Make Your Best Customers Even Better

Make Your Best Customers Even Better

by Eddie Yoon, Steve Carlotti, and Dennis Moore

Just over a year ago, managers at Kraft believed that their Velveeta brand had only moderate growth prospects. With the consumer migration toward natural and organic products, sales of Velveeta—a processed, unrefrigerated “cheese food”—had languished. The customers who did buy it typically used it once or twice a year, usually to make a party dip. But as we began working with Kraft and analyzing supermarket scanner and consumer panel data, we found a hard-core group of Velveeta fans. They constituted 10% of buyers but accounted for 30% to 40% of revenue and more than 50% of profits. In focus groups, these buyers—whom we dubbed superconsumers—said that they think of Velveeta as superior cheese. They love the way it melts smoothly and easily, and they have myriad uses for it, ones that range far beyond dips (one person even claimed to use a little when making fudge). After we finished questioning the superconsumers, they traded recipes, e-mails, and phone numbers with one another—building friendships around their shared passion for Velveeta. Read more of this post

Manage Your Work, Manage Your Life

Manage Your Work, Manage Your Life

by Boris Groysberg and Robin Abrahams

Work/life balance is at best an elusive ideal and at worst a complete myth, today’s senior executives will tell you. But by making deliberate choices about which opportunities they’ll pursue and which they’ll decline, rather than simply reacting to emergencies, leaders can and do engage meaningfully with work, family, and community. They’ve discovered through hard experience that prospering in the senior ranks is a matter of carefully combining work and home so as not to lose themselves, their loved ones, or their foothold on success. Those who do this most effectively involve their families in work decisions and activities. They also vigilantly manage their own human capital, endeavoring to give both work and home their due—over a period of years, not weeks or days. Read more of this post

Choosing the Right Customer

Choosing the Right Customer

by Robert Simons

image001-1

All companies claim that their strategies are customer driven. But the term “customer” is among the most elastic in management theory. A working definition might be that your customers are the people or entities that buy your products and services and supply your revenue. That includes any number of actors in a company’s value chain: consumers, whole­salers, retailers, purchasing departments, and so forth. Some companies go as far as to label internal units as customers: Manufacturing is a customer of R&D, for instance, and both are customers of HR. Read more of this post

Kering’s Chairman & CEO François-Henri Pinault on Finding the Elusive Formula for Growing Acquired Brands

Kering’s CEO on Finding the Elusive Formula for Growing Acquired Brands

by François-Henri Pinault

image001-5

The Idea: When Pinault’s team buys a new luxury brand, it drives organic growth by helping the brand with product development, logistics, and retail stores and by pairing creative designers with strong business executives. Read more of this post

Why China Can’t Innovate

Why China Can’t Innovate

by Regina M. Abrami, William C. Kirby, and F. Warren McFarlan

The Chinese invented gunpowder, the compass, the waterwheel, paper money, long-distance banking, the civil service, and merit promotion. Until the early 19th century, China’s economy was more open and market driven than the economies of Europe. Today, though, many believe that the West is home to creative business thinkers and innovators, and that China is largely a land of rule-bound rote learners—a place where R&D is diligently pursued but breakthroughs are rare. Read more of this post

Fear of Being Different Stifles Talent

Fear of Being Different Stifles Talent

by Kenji Yoshino and Christie Smith

Diversity is a near-universal value in corporate America, but the upper tiers of management remain stubbornly homogeneous. Consider Fortune 500 CEOs: Only 23 are female, just six are black, and none are openly gay. Why so few gains at the top? We believe that one factor is a phenomenon sociologists call “covering,” whereby people downplay their differences from the mainstream. Someone with a disability might forgo her cane at work, say, while a gay man might avoid using “he” or “him” if asked about his partner. Such behavior is driven not just by self-censorship or internalized biases but also by pressure from managers. It decreases employees’ confidence and engagement and, we think, holds women and minorities back. Read more of this post

