Shopping Spree Continues

1
How to Compete in a Chaotic Economy
2
Hyper-Competition

• Speed
• Scissors
• People

3
Shockwaves...
4
Market Wont Wait for Govt

• Private Speeds Ahead
• Stem cells/genomics
• stock-holding soars
• over 75 of IBM rev. from products less than 2
  yrs old

• Government Waits
• Litigation reform?
• UK join EMU?
• China joins WTO, after 14 years?

5
Even White Collars Itch
6
Scissors Economy

• wipes out middleman
• 10,000 travel agents close since 1999 gt25
• stomps on prices
• MaBell cuts .05/min
• Japans price destruction
• bashed entry barriers
• is automatic pilot safe?
• winners curse

7
More Room in Coach, Less Room for Agents

• Airlines slash commissions to 0
• Carnival cuts air commissions 50, from 10 to 5

8
Whos Got Mail
Money!
Only the credit-worthy survive the crunch Heavy
corporate debt
9
Can You Find the Money?

• More trading partners, more members more
  complex money flows
• Post-Enron, Wall St. demands tight risk controls

10
Streamline Credit Operations, Dont Tie Up Your
Customers!

• Good technology with rule-based decisions let you
  extend credit quickly
• Let customers achieve their potential
• But dont let clients get used to late payments

11
If You Fumble the Back Office

• Nike drops 20 in just a few hours
• Where are the shoes?
• No more microfiche in bookstores

12
If You Fumble the Money

• WorldCom loses 99 of its value in 2002 (vs. 30
  for its competitors)
• Failed to consolidate billings despite
  acquisition spree
• Z-Tel takes over back office

13
Who Controls Inventory Best? Who Gets the Float?

• Michael Dell doesnt want to touch your computer!
  
• Thats why his P/E is 36, instead of 21 for HP

14
Stand and Deliveron Time

• Harry Lee of Tal Apparel Sits in Hong Kong, to
  Serve JCPenney
• England Furniture of Tennessee Will Build You a
  Custom Sofa in a few weeksnot months!

15
Blue-Light Special Goes Out, But Bentonville
Shines Bright

• WalMarts inventory/revenue watch. P/E 30 v. 20
  avg
• Band-aids and fish
• Li Fung Fast, Global EntrepreneurialHK
  Style
• 8000 suppliers 40 countries. No leaks. P/E
  23 vs. 9 avg

16
The Light Economy --Brains vs. Brawn
Yoda
17
Light Economy

• US economy weighs the same as it did 100 years
  ago, but is worth 20 time more. Fiber optics and
  wireless replace copper
• Just-in-time inventory, bar codes, and satellites
  slice delivery costs
• This is not your fathers SP! 40 are tech,
  finance, health vs. 8 in 1964.
• Intel/ Home Depot Go In -- Chevron/Sears Out!

18
Two Myths

• The New Economy is good for everyone
• Its all about gadgets and gizmos

19
Creative Destruction of Jobs
20
The Truth About Cows!
21
On the Waterfront

• 24 hour turnaround
• Ships/trains/trucks

22
Thank Heaven for Technology
23
How Many 12 Year Olds Can Explain What a Modem
Does?

• 92 percent

24
How Many Business Executives Can Explain What a
Modem Is?

• 22 percent

25
Todays Kids
26
1950s Kid
27
1950s Kids Make Good
28
What Does Wall Street Want?

• Trusted Brand Microsoft means software and
  Google means search
• Build Alliances, not Necessarily Mergers --
  COMPAQ HP ??
• Manage Expectations Nike Punished
• Service How Good Are Call Centers?
• Relentless Focus on Shareholder Value
• Sayings of Chairman Jack
• Destroyyourbusiness.com

29
Short Hours!
30
Nokias Roots?
31
(Change) x (People) Opportunity

• US Population Grows by 58 million by 2025 --
  China Adds 258 million!
• China has more wireless phones than US! (130m)
• Most People Outside US/Europe Have Not Yet Placed
  a Telephone Call -- Soon Well See Palm Pilots
  for Peasants
• US, Europe and Japan Grow Old
• More Golf Courses than McDonalds!

32
Productivity Keeps Down Labor Costs
33
Goodbye Deflation!
34
Whose Prices Are Still Falling?

• Computers 22
• Televisions -11
• Toys 9
• Long distance 6
• Womens nightwear 4
• Mens shorts 3

35
We Can Beat Our FOEs

• Federal Reserve Hiked Rates Too Much
• OPEC Tightened the Noose
• Euro Fell Too Far

36
Consumers Literally Drive Economy
37
Our National SportShopping
38
Inventories No Longer Piling Up
39
Manufacturing Service Optimism Rise
40
High Oil Takes From Consumers
41
Housing Keeps Hope Alive
42
Robust Construction Spending
43
Hope for U.S. Jobs
44
Europes Jobless Inches Up From 2001 Lows
45
Japan Finally Looks Better
46
Mexico Also Hopes For U.S. Rebound
47
Mid-East Tensions Rage, But Oil Will Follow the
World Economy
48
Biggest Victim of Scissors Economy?
49
China Lives in a Material World
50
Ketchup or Salsa?
51
On the Move

• Minorities take 17 of all trips vs. 12 in 1997
• Total U.S. travel 1
• African-Americans 16
• Hispanics 11
• Asian-Americans 7

52
Mongolian Beef Dog Biscuits!
53
American Pie
54
Without Education, What Jobs Can Our Children
Hold?
55
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