The Restaurant Scene in Cuba: Paladar La Guarida

By Mario Rodriguez Graniel, MBA’15.

For years, Cuba’s restaurant scene was dominated by lackluster, drab state-owned restaurants. However, recently, there has been a shift in the country’s culinary scene due to the increase in privately-owned restaurants, or paladares. Paladares, which are usually family-run restaurants in people’s homes, first appeared during the 1990s, when the fall of the Soviet Union and consequent economic crisis forced the Cuban government to make economic reforms including allowing ownership of private businesses. Unfortunately, due to stringent regulations put in place by the government regarding quotas on the amount and type of products offered, limits on the number of seats allowed (only 12), and strict labor hiring rules, only a few paladares survived.

In May 2011, in an effort to shift toward a more free market economy, President Raul Castro’s government announced a new reform plan allowing some state-owned businesses, such as barbershops or restaurants, to become private. Havana currently has almost 2,000 private restaurants, a drastic increase from 2010, when the state reported only 74 private restaurants in the country’s capital.


View of Old Havana from La Guarida

A best-in-class example of a successful cooperative in the restaurant industry is La Guarida, a leading paladar in Havana. Opened in July, 1996, La Guarida resides in a magnificent early 20th century building, which used to be the owners’ multifamily residence. While the restaurant received early recognition due to its portrayal in the Fresa y Chocolate movie, its success was hampered by the series of regulations imposed at the time. Limiting seating to 12 customers at a time and only allowing family-member hires influenced the business’ growth potential and its scalability. Therefore, the owner decided to move to Miami with his family in order to open a restaurant there instead.

Years later, when the government decided to loosen the regulation for private enterprises, the family decided to move back and invest in the business. The seating regulation now allows owners to have two licenses, permitting 50 customers at each sitting, and restaurant owners can now hire any employee without government interference. The restaurant has received numerous prizes and certifications and prides itself from offering the most elegant and highest-quality cuisine in Havana, which is reflected in it being fully booked for months and years at a time – mostly by foreigners given that locals cannot afford such a restaurant experience.

We had an incredible time when we visited the restaurant. We were hosted by the founder and enjoyed the most succulent meal we had in Cuba and maybe in general. You should definitely go enjoy both the food and the venue!

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Cuba’s Entrepreneur

By Mario Rodriguez Graniel, MBA ’15

A vibrant, independent private sector is emerging in Cuba, following recent government reforms allowing private enterprises to develop more freely in the country. After decades of state dominance, more and more Cubans have opted to become entrepreneurs or join a startup as a way to replace or supplement the reduced, fixed income from government-related jobs. Bed and breakfasts, restaurants, barbershops, and service-related businesses in areas such as technology and construction are flourishing. The implications of this phenomenon on the development of a middle class in a socialist regime are both, substantial and exciting. However, while the progress is tangible, so are the challenges. After meeting with a few entrepreneurs during my academic visit to Havana in March as part of an international seminar at Columbia Business School, I learned first-hand about issues related to access to capital and burdensome taxation, which often prevent some of these operations from getting off the ground or growing into larger companies. Yet, these obstacles only fuel the innovative thinking and impetus of these budding entrepreneurs and their hopes for redefining a new Cuba.

During my visit to 02, a one-of-a-kind wellness center in Havana’s Nuevo Vedado neighborhood, I had the opportunity to learn about the drastic tax structures connected to revenues and number of employees, which can surmount to tax rates of 150% for larger businesses. In response, entrepreneurs like the twin sisters Omara and Odalys, founders of 02,have developed an effective model in which they lease the different rooms of the center to their employees, which creates many small separate tax-paying entities operating under the same space. The hairdresser leases the salon and so does the spinning instructor and the spa’s masseuse with their respective areas. Another inspiring story was related to their launch marketing strategy. Given the low penetration of Internet access and bans for street advertising of private enterprises, the twins liaised with their neighborhood’s mailman and attached a small flier to different pieces of mails that would be delivered that day.

