Tennessee is Good for Business

According to a new survey of corporate executives, Tennessee is ranked fourth in terms of business environment. This is what Phil had to say:

“This study confirms that our efforts to create a better business climate in Tennessee are being recognized by key decision makers,” Gov. Phil Bredesen said in a statement. “We know one size does not fit all and each company has distinct business needs, and that’s driving continued investment by new companies in Tennessee.”

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The Cost of V-Dub

It's great that VW will be locating its first North American plant in decades right here in Tennessee, but many are asking how much the taxpayers are coughing up for the deal. Of course, state and local officials are mum. It will be great both for the city of Chattanooga and the state of Tennessee; at least 2000 jobs are expected to be created. I just wonder what the long-term benefits are. Do the financial benefits outweigh the financial costs? As a Tennessee taxpayer, I sure hope so. One problem, though, is the location of Chattanooga. The city is a stone's throw from Georgia and Alabama. Where will the workers be living and spending their money? Where will the auto suppliers locate? I wish this would happen within Tennessee, but it might not since Nooga is such a border town. I hope state officials considered this.

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Starbucks Eats Itself

The news that 600 Starbucks stores will be closing soon has been met with much shock and awe. How could such a successful company be met with such hard times? Well, it makes total sense. They expanded way too fast; in some cities, a Starbucks is literally on every corner. Is that really necessary? I think the product should bring people in; not the ultimate convenience. When a new Starbucks opens, it often eats into 25-30% of the sales of a nearby Starbucks. That is no way to operate a business. Company executives must have seen this coming for a long time. You can't sustain such growth patterns. This means that the profit margins of stores decrease while you see a great increase in expenses caused by the rapid expansion. It will be good for the company to go back to the basics, cool down a little bit, and stopping eating itself.

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Wal-Mart's Changing Image

Looks like Wal-Mart is changing its corporate image. Some of the changes include a new logo that takes "Wal-Mart" from two words to one and adds a strange burst/star thingy to the end. I guess they are trying to show people that Wal-Mart can be new and modern. Well, the last time Wal-Mart tried to be hip; they were met with sluggish clothing sales. Wal-Mart has seen very few changes to its logo over the years, and this new one seems quite out of place with their rather bland history.

Things are looking up for Wal-Mart now (new logo or not). The economy is tanking quite a bit. That means people want deals, and they know that they can find it at Wal-Mart. Sales have been surging, and the stock is doing much better. Maybe a good investment?

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Wal-Mart Expands Pharamacy

If you haven't used the Pharamacy at Wal-Mart, you might in the near future. Much like it did with groceries about 20 years ago, Wal-Mart is now undergoing an aggressive campaign to expand its pharmacy operations. It has introduced $4 generic drugs, it has been slashing prices on other drugs, and it is now experimenting with low-cost in-store clinics. This makes sense because Wal-Mart's customers are seeking that "one-stop shop" to avoid running all over town getting everything they need. Most of Wal-Mart's customers come from the low-income bracket, and low drug prices will be very attractive to them (but who enjoys paying a fortune for drugs?). The number of retired baby boomers are growing every day, and they definitely need a place to buy drugs cheaply with their fixed income. This is certainly a good move on Wal-Mart's part; I could see it being a pharmacy powerhouse in the near future. This could be good for consumers considering that its extreme efficiency and very low prices might force drug makers and other pharmacies to follow suit. Read more about Wal-Mart's pharmacy plans in this Business Week article.

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Here Comes the Big Dog

Once we thought the battle between Microsoft and Yahoo was over, here comes financier Carl Icahn ready to start a proxy battle to force Yahoo to renegotiate with Microsoft. As you may know, Yahoo turned down Microsoft's bid for the company, which was $33 per share. Microsoft decided to walk away instead of undergoing a nasty hostile takeover. Icahn says that Yahoo's investors lost out when some Yahoo directors "got in the way" of the deal (I think that sentence is funny). This could turn ugly quickly considering that Icahn is determined to make this deal happen, and he is known for getting what he wants. Microsoft, of course, would love to see this deal fall through. Their internet presence has been burdened by the domination of Google; such a deal would bring lots of ad revenue and would beef up their internet territory. I assume they walked away from the deal before as to avoid a costly proxy battle that requires millions of dollars and to avoid the negativity involved with such an undertaking. A combined Yahoo-Microsoft might be good for internet users. Google has had free range for years with little to no competition. A Yahoo-Microsoft deal would create an internet powerhouse more apt to compete with Google. A little more competition is usually a good thing for consumers.

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New Eastman Chemical

Good news for Eastman Chemical and my semi-hometown of Kingsport. Business is really lifting off for one of there new chemicals that replaces a potentially toxic chemical that's commonly used in Nalgene products and baby bottles.

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