Does Calvin McDonald ring a bell? If you think he’s related to Ronald McDonald then you’re wrong, but he may be just as powerful as Ronald or even more powerful now. Calvin McDonald is the CEO of Sears Canada (ex-CEO since September) who has resigned to head the American Sephora cosmetics chain.

He is set to begin his role as CEO and president of Sephora Americas in January 2014. McDonald will be replacing David Suliteanu who has served Sephora as that position for over 10 years. He will however be promoted to chief executive of Kendo Brands, another branch of LVMH, whose speciality lies in creating new beauty brands with established leaders such as Marc Jacobs and purchasing old ones.

It is fact that Calvin McDonald will be joining Sephora; however, what does he have in mind of the cosmetic retailer? Will he further develop and advance Sephora’s IT technology? We won’t know what he has in store for the beauty retailer until he steps in the role and discloses some information of the future of the company.

The change in Sephora’s IT system seems unlikely to me due to the fact that Sephora already altered its membership system which uses IT information in the past August. Sephora added a new level to its membership system known as “VIB Rouge” which is given to customers who spend over $1000 on products in one year. A computer data base stores the number of points associated with each customer, the amount of money each member spends, the products bought, and the “status” (VIB, VIB Rouge) of each customer.  These points provide incentive for the customers to buy more products and reach VIB Rouge as the discounts and number of samples are higher and at least once a year, more loyal customers as shown by the amount of money they spend in Sephora, are given opportunities to “quadruple” the amount of points they would normally receive.  The downfall of these events is the crowded Sephora stores and the limited availability of some products as girls hoard their everyday staples in turn for 4 times the points.

References:

http://online.wsj.com/news/articles/SB10001424052702304069604579155980331685174

http://business.financialpost.com/2013/10/24/calvin-mcdonald-ex-sears-canada-ceo-named-head-of-sephora-americas/

http://www.examiner.com/article/sephora-beauty-insider-revamped-vip-rouge-for-loyal-customers

http://www.4-traders.com/news/Calvin-McDonald-Named-President-and-CEO-of-Sephora-Americas-Succeeds-David-Suliteanu-Who-Will-Step–17394480/

A marriage can easily be terminated by a divorce paper and similarly, a 40 year old partnership can be annulled when your competitor buys your ketchup supplier. After four decades of Heinz Ketchup being available at McDonald’s, customers will have to adapt to a different brand of ketchup to eat with their fries, nuggets, or burgers. Although this may be devastating to some, this breakup doesn’t appear to affect my fellow classmate.

Early in February of 2013, Berkshire Hathaway and 3G Capital Management, the major owner of Burger King, agreed on purchase Heinz ketchup together at an estimated cost of $28 billion, including any previous accumulated debt. In June, the two companies declared Bernardo Hees, who was the ex-CEO of Burger King, to become the new CEO of Heinz Ketchup. The outcome was McDonald’s announcing it would no longer be partnering with Heinz due to “management changes”. The justification behind this, as stated by my classmate is “[obviously], McDonald’s wouldn’t want to form a partnership with a company that is so closely affiliated with [its] competitors” (Victor, 2013).

I agree with my classmate that “[one] thing that happens to a business has a chain reaction that ultimately ends up affecting the customer” (Victor, 2013) as the McDonald’s and Heinz case is evidence supporting this statement.

Since Heinz is perhaps the most well-known condiment supplier, I wonder who McDonald’s will replace them with. Will the value to the customers change or remain constant? I however will not have to worry about this as the only item I ever get from McDonald’s is the hot chocolate which surely doesn’t need any ketchup.

