1. Submit articles to article directories.
2. Conduct link exchange activity with other blogs and websites.
3. Run a teleseminar.
4. Be a contributor on Yahoo/MSN Answers
5. Create a blog and join MyBlogLog.com
6. Create a MySpace.com account and make friends with your target market.
7. Create a viral report with links coming back to your website.
8. Generate a software product that you distribute free but advertise your website in it.
9. Build an article directory for a hot niche market
10. Produce a useful web-based software for public use
11. Ask thought-provoking questions
12. Build viral videos and upload them to Youtube.com
13. Buy links from Text-link-ads.com
14. Submit classified ads to USFreeAds.com
15. Publish content based on the latest news or unique items to tap on long tail traffic
16. Optimize your webpages for meta tags, title tags and H1 tags
17. Run online contests with kick-ass prizes
18. Run article exchange campaigns with HTML links in them
19. Generate your own social networking site
20. Join and participate in the Internet Marketing Singapore forum to get suggestions and ideas
21. Produce an unbelievable product and sell it on Clickbank.com
22. Auction off cheap digital items on eBay
23. Write articles for major sites like About.com
24. Create a regular PDF newsletter
25. Talk to 5 people every day about one piece of content on your site
26. Visit online guest books and leave a comment
27. Visit other blogs and contribute actively on a regular basis
28. Use banner advertising on banner exchange programs like BannersgoMLM.com
29. Seek out joint venture partners to promote your site/event
30. Purchase leads from a co-registration service
31. Write an offline book
32. Distribute flyers
33. Sponsor an event with prizes that have your website on it
34. Run a charity event
35. Submit a press release to PRWeb.com
36. Use resell rights promotions
37. Produce a web or blog template using Open Source license
38. Create a community with a community badge/chicklet for identity
39. Look for newsworthy information and syndicate to Digg.com
40. Use your MSN nickname/message
41. Provide a free download on your site with a message on the back of your business card
42. Leave an email signature
43. Have a tell-a-friend form
44. Newspaper advertismenets
45. Direct response mail
46. Regular podcasts
47. Run a “live” seminar
48. Create an affiliate program
49. Get invited to events
50. Run a 24-hour answering service
51. Give people the right to syndicate your content
52. Keep your content fresh
53. Create multiple offers
54. Use ping sites for your blog
55. Use article submission services like ArticleAnnouncer.com to create backlinks
56. Give a DVD out for free that requires opt-insk
57. Car decals with your website on it
58. Generate a member-get-member promotion
59. Offer a 50% sale for products on your site
60. Create an online community of friends
61. Invite 10 people to visit your site on a regular basis
62. Print t-shirts with your URL
63. Advertise in trade magazines
64. Advertise in the main newspapers
65. Radio interviews
66. TV interviews
67. TV advertisements
68. Use Google Adwords
69. Use MSN Adcenter
70. Use Yahoo Search Marketing
71. Use Adbrite
72. Getresponse Co-registration service
73. Optimize your website for a specific, targeted key phrase
74. Use PayPerPost.com to get bloggers to write about your site
75. Run a Web 2.0 community
76. Advertise in the Yellow Pages
77. Directory submissions
78. Affiliate directory submissions
79. Direct email campaigns with list owners
80. Use direct response postcards
81. Build a free software directory
82. Build a free image directory
83. Offer a bonus product during a product launch to JV partners
84. Use well-optimized websites and content
85. Bait providers to visit your website through eLance.com and Scriptlance.com
86. Purchase outdoor advertising space at targeted locations
87. Create an Opt-in mailing list
88. Visit and participate in forums related to your niche.
89. Build more backlinks for popular keywords
90. Narrow your market to a specific niche
91. Build more websites within related niches
92. Attend more seminars to gain connections
93. Use a Feed Reader to subscribe to RSS feeds - comment on targeted posts
94. Have multiple distribution locations for a physical product
95. Create your own products and let affiliates sell them
96. Blog controversially
97. Deliberately start an online war (flaming - not recommended)
98. Look for related websites in #1 position and buy advertising space from them
99. Set up account with Squidoo.com
100. Set up account with Hi5.com
101. Set up account with Multiply.com
102. Set up account with iConnectE.com - A Singaporean social networking site
103. Set up account with Huminity.com
104. Do a giveaway rights promotion
105. Build a presence on 43 things
106. Create an affiliate promotion with Clickbank
107. Run a Cost-Per-Lead program
108. Run a Classified on http://www.Mocca.com.sg
109. Find a Cause to support and promote the cause
110. Get people involved in your community
111. Use a tell-a-friend script and place this automatically with people have opted-in
112. Run a blog carnival
113. Use games to “tag” people
114. Encourage article exchanges
115. Request people to submit articles that you will display on your blog for free
116. Build a free online widget that people will use
117. Join discussion groups on Google, Yahoo or MySpace groups
118. Advertise on Alexa.com
119. Use Global SMS service
120. Leverage Craigslist.org
A collection of tips and tricks I find valuable on how to make and deal with money
Monday, 30 June 2008
101 Methods To "PR" your website
Thursday, 17 January 2008
Case Study: Marketing plan for Cable and Wireless
BACKGROUND
Company Profile
Cable and Wireless is a global communications group. The company has been recently restructured into two businesses: international and UK. The international business offers mobile, broadband, domestic and international fixed line services to customers in the Caribbean, Panama, Macau, Monaco and the Channel Islands. The UK business besides providing enterprise and carrier solutions to customers in the UK, the US, continental Europe and Asia. The company primarily operates in the UK. It is headquartered in London, the UK.
The company recorded revenues of £3,230 million during the fiscal year ended March 2006, an increase of 9.6% over 2005. The net profit was £175 million in fiscal year 2006, a decrease of 50.6% over 2005. The company recorded a net profit in fiscal year 2006, despite an operating loss, owing to a gain on the sale of non-current assets (£83 million), other income (£85 million), interest income (£80 million) and profit from discontinued operations (£90 million).
Key Issue
Decline in revenue (Poor operating performance) and Negative returns. The company recorded revenues of £3671 million during the fiscal year ended March 2003, a decrease of 16.4% over 2002. Revenues declined significantly in the Caribbean, recording a decrease of 16.3% over fiscal 2003. European revenues decreased by 13.8% over fiscal 2003. The company recorded lower returns than the industry average. Its five year average returns on assets is negative 10.09% as compared to the industry average of 3.26%. Furthermore, its five year average returns on investments is negative 14.98% as compared to the industry average of 4.37%. The company would need to effectively manage its assets and investments to ensure that returns are at par or higher than industry average. C&W recorded a poor operating performance in fiscal 2006. The company recorded an operating loss of £67 million during fiscal year 2006, compared to an operating profit of £131 million in 2005. Cash flow from operations has also declined to £56 million in fiscal 2006, down from £247 million in fiscal 2005. A continued decline in operating performance could result in a liquidity crisis, hampering the company’s capital expenditure strategy. The company must combat the causes of such a significant decline in revenues if it is to remain competitive and retain its standing within the industry.
C&W has been recording negative returns compared to its peers in recent years. During the five year period 2002-2006, the company’s return on assets, investment and equity were -23.5%, -35.2% and -51.1%, respectively, compared to the corresponding industry averages of 1.4%, 1.9% and 8%. Negative returns indicate considerable scope for improving resource utilization and operating efficiency.
Methodology
Analytic Tools
To complete a relevant research on Cable & wireless to identify the key issues I will be using various ways and look in to various factor.
•Internal environment
SWOT analysis: we will be looking at strength (key success factors) weaknesses opportunities and threats. Various performance ratios will be analysed to determine the effectiveness and the efficiency compared with industry competitors (benchmarking).
•External environment
Porter’s 5 forces: the attractiveness of the telecommunication industry in which cable & wireless operates will be measured using, bargaining power suppliers, bargaining power of buyers’ threat of new entry, threats of substitute and competitive rivalry.
Industry/Market profile and analysis: The telecommunications industry as a whole will be evaluated to determine new markets and opportunities in the industry as a whole.
PEST analysis: This will used to appraise the political, economic, social and technological issues that affect cable &wireless.
Research Methods
The group has carried out primary and secondary research. We have derived first-hand information from a staff of Cable and Wireless and. Secondary research was performed; journals, newspapers, annual reports and the internet has been used to abstract the information required to analyze and propose options for solving the problem of the declining revenue and poor returns of Cable and Wireless.
Internal Environment
Cable and Wireless (C&W) is an international telecommunications company. It provides voice, data and internet protocol solutions to business and residential customers across the Caribbean, Panama, Macau, Monaco, the Channel Islands, the UK, the US, continental Europe and Asia. C&W has extensive networks, which allow it to deliver quality telecom solutions. However, the liberalization of the markets in which C&W is the incumbent operator is leading to increased competition, which could result in a loss of market share.
SWOT Analysis
Strengths
Extensive networks
C&W has an extensive network infrastructure. With a world class internet protocol backbone network, the company is a tier 1 operator in Europe. The company’s network in the US allows it to serve 311 US metropolitan areas. C&W has interests in 78 major international cable systems, which provides it with access to every continent.
The company’s Global Roaming Exchange network allows mobile operators in over 70 countries to route General Packet Radio Service (GPRS) traffic to far end operators. C&W also has national telecom networks in the UK, the Caribbean, Europe, Asia, Panama, the Middle East, and in the Atlantic, South Pacific and Indian oceans. An extensive network allows C&W to deliver quality voice, data and internet protocol solutions to customers.
Strong international business
C&W has a strong international business. The international segment, which accounts for 37% of revenues, provides mobile, broadband, domestic and international fixed line services to residential and business customers in 33 countries in the Caribbean, Panama, Macau, Monaco and the Channel Islands. The company is the incumbent operator in most of its markets. C&W is the market leader in 18 out of the 22 markets in which it provides mobile services. It is also the market leader in all of the 21 markets in which it provides broadband services. As of March 2006, the international segment had 2.7 million mobile customers, 275,000 broadband customers and 1.5 million fixed line customers.
The mobile and broadband sub segments are largely driving the revenue growth of the international business. In fiscal 2006, the broadband customer base grew by 97%, while broadband revenues increased by 72% to £57 million.
During the same period, the mobile customer base expanded by 22%, while mobile revenues rose by 19% to £360 million. As a result, international business recorded a revenue growth of 7.8% in fiscal 2006. More importantly, international business generated an operating profit of £315 million in fiscal 2006, which partially offset operating losses in other divisions. Strong international business has enabled C&W to offset weakness in other divisions.
Energis
C&W completed the acquisition of Energis in November 2005 and managed to integrate it with its UK business by March 2006. Energis provides scale and a strong customer base to the UK business of C&W. Energis is the third largest fixed line telecommunications operator in the UK. It provides voice, data, internet, and contact centre services and security solutions to large organizations in the UK and Ireland.
