What a GAS!

GAS = Google, Apple, and Starbucks

I use all these firms as case studies in my courses, as they provide excellent illustrations of classical principles in engineering, operations and marketing.

Google
Personally I am a big fan of Google products. Gmail is amazing at blocking spam- I hardly ever see it in my Inbox. Yahoo Mail, on the other hand, is pitiful. Google Earth, Picasa, Docs, and others are applications that serve user needs very well. While YouTube was not an 'original' Google, it has provided an invaluable platform for the many immigrants living in the U.S. In my case I go there every day to watch songs from Indian movies of my childhood days. Hence my personal gratitude to Google.

When we talk about Google in class we discuss the R&D function and platform developments versus incremental innovations and marketing folks exploiting the 'network' effects. But perhaps the most important part of a discussion on Google revolves around its 'Do No Evil' ethos. I use the LETTER FROM THE FOUNDERS - “AN OWNER’S MANUAL” FOR GOOGLE’S SHAREHOLDERS to initiate discussions on management of expectations and business ethics. It takes a sense of ethics and some guts for managers like Dr. Brin and Mr. Page to say the following:
As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to “make their quarter.” In Warren Buffett’s words, “We won’t ‘smooth’ quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you.”

Recently, Google made news for deciding to raise the fees it charges its employees for day care for their children. It is quite amazing what people expect out of Google, when one considers the fact that more than 45 million people in the U.S. have no health insurance, and the big names in big industries like air travel and automotive are dramatically cutting benefits.


Apple
Apple is synonymous with Steve Jobs. Much has been written about the iPods and the iTunes and the iPhones, and how the 'i' mystique is helping Apple sell more Macs. I remind students that new product development involves placing bets, and even the smart people have dogs to go along with the stars. Apple's Newton and Steve Jobs' NeXT workstation both ended in the trash heap of electronic products. Apple's pricing of iPod is an excellent illustration of skimming the cream and following up with a broader penetration pricing.

Starbucks
As a coffee lover and an avid coffee drinker I enjoy Starbucks coffee regularly. I have witnessed its meteoric rise and its current struggles. I often discuss the positioning of Starbucks relative to its peers in my marketing course. My students and I eventually capture it as "A Luxury You Can Afford." I emphasize that it is not "Affordable Luxury," or luxury that has been watered down to be affordable. Rather, it is a true luxury, but something that a regular Joe or Jane can afford, as opposed to a Ferrari. An article today titled "Starbucks tests free coffee vouchers, discounts across US, but says no value menu in sight" provides more data points from Starbucks' managers.