Tim: "Hey dude! I've just bought a MP3 player. Sony Network Walkman, 20 GB. Even John has bought a Creative MP3 player. What about you?"
Jim: "I have an iPod"!
Most of us have heard a conversation of this type. It shows that Apple is way ahead of its competitors in terms of product conception and delivery. This way, it has been able to carve a niche for itself.
It is of course not a new phenomenon. People refer to photocopiers as Xerox. In India, washing powders are generally called Sabena. There are so many such examples.
Even though Apple has not been able to make iPod a synonym for MP3 players, it has dominated the market perception by making them identify iPod as a different product line altogether!
That is a big success story for Apple. No wonder that a good chunk of its revenues is earned from Ipod sales.
Tuesday, May 31, 2005
Monday, May 30, 2005
Outsourcing - A Global economic perspective
The term "outsourcing" evokes contrasting and contradicting emotions among people of the developed nations. While the victims swear against this concept, the scholars proclaim that this concept is the growth engine for the future!
No wonder! But whose side should we take? Sometime back, I heard a story of an employee working in MNC committing suicide because his job was outsourced to another company. This evoked a series of protests and failed legislations. But what could be the macro economic perspective of this phenomenon of OUTSOURCING?
Ponder over this fact. Off late, there has been a very popular Internet site that sells the best products at unimaginable discounts. And the discounts are at least 30%. This is something really cool because one gets the best product of superior quality at a very reduced price. It is of course known that the concepts of huge discounts are more an issue of reduced profit margin. But in spite of this, companies are prepared to sell at take away prices. This is primarily because the MNCs are able to globally source in their products. For example, a laptop manufacturer could drive the R & D work in USA, give the manufacturing contracts to a South East Asian country, develop the related software components in a development centre located in India and finally deliver the product in California. The cost advantage incurred is really significant to be ignored by the uproars of anti-outsourcing campaigns.
Also, the laptop that usually sells for 2000 USDs is now available for 1100 USDs. Essentially, the manufacturer transfers a part of his margin to the end user. This results in a volume business, which in turn runs the macro economic engine of the country.
This simple logic proves that outsourcing is a win-win situation for all the stakeholders!
No wonder! But whose side should we take? Sometime back, I heard a story of an employee working in MNC committing suicide because his job was outsourced to another company. This evoked a series of protests and failed legislations. But what could be the macro economic perspective of this phenomenon of OUTSOURCING?
Ponder over this fact. Off late, there has been a very popular Internet site that sells the best products at unimaginable discounts. And the discounts are at least 30%. This is something really cool because one gets the best product of superior quality at a very reduced price. It is of course known that the concepts of huge discounts are more an issue of reduced profit margin. But in spite of this, companies are prepared to sell at take away prices. This is primarily because the MNCs are able to globally source in their products. For example, a laptop manufacturer could drive the R & D work in USA, give the manufacturing contracts to a South East Asian country, develop the related software components in a development centre located in India and finally deliver the product in California. The cost advantage incurred is really significant to be ignored by the uproars of anti-outsourcing campaigns.
Also, the laptop that usually sells for 2000 USDs is now available for 1100 USDs. Essentially, the manufacturer transfers a part of his margin to the end user. This results in a volume business, which in turn runs the macro economic engine of the country.
This simple logic proves that outsourcing is a win-win situation for all the stakeholders!
Thursday, May 26, 2005
Livelihood and Infrastructure
In almost all the international trade and economic forums, one tends to hear voices on improving the infrastructure to embrace the growth in the next century. It is more often pronounced in the policies of the nations like India, China, Brazil and other developing nations.
One concern among the policy makers in these countries should be to bridge the infrastructure gap as well as to bridge the economic gaps. When I say economic gap, I mean the provision of the very basic living amenities.
Recently, I came across an article discussing the case of wireless internet connectivity across the city of Philadelphia. The connectivity is going to be at a very subsidised rate for the less privileged. The authorities also plan to give computers once the plan takes off. The city authorities aim to bridge the digital divide by this approach.
Compare this scenario with the one in a place like Mumbai - India. The city is supposed to be the commercial capital of the country. It houses the head quarters of most of the MNCs and Indian conglomerates, Stock market and Bollywood. Yet, the city has the largest slum dwelling in the world. The crime rate is quite high and the economy is getting choked because of very basic infrastructural bottlenecks like traffic congestion! Even though similar problems plague other major cities like New york, the infrusture in the advanced countries is far ahead to cope with the demands.
It is high time for the developing economies to set their basics right!
One concern among the policy makers in these countries should be to bridge the infrastructure gap as well as to bridge the economic gaps. When I say economic gap, I mean the provision of the very basic living amenities.
Recently, I came across an article discussing the case of wireless internet connectivity across the city of Philadelphia. The connectivity is going to be at a very subsidised rate for the less privileged. The authorities also plan to give computers once the plan takes off. The city authorities aim to bridge the digital divide by this approach.
Compare this scenario with the one in a place like Mumbai - India. The city is supposed to be the commercial capital of the country. It houses the head quarters of most of the MNCs and Indian conglomerates, Stock market and Bollywood. Yet, the city has the largest slum dwelling in the world. The crime rate is quite high and the economy is getting choked because of very basic infrastructural bottlenecks like traffic congestion! Even though similar problems plague other major cities like New york, the infrusture in the advanced countries is far ahead to cope with the demands.
It is high time for the developing economies to set their basics right!
Tuesday, May 24, 2005
The Beginning!
Everyone has the most cherished memories dating back to one's college days. I have many. One of them was the venture to start an Entrepreneurship centre at BITS-Pilani. We were a group of six guys, who ventured to achieve this. Our aim was to make the student community a budding ground for entrepreneurship. Thus was created the Technonology Incubation Center at BITS-Pilani.
We wanted it to be named Shreshta. But for better reasons, the current name was chosen. So, I have chosen this name for my blog.
The credit for the existence of the center goes to the management of the institute and to the students who carried forward the basic framework that we started with.
To continue with the knowledge sharing experience, I shall keep posting my random thoughts.
Our shreshta team: Amudhanvel (ammu - http://amudhanvel.blogspot.com), Balaji CH (bajji), Bharath (Nob), Shanmugan (shangy), Raghavan (RT) and me.
We wanted it to be named Shreshta. But for better reasons, the current name was chosen. So, I have chosen this name for my blog.
The credit for the existence of the center goes to the management of the institute and to the students who carried forward the basic framework that we started with.
To continue with the knowledge sharing experience, I shall keep posting my random thoughts.
Our shreshta team: Amudhanvel (ammu - http://amudhanvel.blogspot.com), Balaji CH (bajji), Bharath (Nob), Shanmugan (shangy), Raghavan (RT) and me.
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