Small Business Posts Rotating Header Image

Chinese Try to Solve their Problems with India

Jul 25th, 2010
by eric.
No comments yet

Not so long ago, China has been in hot seat in India. Two of the Chinese biggest telecom equipment manufacturers namely Huawei and ZTE try to get New Delhi to reverse its policy prohibiting Indian companies from buying their Chinese made products. This is not just a small standing issue, as smaller companies from China are also facing their own problems.

It was said that the Indian government are trying to solve problems in their own country as they took steps to stop a flood of China-made phones entering the country. The phones are said to be made by Shanzhai or bandit manufacturers, specializing in producing inexpensive, no  brand phones. Indian partners often import them and stamp on a local brand name.

For several years, Indian sales of these gray market Chinese products have soared. Who wouldn’t want one, when the price is cheap, while the quality had vastly improved? In 2009, it accounted for more than 30 percent of the Indian Market, which can be translated to 40 million handsets, up from almost zero in 2007.

But the impending problem was that these shanzhai companies don’t put International Mobile Equipment Identity Numbers on their phones. Essentially, this could be a high risk for terrorist to attack which was what exactly happened in Mumbai on 2008, as owner’s identity would be very hard to track down.

Having tens of millions of anonymous cell phones in the country obviously creates a major security threat. So last year, the Indian government began forcing operators to disconnect phones without IMEIs.  But this move, including the latest against Huawei and ZTE, may be forcing some Chinese companies to rethink of India.

As an alternative, instead of exporting stuffs from China, why not consider branching out to the country? As such, it would create local jobs and many other positive benefits that would eventually win them some friends.

Posted in: Asian Perspective.
Tagged: · · · ·

A Case Study: How Lego Revive Its Brand

Jul 25th, 2010
by eric.
No comments yet

Lego is perhaps one of the best and popular toys for kids. It is educational, and most of all it develop kids mental and creative ability. That was before, as at one point in time, the toy became boring. It seems everything is just simply putting in blocks together, and deciding what you want to put up while making the best color combination of course.

Problem

The company’s problem began during the late 1990s when they stopped focusing on design.  They wanted to extend the brand by venturing off on wild forays into new product development. A good example if the Galidor, a legendary bomb inside the walls of Lego. The Galidor line was launched in 2002 and was all about action figures. But the action figures where quite different, it didn’t require building skills, the hallmark of the traditional Lego.

Moreover, they branched into a totally new business line in which they have little knowledge about. The company co-produced a kid’s TV show called Galidor: Defenders of the Outer Dimension. It was meant to sell their new toy line. But it sparked little interest and when it went off-air, the sales of the new toy line faded too.

Solution: Design Transformed

Just as design pushed Lego at the brink, it helped bring the company back. Instead of giving designers free rein to conjure up their most brilliant creations, Lego tied their hands. Instead of rubber-stamping nearly every request for a new component, what Lego did was simple. They put each one to a vote, and the highest vote-getters’ design are put into use. Thus, it eliminated rarely used pieces, slashing the total number of components to about 7,000.

Conclusion

Design is Lego’s key competitive advantage. Over the years, there were several players emerged including that of Mega Brands with nearly half the price cheaper.

But then, with the competitive and dynamic management team, if there is a reason they rose back in the market, then there must be a reason to stay.

Posted in: Management.
Tagged: · · ·

Start-Ups at a Record Low

Jul 25th, 2010
by eric.
No comments yet

With unemployment rate becoming high, it is expected that more and more people would decide to start up their own businesses. But the trend nowadays have been different, the number of high level job seekers exiting an outplacement program who start their own businesses has dropped tremendously in the first half of 2010. As a matter of fact, it has reached at its lowest on two quarter rate on record.

Challenger, a company that provides training and counseling to job seekers presented a statistic that indicated only 3.7 percent of job seekers who left the program started on their own compared to the 8.6 percent in the full year of 2009. This data, is based on a quarterly survey of around 3,500 people, including 75 percent to 80 percent former managers or executives.

Is life really that hard now? Furthermore, it was said that the reason behind was scarce financing and improving job prospects. The two factors are steering more of these workers away from entrepreneurship. Whether you’re starting a small business or you want to make a more scalable business and raise venture funding, either way the capital is harder to come by.

