[#54] Gen Z Is The Future

Everyone is tired of hearing about millennials, particularly the millennials themselves. Every article you read or conference keynote you hear, the word millennials is either over-used or over-generalised. How to manage Millennials in the workplace? What are the consumer expectations of the Millennial Generation? What do Millennials want from life? All valid questions to ensure your business survives into the future, would it not be for the fact that the future (and your success) does not belong to them. That is the present.

The future belongs to Generation Z.

Ever since we labelled the post baby-boomers Gen X, we got lazy in terms of naming the generations that followed. Gen Y (millennials) followed Gen X, and true to form, those born after 1995-2000 are commonly referred to as Gen Z. We have officially run out of alphabet.

May I suggest to all fellow Gen X’ers that you play It’s the End of the World as you Know It LOUD for the remainder of reading this blog?

The reason I mention it is that it has a great and appropriate title, namely “It’s the End of the World as We Know it (And I Feel Fine)”. Generation Z will become the largest consumer group in the US and Europe by 2020. 40% of all the population. Oh Yes. And that’s only 2 years away. Be prepared for the end of how you do business (and do you still ‘feel fine’?)

So, if the future belongs to this Generation Z, don’t you think we should shift our focus to this future? The millennials might be driving the car, but the road ahead is very much Gen Z. Businesses that leverage the nuanced differences of this next generation will succeed and reap the benefits. Businesses that don’t, well, it will certainly be the end of ‘their world’. So, let’s take a look at some of the key learnings we can take from Gen Z thus far.

1. Instant is A Given 🚣‍♀️

Staying with the music analogies, perhaps Freddie Mercury was thinking about the future Gen Z when he sang “I Want It All and I Want it NOW”. It certainly is an excellent way of summing up their desires. You have to remember that the millennial generation grew up around technology, but still understand what ‘buffering’ is. They remember ‘waiting’ for downloads and connections. Gen Z don’t. To them, buffering is something a janitor does to a tiled floor. This is a Generation for whom Instant is the only acceptable answer. Google and Amazon were born before this generation.

They have grown up knowing instant, knowing immediate, knowing now.

Some have misunderstood this demand for NOW as meaning that this generation will be self-centered. That is wrong. This consumer group is simply hard-wired for everything to work seamlessly. While ‘Frictionless’ may have added value to Gen Y, it is simply a hygiene factor for Generation Z. Every element of your customer journey needs to be primed and ready to respond, 24-hours, 7 days. You need to predict their needs, be there and relevant when they need you to be, and meet their needs immediately.

The author heard a radio ad for Ulster Bank recently inviting younger consumers to take out a mortgage with them. Their communication was very clear. We are open late some evenings to facilitate you. We are different. Then he walked past a retail branch of theirs earlier in the week and took the following photo.

A bank that still thinks it is the 1980’s. Who closes for lunch today? For the one hour where consumers might actually have free time to leave their workplace and visit you for whatever administration task they need a branch for in the first place. And you close just then? To have a sandwich? Gen Z doesn’t mind though. They will have no time for banks anyway. They’ll have found a way around you.

2. Access v Ownership 🚣‍♀️

While millennials surfed the initial waves of the sharing economy, it will be Gen Z that will make it their own. This shift challenges much of the norms of consumerism today (namely that a producer makes something and then sells it to many, repeatedly). We are about to enter a new economic reality that is more based around ‘ACCESS TO’ as opposed to ‘OWNERSHIP OF’.

The idea of ‘consumption’ has been based primarily around individual ownership for previous generations. My house, my car, my CD collection. Tangible things that you owned, that you could touch, take with you if you moved. But in a world where Airbnb, Uber, and Spotify will give me ACCESS to those three things mentioned above, why would I want to own them? Why would I need the debt, the worries, or the responsibility related to ownership?

Gen Z is ready for this shift. They demand access to the things they need, but they don’t seem to really ever feel that inner desire to possess them as much as previous generations. The insecurities of the post-WWII Baby Boomers regarding material possessions have been fading with each new generation. We will continue to see new brands emerge giving these consumers what they want.

Look at Le Tote in the US, a clothing subscription service giving consumers a new look every month, always in-season and always on-trend. Every month you send back what you had ‘access to’ last month and receive your new ‘look’ for the next month. Who wants loads of clothes taking up space in your wardrobe permanently, half of them out of season, and more that you have only ever worn once anyway?. Gen Z will not own when they don’t have to.

3. Freedom to Be Me 🚣‍♀️

Previous generations have had to fight for real freedoms. Political, social and racial freedoms. While such struggles still exist, Gen Z are seeking new freedoms. They are the first generation to truly grow up inside the network. YouTube, Instagram, and Snapchat. Followers, Likes, and Subscribers. They are plugged in to, and the curators of, a global network. They are true believers in the ‘anything is possible’ mantra. How could they not be growing up in a world where technology continues to astound, break new molds and make the impossible possible.

The freedom they seek is about being themselves, not part of a system but the designer of their own. They want geographical freedom (to live wherever they want, to change those desires regularly and to have the freedom to do this. House ownership doesn’t fit into that so who needs a mortgage?). The author recently stayed in an Airbnb apartment let by a girl who in turn sublets. She covers her own rent (and more) by letting 2 rooms out on Airbnb. She said she wants the freedom to move when she wants to, and she can never see why should buy a place. She likes her ‘freedom’.

A desire for financial freedom also follows. Fewer possessions (house or car) means less of a financial strain and more fluidity in your life. This generation values making your own way, and may be our most entrepreneurial ever. They want new ways of working, new ways of earning money, and new ways of spending it. Brands that offer a taste of these freedoms through their ethos will appeal to Gen Z. Gen X consumers will have several jobs across their career. Gen Z is likely to have several completely different careers. They are the architects of their own freedom. For example, the pension industry has a product built around saving for 30-40 years and then cashing out at the end. That is not going to work for Gen Z. They are going to need a product that will facilitate multiple cash-out points along their lifetime. These new freedoms challenge some of the fundamentals.

