Justin's Blog

Source: http://www.bbc.co.uk/news/business-17479818

Hermes, as we all know, is a French multinational luxury goods company. According to Porter’s Generic Strategies, Hermes is adopting a differentiation strategy. The unique, highly delicate handbags are valued by customers as they are different or better than other handbags. The highly-priced products will more than cover its cost (at least more than 20 times!!) and generate immense profit.

Hermes is family controlled and therefore, their business ethnics and attitude to product quality is consistent. Reputation for the brand is high too.

As developing countries have high demand for Hermes bags due to an average increase in income, Hermes is even planning build two new leather factories in France. Its profit has increased immensely.

Source: http://www.bbc.co.uk/news/business-19879861

http://www.inquisitr.com/283653/beats-audio-bought-back-shares-after-htc-failed-to-meet-contractual-obligations/

http://www.slashgear.com/htc-revenue-dives-30-as-phones-fail-to-impress-06200223/

As Apple and Samsung are fighting over the phone market, minor phone companies that were not able to keep up with the technology trend like HTC, Nokia and Sony Ericsson are squeezed away from the market. 

Image from: http://www.cultofmac.com/186954/apple-samsung-trial-verdict-samsung-infringes-patents/

According to one of the articles, the profit of HTC, a Taiwanese mobile phone company, went from NT$18.68bn last year to NT$3.9bn this year. Comparing to Samsung and Apple, HTC’s smartphones have nothing in difference, that is, no points of difference to impress customers.

The Beats Audio has bought back their shares from HTC because HTC has failed to financially support it, this means buying a HTC phone no longer comes with a pair of beats headphones.

People complained that all HTC phones has similar design and shape. Their technology is not able to keep up with the monopolies, bad camera, so-so screen and heavy. People no longer think HTC is cool and therefore, its profit plunged.

Source: http://www.economist.com/node/21564344

http://www.dailymail.co.uk/sciencetech/article-2182806/Facebook-share-price-hits-time-LOW-revealing-83million-FAKE-accounts.html

http://www.care2.com/causes/facebook-stock-fall-to-almost-half-the-original-price.html

Facebook is definitely one of the top innovations in the 21st century. Facebook is a unique company, it does not work like Lululemon, Starbucks, Walmart or Channel, it is a social networking website that first came into market in 2007, containing billions of users now. Facebook’s earnings are mostly from advertising. With an enormous user base all over the world, Facebook serves as a perfect platform for advertisements  Advertisers can easily identity target groups by looking at their interests, age, gender, job, education, culture, e.t.c-way more effective than advertising by email/mail. These points of difference made Facebook stand out from other social-networking website like Mingo and Myspace.

“SINCE its stockmarket flotation in America earlier this year, Facebook has seen its share price plunge as sceptical investors have dumped its stock.” Facebook’s share prince has been dropping since it lanched IPO, from the intial 38 to 20.4 today, the causes of this fall are more or less about Facebook’s failure to generate ad revenue and the fact that it has more than 83 million fake accounts.

Facebook should find new ways to generate revenue such as setting up its official online stores to provide a convenient environment for consumers and designing signature tangible products that make its company and the society more connected.