PRATIBIMB The Reflection of Management

FINANCE | GENERAL MANAGEMENT | HEALTHCARE | HUMAN RESOURCE | MARKETING | OPERATIONS | SYSTEMS

A Students’ Initiative June-July Issue

Interview with Mr Madhavan PB

Ford Motor Company

Interview with Mr V Raja

TE Connectivity

COVER STORY

GAMIFICATION FOR BUSINESS

IMT Ghaziabad

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T. A. Pai Management Institute (TAPMI) is a premier management institute

situated in Manipal and is well known for its academic rigor & faculty-student

interaction. The Institute has been recently ranked amongst top 1 per cent of B-

schools in India & 4th in the South Zone by The Week Magazine.

Founded by the visionary, Late Shri. T. A. Pai, TAPMI’s mission is to provide

much needed impetus to the task of building professional management capability

in the country. In the process, it has also played a role in strengthening the

existing educational and health infrastructure of Manipal.

“To excel in post-graduate management education, research and practice”.

Means:

By nurturing and developing global wealth creators and leaders.

By continually benchmarking ourselves against best in class institutions.

By fostering continuous learning and reflection, achievement orientation,

creative interdependence and respect for diversity.

Value Bounds:

Holistic concern for ethics, environment and society.

T. A. PAI MANAGEMENT INSTITUTE

Manipal, Karnataka

About TAPMI

Our Mission

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It is my pleasure to introduce the June-July edition of 'Pratibimb' to you. The editorial team has done a commendable job in bringing out quality articles that have lived up to the expectations. The magazine as always takes into account the scholarly articles, from the best brains of the country - And this is evident from the articles included in the issue. The infusion of the fresh batch of newbies, I am sure has brought a betterment of thoughts, insights and ideas in the team. With the release of yet another issue, we at TAPMI march towards the pinnacle, one step at a time, both academically and through these fully student driven co-curricular activities. I congratulate the editorial board and all supporters for the success.

Dr. R C Natarajan Director, TAPMI

DIRECTOR’S MESSAGE

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STUDENT EDITORIAL BOARD

Debayan Bhattacharjee

Debidatta Satapathy

Deepanwita Nandi

Harshavardhan Rajendrababu

Pallavi Prasad

FACULTY ADVISORY BOARD

Prof. Aparna Bhat

Prof. Chowdari Prasad

Prof. R C Natarajan

Prof. Seena Biju

Prof. Vidya Pratap

Prof. Vinod Madhavan

Back Cover Photo Courtesy:

Arun Balakrishnan

The Team

Dear Readers, You know when it’s time for a change! Pratibimb is one such knock on your door! With a gamut of ideas not just to be read but to be absorbed as well, Pratibimb has evolved to the next best level towards simulating your intellectual gain! The contributions from the selected ‘Apprentices’ is an outcome of concentrated learning and knowledge in practice. An exploration into the cracks in the BRICS, a reality check on the probable paradigm shift regarding Customers and their role in product development, an indicator study of the imperative use of Radio Frequency Identification in Supply change management, the journey of our very own Rupee and a study on twinning Games with Business will impress your reading in this issue. The team has introduced two new components to Pratibimb. Starting this issue, you will be connected in thought to two distinct personalities: one of whom will be an Industry Expert while the other will be an Alumnus of TAPMI We introduce you to Mr. V Raja, President and MD, TE Connectivity who has reinforced the ideologies of TAPMI. In an exclusive interview with the Pratibimb team, Mr. Raja emphasized the need for willingness to learn, the attitude towards values and continuous hard work are the governing traits for change and success. Once a TAPMIAN, forever a TAPMIAN we say! It’s a matter of immense pride for us to know that the strings are never snapped, and this is reiterated when we have our alumni return for an interaction with our students! Excerpts of an interview with Mr. Madhavan P B, Purchasing Director (APAC), Ford Motor Company, the TAPMI alumnus, batch of 1997, should do the rest of the talking! Compliments to the team of editors for their good work as they continue to grow in their efforts to consolidate and disseminate valuable reading to the family of business scholars! Keep reading, Keep reflecting! Dr. Seena Biju Ex-Officio Editor-in-Chief

FROM THE EDITOR’S DESK

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GAMIFICATION FOR BUSINESS 15 DASARATHI VARATHARAJAN, SHANKAR GOPINATH,

IMT GHAZIABAD

Cover Story

Student Chronicles

FOLLOWING THE CONSUPRENEUR 7 MALHAR LAKDAWALA, GREAT LAKES INSTITUTE

OF MANAGEMENT

IS BRICS STILL THE GROWTH DRIVER OF THE WORLD? 10 MUFADDAL DAHODWALA, JBIMS

RUPEE DEPRECIATION, THE JOURNEY SO FAR AND ITS IMPACT 20 AJAY KUMAR TAWANI, TAPMI

RFID—INNOVATION IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT 24 SHUBHAM AGARWAL, IIM INDORE

CONTENTS

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MR. V RAJA, PRESIDENT AND MD, TE CONNECTIVITY 31 EXCERPTS FROM THE INTERVIEW

The Corporate Edge

Alumni Connect

MR. MADHAVAN P B, PURCHASING DIRECTOR (APAC), FORD MOTOR COMPANY 33 TAPMI ALUMNUS, BATCH OF 1997

EXCERPTS FROM THE INTERVIEW

CONTENTS

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Welcome Sir! The doors are open for you

For a marketing personnel, life starts with the consumer and ends with the consumer. So it becomes very essential for him to keep a tab on the changing behaviour of the consumer. The trends in behavioral change help us understand what, where, how, when the consumer prefers what kind of product. By studying these trends, products, brands, etc. can be aligned to the customer’s preferred choice.

Trends are driven by consumer’s desires and needs, with long-term and short-term cultural shifts, new developments in technology, macro or micro economic shifts, and shifts in cultural outlook. The pace with which the trend changed in past decade was one of the fastest when compared to other decades. Thanks to the advent of social media, which helped the speed of communication to grow. This made it even more important to keep a check on the changing trends and do a constant research to predict the future ones.

Consumers are always involved in the last stage of product development phase i.e. during the purchase. Till now the consumer had no role in the development of the product i.e. to make and design the product as per his wish. But now this trend is changing. Today’s consumer wants to get involved in the product development process. He wants to have a say in the choice and quality of the product/service being developed. The consumer wants to share his ideas and wants to get heard.

FOLLOWING THE

CONSUPRENEUR MALHAR LAKDAWALA, GREAT LAKES INSTITUTE OF

MANAGEMENT

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Several companies have started to acknowledge this need and have involved their customers in the product development process. Project Ara of Google, which is based on the principle of phoneblocks, has kept its entire product development process open to public. There is a constant conversation between the company

and the people regarding what feature needs to be add-ed and what needs to be deleted. The company re-sponds aggressively and makes the changes as dis-cussed on the community pages. It holds regular con-ferences to announce the recent developments in the project.

But where do these conversations happen? The con-versations happen on community pages, on blogs and on social media forums. The company need not speak, but it has to listen. It listens to what people are saying, what steps they take to tackle a problem. What innovative ideas are people using to solve an issue? Such discussions give a lot of consumer insight and how the company can design a solution in line with the existing solutions.

There is a community for almost each and every top-ic. For example, there are more than 450 communities dealing only with sunless tanning issues. There are communities dealing with issues of Chainsaw prob-lems which has 6,722 members having contributed 661,174 posts. There are communities making aquari-ums a subject of their discussion which has 260,966 members having contributed 13,622,930 posts. If a company becomes an active listener to these users it can co-create a customer centric problem.

