July 22, 2007 – stlplace

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Last Updated on July 22, 2007 by stlplace

1) Walmart and Sam’s club: my friend thinks wal-mart has the lowest price for most things. He is looking for a mattress, and he asked why “Wal-mart does not carry the mattress”? I think the implied meaning is: he can be sure getting a deal if it’s sold in Walmart.

I know many people have similar perceptions about Walmart and Sam’s club: they think the price at Walmart is always lowest. A while ago, I read from a report this is not always the case. But Walmart obviously created a good impression (price advantage) on many consumers.

2) Isn’t Hyundai made in Korea? While at a parking lot, a few guys looked at my Nissan Altima, and their Hyundai Sotana (both are black), they mistook my car also as Hyundai’s. So we started the conversation: oh, your car is Nissan, it’s Japanese. Our car is Hyundai, it’s made in Korea. My reply: well, actually my Nissan Altima is made in the USA, and I believe Hyundai made cars in the USA too. So we got a little discussion about the cost, the union, etc.

Wang Shi and Vanke

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Last Updated on July 22, 2007 by stlplace

Among Chinese CEOs, I think Wang Shi is real good. I read his book “Road and Dream” lately. Very impressive. Consider what he and his team has done in last 20 years: from nowhere to No. 1 residential real estate developer in China; more importantly, they create a “Vanke” community, the kind of community Chinese middle class are enjoying.

He talked many things in that book, some of the things I liked:

1) Don’t seek abnormal profit margin: he said Vanke will only do the project with less than 25% profit margin. More recently he is talking about the bubble in Chinese real estate market. Will other real estate company’ chairman say that? Unlikely.

2) Organization and efficient: as a company grows, it will usually become less efficent. The cost of management rises. If a company does not pay attention to this, eventually its internal cost will exceed the money it could make. In other words, it will no longer be profitabble. How to stay nimble as company growing big is very important.

Wang Shi Vanke

Interestingly, Wang Shi’s wife got into the “stock insider sell” controversy lately. You know what did Wang Shi do? He returned the profit from the stock sell to the company.

From management point of view, Vanke is solid because it already has a team of professional managers. Mr. Wang gave up day to day operations and CEO title to someone else, and is enjoying “mount climbing”, partitipating “Boss town”, giving speeches, etc.