02 Spa Services
02 Spa Services
The 02 Gardens are rented for events and operate as a separate business entity
The 02 Gardens are rented for events and operate as a separate business entity

It remains to be seen whether the Cuban government will continue to move towards greater liberalization of new businesses and regulations that support not only their existence but also their expansion and partnership with state entities, in what could become a successful “hybrid” market economy. What is undeniable is the exceptional hope, enthusiasm, and creativity with which these entrepreneurs rise and fight for their business ideas and the wellbeing of their families – lessons that young entrepreneurs in countries, such as the US, which facilitate the opening of new businesses, should adopt and apply.

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Looking Back on Myanmar

The twelve days I spent exploring Myanmar earlier this spring are some of the most fascinating and memorable days I have had during my MBA experience at Columbia Business School. I spent the first two days roaming through the ancient pagoda city of Bagan before heading southeast for a few more days to experience the floating villages on Inle Lake. While both of these destinations were absolutely striking from a tourism perspective, the seven days our class spent in Yangon learning about the challenges of doing business in Myanmar were extremely thought-provoking. While I travel often, I had not previously had an opportunity to travel to a country that is on the brink of major economic growth, which is why this particular business school trip was so rewarding for me.

A typical street in Yangon, Myanmar

A typical street in Yangon, Myanmar

One of the most challenging aspects of doing business in Myanmar are the many regulations which remain from the period of military rule. For example, foreign citizens are not allowed to directly invest in Myanmar, but must instead do so only in a joint venture with a local citizen. This means that before conducting business it is imperative that you find a trustworthy, local partner. Also, many aspects of the country’s infrastructure are extremely antiquated making road, air and boat travel slow and sometimes dangerous. The banking systems are also outdated with no mortgage or debt markets and a high reliance on cash transactions. The highest bank notes issued are the equivalent of a $10 bill due to the huge fear that people will print counterfeit currency, however this does not stop landlords from often asking for rent in cash. In fact, when we visited a local bank we saw giant stacks of bills sitting out waiting to be counted and distributed, with very low security.

Stacks of cash at a local bank

Stacks of cash at a local bank

Due to the historically Buddhist culture, there is a low rate of crime and this leads people to feel comfortable carrying around large, clear bags of cash with no fear of robbery. While there are many aspects of the country holding Myanmar back from becoming an economic leader in Southeast Asia, many of the companies we met with are extremely positive on Myanmar’s chances and are eagerly awaiting the upcoming governmental elections which could launch Myanmar successfully into the future.

Myanmar is often called the last frontier of Southeast Asia for growth and investment due to its abundance of natural resources, prime location between India and China and booming population of over 50 million. The advice we heard numerous times was that if we were interested in successfully beginning business in Myanmar, we should relocate to Yangon to really understand the peculiarities of doing business in a country fresh out from under its military-rule. Only after experiencing the city with our own two feet will we have the ability to make invaluable partnerships and connections to take our ventures off the ground. I am so pleased for the opportunity I was given to visit Yangon to start understanding some of the country’s idiosyncrasies myself and I am eager to watch its economic strides over the coming years.

– Sabrina Stucka, MBA ’15

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Chazen Italy Part 3

For the final part of our journey we head to Milan on 19th March. Our hotel was literally a stone’s throw away from the Duomo and the very bustling centre of Milan. The location couldn’t have been more perfect. After relaxing in our hotel for a while, we went for dinner to Trussardi which is a very posh eatery in Milan. Later we head to the Armani Prive Club to check out the local nightlife in Milan. It was quite amazing to see the club buzzing on a Wednesday night.

The next morning we head to Ermenegildo Zegna’s corporate headquarters, where we first met with Bain & Company’s retail & luxury good’s practice. We were fortunate to be joined by Claudia D’Arpizio, a partner at Bain, a stalwart in the luxury consulting and author of Bain’s annual luxury report; Fulvio Peppucci, another partner and Roberto Tribioli, a newly minted CBS MBA.  The statistics they shared about the luxury industry were eye-opening and given that we were hearing from a renowned subject matter expert, we could be sure the facts were accurate.