Energis has a strong customer base including the likes of BBC, Caudwell Communications, RAC, Royal and Sun Alliance, the UK Government, Virgin and Wanadoo. For fiscal year ended March 2005, Energis recorded revenue of £720 million and EBITDA of £116 million. In fiscal year 2006, Energis contributed £266 million of revenue and £35 million of EBITDA to the UK results from the date of its acquisition. The combination of C&W’s UK business and Energis is expected to result in operating and capital expenditure synergies of £55 million in 2006-2007, forecast to rise to £80 million in 2007-2008. EBITDA synergies are expected to reach £40 million in 2006-2007 and £55 million in 2007-2008. Energis strengthens the competitive position of the UK business.
Weaknesses
1. Weak profitability of Bulldog
Despite strong growth, C&W’s Bulldog division continues to record operating losses. Bulldog provides broadband and telephony services to residential, small office/home office and small and medium enterprise markets in the UK. This division has managed to improve its customer base from 10,000 customers in March 2005 to 118,000 customers in March 2006, but its operating losses rose sharply from £30 million in fiscal 2005 to £120 million in fiscal 2006.
In the UK broadband market, Bulldog is unable to match the bundled offers of Carphone Warehouse and pricing of Orange. Bulldog is finding it difficult to generate profitable growth without an established brand and retail distribution. Effective April 2006, Bulldog has become a part of C&W’s UK business division. The continuing weak profitability of Bulldog could hurt the operating performance of the UK business.
2. Negative returns
C&W has been recording negative returns compared to its peers in recent years.
During the five year period 2002-2006, the company’s return on assets, investment and equity were -23.5%, -35.2% and -51.1%, respectively, compared to the corresponding industry averages of 1.4%, 1.9% and 8%. Negative returns indicate considerable scope for improving resource utilization and operating efficiency.
3. Poor operating performance
C&W recorded a poor operating performance in fiscal 2006. The company recorded an operating loss of £67 million during fiscal year 2006, compared to an operating profit of £131 million in 2005. Cash flow from operations has also declined to £56 million in fiscal 2006, down from £247 million in fiscal 2005. A continued decline in operating performance could result in a liquidity crisis, hampering the company’s capital expenditure strategy.
Opportunities
1. Growing demand for 3G services
Demand for third generation (3G) mobile services is expected to increase in the near future. Demand for 3G services, which offer advanced features like video telephony over mobile phones, high speed video transmission and data transmission, is expected to increase globally. C&W has mobile operations in 22 countries worldwide and about 2.7 million mobile customers. C&W rolled out Global System for Mobile (GSM) networks in Jamaica, Barbados, Cayman, St Lucia, Dominica, Grenada and St Vincent in 2004. During fiscal 2006, the GSM customer base of the company increased by 56% to over 1.9 million customers.
Growing demand for 3G services, which offer higher margins, would help the company increase its profit margins.
2. Fixed mobile convergence solutions
Demand for fixed mobile convergence solutions is increasing. Consumers have been demanding the convenience of using mobile and fixed line services through a single handset. Fixed mobile convergence solutions allow consumers to use their mobile handsets for fixed line connections at home, without having to use a separate fixed line phone. Typically, fixed mobile convergence solutions reduce mobile spending by 20% to 30%. BT has already launched BT Fusion, a fixed-mobile phone for consumers and small businesses.
In May 2006, BT announced the launch of a new fixed-mobile converged service for large businesses and multinationals. In the same month, C&W announced plans of offering fixed mobile convergence solutions to high end corporate customers. Increasing demand for fixed mobile convergence solutions will allow the company to boost revenue growth.
3. Next Generation Network
C&W announced plans of transforming its UK core network into a next generation network in 2005. This transformation, expected to take three years, is estimated to cost £190 million. It involves the convergence of C&W’s existing five separate service platforms onto a single integrated IP service platform; the reduction of backbone nodes by 50% and rationalization of metro-edge and metro-access nodes; and the installation of ten new soft switches to replace the existing seventy legacy voice switches.
Upon completion, this network will allow the company to offer highly innovative and cost competitive services. This single, integrated and versatile IP based platform will provide C&W with a significant competitive advantage in the UK.
Threats
1. Pricing pressures
The transatlantic, pan-European and US markets are all currently experiencing considerable levels of overcapacity. Overcapacity resulted in a severe price decline in these markets. Due to lower prices many network operators have become financially weakened, and this resulted in consolidation across the industry. Leveraging their scale, the larger companies have cut down prices. This is compelling C&W to lower its prices to combat a threatened loss of market share. Intense price competition puts pressure on the company’s profitability and market share.
2. Liberalization of international markets
Many of the markets in which C&W is the incumbent operator are transitioning from monopoly environments to competitive markets. With the global trend towards liberalization of communications markets, the host governments want to modify exclusive licenses, in order to facilitate an orderly transition to a fully competitive environment. For instance, the Jamaican market was liberalized in 2003, followed by Trinidad and Tobago in 2005.
Increasing competition, particularly in Barbados (following liberalization of the market in February 2005), was the main driver of the 10% decline in international voice revenues in fiscal 2006. The liberalization of the markets in which C&W is the incumbent operator is leading to increased competition, which could result in loss of market share.
3. Increasing contact centers in India
An increasing number of companies in UK are off shoring services to India, which could affect the contact center business of C&W. The UK majors such as HSBC and Prudential have already started operations in India, and many others are expected to follow. In 2004, 17% of the agent positions (number of seats) in India were serving UK businesses. The total number of agent positions in India is forecast to reach 363,100 by 2009, from 179,000 in 2004, a CAGR of 15%. The growth of contact centers in India would erode the contact center solutions business of C&W.
External Environment
Porter’s Five Forces
The Porters Five Forces of Competition Model (figure 1) is used to analyze the environment in which Cable and wireless compete in. It operates in an industry which is characterized by intense competition, high demand and constant technological demands. Analyzing the external environment will enable Cables and Wireless to understand competitors better and to find a improved strategic method of remaining completive.
Threat of new entrants
Cable and Wireless compete in global market operating in over 80 countries. Due to the scale that the company operates on, a high amount of capital investment is necessary making this the biggest barrier-to-entry. To cover the high fixed starting up cost, entries would require a high level of financial backing which is unlikely as solid operating skills and management experience is fairly scarce. The ownership of a telecom license also presents a huge barrier to entry. In countries such as the US, an application to Federal Communications Commission must be made to receive regulatory approval and licensing. The high competition already in place elevates the barriers.
However Cable and Wireless face threat of entry from already existing organization collaborating in joint ventures. An example of this would be the merger of ATT and T Media One. Such competitors are a new threat as they formulate synergy enabling them to become major competitors. There is also a limited amount of "good" radio spectrum that lends itself to mobile voice and data applications.
Bargaining power of suppliers
The telecom equipment suppliers would seem to have greater power over the telecom operate. This may appear so as they provided high-tech broadband switching equipment, fibre-optic cables, and mobile handsets and billing software. However there are actually a numerous large equipment makers around like Nortel, Lucent, Cisco, Nokia, Alcatel, Ericsson, Tellabs are just a few of the supplier names.
There are enough suppliers, arguably, to dilute bargaining power. Even though the equipment provided by suppliers is essential for Cable and Wireless to compete in the industry, if one supplier is unable to provide them with what they want they can easily approach others. An example of this is Nokia's network infrastructure Nokia supply Cable & Wireless with GSM and WCDMA 3G radio networks, including HSDPA, and core networks, including the Nokia MSC Server mobile soft switches.
Cable and Wireless have improved they relationship with suppliers with the creation of my SAP and Accenture (system dealing with purchasing) receiving from the Chartered Institute of Purchasing and Supply Awards. The company has more effective dealing with suppliers which has weakened bargaining power of suppliers as many will be willing to work with a company with a prestige’s reputation.
Bargaining of power of buyers
Customer of cable and wireless would be said relatively high bargaining power as the industry is fiercely filled with choice from numerous telecoms provided. Customers are forever seeking lower prices and better service. However this power can vary depending on the market segment .Small and individual customers i.e. residential customers have the highest bargaining power as switching cost are minimal if at all.
The costs for larger business customers however, especially those that rely more on customized products and services can be greater. In certain circumstances however whereby Cable and Wireless streamlined its business in the UK by axing up to 3,500 jobs over the next 4-5 years and reducing its customer base from 30,000 to 3,000 buyer bargaining power is driven down. This is however unhelpful for Cable as other competitors it can move in where they are moving out from.
Rivalry of competitors
The 90’s saw the level of competition these industries alter. With the de-regulation and receptive capital markets made it easier for new entrants to entry increasing rivalry. In a fast moving industry such as this, technological advances are paramount if a business such as Cable and Wireless are able to bet of competitors. Rivalry is high as competitors continually look for ways to lure customers with lower prices and better services.
It is more so than other industry as the products that are provided are very similar and the option for diversification are minimal. However these factors drive industry profits down meaning that high levels of exist barriers. Networks and billing systems cannot really be used for much else, and their swift obsolescence makes liquidation pretty difficult. The rivalry of competitors is increased by mergers in the industry.
Threat of substitute products
Threat of substitution can come in three main categories. Substitution of product for product, substitute of need and lastly substitute…. In the telecommunication industry all three are evident and the threat is very real. Substitution threats are created from products and services from non customary telecom industries. The competition for buyers is increasing in the cable, tv and satellite market. People working in that industry have direct lines in to homes and the services they offer i.e. broadband and satellite links can substitute for rapid company networking requirements.
The internet is putting telecom companies under pressure because its becoming a feasible medium for cut rate voice calls and could affect telecom companies income pertaining to their core voice. The constant development in technological advances makes threat of substitute very high. An example of this is the new Apple iTV devices which will receive programs wirelessly from home computer to play on the television screen.
PESTEL Analysis
Economic
Pricing pressure
The transatlantic, pan-European and US markets are all currently experiencing considerable levels of overcapacity. Overcapacity coupled with lower than expected levels of demand growth contributed to a severe price decline in these markets. This in turn resulted in many network operators becoming financially distressed and filing for bankruptcy or chapter 11 protection. This could compel C&W to lower prices to prevent erosion of its market share or to continue attracting new customers. If C&W is forced to lower its prices the financial condition may be adversely affected.
Reduction in capital spending
A significant percentage of the C&W's revenue is generated by providing business customers with telecommunications, IP, voice, data, managed hosting services and content delivery. The telecommunications industry is currently facing unfavorable market conditions, including amongst other factors, the decline in investment in the industry and decline in demand for certain telecommunications products and services. A continued slowdown in capital spending by service providers and other customers may affect C&W's revenues.
Currency risk
Fluctuating foreign currency exchange rates will have a significant impact on C&W's earnings. C&W generates a substantial percentage of its revenues (about 59.6%) outside of its domestic market in the UK. Fluctuations in the value of the currencies in the international markets in which the company operates will affect C&W's total earnings. For instance, C&W regional business reported revenues of £1411 million in 2003, a decrease of £55 million or 3.8% from 2002. Many of C&W's regional revenues and costs arise in currencies that are linked to the US dollar. Fiscal 2003 results were affected by, an 8% devaluation in the US dollar against sterling and a 14% devaluation in the Jamaican dollar.
