Ben Gardiner's Comm 101 Blog

After browsing through an article featured on the Canada Business Network Blog, I was immediately taken back to a reading we completed as a class regarding Zappos, an online shoe shopping company, and how their excellent customer care has helped lead them to become a major player in the industry.

The article, entitled “Turn customer dissatisfaction into customer retention,” explains how business success can be broken down into 4 key goals:

1.  Customer Satisfaction;

2.  Customer Loyalty;

3.  Customer Retention;

4.  Business Success.

What is most interesting to me is how the blog identifies that customer satisfaction doesn’t necessarily lead to customer loyalty. While your customer may be satisfied about a product or service you offer, they may still find something better in another business. A key element to this satisfaction is empowering employees to solve customer issues on the front line, something which many companies lack focus on.

Zappos is an excellent example of how, within a few years, they have made any lifetime customers by simply having exceptional customer service – not necessarily a superior product. While many of the shoes Zappos offers can be purchased at other locations, Zappos ensures the highest level of customer service to all its customers. It is this aspect of their corporate values which has led Zappos to become one of the most profitable online shoe companies.

Read more on Zappos’ customer service values: Business Insider

I received a fresh perspective after hearing a lecture about the need for companies to become more environmentally sustainable – not just to have strong public relations – but to improve the competitiveness of the company in its production techniques. While there was a time that companies put on a façade of being “green”, there is an increasingly bona fide need for companies to embrace environmental production techniques if they wish grow profits.

This is seen quite plainly in the UK where business leaders recently met to pressure the Government to set binding emissions targets with the appeal that a failure to do will damage the UK economy. Shouldn’t it be the other way around? Shouldn’t governments be the ones to lobby for environmentally-friendly business targets?

The answer is no. Business themselves are realizing the need to have sustainable practices which will lead away from a path of resource depletion and instead focus on increasingly  energy-efficient business models. Climate change increase risk to all sizes of business while businesses supplying low-carbon products will satisfy a growing global demand for sustainable goods.

I never previously thought that businesses would be pressuring government to support environmentally sustainable practices; however, the free market is clearly working because sustainable business models are the only way forward as our world faces an ever-increasing need to think about more than just profits.

Canada is currently the largest oil supplier to the United States and has the third largest oil reserves in the world. A Deloitte partner from Toronto stated that oil sands represent the “economic engine for the country for the foreseeable future” while the Canadian Energy Research Institute estimates a $2.1 trillion benefit to Canada’s economy over the next 25 years.

Despite these optimistic forecasts, Canadian companies have their work cut out for them; uncertainty regarding President Obama’s plan for the construction of the Keystone XL pipeline, environmental concerns, and America’s plan to be energy independent by 2035 leave many challenges for Canada’s heavy oil producers.

The thoughts from my comm 101 sustainability lecture suggest that the free market will act in the best interest of consumers and society, regardless of government regulation. I believe that oil sands producers must make the effort to develop new production techniques which are environmentally conscious and aim to develop cleaner and more sustainable methods of production; interest groups and even local Albertans will simply not let these billion-dollar companies extract petroleum irresponsibly.

As for America’s oil strategy, it is clear to me that President Obama will approve the Keystone pipeline; America’s plan for energy independence is not nearly developed enough to block a flow of heavy oil from Canada; when America finally does become energy independent, Canada will become rich by supplying to the next great oil consumer: China.

Headquarters in Calgary, Alberta for Cenovus Energy, one of Canada’s largest oil sands producers – photo used with permission, S. Gardiner

Read more on the benefits of Alberta’s oil sands: Oilsands investment benefits flow beyond Alberta

After listening to a presentation by director Wade Larson about a developing company UrtheCast (pronounced “earthcast”), I became intrigued with the limitless possibilities of having a live high-definition, highly detailed images of world events available to anyone over the Internet. I believe Urthecast has positioned itself very well in the advertising business because they plan to combine real-time images with social media focusing on current events, something which no company currently offers; the possibilities for marketing on this platform are truly endless.

