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Author: SDABAC

Bocconi Test: Here’s What You Need To Know

Once you’ve submitted your application to the IMB at SDA Bocconi Asia Center, you may be prompted to take our internal exam, the Bocconi Test. Wondering whether you need to take this exam, and what is involved, if you do? Here’s more:

Student Diaries – The Cocktail in Class

A PGPB cannot just be about academics. If it is, you are doing it all wrong. I wanted my PGPB to make me a good manager, and this cannot be taught only by theory. I needed to know the practical application of whatever I learnt. The best way to do this while doing my PGPB was to become a class representative; a daily dose of management as a student. A class representative (CR) is a person who acts as a link between the class and the college management. In short I have to deal with 57 opinions, gather consensus and take it to the management and negotiate with them for the class. At the same time, the rules or notices by the management have to be made accepted by the students. Hence, the cocktail. Let me elaborate on my Cocktail journey between the management and the class at MISB! I stood in the internal class elections for becoming the CR along with three other colleagues. Through a democratic voting, I was selected. Everything was perfect; my Post Graduation started as I wanted! It all started with a bang, a series of responsibilities started to come on my shoulders. From maintaining attendance to having heated case study group discussions, juggling between friends, groups; management and personal commitments were now integral to my life. I was everybody’s go-to person. Being a CR is equivalent to being a cocktail. You are a mix of decisions and suggestions flowing from your class and the management which are the main ingredients of this cocktail. You need to be the perfect blend of both. There is no doubt in the fact that the subjects I’ve learnt so far have helped in this journey as a CR. Marketing groomed my negotiation skills to get people to listen to me, which is of utmost importance. Organizational Design and Behavior helped me in dividing the classes into groups, structuring the group format and pooling in the competencies of all students in an equitable manner. Managerial Accounting made me a better accountant; I kept a solid account of the class funds and knew where to spend how much. However, Human Resource Management taught me the most important life skill, to deal with opinionated people and find a common way. Being an autocratic leader is the easiest but the worst thing to do. Being a democratic leader is difficult, but the best way manage. Hence being a CR is my journey of being a democratic leader, a good manager and a loved classmate. There are so many twists that a little of either of the ingredients can ruin the cocktail. It has been delicious and addictive so far, and I hope it gets me as drunk as possible (On knowledge you guys! Haha)   Shradha Varma is a PGPB4 student and the Class Representative. 

Faculty Diaries: Corporate Finance – Cornerstones in Valuation

By: Leonardo Etro – Professor of Corporate Finance Some focus very little on valuation while others think valuation is “The Thing,” the only one that matters in putting capital at risk in an investment. Honestly speaking, valuation is essential in Finance. Why? Because eventually any business is worth the amount of free cash flow it can generate over its life, that is it.  Imagine you owned a grocery store, and your time machine ball told you it will generate EUR 100,000 of cash flow per year for the next 20 years, before shutting doors. This means that over its entire life, that store would allow you to cash EUR 2 million into your pocket. If you just skip for a moment the time value of money, the store’s intrinsic value is EUR 2 million. A potential buyer of that business – on condition he’s equipped with that same time machine – would never agree to pay more than $2 million for your grocery store, as he would obviously end up with a loss. The buyer probably wouldn’t pay $2 million for that business, either. So, a potential buyer would only buy the store for less than $2 million. There are no time machines around, indeed. By definition, estimating the cash flow of a company over its entire life is an inaccurate exercise at best. It can be an easier task to do for mature and stable companies, while almost impossible for start-up, high-growth businesses. Regardless the company, though, we must at least make some educated guesses in estimating cash flows and value. More often than not, picturing out different scenarios – such as optimistic, moderate, and pessimistic – is a mind-clearing process. We all know that no analyst is going to be exactly right in valuing a company. Still, it’s much better to be vaguely right than… exactly wrong! This is precisely the reason we need a framework to help us make decisions, even if that framework is not 100% accurate as we’d love it to be. The alternative is having no framework at all: and this is the difference between gambling and investing. Don’t forget that for valuation purposes, there is no difference between a pop-and-mom grocery store and a mega-cap, publicly traded company. Regardless whether a business is private or listed, a value is value. Obviously so, no rational individual would be willing to pay more for business than what it’s worth. On the contrary: he would be actively looking for companies then come for less than what they are truly worth. Sometimes, investors in public companies just stick to prices’ and volumes’ movements. Don’t fool yourself around: always secure yourself back to cash flow and valuation. It’s time to add an extra trouble in our framework: time value of money. This is an extremely relevant point. We must acknowledge that the EUR 2 million that the grocery store will produce over its life is not worth EUR 2 million today. There is a time value of money – a.k.a. “present value”. When we perform a discounted cash flow analysis, we are estimating a business’s cash flow for its entire life, and then we apply a discount rate to that cash flow, to establish what it’s worth in today’s money. Why? Because if we decide to go for it now, then we have to pay for it now. So, the discount rate is relevant. Rather than an inflation rate or anything the like, investors often use a number that represents their required annual rate of return. What does this mean? It means that as long as we buy the business – or its listed shares – around the output value of the discounted cash flow calculation, we’ll manage to earn our required rate of return. Obviously so, it’s far better if the business – or its listed shares – overcome by large our valuation estimate. This provides us with a cushion, which is widely known as “margin of safety.” This represents the room we give yourselves to be wrong (likely) or not completely precise (certain) in our estimates. Even if our valuation estimates prove out right over time, we’ll have the following lovely “problem” to handle: the margin of safety will allow us to earn a rate of return that’s higher than the discount rate. So far, we’ve been talking about buying. Some words on the opposite play (selling, or even not buying; in short, folding) are deemed. Selling or not buying a business – or again, its shares – is a good move, when the business’s appreciation potential already locates behind its shoulders; or, if the downside potential has become significantly larger that the upside potential, or, if we can identify other investments that offer greater return potential as compared with risk. This does not necessarily mean that the business or the shares we sell – or not buy – will never get higher. It means that our analysis highlights limited appreciation potential and too much risk. Selling, or not buying, is just as inaccurate as buying, given that it is grounded on valuation as well.  

