Saturday, January 30, 2010

Thursday, January 28, 2010

A Better Way to Fly?



International travel is tough, especially in the back of the bus. Air NZ is trying to change that, introducing "lie flat" seating in economy, at least for couples or small families traveling together. I think it's innovative and clever, and I think Air NZ will sell each of these seats on every flight it operates.

He Did That?



Political diversion here. When Joe Wilson yelled out "You Lie!" during President Obama's address to Congress last year, the was chastised and forced to apologize. During last night's State of the Union address members were instructed to refrain from outbursts. It was sort of embarrassing, then, when cameras caught Justice Alito reacting to the President's characterization of a Supreme Court case that the President disagrees strongly with, and that Alito was part of the majority opinion. You can see his reaction above. Clearly, Alito was having a private moment, perhaps involuntary, and forgot that cameras were on him. This is not going to make the Supremes more likely to allow cameras in their courtroom.

Made in USA



Do people care if something is made in the USA anymore? That was the subject of much debate in class this week. A student pointed out that New Balance shoes are made in the USA, and the company tries to capitalize on that in product marketing. It's true that 25% of shoe production for the company is still in the USA. My question is, do consumers care? Is there empirical evidence that proves that a sneaker shopper will purposefully choose New Balance over Nike or Reebok, simply because it's made in the USA and for no other reason? The company hopes so, as the ad above amply demonstrates.

Wednesday, January 27, 2010

He Said What?



I don't normally steer into domestic politics on this blog, but this one is priceless, a real "Macaca" moment. Do politicians think?

Extraordinary

As we digest the news that Toyota is recalling many popular cars such as the Camry and Corolla, and is taking the step of actually shutting down production at six of its plants next week, it's worth considering for a second what this will mean for Toyota.

First, the facts. There is a problem with the accelerator on the affected vehicles. This problem manifests itself with the accelerator is stuck, i.e., will not move. I've never been in a car with a stuck accelerator, but I have to imagine it's an absolutely terrifying experience. Being stuck in a two-ton hulk of glass, steel and plastic, traveling at lethal speeds, with no way to stop -- that's not good. Several people have died, including four in the Avalon above, which ended up upside down in a pond.

At first, Toyota put the blame on floor mats that bunched up under the gas pedal, and ordered the floor mats removed. Problem is, in the Avalon involved in the accident, the floor mats were already removed, and were in the trunk. Now Toyota believes the problem may be in the gas pedal assembly itself. The recall and sales suspension affects gas pedal assemblies from U.S. supplier CTS. Some Toyotas (including Lexus and Scion) have assemblies made by Denso in Japan, and are not affected by the recall.

At this point, this is speculation. Toyota does not know what the real problem is yet, and does not have a fix. Let me repeat that -- there is no fix. The cars have been recalled, sales have stopped, and production has stopped.

This is shaping up to be a disaster for Toyota. The company has a carefully cultivated reputation for quality and reliability. The burden on the company from this episode will be tremendous. Can you image how nervous the millions of Toyota owners out there must feel right now? Many will dump their cars, causing resale values to crash. When a fix is announced and production and sales resume, many consumers will continue to shy away, meaning heavy discounting will be in play. Many customers will bombard their dealers with imagined stories of runaway throttles and other maladies. Consumer confidence is shaken to the core, and how Toyota comes back, if it comes back, will be studied in B-schools for years to come.

Here's the extraordinary part -- Toyota did not have to take this action. Unless this problem is bigger than the company is letting on, ordering a sales and production stop is "unprecedented" -- in other words, no one can ever remember it happening in the auto industry. Many companies, facing problems even more serious than this one, have continued to sell their products through recall campaigns. The government certainly isn't forcing the company to do this, and settling the inevitable lawsuits are most certainly cheaper than the steps the company took yesterday. The company, it appears, is pursuing a new strategy -- safety first, profits and survival second. There's a lesson in here about corporate social responsibility and ethics, but until this episode plays out, I'm not sure if anyone will know what that lesson is.

Tuesday, January 26, 2010

Meeting With the Emperor

Yesterday's New York Times carried an excellent article about NCR's move of its world headquarters from Dayton to suburban Atlanta. The article is not very kind to Dayton, but it's even harsher towards Bill Nuti, NCR's CEO, who made the decision to end NCR's connection to Dayton, which dates back to 1884. Lee Fisher, Ohio's Lt. Governor (and candidate for Senate) called the move "shamefully irresponsible." In February 2009, Fisher tried unsuccessfully to meet with Nuti. According to Fisher, one NCR executive "acted as if we had asked to meet with the emperor."

