I recently came across Edwin Chan’s blog about the profit-maximizing business strategy implemented by several sportswear companies. There’s no denying that a sustainable, well-executed plan that can ensure product quality and consistent innovation is the foundation of any successful business. However, I can’t help but disagree with the notion that all it takes for a company to achieve growth and gain market share is a great strategy.

For the sake of argument, I’ll also point to the sportswear industry. Contrary to Edwin’s opinion, I believe that endorsement and advertising is still the name of the game. Take Under Armour for example. The success of the rapidly growing American sportswear company can be largely attributed to its staggering collection of sponsored athletes. With talent like NBA MVP Stephen Curry; NFL MVP Cam Newton; MLB MVP Bryce Harper; top-five PGA golfer Jordan Spieth; and (maybe with some bias) the greatest quarterback of all time, Tom Brady; Under Armour has won the endorsement lottery to say the least.

These athletes account for a hefty amount on Under Armour’s payroll, and for good reason. In today’s world, it is essential to try to stand out and emerge from sea of advertisement consumers are bombarded with everyday, and these athletes effectively act as the face of the company. When people see these athletes and their accomplishments, they naturally associate the brand with them. I still remember when all my friends had LeBron James’ shoes in Grade 7. We didn’t care about the quality of the shoes and we definitely didn’t compare them to other brands. The only thing that mattered was LeBron wore them in games, and us, as fans, loved having the same shoes as him.

Similarly, whenever customers spot an Under Armour product, their first reaction would be, “Hey, those are Steph Curry’s shoes!” or, “I’ve seen Cam Newton wear that hoodie!” This initial connection with the brand cannot be underestimated. Not only does it create word of mouth, but also automatically put fans of the athlete into the loyalty loop. As expected, the results have been spectacular. For example, the Curry basketball line helped Under Armour increase their footwear sales by a staggering 58% from the year before.

Many sneakers today bear striking similarities.

Another important point to note would be the mystique quality holds. In a time where information and technology spreads at an astonishing speed, competitive advantages become increasingly transient and we start to see more and more points of parity between businesses – it is simply too easy to mimic a successful product. Therefore, it puts an even greater emphasis on endorsements and with their dream team of athletes; Under Armour has certainly put the sportswear industry on notice.

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Sources:

Edwin’s blog: https://blogs.ubc.ca/edwinchan/2016/10/30/blog-post-4-sportswear-companies-model-for-success/

Steele, Anne. “Under Armour Revenue Growth Continues.” MarketWatch. N.p., 26 July 2016. Web. 13 Nov. 2016.

https://andykomara.com/2014/05/31/andys-desk-adidas-element-refine-tricot/

http://www.fool.com/investing/general/2016/03/30/5-reasons-under-armour-could-blow-q1-expectations.aspx

http://www.kicksonfire.com/stephen-curry-under-armour-change/

http://www.seattletimes.com/sports/golf/jordan-spieth-wins-tour-championship-to-cap-huge-season/

As gun owners of America watched Donald Trump take the last couple of states to clinch his shocking presidential victory, they let out a collective sigh of relief – their fear of gun regulation have finally come to an end. There are a plethora of policies Trump might change in the next four years, but implementing stricter gun laws certainly won’t be one of them. Trump is an advocate of the 2^nd amendment, and it showed in the market – stock prices of major gun companies like Sturm, Ruger (RGR) and Smith & Wesson (SWHC) have dipped more than 20% since Election Day.

The nature of gun control has always been fascinating to me. I came across this blog while researching the topic, and had ambivalent thoughts. Although I wholeheartedly agree with the notion that there must be some form of gun control, I must also partially disagree because I don’t believe guns can ever be “safe”, no matter how strict the rules may be. The only solution is to get rid of guns altogether and I don’t believe it can be accomplished in America. It is a constant struggle between politics and corporations, and ties back to the idea in my first blog post – business ethics.

Are gun companies being unethical? Unlike Wells Fargo and Volkswagen, they aren’t doing anything illegal or rule breaking. However, given the nature of the firearms industry, it is a sensitive topic that will always be entangled with controversy. They are selling deadly weaponsand many people fully expect them to take responsibility. Should we expect gun companies to directly address this conundrum? They can implement policies such as limiting gun selection or requiring an extensive background check before transaction. Doing so will help alleviate the epidemic of gun violence that exists in the U.S. today. With that being said, this is an incredibly lucrative industry, generating over $13.5 billion in annual revenue and companies have no incentive to walk away from any of it.

Fortunately for gun companies, they won’t have to face any form of government control for the next four years. However, the underlying question still remains: to what extent should businesses attempt to limit their revenue for the safety of others?

Word count: 366

Sources:

Blog: https://blogs.scientificamerican.com/cross-check/orlando-massacre-exposes-need-for-more-gun-control-not-more-counterterrorism/

With talks of the Oakland Raiders moving to Las Vegas, it looks like the gambling capital will add another sport, right after the acquisition of an NHL franchise last June that is scheduled to begin play in the 2017-18 season. Recently, the CEO of MGM, James Murren, also expressed interest in an NBA team. At this rate, the entertainment capital of the world will also be known as a sports haven.

