Microsoft…Disloyal to customers?

Everyone was anticipating the release of the Microsoft Surface until it happened and got very mixed reviews. While the tablet looked very attractive, thin and light, it seemed the software was weak. Along with this reviews came out saying the attractive thin keyboard that was also the protection cover for the tablet was very difficult to use because of the material. The Surface also came with apps, but not even close to the amount of apps the Apple iPad has. Though the Surface is coming out with many more apps in January, it seems the hype for this product has not lived up to par.

Many customers were excited about a tablet having the Windows software, but critics are saying the software is like a split personality. There is a desktop mode that is similar to Windows 7, and then a new tiles interface but you have to continue to switch between the two interfaces.

After all of this, Microsoft got Oprah Winfrey to endorse the Microsoft Surface as one of the most desirable things. Companies get endorsers all the time to help out their products, but with all of the negative reviews do you think it is ethical that Microsoft got such a highly valued endorser when there are still many things to fix about their product? After Oprah Winfrey claims the Surface to be one of the most desirable things, many people who value her word will go and purchase this item without even thinking to look at the reviews.

And if Microsoft knows having Oprah Winfrey as an endorser will cause their sales to go up, when they still need to make the product a lot more user friendly, are they being smart for their business? Or is Microsoft being disloyal in a sense to their customers?

American Airlines Expanding…

I’m sure we can all remember a time when American Airlines was going bankrupt and their stock was worth close to nothing.  It has been about ten years now since then and they have continued to grow as a company.  During the past ten years American Airlines used bankruptcy protect to cut costs and allowed almost all of their flying from only five U.S. cities.  This type of management strategy allowed them to survive after September 11th and throughout this decade.  Now, at O’Hare, they have their own terminal for domestic and international departures and international arrivals.  It’s almost hard to imagine they have come this far.

Since they will be exiting bankruptcy protection, they decided to come up with a new management strategy to deal with the upcoming costs and exit bankruptcy.  Even though American has a market leading position on flights between U.S. and Latin America, they need to focus on their weakness with continental Europe and Asia.  They have introduced new flights to Germany, South Korea, and Peru.  Their flight to Germany will be from Chicago to Dusseldorf.  They also plan on introducing some new domestic services (Nicas).  American believes this strategy will increase their departures by 20% over the next five years while they try and exit bankruptcy.

American’s C.C.O. said, “An underlying foundation of the business plan has been to diversify our portfolio of flying and increase our mix of international flying” (Wall Street Journal).  I personally couldn’t agree more with this statement and if I was looking to do this, I would start with the weakest parts of my management strategy.  I would search for the gaps in my market and do whatever I could to bridge those gaps for my consumers.  That seems like the smartest plan to me.  I have begun to wonder if it will cost as much as a regular flight or if they will be trying a new competitive angle.

Do you think the American Airline’s expansion to continental Europe and Asia is a smart management strategy?  How will the addition of these new services affect the price of tickets in the future?



Wait, IBM is the Greenest company in the US?!

Yes folks, it is true. IBM has been recognized for the second year in a row, as the Greenest company in the US, by Newsweek’s Green Rankings Survey. Out of 500 US companies being Surveyed, IBM came out on top.

“Environmental sustainability benefits our clients, our company and the planet, and we are constantly striving for continual improvement,” said Wayne Balta, IBM’s Vice President of Corporate Environmental Affairs and Product Safety.

The criteria included: their environmental impact, environmental management and sustainability disclosure.    IBM definitely earned the number 1 spot due to their forward thinking initiative: Smarter Planet. It highlights how forward thinking leaders in Business can use smarter systems to achieve greater economic growth and sustainability. IBM suggests that if corporations can improve on creating greener buildings, use smart grids, use better water management systems, and find better ways to tackle traffic congestion, we will have a smarter planet. IBM  measures and reduces resource consumption for it’s clients in order to help them save the environment and their money. IBM is now providing better management systems and technology to other firms to encourage  “being green”. According to the Newsweek Survey, “At its Zurich lab, water that cools a supercomputer is used to warm nearby buildings”. IBM executives are doing interviews, speeches, and getting the word out on their forward thinking opportunities.

There is a lot that is bugging me about this whole Smarter Planet concept. First of all, does IBM actually want to improve the planet, or is it just trying to use all this marketing and publicity to silence stakeholders that are adamant on IBM being a socially responsible entity? Also, do you all think that the “Smarter Planet” concept will really raise awareness and make a difference for many companies or do you think it will fade away after it’s 15 minutes of fame? Thoughts?





