Microsoft started selling its latest operating system, Vista - its first major update since Windows XP was introduced five years ago - to consumers at the end of January after repeated set backs. The move helped drive the firm's first-quarter revenue up 32% to $14.4bn from 10.9bn in the same period a year ago. (Shoppers were given coupons offering discounts during the Christmas season to help retain Microsoft's loyal following.)
Microsoft's new Office software was also launched in January to coincide with the delayed start date for Vista.
Discount coupons at Christmas? High tech can the tango with high sentiment for revenue.
[Click here for full story at: BBCNEWS.COM]
Saturday, April 28, 2007
REVENUE STRATEGY - CITIGROUP
1. Citigroup Inc. acquired 61 percent of Nikko Cordial Corp., Japan's third-biggest brokerage, for $7.7 billion to gain more than 100 branches in Japan, adding to acquisitions in China and Taiwan over the past six months.
2. Citigroup must raise its stake to two-thirds to be able to merge or sell units without the consent of other shareholders.
3. The takeover will also enable it to expand investment banking operations in Japan through its joint venture with Nikko, as well as offer services such as wealth management to Nikko's customers, which have a combined 40 trillion yen of assets.
4. Citigroup plans to set up a financial holding company in Japan by July.
5. It wants to generate 60 percent of profit overseas, up from 45 percent last year.
It is hard to imagine but the universe they say keeps expanding. Within infinity or beyond? What about Citigroup?
[Click here for full story at: BLOOMBERG.COM]
2. Citigroup must raise its stake to two-thirds to be able to merge or sell units without the consent of other shareholders.
3. The takeover will also enable it to expand investment banking operations in Japan through its joint venture with Nikko, as well as offer services such as wealth management to Nikko's customers, which have a combined 40 trillion yen of assets.
4. Citigroup plans to set up a financial holding company in Japan by July.
5. It wants to generate 60 percent of profit overseas, up from 45 percent last year.
It is hard to imagine but the universe they say keeps expanding. Within infinity or beyond? What about Citigroup?
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - COMCAST
1. Comcast, the largest U.S. cable company, added a record number of high-speed Internet users and signed up more than twice as many phone subscribers as it did a year earlier by selling those two products in a package with subscription TV—the so-called triple play.
2. It is expanding in such markets as small business and adding a range of new products and services—from wireless calling to online entertainment to be a very different company in three to four years.
3. It is stepping up efforts to court small and midsize businesses—a market that could generate $3.8 billion in sales for Comcast by 2011, up from $660 million now.
4. To beef up mobile services, Comcast has begun to offer a wireless service called Pivot in select markets through a joint venture with Sprint Nextel.
5. Comcast’s wireless plans hopes to one-up existing wireless services by incorporating its own strong suit: TV. Comcast customers will be able to access local news clips. The service will also eventually let users retrieve home voice mails, view TV schedules, and control digital video recorders via cell phone.
6. Another area of growth: online services. (Traffic to all Comcast's sites has dropped 5% in the past year). Comcast hopes to reverse the decline, and compete with Google's YouTube and News Corp.'s MySpace for a bigger slice of the U.S. online video advertising market. Comcast reached an agreement with News Corp. and NBC to distribute their content and bought ticketing site Fandango. In December it launched GameInvasion.net, an online gaming destination. The company is also trying to lure traffic to user-generated video site Ziddio.com through partnerships with Facebook.com.
7. It will launch Fancast.com later this year, which will let consumers search, manage, and watch videos, games, and other content across a gamut of devices and channels, including TVs, PCs, and mobile phones. The site may also sell video-on-demand and DVDs.
Convergence is the soul of diversification?
[Click here for full story at: BUSINESSWEEK.COM]
2. It is expanding in such markets as small business and adding a range of new products and services—from wireless calling to online entertainment to be a very different company in three to four years.
3. It is stepping up efforts to court small and midsize businesses—a market that could generate $3.8 billion in sales for Comcast by 2011, up from $660 million now.
4. To beef up mobile services, Comcast has begun to offer a wireless service called Pivot in select markets through a joint venture with Sprint Nextel.
5. Comcast’s wireless plans hopes to one-up existing wireless services by incorporating its own strong suit: TV. Comcast customers will be able to access local news clips. The service will also eventually let users retrieve home voice mails, view TV schedules, and control digital video recorders via cell phone.
6. Another area of growth: online services. (Traffic to all Comcast's sites has dropped 5% in the past year). Comcast hopes to reverse the decline, and compete with Google's YouTube and News Corp.'s MySpace for a bigger slice of the U.S. online video advertising market. Comcast reached an agreement with News Corp. and NBC to distribute their content and bought ticketing site Fandango. In December it launched GameInvasion.net, an online gaming destination. The company is also trying to lure traffic to user-generated video site Ziddio.com through partnerships with Facebook.com.
7. It will launch Fancast.com later this year, which will let consumers search, manage, and watch videos, games, and other content across a gamut of devices and channels, including TVs, PCs, and mobile phones. The site may also sell video-on-demand and DVDs.
Convergence is the soul of diversification?
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY – BHARTI AIRTEL
1. Bharti Airtel Ltd., India's most valuable telecom company, plans to spend between $2.5 billion to $3 billion this year to maintain Bharti's lead before Vodafone Group Plc takes control of an Indian network.
2. Bharti lowered call charges to sign up more customers than Reliance Communications Ltd. and Hutchison Essar Ltd. in a market that will exceed 250 million users within six months.
3. It removed monthly rentals for roaming services, and cut roaming charges by between 40 percent and 56 percent to increase usage and bring down call costs.
4. Bharti also completed verifying the identities of all its customers by the end of last month, complying with government regulations.
Competition may leave competitors either vain or bitter, but customers usually happy.
[Click here for full story at: BLOOMBERG.COM]
2. Bharti lowered call charges to sign up more customers than Reliance Communications Ltd. and Hutchison Essar Ltd. in a market that will exceed 250 million users within six months.
3. It removed monthly rentals for roaming services, and cut roaming charges by between 40 percent and 56 percent to increase usage and bring down call costs.
4. Bharti also completed verifying the identities of all its customers by the end of last month, complying with government regulations.
Competition may leave competitors either vain or bitter, but customers usually happy.
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY – JSW STEEL
JSW Steel Ltd., India's fourth- biggest steelmaker, plans to raise as much as $321 million in a combination of syndicated rupee and dollar loans to fund a new hot strip steel mill in the southern state of Karnataka with a capacity of two million tons per annum.
It has hired Citigroup Inc., Standard Chartered Plc, ABN Amro Holding NV and State Bank of India to borrow as much as $125 million overseas over six years. The loan may be increased by $50 million if there's sufficient demand.
It will also borrow six billion rupees ($146 million) from domestic banks.
Indian steel and aluminum producers need to increase production capacity as the world's second-fastest pace of economic growth stokes demand from construction and auto companies.
Whoever knows the calculus of over-investment is not welcome to the Dreamers’ Ball, for now.
[Click here for full story at: BLOOMBERG.COM]
It has hired Citigroup Inc., Standard Chartered Plc, ABN Amro Holding NV and State Bank of India to borrow as much as $125 million overseas over six years. The loan may be increased by $50 million if there's sufficient demand.
It will also borrow six billion rupees ($146 million) from domestic banks.
Indian steel and aluminum producers need to increase production capacity as the world's second-fastest pace of economic growth stokes demand from construction and auto companies.
Whoever knows the calculus of over-investment is not welcome to the Dreamers’ Ball, for now.
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - SONY
1. Sony is tailoring products to differing tastes across the globe putting regional divisions more in charge of their own destiny ensuring that local conditions are better accounted for.
2. Two years ago Howard K. Stringer was hired to be the first Westerner to lead the entire company. Since Stringer's appointment, Sony's U.S. unit has become an important incubator for new products and services.
3. The U.S. consumer electronics unit has become key to Sony's worldwide turnaround efforts.
4. The center's dozen or so designers are doing work that in the past was reserved for headquarters, creating high-margin products, from Internet TV devices to stereo systems, that are helping shore up the bottom line.
5. Sony's U.S. chiefs are increasingly empowered to reject products conceived in Japan that they believe won't fly stateside even if Japan remains the center of Sony's creative universe. Executives in the U.S. now enjoy an unprecedented degree of influence in shaping everything from a gadget's styling to the software that makes it tick. It is a fairly dramatic shift in which communication and collaboration on ideas and projects go both ways.
6. Consumer electronics either conceived or improved in the U.S. have helped stanch losses in other divisions, such as film and music.
7. And the early success of U.S. initiatives has prompted the company to start offering similar products elsewhere. In France and Britain, Sony is now marketing VAIO PCs with built-in cellular broadband access. That strategy, initiated in the U.S., helps boost razor-thin PC margins because Sony collects a fee from cellular carriers every time a user activates the wireless service.
8. The Mylo, a handheld Web-browsing and text-messaging gadget aimed at teens that was designed jointly in Japan and the U.S., was recently introduced in Japan after initial American sales exceeded expectations.
9. Engineers in the U.S. developed a $299 box called the Bravia Internet Video Link that lets TV viewers download video clips from America Online and Yahoo! Inc., as well as films and tunes from Sony Pictures and BMG Music, all with a click of their remote. Sony TV executives in Japan were enthused to build the technology into TVs they sell there as well.
10. The U.S. center is also tweaking designs to boost the appeal of Sony products to American buyers.
“Think global act local” and “think local act global” now blur together well.
[Click here for full story at: BUSINESSWEEK.COM]
2. Two years ago Howard K. Stringer was hired to be the first Westerner to lead the entire company. Since Stringer's appointment, Sony's U.S. unit has become an important incubator for new products and services.
3. The U.S. consumer electronics unit has become key to Sony's worldwide turnaround efforts.
4. The center's dozen or so designers are doing work that in the past was reserved for headquarters, creating high-margin products, from Internet TV devices to stereo systems, that are helping shore up the bottom line.
5. Sony's U.S. chiefs are increasingly empowered to reject products conceived in Japan that they believe won't fly stateside even if Japan remains the center of Sony's creative universe. Executives in the U.S. now enjoy an unprecedented degree of influence in shaping everything from a gadget's styling to the software that makes it tick. It is a fairly dramatic shift in which communication and collaboration on ideas and projects go both ways.
6. Consumer electronics either conceived or improved in the U.S. have helped stanch losses in other divisions, such as film and music.
