The Secret of Starbucks's Success

 

The word “Starbucks” flashes across anyone’s mind, even for a moment when we think of coffee. Though there are many coffee chains, Starbucks is the only one that has transformed the way we experience coffee. It is an American company that started in 1971. But in 1987, it was acquired by Howard Schultz, and it was under his tutelage that it was raised to become a colossal coffee chain. Starting with a single coffee shop, the company has a fleet of 32,000 stores today. It has become a premium coffee brand giving the enriching experience of coffee. But how was Starbucks able to achieve this feat? There are many successful coffee chains, but what keeps Starbucks outperforming all of them. It employed some tactics that we will see one by one.

First and foremost, the baristas (the person serving in the coffee bar) were provided with extensive training in hospitality. The baristas developed such a level of connection with the customers that they used to remember the customers’ names and their coffee preferences. And in some instances, this connection became so wonderful that Starbucks Baristas used to get invited to their customer’s weddings. This was the deep-rooted connection that Starbucks was built upon. And this was the reason why people love to visit the store, not with the intent to visit a coffee shop, but to a place next to home.

Secondly, they focused on mass customization wherein they provided personalized food experiences to their customers. The barista takes special instructions given by the customer to ensure the order is specially made according to the customer’s liking. In case the customer is dissatisfied with the order, Starbucks remakes it to give customers a pleasurable experience.

Third, they focused intensely on Sensory Marketing to attract customers to its stores. For instance- they make sure that the aroma of the coffee is strong enough to elicit a sensory reaction from its customers. For that purpose, they even stopped serving breakfast with eggs because it would interfere with the fresh smell of coffee. Also, the music they play in the store is very carefully selected to create the “Starbucks experience.” The songs played in the store are sent directly to each location from the company central location. And the layout of the café is structured in such a way that the customer can see the entire process of brewing the coffee, giving an aesthetically appealing experience.

Also, they are following a little weird marketing tactic in which they deliberately write the wrong spelling of your name on the coffee mug. The customer, upon seeing this, will post it on social media and will indirectly expose the brand among its followers. There is a hashtag trending #StarbucksNameFail having more than 30,000 posts on Instagram. Even if we assume that each of these people has around 100 followers, we can say that about 3 million people were exposed to the brand for free.

Though these are some of the measures they followed to attract customers to their stores, the most important of them is “HUMAN TOUCH.” It is their core philosophy. They have created their brand image not as a coffee-company serving people but as a people company serving coffee. And herein lies the significant difference, because in coffee-company serving people, your priority is coffee but in people-company serving coffee, your priority is people, and coffee becomes a mere instrument of your service. They have also taken many community initiatives like hiring military veterans and widows. Using reusable cups made of recyclable materials. During the recession, when companies were saving every penny, Starbucks spent around 30 $ to help the people of New Orleans who were devasted by the flood. About 10,000 Starbucks employees spend 50,000 hours to revive the flood-ravaged city. While most corporations find loopholes to escape government regulation, Starbucks was spending millions of dollars to go beyond government regulation both for the environment and the people it serves.

It is easy to be a huge brand but very difficult to be a memorable brand. In this world of digital communication, where the power of human touch and compassion are often undervalued, Starbucks has practiced and embraced it in the right way and has become a memorable experience for its customers.

About the Author

Praveen Kumar

Pursuing PGDM (Finance) at IMT Hyderabad

Interests in Automobiles, Politics

MENSA BRANDS: HOUSE OF BRANDS

 

Any seller would like to promote his products to increase his sales. However, the seller/manufacturer will have to establish and contact his network of people to sell the product to increase sales. What if you can sell his products to your friends, family or social groups and charge a certain mark-up over and above the selling price stated by the seller? Meesho is one such platform where the sellers display their products, and individuals can post these products on social media platforms to sell them to their known people. Once the order is confirmed, the logistics are managed by Meesho. This way, the seller earns his share of money and saves money on logistics, the reseller or the middleman earns his mark-up on the product, and Meesho earns a commission from the seller, creating a win-win situation for everyone.

