strategy

If CVS Pharmacy Can Say No To Smoking, You Can Too!

Posted on by f1233bnikolova

020514_cvsnosmoking

Link to Article: http://www.forbes.com/sites/scottdavis/2014/02/06/cvss-decision-to-dump-tobacco-delivers-on-its-brand/

CVS Pharmacy has recently taken a large step forward in their industry by making the strategic decision to remove tobacco products from all of their stores in order to show how serious they are about being committed to the health of their customers. Also, for CVS customers that are smokers, they will begin offering free online assistance to help their customers stop smoking if they choose to do so. This was obviously a difficult decision and one that could potentially lose them a lot of money, but they believe that this decision will have the opposite effect, and will actually help them strengthen their brand, retain their current customers, and inspire new customers to come into their stores.

I think this directly relates to the material that we covered in class when it comes to the decisions that departments have to make together regarding the success/failure of their company. A decision like this is obviously not made overnight and is one that can only benefit the company if everyone in the company (all departments) is onboard. In class, we learned that a part of a company’s successful strategy is that “learning and continuous renewal are essential parts of a [successful company’s] strategy.” CVS is choosing to “lead the market” instead of “follow the market” and I believe this will really pay off for them. According to the author of the article, “CVS is “putting its money where its brand is” and has the first mover advantage.”

I also believe this article directly relates to the business simulation we did in class. I think the simulation really showed us how important it is for companies to make important thought out decisions and to not try to be something that they’re not. I also think it proves to us that even though at times it was hard to let go of a product that we have been making for a while, sometimes it was the best decision for the overall health of the company. While CVS could’ve remained successful being in the tobacco industry, they chose to differentiate themselves from their competitors and hopefully help them gain a competitive advantage.

Overall, I believe that this decision was the right one for CVS especially since none of its competitors have really done anything as of yet regarding selling tobacco in their stores (Walgreens?). I believe that in order to make these decisions CVS executives strategically evaluated all of their market segments and made sure to forecast so that in case their revenues did fall dramatically, the company would be able to bounce back. One thing that really stood out to me while doing this simulation is how important forecasting is and how important knowing your market segments are in order to be successful. I feel like my team had a lot of trouble with this in the beginning of the competition and this is what caused us to suffer later on. Knowing your products and knowing the market segments that those products are is extremely important and making sure that all of your departments are working cohesively is just as important.

Do you agree with CVS’s decision to remove tobacco from their stores?
What do you think it’s competitors will do regarding CVS’s decision? Will they drop tobacco products as well?
What else do you think CVS can do to set themselves apart from their competition?
Do you believe this will negatively impact CVS’s business?

Reflection: A Look at Strategy

Posted on by mportisw14

            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

 

Death of American Industry

Posted on by seanv598

This article is interesting in many ways.  It highlights the shift that is taking place that is slowly taking shape around the world with China and their “industrial revolution.”  The steel industry has long been an American dominated industry because its superior manufacturing processes.  China has been making serious in roads to compete locally.  The article talks about the implications of opening the proverbial “can of worms” of using Chinese steel to build United States infrastructure.  It speaks of the price differential between Chinese and US steel, and it talks about the future of the steel industry.  The United States steel industry could have an uphill battle for future construction and bridge work if the steel used in the bridge projects in New York and San Francisco prove out to be high quality.

The common thought within the United States manufacturing and building sector was (and still is) that Chinese steel was inferior and could not be trusted.  The American Recovery and Reinvestment Act was supposed to help out industries like construction and the steel industries by putting limitations on where you can buy material and employing people.  The problem with this restriction, is there has been so much consolidation in the steel industry that many items are not made by ANY American producer.  In some cases, even if there is the American alternative, the price can be much higher and the project manager needs to reassess its job priorities.  The article talks about the situation where a company was able to find material in the United States that was almost double the price of the imported steel.

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The steel industry and the manufacturing world run in tandem.  Manufacturing has been sputtering in the United States and the steel industry is dependent on people buying cars, appliances, and building infrastructure.  The manufacturing sector has defected overseas to places like China and India because of cheap labor. The majority of the construction industry has stayed within the United States because of the superiority of the American made steel products.  Companies like Nucor have had a stranglehold on the construction industry because of the high quality, yet economically made steel that they were able to produce. The danger, as the article talks about, is the threat on the construction industry which has started to shift towards Chinese steel.  I think that if President Obama extends tariffs, it will have a temporary positive effect on the industry by putting China and the US on equal footing in terms of pricing, but what is the long term game?

