Of Infrsatructure and Capital Statements

( .. furthering the course of discussion on the pathetic quality of roads in India, this was a post that i had written in reply to Raju Narisetti's (editor in Chief, Mint) editorial piece on pathetic road infrastructure in India. Click http://blogs.livemint.com/blogs/romanticrealist/archive/2008/09/01/killer-roads-in-india-and-rethinking-the-death-penalty.aspx?CommentPosted=true#commentmessage for the story)

Hi Raju

Off all things, i cant imagine why you would have to toil in some obscure hill way, a Highway 58 or something. Did you miss the roads outside your home/office/club/mall/market etc? If my memory does me fair justise, the utility of tax payers money diminishes by exponential degrees as you move out of Delhi/or the state capitals.And i am still talking Delhi! We dont have a concept of time value of Money in India else the amount that we lost in the traffic jams and on roads would be incomprehensible. It takes only one good monsoon to show how poorly off we are in the quality of road infrastructure. As far as your China comparison is concerned, the common perception of India's GDP growth is that we loose 2% growth opportunity because of infrastructural shortages and shortcomings (whether be road, electricity, water, or any other). So when India was scorching at 9% GDP growth, the common perception was we could actually do a 11% and we were loosing 2% to these bottlenecks. I wonder if China works on discounting their infrastructure. Responsibilibity and accountability go hand in hand: Thats as far as i understand is a universal principle. Universal, right till about it steps to the Indian Policy makers. This may sound crazy and indeed as a action point radical , but who audits the government. Are there any scorecards for the governments and policy makers. Inside the parliament, its just as good as a thief judging the theivery of another. Why cant we have a group of business icons/media people/environment specialists/economists/ social activists, take a yearly account of the policies and the governments? A public death penalty is not as much the answer as an answerable system is. In a mature world, i would vote for rational assessments instead of radical penalties.

Thanks

Regards

Bringing Back Retail Realism

(An addition/comment to a report on Retail and the over optimism around it which was published in Mint on 27th August 2008)
http://www.livemint.com/2008/08/27002851/Bringing-back-retail-realism.html ... for the full post

Having dealt with the large retail houses in course of doing business, i was fairly confident that the exuberrance@retail was shortlived and was over stretched. Come to think of it from a business perspective
1. There were lot of instances of delayed payments by these chains ... leading to order cancellations from the vendors.
2. There was always a working capital crunch and huge credit cycles which were never resolved. 3. These chains had punted a fair amount on the vendors abilities to extend credit and run promotions
4. Competition never ran by any rules of retail management.
5. Consequently there were 3 or 4 players in the same catchment trying to woo consumers
6. Consumers were sploit for choices
7. Most of the shopping that happened was price discount based instead of value based
8. The stores competed on promotions and price offs rather than understanding the consumer better
9. By arm twisting the local vendors into greater margin sharing, these stores stocked up goods which were not the quality the consumers expected from the stores.
10. Quality thus became a concern from these stores. (No one believes jeans @ Rs.199 stories from these stores on quality)
11. The assortment of goods carried, the inventories and the personnel required to run the chains involves huge outflows which the profits dont make good.
12. From the consumer psyche, window shopping is all that he does in these stores. The real purchase happen at 50% and more "off" sales.

Thus in trying to be everything to everybody many of these stores loose on consumers. So then whats working?

1. Would applaud the Nokia, Bose, Sony stores which focus on a narrow merchandise but good depths
2. The Walmarts and the Tesco's of the world dont only do retail management. They have huge vendor/supply management fundamentals. Its like Frito Lays paying farmers to cultivate the Potato for the Lay's Chips.
At this level, of price discounting, promotion and bargain hunting, the story is doomsday for these stores.