What 'drives' a company MOST?
The product they sell...
The quality they offer...
The market that they enter or exist in..
OR
The CEO?
Reading and hearing of both the small&successful and big&successful, which ironically follow the same mantra and maintain the same focus, it becomes even more clear that apart from destiny and many such factors, there's only ONE thing that can and will put you up with those we read about.
And that is: Your attitude, as the one(owner/CEO/Chairman...etc etc)
Many a times, we hear about looking at the big picture, rather than the small..which to me means, to be able to take risk or compromise for now, for better results tomorrow. This means two things,
one: to take care of the immediate problems First!and then creating the Structure on this solid base,
and two: Never being selfish to not let others benefit who have been a part of the the process, if everyone is benefiting from this win-win situation, only then will the effect of this success last forever(esp as a beginner)
I read somewhere that this was the strategy of the famous madwadis
But compromising is one such factor which cannot be applied everytime and in every situation. It varies, for ex:you will never compromise on the quality of your product just because there are temporary financial restrains, but you can compromise on the expenses or the quantity produced, for the time being.
Ofcourse, one should never let a situation get so worse, that you have to make compromises on the quantity, so planning is very important. Again, we have to consider the Big picture.
As I was mentioning, what drives a company is how well the Driver is!! If the Driver is smart, he'll take care of the car, wash it daily, get it serviced on time, and repair if any punctures or other problems arise and if he can't repair it he'll get it repaired by someone.
So, even if the car is a model of the 80s, it'll shine and work smoothly. Oh yes, even with bumpy roads like these..
But, one must not forget, that change is inevitable.
If you do not change with time and need, you are left behind. However, I leave this concept to the business line only, not at all to the personal agendas. Those run on different fundas and bases!
So, to judge a company and how it will function in times to come..one MUST first look at the...
DRIVER!!
Tuesday, April 22, 2008
Wednesday, April 16, 2008
Another Amazing Insight!
GURUsPEAK : Ralph Wanger
Author of the immensely popular investing book, ‘Zebra In Lion Country’, Ralph Wanger’s investing style was simple. He isolated small Companies with financial strength and passionate managers that ran businesses that could be understood. He did not deviate much from these simple tenets and thus made a lot of money for his funds. Here are some nuggets of wisdom:
* One lesson 1973-1974 taught us, repeated in 1987, is that bear Markets are great times to load up on stocks. In the third quarter of 1974, when the market was reaching its bottom, the weighted average price-earnings ratio of the Acorn portfolio was a mere 4.3 times estimated 1974 earnings. Stocks don’t get cheaper than that.
* Value stocks have another attraction: they are constantly in fresh production. A new batch often appears when the troubles of a few leaders taint a whole industry.
* Trying to sell an illiquid stock in a down market brings to mind the galley slaves in Ben-Hur, chained to their bench while the ship sinks.
* Value investing is basically based on a static analysis, a concentration on value right now. Your value investor might wear a T-shirt that proclaims ‘We don’t pay for the future.’ The growth investor thinks about where the company will be in five years.
* When people ask how we’ve managed to get our results [at Acorn], I tell them it’s not by avoiding disasters, because I have had my fair share of them. That’s understood with small cap investing. But if you manage to own some stocks that go up ten times, that pays for a lot of disasters, with profits left over.
* You can’t make five or ten or twenty times your money if you don’t hold on to stocks. Most people are delighted when a stock doubles, and quickly sell to lock in their gain. If a company is still performing, let its stock, too, continue to perform.
* Since the industrial revolution began, going downstream - investing in businesses that will benefit from new technology rather than investing in the technology Companies themselves - has often been the smarter strategy.
* The best assurance of continued growth, and high profit margins, comes back to this: the company should have a special niche in the marketplace, so that sales don’t depend on offering a commodity item at a lower price than the competition’s. It should, to a degree, dominate that niche....
The best company in a marginal industry is worth more than the third-best company in a major industry. I’d rather own the shares of Hokuto, the leading mushroom grower in Japan, than of Mitsubishi Motor or Subaru.
