U.S. Anti-Trust from the U.S. Government

Mergers and acquisitions are two different ways of bringing organizations together.  In a merger two entities are brought together and combined to become one larger entity.  In an acquisition, one entity transfers its control to another but may still act independently.  Prior to these acts being finalized for entities acting within the United States, there must be a review and acknowledgement from the Antitrust Division, the Federal Trade Commission and the Department of Justice all enforcing federal anti-trust laws. To gain more information on mergers and acquisitions being considered within the United States is at the Federal Register.  This publication is created and printed by the Government Printing Office which also includes information for the National Archives and Records Administration.  According to the webpage for the Federal Register, it is the “official daily publication for rules, proposed rules, and notices of Federal agencies and organizations, as well as executive orders and other presidential documents. It is updated daily by 6 a.m. and is published Monday through Friday, except Federal holidays.”  When making business decisions, it is important to have the most up to date information available when considering purchases from either stock or companies.  This publication is just one of the many ways to acquire information relevant to those decisions. 

Marriott Corporation In India

 Entering foreign markets is not a new phenomenon for Marriott International.  For the last 53 years Marriott has been generating growth in the hotel industry.  Marriott actually owns few hotels, but adds its name through franchising and licensing agreements.  The Pune Marriott Hotel & Convention Centre will be located in Pune near Mumbai, India.  This is the 500^th Marriott Hotel being opened by the corporation.  You will recall that Mumbai, India, a tourist area, had a major bombing a few years ago.  The Marriott organization announced that it intends to quadruple its inventory of hotels in India over the next three years and that India has proven to be a successful market for the Marriott Corporation.  In determining where growth should be in the hotel industry there are several factors to consider.  There is enormous growth in the business world of India making a name brand such as Marriott something to be sought out when making a business trip to another culture whether you are an American or European, etc.  India also offers a wealth of history and tourist attractions bringing customers from a myriad of cultures for vacations as well as business.  In keeping with the cultural differences, the organization has brought both together to make each feel comfortable in this environment.  During the celebration opening the new hotel used a traditional lighting ceremony, music and dance performances native to the Indian culture.  The rich fabrics of India are used throughout the hotel.  But the quality of the Marriott organization is familiar to those that use Marriott Hotels throughout the world.  The hotel ownership is Indian business owners having previous ties to this community and knowledge of institutions in India.  Marriott also encourages community and is a major sponsor of many charities involving children.  Leprosy continues to be a challenge that India deals with and prior to the opening of this hotel, another Marriott hotel became sponsors of a local orphanage in Chennai that has children and parents suffering from leprosy.  The hotel staff began Rising Star Outreach, a non-profit organization to provide schooling, housing, sanitation and good nutrition to people with Leprosy in India.  The road to India is being paved with good works as well as offering jobs and services to the local community. 

Racing as an Entrepreneur

Ever consider F1 racing in Monaco?  This is one of the oldest automobile races in the world.  It is also one of the most expensive places to have a short vacation.  There is the flight to get to this small country near Nice, France and the need for hotel accommodations.  How about being in chilly Siberia and attempting to run the Daytona 500 in sunny Florida?  These are possibilities thanks to entrepreneurs sitting in their computer rooms, licensing fees and a few keystrokes to encourage those racing enthusiasts that have full time jobs and responsibilities.  Road racing is an expensive hobby and one that requires a team.  Tough for the average working person to consider however with a little initiative once the internet was a reality it has become easy to do.  Simulators have been used for training opportunities but now are available for recreation.  Small fees are needed to enter races after building your car.  There is an industry for those that create the virtual autos and teams if the driver isn’t particularly skilled.  There are fantasy haulers to bring the virtual autos to the racetrack.  Another industry associated with this sport is viewing the races on the computer where you can sit in the stands of your own computer room and cheer on your loved ones even though you are sitting in another state.  Broadcasters tune in via radio/computer set ups to cars to interview the drivers.  As shown in recent news, there is still risk associated with the creation of an internet business.  Entrepreneurs have risk.  While the textbook discusses storefronts being beneficial to small industries, the internet has opened many opportunities without ever leaving the living room to include shopping, dating and racing. 

