Archive for March, 2012

March Madness – Final Four Update

Sadly there isn’t a Cinderella Story this year and no real underdog since there is 1 – 1 seed, 2 – 2 seeds and 1 – 4 seed in the Final Four.

My picks today are:

Louisville vs. Kentucky – I think Kentucky will win.

Kansas vs. Ohio State – I think Ohio State will win.

Championship Game – Ohio State vs. Kentucky – I think Kentucky will win.

What do you think?

 

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Just Sayin’ Blog – Hopes for the New Year (Spring Update)

On January 10, 2012 I wrote a blog titled ‘Hopes for the New Year’. In the blog I laid out my hopes that 2012:

“turns out to be a great year for those in the automotive glass repair and replacement (AGRR) industry (or if great is too high a bar to set at the very least better than 2011)”. 

Since we’re nearing the end of the first quarter of 2012 I thought that I’d take a quick look at the first hope I listed for this year. My first hope was regarding the 3 key business drivers for the AGRR industry – weather, the economy and miles drive.

Weather – I had asked for ‘good’ weather for the year. ‘Good’ meaning bad of course. That means snow, hail, and especially ice if you happen to be in the AGRR industry.

As I’m writing this blog watching March Madness the temperatures in Illinois are in the mid 70’s and the sun is shining. Farmers in the Midwest have already been in the fields doing prep work getting ready to plant crops in the near future if the temperatures stay this warm. The lack of a winter in 2011-2012 is discussed in an article titled ‘For much of the USA, winter never got off the ground’ . In the article is a graph that details the year-on-year drop-off in snowfall in major cities across the Northern states. the lack of snowfall is blamed on the location of the jet stream this year to last. For those in the AGRR industry, hopefully it will get back to where it belongs in the 2012-2013 winter season. On a personal level I’ve enjoyed the lack of snow this winter, but from the Upper Midwest to New England the mild winter has forced countless companies to take a hard look at costs they can take out of their businesses. Costs equate to people.

There has been welcomed hail this year in a number of states. This obviously brings glass breakage, but sadly much of that hail came with tornado’s that caused death and destruction as well.

I haven’t talked to anyone in the U.S. who is happy with how this year has started or how they’re doing year-on-year. Regardless of whether they’re a retailer or a supplier it appears that everyone is hunkering down in 2012. The only ones who might have a slight smile are insurers.

It’s not only here in the United States, even the venerable Belron keystone subsidiary in the United Kingdom Autoglass® has had to “slash jobs at its head office and axe 16 out of its 101 branches resulting in a large number of redundancies (lay-offs)“ as reported on February 29, 2012 by the Insurance Times – UK.

The Economy – Indications are that the economic environment is moving in the right direction with the February 2012 unemployed rate down to 8.3% from a high of 9.1% in August 2011 as reported by the U.S. Bureau of Labor Statistics. The Wall Street Journal – MarketWatch.com reports retail sales improving in the first two months of 2012 and home prices and sales are beginning to rise seemingly pointing to a turn-around for the housing market.

All of this is good news if you’re a retailer, but the signs of a recovery could be short lived as Bloomberg reported last Friday that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 74.3, the lowest this year, from 75.3 the prior month. That means consumers aren’t feeling too confident in the recovery quite yet.

What’s happening on the national economic level is important, but even more important is what’s happening in the local economy in which you operate. What’s the unemployment rate in your market, how are retail sales and are you seeing a recovery in the housing markets? How is your business performing so far in 2012? Feeling good or bad about your prospects?

Miles Driven – Miles driven has shown some minor improvements at the start of the year, but that might be short-lived. In early January Ed Morse, Head of Commodity Trading at Citibank was predicting $ 4 a gallon gasoline as a floor price by the end of May 2012.  As of today the average price in the United States for a gallon of gasoline is $ 3.84 as reported by the U.S. Energy Information Administration. A few blocks from where I live in Chicago a BP® gas station is selling regular unleaded gasoline for $ 4.459 a gallon and $ 4.709 for premium.

Recently ExxonMobil’s CEO Rex Tillerson spoke with the TODAY Show’s Matt Lauer and said “Despite rising crude oil prices and threats to stability in the Middle East, the price of gas is unlikely to reach a national average as high as $5 per gallon in the near term”. Well isn’t that comforting news.

