May 25, 2022

Archives for March 2012

Why Amazon Gained 380% And Hewlett-Packard Lost 42% In The Past Five Years

Hewlett-Packard Company (HPQ), one of the greatest success stories of American enterprise, seems to have lost its magic.  Superb management and great products resulted in HPQ’s stock rising relentlessly from the mid 1960’s through early 2000 when the stock traded in the $70 range.  After 12 long years, HPQ’s stock trades for a third of its value, closing today at $23.46.

HPQ - courtesy yahoo.com

Meanwhile, Amazon (AMZN), under the brilliant leadership of Jeffrey Bezos, has seen its stock price almost double since 2000.  Over the past five years, Amazon’s stock price has risen by 380% while Hewlett-Packard’s has declined by 42%.

AMZN - courtesy yahoo.com

The rise of Amazon and the fall of Hewlett-Packard involve many complex factors, but one critical area where Amazon absolutely scorches Hewlett-Packard is in customer fulfillment, an essential aspect of e-commerce.

AMZN VS HPQ - COURTESY YAHOO.COM

Two years ago I purchased a Hewlett-Packard laptop on which the battery suddenly went dead.  How hard can it be to order a replacement battery for a HP computer from the HP website?  Harder than you can imagine. Here are the results after typing in the information on my computer into the HP search box.

Search HP

for products, services, drivers, support, news and information
No results found for battery for model dv4-2145dx. Please try again.
No results found for replacement battery for model dv4-2145dx. Please try again.

Numerous other queries brought up useless information and links to unrelated topics.  Should it be that difficult and annoying to purchase a replacement battery for an HP computer from the HP website?

On the Amazon website, the query “replacement battery for model dv4-2145dx” instantly  brought up 2 pages of results for the exact item I needed.  Ordering the product took less than 60 seconds and a scheduled delivery time of two days.

What Financial Issues Do People Worry The Most About?

Besieged by the rising cost of energy and food, many consumers are barely able to make ends meet.  Throw in the fact that for many consumers real wages have been stagnant for decades and you have the makings for the establishment of a permanent financial underclass that is living on the edge of financial disaster.

According to a survey of 2,016 Great Britain consumers done by MoneySupermarket, the financial worries most on the minds of people is the rising cost of fuel and food.  Portraying the deep financial distress of the average consumer, only 9% of survey respondents said that they foresaw no financial worries in the next year.

The survey also showed that 8% of people had no one to turn to for help if a financial emergency arose.

The infographic shown below breaks out the financial worries of the survey respondents by age group.  It is interesting to note the older respondents had the greatest worries about the cost of fuel, utility bills and food costs, suggesting that the older age groups have less disposable income and/or are worried about having enough money for retirement.

The precarious financial condition of  many individuals in the survey is highlighted by the impact that a relatively small amount of money would have on their financial situation.  Shown below are the survey results to the question of what respondents would do if they suddenly received 1,000 British pounds, the equivalent of US $1,584.  Almost 50% of respondents replied that a 1,000 pound windfall would help to relieve their financial anxiety.

Although the survey does not directly inquire as to what amount of financial assets the respondents had, it appears somewhat obvious from the survey answers that most had very little or no savings on which to fall back on.  Nor does the survey report on what is the biggest problem confronting virtually every developed country in the world – the crushing level of debt burdens on consumers and governments.

Central banks have probably prevented a 1930’s style deflationary depression by printing trillions in paper currency to support over-leveraged banks, consumers and governments.  Unfortunately, Central Banks cannot manufacture what is most needed in weak economies which is  jobs and higher incomes.