A Discussion on Six Building Blocks of Customer Centricity

Customer centricity has been a hot topic for discussions in books, business reviews, articles and forums for years, especially for latest 5 years. Customer centric initiatives have been embraced by a number of organizations in some industries among which retailer, ICT and service industries are the most outstanding.

In term of marketing, focusing on customer is not a new concept as great deal of marketing books have been written about how businesses should respect their customers and how the customer loyalty would help the profitability of companies. For instance, in a books titled ‘In Search of Excellence: Lessons from America’s Best-Run Companies.’, Thomas Peters and Robert Waterman Jr. proves that “the excellent companies are better listeners” and these companies are tailoring their products and services to meet the customers’ needs and wants. George Day also shares the view point as he supports the “market-driven strategy”. According to Day, “competitive advantages are rapidly eroded in today’s environment, connections to customers are more dynamic and enduring if they are well developed and maintained”. Apparently, customer satisfaction is always the center of all marketing efforts and, thus, customer centricity is the highest level of market driven strategy.

As customer centricity is said to be a must in global competition, this initiatives has been witnessed at major organizations around the world. Best Buy, IBM, Amazon and Citybank are among the best practices of customer centric innovation. However, customer centricity is not a status. It is more likely a process because there are some levels of this innovation. In a book entitled ‘Designing the Customer-Centric Organization: A Guide to Strategy, Structure, and Process’, Jay Galbraith advocates three level of customer centricity: low, medium and high. These three levels reflect how well a company integrates its products, services and processes to service its customers by meeting the ten criteria related to scope/scale and integration. Similarly, Francey Smith, president of Francey Smith & Associates, puts forward four degrees of customer centricity. These are getting started, beyond the basics, customer driven and fully integration. No matter what level the customer centric innovation at a company is, it consists of elements that the company must develop to become customer centric.

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How the US Automakers Are Losing their Home Market

When Nissan recalled more than 2.5 million cars in the US in Oct 2010 after some-hundred-thousand-car recall before, many analysts thought of a an opportunity for the US automakers to regain their home market after a decades of decline in market share. Despite a lot of expectations and suggestion, there is not a remarkable signal from the market which can convince people that the US automakers are regaining what they have lost for decades.

A Predictable Takeover

Ward’s Automotive data shows that combined US market share of GM, Ford and Chrysler has been shrinking for consecutive 16 years, from 72.9% in 1993 to 43.66% in 2009. This shrinkage also means that of Japanese and European automakers has kept increasing during that time. It is very likely that this trend will be continues in 2010 and some years to come and regaining the expected position will be a challenge for the US automakers.

Read more: http://www.bukisa.com/articles/407808_how-the-us-automakers-are-losing-their-home-market#ixzz16nd8Dpel

An Obsession Made in China

After checking e-mail this morning, I ran across an article in a piece of news on Yahoo! about the evasion of China’s agricultural products in Vietnam market. Not so long before, via Facebook, I read a funny article about instantly eatable dried cuttlefish made of rubber and imported from China. It will be nothing to say if a country reliant on service industry like Singapore imports almost everything abroad. However, that will be a big question if a country whose 40% GDP is contributed by agriculture, fishery and processing has to import those things from China.

Some people will explain that because China and Vietnam is too close in many terms, the popularity of China products in Vietnam is too common. However, the problem is not that simple. When the overseas Vietnamese people who live in the United States of America make a trip to visit the home country, they usually bring with them electronic stuffs as gifts for their relatives in Vietnam. Mobile phone and computer are of the best choice. Unfortunately, when their relatives open the gift bought in the US, they found it “made in China”. Doubtlessly, “Made-in-China” is not only a fact of life, it also an obsession around the world.

Read more: http://www.bukisa.com/articles/398263_an-obsession-made-in-china#ixzz15eJ0KqJB

Paid Search Advertising

The popularity of internet made it an essential tool for people to communicate and search for information. Within only four year from 2000 to 2010, the number of internet users worldwide has increase by 444.8% (Internet World Stats, 2010). In addition, searching information is always among the top reasons for people to using internet. To take advantage of this trend, many companies in information technology industries have introduce their search engine. Among these companies, Google, Yahoo and Microsoft are the top three players. In order to monetize the search engines, paid search has been a good choice for these companies.

One of the benefits that paid search offers to its customers is providing a shortest way to reach their customers all over the world. Traditional advertising media such as TV or newspapers have limited coverage. Hence, if company need to advertise in many countries, it has to sign contract with many companies in many countries. On contrary, when a paid search advertisement is activated, it can display to target customers everywhere in the world.

Another benefit that paid search offers to its customers is making advertising more selective. For the internet users, because only the advertisements that match the key words are appears they can see only advertisement that more ore less related to what they are looking for. For the companies, by matching the key words this way, their advertisements will show to selected internet users.

Among the benefits that paid search can offer, enabling companies to pay for result is the strongest appeal. Paid search charges companies upon the real traffic to their websites, not the time they appear on the search result. This means companies pay only when their advertisements are seen or read. Meanwhile, other advertising media cannot offer this benefit.

