Last three decades, we have seen an enormous change in the triangular relationship between corporate houses, society and the state; and we are observing now that companies are no longer an individual entity, they are now well encouraged by its stake holders; companies have started to realize the paramount importance of its stake holders and that is why they are now eagerly trying to make bridge between corporate , society and the state. Thus companies have started to develop Corporate Social Responsibilities (CSR) or it is also called as Corporate Citizenship.
First thing I would like to discuss what the Corporate Social Responsibilities is all about? Corporate Social Responsibilities can be defined as the concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. World Business Council for Sustainable Development defines CSR as “The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.” The European Commission advocates CSR as “Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders.” Thus CSR exhorts corporate to diverge from their sole aim of maximizing profits and to lay more importance on improving the economic and social standards of the community in their countries of operation. CSR can be thus be simply defined as the additional commitment by businesses to improve the social and economic status of various stakeholders involved while complying with all legal and economic requirements.
The three major elements of CSR are product use which focuses on contribution of industrial products which help in well being and quality of life of the society, business practice which focuses on good corporate governance and gives high impetus for the environmental well being and equity which tries for distribution of profits equitably across different societies especially the host community.
Therefore, we will look at Arcelor-Mittal how they are operating their CSR through out the world or its community. Lakshmi Niwas Mittal, one of the “100 Most Influential People” (Time Magazine, 2007) and the richest Indian in the world (Forbes, March, 2008), is known as the man behind Arcelor-Mittal for him good CSR is always strategic and he believes that a business has to create a win-win situation for all its stakeholders.
Arcelor-Mittal and CSR:
1. Arcelor-Mittal take a long view espouses in its brand promise of “Transforming Tomorrow”, a CSR mission in Brazil, of thinking not only of today but also the generations to come. Corporate Social Responsibility for Arcelor-Mittal, Brazil, means not only improving the qualifications of its own work force, but also investing in a junior company programme for high school students to better the quality of life for the people. Brazilian Quality of Life Association (ABQV) has given the award The Global Program Award in recognition of the “Pro-Quality of Life” program designed for improving the quality of life of employees and their dependents.
2. In Brazil itself more than $ 27 million invested over the year in community
social programs that reach more than two million people. Self-sufficient in the electricity used to produce flat steels with on-site thermoelectric generation of approximately 500 MW, and a world benchmark in recycling of waste and recirculation of fresh water are two most vital initiatives taken by Arcelor-Mittal in Brazil.
3. Arcelor-Mittal defines them as their commitment is reflected in their dedication to reduce carbon emissions (CO2) with the introduction of projects to support the United Nation's Clean Development Mechanism (MDL).
4.. Arcelor-Mittal have started the programme on ecoefficiency in all their units in order to make a pollution free world, because pollution is one of the threats for the world which results in Global Warming.
5. Their corporate governance policy is one of the most noticeable CSR activity in which they are offering independent directors the equal authority as that of the company’s executive directors, and also they are providing equal rights to its all shareholders, their improvement of transparency and dialogue with its shareholders is really appreciable.
6. They are assuring to provide the best health and safety measures to its employees and also good working environment commitment to its well worthy employees.
7. Arcelor-Mittal renewed the tramways, power plants, the hotels, the stadiums, and developed social activities such as children camps in Kazakhstan before it own and operate its steel plant there, thus they are able to positively impact the livelihood of the community more broadly while continuing to improve the plant’s efficiency.
8. Arcelor-Mittal is also now taking a initiative role in promoting games, Mr.Abhinav Bindra, India’s first ever individual gold medalist at the Beijing Olympics in 2008,was awarded a Rs.1.5 crore cheque from Mittal Champion Trust(MCT), Mr. Virdhawal Khade ,a swimmer, representing India in Olympic 2008,Beijing,was sponsored by MCT too.
Thursday, September 24, 2009
In the time of recession in EU and US, more and more shoppers seem to be switching from full service retailers to discount stores. Is it a threat to existing discount stores?
