2 Hermès T-shirts Equal a Nano

Hermès recently opened its store in Delhi, their first in India. It carries the hallmark of the famed high fashion French brand. The use of high quality material and appraised hand-craftsmanship drives the price points for Hermès merchandise well into the top end. Not surprising then that Hermès has a t-shirt priced just under Rs50,000.
Interestingly, you could buy a Nano for the price of two such t-shirts. Two highly admired brands worldwide. Hermès has built a global brand with a very high value perception while Nano is applauded for its unparalleled engineering and innovation in the automobile industry.
Hermès is the finest example of brand building on the back of pristine product quality such as the Hermès scarf woven from the silk of 250 mulberry moth cocoons, hand printed and hand stitched. The brand boasts a clientele that includes aristocracy, divas, Hollywood superstars and business czars across the globe. Its famous Kelly bag named after Grace Kelly and the Birkin bag named after the Hollywood actress Jane Birkin promise a stairway to style heaven. The company has never licensed any of its products.
Nano is the poster child of Indian innovativeness. As developed economies looked towards emerging markets for growth, they began to realise that for these highly price conscious and value driven markets, products needed to be designed from scratch and innovative solutions were to be found in the markets themselves. China took it a step further - they used scale and innovative ways to produce goods at rock bottom prices for the rest of the world. Tata Motors set itself the challenge of producing a car at the unheard price of Rs1lakh that would make the Indian dream a reality. In a country of 1bn people, car ownership is a mere 1%. Nano gave the world a blueprint for low priced cars.
More recently, global brands have been rushing to set up R&D labs and innovation centres in emerging markets where there are invaluable lessons to be learnt about price and value. Today, everything about emerging markets makes headlines. Every economic and marketing forum is focused on them.
However, let us not forget that when it comes to building brands, we have a lot to learn from developed economies. There are lessons aplenty; Coca Cola, McDonald's, Microsoft, Nike, Starbucks, Apple, Google, and so on. It is perhaps not too early for us to learn lessons on global brand building.
However, Hermès is perhaps one of the most valuable lessons - how do you create a value perception for your brand where even a somewhat less glamorous and casual piece of clothing like a T-shirt will get consumers to pay half the price of a car even if that car is the cheapest in the world!

Great CEOs, Stupid Men

Why is it that men who can pull off corporate miracles fail at something as simple as keeping their fly zipped? I, for one, can think of at least five reasons. So, Mike Hurd is the latest CEO to bow out ignominiously of a dream job. Let me assure you, he won’t be the last. There’s something about powerful, rich men that makes them trip up over something as commonplace as beautiful women. And that’s been happening from time immemorial. A man called Ravan lost his kingdom and life for messing with Ram’s wife; Paris (the Trojan prince) got it from the Greeks for abducting Helen; and in more recent history, Phaneesh Murthy and David Davidar paid the price for their extra-marital pursuits. The question, then, is, why do otherwise bright, successful and wealthy men end up trashing their careers over—well, there’s no delicate way to put this—sexy sirens? Since I am neither powerful nor wealthy, but a man just the same, it’s relatively easy for me to look at this issue rather dispassionately. And having tossed this issue in my mind for a while now, I have been able to pinpoint five reasons. Of course, there’s not a shred of scientific research backing any of these points. Let me walk you through them in reverse order of their importance:- Spoiled by Sycophants: When you are in a position of power, you automatically attract people whose primary job is to keep reminding you just how great you are. Even if they are capable people, their own insecurities are compounded by the fear that perhaps you expect them to shine a little less brightly than yourself. Now, imagine getting brainwashed like this every minute of the day; when no idea of yours is too absurd to be rejected, no joke too silly to evoke laughter, no credit too small to be laid at your feet. Is it any surprise then that CEOs actually think they are extraordinary people? No.- Availability: When you are powerful and rich, there will be those who are drawn to you because they see you as a means to riches and powers. And if you are ‘straight’, most likely the ones throwing themselves at you will be beautiful women. They’ll make you feel special and themselves, available. Now, you need to be either a saint or a man with no testosterone to ward off such advances. More often than not, CEOs capitulate.- Enough is never enough: The CEO is also a family man, right? He’s got a wife and kids, so why should he stray? That’s where the super-achiever in him comes in. Don’t forget that he didn’t get to the top job by accepting convention or saying enough is enough. Enough for him is never enough. That applies to his interest in women as well. He’s got to have more.- Arrogance: Let’s face it, men with self-doubts don’t make great leaders. Typically, the leader needs to make decisions with incomplete information and in times of uncertainty. Often, they are so cock-sure of themselves that they tend to get arrogant. Why else would HP’s Mike Hurd think he could fudge $20,000 in personal expenses and get away with it? Obviously, he thought, “Well, I am the CEO, who the hell is going to rat on me?” And he was right. If his marketing consultant pal Jodie Fisher hadn’t accused him of sexual harassment, his transgression would have never come to light. - It’s in the genes: This is not to justify irresponsible behaviour by men, but the fact remains nature never designed them for fidelity. Like other creatures, humans are meant to perpetuate their kind, and men, whose principal utility is that of an impregnator and not a carrier, are naturally driven to put sex over caution. And that doesn’t change just because you sit in a corner office or you wear an Armani suit

