Ten Likely Business Events in 2008 By Business Week

Here are 10 likely occurrences that are set to happen in 2008 as predicted by the geniuses in BusinessWeek. As entrepreneurs and managers, it is imperative that we keep an eye out for things that are to come and certainly affect our business. We should also be doubly vigilant as to acting in real time in response to these events.

Green Crisis

There will be a backlash in the green movement after it becomes clear that many of the companies claiming to be green are in fact nothing of the sort. Businesses that proclaim they are "carbon neutral" will find that such proclamations no longer carry much weight among far more skeptical media and consumers.

Airline Consolidation Begins

At least one major U.S. airline will buy another in 2008. The most likely scenario is that Delta Air Lines (DAL) will go after Northwest Airlines (NWA), United Airlines (UAUA), or JetBlue Airways (JBLU). When that happens, others will scramble to cut their own deals. Certainly, no airline wants to be left stranded as a solo operator if Clinton or Obama ends up in the White House and taps the brakes on industry consolidation. The main drivers for such combinations will be the shabby finances many companies will see in 2008 and the argument that the U.S. economy and business require a healthier industry. What's more, airlines that restructured in bankruptcy have some new private equity and hedge fund owners that will demand returns.

Bloomberg's Historic Run

New York Mayor Michael Bloomberg will enter the Presidential race in February, after it becomes clear which nominees will get the nod from the major parties. His multiple billions and organization will impress voters—and stun rivals. He'll look like the most viable third-party candidate since Teddy Roosevelt. But Bloomberg will come up short, as he comes in for withering attacks from both Democrats and Republicans. He and Clinton will split more than 50% of the votes, but Arizona's maverick senator, John McCain, will end up the country's next President.

Bye-bye, CDs

The music industry is in crisis. The key reason is that CD sales are plummeting. Now, it's going to get worse. This year, the most important retailers, including Wal-Mart Stores (WMT) and Best Buy (BBY), will look to radically downsize their CD sections. Perhaps there will be no more than one aisle, chock-full of mainstream pop titles. Digital music will continue to grow in influence, from iTunes (AAPL) and Amazon.com (AMZN) to ad-supported site such as imeem and fast-growing upstarts like Pitchfork.

Facebook Fatigue

Social network fatigue will set in as people tire of getting yet another invitation from so-called friends to join yet another social network. And, in the wake of Facebook's fumbled social ads initiative, it will become even more apparent there's no obvious way to pitch products on these sites without turning off members. Social features will wend their way into all kinds of Web services, from search to news, but the gold rush in social networks themselves will begin to wane.

Finally, Internet TV

For years, gearheads have dreamed of getting all that video from the Internet onto the big 52-inch screen in the den. But it's a pain. Look for that to change in 2008. While Apple TV has been a dud, Steve Jobs & Co. will make an aggressive play this year for the most important screen in the house. Perhaps Apple will even make a gorgeous TV itself, with all the necessary Net capabilities inside. And if Apple can't do it, someone else will.

The Biggest Bribe Penalty Ever

German electronics giant Siemens (SI) will agree to pay more than $1 billion in fines to avoid prosecution by the Securities & Exchange Commission and the U.S. Justice Dept. on charges it paid hundreds of millions in bribes to win foreign contracts. The fine will shatter the previous record fine under the Foreign Corrupt Practices Act. Siemens will also agree to allow compliance monitors to set up shop in its Munich headquarters to ensure the company has cleaned up its act.

Web Crash 2.0

If a recession finally hits, Web 2.0 companies will find there are neither enough ad dollars out there for all of them to survive on, nor enough big corporate buyers such as Google (GOOG), Microsoft (MSFT), and traditional media companies to buy them all out. What's more, venture capitalists may decide that momentum looks better for clean-tech investments than for Web startups that depend on a cyclical business like advertising. So more will join the "DeadPool," as the Web startup blog TechCrunch calls its list of failed companies.

Crude Oil Will Top $100

When will the world see $100-per-barrel oil? Paul Horsnell, head of commodities research at London-based Barclays Capital (BCS), is betting that 2008 will be the year. Horsnell thinks the prediction is a slam dunk, though he doesn't believe $100-per-barrel oil itself has any great significance. Horsnell bases his prediction on broad fundamentals in the industry, which he says are reflected in the behavior of the futures curve for oil prices. Despite six years of rising prices, demand continues to grow—especially in China and the oil-rich Middle East—while new supplies have been disappointing. These are key reasons that futures prices for oil five to seven years out have been moving steadily up in recent years to the $85-per-barrel range at present. Horsnell believes that such prices, which attract relatively little press coverage, are a proxy for long-term, sustainable oil prices. At the same time, the near-term prices, which do get people's attention, have been very volatile, ranging all the way from $50 per barrel to almost $100 per barrel in 2007.

