Category Archives: Article analysis

Meet the needs of the present without compromising the ability of future generations to meet their own needs

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As environmental threats are building up, such as global warming, we become more conscious about our surrounding, the impact of our actions, and what we really value.

Also, companies are starting to address this issue and are moving from profit oriented enterprises to social responsibility corporations, that base their value proposition around social, economic, and environmental values. Not only are we seeing the change within firms, but also in nations, as India’s Finance Minister announced that 2% of corporate’s profits should be invested into CSR activities, and will be applicable from fiscal 2014-2015 onwards. His argument states that it would have a multiplier effect on “projects such as environment, skill development, water, sanitation, etc.”

What does it mean to be sustainable? 

A cooperation needs to hit the tripple bottom line: social, environmental, and economic, which leads to sustainability. Based on Lululemon, this concept can be easily related to real life. 

Social: Work with factory partners to create programs that are beneficial to the community and provide support and funding
Environmental: Work on reducing shipping emissions by auditing routs
Economic: Contribute to the economy in a ethical manner through their Code of Ethics

These are Canada’s Top 50 Socially Responsible Corporations.

By implementing these core values, the company automatically creates shared value, which means a product that is beneficial to the community and the company.

Resources: 

Single Day (11.11), the new shopping day?

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Shopping is like eating a cupcake, once you start, you can’t stop. Online-shopping was never my thing, but when it’s caught by bandwagon and it becomes a whole cult, I may reconsider. Especially, when sales are the cherry of the cupcake.

On Single’s Day in China (11.11), within 24hrs $5.75 billion was recorded on its online payment system for Alibaba, China’s biggest online shopping company . Well, doesn’t that show thirst for shopping, or an addiction?

Anthea Low explained in her blog post how Alibaba is preparing for an IPO; adding on, it’s suggested that this may be the biggest for an online company since Facebook Inc. Even though million were created in revenue, the main goal of the ‘official’ holiday by Alibaba is to create publicity. The company is making sure not to skip any steps by first creating value; a value proposition customers can relate to, rather than generating profit. Thus, this would lead to a stronger IPO release, which yet hasn’t been released.

Also, the company wants to focus on operations. Only for this even, 800 000 employees were working to ensure a happy shopping experience for customers, this shows also the allocation of human resources in response to certain events.

Articles:

 

 

New competitive advantage: Socializing products

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WE have evolved be entertained 24 hours a day. Smart phones, TVs and watches have been designed to satisfy our needs through the emergence of the Internet.

The Internet has changed consumer behavior and therefore the operations of a company such as costumer service, business models, and advertising. According to a Harvard Business Review Blog post our society has moved even further, not only do we need to be entertained by information that is given to us but also be able to share information with our social network through the usage of products. No longer do companies gain competitive advantage through their value proposition by providing newer and better features, but the revolution of social products will.

The new Nike+Fuel Band is an example classified by HBR as a ‘social product’. No longer will products just be “simply connected, but social” write Bonchek and Choudary. The concept of sharing will create another community. Nike’s idea is to create a community where users can motivate each other to be more active. This value proposition will attract more consumers, because with the vast amount of social networks in today’s world we create new connections everyday, by using social products it will make it even easier to keep in touch the connections in our busy lives.

Nike+Fuel Band’s value proposition and the idea of a social product (Video)

 

Resources:

– “Navigation.” BoF The Business of Fashion. N.p., n.d. Web. 23 Oct. 2013. <http://www.businessoffashion.com/2013/10/nike-stafan-olander-fuelband-and-the-age-of-social-products.html>.

– “HBR Blog Network.” Harvard Business Review. N.p., n.d. Web. 23 Oct. 2013. <http://blogs.hbr.org/2013/10/the-age-of-social-products/>.

– “Nike+ FuelBand SE unveiled with new colors, Bluetooth 4.0, priced at $149 (update: eyes-on).” Engadget. N.p., n.d. Web. 23 Oct. 2013. <http://www.engadget.com/2013/10/15/nike-fuelband-se-unveiled/>.

–“The three most innovative social products right nowAdd to ….” The Globe and Mail. N.p., n.d. Web. 23 Oct. 2013. <http://www.theglobeandmail.com/report-on-business/small-business/sb-marketing/the-three-most-innovative-social-products-right-now/article12498033/>.

– Video: https://www.youtube.com/watch?feature=player_embedded&v=moV5osprPlg

Leaving LV for IPO of Marc Jacobs’ fashion label

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Fashion is glamourous, but even behind all the sparkle we find the apparent “so boring” financial accounting aspect.

