Envision My Capstone Project

Google is the unlimited source of information we all turn to in times of need. Founded in 1998, Google has been striving for its mission to organize the world‘s information and make it universally accessible and useful.  Since then, Google has grown by leaps and bounds. From offering search in a single language they now offer dozens of products and services—including various forms of advertising and web applications for all kinds of tasks—in scores of languages. And starting from two computer science students in a university dorm room, they now have thousands of employees and offices around the world.

As one of Google’s millions of users, I log on to Google if I need any information, from an English word I don’t know to a textbook for my next semester, from which restaurant I should go for dinner to the cheapest air tickets for my next vacation… Google is my handy tool even I am on the road. However, I noticed recently I will go to Yelp when I look for local information. I found the information on Yelp is more reliable. For example, I was desperate to make an appointment with a close by hair salon before an interview. I went to Google and typed ‘Salon Milpitas 95035’ and found several Salons however I could not find out which one meets my needs. I checked on Yelp and found a perfect salon after I read reviews there. 

Yelp (www. Yelp.com) is a website that connects people with great local businesses. Yelp was founded in San Francisco in July 2004. Since then, Yelp communities have taken root in major metros across the US, Canada, UK, Ireland, France, Germany, Austria, The Netherlands, Spain, Italy, Switzerland, and Belgium. Yelp had a monthly average of 61 million unique visitors in Q3 2011. By the end of Q3 2011, Yelpers had written more than 22 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists. On average, more than 5 million monthly unique visitors relied on Yelp Mobile applications in Q3 2011 to help them make a spending decision on the go. Yelp filed registration statement for proposed IPO Nov. 17, 2011. Here is Yelp’s factsheet. http://www.yelp.com/html/pdf/Snapshot_Q3_2011_en.pdf

I looked at Yelp from the following angles:

Business Level Strategies

·         Should Yelp compete?

·         What is Yelp good at?

·         How does Yelp compete?

Corporate Strategies

·         What business is Yelp in?

·         Where does Yelp make money?

·         What should Yelp be in?

Here is Yelp’s SWOT Matrix.

Yelp
SWOT Matrix
Strengths		Opportunities
1. Brand Equity	<-Match->	1. Expanding profit-making opportunities
2. Innovative initiatives
3. Comprehensive product mix
4. "Surprise"
<--		<--
Convert		Convert
Weaknesses		Threats
1. Currently have products that		1. Concerns from investors
customers don't even realize exist		2. Possible peak or saturation of smaller
2. Not focusing on customer		and less-used product markets
"Community" as core competency

Yelp’s purpose is to connect people with great local businesses. Local businesses in U.S., especially small businesses, represent more than 99.7 percent of all employers and create more than 50 percent of private gross domestic product (GDP). That is how Yelp gets its revenue. Here is the summary of how Yelp’s products bring Yelp revenue.

Things You Should Know About Yelp

1.     Yelp was founded in 2004 to help people find great local businesses like dentists, hair stylists and mechanics

2.     Yelp had an average of approximately 61 million monthly unique visitors in Q3 2011

3.     Yelpers have written over 22 million local reviews

4.     In addition to reviews, you can use Yelp to find events, lists and to talk with other Yelpers

5.     Every business owner (or manager) can setup a free account to post photos and message her customers

6.     Yelp makes money by selling ads to local businesses - you'll see these clearly labeled "Yelp Ads" around the site

7.     Paying advertisers can never change or re-order their reviews

8.     Yelp has an automated filter that suppresses a small portion of reviews - it targets those suspicious ones you see on other sites

9.     You can access Yelp via iPhone, Android, BlackBerry, and more - see the full list of mobile apps here.

10.  The Weekly Yelp brings locals updates on the latest and greatest business openings & other happenings.

Yelp is not yet one of Google’s competitors (Yahoo, Ask.com, WPP, PayPal, MSN, etc), however 3 top executives, from Jeremy Steoppelman, Co-founder and CEO to Geoff Donaker, COO to Rob Krolik, CFO at Yelp, have experience working at eBay. Yelp is an Innovative, technology-centered global company. With Yelp’s growth trend since 2004, it is a strategic planning for Google to have Yelp on the same side of the table instead of the other side of the table.

In Summary, Yelp is on a healthy growing path and it is a well worthy company for Google to acquire in order to expand the depth of Google products.

Day 8 – Economics – The Ten Day MBA

 “micro” economics deals with “small”, specific situations;

“macro” economics looks at the “big” picture of entire economies.

Aggregate supply (AS) equals aggregate demand (AD) at an equilibrium price and level of economic output.

Equilibrium – the point at which the quantity supplied equals the quantity demanded and a mutually agreeable price is determined.

Supply equals demand for a price. That is the basis of all economic theory.

