Microsoft’s Surface Studio

This is a response to Jeffrey Dastin’s post on BNN:

http://www.bnn.ca/microsoft-launches-surface-studio-its-first-ever-desktop-computer-1.592482

Microsoft is aiming to jump ahead of the creative market and virtual reality market with their new products. The Surface Studio, their new operating system, and their virtual reality head set are targeted at artists and video gamers.  Microsoft’s new product gives users more tools to express themselves artistically, but at a costly price.  Will this product’s launch change the game in creative design or will it prove unsuccessful?

The Surface Studio with the Windows 10 Creators Update, releasing in 2017, showcases a feature in which creators can scan an object on all sides and be viewed in a new software program “Paint 3D”.  Within Paint 3D, artists can rotate, edit, and present the scanned object in a PowerPoint presentation.  With the Surface Studio, Microsoft targets to steal the consumers from their longtime rival, Apple Inc.  The new desktop computer comes with a touch screen monitor with the ability to be drawn on with a stylus, similar to Microsoft’s Surface Pro.  Historically, Microsoft products have been known as “workhorses”; according to Jan Dawson, they have been used to complete more systematic tasks.  With the help of the Surface Studio, the company can appeal to more art-based users and professionals.

The product’s price has been set at US$2,999 to make the Surface Studio “out of reach for the vast majority of consumers”.  Microsoft looks to draw in individuals who specialize and are more serious in creative design.  Although Microsoft is gaining an edge on Apple’s 3D tech, I believe the high price will scare away potential customers.  Another setback for Microsoft is that the majority of Windows users are still using the Windows 7 operating system.  In my experience, I found it daunting switching from Windows 7 to Windows 10; the enormous change delayed me months before upgrading to Windows 10.  These main factors are limiting the range of potential customers due to the high price and the long process of upgrading through two Windows programs.  Surface Studio currently targets users in three minorities: professional artists, individuals who can afford the product, and those who are using the latest operating system.

Microsoft’s Chief Executive Satya Nadella mentioned: “[Microsoft is] building Windows for each of us (and enabling) people to experience computing in new ways”.  I look forward to seeing the impact of Microsoft’s sudden burst of new technology on the future of creativity and design.

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https://tctechcrunch2011.files.wordpress.com/2016/10/surface-studio-pen.jpg

Jim Koch and his book “Quench Your Own Thirst”

This is a response to Victor Chen’s post to:

http://www.cbc.ca/news/business/sam-adams-jim-kock-craft-beer-1.3778969

https://blogs.ubc.ca/victorchen/

Jim Koch, CEO of Samuel Adams brewery company, grew his business from only his family’s beer recipe dating back to the 1860s.  Koch’s father gave him one piece of advice: to make a good beer.  Inspired by his father’s words, Koch built a strong foundation through the quality of his beer.  Since the 1980s, he has constantly been improving his products.  He would meet with his customers to share a drink, receive feedback, and connect on a personal level.  Koch believes that “It’s about how what you’re offering will help them accomplish their, [the consumer’s], objectives”.  By satisfying the customer’s need it builds a connection between them and the company, leading to more sales, and finally leading to the creation of a company.  Over 32 years, Koch focused on his product’s value stemming from consumer wants, he has grown his small beer brewery into a company worth $2.2 billion USD.

While reading about Jim Koch’s successful Beer Brewing company, Victor Chen noticed similarities between Koch’s and Michael Dell’s strategy to run a successful company.  Victor mentioned Koch also followed value propositions like Dell and many companies at that time.  However, Koch as well as Dell decided to go the extra mile and directly address the customers wants and the value the customers were receiving from their products.  I agree with Victor’s observation of Koch and Dell’s high focus on value proposition and customer relations.  Both would outsource to other producers to manufacture their products in order to focus harder on developing a strong producer-consumer relationship.  Koch promotes a “Eff-You” rule where anyone in the company can stop a conversation to speak up about their opinion; with the rule applied to Koch himself as well.

