Deck 1: The Changing Face of Business

Question 1

"Time is not our friend with respect to global climate change. . . . the usual approach-doing too much, too late-will not work." So says John Rowe, CEO of the utility company Exelon, a recent winner of the National Safety Council's Green Cross for Safety. Exelon is betting on the world's growing demand for renewable energy sources to create a sound financial future for the company and its stakeholders while minimizing its environmental impact.Created in 2000 from a merger between utility companies in Chicago and Philadelphia, Exelon sold most of its underperforming coal plants to focus on nuclear power generation. Its fleet of 17 reactors is the world's third-largest, topped only by utilities in France and Russia. Exelon earns $17 billion in sales and close to $3 billion in profits a year, returning more than twice as much to shareholders as other utilities. Its nuclear plants produce about 130 billion kilowatt-hours of electricity each year and have reduced greenhouse gas emissions more than 5 percent from rlier levels. That's equivalent to taking a million passenger cars off the road.Legislation to cap or more heavily regulate carbon emissions will force Exelon's carbon-dependent competitors to raise prices. "I thought climate legislation would come sooner or later and tat I'd rather have my money in the nuke fleet," says Rowe. The company plans to further shrink its carbon footprint by 2020 by eliminating more than 15 million metric tons of potential greenhouse gas emissions every year.
Exelon has tried and failed to acquire three smaller rival companies. What role, if any, do you think strategic partnerships might play in the company's future?

Answer 1

Role of strategic partnership in the Company's future :
A strategic partnership can help a firm build a stronger base for its development. It can help a firm grow even more by using the combined resources and experience of two firms. Exelon could have diversified in two sectors, creating a pool for collecting profits from more than one sector. A strategic partnership also helps businesses create complementary products, as well as getting the swift supply of raw materials. It could also help the business become more secure in future by making it more able to withstand climatic, geographic, or legislative changes.

Question 2

What is a private enterprise system? What four rights are critical to the operation of capitalism? Why would capitalism function poorly in a society that does not ensure these rights for its citizens?

Answer 2

Private enterprise system is the basic economic system which prizes companies for their ability to serve and identify the needs and demands of the customers.
The four basic rights critical to the operations of capitalism are as follows:
1) Private property : It is the basic right under private enterprise which gives a participant right to buy, sell, and own most forms of properties, including tangible and intangible assets.
2) Competition : This provides the right to fair competition preventing any undue and excessive activity by individual firm.
3) Profits : This gives the right to owners to own profit after taxes for their activities.
4) Freedom of choice : This right gives the power to citizens for choosing their own purchases, investments, and employment.
Capitalism will suffer badly without these rights as their absence will prevent any business from starting and growing freely. It would take the economy to downturn and thus negating the fundamentals of capitalism.

Question 3

Google Buzz a Bust?
As originally conceived, Google's Buzz must have sounded like a great idea: "a new way to start conversations about things you find interesting" that was "built right into Gmail, so you don't have to peck out an entirely new set of friends from scratch-it just works." Unfortunately, the features designed to make adopting Buzz effortless created an instant uproar over users' privacy.Planned to compete with Facebook and Twitter, Buzz offered users a ready-made social network through an "auto-follow" function that automatically networked their most frequent Gmail contacts. It also automatically connected users with Picasa photo albums and links and videos shared on Google Reader. Tens of millions around the orld reportedly sampled the new service in its first two days, posting more than 9 million messages and comments. Most, however, were angry and dismayed to discover how much personal information the auto-follow and other features made public within the network.Within 48 hours Google announced steps to correct privacy concerns, including changing to an auto-suggest feature and making it easier for users to modify or disable the program. "We're very sorry for the concern we've caused and have been working hard ever since to improve things based on your feedback," Buzz's product manager told users. "We'll continue to do so."Though some observers still worried that "Gmail users are being driven into a social networking service . . . they didn't sign up for," others conceded the high level of interest in Buzz suggested "Google might have a minor hit on its hands already."
Can a company carry its customer relationship-building efforts too far?

Answer 3

Carrying customer building relationships too far:
Yes, a company might take its efforts for building customer relationships to such a level that this might hurt the sentiments of the customers. The company should maintain a distinction between comfort and cornering. Google had cornered the freedom sense and privacy rights of its Gmail users by making changes through Buzz that informed the users about the policies. It provided an auto allow function which shared every detail of the user. This should not have been done without the consent of the users.

Question 4

Many successful companies today use technology to help them improve their relationship management. Suppose a major supermarket chain's management team has asked you to assess its use of technology for this purpose. On your own or with a classmate, visit one or two local supermarkets and also explore their corporate Web sites. Note the ways in which firms in this industry already use technology to connect with their customers, and list at least three ideas for new ways or improvements to existing ones. Present your findings to the class as if they represented the management team.

