Archive for the 'Global Strategy' Category

Inside Johnson & Johnson’s Innovation Shop

Published on December 28, 2011 in Global Strategy. 0 Comments Tags: .

J&J is seeding small, high-risk ventures through RedScript Ventures, a two-year-old accelerator program.

A huge health-care company like Johnson & Johnson requires a steady stream of innovation, but that’s getting harder and harder to create. So the 125-year-old company is getting more aggressive at mining ideas from outside. It’s seeking out very early ventures that it once would have considered far too risky and seeding them with money or dishing out advice on how to nudge untested ideas out of the laboratory.

Some experts say J&J’s relationship to innovation is the right model for a large company. “It lets the marketplace do what it does best, which is have an explosion of different kinds of companies in various fields,” says Richard Foster, lead director of the board at Innosight, a consulting firm that has done work for J&J. “These companies will need major infusions of capital, or a global distribution chain. At that point, J&J says, ‘We are very effective in rolling innovations out—very quickly and cost efficiently [Source].’”

The Venture Capital Winners of 2011

Published on December 16, 2011 in Global Strategy. 0 Comments Tags: , .

Did someone say economic slump? Not in Silicon Valley. The initial public offerings of LinkedIn (LNKD) and Groupon (GRPN) brought billion-dollar paydays* to venture capital firms New Enterprise Associates, Sequoia Capital, and Greylock Partners, while Kleiner Perkins Caufield & is expected to profit handsomely from Zynga’s IPO on Dec. 16.

For venture firms that missed out on those high fliers, plenty of money was made in vacation-rental site HomeAway (AWAY), which helped Redpoint Ventures crack the year’s top 10. Khosla Ventures was the only investor to make a splash unrelated to the Web with its majority ownership of KiOR (KIOR), a biofuel maker that is valued at over $1 billion even though the company has yet to generate a penny of revenue [Source].

Protect And Attack: Lenovo’s New Strategy

Published on November 18, 2011 in Emerging Markets and Global Strategy. 0 Comments Tags: , , .

Once an unlikely rival for HP and Apple, Chinese computer maker Lenovo has grown and adapted as quickly as its homeland. Now, with a savvy blend of East and West, it’s poised to be China’s first global brand.

Lenovo is a company the likes of which we’ve never seen. It is a product of Communist China (the government still owns 36% of its parent, Legend Holdings); it is heavily influenced by the democratized West; it boasts an international workforce of 27,000 employees and customers in more than 160 countries.

“This is Lenovo’s moment,” says Lenovo CEO Yang Yuanqing, 47, a former salesman who once delivered computers by bicycle and is now China’s highest-paid chief executive. (His 2011 salary: $12 million.) Yang calls Lenovo’s strategy “protect and attack,” three words you hear repeatedly at the company’s headquarters in Beijing and its offices in Raleigh, North Carolina, where Yang spends a third of his time.

Lenovo seeks to protect its core business–the China and enterprise (large-scale commercial and public-sector) markets, which generated about 70% of its $21 billion in revenue last year. On the attack side, he’s pumping Lenovo’s profits–$273 million in 2010–into emerging markets, new product categories (tablets, smartphones, smart TVs), and, of course, the U.S [Source].

Amazon’s Disruptive Growth Strategy

Published on October 31, 2011 in Global Strategy. 0 Comments Tags: .

This year Amazon invested heavily in disruptive-growth opportunities — and investors were not pleased.

On Tuesday, Amazon.com reported third-quarter earnings that fell far short of Wall Street’s expectations. Its earnings were down 73% from the quarter a year earlier and it missed the analysts’ consensus estimate of $0.24 per share by nearly a dime

Amazon missed its earnings because the company has been investing more heavily than Wall Street expected. And these investments are being made in the infrastructure to support not just a single disruptive business, but a number of disruptive-growth opportunities. Below is a snapshot of Amazon’s portfolio of disruptive businesses:

  • Amazon Retail — disrupting traditional retailers
  • Amazon Kindle — disrupting the paper book format and paper book retailers
  • CreateSpace — a self-publishing solution that disrupts traditional publishing houses
  • Kindle Fire Tablet — a new market disruption enabled by business model innovation
  • Amazon MP3 and streaming audio and video — disrupting traditional content distribution companies
  • Amazon Web Services — disrupting the companies that sell on-site servers and native software applications

But Amazon looks at the world in a different way. The company has a set of organizational capabilities and is not afraid to leverage them to pursue almost any disruptive opportunity. It’s as if Amazon does not view itself as a retail company, but rather as an incubator for disruptive businesses. And in the process of building those businesses, the company is disrupting pretty much everyone except itself. By their nature, disruptive opportunities are small for a long time before they can contribute meaningfully to a large company’s bottom line [Source].

China: growing taste for European M&A

Published on October 27, 2011 in Emerging Markets and Global Strategy. 0 Comments Tags: , , .

Chinese companies are increasing their appetite for corporate acquisitions in Europe.

As Jamil Anderlini writes in today’s FT, the Rhodium Group, an economic consultancy, predicts Chinese groups will invest up to $1,000bn in overseas acquisitions over the next decade, with a big slice of this investment heading to Europe.

