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Some of the hrdles Blu Ray is facing are the price of Blu-Ray disc players priced by Sony at $399 vs. $60 for a standard machine, and BluRay discs priced at $11 more than regular DVD's. Sony has said that the price of the disc players won't fall below $200 till the end of the year by which time consumers in the USA may further tighten their spending. An April report by Sanford Bernstein & Co. predicts sales of BluRay discs will add only 1% to sales of DVD's this year, so the outlook is very uncertain for BluRay. Part of the problem is that its a discretionary spending item and consumers may ask themselves why spend so much on the discs when there is not a signifcant appreciable difference in performance? Blu Ray discs do not provide that much of a noticeable difference except for action films.

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Siemens and Alstom join together to compete effectively against China's CRRC in Asian markets. CRRC is itself the result of the merger of two large rail companies in China. China has about 12500 miles of high speed rail network, more than the rest of the world combined. Prime Minister Shinzo Abe of Japan is pushing for Japan's Shinkansen bullet trains, with billions of dollars in soft loans, including an effort to build the first high speed rail in India between Bombay and Ahmedabad.

Japan and the European companies have an edge when it comes to longer experience with high speed rail and better maintenance track record, to compete with CRRC's lower price tag.

 

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How information generated by Tesco's Clubcards can be used through rigorous information collection, analysis of mounds of data by computers based on a clear structure for the information and what they are looking for. And how the information insights can be used to quickly take action in what to stock and who to target with what is stocked through direct mail and coupons. Tesco uses information about what interests customers, who they are, for example: child care providing fathers who might want the beer as well as the baby stuff, South Asians in immigrant heavy communities in the U.K. tracking what they buy, and don't buy and where. 1. This information driven strategy of Tesco has been copied by other retailers. P&G, Coca Cola, Kimberly Clark and other consumer product companies buy analyses based on Tesco data. 2. This strategy has helped Tesco battle Walmart overseas. Walmart failed in the S. Korean market after 8 years selling its 16 outlets to a local competitor, while Tesco has 39 stores in S. Korea that are doing well. Tesco is also doing well in Central Europe where Walmart intends to open stores. In the UK which accounts for 45% of Walmart's international sales and 10% of its overall sales, Walmart's share of the British market is 16% for groceries compared to 31% for Tesco. Walmart entered the British market in 1999 through the acquisition of the Asda chain of stores. Tesco is growing and doing much better than Walmart in the UK. 3. Tesco's Clubcard based information driven strategy- 3-1. Uses a outside provider that is excellent in its field, can pioneer techniques that will work with Tesco strategy, and has the energy and dedication. Tesco uses Dunnhumby, a husband-wife consultancy that also works with Kroger in the US running its loyalty card program and analyzing customer data. The research firm is now majority owned by Tesco. 3-2 How it works. Each week Dunnhumby receives data on 15 million shopping baskets. Each product is scored on 50 dimensions such as price and the size of the package. The computer looks for customers whose shopping baskets have similiar combinations of scores. Dunnhumby has made 6 segments for Tesco. Finer Foods segment is made up of affluent time strapped customers who go upscale and Traditional segment comprises homemakers who buy ingredients to cook meals from scratch. 3-3 The clubcard works as follows. Introduced in 1995 by Mr Leahy, now CEO, the application asks for information about dietary preferences, size of household, ages of children . The plastic a card in the mail gives customers a point for every pound they spend after they reach $280. Each point is a penny off future purchases and it also can be converted into miles in frequentflier programs In addition large spenders get discount coupons every 3 months on particular products keyed to their buying profile in the database. Quarterly coupon package from Tesco would include 3 coupons for stuff they regularly buy and 3 for stuff Tesco would like them to try. While only 1-2% of coupons ever get redeemed about 15-20% of Tesco coupons get redeemed. The package also includes vouchers through which members can redeem points. $300 of purchases would generate a voucher for $3.00 off any purchase. Karen Masek, an actor and mother of two in London, says Tesco's mailings reflect her preference for fresh produce, environment-friendly cleaning products and organic meat. She says Tesco knows her buying habits and never sends anything that is way off the mark. 3-4 The way Tesco battled successfully with Walmart: Tesco searched its database and identified shoppers who buy the cheapest items available. About 300 items were identified for price conscious customers. Tesco lowered prices on these items such as Tesco Value Brand margarine so that these buyers would not defect to Walmart. 3-5 Examples of how the computer data is used. 1n 2001 Kimberly Clark introduced a premium version of its Andrex toilet paper in the UK infused with aloe vera. Through the Clubcard research data one could track who was buying this toilet paper and how consistently, and later tracked what other products these buyers were buying so that they could be targeted with incentives. It was found that they bought skincare products so Kimberly Clark sent direct mail to 500,000 customers offering free beauty treatments for purchasing the toilet paper twice....

