Monthly Archives: November 2014

Of late I’ve read and heard a great deal of appreciation and acclamation for the sector of Micro-finance, more specifically Micro-credit. This new concept of lending small sums of money at low interest to people in developing countries, has helped them start of small scale businesses in an effort to improve their financial prospects. This model in theory, sounds great but there are certain negatives about it. The article I read brings forth these drawbacks of this radical new model.

The article focusses on the effect micro-credit has had in South Africa. Post apartheid (1994) micro-credit was introduced in the country with the expectations of raising income, living standards, employment etc. The result however was quite the opposite ; very few people in South Africa have a secure income stream and therefore face huge problems in trying to pay back the loans they took. They either need to take more loans to pay back the initial one or  they have to sell of household assets, this therefore has caused more unemployment today than what it was during the apartheid. [1]

Also micro-credit since its inception within the country has not significantly changed anything. The growth has not been sustainable and the small scale informal businesses that existed in the black townships during apartheid are quite similar to the businesses that have opened up by the backing of micro-finance. So the question that arises is, What’s changed?

Developing further on this issue, micro-finance has created a large opportunity cost. Scare resources that could have been channeled towards SME (  Private Small and Medium size enterprises) [2] development have been given to micro-credit institutions and banks whose primary aim is to make money for themselves at the cost of South Africa’s poor citizens, and then leave the industry when they have made the profits they required.

To end, I would like to state that I am not against the concept of micro-credit, I think it is a great way to empower the poor; but it is also important to understand the negatives of this initiative so that moving forward countries can mend the mistakes that are being conducted to make a more well rounded action plan. This blog entry provides those negatives to work towards betterment, and not to discredit this initiative.

Works Cited :

[1] http://www.theguardian.com/global-development-professionals-network/2013/nov/19/microcredit-south-africa-loans-disaster

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What role would social enterprise play if the United Nations itself could provide as much financial support needed by developing countries ? This is the question I hope to answer through this blog entry.

The United Nations works towards fostering international development through its numerous member agencies. It works towards uplifting poor or backward nations socially, economically and politically. Now if the United Nations were fully funded you would think that development for these poor countries would be so much easier because they would now have the financial backing to move out of poverty. The situation however is a bit more complicated. Take Africa for example, more than 500 billion dollars of foreign aid was provided to the region between 1967 and 1990 [1]. That is an enormous amount of money and still the continent remains among the poorest of areas in the world. Why? the answer to that question is, aid is helpful only if its process of distribution is streamlined and controlled. The number one problem in all developing countries is corruption, when money pours into the country it first reaches the pockets of the powerful, and finally the small remainder trickles down to the people who actually need it. Another problem is citizens of poor countries do not know how to make use of the money they have received simply because they are uneducated. We need arc initiatives and social enterprise to not only control this process of money distribution but to also educate people about their financial prospects. When Fitih Tesfaye visited the Sauder School of Business Arc Initiative she discovered a market within the  food industry she could enter, to expand her small food business. This is why we need such programs, the United Nations is a very large body it can provide the groundwork for improvement but the job of actually setting the processes into motion lies with the hands of these programs.

To conclude, even if the United Nations were fully funded we would still require Social Enterprise to provide the platform for the poor to harness their talents and financial prospects.

Works Cited:

[1] http://www.cato.org/publications/economic-development-bulletin/african-perspectives-aid-foreign-assistance-will-not-pull-africa-out-poverty

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Being from a developing country myself, where the rights of people are put second to the firms objective of gaining profits, Crispin’s blog titled ” Business is about the people” caught my eye. He brings forth the importance of sustainable development and how it is a firms obligation to conduct business in socially ethical ways.

In his blog he presents an example of Starbucks who offer fair trade coffee to University Students, and how this educates the youth to develop into individuals who care for society. After reading his blog, one concept that struck me immediately was that of “The Triple Bottom Line”. Triple Bottom line is an accounting framework that includes “environmental and social dimensions” [1] It links the performance of a business to the three P’s of Profits, People and Planet. [2]. What that means is businesses through the use of this concept should function in a way that “people” and the”planet” are not compromised in an effort to raise”profits”; all these three dimensions should move parallel to one an another.