Nivea’s deodorant called ‘Invisible for Black and White’ has been designed by listening to what people say on the community pages. Earlier people faced issue of white and yellow deodorant stains on black and white T-shirts. Nivea’s team analysed for solution by going through community pages and found out 700 different ideas to counter this problem. Every time Team Nivea created the product it went to the

users and asked for suggestions. The team fine-tuned the product till the point where the users were satis-fied with the performance of the product. The result? Nivea ‘Invisible for Black and White’ became the most successful deodorant in past 130 years of history of Beiersdorf. It defeated the competition in the first nine months itself and created a strong position in the market for itself.

Source: http://www.kikaycorner.net/wp-content/

uploads/2013/07/Nivea-Deodorant.jpg

Source: http://www.thefoxisblack.com/blogimages//phonebloks-2-Copy.jpg

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But how can one use the creativity and talent of the customers for designing a new product development? The answer lies in crowdsourcing websites which al-low the companies to ask right questions, and allow customers to reply with answers. Websites like Inno-centive and Kickstarter are helping companies ask ideas for their project and also help people to put their ideas on test. BMW launched a campaign to seek new innovative ideas to personalize the interiors of the car. Users enthusiastically provided different ideas and provided feedback on each other’s ideas. Till date, BMW has received 771 ideas, 1258 designs and a total of 28,000+ evaluations.

Now what is driving this consumer trend of getting involved in discussions, contributing to dialogues and reviewing the suggestions? The consumer has sur-passed his physiological and safety needs from the Maslow’s hierarchy of needs. The consumer has reached a phase where he demands esteem, respect by others, and wants to belong. By engaging himself in discussions, he gets a sense of belongingness to the product and associates himself with it. This pattern is more prevalent in Millennial who have grown up hav-ing an open mind-set of sharing ideas and these are happy to acknowledge other’s ideas.

As a marketer one needs to offer a platform to facili-tate such conversations. The consumers need to be encouraged to voice their opinion for or against a cer-tain feature of the brand. Allow them to vote their opinion before launch of certain advertisement. Ab-sorb them and make them an active asset in the pro-cess of developing a new product. This will help cre-

ate a very strong connection with the product. Also it’ll help save resources which were going towards traditional Market Research and R&D. unlike tradi-tional Market Research studies, the netnographic stud-ies are playful, intuitive and compelling. Also this gives an opportunity for brands to experiment, by get-ting associated with independent business and individ-uals to launch the beta versions of their product. This gives an idea about the test market. Also marketer needs to allow pre-selling of new products. This will help develop die hard brand loyal customers. In fact they would also be ready to pay a premium to get priv-ilege of accessing the product early. After the product is ready, is the role of the marketer over? No. he has to now provide a space where the consumers can share their experience. Such authentic experience stories help attract new consumers and create an excitement of experiencing the product.

What happens to this enthusiasm? It doesn’t stay on the platform, it spreads virally. Statistics say that dur-ing each online contest, each idea gets shared 8 times on Facebook on average with a person having 150 friends. This computes into a reach of 462,000 persons in a period of 8 weeks.

The main challenge which the marketer faces is to change the approach of the company. Gone are the days when a customer would sit and anticipate the product and wait to get astonished. He would be hap-pier when he sees his ideas getting appreciated by the company. With this changing trend of consumers who wants to get into the laboratory, the firm needs to open the doors to welcome them.

References

1. http://www.slideshare.net/HYVE/consumer-cocreation-at-nivea

2. http://www.slideshare.net/joycediscovers/cocreation-consumer-involvement-in-npd

3. http://www.innovationexcellence.com/blog/2012/02/02/co-creation-and-open-innovation-in-new-product-development/

4. http://www.visioncritical.com/blog/5-examples-how-brands-are-using-co-creation

5. http://vengo.wordpress.com/2009/04/24/consupreneur-the-consumer-entrepreneur/

6. http://www.garageagain.com/philosophy_consupreneurism.html

7. http://www.projectara.com/

8. http://www.imediaconnection.com/content/36349.asp#CW7YmpjXsrHEYYpD.99

9. http://value-co-creation.blogspot.in/2011/02/co-creation-story-behind-niveas-new.html

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BRICS - Brazil, Russia, India, China and South Africa has been amongst the fastest growing economies since last 15 years. But, recent economic crisis and various internal issues have marred the growth in these emerging nations. Emerging markets account for more than half of global GDP growth as the BRICS economies didn’t succumb on the growth parameters and have shown double digit progress. But this year the growth regime of BRICS countries is seen a bit jittery due to global downturn that has left world economy in lurch. The high volatility in markets and investor sentiments along with the flat commodity prices has shown the other way.

In terms of net foreign exchange outflows from India's debt and equity markets, an important concern is the extent to which US growth recovers and the Federal Reserve's purchases of longer-term Treasuries and mortgage securities start "tapering" down. The UK economy and the euro zone has started to do better and the unemployment rate is decreasing. To sum up, there is little that India can immediately do to reduce oil or gold imports, or to directly address risks arising from the G7 economies that are continuing to recover.

Emerging economies have a higher growth rate than the developed ones but recently this trend is getting reversed. According to IMF estimates, China is estimated to grow at just 7.8% while India at 5.6% and Brazil at 2.5%.Now,whether the developing countries have this poor performance for a temporary period or it will continue haunting most of the Indian companies is a matter of time. Many are confident about the sustainable growth in emerging markets as the fundamental forces are strong here. China and India’s demographic dividend unlike most developed countries like US and Japan is still young which enhances the availability of skilled workforce and increased levels of domestic consumption. There was a time

IS BRICS STILL THE GROWTH

DRIVER OF THE WORLD? MUFADDAL DAHODWALA, JBIMS

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when success of Asian countries like Singapore and South Korea was seen as an aberration however to-day’s times have changed and we can see that their combined GDP is more as compared to UK also. BRICS has a vital role to play in developing the econ-omy together and improving the overall dampening

condition in terms of economic as well as environment concerns.The intellectual property rights issue has also to be dealt in a way that all the concerns regarding social and political stability are maintained.The inter-ests of the people should be legislated in a proper way by enforcing reasonably good law.

BRICS countries is moving to BIITS as China and Russia are replaced by Indonesia, Turkey, Mexico, etc. and India has to now also tackle with funds from inter-national banks and institutions. It has been reported that India will invest about $4.5 billion in International Bank for Reconstruction and Development bonds to be able to borrow exactly the same amount from the IBRD, since we have reached the country risk limit for borrowings from that institution. IBRD bonds are is-sued at yields of about six-month dollar Libor, or Lon-don interbank offered rate, minus 20 basis points; and IBRD loans carry interest rates of around six-month dollar Libor plus 80 basis points. If the information

that India will invest in IBRD bonds is correct, it is surprising that we are prepared to bear an additional interest cost of one per cent to borrow an equivalent amount from IBRD along with delays related to project clearances. Economic cycles work according to what is hot in one decade and what is not and so the shift in BRICS economies is taking place. But this phase can have drastic effects considering the unprecedented scope of expansion. By 2007-08, more than 100 econ-omies had growth rates of 5% and more which was a global boom and brought these spectacular results.

