It’s no secret that coffee is big business. Even as far back as 2002, over 2.2 billion cups of coffee are consumed each and every day, according to an Elsevier Science Ltd report.
More recently, the industry has boomed. The US coffee industry has been fueled by coffee giant Starbucks and the coffee surge has flourished across developed nations.
Australians are leading the way, according to a recent Washington Post article:
Australians like the stuff more than anyone else—instant coffee accounts for over 75 percent of retail brewed coffee consumed in Australia and New Zealand, the highest percentage registered for any region.
According to a Datamonitor report, hot beverage sales are experiencing massive growth, surpassing $1.4 billion in 2013.
Sales of hot drink products in Australia surpassed $1350 million in 2008 and are expected to be worth $1473 million in 2013, with the coffee category accounting for the largest share followed by tea, according to Datamonitor’s report Hot drinks in Australia to 2013…
Although demand for roast coffee is growing, the at-home coffee category is still dominated by instant coffee, accounting for more than 80% of the total Australian coffee sales. Nestlé, Cantarella and Sara Lee together account for more than two-thirds of the total coffee sales in volume. Datamonitor forecasts the at-home coffee market to reach $798 million by 2013.
The rise of the global coffee market has spurned the establishment and rapid growth of coffee franchising businesses and more recently, network marketing companies, such as Organo Gold, that are using the multi-level marketing business model to tap into the home instant coffee market.
Australian entrepreneurs are also riding the instant coffee wave, with coffee cart hire alternative start-up EzyCoffee.com.au tackling the coffee cart hire industry with an alternative option; gourmet instant coffee that can be served at events and fairs for reasonable prices, without the need bulky coffee cart or coffee vans.
The demand is skyrocketing and people just want great tasting coffee in whatever form they can get it. What EzyCoffee is doing is just capitalizing on Australia’s insatiable appetite for coffee.
2014 consumption figures should be available in the second quarter of 2015.
Microsoft’s (Current) Strategy
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Anyone who has ever used a desktop computer has more than a passing knowledge of who Microsoft Corporation. They have been the dominant operating system for business and personal computer users for more than three decades. The company also has dominated the office suite market with its Microsoft Office array of word processing, spreadsheet, and presentation software. Is there any way an administrative minded person can hope to get a job without having knowledge and experience with at least one product offering in Office 365?
That was then, this is now. While the company still has a stronghold on its tried-and-tested office and desktop products, the company has recently changed its strategy and moved in a more mobile direction – focusing on mobile computing. One of its latest moves to establish an entry point is to offer its Office Suite as a free download to owners of tablets and smartphones. Depending on its historic foothold in the office applications market, it expanded the offering to run on Android as well as Windows mobile operating systems.
In order to make this major shift in strategy to mobile devices, it announced a layoff of 13,000 employees and all but killed off its Nokia line of Android smartphones. These are drastic moves, but necessary to send a message to its company and competitors that the time for mobile is now. With the announcement of the layoffs came a business strategy focused on Microsoft’s current product offerings.
Office 365 is the result of evolving from a one time, keep-it-forever pricing plan to an annual subscription. This is the result of simplifying customer support for the widely popular office suite application. Like many of its former operating systems, consumers screamed when support of their legacy products ended. The implication was that a company as large as Microsoft should stand by its $99 Office Suite forever – free of charge. Microsoft thought otherwise, and moved in the direction of an annual pricing scheme.
This change is significant as now both the desktop and mobile platforms can be supported under a single umbrella without having to deal with a variety of operating systems and hardware changes.
While mentioning the fact that you have a Windows Phone does not have the same impact or prestige as mentioning an iPhone, the reviews of the phone are fairly solid. A Windows operating system on a smartphone sounds like a logical and convenient idea, but people have not yet bought into the relationship. Part of the reason is that, once again, Microsoft ignored its necessity to or delayed its entry into the market. With its abandonment of the Nokia line, Microsoft now moves towards competing in the lower priced smartphone market, which has a wide global appeal, and plans to market its future lines of smartphone products with the Windows mobile operating system.
While there are alternatives to Skype, Microsoft once again looks to rely on its established reputation for quality desktop applications, using it as a foundation to expand the phone application into the mobile market. Several recent upgrades have made the application more user friendly, and the cost of using the app is remarkable low when considering the limitations that some telecommunication providers place on services such as international calls. The company’s strength in this area is the video capability incorporated into the app, allowing it to be video mobile and global for businesses with international offices requiring multinational cooperation to resolve product and service issues. Barriers in language will always exist, but a picture is worth 1,000 words.
OneDrive cloud storage
Though cloud computing and cloud storage are buzzwords, and very cool sounding, the need for cloud storage services will skyrocket over the next five years. When you think of cloud storage services, think of … Amazon?? That is correct. When it comes to business storage, Amazon is just as dominant as Microsoft is to desktop operating systems and Google is to search engines.
