In class we had talked about, performance management and talking about how we can measurement. There was a lot of emphasis on what kinds of people would make good managers in the perspective of the company (this was in relation to a reading assigned prior to the class, called Power is the Great Motivator, by David C. McClelland and David H. Burnham, link). The idea talked about, also mentioned in the article, was that people who are really motivated by power tend to make really good managers. There was focus on the organizational structure in looking at how a company may judge the performance of its managers, looking at centralized vs. decentralized structure. Whether one type of structure is good or not depends on the company and the industry it’s in. In the case of Google, its organizational structure is extremely flexible in that there is as much upward communication as there is downward communication within the organizational body. This is because of Google’s innovative strategy. In other words, a company’s structure is strongly connected to its strategy, and since performance evaluation is also connected to the company structure, performance evaluation is also tied to the company’s strategy. So, in the case of Google, the basic strategic approach is that of innovation, being as innovative as possible. As result, this is seen in Google’s structure, where there is a lot of decentralization, where employees are allowed to design products and be as creative as possible (in fact this is how Gmail, Google Earth, Google Talk, and Google Maps). So, in the case of Google, which is fueled hugely by innovation, probably conducts performance evaluation based on how much innovation there are in the products and in its effectiveness/application in reality.

A more detailed highlight of Google’s innovative approach in its business can be seen in the video below, by Douglas Merrill, a former CIO (Chief Information Officer) and Vice President of Engineering at Google.

Article

“Power is the Great Motivator.” David C. McClelland and David H. Burnham. Harvard Business Review.
November 1, 1996. Online Print.

Video

“Innovation at Google” – Douglas Merrill – 8/1/07.” Google You Tube. Web. 30 Nov 2010.

Images

“Google Logo.” Iboro. Web. 30 Nov 2010.

“Gmail Logo.” Iboro. Web. 30 Nov 2010.

“Google Earth Logo.” Iboro. Web. 30 Nov 2010.

“Google Maps Logo.” Iboro. Web. 30 Nov 2010.

From the reading, Joseph Schumpeter’s definition of entrepreneurship was based on innovation underlying elemental characteristics such as:

– new products
– new production methods
– new markets
– new forms of organization

An entrepreneurial company that fits under these “elements” is Crowdflower

Crowdflower is what I consider to be an entrepreneurial company, which was founded in 2007 by Lukas Biewald and Chris Van Pelt. It is a company that focuses itself in managing tools related to managing internet “crowd sourcing”, an act of outsourcing commonly related tasks of a company that are normally done by an employee to a large group of people (a crowd). Crowdflower is effectively an online labour force based internationally with companies that need a large volume of simple work completed quickly and because it is international, it is basically a labour force that is available 24/7. This connects to Schumpeter’s points since the company has a unique product in that it is essentially a temporary employee that fullfills the needs of a company at significantly lower costs than what a hired employee would’ve done for that company. Also, the company has arguably, a revolutionary creation of a new market, which is large companies to get small tasks completed but at extremely low costs. Also, its production method is worth talking about, in that Crowdflower continues to train its employees no matter how many years they’ve been in the company and continously assigns them tasks. This is due to the fact that in order to keep the company homogenous in terms of quality of work, it needs to regularly monitor employee output. Also, because an employee may only get paid pennies for working on one task, all that adds up to a significant pay, as a significant amount of tasks are assigned to the employees.

The following TED video by Lukas Biewald, further highlights these points.

Article

“A Definition of Entrepreneurship.” Peter F. Drucker. QuickMBA.com.
November 1, 1996. Online Print.

Video

“TEDxDU – Lukas Biewald – 5/13/10.” Crowdflower Youtube. Web. 14 Nov 2010.

Image

“Crowdflower Logo.” Mission 4636. Web. 14 Nov 2010.

In class, we discussed the importance for a company, before entering an industry, to analyze “attractiveness” of the industry. Are there lots of barriers to entry? How significant are threat of substitutes? How large is bargaining power relative to price/other factors? These are some questions that a new entrant needs to answer. A new entrant such as WIND mobile, launched in December last year, has been struggling to answer these questions. In an article published by “Marketing Mag”, it mentions how WIND “hasn’t been able to attract significant customers.

First of all bargaining power is high…because bargaining power, although a force in its own right, can be associated with threat of substitutes. High number of substitutes (Telus, Rogers, Bell etc) can give high buyer power, give consumer options. Another influential force behind WIND’s struggle is rivalry within industry. This rivalry within, is a result of these companies providing loads of features/flexibility to customers whereas “Wind customers have had network problems and have been unable to buy the company’s phones or pay their monthly bills online”. With Rogers and Bell well established and Telus also gaining ground, the rivalry that these companies highlighted shifted WIND to struggle.

Article Link

Article

Press, Canadian. “Wind Mobile struggling after ‘launch in haste’: industry report.” Web. 9 Oct 2010.

Images

“WIND Mobile Logo.” Android Canada. Web. 9 Oct 2010.

“Rogers Logo.” BGR. Web. 9 Oct 2010.