I've long felt that the culture surrounding senior management at large corporations is broken, and the story of NCR's departure from Dayton simply reinforces how broken it actually is. When one man can make a decision, based almost certainly on hubris, that breaks a corporate bond with the surrounding community, then it's time for the Board to step in and demonstrate some moral courage. As a faculty member I'm happy that UD has purchased the World Headquarters and surrounding land, but as someone who lives in Dayton I'm sorely disappointed in NCR's actions.

This Land - In Dayton, the Emptiness Echoes Where NCR Used to Be - Series - NYTimes.com

Saturday, January 23, 2010

U.S. Credit Card Debt Approaching Trillion Dollars

Some quick facts about the U.S. debtor, hit the graphic for more:

In 1968, total U.S. consumer credit card debt was less than $8 billion. Today, it's $972 billion.

The average American with a credit file owes more than $16,000 to creditors excluding mortgages.

14% of Americans have more than 10 credit cards.

51% of the population has at least 2 credit cards.

Thursday, January 21, 2010

China's the word in more US schools

Although Spanish is still the most widely taught second language in U.S. schools, thousands of schools stopped teaching foreign languages completely in the last decade, according to a government-financed survey.

On the other hand, the number of public and private schools offering Mandarin as a language option has gone from 300 a decade ago to more than 1600 now, and the number is growing exponentially. One such example is the Yu Ying Charter School in Washington (pictured above), the first Chinese language immersion school that offers classes on alternate days in English and Mandarin.

A.P. Chinese will be the third most tested language this year, after Spanish and French. German will be displaced to fourth place. This trend isn't just taking place on the east and west coasts, either. The survey shows that Chinese language offerings are taking place all over the country, including in places where there aren't significant Chinese populations.

China's the word in more US schools

Wednesday, January 20, 2010

Basketball league for white Americans targets Augusta 011910 - The Augusta Chronicle

I'm hesitant to blog about this, because it provides a lot of attention to a hateful topic, attention that these people obviously crave. But I'll blog about it anyway, in hopes that increased attention will show how much more we have to go, in some ways, towards accepting other cultures.

A proposed professional basketball league is open to only "natural born United States citizens with both parents of Caucasian race." The inaugural season kicks off in June and is targeted for 12 cities.

This has to be a joke, right?

Basketball league for white Americans targets Augusta 011910 - The Augusta Chronicle

Russia and U.S. Escalate Chicken War

The U.S. and Russia are not major trading partners, but chicken is a clear exception, with over $800 million worth of U.S. poultry sold in Russia last year. U.S. chicken exports began under the first Bush administration as food aid, but as Russia's economy has grown and its consumers have become richer and more sophisticated, they are starting to fight back against the prevalence of cheap American chicken.

The Russians have now instituted a ban on U.S. chicken based on sanitary standards, claiming that U.S. chicken, which is cleaned in a chlorine bath during slaughter, is unsafe for human consumption. The E.U. has similar rules on place about chlorine baths. The rules, along with an unofficial PR campaign that U.S. chicken is a reminder of times when Russians had to rely on foreign aid to feed its citizens, threatens to put a serious dent in U.S. chicken exports to Russia.

So is this about unsafe chicken? I think not. The article below hints at what's really going on here -- the domestic Russian chicken industry is growing rapidly and currently satisfies 75% of domestic demand, with projections of meeting 100% of domestic demand in 5 years. If you take out the largest importer (U.S.), and send prices of chicken up a bit thus incentivizing even more chicken farms to open, my guess is that local producers will be able to meet all demand much sooner.

Relying on "sanitary" reasons to ban foodstuffs to protect local producers? I wonder where the Russians learned this lesson.


Russia Seeks to Cleanse its Palate -- NY Times

Singaporeans and Malaysians Find Something Else to Fight About


This is Ainan Cawley. He's 10 years old. His mother is an ethnic Malay from from Singapore and his father is from Ireland. By the time Ainan was 6, he was solving chemistry problems. Now, at 10, he's looking to enter university. According to his parents, however, finding a school in Singapore that would recognize his talents and nurture his learning abilities was an "Orwellian" task.

When a private school in Malaysia heard about Ainan, they swooped in and offered him a full scholarship. Thus the Cawleys moved to Kuala Lumpur, and sparked off the latest tit-for-tat battle between the two nations. Malaysia and Singapore have fought over some pretty small battles in the past, but this one, over who has the best educational system, has become a pretty sensitive topic. For now, the Malaysians appear to have gloating rights. The front page story in the Wall Street Journal this morning certainly seems to reinforce that.

