Space Travel and Virgin’s descent into Dubai

With Virgin flying into Dubai to promote their new route to Dubai, Richard Branson also had something up his sleeve for the region. There have been immense line up’s for the new Virgin Galactic Spaceship which has attracted over 157, ‘space-explorers’, who have paid around $13 million for a mere 5 minute ‘weightless’ experienced in space. Speaking to the press about the space experience, Richard Branson’s motive was not only to promote the future Virgin route through Dubai, but also to promote the space travel since it faces stiff competition, ‘Space Adventurers’ who currently offers the same experience at half the price in Ras-Al-Khaimah Space Station.

Using Porter’s forces for the analysis of this article, it shows that barriers to entry did not exist since the concept of space travel is relevantly new and yet to be launched by either of the groups till 2008. Therefore, till that time, anyone who could enter and win the crowd’s confidence would be successful in this matter. With respect to rivalry in this region, till now there are only two players, Virgin and Space Adventurers, from which the latter being the lower priced. Customers play a very important role in this matter. With the amount of money they are willing to pay for just 5 minutes of space experience, they are ready to accept the dangers and hazards if anything, God forbid, might go wrong. Therefore they have a great power to determine the amount they are willing throw for such an experience. There is no chances of a substitute playing a role here since the only substitute with regards to space travel would be choosing ‘not to go’ at all! There is also no big threat of a potential entrant since Virgin’s Galactic Space travel is co-sponsored by NASA and therefore, them being one of the major players in the Space Industry would only have to worry about teams from say Russia, who would be interested to open their offerings in Dubai.

Link to the article: http://www.gulf-news.com/business/Aviation/10029328.html

Dubai Dealings – Who gets the ports?

In a current article posted on “the daily” website stated the controversy over the ownership of US ports by Dubai World. With United State’s concern over terrorists accessing the country, UAE does not figure it would be much of a big issue. Currently, Dubai World decided to hand over the ownership of the ports to a U.S. based ports authority. Having claimed that, UAE also holds ground about reconfirming that it is still a strong ally of the U.S. in battling out the terrorists and diminishing every difference between the two countries. The article points out some interesting points about the threats that UAE had been receiving in the past and alongside working in this hostile environment as one of the most moderate Arab countries in the region.

The author of the article points out one very interesting point, in it he states,

“The issue of whether or not the UAE should be allowed to manage U.S. ports highlights many of the paradoxes involved in fighting al Qaeda in the Middle East as well as the dangers of over-simplifying or mischaracterizing U.S. allies in the region. The UAE has been a valuable U.S. ally in the areas of both military cooperation and counter-terrorism and should be rightly recognized as such. Yet it also faces a number of serious problems with regard to al Qaeda infiltration. The UAE is by no means the only Gulf state dealing with this issue, but it is currently the only nation that is seeking to manage major U.S. ports. It is by no means unreasonable for U.S. policymakers to seek strict assurances that these concerns will be rigorously addressed by the UAE before allowing one of its state-run corporations to manage such a sensitive and vulnerable aspect of U.S. infrastructure”.

As we all know that there was a huge out roar in the Congress about the U.S. port takeover bid by Dubai World, it was a day of huge relief when Dubai Ports World authority had given a green signal to the U.S. government about its decision of not taking ownership of the ports. However, in the above stated comment by the author of the article, it is clearly evident that U.S. knows about the great advantages that it could cash upon with Dubai Ports World taking control of the U.S. ports. It seems as if the major concern frustrates the U.S. politicians who will be running for Presidency in the next election, especially those who are running against Hillary Clinton (not forgetting that Bill Clinton loves it out here in Dubai!).

Looking at the whole situation from the eyes of Hamel’s framework, Dubai Ports World clearly wants to differentiate itself from other port authorities in the World by allowing easier means of movement of goods from the U.S. in to the U.A.E and vice versa. It could also play an important role as a hub between two other delivering countries, where Dubai Ports would not have to store large amounts of shipments in their ports in UAE and rather have them delivered off from the U.S. ports to the nearer destination in North and South of America. This would save time and money to the businesses in the U.S. and U.A.E.

