Chen Xing's Blog

Toms shoebox promoting the “one for one” deal

I am opposed to the “one for one” business model from a humanitarian viewpoint because although it is very effective marketing,  the product given to the customer is often of bad quality. Products should be to alleviate “pains” in the most convenient and affordable way possible, providing the highest marginal utility. If the “one for one” model is implemented, that would cause there to be less consumer surplus.

In addition, the model does not provide long term solutions; instead actually provides a negative impact to the same communities it is trying to assist.

“By undercutting local prices, Western donations often hurt the farmers, workers, traders, and sellers whose success is critical to lifting entire communities out of poverty. That means every free shoe donated actually works against the long-term development goals of the communities we are trying to help.” – Cheryl Davenport

I agree with and support the “one for one” business model from a business viewpoint because put simply, “Toms isn’t designed to build the economies of developing countries. It’s designed to make western consumers feel good”. Providing a strong enough incentive for a consumer to purchase your product, even if the incentive is a false sense of goodwill, means that the marketing is working. Toms has implemented this model in a successful way, with enough feelings of reliability given to the consumers to drive sales, and ultimately make profit.

Sources:

[1] http://www.fastcoexist.com/1679628/the-broken-buy-one-give-one-model-three-ways-to-save-toms-shoes

Image which from a video which shows Golden attacking the Uber driver

Benjamin Golden, a senior marketing manager at Taco Bell was fired from his position shortly after a video of the assault taken from the Uber drivers dash-cam was released to the public.

The assault had nothing to do with how well Golden preformed his job, however due to public outrage demanding his removal from his position at Taco Bell, the company had no choice but to let Golden go.

This links topics from both marketing and ethics. It was negative publicity for Taco Bell and resulted in thousands of distraught customers. The incident also relates to ethics; Golden has attempted to issue a public and in-person apology to the victim Uber driver and appears remorseful. However, Taco Bell’s decision will have the impact of ruining Golden’s entire professional career. On the other hand, it would be extremely difficult to keep Golden on board given the circumstances and negative impact on the company’s image.

I believe that the main deciding factor for this situation was the video. It is undeniable proof of what happened and allows the public to be easily outraged. If there were no video proof of the incidence occurring, it would have been settled quickly, have received minimal media coverage, and Golden would have most likely have kept his job. Yes I completely agree that Golden was one-hundred percent in the wrong in this situation, however I do not believe that this one intoxicated mistake should warrant him with thousands of death-threats, to be publicly humiliated, and have the rest of his professional career and social life ruined.

Sources:

[1] http://www.adweek.com/news/technology/taco-bell-fires-marketing-manager-who-was-caught-video-punching-uber-driver-167905

[2] http://abc7news.com/news/uber-attack-suspect-makes-statement-wants-to-apologize-in-person/1070606/

Zerodium, a notorious “premium acquisition program for zero-day exploits and advanced cybersecurity research” has paid out the 1 million dollar bounty it offered for anybody who could “find a way to remotely jailbreak a new iPhone or iPad running the latest version of Apple’s mobile operating system iOS (in this case iOS 9.1 and 9.2b), allowing the attacker to install any app he or she wants with full privileges.”

The winning team cannot be identified due to having to sign a non-disclosure agreement as part of the agreement.

A “wanted poster” for the iOS 9 bounty, featured on Zerodium’s website.

What use does Zerodium have for needing such an exploit, and justifying the ridiculously high reward bounty in exchange for it?

There is a new emerging and thriving business revolving around selling exploits to government agencies, who are willing to pay significant amounts to bypass the security of applications that companies who created them refuse to allow them to access.

Many companies, such as Mitnick Security have programs which match exploit holders to government personnel, which are heavily controversial regarding the ethics behind it.

If Zerodium were to sell the newly discovered iOS exploit to the right clients, they could potentially come up with a much, much larger profit.

Sources:

1. http://motherboard.vice.com/read/somebody-just-won-1-million-bounty-for-hacking-the-iphone?utm_source=mbtwitter
2. https://www.mitnicksecurity.com/shopping/absolute-zero-day-exploit-exchange

Government intervention can drastically affect how a business preforms. Newly implemented laws or policies may be detrimental to an unsuspecting business.

An example of this happing recently is when China announced that they were abandoning the multi-decade one child policy, the market value of condom companies have decreased significantly.

