The Summary Of Cold Steel Media Essay

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This book provides a detailed insider account of the unsolicited/hostile takeover bid of Arcelor by Mittal Steel. Though this book in not written by an insider to the whole takeover transaction, the authors claim to have extensively interviewed most of the insiders. As one reads the books, one realizes that the amount of research that has gone into the book and the kind of details that have been described - it is not possible to write such things unless either one is letting the imagination run wild or one has great assistance from people(s) who were on the inside.

It is a book that captures your attentions to the end; written at an engaging pace it is difficult to put the book down. I would recommend that you start reading this on a Friday afternoon. I did. I was able to finish by Sunday late evening.

The language used in the book is easy to understand. For any person who has basic theoretical understanding of Mergers and Acquisitions (M&As) and terms like White Knight, While Squire, Poison Pill etc. would be able to thoroughly enjoy the book. For any person who has no understanding of these things need not worry because as you would read the understanding would be clear and there would be no need to refer to any special sources to understand technical things or M&As.

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Contents

The book starts with Mittal Steel's successful bidding for Ukrainian steel company Kryvorizstal in 2004. Arcelor and Mittal Steel both were in the race and Mittal won the bid. Initial chapters of the book make clear the race between Mittal Steel and Arcelor - how intense and important the race is for all the people. The egos of Arcelor CEO Guy Dolle and Mittal Steel's Lakhsmi Mittal, their aspirations and how seriously both of these commanders are taking the battle are made clear in the starting of the book.

After setting the clear the basic things, the book takes us back to June of 1950 to a place called Sadulpur in Rajasthan in India. From there the authors describe the history of Lakshmi Mittal - going to school, moving to Calcutta, going to college, getting into family business, getting married, moving to East Java in 1975, building a steel plant from the scratch. 1977 was the year when Aditya (Lakshmi's son) was born. At the age of 39, Mittal knew that he did not have enough time in front of him to build many more plants from scratch. From here started the growth formula Mittal has perfected over the years - acquiring loss making steel manufacturing entities and turning them around completely. The entire history of Lakshmi Mittal is traced back from his birth to current stage and it is done in an incredible 10 or so pages - returning the story immediately back to the current events of Arcelor.

The authors then start describing the tussle between Arcelor and Mittal Steel - how a special secret team was created by Guy Dolle to envision circumstances where they might be under attack from Mittal and plan out defences in advance One of the plans was to acquire a steel company in USA, which was infact acquired by Arcelor, but that could not save it from coming under and attack.

The authors have described in detail the strategy and the well oiled operation put in motion by Mittal. How the whole strategy was made, the amount of planning and discussion that went into the takeover strategy, the scores of issues that were identified by the team of investment bankers and lawyers, and how those obstacles were over come.

Also explained in great detail are the various defence strategies used by Arcelor. How they tried desperately to find out a White Knight and in the end indeed found one in SeverStal of Russia (and then how Mittal outsmarted the Russians), the various poison pills, a special protectionist takeover law put on table by Luxembourg govt. but which was never passed, the political charm offensive of Lakshmi Mittal and how in the end every single defence strategy that was put in place by Arcelor failed and the only option they were left with was the While Knight in SeveStal.

Also explained are the Indian Government's reaction to the protectionist approach taken by French and Luxembourg Governments. Guy Dolle made a rather unfortunate comment about Mittal being an Indian and suddenly the Europeans were accused of being racist. This spark that could have potentially resulted greatly damaging the Indian-French and Indian-Luxembourg diplomatic relations, was put out early. But the xenophobic attitudes of the French and Luxembourgise peoples have been captured in detail.

Conclusion

Mittal's vision, one he kept on repeating throughout the battle for Arcelor was that state run steel companies had no place in the modern world. Steel would have to go global. According to the authors the reason Mittal was so successful in turning around loss making manufacturing units was that he was the only person who could actually work the control panel of a blast furnace himself. He knew his business inside out. This view was endorsed by an article in Forbes magazine's June 2009 edition.

Lakshmi Mittal was a man with a vision and man on a mission. He was supported by his able and intelligent son and CFO Aditya Mittal. Aditya played an important role in this takeover battle and he interacted with a great many key players. Everyone reported of him as being very intelligent and smart. Only Guy Dolle could not come to like Aditya always referring to Aditya as 'the son'. These are the bits of details that come to light the emotional part of this intense takeover battle.

