The Well Timed Strategy: Managing the Business Cycle for Competitive Advantage [Hardcover]

Peter Navarro (Author)

Book Description

ISBN-10: 0131494201 | ISBN-13: 978-0131494206 | Publication Date: January 23, 2006 | Edition: 1

Most companies ignore one of their best opportunities for honing competitive advantage: the opportunity to proactively manage business cycles and macroeconomic turbulence. Despite the profound impact that the business cycle has on the fortunes and fate of so many businesses large and small--and the employees and investors that depend on them--not fa single book offers a comprehensive guide to strategically and tactically managing the business cycle. The Well-Timed Strategy shows how to manage not just the business cycle and industry cycles but also today's unprecedented level of macroeconomic turbulence. Peter Navarro shows how to align every facet of business strategy, tactics, and operations to reflect changing business conditions. Drawing on hundreds of examples, Navarro distills clear, simple management principles for managing economic upswings and downswings. Navarro addresses everything from inventory, production, and supply chain management to marketing, pricing, and long-term capital investment. Navarro presents examples from around the globe, ranging from Broadcom and Cemex to Paccar and Xilinx Chinese real estate developers to U.S. small caps. Clear, concise, and exceptionally readable, The Well-Timed Strategy makes complex macroeconomic forecasting easy to understand -- and even easier to act upon.

 

Introduction  xvii

 

Chapter 1: Strategies and Tactics of the Master Cyclist Executive  1

Chapter 2: Countercycling Your Capital Expenditures  15

Chapter 3: The Acquisitive Master Cyclist Buys Low and Sells High  39

Chapter 4: The Art of “Cherry Picking” and Other Well-Timed Tactics of the Human Resources Manager  55

Chapter 5: “Macromanaging” Your Production, Inventory, and Supply Chain  75

Chapter 6: Master Cyclist Marketing Through the Business Cycle Seasons  95

Chapter 7: Pricing the Cycle and Managing Credit and Account Receivables  111

Chapter 8: Proactive Profiting From Oil Price Spikes, Interest Rate Hikes, and Exchange Rate Risks  129

Chapter 9: When You Can’t Beat the Business Cycle, Hedge Its Risks!  149

Chapter 10: Surviving—and Prospering from—the Economic Shocks of War, Terrorism, Drought, and Disease  169

Chapter 11: The Master Cyclist’s Favorite Forecasting Tools  185

 

Concluding Thoughts  211

 

Appendix A: The Master Cyclist Project’s Treasure Trove of Data and All-Star Team  213

Appendix B: A Business Cycle Primer  223

 

Notes  233

 

Index  239

Editorial Reviews

Review

"In The Well-Timed Strategy, Navarro provides a useful primer on business cycle risks and opportunities. Recognizing that business success depends most of all on human capital, he makes the crucial observation that the trough of a recession is the best time to find good people and the most important time to focus on retaining them. This and other insights about investment, production and marketing give todays executives a useful checklist for building and maintaining competitive advantage."

--Michael Milken , Chairman, The Milken Institute

From the Back Cover

Most companies ignore one of their best opportunities for honing competitive advantage: the opportunity to proactively manage business cycles and macroeconomic turbulence. Despite the profound impact that the business cycle has on the fortunes and fate of so many businesses large and small--and the employees and investors that depend on them--not fa single book offers a comprehensive guide to strategically and tactically managing the business cycle. The Well-Timed Strategy shows how to manage not just the business cycle and industry cycles but also today's unprecedented level of macroeconomic turbulence. Peter Navarro shows how to align every facet of business strategy, tactics, and operations to reflect changing business conditions. Drawing on hundreds of examples, Navarro distills clear, simple management principles for managing economic upswings and downswings. Navarro addresses everything from inventory, production, and supply chain management to marketing, pricing, and long-term capital investment. Navarro presents examples from around the globe, ranging from Broadcom and Cemex to Paccar and Xilinx Chinese real estate developers to U.S. small caps. Clear, concise, and exceptionally readable, The Well-Timed Strategy makes complex macroeconomic forecasting easy to understand -- and even easier to act upon.

