I had occasion yesterday to be on The Call, a CNBC television show hosted by economist Larry Kudlow. Like other supply-side economists, Kudlow follows Milton Friedman in assuming that the inflation rate is driven solely by monetary policy. My topic as a talking head: Where is inflation headed in the US? Inflation matters because it affects the stock market, interest rates and our real wealth and income. I think horse racing is a good analogy for inflation predictions. A lot of people are betting on the horse called inflationary expectations: the Federal Reserve’s monetary stimulus will create higher inflation rates so let’s build that expectation into today’s interest rates and prices. Another horse is medical costs: pharmaceutical companies and health care providers are raising rates in anticipation pricing pressures once the Democrat’s national health care policy is enacted. Yet another horse is energy…
Capitalize on Customer Frustration with Your Industry
“What is your bank trying to sneak by you?” appeared in bold letters on my computer screen. The screen was then filled with the complex and confusing words we’ve all seen in small print documents communicating our banks’ fees and financial charge practices. I hate those documents, don’t you? In one of the cleverest business model innovations of the year, GMAC Financial Services, a $180 billion global financial institution built initially upon the General Motors’ brand, has renamed its bank as Ally Bank and redefined its value promise. Like a river seeking lower ground, Ally Bank moved right into the heart of our frustrations and forced compromises with the banking industry, offering a solution that we’ve been waiting for – a bank that’s on our side. Ally Bank’s value promise is relevant, compelling and differentiated: Bank with us and you’ll keep more of…
Growth Strategy During a Recession
Image via Wikipedia The rock face has many parallels to business’ external environment. Rock climbing starts by understanding it. Stand back too far, you see everything, but can’t see initial steps up the rock. Stand too close, you’ll likely climb to a dead end i.e., without safe steps up the face. With the right distance (the one that an exciting new growth strategy is discovered from) you see a promising directional route. B2C companies should throw out existing assumptions about customers. A 20% and growing decline in household wealth is transforming our consumption patterns and preferences. We’re at a pivot point where change is non-linear, not trend-like. The greater your insight into this transformation, the stronger your organization will be. Your B2B strategic planning should focus on this question – What can or could we uniquely do to help a target market become…