Business strategies

Introduction Businesses have of necessity to be aware of their environments in order to remain competitive. They must always strive to maintain their strategic advantage in order to survive. This calls for the development of core competencies that would enable ensure their sustained advantage over other market players. These core competencies must be designed in a manner that they are not easily imitated and must contribute significantly to customer satisfaction. Businesses can also decide to create new markets or pursue the blue ocean strategy where they avoid the existing rivalry and create opportunities for superior performance by creating demand among a new clientele. Businesses can also opt to boost their internal capabilities in technology or even access to markets by entering into strategic alliances with selected partners. Where such alliances are carefully formed, they tend to result in tangible benefits for the partners involved. In order to ensure that the strategies adopted remain effective, it is important that such strategies and mission to broken down to actionable steps or objectives. These objectives form the basis for daily operations in the businesses. They therefore must be specific, measurable, achievable, realistic, and time specific. Internal analysis Core competencies of Virgin Core competencies can be described as the capabilities that an organisation possesses that enable them to achieve a competitive advantage over other market players (Prahalad and Hamel, 1990). The rationale for focusing on core competencies is based on the presumption that the competition in the market today not only focuses on firm’s market share, but also the ability of the firm to master its competence. Core competencies need to bear the following three characteristics in order to enable achieve a competitive advantage for the organisation: it must not be easy to imitate by competitors; it should have the potential to be leveraged to a variety of products and markets; and it must significantly contribute to the benefits experienced by the end consumer (Prahalad and Hamel, 1990). Core competencies evolve from time to time as the businesses adapt to the changing external environments. The Airline industry is among the industries where stiff competition exists between the market players. However, Virgin Atlantic Airways has proven to be tough and continues to maintain its strategic position despite the prevailing upheavals (Manning, Salter and James, 2005). Virgin Atlantic Airways is part of the Virgin business empire and is owned by tycoon Richard Brandson and is hailed as one of the most successful ventures in the group (Virgin Atlantic, 2011). It is known to provide plausible levels of customer care to its customers and have distinguished itself in that regard. In fact, its policy of offering superior service has seen it survive some of the darkest periods for the global airline industry. Some of the services that have set the airline apart from their competitors include first class category’s state of the art reclining seats; motor cycle and limo pickup services; provision of aromatherapists on board; hairstylists and even on-board massage services (Virgin Atlantic, 2011). However these services are increasingly being replicated by their competitors and can therefore not constitute core competence for the airline. The ability of Virgin Atlantic Airways to create massive publicity coupled with its strong marketing communications quality may be described as one of its most instrumental tools for competing in the industry (Manning, Salter and James, 2005). However, the main source of core competence for Virgin Atlantic Airways is its management team’s vision and approach to decision making processes (Manning, Salter and James, 2005). Although the airline has had many services on offer that could be imitated by their competitors, their approach to management has proven unique and has enabled them to maintain their strategic position through the continuous introduction of services that clients find most gratifying. The management team is devoid of bureaucracy and is a semblance of a family where hierarchy is almost disregarded (Virgin Atlantic, 2011). The top management is uniquely intimately involved in the airline’s endeavour to continuously align their operations with the emerging expectations of their clientele. Planning and decision making are considered as extensive processes that involve extensive research into the market trends and the changing social preferences among the target markets and making the choices on the appropriate approaches to satisfy the emerging needs (Manning, Salter and James, 2005). Their general approach to planning is the forward planning technique which involves a thorough analysis of the organisation’s current standing in relation to where they intend to be in a given period of time (Manning, Salter and James, 2005). This results in the establishment of functional objectives that reflect on the organisation’s vision and mission statement as well as the emerging needs in the market helping them to maintain their strategic position in the industry. Generic strategies Blue Ocean Strategy at Cirque du Soleil Generic strategies can be described as approaches to strategic planning aimed at improving the competitive advantage of an organisation. Common approaches to generic strategies include cost leadership, focus strategy and differentiation strategy and are mainly applied to markets that are already in existence. Organisations may also choose to venture in untraditional markets or adopt a strategy aimed at creating new markets that have previously not been in existence. This approach is called the blue ocean strategy. The already existing industries are termed as red oceans while non-existent industries or the unknown markets are the blue oceans (Fast Company, 2011). Blue oceans differ from red oceans in a number of ways. Firstly, the number of market