1. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
“Stay Hungry
Stay Foolish”
-‐
Steve
Jobs
Volume
II
Issue
II
Oct-‐Dec’11
e-‐GlobuzZ
K.J.Somaiya Institute Of management Studies & Research
2. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
FOREWORD
Dear
Readers,
It
gives
us
immense
pleasure
to
bring
you
the
7th
and
second
anniversary
issue
of
e-‐Globuzz
(Oct-‐Dec
2011).
The
business
world
was
even
more
turbulent
in
this
quarter
in
comparison
to
the
previous
ones,
with
the
European
Union
(EU)
going
into
a
deeper
financial
crisis,
change
of
regime
in
Libya
and
the
sad
demise
of
one
of
the
most
successful
and
respected
innovators
in
the
personal
technology
industry,
Late
Steve
Jobs
in
Oct
2011.
Considering
the
monumental
contributions
of
Steve
Jobs,
the
e-‐Globuzz
team
has
dedicated
this
issue
to
him.
A
lot
has
been
said
in
the
press
and
other
media
about
the
unique
contributions
of
Steve
Jobs.
We
remember
him
and
cherish
his
commencement
address
to
MBA
students
at
Stanford
University
in
2005,
which
will
always
be
an
inspiration
for
several
generations
of
innovators
and
MBAs
alike.
Some
of
the
Highlights
of
this
issue
include
a
brief
report
on
the
first
International
Business
Conference
Pangea
2011
organized
by
IBS@SIMSR
on
24th
September
2011,
a
write
up
on
emerging
markets
of
African
countries
along
with
other
contemporary
articles
on
international
marketing,
finance
and
logistics.
One
of
the
e-‐Globuzz’s
first
that
we
have
for
this
issue
is
an
article
by
our
own
faculty
Prof.
B.
Bhatia
on
international
finance.
We
have
also
covered
highlights
of
the
international
business
session
on
emerging
trends
in
international
trade
and
cross-‐border
investments
of
multinational
enterprises
on
16th
December
at
Samavesh
this
year
which
is
our
institute’s
prestigious
annual
event.
We
hope
you
like
this
issue
of
e-‐Globuzz
just
as
much
as
the
earlier
issues.
We
invite
contributions
from
all
our
readers
for
the
8th
issue
(Jan-‐Mar
2012)
proposed
for
e-‐publication
by
mid
Feb
2012.
Happy Reading,
Prof. C. P. Joshi
Faculty Mentor
IBS@SIMSR
2
3. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
VOL
II
ISSUE
II
OCT-‐DEC
‘11
Obituary 4
Steve Jobs
Taming the 5
recession Faculty Mentor
Electric-Car Industry – 8
The road ahead Prof.
C.
P.
Joshi
A New Chapter In 10
Editor-in-Chief
Indo-Iran Ties
Islamic Banking 12 Prerna
Makhijani
Battling the skies - 14
The success of Manvinder
K
Sodhi
AirAsia Designers
Emerging Markets: 16
African Countries Vishu
Kartik
International 20 Swetaleena
Das
Logistics Did you know
Issue of GDR/ADR by 23
Indian companies- Ankur
Yadav
Recent Trends
Alumni Speak 26 Circulation
Highlights 27
Swati
Moolchandani
International
Business Conference Shivam
Awasthi
Highlights 32
Samavesh
All
the
views
expressed
in
this
e-‐periodical
reflect
the
personal
opinions
and
views
of
the
authors
and
do
not
reflect
IBS@SIMSR
views.
3
4. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Obituary:
Steve
Jobs
The
Man
Who
re-‐established
the
vitality
of
the
The
success
of
Macbook,
iPhone,
iPad
,
all
recite
forbidden
Fruit!
the
story
of
the
much
glorified
Apple
Inc.
and
the
man
behind
it.
The
legend
who
miniaturized
the
We
as
management
students
try
to
learn
business
world
and
brought
it
into
our
palms.
What
would
in
the
world,
but
rarely
does
the
world
produce
an
you
like
to
call
him?
An
Inventor?
An
Innovator?
individual,
who
gives
business
so
much
to
learn
Maybe
a
blend
of
both!
from.
Forbes
magazine
laid
down
the
top
ten
lessons
Steve
Jobs,
CEO
of
Apple
Inc.
and
one
of
the
that
Steve
Jobs
Taught
us.
To
emphasize
on
of
one
greatest
mastermind
and
innovators
of
all
time,
them,
that
is
quite
relevant
in
terms
of
passed
away
on
6th
October
2011,
at
the
age
of
56,
management
education
is:
To
create
the
future,
after
a
long
battle
with
cancer.
His
unsurpassable
you
can’t
do
it
through
focus
groups:
“Even,
the
contribution
to
personal
technology
and
more
consumer
today
does
not
know
what
he
wants.
broadly
to
the
innovation
revolution,
has
not
only
Innovate
for
him
and
give
him
something,
he
left
an
indelible
mark
on
our
society,
but
has
also
would
crave
for”.
The
success
of
iPod,
iPhone
and
made
him
immortal
and
forever
ideated.
He
iPad
depicts
it
so
perfectly.
possessed
great
business
acumen
and
at
the
same
time
despite
his
greatness,
also
taught
us
that
he
is
Over
a
million
people
from
all
over
the
world
have
just
another
man.
His
speeches,
his
philosophies
shared
their
memories,
thoughts,
and
feelings
and
more
informally
his
attire,
all
marked
the
about
Steve.
