Communication via Blog

This blog is an interesting method to communicate with each other on the topic of that class. Some of the scenario and cases which I really have not read and heard about it. Through the blog I broaden the way to see things by reading other classmates' blog entries and I found that I did not thing deeply enough on some topics especailly some companies' strategic movements.
So I think the blod should be keep as an element of this class.

I also found that all the topics we discuss in the blog are very important and very helpful in order to do the analysis of the industry for our presentation. However, the timing is not fit to the run down of the class. I suggest is it possible to finish all the blog entries before presentation. In addition, if Professor can talk about each topic before we do the blog entry is more helpful for us.

The last point we can freely express our point of view in the blog. It is good for those, like me, seldom talk in the class. It provides another channel to express their ideas and comment on some issue.

So, I think the blog is good.

Diagnosing Strategic Problem

During the past six years, there is a bank that had emerged in New York City. It's name is called Commerce Bank. The bank is growing fast. They open branches in the 5 boroughs in a incredible speed. Their customer service is the number one in the industry. But last month, they announced that they are bought by a Canadian bank, TD NorthBank at a very lower price: $42 per share. And an article in the Wall Street Journal commented that Commercial Bank is not in a good position to negotiate with TD NorthBank in this transaction. So, Commerce Bank might not as strong as her growing rate of number of branches. As a Commercial Bank staff for almost 3 years, although I do not know the whole picture of the bank, but I can spot some strategic problems of Commerce Bank.

Firstly, the bank products perceived as relatively substandard. Bank products can be generally divided into consumer loan products, such as credit card, personal loans or mortagages. The second category is depository products such as, money market, CD and savings and checking account. Commerce Bank claimed herself is very conservative in loan approval. They require customer to have an above average credit ranking in order to consider their application. Therefore, the number of approved cases is less than other banks. However, the interest earn from loan to customers is one of the major income to the bank. Moreover, the interest rates offered to depository account clients is also not competitive than other major banks. The outcome is customer switch to other banks and Commerce Bank is not competitive. The marketing team of the bank strongly believe that best customer service can retain customers with the bank, But they ignore that the now a day more important to interest-sentitive cusotmers is the money they earn from their money deposit in the bank.

Secondly, the high employee turnover rate is also a problem to the bank. Commerce Bank business hour is from 7:30am to 8:00pm. Employee are required to work 3 differents shifts rotatingly. However, there is no shift allowance and also the wages are comparatively low in the industry. All together, it is hard for the bank to retain staff and makes them loyal to the bank. Futhermore, the bank heavily rely on part time employee heavily is a problem too. Their loyalty is less than full time employee in general. Commerce Bank needs to hire and train staff in a regular basis due to the high turnover rate. A lot of money and time spend on this process. But I cannot see any remedy to this situation.

Although top management forces every staff in Commerce Bank to provide number one customer services to every customer, however the position of the bank in the banking industry is not strong in term of products and staff morale.

Managing Strategic Business Policy

I would like to talk about Weight Watchers (WW)for this topic because over-weight is my problem since I was a teenager and I have been trying so many methods to loose some pounds. Some ways are effective but some ways are cheating people. But self-discipline is the most important thing that one should have plus a healthy eating habit in order to loose weights. WW introducing the right way, points system, clients meeting online blogs system and member to member consultation, to help over-weight clients to achieve their goals.

But how many people have that kind of self discipline? That is the main element that threaten the suceed of WW. The probability of clients having no self-discipline is 70%. Luckily, today people are increasing awareness of the importance of healthy food consumption. WW can increase the education to the public and the existing memebers how to eat correctly. Some of the tactics may be advistisement in magazine, publising articles, sponsoring some TV programs which are related to eating and health. The aim is to link WW to the healthy eating habit that leads to lose weight effect.

The second is the rise of technologies. Liposuction is the symbol of the weight lose because of the rise of technology. Now people in genetic field are studying on a new kind of semi-artificial protein to inject to human body in order to increase the metabolism to burn fat. This kind of product will come out around 10 years later. The probability of this kind of threat is 100%. So, WW is should point out to their clients to know the bad side-effect of that kind of method. Such as liposuction: the high risk of bacteria infection due to the equipement contamination; scares left on the body ect., Moreover, some of the this methods has no data to tell the harmful effect to human body since some of those methods are too new.

The third kind of threat is the weight lost supplements. This kind of product is popular for a long long time and it will continuse their popularity in the future. The probability is 100%. This kind of products are target at those consumer with low self-displine and those want fast result. So, businessmen use some ingredients that can really help to lose weights but hazardous to human body in order to boost sales. WW should education public that there is no fast tracks to lose weight but only the WW way is the right way.

In order to grap more clients to WW, the first thing to do is to educate consumer. It can be done by advrtisement, free meeting, promote with health clinic and gym house and so on.