 

Introduction  xvii

 

Chapter 1: Strategies and Tactics of the Master Cyclist Executive  1

Chapter 2: Countercycling Your Capital Expenditures  15

Chapter 3: The Acquisitive Master Cyclist Buys Low and Sells High  39

Chapter 4: The Art of “Cherry Picking” and Other Well-Timed Tactics of the Human Resources Manager  55

Chapter 5: “Macromanaging” Your Production, Inventory, and Supply Chain  75

Chapter 6: Master Cyclist Marketing Through the Business Cycle Seasons  95

Chapter 7: Pricing the Cycle and Managing Credit and Account Receivables  111

Chapter 8: Proactive Profiting From Oil Price Spikes, Interest Rate Hikes, and Exchange Rate Risks  129

Chapter 9: When You Can’t Beat the Business Cycle, Hedge Its Risks!  149

Chapter 10: Surviving—and Prospering from—the Economic Shocks of War, Terrorism, Drought, and Disease  169

Chapter 11: The Master Cyclist’s Favorite Forecasting Tools  185

 

Concluding Thoughts  211

 

Appendix A: The Master Cyclist Project’s Treasure Trove of Data and All-Star Team  213

Appendix B: A Business Cycle Primer  223

 

Notes  233

 

Index  239

See all Editorial Reviews

Product Details

• Hardcover: 272 pages
• Publisher: Wharton School Publishing; 1 edition (January 23, 2006)
• Language: English
• ISBN-10: 0131494201
• ISBN-13: 978-0131494206
• Product Dimensions: 9.1 x 6 x 1.1 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 4.7 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #968,040 in Books (See Top 100 in Books)

More About the Author

Peter Navarro is a business professor at the University of California, Irvine. His latest book is "The Well-Timed Strategy: Managing the Business Cycle for Competitive Advantage."

He is author of the bestselling investment book If It's Raining in Brazil, Buy Starbucks" and the bestselling audio lecture course "Big Picture Investing: How, When, and Why the Stock Market Moves." His weekly newsletter on the economy and stock market is distributed widely and is available to the public at www.peternavarro.com .

A widely sought-after and gifted public speaker, Navarro has appeared frequently on Bloomberg TV, CNN, CNBC, NPR, and all three major network news shows. Navarro's articles have appeared in a wide range of leading publications, including Barrons, Business Week, Harvard Business Review, The New York Times, The Wall Street Journal, and Sloan Management Review.

Professor Navarro holds a B.A. from Tufts University and a Ph.D. in economics from Harvard.

Customer Reviews

Most Helpful Customer Reviews

5 of 5 people found the following review helpful:

4.0 out of 5 stars Timely Strategies for Various Economic Cycles, February 17, 2006

By 

Donald Mitchell "Jesus Loves You!" (Thanks for Providing My Reviews over 109,000 Helpful Votes Globally) - See all my reviews
(VINE VOICE)    (HALL OF FAME REVIEWER)    (TOP 100 REVIEWER)   

This review is from: The Well Timed Strategy: Managing the Business Cycle for Competitive Advantage (Hardcover)

Most business people who went to college were exposed to the principles of microeconomic analysis at some point. But most don't apply what they learned to their businesses. Professor Navarro's book is a lively look at some of the opportunities that are presented by adjusting your timing to buy low and sell high for:

- capital expenditures
- acquisitions
- hiring people
- adjusting your supply chain
- marketing (especially advertising and promotion)
- extending credit and collecting receivables
- dealing with volatility in raw materials, interest rates and foreign currency
- eliminating unnecessary risks when the environment is clouded
- dealing with natural calamities and wars

In addition, the book explains a variety of economic analysis tools that have proven to be helpful for business people.

Each chapter is clearly outlined and summarized. The key points are illuminated by vignettes about successes and flops (usually among those who ignored risk or didn't think it through properly).

The writing style is popular, rather than academic. You'll feel like you are reading a series of articles from the local business pages rather than a professor's book.

Much of the research for the book was done by students. That gives the book a lot of breadth. The weakness of that approach is that sometimes the students and Professor Navarro don't quite get it right.

I began to get nervous when Moore's Law was misstated as saying that the number of transistors on a chip double every year . . . rather than every two years. That concern increased when I read examples that I knew well from personal experience. The description of what happened and the reality were at odds. For instance, the famous case of Procter & Gamble losing on a derivative contract purchased from Bankers Trust is characterized as a bet against the bank by the soap maker. The relationship between the two wasn't like that at all. Bankers Trust was offering a way to reduce interest rate risk in a very complicated contract. Bankers Trust was supposed to be looking out for P&G. As the contract started to fall apart, Bankers Trust didn't play that fiduciary role. P&G was right to sue and Bankers Trust was right to take half the loss. Kmart's decent into bankruptcy is described as being totally due to cutting advertising. I'm sure that played a role, but Kmart's problems were bigger than that.

If you don't take the details of the examples too seriously, this is a valuable book. It's mostly aimed at those who are new to business such as business students and young entrepreneurs. But some seasoned managers in companies that don't use microeconomic analysis will find useful perspectives as well.

I don't know of a better book on how to adapt spending to various cycles. If that subject interests you, read this book.

