ECONOMICS & MACRO MARKET
CEO confidence decreased slightly in the first quarter of 2010. The measure declined to 62, down from 64 last quarter (a reading of more than 50 points reflects more positive than negative responses).
Consumer confidence index arrived at 57.9 (1985=100), up from 52.3 in March and 46.4 in February. Economists watch the number closely because consumer spending accounts for about 70 percent of U.S. economic activity. However, April's reading is still far from what's considered healthy. A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth.
If consumer spending continues its uptrend, business executives will likely to have greater confidence in economic growth and increase capital spending and hiring more employees, which will in turn boost consumer confidence.
The recovery of the Dow Jones Industry Average seems to lose its steam and the price target is now adjusted to 11,286.
STRATEGY & MARKETING
Peering Clearly at the Future
Venture capitalists and entrepreneurs are in the business of predicting the future. In order for young companies to grow and thrive, they must develop the products and services that meet the needs of future customers in markets that change over time. While some entrepreneurs are enormously successful based on luck, starting the perfect product at the right time based on a hunch, others are more scientific about how they predict market dynamics and plan new product offerings. For venture capitalists, whose objective is to regularly finance successful emerging businesses and to minimize business failures, a thorough and replicable forecasting methodology is a powerful tool…
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Developing a Social Media Strategy: 6 Lessons from Kodak
Consumers are talking about your brand in social media channels, and you need a strategy to engage in these conversations. Ignoring them – or jumping in without a plan – is a missed opportunity. Kodak, whose direct sales and online share-of-voice are on an upward trend, learnt 6 lessons: 1) listen before you speak; 2) add value when joining the conversations; 3) don’t be intrusive; 4) use real people behind the brand; 5) treat consumer and business customers differently; 6) transparency is paramount…
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Apple Unveils Ad Platform and Phone Software
To better cultivate its apps ecosystem, Apple demonstrated its iAd which places ads on applications so that the third-party apps developers do not have to worry about building advertising components in their applications and placing ads themselves. Mr. Jobs says. “We have figured out how to do interactive video content without ever taking you out of the app… We think people are going to be a lot more interested in clicking on these things.” Apple will host the ads and give developers 60 percent of the ad revenues, keeping 40 percent…
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INNOVATION IN BUSINESS & TECHNOLOGY
Facebook Makes It Easier for Users to Share Interests across Web
Recently, Facebook unveiled a platform that will make it easier for users to share their interests with friends on other sites across the internet. Once signed in to Facebook, users visiting other websites can view modules displaying their friends' likes and comments about that site's content. For example, a user on Pandora, the music site, will see which artists and songs their Facebook friends like – without having to return to Facebook…
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The Tea Thieves: How a Drink Shaped an Empire
By the mid-19th century, Britain was an almost unchallenged empire. It controlled about a fifth of the world's surface, and yet its weakness had everything to do with tiny leaves soaked in hot water. By 1800, tea was easily the most popular drink in the country. The problem? All the tea in the world came from China, and Britain couldn't control the quality or the price. So around 1850, a group of British businessmen set out to steal tea seeds and trade secrets from China and create a tea industry in a place they did control: India…
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Why Businesses Don’t Experiment
Several years ago, I was involved in developing a video on demand business in hospitality industry in China. After months of research, simulation and deliberation, we came up with the business strategy and a set of business models. While we were excited about the future of the business based upon the business plan that we had developed, we wanted to validate our ideas and tested in three hotels. Only after the ideas proved to be effective, we set out to raise investment fund and spin the unit off from its parent company. Many companies, however, don’t experiment. The article published at Harvard Business Review describes an failed case of experiment and discusses about the reasons that some companies avoid experiment…
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LEADERSHIP & ORGANIZATION
When You Think the Strategy Is Wrong
Development of corporate strategy is not merely a process of logical thinking; it is full of emotional attachment. When people come to realize that the strategy of the organization is wrong and certain changes are necessary, one needs to know how to take the initiative in an artful way. This article published on Harvard Business Review provides the basic principles to remember. The dos: 1) understand the root cause of your concerns; 2) research the inputs and assumptions underlying the strategy; 3) express your concerns to your immediate boss first. The don’ts: 1) insist that your concerns be heeded; 2) assume you know the assumptions or reasoning behind the strategy; 3) question the strategy in a public setting…
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Why Asking “Any Questions?” Doesn’t Generate Any Questions?
