What happened, Microsoft?

Microsoft has been a world-leading company (supposedly bent on world domination). However, this proves even the big can struggle with Microsoft's planned layoff of 5,000 employees, its largest ever.

What has Microsoft been doing?

Developing the most secure operating system available.
Reaching out to developers more than in the past.
Developing better products all around.
Making Windows more compatible with everything.

And yet, the "Vista effect" is still in play. The outcry against Vista as being a clunky, difficult system has come from all sides, and the "Mojave Experiment" (helping people see how easy Vista is to use) hasn't quite sold the public on the benefits.

Microsoft needs to do a better job at winning people back who ran so blindly to Mac. Given Apple's approach to marketing, no wonder Microsoft hasn't quite proven their point.

Microsoft:

The Mojave Experiment

Apple:

Mac vs. PC

Entering the US grocery market

Tesco, a major British retailer, has decided to open a chain of stores called "Fresh & Easy" here in the US. They have years of experience and large amounts of capital to invest, but unfortunately, that's not all that you need for success in an established market.

The amount of advertising they have done in putting their stores in place has been minimal and the knowledge of the store in their initial markets (California, Nevada, and Arizona) is also very low. They are similar to Trader Joe's, a specialty market popular especially in these areas, but with larger store sizes and a wider selection of goods.

However, this new entrant has not gone unnoticed, and Wal-Mart is ready to step in with a response. Wal-Mart announced its plans for a very similar type of store in these areas known as "Marketside." With Wal-Mart's phenomenally more developed distribution model and name recognition (at least in the US), who knows how long Tesco will be able to keep funding this unsteady venture before they decide to give up. Or, if they have more plans up their sleeves, what new, unique features will they be able to offer?


Times Online article
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article2799403.ece

Forbes article
http://www.forbes.com/2008/01/14/tesco-walmart-arizona-markets-equity-cx_vr_0114markets19.html

Strategy... and Amazon.com

Amazon.com has quite possibly one of the best strategies for sales of merchandise!

There are so many different techniques they employ -

Mostly automated processing.

Warehouse based distribution models.

Outsourcing delivery costs.

Giving marketing space to small distributors to promote their goods.

Free shipping on certain orders.

Price discounts (due to lack of brick and mortar stores and associated inventory and employees - in fact, the existence of Amazon helped coin this phrase)

Reduced packaging.

In short, Amazon did what all the analysts on Wall Street couldn't predict: a large, highly efficient company based on the web that has far surpassed all other e-tailers. Nice job, Amazon.

Strategy... and Apple

On to a successful company:

Apple.

They are quite possibly the biggest "image" company I can think of.

Their hardware is inferior for the price.

Their software is not necessarily easier to use - in fact, in my opinion, the more powerful the software, the harder it is to use on a Mac versus the PC version.

What makes them so popular?

Exclusivity.

iTunes - works best with iPods.

Mac OS X - only runs on certain hardware configurations (mostly those provided by Apple)

Authorized resellers.

iPhone - only on AT&T with a high-price data plan at a high price.

Way to go, Apple. Now if only other firms could create this exclusivity and image perception!

Strategy... and Circuit City

Circuit City used to be one of my favorite stores - I used to find the best prices and best selection. Even the employees used to seem more helpful and not so pushy.

However, with the onslaught of much cheaper online retailers like Newegg and Amazon and a switch in the customer relations department, Circuit City sent itself to its grave.

In the last few years, it seemed like the employees were driven entirely by commission, especially when selling inferior products at high prices and always pushing extended warranties. Not only that, but apparently their most valuable employees, the most experienced employees weren't valuable enough to keep:

http://www.usatoday.com/printedition/news/20070329/1a_bottomstrip29_dom.art.htm

Best Buy's employees don't earn a commission and aren't as pushy. Too bad Circuit City didn't have a longer chance to learn from this fatal mistake.

Strategy... and Wamu

Washington Mutual had a great strategy for so many years:  Treat the customer nice, keep fees low, increase business... by kindness.  For so many years, that also meant restricting loans in order to keep the bank solvent.  However, an ad in the past few years epitomizes the downfall of one of America's fastest growing banks.  Sometimes, in the path to becoming profitable, companies go after customers that don't suit their long-term goals.  And sometimes that can be fatal.