1 MGT 301 – Autumn 2014

Google and It’s Robotic Operations

Posted on by karolina30133f14

moffett_field

The Google Company signed a 60 year, 1.16 billion dollar lease to renovate three large hangars at a NASA airfield outside of San Francisco, to create a facility for research and development of robotics, aviation and space exploration. In a press release, NASA announced that “Planetary Ventures LLC, a shell organization operated by Google for real estate deals, will contribute $1.16 billion over the course of the lease, while reducing the government agency’s maintenance and operation costs by $6.3 million annually” (Lawler, 2014). Since 2013 Google acquired many companies that specialize in the production of robot, robotic technologies and other parts.  Some of these companies include Japan-based, Schaft Inc. which makes humanoid robots; US-based, Industrial Perception makes robot arms and robot vision or the Titan Aerospace in the US produces solar-powered drones. The reason why Google decided to make this investment in these facilities is due to the increased demand for industrial robots. This is a new market that is rising. Google took advantage of this, and decided to lease this site that provide Google an ability of greater production of industrial robots. The use of industrial robots that are connected to a control system enables companies to use apps to personalize the robots to perform specific tasks. In 2013 about 179,000 industrial robots were sold. Out of those 100,000 alone went to the Asian market. The largest current market for these robots is China.

The reason that there is a higher demand has to do with capacity. We talked specifically in class about capacity and determining capacity requirements. In this scenario, “a combination of rising wages and the need for new production capacity that can manufacture products to global standards is driving this demand” ( Banker, 2014). Google is an example of engaging in strategic capacity planning. They are matching capacity with the anticipated demand requirements which is the increasing demand of industrial robots in the global market. They probably asked themselves what kind of capacity they need and how much they need, which led them to decide to expand their headquarters. Google understands the technology and capacity increments. They understand the opportunity they have for change to dominate this new developing market. Therefore Google is targeting the Chinese market for industrial robots since they see the highest opportunities there. Google has already made plans to cooperate with Chinese contract electronics manufacturer Foxconn, who want to purchase 10,000 robots. Google is taking the right steps and engaging in long range planning, by addressing the needs of a new production capacity.

Do you think Google is doing a good job matching capacity with demand requirements? Do you agree with Google’s decisions to take over the operations at these facilities? Do you think robotics is in our near future?

Sources:

Banker, Steve. “Google’s Robot Strategy.” Logistics Viewpoints Logistics Supply Chain and 3PL Executives RSS. N.p., 11 Nov. 2014. Web. 11 Nov. 2014. <http://logisticsviewpoints.com/2014/11/11/googles-robot-strategy/>

Gibbs, Samuel. “Google Leases Nasa Airbase for Robots, Planes and Space Exploration.” The Guardian. Guardian, 11 Nov. 2014. Web. 11 Nov. 2014. <http%3A%2F%2Fwww.theguardian.com%2Ftechnology%2F2014%2Fnov%2F11%2Fgoogle-nasa-airbase-hangers-robots-planes-space-exploration>.

Lawler, Ryan. “Google Takes Over Operations Of Moffett Airfield From NASA, Will Invest $200M Into The Site.” TechCrunch. N.p., 10 Nov. 2014. Web. 11 Nov. 2014.< http://techcrunch.com/2014/11/10/google-moffett-airfield-nasa/>

The Most Wonderful Time of the Year

Posted on by saboor30133f14

The holiday season represents a large chunk of sales for retailers. However they don’t come without proper planning and service. Many American will be looking for deals throughout the holiday season. Many will be shopping online and in store. Some companies have to be fully prepared with proper pricing strategies and supply chains in order to fulfill consumer demand. For instance Amazon plans on hiring 80,000 workers this holiday season (Bensinger). They also have been studying traffic trends related to their price changes on their website. With the growth in ecommerce, many customers are constantly scanning sites for deals, whether at work or at home. For example, in October alone, Amazon changed the price of the Jawbone Up24 20 times. This allowed many customers to buy at a low price while others had to pay more. Amazon also is giving early holiday deals to their Prime members (Banjo). Sears had the same product listed on their website, but the changes in prices only happened every Tuesday and Friday (Banjo).

