New profile additions in the C-suite – Chief Growth Officer (CGO)

In recent months, organic growth has risen to the top of the corporate agenda. A Marakon survey in April 2004 found that organic growth is the key issue for 59 percent of the senior executives running US, European and Asian companies. For 57 percent, the priority has increased over the past year. Other studies highlight similar sentiments. For instance, a recent IBM survey of CEOs worldwide found revenue growth is the top agenda item for four of five.

Most if not all of a company's resources are spent moving through its corporate lifecycle, and that movement is typically fixed along a predetermined path. What happens when that company experiences rapid sales growth and an immediate change is required?

What happens when a rapid shift must occur due to unexpected competitor activity or due to a recent exodus of staff in light of the current labor shortage?

The challenge today is that with companies running lean and efficiently they cannot typically afford the time, money, and people required to deal with these issues effectively. They usually cannot afford the expensive trial-and-error associated with both learning and implementing new best practices, either. This is as true for Fortune 500 companies trying to reinvent themselves as it is for startups just entering the marketplace and experiencing fast growth.

Growth has become so important that an increasing number of companies--H.J. Heinz, Interpublic Group and Hain Celestial, among them--have carved out a new executive position: "Chief Growth Officer."

Popularly termed as Mr. Idea, this profile is basically to have one person in charge of all-around growth helps you to look at business processes holistically. Typical role entails creating new products, finding new ways to repackage old products, or just enhancing relationships.

A CGO is like having 5 key positions in one:-
1. Chief Growth Officer/Organization Development Director
2. Chief Information & Technology Officer
3. Chief Learning Officer (Top HR Executive)
4. Chief Operating Officer
5. Strategic Advisor

Generic job responsibilities:
- Evaluates the corporate structure and ensures that the structure is aligned with the company's objectives.
- Analyses effects of proposed changes to structure and its effect on the motivation and work/life balance of employees.
- Works with managers to develop effective line of communication and chains of responsibility.
- Requires a bachelor's degree with at least 10 years of experience in the field.
- Familiar with a variety of the field's concepts, practices, and procedures.
- Relies on extensive experience and judgment to plan and accomplish goals.
- Performs a variety of tasks.
- Leads and directs the work of others.
- A wide degree of creativity and latitude is expected.


Fig: Org Structure

Companies like Colgate Palmolive, Dentsu Media, Thomas Group, Zurich Financial Services, Hershey Company, TradeKing, H.J. Heinz, Interpublic Group and Hain Celestial etc. have already hired renowned professionals for this profile.

According to a recent job post for this profile, following are the expected qualities of this profile: -
# Identify root causes for missing opportunities and create conditions for growth
# Focus on new business models that leverage enabling trends, solve customer problems in larger potential markets and rapidly assemble internal and external capabilities required to build the platforms
# Validate ideas and achieve milestones in the development and execution of new business opportunities
# Promote new product development
# Design and build an organization to screen, select, fund and deliver the company Enterprise Growth
# Agenda and support Group Growth Agendas; define the mission of the organization and establish budget and investment requirements
# Support the CEO and Group VPs in shaping their enterprise and group growth agendas and related plans and priorities
# Understand future trends and targeted domains/markets and related dynamics
# Identify domains in which the company should seek opportunities to build a leadership position; explore big potential opportunities, (which customers could the company work with to prototype/build out the opportunities? what core capabilities can be leveraged in this new and emerging opportunity space?)
# Identify the systemic and interrelated challenges that drive towards and away from growth; align key elements of infrastructure and culture/behavior to the growth goals and agendas
# Mobilize business building leaders and teams to build out new targeted businesses/growth platforms

Requirements: Critical Traits for the CGO Role:
# Abstract reasoning, flexibility and idea orientation (able to 'connect the dots')
# Assertiveness and aggressiveness (can state opinions forcefully and deal with resistance or confrontation effectively)
# Self-discipline and urgency (sense of time pressure and motivation to complete activities)
# Risk taking (willing to try new things and explore new domains)
# Natural curiosity with bias for action exploring possibilities
# Ego drive and ego strength
# An undergraduate degree is required

Critical Experiences:
# Experience in strategy development with a history of innovation and passion for growth
# Track record indicating focused time to the external environment, customers, and external networking

Cisco Unveils Vision of Future Cities at Incheon Global Fair & Festival

SEOUL, Korea - August 6, 2009 - Cisco will demonstrate its Smart+Connected Communities vision for cities of the future at the Incheon Global Fair and Festival.

The Cisco® Smart+Connected Communities initiative aims to help cities and communities around the world use the network as the platform to transform how citizens use utilities, safety and security measures, connected real estate, transportation, health care, learning, sports venues and government services. Smart+Connected Communities solutions address the demand of increasingly urbanised populations by providing a network-enabled blueprint for successful 'smart' cities of the future that run on networked information.

Cisco will present its Smart+Connected Communities vision at the Cisco 'Global Cities of the Future' pavilion at the Global Fair & Festival, which opens Aug. 7 and runs for 80 days.

Wim Elfrink, chief globalisation officer and executive vice president of Cisco Services, said, "We believe the network can truly be the platform for transforming cities, communities and countries. Cisco's presence at the Incheon Global Fair and Festival is further evidence of our commitment to collaborate with the Incheon Free Economic Zone and cities around the world to help them use technology for increased environmental, social and economic sustainability."

The Cisco pavilion showcases six solutions: Cisco Virtual Information Desk, Cisco TelePresenceTM, Cisco community and connection services, security operations, building control, and green energy.

# Cisco Virtual Information Desk provides remote management functions that allow a receptionist to effectively welcome visiting customers from multiple locations.

# Virtual Information Desk is an environmentally friendly solution that helps reduce commuting and labor costs as well as energy consumption.

# Cisco TelePresence is a cutting-edge video conferencing solution with full high-definition video and high-quality audio combined with interactive conferencing functions that maximize the feeling of in-person interactions.

# Cisco community and connection services allow citizens to get remote health care and public services at home through Cisco Customer TelePresence by directly connecting to hospitals and public organizations.

# Cisco security operations are shown in building management and monitoring systems based on an Internet Protocol (IP) network. A closed-circuit television gives an operator in a control room the experience of real-time security and precautions. The comprehensive Inno-Watch solution can control CCTV images and external signals.

# The building control center allows visitors to experience IP-based intelligent building systems that address a number of integration, security and centralized monitoring issues. The building control center integrates IP operations and management to reduce operating costs and increase the asset value of buildings. Users can also access services such as meeting room reservations from their IP phone, digital media systems or PDA.

# The green energy exhibit showcases the Cisco EnergyWise solution, which deals with energy savings and environmental issues in office buildings and homes. Based on Cisco's router, switch and data center platform technologies, Cisco EnergyWise helps monitor energy consumption thus prevents unnecessary energy consumption.

In line with its pavilion, Cisco will provide a comprehensive Customer Briefing Center program for enterprise customers. Cisco is also scheduled to hold the Sustainable Cities of the Future Conference in Incheon on Sept. 18, which will bring together thought leaders from government and developers.

As part of the Cisco 'Global Cities of the Future' pavilion opening event, Cisco will provide free entry tickets to 50 people for the Incheon Global Fair and Festival and an opportunity to use Cisco TelePresence to meet with friends and relatives abroad.

About Incheon Global Fair and Festival
With the theme of 'Lightening Tomorrow', Global Fair & Festival 2009 Incheon will take place from Aug. 7 to Oct. 25, 2009. Hosted by Incheon Metropolitan City and organized by 2009 Incheon Global Fair & Festival Organizing Committee, the Incheon Global Fair and Festival will be held in Songdo International City.

Source: Official Press Release, Cisco

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Publicis Groupe's acquisition of Razorfish: the Asian angle

Following the news that Microsoft will sell digital agency Razorfish to Publicis Groupe for US$530 million, sources expect it to be "business as usual" for the agency under its new ownership, including in Japan, where Razorfish is engaged in a joint venture with Dentsu.

According to the global agreement, Razorfish will become part of Publicis’ VivaKi, joining Digitas, Starcom MediaVest Group and ZenithOptimedia in the region, and is expected to keep its current leadership worldwide.

In Asia-Pacific, Razorfish’s agencies are Hong Kong-based e-Crusade, which handles Nike among other clients, Amnesia Razorfish in Australia and a joint venture with Dentsu in Japan.

Publicis is slated to take full control of the agency, which was sold to Microsoft in 2007 as part of the $6 billion acquisition of online advertising group aQuantive, in the fourth quarter of this year.

According to Razorfish’s regional president Lee Sherman, the leadership in the agency’s regional office will stay the same, and “the agency is very excited about the agreement” because it will be able to expand its capabilities by using the VivaKi network, “as it makes sense for our clients”.

Amnesia Razorfish’s founder Iain McDonald added that the partnership is advantageous because it perpetuates a relationship with Microsoft – from which Publicis has agreed to buy search and display advertising – and “will help accelerate our plans for growth in the region”.

Meanwhile, a spokesman for Razorfish noted it will be “business as usual for Dentsu Razorfish”, and anticipates that Publicis will continues the joint venture’s management with rival holding company Dentsu, which had also bid to buy Razorfish from Microsoft.

The spokesman added that the specifics of the deal are still up in the air. “It’s too early to speculate on possible working arrangements for our various brands around the world with the deal just having been signed,” he said.