players in red oceans is much larger hence stiffer competition which strains profitability as well as the establishment of certain common practices across the industries (Fast Company, 2011). On the other hand, blue oceans present opportunities for demand creation and facilitate the creation of new markets where the participating firm has a free hand in determining its practices. The growth opportunities and potential for profits is also very high. The search for blue oceans is a necessary endeavour for firms operating in continuously contracting markets where performance is under increasing pressure and where their sustained survival is uncertain (Fast Company, 2011). However, investors tend to avoid blue oceans due to lack of understanding of the concepts; a fact which is buoyed by the lack of theoretical frameworks offering guidance on how such markets can be created. Cirque du Soleil is one of the few firms that have pursued the blue ocean strategy and have reaped great benefits from the practice. Cirque du Soleil is currently one of the largest exporters of cultural exports in Canada (Fast Company, 2011). This organisation was founded by a group of dancers in 1984 and is known to have entertained at least 40 million people around the world (Kim and Mauborgne, 2011). The organisation is reputed to have attained one of the highest growth rates in the industry despite the seeming unattractiveness in the circus industry. At the time of its founding, the circus industry was characterised by stiff rivalry with both the buyer power and supplier power (performers) being very high hence limiting the profit potential for circus companies. The industry was rapidly losing its market share to alternative sources of entertainment such as play stations, home entertainment, sporting events and others (Kim and Mauborgne, 2011). The pressure from animal rights groups was also affecting the liberty to use animals in circus performances. Cirque du Soleil opted to avoid the existing market, which was mainly made up of children and therefore avoided competition completely with the other industry players. They instead decided to create demand among an entirely different clientele which composed of corporate organisations and adult customers. With its approach to reinvent the circus to make it entertaining for the new set of clients, they were able to attract higher revenues from these customers who were willing to pay a sizeable premium on the unique experience provided by the group (Murray, 2011). The group modified its performances by eliminating the use of the animals which was a source of great controversy at the time. It also toned down on the significance of individual stars and instead concentrated on providing an entertainment that made use of music, dance and athletic skill. This new face of circus proved to be more attractive to the adult customers than the traditional circus, which they had already abandoned (Murray, 2011). Organisational objectives Tesco Corporate Objectives The term objectives can be used interchangeably with the term ‘goals’ and refers to the end result that an organisation needs to achieve in order to fulfil its mission. The objectives are created with the mission in mind and become the focus for the organisation’s activities. Objectives are basically the translation of the organisational mission into actionable steps (The Times 100, 2011). They are also crucial in guiding strategy formation as strategies are aligned with the objectives at any particular time. The most common areas that organisations highlight when formulating objectives include profitability, competitive management, social responsibility, productivity, and management performance (The Times 100, 2011). Objectives need to be SMART: Specific (clear enough to ensure understanding on what an objective is about); Measurable (ease of determination on whether an objective has been met and to what extent is the diversion if any); Achievable (should be high enough to challenge the organisation but within reach so as not to de-motivate employees); Realistic (within the scope of the organisation in terms of capabilities and resources); and Time specific (it must give an indication of the length of time an objective is expected to have been met) (The Times 100, 2011). Without objectives, the organisations’ activities may lack direction since the mission statements are very broad and cannot form a decisive guide for guiding the organisation. Organisational objectives are therefore crucial to any organisation as it is central to its proper functioning. Tesco plc is the leading food retailer in the UK and has a strong global presence with over 150 stores in France and Hungary alone (Tesco, 2011b). Tesco has generated various objectives that focus on the various components of their overall strategies. They therefore have objectives relating to financial performance, customer satisfaction, learning and growth, corporate social responsibility, and others. In relation to their customer satisfaction focus, Tesco has the following objectives: to offer their customers the best value for their money and at the most competitive rates; and to constantly monitor the changing preferences of the customers by consistently involving them to establish their tastes and preferences (Tesco, 2011b). Their financial objectives have been outlined as: to provide shareholders with returns on their investment by ensuring that the organisation remains consistently profitable (Tesco, 2011a). This profitability would be enhanced by ensuring the adoption of various technologies and improvement in productivity levels. Tesco also focuses on its internal capabilities and seeks to promote learning and growth internally as envisioned in their objective to implement sound management and training practices that develop the talent of their employees while maintaining their motivation levels through the application of fair reward schemes and equal opportunities for