Political/Legal
C&W faces regulatory and market access constraints in various countries resulting from laws, public policies and licensing requirements. Many of the markets in which C&W operates are in transition from monopoly environments to competitive markets. With the global trend towards liberalization, C&W is engaged with host governments, who want to modify exclusive licenses, in order to facilitate an orderly transition to a fully competitive environment.
Following the transposition of the EU electronic communications directives into national laws, member states will no longer require market entrants to hold an individual license. Instead, providers of electronic communications networks and services would be regulated through general authorizations. Accordingly the individual licenses that C&W holds in EU member states have been or will be revoked in the near future. Some licenses provide that, upon their termination, the relevant government may purchase, or have the option to purchase, the property, plant and equipment of the licensee in that territory at a fair market value. This may adversely affect the company's business. Furthermore it would lead to increase in competition in the markets and may adversely affect the company's market share.
Technology
Increased broadband penetration
There has been increased broadband DSL penetration in the UK recently. This provides companies the potential to change the economics of access for business customers, providing high quality, low cost voice and data applications on a single platform. Moreover, local loop unbundling (LLU) will provide selective opportunities driven by customer demand. Cable & Wireless' acquired Bulldog Communications in 2004. Bulldog offers a wide range of high speed broadband services using digital subscriber line technology. The acquisition of Bulldog will accelerate C&W's ability to deliver directly connected DSL solutions to existing and potential customers with an experienced team specializing in LLU services.
Greater awareness for security products
Demand for security products has been increasing significantly mainly due to greater awareness of security and homeland defense worldwide. The company provides access solutions comprising security services such as managed firewalls, intrusion detection and response, scanning and analysis and authentication and encryption services. Increased legislations aimed at improving law enforcement and security measures will increase demand for products offered by the company.
Market Position, Industry Competitors and Benchmarking
C&W is the world's fourth largest international carrier of voice traffic and operates significant international submarine cable and satellite systems that are centrally managed within the United Kingdom. The IP backbone AS3561 provides IP connectivity to the United Kingdom, United States, European and Japan regions. C&W is the second largest telecommunications company in the UK after British Telecom.
The following companies are the major competitors of Cable and Wireless plc:
- COLT Telecom Group Plc
- Level 3 Communications, Inc.
- NTT Corporation
- Verizon Communications
- Vodafone Group Plc
- Carphone Warehouse Group Plc
- The Easynet Group Plc
- Gamma Holding NV
- MCI, Inc.
- BT Group plc
- Global Crossing Ltd.
- Qwest Communications International Inc.
- Kingston Communications (HULL) Plc
Market Analysis
The leading geographical market is the US, which contributes $235.1 billion in revenues to the global industry. In recent years the markets of the developed world have been driven by broadband subscriptions, within the US alone there are over 41 million households and firms subscribed to a broadband connection. The Asia-Pacific market is increasing in importance due to the rapidly expanding economics of the NICS, China and India. Asia Pacific has the second largest market, with combined revenues of approximately $170.1 billion.
The global diversified telecommunication services industry consists of fixed line telecommunication services and alternative carriers. Growth rates in the industry dipped in 2003 but have since returned to a state of buoyancy as the telecommunication needs of the emerging economies boosted revenues. Eastern Europe is growing in importance; as are the markets of the Asia-Pacific region allow global industry to communicate on a level playing field. The global diversified telecommunication services industry generated total revenues of $580.2 billion in 2005, this representing a compound annual growth rate (CAGR) of 3.3% for the five-year period spanning 2001-2005. Fixed line revenues are unlikely to match present revenue growth in the future as the demand for wireless forms of communication take increasing hold of the wider telecommunications industry.
In the US alone there are over 41million households and firms subscribed to a broadband connection. The Asia-Pacific market is increasing in importance due to the rapidly expanding economics of the NICS, China and India. Asia Pacific has the second largest market, with combined revenues of approximately $170.1 billion. Looking forward, the industry is forecast to accelerate its current performance, with an anticipated CAGR of 4.6% for the five-year period 2006-2010 expected to drive the industry to a value of $727.4 billion by the end of 2010. Volumes are unlikely to see large gains in terms of growth; revenue growth will largely be driven by rising prices and technological substitution. The rapid industrialization of China and India will continue to drive the industry.
OPTIONS DERIVED
PLAN A
Continue to seek out alliances to expand
Cable &Wireless’s principal operations are in the Caribbean, Panama, Macau, Monaco and the Channel Islands. Its ownership of these companies is varied – some are wholly owned and others are partly owned with the public, the local government or other corporate partners. Its 33 businesses comprise 24 subsidiaries and 9 joint ventures and associates.
Cable and Wireless can move forward by continuing to build coverage in larger markets and utilize mergers and acquisitions for further expansions. In smaller markets, it can have affiliate or form new partnerships in order to expand their networks. They will therefore pay lower than typical roaming rates for customers that travel to affiliate markets. It can also use joint ventures to build out certain market segments where shared networks make the most economic sense. Cable and Wireless can continue to use roaming agreements to extend coverage. Increasing and solidifying its international coverage. This is critical in order to compete successfully and reduce the pressure on its margins.
Global brand strength
Cable and Wireless’s recognition as a global brand should build upon the strength of its operating company brands. This will enables it to embark on more high-profile marketing campaigns which will give it the ability to offer global services which companies operating in individual markets would find difficult to do on their own.
This will therefore give Cable and Wireless an important competitive edge in local markets. Due to the diversity of its markets in terms of size, geography and culture, it should treat each business individually by tailoring its services to the relevant market – but make effective and efficient use of scale and position as a global network.
Exposure in emerging markets
Cable and Wireless has investments in many emerging markets in Asia, Latin America, the Middle East and Africa. From the industry analysis of this report, China and India represent two major markets for cellular telecommunications that are likely to grow rapidly in future years. China is one of the world’s largest mobile phone markets and though, Vodafone has acquired a presence in it through China Mobile Limited (Vodafone currently owns 3.3% of China Mobile Limited), this presence is small.
This provides less opportunity to fully exploit this lucrative market. India also appears very appealing, with a population in excess of one billion, where the company as no presence. The company’s lack of presence in emerging markets acts as a disadvantage for the company as it is unable to leverage on the growing opportunities in those markets.
Saturday, 15 December 2007
Debt consolidation: cure or continued credit problems? (1)
Interest rates haven't been this low for decades, tempting some consumers to take on additional debt to ease existing credit woes. The goal is to consolidate various higher-interest balances into one, easier-to-handle and less-costly package.
But be careful of what looks to be a quick fix.
"You're getting symptomatic relief, not a credit cure," says Chris Viale, general manager of Cambridge Credit Corp., a nonprofit credit counseling agency based in Agawam, Mass.
This fighting-fire-with-fire approach can take several forms. There are debt-consolidation loans, balance transfers to a zero-percent credit card and home equity loans or lines of credit.
But, says Viale, 70 percent of Americans who take out a home equity loan or other type of loan to pay off credit cards end up with the same (if not higher) debt load within two years.Viale's statistics underscore a major problem with debt consolidation: It feeds upon the tendencies that got you in trouble in the first place. By taking on yet another creditor, you're adding the proverbial fuel to the fire. In this case, it's your money that's burning.
Plus, if you've taken on so much debt that you're looking for more as a solution, chances are you won't qualify for the very low interest rates you see advertised. Those generally go to people with stellar credit ratings.
However, if you're at the end of your credit rope or swear that this time you'll be more disciplined, debt consolidation may be something to consider despite its risks. Here are some popular forms of debt consolidation, how they work and a look at their pros and cons.
Home equity loan or line of credit
Home equity lines or loans often are touted as a quick and easy way to get out of debt. By leveraging your residence's value, the pitch goes, you can get money to pay off other bills and a tax break, too.
But borrowing against your house can backfire. The biggest risk: You could lose your home if you default on the loan.
"Some hardship occurs and now they have double the debt and if it's secured by their home, they could lose it," says Diane Giarratano, director of education at Garden State Consumer Credit Counseling in Freehold, N.J.
And while equity loan interest generally is tax deductible, it could be limited in some situations. Even when it does provide a tax break, Cambridge's Viale says "that doesn't mean it makes fiscal sense."
Giarratano agrees. "Banks will tell you how much you can borrow," she says. "That doesn't mean you should borrow the total amount, but that's what people do."
Still, a home equity line of credit or loan to pay off creditors can work for some debt-burdened homeowners. Just be sure to do your homework to guarantee that the home equity dollars and cents make sense. This Bankrate calculator can help your determine whether borrowing against your home's equity is a wise move.
Zero-percent credit card
What about people who don't own a house? In these cases, many turn to zero-percent credit cards to reduce debt. Again, prudence and discipline are required.
Companies offer these rates as teasers -- enticements for you to switch credit card vendors. Much of the time, card companies target consumers with better credit, so that may leave someone struggling with debt without this option.
Even if you do qualify for a zero-percent or similar single-digit rate, it won't last forever. Make sure you know when it will end and what the rate is expected to jump to when it does.
The low rate also lasts only if you pay on time. One late payment and the credit card company will jack up the rate. Also look for hidden fees and charges that can increase the actual cost of credit.
"It's a short-term fix," says Viale. "The only way it works is if you are really meticulous about paying it and stay on top of it and then move onto another credit card before the low interest rate expires."
Opening new credit card accounts every six months, however, could negatively affect your credit rating, he cautions.
And to successfully lower your debt load, you'll need to pay far more than the smallest amount the card company will accept, especially after that zero rate disappears. "Paying the minimum for a $20,000 debt won't cut it," notes Viale.
Bankrate's minimum payment calculator illustrates Viale's assessment. Say, for example, you transferred $20,000 of other debt to a zero-percent card and paid $1,000 on it by the time the rate jumped to 14 percent. If you make only the minimum monthly payments, it will take you 1,134 months -- or 94.5 years -- to erase your remaining $19,000 balance. If you live that long, you'll pay $64,805 in interest. And that's presuming you don't charge another thing during that time.
Debt consolidation loan
Did the credit card computations scare you into looking for another option? There's always a debt-consolidation loan. Offers for these financial products are an e-mail box staple. Chances are you get a dozen or more everyday suggesting this as the solution to your growing debt problem.
A major appeal of consolidation loans is convenience. Instead of paying 20 different creditors who are charging different rates at different times of the month, you take out one big loan and pay off all those accounts. Then you make a single payment on that loan once a month.
But ease doesn't automatically translate to savings.
Before you sign on the dotted line, be sure that the costs of the new, bundled loan will truly be less than what you're already paying various creditors. For many consolidation-loan candidates, their current credit woes mean they won't get the lowest-available interest rate. Plus, when there is nothing to secure the loan (such as your home), expect the lender to bump up the rate.
Calculate interest and fees on all your existing accounts to determine the total of the payments you now make. Then compare those amounts with the consolidation loan numbers to make sure it truly is a better choice.
