Strategy Muse

How they boost income: 09-June-08

Apple, converging technology company:
1. It is launching an iPhone App Store where developers will be able to sell, and consumers will be able source applications for the iPhone so that these applications enhance the appeal of the iPhone and boost sales further.
[The applications will range from productivity tools and video games to specialized applications like Lingolook, which offers travelers helpful phrases in Japanese, Chinese, and French]
2. It will allow iPhone users to browse and buy applications with one click if their credit- and debit-card information are already stored to their iTunes accounts
3. It may enable applications to take advantage of the built-in GPS receiver, which can pick up satellite signals from the Global Positioning System to determine the device's location.
4. It will encourage impulsive downloading, as most applications offered there will likely be free, but with display revenue-producing ads. [But Apple will not share in the ad revenue yet].
5. It will keep 30% of the revenue developers obtain from applications sold by subscription or with a one-time download fee. [As this a smaller cut than distributors of applications for other mobile devices, many App Store downloads may be priced cheaper.]

[Click here for full story at Businessweek.com]

Is this a near-perfect example of Prof C.K.Prahalad's and Prof M.S.Krishnan's new big idea which something like: Max(R=G) @ Max (Cc) = Max(N=1)?
It means: If you maximize the resources you source globally and place at the disposal of the maximum number of c-creationists you can attract, then you will maximize the number of customers you will be able to maximize the number of customers you will be able to provide with the unique products and services they seek. [Clarification: the iPhone application developers here are the co-creationists]

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Hewlett-Packard IT company whose consumer printer sales have declined four of the past five quarters and needing to add $1.5 billion in revenue each year:
1. It is investing in overseas markets, targeting commercial printing shops that have yet to embrace digital technology, and trying to push consumers to make more printouts of photos, boarding passes, maps, and other content from the Web.
2. It is moving the group into "printing services" (i.e. managing fleets of printers for customers) in the office printing market.
3. It will announce a batch of three more printers in New York on June 10
4. It cut prices steeply for some of its ink cartridges, some to as low as $10 to $15.
5. It is treading into the world of the social Web, trying to build photo-sharing communities like Tabblo, acquired in 2007, to spur consumers to create printouts and craft projects.
6. It is spending $300 million this fiscal year on a multiyear ad campaign aimed at getting consumers to print a broader array of material, including announcements, greeting cards, and scrapbooks.
7. It is incubating new businesses like a project called BookPrep, which aims to let consumers purchase scanned copies of out-of-print books, annotate them with their own content, then print out the results.

[Click here for full story at Businessweek.com]

Focusing on growing markets + entering services and new domains + aggressive pricing + new advertising + creating new niches in the market = income growth.

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McDonald's Corp., the world's largest restaurant company:
1. It has pushed into overseas markets, tailoring hamburgers and Egg McMuffins to the tastes of local customers.
2. It has tried to bolster U.S. sales with the introduction of chicken sandwiches and biscuits and specialty coffee. It will install counters selling cappuccino and lattes through 2009.
3. It will push both lower-priced and premium products and emphasize profitable breakfast menus and drive-through restaurants in Europe.

[Click here for full story at Bloomberg.com]

Catering to local tastes in foreign markets + introduction of new products + introduction of competitors' products + proactively fine-tuning the product mix = more optimum income.

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JetBlue Airways Corp., the U.S. discount carrier:
1. It will to buy Verizon Communications Inc.'s Airfone business to offer e-mail and messaging services aboard planes expanding on the in-flight messaging service it started testing on one plane in December and plans to add to other aircraft and carriers.
2. It won a U.S. government auction of airwaves this month to provide Web service on flights.
3. It is studying ways to allow passengers to use BlackBerry e-mail devices during flights.

[Click here for full story at Bloomberg.com]

Customer convenience = more income

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Barclays Plc, the U.K.'s fourth-biggest bank by market value:
1. It may sell shares to replenish capital depleted by asset writedowns.
2. It is in talks with sovereign wealth funds to gain more than 3 billion pounds of funding.
3. It wants to expand its securities unit in the U.S. as New York-based rivals sell stakes amid record losses and writedowns.
4. Its Barclays Capital unit is focused on growing through hiring, investment and acquisitions.

[Click here for full story at Bloomberg.com]

Business blood-transfusion = greater chances of income revival