Innholdsfortegnelse for 7-Feb-21 i Business Today

The pandemic of 2020 will be remembered as a momentous turning point in history. The events that unfolded over the last nine months snowballed into a global health crisis, which led to a major economic setback. Almost two million lives were lost, devastating homes across continents. As economic activity stalled and world GDP contracted, job losses mounted, impacting livelihoods globally. Amidst these dark clouds was the silver lining of hope brought about by the inspirational efforts of many, particularly healthcare professionals who bravely and tirelessly strived to save lives, and communities that rallied together to demonstrate selfless compassion. It was heart-warming to witness how people responded with resilience to get back on their feet, how new partnerships were forged and how enterprises fast-tracked innovation to deliver breakthrough solutions. The government…

Never ignore the perils of over-leveraging. There is a need to manage debt and keep costs under control, irrespective of business cycles There is no substitute for prudent lending. Growth by sacrificing margins or lending norms will not lead to sustained long-term success Risk management is an extremely important function. Risks can be both on and off balance sheet There is a severe cost to pay for running an assetliability mismatch. Both assets and liabilities need to match in terms of interest rates and costs The structural demand for housing in India will always be strong. Demand for housing has proved to be relatively inelastic to interest rate cycles or temporary slowdown in the economy Corporates need to smartly invest in technologies, including being adept in responding to cyber security…

Need for better public health infrastructure: We need to have greater public health infrastructure so that we are ready for any calamity of this order in the future Focus on public hygiene, immunity: The pandemic brought back the focus on public hygiene, nourishment of children and women. All these should be our priority if we want to meet our Sustainable Development Goal targets Quicker implementation of reforms: The pandemic has reiterated that we have to implement reform measures as soon as possible so that we have the required systems in place Government alone not responsible for fighting the crisis: Covid-19 has brought home the fact that we have to get over this crisis together (private and public sector) and it is not just the government’s responsibility to fight a crisis…

Almost four decades in the consumer products industry, with the most recent seven years running India’s leading beverage alcohol company through the turbulence of the ‘Highway Ban’, demonetisation and GST, I have had my fair share of excitement and a few battle scars — but none has presented the unparalleled test of leading through a crisis, as in the year just gone by. Business As Usual When the news of Covid-19 in China started percolating in early 2020, we were already faced with the head-winds of a slowing economy and soft category growth. But, in an industry where dealing with issues is an everyday way of life, adopting a ‘business as usual’ mindset came naturally to us, and so we continued to run our business without being overly concerned. It…

2020 will leave its mark in history — as a year that altered lives and businesses, and reshaped the travel and hospitality landscape forever. The pandemic posed an unprecedented challenge and created a new, altered reality. Of all industries, travel was the worst hit. The first quarter of FY21 was a washout, as travel for both work and leisure came to a complete halt. With technology enabling remote working and several companies actively fostering work-from-home ethos, things were looking quite bleak for the hospitality industry. As one of the fastest growing sectors in the Indian economy, tourism contributes 9.2 per cent of the country’s GDP, and generates 43 million jobs, which constitutes 8 per cent of India’s overall employment. Tourism, therefore, is a very powerful instrument of income and employment…

The end of one year and the beginning of another is a good time to take stock of the time gone by. But where does one begin in a year that has upended nearly every aspect of our lives? 2020 was at once a reality check and a time of reckoning. It confronted us with problems we had never imagined and taught us lessons to last a lifetime. Covid-19 laid bare the vulnerability of several sections of our population which were disproportionately affected on economic and health fronts. Most of these people are from the bottom 60 per cent of India’s income distribution, the lower and lower middle-income segments, which we refer to as the ‘Next Half Billion.’ The pandemic tested the health of our public infrastructure – healthcare provision,…

