Friday, January 30, 2009

The BlackBerry Storm: Dark Past, Sunny Future

Since the Blackberry Storm's release, uproar has been made about the glitches, marketing expense, and "lack" of sales at a cool 500,000 units in its first month. In the latest Tech Ticker, Om Malik came out and slammed Research in Motion for "forgetting to play to its strengths" and leaving its traditional key board behind for a touch screen. What most critics forget, including Malik, is the absolute necessity of entering the smart phone marketplace as more and more Gen Y use smart phone technology.

I can imagine some of you scoff, "Ha. Gen Y doesn't use and can't afford iPhones or BlackBerries." Nine months ago, I spoke with a product manager for Nike who told me the newest trend among high school girls was using a BlackBerry to stay in touch with your friends. Do you think the launch of the iPhone changed the concept of "cool" in local high schools from the BlackBerry to the iPhone? Or were the 1.9 million activations of the iPhone in Q4 exclusively of people 30 and up? For that matter, will the smart phone market decrease over the next few years? Please.

The fact of the matter is the smart phone is the next generation of technology embraced by the next generation of white-collar labor in this country. Foolish companies are staying out of the marketplace. Intelligent ones, including Research in Motion, will make the leap into smart phone technology because they recognize the present and future value of mastering this technology. Just because one firm owns 25% of the playground and has first mover advantage doesn't mean no other kids can come to play. It doesn't mean they'll get it right or everything will go perfectly, but Research in Motion is far ahead of Dell or the countless other firms who want to join (or will be forced to join) the smart phone race.

Long ago, Walgreen's used to serve food. At a board meeting, Walgreen's CEO gave them a five-year deadline to totally exit this segment of their business to focus on its less profitable operations. The result? Walgreen's decision to leave its most profitable business to a weaker area earned it a spot in the business management Bible Good to Great because it worked and they succeeded. If Mr. Malik and the critics of Research in Motion ran Walgreen's? Well, I'm sure we'd have to go elsewhere to get our prescriptions filled.

Good job, Research in Motion; I'll probably still buy an iPhone, but I think you're on the right track.

Wednesday, January 28, 2009

Chrysler – the “Keith Richards” of Automakers

Picture Sources: pic 1 and pic 2

I’ve come to realize that Chrysler is essentially the “Keith Richards” of automakers. It once looked good, went platinum with their sales numbers, and had groupies galore. However, that was 30 years ago. After 30 years of sex (expanding the family to include Jeep), Drugs (gas guzzling), and rock and roll (blowing money they don’t have), everyone is left scratching their heads wondering just how they haven’t kicked the bucket yet.

Like Richards, Chrysler has not aged gracefully. Its years of addiction to gas guzzling are finally catching up. However, there is one distinct difference that sets the two apart – groupies. Richards has them, Chrysler does not. That is the determining factor between the polarities of their success. Richards may be hideous, but the fan base is still there. Chrysler’s started abandoning them years ago.

Chrysler has always targeted their vehicles at Gen-X and the Baby Boomers – people familiar with the brand before it started becoming yet another Hollywood rehab story. When Echo Boomers started demanding vehicles that not only looked good, but were “green,” had a high MPG average, and were reliable, Chrysler ignored them. By ignoring an entire generation, Chrysler effectively blew their amp in front of a concert of 60M angry fans.

The only car in Chrysler’s lineup that even marginally targets Gen-Y is the Chrysler 300. From their subsidiaries, they’ve got the Jeep Wrangler which has always had a cult following, and maybe the Dodge Charger. Chrysler’s Hybrid SUV, the Aspen, is $10K more and only does 2 MPG better than the non-hybrid model.

Chrysler has effectively severed its relationship with Gen-Y. They simply cannot neglect their groupies and expect all to be forgiven now that they’re broke and have theoretically gone to rehab ($4B from TARP and a proposed partnership with Fiat) to get better.

Expecting to fully recover from their current financial troubles without groupies is about as ludicrous as Richards going back on tour only to play covers of Britney Spears hits.

Josh Groth

Tuesday, January 27, 2009

An Open Letter to President Obama from the Future Unemployed Gen-Y

President Obama:

Since you're technologically savvy and probably have a Google alert on your name (I do), I know you're reading our blog (or at least the FBI/CIA/NSA/CTU are).  Maybe you're on your BlackBerry during halftime of an intense three-on-three game with your Cabinet.  How's Reggie Love playing today?  Oh; I hear Hillary throws some crazy elbows.  On a side note; she still hasn't forgiven you for beating her in the primaries.

