Category Archives: COMM 101

Friday, December 3, 2010 marks the grand opening of Vancouver’s HP Store. This new HP store, situated on 1162 Alberni Street, instigates a new approach in HP’s operations. Parallel to Dell and other companies, HP now attempts to manipulate a direct business model. Their products can now be sold directly to consumers cutting out the middle man in the supply chain. I think this approach will assist HP in thriving. HP is now matching up to its competitors, including Apple and Sony, by launching its own store as the others have already done so. This assists in strengthening the company’s image and repute. Because HP is a fairly well-established company in the IT industry, the store opening will attract consumers, particularly those who are HP fans, to its store where customers can browse through and purchase an array of their products. On their Facebook event page, 438 people have confirmed that they’ll be attending their grand opening event while 133 are undecided. This already marks tremendous support and interest. Furthermore, this new approach will increase HP’s profits as there is no double marginalization. HP will definitely continue to flourish through the implementation of this strategy.

Sources:
HP to open retail store in Vancouver
Canada’s First Ever HP Store in Vancouver
Facebook: HP STORE GRAND OPENING EVENT

The George Foundation (TGF) demonstrates social entrepreneurship as it is comprised of the following three components. It consists of social entrepreneur, Dr. Abraham M. George, who established a social purpose venture, the George Foundation. The George Foundation was launched in Bangalore, India during a meeting. After staying in the United States for over 20 years, Dr. Abraham M. George returned India for the first time since his absence with an intention to initiate humanitarian undertakings. During the meeting with George’s best friend, Angeline Nair, and several personages of the Bangalore society, the George Foundation was launched.

This social purpose venture entails a social mission “help alleviate poverty, promote health and a clean environment, and strengthen democratic institutions and values in developing countries.” (TGF Mission) One project that TGF established was the Shanti Bhavan Boarding School that aims to provide education to impoverished children who are not different from those children who are more fortunate. To implement protection of health and the environment, TGF instituted the Baldev Medical and Community Centre where approximately 30 patients a day are served. Services offered by this centre include providing health checks for children, holding health education classes, and sending field workers to home. With a strong social focus in mind, TGF have also initiated several other projects using innovative approaches.

Sources:
The George Foundation Main Website
Wikipedia: The George Foundation

Zara is an example of a successful entrepreneurial company. Every week new products are displayed on their shelves and racks. Hence innovation is a key characteristic to company. Its competitive strategy of shipping new styles to their store each week is a competitive advantage. This strategy is very risky as not every company can replicate the same strategy and be successful. Due to Zara’s new introduction of fresh styles of clothing each week, Zara is constantly creating new markets. They are able to target teenagers to women in their 40s, as well as men. And because new looks are introduced each week, it attracts more customers resulting with new markets. In addition to that, Zara exhibits new production methods. Getting the labour done in Asia where labour is cheaper is a common thing most clothing companies would do. Zara, on the other hand, has production companies in Europe to do it. Although it is more expensive, it allows them to monitor their inventory easily. Hence this results with a new form of organization. Zara is an entrepreneurial company as it pioneers change and possesses unique traits that only constitute a small portion of the population.

Going green is an initiative that most businesses are trying to achieve as there is a market segmentation and trend for green products and services. However, attempting to be sustainable and maximizing profits is a difficult balance. Hence businesses have resorted to “greenwashing” unfortunately. According to Sins of Greenwashing, greenwashing is “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.” In Metro’s article, “95.6% of all “green” consumer products make at least one dubious claim about their environmental purity.” This means that 4.4% of the other products that are labelled “green” are genuinely green. The majority of those products are just plastered with a fake label that embellishes green.

Businesses who resort to greenwashing are participating in unethical activities. Not only is it unethical in terms of pulling a hoax on consumers, it also promotes other businesses to engage in these unprincipled activities. Businesses who are struggling to add some eco-friendliness to their product may be influenced by these businesses who took the easy, but fictitious way of being green. As consumers, we have to be careful in choosing green products as only 4.4% of them are truly reliable.

Sources:
Sins of Greenwashing
Vancouver Metro: Dirty Business of “Greenwashing” (Wednesday, October 27, 2010)

McDonald’s has recently added a new item to their menu that claims to provide forever lasting love: a McWedding. As the name hints, it’s a wedding service. How this peculiar, yet innovative idea came about was that people have said that they’ve met at McDonalds, dated there, and now they want to get married there. Hence McDonald’s took advantage of this business opportunity and launched this service. The McWedding is, however, only available at three restaurants in Hong Kong. It will begin next year and reservations have already been accepted commencing last week.

McDonald’s proposal of a “McWedding” is clearly a strategy rather than a tactic. It holds an effective stance in expanding its current business by branching out to services. I believe McDonalds chose a strategic market to offer this service. For many young couples in Hong Kong, weddings are a financial burden to them as traditional Chinese weddings are very expensive. Thus, this provides a more affordable option for many couples. McDonald’s strategy is heading onto a bright expansion. Although the service begins next year, people have already begun making reservations. It is pretty clear that the McWedding may successfully go global in the long term.

Source:
The Vancouver Sun: McDonald’s to host “McWeddings” in Hong Kong

“Canadian” Target

VS.

