Vintage Filings Business Blog

By Benjamin Blascoe

Today CNN.com posted the 2009 list of the top 100 fastest growing companies in the world. In the past many greats have made the list, typically including a vast array of different markets and products reflecting the trends of the consumer-manufacturer relationship. However, this year list seems to be a bit homogenous in the top quarter and offers some new and interesting statistics for companies –most of which are not American companies.

Some of the results are not surprising as technology companies grace the top 5. In today’s world almost everything is centered on technology – from the “chip” manufacturer to the service provider. However, what is unique about this year’s list is the types of technology. For example, cellular designer and wireless communications company Research in Motion (RIM) is considered the fastest growing company in the world. Not surprising either considering that their product the Blackberry Curve is one of the top grossing products of this year. However, these findings are strange because you would think that the designer would easily be trumped by the manufacturer but the numbers prove differently. RIM also boast countless other products, each one of them being some how related to different popular wireless service mechanisms.

Also gracing the list are copious amounts of Chinese internet and online-gaming companies. Such companies as Sohu.com, which own a popular search engine and Changyou gaming site, is indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer a broad array of choices regarding information, entertainment and communication. As China’s economy continues to boom, this company and many others are only expected to rise. Another Chinese cash-cow is Shanda Interactive Entertainment. Since its launch in 1999, Shanda Interactive Entertainment reportedly has 460 million registered accounts.

Strangely enough, there are also two Fertilizer companies gracing the top 10. As natural gas prices drop, so did the production cost for making nitrogen fertilizers. Two companies in particular cashed in on this fortunate price reduction and have grown their company exponentially. CF Industries Holdings and Potash Corporation of Saskatchewan, both yield roughly 40% growth since last year. Even though these companies are utilizing a different niche in the market, it is still a bit surprising to see energy companies gracing the top 10 in this day and age.

I recommend reviewing the top 100 and joining the discussion! How do you feel the market is changing?

Is your company in the travel industry?  If so, you will be pleased to hear that the global travel industry is showing signs of tremendous growth despite the International credit crisis.  The National Business Travel Association (NBTA) and Egencia have released a sample of findings from a landmark study that quantifies global business travel spend and projects business travel growth through 2013. Evaluating 72 countries, the study shows that business travel growth patterns vary dramatically across the globe with North America advancing at an average rate of just over 2 percent per year for the last decade, Western Europe growing 4.6 percent annually and Asia Pacific advancing by 7.2 percent annually over the same period. Emerging Europe and the Middle East/Africa region advanced annually by 12.4 percent and 7.7 percent, respectively, from 1998 to 2008.

Kevin Maguire, CCTE, GLP, NBTA President & CEO, said, “This study is the most comprehensive look at the global business travel industry available today. Corporations can leverage this insight to guide their travel programs and preferred supplier market strategies across the globe for many years to come. We look forward to making the full report available in the coming weeks.”

The study predicts that growth of business travel in China and Japan will exceed U.S. growth over the next five years. In addition, developing nations, like India, Vietnam, Iran and Indonesia will experience significant compound annual growth rates over the same timeframe.

“Developing countries are proving to be fertile business-travel areas,” said Rob Greyber, president of Egencia. “Over the next five years, we’ll see countries like India and China grow at rates of 5.3 and 6.5 percent respectively, versus the U.S. projected growth rate of 0.3 percent.”

Global Business Travel Market & Outlook

The study finds that the North America, Western Europe and Asia Pacific regions each represent about 30 percent of the global business travel market (90 percent combined), estimated to total $929 billion in 2008. This figure includes both domestic and outbound international travel. The remaining 10 percent of global activity takes place in Latin America, Emerging Europe and the Middle East and Africa. The United States represents the largest piece of global business travel spend with $261 billion or 28 percent of the world total, followed by China at 10 percent and Japan at 8 percent.

“This study shows that business travel spend has increased by more than 35 percent since 1998, making it an impactful industry in the global economy,” said Kenneth McGill, NBTA Research Consultant and lead analyst on the IHS Global Insight report. “Most of this growth has been due to an expanding global economy and the rising dispersion of business travel activity around the world.”

