Don't Get Lost in Global Translation

Decades ahead, Japan was on the forefront of creating global brands like Toyota, Minolta, Sony, Pentax, Sharp, Panasonic, Canon and hundreds of other five star standard names, as names originating from the Japanese language would have never gained such global acceptance. Surprisingly, today, China is stuck with too many local language-based name brands that inhibit internationalization of their identities.

What are customers around the world saying about the new booming Middle Eastern brands? What are they reading in the brand names? Which ones are they loving and talking about? Which ones can they pronounce, type and remember easily? Are these new local brands leading the charge for global mindshare and creating a sense of greatness, or are they seriously lost in global translation?

Currently, 99 percent of mega-Middle Eastern projects are being branded under Arabic-based names -- which are mostly foreign to international audiences -- while some are projecting mixed messages due to translation. These stumbling blocks can seriously limit brand-name appreciation, prolonging the costly process of obtaining global mindshare.

To appreciate this dilemma, unless you are fluent in Japanese, try to make sense out of a fancy scripted Japanese name with some deeply rooted cultural message and a rich heritage.

For this reason, more than half a century ago, the global image-savvy corporate Japan developed all of its major brand names based on international rules of translations, taking into account unintended connotations and pronunciations. This was done with an eye toward global appeal, making the names easy to talk about, spell and remember. Contrary to popular belief, America really provided the most resistance to global branding . It was the Japanese who truly laid the systematic foundation on what makes globally accepted and universal name identities fit enough to capture global attention.

Decades ahead, Japan was on the forefront of creating global brands like Toyota, Minolta, Sony (NYSE: SNE) , Pentax, Sharp, Panasonic , Canon (NYSE: CAJ) and hundreds of other five star standard names, as names originating from the Japanese language would have never gained such global acceptance.

Surprisingly, today, China is stuck with too many local language-based name brands that seriously inhibit internationalization of their identities. That's very bad for a country now recognized as the world's largest factory. Done properly, China could have easily claimed hundreds of globally popular names. India currently sits in the middle. Being more open to non-local-language naming, it is now on its way to becoming the next global powerhouse of domestic brands,

In order to truly benefit with these global intricacies and having a vision to acquiring universal name identities, one must bite the bullet first, and be open to a frank and candid boardroom-level discussions in micro detail; a process demanding a commanding knowledge of global business naming procedures, corporate nomenclature and many other different skills unheard of in the traditional logo-centric, slogan-happy branding process.

After all, the prime objective of any brand name is to spread its wings and fly in expanding markets, something only possible when names are without extra luggage.


A for Arabic Naming

Currently, in the Middle East, the traditional long branding process ends in an Arabic name, often starting with the letter "A", a most intricate logo with colorful schemes, something extremely difficult to appreciate or decipher on the global markets. Any assembly of the top 50 names and their logos would clearly spell out the global challenges facing this process.

Does this now mean that we should abandon Arabic words or start discussing prospects for depending on the letters "B" or "C"? Not at all. It means we should be aware that the alphabet of each language has hidden characters, strengths, weaknesses and related trends; it's not a simple question of the cut-and-paste solution of inserting letters into famous or already existing name brands.

Naming from the English dictionary has also been a common problem in the West decades ago. At one time, there were hundreds of companies in the U.S. with names such as Dynamic, Quantum, Prism or Rainbow. At the time, they sounded powerful and fresh, but many eventually died out due to worldwide name confusions. Furthermore, global e-commerce and the use of digital branding for domain names clearly points to a serious need for highly specialized skills.

It is also very important to note that despite the seeming dominance of English, there are some 2,700 different languages with 8,000 dialects around the world. Altogether, there are 12 important language families with 50 lesser ones. Indo-European is the largest family in which English is the most important category.

Based on usage by population, the following is a list of major languages in descending order: Chinese, English, Hindustani, Russian, Spanish, Indonesian, Portuguese, French, Arabic, Bengali, Mali and Italian.

"Nay" is yes to Greeks. The American "yeah" means "no" to the Japanese. A simple laugh -- "ha, ha, ha" -- means "mother" in Japanese, while "Ohio" means "good morning." In Russia, "looks" means "opinion" and "socks" means "juice." In France, a simple sign of "sale" means "dirty." To the British, long distance is a "trunk" and elevator a "lift." The Chinese word "mai" said in a certain style means to "buy" and in another style to "sell." When enunciated together, "mai mai" means "business." The simplicity turns into complex marketing challenges. Global understandings of these issues are pre-requisite in achieving a globally acceptable name-identity.

Recommendations:

We all had better be wary of language issues. Customers are no longer simply local to your streets; they are scattered all over the globe, local to their own streets, yet still somehow connected together. The next branding challenge for the Middle East is to acquire a deeper understanding of universal image and identity management.

The best thing to do is conduct a highly professional third-party nomenclature audit. Many businesses, convinced that that they have the best and most well-known name identity may actually just be hearing it from their own people and customers in their own market.

The real challenge is to measure the unknown customer base at large, in new and untapped territories. Check connotations and language issues to find out where the name could be rejected or taken as too confusing and forgettable.

The ultimate goal is to acquire globally recognized name identities, and name personalities are only good when they are liked and understood by the global audience. So why stay lost in global translations?

Source: http://www.ecommercetimes.com/story/emarketing/60190.html

Toyota humiliates Ford and Holden in October sales

Toyota Australia's market dominance reached a new level last month when the company's new-car sales outsold Holden and Ford combined, reports JOSHUA DOWLING.

In a first for the Japanese car giant, Toyota has beaten the new monthly car sales of Holden and Ford combined as Australia's manufacturers struggle against a wave of imported vehicles.

As the price of crude oil approaches $100 a barrel, new cars are selling at a record pace and sales are tipped to eclipse the milestone of 1 million new cars sold in a year by the end of the year. In Federal Chamber of Automotive Industries sales figures for October released yesterday, market leader Toyota sold 20,212 vehicles, whereas Holden and Ford sold a total 19,621.

Significantly, Holden and Ford were among only seven of the 42 brands to not post a sales increase in October. New-car sales were up by 8.6 per cent so far this year, the figures showed.

It is the first time Toyota has held such a strong lead over Holden and Ford and the company is on track to post its fourth year in a row as Australia's most popular car brand.

But Toyota wasn't popping champagne corks yesterday, saying it would rather have stronger competition.

"The result is double-edged," said Toyota's executive director of sales and marketing, David Buttner. "While it's pleasing to have strong sales we're mindful of the strong industry."

Toyota's Yaris hatch outsold by more than two to one Holden's similarly sized Barina. And Toyota's Corolla outsold the Holden Astra and Ford Focus small cars also by more than two to one.

Mr Buttner said Toyota's record sales were due in part to having a newer model line-up (most of its range has been updated or replaced in the past three years) and that Ford and Holden would bounce back as they updated their models.

Holden's Commodore remained Australia's biggest selling car, but sales of the Ford Falcon were down by 22 per cent in the first 10 months of this year compared with the same period in 2006. An updated Falcon is due in March.

Contrary to perception, sales of four-wheel-drives have never been stronger. Sales of light cars are up by 9.2 per cent and small cars are up by 5.4 per cent, but sales of four-wheel-drives are up by 15 per cent.

Toyota Australia's chairman emeritus, John Conomos, said he expected the new car market would reach the 1.04 million sales mark this year based on present trends.

Source: http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleId=45307

Toyota Raises China Sales Goal

TOKYO — Toyota Motor Corp. said Wednesday that it has raised its 2007 sales projection for China on solid sales of small cars and aims to sell even more vehicles there next year.

Toyota, which appears to be on track to beat General Motors Corp. as the world's top automaker as soon as later this year, raised its sales estimate in China for this year to 480,000 cars from 430,000 due to the popularity of its Vios small car and the newly introduced Camry, Toyota spokesman Naoki Oku said.

The company sold 308,000 cars in China in 2006.

For 2008, Toyota aims to boost sales to 700,000 vehicles in the world's second biggest auto market after the U.S. That would be up 46 percent from this year's revised sales target.

