03 lbs last week

ContentCHUKHAREVA Evgeniia

NEXT WEEK & EXAM

LAST WEEK What do you remember? STARBUCKS Business Case PETER DRUCKER 5) Social impacts

6) Paradigms 7) InformationLauder Business SchoolPage 1

PBA 2009/2010

Next weekNext week Chapter 8 & 9 PD GE Business case

Lauder Business SchoolPage 2

PBA 2009/2010

Last week What do you remember


PBA 2009/2010

Last weekKey issues Business school Fallacy COPAFITH LS Standard Oil & Monopoly Specialization 1930 birth of Marketing Management is about human beings = Emotions Goal definition


PBA 2009/2010

Chapter 2: Dimensions

Mission

Business must always in every decision and action put economic performance first

Do you think this is the general practice?

Lauder Business School

PBA 2009/2010 5 Page

Chapter 3: Objectives

Mission: 1

A business is: An organization to make a profit.

PD: There is only one valid definition of the business purpose: TO CREATE A CUSTOMER EV: TO CREATE AND MAINTAIN A CUSTOMER


PBA 2009/2010 6 Page

Chapter 3: Objectives

Mission: 2TO CREATE AND MAINTAIN THE CUSTOMER

Customer Profitability over time:40 30 20 10 0 1 -10 year 2 3 4 5 6 7 8

Price Premium Referrals Reduced Operating Cost Increased Purchases Base Profit


Customer Profit / Loss

PBA 2009/2010 7 Page

Last weekMain issue 1 is: Create serve and maintain the customer


PBA 2009/2010

Create serve and maintain the customerCheese by Willem Elsschot:

Page 9


PBA 2009/2010

Create serve and maintain the customerChesse by Willem Elsschot: I will never eat another wedge of Edam and think that it is just cheese. Its red rind and yellow-orange flesh have been forever altered, especially after reading Willem Elsschot's Cheese. Originally written in Dutch, Cheese has been recently translated by Paul Vincent, who has also translated another of Elsschot's novels as well as other Dutch writers. Elsschot, a pseudonym for successful Flemish advertiser Alfons de Ridder, wrote Cheese in two weeks. It can be read in two days, perhaps less. And, like any good cheese, its aroma and flavor lingers.

Cheese opens ostensibly as a letter from Frans Laarmans to an unnamed correspondent. Laarmans has decided to leave his position at the General Marine and Shipping Company as a clerk, a job in which "there's nothing really sacred about." Through Van Schoonbeke, a recent acquaintance who has introduced Laarmans to a circle of businessmen, he is offered the sales district of Belgium and the Grand Duchy of Luxembourg, a country smaller than its name. He will sell cheese, tons of it, even though he has no sales experience.

Upon his wife's advice, Laarmans asks his brother, a doctor, to give him a certificate for a leave of absence due to medical reasons. His brother decides that "neurosis" will enable him to take three months off and still have the ability to return to his old job should the cheese business venture fail. Laarmans begins his business, which-after neurotic hours of agonizing over a name--he calls General Antwerp Food Products Association, or GAFPA. But, before he can start selling cheese, he has to set up his office. For the ensuing weeks, he tracks down office supplies--second-hand desks, typewriters, a telephone--and gets his office arranged. He places an ad for salesmen, but he never sells cheese, a product that he eventually admits his dislike for. He finally makes a small sale to the businessmen in Von Schoonbeke's circle.

It turns out that his reason for leave of absence, neurosis, is an apt description of Laarmans. He cannot sell cheese because he is afraid of what people will think of him. This is ably illustrated in when Laarmans tries to make his first sale: "I can't go charging in while all those customers are there and bring the whole business to a halt while hold forth about my full-fat cheese. Because then it will turn into a lecture. But if I don't launch straight into it, then perhaps they'll ask, 'How can I help you, sir?' And the roles will be reversed." He doesn't quite make it into the shop. Instead, he skips down to a bar and has a few drinks. Eventually, he makes a small sale of two cases to the cheeseshop, leaving him still with tons in storage.

