ias-toppers-centralising-instinct
Editorial Notes

Editorial Notes 28th November 2016

Increasing Centralising Trend; Trends of anti-federalism; Reactions to such trends; “End-to-end customer journey”.
By IT's Editorial Notes Team
November 28, 2016

 

GS (M) Paper-3: “Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.”

 

For those going the extra mile

Introduction:

  • One of the challenges that start-ups face is to ensure that their offering is perceived to be uniquely different from other alternatives in the marketplace.
  • Without a patent, any product in the marketplace that enjoys some level of success will draw a host of imitators.
  • The consequences can be severe, as without differentiation, there will be pressure on prices and margins, along with challenges in customer retention, leading to the downward spiral of price wars and bankruptcies.
  • One approach that has the potential to differentiate any start-up’s offering— “focusing on the end-to-end customer journey.”

Meaning of “End-to-end customer journey”

ias-toppers-end-to-end-customer-journey

  • This model is based on focussing on all aspects of customer journey ->Focus on all services and products that relate to the before and after the purchase of the product.
  • For example, in the case of say, a start-up focused on home delivery of groceries, there are actions that would be relevant “before” placing the grocery order on the website (for example, a memory trigger to buy groceries, the choice of what groceries to buy, the search to make optimal choices, etc.) and “after” placing the order (for example, time when groceries arrive, storage after arrival, disposal after cooking, etc.).

Framing an end-to-end customer journey:

  • For a start-up, the first step to differentiation is to recognize and understand the numerous touch points on the customer journey.
  • These could include search, selection, delivery, payment, financing, installation, storage, repair, and disposal.
  • To be effective, this exercise must be exhaustively done from the customer’s perspective,attempting to understand how customers navigate through these touch points, by focusing on their needs and expectations at each touch point.
  • It should also be apparent that many of the touch points are inter-dependent on each other and this means that choosing one touch point at the expense of another may not be acceptable, as they could affect each other.
  • It is useful to note that what ultimately matters is the customer’s overall experience on the complete journey, and a few poor performing touch points can adversely affect the overall experience.

Benefits

  • By focusing on the end-to-end customer journey, the entrepreneur can open up multiple touch points that can be addressed to help differentiate the offering, and make it more difficult for others to imitate the overall experience.
  • According to McKinsey, “Those that provide the customer with the best experience from start to finish along the journey can expect to enhance customer satisfaction, improve sales and retention, reduce end-to-end service cost, and strengthen employee satisfaction.”

Criticism:

  • The critics of this approach say that it requires start-ups to do too many things in areas in which they have little knowledge and expertise, and thus they are likely to lose focus.

Conclusion:

  • It is true that they will have to give up focus on the specific product offering; however, their focus will have to increase on the customer, which is what really matters.
[Ref: LiveMint]

 

GS (M) Paper-2: “issues and challenges pertaining to the federal structure”

 

The centralising instinct

ias-toppers-centralising-instinct

Introduction:

  • In the recent years, there is an increasing centralising trend in the central government policy initiatives.

Trends of anti-federalism:

State governments are not consulted:

  • Demonetisation is unique in recent times for reaching everyone in the country directly, unmediated by the filter of State governments.
  • State governments do not appear to have been consulted ahead of the announcement, despite demonetisation having directly undermined the routine administration of policies under their purview. 
  • This is directly contradictory to the Prime Minister’s proclaimed “Co-operative federalism” policy.

Design of new banknotes:

  • The design of the new Rs.500 and Rs.2000 banknotes issued by the Reserve Bank of India include new national symbols that challenge regional sensibilities.
  • For the first time, the new banknotes include Devanagari numerals, threatening to reignite old settled compromises over the national language within India’s federal union. 
  • The use of Devanagari numerals is already the subject of a PIL in the Madras High Court.

Advertisement of Union government:

  • The back-side of the new banknotes also carry the logo of the Union government policy, Swachh Bharat.

A matter of identification:

  • For decades as India’s polity and economy became more decentralised and the States became the centre-ground of political life, they have been the primary level of political identity for most voters.
  • In a situation where voters found it difficult to correctly identify which level of government was responsible for any given policy, State governments became adept at claiming the credit for Central government initiatives.
  • Voters frequently give the credit for programmes such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) or the National Rural Health Mission to their State governments rather than to the Central government.
  • In the post-poll National Election Study conducted by Lokniti, Centre for the Study of Developing Societies (CSDS) during the 2014 LokSabha election, 42 per cent of voters who had benefited from MGNREGA gave the credit for the programme to their State government and only 27 per cent to the Central government.

Reactions to such trends:

  • West Bengal Chief Minister Mamata Banerjee was complaining of the violation of cooperative federalism even before demonetisation. She had raised objections to the fact that the Central government now makes MGNREGA payments directly into workers’ bank accounts. She has also railed against the naming of Central programmes after the Prime Minister, for which State governments are required to provide matched funding.
  • Nitish Kumar called for the scheme to be renamed the “PM-CM farmer insurance scheme”, or “Kendra-RajyaFasalBimaYojana (Centre-State Crop Insurance Scheme)” if the States were expected to bear half the financial burden.
  • Uttar Pradesh Chief Minister AkhileshYadav distributed ration cards along with bags of wheat and rice — under the National Food Security Act — that carried pictures of him. The BJP’s State spokesperson complained bitterly that the State government was playing politics by trying to claim credit for a policy of the Central government.

Conclusion:

  • Even in the absence of a coordinated inter-State opposition alliance, for the Central government there is the risk that the centralisation of credit claiming for government policies could start to reduce the political incentives of opposition-ruled States to cooperate with the Central government in achieving national goals or implementing centrally designed policies.
  • This matters since State governments remain crucial for policy implementation. It is even more significant after the enhanced fiscal devolution to States following the Fourteenth Finance Commission recommendations which gives States greater flexibility to decide priorities for government expenditure.
[Ref: The Hindu]

 

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