7. And the early success of U.S. initiatives has prompted the company to start offering similar products elsewhere. In France and Britain, Sony is now marketing VAIO PCs with built-in cellular broadband access. That strategy, initiated in the U.S., helps boost razor-thin PC margins because Sony collects a fee from cellular carriers every time a user activates the wireless service.
8. The Mylo, a handheld Web-browsing and text-messaging gadget aimed at teens that was designed jointly in Japan and the U.S., was recently introduced in Japan after initial American sales exceeded expectations.
9. Engineers in the U.S. developed a $299 box called the Bravia Internet Video Link that lets TV viewers download video clips from America Online and Yahoo! Inc., as well as films and tunes from Sony Pictures and BMG Music, all with a click of their remote. Sony TV executives in Japan were enthused to build the technology into TVs they sell there as well.
10. The U.S. center is also tweaking designs to boost the appeal of Sony products to American buyers.
“Think global act local” and “think local act global” now blur together well.
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - TOSHIBA
Toshiba the world's second-largest maker of NAND flash chips had to cut prices of the chips by 60% due to intense competition in the sector to sustain their strong sales.
Toshiba estimates prices will fall another 50% this year.
Price cuts of 60% and then 50%!! Meaning the mark up was more than 400% to start with. Cool?
[Click here for full story at: BBCNEWS.COM]
Toshiba estimates prices will fall another 50% this year.
Price cuts of 60% and then 50%!! Meaning the mark up was more than 400% to start with. Cool?
[Click here for full story at: BBCNEWS.COM]
REVENUE STRATEGY – IDEAL & MACQUARIE
1. Impulsora del Desarrollo y el Empleo en America Latina SA (IDEAL) and Macquarie Infrastructure Group teamed up to bid for a package of four Mexican toll roads covering 558 kilometers (336 miles) worth at least $2.3 billion.
2. Ideal was created in 2005 to make money from roads, dams and construction. The package would add four toll roads in central Mexico to five already run by Ideal in the nation.
3. Macquarie is focusing on expansion outside Australia after spinning off highways in Sydney last year.
[Toll roads are luring investors such as Macquarie and Ideal for their predictable cash flows and growth potential. These roads are very attractive because they're ready and have a track record, like privatizing a profitable company.
Mexico's government is seeking to resell $25 billion of highways after taking them over from private companies that had no money to maintain the projects following a currency crisis in December 1994.]
Keep your eyes on the toll and your mind upon the wheeling! And dealing!
[Click here for full story at: BLOOMBERG.COM]
2. Ideal was created in 2005 to make money from roads, dams and construction. The package would add four toll roads in central Mexico to five already run by Ideal in the nation.
3. Macquarie is focusing on expansion outside Australia after spinning off highways in Sydney last year.
[Toll roads are luring investors such as Macquarie and Ideal for their predictable cash flows and growth potential. These roads are very attractive because they're ready and have a track record, like privatizing a profitable company.
Mexico's government is seeking to resell $25 billion of highways after taking them over from private companies that had no money to maintain the projects following a currency crisis in December 1994.]
Keep your eyes on the toll and your mind upon the wheeling! And dealing!
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY – WUHAN STEEL
1. Wuhan Iron & Steel Co., China's third-biggest steelmaker by market value, and rivals in China are shifting production to higher grades, including cold-rolled sheets used in automobiles, as the nation has overcapacity in lower grades.
2. Wuhan Steel, China's only mill capable of making oriented silicon steel used in power transformers, will boost output by 40 percent to 280,000 tons this year after it started operations at a new plant in September. Cold-rolled silicon steel output would rise to 1.62 million tons by 2010
3. Cold-rolled sheet output may rise 76 percent to 3 million tons this year. Production of the sheet will rise to at least 20 million tons by 2010.
And whoever knows the calculus of over-investment is not welcome to the Dreamers’ Ball, for now.
[Click here for full story at: BLOOMBERG.COM]
2. Wuhan Steel, China's only mill capable of making oriented silicon steel used in power transformers, will boost output by 40 percent to 280,000 tons this year after it started operations at a new plant in September. Cold-rolled silicon steel output would rise to 1.62 million tons by 2010
3. Cold-rolled sheet output may rise 76 percent to 3 million tons this year. Production of the sheet will rise to at least 20 million tons by 2010.
And whoever knows the calculus of over-investment is not welcome to the Dreamers’ Ball, for now.
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - TELEMAR
1. Tele Norte Leste Participacoes SA, Brazil's biggest phone company, reduced debt and took advantage of record-low interest rates (Brazil's central bank reduced the benchmark lending rate for a 15th consecutive time to bolster growth).
2. Debt fell 20 percent to 8.8 billion reais in the quarter from a year earlier, lowering financial expenses by 53 percent to 160 million reais.
3. But it had higher costs to connect calls to other service providers.
‘Neither a borrower or a lender be’ – or something like that said Shakespeare perhaps?
[Click here for full story at: BLOOMBERG.COM]
2. Debt fell 20 percent to 8.8 billion reais in the quarter from a year earlier, lowering financial expenses by 53 percent to 160 million reais.
3. But it had higher costs to connect calls to other service providers.
‘Neither a borrower or a lender be’ – or something like that said Shakespeare perhaps?
[Click here for full story at: BLOOMBERG.COM]
Thursday, April 26, 2007
EXPENDITURE STRATEGY - DELTA AIR LINES
Delta Air Lines will emerge from bankruptcy protection (from their creditors) on Monday after a US judge approved its recovery plans:
1. It has cut almost 6,000 jobs
2. It has reduced its number of planes in the domestic market and launched new international routes.
3. It plans to issue new shares to its creditors.
When the going gets tough.....cut jobs, cut planes and pay off your creditors with shares!
[Click here for full story at: BBCNEWS.COM]
1. It has cut almost 6,000 jobs
2. It has reduced its number of planes in the domestic market and launched new international routes.
3. It plans to issue new shares to its creditors.
When the going gets tough.....cut jobs, cut planes and pay off your creditors with shares!
[Click here for full story at: BBCNEWS.COM]
REVENUE STRATEGY - SIEMENS
1. It spent $7.6 billion last year on acquisitions to strengthen core businesses and build Siemens' presence in emerging markets such as China and India
2. It made plans to list the profitable, but non-core, VDO auto electronics unit on the stock exchange
(Signs of underhanded strategies:
1. Munich prosecutors are investigating whether the company systematically bribed foreign officials to win contracts. Siemens admits hundreds of millions may have been misused.
2. A separate investigation is probing whether Siemens secretly financed a workers' organization that was supposed to act as a counterweight to IG Metall, the militant labor union that negotiates on behalf of most Siemens workers in Germany.)
How do you define an indisputable fine line between right and wrong?
[Click here for full story at: BUSINESSWEEK.COM]
2. It made plans to list the profitable, but non-core, VDO auto electronics unit on the stock exchange
(Signs of underhanded strategies:
1. Munich prosecutors are investigating whether the company systematically bribed foreign officials to win contracts. Siemens admits hundreds of millions may have been misused.
2. A separate investigation is probing whether Siemens secretly financed a workers' organization that was supposed to act as a counterweight to IG Metall, the militant labor union that negotiates on behalf of most Siemens workers in Germany.)
How do you define an indisputable fine line between right and wrong?
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - HINDUSTAN LEVER
1. Hindustan Lever Ltd., India's biggest household-products maker, raised prices for detergents and skin-creams (Surf Excel Blue, Lux soap, Fair & Lovely cream)
2. Hindustan Lever has increased spending on advertisements 27% in 2006 to prompt customers to upgrade from brands such as Breeze soap to Lux and from Wheel detergent to Surf.
(Makers of household and consumer products will benefit as India's economic growth spurs consumer demand and urban chain stores such as Big Bazaar open outlets in smaller towns across the country raising playing field for all players.)
Let the good times roll. But generate other ascendancy plans too.
[Click here for full story at: BLOOMBERG.COM]
2. Hindustan Lever has increased spending on advertisements 27% in 2006 to prompt customers to upgrade from brands such as Breeze soap to Lux and from Wheel detergent to Surf.
(Makers of household and consumer products will benefit as India's economic growth spurs consumer demand and urban chain stores such as Big Bazaar open outlets in smaller towns across the country raising playing field for all players.)
Let the good times roll. But generate other ascendancy plans too.
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - SUN MICROSYSTEMS
The company has incurred nearly $1.5 billion in charges since 2002, eliminating one fourth of its workforce and closing facilities. The firm recently announced another 5,000 job cuts and more facility closures, with the goal of delivering a 4% operating margin by the end of fiscal 2007.
Old overlooked rule of business: make hay while the ‘sun’ shines but not untenable expenses.
[Click here for full story at: BUSINESSWEEK.COM]
Old overlooked rule of business: make hay while the ‘sun’ shines but not untenable expenses.
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - SUN MICROSYSTEMS
1. Sun has brought in new Niagara computer servers, designed to save customers money by yielding more processing power for the buck.
2. And Sun's Solaris operating system distributes an open-source version that tempts customers with free software packages, in the hopes that they'll also buy Solaris licenses and switch to Sun hardware.
Is this enough to fight IBM & HP?
[Click here for full story at: BUSINESSWEEK.COM]
2. And Sun's Solaris operating system distributes an open-source version that tempts customers with free software packages, in the hopes that they'll also buy Solaris licenses and switch to Sun hardware.
Is this enough to fight IBM & HP?
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - TOYOTA MOTOR
1. Toyota isn't accepting its No.1 position comfortably. It makes some of its executives nervous to be the chased, rather than the chaser.
2. The Toyota Way is about constant improvement. It's a never-ending journey. It bases its business on what the customer wants, so there's no end to the improvement it can achieve. Toyota doesn't monopolize this idea. And it has to translate beyond Japanese culture to be successful.
3. Respect for people is another important element. Employees. Customers. Suppliers.
4. The Toyota Way is teamwork with suppliers. This teamwork is going to be a long-lasting relationship. Price is only one element. Trust is a more important element. (A supplier of axles for pickup trucks was awarded the contract with no discussion of price. It was all based on whether his company's processes and quality were acceptable to Toyota. The relationship is a sharing concept, and should always be win-win.)
5. It is likely to pursue more niches in future. More important, it will keep improving the existing product lineup that has a lot of opportunities.
6. Increasingly, it is doing the development of its vehicles in the States.
7. In the last five to 10 years it has advanced in the design department where it once lagged.
8. Twenty years ago when Toyota had no confidence in how it would operate manufacturing in the U.S. it began with the NUMMI joint-venture plant with GM [where Toyota builds the Matrix and Corolla alongside the Pontiac Vibe]. GM helped a great deal.
