The “Tuna Can” strategy

 “The key to a man’s heart is his stomach” is a well-known Arabic proverb that essentially narrows down a woman’s duties to the kitchen. As degrading as this may be to women, one can’t ignore the fact the food essentially takes up the most important moments of the day and if you are acquainted to the Lebanese cuisine then these moments will become almost “sacred”

I recently got married and my wife moved with me to KSA and since she is in a “transitionary phase” she needed a hobby. Having lived on her own since she went to college and then joined the work forces right after graduation let’s just say that cooking was not her greatest feat. So and in order to fill up a part of her time my wife decided to take on cooking and started preparing our lunch home! Yes feel free to feel sorry for me for being a guinea pig.

In theory, my wife is a great cook because of her mother’s tips and instructions. And although she did some “training” before marriage, her mom was always there to save the day in case something went wrong so you can say so she has never tested her wings on her own.

On the eve of the first “training” day we struck a deal between us. My wife isn’t the biggest fan of tuna but if left without any other option she can accept it for a meal. The deal was as follows: whenever she started cooking a new and complex meal she would keep a tuna can on the sink in front of her. The “tuna can” served 2 purposes: 1- it was enough motivation for her not to fail because otherwise she will have to eat something she doesn’t like. 2- In case her project failed, there will always be a backup plan. Needless to say, the strategy is a fruitful one! Sure enough she sometimes forgets the salt or is stingy with the seasoning and spices but overall it can be considered a success.

The” Tuna Can” strategy can work for you as well in any business situation; in fact, it is a must. The purpose is to always push an individual or a business to try something new or try doing things “differently”. Being skilled at 1 thing will not last forever neither will it help you in all the situations. You may be extra good at something but if you fail to develop it or build a new skill you might fall off the grid. Take Nokia or Kodak for example who were not only good in their industries they were the leaders yet they painfully fell off of the peak in no time. Had they had the courage to challenge themselves and try new strategies they might have stayed in the front seats.

Any skill you might have will never blossom unless fully put to test; and although the most challenging part is moving out from the comfort zone you do not necessarily have to entirely go out of that zone and this is where the “tuna can” comes in. The purpose of your “tuna can” is to act as a cushion for you whenever you leave your zone to try something new yet it should be something you strongly dread. This back up strategy should be simple as well and not complicated in order to be a temporary “fix” and at the same time not to consume much of your efforts as you fall back to bounce forward again to a different strategy. For Example, Nokia could have used the Android OS on their phones for a period of time until they had finalized one of the 2 OS systems that they were trying to build in-house rather than being stubborn and falling short of materializing any of those 2.

As much as the “tuna can” meal is easy and fast to prepare so should be your back up strategy just squeeze some “lemon, olive oil and a pinch of salt” and off you go!

As a procurement professional, I started implementing the “tuna can” strategy to my approach with existing and potential suppliers, I have trained my team on it as well and the results have been encouraging! This was a much needed step as we steer towards 2017 in a very challenging economy that requires us to change from “this is how it has always been done” to “this might actually work!”

If you are reading this, then this means I have survived both my wife’s cooking and her feedback on this article! Take your time to find your “tuna can” although I warn you, your spouses might not be as forgiving as mine!

 

 

The “Brangelina” Story as a Business Model

The story of Angelina Jolie and Brad Pitt can be compared a lot to that of Daimler-Benz and Chrysler merger although the first one lasted 3 years longer than the later. At the time it happened, it was considered a merger made in heaven between 2 big superpowers and at the time it was over it was deemed worthless. For the sake of our story we will consider Brad Pitt to be Daimler Benz and Angelina to be Chrysler.

When Brad “merged” with Jolie he had a small foothold in America (Jennifer Aniston) which was somewhat not fully satisfying him. Brad (Daimler) wanted to expand his reach in America and he came across Jolie (Chrysler) a luxurious, flashy and highly in demand brand at the time and they both clicked. During the years that ensued, Brad went on to strengthen his foothold in America (Daimler building factories in the USA) while Angelina drifted away from her core business (less movie appearances) and did not increase her territory (Chrysler failed to expand into Europe at the same pace that Daimler expanded in the USA). During that tenure Brad was rumored to have had some flings (Daimler’s stake in Mitsubishi and Hyundai motors) but both were ended or denied. Trouble kept coming with Angelina (Chrysler) suffering the most – nervous break downs, double mastectomy and eating problems (Daimler Chrysler merger came to an end in 2007 just one year before the financial crisis when Chrysler took bailout money from the US federal government)

So now what?