This is a book that tells the story of the Arcelor Mittal Steel takeover battle that resulted in ArcelorMittal. Any person who is fond of warfare and strategy and has done a bit of reading on these subjects will be immediately able to spot the kind of offensive and defensive strategies followed by both sides to the battle. Any person related to or interested in the field of M&As would be delighted to see big warriors of this game engaged in the biggest takeover battle that raged for about 188 days. Any person who just wants to know what happened would be amazed to see the amount of strategy and effort put in by all the people at both sides - the bankers, the lawyers, the communications and PR people, the strategists, the government representatives, the hedge funds people, the investors, the shareholders, the stakeholders and scores of others.

It is after a while I have read such an amazing account of a real life event which, in my opinion, was a very important moment in the history of steel industry in specific and corporate history in general. It was a very important historical event from any given vantage point and this book tells the insiders story of it.

Summary of

The Black Swan- The Impact of the Highly Improbable.

by Nassim Nicholas Taleb.

.

In this book Nassim Nicholas Taleb's argues that there is a lot more randomness than we generally admit. Second, we have trouble dealing with randomness because of the way we think. The "Black Swan" of the title is the one that was discovered to be present in Australia when previously all observations demonstrated that swans were white. This example is used to show that no amount of induction can ever lead to certainty. A single exception invalidates the rule.

For Nassim Nicholas Taleb, a Black Swan has three characteristics: it is an outlier (very improbable);has an extreme impact; and humans create doubtful explanations after it has happened). Examples are the destruction of the "Lebanese paradise" after 1975, the stock market crash of 1987, the breakup of the USSR, 9/11, and the development of the internet.

Some Black Swans are fortunate, such as an unexpected monster success of a book, film or record or the luck of the investor who benefits hugely from an unforeseen market swing. In the author's view, the modern world is dominated by Black Swans, not that there are more of them than in the past, but that their consequences are more extreme.

People in general, and social scientists in particular, do not recognize the existence

of the realities that Nassim Nicholas Taleb calls Extremistan and Mediocristan. Mediocristan is the dull, predictable world that most of us live in most of the time. Jobs in it are rewarded in some relation to the amount of time, effort and skill that earners put into them; extremes of income have little effect on averages; some kind of equality is possible. In Extremistan, rewards have no relation to time, effort and skill, but are based on luck. Payoffs are huge,but there are few big winners and many losers. As a result, there is no typical member but increasing inequality.

The trouble comes from the refusal of the social sciences to admit the existence of

Extremistan and the increasing importance of outliers. Social scientist and many "experts" overestimate what they know, whereas what they don't know is far more important. They create the illusion of understanding, relying on "the beastly method of collecting selective corroborating evidence" or the thoughts of dead thinkers .

The origin of the problem lies in how we think. We indulge in story-telling, the

"narrative fallacy", thinking that the world is less random than it is. We also follow the

"ludic fallacy" which holds that play approximates life, whereas it doesn't. We

artificially divide the objects of our studies into academic disciplines: an outlier like the

breakup of the USSR may occur because of events that happened in another discipline's

realm, or a casino may incur big losses by some random event unrelated to gambling.

Once we have adopted a theory, we are very reluctant to give it up in the face of new evidence.We overvalue facts at the expense of general knowledge, narrow our focus too much anddepend excessively on self-proclaimed experts.

To Nassim Nicholas Taleb, real experts are those who have know-how, such as grain inspectors, test pilots, chess masters and physicists. Those who have know-what or knowledge are not really experts: stockbrokers, judges, personnel selectors, intelligence analysts, political scientists and financial forecasters. He finds that military planners do better, because they leave room for the "unknown unknown" . He gives many examples from one of his own fields, investment, to show that we don't like to admit the place of luck in it. He quotes sarcastically the headlines of the financial press that purport to interpret after the fact some unforeseen market shift. If a forecast turns out to be right, expertise is claimed as the reason; if wrong, it was not the experts' fault, or they were "almost right". Nassim Nicholas Taleb cites research to show that in politics and economics, the most experienced experts and the most sophisticated tools of analysis do no better at predicting than undergraduates or simple methods.

In the field on innovation, the author argues that most discoveries are the product of

serendipity; people looking for one thing find another . He gives the examples of

penicillin, the laser and Viagra in support of this (the latter was designed as a blood

pressure drug). He adds, "While many worry about unintended consequences, technology

adventurers thrive on them" .

