Social Enterprise is firms that strive to provide a positive social change or provide solutions to a specific social issues. In other words, their goals are not to make profit, instead, to help people that are in need. For instance, the Arc Program is a program that Sauder students and alumni facilitate workshops or internships in Ethiopia,Rwanda, South Africa and Columbia. They will teach useful business skills and provide latest concepts to local entrepreneurs in order to help them with their business. Similarly, the United Nations(UN) also aims for helping firms and organizations that will lead to a positive social change. The difference between social enterprise and UN is the firms social enterprise helps are much smaller in terms of their scale. Then, why would we need the Arc or social enterprise if the UN is fully funded?

After all, UN is an international organization consisted by countries all over the world. Any decision UN makes needs certain number approvals and it takes a long time from the proposal is approved to it is implemented. In other words, UN is not very efficient in providing immediate help. On the other word,  social enterprise can quickly implement decisions once they are made. Furthermore, there are individuals and firms that are in need all over the world. It is impossible for UN to help all of them. Since social enterprise is also across the world, it can provide on-time and effective help with local individuals or firms that need help because they are familiar with local environment.

The best strategy is letting UN and social enterprise corporate with each other. UN can provide an excellent platform to social enterprise to present their ideas not just to groups of individuals, but to a nation. Once the idea is accepted, social enterprise will have enough fund and government support to implement its idea. For UN, it can “outsourced” its social issues to local social enterprise so that they can tackle the issue more effectively.

In its latest earning report of Chinese Web Giant Tencent, Wechat, a mobile communication app, pulled in US$3.21 billion in revenue in Q2 2014. Its “Value-added Service” generates US$2.51 billion and US$487.4 million comes from social games on Wechat and QQ( another mobile communication app which dominated Chinese mobile telecommunication market in the last 10 years) The report also shows that From Q1 to Q2, WeChat grew 10.6 percent in terms of active users with 438 million monthly services. Tencent makes US$948.26 million profit in Q2, yet its revenue in eCommerce drops significantly. This is due to Tencent’s huge investment in JD, Chinese second largest eCommerce Company, and JD is now part of Wechat’s online shopping. 

What is Tencent’s business model that enables the company to make such enormous amount of profit?

The membership system both Wechat and QQ have. For members of Tencent, they can download stickers for free, have a faster growth rate of rank ( the rank is based on the length of time users stay QQ online) and cloud storage of all friends’ history data whereas ordinary users can only have seven days of cloud storage. In comparison, the privilege members of Wechat enjoy is limited in which they can only download the stickers for free. Since both Wechat and QQ have millions of users, Tencent can earn a lot of profit from the membership even though there is only a small percentage of members.

The value added service is primary part of Tencent’s revenue. Tencent provides online gaming, sports and information services, music tracks play and mobile payment. Online gaming including ” CrossFire”, “League of Legend” and games on QQ and Wechat is the company’s largest business. Tencent shows ranks of users’ Wechat and QQ friends in the game so that users can be more enthusiastic when they try to compete with their friends. Besides online gaming, Tencent also challenge Alibaba, chinese biggest eCommerce Company by partner with JD. Tencent is trying to take advantage of its massive  user group by providing a convenient way of paying items on JD. This is the strategy as Membership– even though there is only a small percent of users will use Wechat’s mobile payment, there still will be thousands of them. If Tencent advertises its mobile payment through Wechat or QQ, the number of mobile payment users will increase significantly.

In Jia Wei’s blog about how IBM increases its retention rate and recruit talents from the three-months volunteer projects, she mentions IBM tie two elements- corporate culture and social responsibility together to raise employees’ awareness of social responsibility. With employees having a sense of duty to the community, it generates a positive corporate culture to the company as well as social values to the community.

I totally agree with Jia Wei’s opinions. By giving the employees opportunities to choose an interesting volunteer projects among various topics, IBM is not just able to kill two birds with a stone, but multiple birds.  When employees in a team of five to ten work together in a one-month project, they can develop their team work spirit. With that, employees are more engaged into group work and can usually finish the project in an outstanding way. The fulfillment generated from the accomplishment of the project can create stronger bonds between employees and between employees and the company. Thus, the retention rate will increase as everyone in the company is actively participate. In addition, IBM creates a shared value through the volunteer project. Communities are benefited, employees develop a sense of responsibility to the community and IBM not only creates a positive image that cares about community but also develop a community caring corporate culture. Overall, it is a win-win situation for both IBM and communities.

https://hbr.org/2014/11/why-ibm-gives-top-employees-a-month-to-do-service-abroad

http://blogs.ubc.ca/jiaweixu/

The defective air bags made by Takata which have caused four deaths rise both automaker companies and costumers’ concerns. The affected companies Honda and Toyota have called back 7.5 millions cars in total to replace the defected airbags. Although both Honda and Toyota have issue public warning and are prepared to do whatever the car owners ask them to do, recalling millions of cars that have serious safety issue not only undermines companies’ credibility, prevent consumers from purchasing their cars, but also let the companies suffer financial lost for billions of dollars. For the manufacturer Takata, its stock plunged by 23 percent in Tokyo trading.

