Howard Schultz, the CEO of Starbucks, has successfully transformed the coffeemaker into “the third place between your home and your work”. Could this business edge be replicated or competed? This is the central theme of our competitive analysis of Starbucks. We break down its financial report and marketing strategy to find the answer.Continue reading “Competitive Analysis of Starbucks: Behind The Experience”
From the customer perspective, Disney is representative of a perfect User Experience. It tells a magical story in movies, then actualizes it in the real world through the Theme Park. Our competitive analysis UX (User Experience) tries to identify another company with a similar edge.Continue reading “Competitive Analysis UX: How Mediocre Product Win”
The key point of the fundamental analysis of Starbucks
- Reckless buyback is the factor why we do not buy Starbucks.
- We are happy when Howard Schultz takes the Starbucks helmet and decides to suspend that buyback program.
- But when he said that the suspension is just a pause (Schultz wants to resume the repurchase program) We worry that this pause is just lip service to calm the Starbucks worker.
- Revenue and earnings have surpassed the pre-COVID level. It is a good sign.
- Starbucks has a decent competitive advantage in its brand. It creates a unique user experience – also a story. Something that almost no other ” restaurant” could replicate. Even with its mediocre coffee.
The key point of Intel stock valuation:
- Intel’s market cap is 148 Billion (end of July 2022) with 19.8 Billion earnings in 2021. It means that you need 7 years to break even. Too long for a company with no growth prospect like Intel.
- Even when the CHIP program is passed and executed, it will not boost Intel’s earnings significantly.
- It is not difficult to say that we don’t recommend investing in Intel. But it doesn’t mean that the stock price will not rise in the future.
- Like the management says, maybe this is the bottom. But we don’t know how long Intel will be in this pit. But smart investors still could exploit this situation.
- Amazon Web Services (AWS) offers an intuitively easy User Interface, flexibility, affordability along with more features. But this isn’t enough to prevent its customer to use the competitor Microsoft Azure (or even Google Cloud) as a secondary cloud provider (as backup). This circumstance allows customers to migrate completely to AWS rivals.
- Amazon is busy building economies of scope as a competitive advantage like its acquisition of Medical One, a telecare company, instead of creating or strengthening its cloud ecosystem.
- In the long run, we believe the market share of AWS could be slightly eroded gradually by more intense competition due to a lack of switching costs. We think Amazon should take care of this issue seriously, especially when the cloud is its most prolific segment.
Key points of Business Analysis of Intel:
- We believe Intel will get benefit from a government program that plans to fund 50 billion for the chips industry.
- In the normal old days, the vertically integrated that become Intel’s business model could serve as a decent competitive advantage. In modern days when the chips get smaller and much smaller, that competitive edge fades too.
- The chip monopoly with AMD should be a good thing, but this is technology. It needs to be stronger, faster, and better every year. AMD and Intel do not compete with each other. People and media bring them into the ring.
- Even if Intel could beat AMD, the ARM architecture poses a threat to x86 which Intel excels in.
- Intel looks cheap in the short term. It has strong connections with laptop vendors, government, and technology. But in the long run, the fierce competition – internal with AMD along with external threats like Qualcomm in the form of ARM – is waiting.
Let elaborate.Continue reading “Business Analysis of Intel: Preparation for Valuation”
Our takeaways for Disney Stock Analysis 2022, begin with the pros:
- Sticky customer, kids watch Disney again and again. Come to its park every holiday.
- Theme Park shows significant improvement. We believe this year it will achieve its pre-COVID performance. Another good news is Disney keeps enhancing its places. Elaborate later.
- Though till now Disney+ still burning cash to run its business, the ad-supported content will be the game changer (unlike Netflix). Disney’s content is specific, family-friendly, and targeted. It is good for a third party to access Disney viewers. We will elaborate on this later.
- Disney stock price is at COVID level (July 2022)
- Disney runs an expensive business that needs a high amount of capital. Theme Park requires massive investment, even their digital content needs regular reinforcement like the Fox acquisition in 2017. Unfortunately, Disney’s balance sheet isn’t as spectacular as its magical story to handle all of that needs easily.
- Management fails our expectations. Under though situation – the COVID – they prioritize themselves and leave shareholders.
- Lack of tailwind. The key driver for growth is increasing Disneyland ticket or subscriber fees. Reaching more people is more difficult. Disney is simply not a fast grower company.
Ok, now going to the elaboration section. You can skip this post if you don’t want to go into further detail.
Oh, don’t worry – we keep this post updated regularly.Continue reading “Disney Stock Analysis: Ads, Park”
Analysis of Netflix Stock is focused on answering this question: It loses 200 million subscribers in the first quarter of 2022. The streaming giant plan to launch an ad-supported program to cut the expense and offer lower subscription fees for the customer. Will this decision help company to regain or at least retain its customer?Continue reading “Analysis of Netflix Stock: Ads. New Chapter of Streaming”
If we inspect carefully the number of subscribers lost, actually Netflix is just fine. The streaming giant only lost 200 thousand subscribers from a total of 221 million. It is a tiny fraction, less than 0.1%. It is no big deal. Netflix said that number comes from 700 thousand losses due to Russian things. If we neglect Russia – Ukraine number, Netflix has an additional 500 thousand subscribers. Not bad. Far from it. Case closed. So, why we are here? To address a more important issue: Netflix’s Competitive Advantage.Continue reading “Netflix’s Competitive Advantage is Losing?”
In the last sequel of the Tesla episode, we know that Tesla has an impenetrable economic moat and promising earning power. But, with a sky-high valuation, is it worth buying? Our stock analysis of Tesla tries to shed the light.Continue reading “Stock Analysis of Tesla: Risk. Opportunity. Valuation”