Dear Aspirants,

The Public Relations Cell would like to extend its heartiest congratulations to all
of you for making it to this stage of the Admission Process.

To help you prepare for the next part of the journey, the Students of IIM Shillong
have come together to present the Preparation Kit 2024. It consists of domain-
specific information and tips to ace your Personal Interview.

We wish you the best of luck with your interviews and future endeavours.

You can follow us at:

Instagram: https://www.instagram.com/iimshillong/
LinkedIn: https://www.linkedin.com/school/indian-institute-of-management-
shillong/

For any queries, you can reach out to us at:

PagalGuy: https://www.pagalguy.com/t/2024-2026-official-iim-shillong-pgp-
admission-queries/4163893

Regards,
Public Relations Cell
IIM Shillong

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 Table of Contents
Interview Basics
How to prepare for the interview 4
Topics in news 10

Domain Specific Material

Finance 12
Marketing 35
Economics 55
Human Resources 66
Analytics 80
Operations 96
Consulting 116

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 How to
prepare for
the Interview?
What is a personal Interview?
A personal interview is essentially a way for the institution to find out who you are as a person.
It allows them to identify your communication skills, confidence, and composure when you are
under pressure, which is what a management school is all about!

It goes beyond what's in your resume and your past academic records and digs deep into your
analytical skills, your general awareness, and how quickly you can think on your feet. The
interviewers carefully analyze all these metrics and more, and then you're assessed on
whether you fit into their institution.
It is imperative to cover the most critical aspects of a personal interview-
• Personality-based questions
• Work experience
• General Awareness
• Academics
• Extra-curricular Activities

Other than these "Must-Do's," one should be calm and be prepared for anything the
interviewer throws at them. They do not expect you to know everything under the sun but will
assess you on your positive attitude and your ability to handle an uncertain situation when it
arises. Remember, the institution is looking for future leaders, and hence these situations and
how you manage them might be the differentiating factor when it comes to the final selection.

The 5 'MUST DO's' for the Personal Interview:

1. Personality-based Questions:
Questions in this section check whether your values and motivations align with the institute’s
vision. These questions are subjective, and there is no right or wrong answer. What is
important is how well you can frame these answers and build them into a story.

This section will major cover the following areas:

• Strengths: Try and give examples from your life or quote instances where you
exhibited these strengths and how they have helped you.
• Weaknesses: Do not try to make up any ‘smart’ weaknesses and also avoid points
that paint you in an extreme negative picture. Ensure to add what you are doing to
overcome your weaknesses.

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 • Family Background: Try highlighting if there is anything that could catch interviewer’s
interest and help you drive the interview. If you come from a business family, be
thorough about the nature and size of business, target customers, challenges faced,
etc. Be prepared to answer as to why you are not joining the business immediately. If
you come from a non-business family, have some contextual knowledge about the
profession of your family members.
• Achievements: This can include scholastic, co-curricular and extracurricular awards
or positions that you have obtained. If you wish to highlight anything personal as your
achievement, make sure to include the context that makes it an achievement. Use the
STAR approach to explain briefly.

Lastly and most importantly, the WHY MBA question. It showcases that you have clarity of
thought about where you stand right now and where you want to reach. Remember that MBA
is the ‘means to an end’ and not the end itself. Interviewers want to see how committed you
are to your goal and how will MBA help you reach there. Be prepared with alternative career
plans in case there is a follow up question on ‘what if you are not selected?’. Try to weave a
story around the skills you already have and how MBA will add/aid towards the end goal.

Also try having contextual knowledge about your undergrad college, the city you come from,
your hobbies and interests, etc. You will have to find the right balance between the answer
sounding mechanical (prepared and rehearsed too many times) or made up on the spot.

2. Academics
This is an essential aspect of your preparation. It will showcase your ability to absorb and
understand concepts from your previous education and how you have applied them in your
professional career (for people with work experience). This section becomes even more critical
for freshers as you've just come out of college and are expected to know the important
concepts. The institution does not expect you to remember everything from your course but
will question you on the basics.
Also, you and the interviewer might have had the same educational background; in this case,
the interviewer might even go into some depth about the subject. The critical thing is to remain
calm and think before you answer. The 10-second rule applies massively in interviews. Also,
it is okay to say NO and accept that you do not know the answer. The interviewers are
experienced enough to know if you are lying. It also shows your honesty and willingness to
learn.

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Pro tip: Have an answer prepared for 'which is/are your most/least favourite subjects from
undergrad or postgrad and why?' Make sure you also have good knowledge and conceptual
understanding of your favourite subjects.

3. Work Experience
For those with work experience, questions will be about your profile and your role in the team.
It is advised to know about your employer, the important financial figures (revenue for the year,
Profit, etc.), current market scenario of the industry, the competitors, and significant new
developments and trends in the industry. You should be prepared about your major learnings
both technical (software, systems, applications, industry expertise) and behavioural
(leadership, time management, problem solving, client facing). You can be asked why you are
not continuing in your current job (this can be aligned with your why MBA answer).
You might also be given situational questions like how you solved a crisis at your job and what
it taught you. You can follow the STAR approach for answering behavioural questions like
these.

S- Situation – Describe the situation/crisis at hand.

T- Task – What was your duty/role in the crisis?
A- Action – What steps you took, and how did you take them to solve the crisis?
R – Result – What result came out of the action taken, and what it taught you?

This is a structured method for answering behavioural questions. Furthermore, it can be

applied to other aspects of the interview, like personality-based questions or while solving a
situation-based question.

Pro Tip – Work experience allows you to discuss your leadership skills and how you managed
a team. Make sure you inculcate them in your answers.

4. General Awareness
This section of the interview can be tricky. General Awareness encompasses everything, and
you're bound to miss one thing or another. What is important here is that you cover major
trending topics about the economy, politics, international news, and your domain (e.g., if you
mention that you like finance, then the stock market, financial news, etc.). Read as much as
you can. Newspapers help you in staying updated about current trends, and you must make
it a habit of reading them. Some suggestions for newspapers – Mint (Finance and economics),
editorial sections for The Indian Express, and The Hindu.

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Pro tip: Again, as questions will be primarily objective, it is okay to say NO if you do not know
something. Even if you're guessing, try and make an educated guess rather than answering
blatantly. Also, when discussing current affairs, form your own opinion and discuss it only
when asked.

5. Extra-Curricular Activities
Above the scope of academics and work experience, the institution also aims to look for
students with all-around exposure to arts, sports, and other extracurricular activities as it
showcases their talent and ability to multi-task.
If you have professionally participated in a sport or art, try and make sure you narrate and link
it with your learnings in life, what the activity taught you, how it changed you as a person and
what qualities you've gained from it. Make sure you know your activity in depth, as the
interviewer might ask you multiple questions about the same.
Even if you state a particular hobby, for example – Reading Non-fiction, or playing football, be
ready to answer questions like 'who's your favourite non-fiction writer and why '? 'What are
the dimensions of a football field'? 'How many goals were scored in the 2022 football world
cup' etc. In short, be thorough with your Hobbies as they are your interests, and you
should be curious about them.

Pro tip: Extracurricular activities showcase your attitude and curiosity, so try to explain those
characteristics through real-life examples and how you bring something different to the table.

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BONUS SECTION
Abstract
You cannot really prepare for this section. The interviewer might ask you to solve a puzzle, do
a guesstimate, or even ask you mathematical questions like probability. The only advice we
can give you is not to panic, have a calm mind and fresh perspective, and try to answer the
questions to the best of your abilities. Instinctive thinking will greatly help and do not let a
wrong answer affect the rest of the interview.

General Tips for the Interview:

• Always prepare some good questions to ask the interviewer. Questions about the
course and college, in general, will reflect how eager you are to join the institute.
• Prepare your introduction very carefully and creatively as it is highly likely that it’s the
first question you’re asked. Try including and emphasizing on interesting things about
yourself, giving cues to the interviewer to ask more on those. This way you can ‘lead
the interview’ and be confident about your answers.
• Interviews are a two-way journey. You and your interviewer are in a conversation and
ensure it stays the same. Be yourself, and always remember to smile and greet the
interviewer (DO NOT make mistakes like greeting good morning when it is post 11:59
AM, it showcases a lack of presence of mind).
• You must have a unique story to stand out from others. Make sure the interview is
about what value addition you do to the institution and how unique it is.
• Go through the website of IIM Shillong (https://www.iimshillong.ac.in/) and learn about
the course and what it entails. It would be great if you were aware of the current
developments at the institution.
• Know your city of residence and important facts like the CM of the state, population,
etc. Also, read a little bit about Shillong and what the city offers.
• Examples are king – everything you say, add examples. What you say might not stick,
but a good example is easy to remember and makes your candidature stand out.
• Get good sleep – 8 hours of sleep and a refreshed body & mind are non-negotiable for
a good interview.
• Your CV is your bible. Know it inside out.
• Show your eagerness to learn. Even if you do not know an answer, tell the interviewer
you will read about it later.

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TOPICS IN NEWS

1. G20 Summit in India: India Presidency in 2023: History, Plans, Expectations and Roadmap
2. Generative AI: Is AI a boon or bane, as people fear that it would lead to mass
unemployment?
3. India is now the most populous country in the world. Do you think India needs a
population control law?
4. India’s EV sector has grown by 46 per cent Y-o-Y in 2023. What are the challenges &
opportunities concerning EV adoption in India?
5. India Vs Maldives: How Lakshadweep Can Become A Major Tourist Destination
6. FAME India Scheme to reduce Vehicle Pollution: Review of Phase 1 & 2 Objectives and
Success; Phase 3 Plans
7. Recently, there has been much discussion about freebies in politics. What is your view
on the same?
8. Global Space Economy: Can India be a Leader?
• India’s Solar Mission Aditya-L-1
• Chandrayaan 3
• Gaganyaan 1

9. Foreign Universities in India: Will it raise academic standards and benefit Indian
students, parents?
10. Union Budget 2023-24: Expectations & Key Highlights
11. Tech Layoffs at Big Tech Companies In 2022
12. Will Open Network for Digital Commerce (ONDC) disrupt E-Commerce, and become the
next UPI and Aadhaar?
13. The European Union (EU) has set the stage for the world’s first comprehensive
legislation aimed at regulating the use of Artificial intelligence (AI).
14. India has announced a USD 250 million line of credit to Kenya for modernisation of its
agricultural sector during the recent visit of Kenya’s President to India.
15. Buy Now Pay Later (BNPL): A convenience or a trap?
16. How is Ram Mandir boosting Ayodhya’s economy and largely India’s economy?
17. Earthquake and Tsunami in Japan – possible causes and impacts.
18. Ongoing wars in Ukraine and Gaza.
19. Global economic slowdown
20. Economic Survey 2022-23 by the Government of India, the e-commerce market is

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 projected to grow at 18% annually through 2025. What challenges does it pose for small
shop owners, and how can it be solved?

21. Land 'sinking' damaged 65% of homes in Joshimath; Catastrophic landslides in Himachal
during 2023 monsoons. Why do you think are the possible reasons behind this
environmental backlash on human race and what can be done to avoid these?
22. Government of India vision of Viksit Bharat@2047.
23. Should India support in making BRICS currency?
24. Should India attack Houthi Rebels to make shipping routes in Indian Ocean safer?
25. Iran-Pakistan missile strike
26. Should India bid for hosting Olympics?
27. 2024 is ‘the’ election year. Around 60+ countries, (plus the European Union) – representing
a combined population of about 49% of the people in the world—are meant to hold national
elections. How is it important for the world future that lays ahead? What can be expected?

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FINANCE

NIVESHAK
The Finance and Investment Club
INTRODUCTION
Finance is the management, creation, and study of money. It involves directing resources in
the form of credit, loans, or invested capital to those businesses that can use them most
effectively or have the greatest need for them. To finance their operations, consumers,
businesses, and governments frequently lack the cash on hand to spend. They need to raise
capital, then. As a result, they must borrow money or sell shares. On the other side, investors
and savers build money that, if used wisely, could provide interest or dividends.

CAREER OPPORTUNITIES
• Investment Banking – Investment Banker, Sales, and Trading, Investment Strategist
• Hedge Funds – Hedge Fund Manager (mostly like portfolio managers but operating to
generate very high alpha)
• Private Equity Firms – Investment Bankers (looking for an investment in a private
company and earning returns by its superior performance)
• Venture Capital Firms – Portfolio Manager (investing early in start-ups to reap benefits
later)
• Commercial Banking – Loan Officer, Credit Analyst, Branch Manager, etc.
• Asset Management Firms - Portfolio Manager, Equity Research Analyst
• Corporate Finance – Tax Analyst, Financial Analyst, Treasurer, Chief Financial Officer,
etc. (taking care of investing, financing, and dividend decisions of a company)

TYPES OF BUSINESSES
• Sole Proprietorship – An entity that a single person controls. The majority of
businesses in India are in the form of a sole proprietorship. They don't require any
registrations and can be set up in less than ten days. The sole proprietorship has no
separate legal identity; hence, the entire liability falls on the shoulder of the owner.
• Partnership Firm – The partnership firm is the extension sole proprietorship where
two or more people come together to work. The partnership requires an agreement
that is to be written out in a partnership deed which is not compulsory. The maximum
number of partners allowed is 50. The partners have unlimited liability and can share
profits in an agreed-upon ratio.
• Limited Liability Partnership – LLPs in India are governed by the LLP Act 2008,
where partners have limited liability because the LLP and partners because both are
considered separate legal entities and, therefore, can function irrespective of changes
in partners. LLPs were introduced to address the problems with general partnership
business firms by reducing compliance and regulations. There is no cap on the

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 maximum number of partners, but at least one of them should be an Indian resident,
and the liability of each partner is limited to the contribution made by the partner.
• Private Limited Company – According to the Companies Act 2013, a 'private
company means a company having a minimum paid-up share capital as may be
prescribed by its articles –
o Restricts the right to transfer its shares.
o Except in the case of One Person Company, limits the number of members to
200.
o Prohibits any invitation to the public to subscribe to any securities of a
company.'
Many firms choose this form of business because it gives the advantages of a separate
legal entity and continuous existence. Also, since the companies don't have any public
involvement, disposing of and selling the business becomes relatively hassle-free.
• Public Limited Companies – According to the Companies Act 2013, a public
company is a company that is not private. A minimum of 7 members are required to
start a public limited company that gets listed on a stock exchange. The liability is
limited to the extent of shares held by shareholders. Firms choose to go public to take
advantage of the huge capital resources present in the open market.
• One Person Company – It means a company that has only one member, which is a
resident of India, and a nominee is necessary for registration. The OPC was
introduced by the government to facilitate budding entrepreneurs to manage their
businesses alone.
• Cooperative Society – It is a voluntary association of individuals who come together
with the purpose of working together for mutual help and self-help. Popular examples
are Amul and Lijjat Papad.

BOOKKEEPING
Bookkeeping involves recording the daily financial transactions of a company. This enables
the companies to track all information on their books to make key operating, investing, and
financing decisions.

ACCOUNTING
According to the American Institute of Certified Public Accountants [AICPA], "Accounting is
the art of recording, classifying and summarising in a significant manner and terms of money,
transactions and events, which are, in part at least, of a financial character and interpreting
the result thereof."

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While accounting and bookkeeping are sometimes synonymous, there is a fundamental
difference between the two. While bookkeeping is limited to the recording of transactions,
accounting is much broader in scope, and in addition, bookkeeping includes summarising,
analyzing, interpreting, and communicating the results to interested parties.

ACCOUNTING PRINCIPLES
Accounting principles are the rules that an organization follows when reporting financial
information. These uniform sets of rules or guidelines are developed to ensure uniformity and
ease of understanding of the accounting information. Thus, they form the basis upon which
the complete suite of accounting standards has been built:

• Business entity principle: According to this principle, a business is considered as a

unit separate and distinct from its owners, creditors and managers, and others. In other
words, transactions are recorded from the firm's perspective and not from its owners.
• Accrual principle: This principle states that revenue and expenses are recorded as
and when the transaction takes place and not when cash is actually received or paid.
• Going concern principle: This is the concept that a business will remain in operation
for a long period in the future. This means that you would be justified in deferring the
recognition of some expenses, such as depreciation, until later periods. Otherwise, you
would have to recognize all expenses at once and not defer any of them.
• Conservatism principle: According to this principle, you should record expenses and
liabilities as soon as possible, but record revenues and assets only when you are sure
that they will occur. In other words, conservatism is the policy of playing safe. For
example,
o Provision is made for all known liabilities and losses, even though the amount
cannot be determined with certainty.
o Closing Stock is valued at cost price or realizable value, whichever is less.
• Consistency principle: This concept states that accounting principles and methods
should remain consistent from one year to another. These should not be changed from
year to year to enable the comparison between the financial statements of two
accounting periods.
E.g., If the company charges straight-line depreciation, it can't shift to the written-down
value method. However, it doesn't mean that company can't change its accounting
methods according to changed circumstances. It may do so by providing the effect of
change of method and justification for the same.
• Cost principle: This is the concept that a business should only record its assets,

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 liabilities, and equity investments at their original purchase costs. Thus, land
purchased at $10,000 remains at the same value in the balance sheet, irrespective of
the market price.
• Full disclosure principle: The information on financial statements should be
complete so that nothing is misleading. With this intention, important partners or clients
will be aware of relevant information concerning your company.
• That is why, while the contingent liabilities have no monetary impact on the present
status of the business, they're still shown in the notes of accounts to give a clear picture
of the company.
• Matching principle: This is the concept that, when you record revenue, you should
record all related expenses at the same time. Thus, you charge inventory to the cost
of goods sold while you record revenue from the sale of those inventory items. This is
a cornerstone of the accrual basis of accounting. The cash basis of accounting does
not use the matching principle.
• Materiality principle: This is the concept that you should record a transaction in the
accounting records; if not, doing so might have altered the decision-making process of
someone reading the company's financial statements.
• Monetary unit principle: Only those transactions and events are recorded in
accounting that is capable of being expressed in terms of money. As a result, events
such as strikes, the manager's resignation, etc., are not recorded.
• Reliability principle: It states that only those transactions that can be proven should
be recorded. For example, a supplier invoice is a solid evidence that an expense has
been recorded. This concept is of prime interest to auditors who constantly search for
evidence supporting transactions.
• Revenue recognition principle: This is the concept that you should only recognize
revenue when the business has substantially completed the earnings process. So
many people have skirted around the fringes of this concept to commit reporting fraud
that a variety of standard-setting bodies have developed a massive amount of
information about what constitutes proper revenue recognition.
• Time period principle: This is the concept that a business should report the results
of its operations over a standard period. This may qualify as the most glaringly obvious
of all accounting principles but is intended to create a standard set of comparable
periods, which is useful for trend analysis.

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ACCOUNTING BASIS
There are two major methods of accounting, namely–cash basis and accrual basis. The
difference between these is based on when the company records a transaction in the books.
Cash accounting – In the case of a cash accounting system, revenue is recorded during the
period when cash is received, and expenses are recorded when cash is actually paid. Thus,
this system focuses on recording transactions only when there is an inflow or outflow of cash.
Accrual accounting – Contrary to cash accounting, in accrual accounting, revenue and
expenses are recorded when the transaction takes place and not when cash is received or
paid.

Golden Rules of Accounting

1. Debit the receiver, credit the giver – This rule is based on personal accounts which
relate to people (natural or artificial). Example – Ram bought flowers, so Ram is the
receiver and will be debited.
2. Debit what comes in, credit what goes out – This rule applies to real accounts which
relate to assets, liabilities, and equity. Example – A company purchases furniture,
which is an asset for cash; hence Furniture has come in, so it will be debited, and cash
has gone out, so Cash a/c will be credited.
3. Debit all expenses and losses and credit all income and gains – This rule applies to
nominal accounts, including revenue, expenses, gains, and losses. For example –
Company pays salaries to employees, and since salaries are an expense and hence
salary a/c will be debited.

TYPES OF REVENUE AND EXPENSES

OPERATING REVENUE
Operating revenue is a firm's revenue from its core business operations. Operating revenue
(sometimes wrongly, 'revenue') is used interchangeably with 'Sales.'
For a cotton farmer, the sale of cotton to a textile industry is considered Operating Revenue
for the farmer. Say the same farmer has a plot of land that he has provided on rent to a
shopkeeper. The rental income from the shopkeeper is 'Revenue' for the farmer, but not
'Operating Revenue.'
For a bank, the interest earned on a car loan given is the Operating Revenue.

