September 2011

Staying on Top

 

It's tough getting to the top, and even tougher to stay there.  Ask any Fortune 500 company.  Very few achieve this distinction.

It is a topic that we hear periodically in our consulting practice, from both existing companies and start ups.  Start ups possess the entrepreneurial spirit, the level of enthusiasm that helps to propel a company at its inception, hence the questions about getting to the top. 

The topic of staying on top came up recently regarding the impact that Apple and Steve Jobs have had on the world.  There is no question that Apple is on top of the consumer electronics, mobile computing and smartphone market niches today.  The success of the iPod, iPhone and iPad are phenomenal.  They have created just what the consumer wanted and created it before many consumers knew they wanted the features that the products offered.

Whether Apple continues to stay on top under Tim Cook remains to be seen.  It is impossible to predict what would happen to Apple even if Steve Jobs remained in the CEO role. 

 

There are many variables that determine the success or failure of a company, whether it is Apple, Google, Microsoft, Intel, Kodak, IBM, Motorola, Nokia, Xerox, Yahoo! or others that at one time or another reached the top of their respective fields and remained there.  Some are still there, others are not.

 

When its very early products were released, Apple became number one.  The GUI was one that created a “must have” mentality in the marketplace as the personal computer became just that: a computer for each person. 

 

Then personnel changed at Apple and soon Microsoft created its GUI and offered the product, its operating system, to a wide range of clones, thus broadening the market for PCs considerably.  It was a time when each earnings report for Microsoft showed significant increased sales, year over year, quarter over quarter, doing so at what was an unsustainable rate.  Profits and value followed suit. 

 

Each of the Hollywood studios has been at the top at one time or another, and at times for extended periods. 

 

In our box office crazed world, there is a “new leader” each weekend as studios vie for the honor and prestige of having “the number one movie in America” or many times “ the top movie globally” for a weekend or several.

 

Will Apple remain at the top?  Perhaps it will, due to the sophisticated infrastructure in place.  The entire product development pipeline has evolved over many, many years, going from concept and development through many other stages until the product reaches our local markets.  In theory, the changes the company is undergoing currently have been thought about for a long time. 

 

What will happen over the next few years as people move in and out of the company remains to be seen.  Our employees are, after all, our greatest assets.  But, inevitably, people will move on for one reason or another and there will be companies not yet on the horizon that will develop the next and perhaps several subsequent "must have" products, thus potentially displacing Apple. 

 

It is a question in this case of succeeding at succession.  For now, I would not bet against Apple.

 

Some of the other companies noted were leaders at various times in their history.  IBM has transitioned many times over the years as it read the market and adapted accordingly.  Google came into the market with a very unique idea that propelled the company to great heights.  Microsoft changed the world by making its operating system available to the world at an affordable price, thus enabling nearly every person who wanted one to have a personal computer. 

 

As for the question of how to get to the top or certainly further along, there is not a one size fits all formula.  For starters, though, the company must have a great product or service.  Management must be forward thinking with the ability to execute the company’s plan, assuming of course, that the company has a plan.  Many don’t, but that is another story.

 

Companies also need to be able to read the markets, especially important in the consumer product realm where consumers are known to be fickle and even more so in these uncertain economic times around the globe.  This is not confined to consumer products.  It applies across the board to all manner of companies and markets. 

 

It is also quite acceptable to be a solid mid level player.  One does not necessarily need to be on top to have succeeded.  There are many different definitions of success. 

 

Some relatively new companies high on the growth curve, including Facebook, LinkedIN and Groupon, have created innovative concepts and are at or near the top of their respective niches.  Will they stay there?  Only time will tell, but history does tell us that staying on top is very difficult.

 

Trends in the Marketplace

 

Mobile Subscriptions Outnumber Toilets – TV Technology recently ran this as a headline and it caught my eye.  The article stated “More people in developing countries around the world have cell phone subscriptions than toilets, according to the International Telecommunication Union. The ITU said cell subscriptions totaled 4 billion in developing countries at the end of 2010, while 2.6 billion people lacked “access to toilets or other forms of improved sanitation.””  Often, when there is a stat that presents a clear trend, I write, “there is no looking back.”  I won’t do that this time.

 

Ad spending – under the heading of never looking back - Even though most of us do not differentiate between broadcast and cable networks as both are delivered over a pipe or by satellite, ad spending is tracked separately for each of the niches.  ZenithOptimedia reported that ad spending for US broadcast networks was forecast to reach $17.4 billion this year, with cable nets increasing to $18.0 billion. 

 

Cord cutting in favor of streaming/internet based programs - Media Daily News headlined in July Mixed Signals: Majority Not Ready For Internet-Connected TV.   The article stated, “Consumers may be as indifferent to Internet-connected TVs as they are about 3D TVs.  A new study suggests a majority of consumers, 62%, "are not connected or not capable" and "most plan to stay that way," according to Knowledge Networks.”

 

Going green – Bioplastics are the clear trend for the 21^st Century.  The eco-friendly 3D glasses with which we are involved can dramatically reduce CO2 emissions.  We see continued trends toward more and more green products.  For some of the reasons why we have this view, see Cereplast Environmental Choice.

 

Toyota was very recently listed as the greenest brand in the world by Smart Planet.  With Prius being a major seller as well as their other models and in what they do elsewhere along the supply chain, it is easy to see why.  Other auto companies such as Ford and Honda are leaders here, too.

 

Many cities, including Santa Monica and San Francisco, as well as Los Angeles County, have banned plastic grocery bags.  The City of Los Angeles is seriously considering it.  Do you bring reusable bags to the grocery store?  Soon there will be a charge on your bill if you do not.  It is just a matter of time.

 

The major studios all have their green initiatives, mostly in production and the corporate environment, more so than in distribution. 

 

Without detailing lots of other specific examples, keep your eyes (and ears) open and there will be ample evidence of the ongoing transformation. 

 

 

Track our take on Trends in the Marketplace on both Twitter and Facebook.

As for The Shindler Perspective

The 3D Summit  will be held on September 20 – 22, 2011 at Hollywood and Highland, with a great array of speakers and panels.  Marty Shindler will be moderating a panel of industry analysts on Wednesday, September 21, 2011 entitled “Winning Over Wall Street: Has 3D made the Grade?”  Discussion will focus on the growth and the challenges for the future of 3D for movies and TV in North America and the rest of the world.

 

At the semi-annual Digital Hollywood conference in Los Angeles, Marty Shindler will, once again, moderate two panels.  The first at 7:45 AM on Tuesday, October 18, 2011 is entitled Analysts and Investment: A View from the Street - From Tablets and Smart Phones to 3D TV.  Respected industry analysts will be on hand to share their views on this important and relevant topic.

 

His second panel of the day at 12:30 PM is entitled The 3D Industry: The Explosion of 3D in Feature Films and Television.  This panel is comprised of leading executives from a cross section of the 3D industry.  Check the link for the listing, bios, and for periodic updates. 

 

 

The fall Digital Hollywood will be held at the Ritz Carlton, Marina del Rey. 

 

Roberta and I wish our clients and friends the best always.

For The Shindler Perspective, Inc.

Sincerely,

Marty Shindler

Chief Executive Officer

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© 2011 The Shindler Perspective, Inc.