Lead from the Heart; Your job as a leader is to tap into the power of that higher purpose-and you can’t do it by retreating to the analytical. If you want to lead, have the courage to do it from the heart

Lead from the Heart

by Gail McGovern

When an executive comes from the private sector to a nonprofit, the usual understanding is that he or she is there to inject some business discipline. When I arrived at the American Red Cross, there were certainly problems to be tackled. The books were closed on FY08 just six days after I started, with a $209 million operating deficit. The organization had been running deficits for some years, borrowing just to provide working capital, and we were more than $600 million in debt. Frankly, we were not very good at fundraising. Yes, we had a terrific brand—the second best-known in the world—but even that needed refreshing. Read more of this post

The benefits of shale oil are bigger than many Americans realise. Policy has yet to catch up

Saudi America: The benefits of shale oil are bigger than many Americans realise. Policy has yet to catch up

Feb 15th 2014 | MIDLAND, TEXAS | From the print edition

DENNIS LITHGOW is an oil man, but sees himself as a manufacturer. His factory is a vast expanse of brushland in west Texas. His assembly line is hundreds of brightly painted oil pumps spaced out like a city grid, interspersed with identical clusters of tanks for storage and separation. Through the windscreen of his truck he points out two massive drilling rigs on the horizon and a third about to be erected. Less than 90 days after they punch through the earth, oil will start to flow. Read more of this post

The English empire: A growing number of firms worldwide are adopting English as their official language

The English empire: A growing number of firms worldwide are adopting English as their official language

Feb 15th 2014 | From the print edition

image001-3

YANG YUANQING, Lenovo’s boss, hardly spoke a word of English until he was about 40: he grew up in rural poverty and read engineering at university. But when Lenovo bought IBM’s personal-computer division in 2005 he decided to immerse himself in English: he moved his family to North Carolina, hired a language tutor and—the ultimate sacrifice—spent hours watching cable-TV news. This week he was in São Paulo, Brazil, for a board meeting and an earnings call: he conducted all his business in English except for a briefing for the Chinese press. Read more of this post

E-commerce in China: No profits, we promise; JD, an e-commerce firm billed as China’s Amazon, prepares an IPO

E-commerce in China: No profits, we promise; JD, an e-commerce firm billed as China’s Amazon, prepares an IPO

Feb 15th 2014 | SHANGHAI | From the print edition

IT IS a rare corporate boss who vows to make no profit for years. But that is precisely the strategy embraced by Richard Liu, the chief executive of JD. A year and a half ago, he declared that his Chinese e-commerce firm would earn no gross profits on electronic goods, which make up most of its sales, for three years. He was even reported to have threatened to sack any salesman making a margin. Read more of this post

The circus business: Sunstroke; Cirque du Soleil may be struggling, but the cluster around it is thriving

The circus business: Sunstroke; Cirque du Soleil may be struggling, but the cluster around it is thriving

Feb 15th 2014 | QUEBEC CITY | From the print edition

IN THE deconsecrated church of Saint-Esprit, jugglers toss fluorescent orange clubs in front of the former altar, trapeze artists soar under the gaze of stone saints and wobbly unicyclists use two lines of repurposed pews as handrails. Declared surplus to requirements after Quebeckers deserted Catholicism in droves, the church is now the École de Cirque de Québec, through which 20,000 aspiring entertainers pass each year. The school’s director, Yves Neveu, says only half-jokingly, “Someone said the archbishop should be jealous because I’m filling my church.” Nearby Montreal boasts an even bigger school for circus performers. Read more of this post

Carmaking in Australia: Toyota’s move to the off-ramp signals the demise of a prized industry

Carmaking in Australia: Toyota’s move to the off-ramp signals the demise of a prized industry

