Organization Strategy and Project Selection – Trampled by the White Elephant

About one year ago I was given the opportunity to work on an inquiry that involved a technology for which I had limited exposure. As an engineer I was incredibly excited, but also fearful of what I didn’t know and the time it would take to learn it. I am one of a handful of engineers in my department and there are only two other engineers at the company familiar with the technology – one is semi-retired and the other one works in another department. The inquiry was passed along to me from two heads of engineering that were themselves mostly unfamiliar with the details of the specific technology, but consulted with the “experts” and decided that we should proceed with lab scale testing. However, we didn’t have the equipment to do the testing onsite. My first task was to specify the needed lab equipment and come up with a budget. The charge to the customer for conducting the testing was just enough to cover the cost of the equipment so it seemed like a good opportunity overall – gain hands on experience, get new equipment for the lab and potentially go on to sell commercial equipment.

Once the equipment arrived I ran a series of tests which took, in total, about six full weeks over the course of six months. The tests got progressively better as I learned from mistakes and refined the procedure. I directed questions to the “experts” as they arose, but often found that the questions I needed to ask weren’t apparent until it was too late. On top of that, the responses I received weren’t exactly “expert” level.

After the testing was complete, the customer finally sent the RFQ so that we could design and quote commercial equipment. Upon reviewing I found that request was over my head. I reviewed the RFQ with the “experts” – one said it was “mind-boggling” and outside of our expertise, the other said we would need to run even more tests before we could quote. Just last week I had to go back to the customer and let them know that we are unable to provide a quotation and don’t have enough resources to conduct additional testing.

Since we just discussed project selection in class, I thought this was a great example of how chasing the wrong projects can get you trampled by the “White Elephant”. If anyone had asked any of the following questions at any time during the project we could have prevented wasted effort and embarrassment.

  • What specific strategy does this project align with?
  • What are the project objectives?
  • Who is the project sponsor?
  • Will resources be available for this project?

While I feel like the problem originated from the head engineers/management, I know that I am not blame free. I’m curious if I had MGT 598 one year ago if I would have approached the project more wisely or if I just needed the failure to open my eyes.

I think there are many other questions we could have asked along the way to save face. Do you have any advice for me or my department?

 

Is Apple Heading the Right Direction?

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

The ‘Walmarting’ of the Airline Industry

Norwegian Air Shuttle’s ambitious plans involve some complex logistics
Norwegian Air Shuttle’s ambitious plans involve some complex logistics

Many companies choose to employ a global strategy where different pieces of the process are completed in different regions of the world. These global processes can be accomplished in numerous combinations and it is up to the company to find the most effective one.

In this article, Norwegian Air Shuttle, an airline that specializes in low-cost flights around Europe, is bringing it business model to the United States and Asia, to the dismay of U.S. airline companies.

Their strategy is a complex one that has different cost-effective parts. Norwegian is “moving its long-haul operations from Norway to Ireland, basing some of its pilots and crew in Bangkok, hiring flight attendants in the United States, and flying the most advanced jetliner in service — the Boeing 787 Dreamliner.” Other airlines have tried but failed to do a low-fare approach on long-haul flights.

Bjorn Kjos, Norwegian’s CEO, is confident that they can offer fares that are 50 percent cheaper than the competition’s, which will ultimately drive out competition. American Labor groups, “see it as a backhanded attempt to outsource cheaper labor and undercut competition” as well as taking advantage of the open-skies agreement made with the EU (even though Norway isn’t part of the EU).

“United Airlines and American Airlines said the low-cost airline wanted to skirt labor laws by resettling its long-haul operations in Dublin, while using a Singapore-based company to hire pilots on its behalf in Thailand. The result would give it ‘a competitive advantage on trans-Atlantic routes in direct competition with U.S. carriers.’”

