Can countries benefit from having their domestic firms acquired by foreign companies?

When a foreign company acquires a domestic firm, it often leads to outcries of indignation, nostalgia (“another of our once great companies in foreign hands”), and calls for legislation to prevent any more foreign poaching. Politicians and union leaders proclaim that the foreign owners may not be dedicated to keep up investment in the subsidiary, and that the take-over threatens national jobs and other economic interests. “Most governments are reluctant to see their corporate treasures fall into foreign hands”, the BBC wrote in an article devoted to the topic.

But is all this (slightly xenophobic) fear justified? Well, maybe not; at least not on all dimensions. Because we have increasing evidence that foreign ownership of a firm may actually also benefit firms, specifically in terms of their innovativeness. And this increased innovativeness may clearly benefit the host country.

Professor Annique Un, from Northeastern University in Boston, for example, did a pointy study. She collected data on 761 manufacturing firms operating in Spain, examined which ones were foreign hands and what their innovation output was in terms of new products introduced in the market. And the answer was pretty clear: foreign owned firms were more innovative than purely domestic firms.

Interestingly, Annique also corrected her models for the amount of R&D investments spent in the companies, and it turned out that this was not what was driving it; foreign owned companies were not just more innovative because they were investing more. Instead, they were more innovative irrespective of R&D. As a matter of fact, they were able to generate more product innovations for the same level of investment; meaning that they were simply better at it.

The study’s results suggested that they were better at it for two reasons. First, foreign parents seemed to use their domestic subsidiary to channel innovation into the country. Put differently, it seemed a foreign-owned company could tap into its parent’s superior repository of innovative stuff, and most of them gratefully made ample use of that option. Secondly, the foreign-owned companies were simply also better at coming up with new stuff on their own, in comparison to their domestic counterparts. Apparently, something about them being foreign-owned stimulated them to be more agile and creative, which resulted in more product introductions.

Whatever the reason behind this foreign-driven surge in innovation, the host country was better off for it; the evidence clearly showed that the foreign mercenaries stimulated diversity in the markets, giving customers more choice, while raising the bar for everyone. And this is not a benefit we hear many politicians, newspapers, and union leaders proclaim and acknowledge, when yet another foreign corporation is eyeing up their country’s corporate treasures.

New Ottoman

So I totally fibbed yesterday:o) I said that the creative bug wasn't there. I said that I might pick something up next week....well next week turned into today:o)

This is what I did today.

In the words of my dear grandmother, "itn't that purdy." 

Being from the South, most of us say itn't instead of isn't..sad but true:o)

Anyway, this is what the ottoman looked like before:

Yep, that's a coffee table. One that has seen better days. My neighbor is an avid yard saler as well, and I told her that I was on the hunt for a round coffee table to turn into an ottoman. She definitely came through for me. She found this little beaut for $10.

I couldn't find anywhere in town that had foam thick enough and wide enough to cover the entire coffee table, so I bought 4 foam cushions from Hobby Lobby. I used spray adhesive to attach the cushions to one another and then laid the coffee table on top of the foam and traced around the edge of the table. Then the hubs and I used a reciprocating saw and cut the foam.

I didn't take any pictures of the step by step process..sorry. I was so excited about getting a project done, that I just flew through it without a second thought. 

The fabric is painter's canvas from Lowes. I did use some piping around the edge just to give it a more finished look.

 This ottoman has 5,003 staples in it....well I am not exactly sure how many staples to be exact, but there are several:o) I laid the fabric across the top of the foam and stapled it to the skirt of the coffee table(the wooden skirt that is). I then added the piping..stapling it to the underside of the top of the table. Then I added the ruffled skirt, stapling it to the underside of the top of the table as well.  

 This project took 1 hour to complete, with very little sewing and a whole lot of stapling.

 How successful do you think I will be keeping the kids and the hubs off of it??? My thoughts EXACTLY!

 At least we can all look back at these pictures and see what she looked like before being introduced to the rest of the family:o)

I hope you all have a great Wednesday! 

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A Cookie Recipe You Must Try

A friend of mine made these cookies the other day. 

She found the recipe HERE.

I ate 4 in the span of 30 minutes....yes, they are that good!

These are perfect for fall. I can't wait to make these for my next gathering! Now all we need is for the fall weather to come back...it's hot again, but that's part of the beauty/ugly (depending on how you look at it) of living in the deep South:o)

Speaking of weather, I have a little man who is under the weather right now, so things around here are slow going.

