Month: October 2012

In response to @Joey Tung’s Post:

In her post, Joey stated her thoughts toward a news article this August: Becoming Green, a Welsh call centre, had brought in cheap prison labour – paying its prisoner workers for only £3 a day [1]. This in term relates to the issue of Business Ethics in which certain companies act in their own interest to take advantage over vulnerable people: the prisoners. By hiring cheap labour into the workforce, Becoming Green had also laid off some of its original workers who required higher wages [2].

Although from short term perspective, the company seemed to have gained some advantage as this had reduced some variable wages cost for the company. Yet, judging from long term, this may not be the best approach for several reasons:

1. The company’s actions might disturb its own workforce and stir up disloyalty and complaints within the organization by replacing their workers with cheap labour[3]. The fact that prisoners of various crimes are taken in to work alongside others will create distrust and insecurity; therefore, leading to employees’ unwillingness to go to work.

2. As well, the company’s image would be threatened with immoral issues and thus leading to decrease of customers. Regular callers would also feel insecure because they would not know if they can trust  the people they are calling.

For these reasons, the company’s actions would start to decline in long term, despite temporary advantage.

Sources:

[1]http://www.guardian.co.uk/society/2012/aug/08/prisoners-call-centre-fired-staff

[2]http://boingboing.net/2012/08/08/call-centre-brings-in-prison-l.html

[3]http://www.bbc.co.uk/news/uk-wales-19184054

Image Source:

http://www.becominggreen.co/

In class 15, I had the opportunity of studying the Supply Chain Management of Zara, which I find very fascinating. Zara’s constant success and industry expansion over these few years had been mainly the result of excellent supply chain operation. Being in the fashion industry where customer preferences are constantly changing, the business is all about reducing response time.

Zara’s strategies for always producing fresh fashion [1]:

(1) Short Lead Time – keeping up with fashion

Short lead time allows Zara to operate from identifying a trend to selling the items in stores within merely 30 days, beating all its competitors – while most retailers forecast what/how much customers might buy, Zara moves along with its customers. Catching fashion at its hottest time will gain better margins for more prices at full price and no discounts!

(2)Provide lower quanlity  – provide scarce supply

By lowering quantities of each product line, Zara can create scarcity that will drive the price high and keeping its customers on the verge of buying as soon as the clothing are in stock. As well, it would also reduce risks of losing great amount of sales if the trend is unsuccessful.

(3)More styles – various choices, meaning that there will be more chances of hitting the right trend

Instead of providing more quantities per style, Zara provides more styles with lower quantity. It has more styles and variations than most of its competitors.

Supply chain is an area of study that I am quite interested in. The success of Zara’s strategy gave me many insights in creating a successful operation management system.

Article Source:

[1] http://thirdeyesight.in/articles/ImagesFashion_Zara_Part_I.pdf

Image Source:

http://4.bp.blogspot.com/_4P9lCNJFkls/TPjPTiPvGAI/AAAAAAAADb0/mRTeYNZ7t5Q/s1600/zara+kerst+2010.jpg

In response to @tobykwan’s post:

The article stated the unethical termination of contract by Air Canada toward Aveos, its maintenance repair division. In March, Air Canada had terminated the contract with Aveos before the agreed date, and since AC made up 85% of the company’s revenue, Aveos was forced into bankruptcy [1]. As a result, 1,800 employees were put out of work almost overnight; thus sparking protests outside Aveos buildings in Montreal and Vancouver [2].

In her post, Toby stated the importance of trust between two businesses as it can affect the reputation of the company in the business world. In addition to her statement, I want to further point out: Besides influencing the external image of the company, a broken trust  may also stir up the company’s internal organization and function. AC’s contract termination toward Aveos may create insecurity inside AC’s own employees. Knowing that their own company had just laid off workers from its partner company with no compensation, how can AC’s employees ensure that they won’t be laid off as well any time soon? Hence, this incident can influence AC’s employee loyalty and their working attitude, which may even lead to a long term misguidance of the company’s internal values and goals. Thus, trust must be handled with precaution and care both internally and externally by any company.

Image source:

http://www.thestar.com/business/article/1148528%E2%80%93air-canada-hits-more-turbulence-as-plane-maintenance-company-aveos-files-for-bankruptcy

Sources:

[1] https://blogs.ubc.ca/tobykwan/2012/09/11/aveos-shutdown/

[2]http://www.thestar.com/business/article/1148528%E2%80%93air-canada-hits-more-turbulence-as-plane-maintenance-company-aveos-files-for-bankruptcy

I had the wonderful opportunity of reading this book during the summer, which completely blew my mind. In the book, Daniel H. Pink outlined the idea that our world is slowly leaving the Information Age: era of “left brain” dominance,  and is heading towards the Conceptual Age: an era of “right brainers” where creators and empathizers will be the new leaders in business [1]. Pink refers to the 3 trending A’s of the business/economy in the future : Abundance(Is what I’m offering in demand?), Automotive(Can a computer do it faster?), and Asia (Can someone overseas do it cheaper?)[2].

When those three questions are present, creativity and empathy (jobs including the use of right-brain) now become the competitive difference to differentiate  individuals in the competitive business world.  This new concept will soon change the model of how business function as a whole: marketing strategies, business plans, and even consumer targets would all be completely different in the next decade. This book provided me an insight of the direction my generation is heading, as well as many opportunities/ choices  that are available for me to explore in the future. I feel both anxious and excited of entering this new era with numerous possibilities awaiting me.

Image source:

http://www.danpink.com/whole-new-mind

Source:

[1] http://www.danpink.com/whole-new-mind

[2] http://en.wikipedia.org/wiki/A_Whole_New_Mind

Have you ever wondered if advertisements on social networks can affect our consumer behaviour? After the lecture in Comm about Marketing, I did a quick research on Facebook advertisements, and found some interesting results:

Recently comScore, a consulting company, is hired by Facebook to measure its advertising effectiveness, in which they performed primary, and quantitative research, showing that paid advertisements on Facebook do influence consumer behaviours and attitudes toward certain products/brands [1]. For instance, in the case of Target, comScore studied two groups of users: one group is made up of fans of the Target page and their friends (where they will all see Target messages on their news feeds), and another group of those who are not fans of Target and their friends (where they will not see any messages). The result showed that 19% of the Target fans were more likely to buy goods at Target, while their friends were 27% more likely.

I find it interesting that the friends of those who become fans of Target are in fact, more likely to purchase at Target compared to the fans themselves (27% and 19%). One of the factors contributing to this result may be of social influence from family and peers: Those who see their own friends liking/buying from Target may be more motivated to buy at Target themselves as people tend to follow others’ footsteps, as well as gaining the reassurance that others also purchase from the same store.

Image Source:

http://socialmediamagic.com/blog/images/facebook-advertising.png

Sources:

[1]http://business.financialpost.com/2012/06/12/facebook-ads-influence-consumer-behaviour-comscore-report-says/