JULY 21, 2002
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Nasscom Does Some Brain Racking
Slowdown or not, NASSCOM is still eyeing Indian software revenues of $77 billion by 2008. Just what will make it happen? To get a strategy together, it got some top minds to meet in Hyderabad at the India it and ITEs Strategy Summit 2002. A report on what came of it.


Q&A With Ashraf Dimitri
The CEO of Oasis Technology, a key provider of e-payments software, tries to win over converts to a new system.

More Net Specials
Business Today,  July 7, 2002
 
 
A Simple Twist of Disinvestment
Privatisation may be all about raising money for the government, but to successful bidders it has been an opportunistic play.

Satish Sud entered public consciousness in style-by spending Rs 96 crore. That's the amount Delhi-based Sud's Eros Group-it owns the capital's Park Royal Intercontinental hotel-bid for the 350-room Kanishka, an ITDC-owned property in the heart of the capital. Sud's isn't a familiar name. Nor, despite Park Royal's lustre, is Eros'. But its money is good enough for the government-apart from the Rs 96 crore, the group will spend some Rs 40 crore on refurbishing Kanishka.

None of ITDC's 17 hotels sold thus far have been acquired by known hotel chains. Mumbai's Juhu Centaur, for instance, was snapped up by Tulip Hospitality-its CEO Ajit Baburao Kerkar has striven for respectability ever since he departed Indian Hotels in 1997. He may well have found it; all thanks to the disinvestment process. ''These purchases represent good value for entrepreneurs,'' points out Vimal Bhandari, Executive Director, IL&Fs. In terms of coming in from the cold, though, they're priceless.

  Coke Is It  
  What Price, Independence?  
  What's In A Name?  

Disinvestment has also provided some companies with easy entry-options. Anil Agarwal's Sterlite acquired Hindustan Zinc for all of Rs 445 crore. And coupled with Sterlite's earlier purchase of aluminium major Balco, it helps Agarwal move towards his objective of building ''a global mining and metals company''. Contrast that disinvestment-induced-aggression with some d-i-defensiveness. Reliance Industries' purchase of IPCL, and Indian Oil Corporation's of IBP are both examples of companies consolidating market share, building economies of scale, and, most importantly, ensuring that others don't mess around in their backyards.

It could be a coincidence but some companies wrestling with issues related to implementing their articulated strategies, or with the strategy itself might have found the stimulus they needed in an unlikely source, the government's disinvestment drive. Tapping the domestic market for it services has long been on TCS' agenda. The government, and government-owned organisations are the largest customers in this domain. TCS' acquisition of CMC, then, gives the it major an edge. If CMC was the topping on TCS' already-successful strategy, VSNL was the ingredient that made the Tata Group's telecom strategy whole. In one fell swoop, the group, gained entry into both the domestic and the international long-distance telephony businesses. Suddenly, its telecom strategy-with Tata Teleservices, Idea, and VSNL contributing their mite-was amongst the most good-looking in the business.

Companies such as these are the real beneficiaries of disinvestment; the money that has accrued to the government is purely incidental. Intriguingly, most multinational companies have chosen to sit out the process (apart from a Shell bid for IBP). This, despite attractive valuations and a largely transparent approach by the government. One reason for that could be an apprehension among multinational companies concerning their inability to change the culture and mindset of public sector companies. Maybe they'll wait for the buyers to turn them around before inching in as strategic partners.


PUBLIC EYE
Coke Is It
Tired of bad press, the company is hoping man-at-large Suhel Seth's image consultancy is the real thing.

As any company that is perceived to be a repository of bad news is bound to do, Coca Cola India has gone out and got itself a new image counsellor, Suhel Seth, managing partner, Counselage. Will Seth be able to work his magic where the likes of BMRP, Integral pr, Clea pr, and the-best-inhouse-corporate-communications-talent-money-can-buy failed? Coca Cola thinks so. "Wait and see," warns Sunil Gupta, the company's latest head of corporate communications. "This will be a great year on both the performance and the image front." Seth is off to a start of sorts: he's managed to garner some publicity for Coke's pet recycler in Delhi and water education programme in the slums of Yamuna Pushta, again in Delhi. "The company has got no credit for what it has done," claims Seth. "It is a company with great intent and delivery but poor communication." We'd like to wait before taking a call on this.


