business news in context, analysis with attitude

Published on: October 24, 2011

by Kevin Coupe

I was surfing the web the other day and found the following sentiment from Seth Godin, marketing entrepreneur and author, that I thought succinctly summed up the difference between management and leadership. I’m paraphrasing and condensing here, but essentially what he wrote is:

Managers get people to do what they did yesterday. (Maybe faster. Maybe cheaper. Maybe.)

Leaders push the enterprise forward. (And they know they need a team to do so.)

We need both. (We also need to know the difference.)

I thought that was well-said. Eye-Opening. And worth sharing.

Published on: October 24, 2011

There is a terrific, 7,000+ word story in the November issue of Fast Company that looks at what it says is the coming and inevitable battle between four technological behemoths - Amazon, Apple, Facebook and Google. It would be a mistake to try to summarize it here; rather, here are some excerpts that hopefully will tease you into reading. (A link to the full story is below.)

• “To state this as clearly as possible: The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust.”

• “There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today ... Amazon, Apple, Facebook, and Google don't recognize any borders; they feel no qualms about marching beyond the walls of tech into retailing, advertising, publishing, movies, TV, communications, and even finance. Across the economy, these four companies are increasingly setting the agenda. Bezos, Jobs, Zuckerberg, and Page look at the business world and justifiably imagine all of it funneling through their servers. Why not go for everything? And in their competition, each combatant is getting stronger, separating the quartet further from the rest of the pack.”

• “It is certainly possible to decode the Fab Four's big-picture strategic ambitions: Over the next few years, each will infiltrate, digitize, and revolutionize every corner of your life, taking a slice out of each transaction that results. This is a vision shared by all four, and it hinges on three interrelated ideas.

First, each company has embraced what Jobs has branded the ‘post-PC world’ - a vision of daily life that is enabled by, and comes to depend on, smartphones, tablets, and other small, mobile, easy-to-use computers. Each of these companies has already benefited more than others from this proliferation of mobile, a shift that underlies their extraordinary gains in revenue, cash reserves, and market cap ... The second idea is a function of the fact that these post-PC devices encourage and facilitate consumption, in just about every form. So each of these giants will deepen their efforts to serve up media--books, music, movies, TV shows, games, and anything else that might brighten your lonely hours (they're also socializing everything, so you can enjoy it with friends or meet new ones). But it's not just digital media; they will also make the consumption of everything easier. The new $79 Kindle, for example, isn't just a better reading device; it integrates Amazon's local-offers product. The Fire will be accompanied by a tablet-friendly redesign of Amazon.com that will make it easier for you to buy the physical goods that the company sells, from pet food to lawn mowers. Wherever and whenever you are online, they want to be there to assist you in your transaction.

“All of our activity on these devices produces a wealth of data, which leads to the third big idea underpinning their vision. Data is like mother's milk for Amazon, Apple, Facebook, and Google. Data not only fuels new and better advertising systems (which Google and Facebook depend on) but better insights into what you'd like to buy next (which Amazon and Apple want to know). Data also powers new inventions: Google's voice-recognition system, its traffic maps, and its spell-checker are all based on large-scale, anonymous customer tracking. These three ideas feed one another in a continuous (and often virtuous) loop. Post-PC devices are intimately connected to individual users.

“Think of this: You have a family desktop computer, but you probably don't have a family Kindle. E-books are tied to a single Amazon account and can be read by one person at a time. The same for phones and apps. For the Fab Four, this is a beautiful thing because it means that everything done on your phone, tablet, or e-reader can be associated with you. Your likes, dislikes, and preferences feed new products and creative ways to market them to you. Collectively, the Fab Four have all registered credit-card info on a vast cross-section of Americans. They collect payments (Apple through iTunes, Google with Checkout, Amazon with Amazon Payments, Facebook with in-house credits). Both Google and Amazon recently launched Groupon-like daily-deals services, and Facebook is pursuing deals through its check-in service (after publicly retreating from its own offers product).

“It would be a mistake to see their ambitions as simply a grab for territory (and money). These four companies firmly believe that they possess the ability to enhance rather than merely replace our current products and services. They want to apply server power and software code to make every transaction more efficient for you and more profitable for them.”

And finally...

