Blog

Looking Down the Road to a RECOVERY

There is little doubt that the past bull market will eventually come to an end with the bears taking hold. A possible recession driven by inflation, political challenges, debt, geopolitical unrest. There are any number of possible nudges that could occur and spur a downward trend. While most are lost on the current “what if’s” it would be wise to look further down the road. A pull back now might just be one of your best investment opportunities, not to for short term returns, but for preparation for the next upturn. The upturn will occur and perhaps more dramatically than 2008-2018 period. To find your way through this troubling period, be comforted in the fact that in time, if you practice a long range approach, you will be rewarded. So, trouble yourself with preparation, not for a short term investment strategy, but a lovely hold, breath, wait and then wait some more. The waiting could take years, but at this point in time, it will be wise to have a longer range vision. Look out onto the horizon, as far as you might see, and at one of those distant points, that might produce some promise for returns.

Read More

2019 Year of The Boar

Year of the Boar:
This year promises to bring more ups and downs, likely much different types of ups and downs that 2018. The new normal is actually starting to be normal. Financials spring between a VIX in the low single digits one day then up to double digit percents the next. While business development is always critical, one thing is certain, there are elements in the business world we can not control. WSJ has some ideas on this, read 2019 projections article. The coming year will be a year to anticipate and try to manage for conditions in which there is very little if any control your business will have over the broader market. Therefore, turn to what you do have now, maximize your assets (financial, family, health, work force, land, buildings). All of these assets will yield long range return if you pay close attention to what you have now and minimize risk. This really isn’t revolutionary news, but during down times, it can be cause to pretend to see around the corners, what might be… this year will likely be a year in which we really don’t know what will be and if you don’t know, take measured steps.

Read More

Hiring will Heat Up!

WSC wrote earlier in the year about 2014 reaching record levels of mergers and acquisitions. There are increasing values trading hands as companies look to increase their return for stock holders. Revenues have been increasing as the economy becomes more healthy. Companies look to expand their market share or cash in on their valuations if a willing bidder comes forward. This is all an initial phase of the economic recovery. However, we are all witnessing an economic unlike anything before. So, the size of the mergers and acquisitions are larger than any seen in history. End of year totals for 2014 might approach a trillion dollars.

Phase II, Hiring: Companies will utilize their funds to purchase others companies and expand via market share but there are limits to growth through acquisition. The next large economic explanation will lead to increases in production activity… thus leading to hiring. Production in the United States is very specific to a high talent market place. Information technology, production management, sales and services… if you are in these fields, there should be plenty of opportunity. While technology has always been a safe bet in the employment market, their will be a widening need for skilled employees.

It look some time to get here, but the financial crisis of 2008 appears to be in the rearview mirror. Capital spending will soon be the order of the day after mergers and acquisitions run their course.

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More

China’s Economic Slowdown: Causes, Effects, and Interventions

China’s Economic Slowdown: Causes, Effects, and Interventions

China is the second largest economy in the world after the United States of America. Its exponential rise to prominence has made the communist country a formidable force in the global economy. However, it seems that the growth of the economy has reached its zenith and is now facing a downhill slope. The pace of growth is the slowest it has been for the Chinese economy for the past 18 months.

The Chinese authorities have acknowledged the fact that the country experienced a “slowing down” of economy for the 2nd and 3rd quarter of this year. The primary culprit is a housing/property construction slump. Reports reveal that hundreds of apartment towers in Chinese cities stand empty. Another parameter that contributed to the situation is the 2.3 per cent rise in inflation rate during the first quarter of the year.

It seems that a 27% plunge from the previous year’s statistics, coupled with a drop in new home sales was too much for the Chinese economy to handle. What complicates matters is the fact that the property market is not something that the government has full control over. Banking and investment holdings are difficult for economist to put their finger on due to “shadow banking”. Thankfully, the slowing down of Chinese economy won’t stall global trade as much of the weakness in the Chinese market has been built into valuations. Despite the valuation adjustments, the Chinese government appears determined to keep growth at a 7% clip. 7% GDP growth is the percentage of growth needed for Chinese economy to generate jobs for those leaving the western regions and entering into the urban work force. While a 7% growth might seem substantial in the US (projected growth is 2-4% for 2014) the Chinese government have lived with a necessity of having a economic engine that can absorb citizens looking for work.

The government of China has already started implementing measures to address this decline in growth. Here are some of the tactics that’s been determined by government officials as viable methods of boosting this Asian giant’s economic growth to previous levels: 1) planned railway investment, 2) tax reductions, but only for small and medium-sized businesses, 3) opening capital markets in partnership with Hong Kong. There has already been promising results and the government is expected to devise additional strategies to address the economic slump. For instance, a major stimulus is not expected but the value of Chinese currency looks to decrease compared to the US which will improve, yet again, the export revenue. The Chinese also explained that the slowing of pace is an expected consequence of the reforms being implemented throughout the country. These reforms are badly needed and hold much value in the long run. If anything we are looking at a maturation process of the second largest economy in the world.

