| Domination, October 2014 Department of Management ... · 4 | Domination, October 2014 Department of Management Studies, IIT Roor- Cover Story E-commerce is a buzz world for the

| Domination, October 2014 Department of Management Studies, IIT Roor-

2 | Domination, October 2014 Department of Management Studies, IIT Roor-

EDITORIAL

Dear Readers,

It‟s time we say goodbye to the

month of October, and what a

wonderful month it was, filled

with joys and festivities. As we

enter the month of November

and welcome the chill of winter,

we present you another intri-

guing and exciting edition of

DoMination.

This edition features a number of

articles from a diverse range of

topics. The cover story for this

edition is an interesting piece on

E-commerce operations. It is ti-

tled “Amazon Inc: Champion

of Third-party vendor-ship &

lean operations”, written by Mr

Nitin Aggarwal. It tells us what

models Amzaon.inc, the global

leader in e-commerce industry

follows in handling its opera-

tions. The Perspective section of

this month‟s domination covers

“Modi’s Visit to Japan”. This

article is written by Mr. V.

Karthik Reddy and he discusses

some of the global outcomes of

this visit.

DoMination is never short of the

fun quotient. This edition fea-

tures the next round of quiz for

the people who love brain twist-

ing. We also have a Fun Cartoon

by Nitin Aggarwal under the

chlorophyll section. The next

section of this month‟s Domina-

tion is Talk of the town which

contains an Article on “Big Bil-

lion Day” written by Mr. Naveen

Kumar. Naveen has covered the

positive and negative outcomes

of this event for Flipkart.

It is always good to back to our

alumni, listen to their experiences

learn from their journey; the cur-

rent edition has an interview of

Mr. Gaurav Joshi (DOMS, IIT

Roorkee, Batch of 2012-14),

taken by Mr. Kapil Gupta.

Gaurav Joshi currently works as

Business Development Manager

at Decimal Technologies Pvt Ltd.

The edition also includes the suc-

cess story of Mr Sujeeth, a Telu-

gu movie director. Sujeeth at 23

is celebrated as one of the young-

est directors in India. The success

story is written by Mr. N. Sri

Chandrasekhar. We finish this

month‟s DoMination with an arti-

cle titled “Coal Block De-

allocations: The Implications”

written by Mohana Bhattachar-

yay. Mohana has discussed the

economic implications of this

move by the Govt.

We hope you will like the present

edition of DoMination. Your

thoughts and feedback are always

welcomed and appreciated. Feel

free to write to us your inputs.

Happy Reading.

~Regards Team Domination


Contents Amazon Inc: Champion of Third-party vendor-ship & lean

operations

4

Modi’s Visit to Japan

7

CHLOROPHYLL

19

Inte

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ith

Gau

rav J

osh

i

17

Success Story

DEPARTMENT OF MANAGEMENT STUDIES INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Talk of the Town

Coal Block De-allocations

The Implications

Roorkee- 247 667, India Tel: +91-1332-285014, 285617 Fax: +91-1332-285565 Email: [email protected] Website: www.iitr.ac.in/departments/DM/Pages/Index.html

10

11

15

20

Q U T O P I A

Faculty Adviser

Dr. R.L. Dhar

Team DoMination

Apurva Sood Gaurav Mittal Mehul Lala Sudeshna Naskar Vignesh B

Ashutosh Puri Kapil Gupta Karishma Manik Vikrant Kanwar

Designing Team

Ashish Jaiswal Dhruv Kadian Rakesh Kumar Akash Rangari Bratati Roy Brijesh Kori Vishisht Veer

mailto:[email protected]?subject=Enquiry_Domination

http://www.iitr.ac.in/departments/DM/Pages/Index.html

http://www.iitr.ac.in/departments/DM/Pages/Index.html


Cover Story

E-commerce is a buzz world for the today‟s surging Indian Econo-my. Retail e-Commerce (e-tail) in India is a high growth-potential, underdeveloped business with a maximum current market penetra-tion of only 5%. The scene is dominated by online travel portals having the biggest share of 80%, followed by the sale of electron-ics, financial services, and cloth-ing-each having negligible share. With more than 350 e-commerce start-ups across various segments, the major players are trying to diversify while a few are pursuing for segment leadership. Flipkart, Amazon and Snapdeal remain the major players in the play-field of E-Commerce with companies like Myntra and Jabong leading the largest consumer segment i.e. Ap-parels and Fashion. During the recent years this sector attracted major lead-angel investments with global players like Amazon and e-

bay pumping money into their Indian e-commerce arms. Consumer attraction depends ma-

jorly on consumer value proposi-tions. With an Indian mindset where-in cost leadership is one of the prime contributors to this val-ue proposition, E-Commerce companies are majorly focusing to smooth out their backhand op-erations including inventory man-agement, packaging and logistics to trim operational expenses lead-ing to reduction in overall cus-

tomer cost still maintaining the product profit margins. A major chunk of operations cost & busi-ness investment goes to the inven-tory and inventory management and has been a prime area of fo-cus for all E-commerce compa-nies. With major players trying to focus on improving and enhanc-ing third-party vendor-ship along with self maintained inventory, companies like Shopclues.com have specialized on zero-inventory models which are more of open online marketplaces on which third-party vendor can di-rectly sell his products to a target customer. Amazon Inc., The global leader in E-commerce industry, has always played with a motto of “Earth's most customer centric company to build a place where people can come to find and discover virtually anything they want to buy online”. For such a store third party vendors

