It's strictly business

As the famous lines in “The God Father” go, it is very important to demarcate between personal and business issues. Let me cite Michael Corleone's words “It's not personal…. It’s strictly business”.

Like many, I was a keen follower of Mergers & Acquisitions which took place over the last few years. I am very impressed by the scale of acquisitions taking place across various verticals in the industry. I believe, owing to several factors, many industry verticals (irrespective of how mature they are) are going through a consolidation phase. In every industry, this phase is bound to happen at one time or the other.

I was also following the JLR (Jaguar-Land Rover) deal which the Tata Motors won. I am glad that Tata’s can use their expertise in turning around unprofitable businesses to turn around two iconic British brands. Like many, I too have my own concerns. Considering the portfolio of Tata Motors, terms of the deal etc, can Tata’s turn around these businesses. On the positive side, this deal could potentially make Tata Motors a “one stop” for car enthusiasts. Also, a typical customer could start with a Nano, upgrade to Indica/Indigo/Palio few years later and could upgrade to some high end model (Range Rover, X* series in Jaguar) when he/she could afford. So, a customer could purchase his first car and his last car with Tata Motors, provided that the customer is extremely satisfied by the service received from Tata Motors. Not to forget, the international market Tata Motors would be targeting with JLR. Of course, all this requires lot of effort and planning on behalf of Tata Motors.

I came across a post on JLR deal in BusinessWeek and it is worth a mention. For the post, click here

While this post is a very good write up on JLR deal, I would say I am disappointed by the comments section. After I read the comments, for a while, I really had second thoughts on free e-media. The context of the post is lost just in the first few comments and it looks as if the comments turned out to be arguments. Phew! (Few comments reminded me of dialogues in Rajnikanth's movie).

After I read the comments, I am all the more puzzled due to several questions that ringed in my mind. They are:

1) In this globalized world, how fair are the words “Indian (any country for that matter) Company”

2) What does it take for a company to be called an Indian company? Do the founders need to be Indian? Do the majority of operations focus on India? Do majority of share holders need to be Indian? Do all the share holders need to be Indian? Do the CEO and majority of the management team need to be Indian? Should the company be funded by Indian government and the company be responsible to the cabinet?

3) When Tata signing JRL deal can be compared to the victory/domination of Indian businesses over British businesses, what does Vodafone’s purchase of majority stake in Hutch signify?

4) Does the fact that every body is using electric bulb signifies the power of American innovation over ignorant rest-of-the-world.

All such comparison with foreign institutions and brands does no good to organizations and brands emerging out of India. Instead of focusing on differences, I think one should focus on common strengths and spread globalization to every corner of the world enriching people. At a time when Indians (including me) need to educate the rest of the world about India’s rich and diverse culture, all this rant and unnecessary comparison makes the task much more difficult.

By the way, congratulations to Tata Motors for sealing the deal. The real deal (turning the two brands around) starts NOW.



DISCLAIMER: The contents of this blog are strictly my personal opinions and not those of any organization/institution I am a part of, nor made in any official capacity of such organization/institution unless expressly stated otherwise and where I am explicitly authorized to do so.

Its gonna be ISB

So, I am going to ISB and everything is official about it. When I started applying, I googled for blogs to find information on application process, tips and personal experiences of folks who made it. Now, I think, is an opportune time to help folks who are in similar state as I was a year back. Hence, this post.

I believe, it all starts with the realization to do MBA. The reasons are very much specific to individual. Trust me; the reasons are very specific to each and every individual. Once you have realized, you have lot of schools to choose from. Once you have finalized on the schools, it’s all about how well you do in convincing the ad-com of those schools. The application process of each school is not exactly the same as the others. However, the approach can be broadly categorized in to taking the exam (GMAT etc), filling up the application form and then the interview (this may be accompanied by group discussion for certain schools).

Though GMAT is not the single most important criterion to make it to a B-School, there is no harm in having a good score in application. If you can’t score big, don’t feel disappointed. Fortunately, applying is not only about GMAT. There are lots of avenues in the application where you can make real difference.

A very good read to start application process is 'How to get in to the TOP MBA Programs' by Richard Montauk. The book deals with most of the intricacies involved in application process. It also addresses some very typical “What to do when faced with” questions. Personally, I found this book very handy.

