Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

Planable + more news

Planable

Planable – Planable is an interesting social preview and scheduling tool, particularly for clients in highly regulated sectors such as pharma clients. I use Buffer rather than Planable

China

As many stats as you could possibly want if you have a passing interest in the Chinese internet ecosystem

China Internet Report 2017 by Edith Yeung from Edith Yeung

Consumer behaviour

Chinese Prefer the Sound of Silence When Getting Messages From Mom – WSJ – While users take nine seconds on average to read 100 characters, they need 22 seconds to listen to the same 100 characters, excluding pauses, says Liu Xingliang, head of research at Beijing-based analytics firm Data Center of the China Internet. (Paywall)

Economics

The Fundamental Surplus by Lars Ljungqvist & Thomas J. Sargent – on why unemployment is hard to fix and why Phillips curves are BS (PDF)

Luxury

LVMH Buys Into South Korean Eyewear Brand, Gentle Monster — The Fashion Law – media speculation suggests that it could be worth about 60 billion won ($53.17 million). Per Thakran, the investment will serve to kick-start a strategy to grow the company into a billion-dollar business over the next six to eight years, up from the nearly $200 million it does now. “I believe that across Asia there are only about six to eight brands that can achieve this level of notoriety, with a unique image, that’s differentiated among lifestyle brands,”

Marketing

Asian unit of Bell Pottinger separates from London parent | FT – “This has been a difficult time for everyone — especially as so many good, talented and honest people have been caught up in it,” said Mr Turvey. “But I am pleased our offices in Asia now have control of their own destiny.” (paywall)

Nike is still the king of the sneaker industry, but even great empires can fall | Quartz – much of Nike’s problems are down to poor brand management and over exploitation of assets – just look at all the Air Jordan colour ways that pass through tier zero retailers

Media

Facebook is (quietly) looking for an office in Shanghai | Timeout Shanghai – Facebook already sells a substantial amount of advertising to Chinese businesses looking to advertise abroad. Air China is already a marque customer for Facebook and there is a lot of direct e-commerce going on for gadgets and fast fashion

Online

Russia’s Facebook Fake News Could Have Reached 70 Million Americans – $100,000 on Facebook can go a surprisingly long way, if it’s used right. On average, Facebook ads run about $6 for 1,000 impressions. By that number, the Kremlin’s $100,000 buy would get its ads seen nearly 17 million times.
But that average hides a lot of complexity, and the actual rate can range from $1 to $100 for 1,000 impressions on an ad with pinpoint targeting. Virality matters too. Ads that get more shares, likes, and comments are far cheaper than boring ads that nobody likes, and ads that send users to Facebook posts instead of third-party websites enjoy an additional price break

There’s something wrong with video advertising and it’s hidden in plain site – AdNews – too many trackers degrading ad player performance and viewability

Seniors Realize Their Travel Dreams in This Intel Virtual Reality Project – Video – Creativity Online – it reminded me a bit of Total Recall

Advertisers bullish over ad budget | Shanghai Daily – bullish on Chinese media market prospects

City’s telecoms operators look to new iPhone to kick-start handset sales, in long absence of ‘hero’ model | SCMP – is the lack of a hero model an indication of category design maturity?

Technology

Feel old? 1990 Sony Trinitron TV now considered ‘historical material’ in Japan | SCMP – it was a thing of beauty, my current TV set still doesn’t do blacks with the same inky depth as my old Trinitron set. Trinitron is also an emblem of how low Japanese consumer electronics have fallen from its pre-Internet highpoint

Daring Fireball: Samsung’s OLED Display Monopoly – bang goes the market

Wireless

Apple Beats Samsung in Smartphone Sales in China and More Importantly in Repeat Sales by a Staggering Margin – Patently Apple – the problem you’ve got is the data, it can’t be trusted

September 9, 2017
The Bell Pottinger Post
PR firm Bell Pottinger has got entangled in a mess of the South African government and the Gupta family. More people have written about this in depth, so I will just link to them at the bottom of the post.

Here’s some thoughts on it all

There but for the grace of God go I – must have reverberated through the minds of at least some corporate communications and public affairs professionals. There is a tension between finding clients that have needs and are willing to pay for high-powered counsel versus the risk that the world may come down on you.

That’s the risk you take when you work with businesses that are involved in sensitive areas or at the edge of the law:
- Businesses looking down the barrel of antitrust regulation like Google or Qualcomm
- Businesses involved in the ‘carbon economy’ – Edelman had previously worked for coal producers and fracking projects until they came under sustained attack
- Big food and big agri: McDonalds, PepsiCo, Coca-Cola are all targets. Monsanto has been of concern due to GM crops
- Mining
- Multinationals doing business in sensitive countries like Myanmar
- Defence
- Questionable regimes: Ketchum’s work with Russia is the stand out example or H+K Strategies arrangement of the deceptive ‘Nayirah’ testimony which played a big part in getting the US government behind the first Gulf War
Your business is at the mercy of pressure groups and the wider media agenda.

