Hidden but Real Competitors


By

D. Paramesvaran
S. Sivakumar
Scholar - MBA
Faculty of Management
EBET Group of Institutions
Kangayam-638108
 


Generally we people are not aware of hidden competitors. But, the hidden competitors play a vital role against the big giant. Who is this hidden competitor? What is the difference between real competitors and hidden competitors? Most probably people consider competitor means the manufacturers who produce the similar products. They are called as real competitors. But the giants face the problem of decrease in their profit due to other companies that are not into the production of the similar products. They are called as hidden competitors.

First case:

Do you think the competitor for NIKON is SONY & KODAK. If yes, it's wrong. The real competitor for NIKON is NOKIA. I know now you get confused. Because there is no product relationship with these companies. But NOKIA plays a vital role in decreasing the net profit of NIKON. Now the people are using camera mobiles from Nokia for taking photos.

Nokia started its operations in India during 1995, and presently operates out of offices in New Delhi, Mumbai, Kolkata, Jaipur, Lucknow, Chennai, Bangalore, Hyderabad, Pune and Ahmadabad. The Indian operations comprise of the handsets business; R&D facilities in Bangalore, Hyderabad and Mumbai; a manufacturing plant in Chennai and a Design Studio in Bangalore

Increasing profit decreasing trend of Nikon

 

Net sales

Income before
income taxes and
minority interests

Net income

Total assets

2004

¥3,467,853

552,116

343,344

3,587,021

2005

3,754,191

612,004

384,096

4,043,553

2006

4,156,759

719,143

455,325

4,521,915

2007

4,481,346

768,388

488,332

4,512,625

2008

¥4,094,161

481,147

309,148

3,969,934


Nokia present sales

EUR million

Q4/2009

Q4/2008

YoY Change

Q3/2009

QoQ Change

Europe

1 327

1 636

-18.9%

1 062

25.0%

Middle East & Africa

371

615

-39.7%

387

-4.1%

Greater China

425

409

3.9%

335

26.9%

Asia-Pacific

818

967

-15.4%

567

44.3%

North America

244

198

23.2%

127

92.1%

Latin America

440

513

-14.2%

282

56.0%

Total

3 625

4 338

-16.4%

2 760

31.3%


Second case:

Generally the HMV and SA RE GA MA are playing a main role in music business. HMV Group is an international entertainment retail chain and it is the largest of its kind in the United Kingdom and Canada. The company also operates stores in Ireland, Hong Kong and Singapore. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. Acquisitions by the HMV Group include Waterston's in 1998 from W H Smith, the music retailer Fopp in August 2007, and selected Zavvi retail outlets in February 2009.

Saregama India Limited (Incorporated on August 13, 1946 with the name of "The Gramophone Co. (India) Limited". The name of the Company was subsequently changed to "The Gramophone Co. of India Limited" and with effect from April 1, 1956, the word "Private" was added to its name. The Company was converted into a public Company on October 28, 1968 and consequently the name of the Company was changed to "The Gramophone Company of India Limited". Effective November 3, 2000, the name of the Company was changed from "The Gramophone Company of India Limited" to "Saregama India Limited" with a fresh Certificate of Incorporation issued by the Registrar of Companies, West Bengal).

We thought the HMV is a competitor for SA RE GA MA. But it is not the fact. The real competitor for those music businesses is Airtel caller tunes. We can hear the song around 30 seconds through caller tunes. And one more hidden competitor is Apple iPods. As a result the sales of mp3 CDs came down.  But now these companies are following some strategies to overcome their problems.

Financial summary 2008 of HMV

Total sales from continuing operations of £1,874.9m (up 11.3% on 2007), including like for like growth of 7.3% Profit before tax and exceptional items from continuing operations up 25.2% to £56.6m (2007: £45.2m) Exceptional profit after tax on disposal of HMV Japan of £51.8m Adjusted earnings per share from continuing operations of 10.1p (2007: 7.4p). Total basic earnings per share of 22.1p (2007: 4.0p) Net debt virtually eliminated at £0.2m (2007: £130.6m) Final dividend of 5.6p, making a total dividend of 7.4p (2007: 7.4p).

