Eddielogic

– Thoughts on Strategy and Management

March 14, 2007
by Oliver
Comments Off on Youtube and Viacom

Youtube and Viacom

At mid of December last year I posted about the legal disputes (in terms of copyright issues) and the opportunities to generate “Web 2.0-returns”.

Now we will face the next level of the copyright battle. Viacom (the media company) takes Youtube to the court and claims compensation for copyright violations. The amount of money or better to say “capital”, which is calculated for compensation, is 1 billion US Dollar (= 761 Million Euro). 

To understand this strategic strep we have to take into account that “some” Youtube-clips contain material from MTV, Comedy Central and Nickelodeon; all stations that belong to the Viacom empire.

Some more figures? Okay; Viacom argues that around 160.000 clips would contain copyright protected material and that around 1,5 billion times these clips have been downloaded. (one could argue, that less than one buck per show is not that expensive…). Very fascinating: Youtube seems to benefit from those measures. According to the information of this article, “…YouTube’s market share of U.S. Web visits to increased by 13.9% in the two-week period after Feb. 3, when YouTube was told to remove clips to popular Viacom-owned TV ….”

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March 12, 2007
by orecklies
Comments Off on „Strategic changes“ meets Deutsche Telekom

„Strategic changes“ meets Deutsche Telekom

T Home LogoTerms like „Strategic changes“ or even the term „change of the previous strategy“ can be found quite often when organizations want to demonstrate their focused flow of activities to improve their situation. One could guess it is more an announcement to lull the public, stakeholders or shareholders.
So, a couple of days ago I found this article “German Telekom changes the strategy”. German Telekom is still the major telecommunications provider in Germany. But in 2006 it lost 2 million customers. I would like to be fair, a decade ago German Telekom was the one and only telco in Germany, hence this company had the monopoly. In the last 10 years the things have change dramatically; therefore those companies (former monopolists) see dramatic falls in terms of customers and/or sales.
So, what is the new strategy? According to the news, a set of measures should improve the situation:

  • Low performing holdings and holdings that do not belong to core activities will be sold. Abroad acquisitions of mobile service providers are possible.  
  • In Germany the company will focus on internet based TV in order to exploit the market for broad band services. A product bundle of broad band access, Internet TV and telephone land line will be introduced.
  • Customer services should be improved. 
  • A low budget brand will be introduced. 
  • The entire brand concept will be made easier to understand. All products for land line and broad band will be offered under the brand “T-Home”. The brand “T-com” will be ceased.

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March 3, 2007
by Oliver
Comments Off on Aurismania in Germany

Aurismania in Germany

I would like to confirm Dagmar’s post. This is not an advertising campaign; it is more a real flood….
On Friday I had a business meeting in the Frankfurt Airport Center (FAC), which is next to Frankfurt International Airport. Before I forget this…this Airport does a great job in terms of customer service and security issues: reliable and fast. I guess it has simply enough staff to perform all security inspections. I would like to quote from Tom Peters, who argues “I’m now squarely a Lufthansa and Frankfurt guy”.
Back to Aurismania. In my walk from the parking lot I passed 14 advertising spaces. How many Auris posters did I face? 10? 12? 14? Yes. Each and every advertising space was booked to present this car.

Auris Advertising

So, let’s see what the effect on car sales will be.

February 28, 2007
by Dagmar
5 Comments

Toyota Auris Ad Campaign in Germany started

As announced, Toyotas huge advertising campaign for its new Auris model was launched in Germany. What I can say by now just from my daily commute to work – it is almost impossible not to notice this campaign. It is virtually everywhere. My best guess is that about every third or fourth billboard shows some view or the other of the Auris.

Auris

The campaign mainly consists of different images, even of the interior of the car. It doesn’t mention any special features or characteristics at this stage. It is just about images. So Toyota hopes to position the Auris as a well designed appealing car. As expected, they are working on their perception by German customers.

I am really curious about the effect of this campaign and I will surely have an eye on it. For the beginning, I dug a bit deeper into statistics to have a basis for comparison. According to official statistics (available in German language only), Toyota sold 147,995 cars under the brands Toyota and Lexus in Germany during the months January to December 2006. Among these were 43,465 Corolla models, the predecessor of the Auris. Accordingly, Toyota and Lexus had a combined market share of 4.3 % in 2006. The market share of the Corolla only was 1.25 %.

Let’s see if there are any changes soon.

February 25, 2007
by Oliver
Comments Off on Strategic decision making

Strategic decision making

For all those who are interested in theoretical issue of strategic management I would like to recommend a specific research paper. We know that strategies and the empirical research on strategic management can be analysed under two different point of views. One focus of research is strategy content. Another research focuses on the process of strategy generation.
The book abstract “RESEARCH ON STRATEGIC DECISIONS: WHERE DO WE GO FROM HERE?” by Vassilis Papadakis and Patrick Barwise (both of London Business School) informs about strategic decision making. Some authors have observed that in general strategy process research has rather a descriptive focus; hence they are not satisfied with the state of knowledge and describe it as smattering. PAPADAKIS and BARWISE (1998) are more specific about this issue; they opine that strategy content researches have developed a cumulative body of knowledge and a common vocabulary. Opposite to this strategy process researchers, including researchers on strategic decision making have not achieved the same results. On this fundament the authors suggest a path to analyse strategic decision making and recommend a more cumulative approach. The paper is available as pdf-file.

