I just learned of the most amazing site and I hope to pass the message along to someone who could use the information. It is called AskNature.org and it is intended to get engineers and designers and people in business to consider how nature accomplishes the tasks we are still struggling to accomplish - like using nano technology, like staying dry or like purifying water. I have cut one page and pasted it here so you can get a sense of what they are doing
Biomimicry Taxonomy: Biology Organized by ChallengeWhat is The Biomimicry Taxonomy?
Information organized on AskNature uses a classification system—the Biomimicry Taxonomy—to organize how organisms meet different challenges. Strategies are potential solutions to those challenges. For example, the challenge and Biomimicry Taxonomy of an insect’s strategy might be as follows:
Insect’s challenge:Protect itself from animals that want to eat it.
Strategy Anti-reflective eyes to avoid detection in moonlight via nanoscale protrusions on the eyes' surfaces. View strategy page >
Biomimicry Taxonomy GROUP: Maintain health
SUB-GROUP: Protect from biotic factors
FUNCTION: Protect from animals
STRATEGY: Nanoscale protrusions
Getting to know the Biomimicry Taxonomy
Browse the Biomimicry Taxonomy on AskNature >
Download a one-page visual of the entire Biomimicry Taxonomy (PDF 776kB) >
Browse strategies organized with the Biomimicry Taxonomy >
How do I use it?
Understanding the Biomimicry Taxonomy provides a novel way for designers and biologists to collaborate and approach the next design challenge in a life-conducive way. The key to using the taxonomy is forming the question. Instead of asking how to make less toxic pigments, the designer can "ask" a Morpho butterfly how it modifies its color. Instead of using high pressure and temperatures to manufacture tough, lightweight building materials, an engineer can "ask" a toucan how it manages impact with its strong and light beak.
Here’s an example of how you could use the Biomimicry Taxonomy to solve your next design challenge:
ChalLENGE: You are designing a building in an area of low rainfall. You want your building to collect rainwater and store it for future use.
1. Find the verb: Move away from any predetermined ideas of what you want to design, and think more about what you want your design to do. Try to pull out single functional words in the form of verbs. The questions you might pose through the Search or Browse options might be:
How would Nature…
Capture rainwater?
Store water?
Or_. Try a different angle. Some organisms live in areas that don't experience any rain, yet they still get all of the water they need. So other questions to pose might be:
How would Nature…
Capture water?
Capture fog?
Absorb water?
Manage humidity?
Move water?
3. Turn the question around. Instead of asking how Nature stores water, you might think about how Nature protects against excess water or keeps water out:
How would Nature…
Remove water?
Stay dry?
4. Become inspired. Take some time to explore AskNature and see what inspires you. If you need more help, see our site tutorial on how to navigate the site using the Search and Browse tools.
Thursday, April 29, 2010
Art of Coaching in Business
Coaching Advice from Jack Nicklaus, Herb Kelleher and others. Just listen to the insights.
Wednesday, April 28, 2010
Tuesday, April 27, 2010
Companies Doing it Right Internationally
This 4 minute clip highlights companies like Levi-Strauss and others who have made a real effort to treat their international workers with human dignity. We say we want that to happen so I hope we will all support the ones who are trying.
Snapple Q&A
1. How would you characterize Snapple’s brand image and sources of brand equity? What are the strengths and weaknesses of the brand’s existing personality and image?
Snapple is the luxury good for the average person- a Porsche for the poor. It defines itself as new age and quirky. It has some similarities with Red Bull in that it created a product category and did it their own way but it is less edgy and geared more to mainstream America. It has a quirky and a bit of a rebellious everyman vibe. It equity comes from being a different non carbonated drink, natural ingredients and the slogan ‘the best stuff on earth’. They also have equity from differentiation and the introduction of new taste experiences to the consumer. Originally, they had equity in being so ‘every man’ and approachable.
2. Where did Quaker go wrong? What could it have done differently? Is Cadbury in danger of making the same mistakes as Quaker did?
Quaker went wrong at step one. They should never have acquired Snapple as it did not fit the company ethos in any way. I watched many Snapple commercials on Youtube and several Quaker Oats commercials and there are fundamental differences in philosophy apparent in the way the companies portray themselves. Quaker Oaks is solid, middle America, wellness oriented and the ads are high quality and high minded. Snapple is outsider, quirky, irreverent, and the ads appear low budget, mid to lower class settings (wood paneling in every home) and the ads are designed to appear amateurish. It is as though their very being is small time and small town (I was surprised to learn they originated in NY city!) so perhaps that makes them more marginal than small town.
Acquisition fever is not always good for the acquired company or the one acquiring or even for the economy in general. Snapple had a maverick vibe that would never carry its brand equity into the Quaker stable. Quaker and Snapple went together about as well as Hippies and Quakers would. They do not speak the same language or see the world in the same way. The spectacular loss of financial value under the Quaker management must surely tell the tale. I do not believe that it could have made a success of Snapple unless it somehow distanced the parent company from the Snapple subsidiary and conducted business in an entirely different manner. Cadbury, with its less defined corporate image is not in as great a danger for loss of financial value but it too is a dubious fit. After watching its ads, though, it is much less straight laced and it at least has the advantage of being a candy company which is much more in line with the true nutritional value of Snapple. I think that they should spin off Snapple as soon as the market place allows them an opening.
3. How effective and appropriate do you think Triarc’s marketing program was? How effective and appropriate do you think Cadbury’s marketing program is? What changes if any, would you recommend Cadbury make to the Snapple marketing?
I believe that the sale price indicates that Triarc was very successful but I am not sure that it can be sustained long term. Its packaging was greatly improved, its focus on what Snapple really was improved dramatically and it helped to restore the sense of fun and premium. Triarc lead Snapple into a dicey advertising direction toward the end though. I am not sure that once you go there you can come back. To make a parallel, once daytime soaps venture onto the path of marginalized sex and the occult, the soap has not got long to live. It appears to be a desperate attempt to gain ratings. In Snapple’s case, they tried to regain their edge by the ‘Fruit ads’. They are actually fairly well done and of much higher production quality than previous Snapple ads but they seem to be aimed at a different demographic. I will be direct in my opinion: I believe that they tried to regain their edgy feeling by adopting an old name for homosexuals and positioning themselves as accepting and open minded. The little fruits also bring to mind the underwear commercials and the controversies surrounding them. They won a best ad but I think those awards are often given for social change and brave stances.
Cadbury has taken the little fruits ads into more blatant sexuality and more edgy events. I think that they missed the fun and tipped over onto edgy which I do not think can be sustained long term with this product. This is not Red Bull nor should it be. I think there is something fundamentally inauthentic in this approach for this product.
If I were in charge, I would back away from the sexual edginess and I think I would find the kind of stunts like some of the JackAss ones, that are extreme but harmless and funny or a comedian that was not too high brow but who thought with new perspectives on things that affect this demographic..
IN addition, I think that Cadbury should spin off Snapple into an independent unit asap.
4. How has Snapple’s sale to Cadbury affected Snapple’s equity? Are there dangers of the brand’s association with a large corporation?
The sale proved that Snapple was back and that it had brand equity again. The bargain basement price to Triarc was an awakening. Triarc did an amazing short term job of bringing it back to sell again but that is what they specialize in and they needed the value to peak to realize that kind of profit. It is now incumbent upon Cadbury to keep it going. And that is not as easy when you have to use long term strategies. This brand should never be associated with a large corporation. It is not the way this type of business needs to run and it almost kills the equity by taking something edgy and placing it in the nest with other “nice” products like Dairy Milk chocolate bars. This is a serious danger to the product line and brand equity. It is somehow hypocritical and consumers sense that the edgy stance is marketing hype only. Wendy the Snapple lady had the appearance of authenticity because she was initially truly authentic.
5. What do you think Cadbury’s next move with Snapple should be? Should Cadbury spin-off its Americas Beverage group?
Sell! Sell! Sell! Or make the Snapple business unit independent and run it as Red Bull is run with its own personality. Spinning off the Americas Beverage group would be the most sensible course of action for the unit. Without the freedom to distance itself from big business, I do not see this unit surviving or thriving long term.
Snapple is the luxury good for the average person- a Porsche for the poor. It defines itself as new age and quirky. It has some similarities with Red Bull in that it created a product category and did it their own way but it is less edgy and geared more to mainstream America. It has a quirky and a bit of a rebellious everyman vibe. It equity comes from being a different non carbonated drink, natural ingredients and the slogan ‘the best stuff on earth’. They also have equity from differentiation and the introduction of new taste experiences to the consumer. Originally, they had equity in being so ‘every man’ and approachable.
2. Where did Quaker go wrong? What could it have done differently? Is Cadbury in danger of making the same mistakes as Quaker did?
Quaker went wrong at step one. They should never have acquired Snapple as it did not fit the company ethos in any way. I watched many Snapple commercials on Youtube and several Quaker Oats commercials and there are fundamental differences in philosophy apparent in the way the companies portray themselves. Quaker Oaks is solid, middle America, wellness oriented and the ads are high quality and high minded. Snapple is outsider, quirky, irreverent, and the ads appear low budget, mid to lower class settings (wood paneling in every home) and the ads are designed to appear amateurish. It is as though their very being is small time and small town (I was surprised to learn they originated in NY city!) so perhaps that makes them more marginal than small town.
Acquisition fever is not always good for the acquired company or the one acquiring or even for the economy in general. Snapple had a maverick vibe that would never carry its brand equity into the Quaker stable. Quaker and Snapple went together about as well as Hippies and Quakers would. They do not speak the same language or see the world in the same way. The spectacular loss of financial value under the Quaker management must surely tell the tale. I do not believe that it could have made a success of Snapple unless it somehow distanced the parent company from the Snapple subsidiary and conducted business in an entirely different manner. Cadbury, with its less defined corporate image is not in as great a danger for loss of financial value but it too is a dubious fit. After watching its ads, though, it is much less straight laced and it at least has the advantage of being a candy company which is much more in line with the true nutritional value of Snapple. I think that they should spin off Snapple as soon as the market place allows them an opening.
3. How effective and appropriate do you think Triarc’s marketing program was? How effective and appropriate do you think Cadbury’s marketing program is? What changes if any, would you recommend Cadbury make to the Snapple marketing?
I believe that the sale price indicates that Triarc was very successful but I am not sure that it can be sustained long term. Its packaging was greatly improved, its focus on what Snapple really was improved dramatically and it helped to restore the sense of fun and premium. Triarc lead Snapple into a dicey advertising direction toward the end though. I am not sure that once you go there you can come back. To make a parallel, once daytime soaps venture onto the path of marginalized sex and the occult, the soap has not got long to live. It appears to be a desperate attempt to gain ratings. In Snapple’s case, they tried to regain their edge by the ‘Fruit ads’. They are actually fairly well done and of much higher production quality than previous Snapple ads but they seem to be aimed at a different demographic. I will be direct in my opinion: I believe that they tried to regain their edgy feeling by adopting an old name for homosexuals and positioning themselves as accepting and open minded. The little fruits also bring to mind the underwear commercials and the controversies surrounding them. They won a best ad but I think those awards are often given for social change and brave stances.
Cadbury has taken the little fruits ads into more blatant sexuality and more edgy events. I think that they missed the fun and tipped over onto edgy which I do not think can be sustained long term with this product. This is not Red Bull nor should it be. I think there is something fundamentally inauthentic in this approach for this product.
If I were in charge, I would back away from the sexual edginess and I think I would find the kind of stunts like some of the JackAss ones, that are extreme but harmless and funny or a comedian that was not too high brow but who thought with new perspectives on things that affect this demographic..
IN addition, I think that Cadbury should spin off Snapple into an independent unit asap.
4. How has Snapple’s sale to Cadbury affected Snapple’s equity? Are there dangers of the brand’s association with a large corporation?
