to create value or are outright failures. When it comes to examples too, the same holds true; the only difference being that in this case, we even know who the victims are! Let’s begin with the biggest M&A trophy, ever – the much discussed hostile takeover of Germany’s Mannesman AG by UK’s Vodafone Plc in February 2000, for a mammoth $183 billion. A year after the deal, the cultural differences had made living hard for the two families, and Vodafone had put Mannesman’s art collection up for sale (true!). Numerically speaking, today, the value of the duo, which once stood at $365 billion (on day #1, post-merger), stands stripped down to a pathetic $64.46 billion (as of April 27, 2009) – a fall of 83%! So why did the soup go sour? First, the deal was at ‘a wrong price with a wrong rationale…’ Ignoring issues of culture, even their business models differed. Vodafone’s concentration of wireless telephony was in stark contrast to Mannesmann’s focus on fixed-line services. Moreover, the logic behind Sir Christopher Gent (the-then CEO of Vodafone) paying a 55% premium for one Mannesmann share remains a mystery...


Source : IIPM Editorial, 2012.

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Thursday, October 18, 2012

DIVERSIFICATIONS: TECH MAHINDRA AND OTHERS

Mahindra & Mahindra is a case of success in diversification; all others have stumbled at some point
  
As soon as the acquisition was announced, many industry watchers turned critics, given the falling consumer base and low ARPU of the target company. Moreover, the deal was valued at twice the normal cost that the conglomerate would have had to pay to DoT for operating in circles like Karnataka and Punjab. But the company went ahead, and what tomorrow holds in store for K. M. Birla is any fathead''s guess. Even the behaviour of Indian retail consumers towards Mukesh Ambani hasn’t been pleasant. So be it the ban on Reliance Fresh in the U.P. region or the announcement of stores closure in the country, there is no denying that Ambani is still a good distance away from troubles as far his retail dreams go. There are many such instances which testify why diversification is actually a doubled edged sword.

And then we come to the real samurai, the one that''s understood the right grip on diversification – Anand Mahindra. He has transformed a typical ‘Jeep manufacturing’ business into a 360 degree conglomerate (well, literally!) – The Mahindra & Mahindra Group. From starting his career at Mahindra Ugine Steel Company Ltd. as just an Executive Assistant in 1971 to becoming the Finance Director just a decade later, he actually seems to be putting his Harvard MBA to good purpose. His aggressive management approach and excellent understanding of the market also saw him become the Managing Director of the Group. Finally in 1997 he became the Vice-Chairman of M&M Group. Well, we''re not here to stand alibi to the fact that every move of his has been ''superlative'', but what makes him admirable are his diversification strategies as N. Wadhwa, MD, SKI Capital Ltd opines, "Anand Mahindra’s diversification strategy has undoubtedly taken the M&M Group to a different platform. He has always been very accurate in understanding the targeted consumer segment...” His successful ventures into sectors like Tourism & Travel (via Club Mahindra) and IT/ITeS (through Tech Mahindra) have taken the $6.2 billion M&M group to new highs. In fact, the latest Satyam acquisition for a mind boggling Rs.28.8 billion has made Tech Mahindra the fourth-largest IT major operating in the country. Apart from Tourism and IT, this magnate has also cut neat corners in sectors like retail, financial services & logistics.


Source : IIPM Editorial, 2012.

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Wednesday, October 17, 2012

Why we loved Rick’s trick... (Sic!!!)

32 long years did this Harvard MBA take to understand GM; one fine day it took the US Senate to fire him! No more gambles, Rick...

George Bush Jr. (the former US Prez, who else?!) and Rick Wagoner share many things in common. Both are men. Both married. Both Americans. Both Harvard MBAs. Both controlled the strongest entity in their fields (one ruled over the US Senate & the other, over the largest US automaker). Both elected in 2000. Both saw their best days in the first four years of their administration. Both reigned for eight years. Finally, 2009 saw both becoming history… And yes, before we forget, both can hold the Democrat Obama responsible for their ousting! But beyond the drama, there exists one stark difference between the two, and in the manner in which they played their final goodbye tunes. While Bush was ‘booth’ed out respectfully by Democrat Obama & his administration (as he’d run out of time), that very same Obama army, booted out Rick!

And it all happened on March 29, 2009, when Rick Wagoner (now former CEO & Chairman, GM), met up with officials from the US Senate. The Senate (under the Republican Bush administration) had previously given him a reason to raise a toast on New Year eve, showering upon him a most benevolent $18.88 billion on December 31, 2008. But matters got no better, and GM ended up burning dollars in public, reporting $52.8 billion in net losses for FY2008!