For Brad: He will probably keep moving along and searching for bigger and smaller stakes here and there to try to polish his image (Daimler has a small share in the Nissan Renault alliance to help the German manufacturer in building small cars and EVs) Ironically he is rumored to have cheated on Angelina with a French actress (anyone else sees the humor here?) or to increase his reach in unexplored territory (50% stake in the Chinese automaker BYD and 12% in Chinese BAIC as well). He is unlikely to find another “Chrysler” or to settle back to a “small foothold” but he will be “everywhere” (Daimler has operations in 16 countries!)

For Angelina: the “old” lady will have to wait for a Sergio (CEO of FIAT) to come along; someone who wants her for her great past and who hopelessly believes that this past will push him forward to grandiosity; he will be happy enough to carry her big debt (6 children) but unfortunately he won’t get anything. Sure enough every now and then she can give him a “jeep” but that won’t cover the investment. She will drag him in to what she has always done and he will fumble along still thinking that he can get a bigger foothold in America (Sergio Marchionni still hopes he can revive FIAT in USA through Chrysler.)

In the world of business, mergers in the “same line of business” either face spectacular success or fail spectacularly. Unfortunately the 2nd option prevailed for our 2 actors in this case just like the Daimler Chrysler case; and as in most failure cases one gets out damaged more than the other and so far it seems that Angelina has had the shorter end of the stick. As the wise man once said “if it is too good to be true, then it probably is!”

Microsoft’s “Strategic” Mistake

Nokia’s life and death in the mobile devices industry is that of a fairy tale gone bad. After dominating the global market in the 90’s and mid 2000’s, a series of bad business decisions led to its dramatic downfall and demise. And although the climb was slow and painful, going downhill was as fast as a free fall. Nokia’s failure to remain competitive can mostly be attributed to failing in predicting the market trends, its slow reaction to technology and customer preference changes and the lack of an effective leadership to steer company ahead.

By 2013 it was obvious that Nokia needed  a savior; its global market share in the smart phone market had slipped to 1% or less, to add to that the company was facing fierce competition from local phone makers in both China and India which were once the company’s stronghold in the low end cell phone market. At this point, the company had only two options either to shut down the mobile device department or find a possible partner/buyer.

When Stephen Elop joined Nokia as CEO in 2010, the company was not in its best shape and form but also at the same time it was no secret that Microsoft was expressing interest in entering the smart phone market and it was no secret also that they wanted to do so through an acquisition. During that time, Nokia was struggling between two in-house operating systems instead of focusing on exclusively one so when Elop joined his first decision was to kill both systems in favor of windows OS. At the time, he justified his choice by claiming that he was seeking “differentiation” but soon after the first windows phone were rolled out Nokia announced that they will also produce android phones (how does that really differ from having two in-house OS?)

Turns out, all this was made in the purpose of setting the stage to ripen an acquisition by Microsoft. Elop did his job, Microsoft bought Nokia and all lived happily ever after….. Well not really because the story has just begun. No matter how great an idea is, if the execution does not rise to the occasion then the whole idea is just a big failure and this is where Microsoft seems to be headed to. Microsoft made two strategic mistakes in a very short period 1- They announced that they will remove Nokia’s from all their mobile devices. 2- when signing the deal with Nokia, there was a penal clause that forbid Nokia from independently producing cell phone devices before the end of 2016. Really now? Only 2016? You do not forbid such a strategic player from re-entering the market for such a short period only! Because despite all of Nokia’s failures in the recent years, the name alone was a leverage and Microsoft underestimated the power of the brand name and here are two big examples for why is that.