How Could Obama’s Re-Election Affect The Country’s Largest Inventories?

Did you follow the election closely? It seems like everybody in Chicago has been fascinated by the election this week. It is interesting to be a student during a presidential election year. Regardless of your major it is interesting to be a student during a presidential election year. You get to see how topics in your classes directly relate to different stances taken by the candidates. Four years ago it was widely discussed that one of the biggest reasons that Obama won was due to the fact that he was able to capture a good majority of the student vote.  Students around the country are one of the biggest groups that are able to influence an election outcome. Through our experiences at DePaul in classes such as this one we can connect election issues to how they relate to real world topics.

I want to discuss one of the ways that Obama’s reelection directly relates to one of the United States biggest commodity inventories. This inventory being our coal supply.  Also we can take a look at how the outcome of this scenario might change had Romney been elected. As many of you who may have followed the election already know energy was a big topic in this year’s election.  The Democratic Party has taken a stance of heavily supporting new energy sources that are cleaner. These sources include natural gas as well as other renewable sources like solar energy. The Republicans on the other hand believe that instead of spending money on new sources of energy we should first exhaust old sources such as coal and new oil reserves.

Why does this matter and how does it relate to Management? Now that Obama was reelected coal companies have prepared for a downturn in business. They are foreseeing government friendly contracts and laws go in favor of new energy type resources. As a direct result they have started producing less coal and will be keeping less of a supply on hand for the coming years. As we have discussed in class there are many factors that can influence an organization’s inventory. Normally these factors have to do with a consumer at the retail level that buys a product. Also companies normally look at a variety of factors that will help them determine what level of inventory to stock. It is interesting to see that at a macro level for a major U.S commodity sometimes this is not the case. In this case the presidential election was the only factor that caused companies to reduce their inventory levels drastically. This is an interesting connection to make because one would think that U.S. commodity inventories are normally more complex than U.S. retail levels in regards to decision making. Although this seems like a dry topic I’m about to tell you why this is so interesting. For business students who understand this relationship there was a lot of money to be made in trading coal stocks before the election.  Coal stocks reacted to the possibility that Romney could be elected and coal supplies could be increased in the U.S. This speculation in the market up until the election caused some companies to increase almost 200% in a matter of weeks. An understanding of this concept could have netted investors nice profits for the year by looking at a basic management concept.

Hungry? Serving up the Supply Chain


Last week, my family and I went to Red Lobster for dinner. I was struck at how efficient they were with everyone playing a different role in the restaurant. I noticed that after every order the servers would go to a computer section to input in the orders at the different tables. I have never given it much thought, but I realized then that that was how the restaurant uses to keep track of its inventories (food or drinks). My sister ordered a lobster, which she asked the server if she could pick it. This got me thinking that the restaurant needed to have an excellent inventory management system and supply chain in order to keep up with orders such as my little sister (you cannot have lobster fresh all year round–and live ones too). So what keep Red Lobster going?

Red lobster is one of the chains of the largest casual-dining company, Darden Restaurants Inc. (“Darden”), in the United States. In the article, the management team at Darden is working to continue its competitive advantage by implementing an automation system on the supply chain. I don’t know how extensive this system is, but Darden believes that the benefits will justify the cost for it. And I think they have a reason to be since they have been an innovator in its industry by having a competitive in its supply chain. The article also mentions that Darden has plans to open a lobster farm in Malaysia among its fish farms throughout the world. This would mean that the company would have more control on the quantity as well as the quality of the lobsters coming in to its restaurants. Furthermore, with the inventory management system at its restaurants, the company would be able to measure how much inventory (food like fishes or lobsters) to each location just as demanded.

Questions to consider: Have you ever been to one of Darden’s chain restaurants? How do you feel? Does the supply chain system that Darden has in place surprise you? How do you feel about Darden being the “McDonald’s” in casual dining? Does Darden have a comparative advantage over its competitors? How so?

10 things Apple definitely doesn’t want you to know.

