GMAT : An Introduction

Introduction to GMAT

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Owned by the Graduate Management Admission Council (GMAC), the Graduate Management Admission Test (GMAT) is a computer based, standardized test which is taken up by the students who want to apply to for various business management courses after graduation in order to attain a Master’s degree in Business Administration. Students appearing for GMAT can apply to more than 2100 universities across the world that offers a choice of more than 6000 programs  in various business and management streams. GMAT has its test centers in 112 countries and can be taken up at any point of time during a particular year, whenever the students would like to appear for the GMAT exam.

GMAT analyzes a person’s reading, writing, analytical, logical and quantitative skills through its unique pattern. It includes 4 sections that includes – Verbal Ability, Quantitative Aptitude, Analytical Writing and Integrated Reasoning. The sectional format for GMAT is as follows:

GMAT Test Section No. of Questions Question Types Duration
Analytical Writing Assessment 1 Topic Analysis of Argument 30 minutes
 

Integrated Reasoning

12 Questions Multi-Source Reasoning

Graphics Interpretation

Two- Two Part Analysis

Table Analysis

30 minutes
 

Quantitative

37 Questions Data Sufficiency

Problem Solving

75 minutes
 

Verbal

41 questions Reading Comprehension

Critical Reasoning

Sentence Correction

75 minutes
Total Exam Time     3 hours, 30 minutes

Why GMAT?

What edge does GMAT has over other exams is the question that comes first in the mind of anyone who wants to pursue a Master’s degree from some reputed B-School. The answer to the question is very simple. Being accepted by more than 6000 courses for business and management programs, GMAT is the first preference for world’s business leaders to get into the world’s leading business schools. It simply works. The skills that are respected by these leading schools can be very well showcased through the GMAT exam.

“Writing GMAT exam is ensuring your first successful step towards a glorified career.”

Once GMAT is cleared it guarantees you admission into world class business classroom. From nearly 60 years, reputed B-Schools all across the world have been trusting GMAT and have been using it to accept students in the courses offered by them. GMAT provides the following advantages not only to these schools but also to the students applying in these schools:

  • It provides a sync between the skills that you possess and those required by schools:With its unique Integrated Reasoning Section, GMAT allows you to showcase the skills that matter the most to these schools and business houses.
  • Tested and Certified measure of one’s success:After being researched for decades GMAT has been confirmed as a reliable and valid predictor of a person’s academic journey in the present world graduate management courses.
  • Having its acceptance by most business schools across the world: GMAT is accepted  by most of the management schools and allows you to take maximum number of courses. The number is way more than any other examination.
  • Give the exam when you feel like giving it: Once you are convinced about your preparations for appearing in the exam, you can sit for GMAT in world’s best state-of-the-art facilities specially designed to give you an incomparable test-taking experience so as to bring out the best in you.

GMAT Content Relevance

The content for GMAT has been designed in such a way that it evaluates your skills and abilities in one just 3 hours 30 minutes. All the sections are designed in a manner that they measure  your –

  1. Reading and Writing Skills –With the help of its Verbal and Analytical Writing sections you can be very well judged for your abilities on reading and writing. You can prove it in these two sections that you have the skills required in you.
  2. Understanding the Real world situations –The Integrated Reasoning Sections allows you to showcase your abilities in understanding the real world situations and inferring the relevant information out of them.
  3. Quantitative Reasoning power –The Quantitative Aptitude Section that brings to you data sufficiency and problem solving challenges allows you to display your abilities to solve the quantitative problems in one go.
  4. Comprehending Capabilities –The Reading Comprehensions under the Verbal Section allows you to display the brilliance in you as far as understanding of the passages is concerned. GMAT passages can be from ‘n’ number of fields like – economics, psychology, sociology, history, politics, literature, etc. Answer them correctly and showcase your comprehending capabilities.
  5. Analytical & Logical Abilities –Almost every section require you to apply logic and analysis in solving the questions. Pertaining to the questions in those sections, if you apply the correct logic and analyze them in the best manner, you can communicate your brilliance in these two aspects.
  6. Graphical Understanding –One thing that is very much crucial in any business is the understanding of the graphs. The Integrated Reasoning Section brings up such challenges for you. The correct solution to these problems displays your abilities in proper understanding of Graphs.
  7. Analysis of Situation – The Analytical Writing section provides you with one topic on basis of which you need to provide your analysis of arguments. Providing with the best reasons, analyzing the situations in the best manner, expressing them in the best written format allows you to score high, thereby showcasing your analytical and writing skills. 

