http://www.canadabusiness.ca/eng/blog/entry/4256/

Many people believe that buying a franchise is the safe and easy way to generate profits. This is because of the characteristic of the franchise which is well start up implementation. But buying a franchise is very complicated than what people normally think.

Buying a franchise requires high start up costs. Also when franchisee starts his/her business it takes time to break even. As a result, the owner of franchisee requires to notice this fact and be prepared to have cover cost before it goes to break even.

Franchisee is restricted by franchiser, so training and franchiser’s policy should be noticed and trained.

https://blogs.ubc.ca/nicolasbocanegra/

Is Twitter Overvalued?

Initial Public Offering shows that the value of the current and future of the businesses. And Twitter’s IPO price is $26 and now days it’s $44.90. This shows that the demand for Twitter in the stock market is increasing. I guess there are 2 main reasons that the demand for Twitter stock has increased.

Firstly, investors see that Twitter will successfully monetize their businesses. They believe that Twitter has enough potential to grow bigger and will bring money to shareholders.

Secondly, Twitter is actually working well enough to bring investors. This could be indemnified by their performance and their business plan.

But investment shouldn’t be just based on the gut feeling that this business is going to be successful. The investing should contain analysis of the business and Business Model Canvas to find out how the business is working.

There are many variables in SNS(Social Networking Service) market because many SNS businesses are valued very high but they don’t earn the money compared to the people’s expected value.

https://blogs.ubc.ca/vivienne/

Netflix Jumps into Original Film Industry

Her blog shows me that Netflix is releasing the original TV shows in order to create their originality to maintain substantial amount of watcher. And she analyzed that this is the strategy that create new brand image and getting rid of the stereotype that is remained in customers mind.

New contents seem more fresh and exclusive. This will definitely allow Netflix to increase their market with fixed amount of watcher.

But I also think that Netflix should follow the trend which is Online and Smart phone industry. They should bring more innovative and creative stuff such as smart phone application or smart Netflix box.

Change in market- Console game to Smart phone game

We used to play a lot of console game by using television. But now days, many people don’t use television and console to play game. This is because the substitute for console games has placed. The substitute is called smart phone games. When smart phone has released, Sony, Nintendo and X-box didn’t expect that this will treat the console market, but the popularization of smart phone brought many derivative markets, such as application. And one of the derivative is the smart phone game market which threats the existing console market.

The popularization decreases the market share of console game and increases the smart phone market share. This shows me that how things are connected and how fast businesses change. Also every business has potential threat that should be always managed and observed.

Business and Technology Management – super market chain

Businesses adapts to the new technology and adopts the technology to monetize even larger profits. Furthermore, more now days market is very saturated and competitive which requires them to create their unique strategies to survive in the market.

Chain Supermarkets are using BTM(Business Technology Management) to personalizing price. Safeway uses the online website and smart phone application to gain the information about customers for finding out what customers want from the super market.

This allows both the super market and customers to have benefits. Customers can get the special offer from the chain and the chain can easily target the customers who fit into their promotion.

On the other hand, I can see the privacy issues from this technology. In order to customize, they have to collect customers information. This might bring privacy issue and there are possible possibility of abusing and hacking.

http://www.businessweek.com/articles/2013-11-14/2014-outlook-supermarkets-offer-personalized-pricing

Facebook Acquisition Offer to SnapChat 

Usually, business’s value is quantitatively determined by the price of share or the future potential of the business. Can you believe that Facebook offered $3 billion acquisition to the company which has launched since 2011?  Snapchat is the business which refused $3 billion acquisition offer from Facebook. This case brings 2 issues; why did the CEO,Evan Spiegel, refused this offer and does Snapchat have value of $3 billion?

In my opinion, the reason that the CEO refused is that he looks the potential growth of Snapchat positive. As many SNS(Social Network Service), such as Facebook and Twitter, showed us the success of the businesses, Snapchat has a potential to become one of the global SNS businesses. They can use the advertisement platform which is already set up by Facebook to generate profit from running businesses.

But in the other hand, I don’t really agree with the value of Snapchat. I agree that Snapchat has high potential and one of the rising businesses, but Snapchat’s target market is too narrow which is mostly teenagers. This will restrict the users. As a result, this will also restrict advertisement platform.

Reference: Timonthy, Lee. N.p.. Web. 15 Nov 2013. <Of course Snapchat could be worth $3 billion>.

The line between Profits and Ethics

Most of businesses ultimate goal is generating profits from operating businesses. Profits are one of the most important factors that motivates people to run businesses. However, sometimes we face ethical issues that make us to rethink about generating profits. Does profits over ethics? Should ethics be priority? Most of public will say that businesses should act ethically. However we can find many businesses with moral hazards and unethical behavior.

