The other day in my Econ101 class, the professor suggested looking up a video by David Suzuki on externalities.

Although I disagree with his criticisms on economics as a social science, I do believe that sustainability should be a more prevalent concern for companies and society as a whole. This also ties into Week 3’s discussion on ethics in regards to how potential negative impacts may be disregarded in favor of generating more profit.

An article in The Guardian outlines a how companies deemed as “highly sustainable” differ in certain aspects from traditional businesses. It emphasizes that the current definition is too intent on concrete reductions, and that working to make the world better will in turn create value and influence how healthy the business will be tomorrow. Companies with sustainable cultures are managed with a broader set of standards, with a greater focus on the long-term and more open disclosures.

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I find that the perspective that this article presents is different from my previous ideas of “sustainability.” After reading, however, I can say that it has altered my stance on the subject, and I agree; instead of focusing on tight resource management and cutting down numbers, companies should see sustainability as a catalyst for innovation and positivity.

People have become increasingly reliant on modern technology, and businesses are constantly evolving to accommodate new trends and changes. Gracia’s blog post on Facebook offering $3 billion for Snapchat exemplifies this pattern.

Snapchat, a photo-sharing mobile app developed by CEO Evan Spiegel, has skyrocketed in popularity in the past year and gained the attention of Facebook Inc. A $3 billion buyout offer from Facebook was subsequently rejected. People briefed on the matter say that is is unlikely Mr. Spiegel will be considering an acsquisition or investment until at least early next year.

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I agree with Gracia’s point that Snapchat is not a sustainable company; much like Twitter, it has no tangible business plan and lacks strong revenue streams. I also agree that Snapchat’s popularity will not continue, and in the long-run its profitability is volatile. It’s hard to see how a platform based around disappearing pictures could be expanded, so once the appeal dies out there are no conspicuous options to pursue. With Snapchat rejecting such a substantial offer, it needs to take advantage of its large user base and find ways to generate profit.

Source: http://www.csmonitor.com/Innovation/Horizons/2013/1116/Why-did-Snapchat-s-23-year-old-CEO-reject-a-3-billion-buyout-offer-video

Fracking, or the fracturing of rocks by pressurized liquids, is a technique used that allows access to previously untapped oil and gas reserves. As a result of utilizing this technology, gas output has risen by one-third since 2005, and oil production has risen by 30% since a recent low in 2008. North Dakota, which is situated above the Bakken oil and gas field, has the lowest unemployment rate among all the states at just 3%. By 2020, IHS economists estimate that total manufacturing production will increase 3.5 percent thanks to lowered energy costs.

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These benefits, however, come with a multitude of environmental concerns and criticism.  The process involves pumping excessive amounts of pressurized, chemically treated water into shale formations, which may result in the contamination of drinking water. The gaps left in the rocks leave methane gas free to escape from underground, contributing to the issue of  global warming. Many people condemn the process as a pursuit for economic profit with a complete disregard of the environmental and social repercussions. Studies have shown that for businesses, there is a strong correlation between having a strong code of ethics, and being an admired company. If a company wants to be viewed in a positive light, ethical behavior can drastically skew the consumer’s opinion.

Sources:

http://www.energyandcapital.com/articles/bringing-fracking-to-the-uk/4011

http://www.bnd.com/2013/11/16/2907405/will-fracking-bring-jobs-or-environmental.html

http://www.theguardian.com/business/2003/apr/20/globalisation.corporateaccountability

McDonald’s is currently taking steps in order to improve their customer service, starting with the addition of a new drive-thru window.  This year’s average drive-thru time was nine seconds slower than the industry average, and was an all-time company low. In an attempt to facilitate the process speed, the chain is testing a “Fast Forward Drive-Thru” which allows customers to drive to a third stop if their orders are not ready.

Instead of introducing new items to the menu, US McDonald’s president Jeff Stratton wants to focus on “restructuring the production process.”  I feel that this is a very strategically viable move on McDonald’s part. A large part of their brand image puts an emphasis on speed and efficiency. Responding directly to recent customer concerns and acknowledging previous mistakes will likely improve people’s impressions of the business.   By catering to the customer’s needs, it will in turn strengthen their value proposition and improve customer relations.

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Source: http://www.huffingtonpost.com/2013/11/15/mcdonalds-drive-thru_n_4280859.html?utm_hp_ref=business

A recent Gallup poll found that over two-thirds of employees feel disengaged, unmotivated and fatigued at work. Another study in The New England Journal of Medicine found that interns who work 24 hour shifts made 36% more errors than those working 16-hour shifts, and were 61% more likely to accidentally injure themselves during procedures.  Arduous working hours make it exceedingly difficult for employees to find a work-life balance within their lives.

