Reina Kurtani’s Blog Failed Partnership between Volkswagen and Suzuki narrates the incident how the alliance between two automobile giants of the world met its fate. The Japanese and Germans formed this alliance for mutual benefit but this relationship didn’t last as the German partner denied Suzuki to share its valuable hybrid technology. Both these automobile companies made a partnership where Suzuki would get access to fuel efficient and technological know how of Volkswagen in return of its 19.9% stake.

http://thinkbusiness.nus.edu/articles/item/312-the-vw-suzuki-divorce-beware-the-perfect-partner

The denial by Volkswagen created a buzz in the business world as one of the most anticipated partnerships of all time died out even before getting benefited by each other substantially. As a result, Suzuki will buy back its share and will search for another loyal partner like Maruti in India. Volkswagen has lost its credibility in terms of business partnership by breaking the trust of one of the biggest automobile companies in the world. Further, the German will lose its customer loyalty as analysed by Reina. Volkswagen is in one of its worst phases since the company started its operations with broken partnership and financial scandals hampering the image of company adversely. Reina’s suggestions of certain technological changes by internal combustion and electric motor to target the green car lovers should go in favour of Suzuki.

In this short term not so loveable relationship between Volkswagen and Suzuki , the Japanese will have the last laugh in long term.

Seth Fiegerman’s blog “Why Facebook and Twitter are embracing E-commerce”  on Mashable.com highlights the growing importance of E-commerce in the world of social media from the service provider’s point of view. Its amusing to see the business incline the social media giants have to enter the E-commerce world. Facebook had made multiple attempts to enter the e-business arena with the “credits” policy, sending gifts and in-game purchases. Though these attempts didn’t really fetch any significant revenue, Facebook is adamant to embrace e-commerce. Facebook incorporated a BUY button in its interface which makes Facebook users buy products advertised without really leaving the social media site and redirect to the buyer’s homepage.

Facebook’s rival Twitter also purchased CardSpring, an online payment platform the subsequent week after Facebook incorporated the buy button. Both these giants are attempting their luck in e-commerce world where the presence of powerhouse like Amazon, Ebay and Alibaba is dominant. Though reports are that this step has been taken buy both the websites just to make sure that users don’t get bored and stay online for more buy shopping online, it is hard to deny the profit motive behind this.

http://www.soppnox.com/blog/twitter-to-create-a-buy-button-on-its-website-for-online-shopping-ads/

Facebook has 1.55 Billion monthly active users whereas microblogging monster has 307 million monthly active users. If simple math is applied, even if 0.5% of users hit the buy button, the revenue would be gigantic and the both Facebook and Twitter would levy some charges for the same from the retailer.

Facebook’s and Twitter’s constant embracing of e-commerce clearly indicates the prospects of growth in the same and an alert of a hybrid of Social Media and E-commerce is round the corner.

Reference –http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/

http://www.statista.com/statistics/282087/number-of-monthly-active-twitter-users/

Pavit Sethi’s blog “Marketing: Friend or Foe?” clearly mentions and explains the need and importance of marketing as well as he clearly supports his idea with the example of “Mylan” the company that sells Epinen and narrated how good marketing of the product boosted the sale and resulted in contribution of 40% of the total profit of the firm.

https://theinvisibleagent.files.wordpress.com/2010/04/1958-edsel-citation.jpg

Marketing is necessary but unnecessary marketing leads to failure of even well established businesses. Ford Edsel is one of the biggest marketing blunder of all time. The $400-million-dollar investment of the Ford Company on its new car was burned within three years of its launch. According to experts Edsel was competing with itself as it had the same price tag as other Ford’s Mercury line but didn’t really had any new thing to offer to its customers. The product line failed as there were quality issues because Edsel wasn’t given any separate production unit and was using parts of both Mercury and Ford. Even over the top marketing of the much hyped Edsel couldn’t help it as there were increasing mechanical issues.

David Ogilvy , one of the greatest marketing maestro once said ,

“Great Marketing only makes a bad product fail faster”

I agree with Pavit that in today’s world marketing is an essential part of business but cannot lead long term profitability unless there is some concrete idea or substance to market.

