Richard Franza, PhD

What can ancient Greece teach modern America about leadership, economic success and the future of business? That question is at the center of a recent commentary by Rick Franza, PhD, professor at Augusta University's James M. Hull College of Business, published in Augusta Business Daily earlier this month. In his article, "Marco Rubio's Look Back to Move Us Forward: What He Nailed and What He Missed," Franza examines a speech delivered by U.S. Secretary of State Marco Rubio in Athens, Greece, and considers its implications for American businesses, leadership and international relations. Franza explores Rubio's emphasis on ambition, competition, innovation and risk-taking, connecting these themes to the characteristics that have historically contributed to economic development and business success. He also identifies two important considerations he believes deserved greater attention: the role of morality and ethics in leadership and the importance of international trade to economic prosperity. "I am not saying we should be driven by greed and vanity, but rather be willing to continue to strive rather than waiting for others to catch up." Franza's commentary offers a perspective on how lessons from history can inform contemporary discussions about business leadership, economic policy and America's relationships with its international partners. As political and economic debates continue, Franza can help journalists explore the intersection of government policy, business competitiveness, ethical leadership and international commerce. If you're interested in speaking with Dr. Rick Franza about business leadership, economic policy, international trade and the relationship between politics and business, simply click on his profile to arrange an interview today.

In last week’s column on Super Bowl ads, I stressed the importance of providing a value proposition when you are advertising or marketing your goods and services. As a reminder, a value proposition is a promise that you make to potential customers that provides them a compelling reason why they should buy your product rather than a product from one of your competitors. Prior to developing a value proposition, you first need to understand who you are trying to sell to and what product characteristics they value. This will ensure that your value proposition will be more likely convince these buyers (your target market) to buy from you. The most effective Super Bowl ads from last week did this important work well. Once the company has a good, valuable proposition, it then needs to communicate that valuable proposition to its target market. Fortunately for companies with Super Bowl ads, just about all target markets are watching the game. However, for pretty much all other advertising and marketing, it must communicate where the target market will see or hear it. In today’s column, I will walk you through how to determine who your target market is, what they value, and finally, where to distribute your marketing messages. You are probably asking yourself, why is a guy who teaches Operations and Supply Chain Management (O&SCM) writing about Marketing? The answer is simple, really. It is the job of the O&SCM function of the company to deliver on the value proposition. So, as marketing develops its value proposition, it must confer with O&SCM to determine if the firm can deliver on that value proposition. If marketing communicates a value proposition it cannot meet, the company will likely be unsuccessful. With that in mind, let us examine the target market/value proposition development process. As a firm begins to identify its target market for a particular product, it must first determine the various potential customers who might buy that product and attempt to partition those customers into groups who value similar things. For instance, looking at the automobile market, there are some customers who value low price most, some who value performance and aesthetics most, and others who value reliability, durability, and consistency. If we are either in the automobile market or thinking about entering the automobile market, we need to find a group that values some characteristics that we think we can provide better than other market entrants. As you can see, the identification of a target market and the development of a value proposition that will appeal to that target market are done concurrently and iteratively. As noted above, the O&SCM function of the company is also brought in during these iterations to determine if the physical good can be manufactured or a service can be delivered in such a way that it can meet the value proposition. One important thing to remember is that in most cases, you are not your target market. What I mean by that is that you are often biased by your own knowledge and taste/preferences, and this may differ significantly from what your target market values. Remember that you are a unique individual whose preferences for a price point and evaluation of other characteristics might differ from your target market. Be sure to develop a value proposition that reflects the buying habits of your target market customers. Once you have developed a strong value proposition that you know your O&SCM can deliver upon, it is time to message that value proposition in places where your target market is present. As noted above, this aspect of our process is like “shooting fish in a barrel” for Super Bowl advertisers because all target markets are typically watching the Super Bowl. It is not so trivial for the rest of us. We need to understand what forms of media our target markets consume (e.g., television, radio, social media), but also, with each of these media, which applications or types of shows do they frequent. While most think social media skews young, and that is true for the most part, Facebook skews older, while Instagram, Snapchat, and TikTok skew much younger. On television, much of network television skew older, but there are shows like “Dancing with the Stars” and The “Bachelor” that do particularly well with younger women. Many mornings when I am getting ready for the day, I listen to “Augusta’s Morning News” on WGAC radio, and it is clear that my fellow listeners are primarily in my age demographic. My advice is to do your homework and find out where your target market is consuming media. All the work above is not very easy, but doing it right will lead to big returns. If you can identify who you want to target, based on what they value, and then be sure they get the marketing message that you have what they value, your business will succeed!