Amazon Inc: Champion of Third-party vendor-ship& lean operations

Cover Story | Perspective | Chlorophyll | Qutopia | Talk of the Town | Success Story | Regardez I’economie


build a place where people can come to find and discover virtual-ly anything they want to buy online”. For such a store third party vendors are the most vital lifeline, which acts as veins in the company-customer system pump-ing products Just-in-time with minimal efforts and reduced oper-ational costs. The benefits any major player of e-commerce sec-tor derives from its third party vendors are:

Increase in catalogue of-ferings in terms of item types & brands.

Increase in reach to remote locations of the country.

Reduction in Inventory maintenance & investment interest cost.

Reduction in warehouse infrastructure require-ments.

Reduced operational staffs count.

Reduced state road/operational costs.

Along with above mentioned ben-efits, collaborating with third-party vendors also allows e-commerce companies to face off with their biggest rivals i.e. the physical stores as third-party ven-dor-ship enhances competition compelling traders to sell at com-petitive prices. Amazon is a champion in third-party vendor management among most of e-commerce companies. The company has always har-nessed strategies to attract, apply and retain third-party vendors. Today you may be an established manufacturer, a wholesaler, a dis-tributor or a small time vendor with an outlet; everyone who can maintain a product inventory, en-sure timely supply and has a com-puter can sell on Amazon. Brands like Casio, Reebok and Emami are selling their factory manufac-tured products directly with Ama-zon and we have recently wit-

nessed the cost and quality impli-cations of such strategies with Xiaomi‟s and Google Moto‟s partnership with Flipkart. With entry of small time exclusive product manufactures like Soul-flower and Biyani group, Amazon now can also make perishable products available to the customer just-in-time. The shopping experi-ence moves towards like going around in a shopping mall, where each store gives unique offerings. The e-commerce company and Third-party vendor partnership can be broken down into five dif-ferent service steps that are fol-lowed in the supply chain as: 1. Listing the product on Ama-zon.com and Junglee.com. 2. Packaging the product. 3. Product shipping. 4. Customer grievance handling. 5. Placing Amazon.com link on vendor‟s web-site. With Amazon, a vendor can opt to fulfilling one – more of above service steps and in relative would be Amazon‟s share of prof-its in the service. Some vendors like Casio who have means and staff strength to full-fill all above service steps would receive daily orders which would be packed on-site and dis-patched to the customer location by the vendor. Any customer grievances would first be directed to the vendor itself while Amazon would only interfere if any of the above is not handled suitably by the vendor. Hence, the overall e-commerce presence of Amazon is being directly used by a vendor to sell its products. In case of mid-scale and small-scale vendors, Amazon allows them multiple options wherein they can either stock their entire inventory at Amazon‟s ware-house, allowing Amazon to full-fill rest of the steps or else opt to

perform more than one step, leav-ing rest on Amazon. For example a vendor may opt to package the products and allow Amazon to ship the products for it. If the ven-dor cannot stock the inventory with Amazon e.g. in case of retail store owners, but ensure just-in-time deliveries, Amazon would also treat the vendor as a regular third-party vendor with same ven-dor offerings In addition, Amazon runs special competitions among third-party vendors as additional leverage to enhance competition. In the same way Amazon also provides other additional services like Amazon-pay where-in all payment for a product is routed via Amazon from the customers to vendors in case a vendor is un-able to afford payment service providers, in way curtailing the operational costs. To harness the advantage of brand presence of any other vendor, Amazon also allows third party vendors to be its affiliated mem-bers. In such case the vendor al-lows a direct link of Amazon.com on its web-site showcasing the product, as an additional option of purchase. Such strategies are good when implemented but they have a huge bearing on customer relationship and quality assurance. Amazon runs a quality assurance program with a name of A TO Z guaran-tee, which marks Amazon as the supreme arbitrator in all third-party vendor and customer trans-actions and interactions. Initially In case of a third- party pur-chase‟s customer complaint, first the concerned vendor is allowed to handle the grievance which may include up to replacement of the product. If the vendor is una-ble to resolve the issue, Amazon can direct the vendor to take req-uisite steps which may include up to full reimbursement of the




amount paid. The global leader Amazon has modelled itself as a lean, economic and efficient e-commerce compa-ny, fulfilling the consumer needs while adapting to the local Indian challenges. It is now up to the Indi-an e-commerce companies if they can replicate and improve upon to stop the surge of Amazon as local leaders in globally growing Indian economy.