Question 5

Microsoft and Google Square Off on the Web Google took a big step into Microsoft-dominated territory with its introduction of home and office tools like Gmail and Google Docs, and especially with its own operating system, Chrome OS, to challenge Microsoft's long-running Windows series. Google even has a Web browser, also called Chrome, to compete with Microsoft's entrenched Internet Explorer, while Microsoft challenges Google's dominance in Internet searches with its new search engine, Bing. Google has long supported Web-based applications, as opposed to the desk-top applications that have been Microsoft's specialty, but Microsoft is fighting back. It's creating browser-based versions of its desktop Office products including Word, Excel, and PowerPoint to compete with Google's cloud-computing tools. Microsoft's applications, often known for growing by adding more and more features in each new generation, will have to match Google's successful focus on speed and ease of use. Google has used these characteristics to promote a great user experience with its PC products, an advantage it hopes to import into the business applications market. "We want to spoil people like heck in their personal lives," says Google's vice president of product management. "Then when they go to work, they should be asking the question, 'Why are things so hard?'"Google credits some of its success to its design teams' unwillingness to settle for the status quo. "I don't think our Docs team has ever been fundamentally happy with their product," said the president of the company's enterprise group. That restlessness means shortfalls in any Google product's performance may be short-lived. Google Docs, for instance, can't yet match Microsoft Word's editing and page layout features, while Google Spreadsheets offers limited performance and scaling capabilities.Google is so determined to solve such problems, however, that it's helping to shape the creation of the World Wide Web's new HTML5 language, the standard for structuring and presenting content on Web pages and Web-based documents. "We view the Web as a platform," says Google's enterprise product management director. "We don't view it as a companion to the desktop. . . . We want the vast majority of users of Microsoft Office to be able to easily switch to Google Docs."
What feature or features do you think Google has identified as its basis for competitive differentiation?

Question 6

In what ways is entrepreneurship vital to the private enterprise system?

Question 7

The entrepreneurial spirit fuels growth in the U.S. economy. Choose a company that interests you-one you have worked for or dealt with as a customer-and read about the company in the library or visit its Web site. Learn what you can about the company's early history: Who founded it and why? Is the founder still with the organization? Do you think the founder's original vision is still embraced by the company? If not, how has the vision changed?

Question 8

Identify the six eras of business in the United States. How were businesses changed during each era?

Question 9

Why is business so important to a country's economy?

Question 10

Describe the focus of the most recent era of U.S. business. How is this different from previous eras?

Question 11

Using search engines. Gathering information is one of the most popular applications of the Web. Using two of the major search engines, such as Google and Bing, search the Web for information pertaining to brand and relationship management. Sort through your results-you're likely to gets thousands of "hits"-and identify the three most useful. What did you learn from this experience regarding the use of a search engine?
http://www.google.com
http://www.bing.com

Question 12

Define partnership and strategic alliance. How might a motorcycle dealer and a local radio station benefit from an alliance?

Question 13

"Time is not our friend with respect to global climate change. . . . the usual approach-doing too much, too late-will not work." So says John Rowe, CEO of the utility company Exelon, a recent winner of the National Safety Council's Green Cross for Safety. Exelon is betting on the world's growing demand for renewable energy sources to create a sound financial future for the company and its stakeholders while minimizing its environmental impact.Created in 2000 from a merger between utility companies in Chicago and Philadelphia, Exelon sold most of its underperforming coal plants to focus on nuclear power generation. Its fleet of 17 reactors is the world's third-largest, topped only by utilities in France and Russia. Exelon earns $17 billion in sales and close to $3 billion in profits a year, returning more than twice as much to shareholders as other utilities. Its nuclear plants produce about 130 billion kilowatt-hours of electricity each year and have reduced greenhouse gas emissions more than 5 percent from rlier levels. That's equivalent to taking a million passenger cars off the road.Legislation to cap or more heavily regulate carbon emissions will force Exelon's carbon-dependent competitors to raise prices. "I thought climate legislation would come sooner or later and tat I'd rather have my money in the nuke fleet," says Rowe. The company plans to further shrink its carbon footprint by 2020 by eliminating more than 15 million metric tons of potential greenhouse gas emissions every year.
Exelon is the most valuable U.S. utility company in terms of market value and derives 92 percent of its power from nuclear plants. Do you think being environmentally aware and being profitable are compatible goals for a business? Why or why not?

Question 14

Identify the major changes in the workforce that will affect the way managers build a world-class work-force in the 21st century. Why is brainpower so important?

Question 15

Google Buzz a Bust?
As originally conceived, Google's Buzz must have sounded like a great idea: "a new way to start conversations about things you find interesting" that was "built right into Gmail, so you don't have to peck out an entirely new set of friends from scratch-it just works." Unfortunately, the features designed to make adopting Buzz effortless created an instant uproar over users' privacy.Planned to compete with Facebook and Twitter, Buzz offered users a ready-made social network through an "auto-follow" function that automatically networked their most frequent Gmail contacts. It also automatically connected users with Picasa photo albums and links and videos shared on Google Reader. Tens of millions around the orld reportedly sampled the new service in its first two days, posting more than 9 million messages and comments. Most, however, were angry and dismayed to discover how much personal information the auto-follow and other features made public within the network.Within 48 hours Google announced steps to correct privacy concerns, including changing to an auto-suggest feature and making it easier for users to modify or disable the program. "We're very sorry for the concern we've caused and have been working hard ever since to improve things based on your feedback," Buzz's product manager told users. "We'll continue to do so."Though some observers still worried that "Gmail users are being driven into a social networking service . . . they didn't sign up for," others conceded the high level of interest in Buzz suggested "Google might have a minor hit on its hands already."
Do you think Google will recover customers' goodwill after introducing new privacy features into its Buzz network?