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China has heavily invested in infrastructure projects which will serve them good in long term. India too has seen recent reforms in economic policies and new pru-dent RBI governor along with the entire finance minis-try which has led to the radical tax system to get more robust and help to solve most bank’s issues. Specifi-cally for India, it is the individual state performance that matters and proper coordination with the centre will ensure drive the economy. The agricultural output remains robust with a strong pickup in Rabi sowing. Trade deficit of India has narrowed and CAD falling to 2.5% in year 2014 from 4.8% last year also boosts investor’s confidence and we can see that foreign ex-change reserves have grown since August. For many countries around the world, China has become an im-portant trade partner. Even as China is among the world's leading recipient of foreign direct investment, Chinese companies make significant overseas invest-ments as they expand into newer markets. With the growing prominence of China in global trade and in-vestment, will the Chinese Renminbi replace the US dollar as the primary reserve currency of the world? The Chinese Government has identified urbanization to play a key part in China's future development and growth plans. The household registration or 'Hukou' practice is a key constraint in policy makers achieving and ensuring holistic percolation of the benefits from increased urbanisation. What are the steps that policy

makers must adopt to reform the Hukou system while ensuring that any such steps are financially and social-ly sustainable? Even in the context of the impact of the Federal Reserve’s tapering of quantitative easing on all emerging markets. Recent economic news from Brazil has been disappointing. It was glad to see good news from Brazil with the Brazilian Institute of Geography and Statistics announcement that unemployment in six of the country’s largest metropolitan areas decreased to an average of 5.4 percent last year, from 5.5 percent in.2012. When viewed in the context of unemployment in the U.S. or the euro zone, this is a very low unem-ployment rate. But short-term growth in Brazil is an-other matter. The country likely finished 2013 with growth around 2.1 percent, the third consecutive year of growth below 3 percent. Inflation in Brazil is also an issue. Inflation likely ran close to 6 percent last year, higher than the government had targeted. It wasn’t supposed to be this way. At the beginning of last year, Brazil’s government optimistically projected 2013 growth of 4.5 percent, citing an expectation for an overall improvement in the global economy. It doesn’t look like there will be a turnaround in Brazil’s economy anytime soon. Growth for this year is likely to be around 2 percent, and will be impacted by Brazil’s central bank’s indication that it will raise rates to try to rein in above-targeted inflation.

There is bullishness on the prospects for emerg-ing markets compared to those of mature economies over the coming decades. I am definitely optimistic for Brazil’s economic future. It’s easy to forget that Brazil, with a population of slightly under 200 million, is Lat-in America’s largest economy, and will continue to be the engine of the region’s growth. For investors, struc-tural changes in Brazil’s economy are a necessity. The country’s economy needs to change from one depend-ent on exports and infrastructure spending, to an in-creased consumer economy.

Many Brazilian small and medium sized enterprises are being challenged by the country’s low growth rate, inflation, and the difficulty in obtaining equity or debt financing from within the country. It’s increasingly clear to many long-term investors that Brazil and many other emerging markets will outperform most mature economies over the coming decades. But, it continues to be a challenge to convince management of Brazil’s smaller companies that now there is global equity capi-tal available from global investors with a long-term investment horizon. Future outflows

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from the debt market by foreign institutional investors (FIIs) would be limited since residual foreign invest-ment in government debt stands at about $20 billion. FII equity outflows too should have an upper bound. If there are net equity outflows of, say, $15 billion, this would cause market levels and the rupee to plunge and it would be counterproductive for FIIs to sell more. However, if India's credit rating is downgraded, as per FII investment norms, they would have to reduce ex-posure to India. Another source of risk is that the last four years of extremely low interest rates in the larger G7 economies have created several asset bubbles. As US interest rates inevitably rise, bond market bubbles would be among the first to be pricked. Further, alt-hough real interest rates are low in India, investment decisions are based on nominal rates. We did have examples of the Asian crisis in 1990’s which wreaked the economies of South Korea, Malaysia, Indonesia, etc. but since then the perception has changed and the emerging market led global growth in history. Alt-hough the economies of India and Brazil have squan-dered the opportunity by not going in for the second generation of reforms and as a result having to do with lesser growth rates than one may have imagined. Also commodities prices have fallen due to increase in sup-ply and decreased demand from developed economies. The rich countries are not in the mood to import more and more which has led to disastrous performance of BRICS exports. They are instead trying to improve the employment rate ad competitiveness amongst their own resources.

BRICS position in climate changes

The BRICS’ position traditionally has been that global climate change mitigation must be addressed princi-pally by wealthy industrial nations, which have not only the wealth and technology to provide solutions, but also the moral responsibility to do so because they have produced perhaps as much as 80% of the GHG emissions to date. However, some developing coun-tries seem to be accepting they have to contribute to climate change mitigation, e.g., China. Other BRICS are also making efforts. The more vulnerable they are to climate change, the greater incentive there is for the BRICS to accept binding GHG emissions cuts. If the Kyoto commitment is not enough to solve the prob-lem, developed countries should do more about GHG emissions reductions before they ask developing na-tions for commitment. Large developing countries such as China, India, and Brazil will not commit inter-nationally to material reductions in their GHG emis-sions in the absence of some comparable commitment by, say, the US. Conversely, the US has not participat-ed in the Kyoto Protocol, and will not agree to manda-tory GHG emissions reductions targets due to concerns about a loss of competitive advantage, relative to de-veloping countries that are not subject to the same obligations. Rich countries generally favour the idea of

placing more responsibility on key developing country emitters such as China and India, whereas developing countries continue to favour an approach that would implement a second phase of the Kyoto Protocol, which allows them to opt out of GHG emissions re-ductions if these pose a threat to development. In fact, authorities from the BRICS have emphasized that the key to success in climate negotiations lies in commit-ments by rich countries to slash GHG emissions and boost funding to developing countries in the form of aid and the promotion of clean technology. The BRICS have concerns over emissions commitments because they expect GHG emissions levels to continue rising for some time. In fact, over the past decade, China’s GHG emissions have more than doubled. This means that the EU’s proposal to raise the bloc’s target for cuttingCO2 emissions would have a limited impact on global warming, given that any benefit would be easily offset by the BRICS’ rise in GHG emissions. The BRIC nations may not be the poorest countries in the world, but can plausibly act as their proxy in the world stage. Brazilian shaping of global public opin-ion muted U.S. pressure to more stringently enforce patent rights and no doubt other nations will follow Brazil’s lead. China and Russia show how economic and political power respectively can change the nego-tiating posture of the United States. Skilful procedural wrangling by Indian legislators shows how very long it takes for coercive pressure to actually have an im-pact on improving national codes. The result is the BRICs have all found their own way in preserving at least some legal sovereignty in the intellectual proper-ty arena. These paths, taken together, may provide a model for other middle-developed countries that hope a better balance between intellectual property rights and national economic and social interests.

Conclusion

In spite of having diverse histories, the BRIC econo-mies are receiving roughly similar treatment from the wealthiest nations. Either through coercion or negotia-tion, the BRICs are being pressured to adopt a West-ern concept of intellectual property protection. That means formal titling of inventive works, enforcement through statutory regimes, and the inevitable demand for even greater protection as the diffusion of technol-ogy enables cheaper and more effective methods of pirating products. The average dip in growth rates of emerging economies is about 4% which means except China, it is 2.5%.The dominant BRICS economies have borne the brunt of this slowdown the most and with China’s debt burden becoming more than 200% of its GDP. According to IMF data, only 35 out of 185 countries can be termed as “developed” as no other country can sustain the growth for more than a decade. Only 6 countries have managed a growth rate of more than 5% over a period of four decades. The average income gap of advanced and emerging economies has

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not changed over half a century and people in emerg-ing economies are bound for a dismal quality of living. The global economy is going through rough and turbu-lent times and lower sales and investments in emerging markets is a big worry. The recent splurge in innova-

tion and new ideas that are patented in BRICS coun-tries can be washed away if the global economy is un-der threat. The performance of emerging markets mat-ters a lot to the developed economies and the future impact to the recovery of markets cannot be ruled out.

