5 Questions to Ask While Crafting Strategy

With the continued onslaught on the bottom line from forces like regulations, political instability, disruptive technology and changing customer expectations, gone are the days of long term planning – RIP Five year Plans!

Strategy & Planning needs agility and frequent revisions so that they are aligned to the market forces. Organisations can only grow by either staying ahead of the market or by creating a new market.

Organisations can only grow by either staying ahead of the market or by creating a new market

We can beat the market organically through superior internal processes resulting in lower costs or better and differentiated offerings. Inorganically, you have to find your partner with whom you can capitalize on the merger synergies.

Creating a new market is through innovation and the process is continuous because what’s innovation today is commonplace tomorrow, thanks to the dynamism in the market.

So, as executives and business leaders what are the some of the right questions to ask when it comes to strategy and planning.

1. Are the strategies adaptive and/or emergent?

Strategy will ultimately result in activities connected to our business models, products, customers and markets. So, being adaptive or emergent means our strategy should be either shock resistant or be shock absorbing and must be flexible enough to deliver opportunistic responses to unexpected events.

More on Adaptive Strategy

2. Are your strategies listening to your customer?

Strategies cannot be crafted in isolation. Strategy and operational planning needs to consider customer insights and expectations. Customer is the most important stakeholder in strategy formulation. Thus, strategies need to be more revenue generating and customer focused and less history driven.

3. Do the strategies align to the core competency?

An organisation's core competency rest with its people, processes and offerings. So, the leaders need to assess the core competencies correctly to devise an effectively aligned strategy and the operational plans. Core competency is the source of competitive advantage and sustainable strategic advantage. Business models are built around these core competencies. Hence, strategic planning should be configured around these core competencies. Leaders with a view from the top can help here.

Read - Strategy Consulting - Generalist Approach

Business models are built around these core competencies.

4. Are our strategies in line with the organization structure?

Will give you an example – innovation may be on the priority list of the CEO but is the underlying organizational architecture suited for the job? Bureaucracy and multiple reporting lines are the sworn enemies of Innovation. So, for the innovation agendas to work, the CEO needs to realign the organisation structure and set the platform to nurture innovation.

5. Are we technology savvy when crafting strategy?

Effective strategies are data driven and based on inputs drawn from decision science with sophisticated machine/deep learning algorithms bringing out the impossible to imagine insights and predictions. Effective operational strategies can be very responsive - an example, they can be based on immediate cumulative feedback from loT sensors placed as strategic listening posts. So, leaders need to consider technology as a key enabler for strategy formulation as well as their execution.

Read - Strategy based on Artificial Intelligence

So, with the new financial year around the corner, when the strategy and operational planning would be taken up, as business leaders it is imperative to check if our plans cover the the fives nuances of strategic planning. Let us ask ourselves these 5 question !

Did you like the article and want to carry the discussion forward? You connect with me at d.santanu1@gmail.com

Disclaimer - The opinions expressed here represent my own views and not those of my employer.

Strategy Consulting: Why does the generalist approach work?

Arbitrage. That’s what comes to me when we are looking at the business problems. Gone are those days of providing strategic solutions where one wears only the hat of either a financial, marketing or technology analyst. The more holistic approach starts with looking at the ecosystem and the enterprise analysis. Now that throws open the question – when attacking the business problems – who fits in more - a generalist or a specialist?

A proposed problem solving technique would be to bring the leaders from various specialized fields in the same meeting and then debate and discuss. But it has been seen, such meetings fail as the stakeholders are not able to reach consensus.

The image above illustrates the divide and conquer approach. It is common in the industry to conquer a complex business problem by dividing it into manageable smaller modules based on multiple dimensions. Each module is led by a dimension/domain specialist. But in the process, are we not forgetting the generalists? Don’t we require someone to systematically connect the dots, oversee the system of connected dimensions and thus, order the chaos! From the above image, it appears the modules are in silos but in reality, the module overlap and talk to each other. And hence, the overlaps are best handled by generalists whose thinking cuts across domains.

With a complex nonlinear system, we just cannot divide the problem into parts and just add the things up and say this is the whole. The strong interactions between the modules needs to be analyzed based on the different dimensions.

