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08-12-2013, 03:22 AM - 3 Likes   #61
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A typical corporate conversation will go something like this:

Coversation loop/

Marketing to R&D: Give us a REAL PRODUCT to sell!

R&D to Finance: Give us a BUDGET and we'll give you a PRODUCT

Finance to R&D: No, give us a PROFIT, and we'll give you a BUDGET.

R&D to Marketing: Ok, Marketing, ball's in your court, if Finance gives us a BUDGET, we'll have a PRODUCT!

Marketing to Finance: If we have a PRODUCT, we'll give you SALES, NOT PROFITS! Go ask Production to cut costs so we'll enjoy PROFIT

Production: It's NOT us who designed this product go ask R&D!

R&D: I thought that we wanted a top of the line product, go ask Marketing!

Marketing: It's what the customer wants!

Finance: Where's my PROFIT?

<Repeat loop indefinitely>

(Customer buys a CaNikon)

08-12-2013, 05:03 AM   #62
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QuoteOriginally posted by drypenn Quote
A typical corporate conversation will go something like this:

Coversation loop/

Marketing to R&D: Give us a REAL PRODUCT to sell!

R&D to Finance: Give us a BUDGET and we'll give you a PRODUCT

Finance to R&D: No, give us a PROFIT, and we'll give you a BUDGET.

R&D to Marketing: Ok, Marketing, ball's in your court, if Finance gives us a BUDGET, we'll have a PRODUCT!

Marketing to Finance: If we have a PRODUCT, we'll give you SALES, NOT PROFITS! Go ask Production to cut costs so we'll enjoy PROFIT

Production: It's NOT us who designed this product go ask R&D!

R&D: I thought that we wanted a top of the line product, go ask Marketing!

Marketing: It's what the customer wants!

Finance: Where's my PROFIT?

<Repeat loop indefinitely>

(Customer buys a CaNikon)
LOL! Very funny! But sadly, probably true as well.
08-12-2013, 07:27 AM   #63
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that is so true, but are forgetting a vital part.

Products doesn't sell (the product is the best there is, so problem lies with marketing/sales): MARKETING/SALES: You R&D guys are giving us crappy products, nobody can sell those
08-12-2013, 08:29 AM   #64
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QuoteOriginally posted by drypenn Quote
A typical corporate conversation will go something like this:

Coversation loop/

Marketing to R&D: Give us a REAL PRODUCT to sell!

R&D to Finance: Give us a BUDGET and we'll give you a PRODUCT

Finance to R&D: No, give us a PROFIT, and we'll give you a BUDGET.

R&D to Marketing: Ok, Marketing, ball's in your court, if Finance gives us a BUDGET, we'll have a PRODUCT!

Marketing to Finance: If we have a PRODUCT, we'll give you SALES, NOT PROFITS! Go ask Production to cut costs so we'll enjoy PROFIT

Production: It's NOT us who designed this product go ask R&D!

R&D: I thought that we wanted a top of the line product, go ask Marketing!

Marketing: It's what the customer wants!

Finance: Where's my PROFIT?

<Repeat loop indefinitely>

(Customer buys a CaNikon)
Capital + Resources + Labor = Product, in that order.

Capital is Long Term (Plant & Equipment, Patents / R&D, Goodwill/Brand and Equity) or Short Term (Operating Cash, Dealer Credit, Inventory, Receivables, etc.)

Cost of Capital
+ Cost of Resources
+ Cost of Labor
- SG&A Expenses
- Price of Product
= (Profit / Loss)

Capital Comes first - Finance allocates Capital and everything else must happen within the limit of the capital allocation
Resources come next, including use of Plant and Equipment (production processes)
Product design is bounded by capital allocation and production processes
We may be able to make the world's most profitable FF dSLR in theory, but we don't have the rpoduction facilities, employees and processes in place to produce it because the Cost of Capital is prohibitive right now (which is actually a common restraint in the current global economy).
Production and Sourcing components (Resources) come next (which and how many FF sensors will the few fabs sell to Pentax?)

