As some of you know, I've spent close to the last two years on an MBA program at UMUC.
Our last seminar is management strategy, and our capstone project is to develop a business plan for a civil engineering company (the Louis Berger Group) to expand to Libya.
We complete the program on June 18th, with a presention of a capstone project to the faculty and corporate sponsors.
I haven't written about the program much because I spend so much time doing school work I have no interest in blogging about it. Until today.
One of our professors gave us a little nugget I thought of today. He said that strategy decisions should be made to give a company a sustainable competitive advantage. If Beer Company A thinks they can spank Beer Company B by dropping their price, they are wrong. Beer Company B can drop their price and both companies can live with lower profits. The price drop doesn't provide a competitive advantage - it's actually a pretty boneheaded move.
I saw a Subway commercial today - they are now offering to toast your sub. Toasted or untoasted, just let them know.
So what will Quizno's do? No more "Mmmm, toasty!" commercials. Because there's no longer a competitive advantage with the "toasty" line. They might have to try tasty. Or more nutritious. But toasty is won't fly anymore.
Ahh...Civil Engineering...that would be my Dad, Grandfather (his dad), and cousin. I think Civil Engineering has more to do with the common good than with the good of the corporation (isn't "the common good" what "civil" refers to?) though Civil Engineers tend to understand that the two are not completely divorced, and there's wisdom in that understanding. "Cadillac Desert" (if the phrase is unfamiliar, Google it) had some great insights into how what seems to be "science" and "the common good seen through the eyes of science" reverses itself every now and then, which made good sense to me looking back on my family history. No one asked me, but I think Civil Engineering is a most honorable calling, and one where a diligent person with an aptitude for math and logic can accomplish wonderful things.
MBA's, on the other hand....well, they're much more captive to the ideology associated with the belief that what's good for the company is good for everyone.
Your prof is only half-right. The fact is that no competetive advantage lasts forever. IBM gained a huge advantage when they came out with the IBM-PC back in the 80s. Other companies caught up and they lost that advantage. Who won? IBM for 5-10 years and the rest of us for much longer.
If IBM had not bothered to seek that advantage they would have missed that growth opportunity and I might be typing this on an advanced (but probably less satisfactory) TRS-80.
Quizno's rode "toasty" to healthy profits and growth. Now Subway has caught up. That means Quizno's has more work to do, not that they should have never sought an advantage. And I, for one, am pleased with the advanced state of submarine sandwiches in our country.
I've always been less than impressed by the Quizno'ses in downtown D.C., but maybe it's the franchise operators who are dropping the ball. I'm a Cosi man myself -- gotta love that focaccia.
Actually - the prof is right, and the pricing example is a good one. The "Toasty" example shows that yesterday's strategy (like IBM's), however successful, needs to be constantly monitored. My issue with Quizno's original "toasty" strategy is: how much would it cost Subway to install toasters in all their stores? A lot of money for you and me, but not a lot for Subway. Why didn't they do it faster? Who knows... but when all is said and done, Quizno's is "toast" if they can't come up with something else.
No more "Mmmm, toasty!" commercials.
One can only hope. All their ads seem to be aimed at 18- to 34-year-old Dadaists.
Cosi? Cosi?
Pleez ... Cosi is for pale-complected Brown-dropout, birkenstock-wearing, black-clad, depressive, tattooed, Utne reader-subscribing, sexually-questioning, alternarag-reading, Greenpeace-loving employees of nonprofit "Human Rights” groups.
That's why they have two in Dupont Circle, Eric.
Real men eat at rib joints run by guys named Bubba or Leroy.
Well, Eric is tattooed.