July 11, 2011
I’ve recently decide to experiment with facial hair and have come to the conclusion that a man under 40 should definitely have hair on his chin to accompany his stache. Imagine any number of guys you know under 40 with just a mustache. Odds are you are imagining a group of guys that all look like perverts.
We all know guys with mustaches, but odds are they are least 50. So, when do you stop looking like Kip and start looking like Tom Selleck?
September 22, 2010
Progressive faces a serious threat from competitor invasion, especially in light of the current industry trends. Progressive differentiated themselves from competitors in several ways including the use of sophisticated pricing techniques when calculating premium prices; a unique approach to accident response; use of technology; and focusing on the non-standard segment of auto insurance. Recently, Progressive’s major competitors began to encroach Progressive in these areas, thereby eating away at the differentiation that Progressive once had. Still, in the face of major pricing pressure and a diminished sense of differentiation, CEO Glenn Renwick believed that holding prices steady was the best strategy as he believed the trend of declining accident rates would not continue and he did not wish to risk exposing the company’s margin to risk.
Renwick also did not believe that cutting prices would increase Progressive’s market share. This belief was substantiated by the fact that progressive offered lower rates to a sizable number potential customers, but it never translated into market share. That being said, I don’t believe price to be a major entry point for competition to steal market share from progressive at this point. One of the features that Progressive offers to potential customers is called Express Quote, where a potential customer is given rate quotes from a few of Progressive’s competitors to compare with Progressive’s quote. At this point, since rate information is so readily available, and since most of Progressives major competitors have adopted a similar pricing strategy, it is safe to assume any major shift in market share due to price has already been experienced.
A hallmark of Progressive’s business model has been their concierge service and Immediate Response. Progressive customers have the ability to contact a Progressive adjuster 24 hours a day, seven days a week to file a claim. Progressive adjusters will drive to the scene and coordinate everything right from their vehicle. Policy holders can even walk away from an accident with a settlement check. Should a policy holder need to have repairs done, Progressive will coordinate the repairs. This includes a rental vehicle and any logistics with the body shop. Recently, competitors State Farm and Allstate (number 1 and 2) have either purchased repair shops or partnered with repair shops to offer similar levels of service to policy holders.
Immediate Response is an area that competitors have not attempted to compete directly with Progressive, so there seems to be no risk of losing market share to competitors because of a similar service. Progressive has some competition in the concierge service offering, but it is questionable whether or not an insurance provider should be able to dictate where a car is repaired. Some states even have laws to prevent such practices. This is also an area that does not play a big part in market share determination.
Probably Progressive’s greatest strength is its commitment to technology. Progressive’s web site is consistently ranked as the best auto insurance website. Progressive was the auto insurance company to go to the web and the first to sell insurance directly over the web. Other competitors are doing this now as well. That being said, no other insurance company has the dedication to information technology that Progressive has. All of Progressive’s employees share the same passion about incorporating technology into their business practices including the use of mobile internet in the Immediate Response Vehicles long before that was a widely used consumer product. I don’t believe Progressive’s competition can steal market share from Progressive by creating a better web experience for policy holders.
The main area that I believe Progressive faces risk of market share loss to competitors is in the niche that Progressive held for so long. Insurance agents have traditionally known that Progressive is the way to go for non-standard policy seekers. That is likely to diminish as Progressive’s competitors seek to move into this segment and Progressive seeks to expand into the standard auto insurance segment. This is basically a reverse of a difficulty that Progressive faced when they wanted to move into the standard and premium segments of the auto insurance market. Insurance agents did not think of Progressive when a moderate to low-risk driver came looking for a policy because traditionally Progressive was the policy writer for high-risk drivers. I believe as Progressive dilutes its niche recognition it creates an opportunity for competitors to go after Progressive’s non-standard policy holders.
The insurance industry’s area of highest churn is in the area of non-standard policy holders. If Progressive’s competitors can find a way to lure non-standard customers away from Progressive, they can gain market share. One such way is to attract non-standard policy holders who would like to bundle their homeowners insurance with their auto policy. Progressive does not offer homeowners insurance. 40% of Progressive’s revenue comes from non-standard policies. I believe that 10% of Progressive’s customers could move to another insurance provider because they wish to bundle their auto and homeowners policies. State Farm and Allstate represent 16% of the P&C market and 34% of the homeowners market. It is safe to say that a large number of those Progressive customers who wish to bundle their insurance would switch to either of those companies, and that would reduce Progressive’s market share while growing the market share of its major competitors.
