June 2016

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A quick look at DuPont before the Dow merger

Yesterday we looked at the business of Dow Chemical, before its upcoming merger with DuPont. Today, let’s flip the script, and peer into DuPont’s business. As we covered yesterday, Dow is the better performer. It’s larger and more profitable. One of its segments, Performance Materials & Chemicals, is a cash cow that funds deep investment
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Dow versus DuPont, revenue

In December 2015, Dow and DuPont announced they had entered a merger agreement. Leading up to the assumed close of the merger, Dow has laid off 2,500 workers. Now that rubber is meeting the road, I wanted to take a quick look at this supposed “merger of equals”. One interesting bit is that the merger
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Pharmaceutical companies can learn something from Apple

I read an article recently from Strategy and Business called “Pharma’s Identity Crisis”. The authors gave a high-level take on what  pharmaceutical companies must do to keep up with a rapidly changing market. Here’s one bit I found interesting: But pharma companies don’t have much experience in the delivery of care. In addition, generating positive
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Looking to innovate? A simple conversation is half the battle

Conor Friedersdorf wrote a short piece for The Atlantic introducing this year’s Aspen Ideas Festival. I had never heard of it before. Here’s the first sentence on the About page for the festival: The Aspen Ideas Festival is the nation’s premier, public gathering place for leaders from around the globe and across many disciplines to
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Losing perspective will threaten your career, and maybe your life

Sanjay Valvani, a 44 year old married father of two daughters, killed himself this week. Valvani was a partner at a hedge fund, and had been accused of insider trading. Prosecutors were seeking a prison sentence up to 65 years. This story rocked me. I’m married and have two young boys. I take my career
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United's big turnaround plan? Do what every other business does

United Airlines is less profitable than its major competitors, American Airlines and Delta Airlines. According to their most recent 10-Q filings, here’s how the three companies stack-up, in terms of operating profit: Delta Airlines: 16.6% American Airlines: 14.1% United Airlines: 7.9% As you’d imagine, this profitability gap is a big problem for United. It’s hard
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LG's two-pronged growth strategy

Bloomberg published an article on Sunday titled “LG Ponders Home Appliance Deals to Speed Up Global Expansion”. The story highlights the importance of market segmentation. It also gives you an idea of where large companies look for growth. LG’s increasingly important decision about which customers to target On the market segmentation front, you have an
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Sears executives show why talking about business can be meaningless

Executives rarely give you interesting information when they talk about their companies. They rely on jargon and platitudes they know will play well with investors. I’m painting with a broad brush, but if you read enough press releases, or listen to enough earnings calls, you’ll see how rare an interesting comment is. An example where
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The changing TV market shows why engineers need to understand business

The Boston Consulting Group recently published an article titled “The Future of Television: Where the US Industry Is Heading”. It’s an in-depth look at the forces disrupting television as we know it. If you’re interested in TV as a business, you’ll like the article. One big lesson from the TV market is that innovation doesn’t
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LinkedIn’s premium valuation tells you about its growth expectations

There are tons of ways to put a price tag on a company. Let’s start with one of the simplest: tangible book value. You can find a company’s tangible book value by subtracting its total liabilities from its tangible assets. For LinkedIn, according to their most recent 10-Q report, you would find a tangible book
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