Alibaba has dominated the Internet retailing in China and aims to be the biggest e-commerce market in the world. It is already the largest business to business and consumer to consumer company in the world. From its original proposition of connecting businesses to each other, it has expanded to allow ventures to sell directly to the public and authorize the public to sell to one another. Grace Cheng’s blog post “Asian Invasion: E-Commerce Emerges” explores Alibaba’s potential growth in revolutionizing the Chinese economy and expanding to the global market. The online retail giant encompasses the features that are found in eBay, Amazon and Paypal all combined in one.

Photo via Bidnessetc

Why is Alibaba so profitable?

The fundamental reasons of why Alibaba is successful is the vision of the company. A trait in successful entrepreneurs is being determined to solve problems and being able to strategize to meet company goals. Instead of focusing on large companies, CEO Jack Ma, focused on small businesses, which he deemed to be the “future of China.” Their value proposition of helping small businesses make money has proven to be successful. The creation of multiple platforms under the group has gained prominence for facilitating the process of generating income for smaller businesses. Alibaba’s online platforms including Taobao and TMall account for 80% of the online commerce in China. This has contributed company shares skyrocketing past IPO price after its recent debut.

As Grace mentioned, shopping online is the latest trend. It is convenient, affordable and simple especially for consumers that are busy with there everyday lives. The diverse selection of products and compelling prices drive traditional consumers that were previously reluctant to shop online to convert. As individuals become more familiar with the concept of e-commerce they transition towards making purchases online. I agree that as real estate prices are soaring in major cities, it may be time for businesses to migrate toward setting an online platform for their product and services instead of a spending a startup capital on a physical store location.

With the prospective growth of Alibaba,  future for e-commerce has great potential for businesses to invest in.

Resource

https://blogs.ubc.ca/gracecheng/2014/10/05/asian-invasion-e-commerce-is-where-its-all-at/

http://www.theglobeandmail.com/report-on-business/international-business/us-business/alibaba-shares-surge-46-in-their-debut/article20693217/

The first thing that comes to mind when we hear the words “7-Eleven,” would be of its famous Slurpees and countless snack aisles filled with fat and sugary goods. In recent years, consumer preferences are ever changing and 7-Eleven is trying to accommodate for it. The retail chain is focusing more on the psychographics of the market including consumer values, attitudes and lifestyles.  Healthy living is the new trend and consumers are looking towards choosing healthier meals rather than junk food. The idea of healthy meals in convenience stores is an entirely new concept. Being the first in the retail chain to offer convenient and healthy on-the-go foods adds to the company’s value proposition.

In Chelsea Choi’s blog post “7-Eleven’s New Healthy Heaven,” she mentions that 7-Eleven is a clear-cut cost leader, but I would have to argue differently. Compared to other supermarkets such as Costco and Wal-Mart, 7-Eleven does not charge at the cheapest prices. Instead, it seems to be using a differentiation strategy, that delivers is products in a fast, convenient and accessible manner. With this incentive that it has on the market it charges its prices relatively higher than ordinary grocery stores.

Image via Tony Horton Kitchen

By partnering with Tony Horton Kitchen, 7-Eleven can now offer “fresh on the go” choices including nutritious and delicious sandwiches, wraps and cold-pressed juice at affordable prices. I agree with Chelsea that the new partnership has its risks, but if proposition is successful, it can attract a greater market segment.

Since positioning is the battle for the consumer’s mind, 7-Eleven has to reposition itself with the word “health” in mind. With the collaboration of “celebrity health and fitness expert” Tony Horton, it could transform 7-Eleven’s image as a chain that offers healthy options even on the go. It is exciting to see the potential in changing the traditional mindset that consumers have when they think convenience stores.

