Willie O'Ree

Willie O'Ree was the first black player in the NHL. Here is a video where Mr. O'Ree talks at Vanderbilt University about diversity issues in the NHL.

Anheuser Busch Q2 2009 Performance

Since we are talking about performance in the beer industry today in Industry Analysis, here is Anheuser-Busch's second quarter 2009 performance statements, which is a .pdf file. Check out the Financial Times for a summary of the changes in the beer market, and the graphic on changes in sales growth by geographic region from the Financial Times article below.

Cell Phone Technology Cooperation

In Industrial Analysis we talked about technology cooperation, and the theoretical reasons that rival firms may choose to agree to adopt a specific type of technology. The main thrust of the argument is that if the net benefits to the firms of standardizing technology are greater than the net benefits of separate technology standards, then rival firms have an incentive to choose technology standardization. Earlier this year, cellphone rivals (3 Group, AT&T, KTF, LG, mobilkom austria, Motorola, Nokia, Orange, Qualcomm, Samsung, Sony Ericsson, Telecom Italia, Telefónica, Telenor, Telstra, T-Mobile and Vodafone) agreed to sell cell phones with a universal charger by 2012.

The main argument is that this will benefit the environment, which it should. But there is an alternative (i.e. economic) argument as well. The standard cell phone charging technology will reduce the number of cell phone chargers that cell phone manufacturers will need to produce, hence lowering input costs for cell phone chargers.

Hence it seems as the net benefits of standardized cell phone chargers is greater than the net benefits of propriatary cell phone chargers. Coupled with the increase in competition of firms like PowerMat, who can charge multiple types of devices, this is a natural direction - profit enhancing - for cell phone retailers to pursue.

Format Standard Battle: High Def DVD's

In my Industry Analysis class, we talk about technology standard battles, and the incentives that firms have to seek proprietary formats or standards as opposed to cooperation on the format or standard technology. A recent example of this is the high definition DVD battle that took place with Sony's Blu-Ray and Toshiba's HD-DVD format standard battle.

In February 2008, Toshiba exited the format battle, after a number of retailers choose to align with Sony's high def DVD format. Given the changes in the market favoring Sony's Blu-Ray format, it looks as if Sony will be the dominant firm in the high definition DVD market, but that does not mean that Sony will be insulated from competition. As mentioned at the end of this interview, downloading high definition DVD quality movies is becoming a competitor to Sony.

DVD Sales Trends

In 2009 Hollywood movie executives were pondering the recent decline in DVD sales. In an excellent article, the factors at play in the DVD industry are discussed along with competing views as how studio executives are reacting to the decline in DVD sales.

Given the decline in demand (i.e. a shift to the left of the DVD demand curve), producers (i.e. movie studio production divisions) are trying to retain profits by reducing the number of movies they produce (finance) and also by reducing their costs of making movies they do choose to produce. Each of these actions has a positive impact on the profitability of the movies and also on DVD's. The decline in the supply of movie produced should shore up DVD prices and the cost-cutting on production should shore up the per movie profits. Thus as overall movie profits will likely decrease due to the decline in DVD consumer demand, the per movie profit is not likely to suffer as much compared to movie studios taking no action at all.

Hence, we see a clear example of how a decline in consumer demand for DVD's is driving movie studio executives decisions in movie production decisions (i.e. quantity of movies studios supply) and how declines in consumer demand affects movie studios movie budgets (i.e. costs).

Champagne Sales Decline

The New York Times recently reported that champagne sales are declining. The obvious factors are the recession -if champagne is a normal good and incomes are declining then the demand for champagne shifts to the left, which is a reasonable assumption - and changes in currency rates in the US and other countries. Here is a break-down by major geographic markets (from the NY Times).

Peter Swinburn, President & CEO of Molson Coors

Check out two videos from the Financial Times about the beer industry.

Both are with Peter Swinburn, president and CEO of Molson Coors and in the first he talks about the consumers and the US beer market, and in the second video with Mr. Swinburn he about trends in the beer industry.