Four Ways To Shift Automation From Tactical To Transformative

Organizations must transcend piecemeal approaches to business reinvention and design processes around people — tightly linked from the front to the back office, advises Girish Pai, who leads Cognizant’s Intelligent Process Automation practice.

“Going digital” has long been touted as a silver bullet for delivering better customer experiences and streamlining processes. Automation has become the go-to approach for solving immediate pain points, mainly in the form of tactically deploying one-off robotic process automation (RPA) initiatives to make our jobs a little easier and/or more efficient.

While achieving short-term gains, this piecemeal approach to process reinvention creates complexity due to disconnected strategies, siloed pilot projects and an incohesive technology strategy, among other factors. More importantly, it complicates businesses’ ability to adapt and inject fluidity into operations — characteristics crucial for delivering the future of work right now.

Old ways of thinking about automation just won’t cut it anymore, and the decentralized business world emerging from the pandemic has increased the pressure to deliver.

However, we’re finding that businesses are overwhelmingly ill-prepared for this journey. According to our research, 60% of companies have implemented or piloted automation technology, but only a tiny minority (8%) have said they’ve achieved automation at scale.

To unlock new value, opportunities and growth, organizations need to focus on the “why” of automation to achieve business results. They need to design processes around people — customers, employees, partners, suppliers — fused together from the front-office to the back-office, across all functions. Here’s how.

Anchor end-to-end process redesign to business outcomes and ensure scalability.

Organizations typically approach automation by looking for opportunities to increase speed or take complex manual tasks off their hands. It seems logical — but if they’re automating processes that just don’t work, they’re merely automating inefficiency. As customer journeys become more complex and competitors accelerate innovation, it becomes even more important to exert strategic oversight into automation initiatives.

End-to-end process change doesn’t work when organizations focus arbitrarily on finding opportunities for automation. They should first determine their overall business goals, identify inefficiencies in existing processes and then create automated systems that can scale. To succeed, they need to weave together people, processes, experiences, data insights, intelligence and technology via an automation fabric that masks complexity from users, simplifies orchestration, brings together disparate emerging technologies such as machine learning, natural language processing and intelligent document processing, and drives adoption and collaboration.

We recently worked with a healthcare provider to reduce its claims denial rate and improve net collections. We used process mining tools to identify bottlenecks and process issues, then ran possible intervention simulations to build a business case for business change.

This allowed us to create a strategic blueprint for implementing process changes, automation, monitoring and people enablement. Using RPA, optical character recognition (OCR) and artificial intelligence/machine learning (AI/ML) technologies, we were able to reduce the claims denial rate from 17% to 12% and improve net collections from 23% to 30%.

Because automation was deployed strategically instead of tactically, the processes behind the technology are efficient and will remain stable through growth periods.

Take a people-first approach.

As businesses adjust to a digital culture, they need to prioritize the human beings working alongside software and bots (i.e., digital workers). A one-size-fits-all approach to education and upskilling doesn’t work with a multigenerational and distributed workforce. Creating a people-first automation plan requires accommodations for skill level, comfort with technology and the state of innovation.

We worked with a claims processing organization to help it navigate this type of culture change. By analyzing the day-to-day challenges and dependencies of users, we created a customized training program that showcases how technology can reduce effort and improve decision-making. We prioritized initiatives based on ease of implementation and scaled them as technology understanding improved.

By prioritizing the needs of the workforce as new technology is deployed, the business will not only enhance time-to-adoption but also create a better customer experience through skilled employees, more efficient claims handling, greater cost savings from reduced penalties and more resilient operations.

Use modern technology to create modern experiences.

Digital is enabling companies to break traditional industry boundaries, introducing supportive and complementary offerings that create seamless purchasing environments for customers. But in doing so, they’re no longer just delivering products — they’re delivering experiences.

This means that back-office metric optimization can no longer be disassociated from front-office customer interaction and overall process change. The customer experience must be at the core of how processes are managed.

One leading medical device company struggled to educate customers on the features of its new devices. Because users’ health was involved, the company needed access to accurate information as quickly as possible. After reviewing patient, caregiver, payer and supplier personas and journeys, we helped create a blueprint for simplifying the interaction across ecosystem touchpoints.

We introduced chatbots, remote monitoring and AI-based patient safety services. By centering decisions around customer needs and expectations, the company was able to create a seamless user experience that reduces friction.

Guide widespread digitization with high-level strategy.

Automation is becoming more pervasive in enterprises. Low-code automation tools are rapidly entering the market, making it easier than ever to create digitally connected ways of working.

The key is to empower those closest to the process challenges with design and execution guide rails to holistically integrate and optimize disparate technologies as they learn, build and scale experiences and process transformation rapidly.

While the growing accessibility of automation offers a panoply of process optimization opportunities, the ease of use of low-code automation should not override the need for high-level strategic planning. To truly power customer-driven business decisions, organizations need data — and lots of it. If departments within your organization are approaching automation independently, data can quickly become trapped in siloes — making it impossible to efficiently gather the insights required to eliminate friction points.

Never lose sight of the “why” in automation

As process digitization evolves, it will become even more important to understand the “why” — not just the “what” — behind automation initiatives. Efficient process digitization requires a balancing act between effective technology adoption and enterprise-wide oversight.

By taking a fused, end-to-end automation approach, businesses can cut across siloes and enable data to flow freely between departments, creating an opportunity to thrive through better decision-making, reduced costs and greater business innovation.

To learn more visit the Intelligent Process Automation section of our website or contact us.

Girish Pai is a seasoned digital and transformation leader with over two decades of experience and a strong track record of delivering strategic business outcomes for clients globally across industries. Girish heads the Intelligent Process Automation Practice for Cognizant Digital Business Operations, leading the charge to create next-gen digital solutions by leveraging technology to simplify, reimagine and transform processes. Girish holds a bachelor’s degree in engineering from Manipal Institute of Technology, India. He can be reached at Girish.Pai@cognizant.com or on LinkedIn at www.linkedin.com/in/girishpai/

Source: Four Ways To Shift Automation From Tactical To Transformative

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SoftBank Makes First Saudi Deal Together With Wealth Fund’s Unit

SoftBank Group Corp. has made its first investment in a company based in Saudi Arabia, partnering with a unit of the kingdom’s sovereign wealth fund to lead a $125 million financing for customer communication platform Unifonic.

Proceeds will be used to fund growth in the Middle East and expansion into Asia and Africa, Unifonic co-founder and Chief Executive Officer Ahmed Hamdan said in an interview. The company will also look at acquisitions in those regions to help it expand faster, he said.

The Unifonic deal is funded through SoftBank’s Vision Fund 2, and follows on from July’s $415 million fundraising by Dubai-based cloud kitchen startup Kitopi, which was SoftBank’s first in a business based in the United Arab Emirates and took that company’s valuation past $1 billion. Last month, it also co-led a financing round for Turkish e-commerce company Trendyol.

SoftBank’s foray in the Middle East comes with a growing number of so-called unicorn businesses worth at least $1 billion. More investors from outside are looking to bet on a shift to online services that has lagged other regions.

Read more on SoftBank’s deals in Middle East and Africa:

Swvl, a Dubai-based provider of mass transit solutions, said in July it expects to list on Nasdaq in a combination with special-purpose acquisition company Queen’s Gambit Growth Capital, with an implied equity value of about $1.5 billion.

Unifonic provides cloud-based software to send automated messages. As the pandemic spread, businesses turned to these services to send one-time passwords or shipping updates to customers. The company processed 10 billion transactions last year, charging a small fee for every message it sends to customers.

Hamdan declined to comment on the latest valuation, but said the company is forecasting sales for the year of more than $100 million and will start planning a listing on a global exchange in the next three years.

“Being able to attract one of the top international funds to invest in Saudi Arabia is a big milestone that will encourage more foreign direct investment to come into the digital and technology space,” Hamdan said. “We will optimize to list on a global market that can provide the best valuation.”

STV, Sanabil

Founded by Ahmed and his brother Hassan Hamdan in 2006, Unifonic was largely self-funded for the first decade. It raised $21 million in 2018 led by STV, a $500 million venture fund established by Saudi Telecom Co.

Sanabil, a unit of Saudi Arabia’s Public Investment Fund, was also an investor in the company. The PIF, as the wealth fund is known, put $45 billion into the first Vision Fund, which backed many of the largest technology startups including Uber Technologies Inc., Opendoor Technologies Inc. and DoorDash Inc.

“Over the next five years, we see the business growing by 10 times,” Hamdan said. “So we could process 100 billion transactions, impact 400 million people, and potentially be working with 50,000 companies.”

The valuation of Twilio Inc., which operates a similar business and is listed on the New York Stock Exchange, has more than tripled to almost $60 billion since the pandemic forced more transactions to move online.

