What is Management really?

.....manusia memang senantiasa merancang..hanya tuhan yang akan menetukan..

Winds Of Change: Are We Ready For It..dats all..

Strong whispers akin to a shout indicate that the GE (general election) will be in January and that the euphoria that there will be a change in power is gathering momentum as we speak,the dramatic sometimes is more outstanding and more pleasant to hear than facts only not at a time when it matters most.Only we have to ask ourselves in check and

balance manner, is it worth it.
Am i just going to make this an experiment just for the fun of getting these "old hens" out of the farm or do i really believe that the new,untested government will work for me.The answer will be more of that it will be more for fun, as the coalition has really nothing much to offer but their self interests and compromised values in politics as their ideals stem from one extreme to another.i mean from implementation of Hudud to giving out parking tickets on Friday Prayers, its gonna be a Mad Mad World,YO!hehe
And the price of seeing whats it like the other side can be costly.Put history into place,we have had no starvation,in a melting pot of so many races, we have emerged quite friendly with all,education wise,we are never inferior,all things important in a stable lifestyle,we offer aplenty, sure ..some offbeat matters to flaky inconsiderate deftly intense corruption matters in our leaders and dignitaries, then why hasnt graduates pay increase with time,sameol domination in the business circle to a selected few,the rest we can happily say i leave Malaysia safe and happy to my descendants as i descend to my grave.And yet, at a small place in my heart,i know i can make it big, with gods help and more of my friends in high places.
A new regime?Everyone you know all your life up there that can be of any assistance will be personna non grata , same song different singers emerge, god knows which super power we will be sold to, this time with our families packaged as collateral, and between an extreme Islamic State and that of a Left Wing Liberal One,there can only be None...better the known devil than unknown angel i always say to people,this not the time to gamble with the future,guys! ...what more with so little to most of us on this planet..... wheres the beef BEEF...Salam

car sales n its relevance 2012

The Lesson of Lost Value

A new study finds that underestimating strategic risk is the number one cause of shareholder value destruction. But it doesn’t have to be.

Illustration by Mark Matcho

Many benchmarks of corporate practice start by looking at successful companies. But a recent Booz & Company survey took the opposite tack. We decided to study the biggest losers: companies that, in one way or another, had seen their fortunes go south over a 10-year period. We had gone through this exercise once before. In 2004, when the Enron, Tyco, and WorldCom scandals were fresh, we surveyed thousands of public companies and determined that, contrary to prevailing wisdom, it was not compliance issues that were most responsible for destroying shareholder value. That distinction went to the mismanagement of strategic risks — those risks embedded in the top-level decisions made by the executive team, such as what products and services to offer, whether to outsource manufacturing, or what acquisitions to make.

Our 2012 survey revealed the same culprit, and suggested that it still leads to significant value destruction. Making matters worse, the sources of strategic risk have increased. Accelerating technology development is forcing the rapid adoption of new products, services, and business models; digital information is making organizations more vulnerable to theft and loss; supply chain disruptions quickly ripple around the globe, affecting both companies and customers; consumer connectivity via social networks can broadcast missteps instantaneously to millions of people worldwide; and natural, political, or regulatory shocks can reverberate widely. Companies must learn how to effectively anticipate and hedge against these and other risks in order to survive.

To be sure, during the past decade, companies have steadily dialed up their focus on risk, in part as a reaction to the requirements of the U.S. Sarbanes-Oxley Act of 2002. But they have usually done so with a bottom-up approach that has proven flawed. Individual functions such as accounting, finance, and compliance have improved risk controls. Meanwhile, executives have made their enterprise risk management (ERM) teams accountable for identifying and evaluating the interconnected risks facing their companies.

But although ERM teams can identify and hedge risks related to relatively narrow business decisions, they do not have the mandate to evaluate the strategic risks rooted in the decisions made by senior management. An ERM team must assume that the strategic course set by senior management is sound.

For example, an ERM team can call attention to risks associated with doing business with manufacturers in Southeast Asia, but it can’t evaluate whether the company should be outsourcing to the region in the first place. This responsibility gap can be costly.

Studying the Biggest Losers

To more fully support this conclusion — that the lack of attention to risk destroys shareholder value — we must look at our study in more detail. We analyzed U.S. public companies around the world with at least US$1 billion in enterprise value on January 1, 2002 (1,053 companies met these criteria). We calculated each company’s change in enterprise value over the next 10 years, and then indexed each company’s annualized return to that of its industry benchmark to control for industry-specific effects. This allowed us to zero in on the biggest losers — the companies that experienced the most dramatic losses of enterprise value. Only 103 companies had annualized returns relative to their respective industry benchmarks that were worse than negative 10 percent. This group corresponded to the bottom 10 percent of performers in our overall sample.

