Samsung electronics success by design

Samsung electronics success by design INTRODUCTION: A Technology-driven company like Samsung Electronics uses product design as a tool to improve their products characteristics helping them to achieve a competitive edge within the market. For many of the world leading companies design plays a fundamental role in their success, for them to have a good design will make their products better, quicker and cheaper. If a company can achieve this, they can keep their production costs down, but this can also allow them to charge a higher premium price for the successfully designed product. Consumer Purchase Decisions Do consumers make their purchase decisions solely based on the design aspect of a product? Does having a good designed product in the market place encourage the consumer to buy? Successful design is a way to exceed the users expectations, keep them happy, this will encourage the consumer to purchase, come back again and recommend products to others. Design makes a persons life better by improving the quality of their interactions with the environment. Design is a reflective conversation, a dialogue with a situation that involves people and their needs for artefacts that arise in their relationship with the global environment. (Gowen, n.d) Consumers purchase products that interest them, products that they are aware of, products that get their attention. Good design can improve the visual appeal, functionality or usability for a product delighting the consumer who merely expects to have their functional requirements fulfilled convincing them to purchase the product. A designed product can also appeal to the consumers emotional needs. People want fast cars: Ferrari, Lamborghinis, designer watches: Rolex, Breitlings that they will likely want to open their wallets and buy the product, but only a few will as this type of product is a luxury item in a niche market. The consumer is emotionally attached to the product but will be less likely to buy these types of items because of the cost. Consumers buy based on the benefits the product brings them, a product that they perceive as having a value, a product that meets their needs. Design can also allow the control of an outcome. Will the consumer buy the product or not? A good design will arouse desire, engenders loyalty and forms indelible emotional bonds with the consumer. Once the consumer is emotionally interested in a brand they are convinced that they cant live without it. A Consumer is more likely to buy a product that appeal to both their functional and emotional sides. To achieve this companies brand their products through their design to make them sell, offering customers something extra. A successfully designed product applies the power of the brand. One of Samsung Electronics initiatives was to globally brand their products through their Global Brand Communication Strategy. A strong brand identity encourages consumers to trust existing products and to try new ones. The brand gives a consistent message about the company and its products and services to the end user. A Consumer is more likely to purchase a product or range of products which have a reliably design, a good brand. The awareness of a brand in the design process enables the effective translation of the company brand into the retail environment and customer experience. A good example of a product that appeals to both their functional and emotional sides of the consumer is the iPod from Apple. In the market place there are many hard-drive based MP3 players available to the consumer. Apple is able to dominate the market through their product design whilst selling its products at a significant price premium. Apple to date consistently produces a sleek and luxurious iPod design that portrays the power of their brand. Apple have made the MP3 player be more than a functional purchase, they have made it an emotional purchase. A consumer is constantly engaged with design, sometimes without even realising. Every time a consumer carries out a task, checks their emails, go to their local supermarket someone has designed the experience you are having whether you have purchased a product or not. Successful design improves our day to day experiences by going beyond somethings functionality to make things look, feel, sound and work better. The design of a product has values, beliefs, and the opportunity to make a difference to the life of the consumer and will always be an important aspect in their purchasing decisions. But the design will not always be the main reason for the consumer to choose which product they purchase. The cost and quality of a product and the technology used will always be a huge factor for the consumer to consider and will almost always be defined by the type of product and the purpose for buying the product. But as we advance into the twentieth century will not consumers expect a good design product? Walter Herbst, CEO of the product-design firm Herbst LaZar Bell, once said, Good design is not good enough anymore. (The Power of Design, 2007) Design and Technology Samsung Electronics is a global leader in more than sixty different products with their main business focus in the areas of Digital Media, Semiconductor technology, the telecommunication Network, and LCD Digital Appliances. As a business Samsung Electronic centre their efforts on producing these types of high technology products. The consumer uses the design of a product as one their main influential factors when purchasing these types of products. But does the consumer again apply the same thought process when buying a low technology product? A product that is referred to as having a low level of technology will usually have been developed many years ago. Low-tech products can be purchased today but will work in the same manner as product that was manufactured 25 years ago. A good example of this is a manual tin can opener. Consumers everyday are still buying low-tech products. The manual tin can opener can be found in the kitchen in many of our homes, but for a product that has a simplistic design does the consumer still base their purchase decision on the design of the tin can opener or is it the