Economic index slips; analysts debate

meaning
Bloomberg News
Published June 21, 2005

NEW YORK -- The index of leading economic indicators fell in May for the fourth time in the last five
months, pulled down by a drop in bond yields that in the past has signaled a softening economy.

The Conference Board said Monday that its index of leading indicators fell 0.5 percent, more than
the 0.2 percent drop analysts had expected. The decline follows a revised unchanged level in April
and a 0.6 percent decline in March.

Nine of the 10 indicators that make up the index fell in May, led by a narrower gap between short-
and long-term bond yields.

Some economists said the report signals a softening economy. Others see less significance than
they used to in the shift in bond yields.

"This thing's flashing a pretty clear signal about much slower economic growth ahead," said Joshua
Shapiro, chief U.S. economist at Maria Fiorini Ramirez in New York. "There is a tendency for some
economists to explain this away. I'm a little leery of doing that."

Other economists disagree.

"We have found that the shape of the yield curve has become less significant as a predictor of
recession in recent years," said Drew Matus of Lehman Brothers Inc. in New York.

The Conference Board said it would use a new method starting in July to calculate the contribution
of the yield spread.

U.S. Leading Indicators Down 0.5%

June 21, 2005 -- The index of leading economic indicators -- a gauge of economic activity in the coming six to nine
months, fell 0.5% in May, the Conference Board said Monday. This is the fifth straight month without an increase in
the leading index of the business research group. In April, the index was revised to show no change compared with
the initial estimate of a 0.2% decline. The report was weaker than the 0.3% drop expected on Wall Street.
Two other indexes in the report were higher. The coincident index, indicative of current conditions, rose 0.2%, while
the lagging index rose 0.3%. The leading index has now declined at a 2.2% annual rate over the last six months. It
has declined by 1.9% over the last 12 months.
Conference Board economist Ken Goldstein said the U.S. is following a global cooling trend that may be linked to
surging oil prices. "The leading economic indicators are suggesting slower growth setting in during the third quarter,"
he said. "This is not just a domestic phenomenon. Declines or slower increases appear in at least six of the eight
countries for which the Conference Board calculates leading indexes. Energy prices are one factor driving this global
trend. Of more concern is the level of confidence of both consumers and chief executives, which has been choppy."

Daniel R. DiMicco
Vice Chairman, President and Chief Executive Officer
Nucor Corporation
Speech: Monday Keynote: The Crisis in American Manufacturing

Examine The Crisis in American Manufacturing with Daniel R. DiMicco as he explains how the deck
is stacked against U.S. manufacturers and outlines an action plan that necessitates industrial
business leaders getting more involved in setting public policy.
 Nucor earned the #1 spot on The BusinessWeek 50, a prestigious list which ranks companies
on their 2004 performance.

Daniel R. DiMicco is president and chief executive officer of Nucor Corporation. He is also
vice chairman of Nucor's board of directors.

DiMicco joined Nucor Corporation in November 1982 as plant metallurgist and manager of
quality control for Nucor Steel in Plymouth, Utah and in January 1988, he became melting
and casting manager at the Utah division. In March 1991, DiMicco became general manager of the
Nucor-Yamato joint venture in Blytheville, Arkansas and became vice president in January 1992. He
became executive vice president in September 1999. He was elected president and chief executive
officer in September, 2000 and vice chairman of the board of directors in June 2001.

Prior to joining Nucor Corporation, DiMicco was with Republic Steel Corporation in Cleveland, Ohio
as Research Metallurgist and Project Leader. He was with Republic Steel from March 1975 until he
joined Nucor in November 1982.

DiMicco earned a bachelor's in engineering, metallurgy and materials science from Brown
University in Providence, Rhode Island in 1972. He earned a master's of science in metallurgy and
materials science from the University of Pennsylvania in Philadelphia, Pennsylvania in 1975.

Nucor and affiliates are manufacturers of steel products, with operating facilities in fifteen states.
Products produced are: carbon and alloy steel -- in bars, beams, sheet and plate; steel joists and
joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge
steel framing. Nucor is the nation's largest recycler.

Larry Kingsley
President and CEO
IDEX Corporation
Speech: Wednesday Keynote: The IDEX Story: Creating Sustainable Competitive Advantage
Down The Street And Around The Globe

IDEX Corporation is a $1 billion highly diversified manufacturing company with 4,000 employees
and close to 60 manufacturing and sales facilities on six continents. Through a simple, yet powerful,
business strategy, IDEX has been designing and applying advanced management and continuous
improvement tools to build an integrated management model. IDEX President and Chief Executive
Officer Larry Kingsley is actively building on his company's track record of margin expansion and
global organic growth. Kingsley will share his company's story, as well as his vision and some
practical advice for establishing a management system that enables both creativity and discipline.
Learn how value is driven from the factory floor and, ultimately, how sustainable competitive
advantage is created in today's complex global market, as well as the global manufacturing and
supply chain environment.

James P. Womack, Ph.D.

President
Lean Enterprise Institute
Speech: Tuesday Keynote: How Lean Consumption Can Transform Manufacturing And
Supply Chains

Leading businesses around the world have embraced the principles of lean production to squeeze
inefficiency out of manufacturing processes. Now, these innovative businesses are streamlining the
processes of consuming. Lean Consumption opens up new opportunities that will dramatically
reshape manufacturing and services while transforming supply chains in the next decade. Drawing
on his forthcoming book, Lean Solutions, with Daniel T. Jones, and their recent lead article in the
Harvard Business Review, James P. Womack, co-author of The Machine That Changed the World
 and Lean Thinking, will outline the practical steps being taken now to leverage lean
consumption in a wide range of sectors. This session offers practical guidance to make the
next leap in serving customers profitably.

James P. Womack is the founder and president of the Lean Enterprise Institute a non-profit
educational and research organization chartered in 1997 to advance a set of ideas known as
lean production and lean thinking. The Institute is conducting a series of research activities to create
a tool kit of methods for implementing lean thinking in a wide range of industries. The Institute also
sponsors a series of educational meetings through the year and helps people to apply lean thinking
in entirely new applications such as health care, construction, and distribution.

The intellectual basis for the Institute is described in a series of volumes and articles co-authored by
Dr. Womack over the past twenty years. The most widely known of these are The Machine That
Changed the World (Macmillan/Rawson Associates, 1990), Lean Thinking (Simon & Schuster,
1996), "From Lean Production to the Lean Enterprise", Harvard Business Review, March-April,
1994, and "Beyond Toyota: How to Root Out Waste and Pursue Perfection", Harvard Business
Review, September-October, 1996.Dr. Womack received a bachelor's in political science from the
University of Chicago in 1970, a master's in transportation systems from Harvard in 1975, and a
doctorate in political science from MIT in 1982 (for a dissertation on comparative industrial policy in
the U.S., Germany, and Japan). During the period 1975-1991, Dr. Womack was a full-time research
scientist at MIT directing a series of comparative studies of world manufacturing practices.

Featured Speakers

John Friel
CEO
Medrad
Speech: Tuesday Featured Speech: The Leadership Formula

What made it possible for medical device manufacturer MEDRAD, Inc. to double revenues every
five years, earn the coveted Malcolm Baldrige National Quality Award and consistently achieve
industry-leading customer satisfaction ratings of over 98%? The answer is leadership, but not in the
traditional sense. MEDRAD President and CEO John Friel shares why a CEO's primary role is to
create the environment for employees to be successful, then get out of the way so they can get the
job done.

Peter McIlroy
CEO
Robroy Industries
Speech: Wednesday Featured Speech: Robroy Industries Lessons Learned During 100 Years
Of One-Family Ownership

Join Peter McILroy as he will address the following topics:

 Surviving and succeeding in business for 100 years. How does this happen?
 The ability to learn from mistakes (supported by specific examples from Robroy's history
including fairly recent cases related to acquisition strategy).
 The vital role of consistency in coping with continuous changes in the business
environment.
 The vital role of measurements, evaluations and accountability in ensuring organizational
consistency.
 The role of VISION in developing corporate culture.

Robroy Industries was founded in 1905 by a Scottish immigrant, Peter McIlroy. In 1980, Peter
McIlroy II was named President of Robroy Industries, Inc. McIlroy is the grandson of Peter McIlroy,
the founder of the company. McIlroy was named Chief Executive Officer in 1988 and Chairman,
 President and CEO in 1993. Peter McIlroy continues as CEO. The fourth generation of the
McIlroy family is also now active in the company.

Workshop Speakers

Bill Donohue
Vice President
VPMEP
Workshop: Interactive Lean/Six Sigma For Executives

Bill Donohue is Vice President of Virginia's A.L. Philpott manufacturing

extension partnership (VPMEP). He leads a statewide network of
consulting project managers who are responsible for improving the
competitiveness of Virginia's industrial community. Donohue is active in
developing deployment strategy for companies using lean, lean Six
Sigma, and supply chain improvement methodologies.

Prior to joining VPMEP, he was site manager for Intertape Polymer Group
in Danville, VA, where he led a $20 million dollar expansion of packaging
film and pressure sensitive tape capacity, the implementation of a fully integrated MRP system, and
ISO 9001 certification.

Donohue completed a difficult turnaround of a flexible packaging business for Union Camp in
Arkansas, now part of International Paper. Through the use of activity based accounting, a new
business strategy was defined, applying lean and theory of constraints principles. His business went
from dead last to best in safety performance in the corporation in one year. The strategic shift
resulted in 200 jobs being saved.

In Spartanburg, South Carolina, he led the startup of a high performance green field electronic films
plant for Rexam, PLC. This $40 million business was a model for South Carolina firms, including
BMW, in how to develop a winning team based organization.

Donohue's career began with GE Plastics. Bill was responsible for a $120 million dollar global
investment program. He successfully transferred lean manufacturing methods from Toshiba
Silicones in Japan to GE Silicones worldwide. This included plant retooling, streamlined
engineering, and developing technology for high speed, small lot production, all to address pull of
the customer manufacturing.

Donohue is a graduate of the University of Rochester and the GE chemical management program.
He is a member of AME, AICHE, SPE, and is a vice chairman of the Danville VA Utilities
Department, the largest municipally owned utility in VA.

Tim Williams
Senior Consultant
George Group
Workshop: Interactive Lean/Six Sigma For Executives

Tim Williams is a senior consultant and program manager experienced in applying Lean Six Sigma
to drive bottom-line results. He has helped plan and deploy corporate-wide Lean Six Sigma
initiatives for a number of Fortune 1000 companies. Williams is experienced at building client
capability and has mentored hundreds of executives and project leaders in a variety of disciplines
including Lean, Six Sigma, scorecard development, business review practices and process
improvement strategies.

Williams has a master's in business administration from the Krannert Graduate School of
 Management, Purdue University and a bachelor's of science in organizational leadership, also
from Purdue University. He has been a speaker at conferences for the Banking Administrative
Institute and the Institute of Business Forecasting. He is a contributor to the book Lean Six
Sigma for Service by Michael George and has written several articles for iSixSigma
(www.isixsigma.com).

Session Speakers

Michael Stone
President
Stone & Associates
Session: SMART Globalization: Successful Strategies for Competing
in a Low-Cost Manufacturing World

Michael Stone is President of Stone & Associates, Inc., a strategic

management consulting firm focused on industrial and business-to-business
markets. Stone & Associates assists clients in making strategic decisions by
conducting detailed research and analysis on markets and competitors, and by modeling costs and
profitability. Prior to Stone & Associates, he was a Managing Consultant at Telesis, the strategic
consulting arm of Towers Perrin. He was educated at Brown University, where he received a degree
in development studies.

Stone's consulting experience involves Fortune 1000 manufacturing companies, and government
and non-profit organizations serving manufacturing markets. His corporate consulting experience
has involved strategic market analysis, competitive cost assessment and strategy, procurement
strategy/supply chain management, and cost and profitability modeling. His assignments have
required an understanding of markets and competitors in North America, Europe and Asia.

His public sector work includes a series of ground-breaking projects for the National Institute of
Standards and Technology's Manufacturing Extension Partnership (MEP), a national network that
provides assistance to small manufacturing firms in adopting advanced manufacturing technologies
and leading management practices.

Stone also worked with The William Jefferson Clinton Foundation to forge a landmark agreement
with leading generic pharmaceutical companies in India and South Africa. The result was a major
reduction in the price of HIV/AIDS drugs for millions of people in Africa and the Caribbean.

Linda Taylor
Industry Marketing Manager
FedEx
Session: SMART Globalization: Anticipating The Unexpected In A Global Supply Chain

An expert in the electrical manufacturing industry, Linda Taylor is responsible for developing
strategic initiatives for FedEx's services in this sector. She serves as a liaison between FedEx and
electrical manufacturers and brings insight to innovative uses of transportation products. FedEx is a
major player in this industry with a customer base of over 100,000 and a half billion in revenues.
Prior to joining FedEx, Taylor had over 15 years experience at Butler Manufacturing and The
Wiremold Company, where she held leadership roles in marketing, product development, and
manufacturing.

Globalization, Freer Trade And Labor

U.S. business and public policy leaders face a defining moment in shaping the terms of future trade agreements.
By Patricia Panchak

July 1, 2005 -- We're on the cusp of

achieving significant new breakthroughs in
freer trade, and many signs suggest that
we're not going to succeed. Ratification of
the Central America Free Trade Agreement
(CAFTA) fell deeper in doubt as May turned
into June. And concluding the Doha Round,
the latest in a series of global trade
negotiations since the late 1940s, awaits yet
another jump-start after repeated attempts
to complete it. The free-trade backlash is
gaining strength. What's gone wrong in the
global march toward increasingly open
markets? And, more important, how can we
fix it? Your involvement in how those
questions are answered could determine
whether the effort to liberalize trade moves
forward, is slowed or stopped in its tracks.
First let's put the challenges in perspective.
Creating multilateral freer-trade agreements
has never been easy. The Free Trade Agreement of the Americas, linking economies from the Arctic to Argentina
(excluding Cuba), is still pending after nearly a decade of talks. And earlier rounds of global trade negotiations under
the Global Agreement on Tariffs and Trade (GATT), predecessor to the World Trade Organization (WTO), endured
delays and missed deadlines on their completion.
Still, CAFTA and the Doha Round face many challenges, too numerous to detail here, that previous efforts did not.
Among the most significant are the following:

 We know the results of previous agreements, and the losers have become better organized and more vocal.
Industry groups (such as the United States Business and Industry Council,American Manufacturing Trade
Action Coalition and Save American Manufacturing) made up of (mostly small) companies in industries hurt
most by existing free trade agreements have formed to highlight the negatives. Their message is getting
through to legislators.

See Also...

 The effectiveness of safeguard provisions remains unknown. To win

approval of earlier free trade agreements, including -- not insignificantly -- The Importance of Trade
the entry of China into the WTO, U.S. negotiators built into the contracts Remedes to the U.S. Trade
special provisions designed to shield U.S. manufacturers from market- Relationship with China (.pdf)
disrupting market surges. With the lifting of quotas in the apparel industry A Report to the US-China
this past January, the effectiveness of those provisions is only now Economic and Security Review
becoming known. What is all-too apparent, however, is that import surges Commission bythe Trade
have devastated many U.S. manufacturers, some industries, and the Lawyers Advisory Group
communities that depended upon them.
 The evidence that those safeguards are being weakened and questions about U.S. leadership's
commitment to enforce them are growing. Meanwhile, the Bush Administration can't seem to make up its
mind on how tough to be with China on its currency manipulation and its failure to enforce intellectual
property laws, as well as how to consistently address other trade disputes.


 Perceived broken promises. Supporters of current trade policy claim freer See Also...
trade will lift millions of people in developing countries out of poverty while
creating many more jobs in the U.S. Further, they say that those new jobs
will be the higher-paying, higher value-added jobs. Unfortunately, the Cyberstates 2005™
growing numbers of citizens willing to risk dying in the desert for a series A State-By-State Overview of
of low-paying, back-breaking day jobs is a constant and visible reminder the High-Technology Industry
that free trade has hardly made a dent in Mexico's cycle of poverty. by the American Electronic
Meanwhile, in the U.S., the era of freer trade has coincided with a period Association
in which inflation-adjusted wages have fallen for U.S. workers, and those
high-technology jobs, once the information-technology bubble burst, have been coming too slowly to quell
dissent.
Unless we can address these challenges, future trade agreements will face increasing resistance and delays. The
standard rebuttals that supporters of the current free-trade policy will make to counter these concerns are not
working. We need to come up with something better.
Let me have your suggestions. But more important, let President Bush, Commerce Secretary Carlos Gutierrez, U.S.
Trade Representative Rob Portman, and your representatives and senators have them.
Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.

