Business basics at the base of the pyramid

A decade after founding SKS Microfinance, CEO Akula explains how to make money at the bottom tier of the economic pyramid while raising the living standards of the people who occupy it. His company, which provides many small-business loans and other financial services to poor women in India, has a customer base that has been nearly tripling each year and now numbers more than 2 million.

Akula attributes his firm’s success in part to heeding three principles: Adopt a profit-oriented approach in order to access commercial capital; boost capacity by standardizing products, training, and other processes; and use the latest technology to reduce costs and limit errors. Collectively, these for-profit maxims reflect a rethinking of the conventional microfinance model, which imply aims to break even. Instead, SKS scales up to achieve growth; the margins are razor thin, but the volume is staggering – 160,000 new customers every month. Numbers like that give the company great leverage with partners – insurers, telecom providers, consumer goods manufacturers, and so on – whose products SKS’s clients need.

Customers are indeed central to Akula’s enterprise. Every SKS loan officer is required to do what’s best for the client, even if it undermines the firm’s short term interests. That means everything from traveling far and wide to meet with prospective borrowers on their schedules to scratching out repayment plans in the dirt with them. Such commitment scales up customer loyalty, which ultimately improves the fortunes of not only the clients themselves but also the company and its investors.

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The secrets to successful strategy execution

When a company finds itself unable to execute strategy, all too often the first reaction is to redraw the organization chart or tinker with incentives. Far more effective would be to clarify decision rights and improve the flow of information both up the line of command and across the organization. Then, the right structures and motivators tend to fall into place.

That conclusion is borne out by the authors’ decades of experience as Booz & Company consultants and by the survey data that they have been collecting for almost five years from more than 125,000 employees of some 1,000 organizations in more than 50 countries. From this data they have distilled – and ranked in order of importance – the top 17 traits exhibited by the organizations that are most effective at executing strategy.

The single most common attribute of such companies is that their employees are clear about which decisions and actions they are responsible for. As a result, decisions are rarely second guessed, and accurate competitive information quickly finds its way up the hierarchy and across organizational boundaries. Managers communicate the key drivers of success, so front line employees have the information they need to understand the impact of their day-to-day actions.

Motivators – like performance appraisals that distinguish high, adequate, and low performers and rewards for fulfilling particular commitments – are also important but are most effective when applied after decision rights and information flows have been addressed. That holds true for structural moves as well. Surprisingly, the most effective structural moves turn out to be promoting people laterally – and more slowly.

How can you make the most educated and cost-efficient decisions about which change initiatives to implement? The authors have developed a powerful online diagnostic and simulation tool that can help you test the effectiveness of various approaches virtually, without risking significant amounts of time and money.

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Why are we losing all our good people?

Is it a sign or just a coincidence that several talented employees have recently left Sambian Partners? The architecture and engineering firm’s latest defector refuses to tell the head of human resources, Mary Donillo, why he was unhappy. And the self-administered employee surveys don’t reveal much. When CEO Helen Gasbarian gets word of the next possible flight risk, she promotes the employee on the spot. How can Sambian stop the talent drain? Four experts comment on this fictional case study.

Anna Pringle, the head of international people and organization capability for Microsoft, thinks that Helen should take a hard look at Mary, who is not safeguarding the firm’s talent. Helen must also become an attentive listener.

F. Leigh Branham, the CEO of human resources consultancy Keeping the People, thinks that Sambian’s employees need a forum in which they can speak openly about their discontent. The candid discussions can expose the “triggering events” that impel people to leave, such as disconnect between the firm’s longstanding focus on innovative design and a more recent concern with profitability.

Jim Cornelius, the hair man and CEO of Bristol-Myers Squibb, once faced a potential employee exodus as interim CEO of the pharmaceutical company. He advises Helen to meet face-to-face with her most talented employees and assure them that she understands their concerns and desires.

Jean Martin, the executive director of the Corporate Executive Board’s leadership council, urges Helen to support a mission and culture to which employees will feel connected. She explains that although people join companies for rational motives, they stay for emotional ones. By the time unhappy workers tell their managers what’s going on, it’s often too late.