cost that sways their decision? Is it the operation of the tin can opener that the consumer is interested in? But can not the way that the tin can opener function be referred to as the design? In todays modern society ascetics sensibilities are relevant to all products, regardless of their function (Holbrook, 1980; Holbrook and Anand, 1992; Holbrook and Zerlin, 1985). When a consumer is in the market for a low tech product the price must surely be an important reason for purchasing a product. If is understandably when a consumer purchases a high-tech product that they will pay a premium because of its technology. When given a choice between two products, equal in price and function, target consumers buy the one that they consider to be more attractive (Kotler and Rath,1984; Nussbaum, 1988). When a consumer purchases a product do they understand the difference between a high-tech and low-tech product. Low-tech products are not highly differentiated (Shapiro, Slywotzky and Doyle, 1997) and a differentiated product is evaluated and understood buy the consumer differently than undifferentiated products. This may suggest that the consumer evaluates low-tech products, which are likely to be undifferentiated, differently than they evaluate high-tech products. When the consumer makes their buying decision they evaluate high and low technology products differently to one and other but for both will usually make design the differentiator between competitor products. The design plays an important role in the success of a product and generates desirable consumption experience and favourably influences subsequent consumer behaviour. Consumers do not buy products for sensible, value-for-money reasons. The consumer purchases a product because they like it and the product appeals to them and makes them feel good. Therefore this changes the way in which a business advertises their product with less focus on product features and more on the design and lifestyle that the user can enjoy. Purchasing a designed product is more than buying its function. It is buying into a vision of one self as one would like to be. Samsungs Design Delivery Process and Design Capabilities Samsung Electronics Co. Ltd is a Korea-based consumer electronics company that has worked hard to refine its focus and alter its business strategies. Today, Samsung is one of the most successful global corporations, with high sales and earnings through its innovative technological design. In the 1990s Kun-Hee Lee (Group Chairman) made the decision to adopt design and use design as a differentiator and for competitive advantage. To do this Kun-Hee Lee (Lee) wanted to redesign Samsungs systems and processes to improve their design delivery process. This initiated a new management era for Samsung to open digital frontiers all over the world. The leadership of Lee has been a key to Samsungs success making Samsung one of the fastest growing brands. Samsung started its journey towards design excellence in 1993 and had its first design revolution in 1996. At the beginning of Samsungs design initiative they sent 17 of their designers to the Art Centre College of Design in California USA. This would broaden the designers ideas about design and help them to be creative. For Samsung this will help their employees to provide design solutions and to understand the process of product design commercialization. Samsung later hired the service of two consultants to help them start a design school to train their designers. In a constantly evolving, consumer electronics business Samsungs survival depends on their employees having the right skills to keep their products at the cutting edge of design and technology. The in-house school gave its designers the tools and confidence to risk think differently, it was vital for Samsung to pinpoint the right training for their employees through their own design school. Samsung also tried to incorporate Korean values into their designs. A cultural identity was important for Samsung to meet the emotional needs of their customers. Cultural values are, regarded to as the governing ideas and guiding principles for thought and action in a given society and a powerful force shaping consumers motivation, lifestyles and product choices (Tse, D., R. W. Belk, et al. 1989). Further to this Samsung introduced a common design language where all product characteristics were to have consistent features and high levels of convenience. This would give the designers a common goal and help them to speak with fellow designers about their designs. In 1996 Samsung engaged the services of Design Consultant, Tom Hardy to help improve their design capabilities. Hardy would assume the role of Corporate Design Advisor. Hardy was a design strategist and the creator of the Verbal-Visual Framework (VVF) methodology, his consulting work involved strategic brand design direction for Samsung intergrading business strategy to improve the customers desire for the product. To Improve Samsungs design capabilities the company also started sending their senior designers abroad to expand their knowledge and help them to come up with new ideas. They sent their designers to different diverse industries such as cosmetics, furniture and fashion to encourage different thought patterns enabling them to think outside of the box. Samsung also opened six design centres worldwide which included research centres and design labs to help improve their design capabilities and encourage a global perspective. This changed Samsungs engineering-driven culture; the designers had to find a way to put their boxes around the engineers devices. In todays environment, designers often come up with product innovation, who then asks engineers to put their devices inside the designers boxes. Lees design vision for Samsung was to create a design friendly culture to improve customer services and corporate spirit that contributes to the well being of society. This helped to change Samsungs management and employees mind set of their product design from quantity to quality. To improve Samsungs international design capabilities they also sent their designers on a world wide tour to help them understand the global market and expand