Recently announced at the Fashion week in Paris, Marc Jacobs is leaving his position as creative manager at Louise Vuitton after 16 years. At first this may not seem as huge news for the business world, however looking at the facts there will be a few changes coming up.

As Jacobs was managing the mind-blowing stages of LV during fashion shows, he was also running on his own label ‘Marc Jacobs’. Currently his label is private, however with his resignation at LV, the designer is preparing for an IPO. By taking his brand to another level, the designer is aiming to expand through public shares. The american rival designer Michael Kors listed on the stock market as of December 2011 took huge success from its IPO. Even now, post-IPO, the luxurious brand is experiencing sales growth all over the world. This historic event provides certainty for Marc Jacobs.

With the expansion Marc Jacobs will be able to reach out to a greater market across the globe, which will raise revenue. And rise to the image of the luxurious Fashion House Louis Vuitton.

Article: “Marc Jacobs to leave Louis Vuitton to Prepare IPO” by Christina Passariello from the Wall Street Journal Online, retrieved on October 5h, 2013, from: http://online.wsj.com/article/SB10001424052702303722604579110762285433636.html

 

Apple fails to address Chinese market effectively

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The global smartphone industry is growing at a rate of 50% a year, whereas the chinese smartphone industry has a growth rate of 108%.

Apple has recognized this opportunity of expansion by showing interest through the release of the iPhone 5C and official launch in Beijing. These are small steps. But are they effective?

A chinese handset provider, Xiaomi, is following Apple’s design, however runs on Android and sells at a price of $330, while iPhone5C is priced $733, the difference in price makes the iPhone unattractive to China. Also, Xiaomi sells to costumers online, rather than through a distributor like Apple, which incurs more costs. The Direct Buying Model helps Xiaomi establish demand information more quickly and provide access to customization. Another competitive advantage, Xiaomi customizes it’s own software, adding Chinese apps that are legalized by the government, where as AppleApps such as GoogleMaps is unavailable in China. Apple is facing a rivalry, only owning 4.8% of the chinese smartphone market share, where as Xiaomi owns 5%. The image of low-price-high-quality Xiaomi has established even edges out HTC.

Xiaomi vs Apple video- Discussion of the differences and similarities between the two companies. Very interesting!

Article source: “Taking a bite out of Apple“, published September 14th, 2013 from: http://www.economist.com/news/business/21586344-xiaomi-often-described-chinas-answer-apple-actually-quite-different-taking-bite-out

Blackberry’s downfall

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Blackberry in now in a state of having to cut 4,500 jobs in order to keep the business running. One of the factors that causes such great losses for the company are the large inventory charges caused by the new z10 Blackberry phone, who’s sales are low, USD $900- million losses from unsold phones. This is a sign of poor operation management.

The inventory charges relate to the text of “The Power of Virtual Integration: Interview with Dell Computer’s”, which explains how inventory charges can be minimized. The main goal of virtual integration is to blur the lines between suppliers, manufacturers and costumers. Blackberry is still using distribution channels, which increases inventory time, and costs.  Moreover, delay of launching their new system was one factor that contributed to their huge losses of the new z10.  At last, poor marketing and not enough support by the company lead to crash in sales and the company’s value.

Blackberry is in the struggle of rivalry- Porter’s five forces. Blackberry has huge competitors such as Apple Inc. and Google Inc., which are used as substitutes. The degree of rivalry is enormous.

Article: “Blackberry takes huge losses as sales collapse“by The Globe and Mail, published: September 20th, 2013.

Toyota? You got ethics?

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In the business world, many view ethics the same as a social responsibility, but as  in Social Responsibility of Business if to increase profits, the book argues that we are a free market society and ethics is not a responsibility, however a business must stay ethical through acting within the law.

Reported are complaints of sudden acceleration of multiple Toyota vehicles. The issue was kept at a low by repurchasing those damaged vehicles. This kept the costumer satisfaction, and eliminated the risk of loosing costumers. Such issue had to be reported as it concerns safety to the driver and third parties. A similar issue occurred at GM Chevrolet India (article of Times of India) this summer of an emission breach and only revealed by the company 8 years later, leading to a recall of 1.14 lakh recall of cars and a rebuild of costumer trust.

It may be suggested to address such issue directly at hand, instead of trying to hide it. Toyota had to deal with lawsuits, a drop of 1.4% in the US market share to 15.2% and a $ 16.4 million fine for a delayed recall. This could be avoided when acting directly within the constraints of law. Responsibility comes with success!

Article- Los Angeles Times:  http://articles.latimes.com/2010/oct/29/business/la-fi-toyota-suit-20101029