The world first got a glimpse of the Nike Air Mags in 1989, when Marty MacFly wore a pair in Back to the Future. In the past 27 years there has been speculations whether this piece of science fiction would ever come to reality. Then, last fall, Nike’s vice president of design John Hoke announced that the self-lacing shoes were possible. In fact, these shoes were something that you and I could buy in the near future.           

The development of these futuristic shoes have put Nike in the spot light, as such a concept has never been witnessed by mankind. The Air Mags are one of a kind shoes as mentioned in Liz Stinson’s article, because of the futuristic technology and elegant design used. The shoes do not use traditional lacing system, but a series of battery powered pulleys that cinch the throat of the shoes. There are sensors that senses a person’s weight and according adjusts the bottom of the shoes. Using such technology gives Nike first movers advantage or technological leadership, which is the initial advantage gained by a market occupant. Furthermore the company has patent for the technology, thus no other foot ware brand can produce this master-class without Nike’s permission. Therefore Nike benefits, as it reduces competition due to barriers of entry.  In turn this will increase Nike’s profit margins because they are the only company producing in this market segment. In Addition the companies brand value also increases as Nike can be associated to an innovator.

Nike has not yet exploited monopolistic power, but has instead done something special for the community. In total 1510 pair were sold in 2011, from which 1500 pair were sold on E-bay, and 10 deluxe addition was sold at live auction. A total of $ 9.4 million was raised from which $ 4.7million accounted for sales of shoes, and the other $5million was donated by co-founder of Google Sergey Brin and his wife Anne Wojcicki. All the money was donated to Micheal J Fox’s foundation of Parkinson’s disease.

In class 15 of comm 101, I learned that Cooperate Social Responsibility is any action undertaken by a company that benefits the community. The actions of Nike is a form of CSR because it is used to help find a cure for Parkinson’s disease. This is done by creating shared value, because Nike has formed links between its business strategies of making profits through CSR.

In conclusion, I believe that this initiative will increase Nike’s competitive advantage, as it differentiate Nike (brand differentiation) from other brands by creating a positive image. Also it engages the customer and creates a positive work environment as something good is been done.

 

   

 

 

  

   

Appendix

1)      https://en.wikipedia.org/wiki/Nike_Mag

 2)      Stinson, Liz. “Nike’s Back to the Future Self-Lacing Shoe, the HyperAdapt 1.0, Is Finally Here.” Weblog post. Wired.com. Conde Nast Digital, 16 Mar. 16. Web. 28 Oct. 2016. <https://www.wired.com/2016/03/nikes-back-future-self-lacing-shoe-hyperadapt-1-0-finally/>.

3)      Luntz, Stephen. “Nike Set To Release Self-Lacing “Back To The Future” Shoes.” IFLScience. N.p., 27 May 2016. Web. 28 Oct. 2016. <http://www.iflscience.com/technology/power-laced-sneakers-promised-year/>.

 

 

 

 

 

 

 

 

 (https://www.bing.com/images/search?q=samsung+note+7+on+fire&view=detailv2&&id=0734690F2667DF11365D46AFC363832B75C13B90&selectedIndex=7&ccid=P2zav429&simid=608040316590097282&thid=OIP.M3f6cdabf8dbdb87af70806b3d774c8b2o0&ajaxhist=0)

Have you ever imagined your child suffer burns due to a phone explosion? Well 6 year old boy from Brooklyn has been treated for skin burns, when his Samsung note 7 exploded while he was watching a video⁽²⁾. This is not the first incident after the launch of Samsung’s note 7.

Samsung’s latest phone was released on 2^nd August, and it was disclosed that the battery of the phone was defective, causing the device to overheat and explode. The company has confirmed 35 cases of note 7 catching fire⁽³⁾.

However, Samsung officials have gracefully taken the blame and have done everything in their power to fix the problem. For example customers are receiving replacement phone and note 7 has been removed of the shelves in 10 countries (2.5 billion phones), including South Korea and USA⁽³⁾.

Yet it is not been effective, as the company has lost money and brand image. Firstly, Samsung has lost $26billion in brand value, as its brand image has been damaged⁽¹⁾. This can result in the reduction of loyal customers in the short run, because the industry has a large number of substitutes. Like Apple, Sony, LG, Google Nexus and etc. Plus the industry is highly competitive and evolves rapidly, therefore cost of brand switching is minimum. Thus resulting in loss of revenue and customer base.