4. We Own The World (My Voice is Valid) 🚣‍♀️

I love YouTube, and not just for the cat videos. It’s tag-line is the ultimate metaphor for this generation. “Broadcast Yourself”. This generation, thanks to YouTube and the network, feel they have a voice, a global one.

The author’s 10-year-old son launched his YouTube channel this month (he has 11 subscribers … he is looking for more!). His vlogs feature the usual trampoline flips, scooter stunts, fidget spinner tricks… you know, all the things 10-year-old boys do. The difference now is he shares this with the world.

I have spent some time researching all of this as I am fascinated by their motivation. It is partly standard peer positioning, something all teens and children have done in every generation. Keeping up with the gang. However, there is something different going on. The author’s son and his friends don’t just do it because they want the likes, the followers and the attention (but they do of course!). They do it because they feel they have as much to say as anybody else on YouTube. And there you have it. The Eureka moment.

Previous generations looked up to their idols, dreamt about being them. This generation not only believe they can ‘be like them’, they already feel they are. It is not a sense of entitlement they feel but a sense of ownership. This is their world and they are taking control. Their voice is as valid as everyone else’s. Their opinion counts too. They might idolise some of the more famous You Tubers, but on YouTube, everyone gets to have a say.

Now hopefully most of you can see the direct implication that that cultural shift will have on brands and business. The voice of the consumer is now as loud, if not louder, than the corporate. They expect to be listened to and conversed with like never before. This generation believes you should listen to them. Co-creation will become the norm in product development. Cooperative business models are a clear fit. Gen Z will talk and you will listen.

5. ‘We’ Not ‘Me’ 🚣‍♀️

If millennials were often blamed for being the selfie ‘me-generation’, then Gen Z are more ‘WE than ‘ME’. They are likely to be the most pluralist generation of all time. By the age of 15, they will have curated an impressive digital social network that is most often international, and less skewed by any one colour, race, creed or gender. Those coloured borders on the world map mean less on YouTube or Snapchat. They are more likely to live in a One World Reality more so than any previous generation.

This ‘we’ mentality bodes well for our future. Imagine these consumers as the politicians of 2040. If you are reared as a pluralist, then hopefully the social biases of previous generations will not have as big an impact on policy. But for business, this also bodes well.

We referred to co-creation earlier but the WE generation is also more community focused, more concerned about those around them. They inherently understand that there is a big world out there and they are only a small part. They have grown up inside the mega network. So not only do they know they have a voice, they also believe they can use it for change. As they mature and take ownership of this voice, its power will become clear.

To date, much of what we know as ‘corporate responsibility’ have been policies designed and run by Baby Boomers and more recently Gen X. They feel they need to be seen to ‘be doing something’ but they always first answer to the shareholders. It is profit first, that is the system that was built. But what happens when the shareholders themselves demand something different? What happens when middle-management is Gen Z and the board are all millennials? When the shareholders themselves are Gen Y & Z. That is just 10 years away. We may have an interesting alignment of what consumers want, what corporate can give and society demands.

Fundamentally, Gen Z are the future. But of course, they are already being replaced. The Alpha Generation are those being born 2015+ (I know, it is lazy isn’t it … you get to the end of the alphabet so you just start again!). They have also been referred to as Gen Tech but I think Gen Z are already that. Whatever they are finally named, what is clear is that the very nature of consumerism, social and cultural norms and human motivation will continue to shift, faster and faster.

Any business that wants to be here in 10 years’ time needs to take heed. Whatever business models have worked in the past, Gen Z might just laugh at them, like that bank closed for lunch. Don’t be that bank.

Source: zoovu.com. This article was originally featured on kenhughes.info

[#51] How to self-learn Japanese?

🏃‍♀ About

The purpose of this article is threefold. It first relates my own experience towards Japanese self-learning, one of my greatest achievements so far. It also shares helpful tips and resources for current self-learners. Lastly it goes beyond language learning considerations and anyone intersted in self-development will find it worth the read.

🏃‍♀ Motivation

I am an adult European citizen, who grew up in France, always studied and worked in Europe, and who will probably continue to do so for a long time, if not my entire career. So why learn Japanese? Like anyone, I need strong good reasons to achieve what I perceive as a big challenge and a long journey forward. And despite what many book covers pretend, learning a new language so different from your native one is definitively a long term goal. It took me a long time to come up with a simple way to answer this question:

I learn Japanese because I want to deeply understand Japanese culture and interact with Japanese people. I learn Japanese because it’s a challenge for me in multiple ways: memory, interaction with others, resilience, language learning, etc. I learn Japanese because achieving language proficiency would make me feel immensely proud.

This motivation finds its source in my childhood and teen age, where I first perceived Japan as a miraculous place where anime and manga are better than anywhere else in the world, where food is the best in the world (equally with France, pardon my chauvinism), and where both respect for ancient culture and most advanced high tech world peacefully coexist. If you want to learn more about this feeling regarding Japan, I recommend the travel diary from pechedediamant.com, whose articles perfectly reflect my thinking.

🏃‍♀How

Except if you are naturally gifted and skilled for language learning, Japanese is somehow scary, especially if you learn it on your own. I must admit I tried many different approches before finding my way. To give a few examples:

• I studied Japanese in classroom for two years during my studies: this ended up being super inefficient due to too much heterogeneity across students (level and motivation-wise). From that, I nevertheless learnt the very basics, i.e. hiragana (ひらがな) + katakana (カタカナ), as well as a few survival phrases.
• I purchased all kinds of Japanese learning materials: dictionary, vocabulary books, grammar books: hereagain, no effective return. I mostly struggled to find sentences adapted to my level and my wishes: simple sentences written in real Japanese (no romanji), going beyond traditional ‘introduce yourself’ and ‘where is the bank?’ kind of lessons. In a nutshell, grammar examples were not using the vocabulary I knew, and both vocabulary pronunciation and meaning were impossible to memorise in the long term.
• I also tried the listening approach, using free podcasts: apparently too advanced for a beginner like me.