One
thing
they
all
have
in
common,
greatness
of
the
man
and
his
humility.
including
his
friends,
colleagues
and
owners
of
Apple
products,
is
how
they’ve
been
touched
by
Jobs
was
a
perfectionist,
attention
to
details
and
his
passion
and
creativity
minuteness
being
his
forte.
No
wonder,
today
we
so
conveniently
use
the
i-‐prefixed
devices,
the
With
the
last
inspiring
words
from
the
legend
most
swanky
hand
and
palm
pieces.
Steve
Jobs
himself,
who
shall
remain
alive
in
everyone’s
heart
started
his
career
in
1977
with
his
friend
and
Apple
not
just
for
being
a
technological
revolutionary
but
co-‐founder
Steve
Wozniak,
by
launching
the
first
for
being
“Steve
Jobs”
successful
mass-‐market
PC-‐
Apple
II.
There
onwards,
he
bought
and
lead
Pixar
Animation
“Your
time
is
limited,
so
don't
waste
it
living
Studios
till
the
mid
nineties.
The
company
set
an
someone
else's
life.
Don't
be
trapped
by
dogma
—
epitome
of
cutting
edge
technology
that
animation
which
is
living
with
the
results
of
other
people's
had
ever
known.
thinking.
Don't
let
the
noise
of
others'
opinions
drown
out
your
own
inner
voice.
And
most
Technology
was
further
revolutionized
when
Steve
important,
have
the
courage
to
follow
your
heart
introduced
iPod,
the
ultimate
boon
to
music;
with
and
intuition.
They
somehow
already
know
what
the
introduction
of
iPod,
music
aid
like
CDs,
Tapes,
you
truly
want
to
become.
Everything
else
is
LP
records
and
Walkman,
all
became
a
passé.
secondary.”
-‐Nikita
Agarwal
(PGDM-‐IB
2011-‐13)
4
5. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Taming
the
recession
-‐Nikunj
Garg
(MMS-‐B
2011-‐13)
The
signs
of
an
imminent
recession
are
all
around
For
most
companies,
the
majority
of
funds
us.
The
spill
over
from
the
subprime
mortgage
crisis
originally
earmarked
towards
industry
events
and
is
weakening
both
consumer
confidence
and
tradeshows
has
either
migrated
to
other
consumer
spending—much
of
it
on
credit—that
has
marketing
programs
or
simply
been
eliminated.
been
buoying
the
US
economy.
While
traditional
advertising
programs
and
The
dismal
state
of
the
economy
is
causing
industry
trade
events
may
be
on
the
decline
in
companies
everywhere
to
reassess
their
marketing
terms
of
marketing
investment,
a
number
of
other
budgets
to
ensure
that
they're
allocating
their
channels
and
programs
are
gathering
steam.
A
limited
marketing
funds
in
the
most
productive
good
example
is
social
media.
Today
a
growing
ways
possible.
number
of
companies
are
deploying
technology-‐
enabled
solutions
for
leveraging
word
of
mouth
as
In
many
cases,
this
means
curtailing,
postponing
or
a
way
to
drive
marketing
improvement.
even
eliminating
previously
planned
marketing
expenditures.
By
turning
consumers
into
brand
advocates
and
building
market
awareness
in
an
exponential
In
other
cases,
companies
are
actually
investing
manner,
social
media
marketing
can
be
a
cost-‐
more
aggressively
in
various
types
of
marketing
effective
way
for
a
company
to
achieve
some
of
its
programs,
sensing
an
opportunity
to
capitalize
on
key
marketing
objectives.
the
grim
economic
headlines.
Companies
are
paying
close
attention
to
online
The
recession
is
also
causing
some
marketers
to
marketing,
in
general.
This
category
is
broad
in
rethink
their
trade
promotions.
Consumer
brand
scope,
encompassing
everything
from
search
companies
typically
spend
upwards
of
15%
of
engine
marketing
to
Web-‐based
promotions.
revenue
on
trade
promotions,
which
involve
temporary
price
cuts
to
encourage
reseller
channels
Mobile
marketing
to
reduce
retail
prices
for
consumers.
Through
a
confluence
of
technologies
and
standards
related
to
mobile
devices,
including
5
6. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Through
a
confluence
of
technologies
and
standards
related
to
mobile
devices,
including
third-‐generation
(3G)
networks
and
data
Did
you
know??
packages,
the
mobile
Internet
has
now
reached
a
critical
mass.
As
more
consumer
brands
are
discovering,
the
mobile
Internet
can
now
enable
large-‐scale
mobile
marketing
activities
capable
of
engaging
consumers
in
unprecedented
(and
largely
affordable)
Treaty of Rome - An
ways.
international agreement that
led to the founding of the
Reassessing
Marketing
Messages
and
Pricing
Tactics
European Economic
Community on 1 January
Companies
have
reassessed
their
marketing
and
advertising
1958. It was signed on 25
messages
in
the
context
of
their
cash-‐strapped
buying
audiences
March 1957 by Belgium,
and
modified
these
messages
to
better
resonate
with
consumers
France, Italy, Luxembourg,
who,
in
many
cases,
have
become
increasingly
risk
averse
and
price
the Netherlands and West
sensitive.
Germany. The word Economic
was deleted from the treaty's
Based
on
their
demand
forecasts,
companies
are
taking
steps
to
name by the Maastricht
eliminate
poorly
performing
products
and
solutions,
shifting
funds
Treaty in 1993, and the treaty
to
product
lines
that
seem
better
suited
to
weathering
a
recession
was repackaged as the Treaty
and
even
introducing
new
products
and
services
that
meet
the
on the functioning of the
needs
of
consumers
on
an
austerity
plan.
