Danielle Lim's Blog

Recently founded (2009) Vancouver-based company Herschel Supply Co. Ltd has already made its mark in the accessory industry. They have invaded university campuses with their ever popular backpack designs and have even begun producing laptop and tablet cases. Over the years, sales have soared, growing over 900 percent in 2010 and another 350 percent in 2011. Hershel can attribute much of its latest success to their solid business plan.

Herschel does a good job of understanding their customer segments. They are aware that their target market of young adults is quite fickle in that they are constantly following new trends. As a result, the company focused on creating a solid brand position to meet the value propositions of their customer segments. By having a reputation of producing classic good quality backpacks, Herschel backpacks will never be “just a fad”.

Hershel Supply Co. has also implemented good strategies for growth. Recognizing that there are different income levels among students, they hope to capture a larger segment of the market by offering three tiers of backpack collections.

Source: http://www.theglobeandmail.com/report-on-business/small-business/sb-marketing/sales/can-herschel-backpacks-go-mainstream-and-keep-their-cool/article12201755/

Picture: Herschel backpacks are invading university campuses

Response to Megan Barnabe’s post.

In listening to Dan Ariely’s TedTalk and reading Megan Barnabe’s response, I was intrigued to learn more about the changing values of society and what that means for the way businesses are run. Job satisfaction has become a priority in the workplace over the past decade or so. In fact, taking pride in one’s work may even be a stronger motivational factor than money itself. This is an extremely important concept because the operations of a workplace must be able to adapt in order to grow and continue to bring success.

As we studied in class with Zappos, an online shoe retailer, their success comes from strong human resource management. Although their employees are being paid less than their counterparts in other companies, the workplace environment offered at the Zappos headquarters in Nevada is positive, fun and engaging. Employees are also offered qualitative benefits such as flexible hours, and daycare and dental benefits. All these factors combined, Zappos provides proper motivation for its workers –one that is more important than money.

Over the next few years, it will be interesting to see how businesses change their organizational structures to address this shift in values of workers today.

Sources:

https://blogs.ubc.ca/meganbarnabe/2013/11/13/motivation/

http://www.ted.com/talks/dan_ariely_what_makes_us_feel_good_about_our_work.html

http://www.newyorker.com/reporting/2009/09/14/090914fa_fact_jacobs

Picture: Zappo’s fun working environment in their headquarters

Response to Emilie Gibeau’s post.

Over the past few decades, there has been a cultural shift in the way businesses are run as a result of changing consumer values. It has become more important that not only are companies producing quality goods or services, but they are doing so in an ethical manner. As corporate social responsibility becomes more of a priority to consumers, businesses have to respond appropriately.

However, in reading Emilie Gibeau’s post, I realize that it is hypocritical of us, as consumers, to critique these companies for using cheap labour when we continue to buy from them. It is also unfair to continually expect low prices and at the same time slander companies for trying to cut costs and make a profit. It is important to understand that in order to offer low prices, companies must maintain a low-cost supply chain, and the easiest way of doing so is by cutting manufacturing costs.

Whether we are discussing the purchase of cheap clothing (issue of labour) or organic foods (environmental issue), the question remains: are we as consumers willing to spend more for products that we know are ethically manufactured? Unfortunately, for the majority of the population, the answer is no.

Sources:

https://blogs.ubc.ca/emiliegibeau/2013/11/14/the-hidden-cost-of-cheap-clothing/

http://blogs.kqed.org/lowdown/2013/05/17/who-made-your-t-shirt-the-hidden-cost-of-cheap-fashion/

Picture: Interior of clothing store Forever 21

Response to Sanjay Sabnani’s post on Forbes Magazine.

In just two years, Snapchat has reached incredible success as a mobile application that allows its users to send and receive pictures/videos to their friends with a viewing time limit until they are inevitably erased. In fact, this entrepreneurial success has become somewhat of a “painkiller” to society, joining popular social media programs such as Facebook, Twitter and Instagram.

Facebook is one company that has recognized its potential, offering Snapchat a $3 billion buyout. In reading Sanjay Sabnani’s, Chairman and CEO of CrowdGather, response to the deal on Forbes Magazine’s blog, I have to agree that Snapchat is worth more than $3B.

With the increasing use of technology and the internet, privacy has become a huge area of concern. Users of social media are worried that their personal, supposedly private, posts may influence their ability to get a job as employers are now browsing through applicants’ Facebook profiles before hiring. In planning the conception of the app, Snapchat catered to a value proposition that had not yet been met with current platforms by “[putting its users] in control of the message and delivery…without the watchful eyes of everyone within their social network” as Sabnani so eloquently puts it.

Source: http://www.forbes.com/sites/quora/2013/11/14/should-snapchat-have-accepted-facebooks-3-billion-cash-buyout-offer/

Picture: Snapchat provides a platform for instant photo/video messaging

Michael Hallatt, known for his entrepreneurial success with the opening Pirate Joe’s, has decided to strike yet again. After winning a very public lawsuit with Trader Joe’s, Hallatt has confidence that he can succeed again. He has decided to open a quick stop restaurant similar to that of McDonald’s. While the restaurant, possibly named “Black M Burgers”, shares many points of parity with its competitors –with its quick and convenient service to its customers– the restaurant’s success depends on its main point of difference: they only sell healthy food. Black M Burgers will offer customers organic beef, locally grown toppings, and gluten-free buns while providing a calming atmosphere of a rooftop garden.

Hallatt’s continued success is based on his ability to evaluate the value proposition of his target market and find a gap in the industry that he is able to capitalize on. As a first-year business student, I admire Hallatt’s ability to take current, working business models and rework them to meet the modern, current needs of its customers. Through his ability to understand his customer segments and what they are missing from current society, Hallatt is able to capitalize and forge new opportunities for success.