The picture looks bad but I definitively learnt from these attempts: Japanese grammar is rather easy, and my failure resided in my lack of vocabulary, reading skills, and ultimately listening skills. I thus made more homework to find the best resources given my weaknesses, and I decided to start my journey of learning Japanese the hard way (but the solid one!).

🏃‍♀Resources that work for me

Now that you know which process I’ve been through, I can confidently introduce you to my best friends as a Japanese self-learner. My opinion is that one cannot build great skyscrapers without strong foundations and solid building blocks. My strategy is thus to:

Acquire solid building blocks, i.e. a lot of vocabulary (meaning + pronunciation).

If you do not know Wanikani yet, this site was my mindset changer and I definitively recommend it. On this platform you can learn ~2 000 kanji and ~6 000 words in just a few years, leveraging mnemotechnics and Spaced Repetition System. Basically, kanji are made of radicals, and words are made of kanji. Learning them in a coherent manner makes your learning curve exponential over time!

Let me illustrate with a very simple example: 火山火 (pronounced か (ka)), stands for fire. It’s a basic kanji, fairly easy to memorize. For the reading, you might want to remember the following story: when we think fire, we ought to think of something on fire. What is it on fire? It’s obviously your very own car (か)!

山 (pronounced さん (san)), stands for mountain. Hereagain, simple kanji easy to memorize (looks like a montain, isn’t it?). You already know its pronunciation if you know Mount Fuji is often called Fujisan as well.

Then guess what 火山, the fire mountain, means? Volcano! And guess how to pronounce it? かざん (kazan)! Isn’t it a powerful technique to learn vocabulary in an exponential manner?

As I write this post, I’ve been using Wanikani for almost a year (just activated the lifetime subscription), and recently completed level 13 (out of 60), which corresponds to ~270 radicals, ~430 kanji and ~1 250 words. Each element comes with illustrative examples and descriptions, like the similar kanji analysis.

Each kanji’s scorecard provides you with great information, such as similarity analysis. Very useful to avoid confusion!

In addition I also use this plugin which tracks your progress versus JLPT requirements, versus most common Japanese words and even versus most famous Japanese websites. As an example, level 13 makes you understand more than 60% of Japanese Wikipedia!

Acquire strong foundations, i.e. good grammar knowledge.

Learning vocabulary is great, but you also need to practice a bit of grammar to cement words all together. I personally use TextFugu, a Japanese online book for self-learners. Main advantages are that it is very pedagogical, combines text with sounds and video whenever relevant, and that contents improve over time (benefits of online books versus paper). Hereagain I opted for the lifetime subscription. Note that TextFugu will soon be replaced by EtoEto (currently in very alpha version).

Practice reading using appropriate resources (meaning real Japanese sources).

Once you have ingested a decent amount of grammar and vocabulary, you can put your knowledge into practice to break any simple Japanese written contents. As a routine, I am trying to visit NHK news web easy once a week, and read new articles. Not easy for me yet, but I can detect the begining of a improvement, as topics being discussed and basic sentences are more and more easy to capture. Yeah!

Practice writing

Quite scarying in the beginning, writing is also a great way to fix your grammar learning, make mistakes, correct in an iterative approach, and gain confidence. I recently joined lang-8, a sort of free social network dedicated to language learners: help others by reviewing their posts in your native language, the community will then help you in return by correcting your first Japanese written attempts. Quite a win-win deal, isn’t it?

Practice listening.

I’m not there yet. My first attempts as beginner made me conclude that I needed more practice prior to listen to real Japanese discussions, debates etc. I still lack a bit of vocabulary (I’m confident I will overcome it soon) and Japanese speaking pace is too fast for my untrained ears. As a transition period and prior to search for podcasts of real interest to me, I opted for news in slow Japanese.

Practice speaking.

Speaking is for sure the ultimate objective. Anyone having completed all previous steps should have no reason to fear this final difficulty. However, speaking implies interactions with Japanese people, and I do not take for granted that we all have Japanese friends, family or acquaintances willing to kindly dedicate time to make us speak.

Although this situation is a challenge, there are several ways to overcome it — thank you the Internet!

1. You want to learn Japanese? What about doing it in a friendly manner with people sharing the same interest and objectives in your neighborhood?
2. Option 1. does not work for you? What about finding online Japanese teachers? Or maybe Japanese people interested in learning your language? I’m sure it’s the ideal way to capstone all big efforts and so far achievements into a great opportunity to gain confidence in your speaking maturity and also maybe to make new friends!

🏃‍♀Join the movement!

As shown between the lines throughout this article, there are plenty of great contents and materials that can help you achieve your biggest goals. Actually, global shift towards digital and social network ecosystems makes it easier than before. My personal feeling is that self-development and self-learning are part of the most important growing topics worldwide (see the boom of Coursera, EdX, LinkedIn Learning and similar platforms…). As a direct consequence, communities of passionates from all areas are growing, so why not join the movement as well?

🏃‍♀Conclusion

I hope this summary of my journey towards Japanese learning was an interesting and helpful reading. Of course, there are numerous other valuable resources, and I strongly recommend you to have a look at tofugu to discover them. I wish you all success if you are engaged in similar challenges!

I’m happy to receive feedback of any kind so please comment if you have advise, or should you want to complement with other tools and resources which better worked for you!

どうもありがとうございました！

Source: medium.com/swap-language/ Thomas Filaire

[#50] McDonald’s goes green by ditching plastic in Happy Meal toys

The fast-food chain expects to remove over 3,000 metric tons of plastic from the business from 2021 by abolishing plastic happy meal toys.

Fast-food restaurant chain McDonald’s has announced it will phase out all plastic toys from its Happy Meals from 2021 onwards.

From 2021, Happy Meals shall only include soft toys, sustainable paper-based gifts and books as the company hopes to find a sustainable alternative to hard plastic.The company anticipates that this will be the largest reduction in plastic by McDonald’s UK and Ireland to date, which will aim to eliminate over 3,000 metric tons of non-sustainable plastic.

