Monday, September 23, 2013

What A Thrilling Ride!

The ten days spent in Germany were truly some of the most exhilarating, enlightening and educational times for all 10 brave students who decided to embark on the international study trip. All the planning, the long plane rides, the jet lags, the early morning call times, figuring out how the German train systems worked, walking and riding the train together from city to city to get to business meetings (with our luggages in tow on some occasions) while getting rained down on - the trip culminated to this one fact: We're all better and wiser because of it. Our business knowledge has exponentially expanded, all because we took that one step to immerse ourselves in another culture in another continent, how daunting it may have been.

The IST 2013 team will always look back to this trip with fond memories - "We'll always have Germany..." :)

After our study trip in Germany officially ended on 9/20/13, some continued their adventure in Europe: some went to Paris, some to Berlin, some went back to Munich to attend the Oktoberfest, and some stayed close to visit family and friends.

To the UC Davis Graduate School of Management, thank you for giving us this incredible opportunity to go on this trip to enrich and grow our knowledge in international business. This experience is truly the highlight of our academic lives. We're proud to be part of the Aggies Family!

Of course, a shout-out to all our loyal readers: We hope you enjoyed this journey with us! Until next time!

"A strong and well-constituted man digests his experiences (deeds and misdeeds all included) just as he digests his meats, even when he has some tough morsels to swallow." ~ German Philosopher, Friedrich Nietzsche

THANK YOU from the IST 2013 Team: Professor Hemant Bhargava - Inger Maher - Christine Chen - Rojmary Fernandez - Brad Fong - Franzi Frey - Monique Fritz - Nate Hinton - Indah Marcelly - Adam Pastorius - Mingyu Qu - Xuan Sen =)

To see the student profiles, go here:

Friday, September 20, 2013

Discovering Energy in Essen!

Last, but certainly not least - our final day of meetings was held in Essen, Germany. At around 6 a.m., we all hopped aboard trains heading to the nation’s energy capital.

We had two incredible meetings lined up with Germany’s top two energy and utilities companies, E.ON and RWE. These two companies also lead globally as the #7 and #12 electric utilities companies, respectively.

When it comes to energy, Germany is in a particularly unique predicament. The German government has rolled out progressive energy policies, commonly called Energiewende, which virtually phase out all nuclear and coal energy production. The policies have set extremely aggressive goals such as reducing greenhouse gas emissions by 80% (against its 1990 Kyoto Protocol figures). These measures have led E.ON and RWE to begin closing down older and brand new nuclear power plants alike. Some foreshadow that these strict policies will lead to a new green Industrial Revolution with Germany innovating and leading the way. These policies are in part attributable to Japan’s Fukushima Daiichi nuclear crisis. In its wake, companies such as E.ON and RWE find many of their product offerings, technologies and business models turned upside down. Consequently, energy giants E.ON and RWE are currently rethinking how they will replace more than 70% of their energy and revenue-generating portfolios with renewable energy solutions. What an incredible challenge for them and what an incredible opportunity for us MBA students to discuss this timely situation and potential strategies directly with them.

Upon arrival at E.ON, we were greeted by our host Mr. Brian Lonn, a former GSM student who now works on E.ON’s Asset Strategy team as the Energy Yield Coordinator. We also met with representatives from the Country Strategy, Asset Strategy and Country Sales divisions. Collectively, they presented a thorough overview of Germany’s energy policy, E.ON, and E.ON 2.0…the new business strategy. We learned about conventional vs renewable energy, Electro mobility (E-Mobility), Combined Heat and Power units (CHPs), wind farm operations and maintenance management (for 3,000 turbines), and strong new potential markets. In addition, we learned about the levelized cost of energy (LCoE), which represents the lifetime cost of the yield of energy. This is used in project benchmarking. Formula: LCoE = All Costs / Energy Produced The important take-away from LCoE is simply to reduce costs by making more energy and machine efficiency is, therefore, always key!

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After gaining these fascinating insights, our gracious host and his manager Mrs. Grundt accompanied us to lunch in E.ON’s delightful café.

Departing from E.ON by train, we traveled to downtown Essen where we met with Mr. Klapdor at the RWE headquarters.

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Our RWE host, Mr. Klapdor, leads the Future House Project which is an innovative study where converted homes become self-sufficient energy producers. These homes not only power themselves comfortably via Solar Panels (even in freezing conditions) but they also power an electric car and most are able to sell excess energy back to the power grid and make a profit by doing so. To learn more about the future according to RWE, check out their Visions of Living 2030 short movie. Here is the link:

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Thursday, September 19, 2013

Last Day in Frankfurt: Finance Day!

Earlier today, we explored the finance industry. First, we visited the Money Museum at the Deutsche Bundesbank. The tour guide took us on a journey looking at the history of money.

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Before the money as we know them today, people would barter goods to trade. At one point, cows were used to determine worth. For example, a plot of land was worth 12 cows. It was really interesting to learn that the "dollar" was derived from the German word "Thaler" used in the 16th Century.

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We were then taken to this room where the currencies from all over the world were displayed:

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We also learned about the monetary policy and the role of the European Central Bank. The EU governing council meets every two weeks. It was awesome to know that the leaders from all over Europe would come here to Frankfurt to talk about monetary policies.

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The tour guide also showed us some of "money game machines" on the floor. Some of the team tinkered with them :)

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After our tour, we headed off to lunch. It gave us yet another chance to walk around Frankfurt (aaahh..always a joy..) and for Indah and Rojmary to run off to Dunkin Donuts to get their donut cravings satisfied :) (Dunkin Donuts doesn't have a presence yet in California).

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Some went to a Thai restaurant. Some of us went to Kleinmarkthalle, Frankfurt's indoor market. There were more than 60 stalls to choose from! There was a variety of meats, bread, cheese, produce, and other exotic foods and drinks. It was so much fun trying different food from the different stalls.

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In the afternoon, we travelled north to visit Feri AG in Bad Homburg. This was a treat because we met Kaarina Suikkonen, a UC Davis GSM alumni!

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Kaarina's colleague, Alexander Krater, taught us about private equity. We learned about creating value in private equity and the J curve effect making it different from equity investments. We found out that private equity firms not only invest in companies but infrastructure as well such as roads, solar parks, and jails.

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Mr. Krater talked about the importance of soft skills and building relationships. Meeting people in person helps open opportunities and assess the situation. Observing who speaks and how he/she treats others can help tell how a team is run and investments are managed. Also, building relationships will help expand your network so that opportunities and resources are available when the time is right.

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Kaarina Suikkonen is the Head of Private Equity at Feri. She shared with us her story of how she went from being a UC Davis MBA student to leading a major division at a Finance firm in Germany. It was inspiring to see a fellow GSMer working overseas. She talked about how great our UC Davis GSM alumni network is and encouraged us to use it to make connections and find opportunities.

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Wow, our trip's almost over! However, we did save the best for last. For our final stops, we will be travelling tomorrow to Essen to meet with the top two energy and utilities companies!

Until then, dear readers!