New legislation required for future online transactions?

In the last weeks of April, the largest cyber attack ever took place when criminals successfully hacked into Sony's two online gaming networks, PSN and Sony Online Entertainment. Financial details of millions of online customers worldwide were extracted during the cyber attack.

As an immediate outcome of this disaster, Sony faced several lawsuits. Also on a broader level, this disaster has provoked drastic consequences. In the US, Republican Mary Bono Mack, who heads the Commerce Committee's Consumer Protection Panel, said she would introduce a new bill. According to her and others, the existing legislation falls short in obligating companies to secure sensitive information and to timely inform clients about such security breaches. Because more and more people become active online purchasers, large online companies such as Amazon, Sony and Apple contain vital financial information of an increasing amount of people, to such an extent that legislation should become updated to make companies safeguard this valuable information. Not only is an increased security needed, but also concerns about privacy and the potential trade in personal data should be considered.

Does this security breach mean that online consumers should doubt the security of their online transactions on all e-platforms? Are iPhone users OK with the fact that Apple can track their users? This matter can also be applied for companies; should companies which purchase online services such as cloud computing also be worried?

Balancing the retailer - manufacturer dynamic

As global retail chains increase their presence in the Asian markets, analysts question whether the battle for power between brand manufacturers and large retailers will also be fought here.

If pressure from retailers and their private labels continues on brand manufacturers, what are potential moves for manufacturers to alter a possible gloomy outlook of retailer dominance?

Create your own distribution network

If the mass channel becomes difficult to compete in, leverage your dependence away from that channel. Go in-house and target your customers directly. Using the franchise model is a relatively easy way for a quick expansion. McDonald’s uses this method to quickly expand its presence in new markets.

Engage in e-retail

Explore this as a serious option. Online retail has grown at a tremendous rate and there are no signs that this trend will change over the next years. Amazon, for example, has known an enormous success and has recently set up plans to start a free weekly home delivery service.

Provide your customers with a shopping experience

Don’t forget that shoppers see shopping as an important leisure activity. Focus on providing your clients with the best attraction in your category section in the supermarket or in your shop in the shopping complex. Apple experiences a lot of success in this way: shoppers can test and try Apple products, attend workshops and ask for advice from Apple ‘Geniuses’ about all kinds of products. Make your products stand out from the rest by experimenting with creative packaging, creating your own shelves, sample tastings and introducing innovative products. In this way, you essentially force the retailer to stock your products.

Be innovative

Many large brand manufacturers have spent decades creating an emotional brand value. Nowadays, as shoppers are more than ever aware of the huge amount of options they have, focus should shift towards creating innovative products and marketing them accordingly. Knowing how your shoppers shop and offering them a quality product will generate repeated sales. This focus readjustment to products can potentially prove to be effective against private label competition.

Cooperate with retailers

Work together and search for win-win situations.  Retailers and manufacturers are in it together to sell products. Retailers need brands in their shelves to create their own brand image. Look for symmetries between your brand and the retailers’ brand and establish safe long-term contracts to secure that collaboration.

Take these 5 guidelines into consideration and question yourself what they practically mean for your brand. We need to remember that the emergence of mass retailers is an effective channel for brand exposure and reaching your end customer, especially in the Asian markets where infrastructure is still developing.

A Tale of Two CEOs

Recently, there have been two very good examples of the perceived importance of CEOs: Steve Jobs' dealing of the iPhone 4's antenna issues (not to mention the way he has turned around Apple since he re-joined them over 10 years ago) and Tony Hayward's imminent departure from BP are two examples that seem to suggest that a CEOs actions can make or break a company. While the example of Jobs is clearly that of a CEO having a positive influence and Hayward's is an example of the negative influence of a CEO, they both suggest that a single person, at the top of a company, can have a disproportionate impact. The question that then arises is - is this true or not? Is Apple's success due to Steve Jobs? Is BP's failure Hayward's fault?

The truth is that it is impossible to say how much of a company's situation (positive or negative) can be attributed to factors associated with its CEO. Is a company's success attributable to its CEO or merely a result of circumstances? While, for obvious reasons, it should be impossible to conclude how much of a company's situation is directly the result of a CEO's actions, it seems that everybody has concluded that the role of a CEO is of paramount importance - the public, which has been demanding Hayward's head ever since the spill begun; the boards that decide to pay CEOs vast amounts of money; and shareholders who often make investment decisions based on management teams.

The importance of a good CEO and management team is undeniable but what is often ignored is that successes (or failures) that are sometimes attributed to the company's leader may simply be a result of context rather than personality. Will BP be better able to clean up the Gulf and its image now that Hayworth is no longer there? Are people willing to buy the iPhone 4 in spite of its call-reception problems solely because Jobs says that it is not that big of an issue? I, for one, am not so sure...

Anntenagate

While Apple is seen as a company that produces great, stylish products, it has seemed (in the last decade or so, at least) that what Apple represents is more important than the products it manufactures and sells. The case of Apple's relatively recently released iPhone 4 is an example of this: it has becomes Apple's most successful product launch ever in spite of the fact that what apparently makes it so great is the fact that it finally encompasses several features that competing phones have long had (removable memory, multi-tasking applications, etc.). There has long been a feeling that Apple is in an enviable strategic position in which its superb marketing and its easy to use products have been enough to trump competition and build an enviably loyal consumer base with which it is able to fight off market forces that companies are normally weary of.

The highly publicized issue regarding the antenna of the iPhone 4, which was addressed by Steve Jobs in a press conference on Friday, will surely represent a formidable test to Apple's position. Regardless of whether the issue with the antenna is as real and cumbersome as has been reported by product review publications or as normal as Jobs made it out to be, it will be interesting to see whether it will have a discernible impact on sales as the iPhone 4 is released in new international markets in the upcoming weeks and months.

The iPad and Apple's strategy

Since January, Apple fans have only had one thing on their mind. The subject of their dreams finally became a tangible reality for those in America on Saturday, April 3rd when the iPad was officially launched. While reviews are still coming in from all angles and users in general seem to be far from certain about the iPad, investors and analysts seem almost unanimously in accordance that the iPad is good news for Apple.

Pre-launch reports suggested that Apple's manufacturing partners expect to ship 2.5 million iPads between March and May, many more than the previous estimate of 750,000 units during the same period. It is because of estimates like these that investors are so keen on Apple, doubling Apple's market capitalization in the past year, driving it past the likes of Google and Walmart and at US$214 billion, making it worth more than every other American company other than ExxonMobile and Microsoft.

Because of an array of reasons, most of them rooted in practicality, it is readily accepted that a company's stock price should be used to gauge the success of that company and its strategic decisions. Apple's incredible recent performance in the stock market could be seen as affirmation of its strategy, which has wildly differed from that of many other players in the industry. While Silicon Valley has tended towards a culture of greater openness, Apple has maintained a stranglehold on its products, deciding exactly what kind of content can be used on them. The question that arises from the varying success that these divergent strategies have seen is which one is most representative of the way the industry will look in the future? While the answer is obviously far from certain, it may be that there is room for both strategies, even if each one's success is weighed in terms of their stock value: if Apple is a good example of maintaining control over its products, Google can be offered as an example of a company leaning the other way - Apple is trading at 23 times its profit from the past 12 months, Google's price-to-earnings ratio is 28.