* Glamour has nothing to do with a niche’s appeal. A dull business run by a good businessman is far better than a glamorous business with mediocre management. And even if the glamorous business is run by a genius, often, in that kind of industry, its competitors are also geniuses, so nobody has an advantage, as I’ve commented about high-tech Companies.
* Good management to Wall Street means nothing more than a company with three consecutive quarters of rising earnings. Make it four quarters and you have great management. But exciting performance numbers by themselves aren’t enough to qualify managers as superior, at least not in my book. One good year or two could be a fluke. Or maybe current management’s predecessors set operations up so well that the incumbents haven’t had time to wreck everything.
* Managements can be guarded, especially if they know we [Acorn fund] own a lot of their stock. But their competitors will usually talk freely about them. It’s like trying to find out about a young lady you are interested in. If you ask her mother, you are certainly going to get a different perspective than you would if you asked the boyfriend she has broke up with. We like to hear what the boyfriend has to say.
* No mutual fund manager who relies on market timing has kept his job for fifteen years. Individual investors who try to time the market will be tossed on the same horns.
* Small is good, micro is not. For the littlest Companies, it’s like auditioning for the chorus line: one misstep and you’re out. I’ve made it a practice to stay away from the start-ups, the tiny techs, the near-venture-capital situations. I want Companies that are established and whose management have proven, at least thus far, that they know how to run a company.
* Deciding on an investment philosophy is kind of like picking a spouse. Do you want someone who is volatile and romantic and emotional, or do you want someone who is steady and trustworthy and down to earth. If you want a successful investment career, you’d better bind yourself to a style you can live with....
Author of the immensely popular investing book, ‘Zebra In Lion Country’, Ralph Wanger’s investing style was simple. He isolated small Companies with financial strength and passionate managers that ran businesses that could be understood. He did not deviate much from these simple tenets and thus made a lot of money for his funds. Here are some nuggets of wisdom:
* One lesson 1973-1974 taught us, repeated in 1987, is that bear Markets are great times to load up on stocks. In the third quarter of 1974, when the market was reaching its bottom, the weighted average price-earnings ratio of the Acorn portfolio was a mere 4.3 times estimated 1974 earnings. Stocks don’t get cheaper than that.
* Value stocks have another attraction: they are constantly in fresh production. A new batch often appears when the troubles of a few leaders taint a whole industry.
* Trying to sell an illiquid stock in a down market brings to mind the galley slaves in Ben-Hur, chained to their bench while the ship sinks.
* Value investing is basically based on a static analysis, a concentration on value right now. Your value investor might wear a T-shirt that proclaims ‘We don’t pay for the future.’ The growth investor thinks about where the company will be in five years.
* When people ask how we’ve managed to get our results [at Acorn], I tell them it’s not by avoiding disasters, because I have had my fair share of them. That’s understood with small cap investing. But if you manage to own some stocks that go up ten times, that pays for a lot of disasters, with profits left over.
* You can’t make five or ten or twenty times your money if you don’t hold on to stocks. Most people are delighted when a stock doubles, and quickly sell to lock in their gain. If a company is still performing, let its stock, too, continue to perform.
* Since the industrial revolution began, going downstream - investing in businesses that will benefit from new technology rather than investing in the technology Companies themselves - has often been the smarter strategy.
* The best assurance of continued growth, and high profit margins, comes back to this: the company should have a special niche in the marketplace, so that sales don’t depend on offering a commodity item at a lower price than the competition’s. It should, to a degree, dominate that niche....
The best company in a marginal industry is worth more than the third-best company in a major industry. I’d rather own the shares of Hokuto, the leading mushroom grower in Japan, than of Mitsubishi Motor or Subaru.
* Glamour has nothing to do with a niche’s appeal. A dull business run by a good businessman is far better than a glamorous business with mediocre management. And even if the glamorous business is run by a genius, often, in that kind of industry, its competitors are also geniuses, so nobody has an advantage, as I’ve commented about high-tech Companies.
