Leveraging a unique educational approach that moves beyond classroom lectures, 26 undergraduate business students from the University of Maryland’s Robert H. Smith School of Business are participating in a unique course that yields insights into how real-life companies have turned management strategies into sustained competitive advantages.
The course, “Building and Sustaining Competitive Advantages,” counts as credit for supply chain and management students, and was open to students from the Smith School and the College Park Scholars – Business, Society and Economy program. During the upcoming fall semester the students will be completing a reflection on the study trip and course projects that are linked to the companies visited. The trip was held August 18-23, 2013.
By visiting companies that include Amazon, Costco, Nike, Microsoft, Adidas, Intel, Nordstrom, Alaska Airlines, Starbucks, and Boeing, students were able to get direct exposure to companies that are leading their industries. Students hear from the employees that are developing and executing innovative management strategies and tour the companies’ facilities. At each visit, students have extensive interactions with company representatives.
“I found the study trip to Seattle and Portland to be a great learning experience,” said Smith School student Andrew Lefkowitz. These companies brought us in and shared with us their approach on a range of topics including innovation, leadership, marketing, operations, strategy and logistics, Andrew added.
Distinguished Tyser Teaching Fellow, Mark Wellman, the faculty champion of the study trip, says that the course challenges students to make connections between academic theory and real-world practice. “The course helps students integrate concepts from your previous courses and gain valuable field experience by tackling actual business problems and opportunities facing the organizations,” Wellman said. This course benefits students by providing a dynamic learning environment that merges traditional education with practical experience. Additional student benefits include learning about job markets in Seattle and Portland, meeting with working professionals, becoming familiar with a specific company's missions, values, recruiting strategies and industry trends.
Students gain great insights into how each business works, their unique cultures, and how different roles and functions work together within companies. Students are given the opportunity to ask questions ranging from how that company is reacting to particular challenges in the market to what it’s like to work there on a day-to-day basis.
The study trip to Seattle and Portland was a good introduction for those students who had never visited the Pacific Northwest before. “At the University of Maryland, and most other East Coast universities, we tend to be East Coast-centric and the Pacific Northwest is a very different place” Wellman said.
“Going on the Seattle/Portland trip was a great experience as we got to witness the cultural differences in the way business is conducted on the west coast,” said Smith School student Trey LaFranchi.
The faculty that facilitated the course, Mark Wellman and Jeff Miller, are part of a new crop of business school professors who are moving beyond books and lectures and taking a hands-on approach to getting the students to better understand their business. As founding faculty for the field study courses to the Pacific Northwest and Silicon Valley, Wellman has had exceptional access to the world’s most innovative companies. He and his students spend several weeks each year visiting with and attending master-class sessions hosted by executives, entrepreneurs, and venture capitalists in San Francisco, Silicon Valley, Seattle, Portland, Dubai, Abu Dhabi, Singapore, Kuala Lumpur, Sydney, and Melbourne. These unique opportunities help provide his teaching with a broad, deep, and continually refreshed perspective on key industry trends and developments.
Miller is a developer of award-winning inventory/asset control software and an adjunct faculty member in supply chain management. One of the major focuses of the course was supply chain management, in which Miller provided valuable insights. The Pacific Northwest is home to several major companies who use some of the most innovative management practices. More specifically, some companies in the region are deriving significant competitive advantage from their innovative management: Amazon through its unique distribution system, Boeing through lean operations and Just-in-Time implementation, and Costco through its efficient logistics network.
Summary – Company Visits
Imagine a smart ball that can help improve a players' technique through immediate analysis and direct feedback. The students participating in the course were given the opportunity to play-test the Adidas miCoach Smart Ball. The Adidas Smart Ball is designed to improve technique, power, spin and accuracy through an automated coaching system. After three years of development, Adidas has created the Smart Ball with in-built sensors that track its movement and feed the information back to the player through an app on their phone.
Along with the demonstration of the Adidas Smart Ball, students toured the Adidas North American Headquarters in Portland. The tour was led by Rich Roberson. Rich is part of the Adidas Patent Counsel. Rich earned his mechanical engineering degree from UMD in 2002 and his JD degree from Lewis & Clark.
