Restaurant POS Products from LPR

Was helping my friend find a POS (Point of Sale) system for his restaurant and found about this range of products marketed by LPR Global, a South Korean technology products company that I had done a project with when I was at Rotman: http://www.lprglobal.com/restaurant-pos.php

Was impressed to see a complete range of POS products catering to different segments of the markets such as retaurants, groceries, etc.

Tiesto=trance; trance=Tiesto

Fall has been a great a music season in Toronto. U2 was here few weeks ago on their world tour and last Saturday Tiesto was here to please his trance fans.
Although Armin Van Buuren and Gabriel & Dresden duo are my all time favs, I'm quite fond of Tiesto also. His Adagio For Strings and Elements of Life are simply out of the world.


So here I was with Pavan & Sky, waiting in a mile long queue on a freezing Saturday evening, all too excited to watch Tiesto perform. The rain Gods had decided to rest for that hour and spared us from getting drenched.
After the security checks and other formalities we rushed into the performance hall and were thrilled to see the setup. The Heineken beer bar decorated in florescent green eluded us..the rest, as they say, was history.. =)

Opening acts started at 9 PM with some local DJs dishing out their work. The 1st guy was pretty good and performed for an hour. The crowd was consistently shouting out the God-of-the-night's name "TII-EE-S-TO". By the mid of the 2nd DJ, who was doing a terrible job, most of the people had lost their patience.

Then slowly the lights started dimming down and a soothing music started in the background. The background graphic screen was showing the back of a man's head. The crowd knew what was gonna happen next. We started shouting at the peak of our voices..and then finally Tiesto appeared on to the stage.

He starated off with a fast beat from his new album Kaleidoscope which got the fans into a frenzy and started their trance moves in a religious fervor. He continued with other songs such as Back In Your Head (feat Vancouver based Tegan and Sara)and Escape Me and other songs from the same album. All these numbers were thumpingly awesome, but my favorite was Century. The music is fast and its lyrics is very catchy. It goes like:
Hello, can you hear me??
Now put you hands in the air..for the century

I'm sure its gonna be a super hit.

The atmosphere was electrifying. It was not just the out-of-the-world trance music, it was also the amazing graphics that was making it more fun. Just when we thought the last molecule of ATP (the energy molecule)had been burnt, our bodies would automatically start dancing again, as if it received an energy boost from the music.
The hot dogs we had before entering was long gone. We had taken regular breaks to drain down a Sprite or Coke (we were dancing back & forth, of course).

The 2nd half was even more fun when he started belting out his older classics such as the Adaigo and Elements of Life. The fans went berserk on these two. He also played his some of his songs we had heard in ASOT (A State of Trance, Armin's weekly trance radio program).
We had lost track of time. But bodies were totally exhausted and were begging for some rest. The party went on till 3 AM. Then the music started slowly mellowing down and Tiesto said few good words, thanked us and bowed out. All of us were shouting in our hoarse voice for him to play for some more time. But it went in vain.

We half-heatedly walked out of the venue, caught a taxi & came back home at 5 AM. But the night was an experience to remember.

Here's a link to an Internet version of Kaleidoscope: http://www.myspace.com/tiesto. Hope you'll enjoy it!

happy Indepence Day !!

Dear friend,
advanced Indian Independence Day wishes to you !!
The reason for wishing you a week in advance is because I just came back from volunteering in the day-long Independence Day celebrations organized by the Consulate General of India (CGI) at the Yonge-Dundas square. The program included a procession along prominent streets in downtown area by various states (provinces in India) such as Karnataka, Goa, Rajasthan, describing their states. The most intriguing one was a procession by Indian Oversees Congress Party. I never knew one such association even existed!! Didn't know how appropriate it was for the CGI to patronize a political party, but being a Congress follower, I didn't mind watching Rahul Gandhi's blow-up taken around Toronto!!

Here are some pics from the event:

my state, Karnataka's procession

me with Karnataka Maathe (mother Karnataka)

Rajasthan's procession was quite colorful (but incomparable to Karnataka's)

This summer I've witnessed so many national/cultural events, almost one every week. Yesterday I had been to a Greek festival and the week before to a Caribbean event. I've been to 4 Indian programs this summer. I'm amazed by the amount of diversity in this country and the welcoming nature of its people.

another anniversary !!

On 5th this month its gonna be a year since I stepped foot on Toronto. Can't believe how fast this one year has rolled by. But after having stayed away from home and been put through a grueling MBA program, this year's been replete with lessons for the rest of my life.
In retrospect, it's been a wonderful year, worth every second that I lived.

I haven't able to update blog for quite some time partly because my time management is gone for a toss (a euphemism for "I'm a freakin, lazy guy") & partly because I have my fingers in too many pies.

I'm interning at Sun Life Financial (SLF) where I'm working as a Project Manager for a $500 million outsourcing contract that SLF recently signed with IBM. Its a high visibility project both inside SLF & IBM & I get to interact with senior managers from both sides.