Read More

Russia- A leader who has been blinded by his own vision

The Impact of the Russia-Ukraine Conflict on Global Economy

The escalating conflict in the Ukraine has put world leaders, economists, bankers, and investors on a state of alert. While the world watches news of events on their mobile devices or television screens to condemn atrocities and hoping for conflict resolution. Most are keeping their eye on the state of the world economy and can’t help but be worried that the crisis will have a major negative impact on global economy.

The Ukraine is a key player in the complex dynamics of European economy. The country is strategically positioned such that European markets and Russia can trade and engage freely in grain exportation. The country is one of the main exporters of wheat and corn. Continuous conflict might put the supply of grain to a halt. In addition, Ukraine’s location in the European continent has made it a preferred conduit for gas from Russia that’s being used as a major energy source by European countries. About 50% of Europe’s gas supply passes through the Ukraine and any disruption could lead to skyrocketing energy cost. Already the price of natural gas has increased by 10% in the United Kingdom.

European investors have reason to be concerned about the future of the economy since high energy prices could slow down the economic growth of the member countries of the EU. Meanwhile, in the United States, the crisis has already resulted in lower stock prices and lower Treasury yields. US and elsewhere, the price of gold has skyrocketed—a phenomenon that usually occurs when conflicts, wars and socio-political breakdown occurs.

A decade ago, Russia and the rest of the world did not engage much in trade, with the levels of interdependence but much has changed since the Russian Federation was formed. Should any sanctions be imposed on Russia because of its continued activities in the Crimean peninsula, the dynamics of global supply and demand will be affected dramatically to the point of that a global recession could be again a economic reality.

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More

Airbnb- the next wave

Airbnb and Uber Revolutionize Travel and Transport for Consumers

Airbnb is essentially an online marketplace for people to find and book accommodations anywhere in the world. This is a unique system that has changed the way people travel, but that’s not where the revolution ends. The manner by which travelers secure their living accommodations is non-traditional as well. With Airbnb, anyone with a smartphone or online access can reserve a Tuscan villa for a week or a one-room studio in Paris for a month. If the budget is tight, options for bed and breakfasts and rooms to let in private holdings are made available as well. The price range is quite staggering.

If that’s not revolutionary enough, this service is composed of a still growing community that includes 192 countries around the world. It is not surprising at all how much Airbnb has grown since its launching in San Francisco in 2008. This company has benefited many travelers, but it has also helped people in monetizing their available space. Now, even the most obscure rental locations are made known to millions of people. Since the opportunity to earn is increased, more and more property owners are joining up, which in turn is advantageous to consumers. As a result, their options are widened and they can enjoy pleasant and comfortable living spaces to their taste at very affordable prices.

Meanwhile, Uber is making inroads in the transportation industry. Uber is a startup based in San Francisco, California like Airbnb. It was founded in 2009 and now it serves around 70 cities worldwide. What sets Uber apart is its revolutionary use of applications. This software or app connects travelers and passengers with transportation services, ride sharing services, and vehicles for hire. A car reservation is made by a customer with the use of the mobile application or by sending an SMS. The customer can even track the location of the reserved car.

Disruptive companies are climbing the ranks and headed towards the top as fastest growth opportunities. Don’t look now, but the blue chips might begin to look a bit more like Airbnb or Uber.

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More

Creative Disruption

The list is long and growing; those companies that have set their aim at disrupting the corporate structures of many blue chip companies by offering affordable and accessible opportunities to consumers. Looking at Airbnb, do you see the next Hilton? Why not, they have out paced the hotel giant in terms of rooms rented this past year. Their market share includes every livable room on the planet while the hotel industry stands and watches as the rug gets pulled out from under their feet. Forbes took a close look at their model. Many would agree, the hotel industry is here to stay, but their margins are getting cut, and their customer base has been disrupted and more to come.

Many new companies are approaching venture capital firms with a business plan that is less focused on generating revenue and more about creating a way for large companies to loose the ability to complete. Rather than focusing on building a company, these start-ups are seeking ways of disrupting the giants. Urban taxi services will be the first to toss their two cents in the argument over Lyft, and Uber. There is very little the taxi industry can do to combat the creative genius behind the city car share and car for hire business models. The companies were not designed to make money, these companies were designed to disrupt the normative corporate designs.