A regional representative for Publicis said he expects Publicis and Dentsu to work together on the venture, pointing out that Dentsu holds a minority stake in Publicis Groupe and the two holding companies work together globally on public relations and sports marketing initiatives. “We are used to working together,” he added.

However, agency sources within the region also say the deal gives Publicis little leverage in Asia-Pacific’s digital arena outside a few key markets.

According to Barney Loehnis, Asian network director of Aegis Group’s Isobar Global, outside of a bolstered presence in Australia, Hong Kong and Japan, “I don’t think this deal gives Publicis a firm dunk in Asia”. “My personal observation is that $530 million is not cheap and Publicis is paying the price of its lack of vision from a few years back,” Loehnis said of the deal. “More than anything, this deal is interesting from a media-strategy perspective as it will still be working with Microsoft. But, this absolutely does not increase Publicis’ ability to go to market with a strong digital case.”

Source: Brand Republic

Collection of Interesting Case Studies on Social Media Marketing

List of interesting case studies on Social Media Marketing

Crispin Porter’s viral Subservient Chicken garnered about 14 million unique visitors and 396 million hits to date, through Adweek here (March 7, 2005). http://www.adweek.com/aw/national/article_display.jsp?vnu_content_id=1000828049

Up Your Budget Treasure Hunt for Budget Car Rental in 2005, the first ever blog-based viral marketing campaign, promoted entirely through bloggers and blog advertising - with no traditional marketing whatsoever. The results: one million unique visits to the site, 2,000 registered treasure hunters, and over 10 million page views in only four weeks. The clue videos were downloaded a total 43,000 times. There were 19.9 million blog advertising impressions at an average cost of 33 cents. Created by BL Ochman.
http://www.whatsnextblog.com/archives/2006/10/case_study_up_your_budget_i_2005_created_by_bl_ochman.asp

Click TV - Blogger Relations for Click TV (April 17, 2006): An outline of a blogger relations campaign for a Web 2.0 company, Shel Holtz, results here http://blog.holtz.com/index.php/blogger_relations_for_clicktv/

Fiskateers for Fiskars, who make crafting tools. Branded mentions of Fiskars products are up more than 400% on a per-week basis since the program began, from Brains on Fire (2007) http://brainsonfire.com/blog/

Coca Cola’s Community Approach to Second Life (April 17, 2007): Coca-Cola’s new social media strategy in Second Life featured an approach other than buying real estate and creating a store, Shel Holtz & Crayon http://blog.holtz.com/index.php/coca_colas_community_approach_to_second_life/

SeaWorld San Antonio: Journey to Atlantis (May 3, 2007): The launch and results of an “event” site to support the opening of a new ride, My PR Pro http://overtonecomm.blogspot.com/2007/05/anatomy-of-social-media-campaign.html

Splashcast’s Social Media for Marketing: (May 16, 2007): Splashcast used social media for marketing purposes, and succeeded by directly engaging the community, Marshall Kirkpatrick http://marshallk.com/social-media-for-marketing-what-weve-done-at-splashcast-so-far

GeoCommons Social Media News Release (May 29, 2007): An outline of the pitfalls and successes of releasing news via SMNR, Livingston Communications http://www.livingstonbuzz.com/blog/2007/05/29/geocommons-social-media-release-a-case-study/

New Adventures of Old Christine (June 14, 2007): The show was about to get a new day and time, and she thought outreach to parent bloggers was a perfect fit, CBS via Marketing Roadmaps http://getgood.typepad.com/getgood_strategic_marketi/2007/06/defining_social_1.html

Sci Fi Channel Digital Press Tour (July 12, 2007): Sci Fi channel begins blogger relations program by providing access to filming setsSci Fi, Channel via Marketing Roadmaps http://getgood.typepad.com/getgood_strategic_marketi/2007/07/sci-fi-channel-.html

Goodwill’s Social Media Strategy (August 29, 2007): How Goodwill used social media to rebrand its vintage clothing, Livingston Communications http://www.livingstonbuzz.com/blog/2007/08/29/case-study-goodwills-social-media-strategy/

Five Lessons from the SIGGART Online Word of Mouth Campaign (August 30, 2007): Thiseco-friendly aluminum water bottles company chalked up tons of quantifiable results, including 8000 unique visitors who visited for an average of 17 minutes, Gold Group http://goldgroup.blog.com/2045504/

Hugh Macleod at gapingvoid has done a spectacular job of marketing Stormhoek wine entirely through blogs and social networking, vis a vis BL Ochman (Sept. 17, 2007) http://www.whatsnextblog.com/archives/2007/09/with_as_many_as_1200.asp

Gates Foundation ED in ‘08 (Sept. 25, 2008): This very successful case study shows social media tools from video to Facebook, and calls to action like ordering endorsement kits, Mindshare Interactive http://www.livingstonbuzz.com/blog/2007/09/25/era-of-conversation-case-study-gates-foundations-ed-in-08-campaign/

Social Media Case Study: CMP’s TechMash (September 27, 2007) Social media forms used to garner attendance at CMP event, Horn Group http://www.engageinpr.com/?p=348

A Social Media News Release from Eurekstar (October 2, 2007): Shift Partner and Father of the SMNR breaks down form and function in this one, SHIFT Communications. http://www.pr-squared.com/2007/10/a_social_media_release_work.html

Marketing Pro Lewis Green discusses how his BizSolutionsPlus blog yielded four clients in one year (October 15, 2007). http://lgbusinesssolutions.typepad.com/solutions_to_grow_your_bu/2007/10/a-case-stufy-bl.html

Squidoo is profitable, and without venture capital, Viget Labs and Seth Godin (December 18, 2007)
http://blog.viget.com/squidoo-profitable-and-lasting-without-vc/

The White House uses social media to get the word out on drug policies (December 18, 2007)
http://www.livingstonbuzz.com/blog/2007/12/18/case-study-white-house-pushes-back/

ITToolbox, who’ve grown their social network for IT professionals into multi-million business with more than $8 million in ad sales, and 1.7 million pages of user generated content as of Jan. 1, 2008.
http://www.ittoolbox.com/

Sony drives approximately 11,000,000 million visits to 30 Days Night moviecontests page using Facebook widget (reported by Jeremiah, January 29, 2008) http://www.web-strategist.com/blog/2008/01/29/case-study-how-sony-leveraged-a-popular-vampire-facebook-widget-to-reach-its-community/

Nokia’s Mosh creates more than 200,000 rabid friends, almost 30 million downloads through crowd-sourcing initiative (reported by the Buzz Bin, March 3, 2008) http://www.livingstonbuzz.com/blog/2008/03/03/nokia-mosh/

The Human Capital Institute uses its liveblog to engage its membership, determine if they are social media savvy, Livingston Communications (March 18, 2008) http://www.livingstonbuzz.com/blog/2008/03/18/case-study-national-human-capital-institute-liveblog/

H&R Block Friends Stressed Out Taxed Americans on Twitter (reported by Social Media Explorer, March 21, 2008) http://www.socialmediaexplorer.com/2008/03/21/case-study-how-to-blatantly-advertise-through-social-media-%E2%80%A6-and-get-away-with-it/

Disney’s continued MySpace Step Up 2 the Streets success yields a surprise box-office hit; it also managed to expand the movie’s already sizeable and enthusiastic group of fans. The movie’s MySpace profile has more than 156,000 friends (March 24, 2008, AdAge via Social media Optimization).
http://social-media-optimization.com/2008/03/a-successful-myspace-social-media-campaign/

Neat Receipts Becomes a Hit with Mommy Bloggers (SHIFT Communications, April 2, 2008).
http://www.pr-squared.com/2008/04/blogger_relations_case_study_m.html

The U.S. Department of Health and Human Services’ Pandemic Flu Leadership Blog: HHS engaged national leaders and the online pandemic flu community through its 5-week blog summit (June 2007 by OgilvyPR). http://blog.pandemicflu.gov/

Joffrey’s Coffee & Tea Company drove traffic to their site, increased buzz and branded in social media and the blogosphere using a beta test. More than 1500 blogs participated (Pierson Grant Public Relations, June 3, 2008). http://thefuturebuzz.com/2008/06/03/a-case-study-in-building-buzz-in-the-blogosphere-joffrey%E2%80%99s-coffee-tea-company/

Scripps Networks - HGTV’s Rate My Space. Online community creates prime advertising real estate, generating ROI within weeks and creating continuous stream of advertising revenues. Success leads to companion television series - social media successfully serves to bridge gap between online and on-air (NY Times, June 19, 2008). http://tvdecoder.blogs.nytimes.com/2008/06/19/a-home-improvement-web-site-begets-a-tv-series/

Adidas leverages mobile social media to increase retail revenues 20x around NBA All Star game in Vegas (Event Marketer, June 24, 2008). http://www.eventmarketer.com/viewmedia.asp?prmMID=2107

Network Solutions is using a monitoring program to turn around a negative blog post ratio in the 58 percentile range (Livingston Communications, August 8, 2008). http://www.livingstonbuzz.com/2008/08/07/network-solutions-changes-perceptions-with-new-actions/

The Nature Conservancy leverages Facebook and Digg for cause marketing: How TNC raised nearly $75,000 through Facebook Causes and a partnership with Lil Green Patch, a popular Facebook application. The group has also built significant brand awareness through the social news site Digg! (As reported by Jonathon Colman of TNC, September 29, 2008). http://www.slideshare.net/jcolman/fundraising-on-facebook-a-new-model-for-fundraising-on-facebook-using-an-old-skool-tool-causerelated-marketing-presentation