For TV advertising, companies have to pay for the airtime in which their advertisements are broadcast. In this case, the charges are fixed on the length of the advertisement no matter how many people can see the advertisements. For advertising on publications such as newspapers and magazines, the charges are fixed on the size, position of their advertisements and the number of copies no matter how many people read these advertisements. Similarly, advertising by placing banners on web pages (banner placing) charge companies upon the position and the size of the banner no matter how many visitors give them a glance. As such, enabling companies pay for the results is evidently the most competitive advantage of paid search.

The introduction of paid search can be considered a great evolution in the era of internet marketing. Amongst the advantages that paid search has over other advertising media, enabling companies to pay for the results proves to be the most compelling feature that helped the growth of paid search. It is very likely that paid search will continues its expansion to dominate advertising marker in near future.

Reference:

Internet World Stats (2010). World Internet Users and Population Stats. Internet Usage Statistics. Retrieved from http://internetworldstats.com/stats.htm

Learn about AdWords (n.d.). Google AdWords. Retrieved from https://www.google.com

An Analysis on Best Buy's Customer-centric Innovation

In 2004, Best Buy initiated its customer-centric innovation. This initiative quickly became one of the best practices for customer-centric innovation in the market, especially in retail industry.

The key factor leading to Best Buy's customer-centric innovation would be the company's vision that is stated "Making life fun and easy". This vision is supported by values among which "Show respect, humility, and integrity" and "Unleash the power of our people" had the greatest impact on the initiative. To show respect to its customers, the company decided to use the concept of "customer in charge" in 1989. The idea behind this concept was "customer do not want to be sold, they want to buy" and customer-centric approach perfectly fitted this concept. Moreover, in 1989, Best Buy began to put their sales forces on salary instead of paying commission. This change created a need for sustaining the sales force's productivity. As the customer-centric innovation encouraged Best Buy's people to contribute more to the company, it helped Best Buy unleash its people's creativity to serve customers better.

Another reason for Best Buy's customer-centric innovation is that it met the company's demand for sustaining and increasing the company's position in the marketplace. One of Best Buy's weaknesses was its dependence on North America market. The event of Sept 11th 2001 "sapped demand across the industry" and thus "sent Best Buy's stock plunging". In addition, other competitors such as Wal-Mart and Cosco increased their electronics offerings and improved their market. Meanwhile, Best Buy faced pressure from Wall Street to make a 20% annual growth rate. Because of the market saturation, the company had to seek for solution to maximize its revenue and customer-centric approach appeared to be the best choice.

The successes that Best Buy gained during the innovation indicated that customer-centric innovation is one successful approach to Pareto's rule. At Best Buy, customer-centricity bases on careful market segmentation and detailed analysis on buying patterns of each segment. Before implementing the approach, the company had noticed that "31% of customers drive 80% of the company's revenue". Best Buy also pointed out the five different segments those drive the majority of its revenues. These segments were named Barry, Jill, Buzz, Ray and Mr. Storefront. Based on this analysis, Best Buy redesigned its stores and re-allocated its resources to meet the demands of key segments in the location of the stores.

However, customer centricity does not necessarily mean redesigning entire stores to appeal to certain narrow segments. As of its definition, customer centricity refers to "an approach to doing business in which a company focuses on creating a positive consumer experience at the point of sale and post-sale". Therefore, this concept focuses on the key factor that underlies marketing activities: customer satisfaction. Best Buy redesigned their stores to serve its target customers better. However, the critical factor for its success is its improved talent system that helped recognize and reward employees for their unique talent rather than the redesigned stores.

Instead of investing millions dollars in redesigning entire stores, Best Buy could have done differently to be customer-centric. For example, Best Buy could spare some space at each store for technical consulting purpose. If customers are technical people, they will not drop by this space to seek for advice. If one customer needs help with their problems, the technical consultants will show them possible solutions and give recommendations. This technical space would be equipped with models and simulation applications that make the recommended solution visible and understandable to the customers. By doing this, Best Buy could have considerably saved redesigning costs for the whole store while improving customer experience.

Customer centricity is an innovative approach to marketing. It is necessary for businesses to create competitive advantage over their competitors. Because it is market-driven, the approach itself is not too risky. However, the way Best Buy implemented this approach in reality may show certain risks. Specifically, redesigning its stores to appeal to certain narrow market segments may put the company at some risks as follows:

The company may lose customers for its competitors when the demographic description of an area changes. Because each store is designed to appeal to the certain segments in the area, if these segments get smaller while others get bigger, the store will lose customers.

Huge amount of money may be spent for redesigning to catch up with demographic change to attract the profitable segments. Unless the company is willing to give up a number of customers to its competitors, it will have to spent lots of money updating the store design to fit the new demographic description of the area.

As demographic description is subject to change, Best Buy's customer-centric approach may cause some possible problems. First, this approach may lead to the inflexibility in staff allocation. For example, the customer assistants at a store designed for Jill and Buzz will focus on their Jills and Buzzes rather than other customers. In certain cases or on certain occasions, the increase in number of other customers such as Barry, Ray or small business will cause the temporary personnel shortage.

Second, the problem would be the low customer satisfaction. Because of the customer-centric approach, each store gives much focus on predetermined customers and hence low satisfaction is very likely to happen. At the present, CustomerServiceScoreBoard.com ranks Best Buy's customer service 133 out of 315 companies. This rank is remarked "disappointing" because there are much more complaints than positive feedbacks. Unless Best Buy quickly takes appropriately corrective action to improve the implementation of its strategy, this practice will result in other impacts on the company's operations.

