Michelle Cheung2

Logistics make life better

UPS Mail Innovations Opens State-of-the-Art Processing Center near Phoenix

from Market Watch, Nov 30, 2010

UPS Mail Innovations has opened a new mail processing centre in Tolleson, Ariz. The diagram below illustrate the how the UPS mail system helps improve delivery efficiency. “UPS Mail Innovations serves customers that have opted to outsource their mail operations, saving them time and money,” said David Larkin, regional manager for UPS Mail Innovations.

Having had two Comm 101 classes on Logistics, I learned a basic concept of what it is and how a bad logistics system can lower the operational efficiency of a company. However, I didn’t know that the business mail processing is considered as a logistics aspect, and that a poor management over the process could slow down company growth, especially in small and medium enterprises. Business may be paying a small premium per mail piece if they are using the wrong class of mail, which can compile into a large expense. Also, if the mails are time-sensitive or highly valuable, then a mail provider that provides real‐time updates on the in‐transit mail will be very helpful.

Use of social media in business is certainly the one most discussed topics in news nowadays. Recently, SmartBrief and Summus released a report – The State of Social Media for Business 2010 to help business in different fields determine the potential opportunities in developing social media marketing strategy. The report points out that businesses which are currently engaging in social media, use the “Big 5” (YouTube, LinkedIn, blogs, Twitter and Facebook) the most. It also indicates that brand building is the primary reason for social media to play in a role in enterprises.

Last Friday, I attended the International Business Conference 2010. The role of social media in business was one of its two focuses. During the panel discussion, Nancy Richardson, who is the director of digital strategy at lululemon athletica, said that lululemon athletica uses social media only to build relationship with customers. It posts blogs to share yoga tips, and twitter and facebook to facilitate communication, such as to remind them of their complimentary yoga class schedule. Unlike other companies, it doesn’t make use of the comments received from these social media websites as their marketing data. This remind me of the fact that most people who visit these websites don’t really know if their comments or online profile will be used in marketing assessment.

Electric cars ‘may be costlier than petrol vehicles’ (by Brian Milligan, BBC News, 27, August, 2010)

According to the figures produced by  Mitsubishia, Japanese car-maker, driving electric cars might not be practical for many people at the moment due to the high cost. High purchase and battery prices, as well as rapid depreciation are what make up the high cost of the electric cars.

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” – a definition of sustainability quoted from one of the comm 101 lectures. I have always been very concerned about sustainability, especially in the field of business. Having learned in Econ 101 that the world’s economies are driven my greed, I wonder how much people are actually willing to give up at present for a better future that they might not even be able to experience in their lifetimes. As discussed in the article, it is really not a very wise idea to give up the cheap petrol car for the high priced electric car, in which its charging facilities can only be found in few places. With that being said, I still believe that all these costs associated with sustainability will eventually be paid off as soon as all individuals and businesses converge to the same point. After all lots of sustainable incentives are still at their start-up stages.

Strategies for sustainability and corporate responsibility

Aims at developing an image as a modern lifestyle dessert oasis that specializes in fresh yogurt and fresh fruit, Qoola a local privately owned Vancouver start-up, tries to eradicate two stereotypes. First, its delicious dessert proves that not all healthy food tastes awful. Second, it will prove that it is not too expensive for a business to be  environmentally friendly.

Qoola  is one of the very few places that have cups, plates, containers and utensils that are either 100% biodegradable, compostable, or recyclable.  Since this is a new way of operating fast food restaurants, it can be considered as an innovative method to generate value to the customers. Moreover, the company would like to open in Hong Kong, Singapore and China eventually. In order to minimize the risks it would face when entering those new markets, Qoola has strategically decided to open in Aberdeen Centre, in which most shoppers are Chinese. Entrepreneur always pursues risky goal and finds way to overcome the obstacles along the way. The fact that Qoola is innovative and willing to take risk to expand makes it an entrepreneurial business.

Barbie with diamond choker sells for record price

Last week, in an auction in New York, a Barbie was sold for $302,500 (USD) to an anonymous bidder and the proceeds will go to the Breast Cancer Research Foundation. This broke the previous  world auction record – $17,091, for a Barbie in 2006.

Stefano Canturi, an Australian Jewelery designer, used four weeks to design every details of this doll from her dress, to hairstyle and makeup. She wears a black strapless evening gown with a choker featuring an emerald one-carat pink diamond. Although the price was at the lower end of the estimate, it is still the most expensive Barbie ever sold in the world.

For those who are willing to pay a piece of auction product like the Barbie in this case, the buyers either buy it out of extreme interest or of unconventional investment. Since polished diamond prices are showing large gains when comparing September 2010 to September 2009 according to the data released from International Diamond Exchange, it is not surprised that the buyer of the Barbie is a investor. However, diamond is not as liquid as gold, so I think this kind of investment yields relatively risky returns (a concept learned in class).

