Alibaba Group Holding Ltd., China’s largest e-commerce company, had 35.19 billion yuan ($5.78 billion) in transactions on 11.11 one-day Shopping Festival. E-commerce firms took advantage of November 11, China’s Singles’ Day to promote and offer huge discounts to stimulate online shopping demand.

http://www.bloomberg.com/news/2013-11-11/alibaba-breaks-sales-record-on-china-singles-day-amid-discounts.html

image via Alibaba official weibo post

Image via china30s

SHOKAY is a successful Chinese producer of well-designed and high quality knit from yak fiber sourced directly form Tibetan herders. The products exude an extraordinarily natural  aesthetic and feature rewarding customer experience.

image from Snapchat logo

I’ve preliminary analyzed Snapchat in my last post, read COMM101 Section103 Joseph Lee’s Blog, and I am going to delve deeper to the consequence and impact of Mr. Spiegel’s refusal to Facebook’s acquisition request.

From the positive side, it maintains its competitive strength among high-tech mobile social app industries. The fact that Snapchat as a startup created itself around $4bn value within two years, is solid enough to argue that it has competitive advantage and room for appreciation due to its point of difference: unique messaging mode. He is trying to break the law that high-tech startups cannot escape from the destiny of eventually being taken over by technology giants. Many cases in history proved that the operation of parent companies is not capable of improving the performance of companies after acquisition. Before acquisition, workers fear being laid-off, so they don’t have motivation to work; after that, the steep organizational structure of big company has problems such as low efficiency in communication and time lag of operation.

However, being taken-over eliminates risks. Snapchat gambles on fickle teenagers, while audience of Facebook, LinkedIn, Pinterest are from multiple generations and occupations. Buyout makes the bet more secured.

image via yahoo news

Evan Spiegel, the young co-founder and CEO of Snapchat declined the acquisition of $3bn from Facebook.¹ His decision is so shocking and puzzling that we may wonder where did his confidence come from. I’ll briefly analyze Snapchat with SWOT.

Strength:

• Snapchat features the unique characteristic- messages delete themselves after maximum 10 seconds so it highly protects users’ privacy.

Opportunity:

• Snapchat, a new mobile messaging app, never stops explosive growth since it was launched two years ago. It’s getting more popular especially with teenagers, while it was reported that the daily use of Facebook by U.S. teenagers decreased due to the emergence of more alternative social apps.

Weaknesses:

• There is no way to save messages that are important.
• Teen users are extremely fickle.

Threats:

• It is the uniqueness that encourages irresponsibility of contents of messages people send to others. For example, my friends once received annoying “sexting”, and they believe that it really causes negative social impact.

• The rigorous competition in social media can’t guarantee any company the top position forever. There is a stack of mishaps in history. For example, Digg rebut the offer of $200m and end up selling for $500,000.²

¹ http://blogs.wsj.com/digits/2013/11/13/why-would-snapchat-turn-down-a-3-billion-cash-buyout/?KEYWORDS=snapchat

² http://online.wsj.com/news/articles/SB10001424052702304373804577523181002565776

X/Y two-dimension competitive analysis is more suitable to be used by an existing company which has launched products into the market, rather than by an early-stage startup which has actual and solid data showing how its company’s future performance and competitive advantages will be like.

image via Steve Blank’s blog

Former Sybase AG CEO John Chen started to steer BlackBerry.

image via telsetnews

From John Chen’s previous experience of saving loss-making Sybase back on an even keel and finally becoming the top one mobile database technology company, it’s clear that his management is carried out around his vision of value proposition.

1) Employees’ affective commitment and confidence have negatively correlation to turnover intention, which greatly impact working performance. Now the lack of confidence of people working for BlackBerry is the first problem in dire need to be solved. In this case, the interim CEO himself is an infusion of new vitality, as he will new entrepreneurial and organizational cultural and new executives to board later on.