Chinese Market Likely To Surpass Japanese Cellphone, PC Markets

By . Agence France-Presse

June 21, 2005 -- The Chinese market for

mobile phones and personal computers are
likely to grow larger than those in Japan in
value for the first time this year according to
a Nomura Research Institute, Japanese
think tank. After the hardware, the value of
the Chinese market will also go beyond
Japan's for servers, storage and contents
for mobile handsets by 2010.
The Chinese mobile phone market is
expected to be worth 1.832 trillion yen
($16.8 billion) this year, up from 1.759 trillion
yen in 2004. The figures compared with
1.823 trillion yen projected for Japan this
year and 1.776 trillion yen last year. The
Chinese mobile phone and PC markets
have already surpassed those in Japan in
terms of the numbers of units sold.
But on an individual level, Japanese Internet and mobile phone consumers spend as much as 10 times more than
their Chinese counterparts.
The expansion of the Chinese IT market is likely to continue as its domestic consumer base grows and local firms
offer inexpensive IT services to foreign firms. Last year China became Japan's biggest trading partner, with
Japanese firms drawn to its vast pool of cheap labor and its emerging middle-class market.

Ford cuts full-year profit outlook

Shares move lower as debt ratings face S&P downgrade
By Shawn Langlois & Padraic Cassidy, MarketWatch
Last Update: 9:38 AM ET June 22, 2005

NEW YORK (MarketWatch) - Shares of Ford Motor Co. dipped in early trading
Wednesday after the automaker, faced with high costs and slumping sales,
slashed its full-year profit target.

The No. 2 U.S. automaker said Tuesday it expects to report a full-year

profit in a range of $1 to $1.25 a share, down from prior estimates of
$1.25 to $1.50 a share.
Standard & Poor's said Ford's debt ratings were unaffected for now but
added it foresees and increased likelihood of a downgrade. "Accelerating
deterioration in the North American market mix, intensifying price
competition, poor acceptance of Ford's future new products, labor strife,
and/or a weakening of the general economy could jeopardize the
ratings," S& P said Wednesday. S&P currently rates Ford BB+, the first
level of junk status.

Ford's stock (F: news, chart, profile) was lower by about 2.8% to $10.86
in early Wednesday trade.

Ford also said it would cut about 1,750 of its North American white-collar
jobs, which amount to about 5% of its 35,000 salaried workers in North
America. The cuts would take effect by Oct. 1.

At the same time, Ford indicated that it would eliminate bonuses for
management worldwide and suspend its matching payments to salaried
workers' 401(k) retirement plans, effective July 1.

As for the second quarter, which ends June 30, the company doubled its
profit range to between 30 cents and 35 cents a share from its earlier
target of 15 cents a share.

Ford cited a lower tax rate and unexpectedly strong results from its
financial unit for the improvement.

The second half of the year will be significantly weaker, with the last two
quarters generating just 7 cents a share, rather than 47 cents a share,
according to Credit Suisse First Boston. Analysts there also expect Ford
to raise its incentive program in July, in response to the success of
General Motors' widening of its employee discount program to all
buyers.

"Although the industry has made significant progress in reducing excess

inventory as Ford and GM actively cut back on production, we get the
sense that things are still tough out there," said Merrill Lynch analyst
John Casesa.

Error! Unknown switch argument.

Ford has had a rough year. Its stock hit a 52-week low of $9.07 on May 2,
down from $16.48 a year earlier. On May 5, Standard & Poor's cut the
venerable motor company's credit rating to junk, reclassifying $161
billion worth of Ford debt as non-investment grade.
Tuesday's warning also follows a steady decline in market share and
soaring employee health-care costs.

Last month, the Dearborn, Mich.-based company posted another dip in

U.S. sales, down 11% to 283,994 vehicles, as demand for Ford's flagship
truck lineup was slammed by rising fuel prices.

Earlier this month, GM (GM: news, chart, profile) , which has struggled
with many of the same problems facing Ford, said it would cut at least
25,000 jobs in the U.S. by 2008 to generate $2.5 billion in annual
savings. See full story.

Inventor of the microchip and Nobel winner dies at

81
By Dean Takahashi

Mercury News

Jack Kilby, the Nobel Prize-winning inventor of the microchip, died Monday in Dallas after a battle with cancer.
He was 81.
The former Texas Instruments engineer who stood 6-foot-6 was also a towering figure in the modern
technology age because his ``integrated circuit'' became the heart of everything electronic. Kilby's invention in
1958 spawned the $214 billion chip business and the $1 trillion electronics industry.
``Without it, there could be no personal computer, no mobile phone, no space program, no Internet, no
pacemakers or PlayStations,'' Washington Post writer T.R. Reid wrote of Kilby's idea in 2000. ``The integrated
circuit has changed the daily life of the world as fundamentally as did the light bulb, the telephone and the
horseless carriage.''
On Tuesday, Texas Instruments Chief Executive Richard Templeton said, ``Given the accomplishment he
achieved, it is time to really remember him as one of the handful of people who have had a tremendous impact
in the world.''
``The integrated circuit has changed the lives of all of us,'' added Templeton in an interview. ``Despite the
magnitude of that, Jack was so humble.''
Templeton recalled that Kilby appeared in front of Texas Instruments employees when he won the Nobel Prize
for physics in 2000. When someone asked him what he did when he heard about the prestigious award, Kilby
replied, ``I made coffee.''
Kilby and Texas Instruments were often rivals of Intel and other Silicon Valley companies. On Tuesday, Intel
officials expressed their condolences to Kilby's family.
``Jack Kilby was always an engineer's engineer,'' Gordon Moore, Intel's co-founder and chairman emeritus said
in a statement. ``He remained true to his technical roots, loyal to the principles of science, and was always a
gentleman to those who had the pleasure to meet him. He will be missed.''
Kilby's big idea for the microchip came in the summer of 1958 when he was working alone in a lab at Dallas-
based Texas Instruments while everyone else was on vacation, according to Reid's book, ``The Chip: How Two
Americans Invented the Microchip and Launched a Revolution.'' Kilby had been on the job only a short time,
having just relocated from Milwaukee with his wife, Barbara, and two children to work in the lab of electronics
pioneer Willis Adcock.
At that time, electronic devices were cumbersome because they were made up of discrete components, such
as resistors, capacitors and transistors. All of these things took up space and were expensive, relatively
unreliable and had to be wired together.
Kilby figured he could put all the components of an electronic circuit together on a single semiconductor device
-- a thin sliver that came to be known as a chip.
The chip would be a semiconductor that could provide the electrical connections, dispensing with wires
between the components. His first chip was an ungainly device, about half the size of a paper clip, with wires
soldered to a sliver of germanium on a glass slide. Kilby demonstrated it to his bosses on Sept. 12, 1958.
Robert Noyce, co-founder of Fairchild Semiconductor, followed up six months later with his own integrated
circuit fashioned out of another material, silicon.
It was Noyce's work that made chip production into more of a science, enabling chips to be manufactured on
disks known as wafers by the millions. As a result, they could be improved periodically so that the components
on the chips could be made smaller, cheaper and faster -- a phenomenon known as Moore's Law, after the
Intel co-founder.
Kilby became a well-known figure in Silicon Valley because his company tangled with Fairchild Semiconductor.
The two companies battled each other for more than a decade for the right to claim invention of the integrated
circuit. Kilby's handwritten lab notes, where he noted he could let a chip be the prime connector in an
electronic circuit, was a principal exhibit in the legal proceedings. They reached a settlement and a kind of
detente. Kilby was recognized as the inventor of the chip, while Noyce was recognized as the pioneer who
made it practicable.
Kilby's original device contained just one transistor, the on-off switch that controls the flow of electricity in a
chip, as well as three resistors and one capacitor. Intel plans to launch a microprocessor this year with 1.7
billion transistors.
Kilby retired from Texas Instruments in 1983, but he maintained a long working relationship with the company.
Services are pending for Jack. St. Clair Kilby, who was born in Jefferson City, Mo., on Nov. 8, 1923.
Texas Instruments employees posted their remembrances at www.ti.com/kilby. His daughter, Janet Kilby
Cameron, said in a statement: ``Although his engineering accomplishments were profound, his personal
accomplishment of living life with a thoughtful presence, generous spirit and eternal optimism always inspired
me the most.''

The Associated Press/NEW YORK

By MICHAEL J. MARTINEZ
AP Business Writer

Bear Stearns is facing SEC penalties

• Find More Stories Like This

TODAY'S HEADLINES
Housing Bubble -- or Bunk?

Builders Keep the Home Runs Coming

Covering the Story of Your Life

Dial R for Radio on Your Cell

The Movie Theater in Your Pocket

Sky Dayton's New Flight Plan

A Peek at Genentech's Pipeline

 Hollywood Needs to Yell, "Cut!"

A New Page in Google's Books Fight

Slow and Steady Goes the Bull

A Shift to Growth and Large-Caps

Failure Is Part of Success

Who Calls the Shots?

Berlin's Enigma in Stone

When Toadies Rule the Roost

Brazil: Little Room to Maneuver

The McDonald's of Temporary Staffing?

Volvo AB's Low-Emissions Drive

Saving for College

• More Headlines

JUN. 22 9:51 A.M. ET Wall Street firm Bear Stearns Cos. Inc. could face
fines and other sanctions from the Securities and Exchange Commission
over the company's role in improper mutual fund trading, the company
reported in a regulatory filing Wednesday.
In an update filed with the SEC, Bear Stearns said it has been the subject
of an SEC investigation into mutual fund trading activity. A number of
Wall Street firms and mutual fund companies have been heavily
penalized in recent years by the SEC for improperly trading mutual funds
after the markets close.
Bear Stearns has been in talks with the SEC on resolving the matter, but
said in its filing that SEC investors have been authorized to bring an
official action against the company. That action could lead to fines,
disgorgement of past profits allegedly obtained through improper fund
trading and remedial actions the company may be forced to undertake.

ADVERTISEMENT
"The company believes it has strong defenses to the potential claims, and intends to
continue to engage in discussions with the (SEC) regarding a possible resolution of this
matter," Bear Stearns said in its filing.
The SEC has been investigating a division of Bear Stearns Securities Inc.,
a clearinghouse for stock and fund transactions.
In recent years, the entire mutual fund industry has been buffeted by
market-timing scandals, in which funds allowed after-hours trading. By
trading after the close of the markets, but before the day's results were
updated in the mutual funds' share values, market-timers could
minimize losses or maximize profits.
Previous Bear Stearns filings with the SEC and the National Association
of Securities Dealers Inc. showed that the investigation of the company
was focused on market-timing issues.
A spokeswoman for Bear Stearns was not immediately available for
comment

The Associated Press/VERONA, Va.

By CALVIN WOODWARD
Associated Press Writer

Accidental invention leads to chewy bagel

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 TODAY'S HEADLINES
Housing Bubble -- or Bunk?

Builders Keep the Home Runs Coming

Covering the Story of Your Life

Dial R for Radio on Your Cell

The Movie Theater in Your Pocket

Sky Dayton's New Flight Plan

A Peek at Genentech's Pipeline

Hollywood Needs to Yell, "Cut!"

A New Page in Google's Books Fight

Slow and Steady Goes the Bull

A Shift to Growth and Large-Caps

Failure Is Part of Success

Who Calls the Shots?

Berlin's Enigma in Stone

When Toadies Rule the Roost

Brazil: Little Room to Maneuver

The McDonald's of Temporary Staffing?

Volvo AB's Low-Emissions Drive

Saving for College

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JUN. 21 3:59 P.M. ET Janet Dob found a better way to boil a bagel,
quite by mistake.
Her accidental invention gave rise to a business, entangled her in red
tape, left her morose in her pajamas, exposed her to the helping hands
and hurdles of government and finally became her life's work.
So it goes for those who create a small business in America.

ADVERTISEMENT

Perils exist at every turn. Many startups rapidly fail, and only about half survive as long as
five years, says the National Federation of Independent Business.
Dob, 52, has yet to get rich, but she's plenty busy, and her business
making Bake'mmm bagels is, finally, growing, now posting $750,000 in
sales in a year. The business operates in the Blue Ridge Mountain town
of Verona -- population 3,638.
When she ran a bakery in Fort Collins, Colo., customers demanded lunch
food along with her sweets and she began getting up at 2 a.m. to make
bagels. She did it the usual way -- simmering them to make the outside
chewy and the inside moist, then baking them in the oven to finish the
cooking and brown them. She hated getting up so early.
Distracted during one simmering session in the late 1980s, she left a few
bubbling in her crock pot too long and discovered when she extracted
them that they did not collapse or look distressed, but rather inviting.
These unintended prototypes got thrown out, but "I just started playing
with it."
Her goal: classically chewy bagels that didn't keep her up most of the
night. From that came the idea for boiled bagels that people could bake
at home, out of their freezer, in a hurry.
Some frozen bagels in the store are not boiled before baking. Some are
parboiled, then frozen, but take a long time from freezer to table.
Dob had discovered that by boiling the bagels until fully cooked, they
could be baked in minutes, even when frozen. Much experimentation
followed until she got it right.
"The initial mistake really was the founding mother of this invention,"
she said. "All by necessity. The necessity to sleep in."
Her retail business was born. Dob said she had seven people hand-
making 1,000 bagels a day through the mid-1990s, freezing them and
sending them to more than 60 stores. They cost 80 cents apiece to
make. She was getting 30 cents a bagel. "We were bleeding."
A venture capitalist signed on in September 1995, and took control of
the company. "I was desperate," she said. "I didn't ask all the right
venture capitalist questions."
The financier soon went bankrupt, taking the company down with him.
"For 15 days I was in my pajamas most of the time," she recalled.
The company was gone, but the idea was still alive. Pointing to her head,
she said, "Everything I created was still mine."
She moved east, to Charlottesville, Va., and took a job with a micro-
lending firm, helping to start new businesses in needy communities of
the Blue Ridge Mountains.
She still wanted to make something of her bagel idea and tried to
interest big concerns in licensing her process. That was tricky. She could
tell them she had a better way to make a bagel but she couldn't say
exactly what it was. She filed for a patent.
It took more than four years. The patent examiner is like a detective. He
must make sure no one has cornered this method before. This one was
fussy, Dob said.
Ah-hah! He discovered a similar method in an early edition of "Joy of
Cooking." No dice, he said.
No, no, Dob insisted. The cookbook did not call for boiling the bagels
until completely cooked. She set up demonstrations, proved her point. It
worked.
She'd failed to license the process to others, failed to have a major
contract baker produce them for her. But now she owned the idea and
decided to make them herself. And this time, from all organic
ingredients.
In October 2002, more than a dozen years after her "eureka" moment
with a crock pot and with the aid of a Small Business Administration
loan, Dob and her partners had their grand opening in an "incubator"
building in Verona.
Her company, Agnes' Very Very, employs eight people in the mixing and
making of 2,000 bagels a day, from a modest production line where
dough is mixed, formed into shape and cooked. The bagels come
steaming out of the vat for packaging, freezing and shipment.
Regional stores in the Whole Foods organic and natural foods chain
signed up out of the gate, and smaller outfits came on board. Lacking a
distributor, Dob and her minimalist team delivered the goods themselves
in an ever-widening arc.
She says her company is close to breaking even and she's getting to
sleep in until 6:30 a.m.
So will she jealously guard her homegrown business if the big brands --
Kraft, Paul Newman -- come calling, wanting to buy her out?
Heck no. She'll sell out in a minute.
"Oh, it will be so joyful," she said. "I want them to have it. This has been
my 401(k) all along."
Banks Scramble To
Contain Damage
From CardSystems
Hacking Incident
June 22, 2005
Washington Mutual cancels 1,400 credit
cards used to commit fraud, and others
could follow suit.
By Steven Marlin
InformationWeek

Banks that issue credit and debit cards are moving rapidly to contain
the damage caused by the potentially massive theft of card information
from a transaction-processing company that was disclosed last week.

Some 22 million Visa-branded cards and 14 million

MasterCard-branded cards were exposed to the security
breach at CardSystems Solutions Inc. that was disclosed
by MasterCard last week. The breach was reported by
CardSystems to Visa and MasterCard in late May.