The higher projection is partly because the company will begin production of the Yaris compact at a local plant, he said.

The company has said it aims to sell 1 million vehicles in China in early in the next decade. Oku said it is too early to say how soon Toyota can achieve the goal.

Executives at some Japanese car makers expect auto sales to grow to 10 million around 2010 in China, up 39 percent from the 7.2 million in 2006.

Source: http://www.chron.com/disp/story.mpl/ap/fn/5319668.html

Inflation in Russia in 2007 could exceed 11% - economic ministry

MOSCOW, November 15 (RIA Novosti) - Inflation in Russia in 2007 could exceed 11%, the director of the Economic Development and Trade Ministry's macroeconomic forecasting department said Thursday.

Andrei Klepach told journalists that originally, inflation in 2007 was expected to reach 8% attributing the rise to structural factors like price hikes in staple foods, as well as monetary factors.

Klepach said inflation in 2008 could exceed the 6-7% forecast. "We are currently specifying the inflation forecast for 2008. It looks like we won't be within 6-7%," he said.

The ministry official also said the Russian government could restrict grain exports in 2008 to curb inflation. "We may impose a direct ban or introduce an export duty," Klepach said adding that measures will depend on the market situation.

He said grain exports were 3 million metric tons in October and if this trend continues, the government will consider additional measures to restrict exports.

According to the economics ministry forecast, GDP growth in 2007 will reach 7.3-7.4%.
Source: http://en.rian.ru/business/20071115/88287581.html

The Branding Power of Business Networking

Kevin B. Levi interviewed Chris Pareja, founder of B2BpowerExchange.com, a leads group for “true B2B business developers”. Chris started the organization over three years ago as a means of cultivating substantial B2B (business-to-business) business opportunities for himself and others. Chris felt that normal business networking groups weren’t generating opportunities for him of the caliber he was seeking. To him, these organizations were primarily focused on exchanging retail-focused leads and not business-to-business opportunities which is where his focus was.

What follows is his interview with Chris…

Kevin: What does branding mean to you Chris?

Chris: It is the essence of how your business is perceived, not only inside your company but also by external audiences. I think too many people deliberately develop a brand independent of who they are and it winds up not being congruent. Brands are based in large part on one’s own personality and culture, and a brand should be an extension of you. It cannot be contrived. Your brand is how you are perceived, the words you say, the things you do, what you communicate on your website. It is what people say about your company when you aren’t around.

Kevin: Can you please talk about extending your brand through external parties?

Chris: There are two challenges to businesses extending their brand through external surrogates: first is how they articulate their value proposition to a customer – and, if they can get through to the second step – number 2 is helping others effectively articulate their brand for them. Some businesses struggle with succinct positioning. Those that can effectively articulate their value can equip partners, contacts, etc. with the ammo they need to sell their brand when they aren’t around.

Kevin: Do you have any advice for developing effective messaging?

Chris: A good rule of thumb I use to keep messages simple and easy to relay is to keep it “grandma playing bingo” simple. If your grandma can tell her friends at bingo what you do, and they “get it”, then it’s a successful value articulation.

Kevin: What made you decide to create your own networking organization?

Chris: Recognizing the power of third party branding and promotion, I started my own business networking organization to help businesses do just that. I wanted to help my business, prospects, marketing clients, and others extend their brands through other like-minded business professionals. In doing so, we all benefit from leveraging third-party branding support without doing all of the work ourselves.

Kevin: Tell us about your networking organization

Chris: B2BpowerExchange helps entrepreneurs, consultants, salespeople and others extend their brand to the right audiences through relationships with others who are targeting the same types of clients – senior level executives at B2B companies.

Kevin: What kinds of professionals belong to your organization?

Chris: Business professionals across the board, from marketing to sales to HR to service providers to CPAs and lawyers. We also have application developers, business process consultants, commercial real estate professionals, industrial solar power providers and much more.

Kevin: You said all of these businesses are targeting the same types of clients. Tell us about these potential clients.

Chris: Every member of B2BpowerExchange is selling to director-level executives and above in companies. This includes CIOs, CEOs, COOs, CFOs, VPs of sales/marketing, IT, HR, etc.

Kevin: Can you talk about the size and breadth of your organization?

Chris: Today we officially have 28 breakfast meetings a month covering 3 states – this is across several regional chapters. We expect to add two more states in the next 60 days and our goal is to increase our monthly meetings to 40-60 by the end of the year. We hold our meetings online as well as in-person based on region, metro area or according to specific interest areas. We are primarily U.S. based today but we do have individuals participating from Mexico, Toronto, Philippines, Ukraine and other countries. It helps our members reach into areas where they are not physically located and develop bonds with others around world that can bring them into deals they would otherwise not have exposure to.

Kevin: Can you give us an example or two of the power of your the organization

Chris: We had a consultant in the commercial energy space connect with someone in the commercial property space within his first month of membership. This business connection yielded him an $800K business opportunity that closed less than two weeks later. We recently had a marketing consultant, for example, bringing in an advertising sales rep for a half-million dollar deal. We have application development firms (technology) closing deals upwards of $250,000 based on connections they make through our organization. Our group provides our members with warm introductions to business prospects they otherwise might not be able to access or ever even know about. This dramatically shortens the sales process. In essence we’re providing business introductions to professionals through trusted relationships.

We also have many of our members partnering up to expand their own business capabilities with those of other companies. This in turn strengthens both brands. This teaming enables our professionals to deliver value to clients they couldn’t provide before on their own.

Kevin: You own your own business, aside from the B2BpowerExchange, correct?

Chris: Yes I do. My company is called LeadGenaires. We’re a marketing consultancy that breaks down barriers between sales, marketing and the management team resulting in measurable marketing programs.

Kevin: How has B2B extended your brand?

Chris: When I first started LeadGenaires and was in business for only one year, I was dong okay but not flourishing. After my first year starting B2B, I already was landing clients in multiple parts of the country. Today, I truly have more work than I can handle. Through B2B connections, I am also able to secure frequent speaking engagements, book writing opportunities and further extend my visibility - regionally, nationally and internationally.

Kevin: How many people leverage B2BpowerExchange today?

Chris: We have about 900 individuals participating around the world at various levels with 145 official members.

Kevin: How can people learn more about B2BpowerExchange and sign up themselves?

Chris: They can visit www.b2bpowerexchange.com, call 925-201-3410 or email me directly at chris@b2bpowerexchange.com. I’ll help get them connected right away. I really enjoy seeing people connect, collaborate, and mutually succeed.

Source: http://www.smallbusinessbranding.com/789/business-networking-brand-extentions/

The Powerful of Business Paternering

Regardless of the size of your business or the industry you operate in, aligning your business with complimentary organizations that can help you expand your reach and even your set of offerings can be a highly effective way to succeed, especially if you are a small business with limited resources.

Business partners can serve a multitude of purposes in the course of a mutually beneficial relationship. Here are several examples:

1. Help you expand and round out your set of offerings – if you’re a law firm and want to also offer a lower-end “product”, you can align yourself with a pre-paid legal services firm, for example

2. Expand your reach and penetration into new customer segments and markets – if you have a small firm operating in the U.S. and can find a viable, complementary partner in the U.K., for example, you can tap international market segments without having to physically expand into the region.

3. Make your operation appear larger than it actually is – if you have a sales force of just three people and decide to partner with an organization that offers a corresponding product, you can leverage their sales force as well as yours to sell both business’s products and services.

4. Grant you access to higher-level individuals within the companies you are targeting – If you can’t reach vice president level executives in your target organizations, a partner that already has existing relationships with these individuals can possibly afford you the opportunity to get some face time with these high-level professionals.

5. Increase your organization’s marketing power – if your business has limited promotional resources but can align itself with a partner that doesn’t, you can leverage their breadth to also gain heightened visibility

In life we sometimes find it better to borrow someone else’s stuff rather than buying our own. This same principle applies in business with regard to successful partnerships. You could expend tremendous resources to acquire the additional resources you need to grow your business or like the aforementioned stuff, you can find someone else who has what you need and “borrow” it. Unlike a drill or a lawn mower, however, the business scenario typically requires a mutually beneficial value proposition. No company will let you borrow its resources if you aren’t bringing something to the table that they can benefit from as well.

