Sudhir Ahluwalia's Blog, page 18
June 16, 2022
What are the best cost cutting ways for a business?
Begin by identifying waste in your business. Anything that is not contributing to the generation of revenue will be the first place to look.
Let me explain this concept with an example. An entrepreneur asked me to help turn around his company that could not service debt. It was an IT services company with workforce strength of 1000 people.
The process that I followed was as follows:
I began by spending a few days examining in detail all his revenue and cost streams. It required looking at contracts, progress reports, balance sheets, speaking with staff, etc.
It was clear that the business was getting a regular stream of business, but a lot of that business was not yielding revenues that would cover all his costs. The more company you secured, the more losses were getting generated.
The business was being run on debt to maintain cash flows. Immediate stopping this low-margin business would have resulted in bankruptcy.
Once the problem is identified, the turnaround process is put in motion. Those parts of the organization generating revenues that would cover costs and bring in higher margins were encouraged. The low-margin loss-making areas of the business were slowly and steadily phased out. People in the loss-making low-margin components were axed, and more staff was added where the margins were good.
Turning around and cost-cutting is a delicate and company-specific exercise. It is done with a lot of care and caution. Cost-cutting should not lead to disruption of the business and its bankruptcy. There is no size fit solution. But is it all about identifying and removing waste?
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June 15, 2022
How can you enhance your restaurant’s marketing strategy?
The fundamental principles of marketing revolve around the 4 P model. The four Ps are product, pricing, place, and promotion. Often people confuse marketing with advertising. Advertising is a subset of marketing and represents only one of the four Ps. Digital marketers also focus only on promotion. Many entrepreneurs are misled into investing and focusing on promotion only. With this back theoretical background, let us look at your restaurant.
Developing a great marketing strategy for your restaurant begins with the menu. The menu should contain products that your customers want to buy. It should add value to your customers and meet their needs.
The chef is critical to a restaurant. They produce products that customers find delight in consuming. Invest in a chef that makes products that the market segment of your customers loves to indulge in.
The next component is price. Pricing your products should be done after studying customers’ willingness to pay. Willingness to pay is linked to all the Ps in the marketing model.
Promotion is the component that most entrepreneurs focus on. They blame the consultant when social media campaigns and advertisements don’t achieve the desired results. The problem is that they have forgotten to focus on the 4 Ps.
I have provided you with an overview of the 4 P model for your restaurant. But the success of a business has much more than marketing to it. It sits on the fundamental foundation of business strategy and is driven by a business model. A successful business requires strategy, business model, and marketing.
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June 14, 2022
What is the impact of climate change on developing countries and Nepal?
Agriculture is often the mainstay for people of most developing countries. Most of the poor live in South Asia, Africa, and Latin America. Climate change is causing summers to get hotter, rainfall during monsoon, and the number of adverse weather events is rising.
Hotter summers are forcing plants to speed up their growth cycle. Fruiting and seeding are happening quicker, and crops are reaching maturity faster. It is impacting crop yields negatively, and reduced agricultural production is seen.
With food production negatively impacted, the poor are most hit. Climate change’s impact is most felt by the poor. Poverty and health are getting exasperated.
Nepal has both mountains and plains. Agricultural productivity in the plains will be negatively affected, and soil erosion and landslides will become more frequent in the hilly parts of that country. Glaciers in Nepal feed rivers. The pace of melting glaciers is reported to increase. As time passes, river water in the dry seasons will become scarcer, affecting riverain communities, hydel power, and drinking water.
The impact of climate change on the future of Nepal is not very bright.
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June 13, 2022
Are there references to saffron in the Bible?
The Bible is not just a religious book for the Jews and the Christians, but it is also one of the early records of life, as it existed from around the 7th century BC up to the end of the first century AD.
Saffron is perhaps the most expensive and ancient among incenses known to man. Saffron-based pigments were probably used to make stencil prints on the walls of caves by the earliest cave inhabitants around 30000 BC. But the earliest saffron dye pigments used in paintings probably go back to the Minoan period. In Crete in 1450 BC, a volcanic eruption buried the Minoan palaces and buildings in a cloud of dust, where they remained until archaeologists discovered them. A building called Xestes 3 in Akrotiri, Greece, has several frescoes of girls and women gathering saffron flowers and bringing them to a goddess seated on a three-tiered platform on a cushion of saffron. Another fresco from the same site shows a woman’s bleeding foot being treated with saffron. Saffron at that time may have been collected from the wild. The species shown in the frescos is probably Crocus cartwrightianus.