In an article titled "Customer-centric Markets Are a Must", C.D. Hobbs wrote, "Customer-centricity is a philosophy that can guide a company to success". Best Buy has been the outstanding practitioner who put this philosophy into actions to sustain and increase the company's position in the retail market. Even though the efforts has paid off and the company has tended to expand this innovation to all the store system, Best Buy's approach to this philosophy has shown some risks and problems that the needs corrective actions of the company to improve the effectiveness of implementation.

Reference:

Best Buy - Customer Ratings and Comments (n.d.). In Customer Service Score Board. Retrieved from http://www.CustomerServiceScoreboard.com

Boyle, M. (2006). Best Buy's Giant Gamble. Fortune. Retrieved from http://money.cnn.com

Customer-centric (n.d.). In Business Dictionary. Retrieved from http://www.businessdictionary.com/definition/customer-centric.html

Datamonitor (2008). Best Buy Co, Inc. Retrieved from Retrieved from Business Source Premier database.

Fair Isaac Corporation (2009). Best Buy Plugs into the Power of Customer Centricity. Retrieved from http://www.fico.com

Hobbs, C. D. (2002). Customer-centric Markets Are a Must. Power Economics, Vol. 6 Issue 6, p. 12. Retrieved from Business Source Premier database

Smith, S. (2004). Best Buy Gives Details on 'Customer Centricity'. TWICE. Retrieved from http://www.twice.com

Stopper, B. (2006). Best Buy: Customer-centric innovation. HR. Human Resource Planning, Vol. 29, Issue 3, pp. 34-37

Solutions for Ethical Problems in Business

My research on articles about business ethics has a profound influence on finding solution for ethic problems in future from the perspective of both ethics/compliance management and ethical behavior/action in an organization.

First, from the perspective of ethics/compliance management, I think that the number one factor to endorse the effectiveness of ethics/compliance policy is the fair treatment in the company. The fair treatment must root in all the area of management. Companies need to make sure that they have compensation and reward systems that guarantee all employees are fairly recognized and rewarded for their contribution to the growth of the company. For example, salary must base on job description; bonus must base on quality of work done and the employee's creativity; total compensation must be at least up-to-date for an employee to cover basic living expenses. No matters what people may say during the recruitment process, basically, they all work to earn money and recognition. Because "employees" perception of fair treatment emerged as a powerful factor linked to the success of an ethics/compliance program", failing to guarantee the fairness in compensation and reward systems will inevitably fail all ethics/compliance policy.

Second, an effective ethics/compliance policy must focus on the areas where the laws have not yet regulate and on the potential breaking points where ethical problem can become legal problems. In the modern life, it is very easy for a person or an organization determines what is legally acceptable and what is not. However, determining what is ethically acceptable, and what is not, is much more complicated. In an ethics situation, we often have to consider many variables some of which are opposite to the others. In addition, we all tend to judge the importance of each variable based on our personal values, which may differ from those of other people. As such, a behavior acceptable to us may not be acceptable to other people. Consequentially, ethics dilemmas are very common in the workplace and in the daily life. According to Craciun, "when the law has nothing to say, morality is the only available guide of our actions". Yet, the morality frequently leads to ethical dilemmas. Therefore, an effective ethics/compliance policy must be able to help employees to deal with ethical dilemma. By pointing out the line where an ethics issue will easily become a law issue, the ethics/compliance policy can help minimize the ethics/compliance problems in the company.

Last, an effective ethics/compliance policy must take its root in cohesive teams. This means that the policy needs the endorsement of every single team in the company. In the research on The Role of Cohesion on Group Member Actions, the authors concluded, "Cohesion, by providing motivational impetus to members to facilitate group performance, enables individuals to carry out actions that benefit the group, regardless of their ethicality". This is probably the reason why Plante wrote, "You need to surround yourself with like minded people" in his advice on how to live ethically. This definitely supports the idea that the effectiveness of an ethics/compliance policy will be much higher if it has its root in cohesive teams of the company.

From the personal perspective, this research has provided me with valuable knowledge to deal with ethics issues at work. Thanks to this experience, I have come up with three guidelines to be ethical at work as follows:

- First, look for favorable ethical environment. This guideline bases on the way number three to live ethical suggested by Plante, "You need to surround yourself with like minded people", and the conclusion of Narayanan, Ronson and Pillutla about the way cohesiveness of the group may influence ethical behavior. Seldom do we work alone. Rather, we usually work as a member of a team or organization and the way our teammates and especially of our leaders will have profound influence on our thinking, judgment and behavior. The influence may be supportive or unsupportive to our personal set of values. As such, it is ideal for us to have a favorable ethical environment in which we can have the endorsement for our personal values, ethical behaviors and actions.

