I caught an article the other day on how Nintendo is expecting shortages in it’s Wii production through the holidays. This has been a problem for the last three years.
Historically, Nintendo tends to be a little conservative in it’s production, no doubt due to it’s smaller size, it can’t afford over production like many of the big companies such as Sony or Microsoft; still, Nintendo has years of experience in the industry, and it’s a little surprising that they are having difficulty meeting demand after three years of sales. It just goes to show however that the innovative nature of the Wii is a great selling point, and shouldn’t be underestimated. Sales for this system just keep going up and up.
The thing about retail and the seasonal shopping season is this, most retailers do not turn a profit until after the holiday season. Without adequate and in demand products on the shelves, sales numbers go down because retailers don’t have anything to sell. Retailers don’t like this, and may give you less favorable shelf space in favor of products they can sell more of…reducing your marketability.
Further, Nintendo in their infinite wisdom has lost the sale of the Wii’s it couldn’t produce, which is less money for them initially, and more on the back end since they’ve failed to sell any periphreals or games for those systems. Also, if a customer decides to buy a X-Box or Playstation instead, then the entry cost for that customer has just gone up…because it’s going to take a lot more marketing dollars to get them back.
Near as I can figure, that’s why X-Box 360 is the number one system right now, since the system is cheaper and more available than the rest.
Honestly though, I think I’d rather have a Wii…they make it look fun.
So after all the hype around Google and Chrome in the last couple of weeks, I got to thinking about Microsoft, and how they were chalking up these days. The funny thing is, they really aren’t that exciting.
A couple weeks ago they bought Bloomberg for a bunch of money just so they could get their hands on Ciao.com, which is essentially one of a thousand sites set up to drive web traffic to other peoples sites…in this case retailers, but why did Microsoft require, what amounts to a billboard on the side of a concrete wall, in order to make their brand more visible? I already know who Microsoft is…in news and media this is just another tiny mark on their earnings board.
The Less is More Philosophy at Large
Microsoft over the years has relied on quantity over quality in regards to their brand. More is better has always been their slogan. It’s a Bill Gates/Steve Ballmer tradition that has worked well for them, but with other companies entering the marketplace, such as Google, Apple, Firefox, and Blackberry; each with better brand identities and a more focused business plan, Microsoft is failing to compete.
The Perfect Example of the Microsoft Strategy…think of this as being applied whole company.
The other day I watched a news program on CNET or CNN, I can’t remember which, advertising the newest version of the Windows Mobile platform. The guy from Microsoft that introduced the product seemed uncomfortable, and honestly the interviewer wasn’t giving him much of a chance to speak, so I really can’t blame him. However, the whole interview just demonstrates the lack of esteem that Microsoft products are held in these days.
In the world of cell phones for example, the products Microsoft presents lack the luster of products such as the Blackberry with it’s proprietary OS, or Apple, with it’s scaled down version of OS X. In the Blackberry, we have a product that is ergonomic and sensible, something that makes people want to pick it up and play with it. In the IPhone, we have something that has a little flair, but is still practical enough to use from the very first moment you pick it up. What I would compare Microsoft’s products too, and honestly their marketing in general, is that hunch back with the lazy eye from Young Frankenstein; you just keep looking at it, but that eye never goes away.
Most of their products are a little ugly. A little too techie maybe. Not organic enough. Not intuitive enough. Just something isn’t right about them. It just screams, stay away from me, I don’t want you. If I saw one on the counter next to one of the other two phones, I dare say it would probably scream at me if I picked it up.
Thinking back to the monopoly lawsuits Microsoft has gone through over the years, their branching across categories and industries, strong arm tactics, guerrilla warfare tactics and the like, their products mirror their corporate philosophy. In fact, it was the simple act of Bill Gates quitting as CEO and moving into a philanthropic organization that really gave Microsoft any sympathy in the media. Let’s face it, Bill Gates is the founder, and the face of Microsoft, and what he does dictates how the company is perceived.