By:

Source: http://bloomberg.com

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What’s Happening With Peloton Stock?

 stock has had a relatively tough year, declining by about 20% since early January and remains down by almost 33% from its all-time highs, as investors expect that higher vaccination rates and a continued re-opening of the gyms and in-person fitness classes would hurt demand for the company’s fitness equipment and subscriptions. However, there have been a couple of positive developments for the company over the last several weeks.

In July, UnitedHealthcare indicated that it was working with Peloton to provide members with access to fitness classes for a year. The deal, which marks Peloton’s first collaboration with a health plan, could prove an attractive avenue for subscriber acquisition for Peloton, considering that UnitedHealth has roughly four million commercial members. For perspective, Peloton had a total of about three million subscribers for its connected fitness and digital offerings as of the last quarter. UnitedHealth should also stand to benefit, as having healthier and more active customers could help to lower its healthcare costs. Peloton could expand with similar partnerships with other healthcare and insurance companies.

Moreover, it doesn’t look like we are done with the Covid-19 pandemic just yet. Daily new infections in the U.S. have been on the uptrend over the last few weeks, driven by the spread of the highly infectious Delta variant of the virus. The seven-day average case rate has risen from 22,000 in early July to over 100,000 cases presently. This could delay the re-opening of workplaces and keep people at home for a few more quarters, bolstering demand for Peloton’s products. The company might also be in a better position to cater to demand now, considering that it has taken steps to address supply chain bottlenecks.

That being said, the near-term trajectory for the stock will depend significantly on the company’s guidance for FY’22 (fiscal years end June), which is likely to be provided during its Q4 FY’21 earnings due later this month. We value Peloton stock at about $130 per share, slightly ahead of the current market price. See our analysis on  for more details.

[6/23/2021] Peloton’s Corporate Wellness Program

 stock has rallied by almost 11% over the last five trading days and remains up by around 16% over the last month. A part of the gains was driven by analyst upgrades and anticipation surrounding the re-launch of its treadmills following a recall last month. However, the bulk of the gains came on Tuesday after Peloton announced a new corporate wellness program that offers employees subsidized access to Peloton’s digital fitness membership and its fitness equipment, along with tailor-made features such as team tagging and group exercises.

Peloton will also assist its corporate partners with setting up workout spaces in offices. The offering could be a big win for Peloton as investors have been concerned about the company’s growth prospects following its Covid-fueled surge over the past year. By partnering with large corporations, Peloton could get more high-value customers to sign up for its services while possibly seeing lower customer acquisition costs. Corporates also stand to benefit as they look to bring talent back into the workplace after over a year of remote working. Health and fitness-related benefits, particularly from a buzzy brand like Peloton, are likely to be sought after by employees following the pandemic.

We remain bullish on Peloton’s stock, with a price estimate of about $130 per share, about 10% ahead of the current market price of about $117. See our interactive analysis for a detailed look at Peloton’s valuation and financials. See our updates below on our outlook for Peloton stock.

[6/17/2021] What Will Peloton Look Like In 2025?

At-home fitness major  has been one of the big winners through the Covid-19 pandemic, with its stock up by over 5x since the first set of Covid-19 lockdowns back in March 2020. The stock now trades at about $105 per share, or almost 6x projected FY’22 revenues (fiscal years end June) and 200x FY’22 EPS. Is this expensive? Probably not, considering that sales could potentially grow almost 2.4x over the next four years (FY’24), with the company also expected to improve its profitability considerably from FY’22 onward.

We believe Peloton’s revenues could potentially rise close to 2.4x from the levels of $4 billion in FY’21 to $9.5 billion by FY’25, representing a compounded annual growth rate of almost 24%. For context, that’s still well below the solid 145% CAGR the company is on track to post between FY’18 and FY’21. Although the end of Covid-19 – a big tailwind for Peloton – appears to be in sight, there are multiple secular trends that should help to grow sales post the pandemic. The economics of owning a Peloton compare favorably with gym memberships and spin classes, and the added convenience of working out from home should give customers a reason to buy Peloton.

Moreover, Peloton should benefit from the easing of current supply chain bottlenecks, with the company planning to build out its own U.S. factory, which is likely to commence operations from 2023. Peloton’s international expansion – which is just getting started – is also likely to drive sales growth. Sure, revenue growth could be still higher if we consider Peloton’s possible push into commercial-fitness applications post its acquisition of Precor, but 2.4x growth in the top line over the next four fiscal years looks very much achievable as a base case.

Combine revenue growth with the fact that Peloton’s net income margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) are on an improving trajectory. Net margins rose sharply from -13% over the first nine months of FY’20 to almost 4% over the same period in FY’21. Margins probably have a lot more room to expand as revenues increase, given Peloton’s solid unit economics.

Peloton has a vertically integrated model which includes hardware, software, and subscription services, somewhat similar to tech titan Apple. Gross margins stood at about 39% for the first nine months of FY’21, just a hair below Apple’s 40% odd margins. It’s probably not far-fetched to assume that net margins could approach 20% by FY’25. Considering our revenue projections of roughly $9.5 billion and 20% margins, almost $1.9 billion in net income is possible by FY’25.

Now, if Peloton’s revenues grow 2.4x, the P/S multiple will shrink by almost 60% from its current levels, assuming the stock price stays the same, correct? But that’s exactly what Peloton’s investors are betting will not happen! If revenues expand 2.4x over the next few years, instead of the P/S shrinking from around 6x presently to about 2.5x, a scenario where the P/S metric falls more modestly, perhaps to about 5x looks more likely, considering the fact that profitability is also projected to see sharp improvement.

This would make a 50% plus growth in Peloton’s stock price a real possibility in the next four years. This would likely take Peloton’s market cap from about $31 billion currently to almost $48 billion by FY’25. Although the stock is likely to remain somewhat volatile through the post-Covid reopening, as investors cycle into value and commodity stocks to ride the economic upturn, we think Peloton should deliver solid returns for investors in the medium term.

See our analysis on  for an overview of Peloton stock’s recent performance and where it could be headed over the next month.

[6/3/2021] What’s Happening With Peloton’s Stock?  (NASDAQ: PTON) is up by almost 9% over the last week (five trading days) outperforming the S&P 500 which has remained roughly flat over the same period. The recent gains are driven by favorable views from brokerages, and also as investors likely see increasing value in the stock following its almost -30% decline this year. So how is Peloton stock expected to trend in the near term?

Is the stock poised to decline further or is a recovery looking likely? Based on our machine learning engine, which analyzes Peloton’s stock price movements post its 2019 IPO, the stock has a 64% chance of a rise over the next month, after rising by about 9% over the last five trading days. See our analysis on for more details.

We also think the longer-term outlook for Peloton’s business is solid. We expect demand to remain strong even post Covid-19, as the economics of owning a Peloton compare favorably with gym memberships and spin classes. Moreover, Peloton’s business should continue to benefit from supply chain improvements with the company planning to build out its own U.S. factory, which should commence operations from 2023.

Peloton also recently closed its acquisition of Precor, a company that caters to commercial-fitness applications such as gyms and hotels and this could help to expand the Peloton brand and product range. Peloton’s international expansion is also just getting started, and this could also help the stock. While Peloton trades at a relatively lofty 6x projected FY’22 revenues (fiscal years end in June), this is justified by its high growth rates and thick margins. Consensus estimates point to a healthy 30% plus growth in revenues over FY’22 and gross margins have typically come in at about 40%.

[5/6/2021] Peloton’s Tread+ Recall An Buying Opportunity? (NASDAQ: PTON) fell by almost 15% in Wednesday’s trading, after the company said that it would be carrying out voluntary recalls of its treadmill machines – the Tread+ and Tread over safety issues, offering users a full refund. The Tread+ treadmills were reportedly responsible for dozens of accidents and the death of at least one child. Peloton stock is now down by close to 50% from all-time highs seen in January, as it has also been hurt by a broader rotation out of growth and “at home” stocks, with the Covid-19 pandemic receding in the U.S. So is Peloton stock worth a look at current levels of about $82 per share? We think it is.

Now, the current recall marks a PR setback for Peloton, which initially brushed off concerns that the U.S. Consumer Product Safety Commission (CPSC) raised about its treadmills in April. The financial impact of the recall could also be somewhat meaningful. The recall is likely to involve over 125,000 Tread+ machines which cost about $4,300 each, and a small number of Tread machines that have seen a very limited roll out in the U.S.

If we assume that 70% of customers opt to return the Tread+ (customers also have the option of keeping their treadmills and having Peloton relocate them to rooms not accessible by children), that would translate into refunds to the tune of over $375 million, excluding logistics and other costs. For perspective, Peloton’s revenues stood at about $1.1 billion last quarter. The company has also stopped the sale and distribution of Tread+ as it works on hardware modifications and this could also impact revenues this fiscal year.