Next we heard from Benedetta Zegna, (Talent Manager) about the history of Zegna and  how the brand under the creative directorship of Steano Pilati had really blossomed and branched into fragrances, cufflinks and eyewear. Later Mario Marraccini (Retail, Planning and Buying & CRM director) told us about the Zegna World Pass program – an exclusive invite only loyalty program for top 200 Zegna customers. It was nice to hear how such a traditional brand steeped in heritage was adapting to the modern methods of retail nowadays. After the company visit, we spent some time sight seeing and later had dinner at La Vecchio Lira followed by another club visit to the Cavalli Club.

The following day we visited GROM Gelateria to learn more about their quality Gelato making process. Grom was founded in 2003 by two friends who wanted to produce quality gelato – without any flavorings, color, preservatives or chemicals added of any kind. Grom mixes liquid flavors in its lab at Turin and distributes them to retail stores where they get  whipped freshly each day. From now has over 50 stores in Italy and 7 around the world, 3 of which are in New York. After trying flavors like Biscotti, Pear and Pistachio – I definitely want to try the gelato in New York soon. But more than anything I promised myself that I would be back in Italy soon.

Here are the things I will miss about Italy:

1) Beauty: Every city we went to was so beautiful and had some of the most incredible art and architecture I’ve seen. From the rainbow hued houses in Burano to the brilliantly done     facade of the doom’s. Unfortunately, since we had visits during the day we were unable to go inside a lot of the museums/cathedrals because they shut by 5-6pm.

2) Coffee: Everywhere you would find these amazing coffee shops dotted all over the country. The Italian’s sure know how to make and appreciate their coffee

3) Gelato: Ditto for Gelato! There were shops everywhere and we even saw people eating gelato as early as 10:30am! We actually did too when we went to visit From ;-)

4) Fashion: Milan of course is the mecca of fashion and all through out Italy, people are impeccably dressed. In fact we were given dress codes for all our company visits (by our peers, not the companies).

5) Food: The food in general was amazing. I think i’ve had a year’s worth of pasta, pizza and cheese and olive oil! In a lot of restaurants are meals went on for hours… and we always had two main courses (risotto and pasta followed by meat and veggies) which was very unusual. All in all it was a great trip and I highly recommend anyone interested in retail & luxury goods to definitely visit soon!

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South Korea Nostolgia: Cars, Ships and Candy Factories

Halah Touryalai ‘16 Take it in. Enjoy this. No matter how tired you are, or how much you hate getting up this early for the bus, enjoy this because you’ll never get anything like it again. I remember thinking that to myself at least twice during the Chazen South Korea tour last month. By day 3 of the trip, we’d done multiple hours and many miles on our charter bus and had also lugged our bags on a commuter train to the southern coast of the country three hours away. While many of our fellow classmates were partying in Cartagena or sunbathing in Nicaragua, we were up before 7am everyday dressed in suits and ready to talk business. Looking back now I know my subconscious was right: I will never have an experience like Chazen SK again. Yes our mornings were early but every destination was topped by the one prior.

Samsung d'light exhibition space

Samsung d’light exhibition space

On Monday morning we were at Samsung headquarters exploring its d’light exhibition space where all its latest consumer products are on display. Later that afternoon we left the traditional tech company and to check out one of the most innovative tech lab spaces in South Korea dubbed Maru 180. The startup lab stood in stark contrast to the Samsung visit by empowering (and financing) startup companies to take risks and act as entrepreneurs.

Maru 180 headquarters.

Maru 180 headquarters.

By Tuesday, we were greeted by the Mayor of Seoul in the new city hall building.  Mayor Park Won-soon made room for all of us in his relatively medium-sized office, and gave us a quick history lesson about his city’s old and new world dynamic. The next morning at 6:30am we were off to Ulsan and Busan to check out the Hyundai empire of ship building and automotive production. Conglomerate companies with family roots are not uncommon in South Korea, and Hyundai is no exception. The company has expanded into so many various types of businesses that it’s spun some off including its Heavy Industries operations. HHI is the world’s largest shipbuilding company, and the Chazen group got a chance to see just how big this operation can get. Created in 1972, this company sits on 1,500 acres manufacturing everything from drill ships to submarines. The company’s 7 lines of business include Shipbuilding, Offshore & Engineering, Industrial Plant & Engineering, Engine & Machinery, Electro Electric Systems, Green Energy, and Construction Equipment. The company was originally part of the Hyundai Group but spun off an independent company in 2002. However, the Hyundai family still own a significant portion of the ship business. SAMSUNG CSC Of course a trip to this region of South Korea would not be complete without a stop at Hyundai Motors. The team was able to check out some of the company’s latest models including the Hyundai Equus with interior by Hermes. (shown below)