Washington Mutual has canceled 1,400 cards whose

numbers were stolen and is issuing replacements. J.P.
Morgan Chase & Co., which with 94 million cards
outstanding is the nation's largest card issuer, hasn't
canceled or reissued any cards as a result of the incident
but is monitoring the situation closely, a spokesman
says. Visa and MasterCard are relaying information
picked up by their fraud-detection systems to issuing
banks, which then decide whether to cancel or reissue
cards.

The 1,400 cards canceled by Washington Mutual are

known to have been used to commit fraud; an unknown
but presumably higher number may be at risk for fraud,
a bank spokeswoman says.

Of the 14 million MasterCard-branded card records that

were exposed, 68,000 are known to have been stolen.
Visa hasn't said how many of its records were stolen but
hasn't yet detected any unusual fraud patterns resulting
from the security breach, a spokesman says.

The full extent of the damage may not be known until

consumers receive their monthly statements and begin
reporting fraudulent charges to their banks. But Visa and
MasterCard, as well as the banks themselves, have
sophisticated fraud-detection systems in place and will
promptly shut down any card accounts suspected of
being used for fraud.

The security breach involved an infiltration into

CardSystems' network by an unauthorized individual
who accessed cardholder data. Visa won't say how or
when the discovery of the incident took place, nor what
actions it has taken against CardSystems. Telephone
calls to CardSystems weren't returned.

The company may have violated provisions of the

Payment Card Industry Data Security Standard, a set of
security requirements for merchants and payment
processors that includes implementing strong access-
control measures, regularly monitoring and testing
networks, and maintaining an information security
policy. CardSystems was certified as being in compliance
with Visa's Cardholder Information Security Program--
which implements the PCI provisions--in June 2004 by an
independent security-assessment firm but was later
determined to be no longer in compliance when it was
discovered that it was inappropriately storing cardholder
data.

Companies have until June 30 to be in compliance with

the PCI standard. Hefty fines can be levied against those
found not to be in compliance.

In the wake of the CardSystems incident, which caps a

string of similar incidents involving lost or stolen card
data, banks are likely to lean heavily on third-party
payment processors to comply with PCI. For one thing, it
costs a bank between $50 and $75 to cancel and reissue
a card. Based on the number of cards already known to
have been stolen, the cost to the banking industry of
this latest incident could be staggering. There's also the
risk of class-action lawsuits stemming from liabilities by
banks for failing to protect personal information under
the Gramm-Leach-Bliley Act.

"Ultimately, it's the bank's responsibility for

safeguarding the data," says Nigel Tranter, a partner at
Payment Software Company LLC, which conducts
security audits for payment processors.

During an audit, which averages between five and eight

 days but can take longer for larger companies, Payment
Software assesses a company's business processes and
looks to identify weaknesses in physical and logical data
controls. During the six months following the June 30 PCI
deadline, there will be a push by banks to force
processors into compliance, Tranter says. "There will be
a lot of fallout from this," he says. "We will see fines
being levied and some fairly strong-arm tactics applied."

The nature of the card-processing system makes it

difficult to trace where card numbers might end up
getting stored. MonsterCommerce Inc., which provides
shopping-cart software for 5,000 online retailers,
connects to 13 "gateways" operated by companies such
as VeriSign and Authorize.Net, says Meghan Buckley,
director of software development. The gateways connect
merchants to processing companies, which in turn
submit the transaction through to the card networks for
authorization. Each gateway can connect to dozens of
processors, so neither the merchant nor
MonsterCommerce has any way of ascertaining where
the card data might be going. "It gets a little convoluted
once you pass it through a gateway," Buckley says.

MonsterCommerce itself stores account numbers--but

not the three-digit CVR number printed on the back of
cards--on behalf of merchants who may need the
numbers later, such as when handling a disputed
transaction.

In accordance with the PCI standard, MonsterCommerce

uses a cryptographic system from nCipher Corp. to
safeguard card numbers it stores. It also employs
firewalls and other security mechanisms prescribed by
PCI, such as ensuring that the merchant's Web site is
hosted on a different server from the one where card
numbers are stored, Buckley says. MonsterCommerce
itself expects to receive PCI certification before the end
of the summer.

Visa System Targets Credit-Fraud Rings

By Steven Marlin
Courtesy of InformationWeek
junio 20, 2005
Visa USA has developed technology that not only analyzes individual credit-card
transactions for possible fraud but can detect patterns of fraud across its transaction-
processing network. The technology, Advanced Authorization, will prevent an estimated
$164 million in fraud losses over the next five years, Visa estimates.

Visa's statement comes as banks and financial-services companies are

under increased pressure to address the problem of identity theft
resulting from lost or stolen consumer data. Last week, a report from
Javelin Strategy & Research said that many financial institutions that
issue credit cards focus too much on resolution after ID theft occurs
rather than on prevention and detection.

Advanced Authorization instantly rates a credit-card transaction's fraud

potential for the card-issuing financial institution, including flagging lost
or stolen card numbers. Visa is applying the technology to every Visa
credit- and check-card purchase, then it's up to issuing financial
institutions to incorporate the added information into their risk-
assessment systems.

Visa has long used fraud-detection technology to analyze individual card

transactions, based on cardholder buying patterns. That has limited
fraud losses to about 5 cents per $100 of transactions. But with phishing
attacks, hacker thefts of credit card data, and other incidents, credit-card
fraud today is often the work of rings using stolen or counterfeit account
numbers.

Visa rival MasterCard says it uses a pattern-detection system,

RiskFinder, that builds detailed merchant and cardholder profiles to
evaluate spending patterns and detect potential fraud. And it tracks card
activity by bank-ID numbers, helping it spot attacks by crime rings that
target specific financial institutions.

Visa is targeting those crime rings by looking for similarities in

transactions across the Visa network. Advanced Authorization looks for a
pattern of activity such as a fraud ring testing hundreds of stolen or
bogus account numbers.

How big an impact might the new system have? Jean Bruesewitz, senior
VP of processing and emerging products at Visa USA, is hopeful it could
cut the fraud rate by more than half--to 2 cents per $100 of transactions

Retailing

Retail is the second-largest industry in the United States both in number of

establishments and number of employees. The U.S. retail industry generates $3.8
trillion in retail sales annually, approximately $11,690 per capita. The retail sector is
also one of the largest worldwide.
Wal-Mart is the world's largest retailer and the world's largest company with more
than $256 billion (USD) in sales annually. Wal-Mart employs more than 1 million
associates in the United States and more than 300,000 internationally. The second
largest retailer in the world is France's Carrefour.

The Ever-Expanding Retailer

BY JENNIFER POPOVEC

Jun 1, 2005 12:00 PM

Retail sales this year might not be as impressive as they were in 2004, but retailers are expanding
more aggressively than they have since the late 1990s. “We haven't seen any slowdown in retailer
expansion across the nation,” says Clay Smith, president of Staubach Retail, the national retail arm of
The Staubach Co. “In general, across all segments, retailers have a stronger appetite than last year.”

While the National Retail Federation (NRF) says that retail sales this year will increase only 4.8 percent
compared with the 7 percent increase last year, new store openings in the United States are expected
to exceed 2004's by more than 20 percent, according to Steve Sakwa, a first vice president with
Merrill Lynch

Merrill Lynch, which surveyed 35 retail tenants regarding projected new store openings, says demand
for new stores in 2005 should increase nearly 23 percent to 3,149 versus 2,570 new store openings in
2004. The forecasted expansion represents the highest number of new stores added since 1999 when
these 35 retailers added more than 4,200 stores, Sakwa notes.

“The reality is that there's no slowdown in the retail expansion because the big boxes are still trying to
get sites and the smaller users are always redefining themselves and coming up with new concepts,”
Smith says.

Dressing Up
Apparel and home improvement retailers and discounters are leading the growth, according to
industry experts. These retailers are driven by an attractive combination of population and housing
growth and changing demographics.

“With the increase in housing, retailers are expanding because they want to be closer to where their
customers are; they want to be strategically based,” says Richard Hollander, president of Buxton Co.,
a Fort Worth, Texas-based retail research firm.

Such aggressive expansion is good news for retail developers and landlords including those who focus
on open-air centers, as well as regional malls. Demand from open-air tenants such as Dollar General,
T.J. Maxx and Lowe's remains robust, while mall-based specialty stores are continuing to grow. More
than 2,535 new open-air stores are planned this year, up from 1,995 stores in 2004, according to
Merrill Lynch.

Similarly, 588 new mall-based specialty stores will likely open in 2005 versus 505 in 2004. “This is the
second year in a row that mall-based specialty tenants increased their new store openings versus a
decline over the prior four years,” Sakwa says.

From a demographic standpoint, Baby Boomers and their offspring, often referred to as Generation Y
or Echo Boomers, are the most important segments of the shopping population, according to Will
Ander, a senior partner with McMillan|Doolittle LLP, a Chicago-based retail consulting firm. “We've
seen a lot of retailers targeting their expansions based on generations,” he says.

Baby Boomers, currently between the ages of 45 and 60, account for 28 percent of the nation's
population, according to the U.S. Census Bureau. That means there are roughly 79 million Boomers
looking for products and services to make them look and feel better.

The Gen Y segment is almost as large as the Baby Boomer population with 72.7 million people
between 11 and 25 years old. And, since this group is bankrolled by mommy and daddy, it has plenty
of discretionary income.

Last year, Boomers and their children spent a lot of their money on apparel. In 2004, apparel sales
totaled $173 billion, a 4 percent increase from $166 billion in 2003, according to Port Washington,
N.Y.-based research firm NPD Group. “For a while there, apparel wasn't growing at all,” Hollander
says. “Over the past 12 to 18 months, there's almost been a move from electronics to clothing.
Americans are dressing up more.”

Since June 2004, Boomer women have spent $30.8 billion on apparel, according to NPD. And retailers
are following the money. Currently, women over 35 only have 0.7-square-feet per capita of stores
focused on their needs, but spend more per person than teenagers, who have 3.6-square-feet of retail
per capita, according to Retail Forward. “The mature Boomer woman has been so lucrative that a lot
of retailers are expanding their offerings to this group,” Ander says.

San Francisco-based Gap Inc. announced in April that it plans to open more than 30 new stores
targeted to women 35 years old and up by 2007. The new concept, dubbed Forth & Towne, launches
in four test stores in the Chicago market and one in New York this fall. More than five stores are
planned in 2006 and 20-plus stores will be rolled out in 2007, according to the chain. Forth & Towne's
first stores are in regional malls, but Gap hasn't ruled out lifestyle centers.

Similarly, American Eagle Outfitters is betting on the Boomer population. It recently hired two
executives from Abercrombie & Fitch to launch a new concept focused on older apparel shoppers. The
Warrendale, Pa.-based chain is keeping the name of the concept under wraps and has yet to
announce its exact expansion plans, but analysts are forecasting 300 to 400 stores will be opened in
malls over the next five years.
Forth & Towne and American Eagle's new chain for women will compete head-to-head with
Abercrombie & Fitch's just-launched Ruehl concept. The New Albany, Ohio-based retailer has already
rolled out four stores in New Jersey, Illinois, Florida and Michigan and will open five to eight more
stores next year.

The most aggressive apparel retailer targeting female Boomers is Fort Myers, Fla.-based Chico's FAS.
Recognized in the industry for its appeal to mature women, the upscale chain plans to add between
110 and 120 new stores this year. Last year, it added 100 new stores — a 23 percent increase in
square footage — and broke into the intimate apparel market with its new brand, Soma by Chico's.
Currently, there are 10 Soma stores in six states, and the retailer will open another six Soma stores
this year.

“We're going to see a lot of Chico's copies,” Ander says, adding that targeting Baby Boomers can be
tricky, almost as tricky as marketing to teens and young adults, who aren't burdened by a great
amount of brand loyalty.

“Overall, retailers are responding to basic demographics,” says Annette McEvoy, president of A.
McEvoy & Associates, a New York-based consulting firm that specializes in softlines. “The teen and
young adult segment is a very vibrant segment since they are such dedicated shoppers.”

Ander adds: “We've seen a lot of the teen retailers expanding and even rolling out new concepts as
this group gets ready to move into new adulthood.” Pacific Sunwear, for example, is one such apparel
retailer that is aggressively expanding.

PacSun, which has stores in malls and lifestyle centers, plans to open 120 new stores this year.
Additionally, the chain will expand or relocate 35 stores to larger locations, increasing its square
footage by about 15 percent. Last year, it opened 113 new stores — a 15 percent increase in square
footage.

Abercrombie & Fitch and Gap aren't too far behind. According to Merrill Lynch, both chains plan to
open more than 100 stores. However, Gap's growth vehicle isn't its namesake brand; instead,
discount apparel chain, Old Navy is taking the lead.

Gap expects to open 175 new stores this year, more than 40 percent of which will be Old Navy stores.
Moreover, most of Old Navy's existing locations will boast new products such as Old Navy Maternity,
which will be in more than 300 stores, and Old Navy Plus Size, which will be in 177. The chain will
close 135 stores, primarily Gap units.

Fewer Home-Runs

Since 2001, home improvement and home decor retailers have been riding a wave of strong sales and
impressive expansion. “The fastest-growing segment has been the home improvement sector with 11
percent to 12 percent increases in the number of stores annually,” says Craig Johnson, president of
Customer Growth Partners.

Lowe's and Bed Bath and Beyond continue to grow, but some are not expanding as aggressively.
“Home was very hot two years ago, and home retailers had outstanding performance,” McEvoy notes.
“Housing is still strong, but there's not quite the frenzy there was.” The NRF has warned that home
furnishings stores could suffer as the housing market suffers.

And, according to research firm Global Insight, home improvement sales will increase only 3.5 percent
this year, compared with 12.1 percent last year, reaching $280.9 billion. Next year's forecast is even
less positive, with the firm predicting only 2.6 percent growth to $288.1 billion.

Regardless, Lowe's is moving ahead with its plans. The Mooresville, N.C.-based retailer will open 170
stores this year, a new record if it succeeds. Last year, the retailer opened the most stores in its
history — 140 — and now operates in 48 states. The chain currently operates 1,087 stores across the
nation totaling 123.7 million square feet — roughly 14 percent more than it had last year.

Lowe's isn't the only home retailer unfazed by the warnings. TJX Cos., operating the HomeGoods
brand, is on a fast-growth trajectory. The retailer plans to boost the number of HomeGoods stores this
year by 19 percent, adding 40 stores to the existing portfolio of 216. HomeGoods could grow to more
than 500 stores, according to TJX.

Home decor retailer Kirkland's Inc. also isn't cutting back on expansion plans. This year, the chain
expects to open 55 to 60 new stores and to close 14 non-performers, most of them in malls. The new
stores, representing an 11 percent increase in square footage, will be situated in sites including
lifestyle centers, power centers, freestanding strip centers and outlet centers.

Other home decor retailers such as the Bombay Co. Inc. and Pier I Imports Inc. are struggling to
overcome poor earnings. To that end, both chains have put most of the expansion plans on hold.
Bombay, for example, saw its comp-store sales tank 12 percent in 2004 compared with 2003,
prompting the chain to open 45 to 50 new stores and shutter 42.

Fort Worth, Texas-based Pier I is in much the same boat, as poor earnings have forced the chain to
scale back its expansion plans by more than 20 percent. This year, Pier I is set to open 85 new stores
and close 25; last year, it opened 104 stores and closed 37.

Along with the home improvement and furnishings sector, the NRF says discounters could be hit the
hardest by the lack of sales growth. Such dire warning hasn't had an impact on discount retailers,
though.

Discount giant Wal-Mart Corp. will hit the ground with 455 new stores in 2005, up from 439 last year,
according to Merrill Lynch. No. 1 competitor, Target Corp., is less than half the size of Wal-Mart and is
expected to double its store base from roughly 1,400 over 10 years. Industry experts have forecast an
annual square footage growth of 8 percent to 10 percent.

And, landlords can't overlook the dollar stores, which are hoping to take a chunk out of Wal-Mart's
sales. Currently, more than two-thirds of all American households shop at such dollar stores as Dollar
General and Family Dollar. Both of these chains hope to grow their market share by adding more
stores and being closer and more convenient to customers.

Goodlettsville, Tenn.-based Dollar General will open 730 new stores this year, including at least 30
Dollar General Markets. Family Dollar plans to open 500 to 560 stores, and close 60 to 70. Both chains
are striving to break records with their expansions.

