Assignment 6A - Identifying Opportunities in Economic & Regulatory Trends

• 1. Economic trend: Basic Economy Passenger Face Extra Fees for Carry-Ons
• A). Source: http://www.ibtimes.com/basic-economy-passenger-face-extra-fees-carry-ons-2590082 
• B). There is an unmet need with passengers flying on American Airlines and United. These customers are unaware of the extra fees that can be charged when at checkpoint or at the gate to board the plane for having an oversized carry-on. These fees can cost $50 or more per item.
• C). The prototypical customer is anyone buying a ticket to fly with American Airlines or United.
• D). The opportunity can be both easy and difficult. A spokesman from American Airlines has stated that these fees are very obvious for customers interested in flying with the airlines. It’s even stated that a customer can go back to check-in the bag to avoid extra fees before boarding the plane if they have enough time. They are also told to measure and weigh the bag before checking in to avoid these “gate-service” or “gate handling” fees. The difficult part is those who are used to other airline companies and do not know that these airlines are charging these fees. It would be assumed that all airlines have the same carry-on process, so unfortunately people get charged these fees without realizing until last possible minute.
• I see this opportunity because I have realized that there would be these fees when wanting to buy a ticket with these airlines. Sometimes it’s cheaper to buy a ticket with another airline and pay their fees of checking in a bag versus having to pay the extra fees for an oversized bag, etc. It’s unfortunate because airplanes are making the overhead slots smaller for a carry-on luggage so you won’t know if your luggage is outdated in size until you get to the airport to measure and weigh it. Airlines do not necessarily always update this information on their websites.
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• 2. Economic trend: McDonald’s Will Offer $2 Espresso Drinks in Apparent Bid for Starbucks Customers
• A). Source: http://www.ibtimes.com/mcdonalds-will-offer-2-espresso-drinks-apparent-bid-starbucks-customers-2587040
• B). The opportunity is that McDonald’s is becoming a top competitor for Starbucks. They started the McCafe branding in 2009, but they’re now expanding their coffee menu that compares to Starbucks. They’ve also released a series of bottled McCafe drinks which competes with Coca-Cola, Dunkin Donuts, etc. McDonald’s is selling their McCafe drinks for just $2.
• C). The prototypical customers are those who purchase their coffee drinks from Starbucks and McDonald’s, especially, but also anyone who enjoys coffee.
• D). McDonald’s is making it much more difficult for their competitors to keep up with their prices. Starbucks has always been known for being overpriced, so why would customers continue to purchase their drinks there if McCafe is only $2. McCafe is also expanding to grocery stores, which fast food restaurants have never done before.
• I believe there is an opportunity because of the price differences between McCafe and the top-selling coffee company, Starbucks. The only reason this opportunity would not fall through is if people like the coffee more from other places. McCafe has been running since 2009, so there is no reason this wouldn’t fall through for McDonald’s.

• 1. Regulatory changes: Starbucks wants a bite of lunch, while rivals watch and worry
• A). Source: https://www.usatoday.com/story/money/2017/09/18/starbucks-wants-bite-lunch-while-rivals-watch-and-worry/671411001/
• B). Starbucks, ruler of the coffee business, is now creeping into lunchtime hours by selling selects foods in some of their locations. They’re hoping to branch out and expand their “Mercato” menus to most of their locations by 2021. This opportunity exists because of how famous the company is just for their coffee alone. Imagine how much they can do if they begin selling food.
• C). The prototypical customer is everyone, but mostly those who already buy coffee at Starbucks and want to take a snack for the road.
• D). This opportunity seems relatively easy to exploit because they are already getting much hype from just the very few locations that are already testing out the “Mercato.” It can be a downfall also because these are pre-made meals, meaning that you cannot take out or substitute an ingredient of your like/dislike.
• I see this as an opportunity for Starbucks to grow and become competitors with other restaurants like Panera Bread. They can expand their coffee shop into much more. They already have a mini bakery in which people get snacks with their coffee for the day. I’m sure there will be many people happy to know that they can get their morning coffee and mid-day snack/lunch in the same place whenever they’re in a hurry.
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• 2. Regulatory changes: Electric Cars May Rule the World’s Roads by 2040
• A). Source: http://news.nationalgeographic.com/2017/09/electric-cars-replace-gasoline-engines-2040/
• B). A recent study shows that electric cars may overrule gasoline engine vehicles sooner than we think. This notion of having solely electric cars on the road has gone through much speculation since the first electric car came out. This seems to be a very likely opportunity due to the fact that everyone wants to get their hands on one of them. Also, many more manufacturers are estimating a time when all they will be producing is electric vehicles.
• C). The prototypical customers are those who currently drive some sort of vehicle. It is estimated that there are one billion registered vehicles on the road today.
• D). The opportunity is very easy to exploit since recent studies are continuing to raise the percentages of when the electric car will take over. Bloomberg New Energy Finance has raised their estimate from 35 to 54 percent of electric cars that will be on the road by 2040. RethinkX is stating that the majority of cars on the road in 2030 will be electric.
• I believe this opportunity exists due to the working example, Tesla. This company has been making electric cars for quite a while, but they have been known to be too expensive. Tesla’s new model 3 was made for the common man to be able to purchase at just $35,000. Almost half a million people pre-ordered the vehicle in 2016 and this past August was when the first deliveries were made. This notion of having all vehicles be electric by 2040 is highly likely. Volvo, Jaguar, VW are all on the right track to make this happen. Volvo hopes to have all vehicles produced to be electrified by 2019. That’s less than two years away!