The Real Estate magnate Mangal Prabhat Lodha

Real Estate

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August 25, 2021

The Real Estate magnate Mangal Prabhat Lodha

One-half of Mumbai is characterized by the constant hustle and bustle on the streets, bumper-to-bumper traffic, and a constantly on the go population. But, another side of it is the grandiosity, shining skyscrapers, towering corporations, fame, and luxury. Combining the two, we get the story of Mangal Prabhat Lodha, the founder of the Lodha Group, now known as Macrotech Developers, who is India’s most prosperous real estate entrepreneur.

Mangal Prabhat Lodha was born on December 18, 1955, to Shri Guman Mal Lodha, a freedom warrior and the Chief Justice of the Guwahati High Court. He earned his bachelor’s degree in commerce before studying law at the University of Jodhpur. However, his father was transferred, and to his dismay, he was assigned a judge in the same court where Lodha himself used to practice. Practicing in the same court as his father, a judge, was highly inappropriate, so he chose to relocate his practice. Even though he moved, something about him felt unpleasant, as though something was missing! He began to realize that this profession was certainly not what he desired. As a result, he stopped practicing law.
Lodha, hailing from Rajasthan, came to the city of dreams with a business mentality and a keen eye for real estate. Back in 1981, when he established his base in Mumbai, the tycoon began expanding his firm by investing in cramped locations in the despised suburbs. He started by offering people what no one else was and at highly reasonable prices.

Lodha Group developed a “Customer Rewards Program” to help clients get more out of their properties, making it the first Indian real estate company to do so. They even introduced LEED accreditation for their commercial projects to demonstrate their legitimacy. Lodha Group pioneered the ‘invitation only’ technique of booking properties, breaking with tradition. Their residences were among the first and best with hi-tech homes and cutting-edge facilities, such as the ability for owners to operate electronic devices in their homes using their mobile devices.

Lodha was not just providing some of the most excellent properties to live in. It was also directly or indirectly enhancing the people’s level of living through some highly innovative ways.

Due to these and other unique techniques, a tremendous buzz was created about them in a very short amount of time, and the group began to receive an insane response from purchasers. Even though it was a reason to rejoice, Lodha did not allow himself to be distracted from his mission.

Currently, the Lodha group is working on 30 projects totaling 35 million square feet of land. One of these active projects is the World One Tower in Lower Parel, Mumbai, which will be India’s tallest skyscraper, with 117 stories and 7.1 hectares of land. Surprisingly, only a few of the flats in the complex were created by renowned designer Giorgio Armani. Abhishek and Abhinandan Lodha, sons of the Lodha family patriarch, now operate their father’s business.
The Macrotech developers is valued at Rs 5,968 crore for the fiscal year 2020-21. Great revenues necessitate great possessions, and M P Lodha is no stranger to luxury. During the fiscal year 2020-21, the company was estimated at Rs 5,968 crore. His current net worth is a staggering Rs 44,270 crores.

His phenomenal success in the real estate industry has won him a spot on several world’s wealthiest people lists. He is currently listed in some of the Forbes lists, including the top 50 richest Indians and 1000 billionaires worldwide.

Besides his real estate billionaire status, MP Lodha has also engaged in politics. He is the former BJP Mumbai Chief. He also runs the ‘Lodha Foundation,’ through which he has taken several initiatives to aid the less fortunate in education, healthcare, sports, culture, medical treatment, and vocational training.

The sheer weight of success with which the Lodha group has succeeded under MP Lodha affirms that Nothing is impossible — as long as you have the passion for making it possible.

Pre-launch or New launch? The right time to invest in Real Estate

Real Estate

Himanwita Mazumdar

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August 25, 2021

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Pre-launch or New launch? The right time to invest in Real Estate

Real estate is a great financial opportunity in general. It can provide continual passive income and, if the value rises over time, it can be a wise long-term investment. One may even incorporate it into your entire wealth-building strategy.

The terms “pre-launch” and “new launch” are two real estate terms that appeal to potential home purchasers. Investors, in addition to end-users, are interested in new launch projects. The sole reason for this is that purchasing a property at the pre-launch or new launch stage will ensure it is available at the opening price, far lower than when the project is semi-completed or ready to occupy.

What Is Pre Launch in Real Estate, and what are its advantages?

Builders may have a plan set up, but regulatory approvals have yet to be obtained. At this point, they announce the initiative, and some buyers may be willing to invest in a “pre-launch project.” It’s only a counter-proposal to a plot.

In a pre-launch project, the sales process begins as soon as the builder has all the necessary approvals. When buyers start booking and paying the deposit, the builder already has some funds in hand to begin construction as soon as the approvals are received. As a result, the builder may not need to rely on market loans as much.

