China + India: The Power of Two

Recently, I read an article in Harvard Review Magazine (Dec 2007 Issue) that tries to focus on the advantages of working with these two countries (India and China) for India, China and all multinational companies around the world. India is known for its Services sector and China for Manufacturing and infrastructure, they both should start working together as one business nation for mutual interest. Western countries often debate that these two countries can never work together as both are competing with each other to become the undisputed superpower in Asia. Indo-China war that took place in 1962, China support to Pakistan (not liked by India), and India allowing Tibetan refugees (which China resents) provides more evidence to support the argument about India-China relations were never better.

The tensions between India and China are real, but they both started to understand the importance of working together. China-India together form 2.4 billion population, economists predict that by 2016 they will account to 40% of world trade compared to 15% in 2006. China changed its global business polices or strategy in 1978, and as of now it is very strong in manufacturing and infrastructure sector. In contrast, India changed its policies in 1990’s, and its now global leader in services and Information technology sector. Both countries have appetite for oil, coal, and iron ore, for which they compete fiercely, and also fight for capital and foreign investments from North America, Europe and Japan.

There are three good reasons to believe that these two countries can complement each other – one historic, one economic, and one strategic. Historic – Before India-China war, both countries used to share strong culture, business relation, and free trade. The relationship between China and India was one of with mutual respect and admiration. Economic – They have started to trade, and do more trade than any other nation. Recently, committee that was set-up suggested that bilateral trade could touch $50billion by 2010. As of today, these neighbors do 40% less trade than they should. Apart from that, trading is more balanced between them then China’s trade in USA and Europe. Strategic - China – Strong manufacturing and Infrastructure, India – Service and Information Technology, they chosen different routes to enter global economy. What is China is good at; India is not – vice versa.

So, the kind of industries that flourish in China and India are very different. Already, Indian and Chinese companies started to work with each other and cashing on each other strengths. It's time for multinational companies to review its strategy, in which they treat these two countries as one big nation with two different models. It’s a huge task for multi-national companies to make the best use of both nations, but it’s not impossible. GE and Microsoft are very good examples of implementing this strategy of working with both countries, and bringing best out of them. In the end, author quotes – “Instead of balking at the inevitable expansion of economic power beyond New York and London, companies will do well to recognize the complementarities between Beijing and New Delhi and, in a fast-changing world, try to wrest competitive advantage from them”.

Ethics Case(HBR CASE) - Starbucks and Conservation International(CI)

Harvard Business Review Case Study - Starbucks and Conservation International(CI).

The ethical issue/s you see in the case -

The ethical issue here is whether Starbucks is really committed to their statement of social responsibility and their commitment to protect the environment. In mid-2002, Starbucks collaborative efforts with the environmental nonprofit Conservational International(CI) to promote coffee-growing practices that would enhance the environment and produce high quality coffee beans.

Starbucks, CI, Coffee producers, Coffee drinking customers, and environment are the affected stakeholders.

Starbucks - announced new coffee-purchasing guidelines developed in partnership with CI and aimed at supporting its commitment to purchase coffee grown and processed by suppliers who meet the environmental, social, economic, and quality standards. It will be benefiting by the publicity factor as it is more committed to the business. But it has played a key factor is changing the mindset of other coffee retailers around the world by joining the hands with CI.

CI – Its earned valuable experience and success after the Chiapas project. It is in the process to developing more conservation coffee projects in the additional countries and was in the early stages in Columbia and Costa Rice.

Coffee Producers – All the coffee producers sooner or later have to change their coffee making process in order to meet the needs of the customers like Starbucks and new regulations that are emerging in the coffee industry.

Coffee drinking customer’s – Due to the change in coffee-growing practices to enhance the environment, taste of coffee has changed over the period of time. Companies like Starbucks are continuously working hard and stressing the coffee producers on improving the quality of the coffee. Taste is the key factor of Starbucks for attracting their customers; change in taste can affect the Starbucks business as people might get the same taste, which they used to get from non shade-grown coffee.

Environment – After the huge success of Chiapas project success, CI is taking the initiative to develop conservation coffee projects, which eventually focus on the protecting the environment by growing shade-grown coffee.

Final Verdict -
Starbucks claims itself as a socially responsible company, which might not be true in this case. I believe Starbucks is more utilizing the publicity factor to promote their products. In one of the context referred in the paper were “The efforts with the farmers and their cooperatives had produced significant results. Since 1998, the coffee-growing land incorporated into the CI conservation program increased 220%. In the first year of the collaboration Starbucks bought two containers of shade-grown Mexican coffee from the cooperatives. The company held a small news conference to announce its introduction of shade-grown Mexican coffee and, company got an enormous amount of coverage: 45million news impressions, including USA today”. It was not Starbucks initiative to grow shaded-grown coffee; it just joined hands with CI who took the initiative. For Starbucks point of view, they strictly came-up with coffee maintaining standards irrelevant of the cause for which the CI is fighting. But, at the end day, Starbucks trying the take the credit of CI by announcing itself as an environmental friendly firm.

**Information provided above is purely for academic purpose only and not be used for any real time situations/analysis.

Starbucks(HBR Case) - SWOT analysis

Here is the my SWOT analysis for Star bucks(Nasdaq: SBUX) corporation, this analysis is based on Harvard Business Review article on Star bucks(2002).