The announcement follows a well publicised petition, which received 400,000 signatures, led by two schoolgirls who called upon the fast-food chain to cut plastic from its Happy Meals.

Competitors such as Burger King have already taken steps to reduce their impact on the environment by banning children’s toys all together in 2019.

In the meantime, McDonald’s has released its strategy on how it plans to achieve its 2021 goal.

From March 2020, the company will trial paper packaging for any Happy Meal toy. The paper packaging will also be introduced for Happy Meal books from August, removing the plastic polybag and a further 200 tonnes of plastic.

From May 2020, McDonald’s will offer everyone the choice of either a book or a toy with every Happy Meal in the UK and Ireland. This gives families the choice to opt out of a plastic gift in every restaurant. This initiative builds on the successful Happy Readers promotion which has distributed over 90 million books with the Happy Meal in the last seven years.

Gareth Helm, Senior VP and Chief Marketing Office, UK and Ireland said “Families have high expectations of us and we’re working as hard as we can to give them the confidence that their Happy Meal is as sustainable as possible. Getting that right is a big responsibility.”

“We want to use our reach and influence to bring customers with us on the journey towards more sustainable living. Today’s announcement reflects our mission to continue to trial, test and learn from innovative sustainable solutions.”

Keith Kenny, VP, McDonald’s Global Sustainability also commented: “Globally, McDonald’s is committed to sustainable sourcing and to exploring the production of more sustainable Happy Meal Toys that continue to delight customers and families.”

“We are excited to use learnings from these initiatives in the UK and Ireland and other market sustainability programs to inform our global approach.”

Source: ClimateAction

[#47] Your Earth Overshoot Day

Since the late 1970s, humanity has been in ecological overshoot with annual demand on resources exceeding what Earth can regenerate each year. Earth Overshoot Day is set to mark the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year. 

🌫How does your own ecological footprint shape up?

Each year, normally in mid-August, an unfortunate milestone is marked: Earth Overshoot Day, a day on which we exhaust our ecological budget for the rest of that year. Passing this day means humanity has demanded all the ecological services – from filtering CO2 to producing the raw materials for food – that nature can provide in one year. Once past this date, we  meet our ecological demand by liquidating resource stocks and accumulating carbon dioxide in the atmosphere.

The most obvious and arguably pressing result is climate change – a result of producing more carbon than can be reabsorbed by the forests and seas. But there are others: shrinking forests, species loss, fisheries collapse and freshwater stress, just to name a few.

If Everyone Lived the Lifestyle of the Average American, We Would Need Four Planets

According to the Global Footprint Network, humanity uses the equivalent of 1.5 planets worth of resources. This means that it takes the Earth one year and five months to regenerate what we use in a year. The Living Planet Report 2012 shows that at the current rate that humanity is using natural resources and producing waste, by the early 2030s we will require the resources of more than two planets to meet our needs.

A country’s footprint is the sum of all the cropland, grazing land, forest and fishing grounds required to produce the food, fibre and timber it consumes, to absorb the wastes emitted when it uses energy and to provide space for its infrastructure. There have been differences in the methodology used by various ecological footprint studies. Since 2006, a first set of ecological footprint standards exist that detail both communication and calculation procedures. These standards are useful when comparing a country’s, city’s or region’s footprint. The Living Planet Report 2008 names the top three countries with the highest ecological footprint per head:

1. Qatar
2. Kuwait
3. United Arab Emirates

🌫The Ecological Footprint

The Ecological Footprint measures how much land and water area a human population requires to produce the resources it consumes and to absorb its waste. All of the per person Footprint Calculators use different end-use categories such as food, shelter, mobility, goods and services and some of them use land types (forest, cropland, energy, fish, grazing land).

By measuring the footprint of a population, individual, city, business, nation or all of humanity, we can take personal and collective action to support a world where humanity lives within the Earth’s bounds. To reach this goal individuals and institutions worldwide must begin to recognise ecological limits, make them central to our decision-making and use human ingenuity to find new ways to live.

You can start by taking individual action – the Personal Footprint Calculators will help you to see where you stand and to find a starting point for changing your lifestyle.

🌫Your Personal Footprint

footprintnetwork.org: How much land area does it take to support your lifestyle?

Take this quiz to find out your Ecological Footprint, discover your biggest areas of resource consumption, and learn what you can do to tread more lightly on the earth. At the end of this quiz, you’ll find graphs about your biggest areas of resource consumption, and learn what you can do to live more sustainably. Although you choose your country the current version is based on data specifically for the U.S. and Australia, but Global Footprint Network is developing a new version which will enable people around the world to calculate their Footprints with data specific to their region.

myfootprint.org: After 27 easy questions you´ll be able to compare your Ecological Footprint to others´ and you can learn how to reduce your footprint. In this quiz you can choose your country and get some country-specific answers.

The Ecological Footprint does not, and is not intended to measure freshwater flows. Nevertheless this is a vital renewable resource to become aware of.

*Edited from RESET

[#46] The incredible story of Starbucks billionaire Howard Schultz

Thirty years ago, Howard Schultz got into the coffee business with one goal in mind: to enhance the personal relationship between people and their coffee.
He’s now responsible for Starbucks, one of the world’s most beloved brands, and worth at least $3 billion as chairman and CEO of the Fortune 500 company. But it wasn’t an easy path to the top.How did Schultz, who came from a “working poor” family in the Brooklyn projects, overcome adversity and grow a quaint Seattle coffeehouse into the largest coffee chain on Earth? Scroll through to learn the story behind Starbucks and its leading man.

Schultz was born on July 19, 1953, in Brooklyn, New York. In an interview with Bloomberg, he said growing up in the projects — “loosely described as the other side of the tracks” — exposed him to the world’s wealth disparity.

He experienced poverty at an early age. When Schultz was 7 years old, his father broke his ankle while working as a truck driver picking up and delivering diapers. At the time, his father had no health insurance or worker’s compensation, and the family was left with no income.

