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MANAGING

AND

MARKETING

IN THE

GLOBAL

ARENA
FALL SEMESTER, 2013
MAN 385.33

UNIQUE #04785

Professor
John N. Doggett
Class Times
Monday and Wednesdays from 3:30 to 5:00 p.m.
Class Room
UTC 4.104
Office
CBA 5.124k
Office Hours
Wednesdays, 5:30 to 6:30 p.m. or by
appointment
Phone
512-232-7671
E-Mail
john.doggett@mccombs.utexas.edu
Course Web Page
via Canvas
Teaching Assistant
Aaron Burch
(aaron.burch@mba14.mccombs.utexas.edu)
Course Objectives
I created this course when I came to UT in 1989. I update the cases for this course
every year to make sure that we address the most cutting edge issues that are
facing global managers. The only case that I still use from 1989 is Republic Flour.
You will understand why Ive kept Republic Flour soon enough.
Today, as we near a second global recession, helping people learn how to take
advantage of global turmoil will give you a tremendous advantage during the
coming difficult times. For that reason, I have made several significant changes to
this course.
First, I have done away with the individual midterm. The next recovery will be a
group effort. So will your midterm.
Second, I have broadened the focus of the course. In the past, we have spent
significant time looking at the emergence of China and India. During the past
decade, the growth of China, India, Brazil, and other emerging economies
fundamentally changed how we did global business. Today, every major economy
is trying to manage slowing growth or recession. The stagnation in Europe and the
continued violence in the Middle East or Middle World is simply too significant
to be ignored. As a result, we will spend more time than in the past working to
understand the forces that are transforming Europe and the Muslim world.

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Third, I have assigned you four books. These books will help you think about how
to manage the challenges and opportunities of global competition. They will also
help you evaluate the challenges faced by countries and companies trying to figure
out how to navigate the slowing global economy.
They will help you develop your own strategies on how to compete in a world
where every rule of thumb is being discarded. These books will become let me
read that again books that you will use long after you graduate from UT. To
compensate for assigning so many books, I have significantly reduced the number
of notes that I have assigned for the course.
Fourth, I have done away with the group case competition and replaced it with a
group country/company analysis and presentation. As important as it is for you to
enhance your presentation skills, being able to accurately access the specific
challenges facing one countrys economy and then developing a strategy for how a
specific company should respond is of far greater value.
This course will help you understand the sea change in global competition that we
are experiencing. It will help you understand how managers anticipate and
respond to competitive pressures in a rapidly changing global marketplace. It will
help you enhance your analytical, decision-making, and implementation skills in an
intense, highly competitive classroom environment. It will also help you
understand and apply analytical tools used by managers and management
consultants to exploit competitive opportunities and effectively respond to
competitive threats.

Leadership and this Course


Each of you must participate in a group country/company analysis during the
semester. The goal of this country/company analysis is to give you experience
working together to try to predict the economic future of a country and then tell
the senior management of a company what they must do to successfully weather
the coming storm.
This group country/company analysis will help you develop your leadership skills in
a number of ways. First, you will learn how to manage groups of peers where each
student cannot be the group leader. Second, you will learn to manage a decision
making process with inadequate information and time. Finally, by observing and
reflecting on the dynamics of your team and your interaction with me and your
peers during the class room presentation, you will develop a deeper understanding
of what leadership requires.

Materials

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1Case Packet: You must purchase your case packet from www.hbsp. harvard.edu.
Aaron will send you a link that you can use to purchase the materials once you are
registered.
Books: Purchase on-line or at a bookstore. They are not in the Co-op.
Redefining Global Strategy: Crossing Borders in a World Where Differences
Still Matter by Pankaj Ghemawat, HBS Press, 2007.
Why Nations Fail: The Origins of Power, Prosperity and Poverty by Daron
Acemoglu and James Robinson, Crown Business, 2012.
Destiny Disrupted: A History of the World Through Islamic Eyes by Tamin Ansary,
PublicAffairs, 2010.
Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma,
W.W. Norton and Company, 2013.

