Jiya Dassan's Blog

I was reading Alexandar Qu’s blogs and one of his posts caught my attention. Facebook would now like to track the hovering and movement of an individual’s mouse while on the website. One problem with this is the mountain of information that has to be collected and effectively stored in order to create a Management Information System. Although this may be useful for Facebook, is it ethical to collect information without explicit consent? If the user community sees this as unethical, Facebook will experience backlash. Users will look for alternatives to Facebook or try and pollute the data by randomly moving the mouse. In this case, losing users would be an external threat to the company and the invasion of privacy would be an internal weakness for Facebook. On the other hand, if people accept this as ethical, then the storage of mass amount of data and building a system for analysis will take extensive resources. This will cause Facebook to take their eye off improving and enhancing features of Facebook which will be a loss to users. These individuals may look for alternatives that have better options. Either way, it is a loss for Facebook.

Article 1: http://www.nytimes.com/2013/09/12/technology/personaltech/ftc-looking-into-facebook-privacy-policy.html?ref=business&_r=1&

Atricle 2: http://www.engadget.com/2013/10/30/facebook-considers-tracking-mouse-cursors-and-screen-views/

I was reading Cindy Fu’s blog and found her post about Bell, Rogers, and Telus quite interesting. The three main wireless network providers are threatened by the potential competition of Verizon in Canada. Michael Porter has provided us with a framework that allows us to understand the industry in which a specific firm operates. He believes that an industry can be influenced by five forces. At the moment, Canada’s telecom giants have market power and are able to charge high rates for their cellular plans. In relation to the five forces, there is a threat of a new entrant. The Canadian government wants Verizon to enter into the market as Canadians have been complaining about high wireless rates. Currently, the three wireless companies have minimal competition and have an understanding between them to keep rates high. Verizon is a big telecom company. Because of its size and the fact that it is a new entrant, it will be motivated to offer low rates. This will force the Canadian companies to lower their rates in order to stay in business. Verizon’s potential entry will force the big three to provide a better value proposition. A big win for consumers.

Relating Articles:

http://www.theglobeandmail.com/report-on-business/verizons-canadian-dalliance-deeper-than-admitted/article14427259/

http://www.cbc.ca/news/business/verizon-pullback-a-blow-to-canadian-wireless-consumers-1.1346672

http://o.canada.com/technology/personal-tech/rogers-bell-and-telus-launch-campaign-to-combat-rumoured-verizon-takeover-of-wind/

A social enterprise creates solutions to social issues with the use of business principles. Blake Mycoskie the founder of TOMS created this company in 2006 after visiting Argentina. Mr. Mycoskie created a business model that was based on sustainable giving; this is being accomplished by the one for one model. Sustainability is based on the triple bottom line that includes a social, environmental, and economic measure. TOMS also provides shoes that are made of vegan and recycled material. The value proposition of TOMS is that for every pair of shoes consumers purchase, TOMS will provide a new pair of shoes to needy children in developing countries. They are model citizens for creating shared value as a socially responsible corporation. Along with creating profits for themselves, they are improving social conditions around the world. As a result, they are partnered with 75 shoe giving partners who empower education. TOMS believe that in order to alleviate poverty, children must be educated to obtain well-paying jobs. TOMS has also expanded their business model to include providing prescription eyeglasses. Consumer can be assured that needy children are receiving help by accompanying TOMS on a trip where the goods are distributed.

Article: http://boss.blogs.nytimes.com/2013/03/19/questioning-the-toms-shoes-model-for-social-enterprise/?_r=2

Interview with Blake Mycoskie: http://www.cbsnews.com/video/watch/?id=50149531n

John Elkaim recently wrote a blog about how social data has changed the marketing landscape.  There has been a decline of mass media as social media has become rampant. Social media and consumers sites such as Facebook and Amazon are collecting social and consumer data from their users. The three main steps in this process involve data collection, data segmentation, and converting it into consumer insights. An example of a company who uses this process effectively is Google. Google collects data using cookies on what individuals search and the websites users visit. Then, they compile the data and analyze it in order to find patterns that they can use for advertising. Amazon also collects data that they convert into valuable information. When you visit their website and search for a particular book, your search results are accompanied by a list of others books. This list of books is what other users have purchased when purchasing the searched book. Amazon is betting on user behavioural patterns for additional sales. This trend is likely to continue as other companies, such as Safeway with their club card, convert collected data into consumer insights and utilize it in their segment specific marketing strategies.

Another article about social media marketing: http://www.cmswire.com/cms/customer-experience/social-media-marketing-how-big-data-is-changing-everything-022488.php

As defined by businessdictionary.com, organizational culture is “the values and behaviours that contribute to the unique social and psychological environment of an organization.” The goal of any manager is to get the best out of of its employees. It is essential to create a positive culture at work so that employees feel important and appreciated. As discussed in class with Danielle Van Jaarsveld, it is not necessarily about keeping the employees happy but rather keeping them motivated to work harder and be better.

Well-known retailers Costco and Nordstrom are choosing to close this Thanksgiving to allow their employees to spend some valuable time with their families.

Customers are also pleased after hearing this decision and understand and appreciate the management of Costco and Nordstrom. On the other hand, Walmart, Kmart, and Target will be open on Thanksgiving Day. Their customers are angry that these companies are focusing on consumerism on what should be a family holiday. By closing on Thanksgiving Day, the employees of Costco and Nordstrom will be pleased when they return to work; they will be properly rested and motivated to work harder. This simple gesture can have a big impact throughout the year for Costco and Nordstrom.