Adding a new dimension say financial - to marketing, culture and technology is like putting a new pair of glasses and we could see stories we haven’t seen before. We can identify the causal chain of events that we never identified before. And thereby, it can enable us to see the “invisible hands” and the handcuffs that are impeding business eaders from doing things that increase stakeholder values!

Thus, the key role of the generalist is to be present on the dimensional/domain overlaps and spot the interactions and entanglements of the different dimensions and then take a crude look at the whole. The generalist can talk to the domain experts (or the specialists) and then arrive at a comprehensive solution to the business problem or opportunity.

Now, coming to the question in the first para of this article – ”… when attacking the business problems – who fits in more - a generalist or a specialist? ”.  Are we able to arrive at a decision now ?

Irrespective of the answer, one feels generalists are equally important as the specialists. Though from a career standpoint, it’s little harder to find jobs if you’re a generalist, but it’s easier to adapt to the changing business environment especially, in this age of Technology Disruption. Also, as generalist one can have a bird’s eye view of the issues at hand, which can help him to take up leadership roles.

Did you like the article and want to carry the discussion forward? You connect with me at d.santanu1@gmail.com

Brexit Impact on the Insurance Industry

June 23. The Leave vote being marginally higher than the Remain vote means there's a chance of invocation of Article 50 of the Lisbon treaty in the next two years. Although the results of the June 23 vote reflects aspiration of the people of UK but majority of the MPs are still in favor of Remain. Now, this adds to the complexity and results in uncertainty looking into future for all businesses which uses UK as launch pad for their European operations. In this article, we are going to look at how this political event impacts the insurance industry.

Financial Impact:

1. We are going to see a lot of volatility in the exchange rates . Post the Brexit vote, sterling hit a new 31-year low against the dollar. So, the profitability would be impacted.

2. The interest rates would be low as the central banks would be attempting to minimize economic risks.

3. There would be an increased need for more efficient and tighter financial models as far as underwriting and policy pricing is concerned.

4. Weighted average cost of capital (WACC) would rise owing to associated volatility and increased cost of raising capital. This would be reducing the valuation of UK assets.

Impact of Business Strategy and Operating Model

1. There would be a need for re-evaluation of market entry strategy for insurance companies looking for geographic expansion and involved in passporting business into the EU.

2. We shall see a decrease in demand of cross border insurance products amidst the uncertainty of other countries exiting EU post Brexit.

3. As a long term impact, there would be downward pressure on the margins owing limited premium growth and investment returns.

4. Impacted insurance companies may be look for inorganic growth options through M &A and strategic partnerships for venturing into US and APAC markets, if there are not present already.

Impact on regulatory and tax strategy

1. National and central banks may assert more authority over country specific regulations, thereby slowing down the process towards achieving a level playing field.

2. Cost of compliance to regulations would increase owing to the need for having different regulatory systems and technology for compliance to different standards.

3. Contractual obligations and agreements with the customers would requirement amendment.

4. Change in the right to work laws for UK based companies in the European countries may change, which might trigger relocation of offices based on client bases. This would have a natural impact on tax and governance issues.

Llyods which generates 11% of their revenue from EU wouldn't see much of an impact. Though Brexit comes a setback to them but since they have hubs in Dubai, China, Mexico, Singapore and Brazil, they can absorb the shock. Their playbook for distribution in the European part would require a transformation.

Hence, summing up, we can infer Brexit would impact the insurance industry but in the short term - the impact may not be grave. Yes, there would be cost and regulatory pressure on the industry with the need for transforming their business model in EU.

All about networking

In the world of consulting, "networking' is always the buzzword. From day one when a batch joins the organisation, they are encouraged to build their network. In the consequent leadership meetings the seniors leaders advice you to network. After interacting with the level 1 analysts and consultants, one feels they are little confused as in how to build the network.

Some questions that come to their minds are:-

1. How would the Director or manager feel, if I directly barge into their office? What if, they brush me aside saying with a smile "Hey, can we talk later. Lil busy now"

2. How do I approach that female colleague. How would she feel about my "reach out gesture" for the sake of networking. Hope she does not get me wrong?