The sale proved that Snapple was back and that it had brand equity again. The bargain basement price to Triarc was an awakening. Triarc did an amazing short term job of bringing it back to sell again but that is what they specialize in and they needed the value to peak to realize that kind of profit. It is now incumbent upon Cadbury to keep it going. And that is not as easy when you have to use long term strategies. This brand should never be associated with a large corporation. It is not the way this type of business needs to run and it almost kills the equity by taking something edgy and placing it in the nest with other “nice” products like Dairy Milk chocolate bars. This is a serious danger to the product line and brand equity. It is somehow hypocritical and consumers sense that the edgy stance is marketing hype only. Wendy the Snapple lady had the appearance of authenticity because she was initially truly authentic.
5. What do you think Cadbury’s next move with Snapple should be? Should Cadbury spin-off its Americas Beverage group?
Sell! Sell! Sell! Or make the Snapple business unit independent and run it as Red Bull is run with its own personality. Spinning off the Americas Beverage group would be the most sensible course of action for the unit. Without the freedom to distance itself from big business, I do not see this unit surviving or thriving long term.
Accenture Q&A
Accenture
1. How would you characterize Andersen’s Consulting brand equity in the late 1990s? What factors and decisions contributed to the building of this equity?
Aggressive advertising made Andersen’s Consulting widely known and respected as a leader in empowering other businesses to adopt technological solutions. It was considered “creative, driven, far sighted and innovative’ P355. They invested heavily in advertising and the investment paid off. In addition they employed a public relations firm to influence the opinions of upper level management who would be instrumental in the final decisions to choose Andersen’s Consulting.
I believe that one of their greatest sources of equity was in their educated and research based practices that really did produce superior results for their clients and for themselves. Andersen Consulting was known to be the market leader in management and technology consulting, operational strategy consulting, systems integration and business reengineering- which were considered the toughest challenges of the time. They combined this with metrics to prove those results. While I do think that Arthur Andersen Business Consulting did get an advantage from the association with Andersen Consulting, I do not really think it cost Andersen Consulting much in terms of brand equity. In the BRPI study they ranked first above IBM and McKinsey in brand equity.
2. Compare the characteristics of Accenture’s brand equity to those of Andersen Consulting. Do you think the rebranding and repositioning of the company successfully transferred the equity from the old name to the new one?
Accenture’s brand equity was more far reaching and all encompassing than Andersen Consulting. They had already begun to redefine themselves and their role in the businesses of their customers. It chose to help companies transition into the new economy. Andersen Consulting had an older business perspective that arose out of the detail orientation of accounting. I really do think that they were very successful in the transfer of equity because they have operated intelligently at every step. The leadership of Andersen Consulting knew the company and its strengths well due to their willingness to spend the time and money to research their impact and the perceptions of their clients. It was more than successful with an 11% increase in brand equity after the first year.
3. How much of a competitive threat is IBM? How should Accenture best compete with them?
While IBM remains a huge competitive threat, Accenture must accentuate the factors which differentiate them from IBM. Those factors include a broader expertise in business goal attainment beyond technical expertise. In addition, Accenture has a long history of experience that IBM may not have matched even though they acquired Monday. (Acquisitions are not always able to transfer all the knowledge that they thought they bought.) Below is a comparison of IBM vs. Accenture stock positions.
http://www.fool.com/investing/general/2009/12/04/better-buy-acn-or-ibm.aspx
Factor Accenture IBM
Cheapness (P/E ratio)
17.2 13.2
Growth (5-year growth rate)
20.2% 15.5%
Operations (net margin %)
6.86% 13.65%
Balance Sheet (debt/equity ratio)
.00 1.38
CAPS Rating (scale of 1 to 5 stars)
Round 1: Cheapness
Advantage: IBM. Cheapness is determined by P/E ratio. The lower the better. Be careful of earnings near zero that skew the ratio, one-time gains and losses, and pasts that aren’t indicative of futures (the more dynamic the industry, the more this is true).
Round 2: Growth
Advantage: Accenture. Growth here is the trailing 5-year EPS growth rate. This trailing earnings growth helps put notoriously-optimistic Wall Street projections in perspective.
Round 3: Operations
Advantage: IBM. Net margin percentage shows how efficiently a company turns revenue into profit. The more similar the business models, the more relevant the comparison.
Round 4: Balance sheet
Advantage: Accenture. As with net margins, the debt to capital ratio is most relevant in comparing companies in similar industries. In this battle we give the nod to the lower-debt company, but attention should also be paid to the cost of debt, interest coverage ratios, and the stability of the business (the more stable a company’s operations, the more debt it can safely carry).
Round 5: CAPS rating
Advantage: Accenture. A company’s CAPS rating is our community’s opinion of the stock. Accenture has a slightly greater numerical CAPS rating than IBM (even though they have the same number of stars).
4. Evaluate the effectiveness of Tiger Woods as a spokesman for the company. Is Accenture achieving its objectives with a celebrity spokesman? Should they have dropped him during the scandal?
The corporate descriptor for Accenture is "High performance. Delivered.", which replaced the previous slogan "Innovation. Delivered." in 2004. Tiger consistently delivers performance. Until December 2009, Tiger Woods had been a celebrity spokesperson for the company. “Go on, be a Tiger" and the ancillary statement "We know what it takes to be a Tiger" were effective taglines. The company terminated Woods' six-year sponsorship deal on 13th December 2009 and removed references to Woods from its website. Until now, it has been an ideal partnership with great advantages for Accenture. The man personified the qualities that Accenture claimed for itself. His personality and winning ways were a good fit. Although it is sad that the man’s weaknesses have damaged his family and the business relationship, I think that some companies that stick with him now will eventually be proven to win in the long run. No one condones sleazy antics but we live in a live and let live society. Accenture should have sidelined the ads for a period of time and preserved the relationship because Tiger is Tiger and with his ability, stamina and personality, I predict he will be back and “high performance will be delivered again.” He makes mistakes but his intellect and ability to hire public relations experts will bring him back to peak performance sooner than later. After all have you ever seen him club his way out of a really bad lie? He’s amazing in a tough situation in golf and I predict he will be in life.
1. How would you characterize Andersen’s Consulting brand equity in the late 1990s? What factors and decisions contributed to the building of this equity?
Aggressive advertising made Andersen’s Consulting widely known and respected as a leader in empowering other businesses to adopt technological solutions. It was considered “creative, driven, far sighted and innovative’ P355. They invested heavily in advertising and the investment paid off. In addition they employed a public relations firm to influence the opinions of upper level management who would be instrumental in the final decisions to choose Andersen’s Consulting.
I believe that one of their greatest sources of equity was in their educated and research based practices that really did produce superior results for their clients and for themselves. Andersen Consulting was known to be the market leader in management and technology consulting, operational strategy consulting, systems integration and business reengineering- which were considered the toughest challenges of the time. They combined this with metrics to prove those results. While I do think that Arthur Andersen Business Consulting did get an advantage from the association with Andersen Consulting, I do not really think it cost Andersen Consulting much in terms of brand equity. In the BRPI study they ranked first above IBM and McKinsey in brand equity.
2. Compare the characteristics of Accenture’s brand equity to those of Andersen Consulting. Do you think the rebranding and repositioning of the company successfully transferred the equity from the old name to the new one?
Accenture’s brand equity was more far reaching and all encompassing than Andersen Consulting. They had already begun to redefine themselves and their role in the businesses of their customers. It chose to help companies transition into the new economy. Andersen Consulting had an older business perspective that arose out of the detail orientation of accounting. I really do think that they were very successful in the transfer of equity because they have operated intelligently at every step. The leadership of Andersen Consulting knew the company and its strengths well due to their willingness to spend the time and money to research their impact and the perceptions of their clients. It was more than successful with an 11% increase in brand equity after the first year.
3. How much of a competitive threat is IBM? How should Accenture best compete with them?
While IBM remains a huge competitive threat, Accenture must accentuate the factors which differentiate them from IBM. Those factors include a broader expertise in business goal attainment beyond technical expertise. In addition, Accenture has a long history of experience that IBM may not have matched even though they acquired Monday. (Acquisitions are not always able to transfer all the knowledge that they thought they bought.) Below is a comparison of IBM vs. Accenture stock positions.
http://www.fool.com/investing/general/2009/12/04/better-buy-acn-or-ibm.aspx
Factor Accenture IBM
Cheapness (P/E ratio)
17.2 13.2
Growth (5-year growth rate)
20.2% 15.5%
Operations (net margin %)
6.86% 13.65%
Balance Sheet (debt/equity ratio)
.00 1.38
CAPS Rating (scale of 1 to 5 stars)
Round 1: Cheapness
Advantage: IBM. Cheapness is determined by P/E ratio. The lower the better. Be careful of earnings near zero that skew the ratio, one-time gains and losses, and pasts that aren’t indicative of futures (the more dynamic the industry, the more this is true).
Round 2: Growth
Advantage: Accenture. Growth here is the trailing 5-year EPS growth rate. This trailing earnings growth helps put notoriously-optimistic Wall Street projections in perspective.
Round 3: Operations
Advantage: IBM. Net margin percentage shows how efficiently a company turns revenue into profit. The more similar the business models, the more relevant the comparison.
Round 4: Balance sheet
Advantage: Accenture. As with net margins, the debt to capital ratio is most relevant in comparing companies in similar industries. In this battle we give the nod to the lower-debt company, but attention should also be paid to the cost of debt, interest coverage ratios, and the stability of the business (the more stable a company’s operations, the more debt it can safely carry).
Round 5: CAPS rating
Advantage: Accenture. A company’s CAPS rating is our community’s opinion of the stock. Accenture has a slightly greater numerical CAPS rating than IBM (even though they have the same number of stars).
4. Evaluate the effectiveness of Tiger Woods as a spokesman for the company. Is Accenture achieving its objectives with a celebrity spokesman? Should they have dropped him during the scandal?
The corporate descriptor for Accenture is "High performance. Delivered.", which replaced the previous slogan "Innovation. Delivered." in 2004. Tiger consistently delivers performance. Until December 2009, Tiger Woods had been a celebrity spokesperson for the company. “Go on, be a Tiger" and the ancillary statement "We know what it takes to be a Tiger" were effective taglines. The company terminated Woods' six-year sponsorship deal on 13th December 2009 and removed references to Woods from its website. Until now, it has been an ideal partnership with great advantages for Accenture. The man personified the qualities that Accenture claimed for itself. His personality and winning ways were a good fit. Although it is sad that the man’s weaknesses have damaged his family and the business relationship, I think that some companies that stick with him now will eventually be proven to win in the long run. No one condones sleazy antics but we live in a live and let live society. Accenture should have sidelined the ads for a period of time and preserved the relationship because Tiger is Tiger and with his ability, stamina and personality, I predict he will be back and “high performance will be delivered again.” He makes mistakes but his intellect and ability to hire public relations experts will bring him back to peak performance sooner than later. After all have you ever seen him club his way out of a really bad lie? He’s amazing in a tough situation in golf and I predict he will be in life.
Monday, April 26, 2010
Compensation for Overbooked Airline Flights
Compensation for Overbooked Flights
One of the reasons that I am a life long learner and that I continue to take classes is that my colleagues and fellow students are so SMART! I learn so much from them. Here is a response to a Blackboard discussion question that Kelly Sims wrote. Verizon is currently the beneficiary of the services of this bright lady. This is information that I did not know and that I think we could all benefit from.
“Interesting that you brought up overbooking flights. Airlines are starting to do this more and more since they are trying to cut costs. They want to make sure they have 100% occupancy. I remember when I used to fly prior to 9-11 and I almost always had an empty seat in my row. Now, you hardly ever see an empty seat. According to an article by Knight-Ridder, an average of 50,000 passengers are bumped by the nation's ten largest airlines every year.
Legally, airlines are allowed to overbook and bump passengers. The Department of Transportation has rules governing airlines regarding overselling flights.
The airline must give you a written statement of your rights which explains who gets on an oversold flight and who doesn't. If you get bumped, what do you get in return. The following guidelines are used. If the airline provides substitute transportation:
• within an hour of your original flight - you do not get compensated
• one to two hours late on domestic flights or one to four on international - the airline must pay at least the equivalent of your one-way fare to your final destination, $400 max.
