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So, my mother forwards an email comparing water to Coke. And Adsense does this!!!

The strongest evidence that IBM’s big bet is paying off came a few weeks ago when it announced its second-quarter results. Revenues were up a strong 9%, to $23.8 billion. Every division reported healthy growth, including the long-troubled IT services group, where revenues rose 10%. But confirmation that the strategy is succeeding trickles in almost every day with announcements of major IT services contract wins in India or Russia. No wonder IBM’s stock, trading at about $112, has risen by 50% over the past year—even after pulling back some in the market’s summer swoon.

For IBM, aggressive globalization works. In fact, over the next few years, its approach could emerge as a model for other companies trying to capitalize on the globalizing trend without being hobbled by it.

Leading by Example

The model is simple. Under the old multinational rubric, IBM created miniature versions of itself in each country or region where it operated. That turned out to be a cumbersome and expensive way of doing business. So IBM now sets up shop wherever it can find the right talent at the right price. It has a global supply chain based in China, a global IT service delivery system based in India, and a global financing back office in Brazil. The company has set up new management systems to coordinate these activities.

These changes haven’t come easily. IBM seems to be in a constant state of upheaval: More than 20,000 jobs have been eliminated in the U.S., Western Europe, and Japan even as the work force has grown beyond 50,000 employees in India and 10,000 in China. “This is a huge shift for IBM, but I believe it’s necessary if we are to capture the benefits and step up to the challenges of a globally integrated economy,” Chief Executive Samuel Palmisano said at an IBM-sponsored Forum on Global Leadership on July 25 in Washington, D.C.

If IBM’s strategy continues to pay off, it could become a model for other large corporations to follow. Just as IBM found that it couldn’t compete well against super-efficient, low-cost IT outfits in India, other industrial giants are at a disadvantage against upstarts from the U.S. and elsewhere that are tuned for the new global realities. They’re being forced to make wrenching changes, as well. “For the past 20 years, people have been talking about what the company of the future should be. IBM is actualizing those ideas,” says Rosabeth Moss Kanter, a professor at Harvard Business School.

Shifting Workflow and Revenue

While shifting work overseas to lower-cost locations has helped make IBM’s huge tech services business more competitive, there’s a lot more to the strategy than labor arbitrage. IBM also has improved its effectiveness by redesigning business processes, automating work with software, and bringing all of its increasingly global capabilities to bear on behalf of clients. The company uses the same processes in India that it does in France. That makes it possible to shift work to wherever employees with the right skills are available. As a result, at any given time, fewer people are sitting on the bench waiting for a job to be assigned to them.

And by hiring tens of thousands of people in developing nations, IBM gains more than the benefit of low-cost labor. It’s also helping to build strong economies that are now becoming sizable markets for its goods and services. Revenues from the so-called BRIC countries—Brazil, Russia, India, and China—now represent about 5% of IBM’s total sales and are growing at 25% per quarter. Strategic outsourcing contracts from Indian companies grew nearly 150% last quarter. “These are the markets that will hypergrow over the next few years, and IBM will grow even faster there,” says Michael Cannon-Brookes, vice-president for strategy in emerging markets.

IBM still faces fierce opposition in IT services from both India and Accenture. There’s plenty of competition in its software and computer hardware businesses as well. But, thanks to its globalization strategy, it’s no longer the slow-moving, inefficient, and overpriced giant that it was just a few years ago. Globalization is here to stay, and so, apparently, is IBM.

source: http://www.businessweek.com/technology/content/aug2007/tc20070810_700113.htm?campaign_id=rss_daily

Revolves around two things.
1. Cricket.
2. Bollywood.

Yesterday a sentencing locked away an actor for 6 years. All news channels stopped other news- like the DJ take over, Iraq, CR’s visit to the middle east everything to run constant updates. A court has pronounced someone guilty – that usually means he/ she is. Unless proven otherwise. Now, after 14 years the sentence is passed and it becomes” tearful” – the country is up in arms about this- the verdict is too harsh – well, why arnt they thinking about the 245 families who lost their loved ones because someone wanted to look macho with AKs and Dessert Eagles?

Anyways – the news is only talking about this. Where are we going ?

Audi’s latest results have put analysts in a tizzy. They are expecting that if the current trend of Audi’s sales continues – it will overtake BMW in operating profits by 2010 and by 2012 it will overtake the operating revenues. Analysts expect the rate of growth of Audi to be at 10% per annum for the next three years about 3 times that of BMW. All these are fueled by the new models launched by Audi.

