Employee Empowerment and Price Penetration Recent Developments

Employee Empowerment and Price Penetration

Recent developments in the world of business offer strong examples of employee empowerment culture and penetration pricing.

Cultivating a culture of employee empowerment can increase a company's agility by freeing employees from the constraints of top-down bureaucratic decision making and decreasing the time it takes to identify and resolve customer problems. Electronics retail giant Best Buy's Twelpforce is an example of an employee empowerment concept that involves harnessing the power of online social media to identify and address customer service issues.

Customers often vent their frustrations concerning products and services online via social networking media. Twelpforce is a group of more than 2,500 Best Buy employees who have access to an employee-developed system that monitors social media feeds like Twitter and Facebook and alters the group members to posts that mention Best Buy. Twelpforce members are in positions throughout the company and around the nation. Together, compose a large and diverse customer service team that can respond to customer complaints quickly and can draw on the resources on the entire company to address services issues and customer frustrations (Bernoff & Schadler, 2010).

In one example, a customer returned his iPhone to a Best Buy because it stopped working. He had bought the insurance plan and expected to receive a loaner phone of the same make, but when the store could only loan him a Blackberry instead, he tweeted his disappointment. Automatically alerted to the complaint, a Twelpforce member responded and was able to arrange next day delivery of a loaner iPhone. The customer tweeted again, this time in praise of the rapid resolution to his problem (Bernoff & Schadler, 2010).

Twelpforce is a direct result of Best Buy's employee empowering culture. A social media specialist in the marketing department thought of the idea, and a technology worker in the e-commerce department figured out how to implement in a week. A marketing manager headed the project and saw it to through actual implementation. Best Buy's corporate leadership encouraged and supported the effort (Bernoff & Schadler, 2010). The Twelpforce story embodies all of the elements of successful employee involvement program as discussed by Kauffman; namely, it was initiated and developed by employees who identified a problem and created a solution, and the company's leadership supported and recognized their initiative (2010). If I were a senior manager at Best Buy, I would not have done anything differently.

The release of Apple's iPad 2 is illustrative of penetration pricing. A recent article in the Wall Street Journal reports that while there are almost 100 tablets similar to the iPad on the market, none of them have approached Apple's low pricing without making significant sacrifices in terms of screen size and the quality of components. Apple is known for using their advantages in company size and wealth in order to lock in great deals on components, so the company typically spends less to create their products than other manufactures (Gallagher, 2011).