All posts by Michelle Grathers

About Michelle Grathers

Michelle Grathers is an international tax expert. She has consulted for a variety of firms and high net worth individuals on all tax- and legal-related issues. She also helps new companies develop payroll services, statutory audits and mergers and acquisitions. Contact Michelle at michelle[at]businessdistrict.com

Sony Sales Up After Chinese-Japanese Dispute Recedes Into Past

Companies, Consumerism, Japan, , , ,
Nobuki Kurita

According to Sony Corp’s China head Nobuki Kurita, the giant consumer electronic company’s business in China is “more or less” back to normal levels after recent protests in China against Japan’s actions related to a group of disputed islands.

Last September saw a significant decrease in sales of Sony products in China as calls for a boycott of Sony reverberated in response to the nationalization of two islands in a group of islands under dispute in the East China Sea. In China these islands are called Diaoyu, and in Japan they are referred to as the Senkaku Islands. Japan nationalized these islands after they were purchased from private owners.

Because of the dispute relations between China and Japan were highly strained, adversely affecting sales of Japanese products in China. Kurita however believes that Japanese business in China should completely recover, showing a strong surge in the coming three years.

“My general impression is business conditions have more or less returned to the pre-crisis environment,” he told a media briefing at a Sony store in eastern Beijing.

Computer Glitch Cancels Flights at Alaska Airlines

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Computer Glitch Causes Delays for Alaska Airlines’ Customers

After a fiber-optic malfunction shut down Alaska Airlines’ ticketing ability for four hours, by late on Monday the company was running on a close to normal schedule. The airline and its regional carrier were forced to cancel 78 flights causing delays and inconvenience for about 7,000 customers.

Despite the disruption over 130 other flights left, some delayed as much as four hours by the failure.

“Flights are running real close to schedule right now in all major cities. We expect tomorrow to be back on track completely,” said airline spokeswoman Marianne Lindsey on Monday evening.

All the trouble began at 8am on Monday morning when the computers used by the airline to check-in their passengers crashed. Employees were forced to board passengers by hand, often sticking handwritten flight numbers onto computer screens. The source of the malfunction was two severed fiber-optic lines in Sprint’s network.

The worst-affected cities were Alaska Airline’s hubs of Seattle, Portland, Los Angeles, Anchorage and San Francisco.

Microsoft Expanding its Chinese Operations

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Ralph Haupter
Greater China CEO of Microsoft Ralph Haupter

The giant global computer software company Microsoft announced that it will be hiring 1,000 people in China in order to enlarge its research, sales, and development teams in what is the world’s biggest market for personal computers.

Ralph Haupter, Microsoft’s Greater China CEO, explained that the additional workers will be hired over the coming year, increasing the total Microsoft worker-base to 5,500. Marketing and services teams will also grow, Haupter added.

Microsoft is also planning to strengthen its spending on research and development in China by about 15 percent during the coming year.

One of Microsoft’s goals is to sell more of its Windows 8 smartphone in china, where demand for it has been expanding, despite the stiff completion from rivals Google and Apple.

Fast Versus Cheap: Sea Change in Shipping Trends

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FedEx
Faster Not Necessarily Better

FedEx Corp is experiencing a decrease in the demand for their fastest and also most profitable services as companies are deciding that cost-cutting trumps speed of delivery. This trend is not necessarily linked to the slowing economy, the world’s largest cargo airline is noting; it may be a permanent feature of the new business climate. Overnight delivery is simply not as important as it once was to business.

“There has been a secular shift from ‘got to get it there overnight’ to more deferred products,” said Jeff Kauffman, a Sterne Agee & Leach Inc. analyst in New York. “Not because they can’t afford it, but because they are finding out the deferred choices are just as time specific.”

This trend will affect other shippers besides FedEx, including United Parcel Service (UPS) and Deutsche Post AG (DPW)’s DHL Worldwide Express.

Fred Smith, the CEO of FedEx was a pioneer in the early days of the modern air-freight industry. The idea was hatched in a college essay which Smith turned into the reality of the company he still runs 41 years later.

“When It Absolutely, Positively Has to Be There Overnight” was the popular cry of FedEx in its early days during the 1970s, made popular as the trademarked slogan of their fast-growing brand which put a premium on speed and reliable delivery.

Today speed is becoming less of a concern for many businesses as the US continues its lagging economic growth and demand from overseas customers who have never used overnight delivery services. Often three to four day delivery is fast enough.

“You’re seeing a demand for slow instead of a demand for fast. That’s a structural change,” said David Vernon, a Sanford C. Bernstein & Co. analyst in New York. “You either create a service that takes more of that volume shift or you end up in a much worse position.”

Relativity Media & Yucaipa Companies Launch Relativity Sports

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It was just announced last week that Relativity Media has joined with Yucaipa Companies to launch Relativity Sports. This new company will represent athletes, coaches and broadcasters and will absorb the existing businesses that include SFX Baseball, Maximum Sports Management and Rogue Sports.

As Ron Burkle, managing partner of The Yucaipa Companies, said from Los Angeles, “This partnership marks a new evolution in sports agencies, and we couldn’t be more pleased to help open new platforms to the world’s best athletes.” Ron Burkle and his Yucaipa Companies first began a relationship with Relativity last year; earlier this year, they became a major investor in Relativity when they bought most of the equity that was held by a previous investor.

About the new relationship, Relativity CEO Ryan Kavanaugh said, “Relativity Sports serves as a perfect launching pad for us to continue to grow our entertainment business. This alliance offers athletes turnkey access to a true merger of sports and entertainment. In addition to their careers in professional sports, we can offer athletes opportunities in film, television, music and gaming.”

Players who will be represented by the merger between Relativity Media and Ron Burkle’s Yucapia Companies include: Miguel Cabrera, Larry Fitzgerald, Greg Jennings, Ndamukong Suh, Devin Hester and Steven Jackson among others.