Malaysia Wins Young Singaporean Science Whiz - WSJ.com

Chinese Glass to Adorn New World Trade Center

It used to be that low cost, high bulk items were made close to the customer. After all, shipping adds a lot of cost to an item and there comes a point where shipping it from across the world doesn't make economic sense. Thus when carmakers go abroad the first things they look for locally are low cost, high bulk items like tires, batteries, and seat foam.

Does glass count? Perhaps. A lot of glass is still made in the United States, especially in Ohio. As a great NYT article yesterday points out, though, the tipping point where it's cheaper to outsource even glass may be arriving. The first 20 floors of the new World Trade Center (pictured above) require a special blast proof glass. When the call for bids went out, the cheapest bid came from, and went to... Beijing Glass. That's right, a Chinese company will supply the glass for these floors. An American company won the bid to supply the glass for the rest of the floors.

There's a trade war brewing on this front. American glassmakers have filed dumping petitions, hoping to gain some relief from Chinese imports through a temporary import tariff. Even if that happens, though, the jobs that have been lost in the U.S. are unlikely to reappear. In the last 9 years, glassmakers in the U.S. have shed thousands of jobs, cutting employment by more than 30 percent.

Glassmaking Thrives Offshore, but Is Declining in U.S. - NYTimes.com

A Hollow Victory

Last year over 10 million new cars and trucks were sold in the United States. Over half of that was sold by Japanese companies, especially Toyota, Honda, and Nissan.

In Japan, the world's third largest auto market, Ford, GM and Chryler sold about 8000 cars last year. Yes, you read that right. 8000.

The Japanese will tell you that they have an open market, with zero tariffs on cars from the U.S. While that is true, the Japanese are the masters of the NTB (Non Tariff Barrier), and have employed a variety of regulatory (and smartly, WTO-compliant) measures to keep Japan the most closed auto market in the world. When pressed about this, the Japanese always revert back to: Detroit doesn't build cars that Japanese want to buy, and the cars are of poor quality. It's the market, baby, the market!

That may have worked in the days when Explorers and Hummers prowled the showrooms, but with world-class cars like the Ford Fiesta coming online, it's hard to believe that Japanese consumer tastes alone account for the gross trade imbalance. That brings us back to those NTBs.

Here's an example: Japan is doing a version of cash for clunkers. U.S. cars flat out don't qualify. Now, keep in mind that when the U.S. first proposed cash for clunkers, the program was limited to cars made in the U.S. (which includes many Toyota and Honda models, by the way). Under pressure from importers, the U.S. opened the program to all eligible cars and all told, 319,300 cars were sold under cash for clunkers to Japanese brands, about half the total. U.S. automakers and the government protested Japan's decision, and yesterday the Japanese government agreed to allow U.S. carmakers to qualify for Japan's program. The expected impact? A few hundred extra cars will be sold to add to that 8000 total from last year.

I guess when you're dealing with an adversary such as this, you take your victories where you can.

Japan opens 'cash for clunkers' to Detroit's Big Three | detnews.com | The Detroit News

Tuesday, January 19, 2010

E-Bike Menace in China

E-Bikes are menacing the streets of China. Silent, fast, heavy, and no license required, their popularity is soaring and so are the number of people being killed on and by them. The WSJ takes a test drive, below. As an aside, around 2:30 in the video they interview a woman named "Cheng Taitai". Really, WSJ? Taitai means "Mrs." in Mandarin, so her name is Mrs. Cheng, not Cheng Taitai. Major fail, but good video nonetheless. Watch out next time you're in China!

Cadbury Accepts Raised Bid From Kraft

Well, after four months of back and forth negotiations, including a warning from Warren Buffett that he wouldn't support the deal, we have a deal! Cadbury's board has accepted an offer from Kraft to sell itself to the American food giant for 11.9 Billion GBP. The board, which had steadfastly refused Kraft's offer calling it "derisory," apparently changed their mind after Kraft sweetened the deal from its original 10.2 Billion offer. Other potential bidders appear unlikely, since Kraft made Nestle go away by selling it the U.S frozen pizza business (Tombstone and DiGiornio) and Hershey probably doesn't want to spend that kind of money. So it looks like those delicious Easter Creme Eggs will soon be a product of... Kraft. Let's hope they don't get creative and stuff them with Velveeta.

CORRECT: AT A GLANCE: Cadbury Accepts Raised Bid From Kraft

Reminder February 10 Executive Luncheon

On Wednesday Feb. 10 the MVITA will be hosting an Executive Luncheon with Pierre van Kleef, Director of the Chicago Office of the Netherlands Foreign Investment Agency. The lunch is called "The Netherlands: Stepping Stone in the European Market". The cost is $25 for students, and the luncheon takes place at the Marriott Courtyard across from the UD arena. See MVITA's webpage for registration details.