The Current Face Of Microsoft
Microsoft is pretty well cemented in the workplace with products such as Windows Vista and their Office line. Their real world media empire is fairly secure as well. Companies such as Bloomberg help add to this content, but the company as a whole has an image issue, and all the synergy in the world won’t change that unless the leadership at the top takes the necessary steps to kick this company into gear.
Their brand has to change with the times, and become something that people want, not just require. Microsoft has the resources to do it, but it’s going to take a lot of blood sweat and tears to change a company culture that has long been mired in making the market come to them instead of making products for the market. It’s about time they recognized that competition is good for them…it promotes innovation…and they need some.
A very good reverse history of Apple Inc using video to show how the companies product line has evolved as the company has grown. I’ll be posting a similar article about Microsoft next week. Pretty cool.
A Brief Reverse-Chronological YouTube History of Apple
An interesting, albeit short, news piece about Googles ten year run to becoming the worlds leading search engine. The piece also covers growing issues such as monopoly concerns with their Yahoo deals, growing competition among rivals and the like.
Like I mentioned last week in The Search For Google Alternatives, with the release of Chrome web browser, as well as the Android mobile operating system, Google has positioned itself as the dominant brand on the internet, well ahead of past contenders such as Microsoft, Yahoo, AOL, etc. According to one statistic posted on a Microsoft blog, Google currently makes up 70% of all web searches on the web. With the addition of Yahoo to their advertising stable, this statistic grows considerably. So essencially what the news piece is saying is that Google has become a vertical advertising monopoly.
To be honest, Google doesn’t really control the internet. I can go to any site I want regardless of weather Google wants me there or not. I can pick any advertisers I want on my site including Amazon, Google, and currently Yahoo, and the only stipulation I have is that they provide relevant advertising and hopefully…and I said hopefully…some money. The thing that makes their advertising better than others is brand recognition, since people can advertise through any service they so choose. Technically it’s up to individual sites to choose whom they use as advertising, and if Firefox or Microsoft came up with a better system of advertising then I’d use that. If Cuil.com decides one day to make an advertising program based on onomatopoeia and fuzzy logic, then I’ll use them too. As far as Yahoo plastering their site with Google ads, so be it, they have the authority to do so. The case itself is kind of crazy, and the fact that everyone loves to hear about the Google success story, and the fact they do well enough at matching ads to content, are the only two reasons they don’t have much competition.
Just remember how it works though…if they ever do become evil, there will be ten companies trying to pick up the slack…and six of them will be run by former Google employees, two from Linux Redhat, one from Firefox, and one from some guy in a bar that wrote his idea on a napkin and someone gave him a bunch of money for it. Googles going to be screwed.
A few of the products were quite ingenious, such as a Finding Dulcinea.com, where web editors actually search for the best web sites to visit in order to answer questions and only give you the best twenty results…it sort of reads like an encyclopedia of web browsing.
Another example is Cluuz.com which gives site searches based on symantics…it reads like a dictionary.
Finally, Cuil.com, which says it has access to more sites than Google. That may mean they turned some of the porn filters off, or it may mean that they are developing a site using fuzzy logic search rather than popularity metrics.
According to the site:
Rather than rely on superficial popularity metrics, Cuil searches for and ranks pages based on their content and relevance. When we find a page with your keywords, we stay on that page and analyze the rest of its content, its concepts, their inter-relationships and the page’s coherency.
As it were, I’m just beginning to think that Google is nearing that place in their career where they may just be brushing up against outsider status.
With new companies beginning to find niches and developing ways to do things that are different than the preconceived, it’s only a matter of time before one or two make a break from the pack and try for a spot at the top.
Further, with Google breaking into markets such as Google Android, Google Doc, and Google Chrome, it’s not long to wait before we see an operating system with Googles name on it butting up against Windows and MacOS; vying for global supremacy. They have a few tickets for the big games now, and that’s just why Microsoft offed Netscape ten years ago.
