For the first time their quarterly sales exceeded $20 billion. In my opinion though the really impressive thing about the published figures was their cash balance.
They have total cash and marketable securities (stocks and shares, etc that can be readily converted to cash) amounting to a staggering $51 billion.
To put this amount of money in perspective, if they took their cash and put it in an empty company and then listed this “cash only company” on the London Stock Exchange, it would not only make it into the FTSE 100 but the “Apple cash company” would in fact be the 18th largest company quoted on the London Stock Exchange!
The blog entry here provides some thoughts on what else Apple could do with their cash if they decided to go on a shopping trip.
One of the growth areas of Apple can be found within their Apps business. Apps are “applications” (in effect software to use on their devices). 3 billion apps were downloaded in the first 18 months after their launch.
Apple has a very slick and professional marketing strategy.
Apple’s iPhone adverts such as the one below famously state “There’s an app for that” and finish with “There’s an app for just about anything”.
As well as having a very creative approach to their advertising Apple has also taken a very commercial and sensible approach to matters.
Last week the phrase “There’s an app for that” was officially classified as a trademark of Apple.
This means they will be able to prevent competitors benefiting from the phrase.
It will probably result in adverts such as the one below by US network carrier Verizon being prohibited. Verizon parodied it’s competitor A&T (a carrier for the iPhone in the US) with this “There’s a map for that” advert.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-10-22 04:19:582010-10-22 04:19:58According to Apple there’s an App for...something that I shouldn't say...
On Tuesday, Microsoft were due to launch their much anticipated Windows 7 phone system. The launch event was scheduled to take place in New York with a start time of 3.30pm.
“Joe O” works for the electronics firm LG who were one of a number of phone companies that were expected to launch Windows 7 phones to coincide with the Microsoft event.
The phone companies however were under strict instructions not to announce anything until after Microsoft’s big launch.
Alas, poor Joe who is based in the UK made a slight mistake when he thought the launch time was 3.30pm UK time rather than 3.30pm New York time. The end result was that LG’s official UK blog revealed details of the phone and what it was capable of doing under the new Microsoft system some 5 hours before Microsoft started the official event.
The error was spotted by LG pretty quickly and the post was withdrawn but it was too late as it had already been picked up by a number of other websites.
Now, picture the scene. You’re part of a project team that has been working on a major project for some time. The “partner” to your company on this project is none other than the mighty Microsoft. The world’s press are anxiously awaiting the launch event and then you press a button which releases the news to the world some 5 hours early.
What would you do?
No, honestly, what would you do?
Deny it? Blame it on somebody else? Say it was a technical error?
Joe did the honourable thing and posted the following on the LG blog:
Yes, that early slip may have been my fault, I may have failed to notice the time zone was EDT, not BST, but let’s not kick a man when he’s down. And I was down, literally hiding under my desk ignoring my constantly ringing phone.
Please consider this my public confession… And remember “to err is human; to forgive divine”.
Showing that Joe has a good sense of humour he also posted the following animated GIF on the blog.
In today’s ever increasing global business environment this is a useful reminder that it’s important to remember the more simple areas of international business.
We all make mistakes though and well done to Joe for his excellent recovery!
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-10-15 01:50:382010-10-15 01:50:38We all make mistakes at work and I know you shouldn't laugh but...
According to dictionary.com the definition of a U-turn is
1. a U -shaped turn made by a vehicle so as to head in the opposite direction from its original course.
2. a reversal of policy, tactics, or the like, resembling such a maneuver.
For anyone that’s looking for a current example of a branding u-turn then I’d recommend looking at what has happened since the US clothing and accessories retailer GAP introduced their new logo last week.
GAP Inc, which was founded in 1969 in San Francisco, is home to a number of brands including Old Navy and Banana Republic. Their most famous brand though is that of GAP itself.
GAP has approximately 3,100 stores around the world and last year had revenue of nearly $15 billion.
They are a great brand and their “blue box logo” (shown above on the GAP shopping bag) is one of the best known logos in the fashion world.
They decided however to change the logo and introduced the new logo shown below. Now, what do you think of the new logo? Which one do you prefer – the original one or the new one?
Personally I think that the new one looks as though it would be more suited to a high tech or consultancy company. The original one seems to better match their concept of clothing being laid back and traditional.