That said, a majority of Peloton’s hardware sales come from its exercise bikes and we think the demand is likely to remain strong even as Peloton fixes its treadmills. Treadmill-related accidents are also not unique to the company. Per the CPSC, there were 17 deaths related to treadmills in the U.S. (across manufacturers) between 2018 and 2019. As Tread+ sales eventually resume, the company should see volumes pick up. Moreover, Peloton’s business should continue to benefit from supply chain improvements, the launch of new and lower-priced products, and its international expansion, which is just getting started.

So is Peloton stock expected to decline further in the near term or is a recovery looking likely? Based on our machine learning engine, which analyzes Peloton’s stock price movements post its 2019 IPO, there is a strong chance of a rise over the next month, after declining by about 17% over the last five trading days. See our analysis on  for more details.

[4/20/2021] How Peloton’s Treadmill Safety Issues Impact Its Stock (NASDAQ: PTON) fell by over 7% on Monday and remains down by around 9% over the last week (five trading days) compared to the S&P 500 which is up by about 1% over the same period. The sell-off comes as the U.S. Consumer Product Safety Commission (CPSC) said that the company’s Tread+ treadmills were responsible for dozens of injuries and at least one death.

The Commission also asked people with young children or pets to stop using the Peloton treadmills, while urging the company to carry out a recall of the product. So how will this impact Peloton? Now, treadmill-related accidents are not unique to the company. Per the CPSC, there were 17 deaths related to treadmills between 2018 and 2019. However, we think Peloton may need to respond with some safety-related software updates or possibly hardware enhancements in the future. The recent events could create some image-related issues for Peloton, which has been one of the pandemic’s biggest winners.

So how is Peloton stock expected to trend? Is the stock poised to decline further or is a recovery looking likely? Based on our machine learning engine, which analyzes Peloton’s stock price movements post its 2019 IPO, the stock has a 64% chance of a rise over the next month, after declining by about 9% over the last five trading days. See our analysis on  for more details.

[2/16/2021] What’s Happening With Peloton Stock?

Connected fitness company  (NASDAQ: PTON) has risen by about 10% over the last week (five trading days). The recent gains come on the back of a rally in the broader markets, with the S&P 500 is up 3% over the same period, and also due to positive views in recently initiated sell-side coverage on the stock. That said, Peloton stock remains down by about -19% year-to-date, driven by the broader correction in growth stocks and pandemic winners such as “at home” stocks.

So is Peloton stock poised to rise further or is a correction looking imminent? Based on our machine learning engine, which analyzes Peloton’s stock price movements post its 2019 IPO, the stock has a 77% chance of a rise over the next month, after rising by about 10% over the last five trading days. See our analysis on  for more details.

So what’s the longer-term outlook for the company? We think Peloton looks like a good bet for long-term investors for a couple of reasons. The stock trades at close to 9x projected FY’21 revenues (fiscal years end in June). Although that looks somewhat high for a company that sells fitness equipment, Peloton justifies this for a couple of reasons. Firstly, Peloton is growing fast, with revenues on track to more than double in FY’21 driven by Covid-19 related demand.

Growth should remain strong in the medium term as well, on account of supply chain improvements, the launch of new and lower-priced products, and international expansion. For perspective, Peloton’s revenues are projected to rise 35% in FY’22 per consensus estimates. Secondly, Peloton’s unit economics also look solid, meaning that it should become quite profitable as revenues continue to scale up. Gross margins stood at almost 40% as of the last quarter, with roughly 35% margins for products and 60% margins on connected fitness subscriptions. That’s even higher than consumer technology behemoth , which has gross margins of about 39%.

[2/16/2021] What’s Happening With Peloton Stock? stock has gained about 5x over the last year, making the at-home fitness company one of the biggest winners through Covid-19. Here’s a quick rundown of the recent developments for Peloton’s stock.

Firstly, Peloton published a strong set of Q2 FY’21 results (quarter ended December 31, 2020), beating market expectations. Revenue grew 128% year-over-year to $1.06 billion and the company also posted a small profit. Connected fitness subscribers grew to 1.67 million at the end of the quarter, marking an increase of 134% year-over-year, and the number is expected to grow to 2.28 million by the end of the fiscal year. Connected fitness subscribers pay about $40 per month to access and sync classes to their Peloton equipment.

One of Peloton’s biggest issues has been that it isn’t able to fulfill demand quickly enough. Although this might seem like a nice problem to have, Peloton risks alienating potential customers and hurting customer experience. This has been a factor holding the stock back since the holiday quarter, with Peloton underperforming the S&P 500 year-to-date. However, the company says that it now plans to invest over $100 million in air freight and expedited ocean freight over the next six months to help speed up its deliveries.

Separately, Peloton recently raised about $875 million in capital via a convertible debt offering at a 0% rate. The company will not pay any interest on the notes till they mature in 2026 and the conversion price stands at about $239, about 55% ahead of the stock’s current market price. This looks like an attractive deal for Peloton, enabling it to invest in its fast-growing business without immediately diluting existing shareholders. []

See our interactive analysis for a detailed look at Peloton’s valuation and financials.

[12/31/2020] Peloton Stock Updates

While Peloton’s (NASDAQ: PTON) stock saw a big sell-off after news of Pfizer’s Covid-19 vaccine in early November 2020, the stock is now up a solid 50% since then and is up by roughly 35% over December alone. So what are the trends driving Peloton’s surge? Firstly, the workout-from-home trend has continued to rise, and demand for Peloton’s products continues to significantly outstrip supply.

For example, the premium Bike+ exercise bike has seen delivery timelines slip to 10 weeks currently. Secondly, Peloton was recently added to the Nasdaq 100 stock index. This move results in higher demand for the stock from index funds tracking the Nasdaq. Thirdly, the company announced last week that it would be acquiring Precor – one of the world’s largest commercial fitness equipment suppliers. This is being viewed very positively for a couple of reasons.

Precor has deep relationships with gyms, fitness centers, and hotels and this could also help Peloton expand its reach to these sectors, as they recover post the pandemic. Peloton could also integrate its digital and connected fitness capabilities with Precor equipment. Peloton is also likely to leverage Precor’s expertise and expand beyond its core offerings of bikes and treadmills to other equipment such as ellipticals and climbers. Precor has a total of about 625k square feet of manufacturing space located in the United States. With these facilities complementing Peloton’s existing manufacturing infrastructure in Asia, it should eventually ease manufacturing constraints.

[12/7/2020] Is Peloton A Fad?

Connected fitness company Peloton’s (NASDAQ: PTON) stock is up almost 4x this year, trading at levels of about $115 or about 8x projected FY’21 Revenues. Peloton’s recent growth partly justifies these valuations – it has effectively at least doubled Revenues each year over the last three years and is on track to double Revenues again in FY’21 (fiscal years end in June).

However, as the early phase of growth dies down and Covid-19 related demand declines, could the company’s success be a flash in the pan? Or is Peloton building a sustainable competitive advantage? While it’s still too early to tell, we think that Peloton’s business model has a lot going for it.

High Switching Costs: Peloton’s business model focuses on building commitment via its pricey, but high-quality exercise bikes and treadmills. Once customers invest in its high-cost hardware, it’s likely that they will continue to pay for the monthly connected fitness subscription service (about $39 per month) to get the most out of their equipment. This is evident from the fact that churn rates stood at just 0.65% in Q1 FY’21 – well below most subscription-based digital services. [] The company is also looking to significantly broaden its reach, by launching slightly lower-priced equipment and indicating that it could eventually sell pre-owned bikes.

Favorable Experience For Users: The overall experience of spin classes and fitness lessons are highly dependent on the quality of instruction, and Peloton’s team of instructors have obtained celebrity-like fame. This is a big positive, as Peloton’s model scales well compared to physical fitness classes. The economics of owning a Peloton also compare favorably with gym memberships and spin classes. The average monthly cost of just a gym membership was about $58 in the U.S. in 2018, while Peloton’s connected program costs $39 a month and can also be shared among family members.

Brand Buzz, Social Features: Being one of the first movers in the connected fitness space, Peloton has built significant brand value. The company is also building social features that could help to engage users and build a sense of community around its platform. This network effect could also help to prevent customers from churning out of its platform. Peloton is also counting on its lower-priced digital fitness subscription ($13 per month) as an acquisition channel for its pricier equipment and connected fitness offering. The company said that Digital Subscriptions grew 382% to over 510,000 over Q1.

[9/11/2020] Peloton’s Valuation

Peloton (NASDAQ: PTON) is an at-home fitness company that sells connected exercise bikes and treadmills and related fitness subscriptions. The stock is up over 4x year-to-date, as the Covid-19 pandemic and related lockdowns caused people to stop going to gyms and fitness centers and work out from home, causing demand for the company’s products and services to soar.

Peloton now trades at about 8x projected FY’21 revenues, ahead of  which trades at about 6.5x. Does this make sense? We think it does. In this analysis, we take a look at the company’s financials, future prospects, and valuation. See our interactive analysis for more details. Parts of the analysis are summarized below.

