Renault = Clean cars ?

Apparently Renault is betting the company on electric cars. This could be the ballsiest and smartest strategic move I have heard of in a long time.

The auto industry is in a big crisis, these companies are huge, they employ a lot of people directly and much more indirectly… but they generate very small profits. Just consider that if somebody wanted to buy the Ford Motor Company (the 3rd largest in the world) they would need about 25 billion $. If someone wanted to buy Google they would need about 150 billion $.

The companies that are doing well are extremely well positionned, which means they stand for something very specific: Toyota means ‘affordable reliability’, BMW means ‘driving pleasure’, Mercedes means ‘prestige’, Porsche means ’sports car’.

This is the basics of marketing, that the brands stands for and owns something unique and relevant.

The problem is that there are not many meaningful and distinctive benefits left, and this is why Ford, Renault, Peugeot, Fiat and GM more than any others are all struggling to be relevant. But there’s a new word that is becoming increasingly important these days… and no one owns it yet…

Because of high oil prices and the fact that cars are highly highly polluting machines, most car manufacturers are investing a lot in alternative energy cars. The most successful by far are hybrid cars.

The problem is that ‘hybrid’ is not such a clean word to own, it’s not very choiceful, it’s a bit of oil and a bit of electric…

So if electric or clean is the word of the future, one has to make choices, no half-baked solutions. Renault is apparently taking this road. It is very risky because it depends on oil prices remaining high, on the continuity of Government subsidies and particularly on consumers changing the way they use their car… but if that happens Renault could become the new Toyota.

You have to be able to sum up your brand in one meaningful and relevant word to do good marketing.

Some jobs at Renault.

An article in the Economist about Renault’s big bet on electric cars.

More on the Kangoo ZE – zero emission and no noise – on sale in 2011.

The Procter methodology – Cannibalisation

When your new product ‘eats’ sales your older product that is called ‘cannibalisation’, and it’s the crucial element to take into account when launching new products.

Procter & Gamble is a company that has become expert in limiting uncertainty through rigorous testing and analysis.

There is usually a high uncertainty in any new product launch so I was curious when I saw a new Ariel product in my supermarket. I don’t want to bore with details about detergents, but in a few words this is a product that can be used with any detergent, so basically you can buy a cheap supermarket detergent (50% cheaper than Ariel?) and adding this product you will get Ariel whiteness.

Many would think this product would cannibalise Ariel sales thinking why would people keep buying Ariel if they can get Ariel benefits much cheaper. Well you never know for sure what will happen when the product hit the shelves but it is fair to assume that the P&G has thought and tested the following:

- Will grow the amount of people who use the Ariel brand? This is a cheaper product so Ariel non-buyers (those who buy other brands) might give it a try… and if they like it (wow, it does improve the results!) they might realise that it’s worth trying the real thing. With retailer brands (ie private labels) being more and more popular, this might be a very smart way to get the consumers of retailer brands to give Ariel a try…

- Will it increase the awareness of the Ariel? More space on the shelves with the Ariel brand… and less for competition.

- Will it increase the

Just remember that P&G leaves very little to chance. Significant launches can easily take 3 years of preparation because the product must be a winner and all risks need to have been identified and dealt with.

Jobs at P&G: www.pgcareers.com

Nintendo – Making the world play

In 2009 Nintendo reported a growth of 10% in sales and 14% in profits. Is this normal?

Those are great results for any normal year, but they are truly exceptional if they happen in the middle of the worst global recession since the great depression in 1929.

When the whole world is sinking Nintendo is growing fast, and it’s not because Nintendo’s products are the kind that do better in a crisis (like private label products, low-cost airlines, fast-food restaurants etc…). It’s because of superior strategy in very large and unstable industry.

The gaming industry is intensely competitive and it changes very fast. Actually, do you remember Atari? Commodore? Sega? Those companies used to be the leaders, and actually started the whole industry in the early ’70s with Pong (I believe) and Space Invaders. Atari, Commodore and Sega are no longer making consoles, although some are making games. Today the industry of the consoles is dominated by Nintendo, Sony and Microsoft, but only Nintendo has been here since the beginning.

Like with many technology-driven industries a new player comes up with a new technology and it totally disrupts the status-quo. Then the become the undisputed leaders for a while and drive the others out of business. Then a new technology appears and it starts all over again.

Sony and Microsoft didn’t manage to drive Nintendo out of business and in 2007 Nintendo release the Wii, which is just a completely different way to play games. It was directed to people who didn’t use to play games and attracted them with friendly and fun games that could be played with a group of friends.

