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.
This entry is the first in our series of four entries on the HP/EDS deal. The Setting Hewlett Packard has proposed a take-over of EDS, in order to improve its services, revenues and profits. EDS is #2 to IBM in the computer services industry. Hewlett Packard is #5. The combined company, at $38 billion in revenues, would have only a 5% share of the market. IBM has $54 billion in services revenues and 7% market share. The reaction in the stock market has been mixed. Hewlett Packard stockholders don’t like it. Its share price fell.…
Read MoreMicrosoft has problems getting its stock price up where it thinks it belongs. Some analysts believe that the reason, in part, is that Google has introduced free substitutes for the Microsoft Office products. These substitutes are called Google Apps and include spreadsheet and word processing applications. The fear is that Google’s advertising-supported free applications will force Microsoft to reduce prices on Office products where it enjoys a 70% gross margin. These fears are premature and probably overblown. Google Apps is a long way from offering a true challenge to the Microsoft Office programs. They do…
Read MoreEven high-end brands can offer lower-end products. We call the high-end companies and products Performance Leaders. These companies and products offer better performance than the Standard Leader products in an industry for prices starting at least 10% over the Standard Leader product prices. Price Leader competitors are those companies who offer less performance than the Standard Leaders products for prices generally starting about 25% below those of the Standard Leader. Even Performance Leader brands can offer Price Leader type of products. These Price Leader products are high-end products with significant discounts to the normal high-end…
Read MoreLow-end competitors don’t think like industry Standard Leaders. As a result, they often blow big holes in the leader’s plans. For twenty-five years, from the early 70s until the late 90s, the color television manufacturing market was one of the worst places on Earth to compete. Those companies who did survive, and there weren’t many, became hard-bitten competitors with no illusions about the inevitability of success of even the largest companies. The two largest U.S. competitors, RCA and Zenith, are now nearly-forgotten names. GE was another titan victim of the inexorable pressure of intense price-based…
Read MoreOne of your competitors may be a low-end player today. If that competitor stays at the low end, the likelihood is that its share of the market will not exceed 15%, even if it is quite successful. However, that very success may breed a significant challenge to industry leaders in the future. If the low-end competitor is earning a good return on investment, it may enter the market for the industry’s higher-end products in order to enhance its own profits and future. The pharmaceutical industry offers a current example of the phenomenon of a low-end…
Read MoreGarmin is having big trouble these days. As one of the leaders in the personal-navigational device business, Garmin is besieged by much larger competitors from an adjacent industry. In particular, the cell phone hand set makers are doing the same thing to GPS functions that they did to the PDA market a few years ago. They are turning GPS into one of the functions on smart phones. In 2007, 18% of mobile phones already had the GPS function embedded in them. That percentage may double within a couple of years. But Garmin has come with…
Read MoreGoogle has entered Microsoft’s most treasured domain, the office suite. Google offers its Apps for free. Using these Apps, a consumer may prepare basic reports and spreadsheets. Google claims two advantages over Microsoft with its Apps product: it operates on the internet, and it is free or very inexpensive in its premium version. So, what might be the outlook be for both Google and Microsoft? Microsoft has to worry, but not too much at this stage of the game. Over the last few years, we have analyzed several hundred low-end competitors entering a market against…
Read MoreDelta recently announced that it was trimming its domestic capacity and shifting that capacity to international flights. It will cut its domestic capacity by about 5%, which will bring its capacity in August of 2008 to a level 10% below that of one year earlier. United Airlines did something similar earlier in the year. In the short term, this will help these two legacy airlines’ margins because international passengers pay more per available seat mile than do domestic passengers. In the long term, the benefits are considerably less clear because of the encouragement these moves…
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