The smartphone industry has caused a decrease in the number of consumers who are willing to purchase DSLR and ILC cameras. Canon, for example, says it now expects to sell 8 million DSLR and ILC cameras in 2014, down from its original forecast of 9 million. A blog posted by Alison Jang called Is the End in Sight for Big Camera Companies? outlines the main reasons for this decline within the framework of Porter’s Five Forces.

However, Canon can still remain profitable despite more and more customers choosing smartphones as a substitute product. One way that Canon may able to achieve this is for the company to reposition and restructure itself. Referring to Porter’s Generic strategies, DSLR and ILC cameras are high cost and are targeted towards a narrow customer segment who prefer higher quality pictures than the pictures that smartphones are able to take. Thus, Canon should implement a differentiation focus strategy rather than targeting their cameras towards the general public with a differentiation strategy. This would not only decrease advertising fees as now they are only targeting a particular customer segment, but could also potentially increase their customer base as more customers who desire for professional cameras would know about their products. Down scaling production is also an option if sales continue to decrease, as it would prevent Canon from experiencing diseconomies of scale.

Despite the drop in sales, it’s not the end for Canon, at least not yet. If the company were able to implement the right strategies, then it would be able to eventually counter the threat posed by smartphones and continue to remain profitable.

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When Blackberry failed to obtain an acquisition deal with Fairfax, it seems that the company was done for. Zoe Lin’s blog Blackberry Empire Crumbles delivers a possibility that may allow Blackberry to recuperate from it’s current demise – going private. However, it seems that the company cannot solve its current issues just from going private alone – something more needs to be done.

The market for mobile devices is currently saturated with Apple and Samsung having a majority of the market share. Thus, it would be difficult for Blackberry to release new devices due to the large barriers of entry. Instead, Blackberry should focus on its other revenue streams such as its app BBM (Blackberry messenger). Recently made available for Apple and Android users, there are over 80 million users of BBM around the world and it is believed that the app would generate $300 million dollars a year in revenue in the next term, similar to that of Twitter. If Blackberry were to make BBM its main focus, it could potentially generate more profit and reduce the risks and costs of launching devices that fail to gain an exceptional market standing such as the Q10 which was released earlier this year but ended up to be a disappointment among consumers. In order to allow BBM to grow, Blackberry must advertise this app on social media such as Twitter and Facebook in order for build customer awareness. Likewise, they could monetize the app further by potentially implementing advertisements within the application or additional features that customers have to pay a small fee for (such as charging a fee for certain emoticons) in order to achieve profit maximization.

BBM may as well be Blackberry’s last hope, and if the company were able to utilize it to its full potential, then it may be able to get back on its feet again.

Figure 1: BlackBerry’s Falling Share Price

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Gathering customer information is an integral part of any business strategy as it allows businesses to employ market segmentation and thus devise the most the appropriate marketing strategy for their current and future products. However, sometimes this could lead to unintentional stress among customers. Imagine your phone company tracking down not only your phone usage, location and payment patterns but also your internet usage as well. Seems sketchy, eh? This is the new strategy for Bell, who said it would collect customer information with the intention of selling it for ads.

An advantage of this is that Bell would be able to generate more profit as their ads would now be directly catered towards their customer’s needs. Likewise, they are able to create a new revenue stream as it would allow them to sell customer data to its key partners for ads.

However, Bell’s move may decrease customer loyalty as some consumers may feel uncomfortable with sharing their personal information with the company. Likewise, it may also result in stakeholder conflict from pressure groups. Organizations such as the Privacy Commissioner of Canada have already began looking into Bell’s recent strategy to see if it complies with the Personal Information Protection and Electronic Documents Act (PIPEDA). If organizations such as this find Bell’s behavior problematic, then the conflict that arises would result in litigation costs for Bell and ultimately tarnish their reputation.

In order for Bell to maintain strong customer relationships, it needs to find the best way to collect information from its customers in a way that would not make its customers feel insecure. How could they do this? Possibly by first asking the customers through questionnaires and anonymous surveys in order to understand what they really want first or by making their new consumer behavior tracking system optional for its customers.

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Snapchat is a relatively new mobile application where you could send videos to your friends that would last for a maximum of 10 seconds before they disappear forever. Since its launch in September 2011, it has grown from a relatively unknown product run by a few Stanford undergraduates to a company now potentially worth $4 billion.