By-

Nitin Aggarwal

DoMS, IIT Roorkee (2014-2016)




Modi‟s Visit to Japan - A Step towards multipolar international System?

Introduction The world order with US at the helm is no longer sustainable. The world order is slowly shift-ing away from the unipolar inter-national system. The recent rise of new powers namely BRICS nations – Brazil, Russia, India, China and South Africa could soon result into a new world or-der. There has been rise of regional powers in Asia and Modi‟s visit

to Japan could be seen under the same light. Signing of “Tokyo Declaration” is historic in nature and it is a tiny but meaningful

step towards the shift towards multi-polar international system

A shift away from Unipolar World Order Post World War II, bipolarity

emerged into the global arena. It

was dominated by two great

powers with strong economic,

military and cultural influence.

The whole world was directly or

indirectly aliened to either US or

USSR. However, it was post col-

lapse of USSR that US rose to

the helm of global affairs and

truly world order became unipo-

lar. Thereafter US remained

largely unchallenged for many

years. There were various rea-

sons for unipolar world order.

Apart from geographical security

and military strength, US had

economic and cultural hegemo-

ny. It was US which laid the

foundations of the present global

economic order. It supported

Bretton Woods‟s system, GATT

which was later replaced by

World Trade Organization. Also

US indirectly controlled some

financial institutions such as In-

ternational Monetary Fund and

World Bank.

After understanding the reasons

for the dominance of US for such a long time, one has to under-stand what all recent events led

to a shift away from Unipolar world order. US sub-prime crisis of 2008 is one of the turning

points in the history. It coincided with the 1st BRIC summit in 2009 which was the initiation of

an alternative to the US hegemo-ny. The economic stagnation in

the Euro zone and the US result-ed in BRICS countries gaining

more wealth, expertise, con-sumption power and the political clout to influence and re-arrange

the global system to their ad-vantage. The manner in which some of the recent event unfold-

ed such as Ukraine crisis, Af-ghanistan troops pull out issue, Snowden & NSA fiasco etc. rein-

force the fact that US hegemony is on a down fall. The shift towards multi-polar international system has started and many steps have been taken in this direction such as inaugu-ration of BRICS development bank; Chinese proposal of Mari-time Silk route; Successful ac-complishment of Mars Mission by India; Russia‟s adamant stand in Ukraine crisis; Brazil‟s initia-tive to reorganize the interna-tional system of Internet Govern-ance etc. Prime Minister Mr. Modi‟s Foreign policy initiatives also signify the same. Inviting neighbouring SAARC leaders to attend his swearing-in was a symbolic representation of In-dia‟s aspirations to be the re-gional superpower. Also order of

Perspective



his initial foreign visits were Ne-pal, Bangladesh, Japan and then to US. This also signifies his set of priorities and focus Modi’s Japan Visit Mr. Modi‟s Japan visit is one of the many stepping stones towards the multi polar world order. Understanding of the Tokyo Declaration will help us appreci-ate the significance of this visit and its role in shaping the future of global international system. Tokyo Declaration can be broad-ly divided into Strategic, Eco-nomic, Energy, Science and Peo-ple2People relations. Strategic Relations Firstly, India and Japan are now strategic partners; which implies there will be regular 2+2 strate-gic dialogue - regular meetings between National Security Advi-sories. Second, Japan lifted De-fense trade ban from HAL and other defense companies. Also Japan will sell US-2 amphibian aircrafts and its technology to India. This is the first time post WW-2 that Japan will make an overseas military sale. It is a his-toric moment given that Japan was under US military shadow since WW-2. Third, both Nations will hold regular naval and coastal guard exercise. Fourth, both Nations want urgent re-forms in UNSC. Japan has pledged to help India get full membership in export control regimes i.e. nuclear supplier group, Missile technology con-trol regime, Wassenaar Agree-ment; Australia Group. This will give India a distinct advantage in participating in the management of the global commerce in ad-vanced technology. Similarly, India, with its emerging high-technology profile, will strength-en global export controls or stra-tegic trade management through the multilateral export controls regimes. Economy and Trade First, Japan pledged to Invest-

ment $35billion in smart cities, bullet trains, Ganga cleaning, women-health etc. in next 5 yrs. It also plans to double its FDI in India and invest 50billion yen loan for PPP projects. Second, India will supply rare earth chlo-ride to Japan- for making defense and high tech electronics. This agreement is to be seen in the light of Chinese refusal to supply rare earth metals to Japan due to its ongoing rift. This is basically changing the power dynamics of the Asian Continent and signifies how different nations are using one regional power (India) to balance out the rise of another regional power (China). Third, Govt. of India agreed to setup “Japan+ Management team” in PMO, which will help Japanese investors in doing busi-ness in India. It is another posi-tive in the direction of strength-ening regional bilateral relation-ships to counter the impact of US. Fourth, Japan agreed to per-form joint feasibility tests of bul-let trains; upgrade existing semi-high speed trains; finish ongoing industrial corridor projects; give advanced irrigation and farming machines; North East Road con-nectivity, Forest resource Man-agement, water supply improve-ment etc. Energy and Environment Both nations signed pact to jointly explore Oil Gas and pro-cure LNG. This has to been seen in the light of US domi-nance over the Oil rich nations of Middle East and its own Shale gas reserves which will be in great demand in near fu-ture. It is important for nations like India and Japan to have in-dependent energy security to aspire to be the regional powers of multi polar world. On similar lines both nations Collaborated for environment friendly coal technology such as Coal-fired power generation technology; Clean Coal Technology (CCT); Super-critical coal-fired power project in Meja, UP; Super criti-cal thermal power plant in Bah-raini, Bihar etc.