• “Tech companies are ephemeral enterprises, with a built-in obsolescence much like their products. The best firms stay at their peak for a decade tops; most get snuffed out before anyone even notices them. Amazon, Apple, Facebook, and Google have the potential to be exceptions to this rule. Their CEOs are driven, disciplined, and relatively young (Cook, the oldest, will be 51 in November). All but Cook are founders, and their personalities are such that they seem unlikely to get tired or bored by their empire building. Their market caps and strong revenue growth should allow them to neutralize other would-be rivals--witness Bezos acquiring Zappos and Quidisi (Diapers.com) before either could become a threat.

“As our modern oligarchy, and as individual companies, Amazon, Apple, Facebook, and Google will not last forever. But despite this oncoming war, in which attacking one another becomes standard operating practice, their inevitable slide into irrelevancy likely won't be at the hands of one of their fellow rivals. As always, the real future of tech belongs to some smart-ass kid in a Palo Alto garage.”

The full story can be found by clicking here.

Published on: October 24, 2011

The Chicago Sun Times reports that First Lady Michelle Obama will travel to Chicago tomorrow as part of her nationwide effort to promote healthy eating and fight childhood obesity. Included in her itinerary will be a meeting with a number of urban mayors dealing with urban food policy issues and looking to solve the problem of “food deserts,” as well visits to a South Side Walgreens that has “aisles of grocery items,”and the seven-acre Iron Street Farm that is in the city limits. The First Lady reportedly is looking to celebrate companies that have committed themselves to buying local, selling healthier foods, and finding appropriate public policy approaches to address nutrition and obesity issues.

Published on: October 24, 2011

The Los Angeles Times reports that has a number of fast food chains and fast-casual restaurants invest in new, expanded and diversified menus, they also are working to be more transparent about ingredients and preparation.

Indeed, “many (are) going well beyond legally mandated calorie counts,” the story says. “They are updating their signs and menus for diet-conscious customers, and they also are highlighting potential problems for those with food allergies or other dietary restrictions.

“Although responding to demand, quick-service restaurants also see that providing the additional information can help them stand out in the highly competitive marketplace.”

Published on: October 24, 2011

• Advertising Age reports that Walmart CMO Stephen Quinn last week unveiled what he called a ‘Retail Development Kit” that he said is “aimed at attracting more spending and participation from the small army of suppliers” that works with the company.

According to the piece, Quinn’s speech to the Association of National Advertisers reflected a “somber view of how the recession has permanently changed consumers -- and Walmart's marketing approach.”

"Just as we see our customer through a new lens, I'd like to invite all of you to view Walmart through a new lens as well," Quinn said. "We see Walmart as an experience platform to grow your business, a platform that can reach almost 200 million customers a week."

Quinn said that the Retail Development Kit offers “a wheel of options that include in-store marketing events, point-of-purchase displays, Walmart ‘Smart Network’ in-store TV, circulars, ads on Walmart.com and cinema ads among other things. ‘This will be your toolkit to use Walmart as your platform to build multi-channel experiences and engage your customers’ using ‘paid, owned, earned and shared media,’ he said.

“‘At the end of the day,’ he said, ‘we're all in this together’.”

• Ad Age writes that not all advertisers were swayed by Quinn’s presentation. "Have you talked to your commercial people lately?” one supplier asked, rhetorically. “They're kicking the crap out of us," referring to the hard line the retailer is taking in negotiations.

The Associated Press reports that Walmart has “announced a new holiday price-matching strategy that aims to pull in procrastinators early by giving them a big incentive: a guarantee they’ll get the lowest prices no matter when they buy during the season ... Shoppers who buy a product - whether on its website or in its stores - from Nov. 1 to Dec. 25 but then find the identical item for less at a rival later will receive a gift card for the price difference. To qualify, shoppers need to bring in the original Wal-Mart receipt and the local competitor’s print ad. Gift cards will not be given out after Dec. 25.”

The story continues: “Heading into the holiday season, a growing number of stores, including Staples Inc. and Bed Bath & Beyond Inc., are even matching prices with online-only merchants like Amazon.com to convert browsers into buyers. Wal-Mart’s price matching for the holidays still excludes Internet retailers, but clearly the latest announcement underscores the discounter’s need to hammer its low-price message even more in a bid to bring back customers it had lost.”

Published on: October 24, 2011

The Washington Post reports that the USA Food and Drug Administration (FDA) “admits it is simply not up to the task of ensuring the safety of food imports, which are entering this country in ever-growing numbers. The FDA expects 24 million shipments of FDA-regulated goods to pass through the nation’s ports of entry this year, up from 6 million a decade ago.

“During that time, the number of FDA investigators stayed constant at about 1,350. The agency began adding investigators in 2009 and now has about 1,800 — still far short of the number required to keep up with the pace of imports.

