Recently, WestJet has reduced ticket prices for certain flights by 15%. WestJet has done this in hopes of increasing demand for these flights, as they have been flying planes that are not reaching full occupancy.When selling a product, in this case flight tickets, the more you sell the
Image Source: Google Images
better. This is because with increased quantity comes decreased average total cost per product, to a certain point. If only a small quantity of a product is sold, the average cost of production per unit is higher. This is why limited edition luxury products can be sold at extremely high prices. WestJet has noticed that their planes are not being flown at full occupancy, which increases their costs. To clarify, they still have the same production and operations cost, but less revenue to cover it. By decreasing the ticket price they hope to induce more customers into the market, thus filling their planes to full capacity and increasing revenue. For a business to make profit it is essential to exceed their break-even point, where revenue equals cost. WestJet hopes that this price cut will result in a high enough demand to make a profit.
See Article: http://www.theglobeandmail.com/report-on-business/westjet-to-reduce-fares-by-15-on-several-routes/article21511800/
Social enterprises aim to create shared value. Many organizations try to create shared value as an added bonus, bus the sole purpose of social enterprises is to create this shared value. The United Nations is an organization that promotes social progress. To do so, the UN often partners with social enterprises. The question is, if the UN was fully funded why would we need social enterprises? Well social enterprises tackle social issues and work towards beneficial social change from many different aspects. There are many issues that social enterprises deal with, and there is no way all of them could be left to solely the UN to solve.
Image Source: The Arc Initiative Site
One example of a social enterprise is the Arc Initiative which educates entrepreneurs and business owners so they can effectively contribute to their local economies. An important aspect of this initiative is the resource of knowledge. The key in attaining the mission of developing economies in the third world is sharing knowledge, not money. Funds are important and necessary to run social enterprises, but it is not what solves the social issues that they target. This is why social enterprises are important, even if the UN was fully funded: because money is not only solution. Social enterprises are usually smaller organizations that are able to create lasting partnerships and evoke sustainable social change, something that a disconnected money donor can not ensure.
Image Source: Google Images
The marketing of a brand is extremely important in it’s success. Marketing refers to how the brand is presented to the public. People are bombarded with advertisements for countless different products from different brands daily, as such not all are memorable. The most successful advertisements are the ones that are subconsciously absorbed due to its consistency with the consumer’s prior knowledge or experience. So in order to be successful, a brand should relate itself to something the consumer is familiar with.
The blog post The Psychology of Colours in Marketing, by Kyle Reyes, explains that one way to create familiarity is through marketing using colour. As explained in the blog post, there is a general objective perception of meaning behind colours. The meaning we associate with colours may be subconscious but it exists. Understanding what meanings people generally associate with each colour presents an opportunity for marketers to strengthen their brand. Reyes explains the association with several colours such as green, blue, and yellow.
TD Bank Logo
Green is associated with growth, blue is associated with trust, confidence, and dependability, and yellow conveys optimism. Think of brands that use these colours and see if their colours accurately relate to their brand image. An example I thought of is TD Bank, having a green logo which subconsciously relates to growth, something you definitely want to see from a bank.
“The Psychology of Colours in Marketing” Blog Post: http://www.linkedin.com/today/post/article/20141108192602-21131543-the-psychology-of-colors-in-marketing?trk=tod-posts-post1-ptlt
The success of businesses within any given industry are greatly affecting by its macro environment. There are many aspect of macro environment. One way to analyze the macro environment is through a PEST analysis. A PEST analysis uncovers political, economic, social/ cultural, and technological trends that are outside of the control of any given company or industry.
A recent social trend favours movie streaming over theatre going. This social trend has negatively impacted the movie theatre industry greatly, with attendance falling 11% in 2013. Theatres are having difficulty attracting audiences, which obviously negatively impacts profits. Though the theatre industry cannot control social trends, individual companies can make efforts to increase theatre attendance. Certain theatre companies in the industry have begun to attempt to create attractive points of difference to increase their sales. All movie theatre companies meet a point of parity of screening movies and selling snacks, but a point of difference is what makes the company stand out from the rest, what makes it more attractive than opponents. Some attempts companies have made to make movie theatres more appealing and differentiated have been to screen old box office successes, employ 3D and 4D (includes sensory aspects) screening, have luxury reclining seats, have alcohol service and have meal service. Though these changes have slightly increased sales, in a declining industry there is only so much companies can do to save sales.
