Business analysis - this is the second part
Arun1990
600012545_3.pptxBusiness Models from the discussion board
Should the Model be Successful?
(The Theory)
Is the Model Successful?
(The Numbers)
Yes
No
No
Yes
March of Folly
(Business Non-Sense)
Sears
Aereo Iridium
“ Online Groceries
Blockbuster Video
Kodak
World Turned Upside Down
(A Failure Paradox)
Wired Cable TV
AVON IBM Sears
Nokia Kodak
7Elevyn NFL Europe
Yellow Brick Road
(Business Sense)
Amazon Web Services
AT&T Upgrade plan
Online retailing
Lightning in a Bottle
(A Success Paradox)
Dollar Shave Club Pandora
Wongo Roomba
Zappo’s
RedBox
Key Implication:
The rules and landscape of business change constantly. Today’s “business sense” may be tomorrow’s “business non-sense” (and vice versa).
1
Saturday
Online retailing for Everything Freddy Ogden
Business Models from the discussion board
Should the Model be Successful?
(The Theory)
Is the Model Successful?
(The Numbers)
Yes
No
No
Yes
March of Folly
(Business Non-Sense)
Sears
Aereo Iridium
“ Online Groceries
Blockbuster Video
Kodak
World Turned Upside Down
(A Failure Paradox)
Wired Cable TV
AVON IBM Sears
Nokia Kodak
7Elevyn NFL Europe
Yellow Brick Road
(Business Sense)
Amazon Web Services
AT&T Upgrade plan
Online retailing
Lightning in a Bottle
(A Success Paradox)
Dollar Shave Club Pandora
Wongo Roomba
Zappo’s
RedBox
Key Implication:
The rules and landscape of business change constantly. Today’s “business sense” may be tomorrow’s “business non-sense” (and vice versa).
2
Monday
Twitter, LIAB, AMAZON – YBR – Ebay – WTUD Kurt Benhoff YBR – Chick Filet – John DuMoulin
Airlines use of Carbon Fiber – Rocky aye
M Pesa – Safi Sadiq
Top Tier B Schools offering online MBA – Brian Brooks
Awethu Project – Amy Foster
WTUD – Mc D’s in Caribbean – Nathan George
AirBNB – LIAB- Ryan Geach
Shifting Business Models
Should the Model be Successful?
(The Theory or Conventional Wisdom)
Is the Model Successful?
(The Numbers/Reality)
Yes
No
No
Yes
March of Folly
(Business Non-Sense)
AOL Merger with Time Inc..
World Turned Upside Down
(A Failure Paradox)
Los Angeles Lakers
Nokia and RIM
Yellow Brick Road
(Business Sense)
SalesForce.com
Lightning in a Bottle
(A Success Paradox)
FedEx
SolarWinds
Key Implication:
The rules and landscape of business change constantly. Today’s “business sense” may be tomorrow’s “business non-sense” (and vice versa).
3
Salesforce.com – Yellow Brick Road
The Conventional Model for Customer Relationship Management Products
Operated in house.
Customer Data too Valuable to Move Offsite (Security)
Large Complex Systems with Fairly Heavy Customization
Examples: SAP, Oracle, JD Edwards, Sage Group and others.
The Model for Salesforce.com
Cloud Based ERP System
Customer Data Held off Premises
Pay as you Go Pricing Model
Additional Social Media Aspects to Salesforce.com Customers
The Unexpected
Outsourcing CRM became a popular Cost Reduction Method by Large Companies
Security Concerns were Reduced after Adoption of Service by Others
Still Around as phishing attack in 2007 Proved
Revenue Grown from $1.1B to $3B in 2009. Stock Price from $10 to $61 Now
Forbes Rates Salesforce.com as the Most Innovative Company in America
4
SolarWinds: Lightning in a Bottle.
Conventional Model for Enterprise Software
Direct Sales Model Augmented by channel Partners
High Touch.
Focus Efforts on Large Customers
SolarWinds Model
Telesales Model Augmented by channel Partners
Resist Large Deals as they are too Resource Intensive
The Unexpected
Company moved from Tulsa to Austin in 2006
Marked the Start of SolarWinds as an enterprise Software Player
Enterprise Customers love Products’ Simplicity and “Ease of Doing Business”
Revenue has Grown from $27 M in 2005 to $270 M in 2012
Stock has Risen from $15 to $60 per Share.