To start off, we all know that apple is quite the success story.  They have new products that are sleek, in high demand, and create great marketing schemes for their items.  However, with every great company, there are always some issues.  I will touch on some of those issues that I discovered in an article online from Market Watch.  First, apple customers are worn out.  The excitement over the first iPhone or iPad has introduced “upgrade fatigue” where customers are upset about the overwhelming influx of newer models.  According to this article, when people buy Apple’s latest product, the company is usually already preparing its replacement, said technology consultant Patchen Barrs, who has owned 25 Apple products over the past 20 years.  Patchen goes on to say: “Everything we buy from them is already out of date”  Since 2001, there have been six iPods, two iPod minis, six iPod Nanos, four iPod Shuffles and four editions of the iPod Touch.  Apple has released five iPhone models since 2007 and has had three iPads since 2010.  With these many new releases I feel as though customers will get tired of what “new” product or upgrade is available.  Second, these apps are misleading.  These games are available in the App Store and referred to as “freemium.”  They’re free to play, but only for a certain amount of time or before reaching a certain level, says Damon Brown, author of several books on tech culture.  Third, apple is getting in the way.  There are several theories about why people can’t put their iPhone down. “Apple’s products are addictive,” says Larry Rosen, author of “iDisorder: Understanding Our Obsession with Technology and Overcoming Its Hold on Us.” In fact, many users are aware of their attachment to their iPhones. Some 25% of people see their iPhone as “dangerously alluring” and 41% said losing their iPhone would be “a tragedy,” according to a 2010 Stanford University poll.  Fourth, customers spend more with apple devices.  The average iPhone owner, for example, spends over 10% more on their monthly bills than other pre-paid smartphone users—$90 versus $81—according to estimates by Morningstar analyst Michael Hodel.  Fifth, apple needs another “game changing” gadget.   It’s time for Apple to shake up the mobile market again, says Walt Piecyk, technology analyst with BTIG brokerage. He says a completely new Apple phone that costs less than the $649 starting retail price for the iPhone 4S would be a good start. Sixth, the iPhone is overpriced.  This is basically a continuation of the last point.  In short, they need to offer a more affordable mobile device.  The seventh point touches on how children wanting the products makes the adults want them and visa-verse. The eighth point talks about how apples features are falling behind, i.e. android offers bigger screens, etc.  The ninth and tenth points go hand in hand.  They touch on hooking the consumer for a life time customer and that apple assumes  the customer will stay loyal even if apple screws up a product.



Handling Cut Costs

One operations strategy is to reduce manufacturing costs and increase sales. This strategy does make businesses profitable but is there a more profitable strategy? Does reducing costs of production have effects on quality?

Quality is important to consumers and reducing costs of production can impact the quality of the product. Whether changing some raw materials for better priced materials, or changing the process of production to be more cost efficient there can carry such a negative effect on the quality of the good or service that the good or service is no longer required. There is a way for a company to benefit from this negative effect.

Operations Managers can increase profitability by selling the new products to developing countries that could use the products. The reason a company could have more dramatically changing markets is that there is minimal competition and quite a lot of demand for products that are more affordable.

There is a solution for Operations Managers to resolve the issue reducing costs will have in the goodness to cost ratio. The problem with improving the ratio is there is far more cost to find the technology that makes a better quality product. Instead, it can be in the company’s best interest to reduce cost and slightly reducing the quality. According to an article found in Business Week called, “A Race to the Top”, written by Mike Shipulski, focusing on the cost to goodness ratio can be the better strategy.

The best way to carry out this strategy is in product design. Shipulski writes, “Immature technologies have improved goodness-to-cost ratios (that’s why we like them), but their output is low. But when a product is designed to require less output, previously immature technologies become viable. Sure, there’s a little less goodness, but the cost structure is far less – just right for the developing world”. High cost and low output is not profitable. However; by reducing costs and product quality, there must be a new market to desire the product. Developing nations are the perfect consumers for these new goods.

This article relates to what we are learning in our Operations Management class because this article shows light on to the benefits of globalization and a way to handle the decrease in quality when Operations Managers decide to cut costs.



iPad Mini, just one of the newest additions to the Apple familyT


The iPad Mini just came out this weekend and as always they had a line waiting outside the door. It is sold for around $329 in stores all around. According to, it takes only $188 dollars to manufacture. I found this really interesting because it got me thinking of how much money  they can make off every product. There are differneces between how much it takes to make a 16 gb compared to the 32 gb and 64 gb iPads. It costs another $80 dollars for the iPads with more memory in them. They also sell for $429 for the 32gb and $529 for the 64gb.

