What is Human Resource Management

Human Resource Management is the planning , organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of Human Resources to the end that individual, functional, organizational and societal objectives are accomplished" (Edwin B. Flippo,1984)
 
Scope of Human Resource Management (HRM): All major activities of an employee from the entry to  the exit come  under the purview Of Human Resource Managament
  • HRM planning
  • Job analysis & design
  • Recruitment & selection
  • Orientation/induction
  • Training & Development
  • Performance Management
  • Remuneration & benefits
  • Motivation & Retention
  • Welfare and  safety
  • Industrial Relations  etc

- Contributed by Vaibhav Agarwal

E-LUXURY

Written by: Nithin Narayanan

Internet has increasingly playing a greater role in the retail sector worldwide. Now luxury brands have also hopped on to the bandwagon. One thing that luxury products or retail stores need to exuberate a sense of exclusivity. Earlier this was done by meticulously designing each store. But internet was avoided by luxury brands before but now they can't do so anymore.

Internet is truly a democratic medium every one can express their opinion. To create Exclusivity in such a medium is an uphill task. Many brands do not offer their customers facility to buy merchandise online. The reason behind this is still unknown. Customers are buying more items online than before. It may not be true in developing countries, but this trend is fast catching up.

One major hindrance that luxury brands face is that customers are still price sensitive online. They are primarily so called 'Bargain Hunters'.


But there is a niche market for luxury goods on the web. Websites of Giorgio Armani and LVHM have facility to purchase their goods online. Now fashion shows across the fashion capitals are made available online live.

Internet is fast changing. There is a generation that growing up which does not know a world without ipod or Facebook. Hence to cater to future customers brand presence online is crucial.


In developing countries like India retail rentals have touched the sky. Many stores of international brands which have JVs with domestic companies are unable to sustain operations and have shut quite a few numbers of stores. Retailers cant Break-Even, even after a good number of months of operation. In such a scenario internet is a viable option in this high costing time for business.

Tata-Jaguar deal: Timeline of the Historic deal

2005
-
Ford starts facing problems with pension and health care costs and falling sales in North America.
Starts reporting losses from the second quarter
2006
-
Alan Mullaly takes over as chief executive and oversees a $12.7 billion loss, the largest in the
company's history Ford decides to sell its Aston Martin brand
May, 2007
-
Ford closes the Aston Martin sale for $848 million
 
June, 2007
 
-
Ford indicates that it might look at buyers for Jaguar and Land Rover marques
 
July, 2007
 
-
Ford receives preliminary bids for the brands. Reports say that TPG Inc., Cerberus Capital Management Lp. Ripplewood Holdings, One Equity Partners Llc are in the fray, along with Tata Motors
Ltd and Mahindra & Mahindra
 
August, 2007
 
-
Ratan Tata, chairman of Tata Motors Ltd, confirms that his company was bidding for the premium car
makers
November, 2007
 
-
Investment bankers say that Apollo Alternative Assets is teaming up with Mahindra & Mahindra
Reports say that Ford has shortlisted three bidders—Tata, Mahindra and One Equity—for further negotiations with its trade unions Unite, the trade union representing Land Rover and Jaguar workers, says it supports Tata Motors' bid
 
December, 2007
 
-
The three bidders submit their bid
 
January , 2008
-
Ford names Tata as "preferred buyer"
 
March, 2008
 
-
Tata, Ford sign deal

- Contributed by Vaibhav Agarwal

Making effective cross-border teams

In an increasingly multi-cultural business environment, one needs to create effective global business teams to make mergers and acquisitions work

