Filed under: Competitive strategy, Marketing and advertising, Abercrombie and Fitch (ANF)

Who can forget the advertising campaign a number of years back that threw social watch dogs into fits over Abercrombie & Fitch (NYSE: ANF). That particular advertising foray employed the lithe bodies of teen and preteen boys and girls in a way which, while certainly drawing attention, underscored today’s excessive use of underage sexuality in advertising. Parent groups and child protective agencies were enraged, as well they might be. However, a recent ad campaign launched by Beyonce and her Home of Dereon, clothes for girls, makes Abercrombie’s misadventures look about as harmless as a day at the zoo.

A blog post presented by our sister blog Styledash, reveals the shocking truth about the clothing ad campaign, which is the brainchild of Beyonce and her mom, Tina Knowles. Blogger Kristen Seymour espouses the danger in this type of advertising by describing the presentation in the terms of “Go on, baby, and earn your lunch money the old-fashioned way.”

The gallery provided by Styledash is self-explanatory and might serve to turn the stomachs of little girl’s parents everywhere. Certainly, Beyonce and her advertising bureau have accomplished what they wanted to. We have the ability to also believe that Abercrombie & Fitch shall benefit slightly with a parallel focus to its own questionable advertising strategy. However, we need only to remember the enigmatic fate of JonBenet Ramsey to realize down which road this type of advertising strategy may lead.

(Thanks to Styledash for the tip, Additional thanks to Gawker)

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Filed under: Bad news, Products and services, Launches, Consumer experience, Competitive strategy, Bristol-Myers Squibb (BMY)

Shares of French drug maker Sanofi-Aventis (NYSE: SNY) have been tumbling more than 5% in morning trading on news that a Swiss drug maker said it expects to receive approval to sell a generic version of Sanofi’s anti-clotting agent Plavix.

History is repeating itself. After facing generic competition in the United States to its second-biggest product in 2006, Sanofi-Aventis is now dealing with a similar threat in Europe. Competition concerns came after Switzerland’s Schweizerhall Holding AG announced it would launch a copy of the Plavix blood thinner that could be purchased for a lower price. Schweizerhall said it expects German regulators to approve its generic version of Plavix, called clopidogrel.

Sanofi-Aventis’s fears about generic competition are justified as the company had to fight against a similar situation less than a year ago. Back in 2006, Bristol-Myers Squibb Co. (NYSE: BMY), which develops the product with Sanofi, saw a big plunge in its sales after Canadian generics company Apotex Inc. launched a cut-price copy of the drug.

Commenting on the news, analysts at Merrill Lynch expressed their worries about the company’s earnings per share, which may be hurt by generic competition to the Plavix drug in Europe. In addition, they believe that Schweizerhall will launch the drug despite valid patents in Europe.

Sanofi responded to the threat of a possible generic competitor in Europe by promising to “vigorously defend intellectual property rights, including patent protection, in Germany.” An unnamed analyst also stated that German authorities will be closely watched for any indication that clopidrogel infringes Sanofi’s patent.

Eliza Popescu is a financial writer for the on the internet investment advisory service Investor’s Observer.

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Filed under: Bad news, Competitive strategy, Employees, Boeing Co (BA)

The Boeing (NYSE: BA) 787 Dreamliner has been delayed three times, mostly because of problems with suppliers.The situation has gotten so bad that some of the company’s customers, massive airlines, say they’ll ask Boeing for compensation. That could cost Boeing a lot of money.

Boeing management has promised that there will be no more delays and that everyone who wants a plane will get one, on time. But, the best laid plans…

The company’s big unions may stage work slowdowns. They argue that the work given to suppliers should have gone to them. They claim that delays could have been cut. Of course, now they want to delay the program further all on their own.

“Unions have the upper hand now,” said Richard Aboulafia, an analyst with Teal Group, an aviation consulting firm in Fairfax, Virginia, told Bloomberg. “They’re determined to get their share of the good times.”

Boeing management now faces more criticism because its own labor force can’t be held in line. The company’s stock has already dropped due to the delays. First suppliers, now its own people.

