Apple and China - Fair?

http://online.wsj.com/article/SB10001424127887323611604578398250886072728.html?KEYWORDS=apple+china

Apple

Treating China customers unfairly?

Getting in with China mobile

Getting in the lower end handset

1.      What external factors that force Apple to apologize to Chinese consumers?

The political and legal factors were one of the major external factors that forced Apple to apologize.  The China State media acts as a political influence on the Apple and the people of China.  It has access to mass communication, potentially having the ability to passing only negative information to Apples potential customers.   Also, it was stated in the article, the changes to the warranty are designed to correspond to the Chinese law, which is also a political factor.

2.      How will this issue impact Apple’s market share in China? Do you think it is good time for other companies, like Samsung, Nokia or Lenovo, to swallow Apple’s territory?

I don’t think this will impact Apples share, since the CEO, Tim Cook, offered an apology, I would assume this will soon be water under the bridge, even possibly add a positive light to Apple as they show their awareness and respect to the China market and customers.

3.      Do you think that it is a wise choice for Apple to make this apology?

Yes, I don’t think Apple had much of a choice if they wanted to continue their success in the China market.  The market is huge just by sheer numbers, it’s a winning playing field.

4.      What things will Apple loss if Time Cook didn’t issue his apology letter? 

Apple could potentially lose access to the market if they are not willing to modify their warranty to the Chinese law.

Ethical Business

Ethical Business

Environmentally produced products can provide higher profit margins if the companies environmental practices are marketed in a way that makes customers aware of them (and aware of their competitors lack of ethics).  Do you believe this is true, and why?

It all depends; in some cases the cost for following environmental practices could be enormous.   Much of the cost/benefit analysis is going to depend on the industry and marginal cost that will be incurred as its production becomes more environmentally friendly

As ethical business becomes more and more widespread, do you think this advantage will disappear?

No, I believe there will always be the ethical business and the unethical business, which will always produce a gap in the price premium ethical companies can charge.

What was particularly interesting to me was the question "were customers will to pay more for a good that was 100% ethically produced vs. 50% or 25% ethically produced?"  Is this really all about marketing and less about ethical management?  What is the impact of data like this?  Could a company choose to only use 25% ethical production, because investing to get to 50% does not provide enough payback?

This relates back to my comment on the first question, it is hard to analysis this concept without knowing exactly how much the additional cost is going to be for each increase in ethical behavior. 

Also, of another thought that comes to mind when reading this article is how the consumers behavior fluctuates and its relationship to how the overall economy is doing.  As a consumer a few years ago, the economy had a gloomy outlook, high unemployment, etc. at this point I would assume consumers will fall more towards the median regardless of how ethical the company was then if the economy was in a upswing. 

RIM

RIM 

Do you think rim is too late to implementing this strategy?

No, but I do think it will be a difficult move.  It’s hard to associated RIM-Blackberry with anything other than business phones.  I think going after a different market is their best chance for survival, it will be interesting to see how they are able to rebrand under the new umbrella.

Can RIM succeed by maintaining only portion of market share?

Yes, as long as they are able to gain customers and rise to the top in that segment of cell phones, they will be able to succeed.  One concern that comes to mind though is how large is that segment?  I question if there is many people out there looking for less, when the common theme has dominated for better technology, speed, features, etc.

Do you think that relying on services revenue streams is a viable option for RIM in the future?  Will potential customers (and carriers) continue their willingness to pay the service fees?

It is a good idea, but it is hard to analysis exactly how they plan on continuing the services revenue stream.  They first need to sure they are able sell the product, if they have no customers, there will be no services to sell.

K-Cups

K-Cups

Responses to the article:

The biggest threat I believe will be other single serving coffee makers that can be purchased.  The machine itself only last so long, it is a large purchase but not large enough to stop customers from looking around to upgrade or replace their coffee maker every few years.  Of one that comes to mind is Starbucks single serving machine.  If I had not just purchased my Keurig, that would have been my coffee maker of choice.  So in a few years when I do opt to purchase a new one, it will be interesting to see what options are available in the single serving coffee maker market.

I do believe there is room for improvement for the design of the K-Cup. They tend to be too large and take up too much space.  I don’t really appreciate having a spindle of single coffee k cups on my counter, it is too bulky and just adds to additional clutter.  Even stored in a cabinet their circle shape does not have many advantages for stacking and storing.  So, yes, I do think the design will be “gone with the wind”

What model do they follow?  They follow the I/O perspective on value creation.   The environment of the single coffee maker/product is dominated by the influence of the external environment.  

Protecting themselves from competitors:

I think they have started to do this already, but my suggest would be to offer a couple of models, including one on the lower end that generic models wouldn’t be able to price cut.  If they are able to provide a model that lures consumers into their brand, they could get them hooked and when they go to upgrade or replace the product they have opened the door for the customer to stick with their brand and a potential upgrade to one of their standard or deluxe machines.

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