Case: Merger of Arcelor and Mittal Steel ( 2006 ) creating world's first truly global steel company with operations in four continents.
An immediate effect of the merger was to give the combined company
  • Greater resources
  • Larger market share
  • More production facilities
  • Wider footprint
  • More research and development centres
  • More distribution outlets.
However, none of these opportunities to create value can be realized without establishing dozens of global business teams (GBTs).
GBTs 
  • Cross-border teams of individuals of different nationalities, working in different cultures, possibly in different businesses and across different functions
  • The individuals come together to coordinate some aspect of the multinational operations on a global basis.
  • Can be given different names:
    • Global management committees
    • World business boards
    • Global product councils
    • Global launch teams
    • Global quality task forces
    • Global supply chain teams
    • Global purchasing forums
    • Global strategy teams
  • Central role: Coordinating and integrating mechanisms
Global business teams also present certain major challenges as compared to business teams in general:
  • Constituent individuals are separated not just by geographic distance but also by cultural and linguistic differences.
  • Communication barriers exist.
  • Developing mutual trust is difficult.
  • Overcoming communication barriers among team members can be much more challenging in GBTs as compared with business teams in general. 
The performance of any global business team is a function of correct choices and decisions in three areas:
  1. Team charter : 
  2. Team composition
  3. Team process.
Team charter
 
3 key questions to address:
  1. Is the charter defined correctly?
  2. Is the charter framed correctly?
  3. Is the charter clearly understood?
Consider, for example, a cross-border R&D team set up by a globalizing auto company. Depending on the specifics of the brand and product portfolio, one could imagine radically different charters for such a team:
  • Consolidate all R&D into one location
  • Create differentiated centres of excellence in three locations, or
  • Do not interfere in the existing R&D centres but create mechanisms such that each centre can learn from the others.
These are very different team charters.
  • A team whose charter is "mis-defined" is doomed from the start. 
  • It should be framed in such a manner that team members always have clarity about how achieving the goals will make the company's products and services more attractive to its customers and stronger vis-à-vis competitors.
  • Even in non-zero-sum situations (as is the case with most GBTs), there will always be tensions between the priorities of different units. Framing the charter in terms of external wins makes it easier for GBT members to deal with these tensions more constructively. 
  • The team charter must be communicated repeatedly to the team members and to others in the broader corporate eco-system. Given geographic, cultural, and linguistic distance, there is always a risk that people may forget the original reasons why the team was created in the first place.
Team composition

There are five requirements relating to team composition:
  1. In order to get the job done, the team must include people who possess information critical to the team's task as well as those who will play a critical role in implementing the recommendations. 
  2. If at all possible, the team should include at least some people who have worked with each other in the past and who have experience in working across cultures. Prior collaborative experience on the part of some team members can help to minimize the emergence of trust and communication problems. 
  3. The team size should be manageable, that is, ideally not more than 10-12 people per team. If the team needs to be larger, it may be useful to consider the creation of a smaller core team and a broader extended team. 
  4. The team should be led by an individual who has the substantive skills and power to help drive concrete decisions and recommendations as well as the social skills to minimize emotional conflicts. If the team leader is not skillful at doing both tasks, then he/she should consider appointing an associate team leader with complementary skills. 
  5. The team must be in a position to have a widely recognized senior-level political sponsor who can hold the team accountable to deliver on its assigned task as well as "run interference" on behalf of the team vis-à-vis the rest of the organization.
Team process

The three key elements of team process are:
  1. Ensuring goal alignment
  2. Reducing communication barriers
  3. Building trust
1. Goal alignment problems: Can be minimized by ensuring that there is a strong linkage between team performance and the rewards and/or recognition earned by team members.
 
2. Communications problems : Can be reduced by:
  • Investment in language and cross-cultural training
  • Use of high-fidelity communications technologies (such as high-quality video conferencing rather than just email)
  • Prior agreement regarding norms of communication
  • A bias for data-driven decisions
  • Analysis of multiple alternatives (to prevent pre-mature closure towards one side's recommendations)
  • Rotation of the meeting location to the sites of various team members. 
3. Cultivating trust:  Trust can be cultivated among geographically dispersed team members by:
  • Development of greater inter-personal familiarity and social bonds
  • Respect for local times and holidays
  • Explicit norm that people should say what they mean and mean what they say.
  • It is inevitable that cross-border business teams will have to rely heavily on technology-mediated virtual communication. However, research has confirmed that virtual interaction flows more smoothly when the team members also meet with each other in face-to-face contexts and develop social bonds that go beyond mere official roles.
It is clear that global business teams are emerging as the single most powerful and ubiquitous tool for integrating the global enterprise. However, despite their criticality, they also present major challenges. As discussed above, systematic design and management of GBTs can go a long way towards increasing the odds of success.
 
