392396: Fundamentals of Business Administration and Management
MGMT-X 497.613

Text Read Chapters 1 & 2

Discussion Questions

1. As global trade has grown all over the world over the last 20 years, the US economy in particular had developed a strong world wide supply chain. Our businesses relocated factory after factory from states to low wage countries like China. We became a nation of service providers instead of manufacturers. But it worked well for our corporations. Production in the low wage countries was steady, shipments by container ships sailed like clockwork, and our ports and truckers kept all the goods we buy flowing smoothly.

   That is until Covid totally upended our smooth functioning global supply chain. When the US economy basically shut down for a year, companies scaled back on the inventory they ordered from all those low wage countries. And it was just as well because those low wage countries had their own Covid problems and had to lock down most of their factories for long periods anyway. Basically, we quite ordering and they quit making.

   But then we started to get a handle on the Delta version of Covid, and surprisingly our economy started to rebound faster than anyone expected. Once more purchase orders were free flowing to all the low wage countries. But those countries were slow to ramp up, as they had to get workers back on the job, raw materials ordered and delivered, machinery serviced and back to working. And while US companies waited for their first sets of purchase orders to be delivered, they started sending 2^nd and 3^rd rounds of purchase orders out. All of a sudden those overseas factories found themselves trying to ship 8-10 months of production in 1 – 2 months. They cranked up and worked around the clock, and shipping companies fired up every container ship they could find and everyone started shipping goods to the US ports all at once.

   But we hit a bottleneck. While high volumes of ships began arriving at US ports, the ports could not process the increased volume. They still had the same number of fixed docks, fixed overhead cranes and fixed infrastructure. Covid prevented many trained dock workers from going back to work. Many truckers who were older simply retired during the year they could not find work. And in a nutshell, that’s why we have a supply chain catastrophe and empty shelves in our retail stores.

   So the challenge now for American businesses is what do we do going forward? Do we just wait a few years for the glut of container ships to work its way through our overworked delivery systems and go back to the way things were? Do we look to becoming a manufacturing country again by building factories locally? Consumers still need to buy goods (both non perishable and perishable) and there is a thriving demand for goods as our economy starts to heat up. So where do we build the goods? Over there? Here? A combination? Do we modify the old supply chain model or do we create an entirely new supply chain model?

   Note: While I refer to our situation here in the US, other developed countries like England and France had the same issues to deal with.

2. The Business environment is discussed on pages 7, 8 and 9 of the text. The overall business environment can be broken down into the Economic/Legal environment, the Technological Environment, The Competitive environment and the Social environment.

   What are some of the mega trends that are developing with in these environments and what impact will they have?

   For example, we are now seeing a rapid rise in the use of  tele-health, where doctors are treating their patients using digital technology, to avoid office visits. Driven by the desire to stay away from medical offices and the fear of being infected, this has tremendous implications for bringing better medical care to rural and outlying areas. The medical community has long acknowledged that rural hospitals are closing over costs, and the new doctors are choosing to set up practices closer to cities. Using digital technology, doctors can now set up a practice near a bigger city, but still treat patients in far off rural areas. This opens up a whole new market for those companies developing tele health technologies, medical practices looking to expand, and medical coverage for insurance companies.  For the first time ever, Medicare is covering the cost of telehealth, forcing the other large insurers into also covering the cost of telehealth, which insures this change is here to stay.

3. What are some of the major differences between the US economy, which is a free market economy, and the economies of countries like France, Canada and Greece, which tend to be much more socialistic in their approach to business and citizens? What are some of the pros and cons of each system?

4. For at least the last 20 years, global trade has been growing. Often it has been fueled by the growth of developing economies like China and India, who have now developed into global powerhouse economies themselves. The growth of the European Union and participation in Free Trade Agreements has also fueled the growth of global trade.

