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CBU MBA graduate class of 2010. Also known as Erin Wiles.

Kevin – One More Week


200x120Another week and another run after the elusive Athletic Shoe Merchandising Goal.  We’re making headway.  Our team has moved up again this week, but not as much as we had hoped.  Man, the guys in this class are OUTRAGEOUSLY aggressive!  I mean, they are dropping prices, raising advertising, and going crazy – but can their balance sheet keep up?  Who knows?  Maybe they can at least last ’til the end of the competition this week.  We have one more week to try to make the target numbers and keep moving forward.  It is so hard with two world class teams in our group!  Anyone got a little cheese to go with that WHINE?!!

It’s just another week in the life of an MBA student.  Do a little BSG, work the team Final Presentation, go to your regular job, take some time to go hiking with the family, work in the yard, etc.  Yes, you do have time to have a life while in an advanced MBA program if you learn to schedule, prioritize and focus.  (Getting by on 3 hours of sleep each night doesn’t hurt either).  Just kidding, you can get at least 4 hours if you get to sleep quickly.

We are finishing up Strategic Management, we’ll have a week off and then we’ll start our Research Class.  I understand this is primarily an individual effort class as opposed to the team projects we have been working on.  I think I’m going to like the individual class but will certainly miss my teammates.

So, what have I learned this week to make my life more interesting and prepare me to be a better leader?  Where do I start?!  First, let’s start with the effects that mark-to-market accounting has had on the economy.  In most cases, you are going to sit on one side of the accounting fence or the other; either you are historical accounting minded or you are market accounting minded.  Now, there is room for both, but where to draw the line?  Who gets to decide?  Historical based accounting has been the standard but allows for companies to “sit” on a known impaired asset while mark-to-market accounting requires the asset to be valued at its current value.  As we all know, this directly affects the profitability of the company and ultimately the share price.  Remember, Assets (things you own) – Liabilities (things you owe) =  Equity (how much you get to keep).  So, if your asset value goes down, your company value goes down, but nothing actually happened to your asset.  It is still there and in the same condition you left it when it was worth 20-30% more than it is now.

Great – but who gets to decide the new value of your asset?  If you think my 2005 Yukon is worth $10,000.00 and you want to buy it, and I say it is worth $15,000.00 and I want to sell it, then what is the truck worth?  The answer is always, “whatever someone is willing to pay for it” and thus my friend, the nature of the market.  It is an “it depends” market.  It also depends on which side of the negotiation you are on and so goes the controversy over historical verses market accounting.  More questions.  I thought we were here to get answers.  Nope, just new ways to look at the questions…Until next time.

Kevin Fleming
Owner of KTF Consulting
MBA Concentration: Undecided
Graduating: May 2011

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5 Comments on “Kevin – One More Week”

  1. Chris Burcky March 24, 2010 at 12:55 pm #

    Kevin,

    It was a fun competition with a lot of interesting strategy variation at least at the end. I think we (CAMMco) benefited from no one competing in our space (where as 4-5 companies circles were right on top of each other the whole game) regarding model numbers and our capacity investments made our shoes considerably cheaper to MFG. We had a goal of hitting all global 100 in all 4 categories and missed only ROE because of how aggressive the overall group was. The two things we truly learned the importance of were 1) sticking with your strategy & 2) accurately predicting what the rest of the companies were going to do (we did this extremely well which I think contributed as much to our success as our strategy did.)

    Chris

  2. Kevin Fleming March 31, 2010 at 10:37 am #

    Yes, it was a fun competition especially if you were on your side of the SLAUGHTER. To say that you guys accurately predicted what the rest of the companies were going to do is an understatement. At one point, our team felt you guys had an insider working for you. It was a pleasure to swap swords with such a viable and aggressive opponent. Even with the decision to “manipulate” a merger, we were unable to fully capitalize on the benefits from this due to your team’s accurate predictions. Personally, I feel you are being a bit modest when you look at what you guys achieved, it was incredible. Great job!!!

  3. Chris Burcky April 1, 2010 at 10:00 pm #

    Lol, perhaps a bit modest, we did have two highly competitive members of our team (me being one of them.) It probably helps that I have a software design background (albeit 7-8 years ago) and could spot some of the program biases a mile away in the practice rounds. We spent a good 2-3 hours doing what if analysis on other teams. Your team in particular got our attention in round 1 with your private label strategy which cost us about $2.00 a share all over like a .25 difference in our shoe price, we promptly spent the next 4 rounds attempting to drive you out of that market (we were expecting more capacity to be should in rounds 3-4 and wanted to be able to completely own that market while maintaining a 30-35% share in the branded market.) Since the capacity never got sold we were actually a little less aggressive than we wanted to be (team A undercut us pretty good in year 4 but hurt themselves much worse than they hurt us which helped us in year 5.)

  4. Kevin Fleming April 2, 2010 at 8:30 pm #

    Yep – that is EXACTLY what I meant when I said you had an inside person in our group. Obviously you did not, but we were targeting the Private Label Market and you guys kept slicing away at us each week – we just could not get there. Of course, if you don’t win the Private Label bids, you don’t manufacture the shoes and thus your per pair price goes through the roof as ours did. I think once you guys got us in your sights on the Private Label Market, we became the CHAMPIONS of the HIGH COST PER PAIR OF PRODUCTION week after week. It was fun and I’d like the chance to do it again. We’ll meet again on the field of battle and see where it lands us then. As I told my wife when I started this program, there were two things that concerned me. First, I was old enough to be the Father of most of the students in the Cohort, could I hang? Second, I have been accustomed to being one of the smartest individuals in my class but not now – I was surrounded by some VERY bright, Very intelligent and VERY energetic students. COMPETITION being my #1 Strength makes it hard to be “spanked” by someone I could have babysat, on the other hand, maturity allows me to appreciate and compliment that intelligence and not be intimidated by it. I just hope I get to stay in touch with you younger classmates so I can see the GREAT things you all are certain to accomplish. Again, many thanks for all the many hours I stayed up struggling with the decisions on the BSG. I appreciate that lack of sleep :). You’re a winner – keep it up!!!!!!

  5. Chris Burcky April 27, 2010 at 2:41 pm #

    On a related note CAMMco got invited to participate in the BSG Best-Strategy Invitational starting May 10th. We’ll let you know how we fare against the top 11 companies from this spring.

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