Saffron was also one of the most valued and expensive aromatic spices of Greco-Roman times. The Greeks called it the “Blood of Hercules.” It was used as a ritual incense and regarded as a protective amulet. It was associated with fertility and romance, and nobles used it to perfume clothes and baths. Homer states that Greek gods Zeus and Jupiter lay on a bed of saffron to enhance amorous emotions. Dioscorides, the Greek physician, mentions the aphrodisiac properties of saffron. It is also cited as a ritual incense in the Orphic mysteries of the cult of Dionysus.
The Talmud contains multiple references to saffron, and it is one of the 11 ingredients of the Ketoret Holy Incense. In Christianity, saffron is not a spice of major religious significance. There is a single reference to saffron in the Bible in Song of Solomon 4:14, where it is mentioned along with other incenses. During the Crusades, Christians brought large quantities of saffron, a highly valued commodity from the Holy Land, to their European homes in France and England. Saffron was then extensively planted in France and England and became hugely popular.
Hippocrates and Galen’s mention using saffron to improve digestion, reduce flatulence and colic, and calm the nerves of adults and children. In Book II of the Canon of Medicine (al-Qanun fi al-tib), Avicenna describes various medicinal uses of saffron, including its use as an antidepressant, hypnotic, anti-inflammatory, hepatoprotective, a bronchodilator, aphrodisiac, labor inducer, and emmenagogue. Most of these effects have been studied in modern pharmacology and are well documented.
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June 12, 2022
Does climate change impact the scenario of a large river basis?
Climate change is impacting the entire planet. It is impacting oceans, continents, and ecosystems. I recently completed a study on strategies for North East North Africa food securities, and the analysis clearly showed that the Nile basin is getting impacted.
In India, the Indo Gangetic plains that are the basin for the River Ganges river system are getting impacted. Much work has been done on the impact of climate change on the Amazon basin. The common feature in these cases is that global warming affects the ecosystem across these basins and the whole planet. The changes are gradual, and the pace of change varies yearly, as expected.
There is clear evidence that the Himalayan glaciers are steadily shrinking. It will impact river water flows in all systems dependent on glacial flows.
Rivers worldwide are sources for irrigation, recharging groundwater, provide drinking water to towns and cities. Climate change disturbs weather patterns. The frequency and intensity of extreme weather events will increase. These events can be in the form of excessive rainfall or long period of droughts. The impact of global warming leads to the depletion of the water sources of rivers, and the water requirements in the basin have to be augmented by groundwater. Such interventions can lead to the rapid depletion of this resource. A rapid drop in groundwater is witnessed in the Indo-Gangetic plains, threatening agriculture and the way of life in the region.
The NENA region is water and food deficit region. If global food imports are impacted further, we could be faced with the specter of people tapping into the non-renewable ancient Sahara water resource. It will be a scenario that could be described as armageddon.
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June 9, 2022
Does sustainability have a future?
Sustainability is a goal for humanity. It is environmentally responsible and will move society to be egalitarian and tolerant.
The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. The following are the 17 SDGs listed:
GOAL 1: No Poverty
GOAL 2: Zero Hunger
GOAL 3: Good Health and Well-being
GOAL 4: Quality Education
GOAL 5: Gender Equality
GOAL 6: Clean Water and Sanitation
GOAL 7: Affordable and Clean Energy
GOAL 8: Decent Work and Economic Growth
GOAL 9: Industry, Innovation, and Infrastructure
GOAL 10: Reduced Inequality
GOAL 11: Sustainable Cities and Communities
GOAL 12: Responsible Consumption and Production
GOAL 13: Climate Action
GOAL 14: Life Below Water
GOAL 15: Life on Land
GOAL 16: Peace and Justice Strong Institutions
GOAL 17: Partnerships to achieve the Goal
Each of these 17 goals represents the aspiration of humans anywhere on this planet. They are essential for a better future.
Will these goals end war, hunger, poverty, global warming, deprivation, inequality, and injustice? We know the answer. That has not happened over the past 10000 years of the history of modern humans. But these are good to have goals. Good for all nations and human beings to strive to attain.
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June 7, 2022
How many trees do we need to plant to stop climate change?
Climate change is occurring because of the global warming effect of Greenhouse Gases (GHGs). According to the Inter-Governmental Panel for Climate Change projects, we will see global average temperatures 2.6 to 4.8 degrees Celsius higher than the present by this century. Even if emissions were to be stopped immediately, temperatures would remain elevated for centuries due to greenhouse gases from past human emissions.
We can prevent the most severe effects of climate change affecting the planet by keeping the rise in average global temperature since pre-industrial times below 2 degrees C.
