Freelance Consultant's Diary

Pfizer is providing an excellent example on how not to deal with product problems and recalls . While the drug industry has some unique attributes, there are several learnings that are applicable to other sectors as well. I have written extensively on Pfizer's mishandling of the recall of Bextra , it seems that Pfizer has another situation to deal with - a somewhat likely recall of another blockbuster drug Viagra. Based on the data presented so far, I think that the number of people affected is still small (unless others have not yet come forward). However, it is interesting to watch since that is how most drug problems come to light. If we go back and look at the recent recalls of other drugs, for instance Tysabri, Adderall XR (in Canada), Vioxx and Bextra, the first reports were generally of isolated cases. Thus, I do not expect a recall of Viagra right away but this could be the first step in the process. How has Pfizer responded to Viagra controversy so far? Let us review the t...

You might have heard that The New York Times had to cut back its staff and it is planning to charge for its online content. There is no doubt that it is one of the best English language newspapers in the world that I have read, but I ended my hard-copy subscription more than two years ago. In fact I get most of my mainstream news from Google News , and to read perspectives and other interesting tidbits, I visit blogs. Blogs are redefining how content is delivered today. Some of my readers read my articles without realizing that they are reading a blog (which is fine by me - that is the way I like it), but an increasingly large number of people are reading blogs the way they should read them. I have also written extensively how my friends in corporate America are still afraid of blogs and have no strategy in place to exploit them for a whole range of value-creating purposes. "Since I don't get it, I will ignore it," is the mantra. Let me mention some of the blogs that I r...

In this article I want to address the importance of mining of blogs and other online content by companies so that they can make sure that they know what is being said about them and accordingly respond to it. Your advertising and public relations efforts will be useless if there is a lot of negative content on the Internet about you. We live in a world where almost anyone with access to the Internet is now a publisher. You buy something at Wal-Mart, bring it home, you don't like it, and the next thing you do is to post a message on your blog about the product. Even though it may be an isolated incident of a bad product, but that information will remain on the Internet forever and will hurt your brand. People's decisions are influenced by what they read on the Internet. Let me give you an example. We recently received an unsolicited commercial email (or SPAM) from a Margaret Mayor at Freesites.com, a company that runs a business called AllFeeds that offers a program called ...

There is no doubt that you appreciate the power of networking. But networking is not something that happens only at professional events. You can successfully network at even at social gatherings. When I first went through sales training, my coach Chuck Steinke said, “All things being equal, you buy from a friend. All things not being equal, you still buy from a friend.” In other words, the more friends you have, the better off you will be. However, it is not easy to make friends and expand your network. It requires commitment, strategy, and patience. I have found that it is more difficult to network at business gatherings, well, just because people are more business-like. In other words, if someone does not see immediate benefit of knowing you, they want to meet someone that can be a potential customer or supplier or partner. Howsoever frustrating it may seem at conferences, but if you are not somebody , people do not even bother to say hello. Social settings, though, are quite differe...

The spa industry in the United States has steadily grown over the years and has become the fourth largest in the leisure sector. With as many as 15,000 locations in 2004 ( iProceed estimate), it has become a leading destination for well-heeled consumers who visit day spas, spa resorts, fitness spas, destination spas, and more recently, the medical spas. I recently attended the Spa & Resort and Medical Spa Expo in New York City and I was impressed how this industry attracts as much $12 billion from American consumers primarily through small enterprises. While some of the spa services have come under pricing pressure due to higher competition, spas have tried to offer more high-value services. At a time when supermarkets and mass merchandisers are selling spa-quality personal care products, spas are gradually transforming their business model to focus on anti-aging, rejuvenation, and even medical treatment. Hence, the emergence of the medical spa. A medical spa (or med-spa or medi-...