Student Diaries: The Premier League Football Review

As the Normal One sat in the dugout for his first Premier League game, the Special One who was under intense scrutiny got Chelsea their third win this game week. This weekend was all about the fight between the title contenders and their immediate rivals. As United unexpectedly strolled across at the Goodison, Arsenal showed their supremacy at Watford. The following were some of the key takeaways this weekend from the world of the English Premier League.   Tottenham V Liverpool: This was the game that was spoken about the most this weekend. J¼rgen Klopp taking over the reigns at Anfield raised strong positive opinions from the Kop supporters. Liverpool started the game on a high. The first 20 minutes Liverpool pressed high up the pitch and made life difficult for Tottenham, but it was the second half in which the game opened up with both sides creating a handful of chances yet both the sides failed to hit the back of the net. Liverpool is a big club and with the history they have, it is critical for English Football that the Kop wake up from an extended spell of hibernation that has seen the club go into a steep decline. With the determination of Klopp and a strong financial backing from the owners, I as football supporter hope to see Liverpool competing for top honors next season. Everton V Manchester United: With Arsenal having slammed Manchester United last weekend, Louis Van Gaal’s United had a point to prove to be considered genuine title challengers and the convincing margin of the 3-0 victory at Goodison must have lifted the dressing room. David De Gea was yet again excellent, but the player to watch out for United was undoubtedly Ander Herrera. Playing in the number 10 role, Herrera displayed great vision by creating a plethora of chances and also by scoring Manchester United’s first headed goal of the season. Everton, on the contrary, could not lift themselves over the sad and unexpected demise of their great manager Howard Kendall. With United playing with a 4-2-3-1 formation, and Rojo at left back, Roberto Martinez made a tactical blunder playing in Lennon instead of the in-form Deulofeu. Most football pundits got this result wrong. Watford V Arsenal: Arsenal having outplayed Manchester United comfortably last weekend came into this match with a lot of self-belief and their talisman Alexis Sanchez did not disappoint the Gunners supporters. Like last weekend, Alexis scored a brilliant goal that took his goals tally to 6 goals in 8 starts this Premier League season. Watford under Quique S¡nchez Flores were good in different short periods of the game but did not manage to threaten Cech during the game. With this convincing win, the Gunners held on to their 2nd place in the table after 9 games with 19 points, 2 points adrift of leaders Manchester City, who won 5-1 in the early kick off against Bournemouth.   The Premier League Table after Gameweek 9: Image: Premierleague.com   What to expect during the mid-week? With the UEFA Champions League returning during the mid-week, Arsenal facing the German champions Bayern Munich, United traveling to Moscow and City facing Borussia Mönchengladbach, the English clubs would again be under intense scrutiny because of the drop in the ranking coefficients for the clubs. My predictions for the mid-week are as follows: Arsenal V Bayern Munich: The Bavarians have won all 9 of their German Bundesliga games and come to the Emirates in a rich vein of form. Guardiola’s men have nothing to fear about against the Gunners. It remains to be seen if the Gunners can reciprocate the form they displayed against Manchester United. But this would be a mouth-watering clash for any football lover. My Prediction: 1-3 CSKA Moscow V Manchester United: Louis Van Gaal’s men have dropped points against PSV Eindhoven and after a not so convincing game against Wolfsburg, the Red Devils will be looking to strengthen their position in the group. CSKA Moscow defense has leaked goals right through this season, and they will have to play out of their socks if they are to get away with anything this mid-week. My Prediction: 1-2 Dynamo Kiev V Chelsea: Jose Mourinho’s men still don’t look convincing, and this is a difficult match for a team that has struggled for form this season. Kiev, who lies 2nd in the Ukrainian League would give a tough fight to Londoners, but I think Chelsea have enough quality to go over the line in this one. My Prediction: 1-2 Manchester City V Sevilla: Manuel Pellegrini’s men were incredible this weekend against Bournemouth, and I expect them to sail through this one. City even without Aguero and Silva has played remarkably well, all thanks to the two new signings, Raheem Sterling, and Kevin De Bruyne. With captain Kompany expected to return for this tie, I expect City to win this one comfortably. My Prediction: 3-1 ————————————– This article is written and prepared by Abhishek Sharma of PGPB4 in his personal capacity. The opinions expressed in this article are the author’s own and do not reflect the view of MISB Bocconi.  

