Image taken from here.

McDonald’s sales has seen significant decrease in the past year; in her blog, Latasha Ellis-Cobb expressed her views on the failing fast food giant. She concluded three main reasons behind the drop in sales, in which I agree for the most part. I would like to add to or contradict her opinions on this issue, for it is interesting to analyze a brand that I am familiar with since the age of five.

1. The competition is doing it better

McDonald’s customer service has slipped up, while its competition, an example given by Ellis-Cobb was Chick-fil-A, is providing excellent services while emphasizing on community engagement. McDonald’s urgently needs to evaluate its employees’ and managers’ performance, and devise strategies to achieve higher customer satisfaction level. My suggestion is to have a feedback box in each store where customers can conveniently submit feedbacks. This will save customers’ time and trouble to find the feedback page online, as well as give managers up to date pointers.

2. They lost their ingenuity

I don’t really agree with Ellis-Cobb on this. I believe that as long as my meal’s quality is not compromised, McDonald’s wide range of varieties actually saves me the time to run down different stores to get what I want. Although other players in the food industry might be angry at McDonald’s for ripping off their formulas, as a consumer, I don’t mind much.

3. Bad reaction to bad PR

Indeed the public relations of McDonald’s has had a nightmare “from Morgan Spurlock’sSuper Size Me to America’s war on childhood obesity to the video of Chinese food suppliers using unsanitary practices.” As if this year has not been troublesome enough for the fast food giant, the firm now “appears to be caught in the economic crossfire between Moscow and Washington.” I don’t really have any insights to share on PR, but oh boy, did McDonald’s have a tough year or what.

With the trend of healthy eating gaining more momentum, I don’t think it is unreasonable to see a gradual decline in the sales of fast food industry. However, the problem at hand that McDonald’s needs to deal with is the quality of customer service and its public relations.

Works Cited

Ellis-Cobb, Latasha. “The Reason McDonald’s Is Failing.” World’s Largest Professional Network. 10 Nov. 2014. Web. 11 Nov. 2014. <https://www.linkedin.com/pulse/article/20141110132214-347432522-the-reason-mcdonald-s-is-failing?trk=tod-posts-post1-ptlt>.

Matlack, Carol. “Putin’s Latest Target: More Than 200 Russian McDonald’s.” Bloomberg Business Week. Bloomberg, 20 Oct. 2014. Web. 11 Nov. 2014. <http://www.businessweek.com/articles/2014-10-20/putins-latest-target-more-than-200-russian-mcdonalds>.

Yeomans, Matthew. “#FAIL: Authenticity Is the Key to Avoiding Social Media Screw-ups.” #FAIL: Authenticity Is the Key to Avoiding Social Media Screw-ups. Guardian, 8 Mar. 2012. Web. 11 Nov. 2014. <http://www.theguardian.com/sustainable-business/authenticity-social-media-sustainability-communications>.

The UN and Arc/social enterprise are both working toward the same goal: improve society fundamentally. Nevertheless, even if the UN is fully funded, we would still need Arc/social enterprise because the key to economic and social efficiency is deeply rooted in communities, in which UN needs private enterprises’ help to tackle the issues.

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United Nations Development Programme (UNDP) “recognizes that achieving the Millennium Development Goals (MDGs) depends on vibrant economic growth, driven by private enterprises that create jobs and provide goods and services for the poor, as well as generate tax revenues to finance essential social and economic infrastructure.” The UN realizes that in order to truly improve the living standard of society in developing nations, outside power is required to work along with its force. Just like sugar poured into a pot of water won’t dissolve on its own, the money and effort the UN puts into development programs also need private sector partners to become fully functional.

Arc or social enterprise is but a branch of private sectors; however, unlike most of other private enterprises, Arc/social enterprise create social and economic benefits in the communities they reach out to while creating values for their own. The initiatives started by the UN often is a unilateral aid, whereas Arc/social enterprise enjoys a two-way exchange in areas of economic profits and knowledge. If helping others in the community also generate gains (income, knowledge, etc.) for yourself, then what is there to keep you from not doing your business?

