New CEO Reinvents JC Penney

New CEO Reinvents JC Penney

Blog Date: 2/1/12

Blog Author: Saniya Khan, Accounting and Finance

The retail store JC Penney is planning a huge revamping of stores starting February 1^st.  Some of the upcoming changes include a new logo that evokes an image of the American flag as well as a simpler way of pricing merchandise, eliminating complicated coupons and sale promotions.  All merchandise will be divided into a three tier system:  everyday prices, monthly specials, and clearance; and stores will be offering new boutique style areas that highlight a specific brand the company is working with, for example H&M and Sephora.

This new marketing campaign is headed by the company’s new chief executive, Ron Johnson, who previously was in charge of Apple’s retail strategy, and its new president, Michael Francis, who was the former chief marketing officer for Target.  The company plans on holding twelve simple sales events a year rather than the close to 600 promotions they held this past year in an effort to simply their pricing strategy for consumers and to cut back on promotional costs from over $1 billion required to advertising all the sales they held now down to spending $80 million per planned promotion.

In other cases, when a company wants to completely change their image and marketing strategy, it can take up to a year to figure out the kinks and predict potential problem areas before making the change public across stores, however, Johnson is moving fast.  With initial changes rolling out the first day of February and plans to have a new layout of the retail stores by having around 100 or so boutique-style stores-within-stores and a central service center called the “town square” by the next four years, he is wasting no time.  The goal is to increase traffic flow and profits by providing the best prices year-round for customers while saving the company money, but will this new strategy really work?  Do consumers prefer simple once-a-month sales over the excitement of a “one-day only” sale or coupons they can use anytime to save even more?  Johnson has only been with the company since the fall, but his plans are moving quickly.  Now it is up to consumers to react to these changes.

Let's Order Now: An Appetite for Success

Let's Order Now! An Appetite for Success

Blog Date: 12/05/11

Author: Eric Haslbauer, Accounting Major

Lets Order Now, affectionately referred to as LON, is a start-up company taking leaps and bounds in the small business industry. Lets Order Now^TM officially went live on 11/11/11, making the company less than a month old. Despite its nascency, LON is generating big press. M. ‘Wazi'hullah, Professor, Director: Molloy College, Entrepreneurship & Small Business Institute, is the creator and CEO of Lets Order Now. He appeared in a full page article in Long Island Business News explaining his new company. Verizon Fios Channel 1 News also aired a segment on Lets Order Now, describing the goals and ideas behind the company. So what is Lets Order Now? What are the goals of LON? And what kind of company is it?

Lets Order Now is an online social ordering system. From the perspective of a user (someone ordering from LON), this website eliminates lunch frustration. After creating a free personal account on the site, it automatically keeps track of the user's address, tastes, payments, and favorites. There are two options for ordering lunch: 1) Cuisine Calendar and 2) I Wanna Choose. Cuisine Calendar offers a certain restaurant that is specifically delivering to the user's building. I Wanna Choose is for those who do not want to order lunch from the Cuisine Calendar, enabling them to select any type of food from any restaurant that delivers to that building. Now here's the fun part! When ordering through Cuisine Calendar, the price of a meal goes down as more co-workers order. Essentially, the more people you have ordering from Cuisine Calendar, the cheaper it is for everyone! Lets Order Now's slogan "Simple Social Ordering"^TM clearly summarizes the main elements of the company. It's a quick and easy way to order cheap lunch with friends and co-workers.

On the other hand, Lets Order Now is great for restaurants too. From their perspective, this website lowers preparation and delivery fees, benefitting the restaurant. By informing the restaurant owner of a large order (30 to 40 people), the restaurant can deliver a sizable amount of meals to one location. Instead of delivering two or three orders at ten stops, the restaurant can make one trip delivering to 30 or so people. This process greatly decreases the restaurants fulfillment costs while at the same time enabling them to sell to a wider market segment. This is the magic of the whole company! In essence, it's the best of both worlds! The customers are happy because they are paying less, and the restaurant owners are happy because they are selling more. What is there to lose?

An additional aspect to Let's Order Now is that a group of about 16 students, graduates and undergraduates, are working as the Customer Order Representatives (COR). The CORs serve as the agents who promote the company. They are the people who go to the restaurants and the users, presenting Let's Order Now. Their goal is twofold. First, they are trying to convert the restaurants by assisting them in registering onto the website. Second, they are attempting to attract large buildings by convincing a collection of co-workers to order lunch together through LON. M. ‘Wazi'hullah, by assisting the students working on his company, is teaching them vital characteristics of a successful business: execution, entrepreneurship, negotiation, and sales. These students are actively learning how to execute a business idea through personal experience. Rather than memorizing or reading about people who have successfully executed a business plan, the students are actually going out and executing it themselves. It's a unique opportunity, executively educating the future leaders of the corporate world.