However, despite these promising propositions, I began to realize that Urthecast faces as many challenges as it does opportunities. Rachel Warner’s blog post entitled “Suffocating by Tweets,” explores the potential challenges the company faces, many of which could prove to be overwhelming. The most critical challenge that Rachel points out is the need to filter out useful user posts from those that are uninteresting, irrelevant to current events or inappropriate.

It will be interesting to see, in the future, how Urthecast handles these issues and if they take a similar approach to other online search giants like Google who are increasingly filtering search results and catering results to a specific user’s interests. Urthecast may do very well to use aspects of well-refined online advertising services like Google AdWords which displays advertising catered specifically to a user’s search interests. A similar advertising service could be implemented on the Urthecast server which follows users’ locations and social media activity to direct certain advertising toward them. This company has an exciting future with many critical decisions yet to be made.

Nearly 20 years after a lawsuit was filed against Texaco for vast environmental damage and health issues caused by oil drilling in the Amazing Basin, their parent company Chevron is facing a resurgence of legal problems which aim to reciprocate the local Ecuadoreans. The latest news features an attempt by the plaintiffs to seize assets of Chevron Canada, claiming that a “subsidiary [company]’s assets can be seized to satisfy the [legal] judgment.”

Chevron denies responsibility for the environmental disaster stating that “Texaco’s practices were substandard, they were accepted and legal in the country at the time. If there is a mess yet to be cleaned up, it is the fault of the Ecuadorean government.”

While a bona fide case can be made against the parent company Chevron USA, I believe a claim to seize assets of Chevron Canada is a last-ditch effort by the plaintiff to make legal gains from a previous disaster. However, Chevron should still find itself in a tough moral position: do they attempt to repair (or, at least, reciprocate for) the health and environmental issues that Texaco created so many years ago or does this oppose a profitable model for oil businesses? Although I believe oil companies have a moral responsible to the free market to be accountable for social and environmental problems they create, I worry that corporate lobbying and pandering to government may unfairly influence legal decisions in favour of large corporations, overruling moral decision-making.

Read more on Texaco: The Texas Company

Read more on Chevron: Human Energy

United Staes President Barack Obama’s re-election puts him in one of the greatest economic turning points in American history. As the country faces a 13-figure federal budget deficit and an unclear energy future, the economic fate of the American Dream rests largely in the fiscal decisions of the Obama administration over the next 4 years.

After reading Frederick Wong’s blog post, I became very interested in this idea of what the media is calling a “fiscal cliff” representing “a combination of expiring Bush-era tax cuts [leading to tax increases], and [a] decrease in social services,” which would be implemented in an attempt to reduce the growing federal budget deficit. This impending crisis has caused anxiety for investors on Wall Street due to concerns regarding U.S. economic growth.

It seems to me that there is a growing disparity between what needs to be done and what the Democratic Party establishment would like to see implemented in government fiscal policy over the next 4 years. For example, President Obama’s proposed plan to strengthen public schools and create affordable Medicare for Americans is starkly contrasted with the pervasive need to reduce the federal budget deficit, especially if further increases on the federal debt ceiling are to be avoided.

I worry that many American businesses, especially small business, will be forced to shut down if this “fiscal cliff” theory proves true. Necessary tax increases and cuts to social services may lessen the federal budget deficit at the cost of preventing incentives for businesses to grow and invest; this will put America (and the rest of the world, for that matter) into a further economic recession, one which we may not be able to recover from.

I was intrigued to read Adrianne Erdman’s blog post and how her perspective about an Indian entrepreneur evolved to include ideas about social entrepreneurship. Before attending the Comm 101 class on social entrepreneurship, I would have thought that Mr. Muruganantham’s approach to business is a bit unusual and inefficient. However, I think it is important to appreciate that many people in the business world have motivations other than profit alone. Successful small businesses are finding ways to grow revenues while also promoting their values or taking action on important social problems.