Politico recently reported that President Obama’s Energy Secretary Steven Chu was “walking back” his comments in an interview he had with the Wall Street Journal in 2008 when he told the newspaper,

“Somehow we have to figure out how to boost the price of gasoline to the

   levels in Europe”.

Really? The prices per gallon in Europe in 2008 averaged over $ 8 per gallon as reported by CNNMoney.com and in 2008 the price for a barrel of oil reached a high of $ 147.27. Today oil is hovering around $ 108 per barrel and the average price per gallon of gasoline in the United Kingdom is over $ 8. Can you imagine what the price per gallon will be if (or when) oil goes higher?

The tensions that continue to build in the Middle East between Israel and Iran obviously add further concern to the price of oil and the gasoline our industry relies so heavily on.

Hopefully all of the key drivers that effect the AGRR industry will all trend positively in the coming months, but with the price of gasoline being such an overriding influencer of both miles driven and the economy even the prospect of future weather events won’t help. What the industry doesn’t need are consumers who become ‘do nothings’ by keeping their hands in their pockets holding onto their cash unsure of what’s coming later this year. If that happens, retailers and suppliers alike will continue to have to make those very hard decisions on what costs to cut next. The first and easiest cuts always involve people.

People are the ultimate key driver to any successful business. Companies that don’t recognize the incredible value that attracting and then keeping the most talented people undoubtedly will suffer when weather, the economy and miles driven have a negative impact on the business. Recognizing that employees are the key driver that helps every organization find ways to innovate, increase customer service levels and create value for all stakeholders will allow it to flourish and remain competitive in the marketplace.  

I wrote in a blog earlier this year about the need to ‘Be Smart in 2012′, quoting Coach Pete Carril who said, “The strong take from the weak, but the smart take from the strong”. I hope you’re being smart in 2012.

Just sayin’……….

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Just Sayin’ Blog – March Madness (and the AGRR Industry)

It’s my favorite time of year for sports!!

March Madness!!!

The 2012 National Collegiate Athletic Association (NCAA) Men’s Basketball Tournament known as ‘The Big Dance’ offers 68 Division 1 basketball teams (27 teams are automatic qualifiers for the tournament by winning their individual conference tournaments and an additional 37 teams that are selected by getting the nod of the tournament ‘Selection Committee’ based on the teams “body of work” during the 2011 – 2012 basketball season), along with 4 additional teams that get a chance to play enduring an elimination round at the University of Dayton Arena the opportunity to lift the Championship Trophy and be crowned the NCAA Men’s Basketball National Champion. To become the Championship team, they will have to win all 6 games they play in the tournament. The teams that will be playing this year will be announced beginning at 6 p.m. Eastern on CBS television this Sunday, March 11, 2012.

March Madness takes us to and from various arenas around the country ending up in New Orleans from March 30th-April 1st for the Final Four. The teams are ‘seeded’ ranked from 1st to 68th in 4 regional brackets with 16 teams in each bracket (1 plays 16, 2 plays 15, 3 plays 14,…….8 plays 9, I think you get the idea), along with the 4 play-in teams.

 It’s a fairly complicated process that pits the best teams in Men’s NCAA Division 1 Basketball against each other in competition for the title of National Champion. If you’re not fully engrossed in March Madness you can follow this link to learn more (2012 NCAA Men’s Basketball Principles and Procedures).

‘The Big Dance’ is the culmination of an endurance test that starts in the fall of each year.  NCAA Division 1 Men’s Basketball is composed of 346 teams in 32 conferences plus 4 independent schools all starting the season working to get there’. The chances of reaching the tournament are 1 in 5. Those really don’t sound like bad odds. What makes March Madness a great sports event is the opportunity for an ‘underdog’ to reach the Sweet Sixteen, the Elite Eight, The Final Four or even make it to the Championship Game Final.

 It happens. In 1983 the North Carolina State (NC State) Wolfpack, coached by the legendary Jimmy Valvano (nicknamed Jimmy V), won what is considered to be one of the best Championship Final Games in the history of the sport on a last second tip-in by Lorenzo Charles after a miss by Derrick Whittenburg beating the favored University of Houston Cougars. NC State’s team was a ‘Cinderella Story’.