Advertisers now know that a lot of traditional advertising is not producing a desirable ROI while the cost of online advertising , while relatively more effective , is going up. For many startups and small businesses, a huge advertising budget is simply not an option. In other words, if they can not get creative, they may never be able to get their message across to the target market. (Related article: New advertising options needed to achieve good ROI ) One simple step that almost anyone can take is to focus on public relations (PR), apart from using advertising, word-of-mouth marketing or even guerilla marketing . The reason most business leaders tend to prefer advertising (over PR) is that it is easy to do. You pick what you want, pay for it, and the ad is there exactly as you wanted. However, with PR, it can take months before you see results, it is not easy to do, and you may not get the kind/type of exposure you would like to have. However, it generally costs far less than adve...

Dogpile , the meta search engine, recently did a simple study on three search engines: Google, Yahoo, and Ask Jeeves. They could not include MSN Search since it is still new to the search space. What they found was that with a sample of 10,000 queries 86% of the time they had a different #1 result on each website and 32% of these queries did not produce any overlapping results in top three positions. In another finding they found that just 3% of all paid and algorithmic results were shared by all three search engines. What does this mean for your search engine strategy? There is absolutely no way you can effectively optimize your website for all search engines or even for top five. Since each search engine uses a different algorithm and keeps changing it frequently, you simply can not make sure that all search engines will always like your website. In fact, in our research, we found that techniques that can get you top rankings in MSN may actually get you banned in Yahoo. Similarly, w...

Just early last week, I was discussing Google's business model with a client. What we were wondering though was that despite having people like me abandon even our corporate email addresses (I still use my iProceed.com email address on my business card, but forward all my emails to Gmail.com ), we still had no choice but to find another website like Yahoo to track my stock portfolio or to read my RSS feeds. I now realize that we were thinking about these issues while Google was putting finishing touches to its latest offering that will literally allow people like me to end our relationship with Yahoo for ever. Why is Yahoo so bad? (Related article: Yahoo is excellent at nothing but simply executes well ) Yahoo mail (that we all used at one time) is simply not good enough any more compared to Gmail. Yahoo search is simply useless since the results are almost always manipulated either by spammers or the so-called Search Engine Optimization (SEO) firms. In fact, MSN , that came to ...

Drug prices are among the highest in the United States. Of course, we are the richest nation in the world. Plus, due to the high cost of doing business here and the process of getting a drug through the approval can cost between $800 million to a billion dollars. All Americans understand that, but there is one more reason why the drug prices are high - we do not believe in a global market for drugs (or for other non-defense products), whenever it is not convenient for some corporations (who can then influence public policy). The myth that is disseminated by the drug industry (with the support of some lawmakers) is that the rest of the world has price controls and we don't. So Americans should pay higher prices because we get access to drugs sooner. (Related article: Why are drug prices higher in America ?) All these arguments are totally baseless and don't add up. They also defy all logical arguments based on globalization and free markets. In fact what shocks me the most is ...

The Guardian newspaper is reporting that scientists in Newcastle, England have successfully cloned a human embryo, a breakthrough that places them at the cutting edge of stem cell research. The clone was created as part of the group's research into new treatments for diabetes. At the same time, another group, lead by scientists in South Korea under the guidance of Woo Suk Hwang, also announced that it has perfected the technique to clone human embryos. That team went one step further than the Newcastle researchers by creating stem cells tailored to patients with specific medical conditions. All this is happening while we are struggling to even find the raw material to do research. Now, as one of my friend put it, I am excited about stem cell research because it may allow us to live for 250 years simply by allowing us to replace the organs that go bad. Well, it is my silly fantasy, but you understand what I am getting it. At this time I see two areas of technology that will have th...

Now that the talk of the town is globalization, it was no surprise that I got to attend a panel discussion on "Creating a Global R&D Organization." And I must say that the panel members were pretty distinguished, as they like to describe them - Christopher de Souza of Novartis , Robert Gould of Merck , Vicki Sato of Vertex Pharmaceuticals , Phil Vickers of Pfizer , and the moderator was Anil Khurana of Access International Partners, a group of management consultants . I think we are all convinced that the cost of bringing a pharmaceutical product into the market (currently estimated to be somewhere between $850 million to a billion dollars) is simply not sustainable. As the market for drugs and healthcare globalizes (which I am convinced is going to happen no matter how much the drug firms want to delay it), the cost pressures will simply be too much to do all the drug development work in the developed world. (Related article: Offshore outsourcing of Pharma R&D ) Ano...

