Bing Jie (Alice) Zong Blog

Source: http://www.first-tel.com/Specials/Free-Coffee

There is a saying that people do not know what they have until they lose it. In the workplace, coffee and free food definitely fit into that category. Last week, the company Sprint decided to boost its bottom line and cut back on costs by abolishing free coffee and food for its employees. This will save them $600, 000 annually, but the costs that come with this manoeuver may be less tangible yet make a bigger impact on the overall performance of the company.

Snacks and other small gestures are symbolic and exist to boost “employee engagement” that can begin to create that connection between employees and the job. In The Good Jobs Strategy, MIT professor Zeynep Ton draws on more than a decade of research to show how operational excellence can make it possible to provide customers with the lowest price and create a welcoming and motivating environment for employees at the same time. As we move into the new generation where switching between jobs is very common, it can be difficult to attract and retain leaders, especially young ones of Generation Y, who are going to be dominating the workplace in the future. In my opinion, while cost cutting is important and inevitable in some cases, it is not worth it to reduce costs for the short-run when it can impact the company negatively in the long run.

Source: http://www.vancitybuzz.com/2015/10/vancouver-friendship-socks-gifting/

Socks and friendship- when were these two words ever used in the same sentence? Perhaps rarely in the past, but that may change with the growth of a Vancouver-based Friendship Socks Company that strives to connect friends in a different way.

Friendship Socks operates on a one-to-one concept: when you purchase a pair of socks, you can also send a pair to a friend on Facebook, surprising them with a gift to brighten up their day. The hope is for the friend to remember you every time they open their sock drawer and strengthen connections between friends who may be living far apart.

However, it costs $30 for 2 pairs of socks, which is very high compared to socks sold in most retail stores. This company is clearly operating using the differentiation strategy instead of the cost leadership strategy. Like Jensen Tung mentioned in his blog, producing an entirely unique and innovative product may be nearly impossible, especially in an environment where low cost seems to be the driving source of success for most companies. However, I think there is still a chance for this company to thrive, from looking at past examples of companies with similar goals, for example, Toms. Furthermore, this gifting service will be able to solve the frustrating process of deciding and shipping presents to friends on their birthdays or during Christmas. In today’s fast-revolving world where texting and emailing are the primary forms of maintaining connections between friends, a physical item may just be what is needed to strengthen those friendships.

Receiving is a one-time thing, while learning to create is a long-lasting change. When you receive something, you take it and feel grateful, but when you learn to create and recreate, the feeling of hope and empowerment do not diminish when the shoe, or the glasses, or whatever else you got for free does.

I am against the “one for one” business model because I think it is unsustainable and one-sided. Unsustainable because it is impossible for a business to give free things to others forever, and one-sided because it is created from only one perspective- the business’s. Of course, there are probably many more arguments to support this point of view that can all be found with an easy Google search. However, the primary reason why I am against it is because I have seen better models to solve the same problem. In the video Social Entrepreneurs: Pioneering Social Change, Dorothy Stoneman from YouthBuild USA implemented a creative plan where youth with no jobs to do were brought together to build houses for homeless people. In class, we also explored several businesses that have adopted this method. I believe this method is more effective than the one for one model because it utilizes what is not being utilized to fill in the gaps for a specific need. Instead of giving, or in this case, building the houses for them, they direct others to do so, and in the process, were able to leave those youth feeling empowered to make more change in the future. This, in the long run, is more sustainable and allows the other side to actively participate instead of passively receiving what is given to them.

After a long, grueling battle, Target is inching back into Canada in the form of an online store. On Target’s international website, there is now an option for Canadians to purchase their goods and have it shipped to Canada- except at an absurdly high price.

Even though Target is boasting online about its goods priced in Canadian dollars and “low international shipping rates”, upon closer inspection it is noted that prices were often much higher than the U.S. prices and sometimes the shipping fees cost more than the actual item! Below is an example of the breakdown of fees for an item from Target shipped to Canada:

Source: https://ca.finance.yahoo.com/blogs/insight/target-inching-tentatively-back-into-canada-with-cross-border-online-shopping-%E2%80%94-at-a-price-194707264.html

I personally feel that Target’s lack of market research is the primary reason they are failing once again. It is essential that they understand the prices Canadians are willing to pay their goods, and not exceed those limits, especially since Target is primarily a U.S. based company and the competition they face in Canada, such as Walmart, is fierce. After Target’s attempt to expand into Canada and then exiting Canada, their brand reputation is no longer what it was, nor can it be the same as it is in the U.S. I think Target should just stick to serving its U.S. customer base, because as it has been proven twice, expanding into Canada is just a waste of time and money.

Source: http://www.cbc.ca/news/business/target-canada-online-sales-1.3282848

Source: http://www4.columbian.com/news/2014/feb/05/nordstrom-close-vancouver-mall-lloyd-center/

A couple days ago, the professors assigned a pre-reading about the Nordstrom expansion, and soon after, we had a debate in class over whether Nordstrom should expand into Canada. Throughout the debate, I heard many interesting insights for both the pros and cons of this expansion, but after doing a little more research myself, my opinion is that Nordstrom should not expand into Canada.

First off, Nordstrom already has a strong brand image in the United States, and their brand reputation, along with the loyalty of their strong customer base are some of the main driving points for revenue. That may not be the case in Canada. In Canada, Nordstrom will face competition from companies such as Holt Renfrew, which sells products in the same category and is already established as the go-to place for luxury shopping.

