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.

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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>.