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Fragmentation

Today's post is not so much about finance as it is about revenue generation. Many people ask why there is a clear divide between app stores, and is there really a difference. There are differences which is the fragmentation, not in the devices per se (which I'll get to a little later). The difference in app stores is more of a brand issue than a device issue. Apple has only 1 product (granted there are 3 actual devices - iPhone, iPod, iPad but they all run on the same base operating system). How is this different than Android? The difference is the operating system, as Android devices have the same base operating system (only divided by upgrades and updates - Windows 3.1 is broadly not the same system as Windows 95 or Windows 7). The profit structure has its differences under Google's Android and Apple's iOS but money can be made (or not made if you're creating the app for free use). The devices are merely a means to fill market segments by location, cost, functionality, capabilities to list a few.

So what is the moral of this story? Remember in grade school when we all had to learn about least common multiples and the like. Well, it comes into play here when trying to understand exactly why sometimes there really isn't a fragmented market, just companies segmenting the market to make that additional dollar in a "free" or "competitive" market.

We will be returning shortly...

As an effective company can cut costs by reducing redundancies, Finance Today will be returning soon as there have been few to no significant events that cannot be covered in an unique basis.

Thank you.

Dilbert–The Boss breaks everyone into groups…

 

Believe it or not, managing groups is an integral part of management in operations for the most part but also in handling regularly occurring events. The idea is that the size of a group actually does make a difference in where it is placed in the grand scheme (and by scheme, I mean organizational plan) of the company and the type of project (pure, functional, or matrix) that is being completed.

Outsourcing

What comes to mind when outsourcing is mentioned? The top three things are (1) labor, (2) cost savings, and (3) a different (usually 3rd world) country.

Only 1 out of 3 assumptions though is actually a good reason for outsourcing.  If you guessed at cost savings you are already ahead of the game. The first assumption is valid only upto the point that labor is an area where a firm needs to save money. For example, call centers are a good place to save money. The problem with going international is that now additional laws have to be followed, and regional sensitivity to culture and resources have to be maintained. Also by going to this country, if there is a problem getting the goods back or all the laborers go on strike, then that part of the process comes to a halt.

So what is outsourcing? it is simply a firm or any entity performing an activity with someone else without having to do it themselves (and of course paying them for it). Any firm or entity would do this because they figure they can get more value from doing with someone else than themselves. Much time is spent researching where to outsource and which part of the firm to outsource so it is not just a matter of outsourcing within the country but how much value can the firm get from doing this activity externally than internally.

The Markets and Monopoly

An interesting NPR article about how the current collapse of the market can be related to the game of Monopoly.

 

http://www.npr.org/templates/story/story.php?storyId=129021829&sc=17&f=1003

iGoogle

I was recently asked what a good way to have information at a glance would be. I asked this person what service they used (as a matter of how to help them with a personalized answer, not that it is better or worse than anyone else). This person replied that they have a gmail account and that is all they use. I replied that Google offers a plethora of services that allow for this. For example, Google has a page called iGoogle. This page can be setup with widgets (this is sort of where the widgets on the Android platform originated). All sorts of widgets can be added (i.e. mail, news, feeds, weather, etc.). This person then proceeded to ask if I use this service. I do as it helps to consolidate where I need to go for the various sites I go to. I have my page setup for news, feeds, calendar, and the How-To Geek. I have it setup for efficiency on what I look at regularly. Yahoo and Microsoft offer similar services which have different layouts, but can offer the same thing.

 

So you may ask what this has to do with finance. Shouldn’t this be on your tech review blog? Not this time because this has to do with efficiency and productivity, a core part of any firm. Any group of services can be made efficient once a common thread is found. Productivity basically takes this efficiency and uses it to the firms goal(s). Why should I do this in my personal life? In short, anything I read or learn about can be put to good use if the general theme behind it is understood. If I read a news story about how the economy is doing bad, it can help understand why someone is having trouble paying me. Or if I read a story on why Microsoft is having trouble in the tablet PC market where Apple is currently succeeding, I would look at the circumstances of both and realize that Apple is going after the consumer market, where Microsoft is going more for a broad business environment, though they can apply their strategy to the consumer market since they are established there as well.

In short, it is important to know what your firm can an cannot do, where it is established, and how it can ensure competitiveness through efficiency and productivity.