Market Orientation: Best Buy is NOT Market Driven nor Market Driving

Hola Todos!

Echoing a popular theme on DigNuggetville.com, perhaps the non-market orientated stories make better articles.  Either way, I just see them almost everywhere I read.  Last week it was Nokia (click here).  This week, its Best Buy.

I was reading this morning on CNNmoney.com and here’s another firm in a downward spiral – Best Buy (click here).  Once the poster child for market orientation, now internal power struggles as well as plain stupidity may be Best Buy’s downfall.

Something to think about today…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

Social Media Metrics Roundup

Hola Todos!

My passion for the Web 2.0/Social Media world is driven by an ROI mentality.  With regards traditional marketing (e.g., mass marketing), I feel the famous quote by John Wanamaker says it best:  “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Its not that social media metrics are perfect – far from it – but in my eyes, these new web are much better that anything we have ever had or did before.

The first of the three articles featured today is from Adweek (click here) and it opens with that famous Wanamaker quote.  In addition, the article details how old-school sex and age targeting will be rendered obsolete by better metrics.

The last two articles list a number of metrics tools – most of which I had never heard of and need to start exploring.  The first is from Amex’s OpenForum and discusses the 10 smartest web analytics tools (click here).  The second is from Social Media Examinier and explores 5 metrics tools specifically for Twitter (click here).

Something to check out today…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

Market Orientation: Nokia is NOT Market Driven nor Market Driving

Hola Todos!

As I always said in class, it is much easier to find non-market orientated firms than market orientated ones.  The other day when reading The Wall Street Journal, I found 2012’s exemplar firm on how to be non-market orientated.

For a quick review, market oriented firms have three main characteristics: (1) an incredibly strong external orientation towards customers, (2) an incredibly strong external orientation towards competition, and (3) incredibly strong internal communication within the firm.  Most firms do #1 and #2 well.  These two orientations are relatively easy.  Its #3 is where most firms do not do well (or at all).  Too many companies have functional silos (e.g., divisions, SBUs, offices, etc. that are relatively independent and do not talk/plan/coordinate together).  Non-market orientated firms have mostly an internal orientation for items #1 & #2 and item #3 is non-existent.  Companies that have mostly internal power struggles and are dominated by politics are mostly non market-orientated.  For more detail market orientation along with the two main types, market driven and marketing driving, click here.

In “Nokia’s Bad Call on Smartphones” journalists Anton Troianovski and Sven Grundberg detail many of Nokia’s non-market orientated missteps in the smartphone marketplace.  What follows are some select quotes from the article and then my commentary afterwards.

This year, Nokia ended a 14-year-run as the world’s largest maker of mobile phones, as rival Samsung took the top spot and makers of cheaper phones ate into Nokia’s sales volumes. Nokia’s share of mobile phone sales fell to 21% in the first quarter from 27% a year earlier, according to market data from IDC. Its share peaked at 40.4% at the end of 2007.”   – – Notice Nokia’s peak was the same year the iPhone hit the market and one year before Android.

More than seven years before Apple Inc., rolled out the iPhone, the Nokia team showed a phone with a color touch screen set above a single button. The device was shown locating a restaurant, playing a racing game and ordering lipstick. In the late 1990s, Nokia secretly developed another alluring product: a tablet computer with a wireless connection and touch screen—all features today of the hot-selling Apple iPad. Consumers never saw either device. The gadgets were casualties of a corporate culture that lavished funds on research but squandered opportunities to bring the innovations it produced to market.”  Ouch – the next set of quotes emphasizes the lack of interfirm communication component of market orientation.

Nokia is losing ground despite spending $40 billion on research and development over the past decade—nearly four times what Apple spent in the same period. And Nokia clearly saw where the industry it dominated was heading. But its research effort was fragmented by internal rivalries and disconnected from the operations that actually brought phones to market.”  Politics and functional silos KILL market orientation.  R & D didn’t work with marketing who didn’t work with operations – let’s not forget about senior leadership.

In 1996, the company unveiled its first smartphone, the Nokia 9000, and called it the first mobile device that could email, fax and surf the Web. It weighed slightly under a pound. “We had exactly the right view of what it was all about,” says Mr. Ollila, who stepped down as chief executive in 2006 and retired as chairman in May. “We were about five years ahead.” The phone, also called the Communicator, made an appearance in the movie “The Saint” and drew a dedicated following among certain business users, but never commanded a mass audience. Nokia’s smartphones had hit the market too early, before consumers or wireless networks were ready to make use of them. And when the iPhone emerged, Nokia failed to recognize the threat.”  Here – we have a clear failure of the 2nd part of market orientation – an incredibly strong external orientation towards competition.  Plus senior leadership at Nokia failed to look forward and see where the market was headed.