Following the launch of the new logo last week there was uproar on social media sites such as Twitter and Facebook with people demanding that the old logo be brought back.
The upshot is that on Monday GAP released a press release where they announced that the new logo would be withdrawn and the previous one reinstated.
In the words of the President of GAP Brand North America there was “an outpouring of comments from customers and the online community in support of the iconic blue box logo.”
A decision was therefore made not to use the new logo but to revert back to the previous one.
Was this a company listening to its customers and giving them what they wanted or was it a company that didn’t speak to their customers enough before making the change? There will be arguments both ways.
We shouldn’t forget the cost of this u-turn.
There would have course have been the fee GAP paid to their branding agency (probably ex-branding agency now). A quick straw poll in the office felt that the fee paid for this particular design should have been in the region of £10.
There would also have been the costs of redesigned packaging and signage with the new (now old) logo on it plus of course all the management time.
They say that “there’s no such thing as bad publicity”. I’m not sure GAP’s Branding agency would agree with this.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-10-13 20:27:572010-10-13 20:27:57Should you do a u-turn if you see a GAP in the market and it's out of the blue?
If an organisation can create a successful barrier to entry then it will have a great competitive advantage.
In simple terms, a barrier to entry can prevent competitors entering the market.
We’ve blogged before about a good example of a barrier in the Indian telecommunication market but a recent attempt to create a barrier by Southampton Football Club in the UK was met by a truly artistic response.
Southampton FC decided that they would try to boost their income by preventing any non Southampton FC photographers from taking photos of their match with Plymouth Argyle.
This barrier meant that the only photographers present were official Southampton FC photographers and hence any photos of the match would have to be purchased from the official agency. A nice revenue source for the club.
Ignoring the rights and wrongs of this in terms of impact on other clubs and setting a precedent, this is indeed a pretty tough barrier to overcome.
Understandably upset at having to pay for photos of their local team, the Plymouth Herald newspaper approached well known local artist Chris Robinson.
Chris watched the match on television and then drew “comic strip style” pictures of the football action which were then published in the paper instead of photos.
As you can see, the results were pretty impressive.
It also resulted in a pretty unusual answer to the question of “How do you overcome a barrier to entry”.
The answer now includes, “Draw some cartoons”.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-10-11 08:32:482010-10-11 08:32:48Get out your sketch pad if you want to overcome a barrier...
First of all, the ability to release their figures within 3 working days of the end of the quarter was in itself no mean feat.
The figures themselves were also very good with group sales up by 6.5% and all the major divisions showing impressive growth. So, how have they managed this? After all, although we’re coming to the end of the recession people are still being careful about money.
According to Marc Bolland, the Chief Executive of M&S, “Customers are returning to quality. In Food they are responding well to our better value and innovation, and in Clothing are increasingly choosing M&S’s great fashions and quality that lasts.”
On the ladies side of things the success of the “Wonderbra phenomenon” has been well documented since they were introduced in the 1990s but in the words of M&S the Bodymax enhancement pants for men have a number of advantages.
The “frontal enhancement pants” are “specifically designed to visibly enhance your shape” and the “bum lift pants” are said to “lift and shape your buttocks for a visibly sculpted look”.
Mr Bolland also said that there had been “a positive response to increased investment in marketing”. It will be interesting to see how they market the enhancement pants.
Now, you’re possibly thinking what sort of person would buy these enhancement pants? You may also be wondering how comfortable they are to wear.
In answer to this final point I’ll let you know as soon as my pair are delivered.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-10-08 11:46:412010-10-08 11:46:41Marks & Spencer – the figures weren't padded out but what about...
On Monday it was reported that China’s Bright Food Group was investigating the potential purchase of Britain’s United Biscuits for up to £2.5 billion.
Whilst on the face of it one food company buying another food company isn’t that exciting it does raise some interesting points.
Importantly, it also makes you think of whether Jaffa Cakes are in fact biscuits rather than cakes…
First of all though in classic Michael Porter’s Competitive Advantage of Nations terms then particular countries are considered to be strong in certain industries.
Germany for example is renowned for the production of high powered cars such as Audi, BMW and Porsche. Japan is a world leader in high tech cameras such as Canon, Nikon and Pentax.