Last year’s shipping crisis has led to many consumers trying to shop and find deals earlier, and retailers have tried to do the same in order to spread out the traffic of shipping orders. Some online retailers are resorting to new strategies and tricks in order to provide customers with the best deal possible. Retailers put a KitchenAid Artisan stand mixer on sale; but customers were not able to see the price until they added it to their online cart. Some retailers are also trying to create online door busters, where only a certain number of products are sold on a first come first serve basis (Banjo). Walmart is trying to come up with new strategies in order to edge out competitors in a price war. Walmart is thinking of extending their price match policy to online shopping as well. Meaning if someone finds a low price on Amazon, Walmart will also reduce its own price. In an effort to boost online sales, Target announced that they would remove shipping fees for online orders from October 22nd to December 22nd (Banjo).

It’s very interesting to see all the different strategies retailers are trying to implement. I find it intriguing that they are broadening the discount window into October and November. I really like how retailers have had to change their online strategy over the past couple of years. I for one will definitely be on the lookout for these deals this holiday season.

Do you shop a lot during holiday season? Do some of these strategies seem appealing to you?

Do you think many of these strategies will help some retailers gain an edge over one another?

Can you think of any other strategies/ management techniques retailers use in order to strengthen holiday sales?

Sources:

http://online.wsj.com/articles/wal-mart-weighs-matching-online-prices-during-holidays-1414672782?KEYWORDS=amazon+holiday

http://online.wsj.com/articles/when-to-snag-the-best-holiday-deals-1415569005?KEYWORDS=amazon+holiday

http://online.wsj.com/articles/amazon-to-hire-80-000-workers-for-holidays-1413432063?KEYWORDS=amazon+holiday

Is Apple Heading the Right Direction?

Posted on by chunkongjan30133f14

A recent report from Kantar WorldPanel ComTech shows that the market share of iPhone has dropped in the U.S. while it has increased in almost every other countries in the world. According to the report, the market share of the iPhone has dropped 3.3% in September compared to last year in the U.S. An article from BGR which quoted the data from ComTech’s report says that Apple isn’t really concern about the market share in the U.S, or even the market share in the world. It is now focusing on providing the better product and experience to consumers.

Being the most valuable public company in the world, it is shocking for me to know that if Apple is actually not concerning its market share in the cell phone market. As a public company (or even a private company), act in share holders’ interests is arguably the priority task. It seems to me that Apple is now a little off balance in term of serving the interest of the share holders and its general customers. A article from Nikkei says that Apple is now considering to let Pegatron to join the production of iPhone 6/6Plus along with Foxconn to meet the demand around the globe.

Is Apple actually should not be concerned about the market share in the U.S. as long as the numbers in other countries look good? Should they set up another assembling line to meet the demand in other countries and provide the best product and experience to its users or should they be focusing on the U.S. more?

Sources:

Nikkei – Pegatron Beefs Up For Robust iPhone 6 Demand

BGR – Apple Actually Lost Market Share in Q3 Despite iPhone 6 Launch

EBay Makes a Comeback

Posted on by farzana30131f14

EBay

Today’s world is primarily driven by the internet, including e-commerce. This does not come to the surprise of EBay CEO, John Donahoe. Technology has driven scale and automation and our shopping experiences have become less dependent on human interaction and more dependent on a steady WiFi connection. Donahoe says, “these changes in the commercial landscape tend to be ‘phrased in zero-sum terms: big retailers versus the little guy. Local versus global. ‘”

While EBay is a major contributor in this landscape, its biggest competition is Amazon. Amazon is known for driving retailers out of business, especially with its most recent proposition to deliver packages with drones. One thing that stands out about Amazon is the idea of “showrooming.” Amazon’s mobile application will allow you to scan a barcode of any item in a store and it will show comparable items with competitive pricing. You can essentially buy the item in a few clicks while still in the store.