Monday, January 18, 2010

Sunday, January 17, 2010

McDonald's in Singapore: The pig toy fiasco | CNNGo.com


Is it possible to be too culturally sensitive? After all, business students are taught all the time about the importance of being sensitive to local culture when designing and marketing products, and history is replete with examples of businesses that stumbled when they failed to take into account local tastes. In Singapore, McDonald's is finding out that taking a step that may appear to be culturally sensitive may in fact backfire on its largest market.

Singapore, which is largely made up of ethnic Chinese, prides itself as a place of ethnic and religious diversity where Chinese, Muslims, and Indians live in relative peace. As part of a McDonald's toy promotion, the company commissioned twelve Doremon toys after the twelve signs of the Chinese zodiac. Fearful of backlash from the small Muslim minority in Singapore, the company swapped out the "pig" toy with a "Cupid" (Muslims, like Jews, cannot eat pork). The resulting firestorm in media, online chat rooms and blogs has taken McDonald's by surprise and refuses to die down. The most interesting part of the story is that by all accounts, Muslims in Singapore were not consulted about the decision, had no problem with a pig toy, and are more than a little annoyed at the unwelcome attention and stereotyping that Muslims are a hyper-sensitive bunch of zealots.

The lesson for companies appears to be to never assume that a decision made my management is the right decision until it's been tested and vetted by actual consumers. And don't take your eye off the ball -- alienating your largest customer base is never a wise thing to do.

McDonald's in Singapore: The pig toy fiasco | CNNGo.com

Friday, January 15, 2010

Shiseido to Buy Bare Escentuals for $1.7 Billion - NYTimes.com

The stock market is down this morning, but Bare Escentuals (NASDAQ: BARE) is up 42% to $18.10. Yesterday, after the markets closed, Japanese cosmetics manufacturer Shiseido made a tender offer to purchase all BARE shares for $18.20 each, or a total purchase price of $1.7 billion. The acquisition allows Shiseido a quick entry into the major U.S. market since Bare Escentuals has a major presence here, including through Sephora and its own stores. The mineral makeup market is also growing rapidly, and Shiseido lacked an entrant in this market. Looks like 2010 is off to a big start in M&A activity!

Shiseido to Buy Bare Escentuals for $1.7 Billion - NYTimes.com

Container Shipping Companies are in Trouble

Globalization of markets and globalization of production means that producers from all over the world can sell goods to customers from all over the world. Part of what made this possible was the containerization that took place in the 1960's along with the development of supertankers to ship those containers. Now, the industry is in serious trouble. The 20 or so major carriers, all Asian or European, lost $20 billion in 2009. Analysts don't see a recovery until 2012 at the earliest.

More Ships Than There Are Containers to Fill Them - NYTimes.com

Thursday, January 14, 2010

First-Person Tetris

I like Tetris. I also like Nintendo. But I don't like this website. I guess it's free Tetris, but sometimes free isn't good enough, you know what I mean?

First-Person Tetris

What Does China Censor Online? | Information Is Beautiful

If you're outside China, this webpage will show you, in red, the words that China censors. If you're inside China, you won't see the words. You'll just see... China.


What Does China Censor Online? | Information Is Beautiful

Wednesday, January 13, 2010

White House Urges Help for Haiti

It looks like Haiti is shaping up to be a major disaster after the worst earthquake in 200 years stuck the capital city yesterday. The White House has a help page up in case you want to help. Text HAITI to 90999 to immediately donate $10 to relief efforts.

Farewell to Google?


Several Chinese citizens laid wreaths and flowers at Google's China headquarters yesterday to mourn the company's departure from China. It may be a little premature to close the book on Google, since the company says it intends on staying unless it's unable to work out a deal with the government to ease up on censorship restrictions. Since it's unlikely the government will allow search results dealing with Tiananmen, Falung Gong, or the Dalai Lama anytime soon, Google may indeed follow through on its threat to leave. The news is being covered cautiously in China, with few outlets mentioning Google's accusation of hacking into human rights activists' email accounts.

Tuesday, January 12, 2010

Google May Exit China

Google says that its services in China was attacked recently, and the target was Gmail accounts owned by human rights activists. The company doesn't say it's the Chinese government, but points the corporate finger in that direction.

In the extraordinary blog posting (hit the jump below), Google says it is no longer going to censor its web results, something it agreed to do as a condition of being allowed to operate in China. The company acknowledges that it may be unable to do this without violating Chinese law, and that it is prepared to shut down its operations and close its offices if that happens.

