The Real Spanish Economy đź‡Şđź‡¸âš–️💶

A thriving start-up, a world-renowned economist, a country’s largest airline and most powerful bank. These are just some of the different perspectives that we got to hear from this week in Madrid. Each Spanish leader we had the chance to meet with offered different financial insights about the Spanish economy and how it affects their work.

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CBS with Daniel Lacalle – By Patrick Sofen

The economy of Spain is the world’s fourteenth-largest by nominal GDP, the fifth largest in Europe, and it is also one of the largest in the world by purchasing power parity. It is however often cited for high unemployment and taking off the entire month of August. In our first meeting with TV analyst Daniel Lacalle, we quickly learned that this unemployment number (occasionally in the 20 – 25% range) is actually much lower based on how they calculate full-time employment and the underground employment. For example, the current unemployment rate of 17% would actually be 12% if calculated the same way as the US.

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CBS & Geoblink CEO Jaime Sánchez-LaulhĂ© – By Patrick Sofen

Geoblink, led by Jaime Sánchez-Laulhé, a CEO with an MBA, also touched on the differences of trying to make it as a start-up in Spain versus Silicon Valley. He noted 2 key differences in working in Madrid versus the Bay Area. One, wages for software engineers are much lower and less competitive than SF making it more sustainable to be a start-up. Secondly, there is much stronger company loyalty in Spain. Because of government regulations that make laying off employees very expensive, people then do not regularly switch companies because the hiring process is much more difficult. He, in fact, has only had one employee leave in 3 years with the company and a staff of 40.

It’s been exciting to learn about the pride and power of the Spanish economy.

That’s it for now.

¡Adios!

-Patrick Sofen ’19-

Brazil Tour Conclusion

Joe Qiao ’17

Sitting in the hotel room in Rio and listening to the waves hitting the shore, it is hard for me to believe that our Brazil Global Immersion trip is over. Our 7 day trip was so packed that I felt I have been in Brazil for a much longer time. We ended up completing all 8 company visits and a site visit to Rio Metro Control Center. The schedule was intense but I think we achieved what we wanted for the trip. The company visits were well designed. Even with 9 visits, I can still tell what we have learned from each company.

To conclude how our trip went, I’d like to share with you our experience from 2 angles- the business professional aspect and the social/ cultural/ entertainment aspect.

I think the company visits were so well planned that I can hardly give constructive feedback (I probably still will come up with something so that Prof. Singh doesn’t give me a P on this class). I really enjoyed the Natura, Azul, Suzano, BNDES visits. These companies all have their presentations updated for our trip and the presenters were very knowledgeable about their business. I am surprised that we had good communications given the language barrier. Our peer classmates asked so many interesting questions that we almost always ran out of time during the presentation, not to mention Prof.Singh’s double-shot questions made it impossible to finish the session on time (kidding).

The big surprise for me was how well organized the companies in Brazil are. Before the trip, I imagined that for a developing country which is deeply into recession, the companies must be struggling to keep their forms. The reality was that the companies we visit acknowledge the recession but all had very long-term view on the economy and outlook. For example, Natura has a strong sense of being environmentally-friendly despite of the downturn. Azul has an aggressive growth plan and is looking to capture more market share. Suzano is innovating to be more efficient. I see a lot of potential in Brazil after the company visits. However, I also noticed many obstacles that Brazil has to overcome before it develops further.

Our stay in both Rio and Sao Paulo was good. We went to fine dining and did sightseeings. However, after talking with local tour guides, I realized that what we saw in Brazil was just a tiny piece of the pie. We did not really feel how the “regular” Brazilians live. Some of the old and deserted buildings in downtown area reminds me that the country is not equally developed. Many parts of the city is so well-developed that if you told me that I was in California, I would believe it. However, looking up into the mountains, we saw favelas. That immediately reminds me of the famous movie- City of God. We probably will get a more balanced view of Brazil if we watch the movie after the company visits. I think the inequality really created a world of problems to Brazil- violence, a lack of spending power despite a decent average income level, and poverty. There is also another problem with Brazil (similar to Greece) – expensive pension and labor protection. The country pays too much to workers and the high labor cost stole away the companies’ profit. The labor protection also kills people’s motivation to thrive.