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NON-OPERATING REVENUE
Non-operating revenue refers to all other sources of revenue for a firm that is not from its core
operational functions. Non-operating revenue can be classified into multiple sub-categories
depending upon the industry a firm is operating in. Some of the common sub-categories of
non-operating revenue are as follows –
Interest Income – Interest earned via investments such as Fixed Deposits, T-bills,
Government bonds, Gold Loans, and Corporate Bonds are interest income for a firm whose
core operation does not involve earning interest. For a bank, income from these sources would
be Operating revenue.
Rental Income – Income earned from rental properties owned by a firm is known as rental
income. For a real estate agent, this would be their operating revenue.
Dividend Income – Investments such as equity shares provide shareholders with a dividend.
A firm's income from dividends earned by investing in other companies is dividend income.

EXPENSES
Expenses can be classified in multiple ways, but the most common classifications are –
a. Operating v non-operating expenses
b. Fixed v Variable expenses

Operating Vs. non-operating expenses

Expenses incurred in a firm's core operations are classified as operating activities.
For a manufacturing firm, rent, salaries, wages, utilities, office supplies, etc., would be
classified as Operating expenses. The raw materials used fall under a separate category
called 'Cost of Goods Sold' or 'Cost of Materials Consumed.'
Non-operating expenses
Expenses incurred and not used in a firm's general operations are classified as non-
operational expenses. These include expenses such as depreciation, amortization, loss on
sale of an asset, restructuring expenses, etc.

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TYPES OF FINANCIAL STATEMENTS
Financial Statements are summarised statements of accounting data prepared at the end of
the accounting process, i.e., after preparing a Trial Balance by an enterprise. Thus, these
serve as a medium for communicating accounting information to relevant stakeholders. These
include-
• Balance Sheet
• Statement of Profit & Loss
• Cash Flow Statement

Balance Sheet
• It shows the financial position of an enterprise at a given point in time.
• All the assets, liabilities, and equity (i.e., personal and real accounts) are finally
recorded in the balance sheet.

Statement of Profit & Loss

• It shows the financial performance of an enterprise during a given time.
• All the expenses and incomes (i.e., nominal accounts) are finally recorded in the P&L
statement.

Cash Flow Statement

The cash flow statement is a detailed summary of a firm's cash inflows and outflows during a
particular period. The statement helps the investors understand how the company's operations
are running, where the money is coming from, and how the money is being spent. It comprises
three sections:
1. Cash flow from operating activities - Cash flow from operating activities refers to
the inflow and outflow of cash from the regular ongoing business activities during a
given period. The operating activities include wage payments, receipts from the sale
of goods and services, rent payments, etc. This part of the cash flow statement
considers the net income (calculated under the net income) and adds back all the non-
cash expenses like depreciation (since no cash outflow is involved in such
transactions). In addition to this, any increase in the assets or decrease in the liabilities
results in a decrease in the cash flow from operations. In contrast, a decrease in assets
or an increase in liabilities leads to an increase in the cash flow from operations.
2. Cash flow from investing activities- Cash flow from investing activities refers to cash
inflow and cash outflow from activities that are non-operating in nature and are outside
the normal scope of business. This involves items classified as assets under the

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 Balance Sheet and includes the purchase and sale of equipment and investments. For
example- the purchase of the building sale of long-term investment.
3. Cash flow from financing activities – This section involves items classified as
liabilities and equity in the Balance Sheet and includes the payment of dividends as
well as issuing payment of debt or equity. For example- Cash received from the
issuance of common stock

CERTAIN IMPORTANT ASPECTS

1. Why do we prepare a cash flow statement? Doesn't the statement of Profit & Loss
already tell us about the performance of the company?
Answer: While the P&L tells us about the profitability of the company, the cash flow
statement tells us about the cash flow position of the company, which is important from
the liquidity and solvency perspective. Moreover, it is not necessary that the company
which is profitable may also have cash.
E.g., If the company makes sales of $100,000 on credit, based on the accrual concept, it
will be recorded in the Statement of P&L. However, these credit sales have not generated
cash for the company till now. Hence Cash flow statement allows us to investigate these
finer aspects.
Similarly, a company may make a payment of prepaid insurance, i.e., insurance for next
year. As a result, the cash will decrease, but the profits will remain the same as this
transaction relates to the next accounting period and hence will be recorded in the
statement of P&L in that period.

2. What is the effect of depreciation on all three financial statements?

Answer:
• Statement of Profit & Loss: Depreciation is considered as an expense, and hence it
will be subtracted from the Statement of P&L.
• Balance Sheet: Here, the depreciation will be subtracted from the concerned asset,
and the net value of the asset will appear on the balance sheet.
• Cash Flow Statement: Since depreciation is a non-cash expense while preparing a
cash flow statement, it will be added back to the net profits.

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GAAP vs. IFRS
Basis for
GAAP IFRS
Comparison
Full Form Generally Accepted Accounting International Financial Reporting
Principle Standard
Explanation Set of accounting guidelines Universal business language for
used to prepare financial companies for reporting financial
statements statements
Basis Rules – rigid in nature Principles - flexible in nature
Inventory FIFO, LIFO, Weighted Average LIFO is not allowed. The rest of
Valuation Method the methods are allowed
Development cost Treated as an expense Capitalized only if conditions like
technical feasibility, innovation,
intention to sell, etc., are met
Reversal of Not Allowed Permissible, if conditions are met
Inventory

RATIO ANALYSIS

Ratio analysis consists of the calculation of ratios from financial statements and is a
foundation of financial analysis. A financial or accounting ratio shows the relative magnitude
of selected numerical values taken from those financial statements.

The numbers in financial statements need to be put into context so investors can better
understand different aspects of the company's operations. Ratio analysis is one method an
investor can use to gain that understanding.

(A) LIQUIDITY RATIOS

The terms' liquidity' and 'short-term solvency' are used synonymously.
Liquidity or short-term solvency means the ability of the business to pay its short-term
liabilities. The inability to pay off short-term liabilities affects its credibility as well as its credit
rating.

a) Current Ratio
The current ratio is one of the best-known measures of short-term solvency. It is the
most common measure of short-term liquidity.

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 The main question this ratio addresses is: "Does your business have enough current
assets to meet the payment schedule of its current debts with a margin of safety for
possible losses in current assets?" In other words, the current ratio measures
whether a firm has enough resources to meet its current obligations.
Current Ratio = Current Assets/Current Liabilities

b) Quick Ratio
The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best
measures of liquidity.
Quick Ratio = (Cash and cash equivalent + Marketable securities + Accounts
receivable) / Current liabilities.
Or Quick Ratio = (Current assets - Inventory) / Current liabilities

The Quick Ratio is a much more conservative measure of short-term liquidity than
the Current Ratio. It helps answer the question: "If all sales revenues should
disappear, could my business meet its current obligations with the readily convertible
quick funds on hand?"

(B) LEVERAGE RATIOS

The leverage ratios may be defined as those financial ratios which measure the long-term
stability and capital structure of the firm. These ratios indicate the mix of funds provided
by owners and lenders and assure the lenders of the long-term funds about Periodic
payment of interest during the period of the loan.
Repayment of principal amount on maturity.

a) Debt Ratio

Debt Ratio = Total Debt / Total Assets

Total debt or total outside liabilities include short- and long-term borrowings from
financial institutions, debentures/bonds, deferred payment arrangements for buying
capital equipment, bank borrowings, public deposits, and any other interest-bearing
loan.

Interpretation

This ratio is used to analyze the long-term solvency of a firm. A ratio greater than one
would mean a greater portion of company assets are funded by debt and could be
risky.

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 b) Debt to Equity Ratio

Debt to Equity Ratio = Total Debt / Shareholders' Equity

A high debt-to-equity ratio here means less protection for creditors; a low ratio, on
the other hand, indicates a wider safety cushion (i.e., creditors feel the owner's funds
can help absorb possible losses of income and capital). This ratio indicates the
proportion of debt funds in relation to equity. This ratio is very often used for making
capital structure decisions, such as the issue of shares and/or debentures. Lenders
are also very keen to know this ratio since it shows the relative weights of debt and
equity. The debt-equity ratio is the indicator of a firm's financial leverage.

c) Interest Coverage Ratio

This ratio shows how the ability of the company to meet its interest payments from its
operating income. The higher the ratio, the better position a company is in to meet its
interest obligations.

The more the debt, the higher will be the interest expense. That means the company
must have a higher EBIT to cover it.

Interest Coverage Ratio = EBIT (1-tax rate) / Interest Expense

As a rule of thumb, investors should not own a stock or bond with an interest coverage
ratio under 1.5. An interest coverage ratio below 1.0 indicates the business is having
difficulties generating the cash necessary to pay its interest obligations for a company
in a situation where its sales decline and the subsequent decrease in its net income,
a high-interest obligation can be a cause of concern. An excessive decrease in the
net income would result in a sudden and equally excessive decline in the interest
coverage ratio, which should send up red flags for any conservative investor.

(C) ACTIVITY RATIOS

a. Inventory Turnover Ratio

It measures the number of times an enterprise sells and replaces its inventory, i.e., no.
of times inventory was converted into sales during this period.

1. Inventory Turnover = Cost of Goods Sold / Average Inventory.

Since it measures how fast a company sells inventory, A low turnover implies weak
sales and possibly excess inventory, also known as overstocking. It may indicate a

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 problem with the goods being offered for sale or be a result of too little marketing. On
the other hand, a high ratio implies either strong sales or insufficient inventory, which
may lead to a loss in business as the inventory is too low.

Days of Inventory on Hand (DIO) = 365 / Inventory Turnover Ratio

It shows the number of days it takes from buying the raw material to selling the
produced goods. Thus, a lower DIO indicates the inventory efficiency of the company
and is desirable.

b. Receivables Turnover Ratio

It shows how quickly trade receivables are converted into cash and cash equivalents
and, thus, efficiency in the collection of amounts due against trade receivables.

Receivables Turnover = Net Credit Sales /Average Receivables.

A high ratio is better as it shows that debts are collected more promptly, and the
company has a high proportion of quality customers that pay their debts quickly.

However, A high ratio can also suggest that a company is conservative when it comes
to extending credit to its customers. No doubt, a Conservative credit policy can be
beneficial since it could help the company avoid extending credit to customers who
may not be able to pay on time; however, it might also indicate that such a policy
might be driving away potential customers.
A low receivables turnover ratio might be due to an inadequate collection process, bad
credit policies, or un financially viable or creditworthy customers.

Debt Collection Period or Days of Sales Outstanding (DSO) = 365 / Receivables

Turnover ratio.

The average collection period is the amount of time it takes for a business to
receive payments owed by its clients.

The way we have the receivables turnover ratio for the debtors, the accounts payable
ratio is used to quantify the rate at which the company pays off its suppliers (creditors).

Payables Turnover Ratio = Net Credit Purchases /Average Payables.

Days of Payables Outstanding (DPO) =Number of Days in period / Payables Turnover

ratio

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 c. Fixed Asset Turnover

The fixed asset turnover ratio is an efficiency ratio calculated by dividing a company's
net sales by its net property, plant, and equipment (property, plant, and equipment -
depreciation). It measures how well a company generates sales from its property,
plant, and equipment. A higher ratio implies that management is using its fixed assets
more effectively.

(D) PROFITABILITY RATIOS

a) Operating Margin: The operating profit ratio is also calculated to evaluate the operating
performance of the business.

Operating Profit = Operating Profit/Total Revenue

Where, Operating Profit = Sales – Cost of Goods Sold (COGS) – Expenses

The operating profit ratio measures the percentage of each sale in rupees that remains
after the payment of all costs and expenses except for interest and taxes. This ratio is
followed closely by analysts because it focuses on operating results. Operating profit is
often referred to as earnings before interest and taxes or EBIT.

b) Net Profit Ratio/ Net Profit Margin: It measures the relationship between the net profit
and sales of the business. It can be calculated as:

Net Profit Ratio= Net Profit / Total Revenue

The Net Profit Ratio finds the proportion of revenue that finds its way into profits after
meeting all expenses. A high net profit ratio indicates positive returns from the business.

(E) RETURN RATIOS

a) Return on Assets (ROA)

Return on Assets = Net Income/Total assets

The profitability ratio measures the relationship between net profits and assets
employed to earn that profit. This ratio measures the profitability of the firm in terms of
assets employed in the firm. Based on various concepts of net profit (return) and
assets, the ROA may be measured as follows:

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b) Return on Equity (ROE)

Return on Equity measures the profitability of equity funds invested in the firm. This
ratio reveals how profitably the firm has utilized the owners' funds. It also measures
the percentage return generated to equity shareholders. This ratio is computed as
follows:

ROE = (Net Profit after taxes – Preference dividend (if any)) / Total
Shareholders' Equity

Return on equity is one of the most important indicators of a firm's profitability and
potential growth. Companies that boast a high return on equity with little or no debt can
grow without large capital expenditures, allowing the owners of the business to
withdraw cash and reinvest it elsewhere.

c) Return on Capital Employed (ROCE)

ROCE is a profitability ratio that calculates a business's profits using the capital
employed.

ROCE = EBIT/ Capital Employed

When a company’s ROCE is higher than the cost of capital, the company has efficiently
utilized the capital to generate profits. Companies should strive to achieve an ever-
increasing ROCE over the years since it indicates that the business is stable and is an
attractive investment option for investors.

d) Return on Invested Capital (ROIC)

ROIC is a profitability ratio that measures the returns investors earn from the capital
invested in a company. It shows how efficiently the company uses the funds provided
by the investors to generate income for the business.

ROIC = (PAT – Pref Dividend)/Invested capital

The invested capital is a subset of employed capital, and it is the percentage of capital
actively invested in the business.

e) Du Pont Analysis

The DuPont identity is an expression that shows a company's return on equity (ROE)

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 can be represented as a product of three other ratios: the profit margin, the total asset
turnover, and the equity multiplier.

DuPont identity tells us that ROE is affected by three things:

Operating efficiency, which is measured by net profit margin.

Asset use efficiency, which is measured by total asset turnover; and

Financial leverage, is measured by the equity multiplier.

Thus, if the shareholders are dissatisfied with the lower ROE, the company, with the
help of the DuPont Analysis formula, can assess whether the lower ROE is due to low-
profit margin, low asset turnover, or poor leverage. Five-Step Du Pont Analysis:

Similarly, a much deeper analysis would be:

(F) MARKET RATIOS

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Price to Earnings Ratio (P/E ratio)

Considered one of the important ratios, this gives information about the amount that the
investors are willing to invest in the company to earn $1.

PE Ratio = Market Price per share/Earnings per share

This is why the P/E is sometimes referred to as the price multiple because it shows how much
investors are willing to pay per dollar of earnings. If a company was currently trading at a P/E
multiple of 20x, the interpretation is that an investor is willing to pay $20 for $1 of current
earnings.

In general, a high P/E suggests that investors expect higher earnings growth in the future than
companies with a lower P/E (logically, that is why the prices are high, leading to a high ratio).
A low P/E can indicate either that a company may currently be undervalued or that the
company is doing exceptionally well relative to its past trends.

The inverse of the P/E ratio is the earnings yield.

• Absolute P/E: The numerator of this ratio is usually the current stock price, and the
denominator may be the trailing EPS (TTM), the estimated EPS for the next 12 months
(forward P/E), or a mix of the trailing EPS of the last two quarters and the forward P/E for
the next two quarters. When distinguishing absolute P/E from relative P/E, it is important
to remember that absolute P/E represents the P/E of the current period. For example, if
the price of the stock today is $100, and the TTM earnings are $2 per share, the P/E is 50
= ($100/$2).

• Relative P/E: The relative P/E compares the current absolute P/E to a benchmark or a
range of past P/Es over a relevant time period, such as the past ten years. The relative
P/E shows what portion or percentage of the past P/Es the current P/E has reached. The
relative P/E usually compares the current P/E value to the highest value of the range, but
investors might also compare the current P/E to the bottom side of the range, measuring
how close the current P/E is to the historic low. The relative P/E will have a value below
100% if the current P/E is lower than the past value (whether the past high or low). If the
relative P/E measure is 100% or more, this tells investors that the current P/E has reached
or surpassed the past value.

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Price to Book Ratio (P/B Ratio)

P/B Ratio = Market Capitalisation / Total Book Value; or

= Market Price Per Share (MPS) / Book Value Per Share (BPS)

Where Book Value = Total Assets – Total Liabilities

The book value refers to the amount the shareholders would receive if the company were to
shut down immediately, liquidate, and pay off all its liabilities. The amount that remains is the
book value.

A low ratio (less than 1) could indicate that the stock is undervalued (i.e., a bad investment),
and a higher ratio (greater than 1) could mean the stock is overvalued (i.e., it has performed
well).

Earnings per Share (EPS)

It refers to the amount of net income that each shareholder is entitled to

EPS = (Net Income – Preferred Dividend) / Average No. of Equity Shares

A related term you'll most commonly find is diluted EPS, which gauges a company's quality of
EPS assuming all convertible securities (such as outstanding stock options, convertible
debentures, convertible preferred shares, warrants, etc.) have been exercised.

Diluted EPS = (Net Income – Preferred Dividend) / (Average No. of Equity Shares + Dilutive
Shares)

Dividend Pay-out Ratio

It is the percentage of earnings paid to shareholders in dividends.

Dividend Pay-out Ratio = Total Dividends Paid / Net Income

= Dividend per share / EPS

Retention Ratio

Like Dividend Pay-out Ratio, is the Retention Ratio, which shows the percentage of earnings
a company reinvests in the business either for growth, to pay off debt, or to add to its reserves.

Retention Ratio = (Net Income – Total Dividends Paid)/Net Income

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BASIC STOCK MARKET TERMS
Share market: Anywhere you can buy or sell shares. All stock exchanges across India are
part of the Indian share market. Any shares that you buy or sell outside the exchanges are
also part of this share market.

Stock exchange: An exchange refers to a place or an electronic market where various

securities are traded. i.e., one of the many stock exchanges in the country or worldwide where
shares of stocks are bought and sold. The existing stock exchanges in the country are the
National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE).

NSE and BSE – National Stock Exchange (NSE) which was incorporated in 1992, is one of
the leading stock exchanges in India, based in Mumbai. Bombay Stock Exchange (BSE) was
incorporated in 1875 and is in Mumbai.

Nifty 50 – It is the benchmark stock market index that represents the weighted average of 50
of India's largest companies listed on the NSE.

Sensex – It is the benchmark stock market index that represents the weighted average of 30
of India's largest companies listed on the BSE.

Over the counter: If you trade a security that is not listed in a stock exchange, you are making
an over-the-counter trade.

Stock: Stock is a general term used to refer to a certificate indicating ownership in a company.

Share: A share is a stock certificate of a particular company. So, if an investor says that she
owns 100 stocks - she is most likely referring to shares from 100 different companies. On the
other hand, if she says she is buying 100 shares, she is referring to shares of a single
company.

Bull market: When stock prices in a market are generally rising, it is called a bull market.

Bear market: The exact opposite of a bull market is a bear market - when the stock prices in
the market are generally falling, it is called a bear market.

Order: It is a show of intent to buy or sell shares in a given price range. For example, you may
place an order to buy up to 100 shares of Company A at a maximum price of Rs. 80 per share.

Bid: Your bid is the amount that you are willing to pay for a share.

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Ask: Ask is the price at which you are willing to sell a share.

Bid-ask spread: This is the difference between the amount people are willing to spend to buy
a share and the amount at which the shareholders are willing to sell a share. A trade can only
happen when this spread is resolved. That is if the lowest price at which a share for Company
A is being sold is Rs. 40, and the highest price someone is willing to pay for such a share is
Rs. 38 - no trade can happen. The trade can only happen when the bid and ask prices match.

Market order: An order to sell/buy shares at the market price is called a market order. It is
advisable to avoid placing market orders as the trade price can be very volatile.

Limit order: An order to sell shares above a set price or buy shares below a set price is called
a limit order. You should always use limit orders to trade shares.

Day order: An order that is good only till the end of the trading day is called a "day order." If
the order does not get executed by the time the market closes, it will be cancelled.