The sights trained on Audi after the 1998 launch of the Audi TT, never did the industry expect a car subsidiary to catch up with main manufacturers. Audi is successfully wielding the same growth strategy premium-market leader BMW deployed in 2000 to outsell Mercedes. Audi, Germany‘s No. 3 premium automaker, is on a tear to expand its lineup of high-performance cars such as the posh Q7 SUV and the A5 coupe, and it’s employing head-turning design to steal customers from the competition.

The numbers tell the story. In the first half of 2007, Audi’s worldwide car sales rose 9.8%, to 509,079, as revenues rose 12.4%, to $24 billion. Global sales at BMW were up 4.5%, to 730,285, by comparison, while Mercedes’ fell 3%, to 591,200. First-half revenues at Audi rose 12.4%, to $24 billion. Mercedes edged up 1%, to $34 billion. BMW releases first-half financial results on Aug. 1.

With the growing brand awarness – older models, that usally have a lifespan of 3- 4 years usually decline – however, the Audi A4- a Six year old Audi starts at $28000.

Audi managed to sell 162,900 A4 sedans in the first half of this year, up 1.5% over the same period a year ago. And now it is planning to unveil a new-generation A4 in September, which should give it yet more room to run.

In the first half, Audi’s U.S. sales rose 13%. Until recently Audi sold its cars in the U.S. through Volkswagen dealerships, which muddled its image by association with a mass-market brand. In markets such as Miami, Los Angeles, and New York, upscale glass-and-steel dealerships have opened, helping to lure buyers with higher incomes. The edgy, minimalist design of the new dealerships exudes upmarket ambience.

However….
Audi is not just selling more cars, it’s making more money on those cars. First-half earnings zoomed ahead as more expensive models and an increasingly tony brand image reaped higher margins per car. In the first half, operating profit increased 39.5%, to $1.38 billion, and net profit rose 67%, to $937 million. That puts Audi’s 6.4% operating margins on a par with Mercedes’ long-term returns and very close to BMW margins. Audi’s management vowed two years ago to be the world’s most successful premium car manufacturer by 2015.

Another travel site launched in beta, they need advertising revenue – so they place ads. What are these ads? For other websites offering better fares! 🙂 what is the world coming to!

Toyota’s fast pacing growth towards the number 1 automobile manufacturer with just two car brands (toyota and Lexus) under its belt, as opposed to the several touted by other manufacturers.
maybe this is the reason why:

Fujio Cho has only been in the top job at Toyota for a year, and he is only the second chairman not to be a member of the founding family.

But he’s been with the Japanese automotive giant since 1960. He is now 70, not particularly old by the standards of Japanese bosses.

Mr Cho got a law degree from the elite Tokyo University, and then joined Toyota as an apprentice.

He learnt the secrets of Toyota’s revolutionary Lean Manufacturing System from the man who invented it, Taiichi Ohno, an unarguable genius.

In the six years from 1988, Mr Cho was the head of Toyota’s United States operation in Kentucky at a time of relentless and brave expansion, a long way from home.

He must have picked up a lot of English, but he prefers to speak Japanese when answering reporters’ questions.

I suppose it gives him time to think, and thinking is what he does, leaving quite long gaps between a question and its tentative answer.

Mr Cho does not wish to appear to have all the answers. His is extraordinary modesty, and so is his company, considering what they have just done.

Strong sales

Some time around the first quarter of this year, Toyota outpaced General Motors as the largest car-seller in the USA. It is likely that will continue for the rest of 2007.

This is probably one of the most significant business happenings of the past century.

Toyota is trying to behave like an American company in the US

Answering my question about being number one during a visit to the St Gallen Symposium in Switzerland recently, the self effacing Mr Cho does not sound like a chairman of Toyota.

He ducks it.

“I think it is too early to talk about who is number one or not,” he says.

“And we do not really consider ourselves number one, anyway. But yes, we’ve been doing very well in sales in the past six or seven years in particular.”

American company

Fujio Cho thinks it is the fact that Toyota now manufactures for local tastes that has made the difference. It is what he pioneered in the USA.

Our way of thinking is very difficult to copy or even to understand Fujio Cho Chairman, Toyota

Talk to the people who have run the big three US car companies into almost bankruptcy and they seem to have little understanding of the sheer wholeness of the Toyota system; and part of that completeness is Toyota’s refusal to take a victory role after decades of having GM as its global target.

Toyota recognises the dangers of being number one and luxuriating in the glory. Besides, Toyota has political problems to face if it comes out too strongly as the giant killer in the US.

The export of US jobs from rustbelt industries is already a big issue, and Toyota’s (defensive) US stance is to become as American as it possibly can, hence Mr Cho’s pride in local manufacture and local employment.

Living the success

But there’s another wonder about Toyota I wanted to know about.

