Rodrigo Rejas's Blog

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