Question 16

Identify four qualities that the "new" managers of the 21st century must have. Why are these qualities important in a competitive business environment?

Question 17

Microsoft and Google Square Off on the Web Google took a big step into Microsoft-dominated territory with its introduction of home and office tools like Gmail and Google Docs, and especially with its own operating system, Chrome OS, to challenge Microsoft's long-running Windows series. Google even has a Web browser, also called Chrome, to compete with Microsoft's entrenched Internet Explorer, while Microsoft challenges Google's dominance in Internet searches with its new search engine, Bing. Google has long supported Web-based applications, as opposed to the desk-top applications that have been Microsoft's specialty, but Microsoft is fighting back. It's creating browser-based versions of its desktop Office products including Word, Excel, and PowerPoint to compete with Google's cloud-computing tools. Microsoft's applications, often known for growing by adding more and more features in each new generation, will have to match Google's successful focus on speed and ease of use. Google has used these characteristics to promote a great user experience with its PC products, an advantage it hopes to import into the business applications market. "We want to spoil people like heck in their personal lives," says Google's vice president of product management. "Then when they go to work, they should be asking the question, 'Why are things so hard?'"Google credits some of its success to its design teams' unwillingness to settle for the status quo. "I don't think our Docs team has ever been fundamentally happy with their product," said the president of the company's enterprise group. That restlessness means shortfalls in any Google product's performance may be short-lived. Google Docs, for instance, can't yet match Microsoft Word's editing and page layout features, while Google Spreadsheets offers limited performance and scaling capabilities.Google is so determined to solve such problems, however, that it's helping to shape the creation of the World Wide Web's new HTML5 language, the standard for structuring and presenting content on Web pages and Web-based documents. "We view the Web as a platform," says Google's enterprise product management director. "We don't view it as a companion to the desktop. . . . We want the vast majority of users of Microsoft Office to be able to easily switch to Google Docs."
Some companies are considering using Google's Android operating system for their tablet PCs and netbooks. How would you expect Microsoft to react if Google succeeds in entering the market for desktop applications in this way?

Question 18

Case 1.1 SAS is still a great place to work: The employee benefits and perks at SAS, a privately held business software company in Raleigh, North Carolina, are so many and varied it boggles the imagination. The company's 300-acre campus houses a gym, weight room, meditation garden, sauna, and Olympic-size swimming pool. It seems unlikely any of the complex's 4,200 employees would fall ill with such health-building options to choose from, but just in case, there's a healthcare center with a staff of 56 including four doctors, ten nurses, physical therapists, and a psychologist. All care is free. "We charge you for one thing," says the health service director, "if you miss your appointment and don't give us notice. That's $10." Free or subsidized programs include Pilates, Zumba, yoga, weight management, smoking cessation, Wii bowling, massage, and aerobics. Two subsidized daycare centers care for 600 children, and there's a summer camp. Job sharing, telecommuting, and domestic partner benefits for same-sex couples are offered. Employees can get their clothes dry cleaned, car detailed, and income tax return prepared while they work. They can eat in any of three subsidized cafeterias during the day (one has a piano player who takes requests) and grab take-out for the family at day's end.They can prepare their own snacks in one of the many kitchens. But with free snacks every day, including Krispy Kremes (Fridays) and M&Ms (a long-standing Wednesday tradition), why would they? Jim Goodnight, the company's only CEO in its 34 years, believes treating employees well is simply good business. Rather than thinking it's unusual for SAS to be so generous, he wonders why other companies don't follow suit. And with revenues that have risen every year of the firm's existence, recently topping $2.3 billion despite the global recession, it appears he's right. SAS has been one of Fortune's best companies to work for in each of the last 13 years and recently earned the number-one spot on the list. "Some may think that because SAS is family friendly and has great benefits we don't work hard," says a communications employee. "But people do work hard here, because they're motivated to take care of a company that takes care of them." That sentiment expresses the culture of trust Goodnight has worked to create. "What we don't do is treat our employees like they're all, you know, criminals," says his vice president of human resources. Employee turnover among the 11,000 SAS employees worldwide is 2 percent, well below the industry average, and the company receives about 100 résumés for every open position. (About half its employees work in the United States.) The typical employee works 35 hours per week and many make their own schedules; no one counts sick days. Average tenure is ten years. About 17,000 customers worldwide use SAS data mining software, including IBM, Microsoft, Oracle, national retailers, banks, insurance and pharmaceutical firms, universities, the Census Bureau, and even professional baseball teams. Goodnight spends much of his time on the road meeting and talking with these clients, though he sometimes admits he would rather be programming. But he's well aware of where the real value of the company lies, and that's the reason he's willing to spend so much on making SAS a great place to work. "My chief assets drive out the gate every day," he says. "My job is to make sure they come back."
Explain how flexible and family-friendly policies have played a role in SAS's success.

