Archive for July, 2011
“All truths are easy to understand once they are discovered, the point is to discover them.”
Another juggernaut of the book industry goes by the wayside into oblivion. I’m referring to the recent bankruptcy of big-box bookseller—Borders.
Borders Books and Music has finally decided to close 399 stores and to furlough 10,700 employees. In these times of uncertainty, this is a severe blow for these newly laid-off people who will have a very hard time finding a new job.
According to the company’s spokesmen, they had to fold due to the following reasons: “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, e-reader revolution and turbulent economy, have brought us to where we are now.”
The closings will almost certainly be a boon for Borders’ competitors. Other national book chains, like Barnes & Noble and Books-A-Million, could move into stores vacated by Borders. Some competing bookstores are already nearby. A spokeswoman for Barnes & Noble said that 70 percent of Barnes & Noble’s stores are within five miles of an existing Borders store.
In my opinion, Border’s demise came about because of a major management principle called “A Strategic Inflection Point”. According to Andrew S. Grove former Chairman of the Board of Intel Corporation, a strategic inflection point is that which causes you to make a fundamental change in business strategy. Nothing less is sufficient.
These strategic inflection points represent what happens to a business when a major change takes place in its competitive environment. A major change due to introduction of new technologies, or changes in the customer’s values or a change in what customers prefer. Almost always it hits the corporation in such a way that senior management are among the last to take notice.
Let’s take a look at some of Borders omissions in identifying some major strategic inflection points. First, Borders famously blew its relationship with the Internet. From 2001 until 2008, it outsourced its online sales to Amazon, essentially handing customers over to the bigger, better site during the formative years of e-commerce.
Second, Borders neglected e-books. The Amazon Kindle came out in November 2007. Barnes & Noble debuted its Nook, now sold in Walmart and Best Buy as well, in November 2009. Apple’s iPad came out in April 2010. Borders’ Kobo (ever heard of it?) came out last, just a year ago. Another big mistake in a cut-throat environment.
Third, Borders mishandled its big-box strategy. It opened far too many stores, including several overseas, despite lackluster sales. The stores tended to be too big and too expensive, in terms of overhead. Brick-and-mortar stores are not in the spotlight anymore. People are more inclined to shop online. It’s cheaper, faster, and hassle free—no matter what they say. That is what finally killed Borders—the emergence of online bookstores and the emergence of e-books. Retail has become a challenging, if not outright terrible, business, regardless of what you are selling.
I for one, will not buy another paper book. They are more expensive and difficult to find in Panama. Instead, I buy my books from Amazon.com and read them in my Kindle’s e-book reader application. Digital books can be downloaded from Amazon.com in less than sixty seconds. In addition, the average price for a Kindle book is approximately $11.99 compared to $25.00 for the same paper book available in this country. The difference is abysmal. In a cash-strapped economy every penny saved is a penny earned.
People will still buy paper books, but their numbers will dwindle as electronic books take the industry by storm. This is a strategic inflection point which Border’s management failed to identify, and they are paying dearly for it. Good Day.
A few decades back, most of our communication with our relatives abroad was made either through a phone call, a radiogram, or a letter. During Christmas Season, birthdays, weddings and other social occasions we used to send all kinds of Hallmark cards. We still do, but their numbers have decreased considerably.
With the advent of desktops, laptops, tablets computers, smartphones and zillion of other gadgets, communication with others does not require a letter. Text messages and e-mails have replaced the antiquated post office mail. Slowly the traditional mail is being laid off as new technological options are sprouting everywhere.
Recently I found out that the U.S. Postal Service is considering closing about 3,700 post offices over the next year because of falling revenues.
Facing an $8.3 billion budget deficit this year, closing post offices is one of several proposals the Postal Service has put forth recently to cut costs. Last week for example, Postmaster General Pat Donahoe announced plans to stop mail delivery on Saturdays, a move he says could save $3 billion annually.
The Postal Service has more retail locations—32,000—than any other private business in the United States—more than every Walmart store, Starbucks and McDonald’s combined.
Recently a government spokesman said, “The Postal Service is facing a dire fiscal crisis and two challenges—the rapid transition to electronic communications and the lingering after effects of the Great Recession—which threaten its very existence. In order to survive, let alone thrive in the 21st century, all options have to be considered and the Postal Service has to modernize the way it does business, including where and when it does business.”
As a cash-strapped Federal government continues to cut budget items, the U.S. postal service will surely take a hit. The golden days of the traditional letters are fading away into the sunset. There are many difficult decisions ahead that must be made to improve operations, reduce costs and return the Postal Service to financial solvency. Snail mail has certainly lost it mojo.
The Cloud is abuzz about Apple’s interest in acquiring video-streaming service Hulu, According to the rumor mill, Apple Inc. is secretly bidding for this popular video-streaming site.
An acquisition of Hulu could bolster Apple’s iTunes store, which provides videos users can rent or buy, and help it compete with Netflix Inc. Hulu offers a subscription streaming service. It also brings in revenue from ads that accompany content it streams to users free-of-charge.
Hulu, whose owners include The Walt Disney Co., News Corp. and Comcast Corp., started presenting its financial information to interested bidders late last month, after an unsolicited offer prompted its board to look for other offers.
I wish these services would be extended to Latin America. I don’t like to go out at night to the theaters anymore due to safety reasons. Having at my disposal the opportunity to stream movies would be absolutely wonderful. Patience is a good word to keep under the pillow. Good Day.
Currently, artificial islands are an expensive but in some cases lucrative option for many cities having lack-of-land problems (such as Tokyo’s Odaiba and Fukuoka’s island city project.) In the future they may be common sights as many cities (especially Asian cities) around the world face severe urban land shortages and congestion. Eventually, this may make man-made islands a logical option.
Panama is not short of land, but is jumping in the bandwagon of artificial islands as it leaps forward in mega-building projects. Ocean Reef Islands—a Grupo Los Pueblos project—will create two artificial islands of almost 200,000 square meters of landfill for a luxury home development off the Pacific Coast of Panama City, Panama.
Located off Punta Pacifica, home to several new tower projects, the islands will be connected by two 160-meter bridges. The building enterprise is currently underway. How successful it will be, remains to be seen.
Panamanian President, Ricardo Martinelli, recently commented that the artificial island endeavor would “promote a business environment that will induce other entrepreneurs to develop further investments which would portray Panama as a modern country with First World infrastructure.”
On an oppressive overcast humid Sunday morning under cobalt skies, I took a shot at the construction of these two artificial islands. Even though it was a Sunday, it was business as usual. I tried to extend the zoom of my camera to the maximum, but couldn’t get near enough. That’s why you see the operation at a considerable distance. Anyway, with a little bit of imagination, you will know what is going on the Pacific Coast just off Punta Pacífica. Take a look.
As I get my feet wet in the fascinating world of photography, I try new tricks after reading about them in photography books. The field is so dense that it invites you to experiment with amazing photographic techniques.
One of my latest experiments was trying to come up with a bokeh. The word bokeh comes from the Japanese word “boke” (pronounced bo-keh) which literally means fuzziness or dizziness. Bokeh occurs for parts of the scene that lie outside the depth of field.
Photographers sometimes deliberately use a shallow focus technique to create images with prominent out-of-focus regions. The idea is to take a photograph where one subject is focused while the rest of the picture looks fuzzy or out of focus. The intention of the photographer is to lead the eye of the viewer towards the subject that is perfectly focused. I’ve seen the most breathtaking photographs using the technique of bokeh, specially in images involving light.
Below is a sample of a bokeh from a dilettante photographer; yours truly. I apologize beforehand if it doesn’t look like a real bokeh. Here we go.