Global Brands and Local Tastes! (by Amitava Chattopadhyay)

“Starbucks Plays to Local Chinese Tastes” screams a Wall Street Journal headline (November 27, 2012) on the first page of its Business & Finance section. This makes total sense. To be a loved brand you need to have intimate knowledge of your target consumers and surprise them with your responsiveness. This is precisely what Starbucks is trying to do in China, even as it struggles to establish itself in India, trailing far behind the original estimate of store openings, which has recently been revised downwards to roughly half of what had been originally announced.

Unlike the US consumer of Starbucks who primarily grab a coffee and perhaps a sandwich on the go, the Chinese market sees Starbucks as a venue to sit, to relax, to meet, and to discuss business. This means that the kiosk-sized format popular in the US does not work well in China. In China, larger and more spacious stores with comfortable seating, extending to couches, becomes a key requirement. Starbucks is currently adding stores that are as big as 3,800 square feet to adapt to the demands of Chinese consumers.

It’s not just the space that’s at issue but the products themselves. China is a nation of tea drinkers having given this beverage to the world. Thus coffee while growing as a beverage, only goes that far. To adapt its portfolio, Starbucks has launched a R&D center in China, a center which has been responsible for launching menu items like the Hainan chicken-rice wrap and Thai-style …

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Liberalization of FDI in the Retail Sector in India–Why all the fuss?

The Government of India has finally liberalized the retail sector by allowing FDI to flow in to it, and at least 8 states out of the 28 states in the country–fortunately the 8 that account for over 50% of India’s economic output– seem to be aligned behind this decision. Tragically, it is laggard states like West Bengal and Bihar that have not accepted this new initiative, potentially setting up these states to fall further behind economically.

The lack of support for opening up of the Indian market to FDI in modern retail by 20 of India’s 28 states is frankly bemusing to me. Certainly, in the food sector, particularly fresh produce, the lack of organized, modern retail in India is responsible for higher prices for food products faced by the end consumer as well as lower prices received by the producers. The high price to end consumers is not only because the handful of middle-men manipulate prices, as was claimed in the Indian media, earlier this year, when prices of fresh produce spiraled dramatically upwards, but also because a large percentage of fresh produce is spoilt in transit due to poor packaging and the lack of refrigerated transport. These are problems that the entry of large modern retail is also likely to fix. Indeed a recent article in the Financial times noted that Carrefour, which is in India and currently sells to businesses, requiring a minimum per trip spend of Rs. 1000 (approx. US$19), offers prices that are lower by …

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Change of Guard! (by Amitava Chattopadhyay)

Mr. Ratan N. Tata stepped down as Chairman of the Tata Group on Friday heralding a change of guard after a 20+ year tenure at the helm of the Group. I remember when Mr. Tata was first appointed Chairman in 1991, there was much discussion about his suitability for the role. Yet, Mr. Tata proved to be a visionary leader. He transformed a sleepy and traditional business group, that was a loosely aligned set of companies which shared a common name, in to a $100bn global behemoth that had seven business lines under centralized management. Mr. Ratan Tata has also been responsible for converting the Tata Group in to a true multinational corporation; in 2008 its revenues outside India overtook revenues from within the country.

Mr. Tata’s transformative impact on the Group did not stop there, he changed the governance within the Tata Group companies, introducing a compulsory retirement age for company directors. As a good friend and senior executive at one of the Indian majors said to me in a conversation the other day, “beyond a certain age, it is difficult to hold the myriad details that a top executive needs to have readily accessible in their minds, so that they can make the important decisions that determine the future of the business.”

Not only has Mr. Tata transformed the Group and steered it through turbulent times, but the moves the group made during his tenure have inspired Indian industry at large. In March 2000, the then Tata Tea …

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Bathroom Habits Die Hard! What Can We Do?

Here I am sitting on a flight from New Delhi to Bangalore and just finished reading a piece entitled “India Needs a Latrine Policy” by V. Raghunathan in today’s Economic Times (November 16, 2012). I couldn’t agree more with the arguments made by Mr. Raghunathan and I hope the country does not let another dozen years elapse before addressing this critical and shameful issue head on. We need to provide India’s citizens with proper toilet facilities. “Under the skies” for a nation seeking a position on the UN Security Council, is not a proper option.

Having said that, I also wanted to add to what Mr. Raghunathan said. I just visited the loo on board the flight and the gentleman, and clearly I am using the word totally loosely here, who was in the loo before me, walked out without flushing the toilet. Not only that, while urinating, he had not bothered to lift the lid of the toilet, and given his shitty aim had left the seat totally spattered with his excretions! Now, this from a person who is flying on a plane really shocks me—but then again it doesn’t because flights in India and to and from India inevitably have a dirty toilet.

So, not only do we need more latrines as Mr. Raghunathan says, but we need to train our fellow Indians on how to use them properly, as well! And, given my most recent experience, this would apply to the vast majority of our citizenry, and …

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The best suggestions to manage cash pressures caused by Corona virus disruptions

Millions of people worldwide practice social distancing to stop the overall spread of Corona virus. Many companies experience or anticipate important constraints on both cash and working capital in particular liquidity challenges. Well experienced business people are aware the ever-increasing requirements for the cash flow scrutiny in the days and months ahead. Finance departments have the responsibility to manage the cash pressures during a crisis.

Consider important things at first

Almost every company nowadays sees the low revenue and gets less cash flow along with other problems like the delayed receivable collection and requirements to step up payables to leading suppliers. These companies expect to become much more nimble for the purpose of managing the inventory in the supply chain with maximum uncertainty and demands on working capital. This is worthwhile to follow the best guidance from experts to manage the cash and liquidity position in the business during the high uncertainty times.

As a business owner or administrator, you have to test the overall incoming and outgoing cash flows as comprehensive as possible at first. You can spend enough time to be aware of worst case financial scenarios as well as downsides such as the impact of foreign exchange on the overall cash position. This is because you must act in the measured way. If you know about the status of the cash and liquidity runaway in your business today, then you can estimate what changes your business get during the next three to four months.

A proper assessment

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