Tag Archives: W.P. Carey School of Business

GLOBALMED

Spirit of Enterprise winner: GlobalMed

GlobalMed earned the U.S. Bank Emerging Entrepreneur Award this year at the W. P. Carey School of Business at Arizona State University’s prestigious Spirit of Enterprise Awards.

In 2002, when Joel Barthelemy started the business that would become GlobalMed, he made imaging equipment for quality assurance in the semiconductor industry. “We did about $1 million a year in sales,” Joel recounted. “Just enough to keep the doors open.”

The company’s very fortuitous move into telemedicine came at the suggestion of a Tulane University pathologist. Joel took his advice and in April, 2005, GlobalMed delivered its first system: cameras and software for the first remote pathology consult, at Tulane.

Today, GlobalMed continues to develop the software and manufacture the equipment that makes telemedicine possible. “To date, we have installed well over 2,000 telemedicine systems in 55 countries,” Joel explained. “We provide patients with access to healthcare wherever there’s an internet connection.” He added, “We’re changing the healthcare system in the U.S. and globally.”

A story illustrates that fact quite poignantly: a woman in Minnesota was fishing with her kids and grandkids when she had a stroke. They rushed her to the community hospital, but it didn’t have the resources to meet her needs. So she was taken via air ambulance to the nearest stroke specialist, but by then she already had permanent paralysis and dementia.

In contrast, when the mayor of rural Copper Queen, Arizona had a stroke and was similarly rushed to the community hospital (which also didn’t have an in-house stroke specialist, but did have a GlobalMed system) he was seen within minutes by a specialist at the Mayo Clinic in Scottsdale. The mayor has fully recovered.

Name of business: GlobalMed

Nature of business: Develops and manufactures healthcare IT systems

Address: 15020 N. 74th Street Scottsdale, Arizona 85260

Web: GlobalMed.com

Founded: 2002

Number of employees: 107

TOTAL TRANSIT

Spirit of Enterprise winner: Total Transit

Total Transit earned the The Spirit of Enterprise Innovation in Entrepreneurship Award this year at the W. P. Carey School of Business at Arizona State University’s prestigious Spirit of Enterprise Awards.

When Total Transit CEO Craig Hughes bought a small airport cab company in 1984, he had only ridden in a cab twice, never in Phoenix. Needless to say, he had to learn on his feet, and learn quickly.

He did, and today Total Transit is a cab company unlike any other. For starters, the company manages both public and private transportation services, including Discount Cab, express route and paratransit service for Valley Metro, and service for many of the largest Medicaid and Medicare providers in the region. It’s a model Total Transit hopes to see spread. “We are truly committed to integrating and managing public and private transportation services in a new way. Our goal is to create the most efficient, cost-effective, and environmentally responsible transportation network possible.”

One of Total Transit’s competitive differentiators is its transportation management system. “We have seven IT developers writing the software that keeps us competitive.” In the public arena, where governments are trying to do more with less, “efficient design, effective integration, and responsible management” are critical to maximizing taxpayers’ investments.

In an environment in which many transportation services companies are struggling, Total Transit has flourished, growing 25-35 percent annually over the last few years and set to grow more than 40 percent this year. That growth comes in part from the company’s commitment to its strategic plans, and in part from its stand-out customer service. “Phoenix is a unique market because customers choose who to call. People call us specifically because they know our high standards.”

Name of business: Total Transit, Inc.

Nature of business: Transportation services

Address: 4600 W. Camelback Rd. Glendale, AZ 85301

Web: TotalTransit.com

Founded: 1984

Number of employees: 300

 

180 DEGREES AUOTOMOTIVE

Spirit of Enterprise winner: 180 Degrees Automotive

180 Degrees Automotive earned the Hahnco Companies Special Achievement in Entrepreneurship Award this year at the W. P. Carey School of Business at Arizona State University’s prestigious Spirit of Enterprise Awards.

When Sarah “Bogi” Lateiner decided to open her own auto repair shop, she “had no business plan, no money.” What Bogi did have was a passion and a talent for fixing cars and taking care of people.

With a focus on women and minorities – customers who have traditionally been neglected or exploited by the auto repair industry and feel particularly intimidated by it – 180 Degrees Automotive grew rapidly, doubling each year after the first. “I was booked out two weeks in advance, but I knew that growth was not sustainable, that I was succeeding despite myself,” Bogi explained.

So she decided to learn how to be a business owner. “You name it, I did it – business books, training conferences, success coaches – but I didn’t like what I was learning. It was all about focusing on financials, structure, systems. I was scared that it would take away my passion and creativity.”

Despite her fears, Bogi stuck with it and has discovered that focusing on the numbers and the systems behind her business actually allows her more time to do the things she’s really passionate about. That includes moving 180 Degrees Automotive into a new building, which she owns, teaching car care classes, and co-hosting a national all-women car repair TV show.

The lasting success of 180 Degrees Automotive doesn’t come from the fact that the company focuses on serving women, or the fact that most of its mechanics and service advisors are women. “Being women in this industry may help to bring people in the door, but that’s not what keeps them here,” Bogi explained. “We still have to provide excellent service and go above and beyond to earn, and keep, the trust of our customers.”

Name of business: 180 Degrees Automotive, Inc.

Nature of business: Automotive repair

Address: 545 W. Mariposa St. Phoenix, AZ 85013

Web: 180auto.com

Founded: 2006

Number of employees: 6

education.business

Penley Appointed President of Thunderbird

The Board of Trustees announced that Larry E. Penley, Ph.D., has been elected president and chief academic officer of Thunderbird School of Global Management effective Thursday, November 1, 2012. The appointment  follows a search that attracted top-tier candidates from both business and academic organizations.

Dr. Penley’s record of results over a distinguished 35-year career makes him a great leader for Thunderbird. As president of Colorado State University, he reversed declining enrollment and oversaw the doubling of fundraising. As dean of the W. P. Carey School of Business at Arizona State University, Dr. Penley led the creation of a strategic plan that produced a top 25 ranking among public MBA programs.

Dr. Penley also applied his learnings for diplomacy and management skills as chairman of The Association to Advance Collegiate Schools of Business (AACSB), a world leader in accreditation services. INROADS Arizona and the Greater Phoenix Economic Council have honored Dr. Penley for his service.

As a leader, Dr. Penley’s extensive overseas experience gives him great passion for Thunderbird’s global mission. He has lectured on four continents, speaks Spanish, and has held faculty and administrative roles in Mexico and Venezuela. While at ASU, he also oversaw the launch of successful MBA programs in Chinaand Mexico.

“Thunderbird is very fortunate to have Dr. Penley at the helm,” said Ann Iverson, Chair of Thunderbird’s Board of Trustees. “He is a lifelong learner who embraces innovation, fosters collaboration, and welcomes diverse viewpoints.”

photo

Top Arizona Businesses Win Spirit of Enterprise Awards

As Americans talk about how to improve our economy, we keep hearing how small businesses and entrepreneurs have to lead the way in the recovery. Today, the W. P. Carey School of Business at Arizona State University honored five of the state’s best businesses for creating jobs, contributing to charities and introducing innovation. They’re this year’s winners of the prestigious Spirit of Enterprise Awards.

“What is striking about this year’s group of finalists and winners is that these entrepreneurs have chosen incredibly difficult industries and excelled where others have failed,” says Gary Naumann, director of the Spirit of Enterprise Center at the W. P. Carey School of Business. “They are recognized today because of their hard work, dedication to the community, and great entrepreneurial stories.”