Lets Order Now is a prime example of a new business that has a promising future despite these difficult economic times. Although it is still early, I personally believe that Lets Order Now has a high potential for success and will become an international giant in the years to come. However, the fate of Lets Order Now rests on one universal element: Time. All we can do is wait and see how the untold future of this nascent company unfolds. 

AT&T Tie Up

AT&T Tie-Up

Blog Date: 11/21/11

Author: Eric Haslbauer, Accounting Major

AT&T, a giant in the telecommunications industry, has been in the news the past few weeks regarding its proposed acquisition of T-Mobile. Offering $39 billion for T-Mobile, AT&T Chief Executive Officer Randall Stephenson in March announced the proposed purchase of T-Mobile, a unit of Deutsche Telekom AG However, the combination of the country's second- and fourth-largest wireless carriers would violate antitrust law and "substantially lessen competition," says the U.S. Justice Department. U.S. District Judge Ellen Segal Huvelle aims to block the deal, the largest announced acquisition of the year according to data compiled by Bloomberg. "Given the size of the cancellation fee that was negotiated into this agreement (at utmost $7billion), AT&T has the incentive to fight," said Andrew Gavil, who teaches antitrust law at Howard University in Washington. "The fact that the Justice Department is challenging the deal doesn't mean they won't negotiate a resolution at some point."

In more recent news, AT&T has signaled for the first time since March that its planned acquisition is more likely to fail than to succeed. According to the Wall Street Journal, they plan on setting aside $4 billion in this year's final quarter to cover the potential cost of the deal falling apart. Deutsche Telekom AG (AT&T and T-Mobile's parent company) pulled their application for merger approval at the Federal communications Commission in order to focus on their fight with the Justice Department, which has sued to block the acquisition. This action illustrates AT&T's growing doubt in the success of their proposed merger. Does this mean AT&T is throwing in the towel? Are they giving up?

Well according to the Wall Street Journal, AT&T insisted this past Thursday that they are not ‘throwing in the towel;' rather they are strategizing and essentially attempting to strike a settlement with the Justice Department. So, which is it? Why should AT&T keep fighting? Or why should they give up?

For AT&T, the benefits of the deal are potentially huge, indicating their desire to continue fighting for permission to merge with T-Mobile. T-Mobile uses the same network technology as AT&T allowing for easy access to larger market segment. The deal also would potentially lower prices due to the overlap of technology between the companies. Perhaps most beneficial is the fact that the deal would propel AT&T ahead of rival Verizon Wireless, making them number one cell phone service in the nation. However, AT&T has failed to anticipate the antitrust officials' concerns about the wireless industry, which is already dominated by Verizon and AT&T. The involvement of the U.S. Justice Department raises a great deal of concern, suggesting that AT&T drop their proposition.

Personally, I feel AT&T should accept the unlikelihood of their acquisition and prepare to cover the losses. Ultimately, only time will tell what is to come of AT&T and T-Mobile.

Yahoo's Yin and Yang

Yahoo's Yin and YANG

Blog Date: 11/21/11

Author: Eric Haslbauer, Accounting Major

Jerry Yang, Yahoo!'s co-founder and board director, is raising red flags. Some of Yahoo!'s top shareholders and other activist shareholders, such as Third Point LLC and P. Schoenfeld Asset Management LP, are concerned with Yang and his recent role in the possible sale of Yahoo!. Yang has discussed creating a new ownership group using his 3.6% stake in the company. The Wall Street Journal reported that Mr. Yang and other Yahoo! bankers have discussed the possibility of creating an ownership group which would collectively own about 10% of Yahoo!'s shares. With a buyer who would take another 20% stake, the company could essentially buy back its stocks, increasing the size of that stake. This basic explanation of Yang's possible plan is called "leveraged recapitalization."

These concerns of the shareholders are just the most recent indecent regarding Yahoo!'s corporate situation since the firing of CEO Carl Bartz in September. Since then, the company is still considering whether to sell all or parts of itself. According to the Wall Street Journal, Yahoo! is also currently searching for a new CEO as well as discussing possible solutions to their existing tribulations. However, it ultimately comes down to one question......What is Yahoo!'s next move?

In my opinion, Yahoo! has two options: 1) Sell or 2) carry out Yang's leveraged recapitalization idea. Yang is currently meeting with several private equity firms discussing which option is in Yahoo!'s best interest, according to people familiar with the matter. Nevertheless, Yahoo!'s fate still remains unclear. It has a huge decision on its hands, and all we can do as spectators is wait in anticipation. Hopefully, we will see some closure in the near future.