Science India and Japan have decided to perform outer space exploration via Asia-Pacific Regional Space Agency Forum (APRSAF). Also undertake ICT initiatives; provide internet security; joint ocean stud-ies etc. In 21st century, only mili-tary might is no longer sufficient. With climate change and sustaina-ble development being the key ele-ments of development dynamics it becomes very important that na-tions are scientifically advanced and superior to ensure food and energy security. Nations should be able to cope up with the disasters and high “sustainable” growth rates. Also Science Fellowship programs for youth will also be started in both countries. People 2 People India and Japan have decided to help each other in developing itself into two strong poles of the future multipolar international system. And for any relationship to last long it is not the govern-ments but the people who plays the pivot role. Hence Tokyo dec-laration has given prime im-portance to people2people rela-tions. It is decided to develop Va-ranasi just like Japan‟s historical city Kyoto under Kyoto-Varanasi partnership agreement. Under JENESYS 2.0 program ~1300 youth will be exchanged between the two nations. Japan Overseas Cooperation Volunteer (JOCV) will send nurses to Mizoram. And it is decided to promote Tourism, youth exchange, skill Development etc. Future of Multipolar Interna-tional System As we can comprehend from above that the multiple poles of future are right now collaborating to overcome the influence of US in global politics. But the real question is will the multi-polarity be sustainable?? It all depends on how different nations behave. Right now Japan is balancing out China by collaborating with In-dia.



China has built good relations

with Russia to counter balance

US. India is building close rela-

tions with ASEAN countries to

increase its influence in its East-

ern side. All these are balancing

and counter-balancing acts which

will keep on shifting depending

upon the needs of the time. Now

in a multipolar world, there is no

real single powerhouse. Trage-

dies like that in Iraq can be

avoided in such a world order.

All the nations big or small will

be equally treated in international

treaty agreements like that of Cli-

mate Change. There are lots of

advantages of this new world or-

der. But everything comes with a

cost. . It is very important for the

regional powers to behave with

integrity and humanly. In future

there will be scarcity of natural

resources, there will be energy

insecurity, food will be scarce

etc. It is then these nations have

to behave responsibly and keep

in mind the interest of the poor

nations as well. However, all in

all it will be an exciting phase in

the human history and we will be

lucky to witness it.

By- V. Karthik Reddy




chlorophyll

By-

Mr. Nitin Aggarwal


What it feels during

Exams



Qutopia

Section A (1 Point for each correct answer)

1. This company claimed Total weight of our shipments was more than 800 adult

elephants between Sept 21 and Oct 21, 2014

2. "Power Dressing" is the tag line of

3. What does this chart depict?

4. Who said these words: "When you have $1 million, you're a lucky person.

When you have $10 million, you have trouble, when you have more than $1 billion,

you have responsibility."

It’s Exquizite, Kills your Quriosity and adds to your Quizdom. Need we say more? ‘Qutopia’ – A Utopia of

the best Biz Quiz Tidbits to wreck your brains! Rush in your answers to [email protected]

before 10 December 2014. The winner will have their names published in the next issue. Also, person

getting the highest score in the current quarter will get a gift voucher. Answers in the next issue of DoMi-

nation.


mailto:[email protected]


5. Connect Image 1, image 2, image 3 and image 4.

6. Name the company which launched Breakout, The Street Glide Special, CVO in India?

7. Bhavish Aggarwal and Ankit Bhati are founders of which company?

8. Name the parent company of the Airline that has signed an agreement with Airbus to buy

250 A-320 aircrafts.

9. How was Fairwinds Private Equity previously known?

10. Which company is moving its global headquarters to India in March 2015 for a month-

long immersion experience?


Section A (1 Point for each correct answer)


Section B (2 Point for each correct answer)

1. Only one ISL franchisee is completely owned by a single entity. Name the entity.

2. Name the CEO who made this statement "I don't consider the bloody ROI. If you

want me to do things only for ROI reasons, you should get out of this stock"?

3. An English film to be released in December this year has Martin Sheen playing the

role of a CEO of a US MNC who was charged with manslaughter by authorities in In-

dia in the mid-80s. Name the CEO and the title of the movie?