Besides the internship, which has been quite hectic till now, I'm working on an Independent Study Project (a graded course that's counted as part of our 2nd year elective) for a consulting firm called LPR Global. Our assignment is to conduct market research & come out with recommendations for market entry for a South Korea based consumer electronics manufacturer. My team's performance has been quite good till now. We've succeeded in selling few of our products to a leading telecom carrier in the US.

I'm the VP of the Rotman Dance Club for this year. We initially had to put in considerable effort to transform our club from Salsa Club to Dance Club, that would support other dance forms such as Bollywood, Ball Room, etc. We had to conduct surveys among the members, convince the Rotman Club Administration to rename our club. Substantial effort was also dedicated to revamp the club website. But all our work till now has been just to create the new club, lot more effort is needed in the course of the year to ensure successful co-ordination of the various activities we've planned for this year.

A good amount of my time is also being spent on meeting Rotman alumni from various industries to understand their jobs & if I'd want to be in that profession a year from now. I've stuck with technology & marketing professions till now, since these are my preferences till now. Rotman has a great program called the Mentorship program where senior alums are assigned to interested students & the mentor helps the student understand various top manager issues and shares his perspectives on several topics. I've been extremely lucky to have the CFO of Rogers, one of the largest telecom/media firms in Canada, Bill Linton, as my mentor. I've discussed several interesting topics such the role he plays in increasing shareholder value, M&A strategies of multi-billion Dollar firms, etc. Bill has also introduced me several senior executives in his network with whom I can further interact and learn from.

Despite all this work, my social life has also been quite active. This weekend was a long one & I made quite good use of the time to visit few places around Toronto. The weekend also had a wonderful ending with an evening of "rusty pelican" ice-cream at De Metre's and bhel puri with Kashmiri chai at Little India on Gerrard Street.

Looking for another fun filled weekend and an interesting week in between !!

Bye for now..

10 things I didn't know about Poland

Dear friend,

Today’s article is going to be the 1st edition of a topic that’s very close to my heart: “10 things I didn’t know about country X” that I had spoken about a few months ago here.

I’ve chosen Poland for today’s article. I caught up with Dariusz, a Polish classmate at Rotman & dear friend of mine, asking him to tell us about Poland. Let me give you a brief introduction to Dariusz. He has his Masters in Banking & Finance from Krakow University of Economics and has 7 years of experience in invoice finance and asset based lending in London & Warsaw. He’s extremely fond of the Latin American dances and can put to shame many Latinos with his sleek Salsa moves!!

So here I was, at a reading room in University of Toronto’s Graduate House, close to midnight on Sunday, urging a 30ish Polish guy to come up with interesting facts about his country for the rest of us to know about. Here’s the list he churned out:

1) In the UK, the Polish form the 2nd largest immigrant population. The 1st place is held by none other than us Indians!!

2) Currently Poland is the only growing economy in the EU, notwithstanding the economic crisis that has hit hard the whole of the EU. The main reason being large FDI from the richer EU neighbors who want to capture a slice of this developing economy. Technology outsourcing is also supposed to quite be hot. So any techies reading this point, keep a keen eye on Poland.

3) Pablo Picasso, one of the greatest painters of the modern era is supposed to have said “The three most astonishing things in the past half-century were the blues (Afro-American music), cubism (20th century art movement), and Polish vodka. “ As for the Polish food, sausages seem to be one of the most popular dishes they have. The last time I was in a Polish restaurant with my classmates, I saw a separate menu for savories based on sausages!!

Here's one such delicacy:

4)
Poland lost 6 million of its citizens in the 2nd world war and became an USSR satellite state, post WW Lech Walesa, who became later a President, spearheaded the Polish revolt against the USSR domination thereby making Poland the 1^st country to liberate from the Communist bloc. The movement he started was called Solidarity and he was awarded the Nobel Peace prize in 1983.

5) Religion is a critical component of the Polish people. 89% Poles follow the Roman Catholic Church. The previous Pope of The Church, John Paul II, was from Poland. His funeral was the largest funeral gathering of world leaders and public. An estimated 4 million mourners gathered in Rome and cost The Vatican 6 million euro for the entire event. John Paul II was the first non-Italian Pope since the 1520s and was widely acclaimed as one of the most influential leaders of the twentieth century

6) In 2006-2007 Polish Prime Minister and President were identical twin brothers elected in democratic elections. One of the brothers is still the President as of 2009. They both starred in the 1962 Polish film “The Two Who Stole the Moon”

7) Polish history goes back to 966, however, there was a period of over 120 years when Poland did not formally exist after political and military partitions among Russia, Austria, and Prussia (1795 - 1918). Warsaw is the third capital in the Polish history after Gniezno and Krakow

8) Main Market Square in Krakow is the largest medieval town square in Europe (200 by 200 meter square)

9) Frédéric Chopin, a world-renown pianist and composer, was born in Poland where he lived until he was 20. He was one of the great masters of Romantic music.

