... and You Thought Wal-Mart was Already an Unstoppable Giant?

Recently, I've been hearing a lot about Wal-Mart venturing into new areas of business. I found this pretty surprising since I figured that Wal-Mart pretty much already had its hands in everything. But, Wal-Mart has managed to find a new target category: digital entertainment. More specifically, I was reading about Wal-Mart's acquisition of the VUDU digital media service in the article "Wal-Mart Picks Up Digital VUDU". I hadn't heard of the VUDU service previously, however it apparently is somewhat similar to Netflix, selling and renting digital movies on through the internet directly to specific web-enabled devices such as Blu-ray players and LG televisions.

Well, maybe its not THAT surprising. After all, I do recall a group presentation in one of my other MBA classes last semester which focused on Wal-Mart's entertainment media strategy. Apparently Wal-Mart has been phasing out DVD and Blu-Ray movie sales for quite some time. In fact, the firm has been moving toward selling only popular new release titles. Along with that, Wal-Mart has also been pushing for more Red Box kiosks in its stores. The firm actualyl makes more on its Red Box rentals than it does through traditional media sales; not to mention the extra floor space in each store. Perhaps then the move to digital media is really the next logical step.

Of course, Wal-Mart has been fiercely competing with internet wholesalers such as Amazon. One of the most recent battles between the two firms came in the form of the '$10 bestsellers list books'. With the acquisition of VUDU, perhaps Wal-Mart is targeting digital video sales before Amazon makes a similar move. Personally, I think this is a major oversight on Amazon's part as it obviously has the infrastructure to implement a service such as VUDU seemingly much more easily than Wal-Mart.

Beyond Amazon, the article also suggests that Wal-Mart is reaching even further to compete with Netflix and even Apple in the realm of digital media distribution. This certainly seems a daunting task as both of these firms are proven industry leaders in categories with which Wal-Mart has little or no experience at all. Finally, the article does briefly mention that there is at least some resistance to Wal-Mart's never-ending spread. Best Buy is now partnering with Netflix to sell digital media through its retail outlets and through the devices it sells.

This will certainly be a hot topic for discussion in the future as these developments unfold. Will Wal-Mart take over all digital media as we know it? I hope not, but I don't doubt it!

Team Building

We talked about team building quite a bit in our last class, and like some of my fellow classmates, I too have very little experience with team building exercises. In fact, the closest I would say that I've really come to participating in this type of activity would be in putting together and motivating teams as a business development counselor. In this role, I was a project manager charged with making sure the overall project met its various deadlines. This could mean licensing, obtaining permits, obtaining funding, writing plans, etc. The real challenge here though was never delegating responsibility; that part was usually pretty obvious as each team member was brought on to the project because he or she specialized in a specific aspect of the project. The challenge was setting timeframe goals for these projects and finding ways to motivate the many team members to strive to meet these goals.

One example that really comes to mind when I think of teambuilding has to with an urgent-care medical center which I was helping an entrepreneur to establish. The overall team for the project invloved the entrepreneur, building engineers, bankers, medical association representatives, marketers, and myself as a consultant. I found it extremely difficult from the onset of this project to coordinate the efforts of all of the parties involved. In truth, the team really had no sense of direction as each person had his idea of what was most important and how it should be done.

I eventually came to the conclusion that the entrepreneur would have to assume a leadership role in order to properly motivate the rest of the team. After all, it was ultimately his business in question, he just didn't know where to begin. I helped him setup and actually write down specific goals for each inidivdual to complete by a given date. Beyond that, I found that the best way to accomplish these goals was always to promote inter-reliance among team members. To accomplish this. we formed two separate 'subcommittees' . This was nothing official, but it meant that people on the business end (marketers, bankers, counselors) could collaborate and focus on business-related objectives without wasting the time of the others in the group. Likewise the engineers, medical association reps, and the entrepreneur (he was a doctor) could focus on the medical-related issues together. These 'subcommittees' really turned out to work quite well as the two smaller groups worked much more efficiently and the individuals within them were able to communicate much more effectively.