• more than two hours late domestically or more than four internationally, or if the airline doesn't make substitute arrangements, the compensation doubles, with an $800 ceiling.
Thanks, Kelly! Knowing this should keep the airlines on their toes!
One of the reasons that I am a life long learner and that I continue to take classes is that my colleagues and fellow students are so SMART! I learn so much from them. Here is a response to a Blackboard discussion question that Kelly Sims wrote. Verizon is currently the beneficiary of the services of this bright lady. This is information that I did not know and that I think we could all benefit from.
“Interesting that you brought up overbooking flights. Airlines are starting to do this more and more since they are trying to cut costs. They want to make sure they have 100% occupancy. I remember when I used to fly prior to 9-11 and I almost always had an empty seat in my row. Now, you hardly ever see an empty seat. According to an article by Knight-Ridder, an average of 50,000 passengers are bumped by the nation's ten largest airlines every year.
Legally, airlines are allowed to overbook and bump passengers. The Department of Transportation has rules governing airlines regarding overselling flights.
The airline must give you a written statement of your rights which explains who gets on an oversold flight and who doesn't. If you get bumped, what do you get in return. The following guidelines are used. If the airline provides substitute transportation:
• within an hour of your original flight - you do not get compensated
• one to two hours late on domestic flights or one to four on international - the airline must pay at least the equivalent of your one-way fare to your final destination, $400 max.
• more than two hours late domestically or more than four internationally, or if the airline doesn't make substitute arrangements, the compensation doubles, with an $800 ceiling.
Thanks, Kelly! Knowing this should keep the airlines on their toes!
All in Due Time- Boston Beer
In the 1970s and early 1980’s Jim Koch observed the growth in the wine industry in America. The University of California, Davis, and some state universities in New York published reports on which grape varieties grew best in which regions of the country and also offered winemaking and grape improvement seminars spurring a revolution in the American wine industry. The public responded to the new offerings in a big way. Jim, however, came from a family of Brew meisters and his passion was beer.
It is important to establish that Jim Koch is a well educated man with a BA, MBA and JD degrees from Harvard University. This fact helps to explain his judicious approach to his business and its growth. In 1984 with growing American acceptance of premium imported beers Jim Koch established Boston Beers using the best business research and ingredients at his disposal. He left a six figure income at Boston Consulting, a renowned consultant to the world’s business leaders to establish a micro-brewing legend. Using an old family recipe, Koch soon realized that a great beer would have a premium price tag. He was undeterred. With a solid understanding of pricing theory he took that as a positive marketing position. Premium price is consistent with quality and when it only amounts to 30 cents a bottle he knew that it was not a problem but an opportunity. Koch encountered the difficulty of finding adequate funding to starting a new business but he used his own savings and with just under a quarter of a million dollars in total of his own and the money from friends and family he began his enterprise. This bankroll would not allow for bricks and mortar so Koch subcontracted the brewing. He was adamant about quality. He made sure to get the endorsement of the right people and won the Best Beer in America contest at the Great American Beer Festival just three months after Samuel Adam’s introduction. With personal visits to local bars and persistence, he began to establish a following for the robust beer. He encountered problems with distributors so he bought a truck in the Boston area and Boston beer delivered its own beer initially. He was on his way.
Koch also understood that great advertising revolves around having a good story to tell- preferably one with a villain. He distinguished his product by advertising in a manner that was unlike the beer commercials that the public was used to seeing. Koch made a serious appeal to American patriotism about the quality of American made Samuel Adams beer pitting it against the invaders. He couched his ads in the language of the Declaration of Independence urging them to “declare their independence from European beers.” Even the beer’s name “Sam Adams” brought together the idea of both beer and patriotism.
Koch expanded Boston Beer judiciously. Region by region he expanded making sure that the quality and the sales were in place before taking on another region. By 1989 they had a sales force which was dedicated to their line of beer alone. By 1992 they went national and sales soared by 63%. They added new beers and new flavours. By 1994 they were marketing the beer with the highest alcohol content in the world. In 1995 Koch used his IPO as another attention gaining device with coupons on the beer packaging that allowed customers to buy 33 shares of the company for $15 per share or $495 and the stock rose within days to $30 per share. It was an exciting time for Koch. Still, he steered a straight course and kept costs low by continuing to contract brewing.
People were drinking less beer per capita for health, diet and appearance issues. When they did drink beer, they wanted it to be really good. In the mid nineties the big breweries could no longer afford to ignore the plethora of microbreweries. Boston Beer had become the seventh largest brewery in America and dominated the microbrewery category. The big boys began to respond with Ice beer and other distinctive beers. By the year 2000 there were so many microbreweries that they were eroding Boston Breweries market share so Koch responded by cutting products.
In 2002 Koch reasserted his natural talent for publicity and led a ten city tour pitting Boston Beers and three microbrewery beers from local vendors against his villains, the imports, in what he called the “Liquid Lunch Tour”. In all cities his beer triumphed in blind taste tests. Koch has consistently made his fight against the ‘foreigners” and has embraced other microbrews and America. In a time of crisis for microbrewers, Koch even came to their aid when hops were not available proving his good will.
By 2005, sentimentality or quality control finally lured Koch into the bricks and mortar world of brewery ownership when he bought the brewery in which his father had apprenticed. It cost him a lot of money in restoration and process improvement but it did not put the company in jeopardy. In addition, he bought another building to maintain production when the first went down. They were, however, able to reintroduce some of the beers that they had stopped producing and they won a variety of international awards as well. Here are some of the factors that I believe influenced Koch’s slower expansion and continual solidification of the business gains. Per capita consumption of alcohol In North America peaked in 1980s. The people that were in their twenties during the 1970s were the heaviest drinkers America has seen. Interest in more sophisticated beverages has increased. It appears that adults over 40 are fuelling the growth in market share. These boomers are the population that drink and the younger demographic is not likely to follow in their patterns. While the consumption of coffee is increasing in the younger demographic, fuelling the optimistic expansion of Starbucks, Koch realized that he was dealing with a very different phenomenon requiring a different approach.
I believe the secrets to Koch’s success are the following:
1. Knowledge in brewing and in business
2. Knowledge of his target market
3. A recession resistant product
4. A deep belief in the superiority of the product
5. A sense of timeliness and market readiness.He was aware that his demographic the biggest drinkers in modern history were aging and looking for a different experience at that point in time.
6. Self control- Lack of the need to build a personal edifice in the early days.The things the business needed like advertising were put ahead of what the company could live without like buildings of their own.
7. Judicious spending – he was dealing with the money of family and friendsso unlike many that are dealing with the money of strangers, he was careful.
8. Prudent expansion: maintaining quality, delivery and customer satisfaction
9. A great sense of theatre and psychological advertising hooks
10. Knowing how to pick a fight with “enemies” and support your friends.
11. Commitment to quality and service
12. A sense of destiny in bringing back a family legacy
13. He made it easy for people to buy what he sold (Koch showed barmen and retailers how they could make more money with premium beer).
“"Per capita consumption of beer and alcohol is going down, as it has for 20 years. It's no surprise. People are drinking less, and they're drinking better. Per capita beer consumption peaked 20 years ago, and it's down almost 20 percent. And that's true with all alcohol. .So if people aren't drinking as much individually, the key is to trade them up so that what they are drinking translates into higher profits.” Jim Koch said to a group of MBA students.
Today the top five largest brewers are: Anheuser-Busch, Miller, Coors, S&P and Boston Beer. Boston beer has just registered its 16th consecutive year of growth. To stay there Koch educates retailers in the practice of ‘trading up’. Merchandising is the message. He encourages them to put higher profit beer like Samuel Adams up front in a more prominent position so that the retail makes more profit while also encouraging them to make customers work to find cheaper lower profit brands. He believes that two thirds of decisions are made at point of purchase so that is the place to nab them.
"During the last recession in the late '80s and early '90s, we continued to grow at enormous rates," he explains. "What happens during an economic downturn is that better beer becomes a very affordable indulgence. It's not like you're buying a $40 bottle of wine. It's not like you're going out for a $100 dinner. You pay $2 or $3 more for a 6-pack of beer….You're not going to stop treating yourself." Koch
Koch found his market segment and he is mining it. Samuel Adams has introduced ‘Utopias’ which have been recognized by the Guiness Book of World records as the strongest beer in the world with up to 27% alcohol by volume. A noncarbonated beer, it is aged in scotch, cognac or port barrels for almost a year and then uniquely packaged. It sells for $150 per bottle. In 2009 new flavours were introduced and Koch continued to involve the customer by having consumers vote on their favourites. Boston Beers began the Imperial series of even better beers with higher alcohol content at more regular prices the same year. They also produced a limited brew only on tap in select bars which supports an entrepreneurial fund which supports new business ventures. In addition, the manufacture Twisted Iced Tea and HardCore hard apple cider is marketed under a separate name. Like the wine industry that he has emulated, he offers limited “vintages” of beers in his brewery gift shop along with glasses specially designed to enhance the beer drinking experience by funnelling the aromas to the nose.
2009 was a busy year because the Boston Beer company jointed with Weihenstephan, a German brewery to produce a new craft beer for the German and US markets in 2010. In twist sure to appeal to Koch the German brewery was founded in 1040 by Benedictine monks. I bet he will weave a story from that! Koch has become a very subtle invader of Europe! They say what comes around goes around or as the tag line for Samuel Adams says: All in due time!
It is important to establish that Jim Koch is a well educated man with a BA, MBA and JD degrees from Harvard University. This fact helps to explain his judicious approach to his business and its growth. In 1984 with growing American acceptance of premium imported beers Jim Koch established Boston Beers using the best business research and ingredients at his disposal. He left a six figure income at Boston Consulting, a renowned consultant to the world’s business leaders to establish a micro-brewing legend. Using an old family recipe, Koch soon realized that a great beer would have a premium price tag. He was undeterred. With a solid understanding of pricing theory he took that as a positive marketing position. Premium price is consistent with quality and when it only amounts to 30 cents a bottle he knew that it was not a problem but an opportunity. Koch encountered the difficulty of finding adequate funding to starting a new business but he used his own savings and with just under a quarter of a million dollars in total of his own and the money from friends and family he began his enterprise. This bankroll would not allow for bricks and mortar so Koch subcontracted the brewing. He was adamant about quality. He made sure to get the endorsement of the right people and won the Best Beer in America contest at the Great American Beer Festival just three months after Samuel Adam’s introduction. With personal visits to local bars and persistence, he began to establish a following for the robust beer. He encountered problems with distributors so he bought a truck in the Boston area and Boston beer delivered its own beer initially. He was on his way.
Koch also understood that great advertising revolves around having a good story to tell- preferably one with a villain. He distinguished his product by advertising in a manner that was unlike the beer commercials that the public was used to seeing. Koch made a serious appeal to American patriotism about the quality of American made Samuel Adams beer pitting it against the invaders. He couched his ads in the language of the Declaration of Independence urging them to “declare their independence from European beers.” Even the beer’s name “Sam Adams” brought together the idea of both beer and patriotism.
Koch expanded Boston Beer judiciously. Region by region he expanded making sure that the quality and the sales were in place before taking on another region. By 1989 they had a sales force which was dedicated to their line of beer alone. By 1992 they went national and sales soared by 63%. They added new beers and new flavours. By 1994 they were marketing the beer with the highest alcohol content in the world. In 1995 Koch used his IPO as another attention gaining device with coupons on the beer packaging that allowed customers to buy 33 shares of the company for $15 per share or $495 and the stock rose within days to $30 per share. It was an exciting time for Koch. Still, he steered a straight course and kept costs low by continuing to contract brewing.
People were drinking less beer per capita for health, diet and appearance issues. When they did drink beer, they wanted it to be really good. In the mid nineties the big breweries could no longer afford to ignore the plethora of microbreweries. Boston Beer had become the seventh largest brewery in America and dominated the microbrewery category. The big boys began to respond with Ice beer and other distinctive beers. By the year 2000 there were so many microbreweries that they were eroding Boston Breweries market share so Koch responded by cutting products.