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Reorganizing a large and ineffective sales force at H-P is one of the biggest challenges facing new CEO Mark Hurd, who took the job in 2005. Under CEO Carly Fiorina the situation had deteriorated. The H-P sales force has become a large bureaucracy which takes much longer to get things done, with the added problems of duplication, redundant layers of management, delays getting approvals and so on. Corporate customers had difficulty reaching salespeople, and getting simple tasks done such as price quotes or getting a sample product took way too long for customers. Salespeople spent only 30% of their time in front of customers, with the bulk of their time spent navigating the large H-P bureaucracy to get things done. Out of 17000 salespeople only 10000 sell to customers, 7000 or 40% are in support or administrative positions. Four people from different groups can be found chasing the same customer, and different quotes from different salespeople cause duplication and confusion. H-P corporate salespeople did not specialize in any particular product area. And salespeople used 30 different types of software to track sales because of years of acquisitions, including the acquisition of Compaq. There are 11 layers of managers between the CEO and corporate customers. Hurd's solution was to organize the sales force so that it was responsible for specific products and specific countries, similiar to the situation he had seen at his previous company NCR. Responsibility and authority for decisionmaking were matched and clearly assigned. Each salesperson had a narrower focus and was to be limited to 3 accounts. H-P's 2000 corporate accounts would have just one salesperson to interface with. Sales would only use one type of software from Oracle Corporation. Changing an organization the size of H-P is a slow process. A year after these changes, the VP of Information Technology at Lear Corporation, says he still does not know who has been assigned as the salesperson for Lear. He has not seen much change in H-P sales. Hurd also reduced the number of employees by 10%, or about 14,500 people. After these layoffs the layers of management have been cut from eleven to eight between Hurd and the corporate customer, still too big a set of layers. ...

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This is the higher education equivalent of the moonshot says one education expert. The community college initiative of President Obama would double the numbe of people graduating out of community colleges. About six million students a year enroll for credit at America's 1200 community colleges, but only about 555,000 earn a two year degree, and another 295,000 a year earn a vocational certificate. The administration is putting a big emphasis on community colleges. Martha Kanter, the former chancellor of the Foothill-De ANza Community college district in California, has been appointed to the No.2 position in the Education Department. Arne Duncan made his first official visit to Miami community college, and Joseph BIden's wife teaches at acommunity college. The way community colleges have functioned in the American system of higher education, is that they provide post-secondary schooling for low-income studetns who have few other options. This works through open admissions. And most students are employed adults attending parttime; and according to some studies more than half need remedial courses before tackling college level work. The Obama effort is to require community colleges to work harder to retain students until graduation, and to encourage partnerships between community colleges and employers to offer workforce training. Without the access to the additional funding community colleges would actually find themselves in a bind, with rising enrollment rates just as their funding access deteriorates with state spending budget cuts. Debra Bragg, co-director of the Forum on the Future of Public Education at the University of Illinois, says that most new graduates produced under the Obama proposal would complete certificate programs, usually lasting 6 months to ayear , offering specific credentials for middle skill jobs. These jobs could be in healthcare, information technology, or other growing areas. See the article in BW showing the problem that is growing of unfilled jobs in many growing fields during a period of high joblessness, because of amismathc between the qualifications of jobless people and the requirements in the new fields. An example id autoworkers in Michigan taking up new skills for jobs in other fields. In this sense this program can be immensely useful in closing the gap. Results will take time as these resources take effect and graduation rates increase over time. ...