Looking Ahead to the G20 Summit

It appears that next week is going to be a very busy week for Korean President Lee Myung-bak who will be hosting the upcoming G20 Summit in Seoul.  In the Korea Herald today it is being reported that he will talk with U.S. President Obama and the Chinese President Hu Jintao for final coordination of the agenda for the G20 Summit and one of those agenda items will be the currency exchange rates.  The article reports that there are criticisms from China and Brazil at the latest U.S. stimulus plan adding six hundred billion dollars of long term treasury bonds into the U.S. economy.  The fear is that this will create a sharp drop in the dollar and create a flood of capital inflows into emerging markets.  President Lee hopes to mediate this issue with the Chinese and U.S. President prior to the beginning of the G20 Summit.  China currently holds many treasury securities.  There is much speculation about what China could do to retain its current economic standing.  Possibly they could purchase some of the new treasury securities adding to the large debt it currently holds.  If the Chinese Government was to revalue its currency, this would create havoc with the U.S. economy.  Additional items that President Lee will address during the summit is economic cooperation with the Brazilian President for a highway construction deal in Brazil, he will meet with Russian President and the Australian Prime Minister to assist in the on-going negotiations for a free trade deal between Korea and Australia.  Also attending this meeting will be the U.N. Secretary General.  While President Lee meets with the Russian President, there will be talks on economic cooperation involving energy and natural resources, modernization efforts and lastly the denuclearization of North Korea.  Last week there was a free trade deal signed between Korea and the Economic Union.  There will be additional meetings to work towards ratifying this deal.  Lastly will be negotiations between Korea and France to retrieve “Oegyujanggak” which are books containing records of the Josean dynasty of Korea which were found to be taken during a French invasion in 1866.  These documents have since turned up in the National Library of France.  This blog does not have a complete agenda of all items to be discussed at the upcoming G20 Summit but it shows a wide array of items to show how global the world has become.   Upcoming highways in Brazil to retrieving historical documents taken during 1866 found in a library.  These world leaders have lots to discuss to maintain an economy and a society for all people to thrive in.  In looking at world leaders, it isn’t hard to believe that when taking office a nation’s head of state whether he is called President of Prime Minister has a full head of colored hair which can easily go grey from the weight of these responsibilities. 

Investing in the Future

Here I am blogging about chapters 5 and 6 of our text book.  The subject of chapter 5 is about trading internationally and chapter 6 covers investing abroad.  James Hagerty wrote in today’s Wall Street Journal in an article Dollar’s Swoon Opens Doors how opportunities are being presented for company’s abroad from the “slumping U.S. Dollar” and the “sputtering” economy.  He continues in the article saying how the weak dollar is helping Consol Energy, Inc., a Pittsburgh-based coal and natural-gas producer compete with countries such as South Africa and Australia in China.  Consol opened new offices in Asia and Switzerland through a partnership with a trading firm.  The article continues giving other examples of how the U.S. Dollar is affecting businesses worldwide both positively and negatively.  One company has begun participating in trade shows in Asia and Europe in an effort to develop its business of industrial and marine equipment.  One tool and die owner was quoted as saying that with the challenges the U.S. dollar is facing, that it gives a price advantage and that branching out globally rather than rely solely on North America for sales.  Interestingly the text discusses the ethical dilemma of Delphi Corporation and the high cost of doing business in the United States while today’s Wall Street Journal is full of stories of businesses investing in global businesses for their futures. 

Blogging into Week Three

Blogging into Week three.  I have the Wall Street Journal spread out here on the kitchen table.  On the front page is a quick blurb entitled Vital Signs with a graph showing the G-7 unemployment rate of the G-7 Nations (seven nations including U.S., Canada, Britain, France, Germany, Italy and Japan).  Last fall the rate on the graph peaked at 8.5% and today it is only down slightly.  The article compares to the early 1980’s when the rate was at 8.2% but then about nineteen years ago when today’s college freshmen being born in 1991, the rate decreased to just above 5% and then began to rise and fall again and again leading into this much higher rate. 

