Archive | October 2014

How Apple became the world’s best brand

By Frederick Mordi

Apple 1

 

“Every so often, a company changes our lives—not just with its products, but with its ethos,” Jez Frampton, Interbrand’s Global Chief Executive Officer, famously said in 2013, the year that Apple upstaged iconic brand Coca-Cola, as the ‘World’s Most Valuable Brand.’ “This is why, following Coca-Cola’s 13-year run at the top of Best Global Brands, Apple now ranks #1.”

 

Coca Cola

Indeed, for 13 consecutive years, the Coca-Cola brand remained the most popular brand in the world on the Interbrand annual Best Global Brands ranking, until Apple upset the applecart, last year. Evidently demonstrating that this feat is not a flash in the pan, Apple maintained the lead again in 2014 with a valuation of $119billion, while Google came second with a brand value of $107billion and Coca-Cola placed third, with $81.5billion. IBM and Microsoft followed with brand values of $72.2billion and $61.2billion, respectively. This would be the first time that two brands (Apple and Google) would cross the $100billion mark in the 15-year history of the annual Interbrand ranking. The other brands that made the top 10 are General Electric ($45.5bn), Samsung ($45.5bn), Toyota ($45.4bn), McDonald’s ($42.3bn), and Mercedes-Benz ($34.3bn).

Interbrand

Interbrand typically uses three key parameters in judging a brand’s value: the financial performance of the branded product and service; the role the brand plays in influencing customer choice; and the strength the brand has to command a premium price or secure earnings for the company. Apple came tops in these three indices.

This naturally prompts the question: is the Coca-Cola Company, one of the world’s most innovative brands, whose products are reportedly consumed at the rate of more than one billion drinks per day, losing its acclaimed winning formula to Apple?

Even though there is no contesting the fact that both Apple and Coca-Cola evoke strong emotional appeal, the current technological revolution seems to have given Apple the upper hand for now in the race for brand dominance, which will become more intense in the next few years, as other techies like Facebook and Amazon, up their game. While the Coca-Cola Company, a beverage manufacturing company, which was established in 1892, has maintained youthful vigour after more than one century, the much younger Apple that was founded in 1976, appears to be a step ahead.

In its 2014 overview of the Best Global Brands, Interbrand also examined three pivotal ages in brand history that have reshaped businesses for the better. These three ages are: the ‘Age of Identity,’ the ‘Age of Value,’ and the ‘Age of Experience.’ Interbrand has identified a new era that it calls the ‘Age of You.’

You 2

Frampton added: “Brands that seek to lead in the forthcoming ‘Age of You’ will have to create truly personalised and curated experiences, or what we call ‘Mecosystems,’ around each and every one of us. Such brands will have to rehumanise the data, uncover genuine insights, and deliver against individual wants, needs, and desires.”

He said the consumers’ ability to interact with brands on social media, elicits instant feedback that enables companies to respond faster to complaints or concerns, noting that their reaction will help maintain or improve the reputation of their brands.

Apple has keyed into this concept and is reaping the rewards, says Carl Franklin, author of the bestseller: Why Innovation Fails. Franklin points out that Apple is not successful because it invents new categories of products since MP3 players and tablet computers and smartphones all existed before it got into the game; Apple is successful because it has redefined these products.

He said: “What Apple is good at, is redefining these products and setting the standards for how they should look and feel and how people interact with them. Product design is key to its success. Apple has a team of fantastic designers who are obsessive about making beautiful products that people will go out and buy and in many cases, are prepared to queue for ages to buy on the first day they are released. Most of all, Apple understands that user experience is the most important thing.”

Before the iPod came along, Franklin recalled that it was quite time consuming and complicated to load an MP3 player with music. The iPod, he added, changed all that because its accompanying iTunes software made the whole process so simple. He also noted that Apple found a way to work with the record industry so that music could be sold through the iTunes store for the benefit of everyone, making it the largest seller of music in the US.

Having established the success of the iPod, Franklin said Apple went on to revolutionise the mobile phone industry with its iPhones that are beautiful and easy to use. With the launch of the App store, he observed that Apple also created a whole ecosystem of little programmes produced by other companies that you could load onto the phone, like Twitter, Instagram, WhatsApp. He said all of these helped the iPhone become so powerful in what you could do with it.

