George S. Grant, the brand ambassador of Glenfarclas single malt whisky was in India recently to launch a premier brand ‘Blend Glenfarclas’ at Rs 25,000 a bottle. He chatted with BW|Businessworld's Smita Tripathi about his Indian plans and why India was more important than China. Grant’s Scottish sense of humour was evident throughout the interview. Excerpts. Tell us a little about GlenfarclasWe were established in 1836 which was the saddest year of our established history as in that year we became legal and had to start paying taxes to the English. My family bought Glenfarclas in 1865 for 511 pounds and 19 shillings, we hope the distillery is for a little more than that considering that one of the bottles of whisky we sell is actually 20 times the price we paid for the distillery. I’m the sixth generation Grant to own the distillery. Glenfarclas is our main brand, the company is actually called J&G Grant and we have other business interests including a 50 per cent share in a bottling plant just outside Edinburgh. We also have other highland blends and whiskies. We are right in the heart of Speyside, around a three-hour drive north of Edingburgh. What makes Glenfarclas different?Our biggest differentiator is that we are family-run and owned. Most distilleries are owned by multinationals and corporates. In terms of taste, Glenfarclas has no smokiness or peatiness at all. It’s a very sweet whisky. All our whiskies are matured in sherry casks which gives it a really dark, rich colour and also a sweet finish. It has a kind of bitter chocolate flavour. What are your annual production and sales figures?I’ll answer half that question. Since we are a family run business we don’t give out our sales figures. But production-wise we are capable of producing three and a half million litres of alcohol in a year which equates to 11 million bottles. Around 60-70 per cent of this will be Glenfarclas and the rest will be used in blended whiskies.How important is the Indian market for you?India has always been a whisky drinking country. It’s traditionally been a brown spirit market and not a vodka market. The potential for India is huge. A few years ago everyone talked about how China and India were the future markets. But India has become potentially more important. For one, everyone in India can read the labels while the Chinese struggle with that. Also Indians have always drunk some form of whisky while Chinese have traditionally consumed clear liquids. So potentially the Indian market is massive. Only 10 per cent of the Scottish population drinks whisky. That’s 500,000 people. So if we tell ourselves that only 1 per cent of the Indian population is going to drink single malt, that’s still over a million people. Are you competing only in the single malt market?I think initially it’s less about competition and more about education. What’s important is to educate the public. It’s not just about blended whiskies versus single malts but also, Indian liquor versus Scottish liquor. For instance, Indian whisky is made from molasses so technically it should not be a whisky but a rum. There are several such key learnings in the world of whisky and we have just now started the education. How are you going about it?We are making presentations to bartenders and others in the trade trying to tell them what Glenfarclas is all about. One interesting thing in India is that people rotate their jobs very quickly. So you have trained a fellow in a particular hotel and before you know it he is at another hotel and you are reaching out to a larger audience. So even if I manage to speak to only 6 hotels, in another six months time those people will be working at other hotels and I won’t need to go there. The other thing is to have events, get a small group of people and do a tasting session. Word of mouth really counts. What you need are a few people who unwittingly become your brand ambassadors. Are you looking at catering to the younger generation?You have to cater to the younger generation, the older generation keeps dying. Who is your target audience in the country?Everyone.
