re. BreadTalk

Seen bubble tea, pearl mike tea? Breadtalk is at that stage in Shanghai. Here you can see bao (those white bun), “chinese pizza” (not sure what to call them) selling like hot cakes. Then it is gone.

Now in some breadtalk outlet, 10 bakers are standing in the transparent kitchen doing nothing.

Breadtalk is smart to cash their initial success and use that money. They are now transforming to be more than bread. But alas with a name like BreadTalk, they probably need to change name in future.

Personally, I feel that it is too early to say that Steve Jobs has beaten Sim Wong Hoo. The mp3 war is still too early to end.

Even though Sim Wong Hoo may have the first market share to market its mp3 player, its greatest disadvantage is that its home base is at Singapore. Steve jobs’s advantage is that its home base is at US and we all know that the highest mp3 market share lies in the US. It takes more time for Creative to establish a strong brand name in US than Apple for its mp3 player because the Americans are probably loyal home grown supporters. Similarly, recall that when Microsoft launches its Xbox initially, it takes time for the Xbox to gain significant share in the Japanese console market.

Think about it this way. Steve Job is using a “Pull” marketing strategy by promoting its MP3 as having cool style, very asethetics etc. So, what is Creative doing? They are probably using a “Push” marketing strategy by promoting Creative’s mp3 as a technically more superior product and engaging in a price cut war. My personally opinion is that Sim Wong Hoo is not an idiot. I guess he has already long anticipated that Apple would adopt a “Pull” marketing strategy. We all know that “Pull” is generally better than “Push” strategy because the former strategy can command a higher premium selling price and growing a stronger brand name. I am sure Sim Wong Hoo knows that but why is he not using “pull” but using “Push” strategy? And, Sim Wong Hoo also has a trump card – that is the recent patent sue. I know Apple also countersued Creative too for infringing patents rights. But one thing we can be sure that Creative must have anticipated a higher chance of winning the patent lawsuit, therefore they decided to react first.

So, why is Creative doing all this? My speculation is that Creative probably knows that it can’t beat Apple in the first place and from these clues, it is possible to guess that Creative is trying to “force” Apple to buy over its MP3 Zen Brand. I don’t know how much it is going to cost Apple to buy over Zen because i am not an expert in this field. But I guess the buying over of Zen Brand is definitely going to cost Apple probably billions of dollars, which I guess is more than enough to recoup any losses that Creative has and possibly earning a big profit. Selling a brand is probably the fastest way to make money and that is probably Creative’s exit strategy.

Back to this question. Why should Apple want to buy Creative’s mp3 brand? Firstly, Apple can monopolise the whole mp3 market. Secondly, by buying over the brand, it ends the price cut war. Even though Apple uses the pull strategy to command a premium price, Creative’s price cut strategy must have hurt Apple’s profit share considerably. Thirdly, by buying over zen, it means the technology as well since Creative has been claiming that it offers better technology than apple’s ipod. It will save Apple’s resources to reinvest in any new technology.

I remember few years back, we all saw Sim Wong Hoo on tv, on news, claiming how good his mp3 player is. I remember he says that if he can capture 1/3 of the market share, that is….

Creative may not be the market leader in mp3 but if it is able to become a serious contender and pose a serious threat towards Apple’s domination of the mp3 market, Sim Wong Hoo has already won the war and achieved its business objectives. As long as the profit is made for the company, who dares to say that Sim Wong Hoo is not a good leader. And, when you piece all this information together, it makes some sense- the tv show featured in the news is not for us to validate his claim but is to let Steve Job see that Creative is his biggest competitor. That’s more like a deceptive act found in the Sun Tze’s Art of War.

And, maybe when the next generation of Mp4 player begins, we see Sim wong Hoo making a comeback and aiming for the market leader… And, the speculation that Creative is trying to force Apple to buy zen is just my personal thought. It may be WRONG so do not take it as true but it is a possible scenario. However, i do admit that Creative still has a lot to do to touch up on its image, which has been covered by the rest of you here.

Lastly, bjorn, hi to u too. Good engineers don’t win the war but they are essential ingredients to winning the war. Technology don’t win the war but it is essential. Plus, there are engineers who specialises in product design by focusing on the asethetics appearance of the product. Maybe, Mp3 is a bad example but if we talk about a car. If you have the best artists to draw an asthetic appealing design but fails to understand the aerodynamics of the car, then the whole product is a failure. Engineers on the other hand, can be trained to merge both fields together – ergnomics study (appealing design) + functionality. So, engineers are very important too in my opinion.

And, to Matthew, i don’t see anything wrong with Creative offering a diverse product range compared to Apple. It offers consumers more choices. Maybe, in US, Creative’s MP3 does not sell that well. But in asia, where the purchasing powers of the consumers are vastly different, a diversified product range will cater to a wider consumer needs. Actually, in asia, the sales of Creative’s mp3 are still pretty good. My brother himself owns one Creative zen mp3. And, for production system, Ford promotes few variety, mass production to reduce costs but it was Toyota who perfected the Toyota Production System by adopting a few volume, greater variety concept in their production system. But for comparison of quality wise between ipod and zen, i am not sure cause i got no ipod… haha.

Asthetics wise and intuitive ease of use, it still needs improvement. Other than that, it functions pretty well, so no complaints from my brother anyway… Plus, the new zen plus recently launched looks pretty good too… i guess.

I realized that most VC even in Silicon Valley willing to invest in company with no profitable model like http://www.meebo.com, and many in http://www.techcrunch.com .

Why ? My inituition tell me that they invest because they hope that some rich firm will buy over them many times their original value rather than spend competing. Something like , Youtube do better than Google’s video, so VC bump money to make YouTube even better and establish a brand. Google realized a futile attempt to compete, so acquire YouTube , but now pay mulitude of times over for it.