3. I got so many contacts in my Lync account. How do I leverage my network?

And so on. Amidst all this. There's this dilemma - what matters more the size of the network or the depth of the relationships in our network? In other words what matters more - "Who you know or what you know". Or is it what you know about who you know. Do not expect me to answer the questions. I have never been a yes or no person. If you ask me for a suggestion, I would advise you to deal with the scenario as per the situation. The best answer may lie somewhere between black and white.

It has been found through research that if you are looking for a job change, the size of the network is more influential. On the other hand, if you are looking for your dream project within your organisation, it is the depth of the relationships with whom you network matters. And there are many other situations.

It has also been found that females network less than their male counterparts. This is one of the reasons why there are lesser women in cXo roles in the top Fortune 500 companies. Womens think that the additional 'hi/hello' as part of their networking can be perceived by some men as sexual advances. Hence, women tend to maintain that distance.

One suggestion in building your network is to meet the person face to face first and then carry forward the relationship online. In other words, Offline then online will add more credibility to the relationship and give us more returns than online followed by offline. Also, one feels, we need to manitain sustained connection with our network which means we need to be visibile to each other online, offline or otherwise. The visibility or recall is generally driven by some exceptional traits we possess or the memories of that first meeting.

I would share more thoughts on the topic in the later posts. For now, stay tuned and Happy Networking!

The Rise of Xiaomi

The Chinese smartphone maker Xiaomi is setting itself up to take on the world market after achieving a sizeable market share in South-East Asia. Xiaomi has the second largest market share in China next only to Apple. Xiaomi largest market, outside of China, is India.


The ambitious CEO, Mr. Jun Lei is never short of saying – “Apple and Samsung are gone” – mark his confidence! “Even a pig can fly if it stands at the center of a whirlwind,” he says. After several years in semiretirement, “one day I woke up and thought, ‘I’m already 40 and I’ve achieved nothing,” he says. “I had a dream when I was young to found a global, first-rate company.”

In April 2010, he founded Xiaomi with Bin Lin, a former Google and Microsoft executive. The name means “millet,” a Chinese staple that is nutritious but inexpensive. While consumers in China at the time could buy expensive foreign smartphones or cheap Chinese knockoffs, there was a void between that Mr. Lei decided to target. Xiaomi sells its high end 64 GB Mi Note Pro at $489 in China vis-à-vis Apple which sells iPhone 6 at $950, while Samsung sells Galaxy S6 at around $800. According to users, Xiaomi phone provide value for money.

Xiaomi is one of the most valued startups in the world. Privately held, experts put its valuation at $46 billion. Xiaomi though still a disorganized startup. It does not have the inventory of patents like its rivals – Apple and Samsung. Experts put Xiaomi employee count at 8,000 and that it has a very flat work culture for a start-up. Employees frequently cite Xiaomi’s egalitarian management structure, in which even junior employees meet with vice presidents and each department has high autonomy. “The flat management is one of the great things about Xiaomi,” says one former employee. “Everything operates on trust.”
Xiaomi keeps the marketing cost low by spending largely on cultivating a fan base instead of advertisements. It holds fan parties every few weeks in a different city, where executives meet enthusiasts and give gifts. It has an army of employees to interact with consumers on social media. Xiaomi sells the majority of its phones online, where prices don’t need to include a profit margin for retailers.

Xiaomi’s big test would be now when it’s making a foray into foreign markets – where regulations and consumer preferences are different. For example, in India, still a large section of the customer prefer purchasing their mobile devices from brick and mortar stores where they can touch and feel the device before buying it. Xiaomi has hired former Google executive Hugo Barra as global vice president to assist them with foreign market entry strategy. Let’s see how Xiaomi performs across the world!

Generics In A Tight Spot

Pharma- How generics drug industry is facing stiff competition

There is a growing trend which has been noticed in the pharmaceutical industry for the last couple of years. The phenomena can be attributed to the growing pressure on the generics segment from both the originators( who develop the drugs) and the generics manufacturers who produces the drugs in a large scale after it goes off space. What is the phenomena?

