Monthly Archive for August, 2011

Norway rides wave of prosperity on back of oil

Published on August 31, 2011 in International Business and International Finance. 0 Comments Tags: , , , , .

Blessed with large petroleum reserves, as well as robust public finances, Norway’s economy has managed to largely circumvent the EU debt crisis.

Blessed with large petroleum reserves, Norway is riding a wave of prosperity brought by high oil prices and robust public finances while the rest of Europe is mired in a debt crisis.

This Scandinavian nation of 4.9 million is the biggest oil producer and exporter in western Europe, with most of the oil production taking place offshore in the North Sea. Norway was also the world’s second largest exporter of natural gas after Russia last year, when crude oil, natural gas and pipeline transport services made up nearly 50% of its exports value.

To make sure future generations also benefit from the oil resources first discovered in 1969 and which will eventually run out, Norway saves petroleum revenues in a pension fund valued at roughly $550 billion. The so-called 4% fiscal rule limits the swings in the Norwegian economy; under the rule, the government aims to spend only 4% of the pension fund annually, though the exact percentage can vary [Read more].

Northern light: Sweden’s economy ‘a little Germany’

Published on August 31, 2011 in International Business and International Finance. 0 Comments Tags: , , , , .

Sweden is one of Europe’s fastest growing economies and its success is noteworthy given
the debt woes plaguing southern Europe.

Residents of this capital radiate a sense of well-being and it’s not only because they live in a beautiful city built on 14 islands that draws comparisons to Venice. It’s also because they call home one of Europe’s fastest growing economies.

The success of this export-oriented Nordic nation is noteworthy, because it’s in stark contrast to the debt woes plaguing Greece, Portugal and other southern euro-zone countries. Sweden is a member of the European Union, but it has chosen to keep its own currency. Public debt levels are relatively low and the government expects a budget surplus this year [Read more].

Sony, Hitachi and Toshiba to Merge LCD Units

Published on August 31, 2011 in Global Strategy. 0 Comments Tags: , , , , , .

Sony, Toshiba and Hitachi announced on Wednesday that they would work with a government-backed fund to spin off and merge their liquid crystal display businesses, joining forces in the face of rising global competition.

The deal could create the world’s biggest maker of LCDs for mobile phones and cameras, with 22 percent of the market for small and
midsize screens, according to DisplaySearch.

The fund, the Innovation Network Corporation, will invest 200 billion yen ($2.6 billion) in the new company for a 70 percent stake, while the three manufacturers will equally split the other 30 percent, they said in a statement.

The Japanese government has long encouraged the nation’s manufacturers to consolidate as a way to increase their presence in global markets and better fight mounting competition from rivals like Samsung Electronics of South Korea, which is now far bigger and profitable than any single Japanese electronics maker [Source].

Japan opens $100bn fund to help firms beat yen strength

Published on August 26, 2011 in International Finance. 0 Comments Tags: , , , .

The Japanese government has announced a new $100bn (£61bn) fund to help companies combat the strength of the yen.

The Ministry of Finance said the fund will help firms expand their overseas operations and secure energy resources.

The move comes as the yen hovers near record levels against the US dollar.

A stronger currency hurts Japan’s export-dependent economy, and companies have warned that they may lose business to foreign rivals.

“We decided to compile the package to show our strong determination that we will act if current yen rises persist, or if the yen rises further,” Japan’s finance minister Yoshihiko Noda said [Source].

Can Asia surive a global economic slowdown?

Published on August 25, 2011 in Emerging Markets. 0 Comments Tags: , , , , , .

Asian markets have been gripped by fears of a slowdown in the global economy.

Weak economic data from the US coupled with the ongoing debt crisis in Europe has raised concerns that growth in the world’s two largest economic zones might slow.

Fears have been fanned further after Morgan Stanley downgraded projections for global growth and said the US and Europe were “dangerously close to recession”.

There are concerns that an uncertain economic outlook will hurt consumer demand in developed countries and affect growth in the export-dependent Asian economies.

Some of Asia’s biggest economies, such as China and Japan, rely heavily on demand from the US and Europe to boost economic growth [Source].

Google’s Strategic Mistakes Drove Motorola Buy

Published on August 25, 2011 in Global Strategy. 0 Comments Tags: , .

