Essay on "Business Models Have Be Changing"

Essay 8 pages (2509 words) Sources: 8

[EXCERPT] . . . .

business models have be changing. To understand what is happening we will look at: the impact of globalization, product quality, the effect of NAFTA and Chinese negotiating techniques. These different elements are important, because they will provide specific insights about how businesses must continue to adapt with the transformations that are taking place.

Explain the concept of the globalization-online era and its impact on marketing research firms.

The globalization online era is when there has been a transformation in the way that consumers are entertained and informed. What is happening is technology has improved so much, that many people are now conducting more of their everyday activities online. A good example of this can be seen with the fact that Americans spend 16% of their time on Facebook. As they are using this web site, to effectively reach out to friends / family and to be entertained. This is significant, because it is showing how the changes in technology are transforming the way that everyone is living their lives. ("Time Spent on Face Book," 2011)

Globalization is when there is focus on reducing tariffs and trade barriers, to help make the economy more competitive. Over the course of time, this allows a country to be able to adjust to changes in the world marketplace by: specializing in certain areas where they are most productive. When this is combined with the improvements in online technology, it means that a shift is occurring within society itself. As people, are more open to ideas and they are changing how they learn about them. This is when there is transformation is the way that everyone is living their daily lives. Once this occurs, is the point that there will be a change in how the public will see different events and their underlying meanings associated with them.

For marketers, these two factors have forced them to change how they are reaching out to consumers. This is accomplished by focusing on specific areas that will help to create a lot of attention about: the products or services of the organization. Once this occurs, is when they can be able to standout in minds of consumers using the Internet and ideas of globalization.

A good example of this can be seen with the Chevy Volt. What happened was the company started using a number of innovative strategies to be able to highlight the benefits of the car over that of foreign competitors (i.e. Toyota and Honda). This was accomplished through websites such as You Tube. As, they were showing how: the charging options on the car could be adjusted from your I Phone and the way it was powered (by an electric motor for short distances). To highlight these features, the company produced a series of videos that illustrated the benefits of the car in comparison with other hybrids on the market. This helped General Motors to be able to create a buzz about the vehicle, which played a role in GM's turn around since exiting bankruptcy. (Zimmerman, 2011)

What this is showing, is how the Internet is playing a part in promoting different products and services to consumers. This is accomplished through highlighting the benefits in different videos that are posted on websites such as You Tube. While at the same time, it involves creating content that is geared towards specific audiences in the form of a blog. This allows marketers to be able to promote their products and services that the company has to offer to specific segments. Once this takes place, is when its popularity will increase and they will reach out to a large demographic of customers. This is the point that video and the blog could receive massive amounts of attention in a short period of time (the viral effect). (Zimmerman, 2011)

You don't inspect quality into a product; you have to build it in. Discuss the implications of this statement.

The implications of not inspecting quality, is that there could be major issues surrounding safety and if the product will meet company standards. In the short-term, this is an attempt by executives to save money. However, over longer periods of time this could create situations where there are design flaws that could inflict physical harm on consumers (who are using the product). Once this takes place, it means that the image of the organization will be damaged by these events. This is the point that there is the realistic possibility that the company could lose customers and market share based upon quality issues. (Hua, 2011) (Bagh, 2011)

At the same time, having to build into the product to ensure quality, is creating problems for the staff and engineers. What is happening with these kinds of situations; is that each unit requires matching the exact specification from another manufacturer with our company. This is problematic, because the inferior design means that engineers will have to troubleshoot flaws. Then, during the process of making any kind of modifications, employees must be aware of the steps they are following. (Hua, 2011) (Bagh, 2011)

These different elements are troubling, because they are illustrating how not inspecting the quality of the product could result in inferior designs. Once this takes place, it means that the company must waste time, money and labor in trying to deal with obvious product design issues. Over the course of time, this could cause the company to see a decrease in productivity in trying to rectify these issues. If this kind of a situation is allowed to continue, it could have an adverse impact on the profit margins of the firm and their brand image. As a result, the negative implications of this approach should be taken into account in comparison with the limited short-term benefits that will be received from this kind of strategy. (Hua, 2011) (Bagh, 2011)

However, it is also important to note that this kind of approach could yield long-term benefits for the organization. What would happen is the obvious design flaw issues in the product, could be rectified by creating a process that will have built in modifications. This will directly address any kind of product safety and quality issues. While at the same time, it is allowing the firm to lower their costs and increase profit margins. This is significant, because it illustrating how this strategy could offer the company major benefits (if they have pre-determined conditions in place during the process). (Hua, 2011) (Bagh, 2011)

As a result, executives must be aware of possible quality issues from the uninspected merchandise. This will have an impact on the outcome by ensuring that company can reduce the time and cost of making any kind of modifications. If this kind of focus can be taken, it will help the firm to see a reduction in their production costs and increase profit margins. However, if managers do not have any kind of effective strategy in place, they more than likely will lose time and money. This could have an impact on earnings and the image of organization. Therefore, executives must take these factors into account, as this will have long-term implications on the firm. (Hua, 2011) (Bagh, 2011)

During the debate on the North American Free Trade Agreement (before its ratification), several international economists noted that the average wages and fringe benefits in Mexican manufacturing industries were about one-fifth of those in U.S. manufacturing, while the U.S. output per worker was about five times that of the Mexican output per worker. Based on your understanding of the Classical Model of Trade, is there any causal relationship between these two facts? Substantiate your response.

The classical model of trade is when there is focus on real time factors that will have an effect on input to include: labor costs and productivity. When you apply this to the U.S. And Mexico (before the ratification of NAFTA) there is a direct relationship between the labor costs and productivity. What is happening, are those areas with lower costs of labor will be less productive (under the classical theory). This is because there is no incentive to increase salaries or benefits. As, there are different trade barriers are in place, which makes it difficult for a country to export its products to markets where there are large amounts of consumers. Over the course of time, this will have an impact on productivity, with most employees unwilling to do more because there is little economic opportunity. (Villareal, 2010) (Gerkin, 2008, pg. 17)

However, once NAFTA was ratified is when this all changed. Part of the reason for this, is because the reduction in trade barriers meant that American firms could establish operations in Mexico. During this process, they were paying Mexicans lower wages in comparison with American workers. While at the same time, they offered more benefits in comparison with traditional Mexican employers. Over the course of time, this had a positive impact on the standard of living in Mexico. (Villareal, 2010)

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