   Now, however, we're seeing a number of factors that are slowing the growth of the global economy. England has withdrawn  from the EU, creating uncertainty about how teh EU goes forward. . China's internal economic growth has slowed and companies have started to look elsewhere for low wage production. Led by the US, many companies are putting tariffs in place and otherwise restricting trade with China, to get China to ease its policies on what it requires from companies who seek to do business with China. Venezuela was once a powerhouse economy of South  America, driving the economies of neighboring countries,  but is now in shambles economically. And the Corona virus has decimated international travel and shipping, long a staple activity of driving global trade. 

   In your opinion, are these recent obstacles just a blip in the growth of global trade, or do they signify a more long term slowdown in global trade. Has global trade peaked, or just slowed down for a year or two?  Explain your opinion

Homework Assignment

What are some of the most significant trends within each of the 4 business environments (Economic, Technological, Competition, Social) and what is driving them? The question requires you to identify 4 different trends – one each for each of the 4 environments.
Weekly Quiz

Complete the Week 1 quiz

Text Read Chapters 3 

Discussion Questions

1. Its easy to make ethical decisions when everyone involved is in agreement with the same set of ethical standards. But in a highly global interconnected economy, you can easily find yourself dealing with multiple sets of ethical standards. Our text defines ethics as societies accepted standards of moral behavior. But clearly, there are many different societies in the world, each with its own set of accepted standards. For example, in the US, there is ethical agreement that any work over 40 hours should be paid at a premium (time and a half, double-time, etc.). In most other societies, there is no concept of 'overtime". You work 60 hours a week, you get paid the same rate for all 60 hours. In the US, there is a growing trend to make $15/hour the minimum rate of pay. In many other societies, the pay rate might be $1 per hour and that's considered acceptable by their standards. In our agricultural community, pesticides and fungicides are high regulated and many are outlawed. In many other countries, there is no regulation of pesticides and fungicides so everyone is free to use the most effective aid, regardless of its health risks and that's an acceptable standard. In the US, bribery of any type of official is a crime and not acceptable, yet in many other companies, the use of bribes to get ships cleared through ports, or trucks cleared through customs is considered part of the cost of transportation and acceptable.

   So when your company finds itself dealing with  different sets of ethical standards, in different countries/societies, what's the process  to determine how you deal with those differences?

   I almost always have one student take the high and mighty road and say we have the highest standards so we have to hold others to meet our standards and raise the level of standards everywhere. Sounds great in principle, but here's the problem. Back when I was active in global trade, we tried hard to uphold our highest standards. The problem was that our competitors from other countries  did not agree and did whatever it took to get the deal done. We might have held to our standards but went home without the deals or sales.  Eventually if you lose enough deals or sales to competitors, you jeopardize your own well being as a financially sound company.

   
   2.  The Winter Olympics in China will be underway as we work our way through the course. There is a lot of ethical controversy about whether China should have been awarded the Winter games in the first place, but the bottom line is they were and the games are going on. For the most part, the controversy swirls around China’s increasing hostile approach to human rights in their country and sphere of influence. China is accused of practicing genocide against ethnic Uyghurs within China and using them for slave labor. They have been actively cracking down on democracy and a free press in Hong Kong. And they have been threatening the freedom of Taiwan by massing troops and ships in the region and flying warplanes in their airspace.

   Given the controversy over human rights regarding Chinese activity, Human Rights activists have been calling for companies to suspend any marketing support for the Winter Games. Next to the Superbowl, the Summer and Winter Olympics provide the largest world wide marketing platforms for international companies. In addition to advertising on the television channels that can reach millions around the world with one ad, a variety of media companies make annual budgets by providing a wide variety of communication services. Product placement activity provides endless opportunity for world wide publicity. Corporate sponsorships provide endless publicity. Behind the scenes private parties sponsored by corporations provide endless networking opportunities to line up the next big deal. And this is just the tip of the iceberg of Marketing opportunities the Winter Games provide for their corporate sponsors and advertisers.