With the access to information and expanding networks, the disruptive model can now stand on its own feet. The corporate giants, Walmart vs. Amazon, Yellow Cab v. Uber and Hilton vs. Airbnb- where does this lead to? In every way possible it leads right back to you… the consumer. What do you want and how can it be best delivered to you? Disruptive businesses are looking at how to answer this question and it is refreshing. Rather than businesses telling us what we want, it is nice to know that creative processes are underfoot to better understand the consumer and fighting to provide. VC is on the look out for disruption… even if there is not revenue targeted, increases in market share are extremely attractive as corporate business models are being re-shaped.

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More

Facebook sets a new standard with Virtual Reality

Facebook has purchased the future with a brilliant bet on virtual reality technology. Few economic or investment analysts will say anything positive about the two billion dollar bet on Oculus VR Inc. The reason analysts are not able to see the value is because the fertile ground of VR remains a short bridge away. That short bridge has been traveled by amazing visionaries before, some times alone and sometimes with teams of people with talent and funding. Facebook has purchased a ticket that will ring-in a new way of not just seeing but of being in the world. The vault has been unlocked on a way of relating. Facebook’s purchase of Oculus VR Inc. has been described as a defensive move to insulate the social media platform from competitors. This defensive move will prove to be an explosion in the advancement of technologies. With this dye cast, William Scott Consulting will be seeking out new opportunities in the VR space. This is a brave new world that will soon cross dramatically through gaming and then into science, economic, political… the list is long…. Exposing the human senses to a four dimensional space of experience will allow a platform for amazing new discoveries. Imagine heart surgery with the patient in Germany and the surgeon in New York. The VR interfaces allowing for four diminutional experience to the surgeon to provide the needed cuts and sutures. The VR interfaces can allow engineers to design ecologically sensitive clean coal plants that filter emissions. Why, because the engineer can actually experience the designs. While this might seem like science fiction tale, there is opportunity here, everywhere. Facebook won’t be able keep this bottled up as they look to set pace. Funding is one aspect of advancements with VR, but what will truly make VR take root are human minds and hearts. The future is exceptionally bright and it is my hope that VR will move quickly into gaming and then into an array of professional fields. William Scott Consulting will be on the lookout for those minds and hearts to support their efforts. If you are interested in partnerships in this field please reach out to WSC.

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More

GM’s Revolution and Revelation

Mary Barra has done what few in her position from the prior General Motors leadership would have- admit error and face the music. This admission of guilt, “Terrible things happened…” from the top post at one of the leading auto makers in the world stands to show sorrow for the families who lost loved ones and a revolution in ethical leadership. General Motors leadership were know to have paid little-to-no attention to the manufacturing floor as they focused on the C- Suite. The financial crisis of the 2008-2010 period led to a dis-embowed GM and congressional hearings that were aimed at prying the truth from the auto industry.

building-150x150Refreshing to have a leader actually layout the painful history of denial and coverup that led to the deaths of GM owners. A full review of safety protocols at the GM plants and a management team that will be accountable to the public for their misdeeds, a welcome change. In her presentation on CNN, she did a wonderful job capturing what many leaders of the past did not, the importance of honesty with customers. This marks a revolution in the American auto industry as the leadership begins to catch up with a dynamic new economic model, the Knowledge Era. The consumer is smart, eager to know and has the resources available to them to make informed decisions. My hat is off to this new brand of leadership at GM!

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More

Block Buster 2014

Putting all of the Eastern Europe crisis to the side and allowing the potential slow down to the Chinese market to slip from your mind- allow yourself to become grounded in the reality of the United States of America economic recovery. We are well beyond recovery- living and working the the San Francisco Bay Area provides hyper-explosure to the virtues of intellectual capacity and unleashing human creativity.

Block Buster 2014: This year could mark record M & A. Check out the article about mergers and acquisitions reported by Credit Suisse, “M &A- the long awaited boom is coming” . We are smack dab in the middle of companies moving extremely rapidly from idea, to product development to sale and lastly to buyout. There is one very important difference between the current technology boom and boom of the late 90′s. The difference between this decade and the last two; Technology companies must produce a product that attracts a client or customer base (by the millions). Revenue remains a non-issue- still. However, customers must engage with the product and with this engagement the attraction for investors and for the market centers on marketing (ad sales). Technology through cloud based services is a different animal than much of the social media based technology. Watch as 2014 marks the start of a rapid buying spree of large cash holding corporations as they gobble up technologies most viable companies of the future. High cash value companies in technology are no longer just technology companies. Google, Apple and Facebook have become masters of the acquisition. Through their ever present ear-to-the-ground and their ability to execrate corporate growth through product development- the only thing these cash holding companies have to worry about is one another. So, prepare for the next generation of General Electrics and AT&T- the maturation of technology companies through massive M and A and 2014 will be remembered as the coming out party for a technology. Technology is no longer a disrupter but an institution of great wealth, power and ability to acquire.

If you are looking for more information on the business growth opportunities follow us at WSconsultingSF on Twitter and on William Scott Consulting on Facebook.

Read More