Image taken from here.

The UN seeks “private companies that share [their] commitment to change” the issues, and out of the private companies, social enterprises are the best ones to work with because of the mutually beneficial nature of their business model. Arc Initiative works toward improving business efficiency at the local level, which also creates values toward the fundamental goal. Therefore, even if the UN is fully funded, Arc/social enterprise would still be needed.

Works Cited

Hawley, Alex. “Alex Hawley’s Blog.” Alex Hawleys Blog. 16 Nov. 2012. Web. 10 Nov. 2014. <https://blogs.ubc.ca/alexhawley/2012/11/>.

“Sauder School of Business.” The Arc Initiative. Web. 10 Nov. 2014. <http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative>.

Sauvage, Jerome. “Our Perspective.” 2014. 4 Nov. 2014. Web. 10 Nov. 2014.

“What Is Social Entrepreneurship?” Skoll World Forum on Social Entrepreneurship. Web. 10 Nov. 2014. <http://skollworldforum.org/about/what-is-social-entrepreneurship/>.

“Business.un.org.” Business.un.org. Web. 10 Nov. 2014. <http://business.un.org/en/entities/3>.

The world’s second largest fashion retailer, H&M made a difficult decision: its price is not to be raised even though the company is facing rising costs because of increased price of organic cotton, higher wages for garment workers overseas, and budget assigned to ensure safe working conditions in factories.  Although this compromise will lower H&M’s profit margin, I believe that the company has made the right decision for the following reasons:

1)      Understand customer segments

H&M employs a cost leadership strategy that appeals to customers who don’t want to spend a lot of money on clothing, yet want to be fashionable. If the company responds to the rising costs with rising price tags, it is highly likely that the new prices will drive away customers.

Image taken from here

2)      Align with value proposition

H&M’s value proposition revolves around offering low prices and good quality. Thus, prices should not be tampered with. H&M cannot afford to increase its price the same way that Michael Kors cannot afford to cut its price. MK believes that it is competing with LV, Prada, Gucci, and therefore, as a luxury brand it refuses to “take a promotional posture.”  Similarly, in order to “stay competitive in a competitive industry,” the best alternative H&M can undertake here is to embrace the status quo.

3)      Create positive brand image

The unconventional decision H&M made in order to deliver the same quality of apparels at the same price to its customers while dealing with increased costs internally will garner positive comments to the brand name.  In the long term, the money that H&M invests in improving working conditions will pay off as more consumers become conscious in such issues. In other words, more consumers will turn to H&M because of the corporate social responsibility associated with the brand.

H&M’s profit margin cut is, based on my reasoning, the best way to react to the increased costs. However, because such result will surely suffer pressure from investors and analysts, I hope that the management team at H&M can withstand the pressure till their long-term plan starts to pay off.

Works Cited

Berfield, Susan. “H&M Embraces Lower Profit Margins.” Bloomberg Business Week. Bloomberg, 6 Nov. 2014. Web. 7 Nov. 2014. <http://www.businessweek.com/articles/2014-11-06/why-h-and-m-is-fine-with-lower-profit-margins>.

Stock, Kyle. “Why Michael Kors Can’t Afford to Cut Prices.” Bloomberg Business Week. Bloomberg, 4 Nov. 2014. Web. 7 Nov. 2014. <http://www.businessweek.com/articles/2014-11-04/why-michael-kors-cant-afford-to-cut-prices-to-spark-holiday-sales>.

“Why H&M Is Taking a Gamble with Online Shopping in the US.” Why H&M Is Taking a Gamble with Online Shopping in the US. 2 Aug. 2013. Web. 7 Nov. 2014. <http://blog.brandid.com/bid/324159/Why-H-M-is-Taking-a-Gamble-with-Online-Shopping-in-the-US>.

