Monthly Archives: November 2013

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/