Story of the Big Bull – Rakesh Jhunjhunwala

                                                           

Recently, we have witnessed the sudden demise of the King of Stock Market, Mr Rakesh Jhunjhunwala, due to a cardiac arrest. Today, we will read about how Mr Rakesh Jhunjhunwala made 41000 crores from just Rs5000.

Rakesh Jhunjhunwala was a well-known and wealthy Indian businessman who was an investor, trader, and owner of rare businesses. Rakesh Jhunjhunwala, often known as the "Warren Buffett of India," was India's most well-known and respected investor. He was the 53rd richest person in India today, according to Forbes.

Rakesh Jhunjhunwala was born on July 5, 1960, in Mumbai. His father was an active stock market investor, which affected him. The first time he thought about the stock market was when he asked his father about the reasons for stock price changes. His father said that the flow of news drives price fluctuations.

His story is filled with struggle, beginning with his attempts to increase the funds invested in the stock market. However, he could borrow money and achieve his first profit of $1 million, which he invested in Tata Power. This was his lightbulb moment. He understood that trading was his only way to profit from the stock market. He began trading stocks. His every move was making him richer. Rakesh Jhunjhunwala started with only Rs. 5,000, good investment capital in 1985. Mr Jhunjhunwala stated in one of his interviews that he had little funds to invest in the market. He had to work hard for everything. But the genuine concern was how he got the money to invest. He revealed that he obtained the funds through futures trading.

His strategy talks about being Knowledgeable, Having a great sense of Timing and having Patience.

Not everyone is knowledgeable enough to invest in good stocks and make money. “Markets are about money, but markets are also about knowledge. Markets are also about egos; markets are also about the satisfaction of having been proved right. Especially when that right is from an original thought and not from a guided source or following somebody,” said the big bull Mr Rakesh Jhunjhunwala. With correct and apt knowledge, anyone can make a fortune from the stock market

Timing is the most vital part of the stock market. Mr Rakesh Jhunjhunwala is a master at choosing the correct stock at the appropriate moment. He bought Tata Tea in 1986 for Rs 43 and sold it for Rs 143, making his first significant profit of Rs 0.5 million. This was evidence of his impeccable timing.

And it’s not like he never experienced any downfall in his stock trading journey. In December 2011, the stock market king experienced a 30-year stock market decline. He could have quickly sold his stock under the influence, but his qualities of being patient and believing in his judgment got him far. His patience paid off, and he recovered all his losses in February 2012.

He founded Rakesh Jhunjhunwala Rare Enterprises, an asset management organisation through which he manages his personal portfolio. Rare is the first letter of Rakesh Jhunjhunwala and Rekha Jhunjhunwala. In 2002-2003, he purchased Titan Company shares at an average price of 4.5 rupees per share. Titan stock rose to 80 rupees before falling to 30 rupees after some time. As a result, the value of Rakesh Jhunjhunwala's portfolio fell by nearly 300 crores, yet he did not sell a single share at the price of rupees 30. Because he knew Titan would undoubtedly grow.

Titan shares are currently worth roughly 2000 rupees. In the stock marketing sector, an investor must be patient, and we saw this quality in Rakesh Jhunjhunwala.

Recognizing that stock market trading is a dangerous endeavour, Mr Rakesh Jhunjhunwala was quite aware of this. At times in his life, he struggled to get a sizable income from the market. However, he was aware that if the market rises or moves from a low valuation to an uptrend if we invest appropriately, we are guaranteed to make money. And by doing so earlier than once, he has demonstrated it. Act while an opportunity exists, as the proverb says. Rakesh J will begin pyramiding there if the share is in an uptrend, the momentum is also up trending, and you receive a buy signal for a second time.

 

 

Ansh Sharma

A goal-oriented person with interest in financial modelling and trading.

                                                         
 

YOU'RE BEING NUDGED!!!

