Agile Companies


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Underwriter of Agile Companies--ALH Capital, Inc.

Index of Agile Companies Entries:
1-25 26-50 51-75 76-100 101-125 126-150 Current Entries


125.  Retro-Brands Some brands survive despite the best efforts of their parent companies to kill them.  Fresca, the fastest-growing soft drink in the U.S. in 1992, has been in perpetual decline since then, entirely unsupported by Coke: Coke now will put a bit of advertising behind it, because it has surged in some quarters.  Ryan Adair maintains the "Unofficial Fresca Home Page," even though Coke doesn't even have Fresca on its corporate home page.  Another good example of a brand that wouldn't die is Krispy Kreme, which poked along for years; management used to confess that it had a donut so good that its managers couldn't destroy it "despite their best efforts."  See The Wall Street Journal, September 11, 2001, p. B9C.  Now is the time, we think, to search around for old gold -- that is, ancient brands -- that could be resurrected with proper care and feeding, like Brooks Brothers.

124.  Tesco Arises
Around since 1929, and in deep trouble in 1970, Tesco (LSE: TSCO) has become the food chain to watch circa 2001.  As we have already mentioned, it actually makes a nickel in its online operations.  It has added 60% to its market share in Britain since 1990, and it is now into nine countries in Europe and Asia.  Sales grew 85% in Asia last year.  It also has profitable financial services.  See The Economist, August 11, 2001, p. 53.

123.  Adecco Is Everywhere at Once
Adecco is by far the world's largest provider of temporary services.  With an almost $10 billion market value, it is about double TMP Worldwide--number two.  It has two headquarters, Melville, New York and Lausanne, Switzerland, and sports 5,000 offices in 58 countries.  John Bowmen, the British chief executive, lives in California, but is continuously on the road.

122.  Media Giant
Who would have thought that one of the best-run newspapers in the United States would lie in the orbit of Raleigh, North Carolina--a winner because it knows better than most how to own its own turf?  One hot-shot New York money manager who has long invested in all sorts of media says he likes businesses that own a franchise.  Well, he'd better buy into the Adams family--father and son--who have achieved market penetration of 112%, the highest of any daily in the nation.  (Average market penetration of all U.S. newspapers runs around 50%.)  The front page of the Daily Record is covered with local news, with the international news summarized inside.  And they get all the local news, right down to the names of all the celebrants at kids' birthday parties.   Instead of adults working out of cars, the Daily Record still has paperboys, who, we suspect, get the paper farther up the driveway: circulation contests goad the kids on, with grand prizes ranging up to $1,000.  Advertising in this newspaper can pay off, whereas elsewhere in North Carolina, your best ad is the sign you hang outside your business, especially if you're located on a main thoroughfare.  See the Wall Street Journal, August 10, 2001, p.1.

121.  Napkin Strategy
In January 1994, at Elaine's--a New York restaurant for be-seen types--New York transit police lieutenant Jack Maple laid out a plan on a napkin to chop New York's crime in half for William Bratton, New York's new police commissioner.  It called for daily hard data for each precinct, fast response to new patches of crime, and relentless follow-up and evaluation.  It worked, virtually cutting murders in half in three years.  His methodology is now used nationwide.  Our conclusion is that all strategy should be done on a napkin, and it should be based on daily, local data and fast-response to what the data tells you.  See "Guys, Dolls and Winning the War on Crime," New York Times, August 12, 2001, p. 4W.

120.  Sleeman Lager Crosses the Border
Only in business since 1988, Sleeman Breweries (TSE: ALE) now has revenues of $140 million Canadian, making it Canada's third-biggest brewery, quite a feat in a market only growing 1% a year.  Now it's coming to the U.S., where craft brews only account for 3% of all beer sold.  Nevertheless, Sleeman has been clever about its distribution agreements and about targeting slightly offbeat demographic segments.  Its "premium beer" strategy probably will get it decent market share, not unlike the Japanese invasion of our power-tool market, where invaders successfully focused on neglected professional tools.  There's always room at the neglected high end if you can create a "premium" experience.  See The Wall Street Journal, July 24, 2001, p. B2.

