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Home Depot Ups the Ante on Green Labeling April 17, 2007

Posted by Jordi in environment, Retail, sustainable development.
2 comments

Does the success of deep environment-human change hinge on winning the hearts (do they have nay?) and minds of the Fortune 500?   Here is another example of corporations finding two kinds of green.

Home Depot to Display an Environmental Label – New York Times
The initiative — which is expected to include 6,000 products by 2009, representing 12 percent of the chain’s sales — would become the largest green labeling program in American retailing and could persuade competitors to speed up their own plans.

I am curious to see what this does to pricing and also cost structure for Home Depot.

The Future of Books March 28, 2007

Posted by breichen in civil society, innovation, Internet, Knowledge economy, Retail, Technology.
4 comments

Employees of Google, the world’s largest web-search company, are scanning books into computers using secret methods at secret locations. Although Google has not released any official tallies, Daniel Clancy, the project’s top engineer, has given some clues as to what is actually going on. He has stated that Google has a contract with UC Berkeley requires them to digitize some 3,000 books a day for the university. Google also has contracts with 12 other universities and a number of independent publishers. Some conservative estimates are that Google will be digitizing books at a rate of 10 million per year. The total number of book titles said to exist is estimated at 65 million.

This is not the first project like this to exist. The Internet Archive is a non-profit organization created in 1996 by Brewster Kahle in the attempt to recreate a contemporary Library of Alexandria containing all public-domain texts and videos. Other organizations such as Amazon, Microsoft, and Yahoo! have all been scanning books but the scale to which Google is digitizing them is far greater than any of them.

As books go digital, new questions, both philosophical and commercial, arise. How, physically, will people read books in future? Will technology “unbind” books, as it has unbundled other media, such as music albums? Will reading habits change as a result? What happens when books are interlinked? And what is a book anyway?

The physical medium of books is unlikely to disappear in the digital age. Sony already sells an electronic book reader with about 12,000 titles available for download. Ron Hawkins, head of marketing for the Sony Reader, states that ““our mission is not to replace the print book.” You may be wondering then, who is going to be reading the millions of pages being digitized by Google and their competitors? The idea is that some people will read the books on a computer screen, some will use Google as a method for previewing books they are considering purchasing in paper form, and some will use the service to “look for specific snippets that interest them.”

Print media is already being diminished by digital replacements. Wikipedia for example, is a free online encyclopedia which is said to have severely reduced the sales of paper-bound alternatives. It is speculated that books which people would not ordinarily read all the way through or that require frequent updates will likely migrate to the digital medium. Other examples of print media being accessed in a digital format more and more frequently include dictionaries, cookbooks or recipes, telephone books/directories, etc.

It will be interesting to see how Google’s project turns out. I think it would be pretty amazing if you could get a digital copy of ANY book in the world just by searching Google Books. I don’t think, however, that paper-bound books are likely to disappear behind the shadow of the digital book.

Problems at Wal-Mart March 28, 2007

Posted by collage9 in Retail.
8 comments

It was interesting to see that one of the world’s largest and most successful corporations is actually facing some difficulties.  I feel like most people see Wal-Mart as untouchable, when in reality they are not immune from facing obstacles just like any other company.  We all know about the company’s success in the U.S., where it currently operates 4,000 stores, but this can’t be said yet for their global operations.  Recently, Wal-Mart actually pulled out of Germany and South Korea.  In other important countries, such as China, Wal-Mart is behind in market share to European competitors like Tesco and Carrefour.  They need to figure what appeals to each region they operate in and have to realize that what appeals to the American market won’t exactly translate well over seas.  They are beginning to take some minor steps, such as putting live seafood in its 73 stores located in China. 

It is essential to the company that they straighten out their foreign operations because they really don’t have any more room to grow in the US.  They are concerned with stores taking sales from one another since there are so many throughout the country.  In addition to this lack of space, sales growth at older stores (stores open at least a year) is actually behind that of its archrival, Target.  They have been growing about 1 to 3 percent on average in the last 3 threes, compared to more than 5% previously.  I’m not saying that Wal-Mart is in jeopordy by any means, just that it needs to take a closer look at and improve its global markets if it wants the continued growth it has experienced throughout its lifetime.

A Saab’s Story March 27, 2007

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

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!

10 Shopping Tricks That Stores Hate (Life Tip#1) March 24, 2007

Posted by Jordi in Customer Service, Retail.
4 comments

10 Shopping Tricks That Stores Hate – Consumerist
10 Shopping Tricks That Stores Hate

These are lots of fun.

My favorite: Saying no to extended warranties.

The org theory question:  why do customers fall for these?  Have retailers created legitimate practices?

Walmart vs. Weis March 21, 2007

Posted by Janine in Consumers, Organizational Environment, Retail.
7 comments

As many of you now know, the new Walmart supercenter has opened. While I have not yet gone there to check it out, I have heard a lot about it. Many that I have talked to do not seem to be that impressed with its layout, while some are marveling at its wide and cheap selection. You can literally go there for just about anything, from food, to clothes, to electronics. It is one-stop shopping at its finest.