In class, we talked about competitive advantages in relation to globalization. According to the lecture there are many reasons to globalize:

  1. Improve the supply chain
  2. Reduce costs
  3. Improve operations
  4. Understand markets
  5. Improve products
  6. Attract and retain global talent

I think that the way that Norwegian Air Shuttle is globalizing falls in line with these points and it is effectively improving supply chain, reducing costs, and improving operations better than their American counterparts. They improve the supply chain by finding the most beneficial process to establish their airline. They lower direct and indirect costs by eliminating unnecessary expenses and finding the cheapest way to provide labor, and reducing taxes and tariffs. They also improve operations by understanding differences in how business is handled in different countries, and using it to their advantage.

There are also strategies for competitive advantage: differentiation, cost-leadership, and response. I believe that the Norwegian Air Shuttle company is competing on cost; they are they are providing the maximum value as perceived by the customer at the lowest cost and it is creating the most demand.

Do you think that the way Norwegian Air Shuttle handles their business model is considered a strategic competitive advantage or is it an unfair advantage? Why?

Source:  Long-Haul Expansion by a Norwegian Carrier Upsets U.S. Airlines

The Phantom of the Gaming World

The Phantom is credited as immensely revolutionary and one of the best gaming consoles … that was never actually released.

Phantom Gaming Console

Why was the Phantom revolutionary and considered potentially “game changing” in the gaming world?

  • The Phantom was set to have PC like performance, far more superior than any other gaming system. Why is this important? It made the potential ceiling for games in terms of speed and graphics that much higher than any other games in the market.
  • The Phantom would not offer games in physical form. Instead it would be built with an internal direct download service that would let users download games directly from an internet connection to their console (much like Playstation and Xbox now offer). Why is this feature important? Gamers no longer had to walk/drive to the store or wait for delivery of highly anticipated games.
  • The price of their games were set to be around $2.00 to $50.00, which would be in similar price range with other consoles in the market.

Why was it never released?

The company with the task of creating the system was a virtually unknown company named Infinium Labs, who was venture-capital-funded. Ultimately their costs simply ran too high when trying to make the console actually work. Infinium labs began to have problems securing funding and had to abandon operations.

Questions

What do you think was the biggest problem surrounding the release of the Phantom Gaming Console?

In terms of  cost, time, and performance, what advice would you give Infinium Labs if you were hired as a business consultant?

Sources:

http://electronics.howstuffworks.com/phantom.htm

http://www.gamesradar.com/the-top-7-consoles-that-never-were/?page=7

FORD is really “Shifting into Gear!”

Recently, Ford Motor Company has a announced they are putting a greater focus on their SUV and crossover cars to prepare for the future. You might ask, why? Well according to forecasts by IHS Automotive, one in five cars sold around the world annually in 2018 will be either a SUV or crossover. There is about 14 million vehicles sold world wide annually and a specific model taking up 20% of an entire market is a very large number.

Now after reading this article, I almost felt like I was ready the weekly courier, and analyzing the market conditions report from our simulation. Its really remarkable how this article pertains to the methods and leanings of the game we played in class.

ford

Ford’s SUV and crossover sales were up 37%, which also outpaced the industry increase of 17%. This is exactly what we tracked in the statistics segment of the segment analysis. Ford is clearly putting a focus on a specific segment of the market, or in our game “product type.” The amount of models of SUVs and crossovers has risen from 180 to 370 from 2000 to the current day. This market is becoming very competitive and in the simulation we would have to go into R&D and tweak our product to become better and have an edge. We would also encounter situations where we would have to buy more capacity in our plant to account for higher demand. Ford is doing exactly this. The article states, “…Where it is spending $700 million to expand.” Ford has announced it will continue producing their crossover product, The “Edge”, and expand its production capacity by spending $700 million dollars in Oakville, Ontario where the car is produced. Ford ships this model to over 60 countries, which obviously can be concluded the demand is very high. This scenario right here is exactly like the decisions we had to make within the simulation, adjusting capacity to meet demand and forecasts, along with the segment demand fluctuations.

