See Jonathan Kalkan test drive a Ferrari 599 GTB during the group's visit in Italy! http://www.youtube.com/watch?v=QZh80AkoYRI&feature=youtube_gdata_player
What would anyone want to do on his or her last day in Roma, Italy? Well, I am sure there are tons of different ideas you can come up with. For example, you could take a 45-minute bus ride to the Mediterranean Sea, visit the Coliseum one more time, or see some of the other many famous local sights in the city. These ideas, as well as many other ideas, are all probably the best way you would want to end your last day in Roma. As for our group, we took a different approach to our last day.
Today we had the amazing opportunity to go visit the PricewaterhouseCoopers accounting firm. We received a great presentation from John Hodge, senior manager of the audit department, who was assisted by his co-worker Ava. PwC prides themselves on their network being the world’s leading international organization providing professional services to businesses. In Italy, PwC has 3,0 employees, 131 partners and 17 offices. Their graduate intake in 2010 was 150 graduating students, as well as taking in 10 experts. PwC’s services to their clients include: auditing, advisory, and tax and legal. In the audit section, PwC assists in the transaction to IFRS and financial reporting review and assistant. Advisory includes IPO services (assistant in the quotation), corporate transaction support and financial reconstructing towards debt. Tax and legal offers help in transfer pricing, labor laws, business and contract law, industrial and intellectual capital, banking and financial markets, and global compliance services. According to PwC, the challenges of doing business in Italy definitely have pros and cons compared to the U.S.A. In Italy, there is an individualistic culture, social graces, appearance, effective communication, negotiations, corporate culture, hierarchy, government realities, punctuality, business environment and women in the business. Everything in Italy, including the business, is family oriented and based on solid relationships and trust. These characteristics are vital for successful negotiations. The business environment hospitality plays a key role. In the sense that the host always pays, the most honored guest sits in the middle of the table, and hard drinking is not appropriate due to the fact Italians are not heavy drinkers. This knowledgeable presentation demonstrated that this is exactly what we have seen in the previous Italian companies, restaurants and stores we’ve visited.
After our knowledgeable visit, we had the rest of the day to explore the city of Roma one last time. We all took the time to go to the Vatican and try to get a sneak peek at the Pope. Even though our attempt to get a picture with the Pope failed, we enjoyed viewing the outside. Our farewell dinner was also especially delicious and enjoyable. We were served a four-course meal that was extremely amazing and satisfying to all our stomachs. When in Rome, you’re supposed to do as the Romans do, and we definitely ate like they would for sure. After our delicious dinner, we slowly made our way back to the hotel to start our excruciating packing. Trying to make all of my clothes and souvenirs fit into my suitcase was quite an experience. I can honestly say I can’t wait to be home to good ole’ Texas where we can all get a good steak, free refills on drinks, and ice in our drinks. Goodbye, Roma. Hello, TEXAS!!
Arrivederci, Italy. It has been a pleasure.
Can each week get better? Yes, it can! We've run out of fingers and toes to count on since we have visited over 20 companies and organizations. We've seen everything from Fortune 500 companies to small family companies, and they all have great stories of utilizing excellent business models and methods.
Different? Yes, they are different. Extremely low turnover rates for employees is one of the outstanding metrics that we have found. Strong and growing market position (market share) is another. But, the most noticeable strength is the area of quality. There seems to be an exceptional attention being placed on quality in these businesses.
There are cultural differences in human resources that are starkly different from our U.S. counterparts that stand out to us. Holidays (a full month each year), bonuses (equal to a couple of weeks to a month's pay) and training in foreign languages are just a few examples of what we have seen.
We look forward to our closing days and being able to share more details when we return home
The morning of day 18 on our excursion through Europe, or May 26, there was a noticeable excitement in the air. The excitement was not for the walking we were going to be doing, not for the company Gucci Group that we were going to visit, nor for the Coliseum visit. The excitement that people had was instead for the day that it was; we have made it to day 18, and in two more days we will be home. Do not get me wrong, this trip has been great, but the time to go home and see friends and family has been long overdue.
After leaving our hotel, getting on two separate trains and exiting the final train, we were greeted by the Spanish section of Rome an the steps of Trinità dei Monti. This area is similar to Via Monte Napoleone of Milan, because this is the fashion area of Rome. Stores here include Dolce and Gabbana, Dior, Prada, Versace and our place of visit, Gucci. Walking into the store, we were greeted with smiling faces and excited salespeople. Our group was divided into two, and we departed in our separate ways. My group went down to the women’s purses and bags section. Here, the two ladies told us about the symbols of Gucci and their history. Gucci started as a luggage company by Guccio Gucci, and his first design was the diamond pattern. The ladies then explained how it has evolved to their double G logo, the two color combination stripe (red, green, red) and bamboo. Listening to them talk, the symbols are the most important thing about the company. All products except for the watches are made in Italy. It is the pride behind Italian craftsmanship that keeps this tradition going. The only products not made in Italy are the watches, and these are understandably made in Switzerland.
With a store with such expensive clothes, most would be scared to go in the store, let alone try on clothes there. However, it is their policy to not misjudge people based on how they look. Service is important to them, and therefore anyone can go in and try on what they want and leave; it is not a problem if you do not buy anything. The store manager talked to us, and he encouraged us to try on anything we wanted.
From this visit, I could see the passion these salespeople had for their jobs. It was not just a job to them; the knowledge and services they provide to people go beyond a typical salesperson.
The last organized activity for the day was visiting the Coliseum. The Coliseum and the Vatican are the two most notable areas of Rome. Right when we exited the train station, we were greeted with a spectacular view of a large stadium, half withered by the elements and time.
After spending a few minutes just staring, Alessandra (our guide) took us on a tour and told us a lot of the history, most of which I already knew thanks to my watching of The Gladiator and similar movies and TV shows. I could make this blog even longer by telling you about how it is a Flavian Amphitheater, it could fit around 80,000 people, etc. However, just know this, it is a beautiful building that has stood the test of 2,000 years without restoration, and the engineering behind such a building so old is magnificent.