Marginal Revenue (MR) and Marginal Cost (MC) - the added revenue and cost of producing and selling one additional unit.

Companies are motivated to maximize total profits by Max’ing revenues and Min’ing costs.

“Marginal” costs and revenues are critical in making “marginal” pricing and production decisions. To evaluate profitability of an entire business, rather than one transaction, total revenue must exceed total costs to make a bottom-line company profit.

Elasticity- the change in buyers’ demand as a result of price changes. (≥1 Elastic or <1 Inelastic)

The elasticity of “quantity demanded” differs from the elasticity of “total revenue”

Elasticity of Quantity Demanded = % Change in Quantity Demanded / % Change in Price

Elasticity of Total Revenue = % Change in Total Revenue / % Change in Price

Keynesian and Monetarist theory -

Keynesian Theory: spending and consumption are the main drivers of an economy.

Monetarist Theory: the size and growth of the money supply determines the growth of the economy. Money makes the world go around.

(I reviewed my blog, which was posted Sept 25, 2011 as link below: http://deannad2011-mba.blogspot.com/2011_09_01_archive.html. I am still standing on my opinion with regards to the debate of Keynesianism vs Monetarism. )

John Maynard Keynes: judicious and timely gov’t intervention could have a stabilizing and beneficial effect on economy.

Milton Friedman believed in the power of the market to heal itself and that gov’t regulation had done more harm than good.

Fiscal policy – a gov’t’s spending policy (Obama Spending Cuts)

Monetary Policy – A gov’t’s policy of on controlling the supply of money and interest rates.

Monetary Policy tools:

·         Discount rate vs Prime rate vs Consumer rate

                                i.            Discount rate: borrowing rate between banks

                              ii.            Prime rate: lowest lending rate to the most trustworthy consumers

                            iii.            Consumer rate: range of rates paid by consumers from prime rate to much more

·         Gov’t securities (Treasury bonds)

·         Reserve requirement: how much banks must reserve to guarantee their accounts.

Gross National Product (GNP) - the total amount of final goods and services produced by an economy over a period of time. Changes in GNP are used as a measure of the health of an economy.

Real GNP = GNP adjusted for inflation. Nominal GNP = unadjusted

Economists to know:

·         Adam Smith – the economist who wrote about the “invisible hand” of capitalism in The Wealth of Nations in 1776

·         Arthur Laffer- 1980s economist who developed the Laffer Curve, which illustrated that lower tax rates would result in higher tax revenues.

Balance of Payments- the accounting for the inflows and outflows of foreign exchange of a country.

Country Analysis – a systematic framework to organize economic data and make predictions about the future prospects of a nation, including the following steps:

1.                  Analyze past performance

             External Measures – Balance of Payments, Exchange rates

             Internal Measures –

                 General: GNP, Inflation, Employment

                 Supply Side: interest rates, Investment, Capacity

                 Demand Side: Consumption, Income Distribution

                 Social Side: Human Migrations, Population Growth, Education

2.                  Identify the Country’s Strategy:

Goals: Autonomy, Productivity, Equity

Policies: Fiscal, Monetary, Trade, Social

3.                  Analyze a Country’s Context:

Physical: Size, Population, Geography

Political: Government Type, Stability, Corruption, Leaders

Institutions: Government Agencies, Business, Labor, Religion, Agriculture

Ideological: Role of Government, Family, Culture, and Individualism

International: Trade Advantages, Competitiveness

4.                  Make a Prediction based on Steps 1, 2, and 3.

By analyzing the U.S. roughly, I really could not see any positive predictions with Obama’s continuous administration.

Day 7 – Operations (Discussion) – The Ten Day MBA

Is the Operation Manager a good job for MBA student?

by Charlie Chao - Sunday, 13 November 2011, 10:39 PM

What an operational manager will do (reference from the Encyclopedia of Business 2nd edition)

• Supply Chains—management of all aspects of providing goods to a consumer from extraction of raw materials to end-of-life disposal.
• Operations Management/Marketing Interface—determining what customers' value prior to product development.
• Operations Management/Finance Interface—Capital equipment and inventories comprise a sizable portion of many firms' assets.
• Service Operations—Coping with inherent service characteristics such as simultaneous delivery/consumption, performance measurements, etc.
• Operations Strategy—Consistent and aligned with firm's other functional strategies.
• Process Design and Improvements—Managing the innovation process.

What I think? Not really a boring job. Just curious why not so many (or close to none) MBA student target this field?

Re: Is the Operation Manager a good job for MBA student?

by Deanna Dong - Thursday, 17 November 2011, 12:39 PM

That is my question too when i read this chapter - Operations. it seems there are a lot opportunities however why aren't there so many MBAs in the operations?

