Response to the External Blog – Curious Cat

 

As I read the article “Could Amazon Significantly Impact Google’s Adsense Income” by John Hunter, the two business concepts that came through my mind were opportunity costs and PoP/PoD from value proposition class.

The first question arouse was: “would it be worthy?” Google paid approximately $9 billion to Adsense sites in 2013, which indicates that Amazon must invest no less than the same amount in order to compete against Google. Considering the opportunity cost of using the massive capital on other options, was it a good decision? My answer is “no” because if we compare Coke and Pepsi, the size of annual sales for Coke exceeds the ones of Pepsi. This example proves that it is challenging for the “second” to obtain better results than the “original.” Not only that, Amazon following the same advertising program would weaken the point of difference for both Amazon and Google’s brand positioning, which would result in negative influence on their brand awareness. Overall, I partially agree with the writer’s opinion that Amazon’s move would be a threat to google, yet I also consider this as a lose-lose strategy for both Google and Amazon.

 

Image From:

https://www.fiverr.com/spacetime/help-you-to-install-adsense-or-amazon-ads-on-wordpress-or-joomla-website

 

Racism in NBA: The Impact of Ethical Issues in Sports

A primary goal of a business is to earn profits, and as an owner, athletes are the top employees who generate all of the profits for the team. What would happen if the owner treats his employees with racism? Last year, the disposal of LA Clippers clearly explained the miserable consequence of this situation. NBA players consist of a variety of ethnic group, thus it is not surprising that Donald Sterling, the owner of LA Clippers, was forced to sell his club after numbers of unethical comments.

Sterling was caught on the tape telling his girlfriend to not to bring African-Americans his game. The impact was enormous: After the comment was reported through media, the entire team was willing to boycott, fans refused to purchase the game tickets, and many advertisers backed away from the Clippers. The value of the club plummeted dramatically, and Sterling had to sell his club for only $2 billion.
For those who enjoy watching variety of sports game, sports can be considered as an amusing, exciting show performed by athletes. It is true, yet most fans are also aware of the fact that sports is a business that involves enormous amount of money, marketing, reputation, responsibility, and business ethics. When the Clippers was sold off at the price of $2 billion, which could have been much higher without this issue, I was able to understand the enormous impact of ethical issues in any business.

I was pleased that the “good triumphing over the evil” applies to the business ethic, yet on the other hand, I also bitterly wondered how much the world is concerning, or caring, about the similar problems occurring in smaller businesses. NBA is such an immense business that receives so much attention, then how about manufacturing industry in Asia or workers in mine? Had we ever took an action for them? After these thoughts, I acutely realized the necessity of social enterprises that focus on improving a specific social value.

donald-sterling-racism-elite-daily

Resource:

http://www.nba.com/2014/news/04/28/clippers-sterling-sponsors.ap/index.html
http://basketball.realgm.com/wiretap/234961/Blake-Griffin-Surprised-Clippers-Sold-For-$2-Billion

http://sports.yahoo.com/blogs/nba-ball-dont-lie/clippers-owner-donald-sterling-caught-on-tape-telling-his-girlfriend-to-not-bring-african-americans-to–my-games-064539618.html

 

Image From:

http://elitedaily.com/sports/donald-sterling-saga-shows-people-dont-know-real-racism/

http://thyblackman.com/2014/05/08/looking-beyond-l-a-clippers-owner-donald-sterling/

Response to Giancarlo Gatti’s “Why is League of Legends so Popular?”

League of Legends Apps on Android

I am from Korea, where gaming industry is most developed, popularized, and commercialized. For the young generations in Korea, League of Legends(LoL) is more than just a game. In fact, it is now established as a culture, dominating the entire online game market. League of Legends holds 67 million users, which is an outstanding number compared to Dota 2’s 7 million. (source from here) In Giancarlo’s article, he clearly explained the efficient marketing strategies of Riot Games, the publisher of LoL, yet there is one more that I would like to elaborate additionally.

One thing that Giancarlo did not mention was Riot Game’s constant effort to communicate with users. Many other online game companies identify the problem by themselves. They often go through internal discussion, conduct a closed test, and then make the amendment that might not reflect the customers’ needs. If the customers do not satisfy with the result, the game is not a pain reliever, but rather, it is a pain creator. On the other hand, the unique value that Riot Games proposed is the way they communicate with users before making adjustments. There are several online LoL communities with many active users’ involvement, thus the general managers of the company use them in order to interact with the players. The users, or consumers, can deliver their opinions directly, and the managers tend to apply some creative ideas into the game. This process not only satisfies the customers’ needs, but it also breaks the communication barrier between the management team and customers. Consequently, their marketing strategy is a “gain creator” that enabled an extraordinary success of League of Legends.

