Monthly Archives: November 2015

In response to Ken Favaro’s blog

Ken pointed out that an enterprise’s strategies must be rooted in a company’s culture. By quoting examples of Southwest Airline Company and General Electric Company, Ken expressed his opinions that it was essential to maintain cultural coherence when determining corporate strategies. In short, Ken believed that a company’s culture was as important as its strategies. [1]

However, I think a company’s culture establishment is more important than strategy. Take Zappos Company as an example. Zappos does not have many extraordinary strategies regarding its operation. When talking about Zappos, people hardly consider its customer services and sales patterns. Instead, lots of people believe that Zappos’ organizational culture has improved Zappos’ quality of service and its business operation. According to Mitchell (2000) [2], corporate culture refers to the shared values, attitudes, standards and beliefs that characterize members of an organization and define its nature. Many scholars believe that corporate culture is rooted in an organization’s goals, strategies and structure. Zappos’ corporate culture with its own unique characteristics is the environmental keystone for maintaining the highest levels of employee satisfaction, customer loyalty and profitability. Moreover, a company’s successful culture can become the driving force for its productivity and business operation, determining its various company strategies and their applications in practices. Hence, Zappos’ marketing and management strategies cannot be successful if Zappos has not established its prosperous corporate culture as the foundation for its business development.

Organizational culture is the spirit of a company, while strategies are toolkits that boost the economy of a corporation. Therefore, a company’s culture is the keystone for a company development and is more important than a company’s strategies.

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http://www.creativecorporateculture.com/tag/article/

reference:

  1. http://www.strategy-business.com/blog/Strategy-or-Culture-Which-Is-More-Important?gko=26c64
  2. Mitchell, C. 2000. International Business Culture. Shanghai: Shanghai Foreign Language Education Press.

 

In response toQI Ding’s blog:

Qi mentioned that Amazon would stop selling Apple TV and Google Chromecast recently because these devices could not work with Prime Video, Amazon’s in-house streaming video service. Qi also cited opinions of an analyst at Edison Investment Research who disagreed with the approach of Amazon. However, Qi personally agreed with the action of Amazon, for she was convinced that the new approach of Amazon could prevent its competitors from making benefits, and would make Amazon more competitive.[1]

Nevertheless, I doubt the viewpoint of Qi. I think the new approach can neither benefit Amazon nor weaken its competitors. On the opposite, I feel that the new approach may even decrease the sales volume of Amazon. Amazon is just a platform that buyers and sellers can trade online. Although Amazon develops and sells its own products, such as Prime Video and fire phone, which did not achieve success in sales in the long run. Ironically, Amazon gains a lot of benefits from the rent paid by those sellers who sell Apple TV and Google Chromecast every year. Furthermore, many customers may dissatisfy with the Amazon’s new approach. As a consequence, both Amazon service quality and its customer quantity will go down.

Therefore, I strongly disagree with the approach of Amazon, and suggest that Amazon should allow various kinds of goods be sold on its websites.

http://www.talkandroid.com/213676-amazon-prime-instant-video-might-finally-come-to-android-devices/

http://www.talkandroid.com/213676-amazon-prime-instant-video-might-finally-come-to-android-devices/

Reference:

  1. https://blogs.ubc.ca/taylordingqi/2015/10/04/competition-strategy-amazon-stop-selling-apple-tv-and-google-chromecast/

In response to Marvin’s blog

Marvin cited a lot of statistics about car sales. The data in this blog illustrated the importance that Tesla should develop automobile products for female drivers. Marvin also described how Tesla managed to design the New Model X SUV for them, which indicated that Tesla was a company who really cared about customer segments. After that, Marvin applied the theory ‘customer segment’, which is one of the building blocks of the business model canvas to explain how Tesla has made a sound choice.[1]

However, I think Marvin’s arguments in this blog are not comprehensive and persuasive. Marvin should accomplish the business model canvas of the New Model X SUV and explain how each building block of the business model canvas works. Hence, the reasons why Marvin believes that Tesla has done a fantastic job can be more scientific. In addition, Marvin should also apply Porter’s differentiation strategy [2] to illuminate why the theory of ‘customer segment’ is a significant building block of the business model canvas. Porter’s generic strategy [2] is a world famous strategy and has been employed by many enterprises in the world, although different companies may prefer different types of business model canvas.

Marvin spent much time and effort on collecting statistics about recent car sales and explained the rationality that Tesla should develop the New Model X SUV, but failed to integrate with persuasive explanations. Overall, it is an interesting blog with interesting data.

http://www.businessinsider.com/we-drove-teslas-new-model-x-suv-2015-9

http://www.businessinsider.com/we-drove-teslas-new-model-x-suv-2015-9

Reference

  1. https://blogs.ubc.ca/meharbanbains/2015/10/04/teslas-new-model-x-suv-targets-women/
  2. Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and C New York: Free Press.

Disruptive Innovation of Xiaomi

xiaomi

http://www.businesskorea.co.kr/english/news/ict/7500-xiaomi%E2%80%99s-challenges-xiaomi-mount-serious-challenge-samsung-apple-100000-won-tablet

Xiaomi is the 4th largest smartphone maker in the world, which is also the first electronic company who has made achievements through online sales. By adopting the disruptive innovation idea (Clayton M. Christensen), Xiaomi has been developing its markets rapidly since it pushed out its first smartphone in 2011.

In the past, smartphone companies, such as Nokia and Motorola, had their products sold traditionally in electronic specialty stores. Though Google tried to sell its first smartphone Nexus One on internet in 2010, due to quality problems, it suffered great losses. Nevertheless, Xiaomi introduced its first smartphone with features of cheap price and high quality on internet and achieved huge success. According to Clayton, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances [1]. In this case, Xiaomi created a new market by offering online sale services, and has become one of the largest smartphone companies in the world.

However, I personally doubt the sustainability of current Xiaomi’s business mode. With the development of network marketing, more and more smartphone companies have copied the business mode of Xiaomi, starting selling their products on the internet with even lower prices and more functions. Consequently, Xiaomi has lost its advantages because its marketing strategy has been applied by many other smartphone companies. Besides, Xiaomi does not produce hardware itself, hence, it cannot launch revolutionary new products independently.

To conclude, although disruptive innovation brings a company benefits at the beginning, the disruptive innovated idea may be referred and utilized by other companies quickly. In my opinion, only sustaining innovation ensures constancy of a company.

Reference

  1. Christensen, C. M. (1997). The Innovator’s Dilemma. Harvard Business Review Press