How to Use BCG Matrix

The BCG matrix can be useful to companies if applied using the following general steps.

Step 1 – Choose the Unit. Strategic Business Units, individual brands, product lines or the firm as a whole are all areas that can be analyzed using the BCG matrix. The chosen unit drives the entire analysis and key definitions. The market, industry, competitors and position will all be based on the chosen unit.

Step 2 – Define the Market. Following the choice of the unit or area to be analyzed, the most important stage for the rest of the matrix is the definition of the market. An incorrectly defined market will lead to an incorrect classification of the unit. A Mercedes-Benz analyzed in a passenger vehicle market will be a dog with a small market share. However, analyzed within a luxury car market, it will be a cash cow.

Step 3 – Calculate Relative Market Share. At this stage, the relative market share for the chosen unit needs to be calculated. This can be done in terms or revenues or marker share. The formula used here us a division of the selected brand’s market share or revenues by the market share or revenues of the biggest competitor in the industry. The result in plotted on the x-axis.

Step 4 – Calculate Market Growth Rate. Online industry reports can be used to find the rate of growth for the industry. If this is not possible, then it can be estimated by looking at the average revenue growth of the leading firms in the industry. This measurement is a percentage and is plotted on the y-axis.

Step 5 – Draw Circles on the Matrix. Once all the measures are calculated, they can be put onto the matrix. This can be done by drawing a circle for each brand within a unit, or all the brands in a company. The size of each circle should correspond to business revenue generated by the brand.

EXAMPLES

Nestle

According to an analysis posted here, the BCG matrix analysis for Nestle reveals some interesting perspectives. A global multinational in the food and beverage industry, the Swiss company is the 69th highest revenue producer in the world. Over 8000 brands fall within its umbrella and are as widespread as bottled water and pet food. The company announced plans to sell off under-performing brands which were consistently showing poor sales. This analysis used the 2002 annual report for its figures which can be found here.

• Question Marks – Here, the question marks have a low market share within a high growth market. The product mentioned here requires an influx of investment to capitalize on potential segments. This investment is however, not likely to yield too much return investment.
• Stars – These brands have a high share in a high growth market. Nestle’s varied mineral water is in this quadrant. The brands in this are require investment to maintain their position and differentiation in both mature and emerging markets.
• Dogs – The Nestle products in this category have a lower market share in a low growth market. An example of this is a lean cuisine unit and weight loss management brands which did not take off outside the US. A sports performance and nutrition brand called PowerBar is also confirmed to be divested by the company most likely due to poor sales in a saturated market. These products generate enough revenue to sustain themselves but are not exciting not major sources of revenues.
• Cash Cows – These brands are important because of their cash generating potential. This means that they have a higher market share in a slow-growth industry. Very little investment is needed by these brands and funds generated from them are used to fuel Stars or Question Marks.






Source:https://www.cleverism.com/how-to-apply-bcg-matrix-to-your-company/

BCG Growth-Share Matrix

Definition

BCG matrix

 

(or growth-share matrix) is a corporate planning tool, which is used to portray firm’s brand portfolio or SBUs on a quadrant along relative market share axis (horizontal axis) and speed of market growth (vertical axis) axis.

Growth-share matrix

 

is a business tool, which uses relative market share and industry growth rate factors to evaluate the potential of business brand portfolio and suggest further investment strategies.

Understanding the tool

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential. It classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share). These two dimensions reveal likely profitability of the business portfolio in terms of cash needed to support that unit and cash generated by it. The general purpose of the analysis is to help understand, which brands the firm should invest in and which ones should be divested.

Relative market share. One of the dimensions used to evaluate business portfolio is relative market share. Higher corporate’s market share results in higher cash returns. This is because a firm that produces more, benefits from higher economies of scale and experience curve, which results in higher profits. Nonetheless, it is worth to note that some firms may experience the same benefits with lower production outputs and lower market share.

Market growth rate. High market growth rate means higher earnings and sometimes profits but it also consumes lots of cash, which is used as investment to stimulate further growth. Therefore, business units that operate in rapid growth industries are cash users and are worth investing in only when they are expected to grow or maintain market share in the future.

