Strategic tools for the practising manager

KIT

THIS WEEK: The market for college bags for youth* in India

The total value of the bags market in urban India for the youth is estimated at Rs 1,470 crore a year.

The market for college bags is 25 per cent of the total bags market and is valued at Rs 370 crore.

The total volume of the college bags market in urban India is estimated at 0.46 crore units a year, which is 34 per cent of the total market for bags.

On an average, men spend Rs 570 per unit on college bags, while women spend Rs 450 per unit.

Fifty-two per cent consumers prefer buying college bags from multi-brand outlets.

Thirty-eight per cent consumers prefer shopping at popular shopping markets/ streets, when they want to purchase college bags.

*Age group 15-25 years (SEC A & B of urban population) in India

NUGGETS
Selections from management journals

A strong majority of executives around the world expect a slowdown in the United States to have a negative effect on their national economies, according to the latest McKinsey Global Survey on economic conditions. And nearly 90 per cent report at least a moderate linkage between those economies and the US economy.

Outside China, India and other developing markets, far more executives say that the linkage between their national economies and the US economy has loosened rather than tightened over the past three years.

Overall, respondents expect economic conditions in their countries and industries to deteriorate in the near term: inflation fears have risen, and hiring prospects are creeping downward.

Economic and hiring outlook, First Quarter 2008: A McKinsey Global Survey
The McKinsey Quarterly, April 2008
Read this survey at www.mckinseyquarterly.com

Privatisation of airports was supposed to be the next big thing in India's civil aviation sector. Unable to fund the infrastructure needs of the country's rapidly growing air travel industry, the government has turned to public-private partnerships which, in theory, allow it to tap into the efficiency and entrepreneurial problem solving that private companies can offer.

But delays, mounting project costs and concerns about monopolies are clouding the horizon of consortium-led projects to upgrade or build new airports.

While many feel complete privatisation might be the way to go, others argue that airports are a basic component of infrastructure, and as such should exist for public benefit, not profit. Experts from the Indian School of Business and private industry weigh in.

Are private airports in India ready to take off?
India Knowledge@Wharton, April 4-17
Read this article at http://knowledge.wharton.upenn.edu/india/

Most emerging market economies are unlikely to de-couple from the US, a premise behind the sharp, brief rally in emerging stock markets last fall.

Since the American economy and stock market started weakening in late 2007, so have most emerging markets. Some developing countries may provide short-term investment gains due to specific economic factors.

Are these increases sustainable? In this opinion piece, Ignatius Chithelen, managing partner of Banyan Tree Capital Management, an investment firm in New York City, argues that with most gains from emerging stock markets already behind, it may be time to sell.

Emerging markets: Is it time to cash in?
India Knowledge@Wharton, April 4-17
Read this article at http://knowledge.wharton.upenn.edu/india/

Amp Up, a wildly popular electronic-music game, is the brainchild of KMS's cherished programmers, who now spend their time trying to keep customers dazzled with upgrades. But a couple of start-ups have ripped off the idea using their own code "" which is open source.

Now they're demanding that KMS float with the rising tide and join the open-source community. How could the company make money without its IP? And why should it try? Some experts comment on this fictional case study.

Jonathan Schwartz, the CEO of Sun Microsystems, says that if KMS is confident it knows what its customers will want next "" and if it's content with a small corner of the market "" it should stay proprietary.

Eric Levin, the executive vice president of Techno Source, suggests that KMS take a middle path: license its software to third-party companies and add features to promote community building.

Gary P Pisano, of Harvard Business School, points out that an open-source strategy could increase Amp Up's rate of improvement, enhance users' satisfaction with the game, and reduce KMS's development costs. But if the company stops competing on the basis of its code, it had better be sure of the strength of its downstream capabilities.

Open Source: Salvation or Suicide?
By Scott Wilson and Ajit Kambil
Harvard Business School, April 2008
Read this article at www.hbr.com

In a recent interview, Charles F Goetz, adjunct professor of organisation and management and distinguished lecturer in entrepreneurship at Emory University's Goizueta Business School, explains "Marketnomics," the analytical tool he developed that uses a combination of primary market research and calculus to quantify and prioritise the value customers are likely to place on a company's list of product features and benefits.

The result is product offerings with substantially greater perceived value at no additional cost to the business.

The 'Marketnomics' difference: A handy tool for maximising product value
IKnowledge@emory, April 9- May 13
Read this article at http://knowledge.emory.edu/