Kateryna Baranova's Blog

CCTV Reports Starbucks Prices Higher in China

Recently I read Nikola Nedev’s blog about Starbucks prices being higher in China than anywhere else in the world. Though Starbucks can easily pull this off because of its strong brand image and low competition, it is really unfair for it to do so. The company can probably face problems for doing this as they are discriminating against Chinese people and making them pay more. However, a company’s goal is to maximize its profits and by charging more in China, Starbucks is able to do so. Even though Starbucks is able to get away with this right now, they might not be able to later, when more people find out about this and possibly substitute Starbucks with another brand, causing the company to lose customers in the long run.

http://www.huffingtonpost.ca/2013/11/16/lululemon-online-petition_n_4289334.html?utm_hp_ref=canada-business&ir=Canada%20Business

After reading the article on Lululemon founder’s comments and the reaction of society to them I was at first a bit shocked. Chip Wilson said that “some women’s bodies “just don’t actually work” for his company’s pants”. This comment got him and his company in quite a lot of trouble with their customers. People were complaining about the quality of Lululemon pants, but instead of addressing those issues straight away, Wilson tried to stand up for his product. His company should have analyzed the problem that they were facing and develop strategies to overcome it instead of insisting on what they had to be the best way. As an online petition is being signed now against Lululemon, the company should take rapid action to address this and avoid dealing with further problems. If more size variety and thicker material is what the consumers want, then the company should consider that.

IKEA Buys a Wind Farm

From Mina Willet’s blog post I was really glad to find out that such a big company with a huge brand name as IKEA bought a wind farm to support sustainability.

I believe that this will improve its brand image and get positive feedback from a lot of people. As this is getting a lot of publicity it is also free advertising for them. I believe that all this will lead to a boost in its sales. By buying a wind farm, IKEA is making a statement that it is trying to be sustainable. Hopefully, if this turns out well for IKEA, for which I see no reason not to, then more company’s will follow its example.

Being responsible for our environment is very important and large company’s that can afford to support sustainable practices should do so for the good of the society as well as their own.

McDonald’s. How does the company do it

McDonald’s has grown to be a very big brand that stands out and is known almost everywhere in the world. Though the company is doing really well and trying to improve in different ways there are some suggestions that I would give it.

It is not a novelty that people have been concerned with the quality of the food in McDonald’s. This sufficiently decreases the company’s brand issues and raises a lot of health and nutrition concerns. I would recommend that McDonald’s focus more on the quality of its products. For example I don’t want to buy McDonald’s because I don’t know what it’s made out of and I am concerned for my health. It would benefit the company in the long run if they invested more into creating quality products. It would potentially increase their sales as everybody wants to eat something healthy over something that is not.

http://www.theglobeandmail.com/globe-investor/investment-ideas/airline-stocks-may-have-further-to-climb/article15472165/

Air Canada is a great example of a company that used a series of different strategies to grow and maximize its profits successfully. The article talks about how Air Canada was able to maximize its profits by cutting down on costs combined with improving revenue trends.

The company must have used many financial and accounting tools in order to calculate how they can minimize their costs without decreasing their quality or getting into long term problems. Air Canada’s shares has thus also rose a great deal. Everything seems to be going well for them which shows their good planning skills. It is really important as well as hard to be able to cut down on costs and not loose customers.

In my opinion good management and decision making are two critical factors that make a company successful. Air Canada is an example that supports this by growing at steady rates and having a positive brand image.

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/chinas-pollution-woes-fuelled-by-corruption/article15481617/

China’s environmental situation is very critical right now. The article discusses the matter of pollution in China, specifically air and water pollution and who has to be held responsible for this as well as what can be done to solve this issue.

After living for the last three years in a big industrial city in China, I can relate to this article as the air that people have to breathe there can be hardly compared to any other country. The author of the article believes that the core problem causing this is the corruption within the government and its dictatorship. I  can see the point there and I can agree that this does have a relatively big effect on how and when the pollution problem will be solved.