We also toured the Roman Forum ruins. Walking on the stone paths looking at remnants of buildings and thinking of all that happened right where we were walking touched me. Where we walked, the rulers of the world walked, and maybe some apostles as well. The pictures located in history books and online do not portray the whole topography that can be seen with the personal experience of visiting said places.
With the conclusion of day 18, it brings us one step closer to the final chapter in our “European Business Experience” trip. Only two more days left until we reach the States, and then home. It has been a long, stressful and at times exhausting trip, but it has been definitely worth it!
I cannot believe that our trip is so close to being over! Today, we traveled to the final city of our trip, Rome. Before leaving the historic city of Florence, we stopped by the General Electric plant there. After handing us a pair of very stylish safety glasses, a factory engineering leader gave us a tour of the factory. The Florence factory produces compressors and turbines that help distribute oil and transform gas. This factory uses the lean manufacturing process perfected by Toyota, which means any activities that do not add value are considered a waste. An example of this process is their assembly stations. Each station contains a compressor in a different stage of production, and the stations are right next to each other to eliminate time waste. After they are assembled, both the compressors and turbines are put under a variety of tests to ensure quality of the product. One of the more impressive parts of the tour included watching the workers use a huge crane to transfer a compressor from one station to another. I later learned that the cranes have the capability to carry anywhere from 50 to 100 tons.
After our tour, we learned more about the General Electric company in a presentation by the head of manufacturing and machining. GE has many different facets, but the presentation focused specifically on GE Energy. GE Energy comprises 25 percent of revenue for the company and makes up one-third of GE employees. The Florence plant in particular is involved with the Oil and Gas part of GE Energy. The plant was first established in 1842 with the name Nuovo Pignone. It started as a cast iron foundry and eventually started producing energy-related equipment. In 1994, the factory was bought by GE. Since then, GE has acquired nine other companies to help them gain a more global mindset in the energy business. These companies now work together to serve the oil and gas industry through completing different pieces of the production puzzle. The GE vision is to be closer to customers through integrity, a technology leader through quality, and a reliable partner through a culture of environmental health and safety.
After our informative visit, we had a couple hours of free time in the city center of Florence. Some possible activities included a last visit to the street markets, shopping in high-quality leather shops, taking pictures of the beautiful Duomo Cathedral, and, my personal favorite, some tasting at the annual gelato festival. When we had gotten our fill of shopping and gelato, we headed back to our comfy bus and started our 3-hour trip to Rome.
Today we visited Balsamico Vinegar Factory in the Modena region of Italy. This has been a family company that was founded in 1891 by Adriano Grosoli. Adriano originally opened a delicatessen, where he sold products that were all made by himself. These products consisted of salamis, cold meats, cheeses, Lambrusco wine and balsamic vinegar. Eventually the business was passed down to Adriano’s son, Mario. Mario held the same passion for creating quality products for their customers. As time went on, their family business gained a large amount of popularity. In 1972, Mario passed the business down another generation to Adriano. Adriano decided in 1974 that the family business would stop producing a wide variety of products and solely focus on the production and sale of balsamic vinegar.
Now the company is producing two main types of balsamic vinegar. The first type is the commercial kind, which is the one that most people are familiar with and the kind that you find in the grocery store. The second type is the traditional balsamic vinegar that is aged much longer and is more concentrated, so it is much sweeter and has a rich creamy flavor. The traditional balsamic vinegar is much more expensive due to the process being much more difficult - it takes more of the original ingredients to make a good amount of vinegar. The commercial vinegar is a mix of the must from the grapes and wine vinegar, whereas the traditional vinegar is purely must from the grapes. The must is created by taking the grapes that are required to make the balsamic vinegar, juicing them, and then proceeding to cook them to about 1/3 the amount of vinegar that was used to begin with.
The traditional balsamic vinegar must be aged a minimum of 12 or 25 years, depending on the version of the traditional vinegar desired. The commercial is not aged nearly as long. It can range from three years and longer. In order to make the traditional version of this vinegar, it must first be located in the Modena region. The specifications for the vinegar in the Modena region are the proper climate of the hot summer and the cold winter, the four grapes that are also located in the region, and lastly the barrels used to age the vinegar must be made out of wood from the local trees. The makers of the balsamic vinegar consider the it to be an “alive product,” due to the heat of the summer activating the fermentation process. During the winter, the workers transfer specific amounts of vinegar into smaller barrels. As the aging process goes on, the barrels get smaller, so that more of the vinegar comes into contact with the wood of the barrels and the product can absorb the flavor of the wood, which adds body to the vinegar.
Traditional balsamic vinegar must be made by hand and is not certified if it is produced in a factory. The commercial vinegar can be made in a factory and is made by using different ratios of the must from the grapes and wine vinegar. The more must in the balsamic vinegar, the sweeter and closer it will be to the traditional kind. The must for the commercial vinegar can be made using seven grapes from all around Italy. The last product that the company added was in 1995, when they began making organic balsamic vinegar. We closed our visit by tasting all of the different balsamic vinegar that they produce.
Today we went to the U.S. General Consulate and the U.S. Commerce Service. Honestly, I had no idea what the U.S. Consulate was. I figured that it was part of the government, which didn’t exactly thrill me to go and learn, but I tried to stay optimistic. I’m so glad I did! I never even imagined that I would have learned so much.
First of all, the U.S. Consulate offers a variety of services between the U.S. and over 70 countries. They help companies get the right clearance and approval to trade and do business with many other countries in the world today. Principal Commercial Officer Michael Richardson called this service the “matchmaking” branch of the government. They match up companies from the U.S. to different countries and parts of the world and vice versa. This was fascinating to me since I want to run a coffee shop someday. With Italy being the seventh largest economy in the world, this could be a possible place to open a franchise. And Italians love coffee!
We also learned a lot about the Italian economy. From the books, some would say that Italy is the next country to have a crashing economy. However, the opposite seems so. Italy has a few things against them economically. They have a low population growth and high debt, and they are slowly losing their competitiveness in the markets. They also operate mostly small- and medium-sized businesses. However, the cool thing is that these smaller businesses are mostly family owned and operated. While they may seem insignificant from an economical point of view, these are the businesses that are keeping Italy out of the red. The second thing that Italy has going for them is the high proportion of manufacturing jobs; so the jobs are there.