This got me thinking: what is the Walmart’s opening going to do for other local businesses? Weis markets will be taking a huge loss with the giant’s cheaper food and beverage selection. Also, with the new garden center, places like Loews and small, privately-owned businesses are sure to feel the effects of Walmart’s persuasive low prices.

Some I have talked to have said that they are going to remain loyal to the businesses such as Weis. Those people have told me that they just “don’t feel right buying produce and fruits from a store like Walmart.” I see their point. Will quality be jeopardized for the sake of low costs?

Now, I have never really been to a Walmart superstore, but I can imagine the satisfaction one can get knowing that they only have to stop one place to get their groceries and misc items. But, what about the others. This means that businesses like Weis, Ards, Giant, etc. will have to reorganize, regroup, and devise ways to react to this environmental change. The environment surrounding these businesses has changed, and I am very curious to see how each one of them responds.

I have heard talk that Weis owns the lot that the old Walmart was on, and the company plans to expand the current Weis. That could be in the future. I think the smart way for a place like Weis to react to this opening is for them to go above and beyond their competitor; they should open a more extensive organic and health food section, bring in other services, such as a drycleaners. The possibilities are there, so in the next few months or years, I look forward to seeing what develops.

Business Week’s 50 Top Performers March 20, 2007

Posted by Stephanie in Customer Service, Finances, innovation, Internet, Manufacturing, media, pharmaceutical, Public Interest, Retail, Technology, telecommunications.
2 comments

 

Business Week recently announced its yearly 50 Best Performers article in the March 26, 2007 edition of the magazine. When first looking even at the title of the article I was skeptical about how these companies were selected. It seems impossible to compare every company in every sector and rank their performance. I was pleased however to find their criteria for making the selections seems to be as fair as possible.

Financially they use specific criteria and what they look for in companies when making this list. The two principal financial figures Business Week uses in its analysis are average return on capital and sales growth over the past 36 months. They also consider the importance of examining sectors separately, as factors within one particular sector may inflate or deflate the appearance of a company’s performance unfairly.

Specific quotations I highlighted when reading the article regarding what BW determines as strategies for success:

“…rewriting the rules of engagement in their industries.”

“…a deep understanding of customers, a competitive advantage that has enabled them to sell more good and services than rivals.”

“…work hard to anticipate and head off potential problems well before outsiders are even aware of these looming challenges.”

Details about all 50 companies are included in the compilation of roughly 40 pages of discussion. One particular company I had not heard of before, ranked 31 is Stryker. The company manufactures artificial joints, such as knees, shoulders and hips. Part of their success is due to the baby boomer generation who show no signs of slowing down in retirement even as natural aging takes is toll. Anther interesting aspect of the company is its preparation in changing CEO’s. As the current CEO, John Brown is planning on retiring, COO, Stephen MacMillan has had roughly 4 years to shadow and plan the transition. Both the process the company has developed for the transition and the mere fact that the CEO is not being forced out of the company it seems are two incidents not seen as often anymore.

I am still hesitant to agree that companies covering the full spectrum of all organizations and industries can not only be compared but ranked in a hierarchy. Business Week does an excellent job at attempting this challenge but I feel that some subjective factors weigh into the decision, especially between close rankings, say between spot 8 and 9.

 

1 Google

2 Coach

3 Gilead Sciences

4 Nucor

5 Questar

6 Sunoco

7 Verizon Communications

8 Colgate-Palmolive

9 Goldman Sachs Group

10 Paccar

11 Amazon.com

12 Cognizant Technology Solutions

13 Avon Products

14 Varian Medical Systems

15 Bed Bath & Beyond

16 CB Richard Ellis Group

17 Robert Half International

18 Chicago Mercantile Exchange Holdings

19 Adobe Systems

20 EOG Resources

21 Sempra Energy

22 Sherwin-Williams

23 Lehman Brothers Holdings

24 Rockwell Collins

25 IMS Health

26 Allegheny Technologies

27 Oracle

28 Starbucks

29 Moody’s

30 PepsiCo

31 Stryker

32 Best Buy

33 United Parcel Service

34 Apple

35 T. Rowe Price Group

36 Valero Energy

37 Constellation Energy Group

38 TJX

39 Morgan Stanley

40 Paychex

41 Coventry Health Care

42 United States Steel

43 United Technologies

44 Hershey

45 Black & Decker

46 Synovus Financial

47 Linear Technology

48 AT&T

49 XTO Energy

50 PNC Financial Services Group


A “watered down” Starbucks February 25, 2007

Posted by Stacey Swift in brand, Retail.
9 comments

Everyone knows and loves Starbucks. Its comforting to know that in most places, not Lewisburg, PA, you know you can get a great Starbucks cup of coffee, late, cappachino, etc. about every few blocks. I was just talking to my friend from Portland, she told me that in their large 5 story mall there are 2 Starbucks on each floor! Thats 10 in one building! I know I have 3 in my mall, I also have one in my grocery store at home, as well as a free standing Starbucks right next to my grocery store! Isn’t this a bit excessive?

