William Liaw’s blog post about Snapchat’s turndown to a $3 billion offer from Facebook got me wondering about the root of Snapchat’s decision, what plans they have to further expand their app, and how they hope to enlarge their customer base.

Snapchat is easily becoming one of Facebook’s greatest competitors because it has an extremely important point of difference that no other social network has. Everything shared self-destructs within 10 seconds so nothing’s left behind. Within two years, more than 350 million images were being shared through Snapchat every day. Surprisingly, Snapchat has not established any means of revenue streams yet. Founders of Snapchat have only begun now to consider charging users for added services and in-app transactions in the future. Whatever their plans are, Snapchat could be taking a huge risk. Social networks, app markets, and the like are rapidly changing and the market for Snapchat could be easily taken away. Not to mention, the idea behind the app could be easily replicated by competitors and on top of that, Snapchat has faced plenty controversies, including its encouraging means for young people to sext and its inability to prevent hackers, makes the foundation of the company’s services rather unstable.

Article: http://www.independent.co.uk/life-style/gadgets-and-tech/news/the-23yearold-snapchat-cofounder-and-ceo-who-said-no-to-a-3bn-offer-from-facebook-8940433.html

IKEA has long been a leader of socially responsible corporations, turning waste into resources and protecting natural resources. Now they are taking on their next challenge to become a global leader in solar and wind development by planning to become energy independent by 2020. IKEA recently purchased a 20-turbine wind farm in Alberta, which produces more than double the company’s current electricity consumption in Canada, and it has installed 3790 solar panels on three stores’ rooftops in Ontario, allowing the company to produce more renewable energy than they consume. IKEA’s business strategy aims to reduce its carbon footprint and cut costs, improve its logistics, and to provide consumers with low-cost furnishings which save energy, water, and household waste. In addition, IKEA’s building sustainable stores that are 40% more energy and resource efficient, and is working with suppliers of wood and cotton to improve sustainable forestry and agricultural practices.

Having a positive impact on the environment has become increasingly valued. Companies are looking for ways to profit from confronting these environmental challenges. As governments sort out effects of climate change and implement emissions regulations, early investors like IKEA will find long-term revenue streams in these solid financial investments.

Article: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/ikea-eyes-low-carbon-future-with-alberta-wind-energy-project/article15436596/

IKEA’s Plan: http://www.ikea.com/ms/en_CA/about-the-ikea-group/people-and-planet/energy-and-resources/#windfarm

Michael Porter and Mark Kramer’s principle of creating shared value is about making economic value for the benefit of shareholders all while solving social issues. H.J. Heinz makes a great example of shared value in action. Corporate social responsibility is the basis of this company and they’re committed to bringing sustainability to people, the planet, and its company. Since 2001, Heinz’s Micronutrient Campaign have been combatting iron deficiency among infants and children in the developing world by providing vitamin and mineral powders to 15 developing countries as a cost effective treatment for iron deficiency. One child’s micronutrient needs for an entire year can be provided for $1.50. This Heinz initiative combines shared value with incredible social return on investment.

Article: http://www.forbes.com/sites/csr/2011/06/14/three-great-examples-of-shared-value-in-action/

Heinz Report:http://www.heinz.com/sustainability/heinz-micronutrient-campaign.aspxv

Big data is becoming a key method to gain value in competitive markets. With the rise of multimedia, social media, and the Internet, the volume and detail of information available to enterprises is exploding. Companies in a variety of sectors including retail, healthcare, manufacturing, and advertisement are able to conduct controlled experiments to improve management decisions, forecast sales patterns and likelihood success of new products and promotions. The ability to commercialize users’ information for targeted ads has been crucial for the success of companies like Facebook and Google.

Next to get into the game is Bell Canada who has lately announced its plan to begin gathering customer usage data to sell for ads. This will consist of monitoring Internet activity including the websites and searches customers look into, use of apps, the TV programs they watch, and their calling patterns. There are several issues concerning privacy in the big data world but this is where companies need to find fitting talent and technology to optimize the use of this information. Big data will bring new levels of innovation, competition, and productivity.

Articles: http://business.financialpost.com/2013/10/28/crystal-ball-of-data-may-soon-help-companies-better-tailor-pricing-policies-and-launches-to-future-events/

http://www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for_innovation

http://www.cbc.ca/news/technology/bell-data-collection-part-of-disturbing-trend-1.2223949

Summer Liu wrote an interesting snippet about Motorola’s new project that is aiming to produce a phone that will last forever. The concept is to make all parts of the phone interchangeable, allowing customers to customize to their liking and replace individual pieces whenever any component breaks down. With this new product, Motorola could be able to reduce a great deal of waste and the company could become extremely socially responsible.

But there are a lot of disruptive impacts on the company associated with customizable products. For one, this new modular phone concept is a huge investment and Motorola’s variable costs will increase due to added time and technology. This could lead to a very expensive final product and customers may not be willing to pay for these extra costs. Secondly, the complexities may threaten the product’s quality. Thirdly, given that this is a brand new idea that will compete in a broad industry, it’s difficult to forecast the size of its market demand. Computers are easily customizable but very few consumers barely add ram, hard drive space, or upgrade graphics cards. It seems like a neat idea but it may only end up appealing to a small niche group.

