There has been much hype about Twitter going public from the day they announced it with a tweet. Since their launch in the month of July 2006, everyone had anticipated their ‘coming-out’ yet it seemed as if they had dragged it on for a few years, probably because of Facebook’s failure in their IPO. Anyways, the question on everyone’s mind is; will this be a successful strategic move by Twitter or would this be Facebook all over?

In my opinion…actually, I don’t have an opinion because in this case in particular, I really cannot anticipate how Twitter would adapt to this huge change.

What could very potentially happen is that Twitter’s IPO would be another failure similar to Facebook. The simple fact is, it is impossible to accurately calculate the value of these social-network giants because almost all of their value comes from ambiguities such as “potential”. And because the internet-based markets are very dynamic, it is usually a misrepresentation of the company. Therefore they are allowed to argue their current value based on their future potential value, making their current values ridiculously over-valued.

The other possible outcome from this IPO is that Twitter ends up upsetting their customers in order to meet the shareholders’ demands for more revenue. This would most probably be done when Twitter integrates more advertisements into twitter used on platforms such as a smart phone.

Whether the IPO fails or Twitter compromises their integrity one thing is for certain, the founders and the early investors are probably smirking in their Jacuzzis with a bottles of vintage Dom Perignon, thinking about how they are going to spend their millions (or even a billion for Evan Williams).

http://www.economist.com/blogs/schumpeter/2013/09/twitter-s-ipo

Monster Tree Service is a business that was created five years ago by a guy named Josh Skolnick five years ago. It is a tree removal business based in Fort Washington which brings in an annual revenue of about 2 million dollars a year. From his huge success in the past five years of operation, Skolnick is considering selling franchises of his business.

Based on the information given in the article, should he sell franchises in order to expand his business? Yes.

It may be true that selling his franchise at this point in time is way too fast because the business model hasn’t been proven to work yet in other regions that he could potentially expand his business to. There is also the possibility of the brand name being hurt as the business is described as being very market-oriented and customers obviously are responding to that corporate value. Also, there is the huge cost of the initial investment. Yet, I feel that the benefits that come from selling the franchise outweigh the drawbacks.

Selling his franchise would:

1. Expand his business regionally and financially.

Expanding regionally would mean a significant increase in sources of revenue and the revenue itself which would lead to Skolnick to earn back his initial investment in a fairly short period of time if it goes successfully. The basis of this prediction is that the business model, as far as I can tell from the article, has a big contribution margin per service. Expanding regionally would show stability and credibility of the business.

2.   In the article, it mentioned how the business was actually the only big player who positioned themselves to specifically target the tree removal operation. This would mean that they are essentially the ‘first-mover’ and in order to strengthen their brand positioning, they need to expand and establish their business in the market in order to set up higher barriers of entry to the niche.

All-in-all, selling the franchise is a good idea for the expansion and establishment of the brand.

http://www.nytimes.com/2013/09/12/business/smallbusiness/a-fast-growing-tree-service-considers-selling-franchises.html?pagewanted=all

There has been hype about Suntory Beverages & Food Ltd., one of the largest players of the drinks and food market in Japan, offering to buy the well-known British drink brand, Lucozade and Ribena from GlaxoSmithKline Plc for approximately 2.1 billion dollars.  

I feel that this move by Suntory was a very smart move especially for buying the Lucozade brand. But how smart?

Firstly, Suntory could possibly create a new segment of the energy drink market that is so saturated right now with domestic and foreign brands. The reason I think this is because currently, there is no presence of a slightly less extreme energy drink in the Japanese market which Lucozade successfully represents. All of the well-known energy drink brands such as Red Bull, Monster Energy, Ripovitan D, Oronamin C, are extremely high in caffeine content and mostly only appeal to businessmen and young teens who are looking for a caffeine boost. If Suntory could successfully position the Lucozade and Ribena brands to be a less extreme form of the energy drinks in the market, they would be able to successfully target a wider customer segment, with a first-mover advantage.

Secondly, because of the highly saturated non-alcoholic drinks market in Japan, this move by Suntory is probably a strategy to increase their source of revenue from outside of Japan. Also, because Suntory will acquire global rights to the brands and the manufacturing sites, owning these two brands will provide Suntory with a foothold to expand their products in countries such as Nigeria and Malaysia where Glaxo already operates.

http://www.gsk.com/media/press-releases/2013/gsk-reaches-agreement-to-divest-lucozade-and-ribena-.html

http://dealbook.nytimes.com/2013/09/09/glaxo-to-sell-drink-brands-for-2-1-billion/?_r=0