“In order to achieve the growth, development and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand,” Howard Schultz.

Schultz now believes this rapid growth “watered down their iconic brand.” Does Starbucks still retain its strong brand name or has it just become run of the mill coffee? I know I love Starbucks coffee, and since I cannot enjoy a steamy cup here in lburg I look forward to Starbucks when I go home. That being said, I do believe the vast number of stores throughout the nation has commodizied the brand. The article mentions their cookie-cutter design of their stores. Starbucks are great, but they are all the same. This past summer I studied abroad in Europe, and I grew to love the small local cafes where you could get a great cup of coffee and enjoy a unique atmosphere. Each cafe was different and great. Now I have come enjoy smaller coffee shops, such as Zeldas. I agree that quantity of Starbucks stores has jaded people. The article mentioned the cookie-cutter stores, so I immediately thought, what about franchising Starbucks? I looked it up and Starbucks does not franchise to individuals. Do you think franchising could help this problem? I think it could help them get away from the monontonous store layouts. It would make each store a little different and they could cater towards local tastes like McDonalds does.

Do you think the Starbucks brand has been watered down? What can they do to improve their brand name? Should they franchise?

E-commerce: The better way to shop? February 14, 2007

Posted by Janine in Business-Society Issues, Consumers, Internet, Retail.
8 comments

In chapter 6 of the book, the authors discuss the trend for companies to use e-commerce as a means to reach their customers more directly.  I want to comment on this trend, and applaud it’s effect on various markets.  The introduction of e-commerce has revolutionized shopping as it used to be known.  People no longer have to leave their homes to buy just about anything! Clothes, electronics, toiletries, and even food!   I used to live in NYC.  As some of you in class who also are from NY, there is a company there called Fresh-Direct.  It is an online marketplace that carries most common grocery needs.  All you do is go online, order what you need, and then a day or so later, it will be at your door.  Busy individuals and those who just do not want to leave the house are ecstatic.  Customers avoid crowded supermarkets, long lines, and they benefit by always getting what they want.  This is a good example of a company that supplies its goods directly to their customers, avoiding the middleman retailers and wholesalers.  E-commerce also extends to clothing and electronics.  Every major clothing store and brand has a website where you can purchase clothes, shoes, etc.  This trend is making is difficult for shopping malls and retailers to keep the business.  They have to invent new strategies to get the customers in the stores. Providing special deals and sales are one way many stores do just that. 

 However, while e-commerce has made life simpler, do I think that soon shopping malls and stores will one day become obsolete?  No.  I think there is fun behind the shopping: think trips to the mall, outlet centers, and specialty stores, the interaction with knowledgeable and helpful staff.  What about all the people who go the malls the day after Christmas? It cannot all just be e-commerce, can it?

Wal-Mart enters the video downloading industry February 6, 2007

Posted by Stacey Swift in Internet, media, Retail.
3 comments

According an article in the New York times, Wal-Mart plans to break into the video downloading industry.  They recently announced their new partnership with six major Hollywood Film companies including Disney, Warner Brothers, Sony, Paramount, 20th Century Fox, and Universal.  With these new alliances Wal-Mart will offer top selling movies in download form between $12.88 and $19.88 on the day of the release and $7.50 for older movies.  They also plan on teaming up with television stations such as Comedy Central, CW, FX, Logo, MTV and Nickelodeon to offer customers download-able shows for $1.96 an episode.  Wal-Mart teamed up with Hewlett-Packard to create a webcitewith a large online movie database from which customers could purchase movies and download them.  To some this may seem like a risky move considering they just recently failed at trying to break into the online DVD rental battle, and forfeited all its customers to Netflix.  Others are optimistic about Wal-Mart’s success in this new endeavor because they are the number one retailer in so many different industries. 

Will they be able to compete with companies like Apple that are already well established within this industry? 

Is Wal-Mart qualified enough and knowledgeable enough to make it in this industry?

 “As much of an 800-pound gorilla as they are in retail sales, they are an 80-pound weakling when it comes to digital distribution,”  Michael Goodman

I do not believe that Wal-Mart’s new online movie database will be successful.  Apple already has a huge portion of the market and I do not see how Wal-Mart will steal their customers.  Personally, if I could purchase the actual DVD for about the same price as downloading it, I would rather go to the store and by it.  As far as downloading televisions shows, itunes has already made that easy and affordable at $1.99 an episode, only $.03 more expensive.  Many people already have an itunes account and would not want to go through the trouble of setting up another account with Wal-Mart.

Finally, I believe that Wal-Mart is making the same mistake that many companies make when they vertically integrate.  They are not knowledgeable in this new field to be successful.  This is evident from their failed online DVD rental endeavor.