EBay is initially thought of as an auction website. However, “since Donahoe took over in 2008, he has slowly moved the company beyond auctions, developing technology partnerships with big retailers like Home Depot, Macy’s, Toys ‘‘R’’ Us and Target and expanding eBay’s online marketplace to include reliable, returnable goods at fixed prices.” This is EBay’s process strategy that will revolutionize the e-commerce world, and to Donahoe’s hope, take on Amazon.

In our Management of Operations course, we have talked about the idea of a “process strategy.” The objective is to create a process to produce products that meets customer requirements within cost and other managerial constraints. EBay is taking on a “mass customization” approach to its process strategy. It is the rapid, low-cost production of goods and service to satisfy increasingly unique customer desires. EBay is creating a “process redesign.” It is the fundamental thinking of business processes to bring about dramatic improvements in performance. We learned that changing processes like this can be difficult and expensive. EBay did not acquire all of its retailers for cheap, they had to put in an investment in order to create profitability which is what is needed in a process redesign.

EBay wants to push the concept of a “digital wallet.” While other digital payment options exist, like Google Wallet and Apple Pay, EBay wants to expand it. In 2002, EBay bought PayPal as a way to safely transfer money between people who don’t know each other. EBay has also been experimenting with a concept it calls Connected Glass, an interactive glass that may one day create a “smart” mirror in a store that can take measurements and allow you to try on outfits virtually.

While Donahoe doesn’t know exactly where all of his technological efforts will lead him and EBay, he says, ‘‘I would say everything we’re doing is just enabling the future.’’

Do you think the PayPal Digital Wallet is going to take off? Or will it be forced to the side by Apple Pay and other digital wallets?

Read the article here

Pasting the Middleman Back In

Posted on by jeffs30133f14

Many people want to be entrepreneurs, but many of those don’t really know what kind of business they would start. It’s likely the biggest obstacle in the way of becoming an entrepreneur. Since the dot com boom, and Amazon, companies have made small (or large) fortunes serving just as the middleman. It’s not just for e-commerce anymore either. Basically, any process that can be simplified by a third party can be made into a company in some way.

Take the case of Brian Chesky and Joe Gebbia for example. These two had just moved to San Francisco in 2007 with an idea for a company called Airbed & Breakfast. Soon after, there was a big conference that was booked in town, and all of the local hotels were booked solid. With bank accounts that didn’t match their entrepreneurial ambition, Brian and Joe decided it was the right time to get started and offered up the living room area to their apartment, that they couldn’t even afford, for rent during the conference. The guests slept on airbeds and were served homemade breakfast in the morning. They banked some $800 by renting out their place. Not two years later, that same apartment was now the home base for Airbnb.

airbnb_0

 

Airbnb is a website that serves as the bridge connecting travelers to lodging. What was once a single room operation to rent their apartment to conference-goers, Airbnb can now put you, the traveler, in a place to stay all around the world. This idea for Brian and Joe could not have come at a better time either, as 2007 was just before the economy went into a recession. Being in San Francisco didn’t hurt either, being that it is basically the technological hub of the country (possibly the world), so a startup like this is well-suited for Silicon Valley. Also, being an internet startup provided immediate benefits as well. Being that this was taking off during the biggest economic downturn of our time, the low overhead of an internet company was certainly helpful in getting Airbnb to progress, and being online, instant access to customers and their feedback was available. Advertising was also available at the click of a mouse.

Just six years after being founded in 2008, Airbnb has over 800,000 listings across 192 countries, and as of April of 2014, Airbnb is valued at $10 billion.

This service, and services like Uber and Lyft, just prove that with technology the way it is going today, if you can find a way to simplify a task for someone, or just make things more convenient, you could start one of these so-called “middleman companies”  and find yourself one day a partner in a multi-billion dollar company.

