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Many firms have succeeded by choosing to deliver superior customer value using one of the three value strategies: best price, best product, or best service. I prefer the strategy based on best product, however, as competition increases; the concept of “customer value” has become more critical. Starbucks objectives get to the points where companies have to think more about customer value, targeting and retaining customers- as a way to stave off competition. A huge part of this is targeting, employing, training and retaining employees.


The rapid rise of the branding in recent years can be attributed to a couple factors. Business owners stuck to their guns; they believed in their idea- and are more likely to sell a concept than a product-that is paramount. Secondly i think the internet generation helped to push hospitality destinations as sort of a place to be seen. Previously there was  a room, maybe coffee, and a ride to the nearest airport. Some companies developed different flavors and different ways to make the public view them and cutting edge and hip- the place to stay, even going as far as offering hotel linen and towels for home use. So customers can feel as if they are on vacation even while at home! Some have made many key partnerships with rental car companies and other hospitality establishments that improves their value by using loyalty rewards across all the partners. We all like a winner and having the right advice can make your business into just that type. Managers must market the company like a brand, not just a place to sleep.

Operating a Lean Machine..

Knowing the industry in which you operate and charting a path from there is a good plan. Some companies like JetBlue operate in a market controlled by a few players doing business independently. The airline industry is oligopolistic even though the traditional operators such as American Airlines have been forced to adapt to a changing environment forced upon them by smaller, leaner low budget carriers. By offering leaner service modules, forgoing the idea of a huge airline hub, and utilizing the internet as an additional agent, JetBlue has managed to remain afloat in an industry awash with failures and bailouts. Post September 11 2001 travel numbers nosedived but has since rebounded. The fear of another attack coupled with ever increasing oil prices has squeezed the industry into submission. JetBlue and other smaller operators benefited from deregulation admonished by the Civil Aeronautics Board that allowed airlines to operate as market forces allow. This along with the Airline Deregulation Act of 1978 allowed them to set fares, chose routes and tempt supply and demand forces like other businesses. The airline industry today is based on low cost, efficient service with a few opting for employee ownership. 


Jet fuel is now the single largest expense an airline faces. In 2000, the airlines fuel bill was $14 billion. It is now pushing $80 billion and climbing. Southwest, the most profitable carrier, recently announced that this year’s fuel bill will be $500 million more than last year and equal to 2007 profits. During the first quarter of 2008 everyone lost money. fast-forward to today, and some airlines are resorting to buying refineries, opting to control supply vertically. We have not seen the last word on this...keep listening..

Crash and Burn

Computers systems have faults, will crash and destroy vital information so your company will definitely need to have a recovery system in place. This is to ensure that pertinent information cannot be lost to user error(on the part of employees) or system crashes (such as overloads from too many logs at one time). Using a data administration subsystem will enable you to back up information, restart or recover a database in case of a failure and ensure the security access points are not breached. More than ever, information security is a priority issue. Hackers will target your system simply because its vulnerable or because it presents a challenge. Even former employees can damage a system. A company system should be designed efficiently; however the backup plan will be in place in the unlikely event there is any deviation of normal operations. 

The system should have equipment designed to store data that is secure and reliable. Use disks, secure servers, and CD ROMS to satisfy backup needs. At any time the need arises, outsource the storage of information to a collocation facility.  Restricting access is also a security measure that will ensure reduced system errors and crashes.It is also a good rule to educate even the janitorial staff about information security. It may surprise you how many folks simply use a computer and have not the slightest idea how they work. Proactive is not the name for skin care products- its being prepared and making your employees knowledge workers.

Motivational Monday

Every woman every man welcome, join the caravan of love. Running now on your avenue, running past all denominations..going by..picking up all. One message of love, borne of a dream we all share. Cannot burn it like you would love to, maybe due to the drug tests. Maybe due to knowing it is bad for the lungs, cannot burn anything--if we are human then human tendencies we posses. As much as we would love to jump on the Godly bandwagon..act holier than thou..turn our noses up..we all still seek love..different methods to the same end..Whom do you love?..give love?..When did you last let it known..let it flow..show?..I love you. Word. I love me too, been a while since i told me that. Feels great. Today the affirmation is love, just bypassing all the road rage, the post office workers moving at their own slow pace. The police officers doing more harm, the case workers blind to the case..or the cause, only seeing the cash..payment..we all work each other over for the paycheck.."Hey i am only doing my job man"..so my kids can eat..even if i have to make yours hungry..so if we are all only doing our jobs..who's job is it to make us all work together for the greater good?..me?..you?..the judges passing judgement without empathy, the government governing numbers, ignorant of the other books in this here biblical journey? The women and men intent on showing hurt and harm to each other..while we know all they need is love..to be loved..to be understood. For all your hurt, let he who has never caused hurt for another soul cast the first stone. I am my brothers keeper..let him first keep himself in the love of the father..To all and sundry..show love, act lovely, "give a man a ting for no reason"..smile with a child..say a healthy hello to a stranger. Today is love day..designated by the letters..T.O.D.A.Y...T.o O.thers D.o A. G.ood D.eed Y.eah! So even when it becomes tomorrow..if you can call it today..it is love day..read it and weep..naa..no weeping today..One love

