Category Archives: Brand Reputation

How Businesses Make Money

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Last class, we looked at three companies: Sightline Tours, Big Bus, and Grey Line and tried to recognize the most profitable one. The winner? Big Bus. Though its tour bus is a school bus, and not a leather seated coach charter bus, the company has less to maintain, and less expenses to pay. Yet, we often overlook these “small” companies, and selling them short because of their appearance compared to the big dogs, but what we forget is to “never judge a book by its cover”.

I have a few friends going down to Vegas for the weekend, and I thought about the 3 or 4 star hotels and the profits they make compared to the 5 starred Bellagio and Wynn. Now don’t get me wrong, I’m sure the two make lots of money from the higher room prices and high class facilities, but think of all the extra costs they face. Not only do they have to purchase the flat screen TVs, but the cost of maintaining all of them? Having to maintain a 5 star hotel is definitely harder, and much more costly to do, than a 3 star; and that’s how the 3 stars pull in more profits.

But then again, most of the 3 stars are owned by the bigger hotels … so maybe that’s the bigger picture.

Businesses don’t lose when consumers get new items to choose

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The success of Zara lies behind its awareness of the large profit margin that is created when many consumer choices are offered. More importantly, Zara uses an approach that many competitors do not.

http://planetgreen.discovery.com/fashion-beauty/images/2008-05/pile-donated-clothing-large.jpg

Each night, store managers of Zara take the time to

“scan through and collect the mountains of unsold items customers tried on without buying,”

in hopes of finding patterns to the items that have not sparked interests in their customers.

On the other hand, many stores make the mistake of rushing to replenish their floor with the items that have not left the fitting room, without realizing that they are constantly pushing out inventory that consumers have shown no interest of buying. Zara stays ahead of the game by finding the unwanted items, and pushing out new items to customers, and offering them new choices of things they might like. I work in retail myself, and I get sick of having to prep the same items over and over because they never make it out of the store. I can only imagine the disappointment that consumers face when they return to a store only to find the same items on the shelves that they have already rejected.

Money over ethics? Cheap cadmium over the cost of priceless lives?

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I stumbled upon an article, which was quite flabbergasting. The article reveals that many children jewelery have been dosed with high levels of cadmium-a white metal known to cause cancer. The world’s biggest public corporation, Walmart, has begun to pull any suspicious jewelry. A spokesperson has called this whole ordeal “troubling”. To many this news is shocking, who in their right mind would harm the lives of young children? How is this ethical or socially responsible?

Money, as you may have predicted, is of course the answer. Money tends to surpass the importance of ethics or social responsibility. The Chinese producers have turned away from the use of lead, and down the equally dangerous path of cadmium. The advancement of batteries have led to the decrease in cadmium, but the Chinese manufacturers have in turn, over dosed their products with cadmium. Subsequently, children around the world are being exposed to the 7th most hazardous substance to the environment. That is, seventh on a list of 257 high priority substances. I would not want cadmium to be lucky number seven.

Many countries look to China for cheap production, and cheap products. However, it is evident that along with reduced costs, their ethics and social responsibly have washed away as well. With that being said, what is being done to stop this unethical behaviour? Are we all guilty of having played a part in fueling this fire? Is it too late to put out the flame?