Transcript Competing in a Chaotic Economy

Competing in a
Chaotic Economy
Todd Buchholz
Competing in a Chaotic Economy
Todd Buchholz
www.toddbuchholz.com
@Rushbook
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Who’s Faster? Who’s Bigger?
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3
Hyper-Competition
Speed
 Scissors
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Age of Anxiety
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New Silk Routes
RANK
1999
Sinopec
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Sabic
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Formosa Pl 47
2005
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Middle East Chemical Plants
quadruple 1990-2005
GCC $35b trade with Asia
GCC FTA deals with China,
India, NZ
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6
Free Trade Backlash:
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Colombia, Panama FTA
Sovereign Wealth Fears
“Buy America?”
India v. Steel; Russia v.
Cars and Chickens;
Argentina v. auto parts;
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Who’s This?
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A Miracle of the Market?
Are We All Greek?
Beyond the Safety Net?
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Pensions: Defined Benefit
The Golden Age of Unions is gone
The Nanny State is broke and broken
Who’s Broke Now?
“For the next 30 years, we all work
for the Germans”
Who do we work for?
The High Price of a Free
Lunch?
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Taking from Peter…
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A.P. Giannini: Gladiator of
Finance
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Compete on Expertise and
Service
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How many live in
Arizona?
Two languages
Non-banker hours
“women’s
department” 3 of
first 11 loans to
women
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Solutions, Not Slices
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Must supply complete
solutions – from
concept thru the life of
the service or product
Fedex: not just
envelopes. The
plane is your
warehouse.
Inventory/Sales falls
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No Excuses!
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We Can Beat Our FOE’s
• Federal Reserve Hiked Rates
Too Much
• OPEC Tightened the Noose
• Euro Fell Too Far
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Back to the ’70s?
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Is Inflation Baked in the Cake?
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Who’s Covered?
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Consumers Are Tired – of Not
Spending
Any Job Hope?
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Does China Save Capitalism?
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China Aging
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New Opportunities
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The Race for IQ Points
1992-2002
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Stevedores
Timber
Farm
Sewing
Typesetters
-17%
-32%
-20%
-50%
-62%
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@Rushbook
Elect. Engineers
+28%
Med. Scientists
+33%
Architects
+44%
Legal Assistants
+66%
Fin. Services
+78%
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Peak Oil or Peak People?
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Petroleum
engineering
students fall 90%
since 1981
Agricultural
scientists stagnant
for 20 years
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Icebergs or Snowcones?
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Inflation
Oil Spikes vs. Oil Crashes
China Spikes vs. Crashes
Commercial R.E.
Government Debt
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Cash is still king. If you can offer better
financing, do it
Provide “solutions,” not just slices
Don’t assume runaway energy prices
Stalling growth in Europe keeps prices down
Lookout for the “Obama Rally”
Stay in touch with your customers!
• And with me @Rushbook and
www.toddbuchholz.com
Goodbye Eden, Hello RUSH
Twitter: Rushbook
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U.S. and China:
Rivals, Hyperpowers, Hype?
(c)Todd G. Buchholz 2011
By 2025: 10 New NYC’s
(McKinsey)
USA: Game NOT Over
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This Kid Is Not Chinese – But 80%
of His Toys Are!
Amazing Race
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Can developing
countries get rich
before getting old?
Can they get rich
enough to get clean?
Sales to China
(c)Todd G. Buchholz 2011
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A Beijing Resident Can Afford 10sq.ft
Feet of Housing
Great Empty Mall of China
2.3m, Defense Budget +12.7%
China.com or
China.communism?
(c)Todd G. Buchholz 2011
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What Is a Denominator?
U.S. Will Be World’s 3rd Largest Economy, Citi Says
Back to the Future?
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India used to
account for 33% of
the world's GDP;
then fell to 3%; now
may rise to 25%
India’s Promise and Challenges
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Up to 25% of the world's new
workers will be Indian (2015)
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A bigger movie market than
America and Canada
combined, 3.2 billion tickets
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Average Indian nearly 20
years younger than average
Japanese (26 vs 45)
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In recent decades, 500,000
female births have gone
missing each year due to
(illegal) sex selection
Sparks Flying
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42% of the world's poor ; 44% rural
w/o electricity
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GDP per capita will quadruple from
2007 to 2020 (Goldman Sachs)
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Tech capital Bangalore increases
office supply 6x since 2006; more
Grade-A offices than Singapore
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Losing outsource biz with higher
wages
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Inflation and GDP 8.5%; C/A 4%
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Second largest arms importer; $50
billion on defense purchases in the
last decade
Budget Vigilantes
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(c)Todd G. Buchholz 2010
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Pigou vs. Keynes
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Money
____ ______
supply
Discounts
________everywhere
__________
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The New Faces
2050
2000
9%
4%
13%
12%
53%
1%
71%
1%
12%
Black
24%
Asian
Non-Hispanic White
Hispanic
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Other
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New Businesses 1998-2010
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“I don’t know Lauder well but she keeps
sending me things” Princess Grace
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Holy NY Landmarks;
Neiman Marcus
Galleries Lafayette
Youth Dew, Patagonia
Toothfish
Shampoo; Rinse
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Pickup Trucks Trounce Cars
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+16.7 vs. 5.3% for cars
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2011 and Beyond
Ketchup or Salsa?
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Brazil Rising
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GDP is the size of
Mexico + Venezuela
+ Argentina
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Exports to China
(15%), US (10%)
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Brazilian oil
discoveries
accounted for 50% of
those made in 2010
Too Much Hype?
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In 10 years, 10% of Brazil's
population rescued from
poverty, more than population
of NY state
“Hot money” Real +40% since
2006, commodity speculation,
high rates, inflation
Imports +100%/exports +5%
Household income/debt 25%
GDP growth 4%, from 7.5%
Budget Vigilantes
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(c)Todd G. Buchholz 2010
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AFRICA RISING
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Pick Up a Club
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No “Skin in the Game”
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“trust me” paper
Avoid Basel – new
paper after LTCM
Avalanche of defaults,
downgrades, CDS,
mark-to-market,
pension exits
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World Trade Pumps Up
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Ring of Fire: Debts and Deficits
Avoid Commodity Hell
New Markets
Innovation
Service
Branding
Cost Control
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At the Pump – In Your Face
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Five Missions
Understand your members!
Identify your most profitable products
Cross-sell and up-sell products that fit your
client/members best
Reduce the “cost-to-serve” and “hassle factors”
Adopt technology that makes clients and employees more
productive, and happier
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Customer Focus
cross-selling concierge
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Who’s Supporting Whom?
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Real Estate Looking for Bottom
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Private Thrift vs. Gov’t Plunder
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