Concept of discount retailing:
A discount store is a type of department store, which sell products at prices lower than those asked by traditional retail outlets. Discount stores are not dollar stores, which sell goods at a dollar or less. Discount stores differ because they sell branded goods and prices vary widely between different products. Most discount department stores offer wide assortments of goods; others specialize in such merchandise as jewelry, electronic equipment, or electrical appliances. Many of the major discounters are now opening "super centers", which add a full-service grocery store to the traditional format. . Although discount stores and department stores have different retailing goals and different markets, a recent development in retailing is the "discount department store".
Details about Wal-Mart:
Operational , supply chain and marketing strategies:
All successful retailers have identified their Unique Selling Proposition (USP), which is the aspect of their business that makes them different from their competitors , that USP drives marketing, merchandising and even the in-store customer experience. It is proved that without uniqueness no one can stay just with brand in this industry, and also shows that no brand is invulnerable and longevity does not guarantee a future for any discount retail store. An example of this fact is Exxon Mobil’s retail failure. And here only Wal-Mart beats its all competitors and I will now enlighten their all strategies involved in their superiority.
Wal-Mart's position starts at two ends of the spectrum - make as many things as widely available to as many people as possible with small margins. Wal-Mart’s business strategy we can classify into three main domains:
1.CustomerIntimacy
2.ProductLeadership
3. Operational Excellence
1. Customer Intimacy: Customers would be provided what they want, when they want it, all at a value. Wal-Mart strategy is from beginning customer friendly and they say,
“We do not sell articles to our customers, but instead, we buy articles for our customers”. Wal-Mart excels at operations and execution often by providing a reasonable quality at a very low price. The focus is on efficiency, streamlining operations, Supply Chain Management, no-frills, volume counts. The “10-Foot Attitude” was another customer service approaches Walton, owner and founder, encouraged. He asked associates to make a pledge, telling them, “I want you to promise that whenever you come within 10 feet of a customer, you will look him in the eye, greet him, and ask him if you can help him”. The “Buy American” program was a Wal-Mart retail strategy, which means average American can buy and use branded product from Wal-Mart.
2. Product leadership: Wal-Mart also maintains status quo with the other two disciplines by offering innovative (new to market products - walmart.com, now selling music on-line similar to itunes). Right now, one of their most talked about strategies has been their entrance into the online social space with Wal-Mart - The HUB (School Your Way). They want to become the next MySpace, but they seem to be a long way off Wal-Mart’s winning strategy in the U.S. was based on selling branded products at low cost. Wal-Mart is a one stop shop for average American families where they can get gas, a tune-up, new tires, groceries, apparel, electronics, pharmacy services, and basically everything they need for their daily lives. Wal-Mart enjoys a competitive advantage by offering those comprehensive products and services through everyday low prices.
3. Operational Excellence: For any firm employees are the most effective factor and backbone of any industry and there Wal-Mart shows its excellence which allows them to stay in competitive market for years together being the best. They explains, “Treating each other as we would hope to be treated acknowledging our total dependency on our associate – partners to sustain our success”. Employees are the basis for success of the company and drive the day-to-day operations. Wal-Mart’s employees, feeling like associate partners, gives them a feeling of empowerment and pride that drives the company’s culture. Every associate that had been with Wal-Mart for at least one year, and who worked at least 1,000 hours a year, was eligible for profit sharing of the company. Using a formula based on profit growth, Wal-Mart contributes a percentage of every eligible associate’s wages to his or her plan, which the associate can take when they leave the company, either in cash or in Wal-Mart stock. One of the significant costs for retailers was shoplifting, or pilferage. Wal-Mart addressed this issue by instituting a policy that shared 50 percent of the savings from decreases in a store’s pilferage among that store’s employees through store incentive plans. Wal-Mart also instituted several other policies and programs for its associates such as incentive bonuses, a discount stock purchase plan, promotion from within, pay rises based on performance not seniority, and an open-door policy.
Now it is a time to discuss how full service retailers can be a threat to discount retail service providers. In my eyes full service retailers can not be a threat to discount retailers because of following reasons:
1. First thing is the USP that drives the discount retail honchos far ahead of the full service retailers. Wal-Mart, Target, Kmart like discount honchos have their uniqueness in product service, product promotion, business strategy. It is true that many of the full service retailers are now becoming discount retailers in the time of recession to catch the average consumers’ eyes, but they are more prone to short time profitability rather looking for long term profitability. This is the area where discount retailers can easily beat the full service retailers.