Course Requirements and Grading


Class Participation = 50%
This course will require a minimum of 4 hours of work per class. You must spend at
least 3 hours analyzing each case and at least 1 hour preparing an action plan that
is supported by rigorous analysis for each case prior to class.
To help you prepare for my style of case teaching, Ive assigned a new HBS tool
called the Case Analysis Coach. Its the best tool out there to help you prepare for
my class.
Each student must also join a study group of fellow students and spend a minimum
of one hour discussing each case prior to class. During our class sessions, each
student must be prepared to actively participate in the discussion of every case.
Your class participation grade will be based primarily on the quality of your
comments, not on the quantity. Comments that demonstrate a thorough analysis
of the issues presented by each case, an awareness and appreciation of the
comments made by fellow students, implementation of the frameworks from the
readings that add to the learning process of the class will receive high grades.
Comments that ignore the content and flow of the discussion or that reflect
inadequate preparation will receive low grades.

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Country/Company Group Presentations = 30%


By the third week of the class, you and your colleagues must select a country and
company to analyze. You will assess the ongoing political and economic challenges
that the country you choose faces. You will then advise senior management of the
company you choose as to how they should best proceed. The group
presentations will be held during the last week of class. The group presentation
process will require the active participation of each member in the analysis of the
environment, the development of an action plan, and in the development of
materials to assist the group in making an effective twenty minute presentation to
the class.
Group presentation grades will be based upon the quality of analysis, the "do
ability" of the action plan, the quality of the presentation, and the ability of the
group to respond effectively on their feet to the questions posed by members of
the class and the instructor. Each group member must actively participate in the
presentations. Your classmates will grade each presentation.
Group Mid-term Exam = 20%
Each of you must join a study group to help you prepare for class. That study
group will also be tasked with spending a weekend reading, analyzing and
developing an action plan for a case for a mid-term exam. Examination grades will
reflect your groups success in identifying key challenges faced by the manager,
developing a realistic plan of action to respond to the managerial challenges
presented by the exam Case and performing in-depth quantitative and qualitative
analysis to support your groups action plan.
Missing Class Policy
I know that one of your priorities may be to get a job as we enter the second global
recession since 2007. My policy on missing classes is as follows.
You must submit a 10-page write up for every case that we covered when you
missed a class. This 10-page write up must be submitted to Aaron by the
beginning of the next class. If you do not submit one paper per missed case to
Aaron by the beginning of the next class, your maximum potential grade for the
semester will be reduced by of a letter grade.

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If you miss more than one class, your maximum potential grade for the semester
will be reduced by of a letter grade for each additional class that you miss, if you
submit the 10-page paper by the beginning of the next class. If you miss more
than one class and do not submit the 10-page paper by the beginning of the next
class, your maximum potential grade for the semester will be reduced by 1 full
letter grade. I will waive the or 1 grade penalty for exceptional circumstances
that are related to the health or safety of yourself, your spouse, your children, your
family or your significant other.
Religious Holy Days: By UT Austin policy, you must notify me of your pending
absence at least fourteen days prior to the date of observance of a religious holy
day. If you must miss a class, an examination, a work assignment, or a project in
order to observe a religious holy day, you will be given an opportunity to complete
the missed work within a reasonable time after the absence.
McCombs Classroom Professionalism Policy
The highest professional standards are expected of all members of the McCombs
community. The collective class reputation and the value of the Texas MBA
experience hinges on this.
You should treat the Texas MBA classroom as you would a corporate
boardroom.
Faculty are expected to be professional and prepared to deliver value for each and
every class session. Students are expected to be professional in all respects.
The Texas MBA classroom experience is enhanced when:

Students arrive on time. On time arrival ensures that classes are able to start
and finish at the scheduled time. On time arrival shows respect for both fellow
students and faculty and it enhances learning by reducing avoidable
distractions.
Students display their name cards. This permits fellow students and faculty
to learn names, enhancing opportunities for community building and evaluation
of in-class contributions.
Students do not confuse the classroom for the cafeteria. The classroom
(boardroom) is not the place to eat your breakfast tacos, wraps, sweet potato
fries, or otherwise set up for a picnic. Please plan accordingly. Recognizing that
back-to-back classes sometimes take place over the lunch hour, energy bars
and similar snacks are permitted. Please be respectful of your fellow students
and faculty in your choices.
Students minimize unscheduled personal breaks. The learning
environment improves when disruptions are limited.

