Tom McMahon

Globalization

From Planet Proctor:

What is the truest definition of Globalization? Princess Diana's death, and here’s why: An English princess, with an Egyptian boyfriend, crashes in a French tunnel in a German car with a Dutch engine driven by a Belgian who was drunk on Scottish whisky, followed closely by Italian Paparazzi on Japanese motorcycles. She was treated by an American doctor using Brazilian medicines.

This was sent to me by an American using Bill Gate’s technology. You're probably reading it on your computer with Taiwanese chips and a Korean monitor assembled by Bangladeshi workers in a Singapore plant and transported by Indian lorry-drivers, hijacked by Indonesians, unloaded by Sicilian longshoremen and trucked to you by Mexican illegals!

That, my friends, is Globalization…

The Last Word On The Microsoft-Yahoo Non-Merger

An Excerpt From John C. Dvorak:

And what is it with all the geniuses who think this was a good plan? Do the math. Forty four billion and you were considering spending more!? For what? Earth to Microsoft: Yahoo! is not worth $44 billion. You could buy General Motors lock, stock, and barrel for $14 billion, name all the cars "Google Sucks," and get more bang for the buck. Heck, you'd have enough left over to buy Ford for around $16 billion, and you could name all those cars "Google Sucks More" and still have $14 billion left over for a big party.

Does anyone ever look at the market cap of these multinational firms for a reality check?

Microsoft wanted to oust the Yahoo! board of directors. It should oust its own. Geez. No wonder Linux is gaining ground on you guys.

A Nice, Brief, Easy-To-Understand Summary Of The Enron Debacle

An excerpt from Philip Greenspun:

The true health of a company is measured by its long-run stock price. That is tough to manipulate and reflects what investors are willing to pay for the enterprise, taking into account all risks, all news, and any deferred expenses. At Enron, following the advice of the best minds of McKinsey, employees were compensated for book profit, as certified by Arthur Andersen, and EBITDA (earnings before income tax, debt, and amortization). The result was a company with tremendous reported profits, strong EBITDA, and an ultimate market value of less than zero. Conspiracy of Fools chronicles one of the discussions about EBITDA among Enron senior managers. One guy pointed out to Rebecca Mark, a Harvard Business School graduate star of the company, that EBITDA was meaningless because one could improve EBITDA simply by borrowing money at 10 percent and investing it in T-Bills at 5 percent and that was essentially what Mark was doing. She was borrowing money at X% to purchase businesses that would return no more than (X-4)% in a best-case scenario. This fattened her paycheck, but led the company towards bankruptcy. Another McKinsey idea was to set up a bonus as a percentage of profits; the employees went to the Clinton administration’s SEC and got permission to account for 20 years of future profits in the year that a gas contract was signed. This resulted in a 20X pay increase for employees in that division, but resulted in the company having no profits to report in future years, even if they continued to make cash profits on those gas contracts. The prospect of going to Wall Street and saying “we’ve already recorded all of our profit for the next 20 years” was so grim that the senior executives resorted to accounting fraud instead.

Miller Genuine Draft Flunks Beer Marketing 101

Excerpts from Advertising Age:

Beer marketing 101: The most consistent brands fare best. Bud Light got to No. 1 by providing three decades of nearly uninterrupted chucklehead, frat-boy humor; Corona became the top import by never straying from the beach; and Coors Light surged in recent years by obsessing about its Rocky Mountain roots.

Then there's Miller Genuine Draft.

Since 1991, the long-declining brand has burned through four agencies and is about to break at least its eighth tagline in almost as many years. During that time, it has centered its pitch on both juvenile sexual humor and the maturity of the people who drink it; cited both its lack of pretense and its inherent sophistication; and touted its cold-filtration brewing as superior while being marketed in tandem with its heat-pasteurized siblings.

Given those dizzying contradictions, it's perhaps not surprising that shipments have dropped about 41% during that period to roughly half its early-'90s peak, a trend Miller hopes it can snap with a new campaign -- once it settles on one, that is. ...

Some who've worked on MGD -- such as Joe Sciarrotta, the Ogilvy Chicago creative chief who handled the account in 2003, during Ogilvy's stint as agency of record -- say the problem is that MGD is a full-calorie domestic macro-brew, a category that has long declined. "It's not a marketing problem; it's a product problem," he said.

Ford's Sale Of Land Rover and Jaguar to Tata

From the always-useful Oligopoly Watch:

Ford announced this week that it has completed the deal to sell their Jaguar and Land Rover divisions to India's Tata Motors, that country's largest car and truck maker. The deal was for $1.7 billion.

What a turnaround! Ford's purchase of Jaguar in 1989 and cost $2.6 billion. The 1999 purchase of Land Rover from BMW cost $2.75 billion. Both divisions have been steady money losers, an anchor. Land Rover was a hot potato, as BMW had apparently lost millions on the company after buying it 1994. So Ford sold Tat the two groups for less than a third of what it paid, over and above the year-to-year losses. ...

