seba presentation 01.19 10
TRANSCRIPT
NAIT
9 Academic Schools
85,000 Full and Part-Time Students
Delivers Training and Education in 23 Countries
Certificates, Diplomas, Applied Degrees and Degrees
Has identified Applied Research as a Strategic Focus
Is The Largest Apprenticeship Trainer in Canada
JR Shaw School of Business
Serving Albertans for more than 40 years
Average more than 2,000 students per year
Diplomas, Applied Degrees and Baccalaureate Degrees
Has had 2 Research Chairs endowed by JR Shaw
Faculty facilitate the delivery of CBU’s MBA
One of the largest business schools in Western Canada
Baccalaureate Degrees
FUS established to manage all degrees at NAIT
BBA and BTECH-Technology Management
New Health Informatics Degree “CAQC approved”
BTECH – Construction Management being reviewed
BBA has received CASB, CMA and CGA approval
On-line, evening, week-end [24-7] delivery modes
New focus on credential enhancement for working learners
The Business Faculty
More than 110 full-time teaching faculty
Approximately 20 are pursuing or hold PhD’s
36 hold professional designations CA, CGA, CMA, CFP
90% are pursuing or hold a minimum of a Masters degree
Average 12 and 13 years of industry and PS experience
A reputation for quality teaching for more than 4 decades
Purpose
To try to put the events of 2009 in context
To identify how businesses are affected by these events
To inform you about what NAIT is doing to help
To answer any questions you may have
Global Uncertainty Prevails
Economically and financially, we are in unchartered waters
Regulatory failure and excessive risk taking has led to a banking meltdown that triggered a global financial crisis.
Significant regulatory restructuring is required
Massive fraud has resulted in shareholder losses that total in the billions which may have negative long-term effects
and implications for investor confidence and markets
BRIC countries are positioned to rival US economically and can be expected will leverage their improved economic
positions for further gain in 2010 and beyond
Jack WelshWorld Business Forum, NYC, September 24, 2008
• I believe that we are in for a “hell” of a time…a deep downturn. The first quarter of next year will be brutal
• We will be slow to get out of it, de-leveraging is huge. Got to get our balance sheets back; to free up markets
• For all of you here running a company, you have to take action, don’t ponder. Get ready for real tough times.
• Get your cost structure in place. Be sure you are not over-leveraged. Take care of your best people…
Michael PorterWorld Business Forum, NYC, September 24, 2008
• Refocus on economic fundamentals. Stay focused on the strategy. Don’t over react to distressed conditions
• Make sure you are cutting costs and restructuring towards a strategy, rather than cutting across the board
• Take advantage of opportunity. When the market is down, get into a fundamentally good (better) position
• Seize opportunities for restructuring and don’t be afraid to make discontinuous moves if they become available
US-Canadian Situation
Our economy is highly dependent on the US economy. US Federal debt obligations in 2009 are 74.6-trillion (est.)
Job loss is 323,000 from 2008 high. Unemployment: 8-9%. Rising unemployment will increase defaults on existing
credits which may trigger a second round of credit tightening – a clear threat to recovery
Recovery has been aided by low interest rates which will rise as last year’s crash in energy/metals prices wears off - which could trigger inflation and unwind stimulus
Protectionist trade actions are gaining momentum and currency risk could damage exports and recovery
CFA Forecast DinnerShaw Conference Centre, January 20, 2010
Stefane MarionChief Economist & Strategist, National Bank Financial
Gary Smith, PhD, CFAChief Economist, Alberta Investment Mgt. Corp (AIMCo)
Gary Chapman, MBA, CFAManaging Director, Guardian Capital LP
2010 Financial Forecast
No consensus, de/inflationary camps, crisis of confidence
Weak US appetite for borrowing/lending, de-leveraging
Cautious, conservative, crisis of confidence, hopeful?
Improvement is expected but ragged and inconsistent
Overall, ± 5% TSX, S&P; CAD≤USD; Oil USD $75-92;
30 Yr. Bonds ± 5%; Gold USD $800-1,320
2009 in Retrospect
Financial fallout continues – bankruptcies reach new high
Retrenching in Afghanistan – US commits 30K more troops
Iran and Iraq’s fraudulent election results and protests
Divisive US debate on healthcare reform. Is it affordable?
H1N1 pandemic – global vaccine supply distributed
G20 replaces G8 as main global economic forum
PSE Global Trends
Demand for global business education is rapidly increasing
Transformation continues to be driven by globalization, technology, demographics and social imperatives
Privatization, marketization, QA and internationalization
Doctoral faculty shortages are a reality
Intense competition for students and funding continues
Financial stewardship is becoming an issue
A New Experience?
Our expansion was larger so the downturn is larger than anything that we have experienced before
Consumption excesses in the West became production excesses world-wide so the contraction is global
Since the growth cycle was so long (16 years) this is the first downturn for many businesses and policy-makers
Our economy is beginning to recover. But, will it last?