The news shows that incompetent management usually stays incompetent. Boeing did not control its supply chain, and did not know it had component problems until too late. Now it will be accused of not even keeping tabs on its own unions.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Deals, Competitive strategy, Google (GOOG), Yahoo! (YHOO)

After Microsoft Corp. (NASDAQ: MSFT) walked away from a $40+ billion dollar deal with Yahoo, Inc. (NASDAQ: YHOO) this past week, competitor Google, Inc. (NASDAQ: GOOG) was very, very relieved. After all, a combined Micro-Hoo would have been a significant competitor (in a best-case scenario) to Google. To help dissuade both parties to make a deal, Google ran a two-week test on Yahoo! to supply the competitor with its own advertising system. The test went well.

Now that Yahoo! has proved that is could one day dump its search technology and outsource that piece of its business to Google, Google executives are looking for that exact scenario. They believe it will help prevent another attempt by Microsoft to buy Yahoo! in the future. They’re probably right — if Google were to become one of Yahoo!’s largest partners, there would be issues with Microsoft buying Yahoo! now or in the future, from a regulatory perspective.

Google co-founder Sergey Brin stated that “We have been speaking to Yahoo and we are very excited to be working with them … we share a lot of values with them” in his remarks at yesterday’s annual Google shareholder’s meeting at Google’s Mountain View, Ca. headquarters. Brian added that a potential deal with Yahoo! was “not about scuttling (the deal).” Hogwash — I state that was exactly why the Google-Yahoo! test was performed. Look for a Yahoo!-Google search advertising partnership in the very near future, folks.

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Filed under: Competitive strategy, Netflix, Inc. (NFLX), Blockbuster Inc ‘A’ (BBI), Battle of the Brands

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Way back when, the movie-rental wars were fought between the neighborhood video stores (which had limited availability) and the superchain Blockbuster (NYSE: BBI) (which had limited availability except for the Die Hard series). Then, Netflix (NASDAQ: NFLX) came along with an astonishing business model. Set up an account on the web, build a mammoth list of movies (from tens of thousands available), receive a few in the mail and send them back when you’re done — no late fees, but you only got new movies when you sent old ones back.

At the time, Blockbuster — and many consumers — didn’t think it would work. First of all, you had to wait a day or two to get new movies; and second of all, who was going to want to deal with sending movies back in the mail? I mean, gosh. Well, eventually, Blockbuster caved and started the same kind of service. When you compare the two, however, which one takes the cake?

What Netlix Offers: For $16.99, you receive three DVDs in the mail. These movies come from the top of the personliazed list you create on the Netflix site. Delivery times vary, but local distribution centers can usually get them to you in two days. You can keep these DVDs as long as you want; but, if you never return them you never get anything new. Which is a real bummer when I Am Legend is gathering dust on your TV set. After you’ve watched one, or more, send it back in the provided postage-paid envelope. Within a few days, your next movie arrives in the mail. As of now, Netflix offers a total of nine (9) membership plans, from one-at-a-time to eignt-at-a-time. You can also buy DVDs through the site, in addition to watching certain movies for free.

What Blockbuster Offers: For $19.99, they have the same kind of three-at-a-time system (but nothing more than three). The main difference is that members have the option of returning movies at “participating” Blockbuster stores; however, they can only do this several times a month and after that there’s a $1.99 rental charge. Some of their premium packages offer free unlimited in-store exchanges, but the late fee can be applied to these in-store rentals.

Who Wins? It depends on how you operate. If you’re online savvy, keep your queue of films updated and don’t mind the day-or-two wait, Netflix is tough to beat. But if you like the convenience of dropping by a local store and immediately exchanging it (like, state if you really don’t like the motion picture you rented) then Blockbuster is your man.

B. Brandon Barker also writes for Political Machine.

Vote in our poll for Netflix or Blockbuster as your preferred brand, and let us know in the comments why you love it.

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Filed under: Competitive strategy, Netflix, Inc. (NFLX), Blockbuster Inc ‘A’ (BBI), Battle of the Brands

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Way back when, the movie-rental wars were fought between the neighborhood video stores (which had limited availability) and the superchain Blockbuster (NYSE: BBI) (which had limited availability except for the Die Hard series). Then, Netflix (NASDAQ: NFLX) came along with an breathtaking business model. Set up an account online, build a mammoth list of movies (from tens of thousands available), receive a few in the mail and send them back when you’re done — no late fees, but you only got new movies when you sent old ones back.

At the time, Blockbuster — and many consumers — didn’t think it would work. First of all, you had to wait a day or two to get new movies; and second of all, who was going to want to deal with sending movies back in the mail? I mean, gosh. Well, eventually, Blockbuster caved and started the same kind of service. When you compare the two, however, which one takes the cake?