There are four quadrants into which firms brands are classified:

Dogs. Dogs hold low market share compared to competitors and operate in a slowly growing market. In general, they are not worth investing in because they generate low or negative cash returns. But this is not always the truth. Some dogs may be profitable for long period of time, they may provide synergies for other brands or SBUs or simple act as a defense to counter competitors moves. Therefore, it is always important to perform deeper analysis of each brand or SBU to make sure they are not worth investing in or have to be divested.
Strategic choices: Retrenchment, divestiture, liquidation

Cash cows. Cash cows are the most profitable brands and should be “milked” to provide as much cash as possible. The cash gained from “cows” should be invested into stars to support their further growth. According to growth-share matrix, corporates should not invest into cash cows to induce growth but only to support them so they can maintain their current market share. Again, this is not always the truth. Cash cows are usually large corporations or SBUs that are capable of innovating new products or processes, which may become new stars. If there would be no support for cash cows, they would not be capable of such innovations.
Strategic choices: Product development, diversification, divestiture, retrenchment

Stars. Stars operate in high growth industries and maintain high market share. Stars are both cash generators and cash users. They are the primary units in which the company should invest its money, because stars are expected to become cash cows and generate positive cash flows. Yet, not all stars become cash flows. This is especially true in rapidly changing industries, where new innovative products can soon be out competed by new technological advancements, so a star instead of becoming a cash cow, becomes a dog.
Strategic choices: Vertical integration, horizontal integration, market penetration, market development, product development.

Question marks. Question marks are the brands that require much closer consideration. They hold low market share in fast growing markets consuming large amount of cash and incurring losses. It has potential to gain market share and become a star, which would later become cash cow. Question marks do not always succeed and even after large amount of investments they struggle to gain market share and eventually become dogs. Therefore, they require very close consideration to decide if they are worth investing in or not.

Strategic choices: Market penetration, market development, product development, divestiture

Advantages and disadvantages

Benefits of the matrix:

• Easy to perform;
• Helps to understand the strategic positions of business portfolio;
• It’s a good starting point for further more thorough analysis.

Growth-share analysis has been heavily criticized for its oversimplification and lack of useful application. Following are the main limitations of the analysis:

• Business can only be classified to four quadrants. It can be confusing to classify an SBU that falls right in the middle.
• It does not define what ‘market’ is. Businesses can be classified as cash cows, while they are actually dogs, or vice versa.
• Does not include other external factors that may change the situation completely.
• Market share and industry growth are not the only factors of profitability. Besides, high market share does not necessarily mean high profits.
• It denies that synergies between different units exist. Dogs can be as important as cash cows to businesses if it helps to achieve competitive advantage for the rest of the company.

Using the tool

Although BCG analysis has lost its importance due to many limitations, it can still be a useful tool if performed by following these steps:

• Step 1. Choose the unit
• Step 2. Define the market
• Step 3. Calculate relative market share
• Step 4. Find out market growth rate
• Step 5. Draw the circles on a matrix

Step 1. Choose the unit. BCG matrix can be used to analyze SBUs, separate brands, products or a firm as a unit itself. Which unit will be chosen will have an impact on the whole analysis. Therefore, it is essential to define the unit for which you’ll do the analysis.

Step 2. Define the market. Defining the market is one of the most important things to do in this analysis. This is because incorrectly defined market may lead to poor classification. For example, if we would do the analysis for the Daimler’s Mercedes-Benz car brand in the passenger vehicle market it would end up as a dog (it holds less than 20% relative market share), but it would be a cash cow in the luxury car market. It is important to clearly define the market to better understand firm’s portfolio position.

Step 3. Calculate relative market share. Relative market share can be calculated in terms of revenues or market share. It is calculated by dividing your own brand’s market share (revenues) by the market share (or revenues) of your largest competitor in that industry. For example, if your competitor’s market share in refrigerator’s industry was 25% and your firm’s brand market share was 10% in the same year, your relative market share would be only 0.4. Relative market share is given on x-axis. It’s top left corner is set at 1, midpoint at 0.5 and top right corner at 0 (see the example below for this).

Step 4. Find out market growth rate. The industry growth rate can be found in industry reports, which are usually available online for free. It can also be calculated by looking at average revenue growth of the leading industry firms. Market growth rate is measured in percentage terms. The midpoint of the y-axis is usually set at 10% growth rate, but this can vary. Some industries grow for years but at average rate of 1 or 2% per year. Therefore, when doing the analysis you should find out what growth rate is seen as significant (midpoint) to separate cash cows from stars and question marks from dogs.

Step 5. Draw the circles on a matrix. After calculating all the measures, you should be able to plot your brands on the matrix. You should do this by drawing a circle for each brand. The size of the circle should correspond to the proportion of business revenue generated by that brand.

Examples

Corporate ‘A’ BCG matrix

Brand	Revenues	% of corporate revenues	Largest rival’s market share	Your brand’s market share	Relative market share	Market growth rate
Brand 1	$500,000	54%	25%	25%	1	3%
Brand 2	$350,000	38%	30%	5%	0.17	12%
Brand 3	$50,000	6%	45%	30%	0.67	13%
Brand 4	$20,000	2%	10%	1%	0.1	15%

This example was created to show how to deal with a relative market share higher than 100% and with negative market growth.

