Abercrombie & Fitch seems to be in trouble. The brand’s in-store sales decreased this year, and its market value collapsed. Its value proposition doesn’t seem to be as efficient as it used to be, fashion being a constantly changing market. Even the impressive advertising campaigns with half-naked male models are not enough to ensure the high popularity of the store in North America.

However, the analysis seem to be different if you consider another market, for example th European one. Abercrombie has a very strong brand image, why seems to be working better overseas than in North America. Having discussed this with other Europeans, we found that Abercrombie represented the American youth lifestyle, and was still creating excitement around its products. The brand’s presence is more recent in Europe than in the U.S.A (the first French store opened this year only in Paris) and there is less direct competition.

Therefore the world market supports the company’s profit with an increase of direct-to-customers sales worlwide this year. We can see that the same brand, advertising its products the same way, can face different outcomes and success in geographically distinct markets. Abercrombie’s high prices don’t seem to turn down European and Asian customers because the image of the brand is stronger.

Sources: BBC News article & Bloomberg article

IT and social media have changed the way we work and the way companies advertise and do business in general. It is particularly helpful to know how to make an efficient use of those tools when you want to launch a start-up. There are lots of blogs that give tips to new entrepreneurs so as to help them in the process of creating a new product or business. That is why Jun Loayza created his blog. He uses a really intimate format, talking about his life and family in the ‘About’ section.

He talks about his own experience as an entrepreneur and a consultant in social media technology for many companies. He gives tips about how to analyze the market and figure out if you have to enter it or not, about the ways to use social media and old techniques to sell a product. He also gives advice to have successful interviews. He is making jokes, using straight forward concepts and providing personal examples to make his point clear, which I really liked reading. The blog is really easy to read and provides some simple but useful advice to those who might need it.

Social media are a good alternative to handbooks and other forms of commuication for people who need advice on business issues.

Source: Jun Loayza’s blog (external blog)

Fair trade has developed really fastly in the last ten years. Farmers which have received fair trade certifications are said to produce better quality products and to be treated more even. They usually are small farmers from Latin America or African countries, who then earn more money than the other farmers, and are able to improve their standard of living.

As my classmate Rachel Servoz explained in her blog post “Is “Fair” Trade compatible with Globalization?”, Fair Trade doesn’t necessarily bring significant positive changes in farmers’ lives. What’s more, it excludes all the farmers who don’t have the certifications but who need it as much. Like charity, it doesn’t allow the empowerment of producers but keeps them in a relation of dependence with the “Western” big retailers. As Rachel says, the Arc initiative seems to be more helpful on the long-run since it teaches people how to run a profitable and fair business on their own.

As socially aware and environmental-friendly operations and products multiply in retail stores and other markets, it becomes increasingly hard to draw the line between what is really helpful and what is just a way to take more money from customers who want a clear conscience.

Sources: Rachel’s blogpost & this article

Natural disasters negatively impact on businesses, especially on supply chains, on the short as well as on the long run. The storm Sandy, which hit northeastern United States, is an example. It has caused delays in shipments of retail stores, since all the communications routes were stopped because for days during and after the storm.

Those delays are very important for most of the retailers since they will probably affect the coming holidays sales, the most profitable time of the year for many stores. The storm being located in a very populated and economically dynamic area, the greater the loss will be.

In October 2011, Thailand was flooded, causing hard drive shortage, decreasing sales and increases in price for customers, over several months.

Supply chain management is a complicated task, made even more difficult by random natural events such as those disasters. Since they can’t be anticipated, companies need to react fastly and efficiently to prevent sales from decreasing too much. They have to be able to catch up with the delays through improving logistics processes. They also have to communicate with their customers to avoid complaints and loss of deals.

Sources:

http://www.cnbc.com/id/49746822/Retail_s_New_Grinch_A_Sandy_Snarled_Supply_Chain

Social enterprises are becoming increasingly popular. The definition varies and can be really broad. Social entrepreneurs always seek social good, they make money in order to reinvest it and expand their business. Social entrepreneurs offer innovative solutions to social and societal issues that are not addressed by governments. They seem to be more economically efficient than charities.

More and more social entrepreneurs launch their companies, there is a real diversity of fields. Social enterprises can be micro-finance institutions, like  Muhammad Yunus’ Grameen Bank, as well as small craft businesses like Salem’s Ethiopia, or even skateparks.

In fact, ‘The Factory Skatepark’, a skatepark located in one of Dundee’s (Scotland) least favored areas, won the Social Enterprise of the Year award a few days ago. It is helping out the community by providing a place to have fun for young (and less young) people, with various clubs and extreme sports infrastructures. It is also employing people from the area. The fact that such an initiative won the award shows that social enterprise doesn’t necessarily have to help the poorest people in the poorest countries, but can benefit to any part of society who might need it.

Sources:

http://www.bbc.co.uk/news/uk-scotland-tayside-central-20339565

https://www.ashoka.org/social_entrepreneur

Janice Cheam, a Sauder graduate who came to tell us about her company (Energy Aware), during class n°19, used the help of “angel investors”. I had never heard this term before and I was curious about this concept.

Angel investors help start-ups that need cash to launch their business. Since it is very hard and costly to borrow from a bank, it can be a good option for new entrepreneurs. Angel investors can be family or friends of the founder of the company, but they can also be people who just believe the person or the idea has good chances to make a lot of money and expand the business.

Angel investors usually invest in small businesses from the sciences or technology sector. They also tend to invest in innovative companies, like Energy Aware, which created an environment-friendly device to monitor households’ electricity consumption. They ask for shares of the company in exchange for their investment. Angel investors take high risks, therefore they expect high returns. I think it is important that such investors help new business emerging, so that innovation is not stopped because of lack of financial resources.

Sources :

http://business.financialpost.com/2012/07/16/angel-investors-take-notice-of-canadian-startups/

http://www.investopedia.com/terms/a/angelinvestor.asp#axzz2CZ36oC00