Name a fast-food chain.

What’s the first thing that pops into your mind? McDonald’s? Burger King? According to Ries and Trout’s theory, customers rank brands in their mind, and a product’s positioning is hard to change once it’s formed¹. If such gigantic, highly-recognizable chains like McDonald’s already existed in the industry, what strategies would other 500,000² fast food places worldwide use to get into customers’ mind and gain the market share?

My Comm 101 classmate, Curtis Hoy, has perfectly answered this question with his blog post “Fast Food and Sex – An Unusual Combination”. Curtis talks about how Carl’s Jr, another fast-food franchise uses “sex-sells” advertising strategy and increases consumer awareness of the brand.

Frankly speaking, Carl’s Jr gives me the impression of “beauty and the beast” (however the setting changes to the world of burgers). Thick, juicy patties, rich sauces, shocking calories, sexy women and hungry guys…such image might not appeal to everyone, but it surely attracts the “hungry young males” who seek real food. Carl’s Jr never follows the health and fitness trends, but it’s completely fine since calories control-freaks are never its target market. Rich tastes come from real ingredients make the business special, and that provides a point of difference (POD) to the company in the world of healthy-living.

Carl’s Jr’s approach reminds me of another company, Wendy’s, but its brand image is in stark contrast to the one of Carl’s Jr. The most special thing about Wendy’s is arguably its salad menu. “Asian Cashew Chicken Salad is at just under 400 calories and packed with vegetables. It is an excellent source of satisfying fiber (6 grams) and protein,”³ says a typical dieter. Wendy’s provides many healthy options and satisfies customers’ needs for both fast food and healthy living. Its innovative products – fast-food salads – draw customers who normally avoid burger joints to the business, by acting as a “gain creator” (healthy, tasty and convenient) and a “pain reliever” (hard to get fast food with low calories).

I totally agree with Curtis’s opinions that smart businesses should “focus their marketing efforts on the narrower target market” and “position themselves in unique niches”⁴. Being a generalist and attempting to cater to everyone is neither a great nor implementable idea.

No matter what marketing strategy a business adopt, it should deliver the final results, differentiating itself from competitors and generating more profits. In this regard, Carl Jr and Wendy’s did a great job.

Now, if I ask you to name a “sexist” fast-food chain giving giant portions or a “green” fast-food chain carrying multiple salads, do you still think of McDonald’s?

Works Cited

1. Positioning by Al Ries and Jack Trout
2. General Health – Fast Food
3. Fast Food and Sex – An Unusual Combination
4. 9 Diet Expert-approved Orders At Wendy’s
5. Image 1 — Carl’s Jr.
6. Image 2 — Wendy’s
7. Video – Define your target market 

Social enterprises, Toms and SoleRebels, use “shoe power” to make the world a better place. Two companies share similar visions and missions — selling stylish and comfortable shoes in order to help the poor. While Toms adopts simple “Buy-One, Give-One” strategy, SoleRebels put more emphasis on creating shared values during the process of shoe-making.

Result-oriented v.s. Process-focused

Company’s objectives determine its business model. Blake Mycoskie built Toms after he witnessed many kids were shoeless thus weren’t allowed to go to school in Argentina. BOGO model was simple and efficient to achieve the goals of providing kids free shoes, since one purchase means one donation. On the other hand, Bethlehem Tilahun Alemu started SoleRebels with the aim of offering job opportunities to local artisans who had nowhere to apply their skills. In this regard, the business cared more about how its workers got paid and whether the cultural heritage were well kept in the manufacturing process. Paying workers three times more than the average wage in Ethiopia and covering healthcare and education fees for the workers¹ were the best practice. As well, it created shared values along manufacturing by using recycled tires, which reduces ecological footprint to a large extent.

Differences regarding long-term effects

As Kelsey Timmerman (the New York Times Bestselling author of Where Am I Wearing?) discusses in his personal blog², the differences between Toms and SoleRebels’s strategies come down to the “give a fish or teach how to fish” discussion. Timmerman argues that you give a kid shoes, they wear out or grow out of them, but if you give the kid’s parents a job, the whole family will always have shoes.