all the employees (Tesco, 2011a). Corporate social responsibility has also been accorded significant attention with Tesco’s key objectives in that area being: to be a good neighbour, and to be environmentally responsible (EAB Group, 2011). Being environmentally responsible entails the reviewing of the business processes to minimise any adverse effects to the environment while participating in initiatives aimed at conserving the environment for the good of the larger society. Being a good neighbour entails participating in welfare programs that benefit the society. The organisation has also set the objective to use its expertise to contribute to policy formation at the national level on issues relating food security, hygiene and other important aspects of the society. As can be seen from the Tesco’s objectives, these objectives are a reflection of the wider mission of the organisation and are expressed in a manner that can guide the day to day activities of the organisation. Means and Methods Strategic Alliances at Rolls Royce Businesses use various means to enhance their strategic position in markets. One of these ways is the formation of strategic alliances with other businesses. Strategic alliances enable the partnering businesses to gain access to a foreign market with relative ease due to the connection with the local company (Mowery, Oxley and Silverman, 1996). This provides a base for interaction and the creation of relationships with the local players. Strategic alliances also help the businesses involved to tap into the economies of scale activated by the alliance where the same equipment and resources such as the marketing channels can be used to market the products of both partner firms (Mowery, Oxley and Silverman, 1996). Perhaps one of the most obvious motivations for pursuing this method is the chance for the firms to gain technological knowhow from each other. Many alliances are formed to cater for the technical deficiency of one or both of the partners. They can also pool their resources with more ease and therefore be able to penetrate the markets with more ease than when individual firms have to make the effort on their own (Mowery, Oxley and Silverman, 1996). The alliances enable the partnering firms to take a common approach in shaking off their rivals, an approach which proves to e quite effective (Mowery, Oxley and Silverman, 1996). However, strategic alliances pose a number of dangers to organisations. The process of bringing together persons from different corporate cultures often results in serious misunderstandings and a lot of time may be wasted in trying to reconcile these cultures (Mowery, Oxley and Silverman, 1996). There is also the danger of the partners becoming too dependent on each other in the long run hence losing their individual identities. Rolls-Royce is a global business which specialises in the provision of power systems and services for use at sea, land and air. It has a strong market base in over 150 countries with its manufacturing processes being conducted in around twenty countries (Al Taif Technical Services, 2011). Its client base includes about 70 navies across the world and it powers about 42 of the leading airlines, among other strategic clients (Al Taif Technical Services, 2011). One of the reasons behind the success of Rolls-Royce in capturing these strategic businesses has been their aptitude for entering into meaningful alliances. These alliances have often given the company an edge in capturing the businesses which in many cases would be due to the stable relationships between the local company and the strategic clients. Some of the strategic alliances have been formed in order to enable Rolls Royce to access technology that it may need to access a certain clientele. For instance, the alliance between Rolls-Royce and UTC Coatings Inc enabled the two companies to combine their technologies to come up with the combination needed by the US navy enabling them to win a $7m contract (Rolls-Royce, 2011). Rolls-Royce would through the alliance access the UltraCema nickel boron coating technology which had been patented by its strategic partner. Another alliance by the company was entered into with AREVA. This deal was entered into to make use of the existing trust that the UK government had in AREVA and it enabled Rolls Royce to access the lucrative nuclear project (Rolls-Royce, 2011). Another strategic alliance in which Rolls Royce was involved was one with Al Taif Technical Services. This alliance is aimed at combining technologies for the maintenance, repair and overhaul of equipment as well as providing the advantage of combining resources for research and development (Al Taif Technical Services, 2011). Global factors Global supermarket trends For sustained growth, business entities are of necessity forced to adapt to their changing external environments. These changes affect their cost structure, pricing, choice of products to offer and even provide the impetus for business entities to participate in activities which may be seen to be outside the scope of their businesses (Coriolis Research, 2010). Supermarkets are known to be among the largest retail chains internationally and are easily affected by the changing factors around the globe. The global economic turmoil that recently nearly paralysed the world economy has shifted focus to the impact of global factors on supermarkets and the steps that such supermarkets take to survive in such harsh environments (Coriolis Research, 2010). The increasingly restricted availability of capital forces retailers to choose their target markets with more caution than before where the retail chains are opting to venture in markets where success is more likely (Coriolis Research, 2010). However, the economic downturn came with crucial lessons for supermarkets who had found themselves in an increasingly competitive environment. The supermarkets now find it necessary to pay close attention to changing consumer