JetBlue Twitter – Case Study: When JetBlue joined Twitter in the spring of 2007, it was one of the first major brands to do so. Today, the company has nearly a million of followers, and its account is often cited as an example of smart corporate twittering. But the company started out on Twitter with modest goals. It wanted to help customers. http://business.twitter.com/twitter101/case_jetblue

Teusner Wines Twitter – Case Study: Teusner Wines, a boutique winery in Australia’s Barossa Valley, has three employees. Dave Brookes is the sales and marketing department. A cycling fan, Brookes was watching the Tour Down Under in January 2009 when he noticed that Lance Armstrong was on Twitter. “I followed him,” says Brookes, “and I starting thinking Twitter would a good tool to tell people about the winery.” http://business.twitter.com/twitter101/case_teusner

Current Media Twitter – Case Study: For the 2008 presidential elections, Current knew it had to do something different. The media company, headquartered in San Francisco, would receive the same live feed of the debates as every other broadcaster. Unless Current distinguished its coverage, viewers would have no particular reason to tune in. http://business.twitter.com/twitter101/case_current

Tasti D-lite Twitter – Case Study: The popular dessert franchise Tasti D-lite offers customers over 100 flavors of guilt-free frozen treats. Tasti has been beloved by customers in the greater New York area for over 20 years, growing to 50+ locations and continuing to open new locations while expanding its geographic reach. http://business.twitter.com/twitter101/case_tastidlite

CoffeeGroundz Twitter – Case Study: CoffeeGroundz is a popular, albeit modest, Houston, TX based independent coffee shop that sells a variety of locally roasted coffee, tea, pastries, sandwiches, and alcoholic beverages. There are a couple of booths, 16 tables and another ten on the patio. If you come to CoffeeGroundz, J.R. Cohen, its general manager, strives to make sure “you feel at home.” http://business.twitter.com/twitter101/case_coffeegroundz

Etsy Twitter – Case Study: Etsy is an online marketplace for buying & selling all things handmade. Since launching in 2005, the Brooklyn, NY company has grown to over 65 employees. More importantly, over 250,000 sellers have opened up shop on Etsy to sell their handmade goods.
http://business.twitter.com/twitter101/case_etsy

NAKEDPizza Twitter – Case Study: Founded in late 2006 as one small store in New Orleans in an area that flooded during hurricane Katrina, NAKEDPizza (originally named World's Healthiest Pizza) was launched as an ambitious business model that seeks to change the nutritional profile of fast food in America.
http://business.twitter.com/twitter101/case_nakedpizza

American Apparel Twitter – Case Study: The Los Angeles company and leading basics brand provides hip clothing for people of all ages. Vertically-integrated American Apparel is the largest clothing manufacturer in the United States. http://business.twitter.com/twitter101/case_americanapparel

Pepsi Twitter – Case Study: Pepsi may be a classic brand, but it’s using 21st century tools to collaborate and build relationships with customers.
http://business.twitter.com/twitter101/case_pepsi

Social Media Assessment Case Study Citrix Webex

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More to follow...

Interesting Social Media Trends - A Study

Social media trends indicate that online marketing is set to undergo a dramatic makeover. Businesses are increasingly integrating social networking websites into their marketing strategy. A recent study conducted by the Association of National Advertisers (a representative body of American marketers) revealed that 26% of marketers found trends in social media taking it towards further growth.

Recession has called for accountability and efforts are being made towards innovating measurement techniques. This would help in calculating the ROI from marketing through social media. The Online Measurement and Strategy Report 2009 (conducted by Econsultancy in combination with Lynchpin) recorded that the proportion of firms looking at social media metrics has doubled during the course of a year from 21% to 40%.

The popularity of tools monitoring the buzz continues to rise. Be it staying alert with Google or inhaling the web on Addictomatic, such tools have become essential to internet marketing. Influence has emerged as a main indicator of success. The authority an account exercises over its followers and the networking activity as a whole are becoming the measurement tools.

# Social Media Engagement Trends
Over 60% of young consumers use social networking sites at least weekly, and about 40% check their networks every day. These young creators grew up in the age of personal computers, graphical user interfaces, and digital social annotations. The social computing boom of the past few years has created an online identity and digital hub, altered as frequently as one's clothes.



Adults are also researching news and creating content online. 22% of adults read blogs at least monthly, and 19% of adults surveyed are members of a social media site. Customer ratings and reviews was the most popular online activity, with about 40% of survey participants utilizing sites such as Amazon to read the thoughts and opinions of peers before making a purchase.



Forrester analysts identified six levels of social media participation in ascending levels of sophistication: inactives, spectators, joiners, collectors, critics, and creators. The categories are not mutually exclusive, as a blog author (a creator) will likely read other blogs (as a spectator), occasionally comment (a critic), and perhaps use web feeds or annotation tools (a collector).

These varied levels of social media participation highlight the need to better engage your audience across the board, easing them into the social media experience. Many social media sites focus on the joiners and creators, setting high barriers of entry and participation. A casual reader might mark a story or video as a personal favorite, or share a collection with friends. A collector might engage more audience members, creating a more focused community for a niche audience. Businesses and websites can engage multiple market segments and open up their community to wider participation.

# Comparative Analysis of Top Social Media Networks





# The Rise of New Business Models?

Frankly, predicting new business models within the media industry is difficult with its complex web of content distribution relationships spanning theaters, international distribution, cable and satellite distribution. However, with the success of industry ratified models like Hulu and the sense of inevitability that content is destined towards freedom, 2009’s recession will force new media models into play because the old models aren’t working any more.

Business Week’s Steven Wildstrom notes that consumers can’t find many great old movies on DVD or online in this era of the long tail retailing.

The battle is between an industry that wants to tightly control who gets to see what when and customers who want to watch what they want wherever and whenever. This clash is slowly being resolved in favor of consumers. Movies are becoming available for download and on DVD more quickly after theatrical release. Director Steven Soderbergh has a deal with Mark Cuban’s Landmark Theatres and HDNet that allows some of his movies to be released on disk and online the same day they show up in theaters. I expect more movies to be launched this way.

The day you can choose to see a new movie in a theater, on your TV, on your laptop, or on your iPhone is still some time off, but it is coming.

# The 2009 Recession will Elevate Social Media Marketing as a Corporate Cost Control Measure

Brand advertising has generally employed one-way messaging to consumers who typically respond to brand commercials as agenda-laden, or even spam. That’s why Tivo fast forwarding of ads is a value proposition. Brand advertising developed in the 1950’s with Madison Avenue’s recognition of the power of the new visual media to branding. It worked because broadcast TV was, at the time, the most optimal means to distribute the message.

Brand advertising is expensive because it employs the vertical professional services of advertising agencies – creative, research and production – to develop “campaigns”, and ad budgets for mass market placement. Social media in part threatens to disintermediate advertising professionals by leveraging “crowdsourcing” to test marketing and advertising concepts more quickly and cheaply.

# Entertainment Bubble
“Content creators are layering a multitude of media into entertainment for simultaneous consumption and engagement. For example, “LittleBigPlanet” users are gamers, social networkers and content creators, “The Hills” ‘Backchannel’ social networking site is where fans can gather to talk about the show as its happening on TV, and author StephenieMeyer has a playlist that readers can listen to while they’re reading the Twilight series. People are almost in an entertainment bubble of sorts”. -- Ann Mack, Director of Trendspotting, JWT (Source: sctimes.com)

# On Mobile
Social networks are going mobile. With devices such as the iPhone closely integrating the Web and cell phones, social networks like MySpace are working towards establishing their mobile presence.
“..Next year your media friend might start collecting dust when a mighty mini version takes hold, with the iPhone, the Bold and the Google phone, we’re beginning to truly be able to take our shows on the road. For example, the iPhonecan be a baby monitor and a Google phone, such as the T-Mobile G1, has a bar code scanner which allows you scan any bar code at the store and then immediately compare prices online. People are cutting their Internet service to save money and relying on their phones. After all, an iPhoneis much easier to fit into your pocket than an iBook”.
Mobilize Me -- Jane Buckingham, President, The Intelligence Group
Source: sctimes.com

Companies will continue to place a high priority on mobility initiatives primarily for productivity increases, with mobility activities heating up in emerging markets. In addition, we will see growth in the mobile "wannabe" user segment as employees bring their personal devices, such as the iPhone, into work and expect organizations to develop ways to support these new devices —even with the slowdown expected in consumer mobile device purchases. -- Forrester

# On Engagements
“The recession will put consumers in a more powerful position. Feedback 1.0 was the lone customer posting a review or complaint and companies ignoring him. Feedback 2.0 was when millions posted, with companies largely ignoring them.

Feedback 3.0 finds companies listening and replying. For example, Starbucks lovers can already “help shape the future of Starbucks,” by sharing their ideas online, and hotel managers can respond to complaints and praises posted on TripAdvisor”. -- ReinierEvers, Founder, TrendWatching.com

# “How Social Media is helping businesses?”
Facebook Connect, and its social network cousins Google Friend Connect, and the still obscure MySpace ID will facilitate the portability of social networks, or the “social graph”. This will be one of the most powerful applications towards creating a social media business model in 2009, but is hard to explain to social media newbies. What does it mean?