In the past decade, China has mostly focused on companies in the US and Australia, as the chart below shows. But wobbly stock markets and declining valuations in Europe have also made assets there attractive.

Europe is China’s most targeted region this year, attracting more than $12bn via 64 deals, and accounting for nearly 30 per cent of all Chinese outbound M&A in terms of deal value, according to Dealogic. This is up from just $2.5bn via 35 deals during the same period a earlier year, accounting for only 6 per cent of total Chinese outbound M&A [Read more].

Amazon, the Company That Ate the World

Published on October 25, 2011 in Global Strategy. 0 Comments Tags: , , , , , , .

Jeff Bezos’ new tablet, the Kindle Fire, is cheap, pretty, and puts Amazon in perfect position to take a bite out of Apple—and every online transaction you make.

Jeff Bezos is channeling Apple. It’s mid-September and the wiry billionaire founder of Amazon.com (AMZN) is at his brand-new corporate headquarters in Seattle, in a building named Day One South after his conviction that 17-year-old Amazon is still in its infancy. Almost giddy with excitement, Bezos retrieves one by one the new crop of dirt-cheap Kindle e-readers—they start at $79—from a hidden perch on a chair tucked into a conference room table. When he’s done showing them off, he stands up, and, for an audience of a single journalist, announces, “Now, I’ve got one more thing to show you.” He waits a half-beat to make sure the reference to Jobs’s famous line from Apple (AAPL) presentations hasn’t been missed, then gives his notorious barking laugh. With that, Bezos pulls out the Kindle Fire, Amazon’s long-anticipated tablet computer—and the first credible response to the Apple iPad [Read more].

Building a Company Without Borders

Published on October 21, 2011 in Global Strategy. 0 Comments Tags: .

They say you can’t go home again. If you work for Reckitt Benckiser, you can go home—but you may not want to, and you certainly won’t have to.

Most of our top managers haven’t held jobs in their countries of origin for years and view themselves as global citizens rather than as citizens of any given nation. We have operations in more than 60 countries. Our top 400 managers represent 53 different nationalities. We’ve spent the past 10 years building this culture of global mobility because we think it’s one of the best ways to generate new ideas and create global entrepreneurs [Read more].

Reckitt Benckiser resulted from a merger in 1999 of Reckitt & Colman—a British purveyor of household cleaning products with a great stable of brands—and the Dutch-listed Benckiser, a much smaller but better-performing consumer goods company. But we don’t want to be known as an Anglo-Dutch enterprise, or by any other label based on our operations or history. We’re not any country’s company—we’re a truly multicountry company.

Google close to launching music service

Published on October 14, 2011 in Global Strategy and Social Media. 0 Comments Tags: , , .

Google is reportedly preparing to launch its own Mp3 store, according to the New York Times. Citing unnamed “music executives,” the report said Thursday that the company will open the store in the next several weeks [Read more].

Music is becoming a key part of Google’s drive for dominance online. Amazon, Google, Facebook and Apple are all locked in a race to become the one-stop shop for social, shopping, media and communication. Amazon has a cloud music player that’s hooked into its huge library of tracks. Facebook recently announced integration with Spotify, which will let users listen to music together with their friends [Read more].

Innovation, made in Russia

Published on October 13, 2011 in Global Strategy and High Tech & Media. 0 Comments Tags: , .

Skolkovo, just outside of Moscow, wants to become Russia’s Silicon Valley.

The first trip to the Silicon Valley often has a profound impact on foreign entrepreneurs. But for 13 Russian startups currently touring the region, visiting the Valley isn’t just about changing their own point of view; it’s about changing their country.

The idea is to encourage young Russians to take risks, pursue IT opportunities, and maybe adopt a little bit of Silicon Valley culture in the process. Like the idea that failing with a startup doesn’t mean you need to change careers. IT Cluster Deputy Director for Education and Research Katia Gaika told me that Silicon Valley’s embrace of failing is very foreign to people in Russia. “Failure is not acceptable,” she said.

The startups, all part of the state-sponsored Skolkovo IT Cluster, are accompanied by a reality TV crew that documents their every move [Read more].

Samsung: The next big bet

Published on October 9, 2011 in Emerging Markets and Global Strategy. 0 Comments Tags: , , , , , .

The world’s biggest information-technology firm is diving into green technology and the health business. It should take care; its rivals should take notice.

In 2000 Samsung started making batteries for digital gadgets. Ten years later it sold more of them than any other company in the world. In 2001 it threw resources into flat-panel televisions. Within four years it was the market leader. In 2002 the firm bet heavily on “flash” memory. The technology it delivered made the iPhone and iPad a reality, and made Samsung Apple’s biggest supplier—and now its biggest hardware competitor.

The handsome payoffs from these ballsy bets made the South Korean company a colossus; last year its sales passed $135 billion. Now it is embarking on a similarly audacious plan to move away from electronics into technologies where it barely has a presence today. It intends to spend $20 billion over ten years on solar panels, light-emitting diodes (LEDs) used for lighting, electric-vehicle batteries, medical devices and biotech drugs.

These businesses shift Samsung away from easily substitutable gadgets towards more essential industrial goods (see table)—or from “infotainment” to “lifecare”, as the company puts it. Just as electronics defined swathes of the 20th century, the company believes green technology and health care will be central to the 21st [Read more].