Companies that may Point to Recovery

There is no question that we are now in a recession and it is a severe one at that. Now the thing people will look for are indicators that the economy is improving. Some companies might provide the signs of when the economy is finally heading in the right direction (according to 247WallSt.com).

Target. The giant retailer is known as one who caters to people who are seeking a little more than what they can get from Walmart. That "little more" includes slightly higher prices (if, for no other reason than the fact that Target cannot buy at the volume of Walmart) and that has led to some economic slowdown for the store. So far Target sales has seen a noted drop this year. When Target begins to see an increase in sales, you might also see a turn around in the economy.

Starbucks. At the height of rapid economic growth, Starbucks was an economic pleasure palace for the happy middle class. However, with declining prosperity, people are bailing out on the coffee shop and many have remorse for the dollars they spent on a small cup of coffee. Part of the problem is plain out saturation. Even after closing hundreds of stores in 2008, I personally know an area in the very affluent Galleria section of Houston that has at least 4 locations in less than a square mile area. When these come back, the economy will be on the mend as well. You will likely see that after a turn around at Target.


CBS. It is now the only major broadcast TV network that largely has all its eggs in one basket (TV). Its competitors -- Fox (which owns radio, print, web platforms, and TV), ABC (Disney World and other entertainment venues), and NBC (whose parent company is GE, which seems to own everything) are far more diversified. The Stock Market has punished CBS' lack of diversification as its shares have dropped. When those shares rise, so will the economy's prospects because this form of broad base advertising is expensive and it will show businesses are believers in the prospects of growth. This too will come a little later in the recovery process, in my opinion.

Dell. The Dell Computer company, which was once considered a leader in its industry, is now considered one of the weakest. In spite of its efforts towards innovation and customization, it still finds itself limping behind. When Dell has a turn around, the economy as a whole will be enjoying serious recovery. Mind you though, Dell was struggling when the economy was fairly strong, so it too may take a while to catch up.

E*Trade. The weakest of the big three online trade companies has been among the longest to suffer. This company, too, is an indicator of how the economy is fairing.

With the current policies of the Obama Administration, it will be surprising to see these (or other businesses) improve. However, when their is a turn around, these five companies will be among those to watch.

Kevin Price is Host of the Price of Business, the longest running show on CNN 650 (M-F at 11 am), AOL Radio, and CBS Radio. Eric Bolling of Fox News and Fox Business says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com.

Items That Will Be History

Recently I have noticed examples of companies that will soon be history. Some times these departures are due to obsolescence. Other times they are due to poor management. In the end, it is all part of the "creative destruction" that economist Joseph Schumpeter spoke of decades ago. When the market brings down businesses, it replaces them with better ones. It isn't always pretty, but it is indicative of the progress and prosperity we enjoy today.

So here's a list:

• Polaroid Traditional Instant Film. In my neighborhood few, if any, had this camera. It was simply too expensive on the front end. But it was so cool for those who had one. Remember waiting for a minute as the picture slowly revealed itself? Now we see the picture instantly with a digital camera. The company filed for bankruptcy protection on December 18th.


• Bill Blass. Also on this week we saw the fall of what once was one of the leading names in fashion. In recent years it found itself in mass market and struggling for relevance. Soon it will be a footnote of its industry unless someone simply buys the brand.


• CD Sales at Starbucks. For a while there we were concerned that Starbucks would find itself taking over the world. Starting with our taste buds, working its way to our ears, etc. Well, with declining traffic and shrinking sales, the coffee giant is going back to basics and dropping its ambition of being an entertainment one stop.


• Diet Cherry Dr. Pepper. You have to be kidding. This is one that won't likely be missed.


• Crown Pilot Crackers. This New England staple was also popular in the Midwest where I grew up. They are history in 2008.

The above joins two airlines, a couple dozen banks, and untold number financial advisers and institutions. You can read more about losses here.

When companies disappear they are rarely replaced with other large firms. Rather, there is an up rising of entrepreneurs who will struggle to take their businesses to the next level. Some will make it, others clearly will not. It is interesting to think that virtually all the above names started off as mere ideas that were birthed into major corporations, that eventually found itself in this obituary. The next big list of winners are in the making, even as I write.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

The American Magazine: Excellent Reading

One of the great things about the Internet is the huge volume of information that is available in virtually every area under the sun. It is also one of the biggest problems with the Internet, creating a massive recycling of content and quite difficult to find anything remotely original.