- Second, understand the ethical issues. Although it is great to work in a favorable ethical environment that supports our set of values, we are not always that lucky because we cannot understand all about the team or the organization that we are going to serve. Moreover, even if we are working in a good environment, we may also encounter ethical issues that we need to deal with. "There will always be unethical actions and ethical dilemmas in the work place", wrote Ryan Scholz in his research on Ethics in the Work Place. However, it is not easy to understand the ethical issues. According to Sally Bibb, "ethical issues can be difficult to identify in the first place". That is why we need to have resources to understand the issues clearly in order to handle it properly. We can research on the ethics/compliance policy of the company to have an overview on what is the relation between the issues with company's principles. This may help find the guidelines for our decision making process. We can seek for someone we can "use as a sounding board". We need to "Understand the different ‘rationalisations'" that may impair our knowledge about and judgment on the nature of the issues. Once we have a good understanding of the issues, we can figure out where the issues come from, who are involved in, what can guide the situation, how many resolutions are there and when we need to make decision.

- Finally, choose the right resolution for ethical issues. In general, a right resolution for ethical issues must support us to answer "yes" to the question "Would you make the same decision again?" as discussed by Barbara Floria in her discussion. Definitely, after having a good understanding about the issues, we have to decide what to do with the issues. A right solution need to base on a right decision, and we tend to repeat what we think is good. To come up with a right decision, it is advisable that we need to do some checks by answering important questions related to ethical attitude and behavior. Ryan Scholz suggested six questions to ask ourselves to help us make an right ethical decision. Amongst these suggestions, I think the three questions "Would I be happy for this decision to be on the public record?", "What would happen if everybody did this?" and "How would I like it if someone did this to me?" are very critical to help us come up with the best resolution for the ethical issues. Undoubtedly, when we do the right thing, we will more or less expect that it recognizable to the others. We always expect all people others could do what we think is right to us and to the society. Any solution failing to answer any of these three questions satisfactorily will be ethically unacceptable. The concept of "acid test" discussed by Sally Bibb suggested other four questions to check the ethical decision. These four questions look different from the six suggested by Scholz but share the same ideas.

Arthur Andersen (1999). Ethics/compliance management programs and their effect on ethical behaviour. The Canadian Manager, Vol. 24, Issue 4, p. 23. Retrieved from: http://proquest.umi.com.proxy.msbcollege.edu

Bibb, S. (2010). How to be Ethical at Work. Retrieved from: http://www.articlesbase.com

Craciun, D. (2009). Challenges to business ethics. Metalurgia International, Vol. 14, Issue 16, pp. 226 - 236. Retrieved from http://ehis.ebscohost.com

Floria, B. (2005). Everyday ethics: How to do the right thing. Vitality Magazine. Retrieved from: http://www.scu.edu

Jamrog, J. J. (2005). The state-of-the-art in ethics. The Ethical Enterprise: Doing the Right Things in The Right Ways, Today and Tomorrow : A Global Study of Business Ethics 2005-2015. Retrieved from: http://msbcollege.skillport.com

Lowery, C. M. & Beadles, N. A (2009). Differences between work-related ethics and non-work ethics, and the effects of religiosity. Journal of Managerial Issues, Vol. 21, Issue 3, pp. 421 - 435. Retrieved from: http://proquest.umi.com.proxy.msbcollege.edu

Narayanan, J., Ronson, S. & Pillutla M. M. (2006). Groups as enablers of unethical behavior—the role of cohesion on group member actions. In A. E. Tenbrunsel (ed), Ethics in Groups: Research On Managing Groups and Teams, Vol. 8. Retrieved from: http://msbcollege.skillport.com

Plante, T. (2010). Four ways to live more ethically. Psychology Today. Retrieved from: http://www.psychologytoday.com

Scholz, R. (2009). Ethics in the Work Place. Retrieved from: http://www.articlesbase.com

Stanley, T. L. (n.d.). Ethics in Actions. Retrieved from http://ehis.ebscohost.com

A Summary on Corporate Governance and the Impact of Controlling Shareholders

The recent financial scandal at Hollinger Inc. reminded investors to be more cautious with the presence of controlling shareholders. To help investors who is considering investing in companies where controlling shareholders are present, in an article titled "Corporate Governance and the Impact of Controlling Shareholders", published in January 2010, the group of authors including Dirk Schlimm, Lisa Mezzetti and Bernard S. Sharfman have provided investors with analysis on the issues related to the presence of controlling shareholders and criteria to evaluate the independence of the board from the controlling shareholders.

The number one issue of inserting the presence of controlling shareholder into the board of directors is that this controlling shareholder may try to use his or her authority to benefit himself or herself at the expenses of the corporation or other shareholders. There are two forms of private benefits. The first type is pecuniary benefits, including tunneling transactions, corporate perks and theft. The second type is non-pecuniary benefits including the private benefits other than pecuniary benefits. No matter what type of benefits of which the controlling shareholder takes advantage, this practice will harm the value of the corporation and benefits other shareholders.

To avoid the issues concerning a controlling shareholder, it is crucial for a corporation to have an independent board of directors. The value of the independent board is ensured by two elements. Firstly, they help limit the potential agency costs created by the presence of the controlling shareholder. Secondly, they objectively monitor the activities of the controlling shareholder. To insure the independence of the board, it is critical to have a strong legal system which equipped the board with authority to do their jobs well. By monitoring the controlling shareholder's activities, an independent boar will contribute to shareholders' wealth maximization.