Every business strategy starts with an idea. Similarly, Meesho was started with the idea that revolutionized the buying and selling on social media platforms, paving its way for social commerce in India. The founders of Meesho- Vidit Aatrey and Sanjeev Barnwal came across a local shopkeeper in Koramangala, Karnataka, who frequently uploaded pictures of his products on WhatsApp and Facebook and customers placed orders through these platforms that contributed to the revenue for that local shopkeeper. Vidit and Sanjeev were intrigued with this unique and simple idea that is now ruling the online reselling business with its robust business model. Meesho is gaining more popularity in Tier 2,3&4 cities, with more women using this app to generate revenue. Meesho also successfully took steps to empower women to build their own identity and use Meesho as a source of income. It is apparent that data and the internet are a constraint in rural areas and people in these areas use older versions of android mobile phones. After understanding the problems local shopkeepers and shoppers face, the Meesho app is built at a mere 14.5MB, making it the lightest e-commerce app in India on Google Play Store. This helped optimize the e-commerce experience in Tier 2 and 3 cities by giving unparalleled user experience to its app users and is available in 7 different languages.

You must have understood from the Meesho story that every business is only an idea away. Moreover, in my opinion, it is easy to grow a business if it is for the benefit of society as no business can exist in silos. So, let us all get started with building our empire of dreams which is only an idea away.

In the era of startups where most startups are at a loss and are a billion-dollar company, Mensa brands are one startup that is not only a billion-dollar company in less than six months but also profitable in the market. So, you all will be thinking about what such Mensa brands have done such that they have become the fastest-growing startup in Indian history. So, .it all started when the founder of Mensa brands, Ananth Narayanan, saw an opportunity in the small and medium scale business where they had good products but did not have enough capital, good technology, and supply chain management.

Mensa brands strategy:

So basically, Mensa brands follow the Thrasio model. This name became famous because of the meteoric rise of an American startup called Thrasio. Thrasio is a company founded in 2018, and within just two years, it hit a billion dollars valuation to become one of the fastest-growing unicorns in the world. So, you all will be thinking about how the Thrasio business model works? Thrasio looks for a small-scale entrepreneur who manages everything from marketing, listing, manufacturing, packaging, and even shipping. This is both highly tedious and costly, and especially when they are selling online on a platform like Amazon where there is cutthroat competition, it becomes challenging for small-scale brands to bring new products and scale their brands, therefore despite having a great product, these small-scale entrepreneurs reach a saturation point. And if they want to grow any further, they either must take hefty loans or, worst-case, they must take personal debt. This saturation of growth is where Thrasio comes in, where they bring both credibility and insight on how to grow these small skill brands, and using their credibility, they raised a million dollars in funding and started offering an exit strategy to these great entrepreneurs.

Once this business is acquired by Thrasio, the company uses its scale capital and expertise to grow the operations further. The same approach has been applied by Mensa brands where they offer a good brand story to the existing product, better copywriting to the product, taking good pictures of the product by hiring high skilled photographers and videographers, better digital marketing strategy to a product where they would not only be selling on a particular platform like amazon and Flipkart but also increasing its reach by promoting on Facebook, Instagram and other social media applications. Because of having good funding from the investors, the Mensa brands can do celebrity endorsement also, which again leads to more brand value and increase its visibility in the market. Lastly, the Mensa brands built an extensive supply chain to get the product into retail shelves like Dmart, jiomart, and other super Mart. We can see the result of Mensa brands expertise where they have acquired twelve consumer brands like VILLAIN and Karigari, and in October 2021, these brands seem to have hit a growth of 250 percent and 140 percent, respectively. But there's a slight difference between how Thrasio and Mensa work while Thrasio gives a founder 100 percent exit; Mensa brands keep the founders in the business but with just a significant stake in the company and intend to acquire these brands gradually in the next five years fully. After that, just like Thrasio, Mensa brands use their digital marketing specialisation, sales channel, and supply chain management expertise to scale these brands both domestically and internationally. This is how in the past six months, through technology and digital marketing, Mensa has been able to grow their brands at a staggering rate of 100 percent. In my opinion Considering the rise of Mensa brands has increased the opportunity for small-scale business entrepreneurs, and they are not making brands just for India but for the whole world.