Example 1:  Back in the 90’s IBM was leading the market of personal PC’s with its legendary Think Pad laptops which dominated the business world but towards the end of the decade, IBM had decided to divest this department in order to focus on its core business. Lenovo, an up and coming Chinese manufacturer and seller saw the opportunity and jumped to it and they were able to acquire the division. Inside the corridors of Lenovo there was a debate on whether to keep the name “Think Pad” or kill it, eventually the proponents of keeping the name won and it turned to be a winning strategy since people related to the name and the confidence in the laptops was not lost despite being bought by a Chinese company which at that time still meant that Chinese products were substandard and not of a good quality.

Example 2: Nissan Motor Company is a remarkable car maker and one of the market leaders these days but they were not always that successful… nor were they always called Nissan…. The company that will soon celebrate its 100th anniversary changed hands of ownership many times in its early periods and just like any Japanese industry they focused on efficiency and reliability, two features that earned them the hearts of many car enthusiasts around the globe but under the name Datsun and not Nissan. So when the top management decided to kill the name in 1986, it proved to be an almost lethal mistake. The company went in a downward spiral because the confidence and familiarity that came with the Datsun name were lost by Nissan and people were not so welcoming of the new name so in addition to the rebranding costs and the marketing campaign to change the names, the slipping sales of Nissan nearly brought the company to its knees and led to drastic measures including hiring the first ever non-Japanese CEO to a Japanese company – The Lebanese Mr. Carlos Ghosn, and also hundreds of lay-offs, a decision that until that date was unheard of in the Japanese culture. 12 years after that, Nissan revived the name Datsun and is reaping the benefits of such a decision.

A third indirect example can be derived from the stories of BMW and Mercedes Benz, both car makers own or “owned” luxury brand cars and compact cars. BMW owns Rolls Royce and Mini Cooper while Mercedes owns the struggling Smart and until recently they produced the now defunct Maybach luxury cars. The reason why the first is successful with both brands and the second is failing is very simple: “differentiation”. BMW differentiated both brands and gave them a separate identity while Mercedes tried to associate them with its brand as much as possible just like Microsoft is doing so with the smart phones unit. Sometimes imposing a successful brand name on a different product can have a reverse effect and instead of acting as a leverage it would drown it….

A short while ago, Nokia announced that they were planning a comeback to the smart phone which poses a real and direct threat to Microsoft. When Microsoft purchased the cell phone division, they neglected the Nokia maps software which turned out to be one of the most valuable assets which is currently the target of many companies from cell phone companies to car makers. This alone can help in marketing and selling the new Nokia phones. The re-entry can be cheap for them and they can opt on choosing android OS just like the tens of cell phone makers in the industry. Along  with their maps and other solutions that Nokia is famous for it can prove to be a winning combo. Moreover, they might come back to their senses and work on redeveloping  their in-house software because the world might be ready for a new breakthrough.

Both companies are treading a fine line here because a comeback in the tech world is almost impossible and none has been able to do it so far. But in Nokia’s favor there is a remarkable brand name………..

As Oil Profits Decline, ISIS Taps Into A New Resource: Archeological Artifacts

ISIS top man is almost a ghost, a man of very few appearances and whenever he does show up he makes sure that all the 6 billion inhabitants of the planet know about it. In one of his staged appearances, the whole wide world seemed to ignore all what he said and focused on one thing: The Rolex watch in his hand. After all the guy does have an exquisite taste but it’s not his taste what matters here, what matters is the fact that traditionally Rolex watches have been linked to the big money owners, the affluent and successful business leaders and this here is the core of the issue.

Since its debut, ISIS has shown business skills as equally as military skills and although one would question how can you form a well trained and highly occupied militia in a fortnight, some sorts of business successes can be done in such a short time especially when the resource is strategic, offers high returns and the competition is virtually non-existent. All these apply to oil so it was normal and understandable that the first thing ISIS did after invading parts of Iraq and Syria was to control oil resources; they even advertised a job opening in November 2014 for an oil field manager to manage their valuable asset, and put it back on the right track all the while pushing competition out of the market by turning to the black market to sell their oil for prices as low as $20/barrel and sure enough there was never any shortage of customers. But that was just a short lived phase because the world which was happy with the low prices at the beginning quickly realized that the negative effects reached as far the shale oil rigs in North Dakota. That was when the US led a coalition in order to presumably stop ISIS and they started their air raids and soon enough it was obvious that those raids where just orchestrated to prevent ISIS from entering certain areas of interest; for example the raids were really effective and served their purpose when ISIS threatened the federal state of Irbil yet not even one plane left base when the Yazidis were being slaughtered and pushed to extinction.