References

1. http://www.reuters.com/article/2013/10/07/us-india-economy-chidambaram-exclusive

2. http://www.bbc.co.uk/news/world-asia-india-24753675

3. http://in.reuters.com/article/2013/10/24/india-economy-budget-idINDEE99N0GV20131024

4. ‘India as an agricultural and high value food powerhouse: A new vision for 2030’ – April, 2013 McKinsey &

Co. report.

5. ‘Online and Upcoming: the Internet’s Impact on India’ – December, 2012 McKinsey & Company report.

6. ‘Fulfilling the promise of India’s manufacturing sector’ – McKinsey Quarterly report, March, 2012.

7. ‘Infrastructure Productivity – How to save $1 trillion a year’ – McKinsey Global Institute report, January,

2013.

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Introduction

Have you ever wondered why social games like Farmville and World of Warcraft are so addictive and engaging, that you wish your business had a similar level of response from the end customers? Is it possible to develop an engagement model that is game like, to hook employees to their otherwise boring job or to attract customers to maximize sales? What if work was play? In fact this idea has spawned a whole new term– Gamification, which entered popular lexicon recently. It refers to the use of game design and game elements in a non-game context. A classic example is that of the puzzle game Foldit that made breakthroughs in AIDS Research. Gamification does open up endless possibilities but we shall limit ourselves to the business context in this discussion.

Businesses have tried to squeeze operational efficiency for long but during the process, employees and customers have become disengaged and business wasn’t fun anymore. In these changed circumstances, companies are always looking for new ways to motivate people. Gamification is an offshoot of this quest for driving business and productivity.

The worldwide video game market is set to reach $111 billion by 2015 according to Gartner, Inc. with mobile games being the fastest growing segment in this market. It is interesting to note that a significant part of the growth is coming from the emerging markets. Also a startling statistic is that 44% of all gamers in the US are female. With a large fan following, game designers need to come up

GAMIFICATION FOR BUSINESS SHANKAR GOPINATH, DASARATHI VARATHARAJAN, IMT

GHAZIABAD

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with newer ways of keeping their audience engaged in the game. This time honored and well understood ap-proach in game design has been used to increase en-gagement in the business context through gamifica-tion.

Gamification vs Game theory vs Serious games

Game theory discusses about making decisions that are dependent on the choices of others. There is an as-sumption that players are rational in their choices, which is not necessarily the case. Behavioral econom-ics is beginning to address this. On the other hand, gamification is about turning an otherwise mundane activity into a game like situation so that people are motivated to participate in it. For example, Foursquare badges show that people like to compete and collect badges.

Serious games have a definite purpose and are intend-ed to convey a message. An example is Pass it On from AXA insurance that helps users to better under-stand why life insurance is important.

Behaviorism in Gamification

While determining the best gamification strategy, one must look into the right method of choosing a strategy. This is based on the principles of Behaviorism in gam-ification.

Initially we need to focus exclusively on what people actually do. This is because people don’t always behave the way you want them to and have biases.

Feedback of people is important. Constantly ob-serving a phenomenon and using the feedback to modify the existing strategy will go a long way in influencing the people to be a part of the game.

Next we have to analyze all the consequences. This involves the analysis of the various ways in which the process can be achieved. It also in-cludes negative effects that a particular strategy can have.

All these need to be incorporated in designing the right gamification strategy. Also the various prin-ciples and the techniques have to be reinforced by usage of proper rewards and structures.

Intrinsic and extrinsic motivation factors

Game designers extensively use a well established theory in psychology called the self determination theory. This theory identifies intrinsic and extrinsic

motivation factors that could influence a person’s be-havior. It also states among other things that it is pos-sible for people to internalize the external motivators if they intend to so. Any activity that is more closely aligned with the intrinsic motivating factors is likely to produce more satisfaction. It is important for man-agers to understand what rewards users value the most. Customers get value and fulfillment by engag-ing with the content. This requires an environment that is inherently engaging. Most people might interpret that Gamification is only about points, badges and leaderboards, but that is not the case. A more holistic and broader understanding of game design and behav-ioural economics is essential to build a gamified plat-form. Gamification is a subset of the design thinking approach to problem solving. It is worthwhile to note that design is not a linear process, but iterative.

Figure.1Three innate psychological needs comprise the self determination theory of motivation,

Gamification in Business

Kevin Werbach and Dan Hunter in their book “For the Win” talk about two types of gamification -Internal and external gamification. The internal gamification is intended for motivating employees within an organi-zation whereas the external gamification includes is-sues outside the organization like marketing arenas. They have come up with a general framework for im-plementing gamification in business for both the cas-es.

The implementation would require clear understand-ing of what sort of playful features people like. At its core, Gamification is about finding fun in how you do your work. Microsoft used game elements during its Windows 7 OS localized dialogue box debugging for language compatibility. Instead of hiring language

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see themselves at the top of the table. Microsoft was able to complete the task in quick time with little cost incurred. Club Psych website was gamified for NBCs Universal’s USA network to increase engagement on the website for its new TV show, Psych. The website saw 130 percent jump in page views and 40% increase in return visits. Verizon Wireless decided to use gami-fication to increase the time user spent on their web-site and the amount of interaction with its content. On an average Verizon saw 30% more time on the site with social logins rather than site logins. Samsung launched its social loyalty program, Samsung Nation, to target millions of fans who earn badges for com-pleting activities such as writing reviews, watching videos and participating in the forum.

Devising a Marketing Strategy using Gam-ification

While determining the marketing strategy the follow-ing aspects must be taken care of:

Understanding player types

Demographics

Identifying challenges and roadblocks

Alignment to organizational goals

Motivational designs

Progress monitoring

Outcome analysis

Feedback mechanism for strategy change

Rewards and recognition

Understanding player types: The Bartle’s

Test

One typical technique that is used to identify the kind of players is the Bartle test. A Bartle test is nothing but a series of questions or levels each with a definite set of points associated with them. The results of a Bartle’s type strategy lead to classification of the users into 4 different categories:

This Theory has been used to determine requirements of a particular strategy in attracting specific segments of the people. In gamification, just like unlocking every stage of a game, a particular value for the num-ber of points collected is noted, and every time the mark is reached, users are rewarded. This creates hype among people to attain those points faster and hence to purchase/ shop further. It has been found that this theory works best among Achievers and Killers and less among Explorers and Socialites.

Demographics of the target segment

Analysis of the demographics of the target segment is very important for emphasizing the importance of a particular strategy. For example when divided by class, the flyer miles strategy will work better for frequent business travelling class rather than tourists. While, Loyalty cards issued in cloth stalls and malls will be more effective among the youth.

Figure.2 Source: Retrieved March 16, 2014, from http://frankcaron.com/Flogger/?p=1732

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Feedback mechanism for strategy change

There should be a feedback mechanism in place to tell

us what went wrong where and make note of short-

comings so that they can be incorporated and services

can be made better and effective.

Rewards and recognition

This is the most important feature of gamification. The

customers who buy the products and services must be

aptly rewarded when the desired expectations is met.

Thus whenever a customer uses a loyalty card and

reaches the maximum points specified, He/she must be

aptly rewarded with a remuneration that is of desired

value to the customer’s points. This not only improves

customer satisfaction, but also greatly motivates cus-

tomers to further continue their involvement.