119.  Doing a Lot with a Little
Marketing is for people with a lot of money who don't know quite what they're selling to whom.  Linda Pezzano, a New York marketing consultant who died in 1999, simply should have put "impresario" on her card.  She could do a lot with a little.  "For Trivial Pursuit, Ms. Pezzano sent 1800 top buyers who would be attending the 1983 New York Toy Fair a series of teasing messages in the months before the event.  She also sent the game to Hollywood stars whose names were mentioned in its trivia questions.  ...  One virtue of her campaign was that it was cheap."   See New York Times, October 25, 1999, obituaries.  Ms. Pezzano, you see, knew how to create useful buzz.

118.  Easyjet Empire
From a Greek shipping formula, Stelios Haji-Ioannou is pulling Richard Branson's trick in Great Britain.  Virgin Group, based on its airline, has used the brand to build Virgin outfits in everything, including mobile phones and radio.  Now it's even spreading its wings over Asia. Haji-Ioannou's Easyjet, meanwhile, has migrated into car rentals, internet cafes, etc., having started as a Southwest Airlines knock-off at Luton Airport thirty miles north of London.  One of the new rules in branding, we think, is to create a hyper-visible brand based on a high people-contact enterprise (say, an airline) and then to net high service profits from other high-traffic activities such as rental cars, phones, etc.

117.  BP Makes Some Money in Moscow
Is this the Law of Unintended Consequences?  BP put one-half billion into Russia to get at its crude oil.  All the oil majors are having a rough time of it.  In fact, Mobil, now part of Exxon, may have gotten on the wrong side of the law, trying to play in some parts of the former Soviet Union, according to Seymour Hersch in the New Yorker.  Purely by accident, however, BP now has thirty Moscow stations on which it is making a profit.  See New York Times, July 4, 2001, p. W1.

116Research in Motion
This Waterloo, Canada company certainly has been--in motion.  See Pui-Wing Tam, "Small Wonder," Wall Street Journal, June 25, 2001, p. R4.   In 1999, RIM set about 50 "missionaries" to work introducing the BlackBerry to Fortune 500 companies, with pilot programs at 1,000 companies by the end of the year.  Thereafter, it hit Wall Street firms and media figures,  In 2000, even with little money, it began consumer ads as well as lining up lots of key partners.   It knew from the beginning that it "couldn't afford to embark on a massive advertising spree."  Oh, it's a wireless email device, in case you did not know.

115.  Risk Systems
As we've said, the rewards at the moment come from better managing risk rather than seizing opportunities.  Professional money managers are using an array of systems products to deal with volubility.  Providers include KMV (San Francisco), Measurisk and Risk Metrics (New York), Barra (Berkeley), Algorithmics (Toronto).  Deutsche Bank's db Risk Office is offered to other asset managers.   See Global Finance, July 2001, p. 52.

114.  Upheaval in Port
Hutchison Wampoa, the huge Hong Kong company container-port operator, which now has seized big stakes in Shanghai, Shenzen, Panama, etc. just won control of container operations in Rotterdam.  So far, Hutchison has gotten its arm around 14% of the world's shipping trade.  (See The Wall Street Journal, July 6, 2001, p. A2.)

Perhaps even more interesting is the increased finesse with which shipping lines are moving cargo through the ports in record time.  See "Not Sitting on a Dock of the Bay," CIO, July 1, 2001, pp. 108-116.   APL, an old San Francisco line owned by Singapore's Neptune Orient Line (NOL), doubled its earnings in 2000 on a "9 percent increase in total revenues."  This article shows how APL maintains real-time data on each container, getting certain cargo to customers on time even when the ship is late through ports that lack enough capacity.  The article also provides volume data on both the largest ports in the nation and in the world.  Of the world's five largest ports, four are in Asia; only one--Rotterdam--is located in the West.