 

제목 없음

<Birthday Card from Riot GM>

Image From:

http://www.sk-gaming.com/content/54270-The_State_of_the_LoL_Community_How_Dirt_Nap_Paves_the_Way

http://thedroidreview.com/top-free-league-of-legends-android-apps-339

http://m.inven.co.kr/board/powerbbs.php?come_idx=3866&l=1752708

Class 20: United Nations and Social Enterprise

“Future” cannot exist without “present,” and there is no reason to live “present” without “future.” The reason why we need both the United Nation and social enterprises lies behind the same sense. They function similarly as they both manage to improve the economic wellbeing of developing countries. Yet, they are not exactly the same since social enterprises provide education to the future generation about a proper business management, while the United Nation is mainly focusing on current issues to be resolved.

The way they approach these issues distinguish the UN and social enterprises. The UN tends to be involved with the problem directly, and suggest solutions that could improve the economic condition right away. Meanwhile, social enterprises pay more attention to the seed rather than the plant itself. The main goal of these organizations is to set up a solid root for the future. According to the source, the activities organized by social enterprises “open up new pathways for the marginalized and disadvantaged, and unlock society’s potential to effect social change.” Such goal applies to every social enterprise, including the Arc, and their aim enables a cultivation of well-educated talents who would lead the economic development of the country in a long-run. Overall, both the UN and social enterprises contribute to the worldwide economic and social development, thus I concluded that the social enterprises are still necessary despite the fact that the UN is fully funded.

Reference:

http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative/About_ARC

http://www.wvi.org/un

http://www.un.org/en/aboutun/

Image From:

http://www.easterseals.org/giving-tuesday-december-3-2013/

http://socialventures.com.au/news/queensland-social-enterprise-showcase/

Response to Jiaqi Luan’s “Canadian Coffee bought by Fast Food Chain”

 

If two companies decide to merger, it means that both companies’ management teams seized an opportunity to benefit themselves from it. However, in Jiaqi’s blog article, she illustrated her doubts about the merger progressing between Burger King, an American fast food chain, and Tim Horton’s, a Canadian fast casual restaurant.

As an ordinary student, I cannot accurately judge whether Tim Horton’s decision was right or wrong because I have no access to the detailed information regarding their decision, and I have no access to the internal affairs of the firm either. Yet, as a customer in Canada, I completely agree with Jiaqi’s argument that the merge would negatively influence Tim Horton’s current value proposition.

The main target segment of Tim Horton’s is Canadian, and most of their chain stores are located in Canada. They pushed their unique property as Canadian brand, and this property enabled the rapid growth of brand awareness among the customers in Canada. Nevertheless, while Tim Horton’s is narrowly targeting the Canadians only, the involvement of a foreign company would eliminate their unique point of difference, which would result in a loss of identity and customer loyalty.

Moreover, the loss of unique identity is not only critical to the company’s value proposition, but it is also harmful for the Canadian industry. From the world’s point of view, the merger can be seen as if a Canadian company is sold to the stronger American company, thus it would be a precedent that prevents any other Canadian businesses to grow into global companies. Overall, I think Tim Horton’s should reevaluate what kinds of opportunity costs they are facing.

 

Image From:

http://deesonly.com/2010/10/13/tim-hortons-is-canadas-tea-party/

http://www.cbc.ca/news/business/tim-hortons-burger-king-deal-would-base-burger-chain-in-canada-1.2745754

The Rising Star: How Did Xiaomi Doubled Their Revenue?

XIAOMI SMARTPHONE MI4 lei jun ceo

 

Xiaomi Inc., a Chinese smartphone company, is receiving a world-wide attention due to its exceptional sales performance. Founded in 2010, it took Xiaomi only 4 years to dominate the smartphone market in China, which put them into a position as a potential challenger to the top two companies, Apple and Samsung. Within a year, its net profit nearly doubled from 1.88 billion yuan to 3.46 billion yuan($566 million), not to mention its revenue was even more than doubled. Obviously, the company is taking advantage on targeting the world’s largest market, China, but I think the main reason for its extraordinary success is in virtue of Xiaomi’s efficient marketing strategy.

 

 

The company is proposing three unique strategies including low price, marketing based on social media, and online-base sales. Among those approaches, I was personally impressed by their online-sale strategy. I have experience living in China, and therefore, I understand the massive potential behind China’s fast-growing online market. Xiaomi was able to enter the niche market at a perfect timing, and they had built a solid fan base in China. Moreover, their marketing was not only effective in attracting customers, but it also reduced the cost for shipping management, which enabled their exceeding performance in profit generation. Overall, I have no doubt that their brilliant value proposition would build Xiaomi a highway to become a candidate for the world’s most valuable smartphone company.

