Fighting brand rip-off

Fighting brand rip-off

This blog is based on the article ‘fighting brand rip-off. It is incredibly hard to protect intellectual property in certain parts of the world. China, where foreign direct investment flows in apparently has very weak laws protecting intellectual property.

New balance have had set back because of outsourcing their products to subcontractors, overseas in China, which is the major interest in the analysis of the article with Barron’s frame work.

According to me intellectual property has always been a non-market issue which does not get much attention in some countries.

Issues- The issue according too the article is based on intellectual property rights in China, which is based on a case started in 1999 between Boston based company wanted to terminate the sub contract with Horace chang because of unauthorized production of New balance shoes. New balance was not able to terminate the contract inspite of illegal practices by the sub contractors, apparently Chinese government have always been supporting the local company Horace chang.

Moreover, the products that were produced illegally were exported to countries like Taiwan, Honking, Italy, and Germany. Etc.

Another alarming issues was that New balance was approached by the jury in the province of high court in Guandong, asked for 300000 $ to have a verdict on the case. The price eventually went down to 100000 and then to 50000 $. This is a major issue that will question the credibility of Chinese jurisdiction.

Interest: The interest groups regarding the issue would be new balance, Horace change and other companies that have outsourced its work to subcontractors in china and have been facing brand rip-offs.

Institution : Another non-market element that would be concerned about these acts would be governtment of china. Since China have been booming because of foreign direct investment these unstable and corrupted laws and judiciary system would pose a major threat. Another entity without financial interest would be the Shenzhen court that was involved in this issue because the case was first filed in this court.

Information: Since the case has been running since 1999, new balance rip-off case has gained enough publicity through media. The case have been published in www.fortune.com with more details, newspapers etc.

Kosher phones – moving away from earthly pleasures

Kosher phone which is a subsidiary of Motorola is set to capture one- million strong ultra orthodox Jewish communities. The mobiles they manufacture do not have internet access, SMS text services and video and voice mail application because the orthodox Jewish community believes that these latest features in the mobile phones will “provide the opportunity to access corrupting influences”. Detailed analysis of this article will be done using the Barney’s resources based view.

Physical capital: Kosher phone is an appropriate product designed to attract the Jewish community which is highly orthodox. The geographical location the company chose to market this product has enhanced the company sales. Imagine the same kosher phones were offered in the US market! It would be a big flop because the customers with in that area share a different view towards mobile phones. Adding to that the company will be extremely successful if they were to launch this product in the Middle Eastern areas where people are reserved and conservative like the Jews.

Question of value: Indeed the Kosher phones have been successful in adding value to its customers which the religion insists on. Rabbis communities have banned televisions, internet etc for whom kosher phones are blessings. I believe that kosher phones have been successful in adding unique value to the community by removing features that might lead them towards corrupting influences.

Question of Rareness: Kosher phones qualify to be a kind of its own; there is no doubt about it. I am not aware of any phones in this world that does not have SMS. The key factor in koshers success is identifying the need of the community and being able o offer a product that exactly meets the religious views. Moreover, these phones carry a stamp that signifies approval of rabbinical authorities that influences the Jewish community. The stamp makes kosher phones different from its competitors and appeals to the conservative ultra orthodox community.

Question of imitability: koshers close competitors will not find it hard to imitate their phones because it does not involve any high level technical involvement, indeed kosher mobile phones does not feature any “extravagant” features. However, it is uncertain weather a close competitor will get the stamps signifying the approval of rabbinical authorities. On the other hand kosher phones inevitably will have first mover advantage in the market which will be hard for any competitors to overcome.

Starbucks and popcorn

Starbucks and popcorn

Coffee and popcorn? Yes it is Starbucks! Starbucks which is rated as one of the most innovative companies in the world (ranked by business week online) has done it again. Starbucks have restructured the coffee business in to a lifestyle brand and have managed to develop a strong consumer affinity towards the brand by watching the customers closely and providing them with excitement and entertainment. Further detailed analysis of this article will be done using Hamel’s framework.