Hundreds of Valley business and community leaders attended today’s awards luncheon at the JW Marriott Desert Ridge Resort & Spa in Phoenix, where the winners were announced. The finalists’ impressive and often emotional stories were shown on video, as the firms were recognized for ethics, energy and excellence in entrepreneurship.

The 16th annual Spirit of Enterprise Award winners are:

180 Degrees Automotive – The Hahnco Companies Special Achievement in Entrepreneurship Award. This woman-owned, full-service auto repair center caters especially to women and minorities. The company has moved to bigger locations four times in six years, provides free car classes to women, hosts an art exhibit, gives free rides home, and leaves a gift in each car with each visit. It also makes a notable commitment to “green” business practices and community causes.

Daphne’s Headcovers – The Spirit of Enterprise Overcoming Adversity Award. This novelty golf-club cover business was started when the owner was just 16 years old, and it had to address major growth issues when business shot up 400 percent in just one quarter. Daphne’s now serves fine resorts and golf shops in 75 countries, despite the recession that’s hit the golf industry hard. The company has covers in the bags of more than 200 touring pro golfers and offers customers a lifetime guarantee to repair or replace its products for free.

GlobalMed – U.S. Bank Emerging Entrepreneur Award. This booming company offers telemedicine solutions like innovative cameras, medical devices and software, so health practitioners can provide care to remote patients via telecommunications or satellite. GlobalMed made Inc. Magazine’s 2012 list of the nation’s 500 fastest-growing private companies. It also made large donations to charity, including the Marine Corps Toys for Tots Program, the Strike Out Child Abuse Walk and the Migrant Clinicians Network.

LawLogix Group – Gary L. Trujillo Minority Enterprise Award sponsored by Blue Cross Blue Shield of Arizona. This fast-growing provider of immigration, I-9 and E-Verify software boasts a 96.9-percent client-retention rate, low 3-percent employee turnover, and more than 155,000 organizations as customers, including Fortune 500 companies. The minority-owned business also has a nonprofit practice that offers tools to hundreds of nonprofit and community-based organizations, so they can provide some of the same information as expensive immigration law firms.

Total Transit – The Spirit of Enterprise Innovation in Entrepreneurship Award. This comprehensive mobility management company runs the Discount Cab brand throughout Arizona. Total Transit has the largest fleet of environmentally friendly Prius cabs in North America and also provides innovative Dial-a-Ride services for Valley Metro and many large Medicaid and Medicare providers. It also introduced a Free Ride Back program to keep drunk drivers off our roads, by offering paying customers a free ride back to their car the next day. The company donates to the community through its charitable Total Transit Foundation.

The other Spirit of Enterprise Award finalists this year were CyberMark International, Hard Dollar, NJOY Electronic Cigarettes, Optimal Performance Training and Real Property Management East Valley.

These awards are just one focus of the Spirit of Enterprise Center, which helps hundreds of businesses each year. The center offers companies the chance to recruit and meet with top student talent, while also allowing students to get hands-on business experience. One key program, Student Teams for Entrepreneurship Projects (STEP), matches teams of W. P. Carey School of Business students with Valley companies to help tackle real-world challenges and opportunities. Companies can also use the center to access other ASU business resources.

The center is self-funded and utilizes community sponsorships and volunteers to sustain its activities. For more information, visit www.spiritofenterprise.org.

housing.prices

Phoenix-area Home Prices Stable

Phoenix-area home prices stabilized from August to September, but we’re now seeing some other types of movement in the market. A new report from the W. P. Carey School of Business at Arizona State University shows the following numbers for Maricopa and Pinal counties, as of September:

The median single-family home price stayed at $150,000 from August to September, but prices are expected to start rising again this fall.
The overall supply of houses for sale in the market is finally going up – already 24 percent over just the past three months.
Big investors are showing less interest in the market, as the bargains here become tougher to find and some other cities’ housing markets become more attractive.

Though the median single-family home price in the Phoenix area remained at $150,000 from August to September, it is still up more than 27 percent from last year. The median last September was at a low of just $118,000, but it has risen sharply since then. Realtors will note the average price per square foot went up 23.3 percent just from last September to this September, and the report’s author, Mike Orr, expects the upward price movement to continue this fall.

“Prices are firming here as we enter the season when snowbirds return to the Valley,” says Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Now that cooler weather has returned and the normal summer lull is over, prices are resuming their advance with greater speed, though on weaker sales volumes.”

The amount of sales activity has been down, with many homeowners reluctant to sell at low prices. Specifically, single-family home sales were down more than 12 percent this September from last September. However, the situation may change as prices rise, attracting more sellers. Over the last three months, housing supply has already gone up 24 percent.

“Though supply was still down 15 percent from last September, it increased 9 percent just from this August to this September,” explains Orr. “We’re now in a strong growing trend. For example, the number of homes for sale under $150,000 with no existing contract is up to 35 days’ worth, from just 15 days’ worth in May.”

In spite of this, the lower price range remains very unbalanced, with more buyers than sellers. Ordinary home buyers who need financing face tough competition in the form of both multiple bids and investors’ all-cash offers, which are typically more attractive to sellers. At the lower end of the spectrum — homes priced under $150,000 – 50 percent of the transactions are still all-cash. However, the frenzy of investors in the market is beginning to slow, moving on a downward trend.

“The percentage of homes acquired by investors rose significantly between 2011 and 2012, but declined from August to September of this year,” says Orr. “Investor purchases are down from the peak in July and August and will probably decline further.”

Orr also has some news for those who worry about another bursting bubble in the market.

“This market is relatively well behaved,” he says. “Investors are risking their own money, rather than borrowed funds, so risk is being more carefully managed than in the previous boom. Also, ordinary homebuyers drawn into the market now are less likely to regret their actions than those who did so in 2005 and 2006.”

Meantime, foreclosures continue their downward trend in the Phoenix market. Foreclosure starts – homeowners receiving notice their lenders may foreclose in 90 days – went down 18 percent from August to September. Completed foreclosures dropped 31 percent at the same time. Short sales are also becoming less common.

“Lenders are aware of how much prices have increased for the post-foreclosure homes they have sold recently, so they have been requiring higher prices for short sales before they will agree to them,” says Orr.

The most expensive types of transactions — new-home sales and normal resales – are on the rise. In fact, the number of normal single-family home resales jumped 76 percent from last September to this September. At the same time, the number of investor flips, short sales, and sales of bank- and government-owned homes are all falling, and bargains become tougher to find. Orr says the gap between the pricing of “distressed” and “non-distressed” properties has been closing.

Most areas of the Valley are showing double-digit percentage increases in price year over year. However, those with mostly expensive homes or active adult communities are showing only relatively modest annual gains.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/FullReport201210.pdf. More analysis is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

Small Business Leadership Academy

Small Business Leadership Academy: Match Your Negotiating Style To Your Objective

“Playing hardball” is a phrase often used to describe negotiations. The point is the deal — there’s a winner and a loser — and the toughest side prevails.

Hardball is a good game plan under some circumstances — if it’s a one-time opportunity, for example. But what if the client or customer with whom you are negotiating has potential to bring you business long-term? In that situation, driving hard might not be your best approach.

Alan Goldman, a management professor of practice at the W. P. Carey School of Business, is teaching the negotiations classes in the 2012 Small Business Leadership Academy (SBLA) presented by W. P. Carey’s Center for Executive and Professional Development. Drawing lessons from the Harvard Negotiation Project, Goldman is helping students realize a more sophisticated approach to negotiating that goes beyond winner-take-all.

