Thursday, May 20, 2010

Growth through Focus: A Blueprint for Driving Profitable Expansion
Rather than seek increased revenues and profits by expanding products and markets, companies should follow a seven-step strategy for achieving more with less.

by Sanjay Khosla and Mohanbir Sawhney

This is a fabulous article that offers a great approach to growth. It is completely consistent with the processes we have talked about and offers an excellent case study. The following chart highlights their approach but I STRONGLY urge you read the full article. I feel so strongly about it that we will include it as part of our Driving Organic Growth Executive Ed. class at the Kellogg School.

Tuesday, May 11, 2010

Steve Jobs Escalates Fight With Adobe
WSJ, APRIL 30, 2010


As we have come to learn, it is not just the quality of Apple’s products that creates enormous wealth for the company and its stockholders, but control of the system platforms that drives the i-devices. This is a classic fight of protecting this system not just the products. This battle not only impacts the respective parties but the end user –the consumer—and all suppliers.

"Apple Inc. Chief Executive Steve Jobs escalated his fight with Adobe Systems Inc. over the software known as Flash, a battle that could shape the evolution of video and gaming on mobile devices......
....."Flash was created during the PC era—for PCs and mice," Mr. Jobs wrote in an essay totaling more than 1,600 words. "The mobile era is about low power devices, touch interfaces and open Web standards—all areas where Flash falls short." ......
.....Adobe CEO Shantanu Narayen fired back in an interview with The Wall Street Journal, disputing Mr. Jobs's assertions about shortcomings in Flash. That is a "smoke screen," he argued, for Apple's plan to keep its own lock over software development for its mobile devices. "It's clear that it has nothing to do with technology," he said.....
......Media companies and advertisers have privately expressed frustration about Apple's stance toward Flash because their online video and other Web content incorporates Flash. Adobe, meanwhile, has said it will try to work closely with Google Inc. to popularize Flash on phones using Google's Android system.
Another factor is a new version of Adobe's Creative Suite software, which includes tools for using Flash to build iPhone apps. Just before Adobe formally unveiled the software, Apple changed the terms of use for its App Store to forbid apps written with the new software.

Tuesday, May 04, 2010

Starbucks Mounts Major Grocery Push
WSJ APRIL 30, 2010


I think this is a very interesting example of brand extension and all the issues involved.

"Starbucks is rolling out Via instant coffee—so far sold only in its own shops and a couple of retail chains—to tens of thousands of supermarkets, mass merchandisers and other outlets in coming weeks. The product's migration from coffee counter to grocery aisle reflects one of the food industry's hottest trends: putting more restaurant brands like California Pizza Kitchen and P.F. Chang's China Bistro into grocery aisles.....

..."It's an intriguing question how far Starbucks the coffee shop can morph into Starbucks the brand," said Sharon Zackfia, an analyst who follows the company for William Blair & Co. in Chicago. The strategy "bears some risk. And Howard does strike out sometimes. But he also hits home runs," she said. Ms. Zackfia owns some Starbucks stock.
(a relatively highly risk venture that suggests the current Starbucks model has limited growth potential)

,,,But Via will have to prove itself in the grocery aisles. Its debut in Starbucks coffee shops last fall helped reverse a year-long string of same-store sales declines at the company. But that success also reflected an aggressive push from baristas inside Starbucks coffee shops, where the company handed out samples and staged taste tests....
Without that advantage inside supermarkets, Starbucks plans to distribute coupons, purchase in-store displays and hire people to hand out samples. It will also unleash a larger television and print advertising campaign than what it launched amid Via's coffee-shop debut last autumn
.(issues of marketing in the new market segment)....

(What you do yourself vs. forming alliances to handle very new challenges is critical) In selling Via out of supermarkets, Starbucks faces a new challenge. To sell its coffee beans and bottled frappuccinos out of grocery stores, it struck up joint ventures with well-established consumer-goods brands: Kraft Foods Inc. and PepsiCo. But for Via it is acting as its own distributor, a strategy that could backfire if it fails to adequately manage supply and demand.
But Mr. Schultz says Starbucks has built the infrastructure to handle that distribution. And analysts note that the strategy could leave Starbucks with a greater share of profits.
(unproven territory)"