Hurricane Helene tore a path of destruction beginning at Florida’s Big Bend region and stretching up through Georgia, South Carolina, North Carolina, Tennessee and Virginia. As those affected have slowly been able to grasp the scope, a different form of trouble in the aftermath is creating a ripple effect that will be felt around the region, country and even the world. Western North Carolina is at the heart of the problem leading to sourcing, transportation and disruption issues. While still trying to understand the full scope of the impact in the most remote areas, ongoing recovery efforts continue following the storm where the death toll has risen to over 250 as of Oct. 14. According to Rick Franza, PhD, professor in the James M. Hull College of Business and an expert on operations and supply chain management, said lessons learned from the COVID-19 pandemic and the collapse of the Francis Scott Key Bridge at the Port of Baltimore incident earlier this year can help with mitigation of risk and recovering during these problematic times. “The biggest thing you’re always dealing with in situations like this is uncertainty,” said Franza. “You can’t expect everything. You can’t anticipate everything, but we learned a lot from COVID and then the Baltimore bridge collapse and the supply chain disruptions those caused.” Franza said North Carolina is a case study in disruption to the supply chain at three different points: the source, manufacturing and transportation. “When we think about supply chain disruptions, people don’t typically think about it affecting the physical supply, but rather the transportation and logistics,” said Franza. “This one’s a little trickier because you have one industry affected by the supply of raw materials, another affected by the manufacturing of supplies and so many more will be affected by transportation problems.” Problems in manufacturing One industry that has been heavily impacted by the storm is the medical field, particularly the manufacturing of IV fluid bags. Baxter International, one of the largest producers of IV fluid bags in the country, has a manufacturing plant located in Marion, North Carolina. According to the American Hospital Association, the Marion plant produces 1.5 million IV bags per day, which equates to 60% of the country’s supply. “There are two big questions affecting the supply chain for those IV fluid bags,” said Franza. “If you lose a manufacturing facility, like the one in Marion, does another facility or a competitor have the ability to add capacity, even if it’s just a short term? The other piece of it is, even if they have the capacity, do they have the raw material inputs? So it’s a ripple effect.” In the wake of the storm, Baxter announced its other manufacturing facilities would increase their capacity. Thanks to its new Mount Carmel Mega Distribution Center located in Mississippi, the company feels confident it will be able to meet the needs of hospitals across the country. Baxter plans to increase allocation levels for direct customers from 40% to 60% and for distributors from 10% to 60%. They are also increasing allocations for designated children’s hospitals by 100%. Problems at the source Just outside the town of Spruce Pine, a town of less than 2,200 people located in the Blue Ridge Mountains, are two mines that produce an estimated 80% to 90% of the world’s most pure quartz. The quartz found in those mines is used in the manufacturing of semiconductors for microchips for everything from smartphones to cars to medical devices and more. The two companies that manage those two mines, Sibelco and The Quartz Corp, shut down operations on Sept. 26 ahead of the storm. As recovery efforts continue in the region, there remains more uncertainty as the full scope of the damage continues to be realized, and there is no certain timeline for when things will get started again. “The issue with natural resources like quartz is, unless you’ve come up with some method of producing an artificial version of it, you can’t really make it somewhere else,” said Franza. “Since there isn’t currently an alternative, it then becomes a question of is the mine accessible or how long until it is accessible and people can get back to regular operations?” Problems with transportation In Western North Carolina, entire roads along with buildings and other structures were wiped out as streams and rivers surged and mudslides occurred. On top of getting the mine back up and running, there is also the problem of getting the raw quartz where it needs to go. “Once you are able to access the ability of the mine to get back online, you then have the problem of whether the raw material can get where it needs to go to be processed,” said Franza. “A big problem in western North Carolina is entire roads are gone, and it’s not a simple repave. On top of that, Interstate 40 is estimated to be shut down until sometime next year, so transportation in that area is going to be extremely difficult for quite a while.” The good news is that quartz and the microchips that it is used in are not perishable items, and some chip manufacturers may have several weeks’ worth of quartz supply built up to be able to continue production. But an extended shutdown will likely mean even more chip shortages, similar to the global chip shortage that began in 2020 and lasted through 2023 due to the COVID-19 pandemic and the tightened restrictions in the countries that manufacture those chips. The loss of roads is not the only source of recent transportation problems, as immediately following the during the storm there was a three-day disruption in imports at 36 ports, including shutting 14 down stretching from Maine to Texas, as 45,000 dockworkers went on strike over pay. While that disruption could have caused serious issues, particularly for the upcoming holiday season, Franza said many companies have learned from previous disruptions, and most of the goods needed for Cyber Monday, Black Friday and preparing for the holiday season were already in the country. “I have heard that somewhere between 80% to 90% of the items for the holidays are already here, so the dock workers’ strike would not have been as much of an issue for the holidays, but there would definitely have been things you’d run out of.” Franza said the biggest problem during situations such as this is misinformation. “One of the biggest problems is most people are uninformed,” Ranza said. “Look at the toilet paper shortage at the beginning of COVID. If all of a sudden people rush to buy everything up and hoard it all, you can’t meet that demand so it causes even more problems. People need to be better informed because rumors start and then more problems are caused.” But Franza reiterated that companies have learned from past events, and that planning has made the supply chain stronger. “I think we’re better than we were four years ago because each of these crises builds our toolbox on how to plan for and deal with disruptions. It has built resiliency.”