Last year the number 11 seed Virginia Commonwealth University (VCU) Rams made it into the Final Four by beating the number 1 seed Kansas in an Elite Eight game. The Butler University Bulldogs, a number 8 seed, made it into the Championship Game (two years in a row – in 2010 they were a number 5 seed) where the team played the number 3 seed University of Connecticut (UConn) Huskies. UConn was the highest seed making it to the Final Four. What happened to all the number 1 and 2 seeds? They were all obviously beaten by lower seeded teams. UConn ended up beating Butler in the Championship Game 53 – 41.

I think that there are similarities between the March Madness process and the auto glass repair and replacement (AGRR) industry. Perhaps a stretch to compare the two, but it’s my blog so here it goes…..

Imagine if the AGRR industry had a Division 1 Tournament (there are 3 NCAA men’s basketball divisions, but Division 1 is made up of the top colleges). Would the company that you work for be invited to the tournament based on how you rank in the market or markets you serve? If your answer to that question is yes, then what ‘seed’ do you think your company would receive giving you a chance to get to the Championship Game? Does the level of work and the service you provide match up to those you compete with in your markets? Yes? Great! You’re invited to ‘The Big Dance’!!

Another prerequisite for participating in the tournament is one that the NCAA tournament has too. You can only play one team from your company. If you happen to be one of those companies that operate under multiple company names in the same market you can’t expect to get them all into the AGRR tournament as that wouldn’t really be fair, so pick the one that you think can take you all the way to the end and quit trying to manipulate your odds.

Now that you’ve done all that work to make it into the big dance, is your company a highly seeded contender or are you a lowly seeded ‘underdog’? In ‘The Big Dance’ the underdog has a fighting chance. Not a great chance, but look at how the Butler Bulldogs and VCU Rams did in last year’s tournament. It happens.

Oh yeah….I forgot to also mention that the big difference with games played during March Madness versus the regular season is the tournament rule that there is never any home court advantage. Home teams often get more fouls called against the visiting teams by officials who have a tendency to do so to keep the hometown fans off their backs. All games are held on neutral courts so there is no home team advantage. Sadly that rule is suspended in the AGRR tournament to give one team an advantage. Safelite® Auto Glass gets to play all its games on a home court.

When you look at the 4 different brackets of my imaginary AGRR tournament who do you think will be the number 1 seeded company? How will it do versus the number 68 team do you think? Obviously the number 1 seed in the AGRR tourney is Safelite® Auto Glass. One of their star players is a gentleman named Ryan. You see him on television all the time (someone told me that they were going to cut those TV ads way back starting January 2nd…..guess not).

A potential problem for all of you who’ve made it into the AGRR tournament is that Safelite® Auto Glass decided to take the number 1 seed in all four brackets. Remember I mentioned earlier that no company could play under different names, but I didn’t say that there weren’t advantages to being the big guy and they have so many players that they get into all 4 brackets as the number 1 seed. And Safelite® owns most of the basketball courts (markets) and it has cornered the basketball market (insurers, fleets and cash customers, even suppliers) so they get to make most of the rules in the tournament. Now who do you think has better odds to win? The chances for a ‘Cinderella Team’ getting into the Final Four are tough as the odds are Safelite® is going to make it in with all 4 of its teams. You can imagine the odds for my hopeful Cinderella making it into the Championship Game. Sadly non-existent.

It seems to me that it’s a foregone conclusion that Safelite® has achieved the ‘dynasty’ status that the University of California, Los Angeles (UCLA) Bruins achieved from 1964-1975 (except for 1966 when the University of Texas, El Paso – UTEP Miners won and 1974 when the NC State Wolfpack won). The Bruins were coached by the legendary Coach John Wooden. But I’m still holding out hopes that someone, somewhere will be up to the challenge of taking on Safelite®. After all, since that 17-year run where the Bruins won 15 NCAA Division 1 Men’s Basketball Championships….they’ve only won one Championship Game since and that was in 1995.

One of President Ronald Reagan’s favorite jokes was,

Worried that their son was too optimistic, the parents of a little boy took him to a psychiatrist. Trying to dampen the boy’s spirits, the psychiatrist showed him into a room piled high with nothing but horse manure. Yet instead of displaying distaste, the little boy clambered to the top of the pile, dropped to all fours, and began digging.

“What do you think you’re doing?” the psychiatrist asked.

“With all this manure,” the little boy replied, beaming, “there must be a pony in here somewhere.”

So I am optimistic that something will happen to level the playing field and give others a fair chance to realize their dreams of winning an AGRR Championship Game.

Just sayin’.

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