http://static.lululemon.com/community/blog/wp-content/uploads/2010/08/4869835809_476ded2e4d.jpg

Vancouverites are no strangers to Lululemon Atletica. All are familiar to the image of a woman’s bottom hugged by the company’s famous yoga sweatpants.

In my opinion, Lululemon is the definition of an entrepreneurial company. According to Schumpeter’s View of Entrepreneurship, an entrepreneurial company is able to, in an innovative manner, generate enough value to customers to exceed the customers’ costs. Lululemon has certainly been able to achieve this.

The company introduced their unique and trendy products in a way that had never been seen before. They based the company’s culture on community and learning, and with virtually zero advertising, managed to build an extremely devoted customer base. Their marketing technique has been successful: even consumers who aren’t the least bit interested in yoga come flocking into stores for a pricey pair of sweats. At a minimum of $98 a pop, the sweatpants aren’t cheap; however, the company has developed such a strong value proposition that consumers have quite a high willingness to pay.

In just over 10 years, Lululemon has grown from a single storefront to a public company with more than 100 outlets and $340 million in annual revenue. The amount of wealth creation, speed of wealth creation, the risks that the company has taken, and its level of innovation all prove that it is indeed an entrepreneurial company.

Works Cited:

Sacks, Danielle . “Lululemon’s Cult of Selling.” Fast Company. N.p., 1 Apr. 2009. Web. 16 Nov. 2011. <www.fastcompany.com/magazine/134/om-my.html>.

http://images.fastcompany.com/upload/netflix-blockbuster.jpg

“Instant Death of Instant Photography”. Nancy Huang’s blog post caught my attention instantly. Her post carried strong points and I agree that it is essential for brands to remain innovative.

A decade ago, Blockbuster was a behemoth in the movie rental industry. In 2010, it came word that Dish Network was buying Blockbuster’s assets out of bankruptcy.

The company’s failures can be largely attributed to its overconfidence and blindness to emerging trends. Blockbuster ignored the innovations occurring around them and locked themselves into the narrow view that they were a provider of movie rentals rather than a distributor of entertainment.

In class, we learned of the importance of market research: it is an indispensable aid in decision making. Clearly, Blockbuster should have been in class with us. The company failed to collect and analyze sufficient enough data and made extremely poor decisions. It wasn’t until six years after Netflix launched that Blockbuster realized that it needed to enter the online DVD rental-by-mail industry: the company’s slow reaction was the source of its downfall.

A company needs to continually compare their value propositions with those of competitors in order to respond to new trends and generate business strategies. Unfortunately, Blockbuster was a little too comfortable sitting its throne up high. Now, it’s underground, dead.

Works Cited:

Huang, Nancy. “Instant Death of Instant Photography | Nancy’s Blog .”UBC Blogs | Home. N.p., 7 Oct. 2011. Web. 16 Nov. 2011. <https://blogs.ubc.ca/nancyhuang/2011/10/07/instant-death-of-instant-photography/>.

Woloszynowicz, Michael. “Web 2.0 Development and Business Lessons: Business Lessons from Blockbuster’s Failure.” Web 2.0 Development and Business Lessons. N.p., n.d. Web. 16 Nov. 2011. <http://www.w2lessons.com/2010/09/business-lessons-from-blockbusters.html>.

MG, Siegler. “Snoozing And Losing: A Blockbuster Failure | TechCrunch.”TechCrunch. N.p., 6 Apr. 2011. Web. 16 Nov. 2011. <http://techcrunch.com/2011/04/06/make-it-a-blockbuster-night/>.

Walmart has joined forces with Facebook. Two giants now walk hand in hand.

As a result of the partnership, Walmart now offers Facebook pages specifically tailored for each of its locations. The company’s aim is to allow customers to interact with its local stores: consumers will get personalized information on new products, events, and discount offers.

