Darshan Blog

News that Starbucks is closing 5% of their stores comes as more than a surprise to some. Its the canary in the mine shaft. For a year critics have been arguing about the economy and whether we are in a recession. This closure of stores can be a fine mark that a recession is upon us.

We could make the argument that the companies growth was too much too fast with every city block seems to be dotted with the ubiquitous green logo. While other coffee proprietors fight for a piece of the market and try to catch up bolstering their brand with research saying American’s prefer the taste of their more traditional bled. Even McDonald’s introduces items similar, yet many American’s now refer to a cup of coffee as not joe… but Starbucks.

A year ago a memo was leaked about the need to for Starbucks to return to its roots. Included in the changes; a need to focus on the stores which have turned into automats with green smocked employees who would just press a series of buttons to create the products with long names that signified the unique blend they request. The president wanted to bring back the originality of Starbucks. Bring back the coffee house atmosphere with conversation plus the gourmet creation of coffee, the first step would be to return to the original blend and get rid of pastries. Now it seems that the Starbucks need to close some of their stories because quite simply they are competing with each other and that system isn’t working.

I think it is all a case of bad timing. The canary has died in the mine shaft. Its warning us that worse times are on the way. A time where one cannot afford three dollar coffee and gas is at an all time high. It also reminds me of a warning I received when I first started working. A coworker advised “you know how your company is doing by the items they provide free for their employees. You must start to worry when they switch to one ply in the bathroom and when they take away the free coffee.”

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Indian outsourcers top the list of companies bringing foreign workers to the U.S. on the H-1B program. Indian outsourcers accounted for nearly 80% of the visa petitions approved last year for the top 10 participants in the program.

Microsoft (MSFT) and Intel (INTC) are the only two traditional U.S. tech companies,which are at the bottom of top 10 visa recipients in 2007. Microsoft received 959 visa petition approvals, or one fifth as many as Infosys, while Intel got 369.  

Senators Grassley and Durbin charge that the outsourcers are abusing the U.S. program. The work visas, they say, are supposed to be used to bolster the U.S. economy. The idea is that companies like Microsoft, Google (GOOG), or IBM (IBM) can use them to hire software programmers or computer scientists with rare skills, fostering innovation and improving competitiveness. Instead, critics say, companies such as Infosys and Wipro are undermining the American economy by wiping out jobs. The companies bring low-cost workers to the U.S., train them in the offices of U.S. clients, and then rotate them back home after a year or two so they can provide tech support and other services from abroad.

The offshore outsourcers deny they’re abusing the program. The visa program is open to any company with U.S. operations, no matter where its headquarters.  “The Indian IT industry has helped improve the competitiveness of our customers in the U.S.,” said Som Mittal, president of Nasscom, the trade group that represents the Indian companies. He added that Nasscom’s members are “strong upholders” of regulations in client countries.

Microsoft Corp chairman Bill Gates, told US Congress, that the United States should allow an ‘infinite’ number of high-skilled foreign workers into the US to fill vacant engineering, computer-programming and other jobs.(Source: rediff.com)

This could add more to the immigration debate, where H1-B visas are going to be one of the main topics in the policy decision.

Source: Businessweek

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Sridhar Vembu, founder and CEO of AdventNet, the company behind newly launched productivity suite Zoho. His company has a $40-million-a-year revenue business that sends $1 million to the bank every month in profits.

Zoho does everything that you would do with Microsoft Office. It also has a hosted customer relationship management service that is free for very small companies and only costs $10 per user per month for larger ones. It competes with Salesforce.com, which charges $65 per user per month.

The unique twist is that, Vembu achieves this great productivity with a workforce of 600 employees in Chennai, India and a mere eight in Silicon Valley. The company does not hire engineers from reputed colleges like IITs in India, but hires young professionals whom others ignore. Vembu says. “We don’t look at colleges, degrees or grades. Not everyone in India comes from a socio-economic background to get the opportunity to go to a top-ranking engineering school, but many are really smart regardless.”

The company trains these people and in few months there can code just like others can, often more better and produce at the levels of college gradruates.

This has created quite a stir in the business community as to how he does it.

Source: Forbes

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