their way of thinking. An overseas specialist course nurtured for the excellence of their employees. Lee also broke down the Confucian hierarchies at Samsung. Designers were freed from dress codes and other constraints that hinder creativity. Lee also let younger designers take a larger role and encouraged them to challenge their superiors. All designers worked in common areas with hardly any segregation; functions were collaborated to improve functional communication. This improved team building and encouraged individuals to speak their mind and discuss their design ideas, team meetings were regularly held to assess new products and evaluate designs. The company also introduced the new position of Chief Design Officer to give greater voice for the design function. Since re-designing Samsungs systems and processes to improve their design delivery process, Lee had more than doubled the ranks of Samsungs designers by bringing more than 300 new recruits which was helped with a vastly increased design budget. Samsung brought a lot of change to its people, processes and systems to improve its design delivery process to have greater design capabilities and a better design philosophy, since this change the Korean company has won 19 citations in the prestigious Industrial Design Excellence Awards (IDEA). Samsung spend a lot of time and money to achieve design excellence but which part of Lees new management design initiative had the greatest impact on improving their design capabilities? Before Samsung could become a world leader they needed good designers and the right people to achieve this, hence Samsungs educational approach to improve their design capabilities. Training their employees to be capably of good designs defiantly gave them an advantage over the competition which also helped them to develop and attract new people to the organisation. The design school could help their employees to learn and understand the company core values and the vision that Samsung were trying to portrait. The design school would have had a critical impact on Samsungs successful product design; it would have enabled the designers to learn from other designs and each other. The designers would have learnt how to evaluate the quality of the product and how to maintain the quality throughout the design delivery process. If is important for the designer to identify the characteristics of a product that make it either a failure or a success. By educating in house Samsung would have also been able to control its quality assurance process better and reduce warranty issues. The design school would have helped the designers to study different products with similar features, through identification, analysis and evaluation before starting their design making the design capable of success with a competitive advantage of the competition. The design school would of increased experience and knowledge of Samsungs designers through the broad educational background of Samsungs design consultants which w ould have helped to educate and provide answers to diverse technical design problems. The design consultants would provided invaluable experience to the design delivery process. A part of Samsungs educational program was to also send their designers on a world wide tour. This was the start of Samsung becoming a global company. It is important for Samsung to have key personnel with global competencies giving them the ability to understand foreign cultures and design. Another key part of Lees new management design initiative which had a huge impact on improving their design capabilities was the change in design culture of the company. Lee achieved this by incorporating Korean values into their designs to meet the emotional needs of their customers, and broke down the Confucian hierarchies at Samsung. Samsung also introduced worldwide design centres to change Samsungs engineering-driven culture. Business Culture brings together the techniques and strengths of a business helping it to think with the creativity and dynamism of the cultural world. Having a good culture at Samsung would have exploited their full potential and help to realize their aspirations. In todays social and economic market there is a huge advantage in having business culture to develop greater communication and global strategies to achieve good design capabilities. Samsung brought a lot changes into their design delivery process and all would have played a vital part in their success. To improve a companies design capabilities people, the designers, is key to the success. Nothing can be achieved in todays climate without good people. For a company to have good people they need skills and education. Having a dedicate Design School to educate your people also had a great impact in helping the company improve its design capabilities. The Future of Design The term design recently has become the buzz word for many people. Consumers are increasingly assessing products they buy on the basis of the design. In Corporate businesses like Samsung and even in small firms design is increasingly understood to give a company a competitive edge. A good design will also aid in improving production processes. But as we move into the future will there be a time where design would cease to be a useful differentiator? There is an Increasing awareness of the meaning of design and what design actually is and what can the design industry offer. In todays economy many managers of business organizations need to be convinced of the business case for making investments in design. Many managers believe that the costs of the initial design investment will not be paid back through sales. But a designed product is usually matched sufficiently by increased revenue and sales paying back the initial costs. The graph below represents a study carried out by the British Design Council of the share prices of 166 UK design-led companies. The companies were grouped; Design Portfolio represented 63 companies who were chosen for their consistent showing in various design award schemes and Emerging Portfolio represented 103 companies whose awards success approached that of the Design Portfolio. If can be seen from the graph that both outperformed