The joining of the two giants underscores the importance of BTM in today’s business. Companies are beginning to understand the power of the internet, and realize the need to address the ‘next-generation’ customers who are avid social media users. Among others, Walmart is trying to harness the power of Facebook to increase customer counts and revenue.

Facebook gives Walmart an indispensable opportunity to use IT in measurement, experimentation, sharing, and replication. In April 2010, Facebook permitted brands to use its “like” button on their websites, suddenly allowing companies to easily use IT to get worldwide data on their products. The fact that Facebook is so globally connected gave companies insights and an efficient way to share their conclusions. Carolyn Everson, vice-president of global marketing solutions for Facebook, said that “brands are starting to see measurable sales impact on products that are ‘liked’ on Facebook”.

Works Cited:

D’Innocenzio, Anne. “Walmart Aims to Recreate Feel of Local Store for its 9 Million Facebook Fan..” Canadian Business. N.p., 11 Oct. 2011. Web. 11 Oct. 2011. <www.canadianbusiness.com/article/49905–wal-mart-aims-to-recreate-feel-of-local-store-for-its-9-million-facebook-fans>.

http://mypbrand.com/wp-content/uploads/2011/09/presidents-choice-black.jpg

Last month, supermarket chain Loblaws officially launched Black Label, its new “affordable luxury” line of President’s Choice products. With No Name and President’s Choice successfully implemented, Loblaws is attempting to fill a gap in their offerings: they aim to win over customers who may buy the majority of their groceries at Loblaws but then head over to a gourmet food store for their indulgences. However, with consumers increasingly conscious of every dollar spent, can President’s Choice get people to pay for luxury?

Referring to Porter’s 5 Forces, it seems as though Loblaws is treading in risky waters. Firstly, in Canada’s intensely competitive market for groceries, the threat of substitutes is high; Loblaws will need to contend chains such as Walmart and Sobey’s in convincing consumers to buy into their brand. Accordingly, buyer power will also be high as consumers have much variety to choose from. Because Loblaws is focussing on offering unique, high quality foods, supplier power will also be high: for example, their cherry shiraz wine is supplied solely by a small Israeli winery. Overall, the rivalry will be tough.

But Loblaws has hope. President’s Choice is an already well-established brand in Canada. Even frugal shoppers treat themselves on small luxuries, and the company is hoping that Black Label will be unique enough to lure consumers.

Works Cited:

Beer, Jeff. “An Even Better Choice?.” Canadian Business. N.p., 5 Oct. 2011. Web. 10 Oct. 2011. <www.canadianbusiness.com/article/48828–an-even-better-choice–page1>.

http://media.cbn.topscms.com/images/14/dd/eee9cd1543218c79f77e1e49dbd3.jpg

Sometimes opportunities for a successful business exist in the most unexpected places. This was indeed true for lingerie company La Vie en Rose, which initiated a prosperous expansion in Saudi Arabia, a country where sexuality in women is usually severely restricted. The company was able to look beyond the cultural stereotype of the area and recognize that women in the Middle East were beginning to embrace their feminine side. They took advantage and opened 28 stores across three Middle Eastern countries.

Businesses need to be innovative like La Vie en Rose in order to succeed; the world is a constantly changing place and a company needs to be able to look beyond stereotypes to find a new niche in the market. As we learned in class, an effective way to position a brand is to grab an unoccupied position in a major segment.

As expected, the company has faced challenges associated with cultural differences, but by being flexible and altering parts of its branding, the company has been successful in Saudi Arabia: their overseas earnings now make up 20% of its total profits. Because of its success in the Middle East, the company plans to expand to 10 new countries by 2013.

Works Cited:

Chapin, Angeline. “Undercover Economy.” Canadian Business. N.p., 8 Sept. 2011. Web. 3 Oct. 2011. <www.canadianbusiness.com/article/43493–undercover-economy–page1>.