Nintendo is a very old company that started in Kyoto (Japan) in 1889 selling cards. They were always involved in gaming and when Atari and others developed the video-gaming industry in the 70’s they were there.

What is interesting is that talent is absolutely crucial to succeed in this industry. The boom started when they hired a talented student who later developed Donkey Kong, then they built the NES console that took over America and the world with games like Mario Bros. After a rocky ride in the 90’s they came back strong with new consoles (Nintendo DS and Wii) and new game experiences.

Today that tradition still sits deep and they have managed to re-invent video-gaming by playing the game differently, I guess they are the very best at playing any games…

Nintendo is a large and highly profitable company, yet it has only about 4.000 employees generating $16.000 Million in revenues. That means about $4.000.000/employee/year in revenues… not bad if you know that at Google it’s about $ 1.000.000/employee/year.

Nintendo is the 3rd most valuable company in the Japanese stock market. It’s a solid company although we know that this industry is a bit unstable and things can change quickly.

It is world-class in terms of video-game development and marketing. They are integrated, so they create the consoles,  the games and then take them to market. It can be a fantastic place to start a career in the gaming industry, which is now larger than the movies industry and is converging with mobile phones, PCs and any other devices.

Will Nintendo be the next Nokia? Is the iPhone going to replace everything? Are the video-game developers like UbiSoft, EA or GameLoft  going to run the show? Or is it rather the hardware developers like Sony?

More about Nintendo, the company. More about the video-game industry. And if you want to see the history of the gaming industry, here is a video that you should watch before you go to the interviews.

And careers at Nintendo.

Ideo – Innovation factory

Innovation is probably the most exciting, stimulating and strategic activity of any business. It’s also one of the most important ones, and as the guru of all gurus Peter Drucker said ‘Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation.’

Businesses are created with an innovation (Ford with the affordable T-model, Google with a better search engine, Microsoft with MS Dos, Apple with the first personnal computer, Danone with yogurts etc…) and they survive through innovation.

The problem is that while companies have learned to master the process of improvement and optimization, innovation is still an essential but very unpredictable process. It’s more an art than a business process and that’s a problem for large companies.

Well, Ideo claims to have a process of innovation, and based on their track record to date, it seems like a fair claim. Large corporations hire Ideo to create new products: they designed the first commercial mouse for Apple,

they designed the stylish Palm V

and the Crest neat squeeze for Procter and Gamble (it gets harder to squeeze as it gets more empty)

When talking about innovation a lot of MBA programmes study IDEO. In particular they play a 30-minutes video where they show how IDEO was given the very complicated task of creating a new shopping cart for a supermarket in just 5 days. This is what they came up with: 

The video is fun and instructive. It shows how IDEO works and it does seem like a unique place. Of course, innovation is not just about creating a cooler shopping cart… but one that will sell. Apparently the cart hasn’t succeeded commercially, so there will always be some uncertainty in innovation… and that’s part of what makes it exciting.

Regarding careers IDEO must be a pretty unique place. There are 500 employees working in different disciplines. They are based in the heart of Silicon Valley and have offices in New York, Chicago, Boston, Shanghai, London and Munich.  What is particularly nice about their approach is that they work by projects and put together multi-functional teams with people from different backgrounds and professions. Diversity and originality is the essence of innovation and this is visible in their recruitment policies.

So take a look at the opportunities: http://www.ideo.com/culture/careers/

Career advice – part 3

Here is the last part.

Career advice – part 2

I have to publish the document by parts, so here is the second one.

Advice for career-oriented young people

Today I want to share a document that was given to us when I was doing my MBA.

I believe this piece gives important advice and tips to those who are driven to succeed professionally first and foremost. It is extremely down-to-earth and was written by a very successful businessman.

After having worked in a multinational firm I totally agree with the part concerning behavior in work and making your boss looking good. I also agree that ‘Assistant to the President’ is an under-rated job (few people like the idea of being assistants) that can be a perfect first job.

Well, here it is.

Letter to a career oriented young man 1

The boy who built a windmill

Here is a very impressive teenager from Malawi who build a windmill by himself just by seeing some pictures in a book.

The windmill allowed him and his family to live with electricity, which completely changed their lives. He keeps improving things around him…

Read more about William Kamkwamba .

Vestas – Green profits.

Is global warming – or more correctly ‘climate change’ -  really happening? Okay, the ice in the arctic and the glaciers are melting quickly but is it really due to human activity? Isn’t it possible that it’s just part of a natural cycle and that global warming would still happen with or without humans?

I am not an expert on climate change but there is a large and growing majority of experts who say that there is compelling data on global warming. The consensus is that climate change is a reality, that it’s caused by humans, and that it’s happening faster than we thought. Here is an interesting article that clarifies some important myths about global warming.