the FTSE All Share and FTSE100 which represent about 81% of the market capitalisation of the whole London Stock Exchange. Companies like Apple and Samsung that use design for there future initiatives would greatly help the business case in making design investments and back the employing of professional designers. The design process can be very complex and successful design rests upon future investments in methods, techniques, education, people and time as seen from Samsung. The start of the design era is relatively resent and the future of the design industry itself can take many forms and may be likely to develop. Many global manufacturers carry out their design work internally in their own design departments and are the leaders in the design industry. As they carry out their design work in house there may be no need for them to hire designers from outside which may have an effect on the future of smaller designer firms. But on the other hand this will cause the global corporations to build up larger in-house design departments and increase their staff. As we move into the future surely design will become more complicated and can no longer be simply or a product add-on. Instead design should be seen as having a good competitive characteristic for all products and services. All businesses want to compete in the market place and thrive on huge sales and profits, they want to sell the best product and want their customers to be amazed by their design. If this carries on happening at a global scale the design industry will grow to extend where design will always be the differentiator to the consumer. This would also create more jobs in the design sector. Many companies carry out research on consumer spending and analyze future technologies, this helps anticipate future consumer needs and to determine future design requirements. While regular market and research data can help to identify consumer needs and future trends in order to determine future design requirements, specific future focused trend analysis is often used. This type of analysis will intend to include consumer behaviour, product preferences, new service needs and social, economic or environmental changes. For design to be a useful differentiator in the future, consumers need to be spending money on new products and the development of new technologies is needed to be able to design new products. As years pass more products will start to become the same, and then it will become more important for products to be different. Good product design can help manufacturers to differentiate their products from their competitors and also define and reinforce the companys brand. Norio Ohga, Chairman and CEO, Sony said At Sony, we assume all products of our competitors will have basically the same technology, price and performance, and features. Design is the only thing that differentiates one product from the other in the market place. In the future things will start to change, tighter regulations will be put upon companies to design products to tighter requirements that are recyclable and reparably. Due to the environmental issues with pollution longer product lifetimes will be needed through more advanced design giving a better quality product. In the Future businesses must be able to take new design platforms to the next level and provide product life-cycle management and operational project execution. Businesses must be in the position to accept new technology and be able to integrated new methodologies, processes and systems. Failure to do so will low down the new and modern future of design. Today and in the future design will always offer considerable benefits to businesses, consumers and products and will help them to:  § Increase the perceived value of the product  § Increase the aesthetic and visual quality of the product  § Improve the ease of manufacture for the product  § Reduce impacts on the environment  § Improve the ability for business to market their product  § Enhance corporate vision and successful branding for the product Design will always be a useful differentiator for the consumer as Design is the planning that lays the basis for the making of every object or system. For design to cease as a useful differentiator the world would have to stop producing products. In price sensitive industries the design will act as a differentiator but may not be the main differentiator for the consumer. In the future design will not cease to be a useful differentiator, but design will change as technology becomes more advanced. REFERENCES: Active Knowledge Modelling (April 2009) The Future of Product Design and Life Cycle Management, [www] Available: (www.activeknowledgemodeling.com/2009/04/24/the-future-of-product-design-and-life-cycle-management/) [11 December 2009] Bloch, Peter. H (1995) Seeking the Ideal Form: Product Design and Consumer Response, Journal of Marketing, July 1995, Vol.59, pp. 16-29. Fast Company, (Dec, 2007) The Power of Design [www] Available: (http://www.fastcompany.com/magazine/95/open_design-index.html) [9 December 2009] Gowen, Melanie (n.d) To Make a Difference by Design, [www] Available: (http://blog.genuinedesign.com/?p=34) [11 December 2009] Kellar, Gregory M. (Feb, 2003) An information theoretic approach to modelling customer satisfaction for low-tech industrial offerings, Journal of Academy of Business and Economics, Feb, p. 1. Kester, David (2004). The Impact of Design on Stock Market Performance, an Analysis of UK Quoted Companies 1994-2003, Design Council (http://www.designcouncil.org.uk) [13 December 2009] The Free Library (n.d) An information theoretic approach to modelling customer satisfaction for low-tech industrial offerings, [www] Available: (http://www.thefreelibrary.com/An+information+threoretic+approach+to+modeling+customer+satisfaction+-a0113563622) [11 December 2009] Tse, D., R. W. Belk, et al. (1989) Becoming a consumer society: A longitudinal and cross-cultural content analysis of print ads from Hong Kong, the Peoples Republic of China, and Taiwan Journal of Consumer Research, 15, March, pp.457-472. Chitturi, Ravindra (2009) Emotions by Design: A Consumer Perspective International Journal of Design, Vol.3, No.2, 2009.