4. Which Indian company acquired 51% stake in Peugeot motorcycles?

5. Name the parent organisation of .



Section A 1. Kohler India Corporation Private Lim-

ited

2. Germany

3. Starbucks

4. ICICI

5. SBI

6. Cognizant

Winner of September edition

Prachi Jain DoMS, IIT Roorkee (2014-16)

SECTION B

1. Bendgate of Apple iphone 6

2. Vivek and Roopa Kudva , head-

ing Franklin Templeton and

CRISIL Ltd.

3. First book sold on Flipkart :

Leaving Microsoft to Change

the world

Answers for September edition



India witnessed “A wedding in the family” on 6th October as it caught the site of an Indian fla-vour of Cyber Monday popular-ized by billion dollar spending extravaganza in the U.S. Flipkart which can rightly be gazed at as the 800-pound gorilla in this busi-ness came up with a sale concept named Big Billion Day on Octo-ber 6th aimed at hitting Indian cus-tomers by a bolt in the blue. As per the plan this move was intend-ed to not only stretch company‟s place in the market but also en-large the market size of e-commerce industry as a whole. The brainchild was to startle Indi-ans with offers and discounts spanned across entire catalogue that would take the winds out of their sails but the plan advanced with major glitches. Despite a roaring 15x traffic raise on Flip-kart to 1 billion clicks, the shot was few yards away from the tar-get. Disillusionment arouse as the deals people were raring to go for got over within seconds of the sale starting at 8a.m. and the most sought after „steal deal‟ section had nothing but „out of stock‟ message to flash. Although Flip-kart claims to have clocked sales worth $100 million in Gross Mer-chandise value (GMV) in mere 10 hours, the snag let consumers with a sore spot.

Flipkart‟s share of profit pie was well eaten by its competitors Am-azon and Snapdeal-the website directed the buyers to Amazon.in while Snapdeal took charge by offering products aggressively priced coupled with better ser-vices .In today‟s hyper competi-tive, multi channel, noisy market-ing landscape, companies propel

on the marketing budget of other companies or in simple terms, they play Gorilla marketing. Of-ten the company pouring millions fuelling the frenzy gets caught up in the heated affair.“Amazon tar-geted customers who were unable to complete orders on Flipkart and was the most searched site on

cashcrow.com”, Swati Bhargava, CEO of cashkaro.com. Custom-ers faced several hindrances ac-cessing the website due to server overload and the umbrage was aired to social media via Face-book , twitter and whatsapp. It is also being claimed that the dis-counts running on the products were pseudo discounts as the pric-es of these products were being inflated over the past couple of days. The stated deep discounted items at Flipkart were beaten hands down by Snapdeal. This masterstroke struck chords with a large crowd for Snapdeal and in-dustry experts view it as a major move that would play a signifi-cant role in brand acquisition and customer loyalty in this cut throat e-commerce market. Lead con-tender Amazon saw a massive surge in its traffic over the past two weeks and has been able to sell more than 100,000 Android Smart phones complemented by a 300% increase in its shoes catego-ry. According to a leading report,

many major electronics giants such

as Samsung, LG, Sony are not hap-

py with Flipkart as they have sold

their products at a price much be-

low the cost price.

Talk of the Town



By-

Naveen Kumar

DOMS, IIT Roorkee (2014-2016)

Fresh sales to Flipkart might get suspended and legal action too might follow as the pricing strat-egy on their products was re-ferred to as „predatory pricing‟. Companies want to know the modus operandi behind pricing scheme and claimed to have faced a major blow to their brand value. Also, heavy discounts af-fect the brick and mortar sellers as they cannot match the price offerings. A gentle reply to this fiasco was an apology letter that Flipkart issued to all the custom-ers in its scope. Customer cen-tricity was the tone of the letter and the server failure on the day is being put forward as the inade-quate technological backbone at Flipkart. This apology though not accepted at face value by customers at large, was a clear indication of the philosophy at Flipkart and it is a positive stride Flipkart has taken to reap customer trust. Their ina-

bility to match up to the sheer scale of the event and disruption of shopping experience of cus-tomers was well apologized for by them. Though this mammoth sale presaged a lot of bad publicity for the company, it should in no way tamper the image it has built through years of staggering ser-vices. A sagacious consumer will comprehend the state of affairs that let to unprecedented chain of circumstances that followed and won‟t shift his preferences in terms of brand loyalty. While Flipkart, Amazon and Snapdeal have locked their horns firm in place, contending for the numero uno spot for holding e-sale this festive season, they have ham-mered the final nail in the coffin of brand loyalty. The customers are having a jovial time picking offers solely on the basis of price and are

completely neglecting the impera-tive factor that which company could serve them better on days less frenzied. These events might churn cash momentarily and might get valuation in potential IPO‟s but these sales are not sustainable and will result into demise of those sites that have not carved a brand loyalty for themselves. Uncertainty surrounds Indian e-commerce but one fact stands tall- customers will draw the utmost benefit from this battle.



