March 2023 - Page 10 of 13

Serviced Apartments Are the Trend of the Times

Serviced Apartments are basically the fully furnished apartments that are made available to the public for short term and long term stays. It includes various amenities like housekeeping and various different services for the guest and the taxes are included in the rental price itself.

These types of apartments offer the guest much like the services and amenities of a traditional hotel, but with some added convenience, space and privacy like at home. One can enjoy the feeling like living at home while travelling somewhere.

What can one expect from a serviced apartment?

• A kitchen that is fully equipped with things like a dishwasher, dryer

• One or more individual bedrooms designated as sleeping area

• Living space

• Bathroom with all the amenities

• Television

• WiFi

• All the latest in room technology

• All utilities like the water, electricity included

• Weekly or daily housekeeping service

This term the serviced apartments is little known and used outside the corporate business sector. The online booking sites, mostly used to offer them as one of the booking options and not under a special category. These kind of apartments give the guest the kind of home feel by offering certain facilities that may give the guests the personal feeling of staying at home. They should include along with the above mentioned facilities also access to the gym, restaurants, meeting space, and other hotel like service for making the guest feel comfortable.

This sector has an impact on leisure travel as the travelers are finding these as the cheapest and best alternatives to the high end costly hotels. These are treated as economical for longer stays, family trips. These can give you all the in house facilities and entertainment and thus allowing you to live like a local in an outer place.

Types:

Serviced Apartments:

These are the self contained apartments usually built within a building. There may or may not be the staff on site. The operator may offer keys on arrival to the guests or may also provide keyless entry access through smartphones as well. Guest can access a 24 hour helpline.

Aparthotel:

These are the kind of apartments that can be seen in a dedicated building. These apartments offer hotel like services with 24 hour reception.

Corporate Housing:

It is basically a fully furnished house that is made available for rent or lease for a certain period of time. These kind of accommodations offer the visitors the more like a normal living, allowing them to cook, relax, plan their time as they like.

Promotion "Above the Line" and "Below the Line"

Promotion can be loosely classified as “above the line” and “below the line” promotion. The promotional activities carried out through mass media like television, radio, newspaper etc. is above the line promotion.

The terms ‘below-the-line’ promotion or communications, refers to forms of non-media communication, even non-media advertising. Below-the-line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in fmcg products, but also for industrial goods.

Some of the ways by which companies do BTL (below the line) promotions are by exhibitions, sponsorship activities, public relations and sales promotions like giving freebies with goods, trade discounts given to dealers and customers, reduced price offers on products, giving coupons which can be redeemed later etc.

BELOW THE LINE SALES PROMOTION

Below the line sales promotions are short-term incentives, largely aimed at consumers. With the increasing pressure on the marketing team to achieve communication objectives more efficiently in a limited budget, there has been a need to find out more effective and cost efficient ways to communicate with the target markets. This has led to a shift from the regular media based advertising.

A definition of below-the-line sales promotion given by Hugh Davidson:

‘An immediate or delayed incentive to purchase, expressed in cash or in kind, and having only a short term or temporary duration’.

Methods of below the line sales promotion

1. Price promotions

Price promotions are also commonly known as” price discounting”. These can be done in two ways:

(1) A discount to the normal selling price of a product, or

(2) More of the product at the normal price.

Price promotions however can also have a negative effect by spoiling the brand reputation or just a temporary sales boost (during the discounts) followed by a lull when the discount would be called off.

2. Coupons

Coupons are another, very versatile, way of offering a discount. Consider the following examples of the use of coupons:

– On a pack to encourage repeat purchase

– In coupon books sent out in newspapers allowing customers to redeem the coupon at a retailer

– A cut-out coupon as part of an advert

– On the back of till receipts

The key objective with a coupon promotion is to maximize the redemption rate – this is the proportion of customers actually using the coupon.

It must be ensured when a company uses coupons that the retailers must hold sufficient stock to avoid customer disappointment.

Use of coupon promotions is often best for new products or perhaps to encourage sales of existing products that are slowing down.

3. Gift with purchase

The “gift with purchase” is a very common promotional technique. In this scheme, the customer gets something extra along with the normal good purchased. It works best for

– Subscription-based products (e.g. magazines)

– Consumer luxuries (e.g. perfumes)

4. Competitions and prizes

This is an important tool to increase brand awareness amongst the target consumer. It can be used to boost up sales for temporary period and ensure usage amongst first time users.

5. Money refunds

Here, a customer receives a money refund after submitting a proof of purchase to the manufacturer.

Customers often view these schemes with some suspicion – particularly if the method of obtaining a refund looks unusual or onerous.

6. Frequent user / loyalty incentives

Repeat purchases may be stimulated by frequent user incentives. Perhaps the best examples of this are the many frequent flyer or user schemes used by airlines, train companies, car hire companies etc.

7. Point-of-sale displays

Shopping habits are changing for the people living in metropolitan cities. People prefer big retail outlets like Big Bazaar to local kirana stores. Most of the decisions of buying are taken by the virtue of point-of-sale displays in these retail outlets.

SOME INTERSTING EXAMPLES OF BTL PROMOTION

Most of the big brands are following the suit of BTL promotion because of rising prices of media based promotion, advertising clutter and increased impulse purchasing.

Some of the interesting examples are:

Most of the educational institutes like career launcher, Time and PT are holding informative workshops and free tests for students which give a direct interaction of these institutes with the target customer and hence a suitable platform to sell themselves.

Ring tones and music videos on cell phones are helping the entertainment industry to promote for a music video or a movie for dirt-cheap rate as compared to media promotion.

Various companies sponsor sport events to promote their brand, but nowadays media companies like Hindustan Times are holding weekly events through out the country in which companies can put up their stalls, display banners and posters and arrange for some fun activities. These events give the companies a platform at very low price to promote their brand and increase visibility among target consumer. These companies also give discount coupons to winners in the games, which in turn boost the sales of the products and ensure that first time users try these products as well.

Pepsi organized an inter school cricket event for 425 schools across 14 cities which did wonders for the company by promoting the brand amongst the right target customer for almost no cost.

Most of the pharmacy companies do BTL promotion by getting shelf space through doctors to display their products or by giving away free calcium tablets again through doctors, knowing that for a patient a personal advise from a doctor would hold more value as compared to a commercial advertisement.

Another interesting BTL promotion was by NIKE, an athlete dressed up in Nike sportswear could be seen jogging on an elevated treadmill for the whole day on National Highway 8, Delhi.

BTL promotions are gaining popularity among all big companies nowadays considering their effectiveness because of the “individual customer promotion” at a price, which is much lesser than the normal media promotions.

Working From Home – Enjoy the Benefits

Working from home is a notion that has probably crossed many people’s minds at one time or another. Sadly, many people believe that this is not an option for them, but with all the business opportunities available today this is just not the case. Making the choice to pursue a home business can provide a number of benefits in a person’s life.

1. Flexibility of Hours

Time is something that we have little control over when we are working in a conventional job as an employee. If we are lucky, we may have a boss that is understanding and offers flexibility in respect to the hours we must work, but sadly this is not generally the case. Working from home puts you back in charge of your own time. When your children want you to watch their school sports you have the choice. If you have an appointment to attend, you can work your day around it. Hey, if you want to sleep in until lunchtime, again, the decision is up to you.

2. Balance Family and Work Life

Too many people today complain that they do not get to spend the time they desire with their family. People these days seem to be working longer hours than ever to make ends meet. Sadly, many children are growing only up getting to see their parents rushing around in the morning to get them to school or day care, then for an hour or so at night when they are tired and grumpy. Quality, relaxed time together always seems to be pushed onto the backburner. A home business can offer a balance between work and family life, the value of which no price can really be placed on.

3. No dress code

Personally, I love wearing jeans. They are always comfortable, I can dress them up or down, and I feel good about myself when I wear them. Unfortunately, there are not too many jobs that allow you to dress like this each day. For many people the way they must dress each working day is dictated to them. In some situations, such as for safety reasons, this control is warranted, but in many positions the dress codes could be relaxed a little which may create happier employees. Working from home means that I decide what I want to wear and what I feel comfortable in on any given day. Some days I even happily carry out my business in my pajamas.

4. No travel

Does anyone really enjoy being stuck in peak hour traffic, or worse still, having to catch overcrowded public transport. I definitely don’t miss having to share a seat with the inconsiderate person who insists on reading their oversized newspaper with their arms spread out in front of my face. These days the furthest I travel is to the kitchen for a coffee. Commuting to the workplace is becoming increasingly expensive, with sky rocketing fuel prices and increases to the cost of public transport. Eliminating the travel to and from a workplace each day can save a lot of money each week for some people and is a major benefit of working from home.

5. Responsibility for your own financial situation

A great deal of satisfaction can be obtained from taking charge of your own financial situation. Knowing that the responsibility of succeeding and making money is yours can motivate and inspire people to levels of potential that they never knew they had in them. When you are in a job as an employee there is often a ceiling on what dollar value you can receive for your time. This keeps many people

Much can be said about the benefits of working from home. Personally, my life has improved ten fold since embarking on this adventure. There are many different ventures available to people these days and there are businesses to suit just about anyone regardless of the skill level possessed. I have found my freedom with the home business I have chosen and I can honestly say that it has changed my life completely. I wish you all the best with your quest for the life you desire.

