Archive for November, 2009

Daron Acemoglu, the Charles P. Kindleberger Professor of Applied Economics at the MIT Department of Economics, has written an excellent article for Esquire titled ‘What Makes a Nation Rich? One Economist’s Big Answer’. The hypothesis that Acemoglu proposes is that political and economic freedom are the ingredients for poverty reduction. The argument proposed is certainly compelling.

Acemoglu of course is not the first to make note of the linkage between prosperity and freedom. Each year the Heritage Foundation and Wall Street Journal produce the Index of Economic Freedom that describes the benefits of economic freedom as ‘studies … demonstrate important relationships between economic freedom and positive social and economic values such as per capita income, economic growth rates, human development, democracy, the elimination of poverty, and environmental protection.’ The ten components of Economic Freedom as measured by the Heritage Foundation are; business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.

Milton Friedman, in his book ‘Capitalism and Freedom’ takes us back in time to early thinkers on the understanding of political freedom relating to economic prosperity: ‘The relation between political and economic freedom is complex and by no means unilateral. In the early nineteenth century, Bentham and the Philosophical Radicals were inclined to regard political freedom as a means to economic freedom. They believed that the masses were being hampered by the restrictions that were being imposed upon them, and that if political reform gave the bulk of the people the vote, they would do what was good for them, which was to vote for laissez faire.‘

The Objectivist and individual rights evangelist Ayn Rand adds to the evidence “Another current catch-phrase is the complaint that the nations of the world are divided into ‘haves’ and the ‘have-nots.’  Observe that the ‘haves’ are those who have freedom, and that it is freedom that the ‘have-nots’ have not.”.

Acemoglu has written an interesting article which is sure to create debate. It is definitely worth a read.

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The reason that the vast majority of people use Google as their preferred Search Engine over others (e.g. Bing, Yahoo, Ask, Clusty, Wolfram Alpha etc.) is because Google does search best. Google has such huge Search Engine market share because it returns more relevant results to searchers and is constantly improving. Google does well because it listens to end-users then provides what the end-users want.

It is therefore extremely disappointing that Microsoft is (apparently) paying News Corp. to exclude its content from the Google Search Results. News Corp. media is reporting that ‘News Corp, Microsoft want to lock Google out’. This is very negative for consumers because Microsoft is not trying to compete with Google through providing a better product but is rather trying to attract users to Bing (Microsoft’s Search Engine) through manipulating where data appears. This effectively means that Microsoft is trying to force competitors to provide an inferior product instead of itself providing a better product i.e. it is trying to lower the standard for everyone.

Microsoft must be very concerned about Google at present. Microsoft’s major revenue and profit earners are the Office suite and the Windows Operating System. Google is gaining market share rapidly with Google Docs and Gmail (Google is taking market share from Microsoft Office including Outlook and Exchange) and the yet to be released Google Chrome OS is set to be a very big headache for Microsoft.

It is just so disappointing if, as reported by News Corp., Microsoft is engaging such negative competitive practices. Microsoft is sure to alienate many loyal followers through such negativity. Perhaps Microsoft should rather focus on the end-user rather than competitors. Google is doing very well by concentrating on end-users wants and needs.

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Data: A competitive advantage second to none! The ability of organizations to collect relevant data, realise meaningful information from that data and then act upon the information is the key to success for many ‘new-wave’ service and knowledge organizations. A core competence of data collection, analysis and action is what separates spectacular success from average performance. There is however a wide gap between those that understand the value of information and those that don’t. Here are two examples of organizations which have used their data core competency to become world leaders:

Google – Data Analysis and Use at its Best

Just why is Google so popular? The answer goes back to the founders; Larry Page and Sergey Brin had the vision to understand that if they attained data about how websites relate to one another they could use this core competence in a range of related products. It all began with Search where Google results were (and still are) better than Yahoo and other competitors because of website ranking based on data attainment and analysis (called PageRank). Google has continued to collect and analyse massive amounts of information and have used this core competence to expand their product range e.g. Google Docs and Picasa. What is interesting with Google is that with every product they release, data attainment is the core aim and benefit for Google e.g. Google Chrome Internet Browser affords Google the opportunity to gain vast and valuable information about how people surf the Web which assists their search and advertising products.

Amazon.com – Converting Data into Sales

Cross selling and recommending appropriate products to the shopper has resulted in Amazon.com becoming the largest Online store. Amazon.com started as an Online book shop however, through its excellent data collection, analysis and use has grown into selling all sorts of products and services. Added to this is that the conversion rate of visitors to Amazon.com that results in a sale is way higher than industry averages. Have you noticed that when you visit Amazon.com recommendations are made as to products you may find useful? In the background your past searches and purchases and likely profile are all calculated against available products and the most appropriate are shown as recommendations. This, in effect, means that every visitor gets their own unique customised set of recommendations when visiting Amazon.com. The collection and effective use of data has resulted in this Online retailer becoming the world’s largest department store.