Product comes last including
Inventory (end-state or Production Strategy)
Global Regional marketing plans
Distribution strategies
Dealer channels
Advertising / Marketing
Warranty and Returns strategy (which cycles back to R&D, Resources and Capital)
This is what MBA's get paid to figure out.

08-12-2013, 08:53 AM   #65
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QuoteOriginally posted by drypenn Quote
A typical corporate conversation will go something like this:
A typical US [or UK, Australian etc] corporate conversation may go like that.
I'm not sure how closely Japanese [or Korean or Chinese] corporates may follow that model.
08-12-2013, 08:54 AM   #66
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QuoteOriginally posted by monochrome Quote
Capital + Resources + Labor = Product, in that order.

Capital is Long Term (Plant & Equipment, Patents / R&D, Goodwill/Brand and Equity) or Short Term (Operating Cash, Dealer Credit, Inventory, Receivables, etc.)

Cost of Capital
+ Cost of Resources
+ Cost of Labor
- SG&A Expenses
- Price of Product
= (Profit / Loss)

Capital Comes first - Finance allocates Capital and everything else must happen within the limit of the capital allocation
Resources come next, including use of Plant and Equipment (production processes)
Product design is bounded by capital allocation and production processes
We may be able to make the world's most profitable FF dSLR in theory, but we don't have the rpoduction facilities, employees and processes in place to produce it because the Cost of Capital is prohibitive right now (which is actually a common restraint in the current global economy).
Production and Sourcing components (Resources) come next (which and how many FF sensors will the few fabs sell to Pentax?)

Product comes last including
Inventory (end-state or Production Strategy)
Global Regional marketing plans
Distribution strategies
Dealer channels
Advertising / Marketing
Warranty and Returns strategy (which cycles back to R&D, Resources and Capital)
This is what MBA's get paid to figure out.
Without going into the nitty-gritty of details, and with all due respect to you sir, the US GAAP (Generally Accepted Accounting Principles) define Net Income as:

Sales
Less: Cost of Sale (Direct Materials, Direct Labor + Fixed Overhead +Variable Overhead)
=Net Sales
Less: Selling, General and Admin Expenses
Income Before Interest and Taxes
Less: Interest
=Taxable Income
Less Taxes
=Net Income/Net Profit

What you refer to as "capital" are actually long-term assets/facilities which usually comes into the Cost of Sales as part of Fixed Depreciation allocated arbitrarily either using fixed capacity/economic life or any other basis that we, accountants can possibly think of. The problem is, if a certain capital expenditure, say for simplicity's sake amounts to $100, and we were expected to produce 100 units, but because of poor sales, we produced only 50; from $1/unit, the product cost becomes $2/unit, and since we cannot pass this cost to the consumer, we write it off, with direct impact to the Equity side. and we're not even talking yet if we borrowed a $100 (cost of capital). But if we can prove to an investment bank that we can produce the most desirable DSLR resulting to a profit, the cost of money goes down, as more investors will be willing to lend, because of perceived low risks. And no, goodwill, are usually written off nowadays (thanks to Enron fiasco) and doesn't find its way to a balance sheet.

You see, us, accountants (and having also earned an MBA degree) will always find a way to complicate simple things just so we can address financial risks, (even at the risks of not earning a single dime, but that's another story)

Regards
08-12-2013, 09:02 AM   #67
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Risk may have been drained from Pentax pre-Hoya

QuoteOriginally posted by monochrome Quote
[/INDENT]This is what MBA's get paid to figure out.
It was either Steve Jobs or Wozniak who said, "The MBA's almost sunk Apple."

I suspect a degree of institutional paralysis within Pentax, but it's hard to know where it's real paralysis because of a corporate culture averse to risk, and how much of it is the decision-stall & churn that happens in an M&A, which Pentax just lived through twice in 4 years.