   When the games are held in countries with a strong record of protecting Human Rights, supporting a free press and democratic beliefs, there is no question companies will benefit by participating. But in China’s case, with their negative track record in so many areas, the participation question is not so easy to answer. Is it right for companies to ethically participate in the Winter Games marketing opportunities, knowing their monies will be used to support a government that pursues Human Rights abuses most of the world opposes? Or do companies look the other way and participate, feeling most consumers they are trying to reach are not politically savvy and are just interested in a company’s products, regardless of the medium used? And considering how highly competitive most market segments are, can you afford to take an ethical/moral stand and pull out of participation in the Winter Games, knowing most of your direct competitors will continue to participate, gaining an advantage over you in publicity, creating brand awareness, etc.?

   3. The whole concept of Corporate Social Responsibility (CSR) has evolved over the years. Major old time Fortune 500 companies like Ford, General Electric, Dupont, US Steel, etc. have set up foundations and made contributions to society for many years. But now participating in CSR is almost expected of even mid size companies. In addition, companies are looking for more visible CSR activity, to benefit from the positive publicity it generates.

   Discuss examples of companies participating in CSR that you have observed in your own neighborhoods. Were they perceived as real, honest attempts to improve or help the community, or were they seen as PR stunts to make the company look good

Homework Assignment

Select ONE of the following 2 options to complete your assignment:

Option 1: Choose a company that has been in the news within the last two years for an unethical situation, decision, or activity. What ethical guidelines did it break or ignore, and how could this incident have been avoided?

Option 2: With the exception of companies listed in Figure 3.4, page 77, describe a company that you believe is doing an outstanding job of practicing Corporate Social Responsibility and explain why you have that belief?

Remember, the report minimum is 1 - 2 pages

Complete the Week 2 quiz

Text Read Chapters 4 & 5

Discussion Questions

1. Without question, 2020 - 2021 has been a really crazy year. Lots of ups, downs, uncertainties, for sure. So, how do you see the current environment as a time to become an entrepreneur and start your own business? Worst time ever, or a great opportunity? 

   Surprisingly, in times of high unemployment (The Great Recession 2007 - 2009, for example) its not unusual to see increased numbers of start ups. One of the toughest obstacles to starting your own business is walking away from a guaranteed weekly paycheck, benefits, etc. But if you are laid off, let go or furloughed indefinitely, that decision has been made for you. What have you got to lose?  Still, every start up requires some sort of working capital, there have to be customers wanting or needing your goods or services.

   So looking at all things in this crazy year, worst time ever or great opportunity for entrepreneurship? Or somewhere in between?

2. How do the traits of a successful corporate manager differ from that of a successful entrepreneur? Or do they differ at all? Many entrepreneurs are successful at getting a business up and running, but lack the skill set to manage that business once it is up and running.  One the flip side, many highly successful corporate managers take their big bonuses or golden parachutes and try to start their own business but fail miserably. What's the difference?

3. What type of local, state and federal assistance would be available to you, if you wanted to start your own small business? Is there any assistance you feel is critical, that would not be available (except free money with no strings attached)? Whats the hardest challenge you think you would face in starting your own small business?

   Both Federal and State governments are currently offering extensive programs to loan money to small businesses to stay afloat through all the mandatory COVID19 closings. Lets stay away from discussing these programs here for 2 reasons. First, these programs are designed as a short term safety net for existing small businesses, not helping someone start a business. Second, they are still in the process of rolling these programs out and there just isn't enough hard evidence of how they will work to seriously discuss them. The line between fact and fiction is just too blurred at this point

 Homework Assignment

The assignment is to review any list of available franchises and research one that would be of interest to you - assuming you had the investment capital and desire to buy a franchise. Even if you have no desire to buy a franchise, its still interesting to find out what's involved in buying a franchise, why one is different than another, how established franchises differ from start up franchises, etc.
You might start by visiting https://www.entrepreneur.com/franchise500/2018 to see a pretty complete list of available franchises. After you find one or two that interest you, go to their home page where you can see what information they provided for prospective franchisees. Another good site to visit is https://www.forbes.com/best-worst-franchises-to-buy/#3f3a995b2699. If you go to Google and search on Franchises, there are many different sites with franchise information.
In your assignment, address why your chosen franchise is of interest and why you selected the one you did, compared to its competitors. I don't know that I've ever seen a unique franchise without competitors.
As usual, assignments are 1-2 pages.