He added: “What’s clever is that you have all these apps on your phone and you become so dependent on them and so used to having them it actually becomes difficult to let them go. So in a way, Apple is redefining innovation itself by redefining products that are already in the market because it simply does them better and more beautifully than anyone else. It’s not the first, but it is definitely the best.

“Apple’s challenge for the future is to balance being a big company with one that is also highly innovative—and that’s normally a characteristic you’d associate with much smaller companies where there’s a lot of freedom for creative thinking. A lot of big, market-leading companies don’t foster a high culture of innovation and not so fleet of foot that they can change easily when the markets change around them. That’s why when you think of smartphones you think ‘iPhone’ and not ‘Nokia’”

Jobs 2

The brain behind the Apple phenomenon is none other than the late Steve Jobs, who reportedly started the company in his parents’ garage when he was 20, with a friend named Steve Wozniak. They worked hard and grew Apple into a $2billion company with over 4,000 employees, in just in 10 years. But the interesting part is that he once got fired from the company he started! Many years later, when he relieved this experience at Stanford University, Jobs said it helped him redefine his focus.

He said: “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.”

During the next five years, he started a company named NeXT, and Pixar, which went on to create the world’s first computer animated feature film, Toy Story, acclaimed the most successful animation studio in the world. In a remarkable turn of events, Apple later bought NeXT, and Jobs returned to the company he once set up. The rest as they say is now history. As of May 2014, Apple had a market capitalisation of $483billion, with a total workforce of 80,300.

But in all of these, the only constant thing is change. Yesterday it was Coca-Cola. Today, it is Apple. Tomorrow, who will it be?

 

 

 

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Taking the bull by the horns

By Frederick Mordi

Horn 2

 

In the early part of the 1900s, New York Mayor, George Brinton McClellan, Jr. reportedly owned the loudest car in the city. Having acquired the recently invented car horn, he wasted no time in letting New Yorkers know that his horn was the loudest in the City. The Mayor blared the horn so loudly that it nearly made people to jump out of their skin, whenever he drove past in his big car.

A smart American named Miller Reese Hutchison had invented the device in 1908 to solve traffic problems in New York City, which used to experience traffic jams similar to what often happens in Lagos. In those days, motorists used bells or horns adapted from musical gadgets, as warning devices. But these devices had little or no effect on pedestrians. Hutchison’s horn did the trick. Pedestrians started looking in the direction of oncoming vehicles, whenever drivers honked the loud horn Hutchinson invented.

On October 15, motorists observed a horn-free day for the first time in Lagos, the commercial nerve centre of Nigeria. The initiative was the idea of the Lagos State Governor, Babatunde Fashola, who has been credited with transforming Lagos. However, unlike the New York Mayor, Fashola, is about the only top government official in Nigeria that does not use siren despite his status. The political class and the elite in the country are particularly notorious for intimidating hapless motorists with indiscriminate blaring of sirens and horns.

As is usual with change, some Lagosians complied with the horn-free day directive, while others did not. But most people welcomed the idea. Even the untamable commercial bus drivers, conformed to some degree, having been sufficiently sensitised by their union and state government officials. For good measure, some of the danfo drivers, reportedly disconnected their horns during the duration to avoid the temptation of using them, while other motorists who blew their horn did so instinctively, or when it became necessary.

Horn

 

Fashola had explained that the horn-free day was meant to sensitise residents to the harmful effects of noise pollution, which experts say is harmful to the health. Traffic is said to be the main source of noise pollution in urban centres. Scientists say high noise levels can contribute to cardiovascular diseases, high blood pressure, and increase in stress. They also say noise levels above 85 decibels (dB) could be potentially damaging if one is exposed to them over a long period of time.

Fashola added: “It is for our own good, it is for our own health, it is for our own life. It is not because Governor Fashola said so. It is not because Lagos State Government said so. It is simply because it is good for us. Doctors have told us it is for our own ultimate good.

“What we see in a way that we now choose to live is that because we live in a very noisy environment, which we can really diminish, we tend to be very noisy ourselves. We speak at the top of our voices, we play music at very high decibels and we do very many things at very high levels.”

He said the campaign against noise pollution became necessary following an avalanche of complaints that his government had been receiving from residents. Apart from reducing noise pollution, the horn-free day was designed to also improve lane discipline and minimise road rage.