Resources

https://blogs.ubc.ca/chelseachoi/2014/10/04/7-elevens-new-healthy-heaven/

http://www.ibtimes.com/7-eleven-teams-p90x-creator-offer-healthy-food-options-1697849

http://corp.7-eleven.com/news/09-30-2014-7-eleven-powers-up-its-fresh-foods-menu-as-first-retailer-to-offer-tony-horton-kitchen-foods

Commentary on External Blog Post

In the technology industry, Apple is typically the first company that comes to mind. What makes the business so successful incorporates not only its compelling value proposition, but the mindset and inspiration behind the company. Steve Jobs’ philosophy challenges the mindset of a traditional CEO. His motivation behind the company was not to earn profits, but create innovative products that revolutionized the industry and redesign the retail experience for its customers.

Photo via Horizont

The business blog I came across, discusses the thinking behind Apple. It talks about Apple’s non-traditional approach of positioning itself in the mind of the consumers. Apple’s goal is to deliver personal assistance to its customer that enriches their experiences with their products. The company’s organizational structure is not driven towards an incentive based system. Its employees do not have to go to work everyday worrying about making enough commission or not meeting sales goals. Their purpose is not to sell the newest iPhone, because people buy them anyway, instead to assist anyone that needs help as long as they need it. Apple store employees are trained to approach and interact with customers in a manner that allow them to enjoy their experiences at the store.

Apple does not focus on marketing its products, since people buy their products regardless. Instead, they focus on building a loyal customer base. Apple specialists are there to make sure consumers get the most out of their products. This is where Apple’s differentiation strategy comes to play. It focuses on creating gains for its customers by enhancing the overall experience, by teaching them the basic skill sets to operate the system. It also alleviates any pain that the customer may experience when encountering a technical difficulty. These in turn, establishes brand loyalty. When the newest product hits the market, consumers would buy them without question.

The Apple store offers hands-on experiences with its newest products. The store itself is spacious, clean, poster-free, and wire-hidden. The store is designed to attract to anyone who walks by and appeal to anyone who walks in.

This blog post provides insight for entrepreneurs on how Apple, through its value proposition, entrepreneur vision and differentiation strategy came to be one of the most successful companies in the world.

Resource

http://blog.guykawasaki.com/2012/04/10-things-you-can-learn-from-the-apple-store.html

United Nations, even with the necessary funding and resources, fail to deliver significant improvement to issues such as poverties in developing countries around the world. The Arc initiative, unlike conventional programs that revolve around providing resources and funding for developing countries, attempts to initiate business development and entrepreneurship in developing countries. This would in turn place the country in enhanced economical states while provide education to both the participating university students and the local community.

Feedbacks from students who have visited Rwanda and the local government suggest the encouragement to proceed with the Arc project. The local enterprises lack the knowledge to utilize their resources to their fullest efficiency. The Arc provides learning opportunities for the local entrepreneurs to effectively utilize their resources in order to enhance the economical well being of the country.

Photo via UBCnews

Rather than provide a finite number of donations, that would eventually be consumed and have the country development be constant, the Arc develops business and management skills locally and help the country initiate its financial development and independency. Instead of providing a temporary relief to a reoccurring crisis, the Arc attempts to deliver a solution to the issue itself and promote the betterment of social and economical states for the countries in need.

Resource

http://news.ubc.ca/2014/06/30/upward-arc/

http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative

When you visit a local Starbucks typically you would be greeted with a smile and be asked in a friendly manner, “What would you like us to get started for you”, “May I have your name for the cup?” The genuine service model that the international coffee chain carries creates “customer intimacy” and builds a sense of community. Starbucks’ value proposition, like most other coffee shops, is to deliver specialized handcrafted coffee to its customers that are tailored specifically to their taste. What differentiates Starbucks from its competitors is its brand positioning and customer loyalty. As one of its branding strategies, they enhance their customers’ experiences through their comfortable atmosphere and outstanding customer service. The simple gesture of remembering the customers name and order makes the overall coffee experience more personal and enjoyable. Starbucks compelling value proposition is what keeps their customers coming back.