References:

http://www.cbc.ca/news/canada/windsor/mcdonald-s-to-stop-using-heinz-ketchup-at-its-restaurants-1.2254119

http://business.financialpost.com/2013/10/25/mcdonalds-ends-40-year-relationship-with-heinz-after-ketchup-maker-hires-ex-burger-king-chief/

http://www.usatoday.com/story/money/business/2013/10/25/mcdonalds-ends-relationship-with-heinz/3194309/

http://www.cnbc.com/id/100442835

According to Milton Friedman, the social responsibility of any business, whether big or small, is to increase its profits. Without a doubt, businesses should strive to make a profit while keeping in mind another objective to create shared value. From Comm 101, I learned that creating shared value can be defined as operating business in a way that achieves the “triple bottom line” of sustainability (economically, environmentally, and socially). TOMS as mentioned by one of my classmates is a business that strives to operate in the “triple bottom line”.

I agree with my fellow classmate that TOMS’ motto “With every pair you purchase, TOMS will give a pair of new shoes to a child in need. One for One” is a very clever incentive for customers to buy the shoes. They will be able to support a child without having to pay any extra cost other than the price they’re paying for a pair of shoes. In addition, it’s a well-thought-out strategy as it propels TOMS in the spotlight as a company that cares about the wellbeing of others and as a company that is willing to take action; therefore, being socially sustainable.

My classmate also mentions that “TOMS is overpriced considering the fabric and quality of the shoe itself; [however they’re capable of temporarily preventing] cuts and vulnerable to diseases and infections”. Since the quality isn’t that great, how long will the shoes in these poverty-stricken countries last? Will the children receive another pair? Can it be guaranteed?

Instead of supplying shoes to the children, TOMS should use the money that it uses to produce the free shoes in a more effective way such as hiring a company to refurbish the roads. By doing this, the prevention of cuts and diseases will last a longer period of time and not just life-span of the pair of shoes.

In addition, is TOMS harming an already established industry or industries in the 59 countries it is serving? By offering shoes at no cost, TOMS may be out competing local third world impoverished shoemakers who depend on their trade or sale of footwear to survive. Does the wellbeing of other individuals outweigh the wellbeing of these people?

Should TOMS consider another way to support underprivileged countries? If so, what should they do and what can we do as consumers?

References:

http://www.whydev.org/some-bad-news-about-toms-shoes/

http://www.fastcompany.com/3012568/blake-mycoskie-toms

http://www.toms.ca/corporate-responsibility/l

Have you ever dreamt about wearing socks and flip flops at the same time? Have you ever tried? I have and the outcome was numerous falls between awkward periods of walking. It’s impossible and extremely dangerous since the thong of the sandal cannot rest properly between the big toe and the second toe. That was my perception until today when I discovered “Freetoes” founded by a local British Columbian 12 year old, Katelyn Lohr.

Miss. Lohr appeared on Dragon’s Den at the age of 11, but her idea of “Freetoes”, socks with the toe area cut off, didn’t receive any support from the Dragons. Her appearance on the famous television series did however gain recognition for both her and her company, Freetoes. As of date, she has sold over 30,000 pairs of socks at approximately $6.99 a pair. Now, she’s what I call an entrepreneur, “a person of very high aptitude who pioneers change, possessing characteristics found in only a very small fraction of the population” according to QuickMBA (2013).

Others may not categorize her as an entrepreneur, but rather an owner of a small business as her company doesn’t encompass the following features created by QuickMBA that define what an entrepreneurship is:

1. An entrepreneurship generates over millions in profits: The profit earned by Freetoes is not exposed to the general public, but revenue for the 30,000 pairs of socks priced at $6 each is not enough generate millions of dollars of profit.

2. An entrepreneurial business is able to generate a significant profit during a short period of time: Miss Lohr started her business at the age of eight which was four years ago and she extremely probable that she won’t generate profits in the million dollar range at all.

3. Entrepreneurs are exposed to high risks: The riskiness of Freetoes is unclear; however, the interview conducted by CBCnews suggests that the business is not quite risky as the owner is supported by a manufacturer and nothing about debt is addressed.