In 2002 Koch reasserted his natural talent for publicity and led a ten city tour pitting Boston Beers and three microbrewery beers from local vendors against his villains, the imports, in what he called the “Liquid Lunch Tour”. In all cities his beer triumphed in blind taste tests. Koch has consistently made his fight against the ‘foreigners” and has embraced other microbrews and America. In a time of crisis for microbrewers, Koch even came to their aid when hops were not available proving his good will.
By 2005, sentimentality or quality control finally lured Koch into the bricks and mortar world of brewery ownership when he bought the brewery in which his father had apprenticed. It cost him a lot of money in restoration and process improvement but it did not put the company in jeopardy. In addition, he bought another building to maintain production when the first went down. They were, however, able to reintroduce some of the beers that they had stopped producing and they won a variety of international awards as well. Here are some of the factors that I believe influenced Koch’s slower expansion and continual solidification of the business gains. Per capita consumption of alcohol In North America peaked in 1980s. The people that were in their twenties during the 1970s were the heaviest drinkers America has seen. Interest in more sophisticated beverages has increased. It appears that adults over 40 are fuelling the growth in market share. These boomers are the population that drink and the younger demographic is not likely to follow in their patterns. While the consumption of coffee is increasing in the younger demographic, fuelling the optimistic expansion of Starbucks, Koch realized that he was dealing with a very different phenomenon requiring a different approach.
I believe the secrets to Koch’s success are the following:
1. Knowledge in brewing and in business
2. Knowledge of his target market
3. A recession resistant product
4. A deep belief in the superiority of the product
5. A sense of timeliness and market readiness.He was aware that his demographic the biggest drinkers in modern history were aging and looking for a different experience at that point in time.
6. Self control- Lack of the need to build a personal edifice in the early days.The things the business needed like advertising were put ahead of what the company could live without like buildings of their own.
7. Judicious spending – he was dealing with the money of family and friendsso unlike many that are dealing with the money of strangers, he was careful.
8. Prudent expansion: maintaining quality, delivery and customer satisfaction
9. A great sense of theatre and psychological advertising hooks
10. Knowing how to pick a fight with “enemies” and support your friends.
11. Commitment to quality and service
12. A sense of destiny in bringing back a family legacy
13. He made it easy for people to buy what he sold (Koch showed barmen and retailers how they could make more money with premium beer).
“"Per capita consumption of beer and alcohol is going down, as it has for 20 years. It's no surprise. People are drinking less, and they're drinking better. Per capita beer consumption peaked 20 years ago, and it's down almost 20 percent. And that's true with all alcohol. .So if people aren't drinking as much individually, the key is to trade them up so that what they are drinking translates into higher profits.” Jim Koch said to a group of MBA students.
Today the top five largest brewers are: Anheuser-Busch, Miller, Coors, S&P and Boston Beer. Boston beer has just registered its 16th consecutive year of growth. To stay there Koch educates retailers in the practice of ‘trading up’. Merchandising is the message. He encourages them to put higher profit beer like Samuel Adams up front in a more prominent position so that the retail makes more profit while also encouraging them to make customers work to find cheaper lower profit brands. He believes that two thirds of decisions are made at point of purchase so that is the place to nab them.
"During the last recession in the late '80s and early '90s, we continued to grow at enormous rates," he explains. "What happens during an economic downturn is that better beer becomes a very affordable indulgence. It's not like you're buying a $40 bottle of wine. It's not like you're going out for a $100 dinner. You pay $2 or $3 more for a 6-pack of beer….You're not going to stop treating yourself." Koch
Koch found his market segment and he is mining it. Samuel Adams has introduced ‘Utopias’ which have been recognized by the Guiness Book of World records as the strongest beer in the world with up to 27% alcohol by volume. A noncarbonated beer, it is aged in scotch, cognac or port barrels for almost a year and then uniquely packaged. It sells for $150 per bottle. In 2009 new flavours were introduced and Koch continued to involve the customer by having consumers vote on their favourites. Boston Beers began the Imperial series of even better beers with higher alcohol content at more regular prices the same year. They also produced a limited brew only on tap in select bars which supports an entrepreneurial fund which supports new business ventures. In addition, the manufacture Twisted Iced Tea and HardCore hard apple cider is marketed under a separate name. Like the wine industry that he has emulated, he offers limited “vintages” of beers in his brewery gift shop along with glasses specially designed to enhance the beer drinking experience by funnelling the aromas to the nose.
2009 was a busy year because the Boston Beer company jointed with Weihenstephan, a German brewery to produce a new craft beer for the German and US markets in 2010. In twist sure to appeal to Koch the German brewery was founded in 1040 by Benedictine monks. I bet he will weave a story from that! Koch has become a very subtle invader of Europe! They say what comes around goes around or as the tag line for Samuel Adams says: All in due time!
Starbucks Makes Me Nervous!
Why Starbucks Makes me Nervous
I like the atmosphere at Starbucks especially when I get one of the big comfortable chairs. I feel cooler than I am when I am there. The cocoa that I drink there is made to measure with just the right sweetness and cocoa flavourings. The big cup fits my hands and the lemon poppy seed cake is scrumptious. I love their commitment to their employees. So why does Starbuck’s business model make me nervous?
First, I have to admit to a little history. In the early 1990s I helped to start a real estate company. My Prof in the certification courses chose me as a friend and a partner in the business that she planned to start. After a short stint with the company she was working for we both decided to go out as a team. Unfortunately, her brother who was recently fired from the firm also got involved at the last moment and brought in his buddies, self perceived tycoons. The project went from a two partner business concept to a glitz and glamour place called “Realty Force” and THE Force was not with us. They spent a ton of money on the lobby with marble and original art when most people came in from the parking lot entrance in a working class town. I was lucky enough to get out almost before I got in and those that stayed sued the houses from one another and lost a lot of money. So perhaps it is just the big push to greatness and the echoes of the past that scare me about Starbucks. After all they are successful in the extreme and I am just a small time Canadian woman.
Howard Schultz is a man who runs with his vision even when everyone around him is shouting warnings. (Sometimes the people that are shouting need to be listened to so that is factor one in accounting for my nervousness). He also is a man who leads with his convictions that doing the right thing leads to the right outcome. (This approach has gotten me into trouble more than a few times so this is factor 2 of my nervousness.) Factor 3 is that he majored in Public speaking and Communications and I wonder if he has something of substance to say or if he is just a man who says things well. Is it substance or just style? Sport scholarship students and sales experts like Schultz always make me nervous about the business outcome!
One factor that does not make me nervous about his business model is that he is selling coffee. It is a very profitable business as I learned when we started a coffee fund where we sold coffee in our General Motors skilled trade shop (I was the first woman to take a skilled trade at GM Canada back in the 70s). We financed our benevolent fund and fully funded our social activities all from the proceeds of coffee made in our own area for 50 cents a cup and we almost had more money than we could spend. Thus I do know that coffee sales are profitable and Shultz proved that with his first stores even after he had repeated the “glitz and glamour” spending of $125,000 initial decorating investment just like my real estate crash and burn temporary partners.
I got over my nervousness about another thing with Starbucks too. Shultz seems to really understand that people who feel like part of the company, who know that ‘people as greatest resource’ is not just as slogan in their workplace are happier and more productive workers who stay. The fact that he did his homework and knew that turnover costs $3000 dollars calms me too. His benefit program for everyone who works over 20 hours per week makes him more than a message hocking jock to me. His love of his product and of its quality in the development of the shrink wrapping of coffee for distant stores also calm my shakes (even as a non coffee drinker) and the fact that he cares about how the stores smell makes me think that he just might really have more substance than just a caffeine soaked expansion adrenaline mainliner.
However, I gain back all the nervousness I surrendered when I see all of the times he went back to the financing trough even after the IPO. What is it, I ask myself, that he sees and why does it all have to be done right now? Then, in a burst of insight, I get it!
He is working what I now see as the ‘milkweed pod’ model of business. I see it as very organic and season specific. What he knew (not just thought- but knew) from the beginning is that the seed of his marketing plan only had a certain window of opportunity and he had to have his seed in the ground and sprouting in every area before someone else claimed the field and the future revenue stream. The future of the profitability of the market had a long future horizon because people were learning about and loving better coffee and coffee consumption was increasing. In becoming a brand and giving the key guarantee of a consistent comfortable experience, the likelihood of survival and long term loyalty increase. Once the pod explodes the time is now.
The key to what Shultz knew is that market was almost equally ready for his product everywhere- spring is spring and no other season will yield the miracles of the season. Either he established his dominance there or someone else would provide a similar experience and addict that area to their coffee and experience. The Starbucks’ reverse jinx (Hartley, p39) would work just as well for someone else who set the model for the region.
The problem or natural consequence of the ‘milkweed pod” business model is that you have to be prepared for what will happen in drought, in winter, and in stony fields and recessions. In all organic growth from the branches of trees to the dendrites of the brain there are seasons of jubilant growth that are followed by times of die back or pruning. I think that Starbucks is in this stage now.
The good news is that the tree and the brain do not normally die in the process but they are changed in shape and capacity. The fit branches remain well nourished and the tree grows on that side but the weaker branches fall off in the driving rain or wind storm. Our pain in the business experience is that this disrupts people’s lives when they lose their jobs when a Starbucks outlet closes down or they cannot make ends meet with fewer hours. The good news (often for someone else) is that spring comes again and that often brings new growth.
Another piece of good news is that like the growth of the dendrites in a human brain, each experience makes Starbuck’s smarter. The worry about cannibalization is almost spurious because growth and area coverage is what the process is about. When customers prefer one store over another it tells us something important about geography or fertility of the area for supporting the business. In organic growth, the tree branches reach to find more sun for more fuel where ever they can. “A recent Wall Street Journal article suggested that additional Starbucks, far from cannibalizing, may instead expand the total market for coffee to the entire community so that all benefit.” (Hartley, p 39). There does come a time where it cannot grow any more but I do not believe that point has been reached. When it is fully mature, it then does something different. It sends out messengers into the future in the form of new seed for new fields of business.
All of the points that made me nervous and all of the points that calmed me down are the skills that made Schultz a great entrepreneur. Schultz built Starbucks without much in the way of advertising because he understood that Starbucks is more of a feeling and an experience than an idea. It is almost an urge. I am feeling much calmer about Starbucks now and in fact, might go for a cup of cocoa.
I like the atmosphere at Starbucks especially when I get one of the big comfortable chairs. I feel cooler than I am when I am there. The cocoa that I drink there is made to measure with just the right sweetness and cocoa flavourings. The big cup fits my hands and the lemon poppy seed cake is scrumptious. I love their commitment to their employees. So why does Starbuck’s business model make me nervous?
First, I have to admit to a little history. In the early 1990s I helped to start a real estate company. My Prof in the certification courses chose me as a friend and a partner in the business that she planned to start. After a short stint with the company she was working for we both decided to go out as a team. Unfortunately, her brother who was recently fired from the firm also got involved at the last moment and brought in his buddies, self perceived tycoons. The project went from a two partner business concept to a glitz and glamour place called “Realty Force” and THE Force was not with us. They spent a ton of money on the lobby with marble and original art when most people came in from the parking lot entrance in a working class town. I was lucky enough to get out almost before I got in and those that stayed sued the houses from one another and lost a lot of money. So perhaps it is just the big push to greatness and the echoes of the past that scare me about Starbucks. After all they are successful in the extreme and I am just a small time Canadian woman.
Howard Schultz is a man who runs with his vision even when everyone around him is shouting warnings. (Sometimes the people that are shouting need to be listened to so that is factor one in accounting for my nervousness). He also is a man who leads with his convictions that doing the right thing leads to the right outcome. (This approach has gotten me into trouble more than a few times so this is factor 2 of my nervousness.) Factor 3 is that he majored in Public speaking and Communications and I wonder if he has something of substance to say or if he is just a man who says things well. Is it substance or just style? Sport scholarship students and sales experts like Schultz always make me nervous about the business outcome!