Why do you often hear silence during the question-and-answer session of a meeting? The author at Harvard Business Review blog listed two possible reasons: 1) nobody wants to risk asking a "dumb" question and 2) nobody wants to look like a troublemaker. Speakers and managers: you really should ask questions of yourself and rephrasing questions so that you can increase the likelihood of having a real discussion…
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Why Marine Corps General Said “PowerPoint Makes Us Stupid?”
PowerPoint is a very useful tool for communication. When it is used rigidly and consumes a great deal of time for preparation, however, utilization of the tool stifles discussion, critical thinking and thoughtful decision-making, according to generals in battlefields…
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Book Available at Harvard Business Review for Download
Harvard Business Review’s Must-Reads on Strategy:
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Wednesday, April 28, 2010
Wednesday, April 14, 2010
Critical Insights Vol. 1 Issue 7
ECONOMICS & MACRO MARKET
Consumer Confidence Index stands at 52.5 (1985=100), up from 46.4 in February. The Present Situation Index increased to 26.0 from 21.7. The Expectations Index improved to 70.2 from 62.9 last month. The rise of confidence index might be supported by improving job market. The Conference Board Employment Trends Index™ (ETI) rose in March for the seventh consecutive month. The index now stands at 94.4, up from February's revised figure of 93.7. The index is up 5.5 percent from a year ago. Over the past three months, all of the index's eight components have been improving.
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% in March. The U.S. Import Price Index rose 0.7 percent in March. The increase was attributable to higher prices for both fuel and nonfuel imports and followed a 0.2 percent decline in February. Export prices also rose 0.7 percent in March after declining 0.4 percent the previous month.
Dow Jones Industry Average has been climbing since we forecasted its continued rise when it was at 10,566.02 on March 9, 2010. While economic situation is improving, the market is yet to see signs of sustainable growth, leading to a volatile path in the foreseeable future.
STRATEGY & MARKETING
CVS Goes Upmarket
As businesses reach a plateau, firms often conduct out-of-box thinking and look for more growth opportunities. One of the common choices is switch to more profitable market segments. By moving from “Always Low Price” to “Save Money Live Better,” Walmart Stores, Inc. seems to have difficulties in its journey for its upmarket repositioning and the company has a lot to learn from Target Corp. Incidentally, drug store CVS was also on the journey to go upmarket. After failed to lure the makers of pricey cosmetics, skin care, and fragrances to offer their products to the drugstore giant, CVS decided to create a brand new retail environment that would be adjacent to its core pharmacies yet offer a totally different shopping experience - Dubbed Beauty 360…
View the article
Why Internet Retailers Should Pay Attention to Where Potential Customers Live
While the Internet holds immense promise for reaching retail customers far beyond traditional trading areas, new Wharton research indicates that customers discover online retailers by offline word-of-mouth, online word-of-mouth, online search and magazine advertising. Old world dynamics, such as neighbors sharing word-of-mouth recommendations, therefore, can still have powerful effects on Internet sales. In another case, researchers investigate people whose shopping needs might be different than most of the people in their geographic area – preference minority. For example, young parents living in a zip code populated mostly by elderly people would find fewer offerings in local stores because the retailers need to devote the bulk of their shelf space and inventory to meeting the demands of the majority of their customers. Preference minority customers are more likely to purchase online for niche brands and less price sensitive…
View the Article
They Key Pillars of Business Model
All successful business ventures need a clear business model and experienced investors will want to see it before making an investment. Business model tells us how a business makes money. The key pillars of business model are 1) customer value proposition – how your product or service helps to solve a problem or provide a benefit; 2) a foothold – where is the niche customer segment of early adopters; 3) differentiation – how your customers view your offers as meaningfully different; 4) pricing…
View the article
INNOVATION IN BUSINESS & TECHNOLOGY
Monsanto: Winning the Ground War
While products of disruptive innovation may lead to great business opportunities, market acceptance and readiness could be a life-or-death challenge. When Hugh Grant took the top job at Monsanto (MON) in May, 2003, the company's nickname in some quarters was "Mutanto." A growing chorus of critics warned that Monsanto's genetically modified plant seeds would wipe out the monarch butterfly, give people virulent new allergies, and reduce the planet's agricultural diversity. During the 12 months preceding Grant's elevation, Monsanto's stock price fell nearly 50% to $8 a share. In fiscal year 2002, the company lost $1.7 billion. Fewer than five years later, Monsanto is thriving. The company’s net income leaped 44% last year, to $993 million, on $8.5 billion in revenue. Monsanto shares, which closed at $104.81 on Dec. 5, have risen more than 1,000% during Grant's tenure. At 58.6, the company's price-to-earnings ratio is about two points higher than Google's (GOOG). Here is a fascinating story showing how Monsanto capture stakeholders’ needs and concerns and came up with its product mix and marketing strategy to attain market acceptance…
View the article
Are You a Walt Disney or a Roy Disney?
