Nov 022011

Lenovo Profit Rises 88%:

Lenovo said its profit rose 88% in the latest quarter, when the Chinese company passed Dell to become the No. 2 PC maker by shipments.

(Via US Business)


Moving on up. Expanding profits too!


It’s not clear if there are special reasons that profits expanded. Increasing sales seems to be done so often by lowering prices to gain access to more customers, thus driving down margins and total profits. Time will tell if Lenovo is able to continue expanding profits or if there were other factors that lead to expanded profits for this period.

Jan 012011


“The Year of Solving Other Peoples Problems”

Tagline: “What’s Your Problem?”

*This came about after thinking about how camera apps could create a viable business model. This coming year should be about solving problems other people have. People may call it service. Most of the time it is a service, there are a few times where it is an idea that is implemented and that scales and creates massive value for the user. The creator gets a healthy reward for creating so much value for the customer.

Example: Supplier creates a product that crates $1M in sales for their customer with a net profit of $250,000 (25% net margin). Regular net margin is 10%. This product is creating $150,000 in extra net profit. Perhaps a third of that will go back to the creator of the solution that created a million dollars of business and created the opportunity to grow net profits $250,000. If the supplier takes a third of the excess, that would be $250,000 NPM – $100,000  SPM (Standard Profit Margin) = $150,000/3 = $50,000. There is an incentive to create excessive value and profit for their customer. Think of the 1/3rd as being a performance bonus.

*Still to be figured out.

Q: What if the buyer is OK with a 10% SPM and uses the savings to drive market share and be more competitive versus their competitors?

A: These things will have to be negotiated and put in writing.