I believe Koch’s business model he laid down as a foundation is extremely powerful and set itself up for continuous success and growth.  I agree that the quality and taste of the beer should be prioritized because the customer drinks the beer for how well it tasted, not for how well it was advertised.  A satisfied customer can spark the word of mouth cycle to bring in more customers.  With brand loyalty, customers will have repeat purchases and will bring in potential customers, it gives the company more exposure and space to grow.  The theory that a business should cater its products and services to what the consumer wants, is how many companies, like Samuel Adams, grow to such a grand scale.

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Articles:

https://hbr.org/1998/03/the-power-of-virtual-integration-an-interview-with-dell-computers-michael-dell

http://www.notablebiographies.com/newsmakers2/2004-Di-Ko/Koch-Jim.html

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http://images.realclear.com/381656_5_.jpg

This is a response to Kamil Kulewski’s post to:

http://www.huffingtonpost.ca/2016/09/26/shomi-shut-down_n_12202070.html

https://blogs.ubc.ca/kamilkulewski/

Kamil Kulewski discusses the factors that lead to Shomi’s, Rogers Communications Inc. and Shaw Communications Inc.’s video and movie streaming service for existing users, downfall.  One major reason for Shomi’s closing was because of the inclusiveness to only Rogers and Shaw customers.  The decision to limit their target market had put them in a disadvantage.  With a narrower range of customers, Shomi lost its potential to grow and capture customer loyalty.  When Shomi decided to open their service to all Canadians, it was a little too late – Netflix had already established a strong presence in the Canadian market.

Towards the end of the article, Kamil mentioned that with Shomi out of the picture, Bell’s CraveTV can square off against Netflix Canada.  Although, Shomi’s departure from the market has created space for CraveTV to expand, I believe that they have little chance against the continuously growing monopoly.  When Shomi announced they were closing down, they had less than 700,000 users while Netflix had a whopping 5.2 million subscribers.

Though there are many points of parity between Netflix, Shomi, and CraveTV, all providing online movie and video streaming, Netflix clearly stands out above the other two.  Netflix uses a freemium business model to reel in new customers.  Their free one-month trial allows the user to experience different special features – points of parity.  Not only does Netflix offer movies, television shows, and foreign films; they will deliver DVDs and Blu-rays right to your door step.  Their DVDs and Blu-rays include behind the scenes, director’s comments, and interviews.  Although I am not a current Netflix user, their intuitive recommendation algorithm catches my attention.  The system will suggest movies and shows based off of my preferences and previous ratings I gave to make sure I do not miss any shows.  These key features will draw me in at lightning speed.  Netflix continues to gain control of the Canadian market as more users are captivated by their service and many features.

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Articles:

https://www.bloomberg.com/news/articles/2016-09-26/netflix-dominating-in-canada-as-rogers-shaw-shut-down-shomi

http://www.elementsofcinema.com/general/netflix.html

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http://mikesbloggityblog.com/wp-content/uploads/2016/01/PicMonkey-Collage1.jpg

Mario and Shigeru Miyamoto

For decades Mario, your favorite Italian plumber, has played a major role for Nintendo and entertainment for millions around the world.  With Nintendo’s hardware sales dropping from 100 million in the first five years to only 13 million in the past five, Nintendo’s most popular game creator, Shigeru Miayamoto, refused to go into the mobile games market.  Miyamoto was afraid of the use of their characters by third-party developers would dilute the characters’ value.  He was also against taking advantage of families, the addictiveness of Nintendo’s products, and the “freemium” revenue model for mobile games.  The “freemium” revenue model allows a free trial period for consumers with in-app purchases for in-game items or more levels to play.

Nintendo realized that they were missing out on a generation of potential consumers and gamers, losing billions of yens according to games consultant Serkan Toto.  Just last month, Miyamoto announced the company’s first Mario mobile game to follow up Pokemon Go’s success of 500 million downloads in only two months within its release date.   After the announcement Nintendo’s shares skyrocketed up by 38% since January 2016.  Nintendo hopes to reel in potential and new fans through the mobile games –hoping to increase their hardware sales, which makes 50% – 60% of their yearly revenue.