Article: http://www.huffingtonpost.com/2013/11/13/costco-thanksgiving_n_4262774.html?utm_hp_ref=mostpopular

A Blog about Costco and Nordstrom: http://www.thefrisky.com/2013-11-14/good-news-costco-and-nordstrom-refuse-to-ruin-your-thanksgiving-with-black-friday-sales/

Metro and Loblaws, two of the country’s largest supermarket chains, are reporting “disappointing earnings.” Loblaw’s stock has dropped by 6% whereas Metro’s stock has dropped by 5%. Target has now entered the Canadian market and is planning to open up another 33 stores within Canada. Increased competition is part of the reason for the decline in stock price.

This article shows how a business model canvas is always changing. As a result of this increase in competition, Metro and Loblaws may also have to change their cost structure in order to focus more on marketing in order to maintain revenue. Revenue streams may be impacted as consumers move to the competition for cheaper prices. They will need to reevaluate their value proposition and make it more attractive than the competing supermarkets. This is an example of how parts of the business model canvas are related and that changing one will lead to a change in the other. In order for a company to run effectively, it needs to understand it’s competition and change the parts of it’s business model canvas in order to provide the best value proposition to the consumer.

Article: http://www.huffingtonpost.ca/2013/11/13/loblaws-metro-earnings-bloodbath_n_4268886.html?utm_hp_ref=canada-business

Target’s Website: http://www.target.ca/en/

Video on the Business Model Canvas: http://www.businessmodelgeneration.com/canvas

Ernst and Young: False Audits

When companies are in a financial crunch, they are motivated to commit financial fraud. The three things that motivate them are pressure to commit the fraud, opportunity in order to hide the illegal act, and to be able to rationalize the deed. Ernst and Young is a “multinational professional services firm” who performs independent audits on companies. The Ontario Securities Commission allege that Ernst and Young  ignored concerns that they had identified about a Chinese apparel company Zungui Haixi Corporation.  Zungui had its initial public offering on the TSX Venture Exchange in Canada and raised $39.8 million. Zungui Haixi Corporation had an incentive to commit financial fraud as they wanted to raise as much money as possible for their IPO. Regulators claim that Ernst and Young noticed this but either chose to ignore or place minimal value on it. This may have been done out of greed in order to keep Zungui as a client and other Chinese-owned companies. If these allegations are true, Ernst and Young have failed on their fiduciary duties. Owners and creditors believed in Ernst and Young to honestly represent the facts though the auditors may have failed to do so.

Gillette’s Cheap Razor

Every company’s goal is to differentiate itself from others in order to appeal to the target market by creating points of differences. Gillette a unit of Procter and Gamble has done this very successfully. Twenty people from U.S. Gillette’s headquarters visited India in order to talk to consumers and understand their target market’s needs. They came to the conclusion that men in India usually shave less often, have thicker hair, and are more price sensitive than Americans. Indian men are also more worried about cutting themselves. After the visit, Gillette had a better picture of their new target market segment and their requirements. As a result, they were able to create a low-cost razor (Gillette Guard) that would appeal to those in India and in other similar markets. Gillette created a hollow handle and reduced the number of components required to make the razor, and thereby reduced the cost to make the razor. Due to Gillette’s research and careful planning, they were able to increase their market share in India from 37.3% to 49.1% for razors and blades (according to Euromonitor). A message for other multinational firms trying to penetrate India.

Canadian Auto Production 

No matter how productive and efficient a company or industry is, external factors are bound to have a significant impact on the profitability. The exchange rate is one of the biggest factors in determining your success as a producer. As your currency becomes more expensive internationally, you become less of a desirable destination for foreign investment. Such is the case for the auto industry in Canada. Some have predicted that by the year 2020, auto production in Canada could decrease by an astonishing 25%. The North American Free Trade Agreement allows shared car manufacturing to take place in Canada, Mexico, and the United States. Though as the Canadian dollar continues to rise, it is more cost efficient for producers to move to places such as Mexico, where labour is cheaper. There, the company can operate in a profitable manner and will face fewer restrictions by the government. The costs outweigh the efficiency and productivity of producing cars in Canada. Invariably, business men and women will go where the construction and production is the cheapest.

Marketing tragedy: When ads become apologies

 “Communication experts” come up with ideas of promoting corporate products while referring to highly controversial or tragic events. At the time, it seems like a good idea until there is public backlash. Then the experts backtrack and create a story that can somewhat explain their actions. In most cases, the average reader knows that the backlash caused the apology. Corporate stakeholders would not like this scenario. Let’s take a look at two specific examples:

• Los Angeles Lakers tweeted a picture of Kobe Bryant with the hashtag #NeverForget. Upon overwhelming public objection, they apologized and mentioned that the link to 9/11 was the commemorative patch on his jersey. If the link was the patch, why did they not tweet the picture of just the patch?
• Another corporation, Kenneth Cole, tweeted “‘Boots on the ground’ or not, let’s not forget about sandals, pumps and loafers. #Footwear.” This tweet was related to the possible U.S. attack on Syria. When there was public outrage, Kenneth Cole apologized, which the CEO later denied and then pointed to the increase of sales as a result of the tweet.

We need to decide is profit everything or do we value lives lost?