Strategic Project Management

One of the skills that every corporate executive could have is project management, but SURELY every project manager should master the art of strategy.

As our project management class unfolds, I became more convinced that we cannot design or execute projects without the proper alignment of our objectives and resources as Project Managers with our corporate strategy. After all, projects are initiated to achieve business results. Projects should then not only be managed from the operational aspect but from the business aspect as well. Getting the job done does not seem enough anymore, rather getting the Right job done is what is needed. This mindset does not come to cancel the existing ways of doing projects but to expand the projects meaning and give them a broader reason.

To help build the Project strategy one has to identify to following projects components:

  • Perspective “Why”: Defines the reason and the motivation for the project, as well the need, environment and business opportunity. This will help understand the big picture and creates motivation among the staff.
  • Position “What”: Defines the end product of the project which will be delivered to the customer or users. How could this project contributes to our product, and why the customer will buy our product and why our product is better than what is available on the market
  • Plan “How”: This part of the project strategy explains how the objectives and competitive advantage are going to be achieved. At this level statement of work (SOW) and work break down structure (WBS), Project Matrix are developed. Shall a company want to be a first-mover, “time” will then have to be a constraint and delays cannot be accepted. On the other side if a company has the objective of being a cost leader, PM working on product design teams have to ensure that “cost” is a constraint as failing to be a cost leader might put the company’s competitive advantage under threat.

In the recent increase of project based companies, this skill has become inevitable for PM. Projects objectives seem to be giving a project its short term meaning, but its alignment with the strategy extends that meaning to a longer term.

Avoiding this truth can only lead the project to failing to add real value and build a sustainable business model.

Recently i have been involved in several retail store construction projects where it was clarified to us since the early stages of the works that time is our constraint. Opening according to the set deadlines was crucial for our company not only to meet its commitments with the landlord and franchisor but also to remain ahead or aligned with the competition.

Do you agree that projects managers should dispose of great strategic skills? Do you have any project, according to your opinion, being executed without being relevant to the company strategy?

Patanakul, P., & Shenhar, A. J. (2012). What project strategy really is: The fundamental building block in strategic project management. Project Management Journal43(1), 4-20. doi:10.1002/pmj.20282

Project Strategy Components

Would you like some “Free” with that?

freeburger

This just might be a possible question asked by a McDonald’s employee in the imminent future. Currently, the only reward you get for eating at McDonald’s is: well, the food itself. McDonald’s does not have a rewards card to attract customers to stop by because of additional points or freebees. Though, it sure can use one.

The traffic in McDonald’s in on a steep decline. Frankly, their forecast also suggests a continuing future decline. We have previously discussed in class the need to identify the reason for having a negative trend and making adequate changes and adjustments to avoid declining sales. This is exactly what McDonald’s is doing. They are reconsidering their strategy and trying to come up with a way to retain their clients, meanwhile attract more clients who can make up for the decline over the recent years.

To create this new traffic, McDonald’s designed what you can almost call a new product, a loyalty card, which it is planning to introduce in the upcoming days. Other food chains such as Panera, Subway, and Starbucks already have some form of a loyalty card, and they all have seen a greater rate of return after its introduction. People love when they get a good deal: a purchase made on sale or just a freebee. Therefore, people are choosing places that reward them for their loyalty with rewards-only deals, or accumulation of points which eventually leads to some discount. This also helps keep customers loyal.

The three major fast food chains: McDonald’s, Burger King and Wendy’s have yet to come up with a loyalty card. Being the first to introduce one can definitely be a competitive advantage for McDonald’s. This can help them further differentiate themselves from the other two.

In addition, McDonald’s market consists of people who are relatively small spenders, which is what brings them to McDonald’s, a food chain with fairly low prices. Introducing a loyalty card that can save them even more money or get them a better deal will definitely be something these types of customers are interested in. Another amazing benefit of a loyalty card is that companies can track client’s purchases. They can then use this information to customize their marketing with coupons and sales that are specific to your interests. Therefore, this is an ideal solution for the decreasing sales at McDonald’s. The loyalty card will keep clients from going to the other places, which do not reward them for coming in.

Although many companies focus on improving their processes through efficiency and cost cutting, without sales, there is no need for production at all. McDonald’s is currently in need of increased sales and traffic. And although investing in the design and creation of a loyalty card can be quite costly, I believe it will definitely pay off with increased sales and loyal customers.

