strategy

You can’t please them all…or can you?

Posted on by f1233slizak

Outsourcing is very important to the business world and helps many companies in a variety of aspects. Creating partnerships with outsourcing companies is vital for companies to survive in this day and age. It also saves a lot of money for many companies, which benefits them greatly. India’s business-process-outsourcing (BPO) companies are a $50 billion industry however has recently been experiencing problems. They have started to struggle to attract the right kind of people to work there. The image of a business-process-outsourcing used to be considered prestigious and financially beneficial, but that has changed. Now people rather work in traditional sectors. They have realized that to change people’s perception of the profession, rebranding would be needed to help with that. If BPO employees would feel loyalty toward and support their companies, it would send a good message of the industry to others. A study conducted, based on Gallup data, has shown that as long as the numbers are dropping, BPO companies will not be able to change people’s perception of them. This data shows that only 28% of employees intend to stay with their companies for the next few years and that they would promote their company to others. This low level of loyalty is why the business is experiencing so much turnover and lost productivity. Word of mouth in very important in society today, however in India it is vital for businesses to survive. Indians tend to rely on advice from other people, especially trusted people, when it comes to making big decisions. This is how the problem is arising, because people who would have normally gone into the BPO industry and being advised to pick other professions now.

The industry will not survive if business owners do not start taking care of their employees. In order for the BPO to turn around, business owners need to direct their focus on making sure that their employees are happy. If they do not succeed with this, then they will not be able to obtain new employees which is ultimately what they need. Employees need to feel important in what they do and like they are making a difference somehow. They have need to feel that they are learning and growing while at their job, because let’s face it; no one wants to stay at a dead end job where they are not actually getting anything from. Employees must feel empowered and engaged in what they do.

What do you think are other ways that the BPO can raise their workforce number? Should employers focus on their current employees in order to get new ones in the future? Or should getting new employees be their main focus instead?

 

http://www.businessweek.com/articles/2012-11-04/indias-outsourcing-firms-must-boost-morale#r=nav-r-column

Are you ready for Disney Star Wars ?!?

Posted on by f1233tngamboon

Walt Disney was first introduced on October 16, 1923 by brothers Walt and Roy Disney as an animation studio. It later has developed to one of the major Hollywood studios, and owner of eleven theme parks and several televisions. Recently, the Company had agreed to purchase Lucas film from its founder, George Lucas, for $4.05 billion in stock and cash. Yes, we will be seeing more “Star Wars” movie soon. Disney plans to release new “Star Wars” movies every two or three years beginning in 2015 with “Star Wars Episode 7,” Disney Chief Executive Bob Iger said. If you can remember, Disney already purchased Pixar Animation Studios for $7.4 billion in 2006 and Marvel Entertainment for $4 billion in 2009. As such, Disney owns all the Disney characters, all the Pixar characters, all the Marvel characters, and now all the Star Wars characters? Disney is now owns almost every famous characters.

Why is this company so successful? As we know, customers expect certain things when they walk into a business, and every company should know how to identify those expectations in order to meet them to the customer’s satisfaction. Disney obviously uses these strategies as a foundation of the business. As one of their principal: “make the dream come true.” In order to make the dream come true, they should know what people dream about when they think about Disney. First thing came up to my mind when I think about Disney is that it is a place where kids can be kids, and adults can feel like kids again. Disney Themes Park and Resorts, for instance, are designed to bring pleasure by providing the finest in entertainment for people of all ages, everywhere. Each theme park creates different atmosphere. Disney continuously creates goods and services that are valued by customers and society.  Disney did everything they can to make sure that their customers have a positive experience and leave happy. Clearly, Disney is one of the worlds’ leading producers and providers of entertainment, using it portfolio of brands to differentiate its content, services and consumer products.

All in all, the Disney management principles have over time proven themselves true to the success of the organization. I believe that Disney has a huge potential to make a Star Wars movies. They will surely make “Star Wars” live on and flourish for many generations.

 

What do you think of Disney’s acquisition of Star War? Do you think that the new movie will come out the same as it’s used to be?

