Usman's Commerce 101 Blog

Business models such as that used by Salem’s Ethiopia, are the reason we need social entrepreneurs and projects such as the arc initiative. Even if the UN was fully funded, it would be difficult for an organization of this size to help meet the needs of all the communities around the world. Social entrepreneurs bring a breath of fresh-air into the business world, as these individuals are not only concerned about making profit, but also bettering the lives of the people in their communities. It would be important for a fully funded UN to help support such causes. Social entrepreneurs prove that one person can make a change!

Projects such as the arc initiative are also important, as they help guide social entrepreneurs, in less developed countries, with strong business advice. It allows individuals with good business ideas, to talk to other professionals, and understand how they can transfer their idea into a strong business plan, that not only helps their community, but themselves as well. In Salem’s case, she was able to get strong advice on how she could expand her business and that not only helped her business, but also allowed her to offer more jobs to those in her community.

In New Zealand there is a rise in the number of sustainable products younger generations are buying. In the past older generations were the ones driving the sustainability trend, but recently, younger generations have started to consciously choose sustainable products over there counterparts. The need to support sustainable products is starting to grow as coal, gas and oil approach their end as resources. The emissions from these resources are also destroying the environment, and as more people start to realize the importance of finding an alternative solution to meet energy needs, the popularity of sustainable products will grow.

Businesses also have start realizing that making sustainable products are the way forward for them. The demand for these products are rising, and if businesses can capitalize on this trend early on, they are sure to thrive in the future. By creating sustainable products businesses are not only improving their profit margins, but they also help society and the environment, thus improving their triple bottom lines. Businesses that are already sustainable are also more likely to beat out competition who use unsustainable methods in the future. As the need for sustainability rises, the other businesses will have trouble changing their operations, thus leaving sustainable businesses to come out on top.

Coming out of the Ebola crisis, Liberia’s government are now planning to lay-off, 30,000 of their 50,000 employees. Branden Kelly’s blog helped me understand the problems with downsizing at a business scale, but I can only assume that at a government level a downsizing of this magnitude would cause great unrest in the country.

Branden talks about how downsizing can effect morale and productivity in a company, and if the Liberian government were to lay-off about 60% of the workforce, I can imagine their being a huge fall in the countries morale. Above this unemployment in the country will rise from an already unacceptable level.

Although the Liberian government want to cut costs after the recent Ebola epidemic, I feel it is necessary for the government to realize that firing so many workers may not be the best plan of action. Although it would reduce costs in the short-term, Liberia would risk causing huge distrust against the government, as well  as falling productivity as the counties morale plummets. Also in the long-term, having a large unemployment rate won’t help to improve the Liberian economy, as people won’t have any money to spend.

I think Liberia should think of other cost cutting measures, and after the Ebola crisis, a plan to fire so many workers would only cause the country to go into another crisis, this time an economic one.

Reading both Azhar’s blog, and an article on increasing the minimum wage in Wisconsin, left me with similar feelings towards the subject. I agree that the minimum wage does have to increase, especially in states such as Wisconsin, where workers are making less, after inflation adjusted calculations, than they did 25 years ago.

In a state such as Wisconsin, where the minimum wage still leaves workers in poverty, it is a necessity to raise the minimum wage. Workers have to be motivated to work, and if they are in poverty after working long shifts, they can lose all motivation. Above this workers will be tempted not to work at all as benefits may result in the same pay for some people. Lastly, the whole Wisconsin economy, which would then effect the US economy, could be boosted by a minimum wage rise, as workers now have more spending money. Although the minimum wage does mean business costs rise, businesses in the area may want to show their support for a rise in the minimum wage. The businesses will be seen in a ethically positive light, as they will be supporting, getting people out of poverty. Above this it will show customers that the business cares more about their employees than keeping costs low therefore, creating positive publicity for the business.

Dina Kasiri’s blog shows how important it is for a business to plan ahead. A lack of planning for environmental disasters can cause businesses to go out of business. I agree with Dina’s point that it is vital for a business to plan for such events, so that they can come out of these difficult situations with some direction.

Small businesses in New York are realizing the importance of planning, and there has been a large rise in the demand for weather disaster planning. Small companies understand that they can not close down during the winter, just due to bad weather, as it is not financially sufficient for them to do so. That is why coming up with ideas for how they can operate during this weather is becoming of greater importance to them, as they have to continue providing their good and services if they want to avoid closing down. Overall, I feel that planning for weather conditions isn’t just important in countries where bad weather is expected, but also when these conditions aren’t expected. This allows the company to know how to recover from any scenario no matter how unexpected it may be. In countries where weather disasters are common, this type of planning becomes a necessity.

Netflix is learning that breaking into an international market may not be as easy as it seems on paper. The company probably felt that the idea of offering a high-quality, unlimited time TV-shows and movie service would be a very popular idea throughout the globe. However, they are finding, that in different countries, their product may not be as attractive as it is in the US. Netflix had trouble breaking into South American markets, due to the lower standard of living in these countries, and is now having trouble breaking into the European market, due to different tastes of the customers.

