Jim Koch and his book “Quench Your Own Thirst”

This is a response to Victor Chen’s post to:

http://www.cbc.ca/news/business/sam-adams-jim-kock-craft-beer-1.3778969

https://blogs.ubc.ca/victorchen/

Jim Koch, CEO of Samuel Adams brewery company, grew his business from only his family’s beer recipe dating back to the 1860s.  Koch’s father gave him one piece of advice: to make a good beer.  Inspired by his father’s words, Koch built a strong foundation through the quality of his beer.  Since the 1980s, he has constantly been improving his products.  He would meet with his customers to share a drink, receive feedback, and connect on a personal level.  Koch believes that “It’s about how what you’re offering will help them accomplish their, [the consumer’s], objectives”.  By satisfying the customer’s need it builds a connection between them and the company, leading to more sales, and finally leading to the creation of a company.  Over 32 years, Koch focused on his product’s value stemming from consumer wants, he has grown his small beer brewery into a company worth $2.2 billion USD.

While reading about Jim Koch’s successful Beer Brewing company, Victor Chen noticed similarities between Koch’s and Michael Dell’s strategy to run a successful company.  Victor mentioned Koch also followed value propositions like Dell and many companies at that time.  However, Koch as well as Dell decided to go the extra mile and directly address the customers wants and the value the customers were receiving from their products.  I agree with Victor’s observation of Koch and Dell’s high focus on value proposition and customer relations.  Both would outsource to other producers to manufacture their products in order to focus harder on developing a strong producer-consumer relationship.  Koch promotes a “Eff-You” rule where anyone in the company can stop a conversation to speak up about their opinion; with the rule applied to Koch himself as well.

I believe Koch’s business model he laid down as a foundation is extremely powerful and set itself up for continuous success and growth.  I agree that the quality and taste of the beer should be prioritized because the customer drinks the beer for how well it tasted, not for how well it was advertised.  A satisfied customer can spark the word of mouth cycle to bring in more customers.  With brand loyalty, customers will have repeat purchases and will bring in potential customers, it gives the company more exposure and space to grow.  The theory that a business should cater its products and services to what the consumer wants, is how many companies, like Samuel Adams, grow to such a grand scale.

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Articles:

https://hbr.org/1998/03/the-power-of-virtual-integration-an-interview-with-dell-computers-michael-dell

http://www.notablebiographies.com/newsmakers2/2004-Di-Ko/Koch-Jim.html

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This is a response to Kamil Kulewski’s post to:

http://www.huffingtonpost.ca/2016/09/26/shomi-shut-down_n_12202070.html

https://blogs.ubc.ca/kamilkulewski/

Kamil Kulewski discusses the factors that lead to Shomi’s, Rogers Communications Inc. and Shaw Communications Inc.’s video and movie streaming service for existing users, downfall.  One major reason for Shomi’s closing was because of the inclusiveness to only Rogers and Shaw customers.  The decision to limit their target market had put them in a disadvantage.  With a narrower range of customers, Shomi lost its potential to grow and capture customer loyalty.  When Shomi decided to open their service to all Canadians, it was a little too late – Netflix had already established a strong presence in the Canadian market.

Towards the end of the article, Kamil mentioned that with Shomi out of the picture, Bell’s CraveTV can square off against Netflix Canada.  Although, Shomi’s departure from the market has created space for CraveTV to expand, I believe that they have little chance against the continuously growing monopoly.  When Shomi announced they were closing down, they had less than 700,000 users while Netflix had a whopping 5.2 million subscribers.

Though there are many points of parity between Netflix, Shomi, and CraveTV, all providing online movie and video streaming, Netflix clearly stands out above the other two.  Netflix uses a freemium business model to reel in new customers.  Their free one-month trial allows the user to experience different special features – points of parity.  Not only does Netflix offer movies, television shows, and foreign films; they will deliver DVDs and Blu-rays right to your door step.  Their DVDs and Blu-rays include behind the scenes, director’s comments, and interviews.  Although I am not a current Netflix user, their intuitive recommendation algorithm catches my attention.  The system will suggest movies and shows based off of my preferences and previous ratings I gave to make sure I do not miss any shows.  These key features will draw me in at lightning speed.  Netflix continues to gain control of the Canadian market as more users are captivated by their service and many features.

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Articles:

https://www.bloomberg.com/news/articles/2016-09-26/netflix-dominating-in-canada-as-rogers-shaw-shut-down-shomi

http://www.elementsofcinema.com/general/netflix.html

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Mario and Shigeru Miyamoto

For decades Mario, your favorite Italian plumber, has played a major role for Nintendo and entertainment for millions around the world.  With Nintendo’s hardware sales dropping from 100 million in the first five years to only 13 million in the past five, Nintendo’s most popular game creator, Shigeru Miayamoto, refused to go into the mobile games market.  Miyamoto was afraid of the use of their characters by third-party developers would dilute the characters’ value.  He was also against taking advantage of families, the addictiveness of Nintendo’s products, and the “freemium” revenue model for mobile games.  The “freemium” revenue model allows a free trial period for consumers with in-app purchases for in-game items or more levels to play.

Nintendo realized that they were missing out on a generation of potential consumers and gamers, losing billions of yens according to games consultant Serkan Toto.  Just last month, Miyamoto announced the company’s first Mario mobile game to follow up Pokemon Go’s success of 500 million downloads in only two months within its release date.   After the announcement Nintendo’s shares skyrocketed up by 38% since January 2016.  Nintendo hopes to reel in potential and new fans through the mobile games –hoping to increase their hardware sales, which makes 50% – 60% of their yearly revenue.

The question is, “what makes Nintendo’s games so addictive?”  The answer lies in their strategy.  Nintendo has used the differentiation strategy since the creation of Mario and future game titles.  However, their games do not necessarily have unique attributes from other game developers.  Their games uniqueness lies in the Nintendo’s intellectual property.  Their unique characters that many children, teens, and young adults whom have built their childhood with draws them back in when new products like Pokemon Go.  Pokemon and Mario will not be the only characters planted easily accessible phones and tablets of millions – Nintendo has plans to bring five more free-to-play mobile-games by next year, including well known titles Fire Emblem and Animal Crossing.  Nintendo’s decision to move to the mobile platform focuses on the sentimental and reminiscent aspect for past fans and makes space for potential fans to join the Nintendo family.

Word Count: 356

Articles:

http://www.economist.com/news/business/21707949-giant-console-industry-has-lost-generation-gamers-smartphones-can-it-reclaim

http://www.channelnewsasia.com/news/technology/at-gamers-meet-in-tokyo-absent-nintendo-is-talk-of-the-town/3132774.html

http://www.quickmba.com/strategy/generic.shtml

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