4. Innovation allows the company to profit and have a competitive advantage: Freetoes embodies this characteristic as the company produced the first innovation of the sock and will profit until others decide to join the industry or produce a better alternative of the toeless socks.

Whether Miss. Lohr is an entrepreneur or a small business owner in an individual’s mind doesn’t particular matter as her innovation is the only aspect that does matter. Consumers are now able to wear socks and flip flops at the same time, something that Miss. Lohr dreamt about in the past. These socks can be worn while doing anything and perhaps they’ll attract more customers from the standard closed toe socks market. However, how long will this project last? Will the craze die down and what will Miss. Lohr do to attract more customers?

References:

http://www.theglobeandmail.com/news/national/education/keg-parties-textbook-markets-every-student-is-a-natural-entrepreneur/article14802550/

http://www.cbc.ca/news/canada/british-columbia/toeless-socks-business-booming-for-b-c-girl-1.2417812?cmp=rss

http://www.huffingtonpost.ca/2013/11/07/toeless-socks-business-bo_n_4230457.html

http://www.quickmba.com/entre/definition/

As you walk from class to class or around campus, have you ever encountered girls wearing the same military-like jacket, perhaps in a green or darker colour? Or identical jackets with the same triple hoop-like logo? The answer is probably yes and if you’re from Canada, you probably know where these articles of clothing originate from. Aritzia, that’s right.

Aritzia is a Canadian brand that was founded by Brian Hill in 1984 in my hometown Vancouver, British Columbia. Since then, the retailer can be found in cities across Canada and even in limited parts of the United States of America. In a later month of 2012, Aritzia exposed its customer base to an online store which may have caused some heart attacks in their sales associates.

Why?

An analogy of the sales associates would be panthers clawing away at each other for the last scrap of meat, or in Aritzia’s case, the sale.

According to an article from Hushmagazine, the sales associates are expected to sell at least $500 worth of merchandise every hour in order to keep their jobs and perhaps be promoted. They receive no commission whatsoever and the sales performance of each girl is put on display for other employees to see. This creates a competitive atmosphere among the employees and this is why every time you pick up an item, a girl (more likely a few) decked out in Aritzia clothing will come rushing over to you. Don’t worry though as they’re not trying to rip off your head; they’re only trying to persuade you to pay for the item(s) as soon as possible.

If you’ve taken Comm 101, you probably read the article about Zappos just like me. From the article, we are informed that Zappos partially maintains its positive and relaxing corporate culture by affording free food its employees. Doesn`t that spark an idea in your head? Maybe Aritzia should offer its employees free food as way of enhancing its working environment.

Aritzia already provides that service to its employees typically around the Christmas season time. However, free food “on boxing day… [requires]… work, and most of the time it is upwards of 14 hours without a break” (Hushmagazine, 2013). It is a no brainer that the environment in Aritzia is often catty and always competitive.

With all of that being said, Aritzia is flourishing with profit though, hence the number of new stores opening up. However, is making profit more important than the wellbeing and stress level of employees, humans?

References:

http://hushmagazine.ca/culture/5-worst-things-about-working-at-aritzia/

http://www.ratemyemployer.ca/Employers/AR/Aritzia

http://www.complaints.com/2010/october/7/Snobby_Aritzia_Sales_Associate_243527.htm

http://en.wikipedia.org/wiki/Aritzia

Sabo Skirt is an Australian internet based clothing retailer that has successfully used social media, especially Instagram, to expose their collection and brand to consumers. The owners, Thessy Kouzoukas and Yiota Karalouka, post numerous photos a day of their clothing which is unique and one of a kind (designed by them exclusively for Sabo Skirt) on instagram and frequently update their other social media pages to attract the attention of more potential consumers and current ones.Their designs are a point of difference for Sabo Skirt and they set them apart of other retailers who haven’t yet come up with similar designs or patterns. The use of social media is a key activity and a key channel for Sabo Skirt as it connects customers to the brand and has generated more sales for the company. According to Karalouka, “[before] Instagram, [they] were selling a few dozens items a week compared with now where [they] sell hundreds, or in some weeks in excess of one thousand items”.