Take the Week 3 quiz

Text Read Chapters 6

Discussion Questions

1. What are some of the key leadership traits that successful businessmen or businesswomen need to be successful? Is there anything different in the leadership traits  a businessman needs than what a businesswomen needs?  In the past year where we were in uncharted waters over many issues , have you observed a particular business leader (not a politician) exhibit exceptional leadership or incredibly bad leadership?

2. Check out this URL: http://fortune.com/worlds-greatest-leaders/ (Links to an external site.)

   Fortune Magazine is famous for putting out lists and this is one of their newest ones. Here, they identify who they consider to be the worlds top 50 leaders  and provide commentary on why they made the list. While the regulars that you would expect are there, there will be quite a few on the list you never heard of. Its well worth your time to browse the list and get a good feel for how a leading business publication defines leadership.  Anyone on this list surprise or impress you?

3. Name 2 or 3 current business leaders you admire and briefly explain why you admire them.

Homework Assignment

Research one of the leading business men or women of our time. What makes them so successful? What’s unique about them? What’s their leadership style? Would they have been successful in any venture, or did they just get lucky with their initial venture?

Weekly Quiz

Take the Week 4 Quiz

Text Chapter 7 & 8

Discussion Questions

1. Over the last 30 some years, two different production theories gained prominence. The first was low cost production. Simply, you produced your goods where they were  the least expensive. The second was Just in Time( JIT) inventory. Simply, you did not hold inventory. You bought only what you needed over a short time span and bought more often to replenish your stock.

   This theory worked fine until international and domestic supply chains fell apart as companies reacted to dealing with the corona virus. China had become the low cost production center of the world. Most people had no clue how much of the worlds goods were made in China - until the virus effectively shut down hundreds of production sites and goods everyone took for granted - medications, prescription drugs, computer parts, digital equipment, etc.  stopped being produced and shipped. Within weeks there were shortages of a wide range of goods because no one made them domestically anymore.

   Even with domestic production, JIT inventory practices led to acute shortages, with the most noticeable being toilet paper (TP). Everyone had stopped maintaining any appreciable inventory levels of TP. The producers like P&G made what they were going to ship out that day. The distributors like Safeway, Kroger or Wal Mart, shipped out what they received to their stores, often with in 24 hours of receipt.  The demand for TP was very stable, everyone knew what they needed to order or maintain so they system was effective and worked. Until the virus sent millions home and the demand for toilet paper spiked overnight. Everyone had the same thought - well, with a couple more people either home from work or school, I'll just pick up an extra pack of TP, just in case. As demand spiked and shelves emptied, panic buying set in and people started buying 3 and 4 months of TP. Producers were unable to increase production because existing facilities had already been running at capacity to maximize profitability. 

   As everyone struggles to get back to normal (whatever that will become) manufacturers are rethinking moving all production to lowest cost production sites and the use of JIT inventory processes. Already many manufacturers are making plans to bring at least some of their production back home and use technology to enhance production to lower costs.  Distributors are looking to increase inventory levels  of critical items to provide a cushion against unexpected demand spikes. 

   What decision making factors should manufacturers use to decide if they should continue with manufacturing in low cost countries where they have minimal control over production and issues like viruses, or unstable governments? How do producers and distributors handle the need to hold extra inventory so they can react to unexpected demand spikes? Or does everyone agree the virus was a once in a 100 year exception and we should just go back to what was working pre-virus?