SAREGAMA REPORT AND FINANCIAL STATEMENTS. For the year ended31 march 2003

Reconciliation of operating (loss)/profit to net cash (outflow)/inflow from operating activities

Particulars

2003 £ 

2002   £

Operating loss

(253,566)

(815,624)

Depreciation charges

119,112

137,136

Impairment losses

-

50,578

Decrease in stocks

223,649

126,796

Decrease in debtors

58,685

827,197

Decrease in creditors

(163,206)

(504,858)

Profit on sale of fixed assets

(1,510)

-

Net cash inflow/(outflow) from operating activities

(16,836)

(178,775)


Cash Flow Statement of Bharati Airtel

Particulars 2

2007

2008E

2009E

2010E

Pre tax profits

46783.9

70015.3

97179.1

117067.6

Depreciation

26190.4

38085.8

45851.8

52004.5

Changes In WC

10386.7

18922.3

16223.5

10225.4

Tax

-4844.6

-9522.1

-13993.8

-17068.5

Others

6147.4

1707.3

-2735.0

-9122.8

Cash from operations

84663.7

119208.7

142525.6

153106.3

Capital Expenditure

-85035.2

-100000.0

-89500.0

-82500.0

Changes in Investments

1341.9

0.0

0.0

0.0

Others

268.7

. 0.0

. 0.0

. 0.0

Cash from Investment activities

-83424.7

-100000.0

-89500.0

-82500.0

Changes in share capital & Sec. premium

0.0

19.1

0.0

0.0

Change in debts

6293.3

-2000.0

-19999.9

-20000.1

Interest payments

-2561.3

-2749.8

-1543.0

-542.9

Div & Div Tax 0.0

0.0

0.0

0.0

0.0

Others

39.3

0.0

0.0

0.0

Cash from Finance

3771.3

-4730.7

-21542.9

-20543.0

Total cash generated

5010.4

14478.0

31482.7

50063.2

Cash at the beginning

3510.5

8520.9

22998.8

54481.6

Cash Balance

8520.9

22998.8

54481.6

104544.8


Third case:

We have three kinds of transports. Such as Land, Water, and Air.  In air transport the gigantic companies are Jet airways and Indian airlines. Jet Airways will be the most preferred domestic airline in India. It will be the automatic first choice carrier for the travelling public and set standards, which other competing airlines will seek to match. Jet Airways will achieve this pre-eminent position by offering a high quality of service and reliable, comfortable and efficient operations. Jet Airways will be an airline which is going to upgrade the concept of domestic airline travel - be a world class domestic airline. 

Air India is India's national flag carrier. Although air transport was born in India on February 18, 1911 when Henri Piquet, flying a Humber bi-plane, carried mail from Allahabad to Naini Junction, some six miles away, the scheduled services in India, in the real sense, began on October 15, 1932. It was on this day that J.R.D. Tata, the father of Civil Aviation in India and founder of Air India, took off from Drigh Road Airport, Karachi, in a tiny, light single-engine de Havilland Puss Moth on his flight to Mumbai (then known as Bombay) via Ahmadabad.

The air transports are high cost in nature. It is suitable to business people. But now the air transport also met some heavy losses due to their hidden competitors.

The main hidden competitors are the HP and CISCO. "HP is a technology company that operates in more than 170 countries around the world. We explore how technology and services can help people and companies address their problems and challenges, and realize their possibilities, aspirations and dreams. We apply new thinking and ideas to create more simple, valuable and trusted experiences with technology, continuously improving the way our customers live and work".

Now they launched a video conferencing facility. As a result the business people were avoiding the direct meeting with other business people. They simply sit in a room and talk with their business people. It leads to save the time and reduce the company expenses.

