Tim's Blog

Managing Small Business is as hard as managing large corporation. People who own or manage small business are very different from people who manage large multinational corporations. It is really hard to imagine that CEO of a  huge company does not have proper business education, however it is very possible for people who manage small businesses to have a completely business unrelated education or have no degree at all. It is a common practice for large companies to hire other businesses – for example to do a market research, develop a marketing campaign, hire personnel.

Small Businesses can not enjoy this possibilities, that is why there are blogs as “Small Business Trends” which help owners or managers of small businesses to run effectively.This blog provides interesting tips for SB (Small Business), for example recently I came across a post by Lisa Barone, where she was talking about branding of small business. She provides number of questions which managers of SB should ask in order to brand the company appropriately. The questions cover topics as target market, competition, and business as a brand. Answering this question will help managers to create an effective strategy for the business.

Image Source: Google Images

Coca-Cola has created a new can design in order to save polar bears as we know from Tim Lee’s Blog Post . Coca-Cola and marketing is very interesting topic, probably Coca-Cola is the company which can be considered to be a creator of modern marketing. Most of the marketing techniques and strategies companies use now where at some point used and pioneered by Coca-Cola. The change the way product looks like in order to encourage people to buy products for a good cause is very innovative and working technique. Coca Cola is creating an image of a socially responsible company, which helps create a stronger brand image.

However there are only 2 million dollars which would be donated by Coca-Cola in order to save polar bears. After seeing this number a serious question could be asked  – “Is Coca-Cola doing it for a good cause, or just to create an image of socially responsible company?”

For me the answer is obvious, it is done in order to create an image of a good global citizen, rather than actually helping.

If Coca-Cola would have donated a significantly larger sum of money and launched the same campaign, it would have created what Coca-Cola was seeking for – good corporate image which was archived though innovative marketing campaign. Now I can only see desire to create a strong brand name, by not really doing anything significant.

Netflix has just announced that company is going to be unprofitable in 2012. One of the major issues for it is the expensive expansion to UK and other regions. However the loss of subscribers due to bad management is also responsible for that.

Since Summer 2011 Netflix’s market value has decreased by 75%. This is happening because of the management decision to increase price for services. More than a 60% increase happened for services offered by Netflix, now the cheapest subscription which includes both services (online video streaming and  DVDs by mail) is $16, compare to $10.
On Septemeber 15th the subscribers responded by abandoning the service. In total 1 million out of 24 million subscribers left because of the price changes.

However CEO Reed Hastings did not stop, 3 days later he announced that DVDs by mail will be offered by Qwikster, rather then Netflix. This caused more subscribers to leave. Later Reed Hastings canceled Qwikster, which made many people surprised by the CEO’s making this flip-flop move.

In the result of bad management decisions company dropped 75% in value, and now is facing difficult time, as more and more serious players like Google and Amazon enter market for streaming, and costs for Netflix are higher, as the payments for copyright will rise significantly. This is the situation when company becomes unsuccessful mostly because of the decisions senior managers make. In July company’s shares were sold for the highest amount in Netflix’s history, and now they are lowest since almost two years ago.

Image Source: http://www.cbc.ca/news/business/story/2011/11/22/netflix-shares.html

This is the movement in order to free the internet from Adobe’s Flash plug-in. There are many reasons people want Flash gone. The major argument of the movement is that Flash is already too old, it is complicated, crashes a lot. Flash is holding back the internet, Flash content could not be viewed using most of the mobile devices, and Adobe is not planning to develop it.

The time for the plug-ins like Flash is gone, HTML5 has all its features and even more. For example the content on web page could be embedded into website code, and video could be viewed even offline.

“Occupy Flash” is encouraging people to remove Flash plug-in from their browser, in order to create a consistent internet for web designers.

However there has been a lot of dissatisfaction about Occupy Flash from Flash developers, as they believe that the movement is taking their business away. Occupy Flash opponents believe that Flash does not harm the internet, it only adds more.

