Strome Business Minute With Dr. Jeff Tanner

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. I was on a call with several local business owners talking about the challenges facing our region’s ability to grow. While the world may have seemed pretty good pre-COVID, Hampton Roads was actually last in economic growth among region’s our size. One of the biggest limitations is finding talent – especially skilled trades for manufacturing. To address the issue, the Virginia Economic Development Partnership and the Virginia Community College System announced the Virginia Talent Accelerator, a program designed to recruit and train workers at no cost to qualified new and expanding companies so that they can expand jobs. The services are customized to the needs of the company and the jobs they are trying to fill. It doesn’t stop there, as they also offer ongoing organizational development support to create a culture that optimizes performance. This has been a Strome Business Minute, presented by the Strome College of

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. COVID has hit people of color and their businesses disproportionately. One reason is personal finances. African-Americans are twice as likely to live in poverty, while Hispanic poverty is seventy percent higher which means they don’t have access to health care and are more likely to have underlying health issues. Home ownership is also lower due to credit problems. Similarly, black owned businesses were much more likely to be denied PPP loans because they could not meet the minimum credit requirements. Bank On Hampton Roads is one program designed to help families build financial health. They’ve got a full slate of virtual classes as well as personal coaches who volunteer to help individuals achieve their goals. Bank On is free, go to w w w dot bankon h r dot org to sign up or volunteer. This Strome Business Minute is presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The economic recovery appears stalled out as many indicators of economic health flattened over the past month or so. For example, weekly reports of new unemployment claims show no improvement, whether you look at regular unemployment claims or those made possible by the Pandemic Unemployment Assistance program, which helps those who were self-employed. Similarly, Gross Domestic Product, a measure of the total productivity of our country, is lower for last quarter compared to the previous quarter. But measures of confidence were slowly creeping up through June. Consumer confidence, business confidence, purchasing managers index – didn’t matter, all were inching back up to normal levels before the COVID surge began shutting things back down. But its really a tale of two economies - some industries are as busy as ever while some, like travel, are on hold. This Strome Business Minute is presented by the Strome College

I’m Jeff Tanner and this is a Strome Business Minute. One University of Georgia and two Notre Dame professors recently found that CEOs who were hired and paid at an above market rate outperformed those paid at or below market rates, with market rates weighted by company size and industry. Controlling for a number of other factors, these CEOs had a significant positive impact on their company for their entire tenure. The study focused only on the largest fifteen hundred US firms, according to Fortune magazine. What’s also interesting is that those paid below market also performed lower than the average. Given that the average annual compensation for this group was more than twelve million dollars last year and only a small difference in company performance can mean millions in stock price changes, hiring the right CEO is important. If pay is any indication, boards are making good decisions. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

I’m Jeff Tanner and this is a Strome Business Minute. With COVID, we’ve seen the acceptance of tele-medicine grow rapidly. At the same time, however, the country’s three largest pharmacy retailers, Walgreens, CVS, and Walmart, have either just inked deals to build primary care centers at their stores or are already building their own network of care centers. Walgreens partnered with VillageMD and plans to open five hundred plus locations in thirty markets over five years, with more than half in underserved areas. Walmart already delivers healthcare in some stores and is now building heathcare super centers offering everything from dental to mental health and basic healthcare. They also opened a health insurance company last week and acquired a patient medication tracking platform called CareZone. CVS, who acquired Aetna insurance two years ago, operates eleven hundred Minute Clinics. What they haven’t done is acquire a virtual healthcare provider…yet. This has been Strome Business Minute, presented by the Str

I’m Jeff Tanner, dean of the Strome College of Business, and this is a Strome Business Minute. Massachusetts-based Moderna announced a successful early stage trial for its COVID vaccine, causing stock prices in the NASDAQ-traded pharma to jump more than sixteen percent on the news overnight. The trial was on forty five patients, all of whom maintained COVID antibodies following two injections. The company is beginning large scale trials next week that will test the vaccine on thirty thousand people world-wide. It requires two doses one month apart. Moderna is one of more than a hundred companies working to develop a vaccine but Moderna has been the fastest, the first to also have something ready even for a preliminary trial. If successful, the vaccine would go into production with three hundred million for early next year. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, Dean of the Strome College of Business, and this is a Strome Business Minute. The federal government rescinded regulations that prohibit international students from taking a fully online schedule. The regulations meant that if a University pivoted mid-term to online only, those students have to leave without finishing the term. However, they failed to recognize the financial impact these students have on local economies. According to the US Department of Commerce, foreign students contributed forty five billion dollars to the US economy in twenty eighteen. At Michigan State, international students support an estimated 4700 non-university jobs by living, shopping, and eating there. In Boston, the economic impact of international students is $1.6 billion. And that doesn’t include the impact of profitable higher tuition, as they pay the full rate. Exporting American education is big business, and rescinding those prohibitions is a big economic boost. This has been a Strome Business Minute, prese

