This is in response to Asfvin Pugunisparam’s “Surface entering the market”

Apple has multiple, clearly established product lines. It also has a loyal and growing customer base. Although the sales were projected to drop after Job’s death, the company continued to release products more and more technologically advanced. The recent year of 2012 has been especially busy in terms of releases. Throughout the past few years, Microsoft became less and less known for its products and the only lasting market force is levered through their software releases.

This is why I personally believe that although Surface is marketed as a differentiated product (the touch sensitive keyboard and a tough display) it will fail to compete against the iPad. Apple is simply too well established for Microsoft to become a threat. Finally what makes all Apple devices more differentiated is the App store. It is because of the variety of available apps that their devices are so popular. Together with slick designs, Microsoft would need to come up with a truly revolutionary technology in order to gain a competitive advantage over Apple. So far that has not happened, because Surface cannot offer anything that iPad does not offer. Perhaps if the device was priced at less, it could stand a chance but as that is not the case, I doubt the device will be successful.

This is in response to Helena Lin’s “Directionally confused? Apple’s new maps application”

Apple has replaced the Google Maps application with their own version. Although this could potentially bring generous profits, so far the application has caused nothing but criticism.

Not only has the application caused frustration within the user base of the iPhone 5, but it has also resulted in a number of websites dedicated to the errors of Apple Maps. The software is often inaccurate, misplacing locations and guiding users to wrong places. Furthermore it is also far from being perfectly finished in terms of its graphic display.

Consequently, customers turned away from the application and re-downloaded the original Google Maps application. If Apple is still considering profiting from their “innovative” software solutions, they should consider extensive product research and evaluations before allowing it to become a public joke. In this case, the sales of the iPhone 5 remained unaffected, however most customers remain reluctant to downloading the new software which does negatively impact the brand image after all. It is finally starting to look like Apple tried to out-smart themselves with the new technological “improvements”, essentially causing more damage than benefit to the firm.

Image source: http://9.mshcdn.com/wp-content/uploads/2012/09/apple-maps-600.jpg

In the article by Karsten Strauss, it is implied that American firms could benefit more by producing domestically. With the increasing transportation costs, outsourcing is becoming less and less desirable. Furthermore, especially in the apparel industry, mistakes in production are often made. With domestic production, those could be easily fixed. Domestic production could also be the solution for new start-ups as their expenditures would decrease by the transportation costs.

The major reason why domestic production has not been practiced is marketing. American factories do not advertise themselves. As Strauss says, “a simple internet search can tell you next to nothing about a factory, let alone if it produces quality work”. This sabotage caused many American brands to extend their supply chains to Asia. Outsourcing became increasing popular, resulting in a decrease of available jobs in the United States.

Furthermore, domestic production is often associated with higher quality products, therefore providing brands with unique selling points (differentiation). Bringing production back to the US would therefore benefit the brand image of many firms and cause a boost for many local economies.

Energy Aware is a relatively young company, promoting energy-measuring devices. Its latest product, The PowerTab, is a portable device displaying the current energy usage within a household. It measures the energy in kWh, released by the surrounding appliances and converts it into monetary value (bills). Once the house owner sees the excessive cost of e.g. leaving the lights on, he/she will have a better incentive to keep them off and reduce the energy usage.

The idea in itself seems simple and potentially profitable. The production costs of the device are relatively low and it does not require installation. Energy Aware sells to energy producers (e.g. BC Hydro) who then distribute the devices to their customers. The customers therefore carry no additional costs and enjoy the benefit of reducing their expenses.

Finally, encouraging their customers to reduce energy usage, makes the energy providers look more favourable and most importantly it increases the corporate social responsibility outlook. It can therefore be expected that with time, the Smart Meters will become replaced with PowerTabs resulting in higher customer satisfaction.

According to an article by Kosta Peric recently posted on The Forbes, online security is becoming a key issue in the digital age of banking. A multitude of different banks offers online services, however some customers are still uncertain of the security aspect and hence prefer to do banking manually (by paying the bank a visit).

As most companies are slowly moving away from the manual handling of money and towards a fully digital process of banking, this poses a problem. Customers often make the decision of what bank to choose based on the online reputation of the bank. Therefore if the banks cannot provide services that are 100% secure, their customer base will shrink.

Do you believe that the issue of online security is exaggerated? This is not a new phenomenon, yet people still fear the concept of virtual money. How so?

In the article by Erika Morphy, Research In Motion (RIM) is portrayed in a very negative light. The producer of Blackberry phones has just recently lost a number of its key customers.

Blackberry mobile was the provider of mobile devices for various governmental organisations and agencies. Over 42,000 individuals in the above organisations were provided with Blackberry phones by their employers. Recently however, it has been announced that The Immigration and Customs Enforcement agency and Booz Allen Hamilton and its 25,000 staffers are dropping BlackBerry in order to switch to Apple’s iPhone 5.