10) Finally, for all the football (soccer??) fans out there, here's something trivia for you: Poland and the Ukraine will be hosting the European Soccer Championship in 2012

The discussion gave me a brief insight from a Polish into this emerging economy and its culture. Hope you'd find this article interesting & useful as I did !!

Honey, who captured my value ??

"Capturing value" is as familiar a term to MBA's as "raising a bug" is to software engineers. It simply means if and how much is your business is making money out of the service or good it produces and sells to consumers.
For ex., lets say your firm manufactures cars. You create value to your consumer by providing her a means of transport that's going to save her time, make a style statement, etc. You capture the value you generate by getting the consumer pay for the car.
Now lets try to understand what value a car dealer captures. This is important to understand since my today's article is based on a similar concept. The car dealer adds value to the consumer by having a large collection of cars and providing a buyer an aesthetic environment for his customer to make her choice. The dealer captures his value add by charging a premium over the factory cost of the car.

But capturing value in some industries is not as simple as in the above example. This concept is such a menace that it has disrupted entire industries.

One such example is the telecom industry of the late 1990's. Carriers such as AT&T, MCI of that era had built up so much overcapacity (and therefore huge fixed cost) that in order to break-even they had to provide n/w access to smaller resellers at shoestring prices. These resellers consisted of calling-card companies, paid 900 services providers such as phone-in-astrology, etc. The services provided by such firms were so attractive that similar firms mushroomed at an exponential rate all over the US. You might think that this was good news for the bigger carriers. But in reality, it was disaster in the making. It turned out that the modus-operandi of the smaller firms was that they bought large bandwidth from the carriers, provide their services to their clients & go underground before paying usage charges to the carriers. Basically these firms were usurping the value provided the carriers thereby depriving the revenues that the larger carriers had to make. This shook up the entire industry.

MCI, the 2nd largest US carrier was supposed to have had many such customers but the problem was supposed to be so much out of control that the management had slyly buried such bad accounts receivables in the hopes of being acquired by another carrier, thereby having a chance to cash-in on their ESOPs. Ultimately, in '97, after WorldCom formed a $37 billion merger with MCI, the company wrote down $685 million worth bad assets (non-paying customers). Finally the company had to declare bankruptcy.

Now let me explain a 2nd version of this value capture problem, that's closer to my heart, prevalent in today's tech industry. It is none other than the Social Networking industry, comprising all the Orkuts, Facebooks & Myspaces. These sites boast of millions of users like you & me and are backed by some of the best venture capitalists. But these companies are struggling to break-even, even after more than a decade of operations. Wonder why? The simple answer is that these companies have failed to capture the value they generate. What value do these firms generate? Breaking down commucation barriers, providing another mode for people to express themselves and many more..

Certainly, these are pretty valuable that anyone might be willing to pay for. But the social n/w firms dug a grave for themselves by training the user to demand these services for free. Since then, the firms have tried various things such as advertising to claim the value, but haven't found critical success in any of them. As my team & I try to realize a strong business model for a social networking startup called VividCampus, this question continues to come back and bite us.

Oracle buys Sun

This is got to be the biggest tech news of the year, so big a news that its woken me up from a long blogging hiatus to write something about it.

The process has costed Oracle $7.4 billion and Oracle expects to achieve operating profit of $1.5 billion in the first year through this acquistion.

Let me try to apply few basics of Mergers & Acquistions I learnt in our finance courses to check if this acquisition was worth the trouble.

The sole purpose of a firm is deliver profits & increase shareholder (SH) value. Any activity conducted by a firm has to adhere to this principle. This rule is applicable to the case of acquistion too: if an acquistion doesn't increase shareholder value, then don't do it.

Now, how to decide if the acquisition is increasing SH value?
Let's say a company called Acme wants to acquire a company called Beta. The acquistion is SH value increasing if Acme's share value post acquistion is greater than value of Acme '+' value of Beta. If this condition wasn't true, the SH is better off holding an Acme share & buying a Beta share from the share market.

This means that Acme must see some level of synergy in acquiring Beta. Generally, there's high level of synergy if the two companies are in the same business so that the acquiring company can achieve greater economies of scale or scope, gain access to new markets or reduce costs by retiring redundant resources. This was the case when Alcatel-Lucent acquired the UMTS business of Nortel or when Oracle acquired PeopleSoft.

But in case the two firms are in different businesses, its difficult achieve scale economies, but the acquistion can be justified by applying better management expertise to the acquired firm.

Lets apply this principle to Sun's acquisition by Oracle. Oracle is into DBMS, while Sun has a large porfolio of products ranging from microprocessors to to high-level prgramming languages. Java, a programming laguage owned by Sun is widely used in user-interface development and by far its most popular product, even though its Solaris operating system & UltraSparc microprocessor are quite well established in the enterprise market.