In the end, effective partnerships or alliances with like businesses can help you scale your business quicker and more easily than going it alone. Give them a try. I have, and it’s working wonderfully!
Source: http://www.smallbusinessbranding.com/837/the-power-of-business-partnering/#more-837

Women in poorer nations twice as likely to become entrepreneurs

Women in the world's poorer nations have a higher rate of entrepreneurial activity than those in wealthier nations, according to a new global study.

In a survey of more than 150,000 entrepreneurs in 40 regions around the world, women in low- and middle-income nations were found to be more than twice as likely to be involved in early-stage business start-ups as those in high-income nations, researchers at Babson College and the London Business School said.

In Russia, women were involved in 39.9 percent of all early-stage entrepreneurial activity, while in the Philippines they were involved in 22.5 percent, the study found. That compares to just 2.3 percent in Sweden and 1 percent in Belgium.

Overall, about a third of the world's entrepreneurial activity is driven by women, the study found.

"Early-stage entrepreneurship in women continues to grow globally," Elaine Allen, the study's principal researcher, said in a statement. "While overall women still lag behind men in starting a business, for the first time, we see parity or a higher rate in women in some low- to middle-income countries."

The study also found that women in poorer nations were more likely to be working a second job to support their own venture, suggesting that the social and economic benefits of being active in the workforce are a stronger driver of early-stage entrepreneurship than education or household income combined, researchers said.

Where women entrepreneurs in wealthier nations benefited from education and income, those in poorer nations fell back on work experience as a foundation for starting their own businesses. In the absence of capital and business training, workforce experience offered women in poorer nations access to social capital, networking opportunities, innovative ideas for launching new ventures, and other resources, researchers said.

Yet, while the gender gap between entrepreneurs narrowed in poorer nations, researchers found the chances of early-stage entrepreneurial activity by women developing into an established business was greater in high-income nations.

The difference in success rates may be related to education, researchers said.

As much as 36.5 percent of women entrepreneurs in poorer nations had less than a secondary school education, compared to 28.2 percent in wealthier nations, according to the study.


Source: http://www.reuters.com/article/smallBusinessGrowthNews/idUSN1319438320070313?pageNumber=1

Is "American Idol" good for business?

It may seem like everyone you work with spends time standing around the water cooler, talking about the latest contestant to get kicked off "American Idol." And now there's evidence to prove it.

According to a new Spherion Workplace Snapshot survey conducted by Harris Interactive, 37 percent of U.S. workers say "American Idol" is the most talked-about TV program in the workplace, up by 2 percent from last year's results.

Turns out, television talk is an integral part of the office environment. In an online survey of 2,792 employed adults, nearly one-quarter (21 percent) said they have discussed "American Idol" on company time, and 10 percent of respondents admitted getting into debates over the contestants. The survey found that women are more likely than men to discuss TV shows on company time, with 27 percent of women who said they do, compared to 15 percent of men.

Despite taking away from company time, many respondents agreed that discussing TV shows with co-workers can have positive effects. Nearly half -- 44 percent -- of U.S. workers said TV chatter at work increases office camaraderie. Employees ages 18-24 and 30-39 were the groups most likely to find camaraderie discussing TV shows, at 54 percent for each.

While both men and women ranked "American Idol" as the most talked-about show, the results varied for the second-place slot. The medical soap opera, "Grey's Anatomy" ranked second among 28 percent of female respondents, and the real-time action show, "24" was the next pick for 15 percent of male respondents.

Other popular shows discussed by both genders in the workplace included "CSI" (10 percent); "House" (8 percent); and "Lost" (8 percent). "The Office," a comedy starring Steve Carell that emphasizes the absurdity of the office culture, was only talked about by 6 percent of respondents.

Source: http://www.reuters.com/article/smallBusinessGrowthNews/idUSN2040868020070424

ANALYSIS: PSA wants low cost Purchasing

SupplierBusiness reports that PSA's Manager for Global Sourcing Project, Denis Monguillet told an audience at this week's Paris Equip Auto that PSA is aiming to increase its low cost country content in its total purchasing spend from 23% in 2007 to 47% in 2010.

This share has already grown rapidly over the last two years from 15% in 2005 to 19% in 2006. One of the reasons for the fast growth is a rise in production outside the company's traditional European markets. This is expected to continue.

PSA's light vehicle sales in traditional European markets are expected to see 10% growth between 2006 and 2010 from 2.965 million to 3.27 million units. But other markets are expected to see growth of 100% in the same period, although from a much lower base (401,000 to over 800,000).

PSA's growth in these new markets is going to be underpinned by an acceleration in new model launches which are expected to double to twelve each in the Mercosur and China.

One of new markets for PSA is Russia. The company is aiming to assemble 100,000 units by 2010, with the possibility of extending to 300,000 in the medium term. The project "project Russia" will concentrate on framing, painting and vehicle assembly only. PSA plans to invest 300 million euro's in the project, for a new car based on the M1 like car segment platform (308/C4 model). The company is looking to purchase €1 billion a year locally for a 45% local sourcing content. They have plans to choose a factory location by the end of the year and start assembly is due to start in September 2010.

PSA is still reviewing whether to invest in India and Mexico. "A strategic assessment" is currently underway says Monguillet.

PSA not planning global low cost car (yet)
PSA's total spend in traditional European markets is expected to grow from €22.3 billion in 2007 to €25.8 billion in 2010 - but in Russia, the Maghreb and China PSA's spend is expected to grow from €1.6 billion to €3.3 billion.

PSA has rapidly grown its international purchasing activities over the last three years, starting with an office in Shanghai in 2004, for China, Taiwan and South Korea; a new purchasing office in Trnava in the Czech Republic for Poland, Hungary, the Czech Republic and Slovakia and another office in Turkey in 2005, and more purchasing offices in Pune, India and Tehran, Iran in 2006.

PSA opened a purchasing office in South Africa in 2007.

As part of the process PSA is also looking to widen its supply base to include more low cost country suppliers and to move them up the experience curve from producing just copies of existing mass produced parts to taking on RFQs for series production of new and more complex components.

However, Monguillet expects new low cost suppliers joining PSA's supplier panels to contribute only a small part of the new low cost country purchasing - he is looking for between 600 million and 1 billion euro's more of parts from that source. Most of the growth in low cost country sourcing will come through ships in the manufacturing foot print of existing first tiers and resourcing by them at the second tier level - as well as some growth of existing local PSA suppliers in low cost countries into the global supply network. Monguillet expects the biggest growth in local country sourcing from new suppliers to come from central and Eastern Europe followed by the Maghreb (North Africa), and Mercosur.

Monguillet says there are limits to the extent to which localised parts operations in China or South America can be appropriate for export to more mature markets. Firstly there may be technical specification differences. Many parts are modified to reflect the available materials in low cost country markets, and need to be tested before they can be shipped internationally. Secondly, many of the parts were chosen to be made locally because of the high cost of shipment, which adds a huge logistic burden to their ex works costs.

Overall Monguillet also expects a more than doubling of the share of components supplied to PSA's western European plants to come from low cost countries - primarily Eastern Europe - between 2007 and 2010.
LCC country sourcing For Europe is expected rise from current 15% to 32% "we may not be the most aggressive, but we are not the last ones either" he says.

However, Monguillet says that PSA is not aiming to introduce a global low cost car. He says that PSA believes there is room for both premium and low cost versions of its existing and planned cars in most segments.

Source: http://www.just-auto.com/article.aspx?id=92825

SPAIN: Small cars seen as key to India’s explosive market growth

The Indian car market and industry will continue to grow strongly as small cars are snapped up by rising numbers of urban middle class consumers according to Vinay Kothari, board member at Force Motors, a maker of utility vehicles in India.

