On Sunday, 12 November 2017 at 10:18:09 UTC, Tony wrote:
But those humans at the top, working for public companies, are monitored by a board and stockholders who place "making money" as the main, and normally only, measure of their job performance.

Sure, when you get a leader that is weak on vision then he or she might opting for milking the customer base to satisfy stock owners and over time erode support… So there most certainly can be radical changes when the original «gründer» or a strong «visonary» is displaced. I think it would have been very difficult to displace Steve Jobs though.

You could probably make the same argument about IKEA. As long as the original vision is strong (good value affordable-DIY furniture) then it will be difficult to displace, with weak leadership that could erode and profits would outweigh vision and they would erode their brand (what-we-are-all-about).

"growing and retaining market share" is a part of "all about making money", to me. My definition of "not all about making money" is when a company does things to benefit the environment or citizens or employees that they could have legally avoided, which gives them lower profits than they would have had from the other course of action.

It all depends. Are the stock markets fully rational? Probably not, many invest based on what they think other investors will like and not by analysing objective measures of profits. Some companies are not even on the stock market (i.e. IKEA is a foundation). Will stock markets only reward companies that have good objective profits to show to or will they also reward companies that have low profit margins but are insanely big?

IBM were insanely big in terms of market dominance. Silicon Graphics and SUN were big in high-performance computing. Where did that go? There is a perception that being big will necessarily mean large profits in the future. That may be the case, but it could also mean that you've got a juggernaut that is difficult to steer…

However, I think it is very difficult for a company over time to retain a strong brand vision if they only care about short-term profits. With weak leaders that are not capable of projecting visions then the share owners will take control and perhaps send the company in the wrong direction… With good communication of strong visions it is harder to get a majority behind such changes.

I see Amazon as foregoing profits now for growth - and also wiping out the competition - in order to reap massive profits in the future. At least, I haven't heard of them foregoing profits in order to benefit employees, citizens or the environment. Their stock price has a very high valuation (PE ration of 285.1), reflective of investors expecting massive profits in the future.

Right, but how rational is that analysis? I find better deals and better products on dedicated netshops. If Amazon controlled the search applications, then it would look more certain. But as long as there are free price-comparison applications… Who knows if being that generic will be an advantage.

E.g. is it conceivable that Amazon could beat IKEA? And will people in the future buy physical books, music or movies? What is the long term market place for Amazon?

(I like Amazon for convenience though.)

That is what I see as the Apple way of doing things from their beginning back in the late 1970s. They make premium and/or unique products and then mark them up more than anybody in the industry. Their products have always been unique with regard to the OS (except for a year or two when they allowed Mac clones) making the situation that no other manufacturer can offer an identical product.

Sure, but Steve Jobs understood that they should try to make their products available on the grass-root level also. So they made a line that was affordable enough for people to buy for school class rooms and teenagers. Those are future customers, so even if you don't make large profit margins it is a good investment. iOS is a bit generic and identity-less compared to say MacOS.

Current Apple management does not understand that and schools get good deals on Windows PCs instead…






Reply via email to