Mergers & Acquisitions Can Result from Strategic Alliances

Alliances frequently result in mergers and/or acquisitions. Partnering relationships, such as joint ventures or strategic alliances, can sometimes lead to a merger or acquisition situation. After companies work together for a period of time and get to know one another’s strengths, weaknesses, and synergistic possibilities, new relationship opportunities become apparent. One could argue that a joint venture or strategic alliance is simply the getting to know each other part of a courtship between companies and that the real marriage does not occur until the relationship has been consummated by a merger or acquisition.

To make the point, Dan McQueen, president, at Fluid Components International (FCI) built a Partnering relationship with Vortab, a small technology company. Vortab produced static mixers, a technology suitable for flow conditioning that complemented FCI’s product offering. While Vortab also had three other distribution partners in addition to FCI, FCI’s volume with Vortab continued to grow to the point that Vortab’s technology became an important part of FCI’s total sales volume. After about three years into the relationship, FCI acquired Vortab.

Because of the close relationship between Vortab and FCI, when the Vortab was put up for sale McQueen knew its true value. Resulting from his knowledge, FCI was able to purchase Vortab at a much more realistic price than Vortab’s asking price. The Vortab technology integrated well with FCI’s core competency technology and today FCI also distributes Vortab through some of its non-direct competitors.

The following list demonstrates some of the specific values created or developed from the various organizational blending methods:

· Operational resource sharing

· Functional skill transfer

· Management skill transfer

· Leverage (economies of scale)

· Capability increases

Mergers

Mergers occur when two or more organizations come together to blend or link their strengths. Also in the deal is a blending of their weaknesses. The hopeful result is a new more powerful organization that can better produce goods and services, access markets, and deliver the highest quality customer service. Mergers offer promise for synergistic possibilities. This is achieved by the blending of cultures and retaining the core strengths of each. In this scenario, a new and different organization generally emerges. The goal is a sharing of power, but usually the strongest rise to the top leadership.

Exxon – Mobil

The Federal Trade Commission gave Exxon and Mobil the green light On November 30, 1999 for their $80 billion merger. The next day the transaction was completed. The merged organization officially became Exxon Mobil Corp. The merger actually brings “the companies back to their roots when they were part of John Rockefeller’s Standard Oil empire. That company was the largest oil firm in the world before it was busted up by the government in 1911.”

At the 1998 announcement of their intention to merge, Mobil chairman, Lucio Noto made a comment about the need to merge. He said, “Today’s announcement combination does not mean rhat we could not survive on our own. This is not a combination based on desperation, it’s one based on opportunity. But we need to face some facts. The world has changed. The easy things are behind us. The easy oil, the easy cost savings, they’re done. Both organizations have pursued internal efficiencies to the extent that they could.”

While part of the deal was the selling of a Northern California refinery and almost 2,500 gas station locations, the divestiture represents only a fraction of their combined $138 billion in assets. Lee Raymond, Exxon chairman, now chairman and chief executive of the merged company said, “The merger will allow Exxon Mobil to compete more effectively with recently combined multinational oil companies and the large state-owned oil companies that are rapidly expanding outside their home areas.”

Exxon Mobil is now like a small oil-rich nation. They have almost 21 billion barrels of oil and gas reserves on hand, enough to satisfy the world’s entire energy needs for more than a year. Yet, there is still the opportunity to cut costs. The companies expect their merger’s economies of scale to cut about $2.8 billion in costs in the near term. They also plan to cut about 9,000 jobs out of the 123,000 worldwide.

AOL – Time Warner

On January 10, 2000, Steve Case, chairman and chief executive of America Online (AOL), sent an e-letter to his 20 million members. He said, “Less than two weeks ago, people all over the world came together in a global celebration of the new century, and the new millennium. As I said in my first Community Update of the 21st Century, all of us at AOL are extremely excited by the challenges and prospects of this new era, a time we think of as the Internet Century.

I believe we have only just begun to see clearly how the interactive medium will transform our economy, our society, and our lives. And we are determined to lead the way at AOL, as we have for 15 years–by bringing more people into the world of interactive services, and making the online experience an even more valuable part of our members’ lives.

That is why I am so pleased to tell you about an exciting major development at AOL. Today, America Online and Time Warner agreed to join forces, creating the world’s first media and communications company for the Internet Century. The new company, to be created by the end of this year, will be called AOL Time Warner, and we believe that it will quite literally change the landscape of media and communications in the new millennium.”

The next day newspaper headlines read, “America Online, Time Warner Propose $163-Billion Merger.” The Los Angeles Times said, “In an audacious deal bringing together traditional entertainment and the new world of the Internet, America Online and Time Warner Inc. on Monday announced they will merge in the largest business transaction in history.”

The story later revealed the value comparisons of the companies. While AOL earns less than Time Warner, the stock market thinks AOL’s shares are worth more. “America Online is valued by the stock market at nearly twice Time Warner–$173 billion, compared with $101 billion as of Friday’s [1/7/00] market close–even though it has one-third Time Warner’s annual revenues.” The article also stated “AOL earned $762 million on $4.8 billion in sales in the year ended Sept. 30 [1999].”

AOL chairman, Case wants to move fast. The Times article stated, “Case said the two chairman began discussing a combination this fall [1999], he has tried to impress upon Levin [Gerald Levin, chairman at Time Warner] the need to operate the new company at Internet speeds.” (We all know the rest of the story…nothing is forever.)

The prophets of gloom are always ready to point out the down side to deals. In UPSIDE magazine, Loren Fox reported some of the challenges to the marriage. They are:

· “The holy grail of strategic synergy has been elusive in the media world.”

· “In the offline world, it’s notable that Time and Warner Brothers have continued to run fairly independently despite a decade as Time Warner.”

· “‘From any standpoint, this has not been a success to date,’ says Yahoo President and COO Jeff Mallett.”

· “When you buy the company, you get things you don’t need.”

· “Warner might make these deals easier, but it might also bring new risks–even for AOL, a veteran of 25 acquisitions over the last six years. Employees might flee to pure dot-com companies, ego clashes could stymie plans or financial gains may never cover the large premium paid for Time Warner.”

· “You don’t need to own everything to do what AOL and Time Warner are doing.”

Warner-Lambert

Merger mania can make strange bedfellows, let alone promises unfulfilled. Alliances can lead to mergers. Warner-Lambert is an example of all the above. This is corporate soap opera at its best.

· June 16, 1999, Warner-Lambert Company announced that it has signed a letter of intent with Pfizer Inc. to continue and expand its highly successful co-promotion of the cholesterol-lowering agent Lipitor (atorvastatin calcium). The companies, which began co-promoting Lipitor in 1997, will continue their collaboration for a total of ten years. Further, with a goal of expanding their product collaborations, the companies plan to explore potential Lipitor line extensions and product combinations and other areas of mutual interest.

· November 4, 1999, newspapers across America report on “one of the biggest mergers of any kind, ever.” The Wall Street Journal said, “Now, American Home is set to merge with Warner-Lambert Co. in a stock deal that is valued at about $72 billion. It stands as the biggest deal in drug-industry history and one of on the biggest mergers of any kind, ever.” Also reported, “Warner-Lambert held talks with Pfizer Inc. at the same time it was negotiating with American Home.”

· November 4, 1999, The New York Times runs a story titled, “Can a Strong-Willed Chief Share Power in a Merger?” The article lead with, “The planned merger between American Home Products and Warner-Lambert once again raises the question of whether John R. Stafford, American Home’s famously strong-willed chairman and chief executive, is capable of sharing and, perhaps more important, letting go of power.”

· January 13, 2000, Warner-Lambert Company indicated that, as a result of changing events, it is exploring strategic alternatives, including meeting with Pfizer, following Pfizer’s recent approach. In that regard, Warner-Lambert said that its Board of Directors has authorized management to enter into discussions with Pfizer to explore a potential business combination. The Company stated that, in light of changing circumstances, its Board had concluded that there is a reasonable likelihood that Pfizer’s previously announced conditional proposal could lead to a transaction, reasonably capable of being completed, that is better financially for Warner-Lambert shareholders than the proposed merger with American Home Products.

Lodewijk J.R. de Vink, chairman, president and chief executive officer of Warner-Lambert, stated, “It has always been the Board’s objective to secure the best possible transaction for Warner-Lambert shareholders and we will now pursue discussions with Pfizer to determine if a combination with them to achieve that goal is possible.” The Company emphasized that there can be no assurance that any agreement on a transaction with Pfizer, or that any other transaction, will eventuate.

· January 24, 2000, in response to inquiries, Warner-Lambert Company said that it would continue to explore strategic alternatives, including discussions with Pfizer. The Company’s unwavering goal is to provide the greatest value to Warner-Lambert shareholders. Warner-Lambert officials emphasized that there can be no assurance that any transaction will be completed and offered no further comment.

