A requirement of this course was that we keep a weekly blog to record our thoughts through out this learning process. Obviously the blogs were meant to be more than a simple recording of the things we learned in class. I think the blogs were meant document our internal processes and by reading my classmate’s blogs, I have come to understand that the frustrations I have faced were in fact felt by all.
Blog Entries with Comments;
Global Business (permalink)
Created on Wednesday, 05/15/2013 12:44 AM by Larry Strong
One of the more fruitful learning experiences of this course was coprehending the meaning of global business. A cold definition of global business would be any enterprise that engages in transaction across international borders. However, I have learned that there is a much deeper meaning to the idea of the global business. A true global business is an active participant in global commerce. Not simply purchasing supplies and selling products but also acting responsibly at home and abroad.
The recent Bangladesh garment factory collapse was a chilling reminder to me of the social accountability that falls upon a global business. Cheap labor, profits and loss cannot be the only considerations when an entrepreneur embarks upon the task of build his/her business. The human capital must also be considered.
Some of the world’s largest fashion retailers had contracts at the factory where 1,127 workers toiled and died. It is only after the fact that these companies have begun an initiative to ensure human rights are protected with regard to manufacturing their brands. As entrepreneurship grows across the world, it will become more important for founders to understand what the true meaning of global business is. I think that our course work has exposed us to that knowledge.
Being in the retail industry, I am sensitive to what happened in Bangladesh, and knew too well the backlash that will happen. Disney already pulled their contracts out in that area even before this tragedy happened. But it's not just clothes - remember the controversy about Apple and FoxCon factory in China? In today's world, it is important to act and think like a global citizen. And a big part of being a good citizen is being aware of your civic duties and responsibilities.
What happened in Bangladesh reminded us on what happened in the Triangle Shirtwaist Factory fire in New York City over a century ago (1911). 146 garment workers died in that fire, mostly Jewish and Italian immigrants. That fire propmpted safety standards to be improved, and ushered the growth of the International Ladies Garment Worker's Union. What happened in Bangladesh is putting the same pressure on American retailers to join a landmark plan to improve factory safety over there (NYT, May 14). As we've seen happen in China, this awareness among consumers world wide, especially here in the States have spurred not only the Made in America sentiment, but also consumer pressures on retailers to have a social conscience.
Greenhouse, S. "As Firms Line Up on Factories...", New York Times, May 14, 2013
Larry: I agree with you. But everybody knows, or should know, that our cheap products come at a price. A price that is paid by others. And yet Walmart is always packed.
I've done a lot of research on the IPO process and have learned plenty. This was always a mysterious subject to me. I recall reading stories about companies being overvalued, and stock underperforming. I’ve always wondered how stocks were valued and why some companies never live up to the hype. Why do some companies go public and others do not?
My research has revealed that some companies go public for reasons other than raising capital.
The IPO is one way founders and original investors can exit the company.
Some companies like Facebook go public for the prestige and to reward employees who own stock.
The underwriting process was another eye-opening bit of information. Companies usually consults with an investment banks to determine how best to structure the offering and how it should be distributed. Underwriting banks get huge fees for their services and there is perhaps a good reason why some companies are overvalued when their IPOs are launched.
I don't think the underwriting fees are the reason why some stocks are overvalued at their IPO (case in point, Facebook). I am pretty sure those services can be deducted as expense. Just like you, I've learned a lot about IPO's as well. The IPO stock price is more a combination of the company's valuation from their actual balance sheets, plans for expansion and how the public perceives their future (the buyers of those stocks). That perception is fueled by analysts' ratings. But one thing for sure, IPO's can be a lengthy process, and it can be the soultion for one of many things for the founders of the company, including an exit strategy.
I like how you partnered with a company that shares the same values as you and can benefit in your success as a start up.
So just as we were staring to feel good about the finishing touches on our business plan, the financials present a bigger challenge. We began with a consultation to devide up the documentation. I took the expenses which I loved doing because it presented me with the opportunity to do reaserch and gather real numbers. I made many calls this week to vendors and suppliers. I had an 45 minute long conversation with a woman at a cosmetics manufacturing firm. She gave me a lot of eye-opening details about the process of developing cosmetics as well as great information about the business. I will be taking this new information and the Professors notes to make further improvements to our business plan.