With oil profits drying up, the rolex-wearing business man had to tap into another resource that is abundantly available in the area he controls (and no I’m not talking about dates); actually this area is extremely rich in archeological ruins and artifacts that are valued in many millions of dollars and which have a buyer base that is as enthusiastic and deep pocketed as the oil clients ( just today I heard that someone paid $187 million for a Picasso painting, so can you imagine how much they would pay for a 4000 year old statue?)

And as any smart investor he first tested the grounds and he did so in Mosul. People sat horrified in front of their tv screens as they watched ISIS fighters tear down and break apart statues that were almost older than humanity itself but then they all sighed in relief after archeologists came to say that most of the statues on display were dummies and replicas and that the real ones were hidden. Great news, now instead of having to tour all the sites, ISIS can go to one central warehouse and find all what they need to sell (that’s how you cut your supply chain costs and increase profitability, told you this guy was a business man in a previous life!)

A few days ago, the US military euphorically announced the killing of a top ISIS oil expert along with 40 aides (maybe that was the dude who replied to their 2014 ad and got hired) yet they sat and watched as the militia entered the 4000 year old Palmyra which we call Tadmor; again no planes flew over that area (starting to sound a bit eerie no?) there also is a great historical reserve and while after the attack on Mosul ISIS videoed how they were destroying the ruins, nothing has come out of Palmyra yet and I don’t think anything will because  the guys will be busy making deals to sneak as much as they can out of the country and sell for whatever prices they can get – after all they need the money and the same parties that had no problem in buying ISIS oil have no problem buying those valuable ruins and historical artifacts either. UNESCO has confirmed it and EBAY as well – you can find many valuable coins on e-bay and for relatively low prices.

ISIS seems to be investing heavily in 3 things that are highly profitable, oil, the trade of rare artifacts and prostitution – 3 commodities and services that has been sought out since the oldest time and although they claim that prostitution and all what is related to tourism are against their dogma it seems they have little trouble when it comes to making money of them for after all and like one of my MBA professors used to constantly state “It’s not unethical, it’s just business.”

The “Hawthorne Effect” of the Tobacco Industry

In the 20’s of the last century, the Hawthorne Factory in USA commissioned a series of studies on their employees that led them to conclude that any attention whether positive or negative can lead to increased productivity. Although the effects were short lived and limited only to the duration of the study the important realization was that the negative attention was as effective as positive attention in giving good results. The concept of the study was simple and all they did was improved the lighting conditions for their employees which increased their productivity then they dimmed the lighting more than the normal level and also productivity increased. Later on those studies were branded as the “Hawthorne Effect” and up till today they are taught in organizational behavior courses.

Of all the industries on which you could see the Hawthorne effect it is perhaps the most evident in the tobacco industry – the industry which has been facing a brutal war since well before the 90’s- the main goal of this war was to stop all the exposure and the attention that the industry was enjoying due to its annual multi-million ad campaigns and drive it back to obscurity. Over the course of years, lobbyists and anti-smoking activists all over the world successfully enforced many laws that varied from banning smoking in closed places to banning any sorts of tobacco related advertisements. Interestingly, and instead of diminishing the attention and the noise that this industry was getting it helped push it more into the limelight. Today, rarely a day passes without a mention of the Tobacco industry.