Source:

http://mediadecoder.blogs.nytimes.com/2012/10/30/disney-buying-lucas-films-for-4-billion/#postComment

http://money.cnn.com/2012/10/30/technology/disney-buys-lucasfilm/index.html

 

Six Sigma is SO 2007.

Posted on by f1223cmandoza

 

This is an article that focuses on Six Sigma and the fact that many companies view it as an outdated certification. While there are some very credible benefits in being Six Sigma certified, there are some major costs as well. According to the article it was a way to improve quality, but the major reason it gained so much popularity was because of its ability to cut costs and increase profitability. However, there were two standout problems with Six Sigma.

First, having such a process oriented company reduced morale. Employees were being evaluated so much on process that they were not being recognized for their hard work or outstanding customer service. Their employee results were just based on numbers. The second problem was that customer sentiment dropped. As a process focused company, the bottom line is to produce as much as possible with as little defects as possible. This may be great for a manufacturing plant, but for a company that works in customer service, it is ignoring a very important factor, the customers. Often times how a customer is treated will weigh more heavily on their decision to come back than the speed of their purchase.

Furthermore, the article goes on to state process is key, but they also need to focus on things such as innovation and creativity to keep a company moving forward. A company can be an outstanding process performer but if they are behind the times with their products or customer service, then having an excellent process doesn’t mean a lot.

In fact, Home Depot, which was a company mentioned in the article, dropped from first to worst among major retailers on the American Customer Satisfaction Index in 2005. This was a company that was Six Sigma certified and had a CEO who placed a very high value and emphasis on Six Sigma. Another example, which was meant to be an example supporting Six Sigma certification, was the desire by financial institutions to be Six Sigma certified. One of the banks mentioned was Bank of America, and we all know what has been happening with them in the recent news…

In conclusion, as we learned in our class, Six Sigma is an outstanding certification to have. It shows that a company is operating at a capacity with an extremely low rate of defect. However, in my opinion, in the case of the article, it sights that there may be more to a company’s success than excellence process. I tend to go with the belief similar to one mentioned in the article, that Process management is a good thing but it must be leavened a bit with a focus on innovation and customer relationships.

 

With the article in mind, I have a couple of questions I’d like to open up to the class.

First, would you go out of your way to be a customer of a Six Sigma company?

Second, what is more important to you, a customer connection or Six Sigma certification?

 

Article Site: http://www.businessweek.com/stories/2007-06-10/six-sigma-so-yesterday

The Downward Spiral of American Beer

Posted on by f1233pmazurek

 

As many people know Annheuser-Busch merged with a Brazilian company named In-BEV, now known as AB InBev and people are starting to question the beer industry. AB InBev now controls 48% of the beer market and 68% in Brazil alone. So what is the issue? The distinct taste of American beer is now being produced with many foreign beers. Since the merger Ab InBev has moved production of many beer plants to right here in the U.S. That is good for workers here in the states but not necessarily for the avid Budweiser drinkers. Many people have complained that the beers are becoming more bland and not as tasty. In the article a Beck drinker for 25 years went and bought a 12 pack and said the beer just didn’t taste the same. After further inspection the German beer “Becks” was now manufactured in St. Louis, Mo. AB InBev has seen beer sales drop for many of their beers but they are still profiting as a company. The new manager of the firm, Brito, is making all sorts of cut backs in the company and as well as in the production of Budweiser. Budweiser has always boasted about using whole grains of rice in their beer and now the quality in the rice is the most important part and it doesn’t matter if it is whole or broken grains. He is also cutting off suppliers which have been used for over 25 years. These cutbacks are shutting down businesses and changing the beer industry as well as the beer itself. I understand making cuts to make a profit but is it truly ok to modify the beer which has been loved by the public for decades?

I do not believe it is ok, unless the public is made aware of the changes taking place in many of these breweries. If the customers continue to buy Ab InBev’s products and taste a difference should they not be informed?  These modifications may not be noticeable to the once in awhile drinker… but it definitely will be to the loyal consumers of Budweiser. Modifications to this beer will also mean modifications to other American beers will occur as well, eventually altering the American beer market forever. Brito, the managing director of the company, will not comment on any of the changes and refuses to give any interviews.