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What will the E-Book do to bookstoreslike Barnes & Noble? This is a question that investors like Burkle, who owns 20% of Barnes & Noble, and Mr. Riggio who owns 31%, are facing. Apple's IPad is expected to sell 5.5 million units in 2010, Amazon's Kindle 3 million, and Barnes and Noble's Nook 1 million units. Barnes & Noble invested early on in a handheld device called the Rocket eBook reader with its investment in NuvoMedia in 1998. But pulled out of the eBook business in 2003. The problem at the time was the lack of enough titles to arouse reader interest and the high prices-$20 per eBook vs $25 for a hardbook. This move proved costly when Amazon launched its Kindle in 2007. Amazon now has 70-80% of the eBook buisness, with Sony, Kobo, and Barnes and Noble competing for the remaining share. Riggio bought the first store for Barnes & Noble on New York's Fifth Avenue in 1971. He promoted superstores with huge selections (over 100,000 titles) and built up a chain of 719 stores in ensuing decades. Now he faces a new reality in the arithmetic of eBooks which could remake this business. Apple set a new method for pricing eBooks that affects booksellers. Publishers and Apple set up a model that gives the publisher 70% of the eBook digital price. EBook sellers act as agents in this approach, and they get 30%. Best sellers sell for $9.99 but other books can be $12.99 or $14.99. Now the digital bookseller gets 30% of $12.99. And as it hasn't paid anything its more advantageous and profitable. This works for publishers and digital booksellers but Barnes and Noble was used to getting much more than $3.90 when it sold a $25 hardcover book. If eBook sales climb to become a quarter or more of total book sales by 2012 then it will lead to a decline in sales revenues for Barnes & Noble. With eBooks costing half of the hardcover prices in brick and mortar retailers the trend is irreversible. To address this trend Barnes & Noble has hired a digital expert Mr Lynch as CEO, and the strategy is to combine the retail presence and customer physical contact in brick-and-mortar stores with eBook retailing, to come up with an answer to this tidal wave of change in book retailing. ...

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Public perceptions in the USA of China are changing. Today 42% have unfavorable views of China vs. 39% tha have favorable views of China from survey results released in August by the Pew Research Center. This is a change from 2007 when 42% polled had a positive view of China and 39% a negative view. Things that have changed since then are the Tibet riots and China's strong reaction, the issues of contaminated Chinese products entering the USA market and the nationalism in China on the eve of the Olympics. The last touches McCain and his senior advisor on China, Michael Green of Georgetown University, who finds the Chinese reaction on issues like trade to be cocky but cocky to the point of being arrogant. His comment "the combination of arrogance and insecurity can be dangerous." Green was on the National Security Council under President George W. Bush. McCain and Green want to bolster trade relations with other Asian countries like India to help the USA strengthen its bargaining power with China. McCain wants to strictly enforce trade agreements with China including blocking unsafe products from China. The shift in opinion in the USA at a time when there is a shift in opinion in China to a nationalistic tone sensitive to criticism of China even when it concerns issues like Tibet which do not affect any vital interests of China should be seen as significant. This is happening at the same time as a candidate like McCain who has less tolerance for Russia and a similar position for China is running strongly for President and has the experience and support of most Americans on foreign policy issues. Its useful also to see that the figures given here show 60% of Russians seeing China in a favorable light and only 30% in an unfavorable light. And when you look at France and Germany, 72% in France and 68% in Germany see China in an unfavorable light, only 28 and 26% respectively having a favorable opinion. Britain is an exception because 47% of the British public has a favorable opinion of China, only 36% having an unfavorable view. The figures are from Pew Research Center polls of 4,257 adults in he five countries conducted in March and April (international views)....

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How Merck has approached the Vioxx lawsuits. Taking each case and looking at whether Vioxx was taken continuously for months or years and its proximity to the heart attack, did Vioxx or something else cause the heart attack. It had no choice because 105 million prescriptions were written for Vioxx for the five years preceding the Vioxx concerns, 100,000 heart attacks for 20 million Vioxx users. The question remained what really caused the heart attacks cholesterol, obesity or something else other than Vioxx, or Vioxx, in each individual case the situation could be different. About 45,000 cases have been filed and so far only 20 have reached juries. It has cost Merck $1 billion but its exposure would have been huge, $25 billion vs the $5 billion this strategy might cost. Its stock has gone up 80% since it hit a low from the Vioxx controversy. So far Merck has won most of the cases that went to juries, and this has discouraged additional lawsuits.

