Monthly Archives: May 2013

Apple’s Double Irish Scheme for Tax Avoidance

Apple's Double Irish Scheme for Tax Avoidance

Turns out that Apple might be paying about 10% of its pre-tax income in taxes as compared to a 35 percent federal corporate tax rate. However, details of Apple’s tax practices indicate that there Apple engages in merely tax avoidance. Tax avoidance is not quite unlawful. There seems to be no evidence that Apple engaged in tax evasion, which is indeed unlawful.

Apple uses a tax avoidance scheme known as The Double Irish, which came under scrutiny during the Senate testimony. Using the Double Irish scheme, Apple instituted a shell subsidiary in Ireland, an offshore tax haven, and assigned the majority its intellectual property rights to this shell subsidiary. In turn, the subsidiary charges fees and royalties and receives billions of dollars in revenue. On these receipts, Apple pays about 2% in corporate taxes in Ireland instead of the high tax rates it would pay for the same receipts in the United States.

It can be argued that the Apple’s management is indeed doing what is best for Apple’s shareholders. Apple’s senior management and the board have a fiduciary responsibility to do anything in the best interest of its shareholders, as long as such actions are lawful. Had Apple ignored this prospect of reducing its corporate tax bill by using the Double Irish scheme, the senior management and Board may possibly be accused of being negligent in their responsibilities towards shareholders.

The actual problem might just be that the Congress hasn’t taken any wide-ranging measures to make all tax avoidance schemes illegal and ensure that companies pay their fair share in taxes.

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Posted in Business and Strategy

ExifTool: Command Line & GUI to Remove EXIF Image Metadata in Photos

ExifTool: Command Line & GUI to Remove EXIF Image Metadata

Nearly all cell phones, digital cameras, and scanners insert metadata in the digital photos they capture. This is done using the Exchangeable image file format (Exif) data structure or standard.

Some devices just embed the make and model of the camera. Other devices insert more extensive data such as camera settings, GPS location data, and other information that might be specific to that camera or cell phone. Many owners of digital cameras and cell phones are oblivious that their photos are tagged with sensitive information.

Since the Exif data contain information about the photo, the Exif data pose privacy and security concerns. When pictures from these devices are posted online, the Exif metadata can be used to sense the time the photo was taken and the location where it was taken, if the camera or cell phone has the GPS location data feature. The distinctive ID number of the camera device can be used to identify the owner of the camera. It is therefore best to remove Exif data before publishing or posting pictures online and avoid privacy and security concerns.

My favorite software to remove Exif data is ExifTool by Phil Harvey. Exiftool is a cross-platform tool that can remove, modify, and add Exif and other metadata in various file formats. The software is intuitive and easy to use. I use the command line to manipulate whole directories of files using a combination of command options and wildcards.

exiftool.exe -all= -overwrite_original *.jpg
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Posted in Software and Programming

Timeline of the Airbus A350 XWB (Xtra Wide Body) Program including Orders-History

first A350-900 XWB (MSN001, tail number F-WXWB) emerged from Airbus's paint shop on 13-May-2013.

  • On 16-Sep-2004, Airbus top executive Noel Forgeard confirmed that Airbus had proposed a new twin-aisle mid-size aircraft to customers. This adaptation of the A350 resembled the A330 in fuselage cross-section and assembly, but with new engines, new wings, new horizontal stabilizer, and additional composite materials. For years, Airbus had publicly cast off the threat of the Boeing 787 Dreamliner to the Airbus A330.
  • On 10-Dec-2004, the boards of EADS and BAE Systems, who then owned 80% and 20% of Airbus respectively, approved the “authorization to offer (ATO)” for the now- called A350.
  • On 13-Jun-2005, at the 2005 Paris Air Show at the Le Bourget Airport north of Paris, Qatar Airways announced an order for 60 A350s.
  • On 06-Oct-2005, Airbus announced the full industrial launch of the A350. The aircraft was to be first available in two versions: the A350-800 (8,800 nmi, 253 passengers in a three-class configuration) and the A350-900 (7,500 nmi, 300 passengers in a three-class configuration.)
  • On 28-Mar-2006, the President of aircraft lessor Infrastructure Leasing and Finance (ILFC) Steven F. Udvar-Hazy publicly derided the Airbus’ strategy as a poor reaction to the Boeing 787 Dreamliner.
  • On 30-Mar-2006, Finland’s Finnair became the first airline to place a firm order for the A350. It ordered 11 A350-900s with an option for four more A350 XWBs.
  • On 22-Jun-2006, Singapore’s Singapore Airlines ordered 20 A350-900s.

