Monthly Archives: November 2014

This article looks at several companies in America which pay their employees the least; these companies include McDonald’s, Starbucks, Walmart, and Target. It was found that the companies that pay the least are in either the retail, chain restaurant or grocery industry and the justification for paying low wages to employees is because it is an “accepted practice.” With this type of business model, employees are viewed as dispensable.

“These industries have embraced a low-wage business model. Their way of doing business is trying to squeeze as much out of their employees as they can, while paying them as little in wages and benefits as possible.” 

Despite the ill-treatment of employees, these companies have rising stock prices because rather than looking after their employees properly, these companies are solely looking to increase their investors’ fortunes. These CEO’s of these large companies are undoubtedly viewed as extremely successful business people however, at what expense does their fortune come at? Is it possible to have a company as large and successful as Walmart or McDonald’s without exploiting low wage employees to some extent? While it may seem difficult, it is possible and Zappos is an excellent example of a company that values the happiness and well-being of their employees.

In class 19, we learned about Zappos and how well it treats its employees regardless of their position in the company. The CEO of Zappos, Tony Hsieh, doesn’t have a corner office and has a salary that is similar to the company’s customer service employees (at around $36,000 a year). This eliminates the hierarchy most companies have and creates a company culture that draws people to want to work there. I think that many companies would find it difficult to follow a similar business model to Zappos’ because it is not focused on increasing profits and shareholder’s earnings. Especially for franchised businesses, as the Huffington Post article mentioned, because the company doesn’t directly manage any of its stores. This means that the corporate side of the company has very weak ties (or none at all) to its store employees and do not care about their well-being. Therefore, the CEO will do anything to increase the value of their stock. For the CEO and other high ranking executives, the incentive to pay employees more and provide more benefits is less appealing than the incentives to increase profit (by cutting costs on employees).

Sources:

http://www.huffingtonpost.com/2014/1/08/lowest-paying-companies_n_6126992.html?ir=Business

http://management.about.com/cs/generalmanagement/a/companyculture.htm

Images: http://imgkid.com/zappos-service.shtml

http://www.huffingtonpost.com/2014/11/08/lowest-paying-companies_n_6126992.html?ir=Business

” If  the United Nations was fully funded why would we need the Arc or social enterprise”?

The United Nations and social enterprises have a common goal of making the world a better place by improving human and environmental well-being all around the globe. To achieve this, these organizations work to solve issues such as hunger, human rights violations, pollution, disease and illiteracy.

Despite having common goals, the United Nations and social enterprises such as the Arc Initiative approach these issues in different ways. The United Nations, being a government organization, acts on a larger scale to solve global issues. It works to solve problems such as malnutrition in impoverish communities with programs like the World Food Programme which has food distribution structures in 70 countries.

Social enterprises, on the other hand, work on a much smaller scale and therefore work to solve more specific and focused issues. This entails that each social enterprise can solve their respective problems in unique, innovative and creative ways. The Arc Initiative, for example, works to improve economic well-being in communities in South Africa, Ethiopia, Colombia and Rwanda by developing leadership and business management skills. What truly differentiates The Arc Initiative from the United Nations programs is its emphasis on establishing and maintaining a two-way exchange of knowledge and skills. As a smaller organization, people involved in The Arc are able to build long-lasting relationships where both sides can learn from one another. Together, they work to build sustainable solutions to improve the living standards of people in the community. Regardless of the size of the organizations or the approach they take, both organizations are essential in helping to solve issues that plague the globe.

Sources:

http://www.un.org/en/

http://www.sauder.ubc.ca/Global_Reach/ARC_Initiative

Images: http://upload.wikimedia.org/wikipedia/commons/9/9d/World_Food_Programme_in_Liberia_002.jpg

https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-xpf1/t31.0-8/c0.143.851.315/p851x315/474633_422425427784491_133401115_o.jpg

Response to Kamilla Bekbulatova’s blog post Celebrity Endorsements: Is it Worth It?

In Kamilla’s post, she analyzes the affects of celebrity endorsement on sales of a product. If a popular celebrity endorses a product, then the affects are beneficial as many people are compelled to purchase the product to be “similar to their idol.” However, it can also have a negative outcome as celebrity who is unpopular can cause a product to do worse.

Most of the time, companies are able to select an appropriate celebrity who will represent their company best. However, even after choosing the right celebrity, there is always risk involved in the partnership. For example, a product’s success is often tied to the success of the celebrity’s career. Any scandals in the celebrity’s life could reflect badly upon the company and the product. In this Business Insider article, several celebrity endorsements that failed are shown. All of them failed because the celebrity had some kind of scandal ranging from drug use to declaring to be makeup free (despite being the face of a cosmetics company).

In my opinion, if a product is really strong, it shouldn’t need celebrity backing to sell to customers. However, that being said, for large companies such as Pepsi that can afford to pay millions to have Beyonce star in their ad campaigns, it adds a little more “fun” and “trendiness” to their products. Overall, I believe that large, established brands can benefit most from celebrity endorsement because they can afford the big names and their brand is already known so the celebrity will just increase hype for the brand rather than overpower it.