One factor that does not make me nervous about his business model is that he is selling coffee. It is a very profitable business as I learned when we started a coffee fund where we sold coffee in our General Motors skilled trade shop (I was the first woman to take a skilled trade at GM Canada back in the 70s). We financed our benevolent fund and fully funded our social activities all from the proceeds of coffee made in our own area for 50 cents a cup and we almost had more money than we could spend. Thus I do know that coffee sales are profitable and Shultz proved that with his first stores even after he had repeated the “glitz and glamour” spending of $125,000 initial decorating investment just like my real estate crash and burn temporary partners.
I got over my nervousness about another thing with Starbucks too. Shultz seems to really understand that people who feel like part of the company, who know that ‘people as greatest resource’ is not just as slogan in their workplace are happier and more productive workers who stay. The fact that he did his homework and knew that turnover costs $3000 dollars calms me too. His benefit program for everyone who works over 20 hours per week makes him more than a message hocking jock to me. His love of his product and of its quality in the development of the shrink wrapping of coffee for distant stores also calm my shakes (even as a non coffee drinker) and the fact that he cares about how the stores smell makes me think that he just might really have more substance than just a caffeine soaked expansion adrenaline mainliner.
However, I gain back all the nervousness I surrendered when I see all of the times he went back to the financing trough even after the IPO. What is it, I ask myself, that he sees and why does it all have to be done right now? Then, in a burst of insight, I get it!
He is working what I now see as the ‘milkweed pod’ model of business. I see it as very organic and season specific. What he knew (not just thought- but knew) from the beginning is that the seed of his marketing plan only had a certain window of opportunity and he had to have his seed in the ground and sprouting in every area before someone else claimed the field and the future revenue stream. The future of the profitability of the market had a long future horizon because people were learning about and loving better coffee and coffee consumption was increasing. In becoming a brand and giving the key guarantee of a consistent comfortable experience, the likelihood of survival and long term loyalty increase. Once the pod explodes the time is now.
The key to what Shultz knew is that market was almost equally ready for his product everywhere- spring is spring and no other season will yield the miracles of the season. Either he established his dominance there or someone else would provide a similar experience and addict that area to their coffee and experience. The Starbucks’ reverse jinx (Hartley, p39) would work just as well for someone else who set the model for the region.
The problem or natural consequence of the ‘milkweed pod” business model is that you have to be prepared for what will happen in drought, in winter, and in stony fields and recessions. In all organic growth from the branches of trees to the dendrites of the brain there are seasons of jubilant growth that are followed by times of die back or pruning. I think that Starbucks is in this stage now.
The good news is that the tree and the brain do not normally die in the process but they are changed in shape and capacity. The fit branches remain well nourished and the tree grows on that side but the weaker branches fall off in the driving rain or wind storm. Our pain in the business experience is that this disrupts people’s lives when they lose their jobs when a Starbucks outlet closes down or they cannot make ends meet with fewer hours. The good news (often for someone else) is that spring comes again and that often brings new growth.
Another piece of good news is that like the growth of the dendrites in a human brain, each experience makes Starbuck’s smarter. The worry about cannibalization is almost spurious because growth and area coverage is what the process is about. When customers prefer one store over another it tells us something important about geography or fertility of the area for supporting the business. In organic growth, the tree branches reach to find more sun for more fuel where ever they can. “A recent Wall Street Journal article suggested that additional Starbucks, far from cannibalizing, may instead expand the total market for coffee to the entire community so that all benefit.” (Hartley, p 39). There does come a time where it cannot grow any more but I do not believe that point has been reached. When it is fully mature, it then does something different. It sends out messengers into the future in the form of new seed for new fields of business.
All of the points that made me nervous and all of the points that calmed me down are the skills that made Schultz a great entrepreneur. Schultz built Starbucks without much in the way of advertising because he understood that Starbucks is more of a feeling and an experience than an idea. It is almost an urge. I am feeling much calmer about Starbucks now and in fact, might go for a cup of cocoa.
Sunday, April 25, 2010
Placebos and pricing
Placebo (for marketplace this has to go under pricing)6 minute video
This 6 minute video by Behavioural Economist Dan Ariely speaks about placebos. What does that have to do with marketing? I'm glad you asked! He brings the topic around to pricing which is an important componenet of marketing decisions.
Dan Ariely
This 6 minute video by Behavioural Economist Dan Ariely speaks about placebos. What does that have to do with marketing? I'm glad you asked! He brings the topic around to pricing which is an important componenet of marketing decisions.
Dan Ariely
Saturday, April 24, 2010
Who is Herb Kelleher?
Who is Herb Kelleher?
I forgot to let you know that the gentleman below is the former CEO and cofounder of Southwest Airlines, one of the few successful airlines in the US.
I forgot to let you know that the gentleman below is the former CEO and cofounder of Southwest Airlines, one of the few successful airlines in the US.
Friday, April 23, 2010
Poor Business
What would Henry Ford Say?
A business that makes nothing but money is a poor business.- Henry Ford
A business that makes nothing but money is a poor business.- Henry Ford
The 4 Golden Rules of Commercial Sound
4 Golden Rules of Commercial Sound (5 minute)
Julian Treasure is the chair of the Sound Agency, a firm that advises worldwide businesses and speaks on how to use sound. He asks us to pay attention to the sounds that surround us. How do they make us feel: productive, stressed, energized, acquisitive? Treasure is the author of the book Sound Business and keeps a blog by the same name that ruminates on aural matters. In the early 1980s, Treasure was the drummer for the band Transmitters.
Julian Treasure is the chair of the Sound Agency, a firm that advises worldwide businesses and speaks on how to use sound. He asks us to pay attention to the sounds that surround us. How do they make us feel: productive, stressed, energized, acquisitive? Treasure is the author of the book Sound Business and keeps a blog by the same name that ruminates on aural matters. In the early 1980s, Treasure was the drummer for the band Transmitters.
Thursday, April 22, 2010
Creativity and Innovation
How does Creativity come about? Radical innovation can come from the consumer to the company or producer. Inventors do not always know what the invention is for. Users are more often the creators of huge innovation.
Wednesday, April 21, 2010
Stupid vs. Smart- Where does innovation come from?
Innovation is the watchword of today but where does it come from? This commercial takes the form of an interesting social commentary and urging. Take a look and let me know what you think!
Tuesday, April 20, 2010
Profit and Sustainability- Ray Anderson's Story
Ray Anderson – Recovering Plunder
Ray Anderson is the founder of Interface, the company that makes carpet tiles. His life was utterly changed when he read a book by Paul Hawkens called the Ecology of Commerce. He now called himself a ‘recovering plunderer’. He realized that with his company's global reach and manufacturing footprint, he was in a position to do something very real, very important, in building a sustainable world. Anderson focused the company's attention on sustainable decision making, taking a hard look at suppliers, manufacturing processes, and the beginning-to-end life cycle of all its products. (For example: If you can't find a place to recycle a worn or damaged Flor tile, Interface invites you to send it back to them and they'll do it for you.) They call this drive Mission Zero: "our promise to eliminate any negative impact our company may have on the environment by the year 2020."
Anderson’s company has increased sales and doubled profits while turning the traditional "take / make / waste" industrial system upside down. In a gentle, understated way, he shares a powerful vision for sustainable commerce
Ray Anderson is the founder of Interface, the company that makes carpet tiles. His life was utterly changed when he read a book by Paul Hawkens called the Ecology of Commerce. He now called himself a ‘recovering plunderer’. He realized that with his company's global reach and manufacturing footprint, he was in a position to do something very real, very important, in building a sustainable world. Anderson focused the company's attention on sustainable decision making, taking a hard look at suppliers, manufacturing processes, and the beginning-to-end life cycle of all its products. (For example: If you can't find a place to recycle a worn or damaged Flor tile, Interface invites you to send it back to them and they'll do it for you.) They call this drive Mission Zero: "our promise to eliminate any negative impact our company may have on the environment by the year 2020."
Anderson’s company has increased sales and doubled profits while turning the traditional "take / make / waste" industrial system upside down. In a gentle, understated way, he shares a powerful vision for sustainable commerce
Monday, April 19, 2010
The Divine Proportion in Marketing
The Golden Mean, The Divine Proportion, The Golden Section, The Fibonacci Sequence, Phi.....
1,1,2,3,5,8,13,21........
The 7 minute video below discusses modern products designed using these dimensions to attract human attention. Cell phones, sunflowers, architecture, cereal boxes, seashells and much more conform to these proportions. Design will be one of the factors that distinguish products in the future and any marketer that forgets the natural beauty of the Golden Mean will lose customers.
1,1,2,3,5,8,13,21........
The 7 minute video below discusses modern products designed using these dimensions to attract human attention. Cell phones, sunflowers, architecture, cereal boxes, seashells and much more conform to these proportions. Design will be one of the factors that distinguish products in the future and any marketer that forgets the natural beauty of the Golden Mean will lose customers.
Brand Experts 9 Life Lessons
Matthew Child’s 9 Life Lessons
"A specialist in digital branding and interactive services, Matthew Childs seeks out new trends in competitive markets. As an advertising lead at Razorfish, Childs draws from extensive experience in the marketing world, having led Nike's global internal communications department. Before that, he was a writer and editor for Outside Magazine and Playboy.Apart from his career, Childs' passion is rock climbing."
"Childs says the Internet offers immense potential for businesses to communicate with clients, and he enjoys the challenge of providing that link. "Most agencies, most clients are very navel-gazing.""
St. Petersburg Times
"A specialist in digital branding and interactive services, Matthew Childs seeks out new trends in competitive markets. As an advertising lead at Razorfish, Childs draws from extensive experience in the marketing world, having led Nike's global internal communications department. Before that, he was a writer and editor for Outside Magazine and Playboy.Apart from his career, Childs' passion is rock climbing."
"Childs says the Internet offers immense potential for businesses to communicate with clients, and he enjoys the challenge of providing that link. "Most agencies, most clients are very navel-gazing.""
St. Petersburg Times
Sunday, April 18, 2010
Seth Godin - Is it REMARKABLE?
How to Stand out in a world with too many choices and too little time.
Marketers should be listening to Twitter users
Listening to the voices of Twitter
As marketing persons or marketing students ignoring social media is a huge mistake.
As marketing persons or marketing students ignoring social media is a huge mistake.
Rory Sutherland and Behavioural Economics
Rory Sutherland –the Ad Man – and Behavioural Economics
New technology and behavioural economics are the way of future for marketing.
New technology and behavioural economics are the way of future for marketing.
The Daimler Chrylser Merger: A Lost War of Assimilation (Part 3)
The Daimler Chrysler Merger: A Lost War of Assimilation (Part 3)
Direct meddling by Schrempp from Daimler led to large losses at Chrysler. At first only two more executives came from Daimler to take the rei(g)ns: Dieter Zetsche and Wolfgang Bernhart. The first to be fired was the head of Sales and Marketing. He was replaced by a Mexican Chrysler executive and the CEO spot was given to a Canadian. This indicates a strong tendency to diminish the American contribution and illustrates a negative mindset. Within 2 months, Zetsche had designed a three year turn around plan that called for cutting 26,000 jobs and eliminating 6 plants violating many of Gebler’s Ten Merger Commandments including : Take time to find out what makes them tick, take it one function at a time, get acquainted and find out what drives talent. Meantime, Bernhart alienated suppliers (Gebler’s Commandment: Integrate don’t alienate).
Bringing German staff to America with the mandate of “Fixing the place” was simply the wrong tactic born of cultural ignorance and arrogance. To initiate a reorganization before completing the integration was poor business practice. To then purchase a third of Mitubichi at the same time was arrogance to the point of fool hardiness. In a time of such instability, initiating a restructuring with German executives in American positions was doomed to failure. The cultural differences were magnified in such issues as sexual harassment, smoking and drinking in the workplace and hierarchical and dominance levels. All the differences were magnified in an adversarial environment. Authoritarian tendencies alienated workers at all levels. Insecurity from dramatic and sweeping changes reduced performance and quality.