Question 19

Brands distinguish one company's goods or services from its competitors. Each company you purchase from hopes that you will become loyal to its brand. Some well-known brands are Burger King, Coca-Cola, Hilton, and Old Navy. Choose a type of good or service you use regularly and identify the major brands associated with it. Are you loyal to a particular brand? Why or why not?

Question 20

Case 1.1 SAS is still a great place to work: The employee benefits and perks at SAS, a privately held business software company in Raleigh, North Carolina, are so many and varied it boggles the imagination. The company's 300-acre campus houses a gym, weight room, meditation garden, sauna, and Olympic-size swimming pool. It seems unlikely any of the complex's 4,200 employees would fall ill with such health-building options to choose from, but just in case, there's a healthcare center with a staff of 56 including four doctors, ten nurses, physical therapists, and a psychologist. All care is free. "We charge you for one thing," says the health service director, "if you miss your appointment and don't give us notice. That's $10." Free or subsidized programs include Pilates, Zumba, yoga, weight management, smoking cessation, Wii bowling, massage, and aerobics. Two subsidized daycare centers care for 600 children, and there's a summer camp. Job sharing, telecommuting, and domestic partner benefits for same-sex couples are offered. Employees can get their clothes dry cleaned, car detailed, and income tax return prepared while they work. They can eat in any of three subsidized cafeterias during the day (one has a piano player who takes requests) and grab take-out for the family at day's end.They can prepare their own snacks in one of the many kitchens. But with free snacks every day, including Krispy Kremes (Fridays) and M&Ms (a long-standing Wednesday tradition), why would they? Jim Goodnight, the company's only CEO in its 34 years, believes treating employees well is simply good business. Rather than thinking it's unusual for SAS to be so generous, he wonders why other companies don't follow suit. And with revenues that have risen every year of the firm's existence, recently topping $2.3 billion despite the global recession, it appears he's right. SAS has been one of Fortune's best companies to work for in each of the last 13 years and recently earned the number-one spot on the list. "Some may think that because SAS is family friendly and has great benefits we don't work hard," says a communications employee. "But people do work hard here, because they're motivated to take care of a company that takes care of them." That sentiment expresses the culture of trust Goodnight has worked to create. "What we don't do is treat our employees like they're all, you know, criminals," says his vice president of human resources. Employee turnover among the 11,000 SAS employees worldwide is 2 percent, well below the industry average, and the company receives about 100 résumés for every open position. (About half its employees work in the United States.) The typical employee works 35 hours per week and many make their own schedules; no one counts sick days. Average tenure is ten years. About 17,000 customers worldwide use SAS data mining software, including IBM, Microsoft, Oracle, national retailers, banks, insurance and pharmaceutical firms, universities, the Census Bureau, and even professional baseball teams. Goodnight spends much of his time on the road meeting and talking with these clients, though he sometimes admits he would rather be programming. But he's well aware of where the real value of the company lies, and that's the reason he's willing to spend so much on making SAS a great place to work. "My chief assets drive out the gate every day," he says. "My job is to make sure they come back."
What kind of relationship does SAS seem to have with its employees? With its customers?

Question 21

In what ways are not-for-profit organizations a substantial part of the U.S. economy? What challenges do not-for-profits face?

Question 22

Case 1.2 Kayak.com: Among the many business projects launched by entrepreneur Paul English is a Web site called gethuman.com, designed to help frustrated consumers short-cut their way through large companies' automated phone systems. English's main job, however, is running a popular travel search engine he co-founded with Steve Hafner called Kayak.com, and in keeping with his fanatical focus on good customer service (just what those automated phone systems often don't provide), he and Kayak's engineers take regular turns personally responding to customers' e-mails and telephone calls. To those who say he could get the customer service job done for much less than an engineer's salary, English says, "If you make the engineers answer e-mails and phone calls from the customers, the second or third time they get the same question, they'll actually stop what they're doing and fix the code.Then we don't have those questions any more." When English, who is also the company's chief technology officer, takes the calls himself, he's likely to give out his personal cell phone number and tell the caller,"If you have any follow-up questions, my name is Paul English; I'm the co-founder of the company." Only a handful of people will call him back, he says, "but they're blown away when I do that." Kayak's staff of about 100 employees all talk, Twitter, or e-mail customers every day. Their work supports a Website that lets millions of users compare prices for air travel, hotels, vacation deals, and rental cars. There are offices in Connecticut, where Hafner lives, Massachusetts, where English lives, and California, where the two bought a competing firm in 2007, as well as local sites across Europe. Hafner and English phone or instant-message each other every day. "We can practically read each other's minds," says English. "If an issue comes up, I know how he's going to weigh in and vice versa. We trust each other." They also trust their engineers and encourage them to chime in with solutions to problems. English, who has founded three other firms and sold one of them to Intuit several years ago, is an early riser who describes himself as having "more ideas than I can get done in a day." After checking e-mail, practicing yoga, and taking his son to school, he arrives at work for a day that might start with meetings, including with nonprofits like Partners in Health or Village Health Works in which he plays an advisory role. "There are certain fundamental rights that I believe all people should have," he says. "Kids shouldn't be dying of drinking dirty water." English likes to leave half his day free of scheduled appointments and spend the time walking around the office's open-plan environment to "see what's going on and work on product issues and design strategy." Acknowledging the company's growing success, and mindful that it needed more sophisticated marketing to keep it in the forefront of travel customers' minds, Kayak recently launched a national advertising campaign, which the cofounders took an active part in shaping. With a new logo and the tagline, "Search one and done," Kayak.com hopes to make more people aware that, as their ad agency's founder says, "it doesn't make sense to start their travel search anywhere else."
How does Paul English typify an entrepreneur? In what ways do you think his experience, background, or attitudes are unusual for an entrepreneur?