Reference – http://michaelhyatt.com/it%E2%80%99s-the-product-stupid.html

http://www.usdatacorporation.com/info/2011/08/15-worst-marketing-blunders/

The World’s biggest democracy underwent its biggest elections in 2014 which resulted in Narendra Modi, now 9^th most powerful man on earth being elected as the Representative of over 1.25 billion people. Make in India project is Modi’s baby and the Indian prime minister is going out of this way to nurture it into making India the biggest manufacturing force of the world. Modi has been termed as “Absentee PM” due to his frequent foreign trips. Modi has travelled to maximum number of countries by an Indian PM in one single year.

http://www.financialexpress.com/article/economy/narendra-modi-wants-china-like-hegemony-for-india-in-manufacturing-anant-geete/78152/

Down to business, the investment of whopping Three Billion Rupees spent on PM’s Travel are showing monetary results as Foreign Direct Investment (FDI) i.e. The Investment made by foreign investors which gives them direct control over an asset and control over it’s decision making was up by 700% to $40.2 billion in the fiscal year ended March 31, 2015. The Industrial Production rose by 2.1% from 0.6% to 2.7% from October 2014 to May 2015

The Multinational Companies like Foxconn and General Motors notified their billion dollar plans of further investment in India.
The Indian PM’s Second visit to the Silicon Valley, United States in less than a year and in return Google’s Announcement of Free Wi-Fi at 500 Indian Railway Stations and Successive visits by Facebook CEO Mark Zuckerberg indicates that there is a lot to come in years ahead in terms of India’s Impact on International Trade and its relations with foreign partners.

Reference –http://blogs.wsj.com/briefly/2015/08/12/five-things-that-show-modis-make-in-india-campaign-is-working/

I am opposed to one for one business model because I believe it’s similar to the spoon feeding (Freemium) model of governance which makes citizens dependent on government for their livelihood. I agree every business has social responsibility as business is an integral part of society but the social responsibility should subside the main motive of any business organisation i.e. to work for its existence by earning adequate profits.

https://m1.behance.net/rendition/pm/2507627/disp/39ec2ec845a26479f46509be5e4f40c1.jpg

If you want to do go to the society in long run and actually make an impact, business should go for ideas like equal employment opportunity, use of sustainable energy and other employee specific activates. If a business is providing all its workers and employees with adequate training and development, safe and sound workplace and free environment then according to me its meeting its social responsibility. Why is that only helping people outside is considered as social responsibility by general mindset.

http://travelingmamas.com/wp-content/uploads/2010/10/Zappos-Office.jpg

Zappos.com ‘s has been proved to be one of the best companies in the world to work for as well as renowned for its customer service at the same time. Zappos’ business model is an example in the business world that how a business can fulfil its social responsibility and make the balance sheet of the company show some positive figures every year.

The Indian two-minute noodle Maggi was banned by the government of India when the lead content in the noodle was found out to be very high according to Food Safety and Standards Authority of India (FSSAI) earlier this year. The most selling instant noodles in Indian market was taken down due to government ban which lead to Nestle, the maker of Maggi file a legal petition in Bombay High court seeking a review of this order. The fun fact was that the Made-In-India Maggi was being sold in many countries all over the world including Canada and Singapore even after the ban in India as the lead test of Maggi in these nation proved that it was safe for human consumption.

http://www.gizbot.com/img/2015/11/10-1447147274-snapdealmaggi.jpg

Indian Shopping website www.Snapdeal.com came up with a deal with Nestle to sell the first comeback lot of Maggi after a long exile of 5 months. The response Snapdeal and Maggi got was overwhelming for both the giants. A whooping 60000 welcome kits of Maggi were sold in less than Five minutes online for the first time. The Deal of the Day model of E-commerce giants in India yet again turned out to be an Ace in the pack of marketing strategies.