Google’s USD$12.5 billion purchase of Motorola Mobility has set the technology and investing worlds aflutter, with much of the commentary positioning it as a play by Google for Motorola’s strong IP portfolio. But a single point of focus is incorrect and misses a bigger point: The MMI purchase is the result of Google’s miscalculations about the way value is captured in mobile computing. These strategic missteps placed Google in a position of weakness and forced it into a costly and desperate move.

When it took its approach to mobile software, Google made a big bet that smartphones and tablets were sufficiently mature and thus could be built in a way that didn’t require Google owning all points of the value chain. For the last year it seemed that Google bet right. Android was very quickly adopted by licensees to the point that it achieved nearly 50% share in smartphone shipments last quarter.

However, lately, cracks began to appear in the strategy. Issues with intellectual property in Android caused some licensees to have to pay royalties to patent holders, increasing the cost. Fragmentation took hold where some versions of the software were used by some licensees on some products without the option or incentive to upgrade. Finally, some vendors modified the software resulting in missing features or inconsistent user experiences — even to the extent that Google’s own services were omitted [Source].

Manchester United Picks Singapore IPO Over Hong Kong

Published on August 25, 2011 in Global Strategy. 0 Comments Tags: , , .

Manchester United, is preparing to sell shares in an initial public offering on the Singapore exchange later this year, a person with direct knowledge of the plan said. Manchester United picked the Asian market for the share sale because many of its fans are now based in the region [Source].

The club, which is controlled by the Glazer family, owners of the Tampa Bay Buccaneers of the National Football League, might raise about $1 billion in the share sale, said the person, who declined to be identified before the details of the sale were made public.

Singapore beat Hong Kong to lure the initial stock sale of record 19-time English soccer champion Manchester United Ltd. in part by assuring a speedier approval process, bankers with knowledge of the matter said.

Singapore Exchanges Chief Executive Officer Magnus Bocker’s push to lure United is a sign of increased competition between the city-state and Hong Kong for IPOs by global brands. Hong Kong, whose market capitalization is more than four times that of Singapore, this year hosted offerings by Prada SpA, Glencore International Plc and Samsonite International SA, extending its lead as Asia’s premier venue for IPOs [Source].

Designing Around Collaboration and Mobility

Published on August 25, 2011 in Ranting and Raving. 0 Comments Tags: .

Technology shift sparks a rethinking of conventional office space.

With mobile devices invading the workplace and more workers telecommuting, many companies—and the design firms that serve them—are rapidly changing their thinking about conventional office space.

Cubicles are passé; flexible spaces that allow employees to log in, collaborate, and hit the road are all the rage. The goal is to support the mobile workforce, increase the opportunities to interact, and save money by using space more efficiently [Photo Gallery: Innovations in office design].

Why Coca Cola Should Raise Prices

Published on August 25, 2011 in Global Strategy. 0 Comments Tags: .

Despite its flat pricing in the U.S., Coke has kept profits growing by steadily increasing sales volume. Coke’s recent Q2 financial results reveal 7.5% volume growth in Continental Europe, and sales of my personal favorite—Coke Zero—rocketed by 15%. Coca Cola is the number one U.S. soft drink, with a 17% share.

Last year Beverage Digest reported that Diet Coke (9.9% share) surpassed Pepsi (9.5% share) to become the industry’s number two brand. Remember those famous “Pepsi Challenge” commercials where Pepsi confidently encouraged consumers to make their buying decisions after sampling both Pepsi and Coke? Well, the people have spoken: Coke is the clear winner [Read more].

In Silicon Valley, the Night Is Still Young

Published on August 24, 2011 in High Tech & Media. 0 Comments Tags: .

LET the rest of the country worry about a double-dip recession. Tech land, stretching from San Jose to San Francisco, is in a time warp, and times here are still flush.

Even now, technology types in their 20s and 30s are dropping a million-plus each on modest ranch houses in Palo Alto in Silicon Valley and Victorian duplexes in San Francisco, and home prices in some parts have jumped nearly 50 percent in the last six months.

Jobs — good, six-figure jobs, with perks like free haircuts and lessons on how to create the next start-up company — are here for the taking, at least for software engineers.

And for anyone with a decent idea and the drive to start a company, $100,000 to get it off the ground is easy to come by [Source].