Las Vegas isn’t necessarily a city known for its relentless passion for the four major North American sports. So begs the question: Why Vegas? Aside from all the gambling, its only tie with the professional sports world would be the MGM Grand Garden Arena, the venue for some of the most lucrative boxing matches. Las Vegas has never needed to face the challenge of generating fan interest, consistent attendance and season ticket sales. With that being said, to answer the question, teams simply cannot pass up on the seemingly unlimited potential of Sin City, and more importantly, neither can the major businesses – the real winners of this relocation.

It would be disingenuous to suggest that there isn’t some form of symbiosis between sports and business. Sports fit perfectly with the value proposition and target customer segment of the businesses in Las Vegas – young to middle-age adults with disposable incometo spend on various forms of entertainment. Building a new stadium (or two) may be seen as a great way to lose money, and that’s true for most cities in North America. However, Las Vegas will be the site of so many events it will greatly alleviate any financial concern.

Most importantly, this relocation project will create a lot of jobs. From permanent jobs like stadium security to temporary jobs like construction workers, these hires will effectively act as an economic stimulus, as Las Vegas will have an influx of consumers eager to spend their money. Traditionally, Porter’s industry forces have had both positive and negative impact on businesses in Vegas. For example, factors like high barriers to entry and low threat of substitutes benefit casinos, while a dependency on economic trends and volatility in government policies hinder their performances. The acquisition of sports teams will direct a great amount of traffic to businesses and inspire healthy competition. With increasing popularity and significant growth, the aforementioned macroeconomic forces can be assuaged while businesses continue to flourish.

Las Vegas makes the most sense financially for leagues, teams, and businesses. Unfortunately, it appears as though my wish of having a basketball team in Vancouver won’t be happening anytime soon, as we will all be prepared to witness this booming entertainment wonderland that would have made Bugsy Siegel proud.

Word count: 445

Sources:

Sheldon, David. “Las Vegas NBA Franchise Could Follow NHL and NFL Teams” Casino.org. N.p., 27 Oct. 2016. Web. 30 Oct. 2016.

Moskowitz, Dan. “Las Vegas: 10 Years From Now (MGM, LVS)” Investopedia. N.p., 29 Oct. 2016. Web. 30 Oct. 2016.

http://mobilemarketingwatch.com/mobile-innovators-descend-on-las-vegas-for-iot-evolution-expo-67898/

http://vegas.eater.com/2016/4/8/11389724/19-things-you-need-to-know-about-t-mobile-arena

My friend Justin Ng’s blog about the new Apple headphones reminded me that it’s iPhone season again – that annual craze in the fall when Apple’s new model for their flagship product is introduced. While I can understand his enthusiasm for the controversial yet innovative wireless headphones, I can’t share the same opinion about Apple’s recent operations. The iPhone 7, which, with further research, falls below expectations to say the least, has me questioning Apple’s yearly smartphone releases that have over the years become their status quo.

There simply isn’t enough groundbreaking advancement to justify this new model. For example, previous versions have seen drastic changes to its external design and size, unlike the iPhone 7, which have the exact same dimensions as the 6/6S models. Even storage upgrades will now come at a hefty price – a 32GB iPhone 7 will cost just as much as a 128GB iPhone 6S. Other features like improved durability, longer battery life, and water resistance provide no points of difference from its competitors and are quite frankly, overdue.

With that being said, it would be disingenuous to suggest that there hasn’t been any progress made from the previous model. The iPhone 7 will introduce features like better front and back cameras, more customization options, and of course, the aforementioned wireless headphones. However, those aren’t what their most loyal buyers are looking for. Apple’s value proposition appeals to customers at the forefront of technology – people who keep up with product announcements, watch keynote events, and are eager buy the new iPhone every single year. These same people loved previous revolutionary innovations like the retina display, Siri, and iCloud. However, with nothing significant this year, their loyalty will certainly be tested with the iPhone 7.

Fortunately for Apple, despite a somewhat disappointing year for the iPhone, they may have stumbled into the arms of Lady Luck, with Blackberry announcing a gradual exit in hardware manufacturing and the infamous Samsung Galaxy Note 7 flameout. Still, it’s no reason for Apple to be complacent. There will never be a shortage of new challengers with companies like Google and Sony, and competitive advantages, as suggested by Rita McGrath, will always be transient. With that being said, Apple, at least for now, sits comfortably on the throne of the smartphone industry and doesn’t appear to be going away anytime soon.

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Sources:

Villas-Boas, Antonio. “8 Big Changes Coming to the iPhone 7 That Will Make It Much Better.” Business Insider. Business Insider, Inc, 06 Sept. 2016. Web. 16 Oct. 2016.

Hodapp, Eli. “iPhone 7 First Impressions: Another Yearly iPhone Release, Another Set of Incremental Improvements.” TouchArcade. N.p., 16 Sept. 2016. Web. 16 Oct. 2016.