There is an obvious correlation between job satisfaction and overall motivation which can be explained by organizational behavior. I feel that when looking for a job, the work environment and whether or not I genuinely enjoy the tasks given play a significant role in choosing. Companies need to pay more attention to the needs of its employees; a positive organizational culture is essential to any successful business.

Google employees enjoy a variety of benefits, such as free haircuts
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Another survey of technology firms found that more accepting business cultures saw an average annual sales growth of over 140 percent, as opposed to 10 percent for cultures deemed less accommodating. Despite spending more time and money on the employees, it is ultimately more profitable as intrinsically motivated employees are more inclined to be productive.

Source: http://dealbook.nytimes.com/2013/11/10/powering-employees-with-more-than-a-paycheck/?_r=1

After completing an in-class activity about Lululemon, I was surprised to find a blog post by Ty McMahan denouncing founder Chip Wilson for a recent bout of offensive comments. Following reports of quality issues regarding pilling in newly-purchased yoga pants, the CEO responded by claiming Lululemon was not responsible.

“Quite frankly, some women’s bodies actually just don’t work for [the pants]. They don’t work for some women’s bodies,” said Wilson.

From a marketing perspective, these comments have been extremely detrimental to the brand image and its implications. Lululemon’s strategy is to not only sell their products, but to sell a “way of life”. By blaming women’s bodies and claiming that not everyone suits their clothing, Chip Wilson has effectively estranged himself from a large portion of his consumer base.

Competitors have also taken advantage of Lululemon’s declining market share; Macy’s is planning to double its activewear square footage in early November, with both Nordstrom and Kohl’s following suit. With a lack of distinct points of difference, I predict that Lululemon will be susceptible to competition from brands that offer a similar value proposition.

Sources:

http://www.huffingtonpost.com/ty-mcmahan/where-founder-fails-to-be_b_4268917.html?utm_hp_ref=busines

http://investorplace.com/2013/10/lululemon-stock-lulu-nke-ua/#.UodLMOIUJKk

The most recent list of the world’s most valuable brands has Apple unseating Coca-Cola for the first time from its #1 spot. Meanwhile, BlackBerry has fallen from its precarious position at #93 and dropped off the ranking altogether.

I noticed that Blackberry LTD’s current financial state has frequently been mentioned in class. A number of reasons can be attributed to their current downfall; an analysis of their competitive strength and business position by Porter’s Five Forces illustrates some of the underlying issues. The mobile phone industry is already well established so the threat of new entrants is relatively low. Buyer power, however, is high due a concentrated demographic that is actively seeking the best value for their money and therefore influencing prices. Most significant is the competitive rivalry with other brands; with Apple and Samsung capturing more than 50% of the Smartphone market, various other competitors are eager to increase their market share.  Since product differentiation is limited, failing to keep up with the innovations of rival companies consequently made Blackberry lose its momentum in the industry.

Source: http://business.financialpost.com/2013/09/30/blackberry-ltd-falls-off-top-100-global-brands-list-as-apple-takes-top-spot/?__lsa=0a67-5a93

I’ve often heard that before booking hotel rooms, you should clear your browser cache because sites will provide different offers depending on the information garnered from your cookies. One of the optional readings, “How deep are your pockets?; Personalising online price”  stood out to me, as I did not know that this method of pricing was so commonly utilized. The text explains how online retailers are being offered software that analyzes a user’s information to determine accurate pricing.  For example, if the same IP address repeatedly accesses a site, higher prices will be displayed as opposed to the cheaper rates offered to appeal to first time customers.

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This once again brings up the topic of ethical business practices. In a successful business, knowing and appealing to one’s target demographic in order to deliver value propositions is vital. If a company pays for a consumer’s information in order to evaluate their audience, however, I believe it is a blatant infringement of people’s privacy. Corporations need to be extremely cautious when employing such techniques; Amazon received backlash in 2000 when they sold DVDs at differing prices to see which web browsers were favored by shoppers unconcerned with cost.

Source: http://search.proquest.com/docview/1022920631

While browsing through the blogroll for my section, I came across an entry on Olivia Krieger’s blog that piqued my interest. Upon reading it, I recalled that a clicker question earlier in the week had sparked a very similar discussion; how concerned is Apple with the sale of iPods?

According to the statistics provided, iPod sales have been declining despite Apple’s growing dominance in the technology industry. I agree with the points made in Olivia’s blog regarding the diminishing purpose of owning an iPod. Today, there are a multitude of alternate methods to access music, whether it be streaming from platforms like SoundCloud or downloading third party apps such as Songza.

In most situations, companies should take advantage of opportunities for innovation in order to appeal to wider sections of their consumer base. For Apple, however, I feel like attempting to reinvent or restore attention to iPods would be a poor decision. Recent sales for iPods should be of little concern Apple considering that iPhones and iPads essentially provide the same functions and are much more prevalent in today’s society.

Source: http://www.intego.com/mac-security-blog/is-the-ipod-beginning-its-slow-demise/