Online advertising has seen an explosive growth, as both size of internet traffic and the length of time spent connected online grew exponentially. Colin Strong’s article in the Huffington Post argues that online marketing as whole must re-examine its business model with the widespread use of ad-blocking software. Firms that are looking for advertising space need to see their ROI (Return On Investment).

If conventional display ads are not reaching the consumers, hosts must find other ways to penetrate the negative consumer response, such as “sponsored posts” on news feeds or “related pins” on your boards.

However, users on platforms like Facebook and Pinterest are often uncomfortable with the invasiveness of advertising. I personally stopped using Pinterest when the advertising started bothering me while browsing on the site. Which sacrifice should each firm take? Should it give up a certain portion of the traffic for advertising income? However, Facebook’s advertising power is founded on the large traffic it hosts- we are stuck in a catch-22.

With high rates of ad-blocking through browsers and other apps, the efficacy of online advertising industry as a whole is being put in question.

Yahoo is a success story- survived the dotcom boom (and the subsequent crash) and was hailed the biggest seller of display ads for years. However, its plummeting stock prices over the last decade reflect exactly how much it has fallen behind online advertising giants like Google or Facebook. Only in the last year has it begun to make a recovery. (Taken from Google Finance)

Claire Can Miller’s article in the New York Times discuss Yahoo’s new HR policies to bring about a change to the declining business. Effectively eliminating at-home workers, Yahoo is centralizing the work force. While this limits the freedom each employee has over designing its workplace or work hours, this could have the benefit of increasing face-to-face communication.

A point to note is how repeatedly employees state that being in their workplace is distracting- unlike the common notion that home offices are distracting because of the likes of household chores. Employees functioning more efficiently independently implies that team working strategies are failing- largely due to the environment and atmosphere.

Bringing the employees back into the office may face some decline in job satisfaction, but is a bold step towards creating a cohesive organization that drives the change in Yahoo for the better.

In response to post from Harvard Business Review‘s blog post, let us examine the difficulties of Business Technology Management. Blog blames the leadership for the system’s breakdown, and to an extent, I agree. Testing could have eliminated the simple error that halted Obamacare’s debut.

However, it seems unfair to judge leaders as solely at fault, when by nature, programmers and managers have differing objectives; one wants to “do it right”, while the other demands to “have it done as soon as possible, at the lowest price”. Both only are serving their purposes. When such interests conflict, it is often the management (who are the bosses) that get the say.

In light of this, management must develop appreciation for the processes involved in creating software system.

As important as politics and business strategies may be, every business falls apart when the product or the IT system that supports the organization goes awol.  Cost minimization cannot come at the cost of compromising quality, stability, or functionality.

Here is a satirical comic illustrating the “bugs” in Obamacare’s elaborate IT system. The mistake was a simple one, as small as spilt coffee over the chips. However, the management had to pay top costs for faulty implementation.

Financial markets have always been extremely volatile- but only few years after the devastating stock market crash of 2008, it has risen to heights that raise fear in economists. Inflated market might lead to a “bubble”, where over-valuation of stocks lead to unrealistic demands. The danger with this, (as we have seen from history) is that when the price doesn’t meet the actual value of a stock, and the investors realize this? The demand for stock can rapidly (in units of seconds, even) disappear- leaving a void of financial investment for firms.

In Micheal Babad’s article, it is mentioned that the low interest rates can justify the high stock prices somewhat. This logic can be explained by the judgment of present value learnt in class. Since the future value is in ration to interest rate (so opportunity cost of investing this money), the price of assets are inversely related to interest rates.

Will we ever learn? Just as the stock market recovers from its latest downward spiral, already analysts sense inflation on the rise- especially with the sequential IPO’s of new tech companies (that suffered from over-valuation).

With the explosion of e-commerce, the barriers to entry for startups in cyberspace was lowered. At the same time, firms face higher risk of falling out of competition. Smocked Auctions of Amy Laws and Nicole Metzger Brewer is a bidding page through Facebook for overstock of baby clothes. Called “F-commerce”, this new platform for reaching and connecting with customers lends itself to startup since there is already a large traffic established through Facebook as well as the “word-of-mouth” referral system built in with “likes”- all at virtually no cost.

