When one of our classmates called himself a “hunter” but made it obvious who he was thanks to pointing out his “stationary” geographic location in our little classroom, he was blogging about his beloved video games. So, while surfing Yahoo! News for interesting articles to blog about, I came across this one that just screams their name out and is waiting to be “strategically analyzed”. I even just checked their blog and its got a second gaming-related entry on it!

The article in question is about Sony’s all new flashy console, the PS3, which is set to hit the shelves on November 17th. It is the successor of the now legendary PS2 and the original Play Station, consoles that took the gaming industry from “cheesy” to cool. The article talks about the exorbitant price of the new console, which is set to retail at $599 (approx AED2,200), an unheard-of price in gaming history.

Hamel’s BCI model is just begging here to be used. The release of the PS3 and its hefty price tag does not only signal a shift in the pricing strategy of Sony, its much more than that. The move may vary well signal a shift in the core strategy of Sony’s gaming division, indicating that it will be shifting from an “everyone’s” console to the elite’s console. In this day and age where rap stars and rich dads fit twin gaming consoles in the back of their gas guzzling Cadillac Escalades, there is little doubt that their console of choice will be the PS3, and when Christmas comes and the kid’s grandparents want to get something techy to blow their retirement fund on, you bet it’ll be that exquisitely packaged PS3 as well. The PS3 will change both the product and market scope of Sony, as well as its customer interface in how it delivers its product to the market. There is no doubt that Sony will not just sell the PS3 “as is”, but will complement it with a whole host of accessories and add-ons that may just have you spending twice as much as you spent on the console.

In my personal opinion, the strategy implemented on the PS3 is in line with Sony’s current trend in releasing cutting-edge electronics that cater to the middle and upper class of consumers, where their prices are not in the reach of everyone but are not quite in that upper stratosphere of prices as yet. Additionally, be sure to expect Sony to integrate their other technologies with the PS3, thus encouraging consumers to own a “suite” of Sony products, rather than just one.

Hot on the tracks of the Dubai Ports World controversy, Dubai International Capital (DIC) completed a successful, George Bush-approved, takeover of British engineering firm Doncasters for USD1.3 billion. In an almost jinxed resemblance to the DP World take over of P & O, a British sea ports operator, the deal had similar U.S. induced security “fears” because some of Doncaster’s plants in the U.S. supply parts to the U.S. military, and they are a certified defense contractor, but please do keep in mind that they are a predominantly civilian firm.

Once again here we see a major non-market issue emerge, as defined in Barron’s market and non-market environment framework. The framework list’s four i’s that form together the different components of the non-market issue, and they are outlined below:

Issue: The issue here is the potential security “breach” that may occur on US soil if DIC successfully acquires it due to Doncasters involvement with the manufacturing of military products. This may make or break the deal, in addition to garnering strong media attention to the issue.

Interests: The interests in this issue include: the government of the UAE and Dubai, DIC, Doncasters, the US national security agencies and the Treasury Department's Committee on Foreign Investments in the United States (CFIUS). Other interests may include the employees and shareholders of the two firms in question.

Institutions: The institutions at play here are the two governments, the US senate and its committees, public sentiment and the media. Public sentiment plays a big part in the U.S. because of any already rampant anti-Islamist “propaganda” that the public may have been fed, and the way the media capitalizes on such a phenomenon.

Information: Information transfer here is critical. Whether it is communication between the US government and DIC, or by the media to public sentiment, information can sway the issue for or against DIC’s acquisition attempt.

DIC, whose holdings include the Tussauds Group of London, operator and owner the Madame Tussauds Wax Museums around the world, got approval from the CFIUS on the basis that Doncasters is providing a “product” and not a “service” to the US military. This time the senate didn’t put up a fight against George Bush’s outright approval of the deal.

Confusing? It is to me, and it’s a notion worth thinking about.



Note: I am in no way here trying to be “political” or offend anyone, rather my intentions are to take an academic view of the issue and analyze it using a robust strategic management model rather than a political science framework. I hope no offense is taken from the entry – author.

The article here talks about another one of those new “ultra-mobile” entertainment solutions offered by a telecommunications giant. Motorola is about to launch sometime at the end of this year “Follow Me TV”, a service that allows users to watch their favorite TV shows on their mobile phones and PDA’s. The service also allows users to program their Digital Video Recorders (DVR) at home by accessing TV guides on their cell phones.

This service can be analyzed for competitiveness using Barney’s VRIO framework. The resource here in question is the actual technology that allows this service to come into place. The first component, value, plays well here, since the resource is one that adds value to the firm and gives it an edge over its competitors. When answering the question of whether the resource is rare or not, one can argue that it is not exactly so because the article mentions other service providers who offer short clips, but not full TV shows on cellular phones. Yet the one device that really makes such a service not too rare is the ever expanding iPod, which offers TV-show downloads on its iTunes website. In terms of the ease of imitation, such technology is fairly easy to imitate nowadays, thanks to reverse engineering, but we need to keep in mind that Motorola may have secured certain rights to broadcast material that other providers may not have. Finally, the article does not give a clear indication as to how well the firm is organized to utilize this new resource, but we assume they are. We can thus conclude the Motorola will not have complete sustained competitive advantage due to the ease of imitation and the lack of true rareness.