Interview with

Gaurav Joshi:

DOMS IIT Roorkee batch (2012-2014)

1. Tell us about yourself and about your journey before joining DoMS, IIT Roorkee I graduated from LD College Of

Engineering, Ahmadabad and

worked for 5.5 years before join-

ing DoMS. I worked for two

companies Patni Computers (3.5

years) & Fiserv India (2 years). I

was the Team lead of Test Auto-

mation for Metlife in Atlanta,

Georgia. But later, after working

for a couple of years I realised

that a degree in Management is

required to climb up the corpo-

rate ladder. Also, there is a sense

of personal history with IIT

Roorkee. My maternal Grandfa-

ther was a professor at Hydrolo-

gy dept. and my mother has stud-

ied in Adarsh BalNiketan. Hence

I chose IIT Roorkee.

2. What made you choose the field of marketing? My internship taught me the sig-

nificance of Marketing. I took

telephonic interviews of over 200

customers of Ampere Electron-

ics; I met dealers across Banga-

lore & Coimbatore. I felt that

there was a gap in perception of

what the management thinks and

communicate the product/

services and what the customer

perceives about the product/

services. The more you do to

bridge the gap, more the product

will sell. Also, I realised the ver-

tical which brings money to an

organisation will always be treat-

ed first among equals. Marketing

and Sales get to dictate the direc-

tion for the organisation.

3. Can you share your intern-ship experience at DoMS, IIT Roorkee with us? I worked for Forum Synergies

(India) Private Equity Fund Man-

agers Private Limited in Banga-

lore. I worked under the mentor-

ship of Hemchandra Javeri&

Samir Inamdar. Hemu was the

President and CEO of Madura

Garments and Nike India. Samir

was the President and CEO of

General Electric in India [Both

Alumnus of IIM Calcutta]. Fo-

rum Synergies was about to in-

vest in Ampere Electronics, an

electric two wheeler company. I

was required to do the SWOT

Analysis of Ampere Electronics

to advise the management about

it's decision to invest in Ampere.

I met with CEO, CTO, COO of

the company and took in depth

interviews of over 200 custom-

ers, 20 dealerships. I studied the

product line, how the product

were placed in the dealership,

how the customers were treated

in the dealerships etc. I analysed

the legal hurdles that were pre-

sent. My analysis was presented

in the corporate presentation

done by Forum Synergies to its

Spanish Partner Investors.

4. Please share some of your best memories of 2 years at IIT Roorkee. I joined Roorkee after working

for 5.5 years. So this was a wel-

come break for me. I remember

the time spent in the canteen dur-

ing the winter months (being de-

lightfully high) and our batch

mates singing on top of their

voice. I can't forget the bike

rides to Chakrata, Tehri, Dha-

naulti, Camping in Rishikesh,

Playing tennis, playing Poker,

mugging up for FA, MA. Being

the Class Rep, I had to co-

ordinate guest speakers, organise

multiple summits at one time,

organise industrial visit, manage

class functioning, manage the

admission process and this is on

top of the regular academic rig-

our. But the best part was un-

doubtedly the mentorship I re-

ceived under Nangia sir,

Rangnekar Sir, Lovneesh Sir &

Jagan sir.

5. What have been the biggest challenges you have faced in your current field of work.

DoMS-da-Evince



I am currently in IT Sales. The

perception of Sales is not very

positive. We perceive the role of

sales as a target driven job and

have unbearable pressure [it is

true] but, it's also one field that

teaches you the most. Sales peo-

ple get to interact very frequently

with the C Suite of the company

[both internal and external]. The

other challenge is we have to be

on our toes as the industry is rap-

idly changing and we must adapt.

There was one incident once

when the CIO of a very big multi-

national walked off from the

meeting as he thought I was not

abreast with the latest offerings in

the market.

6. Any piece of advice for cur-rent MBA students and other MBA aspirants? My advice will be to understand

the practical aspects of what is

being taught in class. Try to keep

your fundamentals strong. Fun-

damentals do matter. Try to do

live projects, participate in Case

study/B school competitions. But

besides this play your heart out.

Use the wonderful Tennis courts,

Badminton courts, pool tables

and swimming pool that IIT has

to offer. On an ending note, I

have been an ardent believer of

the Quote

“Khudi Ko kar buland itna ke

hartaqder se pehle Khuda bande se

khud ooche bata teri raza kya hai”.

By-

Mr. Kapil Gupta




Success Story

Sujeeth:

The prodigy who etched his success

Sujeeth, at 23, is one of the youngest directors in India to make his directional debut. Ever since his movie „Run Raja Run‟ (Telugu) has hit the screens, he has become the talk of the in-dustry; not so because he has at-tempted to do a film at such a young age, but the way he han-dled the 64 crafts of film making. Unlike the typical youth of this profession, he appears confident and totally in control. Though he speaks briskly; there is an unmis-takable clarity of thought and sin-cerity in his voice. It all started with him cooking up stories to bunk his Hindi tuitions. Generally kids tell their mothers that teacher is unwell or went somewhere, but he used to narrate a different story every time to make his mother believe. As all lies come into light someday, he was caught when his mother met his Hindi teacher. Instead of scolding him, she appreciated his story telling capabilities and spon-taneity and that is when he real-ized his innate story telling capa-bilities. Over the course of time he developed a passion for film mak-ing. Sujeeth says he is indebted to his parents who were always support-ive. At 17, he let his parents know about his film making aspirations. In spite of coming from a family with no film background, his fa-ther didn‟t ask him to give up on his, what a typical middle class father might describe it, an unreal-istic dream.

