Product differentiation

1950 vs. 1971

Posted on by spr1334rzaveri

It’s all about reputation, speed, quality, value, and money for Dunkin Donuts and Starbucks. It’s up to customers which brand they want to choose between Dunkin Donuts and Starbucks. The low cost of Dunkin Donuts coffee is a big factor why it is the leading coffee brewery in the Country. Dunkin Donuts and Starbucks both have their own one of its kind flavors. National Coffee Drinking Trends Study of 2004 says, “More than 100 million people in the U.S. alone drink coffee everyday”. Most of the people have their own different taste to which coffee brand they like. Dunkin Donuts and Starbucks have two different coffee beans, only difference is price and style. Dunkin Donuts started with the donuts and then their coffee, After Dunkin Donuts started doing well in the business Starbucks came along in 1971. The only difference between both brands is that Dunkin Donuts coffee is 100% Arabica coffee while Starbucks has choices of different coffee from different countries.

According to Dunkin Donuts website, “Dunkin Donuts is America’s largest seller coffee by the cup, serving nearly 1.5 billon cups of brewed coffee each year. Dunkin Donuts sells more than 30 cups of freshly brewed coffee each second”.  Drinks at Dunkin Donuts are least 20% less in price than at Starbucks. This helps Dunkin Donuts capture business of price sensitive customers. At Starbuck a customer would pay $1.49 for a shot of espresso while at Dunkin Donuts espresso shot is only 99 cents. Dunkin Donuts prices are low and they offer high quality products. So customers can afford the price and have a good quality of coffee. Starbucks has recently launched a new line of flavored drinks. The new flavored drinks that Starbucks came out with are Blueberry, Coconut, Raspberry, Marshmallow, Caramel, Toasted, Almond and Cinnamon. These flavors can be added with different items of coffee you are getting. The most popular and top selling flavors for both Dunkin Donuts and Starbucks are Original Blend, Hazelnut, French Vanilla, and Decaf. Dunkin Donuts operates approximately 12000 units worldwide, while about 7600 of those are in United States alone. Starbucks operates about 8500 shops in more than 30 countries while most of their shops are in United States.

According to my research Dunkin Donuts is more popular then Starbucks. However, I personally choose Starbucks as my personal choice of coffee, because in my opinion Starbucks products cost more but, have better quality. What coffee shops would you pick between Starbuck and Dunkin Donuts and why?

http://en.wikipedia.org/wiki/Dunkin%27_Donuts

http://www.dunkindonuts.com/content/dunkindonuts/en/coffee/fromtreetocup.html

http://voices.yahoo.com/coffee-wars-starbucks-vs-dunkin-donuts-16009.html?cat=46

http://www.cspnet.com/news/foodservice/articles/dunkin-donuts-scores-no-1-coffee-customer-loyalty

 

 

Starbucks: Getting Big but Staying Small

Posted on by spr1323kpavich

“How do you get big but stay small?” Starbucks CEO, Howard Schultz, recently discussed the keys to the immense success and growth of the company. Focusing on operating with the goals of the small, 100 employee company that Starbucks began as is essential, no matter how large the scope of the company gets. Sometimes success can come from the simplest of goals; Schultz discloses that the secret to “getting big while staying small” is focusing on customers as individuals, one cup of coffee at a time.

When it comes to strategy and operations decisions, Starbucks is obviously not competing for cost leadership. Every time I grab a latte and see that my total is $5.14, I flinch a little at the cost. Then when my coffee is handed to me, I breathe it in, take a sip, and say, “Oh, but it’s so worth it.” Hence, their success, for the quality and product differentiation of  a Starbucks cup of coffee is what keeps loyal customers coming back day after day. With suppliers of the highest grade coffee from 30 different countries, Schultz provides that Starbucks’ greatest goal is “to stay committed to our coffee core.” Not only do they maintain the best quality coffee by doing this, but they also ensure that their each and every action is sensitive to the needs of both the environment and the farmers. Treating the farmers as partners supports one of Starbucks’ most fundamental missions, to maintain the importance of every employee as an asset to the company. Further considering the environment, the recycling efforts and introduction of reusable cups are constantly improving.

With companies that have such continued success as Starbucks, I often assume that they got big and then just stayed that way. But, in reality, a commitment to innovation as well as social perception is essential to truly growing as a company. Starbucks has no shortage of either; with more product lines, global expansion, and ethical efforts than virtually any other coffee supplier, the company ensures that they provide they next best thing before anyone else. From K-cups to the newly released Vismo system, VIA ready brew coffee to the new Veranda blend, customers always have a fresh taste to try. In addition to trying these coffees, thousands of customers also tried a new way to purchase it. The Starbucks mobile app allows for purchases and account management.