However, my own opinion is that it all starts with the people who are in charge of the factories and corporations that cause such severe pollution. Many of them have nothing to do with the government. If they realize that they are responsible for the current situation in China and start taking action in order to reduce their environmental impact, that will help stop the cause of the problem. Though they will have to invest more in the short run, in the long run they can up better of than they were and also improve their brand image that will hep attract more customers.

http://www.telegraph.co.uk/finance/newsbysector/transport/7422698/Employee-warned-Toyota-boss-in-2006.html

Is the only responsibility of a company to increase its profits? How important is it for a company to remain ethical?

Toyota’s leaders preferred to maximize their profits in all possible ways. The article talks about one of Toyota’s employees warning his boss that the way the company is working to increase its profits will not lead to anything good. Unfortunately for Toyota he appeared to be correct. In a few years after his note to the boss, the employee’s concerns became a disastrous reality for Toyota.

The company has been cutting down on the quality of its products to increase their profits and as a result they ended up with low safety products that made them responsible for the injuries of many people. Also, Toyota had temporary workers and “amateurs in charge of the company”. Though all this did increase their profits in the short run, in the long run they are now doomed to face great losses as well as getting a negative brand image for their actions.

Toyota leaders made bad short run decisions ignoring being ethical and acted only in their own interest which eventually put them in a bad place and got them into big problems in the long run.

http://business.time.com/2013/09/24/the-fatal-mistake-that-doomed-blackberry/

There have been a lot of articles about Blackberry lately. This one in my opinion analyses Blackberry’s downfall the best. The article talks about Blackberry being really big and growing at amazingly fast rates in the beginning as it’s phone was a great sensation. After, because the company was unable to keep up with the customer’s needs and develop it’s product to fit the consumer demands, Blackberry’s sales went downhill even faster than they went up in the beginning.

The company made a mistake of not being able to relate to what the consumers want and instead focused on what they thought made their product so appealing. Blackberry had to analyze their consumer market better in order to realize that the consumers no longer wanted the keyboard and would rather get a touchscreen.

It is really important to be able to relate to your consumers demands. Even though it is also good to maintain the points of difference for your products, it might not always turn out to be what the consumers are looking for. Keeping up with the progress in technology is essential, especially in the smartphone market.

http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/day-to-day/crumbling-cookie-sales-threaten-future-of-small-atlantic-bakery/article15436297/

I found the article on the small Atlantic bakery interesting because it is a case study about a small business that I can easily relate to. There are many class concepts that can be related to this article to help analyse the business.

The problem of the Atlantic bakery was that as it’s sales reached one million dollars, they began to drop rapidly at a steady rate of twelve percent per year. However, this problem was eventually resolved when the business took a series of steps to address the root of their problem and further actions for expansion of the business.

The Porters Five Forces could be applied in their situation to help the Atlantic bakery determine the weaknesses and strengths of their industry. This will help them come up with solutions to their own problems and create a strategy that will help them become more profitable and gain more power within the industry.

The owner of the company invested into expansion of  Kookie Kutter Bakery Ltd. to solve the problem of decreasing sales. Also, a new product, ginger snap, was introduced into the New England market. These actions successfully resolved the problem and the company’s sales began to rise again.

www.theglobeandmail.com/report-on-business/top-business-stories/neil-young-on-oil-sands-fort-mcmurray-looks-like-hiroshima/article14213233/

An article on the Globe and Mail News really caught my eye because it had a very interesting title: “Neil Young on oil sands: ‘Fort McMurray looks like Hiroshima'”. It is about Neil Young supporting alternative means of energy and production as well as commenting on the situation in Fort McMurray.

Even though Neil Young’s accusations saying that, “Fort McMurray is a wasteland” were rejected by Melissa Blake, there is evidence from other sources that describes what is happening in Fort McMurray and strongly supports his point. www.theguardian.com/environment/2007/oct/30/energy.oilandpetrol

This article raises a question whether it is ethical to make business knowing that even though the means of production will bring more money to the owners it will also greatly hurt the local population and destroy the environment. In this situation it is turning Fort McMurray into a “wastland” with “fumes all over” and local people dying because of health complications. Clearly Melissa Blake knows exactly what is happening at Fort McMurray, but still assures everyone that Fort McMurray is in no danger. It is in her interests to protect the company who she is working for and who is responsible for this.

However, it is not ethical to make money by destroying the environment and harming others. If it was ethical, no one would be trying to hide what is going on in Fort McMurray.