Italy has a few other things that seem to handicap, but also help them. One of the things that we talked about today was the “underground” economy. An estimated 30 percent of the GDP is made in black or gray economies. The good thing is with help from the U.S. Consulate, American companies have been able to help the Italian economy in many ways. Factors creating new opportunities include new regulations (often imposed by the E.U.), appreciation of the Euro, aging population and influx of immigrants. Italian strengths include design and innovation, U.S. technological innovation and emphasis on renewable energy.
This is how the U.S. Consulate has been able to rise to the occasion and get businesses to work with each other. Their mission is to promote the export of goods & services from the United States, particularly by small- and medium-sized businesses, to represent U.S. business interests internationally and to help U.S. businesses find qualified international partners. They offer companies advice and support from over 1,800 trade specialists in 105 U.S. cities and 158 international offices in 84 countries, extensive knowledge of markets and industries, a unique global network, inventive use of information technology, a focus on small and mid-sized businesses and the clout of the U.S. Government.
After having a nice weekend to explore the streets and sights of Milan, Italy, today we had the opportunity to experience a couple of businesses as well. Though it was somewhat difficult to get up early for some; today was rather insightful with visiting both the Casa Editrice Hoepli and the U.S. Consulate and U.S. Commercial Service. Maddie will be informing us of the happenings at the U.S. Consulate, but I have the pleasure of hitting the highlights of Casa Editrice Hoepli.
The first impression I had of Hoepli was that it was a bit unprofessional. After seeing places like Steelcase and Bossard with conference rooms and decent technology, going down to Hoepli's basement where extra books were being stored and chairs were tightly squeezed into a narrow hallway, I honestly did not have high expectations. However, it seems ironic that the saying “don't judge a book by it's cover” holds true for a corporation which publishes and sells books.
Our host, Giovanni Hoepli, took some time and told us about the company’s history. Beginning in 1870, the Hoepli family starting selling books. Mr. Hoepli informed us that his great-great-great-grandfather did so because Milan was, and still is, what is to be a considered a modern town and was quite successful. Until the 1930s, Hoepli was a very big business, holding anywhere from 10 to 20 percent of the market share. Unfortunately during the World War, the building was bombed twice, destroying not only the architecture, but also all the books and all the work done by Hoepli. Starting up in the 1950s, the third generation of Hoeplis decided to reopen the company and start small with a niche market. Today, though successful, Hoepli only holds 0.6 to 0.9 percent of the market share in Italy. This consists of 50 percent of what is called educational books, and the other 50 percent is in trading books. The educational books here in Italy seem a bit different than those in the U.S. Though they do have the typical books for mathematics and grammar and so on, Giovanni Hoepli described educational books as ones for teaching hospitality at hotels and even books containing information on how to be a proper brick layer.
After opening back up in the 1950s, Hoepli was a one-level building right in downtown Italy. Today, it is a six-story building with each story focusing on different styles of books. Each level almost functions as a shop on its own. Hoepli wanted to show us the format of the store both with and without customers around. It was neat to see the organization of the books on each floor; especially with no consideration of what the language the book is in but rather the topic. As a side note, Hoepli has 35 percent of its books sold in a foreign language. What I found more interesting was that they placed a high level on having employee satisfaction. When deciding what books to sell and who will be responsible for selling them, Hoepli focuses on making sure the book sellers have a passion for the topic. If they don't have a passion, it seems the books don't sell nearly as well.
Although it was short, we also took a small tour of the publishing portion of the company. With publishing around 160 new titles a year, these people work hard to create at least one new title every two to three days. I most enjoyed that this company was involved in everything from point A to Z. Logistics, distribution, promotion and e-commerce is all done within and by the company. It seems safe to say that we were undoubtedly happy with our visit.
Our journey from Zurich, Switzerland, was quite a long ride. Although the journey was long, we got to see some of the most picturesque views of the Swiss Alps. The sight of these mountains was simply breathtaking. After our 5-hour long bus ride from Zurich, we finally arrived in Milan, Italy! We were all definitely ready to get off the bus and get settled in to the Hotel Sant’ Ambroeus.
The hotel is beautiful inside and has the feel of an authentic and antique hotel nestled in the middle of Italy. We were somewhat surprised when we got to our rooms and discovered a randomly placed string attached to the wall in the shower. While trying to figure out how to turn the shower on, I pulled on the string. Little did I know, it was an emergency cord. Thankfully I was just washing my feet, so when my hotel phone rang, I answered it. To my surprise I found out my little string tugging notified the reception desk I was having an emergency. As soon as I explained my confusion, the situation was resolved. Thank goodness there were no Italian police or ambulances that showed up due to my mishap.
This morning we were guided through the heart of Milan to see the beautiful buildings that compose the city. Among the buildings were the Castello Sforzesco (Castle), the Duomo (Cathedral), the Teatro alla Scala (Opera House) and the Piazza del Duomo (Dome Square). The buildings were very decadent and gorgeous to look at. We spent the most time walking through the courtyard of the castle. Inside the castle are many museums with works of art by famous artists such as Da Vinci. Our walking tour was more of a “getting to know the city” tour, so we did not enter any of the museums. Instead, we learned about the architecture of the castle. Our guide explained the difference between the old facade and the new facade. The renovated part of the castle was built over a hundred years ago out of brick and the old facade was originally built with stone. In order to do maintenance on the castle, they created small shallow square cut-outs where the beams could be inserted for support. This resulted in the small holes seen in the castle facade, which many people speculate were created to shoot rifles out of for defense against enemies trying to invade the castle.
When we arrived in front of the Duomo, I was speechless. The building was absolutely gorgeous. It was different than the cathedral we saw in Strasbourg, not only in design, but in color as well. The cathedral in Strasbourg was a rusty brick color, but the cathedral here in Milan is a whitish gray color. The design was so intricate and elaborate; I was unable to stop staring at it. Our guide explained that the style of the cathedral was partially Gothic. The reason it was only partially Gothic was because the styles changed throughout the 300 years of construction. There were also many different architects working on the design of the cathedral, which created various styles choices. We were unable to go into the cathedral as a group because there are very strict clothing guidelines for entering the Duomo. Both guys and girls must have their knees and shoulders covered. It is disrespectful to enter the premises with either the knees or shoulders showing. There are guards at the door that inspect the clothing as guests enter to ensure that these requirements are met.
