REVENUE STRATEGY - MICROSOFT

Microsoft Corp. agreed to buy a stake in Sichuan Changhong Electric Co., China's second-biggest TV maker as part of plans to develop software that connects televisions to the Internet for China.

Because:
1. Microsoft is losing U.S. users for software that connects televisions to the Internet (Comcast Corp. will stop using Microsoft's applications for Internet TV services in Washington State).
2. China may pass the U.S. this year to become the market with the most high-speed Internet connections in the world, a service that enables users to watch films and TV shows over the Web.
3. Sichuan Changhong is looking for new products like Internet TVs because demand for their cathode-ray tube TVs is declining.

They will jointly develop computers and TVs that connect to the Web.
1. Microsoft will buy the 15 million new Sichuan Changhong shares for 6.27 yuan each. Microsoft agreed not to sell the shares for three years
2. Microsoft will provide Sichuan Changhong with software technologies to help develop electronics products.
3. Sichuan Changhong will use money from the share sale to Microsoft to help buy 75 percent of Dutch company Sterope Investments BV, owner of South Korean plasma-panel maker Orion PDP Co. 4. Sichuan Changhong will raise 2.5 billion yuan for the acquisition by selling 400 million new shares to 10 institutional investors.

Revenue is in knocking open another door when one door closes, and converging to diversify

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - MATSUSHITA ELECTRIC

Matsushita Electric Industrial Co. may sell its 52.4 percent stake in Victor Co. of Japan Ltd., maker of the JVC brand of electronics and creator of the world's first home video recorder with the VHS format in 1976

Because:
1. Victor forecasts a fourth straight year of losses.
2. Victor had about $1 billion in debt as of March 31 (Victor may issue 20 billion yen ($164 million) of new stock to repay debt)

Matsushita may not sell to any party keen to sell off Victor’s money-losing units quickly

Expenses that do not generate a benefit do not need the benefit of any doubt.

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REVENUE STRATEGY - SONY

Sony Corp., the world's second- largest consumer electronics maker, may ship as many as 600,000 Blu-ray DVD players in the U.S. this year, from less than 100,000 units in 2006 as it expects movies exclusively available to the device will lure buyers.

Its Blu-ray fights with Toshiba Corp.'s HD DVD in high-definition television.

Successful Trend Guessing = Revenue

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EXPENDITURE STRATEGY - SANYO

Sanyo Electric Co., the world's largest maker of rechargeable batteries, controlled by creditors including Goldman Sachs Group Inc., posted an eighth loss in 10 quarters because of costs to compensate early retirees. Almost 1,000 workers applied to an early retirement program in December, costing the company about 11 billion yen.

So it is jettisoning businesses with lower profitability:
1. It sold its leasing unit (a 17 percent stake in Sanyo Electric Credit Co.) this month to GE.
2. It is seeking bids for the chip subsidiary, Sanyo Semiconductor Co.

Last year it sold stakes in a Thai refrigerator unit and a liquid-crystal display venture.

Be lean and mean and keen to cut the costs that bear sub-optimal revenue.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - LG ELECTRONICS

LG Electronics Inc., the world's second-largest plasma display maker, reported a record 194 billion won loss in the first quarter after competition from Matsushita Electric Industrial Co., and the rising popularity of rival liquid-crystal display technology forced the company to cut prices.

LG will stop production at its oldest panel-manufacturing line at the A1 plant in Gumi, southeast of Seoul during the first half to increase efficiency in the plasma business. Halting production at A1 with a monthly capacity of 70,000 plasma panels will save 20 billion won ($21 million) to 30 billion won annually.

Is this a case of over-investment or creative destruction?

Whoever crystallizes the conflated calculus of creative destruction and over-investment will come close to playing God.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - PHILIPS

Royal Philips Electronics NV, Europe's largest consumer electronics maker, intends to focus on making lamps, appliances and medical scanners.

So it will reduce its outlay in other businesses:
1. It plans to sell its entire stake in chipmaker Taiwan Semiconductor Manufacturing Co. by 2010. It sold 240 million American depositary receipts, equivalent to 1.2 billion common shares, yesterday. In March, it sold 887 million shares
2. It also sold its remaining 2.5 percent stake in fiber-optic parts maker JDS Uniphase Corp.

You need to find the equilibrium point between sticking to your knitting and keeping your eggs in more than one basket.

[Click here for full story at: BLOOMBERG.COM]

EXPENDITURE STRATEGY - KODAK

Kodak announced first-quarter losses of $151 million.

So:
1. Kodak sold its health-care unit to Canadian outfit Onex for $2.35 billion.
2. It is also in the midst of a massive series of layoffs expected to total more than 20,000 as sales of its staple photographic film shrivel

Sticking to the knitting is fine.
But why wait until an axe is required on staff?
Why not a continuous rejuvenating scalpel?

[Click here for full story at: BUSINESSWEEK.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]

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?!