Good-till-cancelled order: An order that will stay open until it is either executed or manually
cancelled. Such orders may stand for weeks if no shares are available to trade in the price
range specified. For example, if you place a TC order to buy a share of Company A for Rs. 50
or less, and the share is currently trading at Rs. 70. If it takes the share to hit Rs. 50 price
points a week later, the order will be executed then. If it were a day order, it would have been
cancelled at the end of the trading day itself.

Liquidity: Liquidity refers to how easily a stock can be sold off. A share that can be sold off
quickly, i.e., has high trade volumes, is said to be highly liquid.

Trading volume: The number of shares traded on a given day is called trading volume.

IPO/Initial Public Offering: The first time a company offers its share for trading on a stock
exchange. Typically, you buy shares from the previous owner of the share and not the
company directly. In the case of an IPO, you get to buy the shares directly from the company.

EMERGING TRENDS
1. Fintech: The use of technology to provide financial services, such as mobile banking,
peer-to-peer lending, and digital currencies.

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 2. Sustainable finance: The integration of environmental, social, and governance (ESG)
factors into investment decisions to promote long-term sustainability.
3. Impact investing: Investing in companies, projects, and funds with the intention of
generating a measurable social or environmental impact alongside a financial return.
4. Quantitative easing: Central banks buy government bonds or other securities to inject
money into the economy and increase the money supply.
5. Digital currencies and blockchain technology: The use of digital currencies such
as Bitcoin and blockchain’s underlying technology in financial transactions.
6. Cybersecurity: protecting against cyber threats to financial systems, including fraud
and hacking.
7. Digital Identity: The growing importance of digital identity, including online verification
methods and digital identity use in financial transactions.
8. Automation and Artificial Intelligence: The increasing use of automation and AI in
financial services, including robo-advisors, algorithmic trading, and fraud detection.
9. Big data analytics: Examining large and complex data sets to uncover hidden
patterns, unknown correlations, and other useful information.
10. Algorithmic trading and high-frequency trading: The rise of algorithmic and HFT
trading in the Indian context.

SUSTAINABILITY IN FINANCE
In recent years, sustainability and finance in India have become increasingly interconnected,
reflecting a growing awareness of the importance of environmental and social sustainability in
the financial sector. Sustainability in this context refers to an organization's ability to meet
current needs without compromising the ability of future generations to meet their
requirements.
Within the financial sector, sustainability is often associated with integrating environmental,
social, and governance (ESG) factors into investment decisions and financial products. This
approach, known as sustainable or responsible investing, aims to support companies
committed to environmental and social sustainability while delivering financial returns to
investors.
India offers various sustainable investment products, such as green bonds financing
environmentally beneficial projects and socially responsible investment (SRI) funds focusing
on companies with strong ESG performance. The government has actively endorsed
sustainability in finance, with the Securities and Exchange Board of India (SEBI) issuing
guidelines for ESG disclosure and a framework for rating agencies to evaluate companies
based on their ESG performance.

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Sustainable banking and finance are also gaining prominence in India, with banks recognizing
the importance of sustainability in their lending and financing activities. ESG factors, covering
environmental protection, social responsibility, and corporate governance, are increasingly
crucial in evaluating companies in India. This integration offers a comprehensive perspective
on a company's long-term performance and risk, making companies with strong ESG
performance more resilient to reputational, operational, and financial risks.
The Indian financial sector is experiencing a heightened awareness of the importance of ESG
factors, with institutions and investors incorporating these considerations into their decision-
making processes. SEBI's guidelines reinforce this trend, encouraging ESG disclosure and
providing a framework for rating agencies to assess companies based on their ESG
performance.
The proliferation of sustainable investment funds and products in India underscores a
commitment to supporting companies dedicated to environmental and social sustainability.
These offerings, rooted in ESG integration, emphasize the significance of ESG factors in the
investment process and company valuation.
In summary, the integration of ESG factors into the valuation process is gaining momentum in
India, driven by the recognition of the long-term performance and risk benefits associated with
strong ESG performance. This trend is expected to continue growing as sustainability and
finance become increasingly intertwined in the Indian financial landscape.

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COMMON QUESTIONS THAT ARE ASKED

1. Why finance? What distinguishes financial management from accounting? What are the
many financial branches?
2. What is: 1. WACC, 2. Beta, 3. CAPM Model, 4. FCFF 5. FCFE
3. What inspired you to pursue a career in finance?
4. What are your long-term career goals in finance?
5. Can you give an example of when you had to make a difficult financial decision?
6. How do you prioritize and manage your workload in a fast-paced financial environment?
7. Can you explain the Modern Portfolio Theory to someone without a financial
background?
8. PE Ratio: What Is It? How does it help? Can you help me with other market multiples?
9. Describe the 2008 subprime crisis. What caused the event?
10. Describe Brexit. What potential effects might it have on the Indian economy? Why?
11. Describe the idea of a one-person company. Is an audit required for the same?
12. What are your views on China Plus One policy?
13. Do you concur with the RBI's stance on monetary policy?
14. Can you explain a financial statement and its components?
15. How do you manage and analyze large amounts of financial data?
16. Indian M&A transactions recently. What drove that transaction, and why?
17. How do you handle financial conflicts or disagreements within a team?
18. Can you give an example of how you have improved financial performance in a previous
role?
19. What do you understand by Leverage? What are the different types of Leverage a firm
has?
20. How will India be impacted by India’s inclusion in the JP Morgan bond index?
21. Impact on the Indian economy and markets due to the Israel – Palestine war?
22. What is the Difference between Fintech and Banks?
23. Will Artificial Intelligence (AI) have a positive or negative impact in the Finance sector?

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MARKETING

MARKATHON
The Marketing Club
The "father of modern marketing," Philip Kotler, defines marketing as "the science and art
of exploring, creating, and delivering value to satisfy the needs of a target market profitably."
Marketing, in other words, is the process of identifying, anticipating, and satisfying customer
needs and desires through creating and promoting a product or service.

Marketing is a dynamic and ever-changing field that includes various activities such as
market research, product development, branding, advertising, and sales. It necessitates a
thorough knowledge of consumer behavior, market trends, and the competitive landscape.
It also entails utilizing various tools and techniques such as market segmentation,
positioning, targeting, and differentiation to reach and engage target audiences effectively.

Marketing is critical for businesses of all sizes and industries because it allows them to
understand and meet their customer's needs, build relationships, and create long-term
loyalty. It is a critical driver of business growth and success, and its significance will only
grow as the digital age transforms how we interact with customers and markets.

CAREER OPPORTUNITIES

Marketers are responsible for planning, creating, and executing marketing campaigns to
increase their company's reach and potential customer pipeline. The marketing industry in
India offers various job prospects, including brand management, market research, digital
marketing, advertising, and sales positions.
● Brand management entails creating and implementing marketing strategies for a
particular product or brand.
● Market research involves collecting consumer preferences and behavior data to
create effective strategies.
● Digital marketing involves using digital tools and strategies to attract and engage
customers, including search engine optimization (SEO), pay-per-click (PPC)
advertising, social media marketing, content marketing, email marketing, and others.
● Professionals in business development and sales are accountable for promoting and
selling products or services to customers. Sales professionals are responsible for
cultivating client connections, identifying new business prospects, negotiating deals
in various industries, and managing and creating sales strategies.
● Advertising professionals are responsible for ad campaign management which

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 involves copywriting, creating visual concepts, coordinating with media outlets, and
identifying the best media channels for reaching target audiences.

KEY ROLES OFFERED IN SALES, MARKETING, AND ADVERTISING DOMAINS

1. Chief Marketing Officer
2. Marketing Director
3. Vice president of Marketing
4. Brand Manager
5. Business Development Associate
6. Channel Sales Manager
7. Store Sales Representative
8. Marketing Coordinator
9. Product Marketing Manager
10. Category Manager
11. Marketing Communications Manager
12. Marketing Analyst
13. Digital Strategist
14. Social Media Manager
15. Content Marketing Manager
16. Graphic Designer
17. Event Marketing Head
18. Advertising Manager
19. Public Relations/Media Manager
20. Market Research Executive

MARKETING TERMINOLOGIES
1. Needs
These are basic requirements of people that arise due to a state of deprivation. They pre-
exist in the market, waiting to be tapped by marketers and converted into the form of a
product or service. Example: Need for food and transportation. Also, read about
'Maslow's Need Hierarchy' Theory.

Page | 37
2. Wants
These refer to preferences or desires for a 'specific satisfier' to fulfil a need. Marketers'
role is to influence these wants in favour of their own brand. Example: Starbucks Coffee
and Mercedes Car. (Contd. reference)
3. Demand
In simple terms, demand is a consumer's want for a product or service backed by their
ability to buy the same. It refers to the quantity customers are willing to buy, backed by
purchasing power. Marketers utilize this information to make strategic product
development, pricing, and distribution decisions. Example: So, even if you want to
purchase a premium coffee brand or a luxurious mode of transportation, your actual
demand may be Nescafe or local coffee shops, Volvo Cars (affordable).
4. Consumer VS Customer
In marketing, a customer is a person or organization that buys a product or service from
a business. A consumer is a person who ultimately uses or consumes the product or
service. While the terms are often used interchangeably, the differentiation in their usage
lies in transaction and consumption. A mother buys baby food for her son. The mother is
a customer here, whereas the son is the consumer. The two entities may be the same
person in some instances. This distinct connotation helps firms target their marketing
efforts accordingly.
5. Upselling
A sales technique in which a business encourages customers to purchase a more
expensive product or upgrade their current purchase. It is a way for companies to
increase revenue by offering additional, higher-value products or services to customers
who have already expressed interest in purchasing.
6. Cross-Selling
A sales strategy is where a business attempts to sell additional products or services to
an existing customer to increase the value of their buying basket. This can be achieved
by offering complementary products or services or creating bundled packages. For
example, a clothing store might use cross-selling to encourage customers to purchase
matching accessories or shoes along with their chosen clothing.
7. Above-the-line (ATL) Marketing
It may also be known as 'mass marketing' and refers to traditional advertising forms that
reach a wider audience. It is often used to build brand awareness, create a general
interest in a product or service, or establish a company's reputation. Examples:
television, radio, newspapers, and billboards.

Page | 38
8. Below-the-line (BTL) Marketing
It refers to activities targeted directly at a specific audience and is often used to build
brand awareness and generate leads. Examples: Direct mail, sampling, product
demonstrations, word-of-mouth, and others.
9. Through-the-line (TTL) Marketing
It utilizes a combination of both ATL and BTL tactics to reach consumers at different
touchpoints and create a cohesive brand experience. This approach allows for a more
integrated and efficient use of resources and the ability to track and measure the
effectiveness of different campaigns.
10. Inbound Outbound Sales
Inbound sales is a strategy where a company attracts customers through various
marketing efforts, such as content marketing, search engine optimization, and social
media. On the other hand, outbound sales is a strategy where a company actively
reaches out to potential customers through various channels, such as cold calling,
emailing or direct mail. In short, Inbound sales is a pull strategy where the customer is
coming to you. Outbound is a push strategy where the salesperson proactively reaches
out to the customer.
11. Dark Stores
These, also known as "dark retail" or "dark fulfilment centres," are physical retail stores
that are closed to the public but are used solely for online order fulfilment and delivery.
They are typically located in areas with high population density and are used to speed
up delivery times, reduce costs, and increase the efficiency of online order fulfilment.
12. Marketing Myopia
It is a term coined by Theodore Levitt in 1960 in which he argues that companies will do
better in the long run if they concentrate on meeting customers' needs rather than just
selling products. It refers to a narrow or short-sighted perspective on business wherein
a company loses sight of the needs of its customers against short-term sales or
immediate profits. For example, PVR should perceive itself as in the "entertainment
business" rather than just in "movies".
13. Top-Of-Mind Awareness (TOMA)
It measures how easily a brand or product comes to mind when consumers are asked to
recall brands or products in each category. It is a key metric in marketing and
advertising, reflecting a strong correlation with brand loyalty.

14. Integrated Marketing Communication (IMC)

The American Marketing Association defines IMC as "a planning process designed to

Page | 39
 assure that all brand contacts received by a customer or prospect for a product, service,
or organization are relevant to that person and consistent over time."
15. Touchpoints
These refer to the various points of interaction that a customer encounters with the
company.
16. Call to action (CTA)
It describes a specific action or behaviour that an audience or consumer desires. It is
typically used in advertising and marketing materials, such as website pages, email
campaigns, and social media posts, to encourage a viewer or reader to take a specific
action, such as making a purchase, signing up for a newsletter, or visiting a website.
Examples of CTA are "Sign up now", "Learn more", "Download here," and so on.
17. Go-To-Market (GTM)
It refers to the strategy and plan for introducing a new product or service to the market
and making it successful. It includes the analysis of target customers, product
positioning, channels through which the product will be sold, and a relevant promotion
plan.
18. Customer Relationship Management (CRM)
It is a strategy and set of processes used to manage interactions with current and
potential customers. It involves using technology to organize, automate, and
synchronize sales, marketing, customer service, and technical support.
19. Unique selling proposition (USP)
It is a statement that defines the unique benefit or advantage that a company's product
or service offers to its customers. A USP can be a specific product feature, a benefit it
provides, or a unique aspect of the company's approach to doing business.
20. Anchoring
It refers to the psychological technique of providing a reference point for consumers to
compare the value of a product or service. It is used to influence the perceived value of
an item by providing a benchmark or comparison point. For example, a store might offer
a $50 item for $25, but only for a limited time, to create a sense of urgency and make
the deal seem more valuable.

21. Behavioural economics

It is a field of study combining psychology and economics insights to understand how
and why people make decisions. It examines how cognitive biases and emotions
influence decision-making, often leading to outcomes that deviate from the predictions

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 of traditional economic models.

MARKETING CONCEPTS

Sales vs Marketing

Items Sales Marketing

Meaning Sales are the process of selling Marketing is the process of making
goods and services. It involves people interested in your product
convincing potential customers to through various strategies like
buy from your company. pricing, packaging, positioning
(creating a perception), placement,
and promotion.
Scope It has a broad scope and is a never- It is merely a part of the entire
ending process that begins with Marketing strategy, which begins
market research and continues with the development of the product
even after the product is sold. and concludes with its sale.
Strategy To develop a convincing proposal Identifying consumer needs and
for an existing product and use designing products to meet those
sales promotion tactics to convert a needs through market offerings.
prospect into a buyer.
Motive Revenue and Profit Generation Customer Satisfaction

Approach Fragmented Integrated

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STP - Segmentation Targeting Positioning

Segmentation Targeting Positioning

Divides the market into Decides which customer Creates target group-
distinct groups of customers. group to focus your specific marketing mix
Types: marketing efforts on - desired strategies. Types:
conversions.
● Geographic ● Symbolic
● Demographic Selection Criteria: ● Functional
● Psychographic ● Low CAC ● Experiential
● Behavioural ● Large size, reach,
and profitability

7 Ps of Marketing Mix
The marketing mix refers to the tactics we have to satisfy customer needs and position
our offering clearly in the customer's mind.

• Product - This refers to what a company produces to meet the customer's core
requirements, whether it be a tangible product, a service, or a mix of both.
• Price -It is the amount of money that customers would have to pay to purchase the
product. It also pertains to the price strategy for goods and services and how it will
influence the customers.
• Place - It signifies the locations companies decide to provide their product or service. It
may include a warehouse or a supermarket to an e-commerce marketplace.
• Promotion - It is about communicating messages to customers, whichever stage they
are in the buyer journey, to create awareness, interest, desire, and action.
• Physical Evidence - It provides tangible cues of the quality of experience that a firm
provides. Some examples include product packaging, receipts, and proof of delivery.
The market perception of a company's product is intangible physical proof.
• Process - This represents the method or flow of providing service to the clients and
often incorporates monitoring service performance for customer satisfaction.
• People - This refers to employees who represent a company as they interact with clients
or customers.

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 Product Life Cycle - PLC

Introduction Growth Maturity Decline

Sales Low Rapidly Rising Peak Declining Sales

Market Growth High High Low Low

Profits Negative Rising High Declining

Customers Innovators Early Adopters Middle Majority Laggards

Competitors Few Increasing Stable Declining

Strategy Gain Market Increased Economies of Harvest or Divest

Share Promotions Scale

Management Entrepreneurial Professional Administrative Asset Stripper

5 Cs of Marketing

A 5 C's analysis provides an in-depth look at the key drivers affecting your organization. It
also assists you in making informed decisions about reaching your target audience or
outperforming your competitors.
• Company: Focus on many of the internal factors related to the marketing and sales of
your products, long-term objectives, and strategies to gain a competitive edge.
• Customers: People who buy your products or interact with your services and form your
target audience.
• Competitors: The climate, or context, section concentrates on external factors that
aren't controlled by your business.
• Collaborators: Every individual or organization that works to create, produce, promote

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 or sell your products or services.
• Climate: The climate, or context, section concentrates on external factors that aren't
controlled by your business.

Customer Life Cycle - CLC

A customer journey represents the overall path an individual takes from awareness to
consideration and conversion. It describes the progression of steps a customer goes through
when researching, considering, purchasing, using, and remaining loyal to a product or
service.

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Buying Motives
Buying Motives are the reason(s) an individual buys the goods and services they choose.

• Emotional - Based on feelings and emotions

This is based upon the principle that consumers wish to seek pleasure and avoid
pain. Consumers prefer emotions such as love, adoration, passion, and happiness,
whereas they avoid emotions such as guilt, fear, or anxiety.

• Rational - Based on facts and logic

These include factors such as saving time or money or obtaining the highest quality
or greatest value. Rational buying motives influence many purchases but are highly
pertinent for expensive purchases.

• Patronage - Based on loyalty

This motivates people to buy from a specific business or brand based on previous
experiences or a strong identification with the product or service. Sometimes the
customer may even pay a little extra to showcase their support for the brand.

Sales Funnel
A sales funnel works to turn visitors into leads and leads into customers. Basically, it is
derived from critical consideration of various important touchpoints of CLC. It illustrates the

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idea that every sale begins with many potential customers and ends with a much smaller
number of people who make a purchase.
Hence, every business must carefully design a strategy for each funnel stage to retain as
many people as possible.

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Marketing Strategies

• Push Marketing: A push marketing strategy aims to 'push' your product to a specific
target audience. Consumers are persuaded to view the company's offerings through
various active marketing strategies. It requires more marketing efforts.
• Pull Marketing: It draws customers toward your product through R&D investment in
NPD (New Product Development) that can generate its demand. The idea is to make
the consumer actively look for the product. It requires less marketing effort.
• Guerilla Marketing: It is a promotion tactic wherein a company employs surprise
interactions and unconventional ideas to catch people's attention and drive interest in
the brand.
• Surrogate Marketing: It is a type of marketing that imitates the branding of one
product to market another under the same brand. Alcoholic beverages, whose ads are
prohibited, adopt this strategy by disguising themselves as another product with the
same brand name.

• Stealth Marketing: It is advertising something to a person without them realizing

they're being marketed to. For example, the subtle usage of branded products by
celebrities in movies subconsciously makes an impression in our minds.
• Affiliate Marketing: It is the process by which an affiliate earns a commission for
marketing the products of a company. Simply put, the affiliate promotes the product
and earns profit from each sale, tracked via affiliate links from one website to another.

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MARKETING MODELS

• AIDA Model

• Ansoff Matrix

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 • Porter's Five Forces Model:

A Glimpse of Digital Marketing

1. SEO (Search Engine Optimization): It is the process of making changes to your

website to make it more visible when customers use search engines like Google,
Bing, and others to look for products or services related to your business.
2. SEM (Search Engine Marketing): It is a digital marketing strategy used to increase
the visibility of a website in search engine results pages (SERPs). It is also referred
to as paid search or pay-per-click (PPC).
3. SMM (Social Media Marketing): It is the use of social media platforms on which
users build social networks and share information. It aims to build a company's
brand, increase sales, and drive website traffic.
4. Bounce Rate: Bounce Rate is the percentage of visitors that leave a webpage
without taking action, such as clicking on a link, filling out a form, or making a

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 purchase.
5. Cost per acquisition (CPA): Also known as (CPC) Cost Per Conversion, it is a
growth marketing metric that calculates the aggregate cost of a user's conversion-
producing action.
CPA = Total Advertising Cost/Total Number of Conversions
6. Click-Through Rate (CTR): It is used to gauge how well your keywords and ads,
and free listings, are performing. CTR is the number of clicks your ad receives divided
by the number of times your ad is shown clicks/impressions = CTR.
7. Lifetime value (LTV): Customer lifetime value is the total worth of a customer to a
business over the whole relationship period.
8. Net Promoter Score (NPS): NPS stands for Net Promoter Score. It's a customer
satisfaction benchmark that measures how likely your customers are to recommend
your business.
9. A/B Testing: A/B testing is a marketing strategy that pits two different versions of a
website, landing page, advert, email, and popup, against each other to see which is
most effective. Example: testing two different Google ads to see which drives more
responses.
10. Conversion Rate: Conversion rates are mainly used in digital marketing to evaluate
performance of website traffic, marketing campaigns and conversions. To calculate
a conversion rate, the number of conversions is divided by the total number of
visitors on the website/ad.