Pre-launch projects are pretty appealing to homebuyers, particularly those who do not have enough money to put down even for a down payment. It is the most desired alternative when purchasing new homes because it is generally associated with cost savings in the first total cost of ownership. This is especially true for first-time homeowners, who are likely to be enticed by the builder’s pre-launch offers.

This entire process is fascinating, even though it is extremely risky. During the pre-launch stage, the pricing of residential developments will be cut by 30–40 percent. This is a significant sum in the real estate market, which is why many purchasers choose for pre-launch. These pre-launch projects will be available for sale at a far lower price than the ready-to-occupy projects. The primary advantage of pre-launches is the lower pricing.

However, there are a few things to consider before investing in a pre-launch project. It is necessary to ensure that the developer or builder chosen has a good reputation in the market. Before committing to a project, it is essential to investigate the developer’s reputation. What were the issues that prevented the builders from completing their previous projects on time?

Also, after the pre-lunch session, make sure that none of the preceding projects has experienced any significant design changes. It is risky to opt out in other ways because there is no legal or administrative validity. Selecting developers with a clean track record throughout time can assist in avoiding any unwelcome surprises during the ownership process. Also, one must ensure that the customers will receive the specific project they first signed up with, with no significant alterations.

How is New Launch different from Pre-launch?

A new launch is far more secure than a pre-launch. The main distinction is that there isn’t even a start date for legal and administrative approvals in pre-launch.

However, the approvals are in order with a new launch, even if the project isn’t yet complete. This is a guarantee for the money that has been put into the residential project. While the approvals are being processed, the project will be put up for sale.

These Pre-launches and New launches are used to entice homebuyers to a project while still planning stages. Although the process is not entirely risk-free, it can result in significant reductions and savings when purchasing a new house if done with caution and research.

Get introduced to different types of Real Estate Investors

Real Estate

Himanwita Mazumdar

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August 25, 2021

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Get introduced to different types of Real Estate Investors

Today’s most successful investors are clever, business-minded individuals who have discovered the shortest path to financial independence. Of course, there are different types of investors, but they do a lot more than just acquire an investment property when it comes to real estate investments. According to widely held views, there are four fundamental sorts of real estate investors. Each kind of investment, like any other, has its own set of rewards and drawbacks. But, first and foremost, What exactly is a real estate investor?

Simply put, a real estate investor is someone who adds a real estate asset to their portfolio on purpose. While many people think of a real estate investor as buying and holding rental property, that is only one type of investor. Real estate investors might put their money into a real estate investment trust (REIT), pursue a fix-and-flip investing strategy, or become wholesalers. Individual investors, institutional investors, and investors who fall somewhere in the middle are all possibilities for real estate investors. Individual investors would be counted as institutional investors in this situation, while banks and other financial entities would be counted as individual investors. Individuals can, however, form a real estate investment company that falls somewhere in between those two extremes of the real estate investing spectrum.

What are the different types of real estate investors?

REIT investor

The most passive method of real estate investing is through a real estate investment trust (REIT). One will similarly invest in this strategy to how you’d invest in the stock market. They buy stock in a real estate investment business and receive dividends when the company makes a profit. The shares of a publicly traded REIT will be listed and exchanged on major stock markets. A non-traded REIT, on the other hand, can be listed with the SEC even if it is not publicly traded or is a private firm.

The main advantage of investing in REITs is that, like stocks, it is accessible to anybody. You don’t need to be an accredited investor or have much real estate experience to participate. It’s as simple as buying and selling stocks in this scenario. REITs, in particular, are required to pay out 90% of their earnings in dividends.

The disadvantage of investing in REITs is that there is little control over what one has invested in or managing them. With this in mind, it’s critical to complete the homework before investing in a REIT. Also, REIT dividends are taxed as regular income rather than at a lower rate.

Buy-and-hold investor

Buy-and-hold investing, once again, is the classic example of real estate investing, in which one purchases an investment property and rents it out for a constant monthly income. This is, on the whole, a relatively active sort of real estate investing. It is a must to perform the legwork of finding a tenant, evaluating all potential applications, and being available to deal with maintenance issues. It’s also a long-term plan, as most investors acquire an investment property and maintain it in their portfolio for several years.

The ability to produce reasonably constant returns is one of the biggest advantages of a buy-and-hold investment strategy. Landlords may usually count on the same amount of rental money every month in this situation. There is an option of turning this into a more passive investment if one employs a property management firm.

