February 9, 2010

Apple Issues ‘The Game Changer’?

iPad from AppleThe media world is buzzing with the launch of the iPad but it will take some time to decipher if this new product by Steve Jobs and Co. is, in the American vernacular, a ‘game changer’. Jobs has already described his new product as “a dream” and this might not just be marketing hyperbole. The big question seems to be “isn’t this just a big iPhone?.” And when I was able to test-drive one a few days ago (friends in high places) that, too, was my initial reaction. But, after a few minutes I quickly realized, as is often the case, the beauty and execution of the device is pretty stunning.

I am an Apple user, but not a mega-fan, as many are (I don’t walk around evangelizing), so let me send that out right now. What I’m most interested in, about the company, is how they brand and market themselves (but that’s another discussion). When we get back to this device, what strikes me most is the way they have leap-frogged over the current crop of e-readers like Kindle. One of the new, and striking features of the iPad is the download store featuring books to buy, much like iTunes does for music. And the experience is wonderful. Apple has also apparently made deals with the biggest names in publishing (Penguin, Simon and Schuster etc.) which will make the book world very interesting indeed for the next few years.

So, is this a bridge between the smartphone and the laptop? Kind of. But it also offers a strangely unique experience. All of the Apps are there that you’d expect and web browsing, but the feel of it is different and the A4 experience isn’t a hindrance but rather something that feels right. My only reservation is the idea of sitting in a public park with a very expensive gadget on your lap. Can you imagine the spate of muggings that will occur in the next twelve months? I’ll wait ‘til they drop the price enough for the muggers to own one. Enjoy.

February 8, 2010

No Longer A Saab Story

SAABIf you live in Sweden, as I do, you realize that as a foreigner (American) on Swedish soil I see Scandinavians in a light, culturally, that they often don’t see themselves. To cater to clichés, it is the land of ABBA, Ikea, and of course Saab cars. These things are held dear. Trust me. To poke fun at the sometimes, shoddy craftsmanship or slightly dodgy company politics of Ikea is akin to kicking a Swede in the groin. They love Ikea, wholeheartedly, and the same can be said for Saab. These are their global goliaths, and quite rightly, they’re proud.

So, it has been with great consternation, that everyone I know here in Stockholm has been following the latest details of what I called, until a few days ago, “the Saab story” and are now rejoicing that their once great brand is in hopefully better hands. Spyker, a small luxury Dutch carmaker is the company saving the day for almost 4,000 Swedish jobs, a national treasure, and well, a pretty great car that’s been in production for over seventy years. I think it’s probably fair to say that GM did a pretty poor job of selling a trustworthy and quirky (by American standards) brand to the public – a brand I can imagine wasn’t exactly a priority at GM HQ.

All brands have to paint an immediate picture in one’s mind, even if it’s a negative one. The problem, I think, with Saab is that they have been languishing without a brand presence since GM took over in 2000, and consequently, have been losing money for the Americans year after year. With a little TLC and creativity from their new Dutch parents, this could be a re-born brand and one that can compete on the battlefield of today’s automotive world. I, for one hope so, because I think the Swedes need their icons, and the world could certainly use a better car than GM’s hummer winning over the hearts of the population.

February 7, 2010

Look To The Rupee

India Versus ChinaAs western businesses scamper to get into the pockets of the Chinese, perhaps they should think about another emerging economic giant, and one that actually spends money on consumer goods: India.

As was pointed out in Business Week recently, the reason the west can’t break into the market in China is because government-owned companies are taking 75 percent of the population’s money, which then finds it way back into government coffers. Private businesses are still very much on the losing end in Beijing.

The reverse is true in India. The private sector, despite the huge differences in income in the populace, is booming, creating a massive middle class that is far greater than China’s. What this means is that Indians are spending money and it’s not just going back to the state. It also reflects the fact that the rural population (which makes up most of both countries) couldn’t be more contrasting. Rural Chinese haven’t gained more wealth in the last decade, they’ve endured declining incomes, whereas economic growth in rural India has far outpaced that of the city centre’s. This is very important for western businesses to understand. Depending on what they are trying to market, if it is utilitarian/egalitarian, as opposed to being a luxury item, it might be a better bet to aim for Mumbai and not Beijing – not to mention the inevitable pitfalls of dealing with a censoring and heavy-handed bureaucracy as we’ve witnessed recently with Google.

