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A Saab’s Story March 27, 2007

Posted by Kira in Auto's, brand, Consumers, Marketing, Organizational Environment, outsourcing, Retail.

Saab was faced with the challenge of expanding its market to mid-size sports wagon drivers in the U.K. To accomplish this, Saab had to overcome two major disadvantages. Not only was their marketing budget smaller than their competitors but, their brand recognition and reputation was smaller as well. To promote the 9-3 SportWagon, Saab created a two-part campaign that combined direct mail and the internet. The campaign was a game called “The Race Against Time.” This campaign included a 100-page “choose your own adventure” book that was mailed to people who inquired about the car. The book put its readers in a Saab 9-3 and dared them to see if they could reach a weekend destination without falling into trouble. The story moved forward by choosing from optional actions listed on each page which all led to a different set of circumstances. The game was also offered online- so people could sign up for the game and for additional information about Saab. By playing online, the players could e-mail their results to a friend and challenge them to beat their time. Participants could also record their personal progress. As an incentive, participants who won the challenges were eligible to win a Saab 9-3 Aero V6 SportWagon and Saab-branded sports merchandise. Although Saab officials assumed that no more than 5,000 people would participate in the campaign, more than 29,000 people signed up to play online with 40% also signing up to receive electronic news updates from Saab. The game was also placed on other websites and on blogs (go figure!). Sales for the 9-3 rose in Great Britain from 2,000 cars sold in 2005 to more than 6,000 in 2006.

“We got a set of people who never would have considered Saab,” says Ed Birth, the Saab account manager for Draftfcb (Draftfcb created the campaign)

Saab’s campaign is an example of a recent trend in which marketers are targeting consumers enticing them to play games and activities in order to get them to spend more time with the brands. The longer the time spent with the product the more likely the brand will come to mind when making a future purchase.

Last class we were discussing survival strategies. I would say that Saab is a k-specialist- they had to break into an established market for sport wagons. Some of the reasons that Saab was probably successful as a k-specialist were because they already knew that a market for sport wagons in the U.K. existed and that games and activities were a marketing success. They were able to see trends in the existing companies in the sport wagon market that they could “mimic” and allowed them to see the correct way they could compete.

By using direct mail, online websites, and blogs, Saab was able to reach different potential consumers. The use of online websites allowed Saab to capture younger consumers while also capturing the names and e-mail addresses of potential consumers who registered. This could allow Saab to generate a database for future marketing tactics. Also, the game was a great way to tap into consumers’ emotions- I know it made me reminisce about the “Choose Your Own Adventure” book that I had when I was younger!


I think the game can still be played online- check it out for yourself!


Baby boomers influence job growth March 21, 2007

Posted by Meg in outsourcing, sustainable development, Workplaces.

Throughout the past fifty years, baby boomers have influenced culture, politics, and the economy.  Now,  as this generation heads into retirement, it is apparent, more than ever, that they’ll be influencing the career paths those of the next generation (those born in the late 70s, 80s, and early 90s) choose to pursue.  In particular, health care professions are expected to have a 30% growth rate between 2004 and 2014.  Doctors and nurses are excluded from this category because of the education requirement.  Rather, positions such as medical and dental assistants, those of the lower-wage, lower-skilled category are expected to rise dramatically.  Other career paths expected to grow substantially are positions in the field of technology such as software engineers as well as those in education including college professors, the reason being that an emphasis on higher education has become more prevalent during the late twentieth century.

Several of these jobs, particularly those described above in the health care profession, seem to not only cater to the influence and needs of the baby boomer generation, but they also appear to bridge the salary gap existing between those with a bachelor’s degree and those with simply a high school diploma.  Obviously, a college professor needs an advanced degree as well as many software engineers.  More and more, however, blue-collar careers are also requiring education at least somewhat beyond high school.

As outsourcing continues to become a dominant strategy for many firms, an increase in jobs requiring at least a certain amount of post-high school education is relieving in my opinion.  It is a shame to see dedicated workers lose their jobs to those who can complete the same task for a lower wage.  A growth in professions though that can cater to these workers will hopefully stimulate the economy and promote a more educated U.S. citizen with a greater confidence in job security.

A “Behind-the-Scenes” E-Commerce Power February 14, 2007

Posted by Kira in outsourcing, Technology.

Michael Rubin, an entrepreneur since the age of 13, is taking on a new business challenge- the world of e-commerce.  His latest endeavor is GSI Commerce (GSIC) which handles e-commerce operations for a variety of retailers including Sports Authority, Modells, Reebok, NASCAR, Estee Lauder, Palm, Ace Hardware, and Linens ‘n Things.  By outsourcing their commerce websites to GSI, their customers are relieved of the burden of building and maintaining costly infrastructure and because GSI bears all the costs, the customer’s e-commerce operations are profitable from day one.  Being in e-commerce means that GSI competes with Amazon.  Rubin’s business is built around outsourcing whereas Amazon has had to transition to an outsourcing model which is harder to do.  Rubin believes that outsourcing is the future of e-commerce and GSI will be able to take on Amazon.  When you order something from Toys ‘R’ Us it comes in an Amazon box, but if you order something from Linens ‘n Things it comes in a Linens ‘n Things box.  The difference is that GSI’s clients still reflect their brand, look, and feel.  Although GSI is not consistently profitable yet, revenues have been growing steadily. 

            I think that a main reason why GSI may be able to compete with Amazon is because they are a business to business player and do not want to build their own brand.  As a B2B player, GSI is happy to be behind the scenes and help connect buyers and sellers using the internet.  There is always tension between Amazon’s consumer business and their client’s consumer business.  This makes GSI more attractive since they are not in direct competition with their client’s business.  GSI’s priority is making their client’s business as successful as possible.  B2B commerce allows companies to reduce their operating costs and improve product quality.  Since GSI incurs all costs, companies have nothing to lose which may be a competitive advantage over Amazon.

