Pricing

I previously blogged about pricing here regarding behaviors and pricing, and academic studies providing insights to develop strategies from.  Recently from McKinsey Quarterly on "Building a Better Pricing Structure" here, average review though:

"A pricing infrastructure can be difficult and costly to create. It requires investing appropriately, empowering the right people, articulating clear targets and goals, and managing risk. Yet the benefits of realizing true pricing excellence are worthwhile: a one-percentage-point improvement in average price of goods and services leads to an 8.7 percent increase in operating profits for the typical Global 1200 company.1 Since a well-executed pricing-improvement program often yields price increases of two to four percentage points or more, sustaining a long-term price advantage may represent roughly 15 to 25 percent of a typical company’s total profits."

Introspection on "Pain of Paying" by Dr. Dan Ariely

Dr. Dan Ariely provides introspection on daily consumer products like razors (specifically Gillette).  And of course, if this interests you then Dan's book "Predictably Irrational" provides deep insights on consumer behavior and associated economics.

Economic Forecasts

A valuable quote to remember regarding predictions on economics: "The only function of economic forecasting is to make astrology look respectable," said J.K. Galbraith, a Harvard economist.

New Currency on the Horizon for the Gulf

The Dubai concerns and continued global economic fluctuations are resulting in pushing forward the single Gulf Cooperative Council's (GCC) plans for a single currency among the 6 Gulf nations of Saudi Arabia, UAE, Qatar, Kuwait, Bahrain and Oman.  Read details here.

Interesting to note from the manufacturer and buyers of consumer goods perspective is the fact that the single currency has not been pegged yet.  Dollar? Euro? Gold? Basket?

Stephen Roach: I'm starting to worry about China's economy

Via Mr. Tony Tsai, CEO – BHG Retail Innovation Institute and EVP Operations – The BJ Hualian Hypermarket Co.:

"This is an article written by Stephen Roach, chairman of Morgan Stanley Asia, which is posted on the website of the Financial Times. Its original title is "I've been an optimist on China. But I‘m starting to worry". On the surface, China appears to be leading the world from recession to recovery. After coming to a virtual standstill in late 2008, at least as measured quarter-to-quarter, economic growth accelerated sharply in spring 2009. A back-of-the envelope calculation suggests China may have accounted for as much as 2% of annualized growth in inflation-adjusted world output in the second quarter of 2009. With contractions moderating elsewhere, China's rebound may have been enough in and of itself to allow the global gross domestic product to eke out a small positive gain for the first time since last summer.That's the good news. The bad news is that China's recent growth spurt comes at a steep price. Fearful that its recent economic short- fall would deepen, Chinese policymakers have opted for quantity over quality in setting the macro-strategy, the centrepiece of which is an enormous surge in infrastructure spending funded by a burst of bank lending. A macro strategy that exacerbates troubling imbalances is ultimately a recipe for failure. In many respects, that's what the global crisis and the recession of 2008-09 are all about. China will not get special dispensation from the most critical lesson of this post-crisis era."

See the complete article here.

Japan - International Growth Through Purchases / Acquisitions

"Thanks to conservative managers and years of record profits, Japanese public companies are sitting on cash reserves of more than ¥60 trillion, estimates Nikkei, a financial-news company."

States the article in the Economist "The Japanese are coming (again)" here. The figure below gives a visual insight on how Japanese companies have done this at the end of the last two decades also:

Another good article on the subject here from the International Herald Tribune. An excerpt:

"But aggressive expansion also presents challenges, especially cultural ones. Traditionally, Japanese firms emphasize seniority and stability over individual incentive and profits."

Aren't individual incentives and profits couple of the key ingredients to breakthrough innovation?

USA's International Investments Vs. Foreign Investments in the USA

The "U.S. Net International Investment Position at Yearend 2007" report here is a fantastic read published by U.S. Dept. of Economics' Bureau of Economic Analysis. It is short and gives specific numbers, while the conclusions are left to the reader.