Question 23

Companies and not-for-profits. In addition to companies, virtually all not-for-profit organizations have Web sites. Four Web sites are listed below, two for companies (Alcoa and Sony) and two for not-for-profits (Cleveland Clinic and National Audubon Society). What is the purpose of each Web site? What type of information is available? How are the sites similar? How are they different?
http://www.alcoa.com
http://www.sony.com
http://www.clevelandclinic.org
http://www.audubon.org

Question 24

Case 1.2 Kayak.com: Among the many business projects launched by entrepreneur Paul English is a Web site called gethuman.com, designed to help frustrated consumers short-cut their way through large companies' automated phone systems. English's main job, however, is running a popular travel search engine he co-founded with Steve Hafner called Kayak.com, and in keeping with his fanatical focus on good customer service (just what those automated phone systems often don't provide), he and Kayak's engineers take regular turns personally responding to customers' e-mails and telephone calls. To those who say he could get the customer service job done for much less than an engineer's salary, English says, "If you make the engineers answer e-mails and phone calls from the customers, the second or third time they get the same question, they'll actually stop what they're doing and fix the code.Then we don't have those questions any more." When English, who is also the company's chief technology officer, takes the calls himself, he's likely to give out his personal cell phone number and tell the caller,"If you have any follow-up questions, my name is Paul English; I'm the co-founder of the company." Only a handful of people will call him back, he says, "but they're blown away when I do that." Kayak's staff of about 100 employees all talk, Twitter, or e-mail customers every day. Their work supports a Website that lets millions of users compare prices for air travel, hotels, vacation deals, and rental cars. There are offices in Connecticut, where Hafner lives, Massachusetts, where English lives, and California, where the two bought a competing firm in 2007, as well as local sites across Europe. Hafner and English phone or instant-message each other every day. "We can practically read each other's minds," says English. "If an issue comes up, I know how he's going to weigh in and vice versa. We trust each other." They also trust their engineers and encourage them to chime in with solutions to problems. English, who has founded three other firms and sold one of them to Intuit several years ago, is an early riser who describes himself as having "more ideas than I can get done in a day." After checking e-mail, practicing yoga, and taking his son to school, he arrives at work for a day that might start with meetings, including with nonprofits like Partners in Health or Village Health Works in which he plays an advisory role. "There are certain fundamental rights that I believe all people should have," he says. "Kids shouldn't be dying of drinking dirty water." English likes to leave half his day free of scheduled appointments and spend the time walking around the office's open-plan environment to "see what's going on and work on product issues and design strategy." Acknowledging the company's growing success, and mindful that it needed more sophisticated marketing to keep it in the forefront of travel customers' minds, Kayak recently launched a national advertising campaign, which the cofounders took an active part in shaping. With a new logo and the tagline, "Search one and done," Kayak.com hopes to make more people aware that, as their ad agency's founder says, "it doesn't make sense to start their travel search anywhere else."
How well do you think Kayak.com manages its relationships with its users? If it grows consider-ably larger over the next few years, how do you think this may change that relationship?

Question 25

More and more businesses are forming strategic alliances to become more competitive. Sometimes, businesses pair up with not-for-profit organizations in a relationship that is beneficial to both. Choose a company whose goods or services interest you, such as Timberland, FedEx, General Mills, or Target. On your own or with a classmate, research the firm on the Internet to learn about its alliances with not-for-profit organizations. Then describe one of the alliances, including goals and benefits to both parties. Create a presentation for your class.