 

Reference:

http://www.ibtimes.com/xiaomi-profit-nearly-doubled-2013-forecast-rise-75-2014-report-1719789

Image From:

http://www.businessinsider.com/xiaomi-revenue-profits-2014-11

http://www.soyacincau.com/tag/xiaomi-online-store/

First Nations and Oil Industry in Alberta

alberta oil sands

The oil industry that allowed massive industrial development in Alberta is now facing an obstacle. The provincial government’s policies regarding the energy development had led controversial issues with First Nations in the region. First Nations have extraordinary connection with nature, and the nature means a lot different to them compare to what the oil companies are thinking. For them, developing nature into an industrial zone is a culturally and spiritually immoral action, and therefore, the concerns and criticism towards the energy development plan by government is rising these days.

Oil industry is definitely the fastest and largest industry developing in Alberta, and it is an enormous business opportunity for many companies. Nevertheless, is it tolerable that one side is earning a large amount of profits from business, while the other side is losing their livelihood that had been preserved from their ancestors? Obviously, it is not fair for the First Nations, and the provincial government must provide more reasonable incentives, such that both sides can be equally satisfied and benefited from the industry.

 

 

Reference:

http://aptn.ca/news/2014/10/06/prentice-says-hell-revisit-contentious-alberta-first-nation-policies/

Image from:
http://albertaoilsandsjobs.net/

Tobacco Price Up Through the Air in South Korea

Most of the Asian countries today are criticized for significantly low tobacco price. The tobacco cost between $2 to $3 in South Korea, which is an affordable price for all population. After observing alarming consequences of low tobacco price, the Korean government decided to declare a war against on tobacco. They would push to almost double the price, and eliminate all tobacco-related advertisements by January. The proposed plan, however, would face many oppositions not only from tobacco company, but also from the convenient stores, in which their sales are largely depended on cigarette. Then, is it acceptable to sacrifice the economic gain for those businesses to pass this proposal? Does it worth it? My answer to this question is: yes, it does. The improvement of population’s health condition from reduced smoking rate is an obvious, yet a huge benefit. There can be other indirect benefits as well: if less people suffer from health issue such as lung cancer, more employees would be available, and more capitals would be spent into economy instead of health care services and cigarettes. This would bring positive influence to country’s economy as a whole, thus I strongly support the government’s smart decision.

 

Reference:

http://www.koreaherald.com/view.php?ud=20140911000934

Image from:

http://news.busan.go.kr/sub/search_01_view.jsp?arti_sno=201303201033270001

Reason Behind Apple’s Shares in Decinle

Apple’s brand new Iphone 6 and IOS 8, introduced to the public last month, was not a great deal for its stock price growth.

A company’s stock price usually increases when they introduce a new product because of the potential that investors see from it. However, on September 25th, Apple experienced 2% fall in its share price due to two different reasons—numerous problems caused from new IOS 8 update, and a video that criticized the structure of easily-bended Iphone 6. Many people, also other companies, made caustic jokes about the product through social network services, referring it to the name “bendgate.”

One of the reasons behind this failure is related to value proposition. Customers these days tend to purchase phones with wider screen, but lighter in weight. Apple, therefore, used aluminum as the main component of the phone, which seemed successful in reducing its thickness and weight. Fulfilling customer’s need was a “gain creator,” except that it was overly excessive, and the gain changed into pain.

Apple is the largest company in entire world, and their shares would eventually go up. However, in order to maintain the position as a leader of technological device market, they must stop risking the consequence from their excessive value propositioning.

 

Reference:

http://www.thestreet.com/story/12892278/1/why-apple-aapl-stock-is-down-today.html

Image from:

http://metro.co.uk/2014/09/24/bendgate-apple-iphone-6-bending-in-pockets-news-leads-to-endless-internet-mocking-4880440/

The “Gravity” Pulling Down Apple

 

If you have an Iphone in your pocket, take a look at it. Have you ever thought what makes up the fancy technologies we are using? The truth lies behind a veil covering the dark realities of the manufacturer in third-world countries.

The increasing demand for technology devices today enforced numerous companies, including Apple, to supply more product. To reduce the expenses of the mass production, the company must keep the cost as low as possible. In business perspective, it is a reasonable decision since it is inevitable to minimize the expense in order to maximize the profit. Nevertheless, when it comes to human right violation, it becomes a completely different issue. The Apple supplier factory in China raised numbers of ethical concerns as China Labor Watch found some serious wage payment, health, and safety issues, which violates human right regulations. Meanwhile, Apple announced that they would investigate all the concerns to ensure the safe and fair working conditions for workers, yet there is still a long way to go.

Currently, not only Apple, but many other major brands such as Nike are also responsible for the ethical issue around supplier factories in developing nation. As a profit-making company, low expense is a critical factor for success in their business, yet they must provide minimum standard of support to their workers in order to fulfill their responsibility as employers.

 

 

Reference:

http://www.cnet.com/news/apple-chastised-for-unsafe-working-conditions-in-supplier-factory/