Tag Archives: business

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/

11/15/13

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/

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.