European Union on the entry
into force of the Treaty of
Lisbon in 2009.
To
that
point,
companies
are
also
modifying
their
pricing
tactics,
including
engaging
in
temporary
price
promotions
and
reduced
thresholds
for
quantity
discounts,
in
order
to
achieve
their
marketing
and
sales
objectives.
Some
companies
are
simply
selling
fewer
products
for
the
same
price.
Smoot Hawley Tariff
Act Tariff Act of 1930,
Companies
should
bear
following
factors
in
mind
when
making
otherwise known as the
Smootñ Hawley Tariff was
their
marketing
plans.
signed into law on June 17,
1930. It raised U.S. tariffs on
1.
Research
the
customer.
Instead
of
cutting
the
market
research
over 20,000 imported goods to
budget,
you
need
to
know
more
than
ever
how
consumers
are
record levels. After the 1929
redefining
value
and
responding
to
the
recession.
Consumers
take
stock market crash,
more
time
searching
for
durable
goods
and
negotiate
harder
at
the
unemployment never reached
point
of
sale.
They
are
more
willing
to
postpone
purchases,
trade
double digits in any of the 12
down,
or
buy
less.
months following that event,
peaking at 9 percent, then
drifted downwards until it
2.
Focus
on
family
values.
When
economic
hard
times
loom,
we
reached 6.3 percent in June
tend
to
retreat
to
our
village.
Look
for
cosy
hearth-‐and-‐home.
1930. Then the federal
Family
scenes
in
advertising
should
replace
images
of
extreme
government made its first
sports,
adventure
and
rugged
individualism.
major intervention in the
economy with the Smoot-
3.
Maintain
marketing
spending.
This
is
not
the
time
to
cut
Hawley tariff
advertising.
It
is
well
documented
that
brands
that
increase
6
7. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
advertising
during
a
recession,
when
competitors
You
do
not
necessarily
have
to
cut
list
prices
are
cutting
back,
can
improve
market
share
and
but
you
may
need
to
offer
more
temporary
return
on
investment
at
lower
cost
than
during
price
promotions,
reduce
thresholds
for
good
economic
times.
Brands
with
deep
pockets
quantity
discounts,
extend
credit
to
long-‐
may
be
able
to
negotiate
favourable
advertising
standing
customers
and
price
smaller
pack
sizes
rates
and
lock
them
in
for
several
years.
more
aggressively.
In
tough
times,
price
cuts
attract
more
consumer
support
than
4.
Support
distributors.
In
uncertain
times,
no
one
promotions
such
as
sweepstakes
and
mail-‐in
wants
to
tie
up
working
capital
in
excess
offers.
inventories.
Early-‐buy
allowances,
extended
financing
and
generous
return
policies
motivate
6.
Stress
market
share.
Companies
such
as
distributors
to
stock
your
full
product
line.
Wal-‐Mart
and
Southwest
Airlines,
with
strong
However,
now
may
be
the
time
to
drop
your
positions
and
the
most
productive
cost
weaker
distributors
and
upgrade
your
sales
force
structures
in
their
industries,
can
expect
to
gain
by
recruiting
those
sacked
by
other
companies.
market
share.
Other
companies
with
healthy
balance
sheets
can
do
so
by
acquiring
weak
5.
Adjust
pricing
tactics.
Customers
will
be
competitors.
shopping
around
for
the
best
deals.
In
the
end,
companies
have
no
choice
but
to
strive
for
higher
levels
of
efficiency
and
effectiveness
across
all
aspects
of
their
marketing
operations
in
the
face
of
persistently
weak
spending
by
consumers
and
businesses.
“ By turning consumers into brand advocates, social media marketing can
be a cost-effective way for a company to achieve some of its key
marketing objectives. “
7
8. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Electric-‐Car
Industry
–
The
road
ahead
-‐Sahil
Patel
(PGDM-‐IB
2011-‐13)
Demand
for
Crude
Oil
is
increasing
along
with
the
number
of
Cars
on
road
making
any
economy
highly
dependent
on
Foreign
Oil.
Thus,
today,
all
the
major
economies
want
to
shift
their
transportation
sector
from
internal
combustion
engine
(ICE)-‐based
vehicles
to
fully
electric
vehicles.
Now,
we
will
see
how
some
major
economies
of
the
world
have
taken
a
few
but
vital
steps
in
this
direction.
US
The
American
transportation
industry
today
faces
a
perfect
storm
of
economic,
geopolitical,
and
environmental
concerns
that
threatens
its
future.
capacity
that
will
be
equal
to
1
million
units
of
The
decline
of
the
US
automobile
industry,
the
battery-‐powered
automobiles
in
operation.
By
country’s
increasing
dependence
on
foreign
oil
achieving
this,
they
will
also
boost
their
own
imports,
and
global
warming
have
spurred
the
battery-‐export
opportunities.
Moreover,
Obama
Administration
to
publicly
commit
the
Municipal
governments
have
offered
up
to
country
to
developing
alternative
transportation
$8,800
in
subsidies
to
taxi
fleets
and
local
methods
and
alternative
energy
sources
as
a
way
of
governments
for
hybrid
and
all-‐electric
combating
these
problems
and
setting
a
new
path
vehicles.
for
the
US
transportation
sector
and
economy
as
a
Rest
of
the
World
whole.