- Contributed by Vaibhav Agarwal

Consumerism in India

Written by: Nithin Narayanan

 
India's large youth population is driving the consumerism trend in the country. For the youth shopping is just not a necessity but a leisure activity. Also more disposable income and more number of persons working in families have also contributed to this trend. The good news is that Indian consumerism is yet to attain maturity. But the catch here is society has a whole believes in saving rather than spending.

 
A liberalized economy has open doors to MNCs, and all the companies have successfully adapted their products or their marketing communication or in some cases both to the local conditions and preferences. Like Mac-Donalds, Pizza- Hut, Maggi - the noodles tastes different in every country. I had the pleasure to have Maggi noodles of different regions; I must tell you it does taste different.

 
Organized retail formats have also contributed to the spending spree in the country. One myth is that Indian consumers are price sensitive. It is partly true, yet it is fast changing. FMCGs or fashion brands have all above average pricing, but in spite of this, these companies have gained profit from operations in the sub-continent. We need value for money and this is misinterpreted quite a few times.  But certain conditions such as high inflation which is prevalent here right now, hinders the new found consumerism confidence.

 
Well thinking global and acting locally works very well here. The Bharatiya or the Indianness is crucial to the people and this is precisely what companies are cashing in on. One needs to see how this strategy would work in the future as the socio- economic scenario is fast changing here in India.

 

Hyundai to mass produce Hybrid cars in 2009

  • Hyundai Motor (South Korea's top car maker)  would begin mass producing hybrid cars next year amid growing demand for fuel-efficient and environmentally friendly vehicles. 
  • The first mass produced model will be a compact sedan, known as "Avante".
  • The hybrid models will then expand into mid-size vehicles in 2010, with fuel-cell cars also being produced in 2012.
  • Hyundai has produced about 2,800 compact hybrid cars since 2004, largely for government agencies.
  • Japan's Toyota Motor has dominated the global hybrid car market. 
  • Global demand for hybrid cars is rapidly growing, with 390,125 units sold in 2006 and 517,911 last year. The figure was likely to grow to 750,000 this year and more than a million by 2010.

- Contributed by Vaibhav Agarwal

Credit Card use rising steeply in India

  • Credit cards increasingly being used for grocery shopping, paying phone and electricity bills and other expenses.  
  • According to Viney Singh, MD of Max Hypermarkets, when they launched their hypermarket, the credit card usage accounted for 40% of our sale value. In the succeeding five months, this had touched 50% and they see usage growing every month
  • To consumers, cards are a combination of convenience ( not having to visit ATM's to withdraw money) and rewards (from various loyalty programs). 
  • With credit card becoming easily accessible, aggressively marketed financial product, the consumer base and consequently, the usage has increased tremendously.
  • Over the last three years, the credit card industry in India has grown at a compounded average growth rate of over 30%.
  • The usage of credit cards at retail outlets has nearly doubled — from 30%-35% two years ago to 50%-60% - Nirupam Sahay, VP (marketing), SBI Card. 
  • The transaction value of credit cards also has dropped and the usage has become more casual.
  • Credit cards are typically used for purchases above Rs 1,000. But nowadays people have started using them for even around Rs 500 - Krishnan Govindan, head (marketing), credit cards, ICICI Bank. 
  • Petro cards are among the most popular.
  • The departmental store category along with fuel and restaurant spending account for the most frequent swipes.
  • In terms of value, jewellery, electronic goods and telecom account for a major chunk