The main disadvantage of this investment technique is that it requires a lot of effort for lower returns than other methods. In addition, as previously stated, if someone is an individual investor who hasn’t engaged in a property management business, they will be needed to take on landlord responsibilities willingly to collect any rental revenue, which can take a significant amount of time and work.

fix-and-flip investor

Then there’s an investment in fix-and-flip properties. In this case, the investor will make every effort to locate a real estate deal undervalued by the market. After that, they’ll fix it up and resell it for a much greater price. The investor keeps the difference between the initial investment and the ultimate sale price as profit after the buyer is located.

The essential advantage of this sort of real estate investing is that it can generate high profits if one finds the right investment opportunity. It’s also a short-term investment plan so that they may see a return in as little as a few months.

This is, nevertheless, an extremely active investment technique. In this instance, finding the proper real estate transaction is up to people and their real estate agent. Then it is a must to decide how to improve the property. If one can do the task themselves, they can typically get superior results. However, if someone is not handy, they need to factor labour charges into their budget. And finally, one has the danger of over-improving the home and losing money on the sale when it comes time to sell.

Wholesaling

On the other hand, real estate wholesalers will function as a middleman between a property owner and a final buyer. The goal of this investment approach is to identify a real estate acquisition that is undervalued. Then, without first repairing it, sell it for a greater price to an interested buyer. Thus, in this scenario, one gets to profit from the difference between the amount they paid for the property and the amount they sold it for.

In reality, this is a reasonably low-risk investment technique with the potential to yield a substantial reward. Wholesalers typically buy and sell properties on the same day to save money on holding charges. To make this work, one usually needs an established network of real estate connections to identify eager buyers and distressed sellers.

Is it wise to invest in Real Estate?

Real Estate

Himanwita Mazumdar

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August 25, 2021

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Everyone aspires to own properties. Nevertheless, Is it wise to invest in real estate?

Real estate can be a worthwhile investment that can compete with and often outperform stock market returns, but it is not without risk and effort. The following are some of the reasons why real estate investment is worth the effort.

There isn’t just one significant advantage to investing in real estate; instead, there are multiple advantages that, when taken together, make this asset class a good investment. A real estate investment, like stocks, can appreciate over time while also providing a source of cash flow from rental or mortgage income.

Unlike stocks, however, real estate is a tangible asset that can be leveraged while also providing substantial tax benefits, such as depreciation and tax deductions, which can help decrease capital gains tax.

Real estate investors rarely consider a single benefit as the only basis for investing but rather a combination of benefits. When other gifts of real estate are added in, the return is significantly bigger. It’s not uncommon for investors to obtain double-digit returns (meaning 10% or more) with an investment property. Still, when other benefits of real estate are factored in, the return is far greater.

It does, however, have some disadvantages. Real estate investments often necessitate a great amount of effort, especially if the investor intends to own or manage the property. Although outsourcing property maintenance or investing in a real estate crowdfunding opportunity can make it a more passive investment, real estate investing still involves effort.

Ongoing costs also accompany real estate ownership. Properties must be adequately maintained, renovated, and managed to protect the investment. The investor is responsible for paying annual property taxes and insurance. You have the added obligation of dealing with tenants if you own a rental property.

Real estate, like any other type of investment, is subject to market swings. Economic recessions have an impact on both the stock market and real estate. Reduced demand, excess supply, natural calamities, and vacancies can negatively influence investment returns.

According to a well-known quote popularized by the internet, real estate has produced 90% of millionaires. While this figure has yet to be confirmed, it is widely assumed that most high-net-worth individuals invest at least a percentage of their wealth in real estate. Real estate investing has a lot of potentials and can be an excellent way to diversify a portfolio.

It is ultimately up to the individual to decide if real estate investing is worthwhile. However, in most circumstances, the advantages and risks outweigh the disadvantages and hazards. It’s just a matter of determining the best investment plan and opportunity for your financial objectives.

Careful! These mistakes can jeopardise your Real Estate Investment

Real Estate

Himanwita Mazumdar

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August 25, 2021

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Careful! These mistakes can jeopardise your Real Estate Investment

The primary goal of most people who purchase real estate as an investment is to profit. However, there are times when you may buy a house without thoroughly examining all elements and estimating the actual cost. And if you do this, you might not receive the results you want, or worse, you might lose money.

Some of the most common mistakes that people usually make while investing in real estate :

Going without a plan

Purchasing a property as an investment can seem like a fantastic idea when one is in an excellent financial position. Professional real estate investors emphasise that adequate planning always comes before purchase, not the other way around. Rushing into a property purchase can lead to significant issues later on. Many first-time investors want to buy a house and then figure out what to do with it afterward. It is preferable to do the polar opposite. First, develop an investment plan, then look for properties that meet that approach. In hot seller’s markets, where homes are moving quickly, buying blunders are significantly more common.

Failure to assemble a strong investment team

Real estate investing isn’t something you can accomplish on your own.

