Monthly Archives: November 2015

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In one of Allison’s Cheng’s blog post, she talks about how the video game company Nintendo is planning to make its move into the smartphone gaming market. Nintendo is most known for producing physical gaming consoles thus this innovation opens a whole new market.

I completely agree with one idea Allison points out; the quality of the games can be compromised. I know about this because I have experienced it. Games that are played in gaming consoles are completely different when played in a smaller device such as the phone. Graphics, controls, character’s movements, and the whole gaming experience changes when one switches to a smaller device. However, not everyone possesses a gaming console but most do have a phone. Playing a game in a phone is more practical, can be done anywhere and does not require a whole setup, thus, this new move into the smartphone gaming market can turn out to be really beneficial despite the fact that the quality of the game is reduced.

However, I must disagree with Allison when she considers Nintendo’s move into the smartphone gaming market a disruptive innovation. Video game giants such as EA Sports, Sega or Activision have already entered this market with their professional and sophisticated games. Nintendo has not done so yet so we can’t decide whether its move will disrupt the market. If the company manages to revolutionize the smartphone gaming experience with their entrance, then this would be considered a disruptive innovation. Only time will tell.

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Although Australia is constantly found in the world’s top one percent for science and technology research papers,  it is falling behind on entrepreneurs and innovation. This is happening due to the fact that universities do not encourage students to become entrepreneurs. This poses certain dangers to the Australian economy because entrepreneurship and innovation can increase the country’s gross domestic product and in fact behave as a driver for economic growth. This is specially true in the case for technology start-ups.

One reason why Australian universities do not encourage entrepreneurship and innovation is because the government gives rewards to universities for the amount of research they produce. This limits student’s ability to learn since teachers and people they meet in the university are also driven by this same goal. If the university does not provide students with the necessary resources for them to create their own start-ups or start their process of becoming an entrepreneur due to government incentives, then the country as a whole is losing out on possible significant contributions.

This article has made me appreciate the fact that Sauder School of Business does offer me the option to pursue an Entrepreneurship career. This demonstrates that UBC takes into great importance the social and economic impact that students can make in the future rather than the amount of research they can create. By teaching students how to “think outside the box” UBC essentially wants to empower students to create positive changes.

In my opinion, Australian universities should start implementing entrepreneurship and innovation programs. At least in Sauder, I have seen that this is a really popular program and many first year students are eager to take it in the future. Additionally, many Sauder graduates have created their own start ups and are successful entrepreneurs. As the article states, to determine the effectiveness of such programs, Australia should conduct national surveys.

Reference:

http://www.smh.com.au/federal-politics/political-news/australia-falling-behind-on-entrepreneurs-and-innovation-new-report-finds-20151029-gkm4ov.html

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Chocolate brand Hershey’s will launch milk chocolate bars and Hershey’s kisses made out of locally sourced ingredients rather than artificial flavours. For instance, instead of using vanillin (artificial vanilla flavour), Hershey’s will actually use real vanilla. Additionally, lactose, a sugar in milk will not be used anymore to produce these chocolates.

This strategy is part of the company’s customer relationship segment. Since market research has proven that consumers are demanding less-processed food, the company is trying to meet this demand to increase and maintain their customers. Moreover, to accomplish this goal and to keep their customers satisfied, Hershey’s is also planning to launch a mobile tool called SmartLabel. This tool will provide nutrition information, facts and ingredients for all Hershey lovers.

It is important to note the Hershey’s is not only responding to a change in consumer’s demand. They are also responding to the nature of consumer’s purchasing decisions as holidays approximate. They are are producing chocolate without artificial flavours because in holiday seasons, people tend to buy better quality chocolates for personal consumption rather than to give them away as in Halloween.

In my opinion, using natural ingredients rather than artificial ones is a great strategy because doing so will allow the company to reach out to another market, the market that encompasses consumers that eat chocolate but are looking for healthier alternatives. Other companies such as Nestle, General Mills and Yum Brands have already done this so Hershey’s is in fact hopping on the trend bandwagon. Although using natural ingredients might increase the company’s costs, this can be recovered when the products are released.

This example clearly demonstrates that firms should always be aware of changes in demand. Tastes and preferences will vary so firms should respond to them.