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Vietnam has seen rapid growth in the last 20 years as it joined the shifted away from the state planned economy similar to China in the late 1980's, joined the worlds trading system, freed up the economy and attracted foreign investment. But something doesn't seem right. Looking at the Vietnam growth curve, growth in Vietnam's GDP vs growth of world GDP the curve seems to be following a similiar pattern, there is a sharp downturn in the early 1990's with a V shaped bounce back and a sharp downturn in early 2000 followed by another V shaped bounce back in growth to this date. As America begins its first of several years of credit contraction and investment contraction followed by similiar patterns in some European economies like the UK, Ireland, Spain and a slowdown in the rest of Europe, the question hangs over growth in Asia, from South Korea and Taiwan where recent elections reflected these concerns in electing politicians who promised new ways of kickstaring their economic growth, to China, India and Vietnam where the concerns are about how to meet the growing expectations of the large numbers of people, probably the majority of the people in these countries who have been left out of the economic development experienced in urban areas and by the new middle class. Corruption, the stock market collapse or severe setback, and a slowdown in their main export markets, and are problems shared by all 3 countries China, India and Vietnam. India and Vietnam share the problems of a poor infrastructure. In this new environment Asian countries will have to come up with innovative solutions to maintain growth and quality of growth, as some of the chaotic growth of the last 20 years may have come at some cost like that of the environment in the case of China and better solutions can be found than growth that sacrifices goals in health care and other necessary goals of balanced development....

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Vehicle sales in the U.S. market went up by 18% in April 2011. There was a significant shift fuel efficient vehicles and small cars with gasoline running at over $4 per gallon. Sales are running at an annual rate of over 13 million vehicles for the February-April 2011 period. Helping sustain sales momentum is the aging of the U.S. vehicle fleet- average for vehicles in the U.S. is above 10 years according to G.M. vice president, Don Johnson. GM sales were up 27% in April 2011 over the prior year- with only a 2% increase for pickup trucks and a 50% increase in sales for passenger cars. There was strong demand for the Chevy Cruze compact and smaller fuel efficient sport utility vehicles. Ford had a 16% increase in sales, with strong demand for the new Fiesta, Focus small cars and the new lighter version of the Explorer SUV. Ford's Ken Czubay, head of sales and marketing, says dealers are selling the Focus right off the convoy truck, which gives some indication of the shift in consumer preferences. Chrysler vehicle sales increased 23%, with car sales up 41% in April over the prior year. Some indication of the shift can be seen in the incentives dollars- the largest rebates of $3200 were given for large trucks, according to Edmunds.com. At the same time overall dollars per vehicle for incentives dropped from $2600 in April 2010 to $2100 in April 2011. Toyota sales increased by only 1% because of shortages as a result of the earthquake, especially for the smaller cars like the Corollas and the Prius....

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The terms of the bailout loan to GM and Chrysler prohibit a threat to strike or a strike by the UAW during the negotiations with GM that take place between now and Feb 17, 2009. These are the terms between the Treasury Department and GM. Smaller strikes at GM and a longer strike at American Axle and Manufacturing cost the supplier and GM billions of dollars in cash at a perilous time for GM, showing that steps by the union have not been in the interests of the union and its workers in the long run. GM and the union now have the government also as a part of the negotiations, and more pressures are inevitable to become competitive in wages, benefits and other costs with the Japanese manufacturers.

