Kany's Blog – First Day in Singapore

iPhone is popular in Japan as well as Americas and Europe. But here is no Nokia, Android(not yet), and other major mobile companies. This article is about that Vodafone will make the new big platform for mobile-data services. I wonder how it affect to Japanese mobile industry.
In Japan, we already have plenty of applications at i-mode, though it’s not an ideal platform for software developers and content providers. You can made and sell apps freely, but cannot promote and charge for your apps officially unless you’re admitted by the mobile companies.

Par. 1. Introduction. Vittorio Colao, the current boss of Vodafone, left the company to run an Italian media congromerate RCS Media Group in 2004. After two years later, he came back to Vodafone and stop the idea that the company should become a content provider.

Par. 2. The project Vodafone publicized this month. With some of the industry’s biggest operators, it’s trying to build a joing global plartform where software companies and content providers sell things to their to mobile subscribers.

Par. 3. Brief history of Vodafone and career of Mr. Colao. He worked at McKinsey while he was a reserved officer in the Italian Carabinieri, graduated Harvard Business School and set up Omnitel Pronto, an Italian mobile operator which became part of Vodafone later.

Par. 4. The problem to be solved by Mr. Colao. Today’s mobile-phone industry needs new frontiers. One is mobile-data services, a market that is finally emerging after years of hype.

Par. 5. Breakthrough of iPhone. Telecom operators have offered only “walled gardens” services with pre-approved content that the operators could take a cut. Apple’s iPhone and “App Store” gives users easy access to plenty of applications, and lets software developers charge for themselves. It inspires other technology giants to build simikar app-store platforms.

Par. 6. Vodafone will serve similar open platform as iPhone. This circumstances will allow Vodafone to build their own platforms. Although Vodafone is so huge, Mr. Colao plan to serve one “Vodafone Services”.

Par. 7. A gap between ideal and reality. “The idea of enabling a single piece of software to run on lots of devices has been tried before, but has never really succeeded.”

Par. 8. Advantage of Vodafone is its size. If all Vodafone and its partners including China Mobile, Softbank, and America’s Verizon Wireless realise their plans to open their own app stores with the new platform, the potential market will be over 1 billion subscribers through out the entire globe.

Par. 9. Tomorrow: One platform to rule them all?

Words and Idioms

• knock sth on the head

• too … for  its own good:～過ぎて自分のためにならない

｛じぶん｝

• dumb pipes: 土管、ただの情報を通す管のことを指す。新しいビジネス用語。cf: http://www.jtpa.org/event/seminor/000404.html

GoogleやAmazonのようなネットサービス事業者の成功により、通信キャリアは「土管」(dumb pipe) の地位に追いやられてしまうのではないかという懸念がある。

Face value (Tony Hsieh, Zappos.com)
http://www.economist.com/people/displaystory.cfm?story_id=13490041

I didn’t know Zappos.com, a shoes shop website.
Although this week’s Face value focuses on Zappos’s outstanding customer service, I doubt whether customer service of the company is better than those of Japanese company.
Because American standard customer service seemss so terrible that I never understand how American consumers bear it. I know this opinion could be an prejudice, maybe I should live and try a customer service in America.

Par. 1. Introduction of “Zappos.com”. It looks like a start-up company in the internet boom days that the office of Zappos is adorned outlandishly and the employees enjoy working with some toys.
Par. 2. Mr. Tony Hsieh, the head of Zappos. His goal is to create a corporate culture that allows Zappos to prosper by providing world-beating customer service, no matter what business it is involved in.
Par. 3. Zappos, as an outstanding customer service company. Mr. Hsieh described Zappos as “a service company that just happens to sell shoes.”
Par. 4. Beginning of Zappos with Mr. Hsieh. As he sensed the firm’s potential, he moved from an investment fund which backed up the start-up Zappos to the firm and became the chief executive in 2000.
Par. 5. The culture of Zappos. Since Tony Hsieh joined, Zappos have focused their efforts on creating a distinctive culture at the company. Performance review of employee reflects the efforts that half of the review based on how well each person has lived up to the company’s values.
Par. 6. The recruitment of Zappos. How to employ people is also geared to identifying those with a Zappos frame of mind.
Par. 7. Laissez faire of Zappos. The company gives staff much freedom to get on with their job.
Par. 8. Cost and profit of the culture-building. After several years of just breaking even, Zapos was profitable in 2007 and 2008.
Par. 9. Mr. Hsieh’s willingness to share information. He encouraged his staff to use twitter, a micro-bloggin service, along with him.
Par. 10. Recession and Zappos. Despite the recession, the company goes well now, however if the recession make shoppers to be much more price-sensitive, Mr. Shieh’s model to sell products with full price in return for outstanding service might come unstuck.

