Monthly Archives: October 2014

Sony has released the price of the new PlayStation 4 to be 399$,   looking at the price of the new PlayStation and comparing it to the ultimate competitor Microsoft and their 499$  Xbox one , Sony is planning to increase it market share by at least 10% .

Sony market based pricing is based on price skimming, this is the most commonly seen with new and innovative products, such as mobile phones and game consoles. The price is set high initially to gain those customers who will pay almost any price to get their hands on the latest gadget. once the business has profited from selling to those customers. it drops tje price to tempt other customers who may have been putt of by the high price originally. Sony is only able to this because is likely to be almost no competition in this market due to the cutting edge nature of the product, this can be related to the play station 2 where its being sold at a very cheap price of 80$ from an original price of 250$.

Moreover we can see that Sony and Microsoft use psychological pricing, where they set prices at just under the currency unit, such as 399$ rather than 400$. this is based on different reasons such as 399$ appears that it is offered at the lowest possible cost rather than being priced up to the nearest full currency unit.moreover psychological pricing pushes products into cheaper price bands.

This article faces a situation where the chief executive of a European equipment manufacturer recently faced a tough decision whether to centralize or to decentralize, this is a big dilemma that most companies has to deal with at a point of their business, so should they centralize or to decentralize?

To help answer this question i will be looking at both. To begin with centralization is  generally organized around a core business unit with a strict hierarchy. Several layers of management typically delegate tasks and set policy. Since those managers have full knowledge of what’s happening in the organization, they can maintain precise control over budgets and products, and can ensure that no risks or projects are undertaken without their knowledge. Moreover employees are not included in decision making because lower level employees lack the certifications needed for decision-making.This allows the company to take decisions quickly and with less risk however there is no room for creativity or new ideas from lower level employees.

On the other hand, Decentralization allows organizations to take advantage of division of labor by sharing decision-making across the organization. It also empowers employees and allows them to improve their performance by being able to act to improve deficient or inefficient areas immediately without approval from the top of the organization.  Moreover decentralization will allow for more creativity, however it can be very time consuming and have a very high risk level.

Finally, I recommend the chief executive to use a decentralized system, as this system has the advantage that decision making is closer to the people making and understanding the decision.

Native Indians in Canada have been losing their identity gradually, this was due to government  control most aspects of aboriginal life: Indian status, land, resources, wills, education, band administration and so on. Politically this has created tension between both the natives and the government, which made them fight over lands and different laws regarding aboriginal rights.

Socially, the native Indians were being robbed of their identity, as said in the article “kill the Indian in the child”. This would create external conflicts for Canada, as the native Indians create a big percentage of the population, it would effect the business, as they own lots of lands, the Canadian government is trying to take those lands to make economical use of them by building factories.

Recently, The surrounding First Nations in northern Ontario have many concerns about the impact of a giant mining development on their land and traditional way of life. The went on strikes against the government and started rebelling against the laws this would result in delaying and potentially cancelling the project which was expected to generate $230 millions.

In conclusion, the Canadian government must be aware of the conflicts happening with the aboriginals as they have their rights to live on there lands, and I recommend them to make a mutually beneficial agreement by giving them parts of the profits in order for business to use their lands.

Recently, McDonald’s the number one fast food company in the world started selling the McCafe at grocery stores, as shown in the article. MacDonald , johnny bets the sales manager said ” After tripling our coffee sales over the last five years and doubling our share we had been getting requests from our guests for several years [for coffee in grocery stores]“.

From my analysis i believe that MacDonald is moving towards a market penetration strategy, where they are targeting existing customers but in new markets, which are retail stores, the strong brand name of MacDonald will allow the McCafe to penetrate the market easily. MacDonald have conducted a market research by conducting both primary and secondary research, before launching their coffee in grocery stores, the research shows that coffee is an inelastic product, which mean the the demand on it will change a lot with a price increase, because Coffee is the most-ordered item outside the home after water.

Despite the high competition in the Coffee market , MacDonald has managed to be the fastest growing coffee brand, this was due to the increasing demand on their coffee between 2008-2013 in Canada. one of the most important factors which made them successful in this market is their strong relationship between them and their suppliers which made them offer their products at cheaper prices, where they benefit from economies of scales, which make their product competitive in relation to competitors such as Starbucks. nevertheless the brand name allows MacDonald to penetrate any market easily.

Toyota outlined the launch of a new era in hybrid technology with the arrival of the next-generation Prius, as shown in this article, Toyota is implementing various strategies in order to increase it market share and to be the number one hybrid car in the world.

Toyota follows a committed strategy towards environment sustainability, derived in the production of its cars which are equipped with innovative technologies and quality performance by launching the world’s leading fuel efficient car . Reflecting the demand on hybrid technology in emerging markets, Toyota has expanded its range of cars fitted with hybrid engines’ in respond to environmental awareness by consumers.

Toyota’s main rivals are Ford Motor Company, General Motors and Honda Motor Co., Ltd. However, the innovative technology that Toyota offers combined with the very loyal customer base and the company’s consistent, high-ranking quality marks assures a sufficient competitive advantage. (Walker, 2009)

The segment that Toyota occupies, especially the hybrid segment, is experiencing growth due to global economic factors. To sustain market position, many brands were encouraged in their own efforts to bring more hybrids to the market. Yet, new entrants to this segment have tried various strategies without much success.

In conclusion, Toyota is a leader in innovative technology, environmental initiatives, and quality. Nevertheless, given the financial situation the threat may come from other non-automobile personal transport or public transport. the company is recommended to penetrate emerging strategic markets and continue on producing its innovations such as Toyota Prius which took the first sales on the world wide level leaving Ford and GM behind.