Driving the Chevy Volt

Fast Company takes the Chevy Volt for a spin. The car will cost more than $30,000 when it goes on sale later this year. It's the first electric plug-in vehicle. It travels 40 miles on electricity alone, and then a small gasoline generator fires up to charge the batteries. Unlike a hybrid, the gas engine never powers the car -- the Volt is powered by batteries all the time. It's a technological powerhouse, and each one will be sold at a loss. That may not be enough to turn it into a commercial success.

Making a Run for the Border... in Bangalore

Taco Bell has opened its first outlet in India, in a shopping mall in Bangalore. Yum Foods is embarking on a strong expansion in India with its KFC, Pizza Hut and Taco Bell brands, and is planning on opening many more stores in the future. The first week of business has been a resounding success, with crowded stores and long lines as more than 2000 curious Indians try out their very first taste of Mexican food each day.

Don't expect to see the same Taco Bell if you go there, however. It's cheaper, with men items starting at 40 cents. More than 50% of Indians are vegetarians, so Taco Bell has removed all beef from the menu, and created new options such as "Crunch Taco Potato" and "Paneer and Potato Burritos." The company has mounted a "tacopedia" on the restaurant wall to explain what Mexican food is, and how to pronounce "quesadilla." And the company is introducing a fast food first in India -- unlimited free refills on soft drinks.

The Weather Guy Isn't a Fan of Climate Change

There's a big difference between meteorologists and climatologists. Besides the obvious (one predicts whether it will rain next week while the other examines prehistoric tree rings to detect historical carbon dioxide levels), they differ sharply over whether global warming is real and whether it's caused by human activity. Head over to my other blog to read more about this interesting debate.

Can You Sell a Brick?

Advertising giant Ogilvy is looking for the best salesperson in the world. If you can sell a red brick, you could win a fellowship at Ogilvy. Video applications are now being accepted.

Geely Buys Volvo

I can still remember that morning in 1999, waking up to NPR's Morning Edition announcing that Ford had bought Swedish car company Volvo. Like the vast majority of Ford employees that day, I had no idea about the deal, and it was great. Volvo was a terrific brand and the company was flush with money, so why not? Even the $6.5 billion price tag didn't seem too outlandish at the time.

Fast forward a decade later, and once again Volvo has switched owners. This time, a Chinese car company that virtually no American has heard of, Geely, has purchased Volvo for $1.8 billion. Here are my thoughts on what this means for the three companies.

First, for Geely, it's a bold move. Geely is ambitious and wants to sell more motor cars. To enter important markets in the U.S. and Europe, it could create a brand identity, establish dealer and supplier networks, and gradually build consumer confidence. Others have done it -- think Lexus, Infinity, Acura, even Hyundai -- all built their brands and operations from the ground up. It takes money, time, and a lot of patience. And you only get one chance to get it right -- think Yugo. Or, Geely could just buy an existing company. By buying Volvo, Geely has catapulted itself as a major worldwide automotive company. There's no doubt a lot of celebrating going on in China right now.

For China Inc., it's another prize to crow about. I always joke about working for the Chinese one day -- that day just came for a lot of Swedish workers. It'll come to America too - just ask anyone who works at IBM's former Thinkpad division about what it was like to go for working for IBM to working for China's biggest computer company, Lenovo.

For Volvo, I think it's a good move. Volvo suffered a bit of a brain drain after the Ford acquisition, as many Swedish employees chafed under American management. As long as Geely keeps its hands-off promise, Volvo may be able to grow as an independent Swedish company again. There's some risk for Volvo because it benefited handsomely from Ford's global product portfolio, and many existing and new Volvo products were co-developed with Ford and Mazda to spread out engineering and tooling costs. Once those programs phase out, Volvo will be on its own to develop product again, which is very expensive. If Geely is successful at raising Volvo's volumes, however, product development should continue at a healthy pace at Volvo.

For Ford, I think it was a bad decision. Getting rid of Jaguar, Land Rover and Aston Martin made sense for many reasons, but Volvo was different. In spite of struggling to help Volvo turn a profit, Ford benefited from Volvo's product safety engineering and manufacturing expertise. The sale price was paltry and will hardly make a dent in Ford's $20 billion+ debt load. I think the benefits of hanging on to Volvo outweighed the costs of keeping it, and for that reason I would not have sold it.

Will Americans Leave Nike for Li-Ning?