Adidas strategy Essay

Adidas AG is one of the world leaders in sportswear, equipment and accessories. In 2011, the company recorded a net income of $934.3 million, an increase of 18.3% over fiscal year 2010. Adidas’ excellence stems from its strong focused differentiation strategy. Focus on research and development has facilitated continuous development of new products and it plans to leverage its strong brand portfolio to create profits from its innovative products and by establishing robust retail operations. adidas’ goal is to be the leading sports brand in the world. One major lever to achieve this is the brand’s broad and unique product portfolio spanning from apparel and footwear for professional athletes to premium fashion. The company’s leading market position is built on its portfolio of strong brands like adidas, reebok, and TaylorMade. It allows adidas to address multiple consumer needs, exploit market opportunities from various angles as well as be less affected by one-dimensional market risks. adidas’ commitment to product innovation by focusing on research and development differentiates the brand from competitors and provides a solid platform for future growth. 1) Distribution: Strong brand portfolio to establish a strong retail presence and increase profit margins by increasing retail sales as a percentage of total sales. Adidas currently operates 2,041 stores for the adidas and Reebok brands worldwide. Adidas’ strong brand and enhanced retail presence generates brand loyalty, which enables easier customer recall and gives adidas a competitive advantage. Revenue: $18,580.2 million; 11.3% Operating profit: $1,407.7 million; 13.1% 170 subsidiaries in Europe, the Americas and Asia Wholesale, retail and other businesses 2) Research and development: $160.1 million in R&D

High Cost of Poverty in the United States Essay

Poverty can be defined in many different ways. In certain attempts, it can be used in numbers, while other definitions can be more vague, and used to define a life style. The defined term of poverty is â€Å"the state of one who lacks a usual or socially acceptable amount of money or material possessions†. (Mirriam Webster, 2011) According to the U.S. Census Bureau, more than 37 million people live below the poverty line. â€Å"The ranks of America’s poor swelled to almost 1 in 6 people last year, reaching a new high as long-term unemployment left millions of Americans struggling and out of work. The number of uninsured edged up to 49.9 million, the biggest in more than two decades.† (Yen, 2011) Poverty is obviously very common in our country, and all over the world. Even with the United States being the wealthiest country in the world, we still have many Americans who struggle everyday to survive. The topic I chose to focus on is the high cost of poverty, and ho w it actually costs more to be poor. Although it seems like an oxymoron, it is a very realistic topic. I chose this topic because I have personally been involved in both sides of economic statuses. Although I do not live in extreme poverty, I technically have an income that falls within the line of poverty, but I do not have a family to support and have student loans to live off of. I wanted to know further detail of how those who only experience poverty, have limited choices, and how their disadvantages actually cost them more money. My personal life experience is one from an upper middle class family, and was raised in a wealthy suburb in a predominately white community. My family never had financial struggles, so I had no experience with battling bills. I worked in high school and had my own money, but I had nothing to pay for. I thought I made a decent amount of money making $7 an hour, and only working 15-20 hours a week. For a person with no bills or rents to pay for, $150-200 a week was a lot to me. Recently, I moved out of my parent’s suburban home and into the city to be closer to school and gain some independence as an adult. I make about $250-400 a week, depending on the activity of the restaurant I waitress at. I soon realized that I am very dependent on my two roommates to split bills and rent, because I could never afford to live on my own. Although we live in a low income neighborhood, the cost of food, rent, electric, heat and cable bills stack up, and I struggle to pay them. I also only pay one third of the full cost. I have a car I need to put gas in, a gym membership I pay monthly and credit card bills every month. I now see how people that make just as much, or less than I do, struggle even more to make ends meet when their income is at the head of the household. I wanted to show to people that it is more expensive to be poor, because of the lack of resources, income and credit, and also what their options become for survival due to these circumstances. I also did a quantitative study on renting versus owning an item, to show that it actually costs more to rent something than to purchase it upfront. I chose to sample the same three items from two different stores, and recording the prices to see the differences of renting and owning it. I am aware that most individuals in poverty, usually do not have enough money to purchase items or homes upfront so they often rent them, thinking they can afford weekly or monthly payments to stretch out their income to afford other life necessities. My first concept I chose to focus was access to food. I thought about how much I spend on the food I enjoy for just for me personally, and I think it is expensive. I enjoy fruits and fresh vegetables, brand name cereals and expensive breads. Since I grew up eating the certain brands, I continue to try and afford the things I like. Being an individual with a low income, I cannot imagine supporting not only myself, but a family solely on my income. In this research paper, I will explain the hardships of getting to and from the grocery store, and if you cannot, you need to shop elsewhere, such as corner stores.† Prices in urban corner stores are almost always higher, economists say. And sometimes, prices in supermarkets in poorer neighborhoods are higher. Many of these stores charge more because the cost of doing business in some neighborhoods is higher.