China Rout (Revisited) 2.0

Almost all headlines across all Financial papers, economy-related discussions, whether online or offline start with ‘China’. It’s like the world’s sneezing just because China has caught a cold. A very, very bad cold at that!

In my earlier blog published in late August 2015, titled “Is the Chinese Dragonlosing fire?”, I had traced China’s growth path over the past 4 decades and the bottlenecks thereafter it faced that eventually stalled its growth. The fallout then wasn’t as severe for the Rest of the World as it is now. Yes, there were losses to the tune of billions of dollars due to Shenzhen and Shanghai stock market crashes, but prospects then didn’t seem as bleak as now in 2016.

So, what’s wrong with China?

The world’s most populous country has a growth rate even now that’s still faster at 6.5% than USA’s 2.5%. The Chinese numbers, the world feels, is significantly inflated and either the top leaders are incredibly good at meeting the targets or the analysts in China are too scared to reveal the truth. The Shanghai composite indexes plummeted 15% at the start of 2016 and since then stock markets world over seem to be under a Bear grip.

China's industrial production slowed last year. Yet borrowing jumped a further 5 per cent as banks pumped more and more money into less and less economic factories, housing schemes and loss-making businesses. The message that the government sent was investment in real estate is fine even if the world does not have the appetite for its manufactures, according to Sydney Morning  Herald. China aimed to keep inflating its GDP even if the houses they built went unoccupied. Unfortunately there’s more capital outflow from China than inflow. Investors are not as keen on China, and local Chinese are stashing their money abroad. China’s president, Li Xinping’s authoritarian attitude isn’t helping either.

Solution to this persisting conundrum:

There’s a possibility, according to Bloomberg Asia that reserve requirements of Chinese banks may be cut which will increase liquidity of banks who can therefore lend more. The question however remains, are there companies who have the appetite and the need to borrow more? Inept communist policies have to be redrafted, private debt within the economy needs to be reduced, and more importantly market needs to have a free hand to work the Yuan

The world went into turmoil with the US subprime crisis in 2008, followed by Eurozone meltdown. Now the Chinese seem to be riling the world with its worst economic performance in 2 and half decades. All major stock markets will get shaken since the correlation between their performances is quite high. Well, let’s sit this one out and wait for reassuring financial news sooner rather than later.

               

-         -Ms. Monica Mor

Sr. Faculty, INLEAD

Are you a BRAND ?

“If you don’t show up on Google, you don’t exist!”

The statement above is as true and scary as it sounds. How people perceive you has always been vital to a successful career. Now with the internet, social media, and the unrelenting purr of 24x7 businesses, the ability to brand and promote yourself effectively has become absolutely essential. No matter how talented or skilled you are, unless you are visible to the key players in your industry, or until managers can see your talent and think of you as an invaluable employee, a game-changer, or a person whose name is synonymous with success, you don’t exist. So, how do you stand out and get ahead?

This is where Personal Branding comes to our rescue. It is about marketing the product “you” by figuring out –

1. What your values, skills, and passions really are
2. Who you want to help, and What makes you different from others
3. If you want to have a great personal brand, it also needs to be memorable, consistent and help you achieve all of your personal and professional goals.

So, how to go about creating a truly memorable brand?

Discover your Brand

The first step in creating a memorable personal brand is to discover yourself, who you really are and what you really want to achieve. This can often be the hardest and the most time consuming part, but a strong start on this can make all the difference in the long run. You will need to consider what you want to gain from your brand and this starts at basic needs such as financial success, but also includes what your actual dreams are for your brand and what some day you wish to be proud of.

Next are your values - the core principles that drive you forward, they are the standards that you set for yourself, surrounding your actions and attitude. Another important factor in your brand is your passion. What are you passionate about? What will keep your energy levels up and determine how you spend most of your time?

Having a Brand statement is the next step. This is important in order to set a bar for yourself that you know you can't fall below, but it also allows others to see where you are coming from and what your brand stands for. 

Strengths and personal attributes can be interconnected. Your strengths are the abilities and interests that create a consistent positivity in your life in some way. These are the strengths that you must use to get your brand out there and really sell it apart. This also ties into your education and experience. These are often secondary but can lead you to gain more trust from potential clients or customers, or even colleagues.

You also need to research your competitors and find out what makes you unique. What can you do that others can't? What are you passionate about that others see as essential? This will set you apart.

Building your Brand and Creating Buzz

One of the most important things you need to figure out for your brand is your target audience. You will need to create a statement to this effect so that anyone interested in your brand will know exactly why you are unique and important.

Note – Your brand is a representation of yourself and vice-versa. It is essential that you are honest with yourself and honest about what your brand is about. Honesty is the real strength behind any brand.

You can use a number of Brand Building Tools to showcase your Brand – Business Cards, email ID, Facebook, Twitter, and LinkedIn are some of the prominent brand building tools that aid creating buzz about your personal brand among your target audience.

“Your personal brand is what people say about you, when you have left the room.” – Jeff Bezos (Founder & CEO – Amazon)

- Mr. Sumit Chakravarty
   Faculty, INLEAD

Images Courtesy- Google Images 

The Crossroads of Ethics

“It takes less time to do things right, than to explain why you did it wrong.” – Henry Wadsworth Longfellow

Quite aptly, the statement above sums up the importance of doing the things right, what we call an ‘Ethical Business Practice’. Ethics in business can be compared to the Sun in our solar system. Like all the planets revolve around the Sun, businesses must revolve around, and absorb the energy from Ethics; else they’ll fall into a Black hole of defamation and losses. With the world becoming a marketplace, and the competition growing day by day, following the path of business ethics has become all the more imperative. While it is quite easy to slip into unethical practices, which many businesses resort to in order to grow, sustainability of a business is directly correlated to the moral values and promises the brands carry towards their consumers.

Reputation is one of a company’s most important assets, and one of the most difficult to rebuild, should it be lost. There are examples of blatant, non-ethical behavior, and probably one of the most high profile ones, is the Enron collapse. Enron, once a sleepy natural gas pipeline company, grew to become the nation’s seventh largest publicly-held corporation. But its shoddy business practices, aided by bankers and advisors feeding from the gravy train, brought down the company in December 2001. Their stock dropped from $70.00 a share to $0.25 a share within a year. Altogether, 16 former Enron executives including the then CEO Jeff Skilling had been sentenced to prison (Source: Forbes.com).

Enron’s heyday has long ended. But its lessons will long endure. Surely, if there are profits to be made, some type of scheme that attempts to skirt the law or even cross boundaries will occur. It’s been that way throughout history. But with each passing scandal, new rules and codes emerge that surpass those of the past. And while Enron won’t be the last case of corporate derelictions, its tumultuous tale did initiate a new age in business ethics. Another example from our very own country is the loss of face and worth Nestle India had to suffer recently, following a row on adulteration. Struck by an exceptional item charge of INR 451.6 crore on account of withdrawal of stocks of Maggi noodles, Nestle India reported a net loss of INR 64.40 crore for the second quarter ended June 30, 2015, — its first quarterly loss in at least 17 years( Source: The Indian Express).

Ethical behavior and corporate social responsibility can bring significant benefits to a business. For example, they may:

• Attract customers to the firm’s products, which means boosting sales and profits
• Attract good talent and retain employees, reduce labor turnover, and therefore, increase productivity
• Attract investors, keeping the share price high, thereby protecting the businesses from takeovers

- Mr. Sumit Chakravarty

  Faculty, INLEAD 

Images Courtesy: Google Images