behaviour and their preferences and lifestyles in a bid to gain a competitive advantage in the market (International Markets Bureau, 2010). The knowledge of such trends enables the chains to adapt their product mix to the consumer demands. This trend has overtaken the traditional model where supermarkets would stock a general consignment of products without considering the consumer preferences (International Markets Bureau, 2010). The strategies embraced by supermarkets in different regions vary marginally as they are informed by the tastes and preferences of the subject countries or regions (Trail, 2006). The focus on price as opposed to quality and convenience related premiums has been triggered by the economic downturn and has forced supermarkets to revisit their pricing strategies in order to compete in the market (International Markets Bureau, 2010). Pricing is therefore in line with the market average in most cases, and the supermarkets are continuously avoiding charging premium amounts that the customers may want to avoid. There is also a general trend among leading supermarkets to expand into emerging markets (Coriolis Research, 2010). This is due to the fact that the developed markets are largely saturated and offer little opportunity for growth. Emerging markets are however still unexplored and offer these chains the much sought after growth opportunities. The global trend points towards the elimination of middle level supermarkets which are being replaced by hypermarkets and small convenient stores. Supermarkets have also been heavily discounting their products in order to cope with the shrinking incomes of the average consumers (International Markets Bureau, 2010). However, this is state is temporary and the focus on convenience and quality is expected to return hence allowing the chains to adjust their prices upwards. General trends show that consumers are increasingly demanding more convenience and quality and it follows that they would soon be willing to pay a premium for such conveniences (International Markets Bureau, 2010). The global focus on sustainable environment management also features heavily on how leading supermarkets conduct their business. Most supermarkets are refining their processes to reduce the amount of waste that could adversely affect the environment and where such wastes exist, efforts are made to dispose of them in a manner that does not degrade the environment as is evident with J Sainsbury, Safeway and Supervalue Inc and Metro Inc (International Markets Bureau, 2010). The provision of environmentally-friendly outlets is fast becoming a common practice among leading supermarkets thereby conforming to the expectations of the wider society. Conclusion The various aspects of strategic management covered in this paper underscore the importance of carefully evaluated strategic management which not only focuses on the organisations’ position in the external environment but also on its core competencies. Organisations must approach their strategic planning process with utmost care and precision and should always ensure that the resultant strategies not only fit their internal capabilities but that they are also sufficient to propel the organisations to a position of strategic advantage in the market. References Al Taif Technical Services, 2011. Al Taif and Rolls Royce Sign MOU to form Strategic Alliance. (Online) Available at: http://www.altaif.ae/mediacenter/pressdetails.asp?pg=9 (Accessed 18 June 2011) Coriolis Research, 2010. Retail Supermarket Globalisation: Who’s Winning? (Online) Available at: http://www.coriolisresearch.com/pdfs/coriolis_retail_supermarket_globalization.pdf (Accessed 18 June 2011) EAB Group, 2011. Objectives. (Online) Available at: http://www.smartkpis.com/objectives/tesco-35.html (Accessed 18 June 2011) Fast Company, 2011. Excerpt: Blue Ocean Strategy. (Online) Available at: http://www.fastcompany.com/bookclub/excerpts/1591396190.html (Accessed 18 June 2011) International Markets Bureau, 2010. Blobal Trends: Grocery Retailing, Implications for Suppliers and Manufacturers. (Online) Available at: http://www.ats.agr.gc.ca/info/5430-eng.pdf (Accessed 18 June 2011) Kim, W.C., Mauborgne, R.A., 2011. Blue Ocean Strategy. (Online) Available at: http://hbr.org/product/blue-ocean-strategy/an/R0410D-PDF-ENG (Accessed 18 June 2011) Manning, D., Salter, J.E., Tuinzing, A., 2005. Virgin Atlantic Marketing Case Study. Dominican University of Carlifornia. (Online) Available at: http://www.safarigraphics.com/salterquest/portfolioPDFs/ws_Virgin_Atlantic_Marketing_Case_Study.pdf (Accessed 18 June 2011) Mowery, D.C., Oxley, J.E.., Silverman, B.S., 1996. Strategic Alliances and Inter-firm Knowledge transfer. Strategic management journal, 17, pp. 77-91 Murray, A., 2011. What is blue ocean strategy? (Online) Available at: http://guides.wsj.com/management/strategy/what-is-blue-ocean-strategy/ (Accessed 18 June 2011) Prahalad, C.K., Hamel, G., 1990. The core competence of the corporation, Harvard Business Review. 68 (3), pp. 79–91. Rolls-Royce, 2011. Rolls-Royce Alliance wins U.S Navy research contract. (Online) Available at: http://www.rolls-royce.com/marine/news/2008/080115_research.jsp (Accessed 18 June 2011) Tesco, 2011a. Retailing in the 21st Century. (Online) Available at: http://www.tesco.com/talkingtesco/retailing/ (Accessed 18 June 2011) Tesco, 2011b. Corporate Objectives. (Online) Available at: http://www.tesco.com/investorInformation/report95/corpobj.html (Accessed 18 June 2011) The Times 100, 2011. The business of nuclear decommissioning: mission and organisational objectives. (Online) Available at: http://www.thetimes100.co.uk/case-study--the-business-nuclear-decommissioning--103-274-3.php (Accessed 18 June 2011) Trail, W.B., 2006. The Rapid Rise of Supermarkets? Development Policy Review, 24 (2), pp. 163-174 Virgin Atlantic, 2011. All About Us. (Online) Available at: http://www.virgin-atlantic.com/en/us/allaboutus/index.jsp (Accessed 18 June 2011)

