Category Archives: Management

Management related Posts

Entry into BGS Honor’s society

Today I had my induction into Beta Gamma Sigma honor’s society. When I started my MBA in August 2005 I knew I will do well but I did not know I will do so well. There have been many challenges on my way. On health front I had 4 surgeries; there were many times I had to take 2 Percocet (pain killers) to sit in class. Swati had to drive me to class and wait for 3.5 hours until the class was over. On career front I joined Samsys just before MBA started and then in a year I had an opportunity to work with Microsoft which I embraced. We bought 2 houses and 1 car in last 2 years. I am still trying to sell one of them. L Things have been happening at real fast pace. But I guess I love the fast pace of life.

I have to give a lot of credit of my success to Swati. She has always been very supportive in every aspect. Did I tell you she actually read few cases for me? JJ

As Swati says, I am more energetic at 9:30 PM after my class than at 5:30PM before my class. That is how I feel, I love the program and I am learning a lot. The best part is I enjoy it. J

BGS members from class of 2007:


 

More about Beta Gamma Sigma (From Wikipedia)

Beta Gamma Sigma or ΒΓΣ is an honor society for business students and scholars

The aim of Beta Gamma Sigma is to encourage and honor academic achievement in the study of business and to foster personal and professional excellence among its inducted members. A major emphasis of the society is to foster ethical business leadership. Beta Gamma Sigma members reside in over 160 countries. Beta Gamma Sigma also has 18 alumni chapters located in major metropolitan areas in the U.S. and Hong Kong which provide educational and networking opportunities for members.

Membership requirements include that a student must be in the top 10% of a baccalaureate business program or the top 20% of a masters business program. While membership is highly selective, Beta Gamma Sigma is the largest alumni group in the world for graduates of business programs.

First Project in MS Delivered…

Today my first project in MS was completed and delivered. It is amazing how the whole development process works in Microsoft. Working for world’s biggest software development company is an experience in itself. It is amazing how the whole development process is managed. Do you know there are more than 12000 members in Developer division? Imagine any change I do can affect the whole product. There is a whole quality gate process which makes sure no one breaks the whole product unit level code, more on that some other time. Today is time to open Champagne bottle. J

Finance Books and Movies

Our Finance professor Anil had recommended few good books and Movies on Finance. This is a great list. I have watched few movies from the list and they are really good. J

Good Movies

  1. Barbarians at the Gate
  2. Wall Street
  3. Double or Nothing
  4. Rouge Trader
  5. Boiler Room
  6. Dealers
  7. Risk/Reward (Documentary)
  8. Trading Places
  9. The Hudsucker Proxy

Good Books

  1. Liars Poker

2. Barbarians at the Gate

3. Monkey Business

4. The Predators Ball

5. Conspiracy of Fools

6. Play Money

7. When Genius Failed

8. Tearing Down the Walls

9. Beggars Banquet

10. Bringing Down the House

Creating Competitive Advantage

Creating Competitive Advantage

  • Total value created in any transaction is difference between customers willingness to pay and suppliers opportunity cost.
  • Added Value is Maximal value created by all participants in a transaction minus the maximal value that could be created without the firm
  • Unrestricted bargaining is the amount of value a firm can claim cannot exceed its added value.
  • The larger the added value higher the potential profit of the firm
  • Competitive advantage derives fundamentally from Scarcity
  • In practice managers use actual cost instead of opportunity cost because it is easier to track and calculate
  • A firm can achieve a competitive advantage by devising a way to
    • Differentiation Strategy – Raise willingness to pay a great deal with only slight increase in costs
    • Low cost strategy – Reap large cost savings with only slight decreases in customer willingness to pay
  • By Analyzing a firm activity by activity we can
    • Understand why the firm does or does not have added value
    • Spot opportunities to improve a firm’s added value
    • Foresee future shifts in added value
  • Steps to Analyze firms activities
    • Catalog Activities(Value chain)
    • Use Activities to analyze relative costs
    • Use Activities to analyze Relative willingness to pay
      • Willingness to pay calculator should be used for this
    • Explorer options and make choices
      • Competitive advantage comes from an integrated set of choices about activities

     
     

    Conclusion

  • Successful firms chooses right industry and also right position in the industry
  • Competitive advantage derives from added value
  • Firm can’t claim any value unless it adds some value
  • To have added value firm must drive a wedge between customer willingness to pay and supplier opportunity cost
    • Wider wedge than rivals achieve
  • To attain wider wedge firm has to do different things than rivals
  • Analysis of activities can be used to assess options for creating competitive advantages. To do this management team must decompose the firm into parts-activities-but also craft a vision of an integrated whole

     
     

    Attaining Competitive advantage is just the first half of strategic struggle. Sustaining advantage in the face of relentless rivals and turbulent change is the more demanding half.

     
     

     
     

Porter – Competition shapes strategy

Competition Shapes strategy

  1. Threat of Entry

    Six major barriers for entry

    1. Economies of Scale
    2. Product Differentiation
    3. Capital Requirement
    4. Cost Disadvantage independent of size
      1. Learning curve
      2. Proprietary technology
      3. Access to best raw material sources
      4. Assets purchased at preinflation prices
      5. Government subsidies
      6. Favorable Location
    5. Access to distribution channel
    6. Government Policy

       
       

  2. Bargaining power of supplier
    1. IT is dominated by few suppliers
    2. Product is unique
    3. Not obliged to content with other products for sale to the industry
    4. Credible threat of integrating forward into industry’s business
    5. Industry is not important customer of the supplier
  3. Bargaining power of Customers
    1. Concentrated or purchase in volume
    2. Standard or Undifferentiated products
    3. If product is significant portion of the cost for customers
    4. If customers earn low profits forcing lower purchase prices
    5. Industries product is unimportant to buyers products or services
    6. Industries product does not save buyer money
    7. Self manufacture or backward integration
  4. Substitute products

    Most attention should be paid to

    1. Subject to trends improving their price -performance trade off with industry’s products
    2. Produced by industries earning high profits.