February 14, 2007
by Oliver
Comments Off on When will Lower Saxony sell its VW shares?

When will Lower Saxony sell its VW shares?

Lower Saxony, a federal state in the north of Germany, is VW’s second-largest shareholder after Porsche. Due to the so called “Volkswagen law” the state is in a very comfortable position to control the company.

vwThe law came into force on 21st March 1960, when the former Volkswagen GmbH was privatised and converted into a public listed company. But at that time the federal state wanted to preserve its influence on the carmaker. Therefore the Volkswagen law regulates that no shareholder can exercise more than 20 per cent of voting rights, even if he possesses a higher capital share. Hence it is possible for the state to stop major steps like the move of headquarter or even an unfriendly takeover.

Furthermore this law gives Lower Saxony a disproportionate influence. For a long time the state was the largest shareholder and Lower Saxony had the right to nominate two supervisory board members. At present Prime Minister Christian Wulff (CDU) and minister of economics Walter Hirche (FDP) are members. Continue Reading →

February 7, 2007
by Dagmar
1 Comment

Low Cost Cars

When reading the FT today I discovered a piece of information, which – when put together with some other things – seems to form up a very interesting bigger picture.
It was in an analysis of the success of Indian companies in global markets and it said that Indian Tata Motors has a “one lakh car” project. “Lakh” is a unit of 100,000 and in this context means that Tata wants to build a car that can be sold for the price of 100,000 Rupees. That is a bit more than USD 2,000! I had to do a bit or research here because I don’t know anything about Indian car prices. According to this list from March 2006, prices for new cars start at Rs 2.19 lakhs, the majority is between 4 and 17 lakhs and some foreign cars such as Mercedes Benz are well beyond that. So the “one lakh car” is as impressive as it seems. One lakh is less than half the price of the most inexpensive car sold in India today.
As the FT writes “… Tata Motors plans to cut costs by changing the supply chain, among other measures. Rather than trucking finished cars from the factory to the dealer, for example, the company will ship kits en masse to warehouses where dealers can pick them up.”

As it happens, only two and a half weeks ago Toyota had revealed its plans to build a low-cost car undercutting Renault’s emerging-market Logan. According to Toyotas president Katsuaki Watanabe “Everything from design to production methods will be radically changed and we are thinking of a really ultra-low-cost way of designing, using ultra-low-cost materials, even developing new materials if necessary”.

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February 5, 2007
by Oliver
Comments Off on Elements of “Strategic Management”

Elements of “Strategic Management”

Due to specific disadvantages (e.g. over-formalized-process, lack of co-operation between HQ/planners and business units) the concept of strategic planning was advanced to another more comprehensive concept in the 1980s. The comprehensive concept is called “strategic management”. In comparison to the logic-rational elements of strategic planning the following additional elements are considered within strategic management:

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February 1, 2007
by Dagmar
Comments Off on Toyota in Germany – Update

Toyota in Germany – Update

AurisAbout one month ago I predicted that Toyota will invest more efforts in the German market soon. So far it seems as if this prediction is in tune with reality:
Today, German newspaper Handelsblatt writes that Toyota is going to launch the larges billboards advertising campaign ever in Germany to introduce its new “Auris” model. A Toyota spokesman is cited that they “have booked almost everything that is visible on the street”. This campaign is said to outnumber a recent VW campaign of about 90,000 posters which celebrated 25 million sold cars of the “Golf” model. The campaign is targeted not only at motorists but also at pedestrians in the streets. It will be supported by other advertising activities on TV and radio, in newspapers, magazines and on the Internet.
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January 31, 2007
by Dagmar
Comments Off on Youtubes Revenues

Youtubes Revenues

Olivers last post here cites users who are annoyed that Youtube makes money with the videos thy uploaded there.
Well, for the moment let’s not talk about selling those videos. I would not like that either. But isn’t it a bit weird to complain about Youtubes advertising revenues? Let’s go back from where Youtube started not so long ago. This site provided a free (and user-friendly) platform where everybody could publish and share his videos. That was a real value for the users: You had made a video but you didn’t have own webspace to publish it. And even if you had – who would find your video there. Youtube was the solution to your problem. A place from which you could reach an audience as large as possible and at no charge!
I guess in those early times users didn’t mind some ads around their videos. A platform like this surely is expensive and if the ads helped to cover those costs. That was probably seen as the better solution compared to taking fees from users. If anybody wasted a thought on Youtubes costs at all.
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