Was American Home Products the bride left at the altar? The Wall Street Journal didn’t think so, in fact they called American Home the Runaway Bride in their November article. Additionally they listed several companies that American Home has them selves left at the altar.

· Early November 1997, American Home Products and SmithKline Beecham begin merger talks.

· January 30, 1999, Talks break off.

· June 1, 1998, American Home and Monsanto announce agreement to merge.

· October 13, 1998, American Home and Monsanto cancel plans to merge.

· November 3, 1999, American Home and Warner-Lambert Co. in talks to merge.

Acquisitions

An acquisition is basically the function of one company consuming and digesting another. The result is that the acquiring company shores up core weaknesses or adds a new capability without giving up control, as might occur in a merger. Added capabilities, rather than synergy is usually the reasoning behind acquisitions. In this situation, the acquiring company’s culture prevails. Frequently one company will acquire another for their intellectual property, their employees or to increase market share. There are numerous strategies and reasons why one company acquires another, as you will soon discover.

Guardian Protection Services has been acquiring alarm companies within its northeast region of operation to supplement its internal growth. Russ Cersosimo, president says, “This is just another way for us to satisfy our appetite for growth. Our desire is to expand our opportunities in the other offices. That is another reason why it is attractive for us to look to acquire companies, to get their commercial base and commercial sales force that is in place in those offices. We wanted to make sure that we can digest the new accounts without putting strain on our paper flow and the systems we have in place.”

Who does R&D acquisitions well? Electronics Business recently answered, “Cisco Systems Inc., San Jose, the networking equipment company, which boasts many success stories among its 40 acquisitions of the past six years.” None of their acquisitions were in mature markets, rather all were leading edge, allowing Cisco to broaden its product offering. Cisco hedges its acquisition bets through volume. Ammar Hanafi, director of the business development group at Cisco says it counts on two out of three acquisitions succeeding and the remaining third doing just okay. Acquiring people, intellectual properties and specialized skills is important to companies like Cisco. They think that even if the acquired technology does not pan out, they have the engineers. Generally, any fast growing company like Cisco cannot hire people fast enough and the acquired personnel are a boon to the company’s progress. Retention of acquired employees is at the heart of their acquisition strategy. “If we’re going to lose the people who are important to the success of the target company, we’re probably not going to have an interest,” says Cisco controller Dennis Powell.

“Cisco doesn’t do big acquisitions, the cultural issues are too huge,” Hanafi says. Cisco buys early stage companies with little or no revenues. While they often have paid extremely high prices for the acquisition, they seem to do better than most with their selection. Between 1993 and 1996, Cisco bought cutting edge LAN switching technologies for a total of $666 million in stock. More than half was spent on Grand Junction Networks Inc., which developed fast Ethernet switchers. At the time of purchase, it is estimated that Grand Junction’s annual revenues were $30 million. “Today, the four LAN switching acquisitions account for $5 billion of Cisco’s $12 billion in annual revenues.” “We acquire companies because we believe they will be successful. If we didn’t believe in their success, we would not acquire them,” says Powell.

Little known West Coast Texas Pacific Group (TPG) has been acquiring at a feverish pace. Their semiconductor and telecom buying spree includes, GT Com in 1995, AT&T Paradyne (from Lucent Technologies Inc.) in 1996, Zilog Inc. in 1997, Landis & Gyr Communications SA in 1998, ON Semiconductor (from Motorola Inc.), Zhone Technologies Inc., MVX.COM and Advanced TelCom Group Inc. in 1999.

TPG banks heavily on intellectual capital. Many believe that by being part of TPG, their single biggest advantage is access to broad pool of talented and well-connected people. CEOs can take advantage of TPG’s contacts in other industries around the world. “TPG has this ability to build a virtual advisory board…that they don’t even have to pay for,” says Armando Geday, president and CEO of GlobeSpan Inc.

Lucent Technologies, Inc. has also been rampaging through the same market as Cisco. Lucent’s 1999 (January to August) acquisitions as listed in CFO magazine include:

· Kenan Systems for $1 billion

· Ascend Communications for $24 billion

· Sybarus for $37 million

· Enable Semiconductor for $50 million

· Mosaix for $145 million

· Zetax Tecnologia, $ N/A

· Batik Equipamentos, $ N/A

· Nexabit Networks for $900 million

· CCOM, Edisin, $ N/A

· SpecTran for $99 million

· International Network Services for $3.7 billion.

An advantage that Lucent has over its competitors is access to its 25,000-employee Bell Labs idea factory. As such, they are more likely to purchase technology rather than R&D. Still, Lucent continually reviews the comparative advantages of technology and R&D in relationship to its own projects in reviewing acquisition possibilities. Lucent executive vice president and CFO Donald Peterson says, “In every space in which we have acquired, we have had simultaneous research projects inside. It makes us knowledgeable, and lets us have a build-versus-buy option.”

Lucent wants their units as a hole to do well and if acquisition helps that cause, they acquire. Peterson also says, “We view acquisition as a tool among many that our business units can use to advance their business plans. We evaluate acquisitions one by one, in the context of the business strategy of the unit.”

Tyco International Ltd. is a diversified global manufacturer and supplier of industrial products and systems with leadership positions in each of its four business segments: Disposable and Specialty Products, Fire and Security Services, Flow Control, and Electrical and Electronic Components. Through its corporate strategies of high-value production, decentralized operations, growth through synergistic and strategic acquisitions, and expansion through product/market globalization, Tyco has evolved. From Tyco’s beginnings in 1960 as a privately held research laboratory, it has transformed into today’s multinational industrial corporation that is listed on the New York Stock Exchange. The Company operates in more than 80 countries around the world and had fiscal 1999 revenues in excess of $22 billion.

In the mid-1980s, Tyco returned its focus to sharply accelerating growth. During this period, it reorganized its subsidiaries into the current business segments listed above. The Company’s name was changed from Tyco Laboratories, Inc. to Tyco International Ltd. in 1993, to reflect Tyco’s global operations more accurately. Furthermore, it became, and remains, Tyco’s policy to focus on adding high-quality, cost-competitive, low-tech industrial/commercial products to its product lines that can be marketed globally.

In addition, the Company adopted synergistic and strategic acquisition guidelines that established three base-line standards for potential acquisitions, including:

1. A company to be acquired must be in a business related to one of Tyco’s four business segments.

2. A company to be acquired must be able to expand the product line and/or improve product distribution in at least one of Tyco’s business segments.

3. A company to be acquired that will introduce a new product or product line must be using a manufacturing and/or processing technology already familiar to one of Tyco’s business segments.

Tyco also developed a highly disciplined approach to acquisitions based on three key criteria that the Company continues to use today to gauge potential acquisitions:

1. Post-acquisition results will have an immediate positive impact on earnings;

2. Opportunities to enhance operating profits must be substantial;

3. All acquisitions must be non-dilutive to shareholders.

FASB Accounting Rule Change

The rules of the game are changing. Some of the accounting benefits of acquisition will soon disappear. Spending some extra time with your accounting and legal departments could prove beneficial in the long-term.

George Donnelly, in his article in CFO magazine writes, “The current state of accounting rules is clearly a factor in the frenetic acquisition activity at Cisco Systems and Lucent Technologies Inc. Like many high-tech companies, the two giants can acquire with little drag on their finances, because pooling-of-interest accounting enables them to avoid onerous goodwill charges that otherwise would ravage earnings.

But because of the death sentence the Financial Accounting Standards Board has levied on pooling, companies must use straight-purchase accounting after January 1, 2001. Then buyers will have to amortize goodwill for no more than 20 years.”

Consolidations and Rollups

Bill Wade in Industrial Distribution said: “The basic premise couldn’t be any simpler. Take a highly fragmented industry–like distribution–facing technological change, customer upheaval or chronic financing difficulties. Add in a few well-healed foreign firms or, worse, a couple of previously unknown competitors from outside the business. Since the industry leaders are probably family-run businesses with limited succession strategies, the next step to protect profit and continue growth is clear: consolidate.”

A consolidation or rollup, as it’s frequently called, generally occurs when an organization or individual with deep pockets sets out to buy several small companies in a fragmented industry and rein them in under a new or collective pennant. In 1997 the National Association of Wholesale-Distributors reported that 42 of the 54 industries they studied had been significantly affected by consolidation. Frequently a professional management and buying strength create economies of scale that allows the consolidator to pluck the low hanging fruit in the industry. They will invest significantly in systems to eliminate the duplication of effort and inefficiencies that exist within the industry being consolidated.

While some call it smoke and mirrors, many consolidators are yielding outstanding results. In 1997, at 39 years old, financial whiz Jonathan Ledecky pulled off a bold deal. As reported in CFO magazine, He went to the public equity markets and raised half a billion dollars for his company, Consolidation Capital Corp., in a brazen initial public offering. Without revenues, assets, operating history or identity (name or industry), he raised the capital in a blind pool on the strength of his reputation alone.

