How they boost income: 30-May-08
Sourav Mitra -
Friday, May 30, 2008 11:07 PM
British Telecom, Britain's former state-owned phone company and biggest fixed-line provider:
1. It is looking for new areas for growth.
2. It will focus on home entertainment, delivering broadcast TV and movies to customers' homes after boosting the speed of its broadband services, potentially spending tens of billions of dollars pushing fiber-optic cables into homes.
3. It is aiming to attract 2 million customers in three years but so far has signed (but response so far has been lukewarm.
4. It will focus on global IT services for growth.
5. It will focus on improving customer service as a business differentiator.
6. It has asked British telecom regulator Ofcom to resolve the shortfall in the income guaranteed to it for splitting off its network to ensure that rivals could rent access on the network on equal terms.
[Click here for full story at Businessweek.com]
Moving into sunrise businesses = income growth into the future
Requires foresight and luck
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Dell Inc, the world's second-largest maker of personal computers:
1. It has focused on laptops and servers since early last year.
2. It is now focusing on the fastest-growing segments: consumer sales and emerging markets in Brazil, Russia, India, and China
3. It is improving product design
4. It is adding compelling product features
5. It is broadening retail sales of its machines at reduced margins through 13,000 stores, including Wal-Mart Stores, Best Buy, Staples, Costco Wholesale, Officeworks, in Australia, Bic Camera Inc. in Japan, Carrefour SA in France and soon Suning Appliance, a consumer-electronics chain in China
6. It is beefing up international operations.
7. It will keep increasing sales in Asia faster than the industry
8. It will to add workers in Asia even as it cuts employees in the other regions
[Click here for part of the story at Businessweek.com]
[Click here for a part of the story at Bloomberg.com]
[Click here for another part of the story at Bloomberg.com]
Increased focus on improved products + growing segments + emerging markets + retail sales = income growth
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Praktiker AG, Germany's second- biggest home-improvement retailer:
1. It cut prices for many products
2. It started a television advertising campaign to attract customers.
[Click here for full story at Bloomberg.com]
Lower prices can be effective income boosters during economic downturns provided they cover costs.
TV advertising will raise awareness but how cost-effective can it be made?
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Tiffany & Co., the world's second- largest luxury-jewelry retailer:
It will accelerate its international expansion, increasing the number of worldwide locations by 15 percent through early 2009.
[Click here for full story at Bloomberg.com]
Adding outlets in growing markets = more income growth.
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Allco Finance Group Ltd., Australian asset manager:
It has agreed to the tripling of the yield margin by its bankers on $238 million of debt in exchange for a one-month extension on repayment.
[Click here for full story at Bloomberg.com]
When money is the seed of income and money becomes scarce for the business, paying a premium to secure the money may ultimately lead to income.