The article; and I agree with the author, raises the question of just how successful such an initiative would be and whether it would help boost the bottom line of Motorola. How many people out there would be interested in watching an entire movie on a two inch screen, assuming that the battery does last that long? While the technology does exist, the whole question here is whether a market for it exists, and if it does, will Motorola be able to use it to boost its sales?

The fast food industry is just one of those industries that seem to be constantly under fire, and almost akin to the tobacco industry. It has come under fire from multiple consumer protection agencies, the media and health “fanatics” who blame it for every possible type of disease that can be brought about from unhealthy eating, and the ever increasing problem of “first-world” obesity.

The article in question looks at the pre-emptive approach that McDonald’s is taking to counter a fierce non-market issue: attacks from the media and critics, and in this particular case, the publication of a new book about the dangers of fast food. In response to news that the book will be published in a month’s time from the date of the article, McDonald’s launched one of its now ubiquitous “health” food campaigns promoting its range of salads and reduced-fat meals.

Applying Barron’s framework to the article, we can see a strong non-market issue in play. As for the four i’s: the issue is McDonald’s defending itself from attacks by the parties mentioned earlier, interests include McDonald’s, consumers and Eric Schlosser. Institutions include the media and public sentiment. Information, a critical component, is widespread and fierce and goes for and against McDonald’s.

I believe though that McDonald’s is just one of those giant corporations such as Starbucks, Phillip Morris or even the Ford Motor Company that must face criticism regardless of how well they respond to it. It seems that public will attack such companies merely because of their colossal size, and often those doing the attacking are from the “down with corporate America” sort of mentality. While I do agree that such corporations have to be closely scrutinized because of their sheer power, I do believe that such actions bring about large and unnecessary costs to both the corporation itself as well as society, yet with the litigation-fuelled culture that is present today, such non-market issues do not seem to be disappearing anytime soon.

Wal-Mart has always been traditionally at the tail end of unions, the media, late-night show hosts and the general public. While the gigantic retailer is shopped at by millions of consumers each year, it has not done much to win the heart, rather than the money, of its customers.

The article in question looks at the sentiments of New Yorkers towards Wal-Mart. The author says that while the New Yorkers surveyed would spend their money in Wal-Mart, they wouldn’t like to see one in their community or work there. They attribute this to Wal-Mart’s non-union policy and global supplies. While that is the main theme, the article touches upon the more emotional theme of the so-called “self-interest” that American’s exhibit, saying that while the don’t mind shopping at Wal-Mart, they don’t like the way it operates. On the other hand, the authors claim that other cultures shun self-interest, and thus we can infer that those cultures, put in the same situation the New Yorkers are in, would not shop at Wal-Mart.

To look at this situation with an academic eye would lead us to notice that Wal-Mart exhibits some positive as well as some negative attributes. The desire by consumers to “get the best deal” possible always works in favor of Wal-Mart thanks to their low prices achievable only by the massive economies of scale that they possess. The demand for consumers money in America is a cutthroat ambition and retailers will not stop at anything to out-price the competition. On the other hand, Wal-Mart was recently attacked in a large media campaign for employing illegal immigrants and paying them meager wages.

Thus from Hamel’s Business Concept Innovation (BCI) model, we can state that Wal-Mart’s core strategy is to provide large retail outlets selling consumer products at low prices (which also relates to their pricing structure), yet its “relationship dynamics” component is a combined love-hate relationship, since Wal-Mart relates to its customers thanks to its aggressive pricing strategy but its customers disassociate themselves from it because of its poor employment practices, hence exhibiting unique relationship qualities.

The recent boycott of Danish products in Islamic nation was quite a bold move and an indicator of how strong buyer power can be. Even though non of the Arab governments officially endorsed the boycott, which centered primarily around dairy products, supermarkets and retailers “voluntarily” removed Danish products of their shelves.

The reason why the move was not quite “voluntarily” was because consumers were even willing to boycott supermarkets that did not remove Danish products from their shelves. Thus another solid example of Porter’s model of buyer power is seen. But I believe that one of Porter’s other forces, the threat of substitutes, is also involved. Think of it, how many other non-Danish brands offer dairy products? Tens of them do. Additionally, how difficult is it to dump the cheese you have currently in the fridge and replace it? It would cost, in relative terms, only a few extra dirhams because there’s plenty of substitutes.

But what if we were boycotting a nation that produces something essential that we really cannot substitute that easily. Take Japan for example. Would you stop driving your car, or even stop watching shows on your Japanese T.V. at home? Would you stop using your calculator, phones and kitchen appliances, or would you even dump them and buy new ones? Probably not. The same goes for other nations that produce items we rely on for our daily life, so when considering how “successful” the Danish boycott was, remember that all we had to do was stop buying Danish cheese, not Danish cars.

Another issue I would like to touch upon is the self-inflicted harm the boycott has caused. Has anyone even thought of the supermarkets here that employ Muslims, or the Muslim agents of Danish products that have been severely crippled in the process, through no fault of their own. It makes other agents who carry brands from other nations worry about overnight financial disasters such as these. Those boycotting need to know that the harm done to local agents is probably much higher than that inflicted on the producers themselves, and so a radical boycott may need a little critical thinking before its application.

Hi! This is a test post for MBA618 Blog Project.