Wrong CEO, Crazy Damages!

Wrong CEO, Crazy Damages!

Someone might think that a big company might have all the resources and very intelligent people working because they can afford to do so. In addition, those people will make the right decisions to improve the quality of work and increase the profit in the long run. J.C. Penny is one of the big companies that with one critical decision they lost almost a billion dollar. The hired the wrong person, which lead to critical changes that did not work out in the favor of J.C. Penny and increasing their profits. When Ron Johnson was announced as the new CEO of J.C. Penny the stock prices was $34 and within 2 years, the current stock price is at $14. The reason behind such a dramatic change is the structure of J.C. Penny. The CEO made changes to update the entire store and eliminate the coupons. Johnson did not pivot the idea that start off small and once people accepted the change and wanted that change increase though out the nation. Johnson took a big leap and caused J.C.Penny’s regular customers to look elsewhere for their purchasing needs.

Myron Ullman who was the CEO before Johnson had agreed to go back to and reverse the changes implemented by Johnon. He has agreed to stay until J.C. Penny has the right CEO. The changes made by Johnson eliminated the middle-market customers, which where their target market. Even though someone might think that updating the store and keeping a low price while eliminating coupon will cause more people to come is not necessarily true. Ideally, any idea sounds good but pivoting the idea is to make changes without losing a lot of money. Ulllman’s plan is to change things back and bring back the lost customers what where their target market but getting someone to come back after they have lost the trust is somewhat hard. Ullman has the niche to fix things, which he has done before and J.C. Penny is counting on him to bring back the people and profit into the stores again. His biggest challenge will be to remind the customers that what J.C. Penny was before and nothing has changed.

Quality of management makes a huge difference in the success of any company. Being in this state and losing a lot of money is very critical for J.C. Penny. If they continue to do so they will soon have to declare bankruptcy and that is a whole other situation. Being in economic crises right now and extreme competition from places like Macy’s and Kohl’s’ it will be hard to J.C. Penny to gain the customers because the rivals are trying to take up as much market has they can of lost customers. J.C. Penny is at a critical position right now; the question now remains whether they will be able to reverse the damage.

Do you think the J.C. Penny will gain its customers back and be able to create profit that they use to?


Fiat’s New Deal

Fiat Industrial, a division of Fiat specializing in trucks and construction/agricultural equipment has announced a change in management structure to help the transition of acquiring a new subsidiary, CNH Global (agricultural equipment maker).

The new structure will emphasize brands and brand awareness, in addition to region by region operations. The adoption strategy will be similar to when Fiat acquired the American car company Chrysler in 2011.

While negotiations of the acquisition are still in progress, Fiat Chairman Sergio Marchionne is confident they will succeed, however expensive it may be. While this may briefly take a toll on the company’s overall revenue and income, its assets will increase with the purchase of a new division. Since CNH Global is a company with nearly $20 Billion in revenue yearly and business in over 150 countries, the deal should turn out to benefit Fiat in the end.



In addition to acquiring CNH Global to bolster Fiat Industrial, Marchionne has announced that Alfredo Altavilla will take over operations in an attempt to turn around Chrysler Group LLC, the failing American car company that is 58.5% owned by Fiat. in addition to American sales, Fiat announced it will be focusing on returning Chrysler’s market presence in Europe, the Middle East and Africa as well.

In the next two years, due to the aforementioned acquisitions and the attempted turnaround of Chrysler, Fiat expects to lose money. As a result they are turning to innovation to differentiate themselves. They plan to introduce 19 new models in the next four years including a Jeep compact car. Also, they are making efficiency a priority in their Italian factories they feel are under performing. By renovating and innovating they are attempting to stop the tide of losing money Chrysler faced due to the American economic crisis of recent years. Making a Jeep compact and over half a dozen new Alfa Romeos and Maseratis is going to push Fiat’s products into new market segments that will bring them more customers and greater revenue. Maximizing efficiency of existing processes, in addition to reducing costs and raising output, may have the added benefit of improved products, which could help them to retain customers better.

Additionally, visionary leader Marchionne has approached leaders of American car company General Motors and French car company Peugeot with an idea of combining forces to take over Volkswagen’s dominance of the European automobile market.  However, it is unclear if such a deal would ever take place, especially considering that both GM and Peugeot have taken bailout money from their respective governments in recent years, weakening their financial position.