 

Have you ever purchased a large popcorn in a movie theatre, even though you knew you'd never be able to finish it, despite the fact that it was only slightly more expensive than a medium-sized popcorn? When was the last time you un-clicked the option to not make a voluntary donation for an online booking service(yes, Bookmyshow!!!) that charged you for its CSR initiative? Did you know that Netflix's 'play the next episode' option right after an episode's end is designed to encourage you to binge even if you aren't interested in watching the next episode? Yes, you are being constantly nudged and experts believe nudging is the new normal in modern advertising and marketing products among hyper-lazy, no motivation to decide customers.

In behavioural sciences, Nudge theory promotes positive reinforcement and indirect suggestions as techniques to affect the behaviour and decision-making of groups or people.For instance, Placing chocolates near the billing counter in a supermarket is the simplest and most common nudge in practice. Inversely, Sludging is anything in a process, the term is often used interchangeably with nudging , that hinders users. For instance, a simple board of ‘do not waste food’ with photos of malnourished kids near the mess dustbin makes one think twice before wasting food. (Or) When there is an additional cost for plastic bags at stores, you’re less likely to purchase one, thereby reducing plastic consumption.

Nudge Marketing

Nudge marketing is the process of sending marketing communications that appeal to an individual's psychology in order to urge desired behaviour. In simple words, marketing in such a way, the customer makes the decision making process heuristic. A heuristic is a mental shortcut that helps people solve issues and make decisions more quickly. The rule-of-thumb tactics reduce decision-making time and enable people to perform without continually pausing to consider their next move. The most important aspect of nudge marketing is to ensure that the nudging remains unknown to the customers. Higher the incognito better the customer stimulus to the nudge. shhh!!!

Amazon.in, The most preferred online shopping website of India is a typical example how nudging looks simple but a more lucrative way of business augmentation. Amazon.in remembering your card details might not look like a big deal, but If you had to remember your card details after 12 while mindlessly scrolling through Amazon's virtual store, you may be a lot less likely to purchase whatever splurge items you added to your basket. This is called convenience nudging. Urgency nudge can be badges, pop-ups or notifications that urges customers to buy earlier. Limited time deal or Deal of the day offer is a simple nudge to push customers to buy by creating a mirage of the desirables going out of stock soon. Similarly, Specifying the number of stocks left is yet another method of urgency nudging. Amazon basics and amazon’s choice is a form of Reassurance nudging.

The most efficacious and way out in front nudging used by Amazon.in-Amazon prime services pushed from two ends. Customers who wanted amazon prime video were enticed with prime delivery benefits, while those who wanted prime video services were lured with prime video services, resulting in a large client base for one of the India's biggest OTTs .

How to begin Nudge marketing in a business

Have you ever wondered why Internet Explorer(to be retired in June 2022) is still in use when there are so many more advanced internet search engines? How often have you visited a restaurant and ordered the same food without even looking at the menu? How many times did you remove voluntary donation(Bookasmile!!!) while booking your online ticket from a ticket booking website? These are simple instances of the power of default in action. The power of default explains the tendency for an agent to generally accept the default option in a strategic interaction. Thus, whenever an offering is set in default likelihood of it being selected is high. At the same time, It is imperative to keep the default mode to require less effort and with more incremental benefits.

The primary step of any nudge marketing is to nudge this power of default. The task of nudging should be done so as to leverage the power of default by driving it to the most efficient and lucrative end of the business.For instance setting the price of medium sized popcorn close to large popcorn(The decoy effect), assuming the medium sized popcorn as most preferred default option, is a simple nudge on default power.

Nudge wisely

In modern businesses, nudging is used both for positive and negative outcomes. For instance under the Zerodha’s Nudge feature investors are warned when they're about to break basic trading rules such as trading in risky illiquid instruments and penny stocks. While at the same time many social media sites and OTTs nudge using unethical means just to increase the indulgence and screen time. In many countries, Nudging technique with the power of default have lead to increased organ donations. The same technique can be used to accomplish our personal goals independent of the size of the goal. Thus, Nudging is the future of advertisements and modern marketing and it is crucial to practice nudging in an ethical as well as lucrative form.

ABOUT THE WRITER

B J K RAJKUMAR

Pursuing PGDM at IMT-H

A constantly evolving person interested in Global politics and debating.