 

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Posted by Yogita Kapoor Friday, October 21, 2016 01:15:00 PM 

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Belling the CAT

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Belling the CAT

Appropriate preparation and application of the right thought process can help you clear the CAT exam without much difficulty. Arun Sharma presents the QA section of the CAT 2007 exam with tips on how to approach each question and increase your chances of passing

One of the things that has amazed experts and academicians about the CAT for a long time now, is that the exam continues to retain it’s aura of invincibility. This, in spite of the fact that most questions, which appear in the exam, are elementary class ten questions. 

The quantitative aptitude (QA) section of the CAT 2007 paper presented below further reiterates the fact, that answering each question in a logical and methodical manner is the only way to clear the exam.

 

Reminders (about the paper) before proceeding further:

  1. a) Test takers who were able to attempt seven to eight questions of the total 25 questions in the paper received an excess of 95 percentile (for this section). Students were given 50 minutes to complete each section in the exam. Hence, even if a student answered one question correct every 6 minutes, he/ she would easily be one of the top 95 percentile holders in the section.
     
  2. b) At zero marks in this paper, students reported a 20 percentile score. This in effect means that one in five test takers scored negative marks!
     
  3. c) The QA section in the CAT 2007 paper has widely been considered as one of the toughest QA papers of all time. Presented below are simplistic solutions that can be taught to children as young as those in class five.

It is advisable to look at the provided thought process and solutions only after trying to solve the questions before.

 

 1) How many pairs of positive integers m, n satisfy 1/ m + 4/ n = 1/ 12 where n is an odd integer less than 60?

            (a) 7     (b) 5     (c) 3    (d) 6        (e) 4

 

Thought process
Deduction 1: Since two positive fractions on the LHS equals 1/ 12 on the right hand side, the value of both these fractions must be less than 1/ 12. Hence, n can only take the values 49,51,53,55,57 and 59.

Deduction 2: After this, students need to check which of the possible values of n would give an integral value of m.
 

The equation can be transformed to 1/ 12 – 4/ n = 1/ m –> (n – 48)/ 12n = 1/ m. On reading this equation one should realise that for m to be an integer, the LHS must be able to yield a ratio in the form of 1/ x. It can be easily seen that this occurs for n = 49, n =51 and n =57. Hence, there are only three pairs.
 

Maximum solution time: 90 seconds

 

2) Suppose you have a currency, named Miso, in three denominations: 1 Miso, 10 Misos and 50 Misos. In how many ways can you pay a bill of 107 Misos?

            (a) 18   (b) 15   (c) 19                 

            (d) 17   (e) 16
 

Thought process
Deduction 1: If you were to use two 50 miso notes, you would only pay the remaining 7 misos through one miso notes.
Deduction 2: If you were to use only one 50 miso note, you could use 10 miso notes in 6 different ways (from zero to five).
Deduction 3: If you were not to use any 50 miso notes, you could use 10 miso notes in 11 different ways (from zero to 10).
Hence, the required answer is 1+ 6+ 11=18.
Maximum solution time: 45 seconds

 

3) In a tournament, there are n teams T1, T2, …, Tn, with n > 5. Each

team consists of k players, k > 3. The following pairs of teams have one player in common

T1 and T2, T2 and T3, …, Tn (1 and Tn, and Tn and T1.

            
No other pair of teams has any player in common. How many players are participating in the tournament, considering all the h teams are together?

            (a) n (k ( 2)      (b) k (n ( 2)      (c) (n ( 1) (k ( 1)

            (d) n (k ( 1)      (e) k (n (1)

 

Thought process
If one considers six teams and four players per team, one would get four players in T1 (each one of them unique), three more players in T2 (since one player of T2 would be shared with T1), three more players in T3 (since one player of T3 would be shared with T2), three more players in T4 (since one player of T4 would be shared with T3), three more players in T5 (since one player of T5 would be shared with T4) and two more players in T6 (since one player of T6 would be shared with T5 and one with T1). Hence, there would be a total of 18 (4+ 3+ 3+ 3+ 3+ 2) players with n = 6 and k = 4. Only option four would provide 18 as the solution.

Maximum solution time: 60 seconds.

4) Consider four digit numbers for which the first two digits are equal and the last two digits are also equal. How many such numbers are perfect squares?

