Chang Lao's Blog

I believe that the United Nations helps developing countries achieve the first step to a stronger economy. Many of these areas suffer from instability and lack of funding. The United Nations provides the money these countries require and assist in the stabilizing of their governmental systems by reforming policies, identifying points of corruption and much more.

However, one issue that may be difficult for them to solve is maintaining the benefits their help creates. Many of the citizens struggle to keep up with such quick changes as they do not yet have the knowledge to, for example, run a business. The United Nations lays the big foundation, but it is up to programs like the Arc and social enterprises to resolve the smaller details. The larger majority must be properly educated to sustain growth and build on this foundation. As Arielle Uwonkunda mentioned in one of the readings, “non-profits that have donated money to Rwanda following the war but didn’t make a lasting impact”. This momentary boost in support cannot be maintained if the citizens themselves have not adapted to the change in their country. The Arc and other social enterprises allows these citizens to learn the basic models and strategies that are vital to a strong business, permitting them to escape the cycle of poverty and empower themselves as well as their country

This post is in response to a post made by my fellow classmate, Ryan McCaig.

In McCaig’s post, he is describing the differentiating characteristics of Apple’s new product, Apple Pay. I would like to elaborate on his post as I believe this new Apple product is more than just a point of differentiation in comparison to Samsung and Sony, it is also a disruptive innovative against established e-commerce companies such as PayPal.

Although the typical disruptive innovator provides a sophisticated, expensive piece of technology to customers in a more simplified manner and lower price, Apple has invented a new piece of technology completely. They are a strong competitor, as McCaig mentioned, due to its large capital and huge customer database. Although similar devices have been introduced, not many have been collaborating with top companies such as Macy’s and McDonalds to create something that is assessable to all Apple users. This is another gain creator to Apple’s list of many as users may now integrate all their credit cards in to one to make the payment process even simpler. The question is, how PayPal is effected by this new change, and what will they in response?

Photo from vancitybuzz.com

This post is in response to a post made by my fellow classmate, Julianna Phan.

In Phan’s post, she describes the key value proposition of Earnest Ice Cream to be their intimacy with their customers, but I believe there is so much more.

For starters, they sell gourmet ice cream that is produced only in small batches with ethically, locally sourced ingredients from Vancouver. On top of that, these flavors can range from completely vanilla to absolutely insane (ever tried spruce bud or olive oil ice cream?) and are all packaged in a homey jar. These value propositions allow them to target a wide range of customer segments such as foodies, daredevils, and many more.

Their advertising has also allowed them to be unique and expand on their customer segment. Aside from the typical grassroots advertising such as going to farmers markets, distributing to restaurants and doing marketing through social media they have also collaborated from established stores in the food industry. Earnest Ice Cream has done a collaboration of flavors with stores such as 33Acres and Matchstick Coffee. This allows them to advertise to their customer segments and provides a good source of distribution.

I believe the secret to Earnest Ice Cream’s success is their brilliant marketing strategy and, most importantly, amazing and unique ice cream.

Blog Post: http://sme-blog.com/how-to/market-and-sell/why-is-nailing-your-niche-so-darned-difficult

In the blog post called “Why is nailing your niche so darned difficult?” by Mary Cummings, Cummings describes the three key aspects producers must keep in mind of when trying to identify their niche: perceived value, uniqueness, memorability and emotional connection.

I agree to the points that she has presented. A producer must first know what value propositions they are providing the customer, what makes my product better than another similar product? By doing so we can identify what we need to clarify regarding our product and what we are lacking. As the value proposition canvas portrays, by identifying the gains we give customers we create gain creators that entice customer to demand our product. It is not how much you think your product is worth, how special it is, how much time you spent creating it, and how important it is to you, the producer, but to the customer. For example, Tesla was invented with the value propositions of an environmentally friendly car at a premium quality. One may say that because those are their value propositions, they have positioned themselves as one of the top companies inside the niche of electric vehicles.

