Strategic tools for the practising manager

KIT

THIS WEEK: The Indian wine market

The Indian wine market currently stands at Rs 570 crore in value terms.

The per capita consumption of wine remains extremely low in India. However, there is growing consumer interest in wine. In the past few years, a number of wine clubs have emerged in Delhi, Chandigarh, Hyderabad, Bangalore and so on.

The wine market is expected to reach 8.3 million litres by 2010 in volume.

Nearly 80 per cent of wine sales are accounted for by the major cities, in particular, Delhi, Mumbai, Chennai, Kolkata, Pune and Bangalore.

West India accounts for over 41 per cent of total volume sales of wine in India and a close second is North India with nearly 29 per cent volume sales.

Sixty-three per cent of the volume sales of wine is through off-trade channel in five-star hotels, pubs and restro-bars.

NUGGETS
Selections from management journals

EXECUTIVES ONCE thought of M&A, if they thought of it at all, in terms of only a few large deals a year and focused on synergies and cost cutting. Now many companies are looking for a number of smaller acquisitions that, when pulled together, might grow faster than individual ones would.

This pursuit of growth through rapid-fire deal making has increased the pressure on M&A managers to get the underlying process right. Most companies are not prepared for the intense work of completing so many deals.

There may be no single approach that every company can use to ensure success, but the companies most admired for their deft management of M&A exhibit some common traits.

Running a winning M&A shop
By Robert T Uhlaner and Andrew S West
The McKinsey Quarterly, March 2008
Read this article at www.mckinseyquarterly.com

ESTABLISHED STOCK and derivatives exchanges around the world have prospered mightily in recent years, thanks to record trading volumes and a proliferation of new products. So have new alternative trading venues and clearinghouses.

But a range of forces ""more laissez-faire regulation in Europe and the United States, centralisation and rationalisation of post-trading infrastructure, new technologies, and savvy entrepreneurs "" are making exchanges and their investors vulnerable to more challenging times ahead.

Since further consolidation is inevitable, leading exchanges should continue to examine opportunities to make acquisitions. But to preserve profitability as conditions change, they should also seek to refine their product and service offering, as well as explore sources of growth in other products, geographies, and parts of the trading value chain.

What's next for exchanges
The McKinsey Quarterly, March 2008
Subscribe to this article at www.mckinseyquarterly.com

INDIAN BANKING HAS long been protected territory, kept away from the free play of market forces. When institutions merged, the impetus often came from regulators such as the Reserve Bank of India (RBI), who saw the deal as a way to protect depositors and employee jobs.

But as the February merger of HDFC Bank and Centurion Bank of Punjab shows, market forces are now starting to inspire the urge to merge.

While some industry experts describe the merger of "two strong banks" as a "very healthy trend," others wonder whether consolidation will help the banking industry at a time when India needs more banks, not less.

Are bank mergers in India entering a new era?
India Knowledge@Wharton, March 06, 2008
Read this article at http://knowledge.wharton.upenn.edu/india/

THE BOOM IN THE economies of many Asian countries is creating opportunities for Western financial firms that hardly existed a decade ago, according to two keynote speakers at the recent Wharton Asia Business Conference.

Thanks to their double-digit growth, the developing Asian economies, led by China and India, are minting new millionaires seeking managers for their money, said Renato de Guzman, CEO, ING Private Bank-Asia.

They are also giving birth to new firms that are seeking merger and acquisition advice as they expand at home and abroad, according to Helge Weiner-Trapness, a managing director in Asia with JP Morgan.

Young, rich risk-takers: Asia's thriving economies beckon western companies
India Knowledge@Wharton, March 06, 2008
Read this article at http://knowledge.wharton.upenn.edu/india/

MARTY ECHT, THE NEW head of marketing at Hunsk Engines, is determined to bring the motorcycle maker back to its roots. He says it's not enough to project authenticity to customers "" employees must personally subscribe to the brand's values. Should the company's CEO support Marty's "real deal" vision? Five experts comment on this fictional case study.

Bruce Weindruch, the founder and CEO of the History Factory, says that an authenticity-based campaign can be effective "" but only if it's truly drawn from history. Marketers like Marty often remember their organisation's past in a golden haze. Weindruch recommends exploring old engineering drawings, ads, and product photos in order to understand what customers and employees really valued back in the day.

Gillian Arnold, a consultant to luxury fashion and fine jewellery brands, thinks Marty's approach is right: people in key marketing posts must be passionate about their products and know them inside and out. She argues that the CEO needs to commit more fully to the new campaign and address the significant gap between the staff and the brand.

James H Gilmore and B Joseph Pine II, the cofounders of Strategic Horizons, point out that Hunsk needs to manage customers' perceptions rather than trying to be a "real company" or forming a management team whose personal interests match the brand. People purchase a product if it conforms to their self-image; that alone determines the brand's authenticity.

Authenticity: Is it real or is it marketing?
By David Weinberger
Harvard Business Review, March 2008
Read this article at www.hbr.com

STRATEGY-MAKING has changed. No longer is the carefully conducted industry analysis or deliberate strategic plan a guarantee of success. Speed matters. A strategy that takes too long to formulate is at least as ineffective as the wrong strategy.

But, how do decision-makers make fast, yet high-quality, strategic choices? This article describes the powerful tactics that fast decision makers use. They maintain constant watch over real time operating information and rely on quick, comparative analysis to speed cognitive processing.

They favour approaches to conflict resolution that are rapid and yet maintain group cohesion. Finally, their reliance on the private advice of experienced counsellors and on integration with other decisions bolsters their confidence to decide quickly in the face of big stakes and high uncertainty.

Speed and strategic choice: How managers accelerate decision making
Kathleen M Eisenhardt
California Management Review, Winter 2008
Subscribe to this article at http://cmr.berkeley.edu/