I’m Jeff Tanner, and this is a Strome Business Minute. Hotels and related tourism businesses make up a large part of our local economy. The good news is that we’re doing better than pretty much everyone else in the country. In fact, our hotels were the only properties in the country averaging over sixty percent occupancy in any major region last week, off only six percent from last year. In addition, hotel revenues are higher in Hampton Roads than anywhere else in Virginia. In the July fourth holiday week, Northern Virginia revenues were down fifty five percent compared to last year but down only twenty seven percent here. So why is revenue down so much more than occupancy? Because prices have fallen. The average cost of a room is down twenty percent to just under ninety five dollars a night but is on the upswing. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

I’m Jeff Tanner, dean of the Strome College of Business, and this is a Strome Business Minute. While driving up the Eastern Shore, I thought that with the COVID virus and the quality of car sound systems, it was time for drive-in movie theaters to make a comeback. Walmart and the Tribeca film festival people, agree, announcing a partnership to show movies in one hundred and sixty Walmart parking lots beginning next month and running through October. That represents a 50 percent increase in the number of drive-in theaters across the US, with six of the old school style in Virginia. There’s no word yet on what movies Walmart will show or where they will set up theaters but there will be concessions! Walmart has a lot of real estate to optimize and if the movies do well, they may become a permanent fixture. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

The 757 just got a new transportation option to DC, called the ROX – or the Rapid Overland Express. The ROX is a luxury motor coach and, having traveled on something like this in Mexico, I’ve wondered for years why we haven’t seen something like it here. You have wifi, wide leather seats with a small tray table, a coach attendant, and a meal from Taste. The ROX makes the nonstop trip to DC in about three and a half hours from the Westin in Town Center, leaving at 8 and noon, with return trips at 1 and 6. An alternative to Amtrak or flying, it’s definitely a business traveler’s dream; the cost is about the same as mileage for driving yourself, plus you can work or watch streaming movies for free. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Employees with paid sick leave take an average of 5.2 days off a year. Those without paid sick leave only take 3 days. Either way, about 25 percent of sick days are taken to care for someone else. Sounds like an argument for not paying for sick leave. The problem is that those without sick leave are nearly twice as likely to go to work sick, whether it is with the Corona virus or another illness, which then spreads it at work. According to one study, younger workers are most likely to come to work sick because they can’t afford to miss. And many of them are in high customer contact jobs, in retail and restaurants. Now that Corona virus can shut a business down if one employee infects several other employees, maybe every company should offer paid sick leave. This has been a Strome Business Minute, presented by the Strome College of Business, at Old Dominion University.

College Athletics may be amateur sports but it’s also a business, and the pandemic appears to be wreaking havoc. Old Dominion dropped wrestling earlier this year, taking the wrestling community by surprise but all sports are facing cuts across the country. Tennis has been the hardest hit, the only sport nationally with more than four universities dropping the program. With nearly two-thirds coming from other countries, tennis is more international than any sport, even soccer, which means fewer alumni who donate and that may be a reason why it’s dropped so much often. Tim Cass, USTA general manager, argues that programs should engage their communities with youth and adult tournaments and after-school programs, to generate the support they need. But the truth is college sports are expensive and the pandemic an easy excuse to stop the bleeding. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

They say if your neighbor loses a job, it’s a recession. If you lose your job, it’s a depression. When I talk with business leaders, their view of the economy depends on what sector they’re in. And while the economy and the stock market are not one and the same thing, they are related. Shockingly good news on May’s employment numbers led to a stock price surge driven by individual investors. But those same investors grew skittish, fearing more lockdowns in the face of a COVID resurgence in states that tried to re-open too early, and stock prices fell. Those individuals shifted quickly to what Bloomberg analyst Mohamed El-Erian calls “stay at home” stocks, like Netflix and Amazon. Now, the hope is for a Fed action to prop up the market but the bigger needs are the virus and the economy. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Dominion Energy sold its gas pipeline business to Berkshire Hathaway, intending to focus on regulated energy lines in gas and electricity. The deal cleans up a strained balance sheet and also means the end of the Atlantic Coast Pipeline. The problem is that pipeline is needed to prevent lack of supply during periods of high use. Our naval bases bear the brunt because they’re the first to lose access during peak demand so some assets may leave for more stable supply and recruiting new ones is now less likely. The pipeline is also needed to attract and retain businesses. As a low-cost cleaner burning energy source, the gas would also offset the higher cost of wind and solar energy, for a competitive average cost. The stock fell ten percent on the news but will likely rebound as the investor mix changes. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