I’m not saying that Google is Microsoft and that they’ve reached some pinnacle and are going to knock down anyone who climbs a bit too high. At this point they are noted for being the nicest kid on the playground, but it’s interesting to think that they might just have matured enough to be the elder statesman in the development community, and it should be fun to see how this progresses.
Forbes.com has a good article on why American car makers have lost market share of car sales in the U.S. economy.
Of note:
How this disaster in cars came to be is no secret. The Detroit three concentrated on pickup trucks and SUVs, and in Chrysler’s case, minivans as well. The products are generally good, but the companies ignored their passenger-car businesses.
Why? At General Motors, the executives came from the financial side and they considered cars commodities that were not worth the investment. At Ford, a past chief executive was interested in everything but the automobile business, and at Chrysler, the American executives were losing control to their German masters.
That is why we had inferior, dull and boring designs, cheap-looking interiors and motors and transmissions that were years behind the foreign competition. As a result, many American consumers remained loyal to domestic trucks, but they favored passenger cars with foreign nameplates.
This is starting to change. GM and Ford have improved several of their car models to the point that they are competitive with the best of the foreign brands. At GM, the Chevrolet Malibu and Cadillac CTS have received a great deal of praise from the automotive press.
An interesting article on natural gas powered cars, and why Utah is leading the nation in their use. According to the article:
The word about natural gas cars has been spreading in news reports and by word of mouth, and so many people in Utah are now trying to get their hands on used natural gas vehicles that they are drying up the national supply. Used car lots are stocking up, and beginning to look like county government parking lots with multiple lines of identical white Civic GXs once used in out-of-state fleets.
In fact, some unique factors apply in Utah. Natural gas prices at the pump here are controlled and are the cheapest in the country, while the price of conventional gasoline is one of the highest. Questar Gas, the public utility, has compressed-gas pumps around the state open to the public, a fueling infrastructure that few states can match.
Apparently cars that run on natural gas produce 20% less emissions but only get half the gass mileage of a normal car. Since Utah already has the infrastructure in place for these vehicles, adoption of these automobiles came as a natural extension of peoples inginuity. Just goes to show what people can think up when they put their minds to it.
With government incentive programs and legislation pushing hydrogen fuel as a future resource, this may be an indicator of things to come. Until then, it’s wait and see.
I’m still not sold on pickup trucks as an investment strategy, but Ford has a lot of history with the product, and people seem to love them, especially in the central United States. As it were, my brother used to have a Ranger, and he loved it even though it handled lousy and ate all his gas money…go figure. The F-150 is a little more stylish.
Ford’s announcement that it has plans to use a new fuel efficient engine in it’s F-150 by the year 2010 (same year as the Chevy Volt test fleet) is big news. The EcoBoost engine uses turbochargers and direct injection of fuel into the cylinder to boost engine performance. And truthfully, this announcement is nothing less than a Godsend for the ailing carmaker…we’re talking nothing short of a miracle for a company that specializes in trucks.
…the EcoBoost can deliver V-8 power with a V-6 engine, or six-cylinder power with a four-cylinder engine, Hinds said. The engine will offer truck buyers better gas mileage with improvement in torque and in horsepower at higher engine speeds, he said.
Apparently the engine is being broken in with the new Ford Flex and Lincolm MKS.
As it is, the one problem I’ve got with a green engine in a pickup is customer adoption…which Ford has though of as well:
Hinds said Ford’s strategy for producing more environmentally friendly vehicles, in the short term, involves incorporating existing technology in more of its car and truck models. He said the company will continue to make the F-150 with a V-8 engine, as well, to cater to those buyers who may not be comfortable with the EcoBoost technology at first. He would not specify what the split of EcoBoost-to-V-8 engines might be.
None the less, this is great news for Ford and truck owners everywhere.
