Old 03-06-2015   #41
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Just that it is beside the point, as I was responding to this particular snippet:
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The business model is flawed, they had to sell 3,500 MM to recoup their money on that R&D/build...they sold 3 times that amount, but then open the new Portugal factory at a cost of 65 million Euro, but here is the cherry...Kaufmann funds the build, Leica then pay him rent....and Blackstone allow this?
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Old 03-07-2015   #42
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... I'm struggling with 'value added product' concept I have to admit.

What distinguishes a value added product from, well ... a product?
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Old 03-07-2015   #43
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... I'm struggling with 'value added product' concept I have to admit.

What distinguishes a value added product from, well ... a product?




http://en.wikipedia.org/wiki/Value_added

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[...]value added refers to "extra" feature(s) of an item of interest (product, service, person etc.) that go beyond the standard expectations and provide something "more", even if the cost is higher to the client or purchasor.[...] Value-added features give competitive edges to companies with otherwise more expensive products.
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Old 03-07-2015   #44
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... how odd ... that just isn't correct, value-added is the difference between the unit-cost and the unit-price when you sell something (what we pay our VAT on here in Europe)
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Old 03-07-2015   #45
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Russia...should make a Leica ...240 M copy...
The, Fed-8 ... Stalingrad Reparation special edition ... slightly brassed, sprinkled with concrete dust and stained with beetroot
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Old 03-07-2015   #46
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Stewart,

An artisan decides to buy 100 g of silver. All silver with the same assay grade is identical. This makes silver a commodity. The artisan will buy the silver at the lowest price because it's all the same. There is nothing to differentiate the value of the silver.

The artisan makes an intricately crafted piece of jewelry using their creativity and skill. Now that same 100 g of silver is worth much more than its commodity price because the artisan added value. The piece is well-made, aesthetically appealing and it's the only on in existence. So the 100 g of silver will sell for more than it's commodity price. It is a value-added product.

Is the finished piece a luxury item? That is a matter of context. In some cases it would be a frivolous luxury purchase that might only be worn once. In other cases it could be a cherished gift for a wedding anniversary, university graduation, etc. and worn whenever appropriate for decades.

To complete the analogy, suppose the craftsmanship was shoddy, the design was a copy of an dated style and the clasp was flimsy and unreliable. In this case the piece's value above the commodity price of 100g of silver is lower. It should, and would, sell for less.
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Old 03-07-2015   #47
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Stewart,

An artisan decides to buy 100 g of silver. All silver with the same assay grade is identical. This makes silver a commodity. The artisan will buy the silver at the lowest price because it's all the same. There is nothing to differentiate the value of the silver.

The artisan makes an intricately crafted piece of jewelry using their creativity and skill. Now that same 100 g of silver is worth much more than its commodity price because the artisan added value. The piece is well-made, aesthetically appealing and it's the only on in existence. So the 100 g of silver will sell for more than it's commodity price. It is a value-added product.

Is the finished piece a luxury item? That is a matter of context. In some cases it would be a frivolous luxury purchase that might only be worn once. In other cases it could be a cherished gift for a wedding anniversary, university graduation, etc. and worn whenever appropriate for decades.

To complete the analogy, suppose the craftsmanship was shoddy, the design was a copy of an dated style and the clasp was flimsy and unreliable. In this case the piece's value above the commodity price of 100g of silver is lower. It should, and would, sell for less.
... ah! yes. a lesson to all of us I'm sure ... not to resort to analogy when there is already a perfectly good actual definition in use.

It seems to me value-added product as you describe is simply something for business consultants to trot out, a sound bite, to make a case not proven by fact, yet close enough to added-value to convince people that they know what they are talking about eh?
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Old 03-08-2015   #48
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In fact many companies have exploited the value-added concept to generate billions of dollars in profits. It is not consultant voodoo BS. Consultants mostly create fictional scenarios at the request of the Board of Directors in order to justify implementing unpopular and unpleasant decisions to eliminate employees.