To negotiate the very complex world of real estate investing, you’ll need a team of experts, including at least one experienced Realtor, a home inspector, and a mortgage lender. The selection of these individuals is critical to the project’s success. All of these persons are required because they are experts in their respective industries.

Not learning enough about real estate investment

Investing in real estate is complicated. There are a lot of moving elements in this. A set of rules and regulations governs it. To comprehend things sufficiently to make educated decisions, one must do their homework. Mastering real estate investing takes years of reading, researching, and hands-on experience.

Lacking knowledge of the local real estate market

All real estate is local. When it comes to being a real estate investor, one must be aware of the land value, home values, inventory levels, absorption rate, and average days on the market of available properties. These factors play a role in determining whether or not purchasing a certain home is a wise decision.

Not understanding cash flow

Maintaining enough cash flow to keep up with maintenance and repair demands is one of the most challenging aspects of owning rental properties. A rented property may need maintenance and repairs from time to time, and as the owner, you will be responsible for all of them. That implies they’ll need enough cash to deal with any problems that arise.

Not having multiple exit strategies

Most people plan for their property, but what about a plan B and a Plan C? Frequently, a programme does not work out as planned. If one does not have contingency plans in place, they may find themselves stranded with a property with no way out.

Spending too much on an investment

Many real estate ventures fail to make money.

Why? Because the properties were purchased at an excessively high cost. Once the money for a house is handed over, the buyer is locked into a scenario where their financial expenditure is fixed. Before purchasing a home as an investment, it is critical to speak with the appropriate professionals – such as a real estate agent – and conduct as much research as is necessary to feel reasonably secure in your decision.

Failure to finish due diligence

One must perform due diligence. Otherwise, they risk ending up with a home that drains their funds and leaves them with nothing.

Buying in the wrong area

One of the most common blunders made by investors is purchasing a home in the incorrect neighbourhood. This relates to the notion as mentioned above that all real estate is local. There will always be those cities or communities where selling real estate is simple. On the other hand, some communities will always be less desired and more challenging to deal with.

Making the wrong improvements

When buying a house to fix it up and sell it, the modifications you make will make a big difference. How they approach home renovations can make or break the project’s success. It’s crucial to know where to deposit the money.

Choosing the wrong real estate agent

Choosing the wrong real estate agent might lead to all of the above blunders. Many of the issues stated can be avoided with the help of a great real estate agent. Many real estate investors, like many others, do not take the time to examine the real estate agent they hire thoroughly.

Importance of workplace ethics in a business

Perspective

Himanwita Mazumdar

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August 25, 2021

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Importance of workplace ethics in a business

Not only do our actions have an impact on ourselves, but also on those around us. Many of our professional judgments are ethical. If we lie, we risk losing someone’s trust and jeopardizing our integrity. We can compromise the safety of others if we employ substandard products or quality on the job. Moral and ethical issues can be found at all levels of society. Ethical behaviour in the workplace is just as vital as it is in our personal lives.

Ethics are essential in all aspects of a business. Employees, managers, executives, customers, suppliers, and even competitors all rely on the trust of others to run a successful firm.

Workplace ethics ensures a pleasant working environment

Workplace ethics results in happy and content employees who look forward to work rather than seeing it as a chore. Employees develop a sense of loyalty and devotion to the company as well. Individual performance is measured by organizations using foolproof systems. The appraisal system creates the employee’s performance for the year in mind and professional development. Reviewing one’s work regularly is critical. Superiors are required to be aware of their subordinates’ activities. One must determine who is on the correct course and who requires additional encouragement.

Workplace ethics guarantees that management provides excellent guidance and mentoring to its employees

Appraisals and wage increases should not be done solely for the sake of the name. Workplace ethics are crucial because it allows management to treat all employees equally and think about them from their point of view. Employees must have a say in how their performance is evaluated. Transparency is necessary.

If an employee is not adequately acknowledged and compensated, they will leave within a year or so. When employees depart after being taught and move on, it is the organization’s loss. Employees switch jobs for two main reasons: career advancement and monetary benefits. Employees must feel safe in their jobs and careers, according to management.

Extreme favouritism is unethical in the job. If the favouritism towards an employee is simply because they are a relation, the rest will become demotivated and begin looking for new chances. The productivity of an individual for a year should determine their raise.

Organizations must retain and nurture talent according to workplace ethics. When a corporation hires someone, they must train them and make them aware of its core responsibility areas, policies, regulations, and code of conduct. Employees must be well-inducted into the system. From the first day, they must be aware of the organization’s policies.

Workplace ethics also help to develop relationships between employees and, most significantly, their supervisors

According to research, organizations that are impartial to employees, listen sympathetically to their issues, and are employee friendly are less likely to have disgruntled employees and a high attrition rate.

