“If  the United Nations was fully funded why would we need the Arc or social enterprise?”

The UN does meaningful work globally, however, aid dependency is a growing concern among some struggling communities. This is where social enterprise comes in.

The United Nations (UN) is a wonderful organization which has improved billions of lives worldwide. Some of society’s problem, however, are so severe and perplexing that even a fully funded UN cannot suppress them in the long run.

Much of the aid provided by the UN involves relief efforts and charitable giving. While these measures are effective short-term solutions, they also lead to more dependent communities. This is where the distinction between charities and organizations such as the Arc and the Skoll Foundation becomes valuable. These initiatives are, in my opinion, more sustainable methods of tackling the pressing issues of society because they help promote social entrepreneurship by allowing individuals in struggling areas to become financially independent, learn applicable business skills and produce economic growth in their communities.

The Arc foundation is a long term solution because it fuels local entrepreneurs in struggling communities.

Take Fitih Tesfaye, the owner of Shega Shero Eatery in Ethiopa, for example. Although financial aid by an organization such as the UN would have supported her for a certain period of time, the fundamental issue with her business—a lack of a point of difference—would have remained unaddressed and she would have eventually found herself struggling again. By realizing the growth of the food production market during an Arc Initiative workshop, she was able to pivot, modify her value proposition and is now contributing to her community’s economy.

In my eyes, solving the world’s problems requires a collaborative effort from a variety of charities and social enterprises—not just one.

Additional Sources: “In a crowded market, entrepreneur finds a sweet way to stand out”

Image Sources: (1) Google Images (2) Sauder UBC

Only today, Blackberry’s stock increased by 6% after CEO John Chen discussed future expansion and partnerships with Chinese firms. Interestingly enough, in a blog post published a month earlier, Minhan (Micheal) Hao recommended that the smartphone company concentrate on the low-income Chinese market because Apple’s high price-point created an economic opportunity for a cost leader to emerge. I applaud my fellow classmate on his foresight, however I propose a contrasting recommendation for where Blackberry should go from here.

Blackberry has the potential to bounce back if it can prove to Chinese businesses that it truly is the leading provider of secure smartphone devices.

Considering that the most appealing points of difference for Blackberry are its enhanced security and privacy features, I advise John Chen to position the brand as the most secure platform in the minds of Chinese business owners. Targeting foreign businesses is a much more logical approach for the company as it is consistent with its current strategy in North America. Regarding Michael Hao’s suggestion, despite the fact that Apple is not prominent among the lower-income Chinese market, there are many local competitors, such as Xiaomi, who are popular for their affordability. These firms have a price-competitive advantage as they can significantly reduce production costs due to their locality.

Focused market research is necessary for Blackberry to appeal to a new customer segment in a foreign market.

To implement my strategy Blackberry will need to conduct exhaustive market research to find ways in which it can better relieve the pains of these Chinese enterprises through its value proposition.

Pay  a visit to Michael Hao’s Blog!

Image Sources: (1) Google Images (2) Google Images

Corporate Social Responsibility (CSR) and Creating Shared Value (CSV) are important concepts which are often inaccurately used as synonyms for one another. From my understanding of “Creating Shared Value” by Michael Porter and Mark Kramer, CSV supersedes CSR. As depicted in the excerpt (left), societal benefit is much more central to CSV programs in comparison to CSR programs, and it is seen as an opportunity to maximize profits rather than an obligation that increases costs.

From those which reduce pollution to those which donate portions of sales to charity, we can name many socially responsible companies. However, naming a corporation which integrates CSV into their business model is challenging. One such company that I have followed ever since its appearance on Dragon’s Den is Ten Tree Apparel. With its business model centered around planting trees for every clothing item purchased, the brand has not only reached the innovation stage of sustainability, it has also differentiated itself from other clothing brands and established a competitive advantage over them. The key activities which Ten Trees employs to create shared value are outlined in my diagram below.

Ten Tree Apparel’s customer segment consists of environmentally concerned individuals. The company is able to appeal to these consumers by implementing the above-mentioned practices. In doing so, it epitomizes the central idea of CSV: maximizing profit by solving society’s problems.

Check out their pitch on Dragon’s Den. 

Additional Sources: http://www.tentree.com/ca/company

Image Sources: My own screenshot and value diagram.

Youtube Video: https://www.youtube.com/watch?v=4oe8w998E00

While not as recognized as Steve Jobs, Tim Cook has great influence over Apple’s corporate culture and brand image.

