B-plans: traditional can be seen as static and formulaic
B-Models: more dynamic, collaborative design of how the components of a business can be combined for competitive advantage
Nike’s LeBron Sneakers to Test $300 Limit
Summary
Overall basketball shoe prices were up 9.4% compared with a year before as of June, according to market researcher NPD Group Inc., while soccer cleats jumped 15.5% and running shoes climbed 5.5%.
Analysis
Nike is one of the leading firm in the sports market. It is located in a high competitive market against other firms such as Adidas. So people might assume that as the price of Nike shoes increase, due to the law of demand, the quantity demanded will decrease since less number of consumers are willing and able to purchase the same product. This may be true for most of the consumers. However, Nike may still maintain or sometimes even increase its profit by increasing its products’ price levels. This may be caused by its strong reputation and publicity and its solid promotion support. For example, the current NBA super-star Lebron James is working with Nike which allows Nike to use his imagine and logos on its products, in this case, sneakers. By doing so, people are more willing to purchase the products even with a higher price because the product’s “value” is now considered higher. Such products become more of a “luxury” rather than a normal good. Thus, it becomes more competitive against Adidas. Moreover, the firm has such high-tech skills that makes its products more suitable to its target markets. For example, the basketball shoes nowadays are not only well-designed, but also, lighter, stronger, and comforter than before. This is a unique selling point in which other competitors find hard to copy and achieve.
Russia’s vodka drinkers get New Year headache
Summary
Minimum prices for vodka took effect in Russia on Friday as part of President Dmitry Medvedev’s campaign to combat alcoholism at a time when Russians traditionally drink heavily during the New Year and Orthodox Christmas holidays.
The price of the cheapest half-litre vodka bottle will nearly double to a new minimum of 89 roubles ($2.95 U.S.)
Analysis
The price of vodka was raised because governments are trying to reduce the demand for it. Alcohol is usually considered as a normal good that as the price increases, the number of consumers willing and able to purchase decreases. 
But for countries such as Russia where Vodka is more towards a “necessity”, there’s more demand for it. As the price of Vodka increases, most people tend to continue its purchase, while feeling negative towards the government for this “unnecessary action”, which may lead to depression, resistance, etc.
Another effective way to reduce the demand for Vodka would be increasing the health awareness of possible harms from drinking alcohol. Or the government can introduce policies to limit the quantity of Vodka that consumers are allowed to purchase. These solutions are more effective because it may change the consumers’ habits of drinking with a lower chance of the public’s resistances.
$1,000 (Today) x 1.1 = $1,100 (Future) 1st year
$1,100 x 1.1 = $1,210 2nd year
1. Segmentation and targeting
2. Positioning
3. Perceptual maps
4. Value proposition
Consumers only accept advertisements with prior knowledge or experience.
1. Getting into their mind
2. Positioning of a leader
3. Positioning of a follower
4. Repositioning the competitor
5. The power of name
6. The No-name trap
7. The Free-Ride trap
8. The line extension trap (not a good idea)
Summary
During summer 2008, San Lu, a local Chinese dairy company, was exposed by all kinds of media around the world for its unethical action. A series of illnesses among babies started to concern Chinese doctors and parents. The story begins with San Lu’s farmers, whom were seeking for a maximized profit to go after petty advantages: adding melamine, toxic chemical, in result increases the protein concentration in the milk product in order to pass the protein test. In result, 300,000 Chinese babies were affected and six died after developing kidney problems. After all the systematic tests, San Lu was found guilty by containing high level of melamine in their milk products and recalling over 10,000 tones of infant milk powder; hence the company not only was fined with a large amount of money but also its position in the worldwide diary market.
Analysis
San Lu’s unethical behavior resulted a significant damage to the society. Businesses nowadays seek for efficiency and productivity, thus morality is masked. In the short run, firms may still earn profit, but in the long run more and more consumers will leave the market which reduces the demand for milk and firms will lose its income. This may also
lower the public’s confidence towards both the firms and government. So there will be less investments. But most importantly, since consumers will be worried about the safety of food products, the competitors of San Lu will be affected as well. Thus, firms such as Fonterra should take crisis managements in order to minimize the damage it may cause to the firm. After the incident, Fonterra took all its quality tests again while providing the latest results of them to the government and, especially, to the public. Meanwhile, another team of the group organized several events with different charities around China to support those who were affected by the scandal. Some hospitals, heath centers, and even educational organizations were invested and taken care of by Fonterra to show its concerns towards the situation.