Speaking at the IESE Business School's Automotive Sector conference in Barcelona, Kothari said that projections for rapid market growth in India reflected demographic and income trends. In addition, the market is also facing a lift from the arrival of a number of small low-cost cars - such as Tata's one-lakh car - that will enable owners of two-wheelers to more easily upgrade to four wheels.

Renault is also planning a sub-Logan 'one-lakh fighter' that would be made in India with Bajaj Auto.

The Indian light vehicle market could be approaching 5m units a year by 2013 from under 2m now, Kothari said.

"And small cars are growing very strongly. By 2015 the market for small cars in India could be as much as 3m units a year," he added.

But isn't congestion in India's big cities already at a level suggesting road capacity is at saturation point? If there is barely room for the two-wheelers to park, where will all the four-wheelers go?

Kothari told just-auto that the primary market in India for the new breed of small of cars is not in the big cities but in the smaller cities and rural areas where incomes are growing and space is not such a problem.

"You won't see very many Tata one lakh cars in Mumbai or New Delhi," he said.

By Dave Leggett
Source: http://www.just-auto.com/article.aspx?id=93155

FRANCE: Renault redesigns Kangoo passenger van

Renault has released full details of the redesigned Kangoo passenger van line it displayed - with little fanfare - on its new Laguna (and concept coupe)-dominated Frankfurt motor show stand back in September.

Originally launched in 1997 this 'leisure utility vehicle' has been a considerable success for the French automaker, selling over 2,300,000 units to date.

Essentially, the Kangoo is a van with seats and a type of cheap 'n' cheerful, practical, flexible and durable vehicle the French have specialised in for years - they were originally particularly popular with rural buyers in France.

The outgoing 1997-2007 Kangoo has been a hit here in the UK with families whose new-car budget doesn't quite stretch to a new MPV (minivan) such as GM's mid-size Opel/Vauxhall Zafira and Ford's C-Max or the larger Chrysler Voyager/Volkswagen Sharan-sized models.

The Kangoo has rivals, including models from Fiat and Peugeot while, in continental Europe, GM offers 'Kombi' passenger versions of its Astra van line.

The redesigned 2008 Kangoo is, like its predecessor, built in France in Renault's modernised MCA Maubeuge factory which, the automaker claims, is one of the most productive light commercial_vehicle factories in Europe.

Fully restyled inside and out, the new model is 180mm longer than its predecessor at 4,210mm and all the extra length is in the cabin, which seats five plus baggage. Shoulder and leg room have also been increased.

Three trim levels, Authentique, Expression and Privilège, are offered, paired with different equipment levels and powertrains.

Interior materials quality has been upgraded and Renault claims the van-based model now "boasts standards of thermal and acoustic comfort worthy of an MPV".

Some versions feature car-like automatic climate control as standard and there is a full range of equipment options like CD players, power windows and central locking.

Other standard or optional equipment includes cruise control/speed limiter, automatic headlamps and wipers, all newly available on the second-generation model. Depending on model, the new Kangoo also has between two and six airbags, seat belts with pretensioners and load limiters, and anti-submarining humps in the front and back seats, as well as three seats with Isofix anchorage points on some versions.

Safety equipment is identical to that of a contemporary European-market family hatchback - all versions are equipped with ABS and emergency brake assist and engine torque overrun regulation functions. Some versions also have ESP with understeer control and ASR traction control.

New items include a portable navigation system holder which fits on the driver's side for easy visibility. An audio connection box in the glovebox and enables occupants to listen to their own audio collection thanks to ports for a USB key, mobile MP3 player or iPod. Functions are controlled via the steering wheel-mounted fingertip remote control and a hands-free Bluetooth telephone function is also now available.

A twin-section pop-up glass sunroof over the front seats, paired with a fixed glass roof above the rear seats, is also on the options list.

The 60:40 split-fold rear bench folds in one action to form a flat load area and, on some versions, the front passenger seat can also fold down flat, boosting payload from a seats-up 660 litres to 2.8 m3. The vehicle can also carry objects up to 2.5m long.

Seventy-seven litres of interior stowage space include aircraft-style stowage compartments for the rear passengers and the new model now has longitudinal roof bars that convert without tools into a luggage rack that can take loads of up to 80kg.

Two petrol engines - and eight-valve 66kW 1.6 and a 16-valve 78kW unit and three 1.5-litre diesels with 50, 63 and 78kw power outputs are available; the 78kw motor can also be ordered in 76kW tune with a diesel particulate filter (DPF).

The lower-powered pair qualify for Renault's new 'eco2' designation, with CO2 emissions lower than 140g/km.

Source: http://www.just-auto.com/article.aspx?id=93166

FRANCE: Renault redesigns Kangoo passenger van

Renault has released full details of the redesigned Kangoo passenger van line it displayed - with little fanfare - on its new Laguna (and concept coupe)-dominated Frankfurt motor show stand back in September.

Originally launched in 1997 this 'leisure utility vehicle' has been a considerable success for the French automaker, selling over 2,300,000 units to date.

Essentially, the Kangoo is a van with seats and a type of cheap 'n' cheerful, practical, flexible and durable vehicle the French have specialised in for years - they were originally particularly popular with rural buyers in France.

The outgoing 1997-2007 Kangoo has been a hit here in the UK with families whose new-car budget doesn't quite stretch to a new MPV (minivan) such as GM's mid-size Opel/Vauxhall Zafira and Ford's C-Max or the larger Chrysler Voyager/Volkswagen Sharan-sized models.

The Kangoo has rivals, including models from Fiat and Peugeot while, in continental Europe, GM offers 'Kombi' passenger versions of its Astra van line.

The redesigned 2008 Kangoo is, like its predecessor, built in France in Renault's modernised MCA Maubeuge factory which, the automaker claims, is one of the most productive light commercial_vehicle factories in Europe.

Fully restyled inside and out, the new model is 180mm longer than its predecessor at 4,210mm and all the extra length is in the cabin, which seats five plus baggage. Shoulder and leg room have also been increased.

Three trim levels, Authentique, Expression and Privilège, are offered, paired with different equipment levels and powertrains.

Interior materials quality has been upgraded and Renault claims the van-based model now "boasts standards of thermal and acoustic comfort worthy of an MPV".

Some versions feature car-like automatic climate control as standard and there is a full range of equipment options like CD players, power windows and central locking.

Other standard or optional equipment includes cruise control/speed limiter, automatic headlamps and wipers, all newly available on the second-generation model. Depending on model, the new Kangoo also has between two and six airbags, seat belts with pretensioners and load limiters, and anti-submarining humps in the front and back seats, as well as three seats with Isofix anchorage points on some versions.

Safety equipment is identical to that of a contemporary European-market family hatchback - all versions are equipped with ABS and emergency brake assist and engine torque overrun regulation functions. Some versions also have ESP with understeer control and ASR traction control.

New items include a portable navigation system holder which fits on the driver's side for easy visibility. An audio connection box in the glovebox and enables occupants to listen to their own audio collection thanks to ports for a USB key, mobile MP3 player or iPod. Functions are controlled via the steering wheel-mounted fingertip remote control and a hands-free Bluetooth telephone function is also now available.

A twin-section pop-up glass sunroof over the front seats, paired with a fixed glass roof above the rear seats, is also on the options list.

The 60:40 split-fold rear bench folds in one action to form a flat load area and, on some versions, the front passenger seat can also fold down flat, boosting payload from a seats-up 660 litres to 2.8 m3. The vehicle can also carry objects up to 2.5m long.

Seventy-seven litres of interior stowage space include aircraft-style stowage compartments for the rear passengers and the new model now has longitudinal roof bars that convert without tools into a luggage rack that can take loads of up to 80kg.

Two petrol engines - and eight-valve 66kW 1.6 and a 16-valve 78kW unit and three 1.5-litre diesels with 50, 63 and 78kw power outputs are available; the 78kw motor can also be ordered in 76kW tune with a diesel particulate filter (DPF).

