In the News

Christian Kleinhans

dpa (2 March) carried an interview with Christian Kleinhans (MTE) on the future of electric vehicles from the Geneva International Auto Show 2010. Christian says: "The breakthrough for e-mobility will take a couple years because many battery-electric vehicles remain concepts, which are not yet suitable for the mass market. The hybrid drive has gained in importance and is now coming out of the niche segment. The near future belongs to the plug-in hybrid. This is the bridging technology to make electric driving simultaneously more suitable for everyday use as well as more affordable." Financial Times Deutschland (2 March) quoted Christian: "As a first step, battery-electric vehicles will come into the market only in homeopathic doses. In particular, the readiness of most customers to pay significantly more for an environmentally friendly car is not especially pronounced." Handelsblatt (3 March) quoted Christian: "The battery-electric vehicle is not yet a mass phenomenon. Even in 2020 electro-driven vehicles will only reach a market share in the single-digit range. But in the end, e-mobility will be a decisive factor for the competitiveness of the whole automotive industry."

Peter Ruhwedel

WirtschaftsWoche (1 March) quoted Peter Ruhwedel (MTE) and exclusively featured findings of the Oliver Wyman study "Corporate Organization 2010." The study found that, following a strong increase in organizational complexity and strategic challenges, the decentralization of companies has proved unsuccessful, so now the power returns to headquarters. The article states: "About 70% of top managers classify the previous internationalization and globalization as risky. The question that arises now is: Which tasks must be centralized in the future and which must stay in operational responsibility? Almost three-quarters of the interviewees consider a stronger formalization and standardization of planning and reporting to be necessary because of the complexity of business models. For more than 70%, central risk management and central control structures are indispensable - for example, for preventing corruption."

Carlos Rivero

The March issue of Leadership Excellence ran a revised version of the While the Iron Is Hot white paper, featuring key findings from a 2009 study with CEOs and senior leaders from global companies led by Carlos Rivero, Partner with Oliver Wyman.

Romed Kelp and Tobias Eichner

Euro am Sonntag (27 February) quoted Romed Kelp and Tobias Eichner (MTE) and featured the Oliver Wyman study "Agricultural Equipment: Return to Profitable Growth" in a two-page cover story entitled "Bring in the harvest appropriately." The article, about investing sensibly in the agricultural sector, says that because of the risks connected with investing in soft commodities, investing in agricultural equipment is an option for private investors. The study predicts "a turnaround for the agricultural equipment industry from 2010 onwards with 4.5 percent annual growth. Agricultural equipment manufacturers who want to grow profitably must focus on the correct regions, like China or Latin America."

Gérard Richter

Die Welt (27 February) carried an interview with Gérard Richter (CMT) in its CeBIT special. CeBIT is the world’s largest information technology trade fair and is held annually in Hannover, Germany. The interview focused on the CMT State of the Industry 2010 report. Gérard says: "In the last two years budgets for IT projects have been cut. But IT is still regarded as one of the drivers of efficiency in companies and represents therefore one of the investment priorities. This is demonstrated by a value increase of 127 percent in the IT services sector." Asked to name the future value drivers in the technology sector, Gérard responded: "I am convinced that less complexity combined with more pragmatism will lead to success. Innovation and the capacity to provide integrated solutions will be decisive."

Olivier Fainsilber

L'Express (25 February) quoted Olivier Fainsilber (MTE) in an article about the continuing rise of low-cost carriers. Olivier says: "Industry norms have changed. The emergence of à la carte features (e.g., baggage, priority boarding) is irreversible."

Adrian Slywotzky

The Financial Times (25 February) quoted Adrian Slywotzky and cited The Upside in an article about how companies undertake major decisions. The article notes that Adrian "developed the intriguing and counterintuitive theory that successful companies – far from hurling themselves headlong into high-risk situations – are in fact rather risk averse." Adrian says: "The conventional wisdom is that risk and reward go together – that to get great upside results, you need to accept big downside risks." Arguing that risk and reward are not inextricably linked, Adrian adds: "The leaders of today’s most successful companies aren't risk takers, they're risk shapers."

Vikram Krishnan

Mint (25 February) quoted Vikram Krishnan (MTE) in an article about Kingfisher Airway's growth and alliance strategy. Commenting on alliance membership, he notes: "The costs of integration from a process and systems perspective run into several millions of dollars."

laurent Richaud and Laurent Monéger

Les Echos (23 February) quoted Laurent Richaud (CMT) and Laurent Monéger (CMT) in an article discussing whether the growth of mobile Internet threatens the economic model of telecommunications operators. Richaud says that "the problem is purely economic – operators know how to increase the speed of the networks, but the question is how to invest profitably." Commenting on the prospect that consumers who do not subscribe to premium data offers may be suddenly deprived of the Internet beyond a certain volume of data, Monéger says that, implicitly, these consumers are ceding priority to those who pay more: "The operator is kind of 'overbooking' its network; and those who have paid the least for their tickets are likely to remain at the airport."

Bob Fox

Investor's Business Daily (23 February) carried an in-depth interview with Bob Fox (CMT) on the topic of wireless trends in emerging markets. Bob says: "There are some countries that still have significant room for growth. China still has 200 or 300 million potential new customers left. There's India, Brazil, Indonesia, Mexico, and then you drop down to Iran, Egypt, and Ethiopia. Companies need to be clever in developing low-cost models or in finding niches, like mobile banking. But it's not like sticking a dart on the map and saying that in this country, there's still a big opportunity for a second or third market entrant. Those days may be over."