The tour proved to be very enlightening. It was a pleasure to get acquainted with Milan, and I look forward to spending the next few days here. I braved the street markets today, which proved to be well worth it as I came away with several good bargains. Tomorrow is a free day for us to explore the city. I am excited to go back out and tackle more sight-seeing and shopping again tomorrow.
Keep reading our blog! This is our last week in Europe, and I am sure there are many more adventures to come!
Today was our last full day in the beautiful city of Zurich, which was certainly not the little Swiss city I was expecting. After we traveled to Bossard AG, our group got to spend a few hours in the mountain city, Zug, which we learned means 'train.' Zug is a spectacular sight and one that all pictures, no matter the photographer, just do NOT do justice. After our free time was over, we took an hour bus ride to the Zurich Kloten Airport.
At the Zurich Kloten Airport, we were privileged to see the integrated maze that all baggage goes through after being checked. The Zurich airport has three check-in stations. Terminals A and B have their own baggage checks, and there is also a check specifically for people who come in on the train. The convenience of baggage checks is vital to the revenue of the Zurich airport, for one-third of all revenues come from the purchases customers make once in the airport.
From check-in, these bags begin on a journey that may take anywhere from 30 minutes to two hours. Part of Zurich Kloten’s sorting system is 35 years old, but has been equipped with the latest technology. While Zurich Kloten employs some older systems, they are the second airport to outfit their baggage transportation with magnetic technology from the Netherlands. This system consists of 800 magnets that pull blue carts along a track, along which the bags are sorted and fed to x-ray machines. The carts along this track move at speeds up to 36 km/hr. These magnets run from 4:15 AM until 11 PM and can reach temperatures of 80-90 degrees - and even after an evening of cooling off, these magnets have a temp of 40 degrees Celsius. We were told that Zurich Kloten has the ability to be the fastest airport in the world, as far as moving baggage is concerned. The main bag sorting center has four stations, which are able to move 1,200 bags an hour per station.
As bags are moved to a central location under terminal B, they are measured. While traveling through this maze of conveyors and carts, about one out of ten thousand bags get lost. The bags that get lost are usually too light and fly out of the carts when they reach high speeds. In this main building, after being measured, bags are scanned. There are three levels to the scanning process: levels one, two and three. All bags departing from the Zurich Kloten Airport are scanned in level one, which is just an automated scanner that takes pictures. These machines can identify 5,000 dangerous goods, and all bags with questionable items go through level two. Level two is where a person looks at the picture taken in level one, and upon his or her evaluation, the bag is either loaded or sent on to level three if there is still an assumed threat. Lastly, level three consists of about 1,500 bags daily and is the most intense of the searches that Zurich Kloten Airport is permitted to do without opening the bag. In the US and Germany, airport police are allowed to open any bag without alerting the passenger, but in Switzerland they are required to have the passenger open the bag. An interesting example of this three level system is that after 9/11, all bags going to the States were run through all three levels, and today all bags going to Tel Aviv are, as well.
The last thing we were shown was the control room which does just that - it controls all the cameras and conveyors. This room is monitored by a few individuals who are in charge of making sure that all lines and belts are moving properly. After all, one lost bag can lose two to three hours of productive time on a line. The employees of the baggage system, of which there are 15-20 in presorting, 400-500 handlers and 42 maintenance, use radios to communicate amongst themselves when there are problems.
The main problem that the Zurich Kloten Airport has is space. The airport is built upon a marsh, thus going down a mere 50 cm could hit ground water. Land in this area is extremely expensive and so the airport, which fully runs their own baggage operations, needs to utilize space in the most efficient ways possible.
It was interesting to see a company that was more discrete. How does this organization service the passenger? It seems clear to me that this service is made to make the time spent in an airport easier, but they also must employ great customer service. People are easily agitated while traveling, and it is the duty of this company within the Zurich Kloten Airport to provide customers with the peace of mind that not only is their bag being taken care of, but also that no dangerous bags will make it onto the plane.
Tidbit on Switzerland: Pedestrians have the right of way in cross walks over cars, but not over the trams or buses. Zurich has very extensive tram and bus systems that run all over the city.
Please pray for our group as we head to Italy tomorrow. It is going to be a long five hours in the bus. Pray for good weather while we are there and that we will shine the light of Christ where ever we go!
Goodnight from the majestic mountains of Switzerland.
After visiting Bossard AG today, I realized just how many of their products are in my house right now! Learning about their products made me realize that Bossard has a nut, bolt and fastener in just about every product that is made today. Bossard is a fastening technology and logistics company that operates globally. The Bossard Group is a global group of companies. It is still molded by members of the founding family, now represented by the seventh generation. The holding company, Bossard Holding AG, has its headquarters in Zug, Switzerland, and is quoted on the Swiss stock exchange. Bossard has around 1,500 employees, engaged in the global procurement and sale of every type of fastening element. Bossard also provides engineering and logistical services associated with these products. We were told in the presentation that Bossard does not sell their products directly to companies like Chrysler, Mercedes and Ferrari. Instead, they sell their products to wholesaler companies. One of their biggest customers is John Deere. Bossard provides the bolts you see that hold everything together in each John Deere tractor. The top 500 customers of Bossard account for 56 percent of company sales. During the presentation, we were informed about the three pillars of the company: products, engineering and logistics. They were explained to us individually so we could get a better understanding of what each of the pillars meant. First, the products – whatever you need, Bossard has it! Second, the engineering – they have their own set of engineers that are researching and developing new products, as well as testing old products. The third and final pillar is logistics – they have their own warehouse and distribution center. After listening to the company representative review the three pillars, it seems to me that they do not have to pay for anything. Bossard offers over 200,000 items such as: nuts, bolts, fasteners and special order items. The US market size for Bossard is $54 billion. That’s a massive amount of money to me! Also, Bossard has three main goals they want to accomplish. Although they may seem easy to you and me, if you think about it there are never easy goals. The goals are as follows: time to market (becoming faster as a company), quality (to be better) and competitiveness (cheaper). Overall, I must say Bossard was a very excellent and interesting company. I learned a lot in a very short amount of time!
