Am I ethical?

After stumbling upon this blog written by Chris MacDonald in Canada Business, it immediately brought me back to one of the very first classes in Comm 101 about business ethics.  The article discusses McDonalds and Target dropping their egg supplier, Sparboe Farms due to unethical animal treatment.  McDonalds’ and Target, being such large corporations, most likely accounted for a lot of Sparboe’s sales.  Consequently, this was a huge loss for the farm.

It is interesting to note that McDonalds’ was not directly dealing with Sparboe.  Rather, it received it’s “eggs via Cargill Inc., the agricultural giant that supplies all of McDonalds’ eggs.”  This shows “supply chain responsibility” on McDonalds’ part because despite not dealing directly with Sparboe, it was proactive in addressing the behaviour of its supplier when it could have easily ignored it.  This also exemplifies McDonalds’ buying power, as they are able to easily switch to a different supplier.

I believe McDonalds made the right decision.  This improves McDonalds image, appearing as a stronger ethical company.  Businesses everywhere are realizing the benefits of having an ethical brand image.  Moreover, this sets an example for other suppliers with the message that poor treatment of animals will not be tolerated.

Versus

This is in response to Rachel Reddy’s blog titled, Mike “The Situation” and Abercrombie.”  Rachel states that Mike “The Situation’s” “personality does not take away from their [Abercrombie’s] “image” they claim to uphold.”  I believe Mike “The Situation’s” image is not representative of Abercrombie and Fitch considering the fact that  Abercrombie and Fitch has branded itself as a “casual luxury” brand, providing shoppers with “classic, All-American lifestyle”clothing that does not adhere to Mike’s style.  Consequently, the company is justified in not wanting “The Situation” to be associated with it.

Although some brands have products targeted at people, such as Mike “The Situation,” who enjoy wearing tight t-shirts with embedded jewels and having noticeably fake tan skin, this is not Abercrombie’s target market.  Furthermore, Abercrombie and Fitch targets young adults, aged 18-22, whose style consists of trendy, ready-to-wear fashion.  In my opinion, “The Situation” does not fall into this target market.  As such, an individual that receives a considerable amount of press and is seen in million of magazines such as Mike, may confuse people as to what type of brand Abercrombie truly is when he wears its clothing because he does not accurately represent the brand.

Customer Service - Does it really matter?

This blog is in response to Carla Santos’ blog, titled “Customer Service is a BIG DEAL.”  In my opinion, customer service is only important to an extent.

Take Ryanair for example.  Despite receiving much publicity for poor customer service, it has been experiencing significant increases in profit.  Why? because the low cost of its services has greater incentive power over buyers than customer service does.

When I receive poor customer service, I always say I won’t give that company my business again!  Then months later, when in need of the same service, I forget about my past incident and only consider the opportunity cost of switching to a different product.  This usually leads me back to the company I vowed never to give my business to again.

Obviously this depends on a company’s brand image.  If buyers are purchasing high priced products, customers expect superior customer service. But for “run of the mill” products it is fair to assume customers base their decisions predominately on the cost and quality of the product rather than customer service.  The majority of consumers will sacrifice excellent customer service if it means receiving a product or service at a lower cost.

A few looks from the H&M Versace clothing line

Bryant Hsiao brought up some interesting points in his blog regarding H&M and Versace’s fashion collaboration.  Bryant suggests, “Versace is risking projecting a confusing image of the brand.”  I would have to disagree with this statement because H&M and Versace have both established such strong brand images, which means this one fashion line will not have a great effect on how the public views the brands.  This collaboration is simply a way to diversify the products, not change the brand completely.

Furthermore, although one may think H&M’s customers would not be interested in paying higher prices, the contrary may be true.  This sort of collaboration gives fashion lovers who may not be able to afford Versace’s high end products, the opportunity to purchase Versace pieces closer to their price range.

That being said, I believe this type of collaboration project is more successful for stores with well-established brand images.  It would be difficult for younger companies to embark on this sort of project since the two brands may have conflicting strategies or brand positioning that will confuse consumers as to what their brand truly is.

Doug Burgoyne holding his million dollar idea

In Noa Glouberman’s article in Make it Business magazine she presents an excellent example, through the company FROGBOX of how the success entrepreneurs acquire comes at a high risk of failure.

Doug Burgoyne, founder of the Vancouver based company FROGBOX, quit his well-paid job as a telecommunications company to pursue an entrepreneurial career.  FROGBOX became successful because of its point of differentiation, sustainability, which filled an empty niche in the moving market.  FROGBOX rents reusable plastic boxes and other moving supplies to customers.  The cost of their services is almost equal to that of using cardboard boxes.  Therefore customers have little reason not to use FROGBOX because not only are their services affordable, but they are eco-friendly so one does not have to feel the guilt of purchasing a large amount of one time use only cardboard boxes.

FROGBOX also displays product innovation, an essential element to successful entrepreneurship strategy.   Since start up, it has introduced new products such as reusable wardrobes and totes, dollies, and recycled packing paper.   By increasing the products and services available to customers this will increase FROGBOX’s bottom line while still staying true to their business strategy, eco-friendly moving services.