Businesses that used gamifications

Below is a list of some of the top social games and an

account of why they were successful

1. Farmville : Farmville uses Facebook as a dr iv-

ing medium. Farmville allows features of Face-

book to be incorporated in the game. Hence we

can share and play with many other players. Also

we can request for help from other users to im-

prove our farms and unlock the various levels.

This spreads the news about the game through

word of mouth among several people thereby

2. Volkswagen’s Twitter zoom campaign :

Volkswagen promoted the Planetta Terra festival

by providing tickets for its online twitter racing

game. The users also started using hash tags and

encouraged other players to participate. Thus

fame of the campaign sky rocketed.

3. Reverberation : This uses the strategy of con-

tent marketing and analysis of progress through

the Progress bar. Initially bands sign in to rever-

beration through their basic profiles. As and when

they attain progress, their progress is noted,

tracked and also the tracks of the band are shared

among various bands.

4. History channel’s Foursquare Badges :History

channel along with its apt rewarding system pro-

vided Foursquare badges to visit historic locations

in the USA to all its followers . Also the followers

are rewarded with tips and historic information

regarding each site they visit..

5. Nike+ : Nike used its reputation in the market

to develop a mobile app that keeps track of the

various exercises that are done, the distances cov-

ered and so on. We can also share our work ac-

complishments with our friends. Thus Nike capi-

talized the existing brand image to gain more

market through a new venture into mobile apps.

Identifying challenges and roadblocks

This is based on the principles of behaviorism. What we think the customers would want and how they will behave, might not actually be the reality. Different people have different choices and biases. These will pose serious roadblocks while designing a strategy.

Alignment to organizational goals

While designing strategies, we have to make sure that it is well in tune with the organizational goals and not violating it.

Motivational designs

The design of the strategy should be in such a way that it motivates people to get involved and participate bet-ter. This can be well explained by the self-deterministic theory wherein people will always be motivated to act in a way that is best suited to them and which they consider healthy for their lifestyle. So the marketing strategy that is employed must fulfill the people’s needs to get motivated.

Progress monitoring and Outcome analysis

The process must be constantly monitored to check if we are moving in the right direction. Based on the out-comes, analyses have to be made and changes are to be incorporated.

Feedback mechanism for strategy change

There should be a feedback mechanism in place to tell us what went wrong where and make note of short-comings so that they can be incorporated and services can be made better and effective.

Rewards and recognition

This is the most important feature of gamification. The customers who buy the products and services must be aptly rewarded when the desired expectations is met. Thus whenever a customer uses a loyalty card and reaches the maximum points specified, He/she must be aptly rewarded with a remuneration that is of desired value to the customer’s points. This not only improves customer satisfaction, but also greatly motivates cus-

tomers to further continue their involvement.

Businesses that used gamifications

Below is a list of some of the top social games and an account of why they were successful

1. Farmville Farmville uses Facebook as a driving medium. Farmville allows features of Facebook to be incor-porated in the game. Hence we can share and play with many other players. Also we can request for help from other users to improve our farms and unlock the various levels. This spreads the news about the game through word of mouth among several people thereby making it famous.

2. Volkswagen’s Twitter zoom campaign

Volkswagen promoted the Planetta Terra festival by providing tickets for its online twitter racing game. The users also started using hash tags and encouraged other players to participate. Thus fame of the campaign sky rocketed.

3. Reverberation

This uses the strategy of content marketing and analysis of progress through the Progress bar. Ini-tially bands sign in to reverberation through their basic profiles. As and when they attain progress, their progress is noted, tracked and also the tracks of the band are shared among various bands.

4. History channel’s Foursquare Badges

History channel along with its apt rewarding sys-tem provided Foursquare badges to visit historic locations in the USA to all its followers . Also the followers are rewarded with tips and historic in-formation regarding each site they visit.

5. Nike+

Nike used its reputation in the market to develop a mobile app that keeps track of the various exercis-es that are done, the distances covered and so on. We can also share our work accomplishments with our friends. Thus Nike capitalized the existing brand image to gain more market through a new venture into mobile apps.

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References

1. 5 Ways Brands Gamify their Social Media Marketing. (n.d.). Business 2 Community. Retrieved March 16, 2014, from http://www.business2community.com/social-media/5-ways-brands-gamify-their-social-media-marketing-0387767#ckzmsP9pCSTdLqAD.99

2. Deci, E. L., & Ryan, R. M. (2008). Self-determination Theory: A Macrotheory Of Human Motivation, Devel-opment, And Health.. Canadian Psychology/Psychologie canadienne, 49(3), 182-185.

3. Gamasutra: Andrzej Marczewski's Blog - WhatÂ’s the difference between Gamification and Serious Games?. (n.d.). Gamasutra Article. Retrieved March 16, 2014, from http://www.gamasutra.com/blogs/AndrzejMarczewski/20130311/188218/

4. How Three Businesses Scored Big with Gamification. (n.d.). Entrepreneur. Retrieved March 14, 2014, from http://www.entrepreneur.com/article/223039

5. Newsroom. (n.d.). Gartner Says Worldwide Video Game Market to Total $93 Billion in 2013. Retrieved March 14, 2014, from http://www.gartner.com/newsroom/id/2614915

6. Video Game Industry Statistics, Industry Statistics, Video Game Industry Trends, and Information - Grab-Stats.com. (n.d.). Video Game Industry Statistics, Industry Statistics, Video Game Industry Trends, and Infor-mation - GrabStats.com. Retrieved March 16, 2014, from http://grabstats.com/statcategorymain.aspx?StatCatID=13&SubCatID=103

7. Werbach, K., & Hunter, D. (2012). For the win: how game thinking can revolutionize your business. Philadel-phia: Wharton Digital Press.

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Introduction

Before dwelling on the topic of depreciation, there is one important thing which one should be clear of i.e. the difference between Depreciation and Devaluation of a currency.

Depreciation is reduction in the value of domestic currency due to market forces in the flexible or floating exchange rate regime. Under floating exchange rate regime market forces determine the value of a currency and various factors like: political stability, economic conditions, Interest rates, economic fundamentals etc affect its value. Whereas Devaluation is deliberate reduction in the value of domestic currency by the Government under fixed exchange rate regime and semi fixed exchange rate regime. It is relative to any other currency, group of currencies or standard.

The Indian rupee since independence has gone down by little more than 65 times against US dollar. In 1947, rupee was equivalent to US dollar as India did not have any foreign borrowings on its balance sheet. But since then, the continuous pressure on development, increase in the foreign borrowings, War breakouts with china and Pakistan, changes in monetary policy, increasing inflation rates, political instability, economic conditions etc., all have played their part in reducing the value of Indian rupee.

RUPEE DEPRECIATION, THE

JOURNEY SO FAR AND ITS IMPACT AJAY KUMAR TAWANI, TAPMI

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The Journey So Far

India adapted fixed exchange rate regime in 1947 and

the rupee was pegged at 4.79 against a dollar between

1948 and 1966. Two consecutive wars with china in

1962 and with Pakistan in 1965, resulted huge deficits

in Indian budget and the government was forced to

devalue the currency at 7.57 against the dollar. There-

after rupee was continuously devalued at regular inter-

vals and in 1991 India faced a severe financial crisis

and was forced to sharply devalue its currency be-

cause of high inflation, low growth and dearth of for-

eign reserves. The currency was devalued to 17.90

against a dollar.