Corporate ‘B’ BCG matrix

Brand	Revenues	% of corporate revenues	Largest rival’s market share	Your brand’s market share	Relative market share	Market growth rate
Brand 1	$500,000	55%	15%	60%	1	3%
Brand 2	$350,000	31%	30%	5%	0.17	-15%
Brand 3	$50,000	10%	45%	30%	0.67	-4%
Brand 4	$20,000	4%	10%	1%	0.1	8%

Sources

1. Wikipedia (2013). Growth-share matrix. Available at: http://en.wikipedia.org/wiki/Growth-share_matrix
2. Costa, C. (2012). Evaluating Product Lines Using the BCG Matrix (VIDEO). Available at: http://www.youtube.com/watch?v=Uuuxs9gO8C0
3. https://www.strategicmanagementinsight.com/tools/bcg-matrix-growth-share.html

Meet 40 Young Business Leaders Selected by BW Businessworld for Its 2nd Edition of 40 Under 40 Awards and Summit

All the selected Young Business Leaders below the age 40, have demonstrated exceptional contribution in their work and personal growth.

Businessworld has announced the final 40 winners of the 2nd Edition of 40 Under 40 Awards and Summit on September 27, 2018 at The Leela Ambience, Gurugram. All the selected Young Business Leaders below the age 40, have demonstrated exceptional contribution in their work and personal growth. They have built new businesses or are making a difference in the success of their companies. They are benefitting and influencing a large section of businesses, communities (in which they live), and the overall economy with their disruptive innovation in this world. 

The selected winners were facilitated by Mr. Ramanan Ramanathan, Mission Director, Atal Innovation Mission : Government of India; Mr. T.V. Mohandas Pai, Chairman, Manipal Global Education; Dr. Annurag Batra, Chairman & Editor-in-Chief, BW Businessworld; Mr. Suman K Jha, Chief Editor, BW Businessworld; and Mr. Vinesh Menon, CEO—Education and Skilling, VIBGYOR Group of Schools.

Below is the brief description about each of the winners:

Aakash Chaudhry is the Co-Promoter and CEO at Aakash Educational Services Ltd (AESL). The company is synonymous to being a leader in the test prep industry catering to the Education Sector. With an onboard employee strength of 4300+, it has created a landmark in Coaching industry.

Abhijeet Kumar is the co-founder of ah! Ventures, a Mumbai-based early stage fund raising platform with 55,000-plus entrepreneurs, 2,000 plus investors, Rs 130-plus crore invested in 35 startups and three profitable exits.

Abhishek Bansal is the co-founder and CEO of Shadowfax, a three-year old venture, already India’s market leader in the Online-2-Offline (O2O) logistics segment. Abhishek aims to make Shadowfax the largest last mile logistics provider in the country, not too far in the future.

Amit Wadhwani is founder of Sai Estates Consultants Chembur Pvt Ltd (SCCPL), a shining name on real estate’s sky. They hope to float public issue, grow to a 500-member team and have an office each in 30 countries.

As a sustainable livelihood lead Amruta Bahulekar is a prime pillar in the ‘Pune City Connect’. She is head of a program which is Lighthouse project. It is a collaborative initiative of Pune City Connect and Pune Municipal Corporation for skills development and sustainable livelihood.

Ananya Birla is the founder at Svatantra Microfin that was conceived out of a desire to help the unbanked, is the fastest growing mid size MFI today. She has always believed in giving back to people but in a sustainable way and micro-finance was perfect for it.

Anirudh Pandita is founder at Pocket Aces, one of India's fastest growing digital entertainment companies. The company is actively leveraging data and technology to create and distribute engaging content for the mobile-first consumer. 

Arjun Zacharia is the founder of Wooplr, India’s first and largest Social Commerce Company which has about 100 employees with offices in Bangalore, India and Hangzhou, China. 

Azhar Iqubal is Co-founder and CEO at Inshorts that aims to become a global content unicorn out of India with a billion users in the next 5 years.

Chiranjiv Patel, MD of PC Snehal Group of companies which is well established in government infrastructure sector by rising big structures like sports complexes, hospitals, flyovers, underpasses, water distribution networks, drainage systems and power projects.

Dheeraj Jain is an Investor turned Entrepreneur. He initiated Redcliffe Capital which is a venture capital and special situation investment firm, with investments in more than 45 early-stage companies who directly employ more than 5000 talent. He expanded Redcliffe across consumer brands, B2B, Big data, healthcare, urban commute, F&B, Travel. 

Dhruv Lakra is the Founder & CEO at Mirakle Couriers, a for-profit enterprise with especially abled employees! It was founded in 2009 with an idea to support a social cause.

Divya Jain is a social entrepreneur who has worked to disrupt the supply chain & logistics industry through innovative and nationwide skill development programs. She is the Founder & CEO of Safeducate, India’s largest supply chain skilling company.