On the other hand, some companies will thrive, such as companies that make nappies, pushchairs and baby milk, whose shares have all risen in value and business is booming. One of the biggest beneficiaries in terms of the financial markets was China Child Care, which makes hair and skin care products for children, with shares “ending 40% higher on Hong Kong’s stock exchange on [Oct. 30]”.

This links to the topics discussed in class of current events and news affecting stock prices. Looking at the snapshot below from Google Finance we can see the significant increase in stock value on October 30. Looking to the right of the image, we are the new events that may be relevant to the price fluctuations and we can see that “Children-Related Stocks Surge After China Ends One-Child Policy” would justify it.

One month stock performance of China Child Care Ltd.

Sources:

[1] http://www.theguardian.com/business/2015/oct/30/condom-shares-fall-in-china-after-plan-to-end-one-child-policy

[2] https://www.google.ca/finance?cid=13122155

In the blog post written by Justin Di, he discusses how Telus Chas announced that it plans to spend $1 Billion in fibre-optic internet expansion in Vancouver.

I believe that this is a way for Telus to establish itself as a recognizable provider of fibre networks before Google Fiber has a chance to enter into Canada. While it may seem like a noble move on Telus’ part to provide its customers w

An example of the speeds capable by fibre optic networks, provided by Google Fiber.

ith a innovative, quality service, it Telus’ underlying motive may be to actually secure a position first in the market for very high speed internets in order for them to continue to charge premium rates with no worthy competitors.

The Telus Fibre website looks very similar to Google Fiber’s website with the only major difference being that Telus is focusing on Canada while Google is starting with the United States. Shaw Communications has also stuck its foot in the door of the fibre internet industry, however only offering its services to exclusive businesses with no set price rates.

This is an example of the major telecommunications companies innovating outwards to stay competitive with each other. There has been obvious public demand for higher speeds, however it is just recently that the demand has reached a point where it would be beneficial to companies to start providing such services.

Sources:

[1] https://blogs.ubc.ca/justindi/2015/10/04/fastest-internet-in-the-world-for-vancouver/

[2] http://www.theglobeandmail.com/news/british-columbia/telus-to-spend-1-billion-in-fibre-optic-internet-expansion-in-vancouver/article26640003/

[3] http://business.shaw.ca/Advanced-Solutions/Internet/Fiber-Gateway/

[4] http://www.businessinsider.com/r-business-bandwidth-demand-lights-up-once-dark-fiber-sector-2014-25

In Fianca Chen’s blog post, she outlines the importance of social media marketing, and how some people, ranging from high-profile celebrities to regular everyday users publish content strategically.

There are many services that allow you to set posting times and automatically

Instagress.com landing page

post content for you such as Hootsuite, TweetDeck, and Buffer and even tools that completely automate your presence on social media platforms by automatically interacting with other people, by leaving pre-written or algorithm derived comments, randomly “liking” photos or following other users. A online tool that I have used and am familiar with is Instagress, which does exactly this. Tools like this can interact with thousands of people quickly and efficiently, and most are none the wiser that they are actually communicating with a mindless bot.

I completely agree with Fianca on how we, (our generation) “have a clear advantage in the future of how the social, digital world works”. The most effective way to promote and foster growth for your business is no longer one customer at a time. However I believe that the social media world is becoming so automated, eventually, hidden behind a screen, we wont be able to tell if whomever we are interacting is a real person, or just a clever bot.

Source:

https://blogs.ubc.ca/fianca/2015/11/18/51/

Clutter Inc. executives Ari Mir (CMO) and Brian Thomas (CEO).

Mark Suster, the writer of the blog starts off by congratulating Clutter Inc. for raising $9 million dollars of capital from a large venture capital firm. However, Clutter Inc. the biggest competitor of the startup that Suster has personally invested in, MakeSpace. Mark then begins to justify this, by explaining the importance and benefit of competition, stating that

“[Investors] realize there is some market validation when there are competitors.”

While this is true, I also believe that what investors realize could be positive or negative depending on where your company is positioned against the other(s). If your company’s competitor is so ahead and has established a sturdy position in the market first, investors may decide that the battle is futile and not worth risking.

Suster also mentions that an “unhealthy focus on your competitors leads one to take one’s eye off of the customer and market opportunity”. I agree with his statement; while it is important to keep track and stay up-to-date with a company’s competitor’s developments, tunneled, unhealthy focus on these things can cause a business to lose sight of what is more important; itself. Put beautifully by Suster, do not end up “focusing more on the competition than the customer”.