The question is, “what makes Nintendo’s games so addictive?”  The answer lies in their strategy.  Nintendo has used the differentiation strategy since the creation of Mario and future game titles.  However, their games do not necessarily have unique attributes from other game developers.  Their games uniqueness lies in the Nintendo’s intellectual property.  Their unique characters that many children, teens, and young adults whom have built their childhood with draws them back in when new products like Pokemon Go.  Pokemon and Mario will not be the only characters planted easily accessible phones and tablets of millions – Nintendo has plans to bring five more free-to-play mobile-games by next year, including well known titles Fire Emblem and Animal Crossing.  Nintendo’s decision to move to the mobile platform focuses on the sentimental and reminiscent aspect for past fans and makes space for potential fans to join the Nintendo family.

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Articles:

http://www.economist.com/news/business/21707949-giant-console-industry-has-lost-generation-gamers-smartphones-can-it-reclaim

http://www.channelnewsasia.com/news/technology/at-gamers-meet-in-tokyo-absent-nintendo-is-talk-of-the-town/3132774.html

http://www.quickmba.com/strategy/generic.shtml

Picture:

http://www.gengame.net/wp-content/uploads/2014/07/miyamototributefeatured.png

It’s been known for pharmaceutical companies to hike up their product prices to generate more revenue.  Mylan, an American Epipen manufacturer, is not afraid of making more cash off public health.  Since 2007, Mylan has spiked up their prices from $100 to over $600 for just a pack of two Epipens.  Many individuals and parents are outraged by the new prices took action through petitions and social media.  Can you really put a price on a 6-year old’s life?  Or anyone’s life?

Is Mylan being ethical and fulfilling its “social responsibilities”?  But first, we must define what “social responsibilities” are and whom they apply to.  Social responsibilities are set to guide individuals and organisations to take actions that will benefit society as a whole – socially, culturally, economically, and environmentally.

Milton Friedman believes in a “fundamentally subversive doctrine”, when in a free society, “there is one and only one social responsibility of business – to use it[s] resources and engage in activities designed to increase its profits so long as it stays within the rules of the game”.  In other words, he is saying it is fine if you can produce revenue disregarding ethics and social responsibilities without breaking any laws.  He mentions how businesses hide their actions with the term social responsibilities.  Corporations and proprietors use this phrase to mask decisions based on other reasons instead of being the main reason for those decisions.

However, I disagree with Friedman’s opinion on corporate ethics.  I believe that R. Edward Freeman’s, an ethics professor at the University of Virginia, Stakeholder Theory is a correct way to approach social responsibility.  Stakeholder Theory states that every “stakeholder”, including customers, suppliers, employees, communities, financiers, investors, and banks, should be valued equally in a company’s eyes.  Looking at all the stakeholders as one is the way to go; all their interest must point in the same direction.  It is the entrepreneurs and managers who must find common interests in all groups.  Businesses and proprietors need to consider every stakeholder to move forward in the business world, as a whole.  Mylan had obviously failed to do so.  It is not right to care about one group; Mylan’s shareholders in this case.  Mylan ignored to care about their customers who depend on their product to live by raising the price by over 600%.  Customers are and should be part of the company’s group of stakeholders too.  If your child needed the medication you produce, would you still spike the price up?

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Articles:

http://www.nytimes.com/video/business/100000004614154/outrage-over-epipen-pricing.html?smid=pl-share

http://site.ebrary.com/lib/ubc/reader.action?docID=10187339&ppg=171

http://www.imasocialentrepreneur.com/social-responsibility/

https://www.youtube.com/watch?v=bIRUaLcvPe8&feature=youtu.be\

Picture:

http://s4.reutersmedia.net/resources/r/?m=02&d=20160829&t=2&i=1151444315&w=644&fh=&fw=&ll=&pl=&sq=&r=LYNXNPEC7S0FS