And, as with any product, shop around. The bank down the street may offer an attractive loan rate, but a check of your local credit union could turn up better terms, says Deborah McNaughton, author of "The Get Out of Debt Kit."
"Credit unions also tend to be more lenient than the banks," adds McNaughton.
Read part2Tuesday, 11 December 2007
The Death of Google Adsense And Other Myths
What happened?
First, Google made a change in its Adsense program, letting advertisers choose between putting their ads in the search results or on the content pages of Adsense publishers. Search won out and started to receive the higher bids. Search results convert better than content ads.
Next, Google has cracked down on Junk Adsense sites, like they should. These sites consisted mainly of software generated re-hashed search engine links and were totally annoying to say the least. But Google also cracked down on ‘squeeze pages’ or ‘affiliate landing pages’ - a lucrative source of income for many online marketers, mainly because these pages helped marketers build an opt-in list or use permission based email.
The results of these changes produced an Adsense meltdown for many online marketers.
Some Internet marketers are speculating recent changes could even mean the death of Adsense. One online marketer, Scott Boulch even published a free report entitled ‘The Death of Adsense".
Many affiliate marketers would agree with Boulch on some of his points, especially the obvious fact that using Adsense on your web content is starting on the bottom rung of the online marketing ladder. Instead of receiving pennies per click with Adsense, alert marketers and webmasters have already discovered that by using CPA (Cost-Per-Action) and direct affiliate links, they can produce significantly more revenue from their web pages. Why earn pennies per click when you can earn $5, $10 or OVER $100 per click?
But the fine people at Google are catching on...
In the past Google has made its own swing to the Cost-Per-Action direction with its referral system for the Firefox Browser and giving webmasters credit for signing up Adwords and Adsense accounts.
Many online marketers believe Google needs to expand on these baby steps and open their Adsense affiliate program up to third party products/advertisers. In a recent company statement Google offered some hope: "We’re always looking for new ways to provide effective and useful features to advertisers, publishers, and users," the company stated "As part of these efforts we are currently testing a cost-per-action (CPA) pricing model to give advertisers more flexibility and provide publishers another way to earn revenue through AdSense."
Basically, in cost-per-action, advertisers pay for leads, purchases or customer acquisition. It would help with the click fraud issue and the monetary returns could potentially make Adsense’s revenues pale in comparison.
As more and more commerce goes online... acquiring customers for such diverse services as insurance, real estate, telephone, marketing, web hosting, travel, mortgage loans, cable TV, banking... you name it, almost any service or product sold in the marketplace is now turning to the Internet for customers and lifelong clients.
Enormous sums of money will change hands. Perhaps, the most lucrative of these is customer acquisition. Advertisers are turning to the Internet and webmasters/marketers for acquiring these lifelong customers for their respective services and products. Businesses and companies are quickly realizing paying an attractive lead generating fee/commission is smart business. They quickly build a client base for their services or products and quickly recoup their expenses - realizing in the long run these leads will generate huge profits.
It can also mean huge profits for the CPA networks like ValueClick’s Commission Junction and Rakuten’s LinkShare who supply the advertisers with publishers and website marketers to harvest these leads. It can be a lucrative venture for all involved, especially for those online marketers who have cornered the search engines for lucrative niche markets in big ticket items. Even small ticket items pay quite well for those marketers who know how to market online.
Contextual advertising is fine, but CPA (Cost-Per-Action) will offer much better returns for the website owner. Making any profitable site much more profitable. It will and is opening up a whole area of marketing opportunities that never existed before we had the Internet. Creating a complex structure of advertisers, publishers and the Affiliate/CPA companies that connect the two.
Of course, cutting out the middle man has always been even a more profitable venture for most marketers. As more and more webmasters realize they can make much more with dealing directly with companies, rather than going through a middle process like Google Adsense or the countless other affiliate/CPA networks ... online marketers can reap even bigger rewards.
For an online marketer when you get a phone call or email from the CEO or the affiliate manager with a company or service you’re promoting with your website - you know you have made it! Dealing directly with a company usually means bigger commissions and special exclusive deals just for you or your sites.
Only fly in the ointment, all that extra paperwork and business wheeling and dealing. Many marketers and website owners like the idea of someone else handling all the tracking, collecting payments, promotional materials... they just like to sit back and build more websites and content. It gives the affiliate marketer a lifestyle that they are looking for on the web. They just like to market and promote with their sites and let someone else worry about the details.
Therefore, there will always be a place for contextual ads like Google Adsense... Rumors of my demise have been greatly exaggerated.
However, could CPA be a better alternative for the current Adsense contextual ads?
Google would be the natural choice for a middleman if there ever was one. Besides, many savvy marketers know the Google brand name is trusted online, any product/service promoted through Google would be an easy sell. Many argue Google already dominates the web, why should it not be the one to handle these CPA transactions through its Adsense program.
On the flip side, over countless updates and changes to its indexing, many webmasters have experienced more than a few negative dealings with Google. Many have won, many have lost in this Google Age, but all have realized riding the Google Search Engine is like running with the bulls at Pamplona, totally thrilling unless you’re one of the unfortunate few who get trampled in the process....
Readers of this blog will get the book as soon as I have it ;)
Debt consolidation: cure or continued credit problems? (2)
Managing, not adding, debt
Viale is a much bigger fan of debt management, which isn't a surprise since he heads up a debt management firm. But McNaughton and other experts also point to credit counseling instead of shifting debt as the way to go.
They favor debt management because it costs less and is quicker than a debt-consolidation loan. Viale says someone owing $20,000 would end up paying $6,000 to $8,000 in interest and fees and be debt free in four to six years by using a credit counselor. If that person took out a 15-year home equity loan at 10 percent (because his credit wasn't good enough to get him a lower rate), Bankrate's loan calculator shows he'd end up paying $18,686 in interest on top of the twenty grand he borrowed.
But if you just can't get a handle on your bills by yourself, you should explore credit counseling. Getting professional help in managing your debt can help you change your credit behavior. People that have taken on too much debt tend to go into denial; they'd rather not know how much debt they owe. A professional debt manager will make you face up to your obligations.
Credit counseling agencies also force you to stop racking up debt. In exchange for consolidating your debt and working with your creditors to reduce your payments, credit counselors require you to give up your credit cards.
Credit counseling, however, is not without its costs.
One downside is that your reduced payment plan will probably show up as a mark against you on your credit report. Even though your creditor agreed to the reduced payment, you technically did not pay your account as called for in your original credit agreement.
An even more costly potential pitfall is the disreputable debt counselor. Some credit counseling and debt-consolidation companies are only interested in making a quick buck on debt-ridden consumers. Some firms offer shoddy service at sky-high fees. Others are out-and-out scams.
To find a reputable firm, verify certifications or third-party registrations. Check with the Association of Independent Consumer Credit Counseling Agencies or the National Foundation of Credit Counseling to see if the service you're considering is a member of either group. Also ask the service for references and then confirm them.
Make sure that the debt management or credit counseling firm answers all your questions and that you have a firm understanding of how the process will work and what it will cost. If the company won't give you straight answers or you don't understand what's going on, don't sign up with that company.
Sunday, 9 December 2007
Everything You Need to Know About Link Popularity
The number of websites that link to your website is one of the factors that help search engines determine your relevancy for a search term. Link popularity and gaining new links from outside websites to your website have proven to be a popular concept for people seeking to improve their search engine rankings.
What is link popularity and how exactly does it work? Search engines don't just look at the content of your website to determine if you are a match for a search. They also look at the number of outside websites that can validate, by linking, that you are a good match.
Search engines have also begun to rank the importance of the sites that link to you. This means if the New York Times links to your site, your credibility is higher than if Joe's Online Newspaper provides a link to your website. Search engines also consider the text contained in the link that is pointing to your website. If the text in the links contains keywords you are trying to compete for, the search engines consider your site to have even greater credibility.
Since link popularity has become a factor that people feel like they have some influence over in determining their search engine positioning, many solutions have been proposed for growing your online link popularity. One of the more popular ways is also one of the least effective.
Several software programs have been written that help you create lists of websites in your space that might be willing to link to you. These programs also help you gather the email addresses for these sites and even help you craft an email requesting that the site add a link to yours.
The concept sounds good but the results are often mixed. If you use one of these tools and simply follow the templates they give you, your email will read like a spam message that won't be taken seriously.
The best way to build long-term link popularity is to offer good content and features that provide real value to your audience. As people discover your website and realize its benefits, the likelihood of them linking to your website naturally increases.
There are several critical targets if you want to build up your link popularity without appearing to be a spammer. The first is good links from Yahoo and the Open Directory Project. Both of these sites are human based directories that have a lot of influence over search results. If your site is listed in the correct category and has a good description, links from these two websites are seen as validating you are the real thing.
The second place it's important to have a link from is topic specific or niche directories. These are websites that are dedicated to news and information that is an exact match for what you provide online. If you have a website that deals with tractor parts, being listed on sites that focus on tractors is very important. In the case where a niche website doesn't know about your website, it's okay to ask them to link to your website. But your message should be personalized to them and also tell them the benefit or feature their users will get from linking to you.
Another part of the web that helps build your link popularity is resource sites. Resource sites are lists of links that people put up on their own. These pages are often spread amongst friends and readers who find good information available from the resource. In order to reach this audience, a good PR campaign and press releases can ensure that these individuals know you exist and have a link to your website that they can easily include.
One of the most overlooked spots for building link popularity is links from partners and vendors for your business. Because you already have a business relationship with these companies or individuals, you are more likely to be able to request and receive a link from their website. These websites help validate your place online and also establish you within a community of websites online. If you are visible to the community, you are more visible to the search engines.
Link popularity also starts at home. You must make sure your link architecture is solid and easily followed by search engines. That's the first way that search engines see you. It's also the way that visitors find information within your website. The easier you make it on your audience to find good information, the more likely they are to link to it.
The final way you can work to increase your link popularity is to participate in newsletters and online forums that relate to your website. You don't want to just jump in and give a plug for your URL. You must participate in the discussion as an expert or authority who gives good advice. When you sign your name at the bottom of your posting, be sure to include a signature that includes a link to your website. If these forums and newsletters are archived and remain online, search engines continue to see them and the links they contain.
If your website doesn't have a lot of content and you are wondering how you can build your link popularity you should think about building a tool or feature on your website that will be valuable to your online audience. Marketleap's Search Engine Marketing tools are a good example of a feature built to generate link popularity.
Marketleap's free tools provide unique data for search engine marketers that they can't find other places. We've also made it possible for people to place our tools on their sites easily by cutting and pasting a piece of HTML code into their web page. Because the tools are valuable to our community, many websites have linked to the tools or added the tool to their own website. Consequently, if you search for "link popularity" at Google, Marketleap will usually appear in the top 3 results on the first page.
Link popularity will continue to be an essential factor in successful search engine marketing initiatives for the foreseeable future. Links are a helpful tool for search engines trying to wade through billions of documents and find ones that are relevant to their users.
