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The Schumpeter group’s blog reveals that money can buy you friends after all – just not real ones (see blog, “Beware the Tweeting Crowds“). Barracuda Networks (a network security, application delivery, and data protection company) finds that on average, a crowd of one-thousand Twitter fans costs merely $18. Furthermore, a recent study shows that a vast portion of social media followers of large companies are not even human beings, but a collection of fake, computer-generated profiles.

 The blog argues that the majority of Internet users today are slow to take these fake fans in to account when we form our impressions about specific brands. We see a huge number of “likes” on a company’s Facebook page, or a huge number of “followers” on its Twitter, and instinctively we attribute a high value to the brand. Likewise, seeing few “likes” and scarce “followers” may turn us away from certain brands just because they seem unpopular. What does this mean to companies? It means they can take advantage of our shallow thought processes and dupe us when it comes to social media, giving them what the Schumpeter bloggers call “an artificial boost to business”.

While reading the blog, I couldn’t help but be reminded of Class 17’s lecture on Information Technology and Information Systems – particularly the preparation reading, “Computer Program Spots Fake Product Reviews“. This has led me to conclude that as more and more companies resort to buying fake reviews or fake fans to build brand value and gain some kind of competitive advantage, there will come a time when big numbers beside a thumbs-up icon just won’t have as big an impact anymore. Keep in mind that consumers are also becoming increasingly aware of this type of deception.

To quote Donovan of Ogilvy Action, “The number of followers is a superficial measurement unless they are engaged”. 

Sources

Main article: http://www.economist.com/blogs/schumpeter/2012/11/social-media-followers

Photo: http://schellers.com/dir/136/images/site/Twitter_button.jpg

Who doesn’t like adding a personal touch to identify with the products we purchase? Especially since almost everything we buy nowadays is mass produced – we delight at the new ways in which producers give customers the right doses of autonomy. This, as discussed in Lecture 13 on Supply Chain, is called customization.

One popular example of customization is evident in Starbucks. The company has created its own diverse language through which customers can design their “perfect”, personalized beverage. Varieties of syrups, choices between milk, style of drinks which can be further divided in to categories and sub-categories; the number of possible combinations can easily, and literally, reach the tens of thousands mark. To showcase its flexible customization framework, and satisfy our creative needs (and cravings), Starbucks has even developed a website: My Starbucks Signature. The freedom that we value so highly, of course, comes at a cost. Starbucks does not price its products low. In fact, giving us the power to personalize our products, gives the company even greater power to jack up its prices.

Getting us addicted to our new favourite Starbucks beverage, personalized to our convenience, taste, and delight, builds significant brand loyalty. It is no wonder that Starbucks is the dominating coffee retailer today!

Sources

Main article: http://articles.chicagotribune.com/2011-02-26/business/ct-biz-0227-single-coffee-20110226_1_consumers-nikeid-northfield-based-food-giant

My Starbucks Signature: http://www.mystarbuckssignature.com/en-us/#step00

Photo: http://www.examiner.com/images/blog/EXID15092/images/happyhour-1.jpg

As discussed in Class 14 on People, Culture, and Teams, it can be hard to establish what we call a “corporate culture” – or, as cleverly defined by a fellow classmate, a company personality. Of course, one of the fundamental ways in which businesses portray these unique “personalities” is through customer service. Employees collectively represent the face of the company, shaping its identity through interacting with customers on a day-to-day basis. For this reason, it is important that businesses try to recruit the right people who not only have the right skill sets and qualifications for the job, but who also demonstrate a certain loyalty to the business and its core values.

Take the incredibly popular online shoe retailer, Zappos, for example. Its ten core values, which must be embraced and practiced almost religiously by its employees, are the following:

1. Deliver Wow Through Service
2. Embrace and Drive Change
3. Create Fun and a Little Weirdness
4. Be Adventurous, Creative and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships with Communication
7. Build a Positive Team and Family Spirit
8. Do More with Less
9. Be Passionate and Determined
10. Be Humble

Zappos’ corporate culture reflects an appreciation of community and a celebration of life in its many progressive forms. It nurtures team spirit, open-mindedness, and creativity, and this creates a special kind of value in the customer’s eyes that can not otherwise be obtained through a physical good. Corporate culture therefore, is never a tangible “thing”, but rather an underlying identity, an abstract concept, a set of ideals.