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World’s Most Powerful Luxury Brands

Louis Vuitton

Brand Value: $25.74 million

 Louis Vuitton’s economic growth is rapidly. It is the first brand with highst value in the world. Most recently, the company launched an ad campaign focused on its core customer, the luxury traveler, instead of the fashionista who has adopted the brand as her own in the past decade. In the fashion and accessories division, of which Louis Vuitton is a part, LVMH reported revenues of 1.5 billion euros in the first quarter of 2008, jumping 7.1% from 1.4 billion euros ($1.9 billion) in the corresponding period from 2007.

The following list shows other nine brands among ten top from the tenth to the second

 10. Fendi

Brand Value: $4.67 million

 9. Moët & Chandon

Brand Value: $4.95 million

 8. Armani

Brand Value: $5.12 million

 7. Hennessy

Brand Value: $5.4 million

 6. Rolex

Brand Value: $6.28 million

 5. Chanel

Brand Value: $8.67 million

 4. Cartier

Brand Value: $9.29 million

3. Gucci

Brand Value: $9.34 million

 2. Hermès

Brand Value: $9.63 million

 By 20500203 Entry: 13

 

Ethanol demand brings big profit for producers

Summary:

 

   The ethanol is the cash cow for the Anderson’s and soon catching the eye of big investors. a corn-derived ethanol that can be mixed with gas to power cars or, potentially, in hydrogen fuel cells. Ethanol that produce the fuel additive made from fermented corn that allows cars to run more cleanly.

Oppurtunities came when the new energy regulations passed by congress requiring the U.S. to use 7.5 billion gallons of renewable fuels by 2012. The companies stock has been raising since 2001 from 8$ to 40$ a share last Nov. but it went high upto 91.40$ as it announced plan for the second ethanol plant. Secondly, the soaring prices of gas are also the reason that big investors are betting their money on Ethanol an alternative much more in demand for the last decade. 

The big time investment in corn to produce ethanol. (250$million in two ethanol plants to supply the corn after getting from the farmers. However, the company faces two main threats : 1. Rise in Corn price due to less production would certainly not be healthy sign for the investors who are chipping in big time money. Secondly, drop in oil prices can cut down the ethanol profits. With the oil prices currently fluctuating the price setting would be also something crucial for these ethanol producers.

Another threat would be from conglomerates such as Shell and General Electric. Ethanol would only prove to be a money machine until its production remains cheap and it is efficient in terms of the benefits and promises it holds for the future.

 

Personal Opinion:

The original finding that there was a net energy increase when producing ethanol and even greater when ethanol was produced from from cellulose is a great sign for the future of alternative energy. The constantly inclining oil prices and fears of global warming have led to creat alternative energy such as solar energy and biofuels which are extracted from animal or vegetable matter. Another company Microgy says that it has plan to harvest natural gas out of cow manure. But for these alternative energies the start up cost is high unless they lure investors with a clear profitable future. However, Governments such as Japan, Germany and other places are subsidizing and encouraging the progress towards alternative energy. As for a consumer it is a good sign as current gas prices are scary.

 

By 20700795,Entry 13

20600794-Entry-12:How did blog posting helped me this semester?

First of all, I want to thank professor Abraham Lee for implementing blogs for helping us to apply what we have learned in class. Throughout this semester all the blogs I have posted helped me a lot to get to know the topic I was working on. This is a brief summary of my blogroll:

Entry-11: MIS series #2:HRM (Human Relationship Management using IT)

Entry-9: MIS series #1: CRM (Custromer Relationship management using IT)

Entry-8: Web 2.0 Series #5: YouTube

Entry-7: Web 2.0 Series #4: Wiki

Entry-6: Web 2.0 Series #3: What is Web 2.0?!

Entry-5: Web 2.0 Series #2: SaaS (Software as a Service)

Entry-4: Web 2.0 Series #1: Hidden power behind social networking

Entry-3: Why did Google succeed?

