Month: September 2012

Market positioning is crucial for companies, it’s a war of positioning itself in the minds of consumers. In their book, Positioning: The Battle for your Mind, Ries and Trout points out the  importance for a company to occupy a position in the consumer’s mind.  Even if the company isn’t first in it’s industry, they can still grasp customers with successful marketing strategies, such as finding an unoccupied position or repositioning their competition.

Below are some interesting ads in the car industry. These companies not only announces their position in the market, they also try to reposition their competition.

From the first ad we can see how BMW is establishing their position by showing that they are the best car in the world, while limiting their competition, Audi, within South Africa. The second ad from Audi quickly responds and tell consumers they are consecutive winners in endurance racing, while BMW has only been chosen in 2006. Subaru took advantage of both companies and repositions BMW and Audi as winners of “beauty contests,” and positioned Subaru as the best engine.

Further Reading:  Product Positioning

There has been many dismissals  on corporates that don”t practice “business ethics” in a sense that they’re treating employees unfairly or causing environmental issues. But economist Milton Friedman simply points that business’s aren’t obligated to keep these responsibilities in his essay The Social Responsibility of Business is to Increase its Profits . 

One of his argument is that businessmen are hired to maximize the company’s profit not to preform social justices. The businessman’s primary responsibility is towards the business owners, and stockholders, and in which case their expectations for the businessman is to make money.

Another notable point is that if the business’s incentive is to sell a product at the most profitable price; the incentive of a costumer is to buy the product at the lowest. The addition of expenses on “social responsibilities,” would be like a “tax” on consumers, and they would be less willing to purchase. If everyone is for saving the environment why isn’t everyone driving a hybrid car?

So where does this bring us? I am merely introducing another side of the story, I do not stand on either arguments. But maybe next time before shaking fingers at “soulless corporations,” we can stop and consider if the responsibility is entirely on them.

Further reading: The Case Against Corporate Social Responsibilities

 Foxconn is one of the largest electronics and computer components manufacturer in the world, it supplies huge corporations including Apple Inc., Dell, and Microsoft . In 2010, eleven employees of Foxconn’s factory in China committed suicide by jumping off a building, and three more attempted. Foxconn was accused of inadequate management by forcing workers to work overtime in harsh working conditions. https://www.youtube.com/watch?v=tYEvo_5uwxw

Of course, Foxconn has a serious issue of poor business ethics, resulting in this tragedy. But what I find interesting is that Apple was also heavily blamed for being negligent, and socially irresponsible. Therefore raising the question, while taking care of their own employees within their corporations, should companies also be responsible for the working conditions of their suppliers?

And how should this problem of be resolved? How much profit is a company willing to give up in order to raise the working quality of workers?

The article in the link further reveals the situation after an investigation on Foxconn factories, examines the solution, and the effects of change.

http://business.time.com/2012/03/29/apple-agrees-to-labor-reforms-after-serious-foxconn-violations/

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