Nestle’s Ethical Values and Business Ethics

Nestle is a global leader in nutrition, health, and wellness. The corporation employs approximately 352,000 people and operates in practically every country in the world. People are more familiar with brands. The company’s portfolio includes market leaders such as Nestle, DRUMSTICK, NESCAFE, STOUFFER’S, KITKAT, Nestle GOOD START, Nestle PURE LIFE, and PURINA, to mention a few. Nestlé’s business procedures have been guided by integrity, honesty, fair dealings, and full compliance with all applicable laws since its inception. Since then, Nestlé employees worldwide have upheld and lived this dedication in their daily responsibilities, and Nestlé’s reputation has remained one of the company’s most valuable assets. Nestle’s Corporate Business Principles lay out a set of values and principles to which the company has remained committed worldwide.

Other MNCs’ Ethical Values and Business Ethics

The Tata Group has always aimed to be a value-driven business. These values still guide the Group’s growth and activities. Integrity, Understanding, Excellence, Unity, and Responsibility are the five key Tata values that guide our business practices.

SAIL’s (Steel Authority of India) mission is to be a respected world-class corporation and the industry leader in quality, productivity, profitability, and customer satisfaction in the Indian steel industry.

Maruti Udyog: Customer passion; flexibility and first-mover; innovation and creativity; networking and partnership; openness and learning are some of our basic values.

ONGC’s vision is to be a world-class oil and gas company with a global footprint and dominant Indian leadership.

Wipro’s Spirit is the company’s soul. Spirit is grounded in the present, but it also embodies Wipro’s aspirations for the future, making it future-focused. The Spirit is an indivisible synthesis of all three statements: Manifesting intensity to win, Acting with sensitivity, Remaining unwavering in your commitment to integrity at all times.

Reliance Industries believes that corporate activity can only be ethical if founded on the nine core principles of honesty, integrity, respect, fairness, purposefulness, trust, responsibility, citizenship, and caring. Growth is a form of health maintenance. For Reliance Industries, growth entails a commitment to safety, the environment, conservation, belief in our people, and willingness to go outside the box.

Infosys Technologies is a globally respected company that delivers best-of-breed business solutions using technology provided by best-in-class people. It achieves its goals in an environment of fairness, honesty, and civility to our clients, employees, partners, and society. Customer Delight; Leadership; Integrity and Transparency, Fairness, and Pursuit of Excellence are among Infosys Technologies’ ethical values.

Canon’s ethical ideals include: Fostering positive relationships with consumers and communities, Maintaining positive relationships with nations and the environment, taking responsibility for the influence of their actions on society.

Johnson & Johnson’s ethical values include: providing high-quality, timely service at a reasonable price to make a fair profit; respecting employees’ individuality while keeping in mind their job security and ability to fulfil family responsibilities; informal communication; just and ethical action; and encouraging community service.

Doing the right thing for the customer, people, environment, and society; Providing superior returns to our stockholders; and The customer is job one are among Ford Motor Company’s ethical beliefs.

Respect for individuals; IBM anthem; Devotion to customers; Lifetime employment; and Open door programme are all examples of IBM’s ethical ideals. Ethics is important to IBM because “doing the right thing” is good business.

Furthermore, high business ethics leads to:

Attracting superior talent.
Retaining employees.
Attracting new customers.
Retaining customers.
A positive impact on corporate reputation.

World’s leading oil company, Saudi Aramco standing tall and bold

Perspective

Himanwita Mazumdar

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August 25, 2021

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World’s leading oil company, Saudi Aramco standing tall and bold

Fossil fuels, particularly oil, have been the driving force behind global industrialization and trade. As a result, oil has had a long-term impact on countries’ economic characteristics, political agendas, and even culture.

Because of its power to influence oil prices, the Kingdom of Saudi Arabia (KSA) has emerged as a key regional player and a significant worldwide player. With 18% of the world’s proven petroleum reserves, it is the world’s most powerful oil producer and exporter.

Profit and market-oriented management, which is autonomous in daily operations, maybe why such businesses succeed.

Saudi Aramco is Saudi Arabia’s largest state-owned oil corporation, and it has become a global leader in hydrocarbon exploration, production, refining, distribution, and marketing. The study examines the organization’s strategies, product lines, local and worldwide operations, critical performance, recent IPO activities, and position in the Kingdom’s economic development and politics in the global oil market context. Aramco manufactures refined products and high-value petrochemicals for domestic and foreign businesses through a combination of its facilities and partner ventures.

