How well does our system work? You can use the numerical index to check our blogs from the last big recession.
Much of the world suffered a severe recession from 2008 to 2011. During that time, we wrote more than 250 blogs using publicly available information and our Strategystreet system to project what would happen in various companies and industries who were living in those hostile environments. In 2022, we began to update each of these blogs to see what later took place and to check the quality of our conclusions. To date, we have completed the first 175 of our original blogs. You can use these updated blogs to see how well the Strategystreet system works.
The North American auto market has turned ugly. Normally, analysts expect the industry to sell about sixteen million vehicles a year, about what we sold in 2007. We seem to be on track to sell around fifteen million in 2008. Today GM, Ford and Chrysler are all losing money in the North American market. This is a market that we would define as Hostile. A Hostile market is an industry with low industry-average returns on investment for the majority of the industry’s competitors. Hostility is the result either of a fall in demand or of…
Read MoreAfter thirty years of unmitigated success in the airline industry, the smaller discount airlines are starting to fall by the wayside. Aloha, ATA and Skybus recently shut down. Others are likely to follow. Even Southwest is feeling the pressure. None of these discounters is able to fully recover the burgeoning cost of fuel. What does this really mean? It means that the legacy carriers have finally reached the point where their cost structure is low enough that the prices they charge are very difficult for the discounters to get a substantial discount against. Typically, a…
Read MoreThere were two items of interest in recent press reports. Both suggest something about our fundamental beliefs in our economic system. The first instance occurred in California. The State Insurance Commissioner asked Allstate to reduce its automobile rates in the state by nearly 16%. Allstate insures about 10% of California automobiles. The owners of these automobiles will save about $124 per car. The reductions came because the state concluded that the companies were charging too much for their services. In a separate event, the State of Arkansas ordered sixty companies who offer payday-lending services to…
Read MoreBear Stearns is gone. The explanation is in my old neighborhood. Recently I had the time to visit my old neighborhood in New York, a typical set of brownstones on the upper east side of Manhattan. I lived there for two years nearly forty years ago. When I returned there, I entered a sort of time warp. Most of the buildings looked the same. The streets looked the same. The cars, if I ignore make and slightly smaller shapes, looked very similar. The laundromat I used still resides on the corner. Across the street was…
Read MoreFor those fortunate few out there who travel to London regularly, I envy you. What I don’t envy are the hotel rates you pay, which are averaging over $600 a night in the city. We have seen hotel rates go up a great deal in the U.S., as well, over the last few years. New York is a particular example of that phenomenon. The hotel companies have finally run out of the excess capacity they had from 2000 until 2005. Occupancy rates are high and room rates are even higher. Just the time to invest…
Read MoreI ran into a neighbor today. He is an attorney who, for many years, has run a successful practice specializing in working for creditors to recover defaulted debt payments. We began talking about the economy and I, half jokingly, said “at least your business should be up in this credit crisis.” He quickly corrected me. “My business is really getting squeezed now because of this credit crisis.” The credit squeeze affects him at both ends of the market. First, in the demand for his services. His credit-extending clients have drastically reduced their lending because of…
Read MoreI was fortunate to work for some years with McKinsey and Company. As an alumnus of that organization, I receive regularly the McKinsey Quarterly. Every once in a while, the McKinsey Quarterly emails a feature called Chart Focus. A couple of weeks ago, I received one of these Chart Focus emails where McKinsey was talking about making field teams more productive. The firm has apparently done a good deal of work with large field service teams, such as technicians who install telephone lines or cable T.V. boxes, for example. The chart described the differences in…
Read MoreA recent San Francisco Chronicle article on Southwest Airlines revealed some interesting information: Southwest is the largest air carrier in the United States, measured by domestic boardings. I believe American Airlines is bigger when it comes to revenue. Southwest would have lost money in 2007, and perhaps in other years, had it not been for its fuel hedging. The company has made forward purchases of fuel for a number of years, perhaps going back to 1991. These fuel hedges reduced operating costs by enough for the company to make a profit. In fact, Southwest has…
Read MoreSprint Nextel appears to be in real trouble. A recent Wall Street Journal article offered a long analysis of the company and its current challenges. Sprint Nextel is illustrating the way market share is lost in most markets. In short, Sprint Nextel is losing the most profitable customers (post paid contract subscribers) to the top two carriers, AT&T and Verizon, as well as to the fourth ranked competitor, T-Mobile USA. Sprint Nextel’s losses in customers may be as much as 2% of these valuable customers in a quarter. These are the best customers, so the…
Read MoreOver the last few weeks, both GM and Sears, while leaders in their markets, have announced a new round of lay offs. This is a sad development to watch, especially since these lay-offs are unlikely to be the last. I have watched these two great companies stumble toward oblivion throughout my entire working life. I have been fortunate to have nearly forty years in a professional life. In my earliest years, I consulted for a company who wanted to sell to Sears. In those days, the early 70s, Sears was then what Wal-Mart is today.…
Read More- « Previous
- 1
- …
- 9
- 10
- 11