Category: Uncategorized

I recently read Chris Macdonald’s blog post on The Business Ethics Blog about Twitter and the appropriateness of tweeting Remembrance Day tweets. He mentions that although many businesses often participate in the remembrance of veterans and those who died and served in combat during war times, it can be seen as unethical for a social media site such as Twitter to do so. I agree that since it is likely that Twitter’s main reason for tweeting is to boost sales, it could represent their company in a negative way to use their staff to tweet Remembrance day messages. It may come off as them trying to come off as socially responsible when they are really using a solemn occasion to their own economic advantage. Having said that, I do believe that businesses play a part in society and that comes with a certain level of social awareness. This means that because companies are a system made up of human beings, it is only natural that firms and businesses join in on holiday celebrations to show social responsibility. This has become a natural reputation maintenance method for businesses and are not considered unethical to most people nowadays.

Source: http://businessethicsblog.com/2013/11/12/the-ethics-of-businesses-honouring-remembrance-day/

I recently read Winnie’s article on Motorola’s new invention.After Google’s buyout of Motorola, the phone company has innovated a cheaper phone, made to target a customer segment that is not willing to pay the high prices of a regular smart phone. The “Moto G”, as the phone is called, is priced around $180, making it a cheaper alternative to the iPhone and Google’s higher end smartphones. I agree with Winnie that the Moto G will definitely allow Google to create a new revenue stream as it explores a market that has been unexposed to their brand before. This may be caused by the high prices of previous products that make the product unaffordable with certain consumer’s income. However, with the Moto G brought into the market, Google is able to maintain its brand recognition with its high end products while creating more revenue flow through Motorola in the lower income markets. With specific focus in the South American market, it is anticipated that Google will see great returns with its new low cost focus strategy. This is a smart move on Google’s part, as they are now able to reach a whole spectrum of different users.

Sources: https://blogs.ubc.ca/winnieng/

Facebook has been known as one of if not the most popular social media website to use in the past few years. However, is Facebook’s popularity slowly declining? This phenomenon is explained by Jenna Wortham in the New York Times. Chief Financial Officer of Facebook, David A. Ebersman, noticed “a decrease in daily users, specifically among younger teens” proving that Facebook is indeed losing customers from one of its crucial markets. Wortham suspects the decline in use to be due to Facebook’s function not being as it was in the earlier days.

Wortham further explains that Facebook is no longer a place where teenagers have fun, but acts more of a place to visit when they have nothing better to do. Over the years Facebook has added countless new functions such as the “Like” button, Facebook chat, and timeline, all in hopes to develop a service like no other. This strategy may have backfired however, as Facebook continues to innovate and branches further away from their original value proposition. They are losing an important customer segment, and that is teenagers. As the saying goes: Monkey see Monkey do. When will Facebook lose its title as social media giant?

Sources: http://bits.blogs.nytimes.com/2013/11/16/still-on-facebook-but-finding-less-to-like/?ref=business&_r=0

Netflix is known as one of the top on-demand internet streaming providers in North America and plans to continue refining its services. In light of this goal, Netflix made an announcement that it wanted to focus on direct investments in the movie business. Recently, Netflix billed “The Square” as the company’s first major documentary acquisition, and believes this acquisition to be “getting closer to what consumers want”. (Oscar contender “The Square” is an Arabic documentary about the Egyptian protest centred in Tahrir Square.)

This Arabic documentary’s popularity and Netflix’s ability to acquire its content successfully   has helped Netflix put a foot towards providing streaming media when it is first or recently released. Netflix hopes to improve its’ point of difference through this strategy, which is to provide a subset of original programming rather than a stockpile of dated films or TV shows. By establishing a stronger point of difference that is feasible, communicable, and sustainable, Netflix is setting itself up for positive future growth as it continues to provide unique services in its field and improves its services with newer content. 

Sources: http://www.nytimes.com/2013/11/05/business/media/netflix-acquires-streaming-rights-to-highly-praised-documentary.html?_r=0&adxnnl=1&ref=netflixinc&adxnnlx=1384679175-8nZRJaVxSAGTue4EdcPSig

H&M has come up with a ground breaking new strategy to improve overall customers experience for shoppers. Waiting in long line ups during christmas holidays may no longer be an issue for this large retailer as it launches a new “try and buy” option that lets customers pay for items directly inside the changing rooms. H&M will have cashiers set up inside the fitting area with sales advisors as well. Such services are considered unusual for chain stores, making H&M the first amongst its competitors. “I’ve only seen it in [small, independent] higher-end stores” says Jamie Merriman, a research analyst at Sanford  C. Bernstein.

H&M’s new strategy to enhance customer proves to be rather costly, with existing costs at its flagship store of $2500 per square foot for rent, and additional personnel costs will be accrued due to higher demand for labour once the service is initiated. On top of this new service, H&M can expect additional costs from its social media lounge including free wi-fi and iPads. The opportunity cost of reducing customer “in-store time” is that they are less exposed to H&M’s products, and their strategy may end up backfiring as traffic becomes less frequent.

Source: http://www.businessweek.com/articles/2013-11-13/h-and-ms-megastore-brings-cashiers-inside-the-dressing-rooms#r=hp-ls

In the United Kingdom, one of their largest furniture companies, IKEA, has decided to devote itself to becoming more sustainable. In fact, IKEA has gained the reputation as one of the greenest retailers in the UK, and plans to further extend this reputation.