U.S. Office Products (USOP) is the result of 220 acquisitions. Sharp Pencil was one of six privately owned office-supply companies that Ledecky put together. But he didn’t stop, after two years, and 220 acquisitions later, USOP was a member of the Fortune 500, with $3.8 in revenues. “It was crazy,” says Donald Platt, senior vice president and CFO at USOP. Platt did rely highly on outside resources, including a team of lawyers and accountants to get the job done (the 220 acquisitions). “We restricted then to well-managed, profitable companies. At worst, we would still be making money,” says Platt.

H. Wayne Huizenga is the owner of the Florida Marlins baseball team. He is also the king of consolidators. He pioneered his technique by rolling-up trash-truck businesses to create Waste Management Inc., the nation’s largest waste company. He went on to create the largest video chain, Blockbuster Video. With AutoNation, Huizenga, now struggling, is attacking the retail automobile industry. In mid-December 1999 AutoNation had 409 retail franchises but announced the closing of 23 of their used-car superstores.

Michael Riley learned about consolidations while serving as personal attorney for Huizenga. In July 1999, Riley’s company, Atlas Recreational Holdings Inc., paid $14 million to purchase controlling interest in the only publicly traded RV dealership chain in the United States, Holiday RV Superstores Inc., in Orlando, Florida. Riley’s avowed intention is to grow the company from $74 in annual sales in 1998 to $1 billion by 2003 by acquiring other dealerships.

Riley says, “Consolidations really will help. We can bring advantages to sales and service. We can make a difference in warranty. There is a real value added when you put these companies together.”

Same Industry, Different Strategies

In mid-1997, roll-ups, United Rentals and NationsRent were formed. They are in a race, but are using different strategies to achieve their results. After two years of ravenously gobbling up companies, United had 482 locations while NationsRent had accumulated only 138 stores. NationsRent has been developing a nationwide identity with stores that look-alike and have the same signage and layout. United Rentals presence is virtually unknown since the stores retain their previous appearance.

Motivations for Consolidators

There are several good reasons why consolidators attack a particular industry. The following list provides some of the rational that assist them in their decision making process. As you look to profit from the trend, keep these elements in mind as you make your selection on whom to acquire.

· Confidence by the players that they can capture significant and highly profitable additional market share by implementing the cutting edge management, procurement, distribution and service practices that will give them a competitive edge over smaller players.

· Gain national customers through increased capabilities in delivering the highest levels of standardized service and national geographical coverage.

· Larger customers of independent distribution channels are seeking broader geographic coverage and networks of locations that allow for greater service capabilities, and the smaller customers want a high level of customer service and response.

· Customers’ desire for more product sophistication.

· Insurance and financing synergies.

Fragmented Industries Are Ripe for Consolidations and Rollups

Some industries that are ready for consolidations or rollup examples include heavy-duty truck repair, office products, recreational vehicle dealerships, rental stores (equipment, tools and party) and distribution. Consolidation does not just happen. It is triggered by shifts in supplier and customer expectations. Consolidation in a supplier base or customer pool often alters the economic rational for the structure of an industry. Functional shifts are accompanied by serious margin shifts among channel participants.

Take notice of the speed in which an industry can experience consolidation. If you are a consolidator, pick the low hanging fruit before another beats you to it. If you are fighting consolidation, take notice of the state of your industry and make adjustments (like strategic alliances) to your business plan if your industry is highly fragmented.

· TruckPro, the $150 million sales creation of Haywood and Stephens Investments, was sold in May 1998 to AutoZone, the $3 billion distribution king of do-it-yourself auto parts.

· In June 1998, nine heavy-duty distribution companies with volumes of $6 to $37 million, simultaneously merged and raised $46 million from the public for their brand new $200 million company, TransCom USA.

· Brentwood Associates, a venture capital company, during Spring and Summer1998, created HAD Parts System, Inc. a $145 million operation, by acquiring three companies in the Southeast.

· In July 1998, Aurora Capital’s QDSP acquired majority interest in nine heavy-duty companies from FleetPride, a $200 million parts and service operation.

Stated in Truck Parts & Service, “Here the independent suffers a staggering disadvantage to roll-ups. Consolidators have access to large amounts of capital. The independent businessperson, however, must primarily finance his growth by earnings retains from current operations. New high efficiency service bays, significant and growing training expenses, data processing and communications technology all clamor for increased working capital. The large players’ acquisition cost advantage eventually will win him all the mega-fleet business and the vast majority of business from mid-sized fleets.

Supplementing his parts acquisition cost advantage, the consolidator will be able to lower many overhead costs through centralized management and volume discounts…Combined savings in parts acquisition cost and overhead reduction should easily exceed 4% of sales.”

Some of the indicators that an industry (any industry) is poised for consolidation are listed below. If you notice your industry has similar issues, it is just a matter of time. Plan now for what is coming. Where do you want to be when the train arrives?

· A high degree of fragmentation with numerous smaller companies and few, if any, dominating players.

· A large industry that is stable and growing.

· Multiple benefits for economies of scale.

· Synergies that can be achieved by consolidating companies.

· Infrequent use of advanced management information systems.

· Limited access to public capital markets and somewhat inefficient capital structures among companies.

· Lack of opportunities, historically, for owners to liquidate their businesses if they wish to leave the industry.

Reasons for Business Owners Selling to Consolidators

The reasons for a business owner to sell his or her business are as varied as there are people. Usually it is not one reason but several combined reasons that influence a seller’s decision. The following list provides you with the general areas that might drive a selling decision:

· First generation owner, without heirs, nearing retirement.

· Lack of capital to make necessary technological and capital improvements to compete, within an industry, and with new competitors.

· Flat growth rate in industry.

· Better profitability as part of a larger organization.

· Centralized buying.

Online Freelance Writing – The Most in Demand Career As a Freelancer – A Great Income Builder

An Online Freelance writer is a self employed artist or journalist who sells services as an uncommitted independent writer. In the Freelance profession, writing skill is the most demanding opportunity. When it comes to the Internet, the introduction of websites and blogs to promote everything, and the need of fresh and relevant content has increased the freelance writer jobs to the top. Online freelance writing demand has more than doubled.

In fact online content writing is fast becoming one of the major source of freelance writing assignments. Other freelancers, such as freelance photographers, freelance web designer and graphic artists are also facing a great demand in their profession.

There are plenty of jobs for online freelance writing, this does not mean you will be getting a fair share of them, you still have to compete with a lot of freelance writers for jobs. You have to stay active smartly in writing competition. 80/20 rule applies in freelance writing. 20 % of all the freelancers get all outstanding good paying freelance writers jobs where as 80% of the freelance writers get average paying freelance writing job. But if you observe the market and pursue career properly with the current trends you can be in the 20% of the online freelance writers.

Do the following:

1. Do not accept low priced projects:

If you started following this pattern and started taking projects that are priced lower than the market rate, you will get a reputation of accepting cheaper price of your hard work. Do not fall in this trap. Be justified to yourself and charge a price that is acceptable to you happily. A price too high might at times end up losing the project to another low priced freelancer and therefore, stay in the norms.

2. Use advertising and marketing strategies to promote yourself:

Use both online and offline advertising and marketing campaigns to let everyone know that you are a freelance writer, is important. The more people will know you the more assignments you will get and you will be able to choose the reasonable priced ones. Off line, pass your card to everyone you know. Self marketing is essential as this will give you the contacts you need to start a freelance career.

3. Always write your best:

Provide latest relevant no fluff information. Your already written work is going to be the basis for the clients hiring you for future freelance work. Online freelance writing at its best is the primary goal to achieve best results.

4. Create a solid Reputation as a Writer:

And reputation is formed when you not only write good but also present a great reputation as a person, both online and off line. Use best work ethics and make sure to meet dead lines do not take the jobs that you can not finish before time.

5. Be active to find great jobs yourself:

Don’t completely depend on your ads, but look for new jobs everyday. Contact all happy clients and organizations that have used you as a writer before, and socialize with them. Make new relations everyday and let them know what you do? Spend sometime looking for more jobs every day.

6. Starting as a Freelance Writer, start as part-time:

When starting online freelance writing, begin writing as a part timer and continue your job. Eventually create clients and once you are very sure that you have become successful to create a full time income without problem then plunge into it full time.

7. As online freelance writer your opportunity is greater:

There are lots of people who need your services, everybody does not have the talent to write and every one does not have the time to write. But every one wants to make money online and that is where your business comes in.

So focus online freelance writing and you will achieve best results.

8. Create a network of people:

This will help you get recommendations for writing jobs. Editors of magazines business owners who need ad writing and sales copies so often, newspapers and news letter publishers, just get to know many of them so you are in good hands to find new jobs for freelance writing.

9. Referral and Recommendations:

This becomes easy once you have established yourself as a great writer. Although writing is a big business, but the writers community is pretty small. Ask for recommendation to another person who needs a writer. This is one of the great ways to get better assignments and is based on your writing standards and your networking.

10. Present yourself as a highly developed and ethical person:

Only a reputation full of good qualities can make you go around effortlessly in the community when there is a need of writer. People will accept your high rate and your demands. So create a reputation and a contract that has benefits for both.