He was so obsessed with film making that he did a diplo-ma in film technology from L.V Prasad Film and T.V academy while pursuing his Bachelors in commerce. He made 38 short films in a span of 5 years ranging from budgets of few hundreds of rupees to as high as seventy lacs. This experience helped him in efficient use of budget allocated to him during his debut venture. He learnt the ins and outs of script writing. He in fact wrote the story and screenplay of „Run Raja Run‟ in four and a half days as the producers Vamshi and Pro-mod of UV creations liked his way of narration but asked him to come up with a new script. Sujeeth is not resting on his lau-rels; in fact he didn‟t bother to take a good night‟s sleep after the movie release. He was busy go-ing around theatres taking the public pulse and finalizing the publicity tours. He has a few of-fers from prestigious production houses to make his second film but he firmly believes story is the main ingredient of movie making and the rest all will fall in place subsequently. He says “I was giv-en an opportunity because my story impressed the producers, not because of my prior experi-ence or credentials, of course they come as an added advantage but that is not the main criteria.” In a society where getting a job

with 4lpa after graduation is con-

sidered successful, Sujeeth handled

a 4 crore venture with utmost ease

and stood as an inspiration for

youth in an industry with 1% suc-

cess rate. As quoted by Alfred

Hitchcock “Self-plagiarism is a

style” and as an ardent movie lover,

I hope Sujeeth builds a style of his

own and enthrals the audience. On

the closing note I wish him all the

best in his future ventures.

By-:

N. Sri Chandrasekhar




The coal block allocation scandal,

or the Coalgate, as it is popularly

known, garnered international

media attention when it came to

light after the CAG office accused

the Government of India of ineffi-

ciencies and irregularities in the

process of allocation of coal

blocks during 2004-2009. Coal is

a precious natural resource and

hence, coal blocks must be allo-

cated to organisations following

the process of competitive bid-

ding. However, the then govern-

ment chose to allocate these

blocks in an arbitrary manner to

various public and private enter-

prises. As a result, these compa-

nies paid much less than they

might have otherwise, resulting in

a massive loss of revenue to the

state exchequer and windfall

gains to the enterprises. Deepen-

ing the impact of loss to the gov-

ernment, it emerged that many

companies had failed to develop

their coal-fields after winning li-

censes without proper bidding.

While the initial CAG report only

talked of inefficiencies in the pro-

cess, the question of corruption

and bribery being involved came

to dominate the discussion with

the course of time. There was tre-

mendous public outrage and anti-

corruption demonstrations all over

the country with opposition par-

ties demanding the resignations of

several ministers and authorities

allegedly involved in the same,

including the then Prime Minister,

Dr. Manmohan Singh.

Recent developments:

In July 2014, the Supreme Court of India set up a special CBI court to try cases arising from coal block allocation scam on a day-to-day basis. On 24th September, the Supreme

Court cancelled 214 out of 218

coal blocks allocated since 1993

to steel, cement and power com-

panies. Apart from the cancella-

tion, the operational mines will

also have to pay a penalty of Rs.

295 for every tonne of coal ex-

tracted since they commenced

operations. For all the de-

allocated coal blocks, the govern-

ment is free to hold auctions or

give them away to Coal India.

The operational coal blocks have

been given six months to wrap up

their operations, after which these

blocks will be handed over to

Coal India. However, the power

producers would not face a dis-

ruption in their supplies as Coal

India would continue to provide

coal to them.

Impact on the banking sector:

According to a report by Karvy,

the banking sector had a total ex-

posure of Rs. 5 lakh crore to the

power sector, in addition to the

exposure to iron and steel compa-

nies which stands at Rs. 2.65 lakh

Regardez I'economie

Coal Block De-allocations: The Implications



Economic implications of the ruling: Impact on the banking sector: According to a report by Karvy, the banking sector had a total ex-posure of Rs. 5 lakh crore to the power sector, in addition to the exposure to iron and steel compa-nies which stands at Rs. 2.65 lakh crore, as of June-2014. Various banks have financed many new projects during the period from 2008-2014. The cancellation of the allotted coal blocks to these projects adversely impacts the chances of recovery of these loans. As these projects fail to take off or are stalled, banks will have to either write-off or classify these as NPAs. Re-allocation of these blocks through auctioning will mean substantial delays in project and result in slippages and restructuring of loans to these pro-jects. The percentage of gross non-performing assets (GNPAs) for the banking sector is expected to worsen from 3.9 percent of ad-vances in fiscal 2013-14 to about 4-4.2 percent in 2014-15. Banks would also need to keep money aside to cover bad debts. This will, in turn, have a negative im-pact on their profitability and cap-ital needs. However, since, this