This is big, really big. Google's corporate motto is "Don't be evil." China represents a huge market for Google, which can sell gazillions of RMB worth of sponsored ads as the market grows. There's also huge potential for Google's other services such as cell phones and mapping technology. Pulling out will surely cost the company millions of dollars in lost profits, and will permit its hungry competitors, from Yahoo to Baidu, breathing room to grow.

Will the Chinese government care? Will the Chinese people care? Don't bet on it.

Official Google Blog: A new approach to China

China Biggest Car Market in the World, Sales up 46%

For the first time in history, more cars were sold in China in 2009 than in the United States. 13.64 million vehicles were sold in China, compared to 10.43 million in the United States. The Chinese number is up over 46% from the previous year, while the U.S. number represents a decline of more than 2.8 million vehicles.

This is very big news. For decades, car makers have focused their energies on the American market because of its size. The American market got the best technologies, influenced vehicle design, and was so big that even smaller manufacturers like Suzuki and Saab could enter and be profitable. Now, China is bigger. That means Americans can expect to see more automakers tailor their products for the Chinese consumer. We'll see that this year with the 2010 Buick LaCrosse, very much a product of GM Shanghai.

China leads the vehicle world on dual fronts -- Shanghai Daily | 上海日报 -- English Window to China New

Monday, January 11, 2010

You Got the Shot Yet?

A reminder that the last free h1n1 shot clinic for all UD students, faculty and staff will be on this Thursday at the recplex, 3-5 pm. Get it now!

How Annoying to Have Elections

Venezuela's Chavez is facing quite the pickle. The country's main export, oil, isn't generating as much cash as before due to lower prices. There's an election around the corner, and his main constituency, the poor, are increasingly unhappy about the poor economy. Inflation is soaring at 27% and the government can't do much to tame it as any steps would further weaken the economy already mired in recession.

The solution? Devalue the currency. Chavez has decreed that the bolivar will now be worth 4.3 per USD, down from 2.15. Since the devaluation will immediately make imports twice as expensive, the government has established a separate exchange rate -- 2.6 per USD, for imports of food, medicine and other "essential goods" (I'm sure iPods and plasma TV's for government officials count as essential).

The result? Immediate chaos. People rushed to spend their money this past weekend, fearful that their purchasing power for imported goods will plummet (it will). The black market rate for the bolivar (what you'll actually get on the street) plummeted to 6.25 bolivar per USD. The government estimates devaluation will add a further 5 points to inflation (likely a gross underestimate). Imports will become very expensive and the domestic economy will suffer as people and companies grapple with the meaning of the dual-tiered devaluation and spiraling inflation.

For the government, these risks are outweighed by the benefit of immediately having more bolivars to spend for every barrel of oil sold. Those bolivars go into government programs to help win elections. The slowdown of imports also acts as a kind of trade barrier to protect and stimulate local manufacturing. And many banks, which hold US dollars, will benefit too. Time will tell if this is a shrewd move to maintain power, or the desperate move of a madman pushing his country further into economic oblivion.

Devaluation Sparks Chaos in Caracas - WSJ.com

Sunday, January 10, 2010

Got 1:44? Watch this.

Time to Start Thinking About Exchange Programs!

INB Majors:

If you're thinking about participating in an exchange program in the 2010-2011 academic year, now is the time to start thinking about where you want to go. Our deadline for applying for an exchange program is March 1, so you have lots of time to consider this option if you start the process now.

Even if you've studied abroad in a summer program before, an exchange program is a very different and unique experience. In an exchange program, you maintain your status as a UD student while studying at a foreign university for a semester or academic year. You continue to pay UD tuition (and your UD financial aid package applies), continue to keep your status for registering classes and can participate in the housing lottery just as if you were still on campus. It's a fantastic way to immerse yourself in a foreign culture and language while keeping yourself on track for graduation on time with your peers, and keeping your summers free for internships or jobs.

We have several exchange programs to choose from, all around the world. I want to especially highlight an option many of you may not have considered before -- Korea. Our partner, Korea University, has the best and oldest business school in South Korea. The President of South Korea is an alum of KU. The business school is accredited by AACSB International, just like UD's SBA, which means that virtually all their classes transfer into your degree audit without much difficulty. You can see the courses they offered this semester here.

KU also offers a $1200 scholarship for UD students who participate in the exchange program. This will take care of your airfare to Seoul, so that the cost of participating in this exchange is almost the same as as the cost of attending UD for a semester! There are additional grants available to travel throughout Korea to see more of this fascinating and important Asian economy. Korea's experience from a very poor country to a rich, industrialized economy (Hyundai, Daewoo, Kia, LG, Samsung are just some of the examples of chaebols that have emerged as global powerhouses) is an excellent one to illustrate the transformative power of free trade and globalization, and you can see it firsthand by spending a semester there.

