Amanda Lee's Blog

AfriGadget is a blog focused on stories of African ingenuity. Through the site, I have discovered innovations that African people have come up with to overcome challenges in their life and country. One product that especially interested me was the Saphonian Blade-less wind turbine, an invention from Tunisia by Saphon Energy, that has proved to be better than others invented by developed countries. Using the Saphonian zero-blade system, the company is working towards meeting Africa’s electricity needs in a clean and affordable way.

Overall, AfriGadget a great site for finding out about what’s happening in the African social entrepreneurial world. It’s inspiring to read about how Africans from all over the continent, young or old, have used their creativity to develop products or ways to benefit themselves and their communities. We don’t normally find such news or inspiration in the business section of a paper or site. Reading this blog might just spark an innovative idea in your mind and motivate you to start an enterprise that contributes a social good like Saphon Energy.

Daniel Ek is a serial entrepreneur from Sweden.  He taught himself how to code, which allowed him to start his own web development company and rake in thousands of dollars at 14. After quitting college, he started Advertigo, an online marketing company, which was acquired by Swedish company TradeDoubler. In 2006, he co-founded the music site Spotify. Ek, now 29 and CEO, is on track to raise $220 million from prominent investors, raising Spotify’s value to $4 billion. What interests me most about Ek is not his young age or the money he has earned, but that he has created a strong rival for iTunes.  Spotify is a legal music service that allows users to search and stream music on demand to their mobile devices for $5 or $10 a month. Every time a track is played on the site, artists and their labels are paid a royalty. However, there’s no need to have an Apple device or to download and pay per song/album as iTunes requires. Today, Spotify is highly popular in Europe and is growing in the U.S. It now has over 3 million subscribers worldwide.  Essentially, Ek has found success by reshaping the online music service industry to make it easier for people to listen to music and pay for it, rather than to steal it.

Web Resources:

http://www.inc.com/30under30/burt-helm/daniel-ek-founder-of-spotify.html

http://dealbook.nytimes.com/2012/05/17/spotify-is-raising-millions-in-a-deal-that-would-value-it-at-4-billion/

UrtheCast will soon provide people with the ability to view high-definition videos of the world. I agree with Fergus Arnold’s blog post that states “The sense of a ‘global community'” will be redefined. There are definite benefits from capturing earth on video, like helping the UN monitor disasters, but like Fergus, I question how the company will keep sensitive information away from the wrong hands. Once sold to the governments that UrtheCast is allowed to sell to, it cannot stop those governments from using the information in ways that would infringe upon the privacy of citizens.

People are highly concerned about internet privacy as more of their communication and activity occurs online. A study in a 2007 article from the Technological Association of Georgia found that “94.5% of Americans have online privacy concerns.” With technological changes, such as expansion of social networking, personal data is much more easily accessible than before.

Society’s increasing privacy concerns are a threat to UrtheCast’s business. Both Facebook and Google are popular examples of how companies can face continual criticism over their privacy policies. UrtheCast’s success and how it will deal with privacy challenges still remains to be seen. It’s definitely a company to keep an eye on.

Out of the two company presentations, I was most interested in Energy Aware because it was born from a class project. Since the company works with electric utilities to sell their benchmark product, the PowerTab , I can see Energy Aware expanding geographically quite successfully.

However, CEO Janice Cheam stated that Canada comes last on her list. As the company started out in Vancouver, I wondered why the product couldn’t be in BC homes yet.

The Problem:

In order for the PowerTab to work, it needs to communicate with wireless smart meters but a number of BC municipalities, Vancouver included, have passed motions opposing installation of the new meters (see article). The article also states various reasons why people are against the meter, such as health risks and privacy issues.  Despite the public’s concerns, BC Hydro still continues to install them, and maintains that smart meters are “safe” and “green”. While it’s important for the province’s energy infrastructure to be upgraded, BC Hydro needs to go about doing that with transparency and accountability.

What if BC city councils do successfully get BC Hydro to drop smart meters? Then the PowerTab may not be a viable product to BC energy users anymore.

Energy Aware can play an important role in reducing our electricity usage to allow for future consumption. Whether the PowerTab will be able to make its way into BC homes will depend on BC Hydro.

After browsing Vancity’s website, I no longer thought of it as “just another bank”. Having a “triple bottom line” approach to banking means that Vancity uses its $16.1 billion in assets to create economic, social and environmental well-being.  Lending to and investing in local social enterprises and ventures, co-operatives, not-for-profit, etc. is how Vancity strives to “Make Good Money“. It’s banking that balances positive social change alongside financial gain.  I thought, “Wow!  Sustainability and CSR is in every aspect of how Vancity does business. That makes me want to bank there.” 

I researched some more and found a recent report from the Global Alliance For Banking on Values, for which Vancity is a member of. The report shows that during the global economic recession, value-based banks are outperforming traditional banks on average, suggesting that the values-based model could be the answer to avoiding future recessions. Overall, the study demonstrates that “doing good is beneficial for banks not just in a theoretical and ethical sense, but also financially.”

Values-based banking is only just beginning to revolutionize the global financial system. Business schools can participate in fostering this revolution by drawing it to the attention of students. When discussing sustainability and CSR, we don’t often think about it in banks so this is a topic that can be brought up in class.