However, it might be also true that VC will invest in firm with potential and that hope one day the firm will be acquired or go IPO.

But no matter what, the user will only benefit from these.

My observation of trend that one will can provide a basic free edition and later upgrade to premium edition does not work well. Why ?? because there will always be better firm provide better alternative.
For example, Google give 2Gb of email space, when Yahoo needed to pay subscription that doesn’t even reach that level of space.

And now look at Realplayer, the so-called, first-mover advantage. It so called premium edition is so pathetic that user end up uninstalling it ? why ? Because it make it harder to download the free basic edition than pay subscription.

It is sad, but this is reality. Sometimes a service that provides free service to user first doesn’t always end up in good state when it want to have a viable business. But at least, those first mover advantage firm may have end up wiki…. haha … talking about legacy

http://www.youtube.com/watch?v=D1R-jKKp3NA

A person that had almost face death experience most probably undergo a total transformation in thought and mindset, and understand that to live’s one dream rather than others is the ulimate goal in life.

I can say that if any service that has make significant impact, youtube should be consider one of it. Because youttube has make possible for many to contribute video that only i could dream to see and that youtube has make video viewing a wonderful experiences. In the past, service such as these are so choppy when streaming or worse, has to wait timeless download that take time and patient, not including hard disk capacity. I just hope that local entrepreneur could produce something like Youtube though it do cost a lot of $$$ and may not have a viable business model.

I am surprise to learn that youtube start as service to solve user’s needs and does not have profitable business model and yet burning millions of dollars alone every month. That is a noble and definitely commendable. I believe the better service and product come first from passionate need to solve ppl’s need first more than wanting to earn profit first.

If you want see the founder picture
http://money.cnn.com/magazines/fortune/fortune_archive/2006/05/15/8376860/index.htm

And that is exactly the type of Brand Singapore need at the moment. Not a “money-faced” brand but associated with brand that solve user’s need without expecting much return.
It just take few companies to establish a culture. Singapore entrepreneur need a dream model to start it up. Those firm will provide those catalyst.

Sim has to understand that branding is not a dollars and cents type of game. You don’t pay peanuts to get monkeys in the realm of branding. Brand equity is something that can be earned by evangelical people. Guy Kawasaki did a very good talk on this area in this talk he gave (u can download the mp3 to listen).

Sim thought that people will go for dollars and cents to mp3 players like the way how people go for PCs. He did not realize the mp3 player market is about lifestyle. That’s how Apple beat him to his game. Of course, he miscalculated that Steve Jobs is no longer that he used to be in the past. If it is 20 years ago, Steve Jobs will not let Apple products be compatible to Microsoft, but now, he is not like that anymore, and he has been making decisions which are counter-intuitive even to his own supporters (like transition IBM PowerPC to Intel chips).

Actually, thanks to him, I have a good case study of a good Singaporean company which do not know how to brand their product. If he enters into alliance with Microsoft earlier, he would have a better chance in beating Apple. Now Microsoft is also rolling their own version of mp3 or video players to take on Apple.

You are right about the organization bigger than the person. The real onus is that although Apple is synonymous with Steve Jobs, there is a powerful evangelical team behind him. For example, Steve Jobs have Sir Jonathon Ives, a British designer famous for the design of IMac and Ipod. Sim need to strengthen his team.

Most founders of Asian companies tend not to want teams, but prefer to center all the focus on themselves. The problem is that once the central person makes a wrong decision, the brand goes with it.

Best regards,
BL

Good site. I discovered this site recently while surfing around and am glad to see that there are actually people around who take an interest in startups and running a small company.Learned quite a fair bit reading the past posts.

Question : How do i submit my posts on entrepreneurship on this site?

I registered as a user but i still cannot post. I am a very pro-entrepreneurship with eyes wide open type of person. I started my company 6 years ago after working for just 8 months with a GLC. We are an career service business with online, print and events components.

Though it’s govt owned..But you have to admit it’s the only company that had the globalization effect that take place.

Nowadays, even on TV..I still saw SIA broadcasting it’s advertising overseas like nice comfy airplanes flying to different destinations..Normally ads only come locally but with VISA and MASTERCARD ads we also know it’s international/globalize inconjunction with the standardize product itself. Just like Mc Donalds..

Yes, I do agree the price are quite expensive. But sometimes they do had great deals as well due to promotions.

Actually, MAS airline is also not bad as well. Now Qantas is having a great sale on air tickets $865 to Singapore..But if you have to include tax it’s around $1200 or $1100 so it’s quite good. And I would say Royal Brunei Airlines is also not bad!!! The services are also very good. Prices are quite attractive as well. I remember once buy one full adult price get another free. And you still get excellent customer services despite the cheap airfares you paid. And also good food..

With regard for retrenchment issue, during my uni research years from what I experience from strategy games, I think sometimes they had no choice as well. Either you downsize staff or you can face greater loss..

I know someone from SIA cuz they are in the management level.Even themselves had to compromise with reduction of pay…So not just the bottom level that had been affected. Everybody had been affected which I think it’s quite fair as well.

And I do agree with you with regards to the safety of the plane. ;)

So shake it up, and see creative’s share drop further than bounce even higher.

Breadtalk is successful because it convey the image of well-make and fresh bread that ppl see through glass. It might not be taste good or better than others, but the brand still make it feel good.

When I was in Shanghai a few months back, I saw BreadTalk in one of the big shopping centres. They are doing pretty well, with the crowd going in and out to purchase bread. Perhaps, they have gotten the branding out. I am not sure whether they are established within southeast asia.

Best regards,
BL