2 of 2 people found the following review helpful:

4.0 out of 5 stars Making informed decisions on when to move (and when not to)..., December 6, 2006

By 

Thomas Duff "Duffbert" (Portland, OR United States) - See all my reviews
(VINE VOICE)    (TOP 500 REVIEWER)    (HALL OF FAME REVIEWER)    (REAL NAME)   

This review is from: The Well Timed Strategy: Managing the Business Cycle for Competitive Advantage (Hardcover)

There are plenty of business books that tell you *what* to do and *how* to do it, but few which talk about *when*. That's the key difference in Peter Navarro's The Well Timed Strategy: Managing the Business Cycle for Competitive Advantage. By understanding the timing of business cycles, a business person can make moves that position them well for the coming up- or down-tick in the economy.

Contents: Strategies and Tactics of the Master Cyclist Executive; Countercycling Your Capital Expenditures; The Acquisitive Master Cyclist Buys Low and Sells High; The Art of "Cherry Picking" and Other Well-Timed Tactics of the Human Resource Manager; "Macromanaging" Your Production, Inventory, and Supply Chain; Master Cyclist Marketing Through the Business Cycle Seasons; Pricing the Cycle and Managing Credit and Account Receivables; Proactive Profiting from Oil Price Spikes, Interest Rate Hikes, and Exchange Rate Risks; When You Can't Beat the Business Cycle, Hedge Its Risks!; Surviving - and Prospering from - the Economic Shocks of War, Terrorism, Drought, and Disease; The Master Cyclist's Favorite Forecasting Tools; Concluding Thoughts; The Master Cyclist Project's Treasure Trove of Data and All-Star Team; A Business Cycle Primer; Notes; Index

Navarro argues that a close examination of the business cycle (becoming a Master Cyclist) can help you make the right choices for your business in terms of when to do certain things. Based on economic forecasting tools (covered near the end), it's possible to have a better than average view into where the economy is headed, whether it's a recession or an expansion. These indicators, when followed, almost appear to make you look like a bit of a contrarian. If a booming economy has signs of an oncoming recession, the cyclist will take actions like dramatically cutting back on capital expenditures. Most other businesses will still be spending like there's no tomorrow. But when the economy turns, these spending companies are caught with large debt payments with high interest. The cyclist, however, is sitting on a pile of cash at a time when cash flow is king. Continuing to follow the indicators can show when the recession is starting to ease. The spending companies are all cut to the bone at that point, while the cyclist is able to start expansion with little competition and cut-rate pricing. Same with advertising... Spending on advertising at the peak of the recession can often be more effective as everyone else has cut their ad budgets. Fewer voices, more visibility. Then when the economy turns, guess who has mind share heading into the recovery?

I think the points made here are very valid and bear consideration. I will admit to thinking on more than one occasion that "hindsight is 20-20" when reading some of his examples. Granted, many of the bone-headed moves *were* just plain ill-advised and stupid. But at the time, you don't have the luxury of knowing how the story turns out. Also, many of the company demises outlined here are presented in such a way that it makes it look as if there was a single reason for the collapse. In reality, company failures are normally a combination of things, not just a single failure to do (or not do) something. In any case, the point remains that there are economic signals available to executives that are more often right than wrong. Ignoring them because you have a hunch or you've been reading your own press releases doesn't usually turn out to your advantage.

This is an interesting book to add to your business bookshelf, and it can definitely help you chart your course in these strange economic times...

1 of 1 people found the following review helpful:

5.0 out of 5 stars A well-timed review of this book may help you weather the economic storm, March 16, 2009

By 

Rebecca Clement "Publisher, Soundview Executi... (Philadelphia, PA) - See all my reviews

This review is from: The Well Timed Strategy: Managing the Business Cycle for Competitive Advantage (Hardcover)

Predicting the weather is part science and part art, but it requires an in depth understanding of weather conditions, phenomena and pattern recognition. Meteorologists spend several years studying these cycles, and they rely on advanced radar systems and computer modeling software to help identify storm fronts so people can evacuate or beautiful high pressure systems that people can enjoy. Peter Navarro's book titled - The Well-Timed Strategy - takes a similar tact at predicting business patterns, economic cycles and enterprise turbulence. Soundview recommends this read because it not only identifies tools that can help you sidestep micro-and-macro-market disasters, it also helps you align all aspects of your business to surf the cycle rather than be a casualty in its wake. This book is jammed with helpful insights regarding customizing your business to adapt to cycle change; operations and inventory management; negotiation maximization as well as best hiring strategies - to name a few. Given the current state of the economy and market uncertainties, this book is definitely worth a look to help you weather the storm.