To add insult to injury Brito has also raised the price of Budweiser and Bud Light, seeing how they are the most popular American beers right now. The price increase has slowed sales in 2011 by 3% and Bud slipped by 13%. Many researchers said it is not unconstitutional to make a profit in any company and Brito has done a great job of doing that, but it maybe un-american to modify a beer that has been iconic in the American culture for years now.

What kind of tablet would you like for Christmas? Maybe a Nook?

Posted on by f1224srokicki

NOOK HD Snow 8GB

As more and more people have begun to steer away from physical books to e-books, e-readers and tablets have begun to establish themselves as the next big product. Barnes & Noble entered into the Tablet industry with its first tablet, the Nook Tablet, last November in order to compete with Apple’s iPad and as well as Amazon’s Kindle Fire. With this introduction of the Nook HD, Barnes & Nobles has begun the phasing out of its previous tablets, the Nook Tablet and Nook Color. This new design, which introduces an upgrade in hardware and software, comes in two different sizes, one with a 7-inch screen and the other with a 9-inch screen. This has come on the brink of Amazon’s announcement for four new varieties of its Kindle which also offers larger screens to compete with the iPad’s 9.7 inch screen.

In order to compete with the offerings of its main competitor, Amazon’s Kindle, Barnes & Noble has also introduced a new video service in conjunction with major television and movie studios like Warner Brothers and HBO to allow its users to watch and buy movies and televisions shows on their mobile devices and TVs. Amazon currently offers more services which include a larger app store and video library as well as also providing its customers with its huge product offerings. However, due to the constant threat of Amazon’s online retail operations, retailers like Wal-Mart and Target refuse to carry the Kindle which allows for more opportunity for the Nook to be reached by possible consumers without the extra competition of the Kindle.

The tablet category has seen rapid expansion with many competitors entering the industry. According to Forrester Research, approximately one-third of U.S. adults will own some form of a tablet by 2016. That doesn’t even account for the amount of families that own multiple tablets for their children to use. So for Christmas, which kind of tablet would you like? Is it possible that the cheaper prices of the Nook and the Kindle can sway even more consumers towards it rather than going for an iPad?

Sources:

http://www.suntimes.com/technology/15389281-478/barnes-noble-launches-new-nook-hd.html

http://www.barnesandnoble.com/p/nook-hd-barnes-noble/1110060426

Shop Like It’s 1999!

Posted on by f1223jkundrat

In a time when pennies count, retailers are looking for any competitive advantage they can find. One way which is starting to make a comeback is the layaway program. By allowing customers the opportunity to put items on hold for a set number of weeks, it gives the consumer who may not be able to afford a purchase right now the opportunity to lock in their price. These programs have several different structures, some charge upfront fees at the beginning of the layaway period, and additionally some of which accrue interest charges.

This philosophy is nothing new in the retail world, but has seen a renaissance over the past few years, with many large retailers such as Sears, Kmart, and Toys ‘R Us pushing the programs. By offering layaway, retailers hope to boost early sales and beat their forecasts for the holiday season. Layaway does, however, have its downsides for companies since many have waived their service fees if consumers do not follow through with their purchase. This leaves merchandisers holding onto the extra inventory. Also with this new push to increase sales, retailers are adding many new items eligible for layaway. This move could prove to be both a positive and a negative. While on one hand it will bring in more shoppers to put things on layaway. If enough consumers do not follow through on their contracts and the stores took precious items off the sales floor, the results could prove costly.

By offering layaway financing through the stores themselves, it gives consumers who do not have, or might not want to use their credit cards. By allowing these consumers who might not have purchased the item otherwise to purchase from your company, it opens your profit potential that much more. Because it entails more planning on behalf of the merchandising crew, and all of the other aspects listed above, the decision on whether the layaway program is beneficial to each individual company is something that is up for debate.

