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Sometimes we look at a well-rounded business—innovative, possesses a broad consumer base, grounded in its mission—and wonder how they fail when moved to a new country. But even the Titanic was sinkable when it ventured through the unpredictable, reaching an iceberg that its engineers did not account for. Corporations are these large ships moving through a macro environment which hurls storms, icebergs, and in general, adversities in its way. Put into context, these adversities have much to do with the political, economic, and social differences that are difficult to grasp for foreign businesses.

Online car transportation giant Uber has made the decision to sell its business in China to its Chinese equivalent, Didi Chuxing.  Through a political lens, China has always taken the extra step to block out or minimize the influence of foreign businesses in their country. This is nothing new in particular, as Silicon Valley’s established tech firms, such as Google, Apple, and Facebook, have all been victims to the country’s strict policies. Back in April of 2016, China shut down Apple’s iTunes movie streaming services, as well as iBooks, both of which are some of Apple’s greatest platforms. The well-reputed eBay has also lost to its Chinese equivalent of e-commerce Alibaba’s Taobao, and was eventually forced out of the market entirely.

Didi Chuxing kiosk in Shanghai

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Uber has learned its lesson from its predecessors, that business in China has much to do with “bending” in conjunction with the government, or else it would be likely that they will “break,” and evaporate from the Chinese market. No doubt Didi Chuxing has the majority of the Chinese market share, so if Uber did hold its ground in China, and continued to compete for the market leader position, it would either have no reciprocated response from its consumers (because Chinese consumers have gradually become more nationalist in their service selection), or the government might lever more burdensome regulations on Uber, as we have seen in the past.  When laid out in this way, it seems Uber has made the right decision to sell its Chinese business to Didi Chuxing, though ending its plans for global dominance along the way. But it has, in the very least, saved itself from being plucked out of China, and with its new partnership with a native business from China, Uber has actually won itself a very valuable mentorship opportunity. As Tim Bajarin, president of Creative Strategies, puts it, “China is a very different type of culture, and from a governmental standpoint, it’s a much more closed approach to business.” At second glance, Uber has actually mitigated its political threats (and the economic threats that come with it), and social/cultural concerns through this partnership with Didi Chuxing.

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The first impression when someone mentions keywords like “business”, “corporation”, or “marketing” might be an image of a stereotypical group of snakes-oil businessmen gathered at a meeting, discussing ways in which they can trick the money out of the customers’ pockets. Whether or not that is your current impression, there always seemed to be an air of unethical behavior that surrounds the idea of capital markets and business, due to its prioritization of generating profit.

And businesses are entirely aware of this situation.

That is why companies, such as TOMS, that generate revenue streams from social responsibility are successful. Reading my peer, Sofia Martinez’s blog post on TOMS induced a curiosity in the emerging ethical businesses, which claim to be brands for humanity, evident in Sofia’s comment that TOMS’ business model of ‘one for one’ accounted for the majority of its popularity. A particularly applicable phrase was, “[TOMS] has appealed to a new market where ethically responsible consumers choose these … shoes because they feel like they are being part of this social cause.” The subtlety behind the words “feel like,” foreshadows the cons of these businesses that capitalize on consumers’ desire to feel justified in their purchases. TOMS Shoes make it easy for the customer to forget that they are a business, and perceive them as a fundraising company dependent on charity―an intelligent way to position themselves compared to other shoe companies.

Businesses are quick to move as they notice a new way of marketing, in which philanthropy can be capitalized upon. What happens when other businesses are a carbon copy of your own? Harvard Business Review’s Umair Haque’s post on this exact situation introduces Pepsi Co. as an example. He proposed the idea of businesses moving from “great” to “good” due to this concern of duplication in markets. Pepsi Co. is a “great” company in aspects of generating revenue, and scale of operation, so why should it go from “great” to mediocre? You might have guessed, “good” means something else. It embodies social responsibility, and humanitarian causes; intangibles that many consumers are far more concerned of than before. There are many companies selling sugar water out there, and most of them more or less taste the same. Instead, businesses must be the ones to give consumers a reason to purchase.