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The past year has witnessed a tremendous shake-up of the IT services sector in India. Once perceived as a “sunrise” sector, creating jobs for thousands of Indians and presenting new opportunities for a globalised nation, the past few quarters have seen some service providers stumble in the changing global economic environment. The question on many minds is – 'Are the heydays of Indian IT over'?The short answer: NO. The recent uncertainty is part of a shift in the industry. As maturity sets in, Indian IT is growing beyond its traditional trajectory and carving a new path for itself. In fact, focusing on the top five IT firms alone demonstrates how each one has identified a model based on inherent strengths and capabilities, as well as the changing market direction.In fact, just a year ago, we could compare the top five IT services companies in India in one breath. Today – and increasingly in the future – this will not be an apples-to-apples comparison. Each of the players is creating a niche for itself with distinct service offerings and areas of specialty. For example, Tata Consultancy Services is leveraging its strengths in large government projects and the significant inroads it has made in the domestic market. It would not be a surprise to see TCS in the next few years evolve as a player with offerings across verticals and geographies, but with a definite advantage in the domestic market. On the other hand, Infosys is betting big on products and platforms and the Infosys 3.0 Strategy is reflective of this approach. Wipro on its part has key strengths in the product engineering space and today leads the market in this aspect. It can be expected that Wipro will reinforce its position in this area. HCL as the current leader in infrastructure management services – where it has established a USD 1 billion revenue stream – has a lot of potential in expanding this arena. If we follow each of these companies down these growth paths, we can observe a significant divergence in focus. This will only increase – unless there is a definite change in strategy – to create companies that are specialists in key areas rather than the generalists they are today, competing and winning for different types of projects. The best example of this shift is IBM and Accenture, which many years ago competed against one another but today cannot be considered players in the same space. In short, till now Indian IT services firms competed in the same, large playfield; for tomorrow, they are creating their own.The second key trend is in the area of M&A. Large IT firms are working with large wallets are looking for acquisitions that will bolster their consulting expertise, or multinational captives that can enhance inorganic growth. Apart from the top tier of firms, we will witness consolidation where tier-II players would look at acquiring one another to strengthen their capabilities and compete in a narrower marketplace. The big IT firms, on their part, are looking at acquisitions as a means of gaining capabilities as well as market access into new geographies.Thirdly, hiring at IT services firms has traditionally been observed very closely, due to the sheer volume of employment generated. While there may be fluctuations in the number of people hired, we are witnessing significant changes in how hiring is done. While earlier, hiring was skill-based, today the industry is transitioning to a competency-based model. For example, earlier a job description would be written for engineers with experience and knowledge of programming languages. Today a job description looks for domain or vertical expertise, as well as experience in technology areas such as ERP implementation or e-commerce specialists. This is in line with industry trends where customers are looking to derive more business value from their IT projects. CIOs and CTOs are being asked how IT can contribute to the organization’s bottomline, and that is reflecting in their consumption of modern IT too. Therefore, even the service providers are looking at specialists who can solve a business problem rather than just write code.Lastly, business models themselves are undergoing transformation among the large IT companies. Earlier, the approach was to price projects based on the number of individuals assigned to it and their time. This led to the scalable business model where fresh hires would be made for every project win, thus paving the way for a constant flow of engineers into these companies. Today the service providers are also looking at a partner-led model, where they partner large multinationals in the technology space to participate in business transformation projects. The vendor provides the technology solution while the service provider packages it with their consulting expertise. Another approach that is gaining traction is the platform-based model, where service providers are investing in creating a technology platform by themselves; this will potentially provide end-to-end solutions for specific industry verticals. This particular model involves a lot of IP creation and hence it is less dependent on large volumes of engineers. While all three models coexist today, we will see this skewing towards the platform model going forward.Each of these shifts – in the areas of market approach, hiring, business models and consolidation – is likely to have a definite impact in the direction that the IT services industry moves over the next few years. Quarterly results are one indicator of success or failure. However, it is critical for all of us to analyse market dynamics from a long-term perspective, rather than berating or celebrating the large service providers during the results season. The shakeout that we are in the middle of, is certainly creating room for concern and moments of difficulty. But it is just one more indicator that we are no longer in the early stages of the industry and are fast maturing in the new technology environment. (The author is Manager-Consulting, Zinnov)