 

Do you think the loyalty card will keep their clients loyal? increase traffic? increase sales?

What is your experience with loyalty cards?

 

http://consumerist.com/2013/10/01/mcdonalds-testing-rewards-program-for-customers-using-mobile-devices/

http://www.businessweek.com/articles/2014-11-03/mcdonalds-and-other-fast-food-chains-step-up-battle-for-loyal-customers-with-rewards

Taking a leap into the future

Cash, credit card or apple pay, are you ready to ditch your wallet?

appley pay intoApple Inc. Reveals Bigger-Screen iPhones Alongside Wearables

When CEO Tim Cook announced Apple’s digital wallet method in early September he didn’t go into great detail about the security aspects of Apple Pay. Although a lot of people may be hesitate on using Apple Pay it turns out Apple Pay is safer to use than ordinary credit cards.

This is how it works, it lets you use and store your credit cards just by scanning your phone. The technology that sends the payment from your phone to the register is called NFC (near field communication) it’s basically an antenna inside your phone that delivers short encrypted radio waves with your payment data.  NFC has been around for a while it has been used in Google Wallet, PayPal, and Pay Express.

It’s a lot harder to steal data from NFC because your phone doesn’t give up your credit card number; instead it uses a one-time use code that gets approved by the bank for every transaction. Even if hackers managed to hack their way into a store and grab this payment data its useless to them because a code can only be used once, plus even if someone where to steal your phone you can actually wipe all the credit cards remotely.

apple pay

Unfortunately not all stores that once accepted mobile payments options are accepting Apple Pay. Stores like CVS and Rite Aid have stopped accepting Apple Pay for two reasons.

  1. The first being is that they developed their own payment method called CurrentC, it’s designed to one day let you pay at the register without using your credit card. Wal-Mart led the effort to CurrentC along with Target, Bed Bath& Beyond, Dunkin Donuts, Gap, Sears, Shell, Wendy’s and many more have joined it. It’s really no surprise that none of these stores are accepting Apple Pay.
  2. These stores feel that Apple Pay is giving more power to credit card companies. Every time you swipe your card, retailers have to pay the credit card companies between 1.3 to 3 percent of every transaction. Apple Pay relies on credit card networks so if Apple Pay grows, it would allow Visa and MasterCard to get stronger and the fees would stick around.

Questions:

  1. Do you think people will find it difficult to put trust in Apple, after the continuous iCloud hacks that have been going on with celebrities?
  2. Why do you think retailers are so afraid of Apple Pay?
  3. Do you think it’s okay for stores like CVS and Rite Aid to deny the use of Apple Pay even though these companies can handle the tap to pay technology?

 

http://blogs.wsj.com/totalreturn/2014/11/04/why-some-merchants-say-no-to-apple-pay/

http://money.cnn.com/2014/10/27/technology/security/apple-pay-cvs-rite-aid/index.html?iid=SF_T_River

Dominating on Competitive Advantage

costco

 

Costco’s Wholesale’s Mission Statement is to, continually provide their members with quality goods and services at the lowest possible prices. Costco’s has implemented a strategy for a competitive advantage by having a mix of low-cost providers and differentiation. Costco differentiates itself by providing consumers with products in bulk at a low per unit cost, giving rise to a competitive advantage. Costco delivers exceptional value in the products and customer service offer, giving customers the satisfaction that they are getting more for their money.

What keeps customers coming back to Costco, and what is it that makes it so successful? To answer the first question, Costco offers two types of memberships—the regular and executive membership. With an executive membership, Costco gives a 2% reward on annual Costco purchases. A holder of the executive membership receives incentives for shopping there, which leads to more sales and higher customer visits. Costco has made itself a highly successful company by offering quality products and excellent customer service. Not only do they treat their customer’s well but offer their employees a competitive salary, making on average $20 an hour. They receive great benefits and are part of a safe and healthy working environment as well. At Costco they are committed to providing its employees with opportunities for personal and career growth. A satisfied and happy employee translates into a productive working environment. By giving its customers competitive wages, Costco is creating valuable and productive employees, which in turn increases their output per employee, they save money on hiring many merely good employees, and offer quality service.