In high school, Schultz played football and earned an athletic scholarship to Northern Michigan University. By the time Schultz started college, he decided he wasn’t going to play football after all. To pay for school, the communications major took out student loans and took up various jobs, including working as a bartender and even occasionally selling his blood.

After graduation in 1975, Schultz spent a year working at a ski lodge in Michigan waiting for inspiration. He finally landed a job in the sales training program at Xerox, where he got experience cold-calling and pitching word processors in New York. The work didn’t fulfill him, so after three years he left to take a job at Hammarplast, a housewares business owned by a Swedish company called Perstorp.

There, Schultz ascended the ranks to vice president and general manager, leading a team of salespeople out of the US office in New York. It was at Hammarplast that he first encountered Starbucks. The coffee shop had a few stores in Seattle and caught his attention when it ordered an unusually large number of drip coffeemakers.

Intrigued, Schultz traveled to Seattle to meet the company’s then owners, Gerald Baldwin and Gordon Bowker. He was struck by the partners’ passion and their courage in selling a product that would appeal only to a small niche of gourmet coffee enthusiasts.

A year later, the then 29-year-old finally persuaded Baldwin to hire him as the director of retail operations and marketing. At the time, Starbucks only had three stores, but they were selling pounds of coffee for home use, Schultz said.

Schultz’s career — and Starbucks’ fate — changed forever when the company sent him to an international housewares show in Milan. While walking around the city, he encountered several espresso bars where owners knew their customers by name and served them drinks like cappuccinos and cafe lattes. Schultz had an “epiphany” the moment he understood the personal relationship that people could have to coffee.

In 1985, Schultz left Starbucks after his ideas to cultivate an Italian-like experience for coffee-lovers was rejected by the founders. He soon started his own coffee company: Il Giornale (Italian for “the daily”).

In order to get Il Giornale off the ground, Schultz had to raise more than $1.6 million. “In the course of the year I spent trying to raise money, I spoke to 242 people, and 217 of them said no,” he wrote. “Try to imagine how disheartening it can be to hear that many times why your idea is not worth investing in. … It was a very humbling time.”

Schultz spent two years away from Starbucks, wholly focused on opening Il Giornale stores that replicated the coffee culture he’d seen in Italy. In August 1987, Il Giornale bought Starbucks for $3.8 million, and Schultz became CEO of Starbucks Corporation. At the time, there were six stores.

America swiftly took a liking to Starbucks. In 1992, the company went public on the NASDAQ (a stock market index); its 165 stores pulled in $93 million in revenue that year. The world eventually caught on, and by 2000 Starbucks had grown into a global operation of more than 3,500 stores and $2.2 billion in annual revenue.

Starbucks’ success made Schultz rich, and in 2001 he demonstrated his growing love for Seattle when he bought the Seattle Supersonics (American professional basketball team based in Seattle) for $200 million. But the investment turned sour as the team struggled and Schultz feuded with players. In 2006, he sold the Sonics to a group of investors that moved the team to Oklahoma City, severely damaging his popularity in Seattle. He later called owning the team “a nightmare.”

Running Starbucks came with set-backs, too. In 2008, Schultz temporarily closed 7,100 US stores in order to retrain baristas on how to make the perfect espresso. Over the next two years he led Starbucks’ massive turnaround, with profits tripling from $315 million to $945 million by 2010.

As part of the overhaul, Schultz announced that Starbucks would aim to hire 10,000 military veterans and their spouses by 2018. Last year the company announced it would pay for employees’ college tuition.

Throughout his career at Starbucks, Schultz has always prioritized his employees, who he calls “partners.” Largely because of his father’s experience when he was injured, Schultz offers all his employees (including part-time workers) complete health-care coverage as well as stock options.

In the last 28 years, Schultz has grown the coffeemaker to include more than 21,000 stores in 65 countries (ironically, there are none in Italy). “I’ve always been driven and hungry,” Schultz said. “Long after others have stopped to rest and recover, I’m still running, chasing after something nobody else could ever see.”

Schultz has parlayed Starbucks’ extraordinary success into two books: “Pour Your Heart Into it: How Starbucks Built a Company One Cup at a Time” (1999) and New York Times bestseller “Onward: How Starbucks Fought For Its Life Without Losing its Soul” (2012).

As Starbucks has continued to grow — it now has annual sales of more than $16 billion — so has Schultz’s fortune. His net worth is estimated to be $3 billion. He revealed in “Pour Your Heart Out” that his tremendous professional success is a tribute to his late father, who “never attained fulfillment and dignity from work he found meaningful.”

*Edited from TUBEMAG

[#45] Starbucks and its Supply Chain Case study

Starbucks story began in 1971. Back then it was a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market. Today, it connects with millions of customers every day in 76 markets.

Starbucks logo in 1971

“Every day, we go to work hoping to do two things: share great coffee with our friends and help make the world a little better. It was true when the first Starbucks opened in 1971 and it’s just as true today.”, said Starbucks representatives.

Back then, the company was a single store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring tradition of the early coffee traders.

In 1981, Howard Schultz (Starbucks chairman, president and chief executive officer) first walked into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined a year later.

The following year, in 1983, Howard traveled to Italy and became captivated with Italian coffee bars and the romance of the coffee experience. He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community. A third place between work and home. He left Starbucks for a short period of time to start his own Il Giornale coffeehouses and returned in August 1987 to purchase Starbucks with the help of local investors.

From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection.

Its brand mission is to inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time.

Today, with stores in more than 75 markets, Starbucks is the premier roaster and retailer of specialty coffee in the world. And with every cup, we strive to bring both our heritage and an exceptional experience to life.

[Starbucks’ Supply Chain Case Study ]

Starbucks is pretty much a household name, but like many of the most successful worldwide brands, the coffee-shop giant has been through its periods of supply chain pain. In fact, during 2007 and 2008, Starbucks leadership began to have severe doubts about the company’s ability to supply its 16,700 outlets. As in most commercial sectors at that time, sales were falling. At the same time, though, supply chain costs rose by more than $75 million.