These are some of the strategies to follow. You will experience new and unique ways to create a good position as an online freelance writer.

Independent Contractor Jobs Gravitating Into the Digital Marketplace!

Independent Contractors have always gravitated where the money is at, no matter what marketplace. In recent years, many independent contractors have expanded their product offering to the digital media space for many reasons. The digital space constantly changes and is where 97% of consumers search for products and services they need on a daily basis. Think of the last time, you relied on traditional media whether you grabbed a newspaper, yellow page directory or that direct mail piece shoved deep within the junk mail that overflows your mailbox leaving a trail of dampened paper on your porch.

Even though the digital market is the hottest land grab around town, without building valuable real estate on top of that property… it’s just a piece of land. In order to take advantage of the many forms of digital marketing out there today, you first need a solid foundation which always comes down to a website.

I have personally worked in the independent contractor (1099 world) for 6 years and the one thing that hasn’t changed from then to now is that all Independent Contractors work off of a commission. What determines their security is the product they sell, the processing of that specific product which determines how much time is committed to administrative work. As we all know to well, the more time that is consumed with processing of orders and jumping through hoops, the less time they have to make money. Finally, one of the most important factors an Independent Contractor must consider is the percentage of commission paid based off of the market price of the product they are selling.

Companies that turn to the Independent Sales Agent community must understand that they are a unique breed of people. They are “Independent” for a reason. They don’t like working for others and being told when to come to work, when to take a lunch and when they can clock out. They are paid to complete a job or assignment… nothing more and nothing less. As an Independent Contractor, go where the money is and make the most of it while it lasts. The biggest advantage of contracting in the digital market is that mobile phones and tablets are not going anywhere, anytime soon.

There are some digital companies out there paying their freelance sales agents 25% on the low end to as high as 50% on the high end. The oyster is yours so it’s time to make the money you deserve to make.

Marketing Mix – Top 4 Promotion Mix Tactics

Marketing mix is part of your marketing plan. It defines product, place, price and promotion. The promotion mix targets raising product or brand awareness, communicating the unique value proposition of your product and gaining acceptance of your products. The primary purpose and focus of promotional mix is to get the desired result: the sale of your product. There are more than seven common promotion mix tactics and while most businesses do not use all of these tactics to promote and sell their products, they do use a mix of these tactics.

The Top 4 Promotion Mix Tactics:

Personal selling is one of the most common of the promotion tactics. Most companies will hire people to do the selling: sales representatives, account managers, inside sales representatives, retail sales, sales agents, or telemarketers. Face-to-face selling is one of the most common methods of selling, although sales by phone, and more recently, sales by email, are becoming well used. These are not necessarily as effective, but they are low cost sales tactics.
Advertising is another common promotion tactic. Advertising focuses on brand recognition and identity; not on the product alone. Advertising can be a costly tactic that only the big businesses can invest in; particularly advertising on television which can cost anywhere from $100,000 to over $1 million for a national broadcast in prime time (for a 30-second spot!). This cost is in addition to the cost of producing the commercial. Advertising in industry or consumer magazines is less expensive and typically you can target your advertisement to a specific industry or region. Other advertising can include car or bus ‘wraps’, events (such as sports, music, art), and billboards. The Internet is becoming a very popular place to advertise, and on a relative basis, it is more affordable.
In the retail marketplace, consumer promotion is very common. Buy one, get one free. Coupons for discounted or free product. Free trial packages. Cash discounts or refunds. Contests that give back cash, prizes, or products. The commitment by marketers to consumer promotion is that this form of promotion can be designed to be very measurable. Coupons, contests, and packaging can be coded to report redemptions and to report sales increases and/or decreases related to consumer promotion. Additionally, packaging new products as a trial, with a mature or declining product, can often provide an opportunity to up-sell and extend the declining product’s life-cycle.
Public relations (PR) is another common promotion tactic. Public relations includes writing and distributing press releases (to the local newspaper, the national newspapers, to online PR sites, to radio and television, to magazines, and more). The key for effective PR is to identify and understand your target audience, the key message or messages you want to deliver, the credibility of your organization, and the recognition that PR is not a sales tactic but an identity (whether corporate, brand or product) building tactic.

The most effective promotional program is usually one that uses a variety of tactics and techniques. It is important to measure the effectiveness of the program you engage in, and adjust your promotional program to increase effectiveness and outcome (sales).

The Benefits For a Company To Use a Recruitment Agency

Previously, when a company had a job opening, the business owner needed to undergo the time consuming process of advertising the job opening and then wait for the job seekers to come for the interview, hoping to get a hire before the day ends. Shortly after, the candidate you employed might probably not as capable or as efficient as what she, or he appeared.

Luckily, the current workplace has boosted the needs of employment agencies. They are known as a much better means to find the staff which you want, at the same time making sure that you will get merely the best and also the most efficient staff in the work force to fit your particular job opening needs. Listed below are some benefits of using a recruitment agency:

1. Help saves money.

Rather than paying extremely high prices to advertise on newspapers, or some other types of media in order to search for job applicants, and then spend extra money in human resources to filter many different resumes and candidates they obtain, a company can just pay for professional services of a recruiting agency to find the best capable staff which they require.

When you put the fees you spend on advertisements and human resources against the service fee you spend for on a recruitment agency, you will notice the amount of money you’ll be saving.

2. Ease of searching for employees.

A recruitment agency makes seeking employees much easier, since they select the staff, and filter them by using an intense interview as well as skill test procedure, they send merely the cream of the crop to you. You will not need to go through headaches after browsing through countless resumes and dealing with individuals that just appear capable on paper. Using a professional agency, you’re certain to obtain only the staff which you really require.

3. Help saves time.

Spending money on an agency fee allows you to reduce the amount of candidates that you’d get and have to screen though, in contrast to putting up numerous advertisements in various types of media. On the other hand, the aspiring career seekers that you’ll get are sure to possess the best skills that you will want for that particular job opening. Despite job opening advertisements whereby you need to go through almost every resume sent in. You simply need to select from the pool of applicants submitted by a recruitment agency that you’re given the assurance that they have got the expertise you require.

Mobsters, Gangs – Johnny "Dio" Dioguardi

If there was a way to make an illegal buck, Johnny” Dio” Dioguardi, called by Bobby Kennedy the “master labor racketeer,” had his sticky fingers in the pot. Dio was such a treacherous thug at a young age, in 1936, U.S. Attorney Thomas E. Dewey claimed Dio was, “A young gorilla who began his career at the age of 15.”

Johnny Dio was born Giovanni (John) Ignazio Dioguardi on April 28, 1914, on Forsyth Street in downtown Manhattan. Dio had three brothers: Frank and Vincent, who were legitimate guys, and Tommaso, or Thomas, who became, as did Johnny Dio, a capo in the Luchesse crime family. Dio also had an unnamed sister who can be identified only as “Mrs. Dioguardi-Priziola.”

Dio’s father Giovanni B. Dioguardi, who owned a bicycle shop, was murdered in August 1930 on a street in Coney Island, in what police called a “mob-related execution.” It seemed that the elder Dioguardi and another enterprising gentleman had robbed a rich lady of her jewelry, and the two men had were arguing over how to split the proceeds. The elder Dioguardi, who had been arrested twice for murder but never convicted, took six shots to various parts of his body, and it is presumed the other gentleman kept all the jewelry.

Johnny Dio graduated grammar school, but after less than two years at Stuyvesant High School, Dio dropped out and went to work for his uncle on his mother side: gangster James “Jimmy Doyle” Plumeri. By this time, the handsome Dio (who was said to have looked like silent movie star Rudolph Valentino) had already gotten a reputation on the Lower East Side as a tough youth, who terrorized street vendors into giving him a good portion of their wares for free. Uncle Jimmy Doyle (nobody called him by his real name Plumeri), recognizing Dio’s talents for thuggery, immediately put Dio to work as a schlammer (leg-breaker) in the Garment Center for Doyle’s Jewish associates Louie “Lepke” Buchalter and Lepke’s partner Jacob “Gurrah” Shapiro, who were affectionately known as “The Gorilla Boys.” Lepke, along with Albert “The Lord High Executioner” Anastasia, was the head of Murder Incorporated, a group of stone killers who murdered whomever the mob bosses in New York City and around the country said needed to be murdered. However, there is no proof that Dio ever joined that august group. Dio’s specialty was union-related extortion, and in that, he was tops in his field.

Dio and Doyle started a garment workers trucking association, whereby the truckers working in the Garment Center were forced to join the trucker’s union, headed, of course, by Dio and Doyle. If a poor sap trucker decided he didn’t want to join the union, a trip to the hospital was inevitable, if not a trip to the morgue. The union dues was hefty, but at whatever price they were forced to pay, it was a small price indeed to ensure the trucker’s continued good health. Of course, the “union dues” never made it into the union’s coffers (it went straight into Dio’s and Doyle’s pockets instead), and phony books were established to satisfy whomever decided to enquire about the trucker’s union’s financial solvency.