Just to show exactly how intense this increase in market demand for these SUV’s and midsized crossover is, utility cars sales grew 10% and crossover sales grew 16% last year totaling about 2.2 million units…but that’s just in North America! In 2000 1.8 million units of utility vehicles were sold outside North America, today that number is now 10 million!

Obviously the future of the automotive industry is leaning in a specific direction. I think it is very interesting to see how Ford Motor Company is planning all of this now, and how closely this scenario relates to our simulation. How do you think this market preference for SUV’s and crossovers will affect the industry as a whole? Do you think this will create entry points for new automotive companies? What do you think will happen to all the inventory of the less preferred sedan and cope model type of cars?

Article Source: http://www.usatoday.com/story/money/cars/2014/02/16/ford-world-suv-shift-from-cars/5497343/

-Evan Meador

Reflection: A Look at Strategy

            Before starting this class, I was already aware that forecasting was important. However, I didn’t realize the extent to which it was important. Forecasts drive so many decisions that are made within a company. It is hard to know if you are being too conservative or too ambitious because you never can predict the market. Once you get the forecast, all of the other departments work together to make sure that the numbers are realistic and can make a profit in the end.

           I also saw that you can start with one strategy in mind and then you can just end up going in a different direction later on. I was assuming that companies had to stick to the strategy that they intended to start with but that isn’t true. Change is inevitable and you just have to learn to grow with the changing markets.

          Amazon is a company that has maintained its strategy for many years. They aim to make their customers as happy as possible and they have done a good job with that. They didn’t follow the Silicon Valley theory where you focus less on revenue and try to establish a product or service. Amazon doesn’t focus on profits, their profit margins aren’t that great but they still have people willing to invest in them. Amazon isn’t worrying about revenues, they are trying to gain more memberships without changing the price to match inflation. Money just doesn’t seem to be a problem for Amazon. They created Amazon Fresh and it just needs to make enough to finance its self. There strategy is proving to work very well for them because they keep adding more services to their business that they really don’t need to finance very heavy. They are able to charge fairly cheap prices for their Kindles because customers will purchase games and applications from the Amazon Kindle store. Their goal is to have their products widely spread across a large number of the population. So far, they have done an amazing job with that.

                  amazon                                                       

       My team’s strategy was to be a differentiator and lead in the high end and low end. As the simulation progressed, we saw that some of our products in those segments just did not do well. They were positioned in the worst spots in some rounds, some stocked out multiple times, and our awareness of the products fluctuated constantly. It was a true learning experience nonetheless. One thing I learned from this course is that you really have to analyze your competitors very closely and constantly do SWOT analysis to keep your company up to date. I also learned that ethics isn’t always a issue of what is good and bad, it can be about what’s in the best interest of the company. Doing nothing is also an option that can be chosen but it will also have implications in some way.

 

Link:

http://www.slate.com/articles/business/moneybox/2014/01/amazon_earnings_how_jeff_bezos_gets_investors_to_believe_in_him.html

 

Process Flow and the use of Project Management at AOL Advertising

AOL Advertising is a service-based organization offering various types of online advertising campaigns. Advertising campaigns offer clients customized audiences, brands and platforms that help advertisers reach their digital marketing goals. Whether the goal is to maximize brand exposure, increase online ROI or recruit a certain number of online registrations, AOL has a number of tools to help clients reach their online targets and goals.

Project Management is incredibly important to the bottom line of how all departments function at AOL. The digital online environment requires employees to manage multiple simultaneous processes that must all work together to create the end result: an online advertising campaign. Every advertising campaign experiences an assembly line of departments start to finish. First, a Sales representative pitches or responds to a request for proposal (RFP). Then an Account Manager plans the business with internal AOL systems, determining if there is enough inventory at the right price to meet a customer’s needs. From there it moves to the Launch & Traffic Department to begin the implementation phase. Launch & Traffic members receive an advertiser’s physical ad and sets up the campaign parameters (how and where it will run) through AOL’s back end data systems. After the Launch & Traffic team sets the campaign live, the post-launch process begins. Post-launch the campaign is reviewed by the Business Analyst team, who monitor the campaign’s performance to ensure that the campaign is running and performing as intended. Then Account Management works with the Billing department to bill for and finalize the campaign. Overall, each piece of the process has a number of key operational procedures that together allow AOL to successfully pitch, sell and execute multiple online ad campaigns simultaneously.