9.Its corporate advertising is quite effective and resented by its Detroit rivals.
If Toyota feels more comfortable chasing the competition, it can now start chasing GM and Ford combined and ultimately all the other automakers of the world combined. After that....it will have to learn to live with an uncomfortable feeling.
[Click here for full story at: BUSINESSWEEK.COM]
2. The Toyota Way is about constant improvement. It's a never-ending journey. It bases its business on what the customer wants, so there's no end to the improvement it can achieve. Toyota doesn't monopolize this idea. And it has to translate beyond Japanese culture to be successful.
3. Respect for people is another important element. Employees. Customers. Suppliers.
4. The Toyota Way is teamwork with suppliers. This teamwork is going to be a long-lasting relationship. Price is only one element. Trust is a more important element. (A supplier of axles for pickup trucks was awarded the contract with no discussion of price. It was all based on whether his company's processes and quality were acceptable to Toyota. The relationship is a sharing concept, and should always be win-win.)
5. It is likely to pursue more niches in future. More important, it will keep improving the existing product lineup that has a lot of opportunities.
6. Increasingly, it is doing the development of its vehicles in the States.
7. In the last five to 10 years it has advanced in the design department where it once lagged.
8. Twenty years ago when Toyota had no confidence in how it would operate manufacturing in the U.S. it began with the NUMMI joint-venture plant with GM [where Toyota builds the Matrix and Corolla alongside the Pontiac Vibe]. GM helped a great deal.
9.Its corporate advertising is quite effective and resented by its Detroit rivals.
If Toyota feels more comfortable chasing the competition, it can now start chasing GM and Ford combined and ultimately all the other automakers of the world combined. After that....it will have to learn to live with an uncomfortable feeling.
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - AMERICA MOVIL
America Movil SA, the largest mobile-phone company in Latin America, operates in 14 Latin American countries and the U.S. It added 6.5 million customers in the quarter mostly in Mexico and Brazil, bringing its total to 131.2 million.
The company will spend about $2.8 billion annually through 2009 to expand its networks and invest in equipment.
When there is room to grow it is easier to know where to put your money.
[Click here for full story at: BUSINESSWEEK.COM]
The company will spend about $2.8 billion annually through 2009 to expand its networks and invest in equipment.
When there is room to grow it is easier to know where to put your money.
[Click here for full story at: BUSINESSWEEK.COM]
Wednesday, April 25, 2007
REVENUE STRATEGY - SALESFORCE.COM
Salesforce.com aims to catapult itself beyond customer management to become the hub of on-demand business services—to help customers run their businesses entirely online.
How?
1. It is encouraging outside startups to develop online software that complements its own.
2. It is going beyond the arm's-length practices like offering limited access to programming interfaces and holding software developer conferences.
3. It will open an incubator for 32 startup companies, plus a few established partners that want satellite offices. They will create applications for Salesforce's AppExchange, a directory of online business services that work with Salesforce software, such as programs to run e-mail campaign programs and customer surveys.
4. It is holding biweekly colloquia on product management, on-demand technology, and the like.
5. The startups will be able to tap the knowledge of Salesforce people, learn from what other startups are doing, get leads on potential recruits, move faster into new markets
6. Salesforce's San Mateo incubator is intended to be the first of many, from Silicon Valley to Tokyo, London, India, and possibly Singapore.
7. A second phase with more startups is scheduled to open in the same building in June. With Incubator 2.0 it is trying to pluck the best of incubators and co-working facilities, where independent companies can share office facilities, Internet access, and tips on how to run their businesses better.
8. It is trying to be closer to the startups, remove some of their risks and remove the leading cause of death for startups - real estate.
9. It will avoid the pitfalls of incubators before the dot-com bust by not investing in these companies and charging them $20,000 a year for a small space. It will encourage them to develop software for the AppExchange.
History teaches us so much if we choose to learn
[Click here for full story at: BUSINESSWEEK.COM]
How?
1. It is encouraging outside startups to develop online software that complements its own.
2. It is going beyond the arm's-length practices like offering limited access to programming interfaces and holding software developer conferences.
3. It will open an incubator for 32 startup companies, plus a few established partners that want satellite offices. They will create applications for Salesforce's AppExchange, a directory of online business services that work with Salesforce software, such as programs to run e-mail campaign programs and customer surveys.
4. It is holding biweekly colloquia on product management, on-demand technology, and the like.
5. The startups will be able to tap the knowledge of Salesforce people, learn from what other startups are doing, get leads on potential recruits, move faster into new markets
6. Salesforce's San Mateo incubator is intended to be the first of many, from Silicon Valley to Tokyo, London, India, and possibly Singapore.
7. A second phase with more startups is scheduled to open in the same building in June. With Incubator 2.0 it is trying to pluck the best of incubators and co-working facilities, where independent companies can share office facilities, Internet access, and tips on how to run their businesses better.
8. It is trying to be closer to the startups, remove some of their risks and remove the leading cause of death for startups - real estate.
9. It will avoid the pitfalls of incubators before the dot-com bust by not investing in these companies and charging them $20,000 a year for a small space. It will encourage them to develop software for the AppExchange.
History teaches us so much if we choose to learn
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - KKR
Private equity firms are bidding for chains, attracted by real estate and free cash flow.
Like KKR:
1. Kohlberg Kravis Roberts & Co and Stefano Pessina raised their bid for Alliance Boots Plc, the U.K.'s largest drugstore chain, to 11.1 billion pounds ($22.2 billion) 40 percent above the share price on March 8 for Europe's biggest ever leveraged buyout for control of 3,100 stores and a wholesale drug supplier to more than 125,000 pharmacies and hospitals.
2. KKR will receive a106 million-pound fee from Alliance Boots if a competing bid is announced and subsequently completed.
3. KKR also wants to make acquisitions outside the U.K.
KKR has completed 150 takeovers worth $279 billion including debt since it was founded three decades ago.
Have money will travel.
[Click here for full story at: BLOOMBERG.COM]
Like KKR:
1. Kohlberg Kravis Roberts & Co and Stefano Pessina raised their bid for Alliance Boots Plc, the U.K.'s largest drugstore chain, to 11.1 billion pounds ($22.2 billion) 40 percent above the share price on March 8 for Europe's biggest ever leveraged buyout for control of 3,100 stores and a wholesale drug supplier to more than 125,000 pharmacies and hospitals.
2. KKR will receive a106 million-pound fee from Alliance Boots if a competing bid is announced and subsequently completed.
3. KKR also wants to make acquisitions outside the U.K.
KKR has completed 150 takeovers worth $279 billion including debt since it was founded three decades ago.
Have money will travel.
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - ALLIANCE BOOTS
1. Alliance Boots has improved profitability with inventory control, improved buying terms.
2. It plans to cut costs by 100 million pounds a year by 2010. KKR bidding to take it over wants to accelerate its cost-reduction plans
3. It plans to relocate some stores and close others.
Frugality and asceticism are clearly not for hermits alone.
[Click here for full story at: BLOOMBERG.COM]
2. It plans to cut costs by 100 million pounds a year by 2010. KKR bidding to take it over wants to accelerate its cost-reduction plans
3. It plans to relocate some stores and close others.
Frugality and asceticism are clearly not for hermits alone.
[Click here for full story at: BLOOMBERG.COM]
Tuesday, April 24, 2007
EXPENDITURE STRATEGY - TECH COMPANIES
Investors pressured technology companies for larger buybacks after earnings improved earlier this decade from a slump spurred by the collapse of spending by Internet companies.
International Business Machines Corp. added $15 billion to its stock buyback program, the most ever, and raised its dividend 33 percent to reward shareholders as profit expands. (IBM has announced buybacks of at least $3.5 billion annually since 2003). IBM plans to take on debt to finance much of the buyback and probably won't be able to sustain this repurchase level in the future. Net income will be negatively affected because of interest costs for the increased debt
Microsoft Corp. boosted its buyback program to $36 billion over five years. It combined the unused funds from a tender offer into its regular buyback.
Hewlett-Packard Co., the world's largest maker of personal computers, announced an $8 billion stock repurchase plan, its largest ever.
Nokia Oyj, the top mobile-phone maker, plans to buy back 380 million shares at about 4 billion euros ($5.44 billion) in 2007.
Leaner meaner business machines may be greater. And if debt taken for buyback programs raises the cost of capital, the benefit to shareholders repaid at a high share price are evened out by the burden of the interest on debt borne by the remaining shareholders.
[Click here for full story at: BLOOMBERG.COM]
International Business Machines Corp. added $15 billion to its stock buyback program, the most ever, and raised its dividend 33 percent to reward shareholders as profit expands. (IBM has announced buybacks of at least $3.5 billion annually since 2003). IBM plans to take on debt to finance much of the buyback and probably won't be able to sustain this repurchase level in the future. Net income will be negatively affected because of interest costs for the increased debt
Microsoft Corp. boosted its buyback program to $36 billion over five years. It combined the unused funds from a tender offer into its regular buyback.
Hewlett-Packard Co., the world's largest maker of personal computers, announced an $8 billion stock repurchase plan, its largest ever.
Nokia Oyj, the top mobile-phone maker, plans to buy back 380 million shares at about 4 billion euros ($5.44 billion) in 2007.
Leaner meaner business machines may be greater. And if debt taken for buyback programs raises the cost of capital, the benefit to shareholders repaid at a high share price are evened out by the burden of the interest on debt borne by the remaining shareholders.
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - TOYOTA MOTOR
Toyota dislodged General Motors as the world's biggest seller of cars and trucks for the first time ever.
How?
1. Toyota's current sales momentum is being powered in the U.S. by demand for its Corolla and Camry sedans and its hybrid-powered Prius and the Lexus luxury lineup.
2. Toyota has a deeply ingrained commitment to manufacturing excellence since it launched some 70 years ago.
3. Toyota revolutionized car making and global manufacturing.
4. Its people are ever mindful of Taiichi Ohno's legacy of efficient and lean manufacturing that evolved to include just-in-time delivery, continuous improvement (kaizen), mistake proofing (pokayoke), and obeya, or face-to-face brainstorming sessions between engineers, designers, marketing pros, and suppliers.
5. Toyota never seems to lose its fanatical attention to detail, corrective adjustment, frugality, process redesign, and market adaptation.
6. The same exacting efficiency and quality standards are expected at Toyota plants anywhere in the world.
7. Toyota's best workers are trained to learn the Toyota way of double- and-triple checking parts and processes for trouble and immediately signaling to superiors when things go wrong.