“In 2010, FDA inspectors physically examined 2.1 percent of all food-related imports.

The FDA expects only 1.6 percent of all food imports to be examined this year and even less — only 1.5 percent — next year, according to its Office of Regulatory Affairs.”

The Post notes that while the nation’s food safety apparatus has seen its funding increase in recent years, the money and technology may not be up to the challenge of current and future food import levels ... and getting more resources in a time of cutbacks and concerns about recession is problematic at best.

Published on: October 24, 2011

• Now that the sale of bankrupt Andronico’s to Renwood Opportunities Fund for $16 million has been completed, the Daily Californian writes, it seems likely that one or more of Andronico’s six remaining stores could be closed - and the one that seems most vulnerable at the moment is the one on University Avenue on Berkeley.

The fund is described as a multimillion dollar investment fund headed by Renovo Capital and Rosewood Private Investments, focusing on “distressed middle market companies.”

• Safeway-owned Blackhawk Network, which sells prepaid and financial payments products for consumers and businesses, announced the acquisition of Cardpool, the fast-growing gift card exchange company where consumers can buy, sell and trade gift cards. Terms of the deal were not disclosed.
• Advertising Age has a piece about a speech given by Dana Anderson, Kraft's SVP-Marketing Strategy and Communications, to the Association of National Advertisers convention in Phoenix, in which she laid out “a new risk-taking philosophy that embraces change in big bold strokes, rather than shorter incremental moves.”

According to the story, “At Kraft, risk-taking has even meant unlimited budgets for big ideas in an initiative called ‘blank checks’ led by Sanjay Khosla, Kraft's exec VP of developing markets. ‘Your constraints should not be your budget but your imagination,’ Ms. Anderson said. ‘If you have an idea and you can't afford it, you come to him, he gives you the blank check, you fill in the number.’

"’He's given away 13, and 12 of the 13 times people have met his goals,’ she said. ‘He says they are more careful with his money than they are with his own, and one guy even brought back change’.”

• Crain’s Chicago Business reports that McDonald’s plans some additions and alterations to its menu as it looks to expand its share of the American stomach, “taking its Chicken McBites national early next year, the biggest change to its 2012 food and marketing calendar.”

According to the story, the fast feeder “will feature the mini-fried chicken pieces as a limited-time promotion in early spring ... Other items to be rotated onto its menu include a 100% fruit-juice slush called a Cherry Berry Chiller and a blueberry banana nut oatmeal later in the spring.

“The company also will add flavors to existing products, such as its premium chicken sandwich and coffees and hot chocolate.”

• The U.S. Food and Drug Administration has issued new guidance that advises health care professionals not to use needle-free clinical devices to administer influenza vaccinations. Based on this advice, Kroger said it was immediately discontinuing use of such clinical devices at all pharmacies and The Little Clinic locations.

• Dow Jones reports that gum manufacturers are trying to build sales by selling smaller packs at lower prices.

According to the story, “Kraft Foods Inc. is selling five-stick packs of Trident and Stride gum in the U.S. for 50 cents each, offering a more affordable size to appeal to customers who were balking at the higher-priced packs. Gum titan Wm. Wrigley Jr. Co. plans to offer smaller and cheaper packs of gum starting next year, according to Denise Young, Wrigley's director of corporate affairs in North America. Wrigley is owned by privately held Mars Inc.

“Kraft and Wrigley hope the smaller sizes will be cheap enough to land in the purses and pockets of consumers, especially teenagers, a group that has turned its back on more expensive, packs of gum. Packs of Trident, with 18 pieces, and Stride, with 14, sell for suggested prices of $1.29, a level that Kraft Chief Executive Irene Rosenfeld has was too much for teens to cover with pocket change.”

Published on: October 24, 2011

• Internet Retailer reports that “Point Inside Inc. has introduced a mobile app that displays a supermarket’s interior layout and pinpoints where specific products are located within the aisles.

“The technology, which relies on a retailer supplying daily inventory amounts and the store layout to Point Inside, will get its first large-scale use when Meijer Inc. ... expands what has been a five-store test to all of its 200 stores over the next couple of months.”

Not only does the app help consumers navigate the store, but it also helps the retailer understand shopping behavior: “Retailers can also monitor how many shoppers are in a store and using the app, and gauge how much time the shoppers spend in the store and in specific aisles,” as well as “reveal which items are garnering the most attention.”