One team tried to revamp Symbian, the aging operating system that ran most Nokia smartphones. Another effort, eventually dubbed MeeGo, tried to build a new system from the ground up.  People involved with both efforts say the two teams competed with each other for support within the company and the attention of top executives—a problem that plagued Nokia’s R&D operations. “You were spending more time fighting politics than doing design,” said Alastair Curtis, Nokia’s chief designer from 2006 to 2009. The organizational structure was so convoluted he added, “it was hard for the team to drive through a coherent, consistent, beautiful experience.”  Wow – no interfirm communication or coordination – more like creating a competitor within you own company? What make this all worse is senior managers in the C-suite supported this strategy, then was divided as some supported Symbian and others backed MeeGo.  Much time, money and resources were spent on Symbian and MeeGo in internal battles and competitors Apple and Android took advantage of opportunity by the distracted #1 player.

The irony of this whole Nokia story is that after all that time, money and resources were spent on Symbian and MeeGo, BOTH were scrapped as Nokia took Microsoft’s cash and switched over to Windows mobile.  OUCH!

In closing, just about everything in the Nokia story above (except the cameo part in a movie) was mirrored by the 2011 exemplar for non-market orientation: RIM and their Blackberry smartphones.

 

Something to think about today…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

How High (or Low) will Apple’s Stock Go?: Commentary on Q3 Results

Hola Todos!

I think the headline from yesterday’s AllthingsD blog says it all: “Apple Earnings: a Bummer, Not a Beat” (click here).  While Apple hit their very conservative guidance, it was only the second time in 39 quarters the company reported results that missed analysts’ profit and revenue expectations (click here for The Wall Street Journal details).  Apple’s stock dropped about $30 dollars or around 5% in after hours trading yesterday.

At center stage and Apple’s main issue were sales for iPhone have slowed down much more that expected and at the moment, iPhone drives sales and margin for the entire firm.  Apple sold 26 million iPhones in its quarter ended June 30, a 28% increase from the same quarter a year ago but down from the 35.1 million sold in the prior quarter this year.

Rumors, the strongest for any non-announced product I can think of in recent memory, have been rampant and many US consumers are holding out for this mythical iPhone 5.  Add that demand in Europe was weak and sales in China did not pick up the slack resulted in a bummer quarter for Apple’s standards.  As John Gruber of the Daring Fireball blog stated (click here), “It’s a testimony to just how remarkable Apple’s last few years have been that 23 percent year-over-year growth looks so bad on a chart.” Dan Frommer of blog SplatF does an excellent job graphically illustrating how Apple’s major product lines have trended in recent quarters (click here). I guess its not surprising that Apple pushed up the release for its new Mountain Lion OS (click here) for the day after the earnings call so that the business press will have something else to talk about other than Apple’s Q3 sales and earnings.

Philip Elmer-Dewitt of the Apple 2.0 blog is the best in the business on tracking Apple particularly on the financial side.  Click here for yesterday’s post earnings call commentary, click here for the amateurs vs. pros forecast analysis on Apple data, and click here for commentary from all the financial analysts thoughts on yesterday’s call details.

The bottom line is Apple was “bitten by the product transition bug” as stated by one of the analysts. Other than iPad, Macs got a major OS overhaul as well as significant product refresh, and everyone is waiting for a new form factor iPhone 5.  Moreover, the Apple TV rumors as well as a new 7-inch iPad mini are quite strong as well.  I feel the analysts are correct; Apple’s Q4 (July, August & September) will also be very soft.  However, Q1 (October, November & December), and Q2 (January, February, & March) should be back to Apple’s standards or better if we see at least two of the three rumored products (e.g., iPhone 5, Apple TV and/or iPad mini).  One of the analysts called this “the calm before the storm” and if I had the money, I’d buy now before some of these new products push the stock even higher.

 

Something to thing about today…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

Twitter’s Business Model?

Hola Todos!

Beyond Yahoo and the “What is Yahoo?” question, the other “billion” dollar question frequently discussed in the business press is “What is Twitter’s business model?” To be honest, a simple answer to that question does not exist.

A new flurry of articles sprang up after Twitter announced in late June that Twitter will soon have “stricter guidelines” around how much latitude independent developers will have to build applications on top of Twitter (e.g., its API). At the same time, LinkedIn announced it no longer had permission to include Twitter streams inside of the social network (click here for more detail from Reuters).

In sum, it appears Twitter is on the move to towards an “advertising” dominant model as they clamp-down on how and where Twitter’s content – the stream of Tweets – is viewed by users (e.g., controlling the where the eyeballs see Tweets).  Twitter’s 140 million monthly active users collectively publish 400 million Tweets daily and CEO Dick Costolo believes Twitter will have a $1 billon dollar ad business by 2014.

