When Stars and Cash Cows collide...

As a student of the stock market, I am always interested in the evolution of companies and the succession of the world's largest.  When it comes to trying to invest for the long term, greater than five years, its common for investors to go after the big name companies that exist like Wal-Mart, GE, Microsoft, Exxon Mobil, etc.   These companies are often revered as cash cows with a distinct competitive advantage in a specific area that has helped them to grow very large.  Unfortunately, cash cows often don't last very long in the grand scheme of things.  The up and coming rising stars tend to introduce new products and services that eventually eclipse the business models that cash cows set up successfully.

One area that has intrigued my interest lately is the Microsoft vs. Google battle.  In this example, Microsoft would be the cash cow and Google the star.  Ten years ago, Microsoft was the dominating company in the software business and Google was being formed by two Stanford Grad students in a garage.  Fast forward to 2008, and Microsoft is trying to purchase all or part of Yahoo - the jury is still out - in order to compete against the up and coming Google behemoth.  Google is essentially competing against Microsoft in everything from style to software to paid advertising on their search site to inventing new products out of thin air.  Furthermore, Google consistently reigns as the top employer for recent MBA graduates and I don't think its entirely because of their free meals in their cafeteria.  

In an arena like the technology industry where consumer tastes and preferences change on a daily basis, it will be interesting to see how Microsoft takes on the challenges they are currently facing.  If the Yahoo merger does not go through, will they be able to maintain their cash cow status as Google simultaneously replaces all that Microsoft sells and provides it on the web for free?  In the upcoming posts, I hope to dissect this battle between the two Tech-titans as well as determine the future of online media as we know it today.  

J&J Credo - more trouble than its worth?

An assignment for class this past week involved dissecting the intricacies of Johnson & Johnson's credo.  J&J is the esteemed health care company that has proven to be not only one of the best investments over the past five decades, but also the leader of its industry in developing pharmaceuticals and health care products.  The one page J&J Credo summarizes the four major stakeholders of the company and their responsibilities to each one.  

At first glance I was a little annoyed by all of the lofty goals stated in this document.  I found it unrealistic, cocky, and overbearing that a company could realistically think that they had the ability to please all of these stakeholders.  I always thought that being excellent at one thing was always better than being OK at many things.  But after further examination, I learned that their credo was created prior to the company going public and becoming the behemoth it is today.  Furthermore, the fact that their stock is up 6,000%+ over the past 4 decades compared to the S&P's measly 1,000+% over the same period, goes to show that they do deserve some credit.   I think it is difficult for every company to start out aiming to please every single aspect of their business.  Because businesses are run by people and people are imperfect, there will always be shortcomings.   However, without this credo in place, who knows how the Tylenol scandal would've transpired.  Maybe if more companies created credos like JNJ's at the beginning of existence, they will not struggle as frequently when deciding to make the right decision.

Day 1

I'm Robbie Gee and I'm pursuing an MBA at the University of Pittsburgh Katz Business School.  As part of my Marketing Management class, I am required to begin a learning journal to explore the nuances of what we'll learn within the class and compare it to real life events outside the classroom bubble.  As part of the class, my first post will state the rules my group and I set forth so that we act as a cohesive team on our assignments.  Below are the standards we have set forth in order to dissect these cases in a equal manner

1.  Prior to reading the case, the team will assign questions each person is responsible for.

2.  Each individual will read the case on their own.

3.  Each individual will complete their question and prepare for the group meeting that will occur to discuss the case prior to its due date.

Now for the fun part.  The above rules are somewhat rudimentary when breaking down group work.  If a team member does not care to participate in the group work, there is a chance that they will be eliminated from the team.  After each case, our team will allocate 20 points across the team.  If the team acted equally each person will receive five points.  However, if a team member believes that there is some inequality, then points will be lopsided.  If a team member continues to receive low points and not a standard five points, he or she will be "voted off the island" and asked to leave the group.  Hopefully this will not occur, however, what would an MBA program be without such exciting possibilities!?!?