It was in his 40s that Anil Chawla, Co-founder, Clix Capital, who worked with American Express, AF Ferguson and GE Capital, began participating in marathons. He soon took to hiking and mountain climbing as well. “Hiking caught my fancy as it has the element of added challenge and tests endurance — something different from regular sports” says Chawla. His firm unsuccessfully bid for private sector Lakshmi Vilas Bank last month. By the time Chawla was in his mid-50s, he had managed to tick off Everest base camp from his bucket list. “It takes time to plan and prepare for the ascent. The better you plan, the higher are the chances of having a successful and enjoyable ascent,” says Chawla. One should also look at important aspects such as investing in…

Revenue Receipts Shrink After years of Growth Central Government Net Tax Revenue Receipts (Y-o-Y % change for April-Nov) Joblessness Remained High For Most Months of The year Source: CMIE, Ace Equity, Care Ratings, NSDL, MOSPI Manufacturing Index Growth-ve in Five out of 12 Months MANUFACTURING INDEX GROWTH (%) Industrial Growth Remained Under pressure INDEX OF INDUSTRIAL PRODUCTION But Nifty Gives decent Returns NIFTY 50 RETURNS (%) NIFTY 50 P/E (TIMES)…

Adoption of digital sales channels among micro and small enterprises (MSEs) has increased significantly since the pandemic, reveals a CRISIL survey About 29 per cent MSEs surveyed used digital sales channels — online aggregators or market places, social media and mobile marketing—before the pandemic. Thus number shot up to 53 per cent among small enterprises and 47 per cent among micro enterprises as of November. About 60 per cent of respondents said adopting digital selling helped them weather the pandemic-induced stress, while the rest said it boosted sales AMONG MANUFACTURERS…. AND IN SERVICES…

In first 15 years since its debut in 1995, the Internet managed to reach only a meagre 7.5 per cent of India’s population. However, a decade more thereafter, the story is remarkably different. Driven by a surge in smartphone usage, nearly 50 per cent of the country’s population is now connected to the World Wide Web, and it is estimated that by 2025, close to a billion would be networked. It has also spurred the country’s digital transformation though there is still a long way to go to reach its true potential. While India has leapfrogged to the digital realm in the last few years, Covid-19 has amplified this pace multifold. The crisis, which hit us all unexpectedly, demonstrated just how big a role digitalisation plays in information flow. To…

Among the few books that are interesting and inspirational, Alfred Sloan’s My Years with General Motors lays out his brilliant managerial practices and provides insights into the new consumer economy that he and General Motors created over half a century ago. An entire era has gone by since, and we find ourselves in a situation that is uncannily similar to all great crises. And his words uttered in 1941 hold so true even today — “It is astonishing what you can do when you have a lot of energy, ambition and plenty of ignorance.” The lasting value of Sloan’s book is not really his dream, but the ambition, detail, and scale with which he built GM as a consummate organisation. One of the tenets he believed in and which truly…

Covid-19 has changed the world as we know it — our daily lives look nothing like what they were in the beginning of 2020. During these tough times the key is to digest the crisis in total and think of not only managing it, but also preparing for the post-crisis tone. For India Inc, it perhaps translates into ‘Innovation’ and ‘Adaptability’ and these words seemed to have echoed through their halls, as it has been truly inspiring to see how businesses across industries are revisiting their models and pivoting their offerings to suit the new normal. One particular organisational learning was remarkably quick, quicker to most of us, than some of the more arduous teachings of this difficult time. We learnt that adaptability is the only way to move forward.…

In the words of singer Jimmy Dean, “I can't change the direction of wind, but I can adjust my sails to reach my destination.” I cannot agree more with this as my experiences have taught me that there is no alternative to staying the course during challenging times. This means having faith in yourself and backing your people to sail through tough times. Just like Rome, a business isn’t built in a day. While its success depends on managing your existing resources and making the right decisions at the right time, it also means embracing the unknown and navigating the unchartered waters through agility and constant cost restructuring — simply, being open to evolution. The 25-year-long journey of building McDonald’s in India has been exciting and rewarding. But it has…

