Monthly Archives: October 2014

How First Nation Groups Can Cause Problems To Enbridge

blog 5When Enbridge proposed to build an oil pipeline, Enbridge knew they would have a tough time dealing and negotiating with aboriginal groups and their precious land. Many aboriginal groups have publicly opposed the Northern Gateway Project, including the Nak’azdi group. Enbridge planned to build pipeline through the heart of the Nak’azdi territory and 5 other First Nation Groups. This pipeline of Enbridge not only will take up the land of the Nak’azdi groups, it will also affect the population of the sockeye salmons that are a huge part of the Nak’azdi culture and tradition.

Now because the rights the aboriginal goods have regarding to their lands and culture, Enbridge will have to have the majority of agreements to build the pipeline on their land from the aboriginal groups. One way Enbridge did to obtain the agreement from some of the First Nations groups is agreeing to an equity sharing with the groups. This reduce in revenue will have a huge impact on revenue stream for the business model as some of the earning will be shared. From the strong opposition Nak’azdi group and some other ones are displaying, Enbridge will have to do more before Enbridge will acquire the agreement from these groups. This may bring disruption to the cost structure of the business because some of these negotiation might cause more than expected. Furthermore, if Enbridge fails to convince these opposing First Nation groups, all the money spent on the project prior would be a waste.

Enbridge needs to be very careful with the negotiation with the First Nation groups as these negotiation have the potential to alter the revenue stream and cost structure of the business model. If they are not cautious enough, the expense for starting this project will increase, causing the profit to decrease as well. Also, the aboriginal groups have the right to disallow Enbridge for constructing the pipeline on their soil. Therefore, Enbridge has a very disruptive obstacle in front of them.

How American Automobile Companies Failed In 1970’s

U.S automobile companies had been very successful up until the 1970’s. They suffered enormous losses during that period. This is due to their inability to adapt to changes in the economy and the changes in consumers’ taste. They continued with their old values, and neglected new opportunities and threats in the market.

The first sign the U.S automobile companies missed was the oil crisis in 1973. Oil price spiked and small fuel efficient cars from foreign companies took advantage of that while U.S companies were still focusing on fuel consuming trucks and cars. Consumers quickly turned to the fuel efficient cars over the traditional fuel consuming light trucks or passenger cars. Although the U.S companies had responded to this shift in taste but it was too late because they had lost large amount of market share already.

Another major problem the U.S companies did not fix in time was their product quality and their inattentiveness to the safety of their products. As consumers were become more aware of the quality and the safety of the cars they drove, all the defects in the U.S cars were exposed. All these defects resulted in enormous expenses for the automobile companies as they had to recall their products. Moreover, consumers had lost trust to the U.S cars due to these poor qualities.

The massive profit loss resulted in that period proved that companies could not stick with one business plan. The U.S automobile companies’ reluctant to move to more compact cars led them to lose a lot of market shares, and they did not change their value proposition to match the consumers’ need in high quality cars resulted in profit lost, even bankruptcy as well. Therefore, companies need to be more flexible with their business plans in order to be sustainable.

http://en.wikipedia.org/wiki/Automotive_industry_in_the_United_States

Samsung’s Marketing Strategy

It is well known that Samsung and Apple have a rivalry between the products, especially in the smartphone market. As the seconding leading smartphone industry company, Samsung has been trying to become the leader in the smartphone industry in terms of market shares. Samsung’s ambition is very evident through the aggressive marketing and advertising strategies. In one of the recent commercial, Samsung openly mocks Apple fans. Apple fans have been longing for a bigger screen size and Apple finally announce the “Iphone 6” that has a bigger screen.

Couple years ago, Samsung has already established a new market in the smartphone category called “phablet”- a smartphone that has a big screen. Rather than following “Iphone’s” tradition small screen sized smartphone, Samsung becomes the first company to lead the unoccupied position in the market. This “phablet” of Samsung has been very successful so far.

Just after Apple announced their new flagship smartphone, the “Iphone 6”, Samsung launched commercial that specifically targets at Apple’s new product. In the commercial, Samsung mocks “Iphone 6’s” big screen by stating that every company produces a big screen smartphone. As the pioneer of the “phablet” smartphone, Samsung is essentially letting people know that Apple is not innovative with their products. Samsung wants consumers to know they are the innovative one, and Apple is just imitating Samsung’s products. In conclusion, Samsung was trying to reposition their main competitor in order to become the leading smartphone company.

http://www.marketingweek.co.uk/opinion/ritson/how-samsung-took-the-wind-out-of-apples-sails/4011647.article

What Should Enbridge Do Ethically?

As a form of protest to the federal government, women of the Gitga’ Nation have woven yarn and stretched it 3.3 km across the Douglas Channel. The majority of First Nations is against this Northern Gateway Project. Yet, the federal government neglects the voice of the people in BC and the First Nation to approve this project.

The main debate regarding the Northern Gateway Project is whether to build the pipeline or not and think ethically or economically. With the approval of this project, many ecosystems could be destroyed and the risk of oil spill will always be looming. On the other hand, this project can create job opportunities and stimulate the economy.

I believe that Enbridge, the company responsible for the pipeline, should make the best decision for the company by building the pipeline. At the same time, the company needs to find a balance between making profit and the responsibilities to the people of Canada. Destroying ecosystems is inevitable once the construction begins. However, what Enbridge can do to compensate is to ensure job opportunities for Canadians.  Businesses should always find a balance between profit and ethics. Making a ton of profit unethically will cause long term problems both socially, politically and economically. For example, the Conservative Party may not win the next election because it has lost the trust of the citizens by approving the pipeline.

http://www.thestar.com/news/canada/2014/06/21/first_nations_stretch_yarn_across_douglas_channel_to_protest_northern_gateway_approval.html