It's been a week and a half since we began our excursion to seek and conquer new lands we have never seen—the halfway point—and we began the day with sleeping in. Ever since arriving to Europe, our days have been jam-packed with tours of companies or tours of cities in both the early mornings and the afternoons. Being able to sleep in and take our time this morning was quite a relief and a break that we all needed. After being refueled by some extra sleep and some breakfast here at the hotel in Zurich, we boarded the bus, which was a Mercedes-Benz, and made our way to Zug to visit the Building Technology Division of , a company who designs technology for energy efficiency, security and safety in almost anything that uses electricity (basically the General Electric of Europe). After arriving to Zug, we ate lunch at the cafeteria at the company. After lunch and waiting for the other group to arrive, the presentation began.
The presentation began with a brief introduction and then they wanted to show us a video of the company and technology on which it is currently working. Then three huge projector screens started coming down around us from the ceiling with six projectors projecting one continuous image onto them—this was quite impressive to say the least. The whole company is divided into three sectors, with a total of 15 divisions that are spread within these three sectors. Siemens briefly shared about three of these divisions: fire safety, security and building automation. The company has been interested in fire safety ever since 1930, when an engineer who was trying to design a poison alarm lit a cigarette out of frustration and discovered that the alarm detected the smoke. Ever since then, the company has focused on making fire and security systems more intelligent so that the efficiency and accuracy of the systems goes up and becomes more effective. The main focus of the company involving these systems, along with the other systems about which they didn't speak, building automation and systems integration. Rather than keeping all of the systems separate (i.e. fire alarms, security, climate control and others), they focus on having them communicate with each other automatically to improve efficiency. Anything from utilizing the sun's heat and light in a building and using automated blinds to maximize the energy used from the sun along with controlling the air conditioner, to isolating a fire by adjusting certain ventilation systems to keep the fire from spreading and digitally communicating to the fire department where the fire is. It was amazing to see that these ideas were just the tip of the iceberg. Their goals for the next 10 years could change the way the world works in terms of energy efficiency. It would be impressive to see that happen, because they definitely have ideas fueled by innovation!
We had an outstanding continental breakfast this morning at Hotel One in Stuttgart, Germany, before traveling by bus to Daimler AG company – the home of the Mercedes-Benz auto industry. We met with a representative of the company to start our guided tour of the V8 engine manufacturing process. Mercedes-Benz auto industry boasts over 125 years of service to customers after high prestige and luxurious cars. The company also sells various trucks and buses as well. However, the target market of Mercedes-Benz belongs to the upper-class, who are primarily interested in quality – obviously something Mercedes has become well-known for. Quality is the number one goal for the auto mechanics at the manufacturing plant. Consumer behavior is closely monitored by the marketing department due to ever-increasing customer emotions over innovation. This being the case, Mercedes only prefers to hire skilled laborers who are very creative and flexible in an environment of ever-increasing change. Mercedes currently employs over 950 apprentices for the manufacturing process and trains them for about 2-3 years. Each apprentice is then offered a job at the company, after the apprenticeship has been completed. Many of the workers do accept the job offer. Employee satisfaction is rated among the highest in the auto manufacturing industry. Since 1949, Mercedes has never had to lay off a single employee. Each employee, before starting on the job, is required to have a considerable amount of hands-on experience in auto mechanics.
Mercedes-Benz takes advantage of the most modern and up-to-date tools and robotics in its manufacturing process. The turnover rate is excellent; whereas machines are starting to take on the most complex processes, which are highly inconvenient for even laborers to take part in. The total revenue of auto cars in 2010 was € 53.4 billion. Europe’s market has stayed strong, but the lagging economic problems in the US have forced many to overlook luxurious cars for less expensive ones.
After lunch and a short tour in the Mercedes-Benz museum, we boarded the bus bound for Zurich, Switzerland. It was a beautiful four-hour drive through the rolling hills and Black Forest of Southern Germany. We arrived shortly after 5 p.m. in order to tour the city before going to our hotel. Zurich is the biggest city in Switzerland. Located at the base of the beautiful snow-capped Alps, Zurich has a bustling population of 380,000. Our tour guide led us through the streets of this 2,000-year-old city whose history goes back farther than the time of Christ. It started out as a Roman settlement on a large river that served as the main transportation route for the business industry and commerce. Some of the ruins of a public Roman bathhouse are still even visible to this day. German and French are the primary languages spoken in Switzerland. The country’s economy prospers through tourism, business and banking. Switzerland is also well-known for its fine quality production of chocolate and watches. I look forward to getting to try some of the delicious chocolate during my stay here!
This morning we left the beautiful French château, our place of residence for the past four nights, to travel back into Germany. Our first stop or the day was to the small town of Karlsbad, where we visited the German-based software company, Nero AG. Headquartered in Karlsbad, Nero specializes in burning software and "liquid media." The term liquid media refers to the ability to share digital media between devices and distribute it anytime, anywhere, and with any device. Paul Brothe, the Managing Director or Nero D&S and SVP of Worldwide Services, explained this technology, along with some of the company background. Mr. Brothe is originally from Colorado and only speaks a small amount of German. Interestingly enough, he informed us that because the company employees come from around the world, English is the primary language that the company operates and communicates with. Nero is a small company of only about 500 employees; however, Nero makes a big impact. The company ships over 50 million units per year. Much of the business and sales come from Original Equipment Manufacturer (OEM) partnerships with companies like Dell or Toshiba.
One of the challenges of being a global company is the language barrier and time difference between the different locations. Nero has offices around the world, including the United States, Japan, and China. In addition to the office in Karlsbad, the office in China also provides research and development. Mr. Brothe made a point to say that their operation in China was not an outsourcing decision but rather a partnership with Chinese developers.
Recently, Nero released its product Nero Kwik Media. This software makes MS Windows and Google Android work with devices as seamlessly as the ecosystem Apple has created with their products. The base level version of this product is free to download through the Nero website. I found it interesting that for the launch of this product Nero used a highly successful public relations campaign through a partnership with the German technology magazine, Computerbild. The magazine included not only a cover mount (removable advertisement on the front cover), but also an extensive article inside. Overall, the visit was very informative and enjoyable (the cookie refreshments were delicious as well).
