BP does not try to run its rural service stations in Australia

Excerpt from BRW: For an expanding independent petroleum retailer, customer relationships are everything.
Biq organisations are usually considered to be more efficient than smaller enes - but rarely more customer-friendly. Case in point, big banks. sharehelders love their taut back offices and fat profits; customers hate their skinny front lines and rate them well below small credit unions and building societies in satisfaction surveys.
It is a business theory that influences how oil companies distribute fuels in Australia. In cities, drivers have choices and can seek out the service station offering the cheapest petrol. In the country, the distance between service stations is qreater and what people expect from them - mechanical repairs and farm deliveries as well as fuel - is more varied.
Accordingly, the local arms of some of the world’s biqgest companies run city statiens themselves but use independent operators elsewhere. “I don’t think we have the ability to understand and build the sort of relationship with customers that is really important in rural Australia,” ‘BP Australia’s vice-president of wholesale reseller and retail, ‘Dean Salter, says.  However, ene of Salter’s independent operators, led by a predecessor in his position, is trying to prove that big orqanisations can be intimate as well as efficient.

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Posted on Nov 23, 08

Henry Kravis On Creating Value

Henry Kravis: The thing that is really important as you think about the private equity industry is that it has changed dramatically. In the late nineties we made a lot of mistakes at KKR. I’m not saying it’s good that we made the mistakes, but we did learn from our mistakes, because we changed the way we do business. The first thing we did was to make sure we acted and thought like industrialists. The days of just financial engineering are over. You have to really operate the business. Our whole approach at KKR since 1999 is that our job begins the day we buy a company. I like to say any fool can buy a company. There’s plenty of financing around. But what do you do with a business to create value? We’ve had an in-house consulting firm since the early eighties, but today we have a very large one. These operating consultants put metrics into every business that we’re involved with, they improve productivity, they shorten the supply chain, they improve sales. We expect everyone at KKR to understand their industry from the bottom up, and talk to purchasing managers, marketing people, salespeople, customers, suppliers, and understand the metrics, understand the best practices, the economic drivers, what drives an industry.

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Posted on Apr 25, 08

Myer is more valuable after becoming once again independent from Coles

In August 1985, the Myer Emporium Ltd and GJ Coles & Coy Ltd merged, becoming the largest ever Australian Corporation. The merger did not work nearly as well as anticipated, a common fate for merged companies. In 2006 Myer was sold off to private equity. Within in a year the firm was worth an additional 1 billion, illustrating powerfully that free-standing companies often create more value than when they are part of a larger corporate structure.
More details are provided in a recent articles in the Australian.

Myer’s makeover reaps $1bn

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Posted on Mar 30, 07