Secondly, I believe, that the Note 7 experienced this problem, because Samsung did not take part in sustainable competition. In class 10 of comm101, we learned that sustainable competition is a long-term intangible asset that cannot be easily duplicated by competitors. Like brand, network effect and etc. Samsung did not take part in this business activity, because it was in direct competition with Apple. Just like Apple, Samsung wanted to release a headline product once a year. In doing so it failed and put its R&D and quality control group in jeopardy. Building on Surja’s blog, I believe that this reflects badly on Samsung and gives Apple a competitive advantage, as the media is going to question the quality of Samsung’s products for a long time.

In order to solve this problem the marketing department can rebrand Samsung’s image. This can be done in terms of allowing customers to test the phone before buying it. In this case no one loses. Furthermore, the company can also change its promotional strategies from just an innovator to a company that pays attention on innovation and “quality”. This form of promotion has worked in the past when Cadbury was scrutinized for quality of their chocolates.

Lastly I would still buy Samsung products because I know the company will fix the problems, due to the status and power.

 

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Works Cited

1)    Quartz, Samsung has lost $26 billion in value since it recalled the […] published on September 12, 2016, by Josh Horwitz, accessed on October 16, 2016 (http://qz.com/779270/samsung-has-lost-26-billion-in-value-since-it-recalled-the-galaxy-note-7/ ).

2)    @maggie_reardon, By Marguerite Reardon. “Exploding Samsung Phone Burns 6-year-old.” CNET. N.p., 13 Sept. 2016. Web. 17 Oct. 2016.

3)    “Samsung Recommends to Exchange Galaxy Note 7 Due to Explosion Risk.” RSS. World News, 01 Jan. 1970. Web. 17 Oct. 2016

4)    https://blogs.ubc.ca/surajjangvarma/2016/10/02/innovation-the-modern-david-and-goliath-story/

 

 

Ikea’s sustainability strategy is in line with its vision of creating a better everyday life for many people. The effectiveness of this strategy can be analyzed using the triple bottom line. It is an accounting framework with three parts: social, environmental and economic.

The company has promoted social development in the community through its sustainability strategy. Ikea believes in gender equality. It has done this by proving finical and management support to women in developing counties, like India and Brazil. This has resulted in reduction of absolute and relative poverty, as the business are a source of income. Furthermore Ikea continuous to support these businesses through buying small proportion of supplies of raw material from them. At the co-operate level Ikea has promote gender balance in leadership role, i.e. delegating and trusting their women employees.

These initiatives have resulted in better relationship with the community, because of the positive image created. This will also make employees feel proud about the company, resulting in motivated and loyal employees, i.e. creating a positive working environment. Consequently reducing labour turnover.

Ikea respects the nature and it is known through its initiative to use 100% renewable energy and reduce carbon footprint by 50% by 2020. Moreover the company wants every stage of production to be environmentally sustainable. Its production process are in the early stages of cradle to cradle design, which involves circulation of raw material without any wastage (like the nutrient cycle). This will result increase output and reduced costs in the long-run. It’s environmentally sustainable because it reduces the amount of toxic materials emitted as the materials remain in a close loop. Additionally, Ikea has used the IWAY supplier’s code of conduct. Which involves suppliers respecting labour laws, the environment responsible forestry management and more. This code of suggests that Ikea is in a mutual agreement with its suppliers, thus show casing a long lasting relationship with its suppliers. Lastly being environmentally friendly is a form of managing scares resources effectively, and increasing competitiveness.

Due to social and environmental benefits achieved, Ikea has experienced economic benefits. Firstly, it has experienced 9x increase in sales revenue, due to its loyal customers, and these customers are very important for the business as they result in repeat purchase. In addition, the company has also experienced reduction in costs, through the use of flat packaging and other lean manufacturing techniques.

In conclusion, I believe that the company and the community has benefited from its sustainability strategies.

 

 

 

 

 

 

Works sited

1)    Ikea Sustanabilty Report (2015) Available at: http://www.ikea.com/ms/en_US/img/ad_content/2015_IKEA_sustainability_report.pdf (Accessed: 3 October 2016). In-line Citation:(Ikea Sustanabilty Report, 2015)