Despite the United States’ position as the global leader in business travel spend, Asia Pacific is poised for substantial growth over the next five years, while U.S. growth is expected to stagnate. China’s spend, at $93.8 billion in 2008, has tripled over the past 10 years and is expected to lead market growth between 2008 and 2013, followed by Japan and South Korea. Measured in terms of the dollar increase in business travel spending, the United States is expected to be fourth in terms of growth, just behind India.

Business Travel by Industry Sector

The study examines the highest growth industries for business travel globally, of which the top five include utilities, food processing and services, real estate, social and personal services, and professional and business services. Over the next five years, sectors that directly benefit from both infrastructure development (utilities, government and communications) and economic stimulus packages (education, construction and real estate) will experience the most significant growth in business travel spend.

The research shows that, globally, businesses spend an average of about 1.1 cents of every sales dollar on business travel, though it varies widely by industry. In the equipment and leasing sector, for example, the measure of travel intensity is more than three times higher at 3.7 cents per dollar, while in the mining sector, business travel measures only fractions of a cent per dollar of revenue.

Reflecting the global recession, nearly every industry foresees a decline in business travel outlays in 2009 from 2008 levels, led by steep drops in the transportation services, paper and paper products, construction, chemicals, communication equipment, and rubber and plastic manufacturing sectors. The only anticipated uptick in spending is expected in education with a 2.2 percent projected rise. However, there has been a downward trend in the amount of travel spending businesses require to support their sale and operational activities, which is a clear indication of the rising productivity of business travel.

“The increase in productivity highlights several major shifts within our industry,” said Greyber. “Stronger travel management and greater efficiency when traveling have both contributed to this change, essentially driving down business travel spend per revenue dollar. This development should be a key consideration in program planning, in addition to overall macroeconomic changes and sector trends.”

Following up on our online networking series of blog posts, I thought this Friday I would share ten practical tips for successful networking.  With the current economic challenges, professionals are taking advantage of this low-cost ways such as networking to build new relationships that can lead to business opportunities.

Business networking’s purpose is to build solid relationships, “which is more than just an exchange of handshakes at events,” according to Jania Bailey, President and COO of FranNet. “The best business relationships are when everyone can exchange ideas, information and support, and possibly allow everyone to learn a new skill.” Here are some tips to maximize your networking efforts:

1. No immediate Gains. The purpose of networking is to build mutually beneficial relationships that will form out of more than one event.

2. Best networking tool: listening! This sounds easy but you really need to listen to the person and really hear how you could help them which will in turn help you.

3. Be yourself. You want to build relationships and a rapport with fellow networkers. They want to meet genuine, trustworthy contacts as much as you do.

4. Size does not matter! Surprisingly enough, small groups will be more likely to send you referrals than larger groups -focus on quality not quantity!

5. Not a contest. Just collecting business cards is not a networking game. You cannot build a relationship by just handing out your business card.

6. Focus on building relationships. Networking is a long term project that can build your list of contacts over time that will last long after the network group.

7. Follow up! You need to follow up with contacts soon after the event. This is when you can meet with the person to really find out what they need and how you can help them.

8. Ask open-ended questions. Make sure to ask questions that cannot be answered with just one word and questions that allow longer explanations.

9. Be a good networker. Share referrals and ideas with people. Sometimes you will need to be the first one to get the ball rolling.

10. Secret formula: listen and follow up. These two tips were previously mentioned but collectively are key to successful networking.

So how is the business travel industry doing during the recession? The National Business Travel Association (NBTA) and Egencia today released a sample of findings from a study that quantifies global business travel spend and projects business travel growth through 2013. Evaluating 72 countries, the study shows that business travel growth patterns vary dramatically across the globe with North America advancing at an average rate of just over 2 percent per year for the last decade, Western Europe growing 4.6 percent annually and Asia Pacific advancing by 7.2 percent annually over the same period. Emerging Europe and the Middle East/Africa region advanced annually by 12.4 percent and 7.7 percent, respectively, from 1998 to 2008.