- Contributed by Vaibhav Agarwal

General Motors to enter the "low-cost car" war

  • General Motors has decided to make a pitch in the low-cost car segment
  • Plans to roll out a mini car priced between $3500 and $4000 (Rs 1.4-1.6 lakh approximately) in India ( cheaper than the Maruti 800, little dearer than the Tata Nano (approx. $2500) )
  • 'Chevrolet Spark' is the company's current cheapest model in India costs about $7,000 (Rs 2.8 lakh)
  • The car would also be pitched in other regions like Latin America, Eastern Europe, Africa and "possibly China". 
  • Looking at a minimum production capacity of 200,000 units.
  • To be manufactured in India.
  • India advantage
    • Indian engineers have "first-hand direct knowledge" of such products.
    • A good supplier base
    • Low distribution, marketing and advertising costs in India 
  • The company would look at some common component sourcing between the proposed low-price car and some of the other cars to help keep overall component procurement costs low as they may source as many as half-a-million units from a particular supplier to be used across models, including the low-price car
  • The company's design, engineering and R&D set-up at Bangalore will also play a major part in the car's development.
  • Production could be at the company's upcoming plant at Talegaon in Maharashtra.
- Contributed by Vaibhav Agarwal

   
 
 

Reverse Logistics

Written by: Nithin Narayanan

The concept of reverse logistics has come to prominence in the past few years. Reverse logistics is to facilitate return of unwanted or defective merchandise. This kind of service was considered to be a differentiator in the retail scenario. Those retailers who did not provide their consumers with this kind of facility, found themselves loosing to the competition.

 

This kind of return facility is a standard norm, but it was not the case earlier. As the cost of reverse logistics kept rising, the significance of returning the returned merchandise again into the market becomes inevitable. In this regard, the time to place the product again into the market is important. This speed of return is also related to the resale value of the merchandise.

 
In order to save up time and reduce cost, manufacturers began to consolidate parts of the merchandise and materials in the same ware house as the returned warehouse. This co -operative effort by all departments and verticals will reduce cost eventually. But in some cases these products are used as a source of spare parts which is used for warranty repairs.

 
There are still large companies which spend millions of dollars in creating a inventory pool of spare parts in order to carry out repair functions. This ignorance to reverse logistics could be fatal in a long run to the companies as profit margins are declining every quarter.

 

With regard to Electronics and computer products, the Reverse logistics handling are made complicated by regulations like ROHS, WEEE, controls on Lead and Mercury materials

 
 Firms are waking up to the concept of Reverse logistics, but in today's competitive and rapidly evolving scene and mass production it is necessary to have a consolidated and pragmatic approach to the Supply chain as well as Reverse logistics.

 

 

The GoldVish ‘Piece Unique’ mobile phone

 
  • World's most expensive mobile phone (according to Guinness Book of Records)
  • Costs $1.6 million
  • Range offers five different diamond upgrades made of at least 150 grams of 18-carat solid gold and mounted with diamonds

- Contributed by Vaibhav Agarwal

Films and Retail

Written by:Nithin Narayanan


Retail here in India is going through tremendous changes. As any where in the world fashion is an important part in this industry. Demand for swanky clothes and accessories are on the rise and to cater to this demand. This fashionable attitude has given birth to high end fashion retail.

 
Film is the first medium where latest trends are experimented on protagonists and this later paves way for a particular trend to set in within the society Every teenager wants to look like the actors in these films. This is exactly the need which is satisfied by the fashion retailers and designers. Films like Om Shanti Om, Kkrish have all have entered retail market. Now one can adorn attires based on the film and also buy the merchandise which acts as movie memorabilia for millions of fans across the country.

 
Designers like Manish Malhotra , Ritu kumar etc. have all made their mark in the film industry. Designers not only design costumes for movies, but also tie up with retail chains to market the trend. This serves two purposes. One it markets the film and the second promotes the look or the fashion in that film. This kind of promotion is supported with events like fashion shows which market the new trends in fashion. Today's fashionable crowd does not mind spending more as long as they are in sync with the current trend and also enhance their fashion quotient. 

 
With luxury retailing poised to grow further, a marriage between retail and films will take the industry to a whole new level in the coming years.