Risk aversion is never a proud attribute for a company to have, but it's easy to paper over it with cost-benefit analysis that comes to the recurring conclusion, "wait until things are better, to be safe." You don't get fired getting behind that decision. Your company may die a slow, atrophied death, but you won't have to worry about going out on a limb.

(And regarding that 'MBA' quote - it should be said that without MBA's, Apple may not have ever really gotten off the ground in the first place )

Last edited by jsherman999; 08-12-2013 at 09:08 AM.
08-12-2013, 09:08 AM   #68
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QuoteOriginally posted by jsherman999 Quote

I suspect a degree of institutional paralysis within Pentax, but it's hard to know where it's real paralysis because of a corporate culture averse to risk, and how much of it is the decision-stall & churn that happens in an M&A, which Pentax just lived through twice in 4 years.

Risk aversion is never a proud attribute for a company to have, but it's easy to paper over it with cost-benefit analysis that comes to the recurring conclusion, "wait until things are better, to be safe."
.

This. +1,000,000

As I've mentioned. I'm a corporate finance guy. This is how we are trained to think. The humor in my "invented" corporate dialogue is while the company is engulfed in a series of back-and-forth analysis paralysis, there will always be the risk of the company missing the train, the bus, and even losing the darn bicycle!

08-12-2013, 09:24 AM   #69
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QuoteOriginally posted by jsherman999 Quote
It was either Steve Jobs or Wozniak who said, "The MBA's almost sunk Apple."

I suspect a degree of institutional paralysis within Pentax, but it's hard to know where it's real paralysis because of a corporate culture averse to risk, and how much of it is the decision-stall & churn that happens in an M&A, which Pentax just lived through twice in 4 years.

Risk aversion is never a proud attribute for a company to have, but it's easy to paper over it with cost-benefit analysis that comes to the recurring conclusion, "wait until things are better, to be safe." You don't get fired getting behind that decision. Your company may die a slow, atrophied death, but you won't have to worry about going out on a limb.
I suspect your theory hits close to the mark. 12 years of waiting for the "right moment" to release their game changing full frame. The problem is, it may have been designed to change the game 12 years ago, but because of indecision or inaction, they keep having to redesign it to change the current game.

In another thread, a while ago, someone (and I wish I could remember who) quoted Wayne Gretzky, who said, A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be. He also said, "You miss 100% of the shots you don't take.
08-12-2013, 09:29 AM   #70
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QuoteOriginally posted by drypenn Quote
Without going into the nitty-gritty of details, and with all due respect to you sir, the US GAAP (Generally Accepted Accounting Principles) define Net Income as:

Sales
Less: Cost of Sale (Direct Materials, Direct Labor + Fixed Overhead +Variable Overhead)
=Net Sales
Less: Selling, General and Admin Expenses
Income Before Interest and Taxes
Less: Interest
=Taxable Income
Less Taxes
=Net Income/Net Profit

What you refer to as "capital" are actually long-term assets/facilities which usually comes into the Cost of Sales as part of Fixed Depreciation allocated arbitrarily either using fixed capacity/economic life or any other basis that we, accountants can possibly think of. The problem is, if a certain capital expenditure, say for simplicity's sake amounts to $100, and we were expected to produce 100 units, but because of poor sales, we produced only 50; from $1/unit, the product cost becomes $2/unit, and since we cannot pass this cost to the consumer, we write it off, with direct impact to the Equity side. and we're not even talking yet if we borrowed a $100 (cost of capital). But if we can prove to an investment bank that we can produce the most desirable DSLR resulting to a profit, the cost of money goes down, as more investors will be willing to lend, because of perceived low risks. And no, goodwill, are usually written off nowadays (thanks to Enron fiasco) and doesn't find its way to a balance sheet.