A350 XWB wider fuselage to accommodate 10-abreast seating in high-density configuration

  • On 14-Jul-2006, at the Farnborough Airshow in Farnborough Airport in Hampshire, England, Airbus presented a redesigned aircraft now called the A350 XWB (Xtra-Wide-Body.) The A350 XWB included a wider fuselage cross-section that could accommodate 10-abreast seating in high-density configuration. All twin-aisle Airbus aircrafts (A300, A310, A330, and the A340) had a common cross-section that could accommodate eight-abreast seating in standard configurations.
  • On 01-Dec-2006, the board of directors of Airbus approved the industrial launch of the A350 XWB. The aircraft was available in two variants: the A350-800 (8,480 nmi, 270 passengers in a three-class configuration) and the A350-900 (8,100 nmi — 10,300 nmi, 314 passengers in a three-class configuration.)
  • On 04-Jan-2007, Aircraft lessor Pegasus Aviation ordered two A350-800s.
  • On 18-Jun-2007, during the 2007 Paris Airshow at the Le Bourget Airport north of Paris, Aircraft lessor Aviation Lease and Finance Company ordered 12 A350-900s with an option for six more A350 XWBs.
  • On 18-Jun-2007, Qatar’s Qatar Airways ordered 80 A350 XWBs: 20 A350-800s, 40 A350-900s, and 20 A350-1000s at Paris Airshow.
  • On 20-Jun-2007, Aeroflot Russian Airlines from Russia ordered 18 A350-800s, and 4 A350-900s.
  • On 20-Jun-2007, Libya’s Afriqiyah Airways ordered six A350-800s.
  • On 20-Jun-2007, Aircraft lessor CIT Group ordered five A350-900s.
  • On 20-Jun-2007, Kingfisher Airlines from India ordered five A350-800s.
  • On 05-Oct-2007, America’s US Airways ordered 18 A350-800s, and 4 A350-900s.
  • On 26-Oct-2007, Aircraft lessor ILFC ordered 6 A350-800s, and 14 A350-900s.
  • On 11-Nov-2007, Dubai’s Emirates ordered 120 A350 XWBs: 50 A350-900s and 20 A350-1000s with an option for 50 more A350 XWBs.
  • On 13-Nov-2007, Yemen’s Yemenia ordered 10 A350-800s.
  • On 14-Nov-2007, a VIP customer ordered one A350-900.
  • On 26-Nov-2007, Portugal’s TAP Portugal ordered 12 A350-900s with an option for three more A350 XWBs.
  • On 28-Nov-2007, America’s Hawaiian Airlines ordered six A350-800s, with an option for six more A350 XWBs.

first A350-900 XWB (MSN001, tail number F-WXWB) emerged from Airbus's paint shop on 13-May-2013.

