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Journalism - Business Article Examples Newsweek Japan U.S. Business Trend section Published: December 5, 2001 © 2001 Susanne M. Alexander The Rise in Business Co-ops Tired of losing out to big competitors that can charge lower prices, small retailers are banding together in purchasing cooperatives to get the same supply guarantees and volume discounts the big boys get. Four years ago, Westmont Building Products, with $10 million in FY1997 sales, was facing high and constantly shifting prices from its suppliers. "Our price from our major supplier changed 28 times in one year," says president Bud Barnett. "It was impossible to bid on jobs with that vacillation." So, the company joined Amarok, a 125-member wall and ceiling distributors' coop that now has $1.2 billion in aggregate sales--more than Home Depot. As in most coops, Amarok members pay to join. (Westmont paid a $6,000 initiation fee and bought one $12,500 share of stock.) Price rebates and other payments from suppliers are paid out as dividends (about $73,000 each last year). "We are able to influence our own destiny better than before," says Barnett, whose FY2001 sales were almost $20 million. In addition to the price protection and rebates, Barnett, who now also chairs the coop, says he values the camaraderie and distribution advice he gets from members. Coops run on a one-company, one-vote policy, so getting along is essential. A granddaddy of coops is Carpet One, which has been so successful that the coop itself has become the brand for its members. Its 780 members, 2,000 stores and $5 billion in annual revenues make it the biggest specialty floor-covering group in the United States. Formed in 1985, Carpet One has gone beyond defending its members, says Howard Brodsky, co-CEO of CCA Global Partners, which manages the coop. Instead, it focuses on helping members with advertising, training and exclusive supply agreements. Most coops are started by management companies like CCA, which provide financial, planning and recruiting services and get 10-45 percent of coop revenues. But they're not just in it for the money. Cooperative Solutions, another management company, makes a deliberate effort to foster community in coop members, says Bob Friedman, an employee who also chairs YaYa! Bikes, one if its coops. The company is now busy launching a new one: Creative Eye, to help independent photographers and illustrators protect their right to the images they create. Top ^ Newsweek Japan U.S. Business Trend section Published: January 16, 2002 © 2002 Susanne M. Alexander A Facelift at Avon Products When Andrea Jung got the CEO job at Avon Products two years ago, she found that the cosmetic company, the world leader in direct sales, needed a makeover--and fast. The product line was dull and bloated, the brand image unclear, and the new sales reps the company needed in order to grow were staying away in droves. Jung made changes as fast as she talks (which is very). To attract more reps, she started an aggressive multilevel marketing program, Avon's first. Reps who recruit more reps get a share of their recruits' sales. The company now offers (for a fee) advanced training in selling techniques. She's moved into online ordering. Some 20 percent of reps now handle orders online, enabling them to dump the company's 48 page order form. Reps are essential to Avon's growth, Jung says. "The foundation of the business is our high-touch personal relationship with customers. It's helping to buffer the economic headwinds." Global branding was another problem area--one that Jung has been working on since 1996. Back then, it was consistent across only ten percent of Avon's products. That's up to 70 percent now, and products have a new, more prestigious-looking label. "It's a department store look," Jung says, "but more affordable." Jung has eliminated 30 percent of the company's products and doubled its R&D budget, producing a slew of new lines. This year's feature: total wellness for women, offering nutritional supplements, stress relief items and fitness gear. Jung says the new line's expected to gross $75 million in global sales this year. After a two-year, 50 mall test to make sure it wouldn't cannibalize catalogue sales, Jung also moved Avon for the first time into retail stores, setting up store-within-a-store operations at J.C. Penney's. Those units sell a new line--not sold in the catalogue--called beComing, that costs less than mall brands but more than catalogue items. Jung also integrated Avon's philanthropy--which supports the health of underserved women, with a focus on breast cancer--into its business strategy. "Consumers tell us they have changed their minds about doing business with Avon," she says, "because they see what we are doing for women's health." Ding-dong ... after all these years, Avon's still calling. Top ^ Newsweek Japan U.S. Business Trend section Published: December 19, 2001 © 2001 Susanne M. Alexander Michael Bloomberg Reorganizes Bloomberg LP Earlier this year, before upsetting New York's political apple cart by unexpectedly getting elected mayor, Michael Bloomberg pulled another surprise at Bloomberg LP, the information company he owns and runs--at least until he takes office. Bloomberg told his senior managers--his potential successors--to pick someone else to run their units for two months and then head out on two-week rotations in each other's jobs. Tom Secunda, the board member and founding partner who ran R&D, tells Newsweek how it all worked out. NEWSWEEK JAPAN: What was behind the move? SECUNDA: Mike wanted us to have the chance to see each department and its problems, and find out how it worked and how we worked in it. Didn't that make you nervous? Well, it wasn't like a truck had hit the entire senior management team. We hadn't left the firm. But we couldn't talk to the people doing our jobs. We really had to let them manage in our places. And what did you do? I took a lot of people out to lunch. I picked their brains, trying to see how they spend their time, what they are doing and how. It gave a glimpse of what it might be like to be ceo, watching over all of it. What was the hardest part? Writing reports every two weeks for Mike! It's been a long time since I wrote a term paper. And it was a big job to understand a new piece of Bloomberg business every two weeks. But it let us spot opportunities and pick the best practices across different offices. What did you learn? It was actually the coolest thing I've done in a long time. It got me thinking about new problems and applying my talents in new ways. I realized I had a lot to contribute outside my original expertise, which was empowering and confidence building, and got me excited about playing a greater role. And while we were gone, our successors became our peers, so we could learn from them too. And the results? Since we were all in the same boat, the process let us know each other better. And there were some job changes. Les Fenwick, who ran our European operations, is now coo, and I'm now in charge of worldwide sales. And who's going to take over Mike's job? No comment. Top ^ Newsweek Japan U.S. Business Trend section Published: February 13, 2002 © 2002 Susanne M. Alexander Fictional Tommy Bahama Character Builds the Clothing Brand Fans of the upscale Tommy Bahama line of casual resort wear feel like they know Tommy. His letters to friends, printed on the tags hanging from the clothes, describe his life amid swaying palm and surging ocean waves. The catch: Tommy doesn't exist. He's nothing but a marketing invention. A convincing one, though. Customers write the company asking for more adventures, and their enthusiasm translates into cold hard cash--sales for the decade-old brand are expected to total $300 million for 2001. Tommy has even half-convinced the people who invented him, the owners of Viewpoint International, which makes the clothes. "As we developed the brand to be consistent, we started thinking in terms of what Tommy would wear, what he would do in his free time, his likes and dislikes," says CEO Tony Margolis. Hence the Tommy Bahama brand of beer, the sponsorships for racecar drivers and pro golfers, and the total lack of ski wear in the product lineup. The unanswered question (the partners can't decide): would Tommy wear a tie? In 1996, Viewpoint started hunting for a model to represent the brand. After checking out about 50 candidates, the company settled on an unshaven man of indefinable age. Then when a women's clothing line was added, it found him a mate: "Maya," his more worldly looking female companion. "She's a combination of our wives," says Margolis, straight-faced. Margolis and his two partners work--hard--in three different cities, none of them handy to tropical beaches. So Tommy is the only one for whom, as the company slogan goes, "Life is one long weekend." Top ^ [an error occurred while processing this directive] |