Pepsi Co. employees volunteer around the world. Source

Does business smudge the line of real altruistic behavior? There is no definite answer. Being “good” is the new rule to survival. It is imperative for businesses to understand that customers no longer choose them solely for their products and services, but for their values. Personally, I don’t see harm in practicing ethical businesses if consumers’ money is going towards the cause the business claims it to be.

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Sources:

Haque, U. (2010, February 03). The Great to Good Manifesto. Retrieved October 30, 2016, from https://hbr.org/2010/02/great-to-good

Kate. (2012, April 16). TOMS Shoes: Doing More Harm than Good? Retrieved October 31, 2016, from https://bizgovsociii.wordpress.com/2012/04/16/toms-shoes-doing-more-harm-than-good/

In high school, I found myself asking the same question as my peer, Prakruti, why is Starbucks so successful? The drinks were delightful, but product simply isn’t enough for any business to expand to this size.

My curiosity ultimately led me to submit a resume to a local Starbucks store, and though I was only a barista, I had a peak into the organizational structure of Starbucks that was systematic and efficient. Management goes from a shift supervisor making sure a barista performs cycle tasks on time, to a district manager, coming in to inspect for cleanliness. And while I strongly agree with Prakruti that employees are highly valued in Starbucks (there were additional benefits, such as a free pound of coffee a week), the company’s ability to retain and grow customer loyalty is its most critical feature in distinguishing itself from other coffee chains–its points of difference. The idea that the “customer is god” deeply rooted in Starbucks culture. However, this slogan only sets the bottom line for how customers should be treated. It’s not just about customers being right. Greeting consistent customers by their name, learning names of new customers, having small talks, or even just simple grin and a “thank you, have a great day,” are encouraged to manifest a sense of attachment in the customer. Starbucks keeps their source of profit close to them.

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The Starbucks’ Star Rewards program sends emails about promotions to members to help them earn stars faster, which means shorter time to a free food or drink once they collect 125 stars. And though Starbucks could profit from higher traffic if they were to lower the price of their drinks, Starbucks chooses to uphold its own reputation and “treat” their customers to free drinks. This concept of “free” is much more powerful in the mind of a customer than say, a cheaper cup of coffee.

The company also stays in check with its customers’ experience at Starbucks stores. A survey will automatically be emailed to the customer’s registered email if they paid with an activated Starbucks card. The survey is like Starbucks’ own primary market research, in which they ask customers to rate their experience at Starbucks from a scale of 1 to 10. Upon completion of the survey, Starbucks awards the survey taker with bonus stars, a token of gratitude for the customer’s time.

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And while other coffee stores around have been copying this form of operation that Starbucks practices, I do find myself biasing Starbucks more, because Starbucks was indeed the first coffee company that implemented such a sophisticated, well thought out loyalty program, and gained widespread popularity. Because they are first in the mind of many customers, Starbucks is irreplaceable.

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Five years ago, when the iPad 2 just came out I remember seeing long lines outside of every Apple location in my home city, Calgary. A few years later, the iPhone 7 is released and there are long lines outside of Apple stores again. What changed? Definitely not the long lines, but do the lines represent the same thing they did five years ago?

