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jerryking : cost-consciousness   12

Business leaders are blinded by industry boundaries
April 22, 2019 | Financial Times | Rita McGrath.

Why is it so hard for executives to anticipate the major shifts that can determine the destiny of their organisations? Andy Grove called these moments “strategic inflection points”. For some, he wrote, “That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

Industry leaders would do well to focus on productive opportunities, even when they lie outside a fairly well-bounded industry. Want to survive a strategic inflection point? Stop focusing on traditional metrics and find new customer needs that your organisation can uniquely address.

Why do business leaders so often miss these shifts? Successful companies such as BlackBerry maker Research In Motion and Nokia did not heed the early signs of a move to app-based smartphones. Video rental chain Blockbuster failed to acquire Netflix when it had the chance, in 2000.

Senior people rise to the top by mastering management of the KPIs in that sector. This, in turn, shapes how they look at the world. The problem is a strategic inflection point can occur and render the reference points they have developed obsolete. Take traditional retail. Its key metrics have to do with limited real estate, such as sales per square metre. Introduce the internet and those measures are useless. And yet traditional systems, rewards and measures are all built around them.....British economist Edith Penrose grasped this crucial link, she asked, “What is an industry?” In her studies, executives did not confine themselves to single industries, they expanded into any market where their business might find profitable growth.

Consider the energy sector: Historically, most power generators and utilities were heavily regulated...The sector’s suppliers likewise expected steady demand and a quiet life....that business has been rocked by slow-moving shifts many players talked about, but did not act upon. The rise of distributed energy generation, the maturing of renewable technology, increased conservation and new rules have eroded the traditional model. Many failed to heed the warnings. In 2015, General Electric spent about $10bn to acquire Alstom’s power business. Finance chief Jeff Bornstein crowed at the time that it could be GE’s best acquisition ever. Blinded by traditional metrics, GE doubled down on fossil-fuel-fired turbines just as renewables were becoming cost competitive.

Consider razor blades: Procter & Gamble’s Gillette brand of razors had long enjoyed a competitive advantage. For decades, the company had invested in developing premium products, charged premium prices, invested heavily in marketing and used its clout to get those razors into every traditional retail outlet. A new breed of online rivals such as Dollar Shave Club and Harry’s have upended that model, reselling outsourced razors that were “good enough” and cheaper, online via a subscription model that attracted younger, economically pressured customers...... Rather than fork out for elaborate marketing, the upstarts enlisted YouTube and Facebook influencers to get the word out.
Andy_Grove  BlackBerry  blindsided  Blockbuster  brands  cost-consciousness  customer_insights  Dollar_Shave_Club  executive_management  GE  Gillette  good_enough  Harry's  industries  industry_boundaries  inflection_points  Intel  irrelevance  KPIs  metrics  millennials  movingonup  myopic  obsolescence  out-of-the-box  P&G  power_generation  retailers  reward_systems  sales_per_square_foot  shifting_tastes  slowly_moving  warning_signs 
april 2019 by jerryking
Diversification key for mall developers as retail landscape evolves
Feb. 7, 2017 | Retail Dive | by Kenneth A. Rosen and Eric S. Chafetz.

Traditional anchors like Sears/Kmart and Macy’s are beset by competition from all sides, from freestanding big-box outlets (think Home Depot and Bed Bath & Beyond), to stores attracting fashion-forward yet price-conscious consumers (Target and Kohl’s) to mounting online competition from Amazon and others.

