Comm101

Most people associate the topic of business ethics with unethical examples, as they tend to attract more attention from the media than ethical companies do. According to the Ethisphere Industry, Starbucks has been named one of the World’s Most Ethical Companies of 2010. They are not only considered ethical in regards to their efforts to promote sustainability, but also with their involvement in the community and their treatment of employees.

Starbucks is striving to reduce their carbon footprint through means of reduction of water and electricity consumption, ability to reuse building material, and promotion of the use of reusable cups.
Not only is Starbucks concerned about the environment, but the company is actively involved in the community, as they promote community service and participate the the (RED) Program, which raises money to help fund treatment and awareness for HIV/AIDS in Africa.
Starbucks also treats their employees ethically, contributing to a positive organizational culture. They pay their employees a higher rate than their competitors and provide employee stock ownership plans and medical plans. They also promote diversity in the workplace and the community, creating a more well-rounded organization and valuing acceptance among employees and consumers.

Starbucks represents one of the top ethical companies in the world, as they are concerned with global issues from sustainability and community to diversity and global wellness.

Craig Kielburger is, in my opinion, the epitomy of a social entrepreneur. At age 12, Craig developed a mission to help improves the lives of other children locally and overseas. His mission is now reflected in the organization that he founded, Free the Children, as well as in the social enterprise Me to We.

Me to We is an enterprise that organizes volunteer trips, hosts events, and supplies products that all contribute to their greater goal: being a social enterprise that

 “transforms consumers into world changers, one transaction at a time.”

Half of Me to We’s profits (from books, clothing, music, etc.) are donated to Free the Children, and the other half go to administration costs, expanding the social enterprise, and overseas to help improve the lives of others.

Me to We’s annual report of their impact demonstrates that Me to We is acting to change the daily actions of consumers to help change the world.

It all started with one 12 year old boy with a mission and a vision of the future. Craig Kielburger saw that one voice can make a difference, and his organization and social enterprise continue to expand and make a difference across the world one day at a time.

I consider Lululemon to be an entrepreneurial company because it was the first comapny to open up with its values and products. “The idea was to have the store be a community hub where people could learn and discuss the physical aspects of healthy living from yoga and diet to running and cycling as well as the mental aspects of living a powerful life of possibilities. Unfortunately for this concept, the store became so busy that it was impossible to help the customer in this way in addition to selling the product.”

They are constantly innovating their own products in order to maintain their reputation and instilling positive values within their customers about the human spirit and value of personal acceptance. These values put them ahead of their compeititon even more by creating a lasting impression on their customers, making them want to go back to the store. Their store atmostphere is positive and surrounded with inspiring phrases, contributing to the overall experience and atmosphere that they wish to present. Not only does their store atmosphere contribute to their success, but their product is geared towards yoga, which is another way that they inspire positive feelings within consumers. Their products are comfortable and stylish, combining the best of both worlds, making their products all the more valuable in the eyes of consumers. The founder of lululemon took a risk by focusing their products only on yoga-inspired clothing, as it was not popular at the time. They correctly forecasted the rising trend of yoga, and have become an extremely successful company since.

To learn more about Lululemon and it’s history, visit the company’s website.

American Apparel, a popular company in the fashion industry, is becoming very known to consumers mainly for controversy regarding the company’s business ethics. From their racy advertising campaigns to the extremely controversial CEO, Dov Charney, the company has constantly been under the scrutiny of the media.

I understand that advertisments that are out there and sometimes controversial can benefit the company in some cases by catching the attention of consumers, but what defines the point that this advertising is taken too far?
It brings into account business ethics and how far a company is willing to go to push its ethics to the limit without taking a huge negative toll from consumers and the media.

In my opinion, Charney has taken his advertising too far. Their advertisements use sexuality and exploit their model’s bodies in order to catch consumers’ attention. Ryan Holiday, American Apparel’s online advertising strategist, says

“We photograph models in a way that’s honest,”

but I agree with Leslie Goldman of The Huffington Post when she says it has now

“reached the point where good old-fashioned subconscious imagery has flown out the door and retailers are relying on the most obvious, explicit images possible.”

This also takes me to the point that some consumers may find themselves offended by the inappropriateness of the advertisments, especially parents of young children and parents of young adults of impressionable ages, where these ads act to promote sexuality in our society driven by influential media.

Click here for American Apparel’s Timeline of Controversy

As consumers, we are influenced every day by factors that contribute to our decision making. As a consumer, I have found that these influences can occur without conscious realization of it.

My purchases are significantly influenced by my family. Now, living on my own for the first time, I am finding myself having to make decisions on products to buy that normally my parents would buy when I lived at home. For example, laundry detergent posed quite a dilemma when I went to purchase it. There are so many in the grocery aisles, it would be impossible for me to choose which one to use. Essentially, they all have the same purpose and I ended up making my decision based on the brand that my parents buy at home.

Not only am I influenced by my family when I make a purchase, but the media has a significant influence as well. As consumers, we are exposed to an unbelievable average of 5000 brand messages per day. Each of these influence our decisions as consumers as to what we choose to buy through catchy slogans that try to catch our attention and bring recognition to their product’s points of difference. To catch the consumer’s attention, companies use media involving celebrity endorsement, simple memorable phrases/slogans, and comparisons between their product and their competitors.