General Motors Corp. (GM), the world’s largest automaker, said Tuesday it is restructuring its engineering and design operations to better leverage global resources, accelerate product development and, ultimately, reduce expenses.
“GM’s future success in the global automotive marketplace will depend heavily on our ability to fully leverage our broad and deep resources, especially in the critical area of product development,” GM chairman and chief executive Rick Wagoner (search) said in a statement. “These changes will accelerate our efforts to get more great cars and trucks to market faster, to provide more value to our customers and to increase our global sales.”
These days, with the release of plans for the Volt and subsequent redesigns of their product line, downsizing their truck production, expansion into foreign markets such as Europe and China, the fruits of their labors are finally being realized.
1. Further salaried headcount reductions in the U.S. and Canada in the 2008 calendar year
2. The elimination of health care coverage for U.S. salaried retirees over 65, effective
January 1, 2009
3. No new base compensation increases for U.S. and Canadian salaried employees for the
remainder of 2008 and 2009
4. No annual discretionary cash bonuses for company’s executive group in 2008
5. Reducing truck capacity by 300,000 units by the end of 2009
6. Reducing and consolidating sales and marketing budgets
7. Holding engineering spending in 2008 and 2009 at 2006-2007 levels
8. Cutting 2009 capital expenditure plans to $7.0 billion from $8.5 billion
9. Significantly reducing spending for non-product programs
10. Taking aggressive actions to improve working capital
11. Suspending future dividends on common stock, effective immediately
12. Raising $4 billion to $7 billion through asset sales and financing activities
In the last few months, GM has aggressively tried to meet these requirements.
-With the public press release last week concerning GM’s early retirement package for 9000 workers in which a plan was stated to make 20 percent cuts to their salaried work force. Strategic closings are not unheard of in the industry as a whole. It’s almost a given that there may be some downsizing, though GM has gone through several plant closings in the last few years, so this may limit the impact.
The West Mifflin plant, which had about 350 workers last year stamping parts for some 200 GM cars and trucks, is down to about 208 employees, Mismas said.
The West Mifflin plant had been targetted for closing in 2007, as outlined in a cost-cutting restructuring program aimed at slashing costs by $7 billion. GM made that announcement in November 2005.
-Other moves to cut costs can be seen in the proposed sale of GM’s Hummer subsidiary, which has seen sales plummet 40 percent this year, and while lucrative in the past, has fallen on hard times with rising gas prices and consumers love affair with more environmentally friendly vehicles such as cars. While proceedings have been slow, a sale of Hummer would be a boon to their bottom line.
-The dividends were suspended which should create more liquid cash for new product development.
-Advertising for major events such as the Academy Awards have been all but done away with, though advertising as a whole seems to be at an all time high. I’m seeing nothing but GM on television and the internet these days. The employee discount program even has me looking at a GM, and I have a Camry.
-Finally with the announcement of the Chevrolet Cruze, the restructuring of a plant in Lordstown, OH to produce it, and the announcement that GM is asking for $50 billion in federal loans to build more fuel efficient cars, it’s obvious that big things are happening in Detroit.
The $50 billion dollar loan is an interesting side note as far as the US government is concerned, since support of American interests in business has been a high priority with them in recent years …especially with Bush in the presidency. Now is a pivotal time for American manufacturers, with foreign car makers a few steps ahead; without support and a solid plan they could easily falter. I, however, just don’t see that happening. I think they’ll get the money they ask for…most of it anyway.
So what does this say about GM?
GM is backing up what it says it is going to do, and while downturns in the market can’t always be anticipated, they’ve laid out a plan and are sticking to it. They are consolidating their dollars and moving funding toward research and production. The only thing they are lacking is a surge in public support for their product…something that looks to be on the horizon if things hold true to form.
On the heels of the GM Volt and all of the renewable energy articles I ran across an article for the worlds Best Looking Solar Gadget Charger. I’m not sure I could muster up the strength to call it the best ever, but it is kind of a cool thing to look at…probably charges my IPod pretty well too.
