Social Trends among the younger generation - opportunities?
I was recently at the Microsoft Global Accounts Summit, which is a high level meeting for the company’s top customers. Among the fascinating agenda items was a presentation by Robbie Bach, President of Microsoft’s entertainment and device businesses (yes, he’s the guy responsible for much of Microsoft’s reputation for “cool” among some customer segments!).
He made a very interesting observation about how different the younger generation is from those that came before in terms of how and with whom they network, socially. To whit:
The generation of consumers growing up now is the most social generation in history. When I grew up I had friends in the neighborhood. We’d get together with people in the house. This generation of kids have friends in the neighorhood, but their definition of ‘neighborhood’ is completely different. Teens and people in their twenties have an average of 53 friends. The fascinating thing is that 20% of them they have never met in person.
These virtual friends open up all kinds of opportunities for changing the experiences people have with your products and service offerings, and I believe we are only beginning to scratch the surface of the implications of this. Trends that have already been noted include the potential for viral marketing among loosely grouped bunches of people, the use of friend recommendations to enhance reputation or sell products and the evolving definition of who is a trusted source. There are also major downsides that companies really need to think about before making potentially stupid moves. One I read about just the other day is that when you and your boyfriend/girlfriend break up, and you change your status on sites such as Facebook, it tells all your friends! Imagine the multiplier effect of having all that heartbreak out there in public where everyone can see it.
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- Posted Rita McGrath on March 05, 2008
Pulling the plug… end of life cycle and standards losers in today’s top stories
One of the most difficult - but essential - decisions to make in today’s hypercompetitive markets are those that involve shutting things down. It is heartbreaking - every product, every line of business and every bright idea always has teams of committed, hopeful individuals supporting them. Saying goodbye is a mournful matter.
My heart went out to two companies who had to make those painful decisions. In one case, that of Polaroid, the decision was to stop making instant film, a product deeply linked to the company’s identity. They have just announced that they plan to close factories in Massachusetts, Mexico and the Netherlands that make instant film. They’ve stopped making instant cameras for some time now. The other, even sadder case is that of Toshiba, whose virtually stillborn high-definition DVD format has now lost out in the standards wars and will be discontinued.
Fans of the instant film format are howling, but the relentless realities of declining sales and the relegation of instant film to a footnote in the photography industry leave Polaroid with few options.
The good news is that perhaps a smaller company will license the rights to manufacture the instant film and keep some supply available.
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- Posted Rita McGrath on February 20, 2008
Debt got way out of hand
It’s stunning to read about how leveraged our economy is, and how painful the de-leveraging process is likely to be. Still, there are bound to be opportunities for the enterprising in all the pain around us. A real industry shift if ever there was one.
For the moment though, I’ll settle for reflecting on a couple of grim statistics, courtesy of theWall St. Journal.
Total Household debt rose to $13.6 trillion by the third quarter of 2007 from $7.2 trillion at the beginning of 2001 - a 10% annual growth rate.
Today, one out of every seven dollars of disposable income earned by Americnas now goes toward paying down debt.
One out of seven! That’s stunning.
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- Posted Rita McGrath on February 20, 2008
Analysts’ asymmetrical recommendations
One of the most interesting aspects of our financial markets is a fundamental asymmetry in reality versus analyst recommendations. Simple math suggests that half of all stocks will under-perform the market average, yet analysts persist in offering “buy” (48.8%) or “hold” (45.7%) recommendations, leaving the “sell” category pretty poorly represented (5.5%). These numbers are as of December, 2007, as reported by the Wall Street Journal on February 16.
Even more interesting, the trend away from issuing “sell” recommendations has accelerated somewhat since 2003. The Journal provides the information in graphical format.
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- Posted Rita McGrath on February 19, 2008
The curse of past success: Fast Strategy Diagnostic
Doz and Kosonen have a most interesting diagnostic tool posted on their website strategic agility, which is linked to their book Fast Strategy. If you are concerned that your organization may have enjoyed too much of a good thing in the past and may be ill-equipped to cope with future challenges, it’s a sobering exam to take.
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- Posted Rita McGrath on February 10, 2008