Surviving Digital Disruption – A Blessing in Disguise

In 1997, VHS tapes and DVDs were disrupted by the advent of Netflix. Some years later, smartphones killed the usage of landlines and payphones together. In developed economies, vending machines have bid farewell to the small-store sector, and online delivery is close to shutting down restaurants as well. No matter where we look, digital and technological disruption seems inevitable. With disruption knocking on the doors of every industry, how do businesses make sure that they aren’t the ones going extinct when the time comes?

Is digital disruption something a business should fear? Not always. In this blog, we will explore how digital disruption led some businesses to actually perform better.

How can a business deal with Digital Disruption?

When a business is assessing the risk of digital disruption to its operations, a business can be faced with problem statements like the following – 

1. Apart from keeping track of all technological advancements in their industry, each business needs to ensure they are prepared to transition to a phase beyond the disruption. Does the company have enough money, workforce and the infrastructure to carry out the transition? 

2. If a disruption has begun, where do your peers stand with it? Have some businesses already begun adapting? If yes, then how are they dealing with it? Is there an opportunity to learn from them?

Gartner has devised an action model that presents companies with six choices on how they can approach digital disruption – 

1. Analyze the competitor’s actions;

2. Attack the disruption;

3. Alternative market opportunities can be pursued;

4. Ally with businesses handling the disruption;

5. Acquire the businesses with the tools to handle the disruption;

6. Avoid the disruption altogether.

In this article, we will explore some of these choices applied in real life businesses.

Alternatives and Avoidance

While digital disruption swept over the camera industry, digital cameras and video cameras were left behind by smartphones with cameras. So much so that as of 2019,  an iPhone 11’s camera quality was considered scarily close to that of a DSLR camera. However, one type of camera survived this disruption and evolved to become a status symbol – the polaroid camera.

The world’s first polaroid camera came from a company of the same name in 1937. While it controlled the instant camera market in the 70s, digital photography disrupted its success, until 2017, when a change of ownership led to a rebranding of the company.

Today, polaroid cameras are considered to be an icon of the vintage aesthetic. By staying true to its identity, and using its rich history to create an aura of nostalgia around its products, Polaroid did what many companies couldn’t – it pursued an alternative direction in the business and survived disruption, mostly on the power of the nostalgia it gives to people.

In comparison, Blockbuster video, which was toppled over by Netflix and online streaming, has only one store today in Oregon, USA, that too, which is often let out as an AirBnB. Could the right play on revisiting the past have helped Blockbuster video survive? Not necessarily. Blockbuster completely avoided the disruption and got defeated by its inevitability.

Polaroid survives on nostalgia, but it also survives on technology that is just as relevant and advanced today as it was when it came out in 1937. However, Blockbuster sold VHS tapes and DVDs, the technology for which was also disrupted by digital streaming and smart TVs. Thus, it is essential to remember that digital disruption cannot be survived if its technical support goes extinct.

Analyzing the markets for inevitable disruptions

Since the onset of the global pandemic in 2020, the education industry has had to undergo one of the fastest offline-to-online transitions. It’s safe to say that schools and colleges have survived because of the digital disruptions in their industry – if it wasn’t for platforms like Microsoft Teams and Zoom, there would be no way to teach students as long as the pandemic was in its strongest tides. 

Zoom, a platform founded in 2011, reached the zenith of its success at a time when not many businesses were doing so well – By February 2020, Zoom had gained 2.22 million users in 2020 – more users than it had gained in the entirety of 2019.

However, how long can online classes survive without the holistic aspect of being taught face-to-face by a teacher, in a class full of students? Is work-from-home much better than working in a physical office? The debate of virtual vs physical is what a business needs to carry out to understand if digital disruption will do any good to them. The better such platforms analyze their space, the more opportunities they will find to get the best out of whatever disruptions come their way.