8. Toyota workers value frugality—spending weeks jawboning with suppliers to figure out ways to redesign a key component and shave another 10% from production costs.
9. Its leadership team is paranoid of big company complacency, self-satisfaction and arrogance and is determined to not allow these to poison the organization.
If the customer is king......manufacturing excellence is the queen of revenue
[Click here for full story at: BUSINESSWEEK.COM]
How?
1. Toyota's current sales momentum is being powered in the U.S. by demand for its Corolla and Camry sedans and its hybrid-powered Prius and the Lexus luxury lineup.
2. Toyota has a deeply ingrained commitment to manufacturing excellence since it launched some 70 years ago.
3. Toyota revolutionized car making and global manufacturing.
4. Its people are ever mindful of Taiichi Ohno's legacy of efficient and lean manufacturing that evolved to include just-in-time delivery, continuous improvement (kaizen), mistake proofing (pokayoke), and obeya, or face-to-face brainstorming sessions between engineers, designers, marketing pros, and suppliers.
5. Toyota never seems to lose its fanatical attention to detail, corrective adjustment, frugality, process redesign, and market adaptation.
6. The same exacting efficiency and quality standards are expected at Toyota plants anywhere in the world.
7. Toyota's best workers are trained to learn the Toyota way of double- and-triple checking parts and processes for trouble and immediately signaling to superiors when things go wrong.
8. Toyota workers value frugality—spending weeks jawboning with suppliers to figure out ways to redesign a key component and shave another 10% from production costs.
9. Its leadership team is paranoid of big company complacency, self-satisfaction and arrogance and is determined to not allow these to poison the organization.
If the customer is king......manufacturing excellence is the queen of revenue
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - TOYOTA MOTOR
A HISTORIC MILESTONE HAS BEEN CROSSED !!
Toyota Motor Corp. sold more cars and trucks than General Motors Corp. for the first time. Toyota's global sales rose to 2.35 million vehicles in the Jan.-March quarter while GM's rose to 2.26 million vehicles.
How?
1. It focussed on building highly reliable fuel-efficient cars including the Prius gasoline-electric hybrid, which were more attractive because of higher fuel prices.
2. Toyota increased capital spending by 1.4 percent to a record 1.55 trillion yen ($13.1 billion) in the year ended in March from a year ago.
3. The addition of its sixth North American factory in San Antonio last year helped spur Toyota's sales in the U.S., GM's home market
4. It is building its seventh North American plant in Ontario, Canada.
5. It will open its eighth North American factory in Mississippi in 2010 to build Highlander sport-utility vehicles.
6. It is also boosting production in countries including Russia, China and Thailand.
“Built to last” will play second fiddle to “built to transcend”
[Click here for full story at: BLOOMBERG.COM]
Toyota Motor Corp. sold more cars and trucks than General Motors Corp. for the first time. Toyota's global sales rose to 2.35 million vehicles in the Jan.-March quarter while GM's rose to 2.26 million vehicles.
How?
1. It focussed on building highly reliable fuel-efficient cars including the Prius gasoline-electric hybrid, which were more attractive because of higher fuel prices.
2. Toyota increased capital spending by 1.4 percent to a record 1.55 trillion yen ($13.1 billion) in the year ended in March from a year ago.
3. The addition of its sixth North American factory in San Antonio last year helped spur Toyota's sales in the U.S., GM's home market
4. It is building its seventh North American plant in Ontario, Canada.
5. It will open its eighth North American factory in Mississippi in 2010 to build Highlander sport-utility vehicles.
6. It is also boosting production in countries including Russia, China and Thailand.
“Built to last” will play second fiddle to “built to transcend”
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - BP
1. BP Plc, Europe's second-largest oil company, is spending more on stock buybacks than its European peers to prop up its share price and return wealth to shareholders spending $2.5 billion last quarter and $15.5 billion last year. It defended the policy against protests for more dividends instead by arguing that it wasn't possible to estimate how much further BP stock would have fallen last year without support from buybacks. In contrast, rival Shell hasn't spent any money on buybacks since Feb. 1 because they haven't boosted Shell's stock enough.
2. BP will immediately appeal the court ruling to publicly release an internal study that blames specific managers at the plant for the explosion at the Texas City, Texas, refinery in March 2005, which killed 15 workers.
When everything else fails .... try financial engineering
[Click here for full story at: BLOOMBERG.COM]
2. BP will immediately appeal the court ruling to publicly release an internal study that blames specific managers at the plant for the explosion at the Texas City, Texas, refinery in March 2005, which killed 15 workers.
When everything else fails .... try financial engineering
[Click here for full story at: BLOOMBERG.COM]
Monday, April 23, 2007
REVENUE STRATEGY - ASTRAZENECA
To ensure a gathering flood of revenue in the future a business needs a developmental pipeline clogged with great new well-differentiated products in well spaced out stages of development. AstraZeneca Plc was struggling to develop new medicines and reported the failure of its fourth experimental drug in the last year.
So what did it do?
1) It agreed to buy U.S. biotechnology company MedImmune Inc. for $15.2 billion in cash to gain flu vaccines and an antiviral treatment for babies at $58 a share, about 11 times sales or 21 percent more than MedImmune's April 20 closing price of $48.01 (considered by some to be a huge premium under the circumstances). It will be helped by MedImmune's FluMist for influenza and Synagis for infant lung infections and 45 products in development. MedImmune also gets royalties from cervical cancer vaccines sold by Merck & Co. and GlaxoSmithKline Plc.
2) AstraZeneca will merge MedImmune with Cambridge Antibody Technology Group Plc, a biotech company it bought in May.
3) The company is taking on debt for the first time.
4) The company has spent $1.4 billion on in-licensing and other deals to bulk up its offering of early-stage drugs to 120 from 106 a year ago.
5) MedImmune employees will get a one-time retention grant to retain as many people in the organization as it can.
6) It will buy closely held Arrow Therapeutics Ltd. for $150 million in cash to boost research into compounds that fight bacteria and viruses.
Drugmakers in recent months have been purchasing companies to add medicines as patents expire and the number of products in development shrinks.
What is the secret of a pipeline full of great new products - a focus on the bottom line or a focus on the fulfilling of hunman needs?
[Click here for full story at: BLOOMBERG.COM]
So what did it do?
1) It agreed to buy U.S. biotechnology company MedImmune Inc. for $15.2 billion in cash to gain flu vaccines and an antiviral treatment for babies at $58 a share, about 11 times sales or 21 percent more than MedImmune's April 20 closing price of $48.01 (considered by some to be a huge premium under the circumstances). It will be helped by MedImmune's FluMist for influenza and Synagis for infant lung infections and 45 products in development. MedImmune also gets royalties from cervical cancer vaccines sold by Merck & Co. and GlaxoSmithKline Plc.
2) AstraZeneca will merge MedImmune with Cambridge Antibody Technology Group Plc, a biotech company it bought in May.
3) The company is taking on debt for the first time.
4) The company has spent $1.4 billion on in-licensing and other deals to bulk up its offering of early-stage drugs to 120 from 106 a year ago.
5) MedImmune employees will get a one-time retention grant to retain as many people in the organization as it can.
6) It will buy closely held Arrow Therapeutics Ltd. for $150 million in cash to boost research into compounds that fight bacteria and viruses.
Drugmakers in recent months have been purchasing companies to add medicines as patents expire and the number of products in development shrinks.
What is the secret of a pipeline full of great new products - a focus on the bottom line or a focus on the fulfilling of hunman needs?
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - ASTRAZENECA
1) AstraZeneca plans to eliminate 3,000 jobs to reduce expenses to counter competition from copycat versions of Toprol XL.
2) About 4 cents a share was charged to cost of sales from the company's supply chain improvement program.
3) It forecast $500 million in synergies from the acquisition of MedImmune in the next five years.
Isn't there a way to prevent employees from being the first and largest shock casualties in business rationalization programs? Say a proactive, realistic, and continuously readjusting staffing policy with its ear to the ground?
[Click here for full story at: BLOOMBERG.COM]
2) About 4 cents a share was charged to cost of sales from the company's supply chain improvement program.
3) It forecast $500 million in synergies from the acquisition of MedImmune in the next five years.
Isn't there a way to prevent employees from being the first and largest shock casualties in business rationalization programs? Say a proactive, realistic, and continuously readjusting staffing policy with its ear to the ground?
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - WAL-MART
1) Wal-Mart Stores decided to slash the price of one of the hottest electronics items for the holidays—the 42-inch flat-panel TV—to $988 as part of its quest to remain U.S. retailing's "low-price leader."
2) What caught competitors off guard was that Wal-Mart also cut the price of a top brand name—the 42-inch Panasonic high-definition TV—by $500, to $1,294.
The "Wal-Mart effect" caused a freefall in prices of flat-panel televisions at hundreds of retailers—to the glee of many people who were then able to afford their first big-screen plasma or liquid-crystal-display model. The fallout is evident
1) Circuit City Stores on Mar. 28 laid off 3,400 employees and put its 800 Canadian stores on the block.
2) Tweeter Home Entertainment Group, the high-end home entertainment store, is shuttering 49 of its 153 stores and dismissed 650 workers.
3) Dallas-based CompUSA is closing 126 of its 229 stores
4) Rex Stores is boarding up dozens of outlets, as well as selling 94 of its 211 stores.
5) Panasonic executives are still smarting from Wal-Mart's decision to drop the price on its 42-inch model.
Oh how do you solve a solution like ..... Wal-Mart?
[Click here for full story at: BUSINESSWEEK.COM]
2) What caught competitors off guard was that Wal-Mart also cut the price of a top brand name—the 42-inch Panasonic high-definition TV—by $500, to $1,294.
The "Wal-Mart effect" caused a freefall in prices of flat-panel televisions at hundreds of retailers—to the glee of many people who were then able to afford their first big-screen plasma or liquid-crystal-display model. The fallout is evident
1) Circuit City Stores on Mar. 28 laid off 3,400 employees and put its 800 Canadian stores on the block.
2) Tweeter Home Entertainment Group, the high-end home entertainment store, is shuttering 49 of its 153 stores and dismissed 650 workers.
3) Dallas-based CompUSA is closing 126 of its 229 stores
4) Rex Stores is boarding up dozens of outlets, as well as selling 94 of its 211 stores.
5) Panasonic executives are still smarting from Wal-Mart's decision to drop the price on its 42-inch model.
Oh how do you solve a solution like ..... Wal-Mart?