Recently Apple’s CEO, Tim Cook, publicly announced that he is “proud to be gay”.  In “Thank You Tim Cook”, Magaret Munford, an MBA student from Duke, describes how this impacts her personally as well as “any community that has struggled to hear its own voice in the crowd,”. While I appreciate the manner in which Munford connects with the news on a very personal level, I would instead like to expand on the impact this will have on Apple as a corporation.

Tim Cook’s coming out will certainly have a positive influence on Apple’s corporate culture, which is centered around innovation and efficiency (depicted in the video below). The announcement indicates to employees that the workplace is an inclusive environment that encourages everyone to express who they are despite sexual, racial and religious differences. More comfortable employees will consequently be more creative and efficient.

Of course, there is also the benefit to Apple’s brand image from the publicity Tim Cook is receiving as the first openly homosexual Fortune-500 CEO. While consumers currently perceive the company as the leading innovator in technology,the real point-of-difference for Apple is the experience associated with its product and name. What could be more appealing to buyers than associations with a company which exemplifies equality and tolerance within the workplace and society?

Additional Sources: “Here Are All The Openly Gay CEOs In The Fortune 500”

Image Sources: IB Times

Youtube Video: https://www.youtube.com/watch?v=X9SK052cF3c

In Jalees Jaswal’s “The Power of Instragram,” she describes how Brandy Melville, an “LA inspired clothing store” has gained popularity within a competitive clothing retail industry through its effective use of Instagram to appeal to its young female target segment. In my eyes, the company’s success demonstrates the “performance gap between companies that embrace technology and companies that resist it” that Erik Brynjolfsson mentioned in the article we read for our class readings. Although Brynjolfsson’s view is concerned with the internal operations of a business, I believe the same applies externally. Brandy Melville was able to recognize and capitalize on the way the social and technological trend of Instagram aligned with its “trendy clothing” value proposition.

Brandy Melville’s Instagram only features skinny, Caucasian models.

While the company’s use of social media to differentiate itself is commendable, there are some ethical concerns which need to be addressed. The retailer only showcases skinny, Caucasian models on their website and Instagram (above image). Furthermore, Brandy Melville only offers a single size—small. I understand that this activity is legal and allows the company to focus on a niche customer segment, however, I believe that—in conjunction with their value proposition to deliver fashionable clothing—it sends the message that only white, small-sized females can be fashionable. Not only does this hurt their brand image among other women, according to Porter’s Five Forces it also restrains the business through an increase in buyer power created by a smaller number of consumers in their target market with lots of alternatives to choose from.

It is a shame that a company with such an innovative marketing strategy has elected to disregard corporate ethics in today’s world.

Check out Jalees’ entire blog!

Image Sources: (1) “Brandy Melville Reopens on N.Main St. in Downtown Walnut Creek” (2) Brandy Melville’s Instagram.

The hospitality industry has high barriers to entry due to the need for considerable capital investment and dominant industry leaders such as Hilton taking advantage of economies of scale. Nevertheless, AirBnB is emerging as a notable competitor through disruptive innovation. The “online community marketplace” appeals to the low-end market by making travel more affordable while creating value for local home owners with unoccupied living space. AirBnB has grown rapidly in the last few years and boasts users from across the globe.

AirBnB’s value proposition: A simple online platform which allows “hosts” to offer idle housing for short-term rent to discount-seeking travellers looking to minimize their travel costs.

Its only revenue stream is commision from both parties, and it is able to offer its value proposition by keeping margins low and sacrificing the quality of service which accompanies a traditional hotel chain.

My PEST analysis reveals the vulnerability of AirBnB in the future.

Recently, AirBnB received a $10 billion valuation from it’s latest round of funding. However, I would abstain from labelling it an industry leader just yet. While the business model is disruptive, it is also vulnerable compared to the traditional hotel chains, as depicted through the external threats in my PEST analysis above. Before AirBnB can progress, the company must conduct extensive market research to answer questions such as What level of quality are the discount-seeking travelers in our customer segment willing to sacrifice for the lower prices?  and How can we ensure that hosts are responsible and abiding by local law?

Additional Sources: “AirBnB’s legal troubles: what are the issues?”

Image Sources: AirBnB Website and My Own PEST Analysis

Growing demand for oil in Asia is an economic opportunity which the Canadian oil industry has been trying to take advantage of for years. However, strong opposition from BC’s First Nations is an external social and political threat limiting companies like Enbridge from reaching the continent. The Nak’azdli have vowed to stop Enbridge’s Northern Gateway pipeline because they believe that it is not worth the risk of a spill on the waterways in their traditional territory.

