Group 3

Trader Joe’s: Customer magnet?

Posted on by shahzaib30131f14

I always try my best to shop smartly when going to grocery stores. I try to pick up the cheapest brands and with good quality. While in college who would not want to save an extra buck? All the stores near DePaul are super expensive. At first it was Dominick’s and now its time for Whole Foods to run its monopoly. When I was living on campus, there was one place where I always use to get my groceries from, even if that meant walking an extra mile. And that place WAS ‘Trader Joes’. And here are the reasons why.

 

Many people criticize Trader Joe for its lack of variety but I feel that having a smaller store and fewer choices keeps consumers happy and also saves their time. Have you ever been to Target and seen the 40 different types of Jam and kept wondering which one should you go for? Well not at Trader’s joe.

 

Trader Joe pays its employees well or you can say well above the minimum wage level if you work for them for a longer period of time. Moreover, according to a report “TJ’s contributes 15.4% of employee’s salary to tax-deferred retirement accounts.”There is no questions as to why their employees are so happy and willing to help. Unlike, Walmart which not only pays its workers a minimum wage but also treats them poorly. There have been so many misconduct cases at Walmart which have made headlines all over the US.

 

TJ is not like any other departmental store. It aims to keeps its customers happy and meet their ever growing demand therefore it tries to open up locations by paying close attention to demographics like education, transport system available, nearby shopping stores etc.

In addition to this, TJ like keeping its food line simple also keeps its distribution simple. It buys directly from the manufacture cutting the cost and fees of the middlemen and therefore gives back to the community in terms of lower cost of the products. It also sells fresh produces on per unit basis rather than weight to simplify the checkout process.

According to Forbes article “TJ non-conventional culturally-tailored approach and attitude is one that is deeply embedded in the roots of their business model:  from their packaging, product selection, store layout and graphics, to their vendors, employees and management.  The Trader Joe’s brand is diversity on steroids.”

Do you agree that the TJ differentiates itself from its competitors only on the basis of cost or their are other factors that come to play?

Should customer satisfaction be a priority for any grocery/departmental stores or should they only focus on minimizing their cost ?

 

Work cited

http://www.cbsnews.com/news/10-secrets-to-trader-joes-success/

http://archive.fortune.com/2010/08/20/news/companies/inside_trader_joes_full_version.fortune/index.htm

 

http://archive.fortune.com/2010/08/20/news/companies/inside_trader_joes_full_version.fortune/index.html

 

Bad managing means no future managing

Posted on by florentino30133f14

In the summer of 2013, a group of friends and I experienced a horrible restaurant experience that will never leave our minds. After a long day of playing football with my friends on a Saturday, hunger struck us all. None of us had a certain craving s we drove around until we found something that seemed suitable. After about twenty minutes we found a nice looking restaurant in the Burbank area. When pulling up into the parking lot it seemed quite empty for a Saturday, but that didn’t stop us from trying to feed out hunger. We went in a got seated next to man on the phone that did not stop shouting at whoever was on the other end of the line. We waited about twelve minutes before a server attended us, a little weird at the moment because only about 25 percent of the restaurant was filled including us; we placed our orders and began talking about the rest of the plan for the day. I looked at my phone and 20 minutes passed without receiving anything, not even our drinks! At this point everyone was getting upset about the service and talked to our waiter about what’s taking so long. He mentioned they’re trying as best as they could and our food will be ready in no more than five minutes. Ten minutes have passed and that was the final straw, I got up to talked to our waiter and asked if we can cancel our order because service was just horrible. At that moment the man sitting next to us got up mentioned he was the manager and asked what was the problem? I could not believe that this guy was the manager; he was literally sitting next to us this whole time on his phone and not even bothered to make the service better. Anyways we discussed our problem with him and how the service was horrible, he just said “oh, well thanks for coming”, we left the restaurant angry that time was wasted and our stomachs still empty. So we went to our usual restaurant were the service is very much appreciated. What makes the restaurant so great is quick service and the manager often walks around and greets customers, creating a happy environment. The restaurant that had horrible service is no longer open for business, while our usual restaurant still gets packed every weekend. Being a manager that makes sure everyone is doing what they are supposed to being doing makes the business run better, being manager with no concerns means no future.
Do you think managers that have no concern about the customers, will have a successful future?