The value of an independent board brings about some best practices that have to be counted when evaluating the corporate governance. These practices include the independence of board members in term of both the controlling shareholder and the corporation, the presence of charter amendments which protect directors from being dismissed prior to the expiration of their term except for causes, the independence of the Chairperson of the Board from both the controlling shareholder and the CEO, the exclusion of the controlling shareholder from board nominating, the exclusion of family members of controlling shareholder from the executive management team and the necessity of supermajority voting.

In addition to keeping in mind the best practices, understanding the controlling shareholder will be helpful. In the worst scenario, the controlling shareholder will utilizes every opportunity to enrich himself or herself by imposing his or her will and whim on the corporation. In the best case, the controlling shareholder applies all his or her passion and ambition to make the corporation succeed no matter what. However, in reality, most the controlling shareholders fall somewhere in between these two extremes. Such a controlling shareholder has sense of ownership and to some extension tries to convince the board of his or her ideas. In this case, the directors will have opportunities to provide counsel and influence his or her thinking.

With the understanding of the controlling shareholder, investors will look for board of directors who on one hand are independent from the board of management and the controlling shareholder and on the other hand have the independence of mind. Therefore, to assess the independence of directors, investors are required to know each director's personality and what he or she is made of. Moreover, the independence is effective only if the directors have skills and experience to engage the controlling shareholder to get things done while maintaining their standard.

Even though the best practices are seen in the corporate governance, it will be helpful for investors to watch out for red flags which signal the problems in the dependence of the board of directors. These red flags include but not limited to the pursuit of unconventional strategies, excessive turnover both on the board and in the executive ranks, the resignation outside the regular cycle, unreasonable related-party transactions, the absence of an independent lead director when the controlling shareholder is both Chairperson and CEO of the Board, an unreasonable compensation in the employment contract between the controlling shareholder and the corporation and too much authority for the controlling shareholder when he or she is a CEO.

As summarized above, when there is the presence of controlling shareholder, in addition to monitoring the corporate operations, the directors have to play another role: engaging the controlling shareholder while protecting the values of the corporation and benefits of all other shareholders. To perform this role well, the directors need to be independent from the controlling shareholder in term of finance, emotion and mind and have necessary skills and experience. Even with the best practices, it is recommended for investors to always look out for the red flags.

Reference:

Schlimm, D., Mezzetti, L., & Sharfman, B. (2010, January). Corporate Governance and the Impact of Controlling Shareholders. The Corporate Governance Advisor, 18(1), 1-10. Retrieved July 29, 2010, from ABI/INFORM Complete. (Document ID: 1937926521).

Eric Schmidt - A Legendary Leader Biography

Abstract

Eric Schmidt was born in 1955 in Washington D.C. He got a BS and MS in Electrical Engineering and a Ph.D. in Computer Science.

Before taking the positions of Chairman and CEO at Google in 2001, Eric Schmidt served 14 years at Sun as various technical positions, 5 years at Novell as Chairman and CEO. Schmidt also served on Apple's board from 2006 to 2009.

There are two guidelines that led to Eric Schmidt's successes. The first guideline considers human asset as priceless property. The second one is his desire to be an organization builder.

Throughout his leadership, Eric Schmidt mainly uses the supporting leadership style. Though his strengths such as setting high expectation and self-improvement have made him a successful leader, the inflexibility in using leadership styles and the reliance on individual talent have been his weaknesses.

Brief Analysis of Schmidt’s Background, Training, and Education

Eric Schmidt was born in 1955 in Washington D.C, United States.

From 1965 to 1970, Schmidt and his family lived in Blacksburg, Virginia, where his father was the chairman of the Department of Economics, Virginia Tech and Schmidt grew up surrounded by economists.

In 1972, Schmidt entered Princeton University where he spent entirely four years adjacent to the computer center and earned a B.S in Electrical Engineering.

In 1976, after leaving Princeton, Schmidt moved to North California and entered the University of California, Berkeley, and earned a M.S. in Electrical Engineering.

In 1982, Schmidt received a Ph.D. in Computer Science from the University of California, Berkeley.

Summary of Accomplishments

In 1983, Eric Schmidt was hired as an Engineering Manager at Sun Microsystems. During his 14 years at Sun, Schmidt got a new job almost every 2 years and a half. In 1994, he became the Chief Technical Officer and started working on some projects that led to the Java initiative. However, the thing that he is proud of was not the Java initiative; it was his success in creating a great working environment.

In 1997, Eric Schmidt left Sun for Novell where he served as Chairman and Chief Executive Officer. At that time, Novell was facing the declining fortunes and Schmidt was expected to help the company turn around. By restructuring the organization and leveraging the company's current resources, Schmidt really helped make a turnaround within nine months. In late 1999 and early 2000, Schmidt conducted another reorganization to improve Novell's marketing strategies. However, this reorganization did not help the situation and Novell was merged with Cambridge Technology Partners a year later.

In March 2001, Schmidt was appointed chairman of Google's board of directors. About five months later, he was made the new Chief Executive Officer of this company. In addition to maintaining the innovative culture of Google which made Google the world largest web-search engine, Schmidt helped Google go public successfully in 2004 despite many observers' worry about the viability of the company after the event of IPO. The great partnership between Schmidt and the two founders, Larry Page and Sergey Brin, has helped Google expand to other markets such as mobile OS, mobile search, mobile advertising…

In addition to the most important positions at Google, Schmidt also served on Apple's board of directors from 2006 to 2009. In 2009, because of the pressure from increasing competition between Apple and Google, Eric Schmidt resigned from Apple's board to focus on his job at Google.