The Product Life Cycle and Outsourcing

The theory of the International Product Life Cycle was developed in the 1960’s. The cycle revolves like this; local production, introduction into the international markets, overseas standardization and production and eventual importation into the country of origin- in this case, the United States. This theory has some important facets as to why it is important in international business, and outsourcing. Developers of the system were of the opinion that the U.S., having the expertise and wealth, develops the technology to produce certain goods that are eventually exported. Being the only source of these desirable goods, American exporters initially flourish. In the second phase a multinational firm begins production in a foreign country with lower costs to the multinational firm. Funny enough, this is the epitome of outsourcing, except as the concept is advanced, it is not termed outsourcing. Outsourcing developed as a separate entity later, but i think they are one and the same. Under the original model, after economies of scale are achieved in the foreign country, their exports compete directly with the United States due to their lower labor or raw material costs. The cycle is complete when this advantage overtakes production in the U.S. and importation of the same product becomes feasible for American businesses. Think call centers, essentially the customer service nerve center. It became much cheaper to house these important facets of customer service in overseas countries. Now, foreign companies are offering call-center services to US companies.With customer service scores at all time lows, some companies are taking call centers back in-house, even advertising "talking to a real person" as their first line! Measure your needs against your numbers..

Money Manager's Memo...

Behind every successful company are managers counting the stash, ensuring the cash flow is correct. Bringing in the Benjies.. capish?..Who supplies the linen? What is the state of the supplier? Will they go bankrupt after our $50,000 payment for deliveries for the next 6 months? Someone has to be the accountant, turn here...                

Cash in advance:  This is common where each side is unfamiliar with the other, and where there is no relationship possibility, or necessity. Or where the reputation of one party is suspect. The seller in this case will receive payment before the shipment is set on its way and has already recovered the costs for shipment and delivery. The buyer accepts responsibility upon receipt.

2                    Open Account:  In this type of arrangement, the seller assumes all of the risks and this usually occurs when dealing with established customers. Here both parties agree the health of each other is secure enough to carry an open relationship.

3                    Consignment: In this type of deal, the seller assumes all of the risk and payment from the buyer occurs after the goods have been sold to consumers. The buyer assumes responsibility upon receipt of the goods.

4                    Letters of Credit: (also involving international trade) In a letter of credit arrangement, the buyer’s bank will issue a letter promising payment pending any conditions set out in said letter. If a confirmed letter of credit is issued, a corresponding bank in the seller’s country will accept the issuing bank’s letter and honor it with payment. If the letter of credit is not confirmed by a bank in the seller’s country, the issuing bank retains payment responsibility.

If the risks are not sufficient to warrant payment before shipment, sellers may opt for drafts, which are an unconditional orders requesting payment on delivery- termed sight drafts, or at a set date- time drafts. The buyer accepts the risks upon receipt of the goods and a draft does not guarantee payment by the buyer. This is a major drawback of documentary drafts.

Work-Life (IM)balance

Business operates to make a profit. News break- employees work to earn money- any other motivation is secondary. The lifestyle consequences (smoking habits, obesity etc) is as costly to individuals and the society as a whole; businesses have a hard time keeping up to time (productivity) lost from lifestyle illnesses and insurance costs from said illnesses.

There are many studies that prove that Employee Assistance Programs (EAPs) actually are needed and cost effective. Workers have to balance their responsibilities at home as well as on the job, assisting them to cope eventually will result in increased productivity. General Motors, a company that put in place an EAP, reports a 75% success rate and a favorable return on monies spent in the program. Having an EAP will result in less grievances being filed ( under the FMLA) and improved employer-employee relationships. We will see substantial savings in on the job injuries, off the job injuries and illnesses as well as gratuitous employees. About 400,000 Americans die each year from smoking related diseases for example; an active EAP will promote healthy lifestyles for our employees and reduce the 75 billion dollar loss to the nation as a whole. The Family Medical Leave Act (FMLA) covers a wide range of leave entitlement for employees, being proactive and enacting an employee assistance plan is only for 21st Century companies.

Faulty Lettuce...