exposure also involves money lent to distribution companies and firms that are not allocated coal blocks, not all of this money is likely to get directly impacted by the ruling The concern that this verdict rais-es in the banking industry is simi-lar to the uncertainties that the banks faced when the Supreme Court cancelled 122 2G spectrum licenses granted by the UPA-government in an arbitrary man-ner. However, banks‟ exposure to 2G loans was much less, about Rs. 10,000 crores. Impact on the companies: The apex court‟s verdict sent rip-

ples through the metals, mining

and power sectors. The fate of the

money invested (about Rs. 3 lakh

crores) in order to develop the

coal blocks is uncertain. There are

ten companies that are severely

impacted but they will not have a

major issue paying interest be-

cause they are fairly big compa-

nies and do not have a debt-

servicing problem– like Hindalco

Industries, Sesa Sterlite, Steel Au-

thority of India (SAIL), Tata

Steel, JSW Steel, Reliance Power,

Jaiprakash Power Ventures, JSW

Energy and Adani Power. Smaller

companies, like Jayaswal Neco,

Electrosteel Steels, Prakash In-

dustries, Sarda Energy, Usha

Martin, CESC, JP Associates,

RKM Power Gen etc, might find

it difficult to pay back the interest.

In the metal industry, companies

will have to buy coal from other

destinations which could invite

logistics issues and additional

costs. Companies like JSPL who

were getting windfall gains on

steel and power production have

to pay a penalty of more than Rs.

3000 crore. Those that have not

started production may lose the

blocks, or will have to buy mining

rights in a fresh auction. The rul-

ing might derail the business ac-

tivity in these industries.

The stocks of the companies af-fected by the order have been plummeting. Major steel and power companies have seen major erosion in their market capitalisa-tions. Investors are estimated to have lost around Rs. 52000 crore in these companies.

Table1: Exposure of various banks and financial institutes to companies impacted by the SC Ruling

Financial Institute Exposure to Impacted Companies (in Rs.crore)

% of Total Loans

Axis Bank 2700 1.2

ICICI Bank 3000 0.9

IndusInd Bank 300 0.5

Yes Bank 450 0.8

HDFC Bank 273 0.1

SBI 7800 0.6

Bank of Baroda 2000 0.5

Punjab National Bank 4100 1.2

Bank of India 2000 0.5

Union Bank 3000 1.1

IDFC 825 1.5



The stocks of the companies af-

fected by the order have been

plummeting. Major steel and pow-

er companies have seen major

erosion in their market capitalisa-

tions. Investors are estimated to

have lost around Rs. 52000 crore

in these companies.

Impact on the state govern-ments: While the ruling directly affects

the corporate, the tremors will be

felt on the finances of the state

governments too. As the operating

blocks allocated to various state

government firms have been can-

celled, the states of West Bengal,

Arunachal Pradesh, Karnataka,

Madhya Pradesh, Punjab and Ra-

jasthan are likely to face big loss-

es as these state-owned companies

pay additional levy on the coal

extracted by them.

Impact on CAD: The verdict may have a marginal

impact on raising the net burden

on the CAD by an additional $700

million. The country imported 171

million tonnes of coal at $16.41

billion in 2013-14 against 145mil-

lion tonnes at $17 billion in the

previous fiscal. A halt in domestic

production of coal would increase

our import dependence further. As

the coal-developing projects on

these blocks get stalled temporari-

ly, coal would need to be import-

ed to meet the needs of the power-

generating and steel-producing

companies. The rising import bill

due to additional coal imports,

however, stands compensated due

to decreasing international oil

prices. Moreover, the six-month

time frame should ensure that the

impact on coal imports and cur-

rent account deficit will be mar-

ginal.

Opinion The ruling is more rigorous than

what the industry was expecting

but it sends a clear message about

India taking a stand against the

improper allocation of national

resources. Even though many ana-

lysts feel that the judgement is

negative and could delay the en-

tire growth revival in the econo-

my, it would clean the system in

the long-run. Now the onus to rec-

tify the crisis in this sector lies

with the government. The govern-

ment needs to act quickly and al-

locate the blocks on a merit basis

and under a properly formulated

policy so that these mines can be

developed as soon as it is possi-

ble. The long-awaited auction pro-

cess should ideally be completed

within the March 31st deadline so

that the winners are ready before

that. The auctions will result in a

windfall gain for the central gov-

ernment and the coal sector can

benefit from increased competi-

tion. This opportunity can be uti-

lised by the government to intro-

duce reforms in the sector. Irre-

spective of certain short-term

costs, this judgement will be a

welcome ruling to the investment

environment in the country as it

sends out a clear signal against

any further nexus between the

government, the bureaucrats and

India Inc. Being a judgement in

favour of improving good govern-

ance, the investment climate in

India would gradually become

more transparent.

By- Mohana Bhattacharyay




Department of Management Studies, IIT Roorkee

Roorkee - 247667, INDIA

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