* Good management to Wall Street means nothing more than a company with three consecutive quarters of rising earnings. Make it four quarters and you have great management. But exciting performance numbers by themselves aren’t enough to qualify managers as superior, at least not in my book. One good year or two could be a fluke. Or maybe current management’s predecessors set operations up so well that the incumbents haven’t had time to wreck everything.
* Managements can be guarded, especially if they know we [Acorn fund] own a lot of their stock. But their competitors will usually talk freely about them. It’s like trying to find out about a young lady you are interested in. If you ask her mother, you are certainly going to get a different perspective than you would if you asked the boyfriend she has broke up with. We like to hear what the boyfriend has to say.
* No mutual fund manager who relies on market timing has kept his job for fifteen years. Individual investors who try to time the market will be tossed on the same horns.
* Small is good, micro is not. For the littlest Companies, it’s like auditioning for the chorus line: one misstep and you’re out. I’ve made it a practice to stay away from the start-ups, the tiny techs, the near-venture-capital situations. I want Companies that are established and whose management have proven, at least thus far, that they know how to run a company.
* Deciding on an investment philosophy is kind of like picking a spouse. Do you want someone who is volatile and romantic and emotional, or do you want someone who is steady and trustworthy and down to earth. If you want a successful investment career, you’d better bind yourself to a style you can live with....
Tuesday, April 15, 2008
The Feminist Version
Opening new frontiers: Story at the bottom of the pyramid
-Anita Motwani(senior VP(marketing), Max New York Life Insurance
Rural India seems to be the latest flavour in town. From finance ministers to corporate India across industries, everyone seems to be shifting focus to the bottom of the pyramid. All boardroom discussions are getting centred on finding ways and means to grab a share of this lucrative pie. Numbers look seductive with statistics and data giving enough evidence of volume potential...smaller ticket sizes but more buyers making it eminent for most industries to ignore this segment at its own peril.
With near saturation and cut-throat competition in urban markets, there is almost no debate left on the potential of the rural population whose incomes are rising and mindsets are changing. While certain industries like FMCG have made an early entry, others are learning the ropes with each passing day. Most industries are trying to test the waters through various forms of pilots and test launches, with n clear indicators of gains in the short run. But there is no denying the long term potential is vast, but so are the challenges.
Till recently, a large part of marketing was done targeting the Urban Consumer, and with most marketers having no prior exposure to the rural audience, they are applying the same rules to connect with this completely different segments. THE MISTAKE that most companies make while chalking their rural strategies is to treat the rural consumers as an extension of the urban counterpart. The other common mistake is to treat rural consumers as a homogeneous mass without segmenting them into appropriate segments. The most relevant point to note is that this segment is extremely fragmented and spread out over a large geographical base. The cultural and behavioural differences vary not just from state to state but from villages to villages. Mapping out this difference in consumer behaviour is the key to any successful rural strategy.
A recent insighting exercise in India's villages has revealed some interesting trends:
A last word of caution, the companies the rural markets must do so for strategic reasons and not for tactical gains. The rural consumer is still a "closed book" and it is only through unwavering commitment that companies can hope to make a dent in this market. Not to forget that it has to be a revolutionary and not just evolutionary business approach that will open new frontiers of consumer demand and create an emerging market within a developing market.
-Anita Motwani(senior VP(marketing), Max New York Life Insurance
Rural India seems to be the latest flavour in town. From finance ministers to corporate India across industries, everyone seems to be shifting focus to the bottom of the pyramid. All boardroom discussions are getting centred on finding ways and means to grab a share of this lucrative pie. Numbers look seductive with statistics and data giving enough evidence of volume potential...smaller ticket sizes but more buyers making it eminent for most industries to ignore this segment at its own peril.