One of the main reason for Snapchat’s fast growth is it’s unique value proposition, allowing users to share videos in a fun and easy fashion. Likewise, it has a first mover advantage, being one of the first apps that allows users to share videos in such a fashion that sets it apart from other major social media sites such as Tumblr, Facebook and Instagram. However, the behavior of Snapchat’s key customers, teenagers, pose a major threat to its growth. According to a recent study from Pew Research Center’s Internet and American Life Project , teenagers are very fickle to side with the company. One of the key examples to illustrate this is the demise of Mypsace, where in 2006 85% of teenagers have a myspace account, by 2013 only 7% have maintained one. In order to maintain their current customer base, Snapchat needs to keep up to date with the latest consumer trends and advertise their brand not only on Social Media Sites such as Facebook and Twitter but possibly through setting up competitions for current and potential customers on its website such as “Best Snap of the Month” where the winning customer would be rewarded with a prize.

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You have all heard the lyrics of Janis Joplin’s 1970s song, “Oh lord won’t you buy me a Mercedes Benz”. If Janis Joplin were to write this song in this era, she would most likely be asking for a BMW or Audi instead.

The Mercedes Benz, part of Daimler’s car division, is trailing behind both BMW and Audi in sales (Figure 1). One of the main reason’s for Mercedes slow growth is that in the 1990s the company attempted to transform itself into a transport conglomerate, adding planes, trains and even spaceships into its product mix, causing the business to deter itself from its core business activities of making classy cars.

Secondly, Daimler arrived late in the Chinese automobile market, one of the largest in the world. This deprived the company from having a first mover advantage. BMW and Audi who have arrived in the Chinese market early, outsells Mercedez by 70% and sells twice as many cars respectively.

Finally, Daimler’s technology lags behind its rivals. BMW has launched its string of new electric cars and Audi can draw from the vast resources of its parent, Volkswagen. Companies who fail to innovate will mostly loose key customers. Kodak and Blackberry’s demise is a prominent example of this. Although operating in different industries, they are key examples of companies that failed because of failure to innovate technologically and adapt to consumer behavior.

Thus, in order to move out from being “third best”, Daimler must step up its game.

Figure 1: Worldwide Car Sales 2005-2012

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China has seen a massive boom in its online video industry market. Like America has Netflix, China has its own fair share of video sharing powerhouses such as Tudou, Youku and PPTV where one can watch the latest professionally produced movies and television shows (see Figure 1 for trafficking statistics) at their leisure. The value proposition for many of these businesses is that unlike on Netflix where you have to pay for subscription, these sites deliver their content to their customers free of charge. This has led to a change in consumer behavior causing many Chinese people to branch out from watching shows on the traditional television model to more and more consumers choosing to watch TV online instead. The statistics reflect this growth, as currently China has 450m online-video viewers, and according to iResearch it is projected to grow to 700m by 2016.

Like Netflix, many of these Chinese video sites also generate their own content (Figure 2). Producing and releasing their own content has allowed many of these business to cut down their cost of licensing shows from production houses. However, a problem with this is that like Netflix which had only one hit release House of Cards up to date, many of these in-house production shows fail to market. This failure would not only result in a loss of production cost, but would inevitably tarnish the company’s brand name. Thus, the only way for these Chinese video sites to continue expanding is for them to choose the optimal growth strategy. It seems that a viable option for many of these businesses is to continue licensing most of their shows and creating their own content sparingly whilst doing appropriate market research on the latest consumer viewing trends beforehand.

Figure 1: Trafficking for Chinese online-video services as of September 2013

Figure 2: PPTV will be releasing a new in-house produced reality show called “The Office Goddess” later this month

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With the number of health conscious consumers rising, Mcdonald’s has been under pressure to incorporate healthier meal options in its menus. This change is planned to occur in 20% of the firm’s largest markets.

Utilizing Lewin’s Force Field Analysis, it seems that there are many driving and restraining forces towards this change. A major driving force is that McDonald’s is currently facing rising competition from its major competitors such as Subway and Burger King, who both have taken the initiative to incorporate healthier options in their menus. Sales for McDonald’s have fell flat for the past year, one reason for this may be because more people are starting to lean towards a healthier diet, according to The International Food Information Council’s 2013 Food & Health Survey. With the introduction of healthier meal options, McDonald’s could potentially build its customer base and avoid their more health conscious consumers switching to substitutes. McDonald’s could also avoid potential conflict from its external stakeholders such as the FDA who regulate the safety and healthfulness of the food that McDonald caters.