Governments
from
rest
of
the
world
too
have
The
U.S.
government
in
2008
began
to
talk
about
the
shown
keen
interest
in
building
Electric-‐Car
energy
crisis
in
earnest
in
response
to
both
Industry.
In
Israel,
for
example,
the
skyrocketing
gasoline
prices
and
a
national
mood
government
is
working
with
Silicon
Valley
that
favoured
decreasing
the
U.S.’s
dependence
on
start-‐up
“Project
Better
Place”
and
established
foreign
oil.
When
President
Barack
Obama
entered
car
companies
Renault
and
Nissan
to
bring
the
office
in
2009,
he
made
energy
independence
one
of
electric
car
to
Israel,
and
has
committed
to
his
core
issues,
and
his
administration
allocated
offer
substantial
tax
incentives
to
consumers
billions
of
dollars
to
promote
electric
vehicle
who
would
buy
electric
cars.
Denmark
has
also
manufacturing
and
development
of
advanced
worked
with
Renault
and
Nissan,
and
with
batteries
for
those
vehicles.
“Project
Better
Place”,
to
build
a
country-‐wide
China
electric
car
network
with
20,000
recharging
stations
powered
by
wind
turbines.
In
Japan,
The
Chinese
government,
in
2008,
wanted
to
turn
has
pledged
to
install
power
outlets
the
country
into
a
global
leader
in
hybrid
and
electric
throughout
public
areas
in
certain
cities
and
cars
within
three
years.
Within
that
period,
each
of
towns,
and
has
planned
to
encourage
private
the
country’s
passenger
vehicle-‐makers
would
be
companies
to
give
discounts
on
loans,
required
to
have
a
licensed
new
energy
vehicle
on
insurance
and
parking
to
electric
car
owners.
the
market.
Today,
China
wants
to
hit
battery
9. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
All
the
countries
discussed
above
are
encouraging
the
Electric
Car
Industry
not
only
to
avoid
becoming
energy
dependent
on
a
Did
you
know??
foreign
country
but
also
to
keep
their
carbon
footprint
under
check.
Lessons
for
India
Chicago Board of Trade
(CBOT).
In
light
of
this
state
of
affairs
of
the
emerging
global
electric
car
industry,
when
it
comes
to
India,
the
account
is
almost
NIL.
Though
The CBOT, established in 1848, is
in
India,
there
are
a
lot
of
issues
that
doubt
the
feasibility
of
the
the world's oldest derivatives
electric
car
industry,
we
can’t
just
keep
quiet.
Major
incumbent
(futures and futures-options)
automakers,
such
as
Nissan
and
Renault,
have
secured
internal
exchange. Futures and options on
agricultural (wheat, corn, oats,
access
to
critical
new
battery
technology
as
well
as
cooperative
etc.), financial (U.S. Treasury
agreements
with
national,
regional
and
local
governments
in
bonds and notes, etc.), and index
different
parts
of
the
world.
And
now,
it’s
time
for
the
Indian
(Dow Jones Industrial Average)
Government
to
encourage
such
private
Automobile
Manufacturers
instruments trade on the CBOT.
to
invest
into
Electric-‐Car
Industry
to
gain
the
dual
merits
associated
to
it.
________________________
German Customs Union One
of the first economic blocs was the
German Customs
Union(Zollverein) initiated in
1834, formed on the basis of the
German Confederation and
subsequently German Empire from
“Today all the major economies want to shift
1871. Surges of trade bloc
their transportation sector from internal
formation were seen in the 1960s
and 1970s, as well as in the 1990s
combustion engine (ICE)-based vehicles to after the collapse of Communism.
fully electric vehicles. “ By 1997, more than 50% of all
world commerce was conducted
under the auspices of regional
trade blocs
9
10. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
A
NEW
CHAPTER
IN
INDO-‐IRAN
TIES
-‐Pratichi
Swain
(PGDM-‐IB
2011-‐13)
The
Wikileaks
recently
revealed
that
Indian
meant
Moscow
influenced
India’s
foreign
policy.
Prime
Minister
Dr.
Manmohan
Singh
had
The
Islamic
revolution
in
1979
saw
the
ouster
of
rejected
previous
requests
either
to
visit
Tehran
the
US
backed
Shah
Dynasty
rule
and
more
or
for
Iranian
President
Mahmoud
Ahmadinejad
importantly
brought
India
and
the
new
to
visit
India
as
the
United
Progressive
Alliance
theocratic
government
closer.
There
have
been
government
was
anxious
not
to
ruffle
American
many
high
level
visits
from
both
sides
with
the
feathers
at
the
height
of
the
U.S.-‐led
campaign
highlight
being
President
Mohammad
Khatami’s
against
Iran
over
its
nuclear
programme.
So
visit
to
India
in
2003,
when
he
was
also
the
Chief
when
Dr.
Singh
met
the
Iran
President
on
the
Guest
at
the
Republic
Day
function.
But
in
recent
sidelines
of
his
visit
to
the
UN
in
September
this
years
it
has
been
a
seesaw
relationship
with
year
and
accepted
his
invitation
to
visit
Tehran,
it
Iran.
India’s
vote
against
Iran’s
alleged
nuclear
raised
a
few
eyebrows
indicating
a
substantial
weapons
programme
in
IAEA
in
2005
and
also
in
shift
in
India’s
foreign
policy.