By the time our next monthly meeting came around, everyone had a great deal of progress to report. No longer did our meetings consist of one part of the team reporting results and passing the work onto the next team member.

Russia's Attempts to Legitimize its Internet

This week, I chose to look at the article "To fight scammers, Russia cracks down on .ru domain". I think this topic is very relevant to our class discussion with Gretchen Klebasko of Legg Mason (yes, I dropped her name again!) about the future of second-level domain sales. Additionally, I just finished a project for International Management which focused on intellectual property theft from countries such as Russia.

In the past, Russia has always been regarded as a hotbed for piracy. In my research for my project, i was astounded to find out that the Office of the United States Trade Representative specifically singled-out Russian websites as a major international concern for intellectual property theft in 2009. In fact, Russia is one of very few countries listed on the USTR's Priority Watch list (those countries which are unsafe for trade). Furthermore, one of the key parts to my research had to do with Russian websites serving as an incredibly massive black market for illegal trade copyrighted works. Apparently, these websites were so fraudulent, that many were in the business of openly selling pirated works and sending them around the world. Interestingly, this type of internet mail-order piracy is unique to Russia. Even in China, pirated works are largely exchanged in person or in a brick-and-mortar or street vendor format.

After reading this article, it definitely seems that Russia is finally taking a significant stance against piracy, probably because the U.S. did include Russia on its priority watch list only recently. According to the article, " anyone who registers a .ru domain will need to provide a copy of their passport or, for businesses, legal registration papers. Right now, domains can be set up with no verification -- a practice that has allowed scammers to quickly set up .ru domains under bogus names". In fact, it is estimated that only 23 percent of current domain database records in Russia are accurate.

Personally, I don't see how the Russian government can possibly plan to tackle this issue effectively. The level of corruption in Russia's internet domains is astounding, and I'm certain that the already well-established criminal operations will undoubtedly resist these initiatives; probably with a great deal of success. Perhaps there is significant pressure from the U.S. and other free trade nations to crack down on piracy, or perhaps the Russian government would like to actually transform Russia into a safe country with which to trade. Only time will tell, but for now I think I'll steer clear of .ru websites.

Implementing Disruptive Technologies

In helping new and prospective business owners and entrepreneurs, I think the Small Business Development Center could have really been a far more effective organization had we implemented some of the disruptive technologies discussed in class. Since we have to pick one, I will discuss the advantages already seen and possible future advantages to be gained through the implementation of cloud computing technologies. In fact, I'd almost go so far as to say that the SBDC needs cloud computing in order to survive.

The national network of SBDC's is really made up of individual economic development entities in nearly every county in the country. In the past, each office maintained an extremely small IT department; usually consisting of only one or two individuals. These individuals would then be responsible for coordinating common office technologies and communications.

During my time there, I noticed many problems and inefficiencies in this system. The underlying issue was twofold: the true power of each local office to assist its clients comes from its ability to utilize its massive national resource network; additionally each SBDC office is technically some sort of entity/arm of its local government. This meant that the few systems connecting these offices were hardly homogenous, and often greatly hindered communication. Furthermore, there was no easy way to implement a homogenous network with a dedicated universal support staff as each SBDC is funded separately.

Cloud computing really seems to be the only solution to this problem. In fact, the only real homogenous system currently in place on a national level is the client database. By moving as much IT as possible to the cloud, the SBDC could finally become a homogenous organization. A good example of this has to do with government contracting. Government contractors represented a major segment of Maryland's SBDC clients. In many situations, these contractors either need to coordinate with contractors in other states or at least need to apply for various requirements in other jurisdictions. Currently, this means that each office must prepare a mountain of paperwork describing the specific needs of the contractor, and send it to the SBDC in the other jurisdiction where the research is basically repeated. This cycle of inefficiency often continues for several days or even weeks. Moving each office's local resources to a cloud-based system would centralize and standardize all of this information, making it equally accessible from any office.