Key to the Harvard system is the theory that there are two broad approaches to negotiating: Theory X and Theory Y.

Theory X negotiators are the hardball players. The process is adversarial and focused on the deal and the bottom line. A Theory X negotiator dominates by wielding power, exploiting weakness and elevating the rational over emotions.

Theory Y negotiators seek to build fruitful relationships. For them, the objective is agreement, so they work on establishing trust. They open with small talk. They’re empathetic, flexible and willing to yield for mutual benefit.

Each style has its place, says Goldman. If the objective is a one-time transaction, then driving Theory X-style for the best deal obtainable, no matter how hard-nosed you have to be, may be the best approach.

But sometimes the greater advantage — and profit — accrues across numbers of transactions. In that case you’d be doing yourself a favor to employ the tactics of a Theory Y negotiator.

Assigned reading in Goldman’s class is one of the classics of negotiating training, the bestselling “Getting to Yes: Negotiating Agreement Without Giving In.” Its lessons are valuable in your personal life as well as business.


Listen to the Podcast:
Match Your Negotiating Style To Your Objective


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.

Small Business Leadership Academy

Strategic Procurement: Developing Supply Strategy

“Knowledge is power,” says Joseph Carter, the Avnet Professor of Supply Chain Management at the W. P. Carey School of Business, and leader of the Strategic Procurement section of the 2012 Small Business Leadership Academy.

For a small company looking to bring on a large company as a client, or keep a large company as a client, cost can be the main component of the relationship. “Price is only one part of the total cost,” Carter remarks. “The four general types of supply costs include purchase price, transaction costs, administrative costs and production costs. “

The large company will first define its category, putting information together, including the strategy for that category. Strategy can include searching out the lowest cost, the quickest response time or the least amount of risk, which relates to the external market complexity. This information should be available at the drop of a hat for the company.

One place the large company will try to squeeze their suppliers is by negotiating a lower purchase price. The purchase price is always important, but it isn’t as simple as just one number. The purchase price includes four distinct factors: profit, semi-variable costs, variable costs and fixed costs.

The large company knows that a very small percentage of its suppliers garner the majority of the purchase dollars. Purchases should be grouped into imperative categories with the understanding that 80 percent of dollars spent will be on 20 percent of the categories.

What does this all mean to the small business owner? Once they understand where they stand as a supplier, they can better understand the bidding processes that they must go through, as well as the pressures they will face. For the small business owner, knowledge is power.


Listen to the podcast.


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about strategic procurement and/or the Small Business Leadership Academy, please visit SBLA’s website.

87693507

W. P. Carey School Honors Top Business Leaders

Three top business leaders will be honored for their contributions to our economy, when they are inducted into the W. P. Carey School of Business Homecoming Hall of Fame this month. The honorees are accomplished executives in the fields of wireless technologies, cruises and nonprofits.

On Oct. 25, the new inductees will join previous honorees from such diverse organizations as the American Red Cross, Motorola, the U.S. Air Force, Wells Fargo Bank, XM Satellite Radio and the Arizona Diamondbacks. This will be the 35th annual event to honor top business alumni from Arizona State University.

“All of these inductees have risen to the top of their industries, demonstrating leadership and achievement in their professions, the community and the business school,” says Robert Mittelstaedt, dean of the W. P. Carey School of Business. “They serve as a clear example to our students that you can reach your goals in any field with a high-quality education, commitment and hard work.”

This year’s honorees are:

William Keitel, executive vice president and chief financial officer of Qualcomm Incorporated – Keitel joined Qualcomm; a leader in cutting-edge wireless technologies, products and services; in 1996. The multibillion-dollar company’s portfolio includes thousands of patents and operations in more than 30 countries. Prior to Qualcomm, Keitel was an executive at telecomm-equipment manufacturer Nortel and PepsiCo. He has won numerous industry awards, including the title of Best CFO in his field from Institutional Investor magazine. He earned his bachelor’s degree in business administration at the University of Wisconsin and his MBA at ASU.

Joseph Watters, founding chairman, Oceania Cruises – Watters has been a key player in the cruise industry for more than 30 years, including his creation of premium cruise line Oceania in 2002. He previously served as president of Crystal Cruises, Royal Viking Line and Princess Cruises, during which time the line’s relationship with the television show “The Love Boat” began. Watters also helped create the China Cruise Center to promote China as a worldwide cruise destination. He has been involved with a number of charities, including the Special Olympics, and is currently on the board of MarineMax, a New York Stock Exchange-listed company. He received his bachelor’s degree in advertising from ASU.

Diana Yazzie-Devine, president and chief executive officer of Native American Connections – Yazzie-Devine has headed up the nonprofit Native American Connections for more than 30 years. The 501(c)3 corporation provides behavioral health services, affordable housing and community-based economic development opportunities to Native Americans in the Phoenix area and tribal communities. It operates 18 service sites, including a one-stop community services center, and serves more than 5,000 individuals and families each year. Yazzie-Devine has won several business awards from organizations, including Valley Leadership and the YWCA. She earned her bachelor’s degree in human relations from Ottawa University and her MBA from ASU.

More than 200 alumni, business leaders and students are expected to attend the Homecoming Hall of Fame event on Thursday, Oct. 25 at the JW Marriott Desert Ridge Resort & Spa in Phoenix. A reception starts at 5:30 p.m., followed by the awards ceremony.

Space is limited, and advanced registration is required. For more information on tickets or sponsorship, go to www.wpcarey.asu.edu/homecoming or call (480) 727-0596.

Small Business Leadership Academy

Small Business Leadership Academy: Understanding Strategic Procurement Practices

Strategic Procurement is a comprehensive, systematic business process to assure that an organization acquires the correct goods and services at the lowest total cost over the long-term of the business operation.

Small- and medium-sized companies can benefit from understanding how large companies approach their suppliers. Those smaller companies need to understand and be able to succinctly describe their value proposition in order to keep the business they have and win new business. In light of the continual push for the large company to lower their own costs, smaller companies may need to get creative to find ways to stay competitive.

“Today, the creation of value often requires careful coordination of activities across the boundaries between functions, business units and firms,” says Joseph Carter, the Avnet Professor of Supply Chain Management at the W. P. Carey School of Business, and leader of the Strategic Procurement section of the 2012 Small Business Leadership Academy.

Suppliers can get stuck concentrating on the day-to-day operations of their companies, ignoring or avoiding the important work of optimizing their existing relationships. It’s while nurturing those relationships that suppliers can discover ways to increase their value to the customer.

This means that just having the lowest price doesn’t always guarantee a contract. A lower price combined with a longer repayment period, plus a quicker fulfillment schedule, could push one company ahead of another. Determining what their value proposition is can be one of the most challenging parts of an RFP process for a small business owner.

Conversely, the large company has decisions to make as well. How many suppliers should they have for any one part? “Rationalize, rationalize, rationalize,” says Carter. “Rationalization doesn’t necessarily mean ‘fewer’; it just means being able to explain why you have the number of suppliers that you have, whether that ends up being more or less than what you have now.”

The supplier/client relationship is ever-evolving. Both parties are looking to lower costs and maximize profits while maintaining a strong and synergistic business relationship.


Listen to the podcast.


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.

95770266

Phoenix-area Home Prices, Supply Slowly Inching Up

Both Phoenix-area home prices and the number of homes available for sale are slowly inching up. A new report from the W. P. Carey School of Business at Arizona State University reveals the numbers for Maricopa and Pinal Counties, as of August:

> The median single-family home price went up from $149,000 in July to $150,000 in August — about 1 percent.
> The median price is up by more than one-third (about 34 percent) from last August.
Supply of available homes for sale finally went slightly up in most areas of the Valley, but overall, low supply continues to limit market activity.

