Nokia Microsoft Strategic Alliance

Nokia announced on February 11 2011 that it is partnering with Microsoft to deliver smartphones based on the Windows mobile platform. Such a strategic alliance now clearly marks the end of the Java-based era for mobile phones where manufacturers were celebrities in consumersʼ eyes and the start of a new era where all three computer giants (Apple, Google, Microsoft) are in complete control. The wow-factor is not about handset design anymore or "what it looks like" - as most smartphones and tablets all wear the same black costumes these days - but rather about operating systems and "what it can do".

Now, casual street talk will go something like: "What phone do you have? Is it an Apple phone, or a Google phone, or a Microsoft phone?" Nokia, Samsung, Motorola, Sony-Ericsson – all once fashionable names – will become sidelined adjectives.

Microsoft is now in a position to aggressively compete with both Apple and Android and is expected to grow considerably its market share of smartphones by 2012. Through this alliance with Nokia, Microsoft will benefit from an unrivaled global scale backed by mobile operators which feared the consequences of an OS monopoly should Nokia have selected Android as its primary smartphone strategy.

It was a logical step for Stephen Elop, Nokia’s CEO, who comes from Microsoft. The newly appointed CEO faced a critical decision as the Finnish manufacturer lagged behind competition in an industry where time-to-market means everything. Many competitors failed and disappeared from the radar because they could not launch a compelling smartphone in time and keep up with both demand and fast moving competition from the East. An alliance with Microsoft is the quick fix that Nokia needed - a strategic move that took Elop less than five months to materialise. Both firms expect to attract more developer commitments as they combine their content services under a global delivery platform in the shape of Microsoft Marketplace, which today only hosts 8,000 applications. The Ovi portal will be contributing to the new ecosystem, of which Nokia Maps will be a key component along with location-based services, entertainment and e-commerce services as well as the integration of Bing and Microsoft Office to the content mix. Elop mentioned that the success of Windows Mobile 7 smartphones is Nokiaʼs priority and that there are possible routes for the vendor to differentiate from competitors.

In addition, Nokia will focus on delivering Windows Mobile 7 smartphones to various segments and price tiers which will boost competition with Android in the sub-US$200 smartphone price range; a segment that Apple should consider seriously in its upcoming portfolio of devices. Nokia also anticipates that this strategic move will 

improve its presence in the US where it has been losing ground to competitors.

To date, the Finnish vendor is far ahead of its competitors in terms of global handset shipments and is very profitable for a company that mainly relies on low to mid-range devices (operating margins at 12-14 percent). But shareholders became concerned when they saw Apple challenging their leading position in terms of total revenues and margins last year. It clearly shows that they were missing the game in the high-end of the market as Nokiaʼs value share dropped from around 30 percent in 2008 to around 24 percent last year. As a matter of fact, Nokiaʼs average selling price (ASP) stands at around EUR65 in 2010 which is far lower than the iPhoneʼs ASP at US$640. Post-transition, Nokia expects its net sales to grow faster than the industryʼs average and its operating profit to remain stable at around 10 percent. The game has changed, from a battle of devices to a battle of services.

Ambush Marketing in Sport

Over the years marketers have found several innovative ways to advertize their brands. Ambush Marketing is one of these unique and creative ways of marketing. In general an ambush means an attack from a hidden position”. In Ambush Marketing, a company launches an opportunistic ad campaign hoping to capitalize upon events ( such as sports tournaments), in which it’s not an official sponsor. There have been numerous examples in which companies have grabbed the limelight, without being an official sponsor. Some of the prominent examples are:

FIFA World Cup 2010: Adidas was one of the official sponsors of 2010 FIFA World Cup held in South Africa. Adidas bagged the sponsorship by beating their closest rival Nike.

Nike chose the Ambush Marketing route and launched the “Write the Future Campaign”. The campaign, consisting of TV commercials featuring football stars like Rooney and Ronaldo, was launched three weeks before the start of the FIFA World Cup. As a result, Nike was successful in creating a lot of buzz, even before start of World Cup. In a survey published by The Nielsen Company, it was claimed that Nike benefitted more from the event in comparison to official sponsor Adidas. The campaign was so successful that several people thought Nike was the official sponsor of the World Cup.

Wills World Cup 1996: Pepsi was unsuccessful in obtaining sponsorship rights for the 1996 World Cup. But the company used Ambush Marketing to capitalize on the event by launching a campaign called “There is nothing official about it”. This campaign was targeted to steal the show from Coca-Cola which was official sponsor of the World Cup.