Overall though, I do think that Brazil will continue to grow in the long-run and remains an attractive investment choice for international investors. You can either pay 27 times P/E for a company listed in the US or you can pay a 5 times P/E for a company in Brazil. I would place my bet on Brazil!

 

 

 

Brazil Company Visits

Joe Qiao ’17

I would like to first respond to my presumptions from my previous blogs. One of my observations during the weekend was that Sao Paulo was a quiet and calm city. I wanted to see if the city will become hectic on workdays like other similar size cities around the world such as Tokyo or Shanghai. After two days touring around the city, my observation tells me that Sao Paulo is indeed a calm city. We had traffic but nothing like those in New York. We saw people on the street but nothing like those seen in Beijing. We see some high-rises but nothing like those in Hong Kong. Like I said, Sao Paulo has its unique charm from the relax and calm environment. I do have a question. Where are the 20 million people? !

The second observation was that Brazil does have a large income gap between the rich and the poor. Brazil’s GDP/ Capita is slightly over $10k, which is almost doubling that of China. However, the rich part of the city looks like any developed countries around the world whereas there are still many slams in and around the city. I can see why it is such a priority for the Brazilian political leaders to address the inequality problem in the society. I was told that Sao Paulo and the Southern states are considered the wealthiest part of the country. The Northern states and Northeastern states are in very bad shapes.

Back to the topic of company visits. I have previously attended world tours in a few cities but I have to say that the company visits in Brazil so far are the most professional and well-prepared. The company presentations were full of interesting content. For example, we had so many questions during our Natura and Suzano visits that we run over our schedule in almost every session and had to rush through our plant tour. Sadly we didn’t even get to shop at Natura after all the talks about their all-natural and environmentally-friendly products. We had a great time regardless. I was pleasantly surprised that the companies were so willing to receive us and spent a lot of effort giving us the best experience. The CEOs of both Natura and Suzano gave us warm welcome and high level company officials gave speeches and took us on the tour. We asked so many questions during the presentations. Of course the best questions always came from Professor Singh’s “I have two questions for you”.

My favorite experience was seeing the wood logs turning into packaged A4 paper at Suzano’s factory. Learning about how the company became so efficient made me wonder if I still want to work in Finance after graduation.

We also had a great time at Ambev and learned a lot about beer market in Latin America. We had a happy hour in their office and enjoyed some good food and beer. One of my takeaways was the Zero-Alcohol beer taste just like a regular beer!

And of course, I have to show off my favorite picture from today!

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Great experience so far and I look forward to seeing Rio tomorrow! Stay tuned.

First Day in Brazil- Downtown Sao Paulo & Best Steak in town

Joe Qiao ’17

After 6 hours of flight from Bogota, I arrived in Sao Paulo International Airport. It was 12am and I found the ATM machine in the airport charging an eye-opening 24 $R fee for withdrawing cash… Not a good first impression, at least not yet.

Our group met up at 2pm and went on a city tour. I have to say that Sao Paulo is far more calm and charming than I expected. Maybe the Bogota experience was too hectic but I found Sao Paulo is like a relaxing giant. The streets are busy but not overly crowded for a city with 20 million population. I will have to confirm my feeling tomorrow since today is Sunday.

The downtown Metro Catholic Church is a landmark. I was surprised that such a beautiful historical district is deserted. It is different from many of the “Plaza de Armas” in other Latin America countries. It is calm and beautiful. Our tour guide Lee did a great job explaining the history and how coffee made a huge contribution to the wealth of people in Sao Paulo.

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We also went to the Batman Alley (Beco de Batman). Many street arts, bars, and tourists gave Sao Paulo a more lively image and strong contrast to downtown area. We spent half an hour taking the perfect pictures here.

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We had dinner at well-regarded Figueira. The steak was amazing and I really regret having had a heavy lunch. I still managed overdosing both beef and watermelon though. The dinner ended with a few of us playing some high-intensity drinking games. Overall, a great start and we look forward to the first day of company visits (not so excited about getting up at 6am).

