Would Michael Porter sleep in this bed?

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Michael Porter is arguably the world’s most famous management theorist. His theories such as the 5 forces model and Value Chain Analysis are key parts of the syllabus for several ACCA and CIMA papers.

His generic strategy approach of “differentiation” and “cost leadership” has been around for a number of years and whilst there is a clear argument that a significant proportion of companies are nowadays trying to combine both approaches by aiming to differentiate the product or service whilst at the same time focusing on cost reduction, there is one particular segment of the hotel market that almost certainly has to differentiate to survive.

The boutique hotel segment inherently struggles to compete with the big national and international chains of hotels on the cost leadership approach (these bigger hotel chains will have significant economies of scale for example).

Instead, they will need to be “different” in terms of for example location or “friendliness”.

When it comes to differentiation, the aptly named Jumbo Stay Hotel will be hard to beat for people that are keen on airlines.

Located on a disused runway at Stockholm Arlanda airport, the Hotel is in fact an old Jumbo jet that that has been converted into a luxury hotel. The Jumbo Jet hotel has 27 bedrooms with 76 beds but the best room has to be cockpit which has now been made into a luxury suite with panoramic views of the airport.

The upper deck of the plane which used to house business class passengers is now a cafe serving fresh food and drinks.

We’ve blogged before about Ryan Air’s cost leadership approach to their flights and it’s nice to see a differentiation approach to another part of the airline industry.

Not the best way to start a presentation…

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The IT guys I’ve met in my career have all been very nice people. Admittedly they all seem to be slightly mad and do tend to talk in a strange language with lots of mentions of “coding this and coding that”.

To be fair though they all probably think I’m slightly mad when I talk to fellow finance people in my strange language about “SOCI this and SOFP that”.

If you talk to your IT colleagues though one thing that they tend to take very seriously is the level of security.

Now whilst there are lots of higher level security precautions present such as firewalls and anti-virus programmes there are also some more simple precautions that you should take.

Memory sticks (or USB or flash drives as they are sometime known) can all contain confidential documents and most memory sticks are not password protected.

It pays to double check what’s on the memory stick you’re carrying around with you in case it contains confidential documents and you lose it.

In a similar vein it’s always worth checking what other files are on your flash drive if you’re about to make a presentation.

Unfortunately for Father Martin McVeigh, a Catholic priest in Northern Ireland, he didn’t check what other files were on the flash drive he was going to use when he recently did a presentation to some parents of children at a local primary school.

According to media reports, whilst loading up his presentation for the parents, Father McVeigh inadvertently showed a slideshow of indecent pornographic images onto a screen.

The x-rated slideshow was on the memory stick that Father McVeigh had put into the computer to load up his intended presentation.

Father McVeigh was understandably a bit shocked at seeing the naked pictures on the screen (although to be fair probably not as shocked as the parents in the audience were) and according to the BBC website he was “visibly shaken” and “bolted out of the room”.

He later stated that he didn’t know how the images got onto the memory stick.

And the morale of the story?

Well, I guess that IT security is not just the higher level technical areas but also the more simple areas such as making sure you know what else is on your memory stick…

Would a pizza encourage you to get a vasectomy…

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Companies often offer incentives to encourage people to sign up for their products or services.

BOGOF is a term that’s well known in marketing circles.

It stands for “Buy One Get One Free” and as the phrase implies it is a sales promotion encouraging people to buy a product or service. If they pay for one they’ll get the other one free.

In a somewhat unusual approach to promoting a particular service, a doctor in Massachusetts in America is currently offering a free pizza with every vasectomy.

Now, call me old fashioned but the decision as to whether or not you get a vasectomy should in my opinion be driven by other factors other than the offer of a free Spicy Meat Feast Deep Pan Pizza.

Evan Cohen, the manager of Urology Associates who are offering the promotion was quoted as saying that March is the most popular month for vasectomy operations.

Apparently the Spring weather offers a more comfortable recovery period than other months and also for sports lovers March has what is known as “March Madness” when the NCAA’s college basketball tournament takes place. This tournament features 68 basketball games on television throughout the day and evening for most of March.

So, there you go. Who needs a BOGOF promotion as what better incentive can there be to have a vasectomy done that sitting at home with your feet up watching basketball and eating a free pizza??

The TV commercial by Urology Associates advertising the free pizza offer is below.

How would you start the biggest advertising agency in the world?

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What have the Olympics, The European Football Championships and the American presidential elections got in common?

Well, if you’re WPP, the world’s largest advertising and marketing group then they are all hopefully going to make it a bumper year for profits.

The WPP Group make a fascinating case study.

On Thursday they released their results for 2011 and they were pretty spectacular.

Pre tax profits in 2011 were 18% higher than the previous year and broke the £1 billion mark for the first time. Revenue also increased by a healthy 5% to exceed the £10 billion level.

