1-year Full-time MBAs!

Here is an excellent piece on the 1-year MBAs by Shikhar Mohan. By far the most informative comparison giving the differences and similarities between the 2-year MBAs and the 1-year MBAs.

Most importantly, it elaborates quite well on WHY THEY ARE NOT THE SAME AS part-time MBA!

Please read it and share it with as many as possible.

http://www.business-standard.com/india/news/don%60t-mistake-it-for-an-executive-mba/497566/

Quoting from the article,


"The first point to note is that the IIMs’ One Year Full Time MBA is a ‘Regular’ Full Time MBA and not an Executive MBA."

Valuing LTE Patents of Nortel - An approach

Now that Nortel's Wireless and Enterprise businesses have been auctioned, Nortel still has LTE Patents with it. LTE is a considered to be a successful technology for the 4G wireless business and is expected to take the world to seamless broadband wireless paradigm. Nortel is said to have 600 patents in this area. Now let’s try to assess how this asset can be valued.

Following is with the assumption that the potential buyer is going to know everything about the patents.

1. A Patent is an asset that will be used directly or indirectly through applications based on the patent.

2. First step would be to find the directly assessable market based on history. That market is of those products this patent and its extensions can directly substitute.
That is the possible market potential.

The subjective part here is how much one can be sure on this market potential.

3. Next is finding the potential of those products that are not conceivable as of now. This is the tricky one.

(i) One way to approach this is on the basis of historical statistics of patents from the same industry. For example, in this case of 4G, we can take a random sample of 600 patents (or possibly more) from the period when 3G (or any other technology) was a new area of research.

(ii) Now analyze how many of these samples proved to be huge successes, moderate successes and damp squibs. With this as the basis, we can use the same probability on this set of LTE patents (this is a huge assumption). Obviously this is not something that will always work yet if we are going to use history as any indicator then this is one way to follow.

(iii) The next 2 things we can draw from the above sample would be the standard deviation and volatility.

4. Now if we look at this set of patents as an asset, then the value of buying an asset with unknown potential is nothing but buying an option on the asset.

5. So now the value can be assessed as the value of a real option with a possible market value that was calculated in points 2 AND 3.
a. We have - Possible Value of the asset and the volatility.
b. We also have the risk free interest rate.

c. Now the tricky ones, the strike price of this option and the expiry time.
(i) The PV of the investment in productizing these products is the strike price. Why? Compare this to a stock call option - What you earn in a call is the difference between the stock price and the strike. Similarly, here the gain of the patent owner is the difference between the revenues and capital cost.

(ii) Now the expiry time is how long these patents are useful. We cannot sit on 4G patents when the market is already preparing for 5G technology. Beyond a certain time, any technology simply loses relevance.

6. At this point we can insert the values in any Black Scholes Calculator.

Alternative
An alternative to this step is to break the 600 patents in several sets of like patents and then assess each set individually. The next step can be to sum them all and use these steps for overall value or consider each set as a separate option and value them one set at a time.

Major assumptions of the above approach -
1. This set of LTE patents will have a market performance similar to historical set of randomly chosen 3G patents from a similar period in 3G's lifecycle.
2. Cost of productizing and other capital costs.

I have applied theory of real options in this case and will try to find out of there are other better methods already used elsewhere. That would form some other post

- Siddharth Garud

Reference:
http://www.cbc.ca/technology/story/2009/07/29/f-lte-long-term-evolution-wireless.html

Marketing insights summary

My friend Paddy has been writing some very interesting marketing related articles. Easy reading and great summary of about all of our marketing subjects. And no exams at the end :D

Know your audience

Consumer Insight

Credit Cards

- Sid

Birds and Nests

Just published this on PGPX blog....

As I strolled today evening out from the tunnel to the old campus, flock after flock of birds returned back to the trees. After a day's hard work, they were back to their safe places. The noises, the shaking of trees, the falling of dried leaves continued for a while. As dusk changed into night and the various shades of orange in the sky changed to the cool night....the birds quietened. Just a chirp here and there was heard.

