Kraft Foods merges with Heinz!!

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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US food giant Heinz has announced its merger with Kraft Foods Group, creating the 3rd largest Food and Beverage Company in North America and the 5th largest in the world. The new company is called Heinz and Kraft Company and according to BBC, its combined sales will be worth $29 Billion with eight $1 Billion brands.

The deal was backed by billionaire investor Warren Buffet’s Berkshire Hathaway and Brazilian Investment Firm 3G Capital.  Mr. Buffet, as quoted by BBC said, “I am delighted to play a part in bringing these two winning companies and their iconic brands together. This is my kind of transaction, uniting two world-class organisations and delivering shareholder value. I’m excited by the opportunities for what this new combined organisation will achieve.”

According to the terms of the merger, Heinz shareholders will retain 51% of the combined company while Kraft shareholders get the remaining 49%. Kraft shareholders will receive a special cash dividend of $16.50 per share as part of the deal. Mr. Alex Behring, chairman of Heinz will be the Chairman of the new company while Mr. John Cahill, chairman of Kraft Foods will be the Vice Chairman. Bernardo Hees, the CEO of Heinz will be the CEO of the new company as well.

The grocery market, already led by a handful of corporations has now got a new competitor on board. Only time will tell if this merger has got enough potential to survive the intense competition in the industry.

Sources:

BBC: http://www.bbc.com/news/business-32050266

Adweek: http://www.adweek.com/news/advertising-branding/kraft-foods-and-heinz-will-merge-create-28-billion-grocery-powerhouse-163664

Amazon Exclusives – Marketplace for New Gadgets & Innovations

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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Amazon just launched a new store called Amazon Exclusives that features new innovations from up and coming brands. The store basically showcases products from new innovators which are featured by some of the shows like “Shark Tank”.

According to CNBC, the new marketplace will give the customers a “first look” at the products from up-and-coming brands which have made their mark on crowdfunding campaigns. In a company press release, VP of Amazon Marketplace Mr. Peter Faricy said, “Our mission on behalf of customers is to make Amazon the destination for brands and innovators to launch and sell their products, providing our customers early access to new products.”

The products available on the store cannot be sold through a third party store or website. They are only available through Amazon, or through the product company’s direct website or store. As written in LA Times, this is a win-win situation for everyone as the customers get to about the latest products that they might otherwise have not known and the products get a huge exposure boost.

Michael Hsu, CFO at Peri, which makes an iPhone case which doubles as a speaker said, “From a business perspective, the new store is nirvana for a new brand, and the end result is Amazon’s customers will have access sooner to cooler products.”

One major advantage for the customer is that the orders are Fulfilled by Amazon and not by the seller as is generally the case. Hence, all the orders would be eligible for Free 2-day shipping for Prime members.

This is a new strategy from Amazon and a quite interesting one too. This increases the target customers of Amazon. If nothing else, it  gives customers the belief that Amazon just does not sell major consumer goods and is willing to go out there and find new and innovative products that are grabbing customer attention.

Sources:

CNBC: http://www.cnbc.com/id/102495880

LA Times: http://www.cnbc.com/id/102495880

Money Talks News: http://www.moneytalksnews.com/amazon-launches-store-showcasing-new-gadgets-and-inventions/

Business Insider: http://www.businessinsider.in/Amazon-launched-a-new-store-to-sell-products-from-Shark-Tank-and-other-exclusive-items/articleshow/46531805.cms

Airtel ties up with China Mobile

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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Bharti Airtel Limited, on Tuesday, 3rd March, announced a strategic partnership with China Mobile, the world’s largest telecom operator. A Memorandum of Understanding (MoU) was signed by the heads of both the companies – Sunil Bharti Mittal and Xi Guohua. According to a company statement, the two companies will work towards the growth of the LTE ecosystem and evolving mobile technology standards.

Mr. Mittal, as quoted by The Hindu, said, “India and China account for nearly third of all the mobile subscribers globally and this partnership will provide a major platform for development and deployment of 4G and future mobile technology standards as both countries enter a phase of explosive data-led growth.”

Both the telecom operators plan to share relevant network as well as product knowledge, best practices, and technical learnings to provide world class service to their customers.

As part of the agreement, both the companies will work towards a common strategy for procurement of devices that smartphones, data cards, portable Wi-Fi devices, modems, routers, universal sim cards and the like. Both the companies will also work towards sharing testing and validation practices and will also jointly conduct proof of concept testing as well as trials.

This partnership couldn’t have come at a better time with India and China both on the cusp of large scale roll-out of 4G data services. As the communication systems increase in efficiency, the telecom operators have started looking beyond their local markets and plan to establish themselves on a global level.