2012 is also expected to be a good year for them as “high spending advertising events” such as the Olympics and the US presidential race are all taking place this year. 2013 could be more of a challenge for the company though as there aren’t any of these big spend events on the horizon.

So, WPP are the largest advertising group in the world in terms of revenue and they’ve got an interesting history.

The name WPP originates from “Wire and Plastic Products” which was a UK manufacturer of wire baskets and was nothing to do with advertising.

Back in the 1980s a gentleman by the name of Martin Sorrel (now Sir Martin Sorrel,) who was previously the Finance Director of advertising agency Saatchi & Saatchi, was looking for a listed company to use as a vehicle through which to build a worldwide marketing services company.

He invested in the “Wire and Plastics Products” company but had no intention of owning a wire basket manufacturing company.

No, instead he used it as a vehicle to buy up companies in the advertising field to create a global powerhouse in terms of advertising groups

As the picture above shows, there are numerous brands within the current WPP group and these include some of the world’s largest firms in the areas of advertising such as JWT, Ogilvy Group and Young & Rubicam.

So, there you go. Buy a company that makes wire baskets and you could end up running the largest advertising agency group in the world.

Underwear: should you wear them or name yourself after them?

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Tonga is a beautiful island in the South Pacific. They have great beaches and lovely weather but what they don’t have are a lot of are icy mountains with toboggan runs.

That hasn’t stopped Tongan Bruno Banani from becoming a pretty successful luger and he recently entered the luge World Championships in Altenberg, Germany.

The interesting twist to this story though is that Bruno was born Fuahea Semi but then changed his name to Bruno Banini.

So why did he change his name?

Well it just so happens that Bruno Banini is also the name of a leading men’s underwear company in Germany and they sponsor Bruno (or Fuahea as he was originally known).

A classic guerrilla or ambush marketing stunt.

Change your name to that of your sponsor so that Bruno Banini (the underwear company) doesn’t have to pay for official sponsorship at events as they are hoping that Bruno Banini (the individual) will do well at an event and get lots of mentions in the press.

Bruno, or “Pants” as he’s probably known to his friends, is hoping to enter the 2014 winter Olympics in Russia and it raises some interesting challenges for the Olympic authorities as they want to avoid any ambush marketing.

Olympic Committee Vice President Thomas Bach was asked about Pants changing his name from Fuahea Semi to Bruno Banini and called it a “perverse marketing idea.”

An interesting challenge for the Olympics as if he has legally changed his name it will be difficult for them to block it.

On a different subject though I should mention that if anyone from Ferrari is reading this I am prepared to change my name to Red Ferrari…

Is it better to be loyal or disloyal?

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We’ve all heard of the big coffee chains such as Starbucks and Costa Coffee and with their growth over recent years it’s become more and more difficult for the smaller independent coffee shops to compete.

Over in Singapore though a novel approach to competing with these “coffee shop big boys” has just been introduced.

Lots of businesses have a “loyalty card” programme whereby people earn various points each time they spend money with a company. They can then use these points to buy various items with the company.

The giant Tesco supermarket chain for example has one of the largest loyalty card schemes in the UK whereby “Tesco points” can be used to purchase Tesco products. Most international airlines also have loyalty programmes such as Sky team and Star Alliance where the points earned can be exchanged for free flights.

Antic Studios, a creative agency in Singapore has just come up with a new concept and it’s a “disloyalty card”.

The aim is to help a group of 8 smaller independent coffee shops in Singapore develop.

The idea is that an individual picks up a disloyalty card at one of the independent coffee shops. If they then visit the other 7 independent shops they get their card stamped and can then return to the original coffee shop to claim their free drink.

It’s a novel way of smaller companies who are in effect in competition with each other joining together to create awareness of themselves and encouraging people to try them out instead of staying with the big guys.

Smaller competitors working together to create stronger competition against the big coffee chains – a nice idea and well worth discussing over a cup of coffee.

Does $300m mean bigger is better?

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Here’s an interesting development. MP3 players such as the iPod Nano are getting smaller and smaller but due to advances in technology the sounds that they emit are getting better and better.

Whilst music fans are appreciating the portability of the smaller MP3 players together with the flexibility of having quality music players on their phones there’s a trend at the moment of the headphones getting bigger and bigger.

It used to be bigger players and smaller headphones but now it’s the other way around.

As is often the case it’s the fashion conscious younger generation that are driving the change.

HMV, the UK chain of music shops where people used to flock to to buy the latest CDs has unsurprisingly seem a dramatic drop in sales of CDs as more and more people are now buying their music online via Apple iTunes for example.

There is some short term hope for HMV though at least in terms of their sales of headphones and it’s been reported that their sales from headphones and other technology will shortly exceed their sales of CDs and DVDs.