(a) 4     (b) 0      (c) 1 (d) 3     (e) 2

Thought process
A number of students got stuck on this question for over five to seven minutes in the exam, since they tried to find out the squares of all two-digit numbers starting from 32. However, if one is well of the logic of finding squares of two digit numbers, one would realise that only three two-digit numbers after 32 have the last two digits in their squares equal (38, 62 and 88). Hence, there is no need to check any other numbers apart from these three. After checking these one would get the square of 88 as 7744. And hence, there is only one such number.

Maximum solution time: 60 seconds

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Posted by Yogita Kapoor Sunday, October 16, 2016 12:02:00 PM

Ten Commandments of CAT

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  1. ONLINE FAMILIARITY: Online exams are a thing of the recent past and CAT aspirants need to ease up to giving exams on the computer. In usual practise, most people go online for emails, social networking or simply surfing, all of which stretch for short periods of time. To be sitting for a couple of hours in front of a computer, in a tense environment can lead to stress, which could come in the way of performance. Arun Sharma says that CAT aspirants have to practise reading on the computer daily for a period of time. 
  2. ERROR REMOVAL: Arun Sharma insists that aspirants should give a considerable amount of study time on error removal. He further states that error sources in each question type is one of the most important issues during the lead up to the examination. Remember, “error removal is the easiest and fastest way to improve your score drastically.” 

III. ADOPT A STRATEGY: Every battle won in this world has always had a clever strategy behind it.Arun Sharma says that aspirants should spend the last 15 days before the test date in revising every question that one has solved during preparations. “Your preparation should be such that things should strike you during the exam rather than after it,” adds Sharma.

  1. MORE THE BETTER: There is strength in numbers and no better way to know it than in CAT preparation. Sharma asks CAT aspirants to take as many tests as possible as additional tests will only make work easy for them on the final day.
  2. PROPER ANALYSIS/REASONING: Arun Sharma takes the word analysis to a different level. Sharma says that aspirants must take time in analysing themselves as well as their studies. “For every test you take be sure to do a proper analysis. For every minute spent inside the test, you should spend at least 2 minutes outside analysing your performance in the same,” the author insists.
  3. KNOW YOUR STRESS POINTS: Sharma says that in Quants, the student should focus on balanced portion coverage, which essentially means covering every aspect of the portion. “This is important because unlike the earlier CAT examinations, the online CAT in 2009 had a much more balanced portion coverage structure.”

VII. SPEED HELPS: Speed is also a factor to keep in mind for a good score. Sharma suggests: “Work on your speed and reliability of calculations- especially focusing on 2 digits additions, multiplications and ratios. Also focus on approximation of ratios.”

VIII. QUEEN’S ENGLISH: Just a good grasp over colloquial English is not good enough to do well in CAT. Sharma says that CAT aspirant should focus on the ability to read and understand longer sentences on complex topics. “This is the most critical skill. If you can understand sentences, you can understand paragraphs and passages,” he adds.

  1. HOW MUCH TO STUDY: There is no single formula on ‘how much to study’ or else there would be more toppers than others every year. Each student needs to make his time-table according to his needs and capabilities. According to Arun Sharma, studies need to be planned with a design in mind. He advises, “plan your studies in such a way that you complete the last part of your preparations at least 15 days before you sit for the CAT.
  2. CAT – PAST AND FUTURE: Sharma recommends that aspirants create a strong back up plan for the next year in case one does not make it through. “We do not want those taking exams to be thinking on it while facing a problem during the exam,” the author said. 

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Posted by Yogita Kapoor Thursday, October 13, 2016 1:50:00 PM 

Aptitude preparation – The intelligence growth perspective.

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I have often been questioned about this – at workshops, in my classes, in social discussions and in corporate training programs….”Is a person’s IQ fixed?” Before I proceed to answer this question in this piece, I would like to first recount a very interesting experience I had once across a week in my life. In that week I was scheduled to speak to three different age groups of people – apart from my normal bread and butter aptitude classes for CAT and CSAT (where my audience is anywhere between 18 to 28 years of age) I also had speaking assignments in the same week at i) A corporate organization where I was supposed to talk about personality development and leadership & ii) A girls school – where I was supposed to talk about career planning – the first assignment being scheduled prior to the second.

So it was that I was speaking to this group of corporate executives who were in the 35 to 50 age group and included some very high-ranking executives in the hierarchy of the particular organization. And in my first hour of session with them, somehow we came around to the topic “ Is a person’s intelligence fixed? Is it something that one is born with??” & in case one is not born with it does it mean that he/she should simply accept the misfortune and carry on with one’s life. My contention as I started to speak about the issue was “No, Intelligence is not fixed!! It can be raised & there can be a system through which someone’s thinking capacity can be upgraded and developed.”