An Overview of Peloton’s Business

Peloton Interactive sells connected fitness equipment including bikes (starting at about $1,900) and treadmills (starting at about $2500) with a monthly Connected Fitness Subscriptions ($39 per month), which streams and syncs instructor-led boutique classes to users bikes and the Peloton Digital Membership ($13 per month) which streams classes to mobile devices and smart TVs.

The company’s Product and Service bundle is positioned as an alternative to not just other exercise equipment, but to gyms and fitness center memberships. Although the company’s products are priced at a premium, the ecosystem – which combines hardware, software, and content – compares quite favorably in terms of price versus fitness classes and subscriptions. For perspective, the average monthly cost of just a gym membership was about $58 in the U.S. in 2018. [] While Peloton sells primarily to individuals, it also has some exposure to the commercial and hospitality markets.

Peloton’s Financials 

Peloton has been growing quickly. Revenues rose from about $440 million in FY’18 (fiscal year ends June) to about $1.83 billion in FY’20, – an annual rate of over 100%. Equipment sales rose from about $350 million in FY’18 to $1.46 billion in FY’20, with the company delivering 626k Bikes and Treads over 2020 alone. Subscription Revenues grew from about $80 million to $360 million, as the company’s base of connected fitness subscribers rose from 246k in FY’18 to about 1.09 million in FY’20.

Peloton’s total membership base rose to 3.1 million as of the end of FY’20, including users who only pay for its digital subscription (not connected to its equipment). Over FY’21, we expect Peloton’s Revenues to grow to almost $3.6 billion, driven by continued growth in equipment sales and a growing base of subscribers.

While Peloton remained loss-making as of last year, the economics of its business look favorable. Overall Gross Margins are thick at about 47% in FY’20 with hardware margins standing at 43%. In comparison, even Apple – an icon of hardware profitability – posted Gross Margins of less than that at 40% over its last fiscal. While Peloton’s Operating Costs have been trending higher, they have been growing slower than Revenue. With Revenue projected to double this year, Peloton appears to be on track to turn profitable.

Peloton’s Valuation

Peloton stock currently trades at levels of close to $130 per share, valued at about 8x projected FY’21 revenues. While the valuation multiple might appear rich, considering that Apple – the most established hardware/software/services play – trades at about 6.5x – we think it is largely justified. Peloton’s Growth has been solid – with Revenues doubling each year over the last two years and sales are likely to double in FY’21 as well.

Margins also have scope to improve meaningfully, considering the company’s high gross margins and low customer acquisition costs. Moreover, the company’s lucrative connected fitness subscription revenues are likely to be very sticky, as users who have invested in high-cost hardware are less likely to stop paying for its monthly service. Given the buzz surrounding the company’s brand, there may also be scope to double down on lifestyle and apparel products, taking on the likes of Lululemon and Nike.

That said, there are risks as well. Firstly, Peloton faces significant supply constraints at the moment. While a new manufacturing facility in Taiwan is likely to begin production at the end of the year, the company is still likely to miss out on some potential holiday demand. Secondly, as the Covid-19 pandemic eventually ends, investors could re-think the valuation of “at-home” stocks and this could at least temporarily impact Peloton’s valuation.

Separately, tech giants – with their deep pockets and software ecosystems – could play a bigger role in the connected fitness space, challenging Peloton. For instance, Apple recently launched its at-home workout app, Fitness Plus, which provides guided workouts and connects with Apple devices such as the Apple Watch.

E-commerce is eating into retail sales, but this might be an investment opportunity. See our theme onfor a diverse list of companies that stand to benefit from the big shift.

See all  and Download  here

Led by MIT engineers and Wall Street analysts, Trefis (through its dashboards platform dashboards.trefis.com) helps you understand how a company’s products, that you touch, read, or hear about everyday, impact its stock price. Surprisingly, the founders of Trefis discovered that along with most other people they just did not understand even the seemingly familiar companies around them: Apple, Google, Coca Cola, Walmart, GE, Ford, Gap, and others. This might include you though you may have invested money in these companies, or may have been working with one of them for years as an employee, or have consulted with them as an expert for a long time. You can play with assumptions, or try scenarios, as-well-as ask questions to other users and experts. The platform uses extensive data to show in a single snapshot what drives the value of a company’s business. Trefis is currently used by hundreds of thousands of investors, company employees, and business professionals.

Source: What’s Happening With Peloton Stock?

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More Contents:

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PepsiCo and Boston Beer to create alcoholic Mountain Dew drink

Fully vaccinated people are still getting infected with Covid. Experts explain why

Vaccines are being required for travel — here’s how unvaccinated people feel about that

The world is nowhere near the end of the Covid pandemic, says famed epidemiologist Larry Brilliant

Egyptian billionaire Naguib Sawiris says a quarter of a portfolio should be in gold

CNBC Pro Talks: Equity outlook and opportunities with BofA’s Sebastian Raedler

Etihad Airways expects ‘tidal wave of demand’ as first-half losses halve to $400 million

Dow rises more than 100 points to fresh record

JPMorgan picks global ‘growth bargains’ from energy to tech

China’s Covid lockdown could have economic costs to the world, says strategist

Market may be in the ‘biggest bubble of my career,’ all-star investor Rich Bernstein warns

The ‘buy now, pay later’ trend could be the next hidden source of consumer debt, analysts warn

Fund manager highlights 3 ‘left behind’ stocks he’s loving right now

Ireland stares down major changes to its tax system

Charts show that Covid is hitting parts of Asia harder now than when the pandemic began

Asian countries try a new strategy to get people on board with vaccines: Free prizes

Chinese court rejects Canadian drug convict’s appeal of death sentence Huawei case looms

Tesla sold 32,968 China-made vehicles in July, local sales plunged month over month

Tokenized Apple, Tesla And Coinbase? Why Binance Is Bowing Out.

Binance Chief Executive Officer Zhao Changpeng Interview

Tokenized stocks, or digital assets pegged to the price of company shares, are no longer available for purchase on Binance.com. Offerings had included Tesla, Apple, and Coinbase shares, which Binance claims were fully backed through shares held by its partner, German-based investment firm CM-Equity AG.

Support for stock tokens was first made available on Binance.com in April, 2021, which was enabled through a partnership with Digital Assets AG, a firm focused on issuing tokenized financial products.

“Today, we are announcing that we will be winding down support for stock tokens on Binance.com to shift our commercial focus to other product offerings,” the announcement reads.

Although the exact reason for the about-face is unclear, Binance’s reversal on tokenized stocks comes as financial regulators around the world are putting pressure on the firm. Officials in Germany, Thailand, Japan, Canada, and the United Kingdom have all issued warnings about the exchange over recent months, the firm has been dropped by the payments processor Clear Junction, and certain banking relationships in Europe and around the world are coming into question.

More broadly, it raises doubts about Binance’s hyper growth strategy of rapidly launching new products around the world such as debit cards and derivatives products.

Users currently holding stock tokens have 90 days to sell their shares. Clients in the European Economic Area and Switzerland have the option to transfer their holdings to a new digital asset platform from CM-Equity AG. After October 14, 2021 they will not be able to manually sell or close their positions on the Binance site.

Follow me on Twitter or LinkedIn. Check out my website.

Source: Tokenized Apple, Tesla And Coinbase? Why Binance Is Bowing Out.

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Critics:

Binance will list MicroStrategy, Microsoft and Apple, providing Binance users with exposure via the tokenization of equities. The tokens are expected to be denominated in the exchange’s stablecoin, BUSD.

The move means Binance users will be able to qualify for economic returns on the underlying shares, which will include potential dividends. The tokens also allow Binance customers to purchase as little as one-hundredth of a regular stock using BUSD.

Binance’s stock tokens are tokenized equities that can be traded on traditional stock exchanges. Each tokenized stock represents one ordinary share of the stock and is backed by a depository portfolio of underlying securities held by CM-Equity AG, Germany, according to the post.

Two stock tokens have begun trading on Binance including electric vehicle maker Tesla and cryptocurrency exchange Coinbase. Those listings are already ruffling the feathers of regulators who say the exchange has not acquired the necessary license to begin marketing equities to the public.

Cryptocurrency exchange Binance is allowing its users to buy fractions of companies’ shares with a new tokenized stock trading service, starting with Tesla.

  • The crypto exchange announced Monday the launch of Binance Stock Tokens, zero-commission digital tokens that qualify holders for returns including dividends.
  • As of 1:35 p.m. UTC (9:35 a.m. ET) April 12, users will be able to buy fractions of actual Tesla shares, which trade at $677 a share at the time of writing.
  • Users will be able to purchase as little as one-hundredth of a Tesla share, with prices settled in Binance USD (BUSD).
  • The exchange’s native crypto Binance Coin (BNB) has surged more than 25% in the last 24 hours, reaching an all-time high of $637.44. It is priced at $590.51 at press time. It’s not immediately clear what is driving the price of the coin.
  • It’s not the first tokenized stock play in crypto land: Terra Labs’ Mirror Protocol went live in December.
  • But where Mirror uses synthetic stocks (or tokenized representations of actual equities), the Binance product is “backed by a depository portfolio of underlying securities” managed by an investment firm in Germany.

