The Arc Initiative is a third-world oriented outreach program founded by the Sauder School of Business at the University of British Columbia. It shares a common goal with many similar organizations: kickstarting local commerce, along with sharing knowledge and business expertise.

This begs the question, however, why is the Arc Initiative necessary? Given the existence of the United Nations, a much larger entity with essentially the same goal.

The United Nations support programs are indeed large, but limited resources limit their outreach. It is impossible for a single organization with limited resources to serve, wants appears to be unlimited wants and needs.

The Arc Initiative is just one of the many other programs working, in conjunction, to serve a common purpose: to foster the misfortuned. By providing business expertise to these communities, Sauder is allowing for the prosperous commerce in these communities.

It would be optimal for other organizations to join this program. As resources to accomplish this goal are scarce. It would be impossible for any of these programs to be rendered obsolete.

In a recent Financial Post blog, a writer mentions three priority-based business cultures: putting employees first, putting customers first and putting the brand first.

It is interesting to see his opinion that between employees and consumers, it doesn’t matter what you put first, so long as you focus deliberately in one direction. The question remains, however, what about putting the brand first? Is it so far irrelevant that it’s become obsolete?

Focusing on customers means receiving and responding to consumer feedback. Source: Stock photo from Foxworthy and Associates

I believe what the writer has written largely applies to small companies and start-ups; that in few rare instances, however, putting the company brand first is still the ideal dynamic for a company.

Take for example, Nike, or Coca Cola whose brand images are potentially the companies’ most valuable assets, so valuable that they often go through major litigation to protect them. In these cases, a shift in focus from brand image would be largely detrimental to the companies. With these examples, it is clear that putting the brand first is not an entirely obsolete practice, and is still not only relevant, but crucial for some companies.

However, it is clear that not all companies are Coca Cola or Nike. Smaller businesses such as Zappos with less value brand names may benefit more from a customer or employee oriented culture. And if you’re looking to become more customer oriented, the writer also offers a few great ideas on how to do so.

Volkswagen AG operates in the automobile industry. It’s subsidiaries/marques include Audi AG, Lamborghini S.p.A, Bentley Motors Ltd, Porsche AG, Bugatti S.A.S, and Volkswagen Passenger Cars. For this analysis, I will be focusing on the North American market.

Volkswagen Group. Source: IB Times

1. Barriers to Entry: HIGH

Not surprisingly, the automobile industry has large barriers preventing new firms from entering. Aside from insurmountable start-up costs, automakers must set-up dealer networks, acquire licensing, and establish trust in the brand (as cars are usually large purchases for consumers). New competitors often come in the form of subsidiaries of current competitors.

2. Power of Suppliers: LOW

Suppliers specialize. They produce parts for only one or two automakers at once, and are heavily reliant on these automakers. It would be devastating for a supplier to lose an automaker contract.

3. Power of Consumers: LOW-MEDIUM

Despite Volkswagen’s large collection of marques, there is an abundance of brand substitutes. However, consumers rarely purchase large quantities of cars; large firms/government agencies have slightly more power as they purchase vehicles in bulk.

4. Availability of Substitutes: MEDIUM

As a result of increasing rising gas prices and government initiatives to promote environmentally friendly transportation, more consumers are opting to take public transit/walk/cycle.

5. Rivalry: HIGH

The US automobile industry can be regarded as an oligopoly. However, with the recent insurgence of Japanese automakers manufacturing domestically, and the revival of “The Big Three” in the US, rivalry is as fierce as ever.

Conclusion:

Based on this analysis, one can conclude that Volkswagen’s position in the automobile industry is relatively safe. As long as they keep up with competitors in innovation, it is possible for the Volkswagen group to hold a considerable market share.

A Colorado resort town by the name of Steamboat Springs has recently taken an unprecedented initiative. In an effort to promote tourism in the resort town, the chief executive of the Steamboat Springs Chamber Resort Association is offering customer-service training to the entire towns’ small business populace.

This idea may seem preposterous at first, given the essential goal of increasing tourism and boosting the local economy (profit maximization), it seems unlikely that offering an entire town customer-service training would be conducive to this goal.

Steamboat Springs – Source: RMS Harp

However, if we view the entire town as one firm, it is easier to perceive the end objective of this program: increasing revenue by way of improving customer experience (and by extension, demand). A parallel approach is taken by Zappos, similar in the sense that it is based off an often forgotten premise: a customer’s overall experience plays a considerable factor in their choices. And while in the short-run, this may not directly lead to increased profits (a loss may just as likely be incurred), revenue generated from new customers, along with retained existing customers in the long run, can verily make up for these costs.

All this is especially true for Steamboat Springs, a resort town. Because vacationers generally seek enjoyment as vacation time is usually scarce, they are more likely to be affected by negative interactions than any other consumer.

As a result, this unorthodox, unprecedented move by a tourism executive may pave the way for other resort towns to follow suit.

A colleague of mine recently wrote about gutter oil being used illegally in the Taiwanese food supply. He had suggested the “extermination” of the companies involved by way of elaborate fines, mass boycotts, and in contradiction, not fining the company but detaining its executives and largest shareholders.

Gutter Oil. Source: china.org.cn

These methods would be largely detrimental to all stakeholders involved. These forms of essentially retribution will create a massive ripple effect, and affect a larger populace. Workers would be laid off, many companies that rely on the corporation and its subsidiaries will be forced to resource their supplies (whether they’re willing or unwilling).

The root of this scandal is likely much more isolated. It cannot be assumed that all executives and the largest shareholders, especially, were involved or even had knowledge of any illegal doings. Instead, an independent inquiry should be made, and only those responsible, those motivated by greed, possibly managers enumerated based on cost savings, should be held accountable.

While it is understandable that the writer of this blog (who holds a personal stake in the manner) is frustrated, it is important that appropriate measures are taken to ensure only those responsible are punished.