And the moment I uttered this in that august gathering- I faced a heavy backlash with people questioning the very thought!! It took me the better part of the next hour to get to the point where I had convinced the group about it.

And so it was that with this background I went to face 13-14 year old girls in high school & the first slide of my presentation carried this question loud and clear “Can intelligence be raised??” My plan while preparing my speech was to spend something like 20 to 30 minutes on the same (based on my experience with corporate vice presidents a couple of days earlier) before I moved on to other aspects of intelligence development based career planning. And lo and behold!! As soon as I read out the question to this group of young ‘inexperienced’ girls the whole auditorium resounded with a ‘YES’ and suddenly I did not know for a moment about what to say next – as my prepared plan for the next part of my speech had gone for a six.

Luckily my experience at public speaking carried me through the remainder of my presentation but it did set me wondering about a fact of life that was starkly brought out to me through these experiences & that was:

45-year old corporate vice presidents KNOW and KNOW damn well that IQ and intelligence is fixed. Their experience has taught them this very well.

The 13 year old school girl of course is ignorant of this fact – she believes that IQ can be raised because ‘reality’ as the world will show her over the next two decades has not dawned upon them and somewhere in between these two end points is the student preparing for aptitude exams like CAT, CSAT and the whole lot. He/she is on the way to finding out that intelligence is fixed and cannot be changed.

In my view this entire social learning process – where society teaches us this ‘fact’ is at the root of all under achievement that you, I and every Tom, Dick and Harry experience in our lives.

Just as surely as you can improve what can be called as your ‘physical intelligence’ (as Gardner calls it), so also can you raise your mind’s capacity to improve the processes and the capacity it has of thinking.

Not exploring this option – the option of raising your intelligence – is perhaps the biggest mistake that a majority of the work force make.

Think about it & think about it very seriously if you are embarking on a journey of CAT/CSAT preparation or for that matter any other aptitude exam that is likely to determine the course of your life.

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Posted by Yogita Kapoor Tuesday, October 04, 2016 04:05:00 PM

 

GD/WAT Topic for IIFT, XLRI, IIMs, SIBM, and other B schools- Trends in India’s Foreign Policy

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India is rising and so are its international profile, engagements and obligations  growing significantly. With time, comes new, challenging and critical demands on India from international community which arouse and strain, India’s aspirations and legitimate interests. There comes the need for charting the India’s foreign policy and the position that India should take, or not take, on specific issues.

Fighting three wars with Pakistan in the west due to the conflicting claims to the state of  Kashmir, loss in 1962 war with China in the North over a long disputed border, China’s nuclear tests and its supplying of arms to Pakistan exacerbated Indian insecurity. India pledged itself to non alignment on the international stage and it diluted its non-aligned stance in the 1970s by developing a special relationship with the USSR which bestowed India with diplomatic support over issues such as Kashmir.

India steadily drifted towards the Soviet Union and its relations with all the other major centres of power –the US, Western Europe, China and Japan– remained underdeveloped during the cold war. And now India and the US are locked in an unprecedented engagement, at once intense and expansive. Beijing is now India’s largest trading partner in goods after the prolonged chill in India’s bilateral relations with China from the 1960s to the 1980s,  and while it is building strategic partnerships with the EU and Japan, India has also managed to hold on to its special relationship with post Soviet Russia.

Foreign direct investment was not encouraged as in 1990 it amounted  only to a few hundred  million dollar. In 1970s the expulsion of  IBM and Coca cola, was viewed as a progressive step encouraging economic self sufficiency. Perhaps, this was a natural fear in a country that had been colonized by a commercial enterprise i.e., the East India Company. In 1993, China signalled  a shift from its long standing tilt on Pakistani side on the Kashmir issue which improved its relations with India.

India has seen significant changes in its international and domestic environment over the past few decades which has challenged two basic foreign policy premises. First, the creation of a centrally directed economy has been emphasized, which would be designed to develop the industrial and technological capabilities with minimum foreign investment and maximum self reliance. Second, the need and desire to maintain a nonaligned foreign policy that evolved into a close relationship of convenience with the USSR.

Going back to 2000, President Clinton’s five day visit to India and Indian Prime Minister Vajpayee’s reciprocal visit to U.S. threw the light on a much improved bilateral relationship. Apart from this, the hearing that the Vajpayee government gave to the deputy secretary of the U.S. state department, Richard Armitage was the indicator of continuity in the improved relationship. These official visits drew attention to a crucial reorientation of Indian Foreign policy. During these visits, the Indian side stressed on Indian business and the economy and the importance of close relationships with countries that would help it grow economically.

