Harley on the Highway to Beijing

After reading the article entitled “Hog Heaven in Beijing” by Brian Bremner, it is apparent that Harley Davidson is about to enter the Chinese market very soon, as soon as this April ! According to the article, “While Chinese biker culture today may be more about pedal-power than Harley-style hyper-horsepower, the company is betting that will change as the mainland's economy continues to surge.” The company is aware that it will be entering the market at a risk, however; it is eying the future of China as a potential market.

The models that will be rolled out to the Chinese market include Touring, Softail, and VRSC series, and they will be offered at premium prices. The same models can be purchased at much cheaper prices in the United States. The reason behind the higher prices include the import duties and taxes that the company has to pay and pass on to the consumer. Harley Davidson is well aware of the fact that the prices it is forced to charge might be too high for many people in China. However, the company decided to enter the Chinese market because it wants to expand globally. But why?

According to the article, “In the U.S., the $5.3 billion motorcycle manufacturer rules the heavyweight premium-bike segment with a 48.9% share, well ahead of Japanese rivals such as Honda and Suzuki. Overseas is a different story. Although Harley's international deliveries grew 15% in 2005, the U.S. still represents more than 80% of the company's sales.” Clearly, the US domestic market is the dominant market for Harley Davidson, as only 20% of the company’s sales are outside the United States. Therefore, Harley’s comepetitors, such as Honda and Suzuki are making the most out of the international market. Harley Davidson finds itself missing an opportunity, as it is not focusing on international sales. Through the dealership in China, it will enter the Chinese market in aim to increase its market share, which would affect the competition. The customer now has an extra choice of purchasing a Harley Davidson instead of a Suzuki or a Honda. The company’s presence will make a big difference.

The company is not expecting to take away the business from the competition right away, but with time, it is aiming to become a major player in the Chinese market. “Harley says it's not expecting immediately to twist the throttle in China. After the Beijing dealership opens, Foley suggests any further roll-out may be slow.”

A point I found interesting in the article, “Harley has no immediate plans to manufacture in China, which would help make its prices far more competitive.” By using the phrase “no immediate plans”, I understand that the company is considering to move its production facilities to China to produce for the Chinese market in the future. If Harley Davidson is to move its production facilities to China, it would not need to pay the taxes and import duties and therefore, can offer more attractive prices, affecting the competition and overall industry. Another advantage would be the the ease at which it can distribute its product to other Asian countries from China. In no time, the company might find itself in a position to be dominating the market in Asia. Competitors such as Honda, and Suzuki will feel the heat of the competition, as Harley Davidson already dominates the US and European markets. The Asian market, which is currently dominated by Suzuki, Honda and others in the industry might be grabbed by Harley Davidson, if things go according to plan.

The question is, will the Chinese consumer find the Harley Davidson as appealing as it is to the American consumer? Only time will tell. The company must be aware that culture might not be the key determinent of whether a product will fail or succeed in a particular market, but, in this case, I believe it will play a key role. After all, this is not selling Burger King’s Whopper in a different culture, it is selling a truly American characteristic to the Chinese culture. The fact that it has succeeded over the years in international cultures such as Europe and Canada leaves the door open for Harley Davidson to prosper.

SONY's Strategic Delay

I have read the article entitled “Sony Delays Playstation 3 Console Launch” where Kutaragi, the head of Sony’s video game division, announced the delay by the company until November. The main reason of the delay as mentioned is the development of Blu-Ray copy protection technology. Blu-Ray is one of the next generation DVD technologies, which allows more data to be stored on data discs. According to the company, it is trying to finalize the copyright-protection technology. However, I strongly do believe that the main reason behind the delay is not clearly stated. The game console industry is a big one. In the past, the most well known names in the industry were Sega and Nintendo. However, today, Microsoft and Sony are the leading players in the market.

