How well does our system work? You can use the numerical index to check our blogs from the last big recession.
Much of the world suffered a severe recession from 2008 to 2011. During that time, we wrote more than 250 blogs using publicly available information and our Strategystreet system to project what would happen in various companies and industries who were living in those hostile environments. In 2022, we began to update each of these blogs to see what later took place and to check the quality of our conclusions. To date, we have completed the first 175 of our original blogs. You can use these updated blogs to see how well the Strategystreet system works.
For years, Chico’s FAS grew rapidly by selling attractively priced, colorful clothes, to baby-boomer women. But the company began to stumble in 2006. Its growth rate slowed and its core customers migrated to other companies’ offerings. The company’s costs rose faster than its revenues, squeezing margins. The company stumbled by chasing after customers of other competitors, especially younger women. From the standpoint of their original core customers, baby-boomer women, Chico’s failed to deliver the products that they had come to expect from Chico’s. (See the Perspective, “Reliability: The Hard Road to Sustainable Advantage” on StrategyStreet.com.)…
Read MoreNo matter the rate of growth in a market, the key growth measures to watch are those of the various Price Points. Here is an example. The U.K., as the U.S., is in a recession. As a result of tougher times, customers are trading down their purchases in retail stores, including grocery stores. A beneficiary of this trade-down in the U.K. is the supermarket chain, J. Sainsbury PLC. Sainsbury is the U.K.’s third largest food retailer. It picked up customers from some of its more upscale grocery competitors. Sainsbury has three lines, or Price Points,…
Read MoreCharles Schwab Corporation is introducing the Schwab Bank Invest First Visa Signature credit card. This no-annual-fee card offers an unusual set of benefits. First, it returns a 2% cash rebate on all purchases, one of the highest rebate promises around, and it has no pre-set spending limits to start the rebate. Most other cards impose minimum spending hurdles before the rebates kick in. Next, there are no category (e.g. type of retail) restrictions on the spending with the card in order to earn the 2%. This benefit contrasts with most rebate card programs that require…
Read MoreBlockbuster is under pressure, and has been for a number of years. It is closing hundreds of stores. Still, it continues to operate over 3,900 stores in the U.S. and nearly 2,000 outside the U.S. The reason for its struggles is simple: Netflix. Netflix beat Blockbuster by offering a better business model to the American consumer. Eventually, Blockbuster copied the Netflix business model. But by then, Netflix was a powerful competitor. Blockbuster has been unable to unseat Netflix from its position of movie rental leadership. These two companies are about to square off again. Blockbuster…
Read MoreOver the years, we have studied several thousand customer buying decisions. We concluded from these studies that customers buy in a hierarchy of needs: Function, Reliability, Convenience and Price. Functions describe how a customer uses a product. Reliability defines how the company fulfills the promises made or implied to the customer. Convenience indicates the ease with which the customer can find, purchase and install the product. Reliability is critical to a company’s success in any market, save the very fast growing, newly-developing markets. (See “Reliability: The Hard Road to Sustainable Advantage” in the Perspectives on…
Read MoreI was struck by a recent article about statins. A recent study has found that these cholesterol lowering drugs reduce the heart risk in even healthy patients. That fact was not what struck me, though. What jumped out at me was the size of the market share for generic statins. The generics in the statin market make up 49% of total prescriptions. The well-known Lipitor is the leading branded statin, at 27%, followed by Crestor at 9%, Vytorin at 7%, and Zetia at 6%. But the generics dominate all of those branded drugs. (See “Low-end…
Read MoreNike, ever the innovator, has found a new way to build brand loyalty. It has created a web site, NikePlus.com, that connects runners around the world. This web site tracks a runner’s data and allows a runner to join with other runners all over the world to improve their times. To make this online group work easily, the company developed a $29 Sport Kit sensor that, when synched with an iPod or Nano, calculates the runner’s speed, mileage and calories burned and provides a method to upload that data to NikePlus.com. The company has sold…
Read MoreConsumer Reports recently had a load of bad news for the domestic auto manufacturers. The big car retailers had even worse news. Consumer Reports issued a report showing that the three domestic automobile manufacturers, GM, Ford and Chrysler, trailed Asian manufacturers in quality. The Chrysler cars were rated very low on the quality scale. The GM cars were hit and miss: some of good quality, others of poor quality. Ford generally rates as the best of the domestic automobile manufacturers in automobile quality. The knock on Ford from Consumer Reports is that its car styling…
Read MoreThe cell phone carriers are about to introduce a product innovation, called a femtocell, to improve cell phone reception within a home. These femtocells are about the size of a toaster. The wireless carriers will install these mini cell phone towers. The tiny tower will connect with cell phones inside the consumer’s home through a broadband internet connection to the telephone network. The wireless carriers hope that this innovation will increase the reliability of the wireless system to the extent that the consumer will be able to get rid of the $50 a month average…
Read MoreKohl’s Corporation is opening forty-six stores soon as part of a plan to gain market share as the busy holiday season starts in the U.S. Today, Kohl’s has something less than 1,000 stores open in the U.S. The company expects sales at stores open for a year or more to be down 2 to 4% during this year’s holiday season compared to last, so they are opening stores to make up for some of the sales fall-off. But that’s not all they are doing. The company is a middle market chain competing with the likes…
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