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Bombardier CSeries: How will Boeing/Airbus Duopoly Respond?

February 2013 Pricing 9 Comments

The much-anticipated Bombardier CSeries commercial airplane line provides a uniquely positioned offering, boasting 20% fewer CO2 emissions, 20% fuel savings, and 15% less cash operating expenses than comparable alternatives.  With expected fulfillment of initial CSeries orders occurring in mid-to-late 2013, Bombardier poses a significant threat to the once dominated duopoly market of passenger fleet 100 […]

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Apple Takes a Beating — What Did You Expect?

February 2013 Corporate

Apple has had a beating both in the market and the press lately. Despite record quarterly profit, they lost their number-one stock spot to Exxon Mobil. By some prognostications, Samsung is rising in the smartphone market, and Huawei is taking a stronger foothold on the price-sensitive emerging-market field, while Apple is stumbling. Well, for those who failed to sell Apple at above $700 prices and now see it below $450, what did you expect?

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Is Your Board of Directors Considering the Right CEO Strategic Business Priorities?

February 2013 Corporate

Business guru Harvey Mackay stated, “The Japanese have a very simple way of describing the typical American marketing plan: READY? FIRE! AIM.” Sadly little has changed in American business. This is a major reason why the American economy is in constant crisis, and obsolete marketing departments built on late twentieth-century dogma now resemble the spending habits of Communist central planning: disconnected from reality, economically inefficient and lacking accountability to the right things.

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Economic Price Optimization with Globally Linear Demand — Both Useful and Useless

February 2013 Pricing 1 Comment

Economic price optimization has a lot to tell us, but not necessarily the price which optimizes the firm’s profits. Economic price optimization relies on a defined demand curve. Unfortunately, defining the demand curve with sufficient precision and reliability for decision making can be done for only a subset of challenges. So if this method is not useful for pricing in many cases, what use is it?

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The Sales Rep Motivational Disconnect

February 2013 Selling

When it comes to personal selling, the 21st century sales representative is a different animal from the 20th century version. The 21st century salesman is a professional consultant who should be far more interested in establishing a long-term relationship with the customer based on giving the customer advice on how best to buy. Because the sales rep. is so crucial to the success of the firm, it is mandatory that she or he be properly motivated.

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Why do Americans generally get paid more to do business than to do engineering or science? Is it that there is greater opportunity in helping people interact with each other peacefully through trade than in helping them interact with the forces of nature, or is it that our priorities are out-of-whack?

  1. Predictions are often wrong, but they can be useful. Just think about your business planning process for an example. Never works out that way, but it does help the organization navigate its changing landscape.
  2. The seeds of downfalls of leading corporations are often found in the exact things which propelled the corporation to lead. Schumpeter called this creative destruction. My generation named a band after the idea: Einstürzende Neubauten.
  3. Nothing creates capital like measured risk taking in response to marketing-led customer need discovery – so why do corporate boards pay more attention to finance officers?
  4. Low prices don’t guarantee customers. Value Does. Value which leaves the customer with Greater Benefits than the firm extracts through Price than all other competing offers.
  5. If you want to a real competitive advantage, you have to be willing to pursue a radically different path than your competitors in some dimensions.
  6. Small firms can fight above their weight-class when they create a more compelling value offering. No firm, not even those in a mighty duopoly, is immune indefinitely. Change happens.