Question 26

Case 1.3 New Harvest Coffee Roasters Brews up fresh Business: If you're one of those people for whom the scent of freshly roasted coffee is irresistible, you have something in common with RikKleinfeldt. Kleinfeldt, the co-founder and president of New Harvest Coffee Roasters, is a self-proclaimed coffee fanatic. He dwells on the aroma and flavor of coffee. He measures the freshness of roasted coffee in hours and days, instead of weeks and months. Kleinfeldt started New Harvest Coffee Roasters ten years ago as a way to pay homage to fresh coffee and build a business around it. Kleinfeldt observes Starbucks' tremendous success at creating gathering places for people to enjoy coffee and tea-as well as baked goods-in a relaxed social atmosphere. But he also notes with humor that, although cafes and coffee bars were thriving a decade ago, these popular hang-outs "weren't really about coffee. They were about smoothies and cookies. I thought, maybe it's time to get back to basics and roast some coffee." Kleinfeldt recalls that friends and colleagues-fellow coffee fans-felt the same way. He believed that he had a basis to start a business. "We're coffee people," he explains. "There is a like-minded group of people." Kleinfeldt also points out that the movement toward locally grown or produced foods has been a big help in establishing and building support for his business. "The idea of local coffee starts with the local roaster," he explains. Although the coffee beans themselves are grown else- where-mostly on farms in Costa Rica-they are roasted at New Harvest's facility in Rhode Island, where the company is based. "Freshness is a huge factor" in a good cup of coffee, says Kleinfeldt. "Once it's roasted, it's good for about two to twelve days, which is a good incentive to buy local." Buying local is exactly what retailers and coffee shops like Blue State Coffee do, creating a collaborative relationship with New Harvest. Alex Payson, COO of Blue State Coffee-a thriving shop in Rhode Island-observes that most of his customers live within a five or ten-minute walk from his business. Blue State customers are educated about the coffee they drink. "They want to know," says Payson smiling. "We connect with our coffee farmers. Our customers ask about the story behind our coffee," including farming practices and working conditions. Payson and his colleagues from New Harvest have traveled together to some of the coffee farms in Costa Rica that grow the beans they purchase. In fact, loyal customers can view the progress of trips like this on New Harvest's Facebook page. Relationships with companies like Blue State Coffee as well as with consumers are the basis for New Harvest's growth as a business. "We need strategic alliances," says RikKleinfeldt. "Blue State is a great example of that. "They buy into what we're doing and we support what they are doing. They collaborate with us-what's good for Blue State is also good for New Harvest." Blue State educates its customers and employees about the benefits of buying from a local firm like New Harvest, which in turn works with certified organic, free trade growers. When Blue State's workers are able to discuss their products knowledgeably with customers-including where and how they are grown, harvested and roasted-a relationship is developed. Sharing activities, comments, news, and anecdotes with customers, retailers, and coffee shops through social media such as Facebook and Twitter allows New Harvest to broaden its base without spending more dollars on marketing and advertising. These connections also put a personal face on the company and allow New Harvest to gain important knowledge about the views and preferences of its customers. In addition, they provide valuable opportunities to showcase some of the company's work in the community as well as its support for organizations such as the Rainforest Alliance and New England GreenStart. "Our mission is to be the leader in our region in developing the palate and expectations of coffee drinkers, in order to create a permanent market for the coffee produced by passionate and skilled growers," states the New Harvest Web site. For RikKleinfeldt's company and customers, coffee is much more than a hot cup of joe in the morning. Coffee-organically grown, freshly roasted, and served locally-represents a sustainable way to do business.
Give examples of each of the four factors of production that New Harvest must rely on to be a successful operation. How does each contribute to the firm's success?

Question 27

Identify and describe the four basic inputs that make up factors of production. Give an example of each factor of production that an auto manufacturer might use.

Question 28

Case 1.3 New Harvest Coffee Roasters Brews up fresh Business: If you're one of those people for whom the scent of freshly roasted coffee is irresistible, you have something in common with RikKleinfeldt. Kleinfeldt, the co-founder and president of New Harvest Coffee Roasters, is a self-proclaimed coffee fanatic. He dwells on the aroma and flavor of coffee. He measures the freshness of roasted coffee in hours and days, instead of weeks and months. Kleinfeldt started New Harvest Coffee Roasters ten years ago as a way to pay homage to fresh coffee and build a business around it. Kleinfeldt observes Starbucks' tremendous success at creating gathering places for people to enjoy coffee and tea-as well as baked goods-in a relaxed social atmosphere. But he also notes with humor that, although cafes and coffee bars were thriving a decade ago, these popular hang-outs "weren't really about coffee. They were about smoothies and cookies. I thought, maybe it's time to get back to basics and roast some coffee." Kleinfeldt recalls that friends and colleagues-fellow coffee fans-felt the same way. He believed that he had a basis to start a business. "We're coffee people," he explains. "There is a like-minded group of people." Kleinfeldt also points out that the movement toward locally grown or produced foods has been a big help in establishing and building support for his business. "The idea of local coffee starts with the local roaster," he explains. Although the coffee beans themselves are grown else- where-mostly on farms in Costa Rica-they are roasted at New Harvest's facility in Rhode Island, where the company is based. "Freshness is a huge factor" in a good cup of coffee, says Kleinfeldt. "Once it's roasted, it's good for about two to twelve days, which is a good incentive to buy local." Buying local is exactly what retailers and coffee shops like Blue State Coffee do, creating a collaborative relationship with New Harvest. Alex Payson, COO of Blue State Coffee-a thriving shop in Rhode Island-observes that most of his customers live within a five or ten-minute walk from his business. Blue State customers are educated about the coffee they drink. "They want to know," says Payson smiling. "We connect with our coffee farmers. Our customers ask about the story behind our coffee," including farming practices and working conditions. Payson and his colleagues from New Harvest have traveled together to some of the coffee farms in Costa Rica that grow the beans they purchase. In fact, loyal customers can view the progress of trips like this on New Harvest's Facebook page. Relationships with companies like Blue State Coffee as well as with consumers are the basis for New Harvest's growth as a business. "We need strategic alliances," says RikKleinfeldt. "Blue State is a great example of that. "They buy into what we're doing and we support what they are doing. They collaborate with us-what's good for Blue State is also good for New Harvest." Blue State educates its customers and employees about the benefits of buying from a local firm like New Harvest, which in turn works with certified organic, free trade growers. When Blue State's workers are able to discuss their products knowledgeably with customers-including where and how they are grown, harvested and roasted-a relationship is developed. Sharing activities, comments, news, and anecdotes with customers, retailers, and coffee shops through social media such as Facebook and Twitter allows New Harvest to broaden its base without spending more dollars on marketing and advertising. These connections also put a personal face on the company and allow New Harvest to gain important knowledge about the views and preferences of its customers. In addition, they provide valuable opportunities to showcase some of the company's work in the community as well as its support for organizations such as the Rainforest Alliance and New England GreenStart. "Our mission is to be the leader in our region in developing the palate and expectations of coffee drinkers, in order to create a permanent market for the coffee produced by passionate and skilled growers," states the New Harvest Web site. For RikKleinfeldt's company and customers, coffee is much more than a hot cup of joe in the morning. Coffee-organically grown, freshly roasted, and served locally-represents a sustainable way to do business.
Visit New Harvest's Facebook page. Note specific examples of the ways in which the firm is using social media to manage its relationships.

