The Banana Repubic

Our Motto:

Aeternum Dilatantur 

"Forever Expanding"

Our Virtues:

Excellence

Law

Profit

Keep CALM and...maybe not.

Congress has recently passed the Commercial Advertisement Loudness Mitigation Act, limiting the loudness of TV commercials relative to the show being broadcast. The CALM Act states that any TV commercial must be, on average, the same volume as the average volume of the program being aired. The CALM Act is limited to only TV broadcasts, and does not apply to internet or radio advertisements. As with any bill passed, companies have found a language loophole to exploit, and in this case the loophole is the keyword average volume. This allows them to still have loud portions of a commercial, but soften up the rest of the ad to bring down the average volume.

US News

Trust

Earlier this month hundreds of Morgan Stanley retail branch managers made their way down to the JW Marriot Grande Lakes Resorts in Orlando, Florida.  There was an unexpected guest, the head of the investment operations for Morgan Stanley, Colm Kelleher.  Kelleher was present to present a message to the managers, that he has a plan to increase profits as well as trust among investors. This proposal of alliance is brought about due to the pressure Kelleher has had placed on him buy investors that he is not doing all he can to raise the companies revenue.  2012 was not a spectacular year for Morgan Stanley only turning out a 5% return on investment to its investors.  Chief executive James Gorman claimed to have  35 different fourth quarter projects to encourage business, profits, and procure more retail brokers.  Only time will tell if Morgan Stanley will be successful in their new programs of branch managers working trustfully and productively with investors.New York Times Article

Horses vs Cows?

 

The European scandal, concerning the presence of horse meat in beef frozen food, is expanding its geography. It appeared that at least one Northern American port - Port of Houston - already saw this kind of food transpassing from Mexico to the European distributors. The question that arises: did this food really passed away? Is there any possibility for horse meat from these shipments to stay in the Unites States? A priori, no. These shipments are treated separately from other goods. A posteriori, nobody knows ...
Another question is judicial: under the Texas law, passed in 1949, the sale, transfer  or shipment of horse meat for human consumption in Texas is prohibited. And this state law, notwithstanding the effort of the state's attorney general, might interfere with federal laws on interstate and foreign commerce.

Source: "The New York Times"

Yahoo rescinds "Work at Home"

Since Marissa Mayer was recently hired as the chief executive officer to try to revive Yahoo, she has apparently been reverting to more traditional business practices.  Both Yahoo and her former employer, Google had established policies of certain people being able to work from home.  However after taking over at Yahoo, Mayer has rescinded the work at home policy at Yahoo, and is now requiring employees to work together in a more collaborative environment.  The current thinking is along the lines of, "People who work at home are said to be more productive but less innovative".
Silicon valley innovations like instant messaging and video conferencing have made working remotely much more available and acceptable today, however Yahoo feels that working in the same location drives innovation.  The standard Silicon Valley perks still are abundant, such as free cafeterias, gyms, shuttle buses, ice cream, and dry cleaners not only are employee perks, but also help to keep the employees on campus during the day, and promote interaction between co-workers. 
Bank of America is another company that is curtailing working at home, and is reducing to a small number the number of remote jobs.
What is ironic is that just yesterday, the news mentioned that Marissa Mayer was having a nursery built at her Yahoo office.

http://www.nytimes.com/2013/02/26/technology/yahoo-orders-home-workers-back-to-the-office.html?hpw

COSTCO is coming to France

The U.S. distribution's giant - COSTCO - wants to open 15 of its hypermarkets in France. Stores are planned in Marseille, Lyon, Toulouse, Nice, Bordeaux and Paris.

It has been quite a while ago the French supermarkets had experienced such an event. For the first time in last two decades, a giant Anglo-Saxon prepares to challenge the ultra-powerful "locals" (Auchan, Carrefour, Leclerc) on their own land. The COSTCO - number 3 in the USA, with its &97 billion in revenue and &1.7 billion of net income - has such an ambitious development plan, which, however, is still waiting for the green light from local authorities.

"Over the next 5 or 10 years, we hope to be present in a dozen cities", says Gary Swindells, CEO of COSTCO France.

However, this is not going to be easy to reproduce this COSTCO low-cost model in France. Based on the principle of club membership, COSTCO offers its customers the possibility to purchase wholesale at unbeatable prices. Its gross margin never exceeded 15%, while that of the French retailers varies between 23% and 30%. At COSTCO store, to attract richer clients, luxury goods are sold off - the phenomenon never seen in France.

The company will, thus, have to overcome many obstacles before becoming powerful across the Atlantic. The Raffarin's Law (former French Prime Minister) makes it very difficult to open new hypermarkets in France, especially in the food sector.

"In Canada, we decided to open a store in February and it opened in November. In France, the standard lapse of time is situated between 24 and 30 months", says Gary Swindells.

Also, COSTCO will not be able to sell that many items as in the U.S. Luxury brands have signed a fairly strict "selective distribution" contracts, and it seems impossible that COSTCO can sell Chanel or Guerlain perfumes in its stores in France, as it does in America. It will also be impossible to sell at a loss, what happens on rare occasions in New York.



Indictments Linked to 2009 Salmonella Outbreak

According to the New York Times four new workers at a peanut manufacturing plant have been linked to the 09 salmonella outbreak and are being charged with plotting to produce, then release to the public salmonella tainted peanuts.  In 2009 the outbreak killed nine and sickened hundreds, which sparked one of the largest product recall in the nations history.  These four individuals were indicted by a federal grand jury in Georgia, which is an extremely rare move when it comes to food related products.  Peanut Corporation of America owner Stewart Parnell, brother Michael Parnell, Georgia plant manager Samuel Lightsey, and quality assurance manager Mary Wilkerson all face a combined 76 count indictment in a federal court in Georgia.  Charges range from introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead to conspiracy, which alone holds a maximum of 20 years in prison.   Tainted food cases in court are becoming more widespread as companies expand to more locations.  This case is rare because criminal cases are rare in food outbreaks because they are hard to prove and even harder to get a confession out of the guilty parties acknowledging their mistakes.  New York Times Article

Bowman vs Monsanto

The U.S. Supreme Court is currently reviewing the case Bowman vs Monsanto to determine whether the patent of a replicable good also extends to future generations of that good. Elements are contract law are visited, however, this case specifically delves into the jurisdiction of federal intellectual property laws. While the idea and use of patents dates back to the early kings and queens of England, the initial U.S. patent law was instated in the Patent Act of 1790 and has been modified multiple times since.

The issue at hand is to determine whether farmer Vernon Hugh Bowman, 75, of Indiana, can grow Monsanto's "Roundup Ready" genetically modified soybeans without contracting with Monsanto. Monsanto sold its beans to farmers with a contractual agreement for farmers to not save seeds; thus requiring farmers to contract with Monsanto for every crop cycle.

Bowman argues that he legally obtained the soybeans from a mix of beans generally used for feed and industrial uses. However, Bowman then treated all of the beans acquired with Roundup herbicide to kill off any unmodified beans after planting, and saved the beans from the plants that grew. Bowman was therefore able to grow and sell crops solely made of Monsanto's Roundup Ready soybeans without compensation to Monsanto.

Monsanto argues Bowman not only find a way around contracting for the beans, but also intentionally violated intellectual property law as well, claiming future generations of Roundup Ready soybeans are included with their patent.

New York Times Article