Kelly, Gordon. “iPhone 7 Vs iPhone 6S: What’s The Difference?“Forbes. Forbes Magazine, 9 Sept. 2016. Web. 16 Oct. 2016.

http://thenextweb.com/apple/2016/09/15/you-wont-be-able-to-purchase-an-iphone-7-plus-on-launch-day/

I recently stumbled across this blog regarding Amazon’s plan to haul and deliver packages for both itself and other retailers/consumers. By taking over logistic operations, the online retailer’s ambitious goal would not only eliminate all dependency for carriers like UPS and FedEx, but also add a service that can directly challenge the courier titans.

Amazon’s plan piqued my interest due to the striking similarities it shares with Michael Dell’s groundbreaking direct business model. By managing its own logistics, Amazon will be able to add delivery capacity, which will be particularly crucial during peak seasons like Christmas. Furthermore, by “cutting out the middleman”, Amazon will save over $4 per delivery, which approximates to $1.1 billion per year. With that being said, I believe the most important benefit comes from the ability to develop a connection with customers. Like Dell’s model, by managing it’s own deliveries, Amazon will effectively end its traditional relationship with buyers. Customer communication will be enhanced and as a result, assist the company in improving the entire shopping experience – from the moment the “place order” buttons are clicked to the moment packages arrive at front doors.

Having recently learned about business strategies, I’ve gained further appreciation of Amazon’s ability to consistently seek out and exploit a competitive advantage. Rita McGrath believes that strategies are transient, and companies must always start new strategy initiatives. Once only known as an online bookstore, Amazon’s expansions into e-commerce, and services such as cloud computing and video streaming have all been a testament to its perpetually evolving business strategy, and this new courier venture shows that “complacent” certainly isn’t a word in the online retailer’s dictionary.

Will Amazon be able to rival long-time empires like UPS and FedEx? Only time will tell. However, regardless of the outcome, Amazon’s willingness to launch new business strategies was and will continue to be the key to its success. As the great Franklin D. Roosevelt once said, “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”

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Sources:

Bensinger, Greg. “Amazon’s Newest Ambition: Competing Directly With UPS and FedEx.” The Wall Street Journal. Wsj.com, 27 Sept. 2016. Web. 02 Oct. 2016.

http://truckerslogic.com/amazon-building-their-emi-truck-fleet-signals-bigger-changes-ahead/

http://www.huffingtonpost.com/2014/04/24/amazon-delivery-lasership_n_5193956.html

A week from the one-year anniversary of the infamous emissions scandal, Volkswagen is still reeling from what could be the worst headline in company history.

The German automaker admitted over eleven million diesel cars worldwide were programmed with a software that can properly identify laboratory testing conditions, and make temporary changes to emissions output to meet regulation standards. In reality, these engines emit up to 40 times more NOx than expected.

To make matters worse: from 2008 to 2015, Volkswagen launched a “clean diesel” ad campaign, preaching environmental responsibility. Already having great fuel economy and performance, VW was able to further attract customers by offering a “greener” choice than their competitors and cement their position as an industry titan – recently passing Toyota as the world’s largest automaker. This storm of deception created by VW ultimately took the wind out of the sails of its legitimate, ethical counterparts, who lost many potential customers due to these false advertisements.

As an avid supporter of a market economy and a strong believer in the invisible hand, I believe the government should loosen its grip on the economy. However, with less regulations, unscrupulousness acts like this occur more frequently than I’d like to admit. The actions of Volkswagen show that government intervention may be necessary to maintain integrity: every company deserves to compete on a level playing-field.

The more important factor to consider is how the violation caused irreparable damage to the environment. There are much more toxic fumes coming out of the tailpipes of VW vehicles than we originally thought – 250,000 to one million extra tonnes each year, to be exact. With climate change being a pressing issue in the world today, “emissionsgate” could deal a crushing blow to Volkswagen’s public image. Enterprises must adopt certain social responsibilities not only to fulfill moral obligations we have as humans, but also to appease the general public, especially the eccentric world of social media, where news stories, good or bad, can spread like wildfire.

Volkswagen’s questionable business ethics and negligence of social responsibility have certainly tainted the pristine image they’ve worked so hard to uphold. Can they win the public back? Yes. Can they produce rule-abiding automobiles? Yes. Do they need to take a good look at themselves in the mirror? Absolutely.

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Sources:

Gates, Guilbert, Jack Ewing, Karl Russell, and Derek Watkins. “Explaining Volkswagen’s Emissions Scandal.” The New York Times. The New York Times, 2016. Web. 12 Sept. 2016.
Topham, Gwyn, Sean Clarke, Cath Levett, Paul Scruton, and Matt Fidler. “The Volkswagen Emissions Scandal Explained.” The Guardian. Guardian News and Media, n.d. Web. 23 Sept. 2015.

https://www.ftc.gov/news-events/press-releases/2016/03/ftc-charges-volkswagen-deceived-consumers-its-clean-diesel