Fading Wings: PAN AM's Quiet Descent

           
    Imagine being the founding member of the International Air Transport Association (IATA), enjoying a near monopoly on international routes, the unofficial national carrier of the United States; that was Pan Am. Pan American World Airways founded in 1927 by two U.S Army Majors was the most famous principal and largest international air carrier. They were the unofficial overseas flag carrier of the United States for the most part of the 20th century. Once their slogan was "Live today, Tomorrow will cost more!". They were at the top of their field as the sky is not their limit. But now a few people know the name Pan Am. Now it's just one of the defunct companies that are being diminished from the minds of the public. Only bits and pieces of this "Conglomerate" exists today. The descent is due to a lot of internal and external factors, the Industry.

1. Financial Troubles

All companies experience tightness in their financials. But in this case, they expanded their fleet at a rate no one would imagine. And that made their pockets a little slim. The problem was time they expanded. Many other airlines came in for their own pound of customers and they were ready to sacrifice a little bit of profit for gaining (in this scenario stealing from Pan Am)customers. The expansion of fleets and routes set back a fortune and that put them in a tight spot making them not able to reduce the price. That only strained their financial resources.

2. Rising Debt

       They did accomplish a great expansion in fleet and route, but the question is at what cost? They alone couldn't handle such a large change. So they took some financial help from the available sources. Actually can't blame them, if the other emerging airlines haven't been so generous Pan Am could pull through out of that debt. This large debt took their ability to be financially stable like before.

3. Oil Price Shocks

      The infamous Oil Crisis in 1970 was a significant turning point in global energy dynamics, influencing policies, economies, and geopolitics for years to come. This shook Pan Am badly because their planes were craving the costly jet fuel. Blaming OAPEC (Organization of Arab Petroleum Exporting Countries) and their response to the political development in the Middle East was making no good. The overly-priced jet fuel made their financials thinner.

4. Terrorist Attacks

There was a terrorist bombing of Pan Am Flight 103 when it was over Lockerbie, Scotland in 1988. Already their financials were a mess and their goodwill was getting out of hand. And now this, being able to be like old times was just a normal daydream. For Pan Am the old saying is true; "When it Rains, it Pours". They wanted to fly but they were in deep water.

5. Deregulation of the Airline Industry

The policy of reduced cost and increased competition was due to the deregulation of the airline industry in the United States in the late 1970s and early 1980s. They were forced to jump from the frying pan into the fire. Crumbling down made them fight back, but they were of no use. While other airlines exploited the freedom, Pan Am was trying to hold what was left of their loyalty.

6. Failure to Adapt

Innovative competitors were taking their chance to adapt and be creative when Pan Am was just in denial. They struggled to adapt to changing market dynamics and customer preferences. They were pretty slow on that matter. Updating their services, implementing new technologies, and fleet modernization were not included in their agenda. It was kind of a loophole to overtake the near monopoly of Pan Am.

7. Sale of Assets

The airline was having a tough time and they couldn't handle the financial pressure and business stress. So they started to sell their valuable assets including their prized routes and the iconic Pan Am building in NewYork city. This desperate act made their value go downhill and revenue-generating capabilities to ashes. Delta Airlines saw the opportunity and acquired all the Pan Am's proud routes and shuttle service in a blink of an eye. They were not realizing they were digging their own graves. MetLife was more than happy in acquiring 'The Pan Am Tower' situated in New York. It kind of steals the public's attention because of its unique layout and center position. Johnson Control bid the most for the PAWS(Pan Am World Services).

8. Bankruptcy and Liquidations

After all this Pan Am doesn't had a snowball's chance in hell to be productive. They tried their best to secure their investments and restructure their operations, but they had to file for bankruptcy in 1991. Gradually their assets were seized and auctioned. Guilford Transportation Industries bought the company's name and imagery in 199. They changed the name to 'Pan Am Systems ' and adopted the globular logo.

All the above reasons such as financial challenges, external shocks, and other deregulation issues gradually made the deathbed of Pan American World Airways, putting an end to the era of the promising and prominent airline.

By

Rolwin Biju C

FALL OF GENERAL MOTORS IN INDIA

GM was founded on September 16,1908. They have outlets in world. After GM came to Indian market and suddenly quit from india due to low innovative technology and sales, poor business plan. GM's Chevrolet entered into India middle class sector easily they couldn't make much customer base, later their new models brands failed to strength in indian market.Innovation is a key factor for a company to complete in a challenging business world. The main reason for company fail in india is because of low innovative plans. The company don't give much importance to customers buying perspective mind. The fail to satisfy the needs of customers with the products they generated. The GM face  heavy business challenging of other Company and competite against them without innovative technology. The company in inda don't gave much importance to the risk associated with ideas of other organization business strategy. They fail to apdate in india market. It affect the GM financially very well. They decided to exit from indian market, many employees lost their jobs and sold their plant to others organizations too. The  best product sold through best strategy network.Because of all these reasons GM quit from india by the end of 2017. Companies need to understand the requirements of Indian customers and be a good decision makers.