“Most retailers are smart and strategic about their store openings, but as long as there's residential
growth and job growth, retail expansion will not stop,” Smith says.

And, although the robust number of openings this year may not impact the retail segment for several
years, Sakwa suspects that overbuilding may become a problem. “Longer-term, we are concerned
about the high levels of new store

The Top 400 Guide

Online retailing continues to be a significant merchandising channel, with e-retailing
operations growing in sales, average ticket, conversion rates and more
By Mark Brohan
Ten years ago, long before the Internet investment bubble even began to build much less burst and
Amazon.com was just beginning to sell online, few, if any, retailers could predict whether business-
to-consumer e-commerce would catch on with customers or if the Internet would ever rival stores
and catalogs as a serious sales channel.
But today, with more than a third of all households making at least one online purchase each year—
a figure Forrester Research Inc. predicts will increase to almost 40% by 2009—Internet retailing has
clearly come of age and remains the U.S. retailing industry’s fastest-growing sales channel.
U.S. Internet retail sales totaled $87.5 billion in 2004, up 25% from
$70 billion in 2003 and up 62% from $54 billion in 2002, according to Internet Retailer estimates.
Based on statistics compiled for the Internet Retailer Top 400 Guide, the top 400 retailers in 2004
generated combined web sales of more than $51 billion and accounted for 58.3% of all U.S. Internet
sales. In comparison, the top 300 web retailers in 2003 generated sales of $40 billion, 57% of all
U.S. Internet sales.
Growing the average ticket
The Top 400 Guide identifies and ranks the 400 largest retail web sites by their 2004 sales and
measures other key statistics for each e-commerce site, including monthly visits, monthly unique
visits, sales conversion rate and average ticket.
A key metric that demonstrates web retailing’s growing power and merchants’ growing ability to
analyze, predict and react to changes in online shopping behavior is the increasing size of average
orders. The Top 400 Guide reveals that the average ticket across all merchandising categories
tracked in the Guide—Mass Merchants/Department Stores, Computers/Electronics, Office Supplies,
Health/Beauty, Books/CDs/DVDs/Music, Housewares/Home Furnishings, Apparel/Accessories,
Food/Drug, Flowers/Gifts, Sporting Goods, Specialty/Non-Apparel, Jewelry, Hardware/Home
Improvement and Toys/Hobbies—was up about 16% from $92 in 2003 to $107 in 2004.
To present a true picture of average orders, that statistic eliminates sites with unusually high
average orders; some furniture sites, for instance, have average orders of $1,000 and
computer/electronics sites have average orders of $400+. With those high-value sites factored in,
the average order shoots up to $127.
That in itself is a measure of the confidence that consumers have in online shopping. It is also a
reflection of retailers’ increasing ability to close the sale. Today sophisticated search engine
marketing programs, site search tools and web analytics, along with aggressive pricing and targeted
promotions, are helping retailers move their online sales numbers up. In fact, conversion rates
generally average in the 2.5% range, but rates that reach 8% are not uncommon and some sites
report conversion rates of 18% and higher.
The multi-channel era
In 1995, when Amazon.com, CD Universe, 1800Flowers.com and other pioneers began to
demonstrate that the web was an emerging merchandising channel, some traditional chain retailers
and catalogers feared that Internet-only merchants could dominate their market niches and force
them to cannibalize store and catalog sales to catch up. But in 2005, an era of multi-channel
retailing, the Top 400 Guide shows that each segment of the market, which includes retail chains,
catalog/call center companies, virtual (web-only) merchants and consumer brand manufacturers, is
well represented and experiencing solid growth.
Of the categories tracked in The Top 400 Guide, the com-puters and electronics category and the
mass merchants/department store category were tied for the largest share of Top 400 sales, each
accounting for 28%. Computers and electronics retailers last year generated $14.3 billion in web
sales up from $10.9 billion in the Top 300 published in 2004. They accounted for 27% of the Top
300 sales.
Web sales in the mass merchants/department stores category totaled $14.2 billion compared with
category sales of $11.8 billion in last year’s Top 300. Mass merchants/department stores accounted
for 29.5% of Top 300 sales.
Other web retailing categories demonstrating solid sales growth are books, CDs, DVDs and music,
which increased sales 70% from $999 million in 2003 to $1.7 billion in 2004 and office supplies,
which rose 23% from category sales of $5.2 billion in 2003 to $6.4 billion in 2004.
Though there is still room for start-ups and expansion in the web retailing market—No. 388 Ace
Hardware grew its web sales more than 400% from just $848,910 in 2003 to $4.4 million in 2004—
the largest 100 chain retailers continue to dominate the U.S. web retailing market. In 2004, the top
100 online merchants generated total web sales of $45 billion, or 53% of all online sales. In
comparison, the top 100 retailers ranked in 2003 had combined web sales of $36.8 billion, or 52%
of the U.S. Internet retailing market.
The $1 billion club
The Guide’s top 100 includes 40 chains, 28 catalog/call center companies, 24 web-only merchants
and eight consumer goods manufacturers. Amazon continues as the Internet’s largest retailer with
2004 sales of $6.9 billion, up 31% from $5.2 billion in 2003. Amazon has more than 44 million active
customers and offers more than 10 million SKUs.
But Amazon, which on its own accounts for about 8% of all U.S. Internet sales, is joined in the $1
billion club by eight others, including No. 2 Dell Inc. (2004 web sales of $3.2 billion); No. 3 Office
Depot Inc. (2004 web sales of $3.1 billion); No. 4 Staples Inc. (2004 web sales of $3 billion) No. 5
HPDirect Inc., a unit of Hewlett-Packard Co. (2004 estimated web sales of $2.7 billion); No. 6
Sears, Roebuck and Co. (2004 estimated web sales of $1.7 billion); No. 7 SonyStyle.com, a unit of
Sony Corp. (2004 estimated web sales of $1.6 billion); No. 8 CDW Corp. (2004 web sales of $1.5
billion); and No. 9 Newegg.com (2004 web sales of $1 billion).
The guide’s top 10 merchants reflect the fact that office supplies, consumer electronics and
personal computer equipment retailing and direct marketing companies were among the first—and
most aggressive—groups of merchants to begin selling online and introduced merchandising tactics
that are now standard operating procedure for most web retailers. Dell, for instance, dominates the
selling of personal computers online because of its innovative and pioneering strategy of giving
customers the option of designing and personalizing their own PCs. But a diverse number of web
retailing categories are well represented in The Guide’s top 100, which include 20
apparel/accessories retailers, 17 computer/electronic sites, 16 mass merchants, nine specialty/non-
apparel sites, eight food/drug merchants and 30 other merchants in various categories.
Many of the nation’s largest and best-known chain retailing, direct marketing and web retailing
companies are represented in the top 100. But while the big are getting bigger in the U.S. Internet
retailing market, the web still makes up only a small percentage of many large chain retailers’ total
sales. For instance, Wal-Mart Stores Inc., which employs more than 1.5 million associates
worldwide in more than 3,600 Wal-Mart and Sam’s Club stores in the United States and more than
1,570 in other countries, is the world’s largest retailer with 2004 sales of $285 billion. But while its
estimated 2004 web sales of $782.2 million are impressive and rank Walmart.com, which also
includes the online sales of Sam’s Club, as No. 12 in the Top 400 Guide, the web represents less
than 1% of all sales. Similarly, web sales account for about 5% of total sales at Sears, 4% at J.C.
Penney Co., 3% at Best Buy Corp., 2% at Target Corp. and 1% at Kmart Corp., which in March
completed a merger with Sears to form Sears Holdings Corp.
Learning from offline
As a category, many chain retailers came later to the web and business-to-consumer e-commerce
than their direct marketing and Internet-only competitors. While there were exceptions such as
Macy’s, a unit of Federated Department Stores Inc., that began selling online in 1998, many chains
didn’t understand the Internet as a new merchandising tool and feared the web would hurt existing
sales channels. As a result, many chains early on launched limited e-commerce sites with only a
few product categories or formed separate Internet divisions and stand-alone units. But times
change and now chain retailers are using their considerable merchandising, supply chain,
technology and marketing resources to make the web a key component of their respective multi-
channel retailing strategies.
For instance, Neiman Marcus Group Inc. used 2004 to expedite e-commerce through initiatives
such as more effective cross-channel promotions. Though Neiman Marcus operated one fewer web
store after selling its Chef’s Catalog brand to Pikes Peak Direct Marketing Inc. in November, the
chain still achieved 2004 web sales of $240 million, up 49% from $161 million in 2003. Other chain
retailers turning in impressive sales performances last year include Williams-Sonoma Inc., which
racked up web sales of $477 million in 2004, a 43% increase over $333 million in 2003, and J.C.
Penney, with web sales that grew 32% from $617 million in 2003 to $812 million. Of all the chains
ranked in the Top 400 Guide, only bookseller and multi-channel retailer Barnes & Noble
experienced declining sales, with 2004 web sales down 1% from $424.8 million in 2003 to $419.8
million.
Across all retailers ranked in the Top 400 Guide, using the web to drive multi-channel sales or using
stores and catalogs to emphasize the speed and convenience of shopping online remained a top
priority. For instance, many traditional catalog and direct marketing companies are now posting
interactive editions of their catalogs and updating their web sites with catalog quick order boxes or
enhanced search tools that enable catalog shoppers to quickly and easily find products. Catalogers
also are using the web to test new products, text and images before printing their next editions.
Innovations such as these are helping many catalogers achieve higher web sales and make the
Internet their biggest merchandising channel. Both No. 70 Crutchfield, which had 2004 web sales of
$108 million, up 33% from sales of $81 million in 2003, and No. 80 Drs. Foster & Smith, a catalog
company with web sales of $90.1 million in 2004, up 29% from $69.9 million in 2003, are quickly
approaching the day when 50% of all revenues will be generated by e-commerce. And those
companies aren’t alone.
Because of their direct marketing business models, catalogers are well poised to sell successfully
online, and several catalog and call center companies posted significant year-to-year sales gains in
the Top 400 Guide. Among those with the biggest gains were No. 116 PetMed Express Inc. (2004
web sales of $47 million, up 94% from 2003); No. 139 Fingerhut Direct Marketing Inc. (2004 web
sales of $39 million, up 62% from 2003); No. 172 Barrie Pace, a unit of Hartmarx Corp. (estimated
2004 web sales of $29 million, up 44% from 2003); No. 8 CDW Corp. (2004 web sales of $1.5
billion, up 44% from 2003); No. 71 Lillian Vernon Corp. (estimated 2004 web sales of $108 million,
up 35% from 2003); and No. 52 Oriental Trading Co. Inc. (estimated 2004 web sales of $160
million, up 33% from 2003).
Solid e-commerce strategies
Catalogers jumped to the web early on, but in many merchandising niches, virtual web-only
merchants were there before them. In the late 1990s, high profile start-ups such as Pets.com,
Garden.com, Kozmo.com and WebVan poured in millions of dollars, developed complex business
models, recruited top management talent and prepared for the day when an initial public stock
offering would create a handsome return on investment. But many pure-plays were forced to fold,
victims of the dot-com bomb, a slowing economy or the failure to build a merchandising strategy
that generated visitors and sales.
Today, most virtual web-only merchants have built solid e-commerce strategies to remain
competitive, and the ranks of pure play Internet retailers are well represented in the Top 400 Guide.
Amazon.com still dominates the category. The next largest virtual merchant is No. 9 Newegg,
followed by No. 18 Netflix Inc. with 2004 web sales of $506 million, No. 19 Overstock.com Inc. with
2004 web sales of $494.6 million, and No. 28 Drugstore.com Inc. with 2004 web sales of $360.1
million.
One trend driving sales growth among the pure plays is the devotion to their niche and building an
extremely diverse and loyal customer base. Among the virtual web-only merchants with the biggest
annual sales gain are No. 45 Zappos, up 163% to $184 million from $70 million in 2003; No. 260
Thralow Inc., up 114% in 2004 to almost $13 million; No. 176 Backcountry.com, up 84% to $27.4
million from $14.9 million in 2003; and No. 111 Home Décor Products Inc., a home furnishings and
décor retailer with 2004 web sales of $49.9 million, an increase of 83% from $27.2 million in 2003.
Pure-plays are successfully establishing leadership in certain product categories, including videos,
jewelry, and health and fitness. For instance, No. 178 Ice.com, an online jewelry retailer, saw its
sales jump 73% from $15.7 million in 2003 to $27.2 million in 2004. In the health and fitness niche,
No. 160 BodyBuilding.com expects its 2005 sales to approach $45 million, up from 2004 sales of
$32 million and $16 million in 2003, based on a loyal customer base and strong content that
includes a library of more than 10,000 pages. Based on the need to become multi-channel, pure
plays such as No. 123 Bluefly.com (2004 web sales of $43.8 million) and No. 382 DVD Planet
(estimated 2004 sales of $4.6 million) are expanding into bricks-and-mortar locations.
But most virtual merchants prefer to concentrate on their Internet expertise. Web retailers across all
categories, including pure plays, are using better marketing and merchandising tactics such as
sending out e-newsletters loaded with specific content and promotional offers such as web-only
specials and downloadable coupons redeemable both online and in stores. Web retailers, especially
consumer goods manufacturers, also are looking to capitalize even more on their brand awareness
to drive site traffic and convert sales.
Manufacturing online success
Online shoppers frequently visit manufacturers’ web sites to research product information and view
content on the latest styles, features and colors. As statistics compiled about consumer brand
manufacturers in The Top 400 Guide clearly indicate, more manufacturers are commerce-enabling
their web sites and selling direct to the public. In 2004, customers spent almost $10 billion
purchasing direct online from the manufacturer. That compares to category sales of $8.1 billion a
year earlier, an increase of 23%.
Many of the nation’s biggest and most well-known consumer brand manufacturers, including No. 2
Dell, No. 7 Sony Electronics, No. 17 Apple Computer Inc., No. 110 Polo Ralph Lauren Corp., No.
193 Liz Claiborne Inc., No. 205 Patagonia Inc., No. 215 Fossil Inc., No. 218 RealNetworks Inc, No.
220 Tupperware Corp., No. 228 A/X Armani Exchange, No. 237 The Nautilus Group Inc., No. 240
Hershey Foods Corp., No. 241 Sara Lee Branded Apparel and others are ranked and profiled in
The Top 400 Guide. In practically every instance, the e-commerce functionality, product displays
and site search tools are as up-to-date and sophisticated as any competing chain retailer’s or direct
marketer’s site.
The result of paying more attention to web retailing is helping consumer brand manufacturers
complete more sales. For instance, The Pfaltzgraff Co., No. 285 in the Top 400 Guide, had web
sales of $10.5 million in 2004, up 25% from $8.4 million in 2003. One reason for the growth in sales
is the addition of a line of personalized dinnerware and a new web site, pfz.com, dedicated to
promoting—and selling—the new product line.
Manufacturers are extremely brand-conscious and, in addition to selling direct to the public, also
encourage multi-channel retailing by including links to their distributors and store locater buttons on
their web sites. For instance shoe manufacturer Steve Madden Ltd., No. 374 with 2004 e-commerce
sales of $5.2 million, features a series of pages on SteveMadden.com that enables customers to
find a store in their state. Two search boxes also help customers search by store or by ZIP code.
Consumer brand manufacturers represented about 19% of all U.S. business-to-consumer e-
commerce sales in 2004, compared to around 20% in 2003, according to The Top 400 Guide. It’s
also clear that consumer brand manufacturers, like their chain retailer, catalog/call center and virtual
(web-only) counterparts, are on an upward sales path. With U.S. Internet retailing sales historically
growing at an average 20% to 25% annually, the industry is on track to achieve total sales of at
least $106 billion in 2005.

Sony promises strategic shake-up

Sony has promised to unveil a new strategy by September, to repair the damage done
in recent years to its iconic consumer electronics brand.

At an annual shareholder meeting in Tokyo, managers acknowledged there had been strategic
mistakes.

But new chief executive Sir Howard Stringer also said the firm had spread itself too thinly, and
needed to focus on core strengths.

The firm's shares have halved in value over the past five years.
We cannot fight a battle on every front
Sir Howard Stringer, Sony chief executive

The new chief executive told shareholders that he was aware of his responsibility as the
company's first foreign chief.

"I am first and foremost a Sony warrior," Sir Howard said.

Born in the UK but with dual US-UK citizenship, and knighted in 1999, the 63-year old former TV
boss said Sony would reveal how it planned to fight back by September.