They say MBA is all about networking. True to that statement, I think, even an MBA application starts with networking. Once you start applying, I think it is always suggestible to get in touch with alumni of that school. Be it drafting resume, editing essays, preparing for interview, I think it is always suggestible to seek help from people who have lived through the process. In my case, the help and feedback I received from ISB alumni proved invaluable. I also suggest applicants to use the “contact a current student” feature provided by the school and make full use of it.

The sooner one starts the apping process, the better it is. Not only does this give more time to think over the application, it also helps in refining application strategy. While writing essays, the author (referred as you further in the post) should try to be “critical and logical”. Once you are done with the first version of the essays, make sure that the essays are critically read by diverse set of people. Seek feedback from them, analyze their feedback and try to accommodate it in the essays with discretion. Not to forget, the more the essays are read, the better they get. One more very important point to note is: It is always suggestible to submit the best application than to apply early. It is always suggestible to submit a strong application in second or further rounds than to submit a “not-so-strong” application in the first round.

After the application is submitted, it is better to be patient than to send emails to schools asking for status (unless until school does not conform to the deadlines). Also, in the interview, never say anything which contradicts what is written in the application. That’s like kissing a cobra. In the interviews, stick to the essays and try to add personal touch rather than sounding like somebody else (unless until you are very good at acting).

Few tips:

1) Be Yourself. Don’t try to be someone whom you fancy. You are at your best when you are what you are.

2) Be critical and logical while drafting essays and resume. The first version of essays and resume is never the best version. Typically, a good essay or a good resume goes through numerous reviews and edits.

3) Seek help from Alumni. Most of them will be helpful as they might have been through similar situations in the past.

4) Enjoy the application process. Historically and statistically, humans have done extremely well when they enjoy what they do. Also, application process is a good opportunity to introspect. Trust me, many people recollected some very important events in their life during the application process which were forgotten over time. I am one among those many people and don’t ask me what those events are :).

For those who come across this blog while applying to schools, Happy apping and Good Luck!!

DISCLAIMER: The contents of this blog are strictly my personal opinions and not those of any organization/institution I am a part of, nor made in any official capacity of such organization/institution unless expressly stated otherwise and where I am explicitly authorized to do so.

Bear Sterns Bail Out

To start with little history, Bear Sterns is a financial giant with 80 + years of experience in financial world. This company withstood The Great Depression, the stagflation of the 70s, the dot-com burst but succumbed to the subprime mortgage crisis.

Now what is subprime mortgage crisis?

Subprime mortgage crisis is sudden increase in foreclosures by home owners.

Now, who are “these” home owners and what is foreclosure?

These home owners are people with not so good (less than generally accepted) credit rating and ended up taking home loans with higher interest rate. Subprime loans provide an opportunity for borrowers with less than "not so good" credit rating to access loans at higher interest rates.

With the real estate prices’ increasing continuously, the lure of hedging on homes is too good to resist. Even if the lure is not good enough to entice people to buy homes at high prices, the fear that “if not today, I may never be able to buy a home in this ever rising real estate market” could also be a significant reason.

Let’s look at an example:

A person XYZ takes a loan at higher interest rate (subprime rate) when the real estate prices are sky high with the hope of refinancing at a low interest rates. If XYZ does not have good credit rating, he/she is not entitled to loans at attractive interest rates. However, XYZ can improve his/her credit rating by paying EMIs on time for one year. The problem arises when XYZ cannot pay as planned. The credit rating worsens and the chances of refinancing at lower interest rates are minimal. To add to the problems, if the real estate prices collapse in the midst of all this, XYZ is in real soup now. XYZ took a loan at higher interest rate when the home is valued at a higher price. Now, the home is not valued at the rates for which it was paid for. That means, XYZ is paying more than the current value of the property and he/she is not financially sound enough to manage this. So, XYZ chooses to foreclose the property. When this happens on a bigger scale, boooom, crisis starts.