Harsh Shah is the Co-Founder of ‘Fynd’ an emerging name in Fashion trend setters over retails. ‘Affinity for fashion and high quality merchandise’ and this is what makes fynd, the online shopping experience different from other similar sites. 

Jatin Ahuja is the Founder of Big Boys Toyz (BBT) who dared to start a specialty site that deals in pre-owned super luxury automobiles in India. 

Karan Kumar Gupta is the Co-founder/Managing Director of Zirca Digital, a company that provides cutting-edge digital advertising and branded content solutions to several brands. Gupta also manages Aidem Ventures, a broadcast advertising solutions company and Inez Terra, a real-estate development company based in Mumbai and Pune.

Karan Mohla is Partner at IDG Ventures India as well as the Head of Consumer Technology & Media. He is now responsible for getting investors and partners for the fund as the Lead or fundraising from Asia, as well as the Lead for developing relationships for the fund and portfolio companies. 

Kranti Gada is the COO at Shemaroo which is disrupting the dynamics of the entertainment industry every day. More than 700 media and entertainment professionals are involved with Shemaroo’s vast media empire. 

Krishna Kumar is founder & CEO at Cropin Technology, a funded startup that has made phenomenal contributions in cutting-edge technologies such as Big Data analytics, Artificial Intelligence, Geo-tagging and Satellite monitoring to interconnect all the stakeholders at different levels of the agriculture ecosystem. 

Kumar Abhishek, in 2013, conceptualized the idea of ToneTag, a unique concept that harnesses the power of sound to enable payments and proximity customer engagement, eliminating any hardware dependency. Kumar aspired to bridge the last mile in financial inclusion, thereby delivering a payment experience that envelopes the critical masses irrespective of geography, internet connectivity and hardware dependency. 

Manu Kumar Jain, a leading Indian entrepreneur who co-founded Jabong.com, a fashion and lifestyle e-commerce portal in India and served as its Managing Director from February 2012 to January 2014. Currently, he is the Global Vice President of Xiaomi as well as the Managing Director of Xiaomi India.

Nagendra Nagaraja, CEO and Founder at AlphaICs, actualised his dream by inventing an agent-based Real AI Processor (RAP), which is creating disruptions in AI applications. In other words, its product lines are used in Drones, Robots, Autonomous Vehicles, UAV, IOT Analytics, Cloud Computing and even supercomputers.

Neeraj Biyani is the co-founder & COO at Paper Boat, India’s fastest growing consumer brand. The company currently employs over 530 people distributes their products in over 50,000 outlets and exports to over 10 countries. 

Nibhrant Shah is the founder and CEO of Isprava which represents the luxury real estate sector and has over 120 employees working within it.

Nitin Pandey, Founder and CEO of Parentune, a pro-parent community and a technology startup in the space of Babytech & Parenting. 

Nitin Saluja, Founder and CEO of Chaayos, India’s largest and most loved chai café chain. In a short span of five years, he has created India’s most loved chai café chain with 53 cafes across seven cities Delhi, Mumbai, Noida, Gurgaon, Chandigarh, Ambala and Karnal, and 800-member team. 

Nitish Mittersain is the Founder and Managing Director at Nazara Technologies. Incubated in the year 2000, with its headquarter in Mumbai, Nazara Technologies is a global mobile gaming company that caters to large mobile consumer base in India and emerging markets including the Middle East and Africa. 

Paramdeep Singh is Co-founder and Executive Vice Chairman of Saavn, India's leading digital music streaming service, transforming how people around the world access and experience music on a daily basis. 

Prashant Parameswaran is a founder and managing director of Kottaram Agro Foods Pvt Ltd, brand owner of Soulfull. Soulfull is now present in categories of Breakfast Cereals, Muesli, Millet based Snacks & Millet Health Drinks. The range of products is presently in 5000 stores across 12 cities and will scale this year to 20,000 stores. 

Rana Daggubati, is an Indian actor, producer, visual effects co-ordinator and photographer. 

Raviteja Dodda is Founder & CEO at MoEngage, a next-generation marketing cloud, built for the Mobile-first world. MoEngage works with consumer businesses across the world including Fortune 500 brands like Samsung, Deutsche Telekom (T Mobile), Vodafone, Hearst and Prudential.

Rishika Lulla is CEO at Eros Now is Eros International Plc’s On-Demand South Asian Entertainment Video Service accessible worldwide to viewers across internet enabled devices including mobile, web and TV. 

Rohit Chennamaneni is co-founder at Darwinbox, a new-age cloud-based HR Technology which takes care of all HR needs across the employee life-cycle like recruitment, onboarding, core HR, time & attendance, expense management, payroll, employee engagement, Talent management and HR. 