Checking out Hyundai's latest set of wheels.

Checking out Hyundai’s latest set of wheels.

Just when we thought it couldn’t get better after witnessing Hyundai’s top secret production line facility, we were off to one of the world’s biggest ports in Busan. South Korea’s economy is heavily reliant on its exports. For instance, Samsung and its affiliate companies produce one-fifth of the country’s total exports, and Hyundai is one of the world’s largest car makers. Many of these products are exported on the shores of Busan where the Chazen team witnessed first-hand the mammoth operations required to get products in and out of the country quickly, efficiently and safely. To say the number of shipping containers on site were plentiful would be an understatement. The size of one docked container ship was so massive that it took our bus a full 45 seconds to drive along side it from one end to another.

Port city of Busan is at the heart of the South Korean economy.

Port city of Busan is at the heart of the South Korean economy.

South Korea’s ports are the heart of its economy, and that can be seen by the investment being made in area including a new international airport and new housing units for port workers. Building on the conglomerate business theme is the Chazen team’s final company to Lotte. It’s tough to describe that day without feeling completely nostalgic. The morning drive to the new Lotte World Tower in Seoul was quick. Shortly after arriving Lotte founder and chairman is Shin Dong-Bin joined us as we put on our hard hats and headed to the top of his still-under-construction tower. As we piled into the construction elevator with the man himself, the elevator speed had some of in a state of vertigo. Fear of heights were put aside as Shin Kyuk-ho, a CBS alum, gave some off the cuff advice to those of us in the elevator with him: “Don’t look down.”

Getting ready to ride up to the top of Lotte World Tower.

Getting ready to ride up to the top of Lotte World Tower.

Mr. Shin Kyuk-Ho, Lotte founder and CBS alum, chatting it up with students.

Mr. Shin Kyuk-Ho, Lotte founder and CBS alum, chatting it up with students.

The rest of the day was spent in other areas of Lotte’s business divisions including a mega-luxury mall with an aquarium , and a candy factory. Lotte’s reach is wide–it’s hard not to pick up a pack of gum with out the company’s brand on it. It’s no wonder the entire day was dedicated to all of its successful business operations. Check out this video the Lotte team put together of just some of our day:

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Chazen Italy part 2

So continuing from my last blog post I wanted to share what we did on days 3, 4 & 5 of Chazen Italy.

Outside Gucci

Outside Gucci

As I’d mentioned previously, this study tour was focused on retail & luxury goods and the next few visits were really the highlight of our trip. On March 17th we visited Gucci’s headquarters in a town close to Florence. Gucci, for those who don’t know is a luxury powerhouse, one of the world’s most valuable brands, belonging to the Kering group with about $5 billion in revenue. Upon entering the premises we were greeted with the GUCCI letters emblazoned in Gold and and everywhere in the office were huge photos of their classic handbags. Our group was split into two with one team going to see shoe production and the other going to see the leather goods factory. I was in the latter group.

Animal skins at Gucci

Animal skins at Gucci

The first thing we noticed when we entered were dozens of colored skins – ostrich, crocodile, lizard, lamb, calf – you name it. Full skins can cost upwards of $1000 depending on how exotic they are. Most skins will also come with a tag to prove authenticity and we learnt that luxury companies often own their own animals farms to procure skin. The skins are then colored in various hues – almost any conceivable color is possible. I was just speechless looking at them all. We were then taken shown how these skins are cut and then made into handbags, belts or other leather goods. Each of those products in handcrafted. Right from the bamboo handles that Gucci is so famous for. We were shown how the straight white bamboos are blow torched and then painted into becoming horse shoe shaped handles for their handbags. The paint is apparently made by crushing the shells of certain insects like cockroaches! I guess beauty comes at a price! The entire process was just fascinating.