Competitive Advantage

First Mover/First Entrant
Sony is a creative innovator of digital technologies products. For example: a decade ago they invented Minidisc, several years ago they invented UMD for PSP, recently they invented Blue Ray Disc for PS3. Sony is the first entrant of those digital technologies and Sony brings the high quality digital technologies first to consumer market. Sony positioned themself as the market leader by producing and selling high-tech and innovative products.

Niche Dominance
In credit card industry, American Express Black Gold Card and Diner Club are the companies issue credit/charge cards aimed at the niche consisting of the top-spending cardholders. Those cards are marketed as a symbol of the social status. Because of their established image is very sucessful, they are very welcome by those big spenders and also their position is not easy bitted by VISA and Mastercard.

Market Share Dominance
MS Window is still the winner of disk operation system software market. MS has dominated that market for several decades. They offered updated version periodically and consumer who are using IBM compatible computer seems with have no other choice but only 'follow' the company's 'order' to use the software.

Business Strategies

Cost Leadership:
I would like to say Costco is the cost leader in the selling of grocery items market. Costco combines warehouse, wholesellers and retailers into one mega store. The whole distribution channel is happen in one place. It can save the time and money in the managing and marketing the hundreds of items carrying by Costco. The money saved in this operation can benefit to the consumer.
Differentiation:
Apple Computer differeniate themselves from other competitor as Apple's products are high quality and more advance in technology. Example like iPod and the current iTouch are markted as high quality and more advance in the market. Of course the price is more expensive. Many computer production companies are 'imaging' iPod to market their 'iPod like' MP3 and MP4 products in order to get a piece of cake from the market. But the Apple Computer is the leader.
Focus:
Starbucks specialized on specialty coffee. The cafe mainly serving the consumer of coffee market. We can say Starbucks is serving a niche market.However, this niche is so big that Starbucks earns a lot from the coffee market. Starbucks is smart that she is not just selling specialty coffee, her is also creating a new coffee drink culture and Starbucks can meet what the high end coffee drinkers expectation and match their attitudes. But we still regards Starbucks=specialty coffee.

Porter's Five Forces

Porter's Five Forces is a great tool to analysis how the external envoirnoment in general to affect the attractiveness on a segment of industry that we are interested in. As we discuss in the class, the 5 forces are:

• Threat of new entrants
• Bargining power of suppliers
• Bargining power of buyers
• Threat from substitutes
• Intensity of rivalry

If we can have accurate information on the above 5 areas and we have our own strength that is strong enough to face those 5 external influences, we are at a very good position to run the business. However, I believe that the Porter's 5 forces just provides a general insight of the external envoironment. In order to the be success, we need to 'look in deep' of the external envoirnment. I would like to add on more area to the 5 forces in order to make it to a complete external envoironment analysis. They are (if applicable):

• Industry Life Cycle Analysis
• Econimic Condition Analysis
• Consumer Analysis
• Political/Legal Analysis
• Technology
• Global Trend/Condition Analysis

Here is an Porter's 5 Forces Analysis for OutBack Steak House(Full Service Restaurant (FSR)sector of Restaurant Industry).

• Threat of new entrants: LOW-Saturated and competitive FSR industry
• Bargaining power of suppliers: HIGH-No accepteable substitutes for good grade beef from other sources.
• Bargaining power of buyers: HIGH-Price sensitive buyers with low switching costs. Many choices of steak house in the FSR industry.
• Threat from substitutes: MODERATE-substitutes include cooking at home, fast food, other convenience foods and other type of cusines. Higher trend of eat out families now because working women in the market.
• Intensive of rivalry: VERY INTENSE-Numerous competitors in the market with similiar strength: Applebee's, TGI Fridays, Chill's). Saturated market of FSR industry sector.

Information Sources: Restaurant Industry Forecast 2006 & 2007.

MISSION STATEMENT OF MITCH

TASK

I am working for Commerce Bank as a branch supervisor. My duty is to assist my branch manager and assistant manager to supervise staff to perform their jobs accurately and ensure the daily branch operation running properly and smoothly.
In addition, I am working on my college degree on finance and investment major. My expected graduation date is summer 2008.

VISION & GOALS

As I move on my career path in retail banking field, finacial advisor (FA) position could earn more comparatively. Therefore I will move to sales side and I want to work for an international bank as a FA in 2008. My short term goal is to gain experience in US bank for 2 years then move back to my country Hong Kong to continue the same career in banking field there.
My personal goal is in my late 40s, I can own or partner with my friends to open restaurant in tourist area in Hong Kong.

VALUES

Since I have engaged many years in customer service industry, I know that consumer satisfaction is the top priority for a business to be success. Therefore whatever kind of business we are running, we have to continue improve the product quality and image of our products and company in order to match and even exceed consumer expectations. So I feel proud if I can help customers to solve their needs and always offer something which is more than their expectation.