In my opinion, the Daimler executives were largely responsible for the decline of the value of the company. They embraced the entire deal with the wrong spirit. The right spirit would have been one of collaboration not exploitation. They were not able to hide their agenda for long and when it was fully exposed from the mouth of the liar himself, the Americans reacted like disillusioned brides might- some went home to momma, others pouted and refused to participate and the best of them stood their ground and reasoned until they were ‘divorced’. While one would think that individuals like Eaton who had led the company into the fiasco would have had more fight for the company in him, he did not have the stomach for it.
A CEO with her head on straight would be able to put the good of the entire enterprise above previous loyalties and national insecurities. I cannot understand why errors of the magnitude demonstrated in this case do not have more severe consequences for the people involved. Perhaps it is just the wisdom of hindsight but keeping people in their positions until the integration was completed seems far more logical. Human resources should have been in on the merger from the very early stages dealing with potential issues and smoothing the people part of the merger. The American talent in particular should have been assured of a position for a period of time such as a year or two. They understood their own systems and labour resources. Clear communication of a plan and of the process for moving forward should have been developed. If Daimler had intended for Chrysler to run independently for a period of time that should have been communicated and their progress should have been monitored. Exchanges of personnel should have been arranged to integrate the two cultures. While they did try to educate the opposite team about such issues as sexual harassment and German dining etiquette, they missed the more vital issues of two cultures working in cooperation.
Most mergers fail. The largest contributor to this failure comes from cultures that clash but it can be done successfully. Keeping stability should be a first priority and that is achieved by keeping the lines of authority in tact until such time as the foundational integration is accomplished. According to Gebler’s research there are rules to follow to beat the odds: 1. Don't act like a conqueror. 2. Find out what makes the new team tick. 3. Take it one function at a time. 4. Integrate, don't alienate. 5. Get acquainted. 6. Understand what drives talent. 7. Don't assume you will be heard. 8. Bridge the gap. 9. Lend an ear. 10. Anticipate some clash. Daimler’s more dominant executive not only violated these rules but they destabilized Chrysler with lies and poor human resource practices. In the process they guaranteed the failure of the enterprise.
Direct meddling by Schrempp from Daimler led to large losses at Chrysler. At first only two more executives came from Daimler to take the rei(g)ns: Dieter Zetsche and Wolfgang Bernhart. The first to be fired was the head of Sales and Marketing. He was replaced by a Mexican Chrysler executive and the CEO spot was given to a Canadian. This indicates a strong tendency to diminish the American contribution and illustrates a negative mindset. Within 2 months, Zetsche had designed a three year turn around plan that called for cutting 26,000 jobs and eliminating 6 plants violating many of Gebler’s Ten Merger Commandments including : Take time to find out what makes them tick, take it one function at a time, get acquainted and find out what drives talent. Meantime, Bernhart alienated suppliers (Gebler’s Commandment: Integrate don’t alienate).
Bringing German staff to America with the mandate of “Fixing the place” was simply the wrong tactic born of cultural ignorance and arrogance. To initiate a reorganization before completing the integration was poor business practice. To then purchase a third of Mitubichi at the same time was arrogance to the point of fool hardiness. In a time of such instability, initiating a restructuring with German executives in American positions was doomed to failure. The cultural differences were magnified in such issues as sexual harassment, smoking and drinking in the workplace and hierarchical and dominance levels. All the differences were magnified in an adversarial environment. Authoritarian tendencies alienated workers at all levels. Insecurity from dramatic and sweeping changes reduced performance and quality.
In my opinion, the Daimler executives were largely responsible for the decline of the value of the company. They embraced the entire deal with the wrong spirit. The right spirit would have been one of collaboration not exploitation. They were not able to hide their agenda for long and when it was fully exposed from the mouth of the liar himself, the Americans reacted like disillusioned brides might- some went home to momma, others pouted and refused to participate and the best of them stood their ground and reasoned until they were ‘divorced’. While one would think that individuals like Eaton who had led the company into the fiasco would have had more fight for the company in him, he did not have the stomach for it.
A CEO with her head on straight would be able to put the good of the entire enterprise above previous loyalties and national insecurities. I cannot understand why errors of the magnitude demonstrated in this case do not have more severe consequences for the people involved. Perhaps it is just the wisdom of hindsight but keeping people in their positions until the integration was completed seems far more logical. Human resources should have been in on the merger from the very early stages dealing with potential issues and smoothing the people part of the merger. The American talent in particular should have been assured of a position for a period of time such as a year or two. They understood their own systems and labour resources. Clear communication of a plan and of the process for moving forward should have been developed. If Daimler had intended for Chrysler to run independently for a period of time that should have been communicated and their progress should have been monitored. Exchanges of personnel should have been arranged to integrate the two cultures. While they did try to educate the opposite team about such issues as sexual harassment and German dining etiquette, they missed the more vital issues of two cultures working in cooperation.
Most mergers fail. The largest contributor to this failure comes from cultures that clash but it can be done successfully. Keeping stability should be a first priority and that is achieved by keeping the lines of authority in tact until such time as the foundational integration is accomplished. According to Gebler’s research there are rules to follow to beat the odds: 1. Don't act like a conqueror. 2. Find out what makes the new team tick. 3. Take it one function at a time. 4. Integrate, don't alienate. 5. Get acquainted. 6. Understand what drives talent. 7. Don't assume you will be heard. 8. Bridge the gap. 9. Lend an ear. 10. Anticipate some clash. Daimler’s more dominant executive not only violated these rules but they destabilized Chrysler with lies and poor human resource practices. In the process they guaranteed the failure of the enterprise.
Saturday, April 17, 2010
The Economics Of Advertising - Starbucks Example
The Economics Of Advertising
This prof is teaching about the economics of advertising. There is some math involved. This short video is a good primer or review of the issues of supply, demand and price elasticity.
This prof is teaching about the economics of advertising. There is some math involved. This short video is a good primer or review of the issues of supply, demand and price elasticity.
Flying new Colors
This music video by Vanessa Williams may have been part of your childhood but it captures many of the important themes for marketers today. Perhaps it is a good time for a refresher course in the current values of consumers. I hope you'll take the time to listen to this song. The lyrics capture much that we should be paying attention to - and it is from Disney- one of the world's best marketers.
Daimler Chrysler Merger (Part 2)
The Daimler Chrysler Merger: A Lost War of Assimilation (Part 2)
It seems to me that Daimler had initially intended to allow Chrysler to continue to run its own show at least for a time. Problems started even before the merger was announced, however, when the integration teams functioned poorly. The Americans were submerged by the Germans in every aspect of announcement and communication. While initial media coverage was favourable, it went sour quickly once Schrempp revealed his deception.
The initial problem was that many Chrysler executives saw the deal and its ramifications and chose to leave. This is the point at which I believe the war was lost. Four VPs left in the first 3 months. Some went to Ford and others to GM. Chrysler’s decline did not start when staff was replaced. It came through initial neglect and confusion including lack of direction and security. The company needed to communicate quickly with the key executives to assure them of their importance and their mandate. From 1998 to 2001 Chrysler was not taken over nor was it granted an equal status. It was not until eleven months after Eaton’s retirement that Schrempp brought in his own team and by then the company had begun to flounder. Even a prompt take over would have been better.
Daimler had underestimated what the loss of key personnel and revelation of the deception would do. After the merger, many observed the co-CEO Eaton was withdrawn, detached and dispassionate about the new company. He avoided communication with Schrempp. I attribute this to the reality that he had been lied to and disillusioned. Schrempp admonished him to “act like a co-chairman and step up to the podium” but it does not appear to have had an effect. Peter Stallkamp reported that Eaton “had checked out about a year before he left. The managers feared for their careers and in the absence of assurance, they assumed the worst. There were a good eighteen months when we were being hollowed out from the core by the German’s inaction and our own paralysis.”
The board of directors of the new company was heavily weighted in favour of the Germans. By the end of 2000 eleven top executives had left Chrysler and that included the replacement CEO and the legendary designer, Gale. When Stallkamp left, Lehman Brothers down graded the stock. Analysts wondered in print why there was no place for one of the most talented men in the automotive industry. It was rumoured that Stallkamp wanted to take a slower more unified approach to integrating the companies and that Schrempp had overruled the approach. American investors were worried but the Daimler executive was far more worried about the opinions of the European investors. Morale was steadily declining. Stallkamp was quickly replaced by a German CFO.
(Part 3 to be posted soon)
It seems to me that Daimler had initially intended to allow Chrysler to continue to run its own show at least for a time. Problems started even before the merger was announced, however, when the integration teams functioned poorly. The Americans were submerged by the Germans in every aspect of announcement and communication. While initial media coverage was favourable, it went sour quickly once Schrempp revealed his deception.
The initial problem was that many Chrysler executives saw the deal and its ramifications and chose to leave. This is the point at which I believe the war was lost. Four VPs left in the first 3 months. Some went to Ford and others to GM. Chrysler’s decline did not start when staff was replaced. It came through initial neglect and confusion including lack of direction and security. The company needed to communicate quickly with the key executives to assure them of their importance and their mandate. From 1998 to 2001 Chrysler was not taken over nor was it granted an equal status. It was not until eleven months after Eaton’s retirement that Schrempp brought in his own team and by then the company had begun to flounder. Even a prompt take over would have been better.
Daimler had underestimated what the loss of key personnel and revelation of the deception would do. After the merger, many observed the co-CEO Eaton was withdrawn, detached and dispassionate about the new company. He avoided communication with Schrempp. I attribute this to the reality that he had been lied to and disillusioned. Schrempp admonished him to “act like a co-chairman and step up to the podium” but it does not appear to have had an effect. Peter Stallkamp reported that Eaton “had checked out about a year before he left. The managers feared for their careers and in the absence of assurance, they assumed the worst. There were a good eighteen months when we were being hollowed out from the core by the German’s inaction and our own paralysis.”
The board of directors of the new company was heavily weighted in favour of the Germans. By the end of 2000 eleven top executives had left Chrysler and that included the replacement CEO and the legendary designer, Gale. When Stallkamp left, Lehman Brothers down graded the stock. Analysts wondered in print why there was no place for one of the most talented men in the automotive industry. It was rumoured that Stallkamp wanted to take a slower more unified approach to integrating the companies and that Schrempp had overruled the approach. American investors were worried but the Daimler executive was far more worried about the opinions of the European investors. Morale was steadily declining. Stallkamp was quickly replaced by a German CFO.
(Part 3 to be posted soon)
Friday, April 16, 2010
Rory Sutherland: Life Lessons from an Ad Man
Rory Sutherland Life lessons from an Ad Man
Rory Sutherland argues for imputed value in this entertaining and well reasoned talk. He started out as a classics teacher, moved to an advertising firm as a copy writer and became the Vice Chairman of the Ogilvy Group. He was one of the first admen to fall in love with the potential of the internet. He writes a blog at Campaign’s Brand Republic called “the Wiki Man”.
An early fan of the Internet, he was among the first in the traditional ad world to see the potential in these relatively unknown technologies.
"Rory is the original advocate of '360-degree branding,' a persuasive and charismatic speaker and has a tremendous knack for making ideas come to life in an easily digestible way. He has been walking the walk longer than anyone." Gary Leih, Ogilvy Group Chairman
Rory Sutherland argues for imputed value in this entertaining and well reasoned talk. He started out as a classics teacher, moved to an advertising firm as a copy writer and became the Vice Chairman of the Ogilvy Group. He was one of the first admen to fall in love with the potential of the internet. He writes a blog at Campaign’s Brand Republic called “the Wiki Man”.
An early fan of the Internet, he was among the first in the traditional ad world to see the potential in these relatively unknown technologies.