SUSTAINABLE MARKETING
It is an approach to marketing that considers the environmental and social impact of a
company's products or services. It considers the needs of both the present and future
generations. Some other strategies that contribute to similar ideologies are:

CAUSE MARKETING

It is a marketing method wherein businesses align themselves with social issues or beliefs
that are important to them and design a campaign accordingly. Brands use this strategy to
bring awareness to a cause and show social responsibility. For example, Myntra's 2019
Fashion Upgrade campaign in collaboration with Goonj.

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DEMARKETING
It is a process in which a company develops strategies to reduce the demand for a product.
While traditional marketing often encourages customers to purchase more products,
demarketing aims to limit a product's reach due to a shortage in supply, minimize harm to
people, or maintain exclusivity. Examples: Patagonia's "Don't buy this jacket" campaign and
Amazon Prime's Diwali commercial that encouraged people against binge-watching their
favourite shows and instead spending time with their family and loved ones.

SOCIAL MARKETING
It is an approach used to develop activities and campaigns aimed at changing or maintaining
people's behaviour for the benefit of individuals and society as a whole, i.e., the "common
good". For example, health hazard labels on cigarette packets(anti-smoking), recycling of
cans/bottles (Coca-Cola), accessible services for the disabled (McDonald's), or advocacy
against gender discrimination (Hero).

TRENDS IN MARKETING

● Short-form Videos Applications

Short-form video applications such as TikTok, Instagram Reels, and Shorts are
gaining popularity in marketing. Brands use these videos to promote their products,
share behind-the-scenes footage, and generate branded content to connect with
younger audiences and build brand awareness.
● Micro-moment marketing:
Micro-moments in marketing refer to discrete moments when consumers use their
mobile devices to seek information, find inspiration, or make a purchase. These
moments can occur throughout the customer journey. Examples of micro-moments
in marketing include: "I want to know," "I want-to-do," "I want-to-go," and "I want to
buy".
● Personalization:
Personalization is a marketing strategy that utilizes data and technology to adapt
messaging and customer experiences to specific individuals. This strategy enables
brands to generate more relevant and engaging customer interactions, enhancing
engagement and conversion rates.

• CGI Marketing:
CGI or Computer-Generated Imagery refers to the art of creating lifelike visual

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 content using advanced computer software and cutting-edge graphics. Example:
the Maybelline Sky High Lash CGI campaign, showcases giant mascara wands and
tubes applying the product in larger-than-life scenarios – such as the front of a
London underground tube train and double decker bus.

● Artificial intelligence (AI)

Artificial intelligence is becoming increasingly important in the marketing toolbox,
with new use cases in marketing emerging all the time. Here are a few examples of
how AI is being used in marketing today:
▪ Predictive analytics: AI-powered predictive analytics can analyze customer data
and predict future behaviour for brands to leverage it as a part of market research.
▪ Personalization: Personalized customer experiences, such as customized
product recommendations and personalized email campaigns, can be created.
▪ Chatbots and virtual assistants: AI-powered virtual assistants can engage with
customers in real-time, providing personalized assistance. This includes natural
language processing (NLP) capabilities, which allow chatbots to understand and
respond to customer inquiries.
▪ Digital Advertising: Programmatic advertising allows brands to optimize their
campaigns in real-time by analyzing consumer behaviour, audience
demographics, and ad performance.
▪ Content creation: AI-powered content generation creates various types of
content, such as product descriptions, blog posts, and social media updates. This
can help brands to create more engaging and relevant content at scale.
▪ Marketing Automation: AI-driven marketing automation helps automate
repetitive and time-consuming tasks such as lead scoring, lead nurturing, and
customer segmentation. This allows brands to spend more time on strategic
planning and creativity.

COMMONLY ASKED QUESTIONS (CAQs)

1. Why are you interested in a career in marketing?
2. Describe how your competencies are suitable for Marketing.
3. What is the difference between customer and consumer?
4. What is the difference between need, demand, and want?
5. What is the difference between B2B, B2C and D2C Marketing?
6. What are some Sales Promotion techniques?

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7. How do you stay up to date with general marketing knowledge and trends?
8. Which is your favourite advertisement or brand campaign, and why?
9. Which company's marketing strategy do you like? Tell us about their recent campaign.
10. How do you measure a successful campaign?
11. Can you name a company that failed in its marketing strategy?
12. Can you name a product that failed and if you were to launch it now, how would you do
it?
13. Tell us about a recent marketing controversy.
14. Are you aware of the rules set up by the Government for influencer marketing?
15. How do you envision Metaverse evolving brand marketing strategies in the future?
16. Which brands have recently created a presence in the Metaverse in any manner?
17. If you were to setup your brand in Metaverse, how would you do it?
18. Name five essential elements of a marketing campaign
19. What is the difference between Online Marketing and Digital Marketing?
20. How do you think Social Media Marketing is shaping business?
21. What is branding and brand management according to you?
22. What are your thoughts about CRM?
23. Design a 'GTM - Go to Market' strategy for a new startup in the sustainable fashion
industry.
24. Name a few outstanding marketers in the business.
25. Can you name 5 Indian CMOs?
26. What is your take on the role of 'Ethics' in Marketing?
27. Are you aware of the ASCI Code?
28. Do you think Generative AI can replace the role of marketers?
29. Which brands do you dislike and why?
30. What is Customer Value Proposition (CVP)?
31. Prepare questions related to your work experience in the marketing domain.
32. Do you think that all the brands or stores including the small retail stores also need to
shift to online marketing in order to survive in the market?

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GENERAL TIPS
• Try to show why are you really interested in the domain/course.

• Try to relate concepts to any of your professional or personal experience.

• Focus on the current marketing trends that will be relevant in the future.

EXTRA SOURCES
▪ https://www.instagram.com/madovermarketing_mom/
▪ https://www.instagram.com/marketingmind.in/
▪ https://www.youtube.com/user/coldfustion
▪ https://www.ipay88.com/5-best-market-challenger-
strategies-that-you-need-to-know/

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ECONOMICS

NIVESHAK
The Finance and Investment Club
INTRODUCTION

Economics is the study of how people allocate limited resources for production, distribution,
and consumption, both individually and collectively.
It studies the effects of various indicators on consumer sentiment, consumer demand, and
the overall growth of a country. It also examines how the Government and Central Bank use
their respective policy decisions to try and achieve steady growth and price stability.

The two branches of economics are Macroeconomics and Microeconomics.

Microeconomics Vs. Macroeconomics

MACROECONOMICS MICROECONOMICS
Macroeconomics studies a nation’s economy, Microeconomics studies individual
as well as its various aggregates. economic units.
Macroeconomics is the study of aggregates Microeconomics primarily deals with
such as national output, income, as well as individual income, output, price of goods,
general price levels. etc.

It focuses on upholding issues like It focuses on overcoming issues

employment and national household income. concerning the allocation of resources
and price discrimination.
It accounts for the aggregate demand and It accounts for factors like the demand
supply of a nation’s economy. and supply of a particular commodity.
The primary component of macroeconomic It also focuses on issues arising due to
problems is income. price variation and income levels.
It helps determine the equilibrium levels of It helps to point out how equilibrium can
employment and income in the nation. be achieved at a small scale.

DEMAND & SUPPLY, MARKET EQUILIBRIUM, MONEY, NATIONAL INCOME,

AND RELATED TERMS

• Demand – The willingness to buy and ability to pay for a product at a given price and a
given period is referred to as demand. The law of Demand states that ceteris paribus
quantity demanded for a product is inversely proportional to the price of that product, i.e.,
for a higher price, demand falls. For a low price, demand rises. The demand curve is a
downward-sloping curve.

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• Supply refers to the total amount of goods available to consumers at a given price and at
a given period. The law of Supply states that ceteris paribus quantity supplied of a product
is directly related to the product's price, i.e., at a higher price, the supplier will supply more
goods, and at a lower price, the supplier will supply fewer goods. The supply curve is an
upward-sloping curve.

• Equilibrium – Demand and Supply curves intersect at a certain point at a given price and
quantity to give an equilibrium price and quantity where both the buyer and the seller agree
to buy and sell goods and services.

• GDP- Gross domestic product is the market value of all the final goods and services newly
produced within the country during a given period. It is a measure of the economic activity
of a country during a given period. There are three methods to measure the GDP:
1. Product method- It measures the economic activity by adding the market values of
goods and services produced, excluding any goods and services used up in
intermediate stages of production. It makes use of the value-added concept. The
value-added of any producer is the value of the inputs subtracted from the value of
the output it purchases from other producers. The product approach computes
economic activity by summing the value added by all the producers.
2. Expenditure method- This method measures the economic activity by adding the
amount spent by all the ultimate output users.
a. GDP = C+I+G+NX
b. C = Consumption
c. I =Investment
d. G = Government expenditure
e. NX= Net exports
3. Income method- The income method measures the economic activity by adding all
the income received by the producers of output, including wages received by the
workers and profits received by the owners of the firms.

• GNP- Gross national product is the market value of all the final goods and services newly
produced by the domestic factors of production during a given period.

• Net factor payments from abroad is the income paid to the domestic factors of
production from the rest of the world minus the income paid to the foreign factors of
production by the domestic economy.

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 GNP = GDP+ Net factor payment from abroad

• Real and Nominal GDP

Real GDP, also known as the constant dollar GDP, measures the physical volume of
an economy's final production using the prices of a base year.
Nominal GDP refers to the monetary value of an economy's final output measured at
current market prices.

• Inflation- Inflation is defined as the persistent rise in the price level in the economy. The
Consumer Price index (CPI) is used to measure inflation.

• CPI- The consumer price index is based on the concept of a basket of goods. It measures
the difference in the price level of the weighted average basket of goods and services
purchased by the households compared to the base year. The basket consists of a) food
and beverages, b) pan, tobacco, and intoxicants, c) clothing and footwear, d) housing, e)
fuel and light, and f) miscellaneous. The current base year for CPI is 2011-12.

• WPI- The wholesale price index captures the change in the price level at a wholesale level,
i.e., at stages before the retail level. The base year used for computing the WPI in India is
2011-12.

• Core Inflation – Core inflation reflects a change in the price of goods and services
included in the basket of goods except for food and energy/fuel.

• Cost-push inflation- Cost-push inflation is said to occur when the economy's overall price
level increases due to an increase in input prices. The reason for high cost of production
can be –
▪ Increase in the prices of raw materials – This increase may be due to an
increase in global commodity prices.
▪ Increased labour costs – The wages may rise when unemployment is low, and
the workers' is more than the employers, which may cause the workers to demand
higher wages. The high wages may also be due to an expectation of higher
inflation, which may cause the workers to demand high wages to maintain their
actual income.
▪ Higher tax imposed by the government- An increase in taxes may cause the

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 suppliers to pass the burden of taxes on the consumers in the form of high prices.
▪ A fall in the exchange rate – A fall in the exchange rate may increase the price
of imported raw materials, which may increase the price of the product. An increase
in the cost of production causes the sellers to increase the product's price to cover
their profit margins. This increases the overall price level in the economy, giving
rise to cost-push inflation.
• Demand-Pull Inflation occurs when the aggregate demand in the economy goes beyond
the aggregate supply. This excessive demand puts pressure on the prices, which causes
the overall price to rise unless it reaches an equilibrium level where the aggregate demand
equals the aggregate supply. The demand-pull inflation may occur due to:
▪ Depreciation of the currency- A depreciation of the domestic currency may make
the country's exports cheaper, thereby resulting in an increase in their demand.
▪ Fiscal stimulus- An expansionary fiscal policy of the government, for instance, a
decrease in taxes, would result in increasing the disposable income of the
consumers, thereby increasing the demand for goods and services in the economy.
▪ Expansionary monetary policy- An expansionary monetary policy, i.e., an
increase in the money supply, would decrease the interest rates, thereby
increasing the demand for loans and causing a rise in the prices.
▪ Improved business confidence – This may cause firms to raise prices and
increase profit margins. Demand-pull inflation is usually witnessed towards the end
of the boom period when the output expands beyond the country's normal capacity
to supply.

• Deflation - Deflation refers to a decrease in the general price level in an economy.

• Disinflation – Disinflation refers to an increase in inflation at a decreasing rate.
• Recession - Recession refers to a significant decline in a country's economic activity. It is
said to occur when a country's GDP declines for at least two consecutive quarters.
• Depression - Depression is defined as a sustained long-term decline in the economic
activity of a country. The decline in economic activity lasts for several years. The common
rule of thumb for depression is a 10 percent decline in the GDP.
• Stagflation - Stagflation is defined as an economic situation where economic growth is
slow and is accompanied by high unemployment and inflation levels.
• Aggregate demand - Aggregate demand is the total amount of goods demanded in the
economy. It is the sum of goods demanded for consumption, investment, government
spending and net exports.
AD= C+I+G+NX

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• Marginal Propensity to consume - Marginal propensity to consume is the increase in
consumption per unit increase in income.
• Money supply - It refers to the total stock of money in the economy. It is the sum of the
currency in circulation and the demand deposits.
• Quantity theory of money - The quantity theory of money gives the relationship between
the money supply and inflation. It states that an increase in the quantity of money in the
economy would result in an increase in the price level/inflation.
• Money market equilibrium - The money market equilibrium occurs at the interest rate,
where the quantity of money demanded is the same as the quantity of money supplied. If
there is a rise in the money supplied over the demand, the interest rate falls, which reduces
the cost of borrowing and causes people to accommodate the money injected into the
economy. If the money supply decreases, the interest rate rises, causing people to invest
money and hold less in their hands.
• Balance of Payment- Balance of payments records all the monetary transactions of a
country with the rest of the world during a given period. The three major components of
the Balance of payment account are the current account, capital account and financial
account.
a) Current Account- A country's current account records the exports and imports of
goods & services, net income from abroad, and net current transfers. The term
current account deficit refers to an excess of imports of a country over its exports.
b) Capital Account- A country's capital account records all the capital-related
transactions between the country and the rest of the world. The capital transactions
may include the purchase and sale of fixed assets, loans and borrowings, etc.
c) Financial Account- A country's financial account records transactions arising from
the purchase or sale of financial assets. The account includes two sub-accounts-
domestic owners of foreign assets and foreign owners of domestic assets.

Besides the current account, financial account and capital account, there is another
element in the BOP, Errors and Omissions, that acts as the balancing item of the
BOP, reflecting the inability to record all international transactions accurately.

• Importance of Balance of Payment

It helps the government take decisions on its fiscal and trade policies. It helps the
government analyse a sector's potential growth in export and formulate policies to
support that growth. It helps the government take measures of import and export tariffs.

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TYPES OF POLICIES

1. Monetary policy- The monetary policy refers to controlling the supply of money in the
economy. The task of controlling the money supply is taken up by the central bank of the
country. The monetary policy can be of two types-
• Expansionary monetary policy- The monetary policy is said to be expansionary
when the central bank increases the supply of money.
• Contractionary monetary policy – The monetary policy is said to be
contractionary when the central bank decreases the supply of money.

A country's central bank controls the money supply in the economy through the following
instruments:
a. Open market operations – It refers to buying and selling of bonds. When the central
bank intends to increase the money supply, it purchases bonds in exchange for cash,
and this results in an inflow of money into the economy. Contrary to this, in the case of
a contractionary monetary policy, the central bank sells bonds in exchange for money,
thereby reducing the flow of money in the economy.
b. A change in the reserve requirements - As per the central bank's directives,
commercial banks are mandated to maintain a specific proportion of the deposits as
reserves. The reserve ratio is the part of reserves a bank is mandated to hold against
deposits. A decrease in the ratio will allow the bank to hold less money as reserves
and lend more, thereby increasing the supply in the economy. An increase in the ratio
would have the opposite impact.
c. A change in the discount rate - The interest rate that the central bank charges
commercial banks for borrowing additional reserves is called the discount rate. An
increase in the discount rate would increase the cost of borrowing for commercial
banks, which would cause the banks to increase their interest rates. This would
eventually cause the public to borrow less, which would lead to a decrease in the
money supply. A decrease in the discount rate would have the opposite impact.

2. Fiscal Policy
Fiscal policy refers to the use of government revenue and expenditure to influence the
economy. The term 'Fiscal deficit' refers to an excess of government expenditure over its
revenue.
There are two types of fiscal policy.
• Expansionary fiscal policy - The expansionary fiscal policy aims at increasing

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 the aggregate demand in the economy by putting more money in the hands of
households and businesses. This policy is usually pursued at the time of a
recession. For example- Tax cuts and increased government spending.
• Contractionary fiscal policy - Contractionary fiscal policy aims at decreasing
the aggregate demand in the economy. This policy is pursued at the time of
inflation, for example-Tax increase or reduced government spending.

The tools used by the government to implement the fiscal policy (whether expansionary or
contractionary) –
a) Changes in government spending - increased spending on health, welfare,
education, infrastructure, capital goods, etc.
b) Changes in taxation – An increase/ decrease in the personal and corporate tax
rates, alter tax exemptions or tax credits and provide special tax incentives.
c) Automatic stabilizers - increased payments during times of economic downturns,
progressive taxation, etc.

The fiscal policy has a multiplier effect on the economy. The expansionary fiscal policy, for
instance, causes the GDP of the country to increase more than the increase in spending.
Similarly, in the case of a contractionary fiscal policy, the decrease in the GDP is more
than the decrease in government spending.

BUDGET TERMS
• Gross Domestic Product
GDP can be defined as the market value of all finished goods and services produced in a
country within a specific period.

• Direct tax
The tax that a person pays to the government directly is known as a direct tax. It covers
both personal and corporate taxes.
• Indirect tax
GST is a standard illustration of an indirect tax. The seller must pay tax to the government
on every sale of a good or service you make to them. They are, nonetheless, permitted to
charge you with GST to recoup the tax amount. The government eventually receives this
sum in a deposit. As a result, you are an indirect taxpayer because the vendor collects tax
from you and pays it.

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• Fiscal Deficit
Simply put, a fiscal deficit is a gap or deficit in the government's nonborrowed receipts
(income) compared to its outlays. The difference between the total government
expenditure and nonborrowed receipts is the fiscal deficit if the outlays exceed its receipts
(nonborrowed). It is usually presented as a percentage of the nation's GDP.
• Exchange Rate
An exchange rate determines the cost of exchanging one currency for another and impacts
international trade and money transfers.
• Fixed exchange rate
A fixed exchange rate occurs when a nation links the value of its currency to another widely
used good or currency. In international trade, the dollar is the most widely used
currency. The U.S. dollar is the current benchmark for most fixed exchange rates. A nation
may also peg its currency to that of its principal trading partners.
• Floating exchange rate
The supply and demand of currencies in the foreign exchange market set a floating
exchange rate. Since the international currency market's supply and demand factors are
allowed to operate freely, it is also known as the "free exchange rate."

