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Burger King - killing me softly

Thursday, March 29, 2007 Digg! Add to Technorati Favorites
While reading feeds from 'TIME', the following news item caught my eye-

Burger King Going Cage Free

Turns out that Burger King has committed to begin buying eggs and pork from suppliers that do not keep their animals in cages or crates.

Burger King will also give purchasing preference to poultry suppliers that use or switch to "controlled atmosphere stunning," which animal rights groups consider the most humane way to slaughter poultry.

Hmm...interesting, I suppose that should make the hens, the eggs they lay and the pigs which are consumed by Burger King customers a happier lot. After all they were being tortured and then killed painfully,earlier. Now they will be ecstatic that death will come faster and with much less pain. Hallelujah! Peace be on thee Burger King!

Disclaimer: I am a die-hard carnivore.


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NDTV Profit v/s CNBC TV 18

Wednesday, March 07, 2007 Digg! Add to Technorati Favorites
I watch CNBC-TV18 almost everyday but almost never watch NDTV Profit. Why?

Maybe I have so gotten used to the CNBC format because CNBC was around much earlier than Profit? But is this really true or are there deeper factors at work?

Lately, I have been reading Malcolm Gladwell's 'BLINK' and have been thinking as to how our instincts play a role in us liking or disliking a particular channel or anchor. Is it possible, for instance, that the only reason why I like CNBC more is because its anchors seem to speak English in a more 'comfortable skin' than the NDTV profit anchors? So better format or better analysis (after all both channel share virtually the same 'expert commentators') is just an excuse for my other subconsciously held biases like comfort level of anchors with English that are playing a role?

Come to think of it, I positively dislike some of the NDTV Profit anchors. Although they are as knowledgeable as others, I subconsciously brand them as 'tapori' (street loafers), becau of their rough tough looks. I hate one CNN-IBN (Sister channel of CNBC TV-18) financial analyst because of her accent ( I think she has a fake accent).

In fact , I have branded many NDTV profit anchors in some way as 'fakes' (my pet hate)- since many of them are not as comfortable in their English diction and in finding the right words to say, in comparison with CNBC TV-18 anchors. So in order to mask this dis-comfort, they tend to overcompensate or mask their discomfort (hence the 'fake' tag). But of course, its very easy to catch this discomfort and this makes you uneasy as well. And you don't to squirm watching an anchor struggle with words, do you? You want to concentrate on the markets and the analysis and be comfortable. I think that's why I prefer CNBC TV18...all the anchors they have are 'easy' and 'comfortable' with anchoring and this makes me feel watching them 'comfortable' as well.

Isn't that exactly what Prannoy Roy and Barkha Dutt make you feel, other than the fact that Roy also has 'Gravitas'- a very rare quality amongst anchors?

Wonder how NDTV missed this trick when they recruited NDTV Profit anchors?

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Chidambaram is hooted by India's greedy upper class

Thursday, March 01, 2007 Digg! Add to Technorati Favorites
So the Finance Budget is finally delivered. The stock markets cracked predictably. If you watch CNBC-TV18 and other business channels and listen to their anchors and the experts, you would well be forgiven to believe that the end of the world is nigh. Udayan Mukherjee, the Stocks editor on CNBC TV18, has been frothing in his mouth of anger against Chidambaram. One suspects that it has more to do with the tax that would be levied on ESOPs Udayan has received from TV18, than genuine concern for the Indian economy.

Its amazing to watch how selfish the Indian upper middle class and the rich have become. The mantra is more, more and more. All companies wants tax breaks (the honourable exception being Infosys), regardless of how much they are raking in. Equity investors have lost sight of the fact that they have already received significant largess from the F.M when he cut the capital gains tax to 0- if you invest inn equity for more than a year. If you are a trader- the tax is a measly 20%. But this has been conveniently forgotten and everyone's cribbing about the marginal dividend distribution tax that has been levied. Corporates have forgotten how corporate taxes have beeen reduced to very reasonable levels as have custom and excise duties.