Page 10


PBA 2009/2010

Create serve and maintain the customerChesse by Willem Elsschot: Laarmans is elected vice-president of a cheese association, a job he doesn't want due to the likely publicity it will attract. He has tried to keep his moonlighting as a cheese man secret so that he doesn't loose his job. But as inept as cheese man he is, he is even more so as a delegate to the Department of Trade. With four other representatives, Laarmans is expected to convince the Director-General to lower import duties. Laarmans' neurotic panic will be familiar to anyone who's ever felt surrounded by people who know their jobs better than you do: "All four of them respected names in cheese, people with a past, a cheese pedigree, people with authority, money. And into their midst had strayed Frans Laarmans who knew as much about cheese as about chemistry. What had these disgusting cheeseworms done to this poor man? Suddenly my chair slid backward, as though of its own accord. I stood up and, looking furiously at the four cheesified dolts, declared loudly that I had had enough." With this outburst, Laarmans unwittingly intimidates the Director-General into lowering the duty. I especially love the use of "cheesified," a neologism that enriches the English language. If the Dutch language can add more amusing words to English, as it has with pinky, poppycock and cookie, then we need more translations of Dutch fiction.

Paul Vincent is an able translator. He translates Elsschot economically and tersely with relatively few Briticisms, and those that do appear shouldn't distract American readers whatsoever. In fact, it heightens the realism. Anytime I've heard the Dutch speak English, they say lorry for truck and cheek for guts.

In an odd move, Vincent places "The Author's Original Preface" after the novel's last chapter, giving the impression of a modernistic coda. This "Preface" is Elsschot's treatise on style and tells an unusual fable about blue skies and clouds. While interesting to writers, it will leave most readers confused.

Cheese is one of the very few comic novels that is able to escape its era and its culture. Though written almost seventy years ago, its situations are as fresh as today's office place. I suspect that there is a bit of Laarmans in everyone. Everyone eventually daydreams about leaving our daily jobs and making it on our own. Cheese may be a light alternative to those serious, weighty tomes everyone's dragging along on vacation. It could also be a perfect read the week after the sunburn peels. A succinct comic satire, its dry humor should be cherished and kept within easy reach on anyone's bookshelf. So many comic novels, and comic writings in general, feel as if they were plastic-wrapped American singles. Cheese is a full-fat Edam.

Page 11


PBA 2009/2010

Last week Not yet discussed


PBA 2009/2010

Chapter 4: Non Profits

Effective use of the board:THE AUDIT COMMITTEE

Ex. Barings Ex. Arthur Andersen

Etc.

NOBODY WANTS TO HEAR BAD NEWS!!!

NOBODY EVER MADE A CAREER BY PROVIDING BAD NEWS!!!


PBA 2009/2010 13 Page


Effective use of the board:THE BIG FIVE

Firm PricewaterhouseCoopers Ernst & Young Deloitte Touche Tohmatsu KPMG

Revenues 2008 Employees $26.2bn 163.000 $21.4bn 144.000 $27.4bn 165.000 $22.7bn 135.000


PBA 2009/2010 14 Page


Training training trainingAppraisal:

Set your goals each year , apraise yourself against those goals and resign when failing to meet these goals for 2 years in a row

Question? Why will this never work with profit oriented organizations


PBA 2009/2010 15 Page

Last weekMain issue 2 is: Accountability


PBA 2009/2010

Accountability 1: Bank of America1 Wal-Mart Stores 2 Exxon Mobil 3 General Motors 4 Chevron 5 ConocoPhillips 6 General Electric 7 Ford Motor 8 Citigroup 9 Bank of America Corp.Lauder Business SchoolPage 17

PBA 2009/2010

Accountability: Bank of AmericaCEO Kenneth Lewis

120 bln. US Loss after take over of Merrill Lynch

5-Year Compensation Total $165 mln.Lauder Business School Merrill LynchPage 18

PBA 2009/2010

Accountability 2: EDF & Constellation


PBA 2009/2010

Accountability 2: EDF & ConstellationThe facts: 2 years ago EDF bought Constellation energy for 4,5 bln. Additional balance sheet reserves last 2 years 1.1 bln. Last month Constellation exercises PUT OPTION to sell non nuclear assets to EDF for 1.4 bln.; however real value is only 700 mln. Henry Proglio became last year CEO of EDF and has been in this role always extremely skeptical about the deal Accountability: Mr. Proglio was Chairman of the EDF strategic commission responsible for buying Constellation in the first place The 3 Envelops approachLauder Business SchoolPage 20

PBA 2009/2010

Last weekMain issue 3 is: Innovation:

Not to innovate is the largest single reason for the decline of existing organizations


PBA 2009/2010

Innovation: top 100 Times magazine1901 PAPER CLIP The design is perfect. There's been little improvement since Norwegian Johan Vaaler got his American patent in 1901. Only about 20% are actually used to clip papers.