Six Sigma vs. Sports

Posted on by brenna30131f14
yudarvishpitches
(Click Image for Pitch)
Yu Darvish has nearly perfected his pitch delivery by treating each pitch as a process, evident by the same release point for each pitch.

We commonly associate Six Sigma and the DMAIC approach with improving the processes of manufacturing or certain service companies, but what about more unconventional industries? Professional Sports leagues are some of the largest businesses, yet they are hardly mentioned in regards to Six Sigma. Is it possible that athletes and coaches alike can use this quality management approach to improve their performances? Tennis star Steven Falk wrote “Six Sigma Tennis” where he explains how coaches and players can reach their maximum potential.  Falk analyzes a tennis player to find areas that can be improved using DMAIC. After the improvements, the player has minimized his unforced errors; thereby reaching his highest ability. Falk focuses on individual sports like tennis, where it is easy to identify success and failure based on points won or loss. However, the mainstream sports in America like football, basketball, etc. present a harder situation to use Six Sigma.

penspowerplay
(Click Image for Play)
The Pittsburgh Penguins have created the best power play in the NHL by treating each play as a process, reaching a high level of efficiency.

Focusing on hockey as an example, new statistical measures are being introduced to the game every season like Corsi and Fenwick now measuring puck possession.  At the core of each new stat introduced is a desire to improve a team’s performance. So why can’t Six Sigma be used along with Corsi or Fenwick for improvement?  Since Six Sigma results in 3.4 defects per million operations, essentially  a forward could expect to miss only 3.4 shots for every million he shoots. A goalie could expect to save all but 3.4 of a million shots he faces. Unfortunately, these two scenarios cannot coexist—exemplifying the issue with Six Sigma in sports.

While reaching the Six Sigma level of efficiency is nearly impossible in sports, DMAIC can still be applied to improve the process. Taking the hockey power play as an example—a time when the offense should be able to capitalize on its advantage—coaches can take each play as an individual process. First, they will define the weakness in the play, perhaps the lack of shots being taken. Then, experts can measure the amount of shots during the power play, and analyze it by comparing league averages and past results. Players improve the process by increasing the amount of shots taken, and control it by maintaining that shot level throughout the season.

Sports certainly can be subject to DMAIC application, but do they need to be? The most entertaining moments in sports and the traits that make them so appealing often center on the anticipation of what will happen next. With Six Sigma and DMAIC, there is less unknown. Every golf shot should be a hole in one, and every batter should hit a home run each pitch.  Gone would be the underdog victories or crazy upsets. Would near-perfect athletes be as entertaining? Even the Sidney Crosby and Tom Brady’s of the sports world make mistakes or bad plays. Perfect athletes throughout the leagues would be too predictable.

Do you think implementing this type of process control would change sports?

Should players and coaches actually take the time to improve their processes or is it dependent on the sport?

Sources: http://www.qimacros.com/lean-six-sigma-articles/six-sigma-sports/

http://www.siliconbeachtraining.co.uk/blog/six-sigma-sport-training

Starbucks – “We Love Our Customers A Latte.”

Posted on by jessica30131f14

Move over Pumpkin Spice Latte! There is a new drink in town…but wait, where is it? The signature Starbucks red cups are back, which can only mean one thing! The holidays are near. The holiday season for Starbucks is their most profitable  and busiest season. However, there was something missing from this festive time a year. The Eggnog Latte! A staple holiday drink for Starbucks since 1986 was not on the menu for this season. Which left more than just a few customers grumbling Bah Humbug.

6a00d8341c61d153ef0162fc1346b0970d-450wi.jpg

After almost 30 years of success, why was Starbucks pulling the hot seller off the menu? Starbucks spokeswoman Linda Mills said, “The chain initially kept the flavored coffee off this year to ‘optimize’ it for new offerings like Chestnut Praline.”

