Observe Business

Observations on Business, Government Policy, and Strategy

Articles comparing cellphone technology in the US versus Japan / Korea / China usually center on how backward America is. And it is true, we in the USA do not have the advances they have in those countries.

This article says the same thing about TV over mobile but it completely misses the point. (Archived Article)

The article says TV over mobile is very popular in, and will be rolled out in ‘South Korea, Brazil, Peru, Argentina, Russia, Nigeria, Thailand, Egypt and China’.

The one thing that all of these countries have in common is PERVASIVE, LARGE SCALE PIRACY.

In the USA the reason we don’t have TV over mobile and over Internet(except for Hulu/netflix)  is that people in the USA actually earn a living from intellectual property. There are tens of thousands of people, from stagehands to Wall Street types, who earn money because someone somewhere has to pay real money to view a TV show or a movie.

And that is why a lot of this technology comes late to America. All the owners of the rights have to make sure that their rights will be respected.

Sorry, NYTimes, but this article is definitely a stinker.

This article in the NYTimes (Archived article)talks about how a subsidiary of Wal-mart, Sam’s Club, is tailoring deals for shoppers. Basically, they keep track of what you buy and offer your special deals/discounts based on your purchase history.

This is a long time in coming. Like most Americans, I have a supermarket loyalty card that helps me get substantial discounts once in a while.

As a Product Manager, I wonder when companies will take the next step, and start to customize the experience for the user. My supermarket knows by now that I buy a lot of pineapples but hardly any grapefruit. They know I buy eggs but never pay for the premium eggs.

But they don’t use this to target me as a user! Why not send me a customized list of coupons via email every two weeks? Why not deduce that I happily pay more for organic and try to sell me organic? It offends me to no end to have them collect all this data and do nothing with it. Maybe a smart short-seller out there could try to greenmail Kroger into improving their loyalty program.

I predict the customization will slowly happen and take over everywhere. The big story here is not just that Sam’s club is starting to do customization, it is that this is being done by a subsidiary of Wal-mart. Wal-mart is America’s largest retailer and one of the most sophisticated users of IT on the planet. Wal-mart stores do  NOT have a loyalty program, which is a fact that blows my mind. How could Wal-mart NOT  have a loyalty program?

Imagine the increase the sales that Wal-mart could get with a well-designed loyalty program. Purchase data on millions upon millions of consumers, which can be analyzed n ways to provide customized deals and sales. Wal-mart could then wield even greater leverage on their inventory, and squeeze more profit  out of the retail dollar. Think about how much money Wal-mart could save if they could reduce their inventory carrying costs by even 1%. Wal-mart  could even modify and fine-tune their vaunted supply chain more. Both can be used to save money. When you approach close to half a trillion in retail sales, even a 1% increase in some metrics is HUGE.

I’d like to point out that I am not taking a side on this issue.

I am restricting myself to the decision of how Israel handled the aid flotilla situation.

Israel treated the aid flotilla as a military exercise instead of a PR action.

The entire situation was ready for the news media. You can just see the headlines: “Unarmed, peace-loving activists who are trying to help are instead attacked and killed”.

Israel should not have boarded the ships  that made up the aid flotilla, especially with armed soldiers. Given the amount of animosity towards the Israeli military, it is highly unlikely they would receive a cordial reception. I mean,  did they think the activists would just sit and welcome them? Offer them some biscuits and hummus maybe?

If you send armed soldiers on board a ship full of disgrunted, angry, passionate people, you have to prepared for the eventuality of a firefight, one that could get very messy.

Here is what they should have done, if they did not want the ships to reach Gaza:

1) Israel should have disabled the propellers of the ships in the aid flotilla, and let them just drift around in the Mediterranean. If the people on the ships wanted to get off, they would have to board a ship provided by the Israelis-which would take them back to Cyprus. Israel should have insisted on a neutral party towing the ships back to a non-Israeli port.

