Day-2

Before I start writing on the developments on the second day I would like to share this funny thing going on at IIMA. After the torturous 1st year the students are so exhausted that many of them have minimal motivation to put effort in the second year. There are certain subjects like Managerial communication, shodh yatra, International Business, etc etc where the requirements by the Prof is negligible. You can even read newspapers, play sudoku or chat in the class while these lectures are going on. The students call these subjects "Fraud Subject" and these subjects have the maximum demand. To opt for these subjects students have to fight and bid the points they have earned with so much difficulty in the first year (The formula for points is 200+ 20* 1st year CGPA). This is totally contradictory to what happens at AIM. We are forced to take the fraud subjects there when our favorite subjects are not available. This was the last thing I expected at IIMA but thats the truth.

Coming back to my experience on day 2 at IIM-A, I had only one lecture of CBBS. It was the final date to submit your group names and the company names for the field project as part of the course. Unfortunately I was not able to find a group and hence have started looking frenetically for one. The case for today was Southwest Airlines. I had already done the case at AIM so did not put much effort the previous night except for reading the case once. Southwest Airlines was the only airlines in US to post a profit in 1992 when all the other airlines were in red. This was due to its low operational cost and higher load factor. Southwest is a perfect example of blue ocean strategy where you decrease your costs and increase your differentiation however not much was discussed about the case as Prof. Rama Bijapurkar discussed strategy in the class. She discussed the definition of strategy and what do people mean when they say their companies strategy is x. We discussed three generic strategies by Michael Porter.

1.Cost Leadership

2.Differentiation

3.Focused.

I was tempted to speak about blue ocean strategy and how southwest adopted it, however as I had already spoken twice in the lecture I decided to keep the blue ocean card with me for the moment and not open it (I am sure I would get a better opportunity next time). Southwest changed the rules of the game when it decided it would create a new market for itself rather than competing with the big players in the airline industry. It concentrated on the consumers who used to drive cars for covering a distance in the range of 250-500 miles. The airfare offered by Southwest was half of the fares offered by the competition. In whatever market Southwest entered with its strategy it became a leader in no time while the other airlines had to stop their operations. After trying to compete for some time with southwest the competition gave up and started looking for new routes where Southwest did not operate.

I remember well that while discussing Blue Ocean at AIM some of my batch mates raised concern that even blue ocean can give a company an advantage for 5-10 years and then they would have to come up with some other strategy. However I totally disagree on this point. The examples of companies reaping benefits from Blue Ocean Strategy for almost 50 -60 years and still doing the same are Southwest, Walmart, IKEA to name a few. Thus what I understand is if you can differentiate your product from the competition, you can reap benefits till you can sustain your operations at a lower cost than the competition.

The Exchange Council has arranged a party for the ISEP students tonight and I would now get moving for that. Tomorrow is a Sunday and I don't have lectures on Monday and Tuesday so am also looking forward to enjoy some quality time at home.