Posts by: James T. Berger
Reed Hastings, the CEO of Netflix (NFLX) has cemented his position on my Hall of Shame. Whether hubris (outrageous arrogance) or stupidity, Netflix has taken an ill-advised price increase and transformed it into a runaway train that threatens to jeopardize the company. The story began when Reed Hastings and his management team, after doing apparently no market research, decided to raise their prices by approximately 60 percent. This action was taken amidst a continuous stream of record earnings, customer loyalty and a growing customer base.
More In a marketing blunder that rivals Coca Cola’s (temporary) abandonment of its original formula in favor of the sweeter “New Coke,” Netflix (NFLX), despite its incredible success and customer affection, decided to raise its prices 60 percent. Stock tumbled 19 percent. One million customers instantly abandoned Netflix. Was this incredible greed, stupidity or just plain ignorance?
More A number of years ago, I was contacted by an attorney who was representing an inventor. It seemed that inventor had created a universal cap for an automotive water heater. This cap could work as a replacement for any water heater.Like most inventors, this one happened to be mentally long on technical expertise and mentally short on the realities of the marketplace. Also, like many investors he was working on a shoe-string.
More The 2011 graveyard of dead icons might get another — Eastman Kodak. This 131-year old mainstay of Corporate America is struggling to survive. It recently posted a much higher than anticipated loss and lower revenues. It continues to struggle from selling film to selling digital camera and printers.
More While the GROUPON model — the idea of getting a $50 meal for $15 — is clearly compelling to consumers, does it work for the retailer?
More The May 16 issue of Harvard Business School’s “Working Knowledge” carried an intriguing article entitled “What Loyalty? High-End Customers are First to Flee.” The article goes on to discuss the work of Prof. Francis X. Frie and doctoral student Ryan W. Buell. The premise of the research simple states that customers that businesses believe to be their best and most loyal are likely to be the first to cast you aside when presented with a challenger of a firm’s heretofore superior service. It’s a real kick in the groin to those companies who believe they have invested heavily in high levels of service for their best customers.
More Harvard Business School Prof. Clay Christensen notes the extreme difficulty in creating successful new products. Each year approximately 30,000 new consumer products enter the marketplace and 95 percent of them fail. How then can product developers find that needle in the haystack?
More The pattern is pretty similar: the erstwhile entrepreneur usually has a wonderful idea for a money-making business. Often they have done enough research to determine that their idea is unique and they haven’t found anybody else doing precisely what they have in mind. They are excited about their concept and seek advice on how to take it to the next step and go into business for themselves. Here is some of the advice I usually hand out to these entrepreneurs.
More In one of the most turbulent and bizarre weeks on Wall Street in recent memory, two of the most important indicators of the future of American business announced their earnings and quickly took a U- turns south. The two companies are Hewlett-Packard and Wal-Mart. Read why.
More It now appears that Border’s and Blockbuster will get their life-saving transfusions of cash and will live to fight another day. As P.T. Barnum once said: “There’s a sucker born every minute.” Neither of these companies deserves to survive.
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