Core strategy

Starbucks have moved ahead in promoting entertainment by selling music from prominent artists like Prince and Ray charles. Company’s main strategy is to sell entertainment with a kick of coffee. According to this article Starbucks is promoting a new movie ‘Akeelah and the bee’ and is hoping to spread its influence in the silver screen aswell. Ken Lombard the president of Starbucks entertainment believes that “movies are a very important part of our entertainment strategy”. This proves the keen interest Starbucks have in spreading its fame through the movie industry.

Market Scope

Promotion for the movie Akeelah is believed to benefit Starbucks by promoting it among the up scale crowd to whom Starbucks have always targeted. However, many analysts believe that constant promotion of movies involves risk of alienating its valuable customers. Moreover if Starbucks get involved in movie promotion their image as a high end coffee seller will be transformed to” a place where the customers are having a new movie showed down through their throats”.

Basis of differentiation

Starbucks have been successful in creating a strong consumer affinity towards its products by providing them with entertainment and unique ambience. Adding to that unlike any other coffee chains Starbucks have been promoting movie Akeelah through its chains by spelling-bee, chairs reserved for local spelling champion, scrabble etc. Movie Akeelah which is a small budget film targets audience that is compatible with the Starbucks audience.

Retailing with "Convenience"

Dubai have been developing immensely to greater hieghts, so is its retailing industry. According to an official website UAE's retailing industry is on the way of changing the economy in the coming four to five years. Grocery retailing plays a major role in the process where the "industry growth rate"(porter) is expected to grow six to ten percent a year.

Like any other retailer, AL maya is also on the run to grab a major share in the industry by opening up convenience shops. According to the Chief executive of AL maya group Deepak pagarani ,there are greater oppurtunities for convenience shops because of the growing fuel price and traffic conditions in UAE. Lals have identified a major "market scope" (barney) and have decided to capitalise on the oppurtunity, the convenience shops will be similar to the Tesco stores in the UK. I believe maya group is "imitating" the Tesco's strategy that have made them different from other gianretailers in the UK.

AL maya will benefit from the idea of convenience shops of 3000 sq ft, they will require less capital (capital requiremnet)to establish such stores compared to huge hypermarkets which will need tens of millions of investment. I believe this change in strategy will shape a completely different "business mission" for the grocery retailing department of ALmaya.

MBA - Shortcut to Jobs?

Almost all students who passes out of undergraduate school have their plans set to join a graduate school. Wether he or she is a business student or a student who has any other concentration in undergraduate school for eg. Engineering, Masscom . According to the article there are arround 1.2 million graduate students seeking jobs.

Even though the resources are immensely available, i believe the employers are looking for 'rare' resources that provides a competetive edge to the company that hires them which is supported by barneys frame work. Rareness in the resources (graduate students) is assesed by the ability of the graduate students and the schools where they graduate from.

Eventually after the fresh graduates are hired, they should be able to provide 'value" to the company which will encourge the employers to hire fresh graduates. The business shools nowadays for eg Babson college has been improving the level the education to fulfill the employers thirst for valuable and rare resources.

"Local" OR "Danish"

Is it Local or Danish products that are sold in the retail supermarkets in the middle east? The world wide protest aginst cartoons satirising the Prophet Mohammed is costing SADAFCO that manufactures Dairy products using raw materials from local areas and Newzealand.
The followers of Islam have boycotted danish products and local retailers (Panda supermaket ) have come under pressure and removed Danish products from the shelves. These acts have proven that customers can create huge impact in the market and is clearly highlighting the "buying power" . Since the customers have stopped buying their proucts the companise are loosing huge amount of money.
Panda Supermarket removed the Danish products from their shelve to show support to the locals who are outraged at the cartoons. This was one of the core processes the supermarket did to show the support to the locals which added value to the supermarket.
Customer interface was proved as the main strength of the panda supermarket. the company managed to show immense support to the public by removing the products from the shelves and publishing the pamphlets that says "cancelled"
However the SADAFCO is not yet been able to establish this support to the customers. They have not been able to change the perception the locals have to wards the products that they produce, which is because the name of the product which associate it with Denmark.

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