A fascinating article in Fortune (August 8 2005, p. 32) details the mass destruction of the telecommunications industry perpetrated by the fraud at WorldCom (now MCI). During its heyday it's (illegally) efficient cost structure drove competitors crazy - to the point that competitors such as AT&T fired tens of thousands of people and eventually went into a deadly competitive tailspin.
Not only that, but today's MCI, post-bankruptcy and with a nice clean balance sheet seems poised to do even more damage to its competitors, most of whom are bearing the burden of significant debt. Capitalism depends on everyone playing by the same rules. The MCI story is a disturbing lesson of the helplessness of those rules in an age of intangible assets and underpowered enforcement.
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- Posted Admin on August 25, 2005
Speaking of easy to use computers, it's worth remembering that Compaq was a major innovator along this dimension when it first introduced it's "Presario" line in the late 1990's. I know - we bought 3 of them. They were marvels of user-friendliness. The box opened to a (now standard) 1-2-3 for dummies setup guide on one page. The cables were all color-coded, so all you had to know was that the purple cable went into the purple socket on your computer. And the CD-ROM 'setup' procedure actually worked to walk you through the whole process in a relatively straightforward way. Fast-forward to today, and all these innovations are standard. So where is the next big move in ease of use for PC's?
I've got to think that the ideas of segmenting along customer sophistication or age have a lot of merit. What I would pay for a computer that my mother-in-law could use and find engaging! We bought one for her 2 years ago, and it's been a lesson in frustration. Not only is the software and functions hard to figure out, the machine is physically extraordinarily difficult. Even seemingly simple things like 'right clicking' are hard when you can't move a mouse. Following screen instructions is hard when you can't see the screen! Different problem with today's young things - in my house, the patience for sorting out problems is rather limited, and I spend far too much time being the help desk of first resort.
So here's a challenge for the PC community -- why can't you build a PC that requires no more effort than a TV remote control to operate and would be fun for a change! I'll pay a lot more than commodity prices for that.
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- Posted Admin on August 23, 2005
So how do you differentiate a boring, humble PC? I was asking myself this, along with the "Business Evolutionist" who has a very interesting post with the title "Is Longer Better?" He's talking about warranties, of course, not ... well, you know.
Anyway, here I was promising the teens (I have two) that new computers were in the offing for the upcoming schools year. Dell? Nah, boring, and according to my daughter, too ugly for her bedroom. HP? Didn't even make the list, although both teens are hot for an HP printer to go with the new computer.
So what persuaded me to spend at least 1/3 more on the cool "Alienware" computers we eventually ordered? For my son, the appeal to gaming that Alienware has successfully promoted throughout what I can only imagine is a teenage boy underground. For my daughter, it's the color and styling. Can you believe it? Lessons learned: even in a commodity category, there are always going to be attributes that make a huge difference for some customer segments. Oh, and the son's computer is a really acid lime green, the daughter's a soothing silvery white.
Steve Jobs learned taught us years ago that people would prefer to pick the colors they like rather than the colors computer designers use. Nokia figured out that replaceable covers for their phones made all the difference against competition, which gave them an edge for years over the boring old machine-made competition. Why do manufacturers keep forgetting that sometimes seemingly small differences can have a huge impact?
I'll keep you posted on how things go when the cool new stuff arrives! Here's hoping.
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- Posted Admin on August 23, 2005
I recently returned from the Academy of Management Meetings in Hawaii (now there's a sight for you - 7,000 academics running wild on Waikiki beach...). I continue to be struck by the way in which academics are not researching questions that managers are worried about, and by the way in which the answers do not appeal to managers in practice. Or worse, by the way in which academic research discovers the obvious. Here's one from a paper I've just reviewed - seems that competition increasingly has to do with innovation, not just efficiency. Wow. Let me write that one down.
So what should academics be researching? All comments taken very seriously!
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- Posted Admin on August 15, 2005
Business 2.0 (August 2005 edition) describes a fascinating innovation: mobile phones specifically targeted at the needs of Muslim users. The Ilkone i800 contains features such as the full text of the Koran in both Arabic and English, a feature that detects the direction of Mecca from more than 5,000 spots and Arabic-lettered keys for text messaging. According to the journal, the $350 phone has sold about 100,000 units since its June 2004 launch with intentions to grow dramatically once penetration to nations with significant Islamic populations such as India and Pakistan.
Next year, the plans are to release two new phones with features such as cameras and checklists for those on pilgrimages to Mecca.
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- Posted Admin on August 11, 2005