Feb 15th 2014 | SYDNEY | From the print edition

WHEN Australia’s first locally made car, a Holden FX, rolled off the production line in 1948 it was greeted with an excitement that befitted a symbol of a youthful nation taking its place among advanced economies. Such was the enthusiasm for an indigenous car that around 18,000 punters paid deposits to buy one without even seeing it. Read more of this post

Manufacturing in Indonesia: On a wing and a prayer; A state aerospace firm risks forgetting the lessons of the Asian crisis

Manufacturing in Indonesia: On a wing and a prayer; A state aerospace firm risks forgetting the lessons of the Asian crisis

Feb 15th 2014 | BANDUNG | From the print edition

THEY do not look much, but they are largely responsible for saving Indonesia’s aviation industry. The ribs that fit into a section of the wings on the Airbus A380, the world’s largest passenger aircraft, are made in a corner of the sprawling factory of PT Dirgantara Indonesia (PTDI), in the Javanese city of Bandung. Along with another part, they are flown to a second factory, in Britain, where they are incorporated into the A380’s wings, which are then sent to France to be attached to the planes. Read more of this post

Fever rising: There are reasons to hope that the latest biotech boom will not be followed by another bust

Fever rising: There are reasons to hope that the latest biotech boom will not be followed by another bust

Feb 15th 2014 | From the print edition

AS INVESTORS and executives crammed into a New York ballroom for a conference held this week by the Biotechnology Industry Organisation, the mood was jittery. The previous week eight biotech firms had launched initial public offerings in America, together raising more than $500m. In a discussion panel on whether the industry’s latest boom will last, a prominent investor, Oleg Nodelman, joked that he still had suitcases of cash for any firm that wanted it. Read more of this post

Corporate governance: Anything you can do, Icahn do better; The pressure on companies from activist shareholders continues to grow

Corporate governance: Anything you can do, Icahn do better; The pressure on companies from activist shareholders continues to grow

Feb 15th 2014 | NEW YORK | From the print edition

TIM COOK’S nightmare is over, but John Donahoe’s has just begun. On February 10th Carl Icahn, the godfather of activist shareholders, ended his campaign to get Mr Cook, the boss of Apple, to return some of its $160 billion cash mountain to shareholders through share buy-backs. Mr Icahn declared victory, although Apple is not handing back as much of its cash as he had wanted. His next target is eBay, which he is pressuring to spin off PayPal, its online-payments business. Mr Donahoe, eBay’s boss, has told Mr Icahn to get lost, but surely knows he cannot brush off the pugilistic investor so easily. Read more of this post

Malaysia’s Sarawak: Last of the rajahs; A powerful chief minister bows out—or does he?

Malaysia’s Sarawak: Last of the rajahs; A powerful chief minister bows out—or does he?

Feb 15th 2014 | KUALA LUMPUR | From the print edition

FEW of Asia’s elected leaders have enjoyed the power of Abdul Taib Mahmud, the chief minister of Sarawak. For 33 years he lorded it over this Malaysian state on the island of Borneo, once densely forested and still rich in oil. Mr Taib was an appropriate successor to generations of the British Brooke family, who ran the territory as their own monarchy for a century from 1841. They were known as the White Rajahs. Their 77-year-old, white-haired modern equivalent, Mr Taib, will officially retire on February 28th, passing the job to a hand-picked successor, Adenan Saten. Mr Taib, though, will probably get another comfortable job himself, retaining much influence. Read more of this post

Privatisation: The $9 trillion sale; Governments should launch a new wave of privatisations, this time centred on property

Privatisation: The $9 trillion sale; Governments should launch a new wave of privatisations, this time centred on property

Jan 11th 2014 | From the print edition

IMAGINE you were heavily in debt, owned a large portfolio of equities and under-used property and were having trouble cutting your spending—much like most Western governments. Wouldn’t you think of offloading some of your assets?