Monday, 30 June 2008
101 Methods To "PR" your website
1. Submit articles to article directories.
2. Conduct link exchange activity with other blogs and websites.
3. Run a teleseminar.
4. Be a contributor on Yahoo/MSN Answers
5. Create a blog and join MyBlogLog.com
6. Create a MySpace.com account and make friends with your target market.
7. Create a viral report with links coming back to your website.
8. Generate a software product that you distribute free but advertise your website in it.
9. Build an article directory for a hot niche market
10. Produce a useful web-based software for public use
11. Ask thought-provoking questions
12. Build viral videos and upload them to Youtube.com
13. Buy links from Text-link-ads.com
14. Submit classified ads to USFreeAds.com
15. Publish content based on the latest news or unique items to tap on long tail traffic
16. Optimize your webpages for meta tags, title tags and H1 tags
17. Run online contests with kick-ass prizes
18. Run article exchange campaigns with HTML links in them
19. Generate your own social networking site
20. Join and participate in the Internet Marketing Singapore forum to get suggestions and ideas
21. Produce an unbelievable product and sell it on Clickbank.com
22. Auction off cheap digital items on eBay
23. Write articles for major sites like About.com
24. Create a regular PDF newsletter
25. Talk to 5 people every day about one piece of content on your site
26. Visit online guest books and leave a comment
27. Visit other blogs and contribute actively on a regular basis
28. Use banner advertising on banner exchange programs like BannersgoMLM.com
29. Seek out joint venture partners to promote your site/event
30. Purchase leads from a co-registration service
31. Write an offline book
32. Distribute flyers
33. Sponsor an event with prizes that have your website on it
34. Run a charity event
35. Submit a press release to PRWeb.com
36. Use resell rights promotions
37. Produce a web or blog template using Open Source license
38. Create a community with a community badge/chicklet for identity
39. Look for newsworthy information and syndicate to Digg.com
40. Use your MSN nickname/message
41. Provide a free download on your site with a message on the back of your business card
42. Leave an email signature
43. Have a tell-a-friend form
44. Newspaper advertismenets
45. Direct response mail
46. Regular podcasts
47. Run a “live” seminar
48. Create an affiliate program
49. Get invited to events
50. Run a 24-hour answering service
51. Give people the right to syndicate your content
52. Keep your content fresh
53. Create multiple offers
54. Use ping sites for your blog
55. Use article submission services like ArticleAnnouncer.com to create backlinks
56. Give a DVD out for free that requires opt-insk
57. Car decals with your website on it
58. Generate a member-get-member promotion
59. Offer a 50% sale for products on your site
60. Create an online community of friends
61. Invite 10 people to visit your site on a regular basis
62. Print t-shirts with your URL
63. Advertise in trade magazines
64. Advertise in the main newspapers
65. Radio interviews
66. TV interviews
67. TV advertisements
68. Use Google Adwords
69. Use MSN Adcenter
70. Use Yahoo Search Marketing
71. Use Adbrite
72. Getresponse Co-registration service
73. Optimize your website for a specific, targeted key phrase
74. Use PayPerPost.com to get bloggers to write about your site
75. Run a Web 2.0 community
76. Advertise in the Yellow Pages
77. Directory submissions
78. Affiliate directory submissions
79. Direct email campaigns with list owners
80. Use direct response postcards
81. Build a free software directory
82. Build a free image directory
83. Offer a bonus product during a product launch to JV partners
84. Use well-optimized websites and content
85. Bait providers to visit your website through eLance.com and Scriptlance.com
86. Purchase outdoor advertising space at targeted locations
87. Create an Opt-in mailing list
88. Visit and participate in forums related to your niche.
89. Build more backlinks for popular keywords
90. Narrow your market to a specific niche
91. Build more websites within related niches
92. Attend more seminars to gain connections
93. Use a Feed Reader to subscribe to RSS feeds - comment on targeted posts
94. Have multiple distribution locations for a physical product
95. Create your own products and let affiliates sell them
96. Blog controversially
97. Deliberately start an online war (flaming - not recommended)
98. Look for related websites in #1 position and buy advertising space from them
99. Set up account with Squidoo.com
100. Set up account with Hi5.com
101. Set up account with Multiply.com
102. Set up account with iConnectE.com - A Singaporean social networking site
103. Set up account with Huminity.com
104. Do a giveaway rights promotion
105. Build a presence on 43 things
106. Create an affiliate promotion with Clickbank
107. Run a Cost-Per-Lead program
108. Run a Classified on http://www.Mocca.com.sg
109. Find a Cause to support and promote the cause
110. Get people involved in your community
111. Use a tell-a-friend script and place this automatically with people have opted-in
112. Run a blog carnival
113. Use games to “tag” people
114. Encourage article exchanges
115. Request people to submit articles that you will display on your blog for free
116. Build a free online widget that people will use
117. Join discussion groups on Google, Yahoo or MySpace groups
118. Advertise on Alexa.com
119. Use Global SMS service
120. Leverage Craigslist.org
Thursday, 17 January 2008
Case Study: Marketing plan for Cable and Wireless
BACKGROUND
Company Profile
Cable and Wireless is a global communications group. The company has been recently restructured into two businesses: international and UK. The international business offers mobile, broadband, domestic and international fixed line services to customers in the Caribbean, Panama, Macau, Monaco and the Channel Islands. The UK business besides providing enterprise and carrier solutions to customers in the UK, the US, continental Europe and Asia. The company primarily operates in the UK. It is headquartered in London, the UK.
The company recorded revenues of £3,230 million during the fiscal year ended March 2006, an increase of 9.6% over 2005. The net profit was £175 million in fiscal year 2006, a decrease of 50.6% over 2005. The company recorded a net profit in fiscal year 2006, despite an operating loss, owing to a gain on the sale of non-current assets (£83 million), other income (£85 million), interest income (£80 million) and profit from discontinued operations (£90 million).
Key Issue
Decline in revenue (Poor operating performance) and Negative returns. The company recorded revenues of £3671 million during the fiscal year ended March 2003, a decrease of 16.4% over 2002. Revenues declined significantly in the Caribbean, recording a decrease of 16.3% over fiscal 2003. European revenues decreased by 13.8% over fiscal 2003. The company recorded lower returns than the industry average. Its five year average returns on assets is negative 10.09% as compared to the industry average of 3.26%. Furthermore, its five year average returns on investments is negative 14.98% as compared to the industry average of 4.37%. The company would need to effectively manage its assets and investments to ensure that returns are at par or higher than industry average. C&W recorded a poor operating performance in fiscal 2006. The company recorded an operating loss of £67 million during fiscal year 2006, compared to an operating profit of £131 million in 2005. Cash flow from operations has also declined to £56 million in fiscal 2006, down from £247 million in fiscal 2005. A continued decline in operating performance could result in a liquidity crisis, hampering the company’s capital expenditure strategy. The company must combat the causes of such a significant decline in revenues if it is to remain competitive and retain its standing within the industry.
C&W has been recording negative returns compared to its peers in recent years. During the five year period 2002-2006, the company’s return on assets, investment and equity were -23.5%, -35.2% and -51.1%, respectively, compared to the corresponding industry averages of 1.4%, 1.9% and 8%. Negative returns indicate considerable scope for improving resource utilization and operating efficiency.
Methodology
Analytic Tools
To complete a relevant research on Cable & wireless to identify the key issues I will be using various ways and look in to various factor.
•Internal environment
SWOT analysis: we will be looking at strength (key success factors) weaknesses opportunities and threats. Various performance ratios will be analysed to determine the effectiveness and the efficiency compared with industry competitors (benchmarking).
•External environment
Porter’s 5 forces: the attractiveness of the telecommunication industry in which cable & wireless operates will be measured using, bargaining power suppliers, bargaining power of buyers’ threat of new entry, threats of substitute and competitive rivalry.
Industry/Market profile and analysis: The telecommunications industry as a whole will be evaluated to determine new markets and opportunities in the industry as a whole.
PEST analysis: This will used to appraise the political, economic, social and technological issues that affect cable &wireless.
Research Methods
The group has carried out primary and secondary research. We have derived first-hand information from a staff of Cable and Wireless and. Secondary research was performed; journals, newspapers, annual reports and the internet has been used to abstract the information required to analyze and propose options for solving the problem of the declining revenue and poor returns of Cable and Wireless.
Internal Environment
Cable and Wireless (C&W) is an international telecommunications company. It provides voice, data and internet protocol solutions to business and residential customers across the Caribbean, Panama, Macau, Monaco, the Channel Islands, the UK, the US, continental Europe and Asia. C&W has extensive networks, which allow it to deliver quality telecom solutions. However, the liberalization of the markets in which C&W is the incumbent operator is leading to increased competition, which could result in a loss of market share.
SWOT Analysis
Strengths
Extensive networks
C&W has an extensive network infrastructure. With a world class internet protocol backbone network, the company is a tier 1 operator in Europe. The company’s network in the US allows it to serve 311 US metropolitan areas. C&W has interests in 78 major international cable systems, which provides it with access to every continent.
The company’s Global Roaming Exchange network allows mobile operators in over 70 countries to route General Packet Radio Service (GPRS) traffic to far end operators. C&W also has national telecom networks in the UK, the Caribbean, Europe, Asia, Panama, the Middle East, and in the Atlantic, South Pacific and Indian oceans. An extensive network allows C&W to deliver quality voice, data and internet protocol solutions to customers.
Strong international business
C&W has a strong international business. The international segment, which accounts for 37% of revenues, provides mobile, broadband, domestic and international fixed line services to residential and business customers in 33 countries in the Caribbean, Panama, Macau, Monaco and the Channel Islands. The company is the incumbent operator in most of its markets. C&W is the market leader in 18 out of the 22 markets in which it provides mobile services. It is also the market leader in all of the 21 markets in which it provides broadband services. As of March 2006, the international segment had 2.7 million mobile customers, 275,000 broadband customers and 1.5 million fixed line customers.
The mobile and broadband sub segments are largely driving the revenue growth of the international business. In fiscal 2006, the broadband customer base grew by 97%, while broadband revenues increased by 72% to £57 million.
During the same period, the mobile customer base expanded by 22%, while mobile revenues rose by 19% to £360 million. As a result, international business recorded a revenue growth of 7.8% in fiscal 2006. More importantly, international business generated an operating profit of £315 million in fiscal 2006, which partially offset operating losses in other divisions. Strong international business has enabled C&W to offset weakness in other divisions.
Energis
C&W completed the acquisition of Energis in November 2005 and managed to integrate it with its UK business by March 2006. Energis provides scale and a strong customer base to the UK business of C&W. Energis is the third largest fixed line telecommunications operator in the UK. It provides voice, data, internet, and contact centre services and security solutions to large organizations in the UK and Ireland.