Microsoft, Google, and now Yahoo, are three major players to get a piece of the expected growth of cloud computing over the next five years. Microsoft has stepped up its advertising and promotion of its OneDrive service to businesses and consumers, which includes offering a one year subscription to its Office 365 suite of products for free when purchasing OneDrive space.
The Bing search engine
Honestly, Google and search engine are one and the same in the minds of 80 percent of the world’s Internet users. So why would Microsoft declare it Bing search engine to be part of its strategy? The simplest answer is that it does not intend to compete with Google in the usual sense of the word, but to make sure Microsoft loyalists and Google traitors have a viable alternative from a reputable, established company.
The biggest question is whether Microsoft will be able to gain a significant enough of a foothold to start making traction against mobile stalwarts like Google and Apple. To those under the age of 25, who are the trendsetters when it comes to the purchase of new mobile technology, Microsoft is more like last week’s news than a technology powerhouse. In one sense they are correct, as the company lags far behind the world of mobile computing.
But make no mistake. While desktops sales are declining, there is still a boatload of revenue coming in from its traditional software licensing agreement to fuel the mobile charge. In fact, in the spirit of its strategy change, it has modified its licensing agreements to allow a single license to be used for desktop and mobile devices instead of requiring a license for each individual device. If that sounds more like antiquated pricing policies and profiteering, you are not alone in that thinking.
Microsoft is making substantial and measured moves in starting up its competitive engine as its moves into the mobile market. It is doubtful Apple and Google are concerned much at this point. A year from now we will see whether Microsoft generates enough attention and revenue to be serious considered among the mobile heavyweights.
Small Business Web Design
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I love small business web design. It is one of the few jobs that allows me to be both creative and technical. I am also thankful to Google and SEO for adding value to my career and my work. The continual raising of the bar of excellence keeps me being creative and profitable.
The Technical Problem
With the constantly evolving page rank algorithm, the technical side of design is starting to get muted by all the SEO demands. Consider this article from MIT Technology review (http://www.technologyreview.com/news/423872/the-10-essential-elements-of-design/) that lists “The 10 Essential Elements of Design.”
l Emotional Appeal
This article was written about 4 years ago. Today, how many of these basic elements are tying the hands of designers because of the Google requirements for page rank? The article states that these elements “transcend context, industry, and geography.” Some elements such as “Tools” and “Process” have actually improved over the last 5 years, but what about the more personal and creative side of web design such as “Function” and “Aesthetics?”
The Present of the Past
There is a reason I am somewhat concerned about this trend of optimization for the sake of profit. I have a friend that got into coding for PC’s back in the 1980’s when there was only a framework for writing everything from word processing software to adventure games. The idea of a virtual window was in its infancy, and 1 megabyte of RAM was almost unheard of on a PC.
Despite these, what would be considered by today’s standards, impossible development conditions, creativity abounded. There was little standardization. For example, the Help function was sometimes accessed by either the F1 or F10 key. At the same time, there were 10 or 20 different word processors available to the user. If you haven’t heard of WordStar or Multimate you are not alone, but these were two of the more popular word processors of the 1980’s.
Now step back and take a look at what choices there are for PC word processors today. The industry has evolved considerably regarding standardization for user interfaces, but the competition revolves around a few major software companies. The user is basically trapped between a small number of products, most which have features they will never need or use. Creativity has been squashed under the wheels of progress, and all but a few profit from it. In fact, it may be argued that creativity has disappeared from PC application software.
The Web Design Connection
OK, I agree that the Internet is galaxies larger than the PC industry. It has in large part replaced the need for the desktop computer given the advances in mobile technology in particular. But for web designers we may be looking at the same problem sooner than later. It took about 20 years for independent programmers and consultants to go from relevant to obscure. The reason was that their creative skill sets were smothered by the demands for standardization by the industry and users alike.
As much as we would like to think that the size of the Internet and its global acceptance insulates us from experiencing such obscurity, the constant change in the Google algorithm may significantly diminish our relevance. Ask yourself whether you had the same design freedom you have even a couple of years ago. Remember, here we are talking about profitability as well as creativity. The world has enough starving artists and musicians.
Which leads us to …
The Business Problem
Most of us who do web design do it as a part time gig or a full time profession. The bottom line for us is important. We can get tons of satisfaction and personal enjoyment from being creative, but we still need to eat. The tendency for most things digital is to eventually become automated. When we look at this from a web design perspective, the potential of a lion’s share of our work becoming automated can be seen.
As much as we use a number of tools to do a number of the automated functions, that doesn’t being us much satisfaction – or profit. But SEO and Google continue to narrow the boundaries on what is considered to be creative – that is, if your goal is to optimize the web site for the highest possible Google page rank. This is why most clients hire us.