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A Race Against the Clock, Again, in Package Delivery

In this day in age, technology has allowed people to do this in unbeatable times. With the iPhone you can instantly download and start using an app within seconds. People expect things to be done correctly and instantly. People expect to have access to items within minutes not days. Delivery services are trying to keep up with people’s high demand in quick delivery services. Customers are able to purchases items online in mere meets, but are obligated to wait days to see their new purchases. Companies like Kozmo have attempted to shorten the delivery times, but have failed in doing so. The United States Postal Service has decided to take on this challenge.

The USPS has decided to experiment in same day delivery of online orders within San Francisco. This new type of delivery will be called Metro Post. The way Metro Post will work is that it will pick up goods ordered online from participating retails in the city before 2pm and plans to delivery to homes from 4pm to 8pm. In order for this to be successful, the United States Postal Service Metro Post packages will go through a different processing center by being directly passed between Post Service employees. A flat rate will be charged for any packages less than twenty-five pounds, but the pricing has yet to be released.


The USPS is hoping that this faster type of delivery will bring in more income. Other companies have already developed fast delivery options. Last Month, Wal-Mart announced that it will do same day delivery orders in a few cities. In addition, in lower Manhattan Urban Fetch showcases over 10,000 products that can be delivered within an hour. There is no delivery fee from Urban Fetch as long as the order is over $100.  Recent news has shared the United States Postal Service has been experiencing troubling times. Their finances have gone from bad to worse.


In class, we have discussed the important of customer satisfaction as well as quality. While faster delivery options would appeal to more clients, it’s important to still provide quality products. When things are rushed, more accidents tend to occur. I’m curious to see if USPS will be able to provide fast delivery that is accurate. When packages are being delivered, they are jostled around. It’s essential that USPS remembers to not only deliver products in a timely manner, but to still deliver them in one piece. Do you think people are becoming too impatient? Do you feel that same day delivery will provide quality work? What suggestions would you give the United States Postal Service in order to make same day delivery be successful? Is there a type of inspection process that would beneficial to the United States Postal Service?



Windows Phone 8

Microsoft new windows phone 8 offers a lot of improvements from the previous windows phone 7. New much-needed tweaks and snazzy new features that rival those on the iPhone or most popular Android devices. The analysts think that Windows Phone will overtake Apple’s iPhone by 2016, gaining 19.2% of the market How can Microsoft’s catch up to the industry’s hares? With strong hardware partnerships, relentless marketing and tight ties to Microsoft’s more successful brands, including Skype and Microsoft Office. Microsoft Phones will be available on Verizon’s network for the first time. Windows biggest boost might be the new Microsoft ecosystem which could make the very similar Windows Phone 8 a more attractive item. Microsoft is building an ecosystem of gadgets that play nicely with one another.

Microsoft has gone through an improvement on their phones similar to the one of Quality Systems of Six Sigma. Microsoft has contributed to enhance the organization performance. They had to define the problem which was that their phones were not competing with the competition. They analyzed the problem, found out what was the problem and why their product was not on the same level as the competition. Microsoft measured their current process, they came up with a new goal. The company then began to implement solution that would address the problem. After doing their research and a lot of collected data Microsoft has come out with the new Windows Phone 8 which they believe has a much better chance to compete with the competition.

Do you think the Windows Phone 8 will in fact be able to compete with Apple and the Android and if it does by when do you think this could happen?



Moreno’s Liquors: Leading for a new generation

When it comes to effective leadership no one company can truly say that they have the all in one fix it tool. But then again every company has different goals and strategic plans to reach those goals. So how does this relate to Moreno’s Liquors? Or better yet, how does this company show effective leadership?

For more than thirty five years Moreno’s liquors has been a staple of the Little Village community, catering to one of the largest growing latino populations in the country.  Since its birth in the mid 70’s, Moreno’s has always strived to be the best in what they do with a mission statement that quotes to “bring only the finest and best priced liquors to the consumer, where we believe that it is the customer that knows best.”  Making sure that each and every worker at Moreno’s is well versed in the variety of products carried, the family run business believed that creating a focus in customer service was the key to running a successful business.  