Boston Marathon 2002: Despite the 2002 Boston Marathon being sponsored by Adidas, Nike supplied the 

runners with spray painted swooshes that commemorated the day of the race, but not the race itself (clever).

Sydney Olympics 2000: In the 2000 Sydney Olympics, the slogan for the games was “Share the Spirit.” Qantas airlines adopted a slogan “The Spirit of Australia” despite the fact that Ansett Air was the official airline sponsor.

Though ambush marketing is one of the most cost effective and creative ways of marketing, it has faced a lot of criticism. This criticism mainly comes from the official sponsors, who have spent millions of dollar to get sponsorship. It has been thought increasing use of Ambush Marketing during big events could reduce the value of official sponsorship, which in turn may hinder sponsorship funding.

Future Sports Events

Rugby World Cup 2011: The Rugby World Cup 2011 is one of the most awaited events starting from 9th September in New Zealand. Even before starting of World Cup, sponsors are worried that some companies may use Ambush Marketing to capitalize upon the event at the expense of the official sponsors. As a result of increasing pressure from sponsors to safeguard their sponsorship rights, the government of New Zealand has introduced Anti-Ambush Marketing Legislation as a part of a major Events Management Bill. How effective such legislation is remains to be seen.

Video Game Addiction

Most adolescents like to spend at least part of their free time playing video games. But for some, what starts out as innocent recreation can become an addiction. Soon, friends, family, school, and even personal hygiene are neglected as nearly every spare moment is spent playing the game.

But what makes a game addictive? Are there certain characteristics that make some games more addictive than others? Why are some teens more susceptible than others to this kind of addiction?

As with any addiction, video game or "gaming" addiction is usually a multi-faceted issue. For starters, video games are designed to be addictive. Not "addictive" in the clinical sense of the word, but game designers are always looking for ways to make their games more interesting and increase the amount of time people will spend playing them. There are Web sites devoted to gaming design where gamers try to answer the question, "What makes a video game addictive?" They want you - once you log in or pick up that controller - to never want to stop playing.

Consequently, games are designed to be just difficult enough to be truly challenging, while allowing players to achieve small accomplishments that compel them to keep playing. In that respect, the design of video games is similar to the design of gambling casinos, which will allow players to have small "wins" that keep them playing. There are several "hooks" that are built into games with the intent of making them "addictive":

The High Score

Whether you've tried out the latest edition of Grand Theft Auto or haven't played a video game since PacMan, the high score is one of the most easily recognizable hooks. Trying to beat the high score (even if the player is trying to beat his own score) can keep a player playing for hours.

Beating the Game

This "hook" isn't used in online role-playing games, but is found in nearly every gaming system. The desire to beat the game is fed as a player "levels up," or finds the next hidden clue.

Role-Playing

Role-playing games allow players to do more than just play - they get to actually create the characters in the game and embark on an adventure that's somewhat unique to that character. Consequently, there's an emotional attachment to the character, and the story makes it much harder to stop playing.

Discovery

The exploration or discovery tactic is most often used in role-playing games. One of the most popular online games currently is World of Warcraft, and a good portion of the game is spent exploring imaginary worlds. This thrill of discovery (even of places that don't really exist) can be extremely compelling.

Relationships

Again, this is primarily an online "hook." Online role-playing games allow people to build relationships with other players. For some kids, this online community becomes the place where they're most accepted, which draws them back again and again.

Massive Multiplayer Online Role-Playing Games (MMORPGs) can be especially addictive because there's no ending. Unlike standard games like Super Mario Brothers, where you win when you save the princess, you can't rescue the princess in an MMORPG.

Another consideration is that some people are more prone to addiction of any kind than others, gaming or otherwise. Kids who are easily bored, have poor relationships with family members, feel like outcasts at school, or tend toward sensation-seeking are more easily drawn into video game addiction because it fills a void and satisfies needs that aren't met elsewhere.

In addition to the psychological addiction, it's now believed that there may be a physiological element to addictive game playing. Researchers at Hammersmith Hospital in London conducted a study in 2005 which found that dopamine levels in players' brains doubled while they were playing. Dopamine is a mood-regulating hormone associated with feelings of pleasure. The findings of this study indicate that gaming could actually be chemically addictive.

Though the debate rages on as to whether gaming addiction is a diagnosable disorder, the behavior undeniably exists. The combination of intentional programming by designers and the predisposition some teens have to addictive behavior means this is a real issue that parents, teachers, and friends should be aware of and take action to prevent.