I've long felt that while the Chinese have made giant strides in manufacturing technology, operations efficiency and even new product development, they haven't cracked the marketing nut yet. Once they do, they'll become strongly competitive with American companies, who figured out a long time ago that marketing, convincing someone to spend money on something they don't need, is the key to brand equity and subsequent pricing power. Now, Chinese shoemaker Li-Ning is going to test that assumption. The company, which currently makes 99% of its revenue from sales within China only, is about to launch in the U.S. with a high-profile store in Portland, right in Nike's backyard. Will Li-Ning become a household word like Hyundai and Samsung have done so well? Time will tell.

It's College Entrance Exam Time in India

Think the SAT or ACT was hard? Then imagine what it's like to get into college in India. That country's huge young population, coupled with very limited spots in colleges, means that the competition to get into college is intense. Students have to take a series of tests spread out over a month (a month!) and score higher than 90 or 92 in some cases in order to be gain college admission. The result is stress, anxiety, and a lot of after school tuition and studying, as the article and this excellent video illustrate.

Indian Students Wield Tests for College Spots - NYTimes.com

Burmese Find Release in Music and Art Under Repressive Junta - NYTimes.com

This is Thxa Soe, a Burmese DJ and rock star. His concerts draw thousands of young fans in Yangon, Burma's capital city, to a drunken (yes, you read that right) celebration of music and art. In a country where it is illegal to gather more than 5 people at a time, and a military dictatorship controls all aspects of life, in the last two years displays of music and art have started to appear. Hit the link for a pretty amazing video of one of his concerts, something I never thought I would see in Yangon.

Burmese Find Release in Music and Art Under Repressive Junta - NYTimes.com

Will Carbon Cap and Trade Ever Come to the U.S.?

I'd say the answer is No. Here are my latest thoughts on carbon cap and trade, the system proposed by the House of Representatives last year to begin limiting the amount of carbon permitted into the atmosphere and to allow companies to buy and sell carbon allowances under that cap.

Quick Intro to Line2 for iPhone from Toren Ajk on Vimeo.

David Pogue (NYT) reviewed a really cool iPhone app called "Line 2." It creates a second line on your iPhone, with a separate phone number, that runs over VoIP (internet) when you are in a wifi zone, saving precious cellular minutes. It costs $15 a month, but that could be a lot cheaper than paying AT&T for expensive high-minute plans.

Europe’s Choice: Growth or Safety Net - WSJ.com

The WSJ has an excellent Page One article this morning about Europe, and the hard choices Europeans have to make. Creating the EU free trade zone and adopting a common currency was meant to make the Euro zone a global economic powerhouse, but now that the Euro is ten years old, many economists believe that Europe faces a future of economic stagnation unless member countries decide to ditch old safety nets designed to protect the poor and unemployed in favor of more open-market liberalism. Failure to do so, they warn, will lead to even more economic pain ahead for Europeans.

Europe’s Choice: Growth or Safety Net - WSJ.com

Some Good Advice

Dartmouth's endowment dropped 23% in the 2009 fiscal year, losing nearly a biliion dollars and requiring a cut of $50 million from the school's annual operating revenue. So the elite school raised tuition by 4% and started looking around at other ways to cut costs, to the tune of about $100 million. The new President of Dartmouth, Jim Yong Kim, called on his friend Michael Porter from Harvard Business School. Porter's advice? Don't do across-the-board decreases, that's not strategic. So Dartmouth went looking for other ways to cut costs. Just by taking some steps like decreasing the size of trash bags, the university expects to see cost savings of $294,000 per year.
How Dartmouth's Chief Tackled Budget Gap - WSJ.com

Daimler to pay $185M penalty | detnews.com | The Detroit News

German automaker Daimler has agreed to pay $185 million in penalties to the U.S. government for engaging in widespread bribery in foreign countries, in violation of the Foreign Corrupt Practices Act. The company paid millions in bribes in over 22 countries over a 10 year period (including in China, Croatia, Egypt, Greece, Hungary, Indonesia, Iraq, Ivory Coast, Latvia, Nigeria, Russia, Serbia and Montenegro, Thailand, Turkey, Turkmenistan, Uzbekistan, and Vietnam), in order to secure contracts with government customers for the purchase of Daimler vehicles valued at hundreds of millions of dollars.