We checked to see if the companies on our list of the biggest losers were simply the weakest companies in one or two industries in terminal decline. But this was not the case. There was broad industry representation among the bottom performers.

Next, to get at the root cause of this lost value, we conducted an event analysis by going back to news reports, press articles, and brokerage reports for each of the 103 companies before and after their loss of value. We then assigned each company’s economic decline to one of four categories.

The first category included major strategic blunders (such as new product or new market failures) or instances when a company was caught flat-footed by a major industry shift (such as digitization of content). We included failed mergers and acquisitions in this category, as well as dramatic shifts in major enterprise value drivers (for example, a major input cost), because these occurrences should have been foreseen. This category includes, for example, Time Warner and its widely criticized merger with AOL in 2000.

In the second category, we grouped together major operational problems, such as supply chain disruptions, customer service breakdowns, and operational accidents, that had caused substantial shareholder value destruction. A high-profile example is the April 2010 Deepwater Horizon offshore oil rig explosion and leak in the Gulf Coast, an event that wiped out more than $50 billion in BP’s shareholder value in the days and weeks following the accident.

The third category included fraud, accounting problems, ethics violations, and other failures to comply with laws, standards, or ethics. During the 10-year time frame we analyzed, a few prominent examples were Tyco’s accounting and discrimination lawsuits in 2002 and Tenet Healthcare’s 2006 legal battles over improper medical and business practices.

In the fourth category, we identified declines resulting from external shocks that were natural, political, or regulatory. We narrowed these situations down to circumstances in which the external event could not be controlled or easily anticipated by the company. For example, USEC — a supplier of enriched uranium for nuclear power plants — saw a sudden and sharp decline in enterprise value after the 2011 Japanese tsunami and ensuing nuclear disaster.

The results are unambiguous. Among the 103 companies studied, strategic blunders were the primary culprit a remarkable 81 percent of the time. (See Exhibit.) When we segmented the data by industry and geography, we found some variations; for example, strategic failures are particularly acute in the financial-services industry, and Europe has more operational problems than the U.S. or Asia. Nevertheless, strategic failure remained the major cause in these cases as well.

About half the time, the loss of value occurred gradually — over many months, or even years if the company took too long to grasp a changed strategic environment or lacked the agility to react. The other half of the time, the lost value occurred in a matter of months, weeks, or even days. Sometimes these sharp shocks were caused by strategic failure (for example, being caught by surprise when a competitor introduced a superior product), and sometimes they resulted from an operational issue, compliance problem, or external event that overwhelmed the company.

Often, it is a confluence of events that leads to value destruction. To better understand these more complex situations, we segmented loss drivers into primary, secondary, tertiary, and quaternary causes. But even when second-order causes were taken into account, strategic failure caused more than 60 percent of shareholder value destruction.

The Resilient Company

How should management respond to the threat posed by strategic risks? Senior leaders can’t rely on ERM teams to make the enterprise more strategically resilient, because ERM teams do not have the scope to question the strategic decisions that set the company’s course and undergird its operations. Make no mistake, the ERM function is vital: Once handed a strategic plan, these teams identify and quantify risks and then assign people to build continuity plans. Thus, ERM groups play an essential role in addressing frequently encountered risks in areas such as compliance, ethics, finance, and accounting, as well as safety. (The research shows that some companies could also stand to improve in these areas, but in general, most companies have a well-functioning program in place.) However, ERM groups can’t be the only source of protection, especially when it comes to the most potentially disruptive issues.

Instead, what senior executives need is a more balanced approach to strategic decision making, augmenting traditional cost and value considerations. They need to adopt an element of ensuring resiliency that is critical, yet currently missing in most companies: a top-down view of risk. To improve their risk management capabilities, executives should add the following three steps to their decision-making process — all of which are outside the scope of most ERM teams.

1.  Broaden awareness about uncertainty and risk. We expect change to continue accelerating and uncertainties to increase. Extreme events with extreme consequences cannot be accurately predicted, but they can be anticipated. Management teams need to think broadly about what could occur and constantly layer new risks into their calculations as these risks emerge.

2.  Integrate risk awareness directly into strategic decision making. By conducting more conversations about risk at the top levels of the company, looping in key individuals as needed, management acquires a full understanding of the uncertainties — both upside and downside — inherent in strategic decision making.

3.  Focus on strategic resiliency. Managers need to consider how strategic decisions can affect resiliency, incorporate resiliency into all decision making, and always be on the lookout for more strategically resilient alternatives in order to build greater corporate agility.

