Eddielogic

– Thoughts on Strategy and Management

May 1, 2008
by Dagmar
1 Comment

Mr. Obama as a brand

The race of the two presidential candidates of the Democrats in the US, Mr. Obama and Ms. Clinton, is becoming more and more dramatic. It receives extensive media coverage and surely has many interesting aspects. It even fits into our blog on strategy, since both candidates’ campaigns follow their particular strategies. Unfortunately, the further this race goes the more it is driven by reactions to latest developments instead of an overall strategy. Well, I don’t follow this issue closely enough to elaborate on it in more detail. However, two of our regular contributors to our Management Portal obviously do. They are both experts in branding. So they both wrote down their view about the branding aspects of presidential campaigns in general and of Mr. Obama’s campaign in particular.

In the first article Naseem Javed discusses The Presidential Branding. He states that ‘these days, the know-how of Presidential branding is as important as the keys to the Whitehouse itself. The combined billion-dollar costs of campaigns to get votes is no longer a simple matter of shaking hands and soundbites. Today, all over the world, national leaders looking for breakthrough images depend on ultra sophisticated branding and image identity systems to strategise and oversee their campaigns.’

In the next article, Dan Herman asks: Can Short-Term Brand “Candidate Obama” Transform Successfully Into Long-Term Brand “President Obama”? He concludes that ‘if he [Mr. Obama] wins the nomination, then this will certainly be the next challenge which the “President Obama” campaign masters will have to overcome:  to smoothly handle the transition from short-term brand “Candidate Obama” to long-term brand “President Obama”.  Time will most certainly tell.’

I think this branding issue is an interesting aspect of the presidential election in the US. When all this is over and the US have elected their new president, it will be worth to look bank and thing about the branding lessons we can learn from each candidates fortune or misfortune.

April 28, 2008
by Oliver
1 Comment

21 – Bringing down the house

Well, this post is not that strategic. It is more an example that life still writes the prime stories. If I would try to name it as a strategic issue I would argue that card counting (changes in the environment) in blackjack (the product) shifted the probability to win (financial objective) from a casino to the player (= strategic threat). What I am writing about?

As some among you will have discovered that this post is (just a little bit) about the movie “21” that started in March 2008 (US) and April 2008 (Germany). The full list of starts can be found on this website. Ben (Actor Jim Sturgess) is a very smart M.I.T. student who needs capital to pay university tuition. After invitation he joins a group of the institutes’ most gifted students which travel to Las Vegas nearly every weekend armed with fake identities and the know-how to shift the odds at blackjack to their benefit. The unorthodox math professor Micky Rosa (Actor Kevin Spacey) leading their way, they have developed a statistical approach to increase their chances to win. By counting cards and employing a secret system of hidden signals, the team can beat the casinos big time.

The movie is based on a true story of M.I.T students that identified the approach and hit Las Vegas’ casinos. It a really good movie and I recommend to visit the theaters. For those who interested to know a little bit more about the story I recommend this WIRED article “Hacking Las Vegas. THE INSIDE STORY OF THE MIT BLACKJACK TEAM’S CONQUEST OF THE CASINOS.” The article (2002) is based on “Bringing down the House: The inside Story of Six MIT Students Who Took Vegas for Millions”.

Enjoy it!

April 27, 2008
by Oliver
2 Comments

Your best CRM system

Since many, many years an amazing number of articles, books and studies discuss CRM systems and their importance or effects on corporate success. Furthermore companies did spent large amounts of capital for implementation, training and very often for consulting when introducing CRM systems. But sometimes the best CRM system is a very good value for money, hopefully well self-directed “simple” system. You might be wondering about what kind of system I am writing? As explained in my last post on Eddielogic I would like to present some observations from our last vacation in April this year. So – sometimes the best CRM system is your employee.

As I said in my last post we travel to Majorca once a year. Since 5 years we make our car reservation with the same rental firm; since 6 years we always stay in the same hotel. Since a few years we receive a “welcome back” greeting fruit basket from the hotel management. That is a really nice attention from our perspective and gives us a warm welcome. I guess that the hotel’s database indicates our booking frequency. That is very good feature to increase customer loyalty for a vacation hotel; I know some very nice hotels in Germany (which are far more expensive) that are not able to identify us as their former customers and to demonstrate any sign of “welcome back”.

