business news in context, analysis with attitude

Published on: October 7, 2013

by Kevin Coupe

For parents, teachers, and educational administrators, this is the kind of situation that you hope won't happen, but inevitably does.

It happened in Los Angeles, where, as the Associated Press reports, the LA Unified School District spent something like a billion dollars to put iPads into the hands of some 650,000 students in 47 schools., with plans to expand the program by the 2014-2015 school year.

The iPads came equipped with security settings that were designed to prevent the students from accessing unapproved social media sites and games. Except that, of course, it didn't take long for about 300 of the students to hack the tablet computers and disable the security settings and start playing games and posting on Facebook.

"That incident, and related problems, had both critics and supporters questioning this week whether LAUSD officials were being hasty or overreaching in their attempt to distribute an iPad to every student and teacher at the district's more than 1,000 campuses by next year," the story says, adding that the district needs "to spend extensive time drawing students into a discussion on using iPads responsibly before handing them out. And, of course, installing a firewall that can't be easily breached."

Now, I get why this is a problem. But there is a part of me - and this is the part that almost certainly is going to be criticized by Mrs. Content Guy, who is an elementary school teacher - that thinks these kids should get commendations for original thinking. (Sort of like if they had managed to figure out a way to survive the Kobayashi Maru test, if you get my meaning.)

Sure, we want to teach kids discipline, in addition to math. But I think the ability of these kids to figure out how to do things that their teachers probably weren't able to do also speaks, in no small measure, to their ability to navigate a 21st century competitive environment.

While it is entirely possible that the initiative wasn't fully thought through, it is more than possible - indeed, it is a certainty - that old fashioned paper-and-ink textbooks are an obsolete concept. Because of how fast information changes, they are out-of-date almost from the time they are printed, and tablet computers are going to create an environment in which organic, interactive and potentially more relevant learning can take place.

The solution to this problem isn't to scrap the program. No, the solution is to do it better. If it were me, I'd start by hiring each of these kids to help me figure out how to make it work more effectively, and put a letter of admiration into each of their files. I'm not sure the old command-and-control approach works in education anymore, simply because so many of these kids are so smart about so much. (Smart. Not wise. And not able to think clearly, objectively, and critically. That's what a good teacher will help them achieve.)

I do think there is a business implication in this story, because so many of the people you are hiring, or are going to hire, are going to have these same impulses and knowledge set. And it is incumbent on businesses to figure out who these people are, and take advantage of them. You may have a kid stocking shelves who could be your next IT director ... if you are open to the idea that there are always possibilities, and part of your job is to nurture and allow them to flourish.

It can be an Eye-Opener.

Published on: October 7, 2013

The Austin American Statesman has a piece about the continued growth of Whole Foods - now with more than 350 stores and "record profits" - and how this means that, at the same time, the target on its back seems to grow as well. Everything it does makes news, which means that from a perception point of view, there is less of a margin for error.

“In some ways, it’s a compliment to how people see our company,” said Whole Foods co-CEO Walter Robb. “I do think we’re a leader in the food industry, and people look to us in that respect. And so when we take a step or a make decision, it gets reported on.”

Whether it is dealing with criticisms over its language policy restricting the use of Spanish by employees (even in New Mexico), or criticisms of its prices in urban markets like Detroit where unemployment is high, or criticisms of the political views of its co-CEO and founder, John Mackey, Whole Foods has found that with size and stature comes media attention that puts its actions and reactions under a microscope.

"The bottom line for the company’s leadership, Robb said, is that as Whole Foods navigates its higher profile, 'we have to recognize that with that comes some responsibility and some accountability. And that’s not a bad thing'."

Published on: October 7, 2013

The New York Times has a piece about a unique New York issue - people who want food delivered to them not at their apartments or places of work, but on playgrounds, beaches and even their cars.

"Now that the hungry can use cellphones and food-delivery apps to order anything their stomachs desire to the very spot where they stand, however, delivery is no longer confined to the apartment or the office — or even, for that matter, to a place with an address," the Times writes, adding, "Some requests are simple enough: bring a few pizzas to the neighborhood playground or a sandwich to the local gym, ready for its sweaty devourer. Others can tax a delivery person’s ingenuity, as when the call comes from within a crowd: the middle of the Sheep Meadow in Central Park on a sunny day, for instance, or any of the city’s myriad lines. Just ask any park-bound delivery person, who must rely on everything short of divining rods to find customers amid seas of picnickers. The lucky ones are told to look for colorful blankets or particularly loud T-shirts. Others must simply wander, and hope."

For the uninitiated, by the way, the "deliver to the car" scenario takes place when a New Yorker has a great parking space, but needs to wait in it until alternate-side-of-the-street parking rules have expired. And "though New Yorkers seem to feel nothing is worth having unless they have to wait for it — to judge by the lines for cronuts, free Shakespeare and new iPhones — nobody likes to wait hungry."