Participating in an exchange program is a great way to meet the INB requirement for international experience and to pick up INB electives. Additionally, I am willing to negotiate the language requirement for INB majors who participate in the Korea program, because I realize many of you don't speak Korean and have no way of learning Korean. Please note that Korean language skill is not a requirement for this exchange, as all your classes will be taught in English.

If you're interested in learning more about this opportunity, or about participating in an exchange with our program partners in China, Finland, France, Germany, Ireland, Italy, Mexico, Morocco, Netherlands, or Spain, please see me or Tina Manco at CIP. Thanks!

Saturday, January 9, 2010

What Font are You?

A very cool website, and an interesting concept. Answer four questions about your personality, and find out what typeface you are. Password is "Character".

http://www.pentagram.com/what-type-are-you/

Friday, January 8, 2010

More Chinese Scientists Leaving U.S. to Return to China

China has long suffered a "brain drain" where their top scientists and researchers leave for studies at American and European universities, and then stay. It's a drag on economic development for top talent to flee like this, so Chinese authorities have started a concerted effort to keep their best minds at home. The effort extends to attracting those who have already left to come back, and some top scientists at top universities are doing exactly that, as the N.Y. Times reported yesterday.

Money quote from the article:

Rao Yi, a 47-year-old biologist who left Northwestern University in 2007 to become dean of the School of Life Sciences at Peking University in Beijing, contrasts China’s “soul-searching” with America’s self-satisfaction. When the United States Embassy in Beijing asked him to explain why he wanted to renounce his American citizenship, he wrote that the United States had lost its moral leadership after the 9/11 attacks. But “the American people are still reveling in the greatness of the country and themselves,” he said in a draft letter.

Uneasy Engagement - After Brain Drain, China Is Luring Some Scientists Home - Series - NYTimes.com

Thursday, January 7, 2010

Costa Ricans Happiest in the World

Costa Ricans are the happiest people in the world, and Nick Kristof thinks its because they abolished their military decades ago and use their money on things like education. Denmark is next, the U.S. is 20th on the list, and Togo and Tanzania, well they're just plain unhappy.

Xin Nian Kwai Le

Happy One Week Old, 2010!

Here's one of the most popular singers in Asia, singing one of the hottest songs at a New Year's Eve concert a week ago. In English, the song translates into "At Least I Have You" and it's an oldie but a goodie. In Mandarin, "Happy New Year" is "Xin Nian Kwai Le" -- so Xin Nian Kwai Le to everyone!

DCOWA/MVITA Hosting Former U.S. Ambassador to Honduras

DCOWA and MVITA are hosting a former U.S. Ambassador to Honduras as featured guest at an upcoming dinner on January 25. The student admission price is only $20. This will be a great opportunity to network and learn something about US-Honduran business relationships! The description of the program is below, and registration information is at the MVITA website.

Ambassador Charles A. Ford, former U.S. Ambassador to Honduras (2005 to 2008) will be the featured speaker for this dinner. In addition to Ambassador Ford’s 25 year career in the Foreign Commercial Service, he served as the Senior Advisor to the Ambassador on U.S. business issues at embassies in Argentina, Spain, Guatemala, the United Kingdom, Venezuela and the U.S. Mission to the European Union.

Wednesday, January 6, 2010

Busy Two Days for Nestle

Nestle's in-house transactional lawyers deserve a break! In the space of two days, the Swiss company:

1) Sold its take in U.S. Alcon Inc. to fellow Swiss company Novartis AG for $28.1 billion, thus exiting the ophthalmology sector completely;

2) Purchased Kraft Food's frozen-pizza business in the U.S. and Canada, for $3.7 billion in cash; and

3) Announced it is no longer bidding for Cadbury, leaving the nasty battle for the British candy maker to Kraft and Hershey.

When the dust settles, Nestle will be a focused food company. It still has a 29% stake in French cosmetics company L'Oreal SA, but will no doubt exit when it can. Nestle now adds DiGiorno and Tombstone to its Maggi, Buitoni, Hot Pockets, and Gerber. Up next -- General Mills?

Nestlé Sharpens Food Portfolio - WSJ.com

When Outsourcing Reverses Itself

Yesterday in class I made the bold proclamation that if we aren't careful about how we manage the economy going forward, we may all end up working for the Chinese one day. Today the New York Times ran a story about how this is already happening in some segments of the computer industry (just ask former IBM Thinkpad employees).

We all know computer companies like HP and Apple don't actually have any factories of their own. They design a cool gadget like a new color printer or iPod, then ask a contract assembler in Taiwan or China to put it together for them. For years, that's how it worked.