Whether the motivation is impeccable quality or the convenience of a store being located on every corner, the numbers prove that customers think very highly of Starbucks. With global revenues of $13.3 billion in 2012, reflecting a 14% increase from the prior year, Starbucks is hitting record highs in sales.

If you are a Starbucks addict, do you take into consideration the ease of mobile technology or the benefits of the loyalty program when buying coffee? Or do you remain loyal simply because the coffee tastes that good? If you steer clear of Starbucks, would the environmental or social efforts have the ability to make you reconsider?

 

Sources:

Starbucks CEO Schultz on Digital Innovation: http://www.usatoday.com/story/money/business/2013/04/24/starbucks-howard-schultz-innovators/2047655/

Starbucks: FY 12 Annual Report: http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome

Facebook Home for Mobile Users Innovative? or a Flop?

Posted on by spr1331abarrios

Facebook wants to takeover your computer, tablet, life, and now your Phone?

The sole objective for Facebook Home is to immediately let you gain access to the social network with just a simple look at your phones screen, and this works without you physically running the app or even unlocking your phone. So in simple words, from your locked screen you’ll be able to see your news feed, posts, and full screen photos posted by friends—not to mention you will also have the ability to comment and like the items you stumble upon.

Facebook Home
Facebook Home “Start Up Screen”

So how exactly is this innovative/different as to other phones with normal software? A Facebook Home equipped phone differentiates itself from other phones as you turn on the screen. You will see the time and a small circle at the bottom of the phone displaying your current profile picture. If you don’t touch the screen, your news feeds, known as Cover Feed (in Facebook Home), will start displaying and automatically scrolling from one post to another. There is also the option of manually swiping through the feed just incase you come across something interesting. On the bright side each post takes up the entire diameter of the screen, giving you the perfect visual. If a photo is posted then it will lighten up the screen and you have the option of double clicking to enter your comment or to add a like. If it’s a text post, the author’s photo will appear transparent in the background. If you swipe your finger to the right, you now engage in Facebook Messenger, where you can directly speak to your friends, while also seeing and receiving your SMS texts.

If your friends are boring and you’re really not an avid Facebook user then I can see this being very pointless and annoying to you. But if your obsessed with Facebook and constantly stalking an ex-boyfriend or girlfriend or cant get enough from just having it on your computer, then Facebook Home might be right down your alley. Then again, the option for Facebook Home is 100% optional when buying a new phone, so Facebook still allows the customer choose whether they want to adapt to Facebook Home or just use the normal app.

iPhone users, you like the idea? Well unfortunately Facebook Home is an optional feature for Android users only. It won’t be running on any Apple products because apple does not allow other companies to take control of the main functions. Though in Apples basic settings you are allowed to sign into you Facebook and Instagram and be able to share content easily. But that’s as far as it goes with Apples strict policies.

Do you think Facebook Home is differentiating the brand in the right way or setting up for a flop in the mobile world? Was it a bad decision to make software that has opted them from the biggest mobile manufacturer, Apple? What are you thoughts?

 

References:

http://online.wsj.com/article/SB10001424127887323550604578412664150862712.html

 

 

 

 

 

Any Gift Ideas This year? A Few.

Posted on by f1223nlopez
iPhone 5
iPad Mini
Nook HD
ChromeBook
Microsoft Surface
Galaxy Note II

 

 

 

 

 

 

 

This year is an awesome tech year, if you like that kind of stuff.  Instead launching one or two big gadgets just in time for the holidays, there have and will be a barrage of gadgets that will fit under the tree, and they are big competitors too.

Just like a movie release doesn’t want to be outshined by another big movie, neither does a tech company. Companies will push back or move forward their release dates and some will even go as far as to move because they want to reach consumers faster than competitors. This month, tech announcements all landed within about a week with announcements for Windows 8, Microsoft Surface, The iPad Mini, Google Chromebook, Nook HD, Windows Phone 8, A 10-inch Samsung tablet, a new Google phone and many more. Differentiation is “distinguishing the offerings of an organization, in a way that the customer perceives as adding value”(36, Heizer and Render). Do any of the companies really have this differentiation, or doesn’t this affect attitudes toward a new product? I would have to say that Apple set itself ahead of other competitors a few years back when it introduced the touch screens before anybody else, but now it seems there is a lot of copy cat gadgets, where its hard for them to get that differentiation anymore.

I think that it will be a good benchmark after the holidays to see who really has the biggest competitive advantage in the market this year. Will the competitive advantage be more geared at price or polish?

We already talked about forecasting in our operations management class, but how can each company have an accurate forecast with so many competitors in the market, dropping some pretty cool additions to the tech world?

