Forget Gold - Look at Corn
Ok, I know the price of corn has increased by about 600 percent in recent times but that increase may just be the beginning.
The northern part of the United States - specifically the Dakotas and Minnesota - have experienced a particularly harsh winter. Snow fall is 125 to 200% more than usual, meaning that area of the north and downstream areas such as Iowa and Illinois (our main corn producing areas) are likely to experience significant flooding as part of the "spring thaw". If that happens, it could damage, if not wipe out, a significant portion of this year's corn production.
S.A. Romeo
The Strategy Expert
Note: this post does not represent investment advice.
Showing posts with label risk assessment. Show all posts
Showing posts with label risk assessment. Show all posts
Monday, March 7, 2011
Wednesday, March 2, 2011
Fly the Flexible Pricing Skies
Fly The Flexible Pricing Skies
Allegiant Air has sent a letter to the Department of Transportation floating the idea of offering a new strategy for airline pricing. The consumer would pay a base price and based upon the price of fuel at the time of travel, the final price would actually be higher or lower. The consumer would be offered the option of paying the regular fare or the new flexible fare.
Sound innovative? It is not a new idea, the charter industry already uses a similar approach. It is basically a strategy of pushing fuel hedging to the customer thus mitigating risk to the airlines associated with world events and the price of fuel.
Which would you rather buy, a set price ticket or one that may go up or down depending upon world events and fuel prices? What percentage of the buying public is likely to participate? If your company's financial policy is to select the lowest price, might that fit into this strategy?
We'll have to wait and see what the Dept. of Transportation thinks about this old strategy being used in a new way.
Allegiant Air has sent a letter to the Department of Transportation floating the idea of offering a new strategy for airline pricing. The consumer would pay a base price and based upon the price of fuel at the time of travel, the final price would actually be higher or lower. The consumer would be offered the option of paying the regular fare or the new flexible fare.
Sound innovative? It is not a new idea, the charter industry already uses a similar approach. It is basically a strategy of pushing fuel hedging to the customer thus mitigating risk to the airlines associated with world events and the price of fuel.
Which would you rather buy, a set price ticket or one that may go up or down depending upon world events and fuel prices? What percentage of the buying public is likely to participate? If your company's financial policy is to select the lowest price, might that fit into this strategy?
We'll have to wait and see what the Dept. of Transportation thinks about this old strategy being used in a new way.
Tuesday, March 1, 2011
Two and a Half (minus) Men
Two and a Half (minus) Men
The news is buzzing about the possible end of the television show, Two and a Half Men.
Looking at the situation from purely a strategic perspective, one has to wonder what went wrong? Sure TV shows, like products, have a lifecycle but it didn't appear that the show had progressed to the exit strategy stage as of yet. Two and a Half has been a top-rated show featuring Charlie Harper, a man successful in the entertainment business who earns lots of money, drinks and likes his women. Sound familiar? People watch the show and it is (was) one of CBS's top shows - a proven model for success.
One of the stars of the show, Charlie Sheen, according to the media, lives a similar lifestyle in real life, but much to the dislike of some executives. The media is reporting that Charlie does not have a "morals clause" in his contract, meaning any activities he pursues would not be a violation of his contract.
In business, this type of branding would be great. Consistency between the highly successful character that everyone watches and the real life character might even add value to the business and the brand. Sheen gets paid millions to portray a lifestyle on TV and then criticized for living a similar lifestyle. I hear that no major advertisers have left the show. Perhaps CBS should be supporting Charlie and hope that he makes the news. It might actually draw more viewers to the show. Remember the old PR adage, I don't care what they say as long as they spell my name right?
Some might say Sheen's alleged behavior can be bad for business. A star might get drunk or high, hurt someone, be arrested or even get hurt and miss a few weeks of taping. Ok, I agree. But knowing that those risks exist at the beginning of a season, executives should account for that in its timeline and account for it in its risk assessment and contingency budget.
One media report indicated that Two and a Half Men is a billion dollar business. Surely a cost-benefit analysis would show a delayed taping schedule of a few weeks would not be that detrimental when looking at the overall strategic picture. It is hard to believe that management did not prepare for the recent events and actually bring in PR to mitigate the risk or even capitalize on the events. Instead of consistent marketing and branding of the two Charlie's, it appears we may see a going out of business sign.
That's too bad. I guess we will all be minus two and a half.
The news is buzzing about the possible end of the television show, Two and a Half Men.
Looking at the situation from purely a strategic perspective, one has to wonder what went wrong? Sure TV shows, like products, have a lifecycle but it didn't appear that the show had progressed to the exit strategy stage as of yet. Two and a Half has been a top-rated show featuring Charlie Harper, a man successful in the entertainment business who earns lots of money, drinks and likes his women. Sound familiar? People watch the show and it is (was) one of CBS's top shows - a proven model for success.
One of the stars of the show, Charlie Sheen, according to the media, lives a similar lifestyle in real life, but much to the dislike of some executives. The media is reporting that Charlie does not have a "morals clause" in his contract, meaning any activities he pursues would not be a violation of his contract.
In business, this type of branding would be great. Consistency between the highly successful character that everyone watches and the real life character might even add value to the business and the brand. Sheen gets paid millions to portray a lifestyle on TV and then criticized for living a similar lifestyle. I hear that no major advertisers have left the show. Perhaps CBS should be supporting Charlie and hope that he makes the news. It might actually draw more viewers to the show. Remember the old PR adage, I don't care what they say as long as they spell my name right?
Some might say Sheen's alleged behavior can be bad for business. A star might get drunk or high, hurt someone, be arrested or even get hurt and miss a few weeks of taping. Ok, I agree. But knowing that those risks exist at the beginning of a season, executives should account for that in its timeline and account for it in its risk assessment and contingency budget.
One media report indicated that Two and a Half Men is a billion dollar business. Surely a cost-benefit analysis would show a delayed taping schedule of a few weeks would not be that detrimental when looking at the overall strategic picture. It is hard to believe that management did not prepare for the recent events and actually bring in PR to mitigate the risk or even capitalize on the events. Instead of consistent marketing and branding of the two Charlie's, it appears we may see a going out of business sign.
That's too bad. I guess we will all be minus two and a half.
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