May 27, 2007
by Oliver
2 Comments
We are back from our 7 day trip to Mallorca. It is a very beautiful island; and I strongly recommend visiting this island at the end of May. The weather is warm (26 – 28 degree Celsius), the nature booms and all places are not overcrowded. Hence we would like to illustrate our impressions; of course we would like to offer some recommendations, too.
Port of Cala RatjadaÂ
Our recommendations
May 14, 2007
by Dagmar
Comments Off on DaimlerChrysler finally without Chrysler – Some thoughts about the pro’s and con’s
The breaking news today is that DaimlerChrysler is going to sell about 80 % of Chrysler to private equity fund Cerberus. The price of 5.5 bn Euros is far less than what former Daimler Benz AG invested for its ‘merger among equals’ with Chrysler years ago. My first reaction to this news was some sort of relief: Thank god, it’s over now. They have finally found a solution for a major problem.
I took some time to read through all sorts of comments on this issue today – from German FAZ to more internationall FTD, including readers comments on their websites. Reactions were mostly positive. This corporate ‘divorce’ was mainly welcomed as a new starts for both companies – Daimler and Chrylser. However, there were some critical voices too. The longer I think this through from a strategic perspective (which is for me long-term by definition), the more I have some second thoughts too.
Again, I have to admit that I didn’t make up my mind finally. It is in the nature of strategic decisions that only time will tell if they were good or bad. For the moment, I have more questions than answers: Continue Reading →
May 13, 2007
by Oliver
2 Comments
Do companies always have a strategy? This is a difficult question, since a variety of definitions for the term strategy exist. Hence I would like to present some major and important definitions for this term:
To answer our key question I would like to describe strategy as a bridge between corporate policy on one hand and tactics or specific measures on the other. A long time it was well accepted that strategies would (always) exist; hence the research interest only focused on the way to formulate and to implement them. The general question, whether strategies do exist at all and the option, that an entire organization does not have a strategy, was not an object for research. Continue Reading →
May 8, 2007
by Dagmar
1 Comment
I really like this: Lebanon’s First National Bank offers Loans for Plastic Surgery. With the slogan “Beauty is no longer a luxury…. With FNB’s Plastic Surgery Loan you can cover all your Plastic Surgery operations and Orthodontics†they offer loans from USD 500 to USD 5,000. All you need is a certain minimum salary.
I never heard of anything like that – at least not here in Germany. Although I am not in need for plastic surgery or even financing for this purpose, I like the marketing strategy behind this product. This Plastic Surgery Loan is nothing else than an ordinary consumer loan: Customers are offered small loans without any securities and for no particular reason. The only precondition is a regular income. These are highly standardized products so that they can be processed very efficiently, which allows banks to offer competitive prices.
In most cases such loans are advertised as a means for fulfilling oneself wish, like a new TV set or a holiday trip – or plastic surgery. Often the advertising either mentions a great variety of things to do with this loan no particular purpose at all. I guess this approach might be a bit too general. We all have some more or less expensive wishes that we might fulfill ourselves with the help of a consumer loan. However, do you always remember your range of wishes if you see an ad for a consumer loan?
FNB went a step further. They start with a particular wish – in this case beauty and plastic surgery. Continue Reading →
April 23, 2007
by Oliver
1 Comment
Britain’s Barclays bank and ABN Amro, Netherlands largest bank, have announced their intention to merge.
Well, in the next couple of weeks we have to expect a number of analysis and comments that agree with this merger and that forecast a wave of similar mergers between banks in Europe. But let’s go back to business…
The competition within the banking industry in Europe has reached a new level in the last couple of years. In particular an increasing competition is driven by efficient foreign credit institutions that entered a particular national market as well as by existing so called non- and near banks, which extended their services. The rate of new entry varies across EU member states. Different entry strategies have been noticed in the past: Organic growth from a zero base, mergers and acquisitions, sideways moves into banking from organisations already linked with financial services, partnerships as well as joint ventures.
But it should be taken into account that differences exist between the separate business segments. DEUTSCHE BANK RESEARCH argues that “Retail markets are the most fragmented segments in EU financial services†(Deutsche Bank Research (2006), page 3). Opposite to this wholesale and money markets can be described as fully integrated. Continue Reading →
April 19, 2007
by Dagmar
Comments Off on Time for a cross-continental conference call?
The Financial Times starts to become a priceless source of ever new food for thought for me. Many of the ideas seem so obvious when I read them, but they never crossed my mind.
Today Victor Mallet comments on the “new timelords of global businessâ€. His point is that with the weight of global power moving towards the Asia-Pacific region, this time zone inevitably will start to set the timing for cross-continental conference calls.
Much has been written about the way Asia will influence and change global business. This timing issue is a side effect I never thought about before. As Victor writes, more and more European and American businesses are taken over by Chinese or Indian ones. So the headquarter moves to Asia. In addition, even those businesses still controlled from Europe or America will generate a larger proportion of their revenues in Asia-Pacific. It is all-to logic that the region where the headquarter is or where the majority of the business is done will naturally start to set the timing for meetings and conference calls. So we in the European and American business community should start to get used to a new rhythm in our working days – or nights.
However, I wonder how severe the effects really have to be. Of course, I am aware of the time constraints of today’s global business world. Sometimes it is virtually impossible to avoid nightshifts for all parties involved, especially if people from all three continents have to participate. Nevertheless, with a bit of politeness and less ignorance than in Victors examples it should often be possible to find time spots that are halfway convenient for everybody. I remember a project with our Indian subsidiary when I was working for a global player. It was common practice for us (Europeans) to schedule our conference calls in the hours before or around noon, so that our Indian colleagues (+ 4.5 hours) would have the call during their normal office hours too.
April 17, 2007
by Oliver
2 Comments
What distinguishes an “average product†from a “high class product†or service? Robert Reppa and Evan Hirsch (2007) argue that superb service is the crucial ingredient of successful high-end brands. In their previous article “The Luxury touch†REPPA and HIRSCH present four major principles to deliver customer satisfaction year after year. Continue Reading →
April 16, 2007
by Dagmar
2 Comments
We all come across various pieces of news and information every day. Most of them don’t get our attention, taken on their own. However, sometimes two seemingly unrelated pieces of information team up in our minds and suddenly become more interesting.
This just happened to me. Last weekend, during my course of Real Estate Investment Banking, we discussed the potential future development of Non Performing Loans (NPL) transactions activity in Germany. There is no doubt that NPL transactions had an unprecedented peak in Germany over the last two years. Everybody expects transaction levels to go down again. Especially, the era of mega deals with billion Euro volumes is over. The question is, however, what will happen in the medium-term. Continue Reading →
April 14, 2007
by Oliver
1 Comment
Today we have very good weather conditions in Germany. Very sunny, no clouds and the temperatures have been up to 28 degrees (82,4 F). Hence we decided to open the new barbecue season. Continue Reading →
April 12, 2007
by Oliver
Comments Off on Rebundling of the Auto Finance Industry
During the research stage for my PhD thesis I found a very interesting article by BAH (Booz Allen Hamilton). It focuses on the US auto finance industry and discusses the challenges for market players, which arrive from different industry forces, e.g. falling credit ratings for major OEMs. This article was written in 2004; however some ideas and key questions are still worth to read.
In order to structure this issue, MIECZENIKOWSKI, HIRSH and REPPA make a distinction between different types of players: OEM captives, large banks, small bank, independents, and internet lenders. For each type its current role and some key questions are presented.
Well, at least one statement did not consider all aspects. In terms of small banks the following statement can be found: Continue Reading →