Tuesday, 21st July ’20
Good morning, allow this Tuesday to give you fresh air of creativity, enthusiasm, and productivity.
We continue to stand strong waiting for the vaccine to reach everyone soon. There have been positive indications on that front. This positivity has also brought back a little push to an injured economy. Also, let’s pray together for the floods to subside in the North East.
MARKETS
Markets: Oxford vaccine has shown positive results in trials and this would help the international market cues to improve further. Reliance Jio seeks spectrum for 5G trials. Indigo to lay off 10% of its workforce, yet another example of adversely affected industries.
Economy: Container cargo handling has dropped over 30% in the April-June quarter in India’s 12 major ports according to Indian Port’s association. This reduced trade will continue to have an adverse effect on the economy in the upcoming months. Also, to note is that India had a trade surplus this quarter after 18 years.
TECHNOLOGY & INNOVATION
- Exports through Amazon reached $1 billion in the last 18 months. This comes as there is a surge in exports during Corona. The cumulative exports stand at $2 billion. The most prominent export categories include home, health, and personal care, apparel, jewelry, and kitchen. There have been around 60,000 MSME exports through Amazon.
- Facebook has signed a music licensing deal with the Indian Performing Rights Society(IPRS) to strengthen its music libraries across its platforms. This especially comes as they look for music in their pilot project Instagram’s short video feature, Reels(alternative to Tik Tok). IPRS chairman Javed Akhtar said that this will create opportunities for musicians and artists. FB has signed a similar deal with Saregama.
- Jack Ma controlled fintech company Ant group is preparing for an IPO on Hong Kong stock exchange and Shanghai stock exchange. The market had been anticipating this for years. The Ant group controls the Alipay wallet. The major goals are to digitize China’s service industry and to expand in new countries.
WHAT ELSE IS COOKING
- University of Oxford’s COVID 19 vaccine has shown positive results in the large scale human testing. The vaccine has boosted a protective immune system and is designed to reduce the disease and transmission. The trials in India are anticipated to begin next month.
- Indian IT firms have brought back around 2000 stranded employees from their client’s locations in the US and Europe. Companies including TCS, Wipro, and Tech Mahindra have a significant number of employees primarily in the US, and other countries like the UK, Japan, and Australia that were struck due to the cancellation of flights.
- US- India warships conducted a joint exercise near the Andaman and Nicobar archipelago. This sends strong strategic signals amidst the aftermath of the China-India faceoff in the Galwan Valley. Recently a US carrier had conducted a joint exercise in The South China sea under the “Freedom of Navigation” mission rallying support against an expansionist China.
IN-DEPTH ANALYSIS
US H1B visa ban
Why is it in the news?
- Indians receive 70 per cent of all the H1B visas issued by the US every year.
- US withdrew the generalised system of preference trade privilege, which had been granted to India in 1976.
What do the numbers say?
- Indians received 71 per cent of the 388,403 H-1B visas in 2019, a majority of them in the IT sector.
- India’s business in the IT/ITES industries, which is to the tune of $190 billion, will be largely affected.
What are the reasons?
- Spurious unemployment data and incorrect correlations have been used to make it appear that H-1B holders are responsible for the 20 million American job losses in 2020.
- In the last five years, the number of H-1B visas issued to top Indian IT services providers is estimated to have declined to more than 60 per cent.
- Apart from Protectionism, the failure of Indian IT firms to take a stance against this move and providing increased employment to US nationals hasn’t helped.
How to make things better?
- Follow the stance of Sundar Pichai en masse showing solidarity with Indians and other immigrants. Pichai recalled that “Immigration has contributed immensely to America’s economic success.”
- Indian IT giants should take it upon themselves to ameliorate the condition of the Indian IT professionals either stuck in India or recently laid off as well as recent graduates for whom it’s a deplorable race against time despite their competence.
- Diplomatic intervention is required to remind the US of the People-to-people linkages and trade and economic cooperation, especially in technology and innovation sectors, being an important dimension of US India partnership and that this ban violates their own commitments under GATS of the WTO.
MANAGERS’ CORNER – Strategy Zone
GE McKinsey matrix
The GE McKinsey matrix is a nine-box matrix which is used to manage a number of business units profitably. This technique is used in brand marketing and product management. The analysis helps companies decide what products need to be added to a product portfolio as well as what other opportunities should continue to receive investments. Though similar to the BCG matrix, the GE version is a lot more complex.
A company can judge a unit by two factors – the attractiveness of the relevant industry and the unit’s competitive strength within that industry. The steps to follow while using this framework are :-
- Determine the industry attractiveness of each SBU
- Determine the competitive strength of each SBU
- Plot the information on the GE McKinsey Matrix
- Identify the future direction of each SBU
- Choose where to invest or harvest
THE MILLIONAIRE MINDSET
- Knowledge Check- Push Back: To indicate to a superior Consultant that something is difficult or challenging and may not be realistic. While it is intuitive to take on more than you can chew in your initial years in order to evince leadership traits, being able to push back effectively when a manager may be overpromising or unrealistic is an important, delicate skill. Pushing back can also be done if the Consultant is being overworked and feels “stretched too thin.” There’s a way to do it though and it involves delineating your current deliverables and the respective time involved in each rather than demurring outright. It must be mentioned that pushing back depends on the stage in your career and the norm in your company.
Written by Akansh Bhatt and Shashank Dobhal
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