Adrianne mentions Mr. Muruganantham’s Indian social enterprise which seeks to provide low-cost feminine hygiene products for women in developing countries. At the expense of maximizing profits, this business has not only provided inexpensive hygiene pads for women but is currently providing resources for girls to manufacture the pads themselves in schools across India.

This business is, by no means, a charity; the business is constantly seeking local raw materials and more efficient means of production. Mr. Muruganantham’s fabric-shredding machinery has allowed women across India and other developing countries to embrace a sustainable business model while introducing the concept of a practical and sustainable sanitary practice to women. I believe this is a model social enterprise which displays how sustainable business can contribute to social advancement in addition to making profit.

Fierce debate on both a national and local level regarding the pros and cons of building the Northern Gateway pipeline continue.

The debate regarding the controversial Northern Gateway pipeline project proposed by Calgary-based Canadian company Enbridge is soon to reach a critical breaking point. The pipeline would carry over half a million barrels of bitumen per day from northern Alberta to the B.C. coast, mainly for export to Asia where there is an enormous market demand.

Benefits include a predicted BC tax revenue of 1.2 billion dollars over 30 years and over 3000 jobs for the construction of the pipeline. For Alberta oil companies, the most obvious benefit is an increased strategic advantage for Albertan oil in world markets. Asian purchasers would increase demand for Alberta oil allowing corporations to greatly expand profit margins.

The controversy lies in the fact that politicians and locals are concerned about environmental issues (tanker spills) and impact on aboriginal groups, among other problems. Some, like Justin Trudeau, the Liberal Party leadership hopeful, have expressed deep concern for the ecosystems in the west coastal region. B.C. premier Christy Clark has clearly stated that her government is more interested in developing natural gas pipelines estimated to produce around a trillion dollars in econmomic benfit for B.C. She has no motivation to support the pipeline which may benefit Albertans more than anyone.

Although I have a strong bias as a born-and-raised Albertan, I feel that all Canadian businesses should have equal access to export their product via the west coast of British Columbia. I don’t believe this should be a battle between the B.C. and Alberta governments but rather a negotiation between Enbridge and local groups affected by the pipeline.

According to Canadian Business magazine, Target won’t kill Canadian retail – it will save it. American retailer Target plans to open up 165 stores in Canada starting in March as part of a multi-billion-dollar strategy. Canadian shoppers are happy because they can now buy the fashionable yet inexpensive products locally rather than crossing the border. Unexpectedly, however, many are expecting the American retail giant’s arrival to benefit Canadian retailers as well.

Jeremy Reitman, the CEO of Canadian clothing chain Reitman’s believes Target will attract many consumers to malls that would otherwise die due to declining shopper traffic. Furthermore, Reitman asserts that Target’s decision to expand into Canada will incentivize consumers to shop in Canada, further drawing traffic to other Canadian retailers as well. Target is also planning to hire over 30 000 workers in Canada which will help reduce unemployment in certain areas.

I believe Target has the ability to legitimately help Canadian retailers to boost sales and contribute greatly to the Canadian economy. The American big business model has the ability to generate billions in revenue while giving Canadian consumers a reason to stay north of the border.

As Richard Warnica explains in his article entitled, “Vancouver’s video-game industry is slowly disappearing,” British Columbia has become the unfortunate victim of a lack of economic competitiveness; this has led many businesses out of B.C. and on to a greener pasture. The Canadian video gaming industry, which, for many years, was based mainly in Vancouver, is moving almost entirely to Ontario and Quebec.

Why? The answer is simple: input costs are much cheaper in Eastern Canada due to new tax incentives provided by provincial governments. In Ontario, for example, the provincial government has offered a 37% labour tax credit to all video-game developers. This compares rather favorably when put side-by-side with B.C.’s 17% labour tax credit – not to mention sky-high commercial rent costs in the Lower Mainland.

How can local governments increase economic competitiveness and create thriving industry in their region? Taxes are an inevitable cost to business in order to create societal benefit; which industries deserve tax breaks and at whose cost should these subsidies be incurred? Finally, are there other, more effective, ways of attracting certain business to invest capital in a particular state/province?