Marketing of Football

Just 15 years ago, the financial power of majority of the football clubs was limited. In fact their source of income was majorly based on winning trophies and occasional cash inflows from the owners. Even though domestic shirt sales and limited television revenues provided some source of income for the big clubs, the smaller clubs struggled.

Football, nowadays, has changed dramatically most of which can be attributed to the successful marketing campaigns of different football clubs. You have probably seen all those football commercials nowadays of brands like Nike and Adidas associating themselves with the best players to sell their products.

One particular example of this dramatic change can be showed by closely following Real Madrid’s marketing campaign over the last 10 years. Real Madrid, voted the “club of the century”, is more than a just a football club, it’s one of the most successful brands in the world. Though Real Madrid has historically been a rich club, it was only after the arrival of Florentino Perez in 2000 that marked Real Madrid’s status as a business brand.  Their marketing strategy was to portray themselves as the most entertaining and popular team in the world. So they simply bought the best players in the world namely Zinedine Zidane, Luis Figo, David Beckham, Micheal Owen, Ronaldo etc. Famously known as the “galacticos”, with these acquisitions Madrid marked doubled their shirt sales which rose to $1 million sales in one year.

This move was a part of a planned management strategy intended to transform football into the Olympus of imagery and advertising. The idea was simple: It is no longer sufficient just to score goals; you also have to sell jerseys. This idea can be clearly seen by Madrid’s signing of David Beckham. Miguel Angel Sastre, professor at University of Madrid described Beckham as, “a sociological phenomenon, with more than 60,000 web pages of information about his movements. His popularity is greater than that of the British Royal Family”. Just after two years of forming this galactic team, as Sastre claims, “revenues from his advertising campaigns have totaled 21 million Euros.”

Its 2011 now, and Real Madrid still follow the same policy of getting the best players in world. During the last few years, they have acquired the new galactic additions namely Cristiano Ronaldo, Kaka, Oezil, Alonso etc. The fact that they have the highest revenue when compared to other clubs shows how valuable successful marketing can be.

The Roman Military: Tactical Warfare

Any army relies on smart strategies and quick battlefield tactics to overcome their enemy. The Roman Army possessed incredibly skilled commanders, and their superior tactics won them countless battles.

Resource Tactics

"To distress the enemy more by famine that by the sword is the mark of consummate skill."
-Roman Military Maxim

The Romans realized that with the training a soldier requires, his food, his armour, his armaments, his salary, and his honorarium (paid to those who received honourable discharges), a soldier was a very expensive proposition, and was far too valuable a resource to waste. Therefore, the best tactic would be the one that had the most effect without exposing the troops to unnecessary risk. Their answer was to cut off their opponent from his resources. Armies run on their stomachs and equipment, and both require regular supplies. Without a steady supply of food and water, an army will starve or dehydrate, killing or demoralizing the troops. Eventually, the army would fall apart. There were three ways that the Romans could separate their enemies from their resources.

The first way was attacking the resources themselves. When they conquered territory, they took as much as they could. This not only gave them more food, it prevented it from falling into their opponent's hands. This strategy backfired in Gaul, where Vercingetorix employed a scorched earth tactic, whereby burning crops and taking livestock when he retreated, he left the Romans nothing to take. He was eventually foiled when Caesar ordered his troops to cross the Liore river. Vercingetorix had thought the river impassable, and had not bothered to destroy any of the crops on the other side, so the Romans were able to re-supply and continue their campaign.

The second part was intercepting the supplies en route. By cutting of the main arteries of transportation, the amount of supplies that could reach the enemy was drastically reduced.

The third, and most famous part of this strategy, was the siege. When the enemy holed up in a city or fort, the army would surround the city and begin constructing the various parts of their siege arsenal. Often, they would build another wall around the city, out of range of the archers, to keep the enemy from escaping. They built and used catapults, ballistas, onagers, and trebuchets to hurl rocks, spears, and other things at the enemy from safe distances. Spears were launched from the catapults to take out the defenders on the wall. The heavier pieces often shot boulders, damaging walls, destroying buildings, and causing chaos. Other projectiles included rotting carcasses, which could start plagues, especially if they hit the water supply, and skulls, to demoralize the enemy. After a while the city's (or fort's) food supply would run out, the defenders would die, and the Romans would have an easy victory.

However, this did not always work. Another army could move in and attack the besiegers. The fort or city might have an internal source of food and water, like at Masada. So, if the enemy could not be starved, or time was of the essence, a direct assault was required.