But that’s also the reason why I think that Bell Pottinger can survive IF they can hunker down and weather the storm. There will always be a demand for organisations and individuals who want to launder their reputation or argue the unpopular side of an argument.

Even if PR agencies aren’t doing it, organisations that sit at the nexus of business and security will likely step into the breach bringing the necessary PR skills on board.

As a PR person, is it the kind of work I would like to do? No, but then I am a brand marketer; corporate communications was something I could do, but didn’t particularly enjoy doing. I could see the attraction of the work as it would be financially very lucrative and there would be the opportunity for business travel and ‘war stories’ from the office to talk about at dinner parties.

It’s magical thinking if you expect ‘unethical’ clients to suddenly be denied representation. This will be even more the case as the US multilateral world view is challenged by China’s more transactional approach. We’re currently living in a golden age for NGOs and NFPs – it would be unrealistic to think that it will continue this way.

In the grand scheme of things, the PRCA censure won’t mean that much, its a bigger move for the UK PR industry; showing that it can muck out its own stables. From Bell Pottinger’s longer term perspective it won’t mean much because of the divided nature of PR industry representation. As individuals PRs can sign up to be members of the CIPR (Chartered Institute of Public Relations). The PRCA primarily represents agencies (although it has started to offer individual consultant accreditation). The key benefit is an ISO-9000 type accreditation for agency management systems. It wouldn’t be that hard for a member agency to set-up and get ISO-9000 accreditation and maintain it. If there are enough practitioners working at Bell Pottinger, they can highlight their staffs professional status as members of the CIPR.

That Tim Bell interview: if you haven’t seen it, have a good watch. I can see this being used in broadcast media training for a good while. It’s the first time I’d ever seen Sir Tim in anything more casual than formal business wear.

His mannerisms are odd in places, particularly at the beginning. His answers are odd. For example, when asked what went wrong he quoted Sir Walter Scott, which made him look literate but arrogant. Given that he went on there for a reason, presumably to put as much distance between himself and the mess – it was an ideal opportunity to land his side of the story in a précis.

His phone rings, he declines the call and then shows the interviewer his phone screen. Why din’t he mute his phone or shut it down at this point and why did he want the journalist to see who had called? He then gets a message on his phone and a second call. Only on the second ring does he finally silences the phone.

Chris Geoghegan is the non-executive director of a number of prominent UK companies, an ex-BAE Systems executive and the father of Victoria Geoghegan. Whilst he wouldn’t be best pleased with the current situation, Bell doxes him on the UK’s most prominent news programme. Geoghegan had been mentioned in an op-ed of a South African publication, but had been largely ignored in most of the press coverage surrounding the Bell Pottinger scandal. Whilst it won’t be anything new to a board doing their due diligence it might drive sniggering down the country club. Bell didn’t need to volunteer the information, he chose to do so.

The smoking gun emails – after Henderson had resigned as CEO of Bell Pottinger, the BBC interviewer questions Bell about two (presumably new) emails that seems to be at odds with his own claim that he recommended they not take the work as Bell Pottinger had a client conflict. You can see this after 1:15.

For a piece of business that’s a conflict of interest, the January correspondence is a very odd email. I can understand him saying that the meeting was successful. But then he goes on to talk about the revenue opportunity and how he will personally oversee the project.

By April why would Lord Bell be still offering advice on the account if he believed it to be a conflict of interest? His excuse for this was getting back into business after having a stroke.

Bell puts the blame squarely at the door of James Henderson. UK media coverage implied that the schism between Bell and Henderson went beyond the Gupta business. So Bell might have a bigger axe to grind and Guptagate is just a handy vehicle.

Lord Bell then talks down the future prospects of Bell Pottinger, it might be an overly pessimistic view. Bell has a new rival business, its in his interest to make Bell Pottinger’s problems even worse.

Whilst Bell Pottinger have problems in their London office, they have successful branches in Hong Kong and Singapore where this won’t matter as much IF (and its a big IF) they can hunker down and weather the current storm. The business could retrench, rebrand and survive.

The Guptas needed to be introduced to a good PR agency, after this every dictator, unpopular mega corporation and shady mogul will know where to go. If Bell Pottinger is no longer about, then there are any number of large corporate agencies or boutiques who will take their business.

