I chose this article because it ties in with Class 6 Instructions on marketing and points of parity/difference.

Making Starbucks recession proof from http://www.financialpost.com/executive/story.html?id=1047518

different cup sizes for starbucks coffee taken from http://www.geekosystem.com/

Canadian coffee shops market share occupy a small market share compared to larger rivals like Tim Horton's taken from : http://zincresearch.wordpress.com/

The demand for Starbucks coffees seems to be decreasing, due to higher prices (with 12% HST, the price is even steeper).

Starbucks’ marketing campaign does not seem to be effective. Its market share is eroded due to consumers’ preferences for indie, hip coffeeshops. Starbucks is an established, strong brand name, and one of the top coffee players but it is capitalizing on not-as-desirable aspects like “authenticity”. This might work against it; proliferation of Starbucks stores does mean that it is becoming more commercialized.

As a brand leader, Starbucks should focus on associations that may not be unique to its brand – its points of parity. These include “great-tasting coffee, reliability, speed, convenience, and cleanliness for the customers’ dollars.” These are  common to most coffeehouses, but allow Starbucks to cement its brand position. This prevents it from being blindsided by its rivals – Tim Horton’s, Blenz Coffee. It can then emphasise its major point of difference – “consistency of quality” throughout Starbucks stores which practise rigorous quality control.

http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20090330_10023_10023&page=1

THE GOOD, THE BAD AND THE UGLY (AIR CANADA)

*i chose this article because Air Canada’s pricing strategy was mentioned during class*

Blue skies ahead for Air Canada?

taken from : http://www.globalgiants.com/archives/fotos/AirCanadaBoeing0407.jpg

“Stock of low-cost rival WestJet, which was one of the few North American airlines to remain profitable through the recession, is largely unchanged since the start of the year.”

taken from : http://ca.reuters.com/article/businessNews/idCATRE68C3XW20100913

The article discusses the dire economic situation of Air Canada (AC) and its huge debt.  Key contributors are high costs of production, decrease in consumer demand and pension payouts.

“Extraordinarily high fuel costs” mean higher costs of production which result in subnormal profits. Even though oil prices have since gone down, AC purchases $99/barrel oil supplies. Coupled with decrease in consumer demand, the profit margins are further squeezed. Pension payouts are also losing value in accordance with the stock market bust.

Possible outcomes would be a government bailout, as suggested in the article. I don’t think this is ideal.  Certainly, it would prevent the loss of employees and avoid “restructuring, and the disruption it causes”. Also, the issue seems to be tied largely to the “stock market slide” which seems to be looking up. However, Air Canada’s market share has been rapidly decreasing. Credit card partners lose revenue when they have to refund customer fares. Plus, there are more efficient competitors which are establishing brand names and consumer loyalty.

Air Canada’s attempts to mitigate its situation by reducing capacity (supply) are weak at best.

To visualise the extent of damage of the BP oil spill : http://www.ifitweremyhome.com/disasters/bp

picture taken from : http://www.adannews.com/wp-content/uploads/2010/08/BP-oil-spill1.jpg

BP’s logo. The green and yellow colours and solar design highlight BP’s self-proclaimed duty to the environment

picture taken from : http://www.kolibriexpeditions.com/birdingperu/blog/index.php/bp-and-bird-conservation/

Greenpeace’s designed logo in response to BP’s oil spill

picture taken from : http://www.geeza.com.au/2010/06/redesign-bps-logo-with-greenpeace/

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article taken from : http://blogs.forbes.com/csr/2010/06/15/bp-under-fire-profit-versus-responsibility/

Title of Article : BP Under Fire : Profit Versus Responsibility

Being socially responsible means keeping global socioeconomic standards, respecting globalization, reducing global inequity and degradation.

The writer mentions that “It is possible to earn a profit and be responsible, but it is nearly impossible to do both perfectly.” However, BP shunned its responsibility by prioritizing its profit-seeking motive way above its social responsibility. Although it is natural for BP to prioritise profit-maximisation, it shirked its corporate (ethical) responsibility. With its previously strong international reputation and position, it could have implemented better safety protocol and avoided a poor safety track record.

This article does not give a comprehensive analysis, but other literature has shown up BP’s faults in light of being a global citizen. Reverse multiplier economic effects, massive unemployment in related industries and environmental destruction are severe implications. BP has also been hypocritical about its corporate values.

It is unfair to solely blame BP. Non-governmental organisations and governmental watchdogs should monitor multinational companies. However, most of the blame should still be attributed to BP considering its sheer size and power that it could have better utilised. Financial compensation is unlikely to alleviate the sheer extent of the destruction caused.