List of World's billionares 2008 by Forbes


#1 Warren Buffett

Age: 77
Fortune: self made
Source: Berkshire Hathaway
Net Worth: $62.0 bil
Country Of Citizenship: United States
Residence: Omaha, Nebraska , United States, North America
Industry: Investments
Marital Status: widowed, remarried, 3 children
Education: University of Nebraska Lincoln, Bachelor of Arts / Science
Columbia University, Master of Science
America's most beloved investor is now the world's richest man. Soared past friend and bridge partner Bill Gates as shares of Berkshire Hathaway climbed 25% since the middle of last July. Son of Nebraska politician delivered newspapers as a boy. Filed first tax return at age 13, claiming $35 deduction for bicycle. Studied under value investing guru Benjamin Graham at Columbia. Took over textile firm Berkshire Hathaway 1965. Today holding company invested in insurance (Geico, General Re), jewelry (Borsheim's), utilities (MidAmerican Energy), food (Dairy Queen, See's Candies). Also has noncontrolling stakes in Anheuser-Busch, Coca-Cola, Wells Fargo. Insurance operations flourished in 2007. "That party is over. It's a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008." The Oracle of Omaha issued a challenge to members of The Forbes 400 in October; said he would donate $1 million to charity if the collective group of richest Americans would admit they pay less taxes, as a percentage of income, than their secretaries. Had long promised to give away his fortune posthumously. Irrevocably earmarked the majority of his Berkshire shares to charity in 2006, mostly to the Bill & Melinda Gates Foundation. Gift was valued at $31 billion on day of announcement; donation will far exceed that sum so long as Berkshire shares continue to rise.

#2 Carlos Slim Helu & family

Age: 68
Fortune: self made
Source: telecom
Net Worth: $60.0 bil
Country Of Citizenship: Mexico
Residence: Mexico City , Mexico, Latin America
Industry: Communications
Marital Status: widowed, 6 children
Education:
Second-richest man in the world this year; even richer than Microsoft's Bill Gates, at least for now, thanks to strong Mexican equities market and the performance of his wireless telephone company, America Movil. The son of a Lebanese immigrant, Slim made his first fortune in 1990 when he bought fixed line operator Telefonos de Mexico (Telmex) in a privatization. In December, America Movil struck a deal with Yahoo to provide mobile Web services to 16 countries in Latin America and the Caribbean. A widower and father of six, Slim is a baseball fan and art collector. He keeps his art collection in Mexico City's Museo Soumaya, which he named after his late wife. In recent years, he has donated close to $7 billion worth of cash and stock to fund education and health projects, and to the revitalization of Mexico City's downtown historical district.

#3 William Gates III

Age: 52
Fortune: self made
Source: Microsoft
Net Worth: $58.0 bil
Country Of Citizenship: United States
Residence: Medina, Washington , United States, North America
Industry: Software
Marital Status: married, 3 children
Education: Harvard University, Drop Out
Harvard dropout and Microsoft visionary no longer the world's richest man. Blame Yahoo: Microsoft shares have fallen 15% since the company boldly attempted to merge with the search engine giant to better fight Google for Internet dominance. Gates is preparing to give up day-to-day involvement in the company he cofounded 33 years ago to spend more time focused on his philanthropic endeavors. Bill & Melinda Gates Foundation has $38.7 billion in assets, donates to causes aimed at bringing financial tools to the poor, speeding up the development of vaccines (for AIDS, malaria, tuberculosis), bettering America's lagging high schools. Sells 20 million Microsoft shares every quarter, proceeds going to private investment vehicle Cascade; more than half of net worth now outside of Microsoft. Company spent $6 billion to land Web ad firm Aquantive last May. Would-be rival to Apple's iPod, the Zune, not yet a hit. Believes Microsoft's far-flung bets, including 10-year affair with Internet-based television, may soon pay off; says next 10 years will be the "most interesting" in software history.

#4 Lakshmi Mittal

Age: 57
Fortune: inherited and growing
Source: steel
Net Worth: $45.0 bil
Country Of Citizenship: India
Residence: London , United Kingdom, Europe & Russia
Industry: Manufacturing
Marital Status: married, 2 children
Education: St Xavier's College Calcutta, Bachelor of Arts / Science
Heads world's largest steelmaker, $105 billion (sales) ArcelorMittal, which accounts for 10% of all crude steel production. Just delivered 580 tons to be used in construction of the World Trade Center memorial in New York. With 44% stake, is the company's largest shareholder. Longtime resident of London is Europe's richest resident.

