How Good is Your Latte Recitation?

Ever try to memorize all the different lattes and crazy names of coffee served at Starbucks? Well, this customer did… to some extent.

A Starbucks lover who calls himself Dragonblink, also created a comprehensive list to help customers break down names of coffees at Starbucks stores. Ever wonder where these names come from?

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Starbucks goes Red…

Anyone frequent to Starbucks website would notice that their site has been re-designed with lots of red. Also, the site display these words “We believe it’s better to give and receive. Any time you buy a Starbucks Red exclusive, we give 5 cent to the Global funds to help save lives in Africa.” It’s also placed in their stores. Wondering why?

Starbucks has not lowered its price, but it’s trying to find a way to the hearts of customers by partnering with Rock star and activist Bono. The singer is trying to push a fight against HIV and AIDS in Africa by partnering with some U.S. companies to lunch series of products. These products are branded as “Red” and part of the money raised from these products will go to fighting AIDs in Africa. So Starbucks now gives its customers the choice of buying beverages listed under “Red,” from which the company will donate 5 cents per purchase until January 2nd. These beverages are: Peppermint Mocha Twist, Gingersnap Latte and Espresso Truffle.

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Credit Card Industry Rule Changes-Good News for Consumers?

Some good news for consumers, if not for credit card companies, may come as early as Thursday when the Federal Reserve will vote to approve 1,000 pages of new rules on the credit card industry. The rules also need approval from the Office of Thrift Supervision and the National Credit Union Administration.
One of the rules that could be changed would be the universal default law that allows credit card companies to hike up interest rates if the consumer defaults on other bills, utilities or even a gym membership. Another rule would prohibit the credit card company from raising fees or interest rates at will, unless the customer was 30 days behind on payments.
The credit card companies have said that the response will be to raise interest rates for all customers and to restrict the amount of lending. In different times, credit card companies sent out eight billion credit card applications a year in an attempt to get cards into people’s hands.
In the last decade there has been significant legislation to make it more difficult to declare bankruptcy.
“It’s you against an entire army of MBAs, whose job is to do nothing but maximize profits for the company,” said Elizabeth Warren, a Harvard Law Professor, on NPR. Warren related an account her law students trying to determine the interest rate from one credit card mailing. “It took 80 of them the better part of an hour working together to make sense of it. What’s the chance an ordinary customer is going to figure it out?”
That is, Warren said, the entire point. By agreeing to the terms of the credit card, the consumer has lost their ability to sue in a court of law, but instead must have the dispute mediated by an arbitration court. In those cases, the banks and credit card companies win 94 percent of the time, said Citizen Union, an organization that aggregated the data.

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Discover Introduces Biodegradable Card

Just in case you were holding off on throwing the credit card in the trash, because you were worried about the possible environmental impact, Discover has some news for you.

Discover Financial Services announced the introduction of a biodegradable Discover Card, the only U.S. biodegradable consumer credit card currently available in the marketplace.

“The biodegradable Discover Card is another way for environmentally conscious consumers to do their part to help protect our planet,” said Kelly Tufts, director of marketing planning & strategy at Discover Financial Services.
With the way the economy is going, perhaps the other card companies should make their cards easier to throw out, too.
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What I learned about Fast Food

Fast Food companies are a marvel in logistics and marketing

Fast Food companies are a marvel in logistics and marketing

I’m as anti-fast food as they come. Since I moved to New York in 2003, I’ve eaten at McDonald’s once (a post-drinking Big Mac run) and Burger King once (while I was covering the company) in the city. I’ve eaten fast food a couple of other times in that time on road trips when it was the only option.

But saying that, I’ve come to respect the fast food giants Burger King, McDonald’s and Yum Brands (KFC, Taco Bell and Pizza Hut) for their logistics and ability to get new markets to embrace their food. The growth of fast food in China is staggering and they had no concept of hamburgers before McDonald’s arrived in 1990. Now whether this is a good or bad thing isn’t for me to say. If people are choosing to eat it, then not much can be said.

Fast food companies have also taken the criticism of their food’s nutritional value and turned to more healthy alternatives. Burger King, like many chains, got rid of artery cloggin trans fats in October. McDonald’s even advertises its salads.

I still won’t choose to eat at a fast food joint, but I have much more respect for the business acumen and ability to make money, even in a downturn. All the major fast food chains had income growth in the third quarter and McDonald’s is the only stock in the Dow Jones Industrial Average that has a higher now than it did a year ago.