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Krueger and Posner, eminent economists, say the reason wages have stagnated in the U.S. with wages not having budged much over a decade 2008-2018, is not only because of globalization and automation as long term trends. They attribute this stagnation in wages to "monopsony power," or power American corporations have over workers because of their stronger bargaining position and because workers have few alternatives.  For most of this period 2008-2018 high unemployment as reflected by the people out of work and taking part time jobs or having stopped looking for work, shifted bargaining power to companies. The Economist magazine pointed out that workers have not shared in the profit and gains corporations made during this period. Here Krueger and Posner show additional factors such as non compete clauses in worker agreements that have depressed wages. Half of franchise agreements prohibit competition for labor. Outsourcing work to other companies that hire workers means these outsourcing companies have more power over workers than the original companies using the labor. Unions represent only 7 percent of private sector workers by 2017, compared to 35 percent in the 1950's, so that there are no mechanisms to counteract the greater bargaining power gained by companies vs. workers. The way workers have roots in the communities they live and the consolidation of employers into a few companies in a particular area, mean fewer options exist for workers.  Senators Warren and Booker and the anti-trust division of the U.S. Justice Department are in agreement on this issue of widespread use of noncompete agreements that is considered unlawful, says this report in the NYT, offering hope for a solution to bring a better balance between the rights of workers to fair wages and companies seeking profit for stakeholders. Issues about workers, lack of gains for workers, prevalent outsourcing, and the frustrations of labor with parties that had lost touch with their worker base- such as Labor in Britain, SPD in Germany, Socialist Party in France and the Democratic Party in the U.S. - have led to political upsets with support shifting to other parties. This has not led to significant change to improve bargaining power of workers to correct the imbalance that now exists between labor and companies, leading to calls for change. Eric Posner is a law professor at the University of Chicago law school and co-author of a new book "Radical Markets: uprooting Capitalism and Democracy for a Just Society." This book turns the popular notion on its head that free markets have produced the imbalances that hurt social cohesion and democracy, by saying it is precisely the suppression of free competition such as for labor that have created this unhealthy situation. This is true in other areas where monopoly power has developed in other parts of the U.S and European economies in 2008-2018, as also for distortions in capital allocation that hurt infrastructure and other public investment. Krueger is a professor of public affairs at Princeton University and former head of the President's Council of Economic Advisors in 2011 under Obama, showing that Democrats themselves failed to correct this imbalance leading to a shift to other parties and Mr. Trump, who also appear to lack ideas or solutions to this problem that affects social cohesion and democracy. This is contrary to the vision of American or European society of better opportunity for all shared by all Americans and Europeans for most of the twentieth century. ...

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What the French take for granted today- 99% of the French people are covered by national health care- started when Charles De Gaulle faced rising scial discontent in the postwar period, and accepted a demand for worker protections. During the postwar period Frenchmen are paying higher taxes, but in the first 30 years because French salaries were growing fast this was not noticeable. With slow growth and rising healthcare costs its getting harder to increase these tax deductions for overall social security, which have reached one third of apaycheck at the low end, say for ataxi driver in Marseilles. So you have the government running deficits of $15 billion in 2004, even after increasing co-payments for routine care and doctors visits. Experts say this could reach $40 billion in 2010 and $90 billion in 2020. In 2007 health care cost the government $300 billion, or 11 % of GDP, (OECD numbers) and the bureaucracy and rules are getting more complicated. This 11% is well below what Americans pay for asystem that leaves out about 50 million people. France ranked 8th on the OECD list in cost per capita, the US at the top. And the French life expectancy is higher at 80.98 vs. 78.11 for the USA, higher by about 3 years. For this cost the system is cost effective according to the OECD. And the French find the American debate abouthealthcare public option "altogether surreal", as the newspaper Le Monde put it. To keep the system in viable form the government is increasing copayments, such as the decrease in reimbursements from 80% to 65% for routine care and doctors visits in 2004. As aresult the deficit dropped to $6 billion in 2008. ut the global economic crisis and rising unemployment has made this grow to estimated $13 billion for 2009. Measures under consideration: increasing hospitalization copayments to $28 a day from $22. To fill this substantial gap for routine care and other costs the French system has private insurance companies called mutuals that offer different policies. Which is where the Fench notion for equal treatment in health care gets distorted because different people can have different coverage. The French though compare their system to the British system and say theirs is not as nationalized as it appears and the Brisih one is much more so. The French system though supervised by the government is different from government run health care as in Britain. French people are free to choose their own doctor who is often a private practitioner. ...