September 22, 2010
Selenium, the major component of Sel-Plex, is an antioxidant mineral that Alltech has been proven to have extremely positive effects on the health of both animals and humans. What is so beneficial about selenium is that studies show an association between increased selenium levels and improvements in reproduction, growth and meat quality in animals. In humans, selenium has been associated with the prevention of cancer, heart disease, neurological diseases, and infections. In the past, selenium was brought into the food chain naturally as soil was abundant in the mineral. As animals grazed it was stored in their muscle tissue and then passed to humans. Overtime, soil has become selenium depleted. Alltech developed Sel-Plex to fill that nutritional need both in animals and in humans.
There are several strengths that Alltech can take advantage of should they decide to pursue the “human” market with Sel-Plex. Depending on the medium used to distribute Sel-Plex to humans, Alltech has relationships that they can take advantage of. For no additional cost, Alltech could decide to continue market Sel-Plex to producers as a feed supplement. Should Alltech decide to partner with animal producers, they could take advantage of their expertise in marketing (e.g. graphical design, press relationship, and education). Alltech could also distribute Sel-Plex directly to human consumers as a supplement in tablet form. This takes advantage of the fact that Alltech already has food-grade manufacturing facilities.
One major weakness that Alltech faces is their position in the feed industry. Should Alltech decide to move forward in introducing Sel-Plex to human consumers, they would no doubt be stepping on a customer’s toes somewhere along the way. If they choose to distribute Sel-Plex as a feed supplement, Alltech cannot force the producer to market the product as selenium enriched. If they choose to distribute Sel-Plex in food by partnering with a food producer, odds are they will partner with a customer that is a competitor of another Alltech customer. Should they decide to produce direct for human consumption Sel-Plex tablets, they would steal some of the allure of buying selenium enriched meats.
What makes Sel-Plex such a unique product opportunity for Alltech is that it is the only selenium supplement that is in the same for as is found in plants. Alltech has already invested a large amount of capital in getting Sel-Plex through the complicated review and approval processes of the FDA and the EU. This gives Alltech a level of protection from competitors, especially in Europe. Also, there are few selenium-enriched products in the United States. This is an opportunity because Americans are increasingly choosing foods for their health benefits.
An opportunity that also has elements of threat in it is the FDA approval. This is not a great form of protection, because it is not strain specific like the European approval. Any competitor can produce a selenium product using a different strain and compete directly with Alltech. Another opportunity that contains elements of threat is the reason why there are not more selenium enriched products in the United States. It was discovered that selenium was a toxic substance before the health benefits where known. This is a problem because it would take a tremendous amount of effort to reverse the understanding of the average consumer in the United States.
Upon reviewing Alltech’s strengths, weaknesses, opportunities, and threats I would recommend that Alltech pursue producing Sel-Plex tablets for human consumption. Of all the options, producing tablets has the greatest profit potential. The barriers to entry are not in production, but in marketing. As stated, Alltech already has food-grade production facilities and it would be very inexpensive to partner with a pharmaceutical company to produce the tablet.
The most difficult aspect of this approach would involve entering into unfamiliar distribution channels. Alltech is very good at educating is consumers, and has fantastic marketing people. It would not be very difficult for them to adapt their current model used to educate food producers toward educating health professionals. Also, I believe their marketing department could be put to good use in developing brand recognition.
September 22, 2010
When Jeff Immelt succeeded Jack Welch in late 2001, he laid out his plans to change the growth strategy of GE. His approach consisted of five major parts:
1.Technical Leadership
2. Services Acceleration
3. Commercial Excellence
4. Globalization
5. Growth Platforms
Immelt believed that GE should strive to be a leader in technical innovation. Since the days of the company’s founder, Thomas Edison, GE relied heavily on introducing advances in technology. I believe this should be a key component of GE’s overall growth strategy because the only thing to keep a company’s growth from leveling off is to make sure its portfolio of products and services do not mature. Once a product reaches maturity, it is difficult to extract growth from it.
Jeff Immelt’s idea of expanding its service offerings to its infrastructure products is a great way to drive growth. This idea allows GE to extract revenues from the entire value chain of their products. Previously, GE infrastructure customers would have to turn to other businesses to service their products. The benefit of GE providing these services as opposed to other service providers is that GE can provide additional expertise. The advantage for GE is that these types of services offer greater margins.
Immelt also decided to overlay his own personality and expertise on top of GE’s culture of engineers and finance by instituting an initiative of commercial excellence. This would give GE a greater level of balance between the technical world and the consumer world.
Realizing the great growth potential of globalization, Jeff Immelt believed that the continuation of GE’s ability to expand globally could lead to even greater growth potential. This expansion includes sourcing and developing access to new markets. Immelt wanted to find opportunity in areas that are underexploited.