Just as managers can make use of advanced tools to analyze cost, revenue, profits, and value, they also need sophisticated tools — such as scenario planning, wargaming, and trend analysis — to judge the potential risks of the decisions they are making before turning the strategy over to the ERM team. Ultimately, companies need both a robust ERM function and leaders willing to evaluate risk at the highest level of strategic thinking. This combination will bridge the gap, enabling executives to preserve and grow shareholder value.

Kicking the Sales Promotion Habit

Addiction to discounts is costly for retailers, but in moderation, promotions can boost profits and brand value.

Illustration by Gary Taxali

It’s a tough world for retailers. New technologies enabling consumers to compare products and prices online have permanently changed the in-store shopping experience. Meanwhile, a sluggish economy and rising competition are testing consumers’ brand loyalty. Many retailers are responding with price promotions in a bid to keep people coming through the doors. But this short-term fix often exacerbates the very problems retailers aim to remedy. Over time, promotions train consumers to buy only when there’s a sale, and each new round of discounts must be deeper than the last to get their attention. As prices fall, margins suffer. Any incremental revenue gains from promotions eventually shrink as the sale sign becomes a fixture in store windows. Most troubling is the long-term damage to a retailer’s brand when consumers come to see it as a place that always has sales.

In short, the overuse of promotions can become an addictive behavior that can deeply damage a company’s brand identity. Yet a drastic change to eliminate promotions is not the answer: Witness the J.C. Penney Corporation’s failed attempt in early 2012 to purge the word salefrom its marketing playbook in favor of everyday low pricing. Customers conditioned to expect frequent, heavily advertised discounts at J.C. Penney stayed away. In the three months following the change, sales fell 20 percent and store traffic dropped 10 percent. It cost the executive overseeing merchandising and marketing his job. (As of August 2012, CEO Ron Johnson continued to support the retailer’s transformation toward everyday low pricing, despite these early setbacks.)

Promotions are a reality in today’s marketplace, but they don’t have to hurt your business. Like so many other potentially addictive behaviors, promotions can be healthy in moderation. Used judiciously, they can boost sales and profitability, while enhancing a brand and creating a competitive advantage. The following five steps can help retailers build an effective promotions capability, consistent with their brand positioning and customer expectations, and in support of their company’s long-term goals.

Step 1: Acknowledge the problem. Accept that the current approach isn’t working, and must change. More retailers are coming to this realization as their financial results continue to falter. They’ve also been disappointed with new digital promotional options, such as Groupon-style “daily deals” that flood retailers with shoppers who seldom become repeat customers.

Step 2: Evaluate current promotions. Take stock of existing discount methods, such as in-store promotions, coupons, loyalty cards, discounts for credit card users, and markdowns, as well as the frequency with which each is used. These discount methods can be good or bad, depending on the retailer’s overall objectives. Enhancing awareness of the differences between types of promotions and how each affects critical factors such as profitability and brand perception enables retailers to choose those that best serve their goals.

Identifying such differences requires a rigorous approach to categorizing promotions and determining the incremental impact each has on key drivers of profitability, such as units sold, store traffic, conversion of traffic into sales, units per transaction, and average gross margin per unit sold. First, retailers need to understand the key characteristics that differentiate promotions — for example, eligibility (is the promotion available to all customers or only a subset?), product inclusion (which products are included in the promotion?), and merchandising support (is the promotion supported by advertising, either in stores or through general media?). After considering these key characteristics, retailers should match promotions with results, adjusting for various effects. In specialty retail stores, for instance, traffic varies by time of year (it is higher between Thanksgiving and Christmas than during other times of the year) and day of the week (during an average week, traffic is highest on Saturday and lower at the beginning of the workweek). Next, retailers should use regression analysis to calculate the incremental impact of the different promotions on each driver of profitability and estimate what that driver’s level would have been without the promotion. This analysis shows which types of events bring more shoppers to the store, which ones cause more shoppers to buy, and which ones lead them to put more items in their baskets. Finally, retailers need to compute the profitability of each type of promotion, basing it on incremental gross margin.

he most effective promotions tend to be targeted to selected customers; such promotions include “friends and family” events, loyalty club discounts, and other discrete efforts to reach particular groups. These tend to drive store traffic and often give a bigger boost to sales and profits with less risk to the brand. Giving coupons to shoppers to use the next time they come to the store also tends to drive conversion. By comparison, promotions open to all customers and trumpeted in store signs and media advertising (for example, across-the-board “percent-off” discounts) typically provide less incremental gross margin benefit while posing more brand risk. The more frequent and widespread such a promotion is, the more it cheapens the brand in consumers’ eyes.