However, it might not be bad after all. As a matter of fact, it could be a good sign. The unemployment rate remains high, but job losses declined as more and more companies resumed hiring in 2010. Moreover, the private sector added about 600,000 jobs in the first half of 2010 compared to a loss of nearly 1 million jobs in the first half of 2009.

This signifies only one thing and the significance is obviously good – that people can now find more opportunities than before.

Start-up activity tends to drop at the beginning of a recession, spike at the end when unemployment is at its highest, and drop when hiring resumes. Right now, we are in the early stages of recovery when the fundamentals of the economy are still pretty shaky, but employers are just starting to add workers back to their payrolls. Startups improves as economy improves.

At the end, its your ball game, you can decide either way…

Posted in: Business Regulations.
Tagged: ·

Airline Industry Starting to Recover

Jul 22nd, 2010
by eric.
No comments yet

If you were able to see  raft of new airplane orders at the Farnborough air show in England, what would you think? Well, it only means one thing – a comeback for the world’s aviation business after seeing them dump for several years.

Simply, it was a sign that the aviation industry are recovering from recession with another slew of orders at the biennial Farnborough International Air Show not so long ago.

Flybe, a British no frills carrier topped the list of major buyers as it placed a 1.3 billion dollars order for 35 units of ERJ 175 Aircraft from the Brazilian maker.

But the huge orders doesn’t end there. Boeing said recently that it had agreed its second big order this week to supply Air Lease Corporation with at least 54 next-generation Boeing 737-800s. The first set are due for delivery on 2012, with an option for another six to follow.

Boeing also announced its commitment to deliver planes for the Royal Jordanian Airlines for three 787-8s, which have a list price of at least 500 million dollars per aircraft.

Also, the world’s biggest plane maker, Airbus, said it had reached a 5.7 billion dollar deal to supply Hong Kong Airlines with 25 aircraft – 15 of which will be the A350XWB model that is still under development.

Overall, the show totalled approximately 18 billion dollars in orders on its first day. Definitely, in the days to come it will sell more. And what does this indicate than a resounding and recovering aviation industry.

Truly, the new aircrafts are worth waiting with several new models coming in. But manufacturers need to make sure of its safety in terms of design and overall aspect of the carriers.

Posted in: Economy, Management.
Tagged: · · · ·

Microsoft Profit, Sales Up

Jul 22nd, 2010
by eric.
No comments yet

Microsoft Corporation, the world’s largest software maker reported an increase in profit while sales as at its highest in two years. The report signifies that consumers spent more for personal computers running the Windows Operating System.

Profit-wise, the company’s net income climbed to 4.52 billion dollars or 51 cent a share, compared to the average of 46 cents a share. The good news was reported by Bloomberg, who also reported a 22 percent increase in sales or equivalent to 16 billion dollars in revenues- the most in two years.

What made this possible? Well, Microsoft has been benefiting a lot from economic recovery, where spending of large businesses had increased. The company sold more than 150 million copies of its newest Windows 7, making it the fastest selling operating system in the Redmond, Washington-based company’s history.

Truly, this is an indication that enterprises are spending and that Microsoft has a product that caters to that need and are appealing enough to customers.

Stock-market wise, Microsoft rose to 0.4 percent in after hours trading 25.95 dollars after climbing 72 cents or 2.9 percent, to 25.84 dollars at 4PM New York time on the Nasdaq Stock Market.  The stock slid 21 percent last quarter, compared with a 12 percent drop in the Standard & Poor’s 500 Index.

Meanwhile, analysts had projected a total sales of 15.3 billion dollars for the fourth quarter which ended June 30. Also, net income in the fourth quarter of 2009 was 3.05 billion or 34 cents a share, on sales of 13.1 billion dollars – net income for the period included legal expenses, severance costs, and impairment investments.

The revenues are a total of several Microsoft’s division that included Server Revenues that was estimated to be about 4.1 billion dollars while Bing Gains Share rose to 12.7 percent.

Overall, Microsoft projected an increased of about 7 to 8 percent in technology spending for the whole year, which shall be a good sign for the company shall they be able to take advantage of the opportunity.

Posted in: Information Technology.
Tagged: · · · ·

Prominent Families Bid for Purefoods Ownership

Jul 20th, 2010
by eric.
No comments yet

San Miguel Corporation Chief Operating Officer, Ramon Ang said recently that Carlyle and the Gokongweis are the top two bidders for their hotdog unit, Purefoods.