“Overall prices reached a low point in September 2011 and have risen sharply since then,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “We’re experiencing a normal summer slowdown, and I expect prices to continue their advance as we move into cooler months.”

The median single-family home price in the Phoenix area went up about 0.7 percent, from $149,000 in July to $150,000 in August. The current median is 33.7 percent higher than last August, when it was $112,205. Realtors will also note the average price per square foot is up 24.6 percent from last August.

Sales activity has been relatively slow, due to the traditional summer lull in the market and the limited number of homes for sale in the area. Still, there was a small bump up in available supply.

“Supply increased 3 percent from July to August, but the inventory of homes for sale remains well below the average for the last 10 years,” says Orr. “The number of active single-family homes without an existing contract was just over 10,000 for the greater Phoenix area as of Sept. 1, and 77 percent of those homes were priced above $150,000. That inventory should last only about 27 days. At least it’s up from the low of just 15 days of inventory in May.”

Average buyers have to compete for relatively few homes priced under $250,000. They face multiple bids, including those from investors who can offer all cash and no appraisal required. The situation is moderately improving, though. Orr says, as prices go up, more people are becoming willing to sell their homes. He believes supply recently moved higher in about 80 percent of the Valley, especially the outlying areas.

“August home sales were up 3.6 percent from July,” says Orr. “However, activity was still down 9.2 percent from August of last year. The reduction is primarily due to a huge decline in distressed sales: short sales and sales of homes that recently went through a foreclosure. Also, the number of bank-owned homes sold in August was down a huge 78 percent from last August.”

Foreclosure starts – homeowners receiving notice their lenders may foreclose in 90 days – went down 2.5 percent from July to August. Foreclosure starts are down almost 38 percent from last August. Still, Orr says this number is about 2.3 times normal for a typical month in the Valley. The number of completed foreclosures in August was down 22 percent from last August.

Investors continue to play a key role in the Phoenix area housing market. Almost 36 percent of the homes sold in Maricopa County in August went to investors. That’s up from 28 percent last August. More than half of the homes sold this August for $150,000 or less went to all-cash buyers.

“Some large investment companies have been buying homes in bulk from other investment companies,” explains Orr. “They are clearly frustrated by the difficulty of acquiring large numbers of homes through normal channels. Most of the properties are being used as rentals for tenants who have lost their former homes to foreclosure or through a short sale. In greater Phoenix, we have never seen so many single-family homes used as rental accommodation, and it will be interesting to see how elastic the demand is over the coming year.”

Many average buyers are turning to new-home sales, given the difficulty of getting a bargain resale. New-home sales went up 55 percent from August to August, and some developers are starting to cap sales to conserve lots. The number of active subdivisions is down 18 percent since the beginning of the year, and about 63 percent of those currently active are expected to sell out within 12 months.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/FullReport201209.pdf. More analysis is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

Small Business Leadership Academy

Small Business Leadership Academy: Handling Dissatisfied Customers

If you are in business, you’ve had unhappy customers. No matter how excellent your services or products, at some point someone will have issues. Customers often experience buyer’s remorse — it’s a simple fact. And because nothing is perfect, even the best businesses make mistakes. So, how can business owners handle the inevitable?

Douglas Olsen, associate professor of marketing, says businesses often “abandon the customer after the sale” — that is, they don’t follow up. And because only four percent of dissatisfied customers speak up, chances are there are folks out there who interacted with your company and don’t feel warm and fuzzy about it.

Olsen, who is teaching the marketing class in the W. P. Carey School’s Small Business Leadership Academy, says there are practical steps that any company can take to respond to customers who are unhappy with their experiences. Research — much of it pioneered at the Center for Services Leadership at W. P. Carey — shows that dissatisfied customers can be turned into loyalists if the service breakdown is addressed wisely.

For starters, Olsen recommends developing a system for keeping in touch with customers. This can be as simple as a phone call or email. Second, make sure customers you’re your policy on dispute resolution, and where and how to complain.

Here are a few things to remember when the news isn’t good — and handling dissatisfied customers:

  • Other stresses in your customer’s life are probably affecting his feelings about your business.
  • Listen actively: What are their thoughts? What’s their rationale? Focus on solutions.
  • Step outside yourself and don’t make assumptions; try to see the situation through your customer’s eyes. Be empathetic. Show your customer that he/she has your full attention.
  • Restate the problem so that you can be sure you have understood correctly.
  • Make sure your customer knows what the next step is, and when he/she will hear from you again.

Training may be needed to assure that your employees know how to handle an unhappy, sometimes angry, customer. They should have some flexibility to offer resolution, and they should know who is responsible for implementation. Olsen says there is rarely a reason to be defensive — a stance that only aggravates the situation.

A customer who lets you know that something is amiss gives you the opportunity to improve your business — and ultimately increase the number of happy loyal customers.
Looked it that way, Olsen says, a complaint is a gift!


Listen to the podcast: “Why Complaints are Good for Business”


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.

Top Business Leaders will speak in the New ECP Season

Top leaders from the NFL Network, Harkins Theatres, the United Services Automobile Association (USAA), and the Arizona Diamondbacks are among those who will take the stage during the new season of the Economic Club of Phoenix speaker series. Every year, Phoenix-area audiences are invited to attend the club’s luncheons and hear from some of the biggest names in the business world.

“We want Valley businesspeople to be able to hear from the heads of major local companies and top executives from international firms,” says W. P. Carey School of Business Dean Robert Mittelstaedt. “This series brings leaders from a variety of industries to talk about what’s happening in their own companies, as well as in the business arena as a whole.”

The Economic Club of Phoenix (ECP) was founded by a group of prominent business executives called the Dean’s Council of 100, in conjunction with the W. P. Carey School of Business at Arizona State University. The club is now the preeminent Arizona forum for the exchange of ideas about business and the economy. Its monthly luncheons and other activities offer business leaders and others opportunities to network and engage.

This season’s speaker lineup (subject to change) is:

Thursday, Oct. 11 – Dan Harkins, owner and chief executive officer, Harkins Theatres
Thursday, Nov. 8 – William Toler, president and chief executive officer, AdvancePierre Foods
Wednesday, Jan. 23 – Derrick Hall, president and chief executive officer, Arizona Diamondbacks
February – TBA
Wednesday, March 13 – Kim Williams, chief operating officer and chief financial officer, NFL Business Ventures/NFL Network
Thursday, April 25 – Maj. Gen. Josue Robles Jr., president and chief executive officer, United Services Automobile Association (USAA), Dean’s Council of 100 Executive of the Year
Thursday, May 16 – Annual Economic Outlook Luncheon

All luncheons run from 11:30 a.m. to 1:30 p.m. The first event will take place at the JW Marriott Desert Ridge Resort & Spa in Phoenix, with the rest of the locations still to be announced.

Non-members are welcome for a $75 luncheon fee. Funds in excess of the cost of lunch are used to support scholarships and faculty research at the W. P. Carey School of Business.

For more information about the club or to reserve seats, call (480) 727-0596, e-mail wpcarey.ecp@asu.edu or go to www.econclubphx.org.

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ASU honors two for economic forecasting

They correctly predicted one of the most volatile times in the history of the U.S. economy. For their incredible accuracy, a counselor to the Secretary of the U.S. Treasury and Morgan Stanley’s chief U.S. economist are about to receive a high honor. Dr. Richard Berner and David Greenlaw will accept the prestigious Lawrence R. Klein Award for economic-forecasting accuracy in New York on Oct. 18. Greenlaw will also provide his highly regarded 2013 forecast.