       
       

  5. The Industry – Jockeying for Position

    Intense competition causes price competition, product introduction, ad slugfests

    Intense rivalries are caused because

    1. Many competitors or of same size
    2. Industry growth is slow
    3. Lack of differentiation
    4. Fixed costs are high or products are perishible
    5. Capacity is augmented in large incrments
    6. Exit barriers are high
    7. Rivals are diverse in strategies, origins and personalities

       
       

       
       

Formulation of Strategy

  • Positioning the Company
  • Influencing the balance
  • Exploiting industry change

     
     

 
 

 
 

 
 

 
 

Motorola bought Symbol

Today Motorola bought Symbol technologies. Symbol is the market leader in RFID hardware market. They specialize in fixed and mobile readers. Traditionally they have been very strong players in handheld bar code readers. This deal is a great news for RFID market. RFID market needs bigger players. Who can take advantage of economies of scale and bring in lot more money for innovation….

So I think this is turning point in the RFID industry and there will be more big deals and lot of big companies will enter the market… I am waiting for Intermec, Alien, Sirit to be taken over next.. Lets see how that goes…

Operations Contd…

This Sunday we were sitting in Barnes and Nobles and studying. I drifted away from my book and started thinking something when suddenly Swati asked “What are you dreaming? Get back to studying” (U know she is like that)… SO I started telling her what I was thinking, Actually I was thinking of all the manufacturing plants I have visited in my life for work, When I say Plant I mean Plant not IT office or Head quarters or corporate offices or anything else but actual Plants.. So here is the list I could come up with…

  1. Mercedes in Alabama. This is my favorite…
  2. Invensys Building Systems in Rockford. This is the plant I have spent most time in.
  3. Foxboro in Massachusetts
  4. Boeing in Salt Lake city
  5. Wacker Corp in Wisconsin
  6. Flexco in Chicago
  7. Yorozu in Mississippi
  8. Tioga Pipe in Philadelphia
  9. US Holdings in Florida
  10. International truck in Ohio
  11. Formed Fiber, All the plants in Auburn (Maine), Sumter (SC), sidney (Ohio)
  12. Nortel Networks in Raleigh
  13. TIC Gums in Pennsylvania
  14. Metso Paper in Finland
  15. Deckel Maho in Germany
  16. Otis in Germany
  17. Ferag in Switzerland

 

Hmm so it turned out to be pretty long list. But all of them have been unique and every unit/plant is different. U know Metso paper made Canon’s before first world war. After the war, they had to make something else and guess what is closest to canons, Paper manufacturing machines. SO that is what they started making. Isn’t that amazing. Ever visit has a story linked to it… But for now I guess this one is enough…

Operations

Today when I looked at my calendar I was surprised to see operations class on Monday. I was expecting Ethics. Anyway my prof wanted me to fill up a one page background info. One question in that was “List of Operations Management related activities I have been involved in”… Hmmm So I started thinking about it…Actually I have never held an operations related job. You know directly after coming out of college I started working for Baan. Baan made ERP software, I was trained in Distribution related functionality and later worked on OW the integration technology of Baan. Then after 3 years working for Baan I moved to US and worked on various projects where we implemented, integrated and automated ERP solutions. So did I manage operations no. But you know what I have seen to many things in operations, I have stood in front of management teams and recommended process reengineering based on inefficiencies.

Classic example was complete B2B strategy which was implemented for Flexco. Flexco had traditionally managed all of there order processing through phones. This was inefficient and error prone. We implemented a sophisticated B2B solutions which allows customers to upload orders either in Excel or XML format. Companies or distributors could directly post these XML documents over web, on receiving these orders the email was sent to sales reps and ordering company with order info. Once the order was shipped we sent another set of notification and users could download there invoices from the B2B site. It was not as simple as it sounds. There were issues related to production, shipping, billing we had to resolve before we could do anything. International customers had there own set of issues to be managed… Anyway but that was just one project… I have worked with more than 55 customers on various projects/issues..

The best time I have ever had on shop floor was at Invensys building systems in Rockford. I still do some consulting work for them. But when they went live with new ERP system. We had integrated there existing shipping software with BaanERP. On day of go live we reached the shipping dock at 6:30am and helped ship goods for whole day. That was fun. Can never forget that day.. If you really want to see America you have to go to places where things are made… “Made in America”….:)

Ethics…

Today we had our first class of Ethics. So what is Ethics? It is being good or evil. Anyway… In short the jist of the class was what do you do when you need to choose NOT BETWEEN right and wrong. In that case you should choose right but what do you do when you have to choose between right and right. How do you make that decision?  Let me give an example. Let’s say your best friend comes to u and asks u to lie for him/her else he/she will be in trouble. What will u do? Is loyalty more important or honesty? Anyway that is where Ethics comes in play…:)  Anyway for me the bar to make a ethical decision is very simple, If my decision does not hurt anyone else that is fine. If someone is going to get hurt any decision I make I would like to make a decision which hurts less. Anyway.. that is me.. What is ur rule of thumb?? Think about it…  Now at the end of the class that is at 8:58 our prof let us go and said so we are ending 2 minutes early today…. But u know what our class is actually scheduled to end at 9:15 so was it unethical not to tell him the truth? No one did…:)