One loyal customer, 35-year-old firefighter, Travis Block just could not get into the holiday spirit without his Eggnog Latte. So he did was any person would do, he took to social media to protest. One tweet to Starbucks turned into to thousands more and plenty of retweets. Calls, emails and letters started overflowing the Starbucks headquarters, and an online petition even gained over 2500 signatures to bring the signature drink back! 

Starbucks clearly received the message and loves its customers “a latte” that it has agreed to bring back the Eggnog Latte this season. Mills has announced that the Eggnog Latte will start appearing in stores by November 17th. Starbucks apologized to its millions of customers saying, “We made a mistake. We are very sorry.” Starbucks learned its lesson, “Many customers have a very emotional connection to the holidays, and Starbucks is part of that tradition.”

However, quick adjustments to menus are not always easy to fix. Starbucks is now struggling to find enough eggnog from suppliers to bring the drink back to every store. With this being their busiest and most profitable time of the year Starbucks understands the urgency to get the drinks back in the hands of their loyal customers.

It seems as if Starbucks got too wrapped up in the excitement of their new holiday drink line, that they forgot what their customers really wanted.  One reason people choose Starbucks over other coffee chains are because they can customize their drink to their exact liking. Starbuck’s customers are not ones for change. Something Starbucks perhaps forgot about.

There is no doubt, Starbucks loves its customers, a latte, but they will need to improve on staying process focused and understanding what products their customers really want moving forward.

 

How could Starbuck’s have overlooked their customer’s love for the Eggnog Latte? The company has never had a problem like this before, so what do you think happened?

What could Starbucks have done to prevent this nightmare before Christmas from happening?

 

http://www.today.com/money/starbucks-brings-back-eggnog-latte-after-customer-protest-1D80271463

http://www.cnbc.com/id/102160234#.

Puppy Mills-Where Your Best Friend Really Comes From

Posted on by sora30131f14

Puppy mill dog in isolation after being rescued in 2011.

Puppy mills are horrible places where low budget facilities breed dogs strictly for profit. The dogs often suffer permanent damage from the unhealthy conditions and lack of socialization. Dogs have always been considered man’s best friend, starting as early as 15,000 years ago. In earlier times, dogs were chosen very selectively, based upon the health of the dog and whether the dog would be suitable for the lifestyles and environment the dog would be introduced to. However, many people are beginning to shy away from the idea of a quality, healthy dog and are beginning to buy their new best friend simply based upon appearance from the puppy mills. Since people are going to buy the cutest dog possible without knowing much about it, many pet store chains are taking advantage of this and display their dogs for everyone to see, knowing that someone will be suckered into buying a dog without even knowing anything about it. When someone sees one of those adorable puppies, it rarely ever crosses their minds where that puppy actually came from, and if they knew, they would be devastated.

Beginning in the post-World War I era, Midwestern farmers realized that they could easily make a profit by selling live dogs almost like a crop, by mass producing them with minimum cost in mind in order to make an enormous profit, which became the beginning of what is known as a puppy mill. A puppy mill doesn’t necessarily have a definition, however as defined by the ASPCA, a puppy mill is “a large-scale commercial dog breeding operation where profit is given priority over the well-being of the dogs.”

According to the American Pet Association, U.S. pet-ownership estimates that the average annual amount spend $213 by dog owners on routine veterinary visits. This clearly shows how much people spend a great amount of money for their dogs. Not only are the puppy mills making profit, but also our economy. Buyers do not really know where and how these puppies were raised. For instance, in the United States, there are an estimated ten thousand licensed and unlicensed puppy mills selling over two million puppies annually. Many people may think that the puppies they are buying from the local pet store was being given quality care, however in most cases it was living under the worst of conditions possible. In the United States, there are barely any requirements for puppy mills to uphold and there are also many loopholes, and their needs to be more provisions made in order to stop puppy mills from being able to abuse any more animals.

My question to the class:  What do you think about the Puppy Mills? It is creating profit to many places, but is it morally good?