Step 3: Lay out a path to recovery. Retailers should first ensure that a unified plan that aligns their promotions and brand image is in place. Neiman Marcus and Nordstrom have accomplished this by bolstering their brands and bottom lines through tactics such as targeting discounts to loyalty club members and offering only infrequent storewide sales that encourage shoppers to stock up.

Increasing coherence requires collaboration between business units that often operate in silos. But if a retailer’s sales and marketing staffs work together, they can develop reinforcing capabilities to create synergies between promotions and brands. Effective promotions activate brand messages and support consumer strategies. For example, promotions can jump-start a product launch by giving customers an incentive to try the new offering.

Start slowly; consumers don’t like sudden changes in familiar practices. J.C. Penney learned this the hard way, as did Walmart when it added more deep “rollbacks” (temporary price reductions) to its longtime strategy of “everyday low pricing” in the summer of 2010 in an effort to stimulate sales. Customers were confused, which led Walmart to return to its original strategy just a few months later.

Gradually phase out the promotions that are most harmful to your brand and that resonate least with consumers, while emphasizing those that serve both your brand and financial objectives. Using the knowledge and techniques developed in Step 2, sketch out a range of options for your new promotions strategy.

Step 4: Track your progress. Monitor “healthy” metrics that show how your new promotions strategy affects your long-term goals. For example, tracking profit growth tells you whether promotions are driving enough additional gross margin from selling more units at lower prices to offset the lost gross margin from not selling at the higher original prices. Tracking baseline sales shows the strength of your brand by measuring sales made without promotions. It’s one of the best signs that investing in your brand is paying off. You should also keep track of the frequency of promotions: How many days each year do you offer them? The higher the number, the greater the risk to your brand. One leading specialty apparel retailer didn’t realize how serious its promotion addiction had become until it began to track all its discounting activity. It was running promotions on more than 90 percent of the days its stores were open. Finally, monitor the percentage of sales at different stages of the pricing life cycle — at regular price, at promotional price, and on markdown. The higher the percentage of sales at earlier stages, the better.

At the same time, ignore “unhealthy” metrics that could lead you back into a promotions strategy that can hurt your brand and bottom line. For example, focusing on revenue growth reinforces the “sales at any cost” mentality that retailers need to shake.

Step 5: Persevere. Recovery is a marathon, not a sprint. As you examine the key metrics, remember to measure success from a long-term perspective rather than fixating on the immediate impact of individual promotions. Short-term metrics capture neither the potential brand damage from promotions nor the benefits of brand building, which bears fruit over time. Companies that try to change their promotional habits often panic when short-term sales drop, and they revert to their old ways. They don’t realize that the initial effect of cutting back on discounts is almost always a decline in sales. But a hasty retreat into poorly planned, last-minute promotions is not the answer. It only increases the damage to a brand. Ride out the ups and downs, stay focused on the long term, and embed your goals in the company culture to make sure the change takes hold. Ultimately, you will replace your harmful addiction with a powerful new promotions capability that strengthens your brand and your bottom line.

Top 10 Best-Selling Recond and Used Cars

If you want to drive something different, or if you just want a great bargain on cars, there is only one place to go – the grey import market.

Without a shadow of doubt, grey-importers throw the veil off countless of models that would otherwise not have made it to our shores. There’s more, mind you. Grey importers also offer popular, reconditioned or used cars at a price that is more reachable than if the same car was brand new.

So in effect, the grey market do add colour to the roads, which explains their popularity. But among the lot, which sells the most? We’ve compiled a list of the 10 hottest selling cars in the grey market today.

#1 Toyota Alphard

This is, by a large margin and a half, one of the most popular models that are being bought today. And why not, this luxury MPV has the size and design that projects presence. Its interior is adequately spacious, which is able to accommodate up to seven people in a two-two-three layout.

Prices vary. The reconditioned MPV goes from around RM160,000 for a 2007 Alphard with a 2.4 litre engine to around RM350,000 for a fully kitted 2010 Alphard with a 3.5 litre V6. The price also gets adjustments with the amount of optional equipment that comes with it, so choose wisely.

Search: Toyota Alphard at otofest 2012

#2 Toyota Vellfire

Second on the list, and this isn’t surprising, is the Vellfire – which is essentially an Alphard with a different fascia. The difference is their individual ‘character’. According to Toyota’s press release, the Alphard ‘emphasizes elegance and refinement’ and the Vellfire ‘accentuates power and innovation.’

A majority of the Vellfires draw power from the 3.5 litre V6. A 2010 Vellfire could go for around RM440,000 while you’ll get the keys to a 2008 Vellfire for around RM260,000. The prices drop lower for 2.4 litre models, which ranges somewhere from RM180,000 to RM250,000.

