elyssa

Emily Chen’s blog post about The Starbucks Experience really got me thinking about the ingenuity behind its branding. They serve pricier coffee than most coffeehouses, but why do they still appeal to so many people? And why are the line-ups at the SUB’s Starbucks almost comparable to that of the Tim Horton’s at Sauder despite the latter having their drinks so much cheaper?

One word: marketing!

Of course, Starbucks ensures customers with premium coffee beans and quality ingredients. However, I believe it’s their marketing that sets it apart from other coffee brands.

Step inside any Starbucks outlet and you’ll immediately feel this aura of classiness (…no?). The smell of fragrant coffee wrafting in the air, the feeling of home when you see the amount of wood used in its interior design and their awesome playlist with handpicked indie music. Oh, not forgetting the sophisticated-sounding coffee names that make you sound a tad classier after managing to pronounce it right. 🙂

And did you know that there’s a clever concept behind their round tables too? Apparently, round tables are more inviting as there are no edges, so there aren’t any restrictions to how many people can fit around the table. The more the merrier, and cosier 🙂 However, it works both ways too. Round tables make people feel less alone too, especially for students who prefer to study in solitude.

It is no wonder why people would still make Starbucks their first choice despite so many cheaper alternatives out there. I am no exception, and as I’m typing this, it is no surprise that I’m sipping on a grande Pumpkin Spice Latte. 🙂

On the topic of social entrepreneurs, I’d like to share the story about Blake Mycoskie, otherwise known as the founder of TOMS, and how he came up with the one-for-one idea. (Fun fact: did you know that Blake was a contestant in The Amazing Race before he started with TOMS?)

Blake travelled to Argentina in 2006 to do some community service work among other things like playing polo and learning tango. During his time there, he was hit with the realization that many kids did not have proper footwear. Hence, he decided to create  TOMS based on traditional Argentine alpargataa slip-on—in lightweight fabrics and vibrant colors and prints. With every purchase of a pair of TOMS, another pair will be donated to a child in need.

I think this is a pretty effective business model. Not only is TOMS one of the world’s most successful footwear retailers, more importantly, the method of helping the needy is effective too, unlike traditional donations that may or may not even reach the actual people in need due to the lack of transparency and bureaucracies.

Personally, I love the idea of social enterprises. They’re run by people with a genuine heart who want to make a change in society, starting up a social cause that happens to work exceptionally well as a business, as opposed to a business that happens to have a social cause. 🙂

It’s getting late and I’ve to churn out one last blog post…and all I’m thinking of right now is CHOCOLATE (for some reason unbeknownst to me). So, I shall proceed to blog about chocolate. Or rather, the chocolate industry and I’m going to apply Porter’s 5 Forces to see if it’s profitable for another (hypothetical) chocolate brand to break into the industry.

My new brand of chocolate will be in the form of a chocolate bar. It’s insides will be filled with Nutella, marshmallows, gummy bears and all things sweet. 😉

Barriers to entry are pretty high, because a lot of capital will be needed to start up a well-equipped factory, pay the workers, buy the ingredients etc. Also, brand identity may be an issue because people might be skeptical about this new brand of chocolate and might rather stick to conventional Cadbury or Hershey -.-

Threat of substitutes is pretty low since there aren’t chocolate bars with such fillings around yet. Hence, it’s not very substitutable. But then again, we’re talking about perfect substitutes. If we’re referring to close substitutes, then many other types of chocolate bars would serve as substitutes too.

Supplier power is high because the cost of ingredients are not particularly exorbitant, nor are they rare minerals. Buyer power is questionable, because on one hand, it’s a rather unique flavor, but will it be differentiated enough for the masses to purchase it? Rivalry is rather high as well, because of the large number of chocolate brands involved in the market and also high startup costs.

In conclusion, my analysis shows that…the chocolate industry isn’t attractive enough for my (hypothetical) chocolate brand to move into. Barriers to entry are high, chocolate bars are easily substitutable due to the numerous brands around, buyer power is low since my brand of chocolate bar is admittedly not differentiated enough from other brands and rivalry is high too. Okay, guess my chocolate business won’t be working out anytime in the near future until I think of a better plan. Till then…

Facebook’s recent IPO and declining stock prices has caused much spark in the financial sector. Is this indicate of Facebook’s growth rate in the future?

Firstly, what’s IPO?

 Initial Public Offering (IPO): The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.

(http://www.investopedia.com/terms/i/ipo.asp#axzz27jvgHQ4Y)

With over 800 MILLION active users, Facebook is one of the BIGGEST companies in the world right now and people would have expected its IPO to be SKY HIGH. This generated excessive hype over it, causing an over-estimated stock price. Another main reason could be the lack of advertisements on the mobile site. Due to the rampant use of smartphones, this could affect the company’s revenue quite significantly.

How’s the future like for Facebook?

Actually, I do not think the low IPO is indicative of anything. I mean, sure, if you compare it with Google’s, this is peanuts. However, bear in mind that Google was a relatively young company then when it filed for its IPO, compared to Facebook, which is at a more mature stage of the growth cycle. Hence, its growth is not as exponential as before.

Finally, with Facebook claiming nearly three-quarters of everything using the Internet, it’s hard for it’s growth rate to NOT take a dip. It’s not possible (mathematically) to keep up with the growth rates if there’s no one else left to join in the fun.

So don’t worry, Facebook isn’t going anywhere. It sure isn’t going to follow the footsteps of Friendster or Myspace anytime soon… 🙂

(Reference from External Article: http://search.proquest.com/docview/1013524060?accountid=14656)