  • On 10-Dec-2007, Libya’s Libyan Airlines ordered four A350-800s.
  • On 21-Dec-2007, Vietnam Airlines from Vietnam ordered 10 A350-900s with an option for two more A350 XWBs.
  • On 21-Jan-2008, Avianca from Columbia ordered 10 A350-900s with an option for 10 more A350 XWBs.
  • On 22-Jan-2008, Taiwan’s China Airlines ordered 14 A350-900s with an option for six more A350 XWBs.
  • On 13-Feb-2008, TAM Airlines from Brazil ordered 27 A350-900s with an option for 10 more A350 XWBs.
  • On 11-Apr-2008, Ireland’s Aer Lingus ordered nine A350-900s with an option for six more A350 XWBs.
  • On 04-Jun-2008, Italy’s Alitalia ordered 12 A350-800s with an option for 12 more A350 XWBs.
  • On 09-Jul-2008, Airbus began wind tunnel testing for the A350.
  • On 14-Jul-2008, Abu Dhabi’s Etihad Airways ordered 12 A350-1000s with an option for 10 more A350 XWBs.
  • On 15-Jul-2008, Tunisair from Tunisia ordered three A350-800s.
  • On 16-Jul-2008, Korea’s Asiana Airlines ordered 30 aircrafts: 8 A350-800s, 12 A350-900s, and 10 A350-1000s with an option for 10 more A350 XWBs.
  • On 17-Jul-2008, a VIP customer ordered one A350-900.
  • On 13-Jan-2009, Airbus began construction on the Final Assembly Line (FAL) for the Airbus A350 XWB model. Once the plant hits full production, the FAL is expected to employ some 1,500 people, build ten aircraft a month beginning 2018, and have an area of 74,000 square meters.
  • On 16-Jun-2009, AirAsia from Malaysia ordered 10 A350-900s with an option for five more A350 XWBs.
  • On 29-Sep-2009, Airbus successfully tested the wing tester (“demo box 2″) on an installation of the wings of the A350 XWB.
  • On 15-Nov-2009, Ethiopia’s Ethiopian Airlines ordered 12 A350-900s.
  • On 10-Mar-2010, America’s United Airlines ordered 25 A350-900s with an option for 50 more A350 XWBs.
  • On 13-May-2010, Airbus launched three-dimensional validation of the A350 XWB electrical harness installation. It was problems with installation of the electrical harnesses that delayed the delivery of A380 to customers.

Rolls-Royce Trent XWB test engine on an A380 'flying-testbed'

  • On 04-Aug-2010, Hong Kong’s Cathay Pacific ordered 36 A350-900s.
  • On 13-Oct-2010, a second Hong Kong-based airline, Hong Kong Airlines, ordered 15 A350-900s.
  • On 04-Nov-2010, China’s Air China ordered 10 A350-900s.
  • On 12-Nov-2010, Airbus announced that the first delivery date of the A350-900, the first model to be developed, had slipped from mid-2013 to the second half of 2013 due to the “transition phase from design to manufacturing is a bit longer.”
  • On 18-Jun-2011, Airbus and Rolls-Royce declared the development of the A350-1000 XWB model (8,420 nmi, 350 passengers in a three-class configuration) with powerful Trent XWB engines capable of delivering 97,000 pounds of thrust.
  • On 11-Aug-2011, Thai Airways from Thailand ordered four A350-900s.
  • On 23-Dec-2011, Airbus began assembly of the fuselage the first A350-900 XWB (MSN1) in Toulouse, France.
  • On 18-Feb-2012, Airbus and Rolls-Royce successfully tested the Rolls-Royce Trent XWB test engine on an A380 “flying-testbed.” The test aircraft conducted tests at different altitudes and speeds. The A380 reached a maximum altitude of 43,000 feet and maximum speed of Mach .9 (1102 kph).
  • On 05-Apr-2012, Airbus began final assembly of the first A350-900 XWB (MSN1) in Toulouse, France.
  • On 08-Aug-2012, Hong Kong’s Cathay Pacific converted 16 A350-900s from an earlier order to the -1000 model, and ordered 10 more A350-1000s.
  • On 01-Oct-2012, Libya’s Afriqiyah Airways cancelled six A350-800s and ordered 10 A350-900s.

Airbus transferred the A350 XWB static test airframe to a test facility for validation of the A350 airframe.