Source: http://vancouver.24hrs.ca/2013/11/07/pirate-joes-sets-sail-for-fast-food-giants

Picture: Michael Hallatt, founder of Pirate Joe’s

With the evolution of technology come many new opportunities for businesses to improve their business model to become more productive and profitable. Tesco PLC, a retail chain based out of the United Kingdom, has adopted new method of gathering intel on their customers by unifying business and information technology. They have partnered with a company called Amscreen which has created a camera embedded digital screen which analyses customers’ faces to profile them according age and gender.

Using this technology program called “OptimEyes”, Tesco takes information provided by the camera, along with the time of day and the products the customer is buying, to determine about which advertisement to project on the screen as they wait in line. This form of targeted advertising is similar to “something out of Minority Report” says Amscreen CEO Simon Sugar.

While targeted advertising is an effective method to become more productive as a company, this program has been under scrutiny by the public feels their privacy has been violated. Although Tesco claims that facial images are not stored and the technology does not personally identify customers, they struggle with the challenge of trying to be a profitable company while abiding by the ethical behaviour.

Source: http://www.theglobeandmail.com/report-on-business/industry-news/marketing/tesco-rolls-out-face-scanners-to-deliver-targeted-ads/article15243513/

Picture: Digital ads in Tesco’s gas stations

Response to Peter Chen’s post.

This article piqued my interest not only because of the business aspect of bottled water in a city where clean tap water is readily available, but because of the environmental issues the article presents. I found it interesting how Vancouverites were always willing to purchase bottled water when the city’s tap water is the purest in the world, according to BC Living. Not only are the plastic bottles unsustainable, albeit convenient, but tap water is arguably cleaner than bottled water. It is tested for bacteria about 25,000 times a year compared to bottled water plants which are inspected once every three years.

The question is, why do people continue to buy bottled water? The answer lies in the success of bottled water marketing companies. They were able to position themselves in a way that makes their product competitive, even though tap water is virtually free. By advertising their product as unique and addressing the purity of their bottled water, companies are able to bait the health conscious Vancouver population and create these marketing myths that are permanently engraved in the minds of citizens all over the world.

Sources:

https://blogs.ubc.ca/peterchen604/2013/09/20/bottled-water-vancouvers-greatest-marketing-success/

http://www.bcliving.ca/home/what-youre-too-good-for-our-water

Picture: Fiji Bottled Water

Silk Road was an online underground black market for selling drugs and other illegal services that was shut down by the FBI earlier this month. Their differentiating factor was their ability to provide a platform where transactions could be made completely anonymously using a unique method of digital payment called the Bitcoin. Before being shut down, Silk Road facilitated the movement of more than 9.5 million Bitcoins, equivalent to $1.2 billion at the time of the shut down. With the success of this digital currency that is now without a governing center, several federal agencies in Washington are considering ways to capitalize on the opportunity.

With the closure of Silk Road, there is potential to regulate the Bitcoin and legitimize it so users can continue to use the currency. Seeing as most of its users were previously active in the illegal Silk Road community, is it the right call for the United States government to keep the Bitcoin alive?

Source: http://www.newyorker.com/online/blogs/currency/2013/10/could-the-silk-road-closure-be-good-for-bitcoin.html

Picture: The Bitcoin

As Generation Y enters the workforce, the corporate world is being reshaped according to new values and priorities. One of these values includes social responsibility. As companies struggle to stay relevant to the consumer, it is clear that corporate social responsibility is becoming increasingly important. Companies are now beginning to incorporate the new concept of a triple bottom line (profit, people, and planet) when drafting the business model. As stated by Phillip Haid, CEO of Public Incorporated, an agency that promotes social causes through campaigns, “A for-profit company that bakes social good right into its business model and brand can be a huge differentiator and drive sales”.

The shoe company TOMS is a good example of a company that incorporates a solid product with a strong commitment to social causes. For every pair of shoes sold, the company donates a pair to the less fortunate. As of 2013, TOMS has made a positive impact in over 50 countries. This is a good business venture because it highlights how a little extra cost in social initiatives not only has a global social impact, but can lead to high sales and success as a company.

Sources:

http://www.theglobeandmail.com/report-on-business/careers/career-advice/life-at-work/good-vibes-for-social-responsibility/article14575293/

http://www.toms.com/our-movement/l#where-toms-give-shoes

Picture: For every pair of shoes sold, the company donates a pair to the less fortunate.

In the fast paced capitalist world of society today, corporations are feeling more pressured than ever to produce higher profits. They are pushed to their limits and forced to come up with new innovative ways of generating revenue. As a result, it is sometimes tempting to give into shortcuts that maximize the success of the company, although that often means walking the line of morality.

Apple is an example of an organization that gave into this temptation. By using complex network of offshore subsidiary accounts, located primarily in Ireland, the company was able find loopholes in the system and ultimately avoid taxes. Between 2009 and 2012, Apple cleverly managed to avoid paying $74 billion in taxes. Other corporations guilty of tax avoidance similar to this situation includes Google, Starbucks and Amazon.

While this strategy not technically illegal, Apple’s system of avoiding taxes is certainly unethical. Where does a corporation draw the line between an aggressive business structure and an unethical business strategy? What does a multi-billion dollar company like Apple owe to society and the people in terms of taxes? These are questions that each individual corporation must be prepared to answer based on where their own corporate ethics lie.

Source: http://www.nytimes.com/2013/05/21/business/apple-avoided-billions-in-taxes-congressional-panel-says.html?ref=business

Picture: Apple Store in New York City