Posts Tagged ‘ packaging strategy ’

“Sustainable” competitive advantage in tech

I spend a lot of time thinking about “sustainable” competitive advantage in the world of consumer-facing technology-enabled services.  The once volcanic MySpace now appears to be a cooling lump of lava rock.  Of course there is news today that AOL is finally on its own.  Wonder how many really miss Geocities today.

All this leads me to look more closely at valuations of these firms.  During the .com days, at least we had ‘eye balls’, inaccurate as they might have been.  But at least they provided a frame of reference.  Today, we could use ‘clicks’, ‘unique users’, ‘growth rate’ and a slew of other metrics.  However, the big, I guess Billion $ question is … how long will success last?

Twitter came out of … literally nowhere.  Fledgling Facebook overtook MySpace.  AOL, the grand daddy of ’em all risks becoming totally irrelevant to a Facebook-fed generation. 

3 obvious ideas to ponder upon … as an investor / user / competitor:

a) What’s feeding your success? Ironically, it appears that the very hand that feeds success gets bitten.  Consider that the inherent power of Facebook that comes from its millions of users can itself be a liability.  There is literally nothing stopping Facebook’s competition to use the power of Facebook groups to launch its competing set of services.  Of course, there is nothing that could stop users’ leveraging their own social networks to create a tsunami-exodus to a more attractive alternative. 

b) What’s the abandonment rate? The moats keep getting destroyed.  Switching costs are pretty low.  While there is an inherent lock-in that comes in with the network-effect, there is nothing stopping someone from trying a more attractive alternative.  And then, one by one, the network joins.  Until the entire herd migrates to greener pastures.  Almost like humans did in ancient times.  Maybe, just maybe, we are meant to be that way.  Seeking.  Searching.  Settling Down.  Seeking.  Searching.  Settling Down. … … …

c) What’s the innovative alternative? Human time is limited, attention spans even more so.  There are reports that youngsters in Japan spend more time on electronic devices than “on” the Internet.  As we get older, our own preferences change.  We hang out in different places.  Our kids might consider our hangouts ‘uncool’.  Any bets that Facebookers’ kids will find their own hangouts?

So, wither valuations?  What is “sustainable” competitive advantage?  Sure these properties can add features, integrate with other properties and acquire interesting upstarts.  But, in many cases, they risk losing the very simplicity that attracted users in the first place.

sai@obviousideas.com

www.obviousideas.com – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

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sensible tech supply and demand

what do samsung and barnes&noble have in “common” today?  well b&n seems poised to lose out a golden opportunity create a market for nook. they wont have the nook in stores for sales or demos because … get this … excess demand for its devices!  hmmm …

on the other hand, samsung announced that is has beat its 2009 handset demand handsomly (pun intended).  50M units by end of nov 09 vs. 10M units by end of nov 08.  wow ….

so, what’s with the difference between ‘hmmm…’ and ‘wow…’ … and whats it got to do with the economics of tech supply and demand?

3 obvious ideas:

a. plan for success … blazing success: whether you are an old hand at tech a-la samsung, or a newbie like b&n, plan for success.  if you truly believe in your product, plan to have a product on hand when that elusive much-anticipated customer comes calling.  especially during holiday shopping.  there is no charm in gifting someone a nook gift-card.  get the real deal.  or be ready to see your competition kindle a hotter fire this year!

b. strategy focused operations: got to get your operations right and have it aligned with your strategy.  strategy without operations is like a hot air balloon without the hot air.  operations might be the plain ‘old boring stuff.  but thats what makes organizations run … or soar.  if you cant make a holiday delivery during the holiday season, its time to re-examine your operations.  what are the kinds of cascading management decisions that led you to this mess?  some over-compensation for the bull-whip effect?  cludgy inventory holding costs that held a supplier back?  a vendor management policy that turns up with unintended consequences?  oh, pray.  what made a ‘wow’ a ‘hmmmm’?!

c. marketing buzz and magic: whatever you do … whatever you do … dont forget the power of marketing.   even scarcity is an opportunity … if marketed well.  (apple seems to get this right all the time).  why, even google, the purveyor of digital goods has made scarcity an art form … and used it to generate hyper demand.  no wonder you see waves of interest in google!

sai@obviousideas.com

www.obviousideas.com – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

business value alignment … keeping it simple

i cant but help think about what the world might have looked like about 50 to 100 years ago.  before we had alphabet soups and tons of buzzwords.  when the world was a much simpler place.  yet a place that saw tremendous transformation. 

first commercial flight.  first radio broadcast.  why…. even first cup of instant coffee.  we went through so much change as a human race, yet were not bombarded with noise about the change.

organizations typically go through change all the time.  whether they acknowledge it or not, there is always an undercurrent of organization change and transformation.  some of course, are more pronounced or planned than others.

so, why do we generally approach this topic with a mix of trepidation and trite proclamations?  why do we start with the typical notion of “here is the change cycle… you go through denial, acceptance, … etc etc.”?

shouldnt the conversation really be about business value alignment?

in lieu of the 3 obviousideas, check out my interview on pmopodcast

http://www.thepmopodcast.com/mp3/The_PMO_Podcast_175_Value.mp3

sai@obviousideas.com

www.obviousideas.com – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

strategic role of packaging … in consumer goods (and minds)

  • a triangular toblerone inspired by … a swiss mountain (bye bye flat chocolate) = supporting product differentiation
  • a narrow tubular can of red bull … with 3x margins compared to the ale-in-red (someone say coke?) = reinforcing concept differentiation
  • an iconic symbol of a coke (ok,  so they are doing something right :)) … = creating brand differentiation

so, is packaging strategic?  what do you think?

andrea martini, gm (president), british american tobacco (mexico) held up spell bound in a captivating hour … playing executive, educator and entertainer … convincing us that packaging plays a strategic role in establishing brand identity and is not something to be delegated to the “assistant to the assistant to the assistant to the assistant to the brand manager”. 

through a passionate and powerful exposition of first principles combined with *real world product samples*, we came away with a much deeper appreciation and respect for the strategic role of product packaging.

sai at obviousideas dot com