11/17/13

Amazon Constantly Audits its Business Model

When I stumbled upon the on-line blog, “Amazon Constantly Audits its Business Model“, I felt that it is the perfect article to conclude a lot of the things that we have learned in Comm 101 this year — some of which may include the practice of auditing from the accounting class that we had, or even one of the most important concepts that we took away from the class, which was the business model canvas.

In this article, the blogger emphasizes on Amazon’s constant changes in its business model. Because they have recognized the fact that they are not at all that efficient in shipping goods to individual customers, the business model underwent several revisions and have finally settled down to “sell all, carry more” instead of its old business model, which was “sell all, carry few”. In this way, we see that Amazon has tried to increase its revenue streams by getting rid of as much inventory as possible. Furthermore, Amazon continued to reinvent its business model by coming up with a plan called “Fulfillment by Amazon”. In this, they plan to spend $14 billion to build approximately 50 warehouse facilities that would serve Amazon as a wholesaler of goods. This is also where independent producers are able to utilize Amazon’s warehouse connections to place orders.

From reading the blog, I had a strong sense of how ambitious Amazon really is by the looks of how often they keep revising their business model in order to better their revenue streams. In the end, I believe that if Amazon was to succeed in its fulfillment capabilities, then they would be truly deserving of it.

Sources:

http://blogs.hbr.org/2013/11/amazon-constantly-audits-its-business-model/

11/17/13

Solar Energy — A Way to Sustain Profits

As a company that converts “more sun into energy” than thirty-eight American states, Wal-Mart should be applauded for making such a sustainable decision that helps both the company and the environment in the long run. Providing enough energy that can theoretically power over 22,250 U.S. homes is a rather impressive phenomenon; currently, Wal-Mart holds the greatest capacity in terms of installed megawatts in comparison to other large corporations (see chart below).

Despite Wal-Mart’s intention in utilizing such sustainable method to raise environmental awareness, it’s inevitable that the corporate also uses this opportunity for publicity. On one side, Wal-Mart takes advantage of the new technological advances that have been made available to make a positive impact on the environment and carrying out the meaning of corporate social responsibility. On the other hand, the company utilizes this to lower its production costs, thereby increasing its profits simultaneously. As a one of U.S.’ main suppliers, Wal-Mart can be seen as the center of the U.S. economy. Because of this, I certainly feel that it is sensible for Wal-Mart try to reduce costs as much as possible.

Either way, the company is definitely doing good to its profits, as well as the environment.

 

Sources:

http://www.bloomberg.com/news/2013-10-24/wal-mart-now-has-more-solar-than-38-u-s-states-drink-.html

11/15/13

Coffee Dilemma: McDonald’s vs. Tim Hortons

As a coffee-lover myself, I found Gabriel’s blog post on “Coffee Troubles” to be very intriguing and relevant to the concerns that many coffee business currently face as a result of the increase in customer’s demands in brand preferences, quality and price. Focusing on the Canadian coffee industry alone, competition between Tim Hortons and McDonald’s can be evidently seen with their strategies in cornering a market segment.

Despite Tim Hortons’ dark roast coffee blend that was just recently introduced, the company’s sales haven’t been growing at a significant rate in the last quarter. In fact, its coffee sales have decreased 3% since 2009 while McDonald’s has gone up 5%. According to the comments from the article, some customers are reluctant to try the latest blend as their past experiences with Tim Hortons coffees had been quite unpleasant.

 

On the other hand, McDonald’s free small coffee and advertising campaigns are effective in targeting cost-conscious customers. Its recent launch of take-home ground coffee also seems to create the most potential for sales growth as a report shows that two-thirds of coffee drinkers brew their own drinks at home.

Below shows a perceptual map that I have created in regards to quality vs. cost for coffee. In addition to McDonald’s and Tim Hortons (in red), I have included a few other Vancouver coffee shops that are quite popular for the purpose of comparison.