Face value: Yuzaburo Mogi
http://www.economist.com/people/displaystory.cfm?story_id=13443693

Yuzaburo Mogi is the CEO of Kikkoman. He raise Kikkoman as a most renowned global brand of soy sauce.
The company started marketing activity in the US 1950s, and now Kikkoman took root in the country. The name “Kikkoman” is also known over the world as a maker of “all-purpose seasoning” soy sauce. Mr. Mogi didn’t sell soy sauce as a Japanese seasoning, but made catchphrase “all-purpose seasoning”. The company didn’t try to popularize Japanese food, but made local food recipes which use soy sauce. It proved soy sauce is truly used for all purpose.

Their marketing activity is not showy, but it’s well strategic. I found a Japanese book about Kikkoman. The title means that “Global managiment of Kikkoman”.

Par. 1. Introduction. Yuzaburo Mogi and his colleagues gave away slices of beef marinated in soy sauce at the International Trade Fair in Chicago in 1959, to see how American consumers respond to their product.
Par. 2. Kikkoman, the recognisable brand for soy sauce. Mr. Mogi and his company made an effort to penetrate non-Japanese market. The company is now the largest maker of naturally brewed soy sauce.
Par. 3. An usual Japanese company, Kikkoman. The family-owned Japanese firm doesn’t keep away from mergers and acquisitions, while other Japanese firms comparatively avoid to do it. Besides, the company started to accept presidents who came from outside of the founding families since 2004.
Par. 4. Not only soy sauce, not only in Japan. Kikkoman is the biggest Asian food wholesaler in America, and the company operates in a similar way in Europe, China, and Australia as well. In Asia, the firm sells canned fruit and vegetables under the Del Monte brand.
Par. 5. The recession and Kikkoman. The recession has hit Kikkoman’s profits, but the company is well protected on a cashflow basis. On the other hand, the strong yen damage the company’s revenue of which 30% gained from foreign market.
Par. 6. Kikkoman and America: the company’s biggest market. In the 1950s, the company moved into America, and made the template for their foreign expansion. The company did witty marketing activities, and enlighten Americans about soy sauce not as a Japanese product but as an “all-purpose seasoning”.
Par. 7. What Kikkoman is doing these days and will do near future. “Mr. Mogi’s early recognition of the importance of adapting the product for foreign markets is Kikkoman’s real special sauce.”

Face value: Sir Moir Lockhead
http://www.economist.com/people/displaystory.cfm?story_id=13403819

British public transport is miserable.
I remember the accident which was happened when I went trip to the UK. In 2005, I went through London and used railway from Heathrow Airport to Stansted Airport. I rode the train, but it was stopped suddenly. There was almost no announcement in the train. Actually there was, but it was too fast and unclear for me to follow. An old couple kindly told me that it seemed railway or something was on fire, and the train could not run anymore. They said the announcement was unclear even for the native speaker… They recommended me to catch a bus, so I waited a long que to take one. Finally I got to the Stansted airport, however the accident took hours to get there so that I missed my flight. I claimed to the train company desk, but there was no compensation at all.

According to this week’s Face value, there is a British transport company that make success both Britain and America. I wish it should offer a great service!