Leadership Profile and Style

Valuing human asset is the most important characteristic that we can see in Schmidt's leadership. He always refers to human asset when talking about his successes. At Sun, Schmidt said that the thing he was most proud of was the people that he hired although he was known for his contribution to help make Java become ubiquitous for the internet. He emphasized "But without the people in the high tech industry, you're nothing". In his opinion, his smart people and the good working environment that he established made up success. When Schmidt talked about the story of his success at Novell, he said "I had an asset, it was human asset". For him, the people at Novell, who wanted to win, actually drove the company's success. In an interview in 2008, when Schmidt was asked about the way he managed the innovation at Google, he emphasized that "You have to have a set of necessary conditions for innovation to occur. To start with, you have to listen to people". Apparently, from Schmidt's perspective, human asset is always at the center of the focus.

Schmidt's desire to be an organization builder is also a crucial component of his successful leadership. This philosophy is quite far from his technical background. It actually derives from his appreciation of human asset. It also reflects his desire to lead. During his first job at Sun as an engineering manger, he built his team by from the very beginning. Finally, he could be proud that he had "built certainly one of the greatest collections of people". In 1997, when he left Sun for Novell, he continued his philosophy by restructuring Novell's organization to help it made a turnaround. As a result of this restructuring, thousands of employees were laid off, five executives resigned and an entire marketing team of 60 employees went. At Google, Schmidt's viewpoint is that people will work great as long as they do not undercut each other. This viewpoint is the explanation for his great partnership with the two Google's founders. It also supports the shared leadership model which is now in use at Google.

Definitely, the two characteristics of Eric Schmidt's leadership, as discussed above, reveal that Schmidt has a supporting leadership style. When he was asked about how he controlled the innovation at Google, he answered "The word 'control' is not such a strong word at Google". This answer evidently implies that he does not use the command-and-control style. In an interview with the Washington Post, Schmidt said "Google is run by its culture and not by me". Additionally, one of his recommendations for managing the geeks was "you can tell them what to do, but you can't tell them how to do it". He added "make sure that they're happy and that they have everything they need to do their job". Definitely, Schmidt tends use supporting leadership to help maximize people capability and creativity.

Character Profile

Strengths

Among the leadership attributes, creating high expectation is one of the strengths that brought about Schmidt's success. Even when he had no engineering management experience, he expected that he would be a prefect engineering manager at Sun. Of course, he did better than that and became Chief Technology Officer of the company. In order to get new ideas into his company, his rule was that "you go in this, and you come out in 12 month, and please come out with something interesting". One of his needs was to try something new. This was also the reason why he left Sun for Novell. "There was something big there. So I started working on that", he explained. Obviously, serving as a CEO was more difficult than working as a CTO. Moreover, Novell at that time was facing difficulties but Schmidt was confident that he would make it turn around. With high expectations, Schmidt took a big step to become one of the legendary leaders.

Self-improvement must be one of the strengths having great contributions to Schmidt's leadership. He decided to enter Princeton University because he was interested in a broader perception which he realized that MIT College program could not provide. He pursued a Ph.D. program because he believed that he would need it to get ahead of everyone else. While he worked at Sun, when he recognized that he had been internally focused, he decided to become more external focused. He tried to develop communication skills and influencing skills because I recognized that he had not been good at those skills. For him, thinking about the mistakes helps people become wiser. Additionally, Schmidt also appreciates criticisms because he thinks it helps self-improvement. In a comment on people's criticism about the trust issue of Google services, he said "I think criticism informs us, it makes us better".

Weaknesses

An outstanding weakness of Schmidt is his limited flexibility in using leadership styles. As analyzed above, supporting leadership is the key style that Schmidt has used throughout his leadership positions. Because this style is suitable only for people at the Capable but Cautious Performer stage with high competence and variable commitment, it will not be such ineffective when used to lead people at other stages of leadership development with different levels of competence and commitment. The situation at Novell after Schmidt took his CEO position should be an example. There must have been problems related to Schmidt's leadership when five executives and an entire marking team of 60 peoples resigned. Although Schmidt could have a feeling that he had trustful people after that restructuring, the merger of Novell thereafter showed that his style had not been as successful as expected.

Another weakness would be his reliance on individual innovation. Although he said that the nature of innovation and creativity comes from both "one brilliant guy" and "a team", he believes the small team or little group is much better than big group. He claimed "The productivity of any project is inversely proportional to the size of the project team" and explained "On a large team, the contributions of the best people are always smaller, and overall productivity is always lower". While this is clearly an effective approach to implement small projects and to start an initiative, it may fuel the rise of elitism in the organization and the elitism, in its turn, will harm the cohesiveness of the organization in a global partnership model context.