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I was thrilled to find out that Amazon Canada is bringing same-day delivery service to Vancouver…and then disheartened to know that the North Shore is excluded. Nevertheless, it is a unique service that will appeal to a niche market, such as holiday gift shoppers. My only concern with this service is its price tag: the convenience of receiving one’s order in a flash of hours comes with a hefty fee of $11.99 per shipment and an additional $1.99 per item for non-subscribers.

Although this feature—unique in Canada at the moment—will attract a small segment of the market, I think what can really give Amazon a competitive advantage over its competitors in the long run is to develop a courier department dedicated to shipping packages to customers across the densely populated cities of Canada. After all, it is really difficult to find a Canadian who is perfectly content with Canada Post. A courier service system dedicated to deliver Amazon packages will

1)      Expedite the shipping process, which will increase customer’s level of satisfaction because of shortened wait.

2)      Eliminate third-party involvement for the delivery phase of each transaction. It is easier to manage internally, meaning that Amazon will be able to provide its customers with more accurate and timely parcel tracking data.

3)      Give Amazon a real life presence. As Roger Hardy, the CEO of Clearly Contacts, has pointed out, “brick and mortar stores can complement web presence.” Though the department is not technically a store, it can definitely serve as the face of Amazon, through which Amazon can better receive feedback from its customers.

All points mentioned above work toward increasing customer loyalty, which translates into more sales. Indeed the creation of a courier department is costly; however, I believe that the benefits customers can expect from such dedicated service will encourage them to choose Amazon over its competitors, such as Walmart, when it comes to purchasing online. The additional revenue generated will eventually exceeds the cost of maintaining a courier department. In fact, Amazon China has already adopted this system. As a result, it has managed to be profitable, even in the competitive Chinese e-commerce market that is dominated by Alibaba.

Works Cited

Beauchamp, Mike. “Amazon Adds New Same Day Delivery Markets, Now Serves 12 Cities With Local Express Delivery.” ZAGG. 7 May 2014. Web. 6 Nov. 2014. <http://www.zagg.com/community/blog/amazon-same-day-local-express-delivery/>.

Lus, Steve. “Amazon Canada Same Day Delivery Coming to Vancouver, Toronto – British Columbia – CBC News.” CBCnews. CBC/Radio Canada, 5 Nov. 2014. Web. 6 Nov. 2014. <http://www.cbc.ca/news/canada/british-columbia/amazon-canada-same-day-delivery-coming-to-vancouver-toronto-1.2824898>.

Stastna, Kazi. “CBC News – Amazon Expansion Could Be Just What Canada’s E-commerce Sector Needs.” CBCnews. CBC/Radio Canada, 8 Apr. 2014. Web. 6 Nov. 2014. <http://www.cbc.ca/m/touch/news/story/1.2595939>.

As employees are often referred to as the greatest asset of a business, human resources management is key to a company’s success. Every company employs a different strategy in terms of allocating its spending, and in Costco’s case, a lot of money goes into wages.

My fellow classmate, Carol has discussed the benefits that Costco reaped from such practice in her blog. In summary, by paying its employees almost twice the market rate, Costco created “true engagement among [its] employees,” which led to “increased productivity, better morale, and lower turnover rates.” She also pointed out the adverse effects of high turnover rates, stating that Costco has “established an incentive program where the return on investment has been worthwhile.”

I strongly agree with her on all of her points, except for the last one, in which she said that “companies wanting to improve their bottom line should look to incorporate sections from Costco’s business model.” There is no single formula for successful HR practices, and I believe that HR strategies are highly industry, or even firm, dependent. Paying high wages works well for Costco partially because they attract high-skilled workers who, of course, would rather work for a better pay. But what if the industry standard wage is not as clear as the one in retailing industry? Even within the same industry, different firms employs different positioning, marketing, and financial strategies. Not necessarily following Costco’s path, I think what the HR department needs to do is to find a strategy that works best with other practices that the firm is carrying out, whether it be increasing wages and benefits or spending more on training, etc.

Image taken from here.