After Sony Playstation 2 reached the maturity stage its product’s life cycle, it was time for Sony to innovate, and the idea of Sony Playstation 3 was soon being implemented. When Microsoft is a competitor, competing is a major challenge for any company, regardless of the name it carries. When Sony Playstation 2 released, it was about the same time that XBOX was released by Microsoft. Both products were similarly priced, and had similar capabilities, although many argue that XBOX offers a better graphical capability. Similarly, as soon as Sony revealed the idea of its Play Station 3, Microsoft’s XBOX 360 was the talk of town among game consolers.

Both companies are going head to head in the game console market. No company was able to maintain a sustainable competitive advantage over the other, as both companies were operating at the same level, or what Barney calls competitive parity.

Sony is trying to delay the release to ensure that no illegal software would operate on its machine, as much of Sony’s business was lost due to the illegal copying of software and selling at very cheap prices. Game console companies make the most of their profits from the sale of the game titles. These games are being sold illegally for as low as Dhs.10, that is ($2.73) and used on the systems, when an average of $50 is the price of the original software.

Sony and Microsoft are both trying to find a way to get a competitive edge over the other. Sony Playstation 3 is on its way, but. XBOX 360 is benefiting from a temporary competitive advantage. According to the article “The PlayStation 3 delay will likely help Microsoft and Nintendo chip away at Sony's 60 percent global market share, but analysts think Sony will still reign.” The heat of the competition can be inferred from within the article. I believe the real reason behind the delay is to ensure that all competitors release their systems, and then only would Sony release the Playstation 3 to avoid direct duplication and make use of a temporary competitive advantage. Although, “Microsoft spokeswoman Molly O'Donnell said Sony's delay won't change Microsoft's strategy”, I think it would.

Furthermore, the question of rareness is highlighted in this line from the article which states, “The significance of the Blu-ray DVD technology in the console could not be ignored”. Clearly it is the Blu-ray DVD technology that is considered rare, and the company is trying to use it to differentiate itself from the competition.

Moreover, “Blu-ray is competing against another high-definition disc format called HD DVD, backed primarily by Toshiba Corp. Both formats are making their product debuts this year. “ I find this interesting as Sony is not just trying to set itself apart from others in the game console industry, but competing with the hardware industry concurrently, as they are electronics giants themselves. The article also mentions the following customer benefit, “So with the new PlayStation 3, consumers would get not only the latest game console, but also the latest DVD technology, for a price that Sony has said will not exceed $500."

The article also mentions the release of “Revolution” by Nintendo. Also, Nintendo Co., maker of Game Boy machines, is set to release its next-generation Revolution console later this year. Nintendo was once the leader of game console systems. However, it started to focus on a smaller market, and started specializing in the production of handheld gaming systems, as Sony and Microsoft took over the market. However, interestingly, it now decides to re-enter the market to compete with Sony and Microsoft with its new console “Revolution”. Nintendo has exclusive trademark titles that are loved by most game consolers such as Super Mario. Nintendo has the history and know how on its side, but just how high are the barriers to entry set by Microsoft and Playstation is one thing to look out for soon!

PetCell- It's Going to SELL!

I am sure that each one of you must have visited at least one of the supermarkets around the city and you might have noticed the billboards in supermarkets. People post their items up for sale, major announcements, events, etc., but what grabs my attention most is not the Ferrari that is up for sale, but the announcement of the lost pet. After reading the article entitled “Fido’s First Cell Phone” on one of my favourite technology news magazine’s websites http://www.wired.com/ , I thought I would share it with you as I found it really interesting!

Business concept innovation at its very best! A cellular phone for dogs, need I say more? According to the article, “The PetCell is a bone-shaped cell phone that will let dog owners talk to their best friend over a two-way speaker.” The cellular phone will be developed by PetsMobility and the price of this device is set to fall between the price range $350 and $400. In other words, the cellular phone your dog might be using can be much more expensive than your own cellular phone!