I find the analogy quite interesting and precise. In my opinion, Toms has good intention, but it doesn’t help fight poverty in the long run. The poor lack not only shoes/money but also the “infrastructure to create wealth”. Toms is socially conscious and creating a positive impact, but the impact is rather temporary. As we discussed in Comm 101 class, social enterprises are businesses that trade to tackle social problems³. SoleRebels’s model provides solutions to poverty: it gives local workers a fair pay, teaches them manufacturing skills and sends their children to school, all of which have long-lasting effects.

If you do something, do it correctly. If social enterprises decide to help, then they should use the resources most efficiently and make real changes.

 

Works Cited

1. Socially Conscious Shoemakers
2. The problem with TOMS shoes & its critics
3. Comm 101 Class 20: Social Enterprise
4. Image 1 — Toms
5. Image 2 — SoleRebels
6. Video: why good intentions are not enough 

As we discussed in Comm 101 Class 19 (People, Culture and Teams¹), organizational culture is a set of core values that shape behaviours in the organization and help build long-term enduring brand. Acknowledging the important role it plays in business operations, I wonder, does great culture guarantee a great return?

In fellow student Seham Abdul Karim’s blog, she has shared valuable insights into Google’s organizational structure and explained how it contributes to the giant’s success. Similar to Zappos, Google gives its employees enough freedom to pitch in creative ideas (according to 70-20-10 rule), encourages workers to project their “crazy thoughts” directly to the top executives², and offers generous compensations (free meals, healthcare, etc.). I agree with Seham that Google has one of the greatest culture and offers dream jobs that many people envy; like an “engineer’s playground”, Google gives its employees opportunities to explore their passions without concerning too much about the financial outcomes.

However, as the failure of Google Glass³ illustrated, Google didn’t pay much attention to the market needs while being dominant in research. It seemed to me that the company cared too much about its workers’ happiness and ideas rather than the ones of the customers, which isolated the company from the demand-and-supply world. Apparently, equipped with an optical head-mounted display, touchpad and camera that can record 720p HD videos⁴, Google Glass didn’t fail because of the technology, rather because of its vague, undefined value proposition. Customers didn’t know what problem it solved or why they may need it.

In my opinion, building working culture and making workers happy is important, but it should be based on customers’ and happiness and satisfaction. Culture is an intangible asset only when it creates actual value for the company, which, in most cases, is determined by the financial outcomes. Tying engineering work closely to business performance and customers’ needs should be part of the culture, helping the business advance in today’s customer-oriented market.

 

Works Cited

1. Class 19: People, Culture and Teams
2. Google’s Business Leadership and Organizational Culture
3. Why Google Glass Failed
4. Google Glass Review
5. Image 1 — three keys to organizational success

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Canadian musical artist, Drake, has created a huge buzz worldwide with his highest-charting single “Hotline Bling” (e.g. Over 2,000 UBC students recreated Drake’s “Hotline Bling”¹). There is no doubt that the artist himself is capturing revenue from every angle as a result of his talent and hard work. But, is he the only one that benefits from the pop rush? No. Italian luxury brand, Moncler, has doubled its Maya jackets sale after the music video’s debut, as the singer is wearing an iconic Mocler jacket in the video².

The company may have never expected that crazy music fans would appear on the top of its customer list. Most customers, either appreciating the quality of the jackets or loving the fashion styles, are from middle to upper class who are willing to pay over $1,000 for a winter coat. This time, the customer segments are largely diversified – many customers buy “overpriced” jackets.because of their obsession with the pop star.