“I am deeply honored to receive the Lawrence R. Klein Award for forecasting accuracy with my good friend and former colleague, Dave Greenlaw,” Berner said. “This award has special significance for me because Lawrence Klein was my mentor and dissertation advisor.”

“I am honored to receive this award and am especially gratified to share it with my former colleague Richard Berner,” said Greenlaw. “The market uncertainty of the past few years has presented forecasting challenges for our economics team, and our hope is Morgan Stanley’s clients have benefitted from these calls.”

The W. P. Carey School of Business at Arizona State University sponsors and judges the Lawrence R. Klein Award, regarded as one of the best-known and longest-standing awards in the economic profession. The annual award, named for Nobel Prize winner Dr. Lawrence R. Klein, goes to the individual or team with the most accurate economic forecast among the Blue Chip Economic Indicators survey participants for a multi-year period. The Blue Chip newsletter, edited by Randell Moore, has been published for more than 30 years and is regarded as the “gold standard” of business forecasts.

Berner and Greenlaw worked as a team at Morgan Stanley to earn the award for their 2008 to 2011 predictions. They beat out about 50 of the nation’s other top economic forecasters.

“The biggest challenge of the forecasts from 2008 to 2011 was to project the depth of the country’s economic contraction and then anticipate how the recovery would unfold,” explained Research Professor Lee McPheters of the W. P. Carey School of Business. “Berner and Greenlaw saw the downturn would be deeper than most analysts thought, and that set their forecast apart. They also had very small forecast errors on the unemployment rate, correctly expecting it to stay high into 2011.”

Dr. Henry Kaufman, president of Henry Kaufman & Company, who is well-known for his 20-plus years of work at Salomon Brothers, is scheduled to present the award to Berner and Greenlaw at a special event at the University Club in New York on Thursday, Oct. 18. The event starts at 6 p.m.

Berner is currently counselor to U.S. Treasury Secretary Timothy Geithner and is helping the Treasury Department to build the Office of Financial Research (OFR), which was created in 2010 to collect and standardize financial data, perform essential research and develop new tools to measure and monitor risk to the financial system. In December, Berner was nominated by the President to serve as the OFR’s director; that nomination is pending before the U.S. Senate. Before he joined the Treasury, Berner was managing director, co-head of global economics and chief U.S. economist at Morgan Stanley, where he worked for 12 years. He has also been a top economist at Mellon Bank, Salomon Brothers and Morgan Guaranty Trust Company. He served for seven years on the research staff at the Federal Reserve Board in Washington and was also a member of the Economic Advisory Panel of the Federal Reserve Bank of New York, the Panel of Economic Advisers of the Congressional Budget Office, and the Executive Committee of the board of directors of the National Bureau of Economic Research, among other impressive achievements.

Greenlaw is managing director and chief U.S. fixed income economist with Morgan Stanley. Before joining the firm, he served on the staff of the Federal Reserve Board in Washington for four years. He currently serves on the boards of several well-known economic organizations, including the Money Marketeers and the U.S. Monetary Policy Forum. Greenlaw was named Best Fed Forecaster in a Bloomberg Markets magazine survey and was the first back-to-back winner of the Dow Jones MarketWatch Forecaster of the Month award. He and Berner also have received forecasting-accuracy awards from the National Association for Business Economics and The Wall Street Journal, among others.

Greenlaw’s forecast for 2013 includes these predictions:

The U.S. economy faces two key challenges in the year ahead – the fiscal cliff and potential spillover of the European debt crisis.
Economic growth is expected to remain quite sluggish in 2013.
The unemployment rate should continue to linger at a high level over the course of the next year.
Inflation is likely to remain subdued.
The housing market is one of the few identifiable bright spots. House prices, sales activity and new homebuilding should all move higher in the year ahead.
Among the VIPs scheduled to attend the awards event this year are Randell E. Moore, executive editor of the Blue Chip Economic Indicators; Robert Mittelstaedt, dean of the W. P. Carey School of Business; and Trevor Bond, president and chief executive officer of W. P. Carey & Co. LLC.

Small Business Leadership Academy

2012 Small Business Leadership Academy: A Fresh Look At Marketing

Management guru Peter Drucker said, “the aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.” Business owners in the 2012 Small Business Leadership Academy (SBLA) are taking a fresh look at marketing with guidance from Douglas Olsen, associate professor of marketing at the W. P. Carey School of Business.

The basis of marketing, he explained, is the knowledge of what customers want, need and will pay for. But many companies, Olsen added, start with a great idea and then expect the customers to find it. The problem is that many of the entrepreneurs never bothered to think about whether anyone needs their big idea. A product can be the best gizmo ever built, but if it doesn’t fulfill a customer’s desires or needs, it won’t succeed. In other cases, even if the product or service is great, the people so close to the product sometimes tend to talk too much about the features and the technical details — to a point where they do not truly convey to the customer the real benefits or identify needs being served.

Nonetheless, many successful companies have this figured out, Olsen said. Michelin famously used images of babies sitting in the middle of a tire as a way of saying that they were selling you safety for your family — not just a tire. Not a lot of jargon, just one very compelling message.

The Michelin ad demonstrates the effective use of segmentation. Once you understand your customers, Olsen said, you can use segmentation to target your marketing to them. Segmentation is the process of dividing the market into groups. Consumers may be grouped based on geography,  demographics, benefits, behaviors or psychographics.

Psychographics, for example, are personality characteristics. Olsen showed the group three ads for a certain style of watch. One featured a close-up of a physically imposing man. The second showed a man sitting alone, reading. The third was Pierce Bronson, leaning toward the camera in an impeccable jacket and tie. The ads exemplify psychographic marketing. The first ad with the macho figure appeals to a market segment of men who want to be physically strong; the second ad would appeal to the “self actualizer”; Pierce Bronson personifies the sophistication and daring that another group desires.

In next week’s class we’ll dive deeper into the competitive advantage that services may provide and students will share some of the blueprints that they developed to apply to their business.


Listen to the podcast on W.P. Carey’s website.


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.

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Spirit of Enterprise Award Finalists Boast Job Creation, Charity Work, Innovation

Despite the slow economic recovery, Arizona already has many businesses showing impressive growth and even job creation. The W. P. Carey School of Business at Arizona State University is recognizing 10 of the state’s biggest achievers as finalists for this year’s prestigious Spirit of Enterprise Awards.

The awards, now in their 16th year, honor firms for ethics, energy and excellence in entrepreneurship. Past winners include well-known names like Cold Stone Creamery, Ollie the Trolley and Sundt Construction. Finalists are noted for creating a positive culture both internally and in the community as a whole.

This year’s finalists are:

180 Degrees Automotive, a woman-owned, full-service auto repair center that caters especially to women and minorities. The company has moved to bigger locations four times in six years, provides free car classes to women, hosts an art exhibit, gives free rides home, and leaves a gift in each car with each visit.

CyberMark International, a full-service Internet marketing firm named one of the best in North America by a panel of marketing professionals. CyberMark won a 2011 ethics award from the local Better Business Bureau, offers 24/7 availability for its clients, gives employees flexible hours, and donates service free of charge to several nonprofit organizations.

