Archive for the 'Global Strategy' Category

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How internet companies profit from data on the web

Published on February 27, 2011 in Global Strategy. 0 Comments Tags: , .

Across the internet economy, companies are compiling masses of data on people, their activities, their likes and dislikes, their relationships with others and even where they are at any particular moment—and keeping mum.

“They are uncomfortable bringing so much attention to this because it is at the heart of their competitive advantage,” says Tim O’Reilly, a technology insider and publisher. “Data are the coin of the realm. They have a big lead over other companies that do not ‘get’ this.”

Re-using data represents a new model for how computing is done, says Edward Felten of Princeton University. “Looking at large data sets and making inferences about what goes together is advancing more rapidly than expected. ‘Understanding’ turns out to be overrated, and statistical analysis goes a lot of the way.” Many internet companies now see things the same way. Facebook regularly examines its huge databases to boost usage. It found that the best single predictor of whether members would contribute to the site was seeing that their friends had been active on it, so it took to sending members information about what their friends had been up to online

Urbanisation: How big can cities get?

Published on February 27, 2011 in Global Strategy. 0 Comments Tags: .

The world is in the throes of a sweeping population shift from the countryside to the city. Underpinning this transformation are the economies of scale that make concentrated urban centers more productive. This productivity improvement from urbanisation has already delivered substantial economic growth and radically reduced poverty in countries such as China. The growth of cities has the potential for further growth and poverty reduction across many emerging markets [Source].

However, we are now seeing cases where the growth rates of some large cities have begun to slow. In addition, the increased complexity of large size can overwhelm the ability to manage. When this happens, cities can become disastrous mixtures of slums and gridlock, raising the question of whether there is a maximum size for a workable city.

Managing the opportunities and challenges of cities is both vital and urgent as global urbanization rushes ahead on a dramatic scale. The share of the world’s population living in cities has recently surpassed 50 percent. By 2025, we see another 1.2 billion people swelling those ranks—95 percent of whom will live in developing countries. The reasons for this rise in growth are not hard to fathom [Source].

Urbanisation has been a cornerstone in the economic development of countries. South Korea’s economic miracle—an increase in real GDP per capita of more than ten times since 1960—was enabled by a surge in the urban population from around 25 percent to 80 percent of the total population. Urban centers foster the growth of higher-productivity jobs and industries and reduce the cost of delivering basic services [Source].

The Rise of Generation C

Published on February 23, 2011 in Global Strategy and Social Media. 0 Comments Tags: .

By 2020, the demographic we call Generation C — connected, communicating, computerised, and, as a rule, born after 1990 — will make up 40 percent of the population in the U.S., Europe, and the BRIC countries, and 10 percent of the rest of the world. By then, they will constitute the largest single cohort of consumers worldwide [Source].

This is the first generation that has never known any reality other than that defined and enabled by the Internet, mobile devices, and social networking. They have owned various handheld devices all their lives, so they are intimately familiar with them and use them for as much as six hours a day. They all have mobile phones, yet they prefer sending text messages to talking with people. More than 95 percent of them have computers, and more than half use instant messaging to communicate, have Facebook pages, and watch videos on YouTube [Source].

Their familiarity with technology; reliance on mobile communications; and desire to remain in contact with large networks of family members, friends, business contacts, and people with common interests will transform how we work and how we consume. How businesses prepare for the Connected Generation’s transformation of the consumer and business landscape will determine their success [Source].

Nokia revamp includes Microsoft

Published on February 11, 2011 in Global Strategy. 0 Comments Tags: , , .

Nokia Oyj, the world’s biggest maker of mobile phones, said it’s forming a software partnership with Microsoft a bet that together the two companies can better challenge Google and Apple.

Under the plan unveiled today, Nokia and Microsoft will combine assets and jointly develop mobile products. The two companies will collaborate on joint marketing. Nokia’s Maps product will become a core part of Microsoft’s services, while Microsoft’s development tools will create applications for Nokia Windows phones [Source].

“Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale,” Elop said at a press conference in London. “It’s now a three-horse race.”

Business Model Innovation

Published on January 3, 2011 in Emerging Markets and Global Strategy. 0 Comments Tags: , , , , .

Sooner or later, all businesses, even the most successful, run out of room to grow. Faced with this unpleasant reality, they are compelled to reinvent themselves periodically. The ability to pull off this difficult feat—to jump from the maturity stage of one business to the growth stage of the next—is what separates high performers from those whose time at the top is all too brief [Source].

Companies that successfully reinvent themselves have one trait in common. They tend to broaden their focus beyond the financial S curve and manage to three much shorter but vitally important hidden S curves—tracking the basis of competition in their industry, renewing their capabilities, and nurturing a ready supply of talent. In essence, they turn conventional wisdom on its head and learn to focus on fixing what doesn’t yet appear to be broken [Source].