2) If there was a need to an assert control, they should have tried nonlethal means. Israel should have fired hundreds of tear-gas shells at the ships, sickening those onboard until they voluntarily agreed to board a ship provided by Israel-to take them back to Cyprus.

3) Israel said they would take the aid supplies brought on the ships to Gaza. This is a miscalculation because it allows the activists to claim that they succeeded despite the Israeli action. Israel should have said that the ships in the flotilla, all of which are now disabled, would be left to drift unless the ship owners made arrangements to have the ships towed back to a neutral port. The aid supplies would stay on the ships.

The point is that Israel should have thought of this as PR exercise, not a military exercise.

Israel handed the activists a tailor-made, read for TV PR victory. All of the activists and soldiers who were killed – a tragedy, because none of these people needed to die in order for Israel to successfully accomplish an interdiction.

I have an intellectual interest in airlines, car rental companies and hotels. In all cases, the companies have made huge capital investments and have to eke out a living in a very competitive environment. Getting even an extra 1% from every customer is huge for these companies.

I was making the rounds of the car rental sites and came across this link for ‘Street Fleet’. Since I am always curious about product offerings, I clicked on it. Here is what I saw:

Budget's Street Fleet program

I read this and it made no sense to me. First, we start with the misspelling of the word ‘guaranteed’.

Then, I am trying to figure out what they are offering here. If I book a ‘Street Fleet’ vehicle, apparently, I will get that vehicle when I arrive if it is available. Isn’t that how the entire rental car model works? How is this different?

I think it’s silly how they say  ’our reservable collection of makes and models’ in one sentence and then say ‘if available’. Either it can be reserved  or not.

They say they have a Cadillac CTS or a Chrysler Crossfire-that is a definitely a good value proposition. These are unusual cars.  They just have to do a much better job of selling it. You can’t call a premium purchase ‘Street Fleet’. It should be something like ‘Prestige Collection’.

Bloviating away

This response is so…so…mushy. It’s like a cheap subway sandwich that has been left out in the rain. It is low quality, tasteless and inedible.

CNN starts out by asking a straightforward question, saying ‘Is Hillary doing the right thing?’ OF COURSE SHE IS NOT.

Let’s role play this:

Hillary: Fess Up! Tell the truth!

North Korea: Ok, we admit. We blew up the ship.

Do you think this would ever happen? No, neither did I.

But Zakaria’s answers are utter and complete milquetoast.

1. ‘..the behavior does seem to cross a line.’

Really, Fareed? Blowing up a ship of a country you are technically at war with crosses a line? This reminds me of those cartoons with Bugs Bunny and Yosemite Sam, where Yosemite Sam would draw lines in the sand Bugs Bunny would keep crossing over them. How does this behavior cross a line? The North Korean attempted to assassinate the South Korean president in 1987. Did that cross a line, too?

2. ‘..North Korean have to understand it is not going to be business as usual after this’

That is exactly what will happen. A few words, some insults hurled, and South Korea will go back to  playing Farmville.

3. ‘..What has been particularly productive is that US and South Korea are ENTIRELY (my emphasis) on the same side of this’

Under what circumstances would they be on different sides? These two countries have ALWAYS been on the same side when it has come to North Korean military action.

4. The second paragraph is blah blah blah blah

The fact of the matter is that we don’t need to say one word to North Korea. North Korea does not matter at all in this situation. The player to speak with is China. North Korea exists because of China. 99% of its trade is with China. Its entire existence depends on Chinese goodwill.

North Korea is  a bargaining chip for China. At one time in the past, China didn’t have many bargaining chips, and so North Korea was valuable. These days, with them owning 1.3 trillion of treasury bonds and being the world’s factory, the chip value of North Korea has dropped very much.

If the US and South Korea want to take care of North Korea, here is what they should do:

1. They should recognize that a North Korean collapse is in no one’s interest.

2. They should recognize that a war is going to be very costly, with the cost running into the trillions. And it is going to end in a stalemate anyway, because that is what China wants. This is China’s backyard, and they will not allow a North Korean defeat.

