Based on the blog post by MacLean’s Business Blog “WestJet bound for Europe”, I found out that the firm WestJet based in Calgary is going to introduce in the summer of 2014 its flight to Dublin. It will be their first time to cross the Atlantic. This will give their customers the opportunity of finding cheap connecting flights to European countries. The only other Canadian airline to do so is AirCanada, how will this affect their sales?

By AirCanada being the only other airline that flies to Europe, the introduction of another airline flying to Europe will mean that they will have another competitor and therefore their prices will be more competitive. Customers will now have the option of choosing between the two airlines and I believe they will base their decision on who has the lowest prices. Before, AirCanada had the freedom to establish a certain price to their Canada-Europe flights without them being concerned about any other competitive prices.

This decision will help WestJet since it will broaden their customer base. However, their costs will increase, because according to MacLean’s Business Blog, the airlines has few air planes able to fly such a distance, therefore they will have to purchase some other planes for the mission to be successful.

McLeans Business Blog: http://www2.macleans.ca/2013/11/15/westjet-bound-for-europe/

Sources: http://www.cbc.ca/news/canada/calgary/westjet-to-go-transatlantic-with-flights-to-dublin-1.2427850

Ethics is one of the most delicate aspects on a business environment.

Berfu Apaydin wrote a blog about Abercrombie and Fitch firing a Muslim employee when she refused to remove her hijab on the job. Firms usually face misunderstandings and problems in their workplace due to culture clashes. The fact that they fired one of their employees since she did not meet the “Looks” of the store, meant that they “violated the portion of the Civil Rights Act that bars religious discrimination”, according to the Bloomberg BusinessWeek’s article.

What effect will this have on the company? I personally think that this certainly damaged the reputation of the firm since not practising business ethics can lead to several problems. Such as this action would not attract their employees on wanting to work for their firm, therefore increasing recruitment costs.

The irony in this situation is that they company states a Look Policy to maintain the same culture and elegant environment in their stores and maintain their reputation and brand image. However, discriminating their employees because of their religion and cultural background only contradicts what they aim to achieve with the Look Policy. This is not the first time the company has been obliged to see court because of cultural discrimination, and I believe it will eventually repel religious customers from their company.

Berfu Apaydin’s blog: https://blogs.ubc.ca/berfuapaydin/2013/09/12/5/

Sources:http://www.mercurynews.com/crime-courts/ci_24051549/judge-abercrombie-fitch-violated-bias-laws-muslim-garb and http://www.businessweek.com/articles/2013-09-10/abercrombie-still-not-down-with-head-scarves-still-paying-for-it

In “A Phone that’s Designed to Last”, Ali Jatoi introduces the idea of PhoneBloks which are phones composed by different blocks which can be interchangeable. Having heard of this idea before, I agree with the fact that Ali discusses how this idea would harm Apple and Samsung – the leaders in the smartphone market.

I personally think that this idea would benefit the customers since they are going to be able to differentiate and customize their product; since they can choose what they need, a bigger battery or a better camera, etc. How many times have we stopped using a phone because its battery no longer works? But we notice that all other components of the phone still work, but we still throw it away and buy a new one. PhoneBloks gives their customers the option of replacing blocks when something doesn’t work instead of investing in a completely new phone.

Apple and Samsung should be aware of this new idea since it can revolutionize the whole idea of a smartphone. However, as Ali mentioned in his blog post if this idea is introduced, then well-known brands would create individual blogs under their name which would in the end give customers the opportunity of creating the ideal phone with all the best features of different brand smartphones.

PhoneBlok video: https://www.youtube.com/watch?v=oDAw7vW7H0c

Ali Jatoi’s blog post: https://blogs.ubc.ca/alijatoi/2013/11/15/a-phone-thats-designed-to-last/

Is this surprising? Well, I personally stopped renting movies from Blockbuster since the DVD came out. Back in my country (El Salvador) all Blockbuster stores closed about 7 years ago. The reason why Blockbuster is choosing to close all of their remaining stores I believe revolves around the idea of the technology era taking over. Ever since the DVD came out, Blockbuster took some time while switching from the video cassettes to DVD’s. What hit this firm was how quickly the technological changes and this affected the quantity demanded of their product, therefore their supply surpassed the quantity demanded and created a surplus of service and products which eventually created a debt. (In 2012 they had $1 billion of assets and $1.46 billion in debt)

Closing all of their stores will benefit the company because instead of creating more of a debt, they will leave the market. However, at the same time, this will involve laying off 2,800 of their employees therefore increasing unemployment. As far as I am concerned, they are not offering these workers any other job opportunities. This means that overall the decision of closing the stores satisfies them but not the country.

Sources: http://www.chicagotribune.com/business/breaking/chi-blockbuster-to-close-all-stores-20131106,0,2509893.story

McDonalds announced that they would no longer serve Heinz ketchup in their stores after they found out that it is owned by the same man that recently bought Burger King. Not wanting any business to be done with Burger King – their most dangerous competitor- they decided to cut their supply of Heinz ketchup. McDonalds thought that by providingHeinz with the information such as how much ketchup they need and perhaps some advertising they would include in the packaging would imply that their greatest competitor would have access to their information and somehow gain advantage.