ABOUT THE WRITER

Vinit Prasad

Pursuing PGDM at IMT Hyderabad

A keen observer, love to read geopolitics and investment strategies.

MEESHO- A MESSIAH FOR THE UNTAPPED RURAL MARKET

E-commerce has been rising significantly in India with the increasing reliability of India's population on the internet. Social media platforms are one of the most common uses of the internet, and not surprisingly, 70% of India's population are active social media users. It will be interesting to infer that where there are people, there is business. With a significant number of people spending their time on Facebook, WhatsApp, Instagram, and other social media platforms, the buying and selling also started via these platforms leading to the rise in "social commerce." Social commerce can be considered a subset of e-commerce and growing social media interaction is helping social commerce grow by leaps and bounds. Indian startups have also recognized the business opportunity behind social media platforms and used them to generate revenue. Companies like Meesho and DealShare are a few of India's promising names for social commerce.

Since the pandemic outbreak, individuals have started relying on social media platforms to earn money, and online reselling is one of the trending ways to make money with zero investment. Even before the pandemic, Meesho, an online reselling social commerce platform, identified the potential of reselling business. The idea of an online reselling business is straightforward- any individual can resell their products by posting them on social media websites and selling them to their friends and family or their known community. Most importantly, a reseller business includes a third party between the buyer and seller who sell the products at a mark-up price. Now you may be wondering how Meesho facilitates this reselling and what exactly is its business model?

Meesho’s Business Model:

Any seller would like to promote his products to increase his sales. However, the seller/manufacturer will have to establish and contact his network of people to sell the product to increase sales. What if you can sell his products to your friends, family or social groups and charge a certain mark-up over and above the selling price stated by the seller? Meesho is one such platform where the sellers display their products, and individuals can post these products on social media platforms to sell them to their known people. Once the order is confirmed, the logistics are managed by Meesho. This way, the seller earns his share of money and saves money on logistics, the reseller or the middleman earns his mark-up on the product, and Meesho earns a commission from the seller, creating a win-win situation for everyone.

Every business strategy starts with an idea. Similarly, Meesho was started with the idea that revolutionized the buying and selling on social media platforms, paving its way for social commerce in India. The founders of Meesho- Vidit Aatrey and Sanjeev Barnwal came across a local shopkeeper in Koramangala, Karnataka, who frequently uploaded pictures of his products on WhatsApp and Facebook and customers placed orders through these platforms that contributed to the revenue for that local shopkeeper. Vidit and Sanjeev were intrigued with this unique and simple idea that is now ruling the online reselling business with its robust business model. Meesho is gaining more popularity in Tier 2,3&4 cities, with more women using this app to generate revenue. Meesho also successfully took steps to empower women to build their own identity and use Meesho as a source of income. It is apparent that data and the internet are a constraint in rural areas and people in these areas use older versions of android mobile phones. After understanding the problems local shopkeepers and shoppers face, the Meesho app is built at a mere 14.5MB, making it the lightest e-commerce app in India on Google Play Store. This helped optimize the e-commerce experience in Tier 2 and 3 cities by giving unparalleled user experience to its app users and is available in 7 different languages.

You must have understood from the Meesho story that every business is only an idea away. Moreover, in my opinion, it is easy to grow a business if it is for the benefit of society as no business can exist in silos. So, let us all get started with building our empire of dreams which is only an idea away.

