Business & Finance

Fortune September 15, 2017

FORTUNE covers the entire field of business, including specific companies and business trends, tech innovation prominent business leaders, and new ideas shaping the global marketplace. FORTUNE is particularly well known for its exceptionally reliable annual rankings of companies. FORTUNE furthers understanding of the economy, provides implementable business strategy, and gives you the practical knowledge you need to maximize your own success. Fortune currently publishes 3 double issues. Each count as two of 12 issues in an annual subscription.

United States
Meredith Corporation
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12 Issues

in this issue

2 min.
no margin, no mission

THERE IS PERHAPS no more central component to the free enterprise system than the profit margin. That margin allows companies to keep running, growing, and investing in the future. That’s Capitalism 101. And it’s a notion that’s worked pretty darn well over the centuries, lifting people out of poverty and broadly raising the standard of living. So you might not be shocked to learn that, increasingly, that same incentive is driving another worthwhile enterprise as well: Call it everyday problem solving. A positive operating margin, after all, can encourage a company to invest in addressing a societal challenge—be it environmental, economic, health-related, or something else—just as it might steer it to selling widgets, or WaaS (widgets as a service). As Aetna CEO Mark Bertolini framed it to me in a recent phone…

3 min.
football absorbs a knockout blow

ATHLETICS IT WAS A FINDING heard around the sports world. Researchers at Boston University announced in July that they had detected evidence of chronic traumatic encephalopathy (CTE) in 110 donated brains of former NFL players. They had studied 111. The result suffered from selection bias—the brains had been donated because those men had demonstrated symptoms of the degenerative brain disease—but the report’s ironclad takeaway is that the illness is far more prevalent in pro football players, subject to years of repeated hits to the head, than in the general public. The unavoidable conclusion: Football’s concussion problem is far worse than originally thought. The results highlight an existential crisis for America’s most popular sport. This fall, NFL fans will have to wonder whether the next bonecrunching tackle they see on the gridiron will…

1 min.

▪ HEALTH CARE THE COST OF TRANSPLANTS Organ and tissue transplants can be both hard to come by and extremely expensive. (The cost for the average heart transplant can approach $1.4million.) More than 116,000 Americans are waiting to receive a transplant, and about 20 die each day during the wait. Soon, researchers hope that new science (including advances in harvesting organs from pigs) will decrease price tags and long wait times. ▪ INEQUALITY WATCH WAGE GROWTH LOOKS GREAT—AT THE TOP New research by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman found that wages grew much faster in recent years for the highest U.S. earners. That’s a dramatic departure from the past: From 1946 to 1980, lower-wage workers made greater gains. ▪ CLIMATE CHANGE FLOOD INSURANCE DEBT IS RISING The long underwater National Flood Insurance Program (NFIP) will incur…

2 min.
the bull case for uber’s new chief executive

HAIL MARY SCANDAL-PLAGUED UBER announced it had selected a new CEO in late August, and while it’s too early to say whether Expedia chief Dara Khosrowshahi will save the unprofitable ride-sharing behemoth from itself, early indicators are encouraging. Under Khosrowshahi, Expedia appeared on Fortune’s list of best workplaces in tech, and its staff is 50% women—a promising sign for those worried about the sexism allegations that have roiled Uber. Investors hope Khosrowshahi, who immigrated to the U.S. as a refugee from Iran at age 9, will put a more sympathetic face on the hard-charging company—and help it start making money, en route to an IPO. KHOSROWSHAHI IS AN EX-BANKER (formerly of Allen & Co.), a grownup (he’s 48), and grounded in the making-moneymatters ethos of media titan Barry Diller, for whom he…

1 min.
businesses have hiked prices (way)up

A BLOCKBUSTER new study has found that businesses are increasing their markups—the difference between the marginal cost for a product and its price. Study authors Jan De Loecker and Jan Eeckhout found that the average markup has exploded since 1980 (see chart). What’s happening? Too little competition and too much power for a few players lets companies drive up prices without being undercut, the authors say. The result, they argue, is less output, lower wages, and less workforce participation. Not everyone agrees with the thesis. But count on “market power” being the next buzz term in the economy. HOLLYWOOD WRAPS ONE OF ITSWORST SUMMERS EVER THERE ARE some things even Wonder Woman can’t save. Once Hollywood’s best season, the summer box office has cooled of late, as a glut of expensive action…

1 min.
big food swallows the meal-kit hype

LUNCH BOX BLUE APRON’S June IPO was so dismal, it has cast a pall over the entire (very crowded) meal-kit industry. But whispers of a bubble haven’t stopped Big Food players from diving into the $4.6 billion market for DIY food-delivery services. In May, Campbell Soup backed Chef ’d with a $10 million investment while Unilever led a $9 million funding round for Sun Basket. In June, Nestlé acquired a minority interest in Freshly, leading a $77 million investment round. To pile on, at least seven grocers have made inroads in the business as well, including Kroger, which recently launched its own meal-kit brand, called Prep+Pared. As the deals keep flowing, industry watchers warn of a coming shakeout—particularly as Amazon makes its own foray into the space. But there’s a method to…