Sreelakshmi R Menon 

Café Coffee Day: Corporate Failure

CAFÉ COFFEE DAY: CORPORATE FAILURE 

Cafe Coffee Day is a multinational coffee House sale that was headquarter in Bangalore. It was founded by VG Siddhartha. It had almost 550 outlets as of June 2021 . It had the offered to provide with customers a free space where are the customers could have a cup of coffee as well as enjoy an hour of internet freely. Compared to all other competitors of Cafe Coffee Day like Starbucks or any other brands, they were very cheap and the offered the internet free for an hour They had put forward the idea that "A lot can happen over coffee".

           Cafe coffee Day was a very debt centric company and it started with a depth of 1.5 crore to start its first outlet. It was a very depth oriented form and as of 2019 it had debt of 6547 cross and 1150 crore initial public offer. This firm did bring a very good amount of revenue ,that is rupees 4262 cross revenue as on March 2019 but even with all the revenue ,they only earned the profit of 143 cross and that was not sufficient to fill out the depth that they have taken for operating their business. It was a difficult road,but it when even down hill when the income tax raid happened and it was revealed that around 650 crores of accountant money . It led to the sea siezure of the shares of Cafe Coffee Day. To get over the issue of unmet debts,they also had other another subsidiary company Mindtree,which they try to sell but that idea was blocked by the Icome Tax department as they had not repaid the amount of tax. They even try to sell shares to Larsen and Toubro to fill out there 3200 crore debt but that idea also then go much forward. They also tried selling the other subsidiary that they are that is Tanglin Developments that were involved in selling tech parks , IT parks etc but that too failed .They even reached out to popular brand like coca cola for the sale of the shares but that also didn't work out.

          Also to add to the pressure, the CCD auditors said that they had not auditted 40 of the subsidies of CCD. The news spread to the Board of Directors and also the lenders. The lenders now refused to lend money to CCD. The shareholders insisted that the company buyback their shares and give them them amount that the shares were to pay. CCD face a lot of issues to fund for their activities as well as even to liquididate,as liquidation doesn't happen overnight and they were in need for a lot of money. This eventually lead to the suicide of their founder V G Sidhartha. And there after the prices of the shares of CCD when down drastically by 66.5%.

Niranjan 

THE FAILURE OF KINGFISHER AIRLINES

                                                

Disclaimer: this blog was written for educational purpose, the resource of the data in this blog was online journals.   

Kingfisher Airlines was India's one of the most highly profiled Airlines which was owned by biggest liquor tycoon of India. It was established in the year 2003; which is based in Bangalore. The parent company of kingfisher airlines was united breweries group. the air line started its commercial operations in 2005. the owner of kingfisher airlines (KFA) was Vijay Mallya and Sanjay Aggrawall was the CEO.

It was the first Indian airline to have (IFE) Inflight entertainment system on every seat even on domestic flights. The kingfisher airlines have a 360 degree promotion strategies in place. they reach out to its customers through all media of communication such as T.V, radio, newspaper, magazines etc...
kingfisher airlines achieved success by gaining customer satisfaction through offering grate, luxurious, and comfortable flying experience. according to the data shown in Wikipedia kingfisher airlines have a  revenue of 25,982.78 crore in 2012 and a net income of 8,765.9 crore in 2012. until December 2011, KFA was holding 2nd largest share in India's domestic air travel  market. after this time period it started to face extremal financial crisis. according to the annual report of KFA 2011-12 ; it shows reasonable doubts over the companies existence. it shows a loss around 690 crore were accumulated by the company. in order to keep the loss making business functioning, Vijay Mallya resorted to continuously borrowing money from banks. by 2012 KFA was declared as a NPA by SBI. At this point it even had failed to pay its employees which led to its pilots leaving it for better opportunities.
one of the important cause of the failure was the improper management; including poor financial planning, lack of focus on core operations. Vijay Mallya focused on luxuriousness rather than economic class.  at that time KFA merged with air decan and started Kingfisher red. it was a business strategic plan but it caused confusion in customers mind and it degraded the brand status and company lost it premium value. another scandal on the company kingfisher airlines was it held the service tax of passengers, PF, income tax of employees, but did not submitted to the PF or IT  authorities. 

after happening of all this events the company was bankrupted and (DGCA) Directorate General of Civil Aviation suspended the flying license of kingfisher airlines and ceased its operations on 20 th October 2012.