But let me put some emphasis on the rental firm. The firm offers that you can pick up your rental car at the airport.

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April 26, 2008
by Dagmar
2 Comments

Financial crisis reveals weaknesses in banks business models

The international financial crisis claimed another victim among German banks this week. It was the specialised mortgage and public sector lender Duesseldorfer Hypothekenbank (Duess Hyp). “The small German bank’s owners have temporarily transferred ownership to the BdB’s depositor guarantee fund, after which it will be sold to a third party.”  The bank is fairly small with a balance sheet total of about 27 billion Euros. Due to this size, the German banking system will not fall into major turmoil because of this bank failure. The only concern was that Duesseldorfer Hypothekenbank is a Pfandbrief issuer (German version of covered bond) and that its failure might further damage the good reputation of the German premium product Pfandbrief. This fact surely motivated the quick rescue activities.

What makes this case interesting is the fact that – unlike the much larger and more prominent IKB-failure – Duess Hyp’s problems were not directly caused by investments in sub-prime related products or MBS notes. Duess Hyp simply failed because of its business model. It probably would have failed anyway sooner or later. The current financial crisis has just brought up their strategic problems quicker:

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April 20, 2008
by Oliver
Comments Off on Hardware for Holiday trips

Hardware for Holiday trips

We are back from our “annual”one week holiday trip to Mallorca (compare this old post from 2007). For a very specific reason we decided to travel a month earlier this year; we going to post this reason somewhen in summer. April is a good time for visiting this beautiful island, too. Compared to May the weather is not that stable and warm. But we got luck and had just one rainy day; all other days were warm with 19 – 22 degree Celsius. In the case that you can choose between April and May I would recommend to select May.

Anyway…We made some very interesting observations concerning management related issues. To be more specific: How to satisfy longtime customer OR that the right staff can be the best CRM system. I gonna describe these issues in one of my next posts, so stay in touch with Eddielogic.

This trip was also a good opportunity to test my new gadget, an Asus Eee PC in the 4 G version. Due to some supply bottleneck in Germany (this sale started in December last year) I had some time to consider this “investment”. Until then I used a VPA IV (a mobile digital assistant with Windows Mobile 5.0 and UMTS), which has a brilliant screen and small keyboard to write e-mails on the road. The major disadvantage is that is does not have a broadband internet access (I bought that device in 2006). Furthermore opening larger word files may take some time. Hence I decided to upgrade my hardware and considered to buy a Nokia E 90 or to spend a small fortune one a very small 12 inch notebook.

Two weeks ago I got the opportunity to test and to buy the Asus Eee PC and I never looked back so far. It comes with Linux as OS, Open Office (Version 2.0) and Mozilla Thunderbird as e-mail client. The price was 299 Euro. So what can you expect for this price?

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April 5, 2008
by Dagmar
Comments Off on Blue Ocean Strategy – Or: Latest News?

Blue Ocean Strategy – Or: Latest News?

I know, the headline of this post doesn’t sound very topical. Don’t worry, this will not become a review of a not-so-new management book. However, exactly that is what I found on the website of Financial Times Deutschland last Friday. There is an article with the headline roughly translated as “Why should competition bother me”. The abstract reads
“The blue ocean strategy enables companies to win new customers. In uncontested markets there is no need to continuously look at competitors. Instead, companies can focus on their customers.”

What follows are some real-world examples of companies with successful blue ocean strategies and a brief description of this concept. This is complemented with some comments about sustainable innovation. The authors, W. Chan Kim and Renée Mauborgne are mentioned, but not the book itself.

At that point I felt the need to do some background research: As a reminder – the first edition of the book dates back to February 2005; hence, it is more than three years old now. Even the German edition is from September 2005.

The content of the article is nice and I don’t want to debate the idea of the blue ocean strategy. What I really dislike about this article is that I reads like the presentation of a brand-new management concept. There is no reference to the book and no hint that that Kim and Mauborgne developed this idea some years ago. Even worse, I could not find any reference point to some topical news like for instance a company that hit this weeks headlines with a big success of a typical blue ocean strategy. So what is today’s newspaper article supposed to tell me? There is nothing new in it. I can’t avoid the feeling that it is just a space-filler that was written some time ago but never got published – or was it actually published before and is now recycled? I really like the On Management-series in the FT. These comments usually refer to latest developments or at least don’t recycle three years old ideas. The above article in contrast does not provide any value for the reader. It probably just occupies some space for which they had no topical content and no advertisement to fill it. Now I wonder which market space Financial Times Germany intends to win with this sort of strategy!

