Strategy Muse

How they boost income: 23-August-08

Baugur, the Icelandic retail investment group with strategic investments or controlling stakes in retailers, department stores, jewellery chains, womenswear chains, and fashion conglomerates:
1. It makes an overwhelming majority of its investments in food, department stores and fashion chains.
2. It made an offer to purchase Woolworths' retail division to manage it more efficiently, with better ranges and availability. It will not put frozen food into a large number of Woolworths stores
3. It lets the management teams of its retail investments get on with the day-to-day job of running the business.
4. It uses its international presence to further export its brands overseas - it will launch Hamleys in India, after opening stores in Jordan.

[Click here for full story at Businessweek.com]

Focusing on core competence areas + making acquisitions that it can add value to + using international presence to further increase international growth = scope of greater growth of income
Giving management teams freedom in day-to-day jobs = ambivalent impact on income depending on circumstances and people involved

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Erento, a one-stop shop for leasing everything from wedding dresses and Apple iPhones to karaoke machines and heavy construction equipment:
1. It created an online rental marketplace that draws suppliers from so many areas. It enables anyone to become a rental supplier.

[8,000 European rental companies have elected to use erento as a sales channel. It now lists more than one million items across 2,200 product categories and claims up to 50,000 visitors a day. It is about to add cocktail dresses and jewelry. Rental suppliers upload their items, including an image, item description, and price for the rental duration. Renters then search and find their desired items according to location and price.]

2. It charges a display fee of 69¢ per item and takes a 4.9% cut of the rental price of any item procured through its site
3. It will expand its existing service in Europe first and then tap the U.S.

[Click here for full story at Businessweek.com]

Servicing human needs = key to income
Expansion into growing markets = more income

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Ebay, the online auction giant:
1. It wants to increase the inventory of items for sale and attract more buyers.
2. It will imitate Amazon and court users who sell at fixed prices.
3. It will make it easier to list items for sale at a fixed price
4. It will slash the upfront fees it charges to list sale items by as much as 75%, while increasing its final sales commission.
5. It instituted a ratings system that makes it easier for buyers to leave bad reviews without fear that the seller will flag them as a problem shopper to help identify risky sellers
6. It added a search system that de-emphasizes sellers with bad ratings
7. It has pledged that its online system, PayPal, will refund money from fraudulent transactions

[Click here for full story at Businessweek.com]

Acquiescing and changing to market preferences of business model and offering incentives for the transition  = more income
Making the business model more fair and healthy = customer appeal = more income

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Bramdean Alternatives Ltd., Nicola Horlick's money-management firm:
1. It constantly fine-tunes its transitional portfolio to the market environment to respond to the funding requirements of the private equity investments
2. It pulled money out of hedge funds run by Nobel prize-winner Myron Scholes and James Dinan and Enso Global Equities Fund and Oak Hill Credit Alpha Offshore Ltd. to focus on more defensive funds for capital preservation as market volatility increases.

[Transitional portfolios invest money set aside for private equity commitments. Buyout firms typically take as long as five years to draw down the money investors commit to a pool.]

[Click here for full story at Bloomberg.com]

Continuous monitoring and tweaking is the only secret of making money from money's journey through time and yield fields.

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MPC Synergy Real Estate SA, a joint venture of Germany's MPC Capital AG and Synergy Asset Management of Switzerland:
1. It seeks to benefit from the demand for offices and new homes in India, which will need 55 million square meters of new office space over the next five years
2. It will invest $298 million in Phoenix Mills Ltd., the second-worst performer on India's main realty index, and acquire stakes of 10 percent to 49 percent in 21 projects of Phoenix Mills and its units across India
3. It will also invest in EWDPL Group, 42 percent owned by Phoenix Mills

[Click here for full story at Bloomberg.com]

Participating in 'high demand low supply' markets = more income

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For more posts about how businesses are boosting income and controlling cost please visit the URL below:
http://blogs.livemint.com/members/Sourav%20Mitra.aspx