Leg 5. From Guangzhou to Hong Kong (VI). In a hurry! Examples promised, examples given.
Good night to all.
Picture from some members of my family at my Sister´s Baby Shower earlier this week. My brother Cesar is the taller man at your right next to my Mother.
I would like to apologize for not writing to you during the last days. My little brother Cesar Escalante who lives in San Francisco visited El Salvador for a week, and I have been busy traveling in the country with him and my parents. For 4 days, I did not have access to Internet neither to my computer. Yes, I know, we are running behind the Volvo Ocean Race yachts, which have started Leg 6 (from Hong Kong to Auckland) already. 
If everything goes fine, I am planning to catch up the rest of the sailing teams in a day or so. I am sailing in knowledge for you as quickly as I can. The teams left Hong Kong around five hours ago without Vestas US-danish team: “The seventh team, Vestas 11th Hour Racing, has announced it will miss Leg 6, following a collision with a non-racing vessel at the end of Leg 4”.
Let´s go to the promised examples of the industry structure, competition and success factors over the life cycle. I have chosen these examples to illustrate the concepts of how the following variables affect the life-cycle industry evolution pattern. I hope you enjoy them.
- Demand: Lodging Industry. Specific company: Airbnb is an American company which operates an online marketplace and hospitality service for people to lease or rent short-term lodging to participate in, or facilitates experiences related to tourism such as walking tours, and reservations at restaurants. It is a broker system which receives percentage service fees in conjunction with every booking. Like all hospitality services, Airbnb is an example of collaborative consumption and sharing. The company has over 4 million lodging listings in 65,000 cities and 191 countries and has facilitated over 260 million check-ins.
- Technology: Credit Cards Industry. “Over the five years to 2017, the Credit Card Issuing industry is expected to rise, as lower unemployment rates and higher disposable incomes amongst consumers helped expand the volume and value of credit card purchases in the United States. The rise of e-commerce and mobile technology has made consumers and businesses increasingly comfortable with shopping and selling online. However, increased regulation and security concerns over company-level data are quickly increasing costs for industry operators”.
- Products (Type, Differentiation, Standardization): “Low-Cost Carrier Air Transportation Industry. Many of the low-cost airlines all around the world initially based their strategy on the South West’s model. However, as the number of Low-Cost Carrier (LCCs) increased over time, more and more of these airlines have deviated or ‘modified’ this model in order to survive in the industry due to competition”.
- Manufacturing and Distribution: Digital Web-Based OTT Companies (Netflix is one of these companies). Netflix, Hulu, Amazon Prime Video, and other Internet-based digital over-the-top (OTT) players have matured rapidly—and they’re stealing a meaningful share of business from traditional cable and satellite TV companies. “Netflix, the #1 source of downstream web traffic in North America, started off with a very different business model and has evolved over time, unlike many other companies that were at the top of their game at the height of video rentals. Originally a DVD mail-order service, the company has successfully navigated shifts in consumer demand, especially with the addition of streaming TV and movies in 2007″.
- Location: The Smartphones Industry when Blackberry was part of the competition. When the iPhone was introduced globally, Blackberry was competing with their own technology in the Smartphones market. Meanwhile, the RIM company´s growth was in emerging markets such as Indonesia and the Middle East, in the US the revenues were plummeting.
- Trade: Innovation Spots are not in emerging markets. There is a shift of manufacture from advanced countries to poorer countries.
- Competition: Media Industry. “During the past decade, marketers have fled newspapers for a variety of reasons, including declining circulation, aging readership and the need to fund their digital initiatives. Other factors more recently have come into play, including the growing use of data and analytics in the media-planning process. Moreover, advertisers aggressively are pushing into online video, and marketers in sectors such as retail, financial services, and telecommunications are reducing print spending”.
Let´s visit each of these examples in the following slides:
If you wish to download the latter set of slides in PDF Format, click here: Eliescalante Leg 5 Life Cycle f 06 Feb 2018.
This is all for today. In a few hours, I will post the summary and conclusions of Leg 5. And we will start racing Leg 6 as soon as possible. Thank you. 
01:39 am – San Salvador.
Source References:
https://www.engadget.com/2016/03/21/evolution-of-netflix/
https://www.wsj.com/articles/plummeting-newspaper-ad-revenue-sparks-new-wave-of-changes-1476955801
http://grmike.blogspot.com/2011/12/undervalued-blackberry-research-in.html
https://www.statista.com/chart/4112/smartphone-platform-market-share/
https://www.statista.com/chart/10585/ott-video-streaming/
http://helpmore.net/2016/a-significant-impact-of-low-cost-carriers-on-european-aviation-market.htm
https://www.strategy-business.com/article/li00035?gko=b500e
https://www.icao.int/sustainability/Documents/LCC-List.pdf
http://www.eurocontrol.int/news/rapid-rise-low-cost-carriers
https://www.sabreairlinesolutions.com/images/uploads/Hybrid_Model_Brochure.pdf
http://aviationknowledge.wikidot.com/aviation:low-cost-airlines:a-brief-history-the-current-state
https://qz.com/58043/how-airline-ticket-prices-fell-50-in-30-years/
https://www.atkearney.com/transportation-travel/article?/a/low-cost-air-travel-enters-the-next-stage
http://aci-na.org/sites/default/files/03-airline_strategies_and_bus_models.pdf
http://www.businessinsider.com/breakdown-of-us-consumer-debt-2016-11
https://www.fdic.gov/bank/analytical/banking/2005nov/article2.pdf
https://www.federalreserve.gov/releases/G19/default.htm
https://www.creditcards.com/credit-card-news/market-share-statistics.php
https://www.nilsonreport.com/publication_chart_and_graphs_archive.php?
http://www.bbc.com/news/business-381740111=1&year=2016
http://www.deflation.com/peak-credit/
https://pitchbook.com/news/articles/airbnb-expects-28b-in-2017-revenue-85b-by-2020
http://fortune.com/2017/02/15/airbnb-profits/
https://techcrunch.com/gallery/a-brief-history-of-airbnb/slide/56/#replay
https://www.statista.com/topics/2273/airbnb/
https://expandedramblings.com/index.php/airbnb-statistics/
Disclaimer: The content and presentation slides shown on this blog are prepared by me. Nevertheless, all the pictures or videos shown on this blog are not mine. I do not own any of the lovely photos posted unless otherwise stated.
Eleonora Escalante Strategy 