† [ (Brown, 2009) ] This can lead to spending extra time, danger, stress, and in the end, costing the individual more money. It also forces those with less money to spend, higher risk for obesity. â€Å"Inequitable access to healthy foods is one mechanism by which socioeconomic factors influence the diet and health of a population†. (Drewnowski, 2009) Since they do not have the money to afford healthy choices, they must choose foods that they can stretch out in order to feed their families, even if it is not healthy. My next concept I chose to study was the price of minimum wage, and how it isn’t really the minimum coverage of standard living. In New York State, the minimum wage is $7.25. â€Å"About 20% of American adults who have jobs are earning less than $10.65 an hour. Even at 40 hours a week, that amounts to less than $22,314, which is the poverty level for a family of four†. [ (Isidore, 2011) ]. This simply states that a monthly income of about $1,000-$2,000 is almost impossible to survive on. This may lead to bad credit, forced into renting, and having people do dangerous or criminal activity to get money or items for their families. The poverty rate for all people disguises substantial variation between racial and ethnic subgroups. Poverty rates for blacks and Hispanics greatly exceed the national average. According to the United States Census Bureau, â€Å"In 2010, 27.4 percent of blacks and 26.6 percent of Hispanics were poor, compared to 9.9 percent of non-Hispanic whites and 12.1 percent of Asians.† (Bureau of the Census, 2011) Poverty rates are most often the highest for families headed by single women, particularly if they are black or Hispanic. â€Å"In 2010, 31.6 percent of households headed by single women were poor, while 15.8 percent of households headed by single men and 6.2 percent of married-couple households lived in poverty.† (Bureau of the Census, 2011). â€Å"The official poverty level is an annual income of $22,314 for a family of four â€Å". (Yen, 2011) On average, depending on the size of a household, a family living in poverty has an average income of less than $20,000. This can include couples with children, single parents with one or more children. Needless to say, this is not a lot of money to support a family on, and thus they have to take extra steps to survive, which results in higher costs, and contributing to the statement of the high cost of poverty. You have to be rich to be poor. This is what some people, who have never lived below the poverty line, don’t understand. The poorer you are, the more things cost. Additional steps in money, time, hassle, exhaustion, and danger. This is a fact of life that television, magazines and media, do not often explain. Take for example, food. First, if you do not have a car, getting to the supermarket can take anywhere from one to three hours of public transportation, and costing a price to use the bus or a taxi. To use the method of public transportation, it is necessary to hav e to load all of your groceries into the bus, or taxi. This is limiting to space and capability of carrying all of the groceries. A simpler version of this would be to walk to the corner store, for free, but where the grocery selection is limited and prices are doubled. â€Å"Prices in urban corner stores are almost always higher, economists say. And sometimes, prices in supermarkets in poorer neighborhoods are higher. Many of these stores charge more because the cost of doing business in some neighborhoods is higher.† (Brown, 2009) Also, if you are living in poverty, you will most likely not be making enough money to buy $100 or more worth of groceries for your family. This results in the person or family spending more money, to either get to the grocery store, or paying more for the food to save money traveling to and from. In the end, it is a losing situation, and the poor are paying more in the end than someone who is wealthy and has access to the necessary resources. Spending more money than middle class, or wealthy class to buy groceries is one example of how high the cost of poverty is. If the poor is spending money in the corner stores, they are most likely not getting nutritious foods or healthy choices that most corner stores do not carry. Obesity is a direct result from that, seeing that unhealthy foods cost way less than healthy eating does.† Obesity and type 2 diabetes follow a socioeconomic gradient. Highest rates are observed among groups with the lowest levels of education and income and in the most deprived areas. Inequitable access to healthy foods is one mechanism by which socioeconomic factors influence the diet and health of a population†. (Drewnowski, 2009) Low income levels leave people no choice but to choose foods that are nutrient poor, because it is a price that can afford and something they can stretch out among their whole family to feed them. It is also the best way to provide daily calories at an affordable c ost. Those who are struggling financially are clearly the most disadvantaged when it comes to healthy eating habits. In our grocery stores today we have so many artificial sweeteners, preservatives, fats and sweets that are sure to taste good, but not good for our health. Fats and sweets tend to cost way less, where as healthy foods cost more. It makes no sense to have unhealthy foods cost less than healthy foods, but it is the manufacturing and production that determines the cost of foods. Therefore, those who do not have the money to purchase healthy options have to choose foods that fit in their budget. These are usually unhealthy, packaged, canned or frozen options that have little to no nutritional value. Even those families that have government support, welfare checks and food stamps are still on a restricted budget. The foods they are allowed to get for free or reduced price are items such as fruit juices, canned fruits, cereal, grits, and corn tortillas. These items are all packed with sugar and calories which is not aiding in healthy lifestyles. â€Å"Researchers have shown that low-income