Politicians push privatisation at different times for different reasons. In Britain in the 1980s, Margaret Thatcher used it to curb the power of the unions. Eastern European countries employed it later to dismantle command economies. Today, with public indebtedness at its highest peacetime level in advanced economies, the main rationale is to raise cash. Read more of this post

South Korea’s housing market: Landlords are having to ditch a century-old rental system

South Korea’s housing market: Landlords are having to ditch a century-old rental system

Feb 15th 2014 | SEOUL | From the print edition

MOST South Korean urbanites would leap at the chance to part with $150,000 to rent a smallish flat for three years in Seoul, the capital. These days, however, most Korean landlords would spurn such a measly deposit. Read more of this post

Western Union: Finance in purgatory; The wonderful, awful business of international transfers

Western Union: Finance in purgatory; The wonderful, awful business of international transfers

Feb 15th 2014 | NEW YORK | From the print edition

ON FEBRUARY 11th Western Union’s executives glossed over a decline in earnings and revenues in an upbeat call. But a day earlier five law firms had cast light on some of its troubles when they petitioned a court to represent its shareholders in lawsuits related to dealings with financial regulators. Read more of this post

The Loch Ness consensus: Countries make macroeconomic policy by themselves for themselves. Should they?

The Loch Ness consensus: Countries make macroeconomic policy by themselves for themselves. Should they?

Feb 15th 2014 | From the print edition

image001-16

“INTERNATIONAL policy co-ordination is like the Loch Ness monster,” Olivier Blanchard and Jonathan Ostry of the IMF wrote recently. It is “much discussed but rarely seen”. The oddity was sighted in New York in 1985, when the big economies conspired to weaken the dollar. It resurfaced two years later in Paris, when they decided to stop the greenback’s fall. Some also claim to have witnessed it in Washington in 2008, when the G20 group of big economies agreed to fight the financial crisis with simultaneous fiscal stimulus. Read more of this post

The growth paradox: Past economic growth does not predict future stockmarket returns

The growth paradox: Past economic growth does not predict future stockmarket returns

Feb 15th 2014 | From the print edition

EMERGING stockmarkets go in and out of fashion. They were battered during the Asian and Russian crises of the late 1990s, but then recovered to offer double-digit annual returns in the first decade of the 21st century. Since 2010, however, they have reverted to underperforming their developed-country rivals. Read more of this post

The petrostate of America: The energy boom is good for America and the world. It would be nice if Barack Obama helped a bit

The petrostate of America: The energy boom is good for America and the world. It would be nice if Barack Obama helped a bit

Feb 15th 2014 | From the print edition

image001-15

“RISE early, work hard, strike oil.” The late oil baron J. Paul Getty’s formula for success is working rather well for America, which may already have surpassed Russia as the world’s largest producer of oil and gas (see article). By 2020 it should have overtaken Saudi Arabia as the largest pumper of oil, the more valuable fuel. By then the “fracking” revolution—a clever way of extracting oil and gas from shale deposits—should have added 2-4% to American GDP and created twice as many jobs than carmaking provides today. Read more of this post

The parable of Argentina: There are lessons for many governments from one country’s 100 years of decline

The parable of Argentina: There are lessons for many governments from one country’s 100 years of decline

Feb 15th 2014 | From the print edition

A CENTURY ago, when Harrods decided to set up its first overseas emporium, it chose Buenos Aires. In 1914 Argentina stood out as the country of the future. Its economy had grown faster than America’s over the previous four decades. Its GDP per head was higher than Germany’s, France’s or Italy’s. It boasted wonderfully fertile agricultural land, a sunny climate, a new democracy (universal male suffrage was introduced in 1912), an educated population and the world’s most erotic dance. Immigrants tangoed in from everywhere. For the young and ambitious, the choice between Argentina and California was a hard one. Read more of this post

The Race Underground: Boston, New York, and the Incredible Rivalry that Built America’s First Subway

America’s first subways: Boston loves New York; What America learned about building subways

Feb 15th 2014 | From the print edition

The Race Underground: Boston, New York, and the Incredible Rivalry that Built America’s First Subway. By Doug Most. St Martin’s Press; 404 pages; $27.99. Buy from Amazon.comAmazon.co.uk

