In Gurgaon, India, Dynamism Meets Dysfunction

Although India is considered to be as economically promising as China, and its population is predicted to surpass China's in coming years, the two countries share little in common.  While both have embraced capitalism, the role of government in fostering economic prosperity is widely disparate.  In China, a strong central government has invested billions in infrastructure to permit companies to prosper and goods to move freely.  In India, however, a weak government means that businesses there prosper in spite of, not because of, the government.  One example is the city of Gurgaon, near New Delhi.  Gurgaon is a booming city filled with malls and businesses, but it lacks basic city infrastructure such as a functioning sewer system, reliable electricity or water, public sidewalks, parking, decent roads, or any system of public transportation.  Companies that operate in Gurgaon therefore provide these services to their workers, as this excellent and eye-opening article in the New York Times explains.

In Gurgaon, India, Dynamism Meets Dysfunction - NYTimes.com

Chesapeake Bay Candle Struggles to Open U.S. Factory

Chesapeake Bay Candle is a major player in the multibillion dollar scented candle industry.  In spite of its name, all its candles are made in Vietnam and China.  Recently, due to increasing wages in those countries and high shipping costs, the company decided the time was right to start making candles in the U.S.  What the company did not account for was how much more expensive it is to build a factory in the U.S., with many laws and codes to comply with.  The factory is now over budget and delayed, and the founders are wondering whether the U.S. is ready to compete with Asia for manufacturing business.

Chesapeake Bay Candle Struggles to Open U.S. Factory

Skin-Deep Gains for Amazon Tribe

The plant on the left is urukum, which is used to make a pigment dye for Uruku lipstick, made by Aveda on the right.  Aveda, a unit of Estee Lauder, buys Urukum from the Yawanawa Indian tribe in Western Brazil, where they have used urukum to make body paint for a long time.  Aveda joins a long list of companies, including Starbucks, Ben & Jerry's, Whole Foods, and The Body Shop, which uses cause-related marketing to convince consumers that their product are eco-friendly and can lead to sustainable community living as well.  The Yawanawa, however, don't make enough money selling the dye to Aveda to support themselves.  The project has become simple philanthropy for Aveda, not the sustainable business model it had hoped for.


Skin-Deep Gains for Amazon Tribe - WSJ.com

GE Remodels Businesses in India

Like many multinational companies, GE has struggled with India.  High levels of bureaucracy, corruption, and differing consumer needs and tastes made commercial success difficult in the wide array of industries GE competes in, from locomotives to jet engines to medical equipment.  Now, the company is starting to see results from a turnaround that started with a realignment of the business.  The company started by creating a separate P&L for all of India, something the company rarely does at the country level.  Then, it focused not just on marketing and sales, but also on research and development for low-cost products for India as well as other developing countries.  The company sells a baby warmer, for example, for $3000 to hospitals throughout India and other parts of the world, while incubators in the U.S. sell for four times that price.

GE Remodels Businesses in India - WSJ.com

Internet Start-Ups Cater to India's Affluent

Although India is home to many internet-based or IT companies, there's surprisingly little e-commerce happening within the country.  That's beginning to change, as more companies try to become India's next Amazon or Groupon, as this WSJ article explains.

Internet Start-Ups Cater to India's Affluent - WSJ.com

Finding Top Talent in China, India, Brazil

In rapidly growing countries such as Brazil, China and India, tapping expatriates is becoming obsolete. Instead, global businesses are looking for leaders who have the ability to move easily between different cultures and have deep local roots as well as international operational experience. This talent pool is very small, and they command salary premiums as a result.

Finding Top Talent in China, India, Brazil - WSJ.com

China's Crackdown Signals Shift

The artist who designed the Bird's Nest stadium for the 2008 Olympics (and then boycotted the opening ceremony), and more recently installed an incredible piece of art at the Tate Modern in London involving hundreds of thousands of hand-painted porcelain seeds, has been arrested by Chinese authorities and is missing.  The crackdown on dissidents signals a shift towards more repression as the government tries to maintain social stability in China.


China's Crackdown Signals Shift - WSJ.com

How to Get a Real Education at College

Here's a wonderful essay from Scott Adams, Dilbert's creator, on why entrepreneurship education is so important, and why business school generally is more valuable than say... art history.  If the link takes you to a firewalled site, type in the article title into news.google.com and follow the link from there.


How to Get a Real Education at College - WSJ.com

Yep, it's Spring in Dayton

Taken at 7 AM this morning, University of Dayton RecPlex.

Disney to Open Park in Shanghai

It will be "authentically Disney but uniquely Chinese." That is how company officials are describing Shanghai Disneyland, which broke ground today and is expected to open in 2015.  The $4.4 billion theme park is a huge gamble for Disney into the huge Chinese market.  With 330 million people within a 3 hour drive of the site, Disney hopes it can capture hearts and pocketbooks of generations of Chinese consumers.  Disney only owns 43% of the company owning Shanghai Disneyland, with the balance owned by a consortium of state-owned companies, but will own 70% of the company that manages the park.  After a bad start in Hong Kong (Chinese consumers take 40 minutes to eat meals, as opposed to 20 minutes for Americans, leading to crowded restaurants), the company hopes to apply its lessons in cultural sensitivity into building a brand and business in China.

Disney to Open Park in Shanghai - NYTimes.com

CHART OF THE DAY: Reminder, The Deficit You're Freaking Out About Is Bush's Fault

As we head for a possible government shutdown, I wondered why the budget deficit was so high and why the government is in so much debt. Then I found this explanation. Just saying.