Take Cement sectorr as an example. Cement companies are raking in the moolah at fabulous operating margins of 30 % or more. These companies are more or less monopolies in the region they operate in, and worse, their association is known to act like a cartel- while shamelessly advocating for more sops. Cement prices have increased from around Rs 135-140 to Rs 205-210 per 50 kg bag between December 2005 and May 2006 in the wholesale market and now ruling around the 240-250 levels in Mumbai. So prices have virtually doubled. But the fat cats in the cement industry continue to wail.

I can go on and on....no body seems to like that they haven't got that extra bar of chocolate, while the population which is living at the margins are fighting to survive. The fiscal allocations meant for them in the fields of education, water conservation, agriculture, health has been described snidely in the English Presss as 'Hand Outs', ' Preparation for the next election' and 'Dole'. While the fact that the F.M did not oblige the fat cats once again is being described with words like ' a lost opportunity','insipid budget' etc.

The greedy selfishness behind all this was, ironically, exposed by a well known and well respected analyst and fund manager- Sameer Arora who runs an India fund from Singapore. Sameer said that the finance minister has done nothing to damage growth which in any case is more or less assured, if corporates do what they are supposed to do and therefore its unreasonable to ask more. He advised the rest of the panelists to read the well known book -'Globalization and its discontents'- to become more aware about the realities of today's world around us.

I always had great respect for Mr. Arora as a analyst. But now, I must say, he is a equally good human being.

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Hi5, Fark,Slide,Hot or Not?, Plenty of fish, Suicide Girls - what makes them tick?

Saturday, February 24, 2007 Digg! Add to Technorati Favorites
Some more good stuff from Guy Kawasaki. In this post, he interviews 6 successful entrepreneurs in the online space and they shatter some widely held beliefs about how businesses are born and run.

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Jetblue apologises

Friday, February 23, 2007 Digg! Add to Technorati Favorites
JetBlue, a U.S based airline, is having a torrid time. Thousands of people were stranded ,due to an operational fracas, some of them celebrities (like Tom Peters) and they were not a happy lot. Tom wrote a scathing attack on Jet Blue on his blog.
Jet Blues CEO however wrote a contrite "sorry' letter to is customers and frankly, its a nice one. Whether it nice enough for customers to fly back with Jet Blue- only time will tell.

I can recall a similar incident where a company from India failed big time. ONGC during its mega IPO messed up with its allotment process (or rather its registrar -MCS- did) and played havoc with the money of thousands of people (including me). I dont recall anyone apologising to me for holding my money with them without interest for months : (

But then ONGC never has to fight to get customers to survive....

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Cadbury chocolates - with worm and salmonella flavours !

Tuesday, February 13, 2007 Digg! Add to Technorati Favorites
Remember the Cadbury controversy in 2003 when worms were found in its chocolates? Sales plummeted 30% in India. Since then the company went on a brand building spree, recruited Amitabh Bacchan as its brand ambassador (Pappu Pass ho gaya!) and by all accounts, things are hunky dory. Cadbury's comeback is even more praiseworthy (from a marketing standpoint), when one thinks of the pasting Pepsi and Coke continue to receive in the market place. For all the hundreds of crores they have sunk in advertising, the smear of the pesticide controversy,just refuses to be wiped away.

But Cadbury has fallen afoul once again. This time in the U.K. Some of their chocolates have been found to contain salmonella and dozens of people fell ill. Of course its not easy to shake of authorities in a country like the U.K and authorities are all over trying to ensure that the company pays for its mistakes. So far this has cost Cadbury 30 million pounds (and counting).

And to think that I had an almost irresistible urge to go out and buy a dark chocolate while watching 'Chocolat', yesterday night! : )

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Indian companies take on the world - but their web sites suck

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Some times you wonder if a company is serious about doing its business. Or whether it has just grown too big, too fast and now complacent enough, to take success for granted.