Works Cited

Campeau, Melissa. “‘A Stick and a Carrot at the Same Time’: Why Costco Pays Twice the Market Rate.”Financial Post Business A Stick and a Carrot at the Same Time Why Costco Pays Twice the Marketrate Comments. 30 Oct. 2014. Web. 31 Oct. 2014. <http://business.financialpost.com/2014/10/30/a-stick-and-a-carrot-at-the-same-time-why-costco-pays-twice-the-market-rate/>.

Lee, Carolyn. “Carolyn Lee’s Blog.” Carolyn Lee’s Blog. Web. 12 Nov. 2014. <https://blogs.ubc.ca/carolynlee/>.

Slovacek, Randy. “Costco CEO Craig Jelinek on Paying a Living Wage.” The Randy Report. 11 July 2013. Web. 31 Oct. 2014. <http://randyreport.blogspot.ca/2013/07/costco-ceo-craig-jelinek-on-paying.html>.

YouTube has significantly influenced the younger generations, especially teens in North America. I refer to YouTube as a wormhole—one click to the videos and the next thing you know is that hours have passed by. Aside from being a time sucker though, YouTube has coined an entirely new job title: YouTuber. Among them is Lauren Riihimaki, a 21-year-old undergraduate student whose channel LaurDIY now has over a million subscribers and is making six-figure revenue per year. Although she claims that she does not “have a business plan, finance strategy, or anything intense,” she does, unknowingly, have a solid marketing strategy.

Image taken from here.

After Class 18, I had the opportunity to ask Paul Davidescu, the Co-founder and CEO of Tangoo, how he markets the app. His response was revolved around digital marketing: the effective use of social media, website and blog is the key in marketing tech start-ups. YouTube channel is not exactly a tech start-up, but is similar in that most traffics are online. Ms. Riihimaki promotes her videos through all three of the aforementioned tools; as a result, she has witnessed organic growth of her subscriber base.

List of Social Media Lauren maintains by herself

Image taken from here.

Though not necessarily has a background in business, Ms. Riihimaki displays many characteristics and qualities that take to be a successful entrepreneur. She loves what she is doing, she knows how to manage her time, and she is actively engaged with her viewers on a numbers of platforms. I agree with Ms. Riihimaki that LaurDIY will continue to grow, and my only recommendation to her would be to have a well-outlined financial plan so that she can readily respond to any change in the industry.

Works Cited

Israelson, David. “Student Fashions Herself into a YouTube Star.” The Globe and Mail. Web. 31 Oct. 2014. <http://www.theglobeandmail.com/report-on-business/small-business/sb-tools/student-fashions-herself-into-a-youtube-star/article21370807/>.

Riihimaki, Lauren. “LaurDIY.” YouTube. YouTube. Web. 31 Oct. 2014. <https://www.youtube.com/user/LaurDIY>.

Riihimaki, Lauren. “LaurDIY.” LaurDIY RSS. Web. 31 Oct. 2014. <http://www.desireandinspire.com/>.

Jimmy Choo Quiet Lace Platform Pump that costs $625

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Last month, Jimmy Choo, a luxury shoe brand, has announced its plan to go public later the year, which will make it the “very first luxury shoe to make an IPO move.” As Nodoka pointed out in her blog post, such move is a risky one because there is a potential to lose some customers who won’t buy these shoes anymore when brand becomes less exclusive. However, I think the benefits of going public override the potential disadvantages, for the following reasons:

1. More Financial Inputs Available

Because of the nature of the brand, Jimmy Choo has many inventories, which translates to relatively less cash flow. IPO and further stock exchanges will help Jimmy Choo to achieve financial goals, meaning more “oxygen” for the business to operate with. In addition, more financial inputs, along with the exposure Jimmy Choo gets with the IPO, may “attract more talented designers, thus enhancing the brand.”

2. Going Public ≠ Losing Most of Loyal Customers

Since when did “overexposure” become a problem when it comes to marketing? And it is not like Jimmy Choo is bombarding consumers’ minds with annoying ads. Indeed more stores and publicity might shun high-end customers who prefer the brand to be exclusive; however, these customers are but a small percentage of the population who have the purchasing power to afford a pair of Jimmy Choo shoes. If taking into account how many new customers the brand can draw with its new publicity, the loss of sales from these high-end shoppers shouldn’t be a concern huge enough to interrupt the decision of going public.