Big Brother Fears Return

For a decade, a Net-happy world has cheerfully shared personal information online, with relatively little mainstream concern over privacy. Now, the issue may come to the fore, as carriers and cable companies deploy click-tracking software and publicity about China's Olympian Internet oversight leaks into the news.

Cohen And Pratt's 7 Laws of Good Leadership

Here's a really nice article from Cohen & Pratt. This article is about leadership and the laws that you should keep if you want to be a good leader.

You’re not a leader unless others follow, and in order to get people to follow you must exhibit qualities that inspire confidence and trust – confidence that you know what you’re doing and trust that you’ll do what you say you’ll do. Following are seven attributes that any good leader must have to keep their team following them.

1. Clearly outline your vision. You need to inspire people by giving them purpose and direction. If you can’t articulate your vision, don’t expect to get the best out of your team. People want to be part of a success story. Show them how you can lead them there.

2. Develop a plan to accomplish your vision. It doesn’t have to be elaborate, but you need to demonstrate how you’re going to lead your team from point A to point B. Break your plan down into simple, clear steps and assign a deadline to each step. Make sure everyone is on board, and then start rowing in the same direction.

3. Be decisive. No one wants to follow someone who can’t make up their own mind. Do your homework, get wise counsel and then make a decision that you can stick with.

4. Adapt. When things change in the marketplace you need to make adjustments. Take out your plan, get your team together, brainstorm ways to adapt to changes and then implement the necessary changes. Remember, your plans are living, breathing documents; not static, dogmatic doctrines.

5. Keep your word. If you tell an employee you’re going to do something, then do it. Nothing destroys trust and confidence in a team member like breaking your word. And forgetfulness isn’t an excuse.

6. Praise your staff whenever it’s warranted. This is important to keep moral high, but avoid false praise because all it does is to diminish genuine praise.

7. Be honest and fair-minded. Employees will notice even the most subtle displays of dishonesty or biased behavior over a period of time. And playing favorites is a one sure-fire way to destroy the moral of your team. So, don’t do it.

When Are People Spending? Online Retail Spending Peaks Mid-Day

During this year's holiday season comscore reports that online spending has peaked during the middle of the day, driven by the heavy influence of shopping from work, which has accounted for 45 percent of all e-commerce dollars spent this holiday season.

More than half of all online dollars were spent between 9:00 AM and 3:00 PM, with the heaviest spending (26.9 percent) occurring during the 12:00 PM - 3:00 PM time segment. Nearly 10 percent of online spending occurred from 10:00 AM to 11:00 AM and 1:00 PM to 2:00 PM, making them the peak individual hour segments during the day.



Some additional findings from comscore for the week ended Dec. 9:

• Consumer electronics experienced a strong week of online sales, up 43 percent versus year ago, outpacing its 23 percent growth rate for the season to date.
  
• Event tickets also had a particularly strong week, gaining 70 percent versus the corresponding period last year.
  
• Apparel outperformed its season-to-date growth rate of 16 percent with a 22 percent gain during the most recent week.
  
• Toy sales grew just 3 percent during the past week, lowering overall growth for the season to date to 14 percent.

Evaluate Your Holiday Online Marketing Campaigns

A recent article on Search Engine Land called for online retailers to perform post mortem analyses on their holiday marketing campaigns. I couldn't agree more. The article goes on to say that, marketer's shouldn't assume that people are done shopping on December 22nd. Sure, most retailers experience a sharp decline in activity post holiday, but the 2006 drop-off wasn’t nearly as significant as in years past, and we do not expect it to be that dramatic in 2007 either. The reason? Maybe it’s the increasing effect of gift cards, or that most shoppers realize that the real deals happen after the holidays. Either way, savvy marketers should be prepared to capture post-holiday activity.



And in order to make the most of this post mortem analysis, here are a list of questions that have been recommended to accurately define how the online campaigns worked or didn't work:

• Did messaging target your customer base, data should reveal the information you need to tweak your messaging so it is more closely aligned with the language of your customers
• What were the best moving or most profitable items?
• Can you identify compatible product combinations?
• Have you aligned website promotions and product availability to influence overall merchandising strategy?
• Research competitor performance in comparison with your own history

Search engine land recommends you perform post mortem reports on your holiday campaigns. And with good reason - the holidays bring in more than 50% of the average monthly sales for most retailers. This is painstaking and probably time consuming for most companies that do their own analytics, especially during the holidays. But the results from this study will provide you with elements and capacities to improve your campaigns and set it on a competitive position as you once more launch campaigns in the first quarter of 2008.