  • On 23-Nov-2012, Airbus transferred the A350 XWB static test airframe to a test facility for validation of the A350 airframe.
  • On 03-Dec-2012, Qatar Airways converted their original order of 20 A350-800s, 40 A350-900s, and 20 A350-1000s to 43 A350-900s and 37 A350-1000s. For several years, Boeing’s marketing campaign has tried to cast doubt on the viability of the A350-800 model. Airbus has tried to switch customers to the -900 model casting doubt about the future of the -800 model.
  • On 13-Dec-2012, Singapore’s Singapore Airlines ordered 20 A350-900s. This was a repeat order from the world’s premier airline.
  • On 03-Jan-2013, Aircraft lessor CIT Group ordered 10 A350-900s.
  • On 04-Feb-2013, Aircraft lessor Air Lease ordered 20 A350-900s and 5 A350-1000s with an option for five more A350 XWBs.
  • On 07-Feb-2013, the European Aviation Safety Agency certified the Rolls-Royce Trent XWB Turbofans.
  • On 15-Feb-2013, Airbus reverted to proven nickel cadmium main batteries to avoid unnecessary delays to the A350 program’s timeline.

Final Assembly and Preparations for First Flight

  • A350 XWB final assembly facility groundbreaking ceremony, 14-Jan-2009 On 14-Jan-2009, Airbus held a groundbreaking ceremony for the A350 XWB final assembly facility in Toulouse, France. This assembly line (FAL,) built close to the existing A330-A340 production line, was scheduled to be completed during the third quarter of 2010. Once the plant would hit full production, the FAL is expected to employ some 1,500 people, build ten aircraft a month beginning 2018, and have an area of 74,000 square meters.
  • On 19-Feb-2013, Airbus began final assembly of the third A350 XWB (MSN3.)
  • On 26-Mar-2013, Airbus completed installation of the flight-ready Rolls-Royce Trent XWB engines and the Honeywell GHT1700 APU on the first flight-test A350-900 XWB. The A350-900 aircraft MSN1 became a finished aircraft to be handed to the Flight Test Team after additional testing and painting.
  • On 22-Apr-2013, Aircraft lessor International Airlines Group ordered 18 A350-1000s with an option for 18 more A350 XWBs.
  • On 30-Apr-2013, Airbus’s tabulation of orders and deliveries showed that a VIP customer had cancelled orders for one A350-900.
  • On 13-May-2013, the first A350-900 XWB (MSN001, tail number F-WXWB) emerged from Airbus’s paint shop. Speculation intensified that Airbus might attempt first flight by the middle of June and debut its aircraft at the 2013 Paris Airshow at the Le Bourget Airport north of Paris.
  • On 30-May-2013, Singapore Airlines announced a firm order for 30 more A350-900s and options for 20 more A350 XWB aircraft. According to the terms of the deal, Singapore Airlines could choose either the A350-900 or the A350-1000 model when exercising the 20 options. This third order from Singapore Airlines for the Airbus A350 XWB (Xtra Wide Body) brought the total A350 XWBs ordered by Singapore Airlines to 70 firm orders and 20 options for the A350-900.
  • On 2-Jun-2013, Airbus fired up the Rolls-Royce Trent XWB engines and the Honeywell Auxiliary Power Unit (APU) on the first A350-900 XWB aircraft (MSN001 / F-WXWB) in preparation for the aircraft’s debut flight. Airbus also released the A350 XWB Magazine App for iPads and Androids in preparation to use social media for publicity for the A350’s first flight.
  • On 07-Jun-2013, in a video posted by Rupa Haria of Aviation Week magazine, Airbus’s A350XWB project test pilot Frank Chapman confirmed that MSN001 / F-WXWB had completed taxi tests on 05-Jun-2013. Having completed the high-power runs of the Rolls-Royce Trent XWB engines previously, the test flight department planned to perform high-speed taxi speeds in preparation for first flight. Aircraft prototypes typically undergo a two day-long full engineering check after high-speed taxi tests before first flight.
  • Airbus A350-900 XWB First Flight ((MSN001, F-WXWB)) on 14-Jun-2013On 12-Jun-2013, Airbus confirmed that the first flight of the A350-900 XWB was planned for 14-Jun-2013 (Friday) pending final pre-first flight tests and inspections. Subject to favorable weather conditions, MSN001 / F-WXWB was planned to take off from the Toulouse-Blagnac Airport in Southern France at 10:00 AM. Airbus had scheduled the A350’s first flight three days before the opening of the 2013 edition of the Paris Air Show (Salon international de l’aeronautique et de l’espace, Paris-Le Bourget) where the A350 XWB was expected to perform a simple fly-past.