Conclusion: Changing perspectives on Digital Disruption

There are many stories of failure due to disruption, but there are as many successes as well. A business’s approach and strategy towards digital disruption will matter for it in the long term. It is essential for businesses to make the best possible choice instead of completely avoiding the possibility of any disruption – to analyze and approach every possible choice and come out of a disruption as a better and stronger firm.

About the Author

  

Simaran Sinha

An avid reader with an interest in business research, personal finance and investing.

The Secret of Starbucks's Success

 

The word “Starbucks” flashes across anyone’s mind, even for a moment when we think of coffee. Though there are many coffee chains, Starbucks is the only one that has transformed the way we experience coffee. It is an American company that started in 1971. But in 1987, it was acquired by Howard Schultz, and it was under his tutelage that it was raised to become a colossal coffee chain. Starting with a single coffee shop, the company has a fleet of 32,000 stores today. It has become a premium coffee brand giving the enriching experience of coffee. But how was Starbucks able to achieve this feat? There are many successful coffee chains, but what keeps Starbucks outperforming all of them. It employed some tactics that we will see one by one.

First and foremost, the baristas (the person serving in the coffee bar) were provided with extensive training in hospitality. The baristas developed such a level of connection with the customers that they used to remember the customers’ names and their coffee preferences. And in some instances, this connection became so wonderful that Starbucks Baristas used to get invited to their customer’s weddings. This was the deep-rooted connection that Starbucks was built upon. And this was the reason why people love to visit the store, not with the intent to visit a coffee shop, but to a place next to home.

Secondly, they focused on mass customization wherein they provided personalized food experiences to their customers. The barista takes special instructions given by the customer to ensure the order is specially made according to the customer’s liking. In case the customer is dissatisfied with the order, Starbucks remakes it to give customers a pleasurable experience.

Third, they focused intensely on Sensory Marketing to attract customers to its stores. For instance- they make sure that the aroma of the coffee is strong enough to elicit a sensory reaction from its customers. For that purpose, they even stopped serving breakfast with eggs because it would interfere with the fresh smell of coffee. Also, the music they play in the store is very carefully selected to create the “Starbucks experience.” The songs played in the store are sent directly to each location from the company central location. And the layout of the café is structured in such a way that the customer can see the entire process of brewing the coffee, giving an aesthetically appealing experience.

Also, they are following a little weird marketing tactic in which they deliberately write the wrong spelling of your name on the coffee mug. The customer, upon seeing this, will post it on social media and will indirectly expose the brand among its followers. There is a hashtag trending #StarbucksNameFail having more than 30,000 posts on Instagram. Even if we assume that each of these people has around 100 followers, we can say that about 3 million people were exposed to the brand for free.

Though these are some of the measures they followed to attract customers to their stores, the most important of them is “HUMAN TOUCH.” It is their core philosophy. They have created their brand image not as a coffee-company serving people but as a people company serving coffee. And herein lies the significant difference, because in coffee-company serving people, your priority is coffee but in people-company serving coffee, your priority is people, and coffee becomes a mere instrument of your service. They have also taken many community initiatives like hiring military veterans and widows. Using reusable cups made of recyclable materials. During the recession, when companies were saving every penny, Starbucks spent around 30 $ to help the people of New Orleans who were devasted by the flood. About 10,000 Starbucks employees spend 50,000 hours to revive the flood-ravaged city. While most corporations find loopholes to escape government regulation, Starbucks was spending millions of dollars to go beyond government regulation both for the environment and the people it serves.

It is easy to be a huge brand but very difficult to be a memorable brand. In this world of digital communication, where the power of human touch and compassion are often undervalued, Starbucks has practiced and embraced it in the right way and has become a memorable experience for its customers.

About the Author

Praveen Kumar

Pursuing PGDM (Finance) at IMT Hyderabad

Interests in Automobiles, Politics

MENSA BRANDS: HOUSE OF BRANDS

 

Any seller would like to promote his products to increase his sales. However, the seller/manufacturer will have to establish and contact his network of people to sell the product to increase sales. What if you can sell his products to your friends, family or social groups and charge a certain mark-up over and above the selling price stated by the seller? Meesho is one such platform where the sellers display their products, and individuals can post these products on social media platforms to sell them to their known people. Once the order is confirmed, the logistics are managed by Meesho. This way, the seller earns his share of money and saves money on logistics, the reseller or the middleman earns his mark-up on the product, and Meesho earns a commission from the seller, creating a win-win situation for everyone.