In addition to Instagram and Pinterest, Sabo Skirt also broadcasts information to interested individuals by operating a blog. The blog currently has over 5100 members and provides links to other fashion inspired blogs. The blog posts not only showcase the clothes, but also the lives of the individuals behind the blog. This makes the blog more personable and engaging. Like most blogs, there are plenty of photos of fashion items and the clothing been worn and minimal words. The photos give readers some ideas of potential outfits that they can duplicate.

The company is solely online based which limits the customer base to individuals who have credit cards or a way of purchasing the items online. Most, if not all, the revenue that Sabo Skirt generates is through its exclusive online store that does ship internationally. The international shipping, at the expense of the customer, however does increase the target market of Sabo and allows Sabo Skirt to be more competitive as many online retailers do not offer that service.

The following are some of Sabo Skirt’s social media sites:

http://saboskirt.blogspot.com.au/

http://instagram.com/saboskirt/

https://www.facebook.com/SaboSkirt

http://www.pinterest.com/saboskirt/

References:

http://www.couriermail.com.au/business/your-business/social-media-a-perfect-fit/story-fnic6oou-1226719879672

http://the-acn.com/news/thessy-kouzoukas-interview/

According to the Law of Demand, when price is high, demand for that particular item is low. However, that is not the case for the Hermès Birkin which retails from $7000 to $10000 Canadian. The demand for this bag has gotten so overwhelming that even the waitlists are full and unable to be added to. Furthermore, each individual bag is entirely handcrafted, which sets them apart from many in the bag industry, and the process requires at least 15 to 20 hours.

In an interview with the CEO of Hermes, Patrick Thomas, he states that Canada has become the fastest growing market for Hermès due the following reasons: Canada attracts many tourists, Canada has a good economy compared to Europeans nations, and the tastes of Canadians are changing. Many individuals are opting for a brand that is not as flashy or as “bling bling” according to Patrick and Hermès falls into the category of a luxury good whose logo is simple and is not embroidered all over the surface of the bag. It has managed to adapt to the changing interests and as a result, sales grew 15% in Europe even though the economy was in a recession and even greater in Canada.

I believe that the company is not going to decline any time soon because it knows what its customers [the wealthy and those who are saving to purchase a Hermes product] want and is willing to adapt to changes in society. I however can’t understand why individuals would spend over seven grand on a purse. Perhaps it’s because of the extra satisfaction they will get by sporting around a Birkin or they just want to show off their wealth or hardwork in a more classier way. However, these interests may be due to the fact that the bags are in high quality, something that can be used for a considerably long period of time.

I guess the saying the saying is true: good things come to those who wait. Those who want a Birkin will surely be waiting a hefty period of time!

References:

http://www.bnn.ca/News/2013/10/2/BLOG-Hermes-Birkin-The-most-in-demand-bag-in-the-world.aspx

Founded in 1975, Zara is a Spanish clothing retailer that operates 1770 stores across the globe. Its goal is to transform all its stores into eco-efficient stores and earn a golden LEED award in doing so which acknowledges the world’s “greenest” buildings. Of the 1770 stores, approximately 1300 have been renovated or built to satisfy Zara’s desire to be eco-efficient. The transformation has already reduced Zara’s operating costs on electricity (down 30%) and water (down 50%). In addition, “furnishings [in many stores] are made of eco-qualified wood or re-cycled materials” which further shows consumers that Zara cares for the environment. Zara has currently spent over one billion dollars towards this project.

I believe that Zara’s move reflects its knowledge and desires to fulfill the changing attitudes of society. Knowing what consumers want and how to delivery this “want” has allowed Zara to remain in the clothing industry and profit throughout the years. Other companies should consider following Zara’s footprints as sustainability and awareness of the environment have become a popular topic of discussion and action in the past decade. However, some of these companies simply do not have the financial support and power that Zara has.

