8 Location Strategies

High Speed Internet is Probably None of Google’s Business

Posted on by spr1322njanszyn

There has been a lot of buzz surrounding Google’s new super speedy 1000+Mbps fiber optic internet service that has recently been introduced in Kansas City.  With Google actually delivering what they’ve promised to their customers, people are feeling optimistic about the future of American broadband speeds.  Internet service providers such as Comcast and AT&T are known for charging ridiculously high prices for bandwidth packages.  Consumers are tired of paying $60 per month for 20Mbps download speeds, and only getting 8.  So the question we are all asking is, “Why”?  Why are we paying so much, yet receiving so little?  The main issue is our second-rate infrastructure for truly high speed internet.  Countries such as Japan and South Korea offer services running at 150Mbps for $60 per month while ISPs in the United States are charging $90 to $150 per month for 50Mbps.  The lack of widespread broadband infrastructure in the United States leaves just 59% of Americans connected to broadband, while Iceland’s adoption rate is 83%.  The infrastructure that is most commonly used to deliver broadband (DSL) uses copper phone lines to deliver its data. The issue with using DSL via copper wire is that the internet speed decreases as the length of the connection increases.

The United States is slowly offering more and more fiber optic connections to consumers, but it’s still not nearly enough for the US to be a leader in broadband speeds.  With companies like AT&T and Comcast often giving customers less than what they pay for, Google decided that it was time to step in.  Now, again, we have to ask the question, “Why”?  Why does Google care so much about about Americans getting faster internet speeds, when they are not even in the infrastructure business?  Are they trying to enter this market as a long-term competitor, or are they simply trying to pressure other ISPs into offering their own customers faster internet?  Chances are, the latter.  Here’s why.  The majority of Google’s revenues comes from advertising.  In order for Google to continue increasing their ad revenue, more people need to have access to high speed internet.  The quicker that Google can show you their ads, the more revenue they’re going to earn.  Now, why would Google want to spend billions of dollars on their own fiber optic infrastructure, when they could have AT&T and Comcast spend the money instead?  They probably don’t.  What Google is doing by offering record setting high speed internet to places like Kansas City and eventually Austin, Texas and Provo, Utah, is putting pressure on the other ISPs to give their customers faster broadband speeds at a low price.

Is it possible that Google wants to run Google Fiber as a long-term business?  Sure.  But that doesn’t not mean Google is saying, “It’s our business”.  AT&T, Verizon, and Comcast are in the business of bearing the high cost of infrastructure renovation.  It doesn’t make much sense for Google to want to do the same, starting from ground-zero.

Sources:

http://investor.google.com/financial/tables.html

http://bits.blogs.nytimes.com/2009/03/10/the-broadband-gap-why-is-theirs-faster/

http://www.wired.com/business/2013/04/google-fiber-not-in-your-town/

New Honda, Perfect Fit or Flop?

Posted on by f1222rgitlevich

 

Honda is rolling out a car that is specifically targeted toward women. The new Honda Fit She’s is currently available only in the Japanese market. This new car comes in a “pretty-in-pink” and “eyeliner brown” color. The decision to offer the car in the Japanese market was based on the country’s more sex-defined roles. As much as half of all Japanese women stay out of the workforce and those women who do, there is more of a divide in tastes than one might find in Western countries. The car offers features that include a special UV-blocking window glass so that women concerned about their skin don’t have to worry about wrinkles while driving, as well as, a “plasmacluster” climate control system the maker claims can improve skin quality.

U.S. and European auto industries are hesitant to release the vehicle into their respective markets because previously when manufacturers tried to target products directly to women this proved an unfavorable outcome for the auto industry.  Automakers are not necessarily ignoring the needs of women. Both Ford and General Motors, among others makers, consider features and attributes of new products looking for ways appeal to women and avoid aspects that men would notice.

Before the auto industry releases this vehicle into the U.S. market they must understand their customers. Applying Quality Function Deployment, women customers do not want to be a singled out market. Women’s needs can be satisfied by including features where men and women both benefit; for example, providing larger storage space to put purses or briefcases, and including a UV-blocking window glass in all cars because men need protection against skin cancer too. Outside of Japan, women car buyers want to be treated like “one of the guys.”

http://lifeinc.today.com/_news/2012/10/26/14723981-honda-introduces-car-designed-just-for-women?lite

What sort of quality control should the U.S. adopt in order for this vehicle to be favorable among women? Do you think a car targeted toward women has the potential to be successful in the U.S.?

Taking Online Shopping Offline

Posted on by f1234erose
Online Shoppers who choose to forgo shipping chargers visit Walmart to pick up items ordered online.Link to NYTimes article “Luring Online Shoppers Offline”

Online shopping has caused retailers such as Macy’s, Best Buy, Sears and The Container Store to loose millions in sales. Consumers have had such a profound obsession with purchasing a product at the lowest price possible that almost every product sold at traditional retail stores is constantly being matched up with prices online. Currently, Best Buy is even going to the extent of customizing the bar codes on their products so they cannot be scanned by consumers so they are able to look up online prices from sites such as Amazon.