Having safe air bags in the vehicles are considered as points of parities(what consumers expect). Any companies which fail to satisfy any points of parity  can suffer several financial and credibility loss. As two of the world’s largest automakers, having to recall millions of vehicles that were manufactured in the last two years can have a catastrophic impact on companies credibility. Consumers who were about to purchase vehicles from them would turn to purchase vehicles made by other manufacturers since they don’t want to risk their lives on a defective air bag. Even though Honda and Toyota eventually replace all the defective air bags, their credibility will never return to the level before they had air bag issues. In the future, consumers will still concern of the safety of their vehicles. For Honda and Toyota, they need to show their sincerity to their costumers and have public apologize in order to save as much the company’s image as possible.

http://www.theglobeandmail.com/report-on-business/international-business/toyota-honda-deadly-air-bag-crisis-deepens/article21192065/

Xiaomi is a Chinese smartphone company whose primary products are smartphones in a relatively cheap price range from about CDN$370 to CDN$148.  After having a huge success in China with two billions sales in 2012 with Mi2, the company launched their set-top TV box.  In the beginning,  the TV box not only contained various TV shows including many TV shows from China and some American and Korean Dramas. Some of them,  including a very popular music show I am a Singer and Korean drama My Love from the Star, were only available on Xiaomi TV Box before they were available on TV. Another intriguing feature was that by downloading an app and used smartphones to connect to TV, costumers can watch videos from China video websites. In Hong Kong, Xiaomi TV box seemed to be popular with a monthly sales of 10,000.

However, Xiaomi’s strategy of making all TV shows and videos in China available on Xiaomi Box was clearly causing  Copyright Issues. Xiaomi TV box stole many contents that were only available in certain video websites. The biggest video website in China Youku demanded USD$830,000 for copyright issues and a public apologize.  As a result, some contents had been removed.

From my point view, it is perceptive and far-sighted that Xiaomi took advantage of its popularity and immense number of consumers in China to launch products other than smartphones since the market had become increasingly saturated. However, Xiaomi was too rush in wining a portion of market share as it illegally provided contents that some videos websites had exclusive rights. Costumers might start to question the legality for its products which would result in a bad company image. In addition, without having the priority of having various China’s TV shows and videos, Xiaomi had to come up with a new strategy that could provide them with competitive advantage.

On Tuesday’s class, three Sauder Alumni were invited as guest speakers to answer questions from students. They were  Paul Davidescu, the founder of Tangoo, Paul Gill who started Naked Coconut and Jennifer Martin who started SIP Soda. All of them patiently answered students’ questions and explained their company’s business models , how they dealt with the difficulties and how they felt as entrepreneurs. The followings are my takeaways from that class. 

It is never too late to start a business. Jennifer Martin started her business when she was retired. I was shocked when I heard it since I always thought only the ” young blood” is qualified for these demanding tasks. Jennifer mentioned how she started to make her own type of drink in the kitchen and did all the market research by herself. She took care all the tasks and did what should be done by a team. I guess when people found what their pursuit, they will  devote themselves into what they really love, let along their ages.

How to establish competitive advantage. When Paul Gill decided to start a new company. He first brainstormed an idea which turned out to be coconut oil in the food industry. Then through his research, he discovered Canada had a huge market.  After that, he started to produce products  and found out the coconut sauce was the most popular product. He then quickly established coconut sauce as its star product and began to produce a large quantity of them. In addition, Paul also gave the company an “naked” image. In the company’s website,  health and originality of the products were emphasized as the website mentioned” We will be honest about our products- from the processes that go into them to their health benefits”. The preparation Paul did before he entered the market and how he established the brand’s image and star products were essential for the business to be successful. To find out what the competitors lack or do not have and establish competitive advantage accordingly is what Paul had done. He mentioned how everyone lied in the industry and he decided to go contrary  to give the company a very stand-out image.

http://thetyee.ca/Opinion/2014/07/26/Tsilhqotin-With-Gloves/

There is no company in the world that will waste any chances for them to make profits. However, in Tsilhqot’in BC, the companies that try to exploit gold and copper no longer have the permission to do so, as the Supreme Court of Canada claims all activities that take place within Tsilhqot’in’s region will be illegal without permission from the Tsihqot’in people.