Additionally, these offices could benefit from a cloud-based email service. Since each office is a branch of local government, the email addresses for individuals working at different offices are vastly different; often to the point that new contacts from other national offices are often blocked by spam blockers. Having a cloud-based email and/or other communication system would improve communications tremendously.

Finally, and probably most importantly, cloud-based systems are financially feasible for this organization. Each office would simply have to allocate part of its budget to 'buy-in' to the system. This would eliminate the red tape currently imposed by differing local governments.

My Never-ending Jet Ski Project

I spent the week following the Chile ‘almost’ trip at my mother’s summer house in the Outer Banks. When I arrived there, I opened the garage door, and was immediately confronted with my arch nemesis of the last several years; my piece of junk jet ski.

Ten years ago, a friend of the family was upgrading his 45 foot yacht to 65 foot model, and no longer had room for his jet ski. In an act of ‘generosity’, he offered the jet ski to me for no charge, the only issue was that it wouldn’t exactly start. The ski was only four years old at the time, a ’96 Polaris SL780, and it was barely even broken in. Since I was working at a motorcycle dealership at the time, I figured that I wouldn’t have much trouble in obtaining parts and/or service advice from qualified mechanics, so I took it.

From there, I purchased a service manual and immediately began to tear into the ski, trying to locate the source of the starting issue. Everything looked new and seemed to be functioning properly, but the engine just wouldn’t turn over. At this point, I assumed that the engine must have been seized, so I decided to disassemble the motor. Of course, I found nothing out of place or broken at all, however I saw this as a major accomplishment as it was the first time I had rebuilt any engine.

Eventually, after a great deal of trial and error, I realized that the previous owner had run over a rope with the ski, and the small piece rope was jamming the entire drive train. Okay, so I found the problem, and I actually found a great deal on a high-performance replacement drive system from one of our watercraft distributors. I installed the new drive system eventually, after countless minor setbacks, and actually got the ski to run (on a trailer, in my driveway).

It was a couple more years before I actually tried to put the ski in the water and take it for a ride. I remember that first day I put it in the water, the anticipation was insane. I started it, made it to the end of the marina, hit the gas and it stopped dead in the water. I had to swim it back in; carburetor problems. I was pretty fed up at this point and parked the ski In the garage for another year, until last summer. By then, I was committed to success. I rebuilt all the carburetors myself, replaced all the fuel lines, cleaned out the gas tank, and actually had the ski running well by August ‘09 (in the driveway, on the trailer, of course).

I finally dropped the ski in the water… success! It screamed across the water at 60 mph. I ran it for 10 minutes, and brought it back in as I had to go to work. The next day, I was off work and extremely excited. I took the ski out for the afternoon. After a half hour or so, the ski shut off. Then it sank to the bottom of the bay. I had to have it towed all the way back, and once I got it on the trailer, it drained water for several miles back to my house. I knew it was done for, and I left it in the garage.

So, I got back from my ‘almost’ trip to Chile over spring break, opened up the garage, and there it sat, mocking me. It actually made me laugh, and I ended up taking it all apart again. I’m currently rebuilding the carburetors again, and I’m determined to have it running, and floating, by June. Wish me luck.

IT Issues on the Chile Trip that Never Was

As most of you already know, Loyola’s sixth annual MBA study tour to Chile was cancelled due to the massive earthquake last week. Kim and I were both on this trip along with twenty-six other students and two professors. We actually almost made it to Chile; we were roughly three hours from landing in Santiago (we were over Ecuador when the plane turned around) when the earthquake struck, ending our study tour before it began. Since we underwent such an immense deal of preparation, and came so close to going, I thought I would talk about some of the IT-related issues I saw on our ‘almost’ trip.