Daphne’s Headcovers, a novelty golf-club cover business started when the owner was just 16 years old, that once grew 400 percent in just one quarter. Daphne’s now serves fine resorts and golf shops in 75 countries, has covers in the bags of more than 200 touring pro golfers, and offers customers a lifetime guarantee to repair or replace products for free.

GlobalMed, a company that offers telemedicine solutions like innovative cameras, medical devices and software, so health practitioners can provide care to remote patients via telecommunications or satellite. GlobalMed made Inc. Magazine’s 2012 list of the nation’s 500 fastest-growing private companies, and it also made large donations to charity, including the Marine Corps Toys for Tots Program.

Hard Dollar, a Scottsdale-based firm that provides software for planning, budgeting and managing big projects in construction, mining and energy. Hard Dollar has more than 200,000 global users, 30-percent year-over-year growth, a company-wide wellness program, and a cost-management system that can increase productivity by 300 percent.

LawLogix Group, a fast-growing provider of immigration, I-9 and E-Verify software. The company boasts a 96.9-percent client-retention rate, low 3-percent employee turnover, a large amount of nonprofit work, and more than 155,000 organizations as customers, including Fortune 500 companies.

NJOY Electronic Cigarettes, a company founded in 2006 that now has a 40-percent share of the electronic cigarette industry, which offers smokers a tobacco-free alternative to traditional cigarettes. The firm sells in most of the nation’s biggest convenience-store chains and offers a recycling program for its products.

Optimal Performance Training, a team of health and fitness professionals started by one man inside a small chiropractor’s office. The company has grown to a large studio, where high school and college Division 1 athletes train, and it promotes a community perspective.

Real Property Management East Valley, a full-service residential property management company that grew to a multi-million dollar business in less than five years. This family-owned firm prides itself on positive client referrals, which have led to about 40 percent of its new growth, as well as involvement with community groups, including the Boy Scouts and the Maricopa County Sheriff’s Divers Posse.

Total Transit, a comprehensive mobility management company that runs the Discount Cab brand throughout Arizona. Total Transit has the largest fleet of environmentally friendly Prius cabs in North America and also provides innovative Dial-a-Ride services for Valley Metro and many large Medicaid and Medicare providers, while also donating to the community through its charitable Total Transit Foundation.

Hundreds of Valley entrepreneurs, community leaders, Arizona State University students and others are expected to attend the annual awards luncheon when the winners will be announced Nov. 1 at the JW Marriott Desert Ridge Resort & Spa in Phoenix.

These awards are just one focus of the Spirit of Enterprise Center, which helps hundreds of businesses each year. The center offers companies the chance to recruit and meet with top student talent, while also allowing students to get hands-on business experience. One key program, Student Teams for Entrepreneurship Projects (STEP), matches teams of W. P. Carey School of Business students with Valley companies to help tackle real-world challenges and opportunities. Companies can also use the center to access other ASU business resources. The center is self-funded and utilizes community sponsorships and volunteers to sustain its activities.

For more information on the Spirit of Enterprise Center, visit www.spiritofenterprise.org. For sponsorship opportunities or awards luncheon reservations, please call (480) 965-0474 or visit www.spiritofenterprise.org.

Small Business Leadership Academy

Small Business Leadership Academy: Aligning Strategy With Corporate Resources

The 2012 Small Business Leadership Academy (SBLA) kicks off with two nights devoted to strategy, and more specifically, competitive advantage and how to achieve it. Emphasis is put on the importance of aligning a company’s activities to create an advantage over competitors.

The cornerstone of the strategy course is analysis. Any business owner can use analysis to determine what their organization offers to their industry as well as to their customers. Determining whether a business’s organizational strategy fits its resources is the first step towards maximizing competitive advantage.

“(Business owners) need to be honest with themselves about their organization, its resources, and whether their current strategy is in need of updating,” stresses Professor Trevis Certo. “A common strategic mistake that many small businesses make is not understanding how common their product or service is, and how easy it would be for another company to imitate.”

Many companies suffer from being a “jack of all trades, master of none” by trying to be all things to all customers. Once a strategy is decided on, not all customers should be pursued and current customers might even need to be “fired.”

Spend some time over the next week thinking about your company’s value proposition. Take the time to really analyze whether all aspects of your business are aligned with that value proposition. Are you pursuing the right clients? Are your compensation models aligned with your goals? Are there operations that you have undertaken that take up more resources than they are worth?

Next, make necessary changes. While this exercise may not currently be at the top of your priority list, it can mean the difference between growing your business and closing your business.

Next week, we’ll explore how to take what you see as your company’s competitive advantage and making sure it is not easily imitated by your competitors.

The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank.

Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.

Home Prices

Soaring Phoenix Area Home Prices Finally Slow Down

Phoenix-area home prices, which had been sharply and steadily rising since last September, finally went down a little this summer.

A new report from the W. P. Carey School of Business at Arizona State University reveals the numbers for Maricopa and Pinal counties, as of July:

  • The median single-family home price dropped slightly between June and July this year – down less than 1%.
  • The median single-family home price was still up almost 31% from last July.
  • Sales of bank-owned homes plunged 73% from July 2011 to July 2012, with fewer foreclosures coming into the pipeline.

The median single-family home price in Maricopa and Pinal counties in July was $149,000, very slightly down from $150,000 in June. Even though this was the first monthly median drop since last summer, the report’s author, Mike Orr, does not think it indicates a reversal.

“This small drop is likely a reflection of both the normal, annual summer slowdown in the Phoenix-area housing market and a natural pause in the soaring prices we’ve seen here,” explains Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “I expect it will continue through August, but prices are likely to resume their upward direction in late September or October.”

The median single-family price was still up 30.7% from last July, when it was at $114,000. Realtors will note the average price per square foot went up 21.1% from last July. The median price for townhomes and condos was up 17.3% from $69,900 to $82,000.

Activity in the market remains limited by the amount of homes available for sale, with the number of transactions down 7.7% from July last year. As of Aug. 1, the supply of homes for sale — excluding those already under contract – was down 26% from the same time last year. Many homeowners still don’t want to sell, since their homes are worth much less than when they bought them.

Also, so-called “distressed supply,” the number of homes up for short sale or that recently went through foreclosure, went down a whopping 69% from last July to this July, meaning fewer bargains are out there.

“Seventy-eight percent of the existing homes available for sale are priced above $150,000,” says Orr. “That means competition for the other 22% is fierce. Most homes priced below even $250,000 are attracting a large number of offers within a short time, and offers often exceed the asking price. Ordinary home buyers are still struggling to compete with investors who offer all-cash, with no appraisal required.”

In fact, 54% of the homes that sold for $150,000 or less in July went to all-cash buyers. The low supply in this range has many people turning to new-home construction. As a result, new construction permits went up a massive 87% from July 2011 to July 2012. New-home sales went up 58% year-over-year.

Completed foreclosures for both single-family homes and townhome/condos went up 13% from June to July. However, Orr believes this is the beginning of a short, passing wave that came from the February signing of a legal settlement between the states and five of the nation’s largest lenders. Foreclosure starts — homeowners receiving notice their lenders may foreclose in 90 days – went down 14% from June to July.

“Most lenders are strongly encouraging homeowners facing financial hardship to use short sales as a preferred alternative to foreclosure,” Orr says. “Consequently, we have seen single-family short sales grow by 12 percent over the last year, while foreclosure rates have declined sharply.”

Almost all parts of the Phoenix area have seen prices go up since last summer. Even the high-end areas of Scottsdale and Paradise Valley have had average prices per square foot go up 9 and 12%, respectively. The only areas still showing a decline in average price per square foot are Rio Verde and Sun Lakes.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at wpcarey.asu.edu/finance/real-estate/upload/FullReport201208.pdf.