ABOUT THE WRITER

Sanjana Nahata

Pursuing PGDM at IMT Hyderabad

An ambitious and result-oriented person, keen on self-learning finance and financial management.

Strategy – “An Art of Closing the Doors”

 

Understanding the importance of strategy in the business world is very important. It sets a general direction for the future of the company. The strategy depends on many parameters like tagline, the mission statement of an organization, goals, and objectives. In every decisive situation, business management goes through the trade-off scenario. Here the strategy is not just to choose one option out of available choices but to reject the other options with utmost clarity. Each and every decision the organization takes that must be aligned with its business and its long-term goals. There are many occasions when a company faces a difficult time running the business. One of the potential reasons for that can be the misalignment between the decisions and the company’s identity. We can take references from the real examples from the business world.

If we talk about D Mart from the retail business sector. D Mart targets the mass consumer segment with its low-cost product at any time. D Mart has made some accurate decisions on some matrics like procurements, ownership model, SPF (sales per square foot), advertisements, digital platform etc.

As being the most affordable retail store D Mart has been procuring goods and items at very low cost and in high volume. To procure it, D Mart does payment to distributors within 10 days instead of 60 days, unlike the other stores. It is desirable to make a payment late for the company which is a trade-off that D Mart does.  The frequency of purchasing cycle is lower in this system so D Mart cannot fulfill the instant requirement of consumers. Hence it loses some customers because of this kind of system one needs to accept and acknowledge this loss/cost as a by-product. D Mart has implemented an ownership model, unlike its competitors. D Mart owns more than 80% of stores across the states. It helped them to be a lower or no debt company. D Mart could have got the properties on rent to avoid the fixed cost still they decided to purchase it. A company of this kind of model needs to sell much more than its competitors in a unit square foot of the store, which shows the efficiency of the store. It means in D Mart stores, its shelves must be used optimally compare to the other stores. This model demands a lower dwell time and high Buyers to Shoppers ratio, which is nothing but a conversion rate. That means D Mart is not the place for the most pleasant shopping experience for the customers. Even though D Mart should not focus that much to become a high-quality service retailer. D Mart does not do aggressive marketing and advertisements because its core consumers are attracted to D Mart because of its Unique Selling Positions (USQ).  D Mart offers a discounted price on the majority of the products every single day. Unlike other hypermarkets, D Mart has decided not to promote festival sale offers to be known as the all-time discounted price place. In the covid crisis, D Mart started its online digital platform. This is not a low-cost platform as its offline stores are which is a contradictory approach from its business strategy. We can infer from this case that one primary decision lead the way forward of the business and make different ideas irrelevant in this business model. D Mart has analyzed the alignment between its business model with each and every decision.

Let’s take another case of Maruti Suzuki business in the automobile sector. Maruti has achieved the largest market share in India. Maruti’s business model is based on the low cost, low margin, and high-volume approach.  So Maruti needs to make each and every decision based on this model. Unlike other automobile companies, Maruti has focused much more on the number of its service station and their availability. This combination of the price and service availability is the point of difference for the company in the automobile sector. For the last few years majority of the Indian and foreign automobile companies started research programs for the revolutionary and innovative idea of the electric car because of the growing concerns of the climate change issue. Maruti has decided not to be in the race of the first mover in the race of the electric car-making program. This requires a big amount of budget for research and development programs. As a first-mover player company requires a big amount of budget for the research and development program and to cover the cost of this, a product cannot be sold at a cheaper price. Maruti is well aware of the fact that its consumer segment is not an affluent class. So it is not advisable to be the first mover in the automobile industry as well as not to do big spending for research and development programs. So if Maruti had decided to be there in the race it would be a disaster for the company and its future business. Maruti definitely will be entering into EV once any company launches a product, they will analyze it which will help them to reduce its cost of R&D. So Maruti will be able to sell its EVs at the competitive price and able to maintain its market share.

Thus, we can infer that company needs to learn why sometimes good and visionary ideas also should not be implemented for the welfare of the company. So the strategy is more of an art of closing the doors.

