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Business Leadership Forum – Day 2 (part 2)

RomeFollowing Nakamura-san at the Business Leadership Forum would not be easy but Sunil Bharti Mittal, CEO of Bharti TeleVentures Limited had quite an amazing story to tell. Bharti is India’s leading mobile operator and one of the top five companies in India. Revenue per month per person has shrunk from $30 to $8 and he believes it will go to $3-$4. The good news is that the number of users has gone from 2 million to 90 million. India is a huge consumption economy because there are so  many young people — 50% are under 25. He expects mobile phone users to grow from 90 million to 300+ million by 2009-2010 and his strategy to address the market has been to give away everything except the customer ; i.e. outsource everything except the customer relationship. IT was outsourced to IBM — a $1 billion contract. Networking was outsourced to Nokia & Ericsson. Call centers were outsourced to an IBM joint venture in India. Mr. Mittal said their growth (1 million new customers per month) could not be achieved without having outsourced to top partners. Complete alignment is achieved and the business model becomes predictable. Innovation in many areas including “Lifetime Validity” where incoming calls are free to customers for life. The theory is simple, if people receive a lot of free inbound calls, they will eventually *make* calls, which are not free. His goal is for his many partners to be happy — not to laugh but to smile. He hopes to grow from 7 billion minutes per month to 20 billion.
 
Mr. Yang Mingsheng, President and CEO of the Agricultural Bank of China, was the only speaker who did use English but the simultaneous translation to Japanese, French, Italian, Spanish, Russian, German, and English allowed all of us to hear what he had to say — which was a lot. The bank has 500,000 employees and 28,000 branch offices. Although I could not understand a word of what he was saying without the headphones, I could tell that the speaker was very articulate, enthusiastic, and confident. 95% of all bank services are available online. The bank has 400 million depositors, 12.4 million outstanding loans, and 220 million credit cards issued. They have introduced many e-banking and mobile products to their customers. This is being done by centralizing IT infrastructure. Mr. Mingsheng is both a ceo and a member of government. For hobbies he writes poetry and plays the violin. His speech covered every aspect of consumer and business banking services. I don’t think a similar presentation by Citigroup or JP Morgan Chase would much if anything that ABC isn’t also doing.
 
Pierluigi Bernasconi, CEO of an Italian electronics retailer called MediaMarket. The company is the No. 1 consumer electronics retailer in Europe with 66 stores in Italy, more than 500 stores in more than a dozen European countries, and a new web-based business in Germany. One of their stores is the largest in the world — it has six floors of consumer electronics products. Steady growth over the past decade has taken them from $4 to $16 billion. They have taken an innovative business model approach whereby they have two different store brands (MediaMarket and Saturn) that compete with each other. They believe that "self competition" results in better service and price to the consumer. Fifty million people per month spend time in one of their stores.  Mr. Bernasconi described an intensely competitive environment in Italy from 4,000 photography shops, 6,000 telephone stores, e-retail sites, hyperStores, and in the future new channels such as Digital Terrestrial TV.  In spite of this the company continuously outperforms the competition and gains market share. They have been using the web for sales and communications since 1995. Utilizing advanced IT the company has integrated all their distribution channels. They believe that communication is key and will result in customers thinking of MediaMarket or Saturn as the first choice as a place to get information and subsequently purchase. Their strategy is to exploit multi-channel strategies — tying together so a person can call from land line or mobile, surf via the web  connect via digital terrestrial set top box, or visit in person and all the experiences are recognized and tracked.


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