Members of the trucker’s union were even told where to spend their money and how much to spend on specific items. Dio and Doyle were pals with a local barber, and they ordered their truckers to patronized this special barber to the nifty tune of $2.50 a month. The truckers were also told where to buy their wine, where to buy their meats, and where to buy their clothing, and how much to spend on each item, which was certainly not at bargain prices.

For several years in the 1930s, Dio and Doyle, with nobody to stop them, had a sweet deal going for themselves in the Garment Center. Besides extorting the truckers, the dynamic duo of Dio and Doyle profited from the other end of the totem pole too. They forced the Garment Center’s clothing manufacturers (bosses) to employ only union truckers. Then they used the clout of their trucker’s union to bulldoze the clothing manufacturers into paying hefty off-the-books fees in order to keep their business up-and-running, and profitable.

If the clothing manufacturers refused to pay the extortion fees, Dio and Doyle would order their union truckers to go on strike, putting a dead stop to the clothing manufacturer’s cash flow. On occasions, if the bosses didn’t play ball, union thugs (schlammers) would break the bosses’ fingers, their arms and legs; and sometimes all three body parts on the same visit. In extreme cases, like if a boss threatened to talk to the Feds, Lepke’s Murder Incorporated boys would enter the scene, and seconds later, the chatty boss would exit the face of the earth, toes up.

In 1932 and 1933, Dio and Plumeri were indicted twice for extortion, but they beat the rap both times, because their victims refused to talk to the Feds. In 1934, Dio was lucky enough to be elected executive secretary of the Allied Truckmen’s Mutual Association, an association of employers. Even though Dio was boss of the trucker’s union, he represented their employers during a strike by 1,150 Teamsters in September 1934.

Nice work if you can get it.

However, in 1937, both Dio and Doyle ran out of luck. The nephew and uncle duo were indicted for extortion and “atrocious assault.” During the trial it was alleged that Dio and Doyle, and several other of their gangster underlings, had been extorting as much as $500 from each trucker. Plus, it was alleged they had forced the clothing manufacturers to add a hefty “tariff” to every suit, coat, and pair of pants manufactured in the Garment Center. This tariff went straight in the pockets of Dio and Doyle, and that increased the cost of good for the general public.

Sweet deal indeed.

According to an article in the New York Daily Mirror, “At the trial, frightened witnesses testified how recalcitrant employers and employees were beaten when they refused to pay. One man said he was confined to bed for two weeks after an assault. Another said the hoodlums had threatened to cut off his ears.”

Realizing they were dead in the water, during the middle of the trial, both Dio and Doyle pled guilty as charged. In return they received free room and board in upstate Sing Sing Prison for a period of three-five years.

After he was released from prison, Dio decided New York City was too hot for him, so he moved to Allentown, Pennsylvania, where he took up roots long enough to open his own dress manufacturing plant; non-union, of course. He later sold the plant, and to guarantee the new owners would have no trouble, Dio took $11,200 under the table to ensure that his erstwhile plant would remain non-union.

Dio sped back to New York City, and using the same tactics he had employed in Allentown, he set up a dress wholesaler. Using his profits from the business, Dio was smart enough to buy legitimate businesses, which included real estate and trucking. He also dabbled in the stock market, making him seem to the IRS as just another tax-paying citizen. But the New York City police knew better. They just couldn’t pin anything illegal on Dio, although they continued trying.

Back in his old Forsyth Street neighborhood, Dio decided to start a family. He married the former Anne Chrostek (a non-Italian). She bore Dio two sons (Philip and Dominick) and one daughter (Rosemary) who sadly passed away from an unknown illness. It was during this time that Dio, before the age of forty, was officially inducted into the Luchesse Crime Family, making him all the more untouchable on the streets of New York City. Even though they were only Italian on their father’s side, both of Dio’s sons eventually followed in their father’s footsteps into a life of crime. Philip Dio, who was called “Fat Philly,” was later inducted into the Colombo Crime Family, while Dominick, like his father, became a made man in the Luchesse Crime Family.

(Editor’s note: The Mafia rules changed around this time to allow more members to be inducted into the “Honored Society,” to fill the gaps of those who either were killed or sent to the can; “college” as the mob likes to call it. At this point, only your father (not both parents) had to be Italian for you to get “your button.” If your mother was Italian and your father a non-Italian — you were spit out of luck. Them’s the breaks.)

By the 1950’s, Dio had become a powerful captain (capo) in the Luchesse Crime Family, and with money pouring into his coffers in bundles (he allegedly earned $100,000 a week), he started living the life of a colonial baron. In the early 1960s, Dio moved his family into a spacious estate out on Freeport, Long Island, which cost Dio $75,000 in cash (Dio didn’t like banks or bank loans). During the week, Dio ate with his cronies in the best New York City eateries (his favorite being the trendy Black Angus Steakhouse). But, as is the Italian custom, Sundays were strictly for the family (famiglia). Inviting family member and close friends, Dio was proud of the fact he was an expert cook and was personally able to conjure up the best Italian delicacies to delight his guests. Dio was especially gracious to his wife, whom he loved dearly (unlike most mob men, Dio was faithful to his wife). Instead of personally buying his wife Christmas presents, Dio would give her a shoe box stuffed with cash, with a little note saying, “Buy yourself some nice clothes, honey.”

During the 1950’s, through his connections with New York City Teamster leaders Martin Lacey and John O’Rourke, Dio became tight pals with Teamster big-wig Jimmy Hoffa. Dio and Hoffa first met in a secret meeting in a New York City hotel room, and Hoffa, who had hoped to unseat Teamster President Dave Beck, figured Dio, with his union background, would be the perfect person to become chums with. In late 1955, Dio was able to obtain charters from the Teamsters to set up seven Teamster locals, called “paper locals,” because they did not have actual teamsters as members. The roles were filled with Dio’s relatives and pals, and their vote for teamster president was in Hoffa’s back pocket.

Dio’s modus operandi for more than 30 years was this: control the unions, then use the unions as a sledgehammer over the heads of the bosses. Dio would tell the bosses, “Pay or my boys will strike.” The bosses always paid, the workers always got screwed, and Dio made out like a bandit every time.

During his illustrious criminal career, Dio controlled the unions to the detriment of its members to such an extent, that during the 1950’s McClellan Committee hearings into organized crime, the committee issued the statement, “It cannot be said, using the widest possible latitude, that Johnny Dioguardi was ever interested in bettering the lot of the workingman.”

Famous Mafia turncoat Joe Valachi owned a dress factory on Prospect Avenue in the Bronx for 12 years. Valachi once said, “I never belonged to any union. If I got into any trouble, any union organizer came around, all I had to do was call Johnny Dio and all my troubles were straightened out.”

However, in 1956, as the Teamsters elections neared and they were scheming for control, both Hoffa and Dio had a stone in their shoe, and his name was syndicated newspaper columnist Victor Riesel.

Victor Riesel was born on March 16, 1913 on the Lower East Side to Jewish parents in a mixed Italian/Jewish neighborhood, not far from where Dio grew up. Victor’s father, Nathan Riesel, was very proactive in union activities and was instrumental in creating the Bonnaz, Singer, and the Hard Embroiderers Unions. In 1913, he also helped organized Local 66 of the International Ladies Garment Workers Union, and soon he was elected secretary-treasurer of that union, then finally president.

When Victor Riesel was a young child, his father taught him how to make union speeches, which the young Victor fiercely gave at union meetings and at outdoor union rallies. Nathan Riesel was hard-line anti-communist, and he was strident in preventing the communists from infiltrating his locals. Victor saw his father return home many times, beaten and bloodied from fights he had with communists activists, or the mobsters (schlammers) who were hired by the factory owners to break up union strikes that Nathan Riesel had participated in. This formed the notion in Victor Riesel’s young mind that gangsters were the bane of legitimate unions.

In 1926, Nathan Riesel moved his family to the Bronx, where Victor attended and graduated with honors from Morris High School. While in high school, Riesel began working as an “stringer” for several newspapers throughout America. His writings were mostly about the labor movement in the United States, and how they were hampered by a “gangster element,” who sought to play both ends of the spectrum by infiltrating the unions, then working for the boss manufacturers to physically quell any union strikes or demonstrations. In 1928, Riesel enrolled in night classes in the City College of New York City (CCNY), where he took courses in human resource management and industrial relations. To support himself while attending night school, Riesel worked at strenuous jobs, both in a steel mill and in a saw mill. While in college, Riesel also worked as a columnist, then as an editor on the student newspaper. Besides writing columns on the labor movement, Riesel also wrote columns on varied subjects like literature, and the theater.

While in college, to get needed experience in the outside newspaper world, Riesel took a job as a general office boy at The New Leader, a political and cultural weekly magazine that was both liberal and anti-communist. Riesel cuts his teeth in the business by doing anything his bosses at the newspaper told him to do, including sweeping the floors, and writing columns for the newspaper. In 1940, after 12 long years of hard work, both in and out of school, Riesel finally earned his Bachelor of Business Administration from CCNY. He was offered the job as the managing editor at The New Leader, and he took the job with the determination of ridding the unions of “gangsterism.”