Sources

Zappos website: http://www.zappos.com/index1.zml

Photo: http://comerecommended.com/files/2011/05/company-culture.jpg

Running a for-profit, self-sustaning business while simultaneously creating a positive social impact on the world sounds almost too good to be true. Some would even argue that the very nature of business is built upon a foundation of self-interest and the ultimate goal of profit-maximization. Similar to the ambiguity and skepticism surrounding the idea of “philanthropic capitalism“, is “social enterprise” a self-contradiction? I’ll explore the latter in this blogpost.

Following Lecture 12 on social entrepreneurship, my curiosity led me to investigate a popular footwear and eyewear manufacturer which fits quite nicely in to the category of a social enterprise: TOMS. In an article, Blake Mycoskie (founder of TOMS) discusses how his company’s success has clearly demonstrated that “[g]iving can be, and is, good business“.

TOMS’ One-for-One policy, now widely adapted in business models across the world,  is a sustainable way of giving that truly distinguishes TOMS from a typical charity. As we identified in class, charities, being at the mercy of donors and the government, tend to rely mainly on donations and grants. Although charities and social enterprises are both prone to the variability of economic climate, social enterprises tend to have more control due to their independence as a self-sustaining entity. Using the One-for-One policy as an example, so long as TOMS succeeds in securing customers (and it can do this by employing business techniques), it can continue to provide shoes and eyewear for those in need well in to the future. In other words, marketing the cause, managing an efficient and socially responsible supply chain, diversifying product lines, riding trends, and designing products that consumers desire, are all ways in which social enterprises utilize a for-profit business approach in order to create a long-lasting benefit to society.

Perhaps the seemingly paradoxical nature of the “social enterprise” contains elements of truth after all. On this note, I leave you to ponder a famous quote by Adam Smith:

It is not from the benevolence of the butcher the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

Original article: http://www.scmp.com/lifestyle/fashion-watches/article/1058738/toms-founder-says-business-all-about-giving

Social enterprise: http://www.ssireview.org/articles/entry/social_entrepreneurship_the_case_for_definition

Philanthropic capitalism: http://www.success.com/articles/852-the-business-of-giving-toms-shoes

Photo: http://www.fengshuicreative.com/wp-content/uploads/2011/09/Toms-shoes-trend.jpg

Video link: Multimillionaire Entrepreneur Jane Wurwand on Self-Reliance

Be they a social entrepreneur or not, all entrepreneurs have stories. In Class 12 on Social Enterprise, our guest speaker highlights well the defining characteristics of an entrepreneur, and the steps she takes to innovate change. Jane Wurwand, in the video above, followed a similar path to success. She recognized a problem, saw an opportunity, addressed it using entrepreneurial principles, and organized a profitable, self-sustaining venture.

In the video above, Jane Wurwand, founder of the California-based skincare company Dermalogica and The International Dermal Institute, discusses some of the driving forces behind her success as a multimillionaire entrepreneur, and the core values she stayed true to throughout her journey. Since its startup in 1986 with a mere $14,000, Dermalogica has never brought in investors, or acquired debt financing through a bank loan. In 2011, sales reached an incredible $260 million!

Jane started out by identifying two fundamental problems in the skincare industry: 1) lack of training, and 2) lack of professional salon skin care products. When Jane pursued her venture, one of her main goals was to ensure, from a professional perspective, that quality skin care products should promote skin health, not beauty. Inspired and driven by this core value, what Jane innovated was the first cosmeceutical and pharmaceutical skin care hybrid. Today, Dermalogica products are sold in 86 different countries in more than 28,000 salons and spas. Additionally, The International Dermal Institute professionally trains over 75,000 skin therapists every year.

Sources

Main Video: http://www.entrepreneur.com/video/223476

Dermalogica: http://www.dermalogica.com/ca/

The International Dermal Institute: http://www.dermalinstitute.com/ca/

After seizing 189 Zellers sites in Canada last year, American retail giant “Target Corp.” will open its stores officially in Canada in 2013. This company will prove to be tough competition as it expands in to the Canadian market and poses an immediate threat to the dominating retailer, Walmart.

As Derek Kwan discusses in “Target – New Entrant to the Canadian Market“, new entrants generate rivalry amongst companies, and this can have an effect on important factors, such as buyer power and price (see article “Porter’s 5 Forces“). The more competitors, the more choice. And the more choices available, the more power we, the consumers, have to walk away. In some cases, increased buyer power can even influence price. When faced with tight competition, Walmart tends to slash its prices in order to maintain a low-cost appeal to its customers. It remains to be seen, however, whether or not Walmart’s low-cut prices are enough to keep buyers from the enchantment of Target’s unique products and superior brand image when it makes its debut in 2013.