See also: Binance Faces CFTC Probe Over US Customers Trading Derivatives: Report

Related Stories

9 Ways Empathy Helps With Inner Growth

Empathy can be best defined as the trait or skill of understanding, sharing, recognizing, and even feeling the emotions, thoughts, and experiences of those around you or those who you see. It is often a crucial skill in developing healthy relationships, moral or ethical decision-making, prosocial behavior, and compassionate attitudes.

Simply put, empathy denotes an ability to walk in the shoes of another person. It can be a complex trait to develop, and some people may believe that empathy is harmful. After all, feeling the pain of others can become tiring. But in moderation, this skill is a fantastic way to improve yourself while helping others. Here are nine ways empathy helps with inner growth.

1.    Empathy Reduces Stress

You may have noticed people who are empathetic seem to experience less stress. Considering how research has shown that stress accuses all sorts of diseases, it raises the question – how does empathy help?

  • It teaches emotional regulation skills.
  • Relating to others in positive ways teaches
  • It engages in our ability to control and handle our emotions in a healthy manner.
  • It helps us recognize where and when we may be feeling stressed or emotional, thanks to observing and empathizing with our loved ones.

Empathy can be best defined as the trait or skill of understanding, sharing, recognizing, and even feeling the emotions, thoughts, and experiences of those around you or those who you see. It is often a crucial skill in developing healthy relationships, moral or ethical decision-making, prosocial behavior, and compassionate attitudes.

Simply put, empathy denotes an ability to walk in the shoes of another person. It can be a complex trait to develop, and some people may believe that empathy is harmful. After all, feeling the pain of others can become tiring. But in moderation, this skill is a fantastic way to improve yourself while helping others. Here are nine ways empathy helps with inner growth.

As you can imagine, this helps you become an emotionally more stable person in the long run – indeed a fundamental thing to any future growth and maturation you wish to experience!

2.    It Improves Your Ability To Communicate

Communication isn’t as simple as an exchange of words. After all, think about the many times you find yourself constantly misunderstood, no matter how hard you try. As it turns out, empathy can teach you how to express yourself better! This outcome is because:

  • You learn how to see, feel, and think from the other person’s perspective.
  • You’ll better understand how your words and thoughts may be interpreted by others.
  • You can tailor your expression of your thoughts and emotions to the individual you’re communicating with, so they can understand you better.
  • You can limit misunderstandings and miscommunications by seeing how the other person would process information from their point of view.

Indeed, you may notice that all of these positive benefits first require you to listen better and understand the other person before you can explain yourself in a way that truly resonates with them. This is why empathy is so important!

3.    It’s Good For General Survival

Historically speaking, being social creatures is the critical reason for our species’ continued survival – and despite how much has changed socially, this hasn’t changed on a fundamental level! Empathy allows us to:

  • Pick up on nonverbal cues that indicate something is amiss
  • Tune in immediately to a situation the second someone starts acting strangely
  • React appropriately to a life-threatening situation you haven’t seen yet, just from the behavior of others in the area
  • Pay attention to abnormal atmospheres or facial features that suggest something is wrong

These examples may sound dramatic, but they can be applicable in all sorts of places – from recognizing when a bar fight is about to erupt to paying attention to a loved one who seems to be quieter than usual.

No matter which way you slice it, empathy may be the critical thing that saves you or your loved one’s life.

4.    It’s Good For Your Health

How are empathy and your physical health related to each other? They’re more intimately intertwined than you might think. Various studies have shown a positive correlation between the ability to handle stress – a source of many health issues – and high levels of empathy.

This is because of empathy:

  • It encourages us to form close bonds that form the basis of our support network.
  • Teaches us how to form healthy coping mechanisms when trying to manage stress.
  • It assists us in paying attention to our bodies as an extension of learning how to observe those around us.
  • Reduces depression and anxiety levels as we communicate and empathize with our loved ones.
  • It helps us create healthy boundaries so we can avoid picking up second-hand stress and negative emotions.
  • Encourages positive thinking and mindsets via reconnecting to the world around us.

This ultimately leads to a better psychological and physiological state, resulting in a much better health and immune system. Not to mention, it’s easier to take care of yourself when you’re mentally and emotionally more stable and healthy!

5.    It Can Guide Your Moral Compass

Normally, we learn empathy and emotional regulation in childhood – something that research has shown is important for our development. But that doesn’t mean our journey stops there!

As we grow older and meet new people, we must continue to learn and adapt to the changing world around us – and in this aspect, empathy is an essential tool. For example, it:

  • It helps us re-evaluate our core values and morals
  • Shapes and guides how we care for others and how we expect to be cared for
  • It shows us how to take care of those around us
  • Encourages us to strive for a better understanding of those we love

In other words, empathy can actually help us reshape our foundational understanding of the world and our relationship with it. This is important, as it can lead to us growing both mentally, emotionally, and spiritually as we strive to meet the needs of our loved ones!

6.    It Connects You To Others

Ever found yourself just sitting there, unsure as to how to respond to someone else? Empathy is actually a vital and helpful tool in this regard!

How so? Research has shown that empathy is responsible for helping us better understand and respond to a loved one’s actions – both in the present and for potential future actions. Here are a few ways how it mentally preps you and encourages you to form positive relationships:

  • It helps us feel and better understand what the other person is experiencing.
  • Teaches us how to reciprocate and make the other person feel seen and heard.
  • It assists us in forming and nurturing intimate bonds where both sides can feel safe and vulnerable.
  • It encourages us to listen to those around us truly and really take the time to be there for them.

The final result? We end up learning not just about experiences we couldn’t otherwise have possibly gotten on our own, but also will likely end up with a close and personal relationship with the other person!

Over time, you will likely find that this sort of behavior cultivates deep, intimate connections that can bring you a sense of peace and stability – an incredibly vital foundation for any further inner growth you wish to achieve.

7.    It Helps Prosocial Behavior

We are only human, so it’s natural to want close, intimate, and meaningful bonds. In fact, it is hardwired into our very DNA – we wouldn’t have gotten this far without that desire to bond with those around us, after all. As you can imagine, this means that the ability to empathize is crucial. This is because it:

  • It teaches us how to become more compassionate and caring
  • It’s crucial to our ability to communicate and connect with others
  • It encourages us to care for and help each other
  • Assists us in being kind and understanding to others around us
  • It tries to make us see things from a different point of view

From there, we then learn how to adjust our behavior and actions to ensure we are doing our best to love and care for those around us. This can then ultimately lead us to create the relationships so fundamental to our emotional and mental wellbeing!

8.    It Fights Burnout

There is some irony in how, in an increasingly connected world, we feel even more lonely. And with that loneliness comes all sorts of mental health struggles and burnout as we struggle with work on our own. But it doesn’t have to be this way.

A study has shown that those workers who are empathetic actually deal with less burnout – something you might find interesting! Here’s how empathy can help you achieve these outcomes:

  • It guides us in how we can communicate with those around us.
  • Assists in the development of soft skills that are crucial to handling conflicts with others.
  • It teaches us how to ensure both sides feel seen and heard.
  • It helps us connect and form meaningful relationships with others.
  • Encourages us to create social networks that can inversely support us in our times of need.
  • Promotes positive thinking as we pull from the experiences of others around us.

With the development of better communication and conflict-management skills, you may find yourself becoming a more emotionally mature and understanding person as you rise against the challenges life throws at you. And it’s all thanks to empathy!

9.    It Improves Your Work

With just how helpful it is when you’re trying to both listen and to be heard, it’s no wonder that empathy forms a core aspect of communication – a vital skill in any team-based work. But there’s more to this than just better communication. Empathy also helps:

  • Negotiating with others to create a solution that meets everyone’s needs and desires
  • Encourages teamwork when trouble-shooting issues
  • Creates an environment of respect and trust
  • It makes people feel valued and involved in any project
  • It makes for a smoother transition and workflow, as you are already paying attention and anticipating the quirks and workstyles of those around you

As you can imagine, these aspects are all super helpful when you’re working on any team-based project. And these skills are transferable too! You can just as easily apply these positive benefits to both your work and your personal life and watch your relationships become better for it! Final Thoughts On Some Ways Empathy Helps With Inner Growth

Empathy is a valuable trait, yet it may seem like it is rapidly declining in today’s world. This can seem discouraging, and some may even worry that being empathetic may open them up to feelings of pain and discomfort.