The problem is that these brands may never be salvageable, no matter how little Tata pays for them. These brands may be famous, but they are also infamous for expensive service and poor reliability, in a market where there are already many competitors. Both brands sales are steadily dropping. And, with awakening global economy, there will be even fewer buyers who can afford them.

Is This Any Way To Sell Beer?

Is This Any Way To Sell Beer? (Click to Biggify)

From here (PDF)

For The Last 10 Years Pyrex Hasn't Been Pyrex

The Comedian takes on the latest instance of shameless corporate greed:

Years ago Pyrex was a brand name reserved for use on true borosilicate glass and items fabricated from borosilicate glass. Borosilicate glass is expensive laboratory grade stuff that is very, very strong.

Around 10 years ago Corning decided to cash in on the valuable Pyrex trademark name and use it to sell home products made out of soda-lime glass, a material that does not share all the desirable properties of the more expensive borosilicate glass that is still used in its industrial "Pyrex" products. ...

"Pyrex" dishes are failing (reportedly "exploding"), quite possibly because they are no longer made out of "the good stuff."

Personally I blame this all on pure corporate greed. The name Pyrex had grown to represent products made out of a type of glass that was extremely useful, durable, tough and long lasting for home use. Corning (and its spin off) co-opted this valuable trademark and transformed it to simply mean glass products made by them, regardless of whether or not the product was made out of the superior material that had taken 80+ years to develop the strength of the brand name.

Pyrex isn't Pyrex anymore, and it hasn't been for 10 years or so.

A Stock Market Analysis: Three Generals Over Fifteen Years

A Stock Market Analysis: Three Generals Over Fifteen Years

Flying Logic: Software For Visual Planning Support

Flying Logic: Software For Visual Planning Support

A summary:

Flying Logic is a highly visual, easy to use software application that does for reasoning what spreadsheets do for numbers. Just as you would not do detailed financial projections in your head, you need Flying Logic for all nontrivial planning and reasoning endeavors. Project management software won’t help you when you have no idea what part of a complex system needs improvement, or what that improvement might look like, or how to cause that improvement. Answering these questions is a critical and often-overlooked part of the planning process, and this is where Flying Logic shines. Flying Logic diagrams are not static images— they are working models of your reasoning that you test as you build and that stay “live” as you share your reasoning with others. ...

By providing a clear, visual language of causes and effects, Flying Logic encourages detached, rational thinking. By removing constraints around re-working the diagram, Flying Logic encourages people to painlessly consider every factor that really matters, and address every blind spot as it comes up. A good analogy is spreadsheet software— before spreadsheets, people still did financial projections, but they were laborious, error-prone, and there was a great deal of resistance to rework. After spreadsheets, people take many more factors into consideration and easily explore many more alternatives in their financial planning.

Just as a spreadsheet allows you to play “What if...?” with numbers, Flying Logic lets you play “What if...?” with plans, arguments, and ideas.

Performance Review

Performance Review

(via J-Walk)

MillerCoors Has Denver Chosen for Them

1. Mega beer brewers SABMiller and Molson Coors recently agreed to merge their US operations.
2. The Big Question: Where will MillerCoors choose as its headquarters, Milwaukee or Denver?
3. Over the weekend a Miller executive was murdered in Milwaukee.
4. While the Milwaukee newspaper ran the headline "Killing seen as unlikely issue in decision on headquarters", everyone else in Milwaukee has figured it out.
5. Bye Bye, Miller.

Why The Automobile Industry Is Such A Tough Business These Days

Why The Automobile Industry Is Such A Tough Business These Days

How are you possibly going to keep profits and wages growing when the price of your product isn't even keeping up with inflation?

The Evolution of the GE Logo

The Evolution of the GE Logo

Toyota Camry Knocked Off Of Consumer Reports Recommended Auto List

From Clark Howard:

Consumer Reports has released its annual vehicle reliability survey and Toyota has come out with a black eye. For the first time ever, the Japanese company's Camry has been dropped from the recommended list. Toyota made a corporate decision a few years back to become the world's largest automaker. In doing so, they had to take the focus away from making quality vehicles and shift it to growth. That explains why Toyota as a whole now checks in at No. 5 on Consumer Reports' tally of the most reliable vehicles sold in the United States. Ford has emerged as an unlikely hero in the report thanks to its enormous jump in quality. The "Not your Father's Ford" tagline is taking on a new meaning and people can no longer joke that Ford stands for "fix or repair daily." The top carmaker remains Honda, followed by Acura and Scion. The first American nameplate on the list is Buick, followed by Mercury and then Ford. The least reliable car sold in the United States is Land Rover, followed by Hummer, Cadillac and Mercedes.