5
Nokia and RIM (Blackberry) – World Turned Upside Down
The Conventional Wisdom Nokia Adhered to:
.Continue to dominate Cell Phone Sales through Incremental Improvements in their Phones
Sell Cheap Phones in Emerging Geographies and Price Conscious Consumers
Proprietary Operating System that was Simple and Cheap to Develop and Maintain
The Conventional Wisdom RIM Adhered to:
Sell “sort of Smart Phones” to Professionals at a Premium Price
Great Email/Calendar and Exchange Support
Proprietary Operating System that was Simple and Cheap to Develop and Maintain
The Unexpected
Apple and Then Android are introduced smartphones
Both Use Open Operating Systems that make Writing/selling Applications Available to a Broad Set of Companies ; Creating an Ecosystem
Mobile Phone Becomes Central Technology Device in People's Lives
Nokia Does a Deal with Microsoft to Use Windows Mobile as OS then sells handset group to Microsoft
RIM Introduces Blackberry 10 in Hopes of Reviving their Prospects. Limited
6
Nokia and RIM (Blackberry) – World Turned Upside Down
7
Nokia and RIM (Blackberry) – World Turned Upside Down
8
Nokia and RIM (Blackberry) – World Turned Upside Down
IPhone Introduced
Feb 2011
Nokia CEO Elop shared his “burning platform memo” “While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.”
9
Dell: All over the Matrix
The Story
Direct “bulk” Sales of Desktops to Corporations. Ignore overtures from retailers to sell wares in stores.
Focus on efficiency, hire part time workers to staff call centers.
Recent Growth has come from consumer demand rather than the business market.
People looking for home computers are turning to laptops. People prefer to “hold” and “test” the models in a store.
SO…
Dell goes on an Acquisition Spree to Diversify their Business Away from Low Margin PC’s
Services – Perot Systems, SecureWorks, Boomi
Security Software – Wyse Tech., SonicWALL, App Assure
Systems Mgmt. Software – Quest Software, KACE Ntwks, Make Tech.,
Storage – Compellent, Ocarina Networks
Networking, Force 10, Exanet,
Fast Forward to Current
Michael Dell teams with Silverlake Partners to take Dell Private
Shareholder Uproar
Offer is too Low. CEO Leading Deal is Conflict of Interest
Competing Bid from Carl Icahn and Blackstone
Ultimately taken private. Changes in voting rules.
Now Making a Mega merger by Buying EMC
10
Business Models Shift Over Time: Companies/Assets Move
Should the Model be Successful?
(The Theory or Conventional Wisdom)
Is the Model Successful?
(The Numbers/Reality)
Yes
No
No
Yes
March of Folly
(Business Non-Sense)
World Turned Upside Down
(A Failure Paradox)
Dell when Mobile
Devices took over.
Yellow Brick Road
(Business Sense)
Dell after Diversifying Acquisitions
Lightning in a Bottle
(A Success Paradox)
Dell When Build to
Order Worked Well
Key Implication:
Companies Move from One Quadrant to Another as the Market and the Company each Change and Adjust
11
AOL Merger with Time Inc. – March of Folly
The Conventional Model for Media Companies
Print Media Must have an Online Presence
Online Media Companies Have a Higher Valuation
AOL had twice the Valuation with Half the Cash Flow
June, 2010 AOL Merged with Time Warner in $350 B Deal !!
Ownership Split 55% - 45%. Board & Executive Positions Split Equally
Deal Hailed as “Transformative”
The Unexpected
June 2010 the Dot com Bubble Burst
Culture Clashes
AOL was Positioned as the Crown Jewel Yet All the Top People at AOL were Moving to NY HQ of Time Warner
Online Media very different Model than Print in ALL Ways
Limited/No Sensitivity to 9/11 from AOL Leadership
AOL Accounting Scandal (Inflating Ad Revenue) Led to More Distrust
Merged Company Had no Synergies and No Way to Solve the Fundamental Business Issues of Online Media
Neither had Yahoo, MSN, MySpace, Lycos or I.A.C.
Investors lost 80 % of their Investment in Company
Deal Now Hailed as “The Worst Deal of All Time”
12
Business Models MUST Change/Adapt
Eastman Kodak – Analog Photography to Digital Photography
Alta Vista – Search Engine owned by Yahoo that predates Google
In 2009 Yahoo Does a Deal with Microsoft for Search.
In 2011 Yahoo Shuts down the Alta Vista Site
In 2013 CEO Mayer says Deal is “Underperforming”
Best Buy – Replaced Department Stores as Appliance Center to showroom for Amazon.com to Providing Space to Samsung
Border’s Books – Replaced by Online Books. Unlike Barnes and Noble that is fighting back with Nook Reader etc.
Blockbuster – Changed Movie Going Habits and Squeezed Independent Video Stores by Offering much Larger inventory. Now defunct as Netflix and Online Video Streaming have Taken Over.
Traditional Record Companies and Satellite Radio – Squeezed by IPod andMP3 Players, Adapters, Internet Radio
Companies or at Least Divisions Move between Quadrants over Time
IBM, Dell, Best Buy
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