Tuesday, August 2, 2011

Core Competencies and Innovation

True and false. True in the sense that companies got challenges from where they least expected, for instance Cannon was expecting the competition from Nikon not from Iphone and other smart phones. Similarly,  Google started with search engine but now it is in advertisement.  However there are numerous companies which fall victim to the direction less innovation, for instance Time Warner & CISCO.  The core competencies are crucial but one need to redefine the core competencies, Apple and Google defined  these very well and they are miraculously stick to it. The Apple's core competencies is  making elegant products.  Google's core competencies is still a search engine. Amazon's core competencies is providing effective online e-commerce platform, although they started with selling  books. Jeff Bezos main aim was not selling  books but creating an e-commerce platform. Borders Books wrapped-up the business so the question is , did they stick to core competency?  I suppose no they should be into selling books but they failed to embrace new medium to sell books. Similar, blockbuster and other businesses  did their mistakes.

This is very true that paradigm has been shifted, the environment is very conducive for the innovation where  a high school dropout from garage challenge a 100 year old behemoth.  I found Andy Groove's work in "Only Paranoid Survives" is very relevant in defining new ecosystem which infuse 10X factor.  Companies need to pass through strategic Inflection points as many a times there are mega trends which jolts existing conventions and write new rules of the game. We still follow same old  rules which has been set by nature, for instance moving tectonic plates formed continents, mountains like Himalayas and makes the world constantly moving.

Similarly, current business environment also consist of many moving parts.  It is extremely easy to handle the constant change for the smaller, nimble companies but tough to handle for giants, otherwise CISCO is a fine example how blind path innovation leads to stumbling. Even I confuses now that what is their core competency.
Core competency is must but it should be defined well and time-to-time look for inflection points.
There are two constant in the universe, first is God( if you are believer) and the second is "the Change".

Thursday, July 21, 2011

Radium One -A life saver for Twitter

At last Facebook and Twitter found their business model. Facebook's expected net profit for 2011 is to  rise in the tune of over $700 million , not bad on $2 billion revenue. However, Twitter is lagging and pundits question its long term survival without viable business model . Companies like Radium One could give new life  and meaning to Twitter's business model. Radium one will not be only company in the future which  would use social network data for its RTB ( Real Time Bidding) system. The RTB will be 24 billion dollar market  in next few years and data drawn from social network would be integral part of real time intelligence.
So do we assume that twitter will have its share in over  24 billion dollar market ? I suppose yes,  twitter is producing data that is near real time  and  data mining is much easier as there are 140 characters and few sentences to glean and churn out meaningful intelligence.

Wednesday, July 20, 2011

Google Plus- Fight of the Decade

I'm not great admirer of social networks. Personally, there is no added value to me except knowing who has on vacation and who has purchased new Car. However, I love to see some information about my links but I was so uncomfortable to leave  comments and message, because I don't know where it ends up. The second most annoying thing is when I'm getting   unwanted feeds. The system is not intelligent to understand my interests. Google + has solved the problems by providing Circles. I feel social networks will be relevant until these simulate the real social networking. Earlier, I avoided mixing my MBA colleagues with my relatives and friends but on Google plus I created separate Circle called "Babson". I really liked the feature.  And I hope there are millions like me who see the dire need of some privacy. Similar categorization is needed in the Twitter.

I'm sure Google plus will  corner considerable share. I see from business perceptive that nothing is undefeatable as initially people think about Facebook. Second lesson is that organizations should have the finger on the pulse of people, because this problem was existing for while and Facebook, being a leader simply ignored it.

It is not that Google is innovative so it wins against anything ,  but DNA of Google fosters  innovation which  is the core of it. On the other hand Facebook's DNA is  different as Mark is accused of stealing the idea and even code so if it is true then I feel Facebook struck in this juncture where at the fight of "decade" only innovator will win.We can draw the example from Microsoft and Apple and who is winning at last, the innovator. 

Thursday, May 26, 2011

Bubble economy ..Bugling versus burgeoning .....

Last 20 years are years of irrational exuberance and whole economic spectrum is like huge balloon, you control one end of the balloon ,another end bulged, for instance stock market bubble in late 80's , technology bubble in 2000, housing bubble in early 2000 and now commodity bubble , oops ! I associate the reason of bubbles even in biggest economic turmoil after 1929 to the human psychology. Since the breaking of Soviet Union and ending of cold war people freed from constantly lingering fear of 3rd world war. People are positive and fearless first time in modern history.However, overly optimistic environment is new for us but think how this protuberance of irrational exuberance cause hardship for millions of people , increase the disparity of the distribution of wealth.
The whole new economic paradigm is tough to understand and it takes time to adjust to new economic realities.There are opportunistic group of people who may be manipulating in this new paradigm and encourage bubbles.

Canada housing

"Possible near-term turbulence but Canadian market to remain on track  The most likely scenario, in our view, is a mostly flat trend in housing demand in Canada overall in the next two years (and potentially beyond). The risk of a significant, sustained and widespread drop will be limited given our expectation of a positive economic context that will sustain growth in household income and of a gradual pace of interest rate policy normalization – the Vancouver market could be an exception"

The lack of affordability of housing   would have far reaching affects in BC where more than 70% of disposable income consumed in mortgage liability. The creative , young class is fleeing the province as they could not afford  house with their meagre salaries, which also lead to migration of businesses to other provinces. The US style crash is not viable because of strong immigration along with investors from China racking up properties and pay astonishingly high price.
Strong Canadian $ also has disastrous affect on Canadian businesses. Everyone is driving down south and save 20-40% and use the leverage of strong Canadian $ .  However , according to Robert Shiller Canada is lucky while facing economic turmoil , high prices of  oil and commodities  saved Canada . Was this saving or destroying ? The time will tell

Thursday, May 19, 2011

Tim Horton looking at 350 million plus market with flawed strategy


Their penetration strategy to focus on key 9 states might have strategic logic but I see their strategy rigid  and obsolete. Why they could not simply follow the Canadians .The CND dollar  is roaring and I don't think there will be end to the rally.
You see huge line-up at border , many are going there for shopping and some simply dash to fill the gas tanks .The businesses at the south side are flourishing,  coffee stands, grocery shops and malls are seeing unprecedented growth in revenue  .
Why Tim Horton is not following simple strategy of following the Canadians and bring them their favourite coffee and donuts ?  ....This can be the example  of strategic  stubbornness, however there might have been other valid reason behind the imperative

Sarab Mann