From my perspective, luxurious clothing brand’s collision with down-to-earth pop culture creates great potential for the business to expand its niche market and to enrich its brand culture. Many high-end fashion brands show no interest in branding in pop-culture market, as they believe it’s less sophisticated and somewhat “violates” the brand value. They enjoy playing “customer selecting” game and creating artificial barriers to keep the classic image of the brand³. Nonetheless, referring to Comm 101 Class 7 pre-reading: What is strategy?, companies must be flexible to respond rapidly to competitive and market changes. In this case, it’s necessary for Moncler to adjust marketing strategies in order to advance in the slowing luxury market.

Advocating through pop music videos might not be the company’s initial plan but such connections with pop stars add refreshing elements to the branding and provide a point of difference. As well, it helps the company gain a significant number of customers, who share few values with Mocler if there aren’t such connections between the brand and pop culture.

When the hotline bling, it can mean one more thing – endless profit opportunities!

 

Works Cited

1. Drake’s “Hotline Bling” recreated by over 2,000 UBC students
2. Drake’s ‘Hotline Bling’ coat a winter fashion sensation
3. Six must dos for successful luxury goods marketing
4. Class 7: Buisness Canvas and Strategy
5. Image 1 — Drake
6. Image 2 — Moncler store

 

 

Nestle Water Canada, notorious for taking hundreds of millions of liters of groundwater at basically penniless ($2.25 for every million liters)¹ and leaving local residents dry and high, has recently bought a well near Elora, Ontario and plans to pump up to 1.6 million liters of water per day².

Having been discussed in Comm 101 Class 15 (CSR & Sustainability), sustainability, as an important component of creating shared value, is highly valued in today’s society and has become a major differentiator in business operations. How does Nestle Water, a company that commoditizes public commons at a gigantic scale causing water shortage, jeopardizes the natural resources for future residential and agricultural use, and lays heavy burden on environmental protection (excessive plastic bottles production and carbon emission along shipping), relate itself to sustainable development?

Browsing through Nestle Canada’s website, I find that the giant deals with public questioning in a very smart way. Rather than addressing the concerns directly, the company points out that soft drinks are more water-consuming and less healthy in comparison to bottled water. As well, the research data shows that 63% people will still buy beverage in a package if they have no access to bottled water; the sugared and caloric alternatives often cause greater environmental impact and health issues. Moreover, while 1L bottled water requires 1.3L water to produce, it takes 3L for soft drinks³. The company “successfully” proves that the large scale of water consumption and plastic use are unavoidable in beverage industry (i.e. if it’s not used to produce bottled water, it will be used for soft drinks), and the existence of bottled water positively contributes to sustainable development and health promotion compared to soft drinks.

The argument seems reasonable; I’m almost convinced that bottled water is the best option among beverages. However, as I go further, I realize that saying bottled water is good (since it’s better than soft drinks) is like saying theft is good (since it’s better robbery) – one has no sugar, one involves no violence. If we want to make achievements in sustainable development, comparing something to the worse alternative only decelerates the progress. If drinking from the tap (the most healthy and cost-saving choice)⁴ is no longer commonplace in today’s society, what really creates positive value is to educate the public instead of giving them more alternatives.

Have you got tricked by the “green labels” on the plastic water bottles and thought they are really good for us?

Works Cited

1. Nestle Pays $2.25 to Bottle and Sell a Million Litres of BC Water
2. Nestlé Waters Canada plan to tap aquifer worries Elora, Ont., residents
3. Nestle Waters Canada
4. Bottled Water: why is it bad for you, the environment and water 
5. Image — Nestle Water
6. Video — Nestle says water isn’t a right

American Apparel, special for its “made in US” tag, has filed for bankruptcy recently. Again, whether manufacturing in the US has truly benefited the company is brought up for discussion. Different from its competitors in teen clothing industry, American Apparel isn’t a trend follower under manufacturing globalization. My question is, will outsourcing be an effective strategy for the business to restart?

Admittedly, manufacturing in the US makes the brand stand out from the crowd and helps it form the core value of being socially conscious¹. Promoting fair employment, the company is paying $30,000 for each worker annually instead of $600 (a Bangladeshi garment worker’s average earning). As well, “made in USA” marks the “guaranteed” quality of the product, which helps the company easily earn customers trust and loyalty.

