Ashley Mui's Blog

It does not come as a surprise that we consume more calories than we think when we eat so-called “healthier” options. In particular, Subway markets themselves as a healthier option of fast-food by offering different types of bread and low-calorie sandwiches. However, the biggest underestimates of calories are also at Subway with a  20-25% discrepancy, and for teens, an underestimation averaging 500 calories. This proves that Subway’s marketing of healthy sandwiches is working, even though a study shows that the calorie difference between McDonald’s and Subway is quite small. Subway has positioned themselves in consumer minds as a way to eat healthier but still be satisfied, so consumers unknowingly order many toppings or larger amounts that add calories. In that case, there is a possibility of consuming more calories at Subway than McDonald’s, depending on what you order.

What works to Subway’s advantage is that consumers hardly change their behaviours even after seeing the calories on nutrition labels on menus. Instead, using pictures or other marketing tactics to let consumers know which options have fewer calories than the rest works better. Can it be considered unethical? I would say that it is the responsibility of consumers to pay attention to their health and deceptive marketing, though most (like me) probably prefer stimulating their taste buds.

E-commerce is becoming quite the trend these days; another competitor has entered the Canadian market recently: ShoeMe. ShoeMe is a online retailer of shoes in partnership with ClearlyContacts to deliver convenience and fashion, similar to Zappos in the United States. It actually started due to Zappos shutting down shipping to the Canadian market due to difficulties of keeping its standards for fast and free return shipping, one of its major differentiating factors. ShoeMe’s founder, Sean Clark, questioned why there was no online shoe player in Canada, an entrepreneurial idea, which led Clark to utilize his networks and enter the relatively empty online shoe retail market.

Compared to Zappos, they do not have a unique corporate culture, perhaps due to it being new and the owner is not as wealthy as Tony Hsieh, CEO of Zappos. However, they do follow a 100-day free return policy, which is not as competitive as Zappo’s 365-day free return policy, but is enough to draw in domestic customers. As the first solely online shoe retailer in the less competitive domestic market, where “Canadians ordered $18.9-billion worth of goods and services online” in 2012, there is a bright future ahead of them.

More about Zappos’ interesting corporate culture: http://www.newyorker.com/reporting/2009/09/14/090914fa_fact_jacobs

I came across this article when I was researching on Facebook’s value proposition for my previous post, and it showed me an interesting perspective of why Facebook’s revenue growth is declining. In the article, Scott Karp compares and contrasts Google’s and Facebook’s value propositions, and shows the reason Google succeeds in generating revenue: their value to users matches the value to advertisers. Advertisers may have difficulty finding value in advertising over Facebook when it depends on forcing their way into user feeds, while Google advertisements are catered to what users are searching for. It seems less like an advertisement, so users are more inclined to click them and not feel annoyed.

It seems that Facebook will need to develop its value proposition further in regards to attracting advertisers, one of their main customer segments, without losing their other customer segment, its users. Facebook is finding that they are losing their teen users, and it is a difficult problem but is necessary to tackle as Facebook’s revenue growth is declining even as they push their mobile platform and try to acquire popular apps to reach teens.

The hot news of Snapchat declining Facebook’s acquisition offer of $3 billion has been circulating. Was it a smart or foolish decision? It reminds many of Facebook’s buy out of Instagram last year. Many say that it was a poor decision made by Instagram’s founders since the app is probably worth around $5 billion today and still has room to grow.

Similarly, Snapchat is one of the most popular apps today and although Yan Rong’s blog notes that people believe Facebook is losing customers to Snapchat, I do not believe that they are parallel. Snapchat is completely mobile, based on sharing short, moments with friends that cannot be saved or revisited. Facebook offers more; you can share different sides of yourself, message people you may be too shy to talk in person with, and catch up with friends. It offers a different value to customers, so contrary to Yan Rong’s comment, it cannot be considered a reason for Facebook’s decreasing shares.

Therefore, while Facebook may be reaching out to popular apps to expand its revenue stream, it is not necessarily an act of desperation, and Snapchat may not be foolish, as the acquisition of Instagram proves.

Technology’s influence is huge in our daily lives, to the point where we depend on it. As Erik Brynjolfsson says in the TED Talk video “The key to growth? Race with the machines”, the future is working together with technology, not racing against it. In Daniel Duncombe’s post Amazon is an example of that concept; they are entering a different market with the help of technology.