About the Author

Jay Dudhela

Pursuing PGDM at IMT Hyderabad

A detailed observer with an interest in social and business affairs writes about how strategy is an art of closing the doors

Tesla’s Way to Electric Mobility

 

There is a great buzz in the market regarding the shift to e-mobility. Though the question is not about “Why,” it is about “How,” i.e., how can we have a smooth transition to all-electric mobility? Well, the straightforward answer to this question is – No, we can’t. The path to an all-electric fleet is not a straight one.

Tesla Inc. is one of the few companies striving hard to transform the mobility sector. It is American clean energy and electric vehicle company. It designs and manufactures electric cars, energy storage batteries, solar panels, solar roofs, and related products.

The transition to an electric fleet was inconceivable a few years back. But the way, Tesla is strategizing its efforts is commendable. It has adhered to some tactics which keep it stand apart from the rest of the players. First, it has built an image of a company that cares for the environment and thus appeals to people to use eco-friendly products. For example- Tesla could have quickly patented their technology and would have made a lot of money. But it allowed its competitors to use its technology, citing that it wants to expand sustainable technology. Second, they took a quite unique or strange approach to get themselves rooted in the market. Instead of making low-cost cars for mass production, they have focused on a high-end luxury sports car that would spur the demand for Electric vehicles. Third is, they adhere to the principle of direct selling, which means they don’t sell through the franchised dealership; they have their outlets and staff. This tactic of direct selling gives them an edge when it comes to the customer buying experience and product development. Also, they provided the use of internet sales-where you can purchase your vehicle online.

  Vertical Integration: Tesla Inc. has a very high degree of vertical integration (around 80%), which is very rare to find in an automobile company. This allows it to have stringent control over the entire supply chain, from procuring materials to delivering the vehicles. It produces its vehicle components and sets up its charging stations where people can charge their vehicles.

Ramping up the charging infrastructure: Tesla Inc estimated in the beginning only that charging infrastructure would be a critical factor. So, they have ramped up the installation of charging stations in major countries across the globe. They have set up DC Superfast charging stations, where drivers can get their vehicles fully charged in just 30 mins. Also, they have set up “GIGAFACTORY” in China, the US, Germany, and the UK to achieve the economies of scale for the production of Li-Ion Battery, a crucial component of EV.

Though, these measures are reasonable in the long run. But still, we are far away from the finish line. There are a lot of challenges we are facing right now, like Range Anxiety, Charge Anxiety, the Inadequate number of charging stations, lack of Servicing options, and insufficient power generation capacity to accommodate those vehicles. So, the road ahead is not so smooth for Tesla, it have to work on the challenges currently facing the EV sector.

        About the writer

        Praveen Kumar

                Pursuing PGDM (Finance) at IMT Hyderabad

            Interests in Automobiles, Politics

BODYLINE:THE FIRST SHIFT FROM GENTLEMANLY CRICKET

 

Since its first known game in the year 1706, cricket has undergone plethora of  transformations, reinventing itself and constantly evolving. The changes range from bowlers pitching the ball instead of rolling after 1960s, (which was reciprocated with changes in bat design from a hockey-stick shaped bat to straighter ones) to the introduction of 'power surge' and 'Bash boost' in the Big Bash league'21. Though they have their own importance in the evolution of the game, a tactic/event/controversy has withstood the test of time even after 90 years ;causing strain in multilateral relations, vandalism, shunning of immigrants, and business loss during its occurrence and, consequently ,changed the way the game was seen previously.