Question: If you had a retail company, do you believe implementing a layaway program would be a good idea? What are some other benefits and consequences in addition to the ones mentioned that might come about due to a layaway program?

http://www.cnbc.com/id/49302750

http://chainstoreage.com/article/sears-kmart-jump-layaway-bandwagon-waiving-fees

 

No more DrawSomething? No More Farmville?

Posted on by f1233bnikolova

http://money.cnn.com/2012/10/04/technology/social/zynga-outlook/index.htmlWhat do you think ZYNGA could’ve done differently to remain a successful company?

 

In an article from CNN, Julianne Pepitone shares some breaking news about the dynamic gaming company, Zynga, who hit the jackpot a couple years ago with their popular game, FarmVille, which they originally offered solely on Facebook. When first starting out the company flourished and became one of the most profitable gaming companies in America. Their strategy for competitive advantage in their industry is Differentiation, which offers better games, connected to a social media website that everyone in the world uses, and best of all is free of charge. Recently however, the company has gone through multiple financial and ethical struggles and has been working hard to hold on to their “loyal” users and to increase their stock share price. Unfortunately, because of CEO and founder Mark Pincus’s irrational decisions, the company is slowly burying themselves in a hole that they must crawl out of before they are in too deep.

The article starts off by sharing a couple of forecasts that the company has publicly stated, many of which are gloomy and downgraded. By blaming most of its gloomy 2012 forecast on “reduced expectations for certain web games and a delays on launching several new games,” Zynga has given nothing but excuses to its angry investors and things getting worse. With Zynga’s shares  down 75% in afternoon trading on Friday, things are pretty bad

In class, we learned about forecasting and the significance of it in a successful company. Zynga’s purchase of a company called OMGPOP, which released its hit “Draw Something” early in March. If Zynga had used some kind of a demand forecast, they could’ve predicted sales of the existing product (Farmville) and prevented all the money that was lost through the buy out of the new product, “Draw Something”  Although forecasting is seldom perfect, it is better to forecast and to have some kind of idea about what you’re getting your company into, then walking into something new completely blind.

Also, Zynga is infamous for buying out its competitors when they are feeling threatened. This has usually worked for them and is one of the main factors as to why they are so successful but also why a lot of people dislike them/feel that they are unethical. Unfortunately, Zynga’s CEO decided to buy the company for the sole purpose of Draw Something’s popularity and didn’t use any demand forecasts to predict future sales of the game. Draw Something unfortunately turned out to be a “short lived fad” and has cost Zynga lots and of lots money in the past couple of months. When Pincus was asked if he thought that he paid too much for OMGPOP considering its unpopularity, he calmed replied by saying”I’d say it’s too early to call it after one quarter.” Unfortunately, this nonchalant attitude will get the company going nowhere and will further decrease its profitability.

 

What do you believe was ZYNGA’s biggest mistake?

Would you invest in ZYNGA?

Is the risk worth the reward?

Posted on by f1223cmandoza

 

Bank of America is the second largest bank in the United States but is currently facing many financial hardships. Under a new CEO since 2010, “Brian Moynihan has been working to streamline and reduce risk at a company that has lagged rivals in recovering from the financial crisis, largely due to mortgage-related losses” (Huffington Post). His plans are meant to eliminate roughly $5 billion in annual expenses and 30,000 jobs (Huffington Post).

After learning about the different ways managers can improve their bottom-line, it was interesting to digress on the situation that is going on at Bank of America. There are three major ways a company can look to improve during a financial hardship. They can look to marketing to increase sales, they can look to finance and accounting to cut expenses or they can turn to operations management and cut production costs.

In this case, Bank of American took the route of finance and accounting by making VERY drastic spending cuts. Was Bank of America smart in doing this? From a marketing perspective, with such a difficult and lackluster economy, increasing sales is probably not the most feasible option. From an operations management perspective, it is a service based company and therefore it would be difficult to cut operational costs. BofA could increase efficiency by closing certain branches or shortening the work hours, however this would be at the cost of its employees. As such, in this type of economy, job layoffs are a way to jump-start the company back to life. It is by no means the popular choice, but really seems to be the best option at this point in time.

 

Any thoughts, comments or rebuttals?

