Quotes of the Day
Customer as CEO
In the 1994 business blockbuster Competing for the Future, C.K. Prahalad and Gary Hamel argued that the first step to competitive advantage requires executives to escape their operational focus and spend serious time developing foresight about their industries. Prahalad returns to the topic early next year, this time with fellow University of Michigan Business School professor Venkat Ramaswamy. In The Future of Competition, they argue that today's consumer, overwhelmed with products, services and information, is not the passive participant of yesteryear's business-to-consumer equation. In the emerging paradigm, the consumer plays an active role, which means companies need to create value with — not for — the customer. Thus at Deere the strategy moves from selling farm machines to all-out field management. The authors call it the consumer-to-business-to-consumer model.
Paying Up? Put It on Your Phone
The idea of using your cell phone as a credit card at a cash register to pay for a burger and fries or a new winter coat is still largely a futuristic notion in the U.S. and Europe. Yet parts of Asia are making serious strides toward mobile finance as a fully functional reality. In Japan, telecom NTT DoCoMo and financial firms Nippon Shinpan and Visa International are rolling out the second test phase of an infrared-enabled payment system, which will include 1,000 merchants and 10,000 consumers. Peddlers of the technology have gained an even greater foothold in South Korea, a cell phone — obsessed society in which wireless providers are competing for market share with hot technology. The leader, SK Telecom, has already sold 370,000 enabled handsets and should have reader technology installed at 400,000 stores by year-end. SK has only 30,000 subscribers, but, as with store value cards, the idea has viral growth potential. "M-finance is still in its infancy," says Natasha Tan, research manager at consulting firm IDC in Singapore. "But turning cell phones into electronic wallets is here to stay."
Toyota's Scion: Slick Features in A Budget Box
The back of the Scion xB looks as if it had been chopped off in a body-shop accident. But take the runt for a spin, and you may be smitten. Scion is Toyota's new youth-oriented brand, and the xB, starting at $14,165, delivers a combination of style, pluck and Toyota-backed quality that teenagers (or parents footing the bill) may find tough to beat. The xB is another reason Toyota is on track for a record fiscal year. In its first half, the six months ending Sept. 30, global revenues rose 8% to $75.4 billion, and profits soared 23% to $4.8 billion. The xB's boxy shape lends the car a roomy feel inside, and its cloth upholstery, uncluttered cockpit and attention to tactile detail raise the standard for such a low-priced car. Toyota crammed it with features: antilock brakes, power windows, air conditioning and a six-speaker stereo. Rough spots: the car's suspension jolts the spine, and the noisy 108-h.p. engine won't win many races, although it's peppy enough in city traffic. Since Scion's launch on the West Coast in June in a phased U.S. rollout, Toyota has sold more than 4,000 xBs (and more than 2,300 of the hatchback xA), exceeding the carmaker's initial expectations and suggesting that this pug's legs may be longer than they look.
- Barbara Kiviat and Daren Fonda