Month: November 2010

When Case 3 mentioned ambush marketing, it reminded me of an incident in the 2008 Beijing Olympic Games. Li Ning, one of China’s greatest athletes of all time, was secretly chosen to light the Olympic cauldron during the opening ceremony. This honor brought him and his sports company worldwide attention and a prominent spot in Olympic history. On the other hand, Adidas, who spent millions of dollars to become a major sponsor of the Beijing Olympics, had to stand by and watch one of its biggest competitors in the Chinese market steal one of the biggest moments of the games.

Would this be considered as ambush marketing? If yes, it maybe the greatest marketing ambush in sports history. However, choosing Li Ning to light the cauldron is considered reasonable as he is one of China’s greatest sports legends. If it weren’t him, who else would be qualified to light the cauldron?

Another interesting scene is something that happens in almost every major sporting event. For example, we see that the official sponsor of the event is Adidas, but at the same time there are a lot of athletes wearing Nike uniforms. Note that Nike has no specific relationship with the event, but it has stratospheric contracts with a number of the teams and players in the tournament (Notice the boots and the jersey of the player in the picture above). Would this be considered as ambush marketing as well? Unfortunately, in my opinion, these issues are really complicated and there is no way to completely eliminate ambush marketing as long as it doesn’t violate laws.

References:

http://www.suite101.com/content/ambush-marketing-at-the-olympic-games-a168192

Any Real Madrid fans here? Maybe you would know about Rubén de la Red Gutiérrez, former Real Madrid midfield and of Spain’s squad at the victorious UEFA Euro 2008 tournament.

De la Red was a talented player who suffered from a serious heart ailment which put his career on hold for two years, until he finally retired in late 2010 at the age of 25. In January 2010, newspapers reported that Real Madrid was attempting to declare de la Red’s heart problem to be “a common condition”, and therefore find a way to annul his contract. As a consequence, the player would only receive a €1,500-monthly disability benefit, rather than the full wages due from the remaining two years of his professional contract, which was worth millions of Euros.

The case of de la Red actually reminds me of a class when we were talking about assets. What is an asset? By definition, it is “a single item of ownership having exchange value.” According to Jamie Flinchbaugh, assets are on balance sheets so that you can value your business particularly if you need to liquidate it. Banks provide asset-based lending and the assets are the collateral. Should people, or more accurately, employees be considered as collaterals? Basically I have no idea what the correct answer is. Many entrepreneurs emphasize that employees should be treated as partners, but in territories such as the professional sports world, athletes are treated as assets and are sold to different clubs or casted aside when they are no longer valuable.

What do you think?

References:

http://en.wikipedia.org/wiki/Rub%C3%A9n_de_la_Red

http://jamieflinchbaugh.com/2010/10/people-are-not-assets/

How does organizational structure affect companies? Issues that Hewlett Packard have can be a good example to this problem.

As the world’s largest PC manufacturer, Hewlett Packard has always been one of the most popular brands amongst laptop consumers. Since 2008 however, many customers have faced a series of issues with their HP laptops due to problems associated with faulty Nvidia graphic chips built into the computers. Many customers experienced glitches such as display flickering,system lock ups, crashes and failed reboots.

Many consumers believe they have been treated unfairly because their laptops have not been added to a list of affected machines issued by HP. This renders them ineligible for free repairs or extended warranties further exacerbating the lack of distributive and procedural justice.

HP’s organizational structure is strong in bureaucracy and it ensures that they are able to perform in a highly efficient manner. However, it creates subunit conflicts and reduces cohesiveness since each department is highly independent. The marketing department views selling the product as the most important task while the research and development department may believe that design and innovation provides more added value to a product, rather than the quality of it. This results in severe miscommunication as the feedback loop fails to function adequately leading to consumer technical and customer service support issues.

According to a report by Ethical Consumer magazine, Monsoon, the fashion retailer, was ranked last year as the most ethical company on the UK high street. The ironic thing is, Monsoon’s internal audits reveal its suppliers use child labour and underpaid workers.

Children were found working at subcontractors’ factories in India and China. Although the subcontractors were fired later, Monsoon still continues to work with the supplier involved. As some of you may know, Monsoon has been a member of the Ethical Trading Initiative for over 10 years. It employs an army of auditors and inspectors to check conditions, so how is it possible to find human rights abuses in their supply chain?

Samantha Maher, a policy coordinator at Labour Behind the Label, says “Most of the ‘ethical’ work done by retailers is little more than window-dressing”. Fashion retailers search the world to look for suppliers who agree to the lowest price possible, accept unreasonable terms of trade and take on all the risks and difficulties of producing clothing for the constantly changing taste of consumers. This cost and risk is inevitably passed down to the people at the bottom: the women and children in large factories.

Ethical trade is not just about satisfying consumers, it’s also about making a difference to the lives of millions of workers behind the scene. It’s time for Monsoon to really start taking action.

References:

http://www.guardian.co.uk/business/2010/nov/21/monsoon-supply-chain-retail-comment

http://www.guardian.co.uk/business/2010/nov/21/monsoon-child-labour-india