The United Nations is an omnibus framework, whose size is essential to its mission of international cooperation, but inhibitive to smaller scale humanitarian activities. It is for this reason that I believe that Social Enterprise, ARC, and similar initiatives are important, even if the UN was fully funded.

UNICEF, and the UN’s humanitarian programs focus on alleviating poverty by increasing access to basic needs, essential medicine, and improving infrastructure.The issue–not all that dissimilar to disruptive innovators versus entrenched entities–is that an established bureaucracy limits experimentation, and cannot act efficiently on a smaller scale.

Image from Comunitá San Patrignano

Thus, Social Enterprise can focus its efforts on campaigns and activities that improve quality of life for a specific demographic or population. These actions should involve ongoing contact with the people being helped, giving them the opportunity to create their own success. For instance, the UN is unlikely to create and market a brand that employs the impoverished in developing nations, but there are numerous examples of Social Enterprises that do this. Furthermore this type of action is a sustainable loop, where the proceeds of sales can be reinvested into employees and communities, while the humanitarian actions by the UN do not directly recoup the money invested.

I think that in this way the organizations can coexist and improve outcomes, but through clearly defined missions with distinct objectives and operations.

In an increasingly politicized world, where facts are eschewed for fear, and partisanship is exacerbated, the boundaries of business ethics are being redefined. In class we have primarily discussed these topics on a corporate level, where the practices of the firm are being evaluated.

As an extension to this, I see a trend of the social and political beliefs of a firm’s principals and leadership becoming public, which can have bearing on firm performance. Examples include the publicly organized embargo on Chick Fil-A because of its founder’s homophobia, and a former Mozilla CEO’s political donations resulting in him being fired after only eleven days on the job.

Chick Fil-A Founder Truett Cathy – Image from GCM Watch

The question then, is how to evaluate competency versus the costs of controversy in the course of personnel decision making. I believe that an application of Milton Friedman’s belief in maximizing shareholder value is the best way to address this issue. The level of public outcry and the likelihood of persistent media coverage must be weighed against the individual in question’s unique ability to excel in their position. In cases where the former is stronger than the latter, the individual should be fired, because their harm to the firm’s value is greater than their positive impact.

Image from Huffington Post

Stav’s blog post outlines an important contradiction that can occur between brands within the same conglomerate.

I believe that branding is especially important in this category, because creating meaningful points of difference can be difficult. Instead positioning within a consumer’s mind must come from packaging, price, product variety, and advertising.

On her point about consumer backlash stemming from a lack of authenticity, I disagree. While coexistence between contradictory messages may seem impractical, I doubt that this is a circumstance where many consumers will make the correlation. The reason for this is that Unilever minimizes its branding on its products, meaning that consumers may not understand that Dove and Axe are part of the same entity.

Image from Brand Media Week

In contrast, I feel that Unilever’s strategy is prudent and necessary. To reach a broad spectrum of consumer segments, it must appeal to the sensibilities of those demographics, and the optimal way to do so is to market products under different names with different messages. Were the firm focus on a single message, it would have to concede some demographics to competitors, which would have more tangible harm on income than the issue of contradiction.

In summation, her core premise that conglomerates can have incoherent positioning between similar products is true; however, in this instance the sacrifice in authenticity is necessary to allow the firm to sell to more demographics.

My colleague Keegan discussed the recent launch of Apple Pay, specifically its barring from certain retailers. He cited Apple’s early mover advantage and convenience as reasons to declare it the winner against yet to be released competitor Current C.

I disagree with his assessment as well as his prediction. His premise that early mover advantage will be a deciding factor is directly contradicted by Google Wallet’s failure–which has been available for over three years without much adoption. His point on convenience’s core relevance is stronger; however, an essential element of that convenience is being universally available at popular retailers. Only at that point can Apple Pay truly realize its value proposition of “leaving your wallet behind”.

Photo from Cult of Mac

I think that Current C’s viability is less dependent on Apple Pay than it is on the ability of its partner retailers to market the product to their enormous customer base. The reasoning being that Apple is pursuing a differentiation strategy with its seamless convenience, while Current C is focused on a specific subset of consumers. Current C is trying to modernize reward redemption for retailer specific loyalty programs. Ultimately, I believe that the differences in customer segments, and value propositions are sufficient to allow the technologies to coexist.

FCC Chair Tom Wheeler – Photo from Wikipedia

The FCC Chair’s announcement this week to redefine what constitutes a multichannel video programming distributor (M.V.P.D) was described as a measure to increase competition to counteract the consolidation of content producers and distributors. I believe that the ramifications of this policy–should it be enacted–will have a significant impact not just on the distributors–which are the target–but on the way that content is produced.

By reducing the barriers to entry, the industry becomes more prone to disruptive innovation, which may produce alternative revenue models. Traditionally, content has used advertising during live-air broadcasts to cover production costs, and then sought lucrative syndication agreements after a certain threshold of episodes. I see this model as unsustainable in an era where content is increasingly available on-demand and distributed through the internet, primarily because the networks that purchase syndication rights to fill their air-time, become obsolete when that content catalogue can be accessed at any time.