More information
Ketchum (Sort of, Not Really) Ends Its Relationship with Vladimir Putin | AdWeek
Deception on Capitol Hill – New York Times
Edelman and Media Zoo PR targeted by anti-fracking protestors | PR Week
Guptagate: Who Are The Family At The Center Of South Africa’s Political Storm? | Newsweek
Op-Ed: The Invasion of the Body Snatchers – a weekend edition | Daily Maverick
Christopher Vincent Geoghegan BA (Hons), FRAES | Bloomberg Research.
How China Aims to Limit the West’s Global Influence – NYTimes.com
PR industry reads last rites for scandal-hit Bell Pottinger | FT
Battle of the spin doctors: Bell Pottinger PR titan quits over race hate dirty tricks campaign despite saying it wasn’t his fault | Mail Online
September 6, 2017
That Trivago poster
If you’re a Londoner, the end of summer is marked by two things; the Notting Hill Carnival and Trivago’s annual advertising blitz on public transport. In media land there has been some complaints. We need to talk about the Trivago ad – a triumph of media planning over creative execution according to an op-ed written by a creative in Campaign. The article is timely, it taps into a wider existential crisis about the death of creativity as advertising is swallowed up and pooped all over by Google and Facebook.

Her shirt changes. In some placements she wears a light blue shirt, she also wears one in red plaid. The logo moves placement too from top right to bottom right in the posters.

A few things about the campaign, some more obvious to marketers than others:
- Despite Trivago featuring various destinations in a search box, they don’t seem to have done any paid or organic search work around the destination names at all. They are putting advertising behind brand searches through
- The ads seem to be all about reach and repetition. Using OOH ads as closure and amplify the TV ads. I haven’t noticed this being replicated online
Why going hard and often? Travel is a mature sector with strong players. If Trivago isn’t top of mind, it isn’t competing. Engagement just doesn’t matter that much in this scenario, hence why the company backed off press releases at the end of May this year for the UK market.

The absence from online brand advertising is likely down to the comparatively high cost of running this kind of saturation campaign on the likes of Facebook advertising. This is why TV, radio and out of home media haven’t depreciated in the same way as traditional print advertising media.

The choice of campaign timing is more interesting. Traditional travel companies usually try and target a bit later in the year over the Christmas season in influence holiday shopping decisions.

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September 4, 2017
Cohn & Wolfe + other news

Cohn & Wolfe China goals

Cohn & Wolfe CEO eyes 27.3% growth in China | China Daily – huge ask for Cohn & Wolfe given the rise in domestic competitors and aggressive international competitors, just 6% growth in GDP compared to 14% in go-go years. FMCG sector numbers that are awful etc. Cohn & Wolfe would need to swap out representing western brands for local brands as Chinese consumers buy domestic in increasing numbers. Cohn & Wolfe might be thinking more about trying to capture Chinese brands going global, but Chinese companies tend to not build brands.

Consumer behaviour

Have Smartphones Destroyed a Generation? – The Atlantic – technology demonised for behavioural disfunction. Some of the statistics are interesting, but the conclusions aren’t

Economics

China’s Robot Revolution May Affect the Global Economy – Bloomberg – “By turbocharging supply and depressing demand, automation risks exacerbating China’s reliance on export-driven growth – threatening hopes for a more balanced domestic and global economy”

Ethics

Two China Tech Titans Wrestle Over User Data – WSJ – WeChat owner Tencent Holdings Ltd. contends that Huawei is effectively taking Tencent’s data and violating the privacy of WeChat users, according to people familiar with the situation. It has asked the Chinese government to intervene, these people say – I have to wonder what they are doing to their western customers or what might happen to AT&T subscribers ‘lucky enough’ next year to have a Huawei handset (paywall)

Marketing

Adidas has found that models and bloggers, not athletes, are the key to selling sportswear to women – this could have a huge impact on its sponsorship programme, which might be bad for top level women in sport

Media

Digital listening surges closer to 50% | Digital Radio – interesting RAJAR data

Online

China holds drill to shut down ‘harmful’ websites | Reuters – interesting implications beyond censorship of illegal content. Could also have implications for command-and-control servers for malware etc

Technology

Scrapping the combustion engine: the metals critical to success of EVs | Hoffmann Centre for Sustainable Resource Economy – surprised greater consideration article isn’t given to capacitor storage systems and other Li ion alternatives or hydrogen fuel cells

Apple’s first academic machine learning paper won a top AI conference prize — Quartz – interesting, but I don’t think anyone is advancing as quickly as the hype promised

UK Samsung TVs bricked after firmware update (updated) | Engadget – “Samsung is aware of a small number of TVs in the UK (less than 200) affected by a firmware update to 2017 MU Series TVs on 17th August. Once this issue was identified, the update was switched off and we’re now working with each customer to resolve the issue. Any customers affected are encouraged to get in touch with Samsung directly (1-800 SAMSUNG). We would like to apologize for the inconvenience caused to our customers.”

Technics SL-1200GR turntable is finally here – praise be. More on Technics here.

August 29, 2017
Can too much ‘design thinking’ be a bad thing?

First of all, what’s ‘design thinking’?