Mixed picture for adspend in Mexico

MEXICO CITY: Online ad revenue is continuing to grow steadily in Mexico while TV advertising has slowed over the past two years, according to new analysis. Adspend estimates compiled by eMarketer, based on figures supplied by Interactive Advertising Bureau Mexico, the trade body, and PricewaterhouseCoopers, the business services firm, have revealed that digital grew more than 30% each year since 2009 after falling from a high point of 91% annual growth in 2008. Digital adspend recorded growth of 38% to 6.4bn pesos ($486bn) in 2012, a strong year-on-year rate of expansion since the 1.9bn pesos recorded in 2008. With smartphones expected to account for 45% of all mobile phone users next year and with broadcasters planning to stream the FIFA 2014 football World Cup live, the Mexican digital advertising market is forecast to be worth more than $1bn by the end of 2014. But TV advertising has not fared so well in terms of recent growth. It recorded negative growth of -4.8% in 2011 and -5.6% in 2012, according to a June 2013 report from ZenithOptimedia, the media agency. But, despite the fall, with an overall value of $3,526bn, TV ad spend in 2012 was still almost seven times larger than the digital figure of $542.2bn. And TV advertising is expected to recover this year with estimated growth of 18.9%, taking the market to $4,192bn. Almost 95% of Mexican households own a TV compared with only 32% that have a computer and only 26% with an internet connection, suggesting that TV advertising will continue its dominance of advertising revenue volumes over the next few years. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31703&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130724