All of the departments listed above (Sales, Account Management, Launch & Trafficking, Business Analysts and Billing) engage in project management techniques and procedures on a daily basis. How does your organization execute project management through its operational processes and procedures?

 

Global Project Complexities

Global projects are more complex in nature than local project because additional factors are added to it, such as time zone differences, cultural differences, language differences and geographical distance differences. Distance is one of the major factors making global project complex. Distance has direct impact of communications. Lack of communication is one of the major reasons for PM failure. Distance also affects coordination and it does increases the amount of misunderstanding among project team members.

Geographical distance differences have a direct relationship with time zone differences especially in the East west direction. The further the distance the bigger the time zone differences. Time zone difference affects synchronous communication significantly. Project members therefore have to rely more on asynchronous communications which add extra delay to the project time. Asynchronous has it own advantages especially when there is a language barrier.

Language and cultural difference also goes hand in hand. However there are times two geographically separated teams will have similar culture but difference language. A good example will be Brazil and Mexico. In Brazil the national language is Portuguese while in Mexico the language is Spanish. However, both countries have very similar culture. Both countries are heavily influenced by the catholic religion, they both love music and entertainment and soccer is a more than a religion in both countries. However, on a global project involving the two countries language difference still come out. The language difference complexity is worse in situations when the there is no relationship between the languages of the various teams on the project such as English and Chinese. In these situations the language barrier is very pronounced. Synchronous communication is not helpful at all and the project members have to rely primarily on asynchronous communications. For global projects to be successful multiple means of communications are needed so taking synchronous communications out of the project will result in additional delay especially with feedback and clarification of confusing issues.

Cultural issues are much larger than language issues. Cultural issues affect many things such as believes, attitude, values, morals, ethics etc. What is ethical in one culture might be consider unethical in another. A good example is drinking or dressing. The legal drinking age in Mexico is 18 but 21 in the US. Bill Young the past president of AIPM (Australian Institute of Project Management) noted in (reference  5) that “50% of joint-venture project between Western companies and Chinese companies fail”. He then said understanding the cultural differences is one of the keys to the success global project not just between Australian and China.

If global projects are more complex than co-located projects why are companies doing global projects.  In (reference 4) a report by pwc they noted that most financial institutions struggle with the effective execution of large, complex global initiatives.  Others can comment on why global projects and how global projects can be successful today.

References

  1. http://auapps.american.edu/~alberto/docs/deloneespinosaleecarmel_hicss38_proceedings.pdf
  2. http://www.ics.uci.edu/~gmark/CSCW2002.pdf
  3. http://academia.edu/2815617/Global_Project_Management_Framework_A_Cartesian_Concept_Model
  4. http://www.pwc.com/us/en/financial-services/publications/viewpoints/assets/fs-viewpoint-global-project-execution.pdf
  5. http://www.thepmchannelnews.com/cultural-differences-in-project-management/

Technology in the Workforce and the Rise of the Nontraditional Work Environment

Technology is changing the way people do business. With applications that create faster overall processes and improved communication, the key to success is often accomplished through the use of the right technology. Managers must be aware of what these changes are and how technology is facilitating them. There are a number of growing trends that demonstrate how the workforce is shifting towards nontraditional work environments and which technologies are being used to support these environments. Remote employees working in virtual work environments are becoming more commonplace in today’s workforce, whether it is through outsourcing work to other countries or US employees based in different geographic locations than their teams/managers. No matter which type of nontraditional work environment, it is clear that technology is a crucial key to success.