The issue Netflix is having, highlights the importance of creating a strong business model for each market you are entering into. The company’s business canvas and central business goals may have worked well in the USA, Canada, UK and Scandinavian countries.  However, now that they are moving into markets where the customers have vastly different content demands as well as countries where the technological infrastructure is not as strong, it becomes more necessary for Netflix to approach all these markets with a different perspective. I feel Netflix should be creating new business plans for each of these new markets, and what they plan to do, to satisfy the customers in these markets.

The recent push to help first nation citizens regain their identity is starting to have a strain on businesses. As we can see from the article, first-nation territories are becoming off-limits for companies to exploit and the laws required to start a business, such as mining, in these areas is much more strict and tedious. Companies have to go through many more formalities and ask the tribes personally for use of these lands. Therefore, it is becoming more and more imperative that companies consider the legal issues associated with trying to use first-nation territory. This is an external factor that firms have to be aware of and plans to tackle these issues should be made in advance. All the legal documents should be thought of and the interactions with the first-nation representatives should be planned. Companies should realize that these issues may cost them extra time and money and therefore, it should definitely be included in their business plans.

Also as the importance of ethics grows in businesses it becomes an even greater necessity for companies to handle these issues with care. It is very important for a company to make sure they go through these procedures respectfully and correctly so that they can maintain their image and get land they desire. Also companies should be prepared for the notion that they might not get what they are looking for, as in this case, and realize they have to leave the issue and move onto a plan B.

Nike’s online sales have recently peaked, as the company increased the customization options available to customers. The sporting-good giant is allowing customers to pick the colour patterns & the lace colour of their new shoes and it is resulting in a massive boost in sales as customers are given free reign over the colour of their shoes. This strategy from Nike is excellent as allowing more customization really helps improve demand for the companies  products. By giving customers what they want specifically, Nike is helping fulfill more of the customers wants and at the same time they can also charge a little higher for the shoes as they are personally made foe each individual. Another big advantage this has is helping reduce Nike’s inventory levels. By making products on demand Nike doesn’t have to predict what customers will be buying and therefore, they are less likely to produce a lot of extra shoes that will go to waste. Nike can also use the customer’s preferences to see trends in shoe colours and sell more of those colours in their stores.

Overall this strategy has several benefits for the customers but more importantly for Nike, as an improved website and better customization makes the firm seem more personal, which is very difficult for a big brand to do. Also it helps improve brand loyalty for Nike as customer’s will be more satisfied by their products.

Apple’s recent release of the iPhone 6 caused the company to spiral back into the headlines as the demand for the phone is so high. The iPhone 6 Plus offers direct competition to the Samsung Note phones and customers have taken to the product excellently with Apple’s lead-times increasing to cope with the demand.

The question is how does Apple manage to keep getting such a phenomenal response to their products. Personally I think it is a combination of Apple’s marketing ingenuity and their philosophy to keep their products simple. Apple really play on the idea that their products are the most elegant and stylish products to own. They have managed to break the conventions of the technology market and make their product a symbol of modernity. Many companies have tried to follow suit such as Sony with their Vaio laptops, but none have been able accomplish this feat at the same level that Apple has. The question many ask is, “How do Apple products do so well when their competitors have had similar products for a much longer time?” The simple answer to that is Apple have created their brand into something much more than a piece of technology. Apple have also managed to create a massive customer-base with people coming every year to buy the next iteration of the companies iPhone or iMac products. What this proves is that brand image really is a thing. A company can sell products through it’s name and although sales may drop if the product is very weak, we learn that if the product is in line with the competition it will probably do better just due to the brand name.

The Atlanta Hawks owner, Bruce Levenson, is prepared to sell the team after there were leaks showing e-mails sent by him that had racist context on how to increase the white fans the team had.

Mr. Levenson spoke about how his team had to increase their white fan base and that there weren’t enough affluent black fans to sell season tickets well. This comes after Mr. Levenson came out in public against Donald Stirling and his racist comments. Mr. Levenson reported the e-mail himself and said “The email was “inflammatory nonsense. If you’re angry about what I wrote, you should be. I’m angry at myself, too.”

I however, want to talk about why business ethics such as the fight against racism our necessary. As the article states Bruce Levenson will now be selling the franchise for the good of the Atlanta Hawks. This gives us insight as to how misbehaviour from a influential person in a company or franchise can have a bad influence on the brand. People start to dislike a franchise/business that is linked with ethical issues such as racism, sexism, sweatshops etc. By selling the franchise Levenson is trying to distance the Hawks from his comments.

Source: http://www.slate.com/blogs/the_slatest/2014/09/07/bruce_levenson_atlanta_hawks_owner_to_sell_team_after_racist_e_mail.html