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Yesterday was Martyr’s Day in India – the day when perhaps its most illustrious martyr, Mahatma Gandhi was assassinated more than 60 years ago. It’s a day largely unnoticed by the Indian public . We have many “days” these days – Children’s day, Teacher’s day, Father’s day, Mother’s day, and so on. Many are the product of a commercial opportunity exploited. In the clutter, the not so commercialised days fall by the wayside. I suggest that Martyr’s Day deserves rather more a consideration. The supreme sacrifice for a country is the biggest call a nation can ever make to its citizens. The call comes to the military and, these days, unfortunately to political leaders. It is a supreme irony that Mahatma Gandhi, the apostle of peace, fell victim to an assassin’s bullet. Indira Gandhi and Rajiv Gandhi followed as martyrs – assassinated because of something they did in office. This post is however more on the military side of martyrdom. Every military man knows when he joins the military that...

Much of the press on the calamitous state of the US auto industry centered around General Motors. Spare a thought for Ford, which has quietly done some amazing things. Ford was the only one among the Big Three that did not take the US government bailout. They also were the only one that did not go into Chapter 11 bankruptcy. And yesterday, they announced pretty good 2009 results. They made a profit of $ 2.7 billion in 2009. Yes, t-h-e-y m-a-d-e a p-r-o-f-i-t- i-n 2-0-0-9 ; one of the most brutal years for the auto industry. They gained market share in the US. Their fourth quarter volumes were up 26%. By any standards, an impressive performance. Sure the numbers hide some real worries (as they always do). Their main business of selling cars actually lost $1.4 bn in 2009. That loss was offset by their finance arm – Ford Motor Credit which made a profit of $1.9 bn. (just goes to show that taking a loan to buy a car is for suckers). But in Ford’s favour, in the fourth quarter, the car bus...

If you’ve been within 100 miles of any business school, you have , no doubt, memorised from cover to cover, all the pages of Marketing Management by Philip Kotler. A doyen of marketing, Kotler is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management . His work was the standard text book 30 years ago, and still is. Many marketing hotshots are educated on his concepts and then blithely spend a lifetime ignoring it. Make a shoddy product, charge the moon for it, pour a fortune down the drain in advertising and then wonder why the product isn’t selling ! The zillions of dollars sloshing around the advertising industry is testament to this “Marketing Myopia”, to borrow a phrase from another seminal piece by Ted Levitt from a few decades ago. One shining exception to this is Apple. They anticipate (and sometimes even create) consumer needs and meet it brilliantly. To hell with all the rest. Take the case of the iPhone. Absolutely br...

Its difficult to get all senti with concrete. But then office buildings are no ordinary slabs of concrete. They are a piece of history in themselves. They have seen numerous people come and go, they have seen victories and defeats, they have seen joyful moments and sad occasions. They deserve a farewell when its their own time to go. Today a corporate giant moves away from a legendary building, which has been its home for 46 years, to a new home. For most people its just another office move. Perhaps they are perturbed by the longer (or shorter) commute for them. Perhaps they are more concerned with the parking. Some are, no doubt, measuring whether the size of their room (or cubicle) is as big as what they had in the previous place. This writer is not part of this move. But that hasn’t stopped him from waxing nostalgic – my good friend Ravi accused me of being a die hard romantic in his comment in my previous post. I’m still tickled pink by that sobriquet, and hence continuing in that ...

Goodbye Zhang ; as the title says , this is a farewell post for Zhang Dan, my wonderful Chinese teacher. This week, I had my last class with Zhang, a moment tinged with some sadness. For she leaves next week to study in the UK. She hadn’t expected this to happen, but an opportunity came and it all worked out. So off she goes. Some months ago, I had gathered courage to attempt to learn Chinese. I was met by a young, earnest girl, who was to be my teacher. She was a post graduate student at the university and this was her first attempt to teach Chinese to a waiguoren (foreigner). Now the Chinese word for teacher is laoshi; the prefix lao stands for old age. It is assumed that the teacher will be an elderly person and the student somebody much younger. But here the tables were turned- she is a young girl and I am (ahem) just a tad older ! But what a teacher she proved to be. I’ve rarely seen anyone who’s so obviously born to the profession. She loves teaching she says and it showed every ...

It had to come. The backlash against the banks was long overdue after the mayhem of the financial crisis of last year. It took the Massachusetts election result, where Ted Kennedy’s seat was won by a Republican (yes the liberal bastion of the US actually voted Republican) to trigger it. This blogger is a staunch and unabashed votary of free trade, capitalism and the efficiency of markets. This post, which might seem to back a populist move is actually championing the cause of capitalism, although it might appear at first sight to be arguing against it. The fundamental problem of the financial crisis was the too big to fail theory. The institutions in trouble were too big to be allowed to go bust. Therefore, however crazy their actions were, they had to be bailed out , primarily by the US government, for the consequences of not doing so would have been worse. This must not be allowed to be repeated. Nobody should be allowed to become so big that irrespective of whatever they do, they ca...

