Evolution of Economy

From linear to reuse to circular economy.

Circular Economy

From linear to circular economy.

Examples of Circular Economy

Circular Economy Opportunities
 Ranpak:

 Waste management, recycler, refurbishment:

An Economy of Goods and Services
 Good: Physical product that a person can see, 

touch, or consume
 Durable good: Product that does not quickly wear 

out and lasts at least three years
 Non‐durable good: Perishable and lasts for less than 

three years

 Service: Primary or complementary activity that 
does not directly produce a physical product

 Combinations of goods and services
 Many goods are sold with service components
 Many services are sold with a tangible item

Similarities and Differences
Between Goods and Services
 Similarities between goods and services
 Provides value and satisfaction to customers who 

purchase and use them
 Can be standardized or customized to individual 

wants and needs

 Differences between goods and services
 Goods are tangible while services are intangible 
 Customers participate in many service delivery 

processes and activities, but not in goods production
 Goods can be stored while services cannot be stored 

as physical inventory
 Demand for services is more difficult to predict than 

the demand for goods

Gradient of Goods and Services

Examples of Goods and Services
Can you tell whether the following are goods or services?
 Can it be prepared ahead of time?
 Can it be stored?
 Does it require customer participation?

Delivering
Goods

 Customers go to 
Goods

 Goods go to 
customers 

 Customers and 
Goods meet halfway

Delivering
Services
 Customers go to 

Services
 Services go to 

customers 
 Customers and 

Services meet 
halfway

Goods Can/Should Be
Turned Into Services

Benefits: To avoid price 
comparison, to turn one‐time 
transactions into longer term 
relationships, to add value to 
goods sold.
How: By bundling goods 
and/or service components 
(installation, repair, warranty, 
tech support, subscription).  

Subscription Models
Instead of customer‐initiated purchases, the 
subscription model sends products/services to 
customers at pre‐schedule times until it’s cancelled. 
Examples include newspapers, Cable TV, streaming, 
gym membership, meal deliveries, wine clubs, etc. 

Benefits:
Customer loyalty 
Upsell opportunities
Predictability (inventory, capacity, cash flow)

Customer Benefits Package
A CBP is a combination of goods and services that adds 
value to the primary product acquired by the 
customer. For example: McDonald’s CBP.

Customer Benefits Package
Pizza is a good, not a service, right? The CBP 
looks at the offering and determines what 
customers actually buy.

What do you buy
a Rolex for?

Do you buy a Rolex to tell time?

Why do you think your husband 
bought you the largest diamond 
ring among your friends?

Examples of CBP
Examples of supply chain elements in this e‐commerce 
era. Please listen to the following broadcast: 

https://www.cnet.com/news/walmart‐plus‐targets‐amazon‐prime‐with‐cheaper‐98‐
membership‐fee/

OM Elements in CBP
What operations elements are or should be in the CBP, 
especially in this e‐commerce era? 

Discussion Questions
Please research the following questions and 
provide evidence to support your answers. 
Everyone: Think of three goods and services you purchased in 
the past few months: 1 mostly goods, 1 mostly services, and 1 
about equal part of both. Which one is more profitable for the 
seller and why? What are their CBPs? Can they be turned into 
subscriptions? Why or why not?
Everyone: Do you know how active it is for people to buy/sell 
used goods online on eBay, Craigslist, Offerup, Facebook and in 
physical stores like Goodwill and Re‐store? What are some 
business opportunities there?
Everyone: Explain and list all the benefits in the CBP related to 
selling groceries in store and online with same day delivery. 

Group
Discussion

Be sure your group is ready to lead and/or discuss 
the following question in class, with research or 
facts‐based evidence. 
What’s the business model of Dollar Shave Club? 
Why did DSC become popular? Is it easier to run 
operationally? What can DSC do to incorporate 
the circular economy concept in their operations?

Guidelines for Journals

Each week, you write in Canvas to answer every question in the end of every PPT/PDF of the
same week. Your answers are a direct response to my questions and a self inquiry to satisfy your
inner hunger for knowledge. You should start by repeating my question, followed by your
answer and additional thoughts, and references if any, for over 150 words. (see examples) Be
sure to provide a link if you reference anything online. Please submit work before weekly
deadline on Saturday. Canvas keeps all your submissions and I am able to see them all when I
grade them twice a quarter. Your work is considered late if it’s not in by the weekly deadline.

