Monthly Archives: October 2014

In Laura’s blog, she has pointed out a very key marketing technique which the famous clothing brand Louis Vuitton has undertaken to distinguish itself from its increasing competition in the luxury market. She has mentioned that the Chairman of Louis Vuitton has opened a museum in order to display its versatility and willingness to expand from the luxury clothing department. I personally am really excited for the company’s prospects and seeing in what direction they take this new endeavor. Increasing consumer segments is a key factor in a company’s success, and this is a very smart move on their behalf to gain customers. This museum shows their interest in cultural understanding and flexibility in different markets. Since Louis Vuitton already has a big brand reputation so it has clearly fulfilled the point of parity requirement, but this museum will go a long ways to exhibit their point of difference factor, which is a very crucial part of distinguishing a business. New consumer segments will range from tourists to art enthusiasts since this museum of performing and contemporary art will resonate with that consumer market the most. Only time will tell how successful this campaign will be but I am very confident in its success.

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Louis Vuitton creating their Point of Difference

In yet another business scandal, Tesco, the UK based multinational grocery and merchandise retailer has been accused of overstating its profits for the half year (250 Million Pounds) and has come under investigation by the Financial Conduct Authority. Intervention of the FCA can impose criminal charges and punishment , which increases the issues that Tesco has to face. This event just goes to show how hard companies are trying to satisfy their shareholders in order to stay in business. As mentioned in my previous Blog, Ethics are the fine line that prevents this sort of behavior, but in today’s competitive business world, a brand needs to make sure it has a positive reputation in contrast to the competition. What Tesco did was count money in its income statement which it had not earned yet. While this may show the brands confidence in its ability to sell, it still does not conform to ethics to include such transactions in the income statement. The income statement is an important tool which shows shareholders and other key members how their brand is performing, tampering with that is an utmost breach of trust and in my opinion is a very distasteful thing to do.

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http://www.telegraph.co.uk/finance/newsbysector/epic/tsco/11132545/Tesco-accounting-questioned-by-Sainsburys.html

Insider trading is one of the most severe breaches of ethics in a Business. It is the releasing of stock/company information and even buying or selling a security as a breach of fiduciary duty/trust while in possession of non public information. Basically, using inside company information that other people don’t have access to and using it to gain monetary benefits. It is unfair ethically to other investors, it is a big betrayal to the company you are working for and is a crime punishable by prison. So the question remains, WHY do people do it?? The answer is greed as it is for so many similar situations. Like I mentioned before, remaining true to both your own and the business ethics that are in place is the most important way to make sure you never go down this path. Insider trading, though a is still very widely done and even accepted in few businesses for situations such as maintaining business power or making sure profits are shared equally. But overall, using knowledge that is otherwise unavailable to other people and using that to get a competitive advantage is a very distasteful act which goes against both personal and business ethics.