Through Facebook Connect, consumers log into other sites using their Facebook login details. Once inside the site, users can discuss or post their activities in real time to their Facebook network. The effect is to bring in their network of friends into the hosting site. For example, a teenage girl may visit a Facebook Connect – enabled retail fashion site like Forever 21, buy an awesome sweater at a deep discount sale price, and broadcast this fact to her large Facebook network. A few of her Facebook friends do the same thing, and by extension, you can imagine the instant viral marketing power of each new succeeding Facebook network put “into play” for a good sweater deal.

# Crowd sourcing will be a huge social media trend for 2009.



Crowd souring has the potential to take off pretty big, although i don’t see the online movement in that direction. The launch of Predictify suggest such a conclusion. Also, Idea Blob has been fairly successful. There are a number of crowd sourcing creative (graphic design and video) that are bubbling to the surface beyond the e-lance model. This will only continue to increase as the need for outsourcing and budget cutting continues in 2009. The trend known as crowd funding may also see an upward and exciting trajectory.

# Rise of video driven communities
Video driven communities that drive conversation will take off in social media. Winelibrary TV, Epic FU, and The Politico Playbook (aka Kotecki TV) have shown what video can do. Momversation, sponsored by Target, is driving conversation and community around the issues of moms. The video serves as a fantastic differentiator, creates emotional connection, and is potentially truly remarkable content.

Indian Commodities Trading Market

Turmoil in financial markets, slower growth in high-income countries, and rising inflation have all adversely affected growth prospects for developing countries over the near term. Most countries have shown impressive resilience in this turbulent environment, and growth for developing countries as a group is expected to moderate from 7.8% in 2007 to a still strong 6.5% in 2008. However, vulnerable countries that depend on foreign capital flows are likely to experience a sharper slowdown. Moreover, despite strong production growth at the aggregate level, higher food and energy prices have caused real incomes to decline, significantly increasing the hardships faced by the very poor, particularly in urban centers.

A recent article in the Wall Street Journal noted that if one were to examine the historical performance of the S&P 500, one would find that the stock market is trading at the same level at which it was doing so nine years ago. Commodities markets, on the other hand, have been in a bull trend. Some of the major drivers that have contributed in this stupendous growth of commodity markets globally are
- Increasing influence of Asian demand, particularly from rapidly industrializing China and India
- Increase in commodities prices in international markets as a result of demand growth, reinforced by tight supply capacities, tense geopolitical conditions (especially with respect to the oil market) and intense speculative activity
- With the rise in prices of crude oil, metals and minerals, commodity prices reached record historical levels in nominal terms in 2006, which increased by more than 30% between 2005 and 2006 (and by 80% from 2000 to 2006).
- Numerous developing countries rely on commodities for export revenues, and commodity production and trade provide employment for more than 2.5 billion people worldwide.
- The considerable rise in prices has had an impact on incomes of developing countries. It is estimated that extra revenues resulting from commodity exports were around 6.7 percentage points of GDP for oil-exporting countries and about 3 percentage points for countries exporting mining products.
- Increases in demand from developing countries stimulated by a particularly vigorous commodity consumption per unit of GDP compared to that of developed countries, faster economic growth, and increasing population
- "Globalization" of securities and commodities markets
- Baby boomers are in the middle of their peak savings years and have been one of the major causes of huge inflows of money into the stock market and into mutual funds.
- The increased use of food crops for production of bio-fuels is an important factor that led to large increases in the prices of vegetable oils and grains in 2007, which in turn contributed to an overall 15 percent increase in the index of agricultural prices and a 20 percent rise in food prices.
- The prices of metals have increased more than other commodity prices over the last four years, largely because of an especially strong demand in China.
- Shortages of equipment and skilled workers have significantly increased development costs, and ore grades are deteriorating.

The report on “Indian Commodities Trading Market” offers an in-depth analysis of the Global Commodities Trading Market vis-à-vis the Indian Commodities Trading Market. It discusses the overall structure of the Global Commodities Market as well as Indian Commodities Market from an insider perspective and provides a comprehensive study on macro and micro factors driving the growth of this market.

The report furnishes up-to-date facts and figures following meticulous observation with an aim to provide you with real insights into the commodity trading market as it stands today; the knowledge one needs to stand out and make informed decisions. The expanse of such insights into the past and present scenario percolates down to every known commodity currently traded. A conscious effort has been made to provide an overview of all there is to know and know of in the volatile market whilst a detailed product-wise and segment-wise is used in conjunction to expand. Taking into account that Price and Risk being the key drivers of the market, the report presents an exclusive section which maps price growth trend behaviour, factors triggering such behaviour, tracking relative performance of commodities , effects on the market players directly or indirectly using composite indexes from leading sources, the use of various hedging tools such as forwards and options and the relative performance in comparison, the implication and significance of the various regulatory bodies, commissions and statutory acts to highlight a few.

Table of Contents

Section I: Commodities Trading – An Overview

1. How Commodities Market Evolved – Historical Perspective

2. How Commodities Trading Market Works
2.1 Involved Parties
2.2 Types of Contracts
2.3 Participants in derivative contracts
2.4 Trading Techniques in Commodities Market
2.4.1 Ready Delivery Market
2.4.2 Specific Delivery Market
2.4.3 Futures Market
2.4.4 Auction Market
2.5 Requirement & Benefits of Commodity Derivatives

Section II: Commodities Market – An Analysis

1. Global Commodities Market – An Overview
1.1 Commodities Trading vis-à-vis Role of Investment Banks
1.1.1 Barclays Capital Commodities - Profile
1.1.2 BNP Paribas Commodity Futures – Profile
1.1.3 Citi Global Commodities – Profile
1.1.4 DB Commodity Services LLC - Profile
1.1.5 Goldman Sachs Commodities – Profile
1.1.6 J.P. Morgan’s Global Commodities Group – Profile
1.1.7 Merrill Lynch Global Commodities (MLCI) - Profile
1.1.8 UBS's Commodities Group
1.2 Energy Trading vis-à-vis Energy Trading In-house Divisions
1.2.1 RBS Sempra Commodities
1.2.2 Chevron’s Supply & Trading
1.2.3 LITASCO (LUKOIL International Trading and Supply Company)
1.2.4 Koch Supply & Trading
1.2.5 AEP Energy Services (Subsidiary of American Electric Power Company, Inc.)
1.2.6 Duke Energy Trading and Marketing (DETM)
1.2.7 Shell Trading (US) Company
1.2.8 Reliant Energy Securities & Commodities Trading Center
1.3 Commodity ETFs and ETNs
1.4 Commodity Trading vis-à-vis Sovereign Wealth Funds (SWFs)
1.4.1 History of SWFs
1.4.2 Driving Factors, Issues, Trends & Opportunities
1.4.3 Sources of Capital
1.4.4 How & where the money is invested – Market Size & Projections
1.4.5 Fund Rankings: Largest Funds by Assets under Management

2. Global Commodities Market Analysis
2.1 Global Commodities Market Size & Forecast
2.2 Commodity Market Profiles – Quick Points (Profile, Producers, Consumers, Largest Markets, Price Performance & Top Companies)
2.2.1 Aluminium Market
2.2.2 Cocoa Market
2.2.3 Coffee Market
2.2.4 Copper Market
2.2.5 Cotton Market
2.2.6 Gold Market
2.2.7 Nickel Market
2.3 Global Commodities Indexes – Performance Analysis
2.3.1 Dow Jones - AIG Commodity Indices
2.3.2 Merrill Lynch Commodity index eXtra (MLCX)
2.3.3 S&P GSCI™ Composite Index
2.3.4 Reuters/Jefferies-CRB® Indices

3. Issues, Trends & Opportunities
3.1 Impact of higher commodity prices
3.2 Movement of oil prices
3.3 Performance of agriculture commodities
3.4 Companies turn to top derivatives dealers for help in hedging
3.5 Carbon to be the biggest global commodity market by 2012
3.6 Renewed interest from investors
3.7 More sophisticated tools & platforms
3.8 Investment banks are major players
3.9 ETFs, changing the equation of Commodities Investment
3.10 China – Major Demand Driver of Global Commodities
3.11 Macro-Economic Driving Factors
3.12 Factors affecting pricing of base metals
3.12.1 Lead (75% y-o-y growth)
3.12.2 Tin (66% y-o-y growth)
3.12.3 Zinc (40% y-o-y decline)
3.12.4 Nickel (4% y-o-y decline)

Section III: Indian Commodities Trading Market

1. Indian Commodities Market – An Overview

2. Indian Commodities Market Size – An Analysis
2.1 MCX vs. SENSEX – A Comparative Analysis

3. Indian Commodities Market – Performance Analysis
3.1 Aluminium Market – Future Contract Value (Jan 07 – Jul 08)
3.2 Coffee Market – Robusta Futures Contract Value (Jan 07 – Aug 08)
3.3 Copper Market – Copper Futures Contract Value (Jan 07 – Jul 08)
3.5 Crude Oil Market – Crude Oil Futures Contract Value (Jan 07 - Aug 08)
3.6 Gold Market – Futures Contract Value (Jan 07 – Aug 08)
3.7 Chana (Chickpea) Market – Futures Contract Value (Jan 07 – May 08)
3.8 Nickel Market – Futures Contract Value (Jan 07 – Jul 08)
3.9 Zinc Market – Futures Contract Value (Jan 07 – Jul 08)
3.10 Lead Market – Price Performance (Jan 07 – Aug 08)
3.11 Cardamom Market – Futures Contract Value (Jan 07 – Jul 08)
3.12 Jeera (Cumin Seed) Market – Futures Contract Value (Jan 07 – Jul 08)
3.13 Lead Market – Futures Contract Value (Jan 07 – Jul 08)
3.14 Mentha Oil Market – Futures Contract Value (Jan 07 – Jul 08)
3.15 Natural Gas Market – Futures Contract Value (Jan 07 – Jul 08)