Take the web site of a major coffee outlet chain in India. Log on to it and you see- a blank page. Another television and Internet media group runs a web site which it advertised relentlessly on its own TV channel (obviously- free ka maal- who won't have it?). I was trying to log in for a week or ten days after the first adverts started appearing. They had taken a lot of effort in redesigning the site, it was clear. But one could never proceed beyond the first page, without running into a technical error. The site was virtually useless. Most Indian corporate goliaths have web sites whose only objective seems to be to prove that - yes! we also HAVE a web site- should some phoren partner ask. I am sure in 9 times out of 10, the phoren partner would be disgusted at what impression the site gives about the company. Many a times the web site actually do a dis-service to the company, rather than promoting them!

These are hardly isolated examples. Believe you me there are plenty more. Even the well established corporates of India STILL don't get it, that 'E' stands for 'E-Commerce' and not 'Egg', in 2007 .

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Enron did not cheat ?

Thursday, January 04, 2007 Digg! Add to Technorati Favorites
Gladwell argues that Enron did NOT defraud shareholders and explains why here.

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Customer complaints on Complaints.com

Wednesday, January 03, 2007 Digg! Add to Technorati Favorites
Robert Scoble, legendary tech blogger, writes about how customers are writing about poor customer service on blogs or anywhere on the web, only to stick it into Google, to be recorded almost for posterity. He says-

"One thing I’ve learned is to always do a Google search on a business I’m thinking of working with. I add the words “problem” “complaint” or “rip off” or other negative words to their company name. If any blogger out there has complained, I’ll see that and be warned away."

Don't try this on an Indian company, Robert. Or you won't be able to buy anything : )

Even the most blue chip of Indian companies specialize in driving their customers to tear their hair out of frustration or worse, even blatantly attempt to defraud them. How many customers knock the doors of Consumer Forums and other redressal bodies, despite the claims that these forums are customer friendly? Most people, rightly or wrongly, choose to drop the issue and just change their product/service provider, if they can help it. Just goes on to show that whatever the claims about the effectiveness of these forums and other regulatory mechanisms, the system is still leaking and loaded heavily against the consumer.

The new way to hit out is to blog/write on the web about your bitter experiences. There are plenty of avenues where you can do this. Sites like Mouthshut.com invite users to post their reviews about commercial entities and are widely referred to by customers. Then, you can always blog about your experiences (or request a well known blogger to publicize your travails) and Google will help you dish it out to people who need to read it. Another effective way is to register a complaint on Complaints.com. This site acts like a public repository of customer complaints and it is upto the companies to check for their manufactured product/service and provide redressal. I checked on how many complaints were registered on for a few of the blue chip companies from India and the results were revealing:

ICICI bank : 82 search results on Complaints.com

HDFC:21

SBI:27

Maruti:16

All of TATA products/services : 152

Bharti: 10

All of Reliance products/services : 45

BSNL:51

MTNL: 52

Bajaj:10

Hero Honda :10

Air India :55

Air Deccan:17

These stats are of course not a TRUE measure of the problem, but surely they are indicative of the extent?

Air India, Reliance, TATA - wakey,wakey!!! ICICI? There is no hope for them.

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Negroponte's Media Labs trumps India's SIMPUTER?

Tuesday, January 02, 2007 Digg! Add to Technorati Favorites
I am thinking of getting a new laptop and forsaking the Thinkpad I am using, right now. Nicholas Negroponte who has launched the MIT Media Labs, has come up with a $100 laptop, which seems to be a very interesting machine. Its no Acer Ferrari of course, but then do most people need one, anyway? I think the 366 MHZ AMD processsor and the 512 MB flash memory, instead of a hard drive and 2 USB ports for additional memory, would do just fine, for some basic usage required for kids and the common man, wishing to surf the net. Whats more it has a brand new user interface that seems to be quite novel.

