“Unfair competition” to French publishers has sparked governmental interference.

France’s lower chamber voted through a law protecting local bookshops from online giants, such as Amazon, on Thursday.  Stating that the book pricing law is part of their heritage, French lawmakers are prohibiting online book vendors from “offering free delivery on top of a maximum five percent discount on books” (Reuters) to its customers. The law, heading towards the Senate, is expected to pass by the end of this year.

Librairie Les Vraies Richesses in Grasse, France
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How badly Amazon will be affected by this law remains to be determined however when operating internationally, companies will constantly be susceptible to setbacks. The French who are adamant about protecting their books have a culture when it comes to protecting small book stores from losing to large competitors that Amazon evidently did not take into account.

There seems to be a pattern if I am correct in my findings. Businesses that do not observe culture well have faced significant setbacks. Starting up in a new place requires observation in order to survive. It’s about knowing your environment. It’s also about changing your organization’s culture to better match that of the location. Getting over the high barrier of entry to the international market (Porter’s Five Forces) isn’t all that has to be done, you also have to be able to survive.

Original Source: http://www.nytimes.com/2013/10/04/business/France-Takes-Aim-at-Amazon-to-Protect-Local-Bookshops.html?ref=international

Cracks In Security

On Thursday October 3rd, Adobe announced that source code to some of its most popular software was stolen. The hackers are now in control of information on 2.9 million Adobe customers and the company is trying hard to solve the mystery though, to no avail. Adobe reports that no evidence was found on the attack and has begun to work with federal law enforcement to prevent intrusion on client accounts.

Adobe Logo – Click to link to original site

A company such as Adobe relies strongly on its brand quality. Its market is broad but its continuous innovations have proven to be helpful and trustworthy thus garnering it a very large customer base.

Yet, relating to what we learned in class, buyers have relatively high power in the market Adobe is operating in according to Porter’s Five Forces. Buyers have low switching costs and Adobe’s biggest competitor, Apple, poses a powerful threat as customer satisfaction will most likely suffer damages. If Adobe does not deal well with the follow up situation, unable to reinforce its value proposition and keeping customers happy, many may be looking towards a new company.

Still, I’m Adobe’s avidly loyal customer through whatever may happen I would like to think. Customer loyalty could definitely keep Adobe from losing key customers.

Original Source: http://www.theglobeandmail.com/technology/adobe-says-source-code-customer-data-stolen-by-hackers/article14695999/

Reminder from the Grave

I never thought that business news would make me laugh but here’s the story that made it happen.

Many investors blinded by excitement mistook the shares of Tweeter, a bankrupt consumer electronics retailer, for that of social media giant Twitter’s.  A number of shareholders traded Tweeter’s virtually worthless shares inducing a rise in value by more than 1,000 percent since its closing on Thursday at less than a penny a share.

One of Tweeter’s stores.
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Originally, I had been planning on writing about Twitter’s filed IPO, a serious topic, similar to Henry Bian’s post here. However, I could not pass up on fine humour and the article made me wonder about Tweeter and its downfall.

The company had previously operated in a wide market using differentiation as their marketing point. The specialty electronics store had many products that no other store offered but at high prices, so high that customers were less willing to buy. In addition, their strategy eventually became blurred as the company began many acquisitions causing Tweeter to lose its identity in a panic when other competitors surged forward. I strongly believe companies should focus on one business strategy, as when trying to please everyone, you please no one.

 Original source: http://www.theglobeandmail.com/report-on-business/international-business/us-business/tweeter-home-shares-explode-on-apparent-twitter-mix-up/article14700115/

Other sources used: http://www.cepro.com/article/the_rise_and_fall_of_tweeter/