RBI RATES
• Repo Rate
The rate at which a country's central bank lends money to the commercial banks in the
country. The current Repo rate for India is 6.5% (as of December 2023)
• Reverse Repo rate
The rate at which a country's central bank borrows money from the commercial banks in
the country. India's current Reverse Repo Rate is 3.35% (December 2023).
• Statutory Liquidity Ratio (SLR)
It is the minimum percentage of deposits that a commercial bank must maintain in the form
of liquid case, gold, or other securities. India's current SLR is 18.00% (December 2023).
• Cash Reserve Ratio (CRR)
It is the minimum percentage of the deposits that all commercial banks need to hold as
reserves with the central bank. India's current CRR is 4.50% (December 2023)
• Marginal Cost of Funds based Lending Rate (MCLR)
It is the minimum interest rate below which financial institutions cannot lend, except in
certain cases. The current MCLR (overnight) is 8%. (December 2023)

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TYPES OF MARKETS

Perfect Monopolistic
Oligopoly Monopoly
Competition Competition
Numbers of No barriers Slight barrier High barrier Very high
Firms barrier
Barriers to No control - Slight control High control since few Very high
entry price taker firms control since
many
suppliers are
available.
Price Control No control – Slight control Depends – high when High control
of Inputs Price taker large players engage
in cartelization, low
when competitors
engage in price wars
Price Control Homogenous Differentiated Differentiated Single
of Products products products products company – its
own products
Product Ideal scenario Restaurants Airline manufacturers, Electricity
Features but vegetable Oil producing nations supplier (in
sellers can be a (OPEC) some states)
good example
Examples No barriers Slight barrier High barrier Very high
barrier

SUSTAINABILITY AND ECONOMICS

Economic growth can be fostered by investing in opportunities that promote sustainability.
Policies can be used to find ways to invest in energy efficiency and alternative energy and
support businesses that recycle rather than discard waste. Commercial recycling will help
keep recyclable material out of landfills. Encouraging 'Green Building' policies will help reduce
energy consumption and use recycled content, thus saving money and reducing GHG
emissions. Policies like FAME – II, PLI Scheme, Battery Swapping Policy, Pradhan Mantri
Kisan Urja Suraksha, and Tax reductions are already helping India’s Green Energy and EV
sectors.

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QUESTION BANK –

1. What is the current GDP of the Indian Economy?

2. What is the current Repo rate, CRR, and SLR, and how does that impact the economy?

3. If given an option, would the banks prefer a CRR hike or an SLR hike?

4. The Indian GDP is predicted to reach the five trillion-dollar mark by 2024-2025. Given the
global economic scenario, is this a realistic target?

5. What steps has the Indian Government taken to promote sustainability and reduction in
carbon emissions?

6. What is the impact of currency depreciation on imports and exports?

7. How can the RBI intervene and curb Rupee depreciation if required?

8. Has India saved capital because of the oil purchased from Russia? If yes, how much?

9. How has the Rupee performed against the currencies of other economies?

10. How does a change in the Repo Rate help curb inflation?

11. What is the crowding-out effect, and how is it related to government spending?

12. How does cash inflow into the country affect the currency rate?

13. What is the difference between FDI and FII?

14. What is a recession?

15. What is meant by inferior goods?

16. Explain the price elasticity of demand.

17. What is a liquidity trap?

18. What is stagflation?

19. What do you mean by fiscal policy?

20. Impact of G20 Summit on Indian economy?

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 HUMAN
RESOURCES

usHR
The HR Club
HUMAN RESOURCES

The role of Human Resources has undergone a significant transformation over the last few
decades, shifting from a primarily administrative function to a strategic one. Previously seen
as administrators dealing with strikes and bonuses, HR professionals now play a crucial role
in high-level strategic discussions.

The change reflects a growing recognition of the value of human assets in organizations and
the need to ensure the presence and motivation of talent. This shift signifies a departure
from the traditional HR model, emphasizing a proactive and strategic approach that aligns
human capital initiatives with overall business objectives for organizational success.

Thus, HR refers to all the activities related to an effective employer-employee relationship.

The doors of HR are open for both specialists and generalists. In HR, there is something for
just about everyone. The responsibilities of an HR practitioner vary from organization to
organization, depending on the organization's size.

TYPES OF HR ROLES

1) HR Generalist
HR generalists work in organizations in various functions such as recruiting, learning &
development, onboarding, compensation and benefits, diversity and inclusion, legal issues,
personnel policies, and procedures in HR. Generalist roles exist across various sizes of
organizations, such as-
• Entry-level HR Generalist job titles: HR Assistant, HR Coordinator
• Mid-career (requiring at least 1-3 years’ experience) HR Generalist job titles: HR
Generalist, HR Manager

• Advanced (requiring 5+ years' experience) HR Generalist job titles: HR Business

Partner, Chief Human Resources Officer (CHRO)

2) HR Specialist
HR specialists support large organizations in specialized functions within the HR domain. HR
specialists use vast knowledge of their specific functions and experience to focus on a
particular area of work. Specialist roles usually exist in large organizations. Examples of HR
Specialist roles are:

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 • Talent Acquisition Specialist
• Human Resources Information Systems (HRIS) Manager
• Chief Diversity Officer
• Onboarding Specialist
• Compensation Analyst

3) Talent Acquisition Role

The Talent Acquisition role involves sourcing and recruiting non-technical professionals for a
dynamic environment. Key responsibilities include:
• Collaborate with hiring managers to understand hiring needs and develop effective
recruitment strategies for technical and non-technical positions.
• Identify talent pools using various sourcing techniques, including job portals, social
media, networking events, and industry-specific forums.
• Review resumes, screen candidates, and conduct initial phone interviews to assess
qualifications and cultural fit.
• Track and maintain accurate candidate data and recruitment metrics, providing
regular reports and insights to the Hiring Manager.
• Collaborate with cross-functional teams to streamline processes and enhance
candidate experience.
• Stay updated on industry trends, emerging technologies, and talent market dynamics
to offer insights and guidance to hiring managers.

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SOME COMMON FRAMEWORKS USED IN THE FIELD OF HR

MBTI – Myers Briggs Type Indicator

MBTI (alternatively Jungian function theory) is a framework that utilizes four functions further
subdivided into two each. These eight sub-functions are called 'cognitive functions'. The
use of this model and knowledge of cognitive functions that form personality types can help
individuals, teams, and organizations to accentuate strengths and curb weaknesses. It can
help them understand how one's as well as others' values and beliefs are formed as per the
cognitive framework to enable better interaction & collaboration and enable people to
determine their path of growth.

The following are the 16 personality combinations under MBTI -

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Maslow's Hierarchy of Needs
Maslow's Hierarchy of Needs is a theory of psychology that attempts to explain human
motivation. Maslow posits that humans have different levels or stages of needs based on
their current life situation and do not move on to higher-level needs before the lower-level
ones are fulfilled. While Maslow never used a pyramid to depict his theory, the pyramid
illustration is widely used to explain his theory and is popular. A human being is said to be
fulfilled once all needs are satisfied.

Emotional Intelligence
Emotional Intelligence is the ability to understand and manage one's emotions in positive
and effective ways, which can be used to communicate in a better manner with people,
resolve conflict and handle stress.
According to Daniel Goleman, the five components of Emotional Intelligence are-
1. Self-awareness
2. Self-regulation
3. Motivation
4. Empathy
5. Social skills

Self-awareness refers to the ability to understand oneself and one's own emotions, whereas
self-regulation is concerned with exercising control over negative aspects of one's emotions.
Motivation implies the willingness to channel and use one's emotions positively. Empathy is
the ability to understand and relate to other people's emotions. Lastly, social skills deal with

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a person's ability to communicate and interact effectively, form connections, and build social
networks.

Big 5 Model
The Big 5 model is a grouping of personality traits under the umbrella of psychological trait
theory. The Big 5 model identifies five factors which are as follows-

1. Openness to New Experiences (Openness and Intellect)

● High: Curious and open-minded
● Low: Conservative and focused
2. Conscientiousness (Industriousness and Orderliness)
● High: Organized and dutiful
● Low: Messy and careless
3. Extraversion (Assertiveness and Enthusiasm)
● High: Outgoing, go with the flow
● Low: Reserved, less likely to go with the flow

4. Agreeableness (Politeness and Compassion)

● High: Friendly, easygoing, and empathetic

● Low: Straightforward, able to negotiate for oneself

5. Neuroticism (Volatility and Withdrawal)

● High: Nervous, anxious, able to see red flags early

● Low: Stress-resistant, less likely to see red flags early

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7 BASICS OF HR

1) Recruitment and Selection - Although these terms are often used together, there is a
difference between them. Recruitment involves getting the maximum number of potential
candidates on board for the interview and other processes through advertisements and
announcements about the job vacancy. On the other hand, the selection is concerned with
carefully screening the candidates to identify and select the most appropriate candidate for
the job role.

2) Performance Management – This step follows recruitment and selection. Performance

management is keeping track of the efficiency of the employees to help them become the
best version of themselves. Under this system, employees are provided feedback on their
pre-specified roles and responsibilities to reach their best performance.

3) Learning and Development – The internal and external environment of the Company is
changing rapidly; thus, it is the organization's responsibility to ensure that its employees
continually learn, grow, and adapt to these changes. Learning and Development help
employees to reskill and upskill. An employee should be provided with enough resources to
equip them with changing processes, technology, and methods.

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4) Succession Planning – It refers to having a contingency pool of candidates with the
required skills and abilities to fill a vacant position quickly. Although an organization should
have the necessary pool of candidates to fill any vacant job position, succession planning is
usually done for senior-level management positions. For example, if a crucial manager quits
their position, the organization should have a replacement body to fill that position to avoid
losses.

5) Compensation and Benefits – – Fairly compensating employees for their services is

crucial in attracting and retaining them. It is one of the most critical functions of an HR
Department. Although salary hikes, additional benefits, and other perquisites should be
provided to employees to motivate them, all these should be done considering the budget
and the company's profitability.

6) Human Resource Information System – It is a tool to facilitate all the HR Functions

discussed above. For example, recruiters use ATS or Application Tracking System for
recruitment and selection procedure, LMS or Learning Management System for learning and
Development, etc. When all these Information Systems are integrated into one system, it is
referred to as the Human Resource Information System.

7) HR Data and Analytics – HR today has leaped to be more data-driven. HRIS, or Human
Resource Information System, works as a data entry system. HRIS handles a lot of data,
and proper analysis and tracking of such data provide valuable insights, which can then be
used to make more informed decisions.

ATTRITION RATE
Employee Attrition Rate or Churn Rate is the resignation or retirement of a certain
percentage of the current employee base without the intention of filling up the vacant
position thus created. Attrition, in general terms, means weakness and thus carries a
negative connotation. However, attrition in a company or a firm is not always necessarily
disadvantageous and can have certain benefits.

Attrition is the opposite of retention. If the company does not correctly anticipate the attrition
rate, it can prove to be quite costly for the company. Cost increases more so in the case of
skilled jobs. If old and skilled employees start leaving the company, that is a bad sign for the
productivity and advancement of the company. Although the terms attrition and turnover are
often used interchangeably, there is a difference in context. Attrition talks about the number

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of employees who leave, and their vacant position is not filled; however, turnover talks about
employees who leave and their positions are replaced with new staff.

MANAGEMENT BY OBJECTIVES
Management by Objectives (MBO) is a personnel management technique and a model of
strategic management that aims to enhance the productivity and the operational efficiency of
the organization by clearly setting, recording, and measuring the objectives of the
organization that are mutually agreed upon by both the management and the employees of
the organization.

Process of Management by Objectives:

1) Goal Setting: In the very first stage of the process, the long-term goals of the
organization are clearly defined and include concepts like strategic intent, mission, values,
and vision. Once these goals are defined, the management defines the specific objectives to
be achieved within a particular period.

2) Action Plan: Once the goals and objectives are laid out, the next step is formulating a
step-by-step process or roadmap for achieving those objectives. The action plan the
directions regarding how the objectives can be achieved.

3) Performance Appraisal: In this stage, a comparison is made between the actual

objectives realized so far and the preset objectives to be achieved. It helps a company to
keep track of its progress and take action if the deviation between the actual and the
standard objective is large.

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EMPLOYEE ENGAGEMENT
Employee engagement can be defined as the level of commitment of an employee towards
the organization. It refers to the dedication and enthusiasm an employee feels towards their
job.
Engaged employees are intrinsically motivated and care about their work. They think they
are making an impact, and such employees experience fewer cases of work burnout. It is a
crucial concept to properly understand the level of relationship, both at the qualitative and
quantitative level, between the organization and its employees.
There are many strategies to keep an employee motivated and engaged. Some recognize
good work, provide meaningful and challenging tasks, and be fair and realistic.

360-Degree Feedback Mechanism

The 360-degree feedback mechanism allows employees to receive feedback from various
groups of people and use such feedback to further work on their shortcomings. Under this
feedback system, an employee receives feedback from managers, peers, direct reports,
subordinates, and, in some cases, external stakeholders, such as customers and suppliers.
360-degree feedback includes comments from peers, reporting staff members, supervisors,
and managers, in contrast to traditional feedback from a single source. Utilizing a diversity of
viewpoints, this method aids employees in understanding their strengths and weaknesses.

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9 Box Grid
A very useful tool in the talent management area of HR, which divides employees into nine
groups based on their performance and potential metrics. The employee's current
performance and efficiency are considered, and the employee's future working potential and
expected display of efficiency are considered.
It helps the organization's management to develop different approaches for different kinds of
employees. High-performing employees, for instance, are always desired in a team. In
contrast, low-performing employees are given extra attention, and effort is made to increase
their competency through the tool of Learning and Development.

Sustainability and Human Resource Management

Sustainability has been defined in various ways. There are many definitions of sustainability
provided by renowned writers and authors incorporating multiple dimensions. But to define it,
"Sustainability refers to all the acts directed towards meeting the needs of the present
generation without compromising upon the needs of the future generation." It requires an
individual, a group of people, or even an organization to be responsible for their actions.
ESG framework includes Environmental, Social, and Governance criteria for a sustainable
environment. But HRM or Human Resource Management is equally important in creating a
sustainable environment. In human resource management, "sustainability" describes human
resources prioritizing a solid workplace culture and human and social outcomes over
financial goals and performance.

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Integrating HRM with sustainability provides the following advantages to the organization:
• An organization that practices sustainability is more likely to attract top talent.
Employees today like to work with an organization that implements sustainable
practices and prefers ethics over profits to create a better world. Thus, overall, it
helps an organization build better teams.
• An organization that is sustainable in its activities automatically creates a competitive
advantage. Competitors cannot duplicate the expertise acquired through the growth
and development of personnel to prevent environmental damage.

• Practicing sustainability helps an organization develop a positive culture. Such

practices strengthen the very roots of the organizations and help the HR Department
to successfully implement other positive practices like DEI or Diversity, Equity, and
Inclusion.

TRENDS IN HR

1) HR in the Metaverse
Metaverse is a virtual or alternate universe where digital avatars represent people who can
come together regardless of where they are physically located. Although it has yet to be
integrated with HR completely, the future of their integration looks promising, and few
present glimpses reassure that. There is a prediction that most HR processes will be
integrated into the Metaverse. Some of them are –

A) Talent Acquisition – This is one of the HR functions already underway. Virtual interviews
and virtual tours are two of the functions already happening. In the future, the entire
recruitment process will be done on the platform provided by Metaverse, starting from the
first introduction of the candidate to the final onboarding into the organization.
B) Work Structure – Physical meetings and conferences will be a thing of the past once
they start happening in the virtual mode on Metaverse. The Metaverse will change how we
engage at work by promoting interactions utilizing hands-free gadgets and avatars rather
than laptops and cellphones, making group talks and collaborations more immersive.
C) Learning and Development – With virtual reality, Metaverse in HR may provide
engaging learning experiences for staff members. Employers can teach & educate
employees by assisting them in practicing real-life events in the VR format to prepare them,
increasing employee performance by 70%.

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2) Hybrid Work Model
After COVID-19, organizations worldwide have realized the importance of adopting a hybrid
work model to give importance to the mental well-being of their employees. A hybrid work
model means a mix of in-office and remote working environments. Several big corporations
worldwide are increasingly developing creative policies to allow employees to work from the
comfort of their homes.

3) Focus now is more on DEI

For some time now, most companies have been using the keywords diversity, equity, and
inclusion, for a good reason. Initiatives related to DEI are a part of efforts to address
challenges in the workplace, such as bias, discrimination, harassment, and unfair pay. The
shift from in-person to virtual and hybrid work environments has raised the need for DEI.

4) HR analytics
HR analytics, also referred to as people analytics, workforce analytics, or talent analytics,
involves gathering, analyzing, and reporting HR data. It enables your organization to
measure the impact of a range of HR metrics on overall business performance and make
decisions based on data. In other words, HR analytics is a data-driven approach to Human
Resources Management. HR analytics is a fairly novel tool. This means it is still largely
unexplored in scientific literature. By applying complex statistical analyses, HR can predict
the future of the workforce. This enables managers to measure the financial impact of
Human Resource practices. Measuring the impact of HR on bottom-line performance is the
“holy grail” of HR data analytics. This is often done by calculating a Return on Investment
(ROI). It is the most powerful way for HR to increase its strategic influence.

COMMON QUESTIONS THAT ARE ASKED:

Q1. Tell me something about yourself, your family background, city, state, etc.
Q2. List down your academic and co-curricular achievements.
Q3. Have you worked in a group? What was the outcome, and what were your contributions
& learnings?
Q4. Why do you want to join this institute? What, according to you, makes this institute
unique?
Q5. What other calls do you have? If you convert X institute, would you still choose our
institute over X?
Q6. How do you deal with criticism?

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Q7. What are the qualities of a Leader? What is the difference between a Leader and a
Manager?
Q8. How do you think your academic background will help you in your career in HR?
Q9. What are the three most important qualities in an HR manager according to you?
Q10. Since workplace culture has changed drastically in the last few years, what is your
definition of an ideal workplace culture?
Q11. What is Self-Actualization for you? At which stage of Maslow's Hierarchy of Needs do
you think you are currently?
Q12. Is there a difference between a group and a team? Do you consider yourself a team
player?
Q13. Have you managed or led a group of individuals from diverse backgrounds? If so,
could you tell us about your experience?
Q14. What is your view on the mass layoffs happening currently? Q15. Tell us two things
you do not like about the world of HR.
Q16. The Candidate before you was a National Level Sports person with excellent academic
records and thus would contribute greatly towards building diversity in the batch. Give us
three reasons why we should still be selecting you.

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ANALYTICS

bITeSys
The Systems and Analytics Club
PRODUCT MANAGEMENT

Product management is a cross-functional field that involves working with product users to
identify their pain points and fix their issues by developing a comprehensive plan. A Product
Manager defines product success and rallies a team to achieve it. Product managers must
collaborate with engineering, design, marketing, and sales to turn consumer feedback into
usable features. Product managers must also do market research, monitor product
performance using metrics, and make data-driven choices to guarantee product success.
Product Management integrates technology, business, and design. Product managers
deliver exceptional products and oversee their overall quality, making it a promising career
option.

ANALYTICS

Analytics analyzes data to make informed decisions. It analyzes data, finds patterns and
trends, and predicts future occurrences using statistical methods. Analytics has applications
in banking, healthcare, retail, and technology. Analytics may be used, for instance, in
banking to spot fraudulent transactions and forecast market trends. By recognizing patterns
in patient data, analytics can be utilized to enhance patient outcomes in the healthcare
industry. In retail, analytics may improve pricing and inventory management. In technology,
analytics increase software and system performance.

DIFFERENT KINDS OF ROLES IN TECH AFTER MBA

MBA graduates can pursue a variety of roles in the IT industry, such as:

1. Project management roles, where they can lead and oversee the execution of IT
projects.

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 2. Product management roles, where they can help shape the development and
positioning of technology products for customers.
3. Business development roles, such as IT Sales.
4. IT Consulting roles, where they can use their business and IT knowledge to advise
clients on technology strategy and implementation.

Since Product Management is commonly abbreviated as PM, it is often easily confused with
Project Management and Program Management. To differentiate these roles, we can say that
Product Managers are concerned with the ‘What’ and ‘Why’ of a product, whereas Project and
Program Managers are primarily concerned with the ‘How’ of a product/project.

Product Management Project Management

To deliver a specific project on time,

To develop and deliver a
Purpose within budget, and to the satisfaction
successful product
of the stakeholders

Specific projects with defined

Development of a product, from
Scope objectives, deliverables, and
idea to launch and maintenance
timelines

Role Product Manager Project Manager

Defining product strategy, Defining project scope, creating

conducting market research, project plans, managing resources,
Responsibilities
creating product roadmaps, and and ensuring project deliverables
overseeing product development are met

Skill requirements for a Product Manager:

A Product Manager needs to be well-versed with the industry specifics in which the product
operates and stay updated with the rapidly changing landscape to steer the product to succeed
in the market. He/she also needs to establish good lines of communication with the users of
the product and all the stakeholders associated with the product. It is also vital that the product
manager is good at coming up with creative and feasible solutions for the problems faced by
the users and envisioning the timeline and roadmap for the implementation of the solutions.
After implementation, he/she needs to know how to accurately track the performance and
success using the appropriate metrics so that decisions can be taken to improve the product
further.