Rohit MA is the Co-founder and Managing Director of Cloudnine Group of Hospitals, India’s leading maternity and child care network of hospitals. Cloudnine as a group employs over 3000 people and as a primary employer obligation is responsible for over 4500 people across 20 locations in 7 cities. 

Sahil Vachani is the Managing Director and CEO of Max Ventures and Industries Limited (MaxVIL). He joined the Max Group in 2016 with a focus on creating a powerful Real Estate brand – Max Estates Limited, and steering MaxVIL’s other businesses towards growth. 

Satyam Darmora is an entrepreneur and founded i2e1 (Information To Every One). There are more than 60 employees that work at i2e1. i2e1 is working on a Free-Internet model for masses and is currently serving One million+ free internet sessions every month across multiple locations.

Tushar Mittal is Founder at Studiokon Ventures Pvt Ltd. In a rapidly advancing global marketplace, where businesses are focused on building empires, what sets StudioKon Ventures apart is its focus on defining relationships rather than contracts. StudioKon Ventures has grown into a $20 million corporate infrastructure company. 

Ujjwal Munjal is the Managing Director of Rockman Industries, a leading auto-components company in India, and the Founder of Hero Electronix, Hero Group’s venture into the technology space. He leads a team of over 7,000 employees at both the businesses.

Vivek Gupta is the co-founder of Licious, India’s fastest growing fresh meat and seafood brand with an employee strength of 650+ members across different disciplines and functions. 

Zishaan Hayath is the co-founder and CEO of Toppr.com, an edtech company on a mission to make learning personalised. The company has an employee strength of over 1400, with its headquarters in Mumbai, and regional offices in 25 Indian cities.

Source: http://bwdisrupt.businessworld.in/article/Meet-40-Young-Business-Leaders-Selected-by-BW-Businessworld-for-Its-2nd-Edition-of-40-Under-40-Awards-and-Summit/28-09-2018-161053/

Love

Friends, Today I am writing on a different topic. After writing on topics like motivation and business topics, I choose different topic to write. So, Today I choose to write on Love.

Before you read further. I want to clarify one thing with all of you that “I am not against LOVE”. But recently I came to know about so called love story…And I am expressing my views on the same.
Love...Seems everybody have their own definition for it. Everybody wants to be loved but everyone is not good at it, but the question still remains- what the LOVE is?

"You're my babe", "my sweet heart”, “I love you", but only if you're with me. Is this Love. Or To have a physical attraction which is famous now a day… is Love.

In today’s fast changing world, what today’s guys/girls are doing, they chat 6-7 days and then start feeling that they have fallen in love & act in same way. Then they propose, hang out and break up within a month or 6 months. Some convert their love in marriage also where some get success and some fails.

Now days, whenever we ask a couple who are in love that what will you do after your marriage, what are your plan, how will you earn your bread and butter. Answer is NO IDEA. And the fact is that they are in love and want to marry with each other. Just want to share one of my poems when person is in love,

The cold breeze tickles my skin
Eyes filled with freshness and heart feels cold
Thunder is surrounding, waves are approaching
But everywhere I see her…I see her...I see her...

On a full moon day her illusion appears,
And her eyes appear in the sparkling stars,
And her laughter echos in gentle flow of stream
But everywhere I see ...I see her...I see her....

Though we are miles and miles away from each other
But our hearts are one
Though she is not seen by me,
Yet everywhere I see ...I see her...I see her…
If this is the love then what can I say for this,

• Someone makes you smile when you’re tired
• When our mommy makes coffee for daddy and she takes a sip before giving it to him, to make sure the taste is OK.’
• When your puppy licks your face even after you left him alone all day.’
• When mother cares for you a lot, no one care for you like her.
• When your father always wears that loose socks but he never let you wear that. He bring for you new one.
• When your younger sister take care of yours when you are ill and lying on bed.
• When your brother cries for you at your bad time and make you sure that you are not alone.
• When a sister tie a great bond in her brother hand without any demand.
• When they are not only friends they are your great supporter and backbone, gem of your life.

And there are many more…list is endless. But still we forget all these things and call our 20 or 30 days or I can say 2 to 4 months old relationship with love and forget years of relationship with our family members. Sometimes one unknown person is so important for us rather than family members. We loved that boy or girl who behave goody goody in front of us and forget our parents, brother or sister who always care for us.

It has been observed that in many cases when someone is in love, they left studies, parents, family members, neighbors, each and every helping hand. Don’t have bright future. But they left the homes and feel its victory of Love. Sometimes I read in news paper also this type of incident that at the age of 20 they become parents.  They are not even aware what to do with that kid. And how they will do the upbringing of the kid and develop their carrier.

Just want to ask some questions,

What is love?

Other person’s happiness is more than yours or our happiness is more than others.