Britain on the other hand is a powerhouse in the production of biscuits. After all, who needs luxury cars and high tech cameras when you can have a lovely cup of tea with a nice biscuit or two?
Secondly, the fact that another company from a so called emerging market is now potentially making a significant acquisition of a company in a more developed market sends an interesting signal about the current trend of globalisation.
Both these points are all very well and good but what’s this all about a biscuit or cake discussion?
United Biscuits produce some household name products including McVitie’s biscuits, Hula Hoops and Twiglets. They also produce Jaffa Cakes.
Jaffa Cakes were the subject of an infamous tax case a few years ago. To cut a long story short the debate was whether a Jaffa Cake was a cake (considered to be a basic foodstuff and hence not liable to VAT) or a chocolate covered biscuit (considered to be a luxury food product and hence liable for lots of VAT).
So, how on earth can you decide whether a food product is a cake or a biscuit?
The deciding factor was that when a cake is left to go stale it gets hard whereas when a biscuit is left to go stale it goes soft.
The argument went to a VAT tribunal (which is in effect a type of Court) and as part of the evidence put forward a 30cm Jaffa Cake was baked and left to go stale (and hard) so as to convince the tribunal that it was in fact a cake.
The final result was that Jaffa Cakes are indeed cakes so you can now have your cake and eat it (VAT free).
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-10-01 04:23:262010-10-01 04:23:26£2.5 billion but can you have your cake and eat it?
On Saturday Apple officially launched the iPhone 4 in China. They also opened up two new flagship stores in Shanghai and Beijing.
China is the world’s largest mobile market with more than 800 million subscribers so it would seem to make sense that Apple sell their products there.
Why has is taken them so long to launch the iPhone 4 in China though? After all, the iPhone 4 was originally launched in the US back in June and in countries such as Australia, Netherlands and Singapore in July.
The handsets themselves are manufactured in China so it’s not as though they haven’t had any experience of doing business in the country.
There are various reasons why companies have phased product roll outs in different countries. The sheer scale of a “global launch” for a company like Apple would be extremely challenging. Having sufficient inventory in stock on global launch day would not only be a logistical nightmare but would probably be physically impossible.
An additional challenge for Apple is that they need to agree matters with their strategic communication service providers in each territory (in other words, the mobile phone operator they will be partnering with in each particular country). This also takes time.
Anyway, from now onwards we’ll be seeing the iPhone 4 in China but anyone that has been to China recently though could be forgiven for thinking that the iPhone 4 has already been in the country for a while.
A significant issue for Apple is the increase in the number of iPhone clone companies.
As well as clone companies that produce illegal fake copies of the phone there are also businesses that produce reasonable quality phones which are very similar to the iPhone. They are designed so that they try not to break any patent protection that Apple has set up. I’m sure though that Apple’s patent lawyers are monitoring these products very closely!
A quick search on the internet for example shows websites selling products such as the HiPhone, the Ephone and the Ciphone. With prices starting at less than $100 there will be a significant number of people opting for these items.
Oh, and in case you were wondering the photo above is of the Hiphone.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-27 03:35:162010-09-27 03:35:16Do you own a iPhone or is it a Hiphone, an Ephone or a Ciphone?
Tesco, one of the leading UK supermarkets, will commence selling the erectile dysfunction drug Viagra.
Viagra has been a huge success for Pfizer. It’s one of their blockbuster drugs and millions of the little blue tablets have been sold over the last 10 years.
One of the drawbacks though for a lot of men that want the drug is where to get hold of it from. In the UK you generally need either a doctors prescription or to risk buying it from potentially suspect internet sites.
Tesco are one of the most successful supermarket chains in the world. In strategic Ansoff’s Matrix terminology they have done very well with market development (4,811 stores in 14 countries with an amazing 2,482 stores in the UK alone) together with product development (an estimated 40,000 product lines ranging from pizza to petrol to perfume).
Tesco are about to add another product line to their offerings and from next Monday shoppers will be able to pick up Viagra from over 300 Tesco stores.
As finance people we know all about the challenge of getting pricing decisions right.
Tesco are not the first mainstream chain of stores to stock Viagra. Last year, the high street chemist Boots became the first store in the UK to sell Viagra without a prescription. You can currently buy 4 of the blue pills from Boots for £55.