What Managers Know About The Weather

Via Cold Spring Shops, an excerpt from Confessions Of A Community College Dean:

As a manager of people, I've noticed that the weather is always worse at some people's houses than others', even when it isn't. Some people manage to run into awful traffic every single day, even while their colleagues who take the same routes somehow get to work on time. And some people are just perpetually crabby, no matter how many of their grievances get addressed. You can't control how other people feel, or how they choose to live their lives. You need to decide what institutional conditions need to be addressed so that people with reasonable drive and life skills will have a genuine shot at success, and call it good. There will always be some who will condemn your efforts as inadequate, based on their own life drama, and some will even call you horrible names and question your personal integrity in the process. That's just a cost of doing business. Go for substantial – rather than total – fairness, and you may achieve it. Go for perfection, and I can guarantee heartbreak and failure.

No Google Hits? No Job.

From Philip Greenspun:

One of the hackers/company owners at the conference I attended in California said something that interested me:  “When I get a resume, the first thing I do is type the person’s name into Google.  If nothing comes up, I trash the resume without reading it.”

This employer assumes that any competent programmer has left some trace of him or herself in version control trees of open-source software, question and answer forums, and other repositories accessible to Web search crawlers.

The Ups And Downs Of A Color-Blind World

Excerpts from Larry Elder:

Who is Stanley O'Neal? Born in segregated Alabama in 1951, O'Neal spent his early childhood delivering newspapers, picking corn and cotton on the family farm, and being educated in a one-room school built by his grandfather. He landed a job on General Motors' assembly line, and won a place studying engineering and industrial administration at the General Motors Institute. O'Neal later secured a Harvard scholarship, where he earned an MBA. "I really didn't have an understanding of the world or any role models, but I had a strong desire to learn, and I think that is what pulled me through," said O'Neal.

He left General Motors for Merrill Lynch in 1986, beginning a meteoric rise to CFO in 1998, president in 2000 and CEO in 2002. In July 2002, when Fortune magazine named O'Neal the most powerful black executive in the country, O'Neal refused to comment for the story. Most interviewers found O‘Neal disinclined to talk about his race and background, as Fortune later wrote: "[O'Neal] is even reluctant to discuss what it's like to be the first African American to run a major Wall Street firm." ...

But O'Neal, as did many CEOs in financial services, placed bad bets in the mortgage market. The sub-prime meltdown resulted in a $7.9 billion write-off in mortgage-related assets for Merrill Lynch's third quarter. His rivals -- Citigroup Inc. and others -- also lost huge sums of money. After his five-year tenure -- average for an American CEO -- the board fired him. ...

O'Neal's race played no role in either his hiring or firing. So Jesse Jackson and Al Sharpton will likely remain silent -- for a change.

The Miller Coors Deal

Excerpts from Oligopoly Watch:

SABMiller and Molson Coors announced that they would form a joint venture for brewing, selling, and distributing their beer brands in the United States. The two companies, the #2 and #3 beer makers in the US, while share voting rights 50-50, but SABMiller will contribute more, at a ratio of 58-42. Molson Coors will maintain its own Canadian operations, and SABMiller will retain its widespread operations outside the US.

The deal, to my mind, offers few antitrust angles. The US beer industry is so dominated by rival Anheuser Busch (48%) that the newly combined company will have a share of only 29%, of which 18% comes from Miller and 11% from Coors. (The next largest brewer in the US is Heineken with 4%.) ...

The point of the deal is that the US beer market is totally mature, with next to no growth (1.5% per year). And customers are slowly slipping away to wine, to hard liquor, to microbrews, and imports.

As you might guess, this is a Real Big Deal here in Milwaukee.

If You Are Selling Microscopes, Then Why Not Ask For Customer Feedback On A Specimen Slide?

If You Are Selling Microscopes, Then Why Not Ask For Customer Feedback On A Specimen Slide?

Olympus sent out slides with questions to valued high-end microscope customers in order to boost awareness and hopefully drum up more business. The survey was shipped just like any other specimen slide, and it reportedly drove up traffic to the firm's website by around 24-percent.

Loyalty Isn't Always A Virtue

From Zack Urlocker:

While it's clear that jumping to a new disruptive company has its risk, there's also risk in staying with an old line business model.  You don't want to be the last person selling IBM Selectric typewriters, no matter how good you are at the job.  At some point, if you stay too long in the old world, you fail on the basic IQ test and are considered damaged goods.  Many times I've seen hiring managers pass over the resumes of candidates that were in companies that were considered to be "the walking dead."  You may think that 15 years loyalty to a company will impress a new employer, but not if its because you were asleep at the wheel.

Please Regulate Me

An excerpt from Oligopoly Watch:

So why is Altria (Philip Morris) calling for the regulations of cigarettes and ####### ######## and Phillips joining to push for more regulation of light bulbs? Pure self-interest, a new strategy in an old war, one of getting the government to help big companies maintain market share. All of the new regulations will be used to set a barrier to entry for smaller (usually Chinese) companies into the market. In these cases, it is easier for the established players to conform to a higher level of regulation ...

An Automotive Murder Mystery: Who Killed The Edsel?

An Automotive Murder Mystery: Who Killed The Edsel?