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Students are fully prepared for each class. Much of the learning in the
Texas MBA program takes place during classroom discussions. When students
are not prepared they cannot contribute to the overall learning process. This
affects not only the individual, but their peers who count on them, as well.
Students respect the views and opinions of their colleagues.
Disagreement and debate are encouraged. Intolerance for the views of others is
unacceptable.
Phones and wireless devices are turned off. Weve all heard the annoying
ringing in the middle of a meeting. Not only is it not professional, it cuts off the
flow of discussion when the search for the offender begins. When a true need to
communicate with someone outside of class exists (e.g., for some medical
need) please inform the professor prior to class.

Remember, you are competing for the best faculty McCombs has to offer. Your
professionalism and activity in class contributes to your success in attracting the
best faculty to this program.
Academic Dishonesty
I have no tolerance for acts of academic dishonesty. Such acts damage the
reputation of the school and the degree and demean the honest efforts of the
majority of students. The minimum penalty for an act of academic dishonesty will
be a zero for that assignment or exam.
The responsibilities for both students and faculty with regard to the Honor System
are described on the final pages of this syllabus. As the instructor for this course, I
agree to observe all the faculty responsibilities described therein. As a Texas MBA
student, you agree to observe all of the student responsibilities of the Honor Code.
If the application of the Honor System to this class and its assignments is unclear
in any way, it is your responsibility to ask me for clarification.
Students with Disabilities
Upon request, the University of Texas at Austin provides appropriate academic
accommodations for qualified students with disabilities. Services for Students with
Disabilities (SSD) is housed in the Office of the Dean of Students, located on the
fourth floor of the Student Services Building. Information on how to register,
downloadable forms, including guidelines for documentation, accommodation
request letters, and releases of information are available online at
http://deanofstudents.utexas.edu/ssd/index.php. Please do not hesitate to contact
SSD at (512) 471-6259, VP: (512) 232-2937 or via e-mail if you have any questions.

Schedule
1. Wednesday, August 28, 2013
a. Lecture:
in the 21st Century

Global Management

Doggett

2.

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Wednesday, September 4, 2013


a.

Note:
Analysis Coach

The Case

b. Case:
Where Have You Been? An Exercise to
Assess Your Exposure to the Rest of the Worlds
Peoples.
c. Lecture:
in the 21st Century, continued

3.

Global Management

Monday, September 9, 2013


a. Case:

Republic Flour

Study Questions for Republic Flour Mills Case


1.
2.
3.
4.

What business does Republic think it is in?


Who are Republic's customers? What are they buying?
What business do you believe Republic Flour is really in?
What are the Key Factors for Success in the business that they should
be in?
5. What are their most pressing problems and how much are these
problems costing them?
6. What does your break-even analysis (# of bags they need to sell per
month to cover their costs) tell you about Republic Flour's condition?
Your Breakeven Analysis must be turned in at the beginning of
class. Make sure that you keep a copy for yourself!
7. Should they open their second plant? If not, what should they do with
it and how much will your recommendation cost?
8. What are the most realistic options to solve Republic's problems, how
much do each of them cost and how much money will each of them
make Republic?
9. Do you think this company will be successful? Would you invest your
money in it?
10.
Prepare an Action Plan that tells me:
a. How long can they last before they go bankrupt?
b. What should they do and why should they do it?
c. What options you considered and abandoned?
d. When should they take action?
e. How much will it cost and where will the money come from?

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f. Who will do what to whom when?


g. When will results start to show?
h. How much money will your strategy make Republic Flour and when
will their cash flow turn positive?
i. What happens if you are wrong?
4.