[Click here for full story at: BUSINESSWEEK.COM]
EXPENDITURE STRATEGY - ABN AMRO
1) ABN Amro entered takeover negotiations after the 2006 purchase of Italy's Banca Antonveneta SpA increased costs and bad loans rose in the U.S., Latin America and Taiwan.
2) First-quarter profit this year increased 31 percent, helped by a gain from the sale of its U.S. mortgage business.
3) It agreed to sell Chicago-based LaSalle Bank for $21 billion to Bank of America Corp, which was looking for a more significant presence in retail banking in Chicago.
4) Barclays Plc, Britain's third- largest bank, agreed to buy ABN Amro Holding NV for 67 billion euros ($91 billion) at 36.25 euros a share in the world's biggest-ever financial- services takeover. The offer amounts to 33 percent more than ABN Amro's closing price on March 16. Barclays plans to slash about 12,800 jobs of the combined workforce, to help reduce costs by 2.8 billion euros. The bank would move an additional 10,800 positions to “low-cost locations”.
5) ABN Amro may still receive a rival offer from Royal Bank of Scotland Group Plc, Santander Central Hispano SA and Fortis. This group may be able to pay 40 euros a share or more for ABN by eliminating more jobs and overlap than Barclays. They are considering a breakup of ABN Amro. Royal Bank is most interested in its LaSalle unit, its Asian division, and its investment bank. (ABN Amro's decision to sell LaSalle to Bank of America may thwart Royal Bank's plans). Santander would get the Latin American business and Italian holdings. Fortis may keep the Dutch operations as well as the private equity and private banking arms.
Faux pas in 2006, course correction in 2007. This appears to be reasonably prompt action that many businesses would sweep under the carpet of 'creative financial statements' for a while to cover up their miss-steps while the wounds fester into cancers.
[Click here for full story at: BLOOMBERG.COM]
2) First-quarter profit this year increased 31 percent, helped by a gain from the sale of its U.S. mortgage business.
3) It agreed to sell Chicago-based LaSalle Bank for $21 billion to Bank of America Corp, which was looking for a more significant presence in retail banking in Chicago.
4) Barclays Plc, Britain's third- largest bank, agreed to buy ABN Amro Holding NV for 67 billion euros ($91 billion) at 36.25 euros a share in the world's biggest-ever financial- services takeover. The offer amounts to 33 percent more than ABN Amro's closing price on March 16. Barclays plans to slash about 12,800 jobs of the combined workforce, to help reduce costs by 2.8 billion euros. The bank would move an additional 10,800 positions to “low-cost locations”.
5) ABN Amro may still receive a rival offer from Royal Bank of Scotland Group Plc, Santander Central Hispano SA and Fortis. This group may be able to pay 40 euros a share or more for ABN by eliminating more jobs and overlap than Barclays. They are considering a breakup of ABN Amro. Royal Bank is most interested in its LaSalle unit, its Asian division, and its investment bank. (ABN Amro's decision to sell LaSalle to Bank of America may thwart Royal Bank's plans). Santander would get the Latin American business and Italian holdings. Fortis may keep the Dutch operations as well as the private equity and private banking arms.
Faux pas in 2006, course correction in 2007. This appears to be reasonably prompt action that many businesses would sweep under the carpet of 'creative financial statements' for a while to cover up their miss-steps while the wounds fester into cancers.
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - MARUTI UDYOG
1) Maruti Udyog Ltd., India's biggest carmaker, has offered cash rebates to attract buyers who may defer purchases as interest rates increase.
2) Maruti will introduce the SX4 sedan by May 15 to compete with Honda Motor Co. and General Motors Corp. in Asia's fourth- biggest automotive market. The SX4 will be followed by an upgraded version of the sport-utility vehicle, Grand Vitara.
Great product + great price = great revenue.
Perhaps everyone knows this well. Which explains why it is that some people will buy nothing but Maruti cars and some anything but Maruti cars?
[Click here for full story at: BLOOMBERG.COM]
2) Maruti will introduce the SX4 sedan by May 15 to compete with Honda Motor Co. and General Motors Corp. in Asia's fourth- biggest automotive market. The SX4 will be followed by an upgraded version of the sport-utility vehicle, Grand Vitara.
Great product + great price = great revenue.
Perhaps everyone knows this well. Which explains why it is that some people will buy nothing but Maruti cars and some anything but Maruti cars?
[Click here for full story at: BLOOMBERG.COM]
Saturday, April 21, 2007
REVENUE STRATEGY - CHINA CITIC BANK
China Citic Bank Corp. sold $5.4 billion of stock ($1.7 billion in Shanghai $3.7 billion in Hong Kong) in the world's biggest offering this year, to step up lending and fuel the fastest economic growth in a decade.
Government efforts to cool the economy and avert asset-price bubbles have failed to stem speculation that caused stocks to triple in the past year.
Does anyone remember the Asian Tigers and their Frankenstein of over-investment?
[Click here for full story at: BLOOMBERG.COM]
Government efforts to cool the economy and avert asset-price bubbles have failed to stem speculation that caused stocks to triple in the past year.
Does anyone remember the Asian Tigers and their Frankenstein of over-investment?
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - WAL-MART
Old Ways:
1. Founded in 1962, Wal-Mart built a cutting-edge distribution system capable of moving goods from factory loading dock to store cash register faster and cheaper by far than any competitor.
2. It added to its cost advantage by refusing to acquiesce to routine increases in wholesale prices, continually pressing suppliers to charge less.
3. It also pinched pennies in every other facet of business, from wages and perks (there were none) to fixtures and furnishings.
New Ways:
1. By tightening controls over the stores, it has halved the growth rate of inventories to 5.6% from 11.5% two years ago.
2. Wal-Mart also has squeezed more productivity out of its 1.3 million store employees for eight consecutive quarters by capping wages for most hourly positions, converting full-time jobs to part-time ones, and installing a sophisticated scheduling system to adjust staffing levels to fluctuations in customer traffic.
3. Wal-Mart is cutting out middlemen to do more contract manufacturing overseas.
4. It withdrew its application for a Utah bank charter just before a congressional committee was set to convene hearings. The retreat marks an apparent end to its decade-long campaign to diversify into consumer banking.
5. It is considering spinning off Sam's Club, the warehouse club division that is a perennial also-ran to Costco.
6. In 2006 it took a $863 million loss in exiting Germany.
Old habits die hard - sometimes for the benefit of many, if not all.
[Click here for full story at: BUSINESSWEEK.COM]
1. Founded in 1962, Wal-Mart built a cutting-edge distribution system capable of moving goods from factory loading dock to store cash register faster and cheaper by far than any competitor.
2. It added to its cost advantage by refusing to acquiesce to routine increases in wholesale prices, continually pressing suppliers to charge less.
3. It also pinched pennies in every other facet of business, from wages and perks (there were none) to fixtures and furnishings.
New Ways:
1. By tightening controls over the stores, it has halved the growth rate of inventories to 5.6% from 11.5% two years ago.
2. Wal-Mart also has squeezed more productivity out of its 1.3 million store employees for eight consecutive quarters by capping wages for most hourly positions, converting full-time jobs to part-time ones, and installing a sophisticated scheduling system to adjust staffing levels to fluctuations in customer traffic.
3. Wal-Mart is cutting out middlemen to do more contract manufacturing overseas.
4. It withdrew its application for a Utah bank charter just before a congressional committee was set to convene hearings. The retreat marks an apparent end to its decade-long campaign to diversify into consumer banking.
5. It is considering spinning off Sam's Club, the warehouse club division that is a perennial also-ran to Costco.
6. In 2006 it took a $863 million loss in exiting Germany.
Old habits die hard - sometimes for the benefit of many, if not all.
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - WAL-MART
What did the giant do when it’s U.S. division eked out only a 1.9% gain in same-store sales—its worst performance ever?
1. Wal-Mart was able to boost total U.S. revenues by 7.2% last year by opening new stores at the rate of nearly one a day. It will trim its customary 8% annual addition to U.S. square footage to 7% in 2007. The company plans to sustain this pace for at least the next five years even though the new Supercenters are just not pulling in enough sales to offset fully the sharply escalating costs of building them. The retailer's pretax return on fixed assets has plunged 40% since 2000.
2. Last year it implemented a whole new supervisory structure that required many of its 27 regional administrators to move out of Bentonville and live in the districts they manage.
3. It launched the overdue store-remodeling program last year
What did the giant do when it felt its focus on volume-over-margin discounts and austerity was weighing down on its margins?
1. Wal-Mart went outside to fill every key slot in building a 40-person marketing group from scratch.
2. It has newly appointed John E. Fleming as its chief merchandising officer.
3. It moved into higher-priced, more fashionable apparel and home furnishings with the splashiest marketing the retailer had ever done, buying ad spreads in Vogue and sponsoring an open-air fashion show in Times Square. The company is sticking with its underlying strategy of moving beyond a monolithic focus on price to try to boost sales by targeting particular customers in new ways.
4. It has also inflated its cost base in expanding far beyond its original rural Southern stronghold. (It is far more expensive to buy land and to build, staff, and operate stores in the large cities that are the final frontier of Wal-Mart's expansion than in the farm towns where it began).
What did the giant do to cope with mounting sociopolitical backlash that was sure to hurt revenue via reputation – lawsuits for allegedly overworking and underpaying employees and sex discrimination class actions; its antiunion stance; and aggressive business practices?
1. It has built a large public and government relations apparatus headed by Leslie A. Dach, a veteran Washington political operative of pronounced liberal bent. The imperatives of reputational damage control have prompted Bentonville to add hundreds of staff jobs in public relations, corporate affairs, and other areas that the company happily ignored when it was shielded by the force field of Walton's folksy charisma.
2. It has struck up effective working relationships with many of the very environmental groups it once disdained.
3. It has added three women (one is Hispanic) and two African American directors to its board and also tied all executive bonuses to diversity goals.
4. Its CEO has embraced environmental sustainability and advocated a hike in the federal minimum wage.
Like anyone else, when a giant begins to see through its mind’s eye, by trial and error, by haste and restraint, it can overcome all its self-doubts
[Click here for full story at: BUSINESSWEEK.COM]
1. Wal-Mart was able to boost total U.S. revenues by 7.2% last year by opening new stores at the rate of nearly one a day. It will trim its customary 8% annual addition to U.S. square footage to 7% in 2007. The company plans to sustain this pace for at least the next five years even though the new Supercenters are just not pulling in enough sales to offset fully the sharply escalating costs of building them. The retailer's pretax return on fixed assets has plunged 40% since 2000.