“American” Target

If you thought this was the “American” Target department store expanding its chain in Canada, it’s actually not; rather it’s a “Canadian” Target that sells discounted apparel. Recently, a Target has established a store in Nanaimo, BC and is scheduled to open another store in Sudbury, Ontario and then in Surrey, BC. Apparently, Isaac Benitah, Toronto fashion merchant, has owned the rights to the name “Target” in Canada for almost 10 years. However, US Target has challenged Mr. Benitah with the law. After five years of defying and taking the case to the Federal Court of Appeal, the results were in Mr. Benitah’s favour. This summer, the determined US company has reasoned with a Canadian trademark office that Mr. Benitah hadn’t used the name for three years. Thus, it has the right to be dissolved under domestic trademark laws.

This relates to the concept of intangible asset. The only way to define the borders of who owns the rights is by taking it to the law. I believe the Mr. Benitah has its rights to the name Target because he has owned it for almost a decade. Although he hasn’t used the name for three years, it’s still his. If someone purchased a house 10 years ago, didn’t live in it for three years, and now decides to use it, it’s still theirs. But I also understand US Target’s standpoint because if the name “Target” already exists in Canada, it wouldn’t be able to expand its chain of stores to Canada which will hinder its growth and success. From the state of the current situation, US Target appears to be very firm and affluent as it’ll continue to challenge Mr. Benitah until things are in their favour. We’ll have to wait for the war to end to see whose intangible asset it really is.

Source:
The Globe and Mail: Target has a problem. Its name is Target

Numerous Japanese technologies rely on rare-earth elements and other minerals that are supplied by China, the global leader in rare earth mining. However, recent problems with China’s supply of rare earths have caused Japan to instigate a new allocation of resources. This new source of gold comes from used electronics like computers, cell phones, and TVs. These used electronics, however, merely account for an estimated 300,000 tons of rare earths. This amount is miniscule compared to the reserves in China. Hence resources are scarce and must be allocated wisely.

Japan’s new allocation of resources from used electronics is a great step towards sustainability. The feature is that used electronics can be turned into rare-earth elements and minerals and the benefit is that it increases sustainability and creates a greener environment. This additional discovery presents a virtuous example for industries and companies to try and be sustainable with resources. Although this resource is scarce, it is still a great, discovered opportunity. Less is more. With a limited supply of resources, manufacturers will actually produce better products. In contrast, if there was an abundant supply of resources available, numerous products would be manufactured without carefully considering quality, utility, use of resources, etc…

Source:
New York Times: Japan Recycles Minerals From Used Electronics

Back in grade six, a fellow classmate of mine asked me what my favourite dream car was. I spontaneously replied “BMW.” My classmate then chuckled because “BMW” isn’t a specific type of car; it’s merely a name of a brand. A more relevant response would be a convertible, van, sports car, or jeep. I still get teased occasionally for my silly answer, but perhaps this may explain why I’m in Sauder studying the reasoning behind this.

Positioning is an extremely powerful technique that inconspicuously alters our perception to a certain way. Once successful, it’s potent and we don’t realize its dominance. What’s your favourite drink? What kind of camera do you use? The answers would probably be akin to Coke and Sony. We don’t realize we’re replying with brand names unless we’re confronted about it; it’s very interesting. Going back to my example, I only knew “BMW” because it was a simple three letter brand for a twelve-year-old to remember and the car itself looked very luxurious and nice. BMW positioned and marketed itself well with its brand and features making it easy for consumers to identify. So back when I was twelve, BMW was my perceived notion of a dream car instead of a convertible.

Due to problems with the brakes, BMW is recalling approximately 350,000 cars worldwide. In North America, about 198,000 cars are recalled. Nonetheless, BMW explains that the vehicles are still safe even though there are complications with the brakes. Mechanical braking could be used to stop the cars if problems with the brakes arise.

BMW’s brake recall is very similar to the brake recall of Toyota’s. But I believe the resulting effects are different for the two companies. Toyota has experienced quite an impact on its reputation. Their reputation loss due to the recent recalls with brakes and positioning of carpets has most likely resulted with decreased sales. BMW, on the other hand, will probably experience a temporary, insignificant impact. Consumers will continue to purchase their cars because of the luxury and prestige that BMW holds. Toyota, on the other hand, can be seen as a “weaker” brand and isn’t as strongly established as BMW. BMW, as the world’s leading premium automobile manufacturer, has already positioned and established itself well. Hence a brake recall that most automobile manufacturers experience won’t easily affect their reputation and sales. As a few weeks go by, this issue will be brushed off consumer’s minds.

Source:
24 Hours Vancouver: BMW recalls 350,000 luxury cars

How To Build Your Brand on a Small Budget – Click here to see video clip
(Note: Video clip begins after brief ad)

In one of our classes, we discussed the importance of “Product vs. Brand.” Companies aim to have consumers refer to their product by the brand rather than the actual product itself. Kleenex is a successive example as we frequently use the term “Kleenex” instead of facial tissue. In this clip, Steve Abrams, Co-Founder of Mill Street Brewery, shares tips on how small businesses can build on their brand. Abrams suggests taking it slowly so consumers can familiarize themselves with the brand. A good start would be radio ads or trade shows. He advises not to start big with billboards and commercials. The key is legwork and this will be a continuous step throughout the brand building.

Abrams’s advice is very practical. People seem to postulate that if they plaster their brand all over the market, it would be widely known. Paradoxically, when this is done, it’s actually difficult for consumers to suddenly adjust to the new brand. Marketing slowly provides more time for consumers to be aware of the brand. Legwork is also definitely important. Research should be conducted continuously because market situations change habitually. It’s useful to recognize your competitors and the current needs and wants, so you can market accordingly.

Source:
The Globe and Mail: How to build your brand on a small budget
(Video)