“Occupy Flash” movement can be seen as a bit extreme. Without a doubt HTML5 is the future of the Internet, however it does not mean that something popular as Flash now should be fought against. HTML5 can not offer what Flash has to offer now, there are more Flash developers, and even such website as Youtube can not fully operate when using HTML5.

Image Source: http://occupyflash.org/

Small to Midsized business in peripheral Europe – in Ireland, Spain, Greece, Portugal and Italy are in hard situation. Their domestic markets are in poor condition and hardly any profit could be made. The costs of production are becoming higher, and less people are willing to buy goods. The only option left in order to survive is to export to other countries, where people still have money to buy goods produced in Europe. Finding new export markets is a bright idea in order to increase revenue and possibly save business from failure, but it sounds easier than it really is. Small businesses in Europe lack competitiveness and European countries cannot devalue their currencies to make their products cheaper abroad. Entering new markets is always harder than staying in one, because of the costs business needs to pay in order to operate properly. The major obstacles which companies who tried to export to foreign markets met were legal problems, high costs for transportation, and overall running costs, as marketing. Competition from domestic and international companies was also a major issue.

It is very difficult to operate in other market, because people are very different. Pedro Fernández, chairman of Spanish construction equipment company General de Alquiler de Maquinaria says that Brazil is very hard market to expand to because Brazilian government is very protectionist and bureaucratic. People might think that it is easy for Spanish company to do business in Latin America because they speak the same language, in fact they are very different people.

Expansion to other markets is always very hard and has many obstacles. Small Business in Europe has little choice. Without operations in other markets small business in Europe is most likely to shut down, as they will not be profitable. Other markets allow small european companies to survive the unpleasant time in economy by selling their products abroad and increasing revenue of the company. The costs of exports are very high for the companies, but they are willing to pay them in order to save the business.

Original Article: http://www.businessweek.com/magazine/europes-small-businesses-seek-exportsfast-11102011.html

Image Source: Google Images

In United States being ecologically friendly became so popular so even funeral services started to turn “green”. Funeral services typically do not offer new innovative products, as the ways of burring people did not change much since few centuries ago. However some of them as Jeff Edwards, owner of Edwards Funeral Service in Columbus introduced a new way of putting remains of human into in urn, which is called alkaline hydrolysis. Using this new method only very small amount of carbon dioxide is produced compare to usual cremation, also it has many benefits over burring in coffin, as it is more affordable. However there is one serious problem which does not allow Jeff to expand his business, the government of Ohio and several other states have made alkaline hydrolysis illegal as they wrongly believe that only bones of the person remain for the urn after the process, rest of the body is gone with liquid in the drain.

While Jeff is in a legal battle with Ohio government the demand for the green funeral business is growing, more and more families across the US started to consider ecologically friendly burials, the number of funeral services offering ecologically friendly options for burials dramatically increased since few years ago.

Obviously the traditions and the conservatism of this industry may make it hard for the eco-friendly options to become popular, but there is no reason why some industries should become green and others should not. Being ecologically friendly is not a trend, it is a necessity, why should not something as big and old as funeral services become a part of it.

Read More: http://www.businessweek.com/magazine/the-greening-of-death-11032011.html

Image Source: http://www.businessweek.com/magazine/the-greening-of-death-11032011.html

In a response to Darren’s Blog Post I would like to say that I totally agree that Apple is one of the most legendary entrepreneur companies in the business history. The reason for it is the genius of Steve Jobs. He was the one who came up with idea which revolutionized the world. When Apple was organized, Jobs did not understand much in computers, but he perfectly understood what people wanted – that’s how one of the first personal computers was created.

Even when Steve Jobs left the company for a long time, he still was successful in being an entrepreneur, for example one of the World’s most famous animation studio Pixar is partly Steve’s creation.

It can be argued that Steve Jobs part in creating Apple is overestimated, because it was not actually him who built the computers, it was other Steve, Steve Wozniak, and there were many other people who made Apple successful.

However without a doubt Steve Jobs was the person who saved Apple from failure in 1990s, he was the one to make company one of the most successful companies in World.