Although the bushiness had maid a foot hold in the local neighborhood, back in early 2010 sales fluctuated with bigger stores such as Binny’s and Costco literally cornering the market with prices hard to match. With Binny’s sales just under $10,000 a day, and a market shift from liquor to beer, more than 15% of small liquor stores closed from 2010 to 2012 within the chicago land area. So how does one compete in a flooded market?  Moreno’s quickly changed its strategic plan, by first focusing on who are there customer base, and what is uniquely different about there store? Being the largest distributor of tequila in the midwest, Moreno’s quickly realized that there focus was not on having the lowest prices on the block but rather having the rarest products in Chicago. Not only was the company devoted to building customer relationships, but wanted to show this by having customer driven quality products. In this case they noticed a need for obscure and unique products, not just solely based on tequila but also through cognac’s, brandy’s, mezcal’s and the fast growing demand for micro-brews. Realizing that products alone would not be enough, Mike Moreno and son came up with a strategic plan for the future of the company. In an age where the internet is growing faster than anyone could imagine, Moreno’s understood the vast potential of the virtually untapped internet liquor market. Currently under development the company plans to have a fully functional website with a list of all there main product by the end of november this year. They also are in the works of getting the proper licensing in order to turn the site into a e-commerce site that focuses on bringing rare and unique products to connoisseurs throughout the united states.

So my question for you is, do you think a market plan such as this will work successfully? Do you see a demand or even potential for buying liquor online?


Quality And Innovation – The Rat Race!!!

The electronics world has changed rapidly in the last few years. Some companies pioneered the changes, while others were too slow to adapt to the fast changing trends and requirements. Not long ago, Japanese companies ruled the market like lions in the jungle. Companies like sharp, Sony, Panasonic and Nintendo were the biggest and unbeatable brands in the entire industry. Now, on the contrary these market kings have lost their market share drastically.

What could be the reason behind their downfall? I have noticed a similar trend in Japanese companies and in someway have the same characteristics. However, these well known companies still follow the highest quality standards and produce highest-quality hardware devices. But the market demand now is not limited to quality only. Japanese companies were slow to catch with competitors with regards to design, operating system and software technology. For instance: Sony was the market king in 1990 when it introduced ‘The Walkman’. At one time, was the ‘must have’ gadget for everyone like the apple iPods currently.  Just in a couple of years Apple managed to shake off and challenge Sony’s position in the market with their IPhones and iPods. Sony’s fell, profits shrunk and once one of the best image in the world is battered.

I believe the major downfall of Japanese brands is due to the fact that they were slow to realize the changing demands and the need to improve software rather than only focus on quality hardware.  From a technological perspective, the explanation of how that happened is straightforward and that apple always was, is very good at software and Sony never was. Sony understood music technology but they were bad at software and they didn’t do what apple did. That is making use of computers and Internet. They created ITunes which made accessing and syncing music to apple devices easily. The Walkman was a success in their era when it did not have to interact with computers.

As discussed in class, acquiring Six Sigma, ISO or other quality certification does not guarantee profits. These methodologies are used to help businesses reduce failures in quality. Talking about Sony, they also had obtained certification under ISO 9001 for all sites manufacturing electronic products yet faced backlash from competing brands. Fast pace dynamic fulfillment of consumer market should be a big factor of management department to maintain the success of a company. Big portion of company’s budget should be allocated for R&D while maintaining the quality of their current successful products.

Do you agree that Sony was too slow to adapt to the fast changing trends?

PS: I think Apple is also slowing down its innovation pace. Watch the video and share your viewshttp://www.youtube.com/watch?v=RyWSEwKPo8s

Is Apple losing its mojo?

Apple has been at the top of its game for over ten years now. Apple has had great success with its invention and especially with the Iphone. The Iphone was the top selling phone each year that it came out.  Even though it’s been the top selling phone for years, Google’s Android platform is starting to make its way up. According to recent polls and editorials, the Iphone is starting to slip away and more people are starting to prefer Google’s Android platform.

