Category: Uncategorized

Apple has recently been in the news and not for new product releases and technology innovations, but because of harsh working conditions in its Foxconn factories in China. An article by the NYT, stated that there is “excessive overtime”, employees “live in crowded rooms”, “they stand so long that their legs swell until they can hardly work”, and they have “under-aged workers”. Moreover, there have been reports of suicides and deaths.

Although it’s true Apple is not the only tech firm whose products are being manufactured in those factories, the majority of “Foxconn’s 1.2 million employees are involved in assembling Apple products”. This represents a serious ethical business issue, such as that of Nike’s sweatshops during the 1990’s. Even though both cases are considerably different in magnitude, they share some similarities that should start to raise concern among Apple executives.

It not a surprise that firms, looking to cut costs, have increasingly been shifting production towards development countries over the last decade. However, it’s clear that Apple being one of the most profitable companies in the US can afford to invest much more towards improving the lives and working conditions of these workers. They should learn from Nike’s mistake and put more attention towards this ethical issue.

References:

• Nike’s sweatshops and Apple’s Foxconn comparison

Nowadays, firms that put an extra effort and spend more money on products manufactured without harming the environment, so called “green” products, are becoming increasingly popular to the eyes of consumers, example: Toms Shoes. The question is why?

Before, firms were discouraged by the fact that manufacturing green products represented higher costs than manufacturing mainstream non-eco friendly products. However, a study suggests that consumers will prefer to buy “lesser-quality but higher-status green goods”. This means that consumers are willing to buy higher-priced products with the purpose of “signalling self-sacrifice for the public good”. In other words, it is becoming a trend to wear bad quality and expensive goods just for the purpose of showing you care for the environment.

Although higher costs normally represent lower profits, “green” products are now apparently fashionable. Thus, firms are now less reluctant to be cheap, since investing more in “green” goods and advertising them will result in higher profits. Whether consumers are actually starting to care about the environment or they are simply broadcasting to the world they are “pro-environmental individuals”, everybody wins: firms are profitable, consumers are able to “flaunt” that they can afford this “‘selfless’ acts”, and the society is more environmental friendly.

References:

• Consumers attracted to status of ‘green’ products more than benefits, research suggests
• Advantages of green products

I thought the class on entrepreneurship was extremely interesting. The two guest speakers, Eric H. Carlson and Amielle Lake, were able to clearly describe what is entrepreneurship. However, each had their own stories and points of views. However, they both agreed on the same fact: entrepreneurship success often involves some degree of “luck” after repeated failures.

Eric Carlson, Founder and CEO of Anthem Properties, went even further and said entrepreneurship is “a way of being”.  After all, entrepreneurs are risk-takers which have a goal, often a dream or a passion, which they pursue until they are able to achieve. Moreover, a very interesting concept he portrayed was that “serendipity” also plays an important role. After all, you can’t spend your whole life failing. There must be a moment when everything manages to perfectly align itself.

Thus, although there is no magic formula for being a successful entrepreneur, one thing is certain: you must be perseverant and don’t be let down by failures. Serendipity just doesn’t happen by random, you must put yourself in that position. Seneca, the Roman philosopher, said it best: “Luck is a matter of preparation meeting opportunity”.

References:

• Serendipity or hard work?
• Anthem Properties

It was made clear from the People, Culture and Teams lecture that one of the important features of a successful company is having a solid organization culture, which is the “personality” of the company as a whole. Every hired employee must follow these core values. In the case of Zappos, “all new hires sign a document verifying that they’ve read and understood the Core Values” which ensures they fit with the company.

Lets take the example of Google. Just as Zappos.com, Google should be considered a role model company regarding its organization culture. Nowadays, it seems like everyone wants to work for Google. After all, it is quite a merit to be named Best Place to Work in the US by the prestigious magazine Fortune. What makes working in Google so special? In Google’s what we believe section they talk about 10 points that their employees follow, a bit like their philosophy of work. It is definitely their formula for success: it builds a strong “workplace culture”, lures the best employees in the market, happier customers, and ultimately more profitability.

Thus, it shouldn’t be a surprise that successful companies happen to have a good and solid organization structure. It is probably the reason for their success.

References:

• Happy Feet article
• Google’s organization culture article
• Core values: the key ingredient

Two blog posts from the blog Leadership for Good, made me think of the class discussion regarding the difference between social enterprises and non-profit organizations. Fundamentally, NPOs can’t run a profit, which is why they are fund through money from charity investors, whilst social enterprises use a business model, which means they use revenue streams to achieve their goals. Nevertheless, the same social mission drives them both.

The original blog post point out that social enterprises were born from “the result of non-profit ineffectiveness” and thus NPOs should fear them, giving the example of the successful Toms Shoes. However, the response blog post emphasizes the fact that this isn’t actually the case, giving the example of the NPO called The Cara Program which is changing lots of lives though it social enterprise Cleanslate.

It is probably true that social enterprises are more effective than NPOs, however this shouldn’t be a reason to eradicate the latter. It must be seen as an opportunity for both to help each other. In the end they have the same mission. Thus, I couldn’t agree more with the end of the response blog: “We all have the same goals – There’s no need for fear”.

