CEOs on Being 'Recession-Resistant,' the Games & More
CEOs from McDonalds, Adidas and WPP Group attending the long-awaited Beijing Olympic Games, talked about their various strategies to expand brand image, their views on the economy, and more on CNBC.
“We’re able to operate well in a recessionary environment. We’re not recession-proof, we’re recession-resistant. Our value and convenience drives that opportunity with our consumers around the United States and around the world. I don’t think you’re going to see the compressions on the margins. The dollar menu has really driven 13 to 14 percent of our discounts. Seventy percent continues to be driven by core in the broad-based appeal of the menu, and the opportunities for the consumer to take advantage of the value across the menu continues to keep our margins in pretty good shape. But from the commodities standpoint, everyone’s being pinched."
--James Skinner, CEO & Vice Chairman, McDonald’s
A Market to Invest In
“First and foremost, we do believe that we are the Olympic brand -– since we first outfitted the athletes in 1928. China is definitely a growing market for all of us but especially for us, over the last four years, we have used our growth relationship with the Olympics to build our business here. This year, we will do over $1 billion dollars, and according to the market share figures, we are already number one here. So China is definitely a market to invest and further invest.
--Herbert Hainer, CEO, Adidas
The First Digital Games
“Our media operation group forecasted that there would be 2.3 billion live viewers viewing the opening ceremony [if it had been live]. So we’re going to see the importance of live events, but online is becoming more prominent. I think there were 17 million hits on the NBC site in the first day. So this is truly the first digital games. It’s going to polarize what’s happening in the world of old media and new media. We’ve seen a growth of 17 percent in the first six months of the year, and we’re not seeing a slowdown here in China, but I think it’s inevitable that we’ll see a little bit of a slowdown. But the interesting thing about China is that it is an under-branded, under-advertised economy.”
--Sir Martin Sorrell, CEO, WPPGroup
Housing Bottom? Not Yet
“I don’t think we’ve bottomed out yet in the housing sector. You may see the index go up a bit and down again in a month or two. I’m concerned that not even subprime, but more regular mortgages, are beginning to suffer because of the inability to take care of the increase in food and gasoline prices and housing. So I think we have a ways to go. I think into 2009, towards the middle of 2010, you can’t pick the moment, but I don’t think it will be 2008.
--Hank Greenberg, Former Chairman & CEO, AIG
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