More analysis is also available from knowWPCarey, the business school’s online resource and newsletter, at knowwpcarey.com/index.cfm?cid=13.

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Soaring Phoenix-area Home Prices Finally Slow Down

Phoenix-area home prices, which had been sharply and steadily rising since last September, finally went down a little this summer. A new report from the W. P. Carey School of Business at Arizona State University reveals the numbers for Maricopa and Pinal counties, as of July:

The median single-family home price dropped slightly between June and July this year – down less than 1 percent.
The median single-family home price was still up almost 31 percent from last July.
Sales of bank-owned homes plunged 73 percent from July 2011 to July 2012, with fewer foreclosures coming into the pipeline.

The median single-family home price in Maricopa and Pinal counties in July was $149,000, very slightly down from $150,000 in June. Even though this was the first monthly median drop since last summer, the report’s author, Mike Orr, does not think it indicates a reversal.

“This small drop is likely a reflection of both the normal, annual summer slowdown in the Phoenix-area housing market and a natural pause in the soaring prices we’ve seen here,” explains Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “I expect it will continue through August, but prices are likely to resume their upward direction in late September or October.”

The median single-family price was still up 30.7 percent from last July, when it was at $114,000. Realtors will note the average price per square foot went up 21.1 percent from last July. The median price for townhomes and condos was up 17.3 percent from $69,900 to $82,000.

Activity in the market remains limited by the amount of homes available for sale, with the number of transactions down 7.7 percent from July last year. As of Aug. 1, the supply of homes for sale — excluding those already under contract – was down 26 percent from the same time last year. Many homeowners still don’t want to sell, since their homes are worth much less than when they bought them. Also, so-called “distressed supply,” the number of homes up for short sale or that recently went through foreclosure, went down a whopping 69 percent from last July to this July, meaning fewer bargains are out there.

“Seventy-eight percent of the existing homes available for sale are priced above $150,000,” says Orr. “That means competition for the other 22 percent is fierce. Most homes priced below even $250,000 are attracting a large number of offers within a short time, and offers often exceed the asking price. Ordinary home buyers are still struggling to compete with investors who offer all-cash, with no appraisal required.”

In fact, 54 percent of the homes that sold for $150,000 or less in July went to all-cash buyers. The low supply in this range has many people turning to new-home construction. As a result, new construction permits went up a massive 87 percent from July 2011 to July 2012. New-home sales went up 58 percent year-over-year.

Completed foreclosures for both single-family homes and townhome/condos went up 13 percent from June to July. However, Orr believes this is the beginning of a short, passing wave that came from the February signing of a legal settlement between the states and five of the nation’s largest lenders. Foreclosure starts — homeowners receiving notice their lenders may foreclose in 90 days – went down 14 percent from June to July.

“Most lenders are strongly encouraging homeowners facing financial hardship to use short sales as a preferred alternative to foreclosure,” says Orr. “Consequently, we have seen single-family short sales grow by 12 percent over the last year, while foreclosure rates have declined sharply.”

Almost all parts of the Phoenix area have seen prices go up since last summer. Even the high-end areas of Scottsdale and Paradise Valley have had average prices per square foot go up 9 and 12 percent, respectively. The only areas still showing a decline in average price per square foot are Rio Verde and Sun Lakes.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/FullReport201208.pdf. More analysis is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

Online Real Estate

W.P. Carey School Offers New Online Real Estate Program

From the foreclosure crisis to roller-coaster home prices and a trove of new investors, we’re watching the world of real estate dramatically change. This evolution has some real estate professionals looking to blur the lines between what they do now – and what they can do.

For example, general contractors may see opportunities to complete their own real estate projects, and some realtors are looking into buying homes for renovation and investment. A new online program from the W. P. Carey School of Business at Arizona State University will help address this.

“We’ve been talking with real-estate industry groups, and they see a need for a flexible, convenient program to provide an overview of the development process for current real estate professionals who want to expand their horizons,” says Mark Stapp, the Fred E. Taylor Professor in Real Estate at the W. P. Carey School of Business. “We designed the new online Real Estate Development Certificate program for this purpose. It teaches real estate fundamentals, law, investments and land development, all in an easy-to-use format from a top business school.”

The new online program is essentially a real-estate development education sampler, which lasts nine months. The first classes will begin on Oct. 1. Industry groups, including the Urban Land Institute (ULI), the Valley Forward Association and the National Association of Industrial and Office Properties (NAIOP), have already taken an interest, and members will be eligible for a discounted tuition rate.

“In addition to the basics, we’re going to focus on responsible community development and themes like sustainability and creating real value for customers,” explains Stapp, an instructor in the new program and a developer himself. “There’s a new era of real estate construction emphasizing fewer cookie-cutter homes and more focus on buyers’ needs. We want to help real estate professionals deliver an even higher level of service to their clients, make better business decisions, and better position their products and their companies for revenue growth.”

Until now, Stapp only taught in the school’s Master of Real Estate Development (MRED) program, an in-person, one-year program for mid-level real estate professionals. He’s executive director of that program, which is in its sixth year and enrolls students from eight countries, who learn about design, law, construction and business. Many of the same seasoned faculty members will teach in the new online program.

Applications are already being taken for the new certificate program, and more information can be found at www.wpcarey.asu.edu/REDcert. Additional information about the in-person MRED program is available at www.wpcarey.asu.edu/mred. The school will also soon launching a new online publication about its real estate research and programs called knowRE, which will be available to the public at www.knowwpcarey.com/realestate.

Small Business Leadership Academy

Brandon Taylor: Small Business Leadership Academy Past Participant

Brandon Taylor discusses how his participation in the Small Business Leadership Academy has benefited him and his business, CPR Savers & First Aid Supply LLC.


Small Business Leadership Academy Past Participant:

Brandon Taylor, CPR Savers & First Aid Supply LLCBrandon Taylor
CPR Savers & First Aid Supply LLC

Tell us about your business: CPR Savers & First Aid Supply is a distributor/manufacturer of CPR, first aid, AED, survival and medical equipment. We offer nationwide CPR/AED/first-aid training to corporate clients. We provide disaster preparedness supplies to government agencies.

Year of participation in SBLA: 2011

What was the most important thing you learned from SBLA? The need to work on my business to grow it instead of spending all my time on the day-to-day operations just to keep my business going.

How have you changed the way you do business based on what you learned during SBLA? To some degree, yes. It is difficult to allocate the time necessary to work on my business, but I have implemented many of the ideas learned in the SBLA classes.

How has the SBLA alumni community been helpful to you since you went through the program? To some degree, we have been in contact with a few of our peers and have met occasionally. I need to find the time to participate in some of the activities that have been provided by the SBLA.

What aspects of SBLA do you consider most valuable for other small business owners in Phoenix? The information provided is very helpful for business owners to learn how to grow their business to the next level. It will help you generate new ideas and encourage you to learn more about the subjects that interest you most. One surprising benefit of the SBLA entrepreneurship class is to participate with like-minded peers who are in the same position and want to help one another and share their knowledge.

The next Small Business Leadership Academyprogram will begin Wednesday, August 29, 2012.

For more information about the program, including admission requirements, please visit SBLA’s website.

home prices

Phoenix Home Prices Up, New-Home Sales Coming Back

Foreclosures are dramatically down in the Phoenix-area housing market. This means fewer cheap homes coming onto the market, home prices rising for the sixth month in a row as a result, and many buyers finally starting to turn their attention from bargain resale homes to new-home sales. A new report from the W. P. Carey School of Business at Arizona State University reveals some trends for Maricopa and Pinal counties, as of March:

> The number of foreclosures completed this March was down a huge 60 percent from March 2011.