 

https://www.petfinder.com/helping-pets/puppy-mills/prisoners-profit-puppy-mills/

https://www.aspca.org/fight-cruelty/puppy-mills/puppy-mill-faq

Corporate Powered Yoga

Posted on by david30133f14

As the demand for any product grows, a corporate powerhouse with efficient standardized processes seems to rise with it. Yoga, which began as an art for the spiritual or inward looking, has been no exception. Look at these numbers that show the growth of yoga in recent years (reported by Emily Ritter of ChannelSignal.com early this year).

Untitled

CorePower Yoga has capitalized on this growing trend. They have “corporatized” what was initially more of an art so people can accomplish a full workout in one yoga session. All classes include an abdominal workout section, many are heated so you can break a sweat, there are class options with weights, etc. The idea is you can do a 1-hour yoga workout that will cover cardio, strengthening, flexibility and finding your inner chi.

I have dabbled with yoga throughout the last few years to gain an advantage as a basketball player. The typical workouts basketball teams do are lifting, running and basketball practice, all mostly restricting flexibility. Yoga is unique in it focuses on increasing this very valuable flexibility. CorePower also adds weights and an abdominal section to many classes – even more benefits for an athlete like myself. Great, right? I wasn’t a fan.

The best yoga class session I ever had was one-on-one session in the heart of my workday with a really weird dude, Chad. I walked into what was supposed to be a group class session at Cat Financial to see I was the only employee who showed up. We began with a few simple poses so Chad could assess my flexibility and strength. What followed was a plethora of poses tailored specifically for me. Chad encouraged me to try new things or stay where I was based on how I feel. He talked me through the origins and purposes of different parts of the practice. There was no music and no heat like CorePower. Chad didn’t care if I stayed on my mat or followed exactly what he was saying. By the end of the session, I was flowing through my own combination of poses focusing inward. When I went back to work I felt refreshed, not just physically, but mentally too. Yoga with Chad was personalized, creative, an art, and the best yoga experience I’ve had.

CorePower Yoga created efficient standard operations to allow the optimal large-scale production, and this is usually viewed as a positive, but maybe it’s not always better. I learned through yoga that variability and personalization, even if inefficient on a large scale, could be preferred. Chad only had one student in his class because most people seeking out yoga will be led to a CorePower, not a freelance instructor. Maybe they would be better off if there was not a corporate in the way of them finding an artist.

My questions: Is large-scale operational efficiency brought by corporate powerhouses always a benefit to society? If not, where are other markets you see it as a disadvantage?

Dominating on Competitive Advantage

Posted on by leonel30131f14

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?

AT&T’s MISSED FORECASTS

Posted on by sunny30133f14

When we discussed forecasting in class, we learned that many businesses have their own approach to achieve their goals and they do so by setting a forecast. However, forecasting is just a prediction. It may or may not reach its outcome.
As the second largest cellular provider in the U.S., AT&T happens to miscalculate their forecasts, which sets them below their profit estimates. It is unfortunate that while AT&T decided to cut prices and provided promotions to their customers, it hurt them quite tremendously financially. AT&Ts projection for revenue growth was 5%, however in 2014 they did not meet these projections.  The result of not meeting the projections were because of a decrease installment plan sign-ups, which resulted in AT&T’s 2014 growth forecast to a range of 3-5 percent.

 

However, to offset this mistake, AT&T is coming up with new ways to earn more revenue such as providing home security and mobile Internet service for cars. These are just a few examples of the many the company has come up with so far.

 

Questions to think about:

 

Will AT&T eventually win back and meet their foretasted revenues if they go by what their existing plans are?

 

Sources:

 

http://www.bloomberg.com/news/2014-10-22/at-t-misses-estimates-cuts-forecast-amid-price-battle.html?cmpid=yhoo

 

 

The Chipotle of Pizza

Posted on by ryan30131f14

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?

—————————————————————————————————————

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

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

Path To Better Health

Posted on by marci30133f14

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?

 

 

http://www.myfoxchicago.com/story/26839572/cvs-tacks-tobacco-payment-to-prescription-network

http://www.cvshealth.com/about-us/our-purpose-building-bridge-better-health

http://www.mysuncoast.com/news/local/cvs-pulls-tobacco-products-off-the-shelves-one-month-early/article_2965e95e-33b0-11e4-a200-0017a43b2370.html