2) No actions should be taken if the company is not competent. That focusing on competencies and avoiding overwhelming and unnecessary competitions in areas where the company doesn’t have a stable place, can technically save huge resources for doing research and upgrade techniques and products what the company is strongest at.

With expertise in both IT and accounting management, letting alone his previous remarkable achievement in saving Sybase, John is competent for this CEO position. It will be an era fascinating to watch.

http://www.forbes.com/sites/parmyolson/2013/11/05/new-ceo-blackberrys-turnaround-could-take-a-year-and-a-half/

Since Camelot, the UK National Lottery operator doubled its ticket price from £1 to £2, it has launched solutions to face backlash. Camelot recently launched an advertising campaign to build a more reciprocal relationship with consumers. Camelot also expands its branch to Internet; it encourages consumers to join its Facebook group, and make original theme songs onto YouTube.

According to Principles of Accounting, a good manager should invest significant effort in developing strategy to achieve business goal in a fair way consistent with core values and brand positioning.

Camelot firstly increased ticket price, and then launched friendly campaign to strengthen its bond with retailers and consumers. Though it seems like a sugar coat activity, it actually worked; in my opinion, it is a smart marketing strategy, which would increase lottery sale due to the relatively inelastic demand, and establish stronger brand loyalty. What’s more, with the force of social media, it will definitely enlarge its brand impact, and penetrate the friendly and beneficial brand image into minds.

From which, we can obviously see that the managerial and marketing departments are very sophisticated and efficient both in responding to reactions from consumers and the market, and in planning for success.

http://www.marketingweek.co.uk/news/camelot-seeks-to-create-more-reciprocal-shopper-marketing/4008080.article

Instagram revealed its plan to roll out photo and video ad of high quality to US users.  Apart from some critics about this decision, it is not surprise at all considering that Instagram is a large-user-base product of Facebook whose advertising revenue weighs a lot.

This reminds me of Twitter’s increasing reliance on advertisers.  As revealed by its IPO filings, over half of the revenue is from advertising, while it aims to have new ad formats in order to expand its foothold in the competition for advertisers.

However, sometimes businesses focus too much on expanding revenue and profits to pay attention to users experience.  Ad with bad or incongruous contents and design, or too much ad can easily rouse users’ rage and push users to competitors, which would be an act of “committing suicide” with no doubt. Facebook, for example, once faced the backlash from users due to too much in-feed ad.

Therefore, keeping a delicate balance among user experience, company’s goal (most of time is to increase profits), and the brand value position, appeals to be a way forward.

 http://www.marketingweek.co.uk/news/instagram-to-slowly-roll-out-advertising/4008121.article

http://www.marketingweek.co.uk/news/twitter-to-increase-marketer-education-and-ad-formats-to-secure-long-term-future/4008119.article

Foxconn International Holdings Limited, is a super electronics manufacturer for Apple, Dell, and other worldwide electronics and information technology companies.

However, criticism has grown over instances of harsh working conditions, child labor, workplace accidents, overtime, discrimination and series of suicide of labor. In response, Foxconn denied allegations of it being a “sweatshop”, and labor being abused. Foxconn promised a sharp wage raise, and reduced overtime hours. Plus, Foxconn required all labor to guarantee they and their descendants would not sue the company in case of future unexpected accidents.

Frieman stressed that the purpose of a business is to maximize stakeholders’ benefits, and he compared the “the doctrine of social responsibility” to “the cloak for actions”. In this case, Foxconn’s response is in order to, firstly, quell the public opinion, and secondly, rebuild the company’s tarnished reputation, and improve the bleak annual financial performance.

In the nutshell, the business ethics problems inside Foxconn need to be investigated and fixed as soon as possible, and it is not easy enough to be solved by solely increasing wage of labor. The business culture and social responsibility have been undervalued by Foxconn. Perhaps it is the military experience of the founder that builds Foxconn’s strict and somehow “military” business operation mode. However, in the cold logic of “the only purpose of a business is to make profit”, employees and the whole society still expect businesses to be more benevolent and ethical.

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