Reference:

http://www.inforum.com/variety/3881418-hersheys-cut-artificial-flavors-switch-locally-sourced-ingredients-chocolate

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Toms and Sole Rebels are two shoe brands that have adopted a social approach for their business model.  Toms does this through the one for one business model where they provide a free pair of shoes to unprivileged children for every pair that is bought and Sole Rebels does this by employing local Ethiopan workers and promoting sustainable production by using only recycled and organic materials. In addition, Sole Rebels’ workers are paid 4 times the minimum wage. Although both businesses are trying to tackle the problem of poverty, they differ in one main aspect.

Sole Rebels addresses directly to the causes of poverty. They believe that the lack of jobs contributes to poverty thus they try to diminish this by providing local Ethiopan workers a sustainable job. Bethlehem Tilahun Alemu, Sole Rebels’ founder believes in the principle of “trade is better than aid” so she also believes that harnessing skills within a community will decrease the amount of poverty. On the other hand, Toms focuses more on alleviating the effects of poverty. They are not addressing the cause of the whole problem but are just putting a bandage on top of it. This has been criticized because some argue that by donating shoes, local manufacturers are undercut.

Without doubts, I support Sole Rebels because they are addressing the poverty issue from its cause. People are being trained to be productive and this is beneficial for the whole community because skills can be transferred. Regarding Toms even though the company has been criticized for undercutting local producers, I still support them because its founder, Blake Mycoskie has been learning from his experience. Upon receiving this criticism, he has decided to make some changes. Toms is planning to manufacture one third of the shoes they donate in the countries they are donating them to. Doing so will create jobs for the local community. I would still support this company even though this where not to happen because it is better to do something to diminish the effects of poverty rather than do nothing at all.

Reference:

www.shopforchange.tumblr.com/post/70063317324/socially-conscious-shoemakers-toms-solerebels

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Antonio Argandoña’s blog gives a clear idea of why being ethical in business is really hard. He focuses his points on one main idea: the nature of the tasks involved in leading a business makes ethical decisions really difficult.

I particularly found this blog interesting because the author argues that there are many psychological reasons why firms do not engage in ethical decisions. For instance, he mentions that firms resist to accept evidence that goes against their beliefs. This is called cognitive dissonance. This action has the effect of making firms continue with their decisions even though they might be unethical. Additionally, the author mentions that firms rationalize behaviors. Unethical decisions done by the vast majority will be presented as correct and since everyone does it, it is acceptable for a firm to also do it.

I especially support and agree with one of the author statements. He says that there is an abundance of inertia; since “that’s how it’s always done”, firms will continue doing the same thing. The author claims this as the “success trap”. Once firms find themselves in a position where everything is going their way, there is no tendency to change, no tendency to act ethically. In my opinion, this should be assimilated  as an opportunity for firms to differentiate themselves from their competitors. While some may feel satisfied for what they have already achieved, changing and trying to diversify the firm’s actions should be considered.

From this blog post, I have realized that although ethics is hard, it is necessary. The reason why it is hard is because there is usually a tradeoff in the short run between increased profits and acting ethically. Firms demand ethics to be profitable but this is not always the case. However, consumers are continuously taking more into consideration the firm’s ethics when making purchasing decisions  so this is a great opportunity for firms that do not fall under the “success trap” to start acting differently.

Reference:

http://blog.iese.edu/ethics/2015/07/09/why-is-it-hard-to-be-ethical-in-business/

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In Micaela Pfeffer’s most recent post, she blogs about how the company “Grey Goose” decided to create a marketing strategy before even releasing their product. This strategy has proven successful and even allowed the company to compete against #1 vodka brand “Absolut Vodka”. The strategy used by the company involved premium pricing, producing the product in France and targeting the higher social class.

In my opinion, marketing a product before its release can be effective because it allows the firm to drive their product vision. In this case, “Grey Goose” unique value proposition was based on the idea that unlike “Aboslut Vodka” its drink is targeted to the high class and as Micaela states to “those who could give a prestigious image to the brand”. By having this UVP established, the company is able to start building expectation within consumers before the product is even released. Additionally, customer demand for the product can be tested.

If someone defines marketing just as advertising, then the product  has to be released first. However, advertising is just a small part of marketing. In fact, marketing for most successful products comes first because this activity encompasses research and strategies to decrease the risks of having an unsuccessful product. So to answer your question Micaela, I would definitely create the marketing strategy first.