In this particular case, the rights of stakeholders, which are the Indigenous people living in  Tsilhqot’in , are being violated. Given by Freeman’s theory, it is a manger’s responsibility to combine all stakeholders’ interests. In other words, if any of the stakeholder’s interest is failed to be satisfied, then the business model has a defect. The Indigenous people in Tsihqot’in represents the community and their interest is to protect the environment. Thus, the company’s interest of exploiting golds and coppers is in conflict with the community’s interest. Therefore, the combined interests of all stakeholders is one important element in business model.

While still selling the popular the Slurpees ,7-Eleven has recently introduced a new line selling healthy food including sandwiches, juices and salads. The prices of the beverages are rather expensive. The new juice with a Tony Horton Kitchen label costs $4.99 for 16-ounce. The reason of 7-Eleven adding a new line is probably what 7-Eleven spokesman Margaret Chabris reveals. She says that costumers requests for healthy food were the second to the new Slurpees. 

Being health conscious and the willingness to spend more money on healthier food have become two social trends. In response to that, food companies start to sell food products with less fats and calories. For instance, McDonald which only used to sell trash foods such as hamburgers and fries now adds McDonald breakfast combo that includes orange juice and hamburgers which contains fewer calories. The food companies try to enter market as soon as possible so that their competitors will not increase their market shares by attracting new costumers with healthy food products. What 7-Eleven is doing right now also follows this pattern.  7-Eleven which used to sell food products that are not related to healthy food now begins to introducing a new healthy food line in response to costumers appeals. The article states that more than 100 7-Eleven stores in Log Angeles are putting healthy food on the stock. This indicates 7-Eleven is testing how the healthy food line goes. The reason why 7-Eleven picks Los Angeles is probably because there is a large portion of people who requested healthy food products live in Los Angeles.

Is that really beef in your lasagna?

Aldi, a global supermarket with over 9000 stores in the world, has confirmed there is a 30% to 100% addition of horse meat in beef products. Aldi says the French supplier Comigel is the one to blame yet Comigel shifts the blame to its supplier Spanghero for supplying them horse meat as suppose to beef. Other than the dispute about which is the one to blame, there is also a hygiene issue for the affected beef that the beef potentially contains phenylbutazone which can cause a serious blood disorder. Cecilia comments on the business ethic that is involved in this event. She thinks Aldi’s dishonesty to its costumers and the denial of responsibility exerts a significant negative impact on the company’s reputation. 

From my point of view, I think all the companies in this event are responsible for supplying affected beef and their denial of responsibility doesn’t help in redeeming their reputation. According to Freeman’s stakeholder theory, manager has the responsibility to figure out how the interests of all the stakeholders, the company, costumers, suppliers and community, come together. In this affected beef case, all of the companies violate the business ethics by insulting companies and costumers’ interests. Even though mixing beef with horse meat can lower the costs, but the trust between costumers and company as well as between companies are completely destroyed. Costumers feel betrayed by risking their life buying beef product that can serious health issue while companies will choose other suppliers. As a result of that, all these companies will suffer significant financial and trust crisis.

http://gadgets.ndtv.com/mobiles/news/25000-xiaomi-mi-3-phones-to-be-offered-to-flipkart-customers-who-couldnt-buy-earlier-601852

Xiaomi India, a smartphone company which headquarter is located in China, just announced there would be 25,000 available for consumers who repeatedly attempted to purchase Xiaomi Mi3 at least five times in the previous flash sales.  For these consumers, Xiaomi Vice President Hugo Barra introduced a new system of sale called the Xiaomi Priority Pass. This new system will automatically make Xiaomi Mi3 available to purchase on the consumers ‘s cart. If the consumer doesn’t purchase in a given period of time, then the device will be offered to the next batch of consumers.  Xiaomi also announced more than 300,000 Mi phones were sold in first two months.

Xiaomi is a Chinese domestic smartphone company that provides good quality smartphones in a relatively low price.  Xiaomi’s latest smartphone Xiaomi Mi4 costs about $429. Other than Mi series, Redmi series is for consumers willing to spent less money on smartphones. In particular, Redmi Note only cost about $150 in China. This is clearly a example of Cost Leadership Strategy by setting a low price while maintain a good quality to win more market shares.

Other than Cost Leadership, Xiaomi also gives consumers a popular impression by using flash sales. Since there are only a certain amount of Xiaomi that are available online and online it is the only way to buy them, it means that there are only a few consumers can successfully purchase at a time. Thanks to Xiaomi’s Cost Leadership Strategy,  60,000 Redmi 1S went out of stock in 13.9 seconds, given by the Xiaomi website. Xiaomi successfully gives consumers who successfully purchase Xiaomi a sense of pride, just like what iPhone consumers who try to buy the latest version of iPhone as soon as it is released.