The lucky truth is that this is not the case. Empathy is crucial for your inner growth and can actually make you stronger, healthier, and more resilient. If you struggle with developing empathy for others, you can speak to a mental health professional for help.

By:

Source: 9 Ways Empathy Helps With Inner Growth | Power of Positivity

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Critics:

Empathy is the capacity to understand or feel what another person is experiencing from within their frame of reference, that is, the capacity to place oneself in another’s position. Definitions of empathy encompass a broad range of emotional states. Types of empathy include cognitive empathy, emotional (or affective) empathy, somatic, and spiritual empathy.

Empathy is generally divided into two major components:

Affective empathy

Affective empathy, also called emotional empathy: the capacity to respond with an appropriate emotion to another’s mental states. Our ability to empathize emotionally is based on emotional contagion: being affected by another’s emotional or arousal state.

Cognitive empathy

Cognitive empathy: the capacity to understand another’s perspective or mental state. The terms social cognition, perspective-taking, theory of mind, and mentalizing are often used synonymously, but due to a lack of studies comparing theory of mind with types of empathy, it is unclear whether these are equivalent.

Although measures of cognitive empathy include self-report questionnaires and behavioral measures, a 2019 meta analysis found only a negligible association between self report and behavioral measures, suggesting that people are generally not able to accurately assess their own cognitive empathy abilities.

Somatic empathy

How Investing in Strategic Partnerships Can Help Grow Your Business

How Investing in Strategic Partnerships Can Help Grow Your Business

The best entrepreneurs understand the power of people. Whether thinking about accessible healthcare or, more broadly, startup success, collaboration and partnerships have always been vital, even before the pandemic strengthened the need for a collective approach.

Of course, for entrepreneurs looking to scale their business, cash is a critical piece of the puzzle. For obvious reasons, access to capital enables a business to grow, whether that’s investing in research and development (R&D), expanding overseas, or hiring top talent.

But capital shouldn’t be treated as a silver bullet. Instead, founders should turn their attention toward creating strong, strategic partnerships to drive business growth. Working with other established organisations builds credibility, allowing businesses to make further connections and expand their operations.

Entrepreneurs, though, should learn exactly how to unlock beneficial relationships that will ultimately set them up for long-term victory. Partnerships must be win-win and goals aligned so that everyone comes out as beneficiaries.

Why connections matter.

When executed wisely, strategic partnerships can foster business growth. With the potential to form a critical part of any growing business, these partnerships benefit startups and corporates alike. For large corporations, startups and scaleups can fuel innovation; for early-stage founders, big companies can enable fresh revenue, scaling possibilities and credibility.

With established partners come established networks. Existing knowledge, suppliers and customers can make selling products on a larger scale much easier to achieve. This empowers startups to scale quickly, with that revenue used to reinvest in operations and innovation, fuelling further growth and making it easier to establish new business relationships with a wider pool of organisations.

What’s also important, particularly if operating in a crowded space such as healthcare, is the potential for impact. Healthcare solutions – rightly or wrongly – are often judged by the number of patients using them. So, establishing key strategic partnerships – as we’ve done with Microsoft, Allianz and Portuguese healthcare provider Médis – provides an avenue to millions of patients.

Infermedica experimented with different business models, but eventually settled on a B2B strategy over B2C as we had the potential to reach more patients through a partnership network. This accelerated on our goal to bring more accessible healthcare to all. Strategic partnerships enable startups to quickly build credibility and cut through loud crowded markets.

Investor partnerships can play a role as well. Relationships don’t need to simply need to be between providers, but investors can bring knowledge, connections and consultancy which can help startups to overcome growing challenges and open doors that may otherwise remain closed until certain milestones around size, revenue and customers have been reached. What’s key is ensuring both sides remain committed to moving forward together.

How to unlock the opportunity.

But what’s the best way to go about creating these relationships? For founders, the first step to achieving this is to remember that although partnerships are sealed between companies, they’re created by people and that human connection has to be built first. Talk to the potential partner to understand what they are truly trying to achieve and how a partnership could help them solve it.

Similarly, founders must understand their own goals and what they need from any relationship to ensure they keep progressing towards it. When discussions are open and the people are looked after, great relationships are forged.

Developing a partner program at an early stage: creating a network of trusted resellers and innovative partners also allows entrepreneurs to explore opportunities in their immediate area and beyond. Indeed, European founders shouldn’t simply look within their own country or continent for partnerships, by looking further afield they open themselves up to new ways of thinking and opportunities.

Partner programs and ecosystems establish a feedback community, each organization provides feedback which improves each other’s offerings, leading to greater growth and credibility for all. This also drives thoughts around integration, how compatible one offering is with another to ensure it truly adds value in a real-world environment. Collaboration with partners enables entrepreneurs to see how their product fits into the bigger picture which fuels wider innovation.

For example, Infermedica’s partner program enables organizations from all aspects of healthcare to collaborate with us and access our AI technology, enhancing and diversifying services which offer better end-user outcomes. Of course, there is still some way to go and things will never stop evolving. The top SaaS companies have on average around 350 integrations as they understand all of the potential engagement points and are establishing ecosystems that reflect them. The key takeaway: when creating partner ecosystems, always keep in mind how an end-user could potentially interact with your offering.

Take your time.

As in life, building a long-last relationship takes a lot of time and effort. So, while it can be tempting to rush into an exciting partnership or program, it’s vital to take your time to build trust and establish clear boundaries. Drawing on our own experience, it took more than a year to establish partnerships with Microsoft and Allianz, and it’s an ongoing process of building mutual trust and finding new ways to collaborate.

Remember that there should be no A and B side in partnerships. Each party brings their own benefits to the table. Combining knowledge and resources makes the relationship greater than the sum of its parts, delivering greater value to customers, industry and economy.

At all times, specificity is key to success. Be sure that the partnership is truly feeding into your overall strategy and that you have all the necessary resources to support you on your journey. Plan it well and take your time. It’s a long-term strategy that requires patience, commitment and perseverance. Rome was not built in a day, but the foundations of a long lasting relationship could start tomorrow.

Keep your goals in mind and ensure you’re going into every conversation with completely open eyes because when you find those strategic connections that just work, the opportunity for growth is truly great.

By: Tomasz Domino / Chief Operating Officer, Infermedica

Source: How Investing in Strategic Partnerships Can Help Grow Your Business

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Critics:

A strategic partnership (also see strategic alliance) is a relationship between two commercial enterprises, usually formalized by one or more business contracts. A strategic partnership will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship. Strategic partnerships can take on various forms from shake hand agreements, contractual cooperation’s all the way to equity alliances, either the formation of a joint venture or cross-holdings in each other.

Typically, two companies form a strategic partnership when each possesses one or more business assets or have expertise that will help the other by enhancing their businesses. This can also mean, that one firm is helping the other firm to expand their market to other marketplaces, by helping with some expertise.

According to Cohen and Levinthal a considerable in-house expertise which complements the technology activities of its partner is a necessary condition for a successful exploitation of knowledge and technological capabilities outside their boundaries. Strategic partnerships can develop in outsourcing relationships where the parties desire to achieve long-term “win-win” benefits and innovation based on mutually desired outcomes.

No matter if a business contract was signed, between the two parties, or not, a trust-based relationship between the partners is indispensable. One common strategic partnership involves one company providing engineering, manufacturing or product development services, partnering with a smaller, entrepreneurial firm or inventor to create a specialized new product. Typically, the larger firm supplies capital, and the necessary product development, marketing, manufacturing, and distribution capabilities, while the smaller firm supplies specialized technical or creative expertise.

References

Asia Becomes Epicenter of Market Fears Over Slowdown in Growth

Asia is emerging as the epicenter for investor worries over global growth and the spread of coronavirus variants. While their peers in the U.S. and Europe remain near record highs, Asian stocks have fallen back in recent months amid slowing Chinese economic growth and a glacial rollout of vaccines. The trend accelerated Friday with the benchmark MSCI Asia Pacific Index briefly erasing year-to-date gains for the second time in as many months.

“Asia was seen as the poster child in pandemic response last year, but this year the slow vaccination rollout in most countries combined with the arrival of the delta variant means another lost year,” said Mark Matthews, head of Asia research with Bank Julius Baer & Co. in Singapore. “I suspect Asia will continue to lag as long as vaccination rollouts remain at their relatively sluggish levels and high daily new Covid counts prevent them from lifting mobility restrictions.”

The growing jitters in the region comes as investor concerns shift from runaway inflation to an early withdrawal of stimulus by central banks. China’s authorities signaled earlier this week they may soon unleash more support for the economy, suggesting the world’s fastest-pandemic recovery may be weaker than it appears.

A fresh regulatory crackdown on Chinese tech stocks this week has also impacted investor sentiment in the region. The Hang Seng China Enterprises Index fell briefly into a technical bear market Friday, led by weakness in the sector.