Enbridge is trying to pay off First Nations rather than establishing positive relationships with them.

Today I came across an article in which Jack Toth, the CEO of a social enterprise which aims at forging positive relationships between industries and aboriginals, suggests that “businesses need to move from doing things for the [First Nations] and start being involved with them“.

This applies directly to Canada’s oil industry.

If Canada’s oil companies want to access Asian markets, they must include the interests of BC’s First Nations in their business models. Instead of simply offering these stakeholders a share in profits, corporations need to collaborate with them to figure out alternate routes and address environmental concerns.

In Enbridge’s case, however, I reckon it is too little too late. Their poor brand image, as underlined in an old post of mine, will prevent the Nak’azdli from accepting the Northern Gateway pipeline.

Image Sources: Google Images

Snapchat’s market value continues to increase despite no revenue stream.

Around this time last year Snapchat declined a $3 billion dollar acquisition offer from Facebook. Nearly a year later, the ever-so-popular mobile app is being valuated at $10 billion. Keeping in mind that the app does not have a revenue stream, one might wonder how it can be worth such a staggering amount.

Let’s take a closer look.

Looking at Porter’s Generic Strategies, it is clear that Snapchat adheres to a focus differentiation strategy. The company has differentiated itself from other social media apps by offering a unique photo sharing experience catered to the demands of the teenage market segment. The app is fun, simple and—best of all—free of advertisements. This user-friendly experience is why the number of active users is said to be over 100 million. Companies looking to acquire Snapchat are interested in its large, loyal user base—we are the reason it is worth so much.

While many believe the app needs to start generating ad-revenue, I believe it should continue providing the user-friendly experience which is expanding their user base. Eventually, with a greater number of users, Snapchat can subtly introduce creative advertising in order to become profitable.

Image Sources: “The Truth About Snapchat”

Ferrero—the maker of Nutella—was first to the chocolate hazelnut spread market in 1964 and has dominated ever since . When Hershey’s released an identical spread earlier in January of this year, however, Quartz business news suggested that “it might not be long before Americans are spreading Hershey’s, not Nutella, on their toast”. Almost a year has passed, yet the gap between Nutella and any other chocolate spread remains unchanged.

How come?

In my class readings I learned that it is a mistake to challenge a clear leader of the market head-on in an effort to displace it—which is exactly what Hershey’s is doing. In a market where Ferrero’s Nutella has dominated for years, it is only natural that the chocolate hazelnut spread lover in all of us compares every new similar product to theirs. A second-place company offering a similar value proposition at a similar price has to work twice as hard to shift consumer opinion.

Nutella and Hershey’s Spreads are nearly identical products.

So what can Hershey’s do?

Instead of trying to displace Nutella, The Hershey Company should spend the same amount of effort claiming a new, unoccupied position. Perhaps they can produce a healthier alternative and market their spread as the healthiest chocolate hazelnut spread.

Until Hershey’s claims a new position or repositions Ferrero’s Nutella they are simply wasting their time.

Check out a super official review I found on youtube: 

Image Sources: “USA: in arrivo l’anti nutella”

Youtube Video: https://www.youtube.com/watch?v=h6xWdL-ZsKA

Before Enbridge began work on a pipeline in the Livingston County of Michigan two years ago, the Calgary based energy delivery giant promised residents that it would leave their properties in better condition than [it] found them. However, minimal time and money were spent on restoration. Many locals have recently begun raising concerns about the company’s lack of consideration for business ethics.

Enbridge has faced criticism from activists and environmental groups in the past.

According to Milton Friedman’s stance in “The Social Responsibility of Business is to Increase its Profits” Enbridge carried out its social responsibility by maximizing profit and minimizing cost for its shareholders. Meanwhile, granted the Stakeholder Theory, the company will suffer as it did not act in the interest of a major stakeholder—the local community.

Which one is right?

In my opinion Friedman’s argument is outdated. In the information age, corporations cannot neglect business ethics without someone taking notice. While Enbridge’s practices were legal, they were socially irresponsible and unethical. Considering the backlash their Northern Gateway Pipelines Project has received from British Columbia, this recent happening will only add to the criticism they face. Their disregard for corporate ethics in Michigan will become a weakness for environmental groups and First Nations of British Columbia to exploit as the Northern Gateway is delayed for a few more years.

Image Sources: “The Solution – Putting the Brakes on Canada’s Tar Sands”