Strategy Wall - 9th Edition-The Strategy & Consulting Club | IIM Rohtak

STRATEGY WALL THE STRATEGY AND CONSULTING CLUB

9TH EDITION

THE STRATEGY AND CONSULTING CLUB

CONTENTS 18 PARTICIPATE AND WIN PAYTM CASH

Jessica Wilde shares how to overcome writer's block.

Story on p. 20

3 FFP -: Marketing tool or Standalone Business -by Husein Dhinojvala | Welingkar 7 IoT and its effect on Telecom Industry -by Vaibhav Kumar | NITIE 10 Surviving the Technological changes -by Vishvesh Kapadia | IIM Indore 12 Redefining Workplaces -by Shrutika Thete | Welingkar

16 Collaborative Intelligence of Humans and AI -by Bhushan Dhande | SPM, PDPU Gandhinagar

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FREQUENT FLYER PROGRAMS: MARKETING TOOL OR STANDALONE BUSINESS?

by Husein

A Frequent Flyer program is loyalty program offered by an Airline. A customer would earn points or miles (depending on program) by spending on travelling on the airline.

Y

ear of 2018 will be remembered in Indian aviation circles as the year in which both Air India and Jet Airways failed to deliver its expected results to their shareholders.

Air India attracted Zero Expressions of Interest for its Divestment Plan (mainly attributed to poor planning of the Government w.r.t. to the individual businesses and Debt of Air India) while Auditors of Jet Airways declined to sign the 1st Quarter results due to disagreements of Accounting Rules having stated that the Airline is doubtfully functioning as a “Going Concern” entity.

Amongst this comes defaults of Jet Airways to Banks, Leasing Companies and Oil Providers creating a downward spiral of the Airline’s Stock Price. To rescue itself, Jet has prepared a survival plan – one of which includes a stake sale of JetPrivilege Program.

Impact of Loyalty ProgramsAs per study under Bond Brand Loyalty, 2018, Airlines and their FFP’s continue to score amongst the lowest amongst

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the lowest amongst all loyalty and frequent user programs across various industries.

Major causes for ranking low in terms of satisfaction includes1. Complex and difficult rules and conditions of using accumulated miles.

2. Redemption Blackout wherein certain routes or booking restrictions on tickets that can be booked using Miles or Points. (note Graph from McKinsey on decline of seats available for redemption) 3. Breakage or Expiry of Accumulated Miles due to period of Inactivity (McKinsey estimates – 15-30% points expire every year)

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Evolution into Independent BusinessWith the growth in membership in FFP’s, many airline FFP’s have been split into individual business entities with management separate from the Parent Airline.

There are even instances wherein FFP’s have not only been split as independent companies but even been listed eg.

Aeroplan of Air Canada. This process of totally splitting of the FFP and allowing it to function independently of the airline is termed as the FFP Spin-Off Model.

Under this Model, the FFP is allowed to enter into partnerships with other organizations such as Banks, Credit Card Companies, Retail Stores and other services through which members can buy or sell points and create avenues of redemption.

This Model has grown out of the changes in Customer behavior and expectations and growing list of partnerships.

According to FFP Investment & Advisory which specializes in Airline FFP Consulting, the following changes have been noted in the Business Model of Frequent Flyer Programs.

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The Business an FFPAs per the 2014 EY report titled – “Frequent Flyer Program: ready for take-off”, an FFP has 3 Sources of Cash Inflow as following1. Gross Margin on Points � Difference between the Cost of Points and Price they are sold for to commercial partners. Eg. An HDFC Bank would buy JPMiles for issuance to their Credit Card customers. For the Cost of Points, Jet Airways would set aside few rupees from their ticket sales as cost of issuing points to the customer and these points are held as Liability with JetPrivilege.

2. Working Capital Benefits � The capital advantages return from interest on positive float stemming from the received money from the sale of points (an average of ten months to 2.2 years before redemption of points) 3. Breakage � When unused points expire (usually after 3 years of inactivity) the liability is written off, resulting in an income recognized for the FFP. In Addition to above Sources, FFP’s become crucial sources of funding for Airlines in times of need due to above cash inflows and Advance purchases of tickets for their FFP members. FFPs also generate useful analytics reports on customer behaviors that can be used by many marketing campaigns for specific segments for targeting their service or product offerings.