It’s a term that has been popularised by IDEO to encapsulate user-centred thinking. Wikipedia does a good explanation of how it differs from the scientific method

Design thinking differs from the “Scientific method”, which begins by stating a hypothesis and then, via a feedback mechanism, continues iteratively to form a model or theory, by including consideration of the emotional content of the situation. While feedback in the scientific method is mostly obtained by collecting observational evidence with respect to observable/measurable facts, design thinking feedback also considers the consumer’s emotional state regarding the problem, as well as their stated and latent needs, in discovering and developing solutions. In scientific methods with a heavy emphasis on math or physics, emotional elements are typically ignored. Design thinking identifies and investigates both known and ambiguous aspects of the current situation in an effort to discover parameters and alternative solution sets which may lead to one or more satisfactory goals. Because design thinking is iterative, intermediate “solutions” are potential starting points of alternative paths, allowing for redefinition of the initial problem, in a process of co-evolution of problem and solution

So design thinking builds on the scientific method to also include human factor consideration (beyond physical ergonomic considerations of industrial designers).

The attraction for businesses is that it allows a wider range of intellectual tools to be thrown at a problem. Business problem solving traditionally has borrowed from the scientific method: data is used to form a hypothesis, which is then tested. The lack of consideration of human factors becomes a problem as an organisation tries to become marketing or customer-orientated. In digital organisations the iterative nature of design thinking mirrors modern approaches to development on software and digital services. Short bursts of iterative work that are then refined regularly. Digital products and services don’t necessarily need to be built by the organisation; banks don’t need to build their bank statement system, restaurants their digital menus or phone companies their billing design interface.

The blind spot that I see in the process is when we forget that the promises made through a proposition built via design thinking has to be delivered in the real world.

Here’s a case in point.

By the 1970s Japanese quartz watch movements with miniaturised watch batteries had proved an existential threat to the Swiss watch industry. The Swiss had embraced quartz technology alongside their tradition offerings as far back as 1969. 20 Swiss manufacturers came up with the beta21 movement which they released soon after Seiko’s Auctron. Overall the industry was slow to go into large commercial production of quartz watches.

By 1974, the price of gold shot up fourfold and the dollar dropped by 40%. These two factors hit the premium market hard. From the end of the war until the rise of China, America was the largest single market for luxury goods, though the Japanese gave them a good run for it. Luxury watchmakers were hit by both rising costs and dollar price inflation in their largest market. Low-end and premium brands disappeared left, right and centre. In 1978, the number of quartz watches manufactured passed that of mechanical watches as part of what the watchmaking industry still calls the ‘quartz crisis’.

IWC ended up being bought by VDO. At the time VDO was an independent German company that specialised in making speedometers and gauges for both cars and the marine sector. It still makes electronics and instrumentation, but is now owned by Continental (of Continental tyres fame). It was the VDO connection which connected IWC with Porsche Design.

Porsche Design had a reputation for making watches that had a focus on user experience. They adopted a focus on minimal design, legibility and innovative materials. Their first design was a chronograph which had an innovative first black steel watch, they used PVD (physical vapour deposition) to provide a stronger surface than paint. They made an innovative model with a compass hide underneath its watch, the watch lifted up

The next watch would be a dive watch, it was partly aimed at a German Navy requirement for dive watches that had a sufficiently low magnetic signature that combat divers could safely work with naval mines. IWC had invested in machines for working with titanium. Dive watches that perform are usually pretty chunky products.

These two designs by Panerai and Rolex respectively are good examples of the typical design approach. Enough metal is used to keep the immense pressures under control.

Porsche Design took a radically different approach. They managed to make a smaller device by using the water pressure to improve water resistance. The pressure would squeeze the case tighter and tighter. This made it slimmer and necessitated the design of curves. This also make it exceptionally comfortable to wear.

It was a nightmare to the manufacturing function at IWC. Titanium is exceptionally hard to work; to the point that these watches were sold at or below the cost of sale (manufacturing, marketing, logistics etc). The Porsche design literally had no straight edges on the case making it exceptionally hard to manufacture.

In subsequent models of dive models IWC went back to more muscular hard edged designs that make life easier for the manufacturing line.

What becomes apparent is that Porsche design was very focused on the end customer experience, but it was at the expense of business considerations. This brings us back quite neatly to design thinking which loses that process function over time.

Apple’s design team not only focus on the product design, but how it can be made. It mean’t thinking laterally about possible process improvement. They went to sweet factories in order to work out how to cast seamless transparent plastic surfaces. Apple spent large amounts of its cash pile to forward purchase in-demand components and machine tools for factories. Foxconn had thousands of CNC machines working cranking out iPhone cases that would have been unthinkable from other manufacturers.

But most companies aren’t organised like Apple. They have limited resources to implement processes for customers. Conventional business thinking usually tries to reduce costs or outsource as a non-core product.

August 28, 2017