2. Last year it implemented a whole new supervisory structure that required many of its 27 regional administrators to move out of Bentonville and live in the districts they manage.
3. It launched the overdue store-remodeling program last year
What did the giant do when it felt its focus on volume-over-margin discounts and austerity was weighing down on its margins?
1. Wal-Mart went outside to fill every key slot in building a 40-person marketing group from scratch.
2. It has newly appointed John E. Fleming as its chief merchandising officer.
3. It moved into higher-priced, more fashionable apparel and home furnishings with the splashiest marketing the retailer had ever done, buying ad spreads in Vogue and sponsoring an open-air fashion show in Times Square. The company is sticking with its underlying strategy of moving beyond a monolithic focus on price to try to boost sales by targeting particular customers in new ways.
4. It has also inflated its cost base in expanding far beyond its original rural Southern stronghold. (It is far more expensive to buy land and to build, staff, and operate stores in the large cities that are the final frontier of Wal-Mart's expansion than in the farm towns where it began).
What did the giant do to cope with mounting sociopolitical backlash that was sure to hurt revenue via reputation – lawsuits for allegedly overworking and underpaying employees and sex discrimination class actions; its antiunion stance; and aggressive business practices?
1. It has built a large public and government relations apparatus headed by Leslie A. Dach, a veteran Washington political operative of pronounced liberal bent. The imperatives of reputational damage control have prompted Bentonville to add hundreds of staff jobs in public relations, corporate affairs, and other areas that the company happily ignored when it was shielded by the force field of Walton's folksy charisma.
2. It has struck up effective working relationships with many of the very environmental groups it once disdained.
3. It has added three women (one is Hispanic) and two African American directors to its board and also tied all executive bonuses to diversity goals.
4. Its CEO has embraced environmental sustainability and advocated a hike in the federal minimum wage.
Like anyone else, when a giant begins to see through its mind’s eye, by trial and error, by haste and restraint, it can overcome all its self-doubts
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - WIPRO
Wipro Ltd., India's third-largest computer-services provider, raised fees to offset higher wages paid to programmers and the rupee's appreciation against the dollar. Its billing rates for new contracts increased between 3 percent and 5 percent.
Still they are winning share from larger rivals, including IBM, by employing Indian workers, who are paid about 12 percent of U.S. salaries.
Wipro added 44 clients in the quarter and will add more clients and employees.
Wipro had an additional forward cover of $195 million at 44 to 45.7 rupees to the dollar.
OK, is that cool enough?
(My skepticism is only so that these successes do not sozzle India's businessmen unto over-confident complacency like flash initial successes on home ground sozzle India’s cricketers, their fans, the media and sponsors.)
[Click here for full story at: BLOOMBERG.COM]
Still they are winning share from larger rivals, including IBM, by employing Indian workers, who are paid about 12 percent of U.S. salaries.
Wipro added 44 clients in the quarter and will add more clients and employees.
Wipro had an additional forward cover of $195 million at 44 to 45.7 rupees to the dollar.
OK, is that cool enough?
(My skepticism is only so that these successes do not sozzle India's businessmen unto over-confident complacency like flash initial successes on home ground sozzle India’s cricketers, their fans, the media and sponsors.)
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - HYUNDAI MOTOR INDIA
1. Hyundai Motor India's factory in the South Indian state Tamil Nadu has invested $500m (£250m) in a second, pretty much identical, manufacturing plant that will start production later this year, so by the end of 2008 churning out 600,000 cars per year.
2. Through essential mass production techniques every second - 24 hours a day, seven days a week - a car rolls off the Hyundai assembly line.
3. Each and every car is tested on the 1.6km on-site test track,
4. To secure supplies 80% of the parts used come from vendors based within a 50km radius of its factory.
Indian rival Maruti Udyog operates a similar scheme, which is built on mutual trust and support. It has never changed a vendor. Such stable business conditions have helped some vendors to broaden their markets and sell parts to the automotive industry at large, both in India and abroad. In fact, parts exports are set to make up two thirds of India's automotive exports by 2016, according to official predictions.
If the customer is king, then manufacturing must be queen of revenue.
[Click here for full story at: BBCNEWS.COM]
2. Through essential mass production techniques every second - 24 hours a day, seven days a week - a car rolls off the Hyundai assembly line.
3. Each and every car is tested on the 1.6km on-site test track,
4. To secure supplies 80% of the parts used come from vendors based within a 50km radius of its factory.
Indian rival Maruti Udyog operates a similar scheme, which is built on mutual trust and support. It has never changed a vendor. Such stable business conditions have helped some vendors to broaden their markets and sell parts to the automotive industry at large, both in India and abroad. In fact, parts exports are set to make up two thirds of India's automotive exports by 2016, according to official predictions.
If the customer is king, then manufacturing must be queen of revenue.
[Click here for full story at: BBCNEWS.COM]
REVENUE STRATEGY - I.D.B.I.
1. Industrial Development Bank of India Ltd., the nation's seventh biggest by assets, plans to increase its overseas bond sales by 50 percent to $1.5 billion over the coming year to meet credit demand and fund expansion.It plans its first bond sale under a medium-term note program in the next few months
2. It hired HSBC Holdings Plc and Barclays Plc to sell the bonds, which may mature in either five, seven or 10 years.
3. The bank will use part of the proceeds to pay for new offices in Singapore and Bahrain.
4. Industrial Development Bank will list the bonds in Singapore.
The rationale:
1. India's banks are expanding overseas to meet demand for financial services from domestic companies that are setting up or acquiring international businesses, and from Indians working abroad.
2. The banks are increasingly borrowing outside India to benefit from lower interest rates and the better availability of money in international markets. (India's central bank has been increasing interest rates since October 2004 to curb inflation stoked by economic growth. The bank on March 30 raised its overnight lending rate to a 4 1/2-year high of 7.75 percent.)
3. Rising rupee rates make it more attractive for Indian companies to borrow funds abroad.
The upside of globalization is that Central bank restrictions can be bypassed.
The downside of globalization is that the Central bank loses control.
[Click here for full story at: BLOOMBERG.COM]
2. It hired HSBC Holdings Plc and Barclays Plc to sell the bonds, which may mature in either five, seven or 10 years.
3. The bank will use part of the proceeds to pay for new offices in Singapore and Bahrain.
4. Industrial Development Bank will list the bonds in Singapore.
The rationale:
1. India's banks are expanding overseas to meet demand for financial services from domestic companies that are setting up or acquiring international businesses, and from Indians working abroad.
2. The banks are increasingly borrowing outside India to benefit from lower interest rates and the better availability of money in international markets. (India's central bank has been increasing interest rates since October 2004 to curb inflation stoked by economic growth. The bank on March 30 raised its overnight lending rate to a 4 1/2-year high of 7.75 percent.)
3. Rising rupee rates make it more attractive for Indian companies to borrow funds abroad.
The upside of globalization is that Central bank restrictions can be bypassed.
The downside of globalization is that the Central bank loses control.
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - GOOGLE
Google keeps pushing into new areas beyond search. Spending on such initiatives—from Gmail to the purchase last fall of video-sharing site YouTube to the release of Google Apps online office applications—the company keeps doubling its hiring every year (to more than 12,000 at last count) to pump out the new services and it's not always obvious what their goal is:
1. getting more traffic or page views on which to sell ads,
2. gathering user data that will help target ads better, or
3. charging fees to create an entirely new revenue stream.
Business must be like rowing upstream. If you stop…..
[Click here for full story at: BUSINESSWEEK.COM]
1. getting more traffic or page views on which to sell ads,
2. gathering user data that will help target ads better, or
3. charging fees to create an entirely new revenue stream.
Business must be like rowing upstream. If you stop…..
[Click here for full story at: BUSINESSWEEK.COM]
Thursday, April 19, 2007
REVENUE STRATEGY - CONOCOPHILLIPS
1. ConocoPhillips pledged $22 million to help Iowa State University develop fuels out of corn and switchgrass.
2. The company unveiled a joint venture with Tyson Foods to produce diesel fuel out of animal fat. The venture will operate on a break-even basis and only then as a result of a $1-a-gallon federal subsidy. The project will be a learning experience leading to other alternative fuel initiatives down the road
This is ConocoPhillips' moral and financial contribution to reduce the environmental damage we perpetrate on ourselves. It will burnish the company's image and simultaneously create avenues for future alternative profit. When will everyone of us be thus involved, even if only for profit?
[Click here for full story at: BUSINESSWEEK.COM]
2. The company unveiled a joint venture with Tyson Foods to produce diesel fuel out of animal fat. The venture will operate on a break-even basis and only then as a result of a $1-a-gallon federal subsidy. The project will be a learning experience leading to other alternative fuel initiatives down the road
This is ConocoPhillips' moral and financial contribution to reduce the environmental damage we perpetrate on ourselves. It will burnish the company's image and simultaneously create avenues for future alternative profit. When will everyone of us be thus involved, even if only for profit?
[Click here for full story at: BUSINESSWEEK.COM]
EXPENDITURE STRATEGY - MOTOROLA
1. Motorola vows to cut additional costs and return to profitability for the full year.
2. Motorola will pick markets more carefully and thus may forfeit gains in some emerging, fast-growth markets.
Motorola has chosen to overcome its losses first when it is faced with a two-headed monster at the end of its first quarter - it is losing money ($181 million first-quarter loss) and market share (2.5% down in the first quarter).
What will become of its market share?
What will become of its market focus?
1. Motorola had cut prices.
2. It had introduced 18 new products in the first quarter, up from six in the same period of 2006.
3. It had revamped its executive team
[Click here for full story at: BUSINESSWEEK.COM]
2. Motorola will pick markets more carefully and thus may forfeit gains in some emerging, fast-growth markets.
Motorola has chosen to overcome its losses first when it is faced with a two-headed monster at the end of its first quarter - it is losing money ($181 million first-quarter loss) and market share (2.5% down in the first quarter).
What will become of its market share?
What will become of its market focus?
1. Motorola had cut prices.
2. It had introduced 18 new products in the first quarter, up from six in the same period of 2006.
3. It had revamped its executive team
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - SACYR VALLEHERMOSO
Sacyr Vallehermoso SA, Spain's second-biggest builder by market value, offered 6.5 billion euros ($8.8 billion) in stock for the two-thirds of Paris-based rival Eiffage SA it doesn't already own to gain access to French construction and toll-road markets. (The bid comes a day after Eiffage blocked Sacyr from naming directors to the board of France's third-biggest construction company.)
