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Value Based Management

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What gets measured, gets analyzed.And what gets analyzed, gets acted upon. It is paramount to measure a business's performance. A lot has been discussed on how to effectively manage and monitor a business. Value Based Management (VBM) is an approach that ensures that corporations are run consistently on value. VBM includes the following aspects: 1)  Creating value: Implementing strategies to generate sustainable returns.
2)  Managing for Value: by Governance, communication, leadership etc.
3)  Measuring value: by using Metrics, Dashboards etc.



Now, we need to have a clear action plan on how to implement VBM for a business. For ease of implementation, VBM can be broken into 3 sub-parts which can be individually implemented and taken care of. This post will discuss in detail on how to apply VBM in a business.

Value Based Management = Balanced Score card + Economic Value Add + Activity Based Costing or in short; VBM = BSC + EVA + ABC

Thus if a business maintains a Balanced Score Ca…

The 4 point Likert Scale

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I have always grown up with the idea of a 5 point Likert scale. But recently in my Market Research class, our prof. introduced us to the concept of 4 point Likert scale.
Likert scale is a very popular rating scale used to determine a respondents' agreement level.
The following image shows an examples of a 5 point Likert scale:



Likert scales are odd numbered scales. Most commonly used is the 5 point scale, some researchers also use the 7 point scale. Now, at times there are situations when a respondent chooses the 'Neutral' option in a 5 point Likert scale. Researchers have started using a 4 point scale in which there is no neutral option. This is done in order to extract a specific response from the respondents.
For the scale shown in the pic above, a 4 point Likert scale will have the following options:
Strongly agree, agree, disagree, Strongly disagree

Are you left-handed?

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Yesterday over lunch, my friend told me he is ambidextrous i.e. he can use both of his hands for writing. I was amazed at this and he told me that he used to write with his left hand when we was young and his parents forced him to write with his right hand. It does not matter really if someone is right handed or left handed. However, for a sportsman being left handed can be an added advantage. Let’s access how?



Research shows that 90% of the people are right handed are 10% are left handed. Assuming that the same holds true for sports in general as well. For sports like boxing, tennis, cricket, wrestling, badminton etc. where there is direct contact with the opponent or the mode of delivery has a significant impact; being left handed can really pay off. Practice is an essential part for any sportsperson. If one is left-handed, he/she will have most of the practices with right handed players (remember 10% left-handers). Thus the left-handers will be better equipped to face right-hander…

The fingerprint hidden in our words

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Researchers have concluded that there exist certain patterns in the way we write. Presenting here a beautiful example: Back in 1788, there were a group of three writers who individually authored 85 papers on US constitutional reforms. Suppose the authors were A, B and C. Now, the papers did not have the names of the authors. It was a popular belief that 51 of the papers were authored by A, 14 by B and 5 by C. This still left 15 papers unaccounted for.

Now, it was to be found who wrote the disputed papers. Various linguistics were asked for help. But since the papers were on varied topics and the writing styles were not very disparate, there was no definitive outcome. Now, arithmetic was tried to solve the riddle. The average length of the sentences was tried out, but the average varied from paper to paper. There was no definitive trend which could separate the authors. The use of various words like ‘while’ and ‘whilst’ was tried, that could not help as well.

Summation of ‘n’ natural numbers

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We all know what is the formula of the summation of ‘n’ natural numbers? Ask even a kid and he will promptly reply: n(n+1)/2 But have we ever wondered how the formula is drawn? How the formula did come into existence? In our school days (if taught), we were taught the summation method to deduce the formula of the summation of ‘n’ natural numbers. ΣK^2 = Σ(K+1)^2 – (n+1)^2; summation from k=0 to n. If we expand this equation, we will get the required formula; but this not how the original formula was deduced.
When the great genius, Gauss was a child in the era of 1780’s, he found the formula. His teacher gave the class a sum to find the sum of first 100 natural numbers. The exercise was given to engage the class for some time. But the genius of Gauss was at work and he solved the problem in no time. He found an interesting phenomenon.

How to get fit in a no-nonsense manner!

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We often keep on running after life and ignore our health. A healthy body is important for a healthy mind. We might slog today and spoil our health to earn some money! But what good is the extra money if we have to again spend it on our health in future.
The world is getting into a mad race and people are just running and running, some for money, some for power, some to capture their desires. The world is loosing its balance. Though technology is on a rise, the quality of life is increasing but the peace of mind is on a windfall.

Thus, its very important to stay calm and focused in life. We should pay adequate importance to our health else we wont be able to make the most of our life. And even if we are busy, we can definitely take out some time for our health by cutting down idle time, unnecessary gossips, time spent on Facebook etc. etc.

I would like to share my example how i lost 18 kgs in 6 months flat just by following some basic rules.
I did not worry about reducing my weight b…

Detergent wars: Nirma, Wheel & Ghari

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HLL entered India in 1957 and was the undisputed leader in detergent space. Surf was the most selling detergent in India. However in 1980's Surf suffered huge losses at the hands of a new and small firm, Nirma Chemicals. Nirma was launched in 1969 and its primary focus was to create a good, branded product at affordable prices. The product was priced far lower than the market leader - Surf. Nirma caught the attention of the middle-class and lower middle class customers and had such great sales that it evicted HUL's Surf from the No. 1 position in 1985. HLL then had a look at the situation and found that there was a large market segmentation in detergent space and then came up with lower priced Wheel (green) and Rin (blue) detergent powders targeted at different market segments. This segmentation helped HLL regain part of its lost market.

This post deals with price wars which are becoming an essential part of business. But a cut in price is the last resort in a price war. We w…

Nokia: The crash and Resurrection measures

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Nokia has lost a massive share world-wide. In smart phones segment it is badly hit by Samsung, HTC, Google Android and iPhone and in the low-end mobile category it has faced intensive competition by local players. The purpose of this post is to analyze the factors that lead to the decline of Nokia in India and then discuss some ways to bring back the Nokia brand into its fervor.

A quick look at some stats: Nokia accounted for around 37.5% of the Indian mobile handsets market share in 2011, the same was around 49% a year back. It used to be around 70% in the year 2007-2008 On the other hand Samsung has grown exponentially over the last 2-3 years and now enjoys a market share of 28%, its last yr market share was around 20%. If the same rate continues Samsung is very well on its way to replace Nokia as the market leader.