Enrty-2:IT and business in developing countries

Entry-1: How to make money using the internet?!

Since my discipline is Information Technology it was better for me to write about business related to Information Technology and its use. Also how can new technologies and trends can be used as business model would be easier and much more productive for me to write about. 

What actually did I learn through all these blogs?

1. My knowledge about IT improved a lot especially concerning businesses and their strategies.

2. My writing skills, technical writing skills improved in particular.

3. Learned to use WordPress’s blogging website and its functions. I also use Blogger.

4. Learned from others.

As a conclusion, I want encourage professor Abraham Lee to continue this activity and help students learn more about how to express themselves using blog and moreover help them to possess basic blogging techniques etc.

Thank you.

Erdenebilguun Gan-Och 20600794

P.S: I hope the way I write my titles (20600794-Entry-12:….) helped our TA to keep track of my blogs^^

Exxon Mobil

Exxon Mobil

Exxon Mobil Lubricants & Petroleum Specialties Company is the world’s number one supplier of lube base stocks and a leading global marketer of finished lubricants and specialty products. The company provides lubrication solutions for automotive, commercial, industrial, marine and aviation customers in nearly 200 countries and territories. It is also a major global player in petroleum specialty products. These include waxes for coatings and candles, process oils used in a variety of products such as synthetic rubber, and asphalt for road paving and roofing.
          The foundation for their market position is three strong brands — Exxon, Mobil and Esso — and a comprehensive product line incorporating the latest technology. The company’s marketing strategy aligns these brands with the needs of customer segments — Mobil for those needing high performance and Exxon/Esso for those seeking reliability and efficiency.

 

What Makes the Company to be Successful?

With outstanding global brands, proprietary technology and a low-cost, efficient supply chain, ExxonMobil is dedicated to creating value for its customers. Leading-edge technology gives ExxonMobil a competitive advantage, and ExxonMobil Research and Engineering Company is dedicated to strengthening that advantage worldwide.

Highly investing in RD contributed to many important refining technology advances. For example, catalytic cracking, which produces more gasoline from a barrel of oil, created one of the most far-reaching changes in the history of petroleum refining.

Their success also results from a long-standing practice of locating their major chemical plants adjacent to world-class refineries that provide economical feed stocks. That practice allows for a broad slate of financially attractive products that meet customer needs.

 Maintaining public trust. Every day, ExxonMobil serves the energy needs of millions of people around the globe. They succeed in this important role by maintaining public trust. To keep this trust, they strive to be a leader in corporate citizenship by operating with the highest integrity, maintaining a steadfast commitment to safety, health and environmental protection, and playing a positive.

The good reputation of the brand has given the company the good position in the business world, and now it is among the most successful desired company in the world.

entry no 12

by 20700796

Intel with Untitrust Problem

 

 

 

 

 

 

 

 

 

Intel has experience many years without facing any completion threats to affect it business. But recently, Intel has received a subpoena from the US Federal Trade Commission probing antitrust violations in the microprocessor market. The FTC’s inspection shows the series of antitrust investigations of Intel’s chip business.

The company believes its business practices are well within U.S. law,” an Intel representative said in a statement. The company added that prices for microprocessors have fallen 42.4% t in the last seven years–evidence, it argued, that competition in the market for chips is benefiting consumers. “When competitors perform and execute the market rewards them,” it added, taking a jab at AMD. “When they falter and underperform the market responds accordingly.

Intel accounts for about 76% of the worldwide market for microprocessors for PCs and servers, according to market research firm, IDC. AMD holds 23% of the market, down from a high of 25% in recent years.

Intel has been under antitrust inspection by the government in many years recently. Ten years ago, the FTC instigated an antitrust investigation of the company that eventually found no wrongdoing on Intel’s part.

The company would have problem in its business because the fact seems to be serious in t the world market. Only the way of not getting troubles in its business is to show if the company is innocent or try to avoid all acts that will make people lose confidence on it.

