Geek Squad vs. Best Buy

The misalignment I have experienced was when I worked at Best Buy’s Geek Squad during its beginning to middle stages. The Geek Squad motto is; “serving the public, policing technology, and protecting the world.” According to the Geek Squad’s motto, it’s primary purpose is to service the customer and provide technology solutions that the customer needs or wants. However, the Best Buy sales associates goal is to upsell a customer on accessories because accessories drive higher margin.

As a computer technician at Geek Squad, I didn’t feel like, nor did I want to be a salesman. However, as the Geek Squad become more assimilated into Best Buy, the one thing that mattered was sales. My manager desired upselling of services or accessories that the customer would not necessarily gain the most benefit from. I was pretty much barred from doing a simple fix for free (something that was common-place in the past to provide a good service). I determined that I could not best serve the customer and serve Best Buy’s thirst for margin at the same time. As a result, the entire talented technical staff (which included me for those of you that are concerned) left the company.

I feel that the direct result of the misalignments between the Geek Squad and Best Buy resulted in a less-talented staff, and a loss of customer loyalty. This not only inhibits Geek Squad from fulfilling its motto, but it also hurts Best Buy’s future ability to sell to trusting customers

Microsoft Zune and the Hedgehog

This weeks focus is on Microsoft's Zune portable media player (reffered to in this blog as "the Zune player". To sum up the recent news; Microsoft announced on the Zune website that the Zune player will no longer be produced. This announcement arrived after 2 years of no hardware refreshes to the platform; so the announcement is not unexpected. This official statement was then retracted with the excuse that the web page hosting the statement was put up in error. Microsoft intends to continue on with the Zune to appease the customers who are happy w/ their current phones, but would still like to access the features of Xbox Live or simply have a Microsoft product.

With this latest news, I now will turn attention to the Hedgehog concept as taught by Jim Collins in Good to Great. I would be amiss to not talk mainly about the concept that strikes me as most obvious; "understanding what you can (and cannot) be the best at". I find it safe to say that the Zune player has never been at the top of the mobile media player market. Although Microsoft is a very serious player in the technology market and can afford to take a loss for many years in a certain area, it doesn't seem like the company is even putting forth the effort to compete in the market at all. Perhaps there are unknown variables hidden behind the Microsoft veil but only time will tell. So far, time has confirmed that Microsoft cannot be the best in the world in the mobile media player market.

However... the Hedgehog concept doesn't focus on if you ARE the best, have the intention to be the best, or even a plan to be the best. Instead, it's an understanding of what you can be the best at. The question then arises; can Microsoft be the best in the mobile media player market? They certainly have the resources to do so, but it seems that they are not deeply passionate about doing so (another Hedgehog concept).

My final thought to Microsoft: Decide if you can be the best with the Zune player and figure out if you are passionate about being so. If not, put back up your original discontinuance statement and focus on the Windows Phone 7.

Netflix

I wish to make a few comments regarding the recent Netflix news flurry surrounding the recent changes. So the latest is that Netflix is separating the streaming and DVD offerings. From what I've read and understood, the main reason for this is to allow for Netflix to continue offering a great service at a more sustainable price. The contracts that Netflix must negotiate to gain rights to make content available requires a lot of money and pressure has been put on Netflix to act.

There is a lot of user hype around the decision to raise prices and separate the physical and streaming content. I believe this is just a temporary thing because people don't like change that negatively affects them in the short-run.

I believe Netflix has actually made a smart move to put their business in separate profit pools; namely streaming and DVD sales. It has allowed them to target the people that want just streaming, just dvds, or both. They will then be able to push deals for each market separately. In addition, they have introduced video games in to the mix. This provides competition with GameShark, an existing game-rental service currently popular. I believe this growth and division will allow Netflix to better find where the profit pools are and more aggressively negotiate with the entertainment industry to push for better content.

Strategy Journal: Entry 1

I recently read a few articles relating to a new product by MusicLite that introduces high-fidelity speakers into light bulbs. The core concept is that a signal will transmit wireless'ly to a receiver in a light bulb (when turned on) and music will play from the ceiling.

I've thought about this angle on music as it relates to the 5 forces. My thoughts on the 5 forces are listed below:

1. Threat of new entry from competitors: Entry into this arena seems actually quite easy. Once an engineer gets his/her hands on the device, it will be pretty easy to duplicate it.
2. Threat of substitute products/services: Coupled with the first force above, substitutes are definitely going to happen. I do think that the quality of sound may drop with the knock-off products though, as is usually the case.
3. Bargaining power of customers (buyers): No bargaining power that I can foresee
4. Bargaining power of suppliers: I also believe there is little bargaining power for the suppliers of the musical bulb as it's very new and targets a niche market. However, due to the fact that Artison and Osram Sylvania are leaders in their respective markets may provide some bargaining power.
5. Intensity of competitive rivalry: Aside from rip-offs, I don't think there will be high competition. Due to the niche of the music market that has been targeted, there is not a high demand in the arena yet and so a desire for another company to get into it would be far-fetched I believe

Overall, I like the idea that MusicLite has produced but the high price and limited range could make it a less-desirable solution for music enthusiasts.