My family holds a membership, and we primarily go there for most of our groceries, and what I have learned is that, the shopping experience forms part of Costco’s competitive advantage. They offer free samples throughout their store, have a food court, and gasoline station with reduced prices. Their competitive prices and savings keep us coming back. Saving on gas while on a trip to buy groceries is an added benefit that has contributed to Costco’s competitive advantage and differentiation. Costco has competition with companies such as Sam’s Club and Wal-Mart, but so far it has proved to be dominating the wholesale business, being listed at #12 on Fortune’s 2014 most admired companies. I believe that as long as they keep doing what they are doing, and going a step further to satisfy its customers, they will continue to dominate the wholesale business.

 

Do you or any family members hold a membership at Costco? If so, how satisfied are you with the products and services they offer?

Do you think Costco’s competitive advantage would strengthen or weaken by expanding to continents such as Europe or Asia?

Are there still any areas for improvement at Costco?

Consumer Knows Best: Quirky Inc.

quirky_416x416

http://i.forbesimg.com/media/lists/companies/quirky_416x416.jpg

When it comes to buying things, the consumer knows best.  Quirky.com takes this need to understand the consumer to another level of crowd sourcing by allowing potential consumers in Quirky’s online community to submit ideas and their own input in order to develop innovations. There might not be a better way to identify what a consumer wants than what Quirky is doing by allowing consumers to actually create what they want. Some of the innovations they have created include the Pivot Power, a flexible surge protector, and Stem, a citrus spritzer. The most promising ideas every week are chosen by Quirky’s staff are then voted on by the online community and the employees at Quirky.com, where the top three to five ideas get to move on to development and later distribution.

Quirky-Pivot-Power-Adjustable-Power-Strip

http://thecoolgadgets.com/wp-content/uploads/2010/07/Quirky-Pivot-Power-Adjustable-Power-Strip.jpg

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http://scene7.targetimg1.com/is/image/Target/14047669?wid=410&hei=410

Quirky is set to record revenues of over $100 million dollars in 2014 after recording $48.7 million in 2013 and $18.2 million in 2012.  A lot of this revenue is created thanks to Quirky’s online community. Salim Ismail is the founding executive director of Singularity University, an educational organization and startup incubator in Silicon Valley, and he says that the online community has allowed Quirky to “scale very quickly” (Simon). At practically every stage of the product development stage, the online community is there with feedback such as on the style of the product or with their expertise in something like electrical engineering.

Inventors who get their product all the way up to development get 4% of revenue while there is an additional 6% that is split between the best feedbacks. It does not seem much but when you consider the starting costs for building a business around a single product to be around $200,000 just to do the paperwork and release a prototype, you might change your mind. There is also a lot of risk involved in getting into retail on your own when you do not have the contacts to get on the shelf, so Quirky would be a lot safer. For many people, like students and teachers, there is little risk and an immediate payoff if it works.  Jake Zein, inventor of the Pivot Power, got $28,000 in the first week of Pivot Power’s release after two years of being on Quirky. Now he has earned $696,343 as a result of his Pivot Power line.

Quirky has many competitive advantages under their business model. They get to keep the ideas that are voted into the development process. The company also avoids costs from the early design stages because of the online community’s validation as potential consumers. It helps as preordering allows recouping manufacturing costs to be a sure thing.

This company is set to grow. While most people do not always act on their innovations, Quirky can make the process a lot easier and less risky. Quirky’s mission to become a catalyst for innovation and it seems apparent to me that it will be.

Sites:

http://www.entrepreneur.com/article/220045

http://online.wsj.com/articles/one-week-3-000-product-ideas-1404332942

https://www.quirky.com/jakezien/summary

Questions

Do you have your own idea that you would like to be made?

Would you team up with Quirky, Shark Tank, or with your own team to get your innovation potentially made?

What do you think of crowd sourcing ideas and its effects?

 

The Chipotle of Pizza

The Chipotle of Pizza

Blaze Pizza assembly line

Look Familiar? Well, it’s no accident. Just when you thought you couldn’t be exposed to anymore of it, Chipotle comes back into your life-this time in the form of another operations management related blog post. But fret not; this post is not solely about the burrito king itself. No, it is about Blaze Pizza- its quick handed pizza-making counterpart where customers can choose from over 30 various topping to craft their own 11 inch pizza in just under 180 seconds- made possible through the utilization of a Chipotle-esque assembly line.  For co-founder Ray Wetzel, who along with wife Elise Wetzel founded Wetzel Pretzels, it is no secret how they formulated their business model. He recalls in an interview with QSR a past lunch outing where he failed to find pizza with his wife and actually ended up at a Chipotle that, “It was sort of this ‘aha’ moment when we looked at it: ‘Why can’t we do this to pizza, do what Chipotle did to the burrito or Mexican food?’”