The body line or the fast leg theory was introduced in 1932-33 Ashes tour of Australia by English, spearheaded by Harold Larwood, to predominantly contain the adept batting skills of the Australian star batsman Sir Don Bradman(with a batting average of around 100). In the earlier Ashes Australia tour of England(1930), Bradman scored 974 runs with an a batting average of 139.14 runs, an aggregate record that still stands to this day. To put an end to the Bradman's batting spree, the English cricket team decided to devise particular tactics to curtail him in his own Australian pitch. They initially thought he was vulnerable to leg spin, while later the English skipper Douglas Jardine noticed through a video tape  that he had high discomfort in playing deliveries which bounced higher than usual at a faster pace particularly on the legside, being seen to consistently step back out of the line of the ball. As a result, a new type of leg theory bowling was born. ’The Bodyline’.

Leg theory

The leg theory, a precursor to the bodyline, is bowling in the line of attack-aims to cramp the batsman, making him play the ball with the bat close to the body. Before the 5-4(on-off side) restrictions were introduced, were any number of fielders can be placed on the ON-side, this tactic did wonders. For a leg theory spin ball, the concentration of fielders on the On-side made it difficult for the batsman to defend anywhere other than the On-side. As a result, being caught/trapped on the leg side was very common and seldom runs were made. This theory is still prevalent among leg spinners and is risky when bowled to skilful, patient and conservative batsman.

Bodyline-the art and the artists

Bodyline, the faster version of leg theory, involves tossing the cricket ball not only at the batsman's leg stump but also at the batsman's body. The batsman would be forced to hook or pull and most likely be caught at square leg or on the deep back side boundary. If defended it could go to a fielder standing close. Almost every fielder was on the leg side, with as many as six fielders in close proximity scoring runs became uphill. The third option was for the batsman to be struck by the ball and injured. There were no helmets or protective gear other than gloves and pads are worn at the time.

Surprisingly during the 1932-33 Ashes tour of Australia, The bodyline worked not only against Don Bradman but also against several other Australian players. Harold Jarwood,The star English bowler,fastest bowler of his generation and the prime executioner of Bodyline went on to take 33 wickets at an average of 19.51 with less than 3 runs per over. He got Bradman in four of his eight innings. Bradman's test average buckled to 56.57, the lowest of his career. In the later part of the series Jarwood’s bowling became extremely ferocious ,which physically injured the Aussies.The Aussie skipper, Bill Woodfull was struck by Jarwood’s thunderbolt on chest and Bert Oldfield, the wicketkeeper, was sustained a skull fracture by a bouncer. The English cricket won the series 4-1 and the series became forever etched in history as ‘The Bodyline series’.

Consequences outside the game

Outside of the sport, there were repercussions for Anglo-Australian relations due to the series, which remained tense until World War II compelled cooperation. As inhabitants of each country avoided goods manufactured in the other, business between the two countries suffered drastically. The English immigrants in Australia were shunned and visitors in both the countries were persecuted by the locals. Several statues of English Royal family were vandalised and numerous satirical cartoons and skits  were made mostly in Australia. Surprisingly, after the second world war(1946-48), Australian team captained by Don Bradman was first among the teams to extensively use short pitched bodyline bowling.

Rules that made bodyline less effective

Bodyline bowling is still allowed and equally challenging to play and is regarded a legitimate bowling strategy when employed sparingly. But, Several Cricket Laws have been amended throughout time to make the bodyline tactic less effective. The rules include 5-4 fielding restriction(On-off),only two bouncers per over in Tests ,one per over in one-day internationals, and one per over in Twenty - 20 internationals and Law 41 of ICC rule book to suspend bowler for intimidatory short balls.

Bodyline in recent times-India tour of Australia(Jan 2021)

The India tour of Australia(Jan 2021) ,especially the Brisbane test, saw several bodylines from Australian bowlers. The thunderbolts were targeted specifically to Chateswar pujara from Pat Cummins, Josh Hazzlewood and Mitchell starc. During that innings, Pujara copped a total of 11 blows on his body, and was hit multiple times on the head, hand and abdomen. Yet his gritty batting at Brisbane Test was in a different league and was instrumental in taking India to a win.

                                                             About the writer

    

B J K RAJKUMAR

Pursuing PGDM at IMT,Hyderabad

A constantly evolving person, writes about Geo-politics and Sports.