What is Love? When you bring smile or bring tears ….

I just only want to say…. Love is a very small four letters word but the fathom of this word is deeper than the Mariana trench and altitude is higher than the Mount Everest!

મેહમાન -સંતાન

After a long time, I wrote something. 1st 2 lines I read somewhere on Facebook and was written by Mr. Prashant Somani, which touched my heart. So I tried something. Hope you like it. Please share your views. 

લાગે કે જાણે કોઈ મેહમાન હોય છે, 

એવાય કેટલાક ને સંતાન હોય છે;

સંતાન કે જે નાનપણ માં તુફાન હોય છે,

એ જ માં-બાપ માટે એ અંજાન હોય છે;

જેનો જન્મ માં-બાપ માટે અભિમાન હોય છે,

શું  એ માં-બાપ એના માટે અપમાન હોય છે;

સંતાનો ના સ્વપ્ન પૂર્ણ કરવા માટે એ સભાન હોય છે,

છતાં એ જ સંતાનો ને એમની ક્યાં ભાન હોય છે ;

ભલે એમની વર્તણુક મેહમાન ની જ હોય છે,

છતાં માં-બાપ માટે એ પોતાની ની સંતાન ની જ હોય છે.

                                  - રાહુલ રેવણે 

Distress Company

Some days ago, I learnt or I can say I recollected in my mind that whenever you want something don’t just think positive. Always ask, why do I require? I asked myself “why am I working as a business consultant?” And received answer that I like to interact with entrepreneurs and that lead me to come in consulting business.

Being a consultant, I always believed that businessman should interact with other businessmen. He should meet and network. It gives him many insights and learning. So, with this thought, I grab the opportunity to visit Synova Gears with one of my client and met Mr. Jamanbhai Patel one of the director of the company. I would like to present his thoughts on Distress Company and what we can do to not face this type of situation.

First and foremost let me throw some light on what is the meaning of Distress Company. I am sure enough many of you must be juggling with the meaning of the title. “Distress” generally means that the company is having difficulty dealing with its liabilities.

Now. Let’s see major points which help distress companies or I can say what we can do to not getting listed in Distress Company.

•Does your company have old employees?
Generally it has been observed that being an entrepreneur we always believe in our old employees because they have given their sweat and blood. And actually they did. But whenever we try to implement any types of system or hire any type of consultant then these are the people who always oppose. But now, the time has changed. We have to hire new employees (new blood) because they are ready to change and adopt. Or else it will be better if we walk with combination of both.

•Are we unable to recruit people?: Generally it has been observed that we always depend on external agencies for recruitment. During my consulting experience, I found in many cases that my client’s requirement was sales people and placement agencies were sending people with accounting experience. I would like to share one example. One of my client required Mechanical Engineers, so he had approached Placement agencies. They sent Mechanical Engineers. During the interview. When client asked about micro meter, then he was surprised that majority of the people were not aware how to hold micro meter. I am not against any placement agencies but, I just want say that use are own sources & circle. May be it is possible that we can recruit people within time period.

•Difficult to survive in price war?:

During the discussion of this point Jamanbhai stated that sometimes it is necessary to enter with Low Price and then create your brand. Before that we have to make sure that our QCD (Quality, Commitment & Delivery) should be proper. In this competitive world if we are unable to provide quality, not able to fulfill commitment and not able to deliver on time then we have to think for our existence. So, work on your QCD, then start marketing with 360 degree and create your own brand. So that we can take our own price.
Friends these are some points which we discussed with Jamanbhai – Director of Synova Gear. Apart from these we had discussed many points which I will share with you in next article. 

Today’s entrepreneurs don’t have all answers, yet they succeed because they are smart enough to know when to ask others for their input. So, keep asking questions. Remember one thing जवाब उसीको मिलता हे जो सवाल पूछता हे. & अच्छे जवाब उसीको मिलता हे जो अच्छे सवाल पूछता हे. Curiosity is the greatest teacher  in 21st century. So, keep asking.

Why is the Modi government not controlling the fuel prices?

Fiscal discipline.

It is relatively easy for a politician to give subsidies, handouts, price cuts. These all help people in the short term and help the politician get votes. However, they screw the country in the long term.

BJP workers would want Modi to cut oil prices. It is a quick way to appease their vote bank [middle class] and help them win elections. Why would Modi want to piss off the common people and lose votes? So many businesses that fund the BJP rely on petrol/diesel and would not reducing prices help the BJP appease them and get more funding? Is keeping high petrol prices helping Modi/BJP in any way?

When governments try to subsidise petrol/diesel [like they did in the past], there is a huge cost to the government. Somebody has to pay for it. Either more taxes on something else or less government spending on social programs. And paradoxically by trying to control petrol price, you take on so much debt that the inflation shoots up.