113.  The Privacy Business
We previously have reported that privacy is turning into big business as companies try to develop codes and technology to insure that consumer data in their hands is not misused.  Every two weeks C-Span seems to air a new program relating to privacy, and we all are receiving letters from financial institutions telling us they are not giving our personal data away. Retired Columbia professor Alan F. Westin is advising a heap of companies and endless government agencies on how to keep private private.  Author of "Privacy and Freedom," his Center for Social and Legal Research is in the thick of everything, with some questioning his corporate support, which includes data collectors, financial institutions, and sundry account firms.  See The Wall Street Journal, June 25, 2001, p. A20.  For more on privacy, see CSLR's newsletter, "Privacy and American Business," Big Ideas (item 32) and Agile Companies (item 89).

112.  Rapid Prototyping
Several companies, including 3D Systems, Stratasys, and Z Corporation, now offer 3D printers that speedily create a prototype of a new product from computer-generated output.  See E-CFO, Summer 2001, p. 17 as well as the Rapid Prototyping Report.  The technology is used for everything from toys to automotive parts.

111.  Custom Golf Clubs
Ely Callaway died this week, but his innovative gold club company is up to new tricks.  It announced a "Callaway Custom Fitting Solution."  Callaway's custom carts--with a radar gun and IBM laptop--will record golfers' swinging data and tell them the optimum club they should use.  Pros can also use the swing analysis data to help golfers to whom they are providing lessons. 

Such custom fitting is coming into vogue for all sorts of companies whose standard products are tapped out and whose sales are flat.  Levi and other garment makers, for instance, are gathering precise body data through computers in order to generate custom clothing speedily at reasonable cost.

110Concept of the Corporation
Drucker did this book when he was still working his way into the pantheon of geniuses.  We wish now he'd do the book over.  At this moment, when "stock-holder capitalism" sits on top of the whole world, persons of good will are questioning the limited view of capitalism and limited view of the corporation it entails.  It is forgotten now that the "corporation" was originally a creation of the state, granted special privileges and immunities, because the state and the nation expected the commonwealth, in turn, to reap a host of benefits.  In the second-quarter 2001 issues of Strategy and Business, pp. 119-26, Booz-Allen and Hamilton's tomb-like magazine, editor Randall Rothenberg interviews Arie de Geus, management thinker and retired planning director at Shell.   In The Living Company and elsewhere, de Geus argues that the very purposeful corporation gains major competitive advantage from its sense of purpose and, in consequence, survives longer.  "Success depends on the ability of its people to learn together and produce new ideas."  In this view, corporate success comes from nurturing human capital, not catering to financial capital.  This is, we think, just one of the ways in which corporations in it for the long term need a sense of themselves that is larger than the 24-hour frame of the financial markets.

109.  Supply Chain Coordination
Thomas T. Stallkamp, once a prime mover at Chrysler, now heads MSX International Inc., a provider of auto industry design and engineering services.  Now he wants to become the operating system for auto-supply alliances, asking groups of suppliers for different parts to "form a temporary web and cede control of their supply chains to MSXI."   The promise here is that an honest-broker third party can more effectively, more equitably, and more economically manage a supply chain than an automaker.  See Business Week, June 4, 2001, pp. 30B and 30D.

108.  Running the Supply Chain
As The Economist says, there are a bunch of companies (Alibaba in China and Global Sources in Hong Kong) who introduce buyers and sellers over the Web.  But the kingpin is Li and Fung, who introduces and coordinates.  Its army of 3600 roams through 37 countries finding sources but also making sure they deliver.  See The Economist, June 2, 2001. pp. 62-63.

107.  Law Networks
Sundry small law firms have now linked together to handle national clients.   "One, the Worklaw Network, links 24 firms from Honolulu to Miami."  Increasingly, as we've said, alliances will become more important than mergers as a means of serving national and global markets.   See The New York Times, June 8, 2001, pp. C1 and C11.

106.  FedEx Can Land Them
Despite its profit probelms, born of a lack of a proper ground-delivery system, FedEx proves again and again that it is a hero of the cargo airways.  The FAA has labored for years to give us a new landing system that will unsnarl air traffic.  Clearly FedEx will do it first, since it is now testing a satellite system with its Boeing 727s that seems to work like a charm.  Combining special radio signals with the Global Positioning System, it is landing its planes on a dime.  See "FedEx Ahead of U.S. in Bid to Improve Airport Landing System," New York Times, March 21, 2001, A12.