On a side note, does the color of one gadget to the next bring up a concern in the selection process?

 

http://www.nytimes.com/2012/11/01/technology/personaltech/presenting-the-nook-hd-ipad-mini-and-windows-phone-8-review.html?pagewanted=all

 

Sound of the Evolution: Ear-itated No More.

Posted on by f1231malmail

“Can you hear me now?”

One word to describe Apple? Mine would be: Evolution. When taking any of their products into consideration, ask yourself this: When was the last time this product was updated? Probably not too long ago..

The trick with Apple is, that nothing is “too small” to change. Any change, no matter how seemingly incremental is done with purpose at Apple. This ranges from the bigger products such as laptops and tablets to the smaller, such as with their earphones. Considering there isn’t exactly a shortage of Operations-related Apple news on our blog site, what’s one more? Apple’s operations are so constantly in flux and evolving, there’s a lot to explore with their operations/products.

Shortly following the release of the iPhone 5, people were suddenly seeing a television commercial for the newly redesigned slick Apple earphones, now dubbed Earpods. The commercial effectively highlighted all the issues consumers had with the previous headphones incarnation, and explained how the new Earpods were designed for comfort, quality and sound transmission. While some might think this minor change to such a small product isn’t a big deal, the fact is that it actually is a big deal, especially from an operations standpoint.

Think back to product strategy options in chapter five’s Design of Goods and Services. When we think about Apple’s products and their constant changes and updates, this evolution technique of theirs is a clear example of the differentiation product strategy. Consider their aluminum laptops, iPad introduction, the iPod, the touchscreen smartphone and the App store. All of which revolutionized the electronic product industry, often imitated by competitors but never replicated. Apple effectively dominated their market because they introduced most of these product concepts, they wanted their products to have an edge that their competition lacked.

After the Earpods came to my attention, I read two articles on Wired and Engadget reviewing the Earpods and praising them for eliminating the problems that the older earphones had. Apple stated, “A breakthrough design for a more natural fit and increased durability, and an incredible acoustic quality typically reserved for higher-end earphones.” And they delivered. The sound is clearer, less rubber and metal, they feed sound comfortably on the edge of the ear canal, airflow and bass are sharper and they’re sleeker and conform to most ear shapes/sizes.

Operationally, when creating the Earpods Apple utilized Quality Function Deployment, wherein they identified customer wants and satisfied them. The Earpods differentiate in two ways, the first being that they’re physically/structurally very unique in appearance, sleek yet functional. The second is that they  retail for $29, the same as the old models. Not to mention, free with the iPhone 5 or new iPod. You get the quality of earphones that usually sell for $100+ but at the previous price. Apple listened to their customers and it paid off in satisfaction.

Where do you think? Do you think the Earphones are a testament to Apple’s evolution or is it an unnecessary change? Should Apple’s differentiation have a different target?

 

Apple takes on google

Posted on by naimah301s12

Recently, Apple announced that they would be developing their very own map app for mobile devices. There are already several map apps available for mobile devices, most popularly Google maps. What will make this app different and better than Google app. Why spend time, money and labor on something that already exists? Apple wants to be in control with this new app.

If Apple’s succeeds in creating this app that works efficiently and effectively, as other map apps or even better, Apple will continue to reign supreme in the technological world. Apple will need to establish product differentiation, and prove that this new app is worth the switch from Google app.  Their new replacement for the Google apps might not go as well as Apple hopes. Some people do not like change and may not be as responsive to the new app as others. Their forecasting for this new app will be hard to do. They cannot be completely sure that the population will take to this new app kindly.  While apple has had luck in the past with their innovations, there is no telling how the response to this particular new app will be accepted. Apple’s forecasting will simply be ball park numbers or guesses. The will definitely need to do research and development. Also, be sure to have surveys and a research panel to test out the functionality and like ability of the app. They should do this before their forecasting to have better numbers and get a good idea of what the public will think about the app. They can also find out what they don’t like, and possibly make changes and fix it.

Apple hopes to maintain the competitive advantage which they hold in the industry. Apple has a history of doing things out there or differently from their competitors. This innovative thinking has been prosperous for them, but this new app comes with concerns. Concerns that they need to take into consideration when creating this app. A good manager must be aware of all their possibilities that exist, negative and positive. With the possibility that this app will give you a view of the map that is clearer and 3D, compared to Google maps. Privacy issues arise. Apple needs to be sure that all information given by this app is one hundred percent accurate, else they could have possible lawsuits just like Google. For now, this app is in the developing stages and it is unclear when its final product will be available. Changes could be made from now till then but hopefully Apple can deliver something that will prove that Apple is the pioneer in the industry.