Par. 1. Introduction. In Britain, a numbers of companies which are respected abroad, receive bad reputation in their homeland. First Group is the one of that kind of companies. Sir Moir Lockhead is the chief executive of the group.
Par. 2. First Group in Britain. Criticized so much for late arrival of their train, though First Group is the largest train operator in its country. Ironic customers call First Great Western service from “Worst Great Western”.
Par. 3. Personality of Sir Moir. He lives in a large farm at the Scotish city of Aberdeen, with breeding Aberdeen Angus cattle. He was the general manager of municipal bus company in Aberdeen. Due to political change, the company was privatised. After that, he made First Group to be emerged as one of Britain’s leading private bus firms, by management buy-out of the other bus company.
Par. 4. Career of Sir Moir; history of First Group. The Group moved into the American market, and tookover American bus companies such as Ryder Transportation and Laidlaw group. It made First the largiest operator of school buses in the US and Canada.
Par. 5. Reputation of First Group these days. The company gained sales that is 57%  more than a year before.  The share price in March this year was quite high as the firm predicted solid results.
Par. 6. Current status of First Group. There were rumours that First would sell Greyhound brand as it was losing its attractiveness. However First invested Greyhound to improve its service and punctuality. Although demand for ticket is weakened due to the economy, the company says cashflow and profits are improving.
Par. 7. Stable position of First Group. Running public transport in both Britain and America works as a shelter for First Group. Customer’s demand for outsourcing support their business as well.

Face value:Ann Moore
http://www.economist.com/people/displaystory.cfm?story_id=13325379

The struggling big magazine publisher, Times Inc, is considering the way to get revenue from their online content, as well as implement integration to improve efficiency as a whole company. Japanese magazine industry also face hard time. But on the contrary, I only hear about termination of the publication, not about seeking the way to earn money online. It seems to me Japanese magazine industry gave up. This article gave me insight about other nation’s magazine industry. Hopes never die unless we give up.

Par. 1. Who she is. Ann Moore is the chief exective of Time Inc. The company which is the largest American magazine company is going to start charging their online readers as well as launching a new concept Mine. Mine allows you to create personalized magazine, and is provided both online and offline with free of charge. If it’s became popular, the company may start charing for it.

Par. 2. What she is known for. She faces the difficult task as a company boss, to keep magazines relevant despite the advertisement shrink and household budgetsgo down and a number of the free content online grows. She drafted a new two-year plan whish is focusing two things: internal reorganisation and innovation.

Par. 3. Her career. “Internal reorganisation” of her new two-year plan. The company was restructured by Ms Moore into three units: news, entertainmant, and lifestyle, after laying off around 600 people. It should maintain editorial quality of each magazine and brings better efficienty to the whole company. In addition to that, she launched “Time Inc University”, a series of seminars as a training program. The lecturer of the seminar is the company’s executives including Ms.Moore herself.

Par. 4. Her career 2. “Innovation” of her new two-year plan. She is building new brands for the magazines, and is seeking the way to use internet technology for the firm’s benefit. They announced a scheme called “Meghound”. It’s an online subscription service (of printed magazine?) that gives readers the chance to switch titles whenever they like.

Par. 5. Her career 3. The beginning of her career. She graduated from Harvard Business School in 1978, and received 13 job offers. She opted for the job with the lowest payment, as she had grown up with reading Time. Financial analyst was her first role in the company, and Sports Illustrated was the first magazine she worked as a publisher. In 1991, she moved to People and contributed to make it one of the most profitable magazines in the world.

Par. 6. Her reputation. Richard Parsons spotted Ms. Moore at People. In 2002, he became chief executive of Time Warner and selected her as chief executive of Time Inc. He described her as “bright, charming, energetic, fun and gutsy” with admitting she is now having hard time with a recession and the rise of the internet.

Par. 7. Recent business of her company. Ms. Moore is seeking the way to support her beliefe that the articles to readers free online is not sustainable and a swetch to paid access will be necessary. Time Inc anounced that it was considering the introduction of “freemium”((Free+Premium)) scheme that make some People</it< and Times articles available free, but charging for premium content. But on the other hand, the New York Times tried this approach before and abandoned it.