The Date: 22 October 2006

Location: Sao Paolo, Brazil

Event: the last Grand Prix for the 2006 Formula one season

This marked the last year of tobacco sponsorship for Formula One Racing before the FIA ban became effective in the 2007 season. Out of the 11 teams that were on the start line there were 3 teams that were co-owned by Tobacco companies (mild seven Renault, Lucky Strike  Honda and Scuderia Ferrari Marlboro) those companies decided to stay in that sport till the last minute while others opted to leave a year earlier (Mclaren Mercedes was known as West Mclaren Mercedes a year before and Benson & Hedges were major sponsors for team Jordan before selling out at the end of the 2005 season to SPYKER MF1 Racing. Not to mention all the other companies that came and went over the years. It is estimated also that the tobacco industry spent a whopping 700 million USD on the 2001 formula one season injecting huge amounts of funding to that sport.

For the first while, one might think that this was the ultimate victory for the anti-tobacco community; after all they have conquered the tobacco marketing fortress and took down their last stronghold. The “Godfather” of Formula One was given its final blow….. Or has it? Let’s take a moment here to think of the string of events that happened later on because all what actually happened was that the anti-tobacco fanatics helped the tobacco companies save millions of dollars on marketing and instead they spent their money in marketing for them. From 700 million dollars in 2001 to almost zero dollars in 2007 just think of the things that this industry is capable to do with such an amount especially that they kind of “outsourced” the marketing to the lobbyists who were fighting them. It is now the lobbyists who are still spending millions of dollars per year on marketing campaigns and anti-smoking ads which only helps keep the tobacco industry in the limelight. This here is a reversed Hawthorne effect; the negative attention given to the tobacco industry gave it more and more attention. 7 years after the total ban, it is still a thriving multi-billion dollar industry thanks in a big part to the same lobbyists. The Tobacco industry has not disappeared; it has just reached higher levels.

Today, the tobacco industry has found more ways to get free marketing by using some social media platforms. They do not advertise their products but instead advertise the companies themselves. For instance, British American Tobacco is very active on LinkedIn in advertizing its sustainability and its activities and how they are being chosen among the best 100 employers in the world. You would think for an instance that after all the villainizing that this industry has been exposed to almost no one would want to work there yet instead the tobacco companies are among the best and most attractive employers.

Regardless of the right and wrong concept when it comes to this very controversial industry and without delving into any of the health drama, what happened here is a case of reversed results. The lobbyists tried to “dim” the light on the Tobacco industry and send it to obscurity but they ended up putting it in a different kind of spotlight. This is one industry in the world that is actually enjoying the “free lunch” concept to its fullest while some else is doing the job for them.

What if Russia Closed the Valve?

History is loaded with lessons of past events that are so similar to current issues, it is  also loaded with examples that should teach us to be wiser in dealing with those current issues based on the mistakes and decisions of those who were there before us. And in the case of the current Russian-Ukranian standoff and how the rest of the world is dealing with it, past lessons are not so old and it should not be difficult for us to remember them and learn the moral from the story. In WWII, Nazi Germany crawled as fast as it could towards Russia and got to Stalingrad. Hitler’s orders to his troops were get Stalingrad or die. The Russians, with their ice cold patience waited and waited until winter came; the Germans froze and the rest is now history. If there is a lesson to be learnt from this story is that the Russians are patient beyond imagination and an attrition war against them will surely be lost. Imagine President Putin sitting in a room full of valves that control the gas flow from Russia to the rest of the world and imagine that he decides to close that valve that goes to Europe, what will happen to the continent that relies on Russia for more than 30% on average of its gas consumption necessary to warm that continent up? They can revert to Alcohol to stay heated but then again, where does most of the world’s vodka come from? They can’t rely on Whiskey because Dubai is already gulping the biggest quantities of that drink and I am sure that most of Europe can’t compete with that city’s purchasing power so back again to that vicious cycle and again Putin is controlling more valves.