Product Requirements Document

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A Product Requirements Document (PRD) is a document that outlines the specific
requirements, features, and functionality of a product and is updated as the product
development progresses. It is used to communicate the product vision and goals to
stakeholders, such as development teams, designers, and stakeholders. The PRD serves as
a blueprint for the development of the product and is a crucial document for ensuring that the
final product meets the needs of the users and stakeholders.

TYPES OF ANALYTICS

• Descriptive analytics: Descriptive analytics summarizes historical data in an

intelligible fashion. Answering "what has happened?" and "what is the current
situation?"

• Diagnostic analytics: This analytics digs into data to determine why something
occurred. It answers queries like "why did this happen?" and "what is the root cause
of this problem?"

• Predictive analytics: Predictive analytics employs historical data, statistical models,

and machine learning to anticipate future occurrences. It answers, "what will
happen?" and "what is likely to happen in the future?"

• Prescriptive analytics: This sort of analytics predicts the future and suggests
actions. It answers questions like "what should we do?" and "what is the best course
of action?"

• Cognitive analytics: This method analyzes text, pictures, and speech using natural
language processing, machine learning, and AI. This answers queries like "What are
people saying about this product/service?" and "How is the brand perceived in the
market?".

• Big Data analytics: It analyzes huge, heterogeneous data sets. It solves

complicated problems that standard analytics cannot.

• Real-time analytics: It processes and analyzes data in real-time. It makes rapid,

situation-based choices.

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Many companies utilize a mix of these analytics to better understand their company and
make choices. Analytics uses several tools and technologies, including:

• Data warehousing: Collecting, storing, and managing enormous volumes of data.

Analytics employs data warehousing, which may store data from databases,
spreadsheets, and log files.
• Data mining: Automatically extracting relevant data from data. Data mining may
uncover patterns, trends, and links in data and forecast future occurrences.
• Business intelligence: Tools and technology for data analysis and decision-making.
Dashboards, reporting, and visualization tools may produce reports, charts, and
graphs, and uncover data trends.
• Machine learning: This AI analyzes data and predicts future trends. Machine
learning algorithms can find data patterns and anticipate future occurrences. Any
organization's decision-making relies on analytics. It turns data into insights and
action, giving companies a market edge. MBA students must comprehend analytics
principles and tools to make better career selections.

Analytics plays an important role in the decision-making process for any organization.It
allows organizations to turn data into insights and action, providing them with a competitive
advantage in the market. As an MBA student, it is important to understandthe concepts and
tools of analytics to make better decisions in your future career.

ARTIFICIAL INTELLIGENCE

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 • Artificial Intelligence: Artificial Intelligence is the mechanism to incorporate human
intelligence into machines through a set of rules. It refers to the simulation of human
intelligence in machines that are programmed to think and learn like humans. This can
include tasks such as understanding natural language, recognizing images, making
decisions, and solving problems.
• Machine Learning: Machine Learning is the study/process which provides the
system(computer) to learn automatically on its own through experiences it had and
improve accordingly without being explicitly programmed. ML is an application or
subset of AI. ML focuses on the development of programs so that they can access
data to use it for themselves. The major aim of ML is to allow the systems to learn by
themselves through the experience without any kind of human intervention or
assistance.
• Deep Learning: Deep Learning is a sub-part of the broader family of Machine Learning
which makes use of Neural Networks (similar to the neurons working in our brain) to
mimic human brain-like behaviour. DL algorithms focus on information processing
patterns mechanism to possibly identify the patterns just like our human brain does
and classify the information accordingly. DL works on larger sets of data when
compared to ML, and the prediction mechanism is self-administered by machines.

DIFFERENT TYPES OF MACHINE LEARNING

There are three main types of Machine Learning: Supervised Learning, Unsupervised
Learning, and Reinforcement Learning.

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 1. Supervised learning is where a model is trained on labelled data, meaning that the
desired output or "label" is provided with the input data. The model then makes
predictions based on this input/output mapping. Examples include linear regression
and support vector machines.
2. Unsupervised learning is where a model is given input data without any
corresponding output labels. The model must find patterns or relationships in the data
on its own. Examples include k-means clustering and principal component analysis.
3. Reinforcement learning is a type of machine learning where an agent learns to make
decisions by interacting with its environment. The agent receives feedback in the form
of rewards or penalties for its actions and learns to optimize its behaviour over time.
An example is a computer learning to play a game by trial and error.

NATURAL LANGUAGE PROCESSING (NLP)

Natural language processing refers to the branch of computer science—and more specifically,
the branch of artificial intelligence or AI—concerned with giving computers the ability to
understand the text and spoken words in much the same way human beings can.

NLP combines computational linguistics—rule-based modelling of human language—with

statistical, machine learning, and deep learning models. Together, these technologies enable
computers to process human language in the form of text or voice data and to ‘understand’ its
full meaning, complete with the speaker or writer’s intent and sentiment.

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SUSTAINABILITY IN THE IT INDUSTRY
There are several ways to practice sustainability in the IT industry, including:

● Energy efficiency: Implementing energy-efficient hardware and software, as well as

using renewable energy sources to power data centres and other IT infrastructure.
● Resource conservation: Reducing the use of natural resources through virtualization,
cloud computing, and other technologies that can help optimize resource usage.
● E-waste management: Properly disposing of electronic waste and encouraging the
recycling of old equipment.
● Green procurement: Selecting products and services that have been developed with
environmental and social responsibility in mind.
● Telecommuting: Encouraging remote work and reducing the need for office space and
transportation.
● Sustainable software development: Use sustainable software development practices
such as Agile, Scrum, and DevOps, which can reduce the environmental impact of
software development.
● Sustainable data centre design: Designing data centres that are energy-efficient, use
renewable energy sources, and minimize the environmental impact of their operation.
● Sustainable software engineering: Using sustainable software engineering practices
such as Clean Code, SOLID principles, and Test-Driven Development (TDD) to
develop software that is more maintainable and less resource-intensive.

BLOCKCHAIN
In the fundamental sense, a blockchain can be defined as a ledger that is decentralized,
distributed, and public. A ledger is a transaction recording mechanism that maintains all
transactions and the details behind them. For example, a bank maintains a ledger of all the
transactions of money and the details of the account holders.

In the case of a blockchain, this ledger is decentralized, as in, the control of maintaining the
transactions is not under a central authority. A copy of the blockchain ledger is distributed
across multiple participating systems (called nodes), and there is no one central node or
authority that has the control to maintain it.

This mechanism of maintaining a ledger that is distributed across all the participating nodes is
called Distributed Ledger Technology (DLT). A blockchain is a DLT that utilizes cryptographic
methods to make the ledger immutable and secure.

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Structure of a Blockchain
The structure of a blockchain consists of a network of blocks where each block is used to
record transactions. Whenever a new transaction is to be recorded, a new block needs to be
created and added to the blockchain. This change is made to every copy of the blockchain
ledger in each of the participating nodes.

All the blocks in a blockchain are linearly connected, thus enabling a sequential record of all
transactions taking place. Any changes to existing accounts are always recorded in new
blocks rather than overwriting the existing blocks.

Each block in a blockchain consists of the following three elements:

● Hash (Unique identifier of the block)

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 ● Transaction details
● Hash of the Previous block (This acts as a link between the blocks).

Hashing and Mining in a Blockchain

A Hash is a mathematical output that is generated for a particular input. Whatever the
function's input, the result is always the same size. This protects the data's original length.
To add a new block to the blockchain, a new hash must be created, taking into account the
preceding block's hashed content and meeting specific constraints. This needs trial-and-
error and is resource-intensive.
Computing resources are used to construct hashes and create new blocks in mining. Energy
and computing power are used in this resource-intensive operation. The miners are
rewarded for their labour. This technique of hashing and mining to produce new blocks
prevents a single rogue actor from manipulating the network.

Consensus
To make sure no single rogue player has the unilateral ability to change the state of the
blockchain, a mechanism of consensus is implemented. The consensus mechanism makes
sure that any block or transaction that is to be added to the blockchain is agreed upon by all
the nodes unilaterally. This makes the blockchain mechanism reliable and secure.

There are many kinds of algorithms that can be used to implement the consensus algorithm.
One of the most commonly used algorithms to establish the consensus mechanism is called
Proof-of-Work. The Proof-of-Work algorithm implements a criterion for the generation of a new
block. A miner who wants to add a block to the blockchain needs to use computing resources
to solve a complex mathematical puzzle related to the hashing algorithm. Once they show the
proof of solving the puzzle, a block gets added to the blockchain, and the miner gets rewarded
for it.

Smart contracts
Blockchains are made more reliable and decentralized by the use of smart contracts. Smart
contracts are clauses and conditions written with lines of code that are distributed throughout
the blockchain. These contracts make sure that the process of taking decisions is automated
and does not lie within the authority of a central player.
This ensures that players in a blockchain are assured of pending transactions taking place
and can rely on the whole mechanism.

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Cryptocurrency
In order to facilitate peer-to-peer transactions without the need for a central authority,
cryptocurrency is a virtual or digital money that is created via blockchain technology.
Decentralization increases security and transparency since transactions are recorded on a
blockchain. Cryptocurrencies may be traded on exchanges and used to buy goods and
services, but their acceptability is restricted. Cryptocurrencies are volatile and may change
rapidly. They lack regulation, making fraud and hacking more likely than in conventional
investing. Bitcoin, Ethereum, Litecoin, etc. are popular cryptocurrencies.

EMERGING TRENDS:

METAVERSE
A metaverse is a virtual world or universe that exists entirely in the digital realm. It makes use
of virtual reality and augmented reality technology to give an immersive experience to the
users.
It is like a giant virtual playground where one can do pretty much anything he/she can imagine.
Think of it like a big video game where you can create your own character and explore different
worlds, play games, and hang out with friends. But instead of just playing on your computer
or phone, you can use special equipment like virtual reality headsets to feel like you're really
inside the metaverse. It's like a whole new world, separate from the real one, where you can
be whoever you want to be and do whatever you want to do.

Concept Definition

A virtual shared space where users can interact with each other and
Metaverse
with digital objects in a seemingly real and physical way.

Virtual Reality The use of technology to create a simulated environment.

Augmented The use of technology to overlay digital information on the physical

Reality world.

The process of creating digital representations of objects or

3D modelling
environments.

Avatars Digital representations of users in the metaverse.

The metaverse is considered one of the next important technologies that will have widespread
applications across various industries. The possibilities where the metaverse can be
implemented are endless, ranging from entertainment to recreation to education.

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Metaverse is becoming increasingly relevant in a world where almost all aspects of the
business world are shifting to online mode. It comes into the picture, offering an immersive
experience even though it is entirely digital. Users can have a satisfactory and holistic
experience without compromising the need for comfort and ease of access.
Several large technology companies, including Google, Microsoft and Facebook, are investing
heavily in the metaverse and developing their own platforms. Facebook even announced a
change in its name, renaming itself as ‘Meta’ to reflect its future ambitions and prioritize its
commitment to the field of Metaverse.

WEB 3.0
Web 3.0 majorly refers to the next generation of Web protocols and platforms that uses
technologies like blockchain, metaverse, artificial intelligence, etc.
One of the key features of Web 3.0 is the ability for users to have more control over their data
and privacy. Blockchain technology, which allows for decentralized and distributed networks,
is a key component of this. In contrast to Web 2.0, which is primarily centralized and controlled
by a few large companies, Web 3.0 is expected to be more decentralized, giving users more
control over their data and interactions.
Another important aspect of Web 3.0 is the use of artificial intelligence and machine learning
to create more personalized and intelligent online experiences. This could include things like
personalized search results, improved natural language processing, and more advanced
virtual assistants.
The semantic web is also an important aspect of Web 3.0, which will enable the internet to
understand and interpret the meaning of the information on it rather than just the text itself.
This will make it possible to create more intelligent and sophisticated online services, such as
those that can automatically understand the intent of a user's query and provide more accurate
results.

Applications of Web 3.0

One example of a Web 3.0 application is a decentralized marketplace, where buyers and
sellers can directly interact with each other without the need for a central authority or
intermediary. The transactions on the marketplace are recorded on a blockchain, providing
transparency and security for the parties involved. Additionally, the use of smart contracts
allows for the automatic execution of agreements, further reducing the need for intermediaries.
Another example is a decentralized social media platform, where users own and control their
own data and can monetize it, rather than having a centralized entity controlling and profiting
from user data.

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In both cases, the decentralized nature of these applications allows for more transparency,
security, and autonomy for the users, which are hallmarks of Web 3.0.

WEB 4.0 & 5.0

Web 4.0 and Web 5.0 are two hypothetical future generations of the Internet, each with
different features and capabilities. Web 4.0 is also known as the Intelligent Web, and it is
characterized by a shift from traditional static web pages to more intelligent, dynamic, and
interactive web applications. Web 4.0 is expected to be driven by intelligent agents that use
advanced AI and web technologies such as IoT, cloud computing, and big data analytics. Web
4.0 will enable web applications to process large amounts of unstructured data and derive
meaningful insights from it, delivering personalized content and services to users based on
their preferences, behavior, and context.
Web 5.0 is a concept proposed by former Twitter CEO Jack Dorsey to create a decentralized
web platform that allows users to own their data and identity. It combines the features of Web
2.0 and Web 3.0, using distributed ledger technology and blockchain. Web 5.0 will enable
users to control their data and identity on the Internet, without relying on intermediaries or
centralized platforms. Web 5.0 will also enable users to create value and participate in the
network through verifiable credentials, decentralized identifiers, and decentralized web nodes.

GENERATIVE AI
Generative AI is a branch of artificial intelligence that uses deep learning to create new
content, such as text, images, music, or code. Generative AI models learn from large amounts
of data and can generate realistic and diverse outputs that mimic the style and content of the
original data. Generative AI has many applications in various domains, such as entertainment,
education, health care, and security.

One of the most popular and powerful generative AI models is GPT-4, developed by OpenAI.
GPT-4 is a language model that can generate coherent and fluent text on any topic, given a
prompt or context. GPT-4 can also perform various natural language processing tasks, such
as answering questions, summarizing texts, translating languages, writing essays, creating
stories, poems, songs, code, and more. GPT-4 is based on the Transformer architecture and
uses a massive neural network with 175 billion parameters.

Another example of generative AI is Copilot, developed by GitHub. Copilot is an AI pair

programmer that helps developers write code faster and better. Copilot uses OpenAI Codex
to suggest whole lines or entire functions based on the code context and comments. Copilot

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can also generate unit tests for the code it suggests. Copilot works with Visual Studio Code
and supports multiple programming languages.

Deepfake is another type of generative AI that uses deep learning to manipulate or generate
visual and audio content. Deepfake can create realistic videos or images of people saying or
doing things they never did. Deepfake can be used for entertainment purposes, such as
creating parodies or memes. However, deepfake can also be used for malicious purposes,
such as spreading misinformation or impersonating someone.
Some examples of deepfake are:
• A video of actor Tom Cruise performing a backflip on the set of Mission: Impossible.
• A video of former US president Barack Obama endorsing Donald Trump in the 2016
election.
Deepfake can be created using various techniques and tools. Some common techniques are:
• Face swapping: Replacing one person’s face with another person’s face in an image
or video.
• Lip sync: Making one person’s mouth move in sync with another person’s voice in an
image or video.
• Style transfer: Applying the style of one image to another image.
• Image synthesis: Generating new images from scratch based on some input.

Latest developments in Generative AI:

1. NEC’s New Strategy: NEC has launched a new business strategy focusing on expanding
applications of generative AI in 2024.
2. AI Takes Center Stage: 2023 saw pivotal moments in artificial intelligence, including the
emergence of advanced language models and generative AI. Groundbreaking
applications in healthcare and astronomy were also observed.
3. Google’s AI Search Tool: Google’s AI tool, Search Generative Experience, has raised
concerns as it dominates web searches, potentially jeopardizing media traffic.
4. Generative AI’s Breakout Year: The state of AI in 2023 confirms the explosive growth of
generative AI (gen AI) tools. One-third of survey respondents say their organizations are
using gen AI regularly in at least one business function.
5. Future of Generative AI: Generative AI features stand to add up to $4.4 trillion to the
global economy annually. New iterations of gen AI technology have been released several
times a month.
6. Latest Trends in Generative AI for 2023: Advancements in NLP, improvements in
Generative Models, new applications of Generative AI, the emergence of Explainable

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 Generative AI, integration with Blockchain Technology, advancements in Multi-modal
Generative, increased focus on Privacy and Security, and adoption of Generative AI in
Education.

These developments highlight the rapid growth and potential of Generative AI. However, they
also underscore the need for careful consideration of ethical and societal implications.

COMMON QUESTIONS ASKED IN AN MBA INTERVIEW

1. What is the distinction between artificial intelligence, machine learning, and deep
learning?

2. What are the most promising applications of artificial intelligence in your field?

3. Do you have any ethical concerns concerning the development and usage of AI?

4. What is the potential influence of technology such as artificial intelligence?

5. What happens if artificial intelligence replaces people in the workplace? What do you
think about the future of work?

6. What are the most frequent cybersecurity dangers that businesses are experiencing
today?

7. What exactly is blockchain technology and how does it function?

8. What are some of the potential blockchain applications outside of cryptocurrency?

9. Do you believe blockchain has the capacity to transform any specific industries?

10. What security precautions should be taken when implementing IoT devices?

11. How can companies use IoT data to gather insights and enhance their operations?

12. Describe the distinction between Generative AI and classical AI techniques.

13. Discuss potential Generative AI applications in your field of expertise.

14. Give an example of a real-world Generative AI application that has impressed you.

15. What do you know about information systems? What distinguishes it from information
technology?

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16. What exactly is a database? Inform me about various Database Management Systems.

17. What is a database management system (DBMS), and how does it vary from a standard
file-based system?

18. What exactly is normalization, and why is it necessary in database design?

19. What is the distinction between supervised and unsupervised learning?

20. What are the most prevalent machine learning algorithms, and when do they often come
into play?

21. How can I assess an ML model's performance?

22. Define the terms descriptive, predictive, and prescriptive analytics.

23. What are the various types of data analysis (for example, regression, clustering, and
sentiment analysis)?

24. Describe the data analysis process, from data gathering to the creation of insights.

25. What are some of the most typical problems in data analysis?

26. Name several well-known data analysis tools and programming languages (for example,
Python, R, SQL).

27. Describe how you would share data insights with non-technical stakeholders.

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OPERATIONS

Op-Era
The Operations Club
What is Operations Management?
Having its origins as production management in the production sector and subsequently
having its scope broadened due to changing economic trends, Operations Management (OM)
is the process of planning, organizing, implementing, and improving business practices,
maximizing an organization's efficiency. It is concerned with converting resources as efficiently
as possible into goods and services to maximize an organization's profit, i.e., effectively
balancing costs and revenues to maximize the net operating profit.
In today's increasingly competitive world, in addition to the usual responsibilities of maximizing
profits and efficiency, an operations manager must also ensure the sustainability of business
processes to guarantee long-term business continuity. The scope of operations management
is broad and involves activities at both the strategic and operational levels:
At the strategic level, the role of an operations manager involves tasks like determining the
specifications of new manufacturing plants, which in turn includes sub-tasks like deciding on
the size, location, and processes to be implemented.
At the operational level, the role of an operations manager includes tasks like creating the
Master Production Schedule (MPS) and Material Requirements Plan (MRP) based on demand
forecasts and by application of formulas, such as the Economic Order Quantity (EOQ) formula.
In addition, the role of an operations manager also involves managing logistics/materials
handling, quality control, and maintenance policies.