"We cannot fight a battle on every front," he said.

Sony is two years into a three-year, 330bn yen ($3bn; £1.7bn) cost-cutting plan focused mainly
on slimming down its workforce.
Growth in its media arm - driven by blockbuster films such as Spider-Man 2 - offset its weak
electronics showing last year to give it a 15% rise in profits.

Iconic shift

In the 1980s and 1990s the firm became increasingly involved with the media industry, buying
up Columbia's film studio and music business.

But tensions between the dictates of the technology and media markets have hindered Sony's
formerly sure footing.

More than two decades after Sony created the personal music market with the Walkman, Apple
has now come to define the portable music player with its iPod.

Cheap competition from other Asian firms such as Creative has also sapped Sony's
competitiveness.

Nobuyuki Idei, the previous chief executive, told shareholders that he knew he had failed to
keep Sony current.

"I was not able to read the changes" in the consumer market, he said.

The firm still makes two-thirds of turnover from electronics, but has a
huge catalogue of films and music which it hopes will help revitalise its
performance.

Sony sees its profits rise by 15%

Sony has posted a 15% rise

in annual profits, as solid
results from its film and
music divisions offset
increased losses at its core
electronics unit.

For the 12 months to 31

March, the Japanese firm made
The success of Spider-Man 2 boosted
operating profits of 113.9bn Sony's profits
yen ($1bn; £564m).

Profits at its film division rose to 63.9bn yen from 35bn yen a
year earlier, boosted by the box office success of the film
Spider-Man 2.

Annual losses at the electronics unit widened from 6.9bn yen

to 34.4bn yen.

Apple challenge

Sony is continuing with a three-year restructuring and cost-

cutting plan, as it aims to turn around its fortunes and cut
fixed costs by 330bn yen.

For the current 2005/2006

financial year, it predicts that
profits will increase by 40% as
it continues to reap the
benefits of its restructuring
plan.

The firm's electronics unit is

struggling with falling global
prices for DVD players, Sir Howard has been charged with
turning around Sony's fortunes
televisions and video cameras.

While some of its rivals make the majority of their own

components and so are better able to control costs, Sony has
a history of buying in many of its parts.

The maker of the world's first personal music player - the

Sony Walkman - is also continuing to lose ground in the world
of digital music players to Apple's market-leading iPod.

Welsh-born leader

In the fourth quarter, Sony made a net loss of 56.5bn yen,

worse than the 38.2bn figure recorded a year earlier.

Earlier this year, Sony appointed Welsh-born Sir Howard

Stringer, 63, as its first non-Japanese chairman.

He was chief executive of Sony's US division, and has spoken

about the need for Sony to better tailor its electronics
products to customers' wants and needs.

Electronics firm Sanyo also reported its annual results on

Wednesday.

Sanyo blamed poor sales of digital cameras and mobile

phones for a 137.1bn yen annual loss, wider than
expectations.

It was also hit by earthquake damage to one of its chip-

manufacturing plants.

Struggling Ford cuts 1,700 jobs

Giant US carmaker Ford has
issued its second profit
warning of the year and
announced 1,700 job cuts
among white-collar staff in
North America.

It blamed poor sales in North

America - news likely to hit
Greater competition from Asian firms
carmakers' share prices in has hit US carmakers
Japan and Europe.

Ford's chief financial officer, Don Leclair, said challenges were

"continuing to mount".

The firm said it was "evaluating options" for cuts to staff costs
elsewhere in the world.

The world's second biggest carmaker cut its 2005 earnings

forecast to between $1 to $1.25 per share, a reduction of 25
cents a share on its previous earnings range.

Before its 8 April profits warning, Ford shareholders were

looking forward to reaping between $1.75 to $1.95 per share.

Ford has been battling against tough competition from

foreign rivals.

Net profits at Ford fell almost 40% to $1.2bn in the first three
months of 2005.

The slide in Ford's fortunes prompted US credit rating agency

Standard and Poor's to downgrade Ford's bonds to junk
earlier this year, a rating given to companies thought to be at
risk of defaulting on their debt.

Tweed running mate 'suits Nike'

Fashion giant Nike is again looking to the Western Isles to add some unique flair to its
clothing, it has emerged.

It comes after Harris Tweed designed by weaver Donald John MacKay was chosen for a run of
limited edition trainers.

Mr Mackay, from Luskintyre, Harris, said the firm had now inquired about ordering more cloth,
possibly for hooded tops.

Industry leaders said the exposure had already boosted the profile of tweed amongst younger
people.

Nike had been looking for a way to update a trainer called The
Terminator, a basketball shoe from the 1980s, when they originally
approached Mr MacKay.
 They are back in touch with us and still have more plans for Harris
Tweed
Donald John MacKay
Weaver

After seeing test swatches, Nike ordered nearly 10,000 metres of cloth.

Weavers throughout the Outer Hebrides were called into action to meet the demand, because Mr
MacKay could only produce so much in the loom shed behind his house.

He told BBC Radio's Good Morning Scotland programme: "Nike were overwhelmed by the
success of the shoes, bearing in mind they were a limited edition, they were selling out as fast
as they were hitting the shelves.

"So much so that they have extended the range, the same design, but they are doing more of
them.

"They are back in touch with us and still have more plans for Harris Tweed. What they are we do
not know, but they're asking about the availability and deadlines.

"Along with the shoes, they were sampling for ladies hooded tops, we haven't heard much, but
they're certainly expressing a great interest."

Derick Murray, the owner of the two key mills which produce most of the tweed exported from
the Outer Hebrides, said the whole industry was benefiting.

He said: "We have had interest from at least two well-known high street names who have
bought Harris Tweed this season.

"It gets the cloth into a much younger consumer and that's what we've been trying to do for
years because Harris Tweed has been known to be bought by the older person.

"We didn't have the money to market it and get a younger customer to buy it, but Nike have
done this for us."

Despite the success Mr MacKay revealed that he was not really a trainer
wearer. He said he had given away his pair of Nike Terminators.

Swiss watchmakers see sales jump

Swiss watchmakers are

enjoying their best sales
growth in five years
because of increased
demand for luxury watches
and the success of new
designer brands.

The industry enjoyed a 30%

Luxury watches are back in demand
year-on-year increase in the around the world
value of its exports last month,
coming on the back of what was a record performance in
2004.

Sustained economic recovery across Asia and the strong US

economy lifted sales.

The popularity of designer fashion watches from the likes of

Hermes and Chanel have also boosted the market.

Rising incomes

Swiss watchmakers such as Swatch, Cartier and Patek-

Phillippe are enjoying buoyant times with sales, in terms of
value, 14% higher this year than at the same stage in 2004.

In May alone, exports totalled 1 billion Swiss francs (£430m,

648m euros), 29% higher than the same month last year.

The industry has enjoyed a resurgence in the past eighteen

months.
More and more people
have the means to afford
Asian consumers have
such products
become more willing to spend
money on luxury goods while
the arrival of major fashion Jean-Daniel Pasche, Federation
houses such as Hermes in the of the Swiss Watch Industry
market have helped to attract
a new type of customer.

"Generally speaking the luxury market is growing

everywhere," Jean-Daniel Pasche, president of the Federation
of the Swiss Watch Industry, told the BBC.

"You can see growth in the market for all luxury goods items
worldwide because more and more people have the means to
afford such products."

Exports to Japan doubled last month while sales to the US,

the industry's largest single export market, increased 44%.

This helped to offset a relatively poor performance in Europe

where sales - affected by Germany and France's economic
woes - are lower than they were in 2000.

2004 was a record year for Swiss watchmakers, the value of

sales rising by more than 9% year on year. This was achieved
despite total sales remaining largely flat in volume terms.

Chinese threat

The Swiss industry is facing stiff competition in the cheaper

end of the market from Asian producers. Manufacturing costs
have also risen with producers
having to meet more stringent
environmental regulations.

According to the Federation,

China now accounts for eight
in ten watches manufactured
globally.

Swiss companies, however,

have benefited from a
recovery in demand for luxury
watches selling for more than
£3,000.

Much of this success, Mr Pasche said, is down to improved

marketing.

Advertising has become more contemporary while companies

such as Christian Dior and Gucci have lent their brand name
to Swiss watches, in some instances setting up their own
production lines.

"Marketing is very important and brands have done a lot in

the last few years to communicate their products more
precisely," he said.

"You have to convince people to buy a watch instead of

spending money on a car or a holiday."
From Corporate Executive to Satisfied Franchisee: One person’s journey from successful
executive to empowered franchisee

Kerri Evans was a very successful executive who chose to take control of her career and future by buying a
franchise. Today, she owns the local territory a booming pet services franchise. Her story is below.
Bay Area, California -- After a successful eighteen years in Corporate America, it was time to take a
different career path and do something for herself. Kerri Evans had worked as both a buyer for major
corporations and most recently as a high-tech recruiter and senior staffing manager. Her career was stable
and strong, but Kerri was ready for a change.
“My career had been great. I really enjoyed the corporate world and I learned a lot but I wanted to build
equity in myself and have some autonomy in my career,” explained Evans. Looking back, she realized she
enjoyed her jobs most during their growth stages. Evans continued, “I’m just not a ‘go to meetings, work
eight hours, and leave’ kind of a person. I love challenges…”
She searched for businesses to buy, but didn’t have any idea of what she wanted or how to go about
effectively searching for the right business. She said, “I had spotted some businesses that looked promising
but thankfully, I have a wonderful accountant who really looked out for me and after analyzing the
businesses, he told me I could do better.”
Evans searched and learned a little about franchises. “I knew the marketing and branding aspects of building
a business could be so time-consuming, and I didn’t want to wait a year or more to start enjoying my
business. Franchises have the distinct advantage of coming as a complete package. Everything is tested and
proven for you. I thought this would be a great starting point into owning my first business,” said Evans.
Evans used an online search engine to do some of her research. She found listings for franchise consultants
and amongst her choices was FranchiseBuyer, a national network of the industry’s most seasoned franchise
experts and brokers who offer free franchise consulting services to qualified individuals
(http://www.franchisebuyer.com). Evans clicked on the FranchiseBuyer link and she was impressed with the
site from the beginning. “I read about the company and their pre-qualification system. As a recruiter, myself,
I knew what to look for and their system impressed me, so I filled out the pre-qual form. I quickly received a
call from a consultant and we connected immediately,” she recalled.
“I didn’t understand franchising – where to start, how to search. I was working full-time and didn’t have the
time to do the research on my own. After one phone conversation, Bill understood a lot about me and
preferences, and knew which businesses would be right and which would be wrong for me. I had some
businesses in mind when we first met, and he told me right away that they were not businesses with the
right customers for me. I feel so lucky to have hooked up with Bill and FranchiseBuyer. He was just terrific
throughout the whole process,” stated Evans.
Bill’s experience and knowledge allowed him to quickly narrow down Kerri’s choices from thousands of
opportunities in hundreds of industries to a handful, making her decision much less confusing. Evans recalls,
“Bill suggested one of FranchiseBuyer’s franchise opportunities that seemed appropriate for me. The
company was new, innovative, and immediately caught my attention. If the numbers worked, this was the
right business for me.”
“This was a significant investment of about a quarter million dollars and I wanted to make sure it was a
strong investment. Bill really did the opposite of pressuring me: He encouraged me to do my research and
due diligence. I researched the market and called local grooming shops. My accountant also went above and
beyond what he had to do to help me research the opportunity. I gave him the UFOC and models that I had
compiled and he carefully went through the numbers for me,” said Evans. “The key factors I looked for when
choosing a business were; is this business a long-term investment that will be profitable, and do I respect
the franchisees and the franchisor? I called current franchisees and worked directly with Ian Moses, the
company’s CEO and founder, during my due diligence process. I also did a lot of market research before
Discovery Day. My expectations were far exceeded at Discovery Day when I met Ian, and learned of his
vision. I was able to sign the franchise contract that day.”
“People love using my pet service! My customers tell me that my groomers are always on time, and that we
provide a great service. I’ve doubled the calls I’ve received from customers since I started my business. I’m
so glad I connected with my consultant and FranchiseBuyer. I highly recommend buying a franchise and
using FranchiseBuyer’s services to others who want to take control of their career and future,” concludes
Evans.

Database Ace
Victoria Murphy Victoria Murphy,

Business Objects is in one of technology's sweet spots, selling

software that manages and analyzes data from disparate areas in a
company's network. After spending millions of dollars to gather
information, many businesses are struggling to make sense of it all.
The firm, which is based in a suburb outside of Paris, was co-
founded in 1990 by Bernard Liautaud. He remains chairman and
chief executive.

Liautaud learned engineering at the Ecole Centrale in Paris. He

honed his business skills at Stanford University, where he received
his master of science degree in engineering management. Following
that, he spent several years as a marketing manager at Oracle
(nasdaq: ORCL - news - people ). While there, he saw opportunity in
database sales. People without technical degrees wanted to tap
digital data, and software could act as a translator. That thinking has
made Liautaud wealthy. His stake in Business Objects (nasdaq:
BOBJ - news - people ), now 2.4%, is worth $59.2 million.

The company is growing impressively and buying up rivals. In

Also In Lifestyle December 2003, Business Objects acquired Crystal Decisions for
$1.2 billion. The deal helped boost sales to $926 million in 2004.
Nevertheless, there are rumors that Business Objects is an
World's Most Luxurious acquisition target, notably from Liautaud's former employer, Oracle.
Beaches
Coolest Convertibles 2005 Forbes.com recently chatted with Liautaud about finding fulfillment,
proving skeptics wrong and marrying an American.
Real Estate Vs. Stocks
Ten Things You're Not Too Forbes: What five words would you use to describe yourself?
Old To Do
Liautaud: Competitive, balanced, sincere, passionate and
Real Estate Vulnerability perseverant. I see a lot of CEOs who have no balance. So they see
Index their personal lives collapse. They get divorced. I am still married. I
World's Most Fun have built a big family. I am relatively fit. I remain sane. I want to win,
Amusement Parks 2005 and I enjoy playing, whether it be a sport or business. The thing that
excites me is the competition. I am very intense about creating
something different.

What was the first job you had after college?

Most Popular Videos
I finished Stanford at age 23 and went on to complete my French
Better Sex Diet military service. I was deputy Scientific Attaché for Innovation at the
Coolest Convertibles French Embassy. I thought that sounded cool. Basically, I was writing
papers for the French government. I wrote about venture capital,
Surfing For Diamonds biotechnology. And I was helping small, innovative French companies
Travel Like A Billionaire sell in the U.S. Also, if a minister came to the U.S., I was the bag
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carrier.

It wasn't a real job. I knew I wasn't going to build my career there. It was not very fast moving.
Embassies are full of bureaucracy. But I got to understand the difficulties French companies have
when they try to sell into the U.S. market.

What do you consider your greatest personal accomplishment?

It is keeping balance in life. Thanks to the support of my wife, we've been able to build a great
family. We have five children. And I still have very loyal friends from years before starting the
company. I try to be at home on weekends. That sounds simple, but it is tough. Business Objects is
a very international, decentralized company. I have offices in London, Paris and California. My free
time is with my family. I don't go play golf on the weekends.

What do you consider your greatest professional accomplishment?

Starting Business Objects in France and turning it into a billion dollar, international organization. We
had a lot of skeptics. People told me I was too young, and I am French.

When we took the company public in New York, I really felt we had done something. I remember the
day of the opening on the trading floor of Goldman Sachs (nyse: GS - news - people ). We were
priced at $17.50. The first trade took a while; pressure mounted. Then, 45 minutes later the stock
sold at $27.50. It was a big symbol. We had made it from a small, French private company into a
publicly recognized entity.

What was the defining moment of your personal life?

Getting married to my wife, Susan. She has been extremely supportive in helping me find balance.
She is American. If I had married someone else who didn't have perspective on both countries and
an understanding of the business world, I wouldn't be here today. She is very strong, organized and
disciplined.

When I was younger, I was a little shy and not necessarily very comfortable with people I didn't
know. She made me more mature in that way. Now I am much more of an extrovert.

What was the defining moment of your professional life?

A lunch in Paris at a sandwich shop called Le Poivrier. It was the fall of 1989. A colleague from
Oracle, who eventually co-founded Business Objects with me, discussed the idea of starting a new
firm. We both came to that lunch with the goal of convincing the other to co-found a company. I
thought of a consulting company. He thought of a product company. I'm glad we went with his idea.