While I agree that it is important for China and the United States to be on an equal playing field, I think that the bigger problem is the need for more planning within the industry to become a feasible and efficient producer of steel and employer of American jobs.  Assessing our risks of bringing in more capacity to the industry vs. not being a significant player will be something to watch for.  How does the industry help bring manufacturing jobs back into this country without a plan towards the future?

 

Main Article:

http://online.wsj.com/article/SB10001424127887324049504578545431938331880.html

Supporting Articles:

http://www.nbcnews.com/business/jobless-claims-rise-manufacturing-growth-slows-6C10387815

http://www.silive.com/news/index.ssf/2013/06/staten_island_lawmakers_charge.html

 

Saving the Planet One Aisle at a Time: Tesco’s Sustainability Movement

Posted on by spr1324ismal

Many companies want to promote sustainability within their markets since it attracts more customers, however competition and living within specific limits are stopping them from achieving this goal. Sustainability, which includes sustainable design, building and operations, is the collection of strategies and policies employed by companies in order to reduce their overall impact on the future generations. By taking waste from one part of the production process and using that waste to generate new product is a great way to minimize the consumption of limited natural resources and maintain their availability for the future.

800px-Bradley_Stoke_Tesco_2It is very important for management to set goals and develop a strategy when searching for improvement opportunities in order to implement a sustainability program within their company. I think it is much easier being sustainable than going green and many other companies are following in such footsteps.

For instance, Tesco, a British multinational grocery store and third-largest general merchandise retailer in the world measured by revenues and second-largest measured by profits, has recently planned out new business strategies and goals in three various areas, one of which is to reduce food waste globally and become a more sustainable company.

Tesco-1024x468

Research by Tesco shows that about one third of the world’s food is never eaten and instead it is thrown out or left to rot. Therefore, Tesco is planning to pursue this food waste issue in three crucial areas which are: its own operations, the supply chain and agriculture, as well as the customers. The company has the ability to track down waste and find where it happens as it leaves the farmer’s field and reaches the customers’ home, and everything that happens in between.

According to the article, Tesco claims that around 32 percent of food is wasted across its value chain, of which 16 percent comes from the supply chain and agriculture, the other 16 percent coming from customers and less than 1 percent is from the retailer.

Because of the large amount of food waste across all markets, the company is working to develop an advanced measurement for the amount of food ruined in its operations. This will permit Tesco to track progress through a period of time which can significantly minimize the waste as well as achieve its goal of sustainability. Since the food waste is much lower in the UK than in other markets, it plans to follow in their specific operational practices and more precise forecasting so that food does not rot or is thrown out with the high supply rate.

Being more transparent and sustainable for a company with a global marketplace is tough, however, Tesco hopes that by keeping a strong track record of its waste management will lead to a decrease in the food waste levels throughout its value chain, attract more customers, and keep increasing its profits.

Do you think the tracking record will achieve greater sustainability for Tesco or should they examine other ways to manage their inventory and to minimize the overall food waste?

Source: http://www.environmentalleader.com/2013/05/29/tesco-announces-goal-to-reduce-food-waste-globally/

Need a New Heart? Let Me Print One for You

Posted on by erytych

It is amazing to live in a generation where technology is advancing because we get to witness life-changing events right before our eyes. Recently, there has been a substantial amount of conversation about three-dimensional printing and how it will change the future because we will be able to print objects instead of psychically manufacturing them. Lately, scientists have been experimenting on printing out anything they could think of, ranging from things such as adjustable wrenches to human organs. Yes that ‘s right, a human organ. You are probably wondering how that is possible. Well you are not alone because when I first heard about 3D printing, I thought to myself, “How in the world is that possible? I can’t even imagine that.”  Then I heard about how 3-D printing had saved a baby’s life and I thought to myself, “Okay, now this is a joke.” Well, it’s not.

3D Printed Wrench

At six weeks old, a baby boy named Kaiba had stopped breathing because of a rare obstruction in his lungs called bronchial malacia; this is a condition where the cartilage in the walls of the bronchial tubes are weakened. After being revived and taken home, Kaiba’s breathing had failed on him day after day causing his parents to constantly perform CPR on him. With the hopes of Kiaba’s survival diminishing, doctors didn’t know what else to do except perform a medical experimental technique equivalent of a “Hail Mary” pass, 3-D Printing.