BY 20500203 Entry: 12

 

 

DE BEERS

I read an article about the company called De Beers which is the largest diamond mining company in the world today, producing over 40% of global gem diamonds from our 15 mines in Africa, as well as sorting and selling the majority of the world’s rough diamonds.

This company has a long and proud tradition of commitment to good corporate citizenship. This commitment is expressed in part through their considerable social investment activities in South Africa, in Botswana and Namibia and through their investments made in social development.

It also leads the industry with its ‘Best Practice Principles’, a set of guidelines, designed to ensure that everyone in the diamond chain observes the highest professional ethical standards of business practice. De Beers believes that adherence to its Best Practice Principles will ensure that consumers will continue to have confidence in the ethical standards of the diamond industry when they are buying a diamond.

POSTED BY 20700735

ENTRY NUMBER

REFERENCE:www.debeers.com

OIL From Africa

Summary:    The World Bank announced the inauguration of a new Chad-Cameroon oil pipeline on Thursday and promised to help prevent this project from leading to poverty and corruption as such projects so often have in other poor nations.

In one of its biggest gambles, the World Bank broke precedent and put money into the high-risk $3.7 billion private oil project in an effort to prove that its development experts could reverse history and ensure that the new oil money could work for the benefit of all citizens of Chad and not just the elite.

The pipeline represents the World Bank’s single largest investment in sub-Saharan Africa. By supporting the project, the bank said it had helped ensure that oil companies did not abandon the pipeline, which crisscrosses some of the poorest and least stable countries in the world.

Ali Khadar, the director for Central Africa at the World Bank, said, ”We have put into place components to channel earnings from oil to poverty reduction, for health, education, the rural sector and to protect the environment.”

In an elaborate news conference connecting reporters and experts in Washington, London, Paris and Ndjamena, Chad, World Bank officials said that they would break the curse of oil that has brought misery to nearly every other oil-producing African nation. An oil consortium including Exxon Mobil, ChevronTexaco and Petronas, the state oil company of Malaysia, built the 665-mile pipeline and oil facilities on the Atlantic Coast and will reap more than 60 percent of the estimated $13 billion revenues over 25 years, according to World Bank estimates.

But environment advocates and human rights groups have yet to be convinced. They said the project had failed to protect labor rights and human rights and had needlessly damaged the rain forest that the pipeline traverses through Cameroon on its way to the Atlantic Ocean. Indeed, the government of Chad spent some of its signing bonus from the private oil consortium on military needs before the World Bank interceded and stopped the spending on arms.

Jon Sohn, the international campaigner for Friends of the Earth, said: ”Chad and Cameroon are failing on environmental, social and poverty alleviation grounds. Why is the World Bank using public funds to promote the oil business?”

Chad, which has a poor human rights record and is one of the world’s poorest countries, will receive an estimated $2 billion over the coming years and that is expected to double the average annual income to $550 from $250 in the next three years, according to World Bank officials.

”The whole issue of good governance is essential,” said Rashad Kaldany, the director of oil for the International Finance Corporation, which is part of the World Bank group. ”It was unprecedented that we got involved, but we wanted to see that the government created a revenue-sharing plan that was transparent with sufficient checks and balances — if we didn’t take some risks we’d never get anywhere.”

In this first venture in an oil project, the World Bank lent $92.9 million to the Chad and Cameroon governments and helped arrange another $200 million in other loans.

In return for its help, the bank worked with the Chad government to set up committees including all parts of the Chad government as well as local labor unions, human rights groups and other nongovernmental organizations charged with deciding how the oil revenue is spent and then ensuring that the revenue reached the intended beneficiaries. If the project succeeds, the officials said it may prove a model for other oil-producing countries, especially Iraq.

African oil has taken on strategic importance in the Bush administration as it looks for alternative sources of energy. The Chad project won approval from President Bill Clinton in 1998.

Susan Rice, who was then assistant secretary for African affairs at the State Department, said the administration was won over by the World Bank’s plan to transform oil from becoming an instrument of corruption and exploitation into one to improve human rights and reduce poverty.

By:20700795  Entry 12