Its difficult to reconcile to the way the Kraft Cadbury deal finally ended (the deal got done today). Not the outcome – M&A transactions like this happen all the time. But the way it happened makes me reflect if unbridled capitalism is really a good thing. My ire is on the hedge funds – they are no different to a herd of vultures which circle over an animal that’s about to die. When there’s a whiff of a M&A transaction, the hedge funds pile in to buy the shares of the target, hoping to make a killing . This is what happened in the Alcon transaction about which I posted here . Somebody tell me how what happened in the Cadbury case is reasonable by any yardstick. Here’s what happened. When the first whiff of a possible takeover of Cadbury was in the air, the hedge funds bought heavily into Cadbury shares. They then drummed up noise that Kraft’s bid was inadequate and it had to raise the price. They kept making this noise and were prepared to play brinksmanship. Till virtually yes...

SF Sketchfest is underway, and that means soon The Business will be too! Our two Sketchfest shows are this week: Thursday the 21st and Friday the 22nd! Thursday will most resemble a normal Business show, and Friday will find us sharing the bill with some lovely out of town sketch groups who will not disappoint. That being said, Thursday will also mark the return of Bobby Joe Ebola and the Children MacNuggits to The Business, and possibly some fantastic drop-in guests. If you came to our New Year's Eve Eve show, you know we were joined by Moshe Kasher and Todd Barry, and it was a hell of a show. You can get tickets here: http://www.brownpapertickets.com/event/92762 BONUS: If you come to one of our Sketchfest shows, we will give you a coupon for FREE admission* to another Business show! You can't lose! *Fine Print: Free admission coupon redeemable to any normal Business show happening in February 2010 or beyond. Not applicable to either of our Sketchfest shows. Normal Busi...

Caveat Emptor , or let the buyer beware, is a fundamental law in property buying and selling. The buyer is expected to make enquiries and be sure that he is getting what he thinks he is getting. Once the sale is done, he cannot moan about defects that he subsequently finds out. These days the principle is better deployed in financial transactions. Banks and finance companies spin a complex web around even seemingly simple products. For the mathematically challenged, like yours truly, this is a landmine waiting to explode. Take the case of an apparently new innovation – teaser home loans. These are loans where the interest rate is fixed at a very attractive rate for a pre determined period and then made floating plus margin thereafter. Buyers are enticed by the low initial rate and don’t realise the consequences of a subsequent high floating rate. Once hooked by the teaser, they are sunk. Buyers certainly deserve their misfortune if they jump into something blindly. If 2+2 is a very co...

A dear friend posted in her blog, a couple of days ago, something that brought a lump to my throat. She’s a brilliant professional – great academic track record (a national gold medalist, no less), top drawer performer, highly regarded in her company. And yet she faced the same choice that confronts every Indian career woman – family or career. As 90% of Indian woman do, she chose family. She passed up an opportunity for career advancement. Others applauded her for her “sacrifice”. But as you can imagine, her heart was heavy. And she wrote this wistful post, which continues to tug my heart. I won’t link her post, as she may not want it to be too public, but you can more or less guess what it would be. Another dear friend, wrote this sometime ago. The blogosphere, and terra firma, is full of such situations. This is something that confronts every single Indian middle class woman who has a career interest. In many cases, their husbands are incredibly supporting. They are not MCPs – the...

Inflation, of any sort, is bad. Some stability in prices, is necessary for orderly economic activity and for growth. Countries which have experienced hyper inflation recall it with absolute horror. But the most awful form of inflation is when there is huge inflation in food prices. In non food products, one can curtail demand if prices rise. But what do you do with food ? After all, you have to eat. In the last few months, food prices in India have gone through the roof. If you are living in India, you are experiencing it first hand. If you are abroad, you would have surely heard about it. The official food price inflation figure is 20%. In many key food items, the inflation has been much higher than that. The first hint came in pulses, a vegetarian Indian’s main source of protein. A kilo of arhar dhal (pulses) has apparently touched the unbelievable level of Rs 100/kg. Then came vegetables. Onions at Rs 35/kg, potatoes at Rs 40/kg, and so on. Sugar is now at Rs 50/kg. Name a food ite...

Don’t cry for me Argentina, could very well be refrain of Martin Redrado, the governor of the central bank of Argentina. He was dismissed by the President Cristina Fernandez a couple of days back, only for the courts to reinstate him and rule the President’s action unconstitutional. At heart is the issue of the independence of the Central Bank. In many countries, including Argentina, the Central Bank is supposed to be independent of the government. This enables it to follow the right, and long term, stable monetary policy without political interference. Governments don’t like it as they like central banks to do what they want them to do. The problem in Argentina is that Cristina Fernandez would like to use the reserves of the central bank to pay down the debt of the government. The central bank is refusing to do this. So she thought she could sack the governor and replace him with somebody more pliable. Its rebounded on her because of the court’s decision. The problem is always the te...