Search: Toyota Vellfire at otofest 2012

#3 Audi Q7

There is only a handful of SUVs out there that looks as beefy and powerful as the Audi Q7. Yes, it is huge, looks intimidating and is properly luxurious. There are two levels of trim – standard and S line. Engine choices also vary. Depending on the model year, there are the 3.0 litre TFSI, 3.6 litre FSI, 4.2 litre FSI petrol engines and the 3.0 litre TDI diesel engine.

Search: Audi Q7 at otofest 2012

#4 Audi A5

You can find the full A5 range here. Not just the Coupe, there’s also the two-door Cabriolet and the four-door Sportback. And you’re not just limited to the 2.0 litre TFSI mill – there’s the 1.8 litre TFSI, 3.0 litre V6 TFSI and the 3.2 litre V6 FSI as well, which makes the A5 properly sporty.

Now here’s what moves these cars off the lot and on the road: price. A 2008 A5 Coupe can be had for just under RM200,000. Although hard to find, but the Convertible goes for around RM290,000. While a 2011 Sportback can go for as much as RM370,000. Still, significantly lower then the price of a new A5.

Search: Audi A5 at otofest 2012

#5 BMW X6

Bought new, this Sport Activity Vehicle costs serious money; close to RM700,000. And there’s only one choice of engine, which is the 3.5 litre twin-turbo inline six. A peek into the grey market yields surprising results as the base 2011 X6 xDrive35i can be had for RM650,000 and it goes down to about RM370,000 for a pre-LCI 2008 model.

Another thing to note is the choice of engines. We’ve seen the 5.0 litre V8, 4.4 litre V8 with the X6 M as well as both 3.0 litre diesel-powered variants going for nearly half the price of the new X6. Tempting, don’t you think so?

Search: BMW X6 at otofest 2012

#6 Mercedes-Benz C-Class

Taking your first steps into the luxury car world may not be as expensive as you thought. And if the sales volume is anything to go by, so do plenty of people. The W204 is a handsome car even before it went though a mid-lifecycle design revision and it is already packed with technology that focuses of safety as well as performance and economy.

How much? The C-Class is priced in the ballpark of RM200,000, which makes it extremely affordable. Price differs when it comes to its model-year or the specifications that come with the car.

Search: Mercedes-Benz C-Class at otofest 2012

#7 Mercedes-Benz E-Class

A step-up from the C-Class, the E-Class is another luxury sedan you can have for not a lot of money. A new car, which is CKD, goes for approximately RM403,000 but take RM60,000 off and you can have an imported 2011 reconditioned car of the same.

And it is not limited to just the sedan. The different body style can be had for the same amount of money because the Cabriolet and Coupe versions are priced about the same as its four-door sibling.

Search: Mercedes-Benz E-Class at otofest 2012

#8 Toyota Land Cruiser

You’re looking at NATO’s vehicle of choice, which says a lot about the ruggedness of the Land Cruiser. This is, of course, not the fully armoured vehicle that armed forces use; this one is meant for civilian use. Yet, it retains all the four-wheel drive, go-everywhere capability. Engines used are as brawny as its looks – 4.4 litre and 4.7 litre, all in V8 configuration. There’s even the 4.5 litre V8 diesel engine available.

Prices vary depending on model year, trim and engine. Most 200 Series Land Cruiser (the one depicted here) are priced in the ballpark of RM350,000 to RM450,000.

Search: Toyota Land Cruiser at oto.my

#9 Toyota Land Cruiser Prado

If the Land Cruiser is too large for your liking but still want the ruggedness the SUV, then consider the Prado, the ‘smallest’ of the range. In certain parts of the globe, the Prado is available as a five-door or three-door variant. The engines are also smaller than the full-sized Land Cruiser, sporting either a 2.7 litre or 4.0 litre petrol mills, or a 3.0 litre oil burner.

Prices for the 2010-2011 model is around RM350,000 while anything before that can be had for much less.

Search: Toyota Land Cruise Prado at oto.my

#10 Porsche Cayenne

Completing this list is the Porsche Cayenne. Its frequent occurrence on the road proves the popularity of this big Porsche. You’ll find the Cayenne in all variants – petrol, diesel and hybrids are available. Shop hard enough and you’ll be able to find some fully fitted with body kits.

And it isn’t expensive considering the brand and heritage. The first generation hovers just under the RM200,000 mark and soars up to around RM850,000 for the 2011 Cayenne Turbo.

Search: Porsche Cayenne at otofest 2012