Small Italian firms go global

Story about a small (50 employees) Italian company that makes dresses, but sells them around the world. Going global was the only way for the company to stay in business, because the number of local customers willing to pay for the quality and detail work of their dresses would not have been large enough for the company to stay in business.

Next time you see a website for a company (especially one that does very specialized products), think about how many employees there might be at that “global” company.

Microsoft and Yahoo

Interesting article in the NYTimes about Microsoft’s offer for Yahoo. Seems to me that Microsoft is trying to sort out what business it is in in the long run, especially with the advent of open source software and on-line tools (Google docs anyone?). The Yahoo strategy seems to indicate that Microsoft is betting that computing is becoming Web 2.0 enabled (rather than driven by software loaded onto your computer). As a thought exercise, consider the minimum amount of software you would need on your computer to do most (all?) of your work. BTW, is this the market that the Apple Air is targeting? If you have everything on the web, a DVD drive and lots of USB ports aren’t as important, eh?

I had not thought about the SAP strategy before reading the article, but that provides a completely different strategy, where in fact Microsoft products (Office, Outlook, etc) continue to be purchased because of their integration with the software that drives enterprises. Individuals use Office-like tools and web based email, but Microsoft stops thinking of them as their customers.

What are the margins in these two businesses? This strikes me as a very interesting case study: the company knows the current business model is not sustainable and has two very viable ways to reinvent itself. Which does it choose and how does it decide?

Economies of scale in marriage

In operations management, we are careful to look at how economies of scale allow for new products and decreasing costs for existing products — think about how much computing power you can carry around with you that used to take up an entire room (and special air conditioning and a staff of operators). Here’s an interesting article that applies the notion of economies of scale to marriage and divorce.

Blog creation

This blog will post links to readings and information for the classes I teach. Labels will be used to allow you to look for posts for the class you are in. Comments are on, but will be moderated.