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April 13, 2006
Unit of Business Play - Ryanair
So how is this for interesting? Business 2.0 reports in April that Ireland's Ryanair may soon be prepared to give away tickets for flights for free. What's the catch? You pay for everything (and I do mean everything) else that used to come along with the flying experience. Not just food & drinks, but for things like checking your bags. They are serious about keeping costs down - to the point where they even remove the seat-back pocket to save space and weight.
When you think about it though, how creative! Customers are basically saying they don't want to pay for flying - so why not give them exactly what they are prepared to pay for.
Posted by Rita at 03:17 AM | Comments (0) | TrackBack
April 11, 2006
Innovative HR
This is an interesting way to deal with workforce flexibility. Business Week (April 17, 2006 edition, p. 14) reports that McDonald's in the UK is testing a program that allows employees from the same immediate family to fill in for one another without clearing it with the boss. It's called the family contract, and in my opinion is a great way to deal with the fact tha work and family often require juggling to accommodate the demands of both. According to the story, about 1.5% of the 60,000 British McDonald's workers are related to one another.
Posted by Rita at 04:41 AM | Comments (0)
April 09, 2006
The Buying Triangle
Just learned about an extremely interesting idea for helping customers' improve their key metrics. It turns out that many large companies are actually unable to manage their procurement supply chains very effectively because there is a lot of information loss from the signing of a contract to the payment of a check. The dilemma is that as the payment system increases in complexity, it gets easier for vendors to charge more than they are entitled to. Often, these payments can slip through the cracks.
Enter The Buying Triangle, http://www.thebuyingtriangle.com/a new company founded on the concept that helping companies manage their payment streams better will have value.
A typical overpayment occurs because the supplier puts in a bill for a more expensive offering than was actually delivered. For instance, a letter carrier might charge for a heavier package than was sent, or a service provider might charge for a higher class of service. It looks at first glance as though the bill is for items that are covered by the contract. But it isnt until you go line-by-line to see what was actually sent that you can pick up the discrepancies. So one of the things this company does is monitor the actual goods and services delivered and map these against contracts and payments. They estimate that a product offering they call PtoPSmart can save a typical large corporate customers 10% to 15% of their purchasing bill.
Check out their web site. Who knew there were so many exciting things going on in the world of purchasing and procurement?
Posted by Rita at 04:04 PM | Comments (0) | TrackBack
Update - Money from a nuisance
You may remember that some months ago, I wrote about a service that promised to handle junk faxes. To refresh your memory, here is how it works: You register with a company called Fax Recovery Systems at http://www.faxrecoverysystems.com. After they have given you a registration number, you collect junk faxes as they come in and periodically forward them to the service.
What Fax Recovery Systems does is aggregate these junk faxes from many clients. They then sue the offending companies under the federal Telephone Consumer Protection Act of 1991 (TCPA). If they win a settlement, they send the clients that provided the evidence a check. They make their profit by retaining the rest of the settlement, which I think is only fair since they do not charge for the service.
Imagine my surprise when a check for $100 was sent to me yesterday. How delightful. I dont begrudge them keeping whatever they got from the settlement. If it helps decrease my junk faxes, I am a happy camper.
Posted by Rita at 03:18 PM | Comments (0) | TrackBack
April 07, 2006
Consumption Chain Final Disposal
One of the strategies we talk about in the book is to focus on the final disposal problem for products.
A new strategy attracting attention draws attention to this problem. Hewlett Packard has made a huge business out of recycling, and is probably the leading company in the area. They started with cartridges and now moving on to whole computers. They are a major force behind lobbying that is trying to force companies to commit to recycling entire computers.
See this web site for details on their program:
http://www.hp.com/hpinfo/globalcitizenship/environment/return/index.html
As to the confidential data stored in hard drives, it’s best to physically destroy the drives that contain it. Forensic experts (and those with malicious intent) can often resuscitate data even if the user thinks it is deleted.
Posted by Rita at 06:33 PM | Comments (0)
Tragic second order
Today's Wall Street Journal tells a tragic tale of unanticipated consequences. It seems that many AIDS sufferers in South Africa are not taking their medicine in order to make themselves REALLY sick. Why do this? Because only when one is terribly ill are you eligible for a disability payment which creates cold hard cash. The AIDS drugs are then not taken because people who can't get jobs or find other means of employment want that disability payment. It's gotten to the point where some individuals are infecting themselves to become sick enough to qualify. There has got to be a better policy than this!
Posted by Rita at 06:14 PM | Comments (0)
April 06, 2006
Empire Strikes Back: Netflix version
Netflix (see case study in the case study portion of our web site) did a great job of capitalizing on the dissatisfiers/enragers in competing offerings. Blockbuster, for instance, drove good customers crazy with their practice of charging late fees. Netflix has created a business with over 5 million subscribers, who list the movies they want to watch, get them in the mail, and return them when they are done. No late fees -- when the movie is returned, Netflix sends the next one on the list. So it seems that this idea (that customers might actually prefer to have their choices unaffected by late fees) was so compelling that it started to eat into Blockbusters' business.
How to respond? Better innovation? Better customer service? No -- what about complete and total imitation of the Netflix model? Blockbuster has started to offer the same type of service. How to respond if you're Netflix? The company (founded in 1999) has taken out patents on its business model. Now, it finds itself in the position of having to defend those patents against an aggressive competitor who wants to imitate what they are doing. How will it end? We don't know.
I'm willing to make one bet though -- both Blockbuster and Netflix are not going to know what hit them when video-on-demand becomes a reality. Think about it - as soon as broadband pipes become widely available, you won't even have to deal with postage or a trip to the video store (or late fees). Just dial in the codes, pop your popcorn and you are THERE.
Honestly, if I were Blockbuster, I'd be a lot more worried about that model than I am about the Netflix model. So now, instead of coming up with something that gets customers to want to come to the stores (better service? Store experience? Games? Personalized shopping advice? Mocha latte's with your choices?) they are imitating a business model that is clearly going to be threatened in the not so distant future.
Where is the imagination out there, guys????
Posted by Rita at 03:10 AM | Comments (0)