The corporation I once worked for sold off a huge division with a long history that made raw nylon materieals and automobile safety glass liner. The return on investment was too low. The profit margin was just a few points above the cost of oil used to create the polymers. Instead they invested in pharmaceuticals and biotechnologies where the profit was much greater than the cost of the raw materials. This occurred in the 1990s and this corporation has done rather well since.
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Old 03-08-2015   #49
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In fact many companies have exploited the value-added concept to generate billions of dollars in profits. It is not consultant voodoo BS. Consultants mostly create fictional scenarios at the request of the Board of Directors in order to justify implementing unpopular and unpleasant decisions to eliminate employees.

The corporation I once worked for sold off a huge division with a long history that made raw nylon materieals and automobile safety glass liner. The return on investment was too low. The profit margin was just a few points above the cost of oil used to create the polymers. Instead they invested in pharmaceuticals and biotechnologies where the profit was much greater than the cost of the raw materials. This occurred in the 1990s and this corporation has done rather well since.
Oh I agree, I think Smith used flour as his allegory ... $1 of grain when milled into flour and sold for $2 ... added-value is the difference after cost of sales have been accounted for

The point being that all product have it to a greater or lesser extent ... even those not making money
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Old 03-08-2015   #50
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Product differentiation?

Value added as a term/catchphrase/concept is present in marketing and sales; and as it refers to VAT; and as an accounting concept; and the highest ranked results in my google search for "value added product" favor an agricultural context. In all of the contexts it seems to in some manner refer to the process of turning raw materials into finished products.

Turning dead cow skin to leather = value added.
Turning leather into a camera case = value added.
Turning leather into a Luigi case = product differentiation.
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Old 03-08-2015   #51
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Maybe Leica should start wooing Apple. Nothing like a rich boyfriend. Leica were the forefront of innovation, creating compact quality cameras that liberated and revolutionised photography. The iPhone is doing the same now. If Apple could be convinced that it's cool to have a finger in the quality end of the market for their equivalent of small change, that might help Leica avoid the catastrophe that is engulfing the digital camera market.
And Apple would be able to unload some of that cash sitting offshore and avoiding US taxes. Still pocket change though, I suppose.

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Old 03-08-2015   #52
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I think the camera makers are just in for a tough ride right now. Leica is no exception. All the innovations and changes in customer behavior and traditional values seem to be in flux. Canon, Nikon and for sure Leica hardly have the money to compete with Apple.

Many of the factors specific to the problems at Leica may well be a limited market size for a digital M, quality issues, a new factory that was maybe too big for the market need and who knows what else. It's a little arrogant to play arm chair CEO and criticize Mr. Kaufmann. He did save Leica once I think.

On the other hand, I think Apple is the completely wrong partner for Leica. Apple is ruthless when it comes to technology advancement. They got rid off old technologies, even if it was one that they had championed. Firewire, ADC, PPC, etc. Need I say more?

When I do replace my M8, I hope that the future digital camera will remain compatible with my old lenses... But maybe that business model I want to throw MY money at simply is not viable anymore?

Lots of ifs in this equation!!
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Old 03-16-2015   #53
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Just read that Blackstone has bought the Sears Tower (yeah Chicagoans refused to call it the Willis Tower).
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Old 03-16-2015   #54
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The Internet and social media are destroying the "mainstream" digital camera market. Whether it's point and shoot cameras or DSLRs. The average photographer is not printing any more but wants to show their images instantly through social media or email. The camera phone makes this possible at sufficient quality with plenty of easy to use editing options to boot.

Current digital imaging quality is good enough for most everyone and has been so for the last couple years. The average user wants the ability to easily access his images to instantly to share with friends and family. With just a couple simple "button" clicks on my iPhone I can instantly share a photo or HD video.

The average camera owner has left his consumer DSLR at home as even leaving it on "P" for professional is way more complicated than using their phone to capture memorable moments. When it takes more than a couple buttons pushes to change ISO, format the card, choose from several menu trees to find what you're looking to change on the camera, it's left at home.