What Netlix Offers: For $16.99, you receive three DVDs in the mail. These movies come from the top of the personliazed list you create on the Netflix site. Delivery times vary, but local distribution centers can usually get them to you in two days. You can keep these DVDs as long as you want; but, if you never return them you never get anything new. Which is a real bummer when I Am Legend is gathering dust on your TV set. After you’ve watched one, or more, send it back in the provided postage-paid envelope. Within a few days, your next motion picture arrives in the mail. As of now, Netflix offers a total of nine (9) membership plans, from one-at-a-time to eignt-at-a-time. You can also buy DVDs through the site, in addition to watching certain movies for free.

What Blockbuster Offers: For $19.99, they have the same kind of three-at-a-time system (but nothing more than three). The main difference is that members have the option of returning movies at “participating” Blockbuster stores; however, they can only do this several times a month and after that there’s a $1.99 rental charge. Some of their premium packages offer free unlimited in-store exchanges, but the late fee can be applied to these in-store rentals.

Who Wins? It depends on how you operate. If you’re on the internet savvy, keep your queue of films updated and don’t mind the day-or-two wait, Netflix is tough to beat. But if you like the convenience of dropping by a local store and immediately exchanging it (like, state if you really don’t like the movie you rented) then Blockbuster is your man.

B. Brandon Barker also writes for Political Machine.

Vote in our poll for Netflix or Blockbuster as your preferred brand, and let us know in the comments why you love it.

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Filed under: Bad news, Products and services, Management, Consumer experience, Competitive strategy, Marketing and advertising, AMR Corp (AMR), UAL Corp (UAUA), Oil, Delta Air Lines (DAL)

In reaction to surging fuel costs, several major airlines announced this day that they were raising their fares in order to recoup some of their rapidly increasing flying costs.

The increase this time around is $20 and effects passengers traveling on UAL Corporation (NASDAQ: UAUA), Delta Air Lines, Inc. (NYSE: DAL), and AMR Corporation (NYSE: AMR)’s American Airlines. The $20 jump in prices will be added to the airline’s fuel surcharges, and consequently, these charges are now running at $130 round trip on most flights that you will book through the airlines.

The current rate hike was first initiated by Delta, and marks the second time in just over a week that the airline has been forced to raise fares in order to combat record high fuel costs. Times are definitely tough for airlines, and they are doing everything they have the ability to to combat fuel prices, but regardless of the rate increases most analysts are still anticipating to see big losses this year from most, if not all, airline carriers.

The airlines are definitely in a tough situation right now. They are being forced to raise their rates to cover their costs, but at some point you have to assume that passengers are going to cut back on flying in reaction to the rising costs, and this would really put a crunch on the carriers that are already struggling to keep their heads above water.

With oil prices continuing to trade at record high levels, don’t be surprised if you see more rate hikes coming in the months to come. Definitely a tough year for travelers: whether you’re driving to your vacation spots or flying, the costs just keep on rising.

How do you think current fuel prices will impact your travel plans for the summer? Will you continue to take your vacations as normal, or scale things back a bit in reaction to the rising costs?

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.

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Filed under: Bad news, Products and services, Management, Consumer experience, Competitive strategy, Marketing and advertising, AMR Corp (AMR), UAL Corp (UAUA), Oil, Delta Air Lines (DAL)

In reaction to surging fuel costs, several major airlines announced this day that they were raising their fares in order to recoup some of their rapidly increasing flying costs.

The increase this time around is $20 and effects passengers traveling on UAL Corporation (NASDAQ: UAUA), Delta Air Lines, Inc. (NYSE: DAL), and AMR Corporation (NYSE: AMR)’s American Airlines. The $20 jump in prices will be added to the airline’s fuel surcharges, and consequently, these charges are now running at $130 round trip on most flights that you will book through the airlines.

The current rate hike was first initiated by Delta, and marks the second time in just over a week that the airline has been forced to raise fares in order to combat record high fuel costs. Times are definitely tough for airlines, and they’re doing everything they can to combat fuel prices, but regardless of the rate increases most analysts are still anticipating to see huge losses this year from most, if not all, airline carriers.

The airlines are definitely in a tough situation right now. They’re being forced to raise their rates to cover their costs, but at some point you’ve to assume that passengers are going to cut back on flying in reaction to the rising costs, and this would really put a crunch on the carriers that are already struggling to keep their heads above water.