Published on: October 7, 2013

The Washington Post has a long but excellent story that essentially serves as ac case study for how and why the Graham family, which owned the paper since the Great Depression, handles - and sometimes mishandled - the seismic changes in technology and content distribution in such a way that it finally had to sell the paper to Amazon.com founder/CEO Jeff Bezos in order to assure the paper's continued viability and vitality.

I know I've pointed to this situation several times here on MNB, but the reason I continue to do is because I believe it is a stark and vivid reminder of what can happen when ever the best and most responsible executives misread the competitive landscape, and even, despite their often extraordinary capabilities, are unable to navigate it.

Because that's what happened at the Post. Executives knew for two decades that the world was changing, and that the Post needed to make changes with it. But that's easier said than done, even if you know what to do, and they often did not. Legacy thinking, and so-called "traditional" values (that may not be "values" at all), can get in the way of being relevant and pro-active.

It is a great piece, high instructive, and you can read it

here.

Published on: October 7, 2013

"Consumers are choosing specialty foods over conventional foods at record levels," according to new research from the Specialty Food Association, which says that "close to 75 percent of U.S. consumers report making specialty food purchases this year, a major increase since the economic downturn of 2009 when only 46 percent reported that they bought these high-quality products. Consumers surveyed say they spend about one quarter of their at-home food dollars on specialty options like artisanal chocolates, cheeses and oils."

The study also says that "some 43 percent of specialty food consumers use their mobile phones to buy food, and nearly half buy foods with locally-grown ingredients," that "genetically modified organisms are emerging as a hot topic for specialty food consumers, who are four times more likely to seek out non GMO foods than are non-specialty food consumers," and that "specialty food consumers tend to be young, affluent, and live in the West or Northeast. Men are almost as likely to make purchases as women, with 74 percent of men and 75 percent of women reporting buying specialty foods." And: "For the second year, the top five categories consumers say they buy are chocolate, olive oil and other specialty oils, cheese, yogurt and kefir, and coffee. Salty snacks have jumped from ninth to sixth place among most purchased specialty foods."

Published on: October 7, 2013

• The Wall Street Journal reports that Walmart "is eyeing acquisitions in China ... a key market where rivals are building up and where the U.S. retailer has struggled to copy the success it has enjoyed in the U.S."

Walmart already has close to 400 stores in 118 Chinese cities, but it "is looking for deals to build market share in cities where it isn't already the No. 1 or No. 2 player, said Scott Price, chief executive of Wal-Mart's Asia division"

Apparently, Tesco's recent decision to fold its Chinese operations into a new joint venture with China Resources Enterprise has captured Walmart's attention, though Price says that "such joint ventures wouldn't fit into Wal-Mart's game plan."


• Reuters reports that Walmart's current joint venture in India with Bharti Enterprises is "not tenable," and that the two companies are close to making a decision about how to best "move forward."

The story notes that "Wal-Mart has an equal joint venture with Bharti under which it runs its Best Price Modern Wholesale Stores in India and the U.S. retailer last year called Bharti its 'natural partner' to open its retail stores in the country.

"In July, Reuters reported Bharti was looking to exit its joint venture with Wal-Mart. India permitted foreign retailers to own 51 percent of their Indian operations in September 2012, but ambiguity around rules governing the policy has ensured no foreign retailer has so far applied to enter the country."

Published on: October 7, 2013

• EcommerceBytes.com reports that the National Retail Federation (NRF) is predicting that "online spending this November and December will increase between 13 percent and 15 percent, reaching as much as $82 billion for the season. Should that forecast bear out, this holiday season's gains would be roughly in line with the fourth quarter of 2012, when online sales increased 15.5 percent, according to the Commerce Department.

Published on: October 7, 2013

• Reuters reports that Amazon.com employees in Germany are threatening a strike during the upcoming end-of-year holiday shopping season "in a dispute over pay that has been raging for months."

The unions in Germany have staged a series of small strikes to protest what they say is substandard pay; Amazon says none of the strikes have affected deliveries, and that these employees actually receive above-average pay by the standards of logistics workers, which is how it categorizes them.

Now, the unions seem to be playing hardball with new strike threats that could impact Christmas business.


• Bloomberg reports that McDonald's is "rolling out an electronic loyalty program in about 570 U.S. locations as stores seek to attract younger customers. Mobile solutions marketer Front Flip LLC has introduced a loyalty application in about 420 McDonald’s stores that rewards customers with free food and other offerings. It is adding another 150 locations in coming weeks ... Customers can win prizes such as free cheeseburgers and buy-one, get-one-free Big Macs after scanning a QR code."

Published on: October 7, 2013

Since you asked ... and many of you did ... I am happy to report that last Friday's colonoscopy (and endoscopy) went extremely well, and that I apparently have the colon of a 30-year-old.

And here's what I can tell you about the experience. The procedure itself is a piece of cake. As most people know, it is the prep - not eating, and drinking a mixture that essentially cleans you out the day before - that can be the most challenging.