Since the industrial revolution our society has been in constant need for energy, both for our own comfort (light, heat) and to produce (factories) and sell (transport) the goods that we need or want.  So much so that many political actions have been triggered by the need to ensure energy supply. So much so that the world’s largest and most profitable companies are oil companies (#1 being Exxon). If you think that Telefónica, Deutsche Telekom, France Telecom or Vodafone are large companies, just consider this – in 2008 Exxon had revenues of 459 billion USD and profits of 45 billion USD. Telefonica had revenuex of 57 billion USD and 7.5 billion USD in profits…

The problem is that while the demand for energy is growing constantly we highly depend on fossil fuels (oil, coal and gas), about 84% of our total energy consumption. There are 2 problems with this, one is that  there is a limited supply of fossil fuels because they are generated by natural resources which are not renewable and are produced over hundreds of millions of years… and the other, and perhaps more importantly, is that their use threatens the climate through carbon emissions.

So there is no doubt that there is a huge and urgent need for new energy sources, and in particular for ‘clean’ and ‘renewable’ energy sources. This creates opportunities and obligations.

I am writing about Vestas because it represents a new kind of company, which is contributing to something necessary and good for the planet while at the same time it offers very solid, stimulating and challenging professional training and experience.

Vestas is the worldwide leader in Wind turbines, with 38% market share. It’s a Danish company with over 20.000 employees. The company has an installed base of 39.000 turbines in 63 countries. Together they produce enough energy to provide electricity for every household in a country like Spain.

Wind energy is growing very fast (30% per year) but it’s very complex to be able to make wind power a significant energy source. The business of Vestas is not just making turbines, but helping Wind projects around the world blossom (and still making a profit in the process). This means that they have to master all parts of the process: planning, instalation, operation and maintenance of wind farms. Those who buy the turbines require help in terms of development,  financing (private and/or subisidies) and ownership.

Well, this is a large and fast growing company which is playing a big role in something that is something good for the planet and necessary for our societies.

They offer plenty of exciting opportunities like University Programmes, a Graduate Programme and many job opportunities.

Online outlets – Growing in Europe

What is fashion? Some say it’s what goes out of fashion…

So what do fashion companies do with the clothes that are out of fashion? They have to find other ways to sell them and that’s why in the last years we have seen the emergence of so many ‘outlets’ where you can buy last year’s Prada, Diesel, Nike or Armani collections with discounts of up to 70%.

The problem is that the Prada outlet is just outside Florence in Italy, the Nike outlet near Barcelona is still 50km away. So this is why there’s recently been a surge of online outlets. The proposition is the same, discounts of up to 70% but with the convenience of the internet. Florence is a fantastic city, and Tuscany is even better, but it’s a slightly expensive way to save 200 Eur on a jacket.

So online outlets are growing fast… and are hiring a lot. I believe these are going to be pretty solid companies and what they do is pretty cool. Like any online marketplace they need products and buyers.

They contact fashion companies (and actually any kind of manufacturer who has stocks whose value deteriorates quickly like PCs and other electronic devices) to offer them to ‘publish’ their collections on their sites. Then they take pictures of the collections, organize the collections on their site and promote them to their users.

On the other hand they need to be very good at attracting users: the more buyers, the easier it will be that Armani will be willing to advertise their products. The more Armanis, Nikes, Toshibas and the more reasons users will have to keep coming back…  and tell their friends about it.

The one that has the largest user base (more potential clients) wins and can even avoid the costs of logistics (storing and shipping products) telling manufacturers to send the products directly to the buyers (faster and cheaper).

Also, this is a pretty solid model for a crisis as people are even more receptive to large discounts.

This is happening all over Europe:

- In Spain the leaders are www.privalia.com . It’s a company that went from 5 people in 2006 to 300 people today. They had sales of 7 million Euros in 2008 and are growing very fast. They send at least one email per day advertising new or upcoming collections. They are currently expanding around Europe. It’s a good moment to join!

- The other guys in Spain are www.ofertix.com . Founded by a former Privalia manager, they are focusing more on the international expansion.

- In France there is a dominant player (www.vente-privee.com) that is also expanding across Europe. These guys are already very large, they had revenues of over 500 million Euros in 2008. They started opening offices in Europe in 2007 and now are present in Spain (Barcelona), UK (London), Italy (Milan) and Germany (Dusseldorf). There are 1000 employees, the average age is 31 years-old with people from multiple nationalities. They are planning to hire 300 people in France this year. More info in French here.