I am not arguing here for de-standardization or keyword stuffing. Both of these actually devalue our work. But we need to come to the realization that the more Google changes its algorithm to maximize the accuracy and relevancy of its search results, the more web design creativity will be degraded. If you Google “most important technical web design elements” you will have a choice between deciding whether 6, 7 or 10 elements are the most important. Fortunately, this is the way it should be whether Google approves or not.
It’s All About the User
One interesting problem that has come out of the SEO process is the reminder that it is the user or visitor that is the most important focus of applying all the formulas and technology. Here is where web designers really prove their worth and value. Most learning is done visually, and the art and science of web design is largely based on what is both functional and aesthetic. In other words, it is about technical knowledge and creative ability.
Unashamedly, our profession is profit motivated and user focused. If just anyone could link together the various natural skills and hands-on experience that we do, we would be making McDonald’s wages. But we do not get the profit if our focus veers away from the user. A Page One ranking is not a guarantee to unlimited profits.
Google will do what it needs to do to increase its profitability. The European community is taking steps to break up Google’s influence in the continent, fearing it will become more powerful and interfere with fair competition for businesses and limits buyer’s choices. Though it is a political statement at this point, it foreshadows what web designers may be encountering in the not-too-distant future.
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Web Design and SEO
There is a huge problem that exists in the web design and SEO communities. We know our services are in demand, and, like every other business, are looking for the best paying and highest profile clients. There is nothing wrong with showing off your design trophies. In contrast, there is the fact that about 80 percent of all businesses are small businesses who do not have the financial resources or the high profile brand names that will attract quality web designers. This mismatch has a number of long term problems associated with it, even though they are not obvious at the moment.
Problem One – Loss of Competition
The mantra spoken across the Web is that if you do not have a web presence then for all practical purposes you do not exist. This is an overstatement in some ways, because the way business is done is these places is by recognizing familiar faces. There is a small town mentality that is suspicious of strangers, out-of-towners, and large corporations – the latter of who are of special interest to those of us who have dreams of becoming one ourselves. For these businesses, an Internet presence may be trendy but not essential.
For the majority of small businesses, a web presence is essential just to remain competitive. One reason is the Google search engine which makes products and services available to anyone from anywhere in the world. You do not even have to be a user of the Internet to have heard about Amazon. The problem for the business, and the web designing community, is how to create a bridge that will allow these small businesses to remain competitive.
Why? Because if the number of small businesses begins to decline, so will the competiveness of the individual industry. Think of how a decade ago there was considerable competition in Office Suite application software, and now there are basically two very similar choices – take it or leave it. Users can complain, but no rationale person will try to go head-to-head with Microsoft or Google.
Now this may not be an immediate concern for web designers given that so many mid and large size businesses are going through SEO processes and redesigning their web sites. For experienced web designers there is plenty of work to go around. But it is impractical on many levels to ignore these smaller businesses because they do not have the financial resources to keep up with the Intel’s and Microsoft’s of the world.
Problem Two – Loss of Opportunity
The problem that coincides with a fading competition is the loss of opportunity for web design businesses. One of the first rules of a startup business is to get a few clients, excel in your performance and delivery times, and use these businesses as a reference to build your business for the long term. Don’t you think these small businesses have the exact same mentality? If you have been in business for some time, it is unlikely you have forgotten your first dollar made – or your first client.
Promoting small businesses to remain competitive will not only open doors for future opportunities, but will solidify your reputation in the industry. If you have chosen an expanding industry as your target audience, then you are keenly aware of the possibilities. As technology has advanced and the marketplace has become global, there are two events that have occurred in the business climate.
The first is that there are new industries popping up all over the world. The idea of going to a web site and advancing money for a microloan was only an idea 5 years ago. Epson has developed a new type of printer that uses an ink tank (called EcoTank for the environmentally incined) instead of individual ink cartridges.
On the other hand, industries that once were in demand and profitable have collapsed, never to be seen again. A current trend where this is happening is in the music industry, where CD sales are shrinking, and music artists are developing their own web sites to sell their music in downloadable formats. You can add streaming, YouTube, and environmental concerns to the mix of forces that are likely to doom the CD.
New products and new companies translate into a demand for new and redesigned web sites that will require web designers. Courting small businesses is not rocket science, but simply good business. Presuming the opportunities will always be there is not a solid or comprehensive business plan.
Take a Page from the Professionals
Lawyers are one of the first groups that come to mind when the words “pro bono” appear. The reason is that there is a belief that everyone is entitled to legal representation when it involves accusations of criminal actions. The intent, though hardly the reality, is that it creates a reasonable level playing field.