Do you utilize the services of these middleman companies? What attracts or detracts you from doing so?

http://www.entrepreneur.com/article/203310

http://online.wsj.com/news/articles/SB10001424052702304626304579509800267341652

 

Set-Back for Honda due to Recalls

Posted on by sunny30133f14

The CEO of Honda Motors, Takanobu Ito states that due to the several recalls identified in recent Honda cars will cause a set-back to reach the company’s goal of selling 6 million vehicles a year worldwide by March 2017.

Honda has recalled the redesigned Fit subcompact vehicle 5 times in Japan for various issues since it went into the market in September 2013.
The CEO had to take a 20% pay cut for 3 months because of this.

Honda Recall

Due to the repeated recalls, Honda was forced to push back some of the product launches.Honda has recalled nearly 10 million vehicles globally since 2008.  The recalls have prompted Honda to set back vehicle launches including the Honda Legend which is already sold in the U.S. as the Acura RLX. Safety recalls include air bags on Honda cars to have caused deaths and injuries. The CEO said that it’s “painful” to think that the airbags have caused deaths and injuries.

This relates back to  our management class we can connect this to how their is an obvious issue in their supply- chain management process. It seems that if they keeping having these recalls, and the CEO is taking a pay cut makes it evident to us how there is something wrong in their process of building these vehicles. Honda needs to reevaluate their supply-chain process to catch what they are doing wrong in production of these vehicles that is causing this large amount of recalls on vehicles. As an owner of a Honda, I believe Honda should make this issue a priority to fix as soon as possible to save their reputation along with customers. Especially if they have recalled nearly 10 million vehicles globally since 2008, this is something big because it involves safety.

It can be assumed that Honda is not really making their vehicles as safe because the massive amount of recalls and this is one of the main reasons they are set-back on reaching their company goals.  Some questions to think of about Honda :

Do you think Honda should reevaluate their production process?

Can the management do things differently in their current supply-chain process to prevent recalls?

Article:

http://online.wsj.com/articles/honda-chief-says-could-miss-key-target-1415612162

 

Hashtag #shareacoke

Posted on by emanuela30131f14

 

Coca cola

 

 

We all loved when we found our names printed on a Coca-Cola can or bottle on the shelves at the grocery store.  According to some customer reviews  seeing your name on a big brand such as Coca Cola, makes it more personal. “Share a coke” campaign  first started in Australia in 2011.  After the great success in the Australian market, the campaign expanded on another 80 countries around the world.  In 2014 the “Share a Coke” campaign was introduced in the US market. This campaign boosted the sales in U.S. by 2%. This raise on sales hadn’t happened in a decade for Coca-Cola.  The Coke bottles had common names such as Jessica, Matt, Alisha and more, some buzz words such as friends, BFF and more.  For those who had a name that was not really common like mine, Coca-Cola would let people print their personalized “Share a Coke” bottles in some designated kiosks.  Also you could go online on the Coca-Cola website and create your own virtual bottle and share it on social networks. A lot of pictures with the personalized Coke bottles were shared on the social networks using the hashtag #shareacoke.

Coke

 

 

In the US, the company printed bottles with the 250 most common names. In UK  the company printed bottles with 1000 most common names.  I was kind of surprised by this fact. Since US is a bigger country than UK one would think the number of names chosen to be printed would be higher. The personalized bottles were introduced in the US market in June 2014.  They were sold on the grocery stores and vending machines.  Lately, you barely see those personalized Coke bottles or cans on the shelves anymore.  Coke is switching back to its standard labels in US.  This campaign was only  a temporary campaign.

What played a major role in this global success?

Coca-Cola made a temporary change in their production line globally, by customizing its product.  I think what played a major role in this campaign was the supply chain management. Making a change like this on the bottles and cans, especially when this change is applied to the global markets, supply chain is definitely a major part of this success.  According to a representative of Coca Cola, the “Share a Coke” campaign was a great success thanks to the supply chain flexibility.  The suppliers had to change their processes to meet the companies demand and the whole innovation demands that expanded globally.  Through this example the supply chain management can be seen as a profit driver instead of just thinking about it as a cost center.