The
cause
of
the
the
United
Nations
Security
Council
in
early
2011
shift
can
be
basically
attributed
to
a
host
of
led
to
new
lows
in
bilateral
ties.
Many
believed
various
reasons,
none
more
important
than
that
the
vote
against
Iran
at
IAEA
was
coerced
regional
stability
and
the
need
to
have
a
by
USA
in
lieu
of
the
lucrative
civilian
nuclear
dependable
source
of
fuel
to
meet
the
rising
deal
for
India.
This
plan
of
action
backfired
for
energy
demand.
India
and
Iran
did
not
enjoy
a
India
mainly
because
of
the
recent
nuclear
great
relationship
till
the
late
1970’s
mainly
due
tragedy
in
Japan,
leading
to
wide
scale
protests
to
the
Cold
War.
The
Shah
Dynasty
regime
in
Iran
by
locals
at
the
site
of
new
nuclear
plants
in
was
backed
by
Washington
and
India’s
proclivity
India
that
forced
the
government
to
go
slow
on
to
the
erstwhile
Soviet
Union
during
those
days
nuclear
energy.
10
11. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Also,
the
dependence
on
import
of
nuclear
fuel
dependency
on
oil
and
gas.
Presently
domestic
from
some
reluctant
member
countries
of
resources
supply
70%
of
India’s
energy
needs,
but
Nuclear
Suppliers
Group
like
Australia
and
New
as
consumption
rises,
dependence
on
foreign
Zealand
does
not
augur
well
for
India.
The
Indian
sources
would
increase
further.
Recent
discovery
Government
has
by
now
realized
that
the
aim
of
of
natural
gas
in
India
won’t
be
enough
to
keep
replacing
hydrocarbons
with
nuclear
energy
to
pace
with
the
growing
requirement
and
this
is
meet
the
energy
requirements
is
still
a
distant
where
Iran
can
be
more
than
a
normal
trade
dream
and
India
has
again
fallen
back
to
the
partner
to
India.
Iran
is
OPEC’s
second
largest
oil
traditional
suppliers
of
hydrocarbons.
Thus,
this
producer
and
has
10
percent
of
the
world’s
gesture
by
the
Indian
PM
can
be
seen
as
a
way
to
proven
oil
reserves.
It
is
also
the
second
largest
woo
Iran
for
India’s
greater
gain.
gas
reserves
that
are
about
16
percent
of
the
world’s
proven
gas
reserves.
Iran’s
current
India’s
trade
volume
with
Iran
is
not
as
significant
production
of
gas
is
very
low
in
comparison
to
the
compared
with
USA,
EU
and
China.
Iran
reserves
it
possesses
as
the
gas
fields
are
yet
to
accounted
for
around
1.1%
of
India’s
total
be
tapped,
giving
Indian
companies
an
exports
and
3%
of
imports
in
2010-‐11.
India’s
opportunity
to
reap
the
benefits
by
investing
in
exports
to
Iran
include
petroleum
products,
rice,
the
Iranian
gas
sector.
With
such
prospects
lying
machinery
&
instruments,
manufactures
of
ahead,
Dr
Manmohan
Singh’s
visit
to
Tehran
will
metals,
primary
and
semi
finished
iron
&
steel,
act
as
a
catalyst
to
improve
bilateral
trade.
pharmaceuticals,
chemicals,
processed
minerals,
manmade
yarn
&
fabrics,
tea,
chemicals,
rubber
Along
with
energy
dependence,
one
more
factor
manufactured
products,
etc.
But
what
is
that
drives
India
to
have
a
strong
and
vibrant
noteworthy
is
that
almost
the
entire
import
from
relationship
with
Iran
is
regional
stability.
India
Iran
is
hydrocarbon.
As
per
the
latest
report
of
can
also
use
Iran
for
an
easier
route
to
access
the
Ministry
of
Commerce,
petroleum
alone
these
parts
of
the
world
not
only
for
trade
but
for
contributes
around
a
quarter
of
India’s
total
military
purpose
as
well.
Add
to
it
the
huge
gas
imports.
Iran
is
the
second
largest
exporter
of
oil
reserves
discovered
in
Central
Asia
which
gives
and
natural
gas
to
India
after
Saudi
Arabia.
Iran’s
India
all
the
more
reasons
for
stronger
ties.
The
contribution
has
decreased
from
nearly
20
development
of
Chabahar
Port
on
the
south-‐
percent
of
India’s
total
petroleum
imports
to
eastern
shore
of
Iran
is
being
done
by
India
as
it
is
around
12
percent
in
last
2
years.
This
can
be
the
nearest
point
to
Iran
from
its
own
coastline.
It
owed
to
the
stringent
restrictions
imposed
by
can
be
seen
as
a
giant
step
towards
making
Iran
USA
and
EU
even
though
Iran’s
petroleum
sector
an
important
trade
partner.
Iran
can
also
hope
to
has
been
kept
out
of
UN
sanctions.
get
Indian
investments
in
Iran’s
untapped
gas
sector.
Strong
bilateral
ties
can
also
be
used
to
India’s
policymakers
are
systematically
looking
reap
mutual
benefits
in
multilateral
organizations
for
the
widest
possible
set
of
alternatives
to
meet
like
WTO
and
Organisation
of
Islamic
Conference
their
growing
energy
needs.
India
has
huge
coal
(OIC).With
so
much
at
stake,
PM
Singh’s
proposed
reserves,
but
oil
and
gas
reserves
are
modest.
visit
to
Iran
would
be
closely
followed
by
many
Moreover
attempts
to
increase
nuclear
power
agencies
and
governments
across
the
world.