The tour included learning valuable information about the company and the history of Adidas. Contrary to popular belief, the name Adidas does not stand for “all day I dream about sports.” The name Adidas dates back to 1948 and comes from the name of the company’s founder, Adolf Dassler. By putting together his nickname Adi and the first letters of his surname, the name Adidas was born. Students participating in the tour got to see how the Adidas design team delivers state-of-the-art sports footwear. The Adidas strategic business units for Basketball, Adventure and Alternative Sports are based in Portland. The Adidas strategy involves continuously strengthening their brands and products to improve their competitive position and financial performance. Today the Adidas Group is a global leader in the sporting goods industry and offers a broad portfolio of products.
Alaska Airlines has a reputation for outstanding service and is ranked "Highest in Customer Satisfaction Among Traditional Network Carriers" in the J.D. Power North America Airline Satisfaction Study for five consecutive years. Additionally, the Alaska Airlines fleet of Boeing jets is one of the youngest among all major airlines.
The visit to Alaska Airlines was facilitated by Debbie Keller, Managing Director of Pricing and Revenue Management. She has an impressive background as she directs the pricing and revenue management practice for domestic and international networks. She is responsible for over $3.5B in annual revenues and oversees a team of 30 pricing, revenue management and revenue analysis professionals. She earned a B.A. in economics from the University of Maryland and her MBA from the University of Washington.
Ben Munson, Director of Network Planning, provided an overview of the airline industry and explained how the airline has grown from a small regional airline to one of the most respected in the nation. Carrying more than 17 million customers a year, Alaska's route system spans more than 60 cities and three countries.
Curtis Kopf, Vice President of Customer Innovation, discussed with the class the creation of the new Customer Innovation Department at Alaska Airlines. The department is responsible for carrying out the strategic goal of making the traveler's experience from buying a ticket to the day of flight as simple and efficient as possible. Through the efforts of Kopf and his team, Alaska Airlines has significantly upgraded its online and mobile websites, and rolled out iPhone and Android apps that enable travelers to buy a ticket, track their flight status and obtain an electronic boarding pass, among other features. The most recent improvement to the apps allows travelers to see their ranking on the first class upgrade and standby lists. Alaska Airlines has a long history of innovation, including being the first airline in the U.S. to sell a ticket and check in a customer online. Kopf explained how the customer innovation department will continue that tradition by solving problems in new ways and, in the process, make Alaska Airlines one of the easiest airlines to fly.
Betsy Bacon, managing director of Alaska Air Cargo, provided an overview of the cargo business. Alaska Air Cargo has grown significantly in financial performance and customer service over the years and is an important part of the Alaska Air Group. Bacon is an eight-year veteran of the airline. She previously served as director of cargo operations and compliance where she was responsible for the airline's network of cargo centers and customer locations. The class had the opportunity to tour the air cargo facilities at SeaTac Airport.
Amazon emerged from the dot-com bubble as one of the few winners and continues to blaze a trail of impressive growth. Amazon survived the dot-com bust because it had a strong and innovative business model built around a market-changing customer value proposition. Amazon's evolution from website to e-commerce partner to development platform is driven by the spirit of innovation that plays a critical part of the company's DNA. Amazon strives to be Earth's most customer-centric company where people can find and discover virtually anything they want to buy online. By giving customers more of what they want (low prices, vast selection, and convenience) Amazon continues to grow and evolve as a world-class e-commerce platform.
Michael George, Vice President of Apps and Games, provided an overview of the Amazon business model. He explained that the model has a strong emphasis on selection and convenience supporting a better customer experience. A good customer experience brings in more customers (increases traffic) and traffic brings more sellers. Additionally, more sellers bring more selection and convenience. Furthermore, all of that growth supports a lower cost structure with economies of scale and lowers prices, exponentially adding to the customer experience.
George has been at Amazon for more than 14 years. He started his Amazon career as Director of Systems and Networking Operations. Since then, he has held senior positions that span several areas, including Director of WW third party platforms, general manager/Director of WW marketplace, Vice President of Human Resources, Vice President of WW payments, Vice President of spoken word audio and President of AmazonLocal. He joined Amazon in 1998 through the acquisition of the Junglee Corporation. Prior to Junglee, he spent 14 years in the newspaper industry. Mike has a B.S. in Information Systems Management from the University of Maryland, Baltimore County.
Boeing is one of the largest aerospace companies in the world. It manufactures and markets commercial aircraft and jetliners to the commercial airline industry. The company has approximately 12,100 commercial jetliners in service. Boeing is shaping the aerospace industry through significant innovations.
