Cash is the enemy of creativity!
The Founder and CEO of King of Shaves, Will King gave an engaging and dynamic presentation to a large audience of economics and business students at our Entrepreneurship Society last night. The UK sales figures for the new Azor razors are quite remarkable and are testimony to the impact that this challenger brand is having on a monopolistic/duopolistic market. In the past four weeks in the UK KoS has sold 107,000+ Azor system razor handles and 602,000+ Azor Endurium cartridges.
Conventional MBA theory would suggest that the barriers to entry are just too high for a new firm to dislocate and disrupt the cosy market power of Gillette and Wilkinson Sword. The razor remains of the most patent protected products in the world and the billions of blades sold each year (at profit margin of over 90 per cent) represent an enormous cash cow for the US shaving giants. But easy cash can often stifle genuine creativity. The momentum of passionate and persistent challenger brands who truly understand the web and who talk to customers in a different way can make a big difference. The big Mo is with King of Shaves and it is easy to see why!
Will reports on his visit here
Our next meeting (Thursday 12th November) focuses on global economics and is with Paul Donovan, Chief Economist of UBS.
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Windows for a new generation?
It seems that Joseph Schumpeter’s process of creative destruction is still going full throttle ahead, with Google’s announcement this week of a operating system (Chrome OS) to rival Microsoft’s dominance through Windows.
read more...»Thomson-Reuters and Bloomberg Duopoly
The Lex column in the FT today considers the outlook for the news wire services run by Thomson-Reuters and Bloomberg. I couldn’t function without my EcoWin service - it is invaluable to be able to call up data on virtually anything when teaching in the classroom or when preparing an article or student handout. The market for news wire services is basically an oliogpoly. And economies of scale really matter in this industry given the dominance of fixed costs in providing real time information services to subscribers. How will Bloomberg and Thomson-Reuters be affected by the downturn in the financial services industry?
Bloomberg has reported a fall in the number of Bloomberg terminal subscriptions - they are down by 2.5% from a subscriber base estimated at 300,000. Terminal sales account for about 85 per cent of Bloomberg’s revenues and each can be rented for $1600 a month!
In a world of great financial and economic uncertainty and incredibly heavy newsflow one might expect the demand for news wire services to be fairly recession resistant. But the collapse of many hedge funds and steep cutbacks in employment in other areas of financial services is having a negative effect on both news information companies. Is a price war in the cost of renting a terminal imminent? Or will the two giants continue to compete in non-price terms? The latter is more likely - just recently Bloomberg announced it has added Associated Press to its service - offering yet more breaking news for subscribers!
Blade Runner
Changing your razor blade is no soft touch decision. After years of teaching my old three-blader to recognise and traverse the craggy features of my cheeks and jaw (I prefer to shave without a mirror) I took the plunge last week and swapped for one of the new Azor razors from King of Shaves. The Azor is the first British designed, engineered and manufactured razor in over a century and it was launched last June in a bid to win a share of the £315m annual sales of razors in the UK alone in a duopolistic market dominated by Gillette and Wilkinson Sword.
read more...»Cross elasticity: Demand for new aircraft
Over twenty airlines have gone bust since the price of aviation fuel started to climb and the turbulence in the global aviation market is likely to lead to a fall in demand for new aircraft according to a report in today’s Times.
read more...»Search engine market heads towards duopoly
The internet search engine market is moving inexorably towards a duopoly and that process has been accelerated this week with the news that Ask (formerly Ask Jeeves) has abandoned plans to compete with Google and Yahoo and switch instead towards providing search advice for its growing band of female internet devotees.
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