Some views from JRSSB’s Finance Caucus . . .
Mustaq Ahmad, PhD
Biography
Education: Economics (Illinois)Position: InstructorIndustry Exp: 2 yearsTeaching Exp: 24 yearsExpertise: Economics
Curriculum DesignProf. ConsultingPublications AuthorApplied Research
Anna Beukes, PhD*
Biography
Education: Economics (S.A.)Psychology (S.A.) *ABD (Finance)
Position: InstructorIndustry Exp: 12 yearsTeaching Exp: 15 yearsExpertise: Investment Banking
Financial AnalystProf. ConsultingApplied ResearchPublications Author
Ivan Ourdev, PhD
Biography
Education: Com Physics (Alberta)Position: InstructorIndustry Exp: 13 yearsTeaching Exp: 4 yearsExpertise: International Business
CommercializationApplied ResearchFinancial ServicesProf. ConsultingPublications Author
Richard Ford, PhD
Biography
Education: Business (Cranfield)Position: InstructorIndustry Exp: 20 yearsTeaching Exp: 10 yearsExpertise: Supply Chain Mgt.
Operations/LogisticsBest PracticesProf. ConsultingApplied ResearchPublications Author
Andy Igonor, PhD
Biography
Education: Business (Bristol)Industry Certification
Position: Associate ChairIndustry Exp: 12 yearsTeaching Exp: 10 yearsExpertise: Information Tech
Info/Bus SystemsProf. ConsultingApplied ResearchPublications AuthorCurriculum Design
Doug Short, MBA
Biography
Education: Business (Alberta)Position: Chair, FinanceIndustry Exp: 16 yearsTeaching Exp: 27 yearsExpertise: Textbook Author
Curriculum DesignFinancial ServicesProf. ConsultingApplied ResearchCase Studies
National Expectations
The recovery will be more gradual/onerous than expected
Regulatory reform is required to stabilize markets
True recovery won’t happen until private demand resumes
G20 policy, US debt, increased protectionism are factors
Rising unemployment and inflation could slow recovery
Economy, climate change, nuclear diplomacy are priorities
Is Alberta Better-Off?
Credit is slowly coming back into the banking system
Cautious businesses are increasing their equity positions
Oil prices and Sands spending is expected to be up in 2010
Construction costs are down fueling increased building
Gas royalties have declined triggering government cuts
Climate change regulation/requirements is still unknown
Recovery in Alberta is expected to arrive in late 2010
What It Means for Business
We are recovering but there are more bumps ahead
Take the time to prepare for set-backs and opportunities
Carefully assess your business risks and vulnerabilities
Identify and prioritize short-term readiness initiatives
Broaden focus, prepare for multiple scenarios
Globally, keep your eyes on China
Why Watch China?
They have less debt/financial obligations than the US
Demographics/cost structure are more favorable than US
Consumer goods trade generates a huge surplus
Quality of life, education and training are improving
Developing technology around old-economy manufacturing
Economic and Financial firepower is substantial
Can be expected to push position
Some Key Questions
Are the right people in the right roles?
Have the key risks facing your business been identified?
Is decision-making being responsive to market changes?
Are resources being allocated to support key value drivers?
Have costs, customers and suppliers been prioritized?
Are stakeholders informed and involved?
Assessing Business Risk
BUSINESS MODEL
Key People, Products, Services, Channels
Information I-Technology Equipment
STRATEGIC COMPETITIVE ADVANTAGE
Customer Value Proposition, Profit/Loss
BrandPartnerships Alliances Stakeholders
EVALUATION
LEVERAGE
REQUIREMENTS
KEY PROCESSES
Short-term Readiness
Increase efficiency, manage cash flow (“Cash is King”)
Cut “nice-to-haves”, reduce debt and other liabilities
Be credit conscious; aggressively manage working capital
Focus equally on customer and key employee retention
Improve customer services/incentives; enhance marketing
Leverage proven products/services; delay LT investments
Consider Multiple Scenarios
Several scenarios should be considered
Conventional business models may no longer be viable
Management teams should be assessing options
Implementation plans should be developed
Ensure all stakeholders are involved
Ensure an effective communication strategy is in place
Action Summary
Make adjustments and/or cuts for new realities
Continue to invest in core strengths and key resources
Communicate, Communicate, Communicate
Offer employees incentives and customers new solutions
Maintain pricing and focus on capital (and how its used)
Evaluate efficiencies related to out-sourcing/off-shoring
Upgrade your personnel and consider acquisitions
Contributing to Our Community
Through JRSSB’s Community Connections initiative, faculty are able to provide Edmonton-based businesses with a strategic business risk assessment (as above)
All assessments are coordinated through my office
If you are interested in taking advantage of this business risk assessment opportunity, call 780-491-3008
Thank you!