Taleb's epistemological position is against "Platonicity...our tendency to mistake

the map for the territory, to focus on pure and well-defined 'forms'" instead of the messierreality. His idols are skeptics who question "Platonicity": Hume, Montaigne, Hayek, Poincaré, Mandelbrot and Popper. He likes Popper's notion that all we can do with a theory is try to falsify it, and deplores the step that is often taken from observing that no evidence has turned up against an idea or a theory to the notion that the idea has therefore been proven

Since he seems to believe in luck more than talent and hard word, what does Nassim Nicholas Taleb

suggest that we do? In general, we are to adjust to this fact and try to profit from it. Follow the old Bell Laboratory's approach and let talented people work on problems that interest them, while being alert to unexpected discoveries. Planning is alright for small matters; for bigger ones, use trial and error. In planning, do not look at probability so much as to the gravity of possible even if improbable consequences. In investment, put 85% of your money into something sure like Treasury bills and scatter the rest in small amounts in venture capital. The general principle derived from investing is: "...life is convex and to be seen as a series of derivatives. Simply put, when you cut the negative exposure, you limit your vulnerability to unknowledge" . In life, seek out as many points of view aspossible. Specifically, says Taleb, "go to parties".

Nassim Nicholas Taleb believes, like Stephen Jay Gould, that evolution was more the

survival of the lucky than of the fittest. He is also right about our weaknesses in thinking. People are very weak on calculating risk: after 9/11 many foresook air travel for the more dangerous highways where the number of accidents rose.

Taleb invites us to be skeptical and it is fitting to take this approach to his book. His

exposition has a number of weaknesses. First, while the creature of the title is a vivid

image, the black swan does not really meet the criteria he gives of a Black Swan. True, it

contradicted all previous known sightings in Europe, but it did not have any dramatic

consequences (at least none are advanced by the author), nor was there a scramble to

explain the discovery after the fact. Second, the author uses several fictional characters (atleast four) to make his points, but the reader would have to red the footnotes or the

bibliography to learn that they were not real people. This may be the norm in a certain new kind of writing, but it is not a good thing in a book about the apprehension of reality. Third,as a philosopher pointed out to the author, the first two-thirds of the book uses narrative,mostly in the form of anecdotes, to fight narrative. Taleb's defense is that "You need astory to displace a story" .

While I agree with those who found the book stimulating, I fault the author most for

his values. He pretends to deplore the unfairness of the world: "I find writing these lines

painful; I find the world revolting" . Don't you believe it. He is having a wonderful time telling his stories of his own success and pulling the beard of so many eminent academicians. While he deplores "epistemic arrogance" in others, personal arrogance is his trademark as many reviewers have noted. He scorns the dull suits who go to offices every day and apply the rules strictly. He prefers his imaginary "Fat Tony" who has no office,works out of restaurants and makes a fortune in real estate. This is not particularly important, as Taleb likes to play the gadfly, and shrugs off being shown up by those like his philosopher friend who pointed out that he was using narrative to fight narrative.

Overall, Nassim Nicholas Taleb is convincing about the unpredictable nature of our lives and of the folly of complacency in thinking that we can avoid this. He rightly points out some serious weaknesses in the way we try to look ahead and back.

Assignment 2

Prepare a 500 words write-up on "My Dream Organization".

MY DREAM ORGANISATION

Every human being has some dream in life, which varies from person to person. I also have a dream about my organization where I am going to work. I would like to join organization which is well established, well equipped, reputed, ideal, that opens a golden gate towards my career ,I have been dreaming of.

Beside the above traits I want my organization to be socially responsible. It has to look after the social growth and social acceptance from the society as well, because without it ,it wont be considered as organization. There is old saying "an organization is not what which makes millions, an organization is that which million makes" . I truly believe in this saying because without the involvement of society, no organization can move to the next level at any stage of its life.

Another most important thing that my organization should have is that the manager of my organization should be humorous and friendly. It not only attracts employee's attention but also avoid employees from falling asleep during their work time.

Last but not the least my dream organization should provide regular breaks to employee so that they do not feel tired and monotonous.