Sun has an open-source DBMS product called MySQL that has quite a strong following in the FOSS (Free & Open Source s/w) world. MySQL seems to be a good enough reason for this acquistion. Are there any economies of scope (like providing end-to-end "back-end to front-end" solutions) that can be achieved through owning Java and Solaris (other main products from Sun)? The answer to this will be "it depends". If Oracle can achieve higher level of optimization in Java or Solaris systems running on Oracle DBMS, then its definitely a great value-add to the customers. Happy customers generally leads to happy shareholders.. :)

Overall, this seems to be quite a clever acquistion for Oracle and it seems to have to have got the timing right too: in the middle of an economic downturn !!

in fond memory of Chetan....

Today I got a real bad news that Chetan, an old friend of mine, passed away in a road accident. My heart goes out to his surviving parents to whom he was the only nandadeepa.

He was 3 yrs senior to me. We used to go to school in the same bus & sometimes played football/cricket together in the evenings. I was not much in touch with him after he passed out of school. After few years, he did his MBA in Christ & I would approach him occasionally for MBA prep guidance. He had given me few prep books that I had returned after clearing GMAT. The last time I saw him was when I had gone to invite him for our Rajyotsava celebrations, more than a year ago. But now he's no more.. :(

It's such depressing that makes me question what is life?????? If its so precious & so damn invaluable, how the hell can it be taken away in a fraction of a second????? Is there no way to just rewind time a few seconds?????

Indian IT industry in doldrums

Vinay had called today morning to gave an awful news. His company that was working on a leading-edge of telecom technology announced that it would be shut-down in a month's time !!
Vinay's company was not the first casualty for this global recession. Many other start-ups in Bengaluru have been shutting shops and the larger firms are announcing jobs/pay cuts.

Recession 2000: As I remember, the previous recession in 2000 was a boon of sorts for Indian IT industry. Back then, when the global tech firms such as Microsoft, IBM, Motorola were faced with the issue of cost cutting, they saw the large pool of talented Indian students as a low-cost substitute for their engineers. So they promptly reduced their head-count in North America & either outsourced to or developed their own centers in India. This had spurred the legendary growth of the Indian IT industry that lead to the growth of firms such as Infosys, Wipro, Sasken, etc.

Recession 2009: But in the current slowdown, its not just the global IT firms that are worrying about cost reductions, even the local Indian firms are facing the music to bring down their expenses. There's no other country that would offer the same kind of kind expertise and cost benefits. So they are either forced to decrease their headcount or salaries.

Companies that are working on the next-gen technologies are in a even worse state. These companies usually funded by VC's and their burn rate is high due to the heavy packages they need to offer to talented engineers they hire. Their break-even time is in the range of 3-5 years, when their technology actually gets adapted (if it eventually does get adapted !!) So if the investors get even a slight indication of not getting back their investment, they'll likely withdraw their investment. This is exactly what's happening in today's depressing economy..

Hopefully, as we've studied in our Macroeconomics course, this we'll recover from this slowdown by Q4 of 2009. Things will begin to get better soon..thanks to Barack Obama :)

a death blow to Nortel

Although last Wednesday's press release from Nortel was anticipated in the telecom community for quite sometime now, it made a huge uproar in the general media.
"This is the way, this is Nortel" used to be punch-line of this telco giant. But it seems that it has lost its way around. It's evident that Nortel's strategy to sell off its key assets such as 3G might have paid off in the short-term by pleasing the stock markets, but it has lead to its debacle on the long run.

As I mentioned in this previous article, telecom vendor industry is not a profitable one. One mechanism players use to increase/retain profits is through merging or acquiring competitors.
Having said that, Nortel still has significant market share in enterprise networks & MEN and has enough funds to burn cash for few more months. If the courts provide ample protection against debtors, Nortel still has a fighting chance to stage a come back. But the question is who has the competence to orchestrate its revival? Will its competitors who want a piece of its lucrative businesses allow a come-back?

happy anniversary !!

Wow!! this blog completed 1 year last Saturday. Isn't that an occasion to celebrate? There have been 42 postings till now. I've almost lived upto my commitment of having atleast 1 post per week.

So much has happened in this 1 year & I am really happy that I've been able to chronicle a good amount of it through this blog. I can always look back at these blogs & see where I came from. Hope to share more experiences with you in the years to follow..

Thanks for reading my blogs & belated new year wishes !!

some sweet Christmas holidays' memories

Our Q2 exams got over a week ago & I am enjoying Christmas holidays now. Thinking of Christmas holidays, I was reminded of one my most visited places during Christmas holidays during primary school days: Kapalli. That was the place where my dad's brother was residing during his tenure as a high school headmaster in that area. Click on this Google Map image to know where its located. This is a tiny village in the midst of Karnataka-Andhra Pradesh border, about 23 km from Chintamani, the taluq headquarter.