On Christmas Eve 1926, Wheaties, the Breakfast of Champions, became the first product ever advertised with a jingle. Changing the words to a popular song, it was broadcast on a Minneapolis radio station. The product was actually a mistake – it was created when hot wheat bran was spilled onto a hot stove. But it took nearly three years of trying before the company could make a flake that could withstand packaging and shipping. The slogan, Breakfast of Champions, led to using sports celebrities’ photos, with Lou Gehrig the first to grace the front of the box eight years later. By the end of the thirties, it became the dominant brand, with celebrities from all fields seeking a chance to be on the box, a tradition that continues today. A mistake, a song, and a picture became the dominant brand. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Beef substitutes Impossible Foods and Beyond Meat have really taken off this spring. Impossible’s first big breakthrough was at Burger King with the Impossible Whopper, followed by products sold through Starbucks, White Castle, Red Robin, and Little Ceasar’s, and grocery distribution through Kroger. Now the brand has partnered with Yelp, another company that has done well during COVID, to provide free Impossible breakfast sausage and free marketing help from Yelp services like Connect and Waitlist to top independently-owned diners across the country. Locally, Anchor Allies in Virginia Beach made the list of Yelp’s Top Thirty diners and will participate in the program. Beyond Meat took the opposite approach by gaining grocery distribution first, then restaurants. It’s now available at Dunkin, Carl’s Jr, and TGI Fridays. Yelp trend expert Tara Lewis says plant-based meats are a top trend at Yelp. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

Facebook continues to lose major customers due to its unwillingness to regulate content. Beginning with North Face, the company has lost dozens of advertisers, including Coca Cola, Campbells Honda, Starbucks, Eddie Bauer, and Levis. While Facebook has announced policy changes, groups such as the Anti-Defamation League and the NAACP continue to press for boycotts. Only about one in four boycotts actually result in the desired change, but one study shows that boycotts cost companies about one hundred and twenty million in stock price value over the following two months. Most boycotts ask individual consumers to change their buying habits, who lose interest quickly. In this instance, however, Facebook’s largest customers are boycotting, not individuals, so we’ll see if the desired changes occur. We’ll also see if the boycotting brands are hurt or helped by their stance. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

This is a Strome Business Minute, presented by the Strome College of Business. If your dream is to produce the number one box office movie, it’s now a little easier than normal. In fact, two guys just did it with a movie that cost them nothing to make. Called Unsubscribed, the horror movie was made with all volunteer talent and lasts all of twenty nine minutes. Filmmaker Christian Nilsson and actor Erich Tabach created the movie, then rented out an entire theater. Apparently, there’s this practice where if you rent out a theater, you keep all of the revenue from ticket sales. So Nilsson and Tabach charged themselves over twenty five thousand dollars, which they got back, to sit and watch the movie over and over – three times in all. And that made it the number one movie at the box office on June 10th! This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

This is a Strome Business Minute, presented by the Strome College of Business. If you’re listening to this in your car, what would you do if someone walked out in front of you? Everyone would swerve to miss the pedestrian, even if swerving put you in danger. Research shows that most people would still swerve and take the risk. As a driver, we feel responsible for those around us and try to protect them. But what if you are a passenger in a self-driving vehicle? Should your safety take precedence? Research by Laurian University professor Tripat Gill in the Journal of Consumer Research showed that more people preferred that the car try to save their life than that of the pedestrian, unless it was a child. The research further explains that this is one reason for slow acceptance of autonomous vehicles – the inability to distinguish moral hazards. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.

This is a Strome Business Minute, presented by the Strome College of Business. Even though we’re officially in a recession, some economists are saying the bottom occurred in April and recovery began in May. In fact, the Citi Economic Surprise Index which measures how many economic data points are way off expectations, hit a new record high with positive data coming in much stronger than expected. Most startling was the most recent jobs report earlier this month which showed our economy gaining two point five million jobs instead of losing an anticipated eight million. While still way short of total unemployment, more good news on the job front should come soon due to the expiration of the unemployment bonus. May retail sales also rose at double the expected rate, suggesting the consumer is back. Assuming no national lockdowns, a long slow recovery seems to have begun. This has been Strome Business Minute, presented by the Strome College of Business, Old Dominion University.