Saving Money through Social Media

The recession has bred a new type of coupon: the group coupon. In recent months, several Web sites have launched nationwide giving customers discounts on restaurant meals, sporting events, spa treatments, golf outings — pretty much any expenditure that many people give up during economic downturns. The catch is that the coupon only applies if a certain number of people use it.

Questions:

1.  After watching the video and accessing http://www.groupon.com, explain the company’s business model. 

2. Do you think that the group coupon trend will continue?  Why or why not?

3.  Go to the “recent deals” in your area at http://www.groupon.com.  Pick one of the deals. If you were a company offering this deal and using the services of Groupon, what accounts would be affected by the  deals you provide?

Sources:

Eklund, Kevin. (2010) Best Social Group Buying Sites For Killer Daily Deals And Deep Discounts. Tomuse.com (Retrievable online at 

http://tomuse.com/group-buying-sites-coupon-deals-discount-savings/#ixzz0wt6rxlKihttp://tomuse.com/group-buying-sites-coupon-deals-discount-savings/)

Trejos, Nancy (2009). The Humble Coupon Joins Social-Media Web, The Washington Post, September 1 (Retrievable online at http://www.washingtonpost.com/wp-dyn/content/article/2009/08/31/AR2009083103837.html)

CNN Video. (2010). Group Coupon Business Soars, August 13. (Retrievable online at  http://www.cnn.com/video/#/video/tech/2010/08/13/am.group.coupon.business.cnn?iref=videosearch)

The Costs of Liposuction

Lots of people are curious about the price of liposuction (which is also referred to as lipoplasty and suction lipectomy). Although the procedure sports a somewhat hefty price tag, it is among the cheaper cosmetic surgeries available. Some the of the cheapest areas for liposuction are the arms, buttocks, female back, hips and outer thighs. These areas could cost around $1,500 to $5,000 to treat.

Questions:

For the following questions, pick an area of the body discussed in the article and answer questions 1-3.

1.  What factors can affect the overall cost? What qualitative issues are important before you chose the lowest costs in lipoplasty?

2.  What costs do you think are fixed costs relating to these procedures?

3.  What costs do you think are variable costs relating to these procedures?  What costs are mixed?

Source:

Heftel, Christian. (2010). What Would it Cost Me to Get Liposuction? MzoneArticles.com, July 30 (Retrievable online at http://www.mzonearticles.com/Art/28071/84/What-Would-It-Cost-Me-To-Get-Liposuction.html)

How Low Can the Costs Go?

India has developed the world’s cheapest laptop – a touchscreen device which resembles Apple’s wildly popular iPad but will cost just £23.

The prototype was unveiled this week by Kapil Sibal, the country’s human resource development minister, who said 110 million Indian schoolchildren would be the first recipients.

Questions:

1.  Find the current exchange rates and calculate the price of the laptop in U.S. dollars?  Show your work and the site you found to get the exchange rate.

2. What types of costs do you speculate that the country has been able to cut to achieve the £1,450 Tata Nano car and a mobile phone costing less than £11. 3 and now the £23 laptop?

3. What do you see as the biggest advantages are of this new laptop?

 

Source:

Halliday, J. (2010). India unveils world’s cheapest laptop. Guardian.co.uk, July 23 (Retrievable online at http://www.guardian.co.uk/world/2010/jul/23/india-unveils-cheapest-laptop)

Corporate Sustainability Can Mean Financial Reward, Despite Extra Costs

Tracking efforts in companies like Wal-Mart, Hewlett-Packard and Clorox, authors Ram Nidumulo, C.K. Prahalad, and M.R. Rangaswami, identified a five-stage process that will benefit companies as they navigate through the adoption of green business models.  In the article, the authors contend that early adopters of this process will develop competencies that will be difficult for their competitors to match. They also submit that adoption of these processes by corporate leaders will be key to real change within our economy.

Required:

1. If consumers will not pay more for eco-friendly products, where do the authors suggest that profitability will come from?

2. Give a specific example of how the authors point to redesigning operations can save money.

3.  How would you define “greenwashing?” Is it a good thing or a bad thing?  Explain.

 Source: Nidumulo, Ram, C.K. Prahalad, and M.R. Rangaswami (2009). Why Sustainability Is Now the Key Driver of Innovation. Harvard Business Review, September, pp. 3-10 (Retrievable at http://graphics8.nytimes.com/images/blogs/greeninc/harvardstudy.pdf)

Recessionary Cost-Cutting Revisited

In an effort to keep their heads above water in recessionary times, many companies ignored their traditional strategic plans. They grabbed at any transactions that were above variable costs in efforts to cover fixed costs. Moving away from value-based pricing, they relied on cost-plus pricing. Unfortunately, as this article mentions, cost-cutting can only go so far and then pricing strategies must be overhauled.

QUESTIONS:

1. According to the article, what are five signs that a pricing strategy needs to be changed?
2. According to the article, why isn’t profit margin necessarily the best metric when measuring the success of strategic pricing initiatives?
3. According to the article, why does cost-plus pricing have little to do with market reality?

SOURCE:
Ryan, V. (2009). “Price Fixing,” CFO (Retrievable online at: http://www.cfo.com/article.cfm/14456855/c_14457851?f=insidecfo)

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