ConclusionFrom the above points it is very evident that Frequent Flyer Programs can suitably run independently of Airlines and can attract valuations comparable or at times even better then their Airline Parent.

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INTERNET OF THINGS AND ITS EFFECT ON TELECOM INDUSTRY Internet of Things popularly known as IoT has been one of the most popular word over the internet, every business ,technology-firm, equipment manufacturers have been trying to utilize this IoT boom .

In Internet of Things, things refers to the sensors, RFID, smart watches, smartphones which are connected over the internet, they can interact with each other, store as well transmit information to the cloud computing.

After the success of 4G now most of the countries are looking forward to 5G services which will services for reliable and faster downloading speed of around 1GBPS. By 2020 china, US, South Korea are looking forward to being the first countries to launch 5G services for commercial purposes.

Smart homes are hot topic in western countries, as a smart home is designed in such a way that smartphones, alarm clock, AC, car, lights, etc all are interconnected with each other using the power of telecom.

As the alarm rings over the smartphone’s lights are switched on with sends a signal to geyser, car to pull up the right set For the success of Industry 4.0 we need faster temperature on their own without human 5G services for connecting IoT with cloud, big interference. Smart homes or cities none can data analytics, blockchain, artificial intelligence, work without telecom, so we can simply say Home automation and wearable devices are that all this have increased the demand for the top two successful examples of applying IoT fast 5G services. to enhance telecom.Â

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Talking about connected cars, the first connected cars were made by General Motors Working with Motorola Automotive when they introduced OnStar in 1996.

Which became popular afterword’s as it has various advanced feature like infotainment, safety, navigation, diagnostic efficiency. Tesla now is conducting trial for driver-less car which isn’t possible without IoT and telecom, so we can see that demand for high-bandwidth & faster internet is going to surge in future.

If we have a look at the the changing scenario of business then data holds the key for marketing, supply chain, finance. With the advent of big data analytics, we need to get the data about the customers, suppliers, demand, inventory for carrying out predictive analysis using software’s.

This data can be extracted from IoT devices which need telecommunication services to transmit these data to the cloud. We have seen that the demand for data services has been increasing exponentially over the time for which we need telecom infrastructure.

IoT has no meaning without telecom as it need Wi-Fi to transmit the stored data to the cloud for storage and analysis.

One of the IoT data sources includes a distributed messaging system which allows telecom to transfer data between cells, processing centers and users. It is essential to process data close to source so as to easily transfer them to data centers. This helps to predict data congestion in case of some cricket matches near the stadium and improve customer experiences.

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Industry 4.0 also known as physical-cyber space where all the IoT devices and computers will be connected to each other ultimately making decisions on the basis of the data analytics, AI without human involvement.

These smart machines will get more smarter as they get access to more data, helping our businesses to be more efficient. These connected machines will extract large amount of data from the sensors with will be transmitted to cloud storage, big data analytics, machine learning hence the demand for fast connectivity will increase alarmingly. Few experts have suggested keeping 5G exclusively for industry 4.0.

Telecommunication businesses will be able to effectively plan and analyse maintenance, thereby optimizing their services in the area of poor network coverage, slow downloading speeds, dropped calls and inordinate service wait times.

Internet of things is the key for decision making process for almost all the businesses in future. For tapping the benefits of Industry 4.0, dark warehousing, faster last-mile delivery, driver-less cars we need to have telecom infrastructure to support.

Without telecommunication sector we cannot have sustainable growth, most of the countries are focusing on harnessing the benefits of 5G services. In the world of analytics where SCM, marketing, finance, HR all are going for data-driven decisionmaking, telecom sector can’t be ignored.

IoT data are used by the companies to understand the needs of the customer based on which new products, services are developed and marketed to the customers by using telemarketing, Ecommerce tools.

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We are living in a VUCA world and this uncertainty affects the decision-making in

Surviving the Technological Changes

companies, which are managed by us.

Every day new technologies are coming, every innovation disrupts the market, and many companies suffer losses due to that.