There were few private buses that went to this village, such as Balaji (with a distinctive yellow color), ATS (Akbar Transport Service, or something like that) and another simply called '8-single' (signifying that this bus plyed 8 times a day). These buses plyed between Chintamani & Gavunipalli or between Chintamani & Irgampalli. The buses were usually packed to the brink & it would be your lucky day if you secured a seat in the bus. The journey itself used to be a rocky one. The driver would play loud Telugu music (we were near Andhra border after all & yeah, Telugu movies was more popular than Kannada movies during those times) for passenger entertainment. An occasional drunkard used to provide more on-board entertainment. All said & done, if you were a well dressed kid from Bengaluru, you'd be in all probability the center of attraction. Someone would invariably ask me about my whereabouts and where I was heading to. "to Kapalli headmaster's house, I'm his nephew" used to be my standard reply. The bus would stop at Kapalli cross & it was a 2 km walk through the farms to the village. During my earlier childhood, there used to be fireflies in these farms that used emit fluorescent light through its tail. Trapping those insects used be my favorite time-passes. But as I grew up, these insects mysteriously disappeared.

My uncle's house was near the village entrance. A 150-200 yrs old stone arch stood at the entrance & it was now being used to tie-up cattle. The village also had some 8-10 gobar gas units that was supposed to generate cooking gas from cattle dung. But the project seemed to have flopped and most of these units had either become dumping grounds or were rusting.

The Hanuman temple at the center of the village was undoubtedly the cultural heart of the village. There was a large platform under the shade of a pepal tree that would be the place for lazy or old people to have a sieste or discuss about regional politics. A touring drama troupe would hold its night-long drama on the road opposite to the temple. An inter-village kabaddi contest would also be held under the blessings of Lord Hanuman.

Although most of main groceries were done from Chintamani or Guvanipalli, there were two small tuck shops. One was run by a single lady in her hut near the temple. Most of her wares were sweet meats, catering to small village kids. Finding a Coffee-Bite chocolate would be a rarity here, leave alone a Cadbury Five Star. Nobody knew how much she made, but I don't think she made much even though she had a near monopoly situation. Maybe she was happy with making her ends meet & wasn't caught up with expanding her business or increasing her gross margins, etc.

Needless to say, the village was surrounded by farms from all directions. One that reminds me the most was the betel leaves plantation of Subba Reddy that had a H-U-G-E well. This well was undoubtedly the largest I've ever seen & would be as large as a quarter football field. I remember going for a swim here once, only to find myself surrounded by snakes in all directions !! I've had nightmares about this well ever since.

Dairying also seemed to be a source of income for the villagers. Dairy co-operatives have been a huge success in Karnataka and have uplifted the lot of the farmer communities. The manager of the milk collection center, Venkatasubba Reddy was a very friendly person & would allow me to conduct milk purity tests & count the amount of milk brought in by each villager. Let me tell you this was quite a pristigious position & not many people would have got it.. :)

The best thing about this village was definitely its people. Everyone knew everyone else here, all of them had the innocence of the village & all of them were extremely friendly. I could write down few pages about each family & this would make this write-up so boring for you to read.

My uncle returned to my native village after he retired 10 yrs ago & my life had kept me so busy that I was barely in touch with this place or the people there. The last time I went to this village was to attend a marriage, I think 7 yrs ago. I've been to Chintamani quite a number of times in these 7 yrs, but never thought I'd miss this place so much. I've realized that there are somethings in life that you wouldn't realize how much you miss them until you are too much out-of-reach from them.

I've decided that during my next trip to Bengaluru, I'll be returing to this place that has been so much a part of me & its people who've partly shaped me to be what I am today. I'll surely make it a point to re-live some of those old memories & capture a few as a sweet remembrance of those childhood memories that I can no longer get back..& may be I'd do some not-for-profit consulting for the tuck shop lady to increase her profits.. :)

It's sometimes hard to imagine for people in big cities such as Toronto or Bengaluru or NYC that a place that doesn't even figure on the GoogleMaps can be such a lively entity. This I believe is the irony of today's world. Hope this little blog would put this tiny village: "Kapalli" on to the map of the Internet age.

Is telecom industry attractive?? - an analysis using Porter's framework

Background:
Telecom equipment industry is undergoing lot of changes. Many large companies have merged (NSN, ALU) and many others are selling off their key assets (Nortel selling its 3G portfolio and now contemplating about selling its MEN technology). What’s the reason behind these moves? Is it because the industry as a whole has become unattractive or because of bad decisions on part of the companies?
Lets use Porter’s five forces framework to analyze this industry & try to find how profitable this telecom equipment industry is. See Exhibit 1 for an overview of Porter’s framework.
Industry:
Telecom equipment manufacturing companies comprising of: wireless, data-networking, optical, access, NGN/IMS & s/w apps.
Main companies:
NSN, Nortel, Ericsson, ALU, Motorola, Cisco and Huawei. See Exhibit 2 for a brief overview of their financials.
Exhibit 3 clearly shows that performance of telecom vendors is much below S&P 500 signifying that this is a non-profitable industry.