One organization in which I would like to work and its my dream to work in is GOOGLE

About google

Larry and Sergey named the search engine they built "Google," a play on the word "googol," the mathematical term for a 1 followed by 100 zeros. Google Inc. was born in 1998, when Sun co-founder Andy Bechtolsheim wrote a check for $100,000 to that entity-which until then didn't exist.

Larry Page, Google's original CEO until 2001, took up the title again in April 2011. Eric Schmidt, now our executive chairman, served in the role for 10 years.

Google culture

It's really the people that make Google the kind of company it is. It hire people who are smart and determined, and it favor ability over experience. Although Googlers share common goals and visions for the company, we hail from all walks of life and speak dozens of languages, reflecting the global audience that we serve. And when not at work, Googlers pursue interests ranging from cycling to beekeeping, from frisbee to foxtrot.

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it strive to maintain the open culture often associated with startups, in which everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. In our weekly all-hands ("TGIF") meetings-not to mention over email or in the cafe-Googlers ask questions directly to Larry, Sergey and other execs about any number of company issues. Our offices and cafes are designed to encourage interactions between Googlers within and across teams, and to spark conversation about work as well as play.

reason for joining google

Lend a helping hand. With millions of visitors every month, Google has become an essential part of everyday life - like a good friend - connecting people with the information they need to live great lives.

Love for their employees-. Google offers a variety of benefits, including a choice of medical programmes, stock options, maternity and paternity leave, and much more.

Workplace- Google have created a fun and inspiring workspace I glad to be a part of, including on-site doctor and dentist; massage and yoga; professional development opportunities; shoreline running trails; and plenty of snacks to get you through the day.

Reputed firm

Good compensation

Concentrates on ability not on experience

Assignment -3

Prepare a summarized report on one of the most important business news in the month of May/June 2010 in any Daily Business Newspaper, like The Economic Times/Business Standard/Financial Times etc.

After Indra Nooyi, Gautham Mukkavilli rises at PepsiCo

May 7, 2010

PepsiCo has named a long-serving Indian hotshot to a key role at its new global offshoot, a nutrition centre of excellence, as the beverages giant steps up its fixation on health foods.

Gautham Mukkavilli, managing director of PepsiCo India's foods division, Frito-Lay, will take over as global vice-president of grain nutrition at the Chicago-based nutrition centre in end-July.

Mr Mukkavilli, 50, is a PepsiCo veteran of 19 years and has been heading Frito-Lay India for nearly three years. He has overseen Frito-Lay strengthening its core business and increasing its agricultural footprint.

Mr Mukkavilli has had various stints in the $43-billion beverage and snacks maker's operations, having worked in the bottling and management divisions and its Thailand unit earlier. He is also PepsiCo's India region president, a role he bagged when the company aligned beverages and snacks under a common leadership in late-2008.

PepsiCo is currently trying to get the nutrition centre up and running. It is also splitting the division into various verticals.

"We are seeking to accelerate our nutrition business," Mr Mukkavilli, adding that details and plans of the centre are still in the development stage.

The move is the latest in a series of initiatives by PepsiCo to turn its gaze on health and nutrition foods. The company, largely known for junk food brands such Lays and Pepsi, unveiled plans in March to triple sales of health foods in the next decade.

PepsiCo also outlined new goals for nutritional products such as Quaker oats and cereals, Tropicana juices and sports drink Gatorade at an investor meet in New York.

Earlier that month, the company said it would remove sugary drinks from schools worldwide.

Governments around the world have been mounting pressure on food makers to improve nutrition, especially after an alarming rise in obesity-related cases in recent years. In the US, first lady Michelle Obama is leading the administration's fight against childhood obesity.

Mr Mukkavilli joins an elite pool of Indians taking up key roles in the global operations of the beverages and snacks maker. The company named Indra Nooyi as chief executive in August 2006 and Jaya Kumar as president of Quaker Foods & Snacks last year.

Last January, PepsiCo also named Vivek Sankaran as senior vice-president of corporate strategy and development.

Under Mr Mukkavilli's leadership, Frito-Lay also scaled up the Quaker business significantly. It also created a new category of baked snacks foods, Aliva, recently.

Prior to PepsiCo, he had stints in UB Group and Brooke Bond.

Assignment 4

CASE STUDY 1

DEVESH SHARMA

INTRODUCTION

Devesh Sharma did his post graduation from IIMA and soon after this he was appointed by ABC ENGINEERING WORKS DELHI as their Cost Accountant with salary of Rs 49000 per month. His immediate boss was Chief Accountant.