It might sound a bit more to the humorous side to some of you, but, I think it is a huge market opportunity. I do visit Europe and the States on regular basis, and pets are seen ad treated like any members of the family. Moreover, according to the article, "When dogs disappear, it's the first 15 minutes that are the most important," said San Francisco dog trainer Youngblood Harris. "If your dog runs out of the dog park and you don't see if he went left or right, (PetCell) would make life a lot easier.” I truly believe this innovative and creative idea will be successful. If one decides to buy their dog a PetCell, then the other dog owner will want one for his or her dog too, and before we even notice it, it might end up being a dog fashion accessory!

PetCell has many features (more than the ones listed on the latest Nokia’s brochure), so if you thought you have the best features on the phone you’re using, read this. Besides being rare, The PetCell will support a small wireless camera, and it even has built-in temperature sensors to indicate if the dog is too hot or cold! Oh did I mention? It is waterproof too! In addition to the many features, customer benefits include the ability to talk, track and locate their dogs!

Back to the fact that it is a big market, according to the article “The American Pet Products Manufacturers Association says U.S. pet owners spent an estimated $35.9 billion on their furry friends in 2005.” PetCell might well end up as being among the top selling products around the world very soon. In fact, the article states that it should be out by March. Dog owners; if you are thinking of a perfect gift for your dog’s next birthday, I guess you better limit your options to PetCell, and not think twice!

Let me know what you think! :)

"It's going to be basically what the baby boomers want, the baby boomers will get" and so should it be!

For this week, I have read the article "Seniors At Senior Level" and I found it really interesting, and it also helped me come up with a topic for my Sales Management research!

How to succeed in a particular business? The person who is in the best position to answer such a question is not the new employee with all the technical skills and an MBA degree that the company hired a week ago, but the one who has been there, went through the complexities and identified solutions to problems that the company had to overcome when the business was at its early days. If thought of as a tree, this employee is one of the seeds behind the growth of this tree that exists today. The fruits that the business is enjoying is because of the seeds that were planted earlier afterall.

I personally believe that the person should have the right to make the calls, calls on whether he or she wants to call it quits that is. If the person has the ability to fit into a particular position, then he or she should be retained. The question of why can be answered by the fact that he or she is a valuable asset for the company. I believe seniors have the greatest influence on the success of new employees joining the company. A manager in his 40s might expect a new employee to know how and stick to the rules set as of day one, while a person in his 60s, 70s for example, would be more considerate and consider the fact that the new employee is a fresh graduate and needs some guidance before getting accustomed to the job.

From personal experience, I visit the States every summer, and most of the employees in stores such as Wal Mart,JC Penny for example, are either students, or seniors. The majority however; are seniors. Seniors are in the best position to influence students, and build them to enhance their skills. They can give a company an advantage over competitors, though it might not fit into the definition of a unique historical condition exactly, but it gives them something of value that other firms , especially new ones (new competitors) would find really hard to attract. A 70 year old would not want to join a new company and help build it up, he or she would rather stay in the company she or he worked for throughout his or her lifetime and considers home, regardless of the amount of money he or she is recieving. Most of the seniors working are not doing so because they have to for a living, but because they devoted their life to the business, and apart from the sentiments, its the desire to see the business successful that strives them to continue doing their job.

Moreover, relationships with customers, which can add value for customers and enhance their overall experience is vital. If a loyal customer is used to having a particular person greet him or her once he or she enters a particular store at a particular time, then no other person can replace that person in providing the customer with the experience he or she got used to.

The best example I can think of is Carrefour supermarket in the UAE. Carrefour is the closest store one could compare to Wal Mart or K Mart in the states. On the uniform of the employees, one could read "Can I help you?". If you come to ask any one of them about a particular product, over 80% of the time they would not know anything about the product and refer you to another person, you can call yourself lucky if the first person you are referred to does actually know something about the product, besides the price that is! If I am to ask any employee at Wal Mart in the States about a product, and if he or she is a senior, they would tell me more about the product than what is in the instruction manual, share their personal experience, and even recommend a better product!