In fact, by maintaining the fiscal discipline the government is keeping the overall inflation low — India's August inflation seen easing below RBI's mid-term target : Reuters poll — despite the oil prices. It is the overall inflation that common people get affected the most — as that’s what affects their finances.

In fact, in 2018 budget [last budget of this term] Jaitley went for a little overspending — but still not out of control spending like in the previous era — to make it easy for their party workers to get some votes.

Figure: How much the government overspends?

It is easy for political parties to hoodwink people by reducing petrol prices [seen immediately] and lead to a process that increases overall inflation [often hidden in the short term]. But, Modi is resisting that temptation [for now]. When Modi starts cutting petrol prices [without decrease in crude prices] you can realise that the vote campaign mode is on. As a whole fiscal discipline is putting the economy in a healthy mode — growth without inflation.

Source:https://www.quora.com/Why-is-the-Modi-government-not-controlling-the-fuel-prices

Do you think that the introduction of the GST in India is a step towards a greater and developed nation?

The GST is truly a profound change fundamentally, despite all the rollout hiccups. One has to see it in the medium term to be optimistic about it.

It will transform the Indian economy in the following ways :

1. One India promise: Everyone will start thinking in terms of “India as a nation” and not merely in terms of their provincial loyalties. This happens because everyone’s fate is tied together through the GST Council (where all have representation). The downside? If anyone fails to make enough revenues, they’ll question the whole system. Let’s be fair: states have sacrificed their federal fiscal freedom to be a part of the GST regime.
2. Simple is better: The simplified tax regime will be a great relief for all honest businesses. The one thing everyone loves is minimum compliance load and maximum clarity. GST theoretically promises that. It will take until 2020 for the final shape to emerge, but the hope is strong. The downside? If rate slabs don’t get rationalized, it will remain an under-optimized and a compliance-heavy system.
3. Tax to GDP ratio is all set to improve due to ‘everything’ getting into the government’s official records. From our present 16.6% of GDP to a much bigger number, the journey will give a lot of leg-space to the government to do things it otherwise needed to borrow money for. The downside? If public services’ quality does not improve, people may question the whole idea of paying more taxes. This is the greatest conundrum facing public policy making as of now.
4. Big data, transparent analysis: The GSTN and CBDT will seamlessly share data, so indirect taxpayers cannot escape the direct tax net. And GSTN and DGFT too will share data so foreign trade data become instant, and trends that much clearer and policy-making easier. The downside? Too much power in state’s hand, some would say :)
5. Formalisation: The huge informal economy may slowly be turned into a formal one over a decade or so. It will have great pains attached but needs to be finally done in a manner that jobs destruction doesn’t happen. GST forces companies to go formal, but the process is not smooth as of now - it is “yanking the informal into the formal” approach. Women empowerment will get a boost as a key driver of poor women labor participation in India is the lack for formal sector jobs. The downside? Formal doesn’t equal profitable always. Many may simply go bankrupt in the process. Bad for everyone.

Overall, in 10 to 15 years, we will see the final shape of things. We hope and pray that the end result matches the great pain and sacrifices being made today.

Jai Hind!

Source: https://www.quora.com/profile/Sandeep-Manudhane

Lessons on leadership from PepsiCo’s Indra Nooyi as she steps down as CEO

Indra Nooyi will step down as the CEO of PepsiCo after occupying the post for 12 years. She will be succeeded by Ramon Laguarta on October 3 and will continue to be a part of the PepsiCo's board until 2019. Indra had joined Pepsico in 1994 and in 2006 took over as the CEO from Steven Reinemund. Under her leadership, PepsiCo grew from $35 billion in 2006 to $63.5 billion in 2017.

Indra will continue to serve as the corporation's chairman until early 2019. On her stepping down, the 62-year-old said in a statement on Monday, "Leading PepsiCo has truly been the honor of my lifetime, and I'm incredibly proud of all we have done over the past 12 years to advance the interests not only of shareholders, but all our stakeholders in the communities we serve. Growing up in India, I never imagined I'd have the opportunity to lead such an extraordinary company."

Ramon, who will take over the reins, has served in several executive positions at PepsiCo for 22 years. Since late 2017, he has served as President of PepsiCo, overseeing the company's global operations.

Indra took to Twitter on Monday to express her faith in Ramon's abilities to take her position. "Ramon Laguarta is exactly the right person to help build on @PepsiCo's strong position and success. He has been a critical partner and friend and I am positive that he will take PepsiCo to new and greater heights in the years to come," she said.

Meanwhile, Ian Cook, PepsiCo's presiding director, lauded Indra's contributions to the growth of the company. In a statement, he said, "She has delivered strong and consistent financial performance, managing with an eye toward not only the short-run, but the long-run as well.”

