July 2016

|
What does an executive do? An answer from 1962

Yesterday I found a recommended reading list at Strategy+Business. One of the books on that list was Strategy and Structure, by Alfred D. Chandler, Jr.. It was published in 1962, and is freely available online. Strategy and Structure is a 488 page dive into the structural evolution of four large companies: DuPont, General Motors, Standard Oil
Read More

|
What I learned by watching a Marissa Mayer interview

Yesterday I watched Emily Chang interview Marissa Mayer, Yahoo!’s CEO, on Bloomberg. My immediate takeaway? I was thoroughly unimpressed with Mayer.  I know that’s a harsh, and possibly unreasonable, judgment to make after one interview. Still, she lacked charisma. I was frustrated by how little thought she gave to any of the questions. (She basically
Read More

|
Razors and generic drugs - the yin to innovation's yang

Yesterday, Unilever announced its purchase of Dollar Shave Club, reportedly for $1 billion. The rationale is clear. Dollar Shave Club avoids the huge fixed cost structure that Proctor & Gamble (the parent of Gillette) has. Without a huge fixed cost base, Dollar Shave Club can charge less for their razors.  On top of the price advantage,
Read More

|
Services and innovation are the answer to commoditization

BCG Perspectives published an article last week titled “The Art of Embracing Commoditization”. The gist is that everything is becoming commoditized. What’s new and exciting today, will be old and boring tomorrow. The BCP Perspectives authors describe three possible responses: Establish a cost-based advantage Exploit market inefficiencies Redifferentiate the existing offering The first avenue is
Read More

|
China' multi-billion dollar push to open new markets

I listened to an episode of the McKinsey podcast yesterday about China’s One Belt, One Road initiative. What is One Belt, One Road (OBOR)? A combination of land- and water-based trade passages that will help Chinese companies find foreign customers. It’s a modernized version of the Silk Road of antiquity. OBOR as an important relic
Read More

|
Dow, fish oil, and the untapped innovation around nutrition

Quartz reported on a cool development from scientists at Dow. These scientists found a way to genetically engineer a plant to develop the healthy fatty acids we most commonly find in fish.  Why is that so cool? Because we encounter tons of sustainability concerns when we eat animals. It’s costly. It creates real health risks,
Read More

|
Large companies borrow money from banks, then give it to shareholders

I’ve written twice this week about how much cash large companies are giving to shareholders. In the first post, I showed the cash payments in dollars, split up between share repurchases (i.e. buybacks) and dividend payments. In the second post, I put those cash payments in context, comparing them against the market capitalization and revenue
Read More

|
Even for big companies, Boeing, McDonald's, and Pfizer give a lot of cash to shareholders

As you might expect, large companies give large amounts of cash to shareholders. This cash primarily comes in two forms: stock repurchases (i.e. buybacks) and dividends.  Earlier this week, I published a post showing how much cash large companies gave to shareholders in the first calendar quarter of 2016. I only looked at the 30
Read More

|
How much cash do big companies give to shareholders?

Publicly-traded companies in the U.S. will report their earnings for the most recent quarter over the next month or so. In preparation for those reports, let’s take a quick look at how much cash the largest companies give to shareholders. I’m specifically looking at the 30 companies that make up the Dow Jones Industrial Average (or
Read More

|
Stolen cars and our fear of artificial intelligence

My family and I live in Houston. We’ve heard about a rash of recent nearby car thefts, specifically of Jeep and Dodge models. The problem has become big enough that The Wall Street Journal reported on it Wednesday. These aren’t just normal, run-of-the-mill car thefts. In these cases, thieves use laptop computers to hack into
Read More