What theory did you just use? News brief — week of Feb 29 2016
Years ago in the days of written correspondence, Clay would give his graduating students a stamp, and ask that they stay in touch after they graduated. There was, of course, a little twist…
Theory, always.
In that spirit, here’s a selection of general business news articles sent to Clay this week as part of his news brief. What theories do you think he is using?
· WSJ: Smartphone Makers Look Beyond the Device (2/25/16): As phone sales drop, companies are turning to add-ons and accessories for additional revenue. The smartphone, once a revolutionary device, is quickly becoming like most other must-have products — a commodity. The world’s biggest handset makers are acknowledging that, and looking beyond the device to churn additional revenue. This city’s Mobile World Congress, the annual telecommunications and tech bazaar, was once a place where device makers introduced hot innovations built into their latest smartphones and tablets. This year’s installment felt more like a showcase for, well, bolt-on components and accessories.
o WSJ: Sony Mobile Sets Its Sights Beyond Smartphones (2/22/16): The struggling unit’s CEO, who foresees profitability in the next fiscal year, offers a fresh goal: redefining how people communicate. Sony Corp. plans to keep making smartphones — while weaning its customers off them.“ People have become too obsessed with smartphones,” said Hiroki Totoki, chief executive of the electronics maker’s mobile unit, in an interview. When Mr. Totoki took charge of Sony Mobile Communications Inc. in late 2014, he said his first job was to stanch the struggling unit’s losses. With restructuring nearly complete, he says he now wants to redefine how people communicate.
o WSJ: Samsung Unveils New Smartphones, but Virtual Reality Steals the Show (2/22/16): Company’s new handset looks strikingly similar to its predecessors. Samsung Electronics Co. released its latest flagship smartphone Sunday on the sidelines of the Mobile World Congress trade show in Barcelona, getting the backing of Facebook Inc. Chief Executive Mark Zuckerberg, who said the companies are teaming up to push virtual-reality features in phones and social networking. The new Galaxy S7 flagship smartphone and its curved-screen companion, the Galaxy S7 Edge, look strikingly similar to their predecessors and lack fresh features to set them apart in a crowded field of Android handsets.
· Bloomberg: Mercedes Boots Robots From the Production Line (2/24/16): Mercedes-Benz offers the S-Class sedan with a growing array of options such as carbon-fiber trim, heated and cooled cupholders and four types of caps for the tire valves, and the carmaker’s robots can’t keep up. With customization key to wooing modern consumers, the flexibility and dexterity of human workers is reclaiming space on Mercedes’s assembly lines. That bucks a trend that has given machines the upper hand over manpower since legendary U.S. railroad worker John Henry died trying to best a motorized hammer more than a century ago.
· WSJ: Exelon Inches Closer to Completing Acquisition of Pepco (2/26/16): D.C. regulators rejected proposed settlement, but offered amended version watchers say will fly. Exelon Corp. moved closer Friday to completing a contested $6.8 billion acquisition of Pepco Holdings Inc. that would create one of the largest electric utility holding companies in the U.S. But it is still far from a done deal. Utility regulators for the District of Columbia voted 2–1 on Friday to reject a proposed settlement agreement offered by Exelon and others as an alternative to the commission’s outright rejection of the transaction in August 2015.
· WSJ: Sysco to Buy Europe’s Brakes Group (2/22/16): Food service company to pay about $800 million, plus a $2.3 billion debt repayment. Sysco Corp. on Monday said it agreed to buy European food service distributor Brakes Group from Bain Capital Private Equity for about $800 million, plus a $2.3 billion debt repayment, as it looks to broaden its footprint further into Europe. Brakes Group operates in the U.K., Ireland, France, Sweden, Spain, Belgium and Luxembourg. London-based Brakes Group will operate as a stand-alone company within Sysco, with its Chief Executive Ken McMeikan at its helm.
· WSJ: Honda CEO Shifts Focus to Electric Vehicles (2/24/16): Takahiro Hachigo pledges to make partially or fully electric cars account for two-thirds of Honda’s global sales by 2030. Honda Motor Co. wants partially or fully electric cars to account for two-thirds of global sales by 2030, its chief executive said, laying out long-term priorities after his inaugural year was dominated by safety issues. The pledge Wednesday by Honda’s Takahiro Hachigo was the latest sign of the industry’s shift to environmentally friendly cars. The fallout from Volkswagen AG ’s diesel-emissions scandal has fueled the trend, with the German giant ramping up plans for electric vehicles.
· WSJ: Google Cloud Lures Amazon Web Services Customer Spotify (2/23/16): Music-streaming service’s expansion is a big win for Google Cloud Platform. For much of its 10-year life, Amazon.com Inc. ’s Web-based, on-demand computing business has outrun its competition, grabbing the lion’s share of the market. But on Tuesday, Spotify AB, a marquee Amazon Web Services customer, said it plans to move much of the technology behind its music-streaming service to Google Cloud Platform. It is a significant win for Alphabet Inc. ’s Google, seen by most analysts as the No. 3 player in cloud computing infrastructure behind Amazon and Microsoft Corp. ’s Azure service.
· WSJ: Viacom Seeks Deal for Paramount Film Studio (2/23/16): CEO Dauman says Viacom is aiming to close a deal for a strategic investment by the end of June. For the past several years Paramount Pictures pursued a ruthlessly efficient formula: cut costs by making fewer movies and outsource key functions, all with an eye on guarding cash flows. It didn’t work. The Viacom Inc. -owned studio has been ranked last among Hollywood “majors” at the box office for four straight years. Revenue and operating income have plummeted and hundreds of employees have been laid off. Now, Viacom, under pressure from investors who are frustrated with the media giant’s sagging stock price and want to see major strategic moves, said Tuesday it will sell a minority stake in Paramount. The company hopes to close a deal for the 104-year-old studio by the end of June.