Sources:

[1] http://www.bothsidesofthetable.com/2015/10/22/what-to-do-when-your-competitor-gets-funded/

[2] http://blogs.wsj.com/venturecapital/2015/10/22/clutter-raises-9-million-for-its-on-demand-storage-service/?mod=WSJ_TechWSJD_venture

Large companies such as McDonalds, A&W and Kraft Foods are moving towards obtaining a “healthy” image contrary to their previous consumer preconceptions.

McDonalds Canada is boasting that their meat is purchased 100 precent from Canadian producers, and A&W states that all their beef is guaranteed to be “raised without the use of hormones or steroids”¹. Even Kraft Foods announced that “[they] will use spices like paprika, annatto and turmeric to replace the synthetic colours”³ in their famous instant macaroni and cheese product.

This appears to be a common marketing approach by many companies that are not typically viewed as “healthy choices” to cater towards the ever-growing trend of consumer awareness.

This change is influenced by the consumers, for example, the Kraft “change comes after hearing from parents who wanted improved nutrition and simpler ingredients, Kraft (KRFT) said”³.

Sources:

[1] http://www.ctvnews.ca/business/industry-standards-fast-food-giants-in-ad-war-over-meat-source-1.2594198

[2] http://www.latimes.com/business/la-fi-eggs-cages-20150929-story.html

[3] http://money.cnn.com/2015/04/20/news/companies/kraft-macaroni-cheese-fake-color/

Nissan Motor Co. CEO Carlos Ghosn speaks to the media during the 2015 New York International Auto Show on Thursday. Ghosn said Nissan plans to launch self-driving cars in Japan in 2016. | BLOOMBERG

Carlos Ghosn, the CEO of Nissan stated at a press conference that “there will be a Nissan product in Japan, which will carry autonomous drive”.

Nissan has set a time line of 2016, to use their five year partnership with NASA to develop the newly emerging autonomous driving technology. By 2020, the ability to navigate seamlessly though busy city traffic is hoped to be achieved. All this is going to be achieved step by step because “to persuade the regulators [of different countries] that you can take your hands off the wheel or your eyes from the road is going to take a lot of demonstration”, and with emphasis still on having “zero emission”.

Relating to “Porter’s Generic Strategies” which was discussed in previous lectures, Nissan’s strategy can be interpreted as a “Differentiation Strategy”. The product Nissan promises offers “unique attributes that are valued by customers”, such as complex functions of the vehicle and zero emission technologies.

Nissan will be successful in its differentiation strategy because they meet the Porter’s criteria and have important internal strengths such as access to leading scientific research and a highly skilled and creative product development team due to their partnership with NASA. They also have a strong sales team due to their already established brand and a corporate reputation for quality and innovation due to their consumer perceived “reliable” vehicles and innovative products such as the Nissan Leaf.

Sources:

[1] http://www.japantimes.co.jp/news/2015/04/03/business/corporate-business/nissan-launch-self-driving-car-japan-2016-ghosn-says/#.VhCIwxNVikq

[2] http://www.quickmba.com/strategy/generic.shtml

Turing Pharmaceuticals raised the price of the medicine Daraprim “from $13.50 per pill to $750 overnight”¹.

Martin Shkreli is the founder and chief executive of Turing Pharmaceuticals, which raised the price of the drug Daraprim to $750 a tablet from $13.50. Credit Paul Taggart/Bloomberg, via Getty Images

This is a trend taking place now as there is another example of a near identical case in Canada as well where the drug “Cycloserine” which “is a critical drug used to treat a rare and dangerous form of multidrug-resistant tuberculosis”² had its prices increased by 2,000 percent after Rodelis Therapeutics obtained the rights to the vital drug.

Many concerned citizens are urging the government to impose regulations to prevent the exploitation of those desperate for these drugs. These issues relate to the topics of government intervention and business ethics that were discussed in previous lectures.

The government is being urged to help regulated in both cases by concerned citizens.

“Ottawa needs to regulate the price of those unpatented medicines … to prevent this happening again”.²

Sources:

[1] https://www.washingtonpost.com/news/to-your-health/wp/2015/09/21/ceo-of-company-that-raised-the-price-of-old-pill-hundreds-of-dollars-overnight-calls-journalist-a-moron-for-asking-why/

[2] http://www.cbc.ca/news/health/tb-drug-price-cycloserine-1.3237868