Airbus A350 XWB First Flight (14-Jun-2013)

A350 XWB Pre-flight First Flight

Airbus A350 First Flight Crew Boarding MSN001 on 14-Jun-2013

Airbus A350 First Flight Telemetry

Airbus's first A350-900 XWB (MSN001, F-WXWB) liftoff on 14-Jun-2013

Airbus's first A350-900 XWB (MSN001, F-WXWB) first flight on 14-Jun-2013

Initial flight tracking for first flight of A350-900 XWB

A350 XWB First Flight Fly-by

A350 XWB First Flight over Tolouse City

A350 XWB First Flight Landing

A350 XWB First Flight Landing Taxiing

A350 XWB First Flight Reception

During and at the Paris Air Show 2013

A350 XWB at the Paris Air Show 2013

The 50th edition of the Paris Air Show was held from 10-Jun-2013 through 14-Jun-2013 at the Le Bourget airport outside of Paris, France. Airbus won US$68.7 billion-worth of aircraft orders during the airshow.

  • On 19-Jun-2013, Air France-KLM, the Paris-based French-Dutch airline holding company and parent of both Air France and KLM ordered 25 A350-900 aircraft with options for 25 more A350-900 aircraft.
  • On 19-Jun-2013, Sri Lanka’s state-owned Sri Lankan Airlines ordered four A350-900 aircraft.
  • On 19-Jun-2013, Airbus flew the A350-900 XWB prototype (MSN001, F-WXWB) on its second test flight at the Toulouse-Blagnac airport. The second flight lasted for over five hours where the aircraft flew at its design maximum speed of 0.89 Mach (676 mph) and reached an altitude of 42,000 ft.
  • On 20-Jun-2013, America’s United Airlines converted all the 25 A350-900 airplanes it had previously ordered to the larger -1000 model and ordered an additional 10 A350-1000s. With this incremental order, United Airlines had a total of A350 aircraft ordered from Airbus to replace the Boeing 777s in United’s fleet.
  • On 21-Jun-2013, the last day of the Paris Air Show 2013, the first A350-900 XWB (MSN001, F-WXWB) made a flyby at the Paris Air Show 2013. MSN001 made a conservative sweeping low-fly pass at 600 feet above runway 21 at the Le Bourget Airport, without the steep ascents and sharply banked turns common in flight demonstrations at airshows. This was the A350’s third flight and the aircraft had taken off from Toulouse two hours earlier.
  • On 25-Jun-2013, Scandinavian Airlines, the flag carrier of Denmark, Norway, and Sweden, signed a memorandum of understanding (MoU) for eight A350-900 aircrafts.
  • By 15-Jul-2013, the first A350-900 XWB, MSN1 / F-WXWB, had completed 92 flight test hours of testing. According to a press release from Airbus, this first phase of flight tests had involved tests of the engines, electrical systems, the ram air turbine (RAT), landing-gear, brakes, fuel systems, cabin pressure, autopilot and autoland systems. The aircraft was to go through a scheduled maintenance and upgrades to the flight test installation in preparation for the second phase of the flight test campaign. MSN1 was to be joined by a fleet of four more A350 XWB aircrafts during the 2,500 hour-long testing and certification campaign for the A350 XWB aircraft.
  • On 19-Sep-2013, Germany’s Lufthansa (Airbus’s biggest airline customer and operator) committed to buying up to 55 A350-900 aircraft (25 firm and 30 options). The commitment also gave Lufthansa the flexibility to convert some of the order to the larger A350-1000 aircraft.
  • On 25-Sep-2013, the International Airline Group (IAG) signed a memorandum of understanding with Airbus to buy 18 Airbus A350-1000 aircraft plus 18 options. The International Airline Group (IAG) is the parent company of British Airways and Spain’s Iberia. The 36 A350-1000 aircraft were designated for British Airways.
  • On 03-Oct-2013, Scandinavian Airlines (SAS) signed a memorandum of understanding with Airbus for the order of eight A350-900 plus eight options for A350-900, in addition to four A330-300 Enhanced aircraft. SAS’s Airbus A350 were to be delivered from the year 2018.
  • On 07-Oct-2013, Airbus received a landmark order from Japan Airlines (JAL) 18 A350-900s, 13 A350-1000s, plus options for a further 25 A350-XWB aircraft. After decades of near-dominance by Boeing of the aircraft market in Japan, this was the first order Airbus ever received from Japan Airlines.