"Rory is the original advocate of '360-degree branding,' a persuasive and charismatic speaker and has a tremendous knack for making ideas come to life in an easily digestible way. He has been walking the walk longer than anyone." Gary Leih, Ogilvy Group Chairman
The Daimler Chrysler Merger: A Lost War of Assimilation (Part 1)
The Daimler Chrysler Merger: A Lost War of Assimilation (Part 1)
On May 7th, 1998 Chrysler and Daimler- Benz announced the biggest trans- Atlantic merger in history. In a $37 billion stock swap deal a new company was formed with 442.000 employees, and a market capitalization of almost $90 billion. The leaders promised synergies of savings in retail sales, purchasing, distribution, product design and R&D. Daimler-Benz CEO Jürgen Schrempp hailed the union as "a merger of equals, a merger of growth, and a merger of unprecedented strength." The Daimler Chrysler merger could have been a major leap forward in the automotive industry. Both companies had qualities, abilities and market share that could have benefited the other. Unfortunately, the merger like many others was unsuccessful and never achieved its potential. It eventually was considered so unworkable that the Chrysler portion was sold off at a serious loss. One of the major reasons for this lack of success was a poor handling of the integration process and in particular the people portion.
The move to place German top executives in the American company was at least controversial and in the end proved to be clearly detrimental to the process. In an article entitled “The Ten Merger commandments” by David Gebler (2009), most of the commandments have to do with integration of people factors. Commandment one says: do not act like a conqueror. Perhaps we need to consider the unfortunate history between the two nations. Germany had been conquered twice in the century and the memory was still lingering in both the minds and psyches of the Germans and of the Americans. The beneficial reasons for the merger were quickly over shadowed by the egoistic and nationalistic considerations of mere individuals rather than being elevated to the considerations of what was best for the new corporate entity.
The tactic of misrepresenting the intention of partnership set the entire process off on the wrong foot and it smacks of pay back and the mentality of the conqueror. The rushed and secretive negotiations did not allow for a clear understanding of what the process of running the company would look like post merger nor did it permit a ferreting out of such misrepresentations. The one on one negotiation conducted between Schrempp of Daimler and Eaton of Chrysler did not include Human Resource considerations because the speed and secrecy of the deal. In fact, Eaton was oblivious enough to state that there were no cultural differences. “There was a remarkable meeting of the minds at the senior management level. They look like us, they talk like us, they’re focused on the same things, and their command of English is impeccable. There was definitely no culture clash there.” (Lutz, 2001)
The obvious naïveté did not last long. In spite of these assertions there was soon evidence of the culture clash with Daimler executives publically stating that they would never own a Chrysler product and Chrysler executive responding that Chrysler Jeeps had a much higher consumer satisfaction rating than Mercedes products. The companies were very different in wage structure with American workers sometimes earning 4 times as much as an equivalent German worker, corporate hierarchies and culture were also poorly aligned. Even the branding stances were diametrically opposed. Chrysler was known for innovation, risk taking and American frontier values in a cost controlled environment while Mercedes-Benz was known for German engineering, uncompromised quality and top end luxury. These factors kept both retail and logistics distinctly separate.
To clarify his position, Schrempp told the German media in the autumn of 2000 that . "The Merger of Equals statement was necessary in order to earn the support of Chrysler's workers and the American public, but it was never reality".
This statement was relayed to the English-speaking world by the Financial Times the day after the original news broke in Germany. It had always been Schrempp’s intention that Chrysler should become a subsidiary. Daimler-Benz was the majority share holder in the conglomerate and it controlled the majority of seats on the Supervisory Board. The illusion of equality was perpetuated by the DaimlerChrysler name and two parallel management structures under co-CEOs at separate headquarters which lent substance to the "merger of equals" assertion.
On May 7th, 1998 Chrysler and Daimler- Benz announced the biggest trans- Atlantic merger in history. In a $37 billion stock swap deal a new company was formed with 442.000 employees, and a market capitalization of almost $90 billion. The leaders promised synergies of savings in retail sales, purchasing, distribution, product design and R&D. Daimler-Benz CEO Jürgen Schrempp hailed the union as "a merger of equals, a merger of growth, and a merger of unprecedented strength." The Daimler Chrysler merger could have been a major leap forward in the automotive industry. Both companies had qualities, abilities and market share that could have benefited the other. Unfortunately, the merger like many others was unsuccessful and never achieved its potential. It eventually was considered so unworkable that the Chrysler portion was sold off at a serious loss. One of the major reasons for this lack of success was a poor handling of the integration process and in particular the people portion.
The move to place German top executives in the American company was at least controversial and in the end proved to be clearly detrimental to the process. In an article entitled “The Ten Merger commandments” by David Gebler (2009), most of the commandments have to do with integration of people factors. Commandment one says: do not act like a conqueror. Perhaps we need to consider the unfortunate history between the two nations. Germany had been conquered twice in the century and the memory was still lingering in both the minds and psyches of the Germans and of the Americans. The beneficial reasons for the merger were quickly over shadowed by the egoistic and nationalistic considerations of mere individuals rather than being elevated to the considerations of what was best for the new corporate entity.
The tactic of misrepresenting the intention of partnership set the entire process off on the wrong foot and it smacks of pay back and the mentality of the conqueror. The rushed and secretive negotiations did not allow for a clear understanding of what the process of running the company would look like post merger nor did it permit a ferreting out of such misrepresentations. The one on one negotiation conducted between Schrempp of Daimler and Eaton of Chrysler did not include Human Resource considerations because the speed and secrecy of the deal. In fact, Eaton was oblivious enough to state that there were no cultural differences. “There was a remarkable meeting of the minds at the senior management level. They look like us, they talk like us, they’re focused on the same things, and their command of English is impeccable. There was definitely no culture clash there.” (Lutz, 2001)
The obvious naïveté did not last long. In spite of these assertions there was soon evidence of the culture clash with Daimler executives publically stating that they would never own a Chrysler product and Chrysler executive responding that Chrysler Jeeps had a much higher consumer satisfaction rating than Mercedes products. The companies were very different in wage structure with American workers sometimes earning 4 times as much as an equivalent German worker, corporate hierarchies and culture were also poorly aligned. Even the branding stances were diametrically opposed. Chrysler was known for innovation, risk taking and American frontier values in a cost controlled environment while Mercedes-Benz was known for German engineering, uncompromised quality and top end luxury. These factors kept both retail and logistics distinctly separate.
To clarify his position, Schrempp told the German media in the autumn of 2000 that . "The Merger of Equals statement was necessary in order to earn the support of Chrysler's workers and the American public, but it was never reality".
This statement was relayed to the English-speaking world by the Financial Times the day after the original news broke in Germany. It had always been Schrempp’s intention that Chrysler should become a subsidiary. Daimler-Benz was the majority share holder in the conglomerate and it controlled the majority of seats on the Supervisory Board. The illusion of equality was perpetuated by the DaimlerChrysler name and two parallel management structures under co-CEOs at separate headquarters which lent substance to the "merger of equals" assertion.
Marketing Inspiration!
How to build a personal brand - Gary Vaynerchuk.
"We only get to play this game one time"
"The people who controlled it are no longer in control".
"If you love it you will win".
"We only get to play this game one time"
"The people who controlled it are no longer in control".
"If you love it you will win".
Consumers Post Meltdown
John Gerzema says there's an upside to the recent financial crisis -- the opportunity for positive change. He identifies four major cultural shifts driving new consumer behavior and shows how businesses are evolving to connect with thoughtful spending
“John Gerzema has spent his career creating and guiding the brand strategies of many of our household names: McDonald's, BMW, Coca-Cola, United Airlines, Holiday Inn and more. Today, as Chief Insights Officer for marketing giant Young & Rubicam, he combines his expertise with the information reaped from Y&R's Brand Asset Valuator (an enormous database of brands) to understand and anticipate change in the intricate world of commerce.”
Gerzema is co-author of The Brand Bubble, a new book that advocates change as the best strategy for brand management in today's market. He has long been a proponent of placing the consumer at the heart of all business development and decisions.
“John Gerzema has spent his career creating and guiding the brand strategies of many of our household names: McDonald's, BMW, Coca-Cola, United Airlines, Holiday Inn and more. Today, as Chief Insights Officer for marketing giant Young & Rubicam, he combines his expertise with the information reaped from Y&R's Brand Asset Valuator (an enormous database of brands) to understand and anticipate change in the intricate world of commerce.”
Gerzema is co-author of The Brand Bubble, a new book that advocates change as the best strategy for brand management in today's market. He has long been a proponent of placing the consumer at the heart of all business development and decisions.
Thursday, April 15, 2010
What Consumers Really Want
This video helps marketers of the present and future understand something important about consumers and their wants.
Wisdom/Satire of South Park
Sometimes what's right isn't as important as what's profitable. - Trey Parker and Matt Stone
As a person in business or as a student of marketing/business- Where do YOU draw the line?
As a person in business or as a student of marketing/business- Where do YOU draw the line?
Wednesday, April 14, 2010
Marketers of the Future and Choices
Barry Schwartz on The Paradox of Choice
Please follow the link to this video.
If you are interested in marketing the video is by a Sociologist who has studied how choice can make life more difficult, more stressful and less satisfying rather than more satisfying.
This is one of those 'good to know' concepts that could inform your papers and your career
Please follow the link to this video.
If you are interested in marketing the video is by a Sociologist who has studied how choice can make life more difficult, more stressful and less satisfying rather than more satisfying.
This is one of those 'good to know' concepts that could inform your papers and your career
Photos that changed the world
This short 6 minute clip shares some of the images that have influenced the world of public opinion in the last few decades.
International Cultural Differences Illustrated
It is not always easy to find fresh illustrations of cultural differences. This short talk makes a particular example of the ways individuals from different countries see the world quite differently.
Tuesday, April 13, 2010
Steve Jobs igives Life and Career Advice
Steve Jobs spoke a few years ago at a graduation at Stamford. The video is available at TED and on Youtube but I have placed it here for your convenience.
100 Well Placed Businessmen
Andrew Young said: Nothing is illegal if 100 well placed businessmen decide to do it.
Do you agree?
Monday, April 12, 2010
Sunday, April 11, 2010
Managing your credit score
Managing your Credit Score
Many people wait far too long to understand their credit score and to realize the impact it has on your life. The picture above shows a game board which can help us all understand the intricacies. Using the format of a board game, How To Improve Your Credit Score is an easy-to-read infographic from YourWealthPuzzle.com.
It all distills down to: “Pay on time, wipe out debt, raise credit score.”
It all distills down to: “Pay on time, wipe out debt, raise credit score.”
Saturday, April 10, 2010
Cool Infographics- a Site Worth Seeing
Cool Infographics
Today I stumbled upon- actually just clicked the 'next blog' button until I found - the "Cool Infographics" blog of Randy Krum. Once I found it, it took me over 2 hours to leave it.
If you are interested in marketing, clear communication, a wealth of information on how to present data in a way people can really grasp it- you will be captivated too. He links with a myriade of other sites and educates, entertains and teaches without ever seeming to pontificate.
I think the site is amazing.
http://www.coolinfographics.com/blog/month/march-2010
Below is just one example of what he has on the site.
Ignite Toronto 2: Ryan Coleman - Designing for visual efficiency from Ignite Toronto on Vimeo.
Today I stumbled upon- actually just clicked the 'next blog' button until I found - the "Cool Infographics" blog of Randy Krum. Once I found it, it took me over 2 hours to leave it.
If you are interested in marketing, clear communication, a wealth of information on how to present data in a way people can really grasp it- you will be captivated too. He links with a myriade of other sites and educates, entertains and teaches without ever seeming to pontificate.
I think the site is amazing.
http://www.coolinfographics.com/blog/month/march-2010
Below is just one example of what he has on the site.
Ignite Toronto 2: Ryan Coleman - Designing for visual efficiency from Ignite Toronto on Vimeo.