With Toyota’s January recall due to acceleration problems, Toyota’s reputation of consistent quality of automobiles fell in the eyes of consumers. As the company dealt with the recall and its implications to try to re-establish their reputation, they ran into another issue which, combined with the last recall, may create a lasting negative effect on the company. Toyota is now establishing a recall on more of its products due to a poor braking system. 1.5 million vehicles have been recalled due to potentially slow brakes. A spokesperson for Toyota is calling the recall “a continuation of…commitments earlier this year to be more responsive and attentive to our customers,” recognizing that the two recalls within the same year can make a strong negative impact on the company’s reputation. The company is trying to counter the accusations that they have been slow to admit quality problems. Focus on public relations could help Toyota to maintain connections to their customers, and hopefully gain back their reputation of high quality and service. The issue is that, combined with the last recall and recent problems, this recall could be the “straw that breaks the camel’s back” when it comes to Toyota’s reputation.

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102100913.html

http://www.philly.com/dailynews/national/105507603.html

 Most people have the strong brand image association of the 3 diagonal stripes with Adidas. Not only has its famous image help drive its success, but the company is coming out with new marketing techniques in order to finally surpass its rival, Nike, in the sport retail industry. Adidas has been using athlete endorsement, including David Beckham and Venus Williams, and team sponsorship, including AC Milan and Liverpool FC, to legitimize its products by showing that high status athletes perform at a high level using their product. Sponsorship is not limited to just sport teams, as they sponsored the Beijing Olympics, opening themselves up into the newly emerging Chinese market. This can allow Adidas to take hold of the leadership of the new market and surpass Nike, opening itself up internationally as opposed to competing for the top position in the American market only. Adidas is making its point of differentiation against competitors its leading research and development into more technologically advanced products, luring consumers in through quality and innovation, with advanced products leading to improved athletic performance. Adidas’ new marketing strategies may be the approach that causes it to surpass Nike in the sports retail industry.

http://www.mcafee.cc/Classes/BEM106/Papers/2009/Adidas.pdf 

http://en.wikipedia.org/wiki/Adidas_sponsorships 

 http://www.boston.com/business/redesign/business/gallery/sports_endorsements?pg=6

On May 6^th, 2010, the New York Stock Market experienced what is now being called a “flash crash”, where the value of stocks suddenly fell, only to regain most of the lost value by the end of the day. In my opinion, this “flash crash” may not necessarily be an overall negative event, as it now exists as a warning to corporations and investors about the risks associated with taking advantage of price differences by buying a share only to instantly sell it to obtain a profit. Communication of market data needs to be improved across markets in order to prevent discrepancies that can lead to problems in instant trading. Another contributor to events such as this “flash crash” is immediacy of trading, caused by new technology such as Smartphones and other portable devices. This immediacy of information allows people to trade their share upon immediate notification of the share’s status. Overall, I believe that the “flash crash” will act as essentially a wake-up call for those who take advantage of the price differences in the stock market, buying and selling stocks at such a rapid rate that programming mistakes create serious negative effects.

http://www.economist.com/blogs/newsbook/2010/10/what_caused_flash_crash  

http://www.economist.com/comment/678404#comment-678404

http://www.doobybrain.com/wp-content/uploads/2008/10/stock-market-the-ride.jpg

Report on “flash crash” incident can be found on The Economist online news article “One big, bad trade” (Oct 1,2010)

Apple exists in a competitive industry where the latest technology and compact electronics are the defining points of success. They have redefined portable music players with their extensive line of iPods, but what makes consumers choose the iPod over other portable music players, such as Sony mp3 players?

Apple has positioned itself as a company that consumers trust to have the newest technology and are known to have aesthetically pleasing products. In order for a corporation to position its products successfully in a consumer’s mind, it has to be first in the industry, which is exactly what Apple did. They came out with the first portable mp3 player, and they have been a leading innovator ever since.

Not only has their product positioning contributed to the success of the iPod, but Apple released countless advertisements that reached out to all consumers. By having a generic image of a person dancing in the commercials, the commercial became relatable, opening the advertisement up to a greater target market.

The success of Apple’s iPod is based on their superior marketing strategy. Through product positioning and advertising, they reached out to a massive target market and successfully created a positive perception of their product.

http://www.besttechie.net/2008/03/01/the-ipod-success-thank-the-marketing-department/

http://www.247advisor.com/artman/publish/finding-niche-product-positioning.html

photos: www.apple.com / www.chailife.com

Wal-Mart, the famous superpower company, is attempting to expand into Africa by buying out Massmart Holdings in order to enter into a market internationally and expand globally. Wal-Mart’s attempted expansion into this market could bring in huge revenue for the company, seeing as South Africa is being named one of the world’s next emerging markets, with the International Monetary Fund estimating its growth at about 6% per year by 2011. If Wal-Mart were to obtain this opportunity, they could open themselves up to an expanding market and an entirely new geographical area in order to further expand into. By using Massmart’s success as a stepping stone, it minimizes the risk of failure since Massmart is already a successful supermarket. Since a quarter of Wal-Mart’s revenue is already coming from international markets, expanding into an emerging market could boost profit and productivity to make Wal-Mart an even stronger international corporation. I believe that Wal-Mart’s expansion into Africa is a beneficial move for the company, as it will increase their opportunity for further expansion while increasing revenue in a new emerging market.

 http://www.nytimes.com/2010/09/28/business/28views.html?_r=1&partner=yahoofinance