What Apple has done with most all their products was made them as simple to use as possible. Leica went in the wrong direction, in my opinion, adding LV and video in the new M. They made the camera much more complicated.
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Old 03-16-2015   #55
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The Internet and social media are destroying the "mainstream" digital camera market. Whether it's point and shoot cameras or DSLRs. The average photographer is not printing any more but wants to show their images instantly through social media or email. The camera phone makes this possible at sufficient quality with plenty of easy to use editing options to boot.

Current digital imaging quality is good enough for most everyone and has been so for the last couple years. The average user wants the ability to easily access his images to instantly to share with friends and family. With just a couple simple "button" clicks on my iPhone I can instantly share a photo or HD video.

The average camera owner has left his consumer DSLR at home as even leaving it on "P" for professional is way more complicated than using their phone to capture memorable moments. When it takes more than a couple buttons pushes to change ISO, format the card, choose from several menu trees to find what you're looking to change on the camera, it's left at home.

What Apple has done with most all their products was made them as simple to use as possible. Leica went in the wrong direction, in my opinion, adding LV and video in the new M. They made the camera much more complicated.
You may be conveniently ignoring some facts to support your argument. Leica recently introduce the M-A, a complete return to basics for film cameras, and they came out with the Edition 60 M, a radical concept for digital cameras.

I do think Leica is testing the waters in several directions.

I think that the camera manufacturers all need to come up with a very simple connectivity option that makes it very easy to upload web ready photos to the various social media sites with the touch of a button.
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Old 03-16-2015   #56
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I think the camera makers are just in for a tough ride right now. Leica is no exception. All the innovations and changes in customer behavior and traditional values seem to be in flux. Canon, Nikon and for sure Leica hardly have the money to compete with Apple.

Many of the factors specific to the problems at Leica may well be a limited market size for a digital M, quality issues, a new factory that was maybe too big for the market need and who knows what else. It's a little arrogant to play arm chair CEO and criticize Mr. Kaufmann. He did save Leica once I think.
Well, according to the Wall Street Journal, there is not that much wrong wth Leica's financial health and Leica is indeed the exception....

Quote:
By 2011 Leica was profitable and promising enough that private-equity firm Blackstone Group bought a 44% stake for an undisclosed price. Leica’s “reputation for excellence and innovation” was a big factor, said Axel Herberg, senior managing director at Blackstone.

Since then, Leica’s sales have risen around 35%, to €337 million in its most recent fiscal year ended March 31, 2014. The company doesn’t disclose profits



http://www.wsj.com/articles/camera-m...ightTopStories
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Old 03-16-2015   #57
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I also think that another factor we ignore is bigger than we think.

People are not looking to buy something that lasts a lifetime. They know they will want to change their technology in 2 years or less. They get excited when the next new thing comes out. Right now it is Apple at the front edge of the wave. In a few years it will be someone else.

For awhile cameras were riding that wave. A new digital model was coming out every year or so and they were more impressive each time. But now they are all pretty much the same and none will do what their smartphone can do.

So, everyone is off to find the next new thing. Heirlooms? That is what grandma has, right? No time for that.
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Old 03-16-2015   #58
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All we really need is a camera that has its own internet connection and an ability to downsize and send media to social media and other destinations on the fly.
Many prosumer camera buyers would gladly pay 20 bucks a month for direct internet access.
The Major camera manufacturers just need to stop being Luddites.

Last edited by Kwesi : 03-16-2015 at 10:38. Reason: typi
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Old 03-16-2015   #59
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This all seems like a lot of doom and gloom - is it really that bad ?
I've been reading a lot of Leica-related gloom for many years. The introduction of the M8 was the last nail in the coffin; then the other last nail in the coffin was the lack of IR filter in M8's sensor; the other last nail in the coffin was the streaking issue; the other last nail in the coffin was Hermes bailing out; the next last nail in the coffin was the "forever plan" never happening; the next last nail in the coffin was the M9, because people who had just bought the completely useless M8 were fuming about missing the full-frame wagon.