Now these headphones aren’t cheap. Some of the better known high end headphone brands such as Dr Dre go for in excess of £350. That’s quite a lot when you consider the iPod Nano that the headphones could be plugged into retails for less than £100.

Manufacturers have started to segment the market nicely for headphones with for example the Bob Marley Reggae inspired “House of Marley” headphone range recently being launched by Bob Marley’s son Julian.

So, what’s next on the horizon in the business world when it comes to headphones?

I mentioned one of the best known brands of headphones Dr Dre earlier and you’ve no doubt heard of HTC which offer very good Smartphones and are in competition to Apple and their iPhone.

Well, earlier this summer HTC paid $300 million for 51% of a US company called Beats Electronics. What’s the main brand that Beats Electronics has? Yep, none other than Dr Dre.

This could be quite a smart move by HTC.

They are building up their technology and design on the Smartphone side of things and by buying Dr Dre they are getting a sudden jump up in headphone technology.

Will this be the sweet sound of success for HTC?

I don’t think your customers are as loyal as this one…

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A lot of companies seem to mistakenly focus most of their effort on getting new clients rather than looking after their existing ones.

Some companies are so concerned with getting new clients that they forget about their existing clients and they end up winning one new client but losing two existing ones.

The benefits of having loyal customers who undertake repeat purchases can be substantial.

I’m not sure though that many companies will have as loyal a customer as Mr Thomas Stuker.

Mr Stuker is a sales consultant and has made nearly 6,000 flights with United Airlines.

To put that into perspective he’s accumulated 10 million air miles with them and has flown the equivalent of 400 times around the world.

To say he is a frequent flyer is stating the obvious and from the airline’s point of view, assuming an average cost of $300 per flight that’s a nice $1.8 million dollars revenue as a result of his flights.

Now United Airlines understandably appreciate his custom and when he reached the 10 million mile landmark the airline announced that they were going to name one of their planes after him and award him free upgrades for life.

Anyone who flies a lot will appreciate that you can accumulate “airmiles” with airlines as part of their loyalty programmes.

United Airlines are part of the Star Alliance mileage programme so Mr Stuker will no doubt be excitedly looking forward to some free flights for him and his family as a result of the 10 million miles he’s accumulated.

Then again, after flying the equivalent of 400 times around the world with his job he may well prefer to take his next holiday at home…

Was this as easy as 1,2,… (now what was the next one)?

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There’s a well known technique in public speaking of batching topics in groups of three.

The general idea is that it helps with the flow of the presentation and it’s easier for the audience to remember.

Unfortunately for US presidential hopeful Rick Perry, three topics were one too many when he spoke last night at the live presidential nomination debate for the US Republican candidate.

The speakers at the debate were all candidates to lead the Republican Party in next year’s US Presidential election against President Obama.

Mr Perry was in the process of listing the three US government departments he would abolish if he was elected president when he forgot what the third one would be.

His exact words were:

“I will tell you: It’s three agencies of government, when I get there, that are gone: Commerce, Education and the….. what’s the third one there? Let’s see….. OK. So Commerce, Education and the…..the third agency of government I would…..I would do away with the Education, the….. Commerce and…..let’s see….. I can’t. The third one, I can’t. Sorry. Oops.”

Now, we all make mistakes at one stage or another when speaking in public so is this really something for Mr Perry to worry about?

After all, the debates are only seen as one of the key deciders in whether somebody will win the nomination or not and they were only seen live on primetime TV across America. The press and TV in American are also only talking about it all the time.

Now, any of you studying professional exams will appreciate that two out of three is 66.67% and I’m sure that if you got 67% in your exams you’d see that as a success.

A potential future president of America only being able to remember 2 out of 3 of his proposed policies though probably isn’t so good.

The video of Mr Perry’s performance can be found here and get ready to cringe with embarrassment.

Surely this is the best “out of office notification” ever?

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I recently visited Cardiff for a few days of work. Cardiff is the capital of Wales and one thing you notice as soon as you enter Wales is that the road signs are written in both English and Welsh.

This reminded me of a production error which was reported a while ago which to me must rank as one of the funniest results of an out of office notification.

If used properly the out of office notification is a great tool as it lets the sender of the message know if you’re away for a while and who to contact in your absence.

The error here though involved Swansea Council in Wales who required a road sign saying:

“No entry for heavy goods vehicles. Residential site only”

They emailed their in-house translation service with a request for a translation of this phrase into Welsh and a reply came back with:

“Nid wyf yn y swyddfa ar hyn o bryd. Anfonwch unrhyw waith i’w gyfieithu”

They then produced the sign with both the English and Welsh text on it and put it in the required place by the side of the road.

It was a while later that some Welsh speakers noticed the road sign and it turned out that instead of telling drivers of heavy goods vehicles that they couldn’t drive down that particular road the Welsh text on the road sign actually said:

“I am not in the office at the moment. Send any work to be translated”