I have since expanded it since I put it out in 2018. Some of our members might have read the updated version in Tekedia Mini-MBA courseware. But let me share this first draft, published in 2018. The One Oasis Strategy provides a really brilliant way to allocate factors of production in companies. Banks, fintechs and great companies have deployed the thesis. It will be part of my first work of 2021 in the Harvard Business Review, coming later this month.
Registration for 4th edition of Tekedia Mini-MBA (Feb 8 – May 3, 2021) begins. Tekedia Mini-MBA, from Tekedia Institute, is an innovation management 12-week program, optimized for business execution and growth, with digital operational overlay. It runs 100% online. The theme is Innovation, Growth & Digital Execution – Techniques for Building Category-King Companies. All contents are self-paced, recorded and archived which means participants do not have to be at any scheduled time to consume contents.
‘Simply, if you build your investment around that main product, you will find success, because those investments will have a clear internal “customer”, and that reduces market risks’. The best product is the oasis in your business upon which other products (inhabitants) will feed on and depend on, as in the oasis in the desert. If you make it a clear category-king, the oasis will last long to support other inhabitants in your firm. N.E.
Fiat Chrysler and PSA Group are about to finalize their merger: “ Fiat Chrysler Automobiles NV and PSA Group are poised to get shareholders’ sign-off on a combination that’s endured two years of extraordinary drama, marked by on-again off-again talks, the transformation of their industry and a global pandemic.” Possibly, this deal will help them pool resources together for the future of automobiles which to a large extent includes electric and self-driving vehicles.
Fiat Chrysler and PSA executives reckon they’ll boost returns with scale more closely resembling Volkswagen AG and Toyota Motor Corp., and have greater resources to compete with electric-car upstarts and tech-industry interlopers. But plenty of challenges await once the deal is done. Stellantis will be an amalgam of model lines with enviable positions in certain segments and areas of the world, but neither company has much of a foothold in the luxury-car business or China’s vast auto market.
“Stellantis will be a sort of conglomerate of brands, some great and some not so good and most very regional,” said Jefferies analyst Philippe Houchois. “The merger will be a good opportunity for a reset.”
They need to learn from Tesla which has transformed its industry by becoming a software company which makes cars! And it has also used the double play strategy to unlock massive value in the system. Yes, Tesla makes billions of dollars just by selling emission credits.
But Tesla is even the finest software & services company in the automobile sector. The fact is this: Tesla does not need to be overly valued just on the number of cars it has sold, just as we are not counting how many iPhones Apple has sold recently. Apple has moved into the services era, well beyond a life tethered on hardware.
I see Tesla as the only current “automobile” company in the world that has a clear playbook to make, possibly, more money on software and services than actually on sales of metals packaged as cars. First, the company is piling tons of money from regulatory credits: “In their most recent shareholder update, Fiat Chrysler Auto disclosed that as of March 31, 2020, its agreements represent total commitments of €1.1 billion”. Yes, that was how much Tesla made from FCA for selling credits which could have expired!
Besides all, Tesla plays the perception game which means it would be hard for any car company to easily catch up as it changes the basis of competition on the fly. So, for Fiat and PSA, this deal must go beyond making cars, it needs to find ways to make fans out of customers since perception is now a big component in the game of automobiles.
The new template for the industry is evident: a software company which ships cars since for Tesla you need to be on subscriptions to get some updates and some software systems are not transferable on sales.
Absolutely. We will release FSD subscription early next year.
This business model where someone can buy a car and still be paying a subscription on the car for some features is something Fiat and PSA must think deep into.
Amidst the pressure from international investors and regulatory battle in India, Reliance Jio announced it’s making all off-net domestic voice calls free, from January 1 2021. Indian Telecom Regulatory Authority (TRAI) had a plan to implement a Bill and Keep regime that would end interconnect usage charges (IUC) for all domestic calls.
The Indian behemoth said following the TRAI directive, it will make all off-net domestic calls voice calls free, as a gesture of its commitment to revert off-net domestic voice call charges to zero, as soon as the IUC is abolished.
It was a tactic used by the Mukesh Ambani-owned telecom company even before the directive of TRAI, that helped it to conquer India’s telecom industry with over 400 million subscribers.
“For context, in September 2019, when TRAI extended the timeline for implementation of the Bill & keep regime beyond January 1, 2020, Jio started charging its customers for off-net voice calls, at a rate exactly equivalent to the applicable IUC charge,” Times News noted in a report.
Jio had assured its subscribers that the charges will end as soon as the TRAI directive to abolish the IUC is implemented, a promise it has kept by making the free-call announcement.
“Today, Jio has delivered on that promise and made off-net voice calls free again,” the statement said.
The news impacted Jio’s competitor, Bharti Airtel negatively. Times News reported that its shares slumped 2% in intra-day trades on December 31 after Jio made the announcement.
Bharti Airtel scrip was last seen trading around Rs 508.95, down by Rs 7.70 or 1.5% at 1504 hours on National Stock Exchange (NSE).
Meanwhile, India’s market watchdog handed Reliance Industries 250 million rupees ($3.42 million) and Ambani 150 million rupees for fraudulent trade practices they engaged it while selling a stake in a subsidiary in 2007.
The Securities and Exchange Board of India (SEBI) accused the behemoth of taking derivative short positions in shares of separately listed Reliance Petroleum back in 2007 through third parties before it sold a 5% stake in the business.
