Business Model

Who Cares About the BIG 3

On my drive to work this morning, I noticed the flashing digital sign in front of our local Pontiac/Buick dealership. All the advertisement declared massive reductions on prices. MSRP $29k…NOW $21k. MSRP $18.5k…NOW $15k. MSRP $23k…NOW $17.9k. You get the hint.

While taking in the blitz of markdowns, the talk on CNBC radio was the 2nd day of congressional hearings about General Motors, Ford & Chrysler (aka the BIG 3). I began to ponder the following question: What is all the clamor on capitol hill about the viability of the BIG 3?

In a normal business model, if you can’t get the execution right you will ultimately fail. Why would it be any different for the BIG 3? If they have a viable business model, go through legal options of bankruptcy and restructure. Learn from the mistakes and rebuild a better company.

If history is any indicator, the BIG 3 has had a reluctance for change which has led to its dwindling prowess in the auto industry as a whole. At the end of the day, what kind of message would you be sending to consumers if all they saw was that you are no longer worth it?

Business Model

I want to be like AIG!

You read correct. I want to be like American International Group, Inc. (better known as AIG).

As crazy as it may sound, I do wish I had the impact and relevance that AIG has on the world. Their reach transcends 130 countries & jurisdictions, as well as serving commercial, institutional and individual customers.

You may still be pondering the fact that they had a $150 billion loan restructured several days ago. Although their transactional business is in question, this plays directly into why AIG is such a great business model.

What? Huh? Are you kidding?

I wish this was a joke. Let’s evaluate why they are such an ideal model. Have you heard the term “systemic risk” spewed from analysts, government & investors as the underlying reason why this company was rescued, while others were left to go belly up.

According to National Futures Association, systemic risk is defined as “Risk that the financial markets as a whole will cease to operate or will operate inefficiently.” In otther words, to allow AIG to fail would have been catastropic for markets world-wide.

It is for this reason that you could aspire to be AIG. How awesome would it be to know that no matter what you did in life that no one would allow you to fail. Without you, everything would cease to function properly. You essentially become the commidity that no one can live without. WOW!

Business Model

Doctor’s Office – The Perfect Real Estate Model

While I was sitting at the doctor’s office, it occurred to me that they have the perfect business model for real estate professionals, including us mortgage planners. Let me explain.

1. Had to schedule an appointment at the doctor’s convenience.
2. Availability is 8:30 AM – 5:00 PM.
3. Not available on weekends nor holidays.
4. Never has to answer their own phone.
5. Price is never discussed.
6. Recommendation is rarely disputed.
7. Automatic trust in their professional specialty.

Now only if consumers gave as much credence to the guidance of their real estate & mortgage professionals! The industry as a whole would be much improved and gratifying for all parties.