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iGate, a Nasdaq-listed company, has announced the sacking of its President and CEO Phaneesh Murthy following an investigation into his relationship with a subordinate who has accused him of sexual harassment.Gerhard Watzinger has been nominated as an interim CEO and President of the company. iGate in a press release emphasized that the sacking was not related to any operational or financial performance of the company.Phaneesh Murthy who has been sacked as the President and CEO of Nasdaq listed iGate Corp admitted to having a relationship with the 31 year old investor relations head of the company Araceli Rioz who has now accused him of sexual harassment. In an conference call from California, Murthy sounded defiant and said he had not violated any company policy and infact took the lead in informing the board of the relationship after it had ended “a few weeks back.” Murthy did not clarify for how long was the relationship ongoing and whether it was initially a consensual one but said “it was more than a friendship.” He also said that this was an attempt to extort money and he would not look for an out of court settlement. Rioz, an US national, according to Murthy has retained the same lawyer and the law firm as Reka Abraomvitch, who had accused him of similar charges at Infosys.In 2002, Infosys and Phaneesh Murthy parted ways after his executive secretary Reka Maximovitch had accused him of sexual harassment. Infosys had then chosen to settle out of court. Murthy also said that he had received extensive support from his ex-colleagues at iGate some of whom had offered to resign in his defence. There was no clarity in how much damages has been claimed by Rioz, but Phaneesh said the company has an insurance cover for such eventualities but did not specify the extent of coverAn IIT Madras and IIM Ahmedabad alumni, Phaneesh had helped Infosys grow from $2 million in revenue to $700 million at the time of his departure.He had subsequently floated a BPO company Quintant with initial investment from GMR Group which was subsequently brought by iGate. In the last 10 years he had helped iGate to become a player of scale by acquiring Patni computers.
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The Indian retail sector has undergone tremendous changes in the past two decades. Technology and awareness are the two driving forces behind this change.‘Private label’ is an essential component of this modern retail offering worldwide and the same has been the case in India. Having a private label now is not just a matter of being ‘me-too’. The ‘copycat’ has really gone the whole hog in terms of development and innovation, with utmost thought given to the quality of the produce.Various retail chains have launched a bouquet of private label products in various categories. There has been a two-pronged approach when it comes to branding. Products are either associated with the main retail brand or are launched under a separate brand name with or without an association with the main retail brand. Buyers have become aware, not just of the pricing dynamics, but also about product quality and sourcing. They want to know where particular merchandise came from, how it has been treated and processed, how it will affect his health.The seller, on the other hand, understands the demands of this buyer and is increasingly thinking of innovative ways to be in-sync with his consumer.Private Labels — Boon Or Bane?In the initial stages of evolution of modern retail, private label players tend to be opportunistic in nature.In the Indian context, the food and grocery landscape is dominated by strong primary and secondary brands. However, tertiary brands are not prevalent in most categories and most retailers see an opportunity to introduce good quality products, at prices that are significantly lower than that of the leading brand. Nevertheless, as modern retailers grow in size and importance, and urban consumers become more aware, there is a pressing need to take a strategic, as opposed to an opportunistic, view of the private label space. Let us take a look at some figures that give an indication of the size of the game: Research suggests that the Indian retail industry was estimated at $470 billion in 2011, accounting for approximately 35 per cent of our GDP and is expected to grow to $675 billion by 2016 at a Compounded Annual Growth Rate of 7.5 per cent.This industry is mainly divided into the organised and unorganised markets, the former estimated at $26 billion and accounting for roughly 6 per cent of the overall retail market (2011).The organised market is projected to grow to $84 billion by 2016 at a CAGR of 26 per cent. Within this, the Food & Grocery segment is the single largest retail category and accounts for about 70 per cent of the market ($325 billion in 2011), while the organised retail segment for Food & Grocery is estimated at about $9 billion and accounts for 35 per cent of all organised retail. Food, according to the Boston Consulting Group BCG, is what Indians spend on the most – at 31 per cent, compared to 25 per cent in China, with US$ 991 billion being the absolute number that our population spends on consumption in a year.By 2020, this number is set to hit $3,584 