This week was challenging to all of us. Runakay Chocolate had several conference calls to address what we thought would be the right amounts for everything. It is all those little expenses that you tend to forget about that are really important. It was an interesting week. I wish we would have had another week to prepare.
I had a feeling that many of us were in the same boat. I don't think anyone finds this stuff easy.
You are on target when you state that writing a business plan is a lot more complex than I thought. I was sitting here thinking what it would have been like writing this plan without the internet. We would have had to spend hours in the library. There is so much research involved in writing a business plan. I have to say, I am so glad I took this course. It is like the culmination of everything I have learned.
Continued success with developing what sounds like a wonderful product.
Here is another interesting article that relates to one of the core components of this class. "How McDonald's Toppled Starbucks From The Social Top Spot" tells how MickyD's rebranded it's self as a social business.
Very simple measures taken by the company, have a read!
Transparency is important in every industry. McDonalds was very smart. I liked how they sey up the website in Canada to take questions. Consumers want to know that a company takes their concerns seriously. Thanks for the article.
The challenge facing McDonald is not a shift to a social business but rather a shift of business model altogether. There is a healthy nation movement led by government because they are bearing the cost of unhealthy diet perptuated by the fast food industry, they need to shift their entire business model or in ten or twenty years from now, they will be put out of business.
Well, it has been a very exhausting week for us. We obviously lost a team member and had to make up for the loss. I want to thank Tremayne Cunningham for stepping in and doing a fantastic job. She came through for the team and we were able to have a complete first draft of our business plan.
I want to also thank Kevin Nembhard for his great organizational skills. Once again, he really came through for the team. Both of my classmates are very easy to work with and BY FAR this is the best group experience I have ever had at SPS.
We began the week with a group meeting on GoToMeeting, which Kevin set up for us. We made a game plan and distributed the work among us. I handled the abstract material and marketing due to the fact it was my concept. There was a lot of research involved with our effort. We used many online resources and I was able to draw upon my various courses here at SPS. I hope our effort is reflected in the work.
I am very excited to move forward with everything from the coming week. We still need to refine the business plan and add more financial data, cash flow projections, etc.
Onward and upward!
Great team work is important, and i share your sentiment about you handling the abstract and marketing because it was your idea, that way can set the business model and strategic direction for it.
Structure of a Global Business
Operating a global enterprise means that owners and managers need not have a physical presence in another country. However, business is able to proceed as though one does have one or more foreign subsidiaries. Any business that supplies products and services to customers abroad is operating in a global environment. Goods and supplies imported from foreign sources is another indicator of global operations.
Numerous factors must be considered when a business goes global. International trade is highly regulated by a great many laws, in addition individual countries have their own laws concerning how foreign business can be conducted within their borders. For example, The World Trade Organization (WTO) is an international organization that sets rules of trade between nations. There are a number of treaties and agreements which have been signed by the bulk the worlds nations. The goal of the WTO is to help firms conduct business across international borders.
What’s driving this trend toward global business? Two forces seem to be fueling the push toward global business, technology such as the Internet and globalization.1
Globalization is defined as the trend toward grater economic, cultural, political and technological interdependence among institutions and economies.2
Some nations have comparative advantage when it comes to cheap labor, or manufacturing. A business in one country will tend to seek out less expensive options for production of goods. As poorer nation grow their economies due to an increase in job, their population increase demand for products and services from other nations.
Any business that operates globally must also be aware of cultural sensibilities of the global market.
Example, McDonald's has many restaurants throughout the world and is very successful at catering to individual markets. Beef hamburgers are very popular in the U.S. but in India cows are considered a sacred animal so chicken and lamb has replaced beef in that market.3
2. International Business, 6/e by Kenneth L. Wild John J. Wild
By now I'm sure everyone’s heard about the Applebee’s waitress who posted the customer receipt on Redit. It displayed a handwritten not by a pastor who had left a terse message about not wanting to leave an 18% gratuity.