February 3, 2010

A New Sheriff In Town

China US GoogleThe Google Vs. China showdown is still front page business news, but very few journalists are looking past the theatrics of the situation (i.e. somewhat heroic David versus Goliath tale where Google stands up to the injustices of governmental censorship, etc.) and asking the question of, ‘do the Chinese actually care about western companies and products when they have their own, thank you very much?

American internet giants are just part of the scenario of this massive emerging economy. What companies still fail to realize are the cultural chasm’s that need to be bridged in order to win ‘the hearts and minds of the consumer’. Recently, Eurocheddar mentioned how Walmart had a substantial learning curve when they expanded beyond U.S. soil. It simply wasn’t enough to move the store model to Latin America and expect local customers to be the same as in the states. In the same way, western companies have to understand the Chinese culture and traditions firstly, in order to then understand and ultimately create desire for their products.

Of course it helps to be first, as many market analysts point out. The fact that China has its own versions of Facebook, YouTube, and Ebay has certainly played a major role in foreign companies peddling the same wares, and achieving a lesser effect. But also, Ebay learned too late when they quit the country several years ago, that their business model didn’t translate to what the Chinese want. Local version, Taobao, won in the end because of the simple fact that they don’t sell used goods. The Chinese want new goods, not used. Had they understood that, they could have saved much money and time.

It reminds me of the cautionary tale of Chevrolet trying to sell ‘The Nova’ in South America in the seventies. They couldn’t figure out why it was bombing. Finally it dawned on them that Nova means ‘no go’ in Spanish. Although this is apparently an urban myth, it does highlight one simple fact: Due your research!

February 2, 2010

Like Chocolate And Cheese

Kraft and CadburyThe six-month battle to secure the goose that lays the golden crème egg (sorry) of Cadbury’s is now over, and the winner is Kraft. This comes after many derisory verbal comments in the press from Cadbury’s, and other suitors like Hershey’s, which have been sniffing around the table also trying to win the proverbial hand of the lady.

What this means for British jobs is uncertain. Kraft has said that it aims to keep the thousands of Cadbury’s employees, but cut jobs at the Uxbridge headquarters. This new partnership will amount to over $50 billion in annual sales for Kraft which will now boast the fabled crème egg and Trident gum amongst its confectionary arsenal. But, what I’m wondering is how this will play out culturally? How does the Oreo cookie and processed cheese sit alongside the priggish chocolates of Cadbury’s?

Already, there have been snide comments from the chocolate snob quarters. The Cadbury family have reacted with “horror” that the “plastic cheese company” has put an end to two hundred years of independent Cadbury history. The great granddaughter of George Cadbury, Felicity Loudon, has lambasted the partnership saying, “They will cut corners, they will sell out. To me they are a plastic cheese company and this is the jewel in the crown.” Ouch. Others, including Cadbury’s chairman and many business analysts, believe the offer is an excellent result for shareholders who will receive 840 pence a share, 500 pence in cash, and the rest in shares.

It’s true that Kraft will have to generate money to deal with its debt of acquisition, and that will mean cost cuts, but nevertheless the investors and shareholders have spoken. As for the ‘quality’ of Cadbury’s vs. Kraft? After living in the UK for half my life, as an American, I can say, without reservation or a hint of jingoism, that dairy milk, crème eggs, and Cadbury’s flake are RUBBISH!

If you want real chocolate, get it from Belgium. End of discussion.