The MIT-ML was founded in 1985 by Negroponte and Jerome Wiesner, former president of the MIT and science adviser to President John F. Kennedy. "Inventing the future," is the vision of Negroponte and the objective of the MIT-ML's multi-disciplinary research, which is driven by emerging communication and information technologies.

Negroponte had tried to set up a Media Lab in India. But the project was wound up after the then Minister for Communications and Information Technology, Arun Shourie, disbanded the Indian Govt's participation. The trigger for the eventual calling off of the project seems to have been the demand made by the MIT for an additional payment of $5 million or $1 million a year over 10 years for the use of the brand name, Media Lab.Shourie had then said-"The contributions by MIT were not in evidence and MIT had not been put to any specific deliverables at the end of the year".

Pity, looks like Negroponte has managed to deliver after all.

The other low cost PC that was supposed to change the way low cost consumers would use technology was the SIMPUTER. But its hardware specs of

- CPU 32-bit Strong Arm SA-1100 RISC CPU running at 200MHz
- 24 MB Flash for Permanent Storage (DOC)
- 64 MB DRAM

seem no match vis a vis the Media Labs model. The SIMPUTER also costs Rs.9000/-, when farmers in Vidarbha are commiting suicide for not being able to repay loans as tiny as Rs.2000/-! The SIMPUTER does have a lot of features that the Media Labs model doesn't provide like an MP3 player and a variety of tools and applications that aim to make it a infotainment device. But its just too costly, for their target customers. Looks like the desire to provide more features has robbed the SIMPUTER of its basic aim to provide affordable low cost information technology solution for the masses.


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Fortune favours the brave

Saturday, December 30, 2006 Digg! Add to Technorati Favorites
While the Narayan Murthy's (founder of Infosys) and Sanjeev Bhikchandani's (founder of Naukri.com) of the world get all the press, there are plenty of small entrepreneurs who are doing extra-ordinary things in their own right. Their ideas, grit and ingenuity is no less laudable...indeed it often exceeds that of these luminaries in many ways, even if they haven't quite managed to make it that big, in terms of the moolah.

Take the case of Shirish Manjrekar , who is in the business of data management and data mining - of voters lists in Mumbai! Dainik Lokmat's Mumbai edition reports that Shirish has created different types of voters list reports which provide important electoral information to candidates. These reports are electoral information filtered on Surname (voter list based on common surnames), House (voters list filtered basis one dwelling), Building (voters list filtered basis one building), Age, Duplicate voters list (to prevent bogus voting) and Religion. These reports are invaluable to an election candidate to target his canvassing efforts and its no wonder that Manjrekar's reports are much in demand, for the last 9 years. Manjrekar says that he got the idea when he used to work as a volunteer for one of the political parties.

And then there is 17 yr. old Anita from Bihar, who saved Rs. 2500/- bought a box of bees and now earns a steady income of Rs.1,00,000/- off it. She has built her own house and also bought her brother a motorbike! This teenage girl from Bihar has been chosen the mascot for UNICEF, no less !

And what about the awesome story of Aziza Mohammand from Afganistan, about whom famous Venture Capitalist, Guy Kawasaki wrote recently? Guy wrote-" What’s the most inspiring story of entrepreneurship that you’ve heard in 2006? My answer does not involve two guys in a garage who sell their company to Google for $1.6 billion. No way...my answer is a woman who runs a soccer-ball factory in Kabul, Afghanistan."Read the Aziza Mohammand interview here.

These small entreprenuers need all the help and guidance they can get, but sadly most of our major Mngt. education institutes have largely neglected them, except IIM (B),which has recently announced that it would make special efforts, through its Nadathur S. Raghavan Centre for Entrepreneurial Learning, to help small entrepreneurs who run businesses even in the non-tech area.

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A global economic and stock market recession? Watch this space...

Wednesday, December 27, 2006 Digg! Add to Technorati Favorites
The industrial manufacturing numbers, for the month of October'06 in India, came as a shock to many, who had taken growth almost for granted. It struck the lowly 6 odd % mark, for people who were used to the number hitting 13% routinely. The next day the stock market tumbled in a heap.