A  new  trend  is  emerging  in  Indian  Foreign  Policy  with  New  Delhi becoming major development partner for many countries in South Asia, Southeast Asia & Africa.

Regardless of the change with time, the foreign policies of large countries like India are always based on a set of core values. The usual turnover of governments and leaders have no effect on them and nor do they alter much over time. The commitment of India to internationalism, independence of judgement in the conduct of external relations, support for world democratisation and contributions to the maintenance of international peace and security are legacies of India’s national movement.

In the 21st century, India’s foreign policy will remain rooted in these core values, but Delhi must necessarily adapt to changing external circumstances and its shifting domestic needs. Its main purpose, however, will remain the same: the creation of a favourable external environment for the rapid improvement of the living standards of the Indian people.

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Posted by Yogita Kapoor, September 27, 2016 12:37:00 PM 

GST – AT A GLANCE

The introduction of Goods and Services Tax (GST) would be a remarkable step in the reform of indirect taxation in India. As the name suggests, GST is imposed when a consumer purchases any goods or services. This bill will be India’s biggest tax reform since independence as it will untangle the current taxation policy by integrating all indirect taxes(sales tax, VAT etc) with sole tax

GSTimage

From the consumer point of view, the immense edge would be in terms of a reduction in the overall tax liability on goods, which is presently evaluated at 25%-30%, free movement of goods from one state to another without obstruction at state entrance for hours for payment of state tax or entry tax and relaxation in paperwork to a monstrous extent.

GSTimage2

Many taxes has been subsumed GST which are as under:

Central Indirect Taxes & Levies:

  • Central Excise Duty
  • Excise Duty levied under the Medicinal Preparations (Excise Duties) Act, 1995
  • Service Tax
  • Additional Customs Duty (CVD)
  • Central Surcharge and Cess

State Indirect Taxes & Levies:

  • VAT/Sales Tax
  • Entertainment Tax (other than the tax levied by local bodies)
  • Central Sales Tax
  • Octroi & Entry Tax
  • Purchase Tax
  • Luxury Tax

 

Favorable Aspects:

  1. The major purpose to execute GST is to remove the cascading effect on tax. A product on which excise duty is paid can also be liable for VAT. Suppose a Product A is manufactured in a factory. As soon as it releases from factory, excise duty has to be paid to central government.  When that Product A is sold in the same state the VAT then VAT has to paid to state government. Also no credit on excise duty paid can be taken against output VAT. This is termed as cascading effect since double tax is levied on same product.

 

  1. The GST is being instigated to create a standard market across states, not only to avoid crippled effect of indirect tax but also to refine tax compliance.

 

  1. GST will conduct a better explicit and unbiased manner to increase revenue.

 

  1. Cost depletion as credit of input tax is available against output tax.
  2. Untangled and price saving system as procedural cost reduces due to uniform accounting for all types of taxes. Only three accounts, CGST, SGST, and TGST have to be maintained.

 

  1. GST is build to untangle the present indirect system. It is long term plan leading to a higher output, more employment opportunities and economic boom.

 

  1. GST is favorable for both economy and corporate. The depleted tax load on companies will diminish production cost making exports more aggressive.

 

Unfavorable Aspects:

  1. GST is being mentioned as a sole taxation system but in actually it is a two fold  tax in which state and center both  accrue separate tax on a sole transaction of sale and services.

 

  1. At present the main tax indirect system of Central Government excise. All the goods and commodities are not covered by the central excise and further there is an exemption limit of Rs. 1.50 Crores in the central excise and further traders are not liable to pay central excise.   The central excise is payable up to the stage of manufacturing ,but now GST is payable up to sale.

 

  1. Most of the dealers are not covered with central excise but are only paying VAT in the state. Now of all the VAT dealers it will be mandatory to pay “Central Goods and Service Tax”

 

  1. The calculation of RNR ( Revenue Neutral Rate) is very difficult and further Govt. wants to intensify  its revenue hence rate of Tax will be problem. As per the news reports the propounded rate for state GST is 12% and Central GST is 14% plus Govt. wants to impose 1% CST  at the primary stage of GST on the interstate sale of goods and services. So the common rate of overall tax will be 26%. The rate is very high collating to the fact that small and medium industries are at present not covered by central excise and most of the goods such as agricultural products are out of the preview of the central excise.

