Archive for August, 2008

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differrences with Beijing

Friday 29 August, 2008

I found this article by Kathy Bergen of the Chicago Tribune interesting More observations about Beijing Here are a few of my observations how these things are different elsewhere.

SUBWAYS

cool-systems like those in Europe (I’ve traveled in German-speaking countries, Scandinavia, France, Spain, & the UK) & developed Asia (I can vouch for Hong Kong & Singapore) where you can actually plan a trip on a time schedule & it will actually work

uncool-systems where all you can do is pay & then wait/hope for the next train to come & get to your destination on time, without ever knowing if you have a chance or not (Sweet home Chicago)

TAXIS

cool-Mercedes in Germany & big old fashioned taxis in London where drivers actually know the fastest & most direct way to get everywhere (or so it seems)

uncool-drivers who don’t speak the native language well & don’t know 1-way streets which make you end up driving around in circles (Chi-town again)

HOTELS

cool-big fluffy duvets you find in Europe

uncool-bedbugs which infested my bed in a “pension” Lisbon Portugal many years ago the night Oporto beat FC Bayern Muenchen in the European Cup.  After a sleepless night because of beds banging against walls, I woke up with my eyes swollen shut from insect bites.  I took a quick tour of the city that day & hightailed it out of there on the next boat back to the Algarve.

SECURITY

cool-I was actually pulled aside & frisked on an internal European flight from Switzerland to Sweden & treated with the utmost respect & well-informed of what was happening & why

uncool-TSA employees, @ O’Hare at least, are pretty rude & discourteous

(PRESS CENTER) CAFETERIAS

cool-when I lived/worked in Germany, both Deutsche Bank & Siemens had great company-subsidized (i.e. cheap) offerings for lunch, the main meal of the day,  every work day, even with beer for breakfast & lunch

uncool-I haven’t been to a cafeteria here in the States for many years, other than @ a local public school where I volunteer occassionally, & the servers there still seem to slop on the gruel with the same enthusiasm (or lack thereof) they always have

RESTAURANTS

cool-multilingual (OK, English) menus in foreign countries.  Typically you’ll find them in the tourist-frequented areas, but they help out a lot.  We could use them in some ethnic restaurants in Chicago.

uncool-service in German/European restuarants where the servers move @ their own pace regardless of the customer’s schedule.  I speciically remember having dinner in a bier hall in Muenchen before a concert.  We had to beg the waitress to bring us the bill so that we could get to the concert on time.

LAST DANCES

Most world travelers have at least a few stories like these.  1 of my favorites is from the same trip to Portugal when I arrived late at night in Coimbra to see the chapel of bones.  I found a place to stay & sought out something to eat.  I came across a late-night puppet show in the turret of a church into which I subtley barged.  I spent a couple of hours there watching the show, sipping wine, munching on hors’douvres, mingling with other guests, without knowing a word of the language & hence not having a thing to say to anyone.  Regardless, it was a magical wonderful evening, enhanced by the hospitality of my hosts, who were welcoming & hospitable despite the obvious, that I didn’t belong there.

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the dollar is news

Thursday 28 August, 2008

I couldn’t help but come across this article in the Chicago Tribune by Gail MarksJarvis It’s getting stronger on the optimism about the rebounding US dollar.  This was front page news, & even above the fold.  Granted it was published on a Saturday, not a big news day, but it’s rare that currency news gets such exposure.  Obviously this is good for American consumers & the retailers who sell to them as well as the wholesalers who supply the retailers.  Seemingly this is good all the way through the value/supply/demand chain.  US importers can buy more with a strong dollar.

However this is equally bad news for exporters.  Their products which they sell to the world are becoming commensurately more expensive.  American firms have made a lot of inroads based on their price advantage with a weak dollar.  In all likelihood, we will export less, & that will hurt the US trade deficit.

Purchasing power parity is a theoretical concept which determines the value of a currency.  The “Big Mac Index” is a good example which compares the price of a Big Mac in different countries translated from native currencies into 1 comparable currency.  Values of currencies change every minute of every hour of every working day.  Historically, the dollar seems to be very much at the low end of its business cycle.  Determining whether or not the dollar has hit bottom is pure conjecture.  Economists can make predictions, but there are many variables which determine currency values, such as inflation, interest rates, budget & trade deficits, etc., so predicting their direction & magnitude is treacherous.

There are generally 2 risks with currencies changing values-1.  transaction risk, i.e. the value of a transaction changing along with currency value when a transaction is entered into on 1 date & closed on another, such as collecting on foreign accounts receivables after 30 days, 2.-translation risk, i.e. the value of assets, liabilities, & equity changing in dollar terms because changes in currency values over the course of a financial accounting period, i.e. fiscal year, quarterly reporting requirement, etc., such as the value of plant & equipment in another country declining because the currency used in that country depreciates.  Both risks can be mitigated against, but those protections can be expensive.

America used to be the reserve currency of the world, the currency the world would buy in times of duress.  I vividly remember a bus trip from Poland to Lithuania when we were crossing the border, the push that got us across the border was a stack of dollar bills.  With the advent of the Euro, the dollar’s dominance has started to change.  Commodities that were priced in dollars are starting to be priced in other currencies, which decreases demand for dollars, which lowers its value.