With that, I was thrilled to stumble on the new American Magazine. The writing is sharp and concise and (more importantly) the thought is very original. It doesn't bore you by acting smart (long and laborious), but by being smart in the way it approaches problems and polices.

One of my favorite sections of the magazine is "The American Scene," which provides windows of what is going on in the economy. Recent articles included:

* The Venti Effect. This article examines the positive impact that Starbucks Coffee has had on smaller competitors. Who would have guessed that a big chain like Starbucks would do the necessary market research to tell smaller competitors where to place stores? Because of Starbucks pricing model, this smaller stores can typically compete quite well when it comes to pricing. This is a very contrarian view of large businesses.

* The Myth of Offshoring Pollution. Extreme environmentalists are continually arguing that the sky is falling, and if there has been any reduction in pollution in the US it is because the manufacturing jobs have been exported. A telling article from the American points out that in areas where there have been higher manufacturing production in this country, there has been a decrease in polution. What is the real cause of reduction? New technology.

* In Ease of Paying Taxes, We're #76. We hear many platitudes about the great free enterprise system in the United States. There is no doubt about it, the US is wildly successful by world standards, but a recent report from PriceWaterhouse and reviewed by the American shows that we are ranked 76 in terms of ease of payment of taxes. We are successful in spite of our system and not because of it.

There are other great articles through out the magazine and it will certainly become "must reading" in preparing for my radio show and writing in this blog. On its excellent website you will also find great audio programs with some of the finest minds in business, politics, and culture today, like this interview with author Tyler Cowen (author of Markets and Cultural Voices).

I suggest spending time with American today.

For a copy of the free report, "Why Your Marketing Isn't Working," email Info@HoustonBusinessShow.com and put "marketing" in the subject line.

Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

Challenging Starbucks

Yesterday Allen Robinson and myself co-hosted our Sports Business Edition of the Houston Business Hour at a little coffee store called the Coffee Oasis. This event was arranged by Allen and the Oasis is clearly intending to challenge Starbucks in the Houston area. While there I noticed:

* A comparable quality drink

* A slightly lower price

* Free Internet (versus around $10 at most Starbucks)

* An environment very similar to Starbucks

It was a great event and we got to showcase some of the local high school teams. Also it appeared the shop was doing quite well for itself. But it also reminded me of the power of the free market and the great thing mega companies (like Starbucks) does for the economy as a whole. Starbucks proved you could have virtually unlimited establishments with relatively high priced hot drinks and make a sizable profit (sure they still sell food and music, but coffee is their mainstay). Starbucks proved it could be done and their prices are high enough to make room for competition. That is what leads to the rise of Coffee Oasis and other entrepreneurs trying to achieve the American Dream one cup at a time.

Note: Order Kevin Price's audio program The Accumulators, which explains the impact that the Internet is having on marketing and consumer behavior. It is available online here for only $10 plus p and h. Receive the Houston Business Review e-zine free each week by clicking here.

You Always Wondered What the Green Room Looked Like

Every serious talk show mentions the Green Room. That wonderful place where celebrities lounge and relax while waiting for the opportunity to show off to their audience. Over the years I have mentioned ours, but never revealed them until now.

You have heard such a room mentioned on the Today Show, discussed on Leno, and joked about on the David Letterman Show. Now, exclusively for listeners of the Houston Business Show, we are bringing our Green room to you (see the picture to the right).

You are seeing the very place our guests enjoy only the finest refreshments and visit before the show, where our experts plan their time on the air, and where great radio is developed. Note the comfortable chairs (there are actually a couple there, stacked), the well stocked vending machines (there's a soda machine next to the one pictured). With a coffee maker producing brew that will put hair in your chest, who needs Starbucks? Yes it is fabulous and although Hollywood won't show you their secret Green Rooms, I thought you would like to see what I'm referring to on most every show. Now you can see why our guests are anxious to get in the studio!