 

  1. Advancement in the manufacturing and distribution of goods, increase in exports, various reforms, check on corruption, less government control are some of the components responsible for the economic growth of the country. A tax system can make revolution in the economy of the country is “rarest of the rare” thing.

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Flavours by Mindworkzz

Hello Friends,

We as trainers have seen over the years that students and even others struggle to abreast themselves with general knowledge/ current affairs but many of them give up mid way. This happens due to two reasons – first, either they lose interest in the quest or second,they find it too difficult to find the right place for these inputs . So they end up wasting their time on it and finally give up.

We might have the right solution for you on our website.

Mindworkzz now introduces a series of value added articles called ‘Flavours’.

These ‘Flavours’ will be topics that are important for general awareness both relating to national and international affairs.

There will be Flavours for the week, fortnight and sometimes even for a whole month.

The articles presented here will be lucid and full of inputs so that once you read them you can know from A to Z about that topic. It will be our focus to provide you with knowledge inputs about as many diverse topics as we can.

So that ,even if you are not a reader/ student of that subject you would have some knowhow about the same.

We would be happy with your inputs and feedbacks about it. It will help us improve and service you better.

Our focus at Mindworkzz has always been to upgrade the level of the people who are associated with us in any way and this is one more step in the journey.

So keep following our latest updates and tweet, like, share and recommend us if you like what we are doing.

We start from the 1st of February 2014

The first Flavour in our series is “INDIA’S   FOREIGN   POLICY !!”

 

Happy reading… and GET SET …..GOOOOO !!!! FOR AN —-INFORMATION OVERLOAD !!!! J

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Current Affairs/GK/GD/WAT Topic for IIFT, XLRI, IIMs, SIBM, and other B schools-India’s Foreign policy

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India with the seventh largest military expenditure, third largest by way of purchasing power, the ninth largest economy in the world, not to mention the most populous democracy in the world has a working relationship with most of the countries. India has collaborated with several nations globally and its growing international influence gives it a prominent voice globally.

Besides the Non-Aligned Movement [1961], India has been one of the founding members of several international organizations.  Most prominently, the United Nations Organization, Asian Development Bank [1966] and G20 Industrial Nations have benefitted from India’s association with them.  India has also played a prominent role in other international organizations like International Monetary Fund, World Trade Organizations and East Asia Summit.  India has taken part in several United Nations Peace Keeping Missions and in 2007 was considered the second-largest contributor of troops to the UNO.  In the Asia specific region, India is part of SAARC and BIMSTEC. India is currently seeking a permanent seat in the UN Security Council which is dominated by the Big 5, the United States of America, Russia, China, United Kingdom and France. The Group of four or G4 are the regional powers that stand the chance of becoming the new permanent members of the Security Council and that include India, besides Germany, Brazil and Japan. The G4 mutually supports each other’s bids to be part of the UNSC.

India’s foreign policy has evolved since the times of British Raj. Post independence India became part of the Commonwealth of Nations and strongly supported the independence of other British Colonies, especially the Indonesian National Revolution.  During the Cold War India adopted a policy of non-alignment and did not lean towards any power bloc. However, it developed close ties with the Soviet Union and received much military support from it.

India’s conflicts with both Pakistan[’65 and ‘71] and China[1962] and the growing cooperation by US and China towards Pakistan led India to do a balancing act and sign the Indo-Soviet Treaty of Friendship and Cooperation in the year 1971. The closeness with the Soviet Union cut India’s acceptance both as a regional power and an international influence as its proximity with Moscow meant going soft on the Soviet Union’s occupation of Afghanistan.  The end of the Cold War and the coming down of the Berlin Wall demolished the core principles of non-alignment. With the changing face of world dynamics and mounting international and domestic problems for India, it was forced to rethink its strategy on its foreign policy as it set out to add dynamic dimensions to it. The end of the bipolar world meant that India lost on its high moral ground of maintaining equi-distance with the US and the Soviet Union and drawing developmental assistance both from the West and the East.

The disintegration of the Soviet Union led India to engage US, Canada, France, Japan and Germany in the 1990’s. The Pakistan sponsored terrorism in Kashmir and the Kargil conflict of 2001 brought India diplomatic victory. Post the 9/11 attacks and the consequent War on Terror brought about much information sharing and closer strategic ties between two of the world’s greatest democracies–India and US. The surge in the Indian economy has led to doubling of trade between India and United States and the Economic Union in the last five years.  