To avoid having in store sales reach an all time low, retailers are attempting to lure consumers into the store by promoting their own online operations on site. Walmart has made an effort to add Web return centers, pickup locations, free shipping outlets, payment booths, and drive-through customer service centers for online sales to appeal to the growing amount of online shoppers.

Retailers like Walmart believe that they could potentially have an advantage over their online retail competitors due to the fact that shopping offline eliminates the expensive shipping fees. Walmart gives customers a variety of options such as being able to order products from their online website and then being able to pick it up and pay for it at the store, thus appealing to customers who have a trend of preferring to pay cash for products.

From focusing on the cash option, Walmart has seen a dramatic rise in demand due to promoting online pickup at their stores, which now accounts for half their sales. As a whole, Walmart has the advantage of appealing to customers that do not have a bank account of credit cards. In addition, the in store pickup also appeals to consumers that favor to buy items in bulk that do not qualify for online purchases.

Fellow retailers of Walmart such as The Container Store and Sears have taken on site purchasing to a new level by promoting a drive-through service that allows for consumers  to get what they need on the go. This service has also seen great success because it appeals to the consumers who shop online because they do not have the time to navigate their way through the retail store to purchase the products they need. Recently, a new trend has shown that customers who used this pick up  service have caused them to visit 50% more than customers who regularly shop in the store.

The competition between traditional retailers and e-commerce companies will continue to exist, but the efforts made by the traditional retailers to keep up with online shopping have been greatly significant. With all the new bells and whistles added to their offline services, will retailers truly be able to take shopping offline for good?

Source: http://www.nytimes.com/2012/07/05/business/retailers-lure-online-shoppers-offline.html?_r=0

Pump the Brakes before Crashing into a Bankrupt US Subsidiary

Posted on by f1223aperry

 

The American auto industry has had more than its fair share of ups and downs in recent years, with General Motors particularly attracting public attention.  Companies targeting domestic vehicle sales land on two sides of the market share spectrum: the high end or the low end.  Considering that American car sales boast growth unseen in other international regions, this market seems like an ideal target.  However, gaining ground against sizeable and established competitors is no small feat and it shows that not all companies follow the old adage of not throwing good money after bad.   These businesses could be grappling with a number of obstacles, but above all, they cannot contend with the effects of the open global market.  A recent article in MarketWatch urges these floundering automakers to put an end to the delusion and exit the US.

Specifically mentioned in the article are Mitsubishi, Volvo, and American Suzuki.  It is not that these manufacturers, in their entirety, are poorly operated or produce subpar vehicles; the problem is that they will not survive as guppies in an industry of sharks.  To sell cars, a company needs a number of things: powerful marketing, public relations, an extensive dealer network, and most importantly, a well designed product.  The aforementioned brands don’t have these things and, without continued and substantial financial support from a parent, will try to tread water until they eventually drown.  Volvo is targeting a line already dominated by BMW, Lexus, and Mercedes, while Mitsubishi missed the move into the American market decades ago when its Japanese competitors started the initiative.

So when is it time to put an end to the optimistic, yet delusional, forecasts and bottomless pits of marketing and PR budgets?

 

Link to article: http://www.marketwatch.com/story/car-makers-that-might-as-well-back-out-of-us-2012-10-06?pagenumber=1

Home Depot Margins Higher Now Than Before Housing Crash – Thanks Logistics!

Posted on by kathrynb301s12
After over 30 years in business Home Depot admitted their supply chain processes were not a priority for many years. The main priority was expanding the business. When the housing market crash began in 2006 they knew they had to shift their focus. As Home Depot CEO Frank Blake explains, “A downturn is a terrible thing to waist.”

Most Home Depot stores are large warehouse stores with ample extra room for inventory and storage, but they began opening smaller stores in smaller markets that could not hold the same amount of inventory. This lead to stock-outs and unhappy customers. They realized it was time they completely changed their supply chain processes starting with centralizing operations by rebuilding their distribution process. Before 2006 only 30% of the orders were store-centric, while managers made 70% of the orders. The transportation model had its own similar shares of changes to be made. They started with the construction of 24 new rapid deployment centers located throughout the country, each would serve about 100 stores. These facilities were to be flow-through facilities for quick cross-docking and little storage. The RDCs allowed their products to be shipped with 24 hours of arrival now. Currently, one third of the RDCs are built and being used. Home Depot is already seeing the benefits.

It seems Home Depot may have chosen the perfect time for their restructuring because now that their new processes are beginning to run the housing improvement and construction markets are growing. Home depot’s margins increased 35%, net income for the fourth quarter increased 32%, and sales rose 6%. Ms. Tome, the chief financial officer of Home Depot, claims the restructuring of their supply chain processes is the reason for these large increases.