Now, those contract assemblers are starting to grow up. With names like Quanta or Foxconn, most Americans have never heard of these companies before. These two in particular, however, are investing millions of dollars into new technologies and startups, sometimes in the U.S., so that they can eventually compete with... their own customers.

Asian Computer Makers Move Into Riskier Ventures - NYTimes.com

FDA About to Approve New Jet Lag Drug

There are two problems with jet lag -- sleeping at night and staying awake during the day. For the first problem, there's Ambien and Lunesta. Now, for the second problem, the FDA is considering approving Nuvigil (who thinks of these names?), a drug originally designed to fight narcolepsy.

I'm not sure if I'm willing to try this one. A good night's sleep and a Starbucks at 3 pm works great for me!

Fighting Jet Lag May Help Cephalon Extend Patent on Nuvigil - NYTimes.com

China Dethrones Germany as Top Goods Exporter

In 2007, China replaced Germany as the world's third largest economy. Soon, it will become the world's second largest economy, replacing Japan. It'll probably be a while before it replaces the U.S. as the world's largest economy, but that could happen too.

In another major milestone, China has now officially become the world's largest exporter, replacing Germany. China exported $957 billion worth of goods in the first 10 months of 2009, overtaking Germany's $917 billion.

China Dethrones Germany as Top Goods Exporter - WSJ.com

Taiwan Bans Some U.S. Beef

Taiwan has decided to reimpose a partial ban on U.S. beef. The ban extends to minced beef, cow offal (?), and all beef from cattle over 30 months old. The ban is imposed under a health and sanitation law, which I suppose makes it legal under international rules. The U.S. is not happy, claiming that the ban isn't based on scientific evidence and in fact may be illegal under international treaties in place.

Taiwan Agrees to Reinstate Partial U.S. Beef Ban - ABC News

New U.S. Import Documentation Required Soon

U.S. Customs and Border Protection is implementing a new security feature effective January 26. The "ISF" or "Importer Security Filing" includes 10 elements about the importer of record and 2 elements about the carrier, so it's called a 10+2 filing. The information isn't onerous, it's basic stuff like buyer, seller, HTS number, and so forth. Failing to comply is not good, though, because the fines are pretty stiff: $5000 to $10,000 for each violation. Hit the link for more information.

Tuesday, January 5, 2010

Worst. Dating. Advice. Ever.

As I was walking into the building today I heard this conversation between two undergraduate males behind me today:

Male 1: Yeah, dude, I don't know if I want to keep dating her. I mean, like, she absolutely says I shouldn't be seeing anyone else.
Male 2: Dude, you just have to keep it casual, you know? You can just date casually and keep it, you know, open.
Male 1: Yeah, but she's really not about that.
Male 2: Dude, if the relationship is meant to happen it'll happen. It shouldn't be hard work. If you gotta work at it it's totally not worth it, you know what I mean?

Umm... yeah. Words fail.

Travel Deals

I love traveling. There's something about leaving the U.S. that gives you a whole new perspective on life and the U.S. itself. Here are some cheap ways to get out of town:

TACA is offering $270 for JFK-LIM. Tempting! Good for many dates in March and April.

Air Bulgaria (www.air.bg) is offering JFK-LHR for $376 all in. These flights are operated by Virgin Atlantic, a fine airline to cross the Atlantic in. Good for many dates in March.

Drop me a line if you know of any other good deals to get out of town, or if you book one of these!

Monday, January 4, 2010

To Make a Bicycle

Sourcemap.org is a really cool idea. The website allows users to submit "sourcemaps," which are essentially supply chain diagrams of common products. The site's platform is completely web-based, and allows all kinds of customization. The whole idea behind Sourcemap is to drive transparency into the supply chain so that you, the consumer, knows what it took to make your iPod, Mac and Cheese, etc. Environmental impact is particularly important, as it allows you to calculate carbon emissions in each step of manufacturing, including delivery to your final destination.

Obviously Sourcemap isn't going to have any really sensitive or confidential information on real suppliers or pricing. And it depends entirely on user contributions for content. With time, though, I hope this project takes off. It's a great example of web technology enabling transparency in global manufacturing.

Here's a good example of a Sourcemap. It looks even better on the website, where you can play around with different options and see a description of the components. Check out the site to see one for an Ipod and Mac n Cheese!