See article: http://www.businessweek.com/articles/2014-11-06/hollywood-counts-on-event-films-technology-to-wow-ticket-buyers#r=hpt-fs
An authentic brand image of a company should extend to the internal values and practices of the company, which can be referred to as the company’s organizational culture. Organizational culture is the behaviour of employees in a company, including shared values and customs that must be accepted by new members. The office environment of a company sheds light onto the organizational culture.
An example of brand image aligning with organizational culture is a Vancouver based start up company called Hootsuite. Hootsuite is a rapidly growing company that manages other company’s social media marketing. Hootsuite prides itself on being an innovative, collaborative, unique company. The organizational structure, showcased by it’s new office workplace design, supports these attributes.
Hootsuite’s new office space has been created in a manner that promotes informal “collisions” which benefits the overall innovation of the employees. Long lunch tables, multipurpose areas, a breakout area of multipurpose tents, and ping pong tables increase the transactions between employees thus increasing their collaboration. Other employee benefits such as extensive Canadian decorations increasing aesthetic pleasure, a choice in stand or sit desk space, and a dog friendly office increase employee satisfaction. These features seem to be for employee satisfaction, and they are, but the true motive is to increase the productivity of the workplace. The creatively designed office space has resulted in increased productivity of the company.
Images sourced from article. See article: http://www.canadianbusiness.com/innovation/how-to/hootsuite-cool-office-that-makes-people-work-harder/?gallery_page=1#gallery_top
Kianna’s blog post, Polariod Cube vs GoPro, compared the GoPro camera to the Polaroid Cube camera. Kianna suggests that the Polariod Cube creates some serious competition for the GoPro. Her main arguments are that GoPros are too expensive, as its latest model is priced between $400-$500, and isn’t as established of a brand as Polariod.
Polariod Cube. Source: Google Images
Firstly, it is true that Polariod faces an opportunity to undercut GoPro’s sales with their cost leadership strategy. The Polariod Cube is priced at $100 which makes it a much more accessible product to the lower income demographic. However, with decreased cost comes decreased quality.
The quality of images produced by the Polariod Cube does not even approach that of the GoPro, in fact it’s still image quality (6MB) is half that of the GoPro (12MP). The quality and features of the GoPro are much superior to that of the Polariod Cube. This is an extremely important point of difference.
Source: Google Images
Secondly, though the company Polariod may have been founded first, GoPro has seen much more public attention and success in recent years which has positioned it as the top brand in it’s market. GoPro was the first in the market to create this specific kind of camera, and being first in the market brings a serious advantage. GoPro is positioned as the top company in the market in the mind of the consumers, due to it’s public attention and it’s early entrance into the market. It is nearly impossible to displace the leader once they have established position in the mind of the consumer.
In conclusion, I do not believe that GoPro faces serious competition from the Polariod Cube as it is a much inferior product and GoPro is firmly positioned in the mind of the consumer as the leader in their market.
Original “Polariod Cube vs GoPro” blog post: https://blogs.ubc.ca/kiannab/2014/09/28/polaroid-cube-vs-gopro/
Product Information found from GoPro Official website: http://shop.gopro.com/hero4/hero4-black/CHDHX-401.html Polariod Official website: https://www.polaroidcube.com/polaroid-cube.html
Joban Sandhu’s blog post, Poor Positioning: The Reason Hershey’s Spread Failed, states that when Hershey came out with a chocolate spread similar to Nutella it failed in the market due to poor positioning. Positioning describes the product in the mind of the consumer.
Nutella Spread. Image Source: Google Images
Joban’s argument is true; Hershey’s chocolate spread failed because Nutella was already positioned as the leader in the market. For all we know, Hershey’s chocolate spread could have been a superior spread, in taste or ingredients or some other measure, but because Nutella was already positioned as the leader in the market, consumers believed that Nutella was the best spread. The reason Nutella is the leader in the market, considered to be the best, is not necessarily because their product is actually better, but because they were the first firm in the market.
