Sunday, September 24, 2006

Vigilant vs operational leaders

Excellent Wharton article on Vigilant vs Operational
leaders... It touches on Ford vs Toyota (guess which type of leader is which) as well as
Coke vs Pepsi in India and the lighting manufacturers missing the switch to
LEDs. Essentially the article distinguishes between looking just at the
operational issues of lower cost production and matching the competitors
you know, vs looking outside at a broader range of influences and moving
earlier. Makes sense to me.

Monday, September 18, 2006

Another case study for you - the HDD turns 50

Want to see a product life cycle? Look at the humble hard disk drive. Invented 50 years ago by IBM, it has steadily dropped in size and price. A few years ago IBM sensed that the margin was gone and it sold out of the business. Nevertheless the market remains big with niches developing all the time. However it's hard to make money except by low-cost production and high volumes. HDDs also face competition from solid-state memory devices. Although HDDs are attractive in terms of price, performance and size, technologies such as Flash memory are robust, immune to the likely effects of shock and power loss and getting bigger, faster and cheaper by the day. Can you see a future for HDDs, or will they be overwhelmed by new technology? Sounds like a good essay subject to me.

Tuesday, September 12, 2006

Agility and competitive advantage

Competive advantage is taking your core competence and making from it some key feature that gives you an edge over your competitors. It could be a fast, flexible and low cost supply chain like Dell's; or Toyota's ability to rapidly develop multiple new car designs and to manufacture them almost faultlessly. But what happens when, inevitably, the others catch up? The answers are many, but they include sharpening that edge continually or looking for new ideas from left field. This BusinessWeek article explores a few of those ideas.

EFTPOS decision in Oz

The RBA has issued a press release on the subject of EFTPOS and capped fees. The fees will fall, reflecting the real cost of electronic transactions, to 5c or less (from around $0.20). Quite a fall. This is a reasonable thing... electronic transactions are meant to be frictionless, it is quite ridiculous to be promoting electronic banking on one hand and charging over the top for it on the other. Whilst normally competitive pressure would see it come down anyway, in fact a virtual cartel of banks has kept it high. You can guess their motives.

Apple's strategy defined - a little

Apple has finally moved to show its hand - a little. CNET reports new iPods, at last, push the boundaries a little but mostly play catch-up with the market. Bigger capacity, funkier colours. iTunes gets Disney movies. And iTV promises a method of streaming PC video wirelessly to TVs. It's a home-based play, sure - and in line with the iPod consumer strategy - that bridges the PC to the TV. Whilst it makes sense it hardly shatters our perceptions. There must be more, surely?

Thursday, September 07, 2006

Telstra and strategy

What a case study... start with a huge public service monopoly (the Post Master General or PMG) and split it into 2: Australia Post and Telecom (roughly 1976 or so?). Start cutting staff... reorganise... reshuffle .... sell excess property... trim it down and increase the potential for a high ROI. Rebrand the sexy IT bit - Telecom - as Telstra and sell it off to investors large and small. OK, the first tranche went well, so sell off some more at a higher price. Now smart investors new that threats like DSL and VoIP were already here but that didn't stop the less informed paying that over-the-top price. Oooops. Since then it's been going down... lots of competition, share price falling... so bring in a US exec with a proven record and... well it's been quite a ride. Here's a Forbes interview with Sol Trujillo for that US perspective. Then get busy writing that essay!