Private Investigator Joe Sherlock solves this tough case:

In 1959, Edsel sales nose-dived. Here's why: First, the distinctive styling was made blander. Second, the car was now offered with an economy six-cylinder engine as an option - hardly the way to bolster the car's performance image. The model line-up was substantially reduced. So were the number of dealers. The innovative push-button transmission controls were gone, replaced with the conventional column lever used in Fords. No wonder the car bombed.

All of these changes were made at the behest of Ford Group Vice-President, Robert McNamara, later U.S. Secretary of Defense during the Kennedy and Johnson Administrations. McNamara didn't like the Edsel. It looked too flashy, he thought, and it offended his sense of what an automobile should be - a no-nonsense, practical car. McNamara was a big fan of the bland and compact Ford Falcon, introduced about the same time the Edsel died. At the press preview dinner in 1957, before the Edsel had even been introduced to the public, McNamara told an associate, "I've got a plan for phasing it out." One automotive historian wrote that the Edsel would have survived if McNamara hadn't "axed it to bolster his ego."

In January 1958 (only four months after introduction), McNamara disbanded the independent Edsel Division, folding it into the Lincoln-Mercury Division. Edsel dealers were soon told to get other franchises to represent, killing dealer enthusiasm and support. In November of 1959, a few weeks after the introduction of the 1960 Edsel, production ended for good.

So .... while the Edsel was a mere infant, McNamara stabbed it in the back - multiple times. No wonder the brand didn't survive.

McNamara moved on, overseeing the Vietnam War and, later, the World Bank. (Hmmm. Look how those things turned out. Spot a trend here?)

Ray Kroc's First McDonald's In Des Plaines, Illinois: Over 1 Million Served!

Ray Kroc's First McDonald's In Des Plaines, Illinois: Over 1 Million Served!

I used to work in nearby Elk Grove Village and one of my then co-workers remembered old Ray Kroc himself taking out the garbage at this very McDonalds.

The original photo from which this Intocartoon rendering was made was actually taken August 17, 2007. ("Awesome shot! The classic Detroit iron in front really set the picture up nicely!") You see, that's not really the McDonalds my co-workers spoke of:

The Des Plaines restaurant was demolished in 1984. McDonald's realized they had a history to preserve, so they constructed a complete replica of the first store on the same spot. With golden arches soaring over a glass and metal, red-and-white tiled exterior, the building largely follows the McDonald brothers' original blueprints, which they had introduced when they began franchising in 1953; a Phoenix, Arizona restaurant was the first built in this manner.

Are Rebates A Rip-Off?

From Clark Howard:

Clark doesn't do rebates. He believes that you shouldn't buy something just because it offers a rebate. After all, you may never see that money! The Wall Street Journal recently sent five people out to buy five different items at five different retailers. All the products purchased came with rebates. All five people correctly filled out the necessary paperwork to get the rebates. Yet only one person actually got money back. That's a mere 20 percent! And that was with all the rebates being processed properly by the consumer. Now, think about how often you lose the rebate paperwork or fill it out incorrectly. Rebates are like a legal con game, according to Clark. His executive producer, Christa, recently tried to get a rebate from her phone company when she got high-speed internet bundled with other services. She still hasn't received any money back. Even worse, she was eligible for three separate rebates when she bundled three services together. But she hasn't yet seen a single penny in rebate funds from her phone company. Meanwhile, Clark likes that OfficeMax has eliminated rebates and instead lowered prices. Staples, meanwhile, offers very easy online rebates similar to wholesalers like Costco and BJ's. That's a good start, but why don't they just go the OfficeMax route? Perhaps because they know that most people don't even bother applying for rebates. The moral of the story here is that you shouldn't buy something just because it offers a great rebate deal unless you are sure you are going to use the product.

How to Get a Faster Response to Your E-mail

Excerpts from Michael Hyatt:

1. Put the person’s name in the TO field. The CC field won’t cut it.
2. Limit your message to one subject. It is preferable to send multiple e-mails, each with a discreet subject, than send one e-mail with multiple subjects.
3. Tell them what you need in the first sentence. Don’t make the recipient wade through a long e-mail to get to the request. Put it at the top of the message and then let them decide if they need more information.
4. Keep the message short. If it takes longer than two minutes for the recipient to read your message, it will likely get set aside.
5. Tell them if your request is urgent or time-sensitive. People need help prioritizing. Most people want to be helpful. If you tell them it is urgent, they will try to comply.

The World Economy In One Advertisement

The World Economy In One Advertisement

A French car wins an award in Japan. Told to you by an advertisement from a Dubai ad agency.

Melinda Lou Thomas, The Original Wendy of Wendy's Restaurants

Melinda Lou Thomas, The Original Wendy of Wendy's Restaurants

From capitalistchicks.com:

In the case of Wendy’s restaurant, business and family seem to be inevitably linked. When Dave Thomas opened his first Wendy’s in Columbus, Ohio, he named the hamburger restaurant in honor of his eight-year old daughter Melinda Lou “Wendy” Thomas. Wendy was a nickname given to Melinda Lou by her four siblings, and came to be the name that she preferred for herself. Within a few years, Wendy’s restaurants, and the image of eight-year old Wendy herself, became synonymous with fresh made-to-order food. ...