Well they did just that, and they’re not the only ones. It seems that Chipotle inspired restaurants combining fresh, quality ingredients and a preparation platform with enough haste to meet the demands of today’s on-the-go consumer has caught on- giving chains like Blaze Pizza a competitive advantage. According to a recent Business Insider article by Ashley Lutz, “Growth of fast-casual chains like Chipotle is outpacing traditional restaurants,” while sales at chains like Pizza Hut “…declined 2% last year.” This chart below, from the same Business Insider article perfectly captures this alarming trend for traditionally paced casual diners.

Source NPD Crest,UBS
Source NPD Crest,UBS

The layout and process design at Blaze Pizza is flawless and something the consumer can count on. It’s literally as if customers are viewing a mini supply chain process in front of them as they watch their pizza being made. With easy functions for employees to carry out by simply listening to what the consumers would like on their pizzas, it is easy and inexpensive for Blaze to hire and train cheap labor- an aspect which often burdens others in an industry rampant with high employee turnover which is further complicated by the frequent introduction of new technology and alterations to the menu.

With Chipotle inspiring companies such as Blaze Pizza, where else do you think this type of setup could catch on, and is it strictly limited to the food service industry?

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http://www.qsrmagazine.com/competition/pizza-s-arms-race

http://www.businessinsider.com/pizza-hut-could-invest-in-fast-casual-2014-9

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

U.S Postal Service Takes Back Its Territory

Earlier this month, the U.S Postal Service announced that they have made a deal with Amazon delivering groceries on a test basis. The U.S Postal Service is a big player in mail delivery services, handling 40% of the world’ mail and visiting homes and businesses alike six days a week.

USPS is now lowering their parcel delivery prices during a time where their  competitors (FedEx and UPS) plan on increasing their prices. Both FedEx and UPS fear that with the recent changes USPS has been making with their services and prices will steal away their customers. This rings true in the case of Amazon, when just last December both FedEx and UPS misjudged the amount of holiday packages and many customers did not receive them until after Christmas.

FedEx and UPS however do not think it’s fair for their companies because USPS a is a government owned delivery service and has a monopoly on the business. This being said, it is also true that USPS has been suffering from a decline over the years due to the creation and embrace of e-mail.

One possible solution that Lenoard proposed was that congress could allow for the USPS  to leave the letter monopoly and let firms and couriers compete for this business like European posts have done. This would give the USPS the opportunity to focus soley on the parcel delivery service and would also avoid financial collapse. Lenoard also goes into the topic of USPS becoming more attractive to private investors that have helped European posts. If this were to happen, then the money that could come from private investors could help USPS with their aging trucks, making it more cost efficient and possibly speeding up their delivery.

USPS’ recent business decisions displays examples of the three strategies of competitive advantage we discussed in chapter two. First USPS competes with FedEx and UPS in differentiation in their deal with Amazon by delivering groceries. I personally think this is pretty unique because it breaks away from the association that USPS has with just letters and packages, they open up the idea to their customers that they can now deliver groceries, creating a more universal delivery service. Secondly, USPS uses competitive advantage in competing on costs by lowering their prices, allowing for cheaper shipping and delivery services than that of their competition. Lastly, USPS is becoming more responsive. They are allowing themselves to be cost effective, flexible by matching market changes in their new grocery deliveries, and reliability by meeting delivery schedules.

I personally am an USPS person, I have my packages delivered by them and I receieve majority of my packages through the USPS. I find their services of great quality and timely delivery.

What type of delivery service do you use and why? If you use either FedEx or UPS would you change your mind after hearing about their delays in their delivery, why or why not? What else could USPS do to give them a competitive advantage?

 

Source: http://www.businessweek.com/articles/2014-09-11/amazon-casts-its-vote-with-the-postal-service

Technology is Taking Over

We now live in a world where you could purchase items, order food, pay your bills with just the click of a button. Making the decision whether or not to update technology is a risk which managers have to consider. “Competitiveness and payback are the primary strategic factors to consider when looking at the advantages and risks of new technology” (James P. Cramer). Companies must realize that the world is changing and competition is everywhere. Online shopping has become a norm and is continuing to improve. With so many people shopping online companies must integrate methods to keep their customers. Firms compare themselves to other firms to keep up and stay in business. Another important aspect in this is payback. Businesses must determine the pros and cons when deciding to update. They need to determine if their decisions will bring them profit or make them lose money.