Human activities have caused greenhouse gas concentrations in the atmosphere to show a sustained rise since 1750. Carbon dioxide, methane, and nitrous oxide are the major contributors to greenhouse gases. Of the last four decades, each decade has been successfully warmer than any decade that preceded it since 1850. The World Resources Institute (WRI) estimates that the total GHGs in 2016 was equal to 49.4 Gt CO2 equivalent. Sixty-five percent of all carbon emissions came from energy use.
Trees and oceans absorb and hold carbon in the air. It is, for this reason, these are called carbon sinks. These will help bring the atmospheric load of carbon in the air down. The destruction of forests and other ecosystems is undermining the ability of nature to regulate greenhouse gases.
However, the solution to slowing the pace of global warming lies in changing the nature of the human activity that today is dependent on fossil fuel-based energy. Planting trees will help, but the world has to decarbonize to prevent vast parts of humanity face climate-induced catastrophe. Just by planting trees, we will not be able to reverse global warming trends.
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June 6, 2022
Why is it the world’s two largest economies have failed to provide climate leadership?
According to the MIT Technology Review Insights- The Green Index report for 2022 has the US at 21, ranking up from last year’s 40th position. Similarly, China’s rank is 26 in 2022, up from 45 last year. Iceland, Denmark, and Norway hold the top three positions.
The world’s global economy is built on energy produced from fossil fuels. As the world understood that climate change is rapid, a consensus emerged: it should transition away from fossil fuels and re-build the world again on low carbon fuels.
US and China are giant economies built on fossil fuels., Transitioning these economies from coal and oil to renewables and green hydrogen without disrupting people’s way of life in these countries will take longer compared to smaller European economies.
The carbon economy of yesteryear and today has, over time, built vested interests that profited from carbon-based energy-produced goods and services. Persuading vested interest to decarbonize their business will happen when customers pressure and force the transition.
US and China have two diametrically opposite development and political models. Both are facing internal resistance to making a rapid transition. Low carbon energy solutions must be cost-competitive for businesses and consumers to accept the change.
This week, the first shipment of green hydrogen was exported from Australia to Japan. It is a giant step in the energy transition. But for it to speed up, the cost of producing green hydrogen has to come down rapidly.
The faster cost-competitive alternative solutions emerge, the quicker the pace of change will be. The Ukraine conflict, the breakdown of supply chains, and the skyrocketing oil prices will aid the transition to a greener world.
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June 5, 2022
What should people know about organic food?
According to the World Bank, the food and agriculture industry is around 10% of the global GDP of $78 trillion. The world’s natural and organic food and retail industry is estimated in 2015 to stand at $92 billion (deduced from Statista projection figures). The organic food industry is still a small fraction of the food industry.
Farmers in the US do not find it profitable to shift to organic crops from traditional high-yielding genetically modified crops. An analysis conducted in the US estimates that if all crops were to be raised organically in 2014, then at the current level of farm production additional 109 million acres of other lands will be required.
Organic farms can probably feed the 10 billion people in 2050, provided people were to turn vegan. The shift to becoming vegan, though, is unlikely to happen.
Is organic food more nutritious?
The nutritional value, sensory qualities, and food safety of organically and conventionally produced foods were compared. Except for nitrate content, there is no strong evidence that organic and conventional foods differ in concentrations of various nutrients or even contaminants (Bourn et al., 2002).
162 studies, of which 137 examined nutrient quality in crops and 25 livestock products, were analyzed. The study concluded that conventionally produced crops had a significantly higher nitrogen content. Organic crops had a higher content of phosphorus and higher titratable acidity. The scientists also noted no evidence of a difference in nutrient quality between organically and conventionally produced foodstuffs. Small differences in nutrient content between the two could be related to differences in production methods (Dangour et al., 2009).
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June 2, 2022
Could a fast food chain be restructured to offer healthy food desert?
Before you begin introducing a new product line and abandoning an existing one, it is best to undertake a market demand analysis for the product line that you wish to introduce.
Look at the performance and products of competitors. Consider customer preferences, and test your new product line through dipstick surveys and food events.
Pricing and volumes are the next areas to look at. Suppose these preliminary analyses inform you that the new product line is preferred by customers and will help you achieve a competitive advantage over your customer. In that case, you are ready to begin the process of restructuring.
A new product line will require a unique production process, building new supply chains, and acquiring new skills from your workforce. Action will be needed to define new processes and a new organizational model.
Once you are through all these steps and are satisfied that the proposed changes will work, start the phasing in the new product line and phasing out of the old. The pace of phasing in and phasing out will depend on the response that you get from your customers. Its pace will be dictated by the ability of your organization to adapt to the rate of change.
Rushing through the restructuring process can affect company performance. The restructuring would be complete as the new product line is accepted and the new processes and organization fully adapt.
All the best!
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