Salman Khurshid, India’s Foreign Minister in his recent utterances has nuanced that India plays a crucial link between the developed nations and the developing world.  While India favourably engages both Washington and Beijing, it is developing strong national and economic relations with the G20 Nations. G20 is a group of 19 developing economies plus the European Union [represented by their Finance Ministers and Central Bank Governors]. Collectively, the Group incorporates two-thirds of the world’s population and 80 percent of the world trade.

India has also forged strong strategic ties with Association of Southeast Asian Nations [ASEAN], the Arab League, the African Union and Iran.  Israel has emerged India’s second largest military partner and the Indo-American Civil Nuclear Deal signed and implemented in the year 2008 reflects a watershed moment in the Indo-US ties.

While India’s foreign policy reflects a centricity of well meaning relationship with neighbours, commonality of historical and cultural aspects plays a crucial role as its central axis. With more than twenty two million Indians working and living abroad, protecting their interests and welfare remains an important feature of the nation’s foreign policy.

India’s strategic location, surging economy and a huge and vibrant diaspora has earned it more allies than enemies. 

Article by: Viveik Pandit

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Current Affairs/GK/GD/WAT Topic for IIFT, XLRI, IIMs, SIBM, and other B schools-India’s Foreign Policy Post-Liberalization

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24th July, 1991 was a turning point for the Indian economy – the day that marked an end to the socialist policies, which India adhered to since its independence. It’s the day when Indian economy became open to the world. Prior to the reforms that began in 1991, the Indian rupee was inconvertible and imposition of high tariffs and import licensing prevented the foreign goods from reaching the Indian market. The complex bureaucracy only provided with hindrances for the firms, who had to satisfy number of agencies in order to attain a license for manufacturing purposes. The state decided what to produce, how much, at what price and what sources of capital to be used. Lay off of the workers or closing factories was prevented. India being a colony for almost 300 years developed a belief that it needed to rely on its internal market for development and not on international trade – a belief that was marked by a mixture of socialism and colonial exploitation. How much to be invested and where to be invested was determined by the state, rather than the markets. During 1947 to1991, there were two attempts( in 1966 and 1985) to liberalize the economy which could not be materialized.

In 1991, India faced severe Balance of Payments crisis, wherein, it had to pledge 20 tonnes of gold to Union Bank of Switzerland and 47 tonnes to Bank of England. The government of P.V. NarsimhaRao and his finance minister Manmohan Singh came up with the breakthrough reforms that opened the economy to international trade and investment, deregulation, privatisation, tax reforms and inflation controlling measures. Since then the path of liberalization has been prevailing, no matter whichever be the ruling party.

The impact of such reforms was such that the foreign investment in India grew from a petty sum of $0.132 billion in 1991-92 to $5.3 billion in 1995-96. Post- Liberalization, India’s international trade has increased a lot(value wise), with trade in goods and services rising from 16% in 1991-92 to 47% in 2008-10. Worldwide India holds 1.44% of exports and 2.12% of imports for merchandise trade and 3.34% of exports and 3.31% of imports for commercial services trade at present. India now extends its hand to – The European Union, China, USA and UAE, as its trading partners. The major export commodities include engineering goods, petroleum products, chemicals & pharmaceuticals, gems & jewellery, textiles & garments, agricultural products, iron ore and other minerals. Whereas, the major import commodities are oil & related products, machinery, electronic goods, gold and silver. Trade deficit for November 2009 dropped from US$7.5 billion to US$6.4 billion in November 2010.

If we talk about the balance of payments for India-post-liberalization, India’s export has risen constantly. Dependency of India on external assistance and concessional debt has substantially decreased. In order to keep a check on foreign exchange reserves, the Ministry of Finance came up with the Foreign Exchange Management Act (FEMA) in 1999, that regulates the External commercial borrowings (ECBs), or commercial loans from non resident lenders, that provide the Indian corporate with additional source of income.

Coming to tthe foreign direct investments (FDI), India has witnessed a drastic change in the flow and direction of FDI into the country. In 1991-92, FDI was about $129 million which increased to $40,885 million in March 2005 and reaching $1, 00,000 million in 2010 – an increase of about 1026 times. The proposed  FDI limits in some of the major sectors are: Petroleum & Natural Gas – 49%, Commodity Exchange – 49%, Power Exchanges – 49%, Single Brand Retail Outlet – 100%, Aviation Sector – 75%, Private Sector Banks – 100%, etc.