3d-printed-gears

I can see 3-D printing becoming a process strategy within the mere future because it will be a production process that meets customer requirements and product specifications within a certain cost. In Kaiba’s case, it already has saved his life. Doctor’s had taken an x-ray of his lungs and transferred the picture to a 3-D printer to successfully duplicate a splint measuring “a few centimeters by eight millimeters.” Specifically, this would be considered a process focus strategy because creating one customized, artificial support to be surgically attached into a human requires the ability to be able to produce in low volume. Because of the low volume, doctors can then focus on producing a high variety of customized products for their customers.

 

Having a high degree of product flexibility and a team of experts to meet your specifications and produce your product sounds like an excellent strategy for any ordinary individual; however, one thing some people might not realize are the costs associated with it all. Creating an object that saved Kiaba’s life is a phenomenal occurrence; however, the bill following the surgery is probably not.

 

Do you think 3-D printing will one day become a Repetitive Focus strategy, or maybe even Product Focus Strategy?

Is this a product that meets and exceeds customer requirements, costs and managerial goals?

What do you think are the long term effects 3D printing has on efficiency, production flexibility and quality?

 

http://www.cnn.com/2013/05/22/health/baby-surgery/index.html?npt=NP1

“Bring the Taxes On!” An early Christmas or Nightmare?

Posted on by spr1311kbangloria

Conline-shopping(1)urrently, online sellers are only required by law to collect tax on the states they have a physical presence in. Online only businesses are not required to charge sales tax and consumers who don’t pay sales tax on purchases they make online are supposed to pay that tax to their state. But, that rarely happens. Only 1% of consumers actually follow that law and the rest get away with it.

Consumers enjoy the concept of buying online to avoid tax and this may be coming to an end soon if the bill for internet sales tax law is passed.  Some say, that the bill passing will be an early Christmas for Retailers that have a physical presence.  In a survey taken by an advisory firm (Alix Partners),  30% of online shoppers said they would stop shopping online and shop more at retail stores that have a physical location if all online business started taxing.  The other half of the people surveyed said the sales tax would not affect their online shopping habits. Management for retailers need to figure out the pros and cons of the sales tax online.  Some will be affected while others will not be.

Companies like Amazon were against the online sales tax bill passing at first. After years of opposition, Amazon also is supporting the bill because they are already collecting sales tax in nine of the states where it has warehouses.  While Amazon is supporting the bill now, many other online retailers are opposing the bill saying that it would hurt their business and it would be an administrative nightmare because they would have to manage to determine tax rates for different states and locations at checkout. EBay another large online retailer like Amazon, has a slightly different opinion on the tax law.  John Donahoe, the CEO of EBay  says that if congress does pass the online sales legislation, small businesses with less than 50 employees or less than $10 million in annual out of state sales should be exempt from the sales tax law nationwide.  EBay is not completely opposing the legislation, but they are saying that it should have some exemptions to it.  Americans for Tax Reform, an anti-tax group also strongly opposed the bill as well as other online retailers.

The law would only apply to online sellers that have at least $1 million in sales and do not have a physical store or warehouse.  If the bill is passes it is estimated that more than $12 billion in additional sales taxes will be collected from online purchases each year. The only concern of the bill passing is its affect on online businesses. This could be a possible nightmare for them and really hurt their business. The bill has the full support of retailers including Best Buy, Target, Wal-Mart, and Barnes and Noble because they already are required to charge tax online because they have physical presence in most states.

What could be possible techniques for online business to keep running despite them charging online tax?  Do you think that retailers with physical presence will benefit from this bill passing?

http://www.cnbc.com/id/100716012

http://money.cnn.com/2013/05/05/news/internet-sales-tax/index.html

Mercedes’ Management pulling in Wealthy Chinese again

Posted on by spr1322tgutheil

After Daimler’s CEO Dieter Zetsche sat in the Mercedes S-Class, he realized it would not recline as far as a seat in an airplane did, and therefore not give the same amount of comfort that the wealthy individuals that would buy this car are accustomed to. This was especially an issue in China where the car-owner sits in the back a lot of the time as they have chauffeurs. Zetsche had his designers recline to 43.5 degrees to make it more comfortable and luxurious and therefore more appealing to the wealthy Chinese. When the backseat reclines, the front seat automatically moves forward a bit to give more legroom, and the seats even have a massage feature for ultimate comfort.