#5 Mukesh Ambani

Age: 50
Fortune: inherited and growing
Source: petrochemicals
Net Worth: $43.0 bil
Country Of Citizenship: India
Residence: Mumbai , India, Asia & Australia
Industry: Manufacturing
Marital Status: married, 3 children
Education: University of Bombay, Bachelor of Chemical Engineering
Stanford University, Master of Business Administration
Asia's richest resident heads petrochemicals giant Reliance Industries, India's most valuable company by market cap. His fortune is up $22.9 billion since last year, making him the world's second biggest gainer in terms of dollars. The biggest gainer was his estranged brother Anil, who ranks 6th in the world just behind his older brother. The sons inherited their fortune from their late father, renowned industrialist Dhirubhai Ambani. But they couldn't get along and in 2005 their mother brokered a peace settlement breaking up the family's assets. Mukesh is using some of his money to build a 27-story home.

#6 Anil Ambani

Age: 48
Fortune: inherited
Source: diversified
Net Worth: $42.0 bil
Country Of Citizenship: India
Residence: Mumbai , India, Asia & Australia
Industry: Diversified
Marital Status: married, 2 children
Education: University of Bombay, Bachelor of Arts / Science
University of Pennsylvania Wharton School, Master of Business Administratio
The year's biggest gainer, Anil Ambani, is up $23.8 billion in the past year, and is closing gap with estranged brother, Mukesh, who ranks one spot ahead of him in the world at number five. The sons inherited their fortune from their late father, renowned industrialist Dhirubhai Ambani. But they couldn't get along and in 2005 their mother brokered a peace settlement breaking up the family's assets. A marathon runner, his biggest asset is his 65% stake in telecom venture Reliance Communications. He recently raised $3 billion from the highly anticipated initial offering of his Reliance Power, the biggest in India's history. Despite the hype, the stock tumbled 17% immediately after its February listing. In a bid to appease investors, company's board recently approved the issue of bonus shares. Still feuding with brother Mukesh: battling him in court over a gas-supply agreement.

#7 Ingvar Kamprad & family

Age: 81
Fortune: self made
Source: Ikea
Net Worth: $31.0 bil
Country Of Citizenship: Sweden
Residence: Lausanne , Switzerland, Europe & Russia
Industry: Retailing
Marital Status: married, 4 children
Education:
Peddled matches, fish, pens, Christmas cards and other items by bicycle as a teenager. Started selling furniture in 1947. Now his company Ikea, which sells hip designs for the cost conscious, is one of the most beloved retailers in the world, with an almost cultlike following. Ikea now has stores in 40 countries, from Sunrise, Florida, to Guangzhou in China. As egalitarian as his brand, Kamprad avoids wearing suits, flies economy class and frequents cheap restaurants. Has been quoted as saying that his luxuries are the occasional nice cravat and Swedish fish roe. Says his home is furnished mostly with his own Ikea products. Last May was awarded the Global Economy Prize by the University of Kiel for his contributions to society.

#8 KP Singh

Age: 76
Fortune: inherited and growing
Source: real estate
Net Worth: $30.0 bil
Country Of Citizenship: India
Residence: Delhi , India, Asia & Australia
Industry: Real Estate
Marital Status: married, 3 children
Education:
Singh is now the world's richest real estate baron after listing his real estate development company DLF in 2007. The offering helped triple his fortune to $30 billion this year, up from $10 billion. A former army officer, known as K.P., he joined his father-in-law's Delhi Land & Finance in 1961. Singh later built DLF City in Gurgaon, his showpiece township on the outskirts of Delhi, by acquiring land from farmers. Over time, he transformed it into one of India's biggest real estate developers. Group plans to raise another $1.5 billion by listing a subsidiary in Singapore. A keen golfer, he now leaves son Rajiv, daughter Pia to run operations.