The lower-powered pair qualify for Renault's new 'eco2' designation, with CO2 emissions lower than 140g/km.
Source: http://www.just-auto.com/article.aspx?id=93166

Greenstar Announces Corporate Strategy

Greenstar Environmental Ltd (Greenstar) is set to become a major player in the industrial, commercial and domestic recycling industry as following its re-branding, it takes the first steps in a highly ambitious growth strategy.

Formerly Material Recovery Ltd, the adoption of the Greenstar brand brings the UK-based company into line with the ideals and identity of its popular Irish counterpart – with both companies being majority owned subsidiaries of Ireland-based NTR plc. But the re-branding is just the first step in a major growth plan that is already taking shape thanks to the recent purchase of Wastelink Services Ltd and RU Recycling Ltd.

The UK currently resides in the bottom three in the European recycling table.
As a recycling-led waste management company with an increasing infrastructure, Greenstar is in a strong position to help the UK address its tough recycling targets.

According to managing director, Ian Wakelin: "Over the last few years the management of waste and the development of recycling initiatives has become a big issue in the UK. Due to the increased value placed on corporate social responsibility, legislation and the continually increasing landfill tax, large companies and local authorities have had to evolve their waste management strategies – with many of them turning to Greenstar for our expertise and support. The Greenstar name is extremely well known in Ireland and by changing our name we are taking the first steps in creating a global brand, committed to delivering recycling-led waste management solutions." The first step in this growth strategy has involved the purchase of two companies well known for their recycling expertise, services and facilities.

The purchase of Wastelink has, overnight, turned Greenstar into one of the largest recycling-led waste management companies in the UK. As well as giving Greenstar more geographic options it also brings with it a host of capabilities within the industrial and commercial markets. Wakelin explains: "Industrial and commercial markets are really looking for a long term partner when it comes to waste management as well as one that can develop recycling-led strategies to help reduce costs. New legislation continues to evolve and make the pro-active management of waste a key issue as an example, with the WEEE directive just around the corner, companies are going to see even tougher regimes being introduced. With the purchase of Wastelink we have enhanced our existing capabilities and we can now offer and even broader single point of contact for all industrial and commercial waste customers."
The second acquisition, R U Recycling Ltd, further expands Greenstar’s ability to recycle post consumer domestic recyclables. R U Recycling currently operates a 50,000 tonne per year comingled Materials Recycling Facility (MRF) in Lancashire, working with 19 local authorities from around the UK. Following the acquisition Greenstar plans to open one of the UK’s largest domestic recycling facilities, close to the centre of Birmingham. With Greenstar’s existing Lincolnshire site the company will have access to three major recycling centres across the UK with the creation of more forming part of future plans.

Wakelin concludes: "The re-branding and acquisitions are just the first steps on an ambitious growth plan. Having the right services, the right people and the right facilities in place and utilising the best technologies available in the industry will put us well on the road towards creating a substantial recycling lead waste management business that will help the UK address what are set to become even more stringent recycling targets."

Source: http://www.greenstar.co.uk/news-greenstar_strategy.aspx

Strategies to Fight Low-Cost Rivals

Companies have only three options: attack, coexist uneasily, or become low-cost players themselves. None of them is easy, but the right framework can help you learn which strategy is most likely to work.

Companies find it challenging and yet strangely reassuring to take on opponents whose strategies, strengths, and weaknesses resemble their own. Their obsession with familiar rivals, however, has blinded them to threats from disruptive, low-cost competitors.

Successful price warriors, such as the German retailer Aldi, are changing the nature of competition by employing several tactics: focusing on just one or a few consumer segments, delivering the basic product or providing one benefit better than rivals do, and backing low prices with superefficient operations. Ignoring cut-price rivals is a mistake because they eventually force companies to vacate entire market segments. Price wars are not the answer, either: Slashing prices usually lowers profits for incumbents without driving the low-cost entrants out of business.

Companies take various approaches to competing against cut-price players. Some differentiate their products—a strategy that works only in certain circumstances. Others launch low-cost businesses of their own, as many airlines did in the 1990s—a so-called dual strategy that succeeds only if companies can generate synergies between the existing businesses and the new ventures, as the financial service providers HSBC and ING did. Without synergies, corporations are better off trying to transform themselves into low-cost players, a difficult feat that Ryanair accomplished in the 1990s, or into solution providers.

There will always be room for both low-cost and value-added players. How much room each will have depends not only on the industry and customers’ preferences, but also on the strategies traditional businesses deploy.

source: http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp;jsessionid=JUV5UWMDXNDZSAKRGWCB5VQBKE0YOISW?ml_action=get-executive-summary&articleID=R0612F

PGA Tour events highlight charitable efforts

The PGA Tour Inc. and The Players Championship are taking a new approach to its annual charitable efforts.

The Tour traditionally announced its charitable donations at a Downtown luncheon, but has scrapped that in favor of a series of events next week featuring Tour pros and other local professional athletes. The Players Championship donated $2.7 million to charities last year and will top that figure this year, though the official figure has not been released.

Dubbed Giving Back Week, the events start Nov. 5 with Tour pro Mark McCumber, former Jaguar Pete Mitchell and the Nease High School golf team caddying for children playing miniature golf who are being treated at Nemours Children's Clinic. The event highlights the Tom Coughlin Jay Fund.

On Nov. 6, 2005 Players winner Fred Funk will lead a 5th-grade class at Pine Forest Elementary as part of Junior Achievement, while members of his local fan club will lead other classes.

The next day Tour pro Jim Furyk, former Jaguar Tony Boselli, former pro tennis player MaliVai Washington and their wives will participate in an event at Emmett Reed Park that will include a ribbon-cutting for a new driving range.

On Nov. 8, golfing Hall of Famer Judy Rankin and Tour pro Len Mattiace will introduce a class which promotes the healing process for breast cancer survivors through the game of golf.

And on Nov. 10, former Tour pro Calvin Peete and representatives from UBS will hold a financial education class and golf tournament for members of The First Tee of Jacksonville and their parents.
(Source :http://jacksonville.bizjournals.com/jacksonville/stories/2007/10/29/daily14.html?surround=lfn)

Reasons why mergers and acquisitions can fail

Buying an organization can be likened to buying a secondhand car. The seller is going to highlight the positives while concealing or downplaying vulnerable problems.
First List 2000 reports approximately 50 percent to 70 percent of merger/acquisition (M&A) deals fail. Yet, despite the high failure rate, HR magazine reported that in 1998 there were approximately 11,655 domestic M/A deals compared to 5,654 transactions in 1990. The good news is that the business world is finally beginning to recognize the dynamics that lead to failure:
Technology Integration.

PricewaterhouseCoopers' recently surveyed senior executives from 125 companies worldwide to determine the biggest hurdles of M&A deals and found that integrating information systems is the toughest post-deal challenge. Nearly three out of four companies reported problems integrating information systems after a merger.
Culture Shock.

Mergers are like marriages. The right partner must be selected after an honest and meaningful courtship. There must be communication, flexibility and mutual respect.

Organizational culture is a blend of an organization's values, traditions, beliefs and priorities. Also, it helps determine and legitimize what sort of behavior is rewarded in an organization.
The very minute that merger rumblings are heard in an organization, the work climate begins to change. Employees become emotionally confused and anxious, similar to how one might feel when a mate makes an abrupt announcement demanding a divorce. The initial feeling is one of betrayal.

Employees begin to divert time and energy to wonder how their career, power and prestige will be impacted. Gossip within the organization competes with production and then the competition can gain a foothold.

Combining merged cultures requires a focus on one new vision and one new mission, developed by a cross-section team of representatives from both organizations. Problems typically occur when the larger or stronger of the two organizations try to significantly influence the integration.

Jim Shaffer, of Towers Perrin Management Consulting, has a high success rate in linking M&A deals, and offers recommendations to avoid M&A culture problems:

1. Create frequent communications that include all stakeholders-employees, suppliers, customers, government leaders and the community.

2. Managers must always tell the truth, with their actions matching their words. Even the appearance of a single falsehood will break confidence, erode trust and hinder short-term and possibly long-term productivity.

3. Listen. During the M&A process, senior management must facilitate the birth of a new or modified culture by inspiring a new vision. This can be an impossible task without listening to the concerns of people at all levels through the process.