It
production
are
facing
humongous
hurdles
definitely
promises
to
open
a
new
chapter
in
indicating
that
there
would
be
a
greater
Indo-‐Iran
ties.
11
12. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Islamic
Banking
-‐Shefali
Shah
(PGDM-‐IB
2011-‐13)
Modern
banking
was
introduced
in
the
19th
century
the
practiced
Middle
Ages,
fostering
trade
and
in
the
Muslim
countries.
At
this
time
the
Muslim
business
activities.
The
origin
of
modern
Islamic
countries
were
politically
and
economically
not
very
banks
can
be
traced
back
to
the
very
birth
of
stable
and
thus
major
banks
set
up
only
in
Islam
when
the
Prophet
himself
acted
as
an
commercial
capitals
of
these
countries.
The
agent
for
his
wife’s
trading
operations
and
the
business
of
these
modern
banks
was
restricted
to
concept
of
interest
found
very
little
application
export
and
import
financing
and
thus
not
catering
in
day-‐to-‐day
transactions.
to
the
local
masses.
The
local
trading
community
avoided
the
“foreign”
banks
both
for
nationalistic
Islamic
Banks
in
the
20th
Century
as
well
as
religious
reasons.
As
time
went
by,
it
In
the
1960’s,
Muslim
thinkers
began
to
explore
became
difficult
to
not
make
use
of
the
commercial
ways
to
organize
commercial
banking
on
the
banks.
Their
only
involvement
would
be
in
terms
of
principles
of
Islam.
The
first
Islamic
interest-‐free
current
accounts
or
money
transfers
as
borrowings
bank
came
into
being
in
Egypt
in
Mit
Ghamr,
in
from
or
deposits
in
the
bank
were
strictly
avoided
1963.
Mit
Ghamr
was
a
rural
area
where
people
so
as
to
keep
away
from
interest,
which
was
followed
Islam
and
thus
did
not
place
their
prohibited
by
the
Islamic
religion.
savings
in
any
bank,
knowing
that
interest
was
The
practice
of
these
Muslim
countries
was
to
have
forbidden
in
Islam.
interest
free
banking,
as
it
was
in
accordance
with
This
project
was
successful
as
the
deposits
the
principles
of
the
Shariah
(Islamic
rulings)
and
its
increased
in
the
period
between
1963-‐1966.
The
practical
application
through
the
development
of
bank
was
cautious
and
had
rejected
about
60%
Islamic
economies.
Islamic
banking
has
the
same
of
the
loan
applications
and
the
default
ratio
of
purpose
as
conventional
banking,
except
that
it
non-‐payment
was
zero.
operates
in
accordance
with
the
rules
of
Shariah.
Shariah
prohibits
the
payment
or
acceptance
of
interest
charge
for
lending
and
accepting
money,
as
well
as
carrying
out
trade
and
other
activities
that
provide
goods
or
services
considered
contrary
to
its
principles.
The
main
source
of
the
Shariah
is
the
Quran
and
the
recorded
sayings
and
actions
of
Prophet
Muhammad
the
Hadith.
Many
of
these
principles
upon
which
Islamic
banking
is
based
are
commonly
accepted
all
over
the
world,
for
centuries
rather
than
decades.
It
is
evident
that
Islamic
Banking
was
predominantly
in
the
Muslim
world
through
12
13. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
But
the
project
was
eventually
abandoned
for
Investment
Account:
Investment
deposits
are
political
reasons,
but
it
showed
that
commercial
accepted
for
a
fixed
or
unlimited
period
of
time
banking
can
be
organized
on
an
interest-‐free
basis
and
the
investors
agree
in
advance
to
share
the
also.
profit
(or
loss)
in
a
given
proportion
with
the
bank.
Capital
is
not
guaranteed.
Deposit
Accounts
Islamic
banking
is
a
very
young
concept
and
has
All
Islamic
banks
have
three
kinds
of
deposit
been
accepted
not
only
in
the
Muslim
countries
accounts:
Current,
Savings
and
Investment.
but
also
in
many
non-‐Muslim
countries.
Despite
Current
Account:
Current
or
demand
deposit
the
successful
acceptance
there
are
problems.
accounts
are
virtually
the
same
as
in
all
These
problems
are
mainly
in
the
area
of
conventional
banks.
A
deposit
is
guaranteed.
financing.
Savings
Account:
Savings
deposit
accounts
With
only
minor
changes
in
their
practices,
Islamic
operate
in
different
ways.
In
some
banks
banks
can
get
rid
of
all
their
cumbersome,
depositors
allow
banks
to
use
their
money
but
burdensome
and
sometimes
doubtful
forms
of
they
obtain
a
guarantee
of
getting
the
full
amount
financing
and
offer
a
clean
and
efficient
interest-‐
back
from
the
bank.
Banks
adopt
several
methods
free
banking.
All
the
necessary
ingredients
are
of
inducing
their
clients
to
deposit
with
them,
but
already
there.
The
modified
system
will
make
use
no
profit
is
promised.
In
others,
saving
accounts
of
only
two
forms
of
financing
-‐-‐
loans
with
a
are
treated
as
investment
accounts
but
with
less
service
charge
and
participatory
financing
-‐-‐
both
stringent
conditions
as
to
withdrawals
and
of
which
are
fully
accepted
by
all
Muslim
writers
minimum
balance.