Christian Heiss

Assembly Magazine (22 February) extensively quoted Christian Heiss (MTE) in an article about product teardown. Christian says that, initially product teardown "was done just to solve a functional or technical problem in products. But in the last 10 years, a strong focus on assembly processes has been added because of their high cost factor." He describes product teardown as "the 'CSI' of competitive product benchmarking." Christian explains that Oliver Wyman helps clients get the most from product teardowns by doing a "teardown and reassembly in parallel" with both their own and competitors' products. "You create a flow chart of the assembly steps and then mark in red all those steps that are not value-adding. For high-volume products, this is a very powerful tool because it finds areas where seconds are wasted. Better technical solutions can be learned, and better engineering for manufacturability or assembly processes can be found." He concludes: "Teardown is an expensive and time-consuming process. When done wrong, it's just a waste of time. But when done right, it's a very, very powerful tool to learn about your own and competitive products."

Jacques-Olivier Bruzeau

Le Figaro (22 February) quoted Jacques-Olivier Bruzeau (C&IVT) in an article about the possible economic effects of public smoking restrictions. Jacques-Olivier says that cafés must create events to encourage people to meet: "The café has a chance to reinvent itself by becoming a viable outlet for multiple local services. In the rural world, why not purchase your mobile phone in a bar-tabac? Cafés can be points of contact for multiple types of services."

Alan Feibelman

SNL (17 February) quoted Alan Feibelman (MTE) and summarized an Energy/Utilities practice perspective entitled "Catching a Second Wave: Capturing Unrealized Value from Past M&A." The perspective argues that power and natural gas utilities have the opportunity to achieve a second wave of unrealized value from past M&A deals. Alan says: "External and internal resistance and constraints (e.g., cultural, political, and regulatory) often make it difficult to fully integrate and capture synergy savings when the deal is new. After some time has passed and initial integration efforts, oversight, and scrutiny have subsided, management often can more effectively address these barriers, more fully integrate the companies, and capture more synergy savings."

Rémi Cornubert

Le Monde (17 February) quoted Rémi Cornubert (MTE) in an article arguing that government programs and auto manufacturer incentives are artificially inflating consumer demand for cars, a situation that will be hard for manufacturers to manage an end to. Rémi says: "Once consumers are used to being on a drip of promotions, it's hard to go back. And the attempts to generate sales at any price may in the long run have serious repercussions - it may harm a brand."

Craven Crowell

Reuters (16 February) quoted Craven Crowell (MTE) in a story about government loan guarantees for the US nuclear industry. Craven says: "Before the loan was issued, there was a general feeling that Obama was ambivalent or even against nuclear."

Olivier Fainsilber

Challenges (11 February) quoted Olivier Fainsilber (MTE) in an article about Emirates. Commenting on unique nature of Emirates' local market, Olivier says: "80% of the population is there to run the economy at all levels - laborers on construction sites, hotel employees, company managers, and leaders. When these people travel home they need to fly."

Rémi Cornubert

L'Usine Nouvelle (11 February) quoted Rémi Cornubert (MTE) in an article about Toyota's quality crisis. Rémi says: "This doesn't call Toyota's business model into question. On the other hand, they will be more draconian in their procedures and more demanding than ever in the choice of their suppliers."

Rémi Cornubert

Challenges (11 February) extensively quoted Rémi Cornubert (MTE) in an article about Toyota's quality crisis. Remi says: "Because their image had been so perfect, this affair will obviously tarnish it. Their competitors have already taken advantage of the situation by making promotional offers for people to trade in their Toyotas. This crisis is interesting because consumers used to believe that these things happened only to American or European carmakers…. The Toyota business model tries to extend Japanese culture and Japanese thinking to every country where it makes cars, but this incident has proven that it's both their strength and their weakness – the race to global leadership has exposed some of the Toyota model's limits. Still, Toyota knows how to learn lessons from its mistakes."

Jim Bacos

MDR Television (9 February) carried an interview with Jim Bacos (C&IVT) in a feature about the pricing of German supermarkets and discounters. Jim says: "There is no price collusion in this market, even though the prices of most if not all entry level products are the same across grocers. In this market, Aldi is the price 'yardstick.' The other players have simply accepted the fact that Aldi sets the price and made a strategic decision to match that price, even if they cannot make any money at that level."  

Bob Hazel, Aaron Taylor, and Andrew Watterson

The Wall Street Journal's Middle Seat blog (9 February) carries the findings of an Oliver Wyman study which analyzed what it costs each U.S. airline to fly a similar-sized plane the same distance. Bob Hazel, Aaron Taylor and Andrew Watterson (MTE) note that overall, the cost gap between "value" airlines and "network" carriers has shrunk to its lowest level in the past six years, but the value carriers still have a significant advantage over their bigger rivals. The study also found that in 2009 network airlines spent an average 12.0 cents per available seat mile, but generated only 11.1 cents on those seat miles. Value airlines were marginally profitable, spending 10.1 cents but collecting 10.4 cents per seat mile.