Journal Grading Rubric

Sample Entries for Journal (good examples)
(exceeding word count minimum, separate paragraphs, personal experiences, personal thoughts,
reference to course materials, answers to all questions)

(Repeating question, exceeding minimum word count, detailed explanations with personal/work
examples)

Everyone: Do you practice Mise En Place in your everyday life? Why or why not? Explain and
give two examples at least.
I do practice mise en place to some extent. Mise en place is a French term meaning put in place.
It teaches us to prepare for the upcoming tasks with all the materials and processes ready ahead
of time. In the podcast, I also learned the seemingly contradictory way of going slow so you can
go fast. Taking time to plan and prepare oftentimes makes things a lot easier and faster when it
comes down to execution. If one rushes into doing things without much preparation and thinking,
it may not save time in the end as it may require second or third stitches to save it. So this “go
slow to go fast” makes a lot of sense to me.
When I cook, I put out all the ingredients and seasonings. I’d wash the veggies, cut the meats,
and take the seasonings out near the stove so I can access them when needed. And the cooking
does not start from the kitchen; I plan ahead for the meals I wanted to prepare then come up with
a shopping list so I get all the ingredients I need at the supermarket. I also browse supermarket
flyers so I know what’s on sale therefore I can save money on family meals with these items.
At work, if I have a meeting tomorrow, I’d prepare the meeting materials the night before and
put them in a folder so the next morning it’s grab and go. I also mentally go over the meeting
process and read the background information to make up my mind and take my positions before
the meeting. I may be convinced by my colleagues to take a different position at the meeting but
I pretty much know what I would say before I enter the meeting room.
I am glad we are learning this mise en place in this class. Now I know what I have been doing
right is based on scientific research! I’d be more systematic in the future when it comes to
organization and implementation of tasks.

(Repeating question, exceeding word count minimum, answering all sub-questions, detailed
explanations with personal/work experiences, arguments backed by evidence in real life cases
and theoretical references)
1. What is Customer Lifetime Value and how do companies use it to drive revenue growth?
Should companies treat customers differently based on their CLVs? Why or why not?
Customer Lifetime Value is the total revenues a customer brings to the company over the
lifetime the customer does business with the company. Over time, customers leave the company
because of demographic changes, relocation, changes in preferences, dissatisfaction with the
product or service, or other reasons.
Companies should treat customers differently based on the “values” or profits that they bring to
the company. The relationship between customers and companies is one of the most important
factors of the competitive advantage because “customer satisfaction and loyalty affects the
bottom line.” (Pg.57). Competitive advantage is described as “a firm’s ability to achieve market
and financial superiority over its competitors.” (Pg. 71). In my opinion, a company benefits
greatly from the relationships that it builds with its customers because it creates an avenue for
financial and market growth.
Customer loyalty continues to drive profits even during slow economic periods. Loyalty
marketing is an example of how businesses can focus on retaining and growing their customer
base by providing incentives to customers. This is why Macy’s always has special deals and
exclusive promotions for their credit card holders. Other companies in retail, tourism, travel,
hospitality also have developed similar programs to deepen their relationships with customers
and to drive revenues growth.

Recently, there has been a push to incorporate social media into loyalty marketing. Companies
are now providing incentives to customers that subscribe to the various outlets of social media
that are used by the company. For example, companies are now using Facebook and Twitter to
advertise special incentives to those who subscribe to their feeds. Loyalty marketing has a
significant impact when combined with social media because it reaches target markets fast. It is
also an effective way for companies to reach into new markets with minimal effort or expense.
References: Collier, David A., and James R. Evans. OM4. Mason, OH: South-Western Cengage
Learning, 2013.

Sample Entries for Journal (bad examples)
(missing one or more: not enough words, one big paragraph, quotes from web without reference,
no reference to course materials, not answering all questions, one entry for three questions, not
including my original question)

(Personal opinion, no references) Jack Welch: I don’t like his style. I think he is too mean.
Managers should be kind. They should keep employees happy to be productive.

(Really?) Please develop a quantifiable measurement for the quality of In-N-Out hamburgers:
Sorry but I am a vegetarian so I wouldn’t know.

(Definition) MTO: Make to order, a way to make stuff.

(Not meeting word count minimum, two answers in one entry, not separating answers, not
answering questions fully)
Everyone: Describe the servicescape of a family doctor’s clinic.
2. Find a low contact service and explain why low contact is preferred or beneficial.
The service scape of a family’s doctor clinic is sort of the same throughout all medical
professions. They all have a waiting room/ lobby where the patients sit before being seen by the
doctors. Receptionist desk is where you’re first helped and asked to fill out any paperwork.
Normally credentials or certificates will be displayed around the reception area. Family doctor
clinics are distinguished by a small section normally designated for children filled with books
and toys. One low contact service that i found is the automated self serve car washes. Low
contact is preferred and beneficial for many reasons. These car washes give a full car wash
within minutes and let you vacuum on your own. This can be seen as preferred or beneficial
because it removes human error and lets you vacuum to your liking. No dialogue or transaction
interactions also aids in reducing the time you spend cleaning your vehicle.

(Not repeating question, not meeting word count minimum, two answers in one entry, no depth,
writing is distractive, can you capitalize I?)
The product i found i like that is designed for the environment is bamboo straws. They are not
only aesthetically fun, but also an eco friendly alternative to plastic straws. These straws are
made from regular bamboo stalks, which means they do not under go any sort of processing, and
can be washed and reused. The example i found for a product that adds a pink tax is women’s
shaving razors. This product is the exact same as the mens counterpart, but has something known
as the pink tax taking effect, which ups the price. This is a price discrimination since its a
women’s product and the sellers know its a necessity for them.