Now imagine being able to have a cup of coffee every day delivered to your doorstep or office desk. This would relieve many of the customers’ pain in lining up every morning. Starbucks is introducing its delivery service in late 2015 in selected locations. Its services can be conveniently accessible online or through their mobile applications.

Photo via Starbucks

While businesses are slowing transitioning into e-commerce, Starbucks is stepping in and taking advantage of the ongoing trend. The service may bring convenience to busy customers, but it cuts out the personal relationships that are formed in the community while customers visit the store. The company also has to adjust their cost structure to train and hire more employees to deliver their products.  This may be a costly proposition, but it helps the company position itself as the first in their industry to offer these services. This contributes to Starbucks’ value proposition by increasing it  Starbucks now can expand its target market to workplaces that need their daily dose of caffeine delivered at their convenience. In a way, the new delivery service may allow their customers to take on new perspective of how they want their food to be delivered in the future.

 Resource

http://www.foodworldnews.com/articles/7964/20141103/starbucks-delivery-service-announced-coffee-right-on-your-doorstep.htm

When making business managerial decisions, a company or firm should always consider both its internal and external stakeholders. According to Freeman’s Stakeholder theory, there is a need for management of organizations to address the business ethics and moral values in its decisions. BC hydro recently proposed on constructing and operating a dam on the Peace River in North Eastern British Columbia, known as the Site C hydroelectric megaproject. There would be serious implications on the First Nations territory that prohibit them from continuing with their traditional practices. The flooding of the valley will destroy the precious wildlife habitats and agricultural land that the First Nations call home.

Photo via Timescolonist

Due to the growing demand for clean hydroelectric, there is a need for BC Hydro to implement new projects, but the project should not impair the Aboriginals from their means of survival. Businesses should be mindful of the land that belongs to the Indigenous, and negotiate a proposition that creates shared value. Businesses should be conscientious on introducing smaller projects that would not only promote sustainable clean energy but support the well-being of the First Nations. With heightened awareness of the environment, BC Hydro should look towards new approaches that create a sustainable project, which adheres to the wishes of the First Nations.

BC Hydro should build stronger relationships with the First Nations. With their support, the company could come up with profitable solutions that benefit society as a whole. The potential partnership between them could introduce countless opportunities that help establish long-term profitability. First Nations could then have the opportunity to work with businesses and voice out their concerns. Also, they have the chance to partake in the creation of new innovative and sustainable technologies. The company in the mean time have the chance to take advantage of available resources from the Aboriginal land and utilize its resources effectively to reach its goals.

Resource

http://www.vancouversun.com/news/First+Nation+chiefs+stage+Site+showdown/10215965/story.html

Walmart recently debuted its Walmart Pickup–grocery warehouse to registered customers in the town Bentonville, AR. The test concept offers free service for customers to place their order online any time between two hours to three weeks in advanced. Customers can drive to the grocery warehouse to pickup their groceries by notifying attendants at a kiosk. This new way of grocery shopping will draw the attention of consumers that find shopping to be a major inconvenience.

Photo via Walmart

The service is a great way for Walmart to establish its digital platform amongst its customers. By targeting its online consumers, it provides convenience to parents with young children, seniors and individuals with disabilities. Using its online database, the company can gather information on its customers shopping habits, which will help the company gain insight on its target market. This new business strategy has a much higher cost structure because it would require additional cost to cover its labour and technology fees, which could potentially raise consumer’s cost or reduce company profit. While this approach can differentiate Walmart from other wholesalers, it may not satisfy all customers including average homemakers who typically select their own meats and perishables.  The strategy could also jeopardize Walmart’s cost leadership strategy, since the profit margin for groceries are already so thin, the additional costs could potentially effect the company’s cost advantage. Walmart needs to prepare itself for further obstacles with its new initiative, but if they target the right demographics, its drive-through grocery could become a big hit in the future.