neighborhoods attract more fast-food outlets and convenience stores as opposed to full-service supermarkets and grocery stores† (Drewnowski, 2009). This also relates back to travel costs, transportation and affording food. Since it is easier to get to the corner stores, it is a disadvantage to the customers because the corner stores are usually just packed with unhealthy options. It is economic deprivation that is a key factor in obesity, and one key factor of weight gain may be low diet cost. Another example of how the high cost of poverty is, is the price of minimum wage and if it really acceptable to be the minimum wage you can survive on. Most people and experts agree that to get out of an economic slump, we need more jobs. But another problem is that millions of Americans already have jobs that don’t pay very much. â€Å"About 20% of American adults who have jobs are earning less than $10.65 an hour. Even at 40 hours a week, that amounts to less than $22,314, which is the poverty level for a family of four†. (Isidore, 2011) In New York State, the federal minimum wage is $7.25. Minimum wage is supposed to be the wage in which it is the bare minimum amount of money that one can survive on. Even at 40 hours a week, that equals to be $290 without taxes taken out. This would be a paycheck of about $250 for one week, and this equals about $1000 a month. Taking into consideration that those who are the working poor, they need to spend more money getting to and from work, which also costs extra time. They also need to pay bills, feed themselves and their families. For an individual making $1,000 a month, this is almost impossible to survive on even in minimal conditions. An average cost of rent in Buffalo NY is fairly inexpensive, and taking into consideration that Buffalo on of the poorest cities in the United States, we have to be aware that there is many people in the city below the poverty line. According to Rentjungle.com, An average one bedroom apartment in Buffalo is $679 a month and two bedroom apartment rents average $750. To see this in comparison to another large city, one bedroom apartments in New York City rent for $2356 a month on average and two bedroom apartment rents average $2767. Minimum wage is clearly not enough to survive on if your average monthly income is $1000. Out of $1000 income, you have to set aside an average of $600 for rent, leaving you $400 for car fees, if you have one, or transportation fees if you depend on them. If your apartment does not include utilities, you need money for electric bill, gas bills, which can skyrocket in our area when it is winter, cable or internet if possible, and food budget. Another example of a disadvantage the poor have is the actual process of cashing their check to get their money. The rich or middle class usually have the option of direct deposit for their paychecks. The poor have check-cashing and payday loan joints, which cost time and money. The poor pay more for financial services, and many people who cannot be capable to have a bank account may have to pay extra money for a money order to pay their bills and cash their checks. â€Å"They may pay a 2 percent check-cashing fee because they don’t have bank services.† (Brown, 2009) Many people in poverty literally live paycheck to paycheck. If they have a bill that’s due, they do not have a luxury of online payments, because they cannot afford computers or internet, so they have to mail it. If they do not have the money in time for a bill, they have to wait for their next paycheck. This can cost late fees, and in an end result, spending more money than a person with those luxuries. While many people are surviving in this manner, people will look for any way to get by without spending their money. Many people in poverty may depend on credit cards to help them afford things they cannot. Credit cards can help out for temporary reasons, but if not paid off, this can cause more problems. People who are struggling to pay their bills will most likely have bad credit, and have no other option but to rent homes, items, and many other things they cannot afford, due to their credit and income. Bad credit also costs more money than those with good credit. If a person does not have enough money to pay off bills in full, they will get extra interest charges and fees that stack up and end up costing more for them. Since I did not have the option of going into homes of the people in poverty, I decided to do research on items, rather than homes, to compare the costs of rent to own. Poor people do not have the option of owning homes, because of their credit and/or income, so they have no choice but to rent. I wanted to see if the price you pay for being a low income individual actually costs you more, than to own something. This is to show that poverty does in fact cost more to live I chose to look at a refrigerator, a range and a television from two different department stores to compare prices on a rent versus owning the item. My first item, the refrigerator, a 25.3 cubic foot, Side-by-Side with thru-the Door Ice and Water, Black color, was $799.99 to own immediately from Best Buy. At Rent- A-Center, the same exact refrigerator was $37.99 to rent per week, for 91 weeks. At first, it seems like a cheap deal and a realistic price for those who do not have the $799.99 upfront to spend. When you do the math, $37.99 per week for 91 weeks is $3457 total to own after renting at the $37.99 per week. This is over four times the price it would cost to buy at Best Buy and own immediately. I also learned that consumers can get a â€Å"discounted† price by purchasing the item after 90 days, which seemed a little better to me. When I did the math again, it would equal out to be $1728 total to own after renting for 90 days. This is still about double the price of buying it immediately. My next item I compared was the range. A GE-30† Freestanding Electric Range, Black-on-Black Quickset III oven. At Best Buy this was $429.99 to own immediately. Rent-A-Center had the same oven for $24.99 to rent per week for 74 weeks. The total to own after renting for 74 weeks at $24.99 was $ 