2. Second thing is obvious the customer service, that is undoubtedly far better for the discount retailers than the full service retailers. Since the discount retailers are more looking forward to long term profitability, they are inventing lots of customer friendly services which can not be fetched by the full service retailers.
3. Discount honchos have already created a steady market for their own and they have unquestionably more wealth from the full service retailers and this in turn can beat the full service retailers, because these big fishes can withstand by getting less profit for sometimes but for the full service retailers it is a tough task, because it is necessary for them to compete with discount honchos to give quality product in low prices.
4. Discount retailers are now expanding their market through out the world and they are now going beyond to their own country border, which gives them wide range of market compare to full service retailers and there again they can take over the full service retailer and can hit them under the belt.
Concept of discount retailing:
A discount store is a type of department store, which sell products at prices lower than those asked by traditional retail outlets. Discount stores are not dollar stores, which sell goods at a dollar or less. Discount stores differ because they sell branded goods and prices vary widely between different products. Most discount department stores offer wide assortments of goods; others specialize in such merchandise as jewelry, electronic equipment, or electrical appliances. Many of the major discounters are now opening "super centers", which add a full-service grocery store to the traditional format. . Although discount stores and department stores have different retailing goals and different markets, a recent development in retailing is the "discount department store".
Details about Wal-Mart:
Operational , supply chain and marketing strategies:
All successful retailers have identified their Unique Selling Proposition (USP), which is the aspect of their business that makes them different from their competitors , that USP drives marketing, merchandising and even the in-store customer experience. It is proved that without uniqueness no one can stay just with brand in this industry, and also shows that no brand is invulnerable and longevity does not guarantee a future for any discount retail store. An example of this fact is Exxon Mobil’s retail failure. And here only Wal-Mart beats its all competitors and I will now enlighten their all strategies involved in their superiority.
Wal-Mart's position starts at two ends of the spectrum - make as many things as widely available to as many people as possible with small margins. Wal-Mart’s business strategy we can classify into three main domains:
1.CustomerIntimacy
2.ProductLeadership
3. Operational Excellence
1. Customer Intimacy: Customers would be provided what they want, when they want it, all at a value. Wal-Mart strategy is from beginning customer friendly and they say,
“We do not sell articles to our customers, but instead, we buy articles for our customers”. Wal-Mart excels at operations and execution often by providing a reasonable quality at a very low price. The focus is on efficiency, streamlining operations, Supply Chain Management, no-frills, volume counts. The “10-Foot Attitude” was another customer service approaches Walton, owner and founder, encouraged. He asked associates to make a pledge, telling them, “I want you to promise that whenever you come within 10 feet of a customer, you will look him in the eye, greet him, and ask him if you can help him”. The “Buy American” program was a Wal-Mart retail strategy, which means average American can buy and use branded product from Wal-Mart.
2. Product leadership: Wal-Mart also maintains status quo with the other two disciplines by offering innovative (new to market products - walmart.com, now selling music on-line similar to itunes). Right now, one of their most talked about strategies has been their entrance into the online social space with Wal-Mart - The HUB (School Your Way). They want to become the next MySpace, but they seem to be a long way off Wal-Mart’s winning strategy in the U.S. was based on selling branded products at low cost. Wal-Mart is a one stop shop for average American families where they can get gas, a tune-up, new tires, groceries, apparel, electronics, pharmacy services, and basically everything they need for their daily lives. Wal-Mart enjoys a competitive advantage by offering those comprehensive products and services through everyday low prices.
3. Operational Excellence: For any firm employees are the most effective factor and backbone of any industry and there Wal-Mart shows its excellence which allows them to stay in competitive market for years together being the best. They explains, “Treating each other as we would hope to be treated acknowledging our total dependency on our associate – partners to sustain our success”. Employees are the basis for success of the company and drive the day-to-day operations. Wal-Mart’s employees, feeling like associate partners, gives them a feeling of empowerment and pride that drives the company’s culture. Every associate that had been with Wal-Mart for at least one year, and who worked at least 1,000 hours a year, was eligible for profit sharing of the company. Using a formula based on profit growth, Wal-Mart contributes a percentage of every eligible associate’s wages to his or her plan, which the associate can take when they leave the company, either in cash or in Wal-Mart stock. One of the significant costs for retailers was shoplifting, or pilferage. Wal-Mart addressed this issue by instituting a policy that shared 50 percent of the savings from decreases in a store’s pilferage among that store’s employees through store incentive plans. Wal-Mart also instituted several other policies and programs for its associates such as incentive bonuses, a discount stock purchase plan, promotion from within, pay rises based on performance not seniority, and an open-door policy.
