Quality electronics, cars, cheap booze and communication giants

The consumer durables industry seems the have made higher profits this year despite a decrease in it's sales. The reason is quited to be high end product sales which come with high profit margins. Trigger for this, higher income groups are on the rise and consumer durables are seen as a lifestyle products. People are simple ready to buy higher end products even if it means they are paying substantially more than what it is worth. A good branding and marketing statergy.

Car maker Chystler wants to cut down on the number of cars models it is producing. It wants to eliminate cars in it's portfolio that are very similar. This is a good move for providing better quality products without increasing the burden of maintaining a lot of similar cars. I think Bajaj did a good job here. Pulsar was the only model to maintain while many versions were released tailored to meet the increasing demands. A good strategy to increase the return on investments. The unfortunate part of this is that the resale value of the bike is very low. However, it's a great bike and people are not really looking at resale when they by it. Better quality is the keyword.

The liquor giant United spirits wants to restart the production of cheaper liquor. Karnataka government's ban on local liquor or toddy has increased the demand for cheap liquor and USL feels this is a good time to reintroduce it's earlier products. The other factor is the availability of molasses at cheaper prices. Instead of reintroduction, can the company club the above 2 strategies? Make the not so selling liquor brands cheaper and sell it still maintaining the "brand image" of a higher quality liquor? Also, the other end, hype the good selling ones a bit more and sell them at a better premium? The lesser stuff to maintain, the better needs to be understood.

Alcatel Lucent has suffered huge losses the past year. This is despite a merger of the 2 giants and a product portfolio reduction. It would perhaps be good to see the maintenance costs of it's various versions and overlapping products. Instead of making 5 networks elements each with 3 versions, may be a consolidated 2 network element providing the above functionality with options to customise it, and a single version to maintain, might, just might, reduce the tremendous opex these communication giants suffer. The companies have started facing losses due to competition and tight profit margins. Mergers help eliminate competitors (if you cant fight the enemy, befriend him!) but the profit margins are still an issue. Do the operations want to still take up the the maintenance costs when the customer is not willing to pay you for it? It just might be that they are drowning in their own greed to have all products in their portfolio?