The extent of Daimler's corruption is breathtaking. I'm sad to see that no individual has been prosecuted and that the company is essentially taking a business write-down on these penalties. There are two key lessons to be learned here -- one, corruption is alive and well in many parts of the world, with government officials only too happy to accept a discount on a nice new Mercedes in return for government contracts. Two, if you believe in the power of consumer action, don't buy a Mercedes.

Daimler to pay $185M penalty | detnews.com | The Detroit News

W.T.O. Rules Against Aid to Airbus Jets

The WTO has ruled that launch aid to Airbus to develop the A380 was illegal. The launch aid, mainly in the form of loans that did not have to be repaid if the program didn't make any money, helped Airbus leap ahead of Boeing in 2003 in number of jets sold. If Airbus does not pay back the launch aid, the U.S. could retaliate by imposing tariffs on a wide variety of European goods. Still to be decided is Airbus' counter-suit alleging illegal U.S. subsidies to Boeing. That decision is expected later this year.
W.T.O. Rules Against Aid to Airbus Jets - NYTimes.com

Official Google Blog: A new approach to China: an update

Well, it's happened. Google has stopped censoring the results of its search engine in China, meaning users can search for results involving all sorts of sensitive topics including the Dalai Lama and the Tiananmen Square massacre. Users in China will be redirected to Google's servers in Hong Kong, which deliver unfiltered results. Sporadic reports from China are that access to the Hong Kong site has already been blocked by Chinese authorities.

Official Google Blog: A new approach to China: an update

In spite of Japan's victory in preventing a proposed export ban on bluefin tuna, fish consumption in Japan has dropped below meat consumption for the first time. More and more, younger Japanese consumers are turning away from fish as Japanese diet becomes more Westernized, as this WSJ video report demonstrates

Greenpeace Targets Nestle

Palm oil is a key ingredient in making a lot of consumer products, including candy such as Kit Kat. Greenpeace is targeting Nestle, the manufacturer of Kit Kat, for buying palm oil from Indonesia, which Greenpeace says releases carbon into the atmosphere and destroys natural habitats for orangutans. Greenpeace has released this video (warning: it's kinda gruesome), which prompted Nestle to attempt to remove it from YouTube, only to draw even more attention to it.

Business school grads flocking to Asia for jobs - BusinessWeek.com- msnbc.com

This is James Crawford. He's about to graduate Columbia with his MBA. Instead of heading to Wall Street or Silicon Valley or into a private equity firm, he's heading to Shanghai, as more and more MBA graduates are doing these days.
Business school grads flocking to Asia for jobs - BusinessWeek.com- msnbc.com

The Life Raft

If the entire world was destroyed by a catastrophe, leaving only an auditorium full of college students alive in a life raft, and these students had to vote to take along only one professor, which professor would it be? That's the premise of the University of Montevallo's life raft debate. Professors (one from each discipline) plead and make the case of why their discipline is so important that the students must take them along on their life raft. At the end of the debate, a final faculty member plays The Devil's Advocate and argues why the students should take no one. Click here to see the webcast of this year's debate, and here to hear a NPR segment about the debate.

So which would you vote for? The mathematician? The business strategist? The musician? Which one would be most useful in this new society?

UIBE Visits UD

UD's partnership with UIBE (University International Trade and Economics) got off to a fantastic start this week with the visit by Dr. Ming Men (Professor of Finance) and Mr. Andy Zhou (Graduate student in Finance) to Dayton to attend the RISE Forum. Before things kicked off with RISE, they spent a day on campus visiting with Dr. Dan Curran (UD's President), speaking with SBA faculty about joint research projects, and meeting with UD students (most dressed in green for St. Patrick's Day) to speak about what life at UIBE would be like for them if they studied in Beijing for a semester. Here are some pictures from their visit.

U.N. Rejects Export Ban on Atlantic Bluefin Tuna

Sushi lovers can breathe a sigh of relief that tuna will still show up on the menu, at least for now. The U.N. has rejected a U.S.-backed plan to place an export ban on Atlantic bluefin tuna. The bluefin tuna is mainly fished in European countries, and the E.U. abstained from supporting the U.S. proposal. The decision is a victory for Japan, which consumes most of the bluefin tuna caught. Tuna stocks are down 80% since 1980, and the U.S. expressed great disappointment in the failure of the U.N. to protect the fish from further population decline.
U.N. Rejects Export Ban on Atlantic Bluefin Tuna - NYTimes.com

Thai Protesters Gear Up for Busy Weekend - WSJ.com

Fears of escalating violence in Bangkok have failed to materialize, as last weekend's protesters started to leave the city over the week. By mid-week, their numbers had decreased to about half what they were, and life in Thailand's capital city continues at a normal pace. The marchers are back this weekend, however, and are promising to continue with their blood campaign, using donated blood from supporters to splash on government buildings and to create works of art. Good time to invest in medical scrubs and gloves in Bangkok.