References:

• Toms Shoes website
• The Cara program website
• Cleanslate website

The IT and information systems lecture raised my attention towards the magnitude of the Internet in today’s world. With more than 2.4 billion users, the Internet represents a highly attractive market where business can be easily made.

Thus, it is not a surprise that there are many businesses that are based solely on the Internet. Let’s take the example of Arnold Leung, Sauder Grad 2007, founder and CEO of Appnovation, a successful web, mobile, and intranet mobile app company. Leung was only 21 years old when he started his website development company that now generates $2.2 million in revenue.

Moreover, social networks such as Twitter and Facebook are becoming more popular every day. Most businesses nowadays have a Facebook page as it is an easy way to reach out to more customers all over the world and also they’ve realized that if they resist to innovation they would eventually be out of business.

Thus, it is clear that with so fierce competition nowadays, creating a business based on the Internet as a product (apps) or investing in a strong IT system (international websites) would certainly mark the difference between successful enterprises and the rest.

References:

• Arnold Leung UBC interview
• Arnold Leung small business CA interview
• Appnovation website
• Maximizing information systems to gain a comparative advantage

Enrique’s blog post about Coca Cola’s reason for success being not only the fact that they were the first in their market but also to their constant desire to grow, made me think of the importance of market research to analyze consumer behaviour.

As Enrique mentioned, ever since Coca Cola was created it has successfully gained the largest market share in the market of fuzzy cola drinks due to their effective and cleverly-thought-out advertisements. These marketing techniques must have been  made after a rigorous process of market research. The importance of conducting a market research can’t be stretched enough. Consumers are unpredictable and often act inconsistently, however, when analyzed in larger groups they tend to show patterns of behaviour. Therefore, market researchers are able to identify the consumer behaviour and try to understand their way of reasoning. This is useful to determine the company’s business plan as well since it helps them take decisions about which should be their short term and long term goals.

Therefore, we can say market research must be conducted in order to withstand the fierce competition in highly competitive markets such. As Enrique said the sole fact that they were the original brand (“The Real Thing” ad), there is never guarantee to rule the market share forever.

Can’s blog post about Nokia loosing profits in the first quarter of 2012 due to the high competitive smartphone market reminded me of the concept of brand positioning and value propositions.

The smartphone’s market has some huge companies such as Apple and Samsung which launch innovative and even ‘revolutionary’ products every once in a while. Thus, it is very hard for Nokia to find a spot in the conceptual map of consumers. Its market share decreased from 40% a couple of years ago to 10%. Therefore, it is clear that consumers are appealed much more towards the point of differences of the competitors than to those of Nokia. This is probably the reason behind Nokia’s decision to change its  mobile operating system from Symbian to Windows Phone software, made by Microsoft. The extremely high competitiveness forced them to try to innovate their products too. However, this strategy was clearly unsuccessful since instead of gaining more market share, consumers disliked the change of software in the new product Lumia and so sales dropped significantly.

It is very likely that the demand for Nokia’s phones stays low for a long time since it is is extremely difficult to change the conceptual map of consumers regarding a product, once this has successfully established itself.

Apple’s new iPhone 5 was released for sale in the US and Canada on the 21st of September. Analysts expected a 6-10 million iphone 5s sold in the first weekend but this number was confirmed to be only 5 million. Apple’s CEO Tim Cook said this was due to a shortage in the supply. Although we may not know the holiday quarterly earning until January, it can be safe to assume that the demand for Apple’s newest product will keep growing and provide it with billions of dollars.

The reason behind this lies on the fact that Apple is probably the company with the most brand loyal consumers in the world. The brand positioning of Apple in the conceptual maps of the consumers is quite strong. Consumers are willing to pay Apple’s high prices since they have the habit of making each new product they launch highly innovative. The image Apple seeks to depict to consumers is that of a premium brand selling premium products (“Think different” ad). Thus, even though the new iphone 5 has only a couple of new features than the previous iPhone 4s or the other competitors’ ones, Apple’s fans will still feel the “need” to buy the product.

Tim Hortons is definitely a trademark business in Canada. Not only this, but we can safely say it even constitutes part of its culture. Thus, it is particularly surprising to find out how this highly reputable company was also involved in unethical business practices.

The unethical businesses problem was one that caused some serious public outcry in May 2008. A Tim Hortons’ worker named Nicole Lilliman, aged 27, was fired after giving away a 17 cents “Timbit” to a baby. Although they realized quite quickly of their mistake by rehiring her, it was made clear to the public that an enterprise with a total revenue of $639.9 million and total profit of $94.1 million couldn’t withstand even the slightest possibility of profit loss.

Logic dictates that the employee shouldn’t have just given away the “Timbit” but asked for the mother to pay for it. Thus raising the following question: Is profitability the utter most important goal that an enterprise should seek to achieve? Certainly, Tim Horton is not just another Canadian enterprise but it is its largest fast food service. Thus, is particularly surprising to see that every business, including the seemingly customer friendly, is ruled by the philosophy of increasing profits.

References:

• Tim Hortons apologizes, rehires woman who gave away Timbit