What is Frugal Engineering? How it differs from simple cost cutting?

Frugal Engineering, first coined by Chief executive of Renault, Carlos Ghosn, is a process where basically frugal engineering is used to deliver the superior value of the products to the consumer for the best minimum possible price by cutting the cost as much as possible without much change in the quality of the end product.

A rethinking on product design and engineering for cost cutting at the same time not compromising with the quality of the product is the main objective of frugal engineering.  The engineering approach is not limited to automobiles or only consumer products; it is even applicable to medical devices.

Frugal Engineering is carried with a view to deliver the good to the largest segment in population where there is a huge scope as per C.K.Prahalad theory.  Basically, to target the Bottom of the Pyramid, where billions of consumer expect for a better product for cheaper price where they can afford to. 

Meeting the customer’s needs and maintaining the production cost at lower is not that easy task for any company, even with the multinational company or other companies from developed countries. The best example for Frugal engineering is Tata Nano, Nokia 1100, Godrej’s ChotuKool, in India, where products has been produced for least  possible cost to serve the specified customer need with meeting the global standards on quality. 

Cutting down the cost is not frugal engineering; it’s the changes in the whole process and then controlling the cost is Frugal Engineering.  The company has to put a lot of efforts in innovation, rethinking all aspects for the end product, should invest more time, and money. 

The main challenges faced by the organization are three things, usage of cross functional teams, supply chain problems, and top level commitment.

As in this process, not only the manufacturing team or only R&D department work on the project, but the cross functional teams is used so that a team is directed towards the objective of the task, that includes keeping the cost low, but using of such cross functional teams is not that easy because maintaining coordination among the employees is difficult. A new supply chain management should be formed where the suppliers are treated as a business partner and cost transparency is expected as well the supplier are worked as group with production team so that the cost is kept under control by compensating from one component with another. A huge support from the top management is expected to get the things done and come out, so the commitment should be very high from the top management first. 

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Different Types of Complainers for an Organisation?

Complainers, basically can be put into 4 major types for an organisation perspective. Those are,


a) Passive
b) Voicers
c) Irates
d)Activists


Passive Complainers, are those customer who have some problems/ dissatisfaction with the company products but do not communicate the same to the organisations. They believe that complaining would be of no use, not be worth the time and effort. Sometimes, their personal values restrict them from complaining.  But it is not a good sign for any organisation to have more number of passive complainers.


Voicers, for no hesitate to vice their opinions and definitely complains.  They also feel that the consequences of complaining will be positive and will lead to some social benefits.  These are loyal customers and do not spread a negative word of mouth even if they have grievances.  They do not shift their loyalty and also do not even engage in complaining to the third party.  Therefore, organisations should value these customers as they are indirectly giving them an opportunity to serve them.


Irates, are frustrated customers who engage in negative word of mouth withing a close groups.  But they feel that their complaints can be beneficial for others especially passive complainers, and so they do not go to the third party complaining. Rather they prefer shifting to other options.  They are not staunch loyalties and can switch any time to other brands.


Acitivits, are complainers having a unique combination of all the above stated types of complainers.  Organisation look at them as 'terrorists'.  They complain to the concerned organisations as well as they have a tendency to spread a negative word of mouth and even complain to the third party about the grievances.  yet they are optimistic about positive consequence of their complaints.


The organisation has to first identify the type of the complainer and then decide upon the future course of action for dealing with the complainer.

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Canon's Approach - 4C's

Canon's Approach in India market 4C's:


Customer:
 Looking for Solutions rater than Functions.


Competition:
Need to lead the market, create new market or new value.
Combination of Blue ocean or Red ocean Strategies.


Context:
More and more Digitalization of products.
Regional differences in India.


Company:
Expanding Direct and Indirect sales.
Expanding into Medical Equipments/Robotics.
Focusing on Imaging. (capturing, archiving, or printing images)
Creating long-term relations with customers and channel partners.

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Questions of Marketing Mix?

Questions of Marketing Mix..


What is Marketing Mix?
What do the elements of the Marketing Mix focus on?
What is the group of customers who will probably buy the product known as?
Why are the consumers who make up the target market for a product referred to as “potential” customers?
What does a successful Marketing Mix depend on?
Why are consumers at the center on Marketing Mix?
Consider the example of middle class teenagers as the target market for blue jeans.  In what places besides department stores could be product is sold?  What other promotion could be used?

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Difference between Stock and Bonds?

These are main difference between a stock and a bond.

STOCKS:

Type of Financial Instrument: Equity

Order of claim: Dividends can be issued only after interest on all debts includes bonds is fully paid.

Legal obligations to holders: Dividends may be varies or omitted at the discretion of the board of directors, no principal or maturity dates are involved.

Rights of holders: Voting stockholders can influence management by electing members of the board of directors.

Tax status: Dividends are not tax-deductable.

