Feb 13, 2009|
How to kill a brand like Satyam
Brands are highly valuable assets, especially in service industries. Ramalinga Raju not only built an IT company over the years, but also a valuable brand - 'Satyam'. He has also killed it. As per a leading business daily, the Satyam board has started the process for inviting bids from potential suitors for taking over the company. The board also agreed that when the buyout is over, brand 'Satyam' may be done away with.
Raju's deeds have brought such disgrace to the company that its identity might need a break from the past. We believe that at a personal level it might actually promote justice - not only will he do jail time, his corporate legacy will also be erased. However, at a societal level - wealth has been destroyed.
Populist rail budget expected
Railway Minister Lalu Prasad Yadav will present the vote-on-account today. With the general elections on the horizon, it expected that he will announce some popular measures. New trains are likely to be introduced and the basic fares for AC-III and general class are expected to be cut. The railways might actually be in a position to do this. After all, the rail ministry estimates a cash balance of Rs 1 trillion, over the past 5 years. The crash in crude prices has also reduced fuel costs.
Burgers or land?
Ray Kroc was the first to recognise the potential of the fast food industry. He was also very clear about his business. He once said that McDonald's is in the real estate business. The only reason they sold hamburgers is because they are the greatest producer of revenue from which their tenants can pay rent to the company.
With property prices crashing across Asia, guess what McDonald's is doing. "It's a time to gain market share," says Tim Fenton, the company's president for Asia. He adds, "We will not cut back on anything, we will accelerate if anything." Given its strong cash flows, no wonder the company is taking advantage of local weakness. Just goes to show how fortunes differ among companies even in extremely difficult circumstances.
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