The main obstacle in such assaults was the wall that protected the enemy. The weakest link in the wall was usually the gate, so one tactic was to break through using a battering ram. Unfortunately, the gate was often heavily guarded, so an attack there could be suicidal. Another strategy was to build a wheeled tower higher than the walls, and use that to place the troops on top of the wall. While not attempting to mount the wall, archers could climb to the top of the tower to increase their range. Or, if one had enough time, you could attempt to dig under the wall. This could accomplish one of two purposes. The miners could either try to collapse the wall, or create a tunnel that would allow the troops to enter the city. Either option was risky, because the tunnel could collapse at any moment, killing the work crews.

To Corner or Not to Corner?

When the enemy was facing defeat, the Roman commander had several options. Did he press the attack, and try to cut them down, or did he allow them to retreat? While some might try and end it there, the more frequent approach was to allow them to run. When cornered, soldiers would often try to make a stand, and fight with the strength brought on by desperation, taking a heavy toll before they were overwhelmed. If they were given an avenue of escape, they would think only of running, dropping weapons and armour in an attempt to go faster. The Romans would then be dealing with a disarmed, panicked, and demoralized rabble, instead of a force determined to fight to the last man.

Dealing with Non-cavalry Mounted Opponents

Chariots

The Romans tended not to use chariots in combat, because they were only useful on completely flat ground. When the army faced opponents who used them, they simply set up obstacles that would severely damage or destroy any chariot foolish enough to try and cross them.

Elephants

The Roman army had several ways of dealing with mounted pachyderms. Elephants usually carried several riders, the idea being that the riders could finish off any attackers before they had enough time to kill the elephant. The first method was to pick off the riders with archers, which could be difficult if the riders themselves were archers, because they had a height advantage. The second was to have the cavalry ride in circles around it and throw javelins. Another tactic was to part ranks in front of the elephant, and then rush in and attack its flanks.

Divide & Sell

Consumer electronics makers LG, Videocon, Onida and Samsung are rolling out exclusive models for big retailers, initiating a strategy to differentiate products sold in large chains from those sold in small shops.

This strategy would put to rest small merchants' complaint that they are not able to compete with big chains like Croma, Future Group and Reliance Digital who often do heavy discounting in prices because their trade margins are double.

With such a strategy, consumer electronics companies are able to increase the average selling price in modern retail, which ensures their margins, and ensures that price comparison with rest of the channel is avoided.

An example of a company putting this strategy into practice is Mirc, maker of the Onida brand of durables and TVs. The company has launched an LCD TV for the modern retail, which is priced at a little premium than sold at the normal channel but has additional features such as more than one HDMI port and USB drive. The models are differentiation in terms of design, features and even colour.

Modern retail accounts for only 6% of the 35,000-crore Indian consumer electronics market. Modern retail may still be small in durables, but since it is gaining share the durable companies are meeting their demand while at the same time ensuring neighbourhood retailers are not hurt. This is an established practice in the apparel industry overseas.

Marketers hope to push premium products through modern retail and mass products through neighbourhood stores. Market leader LG has stopped pushing volume products like CRT television, single-door refrigerator and semi-automatic washing machines through modern retail to maintain price parity in the market. LG is specifically undertaking this strategy for LCD and Plasma televisions, whereby certain series of models are sold exclusively through the retail chains. Samsung, the other Korean player, has developed three models of washing machines - a 5.5 kg front-loading machine, a 6.2kg top-loading machine and a 12 kg model - exclusively for modern retail and brand stores.

 This phenomenon will gain pace now that the Centre plans to allow FDI in multi-brand retail. Selling exclusive models is an established practice amongst multinational consumer electronics retailers such as Wal-Mart and Best Buy, particularly on TV and laptops. 

Prisoner’s Dilemma

The prisoner’s dilemma is a fundamental problem in game theory that demonstrates why two people might not cooperate even if it is in both their best interests to do so. It was originally framed by Merrill Flood and Melvin Dresher working at RAND in 1950. Albert W. Tucker formalized the game with prison sentence payoffs and gave it the "prisoner's dilemma" name.