Written with Jay Srinivasan, Director at Siemens. Before Siemens, Mr. Srinivasan was the Director of eBusiness Strategy at PricewaterHouse Coopers and Director of eCommerce at Compaq and Digital Equipment Corporation. A modified version of this article has also been published in the Global Finance Magazine . Recently we volunteered our time to help organize a conference for entrepreneurs. When we needed to print a brochure for the attendees, instead of running around to find if anyone knew a printer, we just went to PrintIndustry.com (operated by Printing Industry Exchange, LLC, Ashburn, VA). In a matter of hours, we had several bids from all over North America, and as we later found out, from printers outside North America, but who were working through their agents here. Similarly, when we needed a new logo design, we posted a bid on Elance.com (Mountain View, CA). Again the bids poured from all over including Romania, Bulgaria, India, and Pakistan. But what happened to all those e...

The marketing of prescription drugs (almost always to those that have health insurance coverage) is a stupendous task. Just look at the advertising budget of pharmaceutical companies. In fact, the research-driven pharma sector actually spends more on marketing than on R&D. It is not easy to convince an over-medicated nation to buy even more drugs. For the same reason, pharma tries to use the government to let it sell more drugs. According to the Center for Public Integrity, the pharmaceutical and health products industry spent $758 million on lobbying from 1998 through June 30, 2004, including $92 million by PhRMA itself, $54 million by Pfizer , $34 million by Merck and $30.3 million by Schering-Plough . The total is more than any other industry spends on lobbying, according to the center's report. I have been trying to find growth opportunities in a highly underserved segment - the uninsured . Marketers often wrongly assume that all uninsured Americans (I am using the term ...

While there never was any consistency in search results (sometimes referred to as SERPS also), things are only getting more confusing now. At least since end of March, we have noticed on our portfolio of websites that there is absolute chaos. Here is what we are finding at each search engine. Google In every session that you do a search, you are likely to get different results. The definition of session in this case is starting the browser. It does not matter if you have deleted cookies or not - the results are still the same. We have confirmed this with unique search terms, e.g. MYNIPPON and similar other unique names that we use for our domain names. What is consistent though is the number of backlinks and pages indexed. In other words, Google, as always, is in turmoil. MSN Currently producing the most stable results. In fact in many ways we find Google results to be the cleanest. They have been able to keep crooks out so far and their results are of the highest quality. It could ve...

The travel firm Thomas Cook, not known much in the US, but a big player in many European and Asian countries, has announced that it will offer "sun and surgery" package deals to India for patients tired of waiting for operations in Britain's National Health System. The firm says that it is using Britain to test the market. Thomas Cook will offer deals that include flights, operations, accommodation in a private hospital and even recuperation time on the beach. Many clinics in Mexico, Brazil, Thailand, and Europe have already been offering such packages for Americans who want to have plastic surgery overseas , simply because it is so expensive to have surgery in the United States, and if a procedure is not covered by insurance, there is no incentive to stay in the United States. (Related article: India emerges as a healthcare destination for Americans ) In my opinion, the American healthcare system is ready for a big jolt from globalization . It is no secret that or health...

Much is being made of Wal-Mart missing its earnings while Target beating analyst expectations. First, it is important to note that these results are not yet indicative of a long-term trend. Two, Target did extremely well with its credit card operations (which I do not consider core to its business and should not be included in comparing Wal-Mart's performance, which does not issue its own credit cards). The overall retail sales were still good in the United States though Wal-Mart was hurt in its European operations. Will you shop at Target or Wal-Mart? A lot of my audience shops at neither store. They are just too rich to bother with prices. For them, the closest they come to value-shopping is the monthly trip to Costco or BJ's or Sam's Club. But as a management consultant , I can ignore neither Wal-Mart (world's largest retailer and an intriguing company for those of us who make a living by analyzing strategy) and Target (the coolest company among discount retail...