In 1993, the exchange rate regime was changed as

economic policies were altered with the introduction

of liberalisation, privatisation and globalisation

(Popularly known as LPG reforms introduced by our

present Prime Minister Dr. Manmohan singh in 1991)

and the currency value was let free to be decided by

market forces with provisions of intervention by cen-

tral bank under extreme volatility conditions. This

measure of floating exchange rate regime encouraged

trade relations with other countries and with low re-

strictions on licensing and trade, the economy slowly

started recovering. The rupee traded around 40 -50

between 2000 and 2010.

But extreme volatility was seen in the year 2013 with

rupee touching all time low of 69 in the month of Au-

gust. This was the year in which the maximum amount

of reduction in the value of rupee was seen. Several

attempts were made by the RBI to control the depreci-

ation of currency and the new Governor Raghuram

Rajan was successful to an extent and today the value

of rupee against a dollar is 61.11. The Central bank

has resigned from intervening further because the de-

preciation was due to other global market conditions

which were beyond the control of RBI to monitor.

Historic evolution of rupee and how its value has

changed over time can be figured out from the chart

given below:

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Factors leading to Depreciation

Changes in foreign economic and trade policies

Demand for foreign currency increases than its supply in the market

Increasing Imports than exports

FII’s withdrawing from market

Decreasing Foreign reserves

Increase in foreign borrowings or external debt

Increasing Budget Deficits

Pressures on Current account deficits

High Inflation rates

Increasing Trade deficits

Pressures on Balance of payments

Low growth rate

Enticing foreign Economies

US quantitative easing

US Fed Tapering

Terrorist attacks

Economic conditions

Political factors

Any uncertain event affecting National economy as well as world economy.

Note that the above list is not exhaustive and there can be many other factors which lead to reduction in the value of rupee.

Effect or Impact of Rupee Depreciation

Depreciation is good but extreme volatility is not. For the companies which are export driven, depreciation of rupee is good for them as they can benefit from it, but these days this is not always true because the global buyers are insisting on contracts which can be altered as and when the exchange rates change. For example global buyers of leather goods and garments insist on contracts invoicing in rupee terms thus thrashing out the benefits which can be accrued because of deprecia-tion of rupee.

One fact that deserves no mention is the condition of an economy or a company which has major portion of its raw materials or consumption, from imports when the value of rupee is depreciating. The increasing costs of buying will erode the profits on the P&L statement and the company will run into deep troubles unless it finds alternatives to over come this problem. Therefore for a company which is import driven, the reduction in the value of rupee will bear severe consequences and it becomes difficult for the company to survive if the conditions turn out to be extremely volatile. Let’s get into more about effects of rupee depreciation:

It will become difficult for the students who are studying in foreign countries to repay their sum of loans.

Capital Inflows will reduce or reverse.

It will lead to High inflation rates in the economy.

The cost of buying will increase.

For the companies which are export driven but their final products are composed out of imported goods, the benefits will be nullified.

The rating of the nation will go down and will get rated as “JUNK” which will further make life dif-ficult to borrow from the foreign economies and the cost of borrowing will increase dramatically.

FII’s will move out of the economy and as the rating goes down the new investors will also not get attracted to invest in the economy.

High pressures on Balance of payments, Trade deficits and current account deficits.

Bourses in the economy will get a bashing and the sentiment in the market gets hit.

Energy sector is the one which will get affected most because oil is traded globally and the prices are set in the globally accepted currency.

Measures

We have seen that economy gets hit from all the direc-tions if its domestic currency gets depreciated , there-fore the need for apex authorities like RBI and Finance ministry arises to take some measures to control the fluctuation. Lets look at some of the measures which have been and can be taken to control the depreciation:

Restrictions on Imports should be imposed and exports should be encouraged by means of giving tax rebates or by removing licensing barriers.

Gold Imports should be curbed.

Growth rate in the economy should be increased by way of creating more opportunities for the in-vestors to invest in and by adjusting interest rates to the appropriate levels.

Restrictions on spending in foreign economies or current account controls

RBI takes measures by adjusting LAF (Liquidity Adjusting Facility), Lending Rates, Increasing interest rates on Bonds, Capping the borrowing limits by Banks etc.

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References

1. India Stat website: http://www.indiastat.com/article/59/nikhil/full%20text.pdf

2. Retrieved from article “Rupee’s Journey since Independence: Down by 65 times against a dollar” from the website: http://articles.economictimes.indiatimes.com/2013-08-24/news/41444029_1_indian-rupee-american-currency-continued-dollar-demand and last accessed on 07/03/14.

3. Retrieved from the website: http://www.slideshare.net/meet_leena02/depreciating-rupee and last accessed on 07/03/14.

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Radio frequency identification (RFID) technology uses radio waves to automatically identify physical objects (either living beings or inanimate items). RFID is an example of automatic identification technology. Data on the object (serial numbers, object information, etc.) are stored in the RFID chips embedded in or attached to the object. Using an RFID reader, the identity of the object (data on the object) can be interpreted in a wireless environment.

Figure 1 represents RFID chip and RFID chip used in a Master card

RFID– INNOVATION IN LOGISTICS

AND SUPPLY CHAIN

MANAGEMENT SHUBHAM AGARWAL, IIM INDORE

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RFID system is an integrated collection of Tag, Reader, Reader Antenna, Controller, Sensor, Actuator, Host and software system and Communication infrastructure.

Figure 2 represents working procedure of RFID solution

Advantages of RFID Limitations of RFID

Can be read without physical contact and Can sus-

tain rough operational environment

Cannot be used in materials made of RF opaque

(Metals) and RF absorbents (Water)

RFID tag can be read up to 100 feet and it can be

re-written a large number of times

Surrounding condition (like having metal and liq-

uids) can impact RFID solution

RFID reader can read multiple tags at a time and

line of sight is not required

Improper installation can lead to reading collisions

Can be used to perform other duties like measuring

temperature and pressure

Immature Technology and a practical limit on num-

ber of tags that can read at a time

IDTechEx find that in 2013, the total RFID market is worth $7.88 billion, up from $6.98 billion in 2012, and growing to $9.2 billion in 2014. This includes tags, readers and software/services for RFID cards, labels, fobs and all other form factors. IDTechEx forecast that RFID market would rise to $30.24 billion by 2024.

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Figure 3 represents Total RFID Market projections in US$ billions

Source: IDTechEx report “RFID Forecasts, Players & Opportunities 2014-2024”

Hig

h

Low

Sa

vin

g O

pp

ort

un

ity

High Low Ability to create Movement

Figure 4 represents RFID Industry Market Opportunity Analysis

Source: Computer Sciences Corporation

Defence

Natural

Resources

Healthcare

Security

Manufacturing

Retail

Pharmaceutical

Distribution Transportation

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A bar code is a scheme in which printed symbols represents textual information.

Points of Comparison

Products RFID Barcode

Technology Radio frequency Optical (Laser)

Line of Sight Not required Required- Scanner must physically see

each tag Read Range High- 10 to 100 feet Low- Inches to a few feet

Read Rate High- Multiple tags can be read in

one pass

Low- Only 1 tag cab be read at a time

Capabilities Read, write, modify , trigger Read Only

Interference Don’t work with certain metals and

liquids

Easily damaged or removed, also un-

readable if torn, dirty Security High- Difficult to duplicate Low- Easy to duplicate

Human Labour Low- No manually scanning High- Manually scan each tag

Cost High Low

Figure 5 represents RFID benefits in Retail Industry

Source: Comparative Analysis of RFID Adoption in retail and manufacturing sector by Mithu Bhattacharya,

Chao- Hsein chu and Tracy Mullen

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Figure 6 represents Retailing out of Stock Losses

Source: 2002 Retail out of stock study by Groen, Corten and Bharadway

Figure 6 shows that reliable estimate of lost revenue for a retailer due to out of stock can be anywhere from a few percent to 8 or more percent. If a typical retailer losses 4 percent of sales due to being out of stock, the improvements to the top line for Wal-Mart could be $12 billion in additional revenue with adoption of RFID technology.