Wednesday, September 11, 2013


a. Case:
continued

Republic Flour,

5. Monday, September 16, 2013


a. Note:
b. Case:

Note on Islamic Finance


The International Investor

Study Questions for the International Investor


1. Is Equate an attractive investment opportunity for the sponsors?
What are the expected internal rates of return for equity
investors? For subordinated debt holders?
2. Are the returns commensurate with the risks? What are the
major operating and financial risks? What is the minimum debt
service ratio (DSCR) for the term loans only (for total debt
including subordinated debt)? When does it occur and why?
What is the average DSCR and what does it tell you?
3. DSCR = Cash Available for Debt Service (CADS) / Principle and
Interest
4.
Average DSCR = # years * DSCR/# years
5. Should the sponsors use a tranche of Islamic finance? If so, how
big should it be and what form should it take?
6. How would the inclusion of an Islamic tranche affect the deal?
How would you address these complications?
7. How much of the Islamic tranche should TII underwrite?
6. Wednesday, September 18, 2013
a. Case:

Metro Cash and Carry

Study Questions for Metro Cash and Carry


1. What have been MCC's key competitive advantages as it has moved
into emerging markets?
2. What role did institutional context play in challenging MCC's efforts to
prove the value proposition of its unique wholesaling format and
establish itself as an accepted corporate citizen in Russia, India, and
China?

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3. How would you rethink MCC's approach to strategic expansion and


public relations in India going forward?
7. Monday, September 23, 2013
a. Case:
International

Jabwood

Study Questions for Jabwood International: The Risky Business of


Expanding East
1. Is this the right time to think about expansion?
2. Use macroeconomic indicators to evaluate the country
attractiveness of the two proposed options.
3. Which factors should the country watch?
4. Evaluate competition in each country using Porters 5 forces
framework.
5. Construct a SWOT analysis for expansion in each of the two
countries considered and tell me what the implications of that
analysis are.
6. Estimate Jabwoods maximum potential market share in Saudi
Arabia and China. Provide estimates in cubic meters (CBM), then
forecast sales for the next three years in US$ and in the local
currency.
7. Identify the potential modes of entry (exporting, joint ventures,
licensing, and foreign direct investment) Jabwood should consider
when expanding internationally. Out of all of the potential entry
modes, which is the most suitable? Why?
8. In light of the previous analysis, what should Fayez Jabado do?
Discuss the sequence of expansion and resource allocation.
8. Wednesday, September 25, 2013
a. Case:
Global

Sany: Going
Study Questions for Sany

1. How did Sany succeed in China?

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2. How did Putzmeister lose its dominant market position in China?


What could they have done differently?
3. What should be Sanys strategy with the two brands in China and
globally?
4. What challenges should be anticipated in integrating the two
companies? How would you overcome them?
5. Is this the future of German middle-sized engineering companies
that have formed the backbone of a robust German economy? Is
this good or bad for Germany?

9. Monday, September 30, 2013


a. Case:

Brasil Foods
Study Questions for Brasil Foods

1. As CEO of Brasil Foods, how would you prioritize:


a. Rationalizing the domestic business?
b. Establishing new export markets?
i. Where?
ii. How?
c. Developing a single Brasil Foods culture?
2. What other company might Brasil Foods use as a role model of what
I should aim to be?
10.

Wednesday, October 2, 2013

a. Case:
Ferro
Industries - Exporting Challenge in a Small Firm
Study Questions for Ferro Industries
1. As Yatendra Sharma, how would you manage the challenges of
having limited available resources and limited access to capital
while completing a large overseas order
2. Assess Garima Sharmas strategy for building and maintaining
marketing and customer relationships. Could there be a better
strategy?