In one of Forbes’ recent articles, the concept of pre-paid cards available for all Walmart shoppers is brought up. In collaboration with American Express, Walmart was able to derive an alternative to debit cards, at lower cost and with lower fees – called the ‘Bluebird’.

With the increasing costs of banking and maintaining accounts, Walmart hopes that customers will realise the value for money that the ‘Bluebird’ accounts offer, and that consequently the number of users will further increase. With 28.3% of the market being classified as ‘unbanked’ (meaning 28.3% of the market prefers to carry out transactions that do not involve banks), there is a gap in the market that Walmart can most certainly seize with the new Bluebird account. 

With only $3 of monthly payments, the Bluebird has become one of the fastest growing alternatives to regular banking (5% growth in 2011). This brought it to the attention of banking giants such as FDIC, which began to retaliate by pointing out the dangers and potential limitations of prepaid cards.

Will the Bluebird card system continue to grow? Or will it get shut down by the banking giants? Would you personally prefer to use a prepaid card or would you rather continue using your debit/VISA card?

According to Bruce Upbin’s latest article on Forbes, in order for Apple to secure its position in the future, it should buy Nokia.

Nokia’s current market worth is $10 billion. Compared to Apple’s worth of $100 billion and the company’s strong purchasing power, it does not seem like a

difficult task, yet the benefits could be crucial. With the uprising patent war between Samsung and Apple, the latter needs a significant change in strategy in order to secure its future. That’s where Nokia comes in.

Nokia is very well known for its strong and reliable navigation system – something that Apple could learn from after their latest release of the iPhone 5 and the maps app. Secondly, Nokia has built a very efficient system that operates on the LTE frequency – another feature just recently introduced in the iPhone 5. Furthermore, Nokia has developed a very efficient TV streaming app and now that everyone is expecting Apple’s next move to be mobile TV, this could come in useful. Lastly, Nokia cooperates with Microsoft and a number of other brands. Hence why buying Nokia could present Apple with a leverage that could prove crucial at some point in the future.

Upbin, Bruce. Why Apple should buy Nokia. 10/06/2012 @ 9:49PM. Forbes Magazine. http://www.forbes.com/sites/bruceupbin/2012/10/06/nokias-one-percent-iphone-tax-why-apple-should-buy-nokia/

As the author of ‘Zuckerberg’s rocket, ready for lift-off’ predicts, Facebook’s IPO could potentially establish the share price between $34-$38. With the company’s current revenue of $3.7 billion, the process of initial public offering could raise another $12 billion, increasing Facebook’s valuation to over $100 billion.

With such high potential brand value, Facebook’s reach will further extend. The growing customer base is essentially what enables the company to generate profit. With advertising being the number one source of revenue for the company and a growing customer base, it is essential that Facebook adapts its marketing to the fast-paced environment.

‘[Facebook] also intends to explore a host of other areas, from payments to “social commerce”’ suggests the article, indicating that Facebook is planning on expanding their current business model and going to offer a greater diversity of products.

Will the IPO cause the Facebook advertising costs (for other companies) to increase? Would an increase in advertising costs result in a lower demand or would it make Facebook even more profitable? In contrast, if the share prices go down after the IPO – how will that impact the Facebook advertising opportunities (reminder: Facebook generates 2/3rd of their profits from advertising)?

Author unknown, ‘Zuckerberg’s rocket, ready for lift-off’, 25/09/2012, http://www.economist.com/node/21554532

The above article from March, 2011, discusses the appropriateness of American Apparels’ work culture. While the company’s CEO, Dov Charney promotes sexual freedom in the workplace, believing that ‘it’s a First Amendment right to pursue one’s affection for another human being’, many of the employees disagree. As Charney argues, his philosophy of sexual creativity is closely associated with stimulating creative energy. However the line between energy stimulation and sexual harassment seems to be too thin for many workers. As a consequence an ex-employee field a suit against the company, requesting a compensation of $250 million. In late 2011, another suit was filed, once again for sexual harassment.

 
The ethical issue of potential sexual harassment, arises from a stakeholder conflict and the work culture of the company. As the CEO uses ‘sexy marketing’ to promote brands unique USP (noticeable and provocative clothes), he enforces all employees to adapt a specific mindset. As a result, the stores are often perceived as appealing and attractive by the customers, yet not all employees are comfortable with the sexual freedom promoted by the brand at the workplace.

The ethical issue of sexual harassment at the workplace has stimulated a debate, as the CEO believes that retaining it is the key to an increase in sales, while the board of directors is becoming increasingly worried about the potential legal consequences. Whether or not American Apparel’s sexual freedom is beneficial or potentially threatening is to be determined.

O’Brien, Gael, 3/15/2011, ‘American Apparel and the Ethics of a Sexually Charged Workplace’. http://business-ethics.com/2011/03/15/0852-american-apparel-and-the-ethics-of-a-sexually-charged-workplace/