How MISB Bocconi’s PGPB Equips You for Real-World Impact.

With so much buzz surrounding the 21st century skills gap — particularly as it applies to today’s business school grads-turned-job candidates — you may be wondering how the PGPB can help you not only expand your knowledge, but also apply this knowledge to today’s complex business challenges. In fact, this is one of the aspects that makes an MISB Bocconi education stand out from the rest. Let’s take a closer look at how we not only cover the business fundamentals, but also how they translate to real-world innovation. International Exposure As the international barriers continue to break down, tomorrow’s leaders will require global perspectives which transcend geographical borders. The PGPB brings together students and faculty not only from throughout India’s diverse states but also from all over the world in the form of inbound and outbound exchange programs. The result? A distinctive multicultural atmosphere and vibrant international outlook among the members of our community. Soft Skills While all b-schools teach business theory and basic principles, cultivating true innovation takes something more. In addition to traditional business school studies, the PGPB places equal focus on writing and communication, technical know-how, creativity, critical thinking, understanding organizational structure and other soft skills essential to contemporary business success. These are precisely the skills that today’s employers are looking for when identifying what they need to reach their goals. How do we teach these soft skills? Through resources including personal orientation labs which help students assess their personal aptitudes; core courses on oral and written business communication; and training seminars on everything from public speaking to business and social etiquette. Real-world Indian and international case studies, meanwhile, offer a dynamic fusion of theory and practice which not only teaches students what they need to know, but also how to most effectively apply these principles to the world around them. But we don’t just bring the case studies into the classroom; our students also benefit from strong connections with the corporate world through compulsory hands-on experiences and initiatives. Information Exchange Speaking of corporate exposure, the MISB Bocconi student experience is steeped in opportunities to learn from today’s top business leaders and innovators. In addition to our leading international faculty from SDA Bocconi, PGPB students also gain access to visiting guest speakers and summer internships — all aimed at helping them gain valuable insights and a critical leading edge. At MISB Bocconi, we know that education doesn’t take place within a vacuum, but within the context of the world at large. PGPB students aren’t mere observers; rather, they’re participants in a problem-focused and experiential learning environment aimed at helping them achieve game-changing potential as the next generation of business innovators.      

Student Diaries: The Metamorphosis Of A Post Graduate Student

  At MISB Bocconi, we often say, do not expect the expected. When I was enrolling for the Post Graduate Program in Business (PGPB), little did I know, that it would unveil different sides of me and make me discover that a business program can impact one’s life more than what we expect it to.

Meet the PGPB faculty: Mentors Inside and Outside the Classroom

One of the greatest assets of the PGPB? Our illustrious faculty. Our team of esteemed international teaching faculty from SDA Bocconi characterizes what we stand for here at MISB Bocconi: a truly extraordinary, global education aimed at cultivating India’s future business innovators.