Sources:

Celebrity Endorsements: Is It Worth It?

http://www.businessinsider.com/the-13-worst-celebrity-endorsement-fails-2012-1?op=1

Image: http://blogs-images.forbes.com/jonathansalembaskin/files/2012/12/beyonce-pepsi-ad.jpeg

On Tuesday’s class (Nov. 4th), I had the wonderful opportunity to listen to three accomplished Sauder alumni talk about their journeys as entrepreneurs. One of these guest speakers was Tom Dobrzanski. I was very excited to hear him speak because I absolutely love The Zola‘s music. After listening to him speak about his business ventures I was very inspired; not only is he very musically talented, but he embodies the entrepreneurial spirit just like the two other speakers, Paul Davidescu and Jenny Duffy, do.

In reflecting upon Tom Dobrzanski’s presentation, here are two takeaways I got about what it means to be an entrepreneur:

Think differently and turn threats into opportunity:

With regards to pirating music, Tom had a different perspective than I would have expected from most music producers. Instead of viewing it as a threat to album sales, he saw it as a way to increase the band’s fan base. Especially in the beginning stages of The Zolas, pirating music helped the band spread its name; it was not confined to its demographic in Vancouver but the band’s music spread worldwide. While illegally downloadable music may have reduced revenue from album sales, concerts and shows were being sold out in different countries around the world. In turn, this would increase revenue from ticket sales as well as sale of merchandise.

Passion is the driving factor:

It is evident that Tom is extremely passionate about what he does and his passion is reflected in how successful he has been. While completing his bachelors of commerce at Sauder, Tom was simultaneously beginning his career as a musician and producer. He started off with a small recording studio in his parent’s basement and grew from there. This self-motivation and devotion to his vision of producing music eventually led to the creation and current success of Monarch Studios. In an abstract way, I feel that the physical construction of Monarch Studios, with Tom’s home connected to the studio, is a representation of the life of an entrepreneur. There is no distinction between work and home because if you love your work, then it isn’t work anymore. It is your passion that you are privileged enough to do everyday.

(The Zolas performing Friday, Nov. 7, at Zulu Records)

Response to June Ong’s post “No Such Thing as Bad Publicity”

In June’s blog, she looked into the controversy surrounding Urban Outfitters and the selling of a sweater that seemed to use the shooting that killed four students at Kent State University in 1970 as a fashion statement. The sweater (shown below) appears to have blood splattered across the college’s logo.

I agree with June when she says that Urban Outfitters is taking advantage of ‘bad publicity’ and using it as a marketing strategy. It is evident that the sale of this controversial sweater was not an accident; the company  has sold numerous products that have been outright offensive. Time and time again, the company receives out-lash from the public on social media but the negative comments don’t stop the company, instead it seems to encourage the company to continue releasing controversial products. Unlike most companies, Urban Outfitters seems to be utilizing the bad publicity it is getting to brand its company.

I don’t agree with how the company is branding itself and I would assume that the majority of the public would feel the same as me. However, there must be some demographic out there that Urban Outfitters is targeting with these products because it would not be selling them unless they were increasing profits or benefiting some way. The company has received a lot of publicity for their demeaning clothing and as a result have increased their brand awareness. The reason why I believe that Urban Outfitters succeeding despite the all the controversy and backlash it receives is because it is in the fashion industry. In this industry, anything goes. For example, the popular trend of “skull” fashion has been around for several years now. Skulls are generally associated with death so it is very strange how popular this icon has become. This reflects the nature of fashion. It is constantly and rapidly changing and there is no ‘norm’ when it come to trends. Urban Outfitters is pushing the limits and may be strategically creating controversy to promote the brand’s association with cutting edge fashion.

Sources:

http://www.theglobeandmail.com/life/fashion-and-beauty/urban-outfitters-bloodstained-vintage-kent-state-shirt-sparks-outrage/article20599281/

Image (Kent State University sweater): http://static.theglobeandmail.ca/fdb/life/fashion-and-beauty/article20599280.ece/ALTERNATES/w620/web-wo-kentstate15nw1.jpg

Image (Eat Less T-shirt): http://i.huffpost.com/gadgets/slideshows/221816/slide_221816_891893_free.jpg

Image (Depression shirt): http://fashion.telegraph.co.uk/article/TMG10558468/Urban-Outfitters-in-hot-water-over-Depression-T-shirt

Broke Millennial’s blog post looks into the MoviePass which is a new innovation in the US movie theater market that aims to regain theater’s dwindling customer base. Essentially, MoviePass is a $35 monthly subscription that allows people to watch unlimited movies each month (unlimited meaning only one per day). The MoviePass will attract avid movie-goers but to the majority of people, this new idea may not be as successfully received.

Personally, I don’t believe it will be very effective in increasing the number of movie theater customers. My reason being that while expensive prices is a leading factor in the declining number of people going to theaters, I think that in general, the number one reason people are no longer going to the theaters is because of the convenience of the internet; sites such as Netflix and free (illegally downloadable) movies are so easily accessible. I would much rather watch a movie in the comfort of my home than have to go out, commute to the theater, wait in line, pay for overpriced popcorn, and sit in the same, uncomfortable chair for two hours. Furthermore, with a HDMI cord (to connect my laptop to the TV), a big screen TV and surround sound in my own home, I basically have a mini theater in my basement. Similar to me, I believe many people, especially those in my generation, are accustomed to watching movies on their laptop and view going to the movie theater as an infrequent luxury. Even with a good deal on prices I don’t think many people, other than movie fanatics, will be inclined to subscribe to MoviePass. Overall, despite this being an innovative idea, the declining movie theater industry will need more than this to bring it back to its past popularity.

Sources:

Home

Picture from: http://celluloidjunkie.com/2014/03/05/moviepass-adjusts-pricing-beta-subscribers/