Reference – http://www.firstpost.com/business/five-minute-frenzy-for-two-minute-noodles-60k-maggi-kits-sold-out-in-flash-sale-on-snapdeal-2504228.html

Flipkart , an e-commerce website was founded by two friends Sachin Bansal and Binny Bansal after they both left their jobs at Amazon in 2007. Flipkart went live in 2007 with initial investment of Rs400000 ( CAD 8000 ) . The 8 grand company is now valued at US 15 Billion.

Flipkart was started a mere books and e-books seller online but expanded rapidly to almost all the fields. You can now buy anything from toothpaste and branded clothes to furniture and Tyre’s of vehicles just by clicking on the link www.flipkart.com.

http://www.rediff.com/business/slide-show/slide-show-1-interview-founders-run-the-company-not-investors-flipkart-ceo/20140730.htm

This giant has more than 33000 employees and is one of the highest paying employer in the e-retail market. Flipkart acquired www.Myntra.com , an e-commerce competitor in a $319 million deal. The e-commerce trend , door to door delivery , Cash On Delivery (COD)  and other tactics specific to indian market resulted to the rise and growth of flipkart.

6th October 2014 , was a historical day in the e-commerce market of India. Flipkart sold products worth Rs 650 Crores ($100 Million) in less than 10 hours  on ” Big Billion Day ”

Flipkart.com has acquired many startups like Letsbuy.com , WeRead , Chakpak , Mime360 and a few other in past 5 years. This e-commerce leader has been collaborating with Motorolla , Xiaomi , Redmi to launch their products online only on Flipkart. This collaboration has resulted in mutual benefits to both the companies. Companies like Xiaomi get the hype due to the launch on single platform and on a huge scale. 40000 units of Redmi 1S , a $100 smartphone were sold in less than a second on its launch date.

Flipkart.com is one the fastest growing companies in the world and can be looked up as India’s response to E-commerce giants like Amazon , Ebay etc. 

Reference

http://economictimes.indiatimes.com/industry/flipkart-countrys-largest-online-bookstore/articleshow/6108317.cms

http://indianexpress.com/article/business/companies/flipkart-myntra-announce-merger/

https://en.wikipedia.org/wiki/Flipkart

Turing Pharmaceuticals obtain the rights to produce Daraprim last month. Daraprim is a drug that helps people with weak immune system. It is the drug prescribed to HIV Positive people to strengthen their immune system time to time.

The Former Hedge Funder and Founder of Turing Pharmaceuticals , Martin Shkreli Increased the price of HIV Drug by 5000% . A single dose that was sold for $13.50 , is now being sold at $750 per tablet.

Martin is now being criticized for this shrewd move. The pill costs less than a dollar which now being sold at $750. To this criticism Shkreli responded by saying that the cost does not include the marketing and distribution cost which has been increasing since forever.

http://www.independent.co.uk/life-style/health-and-families/health-news/martin-shkreli-the-drug-industry-wants-us-to-believe-the-ceo-who-raised-drug-prices-is-an-outlier-he-a6671781.html

“If there is a company that was selling an aston martin at the price of a bicycle , and we buy that company and we ask to charge Toyota prices , I don’t think that should be a crime. We are charging the right price that the market was missing  and we are doing very good with that profit by putting it back in the patients hand”  – Martin Shkreli 

Martin Shkreli had no regrets after increasing the price of this essential drug. Though he has agreed to reduce the prices after facing  heat and anger from the public. The 32 year old argues that the increase in price was necessary to get funds for further research and development of advanced medications for HIV patients.

The 32 year old is turning out to be the Jordon Belfrot ( Wolf Of Wall Street ) of the Pharmaceutical Industry.