Every business strategy starts with an idea. Similarly, Meesho was started with the idea that revolutionized the buying and selling on social media platforms, paving its way for social commerce in India. The founders of Meesho- Vidit Aatrey and Sanjeev Barnwal came across a local shopkeeper in Koramangala, Karnataka, who frequently uploaded pictures of his products on WhatsApp and Facebook and customers placed orders through these platforms that contributed to the revenue for that local shopkeeper. Vidit and Sanjeev were intrigued with this unique and simple idea that is now ruling the online reselling business with its robust business model. Meesho is gaining more popularity in Tier 2,3&4 cities, with more women using this app to generate revenue. Meesho also successfully took steps to empower women to build their own identity and use Meesho as a source of income. It is apparent that data and the internet are a constraint in rural areas and people in these areas use older versions of android mobile phones. After understanding the problems local shopkeepers and shoppers face, the Meesho app is built at a mere 14.5MB, making it the lightest e-commerce app in India on Google Play Store. This helped optimize the e-commerce experience in Tier 2 and 3 cities by giving unparalleled user experience to its app users and is available in 7 different languages.

You must have understood from the Meesho story that every business is only an idea away. Moreover, in my opinion, it is easy to grow a business if it is for the benefit of society as no business can exist in silos. So, let us all get started with building our empire of dreams which is only an idea away.

In the era of startups where most startups are at a loss and are a billion-dollar company, Mensa brands are one startup that is not only a billion-dollar company in less than six months but also profitable in the market. So, you all will be thinking about what such Mensa brands have done such that they have become the fastest-growing startup in Indian history. So, .it all started when the founder of Mensa brands, Ananth Narayanan, saw an opportunity in the small and medium scale business where they had good products but did not have enough capital, good technology, and supply chain management.

Mensa brands strategy:

So basically, Mensa brands follow the Thrasio model. This name became famous because of the meteoric rise of an American startup called Thrasio. Thrasio is a company founded in 2018, and within just two years, it hit a billion dollars valuation to become one of the fastest-growing unicorns in the world. So, you all will be thinking about how the Thrasio business model works? Thrasio looks for a small-scale entrepreneur who manages everything from marketing, listing, manufacturing, packaging, and even shipping. This is both highly tedious and costly, and especially when they are selling online on a platform like Amazon where there is cutthroat competition, it becomes challenging for small-scale brands to bring new products and scale their brands, therefore despite having a great product, these small-scale entrepreneurs reach a saturation point. And if they want to grow any further, they either must take hefty loans or, worst-case, they must take personal debt. This saturation of growth is where Thrasio comes in, where they bring both credibility and insight on how to grow these small skill brands, and using their credibility, they raised a million dollars in funding and started offering an exit strategy to these great entrepreneurs.

Once this business is acquired by Thrasio, the company uses its scale capital and expertise to grow the operations further. The same approach has been applied by Mensa brands where they offer a good brand story to the existing product, better copywriting to the product, taking good pictures of the product by hiring high skilled photographers and videographers, better digital marketing strategy to a product where they would not only be selling on a particular platform like amazon and Flipkart but also increasing its reach by promoting on Facebook, Instagram and other social media applications. Because of having good funding from the investors, the Mensa brands can do celebrity endorsement also, which again leads to more brand value and increase its visibility in the market. Lastly, the Mensa brands built an extensive supply chain to get the product into retail shelves like Dmart, jiomart, and other super Mart. We can see the result of Mensa brands expertise where they have acquired twelve consumer brands like VILLAIN and Karigari, and in October 2021, these brands seem to have hit a growth of 250 percent and 140 percent, respectively. But there's a slight difference between how Thrasio and Mensa work while Thrasio gives a founder 100 percent exit; Mensa brands keep the founders in the business but with just a significant stake in the company and intend to acquire these brands gradually in the next five years fully. After that, just like Thrasio, Mensa brands use their digital marketing specialisation, sales channel, and supply chain management expertise to scale these brands both domestically and internationally. This is how in the past six months, through technology and digital marketing, Mensa has been able to grow their brands at a staggering rate of 100 percent. In my opinion Considering the rise of Mensa brands has increased the opportunity for small-scale business entrepreneurs, and they are not making brands just for India but for the whole world.