4. Identify the talent in both organizations that would leave the greatest gap if they were to leave. Bailing out is contagious. Focus a disparate amount of energy to retain talent support and commitment.

5. Building revenue and market position are the primary motivators behind mergers and acquisitions, but acquiring management and technical talent has also emerged as one of the top deal drivers cited by almost half of executives in the recent PricewaterhouseCoopers survey of M&A activity.

Freda Turner, Ph.D., researches best workplace productivity and business practices and is affiliated with the Doctoral and Graduate Studies Programs, University of Phoenix.She is available for presentations and may be reached at er@email.uophx.edu.

(Source: http://jacksonville.bizjournals.com/jacksonville/stories/2000/08/28/)

HP and Compaq Merger Failure Analysis

The failure of the merger between two leading competitors in the global computer industry, Hewlett-Packard Company (HP) and Compaq Computer Corporation (Compaq) failed as the synergies identified prior to the merger did not materialize.

HP bought Compaq for US$ 24 billion in stock. This was the largest ever deal in the history of the computer industry. The deal meant combined operations in more than 160 countries and more than 145,000 employees. HP-Compaq would offer the most complete set of products and services in the computer industry.

The motivation behind a HP-Compaq merger (whether it made economic sense) and the problems encountered in merging operations is an interesting discussion as the stock prices of both HP and Compaq fell within two days of the merger announcement. An estimated 13 billion dollars was lost (in terms of market capitalization) in this time frame.

Shares fell further as industry analysts failed to understand the benefits HP would derive by acquiring Compaq. HP was a market leader in the high margin printer’s business and Compaq, a low-margin personal computer (PC) manufacturer. Moreover, established players like direct marketer, Dell and leading IT service consulting company like IBM would give fierce competition even if economies of scale were to be achieved.

With the stock price of HP’s shares stabilising at a level much below than before the merger and the PC & other hardware businesses not making much profits, the merger was ruled a failure. Industry experts felt that HP’s printer business should be spun off into a separate entity.

Merger Challenges:

Product line integration: This requires discontinuing some products (some loss in revenue) thereby rationalizing the product line.

Reorganization: In the computer industry this has always been a failure.

Cultural change challenges: HP’s culture is largely based on engineering and compromise, while Compaq had a hard-charging sales culture.

Kodak rolls up earnings of $34M

(November 2, 2007) — Since the start of 2004, Eastman Kodak Co. has focused on reinventing itself as a digitally based firm, launching new products and demolishing swaths of its huge Kodak Park industrial park.

That work is showing some dividends, as digital sales and lower manufacturing costs helped push the area's second-largest employer into the black for the third quarter of 2007. Kodak also slightly scaled back the estimated price tag — and estimated size of layoffs — in its restructuring plans.

It marked only the third profitable quarter for Kodak since 2004. The Fortune 500 photo and imaging company released its third-quarter financial results on Thursday.

Kodak netted $34 million in income on sales of $2.581 billion. For the comparable quarter a year ago, Kodak lost $83 million.

Overall sales for the quarter were down minutely from $2.595 billion the company saw in last year's third quarter. But sales in digital products were up 12 percent to $1.589 billion. Earnings on the digital side of the business were $82 million, up from $28 million the same quarter last year.

"We had good market success with our new digital products," Kodak CEO Antonio Perez said in a conference call with Wall Street analysts. "Everything is in motion to achieve our key objectives."

Analysts polled by Thomson Financial had expected earnings of 27 cents per share. Kodak well exceeded that with an operating profit of 45 cents a share.

Kodak stock finished the day at $27.76 a share, down 90 cents, on a day when all the major market indexes dropped notably.

With its financial filings, Kodak also announced it expects its four-year restructuring ultimately will cost $3.4 billion to $3.6 billion as it sheds 27,000 to 28,000 jobs worldwide. The company previously had estimated restructuring would mean 28,000 to 30,000 job cuts and spending $3.6 billion to $3.8 billion on severance packages and demolitions.

During the third quarter, the company cut about 775 jobs in the United States and Canada and 650 elsewhere.

"It looks like after a difficult four years Kodak's digital plan is coming through," said Bill Shaheen, CEO of Rochester investment firm Whitney & Co. "The implementation of it is showing higher sales, stable margins and lower need for cost cuts to deal with the restructuring. If they can continue this over the next few quarters the turnaround could be well on its way."

Overall, $1 invested a year ago in Kodak would have netted $1.17, vs. a $1.10 return on a $1 invested with the S&P 500, according to Economic Investor analysis service.

Almost all of Kodak's film production is in Rochester. And that side of the business had mixed results for the quarter. Its Film Products Group saw sales of $488 million, down $105 million from the same quarter a year ago. Sales of consumer film, disposable cameras and related products were down 32 percent. But Kodak said the Film Products Group's earnings went up $7 million, to $122 million, for the quarter largely because of decreased manufacturing costs.

The ongoing demolitions at Kodak Park also added to the bottom line. According to the company, its gross profit margin was 26.4 percent, up 1.3 percentage points from a year ago, largely the result of lower costs from what the company calls its "manufacturing footprint reductions."

The company's 2006 figures do not reflect income or sales from its health group, which it sold earlier this year.

(Source: http://www.rochesterdandc.com/apps/pbcs.dll/article?AID=/20071102/BUSINESS/711020354)

How Dell, and Amazon.com Succeed in their supply chain?

Consider a PC manufacturer. Typically a PC manufacturer builds to stock and thus makes all production and distribution decisions based on forecast. This is a typical push system. In a push/pull strategy, the manufacturer will build to order. This implies that component inventory is managed based on forecast, but the final assembly is made in response to a specific customer request. So, the push part is part of the manufacturer’s supply chain prior to assembly, while the pull part is the part of the supply chain that starts with assembly and is based on actual customer demand. Dell Computers is an excellent example of the impact the push / pull system has on supply chain performance.

The book industry is a good example of the evolution of supply chain strategies from push to pull and then to push /pull. Barnes and Noble, for example, has a typical push supply chain. When Amazon.com started about four years ago, its supply chain was a pure pull system — with no warehouses and no stock. Actually, Ingram Books filled orders to meet customer demand. But this arrangement simply did not work well. Today, Amazon.com has seven warehouses around the country where it stocks most of the titles it sells. Thus, inventory at the warehouses is managed based on a push strategy (based on forecast) while demand is satisfied based on individual request, a pull strategy.

The online grocery industry is another excellent example. When Peapod was founded 11 years ago, the idea was to establish a pure pull strategy with no inventory and no facilities. When a customer ordered groceries, Peapod would pick up the products at a nearby supermarket. Unfortunately, stock-out rates at the supermarkets were very high. In the last few years, Peapod changed its business model to a push / pull strategy, adding a number of warehouses; stockout rates are now less than 2%. Of course, in this industry there are other challenges, especially reducing transportation costs. The problem is that no online grocer has the geographic density of customers that will allow them to control transportation costs and therefore compete with traditional supermarkets.

So, this sounds as though online distributors need to have an infra s t r u c t u re of, ye s, good old warehouses and distribution centers around the country or world.

Precisely, In that respect, brick-and-mortar to click-and-mortar companies (those that have added an Internet shopping to their services) have a huge advantage over the pure Internet companies.

They already have distribution and warehousing infrastructure in place. Wal-Mart, K-Mart, Target and Barnes and Noble, as a few examples, have all established virtual retail stores, serviced by their existing warehousing and distribution structures. As a result of going online, click-and-mortars have now changed their approaches to stocking their various warehouses. High volume products or products for which the demand can be matched with supply, are stocked locally in the stores, while low volume products are stocked centrally for online purchasing.

(Source: http://slevi1.mit.edu/docs/psd.pdf) by Penny Guyer is editor of Parcel Shipping &
Distribution and is manager of Mail and Shipping Services at the Massachusetts Institute of Technology)

IBM Global CFO Study

IBM (NYSE: IBM) today announced the findings of a major new study of over 1,200 Chief Financial Officers (CFOs) and senior finance executives from 79 countries worldwide, which concludes that a surprising number of enterprises are not well prepared to handle the impact of a major risk event to their organization.