Thursday, April 1, 2010
Big Emerging Markets and Opportunities
Big Emerging Markets and Opportunities
Big emerging markets are normally considered to be the BRIC nations and sometimes BRICK standing for Brazil, Russia, India, China and South Korea. They represent the nations of the world with large populations, some of which are transitioning from closed economies to open market economies. As they emerge it is hoped that they will embrace economic reforms, transparency and efficiency in their capital markets. This draws foreign investment and that increases the speed of advancement which hopefully leads to significant growth in GDP and more major economic reforms. According to the United States department of Commerce website: (http://www.bea.gov/newsreleases/international/trade/2010/pdf/trad1109.pdf) Exhibit 6 Exports, Imports and Trade Balance by country and area, Not Seasonally adjusted 2009- this is the rank order of the United State’s first 17 trading partners:
1. China
2. Canada
3. Mexico
4. Japan
5. Germany
6. United Kingdom
7. South Korea
8. France
9. Taiwan
10. Ireland
11. Venezuella
12. Italy
13. Malaysia
14. Saudi Arabia
15. India
16. Brazil
17. Thailand
Of these nations some adjustments are necessary to determine the 3 biggest emerging nations. China is an obvious choice with the world’s largest population. It recently replaced Canada as the number one trading partner of the USA. Its GDP is $7.926 trillion, the world second largest but it rates 100th in per capita GDP at $5,970 which when normalized is $3,259. In addition there are still major problems in doing business with China. Its form of government and its monetary strategy are two examples. According to the World Bank however, China’s reforms and growth have lifted “several hundred million” people from absolute poverty since the late 1970s. This accounts for 70% of the world wide poverty reduction in the last 20 years- quite an accomplishment. Another promising statistic is that women and girls are 99% literate. This is a statistic that is unique among developing nations.
South Korea would be the second choice according to this list with a population of 50,062,000 (24th in the world) and a GDP of $1,344 Trillion (13th). The per capital income is $27,692 nominally adjusted to $19,136. This country is the 13th largest exporter in the world and is the third largest exporter to China and Japan. Although it has a smaller population base, I have chosen South Korea because of its location and trading relationship with China which gives it a marked advantage for the future in export income.
The final choice is among Venezuela, India and Brazil. All three countries are republics. India represents the world’s second largest population at 1,176,411,00 with a GDP of 3.298 trillion (4th largest in the world). Per capita that comes to $2,930 (130th) but normalized it is $1,017. Venezuela represents the world’s 40th largest population with an estimated 26,814,843 people. The GDP is 359.210 billion (31st) and per capita $12,806 normalized to $11,388 in PPP. Finally, Brazil is the world’s fifth largest population with an estimated 192,272,890 people. Their GDP is $1,612,539 Trillion (9th) with a per capital income of $10,455 adjusted to $7,737.
Although Brazil currently represents a far greater per capita buying power, I will choose India as my third major emerging market because of its huge internal potential market and the strong annual growth of GDP.
With its huge population and need to feed its population India needs potash as a form of fertilizer for its fields and crops. Unlike many of the emerging nations, India has no natural reserves of potash and has significant problems with producing sufficient food to feed its population. Potash does not represent any sort of cultural taboo as it is not animal based and enhances life. As a commodity item, it is not the most amenable to branding but excellent results in marketing with an educational component to standardize farming practices could make a big difference while making a sound profit. Hershey, the chocolate company has made great strides in Vietnam by introducing chocolate as a cash crop and educating the farmers in best practices. A similar model, at an earlier stage of development would work well for potash sales in India. According to the World Bank statistics, starting a business can be accomplished in 30 days. The issue of infrastructure must be considered a problem in the delivery of potash to rural locations but it can be delivered by the ubiquitous ox cart and the price of potash would make it available to the farmers that own them.
The South Koreans are high of the collective and social connection aspect described by Hofstede’s cultural dimensions (Catorea, p106). They are also more advanced in the use of social networking than many North Americans are. There is a real need to adapt to their improved marketing methods and models of doing business so that Facebook can make the leap from the number 4 provider. I learned a lot from the following PowerPoint presentation:
http://www.readwriteweb.com/archives/facebook_vs_asia_top_social_networks.php Korea has a huge youth population that has embraced the social networking idea. I would consider the Facebook concept as an advertising revenue source and I would market the advantages of embracing the business models used in Asia for American (or other alien) business advertising.
For China I have chosen to market a waterless compostable toilet. The state of infrastructure in China leads me to believe that this is a great idea. In North America we are faced with replacing outdated sewage systems which contribute to pollution of our land and waterways. Neither the North American model nor the current Chinese model for handling human sewage is sustainable. China has few roads, let alone sewage systems and electrical power is not always available in rural areas either. China is embarking on collective transportation such as bullet trains rather than facilitating the individualistic modes of transportation. The toilets are manufactured by Envirolet and were recognized as one of the products that just might save the world by Business Week magazine. “….statistics of sanitation. Some 2.6 billion people do not have sanitation, which is just stunning, and gets no political attention … Four in ten people are without proper sanitation. I couldn't believe people have absolutely no sanitation. For them, sanitation is the nearest bush or roadside” (George, 2009). This state of affairs leads to the death of millions of children and the transmission of disease that has huge societal costs.
http://images.businessweek.com/ss/09/07/0729_IDEA_awards_gold/more.htm
In Chinese society human feces are often used as fertilizer and there are many health risks associated with this practice. These units provide a healthier way to first world sanitization with the added bonus of useable healthier composted fertilizer. “The readers of the “British Medical Journal,” who are qualified medical professionals, voted the toilet as the biggest medical advance of the last 200 years, over penicillin and the Pill”. With no electrical or water hook up required this can bring a higher standard of health and living to rural populations. If entire cities could be built in rural areas without the need for sewers, a huge burden would be lifted from government resources. The toilets weigh approximately 105 lbs and they come in a single box. According to the World Bank chart included in Appendix one only 69% of urban dwellers have improved sanitation facilities. This leaves a huge market throughout China.
Summary
There are huge opportunities in the Big Emerging Markets for those who are willing to understand the cultures, the statistics and the business models that are adaptable to those societies. It would be important for anyone seeking to do business in one of these nations to form partnerships with trustworthy nationals to facilitate acceptance and proper marketing techniques. The recommendations in this paper are based on the level of development of each society, the perceived needs and an understanding of the Department of Commerce and World Bank statistics.
Big emerging markets are normally considered to be the BRIC nations and sometimes BRICK standing for Brazil, Russia, India, China and South Korea. They represent the nations of the world with large populations, some of which are transitioning from closed economies to open market economies. As they emerge it is hoped that they will embrace economic reforms, transparency and efficiency in their capital markets. This draws foreign investment and that increases the speed of advancement which hopefully leads to significant growth in GDP and more major economic reforms. According to the United States department of Commerce website: (http://www.bea.gov/newsreleases/international/trade/2010/pdf/trad1109.pdf) Exhibit 6 Exports, Imports and Trade Balance by country and area, Not Seasonally adjusted 2009- this is the rank order of the United State’s first 17 trading partners:
1. China
2. Canada
3. Mexico
4. Japan
5. Germany
6. United Kingdom
7. South Korea
8. France
9. Taiwan
10. Ireland
11. Venezuella
12. Italy
13. Malaysia
14. Saudi Arabia
15. India
16. Brazil
17. Thailand
Of these nations some adjustments are necessary to determine the 3 biggest emerging nations. China is an obvious choice with the world’s largest population. It recently replaced Canada as the number one trading partner of the USA. Its GDP is $7.926 trillion, the world second largest but it rates 100th in per capita GDP at $5,970 which when normalized is $3,259. In addition there are still major problems in doing business with China. Its form of government and its monetary strategy are two examples. According to the World Bank however, China’s reforms and growth have lifted “several hundred million” people from absolute poverty since the late 1970s. This accounts for 70% of the world wide poverty reduction in the last 20 years- quite an accomplishment. Another promising statistic is that women and girls are 99% literate. This is a statistic that is unique among developing nations.
South Korea would be the second choice according to this list with a population of 50,062,000 (24th in the world) and a GDP of $1,344 Trillion (13th). The per capital income is $27,692 nominally adjusted to $19,136. This country is the 13th largest exporter in the world and is the third largest exporter to China and Japan. Although it has a smaller population base, I have chosen South Korea because of its location and trading relationship with China which gives it a marked advantage for the future in export income.
The final choice is among Venezuela, India and Brazil. All three countries are republics. India represents the world’s second largest population at 1,176,411,00 with a GDP of 3.298 trillion (4th largest in the world). Per capita that comes to $2,930 (130th) but normalized it is $1,017. Venezuela represents the world’s 40th largest population with an estimated 26,814,843 people. The GDP is 359.210 billion (31st) and per capita $12,806 normalized to $11,388 in PPP. Finally, Brazil is the world’s fifth largest population with an estimated 192,272,890 people. Their GDP is $1,612,539 Trillion (9th) with a per capital income of $10,455 adjusted to $7,737.
Although Brazil currently represents a far greater per capita buying power, I will choose India as my third major emerging market because of its huge internal potential market and the strong annual growth of GDP.
With its huge population and need to feed its population India needs potash as a form of fertilizer for its fields and crops. Unlike many of the emerging nations, India has no natural reserves of potash and has significant problems with producing sufficient food to feed its population. Potash does not represent any sort of cultural taboo as it is not animal based and enhances life. As a commodity item, it is not the most amenable to branding but excellent results in marketing with an educational component to standardize farming practices could make a big difference while making a sound profit. Hershey, the chocolate company has made great strides in Vietnam by introducing chocolate as a cash crop and educating the farmers in best practices. A similar model, at an earlier stage of development would work well for potash sales in India. According to the World Bank statistics, starting a business can be accomplished in 30 days. The issue of infrastructure must be considered a problem in the delivery of potash to rural locations but it can be delivered by the ubiquitous ox cart and the price of potash would make it available to the farmers that own them.
The South Koreans are high of the collective and social connection aspect described by Hofstede’s cultural dimensions (Catorea, p106). They are also more advanced in the use of social networking than many North Americans are. There is a real need to adapt to their improved marketing methods and models of doing business so that Facebook can make the leap from the number 4 provider. I learned a lot from the following PowerPoint presentation:
http://www.readwriteweb.com/archives/facebook_vs_asia_top_social_networks.php Korea has a huge youth population that has embraced the social networking idea. I would consider the Facebook concept as an advertising revenue source and I would market the advantages of embracing the business models used in Asia for American (or other alien) business advertising.
For China I have chosen to market a waterless compostable toilet. The state of infrastructure in China leads me to believe that this is a great idea. In North America we are faced with replacing outdated sewage systems which contribute to pollution of our land and waterways. Neither the North American model nor the current Chinese model for handling human sewage is sustainable. China has few roads, let alone sewage systems and electrical power is not always available in rural areas either. China is embarking on collective transportation such as bullet trains rather than facilitating the individualistic modes of transportation. The toilets are manufactured by Envirolet and were recognized as one of the products that just might save the world by Business Week magazine. “….statistics of sanitation. Some 2.6 billion people do not have sanitation, which is just stunning, and gets no political attention … Four in ten people are without proper sanitation. I couldn't believe people have absolutely no sanitation. For them, sanitation is the nearest bush or roadside” (George, 2009). This state of affairs leads to the death of millions of children and the transmission of disease that has huge societal costs.
http://images.businessweek.com/ss/09/07/0729_IDEA_awards_gold/more.htm
In Chinese society human feces are often used as fertilizer and there are many health risks associated with this practice. These units provide a healthier way to first world sanitization with the added bonus of useable healthier composted fertilizer. “The readers of the “British Medical Journal,” who are qualified medical professionals, voted the toilet as the biggest medical advance of the last 200 years, over penicillin and the Pill”. With no electrical or water hook up required this can bring a higher standard of health and living to rural populations. If entire cities could be built in rural areas without the need for sewers, a huge burden would be lifted from government resources. The toilets weigh approximately 105 lbs and they come in a single box. According to the World Bank chart included in Appendix one only 69% of urban dwellers have improved sanitation facilities. This leaves a huge market throughout China.
Summary
There are huge opportunities in the Big Emerging Markets for those who are willing to understand the cultures, the statistics and the business models that are adaptable to those societies. It would be important for anyone seeking to do business in one of these nations to form partnerships with trustworthy nationals to facilitate acceptance and proper marketing techniques. The recommendations in this paper are based on the level of development of each society, the perceived needs and an understanding of the Department of Commerce and World Bank statistics.
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