Issue 1

Infosys partners with Rolls-Royce, bringing future career opportunities to the Mysore/Bangalore region

Infosys has announced that it is collaborating with Rolls-Royce, an aero-engine and power plants manufacturing company headquartered in the UK.  

This partnership will enable Rolls-Royce to integrate their expertise in Civil Aerospace Engineering – with digital capabilities like Industry 4.0, additive manufacturing, and predictive analytics.

The current production systems of Rolls-Royce are extremely complex and highly specialised. There’s a lot of equipment, operational systems, and local know-how involved. By digitizing every step of the production system –  Infosys creates a system that is easier to define, manage, upgrade, understand using data-analytic tools.  

Through this joint initiative, Rolls-Royce and Infosys will be better placed to do business across the globe. And Bangalore and Mysore will benefit from many more highly-skilled jobs coming into the region – particularly in the areas of data analytics and information management. 


IKEA to adopt omni-channel approach for expansion into India

IKEA is a Swedish company with a strong global presence. It is known for being a favorite case-study topic among MBA students. It is also known for its affordable and ergonomically-designed Scandinavian-style furniture that is assembled by the customer themselves. Their stores are often massive and warehouse-like, and a family can easily spend an entire day shopping. For generations, people around the world have sipped their morning coffee in POANG chairs and stored their storybooks in BILLY bookshelves.  

Recently, they began their expansion into India. In August 2018, they launched a store in Hyderabad. Stores in Bengaluru, Mumbai, and Delhi are planned – and their target is to reach 100 million people in India by 2022.  

They plan to do this by focusing on big IKEA stores, smaller city-center showrooms, and online platforms. To link all these together, they are employing an omnichannel strategy – a multi-channel approach to sales that focuses on providing a seamless customer experience, whether the customer is shopping from their phone, their laptop, or in a physical store.  

For example, IKEA has recently introduced a “click and collect” contactless system for purchasing furniture which was popular during the early days of the pandemic. They have also started offering web-based consultations and planning-services for kitchens, offices, and bedrooms – which is similar to what their competitors like Homelane, Pepperfry, and LivSpace are doing.  

It’s important to understand that many potential Indian customers are first-time digital users and hence need extra support online. Companies need to make sure that they have clear communication, detailed online product descriptions, honest customer testimonials, fast and efficient delivery, and simple payment portals. 


Salesforce acquired Slack to better compete with Microsoft

In one of the biggest tech mergers, cloud computing giant Salesforce has acquired workplace chat app Slack for $27.7 billion. It plans to plug the communications service into its own software suite.  

Slack was founded in 2013 by Steve Butterfield (founder of Flickr). Just 18 months after launch, Slack reported having more than 1 million daily users. It had a very bold advertising pitch – it was going to “kill email” or eat least, reduce reliance on it.

The acquisition of Slack allows Salesforce to better compete against Microsoft, which has bundled Microsoft Teams (a copy of Slack) into Office 365 – essentially giving it away for free.

Was this a good move for Salesforce?

After all, in a few years, the workplace may look quite different – and there will be a whole host of new tools to help workers manage increased work-from-home situations. It’s also a highly competitive global market – with very big players.

And the productivity software comes and goes. What is popular today is obsolete tomorrow. The rise of smartphones in the early 2010s brought with it lots of new workplace productivity tools. Box and Dropbox for file storage and sharing. Evernote for cloud-synchronized notetaking, Basecamp and Asana for workflow-management, and Sunrise for a social calendar. Out of all those, only Dropbox is currently doing well.


Tata is ready to buy Big Basket for big money

The Tata group is ready to buy an 80% stake in BigBasket for around $1.3 billion, valuing India’s largest grocer at around $1.6 billion. The Tata group is likely to buy 50-60% from existing investors, including Chinese retail giant Ali Baba. Tata will also infuse fresh money into BigBasket by buying new shares of about 20-30%.   

There have been around five months of negotiations – which have been led by Goldman Sachs.  

Tata’s main objective is to win over a very large market share – in one shot.  Their strategy is to establish a “beachhead” in India’s e-commerce market amid a surge in online sales because of Covid. It is very clear that customers are opting to shop online to avoid physical contact due to the fear of the virus. And in the future, Tata will likely release a “super app” that will sell BigBasket’s household items and grocery products – in addition to fashion and electronics, insurance, financial services, education, healthcare, and bill payments.  

Delivering groceries online is also an easy way for Tata to get consumer phone, numbers, home addresses, and buying preferences very easily. This itself is a valuable resource – as Tata can track consumer behavior and gain big-data insights. This puts them in a strong position to compete against Reliance Industries, Amazon, and Big Bazaar – who are also taking similar steps in acquiring a diverse group of online services. 


Why unchecked and runaway inflation stands in the way of India’s growth recovery.

Due to the pandemic, the Indian economy is sinking. People are under financial stress, large sectors of the economy have suffered, and banks are not getting their loans repaid.  The economy needs a push.  

And food prices are rising despite increases in food production – but this can be explained as the supply chain has been disrupted due to pandemics and restoration of the supply chain may bring relief.

Eminent economists like  Raghuram Rajan and Krishnamurthy Subramaniam are not concurring on what should be done. So what are the policy options for   Shaktikanta Das (Governor –  RBI )?

He has already reduced interest rates to give more liquidity to the banks. He is also printing more currency notes to give more capital to the banks. This is known as deficit financing.

The way to revive the economy is through calibrated deficit financing. By putting more money into the system (by reducing interest rates and printing more currency) so that banks, start-ups, agriculture, and infrastructure projects have capital. This will jumpstart economic activity, create jobs, and put money into the hands of the people.  

But how do you carefully plan and calibrate this deficit financing? How much financing should be given to enthusiastic start-ups that can give quick returns? And how much should be invested in infrastructure projects like roads, airports, seaports, and powerplants – which are capital intensive and only offer long-term returns?  

Suppose that all the money is put into infrastructure – it will take many years to pay back. And during the long gestation period – the rupee will go down in value rapidly, which will create widespread distress and jeopardize people’s savings.

Runaway inflation has happened in many countries.  Economists and policymakers must make sure this doesn’t happen in India.

They can allow for graduated inflation in order to jump-start the economy – but the rupee needs to be kept reasonably stable. Careful and calibrated deficit financing is the way towards economic revival.  Balanced financing of start-ups and infrastructure may be the correct path for revival. Finding this balance will be key.