However, most decisions made by young customers are based on the cost and style of the product. From my perspctive, basic styles at high costs only result in the loss of customers regardless of the social consciousness (rather hypocritical value) it’s promoting. Outsourcing, which leads to a big drop in manufacturing cost², seems the optimal choice as to lower the selling price. It’s necessary for the company to find cost-saving materials and labours under such urgency.

Having a long-term debt of $234.9 million, the company can hardly keep the business going, and the liquidity necessary to sustain operations may evaporate in the next few months³. I believe it’s quite challenging for the company to boost sales in a short term due to factors such as the unpopular sexist brand image (overtly sexual ad) and intense rivalry (competitors including H&M, Zara, etc.) the company is facing. Cooperating with oversea manufacturing sectors should be regarded as one of the most significant opportunities for the company, which can largely reduce the variable costs and thus increase the profits.

 

Works Cited

1. American Apparel: about us
2. The Advantages and Disadvantages of Outsourcing
3. 5 reasons American Apparel is now bankrupt
4. Image — American Apparel
5. Video — American Apparel files for bankruptcy 

Flight tickets from Toronto to Iceland for only $99? Yes, that’s the price Wow Air offers for a one-way trip. Wow Air, an Icelandic low-cost airline that operates services to a total of 23 destinations, is entering Canadian market by next May. As discussed in Comm 101 lecture, businesses such as Wow employ one of the generic strategies — cost leadership strategy — focusing on providing inexpensive services and products for a given level of quality¹. It’s challenging for the firms to make profits while pricing significantly lower than others; in this case, Wow flies the narrow-body A320 and A321¹ in order to minimize the operating cost.

Cost leaders attract a large market share as potential customers find paying lower prices for services of acceptable quality to be appealing². This gives Wow a bigger chance to expand and survive in Canada. In the presence of existing competitors such as Air Canada and WestJet, why would customers choose a new start-up over the big companies they are already familiar with? Low price is the answer.

However, I believe that cost leaders sometimes disadvantage themselves from winning long-term customers due to the inferior services they offer. According to Skytrx Airline Review³, Wow has constantly delayed its flights, charged a lot for the extra services, lost luggage, etc. It’s true that Wow is targeting customers with low incomes and ones who do not seek supreme flight experiences. However, the company still needs to reflect: is it an optimal strategy to sell poor-quality services with rock-bottom prices? Will this truly benefit the company in a long run?

In a nutshell, Wow Air exemplifies the cost leadership strategy, showing many advantages and disadvantages of implementing such a model in the real business world.

 

Works Cited

1. Porter’s Generic Strategies
2. Iceland’s Wow Air expanding into Canada, sparking potential fare war among transatlantic flights

3. Mastering Strategic Management: Cost leadership
4. WOW Air Customer Reviews
5. Image

Turning a religious component to a new fashion item? H&M’s refreshing marketing strategy of adding hijab into its new advertising campaign has attracted a lot of attention. This is a perfect example of adapting a customer-driven marketing strategy¹ where firms develop products targeting certain groups and offer unique attributes meeting customers’ special needs, thus gain comparative advantages.

Evidently, huge benefit can be obtained after the strategy update. Muslim community, a tremendous potential consumer group, has always been forgotten by the fashion industry. There are more than 1.6 million Muslim consumers around the world and the group is constantly expanding which is expected to hit 3 billion by 2050, estimated by the Pew Research Centre². Advertising cultural clothing will broaden H&M’s customer base enormously and stimulate the company’s expansion. Due to the uniqueness of the product, H&M easily outscores the big rivals by its innovative design concepts and “milestone-ish” combination of modern fashion and religious wear.

