Key Postings VI: Company Level Business Analysis
Let's pick up the thread of our listings of key postings with the finale - specific company analysis. At the end of the day the central focus of this blog, even if/when the weight of postings seems to indicate otherwise, is on improving enterprise performance. Hence our repeated mantra of Economy - Market - Industry - Company. Now you might be asking yourself why does that matter ? Other than that's how we all make our livings directly or in-directly (public organizations may make society more effective but it's still companies who make the squirrel cages go round - puns and images intended).Just to put a point on it consider this recent chart of GE's market performance as well as some recent headlines and excerpt:
"GE at 4 1/2-Yr Low as Broker Wants More Unit Sales General Electric Co (NYSE:GE - News) shares fell for a fourth straight day on Monday after J.P. Morgan cut its rating on them to "neutral" from "overweight." The shares fell 2 percent to $28.55, after touching a 4-1/2 year low early in the session on the New York Stock Exchange. J.P. Morgan said the second-largest U.S. company by market capitalization needed to sell off wide swaths of its operations to restore investor confidence."
Frankly we think that whole line of argument is absolute unsinn based on not understanding the business - and if we don't pay analysts for that then what justifies their compensation (and GE's investor presentations are very clear and to the point so no excuses). Nonetheless Immelt and crew screwed up badly by not being better at economic analysis and in planning ahead for its' impact on their company. And the headline/story certainly captures the enormous pressures they're under, justified or accurate or not.
If GE is one of the better and more well-run enterprises with an enviable track record measured at least in decades what does that say about understanding performance for the non-GE's of the world ? As usual we have some graphics for you to consider where we've been categorizing at least the "headline" companies, so everybody can dig into and verify the background if you choose, over the last several years using our enterprise performance criteria. The first graphic is, shall we say, the mal-performing companies. Now sometimes they migrate...sometimes even to the well-performing list....and back ...or visa versa as well. That is they start out as good and then a failure to adopt turns a Dell from exemplar to trashcan.
Consider this second graphic which shows the relative better performing companies in appropriate categories. You might also want to notice that to balance out the tables we moved "Strugglers and Stragglers" to the good chart. Now these charts aren't absolutely up-to-the-minute but you'll notice that GE is one of the few, IOHO, who's in the sustainable column of demonstrated excellent performance - no matter what the market's short-term impressions might be. And darn few others. On the other judging from a recent post (Dell Computer: It Ain't Your Grandfather's Beige Box) Dell might be in the process of re-inventing itself. They're certainly doing a lot of the right things, or so we've judged. On the other hand Starbucks probably deserves a significantly revised entry indeed.
After the break you'll find the table of company specific postings, including the long series on Home Depot that kick-started the whole effort and a prior analysis on Citi. And just as a reminder the analysis uses the "framework" and relies on a lot of industry analysis as well. For example our analysis of the state of play in the Finance Industry leveraged and adapted the model developed to analyze Citi. Partly because their investor relations reports were so good and gave us all a great picture of the major components of the whole industry. Comes full circle. Which is another way, btw, of saying that the key postings on business and industry analysis are be used here to do specific companies. Need the framework to do the analysis - a blueprint and checklist. Need to the analysis to validate and verify the framework.
Over time we hope to add more companies to the inventory but meanwhile here's Home Depot, Citi and Dell. Which are also a retailer, a bank and a manufacturer which links back to the and provides insights on any other Retailer, Bank/Finance, Manufacturing or Tech company. Consider that as well.
| Business Analysis Toolkit Part IV: Company Analysis | |||||||||
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