This is leading to the loss of mall tenants, especially anchor tenants, which are major drivers of all-important foot traffic.....Mall owners are (or should be) rethinking the very definition of a mall. New tenants such as high-end restaurants, amusement parks, spas, health clubs, online pickup locations at traditional retailers and upscale movie theaters increasingly are essential components........Reshaping malls into mixed-used developments might run counter to a business model that worked for decades, where mall owners and developers could simply be mall owners and developers. However, these entities must realize that the need for new thinking and investment in new types of amenities and features is greater than ever to drive foot traffic......Technology is also key, with some mall owners now allowing customers to text them questions and get real-time answers. Other malls have implemented mobile apps to provide turn-by-turn navigation from store-to-store in a mall and directions to their parked cars. ........Consider a successful shopping center developer, in this case seeking opportunities for growth. The developer might look to acquire store leases at malls owned by competitors where an anchor has closed and redevelop the space into a cluster of smaller stores or into a mixed-use property (restaurants, movie theaters, urgent care centers, spas, etc.)......The transformation of malls will continue, and usher in changes that would have been unfathomable a decade ago. Last year, two mall owners — Simon Properties and General Growth Partners — teamed up with Authentic Brands and a few inventory liquidators to purchase hundreds of Aeropostale stores out of bankruptcy. The justification from the mall owners was that they were not merely trying to save a tenant, but based on the bargain basement price that they paid, believed they could make a profit. As 2017 unfolds with the expectation of additional retail Chapter 11s and store closures, mall developers and owners also may look at their competitors with an eye toward new opportunities.
diversification  redevelopments  shopping_malls  REITs  department_stores  big-box  cost-consciousness  e-commerce  Amazon  foot_traffic  reinvention  competitive_landscape  mapping  retailers  store_closings  offensive_tactics  transformational 
august 2017 by jerryking
Unlikely expansion: When retail brands go wholesale -
Apr. 16 2013 | The Globe and Mail | MARINA STRAUSS - RETAILING REPORTER.

Aldo Group Inc. is on the hunt for retail space – inside the stores of other retailers, as the shoe specialist pursues a cost-conscious expansion in which it is teaming up with a growing roster of indirect rivals.

Merchants ranging from Aldo to fashion purveyor Joe Fresh (owned by grocery giant Loblaw Cos. Ltd.), Reitmans (Canada) Ltd. and Hudson’s Bay Co., have stepped up their partnering efforts, even as they raise the stakes by being tied to sometimes unstable chains....multichannel distribution allows rapid expansion into new markets without the expense or time needed to open new stores....Retailers are trying to cash in on brand awareness and production expertise to reach more customers in a cost-savvy way. But the business model isn’t without drawbacks, as merchants lose some control over the placement, prominence and marketing of their products....For years, in a reverse trend, manufacturers – from Nine West to Apple – have set up their own standalone stores to showcase their products and ensure their brands are not lost among many others within a larger retailer.