While her father may have become the heart of the company, Wendy Thomas continued to live up to her role as the franchise’s “daddy’s girl” and remained rather active in her father’s business. She owned several Wendy’s restaurants in the Dallas area until 1999. Following her father’s death in 2002, Wendy chose to reenter the business side of her father’s company. She and her siblings ultimately decided that it was only appropriate to carry on their father’s legacy through Wendy’s restaurants.

The Bottom Falls Out Of Newspaper Classified Advertising

The Bottom Falls Out Of Newspaper Classified Advertising

(via Hugh Hewitt )

Some Popular Car Models, Ranked By Percentage Of Sales To Fleet Operators

Fleet sales are deeply discounted, so a lower percentage (representing higher retail sales) is better. From autoblog, nicely summarized by Joe Sherlock:

1. Ford Crown Victoria: 91.3%
2. Dodge Avenger: 79.4%
3. Chrysler Crossfire: 70.6%
4. Chrysler Sebring: 63.5%
5. Chevrolet Malibu: 58.8%
6. Lincoln Town Car: 58.5%
7. Mercury Grand Marquis: 50.0%
8. Dodge Caliber: 45.1%
9. Chrysler 300: 44.0%
10. Ford Five Hundred: 43.1%
11. Chevrolet Cobalt: 39.7%
12. Volvo S40: 37.5%
13. Buick LaCrosse: 29.2%
14. Ford Mustang: 29.0%
15. Cadillac DTS: 27.4%
16. Ford Fusion: 26.8%
17. Toyota Avalon: 15.3%
18. Toyota Camry: 7.7%
19. Honda Accord: 4.9%

Housing Flips: Today's Way To Lose Big Money

From the Washington Times:

Housing speculators who got burned and are walking away from their investments drove the foreclosure rate on prime mortgage loans to a record high in the first quarter, with the problem most prevalent in California, Florida, Arizona and Nevada.  ... Figures from the Mortgage Bankers Association released yesterday showed that foreclosures are on the rise in nearly every category, but they are particularly pronounced in Midwest states experiencing manufacturing recessions and Sun Belt states where housing investors flocked in hopes of making quick money by "flipping" house purchases. The trend in the Sun Belt emerged only this year and has quickly driven the foreclosure rate on prime loans to a record 0.25 percent.

Many of the investors were well-off real estate professionals, riding the wave of the housing boom, as well as middle and upper-income families with good credit and cash to invest. Their dreams of getting rich quick have been replaced by fears of losing a great deal of money as prices started plunging. Rather than take the risk of suffering sizable losses in a protracted housing downturn, some investors have stopped paying their loans and turned their properties over to the bank to be auctioned off.

"If you're in a position where you can refinance or sell, but house prices have fallen below your outstanding loan balance, you're in trouble," said Doug Duncan, chief economist of the Mortgage Bankers Association.

The Virtues of Vintage Vinyl: Here's How Records Give You More Of What You Want

Excerpts from a fascinating post at Kitschy Kitschy Coo:

Most people credit CDs with the destruction of the record album market -- they were both permanent storage, they both catered to audiophiles, but one won out. However, in the late 1960s or early 1970s, the record industry was already feeling the impact of other recording media -- as evidenced by the dustjacket I found inside a copy of Johnny Cash at San Quentin. Columbia records devoted one entire 12"x12" side of the sleeve to touting why albums will always be king, compared ot those upstarts, 8-tracks and reel-to-reel.

They go on to list eight reasons why vinyl records are better than tape. Here's just one:

4. THEY'RE ATTRACTIVE, INFORMATIVE, AND EASY TO STORE. Record albums are never out of place. Because of the aesthetic appeal of the jacket design, they're beautifully at home in any living room or library. They've also got important information on the backs -- about the artists, about the performances or about the program. And because they're flat and not bulky, you can store hundreds in a minimum of space and still see every title.

All this sorta reminds me of affable sportscaster Chris Schenkel gushing "Beer: It's Better in the Bottle!" when glassmakers were trying to fend off the onslaught of aluminum cans. Whenever you see this sort of generic promotion going on, you can be sure you're looking at a dying industry.

The Barringer Meteor Crater: Where The Cosmic Apocalypse Meets Good Old-Fashioned American Capitalism

The Barringer Meteor Crater: Where The Cosmic Apocalypse Meets Good Old-Fashioned American Capitalism

Excerpts from another fine article at Roadside America:

Whenever a big enough rock tumbles from outer space and smacks into Earth, cataclysmic disaster is almost assured. But on the plus side, if anyone survives, the resulting hole becomes an instant tourist attraction. ...

Meteor Crater was blasted out of the surrounding sandstone about 50,000 years ago, and the dry Arizona climate has kept it close to impact-fresh ever since. That stroke of good fortune, however, was wasted on America's geologists, who for years insisted that the Crater was just another dead volcano.