This may be seen as McDonalds being slightly paranoid of competitors gaining information through their supply of ketchup. However, using one of the tools provided in class I came up with the conclusion that according to the SWOT analysis, the amount of threats and weaknesses increase if they remain their supply of Heinz ketchup. Therefore to cut the risk of being controlled by another company they simply cut their purchase of Heinz.

The decision made will be more harmful to Heinz than to McDonalds. This is because being the #1 in fast food restaurants would give them the opportunity of easily partnering up with another ketchup supplier.

Facebook recently wanted to buy Snapchat for $3 million; however Snapchat CEO Evan Spiegel denied the offer. They also denied the offer from the Chinese Tencent Holdings when they tried to buy the firm for $4 million.  Having been in business for only two years, the company has been extremely successful and has grown “to 350 million messages or “snaps” per day, up from 200 million in June.” The CEO believes that the firm still has potential to grow and gain more money.

The idea of joining with one of the most common and popular firms in the world (Facebook) would give Snapchat the opportunity to grow and make more profit by themselves. Facebooks aim was to buy the firm since in October their shares dropped 3 % and they saw Snapchat as one of their most important competitors. Last year, Facebook bought Instagram for $1 billion for the same reason, they feared of competition therefore their way out was to buy the firm even though their revenues were purely notional. I agree with Evan Spiegel’s decision since they are probable of expanding their customer base.

Sources: http://blogs.wsj.com/digits/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/ and http://www.forbes.com/sites/jeffbercovici/2013/11/13/facebook-wouldve-bought-snapchat-for-3-billion-in-cash-heres-why/

Burger King, the second leader in the fast-food market, after becoming partners with Canada’s McCain Foods, introduced the new healthier French fries as part of their menu. Intelligently, Burger King developed a partnership with McCain Foods; the company making the fries, and limited them the sales of the new product only to Burger King. This innovation became a Point of Difference of the company since it is the only fast-food company offering this product. At the same time, we are aware that McDonalds introduced the salad ever since health and fitness became a vital element in consumers’ life. However, Burger King is now offering one of the favourite products in a healthier way, instead of offering another product that will take away the fun of fast-food.

I personally believe that the strategy used might actually help them close the gap between them and the market leader; McDonalds. It will also create a positive impact on the reputation of the company since they are meeting the customer’s wants. Moreover, this is an aspect that can be added in the value proposition of the company since it is a unique feature they are offering in comparison to their competitors.

http://www.bnn.ca/News/2013/10/4/Burger-King-tries-to-fatten-margins-with-skinny-fries.aspx

Kraft Company being owner of several products in the snack business (Kool-Aid, Velveeta, etc.) faced an unexpected decrease in the sales of their Jell-O products. Kraft is planning on conducting another advertising campaign with the goal of re-establishing the core purpose of the product. This new campaign I believe has it’s positive and negative factors. The advertising campaign’s goal is also to make customers aware of the product and it points of difference comparing to its competitors, therefore taking the product from the decline stage in the product life cycle, to the development stage. However, launching the new campaign can risk that the time they consumed on planning and research might not succeed as they expected.

Since one of the core aspects when marketing and positioning a product is to focus oncreating a good long-lasting reputation and image, I believe that one of the features the company should focus is on balancing points of difference and points of parity. The external factors such as the customers taste vary throughout time; therefore the brand should be flexible enough to be able to blend in with their customers wants. For example, the article states that the product “…was very successful while the diet trend continued,” however this trend shifted and now there is a different perception of diet trends, therefore it doesn’t fall into placed with their old marketing strategies.

The economist article “Peer-to-peer rental: The rise of sharing economy”, explains the evolution of the ‘sharing economy’. People are encouraged to make profit by renting their underused assets. The increase in technology, such as the creation of websites that encourage renting, has facilitated the connection between the owner and the renter. Should external companies such as hotels and car rentals be concerned about this? In the short-run, businesses will not experience a direct competitive impact; however in the long-run, people will become aware of the benefits this activity provides. For example car makers can be affected since people would prefer to rent a car when needed instead of buying one, at the same time they avoid the responsibility of owning one. Is this a “win-win” situation? Since the owner is making some extra money of their underused assets and the renter is saving money by renting a product instead of purchasing a brand new one, it is a win-win situation.

Fear of sharing owners sharing their possessions with strangers is one of the elements that have prevented the sharing economy to grow rapidly. However once the renters have had one good experience, they are confident enough to try it again.

AT&T one of the largest phone companies in the United States was attacked by its twitter followers this afternoon after posting this photo.

http://cdn.arstechnica.net/wp-content/uploads/2013/09/neverforget2-640×965.png

The basic idea of the advert was to prove to their customers and public the company’s awareness and remembrance of 9/11. However using a tragedy as a way of marketing their products gave a negative impact. As USA Today mentioned in one of their articles, “Social media users quickly responded with vitriol, accusing AT&T of a ‘disgusting’, ‘tacky’ and ‘shameless’ marketing tactic”. It was definitely not an occasion for a marketing strategy or product placement.

As consequence to the social media attack, AT&T removed the photo from Twitter and publicly apologized to anyone who felt offended by their image. The major consequence faced was the damage to their own reputation; since the public will now remember them as the company that offended a major serious tragedy. The use of such a delicate tragedy to gain the public’s attention demonstrated the weakness and lack of business ethics the company possess. The telephone company certainly didn’t expect this crisis to happen, an acceptable way to confront it was to apologize, accept the mistake and avoid any further misinterpretations.