Everybody knows Disney. The next time you are marveling at the wonders of Disney, make sure you remember Roy. While Walt was dreaming about his Magic Kingdom and making a mouse talk, his brother Roy was actually making sure that Walt's dreams would come true. Roy was the operational genius; a yin for Walt's yang …
View the article
Co-Creation: Not Just Another Focus Group
Several years ago, I conducted simulation for product innovation at City University’s MBA classes for future concepts of iPot. Students were divided into competing groups. They are required to view themselves as and communicate with teenagers – typical iPot users, gather and prioritize the requirements of the target customers, and develop future concepts of the products. As they saw how similar the features of new iPot and eventually the iPhone are to the concepts that they had developed, they were very excited. This approach of getting customers involved in product innovation has been named as co-creation and become increasingly popular in industries. This article talks about how this approach has been successfully adopted by companies like Unilever…
View the article
LEADERSHIP & ORGANIZATION
Beware the Siren’s Song - Maintain Self-Control by Avoiding Temptation
Homer wrote of Odysseus that he was so worried about the allure of the siren’s song, he put wax in his shipmates’ ears and had himself tied to his ship’s mast and, furthermore, erroneous beliefs about one’s capacity for exercising restraint can lead to maladaptive self-control strategies. Unlike that hero of mythology, though, most people overestimate their capacity to control their impulses, according to a researcher at the Kellogg School of Management. His four fascinating studies show that people in a cold, non-impulsive state will overestimate their impulse-control capacity; people in a hot, impulsive state will have a more realistic view of their capacity for impulse control; and people who perceive that they have a high capacity for impulse control will expose themselves to more temptation and will ultimately exhibit more impulsive behavior...
View the article
Why Business Leaders Should Act More Like Artists
If you are a manager, especially a manager with technology and engineering background, please take your managerial palettes out and copy the creative class. Artists are more inspired communicators, as they are always trying to inspire a response through their art, and they also collaborate and learn together better than their more numerically-inclined, left-brained brethren…
View the article
How the Mighty Fall: A Primer on the Warning Signs
The author of Good to Great, Jim Collins, on how to spot the subtle signs that your successful company is actually on course to sputter—and how to reverse the slide before it's too late…
View the article
Consumer Confidence Index stands at 52.5 (1985=100), up from 46.4 in February. The Present Situation Index increased to 26.0 from 21.7. The Expectations Index improved to 70.2 from 62.9 last month. The rise of confidence index might be supported by improving job market. The Conference Board Employment Trends Index™ (ETI) rose in March for the seventh consecutive month. The index now stands at 94.4, up from February's revised figure of 93.7. The index is up 5.5 percent from a year ago. Over the past three months, all of the index's eight components have been improving.
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% in March. The U.S. Import Price Index rose 0.7 percent in March. The increase was attributable to higher prices for both fuel and nonfuel imports and followed a 0.2 percent decline in February. Export prices also rose 0.7 percent in March after declining 0.4 percent the previous month.
Dow Jones Industry Average has been climbing since we forecasted its continued rise when it was at 10,566.02 on March 9, 2010. While economic situation is improving, the market is yet to see signs of sustainable growth, leading to a volatile path in the foreseeable future.