While Asia bore the brunt of the retreat in global equities, havens in other asset classes from Treasuries to the yen have rallied, and the rotation toward economically-sensitive cyclical stocks from their high-priced growth counterparts continued to unwind.

“It’s a sign of how challenging the reopening process is,” Marvin Loh, State Street senior global market strategist, said in an interview with Bloomberg TV. “What the PBOC is going through as well as these variants that keep popping up around the world shows it’s going to be an uneven process. Maybe a normalization tightening policy is not necessarily going to be as fluid.”

Covid Challenge

Covid 19 remains a key challenge. In Japan, Tokyo has declared a renewed state of emergency to combat the resurgent virus, banning spectators from the Olympics and pushing the Nikkei 225 Stock Average toward a correction. South Korea is intensifying social distancing measures in Seoul while Indonesia is battling a virus resurgence that has crippled its health system.

“Asian equities are being particularly impacted by the rebound in coronavirus cases in the region, fears about the impact of that on regional growth and concern that we may now have seen the best of the rebound globally,” said Shane Oliver, head of investment strategy with AMP Capital Investors in Sydney. “Asian shares may have led the way on this but coronavirus concerns may also weigh on global shares generally.”

For the APAC region, recent trade deals will likely invigorate and deepen economic integration over the coming few years. In late 2020, China, Japan, South Korea, Australia, New Zealand and 10 Association of Southeast Asian Nations (ASEAN) members signed the Regional Comprehensive Economic Partnership (RCEP) agreement after eight years of negotiation.

When fully implemented in 2022, RCEP will represent the world’s biggest trading bloc, covering about 30% of global GDP and trade. In addition, China concluded a Comprehensive Agreement on Investment (CAI) with the EU on the last day of 2020. The EU is China’s second-largest trading partner and the CAI will cover broad market access, including to key sectors such as alternative energy vehicles and medical services.

Although these trade deals will not have an immediate economic impact, in the medium term the treaties should cement Asia as the world’s most dynamic economic bloc embracing free trade, investment and globalization. They should also help to counter the disruptive geopolitical tensions and encourage the post-pandemic economic recovery in Asia.

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Critics:
The economy of Asia comprises more than 4.5 billion people (60% of the world population) living in 49 different nations. Asia is the fastest growing economic region, as well as the largest continental economy by both GDP Nominal and PPP in the world. Moreover, Asia is the site of some of the world’s longest modern economic booms, starting from the Japanese economic miracle (1950–1990), Miracle on the Han River (1961–1996) in South Korea, economic boom (1978–2013) in China, Tiger Cub Economies (1990–present) in Indonesia, Malaysia, Thailand, Philippines, and Vietnam, and economic boom in India (1991–present).
 
As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of different cultures, environments, historical ties and government systems. The largest economies in Asia in terms of PPP gross domestic product (GDP) are China, India, Japan, Indonesia, Turkey, South Korea, Saudi Arabia, Iran, Thailand and Taiwan and in terms of nominal gross domestic product (GDP) are China, Japan, India, South Korea, Indonesia, Saudi Arabia, Turkey, Taiwan, Thailand and Iran.
 
East Asian and ASEAN countries generally rely on manufacturing and trade (and then gradually upgrade to industry and commerce), and incrementally building on high-tech industry and financial industry for growth, countries in the Middle East depend more on engineering to overcome climate difficulties for economic growth and the production of commodities, principally Sweet crude oil.
 
Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$8.5 trillion of foreign exchange reserves – more than half of the world’s total, and adding tertiary and quaterny sectors to expand in the share of Asia‘s economy.

References

 

 

 

 

 

Why Your Workforce Needs Data Literacy

Organizations that rely on data analysis to make decisions have a significant competitive advantage in overcoming challenges and planning for the future. And yet data access and the skills required to understand the data are, in many organizations, restricted to business intelligence teams and IT specialists.

As enterprises tap into the full potential of their data, leaders must work toward empowering employees to use data in their jobs and to increase performance—individually and as part of a team. This puts data at the heart of decision making across departments and roles and doesn’t restrict innovation to just one function. This strategic choice can foster a data culture—transcending individuals and teams while fundamentally changing an organization’s operations, mindset and identity around data.

Organizations can also instill a data culture by promoting data literacy—because in order for employees to participate in a data culture, they first need to speak the language of data. More than technical proficiency with software, data literacy encompasses the critical thinking skills required to interpret data and communicate its significance to others.

Many employees either don’t feel comfortable using data or aren’t completely prepared to use it. To best close this skills gap and encourage everyone to contribute to a data culture, organizations need executives who use and champion data, training and community programs that accommodate many learning needs and styles, benchmarks for measuring progress and support systems that encourage continuous personal development and growth.

Here’s how organizations can improve their data literacy:

1. LEAD

Employees take direction from leaders who signal their commitment to data literacy, from sharing data insights at meetings to participating in training alongside staff. “It becomes very inspiring when you can show your organization the data and insights that you found and what you did with that information,” said Jennifer Day, vice president of customer strategy and programs at Tableau.

“It takes that leadership at the top to make a commitment to data-driven decision making in order to really instill that across the entire organization.” To develop critical thinking around data, executives might ask questions about how data supported decisions, or they may demonstrate how they used data in their strategic actions. And publicizing success stories and use cases through internal communications draws focus to how different departments use data.

Self-Service Learning

This approach is “for the people who just need to solve a problem—get in and get out,” said Ravi Mistry, one of about three dozen Tableau Zen Masters, professionals selected by Tableau who are masters of the Tableau end-to-end analytics platform and now teach others how to use it.

Reference guides for digital processes and tutorials for specific tasks enable people to bridge minor gaps in knowledge, minimizing frustration and the need to interrupt someone else’s work to ask for help. In addition, forums moderated by data specialists can become indispensable roundups of solutions. Keeping it all on a single learning platform, or perhaps your company’s intranet, makes it easy for employees to look up what they need.

3.Measure

Success Indicators

Performance metrics are critical indicators of how well a data literacy initiative is working. Identify which metrics need to improve as data use increases and assess progress at regular intervals to know where to tweak your training program. Having the right learning targets will improve data literacy in areas that boost business performance.

And quantifying the business value generated by data literacy programs can encourage buy-in from executives. Ultimately, collecting metrics, use cases and testimonials can help the organization show a strong correlation between higher data literacy and better business outcomes.

4.Support

Knowledge Curators

Enlisting data specialists like analysts to showcase the benefits of using data helps make data more accessible to novices. Mistry, the Tableau Zen Master, referred to analysts who function in this capacity as “knowledge curators” guiding their peers on how to successfully use data in their roles. “The objective is to make sure everyone has a base level of analysis that they can do,” he said.

This is a shift from traditional business intelligence models in which analysts and IT professionals collect and analyze data for the entire company. Internal data experts can also offer office hours to help employees complete specific projects, troubleshoot problems and brainstorm different ways to look at data.

What’s most effective depends on the company and its workforce: The right data literacy program will implement training, software tools and digital processes that motivate employees to continuously learn and refine their skills, while encouraging data-driven thinking as a core practice.

For more information on how you can improve data literacy throughout your organization, read these resources from Tableau:

The Data Culture Playbook: Start Becoming A Data-Driven Organization

Forrester Consulting Study: Bridging The Great Data Literacy Gap

Data Literacy For All: A Free Self-Guided Course Covering Foundational Concepts

By: Natasha Stokes

Source: Why Your Workforce Needs Data Literacy

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Critics:

As data collection and data sharing become routine and data analysis and big data become common ideas in the news, business, government and society, it becomes more and more important for students, citizens, and readers to have some data literacy. The concept is associated with data science, which is concerned with data analysis, usually through automated means, and the interpretation and application of the results.

Data literacy is distinguished from statistical literacy since it involves understanding what data mean, including the ability to read graphs and charts as well as draw conclusions from data. Statistical literacy, on the other hand, refers to the “ability to read and interpret summary statistics in everyday media” such as graphs, tables, statements, surveys, and studies.

As guides for finding and using information, librarians lead workshops on data literacy for students and researchers, and also work on developing their own data literacy skills. A set of core competencies and contents that can be used as an adaptable common framework of reference in library instructional programs across institutions and disciplines has been proposed.

Resources created by librarians include MIT‘s Data Management and Publishing tutorial, the EDINA Research Data Management Training (MANTRA), the University of Edinburgh’s Data Library and the University of Minnesota libraries’ Data Management Course for Structural Engineers.

See also

US Jobs Report June 2021: Payrolls Jump 850,000, Unemployment Rate at 5.9%

The pace of U.S. hiring accelerated in June, with payrolls increasing by the most in 10 months, suggesting firms are having greater success recruiting workers to keep pace with the economy’s reopening.

Nonfarm payrolls jumped by 850,000 last month, bolstered by strong job gains in leisure and hospitality, a Labor Department report showed Friday. The unemployment rate edged up to 5.9% because more people voluntarily left their jobs and the number of job seekers rose.