We have seen this situation when computers came and Microsoft became a very successful company and before few years he was struggling due to the increasing number of mobile users and a decreasing number of Pcs. Now For one moment think whether you have ever thought of mobiles can disrupt so many devices like clock, calculator and even computers?

No, right? Most of us have not predicted that this same situation is faced by CXOs and they need to predict all these potential opportunities. The same thing was done by Microsoft, Since didn’t get their hands on the Mobile platform but they can’t ignore that so they created an Office 365 version and developed for Android and iOS also instead of one-time purchase created subscription mode for it.They worked closely with Apple for providing better user experience of office on iPad. This move opened their path for entering into the mobile market and even though they failed to create an operating system for mobile they created the whole ecosystem, which

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captured a large amount of customer base, which was moving to Mobiles.

However, can we say after doing so much of work in this segment Microsoft can say they are safe in this world? No, there are better technologies coming like Big Data, Artificial Intelligence, IoT, Block Chain, etc.

And to catch up with it companies are focusing a lot on innovation and R&D. This we talked about the technological company, which cannot cope up with the latest trend and have to work very hard to catch-up later on. However, if the technological company is finding it hard then we can imagine how hard it is for others.

There is lots of industry out there which is not using the technology, there are many companies which are trying to apply the digital transformation and there are companies which providing assistance to companies seeking to go digital.

However, to do all this the main thing need is to have a visionary approach towards future and understanding the need for going digital. Companies can increase their revenue significantly if they invest in making their business digitally superior. However, this technological shift can cost a lot of money, a significant amount of analysis is required before

making the decision and even after that, if we cannot execute it properly it can lead to bad situations.

We all know Kodak when camera sales declined they tried to focus on changing their strategy by focusing on Lens Technology but they did not come up with others in the segment. Nikon and Sony had already acquired technology for creating an efficient lens and currently Sony is the main provider of the lens in almost all mobile phones.

Same way State bank of India when they were facing tough completion from private banks, has to invest a lot in making the banking operations digital and due to their efforts, it is currently in the most important bank’s List by RBI. Technological disruptions have created many millionaires and also it destroyed many well-known businesses, one wrong strategy and your company’s life will be at the stack and one right decision and you can disrupt the existing market.

Therefore technological adoption is crucial in the current world and after making the decision its implementation, the strategy is important because many people have ideas but only a few can convert it into the business.

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Innovation is the buzzword nowadays. This

Redifining Workplaces

can be applied to anything to change its normal flow. When it comes to an office environment, we can see that times are changing rapidly. In earlier days, there used to be massive pileups of files, folders, papers, and books. Various cupboards were used to store them and spacious tables were used to pack them.

Gone are the days where type-writers, floppy disks, CDs, VCR, pagers, and carbon papers were used. The technological advancements have brought automation, IOT, machine learning. These are the reasons for restyling of the workplace. NOMADIC

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Now, we have cell phones, tablets, PCs, laptops, video conferencing, kindle, smart watch, hard drives and many more. This directly calls for a shift in workplace design by evolving them in such a way that improves the productivity and leads to job satisfaction. The colors, feel, layout and look of the offices have revamped. It also has an advantage with respect to cost.

Desk layout requires a huge amount of investment. More space is utilized in these desks where every employee has his/her own desk. The ergonomics plays a crucial role in this too, that works on space utilization by providing a comfortable working environment and helps to reduce fatigue. Such workstations give rise to a flexible layout or an open desk layout. This is totally in contrast to the cellular layout of an office where an individual desk is isolated from the others.

Cellular to Open Desk Layout

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By adopting an open desk layout,

me in the start; instead, a long table

employees can choose their own work

with compact chairs at one corner was

zones and areas that are best suited for

smartly placed where my colleagues

their work. Communication and quality of

and I used to gather for important

interaction among them can be improved

discussions.

without mitigating their privacy. There are a lot of opportunities to concentrate; there

Songs were always played to create a

is also an efficient use of space by

stress-free environment. We also

providing small tables and chairs suited as

celebrated birthdays and festivals. Due

per their physique.

to such work culture, I had personally developed a sense of belongingness

It is very well said by Jim Goodnight, CEO of

and trust with my team members. This

SAS, “Treat employees like they make a

shift from cellular to open desk layout

difference and they will.” Employees should

was appreciated by all, which broke

certainly feel that they are valued in an

down the silos and marked a

organization and for this, a perfect

significant improvement in terms of

workplace culture coupled with some other

flexibility and productivity.

factors like salaries, bonuses and motivation is necessary for their growth.