Energis has a strong customer base including the likes of BBC, Caudwell Communications, RAC, Royal and Sun Alliance, the UK Government, Virgin and Wanadoo. For fiscal year ended March 2005, Energis recorded revenue of £720 million and EBITDA of £116 million. In fiscal year 2006, Energis contributed £266 million of revenue and £35 million of EBITDA to the UK results from the date of its acquisition. The combination of C&W’s UK business and Energis is expected to result in operating and capital expenditure synergies of £55 million in 2006-2007, forecast to rise to £80 million in 2007-2008. EBITDA synergies are expected to reach £40 million in 2006-2007 and £55 million in 2007-2008. Energis strengthens the competitive position of the UK business.
Weaknesses
1. Weak profitability of Bulldog
Despite strong growth, C&W’s Bulldog division continues to record operating losses. Bulldog provides broadband and telephony services to residential, small office/home office and small and medium enterprise markets in the UK. This division has managed to improve its customer base from 10,000 customers in March 2005 to 118,000 customers in March 2006, but its operating losses rose sharply from £30 million in fiscal 2005 to £120 million in fiscal 2006.
In the UK broadband market, Bulldog is unable to match the bundled offers of Carphone Warehouse and pricing of Orange. Bulldog is finding it difficult to generate profitable growth without an established brand and retail distribution. Effective April 2006, Bulldog has become a part of C&W’s UK business division. The continuing weak profitability of Bulldog could hurt the operating performance of the UK business.
2. Negative returns
C&W has been recording negative returns compared to its peers in recent years.
During the five year period 2002-2006, the company’s return on assets, investment and equity were -23.5%, -35.2% and -51.1%, respectively, compared to the corresponding industry averages of 1.4%, 1.9% and 8%. Negative returns indicate considerable scope for improving resource utilization and operating efficiency.
3. Poor operating performance
C&W recorded a poor operating performance in fiscal 2006. The company recorded an operating loss of £67 million during fiscal year 2006, compared to an operating profit of £131 million in 2005. Cash flow from operations has also declined to £56 million in fiscal 2006, down from £247 million in fiscal 2005. A continued decline in operating performance could result in a liquidity crisis, hampering the company’s capital expenditure strategy.
Opportunities
1. Growing demand for 3G services
Demand for third generation (3G) mobile services is expected to increase in the near future. Demand for 3G services, which offer advanced features like video telephony over mobile phones, high speed video transmission and data transmission, is expected to increase globally. C&W has mobile operations in 22 countries worldwide and about 2.7 million mobile customers. C&W rolled out Global System for Mobile (GSM) networks in Jamaica, Barbados, Cayman, St Lucia, Dominica, Grenada and St Vincent in 2004. During fiscal 2006, the GSM customer base of the company increased by 56% to over 1.9 million customers.
Growing demand for 3G services, which offer higher margins, would help the company increase its profit margins.
2. Fixed mobile convergence solutions
Demand for fixed mobile convergence solutions is increasing. Consumers have been demanding the convenience of using mobile and fixed line services through a single handset. Fixed mobile convergence solutions allow consumers to use their mobile handsets for fixed line connections at home, without having to use a separate fixed line phone. Typically, fixed mobile convergence solutions reduce mobile spending by 20% to 30%. BT has already launched BT Fusion, a fixed-mobile phone for consumers and small businesses.
In May 2006, BT announced the launch of a new fixed-mobile converged service for large businesses and multinationals. In the same month, C&W announced plans of offering fixed mobile convergence solutions to high end corporate customers. Increasing demand for fixed mobile convergence solutions will allow the company to boost revenue growth.
3. Next Generation Network
C&W announced plans of transforming its UK core network into a next generation network in 2005. This transformation, expected to take three years, is estimated to cost £190 million. It involves the convergence of C&W’s existing five separate service platforms onto a single integrated IP service platform; the reduction of backbone nodes by 50% and rationalization of metro-edge and metro-access nodes; and the installation of ten new soft switches to replace the existing seventy legacy voice switches.
Upon completion, this network will allow the company to offer highly innovative and cost competitive services. This single, integrated and versatile IP based platform will provide C&W with a significant competitive advantage in the UK.
Threats
1. Pricing pressures
The transatlantic, pan-European and US markets are all currently experiencing considerable levels of overcapacity. Overcapacity resulted in a severe price decline in these markets. Due to lower prices many network operators have become financially weakened, and this resulted in consolidation across the industry. Leveraging their scale, the larger companies have cut down prices. This is compelling C&W to lower its prices to combat a threatened loss of market share. Intense price competition puts pressure on the company’s profitability and market share.
2. Liberalization of international markets
Many of the markets in which C&W is the incumbent operator are transitioning from monopoly environments to competitive markets. With the global trend towards liberalization of communications markets, the host governments want to modify exclusive licenses, in order to facilitate an orderly transition to a fully competitive environment. For instance, the Jamaican market was liberalized in 2003, followed by Trinidad and Tobago in 2005.
Increasing competition, particularly in Barbados (following liberalization of the market in February 2005), was the main driver of the 10% decline in international voice revenues in fiscal 2006. The liberalization of the markets in which C&W is the incumbent operator is leading to increased competition, which could result in loss of market share.
3. Increasing contact centers in India
An increasing number of companies in UK are off shoring services to India, which could affect the contact center business of C&W. The UK majors such as HSBC and Prudential have already started operations in India, and many others are expected to follow. In 2004, 17% of the agent positions (number of seats) in India were serving UK businesses. The total number of agent positions in India is forecast to reach 363,100 by 2009, from 179,000 in 2004, a CAGR of 15%. The growth of contact centers in India would erode the contact center solutions business of C&W.
External Environment
Porter’s Five Forces
The Porters Five Forces of Competition Model (figure 1) is used to analyze the environment in which Cable and wireless compete in. It operates in an industry which is characterized by intense competition, high demand and constant technological demands. Analyzing the external environment will enable Cables and Wireless to understand competitors better and to find a improved strategic method of remaining completive.
Threat of new entrants
Cable and Wireless compete in global market operating in over 80 countries. Due to the scale that the company operates on, a high amount of capital investment is necessary making this the biggest barrier-to-entry. To cover the high fixed starting up cost, entries would require a high level of financial backing which is unlikely as solid operating skills and management experience is fairly scarce. The ownership of a telecom license also presents a huge barrier to entry. In countries such as the US, an application to Federal Communications Commission must be made to receive regulatory approval and licensing. The high competition already in place elevates the barriers.
However Cable and Wireless face threat of entry from already existing organization collaborating in joint ventures. An example of this would be the merger of ATT and T Media One. Such competitors are a new threat as they formulate synergy enabling them to become major competitors. There is also a limited amount of "good" radio spectrum that lends itself to mobile voice and data applications.
Bargaining power of suppliers
The telecom equipment suppliers would seem to have greater power over the telecom operate. This may appear so as they provided high-tech broadband switching equipment, fibre-optic cables, and mobile handsets and billing software. However there are actually a numerous large equipment makers around like Nortel, Lucent, Cisco, Nokia, Alcatel, Ericsson, Tellabs are just a few of the supplier names.
There are enough suppliers, arguably, to dilute bargaining power. Even though the equipment provided by suppliers is essential for Cable and Wireless to compete in the industry, if one supplier is unable to provide them with what they want they can easily approach others. An example of this is Nokia's network infrastructure Nokia supply Cable & Wireless with GSM and WCDMA 3G radio networks, including HSDPA, and core networks, including the Nokia MSC Server mobile soft switches.
Cable and Wireless have improved they relationship with suppliers with the creation of my SAP and Accenture (system dealing with purchasing) receiving from the Chartered Institute of Purchasing and Supply Awards. The company has more effective dealing with suppliers which has weakened bargaining power of suppliers as many will be willing to work with a company with a prestige’s reputation.
Bargaining of power of buyers
Customer of cable and wireless would be said relatively high bargaining power as the industry is fiercely filled with choice from numerous telecoms provided. Customers are forever seeking lower prices and better service. However this power can vary depending on the market segment .Small and individual customers i.e. residential customers have the highest bargaining power as switching cost are minimal if at all.
The costs for larger business customers however, especially those that rely more on customized products and services can be greater. In certain circumstances however whereby Cable and Wireless streamlined its business in the UK by axing up to 3,500 jobs over the next 4-5 years and reducing its customer base from 30,000 to 3,000 buyer bargaining power is driven down. This is however unhelpful for Cable as other competitors it can move in where they are moving out from.
Rivalry of competitors
The 90’s saw the level of competition these industries alter. With the de-regulation and receptive capital markets made it easier for new entrants to entry increasing rivalry. In a fast moving industry such as this, technological advances are paramount if a business such as Cable and Wireless are able to bet of competitors. Rivalry is high as competitors continually look for ways to lure customers with lower prices and better services.
It is more so than other industry as the products that are provided are very similar and the option for diversification are minimal. However these factors drive industry profits down meaning that high levels of exist barriers. Networks and billing systems cannot really be used for much else, and their swift obsolescence makes liquidation pretty difficult. The rivalry of competitors is increased by mergers in the industry.
Threat of substitute products
Threat of substitution can come in three main categories. Substitution of product for product, substitute of need and lastly substitute…. In the telecommunication industry all three are evident and the threat is very real. Substitution threats are created from products and services from non customary telecom industries. The competition for buyers is increasing in the cable, tv and satellite market. People working in that industry have direct lines in to homes and the services they offer i.e. broadband and satellite links can substitute for rapid company networking requirements.
The internet is putting telecom companies under pressure because its becoming a feasible medium for cut rate voice calls and could affect telecom companies income pertaining to their core voice. The constant development in technological advances makes threat of substitute very high. An example of this is the new Apple iTV devices which will receive programs wirelessly from home computer to play on the television screen.
PESTEL Analysis
Economic
Pricing pressure
The transatlantic, pan-European and US markets are all currently experiencing considerable levels of overcapacity. Overcapacity coupled with lower than expected levels of demand growth contributed to a severe price decline in these markets. This in turn resulted in many network operators becoming financially distressed and filing for bankruptcy or chapter 11 protection. This could compel C&W to lower prices to prevent erosion of its market share or to continue attracting new customers. If C&W is forced to lower its prices the financial condition may be adversely affected.
Reduction in capital spending
A significant percentage of the C&W's revenue is generated by providing business customers with telecommunications, IP, voice, data, managed hosting services and content delivery. The telecommunications industry is currently facing unfavorable market conditions, including amongst other factors, the decline in investment in the industry and decline in demand for certain telecommunications products and services. A continued slowdown in capital spending by service providers and other customers may affect C&W's revenues.
Currency risk
Fluctuating foreign currency exchange rates will have a significant impact on C&W's earnings. C&W generates a substantial percentage of its revenues (about 59.6%) outside of its domestic market in the UK. Fluctuations in the value of the currencies in the international markets in which the company operates will affect C&W's total earnings. For instance, C&W regional business reported revenues of £1411 million in 2003, a decrease of £55 million or 3.8% from 2002. Many of C&W's regional revenues and costs arise in currencies that are linked to the US dollar. Fiscal 2003 results were affected by, an 8% devaluation in the US dollar against sterling and a 14% devaluation in the Jamaican dollar.