According to the study, in the past three years 62 percent of enterprises with over $5 billion in revenue encountered a major risk event. When a major risk event did occur -- such as strategic, operational or geopolitical -- 42 percent of these enterprises were not well prepared for the event.

The Global CFO Study, titled "Balancing risk and performance with an Integrated Finance Organization" was developed by IBM Global Business Services' Financial Management practice and the IBM Institute for Business Value (IBV), with assistance from the Wharton School at the University of Pennsylvania and the Economist Intelligence Unit. Over half of the participating CFOs and senior finance executives participated in a face-to-face structured interview, designed to capture insights on the subject of risk management and finance transformation. The remaining balance responded to an online survey.

Another key component of the study is the emergence of Integrated Finance Organizations (IFOs) which are defined as entities that, at minimum, mandate standards enterprise wide with a standard chart of accounts, common data definitions and standard common processes. The study concludes that enterprise wide common data definitions, a standard Chart of Accounts, common standard processes and globally mandated standards are the components of good governance and what the study calls the Integrated Finance Organization (IFO). Fewer than one in seven enterprises govern and manage the integration of their Finance organization by the combination of these four criteria.

The study finds that IFOs provide greater resiliency, better decision support and help to drive outperforming enterprises. Additionally, the study shows that enterprises with IFOs are more likely to perform better financially than non-integrated finance organizations and are more likely to proactively manage risk.

Who owns Risk?

CFOs are increasingly becoming "owners" of risk management within their enterprise and sharing ownership with the CEO. The study found 61 percent of CFOs are expected to lead risk management within their organization, followed by CEOs (50 percent), Chief Technology Officers (27 percent) and Chief Risk Officers (19 percent).

The study lends credence to observations that globalization opens up significant opportunities for companies but exposes more risks for the enterprise. The IBM Global CFO Study found that in the past three years enterprises encountered a range of risks including strategic (32 percent), geopolitical (17 percent), environmental/health (17 percent), financial (13 percent), operational (13 percent) and legal and compliance (8 percent).

"Globalization currently presents, at the same time, one of the largest challenges and one of the greatest opportunities for global enterprises," said Stephen J. Lukens, Global Financial Management Leader, IBM Global Business Services. "Forward-thinking executives locate operations and functions anywhere in the world based on the right cost, the right skills and the right business environment. The world is shifting towards a new definition of globalization, but a majority of companies are still maintaining the old worldview. Enterprises need to transform their financial management models. They need to integrate their finance operations to take advantage of this new perspective on globalization. Integrated operations alleviate the threats they face and improve the operational performance of their organizations."

Formal Risk Management is Immature

While risks are prevalent, many companies do not have a formal risk management program in place. At many organizations formal risk management is still fairly immature. By their own admission, only 52 percent acknowledge having any sort of formalized risk management program. Moreover, only 42 percent of respondents do historic comparisons to avoid risk, just 32 percent set specific risk thresholds and only 29 percent create risk-adjusted forecasts and plans.

The Rise of the Integrated Finance Organization (IFO)

The study concludes that through greater discipline Integrated Finance Organizations (IFOs) are more flexible, dynamic and effective at executing finance activities and are much better situated to handling risk. While this is important, less than one in seven enterprises with over $1 billion in revenue has an Integrated Finance Organization.

IFOs Perform Better Financially

Overall, IFOs are part of enterprises that achieve higher revenue growth rates -- a 5 year 18 percent Compound Annual Growth Rate (CAGR) versus 10 percent for non-integrated finance organizations. Fifty percent of IFOs are in high growth markets. Integrated enterprises in high growth markets outperform industry peers in stock price and revenue over a five year CAGR period. Revenue jumped 24 percent for IFOs versus 14 percent for non-IFOs.

IFOs Handle Risk Better

The study findings suggest CFOs at Integrated Finance Organizations are more proactive at supporting and managing risk management than their counterparts in non-IFOs. Sixty percent of those surveyed in the study say they are more effective at managing risk versus only 43 percent at non-IFOs. IFOs are also twice as likely to be prepared for major risk events. When IFO respondents were asked to measure their own risk preparedness, 62 percent of organizations over US $5 billion in revenue that experienced a material risk event in the past three years stated that they were well prepared, versus only 29 percent of non-IFOs in the same situation.

CFOs executing effective risk management are 1.2 times more likely to have risk management reporting directly to them, that is 54 percent to 44 percent. The study finds that IFOs more proactively evaluate and address risk. They also formally conduct these activities enterprisewide. Sixty-six percent of IFOs have a formally identify and manage risks versus 51 percent for non-IFOs. Sixty-three percent of IFOs conduct routine management monitoring versus 49 percent for non-IFOs. In addition, 51 percent of IFOs perform a historical comparison of their data versus 41 percent at non-integrated finance functions.

IFOs Execute

Integrated Finance Organizations and influential CFOs are more effective at executing their agenda. CFOs with an IFO feel that they are very effective at measuring and monitoring business performance than their counterparts at non-IFOs, 81 percent versus 57 percent. The study also shows that 93 percent of CFOs with an IFO feel they are very effective at meeting fiduciary and statutory requirements versus only 79 percent for non-integrated finance functions.

IFOs Improve Operational Performance

An Integrated Finance Organization improves performance and increases responsiveness. IFOs spend more time (10 points or 21 percent) on analytical activities (decision support and control activities); report on 20 percent more dimensions and are more likely to focus on customer, industrial and channel activities. They also access data more quickly and provide confidence in data veracity.

Many enterprises are currently non-integrated, but the future is evolving towards more globally integrated enterprises. More than two-thirds or 69 percent of finance executives believe greater integration is difficult to execute but an imperative.

About the Global CFO Study

The findings of this report are based upon a survey conducted in the spring and summer of 2007 by IBM Global Business Services' Financial Management practice and the IBM Institute for Business Value (IBV). Over 1,200 Chief Financial Officers and senior Finance executives from 79 countries participated in structured interviews or online surveys designed to capture insights on how Finance professionals are affected by and deal with performance, risks, operational levers and governance. The majority of these interviews were conducted in person by IBM practitioners, with the remainder interviewed online through a partnership with The Economist Intelligence Unit (EIU). The Wharton School of the University of Pennsylvania assisted with survey design, data organization and interpretation. Participants represent organizations across a variety of industries, geographic locations and revenue size.

By:
Randy Zane
IBM Media Relations
917-472-3589
rzane@us.ibm.com

the World is Flat

The world, indeed, is flat.

Mention outsourcing and you hear all kinds of claims about American jobs being stolen by China, India and other countries in Asia. But for much of San Diego's pharmaceutical industry, outsourcing is a financial necessity.

"Competition is everywhere. With prices going up and salaries going up, it would be prohibitive to get drugs to the market" without turning outside the United States for cheaper labor and less
costly trials, said Scott Saika, CEO of Ambit Biosciences in San Diego. Saika was joined by Dr. Penny Randall, senior director of medical and scientific services for Quintiles, and Krishna Kanamuri, chief business officer for Sai Advantium Pharma Ltd., both San Diego firms. All
three were part of a panel, moderated by Dinu Sen, , CEO of Avera Pharmaceuticals Inc., dealing with the topic "Outsourcing and Offshoring in the Life Science Industry: Challenges and
Opportunities," during the monthly meeting of TiE, the Indus Entrepreneurs, at
the La Jolla Women's Club.

The panel took the gathering through all the stages of bringing a drug to market and the costs involved at each stage. And while seeking opportunities overseas may be the way to survive these days, it is not without risk, according to the panelists.

Said Saiko: "You have to be careful who you partner with. You may find your idea in a catalogue of a small company" in Asia.

All three, who represented life science companies involved in outsourcing and offshoring,
discussed quality, regulatory, legal and financial challenges companies face in today's extremely competitive business environment.