Recently, I listened to John Gruber’s “The Talk Show” podcast (from approximately the 28:00 to the 1:03:00 min mark – click here) with guest Dan Frommer and they dumped a healthy hump of skepticism on this strategy (click here for Dan Frommer’s detailed commentary on his blog SplatF).

While Twitter is just 6 years young, the pressure is on for Twitter to develop a sustainable business model.  For the past 18 to 24 months, the leaders at Twitter still have not convinced any of their constituents (e.g., the business press, advertisers, geek professors like myself, etc) that they have a business model that is both scalable and sustainable.  I expect to see more announcements/refinements from Twitter by year’s end.

Something to think about today…

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

Yahoo, Yahoo and More Yahoo!

Hola Todos!

No question that the biggest story in the week as been Yahoo! and their dynamic new CEO Marissa Mayer.  One of the latest has been detail on her pay and bonus package (click here).  With 5 CEOs in the last 5 years, I guess I should not have been surprised that Marissa’s full package vests in 5 years.  By contrast, Apple CEO Tim Cook’s package vests in 10 years.

One of the best articles of the week is courtesy of Douglas Rushkoff  (click here) who although is favorable on the hiring, is mindful a massive turnaround in the web 1.0 or web 2.0 era hasn’t happened.  Sure IBM and Apple are classic tech turnaround case material but these were hardware and software companies; digital problem children are either bought out for their technology/patents or just go under.

Who am I to sit out on this party? Check out comments by Dr. Dan-o on E-Commerce Times (click here).  Erika Morphy does a nice job detailing arguments for and against Yahoo’s new CEO.

Enjoy!

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

A tribute to Stephen Covey

Hola Todos!

Stephen Covey, one of the world’s foremost leadership authorities, organizational experts and thought leaders, passed away yesterday.  However, the ideas from the sage including the landmark “The 7 Habits of Highly Effective People” as well as “First Things First,” “Principle-Centered Leadership,” and “The 8th Habit: From Effectiveness to Greatness” will live on.  In my eyes, “The 7 Habits” is as close to management canon as “How to Win Friends and Influence People.” For information on the life of Mr. Covey click here and for an excellent tribute by Tom Peters in The Washington Post, click here.

It was Mr. Covey’s “First Things First” is what I will remember him most by as his “Big Rocks First” parable (click here) not only got me though my Ph.D. program, but also is a critical principle of my day-to-day time management.

 

Best regards,

Dr. Dan-o

 

 

 

 

Yahoo is Going to Save itself!

Hola Todos!

I have been critical of Yahoo on the blog (try here and here) but now, Yahoo will be a firm to follow with the addition of former Google employee #20 Marissa Mayer.  Finally, Yahoo has itself a leader who will use her product and advertising knowledge gained at Google to steer Yahoo in the right direction.  The surprising and unexpected news broke on the NY Times Monday afternoon (click here).  Here is so much to talk about with this story that I am just going to blurt for now:

-Congrats for Marissa who jumped a few levels of the executive tree to land the CEO gig.

-Marissa is now one of 20 female CEOs in the Fortune 500.

-She could not have been very happy in the Page tenure as she was not given a significant position when he became CEO.

-I see this as a major blow to Google as the Page tenure has not smooth by any stretch of the imagination.  I feel Yahoo’s luck in landing Mayer has just as much to do with the lack of vision and/or conflict at Google with Page.

-Yahoo should be able to attract stronger talent (including some future Google defections) in the hyper competitive valley environment.

That’s it for now – I am sure I’ll be blurting about this more in the weeks to come.

 

best regards

Dr. Dan-o

 

 

 

 

 

 

 

How To Make Wise Choices

Hola Todos!

Continuing our theme for the week, book recommendations and/or TED sessions, I’m going to do both today.

One of the best books I’ve read this year is The Art of Choosing by Columbia Business School professor Sheena Iyengar.  Professor Iyengar is social psychologist and one of the world’s experts on choice.  In her excellent TED talk (click here), Professor Iyengar gives us four techniques to deal with choice overload.

Something to think about today…

Best

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

 

 

Leadership: Listen FIRST, Learn and then Lead

Hola Todos!

Since we are on a TED theme this week, today’s leadership nugget is from four-star General Stanley McChrystal, the former commander of U.S. and International forces in Afghanistan.  In his TED leadership video (click here), General McChrystal tells us that great leaders listen FIRST and then make decisions to lead their organizations.  How can you build a sense of shared purpose among people of many ages and skill sets? By listening and learning…

In addition to this message, General McChrystal reminds us of a similar theme here on DigNuggetville – failing forward.  Around the 7:18 minute mark, General McChrystal says, “Leaders can let you fail and yet not let you be a failure.”

Something to think about today…

Best

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University