Chapin, Angelina. “Female Lingerie Clerks: Progress in the Middle East.” Canadian Business. N.p., 20 Sept. 2011. Web. 3 Oct. 2011. <www.canadianbusiness.com/blog/business_briefings/46425–female-lingerie-clerks-progress-in-the-middle-east>.

http://cdn.digitaltrends.com/wp-content/uploads/2011/03/groupon-customers.jpg

In order for a business to thrive, the marketer has to offer something of value to the consumer and the consumer must appreciate it enough to pay for it. Much of this appreciation comes from the strength of the brand name; in class, we learned of the importance of a value proposition in the development of a strong brand name. Companies need to segment, target, and then position the brand effectively in the perceptions held by consumers.

Groupon has not been profiting well lately, reporting a $102.7 million (USD) loss in Q2 of this year. This could be blamed on their lack of effort in establishing a coherent value proposition.

Although Groupon does offer great deals, it does not target a specific type of consumer. It offers bargains on random items that many quickly realize they do not need. As a Canadian Business article put it, “Groupon is a garage sale”—sure, they offer many things, but the offerings are unsystematic. As a result, the brand name is weak; people do not associate Groupon as a credible source in which the consumer will end up satisfied. In essence, as a result of a practically non-existent value proposition, Groupon has created for itself a weak name and a reputation for offering mainly useless deals that are inapplicable to many consumers’ busy lives.

Works Cited:

Philip, Bruce. “Because cheap is not enough | CanadianBusiness.com.”CanadianBusiness.com. N.p., 22 Sept. 2011. Web. 4 Oct. 2011. <http://www.canadianbusiness.com/article/46332–because-cheap-is-not-enough>.

Lim, Josephime. “Groupon IPO could be trouble | CanadianBusiness.com.”CanadianBusiness.com. N.p., 1 Sept. 2011. Web. 4 Oct. 2011. <http://www.canadianbusiness.com/blog/business_briefings/42759–bad-press-swirls-around-groupon-s-ipo>.

http://marxistleninist.files.wordpress.com/2010/01/chiquita.jpg

In March of 2007, Chiquita Brands International, popular producer and distributor of bananas and other produce, agreed in paying $25 million in fines to the United States Justice Department as a result of being accused of paying more than $1.7 million to the United Self-Defense Forces of Colombia (AUC), a paramilitary terrorist group. Chiquita began paying the AUC in 1997 and continued until February 2004. As the payments continued, paramilitary killings in Colombia rose both in number and brutality.

In a statement published March 22 in the Chicago Tribune, CEO Fernando Aguirre reveals the motivation behind the scandal: “The payments made by the company were always motivated by our good faith concern for the safety of our employees”.

An ethical dilemma arises as the company chooses between employee safety, and the safety of civilians in Columbia. Chiquita, as a company, needs to offer workplace safety as it is generally considered ‘unethical’ to place workers in a dangerous environment. However, by paying terrorist groups for protection, Chiquita is endangering the lives of innocent civilians, as well as encouraging violence in an already unstable country. In my opinion, Chiquita has been placed in a difficult position—any decision they made would have violated some ‘ethical code’. However, although their employees are indeed protected, I believe that Chiquita does not have the right to place innocent lives at stake. Business is powerful, but I think that Chiquita’s perspective on the importance of business and human has been corrupted. As US Attorney Jeffrey Taylor said, “Funding a terrorist organization can never be treated as a cost of doing business”.

Works Cited:

Evans, Michael. “‘Para-politics’ Goes Bananas | The Nation.”The Nation. N.p., 4 Apr. 2007. Web. 15 Sept. 2011. <http://www.thenation.com/article/para-politics-goes-bananas>.

Marx, Gary. “Colombian official seeks U.S. papers on Chiquita – Chicago Tribune.” Featured Articles From The Chicago Tribune. N.p., 22 Mar. 2007. Web. 15 Sept. 2011. <http://articles.chicagotribune.com/2007-03-22/news/0703220149_1_chiquita-executives-fernando-aguirre-united-self-defense-forces>.