DEBT

Type of Financial Instrument: Debt

Order of claim: Interest must be paid before any dividends on stock are issued.

Legal obligations to holders: Interest must be paid regularly to avoid insolvency; principal must be repaid at stated maturity date.

Rights of holders: Bond holders have no voice in management as long as they receive interest payments.

Tax status: Interest as an expense of doing business is tax-deductable.

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How Capital is Acquired by a business house?

A corporation needs capital in order to start up, operate and expand its business.  The process of acquiring the capital is known as financing.  A corporation uses two basic types of financing

A    a)      Equity Financing

       b)      Debt Financing

Equity Financing refers to funds that are invested by owners of the corporation. Debt financing, on the other hand, refers to funds that are borrowed from sources outside the corporation.

Equity financing can be exemplifies by the sale of corporate stock.  In this type of transaction, the corporation sells units of ownership known as shares of stock.  Each share entitles the purchaser to a certain amount of ownership.  For example, if someone buys 100 Shares of stock of XYZ company, that person has purchases 100 shares of the company’s resources, materials, plants etc.  The person who purchases and holds the stock is known as Stockholder or shareholder.

All corporations, regardless of their size, receive their starting capital from issuing and selling shares or stocks.  The initial sales involve some risk on the part of the buyers because the corporation has no record of performance.  If the corporation is successful, the stockholder may profit through increases valuation of the shares of the stock, as well as by receiving dividends.  Dividends are proportional amounts of profit usually paid quarterly to stockholders.  However, if the corporation is not successful, the stockholder may take a severe loss on the initial investment.

The company should go for Debt Financing when it couldn’t meet its expectations through equity financing. Example of Debt financing is, Sale of Corporate bonds. In this type of agreement, the corporation borrows money from an investor in return for a bond.  The bond has a maturity date, a deadline when the corporation must repay all of the money it has borrowed.  The corporation must also make periodic interest payments to the bondholder during the time the money is borrowed.  If these obligations are not met, the corporation can be forced to sell its assets in order to make payments to the bondholders.

All businesses need financial support.  Equity financing and Debt financing provide important means by which a corporation may obtain its capital.

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Why Finance is needed for Business?

One of the primary considerations when going into business is money.  Without sufficient funds a company cannot begin operations.  The money needed to start and continue operating a business is known as capital.  As new business needs capital not only for ongoing expenses but also for purchasing necessary assets.  These assets – Inventories, equipments, buildings and other property represent an investment of capital in new business.

How this new company obtains and uses money will, in large measure, determine its success.  The process of managing this acquired capital is known as Financial Management.  In general, finance is securing and utilizing capital to start up, operate, and expand a company.

To startup or begin business, a company needs funds to purchases essential assets, support R&D, and buy production materials.  Capital is also needed for salaries, advertising, insurance, and other day to day operations.  In addition, financing is essential for growth and expansion of a company.  Because of competition in the market, capital needs to be invested in developing new product lines and production techniques and in acquiring assets for future expansion.

In financing business operations and expansion, a business uses both short term and long term capital.. 

A company, much like an individual, utilizes short term capital to pay for items that last a relatively short period of time.  An individual uses credit cards or charge accounts for items such as clothing, food etc while a company seeks short term financing for salaries and office expenses.  On the other hand, an individual uses long term capital such as a bank loan to pay for home or car, which last a long time.  Similarly, a company seeks to pay for new assets that are expected to last for an longer period of time.

Usually, short term finance are considered those where the repayment period is less or equal to one year and more than one year is long term finance.

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Types of Group discussion?

Group discussion can be conducted mainly in 3 ways.
a) Topic Based
b) Case Based
c) Article Based.


In topic based discussions, you will be asked to discuss a knowledge based topic that may pertain to society, social trends, Politics, economics, legal, Information technology, sport or most importantly current events. Alternatively, one is said to discuss an abstract issue or an article published in newspaper.


Few Institutes for selection, ask the students to enact a role play and analyse the situations.



Evaluation Parameters of Group Discussion are.
i) Content
ii) Communication skills
iii) Group Behavior and
iv) Leadership skills.


Content refers to the quality of what you say. In a Group discussion, unless you know something about the topic, you will now be able to make a positive contribution to the topic or give direction to the efforts of the group.  The content that you use is the single most important factor that determines your success in a Group Discussion.


In communication, you are evaluated on how you say what you want to say. Communication does not refer to use of flowery language. Rather, it means conveying your ideas in such a manner so as to ensure that persons whom you are addressing, clearly understand what you are telling them.


The moderator expects you to make points logically and rationally as a mature adult.  Do no get carried aways by passion or don not be stubborn while trying to make a point in discussion.


You are not expected to physically lead a group by actions such as thumping the desk, shouting etc. Such actions should be avoided. Leadership, in the content of a Group Discussion, means showing direction to the group when it is running out of points to speak on or when it is straying from the given topic.

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