Our second visit of the day was to the Stuttgart Chamber of Industry and Commerce. The Chamber has several functions, including representation, public responsibility, and services. Through representation, the Chamber becomes a mouthpiece of the business in regard to the government. Although the Chamber is not directly connected with the government, membership is required for all commercial companies around Stuttgart. The Chamber we visited is part of a network of Germany Chamber of Commerce that consists of 80 other smaller chambers. There are also offices in New York, Atlanta and Chicago, with branches in Houston, Philadelphia and San Francisco. All of these chambers provide a variety of services, including consultations regarding start-ups, importation, exportation, political, economical and legal assistance.
The Stuttgart Chamber was founded in 1855 and serves Stuttgart-based companies such as Daimler AG, Bosch and Porsche among others. In total, the Chamber has 154,000 members. As a city, Stuttgart is home to around 2.7 million people. Sixty-percent of the revenue of the city is from exports, especially to the United States. Foreign sales generate $66.7 billion annually.
Stuttgart as a city has been an interesting place so far. Even with the large industry focus and infrastructure, it is not uncommon to pass a large vineyard as we traveled around the city. Tomorrow we leave for Switzerland!
On May 9th, in just less than 10 hours, 19 LeTourneau Business students were transported from the American form of business to the European, and surprise, surprise! There are many things that are either the same or very similar, but also many things that are different, and that is just in Germany and France. It’s always interesting that when we go somewhere different or try something different, we try to compare it with something familiar to serve as a standard. Usually this is followed with comments like “it’s better than something else” or “not as good as something else.” We never seem to accept the new for what it is; and that is “it is different!” But that is how we are encouraging ourselves to respond to what we see. People and cultures are different from each other and should not be described as superior or inferior. Our goal is to see how we can learn from each other and work together for greater efficiency and effectiveness.
It’s hard to believe that we have been here just one week. Already we have seen the European Central Bank, German Stock Exchange, Heidelberg Printing, John Deere, Steelcase and Dow Chemical companies, as well as the cities of Frankfurt, Germany, and Strasbourg, France. We have done our share of walking, but we have seen SO MUCH!!! We have learned a number of things from each of our company and city visits. We have been describing some of them in these daily blogs and will communicate them more completely in the formal papers that the students will be finalizing upon their completion of the three weeks in Europe. Hopefully we will be able to post some of them on the LeTourneau University School of Business website.
I am personally looking forward to the coming two weeks we will be spending in Switzerland and Italy. Keep reading the daily blogs, and stay tuned for more reports on our “Experiencing European Business” trip.
Dr. Ken Fairweather
Due to the nature of today’s visit this blog will be one of a more serious disposition:
Growing up I always loved to watch the History Channel. I found it interesting to learn about the great battles of World War II. I loved watching the “Band of Brothers” series, but the episode where they show the liberation of the concentration camps was something that bothered me. For that reason I had mixed feelings about going to a concentration camp, and was unsure of what to expect. On one hand, I was fascinated to know that I was visiting a very significant and historical place of WWII (it was the first of the concentration camps to be freed by American Soldiers). On the other hand, I was also visiting a site where the greatest crime against mankind took place.
The camp we visited today was the Natzweiler-Struthof concentration camp just outside of Strasbourg, France. As we were driving to the concentration camp, I thought our bus driver was lost because the scenery was so beautiful. Our tour guide explained to me that before the war the mountain was a ski resort. I found it strange that such a beautiful place could have witnessed such a horrible crime. The tour throughout the camp was difficult. It was difficult to know that so many people had died a terrible death on the same ground that I was walking on. I know the rest of the group felt the same way because I’d never seen our group so quiet before. We saw the barracks where the prisoners lived, the rooms where they were tortured, the gallows where they were hung, and the crematorium where their bodies were burned. As we walked throughout the camp, our tour guide explained in detail how the prisoners were abused and what the daily routine of a prisoner was. We learned that the prisoners’ jobs were to mine granite to supply building materials for Nazi Germany. Many prisoners died from a combination of being overworked and severely underfed. The tour guide said that the prisoners were horribly mistreated and humiliated. All throughout the tour, I kept trying to understand how humans could treat one another so badly. The number of people that died because of one man’s ideology is staggering. It stands as a strong reminder that we need to appreciate and understand the differences between one other and remember that hate is a powerful and dangerous thing.
Today we visited the Haut-Koenigsbourg Castle. This is one of the most visited castles in France. It was built in 1147 A.D. Over time, many alterations have been made to the castle to preserve it. It was considered ruins from 1633 through 1901, before it was rebuilt by the Germans. It was modeled after the original castle, but there were some changes implemented. King Wilhelm II wanted to show off German architecture and its power. The castle was originally built in Romanesque style, but the changes included more Gothic themes. German symbols such as the eagle were added throughout the castle as well. The castle layout is rectangular; it is very long and narrow. The fortifications were on the west and east because these were the flattest parts of terrain. The north and south walls, the longest walls of the castle, were well protected by rough steep terrain. If the outer walls were ever breached, the royal living quarters were protected by an inner wall surrounded by a moat. The trek to the top of the castle and back down consists of 300 steps. The climb is well worth the effort, because the view is spectacular. Between seeing the rolling mountains and the giant Black Forest, it was nothing less than breathtaking.
At the top of the castle, the distance to the ground is 2,300 feet. Everything can be seen from the tower. It is understandable why this castle is so popular because of the rich history and the amazing view. The castle sees over 500,000 visitors a year. All of these travelers have to drive up the winding road to get to the summit of the mountain. The road is a well-paved two lane road, but the hills are very steep and create a challenging drive. (The bus smelled of burning rubber on the way down because of the strain on the brakes). What was even more incredible about this road is that we saw a cyclist riding up the mountain. I honestly don’t know how it would be possible to bike up the mountain, but the challenge seemed effortless to the cyclist we saw. After we left the castle, we drove by Bugatti, a prestigious car manufacturer well-known for producing high quality and high speed vehicles. In this factory they produce a spectacular $3 million car, the Veyron. This car contains a W16 engine which consists of two V8s side by side to create 1,000 horsepower. It was an incredible sight to see, since it is the highest ranking of all super cars. The first half of the day was a great experience, with great history and a breathtaking view.