"Microsoft Launches Revamped Search Engine"

Microsoft Launches Revamped Search Engine
By ELIZABETH M. GILLESPIE, AP Business Writer
Write Up by: Bilal Qureshi

An article posted on the Yahoo news page mentioned the release of Microsoft’s new search engine. It stated the complexity and time disadvantage associated with the old search engine, giving Microsoft the urge to revamp and re-launch a newer, faster and much efficient search engine. Windows Live Search, as the search engine is called promises to give its users fast search speeds and controlled search results along with other design features that other websites currently do not possess.

The software giant is piling its internet based services and products with its highly selling software in order to gain a bigger market share amongst the internet based firms. Other companies however, which specialize on internet search engines and services such as Yahoo and Google are not restricted from any aspect of competition since they are the major market leaders. They specialize in this form of business and Microsoft may find some difficulty to compete and to attract the users of Google and Yahoo. However, through changing the structure of generating search results, which is through asking questions, Microsoft aims to put pressure on Google. Hence keeps the potential to attract Google’s customers.

According to Barney’s framework, the question whether Microsoft can create value for its customer, or not, is to be considered. Since Google and Yahoo add up to hold about 70% of market share with Microsoft holding 11%, the idea of whether Microsoft can drag a big chunk of their customers into their market addresses the notion if it provides greater value for its customers. Where basis of differentiation is concerned, through Microsoft’s promise of delivering faster search speeds and better design specifications, it surely differentiates itself from its competitors. But where imitability is concerned, Microsoft itself is imitating the “Question your query” format as that of Google. So there is no doubt that faster search speeds and better design specifications cannot be imitated by Microsoft’s competitors.

Link to the article: http://news.yahoo.com/s/ap/20060308/ap_on_hi_te/microsoft_internet_search;_ylt=AhWIueAD8QQvTsLfannkQk8jtBAF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA----

"Nokia Puts Priority on Internet Telephony"

In article posted on the New York Times stated Nokia’s release of a VoIP (Voice over Internet Protocol) service and handset. It allows people to talk over the internet on a fixed broadband link at much lower rates than regular cellular service providers. Amidst the competition from US and other European competitors, Nokia is trying to work out a strategy to include the VoIP service alongside their business model of mobile handsets.

Nokia claims to be the first company from amongst its competitors and industry which has actually come up with the idea of including a VoIP service. According to Barney’s framework, four questions need to be discussed in order to analyze the future behind Nokia’s decision:

A.) Question of Value: Does Nokia’s resources and capabilities enable the firm to respond to environmental threats or opportunities?

Well, it is mentioned in the article that Nokia is the biggest manufacturer of mobile handsets and has invested a huge portion into a new market of Internet Telephony. With a level of strong competition as that from Sony Ericsson and Motorola and with the Research and Development standards as that of Nokia, I believe that the firm truly holds the resources and capabilities to respond to any threats or to capitalize on any opportunity that it might encounter.

B.) The Question of Rareness: How many competing firms already possess particular valuable resources and capabilities?

With reference to the article, it is stated that the only step that BT-British Telecommunications took along with Motorola was to launch a dual-mode fixed mobile, which however did not support VoIP. There were other US and European based firms that wanted to launch a VoIP service, but the innovations and quick developments by Nokia had allowed it to be the first one.

C.) The Question of Imitability: Do Firms without a resource or capability face a cost disadvantage in obtaining it compared to firms that already possess it?

Imitation of the service is not difficult since the competing firms are not far behind in technology or where market share is concerned. However, where the question about first-mover advantage comes into place, then surely Nokia has successfully accomplished that. But, where the question of sustaining that advantage is asked, then it is the Question of Organization that needs to be addressed in order to confirm Nokia’s competitive edge according to Barney’s framework.

D.) The Question of Organization: Is Nokia organized to exploit the full competitive potential of its resources and capabilities?

Nokia, being a one of the largest multinational organization and also being the largest manufacturers of mobile handsets does not need to be questioned about its organization! However, their new step into Internet Telephony could sure be challenging since it is the first time that they have entered into such a sector. In the article, it is mentioned that Nokia is trying its best to review its business model and include the Internet Telephony segment. I would not say for sure, but Nokia is definitely up for the challenge.