  • The Android platform now accounts for 75% of the smartphone market, which is up from its last quarter’s 68%. Apple’s Iphone dropped from being 17% of the market to 15%. This shows us that people are slowly starting to make the switch from an Iphone to phones with an Android operating system.
  • Apple is known for having loyal customers. Each year there newly innovative Iphone hits the top of consumers’ wish list. It seems like that is starting to change. According to Strategy Analytics 88% of U.S Iphone users said they would stay with the IOS for their next smartphone. That number has dropped from 93% from the previous year. In Europe the numbers dropped from 88% to 75%. This shows that people all around the world are starting to switch from IOS to another operating system.

There must be a reason why Apple fans are starting to slowly switch to Android phones. A big problem that Apple ran into was with the quality of its newest Iphone the Iphone 5. There were many complaints by consumers that there new Iphone 5 came out of the box with scratches or dents. Apple is known for making top quality products, and to produce thousands of Iphone 5 with quality defects is unacceptable. There were reports that this was due to the high demand and that they could not be made in time. It seems like Apple was choosing quantity over quality.

Is Apple starting to lose its touch? Do you think that Apple will be able to recover from the bad rep it got for the quality issues with the Iphone 5?





Hold on to your Seats!!! We’re Going Down!!




If the airline industry can’t properly maintain the inside of a plane, how can we trust them to take care of the outside of the plane?


Recent financial troubles have not been the only source of difficulties for American Airlines.  The airline is now experiencing complications with their seats.  “A Boeing 757 from Boston to Miami carrying 175 passengers diverted to New York’s John F. Kennedy Airport on Saturday when three seats in row 12 came loose shortly after takeoff.  A second American Boeing 757 returned to JFK on Monday morning after a similar seat issue was discovered” (CNN).  This kind of quality oversight could be the straw the broke the camel’s back for American Airlines.

Initial claims pointed at the saddle clamp “improperly installed on the foot of the row leg” (CNN).  Due to this improper diagnosis, American Airlines inspected a total of 47 Boing 757 Airplanes that were using this type of clamp.  Through this inspection, American Airlines found “that six — including the two involved in the recent diversions — had seats that were not properly secured” (CNN).  It was later discovered that the clamps were not the source of the problem.  Even though this problem was misdiagnosed, it led to a discovery of improper equipment.  Would the faulty equipment been discovered if the problem was diagnosed correctly the first time?   Or did this error lead to a great deal of lost revenue, time, and labor.  These are the types of things that are not in excess for a company dealing with bankruptcy.

The financial implications of mismanaged time and resources are pretty severe for a company with major financial woes.  American Airlines had to ground almost 50 of their Boeing 757 planes.  This is on top of the problem American Airlines is having with their labor force.  American Airlines is in a difficult battle with their pilots union.  The airline suspects that pilots have been filing frivolous reports to cause massive slowdowns.  This slowdown is composed of 12,000 delays and 1000 canceled flights within the month of September.  The question here is whether or not the pilots have been leveraging false safety concerns to improve their union position.  Regardless of the validity of these claims, the airline must address each concern to avoid an even bigger situation.   Being a major airline, American Airlines must deal with problems coming from all directions.  Not only must American Airlines worry about the problems of their own employees, they must also worry about their manufacturers and the partners of their manufacturers.

More and more companies work with various manufacturers to supply them with the parts and pieces required to complete their final product.  It is almost impossible to find a major manufacturer that creates all of the pieces in house that are needed to complete an intricate product.  Many reach out to other manufacturers that specialize in that specific part/piece.  With all of these various pieces, it is very difficult to insure the quality of every one of these different parts.

The seats in question were manufactured by Weber Aircraft.  This Texas based company “manufactured the seats for American’s 757 planes, also made seats for 25 other airlines, including Delta Air Lines, United Airlines, Air Canada and Korean Air Lines”(Martin 2012).  To prevent future problems and issues, the FAA has essentially demanded that the various airlines rigorously inspect their planes using the 11 Weber seat models.  Over time we have learned that in this global economy it is necessary to make manufacturing partnerships.  However, in this case, it is evident that there is a complete lack of quality management.  How can an industry with so many moving parts avoid situations like this?