1902 TEDDY BEAR Brooklyn candy-store owner and his wife introduced a plush brown bear in 1902. President "Teddy" Rooseveit lent his nickname. Early bears are now so valuable that a 1904 Steiff Teddy went for $166,000 at a 1994 Christie's auction.


PBA 2009/2010

Innovation: top 100 Times magazine1903 SAFETY RAZOR King Gillette created the first safety in 1903. He saved millions of necks, and grateful shavers made him fantastically rich. He supplied 3 million razors and 36 million blades to the American troops in World War I.

1904 ICE CREAM CONE Americans did not start eating ice cream out of cones until 1904-at the world's fair in St. Louis, Mo. The Smithsonian recognizes Abe Doumar, a Lebanese immigrant, as the inventor. He rolled a waffle from one stall and put ice cream in it from another and sold the combination. He then created a machine for producing the cone.


PBA 2009/2010

1908 Model T 1908, by Henry Ford

1910 AUTOMATIC WASHING MACHINE Among those credited with making electric washing machines around 1910 was Alva J. Fisher. The machines used wringers to remove water from clothes. Truly automatic machines appeared in the 1930s. An early ad for a GE washer read, "If every father did the family washing next Monday, there would be an electric washing machine in every home by Saturday night. 1910 NEON In 1910 a French scientist named Georges Claude applied an electrical charge to a tube filled with neon gas (as opposed to a filament in a vacuum) and created a new kind of illumination. Car dealers did the rest.

1912 Vitamins 1912, by scientists Frederick Hopkins and Casimir Funk Lauder Business SchoolPage 24

PBA 2009/2010

Innovation: top 100 Times magazine1913 ZIPPER Invented in 1913 by Swedish immigrant Gideon Sundback at Universal Fastener Co. in Pennsylvania. B.F. Goodrich first used the word to refer to a fastener on a pair of its galoshes; it was not used in clothes until the 1930s. By 1941 zippers beat the pants off buttons in the Battle of the Fly. 1916 SNEAKERS While many people, including the 13th century Indians of the Amazon, can lay claim to inventing sneakers, what really launched the boom was the arrival in 1916 of Keds, shoes with canvas uppers and rubber soles made by the U.S. Rubber Co.

1921 BAND-AID Johnson & Johnson sold $3 000 worth of handmade Band-Aids in 1921, the year it introduced them. A company cotton buyer, Earle Dickson, had created them at home for his accident-prone wife. He then convinced his boss that the strips had merit.


PBA 2009/2010

Innovation: top 100 Times magazine1924 Kleenex 1924, first disposable tissue developed by Kimberly-Clark 1926 POP-UP-TOASTER In 1926 the Waters Genter Co. (later called Toastmaster) introduced the first pop-up toaster. Master mechanic Charles Strite had patented the spring-loaded automatic-toaster design in 1919. Although it cost $12.40, the Toastmaster quickly displaced the manual electric toaster that cost only $1. 1928 Penicillin 1928, developed and first tested by Alexander Fleming

1928 PEANUT BUTTER Peanut butter appeared in the late 19th century. Spoilage was a problem, however, so the first popular brand, Peter Pan, was introduced by Swift Packing Co. in 1928. It was licensed from Joseph L. Rosefield, who figured out how to create smooth, long-lasting peanut butter. Rosefield formed his own company in 1933 and created Skippy. Lauder Business SchoolPage 26

PBA 2009/2010

Innovation: top 100 Times magazine1928 Domestic Air Conditioner 1928, by Willis Carrier. Model name: the Weathermaker

1929 TELEVISION A Russian-born American scientist, Vladimir K. Zworykin, demonstrated the first practical TV in 1929. But it took RCA, which owned NBC, 10 years before making the first national broadcast and producing its first line of TVs. In 1951 (the year I Love Lucy debuted) the networks extended broadcasting from the Northeast to the whole country.