Link to the article: http://www.nytimes.com/financialtimes/business/FT20060213_21730_156634.html

Effect of Danish Boycott Patchy

With reference to Porter’s 5 forces model, the bargaining power of the customer or the buyer lies in the hands of the people and the government of Saudi Arabia. In this case, according to large supermarket owners, the advertisement depicting Prophet Mohammad poses an insult to the Muslim community and to Islam. Since the majority of the people living in the Gulf and owning businesses are Muslims, they held the power to reject or accept any product or service that was associated with a country that did not show any respect towards their religion or country. Referring back to Porters 5 forces model, with regards to the bargaining power of customers, it describes few conditions where the buyer is considered to gain power over the suppliers. The scenario that fulfilled the requirement to conclude that Saudi Arabia has the bargaining power as a buyer over its suppliers are:

• “The product the buyer purchases from the industry represents a significant fraction of its costs or purchases”. (Porter, 1983). As mentioned in the article by a manager of a flagship supermarket, the sales of imported Danish products accounted for about 5%, but more in overall income earned of those products. (Arab News, 2006).
• “The product it purchases from the industry are standard or undifferentiated”. (Porter, 1983). The dairy industry in Saudi Arabia and the Gulf in particular is quite strong and has no problem in substituting the boycotted products with its local brands or brands produced in the Gulf region.
• “It faces few switching costs”. (Porter, 1983). As mentioned earlier, since the issue of substituting to local products is not a problem, switching costs are significantly low.
• “Buyers pose a credible threat of backward integration”. (Porter, 1983). Referring to the substitution issue again, Saudi Arabia has a strong industry with big giants such as Al-Marai, Nadec and Al-Rawabi that could easily be substituted for the boycotted products. So instead of relying on importing from outside, they could save themselves cost by producing and selling locally.

With reference to the strategic resources section of the Hamel chapter, Denmark and Norway are going to suffer the overflowing inventory losses that it had to witness in Saudi Arabia. They are the strategic assets of the Denmark Dairy Industry and being removed from shelves in such great volume in a country as big as Saudi Arabia, means a great loss of its assets.

The Dairy companies in Denmark will know have to re-position and manage their strategic assets (inventories) to cover up the losses that they have incurred in Saudi Arabia and other Gulf countries alike. This is keeping in mind the customer interface that they will have to consider. Through fulfillment and support, it will have to ensure new marketing techniques and channels through which it is going to distribute.

Since the relation between the supplier and the customer has become quite sour, Danish companies will have to work on their relationship dynamics in their customer interface to re-establish and enforce the trust that it had before. But, to do that, the Saudi Government and other Islamic countries have demanded the Danish government, media and companies for an apology.

Bilal Q. (2006)

"The Real Cost of Google's Sellout to China"

As mentioned in the article, “Google is destined to fail in China”, Chinese government required Google to comply with some of its norms in order to operate in the country, which was known to act as a barrier to entry for Google. However, Google had accepted to censor many of its search results that deemed to be offensive to the Chinese culture and to the Government in particular.

This was a very bold step indeed by Google since it is totally against the ‘Google’ culture of operating, which is to allow its users full freedom and privacy. Relating this article to Porter’s five forces model again gives us a clue about how the Chinese government had created a barrier to entry for Google. Through the demands and requirements of the Chinese government, it shows that China feels threatened to allow a so-called ‘invasion’ by Google into their country and letting people freely surf an uncensored internet, which would also ruin the reputation and share of local companies.

Google, being a brave player has in the end joined hands with the Chinese Government, agreeing to comply and block all possible search results that could “destabilize its authoritarian government” (Lipscomb, 2006).

"Google is destined to fail in China"

In Google’s quest of entering the Chinese space, there seems to be a big barrier of entry that seems to prevent Google from operating in China. The article mentions that, even though there seems to be a huge rivalry amongst top local Chinese technology companies, they seemed to be getting along very well (Wu, 2006). I believe this is the case because for the fact that Google is not a Chinese company. Due to the strong ties within the Chinese culture, Google will find it very difficult to operate unless they comply with what the government of China requests them to do.

This can be clearly related to Porter’s 5 forces model which illustrates the notion of barrier to entry. It clearly indicates the government policy that caused Google to face certain barriers to enter the Chinese market.

In retaliation to the situation, Google decided to self-censor their own search results that had anything to do with the Chinese government, which claimed in the article by Perry Wu, made other foreign and local companies happy about Google suffering in the share market.

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