MIDDLING
What Price, Independence?
A clutch of independent mid-sized agencies thrives in a market dominated by the conglomerates. For how long?

They're young (between a decade or two old), managed by true-blooded advertising professionals-turned entrepreneurs, boast billings between Rs 10 crore and Rs 200 crore, and are fiercely independent. Meet India's mid-sized agencies, minnows (some are fairly big ones) in a market dominated by the Big Four advertising conglos, WPP, InterPublic Group, Publicis, and Omnicom. Business is booming: companies with less than Rs 3 crore to burn settle for the independents-going to a biggie would mean receiving step-motherly treatment; opting for a hole-in-the-wall type outfit, wholly ineffective advertising. ''Without us, mid-size clients don't have a choice,'' says Sushil Pandit, the Director of three-year old Delhi-based The Hive (billings: Rs 10 crore).

What they lack for in size, these agencies make up through service quality. And that's found favour with businesses with limited means but big aspirations.

There is an other-side to the story. ''Clients used to working with 'Global Club' agencies don't even invite us to pitch,'' rues Ramesh Narayan, the Managing Director of Mumbai-based Canco advertising (Rs 25 crore). There's also the halo effect. ''Big agencies get away with less,'' complains Suresh Pillai, Managing Director of the Chennai-based Fountainhead Communications (Rs 52 crore). ''We need to work that much harder.'' Only, instead of being bogged down by such details, Ulcer Gulch's bantamweights plug on. Mumbai-based Imageads (Rs 50 crore) recently became a member of Worldwide Partners, a league of 120-odd independent agencies across 56 countries that aims to provide multinational companies with a taste for independents access to them across borders.

The Big Four, however, are on the prowl. Last year Publicis acquired Delhi-based Maadhyam (Rs 32 crore), and other independents are undoubtedly in the sights of the predators. Still, it's beautiful while it lasts.


NOMENCLATURE
What's In A Name?
Everything, and telco Hutch came perilously close to finding that out.

Hutch missed being part of the exclusive folly club detailed below, but only just. Its new eponymous brand Hutch can easily (and erroneously) be interpreted to mean idiot in Kannada. The company's CEO (South), Rajiv Sawhney, stresses that the Kannada word for idiot is hootcha, but is just a trifle touchy about the subject. ''I think I'd know what it means,'' he snaps. The man's right; the K-word is either hutcha, hootcha or hatcha depending on how it is pronounced. Hutch didn't really have an option but to go with an abbreviated version of the corporate name. And a nuance of pronunciation saves the company this time.

General Motors: It launched the Chevy Nova in Mexico and then discovered that Nova meant it won't go in Spanish.

Parker: Oops! The writing instruments major blundered by assuming the Spanish embrezar meant 'embarrass'. Its campaign read, ''it won't leak in your pocket and impregnate you''.

KFC: The brand's finger lickin good slogan translates into Chinese as 'Eat your fingers off'.

Coca-Cola: When first launched in China, the phonetic rendition meant bite the wax tadpole. The company had to change the pronunciation to something that meant happiness in the mouth.

American Dairy Association: Its Got Milk? campaign was translated into Spanish for use in Mexico. The headline: "Are you lactating?"

Rolls-Royce: Its Silver Mist model did poorly in Germany where mist is slang for manure; years later, Clairol's Mist Stick faced the same problem.

Electrolux: ''Nothing sucks like Electrolux'' read an American campaign for the Swedish consumer durable company.

Ford: Its Pinto flopped in Brazil where the word is a colloquialism for tiny male genitals.

Gerber: The company marketed its baby food in Africa the same way it did in the US, in packs with the picture of a smiling baby. Only, in Africa, it is common practice to put a picture of what's inside the pack, outside.

Colgate: The company launched a toothpaste branded Cue in France. That's the name of a notoriously hard-core French porn magazine.

 

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