Strengths -

• By 2002, Star bucks established as a dominant specialty coffee brand in North America.
• Branding strategy, customer service and coffee shop atmosphere.
• Employee retention is good, provided health insurance and stock options to everyone.
• Ranked 47th in the fortune magazine list of best places to work.
• Introduction of non-coffee-based line of Frappuccino beverage, SVC and T-mobile hot spot.
• Joint venture with Pepsi-Cola and Dreyer’s Grand ice cream.
• Owns one-third of America’s coffee bars.

Weakness -

• Only seven states had more than 100 star bucks locations.
• It is not hiring more people, which reduce the customer waiting time.
• Good presence in US, but in other countries.
• Poor service and quality over a period of time.
• Part of Source of investment is from EPS (earnings per share), which is dependent on stock price.

Opportunity -

• Eight states in the US without a single company-operated star bucks.
• Open more locations across US
• Getting into “Roasting to Order” sector, shipping the order in 24hrs.
• Taking over the International market.
• Exploring others areas of products other than coffee.
• Buying out the emerging coffee shops and capturing the market.
• Developing products for customers for different ethnic background.

Threats -

• Average customer visit reduced from 18 to 5 times a month.
• Other coffee shops strong presence in few states.
• Customers finding a replacement of coffee or a competitor launching a replacement product.
• Little image or product differentiation between star bucks and the smaller coffee chains in the minds of specialty customers.

**Information provided above is purely for academic purpose only and not be used for any real time situations/analysis.

My Movie - Rang De Basanthi

Enough of management classes, lets talk some entertainment. I would like to share my experience/views about the movie of the year "Rang De Basanthi"...

Abstract of the movie - Story about 5 or 6 bunch of Road Romeo's, who are absolutely useless for the society and fit for nothing, take up the responsibility of changing India overnight by killing the Defense Minister of India!..no kidding I am serious. They all wakeup early in the morning, two members of the bang go on a BIKE and kill minister and compare themselves to Bhagat Singh & Chandrasekar Azad of freedom struggle era. There are couple of funny things about the movie..

1. Minister(Defense Minister of India), going for a morning walk without security...
2. 45 year old Aamir Khan playing the role of a teenager..
3. Last but not the least, bollywood sends this movie to Hollywood OSCARS...what the hell..if Spielberg watches this movie, he will stop making movies. Probably that is reason the Oscar jury member's took precautionary measures by eliminating this movie in the 1st round.

Well, there are many interesting punch lines, electrifying & confusing twists in the movie. I would prefer not to comment on them. Its a huge hit in my country though, I wonder why....

Suggestions to the director and Actors -
1. Director - We are sick and tried of your movies, your previous film AKS(just sucks), and the latest movie (more & more sucks). Please don't even bother dreaming larger than life, its not only injuries to you but also to us(viewers).
2. Aamir Khan - We all know that you remarried, this time a teenager. It doesn't mean that you will become a teenager by marrying a teenager. Its not possible dude, of course you can definitely fit into the role of a teenager's father. Please try to explore in those areas..
3. Madavan - You got to be kidding me, he played the role of a Air Force commander. What can I say....No comments.
4. Soha Ali Khan - No acting, no glamor...I dont know in what role she fits into.

Overall, its been disgusting experience watching Rang De Basanthi. I don't even want to think on what went into the minds of international crowd who watched this movie..
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Stay tuned as more reviews are in the pipeline.
Coming next MOVIE OF THE ERA ----
JAMES - *ing "Macho Man" Mohit Ahlawat & "Sizzling hot " Nisha Kothari
Manic Director - Ram Gopal Verma ... God Bless America...
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Leadership or Great Team?

I was watching a program yesterday where two CEO from different line of business were interviewed. One of the question they were asked was - "What matters for a success in corporate level of management, great team or leadership?". To my surprise the answers given by them was that its leadership qualities that matter for success or failure.

Reason: In spite having a great team and without strong leadership, team cannot perform as its lack direction. Strong leadership should be backed with a great team to get the job done, but not always. Where as vice versa can never be true. Its the strong leadership that makes the difference, it guides the team, helps it to perform as per the expectations needed to complete the task.

What do you think about it?

Initially, I was not sure about it. But, its makes sense once I apply this concept in my daily work. Whenever I walk into my office, I always expect my manager to tell me what he wants from me to contribute for accomplishing the task. So, its the leader who needs to be proactive and take the initiative for getting things done from his team. Its his duty to identify my skills and extract work from me and so with other members of the team. I know my skills and so with others in my team, but unless we are properly utilized the over-all task cannot be accomplished. Its the job of the leader to break the task and distribute to the team based on the skills of the individual.

I believe its the leadership qualities that play an important role for success or failure of any project.

Introduction

I'm Vinaya Gangalam, not sure on what to say about my introduction. This is not just a personal blog where I start writing about my life (I don't). But, more focused in writing business related articles. Mostly, my blogs are focused on Management, Corporate Strategy, Internatinal business and Marketing.

Education
MBA(International Business and Marketing), USA
MS(Computer Science), USA
BE(Computer Science and Engineering), India

Professional Experience
I'm currently working as a Intl. Business Development Manager for a reputed MNC. I have around 7-8yrs of experience in Business Strategy, Business Development, Account Management, Technology and International Business. Worked across various domains - Health care, Insurance, Manufacturing, Gaming, Tolling and Publishing.

Feel free to drop your comments, I will certainly respond to them(Most of the time).

Thank you for visiting my blog.

Vinay