There is a growing shift of interest towards the specialty drugs and biosimilars, away from the generic drugs. The shift is more pronounced in the European markets. The specialty drugs comprises inhalable products such as eye drops, certain injectable therapies and topical treatments. Biosimilars are follow on versions of original drugs produced after the expiration of the patents is supposed to have same effect on usage. The experts attribute this to mainly four forces - increasing cost pressure from the consumers, powerful distributors and pharmacies, sustained pressure on the free production of generics and finally, fragmentation of the generics industry.

The manufacturing of specialty drugs and the biosimilars involve complex processes. Even after the drugs go off patent, the originators strives to hold onto them using a mix of commercial, regulatory, legal and product development strategies and hence, it is difficult to be easily replicated by the generics industry. The percentage market share of the originators after the drugs have gone off-patent in the generics, specialty and biosimilars segments are 55%, 70% and 85% respectively. This shows how the originators are trying to hold onto the last two segments and this is where the fight is going to be in the coming years as far as pharma industry is concerned.





So, there are three strategic options available for the generics industry:-

A. Fight it out in the highly competitive and commoditized generics segment using scale as a leverage and better marketing and distribution strategies.

B. Go for the more higher margin and profitable specialty and biosimilar segment by investing more in research and development activity.

C. Be present in both the segments.

The generics industry can learn from other industries like airlines, textiles, electronics, steel etc. and implement a similar business model.

For example, the airlines industry has a relentless focus on costs.
* They are focused on point to point travel
* They have standard fleet of planes to reduce maintenance and operational cost
* They have introduced online booking and checking

Similarly, the generics industry on these lines can focus on

* Reducing the number of SKUs (stock keeping units)
* Standardize manufacturing processes
* Focus on online and quick regulatory approvals

In textile industry, the focus is on fast changing consumer trends.
* They have systems and processes in place to monitor and identifying changing trends.
* The processes can easily prototype the new development and role out new designs and offerings in minimal time

Similarly, the generic companies need to have systems and processes in place to identify the latest developments in the sector and forecasting the demands in advance can go a long way to ensure profitability and early mover competitive advantage.

References:
Kreid, & Reeves. (2014). Transforming Europe's generics industry. Boston Consulting Group

The Online Consumer and E-tailing Trendz!

You want to buy that favourite USPA Red T-Shirt? And now you are confused, whether you want to shop it online or want to go to the retail outlet to purchase the same. You might be thinking of the saving in time and energy if online and against that you can try the T-shirt if you visit the store. Trust me, we all face the dilemma! And it has been found by the market research conducted that the preference to get it online or visit the shop depends largely on the products and to some extent on the psyche of the consumer. Products such are clothing & footwear, consumer durables are bought at the retail outlets whereas items as books, stationery, educational courses etc. are ordered online. So next time your confused, do not blame yourself!

There is an increasing trend of webrooming (browsing online and then going to a store to make purchases) vis-a-vis showrooming (go to a retail out to check the product first and then going online and comparing brands and prices before purchasing). Webrooming is especially relevant for electronics consumers. Are you a webroomer or a showroomer?

A study by a consulting firm revealed that consumers get a better price online as it is easier to compare prices and product features online. Etailers also offer better visibility and offerings when it comes to promotions. So one feels the best combination would be a retail outlet with an online presence rather than pure-play retail or online stores. Evidence to this observation is the growing popularity of the “Click and collect” services offered by some retailers where consumers can select and book the product online and drop by the store to collect it.

It has been observed that online customer experience can be largely categorized into the following steps – research, selection, supply, use and support. An illustration is provided below where the five stages are tabulated against the channels comprising the web, point of sales and customer touch points, social network etc.

Well, the above methodology is not all challenging the buying process as explained by the marketing Funnel but it is an online variation of the tradition marketing concept with the emergence of Web and Marketing 3.0. One feels that in order for the online consumers to have that seamless shopping experience, information and services should be integrated across all the five stages.

Yesterday I had an experience with a Customer Service department of a reputed domestic airline which clearly brings out the lack of information flow and integration across all the customer touch points. Seeing a special offer flashing on the website of an Airline (the ad occupied almost 20-25% visible area of the homepage), I called up the customer service for some clarification but was shocked and later amused that they were completely unaware of the offer and when I pointed them to their website, their supervisor promised me a call back. And it has been 48hrs, didn’t hear from them. Though, I clarified my doubt though some other means, the lack of co-ordination and flow of information for an Airline of that repute was strange!

