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SPRING/SUMMER 2003 STERNbusiness InformationCrossing Nation Borders CEO Interviews: How UPS Delivers How Bic Stays on the Ball CreativeNiall Ferguson onThinking: Anglobalization India’s Software Giant EntrepreneurshipWhy Major Economies Don't in Move the in SyncDigitalUnderstanding Age New Consumer Markets Wal-Mart’s Foreign Travels Rx Coverage: Curing Telecom and Argentina a letter fro m the dean It’s more than fit- Metropolitan Opera, Munich’s Bayerische Staatsoper, ting that this issue and Milan’s La Scala. focuses on the topic Meeting in the heart of Europe, and with people of globalization and from different business cultures and scholarly crossing borders. In disciplines, added a great deal of context to all our recent months, Stern discussions. Of course, history is an important com- has seen significant ponent of context. Business history – long a strength milestones in our at Stern – has been augmented by the arrival in international efforts. This past January the inaugu- January of Professor Niall Ferguson, who recently ral, 28-person class of executive MBA students from joined us from Oxford University and is the author TRIUM, the program Stern offers jointly with the of the definitive two-volume history of the London School of Economics and the HEC School of Rothschild banking empire. His most recent book, Management in Paris, completed their studies. The Empire – which is partially excerpted in this issue – second TRIUM class, with 35 members, completed is a significant contribution to the growing literature its first module at our campus in New York that on globalization. same month. This innovative program, geared As several articles in this issue argue, toward inculcating a global perspective in its stu- understanding the historical development of dents, will continue throughout the year with international markets, companies, and financial sessions in Paris, London, Brazil, and Hong Kong. systems is crucial for leaders grappling with While many of our alumni remain in the New contemporary questions and challenges. After York area, and hence can easily maintain connec- all, locating our place and role in an increasingly tions to Stern, and with one another, Stern graduates connected world is the fundamental task of all edu- who live in 98 countries have fewer opportunities to cational endeavors, but in particular of business do so. In October, we held our second international and management education. alumni conference at La Pietra, NYU’s conference We look back on recent accomplishments with center in Florence, Italy. pride and a sense that we are affording all members At La Pietra, where nearly 160 people gathered of the Stern community a greater understanding of for a weekend of fine food, fine art, and fine discus- the world in which we live and work. And we look sion, Stern’s approach toward business – and busi- forward eagerly to the future – and to this issue of ness education – was on full display. Panels brought STERNbusiness. together executives and scholars to discuss topics ranging from corporate governance to the direction of the global economy. A session on the business of Thomas F. Cooley opera included the administrators of New York’s Dean contents SPRING/SUMMER 2003 Crossing Borders 30 Don’t Cry For Argentina A Roundtable Discussion 10 Stern A Passage From India 34 ChiefExecutive by Raghu Garud, The Big Store Goes 44 Series Arun Kumaraswamy and Global Telecommunications: Monica Malhotra by David Liang Excess Capacity by Lawrence J. White 18 40 The Market Next Door It’s A Small World 48 Endpaper Interviews with by Peter Golder and After All? by Daniel Gross Debanjan Mitra Bruno Bich, page 2 by Jonathan Heathcote Michael Eskew, page 4 and Fabrizio Perri 24 Anglobalization STERN by Niall Ferguson business A publication of the Stern School of Business, New York University President, New York University I John E. Sexton Dean, Stern School of Business I Thomas F. Cooley Chairman, Board of Overseers I William R. Berkley Chairman Emeritus, Board of Overseers I Henry Kaufman 8 Associate Dean, Marketing Crossing Borders and External Relations I Joanne Hvala by Daniel Gross Editor, STERNbusiness I Daniel Gross Project Manager I Rika Nazem Design I Esposite Graphics Illustrations by Letters to the Editor may be sent to: Chris McAllister, Timothy Cook, NYU Stern School of Business Warren Gebert Office of Public Affairs Gordon Studer, 44 West Fourth Street, Suite 10-83 Robert O’Hair, New York, NY 10012 and Michael Caswell http://www.stern.nyu.edu sternChiefExecutiveseries Bruno Bich chairman and chief executive officer Société Bich Bruno Bich is the Chairman and CEO of Société