4. Government Regulations, Initiatives and Reforms
4.1 Setting up a Committee on Role of Futures Trading in 1993
4.2 Setting up of Forward Market Commission in 1953
4.3 Forward Contracts (Regulation) Act, 1952
4.4 Forward Contracts (Regulation) Amendment Bill, 2006
4.5 Forward Contracts (Regulation) Amendment Ordinance, 2008
4.6 Commodities Trading Tax
4.7 Import duty cut & export duty hike in Metals industry

5. Issues, Trends & Opportunities
5.1 Commodity Trends: Hurt by economic slowdown
5.2 Multi Commodity Exchange (MCX) launched currency futures trading
5.2 Hedging ban a slow political process to kill futures market
5.3 Commodity investment goes retail
5.4 Unresolved Issues and Future Prospects
5.5 Scrap now being considered a waste commodity
5.6 Commodity and Equity Markets have been moving in tandem
5.7 Indian Bt Cotton to hit market soon
5.8 Warehousing to take giant leap in India

List of Charts

Chart 1: Mode of Financing in Commodities Trading
Chart 2: Business Operations Model of a Trading Process in a Commodity Exchange
Chart 3: SWFs Market Projections (2007-2012)
Chart 4: Comparison of AUM of SWFs and Asset Managers, Private Equity and Hedge Funds ($ billions)
Chart 5: Sovereign Wealth Fund Deal Volume (1997-2007)
Chart 6: Sector-wise growth: Exchange trade of commodity derivatives by volume (03-06)
Chart 7: World’s leading Commodity Exchanges in developing countries – 2006 Contracts ($millions)
Chart 8: Major base metal commodity exchanges & emerging markets
Chart 9: Base Metal Price Trend – 2006 vs. Present Price
Chart 10: Cocoa Monthly Averages of Daily Prices (Oct 07- Oct 08)
Chart 11: ICO Indicator Prices - Annual & Monthly Averages (1998 to 2008)
Chart 12: Global Cotton Average Price Trend ("A" Index (cents/pound)) – 1988 -2008
Chart 13: Merrill Lynch Commodity index eXtra (MLCX) - Commodity Weightings
Chart 14: MLCX Weights as of January 2008
Chart 15: MLCXTR outperformance vs. SPGCCITR & DJAIGTR
Chart 16: Reuters/Jefferies CRB® Total Return Index: Jan 82 – Sep 08 (monthly close)
Chart 17: Forecast of China's Share of the Growth in Demand for Global Commodities- 2009
Chart 18: Types of Commodities Traded in India
Chart 19: MCX vs. SENSEX – Comparative Analysis (Jan 06-Sep 08)
Chart 20: India's Aluminium Futures Contract in Value (Rs. Crore) (Jan 07 – Jul 08)
Chart 21: India's Coffee Robusta Futures Contract in Value (Rs. Lakhs) (Jan 07 – Aug 08)
Chart 22: India's Copper Futures Contract in Value (Rs. Crore)
Chart 23: India's Crude Oil Futures Contract in Value (Rs. Crore)
Chart 24: India's Gold (1Kg) Futures Contract in Value (Rs. Crore)
Chart 25: India's Gold (100g) Futures contract in Value (Rs. Crore)
Chart 26: India's Chana (Chickpea) Futures Contract in Value (Rs. Crore)
Chart 27: India's Nickel Futures Contract in Value (Rs. Crore)
Chart 28: India's Zinc Futures Contract in Value (Rs. Crore)
Chart 29: India's Lead Futures Contract in Value (Rs. Crore)
Chart 30: India's Cardamom Futures Contract in Value (Rs. Crore)
Chart 31: India's Jeera (Cumin Seed) Futures Contract in Value (Rs. Lakhs)
Chart 32: India's Lead Futures Contract in Value (Rs. Crore)
Chart 33: India's Mentha Oil Futures Contract in Value (Rs. Crore)
Chart 34: India's Natural Gas Futures Contract in Value (Rs. Crore)

List of Tables

Table 1: The Global Economic Outlook (2006-2010)
Table 2: Major Global Commodity Exchanges
Table 3: Major Asian Commodity Exchanges
Table 4: Major European Commodity Exchanges
Table 5: Commodity Traders – List of top banks, Financial Institutions & other top companies
Table 6: Fund Rankings: Largest Funds by Assets under Management
Table 7: Global Commodity Prices – Monthly & Yearly Averages (Jan 06 - Sep 08)
Table 8: Commodity Forecast Nominal Prices (2007-2020)
Table 9: World Cocoa Market Estimates (in million metric tons) – 2002-2008
Table 10: ICO Indicator Prices - Annual & Monthly Averages (1998 to 2008)
Table 11: Global Cotton Average Price Trend ("A" Index (cents/pound)) – 1988 -2008
Table 12: Comparison of Commodity Indexes
Table 13: Dow Jones AIG Total Return Performance %
Table 14: Dow Jones AIG Excess Return Performance %
Table 15: Dow Jones AIG Yearly Returns (1990-2008)
Table 16: DJGI AIG Commodity Index - Commodity Weightings
Table 17: Merrill Lynch Commodity index eXtra (MLCX) - Commodity Weightings
Table 18: S&P GSCI™ Components and Dollar Weights (%)
Table 19: S&P GSCI™ Index Values
Table 20: Commodity Exchanges in India
Table 21: Trend of Commodities in National Commodity & Derivatives Exchange (Oct 08)
Table 22: Trend of Commodities in Multi Commodity Exchange of India (Oct 08)
Table 23: Trend of Metals in Multi Commodity Exchange of India (MCX) and National Commodity & Derivatives Exchange (NCDEX) (Oct 08)
Table 24: Trend of Oil Commodities traded in NYMEX (Oct 08)
Table 25: Trend of Metal commodities traded in NYMEX (Oct 08)

Pages: 186

N-deal spins off 100,000 new jobs

One of the spin offs of the India-U.S. civil nuclear deal coming through will be the creation of 100,000 new jobs for the 30-odd reactors that India hopes to set up to meet its nuclear power deadline of 20,000 MW by 2020, experts say. Congress MP Rahul Gandhi highlighted the fillip the deal is expected to give to employment generation and the energy sector. Interacting with students of Ravindra Bharati in Hyderabad on Saturday, Gandhi said: "The nuclear deal means millions and millions of jobs, and lights in the houses of the poor in this country."

Union Minister of State for Commerce and Power Jairam Ramesh, visiting the Department of Atomic Energy (DAE)'s Kalpakkam campus in Tamil Nadu, said: "Nearly 10,000 MW of nuclear power would be generated from indigenous reactors, 8,000 MW from light water reactors and 2,000 MW from Fast Breeder Reactors (FBR)."

Thousands of engineers, technicians and scientists would be needed to run these establishments, he underlined. "India's 17 nuclear reactors have the capacity to generate 4,120 MW, but in 2007 they could produce only 1,800 MW due to lack of fuel," Ramesh said. By 2020, India is likely to import six light water reactors while six nuclear plants are under construction to beef up generation capacity, said Nuclear Power Corporation of India Ltd Technical Director S.A. Bhardwaj. The total expansion is valued at nearly $300 billion.

"India's Department of Atomic Energy employs about 70,000 experts today," M.R. Srinivasan, former chairperson of the Atomic Energy Commission, told the media at a function in Kalpakkam. The new nuclear power plants on the cards are expected to create at least a 100,000 new jobs in India, experts say. Not just in India, the nuclear deal is expected to give a fillip to the industry in the US also.

In 2007, Ron Somers, president of the US-India Business Council, supporting the Indo-US Nuclear Cooperation Agreement, said: "The deal would create 27,000 high-quality jobs a year for the next 10 years in the US nuclear industry." To strengthen research at universities, the DAE is providing grants for projects through the Board of Research in Nuclear Sciences. The DAE Graduate Fellowship Scheme for the Indian Institutes of Technology (IITs) has been in place since 2002 to promote collaborative research through postgraduate students.

IIT-Kanpur offers a course in nuclear engineering and technology, now IIT-Madras has also decided to offer a similar course from the 2009 academic session. The country's premier institute for nuclear studies and research - The Homi Bhabha National Institute - will provide the necessary guides and teaching staff. India has two hubs for advanced studies in nuclear technology - Mumbai and Kalpakkam. The Mumbai-based Bhabha Institute unifies 10 institutions, four premier centres and six autonomous institutes, each with a research-driven framework.

Bhabha Institute also includes DAE's top research institute, The Bhabha Atomic Research Centre where old horses of the '80s, the Cirus and Dhruva reactors, are still kept going. DAE's other research institute is the Indira Gandhi Centre for Atomic Research (IGCAR), which was set up in 1971.