#9 Oleg Deripaska

Age: 40
Fortune: self made
Source: Russian Aluminum
Net Worth: $28.0 bil
Country Of Citizenship: Russia
Residence: Moscow , Russia, Europe & Russia
Industry: Diversified
Marital Status: married, 2 children
Education:
Former metals trader survived the gangster wars in the post-Soviet aluminum industry. His holding company, Basic Element, now owns Russian Aluminum (UC Rusal), automobile manufacturer GAZ, aircraft manufacturer Aviacor and insurance company Ingosstrakh. In 2006 Rusal, SUAL and Glencore International, of Switzerland, merged their aluminum assets into the United Company Rusal, the world's largest aluminum producer. Married to a relative of Yeltsin, Deripaska has been busy expanding UC Rusal's activities in Russia and abroad, moving it into aluminum production in Nigeria and China. To integrate vertically, has signed agreements to produce coal in Kazakhstan and invest in a nuclear power plant in eastern Russia. Attempting to get a stake in Norilsk Nickel, which co-owner (and fellow billionaire) Vladimir Potanin is fighting.

#10 Karl Albrecht

Age: 88
Fortune: self made
Source: Aldi
Net Worth: $27.0 bil
Country Of Citizenship: Germany
Residence: Mulheim an der Ruhr , Germany, Europe & Russia
Industry: Retailing
Marital Status: married, 2 children
Education:
Germany's richest man. After World War II Karl and his younger brother, Theo, developed their mother's corner grocery store into discount supermarket giant Aldi, which now has more than 8,000 stores and $67 billion in sales. They eventually split ownership and management of the chain into North and South regions. Now retired, Karl used to manage more profitable southern half of Aldi's business in Germany. Fiercely private: Little known about him other than that he apparently raises orchids and plays golf.

- Contributed by Vaibhav Agarwal



Why the Retention clause for IT firms

Why the clause?
Clients are not willing to accept excuses about project delays on account of attrition. Nor are they willing to foot financial losses resulting from delayed delivery.
What is the clause
To make enterprises responsible for retaining people/teams working on the client's projects. Failing that, they would attract a financial penalty.
A usual retention clause would include:
  • Clients and providers agree on a minimum retention of 85% of those on a project for 18 to 24 months.
  • Any break in this could attract a financial penalty amounting to 10% of the monthly invoice.
  • The providers are also obligated to keep their clients posted on any possible exit of anyone in the team and what would be the alternative arrangements.
Effects
Apart from improving on the quality and schedules of deliverables, it will also reduce practice of internalpoaching — shifting people from a dedicated project to unrelated projects.
- Contributed by Ankita Sinha

The power of C2C Marketing

A prospect approached me early one morning at a trade show and asked about our product. Caught off guard and not being the greatest sales person (are all marketers bad sales people?!), I stumbled a bit, trying to deliver the tried and true spiel; but I could see the "glaze" forming over the prospect's face.

Just then, a client stopped to say hello. I introduced my new acquaintance and explained the conversation. My hope was merely to buy some time while I came up with the right pitch.

To my amazement, my client launched into the best sales pitch I'd ever heard for our product. The prospect asked some skeptical questions, to which my client responded with spot-on answers backed up by her real-world experience. The prospect later became a convert and it remains my best sales job that I had nothing to do with.

Turn your customers into your sales person. This unique technique makes you do just that by making your exististing customers testify your products for your prospects.
 
Though there is no really practical way to execute that concept, we all know the power of word-of-mouth, but how do you package it and apply it tactically?

The following 5 steps may be used for successful C2C marketing:

1. Have a good product

Starting an open conversation about your product puts it under a microscope. Every nuance, flaw and perfection – but especially the flaws - will be exposed in extreme detail for all the world to see. You'll learn more about your company, product and message than you ever imagined possible. Bad products or services do not fare well.

2. Seek out those with an interest.

  • The Masses – Presumably, someone out there likes you, or you'd not be in business for long. Find them and find a way to engage them in a public exchange. Online retailers like Amazon have employed the customer review model with great success. Purchasers submit their comments about the products they bought. The online retailer gets hits galore as they become a vast repository of consumer product info. This model may not be suitable for everyone, but the idea is to get your customers talking about things that are important to you.
  • The Opinion Leaders - If you have any sort of mass produced product, chances are the conversation has already begun (if it hasn't, something is wrong). Find those who start and propagate the talk – bloggers, journalists, etc., - because it is very likely that they have more influence over your customers than you ever will. They will give you a quick and accurate synopsis of the conversation so far – often they will do this without being asked.