His affair with GM shareholders haven't been too cordial (See chart to note how GM shares have lost value on NYSE). But hey Rick, we're not here to criticise you... we are proud of you, and surprised we are, as to how the world's turned a blind eye to what's left in the glass... Yes, the $90 billion in GM’s Mcap that you peacefully destroyed during your reign amounts to just 98% of GM's total Mcap when you began gnawing. Rick, now what are they cribbing about? You've still saved 2% for your successors!!! What’s more, the day your resignation was announced, GM’s Mcap rose by a cool $128.2 million; did someone thank you?

Then there are other issues that will keep you fresh in our memories. Your utmost detest for fuel-efficiency and your scrapping of the futuristic EV1 ‘electric car’ project wins you our fan cards! Really Rick, we admire your awareness, and the manner in which you forgot how the global auto market is more elastic than the US army. Afterall, you belong to the Harvard MBA Class of '77, right?


Source : IIPM Editorial, 2012.

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Tuesday, October 16, 2012

Fighting terror can’t be held ransom to vote bank politics

Fighting terror can’t be held ransom to vote bank politics, believes Ranjit Bhushan
 
The conduct of the union home ministry during the five-year-UPA rule has been blasphemous. If Shivraj Patil became known more for his sartorial elegance and less for insights into the working for India’s internal security structure, his successor P. Chidambaram, who made a good start, has lost political face by throwing out the IPL saying that teams could be attacked like the Lankans in Pakistan. “By doing so, he has walked into the trap laid by terrorists,’’ avers BJP MP Ravi Shankar Prasad. “The Congress is committed to fight terror. We know how to deal with it,’’ Congress spokesman Abhishek Manu Singhvi, retorts.

Judged by any neutral observer, it would be safe to say that the UPA government has seen less of terror attacks when compared to NDA. There have been no attacks like the ones on Parliament and the subsequent buildup during Operation Parakram. Even though, it has been business as usual in Kashmir.

Sadly, India remains one of the few countries in the world where the consensus on terror has nearly broken down and can easily pass off as a party dispute – apart from occasional joint statements issued on floor of the Parliament. While Republicans and Democrats in the US frequently disagree, there can be no differences on fighting terror and it cannot be held ransom to the vagaries of vote bank politics. The sooner parties in India realise it, the better and safer it is.


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Monday, October 15, 2012

Useless effort!!!

Example of a responsible ministry

The Indian Ministry of Finance has announced a public competition to select a design for the new symbol of the rupee. Currently, rupee has no globally recognised symbol like the Dollar, Pound, Yen, or the Euro. The word “rupee” originated from the word ‘rup’ or ‘rupa’ which means ‘silver’. The rupee is generally abbreviated to Rs or INR (Indian National Rupee). To encourage participants, Government has also promised a prize money of Rs 25,000 to the five shortlisted participants and whopping Rs 2,50,000 for the winner.

One should not forgot that changing the currency symbol can be a costly exercise for the government. For example, when Euro was introduced after the replacement of guilder in 1999, it cost Europe’s biggest companies more than $50 billion to update their computer systems. Europe had to replace 70 billion coins which was an expensive proposition. Turkey too changed its currency. 


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Saturday, October 13, 2012

Hot on the Alaskan trail?

N. Korea's rhetoric is a plea for a better deal, US needn't take it seriously

Clearly, the new US Secretary of state was eager to make a strong statement on her maiden Asian tour. Hillary Clinton said during her speech in South Korean capital Seoul, “The fact is that, over the past eight years, the North Koreans have obtained the capacity… to make nuclear weapons.” She said that Pyongyang should adhere to its commitment to denuclearize the Korean peninsula and it is not going to get a different relationship with US while insulting and refusing dialogue with South Korea. Referring to speculation that North Korea was preparing to test-fire long range Taepodong-2 missile that can reach Alaska, at least in theory, Clinton said that US would consider such a test very provocative.

Will North Korea give up its nuclear weapons programme, its only bargaining chip, completely? Success in denuclearizing the Korean peninsula largely depends on how US fulfills promises made at the six-party talks.


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Friday, October 12, 2012

RELIANCE RETAIL: RATIONALISATION

Reliance needs to engage with a global partner for its back end

“Reliance Fresh failed because it was too aggressive with its strategies and wanted to capture the entire market without leaving any space for the middlemen and local retailers,” points out a Mumbai-based retail specialist. Reliance had planned to establish its C&C business (which has attracted international big wigs like Walmart, Tesco, Carrefour, Metro AG, et al) in Tier-II cities. However, tough economic conditions demanded conservation of cash reserves, so that business was scrapped.

Winston Churchill had once said, “If you are going through hell, then keep going.” Indeed, Reliance must keep going, but wthout repeating the mistakes of its past. Quite logically, Reliance will have to cut the flab that it developed in such a short amount of time. The company is also mulling over international tie-ups for back-end support. That is a prudent strategy, which has served players like Bharti & Tata well. Outsourcing supply chain management is more cost effective and feasible, especially for a geographically scattered country like India.


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