Now it is a time to discuss how full service retailers can be a threat to discount retail service providers. In my eyes full service retailers can not be a threat to discount retailers because of following reasons:
1. First thing is the USP that drives the discount retail honchos far ahead of the full service retailers. Wal-Mart, Target, Kmart like discount honchos have their uniqueness in product service, product promotion, business strategy. It is true that many of the full service retailers are now becoming discount retailers in the time of recession to catch the average consumers’ eyes, but they are more prone to short time profitability rather looking for long term profitability. This is the area where discount retailers can easily beat the full service retailers.
2. Second thing is obvious the customer service, that is undoubtedly far better for the discount retailers than the full service retailers. Since the discount retailers are more looking forward to long term profitability, they are inventing lots of customer friendly services which can not be fetched by the full service retailers.
3. Discount honchos have already created a steady market for their own and they have unquestionably more wealth from the full service retailers and this in turn can beat the full service retailers, because these big fishes can withstand by getting less profit for sometimes but for the full service retailers it is a tough task, because it is necessary for them to compete with discount honchos to give quality product in low prices.
4. Discount retailers are now expanding their market through out the world and they are now going beyond to their own country border, which gives them wide range of market compare to full service retailers and there again they can take over the full service retailer and can hit them under the belt.
Wednesday, September 23, 2009
Ford India : Launches its small car in India, 2010
Stop lamenting Indians!!! US Auto major Ford is all set to join in the race with Hyundai i20 and the Suzuki Swift. US auto honcho Ford is the lone company which has not faced the heat of downturn. The mayhem of economic condition worldwide has made auto companies to think newer strategies to combat against the economic slowdown and turn around the business. Ford Motor Company is planning to integrate car designs globally and develop compact and mid-sized cars as part of a strategy to improve profitability and productivity. Ford is ready to implement ‘One Ford’ strategy across the markets. After the launch of Fiesta Sedan in the year 2005 in India by Bill Ford, Ford India has not had any new product launch. But unfortunately, in March 2010 Ford India will launch its small car code name B517. The car will be a four-door hatch back, powered by an indigenous diesel and petrol engine manufactured at its Chennai Plant. It is predicted that primary sales i.e. company to dealer sales will increase. Ford India is tuning in right direction to meet with the global demand of the customers. It keeps eye on the emerging markets of India & China to market its fuel-efficient small cars.
Saturday, September 19, 2009
Salesman: Crucial Character in Business
Sale is a part of marketing, but marketing is a broader concept. But sales is a tiny part of marketing; still sales is the most significant part of any business. There are lot of pundits who have spoken about various theories, various formulas of selling goods to the customer. I will pen down just few very simple things that I have learnt in my life as a salesman. From my point of view marketing and sales is nothing more than relationship. It is all about relationship between a salesman and his customer. When people buy a product they actually want to satisfy their needs. People buy a product to solve a problem and a good salesman is always aware of his customer’s problem. People buy from salespeople not because they understand their products but because they feel that the salesperson understands their problems. When a salesperson starts asking questions to a buyer it is nothing but he is trying to make rapport with the buyer and the stronger the rapport is, more the chances to be successful in selling, because most of the buying happens unplanned. It is the salesperson who actually makes buyers to think about their problems. A salesperson can always do that buy asking such types of questions which will be directed to the problems of the customers. But questioning about problem of the customers needs to be very much planned because one wrong question may ends up with the closing of sales without anything being sold. Spin selling model always says that a salesperson should understand the problem of the customers. This is similar to the 5th habit from “The Seven Habits of Highly Successful People” by Steven Covey which says, “seek first to understand then to be understood”. Developing rapport is not a conscious thing; the irony is that the best sales rapport is developed at the unconscious level. There are several models which are used to make a successful sale such as SPIN, SPANCO models, but above all the relationship between buyer and seller is the most significant criteria that play the pivotal role in selling goods. Selling is not complete once the deal is closed but it is the initiation of the credibility of a seller, now he has to keep his promise always to his customer to maintain his goodwill and also the attributes of the product, which he has sold to his customer. He should solve the problem of the customer then only a successful sale can be performed. It is very much necessary to keep the promise to the customer every time, because failing once can lead to the switching over a customer from his product or company to another. Therefore salesman is a crucial character in business. He can make a business profitable and in other hand can ruin the market share of the company.