You see, us, accountants (and having also earned an MBA degree) will always find a way to complicate simple things just so we can address financial risks, (even at the risks of not earning a single dime, but that's another story)

Regards
Yes, you are quite correct and I will stand corrected in your context. Accountanting professionals and Financial Analysts work with GAAP earnings. I'm looking up at my bookshelf at the spine of an old book entitled "The Analysis and Use of Financial Statements", White, Sondhi and Fried. You will notice I didn't discuss taxes, nor regulatory reporting (which varies by country and global region). Accounting earnings are necessary and real, but they aren't necessarily cash earnings.

However, I tried to use simpler concepts for a Forum such as this such as money. Who has the money, how much money do they have, what does money cost, what return does money offer, what return does the product choice offer (and what return does the next choice offer) - until the last possible choice isn't ever allocated because the return isn't competitive. I suppose I should just go back to skewness and kurtosis and let the professionals deal with the reporting.

A FF Pentax camera is prohibitively expensive somewhere in the process. Otherwise we would already have one.

Last edited by monochrome; 08-12-2013 at 09:36 AM.
08-12-2013, 09:35 AM   #71
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QuoteOriginally posted by monochrome Quote
A FF Pentax camera is prohibitively expensive somewhere in the process. Otherwise we would already have one.
Ah... yes... Those darn accountants/financial analysts should be burned eternally in a fiery hell of APS-C sensors.

Oh well, I speak for myself but I think that I'll still be a bad photographer with an FF just with an APS-C today! hahahaha!
08-12-2013, 10:29 AM   #72
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QuoteOriginally posted by drypenn Quote
Ah... yes... Those darn accountants/financial analysts should be burned eternally in a fiery hell of APS-C sensors.

Oh well, I speak for myself but I think that I'll still be a bad photographer with an FF just with an APS-C today! hahahaha!
Uhmmm - one of my recurring themes has been that the financial analyst community (not the FASB / GAAP community) has called DigiCams a major threat to their investment thesis for Ricoh since the summer of 2012. IOW, if Rioch chooses to invest the money in cameras analysts deem necessary to make Pentax a "third camera company" it would have a significant, material, negative effect on the "earnings" projections.

We can depreciate P&E all day long, but cash is cash.
08-12-2013, 01:01 PM   #73
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QuoteOriginally posted by drypenn Quote
A new product line is always a serious money-pit: raw mats inventory, work space re-tooling, resource planning and re-allocation, and of course, marketing, promotion and distribution. That will be a huge risk to take especially with a gloomy forecast in the industry. If I were in Ricoh's Board, I will definitely be against producing a new "me-too" product line, when I can't even make the existing product lines profitable enough to my stakeholder's liking. Pump-priming in a flourishing industry is so much easier as against a bearish industry. Worst case scenario, I spend a lot for a product line that will not sell, while incurring all of those production costs which I have to write off directly impacting my income statements. After a year of sparse sales, I write them down in my balance sheets, move it to a fire sale to liquidate the inventory, and end up worse than I was doing a year before. We need not look far and see that this is the case with Nikon 1 and Blackberry's Playbook.
The "economics" of the market are a pretty weak excuse. Sony thinks there's a market there. They've already put a full-frame X100-style camera (sans VF of course) on the market, which covers the "what do we do about lenses" problem. They're rushing to get a full frame mirrorless out on the market too, and I fully expect that once they get that figured out they will backport the sensor and processor into a DSLR body. You may not like the price, but Sony thinks the market is viable enough to put out specialty cameras as a prototype for their introducing mass-consumption cameras. Of course they do have a small legacy library from the Minolta days, but Pentax still has a few full frame lenses in their lineup too.

The Nikon 1 suffers from the same problem that the Pentax Q does in the American and European markets: it's designed to be a luxury accessory for Japanese women to carry around, not a serious photographic tool. For the same price you could get a M4/3 and some real lenses to go with your larger-than-P+S sized sensor. You may note that Nikon did not report poor sales in the Japanese market.