Toyota makes cars like nobody else

There’s nothing secret about the Toyota Lean Manufacturing System. Anyone from a US rival can walk along the elevated runway in Toyota City, above the production lines, and see how Just In Time, a Different Model Every Time, Lean Manufacturing works.

And yet, few others seem really to understand what’s happening down below them on the factory floor, let alone take the lessons back to beleaguered car industries elsewhere in the world.

Why?

Mr Cho thinks long about this, and then answers at length.

“There are many factors, so I have to think a bit,” he says.

“First, the philosophy needs to be fully grasped by top management. Groups of companies involved in car making have to become one, to move together.

“Avoiding overproduction has to be built into the system, a difficult task. And each problem will have to be made visible, and then tackled by every one of the workers.

“These are all things that companies do not normally do. It’s difficult to live the Toyota way of production.”

Global benefits?

Just introducing methods and ideas on their own are not going to bring about success, he insists.

“Visiting our factory, you will see that on one line we have eight different types of cars, not just variations. This is done to help our suppliers use up production every day.

“Our way of thinking is very difficult to copy or even to understand. It is even difficult for top managers to understand that this is worthwhile. And doing it this way causes inconvenience all over the place.

“At the start, the line keeps stopping, for example. Even when you see it, it is difficult to understand.”

A last, cheeky question: would the company now echo the old GM motto and proclaim :”What’s good for Toyota is good for the world?”

Mr Cho grins. “We wouldn’t dare to think that,” he replies.

With the advent of new news channel, the dearth of quality reporting has made a mark. The other day i was reading a “report” by someone from a “leading daily” in a very large metro – this is how the “reporting goes”

“The accident occurred a mere 16 days after another teenaged driver put two food vendors in hospital just metres away from Monday’s accident site at Khar Danda. Nearby Carter Road has been the site of several accidents in the recent past. Recently, the traffic department said the owner of the car would be arrested if an under-age person was found driving it.

Salim Khan (name changed), a resident of Uttar Pradesh, had been staying for the last few days at his maternal uncle Miraj Khan’s (45) home at Khar Danda.

Salim, anxious to try out Miraj’s grey Maruti Zen, stole the keys and set off on a drive. Only, a nervous Salim (14) hit the accelerator hard as soon as he turned on the ignition, slamming the car into a stall and two houses. Fisherwoman Parvati Saroj (50) suffered severe head injuries.

A terrified Salim jumped out of the car and tried to flee, but he was nabbed by the locals and taken to his uncle’s residence nearby. As Miraj ran to the spot to take Saroj to hospital, locals told Salim’s aunt what had happened.

Taking advantage of a diversion, Salim fled and is yet to be traced.

The teenager’s relatives said the the car was bought only eight days earlier and that Salim

had never driven an automobile before. “It seemed as if he did not know about the brakes,” said Mohammed Ayub, a witness to the crash. Ayub, who was repairing his scooter at the spot, suffered minor injuries after the car brushed his right leg.

The car itself was mangled. “It was so terrible that parts of the car flew into the houses nearby,” Ayub said. “

Given the quality of the article, one wonders on what grounds do editors ask journos to write. This is more like a high school essay submission “a nervous salim,… “ gwad.

Competing closely with bullshit reporting is the television media. You really must give it to them because they need to churn out the same shit, so many times a day, that they should ensure that they don’t get bored of reporting / repeting it. So what do they do? Sensationalize!

The above article was there in a leading news website – Terror in Jammu and KAshmir school curriculum.
Wow! so now with the world already talking that madarsas are teaching all kids terrorist tacticts, an article like this echos just that, but is that the article? no! the article is that they have started introducing methods for kids to cope with terrorism, but talking about it. The initiative itself is brilliant, but the way the headline is given makes you believe that they are teaching something else. Is there NO one to check this kind of “hype” reporting?

Todays article was titled ” World Prays:Atlantis stuck in space” You thinking ‘OMG” hope we dont have another problem, but then it goes on to talk that there is cloudy weather, hence they cannot land. So as much as it is a temporary phenomenon, you really need to churn out shit to keep readers on one’s site!

God save this industry!

It is an article of faith on the left that the gap between rich and poor has now widened to a dangerous chasm, as global capitalism has enriched rich countries and impoverished poor ones.

But its not quite like that.

It is true that Burundi and other countries in sub-Saharian Africa remain desperately poor, while living standards in the West have risen dramatically, so the gap between the two extremes has widened.

But there is a big group of previously poor countries whose average citizens are now much better off as a result of globalization.

China, India, Indonesia, Chile, South Korea, Chile, Brazil have all moved up, and they are highly populous countries.

Inequality is only unambiguously worse if you ignore the countries where the bulk of the world’s population live.

A new Gilded Age?

It’s within countries rather than between them that inequality has grown starker.