Although it is not as common yet to outsource e-commerce as it is to outsource a material input, this is a good strategy for companies that need to manage interdependencies, reduce uncertainty, and reduce infrastructure costs.  The growth of outsourcing also shows the increasing use of mediating technology as a way of doing business.

I am curious to follow GSI to see if they do become profitable and to see how they will compare with Amazon.  I am also interested to see if Amazon makes any changes in order to stay ahead of outsourcing e-commerce.  Will GSI be able to compete with the buzz associated with Amazon?  How strong really is Amazon’s customer loyalty? 

2007’s newspaper job-killers: outsourcing and centralization February 6, 2007

Posted by Lady in outsourcing, Workplaces.
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I recently read an article titled “2007’s newspaper job-killers: outsourcing and centralization”. The writer Philip Stone explains that since newspapers are struggling to maintain their normal 20% profit margins, they are turning to these alternatives to protect their business and reduce costs. According to Stone, the staffs of these newspaper companies are the ones who are negatively affected by these changes. Stone even went so far as to say that the term centralizing “is the classic politically correct way to say ‘suppress and fire’.”

In our textbooks, we learned that centralization can allow an organization to be more effective by allowing top management to keep their employees “focused on its goals”. But our textbook also tells us that centralization causes top management to take on more responsibilities with daily operations and decision-making which could lead to problems if they become too overwhelmed and lose focus of their long-term goals and planning. Do you think that this is a risk to these newspaper companies? In my opinion, it does not seem to be posing a threat to the company and its top management in terms of cost-cutting and other efficiency measures. Stone doesn’t say that top management is dissatisfied with their decision to centralize. However, it does seem pose a threat to some of the employees as their jobs are threatened by this centralization.

Therefore, this article shows that centralization can lead to other problems as well. Might these employees who feel threatened start to lose faith in their company and simply look for new jobs? I do believe that this is a possibility as a result of the changes in the organization. Or is Stone’s definition of centralization simply too pessimistic? Isn’t centralization supposed to be beneficial to the organization? It seems to be working for them now but it will be interesting to see how these changes affect them in the long-run. In general, centralization may work well for one company but it could be a disaster for another company.

In Fashion, the Only Constant is Change January 31, 2007

Posted by Elaine in outsourcing, Retail, Technology.

QuickStep Fashion, a specific application from Lawson Software, has recently been released for the apparel, footwear, textile, and accessories industries. Lawson Software provides software and service solutions to 4,000 customers in manufacturing, distribution, maintenance and service sector industries across 40 countries. The fashion industry’s supply chain consists of an extensive web of suppliers, manufacturers, distributors and of course, the valued customer. When a company has to outsource, they lose a considerable amount of time within the production and distribution area. They cannot directly control what they are producing and miscommunication does happen due to geographical distances .

The fashion business is a quick paced industry where companies have to be able to respond quickly to changes in their market demand. Lawson is making it possible for companies to see its entire supply chain, giving it direct assess to each step. It aids businesses with the changing styles and designs. This organizational structure also manufactures an extraordinary amount of products in a short life-cycle, even for large volume orders and business transactions. Since this software is able to receive information directly from the customer, delivery times are shortened as well. Data entry is accurate in terms of company inventory and other financial statements.

Keen Footwear is a company that has been introduced to this program recently and their director of operations, Joe Zitomer stated, “As we’ve grown and matured, we needed a faster, more reliable database, more sophisticated functionality, and dependable scalability, Lawsons applications met all of those needs.”

Timeliness is key to success in the fashion world. The overall goal of this new implemented program, is to operate as efficiently as possible and hopefully grow to such status that other companies will want to use this system. This collaborative enterprise is the new way to do business in an industry where taste (in fashion) comes as quick as it goes.

This is an expensive operation. If a business controlled all aspects of the supply chain, would quality be degraded? Would a company be overwhelmed with its responsibilities and tasks? Perhaps the fashion industry is the only industry that should use such a system due to their extreme versatility and be still be able to enhance profits.

Outsourcing and Blogs in general January 29, 2007

Posted by Charley S in blogs, outsourcing.

First I will comment on the current trend of outsourcing and how it relates to the readings and class discussions we’ve had. I see outsourcing as the opposite of what vertical integration seeks to accomplish. With vertical integration, companies seek to manage uncertainty by buying elements of their supply chain to improve quality in the component resources they recieve. Companies such as Ford pioneered this by going as far as to buy rubber plantations in South America which they probabl knew they wouldn’t know how to run efficiently. Today, companies are going in the opposite direction, and choosing to use seperate companies to make a lot of the components, much of which is concentrated in India and China. This has led to firms such as Li and Fung in our reading, who specialize in finding suitable companies in China for American companies to use to produce their components. Another example of a company such as this is Accenture, who now employees 35,000 IT employees in India which other American companies can use for IT outsourcing.

Outsourcing is not just prevelant in America, BBC has recently outsourced some of its technical work and it has caused a lot of people to get upset and to strike.

Blogs in general have become extremely popular as of late, and in response to this many news organizations, such as The Washington Post, have started offering blogs that are specific to regular articles they run in their daily papers. Traffic of these blogs now accounts for over 10 % of the traffic on these news sites.

Now the authenticity of these blogs is generally not thought to be completely factual, but apparently the federal courts think they’re good enough. Wikipedia is an online encyclopedia that operates a lot like a bog, where anyone can post information to it and submit revisions of information. There have now been over 100 cases where a federal court judge has cited information of wikipedia as factual.