From my perspective, religious items are often stereotyped and misinterpreted by the mainstream media, and the public has failed to appreciate the aesthetic value of religious outfits. H&M’s action catalyzes the breakdown of the inaccurate stereotypes and leads the new fashion trend by adding special fashion elements. It’s hard to determine whether the sales will surge in a short term, but the positive reputation and unique brand culture H&M builds as being open to diversity are of much higher value.

H&M’s example gives us a deeper insight of the effectiveness of creative business ideas and showcases a great strategy that helps develop customer base. Reaching out to the Muslim community, H&M has found the undiscovered gold mine.

 

 

Works Cited

1. Customer-Driven Marketing Strategy
2. H&M Muslim Ad Campaign With Hijab Model Signals Future Diversity In Fashion Advertisements
3. Image

 

With operating physical stores being crazily expensive these days, more and more businesses become participants in the lucrative trade of e-commerce. Surprisingly, companies such as Frank & Oak, a previously online-only clothing company,went in the opposite direction and opened six physical stores in Canada recently¹. Here comes the question: what factors determine the structure of operations a company should use? Which model benefits businesses more – online or offline?

As a business moves from one stage to another, the priority of accomplishing certain tasks changes. Frank & Oak, for example, launched it in 2012 to sell clothes to young males. Being new to the market, the company needs to attract customers immediately and to grow its customer base. Since Frank & Oaks mainly targets middle-
income young males, online sales will be the optimal choices. 40% of American men aged 18 to 34 said they would “ideally buy everything online,” compared to only 33% of women². It is evident that online stores are at much lower risk of losing customers to bricks-and-mortar stores. Moreover, reducing overheads and marketing costs are crucial to the survival and growth of a start-up, which can be easily achieved through online operation.

Now as the company has successfully amassed 1.6 million online members in North America, the top tasks are shifted from maximizing profits to forming brand culture and building customer loyalty. The add-on of physical stores can make this happen. As the CEO Song says, “A physical space is real life. It’s not the world seen through a screen…the real community creates a deeper engagement that’s not just rational, but emotional³.”

In my opinion, the structure of operations should be determined by the stage a company is going through and the short-term goals it has. Combining physical and digital stores and gaining benefits from both models are the future trend.

 

 

Works Cited

1. Online retailers open physical stores to boost business
2. A Lot Of Men Would Rather Do All Their Shopping Online
3. How Frank & Oak brings a personal touch to digital retail
4. Image 1
5. Image 2

The topic of workplace ethics has become increasingly important in the business world. Not only do low-income workers in developing countries suffer from poor working conditions, highly-compensated employees also experience difficult times. For example, working in immensely competitive environments causes stress-related health problems. It is necessary for the companies to create safe, less-stressful working environments; neglecting workers’ safety and health is indeed unethical.

                         There have been numerical examples of Chinese laborers who work for big firms being “maltreated”. One of the famous instances is that, in 2014, Chinese workers who worked for Bell and Apple were “exposed to toxic chemicals” and “given only twenty-minute initial training”¹. Under the surface, the big companies exploited developing countries’needs for having their fast-growing population employed and treated the workers “the way they wanted to”. As they said, “our suppliers must live up to the toughest standards if they want to keep doing business with Apple.” It is evident that their immoral demands severely infringe on workers’ rights.

 

It is indicated in “Evaluating Amazon’s Workplace Ethics”² that Amazon has failed to embrace workplace ethics as well. The staff’s psychological and physical health isn’t taken into consideration throughout the company’s development. Intense competitions among employees, which boost profits for the fast-growing industry, force workers to work hard without considering their health. Amazon is responsible for controlling its over-competitive working environment as well as reducing conflicting demands on employees. In fact, workers become less creative and less efficient under excessive pressure, which can lead to bigger loss of the company.

As I see it, workplace ethics play a tremendously important role in business growth. The protection of workers’ fundamental rights goes along with profit-making in today’s industry.

 

Works Cited

1. Apple and Dell supplier in China ‘neglects staff safety’
2. Evaluating Amazon’s Workplace Ethics
3. Image 1
4. Image 2