Seems to be a matter just of pride, honour and market share,
not synergy, organic growth and mutual upliftment.
Seems to be a matter just of pride, honour and market share,
not synergy, organic growth and mutual upliftment.
REVENUE STRATEGY - EMC
EMC, a storage company, is getting the benefit of “organic” growth from recent acquisitions. Sales rose 17%, to $2.98 billion. One big acquisition, VMware, saw its sales jump 95% year-on-year. VMware specializes in virtualization software that lets companies run multiple computing software systems—Windows, Linux, or other systems—on a single computer system. These "virtual" systems are expected to boost efficiency of data centers in the coming years.
It is the consequent organic growth that sets real acquisitions apart.
[Click here for full story at: BUSINESSWEEK.COM]
It is the consequent organic growth that sets real acquisitions apart.
[Click here for full story at: BUSINESSWEEK.COM]
Wednesday, April 18, 2007
REVENUE STRATEGY - INTEL
Intel expects higher research and development spending, which at $5.6 billion for the year will be higher, by $200 million, than previously expected. The company is using that budget to develop chips it hopes will put it far ahead of rivals. Intel has gained some of the market share previously lost to AMD mainly on the strength of its dual-core chips.
Unrelenting role-reversals in the ascendancy crusade can be tiring for onlookers.
But it contains life-lessons:
Man's quest for glory can be unending
If you row hard enough you can come up from behind and even get ahead
If you get tired of keeping ahead or even stop just to enjoy the feeling .....
[Click here for full story at: BUSINESSWEEK.COM]
Unrelenting role-reversals in the ascendancy crusade can be tiring for onlookers.
But it contains life-lessons:
Man's quest for glory can be unending
If you row hard enough you can come up from behind and even get ahead
If you get tired of keeping ahead or even stop just to enjoy the feeling .....
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - TECH BELLWETHERS
Hard-drive maker Seagate engaged in a price war for its disc drives. Another tech titan beset by price pressure is chipmaker Intel, which has been locked in a market share tug-of-war with AMD.
Seagate, Intel and AMD (like countless other businesses) are cutting prices to gain market share.
But there comes a tipping point beyond which the economies of scale, experience and learning curve advantages, and the bargaining power of market share cannot sustain the price cuts.
[Click here for full story at: BUSINESSWEEK.COM]
Seagate, Intel and AMD (like countless other businesses) are cutting prices to gain market share.
But there comes a tipping point beyond which the economies of scale, experience and learning curve advantages, and the bargaining power of market share cannot sustain the price cuts.
[Click here for full story at: BUSINESSWEEK.COM]
EXPENDITURE STRATEGY - SONY COMPUTER ENTERTAINMENT
Sony Computer Entertainment, creator of PlayStation, may cut 8% (about 160) of its workforce in Europe. This was a response to changing market conditions, and not the performance of the PS3, belatedly launched in Europe last month. It was also looking at ways of saving money at its businesses in Japan and the US.
Psst! Outsourcing processes to India and China anyone?!
Psst! Outsourcing processes to India and China anyone?!
REVENUE STRATEGY - YAHOO!
1. Yahoo has been striking partnerships to deliver search ads on other properties outside of Yahoo sites and encourage more marketers to work with Yahoo.
2. The expansion of its newspaper consortium enables Yahoo to provide search and serve ads on online newspaper sites.
3. Yahoo will expand a key partnership with online auction service eBay to include PayPal, eBay's online payment processor, and Yahoo's revamped search-ad ranking system.
4. This gives PayPal's millions of business customers incentives to use the newly revamped Yahoo marketing tool Panama, which places ads alongside search results.
5. It also encourages Yahoo's small-business customers to use PayPal to process payments. Incentives include waivers of payment processing fees and Web hosting fees.
6. Yahoo will give prominence to eBay services within certain ads.
7. Yahoo will place a shopping cart icon within paid search ads placed on behalf of PayPal clients making it easier for Yahoo searchers to buy from PayPal businesses.
8. The companies also bolster their united front against Google, which is trying to create a PayPal rival in Google Checkout
9. Partnering with PayPal gives Yahoo greater access to PayPal's millions of business customers and more pages on which to serve ads.
10. Under the eBay agreement, Yahoo is the exclusive provider of brand advertising on eBay's sites and it will serve search-related text ads on eBay to complement products that users are shopping for.
11. The development of Panama was another key to narrowing the search advertising gap with Google. The new tool has increased the number of people who click on ads.
The World War III for advertising revenues rages on so strong!
Will it end? Will it leave winners? Or a wounded sub-divided throng?
[Click here for full story at: BUSINESSWEEK.COM]
2. The expansion of its newspaper consortium enables Yahoo to provide search and serve ads on online newspaper sites.
3. Yahoo will expand a key partnership with online auction service eBay to include PayPal, eBay's online payment processor, and Yahoo's revamped search-ad ranking system.
4. This gives PayPal's millions of business customers incentives to use the newly revamped Yahoo marketing tool Panama, which places ads alongside search results.
5. It also encourages Yahoo's small-business customers to use PayPal to process payments. Incentives include waivers of payment processing fees and Web hosting fees.
6. Yahoo will give prominence to eBay services within certain ads.
7. Yahoo will place a shopping cart icon within paid search ads placed on behalf of PayPal clients making it easier for Yahoo searchers to buy from PayPal businesses.
8. The companies also bolster their united front against Google, which is trying to create a PayPal rival in Google Checkout
9. Partnering with PayPal gives Yahoo greater access to PayPal's millions of business customers and more pages on which to serve ads.
10. Under the eBay agreement, Yahoo is the exclusive provider of brand advertising on eBay's sites and it will serve search-related text ads on eBay to complement products that users are shopping for.
11. The development of Panama was another key to narrowing the search advertising gap with Google. The new tool has increased the number of people who click on ads.
The World War III for advertising revenues rages on so strong!
Will it end? Will it leave winners? Or a wounded sub-divided throng?
[Click here for full story at: BUSINESSWEEK.COM]
Tuesday, April 17, 2007
REVENUE STRATEGY - GOOGLE
1) Google announced three major deals, promising to extend its reach in advertising for radio, television, and the Web:
a) A deal with Clear Channel (CCU) to serve 30-second audio ads across the company's 675 AM/FM radio stations.
b) A $3.1 billion agreement to acquire DoubleClick, a leader in online ad placement and tracking.
c) A contract to deliver TV ads to EchoStar Communications' Dish Network.
2) DoubleClick, serving and tracking ads from big-name advertisers on large Web properties, gives Google an opportunity to get into this premium market. Google could leverage its technology to sell display ads on sites with which DoubleClick has a relationship.
3) A Google-owned DoubleClick could give too much control to a powerful search engine. Google could use what it knows about what publishers are charging for their ads—based on its ad tracking—to undercut prices.
4) Google could use DoubleClick's connections to further its lead in search. Google could offer to waive all the fees for DoubleClick customers, providing they either allow Google to deliver search ads on their properties or, if the client is an advertiser, buy search ads from Google.
5) If Google gets the ailing radio advertising industry better prices, it will get more space to sell. The same goes for television advertising, print, and all the other places where Google could leverage its large auction network to sell ads.
Now who will clear the FOG (Fear of Google)?
[Click here for full story at: BUSINESSWEEK.COM]
a) A deal with Clear Channel (CCU) to serve 30-second audio ads across the company's 675 AM/FM radio stations.
b) A $3.1 billion agreement to acquire DoubleClick, a leader in online ad placement and tracking.
c) A contract to deliver TV ads to EchoStar Communications' Dish Network.
2) DoubleClick, serving and tracking ads from big-name advertisers on large Web properties, gives Google an opportunity to get into this premium market. Google could leverage its technology to sell display ads on sites with which DoubleClick has a relationship.
3) A Google-owned DoubleClick could give too much control to a powerful search engine. Google could use what it knows about what publishers are charging for their ads—based on its ad tracking—to undercut prices.
4) Google could use DoubleClick's connections to further its lead in search. Google could offer to waive all the fees for DoubleClick customers, providing they either allow Google to deliver search ads on their properties or, if the client is an advertiser, buy search ads from Google.
5) If Google gets the ailing radio advertising industry better prices, it will get more space to sell. The same goes for television advertising, print, and all the other places where Google could leverage its large auction network to sell ads.
Now who will clear the FOG (Fear of Google)?
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - MICROSOFT
1) Microsoft will launch Silverlight, its new video-player software, to capitalize on the burgeoning online video market. Internet video ads are expected to grow from $1.5 billion market in 2007 to $4.2 billion in 2011.
2) Silverlight can be used in Microsoft's Internet Explorer Web browser as well as Apple's Safari browser and Mozilla Foundation's Firefox. In addition to working with a variety of browsers, it also supports both next-generation DVD formats, HD DVD and Blu-ray.
3) Silverlight will let users trigger videos by clicking in a browser window, an easier method than the one now required by Windows Media Player.
4) Silverlight also includes copy-protection technology called PlayReady.
5) Microsoft has signed up Major League Baseball, Netflix and others to test the software.
6) Down the road, videos created to play with Silverlight could also run on Microsoft's Zune digital music player and Windows-powered cell phones.
7) Microsoft will soon release a line of Web design software that, when combined with Silverlight, will help developers create all manner of sophisticated online graphics. That software will work in conjunction with Windows Vista, tethering developers and their products all the more closely to Microsoft.
Is this enough to dislodge the predominant Adobe Flash Player installed on more than 700 million PCs from being the de facto standard for multimedia that runs in a browser and developers' target of choice?
If Adobe is hoping to extend its lead with the launch of its own ‘next level’ video player, has Microsoft actually got its ‘product differentiation strategies’ and 'market focus strategies’ right enough?
[Click here for full story at: BUSINESSWEEK.COM]
2) Silverlight can be used in Microsoft's Internet Explorer Web browser as well as Apple's Safari browser and Mozilla Foundation's Firefox. In addition to working with a variety of browsers, it also supports both next-generation DVD formats, HD DVD and Blu-ray.
3) Silverlight will let users trigger videos by clicking in a browser window, an easier method than the one now required by Windows Media Player.
4) Silverlight also includes copy-protection technology called PlayReady.
5) Microsoft has signed up Major League Baseball, Netflix and others to test the software.
6) Down the road, videos created to play with Silverlight could also run on Microsoft's Zune digital music player and Windows-powered cell phones.