It was the Great Recession of 2007. The very survival of Ford Motor Company’s legacy was at stake. Bill Ford Jr., the Executive Chairman, approached family members (who held close to 40 per cent shares) to allow him to pledge their blue Ford oval as collateral for a revival package. The ‘do-or-die’ crisis caused the family to put aside their in-fighting and focus on making bold changes with willingness to take risks that changed their fortunes. In the histories of businesses and nations, crises have led to quite a few path-breaking changes. This was possible only because leaders dared to look beyond the extreme challenge to envision opportunities and execute them to fruition. I believe that we stand at a momentous inflection point of transforming the Covid-19 crisis into a game-changing…

The year 2020 challenged deep-rooted beliefs and transformed the way we work. Beliefs such as sales can occur only in physical branches or physical documents are required to be presented in person to close a sale or we will always need branches to service customers no longer hold true. The pandemic also tested the resilience, adaptability and sustenance of individuals and organisations. Adapting to long-lasting shifts in consumer and distributor behaviour is now a necessity. Displacement of the ‘usual’ and advent of the ‘new normal’ may be spoken of for generations to come. However, even in the context of this new operating environment, I believe that the fundamentals of running a business and leadership principles don’t get altered completely. Certain aspects of business may get amplified and certain aspects may…

India’s current account surplus narrowed from 3.8 per cent of GDP in first quarter of FY21 to 2.4 per cent in the second quarter of FY21 Capital account saw net positive inflows of $15.4 billion compared to $1 billion in first quarter, led by robust foreign direct investment inflows. Thanks to capital inflows, balance of payments (BoP) recorded a surplus Robust BoP is why the rupee strengthened from 76 to a dollar in April to 73.5 in December Source: RBI…

We are living in an interconnected world with an interdependency which is going to get stronger in the coming years. Leaps in technology, rising influence of social media, access to information at click of a button, progress in transport infrastructure and investors searching for profits beyond their territorial boundaries are some of the factors that have led to the majority of the economies converging into a synergetic marketplace. However, recent history has shown that with these strong financial and economic linkages, we have to be prepared for the unexpected. Over the past 12-13 years, the world has seen several crisis situations that have shaken the foundation of long-held beliefs. India has in recent years endured several crisis situations such as the global financial crisis of 2008-09, the US Fed’s Taper…

The government has been pushing big reforms even before the pandemic. The crisis has brought a greater sense of urgency for such measures. The objective will clearly remain the same, that is, Ease of Doing Business and Ease of Living. These are the two principal components of the government’s agenda so that economic growth accelerates, investments improve and lives of people, especially those at the bottom of the pyramid, become better. Because of the damage Covid-19 has done, we want to ensure that when the economy starts reviving, growth remains high on a sustainable basis. This is what the prime minister meant when he said that the crisis needs to be turned into an opportunity. We want to now put in place enough changes quickly so that when 2021-22 arrives,…

Why would a virus outbreak in one city in China throw the world into disarray? The answer lies in a mathematical theory proposed almost half a century ago. In a 1972 meeting of the American Association of Advancement of Science, mathematician Edward Lorenz gave a talk titled, ‘Does the Flap of a Butterfly’s Wings in Brazil Set off a Tornado in Texas?’ Lorenz was talking about the science behind complex systems, what we now know as the Chaos Theory. It tells us that the more complex a system gets, the more fragile it becomes. These systems are very sensitive to their starting conditions, so a tiny difference in the initial ‘push’ you give them causes a big difference in where they end up. This is also known as the ‘Butterfly…

The pandemic has upended all aspects of our lives and spared no business; every sector has had to adapt to remain afloat. In this rapidly changing environment, business continuity has been critical and organisations have had to quickly build resilience to tackle distressed situations. No one was prepared for the all-permeating impacts of the coronavirus. What this pandemic has taught us is that organisations need to lead with their values, protect their people, be customer-centric and focus on business continuity to overcome any significant crisis. As a business leader, my response to this pandemic is based on established culture and values, which have steered us through our 155-year history and will continue to guide us in a post-Covid world. People-first Decisions Our core values — do the right thing, put…