PBA 2009/2010

Innovation: top 100 Times magazine1930 SLICED BREAD What did people say before "the best thing since sliced bread"? Wonder Bread, so associated with the 1950's and better food through science, introduced the first packaged, sliced bread in 1930. The Wonder Bread brand (owned by Interstate Bakeries is still first in the U.S. 1930 Scotch Tape 1930 developed by Richard Drew at 3M

1930 Flashbulb 1930, as Photoflash lamps by General Electric


PBA 2009/2010

Innovation: top 100 Times magazine1930 REFRIGERATOR With the introduction of small electric motors and nontoxic Freon in the 1930s, refrigerators migrated from industry to home, replacing iceboxes and gaspowered refrigerators. In 1927 GE established an electricrefrigeration department, and in 1931 Sears sold its first affordable refrigerator for $137.50.


PBA 2009/2010

Innovation: top 100 Times magazine1931 Alka-Seltzer 1931, by Miles Laboratory (later Bayer Corp.)

1931 Electric Razor 1931, by Col. Jacob Schick, who sold 3,000 the first year

1931 Stereo System 1931, by Alan Blumlein, working for Britain's EMI


PBA 2009/2010

Innovation: top 100 Times magazine1931 Tampons 1931, developed by Earl Haas and made by Tampax

1933 DETERGENTS By adding surfactants-two-molecule, synthetic surface-active agentsto soap granules, Procter & Gamble created a washday miracle. Dreft was first, in 1933. The big gun, Tide, arrived in 1949.


PBA 2009/2010

Innovation: top 100 Times magazine1935 Tape Recorder 1935, at Germany's AEG

1935 Kodachrome Film 1935, brilliant color film based on invention by two young classical musicians

1337 Blender 1937, from an idea by big-band leader Fred Waring

1937 Releasable Ski Binding 1937, by ski racer Hjalmar Hvam after breaking his leg

Page 32


PBA 2009/2010

Innovation: top 100 Times magazine1938 Ballpoint Pen 1938, designed by Hungarians Ladislao and Georg Biro

1938 Teflon 1938, invented as coating by DuPont

1939 Jet Engine 1939 and 1941, independently by German inventor Hans von Ohain and Frank Whittle

Page 33


PBA 2009/2010

Innovation: top 100 Times magazine1940 NYLON STOCKINGS Nylon was created in 1938 DuPont found the killer app in 1940 when the first nylon stockings went on sale. Women gladly paid $1.15 a pair, twice the price of silk stockings.

1940 Cake Mix 1940s, by General Mills and Pillsbury Co


PBA 2009/2010

Innovation: top 100 Times magazine1946 Tupperware 1946, by Earl Tupper

1948 Long-Playing Record 1948, by Peter Carl Goldmark of CBS

1948 Instant Camera 1948, Polaroid Land Camera by Edwin Land

1948 Electric Guitar 1948, by C. Leo Fender

1949 Photocopier 1949, by Haloid (later Xerox), having acquired Chester Carlson's basic xerographic patents


PBA 2009/2010

Innovation: top 100 Times magazine1951 COMPUTER The revolution started in 1951 with UNIVAC (Universal Automatic Computer), the first commercial computer in the U.S. Built in 1951 for Remington-Rand Corp., it contained 5,000 vacuum tubes. Today's chippowered machines, sold by the millions, pack more power than UNIVAC into a laptop.

1953 Color TV 1953, by RCA, whose design beat out CBS 1954 Portable Home Dishwasher 1954, by GE


PBA 2009/2010

Innovation: top 100 Times magazine1954 TV DINNER In 1954 Swanson & Sons succeeded in freezing a meal of compartmentalized portions, so that the housewife could just remove the complete meal from its box, which looked like a television, and heat it in the oven.

1955 Transistor Radio 1955, by Sony

1956 TV REMOTE First came the remote, then came the couch potato. The wireless Space Commander, which used ultrasonics to activate television controls, was invented by Robert Adler in 1956 and remained an industry standard for 25 years. Remotes now work by using an infrared light beam.


PBA 2009/2010

Innovation: top 100 Times magazine1957 Frisbee 1957, produced by Wham-O, invented by Walter Frederick Morrison 1958 LEGO system 1958, children's building blocks introduced by Denmark's Lego Co.

1959 BARBIE A babe since 1959 and now worth almost $2 billion in sales annually, Barbie was fashioned by Ruth Handler Mattel's co-founder. The first doll wore a swimsuit and cost $3. Over the year Barbie's had 30 relatives and companions, but only one boyfriend, Ken.