January 31, 2010

It’s All About Streamlining

Smart HouseThe days of satellite dishes, cable boxes, stereos, CD’s, or any clutter are over. Soon we’ll all be living in empty white rooms with just a white laptop and a futon. I imagine these spaces in the near future to look something like a cross between a scene from Woody Allen’s ‘Sleeper’ and a John and Yoko album cover from 1972. I’m not sure if this is a good thing. As the world gears up for the unveiling of the new Apple ‘tablet’ (there goes the book collection as well), it appears that game consoles are starting to operate more as all-round entertainment hubs than just a way for your kid to lose his eyesight and brain cells playing a kickboxing game for eight hours.

Xbox’s and Playstation’s are now used as channel receivers and full ‘entertainment consoles’ thus avoiding any complications or delays dealing with cable companies. This is a new and very lucrative market providing new revenue streams for people like Disney, who own sport channels like ESPN. The plan is to also include social networking sites and perhaps your music catalog, all connected through internet broadband and your trusty game console. The challenge (and money) lies in each manufacturer developing online stores and most importantly, content in them to sell to customer’s.

The competition for the heart of the home is coming from the PC side. Companies are beginning to offer interfaces that connect directly to your laptop enabling videos and movies to be streamed from your computer. But, whoever can offer the service that provides the most content options, and thus streamlining the whole way we experience movies, use Twitter, and listen to music will ultimately be rewarded with bags of cash. Whatever the case may be, and whoever the provider is, one thing is for certain: DVD players and clunky cable boxes are going the way of the dodo.

January 28, 2010

Keep Your Enemies Closer

Google Apple Microsoft

When it’s business, it appears, there are no alliances. If Shakespeare were alive today, and bereft of decent ideas, perhaps he would pick up his quill pen and write of the feuding turmoil between smartphone families. Well, maybe not. Nevertheless, the ‘battle’ between Google and Apple is heating up with Apple apparently in talks with old foe Microsoft to oust the search engine giant from the iPhone in favor of …Bing. Oh, the intrigue!

The default search engine setting on the iPhone is for Google, but that may change. Google has now launched a smartphone of its own (the Nexus One) that competes with Apple’s baby, and obviously Jobs and Co. aren’t too happy. The current idea at Apple is to joust back at Google by making the default search, Bing. Microsoft would, of course, be thrilled to help their trailing service advance, and Apple would probably see a bigger cut from advertising revenue that Bing would generate.

Several months ago, Microsoft made it clear in the press, that they were ‘in it for the long haul’ regarding Bing. They admitted the fight to top Google would be a long one, but said they would be willing to invest for years if necessary. Right now, Bing only commands about 10% of searches while Google is almost 90%. It’s interesting to note that a little over ten years ago, Apple was in dire financial straits, and was thrown a $150 million lifeline by Microsoft, and now the tables are turned. Even though Apple has had partnerships with Google in the past, now both companies are showing their fangs. And Microsoft might be thrown a substantial bone from Apple that could shave a few years off their battle with Google.

We’ll keep you posted from the battlefield.

January 27, 2010

Productivity Is Relative

Productivity Is RelativeWalking around Stockholm at the weekends, I occasionally see an office light on and someone hunched over a computer, when technically, they should be home having a personal life. The first thought is always, ‘wow, what an industrious person to be here at this hour.’ Then, as you look voyeuristically at their screen from the sidewalk you realize, invariably, that they’re on Facebook. The mind then spits out, ‘what a lazy, time wasting bastard.’ Apparently I’m not alone.

Recently on the BBC, there was an article about India cracking down on the social networking site because employees are wasting company time and the fear is that this trend is killing what should be office ambition. A recent survey of over 3,000 corporate employees found that most spent about an hour a day on the various social sites leading to a 12% drop in productivity, and most had actually constructed their Facebook site during office hours. Employers are aghast. What used to be a covert meeting by the water cooler to discuss what happened on a Friday night out, has now been replaced by uploading grainy photos from a mobile phone of that same night and trying to make more ‘virtual friends’ in the process.