105Forbes and Strategic Alliances
On May 21, Forbes did a strategic alliance special issue which is not profound but does contain some provocative tidbits.  For instance, in rating the 2000 alliance heavyweights (number of alliances), we find that six of the top ten companies worldwide are Japanese (the trading companies and the tech companies) while four are American.  Finally, in 2000, alliance-building became as frantic an activity as mergers and acquisitions.  Peter Pekar and John Harbison have co-authored a book, Smart Alliances, that apparently recognizes that alliances have become a favored tool for accelerated corporate growth.  Forbes claims old-line industries--financial services, forest products, metals and retailing--don't get it, with companies in these sections proudly going their own separate ways.

104.  Duck Soup
We have always told companies that mottoes and one-liners get you nowhere if you are trying to show the world who you are.  Disney led the way: Pick yourself a cartoon animal character and people will find their way to you.  The latest example comes from AFLAC, a cancer insurance company from Georgia, which happens to do the majority of its business in Japan.  Its flapping, quacky, frustrated duck has catapulted the company to national fame in just a year, helping the firm make a broader dent in accident insurance, where it has opened a strong front.

103.  Denmark Has Wind at Its Back
We call this domain Agile Companies, but it should probably be known as Agile Nations as well.  We have already told you that Singapore is a model for everybody.   Denmark is also cut from the right cloth.  For instance, we find that although the U.S. invented the windpower industry, Denmark ran with the ball and now wind accounts for an amazing 13% of the nation's power.  Danish companies dominate 50% of the $4.5 billion global windmill market.  See Business Week, April 30, 2001, pp. 126B-C.  Vestas (NYSE: VEWI.F) and NEG Micron have seen major stock appreciation, luxuriating in the 30%-plus growth in the windmill market.  A smart government has subsidized the industry in the right ways, paying high prices for actual power rather than tax write-offs for equipment purchases.  Originally, notes Denmark's BTM Consult, the Danes invested in durable equipment, rather than fragile aerospace technology.

102.  Porter on Japan
Michael Porter, Harvard's apostle of competitive strategy, is out with a book--Can Japan Compete? (Perseus, 2000)--which largely sums up what we already know.  Japan's stagnation did not just arise from financial excesses but came largely from structural economic problems, he argues.  This is rehashed in CFO Magazine, May 2001, pp. 60-66.  Somewhat more interesting is his notion that "Japanese companies are weak at strategy.  In fact, most companies don't have strategies.  Essentially, they are competing on best practice."  Of course, this happens to be true of most nations.  If the nation has a good economic strategy, then a company often doesn't need one.  But if national policy is awry, the corporate managers suddenly have to become wily strategists.

101.  Swarm Intelligence
See Harvard Business Review, May 2001, pp. 107-14.  "Social insects work without supervision.  In fact, their team work is largely self-organized, and coordination arises from the different interactions among individuals in the colony.  ...  [T]aken together they result in efficient solutions to difficult problems.  ...  Swarm Intelligence is becoming a valuable tool for optimizing the operations of various businesses."

101a. Update: But Not Groupthink
We have commented widely on swarm intelligence and its potential application to many problems in an increasingly complex world where we are dealing with larger and larger numbers of datapoints.  But we have tried to differentiate this from ‘groupthink,” where the outcomes are unreliable and unwanted. With the swarm, members are sent out in different directions and nudge the group by communicating back to the swarm individual discoveries: when group or herd mentality takes over, one or more strong members infects the group with his or her flawed notions.  The Yale Alumni Magazine, January-February 2008, pp. 59-61 treats “A Brief History of Groupthink,” pointing out some of its mechanics and perniciousness.  William Whyte, a journalist who also wrote about the organization man, coined the phrase in 1952.  Yale’s Irving L. Janis did a lot of work on the subject, his book titled Victims of Groupthink.   Isolated groups where the membership is very homogeneous and the leadership is very directive tend to wrongheaded conclusions. (4/30/08)

 

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