Monthly Archives: October 2013

Low-cost tablet wars: You won’t find an Apple under every Christmas tree (http://www.economist.com/blogs/schumpeter/2013/10/low-cost-tablet-wars)

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The market for tablets is competing at a lower-price range. More companies (Amazon, Barnes, Tesco) are willing to produce low price tablets. Although such products do not produce high profit for the company, the business strategy is to link them to other products that the company offers. This would give consumers a feeling that they are facing a really good deal on a product, but after they purchase it, there might be other products linking to the previous one, that they need to buy as well in order to make them function together. (Well, I would think it’s still a good deal.)

It is likely in the future that more people will be using these products because they are cheap and they can provide mostly what Apple, Google, and Samsung do. However, it is true that they are not as efficient, but there is a wide range of customers interested in these kind of products because they cannot afford expensive tablets. I would conclude that these companies are managing with a cost leadership strategy where products are linked to one another and the companies are competing at a low-cost range.

Hail A Cab (https://play.google.com/store/apps/details?id=com.mtdata.hailacabhouston&hl=en)(http://www.economist.com/news/business/21588101-ever-more-cities-smartphone-apps-are-reshaping-taxi-market-tap-hail)

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Hail a Cab is a smartphone app for ordering cab service. The app target consumers in business, on vacation, and at home.  The idea is that it could create more convenience for customers. “Just tap to hail, and your cab will be on the way.” The app also provides cab locations at any time, where customers can pick the nearest cap by just clicking the button. In addition, Hail a Cab have future service for customers to plan their ride in advance. Instead of making phone calls for arrangements, it can be done through using the smartphone. Furthermore, Hail a Cab even remembers the previous drop-off or pick-up location. This can be a useful tool for customers who are not familiar with the area that they are exploring. Moreover, will a given I.D. on each trip, customers will know the arrival and departing time of their cab. (No More Guessing!)

Such improve in technology strengthens the customer relationships, that they will certain rely on the service for the convenience it provides. The channel of delivering the service is quite efficient as well (online). The value propositions of the business stands on a strong platform of delivering useful informations to customers.

Un-marketing rhino horn (http://www.economist.com/blogs/schumpeter/2013/10/business-conservation)

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“Rhino horn is sometimes ground to a powder, mixed with water and drunk. Rhino horn is made of keratin, like fingernails. Yummy!” (Natasha Loder). The product is a symbol of health and authority. People often buy it as gifts to one another. However, the high demand for such product creates a poaching crisis in South Africa.

The market for rhino horn has put the species in great danger. 668 rhinos were killed in 2012. Rhinos grow so slowly that such production cannot satisfy the people’s demand. Ironically, when legal trade for the product is banned, it does not reduce producers’ incentive to supply. This is because of the black market, where consumers are willing to pay more for the product.

A solution approached through spreading fear and uncertainty in the media, that consuming rhino horn is poisonous and can cause serious illness. Consumers are more likely to reduce the risk of getting sick, which lowers the demand for rhino horn. The media is a powerful source for products’ image and brand image. The government’s attack on value proposition wiped out consumer’s demand towards such market.