Published on: October 24, 2011

Responding to my piece on Friday about a moribund Microsoft store just a few doors down from a packed and vibrant Apple Store, MNB user Jarrett Paschel wrote:

I’ve been by the Microsoft store several times (including shortly after it opened) and it has never been very crowded. The challenges are two-fold.

First, Microsoft is not a really brand in the sense that Target, Apple, Trader Joe’s or Wegmans are. Nobody’s face lights up when you mention the word Microsoft. It’s sorta the Bank of America of the computer industry. Lacking that, the store is simply a retail space with a random amalgamation of products, many of which are neither best in class or aggressively priced. All of the notebooks I saw were cheaper on Amazon, and most were a generation behind.

The one interesting thing I did notice was that people were waiting to play with the Xbox Kinect, arguably their most successful consumer product. At the end of the day it’s the stuff—and not the brand—that really matters. Don’t believe me? Try to find someone with an Apple TV.

That’s easy. I just look in the mirror.

I own two Apple TV systems.

But I recognize that I am something of an outlier on this one.

MNB user Christopher Gibbons wrote:

I saw the exact same thing you described two months ago. I live in the Minneapolis area and my nephew and his father visited back in August of his year. As this was their first time here, I of course took them to the Mall of America. In our travels at the Mall, we came upon the Microsoft Store, something none of us knew even existed. It looked shiny and new, but somehow phony or fake. Kind of like the Stepford Wives or something out of Invasion of the Body Snatchers. And what store do you suppose was literally right across the aisle from them, not more than 15 feet from door to door? You guessed it, the Apple Store. And just as in your photos, the Microsoft Store was virtually empty (other than lots of staff waiting for someone to serve) and the Apple Store was busy with customers. It was an interesting if somewhat surreal sight: the two stores, almost mirror images, facing each other. The one store appearing to be trying oh so hard to capture whatever magic the other had found. Without much success, it appeared...





On another subject, one MNB user wrote:

It’s interesting that a discussion about the word “compassion” appeared on the same page as your description of your VEAL dinner.  Do you know how much veal calves suffer?  Do you know how the industry makes sure their meat is white instead of pink?

Point taken.

For the record, I may have eaten veal twice in the last 20 years. (That would be twice more than Mrs. Content Guy.) Last week, when I ate it, I was in a restaurant where there were no choices and no substitutions - the menu was the menu was the menu. Maybe if I were truly principled guy I would have have skipped that course, but it isn;t like they went out and slaughtered a calf just for me. The veal already was in the place and just required cooking ... it would have been a waste not to eat it.

Is this a rationalization? Sure? Are you philosophically correct? Absolutely. Was the veal delicious? You betcha.

Is this an ongoing conundrum? Not really. I’m guessing that I probably won’t be in this position again for another decade or so.




Regarding Whole Foods not taking checks in many of its locations anymore, one MNB user wrote:

Retailers typically pay for the bank to clear checks on a per check basis too.  Slower checkouts and then you also have the bounced checks to contend with.

The only thing retailers would love is cash money, then no clearing or swipe fees to contend with. Cash Only stores could reduce costs about 2% vs. "full service" operator and get that advantage.

There are some many and varied charges on your monthly credit card remittance statement, you literally have to take it on faith that it is correct.  There is really no way to try to reconcile the charges and remittances into your retail account.  Gold Cards, Rewards Cards, Platinum Cards each have a different discount rate usually.  The higher the "reward" for the consumer, the lower the remittance rate back to the retailer.  So the retailer is subsidizing the card company's so-called rewards.

MNB user Tom Kroupa chimed in:

You do know that the UK is banning check writing in a few years. It will save the banks processing fees. It will also prevent the proliferation of fraudulent checks of which I was a victim a few years ago. But I understand it may be inconvenient for some people. I am amazed to see individuals writing checks at the grocery checkout counters when a swipe card is faster, easier and (for now) does not cost any more than writing a check.




Walmart announced it is cutting back on health care coverage for its employees, with one part of it being that smokers will be charged more for their premiums - a piece of the policy that I completely endorse.

One MNB user responded:

As a former smoker for well over a decade, I wholeheartedly agree with your comment that smokers should pay higher healthcare premiums.  It is a (long term) suicidal practice and most smokers know full well that they are putting their long term health at risk.  Most of them will readily admit so when asked and many will also profess a want to quit!