Mercedes Revamps the S-Class to Lure China's Wealthy Buyers

To be able to realize that this is necessary is very impressive forecasting while also looking at the past sales and realizing that something is wrong. For the CEO to go out and try the features of the Mercedes S-Class and help come up with solutions shows the dedication he has to the company, and shows good management as well. It is rare that you hear that a chief executive officer figures out the issue a company has and makes it a point to fix it.

Chinese buyers account for more than half of all the sales of the S-Class, which makes improving the sales even more important. With Mercedes operating profit margin down in comparison to BMW and Audi, it is important that the sales of the S-Class are improving again because the profit margin is 25% for these cars. Zetsche was also smart

in realizing that innovating and improving this car is important to the bottom line of making more money, as it is the most profitable.

China is a huge market as the sales of luxury cars are projected to go up 12 percent annually up through the year 2020. Clearly the operations management of Mercedes is of highest quality, because being able to put together all of the factors I have talked about and realizing that perfecting the S-Class is essential is rather impressive.

A Mercedes S-Class can cost as much as 486,000 dollars in China due to very heavy import levies. Due to the halo effect, Mercedes is able to generally charge more for its other cars as well. Mercedes sold about 20,000 more of their luxury cars than BMW and a little over 40,000 more than Audi’s luxury car, so clearly Mercedes is the best at perceiving an image of luxury and highest of quality. With this fact in mind, Mercedes’ management needs to realize that they need to improve the sales of their other cars to become the most profitable company in overall again in comparison to their biggest rivals of BMW and Audi.

What do you think Mercedes can do to improve their sales and become the most profitable company again? Are you impressed by the improved S-Class moves?

Kroger’s Enhanced Technology for a Quicker Checkout

Posted on by spr1324ismal

We live in a society dependent on technology and in the world of business, technology has helped in developing various systems to improve day-to-day business activities and satisfy both the consumers and the producers.

Customers are always anticipating the endless wait in checkout lines.  Sometimes if feels like the line has not moved for the past 10 minutes, but switching to a different line puts them at a risk that it might be even longer. Is the item really worth waiting in line for? Is it easier to bail and just buy it online or at a different store? Numerous retail stores are trying to find new ways to get the shoppers through with ease as online shopping is increasing and as long lines threaten sales and loss of loyal customers. 

 Kroger Co., a supermarket giant, has installed infrared cameras to aid in lengthy checkout lines in about 2,400 its stores. The cameras, which detect body heat and have been used in the past by the military for surveillance purposes, are paired with Kroger’s in-house software in order to decide the number of lanes that need to be open. Not only has this new technology allowed the stores to operate with lower labor expenses, but it also has reduced the customer’s average wait time spent in line. 

Competition in the retail industry is high and for companies to enhance the shopping experience and speed up service for each of their customers is a top-notch priority. Since the checkout lines are the last thing the customer experiences, the longer the  time is wasted waiting in line, the less satisfied the customer is leaving the store. The ultimate focus for Kroger and any other business is its consistent customers, and according to Kroger’s surveys, the customers believe the checkout speed has been much quicker since the installment of the cameras.

Kroger’s system, QueVision, which is now in about 95% of its stores, forecasts the length of time customers spend shopping based on the time and day as well as determines the number of lanes that need to be open. In addition, QueVision data shows the amount as well as type of items purchased by the times of day, and by adding more express lanes and boosting certain orders, Kroger has improved its operations as sales have increased by 13% in the past year.

Kroger’s goal is to please their customers so that they enjoy their entire experience so much that they will come back again and again. They are gradually improving the QueVision software system to predict shopping behavior and fix the checkout lanes procedure in order to get the shoppers out more quickly and make the checkout experience the best that it can be.

The most important way to create loyal customers is to understand their shopping trips and make them as personalized as possible so they will always come back. Making improvements is a continuous process. What other approaches could retailers take to better the overall shopping experience?

Article: http://finance.yahoo.com/news/krogers-weapon-infrared-cameras-011800830.html

 

Bidding for Luxury: A New Way to Fly?