Students heard fascinating facts about Boeing and the manufacturing process. The class met with Shauna Bassett. She provides long-term region product forecast for the commercial aircraft industry with a particular focus on Europe and China. The presentation by Bassett provided students with a better understanding of the demand and supply of aircrafts in the aviation industry. Basset holds an undergraduate degree from University of Alaska Fairbanks and a Master of Finance degree from Seattle University.
Following the presentation and Q&A session, students received a VIP tour of the Everett manufacturing facility plant where the wide-body Boeing 747s, 767s, 777s, and the 787 are assembled. As the American economy grows more dominated by service operations, it is valuable for the class to visit a manufacturing operation. Boeing is the leading exporter in the United States. The tour is remarkable in all ways. The Everett plant is the largest building in the world by volume at 472,370,319 cubic feet and covers over 98 acres. Because of its size and magnitude, the factory is essentially a small, self-contained city with its own freeway (with an airplane overpass), its own railway station, fire department, security force, water treatment plant, bank, medical center, childcare center, and 19 cafeterias.
The Boeing tour demonstrates the complexity of large-scale systems integration. Boeing relies on suppliers to build more complex components of the aircraft, which means that the company emphasizes the effective integration of major parts of the aircraft system, such as fuselage, wings, and propulsion systems. Partners (both customers and suppliers) need to interrelate in the design of the aircraft. Such interrelation is enabled by virtual computer-based design. Also, the class saw very little spare inventory on the floor of the manufacturing plant as inventory is delivered on a just-in-time basis from suppliers.
Costco is famous for turning the experience of warehouse shopping into an adventure. Attracting loyal customers, Costco has grown to over 600 stores and is now a multi-billion dollar global retailer with warehouse club operations in eight countries. Costco is the recognized leader in the field, dedicated to quality in every area of their business and respected for business ethics. Despite the large size and explosive international expansion, Costco continues to provide a family atmosphere in which our employees thrive and succeed. Costco Wholesale’s entrepreneurial ability to continuously reinvent itself has given it a powerful worldwide competitive advantage.
The visit to Costco included a company presentation and a tour of the Costco distribution facility in Sumner, WA. John Zweig facilitated the visit. John has a wealth of experience with Costco as he joined the company in 1987 and has served in a wide range of roles. He provided the class with an overview of Costco operations, traced the growth of the company, and how various strategies have been employed to create a competitive advantage in the market. He also talked about the nature of competition that Costco faces and what innovative ideas it had come up with to counter them. He graduated from the Robert H. Smith School of Business with a Bachelor's degree.
Scott Lawrence, Depot Manager, provided a comprehensive tour of the Sumner Costco distribution facility. The success of Costco is moving large inventories through the system at extremely low cost and the tour provided students with unique insights regarding how Costco executes its strategy.
Intel is a world leader in computing innovation. Intel designs and builds the essential technologies that serve as the foundation for the world’s computing devices. In 1968, two scientists, Robert Noyce and Gordon Moore, founded Intel with a vision for semiconductor memory products. By 1971, they had introduced the world’s first microprocessor and since then Intel has established a reputation of innovation that continues to expand.
Our visit was facilitated by Scott Holland, a financial analyst at Intel. Scott earned his B.S. in mechanical engineering from the University of Maryland and his MBA from Krannert School of Management at Purdue. Holland provided valuable insights regarding Intel and important career tips.
The visit included a presentation that provided an overview of the company with a focus on Intel Oregon. Intel Oregon is the largest and most complex site in the world, a global center of semiconductor research and manufacturing, and the largest private employer in the state. Intel's capital investments in Oregon total approximately $20 billion and the operations have grown to include seven main campuses. Intel Oregon offers a state-of-the-art wafer fabrication development and manufacturing facility dedicated to Intel chip designs and processes. It is also home to the world's first 300mm Research and Pathfinding Laboratory where employees develop silicon technologies that are two to three generations ahead of Intel's current manufacturing processes, and develop new ways to make digital technologies easier to use and faster.
Founded in 1975 in Redmond, Microsoft is the world's largest software company. The company provides a vast range of software products and services for computing devices in both consumer and business use. These products and services include operating systems for servers, personal computers, and intelligent devices; server applications for distributed computing environments; information worker productivity applications; business solutions applications; high-performance computing applications; software development tools; and video games through its Xbox franchise.