So what was happening in 1980?  Well, there was a U.S. led boycott of the Olympics in Moscow because of the Soviet invasion of Afghanistan.  In the United States, President Jimmy Carter introduced the Carter Doctrine in his last State of the Union address in which he noted that the United States would use force if necessary to address actions in the Persian Gulf region.  The G-7 was having their sixth meeting in Italy, marred by the death of the Japanese Prime Minister who died prior to the start of the conference.  Happily, Japan was having an economic boon during 1980.  G-7 annual meetings continue now as the G-8 with a mission for these economically well off industrialized nations to meet for an international forum.  Russia entered the group in 1997 making it the G-8.  Vital Signs does not include employment statistics for that nation.  In June 2010 a quick Google search shows that the Russian unemployment rate was published at 6.80. 

Recapping the international changes from 1980 to 2010 would be much too time consuming but notably from the comments in the beginning paragraph, Afghanistan is still in flux although the Russian presence is very different.  The United States now has a presence there along with United Nations troops.  This last weekend there was an election in Afghanistan with voters being intimidated by insurgents.  It will be weeks before the results are known. 

WSJ: Cuba Unveils Huge Layoffs In Tile Toward Free Market

The one thing that is constant is change.  So correct.  Times are changing.  Cuban President Raul Castro has announced that a portion of government workers are being “laid off” to encourage more private sector jobs.  In doing this, he also must now consider what industries there are that will absorb these workers.  Currently Cuba has a list of 124 jobs that are “authorized” as self-employment.  They include toy repairer, music teacher and piñata salesman.  There is still need for policy changes within the government.   While it is permissible to manufacture furniture, mass production is discouraged.  Instead there must be an order for a piece of furniture.  Cuba has been economically supplemented by Venezuela but that country may have difficulties with keeping us this practice.  Industries that Cuba is looking to consider include oil, tourism and biotechnology.  The information that I am including in this blog comes from the Wall Street Journal (an article written by Jose De Cordora and Nicholas Casey on September 14, 2010).  Cubans realize that the world is changing and that economically they cannot be left as the only nation not moving forward in globalization.  Could Cuba be one of those nations for Vera Wang and a renewed tourist location for destination weddings? 

WSJ: Vera Wang's Idea of Empire: Marry High, Low, In Between

In my first International Management blog written after seeing “Bride Wars” again, I was happy to read about Vera Wang in today’s Wall Street Journal.  It is Fashion Week in New York City.  Writer Ray A. Smith discusses in the WSJ Marketplace section today “Vera Wang’s Idea of Empire…”  The article gives some tiny pieces of biographical information on Ms. Wang.  She is 61 with a 20 year closely held company having a three-tiered retail strategy in several locations throughout the United States and some in countries such as the Ukraine, Saudi Arabia and Thailand.  In all there are a total of thirteen international locations.   One year ago, Mario Grauso joined Vera Wang as President (giving Vera more freedom for design) and the company gave a five year plan to expand in Asia and Europe as well as creating more affordable products.  The Wall Street Journal article was to provide information on Vera Wang and the decision to design for David’s Bridal, a three hundred store chain, mainly in the U.S.  David’s Bridal does have a few international locations. The line being created for David’s Bridal will be sold at prices ranging from six hundred dollars to fourteen hundred dollars.   Vera Wang has created other affordable products for retailers such as Kohl’s however this is a huge departure for Ms. Wang who has designed wedding gowns for such notable figures as Chelsea Clinton, Hillary Duff and Alicia Keyes (these most recently).

Mr. Smith further describes in this article a three-tiered retail strategy of products in a luxury line, a mid-priced and then a discount line.  He talks about how this strategy can be “tricky” by the fear of tarnishing a designer’s image.  The article concludes with the company’s plans to further expand the luxury locations and its dealings with celebrities. 

In conclusion, readers will need to stay tuned to find the additional locations that will favor Vera Wang’s styles.  As stated previously, she has thirteen international locations but only one in Asia (Taiwan) and none in Russia.  David’s Bridal only has locations in four countries but also has none in Asia or Russia.  There are huge cultural differences for weddings in many parts of the world and both Vera Wang and David’s would need to become very educated on those markets and strategize to meet those needs to become successful.