 

Impact of Global Semiconductor Chip Shortage

 

Almost every business on the planet is being impacted by the global chip shortage. Consumers are already seeing it directly as planned gadgets and appliances are delayed or in short supply — but they may become much more frustrated when tech's promises of an AI-powered future fall short due to a lack of hardware to operate it on. However, hardware isn't the only method to make these powerful machine learning technologies work.

Over the last few years, demand for chips of all sizes and powers has steadily increased, and supply has mainly been able to keep up until the current production problem. To give you a sense of the scope of this somewhat complicated tech sector problem, cutting-edge smartphones and servers aren't the only goods affected by the scarcity. A wide range of consumer products wearables - smart watches, home automation technology, and automobiles, to mention a few — have lately been updated to "smart" status and will be impacted as a result.

The Current Chip Shortage Solutions

The tech industry has already begun to take significant steps to address the shortfall. The obvious thing to take is to invest in existing and new chip production facilities, which most businesses are already doing. Covid-19, on the other hand, has disrupted the supply networks that would keep these plants functioning at normal rates, let alone the expanded ones required to meet demand.

In reaction to market instability and political constraints, China's reliable suppliers have stockpiled and limited their exports, and efforts to make the United States and others more self-sufficient in electronics production are nowhere near fulfilment. To put it another way, while investment is necessary to keep the global chip market afloat, it is insufficient to narrow the gap in the short term.

A more promising strategy is to accommodate older chip technology, both in terms of production and engineering. When new model inventory runs out, you might consider turning to used automobiles. "Used" semiconductor equipment here refers to manufacturing capacity from past chip generations that is no longer cutting-edge but is certainly better than nothing.

Because of the large demand for used equipment during the pandemic, device manufacturers are working on new devices that utilize older chips. This has already helped to mitigate the effects of the scarcity, but it's a desperate effort for an industry that, like a shark, must always go forward or perish.

Meanwhile, billions of people use tens of billions of gadgets every day, all of whom may benefit from a more immediate answer: a software solution to a hardware scarcity.

Software Solutions: Smart Compression and Compilation

Unlike hardware, software can be deployed globally at the rate required to maintain the industry's promises of AI-powered cameras, speech and face recognition, augmented reality, and other technologies on track. Until date, the industry has been unable to deploy software as a solution to the chip scarcity and to develop AI models on edge computing devices due to inefficiency.

When it comes to machine learning, efficient compression and compilation are about much more than reducing download sizes. It's critical to analyze what aspects of a working model are crucial to its outcomes in order to lessen the size and power needs of that model. As a result, smart compression entails "pruning" the model by deleting layers, filters, or channels without compromising its accuracy. It also entails "quantization," or reducing precision to save calculation cycles.

Compilation converts the compressed model's high-level operations to the low-level operations supported by a chip's architecture.

The problem is that there is no one-size-fits-all solution for completing these critical tasks. A machine learning model’s complexity must be compressed and assembled with the target environment in mind. After all, a common chip can be found in a smartphone, a home automation device, and a scientific equipment, all of which run distinct operating systems.

The efficiency gains from adapting the compression-compilation design to the exact architecture on which a model is meant to operate can be considerable. Furthermore, popular devices already in the hands of customers can give the real-time AI experience that developers have been pursuing and touting for years. Models ranging from natural language to selfie filters can operate natively faster than they could on specialized hardware, requiring only a regular app install from the user. As a result, the next generation of AI can be implemented without the need for multibillion-dollar infrastructure investments.

For at least the next three years, there will be a chip shortage. But that doesn't rule out the possibility of an AI-powered future. Software-based solutions have helped us get to this stage in machine learning applications, and they may help us go much further if we use them correctly.

ABOUT THE WRITER

A keen observer, love to read geopolitics and investment strategies, writes on the impact of the global semiconductor chip shortage.