Kenny explores real-world businesses that practice extensive testing to prevent failures in launching new IT projects(either a wholly new business or a new venture within a bigger firm). However, too much beta testing as a detriment to a successful startups.

Lean Start-up movement discussed in class offers model that practices “agile development” which lessens risk and shortens the response time for firms to react to initial customer response. Laws and Brewer have also survived the volatile market by having this flexibility- for example, quickly adopting other methods of marketing like Instagram when Facebook’s algorithm for news feed posting changed.

This infographic shows all the elements a startup needs, built on top of a foundation of strategy, idea selling, and problem solving- which all need to happen instantaneously!

Social entrepreneurship has always offered solutions to problems in society (as Cynthia describes here); Mohamed Ali argues how entrepreneurship itself Is the solution.

Ali’s  Iftiin Foundation supports small startups in Africa through mentorship and funding. He argues that by providing work for the unemployed, entrepreneurship allows these youth to “be creators of the economic opportunities they are so desperately seeking”. Just by offering value proposition that had never been before, being resourceful, and strategically enhancing the lives of the customers, the work of these youth is serving a larger societal purpose.

Even without identifying itself as having a vision of social entrepreneurship (or even knowledge of the term), these Somalian youth have effectively created a social enterprise. Their presence in the society pushes economic growth; their products (flowers at a wedding) brings hope to the land suffering from no greenery after decades of war.

Alanna presents another model of a social enterprise that began with the goal of employing youth and began to serve a grander purpose. The key to creating shared value is to ensure that each step of the business model integrates and generates social value, rather than “plugging in” environmental causes into a T-shirt business through a marketing ploy of planting ten trees for each sales as TenTree does.

The app market seemed like the opportunity of the decade, but actually isn’t all that reminiscent of the dotcom boom, or the free-for-all business opportunity it appeared to be. (Original Article)

The abundance of free apps make consumers hesitant to pay, and firms must seek other revenue streams such as in-app purchases or advertisements. Yet, it has benefited for existing firms strengthen customer relationships, such as Cosmopolitan expanding e-subscription.

Current market is saturated with both independent developers and corporations, creating a fragmented market. As measured with Porter’s Five Forces, this industry is extremely competitive. Not just that, each app is threatened with substitutes outside of app market as well; note-taking apps with traditional notebooks, apps for text files with dedicated ebook readers.

This contrasts to markets like smartphones, with high entry barriers (technology patents, high entry costs) that have clear leaders as Christopher elaborates. In Patricia’s post about airlines, individual customers have much buyer power, but also high switching costs. Thus, they are more likely to remain loyal to one firm. In the app market, switching happens almost instantaneously, and the intuitive interface makes learning curve for the new app momentous.

Gartner forecasts that app market downloads will grow, but along with the percentage of free app downloads, creating worries about slow growth in revenue compared to growth in volume.

Uniqlo, the successful Japanese clothing retailer, is expanding its international market (though it has some struggles, as shown here). It employs a direct business model, eliminating the middleman’s markup. However, it actually boasts the longer days of inventory as contributing to its success, contrary to what the class observed with Dell’s operating strategy. (Original Article Here)

The notebook computer industry is geared towards up-to-date technology and the value depreciates with time, while Uniqlo markets their clothes as staples that are always in style. Since the inventory does not need to be updated as with Dell or constantly in stock as with BMW (Christopher’s post demonstrates how fatal logistics error can be), spending the capital and labour to maintain a shorter shelf-life might simply be a waste.

This creates a distinctive advantage over competitors such as Zara that have overstock of unpopular items every season that must go quickly to keep “on top of the trend”. Uniqlo’s product range has less risk that it will not sell, since each basic item is similar to the previous one that sold. Lower variability, lower risk.

Uniqlo’s store are always filled to the brim with each product; this is hardly possible for other “fast-fashion” chains that compete in the market such as H&M or Forever 21.