Figure 7 represents challenges for RFID implementation in Retail Industry

Source: Comparative Analysis of RFID Adoption in retail and manufacturing sector by Mithu Bhattacharya,

Chao- Hsein chu and Tracy Mullen

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We can see that challenges are also somewhat related to each other like benefits. With technology advance-ments, most of these challenges will eventually be overcome. However, being a societal issue, privacy requires more than technological advancements and will remain a major challenge for retailers. A balance between benefits consumers can get in terms of better service and savings and the impingements of privacy should be top priority of retail sector.

Recent example of an RFID solutions im-plemented in a retail store

Brazilian retail store Memove using RFID solutions to track and control inventory. Memove’s clothing manufacturers in Brazil, China and elsewhere begin by sewing a passive RFID label into each item. With RFID label in place, items are carefully tracked as they make their way to the distribution centre and then to the store, their arrival automatically updates the store’s inventory system. Also on hand at each store is an RFID-enabled trolley that need only be rolled through the aisles to update inventory in minutes. Dressing rooms are connected as well so as to track how many items enter and leave each stall. Shoppers, meanwhile, can themselves check out se-curely by placing all their items in a dedicated RFID-enabled basket, which calculates the total price. Once the customer has paid either by cash, debit or credit card at the POS terminal, the basket automatically updates inventory and erases each RFID label’s en-coded ID number so that alarms won’t sound as the shopper exits the store.

Effective RFID solutions depend on totally integrated systems that can assimilate data to create decision ready information, in addition to necessary sharing of information with retailers. This technology also has significant customer benefits which solidifies its adoption in retail Industry. The ability of retailer to monitor the shopping habits of the consumer in the store at the time of purchase using RFID will help retailer to better understand customer needs and thereby induce better relationship with the customers. This technology takes time to master and no one has completely mastered the current technology. RFID is an inevitable technology and business cannot ignore its vast potential and impacts but there are still uncer-tainties impeding its progress and acceptance in busi-ness world.

The future for RFID is to develop more control from farther distances, becoming ubiquitous, ambient, more intelligent and thus making objects not only communicate with us, but to be smart and think for themselves and us. The future of identification tech-nologies is to make RFID solutions more complex, applying advancing technologies such as Virtual Re-ality and Remote Access, to make tagged assets work for us in wider ranges and collect more and varied data.

Figure 8 represents RFID solution implemented at Memove Retail store, Brazil

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A few potential areas of uses for RFID in the future can be:

Sl. No Potential Areas Uses

1 Identification

Advanced ID cards and recognition systems

More secure, safeguards and protected I.Ds

2 Payments

All credit and debit cards are RFID enabled

Personal gadgets like mobile phone also chipped

3 Vehicles

RFID enabled real time car parking

Automatic pay of toll taxes using RFID

4 Animals

Advanced and open identification

Easy tracking, tracing, monitoring, controlling

using RFID

5 Buildings RFID can be used to allow users to control, man-

age data on all aspects of equipment used in build-

ings

Higher building security

RFID tags to manage energy consumption

References

1. Poirer, C., & Mc.Collum, D. (2006). RFID Strategic Implementation and ROI. Florida: J. Ross Publishing

2. Lahiri, S. (2005). RFID Sourcebook. New Delhi: IBM Press

3. Bhattacharya, M. & Chao Hsein Chu & Mullen, T. (2008). Comparative Analysis of RFID Adoption in retail and manufacturing sector. IEEE conference on RFID, 2008

4. Bhattacharya, M. & Chao Hsein Chu & Mullen, T. (2007). RFID implementation in retail industry: Current Status, Issues and Challenges. Decision Science Institute (DSI) conference, 2007

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You have 33 years of experience in 6 different industries, rather 6 highly diverse

industries. Is there anything common that you have found in them all, be it in your

approach, or the requirements of the company, etc.?

Yes, of course. What you need to understand is that no matter which department or functional area you’re a part of, you’re basically selling a product or a service; which is something many people fail to realize.

The approach to business however remains common, and changes little with the industry. This means that the approach you have must be based on a strong set of values. If you don’t have a strong foundation of values and ethics, you won’t last very long in the corporate world. I know that today everyone feels that there must be shortcuts, but there are no shortcuts to hard work. This is what has remained common across all the industries that I have worked in.

Healthcare was not as dynamic as your current industry. What was your approach?

Healthcare and Connectivity are two very different industries. Though they are both technology driven in their own ways, it is very difficult for me to compare them because they’re different in their

MR. V RAJA, PRESIDENT AND MD,

TE CONNECTIVITY EXCERPTS FROM THE INTERVIEW

by PALLAVI PRASAD, AYON KUMAR

THE CORPORATE EDGE

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technicalities. Still, to answer your question, Healthcare industry is a relationship based industry. There, it is not just about how fast you change your technology or how much you’re updated with the latest equip-ment, but also how you build your relationships with your customers. Connectivity, on the other hand, is where the speed and intensity of your technological knowledge and advancement matter more.

You moved from functional management to general management? What personali-ty traits according to you are required to make that change?

There are a lot of traits that helped me make that change. More than any of these traits there’s a simple principle – your focus is always the customer.

I have been a Finance guy most of my life, and I have even some of my colleagues become complacent after a time, as there is no accountability. The idea is to think of yourself accountable to the customer. I made sure that my customer was satisfied, and this is what helped me make the transition easily.

Also, there must be a willingness to learn. I was very willing to learn about completely new functional are-as, from any source that was available, because I believe that learning never stops. I shed my inhibitions, and this helped me gain the overview that was so required to see things from a CEO’s perspective.

There is often a perceived glass ceiling especially in case of an HR person. What is your take on that?

The first question that you need to ask is-Is the organization hierarchical?

Assuming it is, and if you really are caught in such a situation, then it would depend on you how you de-fine growth. Some people associate growth with simply a gain in rank. That is not true. If you are a HR person, you could think of expanding in other directions, maybe head a new country, a new division, or even a new functional area. The idea is not that is there a glass ceiling, but what is your approach to the problem?

What are the qualities, traits, and attitude that you look for in an MBA?

The first and foremost is willingness to learn. Then the passion which he/she must have to excel. Time and again, I have emphasized on loving the work that you do. Because otherwise you will work, but you will not put your heart and soul into it.

Also, I would want the person to be hard-working. I don’t expect a highly talented fellow, but I do expect one who is willing to put in everything he’s got. This, along with a strong set of values, should get the per-son the desired achievements quite early.

Finally, I would like to say that your generation has a lot more resources that our generation had. I want you to use it in a sensible way. Learn from it and benefit from it.

Your experience in TAPMI?

First of all, I have understood that TAPMI’s focus on ethical values is very strong, which is very endearing. I have seldom seen such strong emphasis, and I really appreciate the efforts that go into it, both of the fac-ulty and the students.

What I really liked was the quality of questions put to me by the students. They were very insightful and very probing. I read the curriculum and understood that its excellence is internationally recognized. You have all the ingredients to produce excellent alumni. I believe you have already doing so. You have many alumni in influential positions across the world, and I see no reason why you should not continue to grow the way you have.