IF THEY were not such rivals, New York and Boston could be twinned. Their strengths make a good fit: New York sees itself as the cultural and financial capital of America; Boston has claims to be its academic and intellectual centre. So the two cities make an impressive team when they channel their aggression, as they did in their earnest yet friendly race to build America’s first subway around the turn of the 20th century. Read more of this post

The time is ripe for a good book about Hillary Clinton’s view of the world

The time is ripe for a good book about Hillary Clinton’s view of the world

Feb 15th 2014 | From the print edition

HRC: State Secrets and the Rebirth of Hillary Clinton. By Jonathan Allen and Amie Parnes. Crown; 440 pages, $26. Hutchinson; £20. Buy from Amazon.com,Amazon.co.uk

AS SECRETARY OF STATE until 2013, Hillary Clinton was chief foreign envoy for a president who came into office burdened with impossible expectations. Barack Obama’s to-do list included slowing global warming, ending the Iraq war, setting Afghanistan on its feet, defanging al-Qaeda, mending ties with Muslims, devoting more military and economic attention to Asia, preventing Iran from building the bomb and—in his own words—restoring America’s image as “the last, best hope on Earth”. He duly fell short. Sometimes, the fault lay elsewhere: with foreign leaders, domestic opponents and events immune even to Mr Obama’s charms. Read more of this post

The science of love at first sight

The science of love at first sight

Feb 12th 2014, 23:50 by N.L. | CHICAGO

BIOLOGISTS believe that love is fundamentally a biological rather than a cultural construct. That is because the capacity for love is found in all human cultures and similar behaviour is found in some other animals, such as prairie voles. In humans the purpose of all the cravings, craziness and desire is to focus attention on the raising of offspring. Children demand an unusual amount of nurturing, and two parents are better than one. Love is a signal that both partners are committed, and makes it more likely that this commitment will continue as long as is necessary for children to reach independence. But what does science have to say about the notion of love at first sight? Read more of this post

Unemployment in America: Closing the gap; America’s labour market has suffered permanent harm

Unemployment in America: Closing the gap; America’s labour market has suffered permanent harm

Feb 15th 2014 | From the print edition

IT TOOK barely a month for the bubble of optimism that formed over the American economy at the start of the year to deflate. Job growth slowed sharply in December, and stayed weak in January, suggesting more than bad weather was to blame. Read more of this post

Why America Has Such A High Rate Of Payment-Card Fraud

Why America Has Such A High Rate Of Payment-Card Fraud

THE ECONOMIST RETAIL  FEB. 15, 2014, 3:25 AM

AMERICA leads the world in many categories: shale-gas production, defence spending, incarceration rates and, alas, payment-card fraud. In December Target, an American retailer, said that hackers had breached its network and stolen payment-card details of about 40m of its customers. Read more of this post

Content strategy is king in social media

Content strategy is king in social media

David Dubois, INSEAD | Business | Sat, February 15 2014, 2:54 PM

Coffee lovers often have a chosen venue because it’s a great place to hang out. But without the rich aromas and great tasting coffee that they serve, would they still go there if there was nothing to drink?
For the most successful companies operating in the realms of social media, they’ve got the fresh content, they’ve brought the crowd and as long as they keep serving up this gourmet content, they’ve got a winning virtual hangout. Read more of this post

Three things your c-suite can learn from family businesses

Three things your c-suite can learn from family businesses 

Dominique Turpin, IMD | Business | Sat, February 15 2014, 2:59 PM

Happy families are all alike, Leo Tolstoy wrote at the start of his novel Anna Karenina.
His observation applies to good family-controlled businesses too. They come in all shapes and sizes—from small enterprises to global companies such as Maersk, Cargill and Samsung—but the best are very similar in some ways. Read more of this post

<span>%d</span> bloggers like this: