Month: November 2010

Ideal Sponsorship

An emerging industry that is globally respected is the sporting entertainment industry, with over thousands of sports that are recognized world wide. The demand for viewing these sports, in combination with the current technology available for us today, offers companies, such as Bell, to supply the demand for satellite television viewing and online viewing of these sports. In major sporting events, the competition between sponsorships are very high because of the common goals of major companies, brand awareness. Ideal results of sponsorship is the increase in the company’s market shares. However there are multiple variables that need to be considered in order to create an ideal sponsorship and a good marketing investment, this includes: financial growth in revenue with minimal cost, product awareness within the market, positive media exposure in local and possibly national levels, and future opportunities for the company through the sporting event sponsored. As a result, Bell must analyze these variables and possible risk, when deciding whether or not to become the official sponsor for the Vancouver’s 2010 Winter Olympic Games (VWOG).

Costs

In achieving an ideal sponsorship, companies like Bell, must calculate the cost and risk of how bidding for a sponsorship will affect their company. Bell’s initial decision to sponsor the Vancouver 2010 Winter Olympic Games included a leap of faith, as they submitted an unsolicited proposal of $200 million dollars. This cost may have been strategically taken to avoid additional marketing cost as they represent the VWOG, and as said by Bell’s CEO Michael Sabia used as a “brand-building exercise”. This $200 million dollar investment can be compared with marketing cost because a 30-second advertisement during the annual Super Bowl can range between $2.5 million to $2.8 million . For Bell to have made a worthy investment they must satisfy these marketing goals:

1. Their financial records must show that their profits outweigh the $200+ million spent as well as their additional either now or in the future.

2. Achieving long term visions such as expanding successfully to the west, improving corporate image, creating loyal customers.

…continued

Before

Bell’s objectives for this proposal was to gain a 1% increase in market shares and use this experience as a “brand building exercise”[1]. Bell was a relatively small company in the west before the 2010 Winter Games, using this change, Bell took the risk of proposing $200 million to bid for the position of official sponsorship.

After

Bell’s third quarterly statement for 2010 explains that their operating income has increase by 15.6%, from $583 to $674 (in millions) while TELUS’ third quarterly statement for 2010 has an increase in their operating income by 2.43%, from $493 to $505 (in millions)[4,5,6]. Although Bell’s operating income increases, it is not the same as market shares, however these statements do provide a good estimate of the share of market gained by each company. In Canada’s wireless market, “more than 95 percent belong to Rogers Communications Inc., Bell Canada Inc. and Telus Corp[7].” In this case, a relative increase in revenue from one company results in a lost in another. Another reliable trend that can help us determine the success of Bell is the stock market in which BCE and T are invested in (Bell and TELUS); the stock price was analyzed and in figure. 1 [8] Bell (BCE) has a 67.4% increase from Jan2009 to Jan2010 ($20.46 to $34.24), meanwhile TELUS (TU) experiences a 64.91% increase from Jan2009 to Jan2010 ($26.76 to $44.13). This percentage increase is vital as we can see that the winter olympics have not only increased their stock prices but also has produced a new market for their company. Leading on, Bell says that “Winter Olympic [has] helped push ahead the deal in purchasing CTV [10].

Summary

Bell’s investment in the 2010 Winter Olympics was beyond successful. Through Bell’s proactive use in marketing during the Winter Games they have carefully positioned themselves within the west, previously dominated by TELUS. Bell’s success is mainly seen in the long run, their $200 million will be a good investment because of Bell’s involvement in the 2010 Winter Games. Traits of good investment are shown as their stocks are rising, market shares are increasing, and their brand is recognized all over the western coast. I believe that Bell will slowly but surely surpassed TELUS in terms of growth of target market, brand recognition, and sales.

Problems with Retraining in our current Economy:

In our current economy “changing careers later in life isn’t easy, and governments continue to fund retraining programs at great expenses.” Evidence from an earlier paper suggest that there’s “little evidence” that current retraining programs are helping. Craig Riddell, an economic professor at the University of British Columbia explained that training wasn’t simply the answer, he suggested that mobility assistance would be just as effective. This meant moving people from areas of limited opportunities to areas where there was a higher demand / offering more opportunities.
Noticeable barriers that need to be evaluated are the slow pace in job creation. In a interesting “youtube” clip called “Did You Know 3.0” very similar to the clip shown in my comm 101 class “Social Media Revolution”. These facts portrayed the evolution of our world in terms of technology, culture, and education. One fact that is especially applicable to the lack of job is: “We are currently preparing students for jobs that don’t yet exist”. This shows the overwhelming amount of change in our future as well as the lack in current jobs in this day.
Other barriers that workers experience is age discrimination as they must “compete [against] younger, applicants with more experience in the new field.” These barriers are very problematic as immigrants arrive at Canada certified as MBA’s and PHD’s in their home country yet, their diploma and education is refuted in Canada. This imbalance is disruptive in our economy as these knowledgable individuals are stuck in a situation where they must find a middle class job, yet have a skill set that can be utilized in higher education.
Conversely, the barrier or lacking education is also apparent, however the expenses of education can not usually be financed by many individuals creating a large workforce that lack job opportunities. These barriers, combined with the unpredictable labour market demand. The fluctuations can vary from year to year making our current economy unstable.

Recommendations and thoughts:

In the article, apprenticeship, co-op programs are highly recommended as they tend to improve outcomes in our economy. I believe that the ultimate strategy is to drive our current education system in creating new jobs and developing alternate job opportunities at lower scales, requiring less specific skill sets.

Recently, HP was caught in a sex-scandal through their CEO Mark Hurd, who was allegedly prosecuted for sexual harassment. Not only does HP offer a mission statement that is ethically geared but are known to be well rounded in their methods of business. With this new reputation, they let down the company name as well as the customers who had put trust in this company. I believe that this sex scandal has directly affected the lower management within HP because of the way  the culture of this organization is sculptured. Not only is this company bonded by hierarchy but also directly affected by what is said in the upper management. Mark Hurd was suppose to “lead with dignity and unfaltering integrity”, however his actions prove otherwise. With their organizational culture being conducted and lead from the top, this misalignment has caused multiple infractions for this company. Some of this involve the complacency of new executives, lack of leadership, poor decision making, and lower productivity. The way in which Mark Hurd conducted his initial leave and absence after this incident was unprofessional and proved the lack in ethical standard he had in his own personal life. As well, the lack of understanding of subculture is an influential factor that was not taken into account during Mark Hurd’s “reign” in HP. Final words, the need for high moral code and ethical standard of living is dire in upper level management for a company to succeed and flourish in this world.

Compared to many businesses that are mainly based on the income of sales, Facebook emerges as a new business through its ability to produce a service that surpasses any seen before. Mark Zuckerberg, born on May 14, 1984 started “The Facebook” in Harvard in 2004 of February and was originally a concept that would encompass the idea of a social network for those in Harvard. Soon after, this network flourished and became open for all those who had computer access.

This business, originally did not have too many financial goals in mind, however, the explosion of members created a new image and reputation for this now, widely renown social network. Zuckerberg was not only brilliant in his ability to program but his profound insight in creating a network that drew everyone onto this webpage. Approximately 3 years later, with over 1-million users Zuckerberg carefully and thoughtfully implemented advertising that not only were accepted by world renown businesses and gave him an enormous sum of revenue.

After the company had reach the 500 million-user mark Zuckerberg explained: “I guess we could … If you look at how much of our page is taken up with ads compared to the average search query. The average for us is a little less than 10 percent of the pages and the average for search is about 20 percent taken up with ads … That’s the simplest thing we could do. But we aren’t like that. We make enough money. Right, I mean, we are keeping things running; we are growing at the rate we want to.”

Under the definition of Entrepreneurship from the “quickmba” website, Facebook not only falls under all the categories as “Amount of wealth creation, Speed of wealth creation, Risk, and Innovation”, but also is seen as one of the worlds fastest growing internet website in the world.

THANK YOU MARK ZUCKERBERG FOR HELPING US CREATE A WEBPAGE THAT LEAD TO AN INSURMOUNTABLE AMOUNT OF PROCRASTION BEFORE EXAMS!