A classic example of the prisoner's dilemma (PD) is presented as follows:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated the prisoners, visit each of them to offer the same deal. If one testifies for the prosecution against the other (defects) and the other remains silent (cooperates), the defector goes free and the silent accomplice receives the full one-year sentence. If both remain silent, both prisoners are sentenced to only one month in jail for a minor charge. If each betrays the other, each receives a three-month sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

The classical prisoner's dilemma can be summarized thus:

Imagine you are player A. If player B decides to stay silent about committing the crime then you are better off confessing, because then you will get off free. Similarly, if player B confesses then you will be better off confessing, since then you get a sentence of 3 months rather than a sentence of 1 year. From this point of view, regardless of what player B does, as player A you are better off confessing. One says that confessing (defecting) is the dominant strategy. As Prisoner A, you can accurately say, "No matter what Prisoner B does, I personally am better off confessing than staying silent. Therefore, for my own sake, I should confess." However, if the other player acts similarly then you both confess and both get a worse sentence than you would have gotten by both staying silent. That is, the seemingly rational self-interested decisions lead to worse sentences—hence the seeming dilemma.

Although they are not permitted to communicate, if the prisoners trust each other then they can both rationally choose to remain silent, lessening the penalty for both of them. This particular example, involving prisoners may seem contrived, but there are in fact many examples in human interaction as well as interactions in nature that have the same payoff matrix. The prisoner's dilemma is therefore of interest to the social sciences such as economics, politics and sociology, as well as to evolutionary biology. Many natural processes have been abstracted into models in which living beings are engaged in endless games of prisoner's dilemma. This wide applicability of the PD gives the game its substantial importance.

In politics

In political science, for instance, the PD scenario is often used to illustrate the problem of two states engaged in an arms race. Both will reason that they have two options, either to increase military expenditure or to make an agreement to reduce weapons. Either state will benefit from military expansion regardless of what the other state does; therefore, they both incline towards military expansion. The paradox is that both states are acting rationally, but producing an apparently irrational result.

In environmental studies

In environmental studies, the PD is evident in crises such as global climate change. All countries will benefit from a stable climate, but any single country is often hesitant to curb CO₂ emissions. The immediate benefit to an individual country to maintain current behaviour is perceived to be greater than the eventual benefit to all countries if behaviour was changed, therefore explaining the current impasse concerning climate change.

In psychology

In addiction research/behavioural economics, George Ainslie points out that addiction can be cast as an intertemporal PD problem between the present and future selves of the addict. In this case, defecting means relapsing, and it is easy to see that not defecting both today and in the future is by far the best outcome, and that defecting both today and in the future is the worst outcome. The case where one abstains today but relapses in the future is clearly a bad outcome—in some sense the discipline and self-sacrifice involved in abstaining today have been "wasted" because the future relapse means that the addict is right back where he started and will have to start over (which is quite demoralizing, and makes starting over more difficult). The final case, where one engages in the addictive behaviour today while abstaining "tomorrow" will be familiar to anyone who has struggled with an addiction. The problem here is that (as in other PDs), there is an obvious benefit to defecting "today", but tomorrow one will face the same PD, and the same obvious benefit will be present then, ultimately leading to an endless string of defections.

In economics

Advertising is sometimes cited as a real life example of the prisoner’s dilemma. When cigarette advertising was legal in the United States, competing cigarette manufacturers had to decide how much money to spend on advertising. The effectiveness of Firm A’s advertising was partially determined by the advertising conducted by Firm B. Likewise, the profit derived from advertising for Firm B is affected by the advertising conducted by Firm A. If both Firm A and Firm B chose to advertise during a given period the advertising cancels out, receipts remain constant, and expenses increase due to the cost of advertising. Both firms would benefit from a reduction in advertising. However, should Firm B choose not to advertise, Firm A could benefit greatly by advertising. Nevertheless, the optimal amount of advertising by one firm depends on how much advertising the other undertakes.

Sometimes cooperative behaviour does emerge in business situations. For instance, cigarette manufacturers endorsed the creation of laws banning cigarette advertising, understanding that this would reduce costs and increase profits across the industry. This analysis is likely to be pertinent in many other business situations involving advertising.

Without enforceable agreements, members of a cartel are also involved in a (multi-player) prisoners' dilemma. 'Cooperating' typically means keeping prices at a pre-agreed minimum level. 'Defecting' means selling under this minimum level, instantly stealing business (and profits) from other cartel members. Anti-trust authorities want potential cartel members to mutually defect, ensuring the lowest possible prices for consumers.

In law

The theoretical conclusion of PD is one reason why, in many countries, plea bargaining is forbidden. Often, precisely the PD scenario applies: it is in the interest of both suspects to confess and testify against the other prisoner/suspect, even if each is innocent of the alleged crime.