First Flight of the second A350 XWB flight test aircraft MSN3 on 14-Oct-2013

  • On 14-Oct-2013, the second A350 XWB test aircraft successfully completed its first flight. MSN3’s first flight lasted approximately five hours. MSN1 and MSN3 were to be joined by three more A350 XWB test aircraft and complete 2,500 hours leading to type certification.
  • On 17-Nov-2013, at the 2013 Dubai Airshow, Abu Dhabi’s Etihad Airways announced a firm order for 50 A350 XWBs, which comprised of 40 A350-900s and 10 A350-1000s.
  • On 17-Nov-2013, at the 2013 Dubai Airshow, Boeing launched the response to the threat that the A350 posed to its 777 and 787 aircrafts by launching the 777X with record-breaking orders. Boeing claimed that the 777X would feature technology introduced on the 787 Dreamliner and evolving newer technologies such as an all-new composite wing and many aerodynamic advances. The 777X would feature the all-new GE9X engines developed by General Electric. Boeing claimed that the 777X would be 12 percent more fuel efficient than the A350. With 259 orders and commitments, the launch of the 777X represents the most successful launch of any airline program thus far. Emirates ordered 150, Qatar Airways 50, and Etihad Airways 25 new 777X aircrafts to add to a previously-announced launch order for 34 777X from Germany’s Lufthansa (34).
  • On 18-Nov-2013, also at the 2013 Dubai Airshow, the Tripoli-based startup airline Libyan Wings ordered three A350-900 jets to build a wider network after commencing short-haul services in 2014.
  • On 20-Dec-2013, Air Caraibes, the regional airline of the French Caribbean signed a firm contract with Airbus for three A350-1000s. Concurrently, Air Caraibes announced that it would lease three new A350-900s from ILFC.
  • On 20-Feb-2014, Kuwait Airways ordered ten A350-900 aircraft as part of its fleet renewal strategy. On 09-Dec-2013, Kuwait Airways and Airbus had signed a Memorandum of Understanding (MoU) in this regard.
  • A350 XWB MSN2 and MSN4 took to the skies for their first flights on 26-Feb-2014

    Executing a Successful A350-XWB Flight Test Program

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Posted in Airlines and Airliners

Cat Delights in Hanami (Flower Viewing) of Sakura (Cherry Blossom)

‘Tis the season for ornamental cherry blossom trees and their Sakura blossoms. The Japanese tradition of Hanami (“flower viewing”) involves enjoying the beauty of Sakura cherry blossoms. In contemporary Japan, people gather in great numbers around blossoming flower trees and revel in the outdoor parties beneath the Sakura during daytime, evening, or at night.

Cat Delights in Hanami (Flower Viewing) of Sakura (Cherry Blossom)

Cat Delights in Hanami (Flower Viewing) of Sakura (Cherry Blossom)

Cat Delights in Hanami (Flower Viewing) of Sakura (Cherry Blossom)

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Posted in Music, Arts, and Culture

The 14th Dalai Lama’s Favorite Buddhist Prayer

Dalai Lama

Here’s the Dalai Lama’s Favorite Prayer. It is a passage from Shantideva’s Bodhisattvacaryavatara.

As long as space endures
As long as sentient beings remain
May I, too, prevail
To dispel the misery of the world

And, in his acceptance speech at The Nobel Peace Prize ceremony in 1989, the Dalai Lama asserted,

I pray for all of us, oppressor and friend, that together we succeed in building a better world through human understanding and love, and that in doing so we may reduce the pain and suffering of all sentient beings.

