Six months ago, the economy was booming. The stock market was booming, the interest rates were low and unemployment was dropping. Those indicators changed direction a few months later. It’s difficult to know where we stand from day-to-day.
I believe that the current situation is temporary and that there are long-term opportunities for growth. There will be dips along the way, sometimes very deep. Is it possible to both take advantage of the good times, and navigate through the bad?
Both must be expected. There are many “shifts” that you can do to help you through both.
1. Get out of debt. The sooner you get out of debt, the better. When you are in debt, you can’t seize opportunities. There are both good and bad times. Both good and bad times can present opportunities. However, you cannot profit from them both. Bad debt magnifies the bad. As the cost of money rises, your debt service will become an ever-increasing percentage of your expenses.
2. Think global. We cannot afford to only think and act locally anymore. We need to think and act globally.
Vision. Because it is already global, we must consider how our vocation, business and industry will function in the future.
3. Entrepreneurship is a must. This is the age for the free agent. We must think like entrepreneurs, even if we plan to work in larger companies or organizations. We must be “in-trepreneurs.” Experience and seniority do not carry the same value as experience. It is important to produce results and profits.
4. Be a capitalist. The wealthy have assets; the rest of us have liabilities. These are things that can be expensive to purchase and maintain. Capitalism isn’t a dirty word. Capitalism is defined as someone who has assets, assets that generate income. Assets that generate income include stocks, equipment, and businesses. American millionaires who are self-made account for 80 percent. Be one of them.
5. Flexibility is key. Things move at an accelerated pace. This requires adaptability. Things will never be the same again. We have to be open to changing directions quickly. It is time to dodge and weave. It’s time to embrace change. It is time to make a shift!
The “Starbucks China” Blend: A Slam Dunk Grande
There are very few “can’t-miss” propositions. Starbucks in China is one of my favorites. In a totalitarian world, giant corporations are granted carte blanche. This is reminiscent of a time when fur trapping was regulated by kings. Starbucks has the product and the relationships. With some clever campaigning, they will have the ubiquitous branding in no matter how fast. If it’s not, it will be.
China is the fastest growing economy in the world, but it’s not an open-door policy for foreign companies. Many businesses in America and around the world would argue that it is quite the contrary. China has a reputation of being lax in its enforcements of intellectual property laws. Microsoft and other tech companies have had their work stolen in China, which has frustrated them. The list could include golf club manufacturers, music businesses, movie studios, and any other industry.
Starbucks is America’s largest coffee shop. Right now, I am looking at a franchise from my office at ICMediaDirect.com at the Empire State Building. It is always bustling with tourists. Did you know there is a franchise at Great Wall? Did you know that Starbucks announced the opening of a store in Beijing’s Forbidden city? The Chinese were outraged. Although initially they resisted the idea, they quickly accepted it. (I suppose the Chinese are like everyone else.
Starbucks has something Calloway Golf does not in order to be able to do business like this. You can’t replicate a product, that’s what. It is impossible to fake coffee beans in large quantities. This is the cornerstone of Starbucks’ success in China. Howard Schultz, their CEO, declared China their “number one priority” for growth.
Starbucks and Schultz aren’t afraid to dream big in China. Starbucks currently has about 11,000 locations in 37 countries, with 375 of them in China. Starbucks plans to earn 20% of its revenue in China by 2008. Starbucks has a long-term goal to open 30,000 stores in China and approximately 8,000 in China.
This is a massive ramp-up. China may be a Communist country in name only. Although some communist economic policies may be overthrown, Beijing’s ministers have remained steadfast in their position of power. Starbucks has been welcomed with open arms, including red carpets, welcome wagons, and green lights. They don’t think the CEO is nice, but their product, distribution channels, and everything cannot be copied.
This is more proof than I can give that Starbucks, a Seattle-based coffee chain, has the solution. Starbucks has been the recipient of two Chinese lawsuits protecting its intellectual property in recent weeks. Some locals were observant and entrepreneurial and decided to copy the Starbucks brand elements and offer coffee to their countrymen. There was no way around it. Chinese courts ruled in favor Starbucks
I wonder if the local coffee shop owner thought he was in with a chance. The judge in China was able to consider the merits of each side. Did Beijing’s economic ministers have any curiosity about the outcome of this case? There was no drama. Schultz, a successful CEO, wouldn’t speak publicly about his lofty goals for China success without having known that he could achieve them. They are liked by Beijingers, and they also generate revenue.
This reminds me of a book that I just finished about the notorious pirate Captain Kidd. The English crown had Kidd rob pirate ships for profit. He was on the seas when political winds changed and he became a scapegoat. His “trial” was a joke. Kidd was quickly convicted by the powers that be and sentenced to death. Although the stakes weren’t as high, the outcome was as certain when China ruled for Starbucks against local knockoffs.
So Starbucks is confident that they can deliver quality coffee to international markets. They have received a Beijing approval. Now all they need to do is convince a country of 5,000 years tea drinking history that coffee is different. This requires branding.
China is moving towards Westernization or a more capitalist economic system. Starbucks has an easier task because of the growing consumer expectations and appetites. Their competition is also negligible. Now is the time for Starbucks’s Chinese customers to be sold to by making the right deals in Beijing. Here’s how they win:
* These stores are targeted at young urban Chinese, and their store locations offer a comfortable social setting and a welcome escape from cramped apartments.
Starbucks will become Internet user hubs. This will allow people to socialize and download music. ICMediaDirect.com and other advertising agencies will run seasonal online campaigns for Starbucks (similar to the Red Cup campaign in the US this Christmas season). This is to help associate the chain with the latest trends. Crossing Medias such as music downloads or entertainment websites will be critical.
* China is experiencing a similar consumer consciousness to Russia that’s not new to capitalist culture. This will make coffee the drink of choice for people who want to see change.
I don’t advocate stocks. I don’t believe in politics. I don’t seek justice or defend oppressors. Starbucks is a place I can’t miss.