Mobile drives Irish media expansion

DUBLIN: Increasing consumer usage of smartphones and the internet in Ireland will drive growth in the Irish entertainment and media market by +4.2% annually over the next five years, according to a new study. The country-specific data is contained within the latest PwC Global entertainment and media outlook: 2013-17, produced by the international professional services company, which also predicts that the nation's global mobile broadband penetration will grow to 54% by 2017. In Ireland, improved internet infrastructure and the rollout of 4G services are expected to boost annual mobile internet revenues to €865m within five years, almost double fixed broadband access revenues. PwC said the increased reach offered by improved networks should offer mobile operators and retailers greater insight into how consumers use their products. Susan Kilty, a partner at PwC entertainment and media, said: "In Ireland it is evident that digital is beginning to displace the traditional media forms. Digital revenue is growing at a rate of 13.2% [compounded annually] and is helping to absorb a marginal decline of 0.3% for the non-digital forms of media." She added: "By creating a personalised, relevant experience to the connected consumer, businesses will benefit from greater customer insight and can harness the benefits that the digital age will bring." PwC forecast that Irish internet advertising revenues will double from €213m in 2013 to €347m in 2017 and, amid signs that mobile devices are beginning to become the primary way to access the internet, mobile adspend is expected to grow by 23.2%. With 86% of the population of Ireland regularly reading printed or online newspapers, digital advertising revenues in this sector are forecast to rise to €60m with print revenues dropping by €69m to €270m in 2017. Regarding music and movies, PwC expects DVD and Blu-ray rentals in Ireland to decline by 28.6% over the next five years as Netflix and other video streaming services are rolled out. The proportion of digital music sales is expected to rise to 64%. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31701&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130724

Healthcare tops Australian brands list

SYDNEY: First-aid products dominated Australia's annual top ten most trusted brands list for the second consecutive year, according to the latest consumer survey. The annual Australian Reader's Digest survey places Dettol, Band-Aid and Panadol in the top three most trusted brands – unchanged since last year – with Colgate ranked fifth, Elastoplast seventh and Johnson & Johnson ninth. The remaining brands in the top ten were Dulux at fourth, Guide Dogs at sixth, Cadbury at eighth and Weetabix in tenth place. In the individual categories, Hills Hoist, the Adelaide-based rotary clothes line manufacturer, was named the nation's most iconic brand, displacing retailer Dick Smith and Vegemite. Toyota won the car category while Bunnings, the country's largest household hardware chain, emerged as the most trusted retailer. Woolworths was voted the best supermarket while Telstra was more trusted than Optus or Virgin as a mobile phone service provider. Sue Carney, editor of Australian Reader's Digest, observed that top brands with a long-standing reputation for being steadfast and safe won through. "It's the brands which continue to offer quality and substance that hold our trust," she said. This was the twelfth annual poll from Reader's Digest in which Australians were asked to nominate the products they trusted the most and products that dominate their lifestyle. Other category winners included Sony for TV and home entertainment, P&O for cruise liners, Bird's Eye for frozen food, Lipton for tea and Dyson for vacuum cleaners, Blackmores for vitamins and supplements and Weight Watchers for weight loss products and programmes. Bosch topped preferences for power tools and Subway beat McDonald's and KFC for fast food. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31699&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130724