Reva Electric Car Company: shines in Automotive Industry
Global warming! Depletion of Ozone layer! Threat to the human life! Oooppppsss!!!! are lots of buzzing words around the world. Eco-friendly fuels, eco friendly clothes etc are the scientists’ oblations to the world. Now to these oblations one more item is added by the Reva Electric Car Company- Eco-friendly car. Reva Electric Car Company, a Bangalore based company, has managed to make its prominent footprints on the global automotive industry. Eco-conscious car users in Europe are surely going to enjoy the new experience of driving. This car company has switched on to two brand new battery powered electric cars which are destined to specially cater Europe and also in India if the authorities see the light of the day. It is the time first for an Indian built and designed vehicle to debut at the prestigious Frankfurt Motor Show 2009. It is quite obvious that Bangalore based company is now all set to explore the automotive sector, but it is not equipped enough for a neck to neck fight with the big honchos like Nissan Leaf or a GM volt or the Tesla sports car. These bigwigs are big in their market share and financial status as well, but this Bangalore based car company will surely bite in their market share in near future. The two new battery charged car are the Reva NXR (a four seater predominantly for India and emerging markets) and the Reva NXG (swelte two seater sports car) for Europe. The Reva NXG two seater coupe will also be available in an open topped cabrio version. The own proprietary technology of this company is creating niche for itself and boosting up its existing Reva G-Wiz. The NXR has added features in its working technology with both lead-acid batteries as well as the more powerful yet lighter but more expensive lithium ion batteries. The company has given edge over other electric cars by its patented the REVive Technology. This technology offers drivers to send a SMS whenever the batteries run out of juice while driving on the road. From the moment the SMS is received, the Reva boffins communicate with the car, wirelessly free up energy stored in various pockets in the drive system and help the vehicle home for recharging. The REVive tech is mostly algorithms which liberate ions and get the battery to reboot enough to get the car home. Reva expects to launch the Reva NXR on the domestic and international markets by January 2010 while the Reva NXG is being tooled up for series manufacture from January 2011.
Tuesday, September 15, 2009
CARBON FOOTPRINT: A GLOBAL ALARMING
CARBON FOOTPRINT: A GLOBAL ALARMING
Globalization is inevitable as we reside in a “Global village”. As the globalization progresses, it is becoming a threat to the society and its human life as well as all the living creatures including the green life. As the effect of globalization several technologies are begetting to make ease of life but there is nothing to be hilarious in this technological progress because this supplies lots of carbon-di-oxide in the society which is an obvious threat to the living life. Thus Environment protection, Global warming and Climate change are most priority to everybody----nations’, companies’, individuals’. The word that is becoming a giant to these all effects is “Carbon Foot print”. Therefore reduction of carbon foot prints is prime concern to media, government and business world especially, when we perceive global environment in the context of post-Kyoto scenario.
“Carbon footprints” can be defined as the measure of the impact of the human activities leave on the environment, directly and indirectly or is accumulated over the life stages of a product, in terms of the amount of the green house gases produced, measured in units of carbon-di-oxide. In other words ‘carbon footprints’ is the total amount of carbon-di-oxide and other green house gases, emitted over the full life cycle of a service or a product. It is expressed as the grams of carbon-di-oxide equivalents. This established method has been standardized under ISO 14044.