Reference – http://www.bbc.com/news/world-us-canada-34320413

The Biggest corporate group of india  Reliance Industries Limited (RIL) is the biggest example of Crony Capitalism. The Group with  Equity of USD 40 Billion and Assets worth USD 85.90 Billion has been in public eyes for all the negative reasons since its first brick was laid. Dhiru Bhai Ambani , founder of the Reliance Empire himself started the crony capitalism in Reliance. Dhirubhai and his relations where exposed by media houses about illegal imports and botched attempt to acquire Larsen&Turbo.

http://www.countercurrents.org/varman050313.htm

RIL got the contract to extract natural gas for the Indian govt in early 2000. The cost of extraction was found out to be less than USD1/unit . RIL signed a contract with NTPC (Northwest Territories Power Corporation) for 17 years at a price of USD 2.3/unit. RIL used it political links and connections to hike up the selling price of the gas to  USD 4 /unit. RIL didn’t stop at that. 

In the year 2013-14 , RIL manipulated the extraction of gas to create an artificial shortage to blackmail the govt. RIL produced only 18% that year of the 80 Million units contract. This shortage led to import of natural gas and inflation in the always inflated indian economy.

In March 2014, RIL again used its political connections and passed a regulation to double the price of its gas to USD 8/unit. This amendment would have resulted in profit worth Rs 54000Crore ( USD 9 Billion ) per annum to RIL. RIL was opposed by a new political party AAM AADMI PARTY (AAP). RIL responded by saying that the prices where set according to international markets. This move was opposed by the political parties and media. RIL had to revert its amendment to USD 4/unit. 

NIKO Resources Ltd , Partner of RIL to extract natural gas , still continues to sell gas to Bangladesh at USD 2.34/unit. According to CAG (Comptroller and Auditor General of India)

RIL has received windfall gain of Rs 1.25Lakh Crore ( USD 20.6 Billion ) from the govt of India for its projects. 

RIL remains to be the biggest and one of the most corrupt business entities of INDIA

Reference – https://www.youtube.com/watch?v=NRWUmXDjO8U

The Comm 101 first lecture drove us through the impact of government intervention on business. Some still believe that government intervention is necessary. Roughly 9% of Comm 101 103 students thought that government should always interfere in business when they were asked “Should there be government interference in business for setting prices” . There were about 41% who argued that interference should depend on product while 9 students of the 52 voters voted that government should interfere only in weak market.

Picture Taken From – http://indianexpress.com/article/cities/delhi/delhi-government-can-now-raise-vat-to-30/

Government interference usually plays spoilsport for strong business monopolies in free market. Recently the newly elected state government of Delhi, India made an amendment that allowed it to hike the Value Added Tax (VAT) on several goods. The government can now hike VAT up to 30%. Tobacco and Petroleum related business got the worst welcome gift and most goods under the “To-Be-Hiked” category were from these industries.[1]

The Delhi government didn’t stop its massive rampage over business monopolies until it doubled the entertainment and luxury tax to 40%. This move by the finance department of Delhi State has resulted in fall in sale of luxurious goods and services in Delhi but a significant increase in revenue of Gurgaon, a city in the National Capital Region (NCR) of Delhi.  [2]

What I Personally believe from my readings and observation is that the big TOBACCO Corporates are putting a bad show in the business world by their constant lobbying of all major political party leaders and central government ministers to get new regulations to counter the Delhi Govt’s VAT policy as well as WHO’s policy of big statutory warning on cigarette packets. In a report of Times Now on TOBACCO LOBBYING , they actually raised questions on the ethical values of cigarette manufacturers , business firms and politicians when the cartel of so called candy-makers tried to reduce the statutory warning on the packet. [3]

The freshly Elected government of Delhi is going on its plan to bring down the cartel of Petroleum, Tobacco and Liquor Industry. This Government Intervention will turn out to be major hindrance for the big corporations that were accused of lobbying earlier this decade. These steps have gained the attention of economic and health experts all over the country as the main declared motive of the government is to discourage the use of liquor, tobacco, and other luxurious item related to these things.

[1] http://indianexpress.com/article/cities/delhi/delhi-government-can-now-raise-vat-to-30/)

[2] ( http://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/Entertainment-tax-doubled-in-Delhi-Delhis-loss-will-be-Gurgaons-gain/articleshow/47832617.cms )

[3]  http://www.timesnow.tv/Debate-Tobacco-kills-but-not-in-India/videoshow/4474595.cms