Chicago Global Capital has advertised in my e-mail newsletter.  When I spoke with Jim Bristol a few months ago, he was skeptical that the dollar had bottomed out then.  It’s a few months later, so I’m not sure where he still stands.

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Chicago’s olympic obstacles

Tuesday 26 August, 2008

I caught with interest this article Chicago Olympic bidders share Beijing impressions by Kathy Bergen of the Chicago Tribune, which gave Mayor Daley’s & Chicago Olympic bid chairman Patrick Ryan’s observations on what Chicago will have to do to improve its chances of winning the 2016 Summer Games.  Here are mine:

Traffic-if the IOC is going to depend on local “express” ways to get specatators to events, it will take much more than a little education to get them there on time.  They’re a mess & will need a major overhaul to meet international expectations.  Competitor cities are crowded too, but ours are some of the worst in the nation.

Volunteers-There’s no way any other other city will match the sheer number of volunteers Beijing provided.  China is all about throwing masses of people @ problems, & no other country has that population to devote to volunteers.  I think the solution is multilingual ubiquitous technology (ex. wireless & kiosks) which should provide a lot of the information volunteers can, & will remain as valuable assets after the games are done.

Transportation-we had a really good rail system, but it’s pathetically managed, poorly maintained, & woefully underfunded.  It will take more than $ to shore it up.  It needs to be managed much more effectively.  We are competing with world-class public transportation systems, & the CTA looks pathetic by comparison.

Venues-This should be a real advantage for Chicago to show off its marvelous architecture.  Hopefully Chicago can utilize even more athletic facilities than are already planned, such as US Cellular Field, Ryan Field in Evanston, etc.

Residents-it will take a lot more than live sites to involve local residents in the games.  There are tons more tourists here than there were 5-10 years ago, & it looks like they get along OK here, but I think that’s in spite of many residents rather than because of them.  Midwesterners have the reputation of being very nice, which is probably true & helpful, but also very parochial & insular, which doesn’t help when people who speak with funny accents, or even in different foreign languages, ask questions on the streets.

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international marketing budget survey

Monday 25 August, 2008

I read this article by Kate Maddox @ BtoB Magazine  Survey finds international budgets up which is illuminating on international marketing.  The author cites a statistic that almost 70% of international marketers do not have multilingual websites.  I took a look @ the websites of the Fortune 100 a few years ago & found about the same percentage.  I assume that it’s changed since then, but perhaps not.

Translation is noted as the biggest obstacle, which isn’t a surprise, given Americans aversion to languages.  The resources are available, so it looks to me like it’s simply an unwillingness to pay for it that’s the problem.  Farming translation out to local dealers is suggested, but that’s dangerous too.  Consistency with brands can be lost, & unless you speak the target language, quality control is gone.

I can understand doing less internationally in direct mail & television, but I’m surprised only about 10% are doing more internationally in digital marketing.  This is 1 way to leverage existing assets cost effectively, especially in some very wired countries of the world.  Apparently American companies haven’t seen that light yet.

Examples are named with companies that get at least 1/3 of their revenues from outside of the United States, yet they must not be allocating marketing budgets commensurately with that. Interestingly, they quote a guy who mentions financial & people resources as constraints, but then only comments further on the growth funding issue.  The people issue can be even more difficult to solve.

They interviewed 274 people in this survey, so it seems to be pretty comprehensive.  It looks to me like there are still many American companies intently focused on the US market & just taking what the rest of the world gives them.  There is little proactive push to determine who the best customers & partners are on a market-by-market basis.  Simply passively growing your business by waiting for the world to come to you is far from optimizing your opportunities.

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differences in localizing websites

Friday 22 August, 2008

I caught this article by Anick Jesdanun in the Chicago Tribune U.S. Web firms taking native approach to expansion which highlights the issues in localizing websites. Many things that we take for granted here are different (to varying degrees) everywhere you go. The main point is that more & more today, you have to go local.  A few years ago I checked out the websites of the Fortune 100 & found that only about 1/3 had localized their websites into a different language.  I hope that’s changed.  I spoke with John Lee of Hostway about the differences in websites internationally 4 years ago: Q&A: Founder John Lee of Chicago’s Hostway on Growing Globally Q&A: Founder John Lee of Chicago’s Hostway on Web Site Localization where he specifically mentioned the situation with Google in Asia.

I also spoke with a couple of other localization experts:  Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization Q&A: Brian Briggs of Acclaro on the Complexities of Localization Q&A: Brian Briggs of Acclaro on International Localization Services & Q&A: InterPro Translation CEO Ralph Strozza on Translation Tools, Costs Q&A: InterPro Translation CEO Ralph Strozza on Globalization, Translation Q&A: InterPro Translation CEO Ralph Strozza on Intercultural Translation Issues

In a lot of ways, websites throughout the world reflect local culture.  The differences aren’t in just attitudes, connection speeds, & payment mechanisms & the opportunity is not just in advertising revenue, as this article might have you believe.  Some of these differences are easy to decipher, but you have to dig deeper to learn some of the differences in values & decision-making to get to the core many issues.