Jeff Immelt also placed a great deal of emphasis on growth platforms. Growth platforms are business initiatives that would help propel innovation and help GE become the first to enter new market segments and capitalize on emerging trends. Immelt instituted several venues for identifying growth platforms including requiring a presentation of three growth platform ideas per manager every year. I believe this was a great move because people closer to the information are generally the people who have the most intimate level of knowledge and therefore insight into a particular issue. Farming ideas from people with a more detailed and experienced level of insight leads to ideas that are more likely to succeed.
The one area that I believe Immelt should, and was right to, keep in place, is GE’s commitment to process efficiency, especially through practices such a Six Sigma. Immelt realized that the best way to fund his new initiatives, especially in the economic climate GE faced, was through savings in process improvements. Immelt was able to identify new areas where Six Sigma could be implemented. One such area the Six Sigma experts at GE worked on was called “cash entitlement”. This focused on improving a number of areas such as inventory turn and days in receivable to levels that were twice as good as the industry standards. Immelt believed this could lead to an additional $7 Billion in cash.
Immelt also introduced Lean Six Sigma. This initiative reduced working capital and increased return on investment in industrial business. In commercial finance, Lean Six Sigma increased margin, aided in risk management, and reduced costs.
Immelt also introduced the concept of “simplification” where related business segments would share assets, and physical assets such as buildings were consolidated. Overall, Immelt wanted to see $3 Billion in reduced costs over a three year period.
In a business who’s scope is as large as GE’s is, maintaining the utmost levels of process efficiency and cost reduction one of the main ways to make sure each business segment stays on task. GE’s product portfolio ranges so greatly that it must be very difficult to keep them from operating as separate little businesses. According to Immelt, GE isn’t a conglomerate, it is a “company of diverse benefits whose sum is truly greater than the parts.” The success of Immelt’s new strategy hinged on keeping one of the major aspects of GE’s ascension in the 80’s and 90’s, getting the most out of every resource and finding the best way to do everything.
April 15, 2010
I’m sure you’ve all been inundated with tax stories today and you’ve probably already heard the breakdown of who is actually paying federal income taxes. The way it breaks down essentially is that half the working population pays all of the taxes and the other half pays nothing or gets earned income tax credits. The top 5% earn about 37% of the income but pay about 60% of the income taxes. Under Bush top the percentage of taxes paid by the rich increased more than ever. This seems to conflict with the constant haranguing about “tax cuts for the rich”. If by cutting the tax rate the “wealthy” pay more, doesn’t that make the tax code more progressive? If the “rich” are picking up more of the tab and more of the not-rich aren’t contributing anything isn’t that the opposite of a tax break for the “rich”?
November 11, 2009
Have you ever heard of “Riba”? No, not the red headed country singer. Riba essentially is interest or usury. Riba is also one of the most forbidden practices in all of Islam, and is pretty much across the board agreed to be vile by every type of Muslim. In fact, most Islamic theocracies outlaw interest. So you might ask, “how can you run an economy without interest” or “what’s the advantage to saving without interest”
Well the way it works essentially is to take what you would normally save and invest it in something that will generate more income (which isn’t interest). Essentially, it works more like venture capital than investment banking. A venture capitalist has money, gives it to an up and coming business and in return gets a share of the business. As the business does better, the venture capitalists investment grows.
On the flip side of that coin, the same start up could go to a bank and get a loan. The business may experience the same growth, but the whole time the bank is getting paid back and its return on investment is solely based on interest. The bank doesn’t care if the business does well or poorly as long as it gets the loan paid back.
So, to return to my original question, does Islam have a better handle on capitalism? Maybe, maybe not. But it is really hard to argue that with out interest, investors have a lot more to think about and businesses have a lot more accountability. Also, without interest payments, more money is circulating amongst the population instead of gathering moths and piddly interest in savings accounts and CDs.
March 18, 2009
February 26, 2009
January 8, 2009
I know Christmas was just a few weeks ago, but I had the hardest time trying to figure out what I wanted for Christmas (much to my wife’s chagrin), but I have stumbled upon two things that I think are A-Maz-ING. The first one is the Powermat. It charges electronic devices wirelessly. All you have to do is set them on the mat and they charge. It also charges laptops with a special adapter. It is scalable and awesome.
Powermat Wireless Charging from Powermat on Vimeo.
The second thing is Mattel’s Mind Flex which is a mind control game that uses brain waves to move a ball through an obstacle course. The game comes with a brain scanning headset that manipulates the speed of a fan depending on how hard you concentrate allowing you to control how high the game ball levitates.
So, Santa, all I want for Christmas is a device that transports electricity with out wires and a game that I can control with my mind. I promise I’ll be a good boy.
Repartee Unknown Feed What Its All About Smartrunner.com
This man is a heartbeat away from being the leader of the free world…and people had a problem with Channey, Bush, and Palin. Seriously?!