Question 29

Characteristics of U.S. workforce. Visit the Web site listed below. It is the home page for the Statistical Abstract of the United States. Published annually by the U.S. Census Bureau, the Statistical Abstract is a good source of basic demographic and economic data. Click on "Labor Force, Employment, and Earnings." Use the relevant data tables to prepare a brief profile of the U.S. workforce ( gender, age, educational level, and so forth). How is this profile expected to change over the next 10 to 20 years? http://www.census.gov/compendia/statab/
Note: Internet Web addresses change frequently. If you don't find the exact sites listed, you may need to access the organization's home page and search from there or use a search engine such as Bing or Google

Question 30

Case 1.3 New Harvest Coffee Roasters Brews up fresh Business: If you're one of those people for whom the scent of freshly roasted coffee is irresistible, you have something in common with RikKleinfeldt. Kleinfeldt, the co-founder and president of New Harvest Coffee Roasters, is a self-proclaimed coffee fanatic. He dwells on the aroma and flavor of coffee. He measures the freshness of roasted coffee in hours and days, instead of weeks and months. Kleinfeldt started New Harvest Coffee Roasters ten years ago as a way to pay homage to fresh coffee and build a business around it. Kleinfeldt observes Starbucks' tremendous success at creating gathering places for people to enjoy coffee and tea-as well as baked goods-in a relaxed social atmosphere. But he also notes with humor that, although cafes and coffee bars were thriving a decade ago, these popular hang-outs "weren't really about coffee. They were about smoothies and cookies. I thought, maybe it's time to get back to basics and roast some coffee." Kleinfeldt recalls that friends and colleagues-fellow coffee fans-felt the same way. He believed that he had a basis to start a business. "We're coffee people," he explains. "There is a like-minded group of people." Kleinfeldt also points out that the movement toward locally grown or produced foods has been a big help in establishing and building support for his business. "The idea of local coffee starts with the local roaster," he explains. Although the coffee beans themselves are grown else- where-mostly on farms in Costa Rica-they are roasted at New Harvest's facility in Rhode Island, where the company is based. "Freshness is a huge factor" in a good cup of coffee, says Kleinfeldt. "Once it's roasted, it's good for about two to twelve days, which is a good incentive to buy local." Buying local is exactly what retailers and coffee shops like Blue State Coffee do, creating a collaborative relationship with New Harvest. Alex Payson, COO of Blue State Coffee-a thriving shop in Rhode Island-observes that most of his customers live within a five or ten-minute walk from his business. Blue State customers are educated about the coffee they drink. "They want to know," says Payson smiling. "We connect with our coffee farmers. Our customers ask about the story behind our coffee," including farming practices and working conditions. Payson and his colleagues from New Harvest have traveled together to some of the coffee farms in Costa Rica that grow the beans they purchase. In fact, loyal customers can view the progress of trips like this on New Harvest's Facebook page. Relationships with companies like Blue State Coffee as well as with consumers are the basis for New Harvest's growth as a business. "We need strategic alliances," says RikKleinfeldt. "Blue State is a great example of that. "They buy into what we're doing and we support what they are doing. They collaborate with us-what's good for Blue State is also good for New Harvest." Blue State educates its customers and employees about the benefits of buying from a local firm like New Harvest, which in turn works with certified organic, free trade growers. When Blue State's workers are able to discuss their products knowledgeably with customers-including where and how they are grown, harvested and roasted-a relationship is developed. Sharing activities, comments, news, and anecdotes with customers, retailers, and coffee shops through social media such as Facebook and Twitter allows New Harvest to broaden its base without spending more dollars on marketing and advertising. These connections also put a personal face on the company and allow New Harvest to gain important knowledge about the views and preferences of its customers. In addition, they provide valuable opportunities to showcase some of the company's work in the community as well as its support for organizations such as the Rainforest Alliance and New England GreenStart. "Our mission is to be the leader in our region in developing the palate and expectations of coffee drinkers, in order to create a permanent market for the coffee produced by passionate and skilled growers," states the New Harvest Web site. For RikKleinfeldt's company and customers, coffee is much more than a hot cup of joe in the morning. Coffee-organically grown, freshly roasted, and served locally-represents a sustainable way to do business.
RikKleinfeldt notes the importance of strategic alliances with firms like Blue State Coffee. Describe how you think New Harvest benefits from alliances with not-for-profit organizations such as Rainforest Alliance, New England GreenStart, and Rhode Island PBS.

