How they boost income: 29-May-08
Sourav Mitra -
Thursday, May 29, 2008 10:18 PM
Holiday Group of Cos., Siberia's largest supermarket chain, which includes Holiday Classic supermarkets, Sibiriada convenience stores and more upscale Kora and Turne grocery outlets:
1. It will focus on Siberia for growth
2. It added 61 outlets last year in Siberia, where competition is less intense than in Moscow and St. Petersburg
3. It will increase selling space 30 percent this year.
4. It will open its own outlets rather than acquire smaller chains and
5. It will focus on improving assortment, services and product availability to lure customers away from other chains (earlier it used lure customers away from open markets)
6. It is seeking a new stakeholder to help fund expansion and reduce debt after previous acquisitions. It may sell a stake of between 20 percent and 35 percent in an initial public offering after 2009
[Click here for full story at Bloomberg.com]
One person's place of dread = another person's place of bread … butter … cake … and … ale
Is it too early to worry about over-investment in Siberia?
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PCCW Ltd., Hong Kong's biggest phone carrier, which also provides broadband Internet, pay- television and mobile-phone services in Hong Kong and operates telecommunications ventures overseas, including China and the U.K.:
1. It will boost overseas technology investments by selling 45 percent of a new unit that will include its main telecommunications assets in Hong Kong. It is interested in opportunities in the Middle East, China, and elsewhere in Asia.
2. It partnered with Mawarid Group to win a license to provide fixed- line phone and broadband Internet services in Saudi Arabia
[Click here for full story at Bloomberg.com]
Moving into emerging markets = more income
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Umpqua, a regional bank in Oregon founded to provide loggers and farmers a banking alternative:
1. It created an authentic relationship with its customers by finding out what they wanted and providing that.
2. It provided customers with a "slow banking" experience because its customers were craving intimacy, because they were tired of the impersonal service they received from regular banks competing with a convenience strategy centered around the Internet and ATMs and they were suspicious of financial institutions in general.
3. Its flagship store in Portland's Pearl District delivered an unprecedented banking experience tailored to the specific needs of Umpqua's customers and the unique expression of Umpqua's DNA.
[Click here for full story at Businessweek.com]
Authentic transparent relations with customers = customer trust and comfort = differentiating factor = more income
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Sears Holdings Corp., the largest U.S. department-store chain with an unexpectedly first- quarter net loss because a lot of their product lines right now are squarely in the middle of the economic slowdown:
1. It ousted its CEO in January
2. It reorganized into five categories including Internet and brands in an attempt to reverse sales declines.
3. It will introduce an exclusive clothing line by Grammy-winner LL Cool J later this year.
[Click here for full story at Bloomberg.com]
Reorganizing into more valuable categories of focus = more income
Introduction of new product ranges = more income if they are beyond the realms of the slowdown monster or in the realms of inelastic demand.
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ExxonMobil, U.S. oil company Exxon, with first-quarter net income of $10.9 billion:
1. It will not move into alternative renewable fuels
2. It will not move into reduction in greenhouse gases
[Because: investors are more concerned about return on capital than carbon caps and because the renewable technologies are not yet commercially viable.]
[Click here for full story at Businessweek.com]
Focusing on currently profitable businesses = more income for the present
Should the future be left only for future generations to worry about?
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Bidz.com, online jewelry auctioneer:
1. It diversified beyond auctioning jewelry from jewelry makers looking to close out excess inventory.
2. It looked for bankruptcy auctions where it could scoop up manufacturer inventories for pennies on the dollar and pass on some of the savings to customers.
[Click here for full story at Businessweek.com]
A successful income formula spread onto other products = wider income stream
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H.J. Heinz Co., the world's biggest ketchup maker:
It will introduce a two-year plan to:
1. Add more than 400 new products
2. Raise some prices and
3. Push into emerging markets like China, India and Indonesia
[Click here for full story at Bloomberg.com]
400 new products + higher selling prices + push into emerging markets = higher income after it recovers the costs involved
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International Olympic Committee:
1. It is taking in $2.5 billion from media companies for rights to the 2006 Winter and the 2008 Summer Games.
2. So it will limit piracy by using technology from Silicon Valley's Vobile to spot any pirated video that ends up online and send legal notices to Web sites within minutes of their posting pirated videos.
[If unofficial video sites siphon off too much of the audience, licensees won't pay as much in the future.
Vobile sells video-fingerprinting technology, which extracts bits of code from each video and then files these unique "fingerprints" in a database and automatically scans sites such as YouTube to see if any of the clips in the database show up.]
[Click here for full story at Businessweek.com]
Piracy stopped = income gained (usually)
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Dell Inc., computer maker:
It began to sell PCs through retail stores in a bid to win customers from Hewlett-Packard Co., the top seller for seven straight quarters. It is distributing computers through 12,500 stores in the world's 20 largest economies, ending its two-decade-old strategy of selling only by telephone and the Internet.
[Click here for full story at Bloomberg.com]
Distribution through stores = more income, but at a cost which it avoided earlier.