Anton Kirilov, Principal Test Manager at Microsoft, provided an overview of Microsoft. He explained how the company has been changing its business strategy from a PC-centric computing environment to a computing platform in which diverse devices will access information on the Internet. In the coming years, Microsoft will focus on creating seamless customer experiences across multiple devices, from PCs to cell phones to PDAs to home entertainment consoles and devices.
Kirilov outlined the recent changes at Microsoft including the realignment. He explained that the goal of the realignment is to make the company more cohesive and integrated. The company will be structured around Business Groups that have their own Finance and Marketing organizations, and basically operate like islands within the broader organization. The realignment organizes the company by function; Engineering, Finance, Marketing, and Business Development. Products that had synergies, but were spread in different business groups have been brought under one umbrella, the most prominent being Windows OS for all devices now being consolidated into one group. The Engineering group will be divided into four core areas: Operating Systems, Applications, Devices, and Cloud.
Kirilov earned his MS degree in Computer Science from the University of Maryland in 1998 and joined Microsoft after graduation. Kirilov provided interesting career insights and spent the entire day with the class. The students were provided a tour of the sprawling Microsoft campus in Redmond that has over 120 buildings. The tour included going to Building 92 where students explored the vision, products, culture, and history of Microsoft. The exhibits display everything from the latest Microsoft research innovations to the very first personal computer. Microsoft believes that everyone in the world has potential and that great software can help you realize that potential. A review of the company's latest products shows some exciting technologies for home and business and results in an optimistic view about Microsoft's future.
Nike is the world’s largest sporting goods company. Nike’s success is largely the result of its endorsement and sponsorship deals, sleek marketing, and high quality products. The company takes its name from Nike, the Greek Goddess of Victory.
Recognizing Nike's corporate mindset is essential to understanding the company and anticipating what it will do going forward. Mark Pilkenton, Director of Global Brand Culture, was one of the employees that presented to the class. As one of Nike’s longest-tenured employees, Pilkenton has a unique insight into what it takes to propel a brand to iconic status on a global scale. He provided an overview of the Nike history and mindset. The company was founded by Bill Bowerman and Phil Knight as a running shoe company, but evolved into much more beginning in the 1980s. Nike went public in 1980 with annual sales of $270M and by 1984, Nike signed Michael Jordan and released its first version of the Air Jordan basketball shoe (which was originally banned by the NBA). Nike revenues would quickly surpass $1 billion two years later in 1986. Throughout the late 1980s and early 1990s, Nike solidified its position as a marketing giant with a series of memorable ads and slogans that still endure today and the company’s iconic brand survived a series of public backlashes and controversies.
The company is intensely aware of its own history and story and works to keep employees conscious of it. The waffle iron that co-founder Bill Bowerman destroyed while attempting to make rubber soles is kept on campus and was shown to the class. The class was also introduced to the list of principles that Phil Knight developed: 1) Our business is change; 2) We’re on offense. All the time; 3) Perfect results count—not a perfect process. Break the rules, fight the law; 4) This is as much about battle as about business; 5) Assume nothing; 6) Live off the land; 7) Your job isn’t done until the job is done; 8) Danger (Bureaucracy, Personal ambition, Energy takers vs. energy givers, Knowing our weaknesses, Don’t get too many things on the platter); 9) It won’t be pretty; 10) If we do the right things, we’ll make money damn near automatic.
The visit to Nike was organized and facilitated by Ken Cohen, a graduate of the Robert H. Smith School of Business. He was an inspiring speaker who facilitated the Q&A session, and provided an extensive look inside Nike Headquarters.
Founded in 1901 as a retail shoe business in Seattle, Nordstrom was incorporated in 1946 and went on to become one of the leading fashion specialty retailers. Nordstrom has 242 U.S. stores in 31 states as well as a robust ecommerce business through nordstrom.com, with its largest presence on the west and east coasts. Nordstrom offers a wide selection of brand name and private label merchandise through Nordstrom stores, Nordstrom Rack off-price stores, and online at www.nordstrom.com, as well as its HauteLook online private sale subsidiary.
Despite its position in the hard-hit retail sector, Nordstrom never experienced a quarterly loss during the recent economic downturn. Every business can learn from the world's most famous customer-service-driven company. Our host at Nordstrom, Angie Snyder, Director of Marketing Finance and Strategic Planning, explained how customer service is not a cliché or a strategy at Nordstrom but simply part of the company's core culture. With the possible exception of Wal-Mart, Nordstrom is the only major retailer with a corporate culture that can be described in detail. The company's top priority is to do whatever it takes to take care of the customer.