1959 POP TOP CAN On a family picnic in 1959, Ermal Cleon Fraze found himself with a can of beer and no can, opener-one of life's major annoyances at the time. The solution came to him "just like that" one sleepless night. In 1963, Fraze, the founder of Dayton Reliable Tool Co., obtained the patent for a removable pull-tab opener for the tops of cans. Continental Can Co. created a non removable tab 16 years later. Lauder Business SchoolPage 38

PBA 2009/2010

Innovation: top 100 Times magazine1959 Snowmobile 1959, by Bombardier of Canada 1960 TYLENOL Brand name for acetaminophen, available in 1960. Like aspirin it reduces pain and fever. Unlike aspirin it will not irritate the gastric system.

1960 ORAL CONTRACEPTIVE Gregory Pincus and two colleagues revolutionized sex by creating the first effective birth-control pill, Enovid-10, introduced in the U.S. in 1960 by Searle.

1961 Oh, baby, what a convenience! Procter & Gamble's Pampers, born in 1961, were first used only for special occasions. Now the 95% of American parents who buy disposables will spend up to $2,100 a child to avoid washing diapers Lauder Business SchoolPage 39

PBA 2009/2010

Innovation: top 100 Times magazine1961 SOFT CONTACT LENSES Otto Wichterle, a Czech scientist, created the first soft contact lens in 1961, using an Erector set and a phonograph motor. Bausch & Lomb bought the rights to his process for a reported $3 million in 1966.

1963 Compact , by Dutch electronic giant Philips

1963 METAL TENNIS RACQUET Rene ("Le Crocodile") Lacoste, the 1920s French tennis champ turned clothing entrepreneur, invented a steel tennis racquet in 1963. It was distributed in the U.S. by Wilson as the T-2000 and quickly revolutionized the game.

1963 Touch-Tone Telephone 1963, by AT&T Lauder Business SchoolPage 40

PBA 2009/2010

Innovation: top 100 Times magazine1967 Microwave Oven 1967, by Raytheon 1969 Quartz Wristwatch 1969, sold by Seiko

1970 SKATEBOARD California-no surprise-is the home of the skateboard. The sport, an orthopedist's best friend, took off in the 1970s after polyurethane wheels smoothed out the ride.

1973 CELL PHONE The first cellular phone was developed in 1973 by Martin Cooper at Motorola, and a test of 1,000 such phones followed in Chicago. The Federal Communications Commission authorized cellular service in 1982, and we haven't Lauder Business School shut up since. More than a third of all households in the U.S. subscribe. Page 41 PBA 2009/2010

Innovation: top 100 Times magazine1972 Electronic Hand-Held Calculator 1972, first sold by Texas Instruments

1978 Snowboard 1978, popularized by Jake Burton in Vermont

1979 Walkman 1979, by Sony, from an idea by CEO Akio Morita

1980 POST-IT One of the top five best-selling office supplies. To make Post-its, introduced in 1980, 3M had to develop the adhesive, primer, backside Lauder Business School coating and new manufacturing equipmentPage 42

PBA 2009/2010

Innovation: Distribution


PBA 2009/2010

Innovation: Product innovation


PBA 2009/2010

Innovation: Tesla Roadster, electric speed


PBA 2009/2010

Innovation: Cartier Albert Santos


PBA 2009/2010

Innovation: Tods

Elisabeth Hurley

Diego Della Valle


PBA 2009/2010

Innovation: Caterpillar


PBA 2009/2010



PBA 2009/2010



PBA 2009/2010

Innovation: Pfizer


PBA 2009/2010

Innovation: PfizerPFIZER: Total revenenues: 2009 11,4 bln. $ Lipitor share 16% or 1,8 bln $

The Problem: Next year the Patent expires

The Solution: Buying KING Pharmaceuticals for 3.6 bln. $ Saving on economies of scale $ 200 mln. Per year NPV Savings 1.2 bln.


PBA 2009/2010

Innovation: The old Russian communist way


PBA 2009/2010

Innovation: The chinese wayBMW X5 60.000 SMART 9.500

Shaunghuan CEO 30.000

Shaunghuan Noble 4.500


PBA 2009/2010

Last weekQuestion: What will Apple invent next?

What is in Education & Business Presentations still to be invented? EVO Innovation suggestions: -Meeting/dating APP -Glasses cleaning machine for 39,50 -The toothpaste innovationLauder Business SchoolPage 55

PBA 2009/2010

03 lbs last week

Documents

business purpose

cheese association

cheese man

cheese business venture

cheese pedigree

good cheese

fat cheese

willem elsschots cheese