After spending Friday morning in Schiltigheim, France, at Steelcase International, our group made our way back to Germany in the city of Rheinmünster where we visited the Dow Chemical Company. Dow Chemical is a provider of plastics, chemicals and agricultural products with a presence in more than 160 countries and employing approximately 50,000 people worldwide. We first visited the main office building to enjoy a brief presentation about the company, as well as many environmental initiatives the company practices. Not only were we provided beverages during this time, but the company was kind enough to include an assortment of chocolate-covered cookies that allowed each of us to focus all of our attention on the very informative briefing. Dow connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems, such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. For example, a few of Dow’s goals to achieve by the year 2015 are to increase the percentage of sales to 10 percent for products that are highly advantaged by sustainable chemistry, to reduce greenhouse gas emissions by 2.5 percent per year, to reduce energy intensity by 25 percent and to publish product safety assessments for all products.
Shortly after the presentation, we made our way over to the production facilities where numerous amounts of materials and plastics are produced. One particular facility was strictly used for manufacturing a substance used in diapers to enhance the ability to absorb liquid at a more efficient rate. We were then guided through the process in how this substance was created and shown a demonstration of its absorption capabilities. All in all, this visit was intriguing and interestingly enlightening.
For the next hour and a half, we traveled back to Château de Pourtalés, the castle in which we are staying. For this evening’s dinner we enjoyed an excellent French barbecue. The menu consisted of grilled fish, succulent grilled chicken tenders, a petite beef sausage and traditional chicken wings, as well as an assortment of fruits, grilled vegetables, various sauces and a delightful array of warm freshly baked bread. This meal is one I will most definitely never forget. Not only did I go back for seconds, but I went back for thirds, fourths, and yes, even fifths. I will continue to enjoy the delectable food I have tasted here in Europe and will greatly miss it when I go back to the United States. I can only hope to return again in the near future to pursue my long lost love.
Today we visited an international office of Steelcase in France. Steelcase, an American company that started in Grand Rapids, Michigan, is a global leader in the office furniture industry designing and manufacturing architecture, furniture and technology products. Before we went on this visit, I had done some research on Steelcase for a presentation prior to the trip. We visited what is called a WorkLife Center (check it out in these photos). It was my assumption that Steelcase used all of their furniture in a way that was specified by each of the employees and the management as a whole. That was used also as a way to showcase their products to customers. What I didn't know was that Steelcase is not only using the furniture but also living and breathing a new philosophy for the workplace. The philosophy which our speaker said repeatedly was the simple statement, "Whatever is good for business, we must do." That is an insanely simple statement. However, if you told managers to let their designers and architects work on a coach or a lounge chair; they might say you were crazy. Most managers’ traditional way of thinking is that this type of lounging while at work would keep the company from reaching its productivity goals. Steelcase has taken the opposite of the traditional office approach to workspace and they will be the first to tell you it has not always been successful.
The Steelcase approach is all about the work environment of the employees, from devoting 10 percent of the building's square footage to break areas and a café, all the way to allowing employees to work in different locations around the office throughout the day. Employees can check in at as many as 20 different wireless servers during one work day. They have no specified offices or desks with extravagant name plates or any name plates at all. The only name plate you will find is on the moveable storage units that are manufactured by Steelcase and are used to store files and personal belongings. These mobile units must be parked in designated areas that are specified by the dark gray carpet. After the briefing about the company goals, vision and innovation, we were then taken around the entire building where we saw firsthand the work life of Steelcase employees. They are allowed to connect to many different desks that are either individual or group areas. They have rooms that can be reserved from anywhere in the building and from any computer. The idea that whatever is good for the company must be done extends to whatever environment helps an employee create ideas necessary for innovation. Steelcase believes that if a person thinks and creates best on a couch listening to music, that's where they should be. Of course, you could see how this could get out of control quite quickly if you did not have enthusiastic and purpose-driven employees. The solution to the anticipated problem of unproductive behavior is setting objectives and goals that must be met. The company does not cease to admit that the idea is not perfect, and in some situations the employee might even be put back into an office if they cannot be productive with freedom. The company tries to keep the space as open and wall-free as possible. However, after 3 years of original implementation, they had to create walls in the offices of upper management because it was difficult to work without being disturbed.
The new concept and way of work life at Steelcase is not just implemented in France but is a worldwide company policy. The company may have started from a small idea like an inflammable steel waste basket, but they are making great lengths to be innovative in the workplace. They make high-end furniture that evolves faster than the rest of the world so that we have the technology exactly when we need it! Steelcase is a company that is changing the workplaces around the world. Although they believe in and encourage their new work life environment, they do not think that is superior, nor do they try to force their way on other companies. Overall it was great to see a company that is truly looking for the best environment for employees and production. The hospitality of our host at Steelcase is unmatched by any other company we have visited. If I knew three different languages, a requirement for employees of the French branch, I would definitely pursue a job at this well respected, innovative, ethical, and profitable company.
How do you start off the typical day in America? Do you eat donuts, coffee, bacon and eggs? To start the day in Germany, try waking up at 4:45 a.m. and drinking a scolding hot German cup of coffee yah. I learned the phrase “yah” talking to a waitress. She says it is filler when talking to people, somewhat equivalent to the American word “umm”. This morning, breakfast was absolutely delicious. I ate smoked ham with Swiss cheese and warm croissants. I noticed a vast difference with food in Frankfurt, Germany. The portion size is smaller, but the abundance of richer homemade ingredients makes the meal so much more worth it. Even the jelly tasted like it was made with more fruit and less sugar. On the business side of things we visited John Deere in Mannheim, Germany.