With near saturation and cut-throat competition in urban markets, there is almost no debate left on the potential of the rural population whose incomes are rising and mindsets are changing. While certain industries like FMCG have made an early entry, others are learning the ropes with each passing day. Most industries are trying to test the waters through various forms of pilots and test launches, with n clear indicators of gains in the short run. But there is no denying the long term potential is vast, but so are the challenges.
Till recently, a large part of marketing was done targeting the Urban Consumer, and with most marketers having no prior exposure to the rural audience, they are applying the same rules to connect with this completely different segments. THE MISTAKE that most companies make while chalking their rural strategies is to treat the rural consumers as an extension of the urban counterpart. The other common mistake is to treat rural consumers as a homogeneous mass without segmenting them into appropriate segments. The most relevant point to note is that this segment is extremely fragmented and spread out over a large geographical base. The cultural and behavioural differences vary not just from state to state but from villages to villages. Mapping out this difference in consumer behaviour is the key to any successful rural strategy.
A recent insighting exercise in India's villages has revealed some interesting trends:
- From buffaloes to beauty parlours
- Don't just sell dreams, tell them how to live their dreams
- Not just economic but emotional security
- Their children are like stocks in a portfolio
- Sharing risks and rotating savings
- Community empowerment and Inclusion
A last word of caution, the companies the rural markets must do so for strategic reasons and not for tactical gains. The rural consumer is still a "closed book" and it is only through unwavering commitment that companies can hope to make a dent in this market. Not to forget that it has to be a revolutionary and not just evolutionary business approach that will open new frontiers of consumer demand and create an emerging market within a developing market.
Sunday, April 13, 2008
A Business Idea or A passionate Dream?!
My love for food has been undeniably strong, ever since my taste buds experienced the differences, as a child!
http://the-food4thought.blogspot.com/
So, I thought of sharing the ideas, thoughts, etc through a new blog.
Interestingly, the more I see and hear about it..the more I smell the prospect of a good business..
Hmm..
My passionate dream becoming a Business idea?!
Yes..someday..
But the planning is on, from Now!
When, Where, Which, Why and How. The 4 W's and and H.
I know the answer to Why, only the rest is to be achieved.
Having a food chain ultimately, with all the delicacies one can imagine, and with no table unturned..
I mean, with possibly every menu on the dish, local or foreign!
BUT...
There' a lot to be achieved before that..
A standardised recipe (like Mc-Donalds), Quality, cleanliness, efficiency, fairly cheap Bill, etc etc etc..
And my target would be..everyone..
From lower middle class to Upper class.
Thinking of this, I want an idea how to achieve this target. Because, upper class peope dnt normally go to places where Aam Admi goes, and vice-versa is true as well.
So, should there be different sections in the same restaurant, or different restaurants in the same area?!!
POINT TO BE EXPLORED!!
I must find a way out for this problem as well..
Like most successful chains, I will also have to maintain the taste of the items we sell..
So, a standard recipe is a must.
But before all this, I want to explore all the varying kinds of dishes of various "locals". One of the best things about this country...you have so much to explore, that a lifetime may be small..
But then, it is also important to set a collection of recipes, which would be same everywhere, no matter where the restaurant is opened. The rest can be in accordance with that place!
And then, we can take our "Made in India" brand, to the World..
Yummm!!!
http://the-food4thought.blogspot.com/
So, I thought of sharing the ideas, thoughts, etc through a new blog.
Interestingly, the more I see and hear about it..the more I smell the prospect of a good business..
Hmm..
My passionate dream becoming a Business idea?!
Yes..someday..
But the planning is on, from Now!
When, Where, Which, Why and How. The 4 W's and and H.
I know the answer to Why, only the rest is to be achieved.
Having a food chain ultimately, with all the delicacies one can imagine, and with no table unturned..
I mean, with possibly every menu on the dish, local or foreign!
BUT...
There' a lot to be achieved before that..
A standardised recipe (like Mc-Donalds), Quality, cleanliness, efficiency, fairly cheap Bill, etc etc etc..
And my target would be..everyone..