We first found out about the earthquake at 3:30am ET, when the pilot woke all the passengers, announcing that we couldn’t lant in Chile because the airport was no longer functional. The runway and control tower had been damaged due to a “significant earthquake” according to the pilot. At this point, I realized how reliant on information technology we really were in that isolated Boeing 767 over South America. Thankfully, the vast communication networks in place not only alerted our airline of the disaster nearly immediately, but also allowed the airline and pilot to determine the best airport at which we could land, as the plane was running low on fuel. Fortunately, the combination of on-board IT which was monitoring our geographic position as well as our fuel consumption, in conjunction with the many air-traffic control measures in the U.S. and abroad, allowed the pilot to safely return the plane to Miami. There was very little time to make this vital decision, which was obviously facilitated by an incredibly extensive IT infrastructure.

Once we landed in Miami, many of the passengers on board the flight, namely our instructors and the native Chileans trying to fly home, were desperately trying to communicate with loved ones and friends in Chile. At this point, it became apparent the cell phones and landline phones were both completely nonfunctional in Chile’s major cities. In fact, the only communication devices which appeared to be working were Blackberry phones. The feeling of not being able to communicate was tremendously humbling. Suddenly I became quite apparent that even a relatively less technologically advanced area such as Chile still had a massive investment and reliance on information technology for everyday living.

In the end, I think it was the moments in which we expected IT systems to facilitate processes, and the technology wasn’t available, which I remember the most. There were many of these on this trip due to the sudden unpredictability of the situation, but the one that stands out the most occurred in the Miami airport. There, we were re-boarding the airplane, heading back to Dallas. Since this was an unplanned trip, the airline had no way to scan our tickets to let us back on the airplane. Instead, the employees had to manually check each of our previous tickets and identification before boarding. This simple task seemed to take forever, and it was all caused by the lack of a simple IT system which we all take for granted on a daily basis.

Guest Speaker Gretchen Klebasko

In our last class session, Gretchen Klebasko came to speak about what she does at Legg Mason. Gretchen heads the intellectual property team at Legg Mason. I truly enjoyed our discussion as we had the opportunity to see more of the legal side of Legg Mason’s operations as opposed to strictly the business and marketing which we so often study as MBA students. Additionally, I personally took a great deal of interest in this discussion as so much of my professional background has been based in various forms intellectual property development and protection. There are a few points which Gretchen made on which I would like to comment.

First, I thought it was incredibly interesting to learn more about the steps that Legg Mason takes to conduct business and serve its customers while monitoring and/or limiting the divulgence of proprietary information and other various forms of sensitive information. As is the case with most modern organizations, this means monitoring the actions of employees in the digital world through social networking websites such as LinkedIn and Facebook. According to Gretchen , Legg Mason truly goes to great efforts to watch its employee’s actions on these websites. This really made me think about the level of exposure we assume when we use these social networking sites. It’s not that I think that companies shouldn’t be able to look at what its employees are posting on the internet; of course they should. Instead, I’m questioning why we feel so compelled to share such intimate details of our personal or work lives with others on social networking sites when most of us would never share industry secrets other sensitive work-related information with other firms directly. So, perhaps the real goal of Legg Mason and other really any other firm which has similar sensitive information should be to foster a culture which is uncomfortable with actively using and posting to these sites.

I also found it incredibly interesting that Legg Mason has individuals, such as the one Gretchen spoke of in Texas, whom actively try maliciously pursue a firm as large as Legg Mason. Incredibly, it seems this individual was most harmful when he didn’t get his way and he began posting harmful information about Legg Mason on the Legg Mason Wikipedia page. Unfortunately, firms today must take an extremely active role in combating mere individuals in the ever-expanding space that is the internet.

Finally, Gretchen spoke about the importance of being multilingual. In all of my positions, there have always been situations in which I wished I could speak another language. Especially in intellectual property, where interpreting trademark and patent laws and precedents abroad is of paramount importance, being multilingual is truly a vital asset. Since Gretchen’s visit, I have decided to begin learning Spanish as a first step.