What Global Conflict Means to Local Business
How can the unrest in the MENA (Middle East and North Africa) area effect your local business?
For many, it will have little impact but any hint of instability in this part of the world often means an increase in oil prices, as we are currently experiencing. That often results in higher airplane tickets (we have already seen $10 or $20 increases), increased transportation costs and higher gasoline costs for the local consumer.
So, while businesses can do little about what is happening in MENA, there can certainly be an impact upon local business so it does pay to pay attention to international news as part of your strategic planning.
S.A. Romeo
The Strategy Expert
Monday, March 7, 2011
Forget Gold - Look at Corn
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.
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.
Saturday, March 5, 2011
Sixty Seconds to 10 Years: Why Contingency Planning is So Important
Sixty Seconds to 10 Years: Why Contingency Planning is So Important
Just a few weeks ago the city of Christchurch, New Zealand was struck by a major earthquake that did extensive damage to buildings and infrastructure. Most cities do strategic planning, but few conduct extensive contingency planning or adequately prepare for major disasters, let alone the long-term requirements.
A report on the Internet today indicates that the 60 second or less earthquake caused damage that will take 10 years to rebuild. One hopes the city planners in Christchurch have an organized strategic and contingency plan in place to deal with the clean up and rebuilding the city.
Of course a community can never totally rebuild what has been destroyed so it is wise for cities to revamp the strategic plan in an attempt to make the city better than it was prior to the disaster.
While the rebuilding is likely to take 10 years, the full impact of the new strategic plan is not likely to be felt for a generation or more. Such is the impact of long-term strategic planning.
Just a few weeks ago the city of Christchurch, New Zealand was struck by a major earthquake that did extensive damage to buildings and infrastructure. Most cities do strategic planning, but few conduct extensive contingency planning or adequately prepare for major disasters, let alone the long-term requirements.
A report on the Internet today indicates that the 60 second or less earthquake caused damage that will take 10 years to rebuild. One hopes the city planners in Christchurch have an organized strategic and contingency plan in place to deal with the clean up and rebuilding the city.
Of course a community can never totally rebuild what has been destroyed so it is wise for cities to revamp the strategic plan in an attempt to make the city better than it was prior to the disaster.
While the rebuilding is likely to take 10 years, the full impact of the new strategic plan is not likely to be felt for a generation or more. Such is the impact of long-term strategic planning.
Friday, March 4, 2011
The Poorest Rich Nation
The Poorest Rich Nation
I have long shared with friends and associates that the US government has (and still is) using the wrong strategic economic approach to solve our economic woes. One might even say these strategic approaches, such as The Feds quantitative easing, whatever that is, has added to the problem.
Today, we get an update on our economy. 14.3% of the U.S. population, 44.1 million people, don't make enough money each month to feed themselves and they are on food stamps. The government is boasting about the 250,000 jobs it has created, while 44.1 million can't feed themselves. Oh, and the cost of creating those 250,000 jobs is estimated to be $1.3 million per job.
http://leverageacademy.com/blog/2011/03/04/44-million-in-the-u-s-use-food-stamps-14-3-of-population/
More distressing news today indicates that the the real unemployment rate in the United States increased to 10.3% for the month of February.
http://www.gallup.com/poll/146453/Gallup-Finds-Unemployment-Hitting-February.aspx
How long will it take the strategists at the federal government to realize that the strategies they are using are not working, and in fact are hurting the economy?
I have long shared with friends and associates that the US government has (and still is) using the wrong strategic economic approach to solve our economic woes. One might even say these strategic approaches, such as The Feds quantitative easing, whatever that is, has added to the problem.
Today, we get an update on our economy. 14.3% of the U.S. population, 44.1 million people, don't make enough money each month to feed themselves and they are on food stamps. The government is boasting about the 250,000 jobs it has created, while 44.1 million can't feed themselves. Oh, and the cost of creating those 250,000 jobs is estimated to be $1.3 million per job.
http://leverageacademy.com/blog/2011/03/04/44-million-in-the-u-s-use-food-stamps-14-3-of-population/
More distressing news today indicates that the the real unemployment rate in the United States increased to 10.3% for the month of February.
http://www.gallup.com/poll/146453/Gallup-Finds-Unemployment-Hitting-February.aspx
How long will it take the strategists at the federal government to realize that the strategies they are using are not working, and in fact are hurting the economy?