The first step to many businesses, as the blog stated, is to find your niche. To do so one must evaluate the value they provide to customers then position themselves up their market ladder. These steps, although difficult, are vital to creating a striving business.

From Getty Images, pedestrian walks by San Francisco Lululemon store.

Lululemon, a Vancouver based yoga wear retailer, has decided on a partnership with his Holiness, Dalai Lama. The company plans to donate $750,000 over the course of three years to the Dalai Lama Center for Peace and Education. However this decision has created controversy as the Dalai Lama’s belief emphasize living simply while Lululemon sell $100 yoga pants.

Lululemon has suffered from many questionable marketing decisions over the past few years, and this will become another on that list. I believe that although they are attempting to create a sustainable business, they are using the corporate social responsibility rather creating corporate shared values.

The marketers of Lululemon, however, argue that this decision was made purely on the fact that the Dalai Lama’s values were in line with Lululemons and that they wanted to promote the fact. If this were true, then it is an unwise decision because it only saps away from profit and does not benefit the business in a sustainable and economical way.
On the other hand if this was a public relations decision then, according to the triple bottom line, this would only fulfill the social portion of the three factor diagram. The partnership does not benefit the environment or help Lululemon’s economic development.

Rationally speaking, I believe that, although Lululemon promotes the same belief, they are still a corporation. No corporation should be associated with the Dalai Lama, therefore this is a poor decision on their half and should be reflected upon to improve future marketing strategies.

Photo from Enbridge Inc.

Enbridge Inc. has a solid business model. Although each one of its big projects go under major scrutiny from external communities, the benefits it provides, business and economic wise, is obvious. The products it provides, natural gas and crude oil, has consumer demands from countries such as the United States and China. It is also supported by the Canadian federal and provincial governments. However, as with all Canadian development projects, one must secure permission from the First Nations when partaking in projects such as these.

From a business point of view, reaching an agreement with the First Nations will be the biggest hurdle in the completion of their project. They are the ones standing in between them and a market full of potential buyers who are willing to pay billions for Canada’s natural resources.

On the other hand, the First Nations have a lot to lose. Based on the statistics provided by Enbridge, a leak is “unlikely” but if it does happen the impacts will be devastating on the natural environment. Although oil leaks can be cleaned up, the only way to restore a damaged environment is with time and that may be impossible for some animals, especially endangered species. The land is their culture, history, and themselves.

The Supreme Court ruling is not a fork road, but simply a statement to clarify what was already present. If Enbridge and the First Nations truly want to agree on a solution they must do so with patience and acceptance, values that those of the past have failed to grasp in past negotiations.

References:

http://www.vancouversun.com/life/Premier+urges+cooperation+more+litigation+government+natives+reach+fork+road/10194776/story.html

http://www.vancouversun.com/news/There+will+pipeline/10122968/story.html

Re: Microsoft makes more money from Samsung than from Skype, Windows Phone, and Xbox combined

According to Quartz, Microsoft makes more than 1 billion from Samsung in legal patents for using the Android mobile operating system. Microsoft holds 200 patent families needed to build an Android smartphone, but should companies really be eligible for some of these patents?

Microsoft logo

I previously thought that patents would be related to a new invention, like a special component to an operating system or computer chip. However, from what I’ve read the patents range from how a shop places their tables to the sizing and button placement of smartphones. Although I agree on how a company must place these patents to prevent people from recreating their phone completely, patents like shop layout seem to be going too far. For example, what if Superstore patented the layout of their grocery stores? Could other grocery stores no longer follow the row by row orientation used at Superstore?

Although technology need to make their shop unique to create a stronger and more prominent brand, patenting every single thing to the smallest detail will make it more difficult for other companies to enter the playing field.

Reference:
Chibber, Kabir. “Microsoft Makes More Money from Samsung than from Skype, Windows Phone, and Xbox Combined.” Quartz. N.p., 15 Oct. 2014. Web. 06 Oct. 2014.