Kevin Maguire, CCTE, GLP, NBTA President & CEO, said, “This study is the most comprehensive look at the global business travel industry available today. Corporations can leverage this insight to guide their travel programs and preferred supplier market strategies across the globe for many years to come. We look forward to making the full report available in the coming weeks.”

The study predicts that growth of business travel in China and Japan will exceed U.S. growth over the next five years. In addition, developing nations, like India, Vietnam, Iran and Indonesia will experience significant compound annual growth rates over the same timeframe.

“Developing countries are proving to be fertile business-travel areas,” said Rob Greyber, president of Egencia. “Over the next five years, we’ll see countries like India and China grow at rates of 5.3 and 6.5 percent respectively, versus the U.S. projected growth rate of 0.3 percent.”

Global Business Travel Market & Outlook

The study finds that the North America, Western Europe and Asia Pacific regions each represent about 30 percent of the global business travel market (90 percent combined), estimated to total $929 billion in 2008. This figure includes both domestic and outbound international travel. The remaining 10 percent of global activity takes place in Latin America, Emerging Europe and the Middle East and Africa. The United States represents the largest piece of global business travel spend with $261 billion or 28 percent of the world total, followed by China at 10 percent and Japan at 8 percent.

“This study shows that business travel spend has increased by more than 35 percent since 1998, making it an impactful industry in the global economy,” said Kenneth McGill, NBTA Research Consultant and lead analyst on the IHS Global Insight report. “Most of this growth has been due to an expanding global economy and the rising dispersion of business travel activity around the world.”

Despite the United States’ position as the global leader in business travel spend, Asia Pacific is poised for substantial growth over the next five years, while U.S. growth is expected to stagnate. China’s spend, at $93.8 billion in 2008, has tripled over the past 10 years and is expected to lead market growth between 2008 and 2013, followed by Japan and South Korea. Measured in terms of the dollar increase in business travel spending, the United States is expected to be fourth in terms of growth, just behind India.

Business Travel by Industry Sector

The study examines the highest growth industries for business travel globally, of which the top five include utilities, food processing and services, real estate, social and personal services, and professional and business services. Over the next five years, sectors that directly benefit from both infrastructure development (utilities, government and communications) and economic stimulus packages (education, construction and real estate) will experience the most significant growth in business travel spend.

The research shows that, globally, businesses spend an average of about 1.1 cents of every sales dollar on business travel, though it varies widely by industry. In the equipment and leasing sector, for example, the measure of travel intensity is more than three times higher at 3.7 cents per dollar, while in the mining sector, business travel measures only fractions of a cent per dollar of revenue.

Reflecting the global recession, nearly every industry foresees a decline in business travel outlays in 2009 from 2008 levels, led by steep drops in the transportation services, paper and paper products, construction, chemicals, communication equipment, and rubber and plastic manufacturing sectors. The only anticipated uptick in spending is expected in education with a 2.2 percent projected rise. However, there has been a downward trend in the amount of travel spending businesses require to support their sale and operational activities, which is a clear indication of the rising productivity of business travel.

“The increase in productivity highlights several major shifts within our industry,” said Greyber. “Stronger travel management and greater efficiency when traveling have both contributed to this change, essentially driving down business travel spend per revenue dollar. This development should be a key consideration in program planning, in addition to overall macroeconomic changes and sector trends.”

By Benjamin Blascoe

Marc Andreessen, web guru of Netscape and other profitable i-ventures, has announced that he and his partner Ben Horowitz are to launch another venture into the thriving technology industry. Andreessen and Horowitz have been partners for quite some time now and judging by their past precedence, this new venture is sure to be lucrative.

The company, cleverly dubbed Andreessen Horowitz, will be an investment firm centered on the best new entrepreneurs, products and companies in the technology industry. Taken from Andreessen’s Blog “…between the two of us, Ben and I have started three companies directly, created many new products and services, run operating businesses at high levels of scale, angel invested in 45 tech startups in the last five years, and served on a broad cross-section of company boards with some of the best entrepreneurs and investors in the industry.”