Web designers can do better. We have the ability to put our profit motives on hold for a short time to turn our attention to gaining some goodwill and taking a broader view of what we do for a living. The success of any business depends on the future demand of its products and services. If web designers believe their profession will be needed as long as there is an Internet, then taking a small amount of time to invest in that future is a small price to pay.
The bottom line from a business perspective and a profit perspective is to begin to look at small business web design the way 100 pennies still equals 1 dollar. You may not make the money as fast, but you will build your client base, which may be especially important in the long term. Web designers are used to creating calls-to-action, but the SEO reality is that unless those clicks translate to sales, the SEO process needs to be improved. A responsible goal is to increase the conversion rate, and that will increase the bottom line.
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Not too long ago, a certain president got elected by having an in-house campaign strategy – “It’s the economy, stupid.” It seems to be closer to the truth that his statement coincided with the explosion of the Internet and personal computing in general, so it got the intended result. But today the truth is the same regardless of the political climate.
Here are three important economic indicators that can affect your business and the people who work for you.
The Unemployment Rate
When is a lower unemployment rate bad news? When it comes in the middle of a do-nothing Congress and political apathy. The unemployment rate should be taken on its face value, not manipulated, minimized, or maximized for the convenience of political gain. If politicians have not yet noticed, there are people who not only work for a living, but need a job. Making the unemployment rate a statistic that has a definite value allows businesses and job seekers the ability to move forward with their lives.
The fact that the unemployment rate has been manipulated through the years is no secret. But what is more important for businesses is that the people who currently work for you and are under consideration for hire would like to know how stable their employment will be. One industry may flourish during bad times, while others will tank. Consider making sure your employees know what the bottom line of the company is, both numerically and competitively.
A note should be made about the relationship between the unemployment rate and the stock market. If 2007 showed the public anything, it was that the value of the stock market as an indicator of future business and economic performance was close to zero. Following the connection between the stock market and unemployment rate since 2007, the general rule is that lower unemployment rates are bad for business because hiring employees increases the amount of overhead costs. Talking heads cannot understand why it seems economic conditions are considered to be only fair seeing the rise in the stock market. This is one of the biggest reasons.
This is an area that can get very confusing and be very misleading unless you have the whole story. There are actually 3 different interest rates that make up what is commonly known as the Prime Rate. Two of these are rates set by the federal government – the Fed Funds rate and the Federal Discount rate. The third is the COFI, which will be briefly explained a bit later. These three create the Wall Street Journal (WSJ) Prime Rate, the one most often heard of and tied to the borrowing rates of business and consumers alike.
The Fed Funds rate is basically the rate charged by one bank to lend money to another bank or financial institution. Currently that rate is exceedingly low, and because of this banks can freely borrow money from one another for virtually nothing. When this rate goes up, banks will charge more to one another, which is then passed on to the businesses and people they lend money to.
The Federal Discount rate is the rate charged by the Federal Reserve for banks to directly borrow money from it. Currently this is at .75 percent. Note that difference between the Fed Funds rate and this rate is the Fed Funds rate sidesteps the government as a source of borrowing money. But in calculating the Prime Rate, the Discount Rate is added to the Fed Funds rate.
COFI is a bit of a strange animal in the rate arena, and needs a bit of explanation. Basically it is a rate calculated by the 11th Federal Home Loan Bank District that serves the states of California, Arizona, and Nevada paid to owners of checking and savings accounts. This may seem weird, but interest paid to account owners is an expense for the financial institution. The more interest paid on a checking or savings account, the greater expense to the financial institution and therefore a higher interest rate on loans must be charged.
Add the three together and you get the commonly accepted value of the Prime Rate. The current projections have an increase of the Fed Funds rate going up at the time of the early spring or mid-summer Federal Reserve Meetings. Should that happen, business borrowing costs will increase and the interest rate on most credit cards will also increase.
The Local Business Climate
Though you may have a business that is national or global, perhaps the best barometer of the economic climate that is relevant to you and your employees is the success of the small businesses that are silently part of your everyday life. Grocery stores, auto repair shops, and entertainment venues are all places that reflect the state of your area.
The case for making it an economic indicator can be made simply by creating a contrast in local economic conditions. A prosperous local climate in a depressed national or global economy will likely mean that you will find yourself attracting more potential hires because people will migrate to your local area for the jobs. In contrast, a negative local climate will result in employees potentially leaving for greener pastures, in fear of losing their jobs. A historical look at the auto industry illustrates the point.
More to the point, a bad local economy makes the national and global economies fairly meaningless. It does not matter if business is booming everywhere but you are laying off employees because business is bad. If you have a local business of the type mentioned above, a bad local economy will have a far greater impact on your company.
These three major economic indicators will definitely affect the state of your business and the morale of your employees. Decreased morale will lead to a decrease in productivity, and decreased profitability. The real world problem is that none of these factors are under your control, which is the reason you need to take special note of them during the course of the year.