Stephen Meade- The BullsEye Guy

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What is the value of “perception”?

I was struck the other day in a conversation regarding a particular company, and the perception this person had.

He was railing against this company, and how they were taking advantage of people, and were getting special breaks, considerations, and favors.  He went further into his fervor about regulating them, and capping profits, and returning money, etc.

Rather than tell you the name directly, I put out some numbers for discussion.

How you would feel if I told you there was a company out there that made $87 Billion dollars, a profit of $19.5 Billion, was sitting on $76 Billion in cash that it didn’t know what to do with, and even though it employed almost 50,000 employees- it still made $1.77 Million per employee!

What if further I told you their product was almost 30% higher than any other competitor, and they held over 75% market share.

Would you call for an immediate reform? Would demand that they lower their prices? Maybe put a cap on the company for the amount of profit they can make?

What if I told you this company was Shell Oil?

Would you then say- aha!!! They are ripping us off. They should lower prices and return the profits! Close the loopholes that gave them that advantage?

Interesting.

The numbers above are NOT for Shell Oil. They are for Apple!!!

Shell’s numbers are actually $405B in revenue, $23.4B in profit, and they employee 97,000 employees (with a revenue per employee of $4.1M).

Isn’t this a case of Capitalism versus Perception?

Why is it we are willing to pay 30% higher for an IPhone than others? Why is it apple is rewarded for creativity and innovation, when Oil companies are vilified?

I’m not here trying to make an argument for one or the other, but where is the difference between perception and personalization?

Do we feel Gasoline is a necessity and should therefore be more reasonably priced than say an IPhone- which we consider a luxury?

Why are consumers more than willing to shell (pun intended) out more money for luxury and non-essential items?

I’ve tried to find the R&D budget for Apple, but it is probably substantial.

I’ve read also that Shell lost over $4 Billion in “attempting” to get leases for additional exploration.

What makes one company cool and the other vilified?

How is it that Capitalism can have both good and bad connotations?

Last, how can a company learn from this to position themselves as a “Champion” like Apple, and not a “Villain” like Shell?

March 2024
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