Thai Protesters Gear Up for Busy Weekend - WSJ.com

Malaysia Set for Affirmative-Action Showdown - WSJ.com

Malaysia may be the only place in the world with affirmative action for the majority. Since the 1970's, the government has aggressively pursued a system to provide preferential treatment for the majority Malay population, in virtually everything in civil and military life from college admissions to mortgage and car loans, to property rights, to jobs and career development. While the program has had some success in closing the gap between Malays and ethnic minorities who tend to be more economically successful, it has also caused deep divisions in society and led to criticism that Malaysia's economic miracle is slowing down. The affirmative action debate is coming to a head, as the Prime Minister is expected to outline plans this month to end the system of racial preferences.

Malaysia Set for Affirmative-Action Showdown - WSJ.com

High-Speed Rail Gains Traction in Spain

Six million people live between Barcelona and Madrid, a distance of 325 miles. The journey takes 6 hours by car, but now most of those people can take a 186-mph train that reduces journey time to 2 hours and 38 minutes, from city center to city center. The journey is fast, comfortable, and environmentally friendly. The service is transforming travel in Spain, and has implications for the E.U. as well.
Barcelona-Madrid Journal - High-Speed Rail Gains Traction in Spain - NYTimes.com

China Drawing High-Tech Research From U.S.

You could have seen this one coming. Developing economies nearly always start with low-skill, high-labor cost assembly such as garment and commodity manufacturing. As more foreign companies invest in that economy, technology transfer takes place, and wages begin to rise. As wages rise, more people go to school, further hastening economic development. As economic development rises, volumes go up and more of the factories' output ends up being sold locally. As volume rises, more of those foreign companies, that initially invested to take advantage of low labor costs, start paying attention to the local market as a place to sell their goods. The more that happens, the more those companies eventually decide to move R&D efforts and development to that country. That's exactly what is happening in China today, as the NYT explains.

China Drawing High-Tech Research From U.S. - NYTimes.com

Change Comes to Myanmar

Myanmar (also known as Burma) is one of the saddest places on Earth. The people are kind and friendly, but they've been living under a military dictatorship for decades, and a democratically-elected President, Nobel-prize winning Ang San Suu Kyi, has been under house arrest for more than a decade. The country is desperately poor in spite of being rich in natural resources, and most Burmese do not have round-the-clock electricity. Now, some minute signs of progress are beginning to surface, including a very slight trade liberalization as private hospitals and schools are established, and some privatization of state-owned companies is planned.

Change Comes to Myanmar, but Only on the Junta’s Terms - NYTimes.com

Are you a Digital Native?

Many thanks to Brian Bailey, a UD '94 grad (Marketing and Finance) for speaking to my Capstone class on Tuesday. Brian, who works at NCR, gave a fantastic presentation on NCR's business units including his own in product line management. Brian also introduced the class to the terms "Digital Native" and "Digital Immigrant," referring to those who grew up with technology and those who didn't. Companies that understand digital natives have a shot at reaching this audience through the ways they communicate, and those that don't, well, don't have a shot.

Last night at dinner with some colleagues I was explaining these terms to them, and one mentioned that his teenage daughter's cell phone bill showed 10,000 text messages in one month. I looked at my cell phone bill when I came home -- 15 text messages. I guess that puts me firmly in the "digital immigrant" camp!

Protesters Pour Blood in Bangkok Rally - WSJ.com

That's not red paint being poured outside Bangkok's parliament -- it's human blood.

Protesters unhappy with the current Thai government have converged on the Thai capital to demand the dissolution of Parliament and hold new elections. Today those protests took a gruesome turn when volunteers each gave a small amount of blood, then pooled into gallon containers, to pour and smear over government buildings. This developing story is worth watching.

