Strategy Journal 4

Company: Awful Waffle
Several months ago, a young couple with "love for all things Belgium" opened a small waffle shop at the southeast edge of BYU campus.
Strategy   Their mission is to provide authentic Belgium style waffles and crepes with fresh ingredients to BYU students and local residents at a low price. Also, the young couple want to create a friendly and vigorous environment by passing their passion for European desserts to customers.
Structure  The structure of this little shop is quiet simple. After the young couple started this business, their hire one or two BYU students to make the food and take care the daily business.
System     Awful waffle has a very flat system. It is more like a family business, the young couple are the managers of the restaurant and the student they hire take care of daily business.
Style         The style or the culture of this restaurant is friendly and laid-back. The young couple like to chat with their customers when they are preparing food.

Until now, all those components of 7-S model shows a fairly good alignment with the company's strategy. The atmosphere in the little shop is friendly, and the simple structure and few employees keep the cost down so that the shop is able to provide food at a low price.

Staff&Skills         Even though the young couple say they brought the most authentic gourmet waffle recipes from Belgium, their food is not as great as they claimed... The waffle taste plain, and it lacks the most important texture of waffle--the crispness outside and soft gooey inside. The young couple's background knowledge seems solid but their cooking skills seems poor.
Shared Value       The value of the shop is offer a friendly environment and gourmet food, which the owners have only achieved half of their goals. If they want to attract more customers and retain old ones, they need to work harder on their cooking skills and keep improving their recipe.

Strategy Journal 3

I read an article recently talking about a new business model called "collaborative consumption", which is based on an old idea: sharing. Since 2008, a growing number of Bay Area internet start-up companies have entered into this business. People are allowed to share a variety of things on those companies' websites, from physical goods like cars to services like babysitting, with the companies taking a cut of any transaction fees. This article reminds me of the Five-Force model we discussed in class. For this industry, the supplier and consumers are the same -- people offer goods and services to share or exchange with others, the company just plays the role to gather them together and provide some sort of safety terms to protect its users. Since the companies just provide technology that allows people to share, and the start-ups typically don't have to deal with the costs of the physical goods or the labor expenses of providing the services, the entrance barrier of this industry is low. And due to the low barrier, the rivalry between competitors is pretty severe. The leader of this industry, Airbnb Inc., tells us how it stands out among others. Because people share instead of trading belongings, there is a high chance that their belongings will be damaged by the borrowers. And this is the controversy that many companies are facing. Thus, who can provide its users the security of their goods becomes the winner. Airbnb has a well-developed "trust and safety features" that protect its users.

Strategy Journal 2

Last week, Netflix decided to split itself into two parts: a DVD by-mail service and a movie-streaming service. This strategy, according to Mr. Hastings, was mainly based on the company's fear that it might be too slow in the transition from physical media to digital media and and suffer the fate of the recently bankrupted Borders bookstore chain.

In July, Netflix changed its pricing structure so that its by-mail and online offerings were essentially sold separately, each starting at $8 a month. Previously customers paid less for the combination ($10) than the offerings cost separately. This has caused anger among many long-time Netfilx fans who felt betrayed. Meanwhile, Netfilx's stock price plummeted by 19% in two days.

According to the Generic Strategy Model we learned in class, one can assume Netflix's intention to narrow its business scope by separating its two main services. But why such a sudden drastic move which cost them millions of long term subscribers? My guess is that they are experiencing foreseeable financial difficulties at the current price level.

Strategy journal 1

I read an article on WSJ yesterday titled "PepsiCo Shakes Up Management" and found this is very interesting and related to the concepts we have learned in Strategy class.
The article says that Albert Carey, the head of PepsiCo's more profitable snack unit will take the reins of PepsiCo Americas Beverage unit. Meanwhile, the two former co-executives of Americas Beverage unit, one resigned and the other got demoted. From the article, Pepsi-Cola slipped to No. 3 in U.S. volume behind Diet Coke and longtime leader Coke last year for the first time. And there are lots of criticism about PepsiCo's poor management on its beverage unit. Assigning Carey as the new executive of beverage unit shows PepsiCo's main business focus and its determination to regain market share. In addition, PepsiCo is going to launch its first Pepsi-Cola ad campaign in the U.S. in three years this June. It also invested $60 million to sponsor "The X Factor,'' a new music-talent competition airing on U.S. television this fall, and recently renewed its sponsorship deal with the National Football League. According to the value chain worksheet we discussed in class, PepsiCo is focusing on changing management and marketing strategy to claw back its market share and increase its profit margin.