Over the last 80 years, Saudi Aramco has established itself as a global leader in hydrocarbon exploration, production, refining, distribution, and marketing, with average daily crude production of 10.5 million BPD and natural gas reserves of 298.7 trillion SCF. The Kingdom’s primary export locations are located at ports on the Arabian Gulf and the Red Sea. At the same time, domestic demand is satisfied by a network of strategically located refineries around the Kingdom. Aramco’s headquarters are in Dhahran, Saudi Arabia, and the company has activities all around the country. More than 65,000 people work for the company around the world. China, Egypt, Japan, India, the Netherlands, the Republic of Korea, Singapore, the United Kingdom, and the United States have subsidiaries and affiliates.

Aramco’s business approach is based on strategic collaboration.

Saudi Aramco produces refined products and high-value petrochemicals for consumers and domestic and foreign industries through a combination of wholly-owned facilities and joint ventures.

In 2013, Saudi Aramco Total Refining and Petrochemicals Company (SATORP), a joint venture between Saudi Aramco and Total (France), finished its construction. The Saudization rate of the company is over 65%. In addition, the SATORP refinery is the Kingdom’s first producer of petroleum coke and paraxylene.

Yanbu Aramco Sinopec Refining Company (YASREF) is a Sinopec and Yanbu Aramco joint venture (China). Yanbu Industrial City is home to this world-class petroleum refinery with a daily capacity of 400,000 barrels.

The Rabigh Refining and Petrochemical Company (Petro Rabigh) is a joint venture between Saudi Aramco and Sumitomo Chemical (Japan). It also houses the Technical Learning Academy, which will train young operators and provide advanced skills to the Saudi workforce. Aramco has maintained its marketing and building cooperation with Sumitomo for the RabighPlus Tech Park, an industrial zone connected with Petro Rabigh. Manufacturers can establish factories to generate products using the latter’s petrochemical feedstock.

The Jazan Refinery and Terminal, with a capacity of 400,000 barrels per day, will serve as the project’s industrial centre. It’s also part of a larger strategy to promote the Kingdom’s long-term economic growth while also providing job possibilities for Saudis.

Sadara Chemical Company is a joint venture between Aramco and Dow Chemicals Company, and it is an integral part of Aramco’s plan to become the leader of a worldwide chemical. Sadara, which is based in Jubail Industrial City, has a production capacity of 3 million tonnes of performance plastics and high-value chemicals per year. In 2015, the company started producing. Sadara, with its integrated PlasChem value park, will serve as a hub for chemical conversion facilities, manufacturers, and related service businesses. The project is projected to improve Saudi Arabia’s ability to produce various chemical commodities and create direct and indirect jobs.

Why was people’s car rejected by the people?

Perspective

Himanwita Mazumdar

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August 25, 2021

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Why was people’s car rejected by the people?

Mr Ratan Tata’s most ambitious ambition was to give India the car it deserved amid all he has ever undertaken. The goal is to provide people with modern, safe mobility. It was taking the middle-class Indians off their scooters and placing them in a secure four-door vehicle. A modern-day, twenty-first-century “people’s automobile” was supposed to spark a revolution on par with Ford’s Model-T. The Tata Nano, to be precise.

The car’s name was Tata Nano, and it made its premiere at the 2008 Auto Expo in India. It’s a name that we’re all too acquainted with now for all the wrong reasons. The primary purpose was to provide a car for the masses, a “1 Lakh Rupee Car” that the general public could afford.

However, no sign of that ‘dream project’ can be found now, as Tata Motors discontinued the Nano during the 2018-19 fiscal year when sales began to decline. What went wrong with the Tata Nano is detailed here.

Tata Nano received a lot of praise when it first came out since it was something completely new. It was thought to be a fantastic idea at the time. Unfortunately, this technology was unable to become a ‘game-changer.’

The lack of a proper plan for a product like this was the reason for it. For starters, Tata Motors could not reach its target market because its dealer network was limited to metropolitan regions, whereas the target market was concentrated in towns and villages. The company was unable to bridge the gap between its target market and the car-buying experience.

The problem was made worse when the project was delayed for eighteen months due to relocating the production plant from Singur, West Bengal, to Sanand, Gujarat.

The Nano was touted as a “One lakh Rupee” automobile; however, Tata could not maintain that pricing over time. The on-road price for a base model Nano began to hover around 2.59 lakhs, defeating their marketing strategy.

Tata Nano was always a product that Tata Motors thought the customers needed, and it was never the result of a customer needs assessment exercise. This strategy did not bode well for Nano’s sales.

The Tata Nano was promoted as the “world’s cheapest automobile.”

Unfortunately, the Nano’s strategy backfired, as it quickly earned a reputation as a “cheap car” among consumers who don’t want to be linked with a low-end vehicle, particularly in the urban sector. To avoid being connected with a “cheap automobile,” Indians were seen opting for a used car from a higher segment rather than purchasing a Nano.

