Bigger than Chinese New Year

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

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

But in China, they are celebrating Singles Day.

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

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

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

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

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

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

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

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

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

Path To Better Health

When was the last time you went to a CVS? Did you notice any products removed from the shelves within the past few months?

Over the past year, CVS made the decision to remove all tobacco products off of their shelves, which was implemented this past September. They changed their corporate name from CVS Pharmacy to CVS Health, and launched a new campaign to help millions of Americans quit smoking. Their purpose in their mission statement is to “help people on their path to better health”.

CVS Health Logo

Along with removing all tobacco products from their shelves to be a positive health influence to our society, CVS is also planning a co-pay on prescription medications when medications are purchased from stores that still sell tobacco.

As we learned in class, new services generate substantial revenue. CVS currently insures over 65 million people. This new campaign of promoting a healthy tobacco-free lifestyle can generate a substantial amount of new business for CVS.

Another topic we learned about in class is service design. A part of service design is improving the relationship with service providers and customers and to develop value and trust within a service. CVS is taking a stance for positive health, and that CVS cares about their customers health.

As a part of their new plan, CVS is also going to offer prescriptions at a better price if you purchase it from a tobacco free pharmacy.

With healthcare costs rising, companies and clients are often found looking to save some money. With CVS planning to offer lower costs to clients on prescription if bought at a tobacco free store, this could drive in more business.

Another idea demonstrated in class is goods and services selection. This is the basis for an organizations existence, and with new products coming out, it can bring in a lot of revenue. Since the company announced that they will be tobacco free, their shares of CVS healthcare have advanced about 25%. This new plan could create additional revenue by keeping existing clients and adding more clients who may want to save money on prescriptions. They are already the nations second largest drugstore chain, and when the tobacco free plan is fully implemented, it could drive additional revenue.

Based on the first step of their plan to remove all tobacco products from their stores, it increased their shares by about 25%. I believe this will increase their revenue when the full plan is executed. Especially with the discounts they are going to offer, I believe that it will increase their sales because people are always looking to save money.

Some questions to think about:

  1. Are you more likely to invest in this company after hearing about the new campaign they are launching?
  2. Do you think this will cause other pharmaceutical companies and drug store chains to go tobacco free and promote a healthy lifestyle?
  3. Are you more likely to purchase medications at CVS to save money on prescriptions?