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Regional Business News
regarding the 2010 Olympics
in British Columbia, Canada


OlyBLOG is for businesses across Canada, especially in Vancouver / Whistler and throughout B.C. We also hope companies in Alberta and United States (i.e. Washington, Oregon, Idaho, Montana and California) will find OlyBLOG interesting and informative.






CURRENT NEWS:

Originally Published March 01, 2004

GOUGING $$$$$$$$$$$

Over the last couple of weeks I've spoken with a number of people regarding gouging as it relates to the construction industry. In light of the controversy touted recently in mainstream news media many are curious to know what their peers think. Unfortunately I don't have enough information to give you a documented response, but I can share the following.

First, do any of you know what it costs to buy a ticket for the Olympic opening ceremonies in Athens, or how incredibly high the cost of commercial rental space, house prices and taxes rise when the Olympics come to town? Well . . . that is gouging.

Granted, many factors influence these increases, but for the most part you are witnessing Olympic frenzy, and it has just begun.

It's unfair for Olympic officials to be perturbed or even obliquely imply that the construction industry is dallying in the "art of gouging" when the practice is common across all levels of Olympic participation. It's possible VANOC will be the first organization to do things differently, but until effective across-the-board policies are in place let's hope "gouging accusations" are kept to a minimum.

Due to the inherent nature of the Olympic aura, all local businesses including design and construction companies have no choice but to absorb the added costs of doing business in an Olympic region. Costs are rising in large part because the Olympics are coming to town. If it costs more to do business why shouldn't we invoice for products and services proportionately? 'Official Corporate Sponsors' stand to make billions at the expense of small and mid size businesses and average taxpayers. We need more out of it than a few new skating rinks. A bit of economic balance would only be fair.

I definitely don't support gouging and I'm also very excited Vancouver/Whistler won the 2010 bid, but a business rule of thumb is to charge what the market will bear. If SMBs (small and mid size businesses) have to suffer through the downside of the Olympics, and believe me the economic downside is steep, (it cost Utah taxpayers $1.2 billion) all businesses large and small should be able to recoup these additional costs in any ethical way possible. Some say gouging, others say opportunity. It depends on what side of the fence you're on and your level of greed.

In some instances a few shortsighted business people think it's going to be a Sunday walk through Stanley Park and that they are destined to come out obscenely wealthy on the other side just because this is their turf. Fortunately, the only companies to win gold will be those who train hard and get in the game early with a competitive offer or a strong trade initiative strategy.

It's a new era and one in which the Internet makes it difficult to keep secrets. Companies big or small won't be able to manipulate the market as easily as they used to. The times they are a changin' and gouging is going to be harder to get away with than it's been in the past.

Hopefully VANOC won't allow us to be manipulated in the manner Athens is being held hostage. So far John Furlong, CEO VANOC is pushing his agenda along briskly, but everyone in the grand scheme has to be part of this agenda and Furlong has to recognize quickly if he's being set up to be gouged. Everyone pays for gouging so if you know about it, tell John, tell me, tell the news media and put it on your website too. Go public. You have a voice. Use it to protect your livelihood and your community.

If VANOC legitimately feels they're being manipulated they have to act immediately and not only find alternative sources, but also execute iron clad delivery agreements. It's the only way we will all share the wealth. It's not good enough for just the big players to come out ahead at everyone else's expense. We have choices. Athens has already paid dearly in lost revenue and it will only get worse. You can't be gouged if you don't allow it. Everyone has options. How quickly you recognize your position and act accordingly decides the outcome. Gouging hurts everyone, especially SMBs.

The paradox is that in the Olympic arena everyone gouges to some extent, which means someone is going to have to pay for and inevitably get sucked into the black hole. Unfortunately that someone will be SMBs who don't treat their role in the Olympics proactively. There is no middle ground. You're either going to win gold, silver or bronze, or you will be so far down the line it won't matter. The longer you wait to plan your strategy the worse your chances of success.

Gouging is a foregone conclusion much the same way the Olympics is a big corporate machine. Get used to it and learn to manage it responsibly instead of trying to figure out ways to abuse a great opportunity. Many local companies don't realize that Olympic organizers have the option of looking outside the region for products and suppliers and that they usually do. ROOTS is a good example. This is an Ontario company gunning for 2010 business and doing it on the front page of the Vancouver Sun. Personally I'd rather see someone like lululemon get the business if they were so inclined, but if they don't soon get in the game they don't stand a chance.

A company like lululemon might actually change the negative win-at-all-costs overtone of the Games. What a coup that would be. If not lululemon there are other regional athletic clothing companies who could also handle the challenge, but so far they all seem to be sleeping. Laid back west coast attitude is not going to cut it. This is an Olympic contest of global proportion and the ROOTS boys from Ontario are staking their claim and flaunting it on our doorstep. It's small consolation that ROOTS is a Canadian company, but when the first foreign construction company comes in here and grabs a piece of the action because we were a bit tardy out of the blocks don't moan. The projects will go to the companies with a passion to deliver.

The lesson here is that your competition isn't local, it's also not provincial or national, it's global. If you really want to improve your chances of a seat at the Vancouver 2010 table you should be figuring out how you can gain a little experience in the 2006 Turin and 2008 Beijing Games. It becomes a win win all around for everyone. Explore your global options and you'll be surprised at what is available. Think BIG!

The Olympics is coming, and whether you like it or not you're in bed with an elephant. Keep one eye open, roll when it rolls and you'll be fine in the morning. Embrace the opportunity. Tomato/tomauto, gouging/opportunity.

BTW, House prices go up $220 every day in the GVRD and property taxes have increased 5.8% across the Lower Mainland this year. Also, 87 days out and a single ticket for the Athens Opening Ceremony is listing at $1,565 CDN from the official site and $3,250 USD and rising rapidly and hourly on the open market.

That's gouging, or maybe just good old fashioned opportunity.


*Ed. Note: We invested over three years and a six-figure budget researching Olympic organization relationships with sponsors, contractors, suppliers, partners, etc. The results surprised us too -- mouseover below






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