Mary Kay in China

Mary Kay is making huge inroads in China using the direct selling method. As part of China's entry into the WTO, restrictions on direct sales were lifted, allowing companies like Amway and Mary Kay into the market. Prior to this, the use of sales agents or retailers were required. If you go to Beijing or Shanghai and see a Mary Kay pink car (it might even be a Cadillac since China is now Cadillac's second most important market after the U.S.), then you'll know why. Hit the link for a short video on how Mary Kay is working this magic in China.

Chinese Communist Party develops taste for cosmetic surgery - Telegraph

We all know how much pressure there is in being a government official. There's the meetings, the press conferences, the leadership pressure, the politics of getting ahead, the annoyance of dealing with whiny constituents. It's even worse when there's a young twenty-something junior bureaucrat in your department gunning for your job. What's a senior, 40-60 year-old Communist politburo party member to do?

An eyelid lift and some botox, of course.

Chinese Communist Party develops taste for cosmetic surgery - Telegraph

And please. Don't tell me U.S. politicians haven't done it too. Have you seen Hillary Clinton lately? Or how about John Boehner's permanent tan?

More MBA's Returning to Asia

Some interesting numbers from the folks who run the GMAT: 29% of all GMAT takers are from Asia. Interestingly, a lower number of these Asian GMAT students are sending their GMAT scores to U.S. business schools. In 2008, 71% sent their scores to U.S. schools, while in 2004, 77% did so.

The number of GMAT scores sent to Indian MBA programs went up 470%, to Singapore schools up by 305%, and to Chinese programs, up by 112%.

So what gives? The dismal U.S. economy probably isn't helping, and neither are restrictive U.S. visa requirements. But as the Businessweek article where these numbers come from points out, there's also no doubt that Asian B-schools are stepping up their game in terms of curriculum, students, and faculty.

Assumption of Risk

There is a doctrine in tort law that states that if someone knowingly assumes a known risk, the defendant can raise "assumption of risk" as a defense to a negligence lawsuit.

I'd say what happened this weekend at a St. Louis Rams game when some fans decided to grab a SHOE qualifies as assumption of risk.

Sunday, January 3, 2010

Globalization in a Commercial

It's been almost a year since this commercial hit the airwaves in Europe. When I worked in London for a summer back in 2000 (wow, almost 10 years ago!), I lived out in Crawley and often took the commuter train in to Liverpool Street Station, a major connecting hub in central London. I can't imagine what I would have done if I was there when this commercial was being filmed. It turns out that this is one of Ad Age's top 10 viral videos in 2009.

So here we have -- a German telephone company, familiar to Americans, in a dance commercial in London, featuring dancing to American pop songs. Sometimes globalization can be delicious.

Imagine living in a capsule


If you've ever been to Japan, a stay in a capsule hotel is a must. You may have seen these before, little capsules that serve as a temporary place to take a nap or a quick overnight for the worked salarymen too tired to make the hourlong commute home.

The worldwide economic recession has meant that some Japanese are now moving into capsules -- for good. Their entire lives are packed into one of these "rooms." The rent is $640 a month and it comes with fresh linens and free use of communal bathrooms. Quite a bargain! Hit the link for more.

Win a trip to Africa

I've always been a huge fan of Nick Kristof, a columnist for the New York Times. He writes a lot about the developing world and the effect that business can have, both for the better and deleteriously, on the lives of millions who continue to live in poverty.

Kristof has spent quite a bit of time in Cambodia, and has written extensively about the unique circumstances there. The country is classified by the U.N. as "LDC" -- least developed country. It has an astonishingly young population, and that leads to unique problems and opportunities.

In 2010, Kristof is once again holding a contest. The lucky winner will travel with him to Africa to some of the poorest places on Earth to see, experience, and write about the developing world. It's the third year in a row he's doing this, and there will no doubt be thousands of applications. If you have any talent as a blogger, vlogger, or in writing generally, and you're in college, you should seriously consider applying.

Higher Education is a funny thing.

Higher education is a funny thing. For four years, a student forks over money to an institution called a University or College. In some cases, it's a lot of money. In return, faculty members show the student how to become a professional. In some cases, the faculty member hasn't actually been a professional before. In four years, after one weekend called graduation, the student is told to go forth and become a professional.

If a golf school told a student, hey, give us $30,000 a year and we'll show you videos of Tiger Woods swinging a golf club for four years, and after four years you get to try swinging one yourself and you'll be ready to compete in the Masters, that school would probably be shut down by state authorities.

And yet, in many ways, higher education does exactly that.
We're aiming to do something different at UD's International Business program. We talk a lot about connecting theory to practice, but in reality it's a pretty hard thing to do. How do you students get to actually deploy classroom learning into practical experience? The question has vexed students and educators alike for decades. It's not an easy thing to do, but just because it's hard doesn't mean we walk away from it. Will you become part of this journey?