Aaron Hoos

Every mall has a food court and, it seems to me, basically the same options: Usually a couple of Asian food places, an Italian place, a burger-and-fries place, and a sub place. The brands are usually pretty similar from one mall to another (at least in the malls I’ve shopped in).

Turns out, someone has been dubbed “the food court king” for his growth and broad brand lines represented at many food courts across Canada.

Stanley Ma is the founder of MTY, a food services company whose specialty is branding. They have 26 brands (some acquired and some developed in-house) and over 1,700 stores across Canada.

Read the article here: The food court king. Don’t miss the key lessons from this article:

1. Good growth is thoughtful, strategic, and patient.
2. Effective branding is an asset.
3. Successful businesses find synergies among its products and brands.

Learn more about MTY and see what brands they own at MTYgroup.com.

One of my clients is an automotive insurance company. The other day, while a few of us were working on a positioning document, one of my contacts at the company observed that their company seemed to be held up to higher scrutiny than other organizations (like the power company or water utility).

They were right — that IS the case. They ARE held up to higher scrutiny and the resulting (and often caustic) criticism that comes with it. It’s not that they are doing something bad. The reason is: When people plug something into an electrical outlet, they get a tangible result and they know that the power output will be reflected on their next bill from the power company. And, when people turn on the tap and fill a glass with water, they know that their drink will be reflected on their bill from the water utility. In both cases there was a tangible result for a specific cost… And the more of a result that is needed, the higher the cost. It makes sense.

But that’s not the way it works with automotive insurance. You pay a pre-determined amount, which you might or might get a benefit from. Some people pay and pay and never need it; others need it frequently and get a better benefit. In other words, it doesn’t feel (at least to the consumer) like there is a direct result associated with a specific cost.

Insurance companies have tried to do something about this, including offering rebates to good drivers, but I don’t think any of their efforts are as successful because the end result is still the same: People pay for a service that they may or may not need. As a result, insurance is commoditized and people look for the cheapest insurance, they barely understand what their coverage offers, and they are quick to complain and switch companies.

There is, however, a type of insurance that is growing in popularity in the UK that could be the answer North American insurance companies are looking for: Pay-As-You-Go insurance.

With Pay-As-You-Go insurance, you basically pay for the miles (or kilometers) you drive. Your car is always covered with some basic coverage (in case someone steals it or in case it spontaneously combusts) but when you drive your car, you pay by the mile for additional coverage in case of collision.

By using GPS, insurance companies can see how far you travel and bill you accordingly. If you’re the kind of car owner who only uses your car to go to church on Sundays, you’ll pay less insurance than someone who goes on cross-country drives. That makes sense. And although it doesn’t completely eliminated the commoditization of insurance, it does create a clearer sense of pay-for-use, similar to what people understand when they plug things into their electrical outlets or pour water from the faucet.

I realize that there are other issues that need to be worked out. Privacy issues will need to be addressed. Customers will need to be assured that their car’s GPS information will only be used to determine distance. Speed and destinations cannot become part of the equation. If that issue can be resolved, I think we’ll see this as the Next Big Thing in the automotive insurance industry. Customers will enjoy rates that are more clearly linked to usage and good drivers won’t end up paying higher premiums because there are a lot of bad drivers on the road.

HP recently hired former SAP CEO Leo Apotheker as their new CEO. Some people are calling it a foolish move. I think it’s smart. I think HP is making a big bet on a strategic move that could transform the company.

THE BACKGROUND
First, a little background, just to review some of the recent events at Hewlett-Packard:

1. CEO Mark Hurd, who made HP into a lean, financially successful organization (with significant marketshare in hardware) in the past five years, was faced with a sexual harassment accusation.
2. An investigation determined that the company’s sexual harassment policies were not violated but the company’s business and conduct policies were violated, due to some inappropriate payments from HP to an HP consultant with whom Hurd had a personal relationship.
3. Hurd resigns.
4. Hurd is hired by software giant Oracle.
5. HP threatens that it will sue Hurd for a non-compete clause in his contract.
6. HP backs off of their lawsuit.
7. HP hires former SAP CEO Leo Apotheker as CEO.

That’s the backstory. Now let’s dig a little deeper:

STUPID AND SMART
Admittedly, Hurd did something stupid and his resignation is not a surprise. Oracle made a good move in hiring him because Hurd’s background as an efficient, cost-cutting machine will help turn Oracle (which tends to be somewhat inefficient because of its acquisition-heavy growth-plan) into a more profitable enterprise. [Note: It's already doing well… but Hurd will make it better].

HP was wise to back off of its threat to sue Hurd. That would only attract bad press and make HP seem to be a poor loser.

But what about its move to hire Apotheker? That has been met with some mixed opinions. (If you haven’t yet, check out this BusinessWeek article which points out that SAP suffered under the 2-year-long leadership of Apotheker).