Zara emphasizes that it gives consumers “accurate fashion” and not “fast fashion” and this motto is supported through its actions to create more environmentally friendly stores. I have been a loyal shopper of Zara clothing – half of my closet is from Zara – and its decisions to become more environmentally involved will encourage me to shop there more often. Support a company who cares for the betterment of society and not just one who wants to earn a profit!

References:

http://www.fashionunited.co.uk/fashion-news/fashion/zara-invests-in-new-eco-efficient-stores-2013100418653

After much discussion regarding Loblaw purchasing Shoppers Drug Mart for $12.4 billion, the shareholders of Shoppers voted earlier this month (September) and 99.89% of all votes casted were in favour of the deal (Business News Network). Once Loblaw gets the approval from the Ontario Supreme Court, its competition in the area of groceries will be slightly less as the two companies will be working together instead of competing against each other for more customers and revenue. This however can negatively affect the price of goods for consumers. This deal also provides Loblaw with a more developed and renowned pharmacy sector. However, the combination of Loblaw and Shoppers will still face high levels of competition from major US companies currently in Canada such as Walmart and the Target.

Is Shoppers worth the $12.4 billion that Loblaw has proposed? I believe it is as Shoppers is known for its variety of pharmaceutical services and since most Shoppers are open 24/7, consumers will have access to Loblaw house brands or food during odd hours of the night when larger companies are inaccessible. Combining two Canadian companies also promotes more protection from American giants currently present or entering Canada.

Is the deal beneficial for consumers?

No: The deal can result in a decrease of competitive prices and previously established systems (Shopper’s Optimum Card) may disappear unless both companies agree to keep it.

Yes: A greater variety of goods present in each store and an expansion of already established systems may be possible.

At this time, we can’t be certain about the benefits or consequences of Loblaw purchasing Shoppers Drug Market. We have to wait for actions to be taken and evaluate those actions based on their influences on consumers.

References:

http://www.huffingtonpost.ca/2013/07/15/shoppers-drug-mart-loblaw_n_3597522.html

http://www.bnn.ca/News/2013/9/12/Shoppers-gets-shareholders-approval-for-takeover-by-Loblaw.aspx

http://www.theglobeandmail.com/report-on-business/what-shoppers-analysts-think-about-loblaw-deal/article13228724/

http://www.theglobeandmail.com/globe-investor/canadian-tire-loblaw-in-battle-mode-ahead-of-target-arrival/article8782105/

http://www.theglobeandmail.com/report-on-business/shoppers-shareholders-set-to-vote-on-124-billion-takeover-by-loblaw/article14270265/

Many leaders of corporations argue that maximizing profits through lawful manners is the most important aspect of business even if that means completely or partially reducing the benefits of employees. According to Kim Bhasin of Huffington Post, the CEO of the fast growing retail institution, Forever 21, appears to be an activist of this belief as he shortened the hours of numerous full-time employees and cut “medical, dental, vision, voluntary plans” and paid time off of part-time employees shortly after President Obama passed the “Affordable Care Act”. This act “requires companies who employ 50 or more workers to provide health insurance coverage for their full-time employees or face a penalty”.

Although representatives of Forever 21 state that these cuts weren’t in response to the act, I strongly disagree as their actions have already allowed Forever 21 to avoid the additional costs of Obamacare. I believe this is unfair for employees as many depend on their previously accustomed wages to meet monthly expenses and simply cannot afford to provide their own health plans in this society. On the contrary, Forever 21 has the right to do this as it is not illegal, but simply against my morals and many others.

Will other companies follow Forever 21 in cutting benefits and hours in order to avoid the additional costs of Obamacare or any other regulation to assist employees? Has this already become a trend in the business world?

References:

http://www.huffingtonpost.com/2013/08/16/forever-21-memo_n_3769605.html