Protesters Pour Blood in Bangkok Rally - WSJ.com

Floating Loans on the River Bank - WSJ.com

What do you do if your customer lives so far in the remote jungle that they have to travel a week to get to the nearest town? You hire a boat and set on a 1000 mile course down the Amazon river and sell beans and rice and use a portable ATM to help them do their personal banking, that's what. This amazing story of entrepreneurial spirit and going to extremes to reach the customer is featured in this morning's WSJ on page one. What I'm curious about is how much the ATM fee is. No word on that yet.



Floating Loans on the River Bank - WSJ.com

U.S. Consumers Paying Record Prices for Sugar

Sugar is a key ingredient in an awful lot of foodstuffs Americans consume, which may be a reason why there is an import quota on sugar of 1.3 million metric tons. Over 85% of the sugar consumed in the U.S. is grown domestically, and the rest is subject to an import quota.The quota was imposed in the 1970's and hasn't really been updated since then -- they're so outdated that some countries that don't even produce sugar anymore (such as Jamaica and Haiti) continue to have sugar quotas allocated to them. As a result, the price difference between sugar sold on the world market and U.S. prices is at a record level. That may change with the imposition of new sugar quotas on April 1.

Source: WSJ

When we used to live in Washington D.C., we met an awesome couple, Ash and Amanda. Ash is an engineer by day and budding musical artist by night. His career is taking off in a big way, and he recently recorded this incredible music video. Enjoy!

UIBE Professor to Speak at UD Next Week:

Promo for an important event at UD next week:

China is now the world's largest exporter (replacing Germany), third largest economy, and world's biggest auto market (replacing the United States). GDP growth in the fourth quarter of 2009 was 10.7%, and China is estimated to replace Japan as the world's second largest economy later this year. Trade liberalization has lifted millions in China out of poverty and into the middle class, and these new consumers are ready to spend. Never in the history of humankind has one country developed as rapidly as China. In short, China's economy is booming!

The possibilities for American-based businesses in China are nearly endless. No matter what your major, and no matter what industry your career takes you to, at some point in your career you will likely interact with employees, co-workers, supervisors, suppliers, or customers, in China. The more you can learn about business practices in China now, the better prepared you'll be for those future interactions.

The School of Business Administration is in the final stages of negotiating an exchange and cooperation agreement with one of China's top business schools, the University of International Business and Economics (UIBE) in China's capital city, Beijing. UIBE has an international reputation for excellent business education. Many senior officials from China's government, especially the Ministry of Commerce, are UIBE graduates, including the current Chinese ambassador to the United States. Fun fact: although UIBE is mainly a business school, it does have several arts & sciences departments as well, and one of UIBE's music professors is a star in China and sang the Olympics theme song along with Sarah Brightman at the opening ceremonies to the 2008 Olympic Games in Beijing!

Under our partnership, SBA students will have the opportunity to study for a semester at UIBE in Beijing. The classes will be taught in English by world-class faculty and there is no language requirement to participate. If you are interested in this opportunity, you are invited to learn more about UIBE from a UIBE professor next week. Dr. Ming Men, Professor and Director for Center for Financial Markets and Investment at UIBE (and a former Fulbright Scholar), will be attending RISE next week and has agreed to speak to SBA students about what it's like to study at UIBE and live in Beijing. Here are the details:

WHAT: "Studying at UIBE"

WHEN: Wednesday, March 17, 2010

TIME: 4:30 - 5:30 pm

WHERE: MH 209

WHO: Dr. Ming Men, Professor, UIBE
Seating is limited, so be sure to arrive early. If you have any questions about this opportunity, please don't hesitate to email me. I look forward to seeing many of you next week!

Google the Hungry Beast

Although this blog is posted on Blogspot, a Google company, and Google is generally a well-admired company, there are a lot of privacy concerns surrounding Google's ever-growing business. The video posted on Youtube (another Google company) above illustrates why there's room for concern.

China and India Agree to Join Copenhagen Accord

By all accounts, last December's climate change conference in Copenhagen was a near total failure, with only a non-binding protocol by which nations agree to "take note" of global warming and submit their plans to reduce carbon resulting from months of planning. Absolutely disappointing! In spite of the extremely soft language in the protocol, it took nearly three months for China and India to even agree to be listed as "taking note" of climate change. What good gobal citizens they are!

And we're back...

After a well deserved spring break and enjoying the incredible weather we've been having in Dayton, I'm back in the saddle again. Did you miss me? :)