IMPORTANT CONCEPTS

1. Supply Chain Management (SCM): Coordination and optimization of activities involved

in producing and delivering products, from raw materials to end consumers.
2. Inventory Management: Efficient control and tracking of stocked goods to ensure optimal
levels, minimizing holding costs while meeting demand.
3. Forecasting: Predictive analysis to estimate future demand for products or services based
on historical data and trends.
4. Capacity Planning: Determining the optimal production capacity required to meet current
and future demand while avoiding under or overutilization of resources.
5. Cycle Time: The total time it takes to complete a process, from the beginning to the end,
often used to measure efficiency and productivity.
6. Bottleneck: A point in a system where the flow of processes is slowed or impeded, limiting
the overall capacity of the system.
7. Lead Time: The time it takes from the initiation of a process to its completion, including
order processing, manufacturing, and delivery.

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8. Throughput: The rate at which a system produces its end products, measuring the
effectiveness of the production process.

SUPPLY CHAIN MANAGEMENT

Supply Chain Management (SCM) is the backbone of modern business, ensuring the
seamless flow of goods and services from production to consumption. At its core, SCM
involves the strategic coordination of key business processes to maximize efficiency and
deliver value to customers. One fundamental concept is demand forecasting, where
businesses predict future customer needs to optimize inventory levels. Inventory management
ensures the right amount of stock is available at the right time, minimizing excess and shortage
risks.
Logistics, a crucial SCM element, focuses on the physical movement of goods. This includes
transportation, warehousing, and distribution, all working in harmony to reduce lead times and
enhance customer satisfaction. Procurement involves sourcing raw materials and services,
emphasizing cost-effectiveness and quality. Information technology plays a pivotal role,
providing real-time data for decision-making and fostering collaboration across the supply
chain.
In an era when environmental awareness is at an all-time high, the notion of Scope 3
emissions emerges as a critical component of supply chain management. Scope 3 emissions
comprise a more extensive array of indirect emissions that are linked to the entirety of a
company's value chain. These emissions extend beyond the immediate activities of a business
entity. This category encompasses emissions originating from suppliers, transportation,
product usage, and disposal. Scope 3 emissions reduction requires the implementation of a
comprehensive strategy that emphasizes collaboration with suppliers and the integration of
sustainable practices throughout the supply chain.

SKILLS REQUIRED FOR AN OPERATIONS MANAGER:

To effectively fulfil their responsibilities of ensuring the effective implementation of current
processes and developing new strategies, an operations manager must possess a range of
skills, including:
• Technical expertise in the field of design, information systems, budget tracking, and
production automation

• Leadership skills to enable maximum performance and inspire ideas while

maintaining a diverse and motivated team that functions seamlessly

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 • Organizational ability and attention to detail for keeping track of multiple processes
and documents like budgets, schedules, and employee reports

• Analytical aptitude to enable identification and resolution of challenges in business

processes and include skills in risk analysis and mitigation when evaluating strategies.
Analytical abilities also allow an operations manager to make quick decisions when
required.

• Ability to maintain quality standards, including quality standards for raw materials,
packaging, and the finished product, by adhering to standard processes for operational
activities like maintenance

Careers in Operations Management:

With accelerating economic growth in India, the demand for Operations managers will
increase. Job roles and industries that require operations managers include:
• Logistics and Supply Chain Management (SCM) – With an increase in manufacturing
and trade, the demand for Logistics and Supply Chain Management has increased.
The scope of logistics is broad and includes sub-sectors like shipping, air cargo,
inventory management, and warehousing, each of which is a massive industry.
• Manufacturing – In this sector, the scope of operations managers is broad. It involves
functional roles like plant managers, process managers, and technical operations
managers, which are essential for the proper functioning of the manufacturing sector.
• Process Engineering – It involves designing, optimizing, implementing, and improving
processes for various industries ranging from banking and insurance to e-commerce.

In addition, with the increasing need for achieving higher efficiencies and reducing waste,
there is a demand for Operational Researchers to analyze systems and suggest
improvements in processes.

Sustainability in Operations Management

• The standard definition of Operations Management involves maximizing efficiency, which
inherently makes the operations management continually strive to improve processes
and reduce wastages.
• Currently, the earth's environment faces pollution, global warming, deforestation, and
overconsumption risks. Partly responsible for this situation are the systems and
processes by which businesses currently operate and define their scope of responsibility.
• From responsibility towards shareholders to responsibility towards all stakeholders, the
scope of efficiency and sustainability in operations has broadened to include

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 considerations of the ecological impact of business processes and the usual utilization of
labor and capital resources.
• This broadening of scope for sustainability in operations has been gradual—from the
initial focus on conserving non-renewable resources to avoid the depletion in the 1990s
to the current trends of reducing CO2 emissions and reverse and closed-loop logistics.
• Currently, sustainability in Operations Management is defined in terms of the Triple
Bottom Line (TBL), i.e., the pursuit of social, economic, and environmental objectives
when managing the operations of a business. The TBL concept also extends to a firm's
operational linkages, including the supply chain and communities affected by the firms'
processes.
• Aspects of sustainability in operations management encompass many concepts,
including process improvements, improved product design, adoption of more stringent
environmental and social standards, reduction in waste and lean operations, more
efficient logistics and Supply Chain Management (SCM) systems, improved analytical
tools, and the closed loop economy.
• In addition to the improved operational processes and legally mandated socio-
environmental standards on businesses, there has also been a trend of increased
consumer awareness and activism regarding the negative externalities of business
operations. It has caused many businesses to transform their operations to become
more socially conscious. This trend is evident by increased interest in the CSR behaviour
of firms. The same forces have also led to the emergence of voluntary initiatives such as
the Global Reporting Initiative, where firms disclose comprehensive reports on the
impact of their operations on issues like climate change, human rights, and corruption.
Furthermore, as part of their transformation, firms are investing more in previously less
researched aspects of business operations like health and safety and employee welfare.
• This increasing trend towards sustainability in operations will lead to better results for the
organizations' implementation in terms of improved consumer perception, regulatory
benefits, and long-term business continuity. This trend towards sustainability also is an
opportunity for aspiring operations managers, who will be in demand for implementing
the transformation towards sustainable operations for many businesses.

Six Sigma
Six Sigma is a disciplined, data-driven approach and methodology to help eliminate defects in
a process, from manufacturing to transactional and from product to service. Six Sigma is:
• A Philosophy: Make fewer mistakes in all that we do
• A statistical measure: Help gauge the adequacy of the product, process, and service

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 • A metric: A measuring system
• A business strategy: Good quality can help reduce cost numerically, having no more
than 3.4 defects per million.
Six Sigma's main goals are to:
• Reduce Variation
• Reduce Defects
• Cut Expenses
• Shorten the cycle time
Businesses use the Six Sigma approach because it increases their value in a methodical and
quantifiable way by making them customer-focused, competitive, quality-aware, and forward-
thinking. The following are some advantages that firms experience as a result of Six Sigma
initiatives:
• Avoiding waste
• Reduction of defects
• Shortening of cycle time
• Savings on costs
• An increase in market share

Mathematical Interpretation

DMAIC Methodology:
An organized, disciplined approach to problem-solving in most Six Sigma Organizations is
known as DMAIC Methodology.

History
• Originated at Motorola in 1987
▫ In response to the low-quality perception

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 ▫ Focus on defect reduction and improved yield
▫ General outline: Six Steps to Six Sigma

DMAIC Cycle

• D (DEFINE the problem) - In the Define Phase, we pinpoint areas for improvement, set
clear goals, and allocate resources. By focusing on customer requirements, we identify
Critical to Quality aspects—those pivotal characteristics ensuring customer and process
satisfaction.

• M (MEASURE the outcome) – The Measure Phase gauges current process performance
through exploratory data analysis, establishing a baseline before improvement
identification. It builds on the Define Phase, using its outputs as inputs to assess the
present process condition.

• A (ANALYZE) – In the Analyze Phase, we use Six Sigma methods to sift through potential
causes from the Measure Phase, identifying key factors affecting project outcomes and
prioritizing them for focused improvement efforts. The data collected guides us in
understanding and tackling sources of variation.

• I (IMPROVE) – In the Improve Phase of Six Sigma, we optimize processes for improved
efficiency and cost-effectiveness, implementing and validating optimal solutions to
eliminate defects. The focus is on doing things better and faster.

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• C (Control) – In the Control Phase of Six Sigma, we establish and execute a process
control plan to sustain improvements. This involves validating the measurement system,
verifying process enhancements, and implementing control mechanisms for long-term
stability.

7 QC TOOLS
The Seven Basic Tools of Quality (also known as 7 QC Tools) originated in Japan. These
tools, which comprised simple graphical and statistical techniques, helped solve critical
quality-related issues.
7 QC tools can be applied across any industry, from product development to delivery. 7QC
tools, even today, own the same popularity and are extensively used in various phases of Six
Sigma (DMAIC), in the continuous improvement process (PDCA- Plan Do Check Act cycle),
and in Lean management (removing wastes from the process).
The seven tools are:
1. Check the sheet
2. Control chart
3. Stratification (alternatively, Process flow chart or run chart)
4. Pareto chart
5. Histogram
6. Cause-and-effect diagram (also known as the "fishbone diagram" or Ishikawa diagram)
7. Scatter diagram

Check Sheet:
• Purpose: Collect and organize data for analysis.
• How: A simple form or sheet for systematically recording and tallying data.

Control Chart:
• Purpose: Monitor and maintain the stability of a process over time.
• How: Utilizes statistical analysis to plot data points and identify trends, helping to
distinguish between common cause and special cause variations.

Stratification (often considered as the seventh tool):

• Purpose: Analyze and understand variations within data by dividing it into subgroups.
How: Organizes data into different categories to reveal patterns and trends.

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Pareto Chart:
• Objective: Determine and rank the most important elements causing an issue.
• How: Uses a bar graph to display data and draw attention to the key issues that
cause most of the difficulties.

Histogram:
• Objective: The purpose of a histogram is to show how a set of data is distributed.
• How: Uses bars to visualize data and display the distribution and frequency of a
given variable.

Cause-and-Effect Diagram (Fishbone or Ishikawa Diagram):

• Purpose: Identify and explore potential causes of a problem.
• How: Utilizes a fishbone-shaped diagram to categorize and analyze possible causes,
including people, processes, equipment, and more.

Scatter Diagram:
• Purpose: Explore the relationship between two variables.
• How: Graphical representation of the correlation between two sets of data points

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KANBAN
Kanban is a visual system for managing work as it moves through a process. Kanban
visualizes both the process (the workflow) and the actual work passing through that process.
It normally consists of a card or ticket with information on the item and the quantity to be
produced. The goal of Kanban is to identify potential bottlenecks in your process and fix them
so work can flow through it cost-effectively at an optimal speed or throughput.
A Kanban board is an agile project management tool designed to help visualize work,
limit work-in-progress, and maximize efficiency (or flow). It can help both agile and
DevOps teams establish order in their daily work.
The Kanban Method follows a set of principles and practices for managing and improving
workflow. It is an evolutionary, non-disruptive method that promotes gradual improvements to
an organization's processes. This method will improve flow, reduce cycle time, and increase
value to the customer with greater predictability.

The four foundational principles:

1. Start with what you are doing now – Don't make any changes to your existing setup/
process right away. Kanban must be applied directly to the current workflow. Any changes
needed can occur gradually over a period at a pace the team is comfortable with.
2. Agree to pursue incremental, evolutionary change - Kanban encourages you to make
small incremental changes rather than radical changes that might lead to resistance within the
team and organization.
3. Initially, respect current roles, responsibilities, and job titles - Kanban does not impose
any organizational changes by itself. So, it is not necessary to make changes to your existing
roles and functions, which may be performing well. The team will collaboratively identify and
implement any changes needed.
4. Encourage acts of leadership at all levels - People at all levels can provide ideas and
show leadership to implement changes to continually improve the way they deliver their
products and services.

Core Practices of the Kanban Method:

• Visualize the flow of work – Making the entire process using Kanban board.
• Limit WIP (Work in Progress) – Streamlining the currently active tasks efficiently.
• Manage Flow - People at all levels can provide ideas and show leadership to
implement changes to continually improve the way they deliver their products and
services.

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 • Make Process Policies Explicit - you create a common basis for all participants to
understand how to do any type of work in the system. The policies can be at the board
level, swim lane level, and for each column.
• Implement Feedback Loops - The method encourages and helps you implement
feedback loops of various kinds – review stages in your Kanban board workflow,
metrics and reports, and a range of visual cues that provide you continuous feedback
on work progress – or the lack of it – in your system.
• Improve Collaboratively, Evolve Experimentally - adopt small changes and improve
gradually at a pace and size that your team can handle easily.

In a classic Kanban board model, there are three columns:

• "To Do": This column lists the tasks that are not yet started ("backlog" can also be
used)
• "Doing": Consists of the tasks that are in progress
• "Done": Consists of the tasks that are completed

Applications
• The Kanban system can be used easily within a factory, but it can also be applied to
purchasing inventory from external suppliers.
• The Kanban system creates extraordinary visibility for both suppliers and buyers.
• The main goal is to limit the build-up of excess inventory at any point on the production
line.
• Limits on the number of items waiting at supply points are established and then
reduced as inefficiencies are identified and removed.

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 • Whenever a limit of inventory is exceeded, it points to an inefficiency that needs to be
addressed.

5S
5S is a system for organizing spaces so work can be performed efficiently, effectively, and
safely. It is a methodology used to organize activities and areas in a facility. The ultimate
responsibility for maintaining the 5Ss is of the manager. The 5 Ss are:
• Sort (Organization): Distinguish between what is needed and not needed.
• Stabilize (Orderliness): A place for everything and everything in its place.
• Shine (Cleanliness): Cleaning and looking for ways to keep it clean. Cleaning is
inspecting!
• Standardize (Promote Adherence): Share established standards and make standards
obvious.
• Sustain (Self-Discipline): Stick to the rules and maintain the first four S's.

Why necessary
• Factories are living, breathing entities that have a heartbeat and must eat and respire,
just like many other organisms.
• 5S is the training regimen that a factory or company needs to partake in to get to that
level.
• The 5S concept helps get your house in order and keep it in order.
• The basic concept is setting the workplace up so that it is organized and runs well.
• A technique that makes problems visible in a workplace.

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5S Benefits
1. Zero changeovers bring product diversification
2. Zero defects bring higher quality
3. Zero waste brings lower costs
4. Zero delays bring reliable deliveries
5. Zero injuries promote safety
6. Zero breakdowns bring better maintenance
7. Zero complaints bring greater confidence and trust
8. Zero red ink brings corporate growth

TAKT TIME
The word "takt," which implies a beat or a pulse in German, is where the phrase first appeared.
In the 1930s, Germany's aviation manufacturing industry was the first to adopt takt time as a
metric. Twenty years later, it made a substantial contribution to Toyota's transformation from
a modest Japanese automaker to the biggest automaker in the world.
Takt time is the rate at which you need to complete a product to meet customer demand. For
example, if you receive a new product order every 4 hours, your team needs to finish a product
in 4 hours or less to meet the demand.
Takt time is your sell rate and can easily be categorized as the heartbeat of your work process.
It allows you to optimize your capacity appropriately to meet demand without keeping too much
inventory in reserve.
Managing a pull system wouldn't be possible without maintaining a continuous flow of work.
This is not an easy task, as demand is constantly in flux. To meet demand and run your
process in the leanest and most efficient way, you need to define takt time for your work
process.

How to Define Takt Time?

To define takt time, you need to divide the production time available by customer demand.

You should exclude breaks, scheduled maintenance, and shift changeovers (if there are any).
When defining takt time, you should include a relatively short time frame for the average
customer demand (e.g., a week or a month).

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Takt Time vs Cycle Time vs Lead Time

• Lead time is the time frame between an order being received and the client getting
their value.
• Cycle time is the time your team spends actively working on a customer order.
• Takt time is the maximum amount of time you need to comply with to meet customer
demand.
As a Lean manager, you should consider all three metrics as key performance indicators of
your workflow.

KAIZEN
• Kaizen is a Japanese word that means consistent improvement or change for the better.
It's a Japanese business philosophy about how to make operations better all the time
and get everyone involved. It is an idea that includes a lot of different things. Making the
workplace more efficient and effective means fostering a sense of teamwork, making
daily tasks easier, keeping employees interested, and making work more satisfying, less
tiring, and safer.
• The main idea behind kaizen is to make small changes over time to make things better in
a business. That doesn't mean changes take a long time. The kaizen process is based
on the idea that small changes made now can have big effects later on.
• Any worker can suggest ways to make things better at any time. The concept is that
everyone has a stake in the success of the business and should always work to improve
the way it works. The kaizen idea has been used by many businesses. Most importantly,
Toyota uses the meaning and philosophy of kaizen in its business. One of its most
important values is kaizen. Toyota wants to improve its production system, so it
encourages and gives all of its employees the freedom to find ways to make things better
and come up with workable solutions.

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10 Principles of Kaizen
The Kaizen method follows ten specific principles, which are described below:

1. Improve everything continuously

2. Abolish old, traditional concepts
3. Accept no excuses and make things happen
4. Say no to the status quo of implementing new methods and assuming how they will work
5. If something is wrong, correct it
6. Empower everyone to take part in problem-solving
7. Get information and opinions from multiple people
8. Before making decisions, ask "why" questions five times to get to the root cause (5 Why
Method)
9. Be economical. Save money through small improvements to spend the saved money on
further improvements.
10. Remember that improvement has no limits. Never stop trying to improve.

THE 5W AND 1H OF KAIZEN

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The Kaizen method strives toward perfection by eliminating waste (Muda) in the workplace
(Gemba). The goal of Kaizen is production without waste by improving standardized activities
and processes. Industrial engineer Taiichi Ohno, the father of the Toyota Production System,
noticed that there is an 80% loss in every process and the value of the process is less than
20%.

INDUSTRY 4.0
We are in the Industry 4.0 era. With its extraordinary speed and scale, the Fourth Industrial
Revolution enables you to approach operations with a stronger data-driven focus. This
information gleaned from your assets adds value and permits wiser choices. Finding the
relevant insights at scale is your issue, as more assets are incorporated into business
workflows, and technologies like 5G and edge computing are used. These findings may be a
crucial component of operational resilience in the face of this exceptional and global disruption.

• Start with collecting data, then add AI

The Internet of Things is significantly used in modern manufacturing (IoT). It links

equipment, computers, and sensors to create a comprehensive picture of the
manufacturing facility and all of its resources, boosting output and quality.

One component is data. However, what counts more is the ability to visualize that data
using AI and machine learning. Businesses are looking more and more for AI to assist
them in distinguishing between the signal and noise in their systems. According to a
recent IBM survey, 34% of businesses, up from 14% a year ago, claimed they are
implementing AI technology. That's because these new technologies will ultimately
give operators a means to handle asset maintenance and operations more intelligently.

• How AI adds intelligence to manufacturing

In a manufacturing plant where IT and OT may operate in information silos or in an

organization where processes differ in varying degrees from plant to plant, it is pivotal
to connect the data between the teams. That connection enables you to deliver the
right information, to the right people, in the right context, all for better decisions. This
collaborative view helps drive improved production efficiency and cost
containment. AI-powered manufacturing can drive up to 30% yield improvements and
15% waste reduction.

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 • Accelerated response times with 5G + edge computing
Today, 5G is assisting in bringing reaction times down to sub-second levels from
minutes and seconds. This speeds up communications to sensors and actuators and
produces results much more quickly. Combine this with edge computing after that. You
become aware of how much simpler it is to calculate the enormous amount of data
from ubiquitous assets now that you aren't sending data over the network. As you
expand your activities, this gains a particularly strong impact. Utilize manufacturing
powered by AI to create a more resilient corporation.

• Improve product quality and yield with intelligent, secure, and adaptable
manufacturing operations

AI-powered manufacturing—with solutions deployed at the edge—can drive up to 30%

yield improvements and 15% waste reduction, and a 5-10% reduction in operating
costs. It can also accelerate your journey to Industry 4.0.

EMERGING TRENDS IN OPERATIONS MANAGEMENT

• Blockchain- A blockchain is a decentralised database or ledger that is distributed

among the nodes of a computer network. The utilisation of blockchain technology is
transforming operations and supply chain management through the provision of a secure
and a transparent platform for monitoring goods and materials, automating payments,
and overseeing contracts. This has the capacity to enhance effectiveness, diminish
expenses, and augment transparency across the supply chain.

