How they boost income: 17-July-08
Sourav Mitra -
Thursday, July 17, 2008 8:16 PM
Ebay, the world's largest Internet auctioneer, losing market share to rivals such as Amazon.com, seeks to improve its fixed-price online retail business, grow PayPal and bolster customer safety and trust:
1. It made major changes to its business - a new fee structure based on a percentage of the sale price of items, system of rating sellers, and improved search technology.
2. Its PayPal payments system will soon be reimbursing shoppers for items purchased on eBay's site that turn out to be fraudulent.
[Click here for full story at Businessweek.com]
3. It removed most upfront fees to boost listings and encourage bargain-hunting
4. It is trying to stimulate activity in low-priced items on the site through promotions because they convert at a higher rate.
5. It shifted car advertising onto local classified sites.
6. It is expanding insurance for buyers and sellers using PayPal across the 190 countries
7. It is offering discounts to some big sellers.
8. Its PayPal unit signed agreements with Delta Air Lines Inc. and Blockbuster Inc.
[Click here for full story at Bloomberg.com]
Percentage based fee system = transparent and considerate income stream
Improved customer experiences = more income likely
More targeted advertising = more income
Discounts = more income if it induces volume growth adequately
Partnerships with big customers = more income
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SK Telecom, Korea's No. 1 mobile-phone operator:
1. Its emphasis is on developing data services and expanding overseas as the South Korean market is saturated.
2. It will continue to buy or forge alliances with local partners to expand its content and mobile financial-services business in the U.S., China, and Vietnam where it has stakes in local mobile operators.
3. It is seeking an acquisition to become a big player in the lucrative U.S. and use its expertise to roll out advanced mobile applications
4. It established a $110 million U.S. holding company last year.
5. It has attempted to strike a deal with Sprint Nextel the struggling U.S. carrier, which has been losing customers and in need of a capital injection. Both companies have invested in the same technology standards, a cellular network using CDMA, and both are investing in wireless technologies such as WiMax.
[Click here for full story at Businessweek.com]
When the home market is saturated, foreign markets may offer additional income streams
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Raytheon, defense electronics giant:
1. It is trying to win over UAV manufacturers such as Northrop Grumman, as well as the Air Force, by using video game technology.
2. It is borrowing techniques from the video game industry to make it easier for pilots on the ground to fly from afar remote-controlled planes or unmanned aerial vehicles (UAVs) that are taking on larger military roles.
3. It has augmented onboard camera with digital images similar to Google Earth that give the operator an almost 180-degree view allowing an overlay of other data, such as where troops are located, on top of the enhanced view in the same way video games offer players extra on-screen information.
[1. It can reduce costs for the U.S. Air Force by decreasing the frequency of UAV crashes, cutting the time spent training pilots, and shrinking the number of operators required to fly unmanned aircraft.
2. The system has already been used to pilot unmanned boats and submarines.
3. Mining and oil companies also have shown interest installing the product on drilling equipment to reduce the risk for humans working in mines or on offshore platforms.
[Click here for full story at Businessweek.com]
Open mind => creativity
Creativity => Innovation
Innovation => better product
Better product => more income
Therefore, Open mind => more income.
QED?
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Microsoft Corp., largest software maker whose profit growth may be stunted this year by a resurgence of software piracy in China:
1. It has increased offices and staff in emerging markets as a way to combat illegal software
2. It is working with local officials, encouraging PC makers to sell computers with legal software already installed, and letting illegal software users exchange their copies for genuine ones at no charge.
3. It helped the U.S. Federal Bureau of Investigation and the Chinese government expose a counterfeiting ring that had distributed more than $2 billion in illegally copied Microsoft software.
[Click here for full story at Bloomberg.com]
Preventing piracy = gaining income
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Wells Fargo, the fifth-largest U.S. bank:
1. It used the sub-prime crisis conditions to add attractive assets and new customers and to increase its market share.
2. It avoided the mistakes of its competitors. Unlike Washington Mutual and Wachovia, it didn't make large bets on riskier mortgages. Unlike Citigroup and Merrill Lynch, it didn't lose big on trading of complex debt instruments.
[Click here for full story at Businessweek.com]
Making hay when it rains indicates the strength to sustain steady income with good business practices
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Jin Air Co., Korean Air Lines Co.'s budget unit starts flying (as record fuel prices force airlines worldwide to axe routes, fire staff or to close altogether):
1. It will offer 22 percent lower fares.
2. It will add four more planes by April 2009.
3. It will add Busan-Jeju and Seoul-Busan services by April
4. It will add flights to China, Japan and Southeast Asia from the second half of next year.
[Click here for full story at Bloomberg.com]
Budget offers = more income (if the volume permits)
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Host Hotels & Resorts Inc., the owner of about 130 properties in the U.S. and Europe:
It increased the price of rooms to counter declining occupancy.
[Click here for full story at Bloomberg.com]
Price increase for low patronage = more income (if occupancy is not adversely affected by price increase)