1) Value creation
a. Buyer power: Buyer consists mainly of mobile service providers such as AT&T, Vodafone, Bell-Canada, etc; large companies such as IBM, Walmart, Shell for Enterprise Applications and governments such as the Chinese & Indian governments for optical and wire-line solutions. As we can see, these are very large entities compared to equipment companies.
These companies buy in large volumes and equipment costs form a significant part of their expenditure (except the governments). Hence they involve in negotiating good bargains.
Mobile service provider companies also have power to direct which technology is to be introduced to the market. For example, vendors perceived VOIP to be a substitute for mobile communication and did a huge investment in developing this technology. But service providers see VOIP as a major threat to their revenue generation model since VOIP is drastically cheaper compared to the existing mobile service thereby substantially impacting their revenues. Hence adoption rate for VOIP products is low among service providers due to which vendors are struggling to recover their initial fixed costs. The same is true with slow adoption of high-speed evolutions such as 3G & 4G among end-users. Vendors have spent huge amounts in developing these technologies but are not able to recover their initial sunk costs.
As mentioned above, vendors have high fixed costs (for initial R&D) and minimal incremental costs. Hence they would like to keep their sales volume high in-order to recover as much fixed cost as possible.
There is very little differentiation among the products and switching costs are low due the existence of standardizing committees such as ITU, 3GPP, WiMAX forum, etc.
Due to all these reasons we can conclude that buyer power is high in this industry.

b. Supplier power: The main suppliers to this industry are silicon chip manufacturers (for processors, memory chips, etc), sub-contractors and employees.
Due to heavy competition among chip manufacturers, their bargaining power is low. But there is medium switching cost for telecom vendors since changing their hardware would lead to additional cost in modifying their architecture.
Employees don’t have much supplier power since the required talent is widely available and companies can easily lay-off redundant work-force.
Sub-contractors also don’t have much power due to heavy competition among themselves and their relative smaller size compared to vendors. Telecom vendors make sure to outsource their work to a wide range of companies so as to not become completely reliant on a single sub-contractor.
Overall, power of suppliers is medium to low.

c. Threat of substitutes: There are not many substitutes for the products developed by these companies. Mobile services are considered a strong substitute to wire-line services. Today, mobile n/w equipment forms a major part of telecom vendors’ portfolio. Vendors have even taken a further step to understand possible future threats such as VOIP and have incorporated it into their portfolio.
Hence, threat of substitutes is low for this industry.

2. Value capture
a. Threat of entry: It’s not uncommon for some employees to join hands, take a funding from an angel investor or put in their own savings and start a company, competing against the parent company. But the products developed by these companies are piece-meal and cater to a very small set of customer requirements. Hence they may not have very strong preference among service providers; unless they offer a superior product at lesser cost. These startups neither have financial strength nor the kind of connections to bid a formidable threat against the larger incumbents.
Hence threat of entry is low.

b. Threat of rivals: Rivals are roughly equal in size and power and they cater to roughly the same customer base. They produce nearly identical products. Hence their best way to attract customers is by cutting prices. This is where Chinese firms such as Huawei are making inroads due to their low manufacturing costs and Western competitors are trying to minimize their overhead by cost cutting redundant expenses.
Another way to differentiate is by displaying to the customers the company’s technological prowess so as to assure its customers that their product is the best in the industry. This encourages companies to bet and invest more on future technologies even though they may not generate revenues in near future which in turn leads to low profit margins.
Therefore we can conclude that threat rivalry is high.


Conclusion
From the above analysis we found that buyer power and threat of rivalry is high. Both these factors are formidable. This could be reason of non-profitability and consolidation in the industry. Companies try to reduce threat of rivalry by merging or buying out rival companies.
Our overall analysis show that telecom vendor industry is not an attractive industry.

Exhibit 1: Porter's 5 forces framework


Exhibit 2: Main competitor's financials

*There was a goodwill impairment of $1,1142 mm due to EN & MEN business units
**Taken from Nokia’s consolidated statements
***Quarterly finance information not available


Exhibit 3: performance of S&P 500 and all telecom companies

ಎಲ್ಲಾದರೂ ಇರು, ಎಂತಾದರು ಇರು..(wherever u r, however u r..)

Dear friend,
Its been more than a month since Kannada Rajyotsava (formation day of my state: Karnataka that's celebrated on Nov 1st), but in keeping with true traditions of K R Puram (which had been my home since birth), I am wishing a warm belated Rajyotsava wishes now. Just remembered that last year we had Rajyotsava celebrations in early December. Even our Sasken Rajyotsava celebrations were in late November.

Now that I am in Toronto & so involved in studies, I barely get time to do these things. But here's a beautiful pearl of a song I unearthed from Youtube. I've missed the count of number of times I've seen it since & I'm sure even you'd love it..



This song has probably the two best Kannadigas ever. Hats off to our Rashtrakavi Kuvempu & one & only Annavru Dr. Raj..

ಕನ್ನಡವೇ ಸತ್ಯ, ಕನ್ನಡವೇ ನಿತ್ಯ..

Where The Mind is Without Fear..

170 odd people dead..entire city & the nation traumatized..
who's responsible for it: ISI? Deccan Mujahideen? or our "nothing can be done" government??
Will our representatives stop expressing shock & giving condolences remarks & take some decisive action atleast now?
I don't understand why this is a continuing issue. Successive governments be it Congress or BJP, forget that they have head on their shoulders when this issue comes up. Is it the complacency of the leaders or that of the RAW/police babus?