The hotdog unit was said to be valued at 1.8 billion dollars, making it one of Philippines biggest food and drinks company. According to And, the decision has been made as they decide to put more focus and accelerate the expansion of faster growing business such as the energy,telecommunications,  mining, and power.

Also the sale is a bid to raise assets to fund expansion into industries. Since 2008, San Miguel has raised about 3 billion dollars from asset sale that has led to triple returns in equity.

Among other bidders are the Aboitiz Group, owner of the Philippines biggest transportation system, and the majority shareholder of Unionbank; and the Campos family, who owns closely held United Laboratories Inc., the largest Philippine drugmaker, and Nutri Asia Group, which bought out San Miguel in Del Monte Pacific Ltd.

However, if offers would not meet eye to eye, the Philippine-based company may opt to publicly sell the shares, as Ang himself once said, he plans to sell a 49 percent stake.

San Miguel’s A shares, which are reserved for Filipinos, declined 0.7 percent to close at 67.50 pesos in Manila. The company’s B shares, which don’t have ownership restrictions, fell 1.5 percent to 67.50 pesos.

Posted in: Asian Perspective, Management.
Tagged: · · · ·

Coke’s World Cup Song is the Champion

Jul 20th, 2010
by eric.
No comments yet

After all its not Spain, but Coke’s World Cup Song is considered to be the World Cup Champion. Waving flags only means one thing – associating the Coke Product to two things young consumers care most – Soccer and Music.

As such, Music industry executives have been making an unusual visit to Coca-Cola’s headquarters in Atlanta a gauge on how successful the World Cup Soccer Marketing blitz is. They simply want to learn how Coke turned a song entitled “Wavin’ Flag” by little known singer into a world cup anthem. As a matter of fact, the song hit 17 countries in less than a year. Truly, word of mouth is such a great thing in the music industry.

Initially, the plan was only to create a song good enough to entice stadiums. But along the way, it changed the way Coke works with many recording and entertainment companies. They exceeded expectations from the organization.

The result was emphatic! The musical centerpiece became Coca Cola’s or perhaps the world’s largest marketing campaign ever. It reached 160 countries, where they expect to boost volume sales to more than 6 percent, as four years ago they did the same in a smaller marketing effort.

The truth is, Coke did a very awesome job, as being able to tie the campaign to a song that easily crossed borders was critical. Coke had hoped to use of a single global theme that would save them 45 million dollars in costs. And right now, with the result, it seems like the savings had doubled because of the effectiveness of the campaign.

Now, the new challenge for Coke is how to discover new way to tie its brand to things young consumer care about without being heavy handed. They may even expand to video games among many other creative ideas.

Posted in: Advertising.
Tagged: · · · ·

Top Manager Goes Back to Banking

Jul 20th, 2010
by eric.
No comments yet

David H. Ellison began his career as a young bank analyst during the 1980s while working for Fidelity Investments. Through his job tenure, he learned one simple lesson – that if things at a company are getting better, you want to own its stock.  Today, Ellison runs two top rated financial funds namely the 284 million dollar FBR Small Cap Financial and the 46 million dollar FBR Large Cap Financial.

Not so long ago, he added that things are getting better for banks most especially small ones that can benefit from better credit conditions and consolidation in the industry.  He said, ”We’re in the process of going from ugly to O.K. in banking. If you ride the right horses, you will do all right.”

As prominent investors including Jeremy Grantham and Robert Rodriguez are wary of bank stocks, and well known analyst Meredith Whitney warned that banks may have to post additional reserves, Ellison believes otherwise. He contends that while overall borrowing volume is down, banks are lending to credit worthy customers and earning higher profit margins adding that this time is the best to make loans.

Ellison strongly believes that the financial regulatory bill that is still awaiting Senate approval after being passed by the house last June 30 will have a limited impact on small banks. The reason is that because they don’t invest so much in hedge funds or engage in any proprietary trading activities.

He also said that the rules will attack the big banks in the long run. Also, he contends that a continuing shakeout in the industry will eliminate weak players while allowing the surviving institutions to gain size and strength.

And the bottom line speaks about Ellison thinks the worst of the financial crisis has passed and that the small and large banks that survived will be highly profitable.

Posted in: Economy, Financing.
Tagged: · ·

← Earlier Posts