So, how did a company which was awarded “Most Admired” securities firm in Fortune’s "America's Most Admired Companies" survey get involved in all this? Bear Sterns invested heavily in hedge funds that lost almost all of its value because of subprime mortgage crisis. One thing led to the other and finally, the share which was valued at 87 USD during the last week of February 08 is offered 2 USD on 14/15^th of March 08 by JP Morgan Chase. The firm whose net income during the previous year was 2.1 billion USD (source: http://www.businessweek.com/bw50/2007/74.htm) was purchased 236.2 million USD. That’s how quick fortune changes. One of my colleagues was talking about an English guy who holds 10% in Bear Sterns. Man, that guy would have wept his heart out after all this. I even came to know that few employees of Bear Sterns who hold stock options could not control their emotions during all this mess. After all, we are all human.

However, If one looks at the bigger picture, I think this is all part of economical cycle. Not everybody would get rich all the time. Few get rich, few get richer and this might mean few getting poorer. It’s all in the game. Mankind has seen many financial collapses like this in the past for different reasons though; many of which we don’t even remember vividly (For those who forgot, remember, there was a much bigger financial collapse just few years back. Does ENRON sound familiar?). The collapse of ENRON had far reaching consequences than the collapse of Bear Sterns. A typical investor in Bear Sterns is much richer than a typical investor in ENRON. Also, it is not as difficult to find another job for employees of Bear Sterns as it was for employees (most of them not highly skilled) of ENRON.

My point here is: We should all look at the bigger picture and not panic when a blip takes place in the economy. An economy is not bound to grow unprecedented. It is bound to have recessions. We should not loose confidence and rather work towards a better tomorrow and a brighter future.

DISCLAIMER: The contents of this blog are strictly my personal opinions and not those of any organization/institution I am a part of, nor made in any official capacity of such organization/institution unless expressly stated otherwise and where I am explicitly authorized to do so.

Daylight Saving Time... What does it really save

As every process has a purpose, I started researching on the purpose of Daylight Saving Time (referred to as DST further in the blog). The most common reason I came across was "optimizing the energy utilization by utilizing day light". However, up on deep diving in to the concept of DST, I came across statistics which contradict with "optimizing energy utilization". Also, there could be other efficient ways of playing around with clock to use power efficiently. This assumes high significance owing to ever increasing oil prices.

Let us dwell up on the concept of DST. DST is nothing but getting up early to reach office at the same time. I am sure the above sentence is very confusing. Let me explain in a different way. DST is nothing but advancing clock so that "day" starts early and ends early.

Let us discuss various advantages of DST.

1) As a normal day would start early and end early, this leaves more time for leisure. This encourage people to spend more time outdoors.

2) As a typical day would end early leaving more time for activities like shopping (much to the delight of women :) and to the retailers ofcourse) and partying.

3) Reduction in energy consumption due to the extra one hour of sunlight which is utilized in the evening owing to getting up early.

I am not sure if there are any other advantages of DST. My initial reading on DST led me to the above and I very much agree with the first two advantages. I would like to discuss one more factor which is cited as an advantage of DST before focusing on energy utilization.

4) People would drive back to home when the sun is still in the sky making driving relatively safer.

I am not able to comprehend how driving is made safer by the extra sunlight offered by DST. Let us restrict our discussion to the American context. First of all, DST is implemented during spring and summer. During those six months, most of the working people would drive back to their respective homes from work when sun is still in the sky even without DST taking effect. Those who would be benefiting by driving are the one who spend that extra time for other activities. So, the people who would be benefiting are the ones who would spend time outdoors.

Let us talk about energy consumption. It looks very obvious that energy consumption would be reduced by DST. Effectively, we utilize sunlight by getting up early and not sleeping when the sun is already in the sky. However, there are lot of factors which needs to be considered before concluding that DST would actually result in efficient power utilization. Few of them being; geographic location, climate and social habits of the populace in the region. However, if the decrease in consumption in the evening is more than the increase in power consumption in the morning, isn't it worth trying DST during winter? However, there needs to be empirical evidence to support this claim. Contrary to popular belief that DST results in reduction in energy consumption, certain studies by National Bureau of Standards reveal that DST does not always result in reduction in energy consumption.

However, DST could result in better performance of retailers. Is DST the boon to retailers who are devoid of shopping festivities like thanksgiving, christmas, new years eve etc which are all during winter?


DISCLAIMER: The contents of this blog are strictly my personal opinions and not those of any organization/institution I am a part of, nor made in any official capacity of such organization/institution unless expressly stated otherwise and where I am explicitly authorized to do so.