Before I continue, imagine grade seven me in the back of the car, holding a packaged iPad 2, brain buzzing with the thought of simply having an iPad. Though unable to pinpoint the exact source of excitement, I nonetheless knew that this excitement would not be so augmented if I was bringing home some other device from another company. For Apple, the purchasing experience, the packaging, the product, fit together seamlessly. Waiting in the line, I saw others just as excited for the new launch, and unwrapping raised goosebumps because it was just so fresh. Operating the iPad was dream-like. Unfortunately, these days are no more for Apple fans like me after Jobs’ passing. Apple’s lifetime can be clearly divided into “Jobs-days” and “no-Jobs-days.” If I could characterize each ‘era’, then I would note that “Jobs-days” constantly kept consumers feeling as if they themselves, were at the very edge of technological innovation. In the beginning of “no-Jobs-days,” people were quite forgiving when the iPhone 5 looked and operated borderline exactly the same as the iPhone 4S. A few years later, we would think that Apple has recovered from its shock, but as former The Wall Street Journal reporter Yukari Kane puts it, “the well for ingenuity has run dry.”

iPhone models list.

We start to see Apple being unable to live up to its own hype that it has accumulated for itself during the “Jobs-days,” and this is certainly obvious in the consumer response for the iPhone 7. The iPhone 7’s dual-camera, which was advertised as one of its top selling points, was merely dismissed as being ‘good’, as there are other smartphones in the market with comparably better cameras. So to answer the question, what are these long lines now, if before they represented an eagerness for innovation? To me, customers want to believe that Apple is just as inventive as before, so they purchase the product anyway. But this expectation is often unmet, the latest example being the iPhone 7, and consumers just treat it as any other old product they buy. Though Apple’s revenues have risen since Timothy Cook became CEO, the company is in danger of losing their reputation for being innovative if they fail to once again lead technology advancement. Apple used to be very distinguishable from other smartphone makers. Compared to before, Apple is now settling for less.

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Resources:

Spence, E. (2016, September 30). Apple Loop: New iPhone 8 Leaks, iPhone 7 Plus Camera Defeated, Fixing Your Broken iPhone 7. Retrieved October 02, 2016 

Manjoo, F. (2014, March 20). Apple After Jobs: Pretty Much the Same as Ever. Retrieved October 02, 2016

A topic that will remain controversial, is the question of the extent to which businesses have ‘social responsibility.’ Many noted economists, such as Milton Friedman, have vehemently rejected the idea that businessmen should act in a way that is considered socially responsible, such as, preventing product price increase in attempt to avoid inflation. Friedman argues that capitalism is in nature a system requiring individuals to act in a way that benefit themselves. Hence, acting socially responsible could conflict with the interests of the corporation, which definitely defeats the purpose of the free-enterprise system. Friedman argues ‘social responsibility’ as to being the role of the government, thus, if businesses put the objectives of social responsibility before profit, the free market system would be overcast by political aspects. For such arguments, it was widely believed that businesses should stay within their main focus of making profit, which should be their primary, or only, ‘social responsibility’.

However, these views may have changed with our modern business world, and newer ways of being ‘socially responsible’ have been uncovered. With technology and social media booming in our twenty-first century, it is extremely difficult for businesses to not think globally. McLuhan’s prospect of a “global village” is rapidly turning into reality. Regardless of race, gender, sexual-orientation, nationality, we have become multitudes more interconnected than ever before. With new situations arise new problems, and with new problems arise new responsibilities to solve these problems. Stereotypes and cultural clashes regarding different types of people have become more universally shared at the same instant that the world becomes more connected. As there are many cases of such social media platforms we can observe to possess this quality of unifying the world into a large hub of topics, Twitter is perhaps the best example of all. Its ability to push something to become the ‘next hot topic’ is a phenomenon we do not address anymore, only because it is a feature that we, the newer generation, are so accustomed to in our daily lives.

However, Twitter’s ability in shaping media trends cannot be ignored. It sees the social problem that our modern generation has, and is contributing its strength in media power to diminish these issues regarding differences in people, and focuses instead on the similarities everyone shares. Is not growing a community, where all members feel inclusive, a great example of being socially responsible? Twitter should be accredited for its aim in manifesting a platform where members feel a sense of belonging, and its programs in inspiring the employees themselves to gain awareness of the unconscious stereotypes we set for people we meet–the stereotypes which prevent this world to socialize in a manner that is non-discriminatory and unscrupulous.

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