There are a number of different tools that a remote or virtual employee can use. Working in teams with people located in different geographic locations requires extra attention on communication. Managers must make sure that remote employees feel included and equal to their non-remote peers. In order to do so, there are a number of technologies that help bridge the geographic gap. Video conferencing allows individuals who are in different physical locations to interact as if they were all in the same place. Having a round-table meeting over video conference allows individuals to express themselves through gestures and expressions. It also creates a sense of familiarity amongst employees since it is a social environment. Another tool is web conferencing, which allows people on different computers to simultaneously view one person’s screen. This allows individuals to host a meeting where they can present to a large group and not have to send out loose documents. Another online tool that allows people in different locations to communicate is Instant Messenger. AIM (AOL Instant Messenger), Gchat (Google Chat) and Facebook Chat all allow you to communicate in real time via text with many other individuals simultaneously.

While these technologies have many benefits, a word to the wise is to be aware of everything that comes along with the use of technology in the workforce. On the positive side, technologies like video conferencing and web conferencing allow many different people to get together in one virtual location. Being able to type at the rate of a normal conversation (through an instant messenger program like AIM) also allows people from far distances to communicate. However, both of these positive benefits have the potential to be negative as well. Video and web conferencing can sometimes be difficult to set up and if the Internet is down you often lose access to many of those tools. Typing a conversation can also lead to things taken out of context because you lose tone and expression. Overall, technology can be used successfully as long as individuals are mindful of the potential roadblocks.

Have you seen nontraditional roles emerging in your work environment? What technologies does your company use (or have you personally used) to help you stay connected to your peers?

Happy Competitors

 

On June 27 BlackBerry will launch its BBM messaging application for both iOS and Android smartphone platform users for free. BBM has been of one the key features in all BlackBerry smartphones.  According to blackBerry there are currently more than 60 million monthly active users of BBM, who send and receive more than 10 billion messages each day. This equivalents nearly twice as many messages per user per day as compared to other mobile messaging apps.

Few years ago BBM was the most active messaging application in the market and the reason for many people not to switch to an iPhone or Android cellphones. It was also very secure, reliable and was also equipped with voice, video calling and screen sharing and was on its way to become into a new type of social network. Even to this date there is nothing else that comes close to such service.  This gave Black Berry the edge over all the smartphones in the market and had established a very loyal fan following.

But soon blackBerry will make BBM available on both IOS and Android devices and this might just take away its edge.  As BBM was the main platform for people to interact on their BlackBerry smart-phones, this new service will give its consumers the ability to use this application onto any one of those devices of their choosing and I think this will create a big problem for BlackBerry in the near future.

I think BlackBerry should have hold on making this move and should have seen how their new smartphones will perform and on based on that they should have made the decision of what to do with their BBM application on whether or not they should put in the hands of their rival smartphone companies like Apple and Google.  To me it also seems weird that they would launch this application on other IOS and android devices before launching it on to their BlackBerry PlayBook.  Does this mean that they have completely given up on their tablet market? If so what kind of message would this send to their consumers and investors?

Another thing that BlackBerry has done is that they will be providing the BBM application for free to its both IOS and android users. I don’t think this was a smart move from a management standpoint. If you know that so many people are using your application and that it is one of the best one out in the market then they should have charged some sort of a purchase fee for the application knowing that people will pay for it no matter what. This would have given some sort of extra side revenue that they could have applied to their operations.

I also believe that if they would have acted on this sooner when the demand for application was even greater couple years earlier then what it is today, it might have still worked out to their benefit.

Do you think that this move will prove profitable for BlackBerry or will it backfire? Also should they have acted earlier on this when other applications like What’s App, iMessage were not as popular?

Sources:

http://n4bb.com/multiplatform-bbm-blackberrys-play-biggest-social-network/

http://www.yolevski.com/blackberry-bbm-for-iphone-and-android/

http://bgr.com/2013/06/05/blackberry-bbm-android-iphone-preloaded/