Now, as a self-confessed Facebook killjoy, I should be applauding the move to crack down on this silly phenomenon and suffer the marginalization of my lot from the rest of the herd in quiet dignity, knowing that at least Mumbai’s CEO’s are on my side. Not quite. A friend of mine made a documentary about the modern work environment in Chennai about two years ago. This wasn’t about call centers, but rather high-tech outsourcing that worked round the clock to assist company’s around the world in preparing corporate presentations that needed to be done as soon as possible; the staff were highly educated, spoke impeccable English, and always delivered on time. Seriously hardworking is an understatement. This wasn’t an isolated organization either. Employees at most businesses in this burgeoning corner of the world average sixteen-hour days and the emphasis on inter-office competition makes Wall Street look limp in comparison. I’ve never seen a culture so super-charged to achieve and advance in the workplace. And it doesn’t seem to be just about making money (although that’s a key ingredient), it’s more about personal and familial pride; about achievement in your given field.

So, with this in mind, and from what I’ve experienced, I’d say a 12% loss of productivity in India due to Facebook ‘consumption’ is probably still being at least 30% more productive than most corporate environments in the U.S. or U.K. My guess is that in less than a decade, call centers will be in Texas, not Bangalore.

January 26, 2010

Taken By Stealth

walmart and starbucks go global

After reading a lengthy article about Wal Mart and just how large of an operation it is (the world’s biggest retailer, by far), I realized one of the more interesting items in the piece concerned their attempts to spread ‘the word’ globally. It’s taken the marketing department years to understand that (unlike American politics) you can’t just pick up and move the idea of Midwestern, blue collar thriftiness to say, South Korea and expect it to fly. They’ve had to adapt to South America, China, and India by changing their name on the storefront, and more importantly, their products to suit the locale – they’ve had to appeal by stealth and adapt to the local culture.

Starbucks Coffee is apparently doing something similar. In a bid to appear more neighborhood-oriented and bespoke (you know, the kind of businesses that don’t exist anymore because the world is run by about six corporations), they’ve dropped their name and are road-testing a new identity – that is until the coffee snobs of Seattle find out who’s behind their new favorite hangout and firebomb it. Despite the fact that cynics will despise this move by both companies to ‘sneak one in’, isn’t this the nature of free enterprise-expansion. Businesses that don’t modify, adapt and move with the culture around them, die. Now, to ask whether Wal Mart or Starbucks are exploitative, greedy, and avaricious? Of course they are. Not to say it’s morally right, but that’s the nature of expansion whether it’s hidden behind a re-brand or is an overt money grabber. To expect anything less from a multi-national company is to be naïve and expect that growth and altruism can somehow make bedfellows. If you can name one (and don’t say Google), please let us know, and we’ll put forth their names for sainthood. Until then, everyone has the right to patronize or not the above establishments. One is called free market, and the other free choice.

January 25, 2010

Saving Face In Beijing

Google China Versus Baidu

It’s just been announced that the altruistic search engine kings, Google, are to end the tempestuous relationship with Chinese censors by quitting the country altogether. This comes as quite a shock to many, as China is the world’s biggest internet market, and well, that’s where Sergey and Larry have made their money.

Some see this as face-saving exercise, as Google hasn’t managed to make proper inroads in the market, being beaten for the last several years by local engine Baidu. Others see the move as a middle finger raised to the source of the censorship that has plagued them since the beginning. Google issued a statement saying they had been hacked and that Gmail accounts held by certain ‘dissidents’ had also. In response to this, they made the bold move of dropping the censor filter they have in place for searches. Suddenly, the Chinese could access information on the Tiananmen Square massacre and a multitude of other banned information sites. Google’s chief legal officer then issued a statement saying they would be in discussion for the next several weeks with Chinese authorities to see if they could operate their site without censorship. Hmm, I don’t think that last move will endear them to the government. What do you reckon?

Nevertheless, such a move adds to the allure that Google is a modern, progressive company that although a massive money making operation, has scruples. Doubters will argue (and there is a legitimate argument) that this is just another American company trying to colonize the Far East but with little success. Regardless, it’s seems to be a case of Google cutting its losses AND saving face by citing censorship as the reason for the abrupt abortion. After all, one expert has said that they’ve only made $1bn in China in the last few years. It seems that’s simply not enough for Larry and Sergey to keep the doors open.