Wal-Mart has made a strong commitment to build a more sustainable global supply chain, starting with China. In 2008, Wal-Mart placed environmental requirements on its Chinese suppliers (source). Recently, Wal-Mart announced that it will fund research to develop sustainable businesses in China, and work with suppliers to “increase the standards of its sourcing and product design” (source).

Following a broad cost leadership strategy has already made Wal-Mart’s operations around the world largely successful. Why does having a sustainable supply chain matter?

Supply chain management is critical to a business’ success, especially for ones operating on a global scale like Wal-Mart. Common supply chain challenges are cost control, risk management and supplier relationships, which can really affect the bottom line (source). Now, supply chain sustainability has become a competitive advantage. China faces ever-mounting criticism for its harmful environmental and social practices so building a more sustainable chain first in China is a smart step. I can see many benefits from this strategy. Wal-Mart will be able to generate new sources of revenue from innovating to create “greener” products. Increasing energy efficiency, and working with suppliers to cut down wastes will reduce costs. Wal-Mart’s business model and operations will be improved, allowing for better risk management. Brand value and shareholder trust will increase. Ultimately, a sustainable supply chain will continue Wal-Mart’s success in the global market.

Offical Press Release and Video from Wal-Mart:

http://news.walmart.com/news-archive/2012/10/25/walmart-announces-new-commitments-to-drive-sustainability-deeper-into-the-companys-global-supply-chain

Frozen yogurt is once again experiencing growth and rise in popularity, but this time there’s a new twist. As explained in this article, brands such as Pinkberry, Menchie’s and Yogurty’s are opening up stores in urban centers across North America. Menchie’s and Yogurty’s allow customers to grab a cup, mix and match flavours to their heart’s delight, choose the quantity and variety of toppings, add different sauces, and pay by weight.  Pinkberry has its servers build the dessert at the customer’s request and charges per size of the yogurt cup. Also, they are catering to more health conscious consumers by offering low or non-fat and sugar free flavours as well as fruit and granola toppings.

Self-serve frozen yogurt capitalizes on the growing marketing trend of personalization. By letting their customers make personalized choices, these frozen yogurt brands are getting consumers to associate a unique, individual experience with the brands, building brand loyalty. Even Yogen Fruz is renovating to include new self-serve machines in order to compete in this market. Today’s young consumers are pushing this marketing change with their desire for services and products that they can customize to their tastes. We are increasingly unwilling to settle for what’s readily made for the masses.

In his blog post, Jeremy Liang states how some restaurants in China use cheap “recycled” cooking oil to maximize profits even though it poses health risks. The businesses in China which endeavor to make money fast by producing unsafe foods are harming the health of the world’s population and China’s image.  The world is already cautious of China’s food products because of scandals such as baby deaths caused by milk powder contaminated with melamine (source).

This is a situation where government needs to step in to enforce ethics. China must find a way to implement stricter food safety regulations faster and give incentives for people to follow them. If Chinese government succeeds in instilling the message that “ethical practice equals better business“, then individual businesses will gain more, China’s economy will grow more, and the rest of the world benefits. Jeremy mentions how his father’s restaurant in China earns less profit in order to be responsible for customer’s health by providing good quality food. The restaurant has built a reputable name and a large customer base. Over time, his restaurant actually earns more than those using low quality foods which turn customers away.

In business, operating ethically and making profits aren’t mutually exclusive, they should go together.

Just as Apple released its iPhone 5, Samsung has launched an aggressive advertising campaign for its Galaxy S III. The recent commercial effectively mocks the iPhone 5 and its fans, who are talking about new features while waiting in line for it.  The latest iPhone has a larger screen, LTE & new dock connector, all said to be “old news” by Galaxy S III users.  My favorite part is when Samsung implies that the iPhone is for old folks, shown by a Galaxy S III owner who is only in line to save a spot for his parents. All of this was done without explicitly mentioning Apple or the iPhone once.

Apple is the market leader in consumers’ minds and so Samsung must relate itself to Apple to be successful. In the commercial, Samsung provides a clear frame of reference and maintain points of parity: Samsung and Apple both produce popular, high-tech smartphones. Differences that actually matter to users are highlighted, like bigger screen size and instant file sharing. The use of humor also takes the edge off and make consumers feel good about Samsung even though it’s the brand doing the attacking.

A Canadian Business article explores the implications that Obamacare will have on the American insurance industry. In the US, private insurance companies make a profit off selling policies to those who choose to and can afford to buy them. With Obamacare in effect, Americans are now required to buy health insurance and private insurers are obligated to sell coverage to all comers. The private companies must provide publicly-mandated insurance and can no longer control every aspect of how they do business. They are faced with the decision of how to conduct themselves under the new health reform. Should they keep up the private business mentality of maximizing profit or become public entities and align themselves with public values? Can they do both?

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to economist Milton Friedman, the social responsibility of business is to “make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom”.  I believe that providing more affordable and accessible health care should become an established ethical custom. If the private insurers focus on doing that, they would still make money as they would have more customers and they would be benefiting society. Now that is profiting in an ethical manner.