PTMBA students in the press!

Everyday at Vlerick, we meet students who make news … After Movember (see here, here and here), and Peter in a newspaper for Telenet (sorry I have no link), Danny is on YouTube, interviewed during the Fibre to the Home Conference 2012 in Germany. Here is the video:

Who is next?

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International Business in Context – lesson 1: learn to speak like a New Yorker

Welcome to this first infosession for your MBA trip to New York!

Doing business with Americans is very easy but you must first understand them. In this first class, we’ll learn how New Yorkers speak, what they say and what they don’t. Enjoy!

 

;-)

Sixth set of results in!

Like a few weeks ago, we received some results on Friday noon. This time, it was for Human Resources Management. For this course, we had to give two papers:

  1. a group paper dealing with “applying the course on a HR topic of your interest into the reality of your organizations”. In a group of three, we chose to tackle the different cultures in international companies.
  2. an individual exam-case about Datadot, a SME with some HR issues.

As usual, here is the graphical representation of the results distribution:

Distribution of grades in HRM in Apollo MBA Leuven 2012 Basically you take the same distribution as last time (although it’s completely unrelated, I know) and your remove the A+, the B- and one F (unfortunately, there are still one F). Congratulations to everyone! :-)

Wacc! Wacc!

Duck 3Yesterday in the Corporate Financial Management class, Prof. Dr. Mathieu Luypaert talked again about the WACC. As I arrived late and it’s not a habit, my attention level was maybe a bit higher than when I arrive on time ;-) So I became more interested in the WACC …

The WACC (Weighted Average Cost of Capital) is defined as “the rate that a company is expected to pay on average to all its security holders to finance its assets” (Wikipedia). It is then very different than the sound of a duck (btw the latter is also spelled differently: “quack”). As usual, Investopedia has the exact same formula Prof. Luypaert gave us (always cross-check ;-) – legend in the Investopedia article) and a nice explanation video …

WACC formula (from Investopedia)

Now, as I am working in the pharmaceutical sector, I was interested in the WACCs of pharma companies. For that purpose, Wikiwealth seems to give a straightforward way to get this value. Here are the WACCs of top pharma companies according to Wikiwealth (as of Feb. 2012):

Company WACC
Abbott (ABT) 7%
AstraZeneca 7%
Novartis (NVS) 7%
Johnson & Johnson (JNJ) 7%
Merck & Co. (MRK) 7%
Eli Lilly & Co. (LLY) 8%
GlaxoSmithKline (GSK) 8%
Pfizer (PFE) 8%
Sanofi-Aventis (SNY) 8%

So the WACC of pharma companies is around 7-8%. It’s a bit less that Apple (10%) – I know the comparison is stupid but I don’t think we had any class recently that didn’t mention that company. I was also briefly looking at other big, well-known companies and found that, according to Wikiwealth, their WACCs are around 7-9% for most of them. Some notable exceptions are for instance Kellogg (at 6%) or, at the other end of the spectrum, UBS (at 12%) or HSBC (at 14%).

With that, I’m leaving you here and heading for 6-7 hours of Corporate Financial Management …

Photo credit: Duck 3 by Phil_Parker on Flickr (CC-by)

Competitiveness and the USA

One year ago, HBR gave ways to fix capitalism. Its special report in the coming March 2012 issue will be about restoring US competitiveness. Wikipedia defines competitiveness as “a comparative concept of the ability and performance of a firm, sub-sector or country to sell and supply goods and/or services in a given market“. Instead of comparing the USA directly against other countries at competitiveness level, Michael Porter (the same one, yes) and Jan Rivkin take it indirectly, re-defining the USA as “a competitive location to the extent that companies operating in the U.S. are able to compete successfully in the global economy while supporting high and rising living standards for the average American“. In their article, they give several examples of what the competitiveness of the USA is and what it is not. Two videos on hbr.org show interviews from American CEOs on the biggest threat to US competitiveness and potential solutions from businesses. These videos enumerate a list of items that either cause problems or could solve the said issue (sometimes, an issue can also be a solution) and are a light summary of what is written in the paper.