Yahoo! Yard Sale

Yahoo! Yard Sale?

Blog Date: 11/11/11

Author: Eric Haslbauer, Accounting Major

Edited by: Louis Lamonte, Accounting/Management Major

Yahoo! is up for sale!!!! Several articles in both the Wall Street Journal as well as online have indicated that Yahoo! is selling itself. But the question on everyone's lips is.... to whom?

According to the Wall Street Journal, Google has met with private equity firms about potentially helping them finance a deal to buy Yahoo!. Of course, many say this deal would get a good look over by the Fed, and that the Government will never allow such a deal to go through. This belief stems from the hunch that the Fed would be hesitant to allow this acquisition due to fears of Google monopolizing the industry. Microsoft as well as the China Internet giant Alibaba has also reportedly been in talks with private equity firms to purchase Yahoo!.

In regards to Alibaba's possible purchasing of Yahoo!, Jack Ma, the CEO of the company, was quoted saying, "We are very interested in Yahoo. Our Alibaba group is important to Yahoo and Yahoo is important to us ... All the serious buyers interested in Yahoo have talked to us." According to Techrunch.com, Those buyers include: Alibaba Group investor Silver Lake Partners, Microsoft, Hellman & Friedman and Andreesen Horowitz.

Why Alibaba, you may ask? An article in the New York Times explains that Mr. Ma's history with Yahoo! goes back several years, when Yahoo! acquired a 40 percent stake in Alibaba. The relationship between the two companies, however, have some "bad blood", and Mr. Ma has said repeatedly that he wants to buy back Yahoo's 40 percent stake in his company. By buying Yahoo!, he would get that stake back.

Chris Lau summarizes the whole situation very clearly in an article he wrote on October 26th which can be found on Seekingalpha.com. Lau states, "Yahoo's business feels dated, and this showed up in its most recent results. With the exception of Yahoo Finance and original video content offered by Yahoo!, there is little reason to be excited about the company. Investors would disagree: Yahoo! is up 50.68%, closing most recently at $16.71 on speculation that Google Inc. is in the running for buying Yahoo!." Lau further explains that Google's only problem is that regulators will most likely not allow the internet giant to purchase Yahoo!, for Google has a 68% share of the market. With the acquisition of Yahoo!, Google's share would increase to about 88%, says Lau. This induces fears of monopolization, lowering Google's chances to acquire Yahoo!. Lastly, Lau closes his argument defending his opinion. He says, "Yahoo! shares already rallied to $16.71 [due to Google's perspective purchase of Yahoo! which was mentioned earlier in this article], which is within its 2011 trading range price of between $16 and $18. Buying Yahoo! now is purely speculative, and any takeover discussion may easily fall apart. The European crisis will further remind investors that "risk-off" will reduce the trading premium already priced in Yahoo's shares."

In summation, I have to agree with Lau, for he proposed the most logical argument I've read so far. However, only time can tell what is in store for Yahoo!. We will have to wait and see how this company's fate will unveil itself.

The Apple of Our "i"

Death of Steve Jobs affects more than Apple.

Apple’s former CEO, Steve Jobs, recently passed from cancer complications. Consequently, the pressing question is, will Apple continue to supply the consumer with new and appealing products. Speculation of how Apple will recover as well as what they will do to keep the market involved has the media buzzing.

(Lanier Mason) “Many investors and consumers continue to ask the question of will Apple continue to be the big leaders in the technology market and I feel as if they certainly will be. Steve Jobs was in my opinion, the parent of Apple and I believe during his tenure as CEO he has done enough so that the company will continue to prosper without his presence.”

(Anthony Viray) “What people tend to not realize is that Steve Jobs left an incredible legacy behind. I believe that Apple producers will continue to stun the consumer market with advanced technological products. With all the spotlight, Apple cannot afford  to let the death of Steve Jobs deter them from continuing supremacy in their industry.”

Despite the early passing of a beloved family member, friend and modern innovator, Steve Jobs has truly left his mark on this age of technology for years to come.

A is for APPL

Steve Jobs, one of technology's greatest minds, saddly died fighting cancer not even a week ago.  His death comes at a time of economic struggles, and therefore, many are asking: what is to become of Apple?  How will it fair in the market now that the muse, the inspiration, of this great company is no longer with us?  What's Apple's next move?