From lower middle class to Upper class.
Thinking of this, I want an idea how to achieve this target. Because, upper class peope dnt normally go to places where Aam Admi goes, and vice-versa is true as well.
So, should there be different sections in the same restaurant, or different restaurants in the same area?!!
POINT TO BE EXPLORED!!
I must find a way out for this problem as well..
Like most successful chains, I will also have to maintain the taste of the items we sell..
So, a standard recipe is a must.
But before all this, I want to explore all the varying kinds of dishes of various "locals". One of the best things about this country...you have so much to explore, that a lifetime may be small..
But then, it is also important to set a collection of recipes, which would be same everywhere, no matter where the restaurant is opened. The rest can be in accordance with that place!
And then, we can take our "Made in India" brand, to the World..
Yummm!!!
Friday, April 4, 2008
The First Book
Ahem..
Its not everyone's comfort zone, I know. But since this student kingdom has every aspect to follow, I thought this is a MUST to mention!!
I have always been fond of books, novels in particular, since they've been the best imagination tools. And till date, the best one I've read is Eragon. Yes, the same one from which the movie was made. But like Harry Potter fans say, the book was better than the movie, I couldn't more agree with them on Eragon as well.
Anyways, so when I thought of getting some "gyan" through the books the BIG business people read..I searched through a lot of forums and found a bunch to munch.
However, I was very much unaware that my first book, wasn't actually or directly related to MBA or business culture. It is actually the end of this dragon tail.
Its called... "The Monk Who Sold His Ferrari" by Robin Sharma.
And those who have read this master-piece, would surely agree that this is one of those rare books to get all hands on..One which has the basic essence of time, of possessing hidden energy and power and most of all of valuing the people around us.
It wasn't anything I expected it to be!!
First I never ever expected that the title of the book was so literal to whats inside it.
Second, its narration as a story, and very unlike those confidence/motivation booster books, we come across. So it sends out its message in the most simple manner.
But as I said earlier, its the tail of the dragon. Either a beginner or a professional, when you start to think on those lines(simple lines) you get that deep sense of being. A sense of yourself and those around you.
So..go on and have a bite!!I'm sure you won't regret it..
:)
After this one..my second book is.. "What your CEO wants you to know" by Ram Charan.
I'll surely mention about this one later.. I know it will take time to grab and apply what this has to say. Coz I'm as amateur as anyone..
So, be it..lets move on with the book love...
Its not everyone's comfort zone, I know. But since this student kingdom has every aspect to follow, I thought this is a MUST to mention!!
I have always been fond of books, novels in particular, since they've been the best imagination tools. And till date, the best one I've read is Eragon. Yes, the same one from which the movie was made. But like Harry Potter fans say, the book was better than the movie, I couldn't more agree with them on Eragon as well.
Anyways, so when I thought of getting some "gyan" through the books the BIG business people read..I searched through a lot of forums and found a bunch to munch.
However, I was very much unaware that my first book, wasn't actually or directly related to MBA or business culture. It is actually the end of this dragon tail.
Its called... "The Monk Who Sold His Ferrari" by Robin Sharma.
And those who have read this master-piece, would surely agree that this is one of those rare books to get all hands on..One which has the basic essence of time, of possessing hidden energy and power and most of all of valuing the people around us.
It wasn't anything I expected it to be!!
First I never ever expected that the title of the book was so literal to whats inside it.
Second, its narration as a story, and very unlike those confidence/motivation booster books, we come across. So it sends out its message in the most simple manner.
But as I said earlier, its the tail of the dragon. Either a beginner or a professional, when you start to think on those lines(simple lines) you get that deep sense of being. A sense of yourself and those around you.
So..go on and have a bite!!I'm sure you won't regret it..
:)
After this one..my second book is.. "What your CEO wants you to know" by Ram Charan.
I'll surely mention about this one later.. I know it will take time to grab and apply what this has to say. Coz I'm as amateur as anyone..
So, be it..lets move on with the book love...
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