Sources:

https://blogs.ubc.ca/gabrielcheung/2013/11/14/coffee-troubles/

http://www2.macleans.ca/2012/10/29/mcdonalds-aims-to-grind-down-coffee-competition-with-entry-into-home-brew-market/

http://business.financialpost.com/2013/10/28/tim-hortons-dark-roast-coffee/

11/8/13

Life at Google

Upon learning what Zappos is all about, Google Inc. immediately came into my mind when I tried to brainstorm what other companies possess a company culture as unique as Zappos’.

One of the main reasons for Google’s excellent organizational culture is due to the need to compete for potential workers with Microsoft, Apple and many other Silicon Valley firms. To make working at Google a more appealing choice, its HR/ “People Operations” department has incorporated various employee benefits over the course of the past few years, such as:

  • maternity leaves can be up to five months with full pay and benefits;
  • free gourmet food;
  • on-site laundry;
  • and Wi-Fi commuting shuttles.

Along with the existence of a team of social scientists called the PiLab, Google is able to efficiently study the organizational culture of the firm based on employees’ answers and in this way, able to address some of the desires or concerns that a majority have in a workplace. As seen, profitability may not be the only thing that matters in a company; instead, employees’ utility seem to play a huge role in increased productivity, company loyalty and excellent customer service — all of which benefits the company as whole.

Sources:
http://www.huffingtonpost.com/2013/01/22/working-at-google_n_2526889.html

http://www.google.ca/about/jobs/lifeatgoogle/

10/30/13

BlackBerry makes a comeback

As an android user for as long as I can remember, I had never gotten the chance to use the BBM service that only BlackBerry devices offered back when it was popular a few years ago. But when BBM was recently made available to Android and Apple users, I am finally able to use features such as chat service and barcode scanning — at zero cost.

After losing its ground in the international market awhile back, I think that the new-found popularity of BBM has definitely helped in bettering the market’s impression of BlackBerry as a whole. This can be evident by the fact that there has been an additional 20 million active BBM users after the free offering has been launched.

However popular BlackBerry has become once again, there are many uncertainties that still lie ahead. The main concern currently is how BlackBerry is able to grow in the market and sustain profits WHILE offering the free service. At the same time, BlackBerry also has to compete head-to-head with WhatsApp, a free and downloadable service that offers similar features as BBM, but has more than four times its active monthly users. To increase its revenues, I think that BlackBerry should invest on connecting its chat app service to social networks in order to keep the contents relevant to users. Similar to social networks, users may be much more interested in using BlackBerry’s service if there is a profile for each user to upload and share their photos and videos with all their contacts.

 

Sources:

http://www.theglobeandmail.com/report-on-business/blackberry-boasts-of-smashing-success-with-20-million-new-bbm-users/article15134557/

http://www.theglobeandmail.com/technology/business-technology/incredible-demand-for-blackberrys-bbm-service/article15033416/

10/22/13

Investment Troubles

Upon reading Sunny’s blog, “College: Is It A Good Investment?“, it had me wondering if it is worth investing both my time and money to attend university in order to (hopefully) obtain a high-paying job in the future. Looking at the article from the Financial Post, the staggering amount of money required to pay for post-secondary education plus the student debts that follow after university truly shocked me. On one hand, it is important to examine the fact that most companies nowadays actually require  a post-secondary degree for a student to be considered in getting a position within the company. Statistically, people with post-education degrees tend to earn a higher income than those who lack one; thus, one may immediately conclude that university is a good investment.

However, I will argue that although that university is effective in teaching students the tangible knowledge and skills that are useful in an older generation workforce, current work forces now have high demands for students with exceptional communication and application skills — two essential components that I think many students fail to achieve in the midst of obtaining their post-secondary degrees. In reality, I don’t think that a Bachelor’s degree defines one’s capability or intelligence. In fact, it is even quite often to see that people with a Bachelor’s degree is left employed as a result of unmet social skills. In the end, I feel that time investment in meeting such social expectations is also important aspect in obtaining a desirable occupation.

Source:

https://blogs.ubc.ca/ziluezheng/2013/10/07/college-is-it-a-good-investment-2/

http://business.financialpost.com/2012/02/27/post-secondary-worth-the-price/

 

10/5/13

iPhone 5s/ 5c: is it worth the price to upgrade?

