Best way to plan is to look backward

Invert, always invert.” Turn a situation or problem upside down. Look at it backward. What’s in it for the other guy? What happens if all our plans go wrong?

Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead — through sloth, envy, resentment, self-pity, entitlement, and the mental habits of self-defeat. Avoid these qualities and you will have success.

Tell me where I’m going to die, that is, so I don’t go there.

Charlie Munger quoted in Warren Buffett, The snowball, p. 770.

Reblog this post [with Zemanta]

 

Sony, Amazon and the pricing of “regular” books

Sony Electronics announced that it was lowering prices for new and best-selling books in its e-book store, to $9.99 from $11.99.

Book publishers have worried about the $9.99 flat price ever since Amazon.com introduced it for its Kindle reader in 2007, fearing that it could cannibalize sales of higher-priced hardcover books. -via NYTimes.com.

Considerations:

  • “We have to offer value. It’s clear e-books should be less expensive than regular books, with the savings on printing and logistics getting passed on to the consumer.”
  • “We all know that these companies are taking a loss and that’s not going to continue forever.”  “$9.99 has now become the effective price for e-books in August of 2009. Let’s just take a breath and see how long this lasts.”
  • In response to the $9.99 list price, some publishers are thinking about postponing the release of the digital versions of their most popular books, lengthening the period in which only the higher-priced hardcover versions are available. This is similar to the approach taken by Hollywood studios, which allow DVD sales and rentals only after a film has left theaters.
  • Sony’s price cut on digital books and the new devices may not be enough to help it catch up to Amazon.
Reblog this post [with Zemanta]

Google goes after Microsoft… and vice versa

Google with an operating system (Chrome OS) and Microsoft with a search engine (Bing).

What makes this battle all the more interesting is both the scale of the companies involved and the extraordinary differences in their ways of going about business. For all its size — and its occasional arrogance — Google still retains a willingness to experiment and risk failure in many directions at once. Microsoft, on the other hand, is unbelievably tenacious and holds an almost insuperable lead in market share. (NYT)

How to say niche differentiation strategy in French

The company, which has a diverse portfolio of handbags, perfume, cosmetics, clothing, jewellery and shoes, prides itself on being the ultimate purveyor of luxury, and sets its prices accordingly. Handbags start at around $1,500, and some sell for over $30,000. The firm’s signature perfume, Chanel No. 5, is the world’s bestselling fragrance, and costs around $100 a bottle.

The exclusivity of the brand is one of Chanel’s biggest assets, Ms Chiquet insists. After becoming Chanel’s global chief executive in January 2007, having previously been president of its American operations, she set herself two main tasks: to “upgrade” and to “modernise”.

via The Economist

Print media: driving forces meet business model

The Christian Science Monitor will cease publishing a weekday paper. Time Inc. is was cutting 600 jobs and reorganizing its staff. The largest newspaper publisher in the country is laying off up to 3,000 people. The Los Angeles Times‘ newsroom is half the size it was just seven years ago. The 15th-largest paper in the country is reducing its editorial staff by 40 percent.

The paradox of all these announcements is that newspapers and magazines do not have an audience problem — newspaper Web sites are a vital source of news, and growing — but they do have a consumer problem.

Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web.

Historically, people took an interest in the daily paper about the time they bought a home. Now they are checking their BlackBerrys for alerts about mortgage rates.

“The auto industry and the print industry have essentially the same problem,” said Clay Shirky, the author of “Here Comes Everybody.” “The older customers like the older products and the new customers like the new ones.”

For readers, the drastic diminishment of print raises an obvious question: if more people are reading newspapers and magazines, why should we care whether they are printed on paper?

The answer is that paper is not just how news is delivered; it is how it is paid for.

More than 90 percent of the newspaper industry’s revenue still derives from the print product, a legacy technology that attracts fewer consumers and advertisers every single day. A single newspaper ad might cost many thousands of dollars while an online ad might only bring in $20 for each 1,000 customers who see it.

Generational tsunami ahead

By 2015, the United States will have more than 45 million households with people from 51 to 70 years old, compared with about 25 million for the “silent” generation, born from 1925 to 1945. Their real disposable income and consumption will be roughly 40 percent higher, and they will control nearly 60 percent of US net wealth.


A new version of Porter’s five-forces model

Professor Michael Porter published “How Competitive Forces Shape Strategy” in the Harvard Business Review in 1979. It has since been used (and abused) extensively by both practitioners and academics.

Porter recently re-visited the article and the model. The new article is available online.

Porter’s five forces
Here is a 13-minute interview about the new version of the article:
You might also be interested in 20 years after Disruptive Innovation.