Your name is something you are born with ; unless you take the trouble of changing it later on in life. The vast majority of us grow to like our name and keep it. But consider the unfortunate few, who have been named rather quixotically by their parents. Why on earth parents do that is not clear, but do it, they sometimes. Imagine if you are named Adolf Hitler or Idi Amin. Thankfully there’s a law in many countries preventing parents from giving their children obviously crazy names. That, of course didn’t prevent a certain Indian politician from naming his son Stalin. Considering that knowledge of recent Russian history is not the strong point of the place he lives in, we’ll let that pass. But what about Justin Case or Barb Dwyer. Or Stan Still or Barry Cade. Or amongst the ladies Anna Sasin or Rose Bush . Or Jo King or Carrie Oakey. Sometimes your name gets you into trouble because of your job. Susan Frame is a perfectly acceptable name. She then married a Robert Mee and became Sus...

A curious side show to the Alcon deal that I blogged about in my previous post is the treatment of minority shareholders. You may recall that Novartis bought 52% of the shareholding in Alcon, from Nestle, at $180 per share in cash. It had already held 25% bought from Nestle earlier. So it now has 77%. The balance 23% is held by minority shareholders as Alcon is listed in the US. Novartis has now offered $153 dollars to the minority shareholders, in its own shares (not cash as was paid to Nestle). The minority shareholders are crying foul. Alcon is a Swiss based company and dictated by Swiss Corporate law. Swiss law does not require minority shareholders to be paid the same amount as the majority shareholders in an acquisition. Most other countries in the world have this provision. Switzerland does not. That’s why Novartis can do what its trying to do. On first glance this would seem to be an abuse of minority shareholder rights. But wait a moment. Its not so black and white. The “min...

There are some companies famously long term in their outlook. Warren Buffet’s Berkshire Hathaway is a famous example. Another company in the same league is Nestle. Nestle , as everyone knows, is a food company. However, the way they dealt with two pieces of their portfolio that has nothing to do with food, is very demonstrative of their long term approach. One is Alcon, an eyecare business. In 1977, Nestle acquired Alcon as part of a diversification outside their traditional food business. They bought this at that time of $280 m. Run professionally for two decades and more. In 2002, they decided to start selling it off ; so they floated 23% of the company for $33 per share. They were subject to wild criticism from the pundits for not selling off the whole company. To their credit, they didn’t listen to all the noise. Then in 2008 they sold another 25% of the stake to Novartis for $143 a share. Yesterday, Novartis bought out the balance stake for $181 per share. So bought in 1977 for $...

In India, regional disparities in growth and poverty alleviation are well known. In general, the more western and southern a state is, it is much better off. And the more eastern and northern the state is, it is in doldrums. So says conventional wisdom. Well, not any longer. The economic growth of states over the last five years has just been published, and has been seized by the media and reported widely. So pardon me, if you have read this before. But its such a compelling story that it needs telling. There were two states that grew by 11% , each year, over the last five years. One of them is no surprise, Gujarat. But the other will take your breath away. Its Bihar. Bihar was, jointly with Gujarat, the fastest growing state in India over the last five years. Pause for a moment and reflect on this number. Eleven percent per annum GDP growth. It’s a stunning performance by any standard, anywhere in the world. Breathtaking. And Bihar is not the lone surprise. Uttaranchal & Orissa g...

Man is a territorial animal. His natural preference is to live with the group that he belongs to. But for two reasons, people choose to live away from their natural communities. The first, and the biggest, reason is economic. The second is political. I would guess that 90% of migrants are economic – they move to earn more money; to have a better life. Even where people ascribe other reasons, the real underlying cause is economic. The Economist , my favourite magazine, put it beautifully. A journalist was covering the regular anti America rallies in Iran. Death to America, Death to America, the chants were going on. A protester paused in mid chant to ask the journalist – “can you get me a green card” ! Earlier in the week, I had posted about the The Economist’s brilliant article on “being foreign”, here . This post is my personal view on being an expat. The sheer experience of being an expat is enormously enriching, both professionally and personally. Professionally, it is an experience...

Efforts to professionalize journalism began early in the twentieth century as a response to the hyper commercialization of newspapers and the “anything goes” approach to news that emerged in the late nineteenth century as a means of increasing street sales through sensationalism, twisting the truth, and outright lies. The impetus for journalistic professionalism originated among publishers who wish to counter the trend and it gained support of journalists who saw it as a means of improving their working conditions and social standing. Journalism training and higher education programs, professional societies for journalists and editors, and codes of ethics and conduct emerged as part of professionalism. These promoted the core values of accuracy, fairness, completeness, and the pursuit of truth. These efforts improved industry practices, pushed out the worst journalists and publishers, and creating some trust in the content of news. They also created environments in which advertisers we...