CHART OF THE DAY: Reminder, The Deficit You're Freaking Out About Is Bush's Fault

Auto Industry's Castoffs Benefit From New Owners

Just as Ford is finishing up its sale of Jaguar and Land Rover to the Indian firm Tata, the brands are experiencing a renaissance in sales. JLR posted profit of $443 million in the most recent quarter, something it rarely achieved while under Ford ownership.  It is now exploring building cars in China, something Volvo, another former Ford brand, is also exploring.

Auto Industry's Castoffs Benefit From New Owners - WSJ.com

India Graduates Millions, but Too Few Are Fit to Hire

In spite of the fact that there are thousands of new college graduates in India, very few of them are landing employment. The reason is that they lack the skills companies are looking for. Many cannot communicate effectively in English, and and many lack basics such as reading comprehension. A lack of investment in educational systems, pervasive passing grades, corrupt teachers open to bribes, and a focus on rote memorization are taking their toll on the quality of India's college graduates.

India Graduates Millions, but Too Few Are Fit to Hire - WSJ.com

Groupon's Big China Gamble

 
On Monday, Groupon launched its operations in China, the world's largest Internet market.  In doing so, the company faces daunting challenges such as intense competition, price pressures on the Groupon business model, and a fractured market.  Groupon hopes to overcome some of these challenges by capitalizing on the business knowledge and relationship network of its local Chinese partner, one of China's largest internet companies.

Groupon's Big China Gamble - WSJ.com

Hong Kong’s Couples Invited to Wed at McDonald’s

In 2006, Hong Kong changed its marriage law to permit for weddings to be held outside places of worship or City Hall.  Since then, weddings have taken place on boats, in underwater theme parks, and shopping malls.  The latest company to cash in on this trend is... McDonald's.  A McWedding starts at $1280, which includes food and drink for 50 people, a "cake" made of stacked Apple Pies, gifts for the guests, and invitation cards with photos of the couple.  McDonald's employees dress in black suits, greet guests, and deliver Big Macs and fries with the proper pomp.  There is no alcohol -- toasts are accomplished with sundaes or shakes.

Hong Kong’s Couples Invited to Wed at McDonald’s - NYTimes.com

Foreign Investment Ebbs in India, and Questions Begin

Although India's economy is growing at a healthy 9 percent per year, and a growing middle class is consuming goods at historic levels, foreign direct investment (FDI) into India shrank by 31 percent in 2010, according to the United Nations.  The decline highlights the challenges foreign companies face when trying to operate in India, where extremely restrictive laws, inefficient bureaucracy, and corruption are starting to scare away investors.

Foreign Investment Ebbs in India, and Questions Begin - NYTimes.com

Russia's WTO Membership Faces Rocky Road

Russia remains the only major world economy that is not a member of the World Trade Organization (WTO).  In large part, this is because Russia's major export, oil, is already tariff free around the world, so Russia hasn't felt the pressure to join the WTO in order to obtain market access for its companies.  However, foreign investors are increasingly putting pressure on Moscow to enter the global group.  Entry is supposed to happen in 2011, but it won't be easy.  Russia still has steep tariffs, high levels of corruption, and customs controversies over goods valuations that will cause Russia many more transition problems than China, which entered the WTO in 2000.


Russia's WTO Membership Faces Rocky Road - WSJ.com

Dollar's Fall Rocks Far-Flung Families

The U.S. dollar is struggling.  Against all major world currencies, a dollar buys less currency today than it used to.  Within the U.S., this makes imports more expensive but also helps the export competitiveness of U.S. companies by making U.S.-produced goods cheaper overseas.  Outside the U.S., however, the dollar's fall is having dire consequences for many economies that rely on the exchange rate.  One such economy is the Philippines, where the exchange rate has strengthened the Philippine peso 15% against the dollar in the last year.  Over 10% of the Philippines GDP is made of remittances, where Overseas Filipino Workers (OFW) send money back to the Philippines.  These workers typically earn U.S. dollars, which means their remittances are now worth less in the Philippines.  This had led some in the Philippines to argue that the time has come to stop depending on these remittances and to start creating job opportunities at home.

Dollar's Fall Rocks Far-Flung Families - WSJ.com

Alabama Sock Town Suffers as Cotton Soars

Fort Payne, Alabama, calls itself the "sock capital of the world."  Ten years later, about one in eight pairs of socks came from Fort Payne.  Sock manufacturing is largely automated, so labor is not a huge component of the cost.  The closing of the sock's toe, however, is still done by hand so any cost advantage becomes important when multiplied over high volume.  A few years Ft. Payne fought to re-instate a sock tariff to protect itself from cheaper laborers in South America, but today, more mills are still closing in Ft. Payne.  The culprit this time is the high cost of cotton, up to $2.40 per pound, double last year's price.  Only 10 mills remain in Fort Payne, and while some are focusing on higher end (and profit) product like organic socks, the industry is once again in deep trouble.

Alabama Sock Town Suffers as Cotton Soars - WSJ.com

Huawei waits for White House review before selling unit

It was the deal that almost slipped under the radar screen -- in May, Chinese telecom equipment maker Huawei purchased U.S. startup 3Leaf Systems for $2 million, a tiny deal in the world of M&A.  3Leaf creates technology that allows groups of computers to work together like a more powerful machine.  When the Pentagon found out about the deal, however, it asked the company to file for a review with the Committee on Foreign Investment in the United States (CFIUS), an interagency committee that reviews FDI into the U.S. that may pose a national security risk.  Now, CFIUS has recommended Huawei unwind the deal and divest 3Leaf, something Huawei doesn't want to do.  The company has appealed to President Obama for a final decision.

BBC News - Huawei waits for White House review before selling unit