ABOUT THE WRITER

Vinit Prasad

Pursuing PGDM at IMT Hyderabad

A keen observer, love to read geopolitics and investment strategies.

MEESHO- A MESSIAH FOR THE UNTAPPED RURAL MARKET

E-commerce has been rising significantly in India with the increasing reliability of India's population on the internet. Social media platforms are one of the most common uses of the internet, and not surprisingly, 70% of India's population are active social media users. It will be interesting to infer that where there are people, there is business. With a significant number of people spending their time on Facebook, WhatsApp, Instagram, and other social media platforms, the buying and selling also started via these platforms leading to the rise in "social commerce." Social commerce can be considered a subset of e-commerce and growing social media interaction is helping social commerce grow by leaps and bounds. Indian startups have also recognized the business opportunity behind social media platforms and used them to generate revenue. Companies like Meesho and DealShare are a few of India's promising names for social commerce.

Since the pandemic outbreak, individuals have started relying on social media platforms to earn money, and online reselling is one of the trending ways to make money with zero investment. Even before the pandemic, Meesho, an online reselling social commerce platform, identified the potential of reselling business. The idea of an online reselling business is straightforward- any individual can resell their products by posting them on social media websites and selling them to their friends and family or their known community. Most importantly, a reseller business includes a third party between the buyer and seller who sell the products at a mark-up price. Now you may be wondering how Meesho facilitates this reselling and what exactly is its business model?

Meesho’s Business Model:

Any seller would like to promote his products to increase his sales. However, the seller/manufacturer will have to establish and contact his network of people to sell the product to increase sales. What if you can sell his products to your friends, family or social groups and charge a certain mark-up over and above the selling price stated by the seller? Meesho is one such platform where the sellers display their products, and individuals can post these products on social media platforms to sell them to their known people. Once the order is confirmed, the logistics are managed by Meesho. This way, the seller earns his share of money and saves money on logistics, the reseller or the middleman earns his mark-up on the product, and Meesho earns a commission from the seller, creating a win-win situation for everyone.

Every business strategy starts with an idea. Similarly, Meesho was started with the idea that revolutionized the buying and selling on social media platforms, paving its way for social commerce in India. The founders of Meesho- Vidit Aatrey and Sanjeev Barnwal came across a local shopkeeper in Koramangala, Karnataka, who frequently uploaded pictures of his products on WhatsApp and Facebook and customers placed orders through these platforms that contributed to the revenue for that local shopkeeper. Vidit and Sanjeev were intrigued with this unique and simple idea that is now ruling the online reselling business with its robust business model. Meesho is gaining more popularity in Tier 2,3&4 cities, with more women using this app to generate revenue. Meesho also successfully took steps to empower women to build their own identity and use Meesho as a source of income. It is apparent that data and the internet are a constraint in rural areas and people in these areas use older versions of android mobile phones. After understanding the problems local shopkeepers and shoppers face, the Meesho app is built at a mere 14.5MB, making it the lightest e-commerce app in India on Google Play Store. This helped optimize the e-commerce experience in Tier 2 and 3 cities by giving unparalleled user experience to its app users and is available in 7 different languages.

You must have understood from the Meesho story that every business is only an idea away. Moreover, in my opinion, it is easy to grow a business if it is for the benefit of society as no business can exist in silos. So, let us all get started with building our empire of dreams which is only an idea away.

ABOUT THE WRITER

Sanjana Nahata

Pursuing PGDM at IMT Hyderabad

An ambitious and result-oriented person, keen on self-learning finance and financial management.