2. The use of robotics within companies has been steadily increasing. Assembly line production continues to grow the use of robots. As Amazon continues to build out more and more distribution centers across the country, the growing use of robotics  has become central to their entire warehousing and distribution process. More and more companies are looking at the use of drones (flying robots?) or driverless vehicles to assist in their delivery process.

   This growth changes how companies are structured, staffed, operated and managed. Discuss the pros and cons of the growing use of robotics on company workplaces.

3. Quite a bit has been written recently about the tremendous differences in compensation between senior executives and the hourly employees lower in the organization. As of last year, federal laws now require companies to disclose the difference in average pay between CEOs and employees in their SEC filings. The first set of numbers are now in, and not surprisingly, the CEOs make a lot more money, often between 200 - 400% more than the average employee in their company. Is this a real problem for companies, or is it just overblown hype by a biased media? If you feel this is a real problem for corporations how should they address and resolve it?

   On a separate note,  many highly paid professional athletes and Hollywood celebrities are becoming more and more politically vocal, offering their opinions on a wide range of controversial issues. While everyone was willing to buy and wear replica jerseys, buy their movies or stream their albums, there is growing backlash against them taking political stands and telling their fans how they should think and react. Do you see any similarities between the resentment of CEOs making 400 times more than the average employee, and the resentment building against highly paid pro athletes and celebrities suggesting their opinions are more important than their fan opinions?

Homework Assignment

Most large organizations have a highly defined organizational structure. Employees, departments, executives all have defined roles, process and procedures within which they function, that have evolved over many years.

In 2020, the Corona Virus exploded. Almost overnight, all this changed. Companies shut down large office complexes and told employees to work from home. Instead of flying employees to regional or corporate meetings, companies switched to Zoom meetings. Trade conferences once attended by thousands were cancelled. International business travel ground to a halt. Initially, everyone thought this might be for a month or two, certainly no more than three.

But a funny thing happened. That maximum time of three months became an indefinite hiatus with no end in sight. And company after company found their new organizational structure was as productive, if not more so, than the organizational structure they had been using for years. We are starting to see many large companies move to make these 'temporary ' changes permanent. Many of the large hi tech companies of Silicon Valley are now telling most of their employees to plan on working from home as their new normal. Now instead of paying San Francisco level housing prices, people can relocate from SF to places like Boise Idaho, or Yuma Arizona and deal with a reasonable cost of living. Company after company in New York City are letting their employees move to low cost of living states and working from home.  Companies that used to lease 20 floors of exorbitant  cost office space are downsizing to 2 or 3 floors. Companies that own large office buildings are selling them (good luck finding buyers!)

Discus what types of problems this sudden, overnight, change in organizational structures presents for large organizations? What types of challenges do they have to overcome? How do you create a whole new corporate culture that is supportive of the corporate mission? How do you get employee buy-in on all these total organizational changes?

Weekly Quiz

Take the Week 5 quiz

Text Read Chapters 9 & 10

Discussion Questions

1. In the early 1960's , psychologist Abraham Maslow developed his Hierarchy of Needs theory  (pg 231) as the cornerstone of Motivational Theory in the workplace. For the last 60 years, his theory has been treated as gospel, taught in every business school and accepted by HR directors all over the country.

   But if Maslow came back to life today  and saw the state of our society right now, our diverse culture and demographics, the growth of technology in our communication systems and so much more, he would undoubtedly be shocked.  The world in which he lived in the the 60s is totally different than today. Or is it?  Obviously much has changed - for example, he could not conceive of how the Internet could come to be a central facet of our lives and lifestyle. And if the dominant psychologist of the 1900's came back to life in the early 60's, they would be just as shocked. Time marches on and civilization changes.

   So the question becomes "  Is Maslow's Hierarchy of Needs theory still the bedrock of Motivational Theory in our times?" As we discussed earlier, Millennials seem to be motivated by different goals than Baby Boomers, for example. While things in our society have evolved, has basic human psychology remained the same? Are workers today still motivated as Maslow taught?

