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Saturday, April 22, 2006

Retail impact when Stock balancing risk is not offset to Vendor

What happens when a Retail customer doesn't succeed in realizing a stock balancing program? RadioShack Q1 profit drops 85% on weak cellphone sales. Buyer Beware can take on an entirely different meaning, when buyer is buying inventory. Buy too little, and shelves run empty. Buy too much, and costs ramp up and turns slow down. Buy the wrong product, and no one will buy it. Radio Shack seeing its Q1 inventory overloaded with cell phones is taking a number of steps to improve its situation. It has slashed this years advertising campaign by approximately $30 million. Its continuing to close stores. In a major change, they have switched from selling phones for Verizon Wireless to the AT&T arm of Cingular. Radio Shack has been selling phones for Verizon since Verizon came into existence in late 2000. When a retailer makes a purchasing decision, that results in lack lust sales, they have to turn to their bag of tricks to save the day. Sometimes their vendor agreements will allow a stock balance to occur. This would provide them a chance to reset, remove and replace slow moving inventory with new models. It appears that Radio Shack chose to forego this option, and resorted to a second trick. It changed vendors. Maybe Verizon did not allow a stock balance to occur, maybe Radio Shack did not like the new model phone alternatives offered by Verizon this year. Maybe on top of all the problems it was time for a change. For Verizon, this is a serious problem. The cell phone carrier is losing access to several thousand points of sale across the country and its competitor is gaining access to the same locations. They are also losing access to the benefits of Radio Shack's remaining, after cuts, $220-$230 million ad spend for this year. The ad money would not have been focused on Verizon products alone, but anyone pulled into a small Radio Shack store can't help but seeing the cell phone section. Maybe Verizon should have fought harder and considered the total cost of placating Radio Shack. On the flip side, sometimes a vendor has to choose a path of tough love with a retailer that has a declining or sick business.
Wednesday, April 19, 2006

Do Educational Discounts pay Dividends?

Recently the University of Cincinnati's College of Engineering added up their software donations and realized they had a heavy contributor on their hands, UGS Corp. The college added up the total free software donated, and the contribution reached $289 million. So of course the school immediately scheduled some events and dedications to honor the companies generosity. UGS is not the first company to provide their software free or at a discount to college's and universities. Conventional wisdom tells us that if we teach the students how to use the software and do it for free or on the cheap, then those same students will become the dedicated corporate/business users and purchasers of the future. Many companies offer educational discounts to appease the CV. Some like UGS even donate it for free. So is the conventional wisdom on target? Do companies from UGS to Microsoft to Apple and Mindjet really get the bang for the buck out of their contribution or investment? Post your feedback or experiences and we'll look more closely at this topic over the next week. AP Wire 04/19/2006 Gifts to school add up: $289 million worth
Thursday, April 13, 2006

Looking for Anecdotes about mobile advertising Trucks

Mobile Ads on Trucks Last January, while I was at CES, I travelling from the main convention hall to the Sands hall on a bus. Our bus almost made it to the sands, but we got stuck literally 5 feet from the acceptable unloading zone, so we were all stuck on the bus. So we sat there for about 15 minutes waiting for traffic to move another 5 feet. During the wait, a truck sporting a banner advertisement came from the other direction. It proceeded to perform a u-turn right in front of our bus. Of course there was no room for a U-turn and this increased our wait by at least another 30 minutes. The 3 point turn U-turn maneuvre created a situation where the advertisement on the back of the ad was displayed to several thousand convention goers (captive audience). The image which was just shy of obscene. I walked away after sitting on the bus for 45 minutes at a stand still considering just how effective this type of advertisement media really is. I'd like to query readers of this blog and see if anyone has any additional perspective on its feasibility. Good, Bad, useful, ROI what ever is relative.
Thursday, April 06, 2006

Perils of Business 2 Business Credit Card processing - Hypothetical

Exploring the Perils of Business to Business Credit Card Processing

During a routine audit of credit card transactions, relatively small dollar frauds from credit card transactions are sometimes found. This sometimes can be part of a larger pattern. Apparently, the small time (assuming they are small time) fraudsters that put credit card transactions through a system realize that the targeted company may have identified their business names, addresses, phone numbers, fax numbers or several other identifying characteristics. They realize that we are highly dependent on computer systems to screen the incoming data for these unique characteristics. Here is where they get a little smart. Basically, they routinely submit and resubmit these small dollar orders with many variations of names, addresses, phone numbers etc. Sometimes the change can be as small as including an extra space ' ' between an address or company title for example 1 short street 1 short street 1 short street 1 s hort street 1 short street etc. Obviously, given the vast array of techniques that money launderers and fraudsters utilize this is just one more way that they can through a random variable at our systems and prevent the detection of their fraud. Fraud auditing and Business Intelligence tools today are available that not only screen for common names and addresses and screen for different degrees of variation of each. It takes a lot of computing power to aggressively take into account all of the permutations available for a fraudster altering names, locations, and phone numbers all at once and carrying out this same fraud at multiple locations probably with dollar amounts ranging all over the place. Consider the implications of a higher power or organization that has controls of thousands of fraudsters with many names and businesses and addresses and even many mules that can deposit or carry out transactions all over the world. The situation moves out of the credit card realm and into the universe of Money laundering and anti-money laundering. If one looks at this as a military group would or an encryption specialist, it is probable that a certain degree of control needs to be exercised for the launderer/fraudster controlling group to keep a handle on what is really going on. Security/encryption keys could be used and probably are (hope I'm not giving ideas on how to wrong but how to stop it). For example, in the military a person would be given an identification nomenclature. Whenever the person sends out a message they go through certain channels or predetermined communication methods. The thing is they don't want the other side to know who is sending the message so they change their nomenclature on a regular basis (daily, weekly, monthly etc.) All of their communications should be encrypted and when a wily person or computer program comes along and happens to break this code they end up finding some possibly useful information, but they do not know who it is coming from or who it is going to (because the parties refer to each other given the nomenclature assigned for that time period. So let's say the program or person is really smart or lucky and happens to figure out that the nomenclature abc stands for John Smith. Well more than likely the next day the transmissions if decoded will not refer to abc at all. John Smith will have switched to the new nomenclature assigned for that day maybe xyz or 123 or something else. Now it is time for the program or person to basically find out every nomenclature in use by the entity they are trying to track on any given day (maybe they rotate in cycles of a year, month, week or something). So lets say they are really good and they find out what John Smiths nomenclature is for every day of a 30 day period and that it starts over at the beginning of the next 30 day period. Great now they will always know who is sending what to whom. Unless John Smith, gets wise to the notion that somebody has broken their code and nomenclature. He sends out word that the code is a bust and every body up and switches all the encryption and nomenclature to a completely fresh code. This is where business intelligence job security derives. A company witnessing minor frauds or multiple frauds, might only see the tip of an evasive iceberg. They could potentially be looking at a group that is running not only a rotating nomenclature of false names, businesses and addresses, but they are also keeping these false nomenclatures live and undetected by inserting random misspellings and spaces to throw off our fraud detection filters!

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This policy is valid from 29 October 2006 until such time as the I see fit to remove, amend or replace this Policy.

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