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• Automation- Automation entails the utilisation of advanced technology and software to
mechanise the various procedures and repetitive activities. In Operations and Supply
chain it can be heavily used in data entry, pick and pack systems, automatic guided
vehicles, freight invoicing and many more.
• AI- An organisation can use Artificial Intelligence and the massive amount of data
generated by company to improve supply chain management, efficiency, operations,
performance, and customer experience with predictive analytics, quality control, demand
forecasting, predictive maintenance, and many other innovations.
• Circular Supply Chain- Circular Supply Chain Management is an environmentally
conscious strategy for managing the flow of goods and materials. It aims to reduce waste
and optimise the use of resources by creating products and processes that can be
repaired, refurbished, or recycled. CSCM, in contrast to the conventional linear "take-
make-dispose" paradigm, prioritises circularity by focusing on product design, minimising
waste, promoting reuse and recycling, and reintegrating products back into the supply
chain. The advantages of CSCM encompass a diminished ecological footprint,
heightened financial gains, and improved standing.,
• Net-Zero- Net-Zero in Operations and Supply Chain Management (OSCM) is a strategy
methodology that seeks to achieve a balance between the amount of greenhouse gas
(GHG) emissions produced and the amount of GHG emissions removed. This ensures
that an organization's OSCM activities do not have a significant impact on the climate.
This method entails quantifying and evaluating greenhouse gas emissions, executing
plans to decrease emissions, and utilising carbon offsets. Net-Zero OSCM provides
advantages in terms of ecological sustainability, improved brand image, and financial
savings. Net-Zero OSCM activities encompass several practises such as the adoption of
renewable energy, implementation of circular supply chain methods, and promotion of
sustainable transportation. Given the ongoing urgency of climate change, the adoption of
Net-Zero OSCM is increasingly essential for implementing sustainable business
strategies.
• Automated mobile robots- Autonomous Mobile Robots (AMRs) are advanced
machines that transform logistics management by independently moving materials within
facilities. AMRs do not rely on fixed infrastructure. Instead, they utilise Laser Guidance
and Geo-Guidance technologies to navigate uncontrolled situations. This provides them
with the advantages of flexibility and cost-effectiveness. Laser Guidance utilises rotating
lasers and reflecting markings to accurately determine the course and make real-time
adjustments to the route. On the other hand, Geo-Guidance relies on facility maps to

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 enable autonomous navigation and calculate the optimal route. AMRs effortlessly
combine with primary networks to optimise operational efficiency and flexibility.
• Supply Chain as a service- Supply Chain as a Service (SCaaS) is a cloud-based
outsourcing model that allows enterprises to obtain supply chain solutions as needed,
without having to invest in their own infrastructure. SCaaS provides the opportunity to
easily adjust capacity, specialized knowledge, and creative thinking, resulting in
decreased expenses, greater productivity, and a heightened emphasis on fundamental
strengths. Typical SCaaS products encompass warehouse management, transportation
management, demand forecasting, and supply chain analytics. Supply Chain as a
Service is becoming increasingly popular as organisations acknowledge its advantages,
allowing them to attain supply chain superiority while concentrating on their main areas
of expertise.
• Digital Supply Chain Twins- Digital Supply Chain Twins are virtual representations of
physical supply chains that leverage real-time data and simulations to simulate and
analyze supply chain processes, facilitating optimized decision-making, increased
visibility, and higher resilience. These incorporate up-to-date information, utilise
simulation and modelling techniques, and present visual representations to improve
decision-making, visibility, and resilience. Digital Supply Chain Twins are utilised in
several areas such as predictive maintenance, demand forecasting, route optimization,
and scenario planning, hence revolutionizing supply chain management.
• Internet-Of-Things- The Internet of Things is a network of devices that are finely tuned
and interconnected within a comprehensive infrastructure, utilising digital methods to
record, transmit, store, and analyze data. IoT devices enable inventory management,
predictive maintenance, asset tracking, and transportation optimisation, improving
visibility, effectiveness, and customer service. In Operations and Supply Chain
Management, manufacturing firms monitor product temperature and humidity, retail firms
monitor product flow, and logistics firms monitor vehicle conditions.

COMMONLY ASKED QUESTIONS:

1. Why have you chosen to pursue Operations Management?
2. What are some of the skills you think are significant for the Operations Manager?
3. What do you mean by forecasting, and what is the impact of forecasting on the
manufacturing industry?
4. Define the terms Just-in-Time and Total Quality Management.
5. What is the supply chain? Describe the types of processes involved.
6. What do you mean by smart supply chain? What are its advantages?

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7. What is Six Sigma? What does it aim to do?
8. What is Last mile delivery?
9. What do you understand by Make-to-order and Make-to-stock? Give some examples
of industries relying on the above two methodologies.
10. How is technology contributing to operations? Justify your opinion.
11. What is Kaizen?
12. What is a Bottleneck, and how does it affect the overall process time?
13. What is the DMAIC improvement cycle, and how is it used?
14. Explain the bullwhip effect.
15. Identify Three Current Trends in Operations Management and Describe Them.
16. What is Operations Management?
17. How will 5G contribute to Operations?
18. What is sustainable operations management?
19. What are your views on four days working week in manufacturing firms?
20. What is the impact of Covid-19 on manufacturing firms?

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CONSULTING

ConQuest
The Consulting & Strategy Club
INTRODUCTION TO CONSULTING
The process of helping third parties solve complex problems by providing domain expertise
and knowledge in exchange for some fee is known as consulting. The services may either be
restricted to advisory services or can be extended to implementation services, depending on
the requirements. A consultancy firm comes into the picture when its clients are in a dilemma
and require special expertise, which is otherwise lacking on the client's end. A consultant gains
this level of expertise by studying for years, training, and building work experience in a
particular field.

CAREERS IN CONSULTING
• Analyst
• Associate
• Consultant
• Manager
• Principal
• Director
• Partner

Generally, consulting careers can be broken down into three main levels: entry-level,
manager, and partner/principal.

1. Entry-level consultants typically start as analysts or associates and work on conducting

research, analyzing data, and helping to develop recommendations for clients.

2. Manager-level consultants are responsible for leading the project teams, managing
client relationships, and delivering high-quality work. They may also be involved in
business development activities, such as identifying new clients and opportunities.

3. Partner/principal-level consultants are responsible for the overall management of the

consulting practice, including managing the firm's financial performance, developing
and implementing business strategies, and leading business development efforts.

In addition to these levels, there are also specialized career paths within consulting, such as
industry-specific consulting, strategy consulting, technology consulting, and management
consulting.

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The progression in consulting is often based on the performance, skills, and experience of the
candidate. It is a merit-based career, and progress is based on the ability to deliver results,
manage client relationships and lead teams.

It's also important to note that consulting is a demanding field that requires strong analytical,
problem-solving, and communication skills, as well as the ability to work well under pressure
and meet tight deadlines.

TYPES OF CONSULTING
● Strategy Consulting: An upper-level decision-making process where the consultants
advise and support businesses to develop, implement and sustain business goals. This
type of consultancy helps businesses with both long-term and short-term goals by
helping with profitability, M&A, operations, and workforce.
● Financial Consulting: The role of a consultant in financial consulting is to provide
information and advice to businesses on investment strategies, audits, financial
decisions, taxes, actuarial, valuation, and risk management.
● IT Consulting: An IT consultant works in partnership with clients to overcome their
business challenges through the application of technology. A consultant's work will often
be based on the need to improve efficiency and the way a company functions, with IT
being used to achieve this.
● Operation Consulting: Operations consulting, often known as operations management,
is defined as advising and/or implementation services that help a firm enhance its
internal operations and value chain performance. By advising on and supporting the
implementation of changes to target operating models, functional business processes,
management systems, culture, and other value chain elements, operations management
consulting projects help clients run more efficiently.
● Human Resource Consulting: HR consulting is the activity of providing all parts of
human resource management as an external supplier, as well as the professional and
business challenges that go along with it, such as client development, contracts, and
client management.
● ESG Consulting: ESG consultants are responsible for advising businesses for more
sustainable investing. They identify opportunities in the company's current portfolio for
investments that are environmentally and socially sustainable. They also suggest
businesses divest from those that do not comply with ESG.

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IMPORTANT FRAMEWORKS:

Porter's 5 Forces:
Michael Porter's Five Forces is probably the most famous framework used in preparing for
interviews in the consulting domain. According to this framework, competitive advantage in an
industry is dependent on the following five primary forces:

● The threat of new entrants

There are a number of factors that determine the degree of difficulty in entering an industry.
These include economies of scale, product differentiation, capital requirements, access to
distribution channels, cost advantages independent of scale (unique access to raw materials),
proprietary technologies, relationship with suppliers of raw materials, geographical presence,
time compression diseconomies, government regulations, legal or regulatory barriers, strong
brand identity and trade policies.

● The bargaining power of buyers

A buyer group is powerful if:
○ It is concentrated or purchases large volumes as a percentage of the seller's
sales
○ Undifferentiated products
○ Low switching costs
○ Buyers pose a credible threat of backward integration
○ Buyers are fewer in number as compared to manufacturers
● The bargaining power of suppliers
A supplier group is powerful if:
○ There are fewer substitutable products
○ The supplier group is an important input to the buyer's business
○ The supplier's products are differentiated and have high associated switching
costs
○ The supplier group poses a credible threat to forward integration

● The threat of substitute products:

Substitute products that deserve the most attention are those that compete in price with the
industry's products and have low switching costs.

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 ● Rivalry with competitors:
Rivalry among existing competitors increases for various reasons. It could be because
numerous or equally balanced competitors exist or industry growth is slow. The rivalry could
also increase due to high fixed costs, undifferentiated products and low switching costs, brand
identity, excess production capacity, diversity of competitors, corporate stakes, high exit
barriers, and even due to excess production capacity.

The goal is to assess whether a company should enter/exit the industry or find a position in
the industry where it can best defend itself against these forces or can influence them in its
favour.
Although the Five Forces is an excellent framework for helping you organize your thoughts,
its analysis is not complete. It should be used in conjunction with other frameworks to
enable you to fully understand the issues at hand.

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PESTLE Analysis:
Pestle Analysis is a concept used to gauge the environment in which the company operates
and provides goods/services to its customers. PESTLE is a mnemonic that refers to:

1. Political factors help determine the extent to which a company/industry, or

economy is impacted by government influence. For example, new tax structure,
trade tariffs, fiscal policy changes, etc.
2. Economic factors help determine the performance of the economy, directly or
indirectly impacting the company. For example, a rise in the inflation rate of an
economy would affect the prices of a company's products and services. Adding to
that, it would further affect the purchasing power of the consumers and may change
demand/supply models for that economy.
3. Social factors help determine demographics, cultural trends, population analytics,
etc. For example, buying trends in a country like India during the festive season of
Diwali, where the economy witnesses high demand during festivities.
4. Technological factors help determine the changes in technology that may affect
the company's operations or product line. For example, automation changes the
way a company operates and leads to changes in human capital requirements.
5. Legal factors help determine how certain laws may affect the business
environment while operating in a country. It also considers certain policies
companies chart out for themselves. For example, labour laws, consumer laws,
etc.
6. Environmental factors help determine the factors determined by the surrounding
environment and its influence. These are not just limited to climate and weather
but also include geographical location, global climate changes, environmental
offsets, etc.

SWOT Analysis:
SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to
evaluate a company's competitive position and to develop strategic planning. It assesses
internal and external factors, as well as current and future potential. It is designed to facilitate
a realistic, fact-based, data-driven look at the strengths and weaknesses of an organization,
initiatives, or within its industry.

1. Strengths- These describe what an organization excels at and what separates it

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 from the competition: a strong brand, a loyal customer base, a strong balance
sheet, unique technology, and so on.

2. Weaknesses- These prevent an organization from performing at its optimum level.

These are areas where the business needs to improve to remain competitive: a
weak brand, higher-than-average turnover, high levels of debt, an inadequate
supply chain, or lack of capital.

3. Opportunities- These refer to favourable external factors that could give an

organization a competitive advantage.

4. Threats- These refer to factors that have the potential to harm an organization.

Threats- These refer to factors that have the potential to harm an organization.

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4Ps:

4P is a framework that helps develop strategies to differentiate a company's product from its
competitors. It is very common when launching a new product or while reviewing the
positioning of an existing product.

1. Product: The company must be clear on what product it is selling and which product or
which
version of the product to market. What is the product? Product lifecycle? How innovative is
the product compared to existing products? Any patents or rights to protect the product from
being copied? Any similar products or substitutes?

2. Price: The price charged for the product depends on its command in the marketplace. It
impacts the company's revenue and profits as well as communicates information on the quality
or value of the product. What is the perceived value of the product for the customers? Price
charged by the competitor? Production cost involved? Price sensitivity of the product? What
is the breakeven point? Do customers need to be educated about the product or its usage?

3. Promotion: It is important to understand how to spread information about the new product
among the customers. Various cost-effective strategies and techniques can be used to reach
different segments of customers. What marketing strategies have been implemented? Which
strategies have been successful? What strategies are the competitors using? What is the best
time to promote the product? Which media type will be used and will be most effective?

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4. Place: It is about making it easy to find a product. Knowing where the product will be sold
to the customers will make some distribution channels more effective than others. Possible
distribution channels? (online/offline, etc.) What are the sales team requirements? What are
the strategies followed by the competitors? Which channels best reach out to the customers?
Most successful channels in the past? And why?

BCG Matrix
One popular and useful framework is the BCG ‘Product Portfolio Matrix.’ This matrix is
designed to place a product or group of products into one of four categories.

Each of the four quadrants represents a specific combination of relative market share and
growth:

1. Low Growth, High Share: Companies should milk these "cash cows" for cash to
reinvest
2. High Growth, High Share: Companies should significantly invest in these "stars" as
they have high future potential.

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 3. High Growth, Low Share: Companies should invest in or discard these "question
marks" depending on their chances of becoming stars.
4. Low Share, Low Growth: Companies should liquidate, divest or reposition these
"pets".

McKinsey 7S Model:

McKinsey's 7S Framework is a management model developed by management consultants

Robert H. Waterman, Tom Peters, and Julien R. Phillips. The model is named after the
seven interrelated elements that it identifies as critical for organizational success, all of which
begin with the letter 'S'. The framework is designed to help organizations analyze and align
various components to improve overall effectiveness and performance. The seven elements
are:
• Strategy: This refers to the plan or course of action that an organization takes to achieve
its objectives. It involves decisions about resource allocation, business direction, and
competitive positioning.
• Structure: Structure encompasses the organizational design and the way in which
various roles, responsibilities, and reporting relationships are arranged. It involves the
formal division of tasks, authority, and coordination mechanisms.
• Systems: Systems represent the processes, procedures, and routines that guide how
work is done within the organization. This includes both formal and informal processes
such as decision-making processes, communication flows, and performance
management systems.
• Shared Values: Shared values, also known as superordinate goals or core values, are
the fundamental beliefs that underpin the organization's culture. They shape the behavior
and attitudes of employees and influence decision-making throughout the organization.
• Skills: Skills refer to the capabilities and competencies possessed by the organization's
employees. This includes both technical skills and the softer skills such as leadership,
teamwork, and problem-solving abilities.
• Style: Style relates to the leadership and management styles prevalent within the
organization. It encompasses the way leaders interact with employees, make decisions,
and demonstrate their values. Leadership style has a significant impact on organizational
culture.
• Staff: Staff includes the number, type, and distribution of employees within the
organization. It also considers factors such as employee motivation, satisfaction, and the
overall quality of the workforce.

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The 7S Framework emphasizes the interdependence and interconnectedness of these
seven elements. It suggests that for an organization to be successful, there must be
alignment and consistency across all components. When there is a misalignment,
organizations may face challenges in implementing their strategies and achieving their
goals. The model is often used as a diagnostic tool for organizational change, helping
leaders identify areas of strength and weakness that need attention to improve overall
performance.

Application of the Mckinsey 7S model:

Application of the McKinsey 7S Model involves navigating the inherent subjectivity
surrounding alignment within its seven key elements, making it a seemingly complex
process. However, a recommended approach is to adopt a top-down perspective, starting
from overarching strategy and shared values down to style and staff.

• Step 1: Identify Areas of Misalignment

Examine the consistency across values, strategy, structure, and systems. Identify gaps
and inconsistencies in the relationships between these elements and determine
necessary changes.
• Step 2: Determine Optimal Organizational Design
Consolidate input from top management to formulate a generic, optimal organizational
design. This design should enable the company to establish realistic goals and
achievable objectives, requiring thorough research and analysis as no "organizational
industry templates" exist.
• Step 3: Decide on Changes
Once outliers are pinpointed, develop an action plan involving concrete alterations to the
chain of hierarchy, communication flow, and reporting relationships. This step aims to
establish an efficient organizational design.
• Step 4: Implement Necessary Changes
The implementation phase is critical for the company to realistically achieve its
objectives. Address potential hurdles through a well-thought-out implementation plan.

Advantages of the Model:

• Facilitates coherent and synchronized actions across different parts of the company.
• Enables effective tracking of the impact of changes in key elements.
• Considered a longstanding theory, widely adopted by numerous organizations over

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 time.

Disadvantages of the Model:

• Regarded as a long-term model.
• Adaptability to the evolving nature of businesses remains uncertain.
• Relies heavily on internal factors and processes, potentially proving disadvantageous
in situations where external circumstances influence an organization.

SUSTAINABILITY AND CONSULTING

Sustainability in consulting requires a holistic approach that involves integrating sustainable
practices into all aspects of the consulting process, from the way consultants work to the
services they offer to clients. There are multiple ways in which sustainability can be integrated
into the consulting domain. Some of them are:
• Sustainable practices can be incorporated into the consultation process, such as using
eco-friendly materials and reducing carbon emissions.
• Clients can be advised on sustainable business practices, and consultants can help
them to set and achieve sustainability goals.
• Data and analytics can be used to measure the impact of consulting interventions on
the environment and society.
• Consulting firms and their clients can be continuously monitored and evaluated on their
sustainability performance.
• The use of technology and digital solutions must be prioritized to optimize the use of
other resources.
• Consulting firms, clients, and other stakeholders can collaborate and exchange
knowledge to accelerate the adoption of sustainable practices.
• Firms must focus on developing sustainable business models that are financially viable
and beneficial for society and the environment.

EMERGING TRENDS

1. Agile and Lean Consulting: The consulting industry is moving towards more Agile (a way
to manage a project by breaking it up into several phases) and Lean (a management
framework aimed at helping practitioners improve efficiency and the quality of work)
methodologies, which prioritize flexibility, speed, and cost-effectiveness.
2. Remote Consulting: With the pandemic hitting us, remote consulting has been a game-

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 changer shift for independent consultants. This has improved consultants' profitability
because it expands the territory and lowers the business development costs.
3. Expanding Cloud Capabilities: Professionals are now increasingly advising their clients
on cloud adoption, and firms are expanding their cloud services through investments,
acquisitions, and collaborations.
4. Digital Transformation: The incorporation of Artificial Intelligence and digital solutions by
consulting firms will continue to rise as it helps in improving their supply chain management
and data processing.
5. Compliance with ESG measures: Consumer and investor consciousness around climate
issues has pressurized firms to reduce their carbon footprint. As a result, the global ESG
advisory market is one of the fastest-growing consultancy sectors, currently worth $14B
and forecast to grow around 13% per annum.
6. Generative AI - A paradigm shift: Generative AI is a transformative force in business,
especially in data analysis and decision-making. In consulting, there's a dual demand:
embracing AI for strategy enhancement and developing expertise to integrate it into clients'
operations. Key capabilities of generative AI include high-volume data analysis, predictive
insights, customization, accelerated innovation, and enhanced collaboration.
7. Hiring Practices: In response to the evolving job market post-COVID-19, consultancy
firms are increasingly sought after for streamlining processes and helping companies
attract top talent within budget constraints. Key transformation areas include diversity
hiring, flexible work environments, employee engagement, work/life balance, attractive
compensation, and upskilling current employees.

COMMON QUESTIONS ASKED

1. Which industry do you see evolving and why?
2. Do a SWOT analysis of yourself.
3. What is Porter's five forces?
4. How can you implement sustainability in a consulting job?
5. What kind of analysis should be done before launching a new product?
6. When should a company consider expanding into new geographies?
7. Some basic guesstimates.
8. What industry trends are you following closely, and why?
9. Describe a time when you had to persuade a colleague/client to follow your ideas or
recommendations.

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ALL THE BEST!