"The IGCAR has an open door policy for any student keen on science," says institute director Baldev Raj."The IGCAR has tried to strike a balance between networking with institutions with expertise and collaborating with academia for harvesting fresh thoughts," he added. According to the Nuclear Energy Institute, 30 countries worldwide are operating 439 reactors for electricity generation and 34 new nuclear plants were under construction in 14 countries.

Sources: IANS and Silicon India

Strategic Initiatives of Credit Suisse in Eastern Europe

Traditionally Credit Suisse had seen the highest growth coming in the East, in countries like Russia and Kazakhstan and in some of the other Central Asian countries. Central Europe has grown a little bit more slowly and they are expecting that looking forward in 2007 and 2008 as well.

Area of focus for CSFB
The largest driver of growth within Central Europe is likely to be Poland where Credit Suisse is looking at a growth rate of up to 5.5 percent, or 6 percent. Poland is the area Credit Suisse is focused on in Central Europe. It’s a very deep and exciting equity market with a very diverse sector representation.

Which countries will underperform?
From a growth perspective, Credit Suisse is hoping Hungary will lag a bit behind this year on a growth perspective. That is mainly because CSFB sees the government making significant cuts in fiscal spending in order to achieve the Maastricht criteria target of less than 3 percent GDP budget deficit. It is likely that they will see less government spending in Hungary over the coming years. That is likely to have some impact on the growth rate in the country overall.

Difference in development between the two new EU members and the rest of the region
Rumania and Bulgaria are the newest EU members. They joined in January of 2007. They think these are very interesting countries for investment. Unfortunately, Credit Suisse had seen a pretty shallow equity market historically in these two countries. CSFB is anticipating some new IPOs over the coming year that will allow them to invest in both Rumania and Bulgaria in a more significant way going forward.

On Russia’s economic growth?
On the commodity side, Credit Suisse is quite bullish on commodity prices. They are expecting commodity prices to maintain the high levels that we’ve seen over the past few years. One of the most positive aspects of Russia is that Credit Suisse is really starting to see diversification in the economy. One of the biggest drivers across the region, and for Russia in particular, will be growth in consumption and growth in investment. The government is looking to spend a lot of money on infrastructure build over the coming years. Credit Suisse do see the growth of the Russian consumption being hugely important for the economy overall.

The oil, gas industry certainly is the major industrial sector within the Russian market. Credit Suisse is starting to see some new industries grow. They are hoping to see more IPOs in these areas, so they can participate in those growth areas of the market. An example would be the IT sector. Credit Suisse do see a fairly large IPO going on in the IT sector today. We could see some growth in that industry over time, so we are looking to tap into some of these opportunities.

Trends
The fragmentation of the $50 billion European fixed-income market illustrates the diversity of the competitive landscape. Today, 11 major global players have a share of just under 50% of the market, nine major regional players have 27 percent, and around 40 national players have just under a quarter. Each category includes highly profitable players. Profits come from the more value added products such as derivatives and hybrid securities and from regions such as Eastern Europe and the Middle East. As a result of intense competition, the core investment-grade bond business and other plain-vanilla product categories have wafer thin margins.

Another consequence of that competitive intensity has been the death of the sole adviser. Clients have many mouths to feed at payback time, after months or years of diligent coverage by the major firms. Consequently, big IPO and M&A deals typically involve a number of advisers. Inevitably, this arrangement puts even more pressure on the economics of banking.

The industry's radical transformation is likely to continue as major banks in Europe, as well as global banks that do business there, seek to build winning corporate- and investment- banking franchises. The bad news is that competition will intensify. The good news is that it will likely drive further innovation, spurring primary demand as more of Europe's financial-intermediation activity moves to the capital markets.

CSFB thinks most interesting sectors in the equity market today are the retail and consumption driven sectors. Retail stocks would be a place that is very interesting as well as infrastructure stocks. The main way Credit Suisse is looking at that theme is through the steel sector which is of course providing beams for some of the major road construction, some of the rail construction and a lot of the home buildings going on in the country.

According to CSFB, there are very few internal macroeconomic risks that could disrupt the long-term outlook for the markets. However, they do remain concerned about commodities. The equity markets are sensitive to commodities. So, any prolonged downside in the commodity prices certainly would be a negative for this region of the world. However, Credit Suisse expects that commodity prices will remain in relatively strong bands looking into the future.

Management reshuffle
Credit Suisse has reshuffled top-line management within parts of its European fixed-income capital markets business, following the decision of the bank's head of structuring to step down. The move announced in Jan 2007, spans three separate business areas and comes in direct response to Jeremy Bennett's decision to to take a sabbatical. As well as being the bank's head of structuring, Bennet is also co-head of European fixed-income capital markets and the emerging markets group.

As part of the reshuffle, Sudip Thakor takes over as head of the global structuring group in addition to his existing responsibilities as head of the fixed income derivatives product group in New York and co-head of the global credit trading business, which includes investment grade and emerging market credits.

Thakor is co-head of the global credit trading and sales business alongside Jonathan McHardy, who also runs the commodities business globally.
McHardy is now also solely responsible for managing the bank’s insurance and tax business, with Pedro Beroy and Larry Fletcher reporting to him directly. Credit Suisse’s European fixed income business was co-led by Bennett, but his departure now hands Gael de Boissard full control and responsibility for the London-based division.

Furthermore, the emerging markets group – one of the most lucrative revenue earning businesses within Credit Suisse’s fixed income division - is now being jointly run by Ram Nayak and Darren Walker. Nayak, who remains European head of commodities and co-head of fixed income for Eastern Europe , Middle East and Africa, reports directly to Thakor and McHardy.Nayak joins the bank’s fixed income operating committee with Walker, who holds on to his existing responsibilities for the EEMEA trading group that includes credit trading, credit derivatives and local currency trading.

Walker also reports directly to Thakor and McHardy. Bennett, who joined Credit Suisse First Boston as it was then known in 1997, has been one of the most important figureheads in carving out a new direction for Credit Suisse’s fixed income capital markets operations over the last three years.

Sources: Industry articles

US Institutional Fixed Income Asset Management Industry

Market Size

# The U.S. fixed income market is one of the largest securities markets in the world with more than $29.2 trillion in outstanding debt according to SIFMA as of September 31, 2007.
# The average daily dollar value traded rose from $274.0 billion in 1996 to $508.9 billion in 2001 and $889.8 billion in 2006.

Market Segmentation

# The retail fixed income market accounts for approximately 70 percent of the total fixed income transactions and is expected to expand as 75+ million baby boomers enter retirement and begin shifting investment assets from growth to preservation strategies. Institutional fixed income market accounts for the remaining 30% of the total market share. (Source: Knight Capital Group, Inc.)

Institutional asset management industry has become an important feature of modern financial markets, with the scale of this business’s importance readily apparent from the size of assets under management by different types of institutional asset managers. The growth of the professional asset management industry has been a key feature of the structural changes in the international financial system, a development with implications for many different aspects of the financial landscape - market turnover, securities issuance, international capital flows, market stability, industrial organization and corporate governance. A wide variety of institutional investors, with professional asset managers, has emerged - pension funds, insurance companies (life and non-life), and investment companies (of all kinds).

Market Trends

The sources of profitability & growth in the industry are shifting rapidly as evidenced by the following major trends:

=> With asset management involving a delegation process, shaping appropriate incentive structures is essential for aligning the incentives of owners of funds with those of the institutional managers of these funds.

=> As the industry is still regarded as an evolving business, its strong recent growth is expected to continue well into the foreseeable future. As a result, structural changes in the industry, to the extent that they affect asset managers’ incentives, are likely to have their effect on their decision-making and, possibly, market outcomes. Ongoing industry trends have therefore an obvious potential to change institutional investor behaviour in ways that can be important for global financial markets.

=> Traditional products are now trapped in a vise-like squeeze, with higher alpha and "cheap beta" products again capturing almost all asset growth;

=> The most successful traditional firms dramatically grew both their revenues and profits from alternatives, with these products now accounting for more than one-third of institutional revenues – up from almost nothing only five years ago;

=> As a result of both these trends, retail and institutional net prices have now almost fully converged, with major implications for client segment attractiveness;

=> The defined benefit market is far from dead, but flows are undergoing a radical shift, with higher-alpha, fixed income and cheap beta products the main sources of growth.

Consequences

While the industry overall remains highly profitable, firms that are unable to adapt to these changes will have a hard time maintaining future growth and profitability. Indeed, a direct consequence of the shifting sands of growth and profitability is that most firms continue to struggle to gain real operating leverage.

=> Even in this rapidly moving environment, the effective use of scale remains the dominant characteristic of the most successful asset management firms. Players pursuing any one of three "winning" business models – at-scale, multi boutique and focused-asset players – remain almost twice as profitable as those that do not. Moreover, firms following these models appear better positioned than their peers to adapt to the shifting sources of industry growth and profitability.

=> These rapid industry shifts pose a real challenge for firms' middle and back offices. Indeed, operations and technology have taken on a new strategic imperative, in particular around innovation, customer service, and efficiency; with leading asset managers already recognizing that the payoff for aggressively managing O&T has never been more compelling than it is today.

=> Broadening array of asset classes: The rise in professionally managed assets, both in absolute terms and as a share of overall financial wealth, was complemented by rising interest in non-core markets and, recently, some growth in funds placed with unregulated asset managers.

