Government policies were not made in a day

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Clearly, it’s a catch-22 situation. Along with their titanic losses, there is the pressing need to pay up on their bills urgently. In fact, sources say that after paying these outstanding bills, these airlines may not be able to drum up adequate support to fund the travel season ahead, which is a great opportunity to make money. There is perhaps merit in the argument that the terminally ill industry needs a bailout package. Without government support, they would obviously be forced to do whatever it takes to survive – form cartels, merge, layoff people and goodness knows what else is in store...

Although both Mallya and Goyal have categorically ruled out that their ‘alliance’ is a cartel, market watchers differ. “Cartelisation like this has not only affected airlines industry, but other industries too, but that remains mostly invisible. As a result, people who lose their jobs do not have the required skill set for being employed elsewhere. So recruitment agencies also face tough times,” explains C.K. Santhakumar, Director, TRITIUM Consulting, Bangalore.

The Indian aviation industry is expected to post losses of over $2 billion in the current financial year, of which Air India alone will estimatedly post 50%, while Kingfisher’s losses are expected to cross $500 million in FY09. Industry growth has dropped from 33% in 2007 to 7.5% in the first half of this year. To reduce losses, the International Air Transport Association (IATA) has even called for reduction in excise duties and other fees.

When bureaucrats in MRTPC go around sniffing for competitive malpractice around Jet and Kingfisher headquarters, they will have to take into account the overall despondency in the air. The situation really looks so black and white and bleak that despite fears of a monopoly in Indian skies, one almost begins to sympathise with Goyal and Mallya. After all, kissing thy enemy is anytime preferable to total extinction, ain’t it?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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We cannot replace one imperialism with another

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In an exclusive interaction with Shashank Tripathi, Shipra Tripathi, Director, CII, Africa Desk speaks about growing dominance of Indian & Chinese brands in Africa...

Is Africa fast becoming the testing ground for India Inc.’s ‘brand’ war with corporate China?
Africa is a relatively known territory for India historically. In the mind of Indian industry the space provided by Africa as a market place is large enough to house partnerships with India and China. In the minds of Africans it is no longer India or China. The relative advantage provided by the two Asian giants is required for the development of Africa – the technologies from India and the inflow of funds from China. There is a need to build Brand India but not in competition with Brand China, instead in its own right as a destination for adaptable and appropriate high quality technologies.

While China has till now adopted a largely heavy industries led investment approach in Africa, India’s approach is more entrepreneur and brand led. Which one do you think is a better approach?
The question here is not what is going to help India or China but what is going to help develop Africa. While I am not in a position to speak on the strategy being used by China, India has a long term perspective of engagement with Africa. The intention is to do business and to build capacities by ways of institutional links and skills development.

Is the time really ripe to enter the African market? Moreover, can private investors and entrepreneurs alone transform the continent?
Indian industry is private sector driven and this is what drives the economy. The private sector moves where it sees opportunity. The other aspect of Indian industry is that till a few years ago we were not prepared as organisations to take risks particularly in markets with low credit rating. If you look at the statistics now six of the fastest growing economies are in Africa and that provides opportunity for Indian industry to invest and get the results that are expected. The change in the perception of the world regarding Africa is also helpful such as the decisions taken at the Gleneagles where a majority of the G8 countries decided to give debt relief to a host of African countries giving them ready capital to invest in development related activities. So it is a combination of factors of private sector investments, government policies, & political will and institution building that will help transform Africa.

What, according to you, are reasons behind this renewed focus?
A lot of it is related to resources required by the growing industries in the two countries but in India a large amount of investments are going into no resource areas like infrastructure, power and water management, et al.

No doubt, African governments are welcoming investments by India and China, but Africa’s independent voices do not share this enthusiasm? What’s your take on this?
Africa has to stand on its own feet on its own terms. We certainly cannot replace one imperialism with another. Our inputs should support this process not go against it. Moreover, the challenges are largely from the lack of knowledge of the countries and the opportunities that it has for investment and resource allocation.

How do you think the West would react (rather is reacting) on the growing dominance of Indian and Chinese brands in Africa?
The West is looking keenly at the new and emerging influence of India and China. Think tanks are assessing and studying the growing presence in the region. Asian countries do not seem to be an immediate threat to traditional partners like UK and France.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
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“There is a huge opportunity in Africa”

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SUDIP BANDYOPADHYAY, CHIEF EXECUTIVE OFFICER, RELIANCE MONEY

Can you please elaborate on your plans for the African market? Where and how much do you plan to invest in this continent?
Having established our base at Lagos in Nigeria we are already in the African market for quite some time now. This base has been operational since July 2008. We plan to further extend our operations to few other countries in Africa over the next six months.

Critics say Africa is fast becoming the testing ground for India Inc.’s ‘brand’ war with corporate China? What’s your take on the issue?
As far as financial services industry is concerned, there are no Chinese Companies in Nigeria and hence this question is not relevant for us as of now and for the Indian financial industry as a whole.

In the past, business in Africa has been very slow when compared to its global counterparts. Do you think this is the right time to enter this market? There is certainly a huge opportunity in Africa. We have selected Nigeria as our base since this country has the largest population in Africa (about 140 million). Nigeria also has the 7th largest Oil reserves in the world. Moreover, for the last 15 years this country has a democratic set up. Having been under British rule (Nigeria gained independence in 1960) the laws are almost similar and foreign investments are welcome by the Nigerian government. Even the financial services market is under developed and this way the opportunity is certainly significant.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...