Talking specifically about the Banking sector,  RBI Governor RaghuramRajan has said that The Reserve Bank of India (RBI) is all set to unveil banking sector reforms, which would allow foreign banks to enter Indian market in a big way and even contemplate taking over Indian Banks.While the issue of granting bank licences to a few private banks is gaining momentum, the Reserve Bank of India (RBI) has released important guidelines for foreign banks to participate in the Indian financial sector in a bigger way than what has been possible so far. The two developments have one common objective — that they are meant to deepen the financial sector.

To conclude, we can say that, India, being an emerging market just like China, has managed to handle the crisis very well. However, recent global recession and instability in the political system has hampered the ongoing rise in the economic trends. Reforms have stalled since 2004, with no prospect for big change and maintaining such existing levels of growth have become difficult. Still, there is always a room for improvement. India’s biggest challenge is to stimulate further unilateral trade and FDI liberalization related to domestic structural reforms. We have to accept these challenges and need to formulate appropriate and result oriented foreign policy. Policies must be formulated in a manner that attracts more and more foreign investors to carry out business in India, thereby adding to the growth of national economy. This needs serious deliberation at the policy making level.

Article By: Ishan Mishra

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Important concepts in marketing

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“Don’t find customers for your products, find products for your customers.”

Seth Godin

Marketing is an organizational function and a set of social and managerial processes for creating, communicating and delivering value to the customers as well as for managing customer relationships in dynamic ways that benefit the organization and its stakeholders. Peter Drucker, inventor of management by objectives concept said, “There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”

The world of marketing is dominated by the needs, wants and demands of various stakeholders. It incorporates exchange and transaction of diverse marketing offers in a marketplace aimed at building relationships by delivering value and satisfaction. A holistic marketing approach is an amalgamation of internal marketing, integrated marketing, relationship marketing and socially responsible marketing which envelopes the marketing department of organization, its products and services along with channel partners focused on all stakeholders taking into due consideration environment, ethics and legal regulations.

The 4Ps, expressed by E J McCarthy is one of the best known way for marketing mix. This model is helpful is testing one’s existing marketing strategy or development of a new strategy to enter new market or launch new offers. The 4 Ps are Product, Price, Promotion and Place. These factors of marketing mix are aligned to customer demands which brings us to our next concept of 4Cs. These takes into consideration customer solution, customer cost, convenience and communication. The integrated analysis of 4Ps and 4Cs help us to innovate new methods to maximize customer equity, customer profitability and overall customer lifetime value.

Achievement of greater value in an organizations plays significant role in driving its business and growth. This value created can captured by a firm in terms of its profit margin. Hence the concept of value chain was introduced in 1985 by Michael Porter in his book, “Competitive Advantage”. Porter’s value chain tells us how to deliver or produce higher customer value and satisfaction. This tool identifies five primary activities, representing actual product creation and four secondary activities representing support actions. Primary activities encompasses inbound logistics, operations, outbound logistics, marketing and sales and after sales services. While secondary activities comprises of procurement sources, technological development, human resource management and infrastructure of the firm. Task of the business entity is to examine the cost and performance in each value creating activity along with its improvisation. Success depends on performance of each unit as well as co-ordination between individual units.  The core business processes involving cross functional inputs and cooperation needs to be managed smoothly.

SWOT analysis, coined by Albert s Humphrey is a useful technique for understanding one’s strengths and weaknesses, explore new opportunities and manage and eliminate threats. It helps us to carve a sustainable niche in the market. S signifies strengths which unravels the unique selling proposition (USP) of the organization, advantages, unique or low-cost resources in relation to the competitors. W symbolizes weaknesses which focuses on the areas of improvement or factors leading to loss of sales. O denotes opportunities which can be explored further to develop them as strengths. It can result from change in technology, government policies, social patterns, population demographics, change in lifestyle etc. And T implies threats enlisting the obstacles faced, intense competition, bad-debt or declining cash flow issues, degrading quality standards and so on.

The STP model i.e. Segmentation, Targeting and Positioning is one of the most popular marketing models in practice. It comes in handy while developing marketing communication plan assisting the marketers in prioritizing their propositions aimed at delivering customized messages to engage with target audience. The markets can be segmented based on geography, demographics, psychograph and behavior. The identified market segment should be accessible, measurable, substantial and viable.  The segmented markets can be targeted after evaluating their potential and commercial attractiveness. Positioning of the product is the last step of STP process aimed at formulating suitable marketing mix for each target segment.

However customers can’t tell what they want, but they can always tell you what’s wrong. Hence these tools only acts as helping hand in taking an informed decision. It is always you, who has to decide as marketing managers giving due importance to the emotional aspect of people as well.

Article By :Anupam Akansha

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