2. One major responsibility of HR departments is executing the collective bargaining agreement between unions and companies, where a union represents the employees

   Unions have been highly featured in the news for the past years, despite their overall decline within the workplace.  The teachers unions in a number of states generally are considered the biggest obstacle to the growth of vouchers which can be used by students in failing public schools to attend private schools or charter schools. New auto manufacturing plants have recently been built in southern states where there are no unions. The Supreme Court just recently ruled that Government employees who are represented by a union are no longer required to pay union dues if they opt out (and they are doing just that by the thousands). Unions are working very hard to represent health care workers and government employees, to offset thier decline in manufacturing and other traditional union strongholds.

   Are unions a thing of the past, or is there still a place in our work force for unions?

   Big Labors Big Shrink WSJ Editorial.docx

3. Our workforce is becoming more and more diverse. Millennials have recently replaced Baby Boomers as the largest segment by age in the workforce.  Hispanics are the fastest rising ethnic group in our workforce. Legal immigrants from a wide variety of countries and backgrounds continue to be a growing part of our workforce.

   Its well documented that different groups or segments are motivated by different forces. What works for one individual might fall flat on another individual. Given the growing diversity in our workplace, discuss what you see as challenges in motivating employees  within a department or company using different techniques but still treating everyone equally.  What have you seen in your workplace that has either worked or has negatively affected morale.

Homework Assignment

Millennials, generally defined as those born between 1982 and 2004, have just recently surpassed Baby Boomers, generally defined as those born between 1946 and 1964, as the largest segment in the U.S. workforce when you break the workforce down by age. It has been widely discussed that Millennials are motivated by very different factors than those traditionally used to motivate Baby Boomers.

Assume you are the VP of a Fortune 500 company and you know the majority of your employees are now Millennials. What changes would you suggest you make in your approach to compensation and benefits to more directly appeal to your new majority of employees, while at the same time keeping your Baby Boomer employees happy?

Weekly Quiz

Take the Week 6 quiz

Text Read Chapter 11

Discussion Questions

1. In many ways the “Middleman” has been vilified as an unnecessary part of the supply chain that needlessly drives up the cost. You probably can't count all the commercials you have seen that scream "Buy direct! Cut out the Middleman and save hundreds!" After reading Chapter 11, do ‘middlemen’ have a value to consumers, or do they just drive up the cost? We typically don't think of our local supermarkets, big box stores or Wal Mart as middlemen, but they are.  And Amazon has to be the biggest e-commerce middleman.  

   Are there any specific instances where you have eliminated the middleman and saved time or money? 

2. How important is Branding today? Is it worth the resources, time and money it takes to create Brand awareness for your product or service? After all, don’t almost all consumers make their choices based on product price? Those who think the importance of branding has diminished, point to the success of Aldi Supermarkets. Aldi is one of the largest German supermarket chains that has opened up hundreds of supermarkets in the US over the last 5 years with great success. They never carry any well known national brands. All their products use packer labels, generic labels or local/regional labels. Their stores all always located in lower income areas, where price is extremely important. 

   When the attached article on the war between big box stores and national brand manufacturers appeared in 2003, it was a cutting edge article that many industry 'experts' laughed at. Since then, just about everything the article predicted has come true. Your thoughts?

   Brand Killers.doc

3. The two largest formats to sell products to consumers are retail stores and e-commerce. That said, there are still many non traditional ways to sell products to consumers. For example, RedBox sells/rents CDs to consumers via a vending machine. Food trucks are a new mobile retailer that doesn't limit a restaurant to a location.

   What other non traditional formats are you aware of that companies are using to sell products to consumers?

4. This is a non graded question but it always generates great discussion about our irrational attachments to certain brands and why we have that attachment.

   We all have some irrational attachment to at least one brand. In my site based classes, I always ask my students if they have that irrational attachment and I have yet to find 1 student who says they do not. What I am interested in is the reason for it. What is it that holds that irrational attachment against all competitors? Common reasons are an unmatched  quality, a brand their mom or dad always used, a brand they associate with a very good time or event in their lives. Its more of an emotional attachment than a rational attachment.