Second, operations and supply chain management will become much more difficult in Canada than in the U.S. The company already has to overstock their shelves just to accommodate for the time it will take for more products to arrive. This is a gamble that if sales do not go through, can result in excess inventory.

Lastly, as I mentioned in my last blog post about luxury department stores closing down in Hong Kong, and among other places, what customers seek nowadays is variety, not luxury. If a successful brand like Coach had to close down in Hong Kong, one of the busiest shopping cities in the world, then what are the chances that Nordstrom will last long in Canada? As an extension of this point, I definitely agree with Professor Paul Cubbon’s prediction that these large department stores will eventually all close, or change into something else. Therefore for the time being, I believe Nordstrom should stick with where they already have the reputation and customers, and avoid venturing into an unknown and unpredictable competitive market.

Source: http://www.bloomberg.com/news/articles/2015-10-27/hello-kitty-farewell-rolex-as-hong-kong-shoppers-go-downmarket

“In the past, four out of five shops were selling Rolexes,” she [Helen Mak] said. “In the future, a tourist will expect to see more varieties of retail shops in Hong Kong.”

Many luxury brands are abandoning their street-front locations as sales begin to decrease. Just this August, U.S. luxury handbag maker Coach Inc. terminated its store in Hong Kong central- with Adidas moving in after them. This has been the case with many luxury brands. As their stores close, mid-tier retailers are filling in the gaps.

A possible reason for the decrease in earnings for luxury retailers is the decline in Chinese mainland tourists to Hong Kong. After the anti-China protests last year, the number of Chinese tourists has decreased significantly, and in response, so has the sales of luxury goods, which the Chinese previously often splurged on. This decrease is shown in the graph below:

Source: http://www.bloomberg.com/news/articles/2015-10-27/hello-kitty-farewell-rolex-as-hong-kong-shoppers-go-downmarket

However, at the same time, this provides an opportunity for mid-tier, or discount retailers to break their way into these coveted retail locations. This is an example of disruptive innovation, where discount retailers are disrupting the shopping, and invariably, life styles of the people living in these areas. It will be extremely difficult for retailers to completely replace the luxury brands people used to buy, but perhaps this change reflects that what buyers want nowadays is not only brand reputation, but variety, and this information will be crucial for companies hoping to gain an edge in the competitive market.

Source: http://www.bloomberg.com/news/articles/2015-10-27/hello-kitty-farewell-rolex-as-hong-kong-shoppers-go-downmarket

Source: http://mix96buffalo.com/are-mcdonalds-self-serve-kiosks-a-sacrifice-to-customer-service/

McDonald’s is upscaling its products and customer service by introducing self-ordering kiosks and table service in 20 to 30 restaurants a year, according to Avi Goldfarb, a marketing professor at the Rotman School of Business. The digital kiosks will provide choices of premium hamburgers from over 30 options, including 5 types of customizable cheese and many more different options. This revamp of the giant food chain will create another 15,000 jobs by the end of 2017 as they follow through with their meal and service expansions.

Having worked as a cashier in McDonald’s before, I definitely agree that this is a big step away from the negative image McDonald’s has received in terms of their unhealthy food and unsatisfactory customer service. Self-serving kiosks will allow customers to order exactly what they want, and decrease the chances of them coming back to complain about wrong orders later. At the digital machines, customers will feel less rushed, which can lead them to order more, according to Mr. Betts, CEO of McDonald’s Canada.

Overall, I think this is a fitting example of Rita McGrath’s theory of the transient advantage, which states that achieving a sustainable competitive edge is nearly impossible in the fast-changing business environment. McDonald’s has demonstrated this by changing its operational strategy to create faster service and increased human interactions in order to stay competitive in today’s environment.

Sources:

http://www.thestar.com/business/2015/09/30/mcdonalds-canada-introduces-self-serve-ordering.html

http://www.bnn.ca/News/2015/10/1/McDonalds-rolls-out-upscale-options.aspx

http://web.b.ebscohost.com.ezproxy.library.ubc.ca/ehost/pdfviewer/pdfviewer?sid=f6c1d9ce-c2d5-40ff-8661-0134022e3a51%40sessionmgr198&vid=2&hid=101

Source: http://www.imore.com/starbucks-iphone-now-supports-iphone-5

Craving that hot, steaming Pumpkin Spice Latte but dreading the arduous line at Starbucks? Their new mobile app can solve that. Starbucks Coffee Company has just announced last Tuesday that beginning in October, select company-owned stores in the UK and Canada will allow customers to order and pay ahead of time. Customers just have to choose their drink, pay on their phone, and the app will tell them how long it will take to make their drink, and they can go pick it up when it’s ready. Minus the delivery part, it is rather like online shopping, which is where the problem kicks in.

Rebecca Vipond Brinck brought up in The Frisky that what used to be an indulgence may just become a subconscious purchase with the new app. In fact, most people can save up to $853 if they choose to brew their own coffee. This will definitely mean more profit for Starbucks, but it can also make customers feel like they are in a fast food chain. Since coffee has always been considered a luxury, it is the everyday interaction, the simple conversation exchange between baristas and customers that make the coffee extra special, and now Starbucks is choosing to eliminate that. In an ever fast-moving world where the pace just seems to be picking up, some time to slow down and catch up with someone on your day may soon be lost in exchange for convenience, speed, and profit.