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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Caffeinated stimulus to demand
Coffee shops seem - by and large - to be surviving the recession and, in many cases thriving. The number of independent coffee stores has grown by more than 7% in the last year. Across the country hundreds of new stores have opened. This doesn’t make coffee an inferior good - whose demand rises as real income falls. Instead there are stronger forces at work, for example the rise of the nomadic entrepreneur who prefers to work away from expensive offices. Hugh Pym provides an overview of the strength of retail coffee demand in this piece from BBC news. London has the highest concentration of coffee stores in the UK followed by Edinburgh.
Not every brand is enjoying the same performance. Costa Coffe which has 974 stores in the UK has reported like-for-like sales growth yesterday of 2.5 per cent in the six months to the end of August.
Caffè Nero, which has almost 400 UK outlets, is believed to be trading at a similar level to Costa, although Starbucks has like-for-like sales down by an estimated 4.5 per cent to 5 per cent in recent months. Brand fatigue in action.
Running an Entrepreneurship Society
Several colleagues have asked me to provide a brief overview of how our school Entrepreneurship Society is run. We don’t offer any formal examined courses in business and management at our school although we do have quite active Young Enterprise groups in Year 11. Around 40-45% of our year group opt for AS Economics in Year 12, 20% also take AS Politics.
Kindlenomics
Amazon has announced that it will start shipping the Kindle e-reader in the next few days. Leander McCormick-Goodhart is doubtful about whether this spells the end of books. The Kindle device is part of an increasingly contestable market space whose size is set to rise sharply in the months and years to come. I have added a few links to Leander’s blog post. According to Chris Nuttall in an FT blog last month “there are now more than 45 e-reader models available worldwide, according to E Ink, the dominant technology provider for their displays.”
read more...»Explaining Creative Destruction
Leander McCormick-Goodhart provides an overview of the concept of creative destruction
read more...»There is something in the water - the story of V-Water
The market space for enhanced water is getting crowded! Sales of ‘smoothies’ are down by more than fifty per cent this year but the volume of enhanced water bottles being bought is proving more resilient to the recession. And the growing amount of shelf space in the supermarket aisles given over to the likes of Firefly, Vitamin-Water, Just-Juice, Vitsmart and V-Water is testimony to the high margins these products generate. Chris Coleridge, co-Founder of V-Water gave a relaxed, entertaining and thoughtful presentation on the growth of his business to the Eton College Entrepreneurship Society on Thursday night. A large audience - fortified by a generous sample of the six flavoured drinks on offer - grilled Mr Coleridge on his business after he had taken time out to explode five myths about start-ups.
read more...»The boy who harnessed the wind
This fantastic true story of boy’s dream to improve the standard of living in his village in Malawi is both inspiring and full of good economic examples (and therefore a winning combination!). William Kamkwamba’s family had to pull him out of school in Malawi as they could no longer afford the £50 annual fee; however, he continued to use his local library to study science and set out on a project to use items of junk and waste to build a windmill in order to bring electricity and running water to his village. There are some lovely examples here relating to development in terms of grassroots approaches, some of the problems faced by those living in developing countries, the positive externalities associated with education, alternative measures to tackling climate change as well as an inspirational entrepreneurial story. I for one will be buying the book telling the story of this young man’s vision.
How to start the next Google or Facebook
Victor Seidel, Fellow of Trinity College, Oxford is speaking at our Management Society on Wednesday evening - if any colleague would like to come along they are more than welcome. The meeting starts at 8-45pm in Upper School, Eton and lasts for an hour.
A reminder too that Chris Coleridge, the founder of V-Water .... a business that is operating in an increasingly competitive market space with the likes of Vitamin Water and Juice Doctor - is speaking at our Entrepreneurship Society on Thursday night - again starting at 8-45pm. Teaching colleagues and their students are welcome.
Chris Coleridge at the Entrepreneurship Society
On Thursday 1st October, Chris Coleridge is speaking at the Eton College Entrepreneurship Society at 8-45pm in the Egerton Room. The business has a great story and, as always, the Q&A will be lively and unpredictable! Teaching colleagues are extended a warm welcome to this meeting which lasts one hour. Please if you are planning to come.
Keynes and Entrepreneurship Meetings
Our programme of speakers for the new term is nearly complete. As always a warm welcome is extended to any colleagues living in the vicinity who might want to come to a meeting and perhaps bring some students. As regular visitors will know, there is no formal ticketing but it is always helpful to know who plans to come so that we can organise car parking and get a feel for numbers.
Here is the programme
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