Disruptive Technology: Verizon Wireless

Verizon Wireless(VZW) in early 2010 announced it will allow its subscribers to use Skype application over its 3G network through compatible technology. Although ATT had Iphone which was already made compatible with Skype, it didn't allow access to Skype over its network. VZW soon realized the importance of this free call app and made the first move. This helped VZW to gain upper hand in the market as it realized the importance of disruptive technology. Although Skype would reduce the number calls over its network, it was able to increase the data subscription and sale of smart phones. This move in return increased revenue for VZW.

Subscribers valued this over the Iphone that ATT was offering and retained their subscription with Verizon. ATT soon realized this and made the necessary changes to allow skype over its network. But by then it was too late and the disruptive technology had harmed ATT. On the other had it brought fruitful results for VZW.

Strategy: Porter's 5 Forces--Friday, January 20, 2012

Friday, January 20, 2012

Strategy: Porter's 5 Forces

Porter's five forces is a framework for industry analysis and business strategy development. These five forces effect the company's ability to serve it's customer and make profit. Lets analyze Ford Motor Company according to Porter's Five Forces.

1. Threat of New Competition: The treat of new competition is very high for Ford. With companies like Hyundai and Kia, which are gaining extensive market share, we can say that there is major threat for Ford to lose market share to these new companies which are trying establish their root in the American Auto Industry. Since both the scale of economy and Scope economy are high for the Auto Industry, the treat for new competition is imminent for company like Ford.

2. Threat of Substitute Products: The treat for substitute is low but it still exist. With the cost of gas increasing and the economy not function very well, people have cut down their spending in long term investments like automobiles. They have gone to other alternatives like public transportation.

3. Bargaining Power of Customers: Although the Automobile Industry is huge and there are huge number of buyers, due to the availability of alternatives and the current economic downturn, the Bargaining power of customers have gone up. The customers are looking for more affordable and reliable automobiles, and they have huge number of alternatives to choose from.

4. Bargaining Power of Suppliers: The bargaining power of suppliers is very low for Ford. Ford controls all its suppliers and have made special arrangement and commitments with its suppliers that favors its operation and helps cut cost for ford.

5.Intensity of Competitive Rivalry: The Intensity for Competitive Rivalry is very high for Ford. With other automobiles companies trying to boost their sales and new companies entering the market, there is intense rivalry. Although there are huge start up cost associated with new companies, but the companies trying to penetrate the market are already well established in other countries. The switching cost and exit cost associated with the automobile industry are very high which makes the rivalry even more tough.

Apple Inc.--Friday, February 3, 2012

Friday, February 3, 2012

Apple Inc.

Apple currently has been in the news for its record sales. It is the leading smartphone and PC vendor in Q4 of 2011. It displaced the performance of leading manufactures like Nokia by record sales. The smartphone shipment increased by 63%, PC by 15% and tablets by 247% by the end of 2011.

The main question is how is apple able to achieve such a huge growth? Let’s analyze Apple’s performance using a strategy curve.

If we compare Apple to Sony or HP, we can see that Apple products are much more expensive than its competitors. Although there are comparably more applications available in Apple products, but only few of them are available for free whereas in Android OS products more applications are available for free. But Apple bets its competitors in design, performance, customer service and reliability. However, Apple products are less customizable than its competitors.

In spite of its high pricing, Apple has been successful to gain market share. The main factor behind its success is its innovation and product reliability.

7-S Alignment

For the past few summers, I have been doing an internship as a wireless consultant at various wireless retail stores in New York. The business was owned by my cousin. After a few years of experience, last year I got the opportunity to take over one of his store and manage it. The store was doing horrible in terms of profit and he was losing tons of money every month. It was one of his smallest stores in Upper West-Side of Manhattan.

The store had two other employees as part time and he had recently fired the manager. Although back then I didn’t have the knowledge of the 7-S alignment but I was able to analyze the current situation of the store using some of the S’s. The first thing that came to my mind was what their strategy to run the business was. All my cousin cared was about profit, so the main strategy set for the store was to make money and as for the staffs was to complete their working hours. There was no incentive system set for the staffs to motivate them to generate more revenue. The structure of the store was not organized at all. Although they had a manager in the store working full time, everybody in the store was their own boss. No one was responsible to report to anyone regarding any matters. I clearly saw a culture issue in the store, as no one was there on time and they left the store whenever they wanted. I also found out the staff didn’t have the right skills to handle the customers. They did not complete the required trainings set by the wireless company and where not up-to-date on price plans and commission structure. They lacked detail knowledge about features of the newer models of phone. They were incompetent according to the standards set by the corporate office.

After taking over the store, I realized there was a lot to change. The first thing I did was I called a team meeting and made sure the owner was present there. In the meeting, I talked about all the incompetencies I saw in the store. First, I started with the strategy for the store. Keeping the owners best interest in mind, I set strategy such that everybody makes money in the process and the customers are best served. I asked the staffs to serve each and every customer politely and make sure that they leave the store happy. I was able to convince the owner to change the compensation system and structure it in such a way that everybody got a piece of profit. I knew that this will motivate the staffs to sell more and serve all customers resulting in higher revenue for the store. After we all agreed on the compensation, we then discussed the structure. The two staffs were made responsible to report to me and I was responsible to report to the owner. This was set as the channel of communication as well. We also set a minimum profit level for each sale and the staffs were responsible to take approval from me to make any sales under the threshold.

In the next few days, I made sure that all the required trainings were completed by the staffs and educated the staffs on the new model of phones and price plan. I also trained them on the commission structure so that they would be able to calculating profit on each sale. We as a team agreed to maintain a good working environment in the store and set a good culture. I made sure that everybody was punctual and responsible towards their job duty. The changes took couple of weeks to take place but at the end I had a competent staff who were motivated, had the right skill set and shared the same value.

I saw the misalignment in the store and unknowingly I was able to follow the 7-s alignment model to turn the store into profit. In my four months as a manager, I was able to change a lot in store and at the end the owner was making money and the staffs were making money. The employees say a huge increase in their pay check, which motivated them to work even harder and maintain the structure, system, culture and value of the store. They completed all the trainings in time and were all on top of their game. They served all customers properly and increased the reputation of the store. As a result we saw a huge increase in referrals and customer base.