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3. Suggest a brand strategy that could help Ferro gain a competitive


advantage over existing domestic and Chinese competitors.
4. In light of Ferros experience, which of the following payment
strategies would you choose as an exporter in order to assure
payment and reduce financial risk? Why?
1. Full advance payment
2. Payment on sight
3. Usance facility to the importer (period of time between the
date a bill of exchange is presented and the date it is paid)
5. Do you agree with Garimas decision to release the machines to
Yusuf? Why or why not?
6. Suggest some ways that Ferro could ensure prompt payment for
future export deals? Should firms like Ferro insist on obtaining a
letter of credit from importers?
7. Would you argue that the communication between Garima and
Yusuf was an important factor in the case? Why or why not?
8. Identify the factors that influenced Garimas decision to release
the machines to Yusuf.
11.

Monday, October 7, 2013

a. Case:

Building a Women's Hospital in Coimbatore, India

Study Questions for Building a Women's Hospital in Coimbatore, India


1. What are the key issues that Jay faces in mid-2011? Are there
issues he has not recognized?
2. What lessons about the process of entrepreneurship in a
resource-poor country can you draw from the case?
3. What is the state of health-care in India and how does it compare
to the sample of countries in Exhibits 10 to 13?
4. What is the state of the healthcare ecosystem in India and how is
it changing? What opportunities and challenges does it present
to Jay?
5. Assess Jays decisions so far.
6. Develop the Womens Centers mission, vision and strategy.
7. What recommendations would you make to Jay?

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Wednesday, October 9, 2013

a. Case:
Commodities and Competitiveness

Australia:

Study Questions for Australia


1. What have been the tradeoffs between growth, inflation, savings
and investment, the current account deficit and competitiveness
over the past 20 years in Australia?
2. What are the economic and environmental issues facing Australia
today?
3. What is your assessment of the countrys economic relationship
with China?
4. Is Australias non-mining competitiveness doomed?

[Activate Working Capital Management Simulation: Managing


Growth]
13.
Monday, October 14, 2013 [Midterm distributed at the end of
class]
a. Note:
b. Debrief:

How Fast Can Your Company Afford to Grow?


Working Capital Simulation: Managing Growth 2
c. Case:

Can the Eurozone Survive?

Study Questions for Eurozone


1. How serious are the problems facing the Eurozone?
2. Which countries are at greatest risk given these problems?
3. Should the Eurozone be saved? If yes, why? If no, why not?

14.

Wednesday, October 16, 2013

a. Case:
Work in Progress?

Turkey A

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Study Questions for Turkey- A Work in Progress?


1. What have been the strengths and weaknesses of Turkeys growth
model?
2. What is causing the current account deficit? What can Turkey do
about it?
3. What do you make of the Islamicization of Turkey? Has it gone too
far? Will it?
4. What do you make of the governments foreign policy zero
problems with its neighbors?
5. Would you invest in Turkey?
15.
Monday, October 21, 2013 [Midterm due at the beginning of
class]
a. Case:
16.

Discuss Midterm

Wednesday, October 23, 2013

a. Case:

Smartbites (A)
Study Questions for Smartbites

1. What value would an America franchise bring to the Turkish


market?
2. Why wouldnt it be easier just to start their own business without
franchise fees and other impediments to creativity?
3. Should they do the franchise deal? If yes, why? If no, why not?
17.

Monday, October 28, 2013

a. Case:
Expanding From China to the World

Tencent:

Study Questions for Tencent


1. As a company nurtured by the walled-garden environment, how
can it make its way outside of its comfort zone?

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2. What does it have to offer to the global market, with its pockets of
look-alike internet services, that the rest of the world is not
deprived of?
3. Will Tencent be able to globalize?
18.

Wednesday, October 30, 2013

a. Case:
Mining, Inc.

New Earth

Study Questions for New Earth Mining


1. Is iron ore in South Africa considered an attractive investment
opportunity for New Earth given the materials presented in the case?
2. Which valuation approach in analyzing the net present value of the new
investment opportunity is most accurate? Why are the other methods
not accurate?
3. What is the value added by the design of the financing package? How
does it alter both the return and the risk of the new project? Is it
effective at reducing the projects operating risks?
4. If you, the CEO of New Earth, were trying to negotiate a better deal with
the customers and lenders, in which of the following areas would you
concentrate your efforts and why?
a. Ore pricing
b. Interest rates
c. Prepayment schedule
d. Dividends allowed
e. Debt maturity or
f. Extension of guarantee program.
5. Should New Earth make the investment?
19.