Hershey Spread. Image Source: Google Images
Being the first firm in a market is one of the most effective ways to be the leader in a market. That is why Joban suggested instead of trying to compete with Nutella, Hershey should enter a new market to have success. It is almost impossible to overtake the leader of a market, instead to maximize success as a follower a firm should relate their product to that of the leading firm.
Dasiqox Tribal Park
The beautiful and abounding nature of British Columbia is very important to many Canadians; for some it’s a staple in Canadian identity, for some it’s their home and culture, and for some it is a business opportunity. There are many Aboriginal reserves that are intended to protect the land and the culture of those who live on it. Within these reserves there are natural resources that could make companies astounding profits. This brings about a common conflict of interest between Aboriginal people and businesses seeking to exploit these natural resources. The Aboriginal’s fight to protect their land is an external element of business all company’s who look to encroach on a native reserve must consider.
A recent example of this conflict of interest arises between the Aboriginal people Tsilhqot’in and Taseka Mines Ltd who aims to exploit resources in Chilcotin. The Tsilhqot’in people are declaring a large mass of this area as Dasiqox Tribal Park, a protected reserve. Though the desired area of mining, Fish Lake, legally lies outside of this area the Tsilhqot’in are fighting to protect it. The Tsilhqot’in people argue that Taseka’s mines will have a large negative affect on the environment, and refuse to grant Taseka permission to do so. This issue relates to the ethics of business- what is more important, making a profit or protecting the natural resources this province prides itself on?
Image sourced from article. See Article: http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html?__federated=1#ixzz3FLd81vE6
One of the first, and most important steps in creating a business model is deciding on your target market. There are variety of customer segments to choose from such as mass market, niche market, segmented diversified, and multi-sided platforms. Some basic ways to segment a market are in regards to socio-demographics (gender, age, location, income) and psychographics (attitudes, values, lifestyles). Deciding your customer segment is an essential step in shaping the rest of your company, from design, to partnerships, to marketing: it is all heavily dependent on your target market. Choosing a specific market allows greater focus on a group, allowing your firm to better suit it’s goods and services to the market, however it can also be limiting. BMW motorcycles are known to be geared towards older men. Although BMW has been very successful in this market, it limited a younger demographic from entering the market. However, recently the company unleashed the R nineT, a motorcycle designed for a younger demographic. This creates a larger segmented market for BMW. This new, sleek and stylish design will entice new customers into the market for BMW motorcycles allowing the company to grow and increase profit.
BMW R nineT
Image sourced from article. See Article: http://www.wired.com/2014/09/customized-bmw-r-ninet/#slide-id-1566303
While some, like Rita McGrath, argue that competitive advantage no longer exists in a technologically advanced, fast moving business world of today (McGrath, 2013), I disagree. To stay competitive in today’s market, companies must be extremely efficient while continuously being innovative with strategies. It is more efficient for a company to outsource work than to try and be completely self-sustainable. A company very familiar with outsourcing is Apple. Part of Apple’s strategy is in fact to outsource all of their manufacturing of product parts, and assembly, so they can focus on their strength: design (P.K, 2013). Apple’s outsourcing strategy has been effective thus far, allowing them to create a strong brand name, creating innovative touch-screen phones for a reliable customer base. That is until recently.
Customer loyalty has recently started to be questioned as Apple’s innovation seems to be slowing down, and their models seem to be copying that of Samsung’s Galaxy phone (Samsung Mobile USA, 2014). Samsung,their biggest competitor, also happens to be their largest supplier of parts (P.K, 2013), which is seemingly counterintuitive. Why would Apple help their rival make profit? As part of their business model, Apple has many key partners. Without these relationships they would not prosper. The fact is, business is not a zero-sum-game. Even though Apple is helping their competitor create revenue, they are helping themselves the most.
McGrath, R. (2013). Transient advantage. Harvard Business Review, 91(6), 62–70.
P.K,. (2014). Slicing an Apple. The Economist. Retrieved 28 September 2014, from http://www.economist.com/blogs/dailychart/2011/08/apple-and-samsungs-symbiotic-relationship
Samsung Mobile USA,. (2014). Galaxy Note 4– Then and Now. Retrieved from https://www.youtube.com/watch?v=oxhSnNZH3Rk#t=25