3. The US and SK should make a list of the top influencers in North Korea. They should then invite them for visits to the US and South Korea. Bring them over, wine them, dine them, take them and their families to Disneyland, take them shopping at Wal-mart, whatever they want. Give the North Korean leader a state visit. (Hey, we shook hands with Stalin). He likes Hollywood, so line up all the movie stars for a meet-and-greet. They should give out tens of thousands of scholarships to North Korean kids. Flood the country with iPads. All this will cost less than one B-2 bomber.

All this is critical to the one thing that the NKorean leadership needs in order to make peace: the ability to save face. With all this goodwill that we will buy, it will let them save face and say maybe the West isn’t so bad. The world has changed. It is all one giant misunderstanding. The West is sincere in wanting to make change. I can envision a come-to-Jesus speech by Kim Jong Il like the one Emperor Hirohito gave after they dropped the second bomb, but without all the radiation.

We should make it very clear that we have no interest in changing the N. Korean leadership. In fact, we want them to stay exactly where they are. We should guarantee their security. We will even send them a planeload of Cognac once a month.

All this will lead to a drawdown in the N.Korean military forces. SKorea will get a huge chunk of cheap labor, and a lot of it can be former NKorean army soldiers.

And China will love it most of all, because (1) does not force them into arbitrating or supporting a war, (2) does not cause a refugee problem, (3) does not expand SK all the way to the Chinese border and (4) all these North Koreans are going to gorge themselves on Chinese goods that the US is going to pay for, thereby keeping the Chinese economy going.

If President Obama implements this plan, he will be the first person in history to get TWO Nobel peace prizes. I’ll be happy if he gives me a ride in Air Force One. I’ll be really happy if he gives me a shout-out in the peace prize acceptance speech!

LoJack Ad

LoJack Ad

Notice how it says ‘Apply Here’ not ‘Order Here’. They are creating the illusion of a membership instead of a product. Very smart.

Amex has a ‘Black’ card that all the rappers get giddy over. So Visa, in its attempt to move itself from Toyota Corolla status up to a BMW status, has come up with a ‘Black Card’. They call it being exclusive. How exclusive is it? Not very.

Here is the ad:

Not very exclusive...and a waste of money.

Not very exclusive...and a waste of money.

So where does the 1% come from? They promise to limit it to 1% of the USA population. That’s about 3 million people.

If they get 3 million people to accept this card, their marketing team will be garlanded in gold and bathed in caviar. It will never happen.

Why? Let’s analyze their marketing.

1. To catch your attention, they have a pretty woman say she likes being in the 1%. But she is a no-name model/actress/whatever. Her IMDB shows her as doing NOTHING. Could they not get anyone better? With better name recognition?

2. 1% of the population is 3 million. That is a huge amount for a card. It also shows that they prey on people’s ignorance to apply for this card.

3. Exclusive Rewards Program: They offer 1% cashback or airline points. Nothing exclusive about that.

4. Patent Pending Carbon Card: This is the biggest joke of all. Patent Pending means nothing, it just means someone scribbled on a sheet of paper and sent $1,800 to the patent office. Anyone who thinks this is cool is a total tool.

Anyone who ponies up $500 to get this card, should have their brain examined.

I like it that Citibank is accepting that not all of us are blond and blue eyed with perky smiles:

Citibank landing page Indian couple

Citibank landing page Indian couple

student-loan-dolt

So, here we have someone who ostensibly was able to get student loans to STUDY. And they can’t even figure out how to find out, with a few Google searches, what to do?

I also find it completely unbelievable that any collection agency would make an actual threat like that. Most of them just don’t care…they try, they fail, they write you off, and move on.

Student loans are a multibillion dollar business subsidized by the taxpayers of the United States. And like most government run programs, they rate little more than a C-. In this case, they rate an F. This person should never have received a student loan.

fodder-twitter-sep-11-2009-upload

So I tried to upload a pic to my twitter account…and it says that my tiny little favicon is too big. I expected more from a company that could have squeezed half a billion out of Facebook.