Not much in the crafting arena right now either. I haven't had the energy nor the desire. I am hoping to get the crafting bug after this week. We have so much going on this week that there really isn't time to be creative.

Praying for E to feel better, so he can enjoy the rest of the week with us!

Have a good evening, ya'll.

How to Destroy Your Customer Base and Investor Confidence

Netflix used to have a charmed life.

This year, however, poorly thought out strategy and lurching decisions are stripping away many of its advantages and making it vulnerable to competitors.

Established in 1997, its founders saw opportunities in creating an Internet-based DVD-by-mail distribution system. It was designed to be a competitor to physical video stores, making it more attractive by offering a larger selection and using a unique IT driven distribution system that combined distribution centers across the country to serve customers within 24 hours at highly attractive prices.

The DVD-by-mail service became a hit, ultimately devastating the market of physical stores such as Blockbuster. By 2007 it had delivered more than 1 billion DVDs to customers. That same year it launched on-demand video streaming service so customers could also select a video and stream it to a PC (and later other platforms) for immediate viewing. The company allowed viewers a highly popular choice of physical DVDs or streamed video for the same price.

Effective marketing and the enviable distribution system led the company to became the largest video subscription service in the U.S., with 24 million customers

Despite--and because of the investments required for--its growth, the company was losing money on its $10 per month price for the joint service, so it suddenly increased it price to $16 dollars (a 60% increase) in July. That significant price change and the poor way it was introduced to customers—especially in the midst of poor economic times, angered customers and created price resistance that led a least a half million to drop the service.

Then, in September, the firm announced it would spin off its DVD-by-mail service and rebrand it Qwickster, leaving Netflix with the digital streaming business. Customers were furious to learn they would now have to pay separately for both services. By downplaying its DVD-by-mail business, the company hopes to reduce distirbution costs and its costs for content by moving content from a per rental basis to per subscriber basis that is more beneficial for the firm.

Netflix's decisions were not made with a customer focus, but a focus on stemming losses that worried some investors. That strategy is dubious, however, and share prices have fallen from nearly $300 per share in mid-summer to $140 per share.

The lurching changes have also made the company’s position seem vulnerable, leading to new competitors to enter the market. Dish Network, which bought Blockbuster out of bankruptcy, is now using it to introduce a competing DVD-by-mail and digital delivery services at competitive prices and Hula and Amazon are reportedly looking a ways to exploit consumer dissatisfaction.

The entire episode is a classic example of why companies should never take customers for granted and why company decisions need to be driven by creating--rather than subtracting--value for consumers.

E's 5 Today!

Five years ago today, this little bit of joy blessed our lives immensely.

I can't believe how quickly these past 5 years have flown by.

He is the sweetest, kindest little soul.

You can't help but love him.

Little did we know that when God gave us him, He gave us a little peace of heaven.

Happy Birthday E! 

Mommy, Daddy & S.R. love you! 

Thought this was Great!

I saw this on Pinterest today and thought it was great! Yes, I jumped on the bandwagon...I may be jumping ship though, b/c I may never get off of the computer!!

Super Hero Birthday Party

Here it is. The Super Hero Birthday party for E. I'll try to let the pictures do most of the talking:o)

 I made the cake...in a hurry. I wasn't as happy with this one as I was with the Barbie cake I made for S.R.'s party.

Table scape for the boys.

Table for the girls.

A shot through the web.

 Party favor table

 Each of the boys got to take home a lunch box, plate & cup(not pictured) along with a book & Spiderman comic book.

 This is what was inside of the lunch box. I found these in the dollar section at Target the other day and they were half off.

Construction of the Bat Cave. The hubs and my daddy did a great job.

 Fishing line, tacks and black plastic table cloths made the Bat Cave. The kids got a kick out of it. We had the lights off when they walked through it.

Here were some of the games. To get the posters, visit designergirl007 at Etsy.

 Here were some of our villains...Doc Oc

 Lex Luthor...for some reason I thought his name was Max Luther and I couldn't find a picture of him:o) Go figure!

 and the Joker

A little pre-party fun with my sis.

 Here's the arrival of Batman....HUGE hit!

 Back to the games....vaporize the villains was the favorite game of the day. 

 The villains didn't make it:o)

Once the Super Hero Academy was over, Batman signed certificates and handed them out to each of the new Super Heroes.

 He also gave everyone a Bat-a-rang.

I'd say this was one happy little man!

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