Question 31

This chapter describes how the nature of the workforce is changing: the population is aging, the labor pool is shrinking, the workforce is becoming more diverse, the nature of work is changing, the workplace is becoming more flexible and mobile, and employers are fostering innovation and collaboration among their employees. Form teams of two to three students. Select a company and research how that company is responding to changes in the workforce. When you have completed your research, be prepared to present it to your class. Choose one of the following companies or select your own: State Farm Insurance, Archer Daniels Midland, 3M, Marriott, or Dell.

Question 32

Case 1.3 New Harvest Coffee Roasters Brews up fresh Business: If you're one of those people for whom the scent of freshly roasted coffee is irresistible, you have something in common with RikKleinfeldt. Kleinfeldt, the co-founder and president of New Harvest Coffee Roasters, is a self-proclaimed coffee fanatic. He dwells on the aroma and flavor of coffee. He measures the freshness of roasted coffee in hours and days, instead of weeks and months. Kleinfeldt started New Harvest Coffee Roasters ten years ago as a way to pay homage to fresh coffee and build a business around it. Kleinfeldt observes Starbucks' tremendous success at creating gathering places for people to enjoy coffee and tea-as well as baked goods-in a relaxed social atmosphere. But he also notes with humor that, although cafes and coffee bars were thriving a decade ago, these popular hang-outs "weren't really about coffee. They were about smoothies and cookies. I thought, maybe it's time to get back to basics and roast some coffee." Kleinfeldt recalls that friends and colleagues-fellow coffee fans-felt the same way. He believed that he had a basis to start a business. "We're coffee people," he explains. "There is a like-minded group of people." Kleinfeldt also points out that the movement toward locally grown or produced foods has been a big help in establishing and building support for his business. "The idea of local coffee starts with the local roaster," he explains. Although the coffee beans themselves are grown else- where-mostly on farms in Costa Rica-they are roasted at New Harvest's facility in Rhode Island, where the company is based. "Freshness is a huge factor" in a good cup of coffee, says Kleinfeldt. "Once it's roasted, it's good for about two to twelve days, which is a good incentive to buy local." Buying local is exactly what retailers and coffee shops like Blue State Coffee do, creating a collaborative relationship with New Harvest. Alex Payson, COO of Blue State Coffee-a thriving shop in Rhode Island-observes that most of his customers live within a five or ten-minute walk from his business. Blue State customers are educated about the coffee they drink. "They want to know," says Payson smiling. "We connect with our coffee farmers. Our customers ask about the story behind our coffee," including farming practices and working conditions. Payson and his colleagues from New Harvest have traveled together to some of the coffee farms in Costa Rica that grow the beans they purchase. In fact, loyal customers can view the progress of trips like this on New Harvest's Facebook page. Relationships with companies like Blue State Coffee as well as with consumers are the basis for New Harvest's growth as a business. "We need strategic alliances," says RikKleinfeldt. "Blue State is a great example of that. "They buy into what we're doing and we support what they are doing. They collaborate with us-what's good for Blue State is also good for New Harvest." Blue State educates its customers and employees about the benefits of buying from a local firm like New Harvest, which in turn works with certified organic, free trade growers. When Blue State's workers are able to discuss their products knowledgeably with customers-including where and how they are grown, harvested and roasted-a relationship is developed. Sharing activities, comments, news, and anecdotes with customers, retailers, and coffee shops through social media such as Facebook and Twitter allows New Harvest to broaden its base without spending more dollars on marketing and advertising. These connections also put a personal face on the company and allow New Harvest to gain important knowledge about the views and preferences of its customers. In addition, they provide valuable opportunities to showcase some of the company's work in the community as well as its support for organizations such as the Rainforest Alliance and New England GreenStart. "Our mission is to be the leader in our region in developing the palate and expectations of coffee drinkers, in order to create a permanent market for the coffee produced by passionate and skilled growers," states the New Harvest Web site. For RikKleinfeldt's company and customers, coffee is much more than a hot cup of joe in the morning. Coffee-organically grown, freshly roasted, and served locally-represents a sustainable way to do business.
New Harvest builds much of its reputation on its efforts toward environmental sustainability. How does this reputation affect its relationship with consumers?