Walmart, US, Japan, China, we

Learning from the experience from Brazil of providing banking services to the poor brings mutual benefit to financial institutions and the poor. Walmart does the same exercise in US to offer the 200 million adults who either don't have a bank account or use few bank services(BusinessWeek 7 Feb 2005) . This not only provide profits for the banking sectors but also build a credit history for the small enterprises for future financing.

The boost of US productivity in the late 90s through walmartization may be the cue to success for US. China also wants to import the style of Walmart in doing business to brainstorm the existing retailing industry inside. (Newsweek 20 Dec 2004) Maybe she learn the experience of US success in extending the productivity through its extensive network and she understand the lessons of Japan walling itself off from outside competitors.

The style of extracting innovation in technology is the success of Walmart. That is to say we need not to be the innovators or high-tech expertise to succeed. Intimating Walmart.

PCCW --> Cable TV --> China

Latest publication on Time magazine(Asia) unveils the possible future development of PCCW. Riding on the top of the dotcom mania, Richard Li, materialized his conceptual company to a telecom company with a successful LBO. Many rumors at that time argued the political conspiracy of the purchase of HKtelecom against the rival, Singtel. As this is not his father's style of conducting business -- "Buy in diaster", someone doubts the likelihood of interventions from Chinese government of protecting the sensitive infrastrusture in Hong Kong.

Anyway, after the burst of the tech bubble, PCCW materialized but also characterized as one of the most debt-ladened HSI constitute stocks. By several tactics -- commercial loans, stocks sales, sales of mobile division, subcontracting, IPO of its property-related divison, there are not much left within the company. The most profitable section -- the Hong Kong Telephone company -- whose earnings received good rating for further fund raising. However, under the fierce competition of the fixed line services, the sector proportion of the fixed line services drops dramatically as it is not possible for the company to adjust down the price at its own will without permission from the authority.

Hong Kong is a good laboratory for the testing of the service with a handful of curious testers. The service of Network of the World(NOW) has gained market share rapidly to 35%. Its strategy to gain the market share is by flexibility. By allowing its customers to add or drop channels freely on a monthly basis, this greatly drives down the cost of subscription which is an entry barrier for most of the users. Unfortunately, it doesn't expect much profit from it, as Hong Kong market is saturated with several competitors.

The successful model can be applied to the broader China market. The Chinanetcom invests in PCCW strengthened the connection between them. To be success in cultivating the whole China market, again, to be flexible is the key to achieve the goal. Since each city may have different localized culture, PCCW should try hard to enrich its content efficiently and try to be the first mover to gain the market share.

Fixed telephone is dead. Pay TV doesn't guarantee a certainly promising future but PCCW has no other choice.