Even Sony CEO Revamps Their Company

I was quite impressed with the way Sony CEO, Howard Stringer, approached their business. I read an article from Forbes.com, that apparently before they started innovating their products, there was a sweeping restructuring drive. Notice how first of all he started with restructuring. Before any change can be implemented. A paradigm shift is necessary for a company to actually move forward together on a different playing field. Sure he had to cut some people and re-prioritize the business in order to focus on what's core and profitable, but that's the way the cookie crumbles right?

After being stumped repeatedly by Apple's iPod and Nintendo's Wii, Sony has bounced back with PS3, saying that right now innovation will be their corner stone to be able to compete with the cutting edge technology other companies are offering.

Lessons From Chrysler's Billion Dollar Loss

USA Today reported that Chrysler will lose about $1.6 billion this year, worse than the $1.4 billion operating loss it posted for 2006, a source says CEO Bob Nardelli told a group of designers and engineers recently, and the automaker still plans to break even in 2008.

Apparently the Chrysler CEO told employees during a webcast last week that although he believes the automaker has cut as many workers as it needs to, Chrysler will continue slashing jobs if it cannot meet its goals. The company said previously it would cut 25,000 jobs, including 1,000 buyouts. Chrysler announced 12,000 of those in November, just after employees represented by the UAW ratified a new four-year contract.

It is worth noting how difficult it is for businesses these days that even such a well-known brand such as Chrysler is reporting such major losses. The way they are handling it though is quite respectable. The open communication lines and transparency with regards to what is happening and what is going to happen is far better than just laying off employees with a slight of the hand.

A rule of thumb in business strategy is that if you're not meeting top line, then you'll have to cut the bottom line. This is what they're doing by letting go of so many people. It's sad how thousands will lose their jobs, but the entire ship will sink (and everyone in it) if it is not done.

I have experienced having to let go of so many people because the business can no longer handle the cost. And it's quite painful. Nevertheless nothing can be done if management decides to do so.

Chrysler's other strategy to picking up business is a review of their existing products. Weeding out the non-profitable ones and launching more competitive brands. Chrysler already has said it will eliminate four products through 2008: Dodge Magnum wagon, convertible version of Chrysler PT Cruiser, Chrysler Pacifica crossover SUV and Chrysler Crossfire sports car. Chrysler plans to add two new products: Dodge Journey crossover SUV and Dodge Challenger sports car, along with gasoline-electric hybrid versions of its Chrysler Aspen and Dodge Durango SUVs.

There is significant cost to swallow as this is done, but if they've done their homework and market research, the newer lines should sell better compared to the products they are letting go.

(image from diseno-art.com)

Forbes' Six-Step Guide To Pricing Your Product

Here's the bare bone version of Forbes' Six-Step Guide To Pricing Your Product. If you prefer the real thing, please click here

Step 1: Can You Brand It?

Setting a price starts with a basic question: Is yours a branded or generic product? If it's generic, stop reading, charge the market rate and run your operation as lean as possible to preserve what little profit margin remains. If you think your product has unique features--a new health benefit, greater convenience, sexy style--that you can charge more for, read on.

Step 2: Do Qualitative Research

I'm a firm believer in research. Start to hone in on the right price by running focus groups to get a sense of what customers are willing to pay.

Step 3: Do Quantitative Research

You've done the soft stuff--now it's time for some hard numbers. Business intelligence is key if you want to have an edge over the competition. This step involves in-person or Internet surveys, or perhaps product trials with feedback forms. Sample questions: What price do you pay for applesauce? Would you be willing to pay a higher price for an applesauce with certain characteristics?

Step 4: Plan Your Attack

Before you set your price, decide how you want to attack the market. Will you try to hobble competitors by going low and stealing market share? Or, do you charge a higher price and capture a smaller, but perhaps more committed--and profitable--customer base?

Step 5: Pull The Trigger

Large corporations often start off with running tests on smaller target markets to determine a product's saleability. However many small companies don't have this luxury. So take what information you have, marry it with your strategy and pick your price.

Step 6: Don't Let Success Go To Your Head

Be careful: It's much harder to jack prices than it is to lower them; indeed, you could send shoppers running the other way.

If sales are sluggish, consider lowering the price--but not by too much. For consumer packaged goods, even a 1% decrease in price can lead to a 5% increase in sales, says IRI. Slash prices, though, and you could tarnish your brand's image permanently.

Take careful consideration to deciding how you would want to price your product. Consider too your company's image. Are you the classy chick in the bar? Do you want to be Starbuck's or Seattle's Best? Will you target those that shop in designer boutiques or do you prefer the Walmart discount shopper?

These factors should affect your pricing decision, and will overall drive the success or failure of your product sales.