7) Microsoft will soon release a line of Web design software that, when combined with Silverlight, will help developers create all manner of sophisticated online graphics. That software will work in conjunction with Windows Vista, tethering developers and their products all the more closely to Microsoft.
Is this enough to dislodge the predominant Adobe Flash Player installed on more than 700 million PCs from being the de facto standard for multimedia that runs in a browser and developers' target of choice?
If Adobe is hoping to extend its lead with the launch of its own ‘next level’ video player, has Microsoft actually got its ‘product differentiation strategies’ and 'market focus strategies’ right enough?
[Click here for full story at: BUSINESSWEEK.COM]
EXPENDITURE STRATEGY - J P MORGAN
J P Morgan slashed almost $3 billion of annual costs through its purchase of Bank One Corp. in 2004.
A good measure of a merger is the extent of success of the cost-cutter.
[Click here for full story at: BLOOMBERG.COM]
A good measure of a merger is the extent of success of the cost-cutter.
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - SALLIE MAE
1) SLM Corp., the U.S. student-loan provider known as Sallie Mae, accepted a $25 billion takeover bid from JPMorgan Chase & Co., Bank of America Corp. and two private-equity funds JC Flowers & Co., Friedman Fleischer & Lowe LLC.
2) They were offered $60 a share, 47 percent more than the closing price on April 12.
3) Sallie Mae serves a market where demand has surged an average 27 percent each of the last six years as more students borrow to attend top universities including Harvard, Princeton and Yale. And the loans are considered safe because of government guarantees. There's scope for consolidation. It should be a relatively good, moderate growth business.
4) Teaming up with the banks secures financing that will allow Sallie Mae to expand at a faster pace, and the company's strong cash flow will help the buyers pay down debt.
Besides inorganic growth and cost rationalizations, which are often enough to justify ego-soothing takeovers, this takeover promises scope for real organic growth for Sallie Mae.
[Click here for full story at: BLOOMBERG.COM]
2) They were offered $60 a share, 47 percent more than the closing price on April 12.
3) Sallie Mae serves a market where demand has surged an average 27 percent each of the last six years as more students borrow to attend top universities including Harvard, Princeton and Yale. And the loans are considered safe because of government guarantees. There's scope for consolidation. It should be a relatively good, moderate growth business.
4) Teaming up with the banks secures financing that will allow Sallie Mae to expand at a faster pace, and the company's strong cash flow will help the buyers pay down debt.
Besides inorganic growth and cost rationalizations, which are often enough to justify ego-soothing takeovers, this takeover promises scope for real organic growth for Sallie Mae.
[Click here for full story at: BLOOMBERG.COM]
Monday, April 16, 2007
EXPENDITURE STRATEGY - CITIBANK
Citigroup Inc. first-quarter earnings dropped 11 percent because of a charge to eliminate 5 percent of its workforce and bring costs in line with competitors. The plan to cut jobs and shift workers to lower-cost locations is part of a response to shareholders who said it spent too much building branches and making other investments. The bank opened 99 new branches in the quarter. Expenses for expansion pushed up costs at twice the rate of sales growth. Citibank’s plan to reduce expenses probably won't affect earnings this year because severance and other charges will balance the benefits. By the end of 2008, savings probably will boost earnings per share by 6 percent.
The point is why doesn’t staffing flab get noticed in the ordinary course of business on a regular, say quarterly, basis? Why does it have to be pointed out by say shareholders after it requires drastic action? Could not number crunchers point out clogging in the company’s arteries on a realtime basis and ring the bell to stop regular recruitments to reassign the newly superfluous staff appropriately?
[Click here for full story at: BLOOMBERG.COM]
The point is why doesn’t staffing flab get noticed in the ordinary course of business on a regular, say quarterly, basis? Why does it have to be pointed out by say shareholders after it requires drastic action? Could not number crunchers point out clogging in the company’s arteries on a realtime basis and ring the bell to stop regular recruitments to reassign the newly superfluous staff appropriately?
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - ESSAR GLOBAL
1) Essar Global agreed to buy Canada’s Algoma Steel Inc. for $1.63 billion to gain sheet mills that supply carmakers in North America including General Motors Corp. and Ford Motor Co.
2) The price is 48 percent more than the 20-day average ending Feb. 14 - seven times Algoma's earnings before interest, taxes, depreciation and amortization, or ebitda.
3) The rationale is to move closer to markets for higher-end products while continuing to tap cheaper raw materials such as iron ore in India.
4) The steel cycle is up so making acquisitions at this time becomes easier. Higher prices reduce the payback time for companies.
5) Essar hasn't said how it will finance the Algoma purchase. The Essar Group will get upto $5 billion from selling its stake in Vodafone Essar in the future but it is using it as a stepping stone to get loans to fund expansion of their other businesses
General Electric’s famous Profit Impact of Marketing Strategies suggested that a higher market share translated into higher rate of profit. But with a slowdown and cost cutting among US automakers will Essar’s increased market share increase its rate of profit?
[Click here for full story at: BLOOMBERG.COM]
2) The price is 48 percent more than the 20-day average ending Feb. 14 - seven times Algoma's earnings before interest, taxes, depreciation and amortization, or ebitda.
3) The rationale is to move closer to markets for higher-end products while continuing to tap cheaper raw materials such as iron ore in India.
4) The steel cycle is up so making acquisitions at this time becomes easier. Higher prices reduce the payback time for companies.
5) Essar hasn't said how it will finance the Algoma purchase. The Essar Group will get upto $5 billion from selling its stake in Vodafone Essar in the future but it is using it as a stepping stone to get loans to fund expansion of their other businesses
General Electric’s famous Profit Impact of Marketing Strategies suggested that a higher market share translated into higher rate of profit. But with a slowdown and cost cutting among US automakers will Essar’s increased market share increase its rate of profit?
[Click here for full story at: BLOOMBERG.COM]
REVENUE STRATEGY - GOOGLE
Google's new free directory assistance lets callers search for business listings from a land-line or mobile phone. Google will even connect the call and text the number to the user's cell phone—all for no charge. That's likely to be music to the ears of the millions who pay an average of $1.28 a pop for assistance over a regular phone and a whopping $1.57 for each such call via a cell phone. But it means trouble on the line for the big phone companies
The services are paid for by advertisers that insert a short marketing message at some stage of the call. The advertiser community has embraced this channel, because they reach consumers at the point of purchase.
So are you thinking ‘there is no such thing as a free lunch’?
Or are you thinking ‘so what if there is no such thing as a free lunch’?
Or are you thinking ‘which of my products could advertisers morph into a "free lunch" next’?
[Click here for full story at: BUSINESSWEEK.COM]
The services are paid for by advertisers that insert a short marketing message at some stage of the call. The advertiser community has embraced this channel, because they reach consumers at the point of purchase.
So are you thinking ‘there is no such thing as a free lunch’?
Or are you thinking ‘so what if there is no such thing as a free lunch’?
Or are you thinking ‘which of my products could advertisers morph into a "free lunch" next’?
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - YAHOO!
Yahoo! announced a multiyear deal with Viacom:
1) It gives Yahoo! the exclusive ability to serve search and content-related text ads on almost three dozen Viacom Web sites.
2) Viacom and Yahoo also have the option of expanding the agreement to include all Viacom's properties—an additional 140 sites. Comedy Central, MTV Networks, and other digital properties make Viacom a top destination on the Web with 90 million unique viewers in March.
3) Aside from the revenue, the deal is a significant public relations coup for Yahoo. Viacom's partnership sends a signal to other advertisers that Yahoo's Panama marketing system, fully launched this year, capably matches content and search queries with the ads most likely to resonate with consumers.
A GOOD product can speak for itself, launch a thousand revenue streams and attain near indispensability in the Value Chain!
[Click here for full story at: BUSINESSWEEK.COM]
1) It gives Yahoo! the exclusive ability to serve search and content-related text ads on almost three dozen Viacom Web sites.
2) Viacom and Yahoo also have the option of expanding the agreement to include all Viacom's properties—an additional 140 sites. Comedy Central, MTV Networks, and other digital properties make Viacom a top destination on the Web with 90 million unique viewers in March.
3) Aside from the revenue, the deal is a significant public relations coup for Yahoo. Viacom's partnership sends a signal to other advertisers that Yahoo's Panama marketing system, fully launched this year, capably matches content and search queries with the ads most likely to resonate with consumers.
A GOOD product can speak for itself, launch a thousand revenue streams and attain near indispensability in the Value Chain!
[Click here for full story at: BUSINESSWEEK.COM]
REVENUE STRATEGY - TAKEOVER BANKERS
Morgan Stanley, Citigroup Inc. and Goldman Sachs Group Inc. among six banks financing Macquarie Bank Ltd.'s A$11.1 billion ($9.2 billion) bid for Qantas Airways Ltd. eased conditions for funding the takeover. They agreed to arrange financing if investors holding at least 70 percent of the stock accept the offer. They earlier insisted on 90 percent support. (Macquarie and its allies, including U.S. buyout firm Texas Pacific Group, are prohibited from raising their offer price under Australian takeover law.)
You can (compromise and) win!
[Click here for full story at: BLOOMBERG.COM]
You can (compromise and) win!
[Click here for full story at: BLOOMBERG.COM]
EXPENDITURE STRATEGY - XSTRATA
Swiss-based Xstrata, one of the world's largest coal miners, has sold its aluminium operations, under the cash deal, to New York-based Apollo Management for $1.15bn (£580.8m) after an in-depth review of the business it began after it took control of Canadian-based mining group Falconbridge in 2006.
When in doubt, stick to your knitting!
[Click here for full story at: BBCNEWS.COM]
When in doubt, stick to your knitting!
[Click here for full story at: BBCNEWS.COM]
EXPENDITURE STRATEGY - RESEARCH IN MOTION
Research In Motion, BlackBerry 's maker, will cut $250 million in miscounted funds from pre-2002 earnings reports. The company also announced that its chief executive, Jim Balsillie, would surrender the chairman's post.
$250 million miscounted? Moral of the story: ‘creative accounting’ is BAD strategy. Accountants are and should remain scorekeepers not score cookers. It ultimately always hurts some business stakeholders and it should hurt the ego of a real businessman to depend on mere accountants for profits.
[Click here for full story at: BUSINESSWEEK.COM]
$250 million miscounted? Moral of the story: ‘creative accounting’ is BAD strategy. Accountants are and should remain scorekeepers not score cookers. It ultimately always hurts some business stakeholders and it should hurt the ego of a real businessman to depend on mere accountants for profits.
[Click here for full story at: BUSINESSWEEK.COM]
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