Home Depot is not only the leader in the improvement industry, but is the second largest retailer in the country, second to Wal-Mart. Can we expect to see greater growth as the last two thirds of their RDCs are implemented? How can other retailers learn from Home Depot’s changes?

http://topics.nytimes.com/top/news/business/companies/home_depot_inc/index.html

http://www.dcvelocity.com/articles/20090801verticalfocus/

Tracking employees? Is project management technology crossing the line?

Posted on by irinb598

I recently came across an article about Google’s newest product called “Maps Coordinate” which is an enhanced version of its regular Google Maps product; however, it can provide employers with the real-time record of worker locations.  Google presents the product as a tool to make companies more efficient by assigning work more effectively by location.  They will charge $15/month for the use of the map.  There are even features to monitor where employees are within an office setting.  The article shares a reaction from a gaming CEO who was horrified by the application.  He stated that companies should be more concerned about production levels and outcomes, rather than how employees are producing. However, while there are privacy settings that can make a person invisible after hours, it begs the question, would a technology like this really create more efficiency in project or operations management or does this technology cross the lines of privacy and ethical boundaries with employees?

My initial reaction is shock that a company would consider tracking their employees like this. Also, it makes me wonder how much technology is needed to be efficient versus technology becoming a distraction.  Additionally, what are the legal and ethical implications of a program that crosses the lines of privacy between employees’ personal (via mobile phone) and professional lives?  It appears to be a potential human resource concern. 

Technological advances will continue, but do we necessarily need all of them?  I can see a tracking tool like this to be useful for operations like a pizza delivery service or UPS service, where knowing the location of a person or product adds value to the customer and overall operational management; however, I think the issue of privacy and respect brings up ethical concerns as well.   According to a recent case I read regarding social media and human resource recruitment, there is evidence that people need some level of privacy in order to deal with stress and to maintain a level of control in their life, psychologically speaking.  When tracking employees through their phones, regardless of whether the company pays for them or not, I think it’s a violation of privacy and lack of respect.  There is the argument that people can turn their settings to “invisible,” but given how there is an increasing pressure to available at all times in our corporate culture, I can’t imagine that being “unavailable” will be accepted culturally.

Also, when working with people from different generations, it’s important to recognize the differences in how people prefer to work.  While the millennial workforce may not be concerned with their employer using a tracking tool, a baby boomer may be very uncomfortable and even allow it to adversely affect their level of productivity.  The lesson here may be that even though technological advances are available to use, there are times where project managers may need to reconsider if the tool will make them more efficient, or potentially hinder them from achieving their goals.

References:
NY Times, “Google Maps Where Your Workers Are”
Link:  http://bits.blogs.nytimes.com/2012/06/21/google-maps-the-worker-bees/

Kelley School of Business, Indiana Universary, “You’ve Been Tagged!”, Willaim P. Smith, Deborah Kidder

Cultural Awareness in a Global Market

Posted on by taylord301s12

       One of the most interesting courses I took in the preceding quarter was an economics based class concentrating on the effects, both negative and positive, of globalization. The outlooks on globalization were formed on the premise that, as a system, globalization is powerful and inevitable. As technology, communication and international trade continue to expand so to will global markets and it is becoming less and less of a possibility for nations to remain uninvolved in these global markets. It is with this acknowledgment that a balance must be struck between how systems of international trade and business interact with other nations, and how the system can strive to benefit the most nations and people possible, not just those that are most powerful.

       It is with the background in the course that I found our class discussion on global business strategies so fascinating. In the previous course we concentrated much more heavily on the negative impacts of globalization for less developed nations, and I realized I had studied a lot less the positive impacts it can have on businesses, particularly when they are implemented in a knowledgeable, culturally conscious way. We examined many of the reasons a business would be driven to globalize, including to reduce costs, improve their supply chain, provide higher quality goods and services, understand markets, improve operations, and attract global talent. While these are all excellent reasons for an industry to expand towards a more international outlook, I think there are specific ways that these developments can be done in the most culturally sensitive, beneficial way possible, which were also touched on in our class discussion.

        In a recent New York Times article, there is an interview conducted with the author of “All Business is Local: Why Place Matters More Than Ever in a Global, Virtual World.”http://economix.blogs.nytimes.com/2012/06/18/how-global-companies-take-aim-at-china/ He concentrates, specifically, on how global markets have directed business ventures towards trade and expansion within China. In one segment of his interview, he argues that are huge benefits to expanding industries being knowledgeable about how to localize their products depending on where they are being implemented. “What we argue is that all great global brands are also great local brands. McDonald’s, for example, adapts its menus and store designs, appoints local business people as franchisees, relies on local raw ingredients and talent, gives to local community organizations. In a large market like China, the upside profit potential of getting the formula right locally is very attractive relative to the extra costs of adaptation.”

       For a company to be successful and powerful in a global market, they need to be strategic and aware of where exactly they are trying to incorporate their product. Cultural awareness and tact are becoming increasingly more important, whether it be through communication strategies or foreign consumer advertising, it is always beneficial to be knowledgeable of the cultures you wish to open trade with. Do you agree that cultural influences are not only ethically important but also important from a business standpoint? If not, what should take precedence when concentrating on implementing a business into a global market?