‼ Supply Chain Cost Reduction Challenges

When the supply chain executive team began investigating the rising costs and supply chain performance issues, they found that service was indeed falling short of expectations. Findings included the following problems:

Fewer than 50% of outlet deliveries were arriving on time
Several poor outsourcing decisions had led to excessive 3PL expenses

The supply chain had, (like those of many global organisations) evolved, rather than grown by design, and had hence become unnecessarily complex.

📉 The Path to Cost Reduction

Starbucks’ leadership had three main objectives in mind to achieve improved performance and supply chain cost reduction.

These were to:

• Reorganize the supply chain
• Reduce cost to serve
• Lay the groundwork for future capability in the supply chain

To meet these objectives, Starbucks divided all its supply chain functions into three main groups, known as “plan” “make” and “deliver”. It also opened a new production facility, bringing the total number of U.S. plants to four.

Next, the company set about terminating partnerships with all but its most effective 3PLs. It then began managing the remaining partners via a weekly scorecard system, aligned with renewed service level agreements.

✅ Supply Chain Cost Management Results

By the time Starbucks had completed its transformation program, it had saved more than $500 million over the course of 2009 and 2010, of which a large proportion came out of the supply chain, according to Peter Gibbons, then Executive Vice President of Global Supply Chain Operations.

At the end of the day, Starbucks had to shake up its third-party relationships and increase production capacity.

*Edited from CEL and Starbuck.com

[#44] A brief history of Hyundai Motors

For decades, Hyundai has been in the front line of modern car design and manufacturing. The very word “Hyundai” is appositely derived from a Korean word “hanja” meaning “modernity.” Constantly pushing the envelope, the company has a long history of technological innovation.
But it hasn’t evolved merely for the sake of evolution. Rather, the firm has always had one goal in mind: building cars of unbeatable quality. These days, Hyundai is more devoted than ever to creating the ideal driving experience.

All of that being said, how did Hyundai get where it is, and where is it headed now? Let’s talk about it.

We all know that Hyundai Motor Company officially launched its brand in 1967, but the origins of the auto giant go back a bit further, to the post-war world of South Korea. It started in 1947, when entrepreneur named Chung Ju-Yung founded a small business called Hyundai Engineering and Construction Company. The aim was simple: to help South Korea rebuild and industrialize after the ravages of World War II.

Unfortunately, the Korean War dashed his hopes and his business plan. Following so quickly on the heels of the last major war, it forced Chung Ju-Yung to abandon the company and instead seek work at the Korean Ministry of Transportation. Although it would be over a decade before the formation of Hyundai Motor Company in the late 1960s, it was there, at the nation’s transportation agency, that the seeds of Ju-Yung’s next project were planted.

Hyundai Motor Company officially got off the ground in 1968 with the introduction of its very first model “the Cortina” which the company collaborated with Ford Motor Company to manufacture the Cortina. The release of the car was the first step in what would be a long and successful journey. Manufactured in the Ulsan plant, in the southeastern region of the country, the car was enough of a hit to encourage Chung Ju-Yung in his undertaking.

Indeed, it was after the rollout of the Cortina that he decided to step up his efforts to create a robust and independent automotive business. In order to realize his dreams of creating high quality, mass produced vehicles for the South Korean public, Chung Ju-Yung brought in a number of British automotive executives and engineers, starting with George Turnbull, formerly the managing director of Austin-Morris.

Together they designed the Pony, released in 1976, which broke ground as South Korea’s very first mass-produced car.

The Pony wasn’t just a one-time wonder. Manufactured in Korea, designed with the help of British engineers, styled by Italy’s Giorgio Giugiaro, built with a 1.2 liter Mitsubishi engine, the car was a truly international product that presaged the worldwide scope of its producer.

It was only a matter of time, before Hyundai began selling its prized creation in the global marketplace. Exporting began with Ecuador, and then quickly expanded to other parts of the world from South America to Europe to North America. In fact, by the middle of the decade, the Pony was the highest selling car in Canada. While Hyundai hadn’t yet broken into the U.S. market, they were developing a starry reputation in many other countries.

Of course, expansion brought with it a number of issues, not the least of which was quality control. While it was relatively easy to sell cars on the new South Korean market, it was a bit more difficult to please foreign car buyers. Executives quickly realized they would have to focus on excellence, as well as expansion, and Hyundai’s long-term strategy of quality growth was born.

Throughout the 1980s, Hyundai grew at a fleeting rate, making huge marks in international markets. It wasn’t until 1986, however, that the company hit one of its biggest goals, that is, breaking into the U.S. market. Initially that proved difficult, owing to strict emissions standards, but before long Hyundai met the challenge with flying colors.

It did so with the model “Excel”, a revised version of the Pony that featured front-wheel drive and low emissions. South Korea’s first American offering hit U.S. markets in two forms: a 4-door sedan and a 5-door hatchback trim, both featuring a 4-cylinder engine. In the end, Hyundai’s little car proved to be an alarming contender on the international stage.

Designed once again by Giorgio Giugiaro, the Pony Excel was conceived specifically for foreign markets. As a cost-efficient alternative to many domestic cars, it proved popular with consumers, (becoming the best-selling imported car of 1986), as well as critics (hitting Forbes’s list of best products). The Excel model proved such a success that Hyundai continued producing it until 1994, when the sleeker Accent arrived.

Despite an initially strong showing, Hyundai wasn’t entirely satisfied. Still under the leadership of founder Chung Ju-Yung, it wanted to push the envelope once again in its constant drive to improve quality and boost standards. Over the next few years, the company would make huge advances in design and technology, and, by the early 21st Century, Hyundai had become one of the world’s top car manufacturers.