A preview of such business models can be found in emerging markets. Opportunities of the future can be spot on a street corner in Bangalore, in a small city in central India, in a village in Kenya—and they don’t require companies to forgo profits. On the surface, nothing could be more prosaic: a laundry, a compact fridge, a money-transfer service. But look closely at the businesses behind these offerings and you will find the frontiers of business model innovation. These novel ventures reveal a way to help companies escape stagnant demand at home, create new and profitable revenue streams, and find competitive advantage [Source].

Right now more than 20.000 multinationals are operating in emerging economies. According to the Economist, Western multinationals expect to find 70% of their future growth there—40% of it in China and India alone. But if the opportunity is huge, so are the obstacles to seizing it. The Economist wrote, “The only way that companies can prosper in these markets is to cut costs relentlessly and accept profit margins close to zero.”

Silicon Roundabout

Published on November 28, 2010 in Global Strategy, High Tech & Media and International Business. 0 Comments Tags: , , , .

London’s high-tech start-ups: A patch of east London has quickly become a world-class technology hub. Last.fm, a music website and Silicon Roundabout’s biggest success so far, was bought by CBS Interactive, an American company, for £140m ($280m) in 2007.

Silicon Roundabout’s firms are generally small-to-medium sized and highly specialised. One makes software for the fashion industry; another runs an online dictionary. There is a hotel-comparison website, a firm specialising in 3D and interactive content, and several digital-design firms with their own niches.

Measured by the concentration of technology firms and the availability of generous and informed investors, California’s Silicon Valley is still in a league of its own. But in the second division of hubs, this chunk of east London is near the top, along with the likes of Boston and Tel Aviv.

Silicon Roundabout emerged without government support, or even direct links with universities, should pique the interest of countries that have tried to cultivate technology hubs without the same success [Source].

Consolidation of the Food Industry

Published on November 26, 2010 in Global Strategy. 0 Comments Tags: .

The buyout of Del Monte Foods is the latest in a series of multibillion-dollar deals in the food industry this year, including the $19.5 billion takeover of Cadbury by Kraft Foods, and Coca-Cola’s $13.6 billion purchase of Coca-Cola Enterprises’ North American operations.

Many in the sector expect more deals to come as legacy brands look for growth opportunities and private equity firms pursue cash-rich companies [Source].

“There has been a lot of mergers and acquisitions activity in this space,” said Farha Aslam, an analyst with Stephens. “Food companies typically have very strong cash flow and many have worked down their debt levels.”

Game Changers: Sergey Brin & Larry Page

Published on October 31, 2010 in Global Strategy. 0 Comments Tags: , , .

As part of highlighting Game Changers, Bloomberg has reported with an insightful video on on Google’s founders Sergey Brin and Larry Page. The video follows Sergey Brin and Larry Page from their first meeting at Stanford to the new media mega-company on a collision course with old media businesses of newspapers, books, movies and television. Along the way to its astounding success, the co-founders have redefined advertising, created a chain of products such as Google Maps, News, Gmail and have taken on rival giants like Apple and Microsoft [Check out the video here].

US$250 Million sFund

Published on October 23, 2010 in Global Strategy and Social Media. 0 Comments Tags: , , , , .

Companies developing social-media applications for Facebook have a new place to look to for funding: one of Silicon Valley’s most powerful venture-capital firms: Kleiner Perkins is teaming with social and traditional media companies to back a $250 million fund aimed at fostering social-technology innovation.

The firm, Kleiner Perkins Caufield & Byers, announced it was creating an “sFund” devoted to putting money on the table for companies developing social-media applications—particularly those that could be integrated with Facebook and the social network’s 500 million users [Source 1] [Source 2] [Source 3].

“Think of it as a quarter-billion-dollar party,” said John Doerr, a partner at Kleiner Perkins. He called social media the next great wave of disruptive technology to come from Silicon Valley, after the development of personal computing and then the Web browser. Doerr, one of the most important venture capitalists and thinkers on the Silicon Valley scene.

From One-time Imitator to Pioneer

Published on September 3, 2010 in Global Strategy. 0 Comments Tags: , , .

Ten years ago, Samsung’s executives poured over numbers and set their 2010 sales goal at $140 billion — four times the amount in 2000. Sales will reach that level this year, according to the median estimate of 21 analysts — right on target. The company is aiming to increase revenue again — this time more than tripling it from 2009 to $400 billion by 2020.

Samsung Electronics has already taken giant steps from its early days as a copycat appliance manufacturer. Now, as a consumer electronics behemoth, it has expanded beyond South Korea and the nation’s industrial, conglomerate-run shipyards, steel mills and auto plants.

“Samsung today is in an incredible position to create the evolution of consumer electronics,” says Shaun Cochran, who heads Korean research at brokerage CLSA Asia-Pacific, which rates Samsung Electronics a “buy.” To be successful, Samsung — a company with a history of top-down managers and obedient employees — will need to shift strategy, a process for which it has few guideposts.

For the one-time imitator to become a pioneer, hitting the numbers will be just the beginning [Source 1] [Source 2].