Many analysts predict this will be only a blip and the numbers will hit the usual range, from Nov'06 onwards. Hmmm...who knows? Investors are jittery and the markets are bound to be volatile, with people betting on both sides of the growth debate.

While we debate this topic in India, its useful to remember that the U.S.A is going through its own growth pangs. Except, the question being posed is not whethereconomic growth would surpass over what it was last year- but how far down the line, the U.S economy would recede. The much criticized, over leveraged housing market has finally collapsed in the U.S. A few friends I know who had cancelled their house buying plans, due to prices reaching stratospheric levels in California, where, reportedly, most of the excess occurred, are again contemplating whether they should make the purchase. This might mean two things: The housing market may not totally collapse and therefore the recession won't be that steep. Or, it might just be that we haven't hit the bottom of the U.S housing bust and there is more pain ahead, at the end of the barrel.

This has profound impact on the performance of Indian economy and therefore the Indian stock market, of course. For Indian investors invested moderately to heavily in the market, it would pay well to keep an eye on U.S economy numbers on a periodic basis and pull out at the first signs of trouble there. After all, if the U.S economy sneezes, it wont be long before India and China catch the cold and God forbid, a flu.

As of now opinion amongst analysts is divided. From Mark Faber to George Soros, every ones sitting on the fence and watching the horizon carefully. Its a bit like sitting in a boat, before deciding to venture in the ocean or pull out of the voyage, watching for the first signs of an impending disastrous storm. Except that, in this case, almost everyone is doing the same and there are very few who are brave enough to have left the shores. Hope this article, published in the Wall Street Journal helps you make up your mind, which way the winds are blowing. It paints a very mixed picture though, and I am not sure it will give you any definitive answers.

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Mittal 2- TATA 0?

Thursday, December 21, 2006 Digg! Add to Technorati Favorites
L.N.Mittal is continuing from where he left. The steel king has now taken over a Mexican steel company called Sicartsa for $1.4 billion. Here's a comparitive analysis of the bid for Corus by the TATA's vs Mittal's latest offer to Sicartsa:





CorusSicartsa
Capacity (million tonnes)18.22.7
Revenues (million dollars)9200('06)956 ('04)
EBITDA (million dollars)520('06)248('04)
Price offered/installed capacity ($)527.47518.51

It doesn't take much to figure out that the TATA's are paying a high price for Corus. Although they are paying only a marginally higher $527 per installed tonne vs $518 which the Mittals are paying for Sicartsa,we must remember that Sicartsa seems to be a highly profitable operation by all accounts, especially when compared with CORUS. I won't be surprised if it is the pension costs that are pulling down profitability of CORUS considering the size of its work force and the demographic profile of its workers. That fits in with why CORUS has made pension compensation guarantees such a major point in its sale discussions with TATA.Unfortunately, EV/EBITDA value in the Sicartsa deal is not readily available to compare it with the CORUS 6.2 times offer.

And TATA's have not even clinched the deal yet! By all accounts they would have to bid at least $10 billion to ward of another bidder viz.,CSN. That makes the bid even more expensive. No wonder the TATA Steel share price (listed in India) has tanked since the announcement of the bid for Corus.

The Mittal Arcelor deal was a share swap offer, ensuring Mittal steel did not have to bleed cash. TATA's, on the other hand are being asked to put ALL the cash on the table before being handed over the keys!

Most importantly there is a clear case for the Sicartsa acquisition with its plant and Mittal's own plant operating almost side by side. TATA's are , however, struggling to make a case for the strategic fit in buying CORUS, given that the Indian Govt. has restrictive controls on exporting Iron Ore out of India to be used in CORUS's mills in Europe and the fact that TATA's have committed that they won't lay off workers en masse' and keep production going like it is now, at least for a few more years.

All in all, it seems that after the Arcelor deal, this is the second deal where Mittal has shown his smarts. Mittal 2- TATA 0 ?

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