With the new release of the iPhone 5s merely two weeks ago, it has been reported by Canaccord that the iPhone 5C is already undergoing “very strong sales” and predicts that it will sell over 52 million iPhones internationally during the last quarter in 2013 . In addition to this, the new Apple product has already stepped over the Samsung Galaxy S4 and is on its way to becoming “the top-selling smartphone” among the four major carriers in the U.S. Not only do the new iPhones now have better colour options, but they also have advanced technological features such as touch ID and improved camera. Although this may all sound very appealing to the vast majority, many consumers have difficulties deciding whether it is worth the price (which ranges from $199 to $849, depending on whether it is on-contract or not) to upgrade, but only to find Apple launching a better version in the near-future; and as far as the trend has gone so far, that may potentially happen. However, it is almost without a doubt if that ever occurs, Apple will be able to achieve this as a result of its strong reputation and consumers’ loyalty, regardless of the price.

Apple iPhone 5S release

10/1/13

U.S. Government Partial Shutdown & its Economical Effects

Partial shutdown was announced earlier today after the two Congress houses’ failure to compromise a new budget. Not only does this seem to have shaken the U.S., but it is also subsequently threatening world economics. On the U.S. socio-economic scale, over 700 000 U.S. federal employees currently face unpaid leave without any guarantee of receiving back pay after deadlock is over; as well, other staff  severely affected include the department of energy, health of human services, education and more. So what does this mean for the rest of world? As suggested by Goldman Sachs, an American multinational investment banking firm, the effect of the current deadlock can cause a hefty decrease of 0.9% from the U.S.  GDP in this quarter. To make matter worse, the U.S. is also about to undergo the “debt ceiling”, where it will exceed its borrowing limit to pay its bills. Not only will this have a large potential in depreciating many foreign external values, but it may also become a contributing factor to the existing world recession as America’s GDP and demand for consumption continue to fall.

Youtube Video: BBC News: How will the US government shutdown affect the economy

Sources: http://www.bbc.co.uk/news/world-us-canada-24343698
https://www.youtube.com/watch?v=MLIy_Iw35hQ

09/13/13

Abercrombie & Fitch’s Deteriorating Brand Reputation

On the recent subject of business ethics, I wish to comment further on the unethical practices that Abercrombie and Fitch, the so-called “casual luxury lifestyle brand“, has continuously been carrying out. After reading a fellow classmate’s blog post in class regarding the A&F employees’ “dress code” controversy, I have decided to further investigate various policies or current news that are associated with A&F. As if the dress code controversy was not enough, it was also found that the CEO of A&F had openly made a remark saying that they only want to “market to cool, good-looking people” and had refused to offer large/ plus sizes in their clothing lines. Why would the CEO make such offensive comments when its U.S. sales was reported to have already declined a hefty 17% in the first quarter 2013? Yes, it is true that the brand has become increasing more popular among age 18-22 year olds in the past couple of years, but is it necessary to use such exclusionary marketing method and promote “unrealistic standards of beauty” in this way? Needless to say, the company’s brand reputations is truly being tested and is nothing but spiralling downward.

Click here to watch “Abercrombie & Fitch Apologizes After Plus-Size Firestorm”

09/11/13

Business and Ethics…?

Immoral practices and poor decision-making are what triggers us to wonder whether business and ethics can truly coexist in such a competitive business-oriented world. From an article  in Los Angeles Times, it was reported that Toyota, one of the world’s largest motor corporations, was accused of keeping a malfunction issue secretive over the course of the last decade. The problem started when vehicle owners complained about sudden and unintended accelerations without applying on the gas pedal; over 12 million recall notices from all over the world were issued. While Toyota did not officially publicize the severity of this issue, the corporation instead bought the vehicles back from the owners in order to keep their clients quiet. In the corporation’s position, such decision was made in order to maintain their reputation, see its share rise in the U.S. and maximize their profits. However, the unethical decisions that had taken place ultimately resulted in the loss of consumer’s loyalty in the corporation; a ruined reputation and a $16.4 million fine do not even come close to compensating for the damages that the unethical decision had caused.