Dan Bogler Much ado about nothing at the FSA

February 9, 2010 2:59 pm by Dan Bogler

Should we care about the resignation of Hector Sants as chief executive of the UK’s Financial Services Authority?

No disrespect to Mr Sants, but the City watchdog has been a lame duck regulator since the Tories made it clear they would break up the FSA if they win the UK general election in May – which they are likely to. Mr Sants will work his notice until the summer. He has made it clear, however, that he opposes the Tory plans to dismember his organisation, with the supervisory arm being folded into the Bank of England and a new agency taking over consumer protection. Both he and his chairman, Lord Turner, have apparently turned down running the former bit in a new role as a third deputy governor of the Bank. He is an experienced and qualified banker who will no doubt find an interesting new job. So this is not a personal tragedy. Read more

Posted in Business, Finance |

Dan Bogler Glaxo shows the way in making research pay

February 5, 2010 2:48 pm by Dan Bogler

The world’s top 10 pharmaceutical companies spend around $50bn a year on research & development…but have very little to show for it.

The cost of bringing a new drug from the laboratory to market has risen to around $1bn and, in an influential study released last year, McKinsey estimated that the industry’s return on R&D over the past decade has averaged just 7 per cent, below its cost of capital. It is startling that companies boasting operating margins of 30 per cent or more are actually destroying value in their core activity. No wonder the sector has been de-rated so substantially over the past 10 years. Read more

Posted in Pharmaceuticals |

Dan Bogler Cadbury: never as soft-centred as you thought

February 4, 2010 3:33 pm by Dan Bogler

There has been a lot of hand-wringing in the UK about the future of Cadbury under Kraft Foods, which is currently raising debt to fund its $19bn acquisition of the chocolate maker.

It is understandable that employees, in particular, are uncertain about their jobs; it is also clear that Cadbury is a name that resonates publicly in a way that glass maker Pilkington or even BAA, the airports operator, both of whom were taken over by foreign rivals, did not. But there are some simple truths that should not be drowned in all the emotion. Read more

Posted in Business |

Dan Bogler Avatar signals shift from stars to studios

February 3, 2010 2:59 pm by Dan Bogler

Avatar has been declared the “future of movies” and it may be – though perhaps not quite in the way Hollywood thinks. Barely a month after launch it has generated more than $2bn in ticket sales, becoming the top-grossing film of all time. Its popularity is almost entirely down to the amazing 3-D special effects rather than a compelling plot or a roster of bankable stars, since it has neither of those. Is this the point where, once-and-for-all, technology overtakes talent as the driver of box office success? Pixar’s animated features, after all, have already shown the way. And since technology tends to get cheaper every year, while movie stars don’t, perhaps this signals a shift in the industry that puts power and profits back into the hands of the studios. This is not true of Avatar itself, of course. Reputedly, director James Cameron stands to make even more ($400m) than News Corp’s Fox ($300m), as shown in yesterday’s results. But as 3-D effects become commonplace, studio’s won’t need a James Cameron behind the camera every time. Read more

Posted in Business, Entertainment, Media |

Dan Bogler Toyota: sorry is the hardest word to say

February 3, 2010 11:16 am by Dan Bogler

A problem that is handled well can increase a customer’s loyalty. This is something Toyota should bear in mind as it deals with the potentially devastating recall of more than 8m cars for safety defects. Just look at last week’s healthy results from Mattel, which has recovered admirably from the “toxic toy” scandal of 2007 that forced it to pulp more than 20m products that were covered in lead paint or had bits falling off them.

What Mattel understood, from the get-go, was the need to take full responsibility and to apologise and explain, and then to keep on apologising and explaining…until consumers were sick of hearing it. Unfortunately, this goes against a deeply-held corporate instinct – applicable globally but possibly even more pronounced in Japan – to downplay problems, shift responsibility and reveal only what is absolutely necessary. Just remember how Ford and Firestone blamed each other for the exploding tires on the Ford Explorer a decade ago, a scandal that ultimately cost Ford’s then-CEO Jac Nasser his job. Read more

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Posted in Autos, Management |