In spite of some of Apotheker’s baggage, I think HP is making an aggressive — and fairly smart — move. Here’s why:

COMPETITIVE STRATEGY: SOFTWARE
Hewlett-Packard has long competed in the computer hardware space, easily straddling both retail and business sectors and enjoying a fairly significant marketshare (thanks to Hurd). Consumers probably think of HP as “the printer people”; medium and large businesses may have desktops supplied by HP.

The problem is, hardware is a commodity business and very price sensitive. Prices are aggressively decreased as low-cost competitors vie for limited dollars. Equipment is easily outsourced, driving costs and prices down. At the same time, businesses with pinched budgets look to extend a previous computer hardware investment by delaying equipment upgrades.

For companies with good marketshare, there is some benefit to being in this space (as HP has shown), but expenses are high and there is a lot of downward pressure on price, so profits are always a struggle.

The real money is in software. Software – especially enterprise software – can be expensive to development but, once built, it is very cheap to sell and install. (Similar to pharmaceuticals, where the first pill sold cost millions to develop but subsequent pills cost a mere fraction of a cent).

Not surprisingly, HP is looking to compete in the enterprise software space. HP offers some enterprise software solutions but their offerings pale in comparison to the offerings at Oracle and SAP.

SAP is the only company that offers any competition to Oracle. (Well, maybe IBM is up there, but I don’t think it’s as significant of a player). HP tends to be down one tier, competing with other smaller players for the scraps left over from Oracle and SAP.

Apotheker knows software, and as a former SAPer, he knows his main competitor Oracle. In fact, he likely knows more about Oracle than Hurd knows, he definitely knows more about SAP than Hurd knows, (thus he brings a superior competitive advantage) he likely knows more about enterprise software than Hurd knows, and he has experience in the enterprise software space – the very space that HP covets.

I believe Apotheker’s biggest challenge will be turning a hardware company into a software company. Apotheker’s primary experience in leadership has been in growing a software company. He’s been with SAP since the late 1980′s and although his work as a CEO wasn’t met with enthusiasm, he did have some success in the previous years where he founded country-specific versions of SAP and was president of regional teams.

WHAT APOTHEKER SHOULD DO

• HP has an interesting advantage over Oracle (and SAP). They have hardware in a lot of companies. I believe they could easily achieve a foothold in the same way that Microsoft does – by adding basic HP software on their equipment, then creating enterprise solution add-ons that customers can purchase which run seamlessly with the pre-existing HP software.
• Find a space where Oracle and SAP are lacking and innovate there. (SAP has been slow to move into cloud-based computing and social media adoption. I think Oracle is a little better but maybe HP has an opportunity here).
• HP should also start playing catch-up, Oracle-style: by acquiring or developing significant joint partnerships with smaller innovative software players looking for funding and growth.

Want to read more? This Wall Street Journal blog offers some additional insight and background.

Disclosure: I have written content for SAP (while it was run by Leo Apotheker) through a SAP content partner, and I am currently in a consulting contract with HP as a technical writer. These are my opinions only! I have tried to remain as neutral as possible and have not received compensation for this blog post, nor have I been asked or authorized to write it.

I love beer. It’s not just a cold drink on a hot day; it represents thousands of years of trial and error. It’s a craft. Similar to wine, every beer captures the subtleties of the individual ingredients as well as the container it’s brewed in. Even a slight change in the process or the ingredients will completely change the end result.

I’m also fascinated by beer marketing because, unlike many other products, they have the budget to spend and their marketing needs to position and brand rather than directly sell. That’s a big difference.

So when I heard about the Flatlander’s Beer Festival – a local beer-tasting show – I had to go! I picked up tickets for my wife and I. And, in preparation for the event, we printed the list of beers off of the event’s website, crossed off the ones we’d already drank in our travels, and decided what we wanted to drink. We narrowed the list down to ten beers because, well, we’re only human. (Don’t worry, we didn’t drive home).

BEER REVIEW
So, here are the beers we drank (in no specific order).

Tree Brewing Cutthroat Pale Ale
Brewed in British Columbia Canada
The beer was really crisp with a bit of a finish (although not a lot). It smelled like honey. I confess that I drank this beer because it had a cool name.

They have a great website and some interesting names for their other beers – Thirsty Beaver Amber Ale, Beach Blonde Lager, and Cutthroat Pale Ale.
http://treebeer.com

Hockley Dark Traditional English Ale
Brewed in Ontario Canada
It was milder than I thought it would be and actually less bland than some of the traditional English ales I’ve actually drank in traditional pubs in England! There were hints of vanilla and my wife said it perfectly: It tasted like it was brewed in wooden barrels.