I used to work at Von Maur, a retail store. I did agree with many of the strategic decisions of the company but not all. Their managing quality was excellent. The customer service of Von Maur is outstanding. Their motto was quite interesting “Rule #1, the customer is always right. Rule #2 refer back to rule #1. The supply-chain was great; customers would complement the buyer’s decisions. The layout strategy was another great quality. They had recently installed a new computer system that made things quick and easy to use. The registers were touch screen and convenient.

However, I did not agree with the scheduling. This is where technology may not always be the best option. There was a program called Tess which was used for employee scheduling. The system did not distribute hours reasonably. For example, my co-worker and I had the same amount of hours, I had to come in 6 days in a row have a day off and then another 6 days in a row while her schedule flowed. I’ve also had many shifts where I would work a 12-9pm and then the next morning I would have a 7am-4pm shift. A majority of the employees agreed that this program was an issue.

One thing I think Von Maur must improve on would have to be their mailing system. Their mailing process was extremely slow. After applying for my credit card I had to wait weeks to receive it in the mail. Their mailing should be converted to e-mailing since many consumers use e-mail.

In the article, James P. Cramer made a great point, “Technology is reinventing the entire industry. If you are wondering whether or not to adopt new systems, it is our belief, as a general rule, not to wait. Competitive fitness should be your mandate” (James P. Cramer).  Technology is changing our lives dramatically.  Making change as soon as possible is a good idea because you don’t want to have to compete with others who are taking initiative in improving.

Have any of you worked in a place where technology was a positive or negative aspect of your job? Did you work in a company you felt needed to improve their technology?

 

Source:

Cramer, James P. “At Issue: Technology Investment.” – DesignIntelligence. Web. 27 Sept. 2014.

http://www.di.net/articles/at_issue_technology_investment/

Sticky Notes – so much more helpful than I thought!

As I mentioned in my last post, we have a difficult time finding software that works well for our jobs – and is within our budget.  Event Management isn’t always viewed as Project Management and this affects the tools we have at our disposal.  This class has gotten me thinking about a few different, and low cost, ways to organize our work.

I am not a sticky notes person.  I am a clean desk, organized folders, constantly creating and editing my To Do list person.  Sticky notes are cluttered and unorganized.  However, as we talked about using sticky notes for managing work flow, I saw how many ways it could be helpful.  Right now, we are planning the closing event for our successful $300 Million campaign, Many Dreams, One Mission, The Campaign for DePaul University.  It is hard to keep all of the pieces top of mind, and remember who is responsible for what.  Sticky notes help so much with this.  We can move tasks around as one person gets too busy, or we find a better way to do something.  It allows us to see patterns and to fit together work pieces that otherwise do not seem correlated.

We can also use Sticky Notes to place items in the program.  We are frequently talking over who is speaking when, for how long, and in between what other elements in the event.  Being able to put times on the notes, move them around, and adjust other elements really helps us be able to see how our decisions affect timing and over-all event flow.  Also, it does not require us to create 15 versions of the event plan for everyone to look at and compare.  This saves a lot of time on our end.

I was really surprised to find something like Sticky Notes, which I really don’t like in my normal activities, to be such a help to us.

In trying to find other options such as this – low cost but helpful, I did a little research.  I found Scrumy!  http://scrumy.com/  It is an online version of Sticky Notes!  Yay.  Now, I don’t have to have a cluttered up wall, but I can arrange and change my order of things just as easily.  It is a cleaned up version for people like me!

I also found a ton of other uses for post it notes: http://www.projecttimes.com/kiron-bondale/post-it-notes-just-might-be-a-project-managers-best-tool.html  and post it notes with a fancy name: http://leankit.com/kanban/why-use-kanban-boards/

I have to say, I really didn’t see myself find a use for post it notes, beyond the occasional one stuck to my phone with a number I can’t forget, or a message I attach to my computer as I am running out the door.  I might have to put this on my next Staples order though.  Post It Notes – you are going to revolutionize my life.  Thank you 3M.