Apple launches iPhone 4 in China

BEIJING: Apple on Saturday launched the latest version of its iPhone in China and boosted its presence in the world's biggest Internet and mobile market by opening another two stores in Beijing and Shanghai. Dozens of people queued up at the new store in the capital for the first official iPhone 4, some waiting for more than 24 hours, state media reported, even though the smartphone has been available on the grey market for months. The iPhone 4 is available in Apple stores in the two cities, as well as at China Unicom retail outlets for buyers who sign a two-year contract with the operator, Apple said in a previous statement. The 16-gigabyte version of the smartphone, which will have wireless Internet capability, will cost 4,999 yuan (744 dollars) at Apple stores with the 32-gigabyte selling for 5,999 yuan, the California manufacturer said. China Unicom, the country's second-largest mobile phone operator, reportedly took nearly 50,000 pre-orders for the iPhone 4 on September 17, the opening day for such reservations. With the two-year contract, the 16-gigabyte will sell for 5,880 yuan while the 32-gigabyte version will cost 6,999 yuan, the China Daily said. The iPhone 4 made its debut in China just a week after Apple officially launched the iPad tablet computer in the country, with some customers queuing up for several days to ensure they got their hands on the sleek device. The new stores in Beijing and Shanghai will bring the company's total to four in China -- two in each city. It plans to have 25 stores in the country by the end of next year. China has at least 420 million web users and is also the world's largest mobile market with more than 800 million subscribers as of the end of June, according to official data.

Foreign banks lower lending, workforce in India in '09-10

NEW DELHI: Foreign lenders operating in the country reduced their overall lending by over one per cent and staff strength by over six per cent in 2009-10 fiscal. This happened even as the overall economy bounced back and foreign banks increased their number of branches in India during 2009-10. According to the Reserve Bank, foreign banks gave out total advances of Rs 1,63,260 crore during 2009-10. This was 1.28 per cent less than Rs 1,65,385 crore of loans given by the banks in 2008-09. In addition, overseas banks had 27,742 employees in India as on March 31, 2010, a fall of 6.22 per cent compared to the previous fiscal, RBI said in its latest 'Profile of Banks'. However, the total number of offices operated by foreign lenders in the country went up to 310 in the last fiscal, from 295 in 2008-09, it added. There are 32 overseas banks operating in the country. Among major foreign lenders, Citibank gave out advances of Rs 36,655 crore in 2009-10, down from Rs 39,920 crore in the previous fiscal, while Barclays Bank's lending fell to Rs 7,565 crore in the last fiscal from Rs 10,551 crore in FY'09. Hong Kong & Shanghai Banking Corp gave out Rs 23,475 crore in India last fiscal, down from Rs 27,589 crore in the year before that. Royal Bank of Scotland NV's lending in the country fell to Rs 13,406 crore in 2009-10, against Rs 16,660 crore. However, Deutsche Bank's advances to Indian customers went up to Rs 12,923 crore in the fiscal ending March 2010, from Rs 8,798 in the previous year. Standard Chartered Bank had the largest payroll among foreign banks in India as on March 31, 2010. It employed 7,903 staff in the country, which was a small rise from 7,825 in the previous fiscal. But many of the other overseas banks reduced their staff strength substantially last fiscal. Hong Kong & Shanghai Banking Corp cut staff numbers to 6,685 last fiscal. It had 7,746 employees in India in 2008-09. Royal Bank of Scotland NV's workforce in India came down to 2,716 in 2009-10 from 3,241 in the previous fiscal, while Citibank's went down to 4,613 from 4,795. Barclays reduced India payroll by a third and ended 2009-10 with 1,083 employees against 1,534 in 2008-09. Even as they shed staff in India, overseas banks added more branches in the country last fiscal. Standard Chartered Bank increased the number of its offices to 95 from 91, while Hong Kong & Shanghai Banking Corp touched the 50 mark from 47 a year-ago. Citibank's total branches in the country went up to 43 in 2009-10 from 41 in the previous fiscal.