Bich, a leading manufacturer of stationery products, lighters, and shavers that was founded by his father, Marcel Bich, in 1945. Based in Paris, France, Bich has subsidiaries in several different countries and sells products in more than 160 countries. The company’s U.S. subsidiary, Bic Corporation, based in Milford, CT, accounted for about 53 percent of Bich’s 1.53 billion in 2001 sales. Bic man- ufactures three million ball point pens, 2.5 million shavers, and 1 million lighters each day. Mr. Bich graduated from NYU Stern with a Bachelor’s Degree in Marketing, and has worked at Société Bich for more than three decades. After holding posi- tions including national sales manager, vice president of sales and marketing, and Chairman and CEO of Bic Corp., Mr. Bich was elected to succeed Marcel Bich as Chairman and CEO of Société Bich in 1993. ML: You certainly are the In three years or so, business the tough market. Computers that market head on would quintessential multi-national, will come back to its normal have not really done much to have been extremely difficult. multi-lingual executive. Tell us pace. our White Out business. That Instead, we went into the one- what's going on in the global market also grows two, three piece or disposable razor. We economy. Is it really as difficult, ML: Do any of your major percent a year. Our highlighter went through the side door. demanding, and daunting as it products face specific chal- business has actually And today, if you look at the appears? lenges now? For example, increased quite a bit. People western world, 55 to 60 per- BB: We are slightly affected lighters. We see what's hap- are highlighting a lot of com- cent of the people shave with by the downturn in the econo- pened with cigarette smoking puter reports. a disposable razor. There are my. There are good reasons to in this country, and notably in more people shaving with the be careful right now. We creat- this city, and presumably that ML: Shavers must be a chal- disposable razor than with the ed a bubble and we are paying will spread. Or your White Out lenging market, especially with system razor. Now, the system the price. There was a bubble business, when more and a goliath of a competitor like is bigger in value. But, in vol- in Asia, which corrected a cou- more people are using com- Gillette. How do you make that ume, we are about equal with ple of years ago, and now is puters? business grow? Gillette, in the U.S. and in trying to recover. In Europe, BB: Smoking is going down BB: Our company was started Europe. there was an Internet bubble, one to two percent per year in right after World War II by my but to a lesser extent than in the U.S. or world. That's a very father. In the U.S., we went in ML: What is your strategy for the U.S. It's just like a pendu- small decline. In fact, we have the shaver business against expanding in terms of new and lum. We went too far one way, increased our sales of lighters Gillette. Gillette was strong in different products? we go too far the other way. about four percent a year over what I call the system and BB: First of all, the consumer Short term, I'm concerned. the last five years. We keep on replaceable blade. To go goes to the store, and has a Long term, I'm very optimistic. gaining market share despite through the door and attack choice. Consumers usually 2 Sternbusiness Marshall Loeb, the former managing editor of Money and Fortune, conducts a regular series of conversations with today’s leading chief executives on the Stern campus. "We can never forget that in today’s time, and somewhere else 20 of each toward the same goal, percent of the time. We have versus focusing on the differ- world, approximately 20 percent of the put together a group of man- ences. That's arduous work. people earn less than $2 a day." agers who come from different But the payoff is great. backgrounds and different civi- lizations, because there is a lot ML: You have some of the spend about 20 seconds we can never forget that in of value to finding what are the world's best known brands. deciding which product to buy. today’s world, approximately common points between con- How do you develop a brand, The quality of the brand name 20 percent of the people earn sumers in Europe and the and how important is that to in the subconscious of the con- less than $2 a day. So our United States, South America you? sumer becomes very impor- strategy is serve the con- and Europe, and even Asia. I BB: Our brand name is my tant, as does his recollection of sumer, never forget the basic think too often, people start to family name so I look at it as a how well he was served by the product, and work on the quali- talk about the differences.