Posted on by spr1333cshepherd

The allure of flying first class has clearly diminished in recent years, leaving Airlines scrambling for an initiative to maintain their organizational element of luxury. What has become of this growing issue is an interesting concept that will be implemented quite soon. Airlines have begun the transition to auctioning off business class seats, and not in the conventional manner of going to a Kiosk. According to the Wall Street Journal, “Bids for premium seats that otherwise might fly empty begin online weeks in advance and typically close 48 hours before takeoff.” These auctions are also applicable to other seating arrangements that may be more appealing to customers. Essentially, those seated in coach can upgrade to premium (if that option exists on the particular flight), and premium customers can bump themselves up to the elite business class. Plusgrade, the company responsible for designing the auctioning system, allow carriers to determine exactly how they will handle premium seat bidding, and which customers will be given the chance to participate. Rather than let many of these seats go unfilled and thus wasted, airlines are considering organizational efficiency in finding a way to get people to buy in. There is a strong correlation between overall economic certainty and luxurious commodities such as business class seating, and this relationship is evident in the statistics. Figures show a parallel decline in business class purchases and the economy, the former of which has yet to truly recover since the downturn.

The auctioning concept, which has yet to reach domestically, represents the quality management idea of reengineering, a portion of breakthrough improvement. The concept is considered radical redesign because it is a complete change of pace for the industry. In a time where most airlines seem to be ignoring the common customer’s needs in an attempt to cut costs, auctioning provides mutual benefits for both parties. Airlines can still charge insane face values for top tier seating, while giving the average customer an opportunity to experience first class. There is also the element of the unknown, and risk associated with an auction, which livens up a usually dull experience.

Airlines have taken a cautious approach to implementing auctions for seating, and have used a method quite similar to the Deming Cycle of Plan-Do-Study-Act. Rather than introduce the market to an idea this revolutionary in relation to the industry, many airline companies have done trial periods to gauge the level of consumer interest. After some successful trials in 2012 multiple companies, including El Al a popular Israeli airline, have introduced the concept in full in 2013.

I was once lucky enough to fly first class because of an error made by the airline company, and can say for certain that is an amazing experience. Still, the luxury associated with premium travel has declined in recent years, and for many it is frankly unattainable. By offering these unsold seats to others at a potentially discounted rate, it will hopefully introduce a whole new class of people to a whole new class of travel.

http://online.wsj.com/article/SB10001424127887323335404578442702374097108.html

http://www.learnvest.com/2013/04/would-you-wager-to-fly-first-class-123/

Is Outsourcing Really Decreasing Americans’ Jobs?

Posted on by spr1313gmyles

Over the last few years, the United States once hit rock bottom and suffered major economic difficulties forcing people to lose their homes and jobs. However very few companies did not feel the economic crisis due to outsourcing. The term outsourcing basically means a organizaton, business, and/or services no longer perform their business “in house”. The service, organization, and/or business is now located outside of those places. Companies usually transition to outsourcing to save money and/or to lessen the burden on having to pay United States taxes. What do I mean by saying companies wanting to save money by outsourcing? Paying wages here in the United States is very expensive compared to paying individuals overseas. For example, the state of Illinois minimum wage is currently $8.25, maybe even more for someone working in a manufacturer, however the same work that someone else is doing is payed about $5.00 for the same work and maybe even more labor than the United States worker. This differences can save major companies money and for this very reason is why most of them are starting to outsouce. One major company that I am sure everyone is familiar with is Apple. As you all know Apple have been around for many years in which making products such as iphones, computers, laptops, ipods, and so much more. Controversy have been spoken lately on how their workers that are producing these proudcts are working in poor conditions and are getting paid very little money. However recent articles have stated that ‘Cheap labor is not the only reason why they decide to outsouce. An article that was done by Casey Chan, mentioned that China(where Apple’s factory is located) has higher qualified engineers than the United States, futhermore China’s workers and factories are better than the United States. Taking those reasons into consideration as to why Apple choose to outsource, can you really blame this company for wanting better qualified engineers and/or wanting to better their company so they can continue to produce some of the best technology that almost every American has once purchased? Another problem that arise from oursourcing are the individauls that are layed-off due to the fact that factory jobs were starting to transition to outsourcing. The problem increasing because majority of factory jobs require very minimum training to get the job, but once a person is hired for the job, proper training takes place for that person to get the job down. On the other hand, once those same individals who were layed off trying to find a job can be extreme diffcult, which then those same individuals can not purchase as much goods and service anymore, which then are forcing these companies to outsource to save money and or break even for their services or products. Chapter 2 demeostrates reaons why “outsouring” or global is good. One reason was the it can increase strategies and assessment in a given country. Learning from other countries can greatly help others gain knowlege to increase their businesses and/or services.

Outsourcing will always remain. How do you feel about outsourcing? Does it really dismiss jobs or increase opportunities?

www.wisegeek.com/how-does-outsourcing-affect-the-us-economy.htm and gizmodo.com/…/why-apple-doesnt-make-the-iphone-in-america