I agree with his point that online shopping is growing rapidly and businesses must react to this change in order to keep operating. However, it may be that the e-commerce market is less saturated than physical retail stores, but the online network is so full of different information and services that it is difficult to expand in that market, including tough competition against companies such as Dell and many large clothing stores. Therefore, it is easier said than done and will require careful management of marketing and operations to enter this market. However, it does not mean to ignore this appealing opportunity either, as businesses can still work with technology to innovate and create new products and services more efficiently, and to share insight with customers to build better consumer relationships.

Starbucks is an ever-changing business. They are careful with where they open stores, including their entry into Colombia, the fourth-biggest producer of coffee beans, and also a big source of Starbucks’ coffee beans. Interestingly, Colombians are not a big fan of coffee there. However, a local coffee chain, Juan Valdez, has opened up the market and Starbucks has announced their entry into Colombia, planning to open 50 stores in the next five years. They will create shared value by using locally grown beans which benefits the domestic farmers, but coffee is not a need or high in demand in Colombia. It is a difficult obstacle that Starbucks will have to overcome in order to make profits, but will help the situation in Colombia greatly if they succeed.

At the same time, Starbucks is targeting a new market: tea. They bought Teavana for $620 million last year and just opened their first tea house in New York. Tea is the second-most popular drink in the world, and Starbucks aims to meet changing tastes by using the multi-brand strategy like with their Tazo teas, and expanding their profits across different markets.

Starbucks’ strategy shows their continuous adaptation and changing tactics to create more profit.

As a user of Instagram, I was annoyed to see that Instagram will begin to advertise on users’ news feeds. Although it is not surprising that they are trying to increase their revenue through advertising, as Facebook has already implemented that on its website, it made me question its probability of success.

Advertising is a common issue consumers deal with on a daily basis, and it is the main way certain websites such as Facebook brings in its revenue.

However, how many users actually click on those advertisements? Most people are not using Facebook to purchase products; they are simply there to socialize. That brings up a question about online services’ business models: how reliable are they?

Although the results of having advertisement on Facebook’s website clearly prove that the strategy is working, it is not a reliable long-term method of generating revenue. It highly depends on its users. For websites like Youtube, apps such as Adblock can block out advertisements completely even when services intended on playing it before a video begins. We will likely see them implement other methods such as furthering game or mobile phone app development in order to maintain their high profits in the future.

Telenor “believes that mobile financial services will become the new normal”. They target poor countries where banking is not commonly accessible, such as Pakistan and Bangladesh. Indeed, mobile banking will allow more of the population that uses mobile phones but not banking services, to be able to use bank services conveniently.

However, their business model needs to look carefully at whether the country has a good mobile phone infrastructure and coverage, government regulations that will provide a safe banking experience and whether the government will open up such a market. As Telenor aims to “fix” Myanmar’s banking system, they also face competition from Qatar’s Ooredoo, which will affect their input costs in particular regards to marketing of their SIM cards and use of their services.

Mobile banking is not a new idea, but Telenor is one of the few companies where their value proposition targets the number of “unbanked” in poor countries by allowing more convenient and safe use of banking services. It will be interesting to follow their steps of expansion in the rural world and see how mobile banking will affect the future of all of us.

This blog post references to relevant information in Anthea Low’s blog post which can be found here: https://blogs.ubc.ca/anthealow/2013/09/30/dells-equivalent-prospects-of-the-telecommunication-industry/

Many small companies sprout every day and try to push their ways into the market. One of those companies is Xiaomi, a privately-owned Chinese technology company. Their smartphone is compared to the Apple iPhone in terms of appearance and functionality, and compared to Dell for their business model. As companies such as Apple are working on the expansion into the Chinese market, Xiaomi is inching their way into the global market. They even hired Hugo Barra, a Google executive in charge of product development for Android to help in this process.

Although Xiaomi is adapting the direct business model, how successful will it be against a giant such as Apple? Apple has a strong hold on the international market, and has a strong brand. They are never idle, as upgraded iPhones continue to be released every year. Their business model clearly seems to be working as they change their products constantly to adapt to consumer’s changing demands, and leads in its inventory turnover period of 5 days in 2012.

Xiaomi may be a new and growing competitor, but as of now and probably for the next few years, Samsung, Nokia, and Apple will reign as the fairest of them all.

Related references:

• Apple beats out Coca-Cola as the most valuable brand.
• Apple is third behind Samsung and Nokia.