According to the article, "Older workers will want to work and remain active, and businesses will need seniors to fill what Erickson said will be a looming shortage in skills and talent in the American workplace." If they can remain active, and fill up positions then I trully believe they should do so. However, the positions should be ones they have enough accumulated knowledge and experience about. Since they have been there, and know it all, then they should stay there for as long as they could.

Unfortunately, in the Arab world, this is far beyond it being the case. It is rare that you see seniors walking outside to see them taking up jobs at that age. I think businesses around the world should realize that those senior resources they hold should be sustained and handled with care, as they can be among the top reasons for the positive economic performance of their business. Instead of sending them letters announcing their last day at work, I believe they should send them letters of gratitude to keep them motivated and going!

Boycott or perhaps not?!

I have read the article entitled " Effect of Danish Boycott Patchy". The controversy over the cartoons published in the Danish and Norwegian media has affected the muslims and a number of businesses around the world. The boycotting of Danish products has been a buzz phrase in the media, among people, and all around the muslim world. Why? The cartoons were of an icon, a symbol if Islam. Most religions believe in one God, but the Prophet (PBUH) is an icon and a role model for each and every Muslim in this word. Boycotting has caused a number of Businesses great losses. For example, LURPAK butter that was one of the only; if not only name of butter that would pop in the consumer's evoked set when deciding to purchase butter has been removed from the shelves of most supermarkets in the country. Why?Customers! Customers decided to boycott Danish products and the word of mouth spread all around the country. If a supermarket carried those products, then it will be at the cost of a large number of customers. Thoughts such as, if a certain supermarket carries Danish products, let's not purchase from them might come up. This can affect overall sales. According to Hamel, customer interface is how the producers are reaching their customers. Some decide to attract their customers by showing them that they stand on their side and support their opinion,thus removing all danish products, while other supermarkets might just look for the best way to increase their profits. Supermarkets that chose to go with the first choice and stand by the boycotting are just worried about the reaction of people if they would carry those products. Boycotting comes at a cost. There will be inventory in store for supermarkets, how would they get them sold if they support the boycotting? I think that relationship dynamics has a role to play here, as supermarkets would chose to follow their customers, as I had discussed. Furthermore, according to the article "The manager of a flagship supermarket in Jeddah said imported Danish dairy products accounted for about five percent of their sales in product volume but more in terms of income." If the products are considered a strategic resource, a core competencie or a strategic asset and the firm is competing on the basis of it, then probably boycotting the products would not be the best option here for them. There was a time when people decided to boycott American products in the country. McDonalds, KFC, Microsoft, were all among the long list, but that couldn't last for more than a few weeks! From a Business prospective, having an open mind and looking for a resolution between the Danes and the Muslims would be the ideal solution!

The Battle of Google & the Chinese Government

I have read both articles The Real Cost of Google’s Sellout to China and Google is Destined to Fail in China. The Chinese government is creating entry barriers for competitors for a number of reasons. According to porter, "governments can limit entry into industries with controls and limit access". The Chinese government is controlling the access by slowing down Google’s search speeds, and making it less attractive to internet users there, but why? An interesting fact to keep in mind here is that “China is already the second largest internet market in the world”, and it is all set to overtake from the United States to become the largest. If China would allow Google to enter the market freely (with no entry barriers), then Google, would easily dominate the Chinese internet market. This would affect Chinese companies such as Sohu, Sina, and Netease, and would distance them from reaching their goal of becoming the leaders. To them, Google is a “threat” to their business, and the Chinese government used a legitimate reason for the barriers it had enforced, it chose to attack Google’s search result contents. However, now that Google has chosen to censor the search results, it would be interesting to see how the Chinese government would react to prevent Google from dominating the market. Furthermore, Chinese internet companies collaborate to serve the Chinese market. They all provide the same services, and offer similar prices and if Google enters the market, I do not think it would want to collaborate with Chinese companies. Regardless of whether it would finally overcome the barriers to entry set by the Chinese government, Google’s global success will keep it one of the biggest names in the Internet industry.

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