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  • 8.reasons For Herd Mentality

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    Vivek Parmar
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    The document discusses herd mentality in various sectors such as low-cost airlines, telecommunications, insurance, news channels, and mutual funds. It lists reasons for herd mentality, including a sense of security or insecurity, media hype, business success or struggles, competition, and following western business models. The document outlines six phases that companies following herd mentality may go through, from initial investment to establishing the "power of three" dominant companies in the industry through consolidation.

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    8.Reasons for Herd Mentality

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    The document discusses herd mentality in various sectors such as low-cost airlines, telecommunications, insurance, news channels, and mutual funds. It lists reasons for herd mentality, including a sense of security or insecurity, media hype, business success or struggles, competition, and following western business models. The document outlines six phases that companies following herd mentality may go through, from initial investment to establishing the "power of three" dominant companies in the industry through consolidation.

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    96 views3 pages

    8.reasons For Herd Mentality

    Uploaded by

    Vivek Parmar
    The document discusses herd mentality in various sectors such as low-cost airlines, telecommunications, insurance, news channels, and mutual funds. It lists reasons for herd mentality, including a sense of security or insecurity, media hype, business success or struggles, competition, and following western business models. The document outlines six phases that companies following herd mentality may go through, from initial investment to establishing the "power of three" dominant companies in the industry through consolidation.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    of 3

    Sectors where Herd Mentality is Noticed

    Low Cost / Budget Airline Retailing & Multiplexes Telecommunication Insurance Companies News Channels Mutual Funds and finance cos Steel Cement T V Companies

    Reasons for Herd Mentality


    Sense of security Sense of insecurity Media Hype Present Business is doing very well-Surplus cash Need for Deployment Present Business not doing well Need to look out for new opportunities Spirit of competition / ambition to remain at top 3 players Replication of initial success / western Business models / comparison Favourable Govt. rules & regulations Need to Diversify / Expansion Harvesting

    POWER OF 3 COMPANIES Why many companies fail in Herd Mentality?


    Phase I :- Stage of Investment & realization that it is long race ahead. Phase II :- Product is ready, but anticipated demand does not exist, + oversupply comfort zone of profit is lost. Phase III :- Competition / Entry of established players + MNCs. Phase IV :- Hypercompetition. Sustaining losses is a strategy. Phase V :- Consolidation / Mergers / Acquisitions / Takeover / Harvesting. Phase VI :- Power of 3 is established.

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