Month: November 2014

The United Nations is one of the world’s most vital and powerful organization. However, due to its power and influence, it is mainly dedicated in resolving macro problems like world peace and various conflicts. For such a large organization, it is impossible for it to address many of the less pressing micro issues. I believe it is therefore necessary for social enterprises and programs like the Arc Initiative to exist even if the United Nations was fully funded.

Since larger organizations generally do not deal directly with the ones involved, their help is oftentimes small, short-lived, and rendered somewhat useless to many that need help. Oftentimes the help is provided just for the sake of doing something, and not a lot of though is put in on whether the help will be beneficial in the long run or not. Uwonkunda, a leader in the Arc Initiative program in Rwanda even mentioned that “non-profits that have donated money to Rwanda following the war [did not] make a lasting impact.” Programs like the Arc Initiative and social enterprises are powerful because they directly educates people in impoverished areas, and unlike larger organizations, the help they provide is long-lasting and useful as they are teaching skills in addition to providing help. These services have a unique and common goal of wanting to improve the future lifestyles of the people, by giving them the means of doing it themselves and not just “sponsoring” them, because that ultimately will not solve the problem. Both the United Nations and programs like the Arc and social enterprises are fundamental in creating equal opportunities around the world, it just depends on the situation to see which will provide the better aid.

References:

http://news.ubc.ca/2014/06/30/upward-arc/

Picture from: http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2013/11/19/1384876037021/social-enterprise-wordle–009.jpg

In Gaurika Sharma’s blog post, “Alibaba’s World Debut,” Sharma believes that Alibaba, a Chinese e-commerce company that aroused much attention for having the largest IPO, will be able to successfully enter the global market.

My opinions differ from Sharma’s as I do not believe that Alibaba will have a such easy time entering the global market. The main reason is due to the extremely high barriers of entry already in place. The United States, for example, already heavily relies on online retailers, like Amazon and Ebay, who basically provide the same service as Alibaba. It would hard for Alibaba to compete in the same market as these retailers who already have a great competitive advantage from being the industry for so long, providing them with a strong and loyal customer base, as well as strong partnerships with national companies (for shipping and supply). If Alibaba is offering basically the same service, I personally do not believe that consumers or product suppliers will be willing to suddenly want to change online retailers. 

This case can also be compared to when Amazon tried to enter the Chinese market. Amazon failed miserably, only attaining less than one percent of China’s huge e-commerce market, as Alibaba, being the first e-commerce company in China, already had a competitive advantage that was unchangeable.  

Amazon’s small market share in China shows that just because a large company is successful in one part of the world does not mean it will be equally successful in another. I strongly believe that the same problems Amazon faced might also apply to Alibaba’s entry in the global market.

References:

Alibaba’s World Debut

http://www.tutor2u.net/blog/index.php/business-studies/comments/alibaba-beats-amazon-to-the-e-commerce-prize-in-china

http://www.stockwatchweekly.com/wp-content/uploads/2014/09/about_alibaba_logo11.jpg

In Peter Lee’s blog post “Downfall of the McDonald’s dynasty,” Lee discusses how McDonald’s stagnant core value proposition of cheap, fast, and delicious food, is no longer working as consumers become more health conscious.

In addition to Lee’s points, I have also noticed that McDonald’s current value proposition is no longer reflective in their prices. The increase in employee wages and food prices are making it so that people are getting the same low-quality food at a now unreasonable price. The reason McDonald’s was so popular over the years was because the low quality of their food could be justifiable by its equally low prices. However, now, after the price increases, I personally would not prefer to go to McDonald’s over other fast food chains if I have to pay more than five dollars just to get a burger made with the same low-quality ingredients. If I was willing to spend that much money on food, I might as well just go to a casual-dining restaurant and pay the same price for better food made with “quality” ingredients.

In my opinion, McDonald’s seems to be undergoing a sudden “identity crises.” They are no longer focusing on cost leadership (by providing the cheapest food), nor product differentiation (by providing specialty menus). The only reason they are still doing relatively well is because they still sit at top of the perceptual positioning ladder in the consumers’ minds. However, that does not mean that their position is unchangeable. McDonald’s need to do something fast before cheap, low-quality burgers become a thing of the past. The barriers to entry in the industry are as low as ever, and their competition is gaining up on them fast.

References:

Downfall of the McDonald’s dynasty

Picture from: http://upload.wikimedia.org/wikipedia/commons/thumb/a/a9/Mcdonalds-90s-logo.svg/2000px-Mcdonalds-90s-logo.svg.png

http://www.bloomberg.com/news/2014-10-20/mcdonald-s-costly-burgers-send-diners-to-fancier-rivals.html

http://www.businessweek.com/articles/2013-10-23/mcdonald-s-new-dollar-menu-goes-up-to-5