Despite the failure of king fisher of KFA , mallya remained as wealthy man. in 2016 a consortium of Indian banks declared mallya as a willful defaulter, alleging that he had diverted funds from kingfisher airlines to other companies in the UK.

The failure of Tata Docomo

Why did TATA Docomo fail? 

    Tata Docomo was a joint venture between Tata teleservices and a Japanese telecom company called NTT Docomo. Tata Docomo came into existence in 2008 and it has 2G and 3G services in India. The company provided several services for its customers and has received many business awards for its telecom services. But some serious factors affected its performance and led to the failure of Tata Docomo. In this study, the various reasons for the failure of the company are discussed.

Reasons for the failure of Tata Docomo

1.Competition from other telecom market players

Tata Docomo faced intense         competition from other telecom providers like Vodafone and Airtel, who had better infrastructure and more attractive services. It was difficult for the company to retain its customers and it failed to attract new customers.

2.Poor financial performance

The company failed to meet its standards and incurred huge losses. The competitors' low price offerings also reduced the margins for Tata Docomo.

3.Issues with partnership 

Because of the low market share and revenue, NTT decided to exit from the venture and it significantly affected the business.

4.Lack of technological innovations  

The company failed to upgrade itself from 3G to 4G and it also failed to upgrade its network coverage. So the customers switched to other service providers who provided more attractive offers and network coverage. So, the inability to adapt itself to the changing technologies caused customer dissatisfaction.

5.Cancellation of license

Three licenses of Tata teleservices were canceled by the supreme court and the court fined Tata teleservices for benefiting from the 2G telecom spectrum scam. 

These are the main reasons for the failure of Tata Docomo. 

             

Now all the Tata Docomo customers are merged with Airtel network, and the company has been taken over by Bharti Airtel.

-  ANJU PAULSON 

Cracking the Case: The Shocking Failures That Led to Yahoo's Ultimate Demise

 

"Faliure is only the end if you decide to stop"

Jerry Yang and David Filo Established " Yahoo "  in January 1994. As most of you are aware, Yahoo was once a powerful online Titan. How such a large internet company struggled to stay up with rivals in the technological sector and suffered a sharp downturn in the early 2000s is still a mystery. Below are a few crucial elements that contibuted to Yahoo experiencing a corporate failure.

1. The corporation was dealing with a number of internal problems and a frequently shifting top management . which opened the door for lack of concentration and inferior tatics.

2. Yahoo failed to develop and iprove their services since their technologies were outdated and inefficient.

3. Yahoo was unable to recognize global trends like Social networking an other mobile technology.

4. Due to frequent data breaches, customers began to lose faith in Yahoo.

5. When Google an Miscrosoft entered the market, there was intense competition for Yahoo, which forced it to compete for customers and advertisers.

 

6. Users opted for other customer-friendly interfaces because yahoo's was too much complex and unfriendly.

Verizon Communications purchased Yahoo's primary internet divison in 2016 for a very small fraction of what it was actually worth. this signaled yahoo's collapse and exposed it as a corporate failure.

Thankyou

- Ujwal Unnikrishnan

Punjab National Bank: LoU the key to the unfare

Punjab National Bank was started their operation on April 12 1895 in Lahore. PNB was one of the most largest public sector back in India .Nirav  Modi is the director of Punjab National Bank. In  2018 February we all are witnessed a big scam that happened in the PNB around 11400 crore transacted  through unauthorised and fraudulent manner.

           PNB scam is a case of financial fraud done by Nirav Modi with the assistance of senior PNB officials colluded with the bank by obtaining LoUs without submitting any securities. The impact of the scam is very huge. In February 14 the scam was determined after further investigation as its Mumbai's Brady branch. After detailed investigation found around of 100 LoUS (letter of Undertaken) issued without any collateral security. Later PNB became victim of the fraud and faced the problem amounting around 11400 crores.

          Punjab National Bank scam affected adversely on all  banking sector industry. Foreign investors lost their confidence and trust in the public sector banks due to this. The scam was occurred due to the poor management of bank and failure in  auditing. Auditors fail to detect any frauds that took place in PNB. After this the Government of India took many policies to  overcome such frauds that happening in the banking sector.