The iPad Mini looks great, but is it worth buying is what I have been thinking about. Apple has been known for their superior products and are leading their competitors which is the Google Nexus, Amazon Kindle, and the new Microsoft Surface. I think the product will do very well in today’s market because Apple has a reputation of having great products.  Only Apple has come out with a product of their tablet and making a miniature version of it. I think it is a good idea, but the question is, will it sell to their expectations? They are selling their product over $100 dollars more than their competition, and Apple assumes they can do so because you pay more for quality and a credible name. I believe thats why they are charging a significant amount more than other competitors, but they can do so, don’t you think?

It is unbelievable on how much money Apple is making off of their products. The come out with something new throughout the year every year. They have expanded since they started in ’76 and keep on expanding. The net worth of Apple a decade ago was $10 billion and the net worth as of 2012 is close to $500 billions dollars. It is crazy  to think of all that they have done in the last 10 years. I feel as though Apple is just getting bigger, they have not peaked and are still in their prime. They are going to have many new products coming out, and for now, it is the iPad Mini

Would you guys feel about the iPad Mini? Do you think you will consider buying it at any time? How do you feel about Apple and their expansion into one of the greatest companies in history?$188-to-build-teardown-reveals/

ISO gives NEI a big WIN

The NEI company just announced that they achieved the ISO 13485:2003 Medical Device Quality Management System certification for their main facility in Texas. The ISO 13485:2003 is to “facilitate harmonized medical device regulatory requirements for quality management systems, and its requirements are unique to organizations building medical devices”. The company is already ISO 9001:2008 certified.

NEI is a global leader in providing application platforms, development solutions and lifecycle support services for software developers. The article mainly examines the high standards that they set for their medical software devices and services. They play a huge role in IT software service to the healthcare industry all over the world.

In order for NEI to receive this certification, they had to develop and then implement quality management policies for medical devices. The standard for the ISO 13485:2003 requires any company to consistently provide medical devices that meet the customer and the regulatory requirements. In the article, it seemed as though NEI welcomed audits and management evaluations because they work with medical devices. John Gauthier, the director of quality assurance at NEI said, “NEI recognizes the strict parameters and regulatory requirements involved in medical device manufacturing and has developed rigorous practices in support of those metrics”.

The IT standards that NEI sets for the healthcare industry is important. I believe that they should be keeping those standards high because of what industry they are in.  They also seem to take pride in their standard of quality, which must mean that it is excellent. Those medical devices that they create should have high quality because will essentially be used in dealing with people’s lives.  It is said in the article that they intensely listen to their customer base so that they can keep improving and changing with the times. This kind of close attention to detail will benefit NEI in the  future because their customers know that they can count on them to maintain the best quality management.

The link to the article as well as a link to NEI’s website is below:

Shell or Shock? Possible Redesign of Toyota Prius

Toyota Motor Company is considering a complete redesign of its iconic economy car, the Prius. After 15 years in production, with only very subtle design changes as seen in the design evolution pictures below. It would be a big risk for Toyota to drastically change the proven design of the Prius, but it could also open it to a large new consumer base. Since its original debut in 1997, the Prius has epitomized the movement towards environmentally friendly hybrid vehicles that run on both gasoline and electricity. The Prius has experienced record sales in 2012, with sales increasing 60 percent over last year.  The main driving factor for the possible shift to a new design is to move away from the awkward shell type platform that has reigned since its initial debut. Although the shell is an incredibly aerodynamic style, it has traditionally been seen as something of a “geek mobile” and was often ostracized by most car enthusiasts.  By shifting to a more generally appreciated design, Toyota would see its target market grow substantially, since most car buyers are always looking for the best mix of fuel economy and design appeal.

It is slightly surprising that Toyota is considering such a drastic redesign, since it is currently in the growth stage of the product life cycle. As stated in class, the growth stage is when a manufacturer needs to focus on competitive product improvements, which are needed to help it stay current with the recent  introduction of new competitors such as Ford, and the continuing rivalry with Honda. However, Toyota Prius has managed to follow one characteristic of  the  product life cycle, and that is to enhance distribution and capacity. It has managed to increase capacity from only a few thousand units in its initial introduction, to nearly 700,000 through only the first 9 months of this year. By designing a new generation of Prius to appeal to more style conscious consumers, Toyota may end up gouging its current market, since many of the current buyers appreciate the iconic shell shape. At this point it is impossible to predict the exact fate of the Prius, since the new design has yet to be finalized. However the question arises of what possible design attributes can Toyota maintain from the current model to retain current customers, and what can they change to help attract new buyers?