Starbucks Charging Higher Prices in China

A man carries a Starbucks logo sign after a corporate event at a hotel in Shanghai April 19, 2012. CREDIT: REUTERS/CARLOS BARRIA

In Qiushan’s blog about Starbucks overpricing in China, she talks how this phenomenon is being criticized in China. Starbucks, being the world’s leading coffee chain, CCTV (China Central Television) stated after comparing coffee pricing around the world, they found out the pricing in China is higher than other market price. For example, Starbucks sells a medium sized latte in China for one third more than the ones in other countries. It soon drew criticism from the public, consumers felt they are treated unfairly and the coffees are way overpricing. While some of the customers still have an optimistic view, “even the price is higher, but its still affordable”, other consumers think that due to the massive market in China, even the price is slightly higher, Starbucks will still obtain its market demand.

From my point of view, value proposition is the key to generate profits and keep the existing customer base. However, Starbucks is not doing what consumers have expected, they should immediately take action in price adjustment and reconsider their value proposition.

How Crucial is the Organizational Culture?

Organizational Culture is the value, beliefs and the working environment provided by employer to the employees, as well as the spirit behind its brand. We can think of some examples of company that has a family-like atmosphere such as Google Inc., Facebook and Zappos. I entirely agree with the idea expressed by Rupert Soames, chief executive of energy supplier Aggreko, “It’s usually top-down; If the boss is good, a company is good. If the boss is bad, the company is bad.” Employers certainly play the leading role; employees would mimicking what the employers do, and become more loyal, passionate and hardworking. “I tell my people if you don’t love this company, if you don’t love what you do, don’t stay.” Allan Zeman, a Hong Kong-based entrepreneur states. Just as what Zappos is doing, they offer employees with $2000 to quit the job. “Our corporate culture is our brand”, this cash acquisition offer has left the company with employees that are all enthusiastic and loyal to the company and its brand.

Work cites:

http://www.bbc.co.uk/news/business-23169441

Singles’ Day or Shoppers’ Day?

After reading Mariska’s blog about Singles’ Day shopping spree, I felt very related. It’s not only that I have lived in China for the past decade, but I personally also participated in this spree. Singles across China used to spend November 11th lamenting their single status, but now it turns out this unofficial holiday has become the largest online shopping event in China. On November 11th, all the shopaholics get excited and ready for the once-a-year grand sale. Most of the products were at least 50 to 80% off whereas in fact, some still in its regular price. During that day, Tmall.com and Taobao.com has together set a new record daily revenue of over 35.19 billion in Chinese currency which equals to approximately $5.75 billion. The record created surpass about 2.5 times the total revenue for American retailers during last Cyber Monday. Global firms also joined the part of the spree Nike, Adidas, Procter & Gamble, Unilever and Samsung Electronics conducted Singles’ Day promotions, many of them using Tmall. “Online is giving them a much more effective way of reaching these consumers,” said Bryan Wang, an analyst at Forrester. This shopping spree has reflected that e-commerce is growing rapidly in China, and some of them started to target on the next coming spree, “Double 12”.

3D Printing is Changing the World

“From replacement kidneys to guns, cars, prosthetics and works of art, 3D printing is predicted to transform our lives in the coming decades as dramatically as the Internet did before it.”

The rapid development of new technology had entirely changed our world. The launching of 3-D printing is a great example of newly developed technology, which still appears to have traces of futurism in some way. Since the 3D printing technique has been invented, many different products have launched. From shoes to arms (guns), it has successfully become the eye-catching phenomenon and attracted lots of publicity. It is undeniable that Internet has dramatically changed our life over the past decade, and it’s continuing. Will the influence of 3D printing goes beyond Internet? It is still doubtful whether we could afford it just like the generalization of Internet? It seems now almost everything can be made out of 3D printer, cars, jewellery, prosthetic and etc. In the meanwhile, as more and more product can be made using 3D printing technique, that means many job opportunities will be replaced by it. In the future decades, it will be unimaginable how popular it will become and how our ever day life will change.

Work cites:

http://www.newvision.co.ug/news/649520-3d-printing-will-change-the-world.html

Is Lululemon Getting a Second Chance?

 

After the yoga-wear giant faced a sheer pants controversy, the pants are now transformed into “Second Chance Pant” with an extra layer. The tag attached on the pants reads, “These pants were inspired by a need to find functional and beautiful design solutions for our sheer pants. This is what celebrating failure looks like!” The pants is selling at the retail for $92, a slightly less than the sheer ones. From what I perceive, as the sheer pants represents a large portion of Lululemon’s inventory and the decrease of company’ s stock; “Second Chance Pant” is to help clean up the overstock. Ironically, Lululemon seems did not seize the “second chance” well, it still fielding some complaints that the “Second Chance Pant” is still too sheer. Surprisingly, the founder of Lululemon, Chip Wilson provided a reason for the sheerness, “quite frankly some women’s bodies just actually don’t work” for the company’s pants. The company apparently did not meet the expectation of consumers and Chip Wilson’s apology is considered as the “worst apology”.

Work cites:

http://www.huffingtonpost.ca/2013/11/13/lululemon-second-chance-pant_n_4267342.html

Lululemon Chairmen, Chip Wilson’s Apology Called Worst Ever

Snapchat: $3 Billion Bet

Snapchat, an unprofitable social media company allows users to send instant pictures and text. What makes Snapchat unique from other existing social media is that they value users’ privacy. Unlike Facebook or Twitter that keeps tracks of user behaviour, and then sell ads based on the detailed knowledge of user preference. However, it is both their strength and weakness by not having track of user behaviour. Since most of the unprofitable social media Apps generate profit from ads, and most of the efficient ads are targeted on users’ preference. Thus, Snapchat could face a hard time making money by selling same ads to all users instead of targeted ads.

Snapchat has recently turned down an all-cash acquisition offer from Facebook Inc. for at least $3 billion. Based on the mass amount of user base and the popularity of Snapchat, maybe these young and intelligent founders have made the right decision. We could not predict if Snapchat would be as lucky as Facebook, which now worth about 118 times what Yahoo has offered in 2006. Snapchat is now focusing on “building their business and maintaining their independence”, and make $3 billion bet on themselves.

Work cites:

http://www.bloomberg.com/news/2013-11-13/snapchat-s-founders-make-3-billion-bet-on-themselves.html