But you know what? Even that's not so bad. Add the mixture to diet ginger ale, and it is entirely drinkable, you have a few hours when you have to stay close to home, and if you're lucky, the next day someone tells you that everything looks good, and come back in X number of years. (In my case, three. That's how old I am.) And, if they find something, they can deal with it, quickly, efficiently, and hopefully before it becomes a much bigger problem.

I'm not a doctor, and I don't even play one on TV. But I'm here to tell you that if you are the right age and you haven't had a colonoscopy, there's nothing to be afraid of.

Ignorance ain't bliss. It's just ignorance.

Published on: October 7, 2013

Responding to some of our Walmart-related stories, MNB reader Herb Sorensen wrote:

I'm sure this observation isn't "new" to you, but size is often a disadvantage at retail, and Walmart has it in spades.  Moving an organization of that size is an incredible challenge, and THIS is the single greatest challenge to Walmart today.  Thinking moves the world, and thinking simply involves massive inertia.

It reminds again of Disraeli's lament on becoming prime minister, "I have climbed to the top of the greasy pole!"  But the inertia moderates the greasy pole analogy, as usually the descent is painful, slow and ugly.  The inertia gives Walmart some time to get it right.

True. or more time to get it wrong. (See the Washington Post story, above.)




Regarding the story we had suggesting that Jeff Bezos might decide to simply give every Washington Post subscriber a Kindle and then get rid of the paper version ... which would save money and allow for him to sell other Kindle-related content ... one MNB user wrote:

The "regular" price for the Washington Post is about $275 a year.  [The offer much lower rates to "new" subscribers.]

If they gave away Kindle with a 2 year subscription at regular price that would be a no brainer for the Post, and might be favorably viewed by the public as the Kindle would be used for a lot more than just that newspaper.




On the subject of Walmart competing with Florida grocers using BOGOs, MNB reader Tim Pramas wrote:

I am writing in regards to your reference to Walmart matching competitors’ BOGO offers in Florida which requires the customer to request the match while checking out at Walmart.  This presents a good opportunity for competitors to try to lure shoppers who now buy groceries at Walmart.  To take advantage of Walmart’s match, the shopper needs to pay attention to advertisements from other grocery stores.  If the competitor’s advertisement can offer something that attracts the shopper in addition to the low advertised price (and ideally distinguishes itself positively from Walmart), then perhaps the competitor can attract new business.

From another reader:

A few points:

1. This is a game changer because BOGO's are the only way to compete with Wal-Mart on price.

2. Is Walmart matching the price or the BOGO? You assume it's the price. Even if it is the price that is standard with their matching policy for competitive pricing so your point is not strong on that one.

3. I find it hard to believe the checkout people at Walmart would know what was on BOGO at Publix. I wonder if you could go up with any item and say it was on BOGO at Publix?

4. Unlike many retailers, Publix allows shoppers to buy only one product in a BOGO and get that item for half price. Is Walmart doing likewise?

I don't know how many customers ask for a match but this could be a nightmare for Walmart.

And from another:

Sure, Walmart price-matches other retailers sale prices; trying to find the matched item on the shelf at Walmart is often another story in stores I have checked.

Walmart had a PA grocers ad with prices Xed out with a Magic Marker.  A spot check of those items on Walmart shelves found the matched prices, but mostly gaping holes on the shelves.  I'm not sure if that was Walmart's poor shelf management or was caused by shoppers cleaning up on a good buy.

The local grocer had to stock enough of its ad items to satisfy her customers.  Walmart is not under any such constraints.  Walmart's out-of-stock problems due to centralized inventory control are legend, which may also have contributed to the empty shelves.

I've not yet seen how Walmart would handle a BOGO offer.  My guess is that it wouldn't be advertised; only offered to assuage a customer who complained.

Again, good luck finding price-matching BOGO items on Walmart shelves.  It's a great business model; Walmart gets the credit for matching prices, but it costs only the limited inventory on their shelves.

Maybe I'm wrong, but I wouldn't think that Walmart would get much credit if it matches prices but doesn't have product. It'd be sort-lived, and ultimately would irritate the shopper.

Published on: October 7, 2013

In Week Five of the National Football League

New England 6
Cincinnati 13

Detroit 9
Green Bay 22

Seattle 28
Indianapolis 34

Baltimore 26
Miami 23

New Orleans 26
Chicago 18

Philadelphia 36
NY Giants 21

Kansas City 26
Tennessee 17

Jacksonville 20
St. Louis 34

Carolina 6
Arizona 22

Denver 51
Dallas 48

Houston 3
San Francisco 34

San Diego 17
Oakland 27




In Major League Baseball's National League Divisional Series games yesterday, the Los Angeles Dodgers defeated the Atlanta Braves 13-6 to take a 2-1 lead in the best-of-five series.

And, the Pittsburgh Pirates defeated the St. Louis Cardinals 5-3, also taking a 2-1 lead in their best-of-five game series.

Going into today's games, the Boston Red Sox have a 2-0 series lead over the Tampa Bay Rays, and the Detroit Tigers and Oakland A's are tied at one game apiece.