Piracy – Killing the Mobile App Industry


There are millions of people who download paid-for mobile apps for free. It has made a big impact on major companies such as Apple and Google. The article talks about a popular app that many of you probably heard of called Plague. Plague is a game that lets players infect a virtual world with pathogens. Within days of releasing the game to the Apple app store, hackers made it available online for free. Up to 35% of the game’s downloads have been illegal, but the game has gotten 1.6 million paid downloads. Had those illegal downloads been paid for, the app would of generated $500,000 more.

There is an obvious issue in pirating when it comes to music, movies, and video games, and now pirates have turned to the app industry, making a significant dent in mobile-app store sales. There are many ways to steal an app such as copying its code and publishing it on an online forum or legitimate app store. Sales would actually be 20% – 50% higher if it weren’t for illegal downloads.

Google, Apple, and others have been increasing security of their app stores by using process improvement, as discussed in class. Google started offering encryption keys along with paid apps to verify the app is being used on the device it was paid for. Many new game publishers are paying for anti-tampering tools to alert developers if hackers are trying to modify an app to steal it. The tools can also prevent the apps from working properly or redirect the user to Apple’s app store.

The majority of app developers do not use anti-piracy tools besides basic ones provided by the stores that sell their apps. It seems to me that it’s not worth it for most developers because some tools will make users go through extra verification steps, making apps more difficult to download and use.  A lot of developers are using a freemium approach, where they have ads on the app for the customers who do not want to purchase it, and ad-free version for those who do purchase it. Also, the people who download the apps illegally will have the ads version.

The developer of Plague says that he “hopes to convert pirates into paying customers by luring them with new features and updates.” In my opinion, I do not think that it will make a major impact by doing that, but it will definitely help a little bit. The article also states that piracy helps promote marketing and advertising for app developers. Overall, piracy has a big impact on the $10 billion dollar app industry

Do you think developers should invest more money to eliminate piracy?

Does piracy help promote marketing and advertising?

Do you think by adding new features and updates to apps, it will help decrease piracy?


Let me know how you guys feel about the topic. Here is the link to the article: 


Groupon: Still underwhelming


By: Kelsey Pavesich


Groupon launched November 1, 2008 by Andrew Mason. This company merged businesses with customers. Groupon used the concept of collective buying in order to bring businesses and customers together in a beneficial way for both sides; sellers get a large number of new customers while buyers get great deals. When Groupon launched the social impact was huge. This ecommerce impacted people’s lives by offering them great deals on anything from dinner to sky diving. Groupon stands at the fastest growing company ever created.

Now look at today. Groupon has proved underwhelming since its fast success. Stock is currently at an all time low. This has forced Andrew Mason to look at the way they do business and make some changes. Groupon laid off 80 workers this week in order to optimize their sale force. They are moving more towards a technological route that will make deals more accessible to customers. Several months ago it was announced that productivity would be increased through automation technology. The company released in a statement that they “will always aim to optimize business operations wherever opportunities are identified.” This automation is an internal tool that is beneficial to the consumer and Groupon’s merchants; it allows personalized deals for customers and can be used to predict different leads in the merchant database. Mason has said that in the last several months’ sales force productivity has improved which increased the number of deals a customer can buy. This is due to the new tools Groupon has released. Mason is quoted: “Those sorts of things are allowing us to increase productivity and continue to scale without adding the same headcount as we have in the past.”

This technology boost in Groupon shows that they are emphasizing agility and focus on the future as their main core values. Agility focuses on faster, more flexible, customized services as well as shorter cycle time for new and improved services. Groupon is trying to obtain a higher level of agility in their company by using automation technology. This allows for a single customer to access their personalized deals faster as well as improve services with merchants. A customer can now view more deals tailored to their preferences at a given time.

Groupon has received some public disappointment with their current state compared to where people thought they would go. This shows how Groupon needs to focus on the future. It has been hard for them to maintain sustainable growth after their initial launch. Their stock is currently at an all time low so they are not leaders in the market. Focus on the future might not have been one of Groupon’s main core values in the past but it needs to be at the moment if they want to compete in ecommerce.

In your opinion is this move towards automation a good idea for Groupon even though they are laying off workers?

What do you think the main core values are of Groupon?

What core values do you think Groupon needs to focus more energy on?