In partnership with Nissan, IKEA plans to install charge points for electric, or no emission vehicles at all its retail locations. IKEA is able to demonstrate its vision to be more sustainable as a company through eliminating barriers in a more eco-friendly car industry. IKEA plans to eliminate one of the top issues with the electric car market, which is finding convenient places to charge the cars.

IKEA is aware of its customer’s need to live more sustainably, and hopes to achieve this through shared value. “Research released by POD point, one of the UK’s charging infrastructure providers, revealed in 2011 that IKEA Wembley was the most popular place for charging an electric car in the whole of the Source London Network”. Customers are able to make more eco friendly decisions with the rising EV market and are supported by IKEA with its charging points, hence making customers view IKEA as a company that has social responsibility.

Source: http://www.greenbiz.com/blog/2013/11/13/ikea-charging-electric-cars

Society has entered an era where even toddlers are media-saturated. A two year old can be found using iPads excessively, and nowadays it is considered a norm. Tiggly, a New York based start up company, hopes to turn the iPad into a “touchable toy for toddlers”. Phyl Georgiou, Tiggly’s co-founder observed the high usage of the iPad in the baby market, and states that “there’s 70 years of academic history that says motor skills, spatial skills are very important to young childhood development”. Backing up this idea, a team tested Tiggly with 150 kids and experienced positive responses. To create Tiggly, Georgiou was able to gather funds from private investors and Kae Capital.

Tiggly acts as an example of a lean start up company. Instead of taking the traditional route of a start up company that begins with a business plan and lack of customer feedback, the company created a minimum viable product by testing the product with people who fit into their target segment. This way, they are able to gauge at the customer response to their product and validate customers’ interest. Lean start-up will prevent Tiggly from experiencing a fatal setback in the future because of information gathered before executing its model.

Source: http://www.businessweek.com/articles/2013-11-12/turning-the-ipad-into-a-touchable-toy-for-toddlers#r=nav-f-story

Bayerische Motoren Werke, better known as BMW, has irked some negativity with its recent supply-chain problem. This luxury car maker has been seeing issues with its changeover to a new logistics management system in their central warehouse in Dingolfing.

Since this logistics conversion, thousands have suffered long waits. “About 3,000 BMW customers had to wait an unusually long time to get their cars repaired because of missing parts” Schwarzenbauer said.

This large project is also said to be “the biggest data change-over at BMW in the last 20 years”.

Their temporarily flawed supply-chain system can potentially lose them their loyal customers. BMW shows us that an efficient operations team is crucial to predict and prevent these sort of situations. “Looking back, we should have completed this two to three weeks earlier.” said Schwarzenbauer. If a customer cannot get a product successfully in a timely manner, it does not matter how great the product is.  BMW’s rocky transition from one logistics system to another should be an example to others how necessary good operations are in a company.

Sources:

http://www.businessweek.com/news/2013-09-10/bmw-to-fix-supply-chain-delays-by-month-s-end-executives-say

Apple has introduced a new family member to its extended family tree of phones.

The transition from the iPhone 5 to the 5S is quite small. The only real difference between the two devices is the finger scanner in the home button.

Here’s the catch: there are two different iPhone 5’s introduced into the market. Aside from the iPhone 5S, the iPhone 5C is targeted to individuals looking for a cheaper alternative to the original line of prestigious apple phones.

Apple has been criticized for its high prices that come with its status earning phone. It has become evident throughout these past few years that Apple should lower their prices. The company hopes to provide high-end consumers with high end products, but also branch out to a community with cheaper phones. It ensures visible difference in the two phones: iPhone 5C carries 5 vibrant colours (plastic) whereas the iPhone 5S comes in gold, black and white.

This shift from generic strategies may be costly. Apple’s original generic strategy revolves around differentiation. It’s new approach involving lower cost products shows its efforts in entering the cost leadership strategy. In Porter’s Generic Strategies, being “stuck in the middle” of strategies will not gain Apple a competitive advantage. 

Sources:

http://www.businessweek.com/articles/2013-09-10/apple-releases-two-new-iphones

Ads are everywhere. It may seem that the general public has become immune to advertisements, but this isn’t stopping Instagram from jumping onto the social media advertising scene.

In a recent article found on Businessweek.com, Joshua Brustein reveals Instagram’s plans on showing advertisements in its news-feed.

However, this photo-sharing service business is being strategic about how it is introducing their advertisements. First introducing the video playing feature, Instagram strived to beat its competitor, Vine. Instagram was not only trying to beat its rival business, but was looking for a way to sell video advertisements that fetches much higher rates than online display ads do.

This decision may anger the users of Instagram, but like many have adapted to the ads of social media giants Facebook and Twitter, it is probable that users will continue to use Instagram at a consistent rate. This is because of Instagram’s success in brand positioning. Its’ services carry a very strong point of difference: photo sharing. Presently, no other apps on the market uniquely provide the feature of real time image sharing. This gives Instagram a huge advantage and therefore the choice of including advertisements in its news feed may not lower its user count.

Sources:

http://www.businessweek.com/articles/2013-10-03/instagram-will-have-ads-dot-get-over-it#r=nav-f-story