3. Connect with them.

You could start with a blog; or find online foruma that relate to your company or products; or get onto Youtube, Facebook, MySpace or any of the myriad other social media sites - they have seemingly endless C2C networking and marketing opportunities. Make sure your efforts are not half-baked. The #1 SECRET to successful C2C marketing is to give yourself enough time to do it properly – checking things out once a month won't work. If you start a blog, read and respond to other blogs frequently (daily). Join and contribute regularly (daily) to online forums. Get involved in the conversation on every level possible and as often as possible (daily). Eventually, they will begin to know you exist. It's a lot of work and adjustment, but it will pay off. Just the market research alone is worth the entry fee.

4. Let them do the marketing:

It is important to understand that, even if you reach the lofty goal of becoming an opinion leader, you will have no control over the conversation. However, once the buzz is humming, you have the chance to cultivate sales and marketing opportunities that arise in the conversation – or even create them. There's a trend afoot that must have creative directors quaking in their ergonomic chairs. Content development for some high profile traditional marketing and advertising campaigns is being handed over to consumers and it has proven to be a buzz bonanza for the advertisers. Perhaps most famously, Doritos saw a 12.5% jump in sales when it partnered with Yahoo!Video to sponsor a contest among consumers to create the Doritos Superbowl TV ad for 2007. Of course, bloggers themselves are showing the way when SEOmoz ran a landing page creation competition among members of its online community.

5. Keep giving them something to talk about:

Don't let the conversation die, or even slow down. Other ways to start or continue a buzz on the web? Games and giveaways have always been used to get people talking and online versions can use interactivity to further engage the customer – check the ones by Pepsi on its website. Setting yourself apart, with a new product, package or (gasp!) exemplify customer service, will get fingers tapping to spread the word.

What about the pesky nay-sayers with bad feedback? They too can join your conversation. However, it's nice to have the bad news where you can see it – and, better yet, do something about it. The Dell Community Forum is an example from a company that has had its share of bad buzz (remember point #1).

Whether you call it word-of-mouth, viral marketing or conversation marketing, the value of engaging your customer in a conversation and involving them in your sales and marketing efforts is immeasurable.  
 
- Contributed by Vaibhav Agarwal

Selling OTC Drugs through post offices

Post offices are all set to turn into pharmacies in rural India. In another attempt to offset declining postal revenue, the department of posts has tied up with herbal and medicinal product companies to sell their products at post offices. Tie ups are in place in Andhra Pradesh, Maharashtra and Uttarakhand. Talks are on for similar alliances in other states. In the next stage, Post Offices will stock over-the-counter (OTC) drugs that are sold without any prescriptions.
The proposal to get post offices to sell pharmaceutical products was first mooted by the Organisation of Pharmaceutical Producers of India. The department of post's move will increase the market size and reach. There are about 150,000 post offices, most of which are located in rural India. Importantly, the postal department feels such measures will also help it reduce its revenue deficit. The postal department's revenue deficit for the fiscal 2006-07 was about Rs 1,250 crore and is estimated to be Rs 1,291.34 crore this fiscal.

- Contributed by Vaibhav Agarwal

Selling OTC Drugs through post offices

Post offices are all set to turn into pharmacies in rural India. In another attempt to offset declining postal revenue, the department of posts has tied up with herbal and medicinal product companies to sell their products at post offices. Tie ups are in place in Andhra Pradesh, Maharashtra and Uttarakhand. Talks are on for similar alliances in other states. In the next stage, Post Offices will stock over-the-counter (OTC) drugs that are sold without any prescriptions.

The proposal to get post offices to sell pharmaceutical products was first mooted by the Organisation of Pharmaceutical Producers of India. The department of post's move will increase the market size and reach. There are about 150,000 post offices, most of which are located in rural India. Importantly, the postal department feels such measures will also help it reduce its revenue deficit. The postal department's revenue deficit for the fiscal 2006-07 was about Rs 1,250 crore and is estimated to be Rs 1,291.34 crore this fiscal.
 
- Contributed by Vaibhav Agarwal