   So, is there one brand to which  you are irrationally attached? Is there one brand that you will buy even if it costs twice as much as a competitive brand, one brand that you will drive to a special store past other stores to buy? What drives that attachment?

Homework Assignment

  Following are a few major U.S. companies that were highly successful for many years but now are totally out of business or a mere fraction of what they once were: Compaq Computers, Kodak, Radio Shack, Circuit City, Enron, Blockbuster, Pan Am Airlines, Tower Records, Polaroid, Lionel Corp., Bethlehem Steel, Atari, The Sharper Image, Borders and Toys R Us.

Select one company to review and analyze. What was the primary cause of its demise? Did management (or rather mismanagement play a role, or was it just a victim of the times with changing technology and lifestyles? Could anything have been done to save your selection?

Weekly Quiz

Take the Week 7 quiz

Read Chapter 12

Discussion Questions

1. A few years ago, Amazon bought Whole Foods. The strategy was to add Whole Foods merchandise to Amazons building home grocery delivery service. They immediately dropped prices on Whole Foods (who had the nickname Whole Paycheck because of high prices) products. The reasoning was that they felt they could make a profit by increasing the economies of scale within their organization, instead of relying on high prices.

As Wal Mart built their online business, they used the same approach. They kept online  prices comparable to their store prices, to help build their online business and to give customers the option. Internal results showed the approach was working, as online sales were increasing much faster than store sales. One thought was that Wal Mart shoppers were abandoning the stores for the Web site.

Now Wal Mart is changing their strategy. they have slowly, but methodically, raised the online prices of thousands of items compared to their store based prices. They have come to the conclusion that online shoppers were online shoppers primarily for time and convenience and would rather pay a higher price to have goods ordered in the comfort of their home and  delivered instead of driving to a store, fighting the crowds and driving home. If they are right, and online business continues to grow even with a higher markeup, this will be very beneficial to their bottom line.

So are online shoppers motivated more by time and convenience savings, or money savings? (No fair saying all are motivating factors because they are. Its a matter of which is the stronger motivating factor). What's the tipping point in pricing between buying online and in a store? For example, if a 12 pack of Coke sells for $8 in a store, and $8 online (no shipping charge) it makes sense to do the online ordering to save time and convenience. If the online price goes to $8.10, you would probably still go online. But what if the online price goes to $9. Now the decision is a little more challenging. Will WalMarts new pricing strategy help their bottom line or hurt their sales growth?

On a similar note, Instacart has partnered with a number of supermarkets to provide same day home delivery. this has proven very popular with people who are not comfortable going to the store in person.  The one downside is that when you order through Instacart, it automatically adds a 15% gratuity to the order. This is how Instacart makes money. So far, it doesn't seem to be a factor in sales growth. People are OK with a 15% cost of delivery to avoid the in person store trip. Is that a viable pricing strategy for the long term?  When we get back to normal times (whatever and whenever that is) do you feel people will be comfortable with the 15% delivery charge, or will they go back to doing their own shopping.? New habits can be as difficult to break as old habits.

2. Discuss a recent Marketing Communication you have observed that did not work as planned. What could have been done to make sure it worked instead of failing? For example, a recent catalog of Abercrombie and Fitch used young looking, almost nude models throughout the catalog. While it thought that approach might effectively capture the interest of its target market (college age students), it did not count on a backlash from parents and churches who felt it was inappropriate and that forced it to pull the catalog and redo it at considerable expense.

3. Why is it important to differentiate your product from your competitors? Provide an example of a product that has successfully differentiated itself from its competitors and show how it did so.

For example, Pringles is the only potato chip sold in a tube. All others are sold in bags.