I think that, in the short run, Jimmy Choo will get more cash to operate with while not experiencing the downsides of overexposure (if any), and in the long run, its customer segments will gradually shift to include more people, which translates to more sales.  Either way, their IPO will bring more advantages than disadvantages. It may seem have risks, but these risks are definitely worth taking.

Works Cited

Hashimoto, Nodoka. “Nodoka Hashimoto’s Blog.” Nodoka Hashimotos Blog. N.p., n.d. Web. 5 Oct. 2014. <https://blogs.ubc.ca/nodokahashimoto/>.

Hill, Catey. “Jimmy Choo’s IPO could make the shoes less chic.” – MarketWatch. N.p., n.d. Web. 5 Oct. 2014. <http://www.marketwatch.com/story/will-jimmy-choos-ipo-make-the-shoes-less-chic-2014-09-23>.

“Jimmy Choo.” Polyvore. N.p., n.d. Web. 5 Oct. 2014. <http://www.polyvore.com/jimmy_choo/collection?id=3869617>.

Taseko Mining Ltd. faces a serious threat when the Supreme Court of Canada ruled Tsilhqot’in people to be entitled to the land of the proposed tribal park, which included Taseko’s mining site at New Prosperity. This new regulation would hinder Taseko’s development tremendously.

Unable to predict this critical regulatory trend, Taseko now has to deal with this 1.1 billion dollar investment sitting around idle. Tsilhqot’in people’s adamant opposition against gold-copper mining pushed Taseko toward nowhere but the cliff that leads to huge financial loss. Such corporate failure is closely linked to its incapability of identifying possible change in external factor and business’s constraint before making the investment. Had Taseko acknowledged the unwillingness and dismissal of their First Nations partners regarding the project, Taseko might have made a different decision.

This situation that Taseko now awkwardly finds itself in also exemplifies the uncertainty that managerial accounting cannot foresee: the New Prosperity project was portrayed as the expected “game changer,” as highlighted in the Taseko Fact Sheet 2012.  The said “growth potential” and expected production now seem nothing but ironic. Not only that, this “one of the largest gold-copper porphyries in the world” is now an inventory that is not generating any profit. Without a decent amount of cash flow, Taseko will encounter operation problems that eventually can lead to more deadly consequences.

The solutions to fix this catastrophe are hard to execute because of the multitudes of challenges Taseko faces: First Nations are unlikely to compromise their hard-won rights, and there are also environmental issues that Taseko hasn’t dealt with in the federal level. The solution in the short run, I think, is to measure the value of doing what is allowed on the land; if it is profitable, then Taseko should make use of the land first while negotiating with the external parties. 

Fish Lake Fightback in Court

Image taken from here.

Work Cited

Bush, Murray. “Fish Lake Fightback in Court | Vancouver Media Co-op.” Vancouver Media Co-op. N.p., n.d. Web. 3       Oct. 2014. <http://vancouver.mediacoop.ca/photo/fish-lake-fight-back-court/9174>.

Pynn, Larry. “Tsilhqot’in set to declare site of New Prosperity mine a tribal park.” www.vancouversun.com. N.p., n.d. Web. 3 Oct. 2014. <http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html>.

“Taseko Fact Sheet.” Taseko Mines Ltd.. N.p., n.d. Web. 3 Oct. 2014. <http://www.tasekomines.com/i/media/mce/factsheet/Taseko_Fact_Sheet.pdf>.