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Chazen Brazil GIP Read more

CBS visits Bavaria’s Capital City

The CBS Chazen Germany tour started off with a Segway/electric bike tour through Munich. The group made its way through the city center and maxvorstadt.  During the tour they saw the Eisbach wave, various museums, TUM, and other landmarks. This was followed up by a three-course welcome dinner at Kafer Schanker.

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On Sunday, the group woke up bright and early to rent some BMW performance cars and drive out to the Neuschwantein Castle about 2 hours outside Munich. After a guided tour through the castle, the students then headed out for a tour of the BMW Welt and Museum- a multi functional customer experience exhibition facility where customers can experience the automaker’s various model lines and even take delivery of their cars.  The students learned more about BMW’s history, the company’s focus on design and the driver, as well as the architecture of the Welt itself.  The day was capped off by a visit to the Hofbrauhaus (Munich’s oldest beer hall).

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Professor Farrokhnia and Dr. Helmut Schonenberger speak to students before entering the Makerspace

The next day, began  with a morning trip to the Technical University of Munich’s Garching Campus for a visit to the UnternehmerTUM -the university’s center for innovation and entrepreneurship.  The students toured the Makerspace- a unique facility that allows the public to rapidly build and prototype.  The space features woodworking facilities, 3D printers, and textile stations. The Columbia students along with TUM Engineers then participated in a design sprint -led by Professor Farrokhnia-designing the perfect remote control in 2 hours.

 

 

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3D Printed Race Engine Mold at EOS

The group then visited EOS – a leader in 3D printing and additive manufacturing. The group learned more about the company from Head of Sales- Denis Demirtas- they sampled 3D printed items such as a titanium Formula 1 Pedal.  They then toured the company’s headquarters, and observed a range of polymer printers and metal 3D Printers before returning to Munich.

 

 

 

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Testing out the equipment at eGym

In the evening, the group visited eGYM- one of Europe’s fastest growing startups focused on the fitness hardware and software space. After a brief presentation by Chief Engineering Officer- Christian Schraml- the group tested out the gym’s tech-enabled gym equipment and enjoyed dinner while mingling with team members and investors.

Overall a great first city to visit during the trip. Now onward to Stuttgart

Diego Cuenca ’16 Germany 2016

Real Estate in China: Just Build It

Heavy mist and grey skies greeted us as we walked off the plane in Guangzhou, China. The same climate bid us goodbye as we drove to Shenzhen one day later.

The last two days in southern China, first in Guangzhou then in Shenzhen, have been fast-paced as we’ve visited 7 major leaders in the real estate landscape here. The contrast between Singapore and southern China is stark. Singapore is a small city-state with a population of 5.4 million people. Guangzhou, largely recognized as the world’s manufacturing center, boasts a current population of 14 million and is one of China’s 5 National Central Cities. Singapore is pristine. Guangzhou is noticeably a busy, less manicured manufacturing hub and exhibits signs of development. There is a far greater number of cranes in the sky in Guangzhou and Shenzhen than there are in Singapore. Construction is around every corner, largely because land owners must develop newly-purchased land within 2 years of purchase and understand that building income-producing real estate assets is a safe harbor compared to holding cash that may lose value against other international currencies.

We were fortunate enough to visit the the Ping An Financial Center – a 600-meter (1800-foot) Class A office building, which is soon to be completed. This building is the third largest in China and is due to open in April. It will house Ping An, a large regional life insurance company, and several high technology and finance companies. Most importantly, its construction marks the creation of a structural icon in southern China, much like the Empire State Building is in New York City. In fact, the building’s ownership originally requested it look identical to the Empire State Building and subsequently scrapped the idea after viewing the model and deciding that the scale and shape of the structure didn’t quite match the surrounding real estate. The building is 118 floors and boasts an observatory: the first in Guangzhou and undoubtedly a future major attraction and revenue source. We donned hard hats through the construction site, boarded one of 4 double-stacked elevators and travelled to the 56th floor where we experienced the leasing team’s impressive marketing video on floor-to-ceiling screens all around us. We were 1 of 15 tours that day.