“Bell Logo.” WordPress. Web. 9 Oct 2010.

“Telus Logo.” Rethink. Web. 9 Oct 2010.

The last recent posts have mentioned strategy as cementing a unique marketing position in the consumer’s mind and this post will show that this is done specifically through points of difference (PODs). In class, we talked about the example of The Body Shop’s value proposition of being humane, being natural, against animal testing etc. These points of difference, created a unique position for the company as competitors (L’Oréal, LUSH etc) did not highlight these points. Consequently the company was well established in the consumer’s mind. KFC is another example, where it gained competitive advantage through POD. KFC is well known (notice, they’re “well known”, highlighting already how much of a unique marketing position they have established amongst consumers) for the ingredients it uses. KFC has kept emphasizing that its chicken is different (when compared to competition), and as Colonel Sanders mentions (in the video below), he says their chicken is “entirely different but still tender and tasty”. KFC highlighted (and continues to highlight) how “unique” its ingredients are. KFC has long ridden on this particular point of difference, and as a result gained competitive advantage, in addition to establishing a respectable position in the consumer’s mind.

Video

“Colonel Sanders Botches KFC Ad.” Colonel Sanders KFC Youtube. Web. 5 Oct 2010.

Image

“The Colonel, KFC Logo.” Polls Boutique. Web. 7 Oct 2010.

In class today, we were talking about strategies (“establishing a unique market position” to achieve long-term goals), and as mentioned in my previous blog, is closely related to brand positioning. In brand positioning, we were stressing on the importance of cementing yourself in the consumer’s minds by establishing a unique market position (to win over the battle for the consumer’s mind as there’s a constant overflow of information consumers receive). So, it’s important to be distinct from everyone else to gain competitive advantage and also potentially be #1 in a category/segment in the market as a result. The clover ad (see below) is an excellent example.

The ad emphasizes on “mixture”, its product being in the middle between, butter and margarine, taking the best of both and combining into 1 product. Clover established “a unique market position”, positioning itself separate from its competition (butter and margarine products) and creating it’s own category (mix of both butter and margerine), so it could become no.1 in that category. As result, it created a unique market position, along with gaining an unoccupied position in major segment of the market (Mixture of butter/margerine)

Article

“What is Strategy.” Michael Porter. Harvard Business Review.
November 1, 1996. Online Print.

Video

“Cover Advert 2010.” Clover Youtube. Web. 7 Oct 2010.

Image

“Clover Logo.” The Telegraph (UK). Web. 7 Oct 2010.

In Michael Porter’s reading of “What is Strategy?” (article), it was clear to everyone that Porter kept emphasizing on the idea of “establishing a unique position”. He kept on saying that differentiating yourself from others and cementing yourself as a unique figure in the market is tied very closely to strategy. Then, I realized that this also very closely connected to the idea of marketing, when the other day, we were talking about how firms engage in the “battle for the consumer’s mind”. Porter’s point can be related to the point made in the other class that there’s such an overflow of information these days that there’s a need for companies to stand out and demonstrate (to the consumers) of being distinct from everyone else. This is where strategy was being highlighted by Porter…creating that unique position to gain the competitive advantage by standing out to the consumer out of all the overflow of information. It was interesting to see that connection between the two classes (talking about “battle for the consumer’s mind” in one class and strategy in the other), and also looking into the significance of this connection, in addition to realizing the importance of Porter’s point.

Article

“What is Strategy.” Michael Porter. Harvard Business Review.
November 1, 1996. Online Print.

Images

“Porter’s Five Forces Diagram.” Vector Study (US). Web. 6 Oct 2010.

“Marketing Groups.” Burning the Bacon (US). Web. 6 Oct 2010.

L’Oreal is reputed to be the most dominant cosmetics company. Recently however, questions were raised concerning “unethical practices” (article), related to L’Oréal’s advertising. The French based company was accused of racial discrimination when it came to recruiting models/temporary agents selling shampoo products. Allegations highlighted that L’Oréal recruited, thinking that white models/agents put more appeal to the public into buying their products. Cosmetics products, aim to increase skin glow, provide shinier hair etc and anti-racial groups said L’Oréal recruited with the thought that white skinned individuals would more visually reflect the features their products would deliver. L’Oréal was found guilty by the Paris appeal court, fined €30,000. But it makes one wonder that despite processes of globalization and increased integration amongst people, with exchange of ideas, innovations, and technology that such mindset presents itself as a deciding factor concerning recruitment in the world’s biggest cosmetics company! This topic lands itself in the center of business ethics, the thin line dividing between right and wrong, something L’Oréal failed to see, but can we really blame L’Oréal since it was attempting to increase sales through “selective recruitment” of people to stronger highlight its products. Is it really a thin line, or a blur, so ambiguous that companies such as L’Oréal couldn’t see it coming?

Article

Sage, Adam. “L’Oreal found guilty of racism in shampoo ads.” (2009): September 15, 2010.

Image

“L’Oréal Logo.” Enjoy France. Web. 15 Sep 2010.