"Will this tool be good for making photographs" is a factor that is ignored far too often in favor of making sure you don't accidentally cannibalize sales of your legacy products, and it's a dangerous place to be. Canon has done it for a long time with their DSLRs to avoid cannibalizing their video camera line, and most recently with the EOS M to avoid cannibalizing their crop-DSLR bodies. I feel this coincided with a period of relative stagnation of their lower-end product line compared to companies like Sony, Fuji, and Sigma, who have been pumping out innovative products and aggressively reducing prices. I see a causal relationship between the two - when companies get set in their market segment, they tend to enter a holding pattern of incremental feature updates (better sensors, faster AF and more points, more stops of image stabilization, etc) and eschew real innovation that might be dangerous to their rent-seeking.

This is why I'm so down on Pentax's handling of the FF segment and so positive on their handling of the medium-format digital segment - the 645D is really shaking up that market segment because it's a great tool for making photos that is a fraction the cost of any of its competitors, whereas they haven't really tried at all on the FF segment. By the way that's an even riskier product than a FF would be, since the MF market is much, much smaller than even the FF market, which again falsifies the idea that it's economics keeping Pentax out of the FF segment.

Last edited by Paul MaudDib; 08-12-2013 at 01:16 PM.
08-12-2013, 07:59 PM   #74
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To the OP and originator of this thread...

I appreciate your desire for a FF camera, especially one with the Pentax name on it. You waited and waited until you could wait no more. Finally, you decided to buy a Nikon branded FF camera. God bless you and your good fortune to afford the system!

Yet, the happy occasion turned sour when you said, almost bitterly, that the Nikon FF camera you got was of poor mechanical construction. The ergonomics are lacking too. If the ownership experience is so unsatisfactory then how will you feel making shots with this device? You seem to have bought this camera out of spite and gloom?

I would rather be happy with my APS Pentax than upset with a Nikon FF.
08-15-2013, 09:44 AM   #75
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I jumped from k20/kx to d600 and I must say initially I had the same reactions as OP. The d600 does not feel anywhere as nice as k10/k20, and is not a 'joy to shoot' like I had felt since K100d

However the d600 is really a killer camera, and the results you can obtain from FF (or just the nikon system) is simply not possible with current pentax gear. The camera is growing fast on me, (three customizable buttons + two user modes!!) but it's not a love at first sight like Pentax is.

Like OP said, the ISO button placement is godawful. This is balanced by the amazing autoISO (it actually works!!) and "easy iso" mode, but you forgo "easy exposure compensation" by doing that. I much prefer the Pentax solution, but the autoISO doesnt work nearly as well, so it's kind of a wash.

That said though, having jumped to the neighbor's lawn, like the OP I realize now that often we take many things pentax has for granted, like SR, SMC coating, and our reasonably sized, yet amazing primes, especially in the lower focal lengths. All the Nikon options under 24mm are either huge and expensive, or does not perform very well.

I'm happy to have jumped to FF / nikon system and I think it really is the right move for me, but I empathize with the OP as I really miss all the good things about pentax.

By the way, glass in nikon FF land is not super expensive as long as you're not talking first party wide angle. In whenever you can forgo SR, you gain around 1 stop of dof control. The amazing high ISO performance kind of makes up for the lack of SR, so imho it's a wash, again.

APSC vs FF:
FA 35 ($300) vs AF-S 50/1.8 ($300)
Tamron 17-50 ($350) vs Tamron 28-75 ($300)
FA 50 ($250) vs AF-D 85/1.8 ($300)
DA 55-300 ($300) vs Nikon 70-300 ($350)
DA 17-70 ($400) vs AF-S 24-85 VR ($400)
DA 21 (400) vs Nikon 35/2 ($250)

ON the other hand
DA 15 > there's no FF 20mm prime with equivalent performance. Nikon's 20mm is a POS. Voigt 20mm has mixed review and no AF
DA 40 > no bodycap style lens
DA 10-17 > No reasonably prized zoom fisheye

I could go on, but both systems have its advantages :x
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