1849. After 90 days of renting, the total price to own would be $924.63. The prices are clearly different, but yet it seems manageable when you are there. Looking at a price of $25 a week for a nice, brand new stove seems pretty manageable if you have a low income. When you look at the math and how much it will actually cost to rent rather than own, it is actually over four times the original price to own the oven upfront. The last item I compared was a television, an Insignia © Advanced 42† Class/1080p/ 120Hz/ LCD. This item from Best Buy was $749.99 to own immediately. Rent-A-Center had the same television for $39.99 to rent per week, for 74 weeks. It seems like a reasonable, affordable price until you calculate it and realize that it would cost $2959 total to own after 74 weeks of renting. This is about four times the original price. After 90 days of renting, the â€Å"discount† price to own, at Rent-A-Center is $1479, still double the original price. All three of the items I chose to compare are most needed in homes, with the exception of the television. Although it is not a necessity, almost all homes have at least one television. When those who are living in poverty want to own these items, they will have struggles to afford paying them. They turn to the option of renting because they see the low price and it appeals that it is affordable to them. The small payments they think they can afford weekly add up and end up costing them quadruple of original prices. In conclusion, being poor is a struggle. It costs much more money and time to be poor. Working lots of hours and making little money takes a toll on many people here in the United States. I wanted to show readers that this is a very realistic topic to study, and that the cost of poverty is high. The obstacles and disadvantages those in poverty have to deal with are frustrating, stressful ,and in need of change. Poverty is a very difficult thing to understand and take control over because lifestyles cannot be forced upon. People choose their own paths of life, and lack of education, jobs, motivation, children and many other situations are uncontrollable. In our society, I think it is important to know the struggles of those in poverty stricken situations and to understand their hardships. This can be motivation to those in it, or headed towards it in their future. Learning about the costs and disadvantages poverty comes with can be a motivating factor for people to go to college and get an education to receive a well paying job, get a job in general, educate themselves about saving money, and learning that renting is not cheaper than owning. Hopefully my research will be beneficial to those in college, living on low income, to do well in school to gain better jobs, educate those in poverty about the costs they are spending and figuring new alternatives, and to open eyes to those that think it is cheap to be poor. Being in poverty costs time and the cost of poverty is certainly high. In the end, the high cost of poverty will be a never ending cycle of time and money and I hope this research paper opens the eyes of all individuals to help make this problem change. Bibliography Brown, D. L. (2009). The High Cost of Poverty: Why the Poor Pay More. Lexis Nexis Academic , A-4. Bureau of the Census. (2011). Income Alternative Poverty Estimates in the United States. Washington D.C: U.S Census Bureau. Drewnowski, A. (2009). Nutrition Reviews: Obesity, diets, and social inequalities. Seattle: University of Washington. Isidore, C. (2011, September 27). CNN Money. Retrieved November 15, 2011, from Not getting by on minimum wage: http://money.cnn.com/2011/09/27/news/economy/minimum_wage_jobs/index.htm Jason M. Sutherland, E. S. (2009). Getting Past Denial — The High Cost of Health Care in the United States. The New England Journal of Medicine , 1227-30. Mirriam Webster. (2011). Mirriam Webster Dictonary. Dictionary . Brittanica Company. Yen, H. (2011, September 13). Yahoo News. (A. Press, Ed.) Retrieved November 15, 2011, from Census: US poverty rate swells to nearly 1 in 6: http://news.yahoo.com/census-us-poverty-rate-swells-nearly-1-6-142639972.html

Case Study Essay - 849 Words

CASE 10: Zappos—They Do It with Humor When Zappos CEO Tony Hsieh was the featured guest on The Colbert Report, host Stephen Colbert grilled him about the companys success and customer loyalty. Hsieh replied that its Zapposs goal to deliver WOW in every shoe or clothing box. The company is consistently ranked highly as one of Fortunes Best Companies to Work For Amazons Jelieoris liked Zappos so much he bought the company. Customers First Zapposs relentless pursuit of the ultimate customer experience is the stuff of legend. The company offers fast shipping at no cost and covers return shipping if you are dissatisfied for any reason at any time. The Zappos brand is less about a particular type of product and more about providing good†¦show more content†¦Staffers blow horns and ring cowbells to greet participants in the 16 weekly Louis, and each department tries to offer a more outlandish welcome than the last the original idea was to add a little fun. Hsieh says, but it grew into a friendly competition as the next aisle said, We can do it better7 Those who want to learn Zapposs secrets without venturing to Las Vegas can subscribe to a members-only community that grants access to video interviews and chats with Zappos management. Ask nicely and the company will send you a free copy of their Zappos Family Cul-ture Book a compilation of employees ideas about Zapposs mission and core values. Hsieh has his own tome, too—Delivering HaPPiriess. Bider 33uctiactat7 Hsiehs latest move to shake up the world of organization cultures is to embrace a fashion-forward concept called Holacracy. Trade-marked HolacracyOne, it is described as an approach that replaces. todays top-down predict-and-control paradigm with a new way of achieving control by distributing power* In Zapposs holacracy, employees are partners and managers dont exist. Partners hold power distributed by the Holacracy Con-stitution. 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