While aligning the assets of two companies we recently acquired, we have begun to assess the value of their brands. Brands are a key competitive asset; perhaps even the ultimate asset in helping withstand the threat of low-cost imitators of our products. Now I need to determine whether to license more brands or try to compete with non-brands and private labels. This has forced me to rethink our strategy of using and licensing brands. Back when I led Gemini Industries, we used name brands to help differentiate an otherwise simple commodity from our competitors. Additionally, our largest customers were those that valued brands as
In early October we sold our business and then bought the assets of two consumer products companies to form a new company, Alco Consumer Products, that will provide retailers with the best of the products offered by each company. Through the process of combining these companies, I learned lessons that will help us be successful in the coming years. The most serious challenge was the lack of structure in organizing product assortments. I asked some of our product managers how they saw the market and the products we make, and their answers were not clear. Did we offer a good, better and
Imagine waking up and reading the following: “China’s fast-growing middle class demanding higher wages and better working conditions.” “Global demand for raw materials creates 400 percent increase in manufacturing raw material costs.” “Major U.S. manufacturer set to recall 20 million products due to traces of banned substances in their product.” “China’s government reduces VAT refunds reducing manufacturers/exporters profitability.” It is happening and will continue to happen. The implications are clear that we are entering a new age where we will need to be much smarter at running our businesses. The last 20 years will prove to have been relatively easy compared to today. What has
I recently had the good fortune to spend a few hours with a diverse group of consumer electronic accessories companies discussing the opportunities and threats that our businesses face. What I found interesting is, regardless of whether we sell cables, wall mounts or recordable media, our challenges are the same. By dealing with those challenges with the right strategies, however, we have the potential to change our businesses in dramatic ways. Here’s what we came up with. We all agreed that our businesses still generated decent margins and growth opportunities. This growth is driven by our willingness to innovate, either through the technology
Imagine waking up and reading the following: “China’s fast growing middle class demanding higher wages and better working conditions.” “Global demand for raw materials creates 400% increase in manufacturing raw material costs.” “Major U.S. manufacturer set to recall 20 million products due to traces of banned substances in their product.” “China’s government reduces VAT refunds reducing manufacturers/exporters profitability.” It is happening and will continue to happen. The implications are clear that we are entering a new age where we will need to be much smarter at running our businesses. The last 20 years will prove to have been relatively easy compared to today.
While at breakfast in Hong Kong, I overheard three buyers from a major retailer arguing over what type of customer shops their stores. The conversation started with the statement that their typical customer is a 50-year-old woman. The woman, they continued doesn’t shop for herself, but instead buys the inexpensive stuff for her kids because she would rather spend more on brand-name products for herself. Then one of the buyers argued that she’s wasting her money because everyone knows that branded product is made in the same factories as non-branded. Therefore the customer shouldn’t care less and should just shop for the best price. I
So what does living in New Jersey, joining Philips Consumer Electronics and conducting business with Wal-Mart have in common? All three have confronted the increasing need to address our environmental issues directly. New Jersey started its recycling programs many years ago and residents must comply or their trash will not be collected. Philips’ dedication to environmental sustainability is unmatched, requiring licensees and employees to back the company’s dedication. And finally, Wal-mart has turned a reactive business posture into an aggressive strategic position of being a leader in pushing environmental sustainability. Living in all three worlds makes it clear to me that we will have
I woke up in a cold sweat last night thinking about recent developments. Early in the week I lost business from a retailer partner to one of my suppliers. Two days later I was asked to participate in a line review but forgot to focus on the innovation in my product and its associated brand. Yesterday, I spent hours educating a retail partner about a new product line and how its flawed marketing strategy lead to an overall sales decline for my partner’s company and mine. All around, they were lose-lose situations for our retail partners and us. But they didn’t have to be.
I’ve had a series of wake-up calls over the last year that have opened my eyes to the impact outside influences have on my business and the CE industry in general. It’s no longer enough to work hard within the insular world of a particular company. We have to work hard to venture beyond the self-imposed boundaries that too often block us from achieving maximum success. Each month in this new column we’ll bring you the voices of different industry leaders who will share the strategies and insights they’ve learned from stepping across those boundaries and exploring worlds that may seem far away today