All Systems Go

By |2018-10-17T06:20:08-05:00October 17th, 2018|Global Market Update|

What makes some companies take off while others struggle? Apollo 7 launch. Source: NASA There are lots of examples: Facebook created the dominant digital social network, while other platforms failed. Costco is a huge discount club while Wal-Mart has struggled. Johnson & Johnson has succeeded across a broad range of health-care businesses, while others have faltered, brought down by scandals or shrinking markets. What’s the difference? It comes down to leadership. Successful companies need vision: leaders who create a sense of community where their [...]

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Billions and Billions

By |2018-07-23T06:47:03-05:00July 23rd, 2018|Global Market Update|

What’s up with the European Union and technology fines? Carina Nebula, where new stars form. Photo: Harel Boren. Source: Wikimedia Google was just fined $5 billion for antitrust violations in the EU stemming from their Android operating system. This is on top of the $2.7 billion fine they received last year over their manipulated search results. Intel was fined over $1.3 billion for paying rebates to PC makers, Microsoft was fined over $700 billion for failing to put a browser choice in a Windows [...]

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The Only Game in Town?

By |2018-05-23T06:28:00-05:00May 23rd, 2018|Global Market Update|

Should we invest in monopolies? Photo: Matthew Hull. Source: Morguefile A monopoly exists when a company is the only provider of what we need. The electric company in your area is the only way to get electricity for your home. The cable or phone company is the only way to get high-speed internet service. Companies that enjoy a huge market share have one less thing – one big thing – to worry about. They don’t have to worry about what the competition will do [...]

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Mercantilist Mistakes

By |2018-01-16T07:34:14-05:00January 16th, 2018|Global Market Update|

What is mercantilism? Spanis seaport by Claude Lorrain. Source: Wikimedia Mercantilism is a national economic policy designed to maximize the accumulation of currency reserves through trade. It promotes government regulation of an economy to augment a nation’s economic power at the expense of rival national powers. When politicians complain about a nation’s trade balance, they’re looking at the world with mercantilist glasses. Mercantilism becomes more popular when a country suffers from repeated shortages. If a country doesn’t have enough iron for its growing railroad [...]

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The Competitive Edge

By |2017-09-11T05:33:58-05:00September 11th, 2017|Global Market Update|

Why do good competitors try to become monopolies? Public Domain. Source: Wikipedia Most people enjoy competing. They know the thrill that comes from sprinting for the finish line, or fighting for critical new business. They also know that competing keeps them sharp and helps them improve what they do. If a business doesn’t serve their customers well, someone else will. Competition leads to happy customers and vigorous companies. So why would anyone want to become monopolies If businesses can eliminate the competition, they’ll secure [...]

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Healthy Competition (Part 2)

By |2017-08-15T06:52:28-05:00August 15th, 2017|Global Market Update|

What is a “wolf tree”? Photo: Michael Gaige. Source: American Forests A wolf tree is a large forest tree with a wide-spreading crown. We often find them in the middle of a dense woods, and they seem to contradict the notion of “crown shyness.” There’s nothing shy about these giants. They appear to push everyone else out of the way. But that’s an illusion. They’re older than the stand around them, sometimes by several centuries. They have gnarled and broken limbs, and the forest [...]

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Healthy Competition (Part 1)

By |2017-08-14T07:22:41-05:00August 14th, 2017|Global Market Update|

How does competition work? Photo: Doug Tengdin Sometimes we can learn about economics observing how species operate in the wild. Nature is supposed to be “red in tooth and claw” – plants and animals in a ruthless struggle for survival. But that’s not always what you see. The next time you walk through a forest, look up. There’s something interesting overhead. Mature trees spread their branches just far enough to so they don’t quite touch the neighboring tree’s crown. It’s called “crown shyness,” and [...]

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Rx: Competition

By |2017-07-17T16:46:20-05:00July 10th, 2017|Global Market Update|

What’s wrong with the health care debate? Public Domain. Source: Wikipedia I don’t pretend to have a solution. Health care is complex and multi-faceted, with lots of market and non-market elements. And it’s huge: a sixth of our $20 trillion economy. But one thing that’s so disheartening about the debate is that it mostly focusses on the demand side of the equation. Health insurance, Medicare, Medicaid, exchanges – these are all ways that we get access to care. It’s as if we debated food [...]

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Competition, Information, and Prices

By |2017-07-17T12:21:28-05:00March 2nd, 2017|Global Market Update|

What is asymmetric competition? Photo: Miguel Vieira. Source: Wikipedia Asymmetric competition is when companies are rivals but have different bases to compete from. For example, Jaguar may compete with Mercedes in the luxury auto market, but if there are no dealers that sell Jags within 100 miles of where you live, can you really say that consumers have a choice? They may be rivals, but you can’t really say that they’re competitors. The same thing happens with pharmaceuticals. A big drug company develops and [...]

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The Prize Economy

By |2017-07-17T12:21:34-05:00December 14th, 2016|Global Market Update|

There’s a prize for that. Photo: Douglas Tengdin Increasingly, organizations are using prizes to encourage innovation. Know of a way to improve smartphone voice recognition? There’s a $10,000 price for that. Design a delivery drone? $50,000. Got a solution for how to repurpose carbon emissions to reduce the potential for global warming? That’s worth over $50 million. If you can think of a persistent, society-wide problem, there’s probably a prize associated with it. McKinsey & Co. estimates that there are over 30,000 significant prizes [...]

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