“Retailers want to be wholesalers and wholesalers want to be retailers,” Mr. Lichtszral said. “The lines are blurred everywhere … Wholesale distributors are opening their own websites and shipping directly to the consumer and, in doing that, are technically competing with their retail customers.”
growth  retailers  brands  distribution_channels  Aldo  Loblaws  Nine_West  Apple  wholesalers  multichannel  omnichannel  Joe_Fresh  partnerships  Reitmans  HBC  business_models  drawbacks  merchandising  manufacturers  expansions  store_within_a_store  cost-consciousness  Marina_Strauss  standalone  Fortune_500 
may 2013 by jerryking
UNPRECEDENTED VOLATILITY A HALLMARK OF AGRICULTURE’S NEW AGE
* Have a plan for the future – perhaps a surprise to some, but many farmers don’t have a plan in place that paints a vision for where they want to take their operation over the next 2, 5 and 10 years.
• Have credit in place before it is actually required – it is human nature to leave things to the last minute.
• Implement a sound hedging strategy – in addition to the system of crop insurance in place in this country, there are many ways that Canadian farmers can take actions to manage their risk. Diversifying into new businesses is one example.
• Well-managed risk can pay off – at the same time, taking on some risk that is prudent and ts the risk pro le of the farming operation can pay off handsomely for farmers. In such a volatile and fast paced environment, there are bound to be some buying and selling opportunities that open up. Knowing when to take advantage of them can separate successful farms with those that muddle along.
• Know your costs – many producers have a good sense of how their top line is performing. But it is just as impor-tant to have a good understanding of the cost side of the equation.
• Maintain adequate liquidity and reasonable leverage – in order to mitigate the risks associated with increasing asset prices, it would be prudent for farmers to ensure that they have sufficient liquidity and manageable leverage if they are expanding.
• Use reasonable interest rate assumptions in assessing investment opportunities – even though borrowing costs are unusually low, farmers must be mindful of the fact that this low-rate environment won’t last forever.
agriculture  uncertainty  volatility  farming  liquidity  leverage  hedging  futures_contracts  diversification  new_businesses  risks  risk-management  risk-taking  OPMA  WaudWare  interest_rates  vision  long-term  never_forever  business_planning  credit  costs  anticipating  risk-mitigation  low-interest  cost-consciousness 
may 2012 by jerryking
The economics of working out - The Globe and Mail
PREET BANERJEE
Globe and Mail Update
Published Tuesday, Aug. 23, 2011
exercise  fitness  gyms  economics  workouts  cost-consciousness 
august 2011 by jerryking
What Knockoffs Can Teach Companies About Chinese Markets | Co.Design
Sep 8, 2010 | Fast Company | by Makiko Taniguchi & Eddie
Wu. Fakes and knockoffs often express unmet desires that big firms miss.
Learn from them...Countries, from the U.S. to Japan, regularly accuse
China of copying designs. Indeed,MNCs in these countries spend an
inordinate amount of time and money trying to prevent their products
from being copied. But Shanzhai -- "copycat" design --represents a vast
business opportunity. Shanzhai is an open platform for grassroots
innovation: Apple, Nokia, and Samsung smartphones get copied, but the
knockoffs adapt the original designs in ways that appeal to Chinese
customers. E.g., Shanzhai designers might add a flashlight, key in areas
with unstable electricity. The effect is to make products accessible to
common folks in terms of price, aesthetics, values, and needs. Shanzhai
designs are an opportunity for international companies to introduce
Chinese consumers to their brands, and then observe how local Chinese
culture adapts their offerings.
counterfeits  China  customer_insights  discoveries  pattern_recognition  ideo  opportunities  innovation  design  adaptability  patterns  copycats  unarticulated_desires  Bottom_of_the_Pyramid  emerging_markets  brands  multinationals  aesthetics  knockoffs  creative_appropriation  cost-consciousness  low-income  affordability 
september 2010 by jerryking
Dollarama aims to keep it simple
Aug. 11, 2010 | The Globe and Mail | Marina Strauss Retailing Reporter
Marina_Strauss  retailers  Dollarama  immigrants  cost-consciousness  low-income 
august 2010 by jerryking
Consumers Can Still Spot Value in a Crisis - WSJ.com
MARCH 11, 2009 | The Wall Street Journal | by AMAR BHIDé.
Buying something new requires taking risks. Realizing the economic value
of most innovations requires consumers to engage in resourceful and
time-consuming problem-solving.
Amar_Bhidé  prosperity  consumers  value  problem_solving  cost-consciousness 
march 2009 by jerryking
InfoViewer: A venture born of ignorance
20-Dec-2005 Financial Times articel by Andrew Ward describing the path of entrepreneur Roger Andresen.
* Be prepared for hard work and high risk:
* Turn to friends and contacts for help:
* Control spending:
* Test your product before entering full-scale production:
entrepreneur  tips  perseverance  prototyping  networks  high-risk  Communicating_&_Connecting  cost-controls  hard_work  cost-consciousness 
february 2009 by jerryking
reportonbusiness.com: Gimme much more
April 25, 2008 G&M column by DOUG STEINER

We all want more information about everything. Yet we often can't get the precious data we need to make good financial decisions, or we don't bother. ...."ANALYZE BEFORE YOU INVEST." We agreed that we didn't heed that advice often enough. But to ABYI, you need hard data, and few companies have ever been eager to disclose it......In 1930's Ontario, companies were only required to table their financial results at their annual meeting, so managers held the meeting in an out-of-the-way place. In 1945, the Ontario Securities Act finally required any company selling shares to the public to provide full and plain disclosure of key financial information in its prospectus.

It wasn't until 1958 that Ontario required companies to file prompt reports of any "material change" in their business. Insider trading on the basis of information not available to the public wasn't outlawed until 1966.....regulators only enforce rules or draw up new ones after problems arise. To act pre-emptively would be hellishly unproductive, and might prompt companies and capital markets to move elsewhere........Better disclosure can help both investors and executives....Even without disclosure rules, you can dig up lots of information about the executives of companies in your portfolio. Last year, U.S. academics David Yermack and Crocker Liu published a study that compared the size and prices of houses bought by CEOs with their companies' share prices. The duo used the excellent U.S. real estate site Zillow.com and other public sources to gather data. On average, the bigger and pricier the home purchased, the worse the subsequent share price performance.

I like to invest in companies where I know the senior managers, and I'm lucky to know many of them. In some cases, much of the information about their character appears in the media. I prefer executives who don't have big photos in their offices of themselves with politicians and other notables. I like CEOs who drive older cars, work all the time and have no hobbies. Boring, focused and cheap.
data  Doug_Steiner  disclosure  '30s  insider_trading  CEOs  mundane  prospectuses  cost-consciousness  focus  unglamorous  boring  investors 
february 2009 by jerryking

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