The world of esports is slowly taking over the globe, one player at a time. What started out as a MOBA (massive online battle area) game has transformed into a franchise with 67 million unique players every month.

Logo of Riot Games.

At the top of the tier are the professional players, esports athletes, that compete in tournaments with prize pools of ~2 million dollars (another game, DOTA, has had a prize pool of ~11 million). This is a business where the players, or workers in this case, sign contracts with Riot, the owners of League of Legends, and their respective teams. However, players are often younger and, since the professional gaming business is fairly new, they are susceptible to unfair contracts.

Riot has the ability to change the game at will. This is not like the average sport, where rules are set and rarely changed. This company has complete control of the playing field  as the entire sport is under their jurisdiction: patents, copyrights, trademark, and more. Workers (players) sign contracts that limit their rights, they have no union protections and few bargaining rights.

Season 3 League of Legends World Championships in Staples Center, Los Angeles.

Forbes has reported that League of Legends may become a new Olympic sport as early as 2020, making is a promising career for aspiring gamers. On the other hand, these gamers will become a source of cheap labor as they are unprotected and restrained by Riot’s contracts.

While growing up as children we all followed many typical gender stereotypes. Girls would play with their EasyBake Ovens, Barbies, or My Little Ponies while boys had Legos, action figures, Nerf guns, and many more. It would be strange to see a boy baking, or a girl bashing two action figurines together mercilessly.

However, as we grow older and as society changes we see this gap between the two genders starting to fade. Jobs that were typically associated with one gender are becoming more neutral as societies start to change; these changes should be reflected in the toy industry as well. Men, unsurprisingly, dominate the executive boards for many toy companies. However, studies show that companies do improve when more women are in top executive positions. This is not suggesting that women do better in business, but is highlighting a need for balance. Both men and women provide different inputs and perspectives, allowing more potential problems or opportunities to be addressed accordingly.

Hasbro’s gender neutral Easybake Oven (Photo: Business Wire)

Promoting gender neutrality is also a great marketing strategy. One example would be Hasbro’s decision to create EasyBake Ovens using a more neutral colour, rather than the signature pink colour that was previously used. This change has been applauded by the community, creating more awareness through the media and increased sales as boys are now a potential buyer as well.

By including both men AND women in decision-making positions, the toy industry, as well as many other industries, can strive to meet the needs of our current society.

Every system requires a check to maintain a balance. As for businesses, although the main goal is to maximize profits, they must have limitations to how they can achieve their goal of profit maximization. I agree with Freeman’s Stakeholder Theory; all the related stakeholders must be taken in account before one can truly maximize their long term profits.

A Chinese farmer collecting eggs at a farm located in eastern China. (STR/AFP/Getty Images)

An example of a company displaying poor business ethics are the KFC stores in China. The fast-food chain restaurant has faced numerous scandals; China Central Television network has released several reports stating that the company sold chickens fattened by illegal drugs and that their ice cubes had 13 times more bacteria than toilet water. Although profit maximization is the primary goal to a business, one must factor in the social impact this will have on society. The community is not asking KFC to suddenly become a philanthropic company promoting world peace and a greener environment.

A KFC store in Beijing, China. (image from www.armstrong.edu)

Businesses need to understand how to follow the most fundamental rules, the law. They are violating basic moral values by feeding the people, including our next generation, these highly toxic foods. As industries in China slowly become more stable and advanced, KFC will lose the trust of their consumers with their current actions resulting in a decline for their company.

Reference
Brady, Diane. “KFC’s China Recovery at Risk of Being Flushed Away.” Bloomberg Business Week. Bloomberg, 23 July 2013. Web. 09 Sept. 2014. <http://www.businessweek.com/articles/2013-07-23/kfcs-china-recovery-at-risk-of-being-flushed-away>.