Business Reading

Last week on my rides to work, I read the Dec. 20/04 issue of BusinessWeek magazine (amongst other things). Here are the notable articles from the issue.

Collapse -- this is a short book review of Jared Diamond's Collapse. If I find this at BMV, I'll definitely pick it up used. Diamond contends in his book that societies chose to fail or succeed, and considering today's environmental degradation and population growth, he suggests that we're heading towards a dark age of our own making. He contends that within the lifetime of our children, the world's environmental problems will be resolved one way or another -- one way is of our choosing, the other isn't, but will most likely be global calamity.

China Shops -- With IBM's recent announcement that they're selling their PC business to China's Lenovo, the world is starting to take notice of China -- not just as a place for cheap labour, but also as a nation bent on joining the big leagues and willing to spend their way to there. It's estimated that China spent US$2.85 billion in foreign acquisition in 2003 -- a figure that could total US$7 billion in 2004 and double to US$14 billion in 2005. Large Chinese companies have no choice but to partner or acquire large foreign competitors. For them to succeed, they need skills in management and marketing, as well as brands.

Steel Raja -- the steel business is so yesterday. That was until China's boom tapped out the global supply. Suddenly, steel is important again, and prices started to rise. Still, steel is a commodity, and buyers name their price when the industry isn't in a supply crunch. That reality is going to change however if Lakshmi Mittal has his way. Slowly, the Indian born British steel magnate, is buying up steel mills across the world. His goal: build a large, healthy steel company that will bring stability and sustainability to the industry.

Gazprom Prophesies Russia's Future -- with the destruction of Yukos, the Russian government is directing the government backed Gazprom to increase its stake in Russia's energy production. Slowly, Gazprom is buying up competitors. Does this signal the end of market reforms in Russia?

Textile Trade -- in the new year, the US and Europe textile import quotas will disappear, and with it will be jobs from the US, Europe and many developing nations that have benefited from the quotas. China will suddenly make its presence felt on the market, and with labour as cheap as it is in China, a whole lot of hurt is about to be felt.

Gadget Affliction -- gadgets don't make us more efficient. PDAs, cell phones, and their ilk that keep us in the constant stream of information flow only make us waste time -- increases errors, lower attention spans, induces stress and slows us down. There is a new disease: attention deficit trait. It lowers performance and increases irritability.

Marketing Champ -- I don't have a George Foreman grill, but I have a knock-off. This article is all about Foreman and his new found role as the marketing champ of the world. The guy can sell just about anything, and his earnings on endorsement is tagged at around US$240 million.

Online Betting -- it's big business, and while it's not against the law, the US government wants to crush it.

eMail Fear Factor -- Businesses want the ability to destroy electronic data and not have to keep it around for years -- sensitive data, such as email correspondence that could be valuable during litigation. Seems like a bad idea. And it is -- until you realize that for businesses, paying to have their old data sifted through to produce pertinent evidence is hideously costly. Anyone who's been on the receiving end of even just a tax audit can empathize.

Flat Coke -- Coca-Cola has been having a hard time since its former CEO, Roberto Goizueta died. It's been through a number of CEOs since, and has now called a former executive, E. Neville Isdell, out of retirement to save it. For a company that boasts such luminaries as Warren E. Buffett, Herbert A. Allen and Donald Keough on its board, you'd think it would be having an easier time at running its business. Think again -- and the fault may lie partially with the board, the resists change, and Coke's culture that doesn't want change, even though the world has moved on from colas and have adopted a wider range of taste.

Warranty Windfall -- If you're buying electronics this Christmas, resist the hard sell to purchase extended warranty. They're not worth it. Look at it this way -- last year, all of Circuit City's operating income came from warranties; and half of Best Buy's. They're not making any money from the products they're selling, that's why the hard sell on warranties.