I hope its the defining moment for India. We have only 2 choices: continue to kneel down in front of those irritants or stand up brave & do something about this.

Hope our leaders haven't forgotten the aspirations of our forefathers, beautifully elaborated in this following poem by Rabindranath Tagore:

WHERE the mind is without fear and the head is held high

Where knowledge is free

Where the world has not been broken up into fragments

By narrow domestic walls

Where words come out from the depth of truth

Where tireless striving stretches its arms towards perfection

Where the clear stream of reason has not lost its way

Into the dreary desert sand of dead habit

Where the mind is led forward by thee

Into ever-widening thought and action

Into that heaven of freedom, my Father, let my country awake.

Rabindranath Tagore

As winter sets in..

Things are changing so fast & so much out of your control, not just the weather...even your own life.


Yesterday when I came out of school I was delighted to see a white blanket of snow all over. I was witness to withering of leaves from the past one month, but today's sudden transformation of green to white was unexpected. Seeing snow for the first time was an experience in itself. I had to consciously restrain myself from not touching the snow so that I my health doesn't get screwed at this crucial time.


This weather change is in sense a mirror to the way my life is getting transformed here. These three months have done so much polishing to me that I never expected before I came here.
At school, each day we are bombarded with so many bewildering choices and challenges. You can schedule each minute of your time to atleast two tasks. You could either work on you project or the weekend's case competition or you can study for tomorrow's Statistics quiz or do Business Finance assignment. What do you choose? All are are of equal priority.

Here are some of the cool things I've learnt in past few weeks. This is just to show you how much intersting learning in a B-School is. Mind you these are just few of the plethora of things that are currently on top of my head:
1) New technology doesn't always mean big money. Ex1. InVitro Maturation Artificial Reproductive Technology (IVM-ART) - Medi-cult, a pharma company had a real bad time selling it. Ex2: Very Light Jet (VLJ)- Linear Air, an air-taxi service started by an HBS grad is facing a tough challenge making profits out of this cutting edge technology due to the already overcrowded airline industry.
2) Lets say there are two stocks with risks r1 and r2 such that share2 is riskier than share1. If you create a portfolio having these two stocks, the effective risk r(1,2) of the portfolio can adjusted to be lesser than r1. In other words, your portfolio risk is lesser than the lowest risk of individual shares in the portfolio.
3) There are quite a number of ways for a company to borrow money from a bank but not show it on its balance sheet !! This one is really intersting isn't it? :)


I had almost forgotten what a festival celebration is till I got a lucky chance to watch a Santa Claus parade on Bloor street this Sunday. There were tiny tots with their parents waving their hands and singing "jingle bells". I could actually feel the joy in those small kids by remembering the jovial mood I used to be in during "pallakki" festival in my home town.



This picture is from the parade passing near the Royal Ontario Museum (ROM) near my school.

We've got two more weeks for Q2 exams to commence and before that submissions of various assignments and projects are due. I've joined as a PM for an UofT student project, I'll discuss more about it in a later blog. It's been a very good experience with lot of learning till now.

So these are some of my updates from past few weeks..

Mobile advertising on the go

Mobile advertising is one of those fields that has high expectations but hasn't quite delivered to the expectations till now. This week I had the opportunity to interact with two leaders working on cutting-edge stuff in mobile/Internet space: Mr. Sumeet Khanna VP of Microsoft, Canada & Mr. Shane Green, VP of Navteq (recently acquired by Nokia). This article is based on my learning from these meetings & some research.

The two key aspects why mobile advertising has lured advertisers are:
1) Targeting - Mobile ads are highly effective in targeting customers.
Television, called the primary media is a very general form of media. Every member of the family watches TV, hence it's difficult for the advertiser to focus on the target audience. PC advertising has more focus, thanks to content based advertising pioneered by Google, but the effectiveness of the Ad is reduced because of far too many Ads on the screen. Mobile phone, with its personal use & far little display space can be most effective in advertising.

2) Location based ads - mobiles can be carried around everywhere & its easy to track the customer location. Because of these reasons advertisers can run location based ads. For instance assume you are in a shopping mall now. A clothes store that's running a discounts sale can send you an SMS about its sale. This might trigger you to go to that store even though you had no intent of shopping for clothes.


Let's now focus on the mechanisms that advertisers use to sell their product.
SMS, due to its ease of use & basic system requirements, continues to be the primary form of advertising. It leaves way behind other forms of advertising.
An average SMS takes much lesser space than the 160 character limit. Some of the service providers are experimenting with appending an advertisement to each incoming message.

With the advent of high speeds & smarter phones, advertisers can deploy graphics based & more interactive ads. Since mobiles are relatively slower devices with lesser graphics support compared to PCs, displaying mobile advertisements require a company to maintain a separate site for its mobile customers. 26% of top 100 US sites have a mobile micro-site now. Check m.facebook.com for an example. As I had mentioned in this previous article, iPhone seems to be real trend setter & has driven mobile data rates to new high.