What was the greatest challenge you faced in your personal life?

The loss of my father several years ago. For the first time, I felt deeply sad. There was nothing
extraordinary about it. Everyone is touched by the loss of a parent. I was close with him, but he was
not the kind of person who says much. I have been very lucky overall. I haven't had a tough life so
far.

What was the greatest challenge you faced in your professional life?

In 1996 our products were buggy. We had high employee turnover in the U.S. Our stock price
dropped 77% in one year. The co-founder left. A lot of people were saying they knew it would
happen--these young French guys don't know what they're doing.

I did not want to leave when things were going poorly. I was convinced we were strong. Companies
go through tough times. At our end of the year sales meeting I wanted to create a bit of emotion, so
as a metaphor I used the voyage of Christopher Columbus. In the beginning there were awful
storms, not enough water or food. Some boats turned back. But the ones who stuck it out found this
new world. On a journey you always have tough times. Two years later we were one of the top ten
tech stocks on Wall Street for two years in a row.

What motivates you to succeed?

I am very competitive. I like to win. It's OK to lose, but I want to keep score. I like the thrill of the
game. The better the guys are on the opposite side, the more fun it is. We're one of the top 25
software companies in the world, so to succeed we have to bring out our best game.

What is your favorite activity outside of the office?

What I don't like to do is sit around and do nothing. I like to organize trips with family and friends. A
couple years ago we organized a big weekend with 40 friends and 100 kids in Brittany, where we
have a vacation home. We had all sorts of games and competitions, like father and son tennis, a
golf competition, a little show that the kids put together.

What is your greatest indulgence?

I am not a big indulger. It doesn't bring me a lot of satisfaction to indulge in something. I get a thrill
in doing a bike ride, hike or skiing in Chamonix.

What was the last book you read?

I love reading. It takes me to places and times that I would otherwise not experience. I buy eight
books a month. I don't always finish them. The last one that I really liked was The Kite Runner by
Khaled Hosseini.

I hate business books. They bore me to death.

What was the last movie you liked?

I just saw Ray. I thought it was great. The story of his life is fascinating. The acting was great, and I
love the music.

What is your favorite work of art?

I like sculpture. I like Rodin quite a bit. "The Kiss" is my favorite. It is very classic. There is nothing
controversial about it. My school growing up was next to the Rodin Museum in Paris, so I often had
to climb into the sculpture garden to fetch our soccer ball. That may be why I like it.

What is your favorite form of exercise?

Playing tennis. It requires strategy and execution. There is a good parallel between a good tennis
match and running a business. You have to be quick, but you also have to pace yourself. And you
have to really understand your competition--their strengths and weaknesses. I was a ball boy at the
French Open when I was 15. I also like soccer, skiing and wind surfing.

If you could go anywhere on vacation, where would you go?

I would go to Brittany to our cottage. I would go fishing in the morning and sailing in the afternoon.

I went to Brittany as a kid. It is much more rugged and real than the south of France. And you're
near the real sea. It is rougher, but more genuine.
What is the best thing about being a CEO?

Being given the opportunity to build something out of the ordinary. When you're CEO, you can
create not just a business, but a great company; a place with a vision and a unique culture. I
obviously have a big emotional attachment to this company. You can't set out to create great
culture--you have to lead by example. People will follow your steps.

What is the worst thing about being a CEO?

I work too much, travel too much. I am not at home enough. I am on planes all the time. I have a
strong family. I see them every weekend, but during the week I don't see them much.

What would you most like to be remembered for?

I am not ready to be remembered for something. I am 42, and I hope most of my life is still ahead of
me. I have a lot to learn, to experience.

The League of Extraordinary Young Executives

We searched every corner of the business world for
rising young powerhouses who possess superhuman
strength -- in management, that is. These 10 tyros
are shooting up the corporate ladder faster than a
speeding bullet. They can launch hit products with a
single bound and drive profits more powerfully than
a locomotive. Best of all, they're just getting started.

June 15, 2005

By Michael V. Copeland, Elizabeth Esfahani, Susanna Hamner, Nicole

Joseph, Om Malik, Andrew Tilin

THE HEADHUNTER
BETH AXELROD, 42, SENIOR VP, HUMAN
RESOURCES, EBAY

BORN: New London, CT

EDUCATION: BS, University of Pennsylvania;

master's in public and private management, Yale
University

SUPERPOWERS: Can see through office walls to

find competitors' top talent.

FEATS: In 1989, Axelrod got her start at

McKinsey & Co., literally co-writing the book on
attracting and managing employees, The War for
Talent, which has sold more than 50,000 copies.
In 2002 she became chief talent officer at WPP --
the 70,000-person advertising conglomerate that
owns Ogilvy PR and J. Walter Thompson -- where
she had a reputation for poaching second
bananas from rivals. In March, Axelrod was
named eBay's (EBAY) top HR exec, responsible
for recruiting and training one of the fastest-
growing workforces around. Over the past two
years, the company has added 4,600 new faces,
and its headcount continues to skyrocket.

SECRET VULNERABILITY: eBay auctions. Most

recently she's been hunting for turtle
paperweights and a vintage Mr. Potato Head. --
N.J

Anne Mulcahy: She's Here to

Fix the Xerox
Can Anne Mulcahy pull off an IBM-style makeover?

If Anne M. Mulcahy ever does manage to save Xerox Corp. (XRX ), then surely June 14 will look
like a turning point. Mulcahy, president and CEO-in-waiting, flew from headquarters in Stamford,
Conn., to Rochester, N.Y., the home of Xerox' big operations, to deliver devastating news. The
company was killing its entire line of desktop inkjet printers--a one-year-old business that employed
1,500 people worldwide and had been championed by Mulcahy herself. The division would not turn
a profit for at least two years, though, and Xerox needed cash now. "In a year of tough decisions,
this one was toughest," Mulcahy says.
STORY TOOLS
Tough hardly does justice to the year. Xerox' directors suddenly
promoted Mulcahy to president in May, 2000, after ousting G. Richard
Thoman, who lasted all of 13 months, and reinstalling Chairman Paul A. Printer-Friendly
Allaire as CEO. The company was close to foundering after years of Version
weak sales and high costs; employees were as disgruntled as
customers. Then things went from bad to worse: In October, Xerox E-Mail This Story
reported its first quarterly loss in 16 years. Debt was piling up. And the
Securities & Exchange Commission began investigating whether Xerox
used accounting tricks to boost income.

Little in Mulcahy's past experience as vice-president for human Resume: Anne M. Mulcahy
resources and chief staff officer to Allaire had tested her in this kind of
crisis management. But she has impressed Xerox' directors as a • Find More Stories Like This
decisive leader. People close to Mulcahy, 48, expect she'll soon be
named CEO. "It's a huge jump from senior executive to the chief
executive slot," says Xerox director Ralph Larsen, who heads Johnson & Johnson. But, he adds,
"she has the strategic mind and toughness to serve as CEO." (On July 26, Mulcahy was named
CEO of Xerox.)

BOXED IN. No doubt this will be a closely watched handover. After all, it was Allaire's botched
succession planning that brought Xerox to the low place it is today. Not only must Mulcahy continue
to shore up morale after Thoman's disastrous sales-force reorganization, she also has to cut $1
billion from annual costs. And that's just to get Xerox to the point where she can make some real
changes. Mulcahy believes--as do most analysts--that Xerox shouldn't be content just selling
copiers, or "boxes" in company lingo. It has to focus on "solutions" that let corporations scan, store,
and print digital documents tailored to their needs. But the old guard is still resistant. To succeed,
she'll have to do away with more than the inkjet printers.

Some people don't think she's up to it. Skeptics say Mulcahy belongs to the old guard herself, a
veteran Xeroid who started 25 years ago selling copiers. They regard her as part of a past that
weighs heavily on Xerox: a culture paralyzed by politics and earlier success. Moreover, Xerox is
family to Mulcahy: Her husband is a retired sales manager, and her brother Thomas J. Dolan is
head of the Global Solutions Group. "The good news or the bad news is she has the soul of Xerox.
The risk is, maybe she's too close to it," says a consultant and Xerox adviser. Mulcahy, though,
says she's ready to shake up the culture: "There needs to be far more innovation and receptivity to
new ideas. I have very little time for endless debate and consensus."

Today, she has reestablished some sense of trust between employees and management. No one
talks about bankruptcy anymore, and Xerox' operations are mending steadily. Operating losses in
the first quarter--typically Xerox' toughest--were far narrower than expected. Second-quarter losses
contained no similar surprise, coming in as forecast. Still, the company faces enormous troubles,
even if it returns to profitability in the second half, as it promises. Its bonds are rated junk by
Moody's Investors Service, and it is still struggling to conserve cash and pay down its huge debt--a
$7 billion loan is due next year.

CHEERLEADER. Mulcahy, who spoke briefly with BusinessWeek, is a hugely popular manager
with years of experience dealing with customers. But she hasn't been involved in product
development, and she doesn't have Allaire's financial expertise. What got her the job of president--
and the chance to prove herself ready to be CEO--was her smart decision-making as head of
Xerox' $6 billion division for small office equipment. She put together one of Xerox' biggest
acquisitions, the $925 million purchase of Tektronix Inc.'s (TEK ) color-printing division, now a
source of fast-growing revenues. As important, she proved fiercely protective of Tektronix' autonomy
and even adopted some of its business practices. "The people who felt the most change were from
Xerox, who said, `Wait, I thought we acquired them,"' says Gerald K. Perkel, a Tektronix veteran
who is now a Xerox senior vice-president.

As president, Mulcahy has been chief cheerleader in a company where executives usually keep to
themselves. During her first three months, she crisscrossed the country, holding nearly two dozen
meetings with employees. She even promised to fly anywhere, anytime to help salespeople close
tough deals.

Then, when Xerox' financial situation worsened last September, the company was forced to take
drastic action. With Allaire fixated on repairing the balance sheet, Mulcahy focused on operations,
promising to slash $1 billion from Xerox' annual costs. She's more than halfway there. Some 8,600
middle managers and factory workers have been let go; she tries to make the announcements in
person. And she said she'll reduce high manufacturing costs, which have put Xerox at a decided
disadvantage to competitors such as Canon Inc. (CAJ ), by $200 million. Xerox has not disclosed
how close it is to that goal. Indeed, only three years ago it tried to cut $1 billion, but never got there.

Meanwhile, Mulcahy spreads her message with a regular memo called "Turnaround Talk," which
alternates between enthusiasm ("Together We Can Do It!") and pragmatism ("When we shut off the
bottled water, it's not because we want to be mean-spirited. It's because all these little
expenses...can spell the difference between losing money and turning a profit").

Mulcahy has raised the energy level at Xerox. A big Bruce Springsteen fan, she's also a real gym
rat. Mulcahy grew up in a Long Island (N.Y.) household with four brothers; her father was an editor
in a publishing firm, and her mother took care of the kids. Now her mom looks after her two teenage
sons when she is away, which is often, since Mulcahy is usually on the road three days a week. She
doesn't mind traveling, even to hear criticism from employees. But they better be prepared to hear
some back. "She doesn't sugarcoat it," says Perkel.

Today the company bills Mulcahy as "the future of Xerox." To her, at least, that means a Xerox that
looks more like IBM (IBM ), offering services to help businesses manage their vast cache of
documents. Paul A. Ricci, chairman of software maker ScanSoft Inc. (table ) and a former Xerox
exec, says Mulcahy's push toward an IBM model makes sense: "What Anne's doing is smart, which
is to compete in the places where Xerox is strong." That is, in large corporations.

Of course, this isn't the first time Xerox has attempted an IBM-like makeover. Thoman couldn't
manage it, despite the fact he learned from the master at IBM, Louis V. Gerstner Jr. And the
company has been trying to transform itself for two decades. So why would Mulcahy succeed? "It's
the Nixon-in-China phenomenon," says David A. Nadler, chairman of Mercer Delta Consulting. "No
one doubts her motives." Thoman, after all, was an outsider. Plus, Xerox has never been in as dire
a condition as it is now.

So maybe it will take a Xeroid to dispose of the toxic parts of the company's culture that have made
it so resistant to change. "There's an all-out battle going on between boxes and solutions," says
James W. Lundy, a Gartner Group Inc. consultant and ex-Xeroid. Mulcahy is blunt about wanting
her salespeople to learn to sell services, too. "It's the ability to walk and chew gum," she says. "We
can't be [just] the giant copier company." Ditto that

CHART

07:29 AM EST

Time Period: Compare to index:

Anne M
Mulcahy
CEO/Chairman of
the Board/Director
at
Xerox Corporation
n/a
CONSUMER
GOODS / BUSINESS
EQUIPMENT
Officer since 1992 Track This
Director since 2000 Person
52 years old

Joined Xerox in 1976 as a sales representative and held various sales and senior management
positions. Named Vice President for Human Resources in 1992; Senior Vice President in 1998; and
Executive Vice President in 1999. Elected President and Chief Operating Officer in May 2000, Chief
Executive Officer in August 2001 and assumed the additional role of Chairman on January 1, 2002.

Fiscally Blond
Xerox CEO Anne Mulcahy is finally outshining her doppelgänger, H-P's
Carly Fiorina.
By Daniel Gross
Posted Tuesday, Feb. 11, 2003, at 1:58 PM PT

Xerox CEO Anne Mulcahy's good fortune and

misfortune is that she has always been
overshadowed by Carly Fiorina, CEO of Hewlett-
Packard. Mulcahy and Fiorina are both closing in
on 50 years old. Both are humanities majors,
who rose through the ranks at large
establishment companies in the '80s and '90s
and were frequently tabbed as potential CEOs.
They sport similar hairdos—short, blond, parted
Seeing double? Mulcahy on the side. And each is leading a risky
and Fiorina turnaround effort at a storied but troubled
technology company.

But Fiorina, the first woman to head a Dow component, has already been
the subject of two major books and countless magazine cover stories in
42 months as CEO. Fiorina starred in a flashy advertising campaign and
engineered a high-stakes merger with Compaq over the objections of
Walter Hewlett, son of company co-founder William Hewlett. But while
Carly has become—like that other exemplar of blond ambition, Madonna
—a mononym, Mulcahy has remained obscure outside the business
world.

That's partly because H-P dwarfs Xerox in both revenues ($56 billion to
$16.5 billion annually) and market capitalization ($50.8 billion to $6.3
billion) and partly because Fiorina has done a better job at cultivating a
public image. But in some ways, Mulcahy's is a more compelling story
line: Female lifer gets a shot to revive a fabled, male-dominated
company. And while Fiorina's efforts have thus far disappointed
shareholders—H-P's stock has declined about two-thirds since her arrival
—Mulcahy's triage efforts have shown better results.

Continue Article
The story of Xerox's rise and fall is well-known. The Xerox 914 copier,
introduced in 1959, transformed office work and turned Xerox into a
charter member of the Nifty 50. But since the '70s, Xerox has been
crippled by Japanese competition, its repeated failures to capitalize on
innovations at the Palo Alto Research Center, and its sloth in embracing
digital imaging.

Xerox's woes were aggravated by a bungled transformation engineered

by Rick Thoman, an IBM executive who became Xerox's chief operating
officer in 1997 and was elevated to CEO in 1999. Thoman tried to
remake the company in the image of IBM by focusing more on software
and consulting—and less on copiers—and disrupted Xerox's legendary
sales force. When Thoman was booted in May 2000, Paul Allaire, who
had led Xerox's brief '90s comeback, returned as CEO.

In October 2000, Xerox notched its first quarterly loss since the early
'80s, and the Securities and Exchange Commission announced an
investigation into the way Xerox accounted for equipment leases. The
stock fell to about $7, off nearly 90 percent from its 1999 high. Burdened
by a huge debt load and unable to raise funds in the public credit
markets, Xerox appeared on the brink of bankruptcy.

Allaire didn't want to spend his golden years engaged in what would be a
long-term turnaround. Enter Anne Mulcahy, who had joined Xerox as a
sales representative in 1976 and rose through successively higher posts
in human resources and operations. In May 2000, when Thoman left, she
was named president and designated heir apparent.

Allaire and Mulcahy started to implement a textbook turnaround

strategy: Raise cash by selling assets, slash costs (i.e., fire people),
change some of the business practices that got you into trouble, and
focus on what the company did well. At first, Mulcahy didn't seem a
natural to conduct radical surgery. After all, she had never worked
anywhere else but Xerox. Her husband was a retired Xerox sales
manager, and her brother was a high-ranking Xerox executive.