The universal rule of goodwill to all dictates that we take only those actions that we would be willing to see others take. The short answer to any unethical question would be to ask “what if someone did that to me”? The explanation would help us make better decisions concerning ethics. The profit factor in most all types of business dealings clouds all decisions and acts as a final measurement of performance. Recouping losses is a part of sound managerial tactics. Focusing on short term profit margins and ignoring the longer term damage of unethical behavior is bad for business. In the final analysis, businesses owe to each other a willingness to act ethically, this is part of the foundation that forms trust and formulates contracts. If we cannot trust each other, contracts drawn up in good faith would be useless. If for example faulty lettuce was shipped to a hotel, the correct course of action would be to inform the manufacturer of the problem, have them assess their packaging methods to see where the damaged goods came (damage occurred) into the supply chain. This, along with an inspection of the storage facilities in-house can rectify the problem without further damage to anyone. Simply passing on the damaged good to diners can have far-reaching consequences.

Wage Rage..

   The minimum wage for all workers should be pegged to the poverty line and deflation. I think that workers who are employed at the minimum obviously are not skilled enough to command higher wages. A two tier system of wages may be appealing because younger workers have fewer responsibilities. A major drawback is that under such a system, employers may be unwilling to employ too many older workers and so age discrimination could result.

  The ERISA (employee retirement income security act) is indeed a complex act that mandating all employers to provide retirement benefits for employees. This might be seen as unappealing to smaller business that would have to spend monies to ensure compliance. I do think however that the laws should reflect the nature and abilities of smaller companies to pay and as such all employers should provide some form of retirement benefits for employees.  For one thing, social security in America is not looking any brighter with time, added to that if an employee has devoted substantial time working one job, some retirement benefits is needed for his/ her life after work. 

 A 40 hour work week is putting the interest of the worker on the front burner. OSHA regulations ensure safety for employees in certain industries, drivers for example will tire and we would not need a tired truck driver on our streets. Non exempt workers cannot work more than 40 hours in any week without overtime, there should be no ambiguity in the language regulating overtime and wage laws, for this reason no employee should be allowed to voluntarily work more than the mandated hours.

        For good relations I believe the at-will work law in some states can be fair to both sides. Not all cases are similar and arguments can be made on both sides- illegal termination and employees leaving in bad faith- all under the at-will doctrine. No employer should be allowed to fire an employee for no reason, absolutely not.  We would not want to go back to the 1930’s with regards to employer- employee relations. 

Group-think Part Two...

Risk takers are normally seen as desirable in the workplace. Even those who fail and are committed to a project are seen as trustworthy, committing to a plan of action does not mean a blindfolded forging ahead. A good plan is always one that can be modified, good managers manage for change and account for setbacks.

Escalating commitment. 

After much is invested in an idea members may be unwilling to walk away from a continuation even though the signs point toward failure. Self esteem will also prevent managers/team members from changing their argument in the face of outside pressure. A good plan will include limitations, and what to do if a change of course is needed. Remember, in the world of business risk-taking is inevitable and staying the course can sometimes pay off with a good plan- even if the present climate seems dim. 

Responsibility Ambiguity

Groups have to work together, this means that some members not supportive of the consensus arrived at may shirk their responsibility and think others should complete the job. This can be countered by having leaders within the group that are responsible for taking first action resulting from decisions of the group. Rotating the leadership role will ensure that all members contribute effectively and social loafing is reduced. Remember that staff rotation can happen (this is just one scenario, illness is another) what happens if a key group-think member has left the company? Key roles in a plan of action cannot fail because of staff rotations. Appoint secondary members for important roles.

  

Safety in Numbers? To Groupthink or not That is the Question...

Today we present the first in a necessary review of Decision Making. Formulating and maintaining effective groups at work is a great way to build morale and increase productivity. Here are some tips and the signs they may or may not be working (no pun intended).

Slowness and expensiveness.

This negative attribute of decision making groups often results from the time needed to prepare a formal meeting. Paper work and cramped schedules are part of all meetings that can hamper expediency. However, meetings should be scheduled at key times so as to cut down on time wasted. They should include only key personnel so as to cut costs. Quite often time is needed to think about important issues and minimize mistakes long term, seek input about the meeting schedule, keep it short- and be sure to discuss the facts and move on.

   Group-think.

This can increase the tendency for groups to think alike and thus creativity is limited in favor of solidarity. The negative effects can be avoided by having a devils advocate to offer counter arguments to any ideas put forward. Also outsiders from other departments not included in the group-think can be used as a buffer to reduce the solidarity effect.

Polarization.


The opposite of group-think is polarization, this is where members are confrontational and have strong predispositions that reduce conformity. Members are more willing to make risky decisions with company resources than their own. Beware of cross-departmental squabbles--remember there is always competition between departments for the company's scarce resources-- thus some employees will reject a plan for another department because their unit seemingly has nothing to gain. In this case managers need to remind everyone of the larger organizational goals, and ensure everyone buys into the larger scheme. This can mean the difference between success and failure in these situations.Remember think ant colony- not colonization!