Sources: McKinsey and CGFS

Commodity market to reach $1.73 trillion by 2010: Assocham

The Indian commodity market is expected to grow by 30 percent and will reach Rs.74,156 billion ($1.73 trillion) in volume by 2010, according to a study by the Associated Chambers of Commerce and Industry of India (Assocham). Assocham found that the Indian commodity market expanded 50 times in a span of five years from Rs.665.3 billion in 2002 to Rs.33,753 billion in 2007 as people's participation in such trade continued to grow. "The growth in commodities derivatives trading would now grow by about 30 percent to reach a projected level of Rs.74,156 billion in the next two years," said Assocham president Sajjan Jindal.

The turnover in proportion to GDP of commodity trade increased from 4.7 percent in 2004 to 20 percent in 2007 and is expected to go up many-fold since commodity markets would remain friendly to subscribers. "The daily average volume of trade in commodities exchanges by December 2007 was over Rs.120 billion," said Jindal.

"Gold, silver and crude recorded the highest turnover in Multi Commodity Exchange (MCX) while in National Commodity & Derivatives Exchange Ltd (NCDEX), soya oil, guar seed and soyabean and in NMCE pepper, rubber and raw jute were the most actively traded commodities on an average. This trend is likely to continue," he added. The study points out that futures trading in commodities results in transparent and fair price discovery on account of large-scale participation of entities associated with different value chains.

It also noted that Indian commodity exchanges are still at a nascent stage of development as there are numerous bottlenecks hampering their growth. "Some of the major problems associated with commodity markets in India include infrastructure, trading system, broking community, controlled market, integration of regional and national exchanges and integration of spot and futures markets," the study said.

To attract active traders to commodity futures, the regulatory authority needs to introduce a more stringent code of conduct in setting standards for brokers, imposing capital adequacy norms and defining qualification criteria, it noted.

For a vibrant futures market, it is imperative that commodity pricing be left to market forces, without monopolistic government control. However, in India, scores of commodities in which futures trading is permitted are still protected under the Essential Commodity Act, 1955. The integration of the spot and futures market is another critical factor for the expansion of the commodity futures market in India. The state governments largely control the spot market in commodities, the study said. The institutional and policy-level issues associated with commodity exchanges have to be addressed by the government in coordination with the Forward Markets Commission in order to take necessary measures to pave the way for a significant expansion and further development of the commodity futures markets, Assocham stressed.

Sources: ASSOCHAM, Silicon India and PTI

Indian Telecom Market

Market Penetration
Every one in four Indians has a phone now, thanks to the scorching pace at which the burgeoning telecom services sector grew in the last fiscal, says an annual survey. With the total wireless subscriber base crossing 261 million as on March 31, wireless connectivity forms 22 percent of the total tele-density at 25 percent across the country, the survey adds. The annual survey by Voice and Data of CyberMedia group revealed that the Indian telecom subscriber base zoomed by 66 percent year-on-year (YoY) in the fiscal under review over the previous year.

"A booming economy, easing of entry barriers and lowering of tariffs fuelled the growth in FY 2008, with 104 million new subscribers getting connected and making India the second fastest growing telecom market in the world," CyberMedia publisher Prasanto K. Roy said Tuesday, citing the survey findings. The trigger for rapid telecom service growth was the revolutionary telecom policies of the present United Progressive Alliance (UPA) and the previous National Democratic Alliance (NDA) governments, resulting in affordable connectivity to a common man.

""With India's telecom tariffs still the lowest in the world, there's enormous and sustained growth beyond the metros. So telcos see huge opportunity in the three-fourths of Indians still untouched by the mobile phone revolution," Roy noted. Thriving in the growing market, the Indian telecom services industry generated Rs.1,306 billion ($31 billion) in 2007-08, registering 21.3 percent growth. Mobile, fixed line, national long distance (NLD), ILD, broadband, VSAT (very small aperture terminal) and radio-trunking constitute the telecom services industry. Growing at 36.4 percent YoY, revenue from mobile service increased to Rs. 766 billion from Rs. 562 billion in the previous fiscal (FY 2007).

Majority of new mobile subscribers is from towns and villages with less than 200,000 population. The mobile network covers about 50 percent of the 600,000 towns and villages across the country. The top five service providers vie for a larger share of the growing telecom pie. State-run BSNL (Bharat Sanchar Nigam Ltd) leads the pack with Rs.353 billion despite 12 percent decline from the previous fiscal," Roy pointed out.

BSNL is followed by Bharti Airtel, with Rs.264 billion, Reliance Communications Rs.186 billion and Vodafone Rs.155 billion, respectively. The top five operators based on cellular subscriber base are Bharti (62 million), Reliance (46 million), Vodafone (44 million), BSNL (41 million) and Idea cellular (24 million).

Prospects (Source: Gartner)
Total cellular services revenue in India is projected to grow at a compound annual growth rate (CAGR) of 18 percent from 2008-2012 to exceed US$37 billion, according to Gartner, Inc. The India mobile subscriber base is set to exceed 737 million connections by 2012 growing at a CAGR of 21 percent in the same period. This growth is poised to continue through the forecast period, and India is expected to remain the world’s second largest wireless market after China in terms of mobile connections.

“The growth in the mobile subscriber base is on the back of a rapidly proliferating rural market, lower handset costs, and low tariff rates in the Indian market,” said Madhusudan Gupta, senior research analyst at Gartner. “Rural telephony will continue to trigger growth and is expected to grow fourfold during the forecast period. Call rates have further dropped to about 1.5 cents per minute narrowing the gap with fixed-line rates. These factors along with an increasing competitive landscape will fuel market growth and encourage the adoption of wireless services in the rural and semi urban provinces of India.”

Cellular market penetration is projected to increase from 19.8 percent in 2007 to 60.7 percent in 2012. Gartner analysts said this growth could be primarily attributed to the increasing focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment, and lower handset prices. Vendors will continue to focus on sub-25$ handsets to capture market share.

The Indian mobile connection market continues to be dominated by prepaid subscribers. Prepaid connections accounted for more than 89 percent of all mobile connections in 2007 and are expected to grow to more than 92 percent of the connection base by 2012. The total services revenue for prepaid connections is expected to grow at 18.9 percent CAGR for the period 2008 - 2012 and the total services revenue for postpaid connections is expected to grow at 15 percent CAGR during the same forecast period. By 2012, the prepaid subscriber base will cross 683 million and postpaid subscriber base will exceed 53 million subscribers. The churn rate in India is 41.0 percent (2008), and despite a maturing market the ratio is expected to go up to 49 percent in 2012.

Revenues – Data revenues driving growth
The revenues from data services will significantly contribute to the growth of overall cellular services revenue in India, with a CAGR of 26.3 percent in the forecast period.

Prepaid subscribers are expected to adopt data services faster than the post-paid segment. Data revenues for the prepaid segment are projected to grow at 29 percent CAGR during the forecast period as compared to 22 percent CAGR for the post paid subscribers during the same period.

The bulk of the revenues will continue to come from voice revenues. However, with the increased growth in data services, the percentage of revenues coming from voice will reduce from 89 percent in 2007 to 85 percent in 2012.

Expected changes in the Indian Telecom landscape
According to Gartner, the industry will witness several changes in the coming year that could revolutionize the face of the telecom industry with the introduction of new technologies such as WiMAX, 3G and Mobile Number Portability (MNP). India will move to its next phase of evolution with the commercial launch of WiMAX by 1Q09 and 3G by 2Q09. With the introduction of MNP in 2008, churn rates are not expected to rise significantly, as India continues to be a prepaid dominated market.

“The Indian wireless market is a vibrant, price-sensitive and high-growth market,” Mr. Gupta said. “With 14 telecom service operators already present and another two set to join, the Indian telecom industry is expected to see some level of M&A activity in 2009. Given the high level of competition and anticipated consolidation, different business models will emerge that could push tariffs further down, with Indian mobile service consumers set to emerge as the biggest beneficiaries.”

Rural India will wrest 40 percent of new telecom market
India's rural telecom connectivity is poised for explosive growth in the next five to 10 years, grabbing a 40 percent share of the new market, a study released in July 08 said. "Of the estimated new 250 million Indian wireless users, in next 5-10 years approximately 100 million will be from rural areas," said the study by the Federation of Indian Chambers of Commerce and Industry (Ficci) and Ernst and Young.

The paper said operators have demonstrated they can achieve profitability by reducing fixed costs, controlling variable costs and carefully tailoring services to the requirements of their customers. A similar model with minor customization could be emulated in the rural areas, it said. The government will likely phase out the Access Deficit Charge (ADC) - a levy imposed on private players in rural areas - and roll out new incentives for mobile networks in rural India, the report said. Passive infrastructure sharing and spectrum hoarding cess on defaulter operators who fail to meet their roll-out obligations are illustrations of proactive government initiative, it observed.

"Erecting wireless telecom towers in India's tough rural terrain is still expensive and logistically challenging, reinforcing the desirability of sharing," the paper said. The paper also noted that the ultra-low cost handset of approximately Rs.840 ($20) to the market with built-in subsidies, lifetime validity and minimal maintenance costs have promoted mobile usage in remote areas. Moreover, operators could learn from business models that have been experimented across the developing world for expanding rural connectivity.