Hotel chains target Africa

LAGOS: Leading international hotel chains are expanding their presence in Africa due to the region's high economic growth rates and strong demographic trends. With more than half of the continent set to produce an average GDP expansion of 5% annually, fuelled in part by rising exports of oil and minerals, demand for business accommodation is growing fast and is creating opportunities for global brands. Trevor Ward, principal of the Nigeria-based consultancy W Hospitality Group, told Bloomberg that planned developments have risen 23% in sub-Saharan Africa and 9% in North Africa. This compared with 8.5% in the Asia-Pacific region and 4% in Europe. "There is not that much opportunity left in the more-developed markets like Europe and in the US for new hotel developments," Ward added. "Today, Africa is seen as a big blank block on the map where hotel companies need a presence in." Meanwhile, Hassan Ahdab, vice president of the African and Indian Ocean region for Starwood Hotels, pointed out that "Africa's middle class is almost as large as the entire populations of Russian and Brazil combined… the boom in sub-Saharan Africa is attracting business talent from the rich world". As a consequence, Starwood plans to increase its number of properties in Africa from its current 38 to 50 by 2016. Meanwhile, according to a survey from W Hospitality, Marriott has plans for 3,900 rooms at 22 hotels and luxury hotelier Groupe du Louvre plans to double its number of rooms in the region to 2,290. Hilton is set to be the region's largest international hotel chain, with plans for 6,230 rooms at 23 hotels. Rudi Jagersbacher, Hilton's regional president, indicated that the company's ultimate aim is to have properties in all of Africa's key cities. Hyatt, too, has plans to open hotels in cities such as Lagos, Nairobi, Accra and elsewhere, in part to attract Chinese business travellers. Peter Norman, a senior vice president at Hyatt, said: "Our strong development pipeline in China supports our expansion into Africa. By building preference amongst Chinese business travellers at home, we will encourage them to visit Hyatt hotels when they are abroad." Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31700&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130724

Private brands gain in China

SHANGHAI: Private companies have seen their brand value increase and now outnumber state-owned enterprises in the latest survey of the 200 most valuable Chinese brands. The Hurun brand list, compiled annually by the Hurun Research Institute since 2007, includes 98 privately owned companies with an average brand value of 6.97bn yuan ($1.13bn) as well as 94 state-owned organisations, such as China National Petroleum Corporation. Highlights from the report include information that Baidu, the web services company, topped the list of the most valuable private sector brands with a valuation of 106bn yuan. It has won the title for three years in a row. Internet service giant Tencent Holdings was ranked second among private sector concerns with a valuation of 88bn yuan and Ping An Insurance of China came third with a value of 69bn yuan. Meanwhile, Vancl, the privately owned online clothing retailer, witnessed its brand value increase threefold to 4.6bn yuan, the most rapid growth amongst all shortlisted brands. State-owned China Mobile topped the complete list with a brand valued at 251bn yuan ($30.9bn) and it has now topped the table for six out of the last seven years. However, its brand value was 9% less than in 2011. Rupert Hoogewerf, founder of the Hurun report, observed that effective branding is key for any company whether they are private or state-owned. "The top brands usually communicate efficiently with customers on new media platforms using innovative campaigns," he said. Although the value of Chinese brands is increasing slower than Hoogewerf expected, he said he recognised that Chinese companies have been investing more in brand-building in recent years and have also "come up with a lot of innovations, including the use of new media". However, Jason Cieslak, president of Siegel Gale Pacific Rim, the strategic branding company, urged Chinese brands to be more bold if they want to be recognised more on the world stage. He told China Daily they should "make the tough decisions about legacy names, sub-brands, messaging and thinking" and to think about design as a strategic tool. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31698&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130724

Global confidence rises

NEW YORK: Global consumers became increasingly confident about their future prospects and more positive in their spending intentions during the second quarter of 2013, a new survey has revealed.The latest quarterly survey from Nielsen, the market research company, showed consumer confidence rose one point since the first quarter of this year to index at 94, an increase of three points from the second quarter of 2012. However, the poll of 29,000 respondents in 58 countries, still registered below Nielsen's baseline of 100 that indicates neutral sentiment, meaning that the global index remained in negative territory. There were also sharp regional variations.South East Asia returned the most positive results, with seven markets reporting indices above the 100 baseline. Indonesia, with an index of 124, emerged as the country with the world's most confident consumers, closely followed by the Philippines on 121, Thailand on 114 and Malaysia on 103. China too remained robust where confidence increased two points to 110 while Japan, the world's third largest economy, reported a five-point increase to 78. Confidence decreased overall in Latin America for the second consecutive quarter, falling one point to 93, although Brazil reported a positive reading of 110. Europe's confidence index remained unchanged at 71 and confidence declined from the previous quarter in 14 out of 29 European markets. The region also included nine of the bottom ten index scores, although some markets improved, including the UK, which rose four points to 79. Venktatesh Bala, chief economist at the Cambridge Group, a part of Nielsen, told Reuters that "the European consumer is in a holding pattern and at Nielsen we see a distinct set of tiers with German consumers being the most confident, followed by consumers in the UK, France, and then Italy and Greece where confidence is both low and also falling". Elsewhere, consumer confidence in the US increased three points to 96, just below the "neutral" level. In all, 72% of US respondents said they believed they were in recession, a 5% improvement from the first quarter and a 15% change from the five-year average from 2008-12. James Russo, a senior vice president at Nielsen attributed the biggest drivers of change in the US to be record gains in equity markets and the housing rebound, which he said were impacting household wealth and spending potential. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31702&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130724