But the organization will not be as effortless as it seems with these two geniuses behind the wheel. The technology and products Andreessen Horowitz is concerned with all focus on human progress on a worldwide scale – meaning if “it” improves standard of living, improves human potential or even unlocks new technology to a broader range of human beings, Andreessen and Horowitz are interested.

Should make for an interesting firm that will most likely be at the forefront of tomorrow’s technology. Read more at Marc Andreessen’s Blog.

Consumers continue to buy technology products to improve their lives, although the consumer electronics (CE) industry will see overall shipment revenues decline in 2009, according to new data released today by the Consumer Electronics Association (CEA). The semi-annual U.S. Consumer Electronics Sales and Forecast shows that industry revenues will contract to $165 billion in 2009 but grow slightly in 2010.

The consumer electronics industry will see shipment revenues fall 7.7 percent, to $165 billion this year, the first decline since 2001. While consumer demand for CE products remains high, several market forces are contributing to lower revenues, including lower consumer spending, price declines and compositional shifts in key product categories. As consumer confidence rebuilds, industry revenues will grow, albeit at a pace of less than one percent in 2010. CEA’s forecast projects industry revenues will bottom out by the second half of 2009, although many risk factors remain causing industry growth to remain muted.

The CE industry continues to hold up favorably compared with other industries. Most recessions are marked by steep declines in durable goods purchases as individuals defer discretionary purchases that can be pushed into the future. Despite the worst recession since the Great Depression, CE spending as a percentage of all durable goods is as high as it has been in 50 years. Vehicle sales are down 40 percent since the recession began in the fourth quarter of 2007, according to Autodata Corporation, and existing home sales are down 34 percent from their peak in August 2005, according to the National Association of Realtors.

“The CE industry is not impervious to the economic downturn but remains resilient compared to other industries,” said CEA President and CEO Gary Shapiro. “Through innovation and global access to consumers and open markets, technology companies will restore economic growth and prosperity. American consumers continue to purchase CE products despite cutting back in many areas, showing that consumer electronics are vital to everyday life in this country.”

Digital displays continue to be the primary revenue driver for the industry, comprising 15 percent of overall industry sales. Unit shipments of displays remain robust, projected to be up eight percent in 2009. LCDs remain the display of choice for consumers with unit volumes jumping 24 percent. Lower price points and an increase in consumer demand for mid-size displays are reducing revenue. TV display shipment revenues are expected to drop six percent this year to $24 billion.

One year after emerging as the next-generation DVD format of choice, Blu-ray players are poised for growth in 2009. Unit shipments of Blu-ray players will jump 112 percent this year, reaching nearly six million. Even as prices drop, revenues are expected to top one billion dollars, an increase of 48 percent over 2008.

Continued innovation in the smartphone category is leading to high consumer demand and increased shipment revenues. Smartphone shipment revenues will increase almost three percent in 2009, to nearly $14 billion, despite declines in average unit prices. Smartphones will account for one in four total handset sales this year as consumers continue to seek devices capable of Internet access, navigation and media playback while on the go.

CEA’s updated sales and forecast also shows netbook momentum is building within the PC category. Unit shipments are forecasted to nearly double in 2009, rising 85 percent, to eight and a half million units. Even as more consumers opt for lower-priced netbooks, the category will reach $3.4 billion in revenue in 2009.

“Consumers continue to buy CE products at high rates, showing that CE is a must-have even during the darkest of economic times,” said Steve Koenig, CEA director of industry analysis. “Notably, consumers are buying CE products that fit today’s budget, like mid-sized displays, netbooks and private label products. Some categories, such as digital cameras, Mp3 players and video game consoles, have reached maturation as most American homes now include such devices.”

Increased globalization brings increased travel and along with it the need to obtain work visas and residence permits. Not having the correct information or missing documents can mean weeks of delay when one is turned back at the border. In some cases, it can even cause significant penalties.

Vyoma Nair, co-founder of Nair & Co., a leading global integrated solutions provider helping companies expand internationally, summarizes immigrations requirements, in some key countries, for short-term business travel (e.g. travel to attend meetings, travel for fact finding, travel for transacting business or buying or selling goods).