What's in an MBA ?

Well this piece of article is especially for my non-MBA friends. I have been getting queries from quite a few of them if quitting an existing job for a MBA program is really worth it. Now that I am almost nearing the end of my MBA stint, so thought of sharing some experiences here! These are entirely my opinions!

To start with as well all know, we need to crack the Common Admission Test (CAT) more popular as CAT. And of course, we have the XAT, SNAP, NMAT, CMAT etc. for some of the other reputed colleges. Once, you are into a B-School, your initial days would comprise outbound tours, bonding sessions, personality and effective communication workshops etc. This is more of the fun part when we meet new fellows from diverse backgrounds be it academics, nationality, work etc.

In tier I – III B-school the pedagogy is almost similar. In the first year one studies general management with topics like business statistics, fundamentals of management disciplines – Finance, Marketing, Sales, HR, Operations, IT, international business etc., Strategy, tools like Excel, ERP, databases, foreign languages and so on. The idea is to equip oneself with a generalized skill-sets required by a manager.

At the end of the first year, we go for a two-month long internship program. The area of internship is generally the specialization we want to opt for in the final year. Though, there are cases where students do opt for a different specialization after the internship experience. Your internship may or may not have a stipend depending upon the company you are in. This is where top B-Schools have an edge over tier II peers. Around 70% - 100% of the students get paid internships in the top ten colleges of our country. Good performance during the internship can help you bag a pre-placement offer from the company.
Post internship, when we are back, it’s time for our specialization. The batch is restructured into Finance, Marketing, Supply Chain (Operations), Human Resources and Information Technology (offered in some colleges). I will take you through the specializations.

One needs to keep in mind that during the middle of the final year, the companies start visiting the campuses. So, the first six months of the final year is the most crucial and the toughest part of your MBA program.

On academic front, if you have opted for Marketing – you would come across areas like sales, integrated marketing communication, consumer behavior, international marketing, online marketing & social media, services marketing etc.
In finance, one would study corporate valuations, banking, capital markets, financial derivatives, investment banking - Mergers and acquisitions, private equity, hedge funds, bonds etc.
Human Resources would help you study industrial relations, managing performance, talent management, organizational structure design, negotiation, conflict management etc.
In Supply Chain, one studies Retail supply chain, materials and quality management, procurement, warehouse management and so on. As I had told before, the course structure is very similar in most B-Schools, the subjects might have a different name here and there.
One also gets an opportunity to purse exchange programs where in you generally go to a B-school in Europe, Singapore or US for a six to twelve months stint.




Now coming to the most important part, placements and return on investment. The fees in a decent B-School (top 30) vary from 10 lpa to 18 lpa. The median salary would be from around 7 lpa to 13 lpa. If you are working in a company and earning 5 lpa, do not ignore the opportunity cost i.e. 10lakhs for the two years you invest in a MBA program. But yes, with a MBA you get a broader perspective and can rise up the corporate ladder faster. And yeah, you are friends with some 100-200 influential peers.
Having said that, some other things which a placement report might not say – you can consider these both as positives or negatives. Trust me, it varies from person to person.

• It is difficult for people with high work-ex (3 yrs or more) to change their domain. If one is hell bent, he/she may have to be contend with a salary given to a fresher.
• Mostly marketing profiles are sales oriented.
• Only a few handy people land up with a investment banking profile.
• In a college, HR profiles are provided the lowest CTC.
• There would be a sizeable bonus or variable component in your salary.
• There is considerable difference between MBA academics and industry. Hence, it is advisable to pursue live projects to bridge the gap.
• Very few people receive the highest packages.

Apart from the academics and placement, there are whole lot of things that goes in a B-school which turns one into a global professional. There are committees – Corporate, Public & Alumni Relations, Fest committees, Food Committee, Clubs which provides a great exposure other than academics.

Hence, weigh your options and make the decision.

