Sunday, April 21, 2013

Life After Steve And Terry

Last week one of the world's largest retailers reported fallings earnings, despite the success of its ecommerce operations and the launch of an online video servicer to make up for dwindling DVD sales. Tesco's actual problem is that it has had patchy success in the global market.

On the contrary, Apple has been a resounding global success, but even what was the world's largest company seems to have run out of steam,  and is reportedly going to post profits that are 20% down.

But maybe the global problem here is just hidden. A straw poll of our Indian office a few weeks ago revealed everyone had smartphones under s year old, but none were iPhones. I had a similar discussion concerning employees at a Chinese partner company, where only there UK based owner has an iPhone. The trouble is, Apple's products are just too expensive for these markets.

Another common feature is that both companies recently lost incredibly successful and long standing leaders and their replacements are struggling.

It is a facet of global business that a greengrocer and computer manufacturer have become head on competitors as they have expanded. Comparing the two companies' take on retail is particularly fascinating: one has built glitzy exhibition space, the other warehouses where sales per square foot is the KPI.

It's interesting to note that Apple recruited a traditional retailer from Dixons to run its shops and he soon departed, as did the guy responsible for the Apple stores' success who last week left JC Penney.

What is clear is that the old rules are just that. They are old rules. Even the largest organisations in the world need to reinvent themselves on a daily basis. Attention to ideas is even more important than attention to detail, the old retail mantra.

But perhaps most difficult of all, knowing what business you're in gets more and more difficult as these giant companies expand and encroach onto each other's businesses.