As the mother of a teenage boy who just had a REALLY big birthday, I've had more than a passing interest in the Xbox 360 saga. I just can't understand it - here we are, months after the thing was released on November 22 and my local Best Buy guy still breaks into hysterical laughter every time I inquire about getting one. So with the aforementioned Big Birthday on the horizon, I had to resort to desperate measures.
What I find interesting is that the xBox is undeniably popular -
Microsoft can sell every one they can ship. The trouble seems to be shipping them. Indeed, according to Fortune, only 600,000 shiny new xboxes were sold, in contrast to Sony's PS2, which sold 1.4 million units in the same period in December. So what do you think? Will Sony ultimately benefit from the customer frustration? Or will the xBox allure carry it forward into the period when Sony's cool new game is supposed to come out?
Mothers everywhere want to know.
Oh, and I did succeed in getting one. Joy at our house!
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- Posted Admin on January 27, 2006
Last year, my good colleague Geoffrey Moore asked me to have a look at a book project he was working on, which I did. The book is now out and I think it is terrific. He argues for continuous innovation, identifies different kinds of innovation that make sense in different boundary conditions, and (one of the best ideas) suggests frequent recycling of resources rather than the grow-and-downsize pattern a lot of companies get themselves into. It's called "Dealing with Darwin" - available on Amazon. Definitely worth reading for anyone concerned with innovation and renewal of their organizations.
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- Posted Admin on January 27, 2006
I was recently asked to comment on the use of food as a differentiator for other products and on alliances between food businesses and other kinds of businesses. Exactly the kind of thing we call a parallel differentiator in MarketBusters.
We feature a number of plays on the food and other-services-pairings. They fall into a category we call “parallel differentiators” in which the point that differentiates the experience is not the supposed main service, but the add-ons that go with it.
For instance, when MacDonald’s ran its hugely successful teeney beanie baby campaign, people were literally coming in, buying the kids meals and tossing the food. This led one wag to describe McD’s as a toy company that incidentally provides meals.
The opportunity to use food as a differentiator is only increasing, as the whole food consumption experience moves out of the kitchen and goes to … well, just about everywhere.
Many beauty salons now offer cocktails and bar snacks to their higher-end clientele, changing the traditional experience into one that is more hip and interesting (and incidentally giving people a nice place to hang out).
In a lot of companies, the quality of the free food is boasted about as a major employee perk. At Bloomberg’s world headquarters, for example, the range of items available, from high quality granola bars to muffins and donuts, and snacks throughout the day is just amazing.
Any retail establishment that caters to large numbers of families is intensely aware of food issues. There’s nothing to spoil a sale faster than a hungry, cranky toddler who steals your customer away from your premises to go somewhere where food is available. That’s why they sell meatballs at Ikea, hot dogs at Target and goodness knows what at Wal-Mart. Come to think of it, the behavior isn’t all that different from the somewhat older hungry, cranky types filling the permanently packed café at Saks.
Ordinary small businesses use food to show appreciation for customers’ business – as in a car dealership that offers coffee and bagels while you wait for service, or my favorite appliance store that has a barbecue every summer weekend.
Business class hotels use food to make the experience a little more human – the Doubletree and other business-focused chains may not send a “boy this is going to be fun” signal to their typical harried guest, but the warm chocolate cookie at check-in often brings a smile. And the happy hours and hot breakfasts are amenities clients actually come to look forward to.
Synergies go the other way too as food purveyors find that adding additional items spices up their margins. Starbucks is a great example – from forays into kitchen goodies and CD’s, I see that they are now looking to add video distribution in their stores.
And of course, the consumption of food on the move here in the US has totally changed the competitive dynamics of many industries, including automobiles and airlines. Some people buy cars for the quality of their cup holders because that Big Gulp eases the commute. This even goes to a second-order development, as food manufacturers make cereal, snacks and other products specifically designed for cup holders.
The point about food and business synergies is that by working together, they can create a better, nicer, friendlier or more convenient customer experience. Customers that have good experiences are likely to be more loyal customers. Companies with more loyal customers do better than companies whose customers are indifferent.
Pass me a doughnut?
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- Posted Admin on January 27, 2006
In our first book, The Entrepreneurial Mindset, we suggested that companies achieve focus by allocating time to projects across different levels of uncertainty. In reading the Business 2.0 of December, 2005, we discovered that one of the darlings of today's investors, Google, practices the same technique. Googlers call it the 70/20/10 rule:
"We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. And then 10 percent of our time should be on things that are truly new.
An example there would be the Wi-Fi initiative..." Citing CEO Eric Schmidt.
Very reassuring to learn that the advice works well in practice. For more, see the article in December 2005 Business 2.0 "The 70 Percent Solution".
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- Posted Admin on December 31, 2005
So here's a marketbuster waiting for a solution: Email! Everybody knows that it can be a great benefit, but it also has major downsides. Reports Bary C. Sherman of the WhiteCollar Productivity Index (WPI) (from Business Week December 19, 2005):
The average executive in the U.S. is recieving 200 e-mails per day AFTER spam is extracted.
50% of those mails (after spam) are of no value to the receiver.
Administrative and new staff get about 50 emails a day of which 30% are of no value.
he estimates that an organization of 1,000 people will waste about 36,000 hours per year and a cost of $1.8 million in productivity just to scan and discard unwanted and useless email.
Doesn't this strike you as a problem someone is going to make a lot of money solving? if only we knew how...
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- Posted Admin on December 31, 2005
