Month: October 2010

On Wednesday, German luxury car maker Audi AG (NSU.XE) lifted its 2010 car sales outlook for China as demand continues to boom.  It plans to sell one million vehicles there within the next three years.

I think that this is a tactic of Audi because it’s a specific short term target, and that Audi has drawn up a plan in order to accomplish this tactic. But I think Audi has to face two important problems if they want to achieve this target successfully. The first problem is that Audi can only produce 200,000 cars per year in China. If they want to sell the next million cars in three years, they have to sell at least 330,000 cars per year. However, the factory may not able to produce that much. The second problem is that the brand power of Audi is not as strong as Benz and BMW in China. I know that Benz and BMW lowered their prices earlier this year, but Audi didn’t. If Audi lowered the luxury car price, rich consumers may not choose their cars. However, this situation is not going to happen to Benz and BMW because they have strong brand power. Audi has to strengthen its brand power, and this is also a big challenge.

Read more:

http://www.automatedtrader.net/real-time-dow-jones/24213/audi-targets-1-million-car-sales-in-china-within-3-yrs-lifts-outlook

 In 2006, Levi’s introduced Eco Jeans to the market. The Eco line, included jackets, shirts, and of course jeans, is made of 100% organic cotton under emission-free process. I believe selling Eco Jeans has both opportunity and threat.

  I think the opportunity is that consumers are focusing more on the environment when they are making decisions. Levi’s can gain sustainability advantage by using organic cotton and win more consumers. It is important to invest in organic cotton because it preserves the land the cotton is planted on. In order to produce certified organic cotton, the land needs to sit there for many years while the previous pesticides and chemicals are cleared away.

   However, in the same time, the high cost of using organic cotton may be a threat to Levi’s. The high cost of using organic cotton causes the high price of Eco jeans. The price of a Eco jeans is about $150. Most consumers would rather buy cheaper jeans. Only a few rich consumers would like to try this eco-friendly but expensive products.

  Eco Jeans is still available in a few Levi’s store now, but this eco-friendly product is not so successful as it was expected.

  After learning the target market about The Body Shop, I start to think about Chinese old skin care product brands. Believe it or not, I had used Shiseido for more than 5years and I decided to start using Chinese old skin care product earlier this year. I was so amazing at the perfect effect  after using the Chinese old skin care product with really simple and crude packaging. In addition, the price of these skin care products is really low. However, the market of Chinese old skin care product is getting smaller because of the raising competitor -the international brands.

  I believe Chinese old skin care products are not really “old”; their formulas are natural and tested by a lot of people. These products just can not correctly find and focus on their target market. Young girls like products of famous brands with beautiful packaging, such as Anna Sui, Channel. After using Chinese old skin care product, I think they can set their brands as “cheap, effective because of the natural composition”. They have to make their brands recognizable when consumers compare their products to the international big-name products.

   Christie’s Auction House held an auction in London on 29^th Sep. Many works of art and office facilities used to be in the Lehman Brothers’ European headquarters’ office were sold in this auction. About 300 items were sold in the auction and they worth about 160 million pounds ($253 million dollars). The most eye-catching item was the signboard of the Lehman Brothers’ European headquarters’ office.

   This signboard was bought by an anonymous telephone buyer at the price of 66500 dollars. Besides the signboard, the auction also included paintings, powder boxes and even warship models. Many old employees of the Lehman Brothers joined in the auction because they wanted to save their memories by keeping some of the decorations of their old offices.

   In my opinion, Lehman Brothers’ bankruptcy showed the overvalued of the investment stocks. And because the return of investment may be safe or risky, the stockholders of the Lehman Brothers’ had to share part of the risk of bankruptcy. The bankruptcy changed a lot of people from the rich to pauper overnight.

As Kodak invented digital photography in 1986, digital camera becomes the “terminator” of conventional film camera. The sales volume of the roll film in the world is decreasing by 10 percent every year. Traditional film producer, such as Kodak and Fuji, both met bottlenecks in their development. However, after several years’ transformation, Fuji ranks the 4^th in the “Consumer’s favorite digital camera brands”. As the inventor of digital photography, Kodak only got 10 percent of its revenue from digital camera industry and earned no profit from the digital camera industry in 2003. Kodak finally decided to transfer its industry in 2003, several years after Fuji’s successfully transformation.

According to the CEO of Kodak, Kodak will quit the film camera industry and depend all its profit on digital industry in 2014. I think, Kodak is changing its strategy on products and target consumer. And the change in strategy is really important to the company. In my opinion, Kodak can win a lot consumers by it’s copiously products in low-end digital market. But the gap in technology with the competitors (like Canon, Nikon, and Sony) will highly restrict the development of Kodak.