MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Reputation's Impact on Human Resource Expenses

C. HUYGENS - Thursday, November 20, 2014
Researchers found that companies with damaged reputations face increased recruiting costs due to the greater difficulty to source and attract new hires, particularly when recruiting women and more experienced workers. But these costs are far from the greatest of a company’s troubles. “While recruiting expense increases are in the millions of dollars, this great expense is literally dwarfed by the billions of salary cost differential,” the study reads. “The cost of recruiting and salaries added to any expenses associated with a reputation damaged by an environmental scandal, for example, can be disastrous to a company’s bottom line.”

Read more from Risk Management Monitor.

RepuStars 2014 Nov 14

C. HUYGENS - Sunday, November 16, 2014

Weekly Reputation Index Metrics


At the close of trading November 14, 2014, REPUVART and REPUVAR stood at 3663.23 and 3022.80 respectively. Over the past four weeks, the former has changed by 5.27%, while the latter has changed by 5.21%. The benchmark S&P500 Composite Index stood at 1776.72 (31 Dec 2001=1000) and has changed over the past four weeks by 8.11%. The current calendar year spread between REPUVAR and the S&P500 is -11.34%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by -0.48% and -2.36% respectively; the S&P500 Composite Index has changed by 13.92%. The trailing 12-month spread between REPUVAR and the S&P500 is -16.27%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 41.07% and 33.56% respectively; the S&P 500 Composite Index has changed by 62.17%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 5.97%, 7.45%, and 102.06% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -6.47%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 8.29% and 9.80%.

Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here.

Background

The RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics. The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names for real time quotes.

The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to  Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).

The RepuStars indices are reconstituted annually in the first week of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), available at the IAFS Store, specialty finance sector retailers, or other leading online book retailers
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

Walmart: Bentonville, we have a problem

C. HUYGENS - Thursday, November 13, 2014
Price, variety, and convenience are what have defined Wal-Mart, and what customers expect when they shop. Volume is what suppliers expect, and what creditors assume when assessing risk. Failing to meet these expectations, and surprising stakeholders with recurring labor and ethics issues, is a formula for reputation value loss.

The chart below shows dismal numbers for the world’s largest discount retailer and the effects of disappearing customers, disengaged employees, disappointed equity investors, worried creditors, and unhappy regulators -- in other words, the cardinal signs of a reputation crisis.

RepuStars 2014 Nov 7

C. HUYGENS - Saturday, November 08, 2014

Weekly Reputation Index Metrics


At the close of trading November 7, 2014, REPUVART and REPUVAR stood at 3640.81 and 3004.56 respectively. Over the past four weeks, the former has changed by 5.30%, while the latter has changed by 5.18%. The benchmark S&P500 Composite Index stood at 1769.84 (31 Dec 2001=1000) and has changed over the past four weeks by 6.60%. The current calendar year spread between REPUVAR and the S&P500 is -11.51%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 2.09% and 0.17% respectively; the S&P500 Composite Index has changed by 16.30%. The trailing 12-month spread between REPUVAR and the S&P500 is -16.13%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 37.04% and 29.71% respectively; the S&P 500 Composite Index has changed by 59.25%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 5.24%, 10.84%, and 96.79% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -5.46%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 8.76% and 10.67%.

Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here.

Background

The RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics. The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names for real time quotes.

The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to  Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).

The RepuStars indices are reconstituted annually in the first week of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), available at the IAFS Store, specialty finance sector retailers, or other leading online book retailers
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

Tesco: Reputation cleanup in aisle 7

C. HUYGENS - Tuesday, November 04, 2014
The business case for cooking the books to increase volatility is tough to make. It is certainly hard on Tesco's reputation value.

Depressing the company's earnings purposefully to create a managerial crisis was noted earlier. It hurt investors, reflected terribly on management and the board and The Daily Mail was correctly most worried about "…the reputational damage, which could linger for years."

Two weeks ago, it was discovered that irregularities in cost and revenue recognition inflated the company's earnings by about $400 million over the past 3 years. Fraud, it has been shown time and again, is no way to enhance corporate reputation.

Horse meat posing as beef, in hindsight (so to speak), was a window into an underlying core problem at Tesco: bull posing as controls. What all this says for Tesco's governance and lack of reputational awareness is not repeatable in polite circles, so we'll let the absolutely awful reputational value metrics speak for themselves.

Consensiv 50 November 2014

C. HUYGENS - Sunday, November 02, 2014
The Consensiv 50 is an unweighted ranking of indicated reputational value drawn from the world's 1000 most valuable traded companies. The underlying reputational value metrics, calculated weekly for more than 7000 companies, are the underpinnings of Steel City Re’s reputational value insurances and the S&P Dow Jones RepuStars Variety Corporate Reputation Index (Ticker: REPUVAR), the world’s only reputation-linked composite equity index*. Read more about Consensiv's reputation insights and controls.


RepuStars 2014 Oct 31

C. HUYGENS - Saturday, November 01, 2014

Weekly Reputation Index Metrics


At the close of trading October 31, 2014, REPUVART and REPUVAR stood at 3670.48 and 3030.09 respectively. Over the past four weeks, the former has changed by 2.00%, while the latter has changed by 1.88%. The benchmark S&P500 Composite Index stood at 1757.76 (31 Dec 2001=1000) and has changed over the past four weeks by 2.55%. The current calendar year spread between REPUVAR and the S&P500 is -9.91%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by 0.65% and -1.31% respectively; the S&P500 Composite Index has changed by 14.89%. The trailing 12-month spread between REPUVAR and the S&P500 is -16.19%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 43.91% and 36.16% respectively; the S&P 500 Composite Index has changed by 65.65%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 4.21%, 9.35%, and 93.99% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -5.54%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 7.03% and 10.65%.

Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here.

Background

The RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics. The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names for real time quotes.

The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to  Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).

The RepuStars indices are reconstituted annually in the first week of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), available at the IAFS Store, specialty finance sector retailers, or other leading online book retailers
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

Reputation Risk: Oh, baby tell it to me once again

C. HUYGENS - Thursday, October 30, 2014
Channeling songwriter Toni Tenille’s 1980’s classic, Deloitte is telling executives one more time that 88% of their peer group now explicitly focus on reputation risk as a key business challenge. The most recent global survey by the accountancy, reported 28 October, affirms yet again that reputation risk is a C-suite issue and that the most important stakeholders are customers, regulators, other senior executives, employees and remarkably last, investors.

Read more.

Say those words again that you just did
Oh, baby tell it to me once again


Sing more.

RepuStars 2014 Oct 24

C. HUYGENS - Saturday, October 25, 2014

Weekly Reputation Index Metrics


At the close of trading October 24, 2014, REPUVART and REPUVAR stood at 3561.10 and 2939.79 respectively. Over the past four weeks, the former has changed by -2.84%, while the latter has changed by -2.96%. The benchmark S&P500 Composite Index stood at 1711.19 (31 Dec 2001=1000) and has changed over the past four weeks by -0.92%. The current calendar year spread between REPUVAR and the S&P500 is -9.98%.

Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by -3.07% and -4.99% respectively; the S&P500 Composite Index has changed by 12.13%. The trailing 12-month spread between REPUVAR and the S&P500 is -17.12%.

Over the trailing 36 months, the REPUVART and REPUVAR have changed by 39.98% and 32.42% respectively; the S&P 500 Composite Index has changed by 59.85%.

The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are 2.40%, 9.03%, and 103.12% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -3.10%.

The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are 8.60% and 14.02%.

Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here.

Background

The RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics. The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50,  published periodically, and most recently January 1, 2014, by CFO.com.

The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR.  Click on the ticker names for real time quotes.

The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to  Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).

The RepuStars indices are reconstituted annually in the first week of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted 18 Jan 2014.

REPUSPX  is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index.

The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below)

Reputation, Risk and Finance

Reputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:

1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012)  or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), available at the IAFS Store, specialty finance sector retailers, or other leading online book retailers
2. Become a member of the Intangible Asset Finance Society and engage.
3. Join our community on Linked-In and stay in the information flow and/or follow Twitter missives at #ReputationRisk.

Notices

S&P Dow Jones Indices is a registered trademark of S&P Dow Jones Indices LLC, a part of McGraw Hill Financial; RepuStars and Steel City Re” are registered trademarks of C. Huygens & Co. LLC. The method underpinning the RepuStars Variety indexes is subject to a pending patent assigned to C. Huygens & Co. LLC. S&P McGraw Hill Financial and its affiliate (S&P Dow Jones Indices) makes no representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and McGraw Hill Financial shall have no liability for any errors, omissions, or interruptions of any index or the data included therein. Past performance of an index is not an indication of future results. All information provided by S&P Dow Jones Indices is general in nature and not tailored to the needs of any person, entity or group of persons. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments offered by third parties that are based on that index. S&P Dow Jones Indices does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Investment products based on the RepuStars Variety Corporate Reputation Indexes are not sponsored, endorsed, sold or promoted by Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC, or their respective affiliates and none of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the indexes in this piece does not in any way reflect an opinion of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates on the investment merits of such company. None of Technology Option Capital, LLC, C. Huygens & Co, LLC, Steel City Re, LLC or any of their respective affiliates is providing investment advice in connection with these indexes.

McDonald's: Fear, uncertainty and doubt

C. HUYGENS - Thursday, October 23, 2014
McDonald's stakeholders need to hang on to more than a burger. The once-simple business model of innovative delivery of a simple menu at a fabulous price in a clean and secure environment has been under attack from so many quarters for so long that it is leaving stakeholders worried. The jump in the value risk (VR) metric below since August reflects this fear in much the same way that the Chicago VIX does.

McDonald's is a firm that achieved greatness through supply chain innovation, product innovation, real estate management innovation, workforce innovation, and marketing innovation. It stands to reason that one way out of this quandary of stakeholder uncertainty is to meet their expectations for -- innovation.

Consensiv's Jonathan Salem Baskin, writing for Forbes, states, "It’s hard to remember, but McDonald’s started out as the disruptor in its industry. Its innovations were many, ranging from standardized, efficient experience in menu and restaurant design, to great marketing. McDonald’s perfected, and then consistently improved the Holiday Inn model that allowed it to blow up thousands of quirky and sometimes risky hamburger stands, and replace them with food that was reliably good in restaurants that were consistently fine."

The bottom line: McDonald's should "…disrupt the industry completely, by flexing its resources muscles and embarking on changes that its competitors couldn’t copy or catch, and for which its customers would pay."

Read more at Forbes.


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