The Data value of Loyalty Cards

Google and Amazon.com are two companies which have a core competency in data collection, analysis and use. But what about organizations which are not making use of the opportunities data affords?

As the name applies loyalty cards are about converting customers into loyal customers. But how, through a card, may loyalty be attained? Well the first step for any loyalty program is to recognize that data is the single most important aspect of any loyalty program. Get the data, analyse the data and use the data in a personalised way; that is the key to attaining loyalty.

FlyBuys is a ‘loyalty’ program in Australia however one cannot but notice that they have ‘missed the boat’ when it comes to gaining the collection and use of data as a core competence. How FlyBuys works is that points are attained each time a purchase is made at a participating store. Eventually the points add up and may be used to buy products. In effect FlyBuys is not a loyalty program but rather a discount program. There is a distinct difference as loyalty raises switching costs whereas discounting does not provide a sustainable competitive advantage. Now, if FlyBuys collected all the data about their members shopping habits and other details they could use this data to assist their customers (e.g. Shops) in identifying shopping habits and sales opportunities. Loyalty could be attained by members as services and shopping experiences could be personalised for every shopper (or group of shoppers).

Data is able to provide a core competency leading to sustainable competitive advantage. Data, and the use of the data can mean the success or failure of organizations. Ping-O-Matic describes well just how valuable data is: ‘Why go to all the trouble of setting up a free system that sends out over a million pings a day? To play with all the data of course. ’

Incoming search terms for this article:

• dr eckstein products australia online
• who are competitors of fly buys?

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It’s too darned hot… Yip, it’s going to be a hot one here in Sydney today. Already it is humid and sweltering…

Sydney, Australia Weather Forecast

free online clock desktop clock

Reminds me of that great song sung by Erasure on ‘Red Hot + Blue: A Tribute To Cole Porter‘ – It’s Too Darn Hot (lyrics below)

It’s too darn hot
It’s too darn hot
I like to sup with my baby tonight
Refill the cup with my baby tonight
I like to sup with my baby tonight
Refill the cup with my baby tonight
But I ain’t up to my baby tonight
Cause it’s too darn hot
It’s too darn hot
It’s just too darn hot
I like to coo with my baby tonight
And pitch the woo with my baby tonight
I like to coo with my baby tonight
And pitch the woo with my baby tonight
But brother you fight my baby tonight
Cause it’s too darn hot
According to the kinzy report
Every average man you know
Much prefers his lovey dovey to court
When the temperature is low
But when the thermometer goes way up
And the weather is sizzling hot
Mr. Pants for romance is not
Because it’s too darn hot
It’s too darn hot
It’s too darn hot
Oh, it’s too darn hot
It’s too darn hot
I like to coo with my baby tonight
And pitch the woo with my baby tonight
I like to coo with my baby tonight
Pitch the woo with my baby tonight
Brother you fight my baby tonight
Cause it’s too darn hot
Mr. Gob for his squab,
A marine for his queen,
A G.I. for his cutie pie is not
Oh it’s too darn hot
It’s too darn hot
It’s too darn hot
I gotta get the heat down
Gotta get the heat down

I thoroughly recommend that anyone who has not watched the Red, Hot and Blue video/DVD to have a look. Description below from Amazon.com:

‘The wildly successful Red Hot + Blue project, featuring such world-class artists as U2, Annie Lennox, Tom Waits, and Sinead O’Connor, and such acclaimed directors as Wim Wenders, Alex Cox, and Jonathan Demme, is finally being released with the care that it deserves. Originally issued in 1990, the Red Hot + Blue: A Tribute To Cole Porter album created massive media attention for AIDS relief and became the first release in a 15-album series. An eclectic musical homage to the legendary songwriter Cole Porter, it went platinum, spent 24 weeks on the Billboard charts, and generated $3 million dollars for AIDS charities worldwide, but its companion piece, a VHS collection of music videos, was somewhat relegated to the shadows. That changes with the 2-disc Special Edition package of Red Hot + Blue, which contains all the music videos on a DVD and the album, complete with a much-needed remastering, on a CD, both in the same package.’

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Daniel Radcliffe (yes, of Harry Potter fame) has narrated a short documentary titled The Legacy of Hope for the Holocaust Memorial Day Trust (HMD). It is well worth watching…

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