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Posted in Faith and Religion

The March of the Chinese Multinational Brands

China Flag The trend to outsource manufacturing to lower-cost countries made China a dominant industrial base. Many domestic and international businesses setup factories to produce, export, and sell goods to consumers around the world.

For decades, Chinese companies struggled to establish their brands and sales channels in the United States, Europe and other industrialized countries. Hence, they choose to rely solely on producing goods for global brands rather than sell under their own names. Exporting products and earning foreign currency became their focus.

Seeing this strategic advantage, global companies leveraged their strong brand names to tap into to one of the biggest consumer markets in the world by producing and selling products in China.

Surprisingly enough, notwithstanding strong competition, the homegrown Chinese giants dominated the Chinese domestic market for consumer electronics and domestic appliances. With strong encouragement by the Chinese government, these companies have carefully developed a strong brand presence in their own home country.

Haier Group

Foremost of these homegrown giants is the Haier Group, now the world’s fifth-largest maker of white goods. As Chinese consumerism has grown, Haier has prudently built a strong reputation for product innovation, value for money, manufacturing excellence, quality, and customer service.

Not satisfied with succeeding in the Chinese markets, the Haier Group and other homegrown Chinese giants made significant inroads into consumer markets in many developing countries in South-east Asia and the Far East.

After establishing their brands internationally, Haier and other Chinese giants have successfully extended their strong domestic brands in the home markets of their biggest global competitors, and very commonly, their OEM-customers. They are thus able to benefit immensely from the higher margins offered in western markets and not just be content with the lower margins that ensue from being just a low-cost offshore supplier.

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Posted in Global Business

Bladder Theory of Corporate Finance

Corporate Finance

Apple has $137 billion of cash on its balance sheet (as of 12-Feb-2013.) Microsoft has $68 billion, Google $48 billion, Cisco $45 billion, and Oracle has $34 billion.

Too much cash on a company’s balance sheet is not necessarily a good thing. Large cash balances reduce shareholder value because they produce lower returns on invested capital. Further, excess cash puts pressure on corporate management to put the cash to work. Often, management chases wrongheaded acquisition strategies or make poor capital allocation decisions.

Peter Lynch alluded to a bladder theory of corporate finance in his classic, “One Up On Wall Street: How To Use What You Already Know To Make Money In The Market.”

… as propounded by Hugh Liedtke of Pennzoil: the more cash that builds up in the treasury, the greater the pressure to piss it away.

Bladder theory of corporate finance states that the more cash that builds up in the treasury of an organization, the greater the pressure to piss it away. Stock repurchases, dividend increases, and special dividends are effective uses of excessive cash on balance sheets. J Hugh Liedtke, former CEO of Pennzoil, believed that “companies should pay out cash so the managers wouldn’t drain all the money away.”

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Posted in Investing and Finance

Raga Brindabani Sarang (Kafi Thaat)

Raga Brindabani Sarang 'Tum Rab Tum Sahib' from the Kafi Thaat

The raga Brindabani Sarang is a Hindustani North Indian classical melodic form from the Kafi thaat. The notes Ga and dha are not used in this raga.

Brindabani Sarang is generally played in the Madhyanah (around noon) and is believed to evoke the Shringara rasa, or an ambiance of romance and mysticism.

The Arohana is ni (mandra saptak) sa re ma pa ni sa and the Avarohana is sa ni(komal) pa ma re sa. The ni swara is shuddha in the arohana and komal in the avarohana. The vadi and the samavadi are re and pa respectively. The pakad or chalan of this raga is ni sa re ma re pa ma re ni sa.

Brindabani Sarang Composition / Lyric

Perhaps the most famous composition in Brindabani Sarang is by Tansen, the most prominent of Hindustani classical music composers and a musician from the court of Mughal emperor Akbar.