Sources:

The Hindu: http://www.thehindu.com/business/Industry/airtel-china-mobile-tieup-for-4g/article6955377.ece

Business Today: http://businesstoday.intoday.in/story/airtel-china-mobile-tie-up-for-5g-telecom-equipment-procurement/1/216468.html

Business Line: http://www.thehindubusinessline.com/features/smartbuy/tech-news/bharti-airtel-ties-up-with-china-mobile/article6955126.ece

SpiceJet spices up the fare wars

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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SpiceJet on 11th February announced its “cheaper-than-train-fares” sale where customers could purchase all-inclusive domestic air tickets at a throw-away price of Rs.599. This offer stands for tickets booked between 11th and 13th of February (both days included) for travel from July 1st to October 24th 2015.

In the industry, January-March and July-September are considered off-season where the sale of tickets is generally slow. Most air carriers including Jet and Indigo have come up with aggressive discounts over the last few weeks to make most of the lean period. However, this offer by SpiceJet is by far the lowest. The credit for lowest air fare before SpiceJet goes to Air Asia which offered all-inclusive domestic fares at Rs.699.

SpiceJet was plagued with operational inefficiencies in December last year and had to cancel more than 1800 flights. As a result, the brand image of the company took a huge hit. Ajay Singh, who helped found the company in 2005 agreed to buy a controlling stake in the company in a bid to turn around the loss-making airline. People are now looking at this move of offering such low prices as a means to buy back customer confidence in the company.

Following SpiceJet, Indigo announced its discount scheme offering all-inclusive domestic flights starting from Rs.1499. This is valid for bookings made 90 days ahead of travel. Jet Airways followed suit and offered special fares from economy class starting from Rs.1933.

One important point to note in this fare war is that the number of seats on discount are very limited. In reality, very few passengers are able to make use of this offer. In fact, as soon as SpiceJet announced this offer, there was so much traffic on the SpiceJet website that the website crashed on Wednesday afternoon. Even after becoming live sometime later, users are still facing difficulties in booking tickets as the website is reportedly crashing whilst doing the transaction.

As reported by First Post on 12th February, the steep discounts offered by airlines has come under the scanner of the Civil Aviation Ministry. While there is no official word yet, First Post reports that according to sources, the ministry is discussing with Directorate General of Civil Aviation (DGCA) regarding the matter. In December, the ministry had circulated an internal note proposing to cap the maximum and minimum fares for economy class. The Air Passenger Association of India (APAI) had in October complained to the DGCA seeking a ban on such schemes claiming that they were fraudulent.

It would be interesting to see how the airlines take it forward from here now that the DGCA is becoming involved. Whatever the case, as far as the consumers go, there can be no better time to book tickets.

Sources:

NDTV Profit: http://profit.ndtv.com/news/industries/article-spicejet-ups-ante-with-cheaper-than-train-fares-at-rs-599-738639

http://profit.ndtv.com/news/aviation/article-jet-airways-indigo-announce-discount-offers-to-take-on-spicejet-738767

First Post: http://www.firstpost.com/business/spicejet-discounts-dgca-may-cap-minimum-maximum-airfares-2094943.html

DNA India: http://www.dnaindia.com/money/report-spicejet-fare-war-discounts-to-gain-back-flyers-trust-2060320

Alibaba’s new PR stunt – Delivering Tea with Drones

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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Last week, Alibaba, the Chinese e-commerce giant, tried its hand at delivery by drones. According to Bloomberg News, Alibaba Group Holdings Ltd. is partnering with Shanghai YTO Express Logistics Co. to try out drone delivery in Beijing, Shanghai and Guangzhou. As this is still a pilot program, the drones would only deliver ginger tea packets to Chinese customers who volunteered first in these three cities.

According to a statement given by the company’s spokesman to TechCrunch, this was a “one-off campaign” and “an effort to bring unique and innovative shopping experiences to consumers on Alibaba’s e-commerce ecosystem”. TechCrunch, however, went on to say that this was a PR stunt, reminiscent of Amazon’s Black Friday Drone revelation in 2013. That might be fair as the company was just delivering tea packets in select localities with small drones flying just at a height of 100 meters.

Though Amazon had come up with this idea in 2013, it has not been able to test this due to regulations against the same in USA. So when Alibaba announced this program, some saw this as Alibaba beating Amazon in the drone race. However, according to Forbes, this is just a publicity stunt and does not push the envelope of drone delivery further.

As pointed out by Forbes, the drones have a maximum capacity of 1 Kilogram. However, the tea bags delivered are just 340 grams and hence the program doesn’t test the capacity of drone’s payload. Moreover, the area of delivery covers roughly a few city blocks and is nearly not enough to test the drone’s range, which according to Alibaba is 10 Kilometers. So unless customers ordered small items like a toothbrush or one shoe, they’d have to rely on the traditional manned delivery system.

As impractical as using drones for delivery in big cities may sound, Germany’s Deutsche Post already uses drones to deliver medicines to the island of Juist in the Wadden Sea. So essentially, what Alibaba is doing just seems to be a publicity stunt, a strategy to get noticed by the world. For what it’s worth, I’d have to say, the strategy is working!