So I’m not saying go eat Burger King and McDonald’s, but at least respect them. These American companies truly dominate their global industry and that can’t be said about many companies from the good old US of A anymore.

Peace and good luck to everyone after graduation.

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More Lawsuits for Charney

Seriously–maybe if Dov Charney would just put some freaking clothes on, he wouldn’t be getting sued every time he turned around. The latest suit comes from an ex-girlfriend of Charney’s, who was there at the start of the company waaaay back in 1996, when it was a little start-up in South Carolina.The ex-girlfriend, Nikki Yang, claims that she is owed shares of the company and that she was forced to work with a nude Dov Charney. (Really, Dov? Is it really that painful to, I don’t know, wear underwear?)

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Analyst: "A Lot of Restaurants Are Just Going to Go Away"

During my reporting for the corporate strategy piece, I talked to one restaurant analyst who gave a very stark assessment of the restaurant industry.

A restaurant analyst says there are too many restaurants and many, like this one, will close next year.

A restaurant analyst says there are too many restaurants and many, like this one, will close next year.

“What you are going to see is that a lot of the restaurants are just going to go away,” the analyst said. “There has to be some rationalization with the amount of food choices out there. You will see some restaurants go out of business.”

His reasoning was quite simple. There are just way too many restaurants in many parts of the country – especially in the suburbs. In the United States and most developed nations there is a restaurant for about every 300 people, but in suburbs and some cities that can fall to as little as 100. Just for perspective, the ratio in China is one restaurant for every 2,000 people.

The analyst, who I’m not citing because I told him I wasn’t writing for publication, believes that several restaurants are just holding on to see what the holidays will be like and when they turn out to be far below 2007’s sales, they will close or be bought by someone else. But he didn’t include Burger King or other fast food chains.

“Some of the more casual dining, some of mom and pop stuff is going to go away,” he said.

He also thought that just the concepts of some restaurants could vanish.

“You might start getting rid of some of these casual dining concepts,” said the analyst, who has a buy on Burger King. “There could be no more Applebees. Then they would go to Burger King. I think its a long term benefit [for Burger King].”

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The Double-Edged Sword of Franchising

The basic model of franchising is that a company sells franchise rights to someone and that party then opens a franchise and gives a predetermined portion of revenue back to the company that issued the franchise.

The Whopper

The Whopper

In simple terms, it’s kind of like outsourcing your business expansion. You don’t have to hire employees or pay for their benefits, you just get a cut of their sales.

In many franchise models, the franchiser offers guidance, training and some rules of operation that the franchisee must follow. Where this can get tricky is if the franchiser, someone like Burger King, wants to institute across the board rule changes that franchisees don’t want to follow.

And that’s when lawsuits arise and that’s what exactly is happening with Burger King. Several franchisees have sued Burger King over the years. Some have sued because they wanted to raise prices. And now many are suing because they are fighting a rule change by Burger King that calls for all stores to stay open until 2 a.m. Thursday through Saturday from the current 11 p.m. BKC is doing this to keep up with McDonald’s and Yum Brand (KFC and Taco Bell), which went to late-night (all day) hours several years ago.

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News for News Companies: Railroads, Politico/Reuters, and NYT Wage Freeze

 

What do newspaper companies have in common with railroads?

What do newspaper companies have in common with railroads?

 

 

James Surowiecki, who writes a New Yorker business and finance column, compares the newspaper industry to the railroad industry at the turn of the twentieth century in a new piece called “News You Can Lose.”  Some believe that the railroad industry began to have serious problems in the 1900s because it thought it was in the railroad business, rather than a transportation business, and thus was unable to expand to trucking and air transport.  Surowiecki writes, “By extension, many argue that if newspapers had understood they were in the information business, rather than the print business, they would have adapted more quickly and more successfully to the Net.”

The bad news for media companies has been in full drive recently, only exacerbated by the financial crisis.  Ad revenue has dried up, and online ad revenue hasn’t been nearly as lucrative as print.  Big names that used to advertise in papers like the Washington Post or New York Times are now struggling to stay in the black, like real estate companies and big department stores.  For journalists coming of age now, it’s hard to believe it, but newspaper companies used to have profit margins that were the envy of other industries.  That is, until we became the new railroads? Continue reading

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New Brews…

When Starbucks began over two decades ago, it’s primary focus was making new coffee brews. As it is well known, the coffee company over the years have diverted to adding other line of products to its list. From teddy bears, mugs, to records, the coffee company has widened its sales options. But as the economy tightens up, Starbucks is going back to its root purpose, making new coffee brews. But some argue the new brews taste like dishwater.

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