Wars are never fought for causes whether righteous or not, wars are strictly fought for economic reasons (https://gajreige.wordpress.com/2014/01/13/war-and-economy-the-all-time-best-friends/) no country is willing to invade another country and waste billions of dollars on just “humane basis” nor is a country willing to defend another one for the same reasons. Take the Syrian war for example, early on Qatar supported the uprising and rooted for it in all possible ways and the claim was to support the rights of Syrian people but the real agenda is totally somewhere else. Sitting on some of the world’s largest natural gas wells, Qatar is the third globally in LNG (liquefied natural gas) exports lagging behind Norway and Russia, but the tiny country has ambitious dreams to oust Russia from its throne as Europe’s number 1 supplier and continue its march towards the continent after already establishing a stronghold both athletically and economically. But alas! Geography stands between dreams and reality. Being so far from Europe, Qatar can’t compete with Russia since liquefying gas and mounting it to vessels and shipping it half-way around the globe is a very expensive process that Russia has countered through its extensive pipeline chain in the continent. So what Qatar needs is an exit on the Mediterranean or an access to Europe through pipes; Russia’s close alliance with Syria was standing between Qatar and its access to a Mediterranean seaport where it could send the gas through pipes either to a Mediterranean seaport and have it liquefied and loaded on ships for a very short trip to the nearby European continent thus slashing a lot of the costs or even better yet go through Syria and then into Turkey and to the rest of Europe from there with its pipelines and in this way they would be breaking the Russian monopoly. If you take this into consideration, you will understand why Russia is defending Syria so dearly and why all the recent tension between them and Ukraine, the country through which also lots of the Russian gas goes to Europe.

A few days after the crisis started, European Union countries threatened to sever their economic ties with Russia; the continent that still has not recovered from the economic crisis may have rushed into a hasty decision. The first hint came from the Germans which stated just a few days ago that the rest of Europe might actually be the one hurt and not Russia because “we are pushing Russia more and more to rely on China” which will be a strong hit to the already suffering continent. Keep in mind that this statement came from the strongest economy in the Eurozone, so if Germany is saying that what do you think will the situation be in the rest of the PIGS? Here’s a hint, last spring I contacted a certain Spanish supplier in order to explore the possibility of importing some Broccoli and iceberg containers for the company I work for; in the first and also last phone call, the sales agent that took my call simply answered me “currently Russia’s demand for those 2 items is so strong that we are barely keeping up with the demand of our customers there and we can’t afford to start new business” she didn’t even care what was the quantity I needed or if she could have possibly made more profit on my orders rather than Russia’s orders. This year, and if the union goes through with their decision, I have a strong feeling that she will be contacting me and offering me the goods.

US stocks fumbled on the same news also as USA threatened to take a similar stance to its neighbors, Russia was fast to counter and pulled out a massive amount of cash that it has traditionally deposited in the federal reserve’s vaults and this sent massive shock waves in the US economy and this is just the tip of the iceberg. If the USA decides to further pursue this strategy, then the Chinese-Russian allegiance will get even tighter which will tighten the grip on the American neck that is already under the mercy of the Chinese economy (the balance of payments is way tipping off in China’s favor you might even think it’s broken)

A few years ago – in 2009 to be exact – A Russian Ukranian standoff led to Russia closing its gas valves and prices went sky high and further hurt the ailing continent. It is almost spring now and the Europeans might not need to keep warm but the coming winter is right behind the door and just like in WWII’s Stalingrad, the Russian polar bear has enough cold nerves to wait and wait and strike back when the time is right. Bear in mind that the man on top of Russia’s political pyramid was performing war tactics and perfecting his chess abilities when the rest of the current world’s leaders now were rocking it out to Beatle’s concerts or in the case of Mr. Obama getting high on Marijuana – he might be an old bear that’s true but with age comes wisdom and in this case lots and lots of wisdom. 

This is Why Lenovo should purchase Blackberry

When I came back home to Lebanon for Christmas vacation in 2009, I was amazed by how popular Blackberry was in my little country especially among kids and teens, the most unlikely customer base for the most popular business phone. 8 months earlier when I first left, the smart phone was virtually non-existent in our market. I returned back to the USA after the holidays just in time to witness Blackberry’s downward spiral in Northern America while at the same time their global market share peaked. Blackberry’s 5 minutes of fame was short lived and what was once an owner of 43% of the US mobile phone market is now struggling to sell a few million devices with studies showing that they now barely control a little of 3% market share. Imagine yourself skydiving and for some reason the parachute doesn’t open; this is how fast Blackberry went down. Attributing this decline to the I-phone is not accurate or nowhere near the truth because in 2010, apple’s iconic product had already been there for 3 years and it was struggling for taking the scraps of blackberry.