Riesel caught his first big break, when in 1941, he was hired as a columnist for The New York Post. In the 1948, when the Post changed management, Riesel switched to the New York Daily Mirror, owned by newspaper magnate William Randolph Hurst. By 1956, Riesel’s column was syndicated in 193 newspapers throughout the United States. In that same year, Riesel began working in conjunction with United States Attorney Paul Williams, with the expressed purpose of taking on the gangsters who ran the New York City garment and trucking unions.

This was a double whammy for Johnny Dio, who was heavily involved in both unions, and for Jimmy Hoffa, who was trying to unseat Dave Beck as head of the Teamsters.

On April 5, 1956, Riesel was asked to be a guest host on Barry Gray’s WMCA overnight radio talk show. Riesel had recently been on a rant in his columns concerning the International Union of Operating Engineers and its President William DeKoning Jr., who Riesel claimed was conspiring with known labor gangster Joseph Fay to reinstall DeKoning’s father William DeKoning Sr. as the president of the union. DeKoning Sr. had just exited the can after being imprisoned for extortion, and Riesel felt that having the senior DeKoning back as president of the union would be a downright disaster.

As a result of his columns on both DeKonings and Fay, Riesel received numerous death threats. However, Riesel shrugged them off, knowing only a fool would hurt an esteemed member of the press. Doing so would certainly result in the law coming down hard on all union racketeers, and their rackets.

On this particular radio show, Riesel invited two members of the International Union of Operating Engineers, who were challenging the DeKonings for control of the union. This did not sit too well with Johnny Dio, or with Jimmy Hoffa, who both figured Riesel would go gunning for them next.

Gray’s show originated at Hutton’s Restaurant on Lexington Avenue and 47th Street. After the show, which ended at 2 a.m., Riesel and his secretary moseyed over to Lindy’s restaurant, on Broadway between 49th and 50th Street, to grab a bite to eat and drown the food down with hot steaming coffee. (Ironically, this was the same Lindy’s Restaurant in front of which small-time gambler Herman Rosenthal was shot to death in 1912.)

At approximately 3 a.m., Riesel and his secretary emerged from Lindy’s and started walking toward the secretary’s parked car on 51st Street. Riesel wore his eyeglasses to work, but when he was out in public, for appearances sake, he normally removed his eyeglasses. Just as Riesel and his secretary neared the secretary’s car, Riesel took off his eyeglasses, put them in an eyeglass case, and inserted the case into the breast pocket of his overcoat. Suddenly, a tall, thin man, wearing a blue and white jacket, sprung from the shadows of the Mark Hellinger Theater and flung a vial contain sulfuric acid into Riesel’s eyes, rendering Riesel blind for the rest of his life. Then the assailant calmly walked away and disappeared into the night. Thereafter, Riesel wore sunglasses to shield the public from the sight of his severely disfigured eyes.

The day after the attack, the Daily Mirror offered a $10,000 reward for information that led to the capture and conviction of Riesel’s assailant. The Newspaper Guild of America, the New York Press Photographers, the New York Reporters Association, and the Overseas Press Club chipped in with another five grand. In less than a week, donations from assorted groups, including the labor unions and radio station WMCA, had raised the reward total to $41,000.

With tips coming in in droves, some reliable, some not so reliable, in August of 1956, the FBI ascertained that Riesel’s assailant had been small-time hood Abraham Telvi. The only problem was, Telvi was now deceased; apparently murdered on July 28 because he had demanded another $50,000 on top of the paltry $500 he had already been paid for throwing the acid in Riesel’s face.

On August 29, Dio was arrested for conspiracy in the Riesel attack. Dio pled not guilty and was released on $100,000 bond.

On October 22, Dio’s pal Joseph Carlino pled guilty to hiring Telvi to attack Riesel. Carlino implicated two other men, Gandolfo Maranti and Dominick Bando, as accomplices in hiring Telvi. Carlino also said that Dio had ultimately given the order for the attack. Dio lawyered up with a top New York City mob attorney, and his attorney was able to get Dio’s trial severed from the trial of Maranti and Bando.

At their trial, both Maranti and Bando verified Carlino’s assertion that Dio had engineered the attack against Riesel. Maranti and Bando were both found guilty of conspiracy. But their sentencing was delayed until after the Dio trial.

Dio’s attorney was able to delay his trial for almost six months, and during this time Maranti and Bando began to have bouts of memory loss. When Dio’s trial finally commenced, both Maranti and Bando recanted their testimony, and with no corroboration of Carlino’s claim that Dio ordered the Riesel attack, all charges against Dio were dropped. Maranti was given 8-16 years in prison, and Bando 2-5 years in prison, and another 5 years for contempt of court. Amazingly, Carlino received a suspended sentence for aiding the law in the convictions of Maranti and Bando. However, no matter how the situation was cleared or not cleared up in court, Dio has forever been remembered as the man who “blinded Victor Riesel.”

In October of 1956, Dio was indicted, along with several Teamster officials, on extortion and conspiracy charges. The indictment said that Dio had extorted money from New York City Garment Center truck drivers, and had also extorted money from Garment Center manufacturing bosses not to have the same truck drivers go out on strike. Also included in the indictment was the alleged extortion of New York City stationery store owners, whose stores Dio’s men had picketed. The store owners were allegedly told that if they wanted the picketing stopped, they would have to force their employees to join Teamster Local 295, and hire Johnny Dio’s “labor consulting” firm, Equitable (not) Research Associates, for a $3,500 retainer, and $200 a month salary.

Because Dio’s attorneys were so adept at stalling tactics, and the fact that key government witnesses had recanting their testimony, Dio’s trial did not take place until November of 1957.

The trial took four weeks, but when it ended, Dio was convicted as charged and sentenced to two years in prison. While in prison, Dio was indicted again on extortion charges. This time, instead of the victims being stationery store owners, they were the owners of electroplating shops. In 1958, Dio was convicted again, and this time the judge threw the book at Dio, sentencing him to 15-30 years. Dio began serving his time in Sing Sing Prison, while appealing his sentence. On June 23, 1959, an appeals court inexplicable overturned the decision in Dio’s trial, saying that since Dio didn’t issue the threats personally, he should not have been convicted of extortion. A split court ruled, “Extortion cannot be committed by one who does not himself induce fear, but who receives money for the purpose of removing or allaying pre-existing fear instilled by others.”

Jonathan Kwitney said in his book Vicious Circles, “The decision seemed to legitimize the whole purpose of the Mafia.”

However, the law was not finished with Johnny Dio. On June 24, 1959, one hour after he finished his two-year bit on the first extortion charge, Dio was pinched by the Feds and charged with income tax evasion; for non-payment of taxes for three dress manufacturing companies he owned (non-union, of course), and two labor union locals. Dio went on trial in March of 1960. He was found guilty and was sentenced to four years at the federal prison in Atlanta, Georgia. Dio was released in March of 1963, partially on the basis that he had obtained a real job in a legitimate industry. Dio claimed he was now a salesman for Consumers Kosher Provision Company, another sham job that provided Dio the opportunity to do what he had done in several other industries before. This time it was the kosher meat business that would pay the piper for Dio’s Machiavellian machinations.

At first, the scam worked like a charm. Dio and a bunch a his mobster buddies separately approached two rival kosher meat companies and convinced both of them that their business would be ruined if they did not hire their group of thugs to fight back against the other company’s group of thugs. The two competing companies were the Consumers Kosher Provision Company, run by a dupe named Herman Rose, and the American Kosher Provision Inc., who had employed mobster Max Block (he had just been forced to resign as head of the butcher’s union) to make sure other mobsters didn’t try to shake down American Kosher. Block’s muscle was provided by Genovese thug Lorenzo “Chappy” Brescia, who had been extorting the butcher’s union for years. According to Vicious Circles, Block was receiving an annual salary of $50,000 a year from American Kosher, and Brescia’s cut was $25,000 a year.

This is where Dio began working his magic in the kosher meat business. Through two intermediaries, Dio approached Herman Rose and convinced Rose that in order to compete with American Kosher, it was imperative Rose hire Johnny Dio to protect his interests. Rose figured this was the right thing to do and he hired Dio at the salary of $250 a week; not an exorbitant amount of money. But it gave Dio the appearance of an honest job, and it gave the Mafia the opportunity to control the prices in the two top kosher meat companies in the area. (This is why, overnight the price of kosher meats skyrocketed.)

After Herman Rose died in 1964, Dio convinced the Kleinberg family, which owned the majority of stock in Consumer Kosher that it was good business to merge with American Kosher. The Kleinbergs, trembling in their boots, agreed with Dio’s assessment, and with the mob running both companies, the “bust-out business” in the kosher meat industry began in full throttle.

