Monthly Archives: October 2013

TOMS continues to strive to create shared value

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TOMS Shoes is an example of a business that creates shared value. As it continues to do so, the company plans to open a new factory in Haiti in 2014.

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TOMS reconceive their products through their “TOMS Giving Shoes” commitment. It does this by producing good quality shoes made from recycled materials. For a pair of shoes a customer purchase means giving a pair of shoes to those in need. TOMS also redefine productivity in the value chain by “oversee[ing] that working conditions are acceptable and fair living wages are being paid.” (par.6) This act is opposed to what most companies usually strive for; to lower workers’ wages to save cost. But through this action, TOMS is creating productivity in the long run, where fair wages will act as an incentive for workers, hence they will be more efficient. By opening the new factory, TOMS also enable local cluster development, providing more than 100 new jobs. Additionally, it employs 30 local artisans to design and hand-paint limited edition shoes which allow to use local talents in conducting their business. Such program provides opportunities for current Haitians to develop.

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Through the Triple Bottom Line, we can see that TOMS is on its path in becoming sustainable.

All of these show how TOMS contributes to improvement in economic welfare and development to society while continuing to make profit, creating shared value.

 

Article source: http://www.caribjournal.com/2013/09/26/haiti-us-shoe-company-toms-to-open-new-factory-in-2014/

Starbucks benefits from its launched app

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Starbucks’ pay-by-app have created extra convenience for consumers to purchase their coffee. Such app allows consumers to pay through their phones, check their balance and track rewards. Each account is identified based on consumers’ Starbucks Card account.

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Starbucks make use of information technology from the pay-by-app. Through the Starbucks card account that is linked to the app, the company is able to track all participating consumers’ transaction history. This allows the company to see their consumers’ buying habits, enabling them to better fulfill their customers’ needs. Through the accounts, Starbucks can track the repeats of purchase made by consumers on certain products, allowing them to analyze which products are more demanded. Hence, they are also able to track the responses to newly launched products too. These information acquired from the system allows Starbucks to develop further plans for improvements.

Starbucks also showed that it understands their segments’ needs very well. “Customers are looking for extra value….putting My Starbucks Reward on mobiles offers a faster, easier way to pay.” (par.5) Starbucks does not only provide personal assistance through baristas, but also an automated service to establish better customer relationships, as they know that customers wants less hassle in process of purchase (payments without cash).

VIDEO – Click this link to watch more about the app!

Article source: http://www.telegraph.co.uk/technology/mobile-phones/8992712/Starbucks-launches-pay-by-app-for-iPhone-users.html

CSR or CSV?

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In a recent survey it is revealed that 50% of consumers is willing to pay for products made by social responsible firms. It has been an increasing trend since last year. This matter is especially of importance in countries like Thailand, Indonesia, Philippines and India (par.6).

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Such behavior by consumers have drove firms to use such “corporate social responsibility” image as a selling point. However, it is forgotten that both society and firms are dependent. This is tied by created shared value (CSV). Firms can reconceive their products by improving such products to better serve their current market or perhaps when undergoing market development. It will also have to redefine productivity in the value chain by for example, reduce excess packaging. This does not only reduce the firms cost, but also create less damage to the environment -showing a win-win situation. Firms will also need to enable local cluster development, such as taking advantage of local suppliers. This is especially an issue in developed countries where labor are more expensive. It is forgotten that value is perceived as benefit relative to cost. While it is cheaper to produce in China, it is time-consuming and more expensive for the long-term to have those items shipped to other countries.

This shows how CSV shows that all stakeholders may benefit as they are dependent. CSV goes beyond marketing “sustainability” as a unique selling point.

Article source: http://www.businessnewsdaily.com/4884-social-responsibility-money.html

Reference to: Class 15 Class Prep Instruction Reading Material “Creating Shared Value” in Harvard Business Review.

Home Depot’s keeping up with tech changes

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The Home Depot’s CEO said that the company will not concentrate on building more stores as part of their growth strategies. Instead, they have been making use of the web through online sales which have proven to boost the company’s sales. Such external factor is taken into account by Home Depot as an opportunity in order to cut costs and be more efficient. As Home Depot’s CEO mentioned, since technology is changing, customers expectation also change. Customers would most likely prefer to order online and pickup in-store or just ship, hence the company make such options available in order to live up with customers expectation in order not to lose the market with emerging online supply stores.

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At the same time, Home Depot also creates an application recently for smart devices where buyers can look for the name of the product they are looking for and be directed to the location of where the product is in store. This shows how the Home Depot paid attention to the value proposition as the app is designed to solve the most common question of customers; “Where is it?” as mentioned by the CEO. Hence, this enriches customers’ shopping experience by creating convenience to shop in-store.

Post based on Online Videos:

Why Home Depot’s not building many stores

How tech is changing Home Depot

 

Nokia to join Microsoft after a friendly takeover

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After being in a partnership with Microsoft in 2011, Nokia is taking the opportunity to survive in the smartphone industry by selling the company to its partner, Microsoft, for the better good.

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The smartphone industry has been very competitive that it is crucial for companies operating in such industry to implement new strategies. Apple is a major brand that flourishes in the industry, as it continuously adopts product development for its iPhone. Hence, the degree of rivalry is high in the industry. As Nokia’s market and financial position is not looking good, it is reasonable to take the opportunity of integrating itself with Microsoft for a friendly takeover. By doing this, Nokia establishes a competitive advantage in partnering with Microsoft as its OS, competing with Apple and its iOS. This too, creates a high barrier of entry for other smartphone brands as Nokia is integrated with a credible software.

On the other hand, the takeover also allows Microsoft to gain from managerial economies of scale. With Nokia’s hardware employees joining the company, specialization occurs where Nokia’s employees focus on the hardware while Microsoft on the software, creating specialization, boosting efficiency. Hence, this helps Microsoft to gain a competitive advantage as well.

Article source: http://www.microsoft.com/en-us/news/press/2013/sep13/09-02announcementpr.aspx