Reference

http://www.forbes.com/sites/retailwire/2014/10/02/walmarts-drive-through-grocery-concept-is-a-head-scratcher/

McDonalds, the number one fast food chain, has encountered some rough edges recently. In August, after the food safety scare in China, the fast-food chain suffered its worst comparable sales in over 10 years. With rising competitors in the fast food industry such as Chipotle and Panera, McDonalds’ brand seems outdated.

Photo via Economictimes

The chain is now testing out tablet-based ordering in several of its locations in the States. This eliminates human interaction and allows for the customers’ meal to be brought out to them without waiting near the counter. With the self-ordering system it gets rid of labour costs, which take up 20% of revenue. Workers demand higher minimum wage costs of 15$, almost double of the current federal minimum wage. With fewer workers, it gives the company flexibility to increase existing workers wages and maximize profitability. In this era where business decisions are made based on customer data bases, using tablets can increase the efficiency of data collections for companies to better track customer preferences and provide them with special marketing promotion and offers. While tablet ordering may not solve all the company’s problems such as the quality of food, the cutting edge technology could attract the younger generations with its efficient service. Automated ordering makes the ordering process more enjoyable and encourages more spending while helping boost performance of the company for the long run.

References

http://www.nasdaq.com/article/tablets-are-the-way-forward-for-mcdonalds-cm398335

This fall Apple has just introduced its Apple Pay that allows people to pay for their everyday goods or services with a touch of a finger using the newly released iPhone. This service is being released in the coming weeks, which has the whole technology industry swarming to profit from future in apps that could replace cash, checks and credit cards.  With Apple’s entry into the digital payment service, commerce giant eBay said it would transform PayPal to make it more predominant in the fast adapting market. Apple Pay is revolutionizing the digital payment market with its fingerprint reader on recent iPhones to confirm the payer’s identity.  The secure mobile payment option on the phone if proven successful will be a huge threat to PayPal.

Photo via Apple

Apple’s differentiation strategy has never ceased to be one step ahead of the crowd. eBay’s recent decision for allowing PayPal to stand-alone could possibly benefit it after Apple’s introduction of Apple Pay. There is not yet an equivalent for Apple Pay on Android devices, which give PayPal a chance to gain back its customers and further prosper in the market. It has the possibility of partnering with Apple’s main competitors in the market including Samsung and Google. As the mobile technology industry is evolving, it will completely change the prospective of how consumers pay. The future of Apple Pay can change day-to-day transactions and open up new possibilities in the mobile payment industry.

References

http://www.nytimes.com/2014/10/01/technology/apple-pay-signals-new-era-at-cash-register.html?ref=business&_r=0

Business ethics is a concept that is often forgotten. When companies are at a point where they are not meeting ideal profit goals, they often cut down on wages of hardworking employees. According to Freeman’s Stakeholder’s theory, in order for a business to be successful it has to accommodate for all groups in a business. Satisfying employee demands are essential for improving its labour productivity and product quality. However, Coca Cola Amatil strikes a deal to implement a pay freeze on its new employees by paying them 38% less. While old employee wages are unaffected, new employees are expected produce the same work efficiency as those that are paid a higher wage.

Photos via WordPress

The company puts weight onto its workers to ensure maximum profits. While cost of living is on the rise, workers are being paid the bare minimum. This makes their job This questions how ethical the business is for underpaying employees that essentially perform the same task. However Friedman’s Stockholder Theory justifies it as an ethical practice as long it remains free from deception or fraud. The company’s actions create an unequal working field and prevent the economy from growing at a steady pace.

Businesses should avoid focusing solely on its shareholders and adopt the Stakeholder’s theory, which takes in account the best interests of all aspects in a business. With more ethical practices that satisfies the needs of everyone, the business can progress in a more sustainable and economical manner.

References

http://www.dailymail.co.uk/news/article-2751441/Coca-Cola-Amatil-slashes-wages-new-employees-working-38-LESS-job.html#i-5789593ea39343a3