Soon, Dio and his pals, using their usual tactics, began scooping up, and creating from scratch, other small kosher meat companies. Stock was transferred back and forth between the companies, and so were the assets, which included the kosher meat itself. First, Consumer Kosher went bankrupt; then did American Kosher. The other Dio-controlled companies started acquiring the meats (that had not been paid for), and one by one, they too declared bankruptcy, only to be acquired by another sham company owned by, what the newspapers called, “The Kosher Nostra.” The suppliers of the meat out west, because of the multiple bankruptcy proceeding, were stiffed of their meat payments. According to New York Post reporter Marvin Smilon, one of these meat providers had the temerity to ask one of Dio’s meat cronies, “Why do we have to deal with Dio?” He was told, “Sit down and be quiet. You ask too many questions.”

But all good things must come to an end. In 1966, Dio, along with four of his associates, were indicted for “bankruptcy fraud.” In 1967, they were all found guilty, and Dio was sentenced to five years in prison. However, with his high-powered attorneys working their magic, Dio was able to stay out of prison for almost four years. This gave Dio the extra time he needed to work another scam, called “The Great Mafia Bagel War.”

It started with Ben Willner, who had a machine that could make automated bagels, for around 50 cents a bagel, whereas a hand-rolled bagel cost about 65 cents to produce. This was not good news for the Bakery and Confectioners Workers Union, because it put their member’s jobs at risk. Willner was great pals with Moe Steinman, who didn’t care too much how the bagels were being made, because he had a stranglehold on bagel distribution, not bagel production. Willner ran to Steinman, and Steinman, hoping to help his pal out, introduced Willner to Johnny Dio, whom Steinman knew was an expert at “labor-related problems.” Dio helped out Willner, for a piece of the pie of course, and soon Steinman was packing his supermarkets with anywhere from $3,000 to $4,000 worth of Willner’s bagels a week.

The only problem was that Genovese Crime Family capo Thomas “Tommy Ryan” Eboli had his own bagel maker, who was being short-changed because of the Willner/Dio/automated bagel-making machine trio. This man was named Arthur Goldberg and he ran to Eboli, screaming. Eboli demanded a sit-down with Dio, who had been with the Luchesse Family for more than 30 years. At the time, in the New York City Mafia pecking order, the Genovese Family was much more powerful than the Luchesse Family, and Dio was effectively pushed out of the bagel business for good. Dio broke the bad news to Willner, and as a result, in December of 1969, Willner was forced to close shop. This led to the Eboli/Goldberg crew taking over Willner’s business, and his automated bagel-making machines.

Dio felt bad about losing his bagel scheme, but he felt even worse, when in November of 1970, he ran out of appeals and was forced to go to prison for a five-year stretch at the federal prison at Lewisburg, P.A. on the bankruptcy fraud charges. (He did not Pass Go, and he did not collect the customary two hundred dollars.)

In 1972, while still in prison, Dio was indicted again, this time for stock fraud, concerning the At Your Service Leasing Corp., a luxury car leasing firm that did most of its business with organized crime figures. It was alleged that in 1969, before Dio went to prison, Dio, along with Carmine Tramunti, Vincent Aloi, and Michael Hellerman, “floated” $300,000 of false stock in the car leasing company. Dio’s group then either bribed, or forced security dealers to sell the stock, and then turn over the money to the Dio investment group. The jury found Dio guilty, and he was hit when a knockout blow when he was sentenced to nine and ten-year prison terms, to run consecutively. Dio appealed his convictions twice, but he lost both appeals.

Johnny “Dio” Dioguardi never was a free man again. Dio died on January 12, 1979, in a Pennsylvania hospital, where he had been transferred to from federal prison. To add insult to injury, Dio was scheduled for parole in just a few short months.

The news of Johnny Dio’s death did not receive an inch of space in any of the New York City daily newspapers, even though a paid death notice appeared a few days after his death in the New York Daily News.

It was as if Johnny Dio, a gangster’s gangster if there ever was one, had never existed.

Internet Promotion – Advantages and Disadvantages

The emergence of globalise trade, increase in foreign investment and cross-border transactions have put many small businesses under pressure to find innovative ways to continue to market their products and services. This is especially difficult given that they often operate on tight marketing budgets.

In the quest for cheap marketing alternatives, these small businesses continue to use conventional marketing tools such as newspaper, magazine, radio and television advertisements, unaware of the advantages that Internet Promotion offers. All too often, these entrepreneurs focus on the disadvantages of Internet Promotion and fail to adequately take advantage of the opportunities that it presents. Moreover, their preoccupation with conventional marketing strategies is driven by a misconception that these are cheaper than Internet Promotion.

To most small business entrepreneurs, marketing or promoting their products or services via the Internet can be a daunting task. However, with adequate information small businesses can benefit significantly from Internet Promotion while minimising the disadvantages that it presents. In fact, it may prove to be the marketing strategy that generates the highest return on investment.

The Advantages

Cost Effective and Enduring Marketing Strategies

The Internet has become the information superhighway for the buying public. Most persons prefer the hassle free transactions that Internet shopping can offer. As a result, the Internet has become the most powerful selling tool. Internet Promotion offers cost effective ways for small businesses to enhance their product or service distribution networks. For example, the use of portals can help create new marketing channels and logistics, or provide better or faster product access for customers.

In comparison to other forms of marketing, Internet Promotion presents the advantage of reduced budget and storage costs, when compared with printing brochures, producing television or radio advertisements or managing a call centre. It presents a fast and cost effective option for penetrating new markets.

Market Penetration

With millions of person using the Internet to search for products and services, small businesses can penetrate other markets at a fraction of the cost of traditional marketing methods.

Websites act as virtual storefronts, allowing businesses to stay open 24/7. Internet Promotion gives a business greater visibility, thereby creating more opportunities for increasing its customers at relatively low cost. Never before has it been easier for an upstart business to be able to reach out to literally millions of potential customers and to position themselves for success, without the need for costly infrastructure and overwhelming marketing costs. Thanks to the Internet, new businesses can become popular almost overnight.

Low Cost, Instant Communication

Email makes business communications instant, whether the customer or business affiliate is across the street or across the globe. It makes it easier for customers to maintain contact and readily facilitates repeat purchasing. An effective online strategy can therefore turn a small web business into a virtual cost saver and income-generating machine. The net result is that the small business can gain significant competitive advantage in a given market.

Many online businesses have therefore resorted to the use of ezines, blogs, pop-up ads and other online marketing tools to let customers know about new products or services as well as provide information relevant to their respective industry. The benefits of this strategy are two fold. Marketers can effectively heighten brand awareness for relatively new products on the market whilst strengthening customer relationships, with shorter time frames.

Content is Timeless

Internet Promotion also provides the advantage of being enduring. Whereas participation at a trade fair or conference loses sales impact, once it is over, and an advertisement in a newspaper or business magazine may quickly lose its sales generating value within a day or two or as soon as the next issue is released; Internet Promotion is often timeless. Apart from the dates and sometimes prices, much of your website content remains valid years after.

Real Time Statistics For Measuring Success of Promotion Campaign

One of the most significant advantages of Internet Promotion is that its success is measurable. Marketers can use tools that provide real time statistics, on unique visitors, repeat visitors, click through rates (CTR) on advertisements, thereby allowing them to evaluate the effectiveness of a promotion campaign. This enables marketers to determine what works for their particular market and to make timely changes in their marketing strategies.

Time Saving

Another important advantage of Internet Promotion is that it saves time since it generally does away with counselling on product uses and benefits, service information and sales administration. Visitors can access “frequently asked questions” to help themselves, and can buy online, without the involvement of staff. This saves time and money. So, whether 10 or 10,000 visitors visit the site, the increased cost is marginal whilst the savings can be immense.

But like any business approach, Internet Promotion is not without its risks and weaknesses.

Disadvantages

Difficulty in Attracting Customers

Small business may not have the resources to pay for paid directory inclusion, pay per click inclusions and often have to rely solely on search engine optimisation or word of mouth to drive traffic to their sites. With millions of businesses selling the same product and services, competing with more established businesses can be frustrating and costly venture for small business.

On the other hand, larger companies can offer promotions, pay for directory inclusions, implement pay per click campaigns as well as employ the “who is who” in internet marketing to develop campaigns that generate traffic and leads.

Difficulty in Evaluating Legitimacy of Transaction

Another notable disadvantage of doing promoting businesses online is that it may be difficult for the businesspersons and consumers to thoroughly evaluate the legitimacy of a transaction. Small businesses are particularly vulnerable to thieves using stolen credit cards and stolen information to do online transaction.

With Internet credit card and identity fraud on the rise, small businesses are forced to finance costly security measures to reduce their vulnerability to fraudulent transactions.

Salespersons and Customers are Isolated

Another disadvantage of promotion via the Internet is that the customers and businesspersons are isolated. There is little personal contact between customer and salesperson prior to and after the sales is closed. Thus, the prospect for repeat sales may thus be diminished. Entrepreneurs are therefore compelled to adopt marketing strategies to drive online users back to their site.

From all indications, it appears that the advantages of Internet promotion, far exceed the disadvantages. With adequate knowledge, entrepreneur can benefit significantly from Internet promotion, especially small business owners.

More and more, the growth and outreach of the Internet’s, its ease and accessibility for customers is becoming inevitable. Small business would therefore be well advised to start their web advertising function in order to improve their competitiveness online.