Brazil

Brazil issues VITEM II visas, which allow a maximum stay of 90 days per visit, maximum 180 days in a year. These visas are valid for five years. There are no exemptions for U.S. citizens. Executives should keep a checklist for a completed visa application form explaining purpose of trip, valid passport, recent passport photo, Green Card (if applicable), letter from employer or sponsoring company on letterhead stating nature of business to be conducted by the applicant in Brazil, possibly yellow fever vaccination certificate, and visa fee.

China

China issues F visas, which allow a stay of up to 30 days per visit and can have validity up to one year. There are no exemptions for U.S. citizens. Executives should keep a checklist for a completed visa application form, valid passport, passport photo, Green Card (if applicable), invitation letter from host company or introductory letter from U.S. company, and visa fee.

India

India issues a business visa for short-term business travel allowing multiple entry for up to 10 years for U.S. citizens. Executives should keep a checklist for a completed visa application form, valid passport, two passport photographs, Green Card (if applicable), copy of U.S. driver’s license or other state-issued identification card, flight itinerary clearly showing date of departure from India, invitation from Indian company in India, letter from a U.S. company indicating purpose of travel, and visa fee.

Netherlands

U.S. citizens do not require a visa for business travel if their stay does not exceed 90 days in the year. If the stay exceeds 90 days then a Machtiging tot Voorlopig Verblijf (MVV) or temporary residence permit is required to enter Netherlands for a Green Card holder but not for a U.S. citizen.

However, a residence permit, Verblijfsvergunning, is required to live in Netherlands and, for non-EU citizens, a work permit may also be required. The residence permit is generally issued for a maximum of one year at a time for a total maximum period of five years. The residence permit is obtained by submitting a completed residence permit application form with passport and application fee to the Aliens Police. It is also necessary to register at the City Hall.

United Kingdom

U.S. citizens do not require a visa for business travel as long as their stay does not exceed six months in a year. The U.K. government is currently considering reducing this period to three months.

While the current economic recession has forced companies to re-evaluate their business models and overall document spend, it also has started to cause companies to shift their investments toward outsourcing and partnering to better control document costs, according to a survey of key business decision-makers by InfoTrends, prepared for Pitney Bowes.

Three times as many survey respondents indicated that they would increase their outsourcing investment rather than decrease it. In addition, the survey revealed that organizations are looking more closely than ever at potential partnerships in order to expand their market reach.

“While managing cost and risk remain top-of-mind for all organizations, especially in light of the current recessionary environment, businesses are beginning to realize now more than ever, the cost and efficiency benefits of managed or outsourced services that can be realized by partnering with the right outsourcing partner,” said Vincent De Palma, executive vice president and president, PBMS. “Outsourcing enables companies to focus on their core competencies and increase efficiency without making additional investments in people and technology. This helps companies become more profitable, and the use of experts in a particular area can lead to better service levels than internal departments can provide.”

Omri Duek, consultant, InfoTrends Professional & Managed Print Consulting Services, noted that “companies in all industries should consider their core competencies, especially in these tough economic times, and how managed or outsourced services can help support their non-core operations.” He explained the reasons organizations can benefit from managed services include: reducing up-front capital costs and/or operating costs, improving focus on their core business, increasing their agility (such as effectively scaling operations), adapting to a smaller workforce, looking to access best practices and technologies, wanting to improve consistency or service levels, and trying to meet environmental goals or compliance requirements.

Misconceptions About Managed Services

Despite their numerous benefits, misconceptions about managed services continue to exist. According to the survey, several myths still exist. For example:

Myth: Managed services aren’t secure

The reality is managed services are often more secure than self-managed processes. Managed Service Providers (MSPs) recognize the need for comprehensive security measures and guarantees. In fact, MSPs with expertise in highly-regulated industries such as financial services, manufacturing and healthcare are often certified and regularly audited by independent, industry-specific third parties.

Myth: Managed services aren’t cost-effective

Controlling capital costs (60 percent) and reducing operating costs (53 percent) were cited as the top two reasons companies today are outsourcing, according to the survey. Previous InfoTrends studies have verified that managed print services for example, can save organizations 20 to 25 percent of their document output costs, on average.