Mr. President, I'm very excited because I have a huge pool of talent available to you.  No, we don't have much skill in road construction.  However, we are some of the top talent from universities across the country.  When we graduate we probably won't be employed, and six months from the time we cross the stage we're going to start paying off an average of $19,200 of student loans (based off 2004 numbers; with a 3% increase each year, I'm sure the number has gone up).  We're looking for opportunities to apply ourselves, and we have a few financial deadlines that are coming up quick.  We promise we work hard, have great ideas, and believe we can change the world.

You ran a campaign based off change, hope, and belief in our ability to make a difference.  We supported you at your primaries, Facebook clubs, rallies, and most importantly, election day.  We believed our voice could make a difference.  Now we ask that you let us be the change you described.  Don't just create jobs fixing infrastructure and building bridges; we can do so much more.  Create ways for us to tackle the world's most complicated problems.  Create ways for us to help the poor, solve global warming, increase volunteerism, and change people's daily lives for the better.  Create ways for us to be the change we wish to see in the world.

Heck, we'd probably do it for almost free (loans need to get paid somehow).

Saturday, January 24, 2009

E-Slapping Blockbuster: 5 Reasons why they are failing...miserably

Two weeks ago, Netflix and LG unveiled their recent HD love child – a new TV that can stream HD quality content from Netflix without a set-top box. There will be no need for a bulky box that sits among the orgy of DVRs, DVD players, VHS players (God forbid) and stacks of unorganized DVDs that are waiting to be scratched to the point of being unreadable. There will simply be a TV and an Ethernet jack – simplicity worthy of an Absolut Vodka ad brandishing their token slogan “In an Absolut World.”

It is this sort of ingenuity that has thrust Netflix to the forefront of the DVD rental business. In 12 short years, Netflix has grown its customer base to 8.2M subscribers and leads all online retailers in customer satisfaction. This innovative drive towards excellence begs one question: “Why is Blockbuster failing...miserably?”

Below, is a closer look at Blockbuster’s 5 biggest foul-ups.
  • Ignorant complacency – Winston Churchill once said “However beautiful the strategy, you should occasionally look at the results.” Blockbuster should have paid attention in history class. While a solid brick and mortar (B&M) strategy carried them through the nineties, it was a strategy that did not leave them flexible to react effectively to changes in the marketplace.
  • Blatant disregard to Gen-Y – Advancements in content delivery equate to higher efficiencies for consumers. If Echo Boomers are enamored with streamlining their lives, then a business needs to be responsive and work to fulfill those wants/needs in order to be successful. Trying to force-feed Echo Boomers a B&M solution to their media needs just won’t cut it.
  • Poor customer satisfaction - Blockbuster is to late fees what Bono is to crazy sunglasses. No matter what else the biz/person may do that is positive, all the consumer can focus on is those darn sunglasses.
  • One foot in – One foot out - Kudos to Blockbuster for FINALLY attempting to take on Netflix a couple years back with their Total-Access program. The only problem is - there’s a greater probability of getting drunk off O’Doul’s than Total-Access actually posing a threat to Netlix. The reasoning: Blockbuster is still trying to dominate the B&M biz while trying to launch a movies-by-mail biz model simultaneously, effectively neglecting both children - someone should contact child welfare services.
  • Reactive business Environment - It took them 9 years to develop an internet-based DVD subscription service to compete with Netflix! Need I say more?
As the internet axiom goes with debunked ideas...“kill it with fire.” Blockbuster has been heading down the wrong path for quite some time, and it won’t be too long before they’ll be keeping Circuit City company.

Our Mission Statement

The worsening financial and economic crisis affects all our lives. It has caused our civic leaders, clergy, and media to analyze and critique our decisions, habits, and lifestyles. In the midst of all this, what has become unequivocally clear, is that most coverage and analysis of the crisis fails to address the impact on the Echo Boomer generation.

We do not see this as a problem - but as an opportunity. Business and economic trends do not affect Echo Boomers the same way as the generations that precede us. Our opinions and perspectives matter, especially since the Echo Boom generation is three times the size of Gen-X. As Baby Boomers are preparing to retire, we are preparing to fill their roles in every part of society. Echo Boomers are just stepping onto the stage, and it'd be a good time to listen to the next presenter.

As Echo Boomers and recent graduates of an undergraduate honors business program, we created this blog to offer our opinions on the effects of business and economic developments on our generation. Our hope is the voice of our generation will be heard as we begin to take our place as the dominant generation of society.