Here are some of her most inspirational quotes on leading as a woman.

Indra also tweeted, "Today is a day of mixed emotions for me. @PepsiCo has been my life for 24 years & part of my heart will always remain here. I'm proud of what we've done & excited for the future. I believe PepsiCo’s best days are yet to come."

Source: https://yourstory.com/2018/08/leadership-lessons-pepsico-indra-nooyi/

Is 5S Implementation At All Possible in Non-manufacturing?

It is no wonder that the service industries sometimes feel disoriented in the world of management-speak regarding business improvement. There is so much jargon floating around – ‘Six Sigma’, ‘5S’, ‘Kaizen’, ‘JIT’, ‘Kanban’ and so on. They do not commonly realize that these concepts are often as applicable to them as to the manufacturing sector.

It is true that the so-called ‘lean methods’ and other kaizen-style management practices initially proved their worth in the manufacturing sector. However, they are equally applicable to the service sector, provided some small adjustments are made.

Let’s take 5S for an example. ‘5S’ is a lean management concept which stands for 5 Japanese words beginning with the letter S. these are:

1. Seiri (organizing or arranging things)
2. Seiton (putting things in order)
3. Seiso (cleaning)
4. Seiketsu (standardization)
5. Shitsuke (discipline)

But to make them easy to remember, we might use some rough English translations, also beginning with S:

1. Sort
2. Set in order
3. Shine
4. Standardize
5. Sustain

The first ‘S’, ‘seiri’, refers to the task of sorting out the needful from the unnecessary, and discarding the former. It often turns out that stuff that seems useful initially, or has traditionally been considered a part of the work environment, is actually an impediment to work, and creates tension and friction in the workflow. ‘Seiri’ refers to their identification and subsequent removal from the workspace.

Next, ‘seiton’. This is the dictum that one must set the work area such that ‘seiri’ becomes possible, and anyone not natively belonging to that space can come in and find necessary items. This, of course, entails meticulous labeling of each piece of equipment, or, in the case of non-manufacturing industries, each device and instrument (whether material or conceptual) involved in the processes.

‘Seiso’ is cleaning up your workplace in an intelligent manner. A clean workspace stimulates the workflow, and livens up the work environment. So housekeeping must be a part of any workspace, and it is the responsibility of the workers to clean up after work in a way that also reviews ‘seiri’ and ‘seiton’.

‘Seiketsu’ standardizes the first three ‘S’-s once they are firmly in place. Processes and checklists are created and posted visibly in every work area, and workers are required to review them periodically to ensure that the daily requirements of ‘seiri’, ‘seiton’ and ‘seiso’ are being fulfilled. Thus the best practices are standardized across the work environment.
And lastly, ‘shitsuke’ strives to maintain that all-important discipline among workers without which no implementation of 5S can ultimately be sustained. Quality, cleanliness and safety are all finally dependent upon how successfully the workers have imbibed the spirit of discipline.

As becomes clear from the above exposition, 5S requires careful planning based on detailed observation and collection of data. There is no magic formula for successful 5S. It is a slow and gradual process. Each organization must find out its own golden mean through precise measurements and intelligent analysis in interactive workshops known as ‘kaizen events’.

And that is probably the greatest difficulty that the non-manufacturing sector faces in trying to implement 5S. It is easy to observe, measure and record processes in a manufacturing unit. But non-manufacturing industries rarely have a natural measurement system. There is also considerable difficulty in recognizing what constitutes a process.

One formula that they can use is known as SIPOC. This is an abbreviation from the first letters of the five basic elements of production. And it must be remembered that even non-manufacturing industries are producers – not of material goods, but of services and social value.

SIPOC stands for Supplier, Input, Process, Output and Customer. In manufacturing, it is trivial to discern who is who and what is what. In other industries, it may take some careful observation and intelligent consideration to find out the Supplier, Input, Output and Customer. The issue may even be complicated by the fact that sometimes the Supplier may be the Customer – as is often the case in banking or healthcare.

However, once these have been ironed out, and the other four elements have been identified and labeled, what remains must be the PROCESS.

The task that then remains is to find out how best to apply 5S to that process.

Hundreds of non-manufacturing companies have already successfully implemented 5S to their processes, with astonishing savings in cost, time and human resource. These include public sector services, like government offices and courts of law. Implementing 5S in non-manufacturing is therefore no longer the chimaera it once was, but fully achievable with a little careful planning and intelligent thinking.

Peter Peterka is President of Lean Six Sigma US. For additional information on Six Sigma Green Belt or other Six Sigma Black Beltprograms contact Peter Peterka.

Author: Peter Peterka Google

Source:https://www.6sigma.us/lean-six-sigma-articles/is-5s-implementation-at-all-possible-in-non-manufacturing/