Here's another example. A Bloody Mary  is a very popular weekend morning drink that uses vodka, a tomato based mix, hot sauce and spices. There are dozens and dozens of vodka brands you could pick from but only one - BAKON -  is a bacon flavored vodka designed and advertised to be used in Bloody Marys to enhance the tomato based taste. They also promote this use on the packaging. It is slightly more expensive than most other vodkas but has a very loyal following because of the way it has differentiated itself from its competition with a unique taste.

Assignment

Find two companies that are both successful yet use two different Channels of Distribution.

For example, both Avon and Revlon make and market woman’s cosmetics. Revlon sells through a variety of retail and department stores. Avon, on the other hand, sells through personal networking – you can’t buy Avon in a store.

(And you can’t use Avon/Revlon as your example!)

Text Read Chapter 13 & 14

Discussion Questions

1. What are some of the newest uses of technology that you have seen in your workplace or read about? For example, the use of ZOOM for digital conference calls has exploded exponentially. 

2. After reading the Section Big Data and Data Analytics (pg 361) how do you feel about how companies use the information they have collected? For example, if you go on site to check out availability of a particular good, you will almost instantly start to receive new communication about offers on that item  or related items. Just good salesmanship? Target can tell from a women's purchases that she is probably pregnant and can send her coupons or sales prices on items of interest to a pregnant women. Good salesmanship, or stalking? Is an an invasion of privacy to track your search habits and make conclusions or deductions based on those habits? Where is the line between using the data a company has  collected to drive sales and disrespecting someone's privacy? Or is there no longer a line?

3. Read Making Ethical Decisions on page 396 of the text. As the lone accountant for Fido's Feast, what would you do?

Homework Assignment

Develop an Internet Access policy for a small business of 500 employees. Discuss who will have access, what they will be allowed to use it for, what is prohibited use, penalties for breech of the policy, how the policy will be enforced, etc. Submit a format that would allow your policy to be posted to a department bulletin board.

Weekly Quiz
Take the Week 9 quiz

Read Chapters 15 - 16

Discussion Questions

1. Chapter 16 discusses many of the services provided by the US Banking system through its many banks - checking accounts, CDs, safety deposit boxes,  brokerage services, counseling, loans,  automated deposits, automated bill paying, and many more. 

What's changed recently is how the banks provide those services. Traditionally, you had to physically walk into a bank to obtain those services. Then we saw the use of drive up windows, followed by ATMs at multiple locations, followed by banking through your smart phones or computers. Many banks have closed hundreds of local branches because no one is physically going into banks anymore (or at least not enough to have multiple branches in a given geographic area) to obtain the services they need.

How have you observed changes in how banks deliver services in your lifetime? Do you view them as positive or negative changes?  What do you see as the future of consumer banking?

2. The Federal Reserve Board is generally considered to be one of the most important agencies in the Federal Government. Because of its independence, some consider it the 4th branch of government. Even though the President appoints the Chairmen and the other 6 Board members, it is almost constitutionally impossible for the President to remove any of the Board members or Chairmen.

The Fed is in the news almost daily right now because of its role in trying to stimulate the economy that has been shut down for the Corona virus. Find one article about action the Fed has recently taken (or not taken - sometimes taking no action can be the best way forward),  give us a short summary of the article and why this was important to the economy.

3. In the past few years we’ve seen a number of corporate scandals and most all involve some type of fraudulent accounting practices. Just last year the CEO of Wells Fargo had to step down because of in house scandals where sales agents were opening bogus additional accounts for current customers to meet new account goals.  How important is it for company executives to balance the need to meet financial goals and keep the company growing and profitable, against the need to make business decisions ethically (not just legally), and to run a company for the long term, as opposed to just meeting short term goals that max out their quarterly bonuses

4.As a company CEO, what do you feel are the most important financial statements you need to see to help you run your business most profitably and why do you feel those those statements are the most needed?

Text: Review text readings from previous 10 weeks

Discussion Questions Discussion Forums will be open all week to allow anyone to review past discussions or to seek clarification of a topic prior to taking the Final Exam.

Complete the Final Exam