Of course the ailing giant is now an easy target for interested investors but for some reason it is not really attractive. Those who seriously considered making a bid can be counted on one hand; a main reason behind that is the Canadian’s Government intervention and their close eye on all possible candidates. The reasons are obvious; it is still the device of choice for all Canadian and US governments and for most North American companies which raises lots of flags related to safety, security and confidentiality.  One of the biggest candidates – Microsoft – is out of the game after they purchased the Finnish Panda Nokia. I called Nokia a Panda because just like the Pandas, they were on the brink of extinction due to continuous failures in delivering competitive new products and losing market share so fast and they still are not officially saved. Of those candidates, 2 names stand out: Fairfax Financial Holdings and the Chinese computer company Lenovo. Not surprising at all is that the Canadian government favors Fairfax because it is a Canadian company first and second because they have bitter memories from when the Chinese targeted another Canadian giant – Nortel – and tore it down until it filed for bankruptcy in 2009.

Yet, the wise decision would be to allow such a transaction to happen if the Canadians are serious about saving the company. Unlike the late 90’s and early 2000s when Chinese companies were merely copycats (remember the fake nokia, sunny and many others?); Chinese companies have recently proved that they are hungry to develop themselves, differentiate their products and invest more in R&D to become more creative and the best part of it all is that they have tons of cash and/or access to massive funds when needed.

Lenovo specifically is a great example because what was formed originally by the Chinese government to organize the selling of imported computers in the Chinese market evolved into a giant that ended up purchasing IBM’s personal computer division with all the benefits and privileges that came with such a purchase. 8 years after the purchase, Lenovo has not destroyed IBM’s Think Pad as some skeptics might think; instead Lenovo prides itself with owning the best business laptop currently in the market. And this is exactly why the purchase makes perfect sense. Ever since rolling out its first smart phone with push email service on it in 2000, Blackberry enforced its image as the provider of the cell phone with the best business solutions and strongly capitalized on this image. It was a regular phone with all the other features that cell phones at the time had including games (remember the long hours you spent playing brick breaker and almost breaking the phone whenever you missed a ball?). To make a long story short: the business pc maker will be marrying the business cell phone maker, a happily ever after story?

One of the reasons behind blackberry’s demise is their failure to acquire big market shares in the big and growing Chinese market, whether it was because of a weak marketing network or in failure to appeal to the young Chinese consumers, Lenovo can circumvent that with its strong marketing network and its privileged position that it currently enjoys. It can increase brand awareness in China and it definitely has more access to a wider sales network.

In 2009, President Obama imposed a 35% tariff on Chinese tires imported to USA, the direct reason was to implement a safeguard provision to protect US manufacturers that were under the threat of losing their jobs. Of course the real reason is very different from that and it has to do with the silent economic war going on between the 2 countries; those same reasons banned a Chinese company from buying Hummer from troubled GM in 2009 and banned Huawei and ZTE from competing for US government contracts. By purchasing Blackberry, Lenovo will be able to avoid any possible embargo and enjoy better access than its Chinese counterparts to the North American market.

It is true that Lenovo does currently have a mobile device unit, but how many of you have actually heard of it? What is its market share? And what are its sales numbers? If Lenovo wants to be successful in that division and obviously this is where the future is now, they need to differentiate themselves and have a unique product. With its unique features and massive amount of patents, Blackberry can be Lenovo’s answer. Sure they can use android OS just like Samsung, LG, ZTE, Huawei, Sony, and Motorola….. Should I go on?

A few days ago, Blackberry announced that it has scrapped its plans to sell itself and instead they have resorted to re-financing themselves and try to save the company on their own through a cash flow offered by Fairfax. But despite that had they gone forward with their selling plan, most probably the Canadian government would have interfered to stop the sale to Lenovo because of their tight relationship with the Chinese Government. But for once, this would have been a purchase that would have actually made sense and would have worked – Anyone following Volvo’s news recently?