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How the energy business sale of gas turbines to provide electricity in the middle east is boosting GE's energy business worldwide, increasing sales to over $20 billion in 2007, at the last peak in 2002 sales reached $22.5 billion for GE's energy business. Couple of things to note. GE's revenue is growing at about 20% a year in the middle east. Its sales in the middle east now exceed China's with $8 billion in Middle East for 2007 vs. 6 billion in China. By 2010 sales from China India Brazil and Middle East will total $50 billion compared to 30 billion today. thst is an increase of 67% over 3 years. Power is a big chunk of this in addition there are aircraft engines and health care equipment. See the other article on middle east growth July 19, 2007 WSJ. About half of the population of 300 million in the middle east is under 20 years of age. Also note the last runup in GE's stock price was from its surging energy business in the 1990's.

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The corn crop estimate for 2008 by USDA economists is 13.1 billon bushels vs 12.1 in 2007 a drop of 7.3%. Ethanol industry will use 4 billion bushels of this from the crop collected in autumn. This corn crop will be used by food companies into late 2009 for everything fom feeding cattle and pigs and dairy cows to making soft drinks and breakfast cereal and a host of other fod products. USDA forecasts a price of $5.50 per bushel for 2008 compared to $4.40 for 2007. USDA expects Consumer Price Index for food to go up 5% in 2008. Other experts expect it to be higher and go into 2009. At the same time the FDA forecasts that for grain the world will produce more grain in 2008 than it will use helping build stockpiles for wheat and rice. Reason for this is that governments are responding to current shortages by attracting more investment and freeing up more land for food production. In the US land will shift from corn and cotton to more profitable crops like wheat and soyabeans.

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Saakashvili, the President of Georgia who was elected in 2004 has spent a lot of time in New York, as a waiter, as a student at Columbia Law School, and was elected at the age of 36, and runs an administration with a lot of 30 year olds. He says he has "American va;ues". HE also ran for election in 2004 on the platform of taking back the two ethnic Russian regions of Abhkazia and South Ossetia. Note also that the mountains near Abkhazi border the region around Sochi where Putin goes for vacation and likes to ski in the mountains and where the winter Olympics are to be held in 2014. He has also had run ins when he has talked to Putin saying he has western support for his position and has met with disdain from Putin. See th link to other articles in the New York Times about Putin's perspective on all this and how the two men share a dislike for one another which may have exacerbated Russia's response still further.

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In a strategic move to fill a gap in its competition with Tesco and Sainsbury in Britain, Wal-mart has decided to pay 778 million pounds for Denmark's Netto chain's 193 stores in Britain. Tesco has ben expanding with new store formats and has built a sizable presence with smaller stores. Customers in Britain like the advantages of shopping in smaller stores, with older customers or customers in small households preferring to buy often and as needed rather than make a long drive to a distant location for bulk purchases. Wal-mart in Britain was seeing its share of the grocery market at 17% slipping in relation to Tesco's 30% share. Efforts to open its smaller stores of 8000 square feet have run into tight zoning regulations and it has only 25 such stores so far. The Netto acquisition helps fills this gap. It still will not have the same quality of locations that Tesco and Marks & Spencer have, which are better centrally located, and in busy residential areas. It still is a much needed move into convenience retailig for the Asda business of Wal-mart....

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The US stock markets show stocks displaying a herd behaviour, with stocks going up on good days and going up on bad days in a flock pattern. This leaves little room for individual stock picking. Institutional investors with strategies to buy a broad range of stocks in large blocks, trading in and out based on indexes, now dominate the market.

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Slower growth for luxury car sales in China in 2013. German carmakers BMW, Audi and Mercedes are strong in this segment.

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The Dow Jones Average in the US went up by 11.3% since August 26, 2010, in anticipation of the Fed's quantitative easing, and the Republican win in the House and a filibuster capable 41 seats in the Senate. But on the eve of the midterm election in the first week of November 2010, the mood is changing. There is considerable concern that the Dow Jones average may have gone too far. Experts question the advantages of gridlock in Washington, especially when strong government action may be necessary in a crisis. And there are questions on how effective the Fed can be this time when the interest rates are already near zero.