I came back from the stroll, to my room. As a habit, I turned on my laptop, turned on the browser and the homepage came up. Log in and check....no new mail! I checked the internet connection...thats ok. I refreshed the page again hoping it was a cached page. Nope...no new mail.

The birds of PGPX3 had quietened down. There were less than 10 mails in the day. Some of us(including me) were trying to send mails from the first term hoping to see some new conversation on the cyber-lobby of PGPX...

The birds were preparing for the flight home.Some had already flown. I suddenly felt choked.

After a rocking party yesterday night, it was difficult to suddenly swallow the fact that we all will move now. A year full of cases, readings, CP, arguments, business games and unbreakable bonds between such wonderful people and families.

This one year has a special place in our hearts and I know all of us are now unsure about coping with this sudden dislocation from our dear CR11 class.

The birds' nests have moved. Memories linger on...

- Siddharth

Mystic Music from the Master at IIMA

We, at IIMA, had the privilege of listening to the sweetest sound that man has produced from wood. On a mild winter evening of 29th January 2009, the great Pt. Hariprasad Chaurasia enthralled the audience in Chaos 2009 with his flute magic.

I am a novice in classical music and generally depend on what my parents or colleagues recommend to me. I seriously need to change this and start proactively listening to more of this. Yesterday’s performance certainly took me in a mood that was soothing and calming. So soothing that I felt lighter and so calming that I completely forgot about my pending assignments ;-)

I reached there with a time limit, mindful of the assignments. But then I soon lost all consciousness in the magical ragas coming from Panditji and his colleagues. I tried to remember the names they told, but I think I need more education in this field.

What is interesting is the practice these maestros put in to achieve these heights. The 4 human beings on the stage never looked at each other or told each other. They just knew what each other wanted, expected and it was delivered that way. On tabla, was Pt. Ghate who would spice up the rhythm every once in a while. As that happened, it was amazing to see the expression of joy and fun in the other artists up there. They just knew where the music was taking the audience.

As I walked back to the dining hall, a few questions lingered in my mind....

In this running around behind goals and targets, can we take a pause and practice a game so much that we become masters like Pt. Chaurasia and Pt. Ghate? Can we, unconsciously, independently and reflexively, perform our tasks so well that together comes an output that is as harmonious and sweet as Shri Krishna’s music? Is it worthwhile to skip experimenting and work on mastering an art so well that world gets awed by the final output?

I don’t have the answers but I would like to think on these lines more.

- Siddharth

Mighty Guests enthrall PGPX 3

Well, well, well....in term 3 we have been having a "Who's who" of industry visiting us and delivering amazing lectures.

Yesterday we had, Dr. Krish Chilukuri of Goodrich talking about the complexities of B2B marketing. It was a superb insight in what strategy means, what it means to get various ingredients like customer focus, costing and employee culture together in the area of highest technology in the world.

Today we had, Mr. Arun Maira of Boston Consulting Group addressing us on the contentious issue of Capitalism. His insights on how to popularize Capitalism by transforming it into a people movement was amazing. His passion towards this movement was touching and the questions he posed at the end of the address will remain with us for many years to come....

- Siddharth

On to 2nd term

OK! It is a great feeling to complete the first term at the PGPX!

It is still sinking in that I am at IIMA! Did so many things that I never thought I could do! Presentations, analyses and so many things....

Well the 2nd term is picking up pace now. We had today a "WOW!!!!" class on MacroEconomics. Prof. Ravindra Dholakia just blew the class away with his views on Indian economic history. I never thought Economics could do be so amazing!!! This was not a lecture, it was an experience. We could see the RBI in action, the former Govts., the decision making as he walked us through the last 100 years.

Well other things are in motion. After the rigour of first term, I hope we are equipped for the rest of the year now.

More soon,
Sid