This comment was in response to a reporter's inquiry about Gillette and the 5-bladed razor
The blade madness in my opinion has to do with the longstanding competition between the major players in the industry. For years, BIC (a French company specializing in cheap, plastic stuff) has been trying to persuade men that shaving is a commodity and that 19 and a half cents should just about do it, while Gillette has poured millions, if not billions, into persuading guys that more blades are better.
I mean if 2 blades are better than 1 blade, and 3 blades are better than 2 blades then 4 blades must be better than 3. Imagine the shock on the part of Gillette when they were beaten to the market by typical also-ran Schick who were able to offer a Four (count em, Four) bladed product ahead of Gillettes launch. It had an interesting effect of turning Gillettes own branding and advertising investments against them.
Gillette responded by pushing their own 4 blader to market ahead of schedule and then racing forward with a five-bladed offering. They also consented to be acquired by Proctor and Gamble, which to me signals that they kind of hit the end of that particular strategy.
Where will this end? I dunno. I imagine we will someday have tiny little tanks crawling across gents faces. Actually, a more realistic disruption in shaving will come from new materials. Imagine a blade made out of super tough ceramics that you never need to replace, or hair dissolving shaving cream that means you can shave quickly without any blades at all, and only a couple of times a week.
As to guys being better off? Shaving is still shaving, and for most men it is not fun, no matter how you modify the experience.
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I was recently asked by a reporter how grocery stores could compete with Wal-Mart. Here are some ideas.
To compete against the 'everyday low price' theme of Wal-Mart, supermarkets have to find some way of differentiating themselves -- they can't rely on the old approach of luring in customers by price promotions or loyalty cards. Stores that can't figure this out -- with Albertson's decision to seek to be acquired being a recent example -- will find they have no choice but to sell out or shut their doors.
One approach is to offer products that appeal to customers with a different sensibility than your typical Wal-Mart shopper. Costco, for instance, has deliberately targeted small business owners as its key segment - people who might be open to buying a bottle of champagne, but appreciate getting it for a good price. They've kept Wal-Mart's Sam's Club at bay for years with this strategy.
Trader Vic's is another example of a store that has differentiated on the basis of fun and interesting products. OOps - as a comment points out, I meant Trader Joe's, not trader Vic's (which I believe is a beloved bar at the old Plaza Hotel in New York).
The Dollar Store can actually offer even lower prices than Wal-Mart, by starting with low-priced selloff goods and not stocking anything that is acquired through first-run channels.
Some supermarkets have started to differentiate on the basis of the quality of what they stock, rather than a commodity item for a low price. One of the fastest growing grocery segments is that for organic foods. Whole Foods Market has taken tremendous advantage of this approach by appealing to customers who wouldn't dream of buying mass-produced beef or veggies at a gigantic Wal-Mart store.
There will always be customers who just plain don't like the Wal-Mart shopping experience - the crowds, the lines and the mess. By creating clean, nice spaces, a market can compete.
Some groceries also compete effectively by really understanding their clients. One of my contacts in the business found that his clients behaved differently according to the time of the week! Monday to Friday, they were all about in and out, convenience, and no fuss. Come Friday night, all of a sudden they turn into galloping gourmets who need 47 flavors of vinegar and fresh lemon grass for their weekend culinary creations. What he used to do was re-set two aisles of his store every Friday afternoon (dubbing it the 'gourmet experience' section) and set them back again on Sunday night. That kind of tailoring is hard for a Wal-Mart to pull off.
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I was recently asked by a reporter to comment on the pros and cons of municipal Wi-Fi networks (which could also extend to Wi-Fi networks based in libraries and public schools, not to mention your local Starbucks. Here's my response:
The premise behind most Municipal Wi-Fi proposals is that by having low-cost or free Wi-Fi networks available economic development will be facilitated, the 'digital divide' between haves and have-nots will be narrowed and that local business communities will grow up around the networks.
The downsides of such a municipal wi-fi plan are considerable as well, unfortunately.
One downside of such systems is that by providing network access for free, municipalities are undercutting the role of private enterprise in establishing and maintaining communication networks. This could have the negative effect of reducing returns from private investments, in turn reducing the incentives for further research and development in the Wi-Fi area. Companies that have invested in alternative networks, likewise, will see revenue streams cut off once wireless-for-free becomes widely available.
The richochet effects are likely to spill into other segments, such as telephony, in which voice over IP (VOIP) threatens the local phone companies' monopoly over access to the home.
Another downside of municipal wi-fi systems is that they provide open access to all kinds of nasty software. On standalone machines, the spread of viruses and spyware from one to another can be slowed with firewalls and preventive measures. On a network, the integrity of the network is as powerful as the weakest computer on it. With a municipal network, who is going to take responsibility for its functioning?
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I'm just back from a most amazing visit to Dubai, where I learned a thing or two about how strategic a government can be. Dubai's leaders have figured out how to make the place attractive for business, despite the fact that it's historical major industry was -- guess this -- pearl diving!
Among the things they got right were plans for their National airline, Emirates. I took Emirates to Dubai and it was fascinating. Emirates has figured out that it's about 8 hours from many major markets, and is making great progress connecting them - for instance, connecting Europe and parts of China.
Moreover, Dubai's brand new airport features 24/7 service, which among other things allows it to run its planes for 3 hours more per day than competing airlines, a huge advantage in a capital-intensive market. Beyond the airline, Dubai is studded with awe-inspiring office buildings and hotels, and I'm told that they are setting up their own stock exchange. Not bad for a place that not too long ago was in the middle of nowhere.
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Well, the computers arrived this past week. They got here when I was in Finland, so by the time I got home there was a smoking mound of packaging occupying the entire dining room, and puzzled consternation from the teens, who evidently had decided to forge on ahead and install everything themselves.
Well, I have to say that the looks of the devices were a big disappointment. Although the towers themselves were colored, as promised, all the peripherals are your standard computer silver and black, including the monitor. And the machines are HUGE.
I suppose to contain all that horsepower they perhaps have to be big. They do have very cool blue lights that go on when the machine is working, but they also have a massive exhaust array and run very hot. The set up also seems to have done something to our home network which will necessitate a call to the trusty computer guys to come and sort things out again. I am still wondering why I paid the kind of money I paid for these machines, given what we've now learned. At the same time, I think consumption exhaustion has set in - I'm thoroughly sick of talking about computers for the teens! And both say they are happy, so I guess we'll get the network up and running again and go with the flow.
Let this be a warning to those of you thinking of buying Alienware - the computers basically look like everybody else's, except for the towers.
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