On the social front, the LN Garden Hotel in Guangzhou hosted a happy hour for our group, complete with a live band, a dim sum bar, a noodle bar, a full dessert table and a party bus. After a long day of traveling from company to company, this was a welcome surprise! An even better surprise occurred when our resident singer requested Frank Sinatra’s New York, New York and took the stage to serenade us all for the next 5 songs. Dancing en masse ensued. Pictures are of course provided below. Who knew we had so much CBS talent in our group?

Nicole Atoyan ’17

In 33 #pictures – SĂŁo Paulo & Rio de Janeiro

Reuben Gan, CBS ’16

SĂŁo Paulo (Jan 17-20, 2016)

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Day 0 – Visiting the quickly gentrifying neighbourhood of Vila Madalena.
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Pop-up block parties in the neighbourhood of Vila Madalena.
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Company #1 – Natura Cosmetico’s headquarters in Cajamar, Sao Paolo.
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Glass is abundant at Natura’s HQ, promoting one of the company’s key values & principles – Transparency.
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Laura Burkey, CBS ’16 tries on the Natura’s cosmetics line.
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Samar Estephan, CBS ’16 tries out a Natura hand lotion.
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Andy Zheng CBS ’16 browsing the fragrance section of Natura’s mock retail store.
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Men, a natural target market.
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Company Visit #2 – As we learnt, Azul’s competitive advantage as Brazil’s no.3 carrier is owning networks of connecting flights that GOL & TAM can’t compete with.
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Fun Fact – Azul is known for their gummy candy planes. Children often ask their parents for this when they know they’re flying. How is that for a cost-effective CRM strategy?
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Company #4: Donning safety hats & goggles to tour the Suzano Paper & Pulp factory, the global leader in producing Eucalyptus tree-based paper products.
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Company #5 – B2W, Brazil’s leading e-commerce company, furnished with plenty of entertainment.
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CBS-ers taking last shots at Sao Paolo. Will one of us win the Chazen Travel Photo contest?

Rio de Janeiro (Jan 20-22, 2016)

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Company #7 – BNDES takes us through what it takes to work at Brazil’s leading development bank.
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The Famous Cathedral de San Sebastian in Rio De Janeiro.
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The iconic PetroBras building in central Rio.
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Lunch at the historic Confeitaria Colombo, a taste of colonial Rio.
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Company #9 – The Operational Centre of Rio De Janeiro, a world class live database tracking weather, traffic and crime to mitigate tim-sensitive issues such as mudslides. (picture by Vitor Selles, CBS ’16)
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Company #10 – Beleza Natural prides itself for serving the needs of communities of Brazilian women with intensely curly hair, giving it their signature “relaxante” treatment for more relaxed, softer and shiner hair for better confidence 🙂
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Co-Founder of Beleza Natural, Leila Veliz – “Working at McDonald’s was my first MBA”, on understanding the need for a continuous flow system in running an operations-based service business.
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“Be beautiful and free!” Fun fact – All Beleza Natural models are either customers or staff; the company believes in realistic, everyday beauty. All smiles @ Erin Williams, CBS ’16
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Lesson #1 (from Core Operations Class) – An “assembly-line” (Ford model) process in action. In case recruiting doesn’t go according to plan…
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Operations Strategy lesson no.2 – some assembly lines are less efficient than others..
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And some others…

Bonus: Post-Chazen Hangout @ Rio de Janeiro (Jan 23-25, 2016)
(conveniently-timed as Hurricane Jonas hurled through NYC)

#Advice for future Chazen travelers – book the latest flight back! You won’t regret it 🙂

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The Christ Redeemer. Photo courtesy of Johnny Yaacoub, CBS ’16
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Panoramic chill by Ipanema beach.
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The Selaron Steps, the famous work of a Chilean-born artist in the artsy neighbourhood of Santa Teresa.
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Parque Lage. Brunch with a beautiful botanical backdrop.
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The Orquestra Voadora – world-renowned marching brass band practicing for the Rio Carnival. If we could only stay another week..
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Breathtaking view of Rio De Janeiro from Sugar Loaf mountain.
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On the very last day, with the Sugarloaf Mountain as the backdrop.
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Tchau Tchau! (bye bye)