I work in Global Operations segment in an EMS company. I looked around & realized a lot MBAs actually involved in our company's daily operations, from Operation Management to Finance Management to Supply Chain Management. So I guess either the statement from the book is not up-to-date or what I observed from my company is abnormal?

As you mentioned it is not a boring job. In fact, working in Operations is challenging because it will inevitably change your personal life. Changes may be as simple as going in to the office at 4 AM for a conference call because of time-zone differences. or having your suitcase ready all the time for an international trip with the last minute notice. Do the rewards outweigh the costs? This will be a personal decision that depends on what you want to get from the job. Many MBAs sometimes ask themselves, "What have I gotten myself into this time?" “Did I pay my MBA just for less family time & more Jetlags?”

Operations - actually making products and providing services, which is the ultimate purpose of business. Operational Management is such an important part of a business. So who is responsible for the lack of operational-bound MBAs? I agreed that both the companies and the MBAs are responsible for the lack of operational-bound MBAs. In order to make more MBAs join the operational management team, we need to work on both sides. From the companies (CEOs, recruiters) standpoint, we need to make sure CEOs/recruiters believe that MBAs are sufficiently trained to be worth the high salaries paid in the plants and factories and MBAs with more real life experience will contribute more on the growth of the companies. We need to make operational related job more attractive in term of compensation and benefit. From MBAs standpoint, we need to brainstorm MBAs that there will be more value recognition on operational related job.

After I graduate, I would like to join Global Operations team. I love traveling and I like different cultures. I feel I am more valuable when I solve problems and I feel more challenging when I face complexity. As an MBA, I believe operational-bound job is able to give me the opportunity to let me explore and soar.

Day 7 – Operations – The Ten Day MBA

Operations - actually making products and providing services, which is the ultimate purpose of business. Who is responsible for the lack of operational-bound MBAs?

History

1.      Frederick Taylor: the father of scientific management

Job fractionalization -> time and motion studies - > workers=soldiers: slack off-> management’s responsibility to control the workplace and to force lazy workers to be efficient in spite of themselves.

2.      Franck and Lillian Gilbreth

Complex task to component parts -> 17 types of body movements/therblig-> Streamlining the task to its essential therbligs was key. (‘Cheaper by the dozen’)

3.      Elton Mayo: the father of the human relations movement of production management.

Hawthorne Effect- treated better -> further motivated. 

Theory X & Theory Y: Douglas McGregor renamed Taylor’s to Theory X (more pessimistic) & dubbed Mayo’s to Theory Y(self-motivated with a supportive work environment).

Theory Y-> Theory Z: William Ouchi everyone is part of a consensual decision-making process. Kaizen: every employee-improve all aspects of the self and of the company.

The contingency approach: classical methods of Taylor + Japanese Theory Z.

5 issues arise when produce a product/service:

Capacity – how much can I produce? – The Six M’s of Capacity: Methods, Materials, Manpower, Machinery, Money & Messages.

Flow Diagramming – mapping out work flows to spot efficiency opportunities

Linear Programming- computer method of determining the optimal solutions in situations with constrained capacity.

Scheduling – how am I going to do it?

Gantt Chart Scheduling

Critical Path Method Scheduling (CPM)

Queuing Theory to Schedule: bank teller

Inventory – how much inventory is there and how can I reduce it?

The balancing Act – the optimal inventory level is a delicate balancing act. Inventory decisions are tough: diff depts. -> diff goals.

Inventory Types by stage of production: Raw materials->WIP (work in process)-> FG (Finished Goods)

Inventory Types by Reason for holding: Pipeline, Cycle, Safety, Anticipatory, Spectulative.

Economic Order Quantity (EOQ): mathematical formula to minimize inventory costs

Material requirement planning (MRP): sophisticated operational inventory and capacity management tool

Standards – what do I consider efficient production and quality output?

Control – is the production process working?

Quality: means that the product or service “meets the standards” set by either the manufacturer or the consumer.

Juran and Fitness for Use:

Fitness for use has five “dimensions”: quality of design, conformance to manufacturing standards, lack of breakdowns, satisfactory performance, and the ease of maintenance of product after purchase.

Deming and Statistical Process Control (SPC): Deming quite simply proposed that quality could be achieved by identifying the causes of production problems and by carefully monitoring production to stop errors before too many products were produced.

Problems in two categories: common causes (systemic problems) & special causes.

A tool called SPC: the issue was distinguishing acceptable variations from variations that could indicate problems. Statistical probability provides a method of making that distinction.

Crosby and “Quality is Free”: the ultimate goal of a quality program is zero defects. Management must make a concerted effort to alter both the design and the production method to improve quality. In his opinion, any costs incurred in improving quality would be paid for by the saving of materials and labor that were once expended in correcting defects.

Cycle time: an idea-> a new product or improve an already existing product

Rapid cycle times are a competitive advantage in the battle to act faster time-based competition.