With oil prices continuing to trade at record high levels, do not be surprised if you see more rate hikes coming in the months to come. Definitely a tough year for travelers: whether you’re driving to your vacation spots or flying, the costs just keep on rising.

How do you think current fuel prices will impact your travel plans for the summer? Will you continue to take your vacations as normal, or scale things back a bit in reaction to the rising costs?

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.

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Filed under: Consumer experience, Competitive strategy, Whole Foods Market (WFMI)

Recently, the Environmental Working Group stated that celery is one of the so-called “Dirty Dozen,” the twelve most contaminated fruits and vegetables on the market. As I was chewing on a piece of celery at the time, I began to notice the bitter overtones of what I assumed was a nasty chemical fertilizer. I began to wonder if it might be sarin or perhaps some dioxin derivative. Completely unable to enjoy my snack any longer, I resolved to find some organic celery.

After a long and fruitless (vegetable-less?) search, I finally broke down and decided to go to Whole Foods (NASDAQ: WFMI) . There, tucked into an extensive and impressive collection of colorful veggies, I found what I was looking for: fresh, organic celery. The price? $4.99.

To be honest, if I’m paying $4.99 for a vegetable, I expect it to pick my daughter up from daycare and maybe help out with the rent. I’m used to paying between $1 and $1.25 for a bunch of celery, which made Whole Foods’ prices seem like a particularly tasteless joke. However, rather than throw the celery to the ground and loudly denounce Whole Foods as a bunch of money-grubbing ripoff artists, I politely returned the bunch to the counter and left.

There were two reasons for my restrained response: first, I’m saving up my first arrest for something special, like picketing Anne Coulter’s funeral, and there’s no way I’m getting carted off for yelling at a bunch of celery opportunists. The second reason is that I wasn’t really all that surprised. You see, I’ve gotten used to Whole Foods’ massively inflated prices and somewhat snotty attitude.

Apparently, I’m not alone. In a recent survey by Mambo Sprouts, an organic and natural foods marketer, 30% of respondents stated that they’re now shopping at natural food chains, like Whole Foods, less than they were six months ago. By comparison, only 9% stated that they had cut back on their visits to Trader Joe’s. On the other side, 12% said that they were shopping at organic chains more than they were six months ago; 19% said the same of Trader Joe’s. While shoppers are getting increasingly concerned about the contaminants in their food, they are also unwilling to pay the premium that markets like Whole Foods charge.

Maybe it’s time for Whole Foods to realize that poor people want to eat well, too!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He thought about buying some honey at Whole Foods, but he couldn’t afford the mortgage.

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Filed under: Products and services, Competitive strategy, Procter and Gamble (PG), Battle of the Brands

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

When it comes to multi-bladed disposable razors, how many blades is enough? In the long-standing rivalry between the two biggest brands of disposable razors, the current answer seems to be five. For now.

The Gillette company, which in 2005 became part of Procter & Gamble (NYSE: PG), invented the safety razor in 1895, as well as the first razor marketed to women in 1916. They started the current arms race in multi-bladed disposable razors by introducing a twin-blade razor in 1971, and then the triple-bladed Mach 3 in 1998. Schick responded with the four-blade Quattro in 2003, then in 2005, Gillette introduced the five-blade Fusion. Of course, each of these models includes a version for women, and versions with various bells and whistles.

St. Louis-based Energizer Holdings (NYSE: ENR), a U.S. manufacturer of batteries, bought the Schick brand of razors from Pfizer (NYSE: PFE) in 2003. Outside the North America and Australia, the same products are sold under the Wilkinson Sword brand. Either way, Schick remains a distant second to Gillette in global sales, though some analysts saw patent infringement lawsuits filed against Schick by Gillette as evidence that Gillette recognized a potential threat. Combined, these two brands account for nearly all razor sales in America.

Gillette’s rational for the Mach 3 that the extra blade reduces irritation and requires fewer strokes. So for the Quattro, it apparently was a case of four must be better than three, and likewise with the Fusion, though Gillette claims that more blades with narrower space between them creates a “shaving surface” that distributes the shaving force across the blades, making the shave more comfortable. What do you think? Is five blades superior than four, which is superior than three? What comes next?

Vote in our poll for Gillette or Schick as your preferred brand, and let us know in the comments why you love it.

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