The Tata Nano has excellent qualities such as a compact fuel-efficient engine, adequate space to seat four persons, high ground clearance comfortably, and solid and robust enough for lengthy trips.

However, the car encountered numerous mechanical faults throughout its initial manufacturing run, contributing to its downfall. Several Tata Nano automobiles caught fire owing to poor wiring within the first two years of production. Because of its small weight, the Nano suffered poor riding comfort and stability difficulties. Tata intended to make the automobile as inexpensive as possible, to the point where it affected the usage of cheap and insufficient materials, resulting in poor build quality.

The Tata Nano was a failure to be the creative automobile it was envisioned to be. It is still regarded as one of the biggest catastrophes in the Indian automotive industry’s history.

How did it all go wrong for Jet Airways?

Perspective

Himanwita Mazumdar

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August 25, 2021

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How did it all go wrong for Jet Airways?

Once the country’s largest, the first private airline in India, with unparalleled earnings, expansion, and demand, was none other than Jet Airways. Everything was going well for them until a terrible decision in 2007 caved their way towards diminishment.

In the early 1990s, India’s aviation market was deregulated. Naresh Goyal, an Indian travel entrepreneur, started Jet Airways in 1992. With Gulf Air’s help, which was the official airline of much of the Gulf, and Kuwait Airways. They didn’t start as an airline but rather as an air taxi service that used Boeing 737s to transport passengers on demand.

They were formally allowed to conduct scheduled passenger flights a few years later, in 1995. For the first time, Air India’s domestic subsidiary, Indian Airlines, had a competition. Jet Airways placed its first aircraft order with Boeing in 1996 for ten planes. They had already surpassed a 20% domestic market share that year. Unfortunately for Jet Airways, the government prohibited foreign airlines from investing in Indian airlines in 1997. Naresh Goyal, the airline’s founder, had to buy it back. The loss of experience from these international airlines may have played a role in Goyal’s poor decisions in the years that followed.

The airline experienced a lot of development in the following years; however, some years when it declared losses, which is to be anticipated of a rising airline. The airline began international flights in 2004 after receiving many major orders and improvements to Indian aviation legislation.

It was India’s largest domestic airline at the time. Then, in May 2005, they began flying to London, a giant stride for a young airline. Jet Airways was still India’s largest domestic airline in 2006, and their intention to buy Air- Sahara will only increase their size. Jet Airways presented a $500 million claim. Still, the government – unfamiliar with private airline mergers due to the market’s recent deregulation – took its time putting up new merger regulations, and the deal eventually fell through.

In 2006, air share was having financial difficulties due to unpaid leases on a number of planes. Some of them had been neglected to the point where they were no longer airworthy. They finally reached a new arrangement in 2007, for what appeared to be a better price of a few hundred million dollars rather than half a billion dollars.

Jet light was the new name for Air Sahara. Jet Airways grew in the years after that, eventually forming a co-chair arrangement with another full-service carrier, Kingfisher.

Both of these airlines were struggling financially at the time. This alliance aimed to gain greater economies of scale by integrating ground handling and other costs and reducing competition by working together to optimise scheduling.

Meanwhile, advertisements for low-cost airlines such as Indigo, Spice Jet, and GoAir began to sting. Jet Airways dropped ticket costs to compete with them. Forbes ranked Goyal as India’s 75th richest man in 2009, with a net worth of $700 million. This fueled an expansion drive, which ultimately led to Jet’s financial collapse. Jet has faced significant losses as a result of increased fuel costs and high taxes.

When the government approved foreign investment in the Indian air space in 2013, Naresh Goyal, the board of directors and chairman of Jet Airways, requested Etihad Airline, one of the world’s largest airline companies, to invest $380 million Jet Airways for the company’s future expansion.

Indigo continues its march amidst increased competition while Kingfisher is drowning, and Jet Airways is buried under a mountain of debt. Jet’s death was near as the debt burden became too great, and Indigo morphed into the long wolf, devouring all in its path. Throughout these years, the airline has operated at a far higher cost than its competitors, and it has paid higher salaries to its personnel. It pays more for almost all of the services it outsources than its competitors; it has greater sales and distribution costs than competitors; it has been paying commission to JetAir Pvt Ltd, owned by Naresh Goyal, continually.

The company’s operation structure becomes jumbled from 2013 to 2018, the reserves and net profit plummet and turn negative, and the general structure of the organisation deteriorates in 2018. Jet Airways experienced a major crisis at the start of 2019 when it could not pay its employees’ salaries. Jet also suffered a big loss of more than INR 32 billion.

Jet’s control over the company has come to an end. Goyal has been punished for his managerial style as well as his poor investment selections. Goyal was unable to address the company’s financial problems, and Jet could not find a major sponsor.