Daniel Barringer, a mining engineer from Philadelphia, believed otherwise. He bought the Crater in 1903, convinced that it was made by a huge meteorite. He also believed that if he could find that meteorite, buried somewhere beneath the crater floor, he'd be rich. Daniel was right about the Crater, wrong about the meteorite. He drilled a 1,400-foot-deep shaft, found nothing, and died in 1929 when he ran out of money.

The Barringer family still owns the Crater, and has made a tidier profit as a tourist attraction than Daniel ever would have made from the meteorite. The Crater is such a big natural wonder that some people mistakenly believe it's owned by the government, and are sometimes unhappy to discover that they have to pay retail price to see it. But, you know, the Barringers have sunk a lot of cash into this place. They built a six-mile-long paved road between it and the interstate, and a nice visitor's center and museum, and even an elevator to take you to the rim if you don't want to climb the stairs.

Nuggets On Branding

A summary of Brandworks University '07 by Bill Geist:

• The explosion of new products is possible because the consumer is no longer constrained by shelf space in stores.
• Your brand isn't what you say it is...it's what Google says it is.
• Why is it that most companies don't know the name of the most influential blogger in their space?
• Where once considered uneconomical to pursue, niches now make sense due to the expansion of distribution channels.
• Look for those consumers that are being ignored...and learn what they need that can be monetized.
• Background on Google's mimimalist design: "You're smart...and your time matters."
• McDonald's target market is "people who eat"...and even they know that mass marketing no longer works.
• Traditional media are no longer in competition with each other. They're in competition with the online user generating content.
• ESPN was one of the original niche players on TV...today, they maintain 16 niche extensions.
• Don't dismiss the Over 65 market...over the past decade it has swollen by 27% and is expected to double by 2025. And, being a grandparent doesn't mean old. Average age that Americans become grandparents: 48.
• Interesting, in the last election, Bush carried the states with the highest fertility rate while Kerry carried the states with the lowest. Republicans are multiplying like rabbits!

If you want to find out who said what, go to Bill's site!

Advice From Marketing Guru Seth Godin: Know When To Bail Out

From the BrandWeek interview:

BW: What brands should call it quits right now?

SG: The Zune, certainly. Probably Buick and Plymouth. The thing is, if you're making money and reaching your goals, ignore me. If, on the other hand, the sacrifices are real and the goal isn't getting reached, then you're either on a cul-de-sac or your tactics are getting in the way.

Plymouth ceased production in 2001.

Getting Rid Of Brand Clutter

Michael Hyatt,  President & CEO of Thomas Nelson Publishers, on the decision to consolidate their 21 different brands ("imprints" in the book publishing biz) into a single Thomas Nelson brand:

From my first-hand conversations with retailers, it’s clear to me that imprints don’t mean much to them. There are too many. No one can keep them all straight. Speaking as the CEO of one the larger publishing houses, I couldn’t even keep our own imprints straight. If you work outside a publishing company, you don’t have a chance. Multiple imprints only add another layer of confusion to an already complex and convoluted industry.

Worse, with rare exception, imprints mean absolutely nothing to consumers. When was the last time you or anyone else you know walked into a bookstore and said, “Hey, what do you have new from [insert an imprint name].” No one does this. They might ask about a specific author or a specific category, but they never ask about the imprint. They probably can’t even tell you what imprint their favorite author publishes under. Imprints make a distinction without making a difference.

If it doesn’t matter to retailers and it doesn’t matter to consumers, why do we need them? I would argue that we don’t. The only people who care are usually the publishers who lead the imprint and a few authors who have an emotional attachment to the their history with that imprint. But this means nothing to customers. The sooner we start focusing on what matters to them—and the more we invest in that—the better off we will all be.

The Chrysler Deal

A few observations by Oligopoly Watch:

• The deal was even worse for Daimler than the putative $7.4 billion that was announced. That sum was just for show, a pitri enough remnant of the $36 billion Daimler paid for Chrysler. What Daimler will receive for the Chrysler division when all is said and done is nothing - in fact it will pay over half a billion dollars for Cerberus Capital Management to take the US automaker off its hands. As we've said before, this makes the merger the 1998 Daimler-Chrysler "merger" in year the worst deal ever. As one commentator said on NPR, "It like when you have a broken down car in your front yard, and pay someone to haul it away."
• The deal is likely to end up in the chop shop. The valuable bits will be sold off eventually, and the brand names (especially Jeep) may be attractive to, say, a Chinese company. Cerberus will be ruthless in cutting pensions and healthcare costs. It may operate a much reduced business, with SUVs and pickups as the main assets, at least for a while. It will dump dealers mercilessly, lay off workers, and move more operations overseas. And, like the airlines, it will plead extreme duress to outflank the unions.
• Meanwhile, Cerberus will suck the company dry, so that the investors get their money back with a hefty profit quickly. It set up a labyrinth of holding companies to preserve the good assets from an eventual bankruptcy, much as was done at Kmart.