Wonga is a loan businesses which has highly stable profits and growth, but this business is becoming very controversial in UK. This is because, despite the economic depression, Wonga made their customers to pay  150% of original price of loan. They took an advantage of their vulnerable  and the depressed economic state.

One of foot ball player who has to wear the shirt which is sponsored by Wonga refused to wear the uniform. This kind of action affect their brand image negatively and many medias are criticizing the Wonga’s unethical action. Even though their action is not illegal, but the business should not take an advantages from vulnerable. They will take a responsibility of this action later on.

Reference : Reaich, Neil. “Biz/ed – What Price a Loan? | Biz/ed.” Biz/ed – What Price a Loan? | Biz/ed. N.p., 30 July 2013. Web. 08 Oct. 2013.

Sports Sponsorship and Brand Image 

Many sports teams or sports leagues have sponsorships from various businesses. For example, Samsung is sponsoring England Premium League team Chelsea and Nike sponsors Manchester United Club. As we can see, Nike is closely related to sports but Samsung seems to have less relation with sports. But many global businesses support sports clubs or the leagues. What’s the point of doing this?

Scotia Bank is going to sponsor National Hockey League in 2013 winter as the hockey season is coming towards. Scotia bank’s new line of debit card will be featured in the every 30 teams’ logo.

These correlations are expected to create huge benefits to both NHL and Scotia Bank. Firstly, Scotia Bank will be exposed to the hockey fans and hockey is quite famous sports in Canada. This will allow them to have positive and friendly brand image. Also using Scotia Bank’s card allows hockey ticket buyers to buy discounted price and easier access to book the tickets. This kind of strategic alliance benefits to Scotia bank and NHL, even though this is part of sponsorship.

KRASHINSKY, SUSAN. “The Globe and Mail.” The Globe and Mail. The Global and Mail, 27 Sept. 2013. Web. 05 Oct. 2013.

Business ethics- food fraud

We daily consume foods. Foods sometimes beyond the meaning of basic consumption. We find eating entertainment. We can find many businesses provide us beverages, foods, snacks, etc. But how do you feel if you find that the business provided you wrong information in order to monetize? Shockingly, it’s happening all over the world in the food industries.

ALW Food group is the company located in Germany which supplies and producing honey to all over the world. But this company fooled customers and partners by telling the wrong place origin which is originally China. This is the way to reduce the cost for producing honey and the low cost could enable them to take competitive advantage. Every company wants to minimize their cost of production and materials in order to generate more profits or reduce the price of products in order to get competitive advantage compared to the competitors. But is this right things to do? If they didn’t illegally import honeys from China they have to pay 3 times higher. But fooling consumers and partners are absolutely unethical behavior. Even though, businesses primitive purpose is generating profits, but their activities should be ruled ethically.

Reference

Berfield, Susan. “Largest Food Fraud in U.S. History.” Business Week. N.p., 19 Sept. 2013. Web. 2nd Oct. 2013.

The downfall of Snow Brand Milk Products and the profitable cause marketing of Toms shoes

Should all businesses act ethically? If we ask this question to public, they will obviously say “Yes! All businesses should act ethically!”. Like this, Consumers and public have a certain expectancy from businesses to act ethically.

One of the biggest daily products company in Japan, Snow Brand Milk Products Co Ltd, got astronomical damage on sales in 2001, because of being unethical. More than 15,000 people who drank Snow Brand Milk got food poisoned and that was caused by not cleaning the valve during their production line. They lost the massive sales and reputation from this scandal.

On the other hand, Toms shoes used “cause marketing” successfully. Their marketing is giving free shoes to African children when customers buy shoes. Being socially responsible allowed toms to create good brand image, attain high salary with reputation. Their marketing strategy and corporate social responsibility allow to have competitive advantages with unique selling points.

http://youtu.be/7MV3HWQHl1s – Toms shoes cause marketing video: one for one

This proves that 21st century’s consumers actually want businesses to act ethically and be socially responsible. As a short term perspective, being socially responsible and ethical cost high for businesses. However as a long term perspective, it will be more beneficial than being unethical to cut down costs.

References: http://www.marketingtechblog.com/toms-cause-marketing/,http://www.mallenbaker.net/csr/crisis04.html,http://en.wikipedia.org/wiki/Corporate_social_responsibility,http://en.wikipedia.org/wiki/Business_ethics

 https://blogs.ubc.ca/kimtaehyun/2013/09/03/hello-world/#comments