Following Porter and Rivkin, there are a number of economic performance indicators going in the wrong direction: reduced productivity, disappearing job growth, slowly growing wages, unfavorable international trade and investment balance and finally, a lack of confidence of American managers for the future. Unfortunately these indicators are part of what constitutes competitiveness:

  • From a macro perspective, a competitive nation requires sound monetary and fiscal policies (such as manageable government debt levels), strong human development (good health care and K–12 education systems), and effective political institutions.
  • From a micro perspective, a competitive nation exhibits a sound business environment (including modern transport and communications infrastructure, high-quality research institutions, streamlined regulation, sophisticated local consumers, and effective capital markets) as well as strong clusters of firms and supporting institutions in particular fields, such as information technology in Silicon Valley and energy in Houston.

(directly from the article)

Although this comes from interviews with HBS alumni, it goes in the same direction as the last Global Competitiveness Report (2011-2012) from the World Economic Forum. In this report the USA continue to lose its leadership position in competitiveness (they are now 5th behind Switzerland, Singapore, Sweden and Finland). America’s most problematic factors are the tax rates and regulations, its inefficient government bureaucracy and the access to financing. Government debt is also a big issue.

Porter and Rivkin don’t really give any solution. But they conclude that actions should be taken. And in the video interviews, some CEOs seem to have ready-made plans (e.g. thinking more locally, engaging in public-private parnerships, lobbying the US government to make the right changes, promoting continuous self-learning, investing in public goods, etc.).

But in the end, does it matter?

The main “opponent” to the competitiveness concept is Paul Krugman. In a 1994 paper, he argues that countries do not compete with others the way corporations do. And somehow, by defining the competitiveness of a country (here, the USA) by the competitiveness of its companies, Porter and Rivkin aknowledged that Krugman was right on this point. Back to Krugman’s paper, one may use productivity as the main component of a country economic welfare, but not competitiveness. And he finally also highlight the fact that using competitiveness risks distorting the quality of domestic economic policies (with a detailed example of the health care reform undertaken during the Clinton administration).

This reminds me of Prof. Gerooms’ course on Economics where he introduced Ricardo’s law of comparative advantage. Basically this “law” says that every country is gaining from trade (thus introducing a bit more than “just” competition). And when one digs a little bit more, one will find criticisms of this law by Porter (again), in 1985 (Ricardo was from the 19th century), when he introduced the competitive advantage. Everything is interconnected … I’m wondering if professors will address this issue of competitiveness during the trip to the USA …

Ways an Economist Says I Love You

I like applied microeconomics and graphs. Valentine’s Day was yesterday. Here is one of the 14 ways an economist says I love you :-)

An Economist's Valentine's Day

(from Elisabeth Fosslien’s portfolio)

Welcome to full-time students in the blogosphere!

The Vlerick MBA planet just got two full-time students who bravely decided to start blogging for Vlerick: Claudia Iavorenciuc (also on Twitter) and Shreyas Premsagar. You can now find what is happening in the Vlerick full-time MBA here: http://ftmbablog.vlerick.com/. Welcome to the blogosphere!

Get Down on It!

Do you fancy one last video for tonight? Here is a glimpse at a Friday evening for Vlerick Full Time and Part Time MBA students in Leuven :-) Thank you all for the cool moments!

Fifth set of results in!

It’s been a long time since we didn’t receive any results. It doesn’t mean we were idling: we had the exam in Management Accounting and Control just after the new year and we had to give back two papers on Human Resources Management late in January. The results we received today are for Management Accounting and Control (the course already appeared in this blog, about TCO). As usual, here is the graphical representation of the results distribution:

Result distribution of Apollo 2012 in Management Accounting and Control

The shape looks somehow like a bell this time (except for its tail on the left). The A+ is back, congratulations! Unfortunately, some Fs appeared too :-( Anyway, congratulations to everyone!

The farmer’s donkey and the well

It’s midnight, you can’t sleep. You again think of this damn presentation for Leadership and Organisational Behaviour you accepted to make tomorrow evening. You turn one more time in your bed, close your eyes and start again counting sheep. But you know it won’t work …

Worry no more! Here are some tales you will find entertaining. Maybe you’ll want to watch the whole batch. In that case, you can forget about sleeping tonight. But at least you will have nice stories in your head. Maybe tomorrow morning you’ll be able to sleep … Sorry, boss, I was watching Beyonders ;-)

 

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