Balance sheet of Indian airlines

 

Mar ' 06

Mar ' 05

Mar ' 04

Mar ' 01

Mar ' 00

Sources of funds

Owner's fund

Equity share capital

107.14

107.14

107.14

105.19

105.19

Share application money

-

-

-

-

-

Preference share capital

-

-

-

-

-

Reserves & surplus

-440.80

-440.80

-506.19

-118.44

37.34

Loan funds

Secured loans

313.43

313.43

406.89

91.28

51.05

Unsecured loans

118.56

118.56

283.90

1,336.53

1,627.88

Total

98.33

98.33

291.74

1,414.57

1,821.47

Uses of funds

Fixed assets

Gross block

5,497.00

5,497.00

5,458.74

5,484.50

5,369.74

Less : revaluation reserve

-

-

-

-

-

Less : accumulated depreciation

3,931.82

3,931.82

3,665.83

2,933.60

2,660.38

Net block

1,565.18

1,565.18

1,792.91

2,550.89

2,709.36

Capital work-in-progress

12.62

12.62

3.69

5.35

13.55

Investments

112.40

112.40

66.35

2.36

2.36

Net current assets

Current assets, loans & advances

1,276.64

1,276.64

1,149.30

1,091.57

1,005.35

Less : current liabilities & provisions

2,868.51

2,868.51

2,720.51

2,235.61

1,909.16

Total net current assets

-1,591.87

-1,591.87

-1,571.21

-1,144.04

-903.81

Miscellaneous expenses not written

-

-

-

-

-

Total

98.33

98.33

291.74

1,414.57

1,821.47


HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Net revenue by segment and business unit

Net revenue:

2009    In millions

2008(2)    In millions

2007(2)  In millions

Infrastructure technology outsourcing

$ 15,751

$ 7,488

$ 4,671

Technology services

9,789

10,297

9,441

Application services

6,032

2,411

1,102

Business process outsourcing

2,941

723

115

Other

80039

97445

88957

Total HP consolidated net revenue

$114,552

$118,364

$104,286


Cisco

Net Product Sales by Theater

The following table presents the breakdown of net product sales by theater (in millions, except percentages):

Years Ended
Net product sales:

July 25, 2009

July 26, 2008

Variance
in Dollars

Variance
in Percent

United States and Canada
Percentage of net product sales

$14,866
51.0%

$16,965
51.2%

$(2,099)

(12.4)%

European Markets
Percentage of net product sales

6,579
22.6%

7,072
21.4%

493

(7.0)%

Emerging Markets
Percentage of net product sales

3,377
11.6%

4,083
12.3%

(706)

17.3%

Asia Pacific
Percentage of net product sales

3,191
11.0%

3,803
11.5%

(612)

16.1)%

Japan
Percentage of net product sales

1,118
3.8%

1,176
3.6%

(58)

(4.9)%

Total

$29,131

$33,099

$(3,968)

(12.0)%


Fourth case:

The films are the best entertainment for the people.  So the producers are ready to spend colossal amount for entertaining us. In north side two actors play a massive role there are Amithab Bachan and Sharukhan. In Tamil film industry Mr.Kamalahasan and Mr.Rajinikanth plays an enormous role. And these actors get a lump sum amount as their salary. The theatres too get huge collection during the release of their films. But now the theater owners also meet heavy losses due to their hidden competitors. Can you assume who will be the competitor for cinema industry? It is none other than Indian Premier League (IPL) matches! IPL- In late June 2007, two men met in an English house, not far from the rain-drenched Wimbledon Championships, to discuss a very different sporting event. Lalit Modi, Vice-President of the Board of Cricket Control for India brainstormed with Andrew Wild blood of the International Management Group (IMG), the sports management giants. In April 2008, the maiden IPL tournament that Mr. Modi had conceived and developed was underway. The Indian Premier League has moved to greater heights in its two early editions. And it is being noticed by the world. The IPL has even made it to the fourth spot of the Forbes list of the world's hottest sporting properties. The competition returns to India in March 2010 after its South African safari in 2009. The stage is set for a contest that is more compelling, spectacular and multi-faceted than ever before.