Evaluation of Schmidt in a Global Partnership Model Context

With all experiences obtained during his leadership, it is clear that Eric Schmidt is effectively using the global partnership model to manage his company. At Google, the bottom-up process of idea generation has been used a long time ago and has become the corporate culture. Eric Schmidt also confirmed that "Google is probably the best example of a network-based organization. Very flat, very non-hierarchical, very much informal in culture and ideas – ideas come from everywhere". Although Schmidt agrees that it is quite unusual, this practice shows that he and his company are now on the way to fit in a global partnership model.

Reference:

Blanchard, K. (2003). Leadership partnering for performance. In Segil, L., Goldsmith, M. & Belasco, J. (Eds), Partnering: The New Face of Leadership. Retrieved from http://msbcollege.skillport.com

BusinessWeek (2008, April 29). How Google Fuels Its Idea Factory. Retrieved from: http://www.businessweek.com

BusinessWeek (2004, May 3). Online Extra: What Eric Schmidt Found at Google. Retrieved from: http://www.businessweek.com

Carlson, N. (2009, May 20). Google CEO Eric Schmidt: "We Don't Really Have A Five-Year Plan" (CLIP). Retrieved from: http://www.businessinsider.com

Eric Schmidt. Newsmakers, Issue 4. Gale Group, 2002. Reproduced in Biography Resource Center. Farmington Hills, Mich.: Gale, 2010. http://galenet.galegroup.com/servlet/BioRC

Mitchell, R. (2007, December 19). How to Manage Geeks. Retrieved from: http://www.fastcompany.com

Morrow, S. D. (2000, January 18). Transcript of a Video History Interview with Eric Schmidt. Retrieved from: http://www.cwhonors.org

Richmond, S. (2010, July 1). The Daily Telegraph. London (UK): Jul 1, 2010. pg. 31

An Analysis on Craigslist's Ongoing Success Story

Craigslist's Ongoing Success Story is about an interview in which CEO Jim Buckmaster of Craigslist.org answers Jessi Hampel's questions about the website craigslist.org. During this interview, Buckmaster emphasizes on the concept that customers guide the business. According to him, businesses should focus on serving customers rather than on maximizing profit because when a business serves its customers well, it will make profit. Take craigslist.com as an example. The design of the website is simple so that its users can post their advertisements easily. Because the users do not want to see other features, craigslist.com does not have other features. In words of Buckmaster, "everything you see there today is the result of user feedback". Despite its simplicity, this website has been staying well in top ten most visited websites in the U.S. and remaining profitable since 1999.

In addition to the concept as discussed above, the article also reflects some changes in marketing. In advertising area, internet helped create many forms of advertising. Before the introduction of internet advertising, we had advertisements on publications, radios, TVs, posters or so forth. The introduction of internet advertising brought us other types of advertising such as banner placing, text advertisement, commercial e-mails, commercial clips on media networks … etc.

In the area of distribution, internet marketing helped shorten the distance from sellers to buyers. In the pre-internet era, we could only received the product we wanted only if it were available in the local stores. Thanks to internet, we are now able to place an order directly to the provider and received the product we want within the agreed time no matter where the provider is.

Third, in the area of business ethics, internet requires businesses to take ethical issues more seriously. The introduction of Web 2.0 gave internet users more controls over the contents published over internet. A criticism on a conduct can widespread over the world and destroy a marketing effort within a few minutes. Therefore, the businesses are getting more cautious with their activities to protect their reputation. For instance, on the website craigslist.org, a certain number of flags for an advertisement will remove that advertisement automatically. In words of Buckmaster, "inappropriate ads usually come down within a few minutes".

From my viewpoint, the concept that customers guide the business shows some advantages because it reminds businesses to value their customers. Customers are not only people who pay for products a company produces but also those who vote for or against the company conducts. Moreover, if a company knows how to listen to its customers effectively, it will have its own customers fuel its innovation. For example, when my previous employer lost many public telephone agents for our competitors, we had thought that it was because we paid them low commission. However, when we did a survey to collect the agents' ideas, we found that the main reason for their leave was the problems with our support services. Thanks to these feedbacks, we knew how to maintain our relationship with the agents.

Nonetheless, this concept also reveals some drawbacks because over-powerful customers will cause many problems. In the list of customers will be there some people who work for our competitors but we do know. If our competitors use these "customers" in order to make the chaos, it will be difficult for us to handle the situation. For example, craigslist.com removes a post automatically when the number of flags on it is reached. If a competitor asks they staff to flag hundreds of valid posts, the craigslist.com will face problem. Over-powerful customers may also make a company's strategies more market-driven thus prevent the company from developing market-driving strategies.

The introduction of World Wide Web led to initiative of internet marketing with business websites and commercial emails. Then, the introduction of Web 2.0 give some controls to the internet users and facilitated marketing through social media, social networks, online games, search engines. We are now can access to internet via smart phones and other handheld devices and mobile marketing catches the attention of businesses. Thought TV is still the dominating mean for marketing so far, the strong growth of internet penetration will make internet the dominating marketing mean in near future.

Reference:

Hempel, J. (2007, May 15). Craigslist's Ongoing Success Story. Business Week Online, p. 18. Retrieved from: http://find.galegroup.com/.