With nearly $4 billion in debt, Naresh Goyal and his wife both resigned from the company’s Board of Directors and decided to take over the problem to SBI Chairman Rajnish Kumar & Co. Both the ministry and Rajnish Kumar have vowed to provide more planes for Jet to save it from bankruptcy and that they will find someone to buy it.

Naresh Goyal has undoubtedly taught other airline businesses the importance of striking the right balance between short-term price cuts to attract customers and long-term investments and expansion ambitions. In the near term, capturing the market can put a company out of existence.

Ethical values over money, IKEA shows the way

Perspective

Himanwita Mazumdar

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August 25, 2021

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Ethical values over money, IKEA shows the way

If you’ve ever visited an IKEA shop, you know how difficult it is to depart promptly. You didn’t realize you needed five new dishtowels, but now you have them. All of this is the brainchild of the late Ingvar Kamprad, a Swedish businessman who dreamed up the concept of a store filled with practical, easy-to-assemble furniture.

IKEA started as a mail-order company in 1943 when Kamprad was 17 years old, sold pens, lighters, and binders to customers in Sweden. Five years down the line, Ikea got into the furniture business. IKEA’s mission became to provide a wide choice of well-designed and functional home furnishings at costs that most people could afford. Customers liked the catalogues, prices, and quality of IKEA furniture, as well as the chance to touch, feel, and view it in showrooms. IKEA had grown to become the world’s largest specialist furniture retailer by the mid-1990s, with over 98 locations in 17 countries. IKEA currently has 456 stores in 50 countries, according to its website.

When it comes to the company’s ethical code, IKEA strives to improve the lives of all of its stakeholders, including customers, employees, suppliers, and community members. It accomplishes this by implementing ten fundamental values, a compelling vision statement, and a supplier code of behaviour. IKEA’s values have guided the company’s actions. For example, the firm aims to avoid using materials from protected forests in its goods, aligning with IKEA’s responsibility principle.

IKEA has a sustainability policy that considers both people and the environment. By 2030, the strategy is to achieve a series of long-term strategic targets aimed at improving IKEA’s impact on communities and the environment. By 2030, the aim is to transform into a circular business and reusability to reduce future waste. For example, IVAR and BROR storage systems are built of wood and can be easily treated or repaired, with more pieces added as needed. As people’s lives and tastes evolve, they might enjoy things like these.

In 1992, however, a German newspaper and television company discovered that IKEA’s best-selling bookshelf series contained emissions that exceeded German law. Instead of disregarding the problems, it is clear that the organization is continually seeking methods to improve its business process. This was IKEA’s response to the social issue; the firm chose to deal directly with the suppliers. The corporation collaborated with many groups, including Greenpeace and the World Wide Fund for Nature, and even recruited inspectors to establish new supplier criteria. The corporation might have easily chosen to disregard the problems and keep making money. It was this time about the company’s use of high quantities of formaldehyde in its products.

The firm looked into ways to deal with the issue. This time, it was the lacquer on the bookshelves, and IKEA promptly halted manufacturing, costing the firm up to $7 million. Although this had a severe financial impact on the company, IKEA’s stakeholders prioritized ethical values before profits. Another issue arose for the international corporation in the early 1980s. Suppliers, however, continued to fall short of the company’s expectations.

Child labour can be considered a clever economic move for domestic and foreign firms; IKEA recognized the negative implications of child labour and how it creates more harm than good.

One year after IKEA began to address the issue of child labour, a German documentary maker uncovered underage children working at Rangan Exports, one of IKEA’s major suppliers.

IKEA also began collaborating with Swedish Save the Children and UNICEF to understand better the issue of child labour in countries such as India and Nepal, where many of their suppliers were situated.

Outsourcing production to other nations raises the likelihood of a company using child labour.

Child labour’s implications must be well understood by both domestic and multinational businesses and how to avoid it at all costs. Many local and foreign corporations, whether knowingly or unknowingly, use children as a significant source of labour. The corporation even hired a third-party monitoring organization to keep an eye on child labour violations at supplier locations. In 1994, a Swedish television program revealed that IKEA used child labour in Pakistan to weaving looms.

Big businesses will continue to face social, political, and economic challenges. IKEA is an excellent example of a multinational corporation whose business actions are influenced by its motivations. It is clear from IKEA’s actions that the corporation values both its customers and the process of producing things for them. The company combated competition corruption and implemented remedies to reduce the company’s environmental effect and unethical child labour practices. IKEA recognizes that consumer trust leads to positive growth, regularly improving its social, political, and economic impact.

IKEA’s ethical values serve as guidance for the company’s decisions. These beliefs seem to be shared by both staff and customers, as many of them are devoted to IKEA.

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