Actually, I've lost count of how many last nails have been hammered into the coffin. But surely this year's the year. Like last year, and the year before that, etc.

No, really, this is the last nail in the coffin.
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Old 03-16-2015   #60
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I've been reading a lot of Leica-related gloom for many years. The introduction of the M8 was the last nail in the coffin; then the other last nail in the coffin was the lack of IR filter in M8's sensor; the other last nail in the coffin was the streaking issue; the other last nail in the coffin was Hermes bailing out; the next last nail in the coffin was the "forever plan" never happening; the next last nail in the coffin was the M9, because people who had just bought the completely useless M8 were fuming about missing the full-frame wagon. Actually, I've lost count of how many last nails have been hammered into the coffin. But surely this year's the year. Like last year, and the year before that, etc. No, really, this is the last nail in the coffin.
It seems to be a very large coffin

(Or more likely very small nails)
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Old 03-17-2015   #61
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How about Fuji film? Could they be partners? I think the two are unique enough where people can still identify individual brand. Fuji's new glasses are stellar too. Put the 2 together and come up with some innovative digital rangefinder or some new MF mechanism in digital? Fuji has been very clever in the hybrid view finder and I think both companies can benefit from each other? While develop each other's product line and still keep their individuality.
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Old 03-17-2015   #62
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How about Fuji film? Could they be partners? I think the two are unique enough where people can still identify individual brand. Fuji's new glasses are stellar too. Put the 2 together and come up with some innovative digital rangefinder or some new MF mechanism in digital? Fuji has been very clever in the hybrid view finder and I think both companies can benefit from each other? While develop each other's product line and still keep their individuality.
Doesn't matter what company becomes a partner with Leica, the issue begins at the board room table.....Private company with a lot of family money invested being told what to do and how to take a company forward is a hard thing to do.
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Old 04-01-2015   #63
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Leica does not always does not always take the most logical or profitable route. Over a decade ago I talked with top Leica management about producing R lenses in Nikon F mount. It would have kept the R lens lineup in production and became a major profit source. You all know how many Leica lenses in Nikon F mount were sold.

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Old 04-01-2015   #64
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All we really need is a camera that has its own internet connection and an ability to downsize and send media to social media and other destinations on the fly.
Many prosumer camera buyers would gladly pay 20 bucks a month for direct internet access.
The Major camera manufacturers just need to stop being Luddites.
Could be that that would be a big seller. It's not what I 'm looking for. When you say "we," who exactly do you mean? I guess it's a general term for the masses?
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Old 04-01-2015   #65
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Is today April 1st ?
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Old 04-01-2015   #66
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Old 04-01-2015   #67
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I'm so dumb. I read the title of this thread and thought a "Blackston Exit" was some new camera bag.

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Old 07-23-2015   #68
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most of the suggestions here are barmy

The X is doing ok, the T is disappointing but far from dead and more lenses and bodies are on the way, perhaps even a FF in the future
The Q is doing very very well and the M is bread and butter, doing well, and Leica can still pull the rabbit out of the hat with film cameras, aka the M-A. I also notice that interest in the S has been rising with Amateurs since the cost cuts and introduction of the S-E.

I think Leica has a very large number of separate lines relative to the size of the company. I think they should do some consolidating rather then processing wacky ideas:

1. T - more lenses and a body update or alternative
2. Q - probably worth introducing a 50mm as no other fixed frame compact has that FL
3. M - keep going as before. Very interested to see what M260 holds
4. X - Probably needs a revamp. Would like "back to the X2" size
5. PannyLeicas - seem to be doing well, especially the new 1" and 4/3s models

I'd say steady as she goes, fine tune and continue to innovate on subsequent models and concentrate on improving the popularity of systems based on customer feedback.
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