The Death of Substance and The Rise of Marketing

An excerpt from Businesspundit:

The accounting scandals that prompted SOX, the massive daily bombardment of advertising, the screwed-up state of national politics, and the Duke b-school scandal are all the product of one thing - the death of substance and the rise of marketing. Mobile phones, the web, and other improvements in technology have caused an information proliferation that has made the signal we are looking for very hard to pick out from the noise, all while our capacity for attention remains unchanged. So what do businesses do? They ramp up the signal to make it stick out that much more. Companies no longer pour money into production because production has become commoditized. New resources go into marketing, and that means that things don't get better as much as message just get louder.

The Turnaround At Panasonic

Michael Urlocker interviews Francis McInerney:

The problem at Matsushita was that everything was a problem.  If you can name an operation, any operation from accounting to sales, you can be sure that it was messed up from one end to the other. 

You can put all of these under one umbrella: institutionalized isolation from customers.  For example, to name a few things:

• half a dozen public companies used the Panasonic name and had no common strategy.
• several of these competed against each other.
• there was no customer contact outside Japan and no system for getting it.
• sales people worldwide were supposed to force-feed distributors with products designed in Japanese factories but for which there was no clear demand.
• given these four points, there was no brand.
• the entire edifice from pencil sharpeners to factory automation equipment and semiconductors was supported by one hit product at at time, like VHS, then DVD etc.
• the company had no dominant share in any market except batteries.
• the wireless division, a big success in Japan, refused to sell in North America and missed the cellular rush.
• when the hits stopped coming, the poor financials in all the other areas were immediately exposed.
• the company was caught in a huge legacy trap -- too many long-cycled analog products in a short-cycled, computer-driven age where price-performance is everything.
• morale was terrible.
• management was frozen, like deer in the headlights.

I was asked by the Japanese press to explain what went right.  I turned over my business card to the blank back side and said there was too much space there to write it down.

The interview then goes on to other topics, including this candid revelation by McInerney on the German conglomerate Siemens:

At Siemens, which was unusually stable during the entire '82-'06 period, most of the people I knew are in jail or have been arrested in recent months for a widespread bribery scandal.  So, that stability appears to have been bought.  My focus on identifying and managing the touch points of cash in a business would have exposed too much and put these executives at risk.  So it was a non-starter.

One of my favorite business blogs, Urlocker On Disruption.

The Daimler-Chrysler Disaster

An excerpt from Oligopoly Watch:

Truly the Daimler-Benz purchase of US-automaker Chrysler in 1998 was a stupefying disaster. Through the alchemy of its business acumen, Daimler management transmuted the value of Chrysler from an estimated $40 billion to a value of, to judge from the current bidding, around $5 billion, give or take a few hundred million. That's a loss of $35 billion or 87% of the Chrysler original value to Daimler shareholders. (And that's being kind - it doesn't take into account either inflation or the drop in the dollar versus the euro. ...The whole thing makes the AOL-Time-Warner deal look not so bad.

My Experience At The Germantown Wisconsin PETCO At 5 Minutes Until Closing: The Manager On Duty Tells Me Sorry, We Will Not Sell You Those Two Large Bags Of Ferret Food Until You Move Your Van From In Front Of The Store

This is at 8:55PM tonight in a big strip mall with an almost completely empty parking lot. I pulled up in front of the store because their outside lights were already off. Ran into the store, grabbed two of the biggest bags of Marshall's ferret food they had, and ran up to the cashier. That's when the Manager on Duty told me unless I moved my van, then I could not check out. We haggled back and forth. She never did give me a reason for her insistence, other than people don't normally park there. The haggling took longer than a quick check out would have taken. I finally told the cashier to ring up one of the bags, went out, moved my van, and came back in. They rang up my one large bag on ferret food. But after they rang it up I thought "Why should I give them any more of my money than I absolutely have to?" So I told the cashier to ring up the one bag as a return because I didn't want it any more, and I ran back and got the smallest milk carton size container of ferret food that they carried. The cashier rang up the return, then rang up my $6.99 sale (versus the over $40 that the two large bags would have cost). As I was leaving the store, the staff was turning away a gentleman trying to enter the store. I told him about my experience that I had just had right there in the Germantown, Wisconsin PETCO store.

After I got home I called the PETCO Customer Relations Team at 1-888-824-PALS(7257) and told the young man my story. He said that the Store Manager, Elizabeth, would be calling me back. I'll let you know how it goes. 

And to think that all they had to do was ring up my two freakin' bags of ferret food.

UPDATE 4/5/07 9:56AM: Dan, the new PETCO Store Manager (he's been on the job 3 weeks) called and offered his sincere apologies, and indicated that he and the Manager on Duty already had had a talk about this little incident of mine.  Bottom Line: I'm OK with shopping at PETCO again. You can tell when somebody is sincere, and when they're just reading you the corporate line, and Dan struck me as quite sincere and moreover, a regular working good guy, not a corporate suit. Plus, he called me back before I expected him too. Dan's restored my faith in PETCO.