The median estimate in a Bloomberg survey of economists was for a 720,000 rise in June payrolls. “Things are picking up,” said Nick Bunker, an economist at the job-search company Indeed. “While labor supply may not be as responsive as some employers might like, they are adding jobs at an increasing rate.”

The gain in payrolls, while well above expectations, doesn’t markedly raise pressure on the Federal Reserve to pare monetary policy support for the economy. Even with the latest advance, U.S. payrolls are still 6.76 million below their pre-pandemic level.

Demand for labor remains robust as employers strive to keep pace with a firming economy, fueled by the lifting of restrictions on business and social activity, mass vaccinations and trillions of dollars in federal relief.

Read more: Black Men’s Labor Force Rises to Largest Ever Amid Recovery

At the same time, a limited supply of labor continues to beleaguer employers, with the number of Americans on payrolls still well below pre-pandemic levels.

Coronavirus concerns, child-care responsibilities and expanded unemployment benefits are all likely contributing to the record number of unfilled positions. Those factors should abate in the coming months though, supporting future hiring.

Wage growth is also picking up as businesses raise pay to attract candidates. The June jobs report showed a hefty 2.3% month-over-month increase in non-supervisory workers’ average hourly earnings in the leisure and hospitality industry. Overall average earnings rose 0.3% last month.

“The strength of our recovery is helping us flip the script,” Biden said in remarks Friday. “Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers.”

The Labor Department’s figures showed a 343,000 increase in leisure and hospitality payrolls, a sector that’s taking longer to recover because of the pandemic.

Job growth last month was also bolstered by a 188,000 gain in government payrolls. State and local government education employment rose about 230,000, boosted by seasonal adjustments to offset the typical declines seen at the end of the school year.

Hiring was relatively broad-based in June, including other notable gains in business services and retail trade. However, construction payrolls dropped for a third straight month and manufacturing employment rose less than forecast.

“Most of the new jobs now being created are in sectors that were slammed by the pandemic, while companies in other industries are struggling to find available workers,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note.

Read More

The overall participation rate held steady and remained well short of pre-pandemic levels. The employment population ratio, or the share of the population that’s currently working, was also unchanged.

Digging Deeper

  • Average weekly hours decreased to 34.7 hours from 34.8
  • The participation rate for women age 25 to 54 rose by 0.4 percentage point; the rate among men in that age group also climbed
  • The number of Americans classified as long-term unemployed, or those who have been unemployed for 27 weeks or more, increased by the most since November
  • The U-6 rate, also known as the underemployment rate, fell to a pandemic low of 9.8%. The broad measure includes those who are employed part-time for economic reasons and those who have stopped looking for a job because they are discouraged about their job prospects

Stocks opened higher and Treasury securities fluctuated after the report.

 

By and

Source: US Jobs Report June 2021: Payrolls Jump 850,000, Unemployment Rate at 5.9% – Bloomberg

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Critics:

The labor force is the actual number of people available for work and is the sum of the employed and the unemployed. The U.S. labor force reached a high of 164.6 million persons in February 2020, just at the start of the COVID-19 pandemic in the United States. The U.S. labor force has risen each year since 1960, with the exception of the period following the Great Recession, when it remained below 2008 levels from 2009-2011.

The labor force participation rate, LFPR (or economic activity rate, EAR), is the ratio between the labor force and the overall size of their cohort (national population of the same age range). Much as in other countries in the West, the labor force participation rate in the U.S. increased significantly during the later half of the 20th century, largely because of women entering the workplace in increasing numbers. Labor force participation has declined steadily since 2000, primarily because of the aging and retirement of the Baby Boom generation.

Analyzing labor force participation trends in the prime working age (25-54) cohort helps separate the impact of an aging population from other demographic factors (e.g., gender, race, and education) and government policies. The Congressional Budget Office explained in 2018 that higher educational attainment is correlated with higher labor force participation for workers aged 25–54. Prime-aged men tend to be out of the labor force because of disability, while a key reason for women is caring for family members.

The Congressional Budget Office explained in 2018 higher educational attainment is correlated with higher labor force participation. Prime-aged men tend to be out of the labor force due to disability, while a key reason for women is caring for family members. To the extent an aging population requires the assistance of prime-aged family members at home, this also presents a downward pressure on this cohort’s participation.

See also

Five Things You Need to Know to Start Your Day

Delta fears are growing, central banks face challenges and the shape of the U.K. and Europe post-Brexit continues to form. Here’s what’s moving markets.

Delta Fears

Concern about the more contagious Delta coronavirus variant is growing and those fears helped fuel a rise in Moderna shares to a record high after the drugmaker said its vaccine produces protective antibodies against the strain. The medicine was approved for restricted emergency use in India, where little more than 4% of the population is so far fully vaccinated. The variant is rippling through emerging markets, with more curbs in Indonesia and warnings of a potentially “catastrophic” wave in Kenya. A widening gap in vaccination rates in the U.S. also shows the risks faces to certain regions.

Policy Challenges

The major challenge for central banks is going to be how to wean the global economy off the unprecedented support they have deployed to deal with the disruption Covid-19 has caused. U.S. and European confidence data is soaring, underlining the rebound the economy is experiencing, while China’s central bank has also struck a more positive tone. Some more data points will arrive for policymakers to mull over on Wednesday, led by U.K. GDP and European inflation numbers.

Brexit Shifts

Paris is JPMorgan’s new trading center in the European Union post-Brexit as the U.S. banking giant inaugurated a new headquarters in the French capital. It is a victory for France in the ongoing race with other European countries to lure business from London after the referendum to leave the EU. It comes as the U.K. government unveiled a system of overseeing subsidies to companies, promising “more agile” decisions. And the U.K. is expecting to reach a truce in the so-called “sausage wars’’ with the EU over post-Brexit trading rules in Northern Ireland.

OPEC+ Delay

OPEC and its allies have delayed preliminary talks for a day to create more time to find a compromise on oil-output increases. It comes with crude oil prices on track for the best half of a year since 2009. Surging commodity prices are creating all sorts of headaches for policy makers, from rising inflation expectations that could move the hand of central bankers to a higher cost in shifting to more sustainable energy sources. This has initially led to a surge in profit for commodity trading houses but will end up hitting consumers down the road through higher prices.

Asian stocks mostly rose following a record close in the U.S. on signs that vaccines can protect against the delta variant of the coronavirus. European and U.S. stock futures are steady. The earnings calendar is relatively thin but watch for the reaction to two long-running takeover sagas moving toward a conclusion.

EssilorLuxottica, the eyewear giant, decided to go ahead with the acquisition of smaller peer GrandVision and the board of France’s Suez has backed its takeover by rival Veolia. And the Organization for Economic Cooperation and Development meets in Paris to finalize plans to overhaul the global minimum corporate tax.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours. 

And finally, here’s what Cormac Mullen is interested in this morning

With just one more day of trading in the first half of 2021 to go, global stocks are on track for their second-best performance since 1998. If the MSCI AC World Index’s gain of about 12% through June 29 holds, it would be beaten only by a 15% rise in 2019. The global stock benchmark closed at a record on June 28, and has risen almost 90% since its pandemic low in March 2020.

As we begin the second half, investor focus will soon switch to the upcoming earnings season. The second quarter could well mark peak earnings growth so comments on the outlook will be key for stock performance as will the impact of rising costs on margins. Outside of that, the same themes that dominated the first half will monopolize the second, and whether we get an equally strong next six months will likely depend on the path of other asset classes most notably bonds.

By: and

Source: Stock Markets Today: Delta Variant, Central Banks, Brexit Changes, OPEC+ – Bloomberg

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Critics:

A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth but do not necessarily result in significant changes in the real economy (e.g. the crisis resulting from the famous tulip mania bubble in the 17th century).

Many economists have offered theories about how financial crises develop and how they could be prevented. There is no consensus, however, and financial crises continue to occur from time to time. Negative GDP growth lasting two or more quarters is called a recession. An especially prolonged or severe recession may be called a depression, while a long period of slow but not necessarily negative growth is sometimes called economic stagnation.

Some economists argue that many recessions have been caused in large part by financial crises. One important example is the Great Depression, which was preceded in many countries by bank runs and stock market crashes. The subprime mortgage crisis and the bursting of other real estate bubbles around the world also led to recession in the U.S. and a number of other countries in late 2008 and 2009.

Some economists argue that financial crises are caused by recessions instead of the other way around, and that even where a financial crisis is the initial shock that sets off a recession, other factors may be more important in prolonging the recession. In particular, Milton Friedman and Anna Schwartz argued that the initial economic decline associated with the crash of 1929 and the bank panics of the 1930s would not have turned into a prolonged depression if it had not been reinforced by monetary policy mistakes on the part of the Federal Reserve,a position supported by Ben Bernanke.

See also

Specific:

 

 

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