Well it seems the management at Applebee’s had a bit of a social media meltdown over the incident. As I read this blog piece, it reminded me of how firms today face a huge challenge of not inciting backlash via social media. The internet has brought consumers so close to the attention of corporate TMTs. No comment or sentiment goes unnoticed and in the case unresponded to.
Have a read!
Talk about customer engagement, though not in a positive way. What companies need to know is that when dealing with social media, a quick response (within 24 hours) to quell the controvery is needed. Another example is the "Subway" controversy, wherein a man from Australia measured his subway sandwich, and posted on a social media outlet that he got cheated! I have to see that for about two days whenever I log into my yahoo account before Subway replied. Companies also need to be clear about their social media policies and make sure their employees adher to those policies. It is sad that the waitress lost her job, but from a management point of view, she violated Applebee's privacy policies. On the other hand, if the other Applebee's picture, wherein a customer's note of good service did not cause that employee to be fired, then the fired waitress may have a case to get her job back. Applebee needs to be consistent.
Social media is wonderful when used for the right purposes. This waitress went way beyond the scope of her job and paid the price. I have heard of people who were denied jobs based on the postings on their social media pages. I am sure Applebee's employee manual did not touch on this issue. You see how powerful social media can be.
That is a great article. Social media PR nightmares could also be caused by pranksters putting up false information on the internet about your business. Take into account McDonalds when they had to explain that a racist letter was put on one of their doors by some troublemakers. The outrage grew so big that their PR team had to be called in to put out the fire:
What are your expectations for this course and what would you like to accomplish this semester?
As I understand it, the focus of this course will be to use simulations, research, and group exercises as a means to build experience and develop the skills it takes to create a startup enterprise. I have a broad range of experience in the field of media and it has always been my dream to star my own company, to exploit my talent, knowledge, and experiences.
I have many ideas that seem to align well with the concepts expressed in the Social Business Design Whitepaper. The current world-wide economic crisis has caused many individuals to begin new startup companies, so there is a lot of competition for seed money. It’s not just about having a good idea anymore, startup have to be leaner, meaner, and smarter. Those who can navigate and exploit technology and social media will have an edge.
My ideas would build upon the tools of social connectivity. Due to my background in social media, I have seen firsthand how success can be driven by it. I very am eager to develop my ideas further in this class.
How do you define a global business?
A global business is can be described as a firm which is connected to suppliers and customers regardless of international boundaries. Technology allows the global business to reach markets in remote locations and to source supplies from a global market. There are many tools for communication and collaboration that global firm can and do utilize in order to create dual channel dialogue, E-mail and instant messaging, File sharing, Wikis, and social networking come to mind.
I also feel that a truly global business is one that builds goodwill, social capital, and is committed to sustainability.
What is social business?
A social business builds relationships with employees, customers and suppliers. This is also achieved via technology. I think that a social enterprise would have many of its employees working in virtual teams, which has proven to be an efficient way to increase productivity. Such a business has a large internet presence and is active in social networking, i.e. Twitter, RSS, Facebbook, Pinterest.
How can social business help an organization to connect both internal and external stakeholders?
Firms modeled on the concept of social business can use a number of tools that can help the firm connect with employees, customers, and partners. Knowledge management systems are a good way to help employees share information internally and collaborate on projects. Social media outlets like Facebook, allows customers let firms know who they are and what they desire. Supply chains can successfully be managed via the internet, using any number of software solutions.
How do you think that Social Business will change the current global business landscape?
E-commerce is almost ubiquitous in the business world today. If you don’t have an online presence, then you might as well not exist at all. The internet has brought consumers much closer to producers and vice versa so businesses of the future will have to focus on two main areas, sustainability and building social capital through connectivity.
Larry, your points are right on point. Businesses can try to exist today without incorporating social networking, but they will not last long. Having a global presence will take money, technology and dedicated people.
Thanks Kim! Well said!
You did a great job recognizing how businesses need to apply social business methods. I will talk about this later on in the course but its amazing how many companies know that they have to use social media but misuse it all the time. Also, companies feel that just making a social media account entitles them to an automatic following. I read this in a lot of start up business plans, that the company is going to use social media as a way to advertise but never details how to do it. Throughout this course we will discuss how to use social media properly and experience how hard it is for a start up to use.