Armin Rezaiean-Asel's Blog

There’s a new breed of business in town, and its name is social enterprise. Through market-based models and strategies, social enterprises tackle society’s most pressing needs with a business mindset.

The Globe and Mail’s article gives us a great example – Inner City Renovation. Its purpose is simple – employ people who face disadvantages finding employment such as people with criminal records, formerly in gangs, and facing addictions. In addition, the company’s goal is to revitalize Winnipeg’s inner city area. Double whammy, much?

Some would argue that there are pros and cons regarding social enterprises, which leads me to wonder what exactly motivates a company to run a business with a social mindset? Why not run a purely profit-based company and then a charity? Like with Inner City Renovation, it’s becoming more clear how the two are connected and how rather than having a separate charity, it’s possible to connect a social purpose with business tools to create a highly successful company that focuses on more than just profit. There’s also automatically positive effects on the public image of the company, which is an added plus.

The company Groupon Inc was launched in November of 2008 and essentially offers daily deals in 45 different companies across the world. Consumers can take advantage of “groupons” (groupon coupon deals) and earn discounts off tourism, dining, or even shopping prices around the world. Video on how Groupon works.

In terms of entrepreneurship, Groupon is a prime example of a huge success. Launched only a few years ago, it’s already worth over $1B. It innovated and provided a new product as well as a completely new market – online daily deals/coupons. Since its inception, the Groupon model has been replicated by many others such as Living Social.

Another point supporting my point is this: Groupon became the fastest growing company in web history, under the leadership of the young CEO Andrew Mason. It grew to the billions in a record amount of time, while innovating the coupon industry by computerizing everyday deals and making them available to people around the world.

In a nut shell, this company showcases experience in creating a new product, new markets, and new forms of organization through the international, online nature of Groupon. Furthermore, the amount of wealth generated, and the speed at which it was done, is remarkably under 5 years. Very typical of a successful entrepreneurial venture.

Groupon has got to be the quickest way anyone has ever become a billionaire… wow, definitely a great example of entrepreneurship at its best.

In a recent blog post on the Wall Street Journal, it was shown that manufacturing slowed down in the past month. The Institute for Supply Management, founded in 1915, is the first supply management institute in world. It’s a not-for-profit educational association that strives to provide supply management information in more than 80 countries. The ISM’s measure of factory activity dropped from 51.6 to 50.8 in September.

After watching Mahesh present Supply Chain Operations in class, reading about a drop in factory activity means a lot more to me than it would have beforehand. I attribute this to a lower inventory turnover rate than there should be for the product. Consequently, products are staying on shelves for a longer amount of time, which ultimately means consumers are demanding a lower quantity of these products. This, in turn, could be a result of less marketing or even a lack of market research.

It’s incredible to see the change in my overall perception of how different aspects of the business world intertwine. Two months ago, a drop in factory activity would mean nothing more to me than there being less products produced. Now, I see the connections between this supply chain issue and other aspects of a business.

It’s interesting to see how different concepts are coming together.

In a recent blog post by Cole Routtenberg, from the Section 103 class, he discussed the results of July’s HST referendum and an in-depth explanation on its causes and effects.

His post focused on the fact that of those who participated in the referendum, 50% believed eliminating the HST would help their financial situation, but only 28% believed it would help the overall economy. What does this show us? Well, as Routtenberg put it, the voters put their own interests first and essentially voted to weaken an already fragile economy in order to strengthen their personal financial status.

Some anti-HST politicians would say that the outcome of this referendum, despite the strong support for keeping the HST, is a demonstration of our restored democracy. I would argue that it merely shows how citizens voted. We didn’t think economically; we focused on our own self-interest, which ironically enough, is a driving factor in the everyday economy.

While it may be unfortunate for BC’s economy now that the HST is being transitioned back into the PST/GST system, are we really surprised this happened? People go for benefits over features. The HST may have had some cool features in the form of being a more visible tax, having higher annual payments to low income families, as well as others; however, the immediate benefits of the GST/PST system outweighed them in the eyes of most BC folk.

This morning, I happened to click my way to an interesting article on www.marketwatch.com discussing somewhat of a breakthrough into the customer insight sector. The USA’s largest privately held company, Merkle, announced an interesting new piece of technology involving customer insight and market research – the merkle monitor.

Essentially, this monitor provides insight into consumer behaviour and is an interesting solution to primary market research. Using a survey format, it acquires information pertaining to consumer perception, consideration, as well as buying behaviours regarding insurance & wealth management services.

It’s very interesting that something like this is considered to enable “actionable marketing strategies.” While it’s great to gather a general overview of how customers perceive Merkle’s services, the monitor is overlooking many important market research aspects affecting consumer behaviour such as cultural, social, and personal factors. Merely basing strategies on what some survey questions provide you with seems like questionable action on Merkle’s part.

I see the Merkle Monitor as an amazing tool, aiding the advancement of consumer behaviour understanding in its respective field; however, it’s findings should not suffice when planning out marketing strategies. More in-depth research covering many other aspects other than general consumer perception should be taken into account!