The biggest restraining force of this change is the cost, which is estimated at $35 million. However, it seems that McDonald’s will go forward with this change as the driving forces seem to outweigh the restraining forces. This is because this change could possibly allow McDonald’s to expand its customer base and also allow them to avoid possible stakeholder. This would enable McDonald’s to remain profitable in the long term and thus cover the costs associated with this change.

Image: A new ad for Mcdonald’s, with a side salad

Works Cited

“Consumer Confusion Reigns: Fat’s Role in Healthy Eating Habits | Annette Maggi.” Breaking News and Opinion on The Huffington Post. N.p., n.d. Web. 6 Oct. 2013. <http://www.huffingtonpost.com/annette-maggi/consumer-confusionreigns_b_3823201.html>.

Xiaomi, a Chinese smartphone company established in 2010, is already being compared to the American giant, Apple. Xiaomi holds a firm grip within the Chinese market, having a 5% market share for the second quarter of 2013, exceeding Apple’s 4.8% for the first time.

There are two main reasons for Xiaomi’s success (outlined in this video):

1. Affordable Price and Unique Revenue Streams: Xiaomi sells its phones for $330, far cheaper than the $860 iPhone. Selling at a lower cost allows Xiaomi to attract a larger customer base. Xiaomi remains profitable nonetheless because it is able to cut costs through its short channel of distribution, selling directly to customers online rather than through retail stores. Likewise, Xiaomi has a unique revenue stream. Instead of gaining revenue solely from the sale of the phone itself, it also gains profit from selling services, such as apps and wallpapers, to its customers. This may not sound lucrative but Tecent, one of China’s largest internet appstores, sold $5billion worth of these services last year.

2. Strong Customer-Oriention: When it comes to its customers, Apple is very autocratic and product oriented, limiting user customization and feedback. Xiaomi on the other hand is more customer-oriented, getting feedback from customers on Weibo on potential features for its future models. This plays an important role in Xiaomi’s success, as it closes the gap between the company and its customers and thus builds customer loyalty.

Image: Xiao Mi’s boss Lei Jun holding a press conference on Xiao Mi’s new release, the Mi3

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With the concern over noise and air pollution rising and with governments forcing manufactures to reduce carbon dioxide emissions, there has been a rise in demand for electric cars with people seeking for a more sustainable way of transportation. Groupe Bollore has recently taken the European electric car market by storm through collaborating with Renault to produce Bollore’s existing electric car Bluecar. Due to intense competition from Tesla, a ten-year old Californian company producing electric cars, Bollores management have been trying to devise strategies in order to push Bluecar’s brand name forward.

Bollore markets its cars based on its unique selling point, the use of lithium – metal – polymer batteries, which the company itself claims are more powerful than the lithium-ion ones used in most electric cars. Over the past decade the company itself has spent at least 1.7 billion dollars on battery development alone. Having a unique selling point like this could give Bollore a competitive advantage. However, electric cars are still part of the niche market, and although in 2013 sales have been going up in rich countries, electrics and hybrids only account for a tiny fraction of car sales. The only way for Bollore to expand its customer base is to raise awareness among consumers the benefits of owning an electric car.

Bollore’s Bluecar

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The primary objective for most organizations is to generate profit. That being said, most companies will do anything in order to achieve this profit. Although some corporate executives may enforce corporate social responsibilities out of pure altruism, many do it in order to enhance their brand image and/or to lower staff turnover rates. However, when the subject is not directly related to profit, many companies tend to ignore indulging in ethical behavior altogether due to the large sums of money associated with acting ethically.

However, I believe that corporations should be more farsighted in their approach as the costs for businesses of not acting ethically is even greater than that of implementing such ethical practices. Take Sauder Frosh for instance. Many bigtime newsites such as Huffignton Post have reported that UBC was “under fire” for the non-consensual rape chants that have occurred during Frosh, sparking an outrage for UBC’s internal and external stakeholders. The chants led by frosh leaders has caused the tarnishing of Sauder School’s brand image. If the Frosh leaders had acted ethically and replaced the bus cheers with healthier material, then they would not have been subjected to the costs of acting unethically such as the withdrawal of the CUS support for all future Frosh activities and the vandalism that had occurred at the Henry Angus building earlier this week (see image).

Image: Vandals hit UBC with graffiti as Sauder School of Business cuts support for frosh after ‘rape chant’