Shopping mall Garuda, Bangalore, India
Affluence has come to urban areas in developing countries
In China and India, those left on the land remain dirt-poor, but those who’ve been sucked into the global market have seen their incomes rise substantially.

In the United States, too, the gap between the super-rich and even the middle class has widened.

There is now talk of a new Gilded Age in America, reminiscent of the previous ones in the 1920s and at the end of the 19th century when millionaires bought mansions by the ocean from the mountains of money the had made on railroads or steel or oil, while the poor looked on from outside.

Rising inequality

According to Princeton economist Paul Krugman, the incomes of the middle class and poor in America have barely risen in a quarter of a century,but those at the top have gone up by about 150%.

“It really is a new Gilded Age. If you look at the distribution of income, at least pre-tax, it is the same as it was in the 1920s, and the 1920s looked the same as pre- World War One – so we are in a new gilded age of inequality,” he says.

In Britain, the country’s thousand richest people now have wealth of about $300bn (£150bn), three times the figure of ten years ago.

That’s partly because London has attracted some of the world’s super-rich. from the Russian oligarchs to steel magnate Lakshmi Mittal, but also because bonuses in the City of London have gone through the roof.

Trade union for the rich?

Finance people all over the world have found a way of securing more money that any trade unionist of old would recognize: play one employer off against another in a very competitive market.

Finance professionals around the world are getting rich. Professor Stephany Griffith-Jones of the Institute of Development Studies at Sussex University says the habit isn’t confined to Wall Street and London’s Square Mile:

“We can see it in the City of London but also in very poor developing countries. They have this curious habit of saying that ‘we have to be paid very well because our peers in other countries are being paid well and we will leave if you don’t pay us ridiculous salaries and bonuses’ that pushes up their levels of income,” she says.

$400m yachts

The signs of inequality are now large – literally so on the jetties of Antibes or Florida.

Where it used to be the “haves and the have-nots”, now it’s the “haves and the have- yachts”.

Twenty-five years ago, a top of the range vessel would have cost about $8m (£4m).

Today, it would be $400m, according to Jonathan Beckett, the chief executive of the Nigel Burgess company which sells the grandest vessels to the super rich.

So what do you get for your $400m?

“Nothing is impossible”, he said.

“You would have a yacht with two or three helicopter landing facilities. You would have discotheques and cinemas. You would probably have a submarine with opening doors in the bottom of the boat., so you get into the submarine and you get into the hatch and then flood the compartment and you slip away quietly”.

Politics of envy

Of course, it’s easy to sneer and play the politics of envy, perhaps easier in Britain than in America where affluence is more often seen as a reward for success.

Can you begrudge Sir Martin Sorrell his salary of about $5m a year when he built an advertising company operating in 106 countries out of a shoe-string operation in a damp garage?

Or should George Soros really hand back his billions from his hedge funds when he made them from nothing after surviving the Nazis and the Soviets?

He says there is a duty on the rich but you can’t expect them to sort out inequality:

“I do think there is something slightly obscene in the degree of inequality that prevails in the world and to that extent I feel an obligation, but to expect inequality to be taken care of by philanthropists is barking up the wrong tree because some philanthropists feel it and others are not philanthropic. So it really needs social regulation.” he says.

In other words, it’s for governments elected by the people to determine rates of taxation on the rich and social provision for the poor.

And any sensible policy would recognise that success does merit reward. The question is: how much?

Is equality good for you?

So are there any real, objective consequences to inequality apart from firing up cheap resentment?

Poverty has risen in the US along with affluence
It does seem true that more equal countries tend to have healthier populations than unequal countries of the same over-all economic standards.

Perhaps the crucial question is whether unequal countries grow faster.

If they do, might a bigger cake, with unevenly divided slices, be better for the poor than a tiny cake cut into equal but tiny pieces?

After all, the most conspicuously successful economy of our times is that of the relatively unequal United States.

The academic evidence isn’t clear-cut, and it may vary between countries.

Inequality in desperately poor countries might stifle growth, but promote it in richer ones.

Generally, though it seems true that some inequality in a country accompanies high growth, but too much may destroy social cohesion.

The two previous Gilded Ages ended with a bump – the Panic of 1893 and the Crash of 1929.

How will the third one end?

While reading an article the other day, a couple of “hot links” came onot the page. This is a feature of the browser, and now it is integrated into the website, as in, the some keywords would launch as individual search windows.
So, while reading up on some intense technological funda, I get the following “hot links”

I do find the image quite amusing. The article is talking about NBFC’s (Non-Banking Financial Companies) and Stock brokers, and the advert says “Sri Sri Ravi shankar Wants to know” 🙂 yup, how to make more money in stocks than in religion, however, sometimes, religion does PAy!!! 😀