Month: November 2012

Google Inc. has cunningly made itself famous for its generous benefits package.  A certain Forbes article discusses Google’s most recent addition to this package.  Apparently, the company will now be paying the surviving partner of a deceased employee 50% of their salary every year for 10 years.  This new benefit, in addition to others, such as “free haircuts, gourmet food [and] on-site doctors” have all earned Google a ‘caring’ reputation.

But why does Google want to be such a ‘caring’ company?  Why is any company, like the one we studied in class (Zappos), ‘caring’?  Laszlo Bock claims that the company offers these great benefits “simply because it’s the right thing to do”.  Immediately after, however, he states that employees prefer to work for a company that ‘cares’ about them.

That, alone, is an entirely different reason for improving Google’s benefits package.  By stating that employees prefer working for a ‘caring’ company, he is saying that it helps Google retain its employees and furthermore, it also helps attract more employees in the future.  When examining the benefits to Google’s ‘caring’ stance on employee policies, it is clear that its motives are not pure and selfless, but rather strategic.

After attending a few classes based on entrepreneurship, I became more interested in the field.  But should it be considered a field?  Should entrepreneurs be confined by society’s job classifications?

A blog from itbusiness.ca describes the individualistic nature of entrepreneurs, but makes a paradoxical statement.  It characterizes the active startup community in Ottawa by stating that “true entrepreneurs… forge ahead regardless of the obstacles”.  This is an ability which all entrepreneurs must have, but it is this very perseverance which does not make an active startup community necessary.  For this reason, the blog’s statement contradicts itself.

Entrepreneurs are attracted to the challenge that innovation creates and must be crazy enough to take on the immense risk that comes with these unconventional ventures.  It does not make sense for the government or even society to standardize the study of entrepreneurship and create a facilitated setting for people to learn to be norm-defying thinkers.

As it was stated in the itbusiness.ca blog, an entrepreneur is naturally tenacious and does not require the forced help of society to succeed.

According to Panos Mourdoukoutas’ article, the Apple consumer has grown accustomed to getting the most innovative and revolutionary technology, but has been recently disillusioned by the iPad Mini.  In this last quarter, Apple has recycled an old product, rather than producing new, ground-shaking technology.  Investors have reason to be worried, especially because “after a major product release”, Apple’s stock usually soars.  This new product release was a major contributing factor to the company’s stock drop, but perhaps not the most significant.

In actuality, the most prominent influence on Apple’s stock decline was the disappointing iPhone 5 sales.  In a video interview, Scott Sutherland claimed to have estimated that “over the opening weekend”, iPhone 5 sales would reach 8 million, but sales fell short at just over 5 million.  In class, Murray Carlson taught us that a stock fluctuates according to not only how well it performs, but also how it measures up to expectations.  This principle is clearly present in this instance because even though sales did not decrease from the iPhone 4S sales, the stock price dropped because of the weight of the missed estimates.  This case showed how crucial it is for a company to meet analysts’ estimates.

Yesterday’s class on sustainability seems to have stirred several of our interests.  Cathy Lee’s blog post focused on the motives behind Wal-Mart’s environmentally friendly transformation, but neglected to mention the enhanced image which Wal-Mart’s green initiatives have created for itself.  In addition to reducing its costs, legal liabilities and greenhouse emissions, Wal-Mart has managed to build competitive advantage by positioning itself as a leader in sustainability.

Customers are much more likely to buy from Wal-Mart now that they are perceived as environmentally friendly.  This green image will also encourage other companies and suppliers to do business with Wal-Mart and even encourage powerful people to invest in it.  All of this increased interest in Wal-Mart will ultimately propel the company forward – and it is all due to its new image.

The by-product that is created when companies such as Wal-Mart take the necessary steps to operate in a sustainable way is a respectable corporate image.  This is, of course, in addition to the other advantages that come from going green, but perhaps the most significant because it impacts the business as a whole and makes it much stronger in the long run.

Akanksha Kapil’s blog post about PETA’s advertisement addresses some ethical issues.  The main issue is that PETA targets children by positioning their billboards near schools.  However, it should not be a question of whether or not it is ethical, but rather an analysis of how effective a technique it is.

In this instance, one feels a sense of sympathy towards children because they are seen as vulnerable and easily impressionable people without the necessary tools to deal with such a strong message.  We could participate in a heated debate regarding the social implications of this advertisement and whether or not it is ethical, but we can all agree on the facts.

Objectively speaking, this advertisement did not break the law in any way and it is not propaganda.  If it were propaganda, it would be biased or misleading.  This advertisement is perfectly legal and does not hide anything from the audience.  In fact, it is a fantastic marketing technique because it shrewdly targets its audience through its location.  By viewing this marketing technique in an unbiased way, one can assess its great effectiveness, while disregarding whether or not it is ethical.

Several years ago, Inditex managed to catch a mistake in time and has been reaping the succeeding benefits ever since.  In class, we learned that a company’s stock value jumps up and down in accordance with the investors’ perception of the company’s strategy and how they think the company will perform in the future.

According to the press releases in the Inditex website, “Inditex opened 560 new stores, 441 [of which, were] outside Spain” in FY2007.  In the final quarter or 2006, however, Inditex reported that it had increased “the staff… that operated Inditex’s distribution centre in Zaragoza” by 30%.

The company drastically increased the international demand for its clothes, but only expanded its distribution centres in Spain.  This, in turn, cost Inditex a 54% decline in stock price between late 2007 and late 2008.  This was, by far, the greatest slump that Inditex felt in its existence, but the company developed a much stronger strategy from it.  Inditex formed a new way of producing clothing in which rather than spreading itself too thin, it reduced distribution costs by building its distribution centres close to its consumers.  This is a strategy which they later shrewdly applied to Zara.