These along with various other questions are circling around the minds of many and no one can be certain what the future holds for Apple.  However, recent research indicates that Jobs's passing will not effect Apple's market as much as expected.  Even though APPL stock closed in today's maket down 2.01%, it continues to survive.  People are still investing in Apple and with the release of the new iPhone 4S, prospects are high.  Over 200,000 people preordered the new iPhone 4S (clearly a number to go down in the record books) and the release of it will more than likely help to improve APPL's numbers.  As long as Tim Cook and Apple continues to live in Jobs's memory, creating and continuously innovating, Apple will thrive again.  Just like any other great company, Apple just needs to pick itself up, rub off the dust, and get back into it.  Every company has obstacles and falls it must deal with, but it is how they rebound from such hurdles that make them great! 

All we can really do is wait and see.  And expect great things from Apple in the coming months. God Bless Steve Jobs - he will be missed.

Eric Haslbauer and Lance Mason

Yahoo! open to selling?!?

Amid the news of Yahoo! removing CEO Carol Bartz, the Wall Street Journal cited 'people familiar with the matter' as stating Yahoo! is willing to sell to the right bidder.  As to what the 'right bidder' is, one can only guess.  In 2008, Microsft offered Yahoo! $44.6 billion but it flat out refused (Yahoo! was the top search engine at the time selling at $37 a share).  Three years later, Yahoo! is selling at $13 a share and only seems to be decreasing even more.  Now, finding the 'right bidder' will probably prove to be much harder than Yahoo! executives expect.  Of lately, Yahoo seems to be returning to Microsoft in hope of stirring some sort of agreement.  The two companies have agreed to have Microsoft's Bing search engine power Yahoo!'s search engine.  Although this seems somewhat insignificant, it is small compromises such as these that eventually can lead to the subsidizing of companies.  From an outside perspective, Yahoo! either needs to strategically reanalyze itself in hope of discovering new ways to grow, or find said 'right bidder'.  Personally, I see Yahoo! becoming a subsidiary of Microsoft in the next few years.

Eric Haslbauer

How Leadership in the Business World Relates to Students

As students, we are nearing the end of the Fall Semester. This is the time where a majority of students, including myself, have group projects and presentations to hand in within a couple of weeks. I know some students have a difficult time coordinating meet up times, brainstorming what topic they would like to talk about, and lastly, bringing out the best work your group can display. To help students cope with these kinds of issues I came across an interesting article. This past week, BusinessWeek had an article written by Nick Tasler discussing the Five Secrets of Charismatic Leadership. After reading the article I definitely noticed a connection where I could relate the article to a classroom setting.

Nick Tasler points out that “Displaying charismatic leadership is one of the most effective ways to boost everything from motivation and creativity to productivity and plain old satisfaction.” Nick discusses how to influence and motivate people using “The Charismatic Narrative” structure. Nick breaks down this structure in five steps. They are the following:

1. Define the main character- “story must be about someone your audience cares about.”
2. Describe the happy ending- can be simple as “your job will be secure.”
3. Describe the not-so-happy ending- “job may be in jeopardy"
4. Describe what action you want them to take-“What is it that you want them to do."
5. Just add watery eyes- “use positive emotions”

In the first step Nick discusses how to motivate people and bring the best out of group, you must “define the main character.” When working on a group project, as students, we can use this step to discuss how our project will capture the audience and fellow classmates’ attention. Ultimately, from our group project, we are trying to convey and teach our audience the importance of our topic.

The second step is to “describe the happy ending.” Here students working on a group project can articulate to each other the importance of putting your best effort. For example, we can state that if we all put the time and effort into making the project the best we can, we all should receive an A on the project.

In the third step is to “describe the no-so- happy ending.” We all have been there at times when a person in the group may have difficulty in assisting the group with the project. As this step states, articulating that if we all do not work together, the group as a whole will suffer and our grade will suffer too.

The fourth step in this five step process is to “describe what action you want them to take.” This step is a crucial part in working on a group project. When a project is assigned, the group should formulate a plan in which the project will be equally divided among each student. Keep in mind that each student has unique qualities and skills that they bring to the group. The project should be tailored to each individual’s skills and qualities. This allows for everyone to contribute and brainstorm on what they need to accomplish in order to finish the project. This also helps with easing any uncertainty that may arise within the group.

Lastly, the fifth step “just add watery eyes.” This step is to help leaders and managers use positive attitude and emotions to help bring the best out of others. When working on a group project, negativity can definitely hamper the creativity and atmosphere of the group. Using positive attitude and emotions motivates us to work harder and effectively. In the end, we want to be able to present a compelling project with facts and examples that will support the group topic.

In conclusion, I hope this blog will help you bring out the best in others whether it is working on a group project for school or for work. Just remember in whatever project you undertake, make sure that you put 100% into it.

Until next blog =)

Everardo L. Huesca

Tasler, Nick. Businessweek. n.d. 2 November 2010 .