Source: Moneycontrol.com, Silicon India and IANS

China - The Insurance Giant in Asia-Pac

Authors: Nishith Srivastava & Akash Rakyan

China has been the fastest-growing nation for the past quarter of a century with an average annual GDP growth rate above 10%. Chinese economy is the 4th largest in the world after the US, Japan and Germany, with a nominal GDP of US$3.42 trillion (2007) when measured in exchange-rate terms.

China is the world’s largest untapped insurance market. With GDP growth of over 10% per annum, rapid economic development and a burgeoning consumer class, China has the potential to become one of the world’s most significant insurance markets. Driven by a variety of demographic, economic and regulatory factors, this growth should continue at a solid pace for the foreseeable future. As of late 2004, China was fully compliant with its WTO insurance-related accession provisions, giving foreign firms greater market access. While domestic players dominate the market, foreign insurers are gradually attaining greater market share. Challenges remain, however, and include an overall lack of management talent, unsophisticated consumers, poor distribution channels and non-transparent regulatory approval processes.

Several factors are responsible for this astounding level of growth. Some of the most noticeable ones are China’s aging population; high savings rate and poor social security systems as well as an increasing number of wealthy consumers segment that is spurring growth in the property and casualty, auto and health insurance sectors. Compared to its regional peers, the Chinese market is still substantially smaller than Japan and marginally smaller than South Korea. It is, however, the fastest-growing market in both absolute and relative terms, growing by $61.17 billion and 169.63% between 2002 and 2007. This rapid development of the Chinese insurance market is driven by economic growth, but premium growth has outstripped economic growth consistently over the past five years.

In 1996, total premium .i.e. life insurance and non-life insurance combined was $12.84 billion and in 2007, it was estimated to be $97.23 billion. Between 1996 and 2007, Chinese Insurance sector experienced a CAGR of approximately 20.21%. Between 1996 and 2000, life segment had an increase of $13.11 billion from $7.14 billion to $18.56 billion and between 2002 and 2007, an increase of $37.47 billion from $24.26 billion in 2002 to $61.73 billion. We forecast that life insurance premiums in 2011 will be $108.12 billion. In non-life segment, between 1996 and 2007, a growth of $29.80 billion was seen from $5.70 billion in 1996 and $35.50 billion in 2007. It is expected that non-life premiums in 2011 will be $64.37 billion.

Major Driving Factors
=> Variety of demographic, economic and regulatory factors
=> Demand from Commercial Property Segment
=> Increased risk awareness and demand for sophisticated products
=> Improved expertise of local insurers
=> Guarantee rate reform and many other....

Major Trends & Issues
=> Foreign entrants facing ownership restrictions with respect to joint ventures
=> Regulatory obstacles for foreign companies
=> Use of bank channels by insurance companies to reach out to consumers in non-urban areas.
=> Customer loyalty in China’s insurance market is very thin, and customers are easily poached.
=> The State Council having recently cleared the way for banks to invest in established insurance companies on a pilot basis
=> Focus from price competition has shifted to developing new products and expanding the overall size of the insurance market
=> Low penetration as a result of low customer awareness
=> Need of further capacity and expertise in specialist areas such as MAT, energy, liability insurance
=> And many other....

Emerging Areas
=> Longer-term foreign exchange life insurance policies
=> Cross-sector investment (e.g., investment in banks), and an expansion of investment classifications (asset-backed securities, property, industry funds, offshore markets, etc.) for insurers.
=> Development of a Stock Broker Market
=> Growth of domestic reinsurance capacity
=> And many other....

As per China Insurance Regulatory Commission (CIRC) as of June 30, 2006, there were around 100 insurance companies in China. Out of these 100 companies, there were 56 domestic insurance companies and 44 foreign insurance companies. Domestic insurance companies had a market share of approximately 93.3% and the remaining 6.7% was controlled by the foreign insurance companies. The entire market is quite fragmented and most of these 56 domestic insurance companies are region-centric and are strong in their respective markets. The largest foreign companies are AIU (a subsidiary of AIG), Tokio Marine, and Mitsui Somitomo. As new players have entered the market, competition has intensified significantly, as the existing players fight to maintain their market share.

Topics covered in the report
=> Trend analysis of Chinese economy & macroeconomic factors contributing to the growth of the sector
=> China’s position in the context of emerging countries
=> Historical growth trends & growth drivers of Insurance & its sub-sectors in China and outlook till 2011.
=> Market size of insurance sector (total, life & non-life) since 2000 till 2007
=> Market forecast of insurance sector (total, life & non-life) between 2007 and 2011
=> Government policies, initiatives, regulations and problems faced by foreign insurers
=> Key issues & challenges, major trends & opportunities
=> Role of stock brokers, banks, domestic reinsurance and bancassurance segments
=> Industry and markets with best prospects for insurance products
=> Government’s initiatives to promote & regulate the insurance market
=> Competitive landscape and market share of top players
=> And many more...


Table of Contents

METHODOLOGY & RESEARCH APPROACH

EXECUTIVE SUMMARY

1. CHINA
1.1. CHINESE ECONOMY
1.1.1. Macroeconomic trends
1.2. GOVERNMENT POLICIES
1.2.1. Three-Step Regional Development Strategy
1.2.2. The 11th Five-Year Program (2006-2010)
1.2.3. Development of Energy-Efficient Society

2. CHINESE INSURANCE SECTOR
2.1. MARKET OVERVIEW
2.1.1. Insurance Sector vs. Macro-Economic Factors
2.1.2. Market Constituents
2.2. MARKET PERFORMANCE & FORECAST (1996-2011)
2.2.1. Chinese Insurance Market
2.2.1.1. Chinese Life Insurance Market
2.2.1.2. Chinese Non-Life Insurance Market
2.3. TRENDS, ISSUES AND OPPORTUNITIES – AN ANALYSIS
2.3.1. Demand from Commercial Property Segment
2.3.2. Increasing Population and Prospective Buyers
2.3.3. Middle-men or Broker Market
2.3.4. Entry of Banks
2.3.5. Increasing risk awareness & demand for innovative products
2.3.6. Guarantee rate reform
2.3.7. Development of domestic reinsurance markets
2.3.8. Regulatory obstacles
2.3.9. Other major issues & trends
2.4. GOVERNMENT REGULATIONS
2.5. COMPETITIVE LANDSCAPE
2.5.1. Market Segmentation
2.5.1.1. Competition in Life Insurance Sector
2.5.1.2. Competition in Non-Life Insurance Sector
2.5.2. Driving Factors
2.5.3. Company Profiles
2.5.3.1. China Life Insurance Company Limited
2.5.3.2. China Pacific
2.5.3.3. Ping An
2.5.3.4. New China Life

Pages: 82; Format: PDF



List of Charts
Chart 1: China’s GDP Growth (1952-2005)
Chart 2: Macroeconomic Data & Factors
Chart 3: Total Premium Growth vs. GDP Growth (%) – 1996-2007e
Chart 4: Growth (%): Life vs. Non-Life vs. Total Premium vs. GDP (%) – 1996-2008f
Chart 5: Chinese Insurance Market: Segment Share
Chart 6: China Insurance Market Value ($billion): 2000-2007e
Chart 7: China Insurance Market Value Forecast ($ billion): 2008-2011f
Chart 8: Growth Trend of Life Insurance and Non-Life Insurance ($billion): 1996-2007e
Chart 9: GDP Growth vs. Total Premium Growth vs. Life Insurance Growth (%) – 1996-2007e
Chart 10: Life Insurance Market in China: 1996-2007e ($ billions)
Chart 11: Life Insurance Market in China: Forecast 2007-2011f ($billions)
Chart 12: GDP Growth vs. Total Premium Growth vs. Non-life Insurance Growth (%) – 1996-2008f
Chart 13: Sub-sector share of Non-life Insurance Market in China
Chart 14: Non-life Insurance Market in China: 1996-2007e ($ billions)
Chart 15: Non-life Insurance Market in China: Forecast 2007-2011f ($billions)
Chart 16: Market Share of Top 3 Domestic Life Insurance Companies
Chart 17: Market Share of Non-life Insurance Companies in China
Chart 18: Market Share of Reinsurers in China (2006)

List of Tables
Table 1: Macroeconomic Data & Factors
Table 2: Chinese GDP vs. US Dollar exchange vs. Inflation Index
Table 3: Total Premium Growth & GDP Growth (%) – 1996-2007e
Table 4: Growth (%): Life vs. Non-Life vs. Total Premium vs. GDP (%) – 1996-2008f
Table 5: China Insurance Market Value & Forecast ($ billion): 1996-2011f
Table 6: Growth Trend of Life Insurance and Non-Life Insurance ($billion): 1996-2007e
Table 7: GDP Growth vs. Total Premium Growth vs. Life Insurance Growth (%) – 1996-2007e
Table 8: Life Insurance Market in China: 1996-2007 ($ billions)
Table 9: Life Insurance Market in China: Forecast 2007-2011 ($billions)
Table 10: GDP Growth vs. Total Premium Growth vs. Non-life Insurance Growth (%) – 1996-2008f
Table 11: Non-life Insurance Market in China: 1996-2007e ($ billions)
Table 12: Non-life Insurance Market in China: Forecast 2007-2011f ($billions)
Table 13: Top Domestic and Foreign-Invested Life Insurance Firms in China
Table 14: Top Domestic and Foreign-Invested Non-Life Insurance Firms in China