> The median single-family-home price went up more than 20 percent from last March.

> New-home sales rose 35 percent in the same time period.

Mike Orr, the report’s author, says the home-buying season is in full swing and peak activity will last until June. The median single-family-home price in the Phoenix-area was $134,900 in March. That’s up 20.4 percent from a year ago when it was $112,000. Realtors will note the average price per square-foot went up 14.4 percent.

“Prices have begun to rise at a fast pace, and bargains are no longer plentiful,” says Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price.”

Orr emphasizes there’s been a dramatic change in the types of transactions happening in the market. Normal resales, new-home sales, investor flips and short sales are on the rise, while lender-owned home sales are down 61 percent from the year before.

Overall, the supply of single-family homes on the market (without an existing contract) went down 64 percent from March 2011 to March 2012. Orr estimates there is only a 23-day supply of homes priced under $250,000 available and that the market is very unbalanced, with far more buyers than sellers. The existing supply is heavily weighted toward the higher-priced end of the market.

“The very low number of inexpensive homes available for resale means more buyers are considering purchasing new homes as an option,” says Orr. “This signals the start of a distinct upward trend in new-home sales.”

When it comes to resales, Orr says all-cash buyers are still receiving preference over those with offers that require some form of financing. That’s because lenders need an appraisal, and appraisers are typically looking at months-old home sales for comparison. Those are priced well below the current market value.

“This puts ordinary home buyers at a severe disadvantage,” explains Orr. “More than 26 percent of Phoenix-area transactions are investor purchases.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at wpcarey.asu.edu. More analysis is also available from knowWPCarey, the business school’s online resource and newsletter, at knowwpcarey.com.

carey school - graduate

More Than 2,000 Will Graduate From W. P. Carey School

More than 2,000 students will graduate from Arizona State University’s W. P. Carey School of Business next week. This is one of the biggest graduation classes ever for the school, known as one of the largest and highest-ranked business schools in the country. The president of the Phoenix Suns, a group of executives flying in from China, and a student who already started a nonprofit to help foster teens will be part of the ceremonies.

“We have another fantastic graduating class this year,” says W. P. Carey School of Business Dean Robert Mittelstaedt. “These students exemplify why our undergraduate, full-time MBA and part-time MBA programs are all ranked Top 30 by U.S. News & World Report. It’s another batch of high achievers.”

The school’s graduate-level convocation will include more than 900 students, most of them receiving MBAs, but others getting master’s degrees in accountancy, tax, information management, real estate development and health systems management. The event will be held Friday, May 4 at 5 p.m. at the Wells Fargo Arena in Tempe. The featured speaker will be Brad Casper, president of the Phoenix Suns basketball team, who is known for his community involvement and heavy focus on area schools.

In addition, about 20 of the 120 executives graduating from the school’s executive MBA program in Shanghai are traveling to Phoenix to participate in the Tempe ceremony. The Shanghai program educates some of the highest-level business and government leaders in China and is currently ranked among the Top 20 executive MBA programs in the world by the Financial Times, Britain’s equivalent of The Wall Street Journal. Past students have included the CEOs of Baosteel and Shanghai Electric, three vice governors of China’s major provinces, six city mayors, the chief executive officer of the Shanghai Stock Exchange, several bank chairmen and the chairman of Shanghai Airlines.

At the undergraduate level, more than 1,100 students are eligible to walk the stage, and more than a dozen different types of business degrees will be awarded. The undergraduate convocation is set for Thursday, May 3 at 8 a.m. at the Wells Fargo Arena. The main speaker will be Chris Spinella, chief executive officer of Apriva, which develops and advances smart-card technology and wireless applications for payment processing and secure mobile communications.

The graduates at this ceremony will include the winner of the spring 2012 Turken Family Outstanding Graduating Senior Award, Christos Makridis. He co-founded the Quanta Foundation LLC, an educational services company that connects high school students with high-profile university projects to produce research and multimedia materials. Makridis is also a McCord Scholar, an economics teaching assistant, chairman of the business school’s Dean’s Advisory Council and editor in chief of an international undergraduate-research journal on science policy at ASU.

Another finalist for the Turken Family award, Priya Nathan, co-founded a nonprofit to benefit young people. Partnered for Success helps foster and orphan youth successfully transition out of the foster care system in the Phoenix area. The program has been recognized by Fast Company magazine and was selected as an ASU Innovation Challenge grant winner twice.

“Many of these graduates are already making their mark well beyond the classroom,” says W. P. Carey School of Business Executive Dean Amy Hillman. “We have students who are small-business owners, working moms, members of the military and lots of others already making us proud. We look forward to their continued success.”

For more information on W. P. Carey School of Business, visit W. P. Carey School of Business’ website at wpcarey.asu.edu.

Entrepreneurs

Entrepreneurs: Three Key Things To Consider Before Starting Your Business

Three key things for entrepreneurs to consider before starting their own business


The benefit of a challenging economy has been the inspiration for new business. As individuals find themselves out of a job they may have held for decades, they are no longer taking their talents elsewhere. Instead they are choosing to create their own jobs; and in the process, jobs for others.

On a recent visit to the W.P. Carey School of Business at Arizona State University, I had the honor of meeting a group of enthusiastic future entrepreneurs. Growing up during a time of uncertainty has inspired these students to explore the possibilities of starting their own businesses.

Whether you are a college student with a great idea or a professional seeking to take control of your fate, there are three key things for entrepreneurs to consider before starting your own business and venturing into the world of entrepreneurship.

Do something you’re passionate about

Being in control does not mean more free time. Starting your own business will consume the majority of your time and energy. But if you are passionate about what you do, it won’t feel like work. And when you love what you do, you are more likely to be successful. Think about what you know, what you like and where you may be able to fill a need or provide a benefit to others. This line of thinking most often leads to great ideas that can ultimately become great companies.

The right person for the job

Entrepreneurs wear many hats, especially during the start-up phase. In the beginning, you may be the receptionist, janitor, most valuable employee and CEO — often simultaneously. At a certain point, though, you will be ready to hire full-time employees or need to contract expert help. Running a small operation makes it essential to surround yourself with strong people that fill your weaknesses. While you may be a very knowledgeable about your industry, it does not mean you understand how to execute marketing, public relations or finance.

When hiring, take the time to find people with the right experiences and qualifications to fit your needs. Also, consider personalities, work environments and schedules. As you begin building your team, you want to do your best to find people that you can work well with and will help grow the organization. Finally, consider the qualifications of the team as you reach out to secure potential investors.

Understand the numbers

Entrepreneurs tend to be great idea people or visionaries, but successful entrepreneurs know and understand the financial side of things. If you are still in school and think you may want to launch your own business someday, consider majoring in accounting. If you graduated already, consider taking a few accounting courses. If the thought of accounting repels you, partner with someone or hire someone who understands accounting to serve as a trusted financial adviser. Knowing the numbers and how they are calculated can help to eliminate the risk of fraud. It will also boost your credibility when talking to potential investors because they will realize you know the ins and outs of your company.

Starting a new business is a risk, but the rewards can be great. Taking charge of your own destiny and being your own boss can be empowering and challenging. In the end, having passion for what you do, the determination to make it happen and the dedication to see it through will be what sets you apart from others.

For more information about becoming an entrepreneur, visit fswfunding.com.