Original article: http://business.financialpost.com/2012/04/11/wal-mart-braces-for-targets-foray-into-canada/

Porter’s 5 Forces: http://www.quickmba.com/strategy/porter.shtml

Photo: http://media.therecord.com/images/33/58/38990d8148f2b818033584f2ab96.jpeg

A Facebook team is currently working to develop a new search engine component for the popular social networking website. While this feature undeniably crosses in to Google turf (see Albina Gibadullina’s “Will Google no longer be the most renowned search engine?“), internet-users will look to Facebook for a unique, hip, and inventive spin. In the business vernacular, these distinguishing qualities are called points of difference. How will Facebook’s search engine satisfy our immediate needs while enhancing our social networking experience? What will Facebook offer us that Google can’t?

Consider this: Do we pour as much personal and social information in to Google as we do so willingly, and frequently, on Facebook? The popular social networking site stockpiles massive amounts of unique information on its users. As Paul Cubbon mentioned in his video lecture on value propositioning, socio-demographics (age, gender, location) as well as psychographics (values, attitudes, lifestyles) can provide valuable insights in to the consumers’ minds. If Facebook makes optimal use of its data, it can reinvent the search engine such that it establishes a point of difference which attracts an even larger pool of consumers.

Photo: http://www.searchenginejournal.com/wp-content/uploads/2010/06/facebook_vs_google.jpg

Paul Cubbon: http://www.sauder.ubc.ca/Faculty/People/Faculty_Members/Cubbon_Paul

Heard of the rumor that fries from McDonald’s can’t rot? Or perhaps you’ve heard the one about “pink slime”. Well now, McDonald’s Canada is using social media to set the record straight. Launched in June 2012, the website “Our Food. Your Questions” aims to debunk popular myths about the company and its products by answering consumer inquiries directly. Today, the site has hosted over 2 million interactions and over 10 million video-response views.

Venturing in to the unpredictable and risky realms of social media can have both positive and negative effects. Because information spreads so rapidly on the Web, there exists opportunity to stamp-out false rumors by the masses, allowing McDonald’s to regain some of its credibility and repair its reputation. At the same time however, relating back to the marketing concept of brand positioning, it is extremely difficult to alter consumers’ impressions once formed – especially if the company has developed a bad image. McDonald’s products are known for being so cheap, so low in quality and nutritional value that consumers can make all kinds of bizarre accusations against its food safety, and people will still believe it.

Original article: http://business.financialpost.com/2012/08/10/mcdonalds-social-media-conscience/

Brand Positioning: http://www.quickmba.com/marketing/ries-trout/positioning/

“Our Food. Your Questions”: http://yourquestions.mcdonalds.ca/

Photo: http://www.bioethics.net/wp-content/uploads/2012/02/ronald_mcdonald_jumping1.jpg

An Enbridge pipeline oil spill hit Wisconsin on July 27th 2012, leaking approximately 190,000 litres of Canadian crude oil in to the area. This recent accident raises further concern amongst critics of the proposed Northern Gateway project, a 6-billion dollar pipeline designed to transport Alberta crude to Kitimat, BC.

The Northern Gateway project can introduce a range of economical benefits for Canadians, including new markets for Canadian crude oil in Asia as well as countless job opportunities throughout the oil industry. However, Enbridge’s reputation of incompetent oil spill prevention, detection and control causes us to re-examine their business ethic. More specifically, is Enbridge being socially and environmentally responsible? This proposed pipeline will cross through hundreds of rivers and streams; increased tanker traffic will damage marine life and other coastal species. It will also extend through risky mountainous terrain and already-scarce temperate rainforests in BC.

Recall the Michigan oil spill disaster due to a ruptured pipeline owned by Enbridge in 2010: 1 million gallons of heavy crude pervaded the Kalamazoo River, devastating entire ecosystems of wildlife and destroying even human recreation. It is accidents like these that remind us how risky oil industry expansion can be, and the horrific, perhaps irreversible, consequences it can have on the environment.

Sources: http://www.vancouversun.com/business/Enbridge+spill+Wisconsin+raises+concerns+about+proposed+pipeline/7009417/story.html

http://www.huffingtonpost.com/henry-henderson/kalamazoo-river-spill-two_b_1700343.html

Photo: http://naturescrusaders.wordpress.com/2010/04/30/louisiana%E2%80%99s-oil-spill-came-at-the-worst-time/