Yes you are right. There is no relationship between the IPL and Cine field. But some theatres had cut their evening shows because of the IPL matches. In erode some theatres are telecasting the IPL matches instead of films at evening time. See how we people were addict for the IPL. The duration of IPL events moved up to 90 days from 60 days. It has both merits and demerits. Definitely massive amount of people will get job due to the IPL matches (like Add agency, telecasting channel, and etc..,) .But think over the level of our domestic cricket (Ranji Trophy) if the IPL moves up to 90 days. 

Fifth case:

Generally we people are very lazy in nature. We need some devices to meet day-to-day activity. We depend on the alarm watches for waking up in the morning. During that period the Quartz who is manufacturing the watch played a massive role. But now the Quartz Company too met heavy losses on their business due to their hidden competitors. Yes the cell phone that has the alarm facility was standing behind this problem.  

Sixth case:

Now the magazines are published in internet through www.amazon.com and some other website. Generally it known as e-marketing. Amazon is using the kindle DX for publishing the magazine.

Amazon's Kindle DX, the bigger version of Kindle (9.7-inch electronic paper display) was introduced in India on January 19th. Kindle DX includes a native PDF reader, auto-rotate capability and storage for up to 3,500 books. Kindle DX utilizes the same 3G wireless technology as advanced cell phones, so you never need to hunt for a Wi-Fi hotspot (see here for supported GPRS coverage in India). Kindle DX downloads books, magazines, newspapers and personal documents to a crisp, high-resolution 9.7-inch electronic ink display that looks and reads like real paper (the device is just over 1/3rd of an inch).

Kindle DX with Global Wireless is available for pre-order starting today for $489 at www.amazon.com/kindledx and ships Jan. 19 Amazon Kindle was launched in India (priced at $400) on October of 2009 and media outlets like Hindustan Times have even gone ahead and launched the kindle version of the newspaper.

But now the kindle sales dropped due to the Apple iPods .In 2000, digital music players were either big and clunky or small and useless with equally terrible user interfaces. Apple saw the opportunity and announced the release of the iPod, their first portable music player on October 23, 2001.

At first, the reactions were confused and hostile; critics lambasted the $400 price tag, the unconventional scroll wheel and the lack of Windows compatibility. Despite all this, the iPod sold beyond everyone's expectations, went on to revolutionize the entire music industry, and the rest is history.

On October 23, 2001 Steve Jobs forever changed the course of media and entertainment distribution when he unveiled his creation, the Apple IPods. At iPod History, we're striving to be the number one destination for information on all iPod models ever.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS OF APPLE

(In millions, except share amounts)

ASSETS

Particulars

December 25,  2004

September 25, 2004

Current assets:

   

Cash and cash equivalents

$2,475

$2,969

Short-term investments

3,973

2,495

Accounts receivable

865

774

Inventories

156

101

Deferred tax assets

281

231

Other current assets

572

485

Total current assets

8,322

7,055

Property, plant, and equipment, net

735

707

Goodwill

80

80

Acquired intangible assets

16

17

Other assets

209

191

Total assets

$9,362

$8,050


On a lighter vein, who is the competitor for authors? Joke spewing machines? (Steve Wozniak, the co-founder of Apple, himself a pole, tagged a polish joke telling machine to a telephone much to the mirth of Silicon Valley). Or will the completion be story telling robots? Future is scary! The boss of an IT company once said something interesting about the animal called competition. He said "Have breakfast…or…be breakfast"! That sums it up neatly. 

References

www.iloveindia.com
www.indianmba.com
www.answers.com
www.wikipedia.com
www.nikon.com
www.hmv.com
www.apple.com
www.indianairlines.com
 


D. Paramesvaran
S. Sivakumar
Scholar - MBA
Faculty of Management
EBET Group of Institutions
Kangayam-638108
 

Source: E-mail August 26, 2010

 

           

 

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