billion, out of which about $900 billion will be on food only!Given these numbers, it is imperative that the retail industry pay attention to what is being produced and sold its stores. A Middle Class SolutionGiven the scale and stakes involved, the battle for shelf space is only going to intensify in the future. Other than the main FMCG players, there will be many others who are entering the market with a product and distribution strategy meant exclusively for modern trade. Coupled with this, is the emergence of the aspirational middle class, aptly called the ‘Urban Aspirers’by BCG, that is going to drive the India consumption story in the coming decade with their spends.The Urban Aspirer is increasingly gaining a deeper and wider understanding of his/her needs and has a high level of clarity of what the product offering needs to deliver. This class of consumers is not necessarily enamored by big brands nor is it drawn to a product merely on account of the price. Retailers will need to completely revamp their private label offering to address this new emerging consumer segment.The “good product at a lower price”, will make way for a comprehensive 360-degree approach, leading to a strong customer proposition that reflects the values of the retail brand. Appropriate quality, attractive packaging, the right pack sizes that reflect consumption and buying patterns, attractive displays, designated shelf space and assisted selling will all be needed to supplement the price proposition. In terms of actual branding, there are essentially two routes that will continue to be adopted.The first would be to stay with the retail brand itself and the other would be to create independent brands in various categories. Players who are in the process of building up scale, will in all probability pursue the former strategy that is essentially more cost effective and quicker to implement successfully. Why Private Label?Private label offering is an integral component of the evolution of modern trade in India.It works well for the emerging Urban Aspirer who gets products that are sharply focused on meeting specific requirements without being burdened with the price premium of the leading brands. It provides an opportunity for the retailer to connect directly with the customer, gain a place in the customer’s home and kitchen, earn more in terms of margin and provide a counter-balance to large players in the market.The key to success is of course to choose the right categories to play in, put together a comprehensive offering in terms of width and depth andprovide the right support in the stores both in terms of space and people. The middle aspirer class is driven by the value-for-money motto in its consumption and private labels offer the twin comfort or quality and value for money.Consulting firm PriceWaterhouseCoopers says Indians are not always looking for a bargain.Hence, retailers need to offer value in quality, style and price and offering a comprehensive range of food labels will address this demand-supply gap in the market. Private labels will become more sophisticated in their look-and-feel with retailers using their private label portfolios as a means of differentiating and standing out in the market. Value is no longer only about price – it is very clearly Price plus, which could mean one or more of quality, convenience, service, experience, innovation.(The author is CEO, Star Bazaar)
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There is much debate about China as its Prime Minister Li Keqiang visits India. Much of the discussion, debate, anger and irritation are about border issues. While much diplomatic effort will be deployed to resolve the pending problems, it is really the economic dynamic that will continue to shape the future.Already India is losing the trade balance with China. In the last six years Chinese exports to India have overwhelmed its imports. These figures are pretty stunning. Imports from China increased 210.81% to $54.30 billion in last six years. During this period India could manage to increase its exports to China only by about 62.50% to $13.52 billion. Effectively, China sells to India four times of what India sells to it. If China is arrogant about India, it is because perceived economic weakness. If China indulges India, it is only to maintain a lucrative market. China respects nothing more than economic strength. It fears nothing more than economic strength. Border skirmishes are only an arrogant manifestation of its economic superiority. By next year bilateral trade is expected to cross $100 billion. India will have to improve its act to ensure that trade balance is maintained and not worsened. So what can India do? Fundamentally, it must improve its competitiveness. Manufacturing is still expensive and cumbersome. While the government has to focus on obvious solutions like lower credit and efficient infrastructure, Indian companies will have to focus on value added products that are tough to replicate. Domestic units will have to increase their focus on quality to dull the price advantage of most Chinese products. While Chinese products are cheaper, they are also of lower quality. Indian companies must exploit this weakness. China is focusing on teaching English to its masses in a way that will erode India’s superiority on the language front. This will also impact India’s advantage in knowledge and services sector. Big players need to recognize that their days of advantage will not last long. These companies must come together and invest in education. Unless the gap between colleges and companies is reduced further, corporate India will continue to be hobbled by inadequate