For the Love of Cardborad

Amazon has been trying to persuade its suppliers to get rid of those “annoying, hard-to-open” plastic packaging and put consumer goods in simple cardboard boxes instead. Based on the data provided by the New York Times, companies which have switched into the use of cardboard boxes, have resulted in 73% decrease in negative feedback on Amazon.

It is crystal clear that consumers like cardboard boxes better than plastic. Aside from the ease of opening, consumers like them better also because they are more eco-friendly than plastic. Sustainability is another major element that consumers nowadays would pay attention to before making a buying decision. I believe that any business which incorporates the idea of sustainability has huge growth potential. Since being environmentally friendly is becoming a common social responsibility of businesses, most products that come in heavy packaging, will soon have their packages redesigned.

Often, changes made to increase user-friendliness bring up the cost of production. However, it is the opposite in this case. Businesses which use cardboard boxes instead of plastic have lower cost because paper cardboard is cheaper. Therefore, I think it is certainly a good idea to use cardboard as the packages.

Each year in Canada, there are 40,000 lightning-related insurance claims, totalling between $500 million and $1 billion. Insurers find the need to verify past strikes from a trustworthy source instead of relying on the adjusters to “recreate events that literally happened in the blink of an eye”.

Here’s the good news to the insurers. The Weather Network is now monitoring a new data base that reflects the strikes record since 2007. Although the information about strike locations is not 100% accurate and precise, it help adjusters in determining the legitimacy of claims.

After learning about the basic financial concepts from Mr. Murray Carlson, I realized that insurance is a type of investment.  In simple words, to invest is to give up some current wealth to the counterparty in the investment contract in order to acquire future profit that may be safe or risky. In insurance, policyholders are investors who make regular payment to the insurers, so as to obtain possible payments in exchange to the risk of a loss. However, some people tend to make money by setting frauds. Thus, the insurers are always looking for ways to prevent frauds, just like the request of the strikes data.

Source of the article: Maclean’s

Launched last year with initial $27.5-million-investment from Sprott Resource Corp., One Earth Farms now administrates 93,000 acres of farmland in Alberta, Saskatchewan and Manitoba. It aims at creating the biggest farms in the world by building stable long-term relationship with the First Nations who control 2 millions acres of land in three provinces.

Image 1

According to the Maclean’s article on 23th Sept, 2010, this second largest farm corporation is not yet profitable. Some critics point out that big farms are less flexible than smaller farms. The Fishbone diagram below summarizes the major issues that impact the early revenue of the corporation.

Image 2

However, based on the clarification made by an investor in Sprott Resource Corp, the One Earth Farms doesn’t actually own the land. Instead, it leases from the natives. Also, the labour costs and the input cost are reduced due to economies of scale. In addition, it have crop insurance and can even apply for government aid if needed. Therefore, it seems to me that One Earth Farms have the potential growth in the market.

Source of Image 1: http://www.oneearthfarms.net/

Toyota to launch six new hybrid cars

While Detroit’s Big Three car makers are still struggling with with their health care costs and employee pension, the Japanese auto makers have already started to seize the clean-energy car market.

Nissan and Honda are ready to surprise the consumers with their electric cars later this year and in 2012 respectively. Toyota has also planned to launch 6 new hybrid cars, including 2 Lexus models, by the end of 2012. The huge success of  Toyota’s Prius hybrid since its launch in 1997 has consolidated its leading role in the trend of clean energy vehicles. Having looked into a brief SWOT analysis of Toyota Industry, which ties closely to the Toyota Motors Corporation, I notice the great opportunity to expand the hybrid car market. Since consumers nowadays are more conscious of sustainability, many of them turn into products that are claimed to be better for the environment. In terms of fuel efficiency, hybrid cars and electric cars are obviously the better choice.

If  Big Three still want to share the cake in the global market, their R&D departments better come up with something green and innovative shortly.

Image (right): Black 2010 Lexus HS 250h Hybrid

Image (left): Silver 2010 Lexus HS 250h Hybrid

Some brands are very successful in tying its brand to its product. For example, Kleenex is almost equal to tissues. Similarly, Starbucks has also established its superior status in the coffee industry. However, unlike Kleenex, which produces its products (i.e. tissues) in their own pulp manufacturing mills, Starbucks, on the other hands, imports most of its coffee beans from the farmers in African countries. While Starbucks is making a huge profit off the famous Ethiopian coffee beans, it has tried to stop the Ethiopia’s farmers from trademarking their most famous coffee names, which could potentially bring them revenue of up to £47m/year!

First of all, before criticizing this “unethical” act, we have to define what social responsibility means to a corporation. If that only means that businesses should not break any laws, discriminate any groups or do anything harmful to the environment, then Starbucks has totally passed. In a free market, businesses make decisions that can generate the most profits. They are not obliged to make huge financial commitments to charities. Although Starbucks seemed to be unethical according to most people’s standard, it fulfilled its role in the free market.

Surprisingly, Starbucks changed its position in response to social riots!

Work Cited

Seager,  Ashley.  “Starbucks, the coffee beans and the copyright row that cost Ethiopia £47m.”  The Guardian 26 Oct.

2006.