Hi, I am Monica Moran

Recently, it has been announced that Walmart, one of the largest retailer stores, is planning to take over its equivalent in South Africa, Massmart with a $40 billion deal. Why? Walmart has been experiencing a rapid decline in sales in the United States but have been thankfully aided by strong sales of Walmart’s in China, Mexico and Brazil. According to Andy Bond, vice president of Walmart, “South Africa presents a compelling growth opportunity for Walmart and offers a platform for growth and expansion in other African countries.” (1)

One advantage of the expansion is that it will indeed help Walmart increase its sales and thus improve its financial problems. This will be a significant advantage in the long term as it will create financial stability for Walmart. In addition, expanding to different markets could help boost Walmart’s market share. Massmart will also benefit financially as they will have more support through Walmart.

Nonetheless, it may mean making redundant the workers of Massmart, and may put most of them out of jobs, which may create conflict with trade unions throughout South Africa. Since Walmart is a relatively western company, it could be a change in practices and working environment, thus creating culture clashes between employees from Massmart and Wallmart. In fact, the article states that Walmart have already run into problems with local trade unions, and people fear that it may happen again in South Africa.

Therefore, what may influence Walmart’s decision to takeover Massmart may be based on their corporate culture. Financially, the expansion will be beneficial for Walmart, however they may also need to analyze the non-financial factors that may impede their success, such as employee satisfaction. Based on what I learned in my OB (Organizational Behavior) class, the workplace environment (such as job satisfaction, interaction, is highly crucial for a large organization, such as Wallmart to succeed in.

(1) “BBC News – Wal-Mart in Talks to Buy South Africa’s Massmart.” BBC – Homepage. 27 Sept. 2010. Web. 03 Oct. 2010. <http://www.bbc.co.uk/news/business-11418762>.

In one of our Comm 101 classes, we were asked to contemplate Milton Friedman’s belief that the “only social responsibility of a business is to earn profits while following the law and basic ethical principles.” In other words, Friedman believes that business only act socially responsible to build a reputation with the consumers in order to increase demand. This got me thinking, and I finally came to the conclusion – based on business news –  that in the majority of cases, Friedman makes a valid point.

In reality, the main purpose of a business is to earn profit, and they do as much as they can to accomplish this goal. Therefore, yes, Friedman, is right to say that businesses only act social responsibility for the sake of it; they don’t do it for the better good but for themselves. Furthermore, most businesses undertake social responsibility to boost their reputation and brand image. Companies need to create a positive image in order to gain a competitive advantage in the business.

For instance, the Body Shop, at one period, created controversy because of their stand on animal rights. Primarily, the Body Shop acted socially responsible by advocating animal rights. Yet in 2006, people were stunned to learn that they had merged with L’Oreal, a company known for animal testing, thus making customers question their true standpoint. Obviously, merging with a large and well-known company such as L’Oreal will be a significant advantage to the Body Shop as it will allow them to become more financially stable and boost its brand loyalty. So was advocating animal rights a way for Body Shop to increase its reputation? If they were indeed sincere about their viewpoint, I believe that the Body Shop should not have merged with L’Oreal, but evidently their main purpose of doing this was to increase their sales, thus supporting Friedman’s statement.

Recently, Skype, one of the world’s most popular messenger applications, has announced their partnership with Avaya Inc. one of the largest suppliers and makers of corporate phone equipments. The reason being that Skype would want to its services to be used more by corporations and increase its credibility among businesses. As of the beginning of next month, Avaya will be letting customers route their calls through the call services provided by Skype (1).

One advantage of this partnership is that it will help boost Skype’s reputation to major corporations as Avaya is one of the biggest call providers used in the business world. This, will therefore increase the brand loyalty of Skype throughout the market. Furthermore, it provides both companies more stability, in that if one company is having financial trouble, they can lean on their partner to aid them overcome the situation. In relation to Skype and Avaya, this is a significant advantage because the share a common goal of effective communication between people. Nonetheless, a disadvantage of a partnership is that it could create conflict between the two companies, such as the share of profit. Skype will definitely have an advantage in this partnership as it allows them to further expand and become more known to the corporate world. However, Avaya won’t gain as much as Skype in the partnership as Skype is the main company that will be affected.

In my opinion, this partnership could change Skype’s position in a market, in that it’s also now a messenger application for corporations, increasing the company’s professional position in a market. However, both companies should both look at the financial and non-financial factors to see if this partnership will be successful in the long term. Whether they succeed, depends on the corporate stakeholders interest in Skype, and most importantly how the two companies will work together.

(1) Galante, Joseph. “Skype Teams With Avaya to Boost Its Business With Corporations – Bloomberg.” Bloomberg – Business & Financial News, Breaking News Headlines. 29 Sept. 2010. Web. 30 Sept. 2010. <http://www.bloomberg.com/news/2010-09-29/skype-teams-with-avaya-to-boost-its-business-with-corporations.html>.

Apple. One simple word which stimulates various perceptions into people’s mind; “sheek,” “awesome,” “the best,” etc. Why? Because of their marketing strategy. Apple is one of the most popular computer brand around the world, and their success have been mainly influenced by the way they advertise and promote each product. In fact, several of Apple’s product have been positioned effectively in people’s mind because of their marketing mix. Let us now evaluate some of Apple’s marketing mix and how their mix have been effective in their product development in the market, and able to position themselves as a brand leader in the customer’s mind.

Apple has been known for creating innovative products and to ensure that each one has a Unique Selling Point, such as the scrolly wheel in the i-pods, and the mouse pads in their MacBooks. Evidently, this invention helped increase Apple’s market share, catapulting apple to become the lead brand in people’s minds. In terms of pricing their goods. Apple products are known to be very expensive as a result of their high demands for their goods and for their high research and development costs. Nonetheless, this cost is not too significant to the company due to their rapid increase of sales as a result of their high quality products. To further boost their market share, not only did they create the iPhone but have extended it further by developing newer models such as the iPhone 3G and 4, also known as extension strategies to further develop their product portfolio and market share.

In promotion, the company mainly utilizes above the line promotion, advertising using various media tools such as the TV, magazines and billboards. Their ads are simple yet stands out, and as Rise and Trout state, it should be consistent with their brand (1). Apple’s brand personality is about lifestyle, freedom, simplicity, and thus their simple ads as well as simple packaging of their products are cohesive with their brand image.

The ad shown above is an example as to how Apple manages to make itself a brand leader in people’s mind. Emotions are associated with the slogan “touching is believing,” and consumers are drawn to the simple yet powerful image, which stands out against the black background. Thus, it creates a a strong impact in people’s mind. Personally, because of Apple’s reputation, its designs and simplicity, it will remain to be the brand leader in my mind for quite a long time.

(1) “Product Positioning.” QuickMBA: Accounting, Business Law, Economics, Entrepreneurship, Finance, Management, Marketing, Operations, Statistics, Strategy. Web. 29 Sept. 2010. <http://www.quickmba.com/marketing/ries-trout/positioning/>.