We took a very detailed tour that showed the manufacturing process that John Deere implements everyday. We were not allowed to bring cameras or phones because of the prototypes of new machines being processed. They stated that they spend $2.2 million everyday on new research and manufacturing processing. The thing that intrigued me the most was the line processing. Each worker has an individual job that needs to be completed in a timely manner. Each part is then passed on a conveyer belt to the next station so the next worker can start his own specific assignment. If you have any knowledge of Henry Ford, this is the same process that he implemented in his car factory. John Deere does implement some robotic technology, but most of what I saw was controlled or processed by human hands. After the tour we made our way to the Q&A part of the tour, where two of the top human resource directors briefed us on what their job entails. Most of what their job consists of is building relationships and assessing job performance in order to increase product production. The most interesting information the HR directors shared with us is pay. In America, there are several factors that could increase your pay. These factors are education, knowledge, experience, and seniority. In Germany, you are paid the same amount as everyone else that is doing the same job. The example they gave us is that a person processing gears for 15 years will get the same pay as a person who just started two weeks ago. Though education will get you a better job, sometimes having the people skills and being able to understand certain situations will also increase your pay. John Deere in Mannheim was definitely an interesting experience. Even though the seminar was directed more towards people in HR and engineering, I appreciated this experience greatly.
Also the most important thing I learned today occurred at dinner. When you order “lemonade,” it is not lemonade at all! In fact, it is a Sprite or 7up. I could not decide which. Now that I think about it, it also could have been a Sierra Mist!
The beginning of day two led us to Deutsche Bundesbank and marked the first of many business visits for this trip. Later in the afternoon we also visited the German Stock Exchange. Appropriately enough Deutsche Bundesbank, located in Frankfurt, Germany, is the Central Bank of Germany - home to the Euro system’s monetary policy. This visit provided a good starting location for our tour of European Business. Much of our discussion at the bank centered not only on the history of the Euro system but also on current issues facing the European Union and the measures which have been taken to protect the interests of the members of the Euro system. Of specific note and discussion was the deficit of Greece, Ireland, and other member nations and how the ECB cornerstones of price stability, independence, and non-financing of public households have helped to shape the actions of the EU concerning these crises. I believe that this first visit will be a great help to better understanding and interpreting many of the business we will be visiting in the weeks to come.
Day three began with a fascinating visit to a printer manufacturing company located in Heidelberg. If I could choose only two words to describe our visit to Heidelberg Druckmaschinen AG this morning they would be “WOW” and “Progressive.” So far Heidelberg has been the jewel of our company visits. To give you a bit of background, Heidelberg specializes in sheet fed offset presses. To put that in layman’s terms, they make the really big machines that print a majority of every piece of packaging and a good deal of the really flashy junk mail that makes it to your mailbox. Not only does Heidelberg manufacture these presses, they offer complete solutions from the concept stages of prepress all the way through the finishing and final payment solutions to facilitate each job. Heidelberg provides a complete solution to printers around the world.
That very brief background brings you up to speed for our visit today. As fantastic as a visit to their factory would have been, the treat we received was far better. For nearly two hours we were able to have an interactive discussion with one of the leading individuals from Heidelberg’s Print Media Academy. The Print Media Academy is designed to give training in all aspects of the printing industry and is the only such institution of its kind.
You might ask what we could possibly discuss or what would be interesting enough to make this the best stop on our trip. After all, they only make big machines that put ink on paper. What’s so special about that? The answer involves more than massive machines printing on paper. Printing is an area that has had a huge impact on the marketing communications of the past and present. The many exciting advances currently in development printing will find an important place in the future of marketing communications as well. RFID, bar-coding for recognition by your cell phone camera, and other similar technologies are things of the present. What we are looking at for the future of printing is technology such as bio-LED’s printed directly into the paper. Yes that means paper will be electronic! Imagine just some of the possibilities.
Other interesting topics of discussion included the death of the American print market and the development of other international markets, intellectual property rights and how to best deal with threats to your business and many, many other mostly related topics. All in all this was just merely scratching the surface for this 500+ year-old industry. What was important was to be able to begin thinking about what this will mean in the years to come for the industry and most importantly what this will mean for us in the marketing community.
The second day of activities led our group to visit Germany’s Stock Exchange located in Frankfurt. Deutsche Börse Group started trading in 1585. As one of the world’s leading exchange organizations, Deutsche Börse Group provides investors, financial institutions and companies access to global capital markets. They specialize in cash market derivatives, trading, clearing, settlement and custody. It is one of the largest exchange organizations worldwide. Using advanced technology it affords companies and investors access to the world's capital markets as well as the development and operation of electronic trading systems such as Xetra and Eurex for digital trading. They only trade securities in Frankfurt. The securities they trade are investment funds. Exchange-traded commodities are gold. Deutsche Börse Group has over 1000 companies, and 370 Companies in the "Prime Standard,” the highest standard. Its product and service portfolio covers the entire process chain, including securities and derivatives trading and clearing, netting and transaction settlement, custody, the provision of market information, as well as the development and operation of electronic trading systems. The visit proved to be very informative especially when viewed in contrast to the New York Stock Exchange. Over the next few days, we will be learning more about business and finance as we visit more companies within Germany and France.
Hello from Germany!
Well, the European Business Experience has officially begun. A group of 19 students and 2 adults ventured out of Dallas yesterday morning to begin our three-week adventure. The trip is equivalent to six credit hours of classes. The next three weeks will involve visits to various companies throughout Europe. We will be learning about business practices within reputable companies known throughout Europe as well as some known throughout the world. Our trip has begun by landing safely in Frankfurt, Germany, early this morning. We will continue to visit France, Switzerland and Italy as the trip progresses.
When we arrived in Germany this morning, it was quite a site to see. All of the buildings have such unique and detailed architecture. The street names contain more syllables than I ever knew could be said in one word. The tiny streets are lined with luxurious cars that are pulled up on to the sidewalk. Within the few hours I’ve spent here so far, I have learned that there is a huge language barrier to overcome. Trying to buy a new SIM card for my cell phone proved to be especially difficult. Although I speak no German, I felt that somehow the communication would work. I am now rethinking that assumption. There will be so many learning experiences to come in the next few weeks. I cannot wait to learn how to interact and adapt when facing a language barrier. Also, I am excited to learn about European business practices and the culture as well.
Throughout the next few weeks, you will have the opportunity to read blog posts from several different students participating on the trip. I hope that the variety will give you a taste of the things we are getting to see and experience across the Atlantic. I am sure that the insight will only prove more interesting as the trip continues.
Until next time,