Branding, Prizes & System Sensitivity

Kodak : Can a Brand Too Strong ?

Just a quick memo, sparked by curious market behaviour around Kodak. In itself the market reaction to Kodak seems plausible based on a set of results and underlying business issues relating to it. But listening BBC R4 Today this morning it occurred to me that part of Kodak’s problem might be the failure to detached itself from it’s historically strong brand and the associations that go with it. Think Kodak, think Box Brownie, chemical film, photo paper, Red “K” on a yellow background (logo). Everyting else being equal, one still associates it mostly with photo technology of the past, despite its work on digital technology over the years. Perhaps that association (even conditioning or indoctrination)  is so strong in people’s minds that when a purchasing decision is made for a piece of photo technology, either by the individual or purchase manager (a micro-economic decision), that the “old-hat” paradigm has worked against the Brand, against strong competition. Remember Polaroid ?

In hindsight perhaps an re-branding or re-logoing could have helped this company to create a new paradigm, or association ?

Here’s a thought : Pick some famous and strong brands, that you associate with particular goods or services. Try to imagine them selling something new, but importantly, instead of the original product that you associate them with.

For companies, this is important for external branding, but also internal branding, where one is trying to sell to the workforce. Countries ? Working (branded) business philosophies and practices ?

What do Points Make ?

Nobel Prizes. It’s that time again. Talk about strong brand.

Update : Looks like cosmologists won the Physics prize for their work on observations of the accelerating expansion of the universe, cueing up dark energy and matter. I guess the maths don’t support it but it would be interesting if the reason that matter is accelarating away from us is not that it’s being pushed away by mysterious dark energy but that it’s being pulled or attracted by the mass of something more massive, beyond the observable universe. Perhaps the (dark) remnants of  previous universes or epochs ?

PS. Here’s one of Brian Schmidt, the Nobel Winner’s explanations : http://msowww.anu.edu.au/~brian/PUBLIC/public.html

System Sensitivity and Instability

Another morning R4 prompt here, on Robert Harris’ new book “The Fear Index”. The is a theme that’s been knocking around for a few years, but I think it’s important to mention the use of computer-only decision-making in the process of market trading. Such decisions are made by algorithms then communicated in milliseconds to another algorithm that buys/sells stock to any part of the world, far quicker than a human could with a phone or a mouse. Fallable though the human brain is, it can re-programme itself in the light of new information. Algorithms, in general , do not. So if something not anticipated by the programmer(s) happens, the connected system of decision algorithms will continue to make the “wrong” decisions, at lightening speed. I guess until someone breaks the cycle of “wrong decisions” the system can be said to have become unstable, dominated by positive feedback, driving towards a “breaking point” – when the elastic snaps.

Here, it’s not necessarily the algorithm at fault, but the speed of communication, decision-making and feedback, without check, that creates the potential for system instability.

It would be interesting to look at some data patterns here, comparing pre- and post-rapid commuications, so I may update. There’s also some classic systems and control theory maths behind this, but it’s been a while.

Update : have been looking at FTSE 100 data from 1984 onwards. Not sure of any obvious patterns (see below – FTSE amplitude (max-min) as a proportion of the middle level for that week), save the greater volitility post-2007 (no surprise).

Will get some stats tests out of the cupboard and report back.

P.S. While I’m writing, listening to “Capitalism on Trial” on BBC R4 in the background. Some good reminders about the purpose of money and economic system behaviour e.g. rapid generation of hidden risks, political time frames. I think I’ll need to “listen again”.

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About Dr_JAH

Independent Researcher
This entry was posted in Business, Decision-making, Fun, Physics, System Dynamics. Bookmark the permalink.

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