Carbon is the essential component of all the fossils fuels ------oil, petrol, gases, coal; and as we have become already dependent on these fuels, every time we are using these fuels carbon-di-oxide, a green house gas, is evolving and concentrating the percentage of carbon-di-oxide into the atmosphere which results the global warming and climate change in a jiffy manner. It is already now 370 ppm from its early 280 ppm after the industrial revolution. If we do not hold the rein of this prolific increase of carbon-di-oxide then it will grab the whole earth in ere long. Already experts say that if we use these fuels in this manner without modulating its behavioral then the concentration of this green house gas will exceed 700 ppm by this century ending. According to experts it would lead to increase in temperature by 1.4 to 5.80, which in turn will cause the frequent change in climate and weather.
The carbon foot prints can be effectively reduced by applying the following steps:
1. Life Cycle Assessment (LCA) to accurately determine the current carbon footprint
2. Identification of hot-spots in terms of energy consumption and carbon-di-oxide emissions
3. Energy and resources conservation is the major way to reduce carbon footprints. Reduce, Reuse and Recycle can be the best process to minimize the carbon foot prints.
4. Identification of the solutions that neutralize the emitted carbon-di-oxide thus carbon-di-oxide eliminated by any production process can be minimized.
5. Educated employees and general public must cultivated the habit of eco-friendly nature in their own day to day life so by this way carbon footprints can be lessened.
6. Last but not the least step includes carbon offsetting; this can be achieved by using bio-fuels and tree planting, tree planting is the best way to reduce carbon-di-oxide from the atmosphere since tree absorbs carbon-di-oxide and reuse and recycle it to produce oxygen and thereby all we can minimize our carbon foot prints by doing a project “one man, one plant” to save our earth and our own life.
Globalization is inevitable as we reside in a “Global village”. As the globalization progresses, it is becoming a threat to the society and its human life as well as all the living creatures including the green life. As the effect of globalization several technologies are begetting to make ease of life but there is nothing to be hilarious in this technological progress because this supplies lots of carbon-di-oxide in the society which is an obvious threat to the living life. Thus Environment protection, Global warming and Climate change are most priority to everybody----nations’, companies’, individuals’. The word that is becoming a giant to these all effects is “Carbon Foot print”. Therefore reduction of carbon foot prints is prime concern to media, government and business world especially, when we perceive global environment in the context of post-Kyoto scenario.
“Carbon footprints” can be defined as the measure of the impact of the human activities leave on the environment, directly and indirectly or is accumulated over the life stages of a product, in terms of the amount of the green house gases produced, measured in units of carbon-di-oxide. In other words ‘carbon footprints’ is the total amount of carbon-di-oxide and other green house gases, emitted over the full life cycle of a service or a product. It is expressed as the grams of carbon-di-oxide equivalents. This established method has been standardized under ISO 14044.
Carbon is the essential component of all the fossils fuels ------oil, petrol, gases, coal; and as we have become already dependent on these fuels, every time we are using these fuels carbon-di-oxide, a green house gas, is evolving and concentrating the percentage of carbon-di-oxide into the atmosphere which results the global warming and climate change in a jiffy manner. It is already now 370 ppm from its early 280 ppm after the industrial revolution. If we do not hold the rein of this prolific increase of carbon-di-oxide then it will grab the whole earth in ere long. Already experts say that if we use these fuels in this manner without modulating its behavioral then the concentration of this green house gas will exceed 700 ppm by this century ending. According to experts it would lead to increase in temperature by 1.4 to 5.80, which in turn will cause the frequent change in climate and weather.
The carbon foot prints can be effectively reduced by applying the following steps:
1. Life Cycle Assessment (LCA) to accurately determine the current carbon footprint
2. Identification of hot-spots in terms of energy consumption and carbon-di-oxide emissions
3. Energy and resources conservation is the major way to reduce carbon footprints. Reduce, Reuse and Recycle can be the best process to minimize the carbon foot prints.
4. Identification of the solutions that neutralize the emitted carbon-di-oxide thus carbon-di-oxide eliminated by any production process can be minimized.
5. Educated employees and general public must cultivated the habit of eco-friendly nature in their own day to day life so by this way carbon footprints can be lessened.
6. Last but not the least step includes carbon offsetting; this can be achieved by using bio-fuels and tree planting, tree planting is the best way to reduce carbon-di-oxide from the atmosphere since tree absorbs carbon-di-oxide and reuse and recycle it to produce oxygen and thereby all we can minimize our carbon foot prints by doing a project “one man, one plant” to save our earth and our own life.
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