talent to fuel growth. Regional trade is critical for India. Regional trade in South Asia is important to ensure that new markets open up for domestic players. Emphasis on regional trade will build cross border partnerships that can leverage competitive advantage to take on China. Regional trade groups in Africa are increasing local integration to counter the influence of global players. East African Community for instance is burying its differences to build regional infrastructure projects that rise above national boundaries. South Asian economic cooperation driven by private sector can build local giants that can push ahead in the Chinese market. All countries in the region are apprehensive about the invasion of Chinese products. A combined South Asian effort can strengthen regional companies. It is easy to carp about the dominance of China. But it is tougher to take steps to counter it. To end border and security issues with China, India needs to boost its economic strength. Without balance in business, India will not be able to achieve balance in diplomacy and security issues with China. (Pranjal Sharma is a senior business writer. He can be contacted at pranjalx@gmail.com)
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There was a time when we used to hang on to our phones for a good four to five years, letting go only when the device was finally falling apart. What is one to do, though, when every few months, a brand new super phone comes along, touting new features or something you apparently can’t do without?One sits down and considers – to upgrade or not to upgrade?The S3 Is Hardly ObsoleteThe Galaxy S3 may be 2012’s flagship but it’s still a perfectly powerful superphone. Unless you’ve damaged your device and generally mistreated it, it should be looking much as it did and not very different from the S4, which hasn’t come with major changes to its design. The S4 has a new polycarbonate back, but it’s just as glossy and the overall look is also the same.While the S4 comes with more powerful processing hardware, it’s not a must if you’re not pushing the limits on your device with gaming. If you refresh your S3 with a clean-up of extra files and unused apps and also a removal of apps that are buggy and misbehave, you still have a a great quad-core phone, one that was fairly ahead of its time.The S4 has a 13 megapixel camera and it takes nice daylight shots, and also has a few tricks such as adding sound to pictures. But the difference between this and the S3’s 8 megapixel isn’t dramatic, so don’t base your decision on that alone.The S4 has a number of new features and some of those may come to the S3 in time. A few,, such as Air Gestures though will not because the S4 has additional sensors. However, the new features aren’t yet a strong reason to upgrade – more nice as a fresh buy. The S4 has Jelly Bean 4.2.2 while the S3 is still at 4.1.2, but again, you won’t be missing anything you can’t do without. The difference in batteries is also small and both will take you through the day. If you’ve been noticing a decline in your S3’s battery, consider replacing the battery rather than the whole phone. Another tip is to pick a few beautiful cases and give your phone a new look – that always feels good.If You’re A Note 2 User…The only reason you’d want to switch from a Note 2 to a Galaxy S3 is if you’ve discovered that you thoroughly dislike the size of the Note. On paper it’s just 5.5 inches vs 5 but in reality they really are strikingly different sizes. The S4 is much more easy to hold, light, and even use with one hand. The screen on the S4 is also far nicer than the Note’s. But the Note series has the advantage of being able to work with the stylus and actually already has some of the Air View variety of features except that you use the S-Pen instead of your finger. If you’re used to the Note’s roomy screen and do a lot with it, the S4 will seem small.If You Have The Money…The S4 is not a must-have over the S3 or Note 2, but if you promised yourself a new phone and have money to spare, why not upgrade, as long as you’re accustomed to the Samsung TouchWiz interface and the way it kits out its devices with software. The first thing you’ll find is that the S4 has a light frame but packs a lot more, both in terms of processing power (Octa-core processor, 2 GB RAM) and a somewhat improved battery of 2600 mAh. The internal storage is still the same on both devices. The moment you switch on the S4, you will notice the difference because of the beautiful new screen. Colours and contrasts were always strong on Samsung devices, but on the S4 there’s also clarity and crispness. The camera is more enjoyable to use because of the screen and as mentioned earlier, has a few tricks up its sleeve. The front camera is a 2 megapixel and also takes 1080p video, so that’s a marked improvement. You also get enough features and settings to explore for months to come. You’ll find the refreshed TouchWiz a bit different but can customize things to suit yourself specially with Android’s Jelly Bean 4.2.2 update which has its own interesting features. Not killer features, but interesting nonetheless. The S4 has additional sensors and is supposed to work with upcoming apps and accessories to create health and fitness applications and trackers.Of course, you have the option of switching from the Galaxy S series altogether and considering something different, specially the HTC One with its beautiful design, or the ever popular iPhone. But for those considering an upgrade, you’re good as you are with the S3, unless you happen to have money to spare and are super comfortable with the Samsung user environment.