SEBI’s decision came with consequences. Reliance was asked to surrender about 4.5 billion rupees plus 12% annual interest for what the regulator said were unlawful gains from that deal. Reliance and some third parties were also barred from trading in derivatives for one year.
Reliance has denied any wrongdoing, saying the trades examined by SEBI during that time were “genuine and bona fide transactions” and that the regulator had “misconstrued the true nature of the transactions and imposed unjustifiable sanctions.”
The group is waiting for a Supreme Court appeal hearing against the 2017 ruling that imposed the penalty.
His vision is to be developed through many sectors, as he was working to transform the Jio group into a modern business conglomerate that will represent the digital vision he pitched and supports Prime Minister Narenda Modi’s digital transformation agenda.
Ambani received a $27 billion in investment fund from US tech investors and now he is under their radar to deliver.
Jio founder
The focus has been on 5G development that he plans to roll out early this year. But other lines of investment were also incorporated into his vision that got the blessings of Silicon and Wall Street’s big names.
According to Bloomberg, these include incorporatingFacebook’s WhatsApp payments service into Reliance’s digital platform; integrating the company’s e-commerce offerings with a network of physical mom-and-pop shops across the country; selling a stake in Reliance’s oil and petrochemical units, a deal he had originally hoped would reduce debt and finance his high-tech pivot earlier this year.
Ambani’s top agenda was ridding Reliance of its $22 billion debt that he set 18-months deadline for himself. The deadline was beaten in nine months, spiking the company’s shares. But that was just part of the problems; investors are keenly watching his every move to see how he transforms $168 billion Reliance amidst COVID-19 chaos and fierce competition from Amazon and Walmart.
While the focus has been on 5G roll out, Ambani is hoping that Reliance could cash in on other subsidiaries to deliver the dream. There was a plan to saturate India with $54 Android smartphones backed by Google, which he plans to execute leveraging Reliance’s dominance in India’s telecom sector. Ambani believes the cheap phones will help Indians to embrace the digital life he is about to introduce to them.
And then there is WhatsApp Pay, backed by Facebook, which offers an opportunity of growth to Reliance’s e-commerce venture.
“Reliance views the integration with WhatsApp’s recently approved payments system as a crucial step in the development of its online shopping services,” said the people familiar with the matter.
The company plans to harvest millions of Facebook, Instagram and WhatsApp users for its e-commerce platforms. One more area that Ambani is looking at is streaming.
According to a plan unveiled by Ambani and his eldest children Isha and Akash at the end of Reliance annual shareholder meeting in July, the new tech services to be integrated into their business empire early this year include streaming platform that will bring Netflix, Disney+ Hotstar, Amazon Prime Video and dozens of TV channels under one umbrella.
However promising the plans seem, Reliance’s reputation hangs on actualizing them and so is Ambani’s relationship with those sold his dream to.
“Reliance shares rose as much as 55% this year to an all-time high in September, but they’ve since pared gains as stakeholders look for more evidence that Ambani can execute,” Bloomberg noted.
With the stakes so high, the scuffle between SEBI and Reliance is something Reliance doesn’t really need.
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The Chinese telecom companies, China Mobile, China Unicorn and China Telecom came under the radar of US authorities following allegations of their ties with the Chinese military. The NYSE said on Thursday it would delist the three companies as part of president Trump’s order in November to bar 31 companies that Washington believed to be owned and controlled by the Chinese military.
The November order prohibits American companies and individuals from owning shares – outright or through investment funds – in companies the administration says help the advancement of the People’s Liberation Army.
“The People’s Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses,” the president said in the order.
The investment ban will take effect on Jan. 11, before president-elect, Joe Biden takes office. The NYSE said trading in the three companies will be suspended possibly as soon as Jan.7 or as late as Jan. 11.
China and US leaders
But China’s commerce ministry said the move violates market rules and it will take action to protect its firms.
“This kind of abuse of national security and state power to suppress Chinese firms does not comply with market rules and violates market magic,” the ministry said in a statement.
“It not only harms the legal rights of Chinese companies but also damages the interests of investors in other countries, including the United States,” it added.
The move appears to be Trump’s final onslaught on Chinese companies before he leaves office this January. The US Commerce Department added a list of Chinese companies to a trade blacklist in December, over allegations that Beijing is using them to harness civilian technologies for military purposes.
The list includes large state-run aerospace and construction companies, as well as technology and communication companies such as Inspur Group, Huawei and China Telecommunications Corp.
China has called on the United States to meet them half-way and go back to the table of bilateral talks. China’s senior diplomat Wang Yi said in a statement published on Saturday, that the relationship between the two world leading economies has reached a “new crossroads” and “a new window of hope” could now be opened.
The Chinese commerce ministry said: “We hope that the US and China will work together to create a fair, stable and predictable business environment for enterprises and investors, so as to get bilateral economic and trade relations back on track.”
COVID-19 deteriorated the already fragile economic relation between the US and China, with Trump calling the pandemic “China virus” and intensified his attack on companies of Chinese origin operating in the United States since 2020.
Beijing hopes that the soured relationship could be amended after Biden becomes president this year. But Biden said on Monday that he would “hold China’s government accountable for its abuses on trade, technology, human rights, and other fronts,” signaling that he may not dramatically alter the US-China relationship.
It is not clear how exactly Beijing is going to respond to the ban. However, the south Asian giant may be hoping in vain for a better treatment from Biden.