For any queries, you can write to me at d.santanu1@gmail.com.
You can also connect with me at
www.facebook.com/das.santanu or http://in.linkedin.com/in/santanudas1

Ad Campaign: Be Different

Wacky Ad Campaign: Delete 10 Facebook friends and get a Burger!


Shocked? You think my gray cells are going wierdoplasmic? Well, it is not so. I am speaking with all my intellect intact & vasanas tamed. This is the marketing campaign of the Burger King.

The promotion looks like this:

What would you do for a free WHOPPER? Now is the time to put your fair-weather web friendships to the test. Install " Whopper Sacrifice " on your Facebook profile, and we'll reward you with a free flame-broiled burger when you sacrifice 10 of your friends.
We need to install the Facebook app – “Whopper Sacrifice” for the hamburger.

Then, what we need to do is unfriend 10 of our friend’s .You delete them one by one and upon deleting the 10th friend you would get a Whopper coupon. The coupon entitles you to a free flame-boiled whopper. The best part is the sacrifices shows up in the daily activity feed.


For example,
Zanyam sacrificed Zantanu for a free Whopper.

Zanyam sacrificed Zarthak for a free Whopper.

Funny, huh? Well, I am sure you are thinking of unfriending your friends and adding them back again. Again and Again. Watch it because unfortunately you just have one burger per account! The promotion is just limited to one coupon per account.

You must be wondering if Burger King is promoting negativity in human relations like friendships. The fact of the matter is, it is just the opposite. According to them, the app increases our Facebook experience. It intends to filter out fake, spam profiles & acquaintances that are least important and indifferent to us and our lives. No wonder if we are to remove some one from your profile, we know whom to. That’s the concept Burger King wanted to promote. With the free coupons, you are increasing the footfalls in your store. Sale of side dishes, drinks & other items are going to go up. Brand recall coefficient is going to skyrocket. You are going to be back at Burger king.

Win-win model for Burger king & customers, right? Yes, it is but please spares a thought for Facebook. In fact, the promo was an instant hit. It is reflected by the jump in top line of Burger King as well as increasing number of footfalls and branding comes along. During the “Whopper Sacrifice,” 234,000 people were trumped for free burgers .

Coming back to Facebook, their profit rank algorithm is driven by the number of the interconnected profiles. More friends, family & network, faster spread their ad messages & apps. Damn!!! Zuckerburg scrapped the promo app, citing spread of negative emotions in advertising as the reason. Abrupt ending?

“UNFRIENDER” Rachel Heavers, with her daughter, Ellen, removed a lifelong pal in “a hormonal moment.” Now she says, “I really, really regret it.”


The article was inspired by my college friends - Zarthak , Zanyam & Zaran . Watching them having burger tonight in my room , I searched ‘burger’ in Google and bingo !!!. Found this unorthodox marketing strategy .

References : www.google.com
www.bk.com/


( Written by Santanu Das , studying MBA International Business at SIIB , Pune . You can mail your feedback to santanudas@siib.ac.in )

Vodafone & Airtel in India

Not bad - the Endless Goodbyes and Street Performer ads.In its bid for the emo connect, airtel succeeded this time too.Might be that airtel has brought the 'firangi' connect in its ads , but then lets not forget the Zain acquisition . Airtel has gone international now .
Nevertheless , the new ads are making way into ringtones and desktop wallpapers meaning they are high on the publicity and emotional connectquotient .Isn't that emotions is the primary factor that drives purchase , impulsive or not .Reasoning and logic , are only after thoughts of purchase .We all know, 80% of decision-making is emotional. Only 20% is rational. Reason leads to conclusion, emotion leads to action . So next time , when you go to buy something you might recollect these lines . But I am sure , you will give in to your impulse and see the point proved .Humans we are !

not so-different logos



With Vodafone and Tata Docomo , closing on the heels , the rebranding was necessary. To critics , the rebranding could have been on the 'desier' side , given airtel has a customer base of 200m only in India ! But then change is the constant , especially if intercontinental providers like vodafone storms into your bastille and grabs your pie .



Zoo zoos...Endless Goodbyes...Street Performer...Do the new... Flatteners at work!
High mobile density and penetration , lower rates , 3G services ..good for India and the world!