To compete for market share firms will need to either wage a price war, or increase their points of difference. I think that the latter is likelier, and that differentiation will be created through exclusive original content. Thus customers will be acquired through interest in specific shows, which will result in more selective choice than is possible in the current era of channel bundling.

Strategy must be derived from a comprehension of external factors as well as internal strength. The Northern Gateway Pipeline is attempting to leverage the ample supply of Albertan oil to satisfy increasing demand in Asian markets. Its challenge; however, is convincing those whose land the pipeline passes through possesses a minimal threat–especially relative to the economic rewards. The company has thus far failed to do so, with First Nations opposition being the most prominent. This circumstance has especial focus on Aboriginal groups because the proposed route crosses through reserve territory. Pipelines, despite transporting oil with a lower risk than alternatives, evoke strong images that develop into a near immutable negative perception.

Photo by How Stuff Works

This issue also reflects the larger image problem facing traditional energy companies. It is this external difficulty that threatens the greater interests of oil companies, which has motivated them to spend significant amounts on lobbying, and introduce new advertisement campaigns.

The combination of psychological factors, lack of benefit for aboriginals, and genuine danger to ecosystems, makes the likelihood of the project being completed small. Thus, Enbridge should seek to circumvent the opposed jurisdictions with alternative transports, thereby avoiding the external issues, rather than challenging an entrenched position that would be impractical to persuade.

SheTaxi is hoping to replicate the convenience of app based shuttle services–Uber Et al.–but differentiate by having exclusively female drivers, for a female clientele. Its value proposition is that the status quo offers a subpar experience for women, with unappealing interiors, and overwhelmingly male drivers. Company founder, Stella Mateo points to women exclusive gyms and choice in gender for a gynaecologist, as proofs of concept. Her assumption that something that was successful in an industry, is directly transferrable to another indicates a poor foundation for her value proposition.

Photo from SheRidesNYC

The principal difficulty for the company; however, may not be differentiation, but points of parity. Taxi services must meet a certain vehicle concentration to be convenient. The company currently has 100 drivers compared to YellowCab’s 13 000 cars in New York. Other start-ups may have faced similar struggles, but successfully poached experienced drivers by eliminating fees to licence vehicles. The problem for SheTaxi is that 95% of existing drivers in New York are male, and consequently, its drivers will be as inexperienced as they are difficult to find.

Congruently, the company’s challenges to find and train drivers, and the questionable core proposition make it likely to struggle, and fall into obscurity, after initial press about its novel thesis dissipates.

Photo by Michael Bohanes

On his blog, company co-founder Michael Bohanes describes the failure of his first start-up, Dinnr, and shares lessons from his experience. The company offered same-day delivery of all the necessary ingredients–pre-measured and ready–from a recipe that customers could select online. Mr. Bohanes blames a poorly constructed value proposition for making success infeasible. Furthermore he warns of the perils of poor market research, which can give an ambitious entrepreneur false confidence.

Because of the size of his company there are no other sources from which to gain perspective, and therefore it’s difficult to dispute or deny his conclusions. Whether or not operational or strategic mistakes contributed to the demise of Dinnr is unknowable given the available information.

Thus, the surest factor in failure was his decision to found a business based on what he knew and liked, rather than identifying a need that could be filled by a service he was qualified to provide. His market research further undermined this process, by conducting face-to-face interviews with direct questions, which led to sympathetic answers from participants, rather than extraction of valuable underlying information.

Together, these two errors convinced him that he had found a value proposition married to an untapped market. In actuality, he was relying on tenuous research and non-specific customer segments, to support a passion, rather than a business.

After a failed effort in 2005, Walmart has made a second foray into the market for the unbanked. Regulatory complications stymied its last attempt, motivating Walmart to look for a strategic partner, rather than handling the service itself. It found one in GreenDot’s GoBank, which is a simple, cheap, online alternative to a traditional bank.

Photo from the Fiscal Times

Such an alliance appears mutually beneficial, allowing Walmart to circumvent the regulations of becoming a bank, and giving GreenDot an advantage in acquiring customers. Online banks lower overhead, allowing the offer low fee accounts by avoiding an expensive network of branches, but in doing so sacrifice visibility and convenience. Walmart’s retail network is omnipresent and established, with around 4200 locations–only 1100 fewer than Bank of America. This allows GreenDot to maintain its cost advantage, whilst minimizing its visibility shortcomings. Furthermore, Walmart is incentivized to push GoBank’s adoption, which makes GreenDot’s position in this partnership even stronger. The only uncertainty is what portion of revenue GreenDot had to sacrifice in exchange for the accommodation, which determines to a degree how beneficial this will be for each of the two partners, along with how many accounts are activated as a result.

In summation, this appears to be a partnership with the potential to help each side meet their needs, as one increases its presence in the consumer’s mind–without using capital–and the other avoids the regulatory hurdles preventing it from making money from the billions of transactions that occur at its locations annually.