Capital
is
not
guaranteed
but
on
the
subject.
the
banks
take
care
to
invest
money
from
such
Such
a
system
will
offer
an
effective
banking
accounts
in
relatively
risk
free
short-‐term
system
where
Islamic
banking
is
obligatory
and
a
projects.
As
such
lower
profit
rates
are
expected
powerful
alternative
to
conventional
banking
and
that
too
only
on
a
portion
of
the
average
where
both
co-‐exist.
Additionally,
such
a
system
minimum
balance
on
the
grounds
that
a
high
level
will
have
no
problem
in
obtaining
authorization
to
of
reserves
needs
to
be
kept
at
all
times
to
meet
operate
in
non-‐Muslim
countries.
withdrawal
demands.
Participatory
financing
is
a
unique
feature
of
Islamic
banking,
and
can
offer
responsible
financing
to
socially
and
economically
relevant
development
projects.
This
is
an
additional
service
Islamic
banks
offer,
over
and
above
the
traditional
services
provided
by
conventional
commercial
banks.
Source:
http://www.islamic-‐banking.com
13
14. e-‐GlobuzZ
Vol
II
Issue
II
Oct-‐Dec’11
Battling
the
skies
–
The
success
of
AirAsia
-‐Prerna
Makhijani(PGDM
IB
2011-‐13)
Undoubtedly,
this
makes
AirAsia
the
largest
low-‐
fare
no-‐frills
airline
in
Asia,
with
operation
in
25
countries
and
more
than
400
destinations.
The
Growth
Story
Tony
Fernandes,
CEO
of
AirAsia
bought
the
company
for
a
token
sum
of
one
ringgit
equivalent
to
US$
0.26
at
that
time
with
US$
11
million
worth
of
debts
in
2001.
Within
a
year,
Tony
turned
the
fortune
of
the
airlines
by
launching
new
routes
from
its
hub
and
at
extremely
low
promotional
prices.
Rest
is
just
history.
AirAsia’s
business
model
is
very
similar
to
Kingfisher
airlines
just
got
a
taste
of
the
storm
Southwest’s
model
of
quick
turnarounds
and
low-‐
brewing
up
in
the
Indian
aviation
skies
recently.
cost
fares.
This
has
been
seen
as
a
“Blue
Ocean
Their
complains
range
from
exorbitant
jet-‐fuel
Strategy”
by
industry
experts.
Blue
Ocean
strategy
taxes,
or
denial
to
buy
its
fuel
elsewhere
for
less
to
is
all
about
the
high
growth
and
profits
an
the
ban
on
foreign
airlines
investing
in
India's
organization
can
generate
by
creating
new
aviation
industry.
Kingfisher
is
looking
to
demand
in
an
uncontested
market
space,
or
a
restructure
the
company's
US$1.3
billion
debt
load
"Blue
Ocean",
than
by
competing
head-‐to-‐head
with
the
support
of
a
strategic
investor.
with
other
suppliers
for
known
customers
in
an
existing
industry.
This
is
exactly
what
AirAsia
has
Well
even
if
all
the
above
problems
for
Kingfisher
done
for
itself,
as
they
have
created
Asian
airlines
are
resolved
there
is
a
lot
they
could
learn
customers
for
whom
transportation
need
not
be
from
their
Malaysian
distant
cousin
–
AirAsia.
an
exotic
experience.
With
the
world
coming
closer,
people
want
to
explore
the
world.
Asians
To
begin
with,
AirAsia
has
the
world’s
lowest
unit
particularly
want
to
eat,
shop
and
travel.
This
is
cost
of
US$
0.023
per
available
seat
kilometer
(the
exactly
what
they
are
offered
by
AirAsia;
budget
figure
being
50%
higher
for
Indian
budget
carriers)
travel
and
lodging.
and
a
passenger
break-‐even
load
factor
of
52%.
It
has
hedged
100%
of
its
fuel
requirements
for
the
As
for
the
promoter
of
the
company,
Tony,
he
has
next
three
years,
achieves
an
aircraft
turnaround
his
game
in
place
as
he
talks
about
his
strategy.
time
of
25
minutes,
has
a
crew
productivity
level
The
company
plans
to
be
the
largest
player
in
that
is
triple
that
of
Malaysia
Airlines
and
achieves
low-‐cost
category
on
home
turf
and
then
go
on
to
an
average
aircraft
utilization
rate
of
13
hours
a
expand
in
ASEAN.
With
its
long
distance
carrier
day
for
domestic
and
17-‐18
hours
a
day
for
its
long
AirAsiaX,
it
seems
to
be
already
eating
into
haul
flights.
China’s
and
India’s
market
share.
14
15. e-‐GlobuzZ
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Oct-‐Dec’11
AirAsia's
LCC
model
is
borrowed
from
Ryanair
and
They
have
this
cost
advantage
because
they
like
the
Dublin-‐based
airline,
AirAsia
too
has
an
employ
just
68
people
per
aircraft,
which
is
again
"ancillary
income"
component
in
its
earnings.
So
amongst
the
lowest
in
the
world.
The
cabin
crew
only
7
kg
hand
baggage
is
free
and
the
extra
often
multitasks
to
clean
the
aircraft
and
handle
charge
starts
at
US$
10
for
up
to
15
kg.
A
the
boarding.
AirAsia
is
increasingly
using
wide-‐
preferred
seat
comes
for
an
extra
charge.
bodied
aircraft
which
offer
more
seats
and
burn
Ancillary
income
earned
per
passenger
works
out
less
fuel
than
narrow-‐bodied
aircraft
-‐
the
current
to
US$
1.2.
