Monthly Archives: October 2014

Recently a research shows that the Family-controlled firms now make up 19% of the companies in the Fortune Global 500, which tracks the world’s largest firms by sales. It seems that there is a huge success the family company has reached, and more importantly, a majority number of investors would like to believe these companies can provide them a more stable return of profit.
In my opinion, the family-controlled firms can show a obvious advantage that they usually have an excellent operation culture which is really essential to keep both employees and customers’ loyalty. The nature relationship between family members can bond the managers together and make a easier environment to reach a consensus.
However, there are still many issues we should realize in terms of a family firm. First of all, because of the difficulty to distinguish the ownership clearly ( most family firms have a few different major share holders in one family), there is a high risk that the company may be destroyed by squabbles in between the managers. Furthermore, it is believed that there is no potential issue that is more toxic than the transition from one generation of a family to the next. On the one hand, their children may not have the interests or abilities to join the family business, and handle the business problems, which could put company founder in a huge dilemma. On the other hand, the investors and shareholders possibly lack confidence to the next generation.

Materials from: http://www.economist.com/news/business/21629385-companies-controlled-founding-families-remain-surprisingly-important-and-look-set-stay

Some smaller car makers in Japan like Mazda and Subaru are facing a serious problem that it seems that the car market, at least in Japan, has been occupied by three giants(Toyota, Nissan and Honda). These “second-line” brands are struggling between being purchased and breakdown. However, some companies choose a clever differential strategy which resurges them to some extent. It is essential that they know their companys’ drawbacks clearly and turn the disadvantage into a new chance to make some differences. One example is that Mazda’s decision some years ago not to develop costly hybrid or fully electric power trains in favor of pioneering its “SkyActiv” technology, which greatly improves the efficiency of petrol and diesel engines.
In my point of view, this kind of change is a combination of disruptive innovation and differential strategy. For these smaller car makers, it is their opportunity to find the gap between the high-end products and the special need for the society. Furthermore, targeting the market aboard is also strategy with a lot of risks. It will take time to investigate people’s need in another continent and there is a risk that the high import taxes will enhance the price which may make the production less competitive.
However, if the company is not strong enough to occupy a certain part of market, it is necessary to find out the most appropriate strategy to cater a different customer segment and try to figure out a way to survive in this dilemma.

materials from: http://www.economist.com/news/business/21627722-japans-small-car-firms-are-defying-industrys-get-big-or-die-imperative-lots-oomph
picture from: https://www.google.ca/search?q=mazda&rlz=1C1CHWL_zh-CNCA609CA609&espv=2&biw=1366&bih=667&source=lnms&tbm=isch&sa=X&ei=8qdNVIm-EYWyoQT0u4HQCA&ved=0CAcQ_AUoAg

As China becomes one of the biggest economies, an increasing number of small business from all over the world want to entry Chinese market to maximize their profit. However, some of them found that it is really hard to get involve into the Chinese market because they know little about local trade law and how to protect their intellectual-property rights. Moreover, the small corporations are facing furious competition in working system.
In my point of view, it is time for local government to think about how to benefit more on both trade sides. Providing consulting institutes and easier accessibility of business law can encourage more foreign companies, especially for small business to entry this huge market and bring more chances to make a connection between two countries. Furthermore, it is a chance to add shared value between the operation and both two countries. For example, a recent successful story involves sales of imported fresh foods on Alibaba’s Tmall portal increases the farmers’ income in America as well as gives Chinese customer a chance to enjoy imported food, which made huge benefit on both trade sides. Creating a shared value not only contributes to the society, but also a strategy which can give the company a larger profit as well as a better social reputation.

materials from: http://www.economist.com/news/business/21625886-it-hard-small-businesses-break-chinese-market-small-not-beautiful
picture from: http://cdn.static-economist.com/sites/default/files/imagecache/290-width/images/print-edition/20141018_WBD001_0.jpg

When I first found this article from Lily Du’s blog, I was totally attracted by the clever decision made by Samsung. The strategy of exiting recessionary laptop market is a way that Samsung can avoid further loss in this division and turn around to a more active market of tablet. However, it makes me to think further about disruptive innovation. When apple first introduced iPad to the market, just as Lily mentioned, it was met with criticism for simply being a glorified iPod. But 4 years later, the iPad has reached a huge success as an incomplete substitute of laptop as it provides people with a much lower price with a more convenient product to carry, which has almost the same function like laptops.
Now, Samsung is doing the same thing like Apple now. They are not only constantly focusing on sustaining innovation, but also doing more efforts on disruptive innovations like tablets and mini player which are target to smaller target market with simpler product function and lower price, attracting more specific clusters which can offer the company a new opportunity to fulfill the customers.
I believe the strategy Samsung make is not a retreat, but a big step on disrupting traditional marketing ideas and decision.