Sources:

Forbes: http://www.forbes.com/sites/frankbi/2015/02/05/why-alibabas-tea-delivery-test-is-not-the-future-of-drone-delivery/

TechCrunch: http://techcrunch.com/2015/02/04/alibaba-drones/

Bloomberg: http://www.bloomberg.com/news/articles/2015-02-04/alibaba-drones-fly-over-beijing-as-amazon-pleads-for-u-s-tests

Apple: iHad an Amazing Q4

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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On 27th Jan, Apple released its quarterly results and created history by having the most successful quarter in the history of any company. The company reported $74.6 billion in revenue and $18 billion in net profits. This is the largest corporate quarterly earnings of all time. For reference, considering a 24 hour day, Apple makes around $8.3 million dollars per hour in profit. In comparison, Amazon had a revenue of $29.33 billion and a net profit of $214 million while Google had a revenue of $14.5 billion.

This quarter alone, Apple sold 74.5 million iPhones, 21.4 million iPads, and 5.5 million Macs. What is extremely interesting to note here is that a lot of these iPhone sales have come outside USA. In fact, Apple trumped Samsung and Xiaomi to become the leading smartphone seller in China. So what did Apple do right?

When iPhone 6 and 6 Plus were launched, given the number of moderate reviews, the Android explosion throughout the world and the controversies surrounding the bending of phones, no one anticipated this. But the one major factor Apple got right this holiday season was its supply chain. Last year, Apple was crippled by inefficient supply and was unable to meet the demand for their products. This year, Apple made sure there that didn’t happen. Moreover, the growing popularity of phones with larger displays and the strengthening of the dollar worldwide made sure Apple had huge revenues.

While iPhones sales skyrocketed, iPad sales dropped by 17.7%. Nevertheless, the revenue from iPads is not insignificant. It still is more than that of companies like American Airlines, Nike, Capital One, Xerox, Kraft Foods, eBay, Starbucks, Marriot, etc. However, when asked about the slump in sales, Tim Cook, the CEO of Apple said, “I view it as a speed bump, not a huge issue. That said, we want to grow. We don’t like negative numbers on these things. Over the long arc of time, my own judgment is that iPad has a great future.”

Whether or not iPad will stand the test of time, we’ll just have to wait and see. As of now, Apple is basking in the glory of this dazzling quarter it just had and hopes it can now live up to the increased expectations it has set itself.

Source: TechCrunch; The Verge

— Vamsi Krishna Manchi

Facebook@Work!

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Manchi Vamsi Krishna, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur.

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With Social Networking becoming such an integral part of everyday personal life, it was natural that the next step would be integrating it into everyday work life. Companies have been experimenting with the concept for quite some now. Google Wave was Google’s answer to “Enterprise Social Network” which, unfortunately, did not find much traction in the market. Similarly, Microsoft’s Yammer, Socialcast, Convo, etc also were not able to provide the required results. Six months ago, Facebook had also reported that they were working on a similar concept aimed at the enterprise market.

Last week, Facebook unveiled “Facebook At Work”, aimed at the enterprise market, which will allow businesses create their own social networks. Employers can create separate log-ins for their employees to do work. Users can also integrate this with their own personal profiles so that they can access everything at one place. The interface would be exactly like Facebook itself. The company also announced launching of “Facebook At Work” apps in iOS and Android market.

This puts Facebook in direct competition with Microsoft’s Yammer, Google Wave and a host of others who are trying to tackle the “Enterprise Social Network” problem. Lars Rasmussen, the engineering director at Facebook who is heading this project, in his interview with TechCrunch mentioned that Facebook has already begun testing the service with a very small set of external businesses. The initial target for the app are companies with 100 employees or more.

For now, Facebook platform has been disabled on the work product. This means there would be no ads or third-party apps. However, Rasmussen says that may not always be the case and goes on to state that this application might be a paid service.

Talking about application testing, Rasmussen says Facebook have effectively been testing the project for the last 10 years, because that is what Facebook employees work on. They use this to communicate with each other, pass information, plan meetings and even share documents. This long-term usage is what makes Facebook optimistic about this project appealing to other enterprises.

Some Key Details of the Product:

Price: No hard details yet. However, as Facebook has not ruled out advertisements, experts believe there could also be a free version. At this point of this, all these are only speculations – but if true, would drive a lot of enterprises towards trying this product out.

Working: No demo has been shown yet. Rasmussen said that when an employer adopts this product, they’d be able to construct it with a set of new accounts. Users can either use those accounts independently or link it to their personal Facebook accounts so that they are logged into both at the same time. This would be similar to working in Facebook groups which are present today.

Limitations: For now, people can share documents, but there is no in-app editing. Also, currently, there is no integration with third-party enterprise application but Rasmussen said that they are keen to bring that on to the product.

While the world awaits the official launch of the product to get a feel of all that’s said above, the flip side to the story is data privacy. A lot of people shy away from this concerned with the thought of Facebook owning their property and the potential threat of lack of confidentiality resulting from this. That being said, all we can do now, is wait and watch… and of course Facebook!

– Vamsi Krishna Manchi