What concerns me about the article is that it features on the biggest names in technology like AOL, mySpace, Google, & Microsoft. Small firms have to do the same things these big guys do, but they don’t have the same resources to put towards these kinds of things. This kind of stuff requires research to find out what kind of issues need to be addressed & what needs to be changed. It requires people who are aware enough that they recognize all of the various possibilities of what need to be addressed.  Part of the solution can be delegating these activities to local partners, as even AOL does, but there are risks associated with that too.

I use a few different browsers & have a different international home page for each, Yahoo Deutschland for Firefox, Yahoo Sverige for IE, Yahoo Asia for Opera, & Yahoo Telemundo for Flock.  It’s a good way to get a local perspective on what’s going on around the world.

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the importance of public transportation

Thursday 21 August, 2008

I find it very interesting that the 1st thing Chicago Mayor Daley investigated in Beijing on his trip to promote the Chicago 2016 Olympic bid was to check out the new public transportation system, as mentioned in this article Transit system is Daley’s first stop in Beijing by Kathy Bergen in the Chicago Tribune. Chicago’s decaying public transportation system has been an embarrassment for quite awhile now & I’m glad it’s coming into focus for the mayor to fix it.

Head of the International Olympic Committee, Jacque Rogue was in Chicago late last fall & spoke to the Chicago Council on Global Affairs. It was during that visit that CTA funding was being debated in Springfield, & the headlines in the papers were not complimentary to the negotiations. If he read the local papers on that trip, I’m sure he was horrified @ how public transportation is being managed in Chicago.

What concerns me as a businessperson is the CTA’s impact upon business, in that if workers can’t plan their commutes to get to work & home on time, significant worker productivity is lost. The CTA’s refusal to publish schedules (& even make them less relevant by saying they’ll run every 4-15 minutes, which essentially means whenever the conductor/driver wants), makes no sense to me. I’m surprised the business community doesn’t express a more vocal opinion on this too. Employers are losing valuable work time when workers aren’t sure when they’ll arrive @ work.

I’ve been on public transportation systems all over the world. I’ve been on buses in small towns in Poland that are more reliable than the buses in Chicago. The CTA’s argument is that you can’t control traffic. My argument is there is no reason to wait for a 1/2 hour for a bus, & then 3 come by in a 3 minute span. That’s an average of a bus arriving every 10 minutes, but doesn’t serve customers whose travel is inconsistent that way. 3 buses every 30 minutes doesn’t move people as effectively as 1 bus every 10 minutes. It’s a management issue. Make a schedule & stick to it. I understand the unions might not want to be held to a schedule, but I’ll choose serving customers over the interests of the unions.

When I was living in Germany, I visited Berlin before the wall came down. The subway in West Berlin rode through stations in East Berlin to get to other West Berlin stations. Which stations do Chicago’s most resemble? The old dilapidated East German ones! Even further, the CTA more resembles systems from old communistic countries with old hub & spoke systems where all lines run through a central point rather than more developed systems where you can travel to multiple destinations within an integrated subway/bus system with a schedule so that you can plan when & where to go. Here, you just have to wing it & hope for the best.

It would be terribly ironic if Chicago loses the bid for the 2016 Olympics because of inferior transportation infrastructure, especially in a city that sells itself to the world based on it’s world-class air & freight connections. We don’t need the glitz that Daley saw in China. We just need a system with a schedule you can count on that works as scheduled.

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how free is trade?

Wednesday 20 August, 2008

I read this article Free trade an elusive conceptby David Greising, the only business writer @ the Chicago Tribune who seems to have much of anything to say about international business. The impetus for the article was the breakdown of the Doha round of trade talks. I don’t disagree with much of what he says, that China’s yuan is undervalued, & that governments of both developed & developing countries steer negotiations towards political ends rather than economic ends. I’d just like to add a few points:

-it should never have been expected for the Chinese to adjust their currency in 1 fell swoop. It will take time for the Chinese to adjust & the rest of the world to adjust to that. Is it adjusting fast enough? Probably not, but it’s difficult to tell what the optimal rate of adjustment would be.
-it’s government’s role to protect/manage trade, however to protect freedom & fairness to competitors as well as their own constituents. Farmers acquire disproportionate attention because of their sheer numbers rather than their declining economic clout. Regions with proportionately lots of farmers protect agriculture, to the detriment of those who’ve automated agriculture.
-trade is only free if all who participate do so on a fair & level playing field. Distortions like incorrectly valued currencies, logistical obstacles, tariffs create minefields instead.
-different regions look out for different constituent groups. In the US, assuring investors of high returns & consumers of low prices are paramount. In Europe, governments look out to assure the jobs of its workers. Japan seems to mirror Europe in protecting entrenched bureaucracies. I don’t know the rest of Asia & Latin America as well, but I’d bet they lean more towards Europe than the US.
-the main problem with free trade is not that it’s costing Americans jobs, rather that not enough retraining is being provided to those whose jobs are displaced. Europe does a much better job of this.