Nowadays, while many things have changed, much else has remained the same. Hyundai’s main plant is still located in Ulsan, where it produced its very first car, only now it is the single biggest integrated car manufacturing center in the world. A testament to the progress the company has made since its humble beginnings as South Korea’s first mass vehicle producer. With an annual production capacity of 1.6 million units,

Only, these days, it’s not all about quantity. Today the company is more than ever committed to “adding premium value into customers everyday lives,” to use the words of CMO/EVP Wonhong Cho. With models under its belt ranging from the Santa Fe to the Sonata, all of which continue their long runs at Hyundai car dealers around the country, it has produced a whole new generation of vehicles that emphasize exceptional design and superior technology.

For example, Sonata is notable not only for being the manufacturer’s flagship mid-sized sedan, but also for pioneering the brand’s new design philosophy of fluidic sculpture. With an emphasis on natural forms and dynamic curves, Hyundai’s visionary theory has put it at the forefront of automotive design.
Over the years, Hyundai has expanded well beyond its initial comfort zone as the budget-friendly, foreign alternative. In the past few decades, it has continued to roll out not only great cars for everyday use, but also specialty and high-end vehicles.

Consistently ranking in the top tier of the World Rally Championships, the company has regularly demonstrated its commitment to superior engineering and state-of-the-art technology. Today, Hyundai is exceeding expectations once again, improving its quality, cultivating its relationships with customers, and moving into the luxury sector with an entirely new brand called Genesis.

Although Hyundai has had an incredible ride so far, it looks as if the best is yet to come. As the company moves into new markets, expands its line of vehicles, and once again pushes the envelope of quality and ingenuity, the public is in for even more surprises. For new or loyal Hyundai customers, the future looks brighter than ever.

*Edited from Huyndai

[#43] Da Lat targets breakthrough in flower export

Flower farmers in Da Lat City, located in the Central Highlands province of Lam Dong, are overcoming technical challenges to produce export-quality flowers.

Situated in a plateau around 1,500 meters above sea level, Da Lat enjoys year-round cool weather which stands in contrast to Vietnam’s tropical climate, making the city ideal for growing high-value flowering plants originating in temperate countries.

Da Lat is one of Vietnam’s biggest flower-growing regions, producing around three billion flowers every year, 10% of which are exported to foreign markets including Japan, the Republic of Korea (RoK), Taiwan, Australia and China.

In recent years, small and medium-sized flower farms in Da Lat have joined bigger, foreign-invested firms in exporting floricultural products, which contributed to the city’s remarkable flower export growth. Between 2015 and 2017, Da Lat reported a yearly increase of 18-30 million in exported flowers.

Japan is the city’s largest flower market, importing around 60% of its production, with Australia, (RoK), Belgium, Thailand, the Philippines, Singapore, Russia and Cambodia being other major markets.

According to Mr.Pham S, Deputy Chairman of Lam Dong Province, there is around 9,000 hectares of flower-growing land in Da Lat, capable of meeting the city’s goal of shipping 400 million flowers yearly over the next five years.

A worker processes cut flowers for export at a factory in Da Lat City, Lam Dong Province in the Central Highlands region of Vietnam. Photo: Tuoi Tre

However, as Da Lat’s floricultural industry grows, plant variety rights are quickly becoming a “deadly weakness” for small exporters, said Mr. Phan Thanh Sang, President of the Da Lat Flower Association.

Plant breeders’ rights (PBR), also known as plant variety rights (PVR), are rights granted to the breeder of a new variety of plant that give the breeder exclusive control over the propagating material (including seed, cuttings, divisions, tissue culture) and harvested material (cut flowers, fruit, foliage) of a new variety for a number of years.

With these rights, the breeder can choose to become the exclusive marketer of the variety, or to license the variety to others. In order to qualify for these exclusive rights, a variety must be new, distinct, uniform and stable.

Ninety percent of household flower growers in Da Lat are using seeds that violate these protected rights, which limits their chances of exporting harvested products to developed markets, Mr. Sang said. Traditional florists tend to follow the market’s trend to plant. In many cases, they buy seeds with little attention to the copyright. Then, when it comes to export negotiation, they are “stuck” with legal barriers.

In fact, many opportunities to export flowers to Japan have been missed when farmers were unable to answer questions regarding the breeder of their flower variety posed by officials from the Japan External Trade Organization (JETRO).

Meanwhile, farmers are still having difficulties getting access to flower varieties that are no longer protected by breeders’ rights, said Mr. Vo Quoc Khoa, director of Dalat Green flower company.

To cope with this setback, the administration of Lam Dong Province has introduced a model where major companies partner with local farmers by providing them with quality flower seeds and growing techniques, in exchange for harvested crops.

The province is looking to launch a flower exchange and online platforms where foreign importers can place orders for Da Lat-grown flowers online.

*Edited from Tuoitrenews

[#42] Imports and How They Affect the Economy

Imports are foreign goods and services bought by citizens, businesses, and the government of another country. It doesn’t matter what the imports are or how they are sent. They can be shipped, sent by email, or even hand-carried in personal luggage on a plane. If they are produced in a foreign country and sold to domestic residents, they are imports.

Even tourism products and services are imports. When you travel outside the country, you are importing any souvenirs you bought on your trip.

🖍 Imports and the Trade Deficit

If a country imports more than it exports it runs a trade deficit. If it imports less than it exports, that creates a trade surplus. When a country has a trade deficit, it must borrow from other countries to pay for the extra imports. It’s like a household that’s just starting out. The couple must borrow to pay for a car, house, and furniture. Their income isn’t enough to cover the necessary expenses that improve their standard of living. 

But, like the young couple, a country should not continue to borrow to finance its trade deficit. At some point, a mature economy should become a net exporter. At that point, a trade surplus is healthier than a deficit.

Why?

• First, exports boost economic output, as measured by gross domestic product. They create jobs and increase wages.

• Second, imports make a country dependent on other countries’ political and economic power. That’s especially true if it imports commodities, such as food, oil, and industrial materials. It’s dangerous if it relies on a foreign power to keep its population fed and its factories humming. For example, the United States suffered a recession when OPEC (Organization of Petroleum Exporting Countries) embargoed its oil exports.