Political/Legal
C&W faces regulatory and market access constraints in various countries resulting from laws, public policies and licensing requirements. Many of the markets in which C&W operates are in transition from monopoly environments to competitive markets. With the global trend towards liberalization, C&W is engaged with host governments, who want to modify exclusive licenses, in order to facilitate an orderly transition to a fully competitive environment.
Following the transposition of the EU electronic communications directives into national laws, member states will no longer require market entrants to hold an individual license. Instead, providers of electronic communications networks and services would be regulated through general authorizations. Accordingly the individual licenses that C&W holds in EU member states have been or will be revoked in the near future. Some licenses provide that, upon their termination, the relevant government may purchase, or have the option to purchase, the property, plant and equipment of the licensee in that territory at a fair market value. This may adversely affect the company's business. Furthermore it would lead to increase in competition in the markets and may adversely affect the company's market share.
Technology
Increased broadband penetration
There has been increased broadband DSL penetration in the UK recently. This provides companies the potential to change the economics of access for business customers, providing high quality, low cost voice and data applications on a single platform. Moreover, local loop unbundling (LLU) will provide selective opportunities driven by customer demand. Cable & Wireless' acquired Bulldog Communications in 2004. Bulldog offers a wide range of high speed broadband services using digital subscriber line technology. The acquisition of Bulldog will accelerate C&W's ability to deliver directly connected DSL solutions to existing and potential customers with an experienced team specializing in LLU services.
Greater awareness for security products
Demand for security products has been increasing significantly mainly due to greater awareness of security and homeland defense worldwide. The company provides access solutions comprising security services such as managed firewalls, intrusion detection and response, scanning and analysis and authentication and encryption services. Increased legislations aimed at improving law enforcement and security measures will increase demand for products offered by the company.
Market Position, Industry Competitors and Benchmarking
C&W is the world's fourth largest international carrier of voice traffic and operates significant international submarine cable and satellite systems that are centrally managed within the United Kingdom. The IP backbone AS3561 provides IP connectivity to the United Kingdom, United States, European and Japan regions. C&W is the second largest telecommunications company in the UK after British Telecom.
The following companies are the major competitors of Cable and Wireless plc:
- COLT Telecom Group Plc
- Level 3 Communications, Inc.
- NTT Corporation
- Verizon Communications
- Vodafone Group Plc
- Carphone Warehouse Group Plc
- The Easynet Group Plc
- Gamma Holding NV
- MCI, Inc.
- BT Group plc
- Global Crossing Ltd.
- Qwest Communications International Inc.
- Kingston Communications (HULL) Plc
Market Analysis
The leading geographical market is the US, which contributes $235.1 billion in revenues to the global industry. In recent years the markets of the developed world have been driven by broadband subscriptions, within the US alone there are over 41 million households and firms subscribed to a broadband connection. The Asia-Pacific market is increasing in importance due to the rapidly expanding economics of the NICS, China and India. Asia Pacific has the second largest market, with combined revenues of approximately $170.1 billion.
The global diversified telecommunication services industry consists of fixed line telecommunication services and alternative carriers. Growth rates in the industry dipped in 2003 but have since returned to a state of buoyancy as the telecommunication needs of the emerging economies boosted revenues. Eastern Europe is growing in importance; as are the markets of the Asia-Pacific region allow global industry to communicate on a level playing field. The global diversified telecommunication services industry generated total revenues of $580.2 billion in 2005, this representing a compound annual growth rate (CAGR) of 3.3% for the five-year period spanning 2001-2005. Fixed line revenues are unlikely to match present revenue growth in the future as the demand for wireless forms of communication take increasing hold of the wider telecommunications industry.
In the US alone there are over 41million households and firms subscribed to a broadband connection. The Asia-Pacific market is increasing in importance due to the rapidly expanding economics of the NICS, China and India. Asia Pacific has the second largest market, with combined revenues of approximately $170.1 billion. Looking forward, the industry is forecast to accelerate its current performance, with an anticipated CAGR of 4.6% for the five-year period 2006-2010 expected to drive the industry to a value of $727.4 billion by the end of 2010. Volumes are unlikely to see large gains in terms of growth; revenue growth will largely be driven by rising prices and technological substitution. The rapid industrialization of China and India will continue to drive the industry.
OPTIONS DERIVED
PLAN A
Continue to seek out alliances to expand
Cable &Wireless’s principal operations are in the Caribbean, Panama, Macau, Monaco and the Channel Islands. Its ownership of these companies is varied – some are wholly owned and others are partly owned with the public, the local government or other corporate partners. Its 33 businesses comprise 24 subsidiaries and 9 joint ventures and associates.
Cable and Wireless can move forward by continuing to build coverage in larger markets and utilize mergers and acquisitions for further expansions. In smaller markets, it can have affiliate or form new partnerships in order to expand their networks. They will therefore pay lower than typical roaming rates for customers that travel to affiliate markets. It can also use joint ventures to build out certain market segments where shared networks make the most economic sense. Cable and Wireless can continue to use roaming agreements to extend coverage. Increasing and solidifying its international coverage. This is critical in order to compete successfully and reduce the pressure on its margins.
Global brand strength
Cable and Wireless’s recognition as a global brand should build upon the strength of its operating company brands. This will enables it to embark on more high-profile marketing campaigns which will give it the ability to offer global services which companies operating in individual markets would find difficult to do on their own.
This will therefore give Cable and Wireless an important competitive edge in local markets. Due to the diversity of its markets in terms of size, geography and culture, it should treat each business individually by tailoring its services to the relevant market – but make effective and efficient use of scale and position as a global network.
Exposure in emerging markets
Cable and Wireless has investments in many emerging markets in Asia, Latin America, the Middle East and Africa. From the industry analysis of this report, China and India represent two major markets for cellular telecommunications that are likely to grow rapidly in future years. China is one of the world’s largest mobile phone markets and though, Vodafone has acquired a presence in it through China Mobile Limited (Vodafone currently owns 3.3% of China Mobile Limited), this presence is small.
This provides less opportunity to fully exploit this lucrative market. India also appears very appealing, with a population in excess of one billion, where the company as no presence. The company’s lack of presence in emerging markets acts as a disadvantage for the company as it is unable to leverage on the growing opportunities in those markets.
Saturday, 15 December 2007
Debt consolidation: cure or continued credit problems? (1)
Interest rates haven't been this low for decades, tempting some consumers to take on additional debt to ease existing credit woes. The goal is to consolidate various higher-interest balances into one, easier-to-handle and less-costly package.
But be careful of what looks to be a quick fix.
"You're getting symptomatic relief, not a credit cure," says Chris Viale, general manager of Cambridge Credit Corp., a nonprofit credit counseling agency based in Agawam, Mass.
This fighting-fire-with-fire approach can take several forms. There are debt-consolidation loans, balance transfers to a zero-percent credit card and home equity loans or lines of credit.
But, says Viale, 70 percent of Americans who take out a home equity loan or other type of loan to pay off credit cards end up with the same (if not higher) debt load within two years.Viale's statistics underscore a major problem with debt consolidation: It feeds upon the tendencies that got you in trouble in the first place. By taking on yet another creditor, you're adding the proverbial fuel to the fire. In this case, it's your money that's burning.
Plus, if you've taken on so much debt that you're looking for more as a solution, chances are you won't qualify for the very low interest rates you see advertised. Those generally go to people with stellar credit ratings.
However, if you're at the end of your credit rope or swear that this time you'll be more disciplined, debt consolidation may be something to consider despite its risks. Here are some popular forms of debt consolidation, how they work and a look at their pros and cons.
Home equity loan or line of credit
Home equity lines or loans often are touted as a quick and easy way to get out of debt. By leveraging your residence's value, the pitch goes, you can get money to pay off other bills and a tax break, too.
But borrowing against your house can backfire. The biggest risk: You could lose your home if you default on the loan.
"Some hardship occurs and now they have double the debt and if it's secured by their home, they could lose it," says Diane Giarratano, director of education at Garden State Consumer Credit Counseling in Freehold, N.J.
And while equity loan interest generally is tax deductible, it could be limited in some situations. Even when it does provide a tax break, Cambridge's Viale says "that doesn't mean it makes fiscal sense."
Giarratano agrees. "Banks will tell you how much you can borrow," she says. "That doesn't mean you should borrow the total amount, but that's what people do."
Still, a home equity line of credit or loan to pay off creditors can work for some debt-burdened homeowners. Just be sure to do your homework to guarantee that the home equity dollars and cents make sense. This Bankrate calculator can help your determine whether borrowing against your home's equity is a wise move.
Zero-percent credit card
What about people who don't own a house? In these cases, many turn to zero-percent credit cards to reduce debt. Again, prudence and discipline are required.
Companies offer these rates as teasers -- enticements for you to switch credit card vendors. Much of the time, card companies target consumers with better credit, so that may leave someone struggling with debt without this option.
Even if you do qualify for a zero-percent or similar single-digit rate, it won't last forever. Make sure you know when it will end and what the rate is expected to jump to when it does.
The low rate also lasts only if you pay on time. One late payment and the credit card company will jack up the rate. Also look for hidden fees and charges that can increase the actual cost of credit.
"It's a short-term fix," says Viale. "The only way it works is if you are really meticulous about paying it and stay on top of it and then move onto another credit card before the low interest rate expires."
Opening new credit card accounts every six months, however, could negatively affect your credit rating, he cautions.
And to successfully lower your debt load, you'll need to pay far more than the smallest amount the card company will accept, especially after that zero rate disappears. "Paying the minimum for a $20,000 debt won't cut it," notes Viale.
Bankrate's minimum payment calculator illustrates Viale's assessment. Say, for example, you transferred $20,000 of other debt to a zero-percent card and paid $1,000 on it by the time the rate jumped to 14 percent. If you make only the minimum monthly payments, it will take you 1,134 months -- or 94.5 years -- to erase your remaining $19,000 balance. If you live that long, you'll pay $64,805 in interest. And that's presuming you don't charge another thing during that time.
Debt consolidation loan
Did the credit card computations scare you into looking for another option? There's always a debt-consolidation loan. Offers for these financial products are an e-mail box staple. Chances are you get a dozen or more everyday suggesting this as the solution to your growing debt problem.
A major appeal of consolidation loans is convenience. Instead of paying 20 different creditors who are charging different rates at different times of the month, you take out one big loan and pay off all those accounts. Then you make a single payment on that loan once a month.
But ease doesn't automatically translate to savings.
Before you sign on the dotted line, be sure that the costs of the new, bundled loan will truly be less than what you're already paying various creditors. For many consolidation-loan candidates, their current credit woes mean they won't get the lowest-available interest rate. Plus, when there is nothing to secure the loan (such as your home), expect the lender to bump up the rate.
Calculate interest and fees on all your existing accounts to determine the total of the payments you now make. Then compare those amounts with the consolidation loan numbers to make sure it truly is a better choice.