I tried to quit at least 6 or 7 times over the years, the most successful span lasting a little over two months before some major life impacting event (that I don't even remember!) got me to relapse.  Lo and behold, it was actually my employers actions that got me to finally quit once and for all.  First, they banned it from the campus (oh, the gnashing of teeth!) so it became inconvenient to hike off the grounds to light up.  To this day, I can't help but chuckle at the hard core tobacco users standing on the sidewalk at the edge of our property when I drive by.  Two years later, they announced a program that offered lower premiums for non-smokers and presented a cessation program.  Again, met with a healthy level of outrage from the impacted few.

Though many called this an infringement on their personal freedoms and still do, for me it was the right incentive at the right time.  I'll have been tobacco free 3 years next March and I've never felt better than I do today.  I know it was my will to make it work, but I fully recognize that my employer's policies helped me make my life changing decision.

MNB user Larry Lyons wrote:

I do not smoke, have never smoked, but am torn as to my OWN opinion as to how smokers should be charged for their insurance premiums.

While I agree the statistics prove they consume more health care dollars and should be charged accordingly…no different than a poor driver…it is a slippery slope. A poor driver has accidents or speeding tickets, which are documented, thus proving they are higher risk.

How do you prove a person is smoking if they simply SAY they aren’t at work?

Do you pull their Facebook to check up on them?

Do you administer blood tests to check their nicotine levels?

No? Then why would a person admit they smoke?

Do we begin charging folks who are obese more? Their health care costs are surely more than a slimmer person? What about a person who is simply overweight? A sliding scale perhaps? Monthly weigh-ins to set your premiums?

It all comes back to costs. This country has to address the insanely high, unsustainable costs of our byzantine health care system.

When health care becomes so expensive people cannot even afford the insurance when medical outlays place the government itself on the brink of insolvency…something has to change…radically.

Charging smokers more for their insurance may seem “fair” to us non-smokers, but it will not fix the issue. Not even close!

Another reader offered:

As you know, life style choices make a huge difference in health care costs. The brutal truth is that our food choices (our bad food choices) have a big impact on overall health especially heart disease, diabetes and strokes. If employers are going to go after tobacco users then the next logical step is to go after those who make bad food choices and become obese. While this would be viewed as discrimination somehow we don’t have the same discrimination view toward tobacco users. I personally don’t like paying high premiums because of other peoples lack of concern for themselves. There needs to be some financial incentive to stay healthy and maybe high premiums for those who aren’t living healthfully should pay the price and those who are making the effort should be rewarded.

MNB user Charles James wrote:

Overall we agree on most issues however your position on paying more for health insurance because of smoking? …come on. There are a lot of risky behaviors that we all engage in.

Life, after all is  100% fatal. I can see the long term result of your  thinking and it would lead us to having our lives invaded by some bean counter deciding  how to tax us on any number of life style issues and behaviors we exhibit. That’s why insurance is a pooled resource. Anyway where would you stop? Should we tax jay walkers, the overweight, the old ( they get sick a lot) the young (they get sick a lot) and when did we ever want mega-profitable insurance companies deciding how we should live. The perfect world for an insurance company is one where everyone is paying in, nothing ever happens to anyone and they never  pay out…you get my drift.




And finally, responding to some observations made in “OffBeat” on Friday, one MNB user wrote:

I want to thank you for taking my question seriously and elevating it with a review of Top Pot and Voodoo simultaneously.  I know it involved serious personal sacrifice and suffering to eat those four donuts.  I knew I could count on you to take one for the team.  So now my Pacific NW trip will have to include both shops to see if I agree with your assessment.  It’ll be a while until I make the tour, but I’ll be sure to share when I do.

P.S.  I am guessing that by Monday you will get a flood of emails about everyone’s favorite indie donut shop that will start a list like the hamburger favorites.  Should my prediction be correct…please add Paula’s Donuts in Buffalo to the list.  Pumpkin Spice for the holidays is out of this world and the Red Velvet is no joke either.

Published on: October 24, 2011

In the MLB World Series, the St. Louis Cardinals and Texas Rangers are tied at two games apiece in the best-of-seven series, as the Cardinals won 16-7 on Saturday night and the Rangers won last night 4-0.



In Week Seven of National Football League action...

Washington 20
Carolina 33

Seattle 3
Cleveland 6

Atlanta 23
Detroit 16

Denver 18
Miami 15

San Diego 21
NY Jets 27

Chicago 24
Tampa Bay 18

Houston 41
Tennessee 7

Pittsburgh 32
Arizona 20

Kansas City 28
Oakland 0

St. Louis 7
Dallas 34

Green Bay 33
Minnesota 27

Indianapolis 7
New Orleans 62 (no, this is not a typo)