Chrysler LLC SWOT Analysis

CHRYSLER SWOT ANALYSIS

Strengths

Reputation for V-8 Hemi engine

Chrysler has been known as the lead of horsepower race since 1951 when the company unveiled its V-8 Firepower engine, also called Hemi engine. Hemi has been recognized as sign of powerful machine for over 50 years. For this reason, Hemi was also Chrysler's profit machine. Though Chrysler announced to limit the use of Hemi for its new products recently, the reputation that Hemi created for Chrysler will be supportive to the company's auto engine initiatives.

Domination of minivan market

Chrysler has been the dominant of minivan market for over 25 years. Although the auto market has shrunk recently and many players have tried to expand their market share, Chrysler and Dodge still hold over 40% share of U.S. minivan market. This position would bring the company advantages over the competitors if the Chrysler gives more focus on this market.

Focus on customer

Chrysler is the first auto company having Chief Customer Officer. Even though customer care was not a strong point of Chrysler before, the company has give more focus on customer care by appoint Douglas Betts to the Chief Customer Officer. This move is a significant improvement in customer services and able to create great competitive advantage.

Weaknesses

Small and declining market share

Despite the dominant position in minivan market, Chrysler's overall market share is still small and declining. In 2009, the company's market share was only 9.2% (The Wall Street Journal, 2010), dropped from 11% of the previous year. Though the company gained a bit improvement in market share by September 2010 (9.5%, The Wall Street Journal, 2010), this is still too small in comparison with other automakers.

Management problems

It is said that the merger with Daimler in 1998 had made Chrysler "a German-inspired mess" before Cerberus Capital Management acquired it in 2007. Additionally, analysts notice that the new owner does not have experience in auto industry and "doesn't want to be in the auto business; it is in the money business". The acquisition by Cerberus is thought to be "the beginning of the end of Chrysler as a recognizable automaking entity altogether".

Quality problems

Chrysler's vehicles usually present in the list of worst vehicles ranked by Consumer Reports and J.D. Power. This will definitely have negative affects on the customer's buying decision.

Opportunities

Partnership with Fiat

The strategic partnership with Fiat would create opportunities for Chrysler. Though minivan and SUV are Chrysler's strong points, Chrysler needs to have smaller car in order to penetrate to South America or Asia market. Whereas, Fiat is well know for its smaller cars. Thus, the partnership with Fiat would be helpful for Chrysler to produce small car for new markets.

Increasing demand for green cars

The green car market is on the rise and forecast to top 3 million by 2015, of which U.S. market will account for 55%. As manufacturing green cars is one of the Chrysler's focuses, this will be a great opportunity for the company to improve its position.

Threats

Disappointed dealers

Under the control of Daimler, the dealer consolidation initiative "had drained their passion for selling cars" because they had to "take more products than they could possibly sell". The new owner has not resolved the problem and this would be a big obstacle for the company's business.

Reliance on U.S. market

Chrysler is known to reliant on U.S. market as more than 90% of its sales comes from North America. Therefore, the company would be very vulnerable with the declining demand and fierce competition in this market.

CHRYSLER'S MARKETING POSITION

Chrysler LLC is known as one of the 30 world largest automakers whose focus is on U.S. market where the company dominates the minivan segment. Chrysler's Hemi has been the symbol of powerful vehicles for over 50 years. Nonetheless, the company has encountered management problems that have disappointed the dealers. In addition, product quality has not been significantly improved and its small market share has kept shrinking. In an effort to improve the situation, Chrysler has chosen Fiat as a strategic partner. Chrysler hoped that this partnership would help the company penetrate to small car market in U.S. and other countries. Moreover, the partnership would also support the company's focus on green cars for those the demand has been on the rise.

As analyzed above, Chrysler has a weak marketing position in the auto market so far. In order to improve the company marketing position, it is recommended that Chrysler should take prompt actions to improve the dealership policies and give more attentions to quality issues. Successfully resolving these problems will help the company handle other issues better and create new competitive advantages.

Reference:

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Flint, J. (2009). GM, Chrysler, Toyota: How They Doin'?. Forbes.com - Magazine Article. Retrieved from http://www.Forbes.com

Helliker, K. (2009). Chrysler's Nagging Quality Issues. The Wall Street Journal. Retrieved from http://online.wsj.com

J.D. Power: Annual U.S. Hybrid Sales Beyond 1 Million by 2015 (2010). Hybrid Cars. Retrieved from http://www.hybridcars.com

Sauer, A. (2010). Chrysler Hemi: Semi-Retired?. Brandchannel. Retried from http://www.brandchannel.com

Strong, M. (2009). Chrysler Celebrates Minivan Dominance with 25th Anniversary Edition Models. The Detroit Bureau. Retrieved from http://www.thedetroitbureau.com

Taylor III, A. (2008). Can Chrysler Survive?. Fortune, 158(3), 110-117. Retrieved from Business Source Premier database.

Wallace, E. (2009). Why Chrysler Failed. Business Week. Retrieved from http://www.BusinessWeek.com

Welch, D. (2007). Could Chrysler Go Bankrupt?. Business Week. Retrieved from http://www.BusinessWeek.com

Welch, D. & Matlack, C. (2009). Fiat Won't Be Chrysler's Savior. Business Week. Retrieved from http://www.BusinessWeek.com

Winter, D. (2005). Chrysler’s Hemi is Profit Machine. Wards Auto. Retrieved from http://www.gminsidenews.com