It felt like a family, a second home for all employees. On the 8th floor of our

In Reliance Jio, Navi Mumbai, where I had

same department, we had decorated

worked earlier, we had a cellular layout.

the walls with enthralling wallpapers

After a few days, our floor got renovated

and open desk layout on one side.

with a new look of open desk layout where we got our seats but there were various locations with sofas and chairs where we could sit, relax work peacefully and comfortably. It was designed so beautifully that even the pantry section felt like a café with books and snacks around it. There were no meeting rooms which astonished

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Reliance Jio, Mumbai Recently, a new concept of “hot-desking” is going popular where there is no fixed place for any one particular person, anyone can use any place according to their choice. This culture also promotes minimalism and is rightly hopped on by Deloitte when they moved into the Edge in Amsterdam. The consulting company adopted hot-desking by 1,000 desks for about 2,500 workers.

They bid goodbye to private offices and assigned seats and said hello to work spaces based on schedules. Instead of permanent cubicles, the office is nicely separated by neighborhoods for innovative hot-desking.

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COLLABOR -ATIVE INTELLIGENCE OF HUMANS & AI

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Artificial Intelligence (AI) is a technology that enables computers to think exactly in the same manner as humans do. It includes machine learning, deep learning and data science. Machine learning consist of tools to learn from the collected data and improve it with the experience enabling computers to think, act and make datadriven decisions to carry a certain task, deep learning is a kind of machine learning that is inspired by the functionality of our brain cells called neuron which led to concept of artificial neural network while data science is considered to be evolved just to understand and make sense of the data.

Since, AI is evolving in many “human” jobs such as diagnosing disease, translating languages, providing customer service and it’s improving fast. This is raising reasonable fears that AI will eventually replace human workers throughout the economy.

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But is it so: If technological progress

dexterity and judgment, such as

represents a comprehensive threat to

assembling a gear motor. (Wilson and

humans, then why do we still have job

Daugherty, 2018)

vacancies in the market? In fact, many of us are still employed in some sectors, working

In Power Sector the collaborative

much harder than before. The answer is

intelligence can be seen in power

machines and humans excel in different

plants and switch yard areas which

activities.

are prone to snowy weather conditions where bots can be

We can better know the collaborative

deployed for inspection purpose.

intelligence by understanding the examples from different fields of work as mentioned

. In India, AI can also be applied in

below:

power trading (i.e. the procurement of power from a surplus region to deficit

Numerous AIs, like Microsoft’s Cortana,

region at market competitive prices

Apple Inc.’s Siri, Amazon Inc.’s Alexa,

through DISCOMS transmission line

Google Inc.’s Allo and Duo, or Samsung

from power exchange platforms like

Electronic Co.’s Bixby, exist as digital

IEX and PXIL with the help of power

entities, however, in other applications, the

traders). Today most industrial

intelligence is included in a robot that

consumers procure power from the

augments as a human worker. With their

IEX instead of their regular supplier to

complex sensors, motors, and actuators AI-

avoid the monopoly and high price

enabled machines can now perceive

charging.

humans and objects clearly.

A future-ready enterprise will be the Thus, working safely in factories,

one that has digital entities

warehouses, and laboratories alongside

(combination of AI, IOT, Blockchain)

humans. In Manufacturing Industries,

walking with human and helping

robots are evolving from “dumb” industrial

organizations towards achieving agility

machines into smart, and are defined as

while providing better products and

“cobots.” A cobot arm can handle repetitive

experiences and at last generating

activities that require heavy lifting, while a

more money and profits.

human performs tasks that require

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The Strategy and Consulting Club Ijas MC Lavesh Bhadada Mayank Banka Nishant Garg Taslish Chadha Varun Parvathaneni Abhinav Tripathi Kajal Patil Kanuj Khurana Manohar Gupta Prateek Aniruddha Sarin