And, as with any product, shop around. The bank down the street may offer an attractive loan rate, but a check of your local credit union could turn up better terms, says Deborah McNaughton, author of "The Get Out of Debt Kit."
"Credit unions also tend to be more lenient than the banks," adds McNaughton.
Read part2Tuesday, 11 December 2007
The Death of Google Adsense And Other Myths
What happened?
First, Google made a change in its Adsense program, letting advertisers choose between putting their ads in the search results or on the content pages of Adsense publishers. Search won out and started to receive the higher bids. Search results convert better than content ads.
Next, Google has cracked down on Junk Adsense sites, like they should. These sites consisted mainly of software generated re-hashed search engine links and were totally annoying to say the least. But Google also cracked down on ‘squeeze pages’ or ‘affiliate landing pages’ - a lucrative source of income for many online marketers, mainly because these pages helped marketers build an opt-in list or use permission based email.
The results of these changes produced an Adsense meltdown for many online marketers.
Some Internet marketers are speculating recent changes could even mean the death of Adsense. One online marketer, Scott Boulch even published a free report entitled ‘The Death of Adsense".
Many affiliate marketers would agree with Boulch on some of his points, especially the obvious fact that using Adsense on your web content is starting on the bottom rung of the online marketing ladder. Instead of receiving pennies per click with Adsense, alert marketers and webmasters have already discovered that by using CPA (Cost-Per-Action) and direct affiliate links, they can produce significantly more revenue from their web pages. Why earn pennies per click when you can earn $5, $10 or OVER $100 per click?
But the fine people at Google are catching on...
In the past Google has made its own swing to the Cost-Per-Action direction with its referral system for the Firefox Browser and giving webmasters credit for signing up Adwords and Adsense accounts.
Many online marketers believe Google needs to expand on these baby steps and open their Adsense affiliate program up to third party products/advertisers. In a recent company statement Google offered some hope: "We’re always looking for new ways to provide effective and useful features to advertisers, publishers, and users," the company stated "As part of these efforts we are currently testing a cost-per-action (CPA) pricing model to give advertisers more flexibility and provide publishers another way to earn revenue through AdSense."
Basically, in cost-per-action, advertisers pay for leads, purchases or customer acquisition. It would help with the click fraud issue and the monetary returns could potentially make Adsense’s revenues pale in comparison.
As more and more commerce goes online... acquiring customers for such diverse services as insurance, real estate, telephone, marketing, web hosting, travel, mortgage loans, cable TV, banking... you name it, almost any service or product sold in the marketplace is now turning to the Internet for customers and lifelong clients.
Enormous sums of money will change hands. Perhaps, the most lucrative of these is customer acquisition. Advertisers are turning to the Internet and webmasters/marketers for acquiring these lifelong customers for their respective services and products. Businesses and companies are quickly realizing paying an attractive lead generating fee/commission is smart business. They quickly build a client base for their services or products and quickly recoup their expenses - realizing in the long run these leads will generate huge profits.
It can also mean huge profits for the CPA networks like ValueClick’s Commission Junction and Rakuten’s LinkShare who supply the advertisers with publishers and website marketers to harvest these leads. It can be a lucrative venture for all involved, especially for those online marketers who have cornered the search engines for lucrative niche markets in big ticket items. Even small ticket items pay quite well for those marketers who know how to market online.
Contextual advertising is fine, but CPA (Cost-Per-Action) will offer much better returns for the website owner. Making any profitable site much more profitable. It will and is opening up a whole area of marketing opportunities that never existed before we had the Internet. Creating a complex structure of advertisers, publishers and the Affiliate/CPA companies that connect the two.
Of course, cutting out the middle man has always been even a more profitable venture for most marketers. As more and more webmasters realize they can make much more with dealing directly with companies, rather than going through a middle process like Google Adsense or the countless other affiliate/CPA networks ... online marketers can reap even bigger rewards.
For an online marketer when you get a phone call or email from the CEO or the affiliate manager with a company or service you’re promoting with your website - you know you have made it! Dealing directly with a company usually means bigger commissions and special exclusive deals just for you or your sites.
Only fly in the ointment, all that extra paperwork and business wheeling and dealing. Many marketers and website owners like the idea of someone else handling all the tracking, collecting payments, promotional materials... they just like to sit back and build more websites and content. It gives the affiliate marketer a lifestyle that they are looking for on the web. They just like to market and promote with their sites and let someone else worry about the details.
Therefore, there will always be a place for contextual ads like Google Adsense... Rumors of my demise have been greatly exaggerated.
However, could CPA be a better alternative for the current Adsense contextual ads?
Google would be the natural choice for a middleman if there ever was one. Besides, many savvy marketers know the Google brand name is trusted online, any product/service promoted through Google would be an easy sell. Many argue Google already dominates the web, why should it not be the one to handle these CPA transactions through its Adsense program.
On the flip side, over countless updates and changes to its indexing, many webmasters have experienced more than a few negative dealings with Google. Many have won, many have lost in this Google Age, but all have realized riding the Google Search Engine is like running with the bulls at Pamplona, totally thrilling unless you’re one of the unfortunate few who get trampled in the process....
Readers of this blog will get the book as soon as I have it ;)
Debt consolidation: cure or continued credit problems? (2)
Managing, not adding, debt
Viale is a much bigger fan of debt management, which isn't a surprise since he heads up a debt management firm. But McNaughton and other experts also point to credit counseling instead of shifting debt as the way to go.
They favor debt management because it costs less and is quicker than a debt-consolidation loan. Viale says someone owing $20,000 would end up paying $6,000 to $8,000 in interest and fees and be debt free in four to six years by using a credit counselor. If that person took out a 15-year home equity loan at 10 percent (because his credit wasn't good enough to get him a lower rate), Bankrate's loan calculator shows he'd end up paying $18,686 in interest on top of the twenty grand he borrowed.
But if you just can't get a handle on your bills by yourself, you should explore credit counseling. Getting professional help in managing your debt can help you change your credit behavior. People that have taken on too much debt tend to go into denial; they'd rather not know how much debt they owe. A professional debt manager will make you face up to your obligations.
Credit counseling agencies also force you to stop racking up debt. In exchange for consolidating your debt and working with your creditors to reduce your payments, credit counselors require you to give up your credit cards.
Credit counseling, however, is not without its costs.
One downside is that your reduced payment plan will probably show up as a mark against you on your credit report. Even though your creditor agreed to the reduced payment, you technically did not pay your account as called for in your original credit agreement.
An even more costly potential pitfall is the disreputable debt counselor. Some credit counseling and debt-consolidation companies are only interested in making a quick buck on debt-ridden consumers. Some firms offer shoddy service at sky-high fees. Others are out-and-out scams.
To find a reputable firm, verify certifications or third-party registrations. Check with the Association of Independent Consumer Credit Counseling Agencies or the National Foundation of Credit Counseling to see if the service you're considering is a member of either group. Also ask the service for references and then confirm them.
Make sure that the debt management or credit counseling firm answers all your questions and that you have a firm understanding of how the process will work and what it will cost. If the company won't give you straight answers or you don't understand what's going on, don't sign up with that company.
Sunday, 9 December 2007
Everything You Need to Know About Link Popularity
The number of websites that link to your website is one of the factors that help search engines determine your relevancy for a search term. Link popularity and gaining new links from outside websites to your website have proven to be a popular concept for people seeking to improve their search engine rankings.
What is link popularity and how exactly does it work? Search engines don't just look at the content of your website to determine if you are a match for a search. They also look at the number of outside websites that can validate, by linking, that you are a good match.
Search engines have also begun to rank the importance of the sites that link to you. This means if the New York Times links to your site, your credibility is higher than if Joe's Online Newspaper provides a link to your website. Search engines also consider the text contained in the link that is pointing to your website. If the text in the links contains keywords you are trying to compete for, the search engines consider your site to have even greater credibility.
Since link popularity has become a factor that people feel like they have some influence over in determining their search engine positioning, many solutions have been proposed for growing your online link popularity. One of the more popular ways is also one of the least effective.
Several software programs have been written that help you create lists of websites in your space that might be willing to link to you. These programs also help you gather the email addresses for these sites and even help you craft an email requesting that the site add a link to yours.
The concept sounds good but the results are often mixed. If you use one of these tools and simply follow the templates they give you, your email will read like a spam message that won't be taken seriously.
The best way to build long-term link popularity is to offer good content and features that provide real value to your audience. As people discover your website and realize its benefits, the likelihood of them linking to your website naturally increases.
There are several critical targets if you want to build up your link popularity without appearing to be a spammer. The first is good links from Yahoo and the Open Directory Project. Both of these sites are human based directories that have a lot of influence over search results. If your site is listed in the correct category and has a good description, links from these two websites are seen as validating you are the real thing.
The second place it's important to have a link from is topic specific or niche directories. These are websites that are dedicated to news and information that is an exact match for what you provide online. If you have a website that deals with tractor parts, being listed on sites that focus on tractors is very important. In the case where a niche website doesn't know about your website, it's okay to ask them to link to your website. But your message should be personalized to them and also tell them the benefit or feature their users will get from linking to you.
Another part of the web that helps build your link popularity is resource sites. Resource sites are lists of links that people put up on their own. These pages are often spread amongst friends and readers who find good information available from the resource. In order to reach this audience, a good PR campaign and press releases can ensure that these individuals know you exist and have a link to your website that they can easily include.
One of the most overlooked spots for building link popularity is links from partners and vendors for your business. Because you already have a business relationship with these companies or individuals, you are more likely to be able to request and receive a link from their website. These websites help validate your place online and also establish you within a community of websites online. If you are visible to the community, you are more visible to the search engines.
Link popularity also starts at home. You must make sure your link architecture is solid and easily followed by search engines. That's the first way that search engines see you. It's also the way that visitors find information within your website. The easier you make it on your audience to find good information, the more likely they are to link to it.
The final way you can work to increase your link popularity is to participate in newsletters and online forums that relate to your website. You don't want to just jump in and give a plug for your URL. You must participate in the discussion as an expert or authority who gives good advice. When you sign your name at the bottom of your posting, be sure to include a signature that includes a link to your website. If these forums and newsletters are archived and remain online, search engines continue to see them and the links they contain.
If your website doesn't have a lot of content and you are wondering how you can build your link popularity you should think about building a tool or feature on your website that will be valuable to your online audience. Marketleap's Search Engine Marketing tools are a good example of a feature built to generate link popularity.
Marketleap's free tools provide unique data for search engine marketers that they can't find other places. We've also made it possible for people to place our tools on their sites easily by cutting and pasting a piece of HTML code into their web page. Because the tools are valuable to our community, many websites have linked to the tools or added the tool to their own website. Consequently, if you search for "link popularity" at Google, Marketleap will usually appear in the top 3 results on the first page.
Link popularity will continue to be an essential factor in successful search engine marketing initiatives for the foreseeable future. Links are a helpful tool for search engines trying to wade through billions of documents and find ones that are relevant to their users.