After recently reading Claudia Lau’s blog post, The Silent Salesman, I’ve definitely gotten a new perspective on marketing as a whole.

In a nut shell, she talks about how Patagonia, an eco-conscious outdoor clothing company, is utilizing a twisted marketing campaign – the promotion of buying less!

Discussed in the Time Moneyland, the company is essentially asking customers to only buy what they need, and when doing so, to buy what will last. They also mention repairing and recycling older garments.

It’s very interesting to see that their points of parity include high quality products (normal), while their point of difference is a marketing campaign discouraging excessive consumer purchases (not as normal).

Many other clothing companies focus on being socially conscious and include that in their value propositions, but twisting it to the point where you’re telling consumers to stop excessive purchasing is innovative marketing-wise.

The Lamborghini commercial we saw in class was later mentioned to be a means (in one respect) of making people want what they evidently couldn’t have. Patagonia is doing something along those lines; they’re controlling consumer behaviour by telling buyers it isn’t good to buy too much, only to make them want more of said product.

Kudos to them!

There’s no doubt Apple Inc. is a large controller of technological apps. Nevertheless, according to business week, The Financial Times has launched its own web-based reading app (currently available for subscribers), without collaborating with iTunes.

As Andrew mentioned in class yesterday, MIS and BTM can sometimes work alongside fads. I’m definitely seeing some of that being applied in this particular case since the market for smartphone/tablet apps is getting larger. Also, it seems as if the FT is trying to do a couple of different things:

1) They’re capitalizing on the fact that technology is huge right now. They’re definitely doing exactly what Andrew mentioned – revolutionizing innovation by sharing what they have in a new, more fad-worthy way.

2) FT seems to be attempting this – without working with iTunes – as a power-move. Since Apple is worth billions more than them and their publisher, I see creating an app independent of iTunes and the App Store as a smart decision because it helps them remain in somewhat of a controlling position. By also attempting to get readers to jump ship from the IOS version to the HTML5 (the new, FT app format), I can definitely see some power-moves coming into play.

Regardless, technology is evidently an important factor in today’s world both as a means of communication and gaining power in a given industry.

I’ve embedded a video link with more information on the FT app.

Creating a successful brand is a task that can take months, years, or even decades to accomplish. Written about in The Globe and Mail, Axle Davids has supposedly developed a new, innovative system through his company, Distility Branding, which allows clients to “define their brands in one day.”

Essentially, clients go through a series of branding exercises and receive a one-page brand summary at the end of the day.

The thought of a successful, effective one-day branding process is intriguing to say the least. Determining points of difference and parity for already established companies is challenging enough, but creating a whole new set in the span of one day – along with a value proposition – is remarkable.

As was shown in this video, created by MSc Brand Leadership students at Norwich Business School (University of East Anglia), branding is an extremely powerful tool, and even considering that the process of creating something that controlling in society can be done in the span of one day is, from my point of view, a momentous feat.

At the end of the day, brand positioning and creation – in certain cases – has and will continue to cause world-changing effects. Thinking of jumpstarting this in a day is Axle Davids’ entrepreneurial contribution to the world of marketing.

Netflix has definitely messed up. Splitting services, charging more, and making the experience less enjoyable for customers is never a good thing.

This past summer, Netflix announced that it was going to increase its prices for US subscribers. Instead of paying $9.99 (US) a month for both streaming and rentals, the price is now $7.99 (US) individually for streaming and rentals.

What doesn’t make sense to me is why Netflix

would do something like this. What sorts of decisions contribute to a company making a decision as big as this one, especially when the repercussions can be so grand? As of September 16th, the share price is down to $169.25, and Netflix has actually had to drop their subscriber forecast by a whole million.

Aside from the economical aspects of this decision, I can’t help but recall what was mentioned in class – benefits vs. features. Features are cool and all, but benefits are where it’s at! The benefit of paying a lower fee for both services, not having to worry about price increases, and getting a great deal on streaming & rentals was great! But, once price was increased for additional features and to offer more to customers and shareholders, people didn’t see the benefit and jumped ship.

Oh, Netflix…

In many parts of Africa, children are  being exploited for the benefit of the Tobacco industry, as was illustrated in The Guardian.

In Malawi alone, approximately 80,000 children pick tobacco leaves in deathly conditions everyday and with little compensation. We may sometimes say we hate our jobs, but in retrospect, are they really that bad compared to what these kids go through?

Organizations such as UNICEF and ILO as well as ECLT are attempting to combat issues of child labour around the globe, but what about companies and consumers? Universal Corporation and Alliance One International are responsible for purchasing over 90% of Malawi’s leaves. If consumers stopped supporting cigarette manufacturers that are involved with these unethical business practices, it could contribute immensely to combatting the issue. As a socially conscience consumer, a product’s features could be great, but if its making didn’t remotely benefit the workers, it won’t benefit how I feel about the purchase. Therefore, no purchase. We should all try to be more conscious of how our purchases affect the ethical balance found in businesses around the world.