Eddielogic

As posted at the beginning of November the legal disputes (in terms of copyright issues) and the opportunities to generate “Web 2.0-returns” will proceed.

According to the news, Universal Music started to accuse “Myspace” for violating its copyrights. In the core of this matter Universal Music argues that “Myspace” would enable Internet users to distribute videos illegally since “Myspace” supports re-formatting.

Wow. According to a recent study (“Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market” in Science, volume 311, February 2006, p. 854 -856) social factors have a huge impact on the demand. The outcomes of this study in brief: (a) Social factors have an impact on individual decisions (a popular song was rated better). (b) When users can influence each other, it is much harder to predict, which product is the most successful. (c) The grace of participants focuses unequally on the most popular products, hence it was harder to predict the success of a certain product.

Community users mutually influence each other, hence they are able to push products including music, videos etc. Therefore I would recommend each copyright holder to rethink legal disputes and to employ web 2.0 and community options for its core business.

Today I found some interesting tips how important good strategic thinking might be. Of course, the benefits of an excellent strategic mind and / or strategy knowledge are unquestioned. However, according to a recent study, strategic knowledge has become number one criteria for advertising agencies to be invited and number two criteria to be chosen.

Here are the top 5 criteria for inviting an advertising agency:

• Strategic brand thinking
• Good market experience
• Integrated communication from one source
• Creative campaigns
• Former successful co-operation

Opposite to this, the criteria for selection of an agency are slightly different

• Creative campaigns
• Strategic brand thinking
• Impression / Feeling, that the chemistry is right
• Good understanding of the market
• Convincing team

Hence I would like to argue, that strategic brand thinking and a good understanding of the market are the major criteria. How about your agency?

For the journal of my doctoral thesis supervisor I have prepared an article concerning the practice of strategic planning in German retail banks. Within this article I also focused on the impact of risk management in strategy. Hence I would like t present a small digest.

To discuss further aspects of strategic planning (see this post) within banks, this post will briefly discuss the impact of risk management issues. To fulfil new regulatory requirements banks made large investments in processes, skills and IT in the last couple of years. Due to a lack of resources, in particular smaller banks struggled with those investments.
An important part is the Internal Capital Adequacy Assessment Process (ICAAP; which is founded in the Basel II-framework for financial institutions) by the Committee of European Banking Supervisors, which compares risk profile, strategy and capital.

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Much has been written about the why and how of internal communication in the context of change. So I am not going to repeat all of that. However, due to personal experience one aspect really got my attention. Not surprisingly, the more complex the issue to be communicated, the more difficult it gets to get the message across – and the more problems for the success of the initiative can arise when employees simply don’t understand the issue in total. From my personal experience, one of the primary reasons for failure is that change is communicated by the wrong people. It is not that these people are unwilling or not experienced enough but that they are too deeply into the issue and simply don’t know how to explain it in an understandable way.

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OK, this is more about economics, but this question really touches the strategies of retailers.
For years I’ve been reading about the difficult situation for German retailers: The economy is struggling, the extensive social security system is subject of ongoing reforms, people are afraid that they won’t bee able to keep up their current living conditions in future – hence they shop less and save more.
As Oliver already wrote, we were shopping last Saturday. Well, if German retailers are in a recession at the moment, I wonder what it might look like when we are back in a boom. What I saw were densely packed shops and streets. By noon the city of Cologne was virtually crowded. It was difficult to find a table in a restaurant for lunch or a change room to try on some clothes. According to the bags people carried, they were definitely not only window-shopping.
Well, I have to admit that this was on a Saturday when people have time to shop and it was in a prime location that is frequently listed among Germanys top ten shopping streets. Anyway, I have seen similar scenes in many other towns over the last few years.
So why are the retailers in Germany so unhappy?

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Today we went to Cologne for shopping. Actually Cologne is a very good place for this, since you can find great many retailers in the centre of the city. (I have to explain this in brief: In Germany you will find many retail stores in the centres of cities. Shopping malls do exist, but they are less important in comparison to North America.) Hence we find retailers with similar products in the same place. It is possible to achieve a differentiation?

A very interesting approach can be observed with “Peek und Cloppenburg” (a clothes shop chain) in Cologne. Their target audience is the entire family. They sell own brand products (e.g. Montego) as well as up market brands like Strellson, Boss and Joop (just to name a few). Considering the floor space that is given to different price / brand levels it can be argued, that the focus is on branded clothes.

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