Tag Archives: Strategic management

September 9, 2016 · 2:01 pm

A Dyspeptic Foodie Friday

The end of the week has brought us to another Foodie Friday. Unfortunately, it’s not really a fun Friday this time. I spent the night with a nasty case of excess acidity inflaming my esophagus. That’s unusual for me since I’ve always fancied myself to have a bit of an iron gut. Still, the burning was real and uncomfortable but it did get me thinking.

diagram of a human digestive system

(Photo credit: Wikipedia)

Stomach acid is a normal, critical part of our digestive systems. For many folks, certain foods trigger excess stomach acid which finds its way back up. Tomato sauce is one of those foods and although I’ve never had an issue before it was part of my dinner last evening so maybe that was it. Whatever it was that triggered it, something that was normal and necessary had gone to an extreme and was now a detriment. Which is, of course, the business thought today.

Think of someone you know in business who is really smart. My guess is that they are also kind of impatient. They grasp things faster than many people and it seems to take them a concentrated effort to be patient while the rest of the team catches on. Take a boss who tries to be supportive of his folks but lets them cross over into being slackers. Those two examples are of good qualities – intelligence and supportiveness – which have gone to an extreme and turned into something detrimental – impatience and sloppiness. Like my digestive system last night, they require immediate action to rein them back to normal before real damage is done.

It’s great to be forceful but bad to cross the line into badgering. It’s fine to emphasize strategy but when you overdo it and upset the balance with the real world of execution and operation, you’re hurting the system. I’ll be a bit more careful with my normally wonderful digestion going forward. It’s probably not a bad idea to pay attention to all the good things in your business that might be heading to an extreme before the business requires  an antacid. Deal?

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August 25, 2016 · 9:45 am

Shopping Until You’re Dropping

Today’s screed is mostly about shopping (or selling, I suppose). I read some results from a research report and I think you’ll probably share my thinking about what the data shows: more of what we already know.

In a recent study UPS and ComScore released a U.S. study revealing changes in consumer shopping preferences and buying behavior. A total of 5,000 U.S. consumers were surveyed. The results indicate consumers plan to research and purchase more frequently using their mobile devices, they are influenced by social media, and free shipping continues to drive purchasing decisions.

No real shockers, but as with any study there are some nuances to the findings that are instructive. Nearly everyone (93%) shops at small retailers and 40% of them wanted to support the small business community by doing so. 49% couldn’t find what they needed from traditional stores so they turn to more niche retail outlets. Better prices (57%) and selection (49%) are the top reasons for purchasing online after researching an item in-store, which to me smells like an opportunity for bricks and mortar. After all, while there’s no doubt online sellers don’t have the same cost structure as offline, they have other challenges that can level the playing field.

One thing is returns. When a purchase is made online from a retailer that has an online and physical store, 39% of consumers who make returns prefer to ship the product back while 61% prefer to return the item to the store. When making an in-store return, 70% purchase an additional item compared to only 42% who make a new purchase while processing an online return. I suspect that this “ease of returns” is a selling point for pure physical retailers. According to the report, only 62% of consumers are satisfied with the online returns process: 67% review a retailer’s return policy before making a purchase, 66% want free return shipping, 58% want a hassle-free “no questions asked” return policy, and 47% want an easy-to-print return label.

The study provides insight to help retailers increase sales. 48% of online shoppers said they ship items to the store, with 45% of those saying they made additional purchases when picking up their orders. Free shipping remains the most important option during checkout according to 77% of online shoppers. More than half (60%) have added items to their cart to qualify for free shipping.

Most of the above seems fairly intuitive, but it never hurts to have our own intuition supported by facts, does it?

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August 12, 2016 · 12:14 pm

Give Them A Reason

This Foodie Friday comes in the midst of various companies announcing their financial results. One of those companies is Wendy’s, which reported weaker than expected sales growth. That’s not particularly unusual for any company, but I think there’s a business lesson in the thinking behind their reasoning for the weak results. Let’s see what you think.

Foto de una carretera en la cual se destacan a...

(Photo credit: Wikipedia)

According to Wendy’s, people aren’t dining out as much because it has gotten even cheaper to eat at home. Bulletin to the financial folks at the company: it’s generally been cheaper to eat at home. I can’t ever recall anyone I know saying let’s go out to eat and save some money, even when our destination is a fast-food place. In my mind, that’s not why people choose to dine out. It may be more convenient or they might just not feel like cooking. Maybe there is a time crunch (although unless you’re already out and about, you can probably whip up a couple of burgers in the time it would take to get to Wendy’s and eat). Wendy’s isn’t alone in either the weak results or the unusual reasoning, at least according to this article:

The results from Wendy’s follow disappointing sales from other chains including McDonald’s, Burger King, Dunkin’ Donuts and Starbucks. The other chains have cited a variety of reasons, including the political uncertainty created by the presidential election, for their performance.

Let’s accept that their reasoning is sound (hmm). Any of us in business realize that there are always any number factors beyond our control. Commodity prices, which can be strongly influenced by the biggest thing out of our control – the weather – are certainly one factor in the food industry. What we can control is how we give our customers a reason to come patronize us, regardless of the cost. We ought to be selling value. Unfortunately, in the food business “value menu” has become synonymous with “cheap.” That can only work for so long, especially, as in this case, as the costs of making our product or providing our service rise.

Solve consumers’ problems and provide excellent value at a reasonable (but profitable) cost. Give them a reason to turn off the stove and get in the car. Let’s see where that gets us.

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