I want to discuss an innovative company called July Systems (Santa Clara, CA) that enables mobile content retailers such as operators, portals, content providers and brand owners to retail mobile content. The reason I choose to discuss the company is that while I attended a presentation by its founder and CEO Ashok Narasimhan what struck me was the firm's strong focus on globalization. There is some good news for entrepreneurs here from Narasimhan. Globalizing an existing enterprise is no joke. The larger the organization the more difficult it is to make it global and change the culture. We are already seeing this when we hear that companies have had bad experiences with offshoring (which in some ways is a step towards globalization). But if you have just started or are planning to start a new company , you have to think of globalization from day one. In other words, when you think of strategic sourcing (of people, capital, raw materials, etc.), physical proximity should be only o...

I recently attended a conference session with many New England area researchers from the biotech and pharmaceutical industry. The conversation moved to risk management and I ended up talking about drug recalls (particularly Vioxx and Bextra) as being critical issues to consider in developing a risk management framework. (Related article: How to avoid distractions like product recalls ?) What surprised me was the ferocity with which the researchers opposed any drug recalls. Mind you that Vioxx was voluntarily recalled by Merck and Bextra was recalled only after months of foot-dragging by Pfizer . The company essentially left FDA with no choice. The researchers suggested that drugs should simply carry warnings rather than be recalled. (Related article: Bextra recall hurts Pfizer ) All product recalls are extremely painful for everyone in the value chain. The litigation process that sets in almost immediately after a recall can mean bankruptcy for the companies involved. The researcher...

It is no secret that selling to young women is far more difficult than any other segment. It is even more difficult to sell them things like apparel, shoes, makeup, and fragrances, simply because it is like selling snow to Eskimos. So how did Curious Britney Spears (a fragrance for women by Britney spears) become a huge success (the largest fragrance launch ever) in Australia? Case study of launch of Curious Britney Spears by Elizabeth Arden Create a buzz. The company organized focus groups to better understand the demographic trends even before anyone had any idea what the fragrance would be. In other words, it is possible to prepare for a launch even before you have a product. It allows you to develop a better understanding of your target market (e.g. what media channel works best , what price range is acceptable, etc.) while the R&D folks work on the product. Guerilla marketing . Elizabeth Arden, in collaboration with Channel V (equivalent to MTV), organized a dance party for 1...

I was highly encouraged by General Motors' strategy to embrace embedded advertising in September of last year. I have been arguing for a while that traditional advertising is in serious danger but looks as if the message is still not getting through to the advertisers. I often wonder in what world they live! (Related article: Case study of embedded advertising ) What works is online advertising these days but despite the remarkable performance of online advertising , it constitutes just a drop in the bucket. According to Mary Meeker of Morgan Stanley, only 3 percent of the total ad spend is on Internet advertising. So it was good to hear that General Motors, that is in serious financial trouble, is acting again to do something about its advertising strategy . The company announced today that it will consolidate responsibility for its media assignments in the United States at the Publicis Groupe. In a statement, GM said, "GM put its U.S. media buying assignment up for review ...

I am intrigued by the Yahoo business model . Yahoo is a follower in every single area but has still done reasonably well. During most of 2001-2003 period, Yahoo's stock price hovered in single digits and teens at best, it is now trading in the $35-40 range. From less than $1 billion in sales in 2002, the firm had over $3.5 billion in sales last year. So the question is Does it pay to have no competitive advantage but good execution? So the announcement that Yahoo is launching an online music service to take on iTunes , Rhapsody , and Napster simply shows that a price war will commoditize the music download business within a matter of weeks and the winners will be companies like Yahoo that have the critical mass to market it to a broader base of potential users. Examples of companies that create value through good execution There are numerous examples of companies that execute really well and that itself becomes the foundation of competitive advantage. Walmart , Home Depot , Target...