Article by

Tisha Shaji 

PLIGHT OF E PHARMACIES IN INDIA

INTRODUCTION

E Pharmacy sector have proliferated steadily in last few years, attracting significant attention and investments. During the pandemic period, E Pharmacies pegged at around $ 2.7 billion in 2021. The outbreak of Covid-19 elevated the performance of online pharmacy websites. The Indian online pharmacy sector was projected to grow at 63 percent annually from 2020 to 2025. Private equity and venture capitalists had invested more than $ 2.5 billion in online pharmacies.

   But contrary to the expectations, the consolidated losses of E pharmacies grew further and further. PharmEasy, the leader in this sector faced a loss of 4043.1 crores in FY22. It also withdrew its initial public offer draft papers in August 2022 almost an year after filing it.

REASONS FOR POOR PERFORMANCE OF E PHARMACIES

1)REGULATORY CHALLENGES:-

Most of the E Pharmacies in India were operating without licenses. They engaged in immeasurable unethical practices like selling medicines without doctor's prescription and selling of fake medicines. The drug abuse cases also shoot up during the span of last 5 years. Upon this allegations, Government of India strengthened the surveillance on online pharmacies.

> E Pharmacies are required compulsorily to take license to operate from Central Drugs Standard Control Organisation. (CDSCO)

>Online Pharmacies have to maintain detailed records of all transactions associated with purchase and sale of medicines.

>In september 2018, Delhi high court banned the sale of medicines via online. But later, this ban was revoked in December that year.

>In December 2019, Madras high court also imposed an interim ban upon online Pharmacies.

>In February this year, Drugs Controller General of India issued show cause notice to 20 E Pharmacy platforms for alleged contravention of laws.

2)INCREASED COMPETITION :-

As the sector was enjoying huge amount of profits along with a mountain of predicted profit, corporate giants like Reliance group and Tata group smelled the growth opportunity and entered into competition. While Reliance acquired major stakes in Netmeds, Tata invested their capital in 1mg. E commerce giants like Amazon and flipkart have their own pharmacy sections.

Howe'er, these arrivals had a negative impact on the profits of E pharmacy leaders during the period.

3)Retail Rivalry :-

The All India organisation of chemists and Druggists purported that E Pharmacies were burning capital to kill competition. As the margin given to offline stores by the National Pharmaceutical Authority is 10% for wholesalers and 20% to relailers, they are unable to compete with 25 % to 40% discounts offered by E Pharmacies. Because of this, there are huge amount of rivalry among the traditional traders of medicines all over the country. This is having a negative influence upon E Pharmacy sector.

CONCLUSION

Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. Accountability, transparency, fairness and responsibility are the four pillars of corporate social responsibility. By abiding corporate governance norms and conditions, E pharmacy sector in India can grow bigger and stronger in the future.

 According to Vijay Chawla- CEO of KPMG,

"The industry is growing nicely and eventually it will become profitable. E Pharmacies in India will see a Compounded growth of 20-30% over the next several years "

Let's hope for a highly profitable and socially responsible E pharmacies in India.

Article by

Stalwin Joju

Stalwin Komban

FAILURE OF NOKIA

Nokia was the world's largest vendor of mobile phones from 1998 to 2012.Nokia Corporation was established in 1865 with its headquarters in Espoo and Finland.It was one of the most dominant mobile phones in the world.The company launched first internet-enabled phone in 1998.

But,Nokia failed due to some of their poor decisions.There are internal and external factors that resulted in the failure of the company.The company struggled to cope up with the innovation,and this resulted in decline of its market share.

Poor marketing strategies was one of the reasons that led to their failure.Nokia decide to launch new products with different brand names that confused their customers.Nokia didn't adopt umbrella branding,which was adopted by Apple and Samsung.

Another reason was the deal with Microsoft.Microsoft acquired Nokia,the biggest blunder that wasn't fruitful.This partnership made Nokia dependent on Microsoft.

Lack of innovation in products significantly contributed to the brand failure.While brands like Apple and Samsung came up with advanced phones,Nokia launches phones with basic features.These dull features didn't help.Nokia didn't adopt the latest technologies.

There was a change in top management.In 2006, Jorma Ollila was replaced by Olli-Pekka Kallasvuo as CEO.The new management focused more on traditional phones rather than coping up with latest changes in technology.

The company also overestimated its brand value.They believed that people will purchase Nokia manufactured phones,if they used just better software.This was a wrong belief.

Nokia was a most recognized brand till 2007.But the things began to change with the entry of Apple and Google in 2007.Nokia's failure is the best example that tells us, even the most recognized brand may fail when they don't cope up with changing environment and watch their competitors.

Malavika VJ