Myth: Managed services limit organizational control

For most organizations, managed services can actually provide greater control over business operations in the form of Key Performance Indicator (KPI) dashboards, greater cost visibility, and contracted Service Level Agreements. Also, managers can establish a single, contractually obligated contact to mitigate performance issues in a timely manner, and managed services enables organizations to quickly scale processes up and down. This agility was critical for business leaders in the study, with 87 percent of respondents indicating that this priority had increased in the past 12 months.

Large and medium-size businesses are increasingly planning to invest in IT products and staff as confidence among IT decision makers begins returning to the corporate sector. However, earlier signs of IT investment among small businesses have slipped.

In the government sector, federal government IT decision makers are showing an even higher leap in confidence.

Sentiment remains stable across the broader IT marketplace, according to the latest CDW IT Monitor, with gains in some areas balanced by uncertainty among the small business and local government sectors. The overall CDW IT Monitor score across both corporate and government sectors remained flat at 69 for the third consecutive reading.

Signs of anticipated growth in investment that first appeared in the April CDW IT Monitor are now becoming much more visible. Eighty-three percent of medium-size businesses expect to purchase new software in the next six months and 28 percent of large businesses expect to hire additional staff in the next six months, both up five percentage points since April. Additionally, 52 percent of federal IT decision makers anticipate budget increases in the next six months, an increase of 17 percent since April and the largest leap in the government sector to date.

However, this rising sentiment is not shared by all sectors. After signs of increasing confidence earlier in the year, fewer small businesses and local government organizations anticipate budgets to improve. Only 21 percent of small business IT decision makers and 17 percent of local government IT decision makers expect IT budgets to increase in the next six months, down eight and six percentage points, respectively, since April.

“This downturn has not followed the path of previous ones, making it more difficult to predict the shape of the recovery,” said Mark Gambill, the company’s executive responsible for market insights. “But IT confidence has held steady for nearly four months, and we’re now beginning to see signs of a patchy turnaround with medium and large businesses anticipating future growth.”

“The unsteady nature of this turnaround is demonstrated by the slight decline in small business confidence. Larger companies have been aggressively managing costs as well through this period, but there comes a point when investments have to be made.”

Americans are continuing to tighten their belts with almost two-thirds of Americans saying they are spending less overall and two-thirds saying they are less likely to take out a loan. They are also weaning themselves from plastic with one-third saying they are using their credit card less often than before.

Other changes in how Americans are spending, saving and borrowing behaviors include:

• Americans are saving their money in safe havens. One in five (21%) of those with personal savings and one in 10 (10%) of those with retirement savings have added bank savings and CD’s to their portfolios in the past six months.
• When it comes to their equity investments, Americans are staying the course. People are as likely to have added to stocks and mutual funds in their personal savings (8%) as to have moved personal savings out of stocks and mutual funds (9%). With their retirement savings, 10% have moved their retirement funds out of stocks and mutual funds and 7% have added to stocks and mutual funds.
• In spite of this fiscal restraint, many Americans have no cushion to weather a downturn, now or in their retirement years. Almost one-quarter of Americans (22%) say they have no personal savings and three in ten (30%) have no retirement savings.
• Middle aged and upscale Americans are cutting back most on their credit card spending. More than 4 in ten 40-49 year olds (45%) and 50-64 year olds (41%) year olds say they have used their credit cards less in the past six months. Four in ten of those earning $75,000 or more (41%) have used their credit cards less.

So what?

The economic crisis has profoundly affected consumers’ spending, saving and borrowing. Despite some shots of good news about the economy, consumers are not ready to start spending as they did before the economic crisis. But consumers don’t have to be alone during this crisis. Financial services firms can partner with them to help people save wisely and to borrow responsibly. Producers of consumer goods and services can help consumers economize by communicating value as well as small luxuries or simple pleasures. Companies might want to look into “giving back” to their communities at a time when Americans who do not have a cushion may be in need of help. It is especially important to communicate optimism so that Americans can begin to gain back confidence in their economic futures.