• Third, countries with high import levels must increase their foreign currency reserves. That’s how they pay for the imports. That can affect the domestic currency value, inflation (a continuous increase in prices), and interest rates.

• Fourth, domestic companies should be able to compete with foreign companies that import similar goods and services to their businesses. Small businesses that can’t compete may fail. 

• And finally, exports help domestic companies gain a competitive advantage. Through exporting, they learn to produce a variety of globally-demanded goods and services. 

🖍 Four Ways Countries Increase Exports 

Countries often increase exports by increasing trade protectionism. That insulates their companies from global competition for a while. They impose tariffs (taxes) on imports, making them more expensive. The problem with this strategy is that other countries soon retaliate. A trade war hurts global trade in the long run. In fact, this was one of the causes of the Great Depression (the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1939. It began after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors).

As a result, governments are now more likely to provide subsidies to their industries. The subsidy lowers business costs so they can reduce prices. This strategy may lower the risk of retaliation. If other countries complain, the government can say the subsidies are temporary. For example, India claims the subsidy allows its poor to afford basics like fuel and food. Some emerging markets protect new industries. They give them a chance to catch up with technology in developed markets.

A third way countries boost exports is through trade agreements. Once protectionism has lowered trade, countries may see the wisdom in reducing tariffs. The World Trade Organization almost succeeded in negotiating a global trade agreement. But the European Union and the United States refused to end their agricultural subsidies. As a result, countries rely on bilateral and regional agreements. 

Countries try to increase exports by lowering their currency value. That has the same effect as subsidies. It lowers the prices of goods. Central banks reduce interest rates or print more money. They also buy foreign currency to raise its value (The value of money is determined by the demand for it, just like the value of goods and services. One way is through foreign exchange reserves. Let’s amount of dollars held by foreign governments. The more they hold, the lower the supply. That makes U.S. money more valuable). Countries like China and Japan are better at winning these currency wars. 

The United States can produce everything it needs, but emerging market countries can make many consumer items for less. The cost of living is low in China, India, and other developing countries. They can pay their workers less, creating a comparative advantage. 

The United States is a free market economy that’s based on capitalism. These low-cost imports cost American jobs. U.S. companies cannot both pay a living wage and compete on price. 

*Edited from the balance.

[#41] HSBC to cut 35,000 jobs worldwide as profits plunge

HSBC has said it will slash 35,000 jobs over three years as part of a major shake-up as it issued a warning over the impact of the coronavirus outbreak in Asia.

The interim chief executive, Noel Quinn, confirmed on Tuesday that plans to cut $4.5bn (£3.5bn) worth of costs would involve slashing about 15% of the group’s global workforce. “We would expect our headcount to decrease from the current level of 235,000 to be closer to 200,000 in 2022,” Quinn said.

“This represents one of the deepest restructuring and simplification programmes in our history.”

HSBC, which operates in 64 countries, said there would be “meaningful job cuts here in the UK”, mainly affecting its head office operations as well as its global banks and markets business, which are largely London-based. The lender would not comment on potential branch closures in the UK but said it was keeping the network “under review”. The group employs about 40,000 staff in the UK.

Despite the planned job cuts, HSBC said it had set aside £3.3bn in bonuses, down nearly 4% compared with last year. Quinn, who took over as interim chief executive after the ousting of John Flint in August last year, was paid nearly £2m including a £665,000 bonus. The bank’s group chief financial officer, Ewen Stevenson, who joined in January 2019, was handed a £1m bonus as part of his £4.9m pay package.

Union officials called for urgent talks with HSBC on the planned cutbacks.

Unite’s national officer for finance, Dominic Hook, said: “Despite HSBC still making billions of dollars of profit, once again hardworking and dedicated staff have woken up to the news that their job could be at risk.

“Unite is seeking urgent discussions with senior management to understand the serious impact of this announcement and what it will mean for our members in the UK.”

The UK cutbacks are part of a wider restructuring across the bank’s European operations, where it aims to cut costs by 25%. HSBC is also targeting its US division, which will involve closing a third of its 224 branches, and said technology and automation would mean job losses across the bank as a whole. Apart from the cost-cutting, it also plans to shed $100bn worth of assets by the end of 2022.

The bank also issued a warning over the coronavirus outbreak in Asia, which makes up the bulk of its profits, saying it could have an impact on its performance in 2020.

HSBC said there had already been significant disruption for staff, suppliers and customers, particularly in mainland China and Hong Kong, and it was monitoring the situation closely.

But if the outbreak continues to spread throughout the second half of the year, HSBC could be forced to set aside as much as $600m to deal with the business fallout. Stevenson said: “We don’t expect anything like that but we do expect some increase in provisioning this year.”

Provisions for coronavirus would help cover bad debts if customers start to default on their loans. Individual borrowers could fall ill, while corporate customers could face financial difficulty if supply chains are disrupted due to trade restrictions or factory closures, particularly in China.

Stevenson said: “We expect to take additional loan loss provisions as a result of the coronavirus and the weakened outlook for the Hong Kong economy. I think it’s really a call on how long does it take to contain the virus, and certainly some of the latest data has given us more optimism on that over the last week or so.”

He said the bank would have further details on the impact of the virus on its full-year results when it releases first-quarter earnings on 28 April. HSBC’s profits before tax for 2019 dropped 33% to $13.3bn, substantially below analysts’ forecasts.

The coronavirus outbreak is the latest challenge HSBC has had to face in Asia. It was also affected by anti-government protests in Hong Kong and tensions over the US-China trade war last year. However, Quinn said the lender remains committed to China, which represents a significant opportunity for growth despite recent disruptions.

“Absolutely, we need to deal with the coronavirus situation in the short term but we do not see that changing the long-term strategic attractiveness of China,” he said.

HSBC’s shares fell 6.2% in afternoon trading to 553p.

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*Edited from The Guardian