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Shares of Infosys Ltd rose around 4 per cent on Monday (3 June) on bets the return of founder and former chairman N.R. Narayana Murthy as executive chairman would improve the IT services outlook. The return of Murthy, which was announced on Saturday, comes after Infosys has grappled with disappointing results and loss of market share. Just two years after he stepped down from a leadership role at Infosys Ltd, a company he co-founded with six others, one of Indian IT’s tech titans N.R. Narayana Murthy is returning as the executive Chairman of the company. K.V. Kamath who was the chairman of Infosys has stepped down and is set to become an independent director on the board. Interestingly, Murthy’s son Rohan will be his executive assistant. In the past, Infosys founders had deliberately chosen not to involve their children in company affairs. Infosys once seen as the trend setter for the Indian IT services industry has been struggling to grow in the last few years even as its peers like Tata Consultancy Services Ltd, Cognizant and HCL Technologies have grown at a faster pace. Murthy’s return to an executive role in the company is likely to help lift staff morale and also give a boost to the company’s stock price on Monday when the bourses open. Kris Gopalkrishnan who was the co-Chairman of Infosys has been redesignated as executive Vice-Chairman of the board. Company said S D Shibulal will continue to be the CEO and MD. Sources indicated that Murthy has returned to turn around the fortunes of the company which was floundering. Read: Changes In Global Policies, Laws May Impact Revenues: InfosysRead: Infosys Slapped With Rs 577-Cr Tax Demand Notice “He enjoyed his time playing with Krishna (his granddaughter) but wanted to ensure that Infosys wasn’t left behind. While this announcement might have come as a surprise to others, he has been closely involved in the business developments of the company over the last couple of months. In a sense his hand has been forced because of the poor performance of the company. I wouldn’t be surprised if there are more changes in the near future including revisiting the company’s 3.0 strategy which has not been very successful,” said an senior official of the company who did not want to be quoted as he is not authorised to speak to the media. Murthy has requested for just a token compensation of Rs 1 per year. “This is not about the money but about legacy. He wants Infosys to regain its old lustre,” the official added. Internationally too there have been examples of tech titans coming back from their retirements to rescue the companies they founded. The latest example being Michael Dell who came back from retirement in 2007 and is now looking to take the company private. (With inputs from agencies)
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iYogi, a provider of remote technical support has launched a cloud computing platform, called Digital Services Cloud (DSC), that will allow companies and service providers to deliver their own remote management services.With DSC, telecom companies, OEM’s, technology retailers and BPO companies can address new opportunities and generate revenue, while enhancing customer experience and reducing costs. The DSC would allow customers to utilise the iYogi support network in their own services. It will allow enterprise and home service providers to offer in-house branded support for end-user PCs. Says Vishal Dhar, co-founder and president (marketing), iYogi: “DSC has the capability to increase customer lifetime and value. It allows telcos, technology retailers, and BPO to expand their business by adding technical support services.”The cloud service is in response to demand the company has seen from partners to open up various components of the iYogi support network, which utilises a combination on locally-installed software and a remote support network to allow technicians to diagnose and repair systems through the cloud. iYogi has over 2.5 million users, and has serviced more than 13 million technical support incidents in the last six years.
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