To make effective campaings, its good to understand when a customer uses her mobile to access the Internet. According to Interactive Advertising Beureu, a mobile user accesses the Internet mainly in the following scenarios:
1) When the user is busy in a work & wants to access the Internet to lookup for some references. He doesn't want to switch on his laptop/PC for a small job.
2) He wants to kill some time by playing a mobile game or some similar app.
Understading these usage patterns of the user is essential to build effective mobile ads.


The main roadblock in future increases in mobile Internet access seems to be high prices charged by service providers for these services. Going forward, with increasing ad based revenues, service providers may reduce these rates. Virgin mobile with its "sugar mama" campaign is already experimenting on this front.


The future of mobile advertising seems to be on the slow but steady path now..

References:
http://www.iab.net/media/file/moble_platform_status_report.pdf
http://www.telecommagazine.com/article.asp?HH_ID=AR_4357

A new series in terraintamer.blogspot.com

Q1 exams got over yesterday. Q2 will be starting in full flow from Monday. I Need to read through 2 two topics for Strategy class. And by "reading" I mean I need to be completely through with the topics & also gather few points for class participation. My gut feeling that I may need to slog the entire Q2 like we did in last 2 weeks before Q1 exams.


The past few months in Rotman has been a truly International experience for me. My classmates are from 30 odd countries. For any topic discussion in the class, each student brings out her perspective that's so unique to their culture & different from mine that I instantaneously feel "wow !! what an amazing point that was". This has inspired me to start a new series on my blog. I am planning to interact with some of my classmates & understand what's unique in their country/culture that many of us don't know of. Then I'm gonna compile it on my blog with a title like "10 things I didn't know about countryX".
Hopefully, this exercise will let me learn a little bit more about global cultures & also spread the "gyan" to you guys..

For a starter, did you know that "hola" with stress on "A" is Portuguese & "hola" with stress on "O" is Spanish? Basically, you greet a Brazilian with the 1st option & any other person from Latin America with the 2nd option.


Ciao..

What a hectic week !!

It had never dawned to me how hectic MBA is until last Wednesday. I was talking to my team regarding the various submission we had to make in coming week. This was the list:

group assignments:
Stats project step1 - 10th Oct
FIT presentation - 14th Oct
MPO case analysis - 16th Oct

individual assignments:
FIT - 21st Oct
MPO - 23rd Oct

We had planned our team assignments properly, so there were no problems there. But time required for individual assignments are grossly undervalued & we need to slog over now.

In between all this we needed to make time to prepare for the exams starting from 20th Oct, i.e. from next week.

Time to head back now..
bye..

Indian Railways @ Rotman

We got this article from our Media Relations office this tuesday:


Indian Railways Return to UofT’s Rotman School of Management.

Toronto – For the second year in a row, a program at the University of Toronto’s Rotman School of Management will provide a look at the latest trends in management thinking and transportation for 40 senior managers from The Indian Railways, the second largest railway network in the world. Managers, from the finance and human resources functions of The Indian Railways, will be in Toronto from September 22 to October 4.

The two week program will provide participants with focused classes in finance, human resources, strategy and marketing. In addition to the classroom-based activities, the participants will have site visits to transportation and logistics firms.

“The Indian Railways have underwent a grand transformation in recent years becoming one of the most successful transportation companies in the world,” says Prof. Dilip Soman, Corus Chair in Communications Strategy, at the Rotman School, who is the academic director of the program. “Education and training, such as this program, are important for the company to continue its renaissance.”

The Indian Railways is the second largest railway network in the world and the largest civilian organization under a single management. It carries over 13 million passengers and 1.2 million tons of freight every day, runs 12,000 trains daily with nearly 8,000 Railway stations.

The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit www.rotman.utoronto.ca.



This explained why we were seeing so many well dressed Indian men & women in the School over the weekend. I has initially thought that Rotman had rented out our CIBC Hall on 3rd floor for some Indian business meeting..


Later, I was able to collect some more info from Prof. Dilip Soman. This program was previously being done at NYU-Stern & Prof. Soman was instrumental in getting this program to Rotman.


Indian Railways has been a life-line of sorts for India, ever before Independence. So much so that there's a separate Railway Budget presented by the Central government.
It has been performing brilliantly well of late, very much inline with the economic boom in India. Contrary to most of the PSUs (Public Sector Undertakings) that have crumbled post liberalization, Indian Railways has been one of the few organizations that was able to capitalize on the booming economy.

Imparting top-class business education to top management is one facet of its willingness to innovate & revamp itself. But I think this is one the most important steps towards nurturing a better organization. Its this top management that's going back to implement new strategies to increase profits & at the same time move to around tonnes of freight & millions of Indians at least possible prices.

This program is going to be a good image building for Rotman as well. Now you know Rotman is behind all those innovations Indian Railways is going to roll out in the coming years. Hope delayed trains will be a thing of the past soon.. :)

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