Crispin in his blog concludes that businesses need to be more than “profit maximisers”. The solution to that I believe is by using this concept of the triple bottom line. Firms will look to maximise profits, which is fine because that is the primary objective of a company. The future however is where firms can maximise their profits while also being socially ethical. It is tough but it is the only option, because those firms who continue to exploit the environment for the sake of profits might cut costs but will be driven out due to negative customer perception. You’ve got to to remember the “customer is always right” and his needs must be put in front of everything else.

Works Cited:

[1] http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

[2] http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html

In today’s day and age Digital Video has become one of the most important mediums through which companies market their products. However there are many myths associated with this marketing technique. The article I read uncovers these myths and brings to light how the success rate of a marketing campaign through digital video can be improved. I today will focus on four of the myths highlighted by Nicole Fallon, the writer of “5 Ways Marketers Get Digital Video Wrong”

Myth No 1: Marketers believe that view count is the only metric that matters :  Everyone is fixated on finding ways to make a video go “viral” , however this is only a part of the story. What really matters is what change your video is driving? are people visiting your site after watching your video? Are they  finding out more about your brand? Only when these questions are answered can the true success of the campaign be measured, not by just calculating the number of views.

Myth No 2: The content is secondary as long as the video looks good : Matt Heimen, Co- founder and CEO of online video production company, says “Content is first and most important” [1]. There are a million products being sold out in the market. The only way you will convince people to buy your product from among the plethora of others is by telling them what’s different about it, you need to educate them about your value proposition and not just focus on making a “nice looking” video.

Myth No 3: The annotations in a video do not matter:  The annotations can play a huge role in increasing sales. By adding a link to your website at the side of the video you will make it easier for the customer to get access to your product (Heimen). Immediate action is crucial in the business of sales and annotations can provide that.

Myth No 4: Marketing online should be similar to the method used to market on television: When advertising through channels such as youtube companies need to make the advertising process more engaging. They have more time on youtube than they do on television and they therefore should take advantage of this. Lisa green, head of industry for fashion and luxury at Google says using the medium of digital video companies can have a “conversation” with their customers as opposed to just sending “a one way message.”

If companies can do away with these myths the success of their marketing campaign can certainly be improved.

Works Cited:

[1] http://www.businessnewsdaily.com/7422-video-marketing-myths.html

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Robert Cialdini’s, “Influence: The Psychology of Persuasion” has changed the methods of online marketing. For those of you who have not read this book; it talks about the psychology of why people say yes and about the principles of persuasion. Businesses have now begun to incorporate these principles within their marketing approach in an effort to raise sales.

Anand Kansal’s blog focusses on how Cialdini’s principles and A/B testing methods help improve the sales of a company, in an attempt to raise revenue.

Today, I will talk about the top four principles highlighted in Anand Kansal’s blog which in my opinion can help catapult company sales.

The first principle highlighted by Cialdini is Reciprocity. This method focusses on the value of giving back to the customer. For example by giving away free samples, the customer feels his contribution to the company has been acknowledged and thereby increases customer loyalty.

The second principle is Social Proof. It is human nature for people to follow what others do. Businesses take advantage of this behaviour by showing the customer on their websites what other people are buying, or what’s “cool”. By creating this sort of bandwagon effect people follow others and go ahead and buy the product; raising sales.

The third principle is Scarcity. Salesman are sure to say at the end of their pitch that the discounts will last only for a “limited period of time”. By creating this sense of urgency within the customer they are instigated to take action quicker because it is human nature to consume something if its limited, even if they don’t have much need for it.

The fourth principle is Liking. Customers are more likely to buy your product if they can relate to the person selling it. Its for this reason a makeup brand would most probably ask a top female celebrity to endorse for them as opposed to say a sportsperson. The point is create a persona around your product that people will like and connect to.

The above four of Cialdini’s principles I think are great ways for  businesses to shift public opinion in favour of their product, and work towards raising their sales and company revenues.