 

This campaign was only temporary.  Do you think next year Coca Cola is coming up with the same campaign or something else “more attractive” to increase the sales?

What do you think are some other factors that played a major role in the switch of the product line?

 

 

http://www.foodmag.com.au/news/share-a-coke-campaign-success-thanks-to-supply-cha

http://www.independent.co.uk/news/business/cocacola-share-a-coke-campaign-boosts-us-sales-for-first-time-in-a-decade-9759739.html

http://online.wsj.com/articles/share-a-coke-credited-with-a-pop-in-sales-1411661519

Adidas Stepping Up Inventory Management

Posted on by josephz30133f14

download

Adidas and Nike have been in competition since the beginning. Both companies sell similar products, including shoes, clothing, athletic equipment and many more things in the sporting world. As a result they are selling to the same target market, and customers have to make the choice based on what they are purchasing. They both are very popular and have a huge customer base. They are constantly competing every year for sales and are always trying to top each other. They each are so well managed and have such developed business techniques that it might seem hard to improve more than they already are. Nike might be more popular in America but Adidas has a strong grip in Europe, and has rarely shown signs of weakness.

However recently Adidas has been struggling to keep pace with the retail powerhouse that is Nike. Third quarter sales for Adidas did not meet projections, and this set off alarms for management. Adidas golf alone has gone down 29% from this time last year, which is over 180 million dollars. To combat this Adidas has vowed to drastically increase inventory management. The company is on a mission to keep surplus stock down to combat holding costs. Analysts claim that if they can cut surpluses it will turn company earnings back towards projections.

Adidas is especially worried about their golfing line because of how expensive it is and how quickly new products are developed. If anyone has ever shopped for golf clubs you will know how crazy expensive they can be. We are talking about a thousand dollars for a good set of clubs. Customers constantly want the newest and most high tech clubs available. So if they are overstocked on a certain set of golf clubs and a new and improved set is released, it now becomes much harder to sell the surplus and they could be stuck losing value the longer they hold them.

They even decided to “not chase sales” for the second half of 2014 in attempt to focus more exclusively on their inventory management. They are trying to reduce inventory to further increase profit. Better inventory management gives Adidas the flexibility to react quickly to market sentiment, and adjust to the popularity of certain items over others. If they have less quantity of a unpopular product in their inventory then it minimizes potential loss on unsold goods.

Adidas is confident that increased inventory management will grow sales and margins in 2015, especially in their golfing department, returning them to profitable levels.

 

Do you think Adidas made a  smart decision to step away from emphasis on sales to focus more on inventory management?

Will better inventory management allow them to surpass Nike?

How important do you think inventory management is for companies like Adidas and Nike?

 

adidas

 

Sources:

http://seekingalpha.com/article/2660085-adidas-addyy-ceo-herbert-hainer-on-q3-2014-results-earnings-call-transcript

http://blogs.wsj.com/source/2012/11/08/adidas-is-fast-catching-nike-in-china/

http://www.wallstreetdaily.com/2014/11/11/adidas-nike/

Bigger than Chinese New Year

Posted on by marci30133f14

Have you checked your calendar today? Do you know what day it is?

Many of us living in America look at November 11th as any other day on the calendar. Many people are also celebrating Veterans Day.

But in China, they are celebrating Singles Day.

One might ask, what is Singles Day? Singles Day is a holiday invented in the 1990’s in response to Valentines Day. Instead of promoting love for one another, the Chinese created an anti-love holiday promoting the single life. It is celebrated on 11/11 because of the connection between singles and the number ”1”. In 2009, China’s largest e-commerce company Alibaba Group had a vision and took a new interest into this holiday. They morphed it into a multi-billion dollar e-shopping holiday (similar to Black Friday). It turned into the greatest 24-hour cyber-spending blitz in the world because of the deep markdowns.