THE CORPORATE EDGE

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How was your day today? How does it feel to be back at TAPMI?

It feels great to be back. I don’t think words can describe the feeling of being back here. It’s been 16 years since I passed out in 1997 and came back for homecoming in 1998. I am filled with lots of nostalgic memories. Back then in 1997, TAPMI was operating from a different block and the infrastructure was not like the sprawling campus you have now. But I think we did quite well in the limited infrastructure we had. The two years here made so much difference in my career. I had a prior work experience of 5 years before I came to TAPMI and I was one of the few members to have such high amount of work experience .I knew that post-graduation is a must to round off any knowledge that I had picked up by practice. So I was clear that I am going to do a post-graduation and my decision to do so was proven right. Those 2 years sort of transformed me and were the most crucial years of my life, as they helped me position well for the corporate world.

You said you had an experience of 5 years before coming to TAPMI? How do you

think that helps? Is it an advantage?

To some extent it’s an advantage. The theory that you study; there are different ways of using it in practice. For people who don’t have an experience, they have to struggle just a bit, to understand how this will be put into practice. But if you come with an experience, some of the case studies that you study in your management education, you are able to relate to them quite easily. Therefore work

MR. MADHAVAN P B, PURCHASING DIRECTOR

(APAC), FORD MOTOR COMPANY TAPMI ALUMNUS, BATCH OF 1997

EXCERPTS FROM THE INTERVIEW

by NEHA PODDAR

ALUMNI CONNECT

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experience helps you to internalise theories that have been taught which may be difficult for people who are not able to relate to the situation.

Usually people coming from science background are often confronted with a ques-tion, why MBA? Why this career switch? How would you address this question?

You might have studied engineering but the work you do need not be hardcore engineering, it can be in different functions in an engineering industry. For e.g.: Automotive industry is an engineering industry. But this industry still needs all the functions to make it produce automobiles. It requires IT, it requires HR, and it requires finance. So you don’t need to be a hardcore engineer to be a part of automotive industry, just the basic knowledge is necessary and is sufficient. Every successful organization needs all functional skill teams to work together and hence need personnel from all major disciplines that a management school would normally offer.

You have been associated with ford for about 18 years now. What has kept you as-sociated with Ford for so long? Would you like to share some experience about your journey?

It all comes down to what one wants in life. Everybody has a goal and rather should have a goal. A goal that keeps driving them and that is a constant source of motivation. The company is just a medium through which you understand your capabilities and utilize your skills and potential to achieve the goals. People change companies when they see they are not reaching their goals while in the company they are working, or the role they are doing. After I did my under graduation in engineering, I entered the automotive indus-try by chance. But, after my post-graduation, I took a job in automotive industry. It is a growth industry and I have always been fascinated with automobiles since my childhood. So it was always my passion to be in an automotive company. After I finished my post-graduation, I applied to a lot of automotive compa-nies and one of it with which i got a job was Ford. Ford was very well known for its people friendly poli-cies and an American outlook as compared to some other companies which are not very favourably placed. So I chose Ford. The company’s culture is that it allows people to flower. You have overall guidelines but they give complete freedom to pursue anything under the roof within those guidelines, which helps the company meet its objects as well as your personal objectives. It was this freedom of space that really at-tracted me and I haven’t found the reason to change so far. The other thing that I need to mention is the unique culture at Ford – every one addresses others by the first name (No Sir…), an open door policy at all management levels, importance placed on diversity, focus on working together as one team, importance given to only performance and nothing else. All these make Ford, truly a great organization to work for. I should add that we have a low attrition rate and many of the people who have left is expressing their desire to come back to Ford.

It is said that in the automotive industry the competitive edge is placed on continu-ous price reduction combined with increasing quality expectations of customers. Production costs are increasing because of the proliferation of models and furnish-ing options. We see that vehicles are becoming more complicated; there is growing price sensitivity, growing awareness of environmental factors and decreasing brand loyalty. What are the major challenges that you have you have faced in the recent past?

Nobody in the automotive industry can escape these challenges. Let me answer this question in more than one way.

1) The automotive industry is a growing industry which is a big plus because there are number of indus-tries that may not be on a growth path.

2) Automotive business in no longer country based or region based, it’s a global business. No OEM can succeed in its business without having the globe as its market. There are a lot of complexities with many people wanting different things in different cars across the globe. But there are also a common set of things that customers look for in a car. Ford’s philosophy since 2007 has been to have global cars, manufactured in various global locations, to suit the needs of the local customers. We can do some things better by fine-tuning some of the feature contents for the local market. But it is a complex system where u have to bal-ance between the cost of tailoring a product, vis-a-vis the volume scale that you can have by generating a common product. We see that it’s always a tough balance.

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Majority of manufacturing cost in an automotive company is explained by its pur-chase purchased parts and materials, lately many companies have been under tre-mendous pressure to achieve lower cost solutions, what such solutions has Ford tak-en up?

The best of the automotive companies in the world have operating margins of around 9-10% consistently. Comparing that with smartphone industry, some global major players used to operate at around 40% mar-gins till sometime back. Automotives and smart phones are two different industries operating in different paradigms. For an industry that is operating at such small margins, cost saved is relatively more important and contributes to profit. 70% of the cost of a car comes from the parts that company buys, that’s where purchasing department comes in. Purchasing department along with Product Design department play a very important role in the financial viability of an automotive company. Cost reduction is the need of hour. And how are quite a few methods by which we can decrease costs.

We have couple of ways of watering down content. For e.g.: You develop a different steering wheel for Europe, US and you have a basic one fir India. Therefore the one for India, it will cost lesser. So, that was the first generation way of cutting costs. But the Indian customers have grown, they have become more mature, they are not in a position to accept the second level of feature contents in a car, they want the best in the world. Watering down content and removing content is no longer an option for longer term success. You have a short term one or two hits that way, but a long term automotive company cannot make profit. So the key is to have a good strategy on the purchasing side. So what Ford does is, we have global suppli-ers. For e.g. Ford Ecosport, which was launched last year, it’s been made in 5 different markets: Brazil, China, Thailand, and India and next in Russia. If there is one part required, one supplier will source to all the 5 markets. That supplier will make the part in individual regions but globally there will be one single supplier. So that supplier is able to get the scale. For e.g.: Global India might be doing 80,000 Ecosports and globally, we are doing 1.5 million Ecosports. So that supplier gets annually 1.5 million volume of that particular part. With that global scale we are able to get better pricing. Plus localisation for e.g.: a steering column assembly could be local. It could be assembled locally but it might have lot of imported parts as-sembled within that. So we need to go down to localisation. Value chain localisation is one more route through which we can bring down the costs. So, global programs, global sourcing and value chain locali-sation are three ways by which we can bring down the costs.

Any words for TAPMI students who wish to pursue career in operations or manu-facturing?

The manufacturing industry is a great learning ground. It might not be the best paymaster but it offers a lot of opportunities to learn the job well. It offers a very good ground for the people who are starting their ca-reer especially after management education where you have a balance of your under graduation and your post-graduation. People who have a flair for manufacturing industry normally find it very difficult to go away into IT or any other industry. Manufacturing is a great place to learn and amount of value you can add to yourself is immense. Here you see the value you add comes into the product you make; you can touch and feel it. For e.g.: in ford every part you help, either you purchase, design or make, you can touch and feel those products in the market. It gives you satisfaction of having done something which is a com-pletely different feel from any other industry.

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