India agrees TV audience measure

MUMBAI: Broadcasters, advertisers and agencies have finally agreed the methodology for Indian audience measurement figures, after weeks of talks with TAM Media Research. The joint venture between AC Nielsen and Kantar Media Research/IMRB, one of two audience measurement firms in India, has agreed with the industry bodies that it will publish television viewership in thousands, known as TVT, Afaqs! reports. This system captures growth in audiences in absolute numbers and will be the only rating available in the public domain, though percentage figures (%TVR) will remain available for internal evaluation including planning and buying. Broadcasters will also be given access to this information, and Arvind Sharma, president of the Advertising Agencies Association of India, said: "Getting weekly TVR% is important for media planners and buyers to effectively plan and buy ad-spots." The TVT will also be provided as a four-week rolling average, which is considered to be a statistically more stable measure of viewership, especially for smaller audiences in regional language channels, English language programmes, niche programming and news. Meanwhile, the Indian Society of Advertisers welcomed the overall system as "an effective guide and monitor for ratings" in India, while the Indian Broadcasting Federation expressed "delight" at reaching the agreement. The dispute over measurement came at a crucial time for Indian TV, as major brands such as L'Oréal had been increasingly moving their ad campaigns to digital, reports Livemint. This trend has been accelerating in part because regulators have reduced ad spots to 12 minutes per hour, but also because advertisers were confused by the lack of audience ratings due to the battle between TAM and the broadcasters. "Issues between industry stakeholders have clearly accelerated growth for video on digital media platforms... it's no longer TV," said Jai Lala, principal partner at Mindshare, a WPP agency. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31715&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130726

Google makes fresh TV push

MOUNTAIN VIEW: Google has made another attempt to dominate the delivery of internet content to the living room, with the launch of a new device for streaming video and other internet services from mobiles to TV sets. The Chromecast box, launched on Wednesday at a mere $35, throws down the gauntlet to Apple, whose internet-connected TV box retails at $99, reports the Financial Times. US film rental service Netflix has adopted the protocol, known as Cast, and Google says it is in talks with other providers. Its previous attempts to access this market have been hindered by the failure to achieve such deals with TV providers, but Dan Cryan, digital media analyst at research firm IHS, said the low price makes success more likely this time. Chromecast is compatible not just with Google's own Android software, but Apple's iPhones and iPads as well, and by helping more of its web content onto TV screens the launch could provide a major boost to its core advertising business, the Wall Street Journal noted. “We have a multiplatform approach, and we go where the users are,” said Sundar Pichai, head of Chrome and Android at Google, adding that even with the low price tag he expected that both the search giant and its retail partners would make a profit. Google executives noted that YouTube and Netflix accounted for almost half the peak time US internet traffic, which they insisted proved there was strong demand for video services that could be viewed on a TV set with their new product. But the launch is a signal that the battle for the control of living rooms by consumer technology companies is hotting up, as Amazon is working on a set-top box for streaming video and Apple is also reportedly working on new television technology. Meanwhile, in another challenge to Apple, Google also revealed on Wednesday a new version of its Nexus 7 tablet, in direct rivalry to the Apple iPad mini and Samsung's Galaxy Tab. Source: http://www.warc.com/LatestNews/News/EmailNews.news?ID=31713&Origin=WARCNewsEmail&utm_source=WarcNews&utm_medium=email&utm_campaign=WarcNews20130726