Companies Profile

ABC Co. is basically heavy engineering fabricators and specialist in manufacturing machinery for sugar and cement industry. Its workshop is located on outskirts of Delhi. The factory is divided into a foundry, a machine shop, and fabrication

Problems in companies

Companies profit and sales were declining.

There were discrepancies in physical stock and book stores.

LEARNING

The orientation of employee to the company plays a very important role as in this case study time spend by Devesh Sharma at companies plant helped him to prepare reports later.

A person should always work in the hierarchy as in case of devesh he submitted the report to CA as well as its copy to DGM instead of giving it to CA only.

The senior employees of the company must appreciate and praise the efforts put in by the subordinates.

One should try to solve problems instead of running away from it as in case of Devesh he did not asked for feedback for his report and waited for his CA to respond, when he did not got the response he thought for quitting his job.

CASE STUDY 2

Revamping Rasna - A Marketing Overhaul Saga

INTRODUCTION

Pioma Industries Ltd manufactured the product "Rasna". It's a generic name for soft drink concentrates. Later Pioma Industries Ltd was renamed as Rasna Ltd. The most popular tag line of Rasna is "I love u rasna" .

Rasna Ltd manufactured various products like Rasna utsav , Rasna rozanna, Rasna Royal, rasna Yorker , Rasna Aquafun and orjanjolt. Out of these some were great success and some failed.

Reason for failure of product

Rasna Royal:-

The main reason for the failure of Rasna Royal was that it was expensive as compared to rasna SDC. Rasna was known for its cost effective drink. It was available at lower price.

On the other hand Rasna Royal was available at higher price which consumer did not liked.

Rasna Aquafun :-

The drawback of Rasna Aquafun was because of its blue color which was not readily accepted by Indian consumer in food segment.

Oranjolt :-

The main reason for the failure of Oranjolt was because of its refrigeration. Oranjolt required refrigeration at all times and many Indian retails have a tendency to switch of their shops refrigerators at night .this resulted in quality problems .the short life of Oranjolt contributed to its failure.

Factors leading to Revamping of rasna :-

Rasna was losing its share in the market.

Due to increasing competition from cola and other beverages.

Increase in price of product i.e rasna

Change in the consumer preference i.e they now preferred ready made products.

Availability of international products in tetra pack resulted in decline of rasna market

CASE STUDY 3

Tanishq - The Turnaround Story

The major categories of segmentation bases from which managers can select: 

1- Geographic bases allows us to segment a market that is spread over a large geographic area into sub-markets that cover smaller geographic areas. Geographic segmentation usually involves dividing up geographic markets by using existing political boundaries, natural climatic zones, or population boundaries

2-Demographic segmentation occurs when one or more demographic traits are employed to divide a market. Typical demographic traits that are used include age, gender, race, ethnicity, marital status, family size and stage of the family life cycle. 

3-Social class segmentation employs a combination of demographic traits that are commonly believed to reflect membership in different social class strata.  Occupation, education, and income are the primary demographic traits that reflect social class membership.

4-Psychographic segmentation bases divide markets based on differences in lifestyles or differences in personality traits.  Lifestyle segmentation is one of the most popular and effective ways to create segments for consumer products

5-Consumer shopping behavior patterns include such things as the type of store shopped in, timing of purchases (i.e. time of day, week, or year), how much of a product is purchased on a given visit to the store, and how often the individual frequents a particular type of retail establishment or shopping mall.

6-Product consumption behaviors include product consumption or usage rates base (as discussed earlier).  Other segmentation bases included in this category are product usage occasion, product use versus non-use, and loyalties to specific brands.

Tanishq's segmentation and positioning strategy

An Indian brand which can make big in the global market is Tanishq from tata group of industries. It has an exquisite range of gold jewellary studded with diamonds or colored gems in 22kt pure gold.

Though they faced with many difficult in the early stages say six years, then they came up with good strategy - they followed 2 main strategies

Increasing penetration in the domestic market

Going abroad in order to diversify its revenue portfolio

Tanishq found out that it had earlier gone wrong with the product positioning strategy ,initially with a focus on the export market, its designs were predominantly western and same line of jewellery was sold in India as well. However with the shifted focus to the domestic market, it was unable to to sell these designs, therefore it changed its brand positioning from that of elitists and westernized to the

 

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