Increasing Income Inequality In Major League Baseball

Increasing Income Inequality In Major League Baseball

From Carpe Diem

Working At Ford

From a comment on a post at The Truth About Cars:

During my 10 years at Ford in management I was allways amazed at the contradictions you had to deal with almost every moment. The personnel department went to great lengths to find the bet and the brightest, innovation and balls was what you tried to show to get hired. The minute you get out of the front office and hit “Ford Country”, you learn to walk lock step with your manager and just don’t rock the boat. You soon learn that at Ford “Car” is short for careers, tht is what they attempt to build there. I moved on to a company where initiative and innovation was in more than a slogan on the wall, a German Company, Siemens and within several years with their assistance I had 2 patent awards and numerous special recognition awards for innovation. The money was never as good but you can’t put a price on job satisfaction. All most people really want out of their job is some satisfaction and a chance to fly once in a while. Everyone at Ford has been grounded by weather for years.

(via Joe Sherlock)

Pricing Your Product: What You Can Learn From Saudi Arabia

From, of all places, Linux.com:

Saudi Arabia's oil ministers and other smart people who influence oil pricing on the production end of the business have historically warned that setting oil prices too high would encourage the US and other oil-consuming countries to institute drastic conservation measures and turn to other energy sources. Keep the prices low enough that they are at least halfway affordable, this reasoning goes, and no one will have the political or entrepreneurial will to compete with oil. But let oil prices get out of hand, and consumers will think of ways to use less oil, which will hurt the oil-producing companies and nations in the long run.

There is obvious truth to this line of thought. When gas hits $3 per gallon in the US, hybrid cars and other fuel-economizers sell like mad while gas-hog SUVs sit on dealers' lots. At $2.50 per gallon, at least some fuel-guzzlers sell, especially if they are discounted heavily. Drop gas prices back to $2 or less, and V-8s are "in" again.

The ink-jet printer manufacturers should have paid more attention to this lesson. Their high cartridge prices have everybody and their brother setting up ink refilling stations. Just filled up a couple of Lexmark cartridges at Office Max for half the price.

Joe Sherlock: How To Succeed By Failing

Joe Sherlock: How To Succeed By Failing

Excerpts from Joe Sherlock:

Every successful company has some skeletons in their closet. Some turkey of a product, service or idea which didn't pan out. Sometimes the flop is so big that it drives the company right out of business. But, many times failure evolves into something very successful.

Everybody thinks of the Edsel as a big failure. The fact is, the Edsel was part of Ford Motor Company's plan to expand their car line into the middle-priced automotive field. The same management group which developed the Edsel also developed the four-seater Ford Thunderbird. While automotive purists bemoaned the demise for the little two-seater T-bird, the four-seat model quadrupled sales. It defined the emerging market for the mid-priced personal luxury coupe; it was a success for almost 40 years. And it gave Ford increased market share in the medium-priced field. By introducing the Thunderbird and the Edsel simultaneously, Ford hedged their bets. The Edsel was a loser, but the T-Bird more than made up for the Edsel's losses.

In the early 1970s, Hewlett Packard introduced the HP3000 minicomputer. The first version failed to deliver on the hype and failed miserably. Reintroduced a year later with improved working features, the HP3000 went on to become a commercial success. Hewlett Packard had learned from their failure and evolved a turkey into a successful product.

The Apple Lisa was an overpriced ($10,000) flop. But it was the first commercial use of the graphical user interface and featured pull-down menus and a mouse. It begat the next generation of Apple computer - the lower-priced Macintosh introduced in 1984 which became a commercial success and led to other Apple products.

Joe Sherlock: Fixing General Motors

Excerpts from Joe Sherlock:

General Motors does not have too many brands. It has too many vehicles that are the same. Wearing different badges. GM needs to differentiate its various nameplates. Like it did in the old days (the period roughly from 1935-1975). Like Honda versus Acura is now. Or Lexus vs. Toyota vs. Scion. Or BMW vs. Mini vs. Rolls Royce. There was a time when Pontiac, Buick and Chevrolet had distinct identities and characteristics. Here's how to restore that uniqueness - nameplate by nameplate:

• Chevrolet should offer entry-level cars, trucks and SUVs. Car models would include Aveo, Cobalt and Malibu/Impala.
• Corvette - drop all Chevrolet references and bowtie badging. Make it a stand-alone brand and a reward for the 'best' Chevy dealers.
• Pontiac becomes GM's performance-brand (again); classier and faster than Chevy.
• GMC: "All truck, all SUV, all the time." No car-based platforms here.
• Buick = big and almost as luxurious as Cadillac.
• Cadillac ... becomes an all V-8 brand.
• Saturn-Saab - GM's quirky brands should share dealerships. (Whenever GM gets a hybrid, it should wear Saturn badging.)
• Hummer: Who cares? It is a dead-end brand.

Goodyear's Tire Tales

Goodyear's Tire Tales

Another terrific post by Paula Zargaj-Reynolds over at