Snyder was able to offer an informative visit as she is a seasoned strategist who is passionate about customer service. Angie received her MBA from the Robert H. Smith School of Business and worked at Marriott after graduation. She joined Nordstrom in 2006.
Starbucks is the coffee icon that connects with millions of customers every day with exceptional products and nearly 18,000 retail stores in 60 countries. The Seattle company opened its first shop in 1971, and all these years later, Starbucks is still brewing up addictive drinks. The mission of Starbucks is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. By bringing people together over coffee, Starbucks has become one of the world's best-known brands. Fast Company recently ranked Starbucks one of the most innovative companies “for infusing a steady stream of new ideas to revive its business.”
The visit at Starbucks started with coffee tasting. The class was walked through the four steps of a coffee tasting: 1) Aroma – what aromas do you smell? 2) Slurp – Taste the coffee with a big and loud slurp. 3) Locate – Describe where the flavor notes hit on the tongue. 4) Describe – Describe all the flavor notes, and body characteristics that you can identify.
The visit was organized by Staci Banks, a recent graduate of the Robert H. Smith School of Business. She was joined by other University of Maryland graduates including Shirley Qin and Samantha Keshner and intern Josh Heckelman (currently a UMD student). Banks, Qin, and Keshner are currently in the Starbucks supply chain rotational program.
Following the coffee tasting, students heard from one of the most influential Starbucks executives that sets the human capital strategy. Rossann Williams, Senior Vice President for Global Talent Management, is responsible for leading global organization development, partner learning and development and staffing. Williams joined Starbucks in 2004 and is known for leading courageously, driving positive business results and developing strong teams and leaders. Through her tenure at Starbucks she has held various domestic positions and helped build the brand and ensure operations excellence in more than 28 international markets. She was an inspiring speaker who covered a wide range of topics including the transformation of Starbucks in addition to offering valuable career insights.
The visit also included a tour of two concepts stores: Tazo and Evolution Fresh (Evo). The Tazo store is designed to provide customers with an informative experience focused on tea and discovery. When the class entered the concept store, they were invited to explore the store, smell and experience the teas. The class engaged with employees that were very knowledgeable and passionate about tea. Evolution Fresh stores are a new concept based on selling cold-pressed juices. Starbucks acquired Evolution Fresh and intends to roll out dozens of Evolution Fresh stores in the future.
Elliott Bay/Locks/Lake Union Cruise
The class also completed a cruise through the salt water of Puget Sound and the fresh water of Lake Union via the Hiram M. Chittenden Locks (Ballard Locks). Completed in 1917, the locks provide a link for boats between the salt water of Puget Sound and the fresh water of the Ship Canal, which connects eastward to Lake Union and Lake Washington. Once in the lock, the water level dropped nearly 26 feet to bring the boats even with Puget Sound. The fresh water is exchanged with salt water. The class was able to watch the action up close and see how the locks work as the boat was lifted to the fresh water level. The cruise also included live narration of the Seattle harbor tour and a very unique perspective on the history of the harbor.
Bill Speidel's Underground Tour
The Underground Tour is considered Seattle's most unusual attraction and it involves a guided walking tour through historic Pioneer Square. The Underground is a network of underground passageways and basements in downtown Seattle. The class learned about Seattle's colorful past; how the Founding Fathers' of the city squabbling led to Seattle's complicated street system, and how the solutions to the unique plumbing problems affected the town's elevation.
Pike Place Market Food & Cultural Tour
The behind-the-scenes tour introduced students to the sights, sounds, and flavors of the Pike Place Market. The market is a historic 105-year old landmark. Students met the Market’s lively characters and heard their memorable stories. Students were also able to see fish fly and the original Starbucks store.
A particular focus of the tour was the World Famous Pike Place Fish Market. People come from all over the world to see the employees throwing fish and having fun with customers. The success of the World Famous Pike Place Fish Market has resulted in the “FISH Philosophy.” The corporate world has used the Pike Place Fish Market's concepts and philosophy to inspire and motivate employees. The Fish philosophy has four simple tenets: 1) Play. Have a little fun at work; 2) Make their day. Engage customers. Make them part of the fun; 3) Be there; 4) Choose your attitude. The Pike Place Fish Market was the subject of a documentary film and accompanying book, FISH Philosophy.