MGM studio creditors reject $2 billion bid

Indian conglomerate Sahara India Pariwar says that its offer to buy out the creditors of struggling Hollywood studio Metro-Goldwyn-Mayer Inc for more than $2 billion has been rejected. Subrata Roy Sahara, the company's chairman, had a conference call with creditors on Tuesday. The company said late yesterday that the offer was rejected within hours. A spokesman for Houlihan Lokey, an investment bank that is advising MGM's creditors, declined to comment. MGM's creditors are owed around $4 billion. They are negotiating a restructuring plan for the studio that could include a prepackaged bankruptcy. MGM has rights to the James Bond franchise and owns half of the upcoming movies based on J R R Tolkien's "The Hobbit."

Next year critical for decision on India venture

Telenor ASA, Scandinavia's biggest phone company, said next year will be decisive for its Indian operations. The Norwegian company, which spent about $1.3 billion to buy control of its India venture and invested 4.8 billion kroner ($808 million) more on capital expenditure, has accumulated more than 3.4 billion kroner in losses in the South Asian country. The India operations added just 159 million kroner, or $27 million, to revenue in the first half. "Our goal is to get back on the business plan next year in terms of revenues and cash flow," Sigve Brekke, the chief executive of Uninor, the Indian venture, said at Telenor's investor meeting this week. "I'm not going to say that we are confident. A year from now we'll know what we're able to do." Telenor entered India last December seeking to leverage expertise gained in Pakistan and Bangladesh to capture growth and profits in the world's second-biggest wireless market. With more than a dozen operators competing for users in India, call rates have been pushed to as low as a penny a minute, making the risk in the market too great, Telenor investors have said. Uninor could still meet its target of profitability in three years although the company has been "humbled" by its setbacks, Brekke said. The executive took over the operation in July from Stein- Erik Vellan after the first six months didn't meet projections. The company estimates it doubled revenues and boosted subscriptions 79 percent in the third quarter. LOW LEVEL "Obviously it's picking up, Sigve Brekke is doing a really good job of re-energising the sales," said Frank Maao, an Oslo- based analyst at DnB NOR. "But it's picking up from a really low level when it comes to revenue and the whole challenge is related very much to the structure of the industry and the number of players." India's current regulations discourage consolidation that would help remaining players increase profits. Another hurdle is the possible requirement for universal coverage, meaning wireless companies could be compelled to provide service in villages of 5,000 people rather than concentrating on more lucrative markets. Brekke says Uninor aims to become one of the top six companies in each of its "circles" or regions , and is close to that goal in several circles. He's changed managers in four circles where performance lagged and introduced a pricing plan that requires users to keep the Uninor SIM card in their phone to take advantage of fast-changing discounts. Indian users typically juggle prepaid SIM cards from several phone companies. Average calling prices collapsed last year as companies offered free calling minutes to sign up customers. India added 13.5 million mobile subscribers amounting to 2.9 percent of its base in August according to the Cellular Operators Association of India. Uninor added 32 percent, the association said. "The market growth you see is not going to last forever," Brekke said. "The experience we have from other markets is that if you don't take your fair share when the market is growing like that it's very difficult to do that later." Prices have stopped falling and he expects the free- minutes plans to taper off because they cut into profits. Uninor's monthly Average Revenue Per User, or ARPU, was 90 rupees ($1.97) in the second quarter, rising to 100 rupees in August, the company said. "If a year from now we are still competing with free minutes and the regulations go against us," then the business may be reviewed, Brekke said, saying the company will continue with plans to improve operations. "Even if we sell it, we have to have something to sell," he said. Telenor entered India when it acquired a majority stake in a new wireless business set up by Unitech Ltd., the real estate company controlled by Indian billionaire Ramesh Chandra. It's kept infrastructure costs down with tower sharing agreements, including new contracts that Brekke says have smaller fees and shorter lock-in periods than the initial agreement made with Tata Teleservices and Quippo Telecom Infrastructure.

Is Indian realty sector hurtling towards another bubble?

Avalid question - and one being asked by almost everyone looking for property in Mumbai , Delhi or any of the other city where real estate prices have spun out of control - still, speculating about real estate bubbles on the Indian property market without looking at the facts is the work of a doomsayer, not an analyst.First, a much-required definition: What is a real estate bubble? How does it happen?A real estate bubble happens when the cost of homes climbs unrealistically fast. In a normal market scenario , prices do rise, but only in tandem with the rate of inflation or a rise in middle-class incomes. When a real estate bubble goes critical and finally bursts, the prices of the same homes come crashing down and the real estate market takes a nosedive.In nature, a bubble is the most energy-efficient configuration for something as fragile as a stretched sheet of soap water. As long as it is not acted on by an external force, it can stay that way for a long time. In a way, that is true for a real estate bubble as well - unless something happens to disrupt the status quo, it will prevail. Fortunately , it is not the nature of the property market to leave a real estate bubble alone for too long. The artificial pressures that create it are always defeated by the pressure of demand for rationality. Once demand for irrationally priced properties drops sufficiently, the bubble bursts.