Their website is defunct (which is not a good sign) but here’s their web address anyway: http://www.hockleybeer.ca/ [Image credit: LexnGer]

Rogue Dead Guy Ale
Brewed in Oregon USA
This beer had no smell, which I was a little disappointed with. It was heavier through the middle of the taste and reminded me of a less sweet version of Innis and Gunn. There were hints of nutty oak in the aftertaste.

This is another company with some clever beer names and quite a long list of beers. I’d like to try more.
http://www.rogue.com

Schofferhofer Grapefruit
Fruit/wheat beer brewed in Germany
Okay, so my wife is an unabashed fruity-drink drinker and I wasn’t surprised that this beer caught her eye. But when we drank it, it was like being punched in the face by a grapefruit. It was ALL grapefruit with a hint of beer-like aftertaste. But just a hint. In fact, if I didn’t know that it was beer, I would have guessed it was grapefruit juice. This is easily the fruitiest beer I’ve ever drank.

Schoefferhofer’s site is not in English so I can’t tell you much about them except that they seem to be going for a really fresh, bright, crisp beer-on-a-sunny-beach motif.
http://www.schoefferhofer.de/

Cooper’s Sparkling Ale
Brewed in Australia
I wanted to try a beer from Australia but didn’t have a lot to write about this one. It was crisp (that’s the ale speaking) and sharp (that’s the sparkling part) with a slightly hoppy aftertaste.

Cooper’s website was a little cumbersome to navigate and they seem to have an interesting emphasis on homebrewing, which I thought was weird for a brewing company.
http://www.coopers.com.au

Unibroue Maudite
Ale brewed in Quebec Canada
I desperately wanted to like this beer but I didn’t. It was really yeasty, apparently because it is partially fermented and then bottled with the intention of continuing to ferment in the bottle.

All of Unibroue’s beers have ties to Quebec legends. Maudite – which means “the damned” – is named after a group of lumberjacks who sell their souls to the devil to spend the winter holidays with their families. So it’s a cautionary tale. Unibroue’s marketing, in my opinion is among the best of Canadian beer.
http://www.unibroue.com

Cannery Brewing Blackberry Porter
Brewed in British Columbia Canada
I would have skipped this beer. I don’t like porters (which are thick, dark beers) and I don’t like a lot of fruity beers. But this was my wife’s pick and I ended up liking it. Plus it was her favorite of the beers we drank at the event. It was quite nice because it tasted like beer with just a hint of blackberry (unlike the overwhelming grapefruit beer from earlier). It had a bit more of a bitter finish than I prefer but it was pretty good.

Cannery brewing has a pretty weak website, which makes me wonder if they’re either just starting out or not making a lot money right now.
http://www.cannerybrewing.com

Lava Stout
Brewed in Iceland
I wanted to try a beer brewed in Iceland so I picked this (but was surprised at the number of Icelandic beers available). If you like stout, you’ll like this beer. It is strong stuff. I needed a seatbelt to drink it and I could barely finish it.
http://www.brugghus.is/english/


Fruli Strawberry Beer
Fruit/wheat beer brewed in Belgium
Another of the fruity beers. This one had a strong strawberry smell and taste – which almost made it seem like strawberry juice, but it had a bitter aftertaste, reminding you that you were drinking beer.

No offence to the good people of Fruli but their website is pretty weak.
http://www.frulibeer.com

Red Racer India Pale Ale
Brewed in British Columbia Canada
This company has some pretty fun marketing and I wish I had time to sample some of their other beers. This was the last beer of the evening for me and if I could stand and walk in a straight line, I probably would have liked to sample some of their others. This one though, because it was an IPA, was pretty strong. It was hoppy and left a significant aftertaste.
http://www.centralcitybrewing.com

SUMMARY
It was fun to try different beers. I can’t say that any of them even came close to replacing my favorite beer or second favorite beer or third favorite beer but there were a few that I would consider stocking in my bar.

LOVE BEER?
You can read some of my other writing about beer and beer marketing here: View my favorite beer commercials from Dos Equis, view another favorite beer ad, read a recent blog post about beer marketing, check out an article I just read on market share in the beer industry.

Yesterday I wrote a blog post called “5 beer spokesmen and what businesses can learn from them about marketing“. Right after I posted it, I read this excellent article on Stealing Share about beer markets and how they can increase market share.

Increasing Market Share | Beer Market Study

The article walks readers through the process of analyzing beer markets and finding a good opportunity in the market’s “whitespace” for beers to gain market share.

This article, posted in 2008, identifies some whitespace in the beer market in the imported-beer/special-occasion market. (I’ve embedded the image from their blog)

This is exactly the space that Dos Equis is playing in right now. You can tell by their slogan, “I don’t always drink beer, but when I do, I prefer Dos Equis.”