Cindy (Jia Xin) Li's Blog

http://www.reuters.com/article/2014/10/27/us-amazon-com-germany-idUSKBN0IG0HV20141027

Upon rejection of better pay and working conditions, warehouse staff at Amazon has been called by the labor union to go on strike at five different cities across Germany. The union hopes that Amazon will offer a pay level for its logistics workers similar to that of the mail order and retail industries, even though Amazon argues that its workers already receive high pay in comparison to industry standards.

For an online retailer like Amazon, a primary goal of operations is cost savings. Henceforth, it is understandable for Amazon to disagree to pay rises that will increase the total cost of production. However, it is equally important for Amazon to adhere to its corporate social responsibility in order to sustain a dependable image in the industry. Therefore, I believe that in response to the workers’ protests, Amazon should create shared value opportunities by “redefining productivity in the value chain”, according to Kramer and Porter. For example, Amazon can review its operations to detect areas where less resources can be utilized, or where less waste can be produced. In doing so, not only can the money saved be used to meet the workers’ demands, Amazon will also be involving itself in sustainable practices that are beneficial to society as a whole.

http://www.bnn.ca/News/2014/10/24/Lulu-Lama-Partnership-between-yoga-wear-maker-Dalai-Lama-sparks-outcry.aspx

Lululemon’s questioning marketing tactics are once again put under the spotlight as it partners with the Dalai Lama Center for Peace & Education in its research in connections between the body and the mind. Many consumers have used blogs and other social media platforms to express their disagreement with the partnership, as Lululemon’s pricey apparels starkly contrast with the Dalai Lama’s modest lifestyle and his support for the poor.

The luxury retailer has experienced many marketing crises in the past, such as asserting that some women have body sizes inappropriate for the company’s styles in response to complaints that yoga pants were see through. In my perspective, Lululemon is attempting to rebuild their image through working with an influential political figure associated with “empowering healthy communities through mindfulness”. However, I believe that the goal of this strategy is too closely linked with merchandising than with pursuing the shared mission of the corporation. Such a marketing tactic is ineffective as it is difficult for consumers to see the relationship between expensive yoga wear and the Dalai Lama’s fight against poverty.

In reaction to the outcry provoked by Lululemon’s new partnership, the company should focus on doing market research to pinpoint what motivates customers to buy Lululemon apparel. Lululemon should then put into perspective whether the results of the research align with the values advocated by the Dalai Lama. When these connections are made, Lululemon can express a stronger message to its customers, and gain better insight in creating alliances in the future.

http://globalnews.ca/news/1606524/red-bull-doesnt-give-you-wings-but-it-could-give-you-10/

Recently, Red Bull has been severely impacted by two lawsuits due to its fraudulent slogan “Red Bull gives you wings”. In response, the firm agrees to give a $10 cash payment for Red Bull purchasers from January 1, 2002 to Oct 3, 2014 in compensation for the fact that drinking Red Bull did not generate wings.

Charging a premium price for energy drinks that do not necessarily give the consumer more energy than other caffeine sources, Red Bull has consistently been branded as superior to coffee and similar caffeinated drinks. However, Red Bull’s famous slogan and brand image has positioned Red Bull as a “must-have” in parties, with brand awareness and ad awareness being critical factors to Red Bull’s popularity. It is interesting, hence, that the very two factors which have ensured customer loyalty are now responsible for the loss of customers. I do not believe that customers truly attest to the argument that Red Bull does not “give you wings”, since it is evident that ths is scientifically unrealistic. They are merely realizing that perhaps Red Bull’s now infamous slogan has been deceptive in making the brand more superior than it really is.

My analysis, thus, indicates that management should focus on assuring customers that Red Bull did not intend on creating fraudulent advertisements. Besides financially compensating the customers, the firm should also prevent criticisms from being blown up on social media, as the wide platform will have a great impact on Red Bull’s image internationally.

http://www.vancouversun.com/news/First+Nation+chiefs+stage+Site+showdown/10215965/story.html

B.C. First Nations is currently protesting against BC Hydro’s Site C hydroelectric megaproject, which would flood a section of the Peace River Valley, where the First Nations fish, hunt, and host ceremonies. The First Nations have brought the government forward in their determination to protect their property rights, and BC Hydro is forced to rethink their decision as it is pertinent to ethical and social issues.

There are advantages and disadvantages involving the decision to expand into the Peace River Valley. First of all, this megaproject will generate more revenue for BC Hydro, as the growing population and increasing number of industries justify the utilization of the land. However, it is equally important to consider the ethical implications this project brings to the First Nations, whose entitled lands are infringed upon. This may create an long term issue for the image of BC Hydro, as the First Nations are capable of winning the support of communities in such an emotionally charged issue.

In regards to the Triple Bottom Line, BC Hydro is ignoring the social and environmental implications in order to strengthen economic aspects for the firm. Nevertheless, I analyze that BC Hydro’s action is justified by the need to support a growing population. Therefore, I do not believe that increasing public awareness of the First Nations’ grievances will influence BC Hydro’s decision-making. Rather, BC Hydro should consider how it should appease those grievances, such as through financial compensiation, after the execution of the decision.

http://www.vancouversun.com/business/MercedesAMG+unveils+super+sports+with+taking+Porsche+Jaguar/10259630/story.html

Challenging Lamborghini and Porsche, Mercedes AMG GT S introduces a “muscular” and “dramatic” new sports car that guarantees better fuel economy, more compact engines, and is faster than ever, according to AMG. Not only that, this new sports car also offers features like a wing-like dashboard to attract a younger customer segment.

From the descriptions above, it is evident that Mercedes is creating new points of difference to distinguish itself from its competitors, who produce sports cars of around the same price with similar functions. Mercedes’ slogan, “The best or nothing”, clearly defines their sports car, as its supreme leather seats and faster outer appeal creates value for their target consumers, who are constantly looking for cool, new, flashy features. Through these minor details, Mercedes gains a competitive advantage as it creates more paths to grow through designing unique features that can expand their customer base.

Mercedes has pinpointed the customers’ need for something more flashy, more admirable, and more exciting than what is already existent on the market, and it has focused on satisfying these consmerr needs in its innovation of new designs. Hence, while its competitors remain stagnant, Mercedes is reaching into new target segments to consolidate its brand image.

http://www.cbc.ca/news/business/staples-closes-15-canadian-stores-1.2783780

Staples is experiencing intense competition as e-commerce sales increase on Amazon.com and Best Buy.

According to Porter’s Five Forces, the threat of rivalry (e-commerce), who benefit from low costs of production and thus low prices, is preventing Staples from reaching its previous profit levels. Hence, Staples is trying to differentiate its service by offering more efficient customer service in order to compete against e-commerce. Since a major downfall of making purchases online is the time lag between buying and receiving the product, Staples should continue to entice customers with time efficient purchasing processes to remain competitive.

There is a low switching cost for consumers who choose to buy online instead of from a Staples store. Moreover, there is low levels of product differentiation for Staples, who may also be able to resist the resulting increase in competition by strengthening its brand name. As a result, I analyze that Staples is making a good decision in attempting to create points of difference in their service in order to sustain brand loyalty. It is also recommendable for Staples to innovate new products to attract customers as they cannot benefit from charging low prices as online businesses do.