STRATEGY & MARKETING
CVS Goes Upmarket
As businesses reach a plateau, firms often conduct out-of-box thinking and look for more growth opportunities. One of the common choices is switch to more profitable market segments. By moving from “Always Low Price” to “Save Money Live Better,” Walmart Stores, Inc. seems to have difficulties in its journey for its upmarket repositioning and the company has a lot to learn from Target Corp. Incidentally, drug store CVS was also on the journey to go upmarket. After failed to lure the makers of pricey cosmetics, skin care, and fragrances to offer their products to the drugstore giant, CVS decided to create a brand new retail environment that would be adjacent to its core pharmacies yet offer a totally different shopping experience - Dubbed Beauty 360…
View the article
Why Internet Retailers Should Pay Attention to Where Potential Customers Live
While the Internet holds immense promise for reaching retail customers far beyond traditional trading areas, new Wharton research indicates that customers discover online retailers by offline word-of-mouth, online word-of-mouth, online search and magazine advertising. Old world dynamics, such as neighbors sharing word-of-mouth recommendations, therefore, can still have powerful effects on Internet sales. In another case, researchers investigate people whose shopping needs might be different than most of the people in their geographic area – preference minority. For example, young parents living in a zip code populated mostly by elderly people would find fewer offerings in local stores because the retailers need to devote the bulk of their shelf space and inventory to meeting the demands of the majority of their customers. Preference minority customers are more likely to purchase online for niche brands and less price sensitive…
View the Article
They Key Pillars of Business Model
All successful business ventures need a clear business model and experienced investors will want to see it before making an investment. Business model tells us how a business makes money. The key pillars of business model are 1) customer value proposition – how your product or service helps to solve a problem or provide a benefit; 2) a foothold – where is the niche customer segment of early adopters; 3) differentiation – how your customers view your offers as meaningfully different; 4) pricing…
View the article
INNOVATION IN BUSINESS & TECHNOLOGY
Monsanto: Winning the Ground War
While products of disruptive innovation may lead to great business opportunities, market acceptance and readiness could be a life-or-death challenge. When Hugh Grant took the top job at Monsanto (MON) in May, 2003, the company's nickname in some quarters was "Mutanto." A growing chorus of critics warned that Monsanto's genetically modified plant seeds would wipe out the monarch butterfly, give people virulent new allergies, and reduce the planet's agricultural diversity. During the 12 months preceding Grant's elevation, Monsanto's stock price fell nearly 50% to $8 a share. In fiscal year 2002, the company lost $1.7 billion. Fewer than five years later, Monsanto is thriving. The company’s net income leaped 44% last year, to $993 million, on $8.5 billion in revenue. Monsanto shares, which closed at $104.81 on Dec. 5, have risen more than 1,000% during Grant's tenure. At 58.6, the company's price-to-earnings ratio is about two points higher than Google's (GOOG). Here is a fascinating story showing how Monsanto capture stakeholders’ needs and concerns and came up with its product mix and marketing strategy to attain market acceptance…
View the article
Are You a Walt Disney or a Roy Disney?
Everybody knows Disney. The next time you are marveling at the wonders of Disney, make sure you remember Roy. While Walt was dreaming about his Magic Kingdom and making a mouse talk, his brother Roy was actually making sure that Walt's dreams would come true. Roy was the operational genius; a yin for Walt's yang …
View the article
Co-Creation: Not Just Another Focus Group
Several years ago, I conducted simulation for product innovation at City University’s MBA classes for future concepts of iPot. Students were divided into competing groups. They are required to view themselves as and communicate with teenagers – typical iPot users, gather and prioritize the requirements of the target customers, and develop future concepts of the products. As they saw how similar the features of new iPot and eventually the iPhone are to the concepts that they had developed, they were very excited. This approach of getting customers involved in product innovation has been named as co-creation and become increasingly popular in industries. This article talks about how this approach has been successfully adopted by companies like Unilever…
View the article
LEADERSHIP & ORGANIZATION
Beware the Siren’s Song - Maintain Self-Control by Avoiding Temptation
Homer wrote of Odysseus that he was so worried about the allure of the siren’s song, he put wax in his shipmates’ ears and had himself tied to his ship’s mast and, furthermore, erroneous beliefs about one’s capacity for exercising restraint can lead to maladaptive self-control strategies. Unlike that hero of mythology, though, most people overestimate their capacity to control their impulses, according to a researcher at the Kellogg School of Management. His four fascinating studies show that people in a cold, non-impulsive state will overestimate their impulse-control capacity; people in a hot, impulsive state will have a more realistic view of their capacity for impulse control; and people who perceive that they have a high capacity for impulse control will expose themselves to more temptation and will ultimately exhibit more impulsive behavior...
View the article
Why Business Leaders Should Act More Like Artists
If you are a manager, especially a manager with technology and engineering background, please take your managerial palettes out and copy the creative class. Artists are more inspired communicators, as they are always trying to inspire a response through their art, and they also collaborate and learn together better than their more numerically-inclined, left-brained brethren…
View the article
How the Mighty Fall: A Primer on the Warning Signs
The author of Good to Great, Jim Collins, on how to spot the subtle signs that your successful company is actually on course to sputter—and how to reverse the slide before it's too late…
View the article
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