"You have to pay lower to remain competitive," said Saiko, who added that countries in Asia are already catching up in the amount of money they spend on getting pharmaceutical products to market.

While the United States spends 2.6 percent of its gross domestic product on research and development, for example, Japan spends more - 3.5 percent - while Korea and China spend 2.6 percent and 1.4 percent, respectively.

In the United States, according to the panelists, it takes between $500 and $900 million and 10 to 12 years to get a drug to market, which makes it financially practical to cut costs anywhere during the pocess, from discovery through the three rial phases to actually marketing the
final product. Some of the issues that have to be considered include case control, control over
discovery, confidentiality and failure todevelop in-house expertise. On the plus side, there's a lot of money to be saved.

In India, for example, it costs about $25 a day to house a patient, compared to $1,000 a day in the U.S. This can be especially crucial during the final clinical trial, which requires thousands of patients before a drug will pass U.S. Federal Drug Administration Approval.

Ironically, the panelists concurred, the most important phase, the initial discovery, is the toughest to raise money for. "The nature of the product has not been established," Saiko pointed out. "But savings here means more money later in the crucial trial phases." Outsourcing and the ability to speed development of drugs by working with overseas partners was one of the main
topics of last November's second annual Pacific Forum, produced by the Sino- American Biotechnology and Pharmaceutical Professionals Association (SABPPA).

According to testimony at the conferece, some life science firms are saving as much as 75 percent on projects by completing them in Asia. In fact, according to industry sources, partnering with companies in China, India, Taiwan, Singapore, Japan and, more recently, Vietnam, are becoming the norm more than the exception.

At the TiE meeting, Randall said, "A lot of work is going to India. Most major companies have trials going on there now." Her fellow panelists agreed that India as an outsourcing partner has a lot going for itself.

While 1,650 languages are spoken throughout India, 24 of them by a million or more people, English is spoken extensively. Also, the country's infrastructure "is sometimes good," said Sen, who drew some laughs form the largely Indian audience. India also has a large patient population, who are more family oriented, less prone to drug problems and generally in
better health than their American counterparts, according to Kanumuri. Also on the plus side, and in China as well, the work force is highly educated.

Contrary wise, managing trials at a variety of sites throughout India may behard to manage because of the proliferation of so many local languages. Also, added Sen, the learning curves of staffs is not as fast as in the U.S., some hospitals are not "up to speed," regulatory timelines
are different and many labs are not fullyaccredited.

In the end, a lot depends on the quality of partners one finds. The topic of outsourcing was also the topic at an informal luncheon gathering recently by SABPPA members. Hui Li, the group's president, contended that as few as 30 percent of all discoveries are profitable.
"If you have resources in these Asian countries, it allows you to do research at lesser costs and helps American companies to be more productive," said ZhuShen, senior director at Immusol and one of the founders of SABPPA.

"The world is flat, with technology able to connect people globally. And that promises innovation," added Shen, who was recently nominated for a prestigious Athena Pinnacle Technology Award for contributing “to the vitality of women's roles in the San Diego technology community.”


Conclusion: As for outsourcing, "people will take advantage of that. If they don't, they will be left behind,"

(Source: http://www.asiamediainc.com/atf/cf/%7B8654644D-2241-4F54-B13D-589F4D8E9C1F%7D/ASIA%20April%206%20Outsourcing.pdf)

Enron Incident Scared the Boss promoted Corporate Enterpreneurship?

The collapse of the Enron Corporation has had enormous ramifications, not just for its shareholders, suppliers, and other creditors, but also for management theory. The company was widely celebrated for its ambitious, innovative, and seemingly successful management model — the balance of loose and tight management, the use of stretch goals, the system for attracting and retaining aggressive and creative people, and, in the center, the encouragement of internal entrepreneurship as the engine of growth and change.
Now that Enron has collapsed, are we required to write off the idea that companies should encourage entrepreneurship, stretch goals, and risk taking, on the grounds that they will ultimately lead to disaster? Must we accept the logic of journalist Malcolm Gladwell, who, assaying Enron’s demise, asked rhetorically in The New Yorker magazine, “What if Enron failed not in spite of its talent mind-set but because of it? What if smart people are overrated?”

No, we do not have to reverse our thinking. As with any corporate failure, the challenge is to separate the actions that led to the problems from those that continued to work well despite them. Or, stated more positively, we need to understand the enormous benefits of internal entrepreneurship and how it can drive corporate innovation and growth, while not neglecting the costs and risks that are associated with it.

This article provides a framework for thinking through the paradox of entrepreneurship: Every company needs to embrace it, while understanding that, if taken too far, entrepreneurship has the ability to undermine its own power. Building on extensive research in more than a dozen multinational companies (see “About the Research,” at the end of this article), this article describes a model of corporate entrepreneurship and the four typical problems that may arise if it is carelessly implemented. It also suggests ways to avoid each of those problems. Additionally, the research illuminates the promise and the pitfalls of some of today’s celebrated organizational concepts, in particular the challenges of encouraging an unconstrained free-market environment for managing people and ideas inside companies.

An Entrepreneurial Framework

The concept of corporate entrepreneurship has been around for at least 20 years. Broadly speaking, it refers to the development of new business ideas and opportunities within large and established corporations. Within this broad definition, there are at least four schools of thought, each with its own assumptions and objectives. The four basic schools are corporate venturing, intrapreneurship, entrepreneurial transformation, and “bringing the market inside.” (See “The
Four Schools of Thought on Corporate Entrepreneurship,” at the end of this article.)

This article centers on the entrepreneurial transformation school of thought. According to this view of corporate organization, entrepreneurship is an individual behavior that is shaped by the systems and culture of the firm. To bring about lasting change in an established company, the job of senior executives is to develop a set of corporate systems and processes that promote such entrepreneurship throughout the organization.

Our approach is to take the model of entrepreneurial transformation that BP PLC has developed and add our own conceptual twist to it, to show that when it is taken too far, entrepreneurialism can be detrimental to the enterprise. BP is a rare example of a giant company that has radically, and beneficially, transformed itself from within. Close to collapse at the end of the 1980s, BP is now recognized as a leader in the restructuring of the global oil and gas industry and a highly innovative, forward-looking company that, in its pursuit of sustainable energy solutions, is effectively managing the difficult task of balancing growth, profitability, and social responsibility.

At the heart of BP’s transformation is a management philosophy that places responsibility for delivering results deep down in the organization. “Contracts,” as they are known within BP, are set between the top executives, Chief Executive Lord John Browne and Deputy Group Chief Executive Rodney Chase, and those running BP’s business units. Then those individuals are given free rein to deliver on their contract in whatever way they see fit, within a set of identified constraints. Call it empowerment or call it entrepreneurship, the essence of the model is that successful business performance comes from a dispersed and high level of ownership of, and commitment to, an agreed-upon objective.

According to Mr. Chase, the BP management model rests on four components that help guide and control entrepreneurial action. These are direction, space, boundaries, and support.
Direction essentially is the company’s strategy. It is a statement of the goals of the company, the markets in which it competes, and its overall positioning in those markets. BP sees itself as an integrated energy company, but it also defines itself in terms of its commitment to social responsibility, to act as a “force for good.”

Space identifies the degrees of freedom provided to business unit managers to deliver on their commitments. It manifests itself in terms of physical space — that is, freedom from constant interruption, close oversight, and supervision — and the time managers need to experiment and refine their ideas.

Boundaries are the legal, regulatory, and moral limits within which the company operates. These boundaries can be explicit, recorded in policy documents and codes of conduct, or they can be implicitly understood.

Support denotes the systems and programs provided by the company to help business unit managers do their job. These include information systems, processes for knowledge sharing, training and development activities, and work/life balance services.

The beauty of this model is that, together, these four elements create an organizational environment of controlled freedom in which senior executives do their jobs by getting out of the way of those they empower to execute strategy. The point is that for positive, strategically predicated change to occur, the company needs all four components. If any one is missing or out of balance, the model breaks down and the ability of people in the organization to act as effective entrepreneurs is compromised.

(Source: http://www.strategy-business.com/press/16635507/8276)