But with Mulcahy increasingly taking the lead—she was named CEO in
July 2001—Xerox slimmed down. The company sold its China and Hong
Kong operations and raised $1.3 billion in March 2001 by selling half its
stake in a joint venture with Fuji.

Mulcahy also proved willing to make tough decisions. In June 2001, she
went to Rochester, N.Y., to shut down the unit that made desktop inkjet
printers—a business she had supported. Soon after taking the reins, she
eliminated the dividend and announced that Xerox would seek to spin off
PARC as a separate company.
Xerox's financial problems—and the SEC accounting investigation—
stemmed in large part from the way it accounted for customer leases on
copiers. (The then-revolutionary tactic of leasing rather than selling
copiers is what enabled Xerox to grow so rapidly in the '60s.) Mulcahy
moved to sell off chunks of payments expected from existing leases and
struck agreements to have other institutions finance new leases for
customers in Latin America and Europe. Last April, she cut a deal with
the SEC, paying a $10 million fine and restating results from 1997
through 2001.

These efforts created breathing space. Xerox is profitable again, but it's
by no means safe. The company's fortunes are still tied to the future of
information technology spending, which shows few signs of recovery.
With growth elusive, Mulcahy last fall cut 2,400 jobs.

Fiorina got into trouble by making promises early in her tenure that the
company couldn't keep. By contrast, Mulcahy has set out modest goals.
Last fall, she said that by focusing on its core office and services
businesses, Xerox could see revenue grow at a 5 percent annual clip for
the next three years.

Mulcahy may not be getting much recognition for her efforts in the
publishing world. But the market is taking notice. Because she hadn't
worked in finance, Mulcahy wasn't tarnished by the accounting
problems. Xerox's stock is a few percentage points higher than where it
was when she came in, and it has nearly doubled since October 2002.
That such a performance is worthy of note may be a sign of how the
standards for CEO excellence have declined. But there are plenty of
other CEOs—male and female, probably including Fiorina—who would
gladly swap their own recent stock charts for Xerox's.

Twenty-six years ago, Anne Mulcahy
joined Xerox Corporation as one of
the company's first women sales
reps. Pushing boundaries from the
first, she's now chairman and CEO of
Xerox, a $17 billion enterprise that
leads the global document
management and technology
markets.
Another key factor in Anne's rise at Xerox was the role
others played—specifically, her bosses, co-workers, and
staff. She likens it to building a band of allies. "I think
the most fabulous thing…can be when you develop…
relationships over time, and you really do begin to build
a constituency," she says. "The people who have worked
for you, the people who have worked with you, as well as
the people you've worked for can become a very
powerful set of voices that support you."

Anne credits her upbringing for her And as Anne reflects, such networks will help transform
success. Growing up in a family with the presence of high-ranking women from novelty to
four brothers and forward-thinking norm. "I am one of six women CEOs in the Fortune 500,"
parents, her gender neither defined she points out, "and I certainly live for the day where
nor limited. She developed confidence those numbers are much higher, and it's not quite an
during nightly after-dinner event."
discussions, which taught her to
speak her mind about even the most
contentious topics. "You never got to
sit back and be a passenger," she
recalls. "You had to be a driver."

Attending the all-women Marymount very interesting

College was a great life decision, somewhat
Anne observes, after growing up in a interesting
household full of men. "It was one of not relevant to my
those good rounding-out life
experiences," she says. "If there was
any tendency to be hesitant about
being a leader, or making your best
contribution because there were men
in the room, that got eliminated." Comment on this Feature | Top

Anne parlayed this positive college

experience into the workplace, first
joining the Human Resources
department at Chase Manhattan
Bank. But she was eager to dive into
the core of a company and be a vital
part of the selling experience. As she
reflects, "I wanted to be a part of
what a business really did and offered
its customers." With that in mind, she
landed a job as a sales representative
for Xerox, and thus began the first
stop on a long, fruitful journey.

Just how did Anne find her way to

becoming chairman and CEO? As she
points out, "I think, in large part, it's
important to come in expecting that
good things will happen." Yet
backbone, she insists, is equally vital:
it's important to let people know
you're a force to be reckoned with. As
she sums it up, "A combination of
good attitude and a fair amount of
tough-mindedness helped me out a
great deal."

Anne
Mul
cah
y
 Anne Mulcahy was born in October 1952 in New York and grew up in a
Long Island household with four brothers. Joining Xerox in 1976 as a
Sales Representative, Anne held several sales and senior management
positions prior to her promotion to Chairman and Chief Executive. While
this promotion was quite obviously a feather in her cap, it was accepted
with mixed emotions, coming at a time when revenue and profits were
declining, customers were irate, employees were disillusioned and
shareholders were watching the value of their stock slide.

Despite this, over just a few years, Anne has managed to turn the fate of Xerox around
making it again one of the industry's major competitors. Quite some achievement, but
just how did Anne make this transition?

A three pronged plan was put in place, focusing on cash generation, the reduction of
cost base and strengthening of the core business. This meant however that Anne was
forced to kill an entire line she championed, a difficult but necessary decision. With
both her strategy and implementation plans in place, Anne then focused on her people,
needing the support and commitment of the team in order to succeed. Aware that she
was dealing with a disillusioned workforce, Anne's direct and honest approach stood
her in good stead, instilling loyalty and enthusiasm.

Anne has been described as a tough, strategic and decisive leader. She has succeeded
in providing an optimistic future for Xerox, but her story is far from over. It will be
interesting to see what fate holds in store for Anne and how she will tackle it.

Sir John Harvey-Jones

John joined ICI in 1959 and began his swift ascent up the corporate
ladder, with one management position following another. Against all
odds, he made history in 1982 by becoming the first non-chemist
Chairman of the company. It has been said that this marked the shift of
emphasis in the United Kingdom from the importance of industry
experience to the importance of management experience.

John's leadership style was always one of visibility and informality, strongly believing
that employees need an identifiable figure at the head of an organisation with whom
they can take inspiration and values. Quick to rate the ability to motivate and
encourage others as 'top of the lot' in terms of qualities for a good leader, he maintains
that there are no 'bad troops', only 'bad leaders'.

John's skills and experience are now in great demand and are shared through his
writing. He has also made his mark on TV by fronting a series of business programs
called 'Troubleshooter', helping business management to become a popular discussion
subject.

John is the winner of many awards including 'Motivator of the Year', 'Award of
Excellence in Communication' and he is three times winner of 'Industrialist of the Year'.
He is a true captain of British industry and an inspiration to business leaders around the
globe.
 Sir John Harvey-Jones

Captain of Industry & Global Trouble-Shooter

One of Europe’s most respected and internationally recognised business

leaders, Sir John has the rare ability to make complex business and
management issues understandable to a wide range of differing, and
multi-cultural audiences.
He is one of the very few business leaders to have had a series of
television programmes - The Troubleshooter series - built around his
ability to quickly identify the problems besetting today’s business, in the
fast changing corporate world of global competition and management
change. More extraordinarily these programmes were broadcast during
peaktime schedules, and attracted an audience across the socio-
economic scale.
Sir John began his career in the Royal Navy, before moving to ICI, where
he eventually became chairman at a time when the giant British
industrial group was in some difficulty. Within 30 months Sir John had
doubled the share value and turned a loss into an annual profit of more
than £1 billion.
Knighted in 1985, he has also been voted (by his peers) Industrialist of
the Year in 1986, 1987 and 1988. He was voted Motivator of the Year in
1992 and received a coveted BAFTA Award (the British Oscar) for his
television work.
He has published a number of best-selling books, including: Making It
Happen, Getting It Together, Managing to Survive and All Together Now.

'Tell Me
About
Yourself'
Doesn't
Mean
'Tell It
All'

By Arlene S. Hirsch
When an interviewer asked a systems engineer to "tell me about yourself," he felt well-prepared to
answer. After all, he'd been a professional for more than two decades and could recite the ups and downs
of his career in great detail.
Perhaps too much detail.
The engineer was only halfway through a chronological explanation of his work history when the
interviewer interrupted him to ask another question. The engineer was upset that he hadn't described
several important accomplishments. Reflecting back, he realizes he could have been more succinct. He
also should have grabbed the interviewer's attention at the beginning by saying something more
memorable than where he grew up and why he majored in engineering.
If an interviewer gives you the stage in this way, understand that responding is trickier than you think.
The following tips can help you provide a memorable and effective description.
1. Start with the end in sight.
Despite the deceptive phrasing, the directive, "Tell me about yourself," isn't a polite request for your life
story. What the interviewer wants to know is, "Why should I hire you?" Knowing this, your goal is to
craft a convincing statement that will make the interviewer want to know more about you and what you
can do for the company.
To prepare, you must develop a response tailored to the specific employer and addressing its interests,
goals, and needs. You should revise, refine and rehearse your script until you can deliver it flawlessly --
with energy, enthusiasm and confidence.
2. Take the time to establish rapport.
When interviewers invite you to tell them about yourself, they're asking you to step into the spotlight, a
place where extroverts and natural performers shine but where introverts can become anxious, tongue-
tied and self-conscious.
If you don't feel comfortable in the limelight, look at the situation in a different way. Rather than
delivering an oratorical performance, focus on establishing an emotional bond with your interviewer.
Here's where body language can make a difference: Smile, make eye contact, lean toward and talk to and
not at your listener.
3. Sketch the big picture.
Experienced candidates should focus on the big picture first so that interviewers will place later
information in the proper context. Start by providing an overview that allows them to see your career in
total. Example: "Why don't I start with the big picture? As you can see from my resume, I have more
than 15 years of experience in sales, marketing and general management, primarily in consumer
products. The majority of that time was in the food-and-beverage industry. Thanks to my experiences at
________ and _________, I have an in-depth knowledge of the domestic and international marketplace
for the food and beverage industries."
4. Focus.
After you sketch the big picture, talk about specific experiences that are most relevant and interesting to
an interviewer. Your research can pay off here. Learning as much as you can about the industry,
employer and job (via the job description) allows you to zero in on your most relevant qualifications and
experiences.
A senior communications manager experienced in marketing, public relations and event management
knew that a prospective employer, a nonprofit, was well known in the Latino community for a successful
annual conference. In previous years, major politicians and government officials had been keynote
speakers.
While preparing her tell-me-about-yourself statement, the communications manager decided to focus on
three major experiences:
  her success in marketing and promoting high-visibility events;
 her high-profile experience working on political campaigns; and
 her experience with the Latino community.
However, she didn't use a chronological approach since these experiences happened at different points in
her career.
5. Showcase your communication skills.
Most interviewers observe how you organize and present information about yourself. If your recent
experience is most relevant, detail your accomplishments in reverse chronological order, giving less
emphasis to your first few jobs. Conversely, if your most relevant experiences happened in the middle of
your career, you may want to start your description at that point.
Assume, for example, that your first love is training, but recently you've spent more time working as a
general human-resource manager. When interviewing for a training position, your tell-me-about-yourself
statement might start: "Since training is my first love and one of my core strengths, I'll start by telling
you about my training experience and accomplishments. While I was working at _________, I put
together a very successful management-training program that received rave reviews from participants..."
6. Highlight the benefits you'll bring to the employer.
A job search is a self-marketing campaign. Experienced marketing experts say to stress a product's
benefits to the customer rather than its features, which could well be nifty but the customer might not
need them. In a job search, you're the product. Toward that end, orient any discussion of your skills and
experiences toward showing how they can benefit your future employer.
Example: "From the job description, it sounds to me like you're looking for someone who has strong
project-management skills. My greatest accomplishment as a project manager was at _____________."
From there you can describe the goals of the project, what you did to attain them and the subsequent
results.
7. Spotlight the positive.
Never say anything negative about yourself or previous employers. If you decide to highlight earlier
experiences instead of a more recent role, be sure to present all your jobs in a positive light. To do that,
emphasize how and why your later experiences enhanced your abilities and scope.
For instance, after describing her training accomplishments, the HR executive might follow up by
discussing how her success as a manager has given her a better understanding of organizational needs
and naturally enhanced her credibility and performance as a trainer.
8. Provide details.
Don't expect interviewers to take your story on faith alone. Have specific examples ready to illustrate
your skills. For example, to emphasize your problem-solving ability, describe a problem you faced in a
past job, what actions you took to resolve it and the result of those actions. Whenever possible, choose a
problem that's similar to those the prospective employer might face. To determine the type of challenge
you might be asked to correct, refer to the job description or, lacking that, ask the employer to describe
the position so that you can focus your presentation effectively.
9. Disclose personal information cautiously.
When it comes to disclosing personal information, there's no right answer. It depends on two factors:
whether you feel comfortable using personal details and what you plan to accomplish by doing so. While
disclosing personal information can be a good icebreaker and rapport-builder, it also can backfire. You
never know how an employer will process that information. Will a hiring manager be glad to know
you're a family man or worry that you won't be free to travel or work long hours?
Keep the purpose of the conversation in mind. Whenever possible, mention personal information
strategically. For example, an executive who's interviewing for a job with a toy manufacturer might
share anecdotal information about his children's experience with the manufacturer's toys. An executive
who knows that a job requires extensive international travel could share about his or her personal travel
experiences.
10. Finish strong.
When should you return the floor to the interviewer? Use nonverbal signs as your cue. If an interviewer
seems restless and bored, ask for feedback about your presentation: "Is this what you want to hear? Or is
there something else that you'd like me to focus on?" This allows the interviewer to change the flow of
communication and establishes a two-way dialogue.
If the interviewer remains attentive, you'll have more leeway in how you
wrap up. The best way to end your statement is to put the
conversational ball in the interviewer's court by saying why you're
interested in the company and position and asking for more information
about current needs. Listen attentively to the response to determine
what parts of your experience and accomplishments to mention as the
interview progresses.
Parents
Don't
Always
Know
Best
About
Jobs

By Erin White

From The Wall Street Journal

Online
Now is the time when college kids who haven't landed jobs yet become increasingly desperate. As they
hone their résumés and cover letters, they often turn to their parents for advice.
Parents oblige, with good intentions. But they aren't always the best source of wisdom on these matters.
Often, the advice parents give is outdated, irrelevant or just plain lousy.
Even parents with successful careers aren't necessarily expert job hunters. And many parents don't have
much experience in hiring or recruiting. So they sometimes pass along the mistaken assumptions they
have made over the course of their careers. Or they suggest things that might be appropriate for their
own industry or level of seniority but that aren't right for the jobs their kids are pursuing.
"Most of these parents do not have any relevant particular background that would enable them to give
decent advice," says Brad Karsh, president of JobBound, a Chicago-based career-counseling service. "I
cannot tell you how many times I've heard, 'but my mom told me to put that on my résumé' or 'my dad
told me to include that.' "
Mr. Karsh spent 10 years as a recruiter at a big ad agency before founding JobBound. Recently he
advised a college senior hoping to land a marketing job upon graduation. Mr. Karsh helped her craft a
résumé. A few weeks later, she came back with major revisions to the version Mr. Karsh had suggested.
It turned out she had shown it to her dad, who insisted he knew better.
"Every single thing that I had done, her father questioned," Mr. Karsh said. Figuring her dad must be a
job-hunting expert to have such strong opinions, he asked, "So, your dad must work in HR or
recruiting?" Turns out he didn't. Her dad didn't have any experience in marketing, either, the woman's
intended field.
Some of the dad's advice suggested he didn't recognize how competitive the job market is for college
students today. The father, for instance, had told the woman to exclude many details of her work
experience from her résumé. His logic: This would leave her something to talk about in the interview.
Mr. Karsh disagreed. She would hurt her chances of even landing an interview if she omitted such
significant information. "Given the fact that one out of 100 people actually get the interview, I don't
know that I'd save anything for the interview," he says.
Her father also advised her to keep some of her accomplishments vague, in hopes that the hiring
manager might assume her achievements were even better than they were. The woman, for instance, had
held a summer job as a magazine-ad salesperson. She had sold 10 ads, which impressed Mr. Karsh. But
the woman's dad advised her not to write how many ads she had sold. He figured that if she simply wrote
"sold ads," the interviewer might think she had sold dozens.
Mr. Karsh warned that skeptical hiring managers were unlikely to assume the woman had been so wildly
successful. "A recruiter is going to assume the worst," he says. Listing the number of ads would reassure
interviewers that she had accomplished something.
Peg Hendershot, director of Career Vision, a Glen Ellyn, Ill., career-counseling service, says some
parents go a step further than the father of Mr. Karsh's client -- they write their kids' résumés themselves.
While this might result in impressive, professional-sounding résumés, the tactic often backfires in
interviews.
Sometimes parents exaggerate their children's responsibilities at, say, a summer job. But the kids can't
back up these boasts when they discuss their actual job duties. Other times, parents describe supposed
achievements in business-buzzword terms that their kids don't understand. When asked to explain these
achievements in an interview, the kids don't have a clue. So the interview ends up "a total flop," Ms.
Hendershot says.
Marc Karasu, vice president of marketing at Yahoo Inc.'s HotJobs career site, says proud parents
sometimes tell their children to list mountains of accomplishments on multipage résumés. Usually, this is
inappropriate: Older, more experienced job seekers -- who have longer work histories -- typically can
keep their résumés to one or two pages. Mr. Karasu recalls one young woman who was job hunting after
taking a year off to travel following college. Her mother encouraged her to list "every pit stop" she had
taken on her travels, Mr. Karasu says. The result was an inappropriately exhaustive four-page résumé.
Parents sometimes give bad advice about interviews, too. Mr. Karasu
says parents often tell kids, "Just be yourself." But recent college
graduates have so little experience interviewing, they need more
concrete help. He suggests that parents stage mock interviews with their
children so that they can get a sense of what questions they might be
asked and how their answers sound. "What might sound good as you
rehearse it in your head might not sound good when you say it out loud,"
he says.
A
Good
Career
Move
Means
a Job
in Asia