Monday, November 4, 2013


a. Note:

Cracking the Next Growth Market: Africa

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b. Case:
East of Africa (and West of China):
Chinese Business in Africa
Study Questions for East of Africa (and West of China)

20.

1. Why do Chinese companies want to invest in Africa?


2. What are the arguments for and against land outsourcing?
3. Is there such a thing as a good practice when engaging in land
outsourcing? Would land outsourcing be welcomed by local
partners?
4. What sorts of ethical issues does land outsourcing raise? What
kinds of consequences might this practice entail?
5. The Economist has reported that in early 2009, a US businessman
secured leasehold rights for 400,000 hectares in southern Sudan
from the son of a warlord. What are the implications of this type
of investment?
6. Have any social tensions resulted from the growing relationship
between China and Africa?
7. What are the short- and long-term risks of encouraging raw
material production in exchange for manufactured goods?
8. What is the Dutch disease and what are its implications for
Africa?
9. When private investors put money into cash crops, they tend to
boost world trade, international economic activity and local
economic development. How and why are governments resisting
this?
10. Why do Chinese businesses hire mostly Chinese workers in Africa?
Is this likely to continue in the long term?
Wednesday, November 6, 2013

a. Case:

Tianlong Company and the Toxic Capsule Scandal

Study Questions for Tianlong


1. What can Tianlong do to alleviate the negative influence caused by
this scandal?
2. How should Tianlong respond to the government requirement to
suspend production? How should it deal with the Chinese
government?
3. Who should be held responsible for this scandal? Has the Chinese
government done enough to prevent similar incidents? What would
you suggest to prevent another similar scandal?
4. The scandal not only affected capsule producers but also
pharmaceutical companies that purchased capsules from Ruao
capsule companies. As the CEO of a large Chinese pharmaceutical
firm, what would you do going forward to assure your customers
that your products are not tainted?

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page

Monday, November 11, 2013

a. Case:
New Course

Olam: On A
Study Questions for Olam

1. What business strategy should Olam pursue going forward?


2. What must Olam do to defeat the attack by Muddy Waters?
22.

Wednesday, November 13, 2013

a. Case:
Barons de Rothschild (Lafite): Plus ca change

Domaines

Study Questions for Domaines Barons de Rothschild


1. How does Baron de Rothschild protect the historic gold standard of
Lafite given its new activities?
2. What priority should Baron Rothschild give to each of the existing
businesses? What new opportunities should DBR pursue?
3. Given the multiplicity of changes in the wine industry, how does
DBR fit into that new system?
4. What will DBR look like in 20 years?
23.

Monday, November 18, 2013


a. Case:
Collision Course: Selling European High
Performance Motorcycles in Japan
Study Questions for Collision Course
1. Considering the problems occurring in this case, what is going
wrong inside and outside Tommasi Motorcycles Japan? How are
these issues related or connected?
2. Describe the corporate level strategy that Tommasi Motorcycles
European headquarters appears to be following. Where are the
major decisions made?
3. What is the role that JNO is supposed to play, ideally? Is it
performing its role well? What should it change?

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4. What are the pros and cons of using expatriate managers in this
case? What would be the characteristics for a suitable leader of
JNO?
5. Is Katoh part of the problem or part of the solution?
6. How do you manage a firm where the people do not speak the same
language? Can you suggest things that will make this work better?
Do you think the consultants will approach their next assignment
differently? If so, how?
24.

Wednesday, November 20, 2013


Group Presentations

25.

Monday, November 25, 2013


Group Presentations

26.

Wednesday, November 27, 2013


Group Presentations

27.

Monday, December 2, 2013


Group Presentations

28.

Wednesday, December 4, 2013

a. Note:
Measure Your Life?

How Will You

Assignment for Class


1. Write what you want you obituary to say about you at the end of
your life.
2. Send your obituary to me by Sunday, December 1st.