Image Source: Google Images

There has been a lot of pressure put on Apple, because their products are made outside of the USA, mostly in China. A lot of people said that president Obama should challenge patriotism of corporations like Apple, as all they produce is made in China. Production outside of the country means that country is loosing jobs, instead of producing iPhones in the USA, Apple produces them in China. In fact there are more people hired by Apple in China, then in the US.

However Apple also supports production in the US, but it does not do it for several reasons. One of them are the costs – it is very expensive and hard to build a factory in the USA, compare to China. Former CEO Steve Jobs was an advocate for production in home country, but it is very hard financially and practically to produce in the US.
He argued that “there are not enough engineers to hire in country in order to support all workers on Apple’s factories”. The conditions created for the business must be more friendly, otherwise businesses will not support the government.

Apple might be right about production in the USA, it is expensive and almost impossible to do, however they still do not support the country by buying chips and other electronics from other American companies like Intel, instead they purchase it from Asian companies.

In order to succeed both government and businesses need to cooperate. Government should create healthy conditions for business development, and business should respond by producing inside the country in order to decrease unemployment and generate higher tax revenue for the government. There is a new factory built by Globalfoundries in the USA, and maybe Apple will become more supportive of country and will order parts necessary for its products from them.

Read Original Article: http://news.cnet.com/8301-13924_3-20127447-64/can-apple-make-more-stuff-in-the-usa/

Mobile devices long time ago became a status good, as expensive clothing, cars and watches are. And Vertu with no doubt is a leader in this industry. This company is owned by Nokia, however it is very hard to see any similarities between these brands, even on their websites it is very difficult to find that they are technically the same corporation. This all is made for one purpose to emphasize the uniqueness and accessibility only for very few.

Vertu for many people has been a trademark for luxurious phones, as they are hand made, built from materials as titanium, stainless steel, sapphire glass, silver, gold, and diamonds and obviously are very expensive (cheapest models start at $6000), however not many see them as practical devices, most of the Vertu users have more technologically advanced phones for everyday use. The demand for luxurious phones is only increasing, especially in Persian Gulf, Russia and China. Many other competitors have entered the market, and Vertu in order not to lose market share is stepping away from their traditional approach of producing luxury phones lacking in technology and starting to create new phones which will be able to attract customers as both status goods and technologically advanced mobile devices.
It can be seen as complete change in objectives as before Vertu was designed to help people emphasize their status by showing others that they can afford a phone which can only make calls and text and does not have something which much cheaper phones already had for 5 years as cameras, mp3 players, navigation systems etc. Now Vertu is aiming for manufacturing phones which will be practical, technologically advanced, and still  as luxurious as they were. The first step towards archiving it is an a new QWERTY keyboard model.

Sources:

http://www.businessweek.com/magazine/nokias-bright-spot-luxury-handset-maker-vertu-09292011.html

On September 28, 2011 Amazon  announced new tablet device called Kindle Fire, which is  can be considered as a direct threat to astonishing 80% market share of Apple iPad in North America. Devices of other companies as Samsung, Blackberry and others failed to end domination Apple’s domination in the market. However Amazon’s Kindle Fire has pretty good chances.
Amazon’s device is twice as cheap as the cheapest iPad model, however it still does most of the things iPad can, as games, Flash enabled internet browsing (even iPad can not do that), e-mail client, e-books and many more.Obviously for a smaller price you get a smaller device with specs not as good as iPad’s, but the price is only $199, so it is a very good deal. Some people may be critical about the device as it does not have 3G internet, does not have a camera, the screen is not that great, but Amazon has an answer to that: “It’s $199!”
Amazon market strategy is very different from Apple’s, Amazon prices everything cheap and then makes it even cheaper. This strategy will allows Amazon to steal market share from Apple, because lots of people want a toy/device similar to iPad, but they are not fine with paying $500 for it.
Read more about new Amazon’s device at:
http://www.slate.com/articles/technology/technology/2011/09/amazon_opens_fire.single.html
http://www.businessweek.com/magazine/the-omnivore-09282011.html

http://www.bbc.co.uk/news/business-15082092