This holiday hasn’t always been about shopping. Below is a graph showing how much sales have grown for Alibaba’s e-commerce sites Tmall and Taobao Marketplace after reinventing this holiday in 2009. Alibaba was able to improve sales drastically by using quality to improve profitability. By reducing costs for one day and increasing productivity, we see profit increases.

Screen Shot 2014-11-10 at 11.05.16 PM

American consumers spent $2.9 billion last year on Black Friday and Cyber Monday combined, compared to Alibaba totaling $5.8 billion in sales on Singles Day.

As we learned in class, quality is subjective, and perception is reality. This holiday was spread only by word of mouth. How crazy is it than within only three years, Singles’ Day has become the biggest 24-hour shopping event in the world? Alibaba turned it into a Hallmark Holiday and is now sweeping the market. Their stock is currently up 4.59 on the NYSE.

With this busy of a day, one thing that needs to be taken into consideration is inventory management. It is crucial to have a management team dealing with inventory related costs. Similar to Black Friday/ Christmas time having seasonal employees, do you believe they should have seasonal positions for Singles Day? Or it is not necessary similar to Valentines Day not having extra added employees?

Positions needing extra help begin with setup / ordering costs. Preparing purchase orders and managing inventory is essential to stay organized. Delivery charges are also another thing needing to be tracked. Holding / carrying costs will also need to be managed, along with shortage costs. This might all seem simple, but with $5.8 billion in sales in one day last year, these are a lot of things to keep track of and manage.

Leaving you with a few questions, how likely are you to participate in a Hallmark Holiday like Singles Day or Black Friday?

Does working on a management team during a day like this sound appealing to you?

What difficulties would you find in the management area of working on a day like this?

 

 

http://money.cnn.com/2014/11/10/investing/alibaba-singles-day-china/index.html?iid=A_MKT_News

http://www.businessinsider.com/singles-day-is-chinas-cyber-monday-2014-11

http://www.marketwatch.com/story/alibabas-singles-day-bigger-than-black-friday-2014-11-10

Bank Robbers (Student Loan Debt)(Got Job?)

Posted on by jay30131f14

Nearly 20 million Americans attend college each year. Of that 20 million, close to 12 million loan annually to help cover costs. In Europe, higher education is more highly subsidized for students and funded by the government. In parts of Asia and South America most post secondary education is still private with little funding from the governments. It seems like the United States is creating a huge market for student loans to become a business. We ask ourselves is this ethically right to have that high of an interest rate for students who graduate working.”The average sticker price in 2009 was about $35,000, but the average price people actually paid was around $21,000.” It’s hard to estimate what college really cost.

Are student loans even a choice anymore? Seems like now 90% of the people who graduate high school try to pursue some sort of degree or certification of a higher level of degree then a simple High School Diploma. Student loans have become a business itself. Banks daily are robbing students by setting an interest rate so high. Many students who I know personally have graduated with top degrees are struggling, competing with hundreds of other students for jobs that will only probably pay the 30-40 thousand a year. The student debt is just not fair, the rates are higher then ever before. Even if one were to find a job immediately upon graduation, depending on his/her school, they could spend years just trying to pay off their loans. Banks, in a sense, are robbing students of their financial freedom, and essentially are creating a form of “debt-slavery”.

Student debt is not just a financial burden one takes on in order to get a good education anymore, it has consequences that reach far into the future. In the past fifteen years student debt in private schools has been raised from 50 billion to now being more then double at 120 billion dollars. Now for the Public schools it has reached almost the same from 45 billion to more then doubling to 100 billion dollars. That being said, I believe banks are the main reason why students cannot afford a higher education as well as pay it off. At the end of the day the banks job is to drain every dollar and gain every percent out of our pockets. We can ask ourselves is this Social Responsibility of business? Is it ethically right to turn education into a business?

debt