Par. 8. Her current activity. She is also take into consideration about e-reader. She proclaimed that it might make sense for Time Inc to cooperate with devices such as Amazon’s Kindle if readers agree to sign up for enough material, and started to talk with e-reader makers about cooperation. She, as a boss of magazine publisher, doesn’t afraid to embrace technology at all.

Face Value: Tony Fernandes
http://www.economist.com/people/displaystory.cfm?story_id=13325379

Par. 1. Who he is. He borned in Malaysia, and studied in London since he was 12 years old. He dreamed to his own low-cost airline as he couldn’t go back home due to the cost of the flight.

Par. 2. What he is known for. He acquired AirAsia in 2001, and the sister long-haul operator AirAsia x started the service from Kuala Lumpur to London this month. The average cost of the flight is 179 GBP ($250).

Par. 3. The beginning of his career. He graduated the London School of Economics, and worked in the music industry 14 years. After working Virgin Records, he runed Warner Music in Malaysia, his homecountry. In 2001, the year of the merger between Time Warner and AOL, he left Warner Music and backed to London. Then he happened to see a television interview with Stelios Haji-Inoannou, the founder of one of the no-frills airlines, easyJet. He went easyJet’s base airport next day, and considered if he could run business in Malaysia by using the same model as easyJet: to make money by flying people from England to Spain for 8 GBP.

Par. 4. How he started his firm 1. He approached GE Capital, a former head of Ryanair, and the prime minister of Malaysia. He got the right to take over an existing airline, a subsidiary of goverment-owned company.

Par. 5. How he started his firm 2. What the airline had was only old airclaft and debt. And three days after he got the firm, September 11th happened. He scraped together money by putting his own capitals and loans and investments from his acquaintances.

Par. 6. His philosophy toward the business. Regardless of scepticism, he convinced that Asia had potential market for low-cost airline because the area would be spared the worst of the economic downturn.

Par. 7. The consequences of his challenge. His conviction was proved by success of AirAsia and AirAsia x.

Par. 8. Current business environment in the field. ArAsia took its own line and kept competitive with rivals.

Par. 9. His current activity. He is proud for the firm’s lack of hierarchy that means anyone can do anyone else’s job. He practices what he preaches so that he sometimes took a role for baggage-handler, cabi crew, check-in-clerk, and even party organiser.

Note: The structure is similar to the last week one so that it is easier than last week to understand the details. I cannot believe the ticket price from Kuala Lupur to London takes only $250!! I really felt that a hub of Asia is not Japan at all…

Face value: John Paulson
http://www.economist.com/people/displaystory.cfm?story_id=13277415
Paragraph 1: Who he is. He is an investor who continues to win during this financial crisis. His hedge funds marked over 100% returns in 2007, betting against subprime mortgages, netting him $3.7 billion personally. His funds continued to do well last year, too.
Paragraph 2: What he does know for. Risk Arbitrage that involves punting on actual/potential merger targets.
Paragraph 3: His personality. Fitting icon for the post-boom age: mild-mannered, bordering on weedy and soft-spoken.
Paragraph 4: How he won. He avoid leverage, making beds with borrowed money. What he did is “obvious” trade.
Paragraph 5: How he won, in practical. Shorting credit. He targeted BBB-rated tranches, the lowest in subprime securities. The practical method he uses is credit-default swaps(CDSS).
Paragraph 6: His philosophy toward the investment.
Paragraph 7: The reputation and his philanthropic activity.
Paragraph 8: Coming year Market. Markets now follows Mr. Paulson as they used to be followers of Mr. Soros. And Mr. Paulson still a net short-seller as he doen’t see the economy reaching bottom.
Paragraph 9: His recent focus. He starts to recapitalise sick but viable banks. The Recovery Fund, his new funds, took a 25% stocks(?) of Indy Mac, a Californian bank that the government took in hand last July.

Remark: I read the article with my friends. It took 1.5 hour to understand the outline. The article is well organised, so it was interesting to read even though I didn’t know the meaning of “credit default swaps”!