 

Update

The Financial Times Deutschland is discontinued and was published the last time on December 7 2012. According to the majority of comments on online news sites, FTD had a really good reputation. Many expressed their regret and stated that they would miss this newspaper.

I just re-read this old post of mine. Now I wonder if FTD could have done better if they had paid more attention to their online-content.

March 16, 2008
by Oliver
1 Comment

Financial crisis hits the German market for covered bonds

Security and liquidity are important issues in bond market. Now the financial crisis and the general uncertainty (due to the subprime crisis) have an impact in the market for covered bonds (so called Pfandbrief). Dealings of them have come to rest.

In regular times securities traders generate their income from turnover – the more the merrier. But in this situation the opposite perspective has come to life. At least in the covered bond market this situation seems to be the standard routine – to avoid turnover – these days. According to one of the leading German newspapers (FAZ) bond dealers argue to have technical problems if they receive a call to buy bonds. Furthermore it has been reported that bond traders did agree on a so called “non-aggression pact” – traders agreed not to phone each other to avoid distressing situations.

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March 9, 2008
by Oliver
Comments Off on Strategic chances for rapid innovators

Strategic chances for rapid innovators

Last week I discussed the four benefit criteria of innovation. This post will focus on the impact of “innovation speed”. But don’t forget: Innovation is not the general approach (in the sense of “one tool fits all”) to enter competition; when focusing on innovation your organization should consider issues like complexity, costs and strategy. But in this post I will put an emphasis on fast innovations.

If you are in a dynamic competition or in a situation with shorter product life cycles fast innovations can be an approach to stay ahead of your enemies. Rapid innovations can help your organization to exploit your core competencies more effectively. Using this approach you can benefit from 5 different aspects:

Expanding current markets. With fast innovations your organization can be able to expand mature markets by attracting new uses and new users. Expanding mature markets is less risky than enter markets which are completely new to your organization, since you understand the basic principles of this market.

Creating new markets. In the case that your organization has excellent and extraordinary capabilities (and some big wallets to take risks) you should focus on new markets in order to exploit your capabilities. You might have those capabilities in terms of technical aspects and /or marketing. In this case you should try to create new markets.

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March 2, 2008
by Oliver
5 Comments

The four benefit criteria of innovation

In my post last week I discussed innovation’s impact on corporate success. In the meantime I had a very interesting conversation with a student (business economics) related to innovation issues. The core of this conversation highlighted the character of innovation, the difference to inventions and the benefit aspects.

So let us start with a definition for innovation. (I have to mention that starting with a definition is good way to manage conversations and to avoid misunderstandings. I have observed some very controversial and unproductive discussions – some problems did only exist due to different or even unclear understandings and perceptions…). For the purpose of this post I would like to define innovation as follows: developing and delivering services or products which offer benefits. These benefits will be perceived by customers as superior, excellent or new. Continue Reading →

March 1, 2008
by Oliver
Comments Off on Work hard – play hard – start early

Work hard – play hard – start early

Sometimes friends raise the question whether we would spend the entire weekend in front of our computers. Well, that is an interesting question. But a good friend did ask a more specific question: How many leisure times is left for you after writing blog posts and running your management portals? I think that this question identifies a typical misunderstanding when someone combines his or her professional interest with his or her favorite pastime (hobby). From an outside perspective it looks like an additional job…but indeed it is the optimal combination. We like strategy and management related issues (in this case I would say that it is more a commitment to strategy and management which drives Dagmar and me) and hence we do not make a distinction between hobby and running a management related website. Writing a blog post is a “regular part” of my leisure time and I would not see it as a “non leisure time” activity. Someone has taking photos and picture editing as hobby – and when he writes an article about his approach to improve pictures in Photoshop he would perceive this writing as part of his leisure time. I hope that you understand where I am coming from? So the only difference is that taking pictures is not my major hobby.

But, don’t worry – we do not spend all time in front of your PC monitors. Last weekend we had excellent weather conditions in Germany. It was a very warm and a sunny weekend; hence we decided to start the barbecue season 2008! To proof my statement I have added a picture – so watch yourself.

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