A price skimming or premium pricing strategy for Tesco wouldn’t really work as the Viagra market is a mature market. Tesco has instead undertaken a classic penetration pricing strategy whereby they price the product at an attractive price with the aim of growing its market share.
From Monday, you will be able to buy 8 of the blue pills at Tesco for £52.
Whilst the per tablet charge at Tesco is a lot lower than what can be found at Boots, £52 is still a significant amount of money. There’s a recession on and times are hard for a lot of people. Only time will tell whether Tesco made the correct pricing decision.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-24 20:55:512010-09-24 20:55:51Is this your shopping list: bread, milk, eggs and Viagra?
Things have changed. You won’t be hearing much about PricewaterhouseCoopers any more.
Is this breaking news? Does this mean that we will be talking about the Big 3 rather than the Big 4?
Should PricewaterhouseCoopers partners and staff be rushing to recruitment consultants to get another job?
There’s no need to panic as all is well with the company. What they have done though is undertaken a rebranding exercise.
The company has commonly been referred to as PwC since it was established via a merger back in 1998 between Price Waterhouse and Coopers & Lybrand. With effect from Monday though they will now officially go by the name of pwc.
As part of a multi-million pound make over not only will the company be known as pwc but the corporate logo and corporate colours have changed.
The new logo incorporates the letters “pwc” in lower case along with a 6 rectangle symbol in shades of orange and red.
According to pwc, the brand was refreshed “in order to strengthen, and modernise how it represents its worldwide network to its clients, its people and the communities in which it operates.”
Global brand consultants Wolff Olins designed the logo in collaboration with PwC employees and clients. The complete rebranding process reportedly took two years.
From a personal point of view, I like the new logo and orange/red spectrum colours which I think are nice fresh, clean colours.
What about people from some of the other accounting firms? My guess is that they must be relieved. With KPMG having blue/white, Ernst & Young black/yellow and Deloitte navy/green it must have been a relief all round that pwc went for orange/red.
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-22 16:41:062010-09-22 16:41:06Has the Big 4 become the Big 3?
At this year’s San Francisco World Spirits Competition the best Vodka in the world award was won by a small distillery based in rural England in Herefordshire. Chase Vodka beat off 115 other entries to win.
This is a superb achievement by them.
I’ve been lucky enough to try some of the vodka. It’s certainly very nice and I have to say I think their award was thoroughly deserved. I hasten to add though that I haven’t tasted the other 115 vodkas so can’t really give an unbiased view!
Chase vodka has got a rather unusual background. It was founded by local potato farmer William Chase. Now William certainly knows a thing or two about potatos. He was the person that founded the upmarket potato crisp company Tyrrells.
Tyrrell’s crisps were only launched 8 years ago in 2002. In classic strategy terminology they were very much promoted on the differentiated manner as being of a better class of crisp, being hand crafted and a top quality product. His passion for potatos paid off and in 2008 he sold 75% of the crisp brand for a rather tasty £40 million.
Not content with sailing the world on his personal yacht or buying a private island to retire to he built on his core competencies and developed his love of potatos into another upmarket brand but this time to be enjoyed by adults only.
Again, using strategy speak the chase vodka business is nicely vertically integrated with the potatos being grown on the farm as well as the distillery and the bottling process being in the same location.
It’s not cheap – retailing at £32.95 it is over 3 times as expensive as the supermarket own brands but it’s hand crafted by a small team of workers and each bottle is reportedly made out of 250 top quality potatos. Comparing this with the mass market vodkas made out of left over grain then you can see why the pricing is different.
Using Ansoff’s matrix terminology they have also undertaken rather nice product development and launched a limited edition Marmalade Vodka.
Now, for me a lovely breakfast is a fresh pot of tea with some nice toast and marmalade. Should I be rethinking things though so that I opt for Marmalade Vodka instead?
https://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.png00Stevehttps://www.theexpgroup.com/wp-content/uploads/2018/06/styleguide-EXP-4.pngSteve2010-09-10 19:19:472010-09-10 19:19:47Forget the great Polish and Russian vodkas, the best vodka in the world is officially English. Now, go and open a packet of crisps to celebrate.
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