Online Retail Platforms under Alibaba Group

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As a regular and loyal customer at Taobao.com, I am not surprised at all to see Alibaba Group’s success. Its dominance in Chinese e-commerce is undeniable: Taobao or Tmall is “the first online stop for many shoppers in China,” according to Steve Schaefer’s article, which I can also attest to. Despite the rapidly growing amount of new entrants in the competition, Alibaba’s dominant position is highly unlikely to change, and here are two main reasons why:

1. Positioning

Taobao’s innovative business model was truly a first in the fledgling Chinese e-commerce market. The stories of store owners who reaped the benefits of having an online shop motivated more and more people to start their business on Taobao, which in turn contributed to attracting more customers as the variety of products available increased. Seeing it offering a broad market, most entrepreneurs would choose Taobao to launch their business. Other platforms simply cannot enter the success cycle that Alibaba leads. As Ries and Trout would put it, Alibaba has won the battle of getting into the mind of consumers.

2. Value Proposition

While customers like myself are already immensely satisfied by the convenience online shopping offers, Alibaba is constantly developing its programs and features to provide better assistance to both consumers and sellers. Alibaba’s founder, Jack Ma, believes that “service is the most expensive product in the whole world; therefore, the best service is to not require any service.” The little need of direct service from Alibaba is indeed what consumers and sellers find when they are using the website. Further products, such as Alipay and mobile apps, are all designed to maximize convenience for customers. Such products’ success again solidify Alibaba’s leading position in the Chinese e-commerce market.

Equipped with these two competitive advantages, the e-giant of China will not dwindle unless something extremely disruptive is introduced to the market.

Work Cited

“Product Positioning.” Product Positioning. N.p., n.d. Web. 30 Sept. 2014. <http://www.quickmba.com/marketing/ries-trout/positioning/>.

Schaefer, Steve. “The Case For Alibaba: China’s E-Commerce Tollbooth.” Forbes. Forbes Magazine, n.d. Web. 30 Sept. 2014. <http://www.forbes.com/sites/steveschaefer/2014/09/29/the-case-for-alibaba-chinas-e-commerce-tollbooth/>.

“马云.” |人物时事漫画|微漫新闻网. N.p., n.d. Web. 30 Sept. 2014. <http://www.vcartoon.cn/renwu/201208013188.html>.

Generally, a company’s priority is to make as much profit as it can; however, it is tremendously important for the company to maintain an applauding business ethics.  Nestlé, a multibillion group, has indeed shown effort to contribute to its community.

A rap video, Superbaby, was released by Nestlé India as part of their “Stay Healthy Stay Healthy breastfeeding week” campaign. This successful campaign leads no monetary benefit toward the group because Nestlé products are not involved at all; it was initiated to enhance the “well-being of customers.” (Mainwaring) Although Freeman’s Stakeholder Theory borders being too idealistic, Nestlé has ultimately fulfilled one—if not more—aspect of its social responsibilities. Friedman deems such acts of companies hypocritical; I strongly disagree with his point and think that he has overlooked the benefits a company can obtain from showing good business ethics.

For Nestlé, thousands, or even millions of dollar must have been put into the “Stay Healthy Stay Healthy” campaign. But did the money spent merely raise awareness for the benefits of breastfeeding?The answer is no. From a marketing perspective, Nestlé has demonstrated an excellent ethics that cannot only gather publicity, but also possibly deduct some amount of taxes. As a result of its voluntary initiative, Nestlé is now more likely to gain favourable reputation than its rivals who do not involve in executing social responsibilities. It is then deduced that when the corporate executives are making business decisions, dedicating money to social responsibilities is a great alternative to benefit stakeholders, and at the same time, marketing the brand.

Works Cited

Mainwaring, Simon. “Nestlé© Wins At Social Storytelling By Combining Purpose And Product.” Forbes. Forbes Magazine, 9 Sept. 2014. Web. 11 Sept. 2014. <http://www.forbes.com/sites/simonmainwaring/2014/09/09/nestle-wins-at-social-storytelling-by-combining-purpose-and-product/>.

“What is Stakeholder Theory — R. Edward Freeman.” YouTube. YouTube, n.d. Web. 11 Sept. 2014. <https://www.youtube.com/embed/bIRUaLcvPe8>.

Zimmerli, Walther Ch., Klaus Richter, and Markus Holzinger. Corporate ethics and corporate governance. Berlin: Springer, 2007. Print.