Tum rab tum saheb
Tum hi kartaar
Ghata-ghata pooran
Jal-thal bhar bhaar

Tum hi rahim
Tum hi karim
Gaavat guni-gandharva
Sur-nar sur-naar

Tum hi pooran brahma
Tum hi achala
Tum hi jagat guru
Tum hi sarkaar

Kahe miya tansen
Tum hi aap
Tum hi karat sakal
Jag ko bhav paar

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Posted in Music, Arts, and Culture

FedEx Understands Branding

As the cliche goes, you never get a second chance to make a first impression. Of the many companies that take this branding mantra to the extreme are FedEx.

FedEx Understands Branding

Ten years ago, FedEx recognized that that with every package it delivers, every truck it drives, every plane it flies, every document it handles, every person that delivers packages and services, represents a point of interaction with a customer. Every point of interaction is an opportunity to make a brand impression.

Brand equity is about trust, reliability, ingenuity, quality, and the “right image.” In the early 2000s, FedEx undertook a major branding makeover initiative. It changed the company’s name from FDX Corp to FedEx. Its original name, Federal Express, was too long. FedEx realized that this long name does not convey the speed and efficiency of FedEx. After all, they reasoned, people are too busy to say Federal Express. And, with this FedEx become a noun, as in, “Just FedEx it.” FedEx earned a place in everyday language.

FedEx branding makeover initiative

Never before had FedEx taken such a systematic approach to its equipment and operations. FedEx was not looking for a merely cosmetic makeover. It started a wide-ranging overhaul of its brand image by restructuring, rethinking, and redesigning everything that interacts with its customers — from its customer centers to its drop boxes to the bags carried by its couriers to the trucks that carried its parcels, and to the planes that flew its packages. Ground shipping became “FedEx Home Delivery,” the global logistics division “FedEx Global Logistics,” and its division for time-critical shipments became “FedEx Custom Critical.”

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Posted in Business and Strategy

America is Fascinated by Warren Buffett

Warren Buffett Great wealth and entrepreneurial success have always fascinated Americans. The amount of wealth that Warren Buffett has accumulated through astute investing and discipline is awe-inspiring.

Countless portfolio managers, hedge fund managers, investment analysts, mutual funds, institutional pools of capital and individual investors have grown up devouring everything that’s been said or written by or about Warren Buffett and Charlie Munger over the years.

Warren Buffett’s unpretentious life-style draws Americans. His modest, folksy personality is an obvious contradiction to the common American impression of the lifestyles of the rich and wealthy. Warren Buffett does not enjoy the trappings of wealth. He carries a cell phone that usually switched off, does not have a computer at his desk, and drives his own automobile Cadillac DTS. He has lived in the same home he purchased for $31,500 in Omaha, Nebraska since 1958.

For years, Warren Buffett has drawn a moderate base salary of just $100,000 and has denounced excessive executive pay and extravagant purchases by other corporate CEOs.

Warren Buffett’s Legacy

In 2006, Warren Buffett, the world’s third richest man, stunned the world by bequeathing more than 85% of the $44 billion in his Berkshire Hathaway fortune to charity. That is the largest philanthropic gift in history. Five-sixths of his shares in Berkshire Hathaway would go to the Bill & Melinda Gates Foundation. Buffett has said that he was inspired by the philosophy of Andrew Carnegie, who had believed that huge fortunes that flow in large part from society should in large part be returned to society.

Warren Buffett has three children: Susie Buffett is the owner of a knitting-shop Omaha, Howie Buffett is a farmer in Illinois, and Peter Buffett is a new-age musician based in New York. Buffet’s three children received a modest inheritance from Buffett. He stated, “They’re comfortable, but they don’t have tons of money. I consider myself lucky to have three children who want to spend much of their time and energy working on projects that will benefit others.”

Millions of Buffett fans all over the world swear by his philosophy of value investing and have profited from the wisdom of the “Oracle of Omaha.” America admires him. In 2010, President Barack Obama awarded him the Presidential Medal of Freedom.

For a peek at the genius of Warren Buffet, see Alice Schroeder’s “The Snowball: Warren Buffett and the Business of Life.” “The Essays of Warren Buffett: Lessons for Corporate America” is a great anthology of Warren Buffet’s writing.

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