Advantages
for
passengers
are
no
fuel
favourite
of
Indian
carriers.
It
runs
its
own
surcharge
(until
May
2011)
and
a
30-‐40
%
academy
to
train
pilots,
unlike
Indian
carriers
who
discount
on
meal
coupons,
baggage
charges,
etc
if
poach
from
each
other
and
drive
up
salaries
to
paid
online
while
booking.
exorbitant
levels
in
the
bargain.
The
company
also
does
aggressive
branding
The
company
also
plans
to
keep
the
budget
exercises
and
public
relations.
They
have
invested
traveler
happy,
by
offering
Airbus
A-‐330
flights
a
lot
of
money
in
Manchester
United
football
club
from
Delhi
and
Mumbai,
12
premium
class
seats
and
motor
racing
team
Williams.
The
company
with
flat
beds,
but
the
fares
are
60
to
70
per
cent
believes
in
the
long
term
return
of
branding
and
lower
than
business
class
of
a
full-‐service
carrier.
plans
to
continue
to
do
so
in
future
as
well.
The
Future
for
AirAsia
For
future,
AirAsia
plans
to
connect
smaller
cities
and
towns
in
India
by
leveraging
on
under-‐utilized
AirAsiaX,
the
long-‐haul
budget
carrier
of
the
group
airports
and
under-‐served
routes
in
the
country.
now
has
expansion
plans
for
the
Indian
and
They
believe
in
a
volume-‐led
business
and
aspire
Chinese
skies.
to
play
the
game
to
perfection
with
27
million
AirAsia
entered
the
Indian
market
by
launching
a
passengers
aboard
this
year.
daily
Airbus
A-‐330
flight
from
Delhi
to
Kuala
Lumpur
at
a
basic
fare
of,
hold
your
breath,
just
Re
1
for
two
days
(excluding
taxes
and
fuel
surcharges).
It
has
embarked
on
a
carpet-‐bombing
strategy
in
India
since
then.
Its
costs
are
far
lower
than
any
of
the
Indian
low-‐cost
carriers.
15
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Africa
-‐
Continent
in
Focus
-‐Kaustav
Ghosh
(PGDM-‐IB
2011-‐13)
2) Africa
possesses
40%
of
world’s
gold
ore
deposits.
3) FDI
in
Africa
has
increased
from
$9
billion
in
2000
to
$16
billion
in
2008.
4) Ivory
Coast
is
the
world’s
largest
producer
of
cocoa.
5) Africa’s
collective
GDP
in
2008
was
1.6
trillion
dollars,
roughly
equal
to
Brazil
or
Russia’s
6) 10%
of
world’s
oil
reserves
are
in
Africa
“KE
NAKO”
–
IT
IS
TIME
Yes,
Africa
has
come
a
long
way
from
being
just
a
nation
of
wild
animals
and
place
infested
with
Rewind
for
a
few
seconds
to
the
good
old
days
of
civil
wars.
In
the
past
decade,
growth
in
Africa
90’s
and
early
2000
-‐the
time
when
Discovery
has
invited
much
attention
by
researchers
and
channel
used
to
be
narrated
in
English.
A
global
leaders
all
around
the
world.
In
a
rather
documentary
on
Africa
will
generally
conjure
one
eye-‐opening
report
released
by
Mckinsey
MGI,
common
image
in
everyone’s
minds
–
a
huge
over
the
past
decade,
Africa’s
real
GDP
grew
by
barren
and
parched
land,
a
grassland
visible
far
4.7%
a
year,
on
average—twice
the
pace
of
its
away
in
the
horizon,
a
cheetah
trying
to
catch
its
growth
in
the
1980s
and
1990s.
The
surge
cut
prey
or
a
herd
of
wild
African
elephants
trying
to
across
nations
and
sectors.
The
continent
is
cross
a
river.
Basically
the
words
“Africa”
and
among
the
fastest-‐expanding
economic
regions
“Forest
Safari”
were
spot-‐on
synonymous.
All
that
today.
In
fact,
Africa
and
Asia
(excluding
Japan)
the
word
Africa
meant
was
wild
animals,
safari
or
were
the
only
continents
that
grew
during
the
the
Sahara.
As
far
as
politics
was
concerned,
Africa
recent
global
recession.
Though
Africa’s
growth
was
associated
JUST
with
bloody
civil
wars,
pirates
rate
slowed
to
2%
in
2009,
it
bounced
back
to
(read
Somalia)
–
a
view
shared
not
just
by
the
kids
nearly
5%
in
2010,
and
in
2011
it
is
likely
to
but
also
by
most
of
the
adults
outside
Africa.
The
touch
5.2%.
only
positive
thing
most
would
recall
knowing
about
Africa,
just
10
years
back,
would
be
Nelson
So,
is
this
growth
a
one-‐off
case
or
does
it
have
Mandela
or
sometimes,
Kofi
Annan.
any
authenticity
for
sustainability?
After
all,
in
the
1970’s
when
there
was
an
oil
boom,
the
But
contrast
these
with
the
following
economy
did
well.
After
the
oil
prices
went
information/perception
about
present
Africa.
down,
Africa
was
yet
again
back
in
doldrums!!
1) Africa
has
80%
to
90%
of
the
world’s
chromium
But
this
time
around,
internal
and
not
just
and
platinum
deposits.
external
(contrary
to
earlier
time)
factors
are
16