The effort to privatize Social Security did not go anywhere and is on its way to a slow death. In any case, even if something happens, it will be not be at the scale at which the president wanted it. So what went wrong? Let us analyze this failure (from previous successes) since there are so many lessons for business leaders, particularly those that do business with consumers. (Related article: Impact of Social Security privatization on businesses ) Success stories of Bush Administration From a marketing standpoint, the administration has achieved two remarkable successes since 2001. War on terror, particularly Operation Iraqi Freedom. President Bush had solid support from many American people because those that were strong supporters of war did not have to fight it. If you can see all the action from your couch while sipping chilled beer, it is easy to agree with the president. Discrimination against gays, and more specifically, denying gays the right to marry. Bush owes his election...

After a long and painful wait, the Merck board of directors decided to fire Raymond Gilmartin. I had then commented that the Pfizer board should do the same and replace Hank McKinnell, if for no other reason than for destroying shareholder value by imitating Gilmartin. (Related article: Gilmartin gone; time for McKinnell to go ) It seems, however, that Gilmartin is a McKinnell's hero since he continues to imitate his strategy even after it has been proven that it doesn't work. Now, almost as if he was repeating Gilmartin's words, McKinnell now wants to bring Bextra back on the market. If you recall, Merck wants to bring Vioxx back after it recalled due to as many 140,000 personal injury cases in the United States alone. What does it mean for you? It is OK to admit mistakes and change your strategy. In a recent study, it was found that companies that did not follow their strategy from their business plans were more successful than the ones that stuck rigidly to it. Strategy ...

As a business executive (and more specifically, as a management consultant ) I have to communicate with all sorts of people. Now, unlike politician, if people who listen to me do not do what I tell them, my purpose is defeated. The same is true for most leaders. They have to not only communicate but also motivate the listeners to do something. As all of you are well aware, people come to meetings, barely listen to what you have to say, and then by the time they arrive back to their desks, they have forgotten 90% of what you told them. And what is forgotten can never be done. So the key is that not only should people understand what you are telling them, it should be so engaging that they will remember it without even writing it down. Ever wonder why people remember stories and jokes more than their company's mission? So I attended an excellent conference MiT4: the work of stories , organized by MIT . You might wonder what a business executive is doing at a conference on storytellin...

Companies often talk about improving their gene pool and fire employees each year supposedly with that goal in mind. However, not all companies do a great job at that and it often is an exercise by managers to get rid of employees that they do not like. But why should this goal apply only to junior and middle-level employees. Why is this so rarely applied to top level executives. Let us take the example of Merck. Raymond Gilmartin completely screwed up how he handled the recall of its blockbuster drug Vioxx . Not only has he destroyed over $25 billion in shareholder value , he might very well be responsible for laying the foundation of an eventual bankruptcy . But it took the Merck's board of directors over seven months to recognize that a change in the external environment required a change in management. Merck's board has failed again by appointing a Merck insider as the new CEO. Improving the gene pool generally means bringing some fresh blood. If Gilmartin will con...

Towards the end of March, 2005, there was absolute chaos on the Internet due to the search results from Google . There were many theories put out there on what was going on but it seems that no one had a clue, but what we did see was that the results (sometimes called as SERPS) were erratic and inconsistent. Or in other words, the discussion about rotating algorithms was correct. Then came the PageRank update in April and many websites lost their original ranks. Since March, many websites have also seen steep drops in their traffic. How did we do? We either got higher PageRank in all of our online media properties or maintained. We also learned that there really is no significant correlation between PageRank and traffic. So should you worry about PageRank? Not all that much. What you should worry about is providing good content that makes life of your readers better. You often see websites with no content (just results copied from a search query to attract Google ads) or just ...