Comm 101 Reflective Paper

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• 10 IMPORTANT CONCEPTS LEARNED IN COMM 101:

#Decision Driven Marketing#

• What?  Decision driven marketing is to identify critical decisions involved in successfully marketing a firm’s products or services and to focus on improving the effectiveness of those crucial decisions. The most innovative challenge is that the company needs to make decisions at the seam and to eliminate explicit boundaries of departments. Therefore, it is required that marketing section to share decision-right in partnership with other groups.
• How?  Shared decision integrates marketing department with other sections in the firm, thus making all the sections more effective since they all aims at improving the critical decisions of a firm. For example, if marketing cooperates with IT department, they would have a deeper insight into the market trend and their customers’ tastes and preference; thus, the process would turn to data-driven marketing. Such collaboration would significantly improve the utility of marketing.

#SWOT Analysis#

• What?  SWOT stands for Strengths, Weaknesses, Opportunities and Threats, and it can provide fundamental analysis as well as insight of a firm’s situation. As we know, Strengths and Weaknesses are internal analysis while Opportunities and Threats focus on external environment of the certain company. Also, companies can connect those four sections and come to S-O, W-O, S-T and W-T analysis which serve as the basis of improvements and to help redistribute their limited resources as well as redesign their activities to focus on what they are expert in and what they can expect from.
• How?  SWOT analysis combines all fields in a business model such as finance, marketing, operations and so on since all those mentioned above can be either a company’s strengths or weaknesses. Example that can serve the concept is our Assignment 1-SWOT analysis of TESLA. It is impossible and unpractical to put forward any suggestion only with brainstorming instead of analytical base. However, after finishing SWOT matrix, we gain a thorough understanding of the firm TESLA, knowing how to maximize strengths whilst minimising weaknesses. Therefore, we can figure out feasible solutions to make TESLA more competitive.

#Business Model Canvas#

• What?  Business Model Canvas is a toolkit that helps people better and deeply understand the core value of a business; it is also a tool that creates value, delivers value and captures value. The canvas consists of nine grids and each grid has strong interconnection with other sections. For example, a firm’s customer segment is determined by its value proposition because it is what the company offers decides what kind of consumers would be attracted and furthermore, its value proposition and customer segment jointly tell the relationship between the firm and customer base.
• How?  Similar with SWOT Matrix, Business Mode Canvas also serves as an analytical tool for companies; however, the canvas is concerned with internal structure while SWOT also emphasizes exterior environmental impact. Moreover, Business Model Canvas also relates to marketing and finance: customer segment and customer relationship is based on consumer behavior analysis and decision funnel tool; and revenue streams and cost structure deal with revenues and costs which are the two basic elements of financial accounting. For example, when we worked on group assignment, we did finish two business model canvases, one is for current situation and the other is for after adjustment. To come out those two canvases, we did comprehensive analysis on marketing and financial situation. 

#Financial Accounting#

• What?  Financial Accounting is a specialized accounting method that keeps tracks with a company’s financial transactions with three basic features: open, historic, adhering to GAAP. Four crucial types of statements are income statement, balance sheet cash flow statement and retained earnings statement. Financial Accounting is the most important concept in financial aspect in business.
• How?  Financial Accounting is the “opposite” of Managerial Accounting because Managerial Accounting is for internal use to improve management but Financial Accounting aims at providing an overall sight to the market. Those reports can be regarded as useful indexes to measure the efficiency of CSV. In addition, based on the performances shown in financial statements, companies would make some alterations which would accordingly affect firms’ operations and marketing strategies. For example, because of lame financial statements, investors showed little interest and therefore, Jacobs and Juicy Couture had shut down all their physical stores throughout Canada to reduce costs.

#Time Value of Money#

• What?  Instead of simply using the nominal value of certain amount of money, time value of money offers an more accurate evaluation method by interpreting current value into future value or conversely. Due to several outer facts such as inflation and the chances that people can make investments or compound interests, the value of current currency is larger than the same amount in the future. Time value of money is an effective means to assess the true value of money.
• How?   Time value of money is an important idea in accounting and is related to companies’ operations when considering various offers. A classic case is that in 1987, Rosalind Setchfield won a grand prize with over 1.3 million dollars reward but she would get the total amount in 20 years. However, in 1995, Singer Asset Finance Company in Florida offered a deal of 140 thousand dollars in exchange for her payoff in the next 9 years and the deal is higher than the sum. The firm was willing to offer the deal because of its estimation of time value of money.

#Porter’s Five Forces#

• What?  The model regards five essential forces which decide the scale as well as the degree of competition. It provides a silhouette of macro-economics, thus helping firms isolate from competition to gain larger market share.
• How?  Porter’s five forces model is the improvement of SWOT analysis and it has strong connections with transient strategies because the conduct process would have significant effect on firm’s as well as market’s structure in short term. Moreover, to better defend the forces, firms need to apply Porter’s Generic Strategy by cutting cost, focusing and differentiating companies’ products to be more competitive.

#Disruptive Innovation#

• What?  Disruptive innovation is to help create a new market and value network by destroying current model, and the typical way is lowering price as to achieve special customer segment and impact the whole market structure.
• How?  Opposite to sustaining innovation, disruptive innovation strongly relates to Generic Strategy and accounting realm since to implement DI, companies need to build up cost leadership to lower their cost, making it possible to lower the price; all the changes above belong to accounting field. Dell adopted just-in-time to manage the production of computer accessories; and it significantly reduced its inventory cost. The innovation also resulted in absolute advantage in finance.

#Creating Shared Value#

• What?  The concept of CSV is like an integration in which companies not only care about their profit-maximization, but also aim at maximizing benefits of all other departments. The value created is economic as well as societal.
• How?  CSV is the reinforcement of CSR, because CSV does emphasize CSR while in pursuit of maximum profit in the meantime. Besides, CSV is the key of social entrepreneurship and the application of Freeman’s Stakeholder Theory. Adidas is a good example; Adidas group has partnered with Nobel Laureate Muhammad Yunus’s micro-finance organization, Grameen Bank to manufacture a low-cost shoe for the poor in Bangladesh. But they are still making profit for those products.

#PoPs vs PoDs#

• What?  PoPs are points that consumers could not distinguish among numerous products and PoDs are what make one company stand out in the whole market.
• How?  Although PoPs are preconditions that allow companies show up in certain market, PoDs are the key contents that help companies position themselves better. Moreover, dealing with marketing, companies should highlight their differences, convincing consumers to choose them instead of other competitors. For example, Tata’s vehicle products are similar to other cars because they are all transportation tools as well as provide customers with driving leisure. However, Tata positions its cars as the cheapest cars in the world as its PoD to attract customers with low purchasing power and gain larger market share.

#Value-based Management (VBM) #

• What?  Value based management tackles the problem of unclear performance target and improper alignment with the ultimate goal of creating value. VBM is all about creating value, managing for value and measuring value. It aims at either maximizing profit of shareholders or serving for certain organization.
• How?  The process of value based management depends on the company’s core value; therefore, value proposition strategy is the key to success of VBM. In return, VBM helps improve firm’s value proposition because of better consistency. What’s more, one of the basic factors is to create value and maximize profits of shareholders; so VBM is also associated with CSV concept. However, the main difference between these two concepts is that VBM method only deals with inner-enterprise field to make enterprises more profitable while CSV focuses on all kinds of fields which are economic, environmental, societal etc.