Maxwell Wessel gives some insightful thoughts for new start-ups in his blog post. Wessel emphasizes on three important questions new entrepreneurs need to focus on when deciding on a start-up location including the city’s advantage, how their business can be set apart, and the possibilities to get exposure there. If entrepreneurs start outside a super hub, it would be more difficult to find customers, employees, and funding. It would be vital for these companies to develop an edge. It could be the culture or type of partnership but what it comes down to is exposure. Exposure facilitates the relationships between the company, its customers, incumbents, and competitors.

This post was quite thought provoking because I never realized how important location is for a start-up business. I would have thought that it is beneficial to begin a unique company in a remote area where it would be possible take advantage of having the market power to set prices and standards. For example, would it be more profitable to start up a lemonade stand in a small rural community with no competitors or to run a café in a competitive city? But perhaps, the criteria for one industry over another is different.

The tobacco industry’s pushed aside as popularity arises for e-cigarettes. These devices contain nicotine without the harmful toxins from burning tobacco and Europe has approximately 7 million users. Studies show they’re far safer in comparison to tobacco, similar to nicotine patches and gum. However, there are hundreds of suppliers and there’s no consistency with quality or labelling and with no restrictions, three worries come about in this emerging market. Young people are more likely to get lured into a nicotine addiction, tobacco quitters are prone to transitioning into this new product, and smoking is very likely to be re-glamorized.

Some are fighting to increase product standards and reinforce the rules to reduce the number of smokers as it will cause variety to fall and prices to rise. Those currently in the tobacco industry are hoping to avoid another Kodak mistake. Philip Morris International, British American Tobacco, and other companies alike plan to market other less toxic substitutes by 2017, such as nicotine inhalers and a device that will heat rather than burn tobacco. The government’s view on e-cigarettes will be determined on October 8, as the European Parliament votes on a proposal to regulate e-cigarettes as medical products.

Article: http://www.economist.com/news/business/21586867-regulators-wrestle-e-smokes-tobacco-industry-changing-fast-kodak-moment

Price and product differentiation is extremely important in the rivalrous vehicle industry. The number two U.S. automaker, Ford Motor Co., announced their most recent plan to build one-third more vehicles globally by 2017. Their blueprint includes adding more plants in developing markets, advancing into a more unified manufacturing strategy, and running its factories for longer hours. This year alone, Ford aims to build around 2 million more cars and trucks. This opportunity of furthering global expansion with 14 new factories will help maximize capacity and thus cut costs and boost outputs. The automaker hopes to maintain a capacity level equal to the market’s demand which would allow the company to respond quicker to changing consumer tastes.

Ford Motor is one example of a company that falls under the category of cost leadership strategy in Porter’s Generic Strategies. This fifth largest automaker in the world uses the cost leadership strategy to gain competitive advantage in the market. With exploited scales of production and advanced techniques like its new 3D prototype printer, Ford is able to increase its manufacturing efficiency by 98% and lower prices to attract more consumers.

Article: http://www.theglobeandmail.com/report-on-business/international-business/us-business/ford-aims-to-make-its-factories-more-flexible-efficient/article14725318/

The production of clothing, textiles, and footwear are labour cost intensive and is the reason why manufacturers are always searching for the next best place to set up factories. That’s why it’s striking that Merchant Housing International Ltd., the Hong Kong based company who primarily manufactures footwear for Wal-Mart Stores Inc. and Sears Holdings Corp., will open its first U.S. plant in Tennessee early next year. What’s more, over half of U.S. executives at manufacturers with sales over $1 billion are also making the preparations to re-shore. Bringing manufacturing back to the U.S. increases proximity to consumers and product quality, and lowers transportation costs and competitive wage rates. Making these key activity changes at Merchant Housing will ultimately improve Wal-Mart and Sears’ value propositions. This manufacturing renaissance is bypassing Canada though. Canada has been facing sharp declines in competitiveness since the Great Recession. Thousands of companies have disappeared, most noticeable are exporting manufacturers. The increasing value of the Canadian dollar, the slow productivity growth, and the lack of research and development is pulling Canada down in the share of global trade. Canada needs to invest in technology and equipment in order to be more globally competitive.Article: http://www.theglobeandmail.com/report-on-business/economy/why-the-rebirth-of-manufacturing-is-bypassing-canada/article14717261/

Profit can not be the one and only objective for business leaders. Disregarding corporate social responsibility and ethics often turns into a huge mistake in the aftermath.

In 2001, it was revealed that Enron, an American energy company, had hid billions of dollars in debt accumulated from unsuccessful projects and deals in financial reports. What once was the seventh biggest company in America collapsed, declaring America’s, then, largest corporate bankruptcy.The Enron scandal also led the company’s auditor, Arthur Andersen, formerly one of the Big Five accounting firms, to voluntarily retire from practicing as Certified Public Accountants and surrender its licences. The firm’s criminal charges were later overturned by the Supreme Courts of the United States but the audit failures caused severe damages to the firm’s reputation, of which still have not fully recovered.

The Enron scandal sets just one of many warnings to corporations that profits cannot be put before ethics.

Resources: http://www.economist.com/node/940091