 

http://www.huffingtonpost.com/2012/09/20/bank-of-america-layoffs-16000_n_1899691.html

@Twitter: “Running late, no time for coffee #drivingtowork”

Posted on by f1222rgitlevich

These days everybody has a cell phone…Not just any cell phone, most of us have iPhones, Droids and dare I say it…Blackberries. All of these devices have texting, tweeting and facebooking capabilities. Due to this “on-the-go” potential, more and more users are doing these things while driving. Since then, the number of car accidents has gone up substantially. In 2011, 23% of auto collisions involved cell phone distractions, in other words, that’s 1.3 million crashes. http://www.textinganddrivingsafety.com/texting-and-driving-stats/

Automakers believe that voice control is the solution that will permit drivers to safely text, tweet and update their Facebook pages to inform the world of the amazing fact that they are in the act of driving to work.  The problem with the notion of voice control as a cure for distraction is that it still is a distraction.

MIT researchers are working with Toyota’s Collaborative Safety Research Center to find the answer to the issue. Their goal is to measure the workload involved in the operation of a voice-command system.

The researchers equipped a car with cameras to monitor drivers’ eyes as they watch the road. Test subjects are also wired up with a heart-rate monitor and an instrument that measures galvanic skin response (like a lie detector) to assess their stress levels. The team will study the drivers while they perform physical controls and voice controls. This would allow them to predict the deterioration in driving ability that will result. http://bottomline.nbcnews.com/_news/2012/09/26/13967296-some-day-voice-control-may-cut-drivers-gizmo-distractions

 

The issue that arises is how necessary are these studies? Do we really want to include something in a vehicle that allows for these types of capabilities?

 

Will YOU give it a shot?

Posted on by f1222cgaspar

article link : http://online.wsj.com/article/SB10000872396390443890304578006650462123038.html?KEYWORDS=starbucks+gives+single+serve+a+shot

http://www.surlatable.com/product/PRO-1039767/Starbucks-Verismo-Single-Cup-Coffee-and-Espresso-Maker-Champagne;jsessionid=AEB76F3F8A01C00B18498FC92786CC51

Starbucks is currently in the midst of launching their newest product, the Verismo single-cup espresso based beverage machine. The Verismo has unique pods that contain coffee and milk, and when used together, can product a latte. This machine has a unique new sleek style, to better fit on top of a kitchen counter, and is also capable of making shots of expresso. This machine is going to be sold at high- end kitchen good stores such as Sur La Table, and Williams Sonoma, as well as in select Starbucks locations. It will be priced at $199 and and the larger version will be priced at $399.

Previous data has shown in the last year only 4% of coffee makers made a profit from selling espresso machines. This means starbucks is taking a large risk entering the espresso machine market. Chief Executive, Howard Schultz, stated in his most recent interview that Starbucks is making a bet with this new machine.

So, with last year espresso machine sales at a mere 4%, and the Chief Executive officer admitting that this is a big risk, why would Starbucks enter into this market? Well, I believe we can look at Chapter 12, regarding Operations and strategy in a global environment, for some answers. Starbucks has one of the most, if not THE most crucial advantage over competitors; Starbucks has brand recognition. Starbucks differentiates themselves from other coffee shops because they provide an “experience”, which sets them apart from the rest of the many places you can get a cup of coffee. But, their newest product launch had nothing to do with this in store “experience”, rather, it is about bringing Starbucks “experience” into your own home. The competitive advantage is about differentiation, cost leadership, and response. Starbucks new Verismo machine touches upon all three, with a strong emphasis on differentiation because there are currently are no other machines like it on the market. According to our book,Competing on differentiation means, “the uniqueness can go beyond both the physical characteristics and service attributes to encompass everything that impacts the customer’s perception of value- and in this case, the Starbucks customer values their own time, their coffe, and their loyalty to the brand itself.

I think this coffee maker will be successful? Will it be a positive thing for Starbucks?

What strategies and data do you think Starbucks is using to make sure sales of this machine are successful?

The operations managers job is to provide competitive advantage and increase productivity… Do you think the OM Manager is doing this in this instance?