Lily Du’s blog: https://blogs.ubc.ca/lilydu/
picture from: https://www.google.ca/search?q=tablet+samsung&rlz=1C1CHWL_zh-CNCA609CA609&espv=2&biw=1366&bih=621&source=lnms&tbm=isch&sa=X&ei=tT5EVP2OGsfEiAL_tYC4BQ&ved=0CAYQ_AUoAQ

Supermarkets today are facing unprecedented competition ever. It seems that some old ways to attract costumers are becoming more ineffective. A typical example is the loyalty card.
20 years ago when loyalty card first used in Tesco, it brought a huge damage to its competitors because the membership card offered people a totally new way to save money. What’s more important, it gave us a “visible discount” by getting freebies and cash back.
However, the situation changes nowadays. Almost all the supermarkets copy this promotion idea, therefore, it makes no difference for costumers choosing where to go. Furthermore, there is a big problem that some retails set higher good price than it should be, and after the “membership” discount”, the price just seems lower. In fact, costumers do not get any discount this way. Many people realized this problem so that more and more shoppers seemed to have wised up to the fact that they are better off with the permanently low prices of the discounters than the vouchers and cash backs that the big four’s loyalty schemes offer. Membership card become a kind of decoration in our wallet.
In my point of view, membership card is not the only way to keep the consumer loyalty. It is the time for managers to make differentiation strategy rather than following others blindly. Also, the companies should build their own brand proposition, which can keep a healthy and reliable image in people’s mind. That is exactly the internal motivation to push consumers to choose. On the other hand, companies who choose to keep loyalty card should balance their profit better, in order to avoid unnecessary loss from excessive promotion.

materials from: http://www.economist.com/news/business-and-finance/21622994

Recently, as China’s giant e-commerce operation Alibaba went public, another Chinese internet company—yahoo began to get in a dilemma. Inventors put a low value on yahoo’s core business, which made Yahoo’s market capitalization slipped to $40 billion.
It seems that, unfortunately, before Alibaba went public, yahoo has been seen as a “springboard” to get Alibaba’s share. In the past few years, yahoo’s most important decision is to hold a huge amount of Alibaba’s share, which gives the company a chance to “abduction” the investors. But while the situation is changing, yahoo has to figure out some more positive strategy in order to defuse this problem. However, In my point of view, yahoo is lack of special points to attract the market. In fact, although it is one of the earliest e-business company, yahoo stopped to grow and made little difference in the function and ideas. Yahoo really need to develop differential strategies and pay more attention on its substantial changes like exploring new social and communication ideas and find some more supportive partners. I believe the actual strength of the company itself can give more confidence to the public than holding other company’s shares.

Material from : http://www.economist.com/news/business/21621812-investors-put-low-value-yahoos-core-businessfor-now-what-it-really-worth
picture from : https://www.google.ca/search?q=yahoo&espv=2&biw=1366&bih=667&source=lnms&tbm=isch&sa=X&ei=4kkuVO64FaaKjAKd_4D4Aw&ved=0CAYQ_AUoAQ

These years, the first nation issues are coming to people’s mind. First nation people are debating with the the government for their rights in environmental problem and the ownership of some nature resource. Also, they are appealing for culture keeping and education problems. That drives me consider about the impact for business model as well as for economy.
Undoubtedly, “uncertain areas” of first nation do limit certain business’s development. For instance, logging is strictly controlled in protected area in order to keep the nature lifestyle of the first nation. This situation may do a huge impact in wood source supplying. Many operations have to adjust their strategy to adapt the rules. However, it is very hard for these companies to figure out that who they should talk to, because the first nations do have their own management organization. The disagreement between two sides are making unnecessarily loss in economy, and the first nation, as a stakeholder, also need benefit to develop themselves.
I believe it is very important for both side to build a connection for more convenience communication and make a agreement in nature resource controlling. Although there must be some conflicts in ideas and benefit, just like Premier Christy Clark said “partnerships don’t mean we won’t have disagreements”, it is still a chance for both government and the first nation to reach a win-win situation.

materials from:
http://thetyee.ca/Opinion/2014/07/26/Tsilhqotin-With-Gloves/
http://www.vancouversun.com/life/Premier+urges+cooperation+more+litigation+government+natives+reach+fork+road/10194776/story.html