By Erin White

From The Wall Street Journal

Online
During the dot-com boom, ambitious U.S. business-school students looked West to Silicon Valley for
opportunities. Now some are looking East to Asia for full-time jobs as well as summer internships.
China, where there has been rapid economic growth in the past few years, has the most allure. But other
markets, including India and Singapore, also are drawing M.B.A. job candidates.
They're attracted by the adventure of working in Asia as well as the chance to gain experience in a region
that is increasingly important to U.S. companies. Knowledge of Asia, especially China, could help
propel their careers, they believe. Another draw, especially for entrepreneurial types, is the chance to get
in on the ground floor of new businesses and potentially earn big sums or quickly move up the ranks.
A February career fair for international jobs held by seven top U.S. business schools attracted 337
applications for 48 jobs in Asia, says Bilal Ojjeh, chief executive of MBA-Exchange.com, the service
that helped organize the fair, which included Harvard, Stanford and Columbia universities, the
University of Chicago, Massachusetts Institute of Technology's Sloan School of Management,
University of Pennsylvania's Wharton School and Northwestern University's Kellogg School of
Management. Last year, a similar career fair had 26 Asian job postings, and drew only 212 applications.
"There's just this tremendous interest," says Joseph Kauffman, a 27-year-old first year student at Harvard
Business School who is co-president of its Asia Business Club. With 160 members, it's one of the biggest
clubs there. Mr. Kauffman figures he's gotten about 20 emails from classmates he doesn't know who
want to talk with him about working in Asia. Mr. Kauffman himself is headed to Morgan Stanley in
Hong Kong this summer.
Risha Bond, a 26-year-old first-year student at Stanford University's Graduate School of Business, has
her sights on India. A native Midwesterner, she isn't ethnically Indian, is fluent only in English and has
never even visited India. But this summer, she wants to land an internship doing biotech work at a big
energy company there.
She could find similar work in the U.S., but she's more excited by India. "The growth in India is so hot,"
she says. She likes the business challenges, and thinks that ultimately, it could pay off financially. "It
could be a very lucrative play," she says. "You establish yourself early and in a young industry...that's
potentially big business."
The companies that are hiring U.S.-educated M.B.A.s for posts in Asia are often the same ones recruiting
lots of M.B.A.s for American jobs: investment banks, consulting firms, and big multinational
corporations in areas such as consumer products, technology and health care. But although many of
these companies are expanding their Asian operations, these jobs aren't always easy for Americans to
get.
For many Asian posts, language skills are a must, which knocks most Americans out of the running.
What's more, American M.B.A.s face growing competition from Asian M.B.A.s, either ones who are
educated at Asian business schools, or U.S.-educated Asians returning home. Since Sept. 11, 2001, it's
gotten harder for these international students to find jobs in the U.S., so even though many would prefer
to land jobs here, they often return home, says Phil Han, a career counselor at the University of
California at Los Angeles's Anderson School of Management. Harvard's Mr. Kauffman encountered
tough competition for his Hong Kong summer internship, despite impressive credentials. He grew up in
rural Pennsylvania, but is a fluent Mandarin speaker after studying it in college and working at Coca-
Cola Co. in China for four and a half years after graduation.
Many of his English-only classmates wouldn't have passed an early-round interview: a half-hour phone
conversation conducted entirely in Mandarin with two employees in Hong Kong. In further interviews,
he had to push hard to demonstrate his serious interest in Asia. "Competition was extremely stiff," he
says.
Lower salaries deter some American students. It's not a big issue with investment banks and top
consulting firms, which generally pay M.B.A.s comparable or just somewhat lower salaries for Asian
posts. "There is a differential but it's not a show-stopper," says Christopher Morris, director of M.B.A.
career management at Wharton.
But for other jobs, the pay difference can be significant. A consumer-products or pharmaceutical
company, for instance, might pay roughly half the U.S. salary of $85,000 to $95,000 to a "local hire,"
says Mr. Morris. Students can negotiate to get closer to the U.S. salary, but their pre-M.B.A. experience
makes a big difference. That's why many M.B.A.s hope to work in the U.S. for a few years, pay off their
loans, and get some experience in Asia later on in a cushier expat assignment.
Still, despite the hurdles, the numbers of Asia-bound students are growing at some campuses. At
Wharton, Mr. Morris estimates that at least 7.5% of second-year students will take jobs in Asia on
graduation, up from 6.3% last year. At Dartmouth College's Tuck School of Business, it looks like at
least 20 first-year students will take internships in Asia, about double the number from last year,
estimates Richard McNulty, director of the career development office at Tuck.
Kevin Widlansky, a 30-year-old Detroit native, took a job with McKinsey &
Co. in Singapore after graduating from Wharton in December. He found
salaries in the region to be somewhat less than similar jobs in the U.S.
But with the lower cost of living and lower taxes, "I would say we're at
least even," if not saving more in Singapore, he says. Plus, he loves the
challenge of working in such a dynamic place. He already speaks fluent
Mandarin and has started studying Burmese. "Excellent teak," he says of
the wood the country is known for. And who knows, he jokes: In 10 to 15
years, Myanmar could be the next big thing.

Business Casual Services and Programs

Dress Code Consulting Services
Casual dressing in the workplace is one of the biggest challenges facing professional organizations. We wrangle wit
casual dress is a more popular perk than even flexible scheduling and on-site daycare. Meanwhile, companies repo
increased absenteeism and tardiness.
What’s an organization to do? The current trend calls for strict dress standards, says a recent article in USA Today. T
is declining. In 1998, 97 percent of companies allowed employees to dress casually either every day or once a week
The challenges of casual dress include:
• hundreds of interpretations of business casual dress
• lack of a detailed dress code policy/guidelines
• lack of a noncompliance policy
• increased sexual harassment issues
• casual attitude and casual manners
• missed business opportunities
• lack of clothing maintenance and overall grooming standards
• decrease in ethical behavior
• greater incivility in the workplace

Making the best impression when dressing in business casual clothing is a must for all businesses today. Dressing t
employers and employees will benefit tremendously from clearly defined and established guidelines.
Professional Skill Builders is in the business of helping companies establish business casual dress polices that are a
environment and industry.
Dress Code Consulting Services
We can help you define the difference between business casual and casual dress. We’ll walk you through creating o
company’s professional environment. Our goal in this effort is to help you:
• creating a name or acronym for the dress code program
Business Dinners
- Chapter Excerpt - the entire article -
It is traditional in Germany to eat the main meal of the day at lunchtime,
between 11:30 AM and 1:30 PM.

In contrast to a long, several-course meal, a German lunch usually

consists of an appetizer (usually soup), a main course, and a dessert.
When you are attending a business conference, both lunch and dinner
are considered important components of the conference. Meals allow
those attending to make personal contacts and to continue discussing
business issues in a more casual atmosphere.
Ladies at the Dinner Table
Contrary to earlier traditions that frowned upon women speaking with
the waiter, tasting the wine, or paying the bill, all of these things are
normal today. It is not only acceptable for a woman to ask for the bill,
but also to enter a restaurant first, and - if acting as hostess - to try the
wine before it is served. However, this last situation will usually not
come into question at business luncheons because, in most cases, only
non-alcoholic beverages are served.
Alcoholic Beverages
The consumption of alcohol in Germany (even during the work day) may
be more common than you are used to in your country, and when others
drink, you may feel pressured to drink as well. Again, you don't need to
worry - modern etiquette suggests that it is acceptable to refuse a drink.
In fact, you can even offer to order drinks for others and refrain from
drinking alcohol yourself.
Leaving a Tip
Generally, the rule states that 10-15% of the bill's total should be left as
a tip if you were satisfied with the service you received. If you weren't
satisfied, you can simply not leave a tip, and others will not frown upon
you. You may, on the other hand, want to leave more than the standard
10-15% tip if the restaurant staff really went out of their way to
accommodate your needs. Also, when leaving, it is polite to thank the
staff or your waiter / waitress with, "Danke schön." ("Thank you.") This
lets you express your appreciation in addition to the tip that you leave
behind.
Specific Questions
 1. When in Germany, should I conform my table manners to those of the Germans?
For the most part, you do not have to make too much effort to mirror the Germans at the table. If you
practice good table manners at home, they will suffice in Germany; it is not necessary to worry about
how to hold your fork or where to place your napkin. But be careful - some behavior should be
avoided. For example, in Southern Asia, it is normal to chew loudly when eating and to belch after a
good meal. If you were to do this in Germany, it could embarrass you as well as those sitting with you.
2. What are a few table manners that I should keep in mind in Germany?
o Before eating, wish everyone at the table "Guten Appetit." ("Enjoy your meal.")
o Only take as much food as you plan on eating. The Germans usually "clean their plates".
o When you or others are eating, keep your hands on the table, not under it.
o Sit up straight, close to the table.
o Don't prop your head up with your hands.
o Don't bend your head over your food when you are eating or "shovel" your food in your
mouth.
o Don't begin eating until everyone at the table has been served.
o Don't begin drinking until everyone has something to drink and a toast has been made.
o Look others in the eye when toasting.
o Do not get up to leave when you have finished eating, but wait for the others; if you came to
dinner with others, then leave with them also.
o Do not belch or chew with your mouth open.
o When you are finished eating, places your knife and fork together and rest them on your
plate.
3. Should a host pay the bill at the table with the guests present?
No! It is much more polite to pay the bill at the bar in order to avoid misunderstandings or discussions
about paying. This also allows the host to inconspicuously pay, look over the bill, leave a tip, and
order an aperitif for everyone.
4. Is it acceptable to ask for the house wine in a good restaurant?
Yes! A good house wine is a good advertisement for a restaurant. Also, you can be sure that a wine
from wine countries such as Germany, France, and Italy will never be of bad quality. When your
budget doesn't allow an extremely expensive wine, ask the waiter to recommend a low cost, quality
wine. By naming the amount that you are willing to spend, you show that you are confident in the
situation and not embarrassed to ask.
5. When I order soup, is it polite to tip up my soup cup and drink the last bit of soup?
Yes! However, in order to do this tactfully, take hold of one of the soup cup handles, tip, and drink.
Keep in mind that this is only polite when your soup comes served in a CUP, not a bowl!
6. Is it appropriate to use toothpicks or put on lipstick at the table?
Yes! These are not the most tactful things to do at the table, but if they have to be done, then go
ahead. Lipstick can be put on discretely almost anywhere, but is it really necessary to put it on at the
table? If you really want to freshen up your make-up, be sure to go to the bathroom.
7. When I attend a social event, should I wait to take off my sport coat or jacket until I am asked to do so
by the host?
Yes! Good hosts and hostesses should react quickly when they notice that the room temperature is
rising and offer to take your coat for you.
8. Is it true that I should not lay my paper napkin in my plate when I am finished eating?
Yes! In Germany it is customary to fold your napkin after eating and place it to the left side of your
plate. The Germans have a very strict recycling system, and this helps ensure that the napkin ends up
in the correct recycling bin. Cloth napkins should also be folded and laid to the left side of your plate,
never in the plate!
9. If I would like to say a few words at the table or to make a toast, is it appropriate to bang on the side
of my glass to get people's attention?
No! Although you typically see this in old German movies, today it is more appropriate to stand and
ask for their attention in a slightly raised voice. Those seated at the table should automatically stop
talking and pay attention.

Let's Do Lunch
Cultural Nuances of Business Lunches Abroad
by Nina Segal
Monster Contributing Writer
 "Let's do lunch" is a phrase that we have all heard and used many times. It is quite
common for business to be done at the dining table, whether it's a sales call, a negotiation,
or a meal to check in and maintain an important client relationship. Business lunches and
dinners are common around the globe, though they are handled differently in each country.
It is important to understand cultural etiquette around dining in order to avoid embarrassment
and maximize your chances of business success.

Keep in mind that whenever cultural differences and similarities are discussed, a great deal of
generalization is being made. Obviously, each individual has his or her own particular style, and
it is important to be aware, listen carefully, and take your cues from your host. That said, there
are some generalities that might be helpful when approaching a business meal.

In the United States, individuals generally have a reputation for getting right down to business.
Meals are a means to an end -- to close the deal, for example. And many Americans have taken
this attitude, and turned off many a client.

Mexico/Latin America

In Latin America, for example, it is customary to be more social over lunch before turning to
business at hand. You might be asked about your family, how you are enjoying the country, and
should reciprocate the pleasantries. You may be considered rude and too overbearing if you
jump right into a negotiation. Andrew Goldberg, president of Andrew Goldberg and Associates, a
consulting firm providing technology information for Latin America, notes that, "The biggest
differences I have observed between business lunches in Mexico and the US are the length and
content. Business lunches in Mexico typically last two or more hours and begin in the mid-
afternoon. The topics of conversation can range widely from family to current affairs."

Brazil

Lunch and dinner tend to be eaten later in the day in Brazil because Brazilians like to start their
day a little later than Americans or Europeans, and business dinners are generally preferred over
lunches. Brazilians love to invite visitors to savor the traditional drink of "Caipirinha," a highly
potent mixture of Cachaca (sugar cane spirit) lime and sugar. It's deceptively refreshing and
highly intoxicating, so go easy, advises Gina Teague, a cross-cultural counselor, "or you might
lose the competitive advantage!"

The UK

In Britain, a business lunch might occur at a pub, a restaurant or a gentlemen's club. There is
less discussion of family or personal life. The British culture tends to be a bit more formal, so
you might want to keep things on a business, economic or (appropriate) political note. The
British are quite polite as a rule, and will tend to be put off by loud, backslapping sort of
behavior. Teague reminds clients that "table manners in Europe and the UK in particular are
extremely important, particularly at more formal luncheons with senior management. This
means keeping both knife and fork in your hands throughout the meal -- not using the knife
initially then laying it down on the plate, as is usually done in the US."

A senior business professional in the UK with whom I spoke also explained the ritual of
"gentlemen's clubs," which date back to the pre-Victorian era. If you are invited to one of these
clubs for a meal, it is very rude to discuss business, and taking out a briefcase or a cell phone
could not only result in you being asked to leave, but could also cost your host his membership.

Japan

"Lunch is traditionally the main meal of the day, and even today, in busy cities, it can still be an
elaborate affair with several courses, " writes Dean Foster in his book, The Global Etiquette
Guide to Asia. Catherine Tansey of International Business Training Inc. goes on to advise, "Try
to avoid having noodles if you have a more informal business lunch. Many Japanese enjoy
slurping their noodles in order to make them cooler to eat. They are always a bit shocked when
they see that Westerners simply can't slurp their noodles."

Business dinners can last for several hours until late in the evening, though business breakfasts
are not a favorite for the Japanese, who think it is a somewhat strange ritual. Finally, guests will
never see the host paying the bill. Tansey notes that it is always done discretely beforehand or
after the lunch.

These are just a few examples of the role that meals play in conducting international business.
What all of these instances have in common is the lesson that it is important to take time and
learn the customs and unspoken norms of other countries in order to build relationships and be
an effective businessperson.