Strategy: Why Videocon wont “pakad life ka any signal”!

Glued to swanky Videocon ads aired on television these days? The advertisements depict various stories trying to connect emotionally with the viewers. Be it “naye kharche ka signal”, “naye job ka signal” or “naye dosti ka signal”, the company scores well when it comes to creativity. They have also managed to showoff India’s biggest brand Sachin Tendulkar every now and then. 100 cities in 100 days look aggressive from outside. But advertisement can only create awareness about a product; strategically the company seems to be lost out, before the battle really begun!

There are many reasons than one. First of all, “Pakdo Life Ka Har Signal" message given in the ads with the company’s reasoning that it underlines Videocon’s commitment to deliver an efficient service through a strong network. When you launch a new product, customer looks at the novelty. What is the value add if I switch from the existing one. And when it comes to changing service provider and number, the reason should be really out of the box. Videocon has emphasized on good signal or connectivity. But when you compare the level of competition, Videocon seems to be in a totally different space. Each service provider is focusing on value added services, promising customers better utilization of money. Good connectivity is not a ground to compete anymore. It is assumed that it has to be good.

Vodafone is trying to empower customer with its Power to you campaigns. DoCoMo is going for caller tunes and low calling charges. Aircel is focusing on connecting with social networking sites with its Pocket Internet add-on. Airtel is again promising on lower call rates and higher value added services. Videocon seems to be boarding the bus when everyone else seems to have taken the flight!

Industry is burgeoning with new entrants. The leaders, the likes of Airtel and RCom are facing problem retaining customer. The prices are falling, profits are hurting, and outlook seems to be bleak. Analysts are shrugging off telecom companies. 3G spectrum is only going to add to the worries of these companies by increasing the capital investments, not promising quick returns.

fOoD fOr ThOuGhT: Videocon doesn’t seem to be in the right industry at the right time. The strategy also isn’t promising. The brand value isn’t so high that people go gaga about the product. Hope somebody is listening and taking corrective steps before it is too late!

Brand TATA, biggest Indian brand in the world!

Tata, one of India’s biggest group of companies on an acquisition spree, has emerged as one of the largest global brands, according to a UK-based independent consultancy firm. Valued at $11.4 billion, Tata is ranked 57th among top 100 brands listed by Brand Finance, an independent company focused on the management and valuation of brands. Coca-Cola heads the list followed by fellow American companies Microsoft, Google, Wal-Mart, IBM and GE while UK’s HSBC is placed 7th.

Expressing his happiness, Tata Sons executive director R Gopalakrishnan said it was a first for an Indian brand to be listed among the world’s largest. “For the first time, an Indian brand has got into the list of the largest global brands, although it is number 57 and they have valued it at $11.4 billion,” said Mr Gopalakrishnan who is also a member of the Tata group corporate centre.

Tata has three biggest acquisitions in value, the Anglo-Dutch steel company Corus is the biggest. When completed and approved, Ford’s Jaguar and Land Rover will be second and the third will be Tata chemicals’ purchase of General Chemicals. The total amount of acquisitions done by Tata is probably around $25 billion in the last 4-5 years.

Hats off to you guys!

Sources: ET

Anil Ambani and his fancy!

A lot of huulla is going on in the market regarding the IPO of Reliance Power. The issue has raised brows right from the day, it was announced by younger Ambani. Even SEBI has to look into the matter.

Few facts:
1. Promoters contribution to Reliance Power is US$ 250 million for 100% stake. 50% would be held by Reliance Energy and 50% that is US$125 million is contributed by Anil Ambani. Of this, around 10% would be off loaded in IPO i.e. US$ 25 million for US$ 2.5bn. This would lead to world's biggest investment appreciation of 100 times in 5 months from date of inception of the company. This would be India's biggest IPO ever, beating DLF.

2. The issue is trading in grey market at Rs. 400-Rs.420 i.e it would get list at around Rs. 850-Rs. 870 levels.

3. No project has been completed till date.

Surprisingly, I have not come across any expert recommending to bet on the issue.

I am not sceptical about the issue or the abilities of younger ambani, but it would have been a lot better if he would have completed some projects and then floated the company. I am sure the issue would be a great success and the the management would rope several JVs and ties up or even acquire expertise for execution.
So, surely listing would be at 100% premium.

My call is buy as much as possible.

Reliance Power has called an analyst's meet today i.e., Friday, 4th January 2008.
Venue: The Crystal Room, Hotel Taj Mahal.
Time: 6.45 pm.
Service: Cocktail & Dinner.
Will update on the issue after the analyst's meet.

The Tatas

The center of attraction for January 2008 in automobile sector, surely, would be Tata Motors. The company is inching closer and closer to bag the two iconic brands, Jaguar and Land Rover.
Secondly, the most eagerly awaited One Lakh car would be displayed in Delhi Auto Expo on 10th January. The car is believed to be Chairman of Tata Group, Mr. Ratan Tata's dream project.

Last year, Tata group was again in news, when Tata Steel announced to acquire Corus Steel. Though it all started with a friendly bid, went on to finish with a hostile takeover.

Surely, Tatas have drawn a road map for each of its companies to go global, and things are unfolding slowly but steadly.