Thursday, March 3, 2011
U.S Government Does Not Have a Strategic Plan
U.S Government Does Not Have a Strategic Plan
Many find it difficult to believe that the Government of the United
States does not have a strategic plan. While it is true that various departments and agencies within the government have strategic plans (the Department of Transportation usually creates a good strategic plan) the government, as a whole, does not have a long-term strategic plan.
Every four years there is a presidential election and senators and house members are elected every six years in the United States. Whoever is elected as president sets the agenda, along with a Congress who sets the budget. That means the long-term strategy of the federal government can (and often does) change based upon the personal agendas of these individuals.
Have you noticed that sometimes the U.S. Government helps a foreign country and then at other times, after an election, that assistance changes? Or sometimes the relationship with the United Nations is stronger than at other times? Strategic relationships often depend upon who is sitting in the chairs of leadership.
A few years ago I was sitting in the living room of a Prime Minister in the Caribbean listening as he described how the U.S. government developed a relationship with his country only to then find that the United States did not like the fact that offshore gambling was allowed, which could encourage money laundering. According to the PM, the U.S. Government provided enough pressure to cause this small island nation to revamp its policy, a policy that was a major revenue generation for the country.
Strategic planning, a process that has successfully been used going all the way back to ancient Greece, a process created by military institutions (segments of government) and perfected by business, is not used at the macro level by the U.S. Government.
Do you think China's growth is happenstance? It is not. It is part of China's strategic plan that it created years ago. In fact I am told that this is China's eleventh 5-year strategic plan. Thus, China has been working off of strategic plans for the last 55 years.
Perhaps it is time leadership decides where the U.S. should be 10, 15 or even 20 years from now instead of only thinking short-term and changing the agenda all the time. Imagine if a business brought in a new CEO every four years and a new Board every six years and they changed the entire focus of the organization based upon their own personal agendas.......
Need prove the federal government needs to concentrate on strategic planning? The White House blog today (march 3) writes:
"The Federal government owns 1.2 million properties across the country making it the biggest property owner in the United States, but billions of taxpayer dollars are wasted each year on government properties that are no longer needed. This includes roughly 14,000 buildings and structures currently designated as excess and thousands of others that are underutilized."
An organization governed by a strategic plan that is constantly controlled and monitored would never let that happen.
Many find it difficult to believe that the Government of the United
States does not have a strategic plan. While it is true that various departments and agencies within the government have strategic plans (the Department of Transportation usually creates a good strategic plan) the government, as a whole, does not have a long-term strategic plan.
Every four years there is a presidential election and senators and house members are elected every six years in the United States. Whoever is elected as president sets the agenda, along with a Congress who sets the budget. That means the long-term strategy of the federal government can (and often does) change based upon the personal agendas of these individuals.
Have you noticed that sometimes the U.S. Government helps a foreign country and then at other times, after an election, that assistance changes? Or sometimes the relationship with the United Nations is stronger than at other times? Strategic relationships often depend upon who is sitting in the chairs of leadership.
A few years ago I was sitting in the living room of a Prime Minister in the Caribbean listening as he described how the U.S. government developed a relationship with his country only to then find that the United States did not like the fact that offshore gambling was allowed, which could encourage money laundering. According to the PM, the U.S. Government provided enough pressure to cause this small island nation to revamp its policy, a policy that was a major revenue generation for the country.
Strategic planning, a process that has successfully been used going all the way back to ancient Greece, a process created by military institutions (segments of government) and perfected by business, is not used at the macro level by the U.S. Government.
Do you think China's growth is happenstance? It is not. It is part of China's strategic plan that it created years ago. In fact I am told that this is China's eleventh 5-year strategic plan. Thus, China has been working off of strategic plans for the last 55 years.
Perhaps it is time leadership decides where the U.S. should be 10, 15 or even 20 years from now instead of only thinking short-term and changing the agenda all the time. Imagine if a business brought in a new CEO every four years and a new Board every six years and they changed the entire focus of the organization based upon their own personal agendas.......
Need prove the federal government needs to concentrate on strategic planning? The White House blog today (march 3) writes:
"The Federal government owns 1.2 million properties across the country making it the biggest property owner in the United States, but billions of taxpayer dollars are wasted each year on government properties that are no longer needed. This includes roughly 14,000 buildings and structures currently designated as excess and thousands of others that are underutilized."
An organization governed by a strategic plan that is constantly controlled and monitored would never let that happen.
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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