Bamboo handles

Bamboo handles

Later we were given a presentation by Barbara Rybka, SVP of Digital and we also met with a CBS alum Giorgia Carastro ‘ 11. After a lavish lunch and quick photoshoot, we head to Ferragamo’s office in Florence. Salvatore Ferragamo started off as the shoemaker to the stars and then later expanded into belts, handbags and even clothing. It is a privately held company with sales of $1.5 billion The Ferragamo office was very different to that of Gucci’s. It was a 7 storied ancient building and underneath was a huge flagship store that broke up into multiple sections. Beneath that was the Ferragamo museum dedicated to shoes – the history, the collections, the inspiration and everything in between. Later we had some free time to ourselves so we visited Piazza Michelangelo, Santa Croce and Santa Maria Novella followed by dinner at La Beppa Fioraia.

Ferragamo Museum

Ferragamo Museum

Santa Maria Novella

Santa Maria Novella

The next day we made a stopover in Bologna where we met deputy mayor, Matteo Lepore, before heading to Yoox. Yoox Group is the global internet retailer for leading fashion brands and has recently merged with Net-a-porter (this had not been announced when we visited). Yoox was founded in 2000 by CBS alum Federico Marchetti. It ships to over 100 countries worldwide and has revenue of $0.5 billion. We were given a tour of the three different facilities by Davide Di Dario, operations manager for Yoox.

Matt Lepore

Matt Lepore

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Economic, Cultural, and Ethnic Diversity in Emerging Indonesia

With a full week back in New York to reflect on my experiences in Indonesia, I can’t help but dwell on the implications of the stark differences between our time in Jakarta and Bali. The more I reminisce on our robust economic discussions with the Minister of Finance and breadth of market leadership of the Lippo Group, the more the contrast with the rich cultural adventure we had in Bali begins to crystalize into several interesting takeaways about Indonesia.

  1. Despite its size and potential, Indonesia faces difficult challenges to establishing itself as an economic powerhouse. If a visitor saw only Jakarta, he might walk away thinking Indonesia needs just an investment in infrastructure to establish itself as an economic power. However, the night and day contrast with Bali highlights the geographic fragmentation of the nation, which is much more daunting challenge nationwide than the infrastructure in the capital. For instance, e-commerce is a tremendous area of interest, but can a company like Amazon truly offer two-day shipping to 6,000 inhabited islands each with its own infrastructure issues?
  2. That said, Jakarta may be poised to compete as a regional center of business. I left Jakarta with a strong interest in visiting Singapore and seeing how a more developed Southeast Asian city economy operates. While there are geographic hurdles for the nation as a whole, Jakarta’s infrastructure challenges seem manageable with shrewd planning and wisely-utilized investment. It seems, anecdotally, as though Indonesian talent may be staying or returning home more than in recent history, indicating that the minds may be there to make Jakarta a player in the region.
  3. The challenges Indonesia doesn’t face are as interesting as the ones they do face. Indonesia is a country that is very ethnically diverse and features a tremendous array of cultures and dialects. In addition, it has the largest population of Muslim people in the world, as about 88% of its 250 million people practice Islam. In the 21st century, many other countries that fit these profiles are facing issues of disjointed populations, civil unrest or violence, religious extremism, and other cultural challenges that prevent economic issues from being addressed. This is not the case in Indonesia. Despite cultural differences, Indonesia is largely a unified, harmonious country whose issues are economic, not civic. This speaks volume about the people of this country and its future prospects.

This trip was a great first experience for me in Asia. The opportunity to learn so much about the business environment in an emerging market combined with the utterly unique cultural experience of the Balinese New Year celebrations made for memories I will cherish for years to come. If current or prospective students reading this blog have any doubts about the Chazen experience, I can promise it is among the most enriching I have had.

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