Tom Peters agrees with me on the Sears-K-Mart mega-super-gaga-merger.
I am going to be hanging out with TP in a few of weeks. Vermont, dinner at the farm; me and thirty other high-powered executives.
Expect blogging, moblogging, and podcasting.
Category Archives: Strategy
Disaster
What you could learn
I like what Forbes is doing. I think they have great reporting with alot of original stories.
Here is what you could learn by reading the current issue of Forbes:
- Did you know all of the big planes used to fight fires have been grounded since May? There have been three fatal crashes in two years. The wings snapped off two planes in mid-air. One contractor has taken the next step and modified a 747. [Splooosh!, p66]
- 800,000 people will take Alaskan cruises this year (that’s 25% more than the state’s population). The summer popularity of the region lets the cruise lines will redeploy ships from winter destinations such as the Caribbean, Mexico, Hawaii, the Panama Canal, and Europe. Carnival sends 16 ships and over 1/3 of their passengers now department from Seattle. [Cruise Control, p98]
- The cover story is about XM radio. What is amazing is about the article is what the National Association of Broadcasters has done over the years to squash innovation. Their latest maneuver is equally amazing. In 1995, Congress enacted a law that requires all digital radio to pay royalities to performers. The exemption for traditional radio was maintained and as well as the NAB’s version of digital, HD radio. The law also made it illegal to broadcast local content, such as traffic reports and sports. The NAB argued that local stations would be hurt by competition from satellite ignorant of local tastes. “Never mind that the radio titans were knitting together nationwide networks to let hundreds of their own stations carry identical programming.” [Broadcast Bullies, p140]
- Rexam is helping beverage upstarts with more than just packaging. To help build the market for both, they are helping companies with retailers, inventory, and distribution of the finished product. [Thirsting for Growth, p174]
- Finally, read about ADV Films. They are the leading distributor of anime in the U.S. There are starting their own cable channel and have started producing their own anime. [Why Grow Up?, p178]
Expectations
So much of life is expectations. Shannon at shannonsays.com has a great post about Jetstar, the new budget airline in Australia. The no-frills approach means no seat assignments, no food service, and no refunds if you show up late. This seems to be upsetting Aussies who expect more from an airline.
There is a lot of talk about exceeding your customers’ expectations, but there is an edge (see free prize inside) by offer less than everyone else. You just need to make sure your customers have adjusted their expectations.
Low Carb Colas
I told you about my search for C2 (again there would be a link, if I could find one) last week. Since then, I found out that C2’s official launch was Monday.
I was again in the grocery store yesterday for the weekly trip and saw no sign of the low carb cola. But what I did see what Pepsi Edge available in 20 oz. single bottles occupying a great location at the end of the aisle. I bought a couple of bottles and tried it last night. My wife and I thought it was pretty good. You get a little aftertaste of the artificial sweetener. I recommend going out and trying it. We will probably buy a 12-pack and see if it can replace the full carb version we drink now.
Business lessons;
- Being first helps
- Make it easy for people to sample
- Don’t be afraid to introduce one product that will cannibalize another
Food and Thought
We were out to dinner with friends last night. We ate at a local Asian chain called Chin’s. They have a great menu that pulls from multiple regions. You order your food at the counter, it is cooked to order, and the staff deliver it to your table.
Their “Five Sustaining Truths” hang at the entrance:
- Food energizes life.
- Knowledge feeds the soul
- True value lies in time well spent
- Each generation creates opportunities
- Passion – and a smile – transform the world
Online Music and Mixes
A week ago today, WSJ led the Marketplace Section with an article headlined, “Online Music Rings Up New Sales With Outtakes, Mixes” [sub. needed]. The piece talks about how songs that will never make it on a CD are ringing up huge sales online.
A day after singer Beyonce belted out her soulful interpretation of the anthem at this year’s Super Bowl, the recording was up for sale for 99 cents on Apple Computer Inc.’s iTunes Music Store, where it became one of the top-selling tracks for the week.
and
Last month, Apple put a version of “I Fought the Law” by rockers Green Day up for sale on iTunes at 10 p.m., after the song aired earlier that day as the soundtrack to a Super Bowl commercial for Apple and PepsiCo Inc. For the next two weeks, “I Fought the Law” was the top-selling track on iTunes and, since then, has bounced around the top three or four slots.
Rob Schoeben, vice president of applications marketing at Apple, says the Green Day track is a “world-wide exclusive” on iTunes, meaning it won’t appear on other Web sites or in stores. Apple believes Internet-only music may be an important way to coax first-time users into buying their music on the Internet. “We think if there are things you can only get online, you can get people who are laggards to try online” music buying, Mr. Schoeben says.
I think both of these illustrate the idea I was talking about last week. If people hear something they like, they want to be able to go buy it right away. By offer these tracks, iTunes are filling that need and creating a unique revenue source that didn’t exist before.
BTW, I don’t buy the laggards argument.
Nothing stays the same
The Wall Street Journal reports today that DeBeers is in talks with the Justice Department to reach a settlement in the long-standing case against the South African based firm. DeBeers is best known for their virtual monopoly of natural diamond. They are also a strong competitor in the industrial diamond market.
The case against Debeers stems from their industrial diamond business. It has been open since the 1940’s and was reignited in 1994 when they and GE were both charged with price fixing. The case against GE was thrown out after only two days in trial. With no business operations in the U.S., the Justice Department was unable to prosecute DeBeers. Sources say DeBeers is going to plead guilty and pay a fine to settle the case.
Why settle? Times are changing. There are more sources for jewelry quality diamonds. Artifical diamonds are starting enter the market. DeBeers has decided they need to have a physical presence in the U.S. They have been developing retail stores in Paris and Tokyo with a French firm. Other plans may be in the making. Legal issues cloud their ability to establish a high quality brand.
My interest in the story is that I worked for GE Superabrasives for three years. I started about six months after the price-fixing case was thrown out. What I always found interesting was DeBeers’ strategy to create stability in the marketplace. They wanted stable demand and stable prices. This held true in both their natural and industrial diamond business. That started to change in industrial diamond with new competition from Asia forcing prices lower.
It now seems DeBeers is dealing with the same problem on the other side of their business.