Fashola

The government has expressed satisfaction with the level of compliance by Lagosians. The state’s Commissioner for Transportation, Mr. Kayode Opeifa, who monitored exercise in some parts of Lagos together with government officials, said motorists received the initiative, which is expected to be marked every other year, quite well.

In advanced countries, motorists seldom hoot their horns. While some people argue that the pitiable state of road infrastructure in Nigeria, the poor driving culture and the activities of law enforcement agents, often create a situation where motorists simply have to use their horns, nevertheless it will not be a bad idea if all begin to imbibe simple road courtesy.

Fashola appears to have taken the bull by the horns in this regard.

The amazing Jack Ma

Jack Ma

By Frederick Mordi

 

Jack Ma, the founder and Executive Chairman of the Alibaba Group, a China-based business-to-business marketplace site, and Ali Baba, the poor stonecutter in the popular ‘Arabian Nights’ tale: ‘Ali Baba and the Forty Thieves,’ seem to have something in common.

Both dreamt of greatness when they were young men and worked hard to achieve their aspirations. The fictitious Ali Baba achieved his dream when he found treasure in the thieves’ den. Ma discovered his own treasure in Information Technology. While Ali Baba’s magical words: ‘Open Sesame,’ gave him access to the treasure trove, Ma’s knowledge of the web did the trick.

Ma had always wanted to be rich and famous when he grew up. Knowing how far one can get in life with the right connections, he started to learn English, a language that he believed would open doors for him. To practice his English, Ma would ride his bike each morning to a hotel to chat with foreign tourists, who often stayed there. He would volunteer to guide them around the city for free to test his language skills. That way he improved on his English language. He fell in love with the language so much that he eventually read English in the university. He later taught English in the university before he ventured into his first love—business.

Having picked keen interest in Information Technology, Ma started building websites for some Chinese companies with the aid of his networks in the United States. In 1995, he founded China Yellowpages, which is said to be that country’s first Internet-based firm. He later managed an IT company set up by the China International Electronic Commerce Center, a department of the Ministry of Foreign Trade and Economic Cooperation. He resigned from the company to found his own business from his small apartment with an initial capital of $60,000 in 1999.

It is pretty obvious that Ma had read a lot of ‘Arabian Nights’ tales while learning English as he named his company Alibaba. The Alibaba Group is now a holding company with nine major subsidiaries. On September 19, 2014, Alibaba, which is often referred to as ‘China’s eBay,’ made history when its initial public offering (IPO) on the New York Stock Exchange (NYSE), was ranked the world’s biggest IPO. The listing greatly boosted Ma’s fortunes. Bloomberg puts his current networth at $26.5billion. In just 15 years, Ma has grown to become the richest man in China!

A shrewd businessman, Ma is not resting on his oars. He is spreading his tentacles to developing countries such as Nigeria and the Philippines that have infrastructure deficit. Alibaba’s proposed entry into Nigeria, could create serious competition for top local players like Jumia and Konga.

Despite his larger than life image, Ma mixes with freely with his workers, breaking hierarchical and social barriers. For instance, he reportedly presides over mass weddings of his workers at Alibaba headquarters. This year alone, he has married about 700 couples that work for him. When asked by a Western journalist why he does what most CEOs in other climes would find quite absurd, Ma quipped: “They should learn and they should make their employees happy.”

Ma also has plans to reinvest the $3billion he set aside from the IPO for philanthropy in environmental and educational projects in China, as part of his contributions to the society. The man who once made $20 a month, taught himself English, and started a multi-billion dollar company from home, added proudly in a book: “I never had one day of education in the United States. I’m 100 percent made in China.”

Ma has won a number of laurels in recognition of his contributions to the society. A few of them include his listing among the “25 Most Powerful Businesspeople in Asia” by Fortune in 2005, Businessweek’s “Businessperson of the Year 2007,” and “Time 100 Most Influential People in 2009. He made the Time list again this year.

Summing up his impressions about this eccentric Chinese entrepreneur and philanthropist, Adi Ignatius, former Time senior editor and editor-in-